[Federal Register Volume 59, Number 246 (Friday, December 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31258]


[[Page Unknown]]

[Federal Register: December 23, 1994]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 15

 

Changes in Reporting Levels for Large Trader Reports

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rulemaking.

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SUMMARY: The Commodity Futures Trading Commission (Commission) is 
amending its regulations to raise the reporting levels at which futures 
commission merchants (FCMs), clearing members, foreign brokers, and 
traders must file large trader reports in natural gas, heating oil, 
frozen concentrated orange juice, and cocoa futures. By increasing the 
large trader reporting levels, this amendment reduces both burdens on 
persons reporting and the processing workload of the Commission.

EFFECTIVE DATE: January 1, 1995.

FOR FURTHER INFORMATION CONTACT:
Lamont L. Reese, Division of Economic Analysis, 2033 K Street, NW, 
Washington, D.C. 20581, Telephone (202) 254-3310.

SUPPLEMENTARY INFORMATION:

I. Background

    Reporting levels are set in futures to ensure that the Commission 
receives adequate information to carry out its market surveillance 
programs. These are designed to detect and prevent market congestion 
and price manipulation and to enforce speculative position limits. In 
addition, the information serves as a basis to gauge overall hedging 
and speculative uses of the futures markets, use of the markets by 
foreign participants, and other matters of public concern.
    Generally, Parts 17 and 18 of the regulations require reports from 
members of contracts markets, FCMs or foreign brokers (``firms'') and 
traders, respectively, when a trader holds a ``reportable position''; 
i.e., any open position held or controlled by a trader at the close of 
business in any one future of a commodity traded on any one contract 
market that is equal to or in excess of the quantities fixed by the 
Commission in Sec. 15.03 of the regulations.\1\
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    \1\Firms which carry accounts for traders who hold ``reportable 
positions'' are required to identify such accounts on a Form 102 and 
report on the series '01 forms any reportable positions in the 
account, the delivery notices issued or stopped by the account and 
any exchanges of futures for physicals. Traders who own or control 
reportable positions are required to file annually a CFTC Form 40 
giving certain background information concerning their trading in 
commodity futures and, on call by the Commission, must submit a Form 
103 showing positions and transactions in the contract market 
specified in the call.
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    The Commission periodically reviews information concerning trading 
volume, open interest, and the number and position sizes of individual 
traders relative to the reporting levels for each market to determine 
if coverage is adequate for effective market surveillance. In this 
regard, the Commission also is mindful of the paperwork burden 
associated with these reporting requirements and reviews them with an 
eye to ameliorating that burden to the extent compatible with adequate 
market coverage. The Commission's most recent review of reporting 
levels indicates that the size of trading volume, open interest, and 
positions of individual traders enable the Commission to raise 
reporting levels as follows: In cocoa, from 50 to 100 contracts; in 
frozen concentrated orange juice, from 25 to 50 contracts; in natural 
gas, from 50 to 100 contracts; and in heating oil, from 175 to 250 
contracts. The Commission estimates that, by adopting the subject 
amendment, the number of daily position reports (i.e., series '01 
reports) filed by reporting firms for the four commodities would 
decrease by about 33 percent. There would also be a proportionate 
decrease in the number of form 102's filed by firms and form 40's filed 
by large traders. Market coverage represented by the percent of total 
open interest reported through the large trader system in the subject 
commodities, however, is estimated to decline on average by no more 
than 5 percent on either the long or short side of the market.
    Exchanges which trade these four commodities also maintain large 
trader reporting systems that are similar in most respects to that 
operated by the Commission. All of the exchange systems rely on routine 
position and account identification reports from member firms similar 
to the Commission's series '01 reports and form 102s. As part of the 
current review, Commission and exchange surveillance staff have 
discussed the potential impact of these rule amendments on exchange 
surveillance programs. Exchange staff are in agreement that the new 
levels will provide adequate coverage for market surveillance.

II. Related Matters

A. Notice and Comment

    The Administrative Procedure Act, 5 U.S.C. 553(b), requires, in 
most instances, that a notice of proposed rulemaking be published in 
the Federal Register, and that opportunity for comment be provided when 
an agency promulgates new regulations. Section 553(b) sets forth an 
exception, however, when the agency, for good cause, finds (and 
incorporates the findings and a brief statement of its reasons) that 
notice and public procedure thereon are impracticable, unnecessary, or 
contrary to the public interest.
    The Commission finds that notice and public comments on the rule 
changes announced herein are unnecessary, because the amendments are 
routine determinations made by the Commission with respect to futures 
contracts that experience a growth in activity. These routine 
determinations are made to adjust reporting levels, when increasing 
activity in the market leads to the receipt by the Commission of a 
larger number of reports than is necessary for efficient surveillance 
of the market. In this regard, it should be further noted that these 
amendments do not establish any new obligations under the Act. On the 
contrary, these changes simplify compliance with the Act by reducing 
persons' reporting obligations under the rules in question.

B. The Regulatory Flexibility Act (RFA)

    The RFA requires that agencies, in proposing rules, consider the 
impact of those rules on small businesses. These amendments affect 
large traders and FCMs, and other similar entities, such as foreign 
brokers and foreign traders. The Commission has defined ``small 
entities'' as used by the Commission in evaluating the impact of its 
rule in accordance with the RFA. 47 FR 18618-18621 [April 30, 1982].
    In that statement, the Commission concluded that large traders and 
FCMs are not considered to be small entities for purposes of the RFA. 
In this regard, the amendments to reporting requirements fall mainly 
upon FCMs. Similarly, foreign brokers and foreign traders report only 
if carrying or holding reportable (i.e., large) positions. In addition, 
these amendments relieve a regulatory burden. Accordingly, the 
amendments have no significant impact on a substantial number of small 
entities. For the above reasons, and pursuant to Sec. 3(a) of the RFA 
(5 U.S.C. 605(b)), the Chairman, on behalf of the Commission, certifies 
that these regulations will not have a significant economic impact on a 
substantial number of small entities.

C. Paperwork Reduction Act (PRA)

    The PRA, 44 U.S.C. 3501 et seq., imposes certain requirements on 
Federal agencies (including the Commission) in connection with their 
conducting or sponsoring any collection of information as defined by 
the PRA. In compliance with the PRA, the Commission previously 
submitted this rule and its associated information collection 
requirements to the Office of Management and Budget (OMB). OMB approved 
the collection of information associated with this rule in June 1993, 
and assigned OMB control number 3038-0009 to the rule. The burden 
associated with this entire collection, including this amended rule, is 
as follows:

Average Burden Hours Per Response...........................  0.19      
Number of Respondents.......................................  4,584     
Frequency of Response.......................................  Daily     
                                                                        

    Persons wishing to comment on the information which would be 
required by these rules should contact Gary Waxman, Office of 
Management and Budget, Room 3228, NEOB, Washington, DC, 20503, (202) 
395-7304. Copies of the information collection submission to OMB are 
available from Joe F. Mink, CFTC Clearance Officer, 2033 K Street, NW, 
Washington, DC 20581, (202) 254-9735.

List of Subjects in 17 CFR Part 15

    Brokers, Reporting and recordkeeping requirements.

    In consideration of the foregoing, and pursuant to the authority 
contained in the Act and, in particular, sections 4g, 4i, 5 and 8a of 
the Act, 7 U.S.C. 6g, 6i, 7 and 12a (1990), the Commission hereby 
amends Chapter I of Title 17 of the Code of Federal Regulations as 
follows:

PART 15--REPORTS--GENERAL PROVISIONS

    1. The authority citation for Part 15 continues to read as follows:

    Authority: 7 U.S.C. 2, 4, 5, 6a, 6c (a)-(d), 6f, 6g, 6i, 6k, 6m, 
6n, 7, 9, 12a, 19 and 21; 5 U.S.C. 552 and 552(b).

    2. Section 15.03 is revised to read as follows:


Sec. 15.03  Quantities Fixed for Reporting.

    The quantities for the purpose of reports filed under parts 17 and 
18 of this chapter are as follows:

------------------------------------------------------------------------
                          Commodity                             Quantity
------------------------------------------------------------------------
Wheat (bushels)..............................................    500,000
Corn (bushels)...............................................    750,000
Soybeans (bushels)...........................................    500,000
Oats (bushels)...............................................    300,000
Cotton (bales)...............................................      5,000
Frozen Concentrated Orange Juice (contracts).................         50
Soybean oil (contracts)......................................        175
Soybean meal (contracts).....................................        175
Live cattle (contracts)......................................        100
Feeder cattle (contracts)....................................         50
Hogs (contracts).............................................         50
Sugar No. 11 (contracts).....................................        300
Sugar No. 14 (contracts).....................................        100
Cocoa (contracts)............................................        100
Coffee (contracts)...........................................         50
Copper (contracts)...........................................        100
Gold (contracts).............................................        200
Silver bullion (contracts)...................................        150
Platinum (contracts).........................................         50
No. 2 heating oil (contracts)................................        250
Crude Oil, sweet (contracts).................................        300
Unleaded gasoline (contracts)................................        150
Natural gas (contracts)......................................        100
Long-term U.S. Treasury bonds (contracts)....................        500
GNMA (contracts).............................................        100
Three-month (13 week) U.S. Treasury bills (contracts)........        150
Long-term U.S. Treasury notes (contracts)....................        500
Medium-term U.S. Treasury notes (contracts)..................        300
Short-term U.S. Treasury notes (contracts)...................        200
Three-month Eurodollar time deposit rates (contracts)........        850
Thirty-Day Interest Rates (contracts)........................        100
One-Month Labor Rates (contracts)............................        100
Foreign currencies (contracts)...............................        200
U.S. Dollar Index (contracts)................................         50
Standard and Poor's 500 stock price index (contracts)........        300
New York Stock Exchange composite index (contracts)..........         50
Amex major market index-maxi (contracts).....................        100
Nikkei stock index (contracts)...............................         50
Municipal bonds (contracts)..................................        100
Value line average index (contracts).........................         50
All other commodities (contracts)............................         25
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    Issued in Washington, DC, this 15th day of December 1994, by the 
Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 94-31258 Filed 12-22-94; 8:45 am]
BILLING CODE 6351-01-M