[Federal Register Volume 59, Number 232 (Monday, December 5, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29853]


[[Page Unknown]]

[Federal Register: December 5, 1994]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 30

 

Foreign Option Transactions

AGENCY: Commodity Futures Trading Commission.

ACTION: Order.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'') is 
authorizing option contracts on the LME Aluminum Alloy Futures Contract 
traded on the London Metal Exchange (``LME'') to be offered or sold to 
persons located in the United States. This Order is issued pursuant to: 
(1) Commission rule 30.3(a), 17 CFR 30.3(a) (1994), which makes it 
unlawful for any person to engage in the offer or sale of a foreign 
option product until the Commission, by order, authorizes such foreign 
option to be offered or sold in the United States; and (2) the 
Commission's Order issued on August 18, 1992, 57 FR 38437 (August 25, 
1992), authorizing certain option products traded on the LME to be 
offered or sold in the United States.

EFFECTIVE DATE: January 4, 1995.

FOR FURTHER INFORMATION CONTACT:
Francey L. Youngberg, Esq., Division of Trading and Markets, Commodity 
Futures Trading Commission, 2033 K Street NW., Washington, D.C. 20581. 
Telephone: (202) 254-8955.

SUPPLEMENTARY INFORMATION: The Commission has issued the following 
Order:

Order Under Commission Rule 30.3(a) Permitting Option Contracts on the 
LME Aluminum Alloy Futures Contract Traded on the London Metal Exchange 
To Be Offered or Sold in the United States Thirty Days After 
Publication of this Notice in the Federal Register Absent Further 
Notice

    By Order issued on August 18, 1992 (``Initial Order''), the 
Commission authorized, pursuant to Commission rule 30.3(a),\1\ certain 
option products traded on the London Metal Exchange to be offered or 
sold in the United States. 57 FR 38437 (August 25, 1992). Among other 
conditions, the Initial Order specified that:

    \1\Commission rule 30.3(a), 17 CFR 30.3(a) (1994), makes it 
unlawful for any person to engage in the offer or sale of a foreign 
option product until the Commission, by order, authorizes such 
foreign option to be offered or sold in the United States.
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    Except as otherwise permitted under the Commodity Exchange Act 
and regulations thereunder, * * * no offer or sale of any London 
Metal Exchange option product in the United States shall be made 
until thirty days after publication in the Federal Register of 
notice specifying the particular option(s) to be offered or sold 
pursuant to this Order.

    By letter dated October 31, 1994 the London Metal Exchange (``LME) 
represented that it would be introducing an option contract based on 
the LME Aluminum Alloy Futures Contract. The LME has requested that the 
Commission supplement its Initial Order authorizing Option Contracts on 
High Grade Primary Aluminum, Copper-Grade A, Special High Grade Zinc, 
Standard Lead, Primary Nickel and Tin futures contracts, 57 FR 38437 
(Aug. 25, 1992), by also authorizing the Option Contract on the LME 
Aluminum Alloy Futures Contract to be offered or sold to persons in the 
United States. Upon due consideration, and for the reasons previously 
discussed in the initial Order, the Commission believes that the 
request for authorization to offer or sell an option contract on the 
LME Aluminum Alloy Futures Contract should be granted.
    Accordingly, pursuant to Commission rule 30.3(a) and the 
Commission's Initial Order issued on August 18, 1992, and subject to 
the terms and conditions specified therein, the Commission hereby 
authorizes the Option Contract on the LME Aluminum Alloy Futures 
Contract to be offered or sold to persons located in the United States 
thirty days after publication of this notice in the Federal Register, 
unless prior to that date the Commission receives any comments which 
may result in a determination to delay the effective date of the Order 
pending review of such comments. Under such circumstances, the 
Commission will provide notice.

LME Aluminum Alloy Options Contract

    Unit of Trading--1 Option to buy (or sell) 1 LME Aluminum Alloy 
Futures contract with a price denominated in either US Dollars (USD) or 
Pounds Sterling (STG) or German Marks (DEM) or Japanese Yen (YEN).
    Delivery/Expiry Month--Every month up to 15 months forward, except 
for DEM and YEN if Delivery day is non-business for that currency.
    Exercise Day/Delivery Day/Expiry Day--Exercise by 11:10 a.m. of 1st 
Wednesday of the Delivery month. Assignment of Futures contract is by 
11:40 a.m. on the Exercise day. Options not exercised automatically 
expire.
    Quotations--In each of the currencies specified.
    Minimum Price Movements for Premiums--

USD OPTIONS  US  0.01
STG OPTIONS  STG  0.01
DEM OPTIONS  DEM  0.01
YEN OPTIONS  YEN  10
    Trading Hours--11:45-11:50, 13:05-13:10, 13:15-13:30, 15:50-15:55, 
16:30-16-35 and 16:35-17:00 for Ring trading or any time on the 
telephone market.
    Contract Standard--Assignment of 1 LME Aluminum Alloy Futures 
contract of 20 tonnes with a delivery on the 3rd Wednesdays of the 
Delivery month at the Exercise Price.
    Exercise Price Intervals (Gradations)--
US Dollars
    --US$25  gradations for Strikes from US$25 to US$1725
    --US$50   gradations for Strikes from US$1725 to US$2950
    --US$100  gradations for all Strikes over US$3000
Pounds Sterling--STG25  gradations for all Strikes over STG25
Japanese Yen
    --JY10,000  gradations for Strikes from JY10,000 to JY390,000
    --JY20,000  gradations for all Strikes over JY400,000
Deutschmarks
    --DEM50  gradations for Strikes from DEM50 to DEM4950
    --DEM200  gradations for all Strikes over DEM5000.

    Option Price (Premium)--The option price is payable by the buyer to 
the seller on the next Business Day following the day on which the 
Option is traded.

List of Subjects in 17 CFR Part 30

    Commodity futures, Commodity options, Foreign transactions.

    Accordingly, 17 CFR Part 30 is amended as set forth below:

PART 30--FOREIGN FUTURES AND FOREIGN OPTION TRANSACTIONS

    1. The authority citation for Part 30 continues to read as follows:

    Authority: Secs. 2(a)(1)(A), 4, 4c, and 8a of the Commodity 
Exchange Act, 7 U.S.C. 2, 6, 6c and 12a.

    2. Appendix B to Part 30 is amended by adding the following entry 
after the existing entries for the ``London Metal Exchange'' to read as 
follows:

Appendix B--Option Contracts Permitted To Be Offered or Sold in the 
U.S. Pursuant to Sec. 30.3(a)

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        Exchange             Type of contract      FR date and citation 
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                                  *****                                 
London Metal Exchange..  Options on the LME       December 5, 1994; 59  
                          Aluminum Alloy Future    FR ____              
                          Contract.                                     
                                                                        
                                  *****                                 
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    Issued in Washington, D.C. on November 29, 1994.
Jean A. Webb,
Secretary to the Commission.
FR Doc. 94-29853 Filed 12-2-94; 8:45 am]
BILLING CODE 6351-01-M