[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: 94-31522]


[[Page Unknown]]

[Federal Register: December 23, 1994]


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COMMODITY FUTURES TRADING COMMISSION

 

New York Cotton Exchange: Proposed Amendments Pertaining to 
Loadout Requirements for Cotton Delivered in Satisfaction of Cotton 
Futures Contracts

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of Proposed Contract Market Rule Changes.

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SUMMARY: The New York Cotton Exchange (NYCE) has submitted proposed 
amendments to rules governing warehouses licensed by the NYCE for 
delivery of cotton on its futures contracts. The proposed amendments 
would require that each NYCE-licensed warehouse load out cotton at a 
rate of ten percent (10%) of the warehouse's total licensed storage 
capacity per week and that the total time taken by each warehouse to 
complete the load out may not exceed nine weeks. In accordance with 
Section 5a(a)(12) of the Commodity Exchange Act, and acting pursuant to 
the authority delegated by Commission Regulation 140.96, the Acting 
Director of the Division of Economic Analysis (Division) of the 
Commodity Futures Trading Commission (Commission) has determined, on 
behalf of the Commission, that publication of the proposed amendments 
would be in the public interest. On behalf of the Commission, the 
Division is requesting comment on this proposal.

DATES: Comments must be received on or before January 23, 1995.

ADDRESSES: Interested persons should submit their views and comments to 
Jean A. Webb, Secretary, Commodity Futures Trading Commission, 2033 K 
Street NW., Washington, DC 20581. Reference should be made to the 
proposed amendments to NYCE By-Law Section 5.02 establishing load out 
requirements for NYCE-licensed cotton warehouses.

FOR FURTHER INFORMATION CONTACT: Frederick V. Linse, Division of 
Economic Analysis, Commodity Futures Trading Commission, 2033 K Street 
NW., Washington, DC 20581, telephone (202) 254-7303.

SUPPLEMENTARY INFORMATION: The existing provisions of NYCE By-Law 
Section 5.02 do not provide for a minimum required rate at which NYCE-
licensed warehouses must load out cotton that has been delivered on the 
NYCE's cotton futures contracts following the warehouses' receipt of 
loading orders from the owners of such cotton. The proposed amendments 
would provide that NYCE-licensed warehouses must load out futures 
delivery cotton at a rate of ten percent (10%) of total NYCE-licensed 
capacity per week, and that the total time taken to load such cotton 
must not exceed nine weeks. The proposed amendments do not provide for 
specific monetary penalties to be imposed on warehouse operators if 
they fail to comply with the above-noted load out requirements. The 
proposed amendments do provide, however, that a warehouse's NYCE-
licensed capacity will be based on its load-out record and, if 
necessary, the warehouses licensed capacity will be lowered or 
suspended in the event that a warehouse fails to comply with the 
proposed load out requirements.
    The NYCE proposes to make the proposed amendments effective on 
August 1, 1995 with respect to all existing NYCE-licensed warehouses on 
that date and all warehouses that are licensed by the NYCE after that 
date.
    According to the NYCE, the purpose of the proposed amendments is to 
increase the load-out rate of certificated cotton. The NYCE said that 
current load-out rates, which it believes are too slow, are negatively 
affecting the efficiency of the cotton futures market and that the 
problem will be corrected by the proposed amendments. The NYCE also 
said that, because other commodity exchanges have established minimum 
load-out rates, the NYCE is acting in accordance with industry 
standards in setting a minimum load-out rate for cotton.
    Copies of the proposed amendments will be available for inspection 
at the Office of the Secretariat, Commodity Futures Trading Commission, 
2033 K Street NW., Washington, DC 20581. Copies of the amended terms 
and conditions can be obtained through the Office of the Secretariat by 
mail at the above address or by telephone at (202) 254-6314.
    The materials submitted by the NYCE in support of the proposed 
amendments may be available upon request pursuant to the Freedom of 
Information Act (5 U.S.C. 552) and the Commission's regulations 
thereunder (17 CFR Part 145 (1987)). Requests for copies of such 
materials should be made to the FOI, Privacy and Sunshine Act 
Compliance Staff of the Office of the Secretariat at the Commission's 
headquarters in accordance with C.F.R. 145.7 and 145.8.
    Any person interested in submitting written data, views or 
arguments on the proposed amendments should send such comments to Jean 
A. Webb, Secretary, Commodity Futures Trading Commission, 2033 K Street 
NW., Washington, DC 20581 by the specified date.

    Issued in Washington, DC on December 16, 1994.
Blake Imel,
Acting Director.
[FR Doc. 94-31522 Filed 12-22-94; 8:45 am]
BILLING CODE 6351-01-P