[Federal Register Volume 61, Number 139 (Thursday, July 18, 1996)]
[Proposed Rules]
[Pages 37409-37417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18262]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Parts 15, 16, 17, 18 and 19


Futures Commission Merchants, Clearing Members and Foreign 
Brokers; Option Large Trader Reports Daily Filing Requirements

AGENCY: Commodity Futures Trading Commission.

ACTION: Proposed rulemaking.

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SUMMARY: The Commodity Futures Trading Commission (Commission) is 
proposing to amend its regulations to require that futures commission 
merchants, clearing members and foreign brokers (firms) file option 
large trader reports with the Commission on a daily basis. The proposed 
amendments specify a joint option and futures reporting level, a joint 
record format for reporting the information in machine-readable form, 
and an earlier time for submission of the data. A number of these 
requirements are proposed with the view that the Commission will be 
able to provide large trader data to the exchanges. Currently, firms 
report option and futures large trader data to the exchanges and 
futures data to the Commission. Reporting burdens in the industry may 
be reduced if firms report data to a single source that in turn 
distributes the information to all regulators or self-regulatory 
organizations.
    The Commission is also in the process of obtaining new computer 
hardware and rewriting the software for its market surveillance system. 
In view of this, the Commission is requesting comment from the industry 
on any standards it might adopt that would make large trader reporting 
more efficient for the industry. Last, the Commission is proposing 
amendments to rule 18.04 to obtain CFTC form 40s from reporting traders 
only on special call. This would mirror current Commission practice 
with respect to this form.

DATES: Comments on this proposed rulemaking should be submitted on or 
before September 16, 1996.

ADDRESSES: Comments should be sent to the Office of the Secretariat, 
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 
Street, NW., Washington, DC 20581, and should make reference to 
``option large trader reports,'' telephone (202) 418-5100.

FOR FURTHER INFORMATION CONTACT: Lamont L. Reese, Division of Economic 
Analysis, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 
20581, telephone (202) 418-5310.

SUPPLEMENTARY INFORMATION:

I. Background

    The Commission employs a comprehensive market surveillance system 
which is designed to maintain freely competitive markets by detecting 
and preventing threats of price manipulation or other major market 
disruptions caused by abusive trading practices. As part of the system, 
the Commission's Division of Economic Analysis operates an extensive 
data-gathering system which relies heavily on computer support. 
Regulations concerning this system require reports from three primary 
sources: contract markets under Part 16 of the regulations; futures 
commission merchants, clearing members, and foreign brokers (firms) 
under parts 17 and 21 of the regulations; and individual traders under 
parts 18 and 19 of the regulations. 17 CFR parts 16 through 21 (1995).
    The Commission is proposing amendments to these regulations which 
will require firms to report daily option positions of large traders in 
addition to futures positions directly to the Commission. The proposed 
rule changes also delete the current requirement that contract markets 
provide option large trader (OLT) data on a weekly basis. Since the 
Commission is also in the process of reengineering software for its 
surveillance system to run in a client-server environment rather than 
on a mainframe computer, it is making proposals and asking for 
recommendations to make its requirements for electronic reporting 
consistent with standards in use by the industry.
    An overall review of the reporting system indicates that additional 
amendments to the regulations may be proposed. These include proposed 
changes to the reporting levels in rule 15.03 and amendments to Part 17 
of the regulations to give additional guidance

[[Page 37410]]

to firms when reporting accounts that are owned and/or controlled by 
two or more persons. However, since these regulations are not concerned 
with daily reporting of option positions, any proposed changes to them 
will be included in a separate rulemaking proposal.

II. Daily and Weekly Large Trader Data

    Part 17 of the Commission's regulations requires that firms submit 
a daily report to the Commission with respect to futures positions in 
all special accounts on their books.1 Information required to be 
provided to the Commission includes quantities of reportable futures 
positions, exchanges of futures for cash, and delivery notices issued 
or stopped by each special account.2 Firms assign a reporting 
number to the special account and report all information to the 
Commission using this number.3 The regulations also specify the 
format for data that is reported on machine-readable media and the type 
of data processing media that is compatible with Commission computer 
systems.4 Additionally, firms must file a CFTC form 102 showing 
the information specified under Sec. 17.01 of the regulations for each 
special account.5 This information identifies persons who have a 
financial interest in or trading control of a special account, informs 
the Commission of the type of account that is being reported, and gives 
preliminary information whether positions and transactions are 
commercial or noncommercial in nature.
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    \1\ Special account means any commodity futures or option 
account in which there is a reportable position, 17 CFR 15.00 
(1995). Firms report futures information to the Commission and 
futures and option information to the exchanges.
    \2\ A reportable position is any open position held or 
controlled by a trader at the close of business in any one futures 
contract 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, 17 CFR 15.03 (1995).
    \3\ The firm's reporting number may be the account number 
carried on its books. However, the number may refer to a collection 
of accounts that are owned and/or controlled by the same person.
    \4\ See rule 17.00(g) for a description of the file 
characteristics and 15.00(l) for a definition of compatible data 
processing media, 17 CFR 15.00(l) and 17.00(g) (1995).
    \5\ 17 CFR 17.01 (1995).
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    With regard to options, however, the Commission receives large 
trader data only on a weekly basis. Part 16 of the regulations requires 
that contract markets provide the long and short put or call positions 
for each option trader controlling a reportable position as of the 
close of business on Tuesday.6 Contract markets provide the 
Commission with the data by account number and supply a CFTC form 102 
to identify owners and controllers of the account. Generally, the rules 
requiring weekly reporting of OLT data were in place at the inception 
of the Commission's three-year pilot program for domestic exchange-
traded commodity options.7 Due to the growth in the trading of 
exchange-traded options and, since the same persons tend to hold both 
large futures and option positions, the Commission does not believe 
that its current requirements concerning large trader reporting are 
adequate.
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    \6\ 17 CFR 16.02 (1995). A reportable option position is defined 
as any open contract position on any one contract market in the put 
option or separately in the call option of a specified option 
expiration date which exceeds 50 contracts. 17 CFR 15.00(b)(2) 
(1995).
    \7\ 46 FR 54500 (November 3, 1981).
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    The Commission has long recognized the interaction that exists 
between the markets for trading futures and those for trading options 
on futures. In April of 1992, for example, the Commission proposed 
rules that would unify speculative position limits on futures with 
those on options for the commodities specified in Part 150 of the 
regulations, 57 FR 12766 (April 13, 1992).8 In this release, the 
Commission found that price movements in the two markets are highly 
related so that viewing options and futures together more readily 
reflects the economic reality of a trader's position. The Commission 
noted that:
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    \8\ The Commission previously requested comments on the concept 
of unifying option and futures speculative limits. See 56 FR 37049 
(August 2, 1991). The commodities listed in Part 150 include grains, 
soybeans, soybean products, and cotton.

    * * * options in certain combinations create synthetic futures. 
Moreover, these, or other combinations, may be spread or offset 
against actual futures positions. Thus, through a variety of spread 
or arbitrage transactions, positions in one market may have a direct 
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and immediate impact on pricing in the other.

57 FR at 12769
    Trading in options on futures grew to over 100 million contracts 
during 1994, and option position sizes held by individual traders have 
grown correspondingly. Currently, it is impossible to assess 
relationships between price moves and trader positions without knowing 
both the traders' futures and option positions. Adequate surveillance 
requires that these relationships be examined on a day-to-day basis. In 
view of this, the Commission is proposing to collect option positions 
of large traders on a daily basis.
    The Commission must, of course, determine whether it will require 
daily reports from the exchanges or obtain the information directly 
from reporting firms. As noted above, exchanges currently supply the 
Commission with weekly OLT data. A survey of the exchanges indicates, 
however, that not all exchanges collect option large trader data on a 
daily basis. Moreover, although the option data are currently provided 
by exchanges immediately after they process incoming reports from their 
members, the data are not timely for market surveillance. Most 
exchanges provide the data to the Commission during the afternoon of 
the Wednesday following the Tuesday report date for the positions. Due 
to CFTC processing capacity restraints, OLT data are processed 
overnight and not available for analysis until the following morning. 
Exchange members, however, provide OLT data to the exchanges early in 
the morning on the day following the OLT position report date. 
Presumably, reporting firms could provide data directly to the 
Commission at about the same time and, in its new processing 
environment, the Commission will be able to access and analyze the data 
immediately. The process of obtaining data from the exchanges is also 
cumbersome and may impose a significant additional burden on the 
exchanges, particularly with respect to providing the Commission with 
form 102s to identify accounts and in obtaining corrections to the OLT 
data.
    The Commission is also mindful of the additional burden that may be 
placed on reporting firms if it collects OLT data directly from them 
since, in addition, they must provide data to the exchanges. The burden 
on firms would be reduced if the Commission acts as a central 
collection point for large trader data and distributes them to the 
exchanges. Reporting firms through the operations committees of the 
Futures Industry Association (FIA) recommended this approach to 
Commission staff in 1991.9 Since the Commission is obtaining new 
computer hardware and rewriting its software, the Commission is 
considering requirements that will allow it to act as a central 
collection point for large trader data. Commission staff have held 
preliminary discussions with exchange staff who expressed interest, if 
the needs of the individual exchanges could be met.
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    \9\ See the ``Report on the Commission's Large Trader Reporting 
System'' prepared by the Division of Economic Analysis, January 
1992, pp. 23 and 24.
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    In view of the above, the Commission is proposing amendments to its 
reporting rules that require firms to report both futures and option 
large

[[Page 37411]]

trader data to the Commission on a daily basis. These amendments 
involve redefining reporting levels, establishing joint reporting of 
futures and option data and changing the current format for reporting 
data on machine-readable media. In making the specific amendments 
discussed below, the Commission is taking into account certain 
requirements expressed by staff of the various exchanges.

A. Reporting Levels

    As noted above, Commission rules 15.00(b) and 15.03 define 
reportable levels in futures and options. The Commission is not 
changing its definition of a reportable futures position. However, it 
is proposing that an option position be considered reportable if the 
aggregate of all open contract positions of a trader in all options 
that exercise into the same futures expiration month exceeds the 
reporting levels specified in rule 15.03 for any one option 
quadrant.10 Commission staff have functionally adopted this 
definition when processing exchange-supplied OLT data. If an exchange 
reports an option account that has previously been reported, or if the 
position is reportable according to the above definition, the account 
is further processed. The Commission has found that this method of 
processing OLT data gives satisfactory information about large option 
traders and greatly reduces the number of form 102s it requests from 
the exchanges. The Commission intends to continue this front-end 
processing of OLT data if firms report directly to the Commission. 
Thus, firms can report OLT data at lower reporting levels or report all 
OLT data and the Commission will keep and process only that which is 
appropriate.
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    \10\ An option quadrant is considered a long call, short call, 
long put or short put.
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B. Reporting Futures and Options on a Combined Basis

    Commission regulations currently require that firms provide only 
large trader positions that are of a reportable size. If a trader holds 
a reportable position in one future month of a commodity on a contract 
market and a position which is not of a reportable size in another 
future month, only the larger position is required to be reported. A 
number of the exchanges, however, require that both positions be 
reported.11 For such exchanges, this type of reporting applies to 
both futures and options. Firms must report all option positions and 
all futures positions in an account to the appropriate exchange, if 
either an option position or a futures position in the account meets 
the exchange's definition of reportability. The Commission is proposing 
to amend rule 17.00 to require this type of reporting. This will meet 
exchange requirements if in the future they choose to obtain data from 
the Commission rather than from firms.12
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    \11\ Exchanges that require this type of reporting include the 
Chicago Board of Trade (CBT), the Chicago Mercantile Exchange (CME), 
and the New York Mercantile Exchange (NYME).
    \12\ Since the Commission is proposing that rule 17.00 be 
amended to require that options be reported by strike prices it is 
also proposing conforming amendments to rule 17.04 to require that 
the originator of an omnibus account report option positions by 
strike price to the firm that carries the account.
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C. Record Formats for Dial-Up Transmissions and Machine Readable Media

    The Commission receives about 95 percent of its futures large 
trader data via dial-up transmission or on machine-readable media. The 
record formats for reporting in this manner are contained in rule 
17.00(g).13 In proposing changes to these formats to accommodate 
option data, the Commission is seeking to minimize programming changes 
that firms may incur with adoption of a new reporting format and to 
collect a set of data that will be useful to each exchange for their 
large trader reporting system. This can be accomplished by adopting a 
format used by at least one of the major exchanges that includes all 
data fields used by other exchanges. Any of these other exchanges that 
elect to obtain large trader data from the Commission will be able to 
convert from the Commission's format to their own.
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    \13\ 17 CFR 17.00(g) (1995).
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    A review of record formats used by the exchanges indicates that 
although they differ the formats necessarily contain similar 
information for collecting large trader data. The formats used by two 
of the exchanges are more expansive than others, allowing for 
identification of flexible products in addition to data used by other 
exchanges. One of these formats contains all information in a single 
record and may be preferable since the Commission is proposing to use 
the same record format to report different types of information. In 
view of this, the Commission is proposing to adopt the record format 
shown below.

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        Record layout                                                   
------------------------------                                          
Beginning                                         Name                  
  column    Length     Type*                                            
------------------------------------------------------------------------
1........        2        AN   Report Type.                             
3........        3        AN   Reporting Firm.                          
6........        2        --   Reserved.                                
8........       12        AN   Account Number.                          
20.......        8        AN   Report Date.                             
28.......        2        AN   Exchange Code.                           
30.......        1        AN   Put or Call.                             
31.......        5        AN   Commodity Code (1).                      
36.......        8        AN   Expiration Date (1).                     
44.......        7         S   Strike Price.                            
51.......        1        AN   Exercise Style.                          
52.......        7         N   Long-buy-Stopped.                        
59.......        7         N   Short-Sell-Issued.                       
66.......        5        AN   Commodity Code (2).                      
71.......        8        AN   Expiration Date (2).                     
79.......        2        --   Reserved.                                
------------------------------------------------------------------------
*AN--Alpha-Numeric.                                                     
N--Numeric.                                                             
S--Signed numeric.                                                      

    1. Report Type. This report format will be used to report three 
types of data: Long and short futures and option positions, futures 
delivery notices issued and stopped, and exchanges of futures for 
physicals bought and sold. Valid values for the report type are ``RP'' 
for reporting positions, ``DN'' for reporting delivery notices, and 
``EP'' for reporting futures for physicals.
    2. Reporting Firm. Currently, the Commission assigns a five-digit 
number to each firm which is used for reporting. See rule 
17.00(g)(3)(i). This assignment may not be necessary since all members 
of a clearing house are already identified by a number that is used for 
reporting to the clearing house or the exchange. The Commission is 
proposing to use the clearing member number in conjunction with an 
exchange number to identify reporting firms. If a firm is not a 
clearing member, the Commission is proposing that it assign a three-
character alpha-numeric identifier agreed to by the exchanges.
    3. Account Number. This is the same number that is currently 
assigned to an account by the firm for purposes of reporting. See rule 
17.00(g)(3)(iii).
    4. Report Date. The Commission is proposing that the report date 
include the full four-character year rather than the last two 
characters. The format is YYYYMMDD, where YYYY is the year, MM is the 
month, and DD is the day of the month.
    5. Exchange. This is proposed as a two-character field used to 
identify the exchange on which a position is held.

[[Page 37412]]

The Commission is proposing that valid values be as follows:

01..............................  Chicago Board of Trade.               
02..............................  Chicago Mercantile Exchange.          
03..............................  MidAmerica Commodity Exchange.        
06..............................  Coffee, Sugar and Cocoa Exchange.     
07..............................  Comex Division of NYME.               
08..............................  Kansas City Board of Trade.           
09..............................  Minneapolis Grain Exchange.           
10..............................  Philadelphia Board of Trade.          
12..............................  New York Mercantile Exchange.         
13..............................  New York Cotton Exchange.             
15..............................  New York Futures Exchange.            
------------------------------------------------------------------------

    6. Put-Call Code. Valid entries would be ``C'' for a call option 
and ``P'' for a put option. For futures, the field is blank.
    7. Commodity (1). Currently, the Commission assigns a six-digit 
contract market code for reporting. This appears unnecessary since the 
exchanges already assign a commodity code for their own reporting. The 
Commission is proposing to use the exchange code assigned to the 
futures or option contract pertaining to the reported position. This 
may simplify reporting for firms.
    8. Expiration Date (1). The date format is YYYYMMDD and represents 
the expiration date or delivery date of the reported futures or option 
contract. For date-specific instruments, such as flexible products, the 
full date must be reported. For other options and futures, this field 
is used to report the expiration year and month for an option contract 
or a delivery year and month for a futures contract. The day portion of 
the field for these contracts (``DD'') contains spaces.
    9. Strike Price. This is proposed as a signed numeric field for 
reporting option strike prices. The strike prices should be right-
justified and the field zero-filled. For futures, the field is left 
blank.
    10. Exercise Style. Valid values for this field are ``A'' for 
American style options, i.e., those that can be exercised at any time 
during the life of the options and ``E'' for European, i.e., those that 
can be exercised only at the end of an option's life. This field will 
be required only for flexible instruments or as otherwise specified by 
the Commission. The Commission is proposing that all data be reported 
in contracts. Currently, data for the grains and soybean futures 
markets are reported in thousand bushels. Data reported by the 
exchanges for options on futures contracts in these markets, however, 
is reported in contracts. It would be preferable if all data pertaining 
to these markets are reported in the same units.
    11. Long-Buy-Stopped (Short-Sell-Issued). When report type is 
``RP'', this field represents long (short) positions open at the end of 
a trading day. When report type is ``DN'', this field represents 
delivery notices stopped (issued) on behalf of the account. When report 
type is ``EP'', this field represents purchases (sales) of futures for 
cash for the account. The Commission is proposing that all data be 
reported in contracts. Currently, data for the grains and soybean 
futures markets are reported in thousand bushels. Data reported by the 
exchanges for options on futures contracts in these markets, however, 
is reported in contracts. It would be preferable if all data pertaining 
to these markets are reported in the same units.
    12. Commodity (2). This is the exchange-assigned commodity code for 
a futures contract or other instrument that a position is exercised 
into from a date specific or flexible option.
    13. Expiration Date (2). Similar to other dates, the format is 
YYYYMMDD and represents the expiration date or delivery month and year 
of the future or other instrument that a position is exercised into 
from a date-specific or flexible option.

D. Time and Place for Filing Reports

    Commission rule 17.02 currently specifies different times for 
reporting large trader data depending on the media used for 
reporting.14 If forms are used, they must be transmitted to the 
appropriate regional office by 9 a.m. If the data are supplied on 
machine-readable media, such as computer tape or diskette, the data 
must be supplied by 10:30 a.m. If the data are transmitted 
electronically, the data must be supplied by 11 a.m.15
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    \14\ In the discussion that follows, times are eastern time for 
markets located in that time zone and central time for all other 
markets.
    \15\ A number of firms that transmit data electronically provide 
the Commission with reports substantially earlier than its 11:00 
a.m. cutoff time.
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    As noted above, exchanges generally receive large trader data 
earlier than the Commission. Staff for several of the exchanges 
indicate that they have a 9 a.m. cutoff time. Another exchange 
apparently receives data by 7 a.m. It would be beneficial for the 
Commission's market surveillance program if all reports were received 
at an earlier time. In addition, if the Commission is to act as a 
central collection point for large trader data, it must be able to meet 
exchange deadlines. In view of this, the Commission is proposing to 
amend rule 17.02 so that all large trader reports are required to be 
submitted to the Commission by 9 a.m. or at such earlier time as 
specified by an exchange that is receiving data from the Commission for 
contract markets on that exchange.

E. Filing Reports Electronically and the Definition of Compatible Data-
Processing Media

    Unless otherwise allowed by the Commission, firms must report large 
trader data on compatible data-processing media.16 This form of 
reporting is efficient, since paper reports need not be filled out and 
filed and key-entry of the data received is not required. A significant 
number of small firms, however, currently have an exception to file 
paper reports. The amount of data filed by each firm is small, 
accounting in total for less than five percent of all large trader data 
collected by the Commission.
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    \16\ 17 CFR 17.00(a) (1995).
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    The Commission is concerned, however, that the amount of data 
submitted on hard-copy reports may increase appreciably if options are 
reported to the Commission. Since reporting OLT positions to the 
Commission is more data-intensive than reporting futures positions, 
there is concern that the number of existing staff will be inadequate 
to key-enter both futures and option large trader data in a timely 
manner. In view of this, the Commission may be more restrictive in 
allowing firms to report in hard-copy format. Since personal computers 
are becoming less expensive, it may not be burdensome for firms to key-
enter large trader data and transmit the data to the Commission. The 
Commission is seeking comment on the magnitude of the burden this may 
impose on smaller firms and whether assistance, such as software 
development, could be provided by Commission staff to ameliorate this 
burden.
    If firms file reports electronically, they must do so on compatible 
data-processing media. This is defined in rule 15.00(l) as:
    1. Unblocked, nine-track, 1600 BPI magnetic tape using EBCDIC 
encoding and a standard IBM label;
    2. Magnetic diskettes using a single-density IBM 3741 format; or
    3. Asynchronous dial-up transmission at 1200 baud or synchronous 
dial-up transmission at 4800 baud.
    The above-mentioned transmission methods are generally outdated. 
For example, cartridge has replaced tape and data transmission speeds 
are far faster than those specified above. The Commission is interested 
to know if standards for data transmission or media use have been 
adopted by members of the futures trading industry, and is seeking 
comment on how best to

[[Page 37413]]

define acceptable data-processing media.

F. Filing Form 102s

    Since account identification information is provided on a form 
rather than electronically, the data are burdensome for firms to 
provide and costly for the Commission to process. This burden is 
compounded for reporting firms since the same form might have to be 
filed at different times with several exchanges as well as the 
Commission. Costs associated with filing this form appear to be the 
principal reason that firms desire to send information to a single 
regulator.
    The Commission can of course act as a single collection point for 
this information as well as that pertaining to positions. The cost of 
doing so, however, may be high since the forms themselves will require 
copying and distribution to the exchanges. This cost could be minimized 
if the information were transmitted electronically to the Commission. 
Two exchanges, independent of this rulemaking, have started work in 
this area.
    One exchange, the CME, has developed software that can be used on a 
reporting firm's computer system. The software allows for key-entry of 
account identification information which is collected in a file for 
subsequent transmission. Another exchange, the CBT, requires that 
member firms electronically transmit partial account identification 
information when an account is first reported. In either case, it 
appears that firms must key-enter the data rather than obtain it from 
other computer files they maintain.
    At this time, the Commission is in the process of gathering more 
information to determine the manner in which it will proceed in this 
matter. Although its staff will be in further contact with the 
exchanges and reporting firms, the Commission is requesting comments 
and suggestions from the industry on either of the exchanges' 
approaches or viable alternatives to collecting account identification 
information electronically.

G. Proposed Implementation

    The Commission expects that implementation of the proposed 
amendments to the regulations will occur over a period of time. 
Reporting firms must develop new formats for transmitting the combined 
option and futures data and new software programs to determine whether 
accounts are reportable. In addition, Commission staff will test data 
transmissions to ensure that formats are correct. In view of this, the 
Commission anticipates that it will make the amended rules effective 
six months after publication in the Federal Register of a final 
rulemaking in this matter. At that time, the requirement in part 16 
that exchanges file weekly OLT data would be deleted.17
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    \17\ The Commission is proposing to delete and reserve 
Secs. 16.02 and 16.03. In addition, the Commission is proposing 
conforming amendments to rules 16.06 and 16.07 to remove references 
to deleted sections of part 16.
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III. Other Exchange Reporting

    In addition to OLT reports required by rule 16.02, exchanges must 
make clearing member reports under rule 16.00 and reports concerning 
volume, open interest and prices under rule 16.01.18 All reports 
made by the exchanges must be on compatible data-processing media and 
are due to the Commission no later than 3 p.m. of the business day 
following the report date of the data. The data are submitted using a 
format and coding structure issued by the Office of the Executive 
Director.
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    \18\ 17 CFR 16.00, 16.01 and 16.02 (1995).
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A. Delta Factors and Settlement Prices

    Included in the data provided under paragraph 16.01 are the 
settlement prices for option and futures contracts and delta-factors 
for option contacts.19 Delta factors are necessary to convert 
option positions to a futures equivalent basis so that traders' futures 
and option positions can be viewed as an economic whole. Deltas must be 
available when option positions are reported in order to interpret the 
positions.
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    \19\ Delta factors are used to equalize the exposure value of an 
option contract with that of the underlying future. Multiplying an 
option contract by a delta factor places the option on a comparable 
basis to the underlying futures contract in terms of value 
fluctuations. The absolute value of the deltas vary between 0 and 1.
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    The Commission understands that delta factors are computed by an 
exchange or its associated clearing house after the close of trading 
and can be made available sooner than volume of trading and open 
interest figures. Settlement prices also are available shortly after 
the close of trading and their timely receipt is important to the 
Commission for its market and financial surveillance programs. In view 
of this, the Commission is proposing to amend rule 16.01 to require 
that exchanges electronically transmit delta factors and settlement 
prices for option and futures contracts by 7 a.m. on the day following 
the report date.20 Commission staff will be in contact with the 
exchanges to discuss changes in record formats that amendments to the 
regulations may entail.21
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    \20\ The report date is the date the data pertain to.
    \21\ These formats will change substantially because of the 
introduction of date-specific or flexible options.
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B. Critical Dates

    Since the inception of the pilot program for exchange-traded 
options, the format and coding instructions issued by the Office of the 
Executive Director have included fields for reporting certain dates 
associated with the terms and conditions of futures and option 
contracts. For futures contracts, this includes first and last notice 
dates and last trading day and for option contracts, expiration date. 
Although the exchanges provide these data, this requirement is not 
explicitly set forth in the Commission's regulations. Commission 
software makes extensive use of some of these dates for market 
surveillance purposes. In view of this, the Commission is proposing to 
amend rule 16.01 to require that the exchanges provide the first notice 
date and last trading date for futures contracts and the expiration 
date for option contracts.

C. Option Exercises and Assigns

    Contract markets report the number of option contracts exercised 
both by clearing members under rule 16.00(a)(5) and for the entire 
market under rule 16.01(a)(5). The Commission is proposing to delete 
these requirements since the information is not important for its 
surveillance program.22
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    \22\ In addition, the Commission is proposing to delete the 
requirement in rule 16.01(a)(6) that contract markets provide the 
number of option contracts expiring unexercised.
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IV. Other Proposed Amendments

A. Cash Position Reports

    The Commission requires that persons owning or controlling futures 
positions in commodities for which the Commission has established 
speculative limits file reports concerning their long and short cash 
positions, i.e., stocks of the commodities owned and the quantity of 
their fixed-price purchase and sale commitments, 17 CFR part 19 (1995). 
These commodities include the grains, the soybean complex and cotton, 
17 CFR part 150 (1995). The primary purpose for these reports is to 
determine if the futures positions of traders that exceed the 
Commission's speculative limits qualify as hedging as defined in 
Sec. 1.3(z) of the Commission's regulations. Additionally, merchants 
and dealers in cotton must provide information on the quantity of their 
``call purchases and

[[Page 37414]]

sales.'' 23 Information concerning call purchases and sales is 
used as a basis for the Commission's weekly ``Cotton on Call'' report.
---------------------------------------------------------------------------

    \23\ Call purchases and sales are unfixed price purchases and 
sales commitments transacted as a basis price referenced to a 
particular cotton futures delivery month.
---------------------------------------------------------------------------

    With the exception of call purchase and sale reports by merchants 
and dealers in cotton, reporting levels for cash position reports (CFTC 
forms 204 and 304) are set at the speculative limit levels defined in 
rule 150.2. 17 CFR 150.2 (1995).24 Only futures positions and not 
option positions are considered when determining reportability for 
purposes of reports due under part 19. See rule 15.00(b)(1)(ii), 17 CFR 
15.00 (1995). The Commission, however, amended part 150 so that the 
speculative limits set forth in rule 150.2 apply to the net long or net 
short combined futures and futures equivalent option position of a 
trader.25 Given the purpose for reports filed under rule 
19.01(a)(1), the Commission is proposing that these reports be provided 
only if a trader's net long or short combined futures and futures 
equivalent options position as defined in part 150 exceeds the level 
specified in rule 150.2.26
---------------------------------------------------------------------------

    \24\ Merchants and dealers in cotton must file reports at the 
lower levels specified in rule 15.03. This lower level for cotton is 
to ensure adequate coverage of call sales and purchases on the 
``Cotton on Call'' report. The Commission is not proposing 
amendments to this reporting level.
    \25\ 58 FR 17972 (March 30, 1993). Commission rules 150.1 (f)-
(h) define futures equivalent and long and short positions as 
follows:
    (f) Futures-equivalent means an option contract which has been 
adjusted by the previous day's risk factor, or delta coefficient, 
for that option which has been calculated at the close of trading 
and published by the applicable exchange under Sec. 16.01 of this 
chapter.
    (g) Long positions means a long call option, a short put option 
or a long underlying futures contract.
    (h) Short positions means a short call option, a long put option 
or a short underlying futures contract.
    \26\ Conforming amendments are also being proposed to rule 
15.01(d). 17 CFR 15.01(d) (1995).
---------------------------------------------------------------------------

B. Submitting Form 40s

    Under Part 18 of the regulations, traders who become reportable in 
futures must file a CFTC form 40, ``Statement of Reporting Trader,'' 
within ten business days following the day that the trader obtains a 
reportable position. Additional filings are made annually as specified 
in rule 18.04(d).27 Traders who become reportable in options are 
required to file the form 40 only in response to a special call by the 
Commission.
---------------------------------------------------------------------------

    \27\ 17 CFR 18.04(d) (1995).
---------------------------------------------------------------------------

    Currently, when an account first becomes reportable in futures, the 
firm reporting the account files a CFTC form 102 that identifies all 
persons having a ten percent or more financial interest in the account 
and those persons who control the trading of the account.28 
Although all persons named on the form 102 may be considered a trader 
according to the Commission's definition in rule 15.00(e), Commission 
staff will determine a trader of primary interest and request a form 40 
from that trader.29 No actions are generally taken against traders 
who do not file an initial form 40 unless they fail to respond to the 
staff's written request. Similarly, Commission staff will request 
updates to form 40s by issuing a written request.30 In view of the 
above, the Commission is proposing to amend rule 18.04 to require that 
traders file form 40's in response to a special call, thus reflecting 
the current operating procedure. Authority to make these calls will be 
delegated to the director of the Division of Economic Analysis. In 
proposing these amendments, the Commission expects that staff will 
continue to obtain initial form 40s from traders and updated form 40s 
on at least a twenty-four-month cycle for traders who continue in 
reporting status.
---------------------------------------------------------------------------

    \28\ 17 CFR 17.01 (1995).
    \29\ At times, Commission staff may request a form 40 from more 
than one person identified on the form 102, but this is rare. The 
Division would continue to maintain this authority under the rule as 
proposed and the proposed delegation authority.
    \30\ Paragraph 18.04(d) requires that if traders remain 
reportable, they update the form 40 after twelve months. Commission 
staff, however, have been requesting that form 40s be updated only 
if traders are in reporting status after a twenty-four-month period. 
An analysis of form 40 updates indicates that few form 40s show 
significant changes in the information contained on the form after a 
one-year period. This action has significantly reduced the number of 
form 40s required from traders with no adverse impact on the 
Commission's surveillance program.
---------------------------------------------------------------------------

V. Related Matters

A. The Regulatory Flexibility Act (RFA)

    The RFA requires that agencies, in proposing rules, consider the 
impact of those rules on small business. These amendments affect large 
traders and futures commission merchants 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 rules in accordance with the RFA. 47 FR 18618-18621 (April 30, 
1982).
    In that statement, the Commission concluded that large traders and 
futures commission merchants should not be considered to be small 
entities for purposes of the RFA. In this regard, the amendments to 
reporting requirements fall mainly upon futures commission merchants. 
Similarly, foreign brokers and foreign traders report only if carrying 
or holding reportable, i.e., large, positions. Pursuant to section 3(a) 
of the RFA (5 U.S.C. 605(b)), the Chairman, on behalf of the 
Commission, certifies that the proposed rules would not have a 
significant economic impact on a substantial number of small entities. 
The Commission invites comments from any firm which believes that these 
rules would have a significant economic impact upon its operations.

B. Paperwork Reduction Act (PRA)

    The PRA of 1980, 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 is submitting these proposed rules and their associated 
information collection requirements to the Office of Management and 
Budget. The burden associated with this entire collection and these 
amended rules, is as follows:

Average burden hours per response................................0.3607
Number of respondents.............................................6,181
Frequency of response.............................................Daily

    Persons wishing to comment on the information which would be 
required by these rules should contact Jeff Hill, 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, Three Lafayette Centre, 1155 
21st Street, NW., Washington, DC 20581, (202) 418-5170.

List of Subjects

17 CFR Part 15

    Brokers, Reporting and recordkeeping requirements.

17 CFR Part 16

    Commodity futures, Reporting and recordkeeping requirements.

17 CFR Part 17

    Brokers, Commodity futures, Reporting and recordkeeping 
requirements.

17 CFR Part 18

    Brokers, Commodity futures, Reporting and recordkeeping 
requirements.

17 CFR Part 19

    Brokers, Commodity futures, Reporting and recordkeeping 
requirements.


[[Page 37415]]


    In consideration of the foregoing, and pursuant to the authority 
contained in the Commodity Exchange Act (Act), and in particular, 
sections 4g, 4i, 5 and 8a of the Act, 7 U.S.C. 6g, 6i, 7 and 12a 
(1994), 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 15.00 is proposed to be amended by revising paragraph 
(b) to read as follows:


 Sec. 15.00  Definitions of terms used in parts 15 to 21 of this 
chapter.

* * * * *
    (b) Reportable position means:
    (1) For reports specified in parts 17, 18 and Sec. 19.00(a)(2) and 
(a)(3) of this chapter any open contract position that at the close of 
the market on any business day equals or exceeds the quantity specified 
in Sec. 15.03 of this part in either:
    (i) Any one future of any commodity on any one contact market, 
excluding futures contracts against which notices of delivery have been 
stopped by a trader or issued by the clearing organization of a 
contract market; or
    (ii) Long or short put or call options that exercise into the same 
future of any commodity on any one contract market.
    (2) For the purposes of reports specified in Sec. 19.00(a)(1) of 
this chapter, any combined futures and futures-equivalent option open 
contract position as defined in part 150 of this chapter in any one 
month or in all months combined, either net long or net short in any 
commodity on any one contract market, excluding futures positions 
against which notices of delivery have been stopped by a trader or 
issued by the clearing organization of a contract market, which at the 
close of the market on the last business day of the week exceeds the 
net quantity limit in spot, single or in all-months fixed in Sec. 150.2 
of this chapter for the particular commodity and contract market.
* * * * *
    3. Section 15.01 is proposed to be amended by revising paragraph 
(d) to read as follows:


Sec. 15.01  Persons required to report.

* * * * *
    (d) Persons, as specified in part 19 of this chapter, either:
    (1) Who hold or control option and futures positions that exceed 
the amounts set forth in Sec. 150.2 of this chapter for the commodities 
enumerated in that section, any part of which constitutes bona fide 
hedging positions (as defined in Sec. 1.3(z) of this chapter); or
    (2) Who are merchants or dealers of cotton holding or controlling 
positions for future delivery in cotton that equal or exceed the amount 
set forth in Sec. 15.03.

PART 16--REPORTS BY CONTRACT MARKETS

    4. The authority citation for Part 16 continues to read as follows:

    Authority: 7 U.S.C. 6a, 6c, 6g, 6i, 7 and 12A.


Secs. 16.02 and 16.03  [Removed and reserved]

    5. Part 16 is proposed to be amended by removing and reserving 
Secs. 16.02 and 16.03.
    6. Section 16.00 is proposed to be amended by revising paragraph 
(a)(5) to read as follows:


Sec. 16.00  Clearing member reports.

    (a) * * *
    (5) For futures, the quantity of the commodity for which delivery 
notices have been issued by the clearing organization of the contract 
market and the quantity for which notices have been stopped during the 
day covered by the report.
* * * * *
    7. Section 16.01 is proposed to be amended by removing paragraphs 
(a)(5) and (a)(6) and redesignating paragraph (a)(7) as (a)(5); by 
redesignating paragraph (c) as (b)(3); and, by adding a new paragraph 
(c) and revising paragraph (d) to read as follows:


Sec. 16.01  Trading volume, open contracts, prices and critical dates.

* * * * *
    (c) Critical dates. Each contract market shall report to the 
Commission for each futures contract the first notice date and the last 
trading date and for each option contract the expiration date in 
accordance with paragraph (d) of this section.
    (d) Reports to the Commission. Unless otherwise approved by the 
Commission or its designee, contract markets shall submit the 
information specified in paragraphs (a), (b) and (c) of this section as 
follows:
    (1) Using a format and coding structure approved in writing by the 
Commission or its designee in both hard-copy form and on compatible 
data processing media;
    (2) When each such form of the data is first available but not 
later than 7 a.m. on the business day following the day to which the 
information pertains for the delta factor and settlement price and not 
later than 3 p.m. for the remainder of the information; and
    (3) Except for dial-up data transmission, at the regional office of 
the Commission having local jurisdiction with respect to such contract 
market.
    8. Section 16.06 is proposed to be revised to read as follows:


Sec. 16.06  Errors or omissions.

    Contract markets shall file with the Commission on compatible data 
processing media using a format and coding structure approved by the 
Commission or its designee, corrections to errors or omissions in data 
previously filed with the Commission pursuant to Secs. 16.00 and 16.01.
    9. Section 16.07 is proposed to be revised to read as follows:


Sec. 16.07  Delegation of authority to the Director of the Division of 
Economic Analysis and the Executive Director.

    The Commission hereby delegates, until the Commission orders 
otherwise, the authority set forth in paragraph (a) of this section to 
the Director of the Division of Economic Analysis and the authority set 
forth in paragraph (b) of this section to the Executive Director to be 
exercised by such director or by such other employee or employees of 
such director as may be designated from time to time by the director.
    (a) Pursuant to Secs. 16.00(b), and 16.01(d) the authority to 
determine whether contract markets must submit data in machine-readable 
form or hard-copy or both, and the time and Commission office at which 
such data may be submitted where the director determines that a 
contract market is unable to meet the requirements set forth in the 
regulations.
    (b) Pursuant to Secs. 16.00(b)(1), 16.01(d)(1), and 16.06, the 
authority to approve the use of data processing media other than 
compatible data processing media as that term is defined in 
Sec. 15.00(1) of this chapter and to approve the format and coding 
structure used by contract markets.

PART 17--REPORTS BY FUTURES COMMISSION MERCHANTS, MEMBERS OF 
CONTRACT MARKETS AND FOREIGN BROKERS

    10. The authority citation for Part 17 continues to read as 
follows:

    Authority: 7 U.S.C. 6a, 6c, 6d, 6f, 6g, 68, 7 and 12a unless 
otherwise noted.

    11. Section 17.00 is proposed to be amended by revising paragraphs 
(a), (d), (e), and (g) to read as follows:

[[Page 37416]]

Sec. 17.00  Information to be furnished by futures commission 
merchants, clearing members and foreign brokers.

    (a) Special Accounts--Reportable futures positions, delivery 
notices and exchanges of futures for cash. (1) Each futures commission 
merchant, clearing member and foreign broker shall submit a report to 
the Commission for each business day with respect to all special 
accounts carried by the futures commission merchant, clearing member or 
foreign broker, except for accounts carried on the books of another 
futures commission merchant on a fully-disclosed basis. Except as 
otherwise authorized by the Commission or its designee, such report 
shall be made on compatible data processing media in accordance with 
the format and coding provisions set forth in paragraph (g) of this 
section. The report shall show each futures position, separately for 
each contract market and for each future, and each put and call option 
position separately for each contract market, expiration month and 
strike price in each special account as of the close of market on the 
day covered by the report and, in addition, the quantity of exchanges 
of futures for physicals and the number of delivery notices issued for 
each such account by the clearing organization of a contract market and 
the number stopped by the account.
    (2) A report covering the first day upon which a special account is 
no longer reportable shall also be filed showing the information 
specified in paragraph (a)(1) of this section.
* * * * *
    (d) Net positions. Futures commission merchants, clearing members 
and foreign brokers shall report positions net long or short in each 
future of a commodity and each strike price of a put or call option for 
each expiration month in all special accounts, except as specified in 
paragraph (e) of this section.
    (e) Gross positions. In the following cases, the futures commission 
merchant, clearing member or foreign broker shall report gross long and 
short positions in each future of a commodity and each strike price of 
a put or call option for each expiration month in all special accounts:
    (1) Positions which are reported to an exchange or the 
clearinghouse of an exchange on a gross basis, which the exchange uses 
for calculating total open interest in a commodity;
    (2) Positions in accounts owned or held jointly with another person 
or persons;
    (3) Positions in multiple accounts subject to trading control by 
the same trader; and
    (4) Positions in omnibus accounts.
* * * * *
    (g) Media and file characteristics. (1) Except as otherwise 
approved by the Commission or its designee, all required records shall 
be submitted together in a single file. Each record will be 80 
characters long. Specific record formats are shown in tables below. 
There are two different record descriptions. The file must begin with a 
type I record identifying the sequence of type II records that follow 
as large trader data.
    (2) The required records are as follows:
    (i) Type I record.

------------------------------------------------------------------------
Beginning                                                               
  column    Length     Type*                 Value or name              
------------------------------------------------------------------------
1........       10        AN   ``X 01 Reg''.                            
11.......        8        AN   Report Date.                             
18.......       62        --   Spaces.                                  
------------------------------------------------------------------------
*AN--Alpha-numeric.                                                     
N--Numeric.                                                             
S--signed numeric.                                                      

    (ii) Type II Record.

------------------------------------------------------------------------
                                 Beginning column                       
 Record  ---------------------------------------------------------------
 Layout    Length     Type*                      Name                   
------------------------------------------------------------------------
1.......        2        AN   Report Type.                              
3.......        3        AN   Reporting Firm.                           
6.......        2        --   Reserved.                                 
8.......       12        AN   Account Number.                           
20......        8        AN   Report Date.                              
28......        2        AN   Exchange Code.                            
30......        1        AN   Put or Call.                              
31......        5        AN   Commodity Code (1).                       
36......        8        AN   Expiration Date (1).                      
44......        7         S   Strike Price.                             
51......        1        AN   Exercise Style.                           
52......        7         N   Long-Buy-Stopped.                         
59......        7         N   Short-Sell-Issued.                        
66......        5        AN   Commodity Code (2).                       
71......        8        AN   Expiration Date (2).                      
79......        2        --   Reserved.                                 
------------------------------------------------------------------------

    (3) Field definitions are as follows:
    (i) Report Type. This report format will be used to report three 
types of data: Long and short futures and option positions, futures 
delivery notices issued and stopped, and exchanges of futures for 
physicals bought and sold. Valid values for the report type are ``RP'' 
for reporting positions, ``DN'' for reporting notices, and ``EP'' for 
reporting futures for physicals.
    (ii) Reporting Firm. The clearing member number assigned by an 
exchange or clearing house to identify reporting firms. If a firm is 
not a clearing member, a three-character alpha-numeric identifier 
assigned by the Commission.
    (iii) Account Number.  A unique identifier assigned by the 
reporting firm to each special account. The field is 0-filled with 
account number right-justified. Assignment of the account number is 
subject to the provisions of Secs. 17.00 (b) and (c) and 17.01(a).
    (iv) Report Date. The format is YYYYMMDD, where YYYY is the year, 
MM is the month, and DD is the day of the month.
    (v) Exchange. This is a two-character field used to identify the 
exchange on which a position is held. Valid values are as follows:

01..............................  Chicago Board of Trade.               
02..............................  Chicago Mercantile Exchange.          
03..............................  MidAmerica Commodity Exchange.        
06..............................  Coffee, Sugar and Cocoa Exchange.     
07..............................  Comex Division of NYME.               
08..............................  Kansas City Board of Trade.           
09..............................  Minneapolis Grain Exchange.           
10..............................  Philadelphia Board of Trade.          
12..............................  New York Mercantile Exchange.         
13..............................  New York Cotton Exchange.             
15..............................  New York Futures Exchange.            
                                                                        

    (vi) Put-Call Code.  Valid entries are ``C'' for a call option and 
``P'' for a put option. For futures, the field is blank.
    (vii) Commodity (1). An exchange-assigned commodity code for the 
futures or option contract.
    (viii) Expiration Date (1). The date format is YYYYMMDD and 
represents the expiration date or delivery date of the reported futures 
or option contract. For date-specific instruments such as flexible 
products, the full date must be reported. For other options and 
futures, this field is used to report the expiration year and month for 
an option contract or a delivery year and month for a futures contract. 
The day portion of the field for these contracts contains spaces.
    (ix) Strike Price. This is a signed numeric field for reporting 
option strike prices. The strike prices should be right- justified and 
the field zero-filled. Strike prices must be reported in the same 
formats that are specified by an exchange. For futures, the field is 
left blank.
    (x) Exercise Style. Valid values for this field are ``A'' for 
American style options, i.e., those that can be exercised at any time 
during the life of the options; and ``E'' for European, i.e., those 
that can be exercised only at the end of an option's life. This field 
is required only for flexible instruments or as otherwise specified by 
the Commission.
    (xi) Long-Buy-Stopped (Short-Sell-Issued). When report type is 
``RP'', report long(short) positions open at the

[[Page 37417]]

end of a trading day. When report type is ``DN'', report delivery 
notices stopped (issued) on behalf of the account. When report type is 
``EP'', report purchases (sales) of futures for cash for the account. 
Report all information in contracts. Position data are reported on a 
net or gross basis in accordance with paragraphs (e) and (d) of this 
section.
    (xii) Commodity (2). The exchange assigned commodity code for a 
futures contract or other instrument that a position is exercised into 
from a date-specific or flexible option.
    (xiii) Expiration Date (2). Similar to other dates, the format is 
YYYYMMDD and represents the expiration date or delivery month and year 
of the future or other instrument that a position is exercised into 
from a date-specific or flexible option.
* * * * *
    12. Section 17.02 is proposed to be amended by revising paragraph 
(a) as follows:


Sec. 17.02  Place and Time of Filing Reports.

* * * * *
    (a) For data submitted on compatible data processing media:
    (1) At the Chicago Regional office for dial-up data transmission; 
at the Chicago or New York Regional Office for magnetic tape; and at 
the Chicago, New York or Kansas City Regional Office for magnetic 
diskettes.
     (2) Not later than 9 a.m. on the business day following that to 
which the information pertains or for contract markets on an exchange 
that is receiving data from the Commission, at such earlier time as 
specified by the exchange.
* * * * *
    13. Section 17.04 is proposed to be amended by revising paragraph 
(a) and the introductory text of paragraph (b) to read as follows:


Sec. 17.04  Reporting omnibus accounts to the carrying futures 
commission merchant or foreign broker.

    (a) Any futures commission merchant, clearing member or foreign 
broker who establishes an omnibus account with another futures 
commission merchant or foreign broker shall report to that futures 
commission merchant or foreign broker the total open long positions and 
the total open short positions in each future of a commodity, and, for 
commodity option transactions, the total open long put options, the 
total open short put options, the total open long call options, and the 
total open short call options for each commodity option expiration date 
and each strike price in such account at the close of trading each day. 
The information required by this section shall be reported in 
sufficient time to enable the futures commission merchant or foreign 
broker with whom the omnibus account is established to comply with Part 
17 of these regulations and reporting requirements established by the 
contract markets.
    (b) In determining open long and open short futures positions, and 
open purchased long and open granted short option positions, in an 
omnibus account for purposes of complying with Sec. 17.00(f), 
Sec. 1.37(b) and Sec. 1.58 of this chapter, a futures commission 
merchant, clearing member or foreign broker shall total the open long 
positions of all traders and the open short positions of all traders in 
each future of a commodity and, for commodity option transactions, 
shall total the open put long options, the open short put options, the 
open long call options, and the open short call options of all traders 
for each commodity option expiration date and each strike price. The 
futures commission merchant, clearing member or foreign broker shall, 
if both open long and short positions in the same future are carried 
for the same trader, compute open long or open short futures positions 
as instructed below.
* * * * *

PART 18--REPORTS BY TRADERS

    14. The authority citation for part 18 continues to read as 
follows:

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

    15. Part 18 is proposed to be amended by adding a new Sec. 18.03 as 
follows:


Sec. 18.03  Delegation of authority to the Director of the Division of 
Economic Analysis.

    The Commission hereby delegates, until the Commission orders 
otherwise, the authority to make special calls on traders for 
information as set forth in Secs. 18.00, 18.04 and 18.05 to the 
Director of the Division of Economic Analysis to be exercised by the 
Director or by such other employee or employees of the Director as may 
be designated from time to time by the Director.
    16. Section 18.04 is proposed to be amended by removing paragraph 
(d) and by revising the introductory text to read as follows:


Sec. 18.04  Statement of reporting trader.

    Every trader who holds or controls a reportable option or futures 
position shall after a special call upon such trader by the Commission 
or its designee file with the Commission a ``Statement of Reporting 
Trader'' on the form 40 at such time and place as directed in the call. 
All traders shall complete part A of the form 40 and, in addition, 
shall complete:

    Part B--If the trader is an individual, a partnership or a joint 
tenant.
    Part C--If the trader is a corporation or type of trader other 
than an individual, partnership, or joint tenant.
* * * * *

PART 19--REPORTS BY PERSONS HOLDING BONA FIDE HEDGE POSITIONS 
PURSUANT TO Sec. 1.3(Z) OF THIS CHAPTER AND BY MERCHANTS AND 
DEALERS IN COTTON

    17. The authority section for part 19 continues to read as follows:

    Authority: 7 U.S.C. 6g(a), 6i and 12a(5), unless otherwise 
noted.

    18. Section 19.00 is proposed to be amended by revising paragraphs 
(a)(1) and (a)(3) to read as follows:


Sec. 19.00  General provisions.

    (a) * * * 
    (1) All persons holding or controlling options or futures positions 
that are reportable pursuant to Sec. 15.00(b)(2) of this chapter and 
any part of which constitute bona fide hedging positions as defined in 
Sec. 1.3(z) of this chapter,
* * * * *
    (3) All persons holding or controlling positions that are 
reportable pursuant to Sec. 15.00(b)(1) of this chapter who have 
received a special call for series '04 reports from the Commission or 
its designee. Filings in response to a special call shall be made 
within one business day of receipt of the special call unless otherwise 
specified in the call. For the purposes of this paragraph, the 
Commission hereby delegates to the Director of the Division of Economic 
Analysis, or to such other person designated by the Director, authority 
to issue calls for series '04 reports.
* * * * *
    Issued in Washington, DC., this 12th day of July, 1996, by the 
Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 96-18262 Filed 7-17-96; 8:45 am]
BILLING CODE 6351-01-P