[Federal Register Volume 62, Number 85 (Friday, May 2, 1997)]
[Rules and Regulations]
[Pages 24026-24034]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11396]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Parts 1, 15, 16 and 17


Recordkeeping; Reports by Futures Commission Merchants, Clearing 
Members, Foreign Brokers, and Large Traders

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule.

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SUMMARY: The Commodity Futures Trading Commission (Commission) is 
amending its regulations to require that futures commission merchants, 
clearing members and foreign brokers (firms) file options large trader 
reports with the Commission on a daily basis. The amendments specify a 
joint options and futures reporting level, a new record format for 
reporting information in machine-readable form, an earlier time for 
submission of the data, and a requirement that corrections to 
previously transmitted data be provided in machine-readable form. The 
rule amendments more closely align the Commission's reporting rules 
with those of the exchange and may allow some exchanges to obtain data 
from the Commission rather than from reporting firms. The proposed 
amendments deleting from requirement that exchanges file weekly options 
large trader reports will be made effective after all firms are 
providing the required reports daily.
    The collection of daily options large trader data cannot begin 
until the Commission has reengineered its data collection system. Since 
the Commission anticipates completion of the necessary changes by 
September 1997, it is setting the effective date for the amendments as 
October 1, 1997. The Commission believes that, by publishing final 
rules at this time, firms will have ample lead time to make changes to 
their internal procedures and computer software so that joint testing 
of Commission and firms software may begin on or shortly after October 
1, 1997. Since this testing may take a period of time to complete, the 
Commission will take no enforcement action during the testing period 
against

[[Page 24027]]

reporting firms if they are not in compliance with the new requirements 
provided that firms are making a good faith effort to comply and 
continue in compliance with the reporting rules in effect immediately 
prior to the adoption of these rules. If the Commission cannot meet its 
schedule for software development, it may at a later date delay 
implementation of these rules.

EFFECTIVE DATE: October 1, 1997.

FOR FURTHER INFORMATION CONTACT: Lamont L. Reese, Commodity Futures 
Trading Commission, Division of Economic Analysis, Three Lafayette 
Centre, 1155 21st Street, NW., Washington, DC 20581, telephone (202) 
418-5310 or E-mail [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    The Commission employs a comprehensive market surveillance system 
which includes an exclusive data-gathering system relying heavily on 
computer support. Regulations concerning this system require reports 
from three primary sources: contract markets under Part 16 of the 
regulations; future commission merchants (FCMs), 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. See 17 CFR 
Parts 16 through 21 (1996).
    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\ 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.\2\ Additionally, firms must file a CFTC form 102 
showing the identifying information specified under Section 17.01 of 
the regulations for each special account, 17 CFR 17.01 (1996). With 
respect to exchange-traded options, 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 options trader controlling a reportable position as of the 
close of business on Tuesday.\3\
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    \1\ Special account means any commodity futures or options 
account in which there is a reportable position, 17 CFR 15.00 
(1996). Firms report futures information to the Commission and 
futures and options information to the exchanges. A reportable 
position in 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 (1996).
    \2\ See rule 17.00(g) for a description of the file 
characteristics and rule 15.00(1) for a definition of compatible 
data processing media, 17 CFR 15.00(1) and 17.00(g) (1996).
    \3\ See 17 CFR 16.02 (1996). A reportable options position is 
defined as any open contract position on any one contract market in 
the put options or separately in the call options of a specified 
option expiration date which exceeds 50 contracts, 17 CFR 
15.00(b)(2) (1996).
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    Due to the importance of knowing both a trader's open futures and 
options positions for general and financial surveillance, the 
Commission proposed rule changes that would require firms to report 
large trader futures and options positions to the Commission on a daily 
basis, 61 FR 37409 (July 18, 1996). The proposed amendments included 
redefining reporting levels, establishing joint reporting of futures 
and options, changing the current format for reporting data on machine-
readable media, and revising the time by which data must be supplied by 
reporting firms. A number of these rule amendments were intended more 
closely to align the Commission's and the exchanges' reporting rules, 
allowing the potential for the Commission to act as a central 
collection point for large trader data and distribute such data to the 
exchanges.\4\ The Commission also requested comment on matters 
regarding electronic transmission of data, computerizing its account 
identification form, and related rule amendments concerning exchange 
reporting of delta factors and settlement prices.
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    \4\ As explained in the Federal Register release, firms 
currently report futures and options data to the exchanges and 
futures data to the Commission. Using the Commission as a single 
collection point for large trader data was suggested by reporting 
firms through operations committees of the Futures Industry 
Association (FIA) as a means to reduce reporting burdens in the 
industry, 61 FR 37410 (July 18, 1996).
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    In addition to the above, the Commission proposed amendments to 
Parts 18 and 19 of the regulations concerning reports filed by large 
traders which were unrelated to options large trader reporting. The 
amendments proposed to Part 18 required that traders who have 
reportable futures or options positions file a CFTC form 40, 
``Statement of Reporting Trader,'' only in response to a special 
call.\5\ The amendments proposed to Part 19 required that traders file 
cash position reports based on a trader's net futures and option 
positions. Currently, reporting levels for the cash position reports 
are based only on a trader's futures positions. The Commission has 
adopted these amendments in a separate rulemaking.\6\
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    \5\ 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).
    \6\ See 62 FR 6112 February 11, 1997.
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II. Discussion of Comments and Final Rules

    The Commission received eight comment letters concerning its notice 
of proposed rulemaking relating to daily option large trader reports. 
Commenting were the FIA, five exchanges, an FCM, and a service bureau 
that provides back-office support to reporting firms. In addition, 
Commission staff met with exchange representatives and attended a 
meeting of the FIA's operations committee to answer questions about the 
rule amendment.

A. General Considerations.

    Commentors agreed that the Commission needs daily futures and 
options large trader positions for effective market surveillance and 
that such data should be reported by firms directly to the Commission 
rather than the Commission's obtaining the data from the exchanges. In 
view of this, the Commission has determined to obtain futures and 
options position data directly from the firms. The Commission also 
proposed amendments to Part 16 of its regulations that delete the 
requirement that exchanges provide such data. As explained more fully 
below, the Commission will adopt as final the amendments to Part 16 
after it begins receiving option large trader data from the firms.
    Commentors also supported adoption of uniform reporting rules by 
the exchanges and the Commission. Generally, they believed that such 
actions would reduce reporting burdens for most firms by eliminating 
the maintenance costs for the many systems that are currently in place. 
In commenting on this, the FIA opined that, ``although cost savings to 
FIA member firms are difficult to quantify with any precision, FIA has 
no doubt that such savings are real and, over time, will be 
significant.''
    There were, however, significant concerns about the Commission's 
acting as a central depository for large trader data and distributing 
such data to the exchanges. These concerns centered around time frames 
for receipt of the data, control over the process of receiving such 
data, and accountability of reporting firms to the Commission and the 
exchanges. Commentors questioned whether the Commission could supply 
data in accordance with current exchange requirements or on government 
holidays when the

[[Page 24028]]

exchanges are open. Additionally, they were concerned whether there 
would be sufficient backup procedures to ensure that data could be 
supplied to the exchanges in the event of computer problems or 
communication failures at the firms or the Commission. One commentor 
noted that cost savings envisioned by this proposal may not materialize 
if the exchanges must maintain backup procedures with their clearing 
members.
    Although Commission staff will address many of these issues in the 
course of developing the Commission's surveillance system, the issues 
may not be resolved to the satisfaction of every exchange. 
Nevertheless, reporting burdens on the industry can be reduced, as 
commentors suggested, if the Commission and the exchanges adopt uniform 
formats for transmitting and uniform rules for reporting large trader 
data. In this respect, the proposed rules for determining reportability 
and for reporting appear to be consistent with or satisfactory for use 
in exchange reporting systems.\7\ Similarly, the reporting format 
proposed by the Commission, with the exception of minor technical 
amendments discussed below, appears suitable for all exchange reporting 
systems, and a number of exchanges have stated they plan to adopt it. 
The Commission believes that significant cost savings and efficiencies 
can be achieved by reporting firms if all exchanges adopt a common 
format for reviewing large trader position data. Accordingly, the 
Commission encourages all exchanges to adopt the format specified in 
these regulations even if they ultimately choose not to receive their 
large trader position data from the Commission.\8\
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    \7\ These rules include proposed amendments to Part 15 that 
define a reportable position and proposed amendments to Part 17 that 
require reporting of all futures and options positions if a trader 
becomes reportable. The Commission did not propose rule amendments 
that would adjust its reporting levels to those set by the 
exchanges. Reporting firms can obtain uniformity in this respect by 
submitting data at the lower of either the exchanges' or the 
Commission's reporting level. Although the Commission will retain 
only the data it requires for its purposes, it will have the 
capability to transmit to an exchange all data pertaining to that 
exchange that the Commission receives.
    \8\ Other avenues to reduce reporting burdens will be 
investigated as well. One commentor suggested, for example, that 
firms may reduce costs if they can use software already developed 
sequentially to transmit the same data to different locations.
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B. Proposed Formats and Reporting

    Three persons commented on the Commission's proposed amendments to 
its format for reporting data on machine-readable media. One of the 
commentors requested that the Commission add a one-character field to 
designate whether a record submitted by a reporting firm either changed 
or deleted a previously-transmitted record or represented a new record. 
The Commission has changed its proposed format in accordance with this 
request.\9\ Another commentor requested that the Commission retain its 
five-digit designation for reporting firms and its six-digit 
designation for contract markets. The Commission proposed that firms 
and contract markets be identified by using exchange-assigned 
designators. This commentor believed that such a change may minimize 
programming costs since all firms have programmed Commission codes into 
their existing systems. This argument is not persuasive. Reporting 
firms must also program exchange codes in their systems, not only for 
reporting to the exchanges, but also for clearing transactions. Using 
Commission-generated codes would require that all exchanges and all 
firms keep and periodically update tables for Commission codes as well 
as those assigned by the exchanges. It appears that the reporting 
burden on the industry is reduced if only exchange codes are used. In 
addition to the above, the Commission's Office of Information Resources 
Management has determined there is no need for the Type I record 
described in proposed regulation 17.00(g)(2)(i). The Commission is 
therefore amending its proposal to exclude the requirement to submit 
this record. No suggestions were made for changes to the Commission's 
proposed amendments to rule 15.00 that define a reportable position or 
to the proposed amendments to rule 17.00(a) that define the information 
that must be reported. The Commission therefore is adopting the 
amendments to rules 15.00 and 17.00(a) as proposed and the amendments 
to rule 17.00(g) as discussed above.
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    \9\ Use of this field is described more fully below in the 
discussion on correcting errors.
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C. Transmission of Data

    The Commission requested comment on the potential burden to small 
firms if all large trader data were required to be reported on machine-
readable media. As explained in its notice of proposed rulemaking, a 
significant number of firms file paper reports. Although the amount of 
data filed in this form currently is small, this may increase 
appreciably when the Commission collects option large trader data. Two 
persons commented on this aspect of the Commission's proposed 
rulemaking. Both expressed the opinion that no exceptions to electronic 
reporting be allowed since key entry of paper reports impedes timely 
access to large trader positions.
    Currently, regulation 17.00 requires all firms to file 
electronically except as otherwise authorized by the Commission or its 
designee. Previously, exemptions from this requirement were liberally 
granted because of the relatively high cost for computer hardware and 
software needed to transmit small amounts of data. Recently, lower 
costs have made personal computers (PCs) equipped with fax/modems more 
commonplace for business applications. In this respect, Commission 
staff are developing a PC based software application that will 
facilitate data entry for large trader positions. Staff will be 
contacting firms that currently file manual reports to determine costs 
a firm may incur to transmit data using a PC and will offer the data 
entry software free of charge. In light of their findings, 
determinations will be made on a case-by-case basis whether to require 
electronic filing.
    The Commission also sought comment on how best to define acceptable 
data processing media. Commission-compatible data processing media is 
currently defined in rule 15.00(1), but is somewhat outdated. Three 
persons provided suggestions on this matter. Two of the commentors 
recommended specific but differing forms of data transmission. The FIA 
questioned whether it was practical to define this term by regulation 
since electronic media are evolving at such a rapid pace. The 
Commission agrees that flexibility is required in this area. Currently, 
authority is delegated to the Executive Director to approve the use of 
data processing media other than that specified in rule 15.00(1). See 
17 CFR 16.07(b) and 17.03(c) (1996). In view of the above, the 
Commission sees no value in citing specific media as acceptable. The 
Commission is amending rule 15.00(1) to delete its list of specific 
media and to define Commission-compatible data processing media to mean 
media approved by the Commission or its designee. The Executive 
Director will continue to have delegated authority to define acceptable 
media.\10\
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    \10\ This delegation of authority is being set forth in revised 
rule 15.00(1), and conforming amendments are being made to rules 
1.31, 16.07(b) and 17.03(c). With the exception of 8 inch magnetic 
discs, the Commission will continue to accept data on media as 
currently defined in rule 15.00. No data currently are provided on 8 
inch magnetic discs. The Commission will support submission of data 
on diskettes generated by personal computers and on certain tape 
cartridges.

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[[Page 24029]]

D. Correction of Errors

    The Commission did not address the issue of error correction in its 
notice of proposed rulemaking. Commission rule 17.00(h) requires that 
errors and omissions be filed on hard copy forms or computer printouts. 
One person in commenting requested that dial-up screens and procedures 
be made available for adjustments to previous transmissions, noting 
that overlaying previously reported data is costly and time consuming. 
This commentor noted that corrections are problematic with respect to 
data for one exchange in particular since the firm's accounting system 
cannot handle the exchange's timetable for processing data on those 
weekends that options expire.
    Generally, the Commission receives few, if any, corrections to 
position data resulting from adjustments for deliveries or option 
expirations that occur over a weekend. The Commission expects that such 
adjustments will be reflected in changes to traders' positions as of 
the close of business on the next business day. Similarly, the 
Commission expects that changes to open interest resulting from such 
adjustments will be reflected in the open interest published for the 
next business day. Adjusting positions otherwise may be unique to a 
particular exchange.
    As noted above, the Commission is designating a field in its 
reporting format that may be used by firms to specify certain records 
they submit as changes or deletions to previously transmitted records. 
Rule 17.00(h) must also be amended if corrections are to be made on 
machine-readable media. In order to limit the number of paper reports 
filed by firms, the Commission is amending rule 17.00(h) to require 
that corrections to previously filed reports be submitted in machine-
readable form using the format specified in rule 17.00(g) unless 
otherwise authorized by the Commission or its designee.\11\ The amended 
rule 17.00(h) requires that, when deleting a record, firms supply all 
information contained on the previously submitted record with a ``D'' 
in the eightieth column. When changing a record, firms must supply the 
information that changed as well as all other information on the record 
that was previously submitted either leaving the eightieth column blank 
or inserting a ``C''. Commission staff will consider the need for 
additional means to correct errors in its dealings with individual 
exchanges on issues related to providing them with large trader data.
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    \11\ As with the information provided under rule 17.00(a), the 
Commission is delegating authority to the Director of the Division 
of Economic Analysis to determine if firms will be allowed to report 
data under rule 17.00(h) on hard copy forms or printouts. Rule 17.03 
is being amended to effect this delegation.
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E. Electronic Transmission of Account Identification Information

    Commission regulations require that firms identify all special 
accounts on a CFTC form 102. Under current regulations, initial 
identifying information must be provided on call by the Commission when 
the account is first reported, and a completed form 102 must then be 
filed within three business days. See 61 FR 6310 (February 20, 1996). 
The Commission recognized in its notice of proposed rulemaking that 
supplying this information was burdensome since firms must submit this 
form to multiple regulators for each special account they report. The 
Commission noted, however, that two exchanges, the Chicago Board of 
Trade (CBT) and the Chicago Mercantile Exchange, have or are in the 
process of providing means for electronic transmission of this 
information. The Commission requested comment on either of the 
exchanges' approach or other viable alternatives that might reduce 
burdens associated with reporting this information. Two persons, 
including the CBT, submitted comments concerning this matter.
    The CBT recommended that the Commission's proposed record format be 
altered to include the name, address and type of newly reported 
accounts. This is similar to the CBT's current system for account 
identification wherein reporting firms provide partial account 
identification information on two records which are transmitted 
electronically. The CBT offered access to its personal information 
program that insures the receipt of appropriate data suggesting this 
could be used as an interim system until programs for submissions of 
electronic form 102s are fully operational. Adoption of a system 
similar to that of the CBT would save processing costs for the 
Commission since it now receives similar limited information by 
telephone or facsimile and key-enters the data. Commission staff will 
more fully investigate the operation of the CBT's system. The 
Commission, however, will consider changes to its regulations for 
obtaining account identification information only after it begins 
collecting daily option large trader data.

E. Time and Place for Filing Reports

    The Commission proposed amending rule 17.02 to require that firms 
file large trader position reports earlier than is currently required. 
In proposing this amendment, the Commission noted that exchanges 
currently impose an earlier filing time than the Commission and that 
the Commission's market surveillance program would benefit if the 
reports were received earlier. To align its reporting rules more 
closely with those of the exchanges, the Commission proposed that all 
large trader reports be submitted by 9:00 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.\12\
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    \12\ Times refer to eastern times for markets located in that 
time zone and central time for all other markets.
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    Several exchanges commented about time frames for filing large 
trader reports, expressing concern that, if the Commission acts as a 
central depository, they continue to receive large trader data in a 
timely fashion. In meetings with Commission staff, members of the FIA 
questioned whether it was appropriate to make it a violation of 
Commission regulations if firms did not submit reports within earlier 
deadlines set by exchanges.
    Many issues remain if the Commission is to distribute large trader 
data to the exchanges. Whether the Commission can supply data in the 
time frame required by any particular exchange can only be answered 
after the Commission begins testing data transfers. At that time the 
Commission and the exchanges can jointly determine procedures that may 
be necessary to ensure the timeliness of large trader data. In view of 
this, the Commission is amending its proposal to require only that data 
be supplied to the Commission by 9:00 a.m. Since there were no 
objections to this 9:00 a.m. filing time, the Commission is adopting 
its proposal as amended. This rule does not preclude exchanges' 
requiring their members to submit large trader data to the Commission 
earlier so they may, in turn, receive it earlier from the Commission. 
The Commission anticipates that assuring the timeliness and 
completeness of large trader reporting by exchange members will be a 
shared Commission/exchange responsibility if exchanges determine to 
receive data from the Commission.
    In addition to specifying the time that reports must be filed, Rule 
17.02 specifies the location where various electronic media can be 
routinely filed. Currently, rule 17.02 allows data to be submitted via 
dial-up transmission only at the Chicago Regional Office, data to be 
submitted via magnetic tape at either the New York or Chicago Regional 
Office and data to be submitted by magnetic diskette at the Kansas 
City,

[[Page 24030]]

Chicago, or New York Regional Office. Hardware to support these 
functions must be purchased, maintained and operated at the appropriate 
locations. In this respect, the Commission must purchase new tape 
readers as part of its reengineering project.
    At the current time, no exchanges or firms routinely submit data on 
magnetic tape at the New York Regional Office. In view of the costs 
involved, the Commission has determined that it will not purchase a new 
tape reader to allow routine submissions of large trader data on 
magnetic tape (reel or cartridge) at its New York Regional Office. 
Back-up facilities will be maintained in this office for such media in 
the event that firms or exchanges cannot transmit data. The Commission 
is amended Rule 17.02 to reflect this determination.
    The Commission has determined that the Administrative Procedure 
Act, 5 U.S.C. 553(b)(1994), does not require notice of proposed 
rulemaking and an opportunity for public participation in connection 
with the adoption of this amendment. In this regard, the Commission 
notes that such notice and opportunity for comment is unnecessary 
because this rule amendment relates solely to agency procedure or 
practice, does not establish any new obligations under the Commodity 
Exchange Act and does not affect the current reporting by any firm. 
Moreover, the expenditure of funds to support an unused method of 
reporting would appear to be contrary to the public interest. In any 
event, the Commission will have equipment available for non-routine 
processing of magnetic tape.
    Although this rule amendment is being promulgated as a final rule, 
the Commission nevertheless will consider comments from interested 
persons concerning this amendment within 60 days of publication in the 
Federal Register. Comments should be mailed to the Commodity Futures 
Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., 
Washington, D.C. 20581, attention: Office of the Secretariat or send 
via E-mail to [email protected] and should make reference to 
``Option Large Trader Reports''.

F. Other Exchange Reporting

    The Commission proposed amendments to rules 16.00 and 16.01 under 
which exchanges make reports concerning clearing member activity and 
provide market statistics. See 17 CFR 16.00 and 16.01 (1996). The 
proposed amendments require that exchanges provide option and futures 
market settlement prices and option delta factors by 7:00 a.m. on the 
business day following the report date for the data.\13\ Currently, the 
data are not provided until 3:00 p.m. of the day following the report 
day. The Commission also proposed to delete the requirement that 
exchanges provide the number of options exercised and assigned and the 
number expiring unexercised. Last, the Commission proposed that the 
current practice of the exchanges in providing information concerning 
first notice day and last trading day for futures contracts and 
expiration date for options contracts be set forth as a requirement 
under rule 16.01. There were no objections to adoption of these 
proposals. In view of this, the Commission is adopting the amendments 
to rules 16.00 and 16.01 as proposed.
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    \13\ The report date is the business day to which the data 
pertains.
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G. Implementation Schedule

    As noted above, the Commission is in the process of obtaining new 
hardware and reengineering its market surveillance software to 
accommodate the receipt and processing of daily option large trader 
data. This involves a lengthy time period during which internal 
software requirements will be defined and the software developed and 
tested. It is only after these tasks are completed that the Commission 
can begin receiving data from firms on a routine basis. Since the 
Commission expects that its software development and internal testing 
will be completed by the end of September 1997, it is setting an 
effective date of October 1, 1997, for these rules. However, at this 
time the Commission cannot be certain of this timetable for completion. 
For this reason, the Commission may at a later date delay 
implementation of these rules.
    Reporting firms must also develop software for the new format 
specified in Part 17. Such software and the Commission's software must 
be jointly tested to ensure that data can be received and processed. 
Since joint testing may not begin until after the effective date of 
these rules and since firms must be dealt with on an individual basis, 
this process will require some period of time beyond October 1, 1997, 
before all firms are in compliance with the new rules. In view of this, 
until the testing is complete, the Commission will take no enforcement 
action against a firm if it is not in compliance with the new rules by 
October 1, 1997, provided that the firm is making a good faith effort 
to comply with the new rules and, until testing is completed, continues 
in compliance with the reporting rules in effect immediately prior to 
the adoption of these new rules.
    During this period of testing, the Commission will continue to 
receive weekly option large trader reports from the exchanges. After 
the Commission is receiving all daily option large trader reports from 
firms, it will undertake a final rule making concerning its proposed 
amendments to Part 16 that delete the requirement that exchanges 
provide such data. Since firms may be providing daily options large 
trader data for an exchange or all exchanges prior to the effective 
data of the amendments to Part 16, the Commission will take no 
enforcement action against an exchange for not providing weekly option 
large trader date if it makes a finding that firms are providing such 
data for contract markets on the exchange. The Commission is delegating 
to the Director of the Division of Economic Analysis the authority to 
make the necessary findings and determinations concerning reporting by 
firms.

III. Other Related Matters

A. The Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) 5 U.S.C. 601 et seq., requires 
that agencies consider the impact of these rules on small businesses. 
The Commission has previously determined that large traders and futures 
commission merchants are not ``small entities'' for purposes of the 
Regulatory Flexibility Act, 47 FR 18618-18621 (April 30, 1982). 
Therefore, the Chairperson, on behalf of the Commission, hereby 
certifies, pursuant to 5. U.S.C. 605(b), that the action taken herein 
will not have a significant economic impact on a substantial number of 
small entities.

B. Paperwork Reduction Act (PRA)

    When publishing final rules, the Paperwork Reduction Act of 1995 
(Pub. L. 104-13 (May 13, 1995)) imposes certain requirements on federal 
agencies (including the Commission) in connection with their conducting 
or sponsoring any collection of information as defined by the Paperwork 
Reduction Act. In compliance with the Act, these final rules and/or 
their associated information collection requirements inform the public 
of:

    ``(1) the reasons the information is planned to be and/or has 
been collected; (2) the way such information is planned to be and/or 
has been used to further the proper performance of the functions of 
the agency; (3) and estimate, to the extent practicable, of the 
average burden of the collection (together with a request that the 
public direct to the

[[Page 24031]]

agency any suggestions for reducing this burden); (4) whether 
responses to the collection of information are voluntary, required 
to obtain or retain a benefit, or mandatory; (5) the nature and 
extent of confidentiality to be provided, if any; and (6) the fact 
that an agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it 
displays a currently valid OMB control number.''

    The Commission previously submitted these rules in proposed form 
and their associated information collection requirements to the Office 
of Management and Budget. The Office of Management and Budget approved 
the collection of information associated with these rules on November 
26, 1996, and assigned OMB control number 3038-0009 to the rules. The 
burden associated with the entire collection, including these final 
rules, is as follows:
    Average burden hours per response: 0.3607.
    Number of Respondents: 6181.
    Frequency of response: Daily.
    The burden associated with these specific final rules, is as 
follows:
    Average burden hours per response: .3264.
    Number of Respondents: 585.
    Frequency of response: Daily.
    Persons wishing to comment on the information required by these 
final rules should contact the Desk Officer, CFTC, Office of Management 
and Budget, Room 10202, NEOB, Washington, DC 20503, (202) 395-7340. 
Copies of the information collection submission to OMB are available 
from the CFTC Clearance Officer, 1155 21st Street, NW, Washington, DC 
20581, (202) 418-5160.

List of Subjects

17 CFR Part 1

    Reporting and recordkeeping requirements.

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.

    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 1--GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT

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

    Authority: 7 U.S.C. 2, 2a, 4, 4a, 6, 6a, 6b, 6c, 6d, 6f, 68, 6h, 
6i, 6k, 6l, 6m, 6n, 6o, 7, 7a, 7b, 8, 9, 12, 12a, 13a, 13a-1, 16, 
16a, 19, 21, and 24, unless otherwise noted.

    2. Section 1.31 is amended by revising paragraphs (c)(1)(iii) and 
(c)(3) to read as follows:


Sec. 1.31  Books and records; keeping and inspection.

* * * * *
    (c) * * *
    (1) * * *
    (iii) If the records are preserved on optical disk, facilities for 
immediately producing complete, accurate and easily readable hard 
copies of the records and the means to provide, immediately upon 
request, any Commission or Department of Justice representative with 
copies of the records on Commission compatible machine-readable media 
as defined in Sec. 15.00(l)(1) of this chapter.
* * * * *
    (3) Be ready at all times to provide, and immediately provide at 
the expense of the person required to keep such records, any hard copy 
or facsimile enlargement of such records, and for records stored on 
optical disk, copies of such records on approved machine-readable media 
as defined in Sec. 15.00(l)(1) of this chapter which any representative 
of the Commission or U.S. Department of Justice may request. Records on 
machine-readable media must use a format and coding structure specified 
in the request; and
* * * * *

PART 15--REPORTS--GENERAL PROVISIONS

    3. 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).

    4. Section 15.00 is amended by revising paragraphs (b) and (1) 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 contract market, 
excluding future 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.
* * * * *
    (1) Compatible data processing media. This term means data 
processing media approved by the Commission or its designee. The 
Commission hereby delegates, until the Commission orders other-wise, 
the authority to approve data processing media for data submissions to 
the Executive Director to be exercised by such Director or by such 
other employee or employees of such Director as designated from time to 
time by the Director. The Executive Director may submit to the 
Commission for its consideration any matter which has been delegated in 
this paragraph. Nothing in this paragraph prohibits the Commission, at 
its election, from exercising the authority delegated in this 
paragraph.

PARTS 16--REPORTS BY CONTRACT MARKETS

    5. The authority citation for part 16 continues to read as follows:

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

    6. Section 16.00 is 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.
* * * * *

[[Page 24032]]

    7. Section 16.01 is amended by revising the heading, removing 
paragraphs (a)(5) and (a)(6) and redesignating paragraph (a)(7) as 
(a)(5); by redesignating paragraph (c) as paragraph (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 7:00 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 3:00 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 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 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. 
The Director of the Division of Economic Analysis or the Executive 
Director may submit to the Commission for its consideration any matter 
which has been delegated in this paragraph. Nothing in this paragraph 
prohibits the Commission, at its election, from exercising the 
authority delegated in this paragraph.
    (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 format and coding structure used by contract 
markets.

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

    11. 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.

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


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

    (a) Special Accounts--Reportable futures and options positions, 
delivery notices and exchanges of futures for cash. 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 options 
position separately for each contract market, expiration 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. The specific record format is shown in the table 
below:

                                                  Record Layout                                                 
----------------------------------------------------------------------------------------------------------------
             Beginning column               Length        Type \1\                         Name                 
----------------------------------------------------------------------------------------------------------------
1........................................        2  AN                    Report Type.                          
3........................................        3  AN                    Reporting Firm.                       

[[Page 24033]]

                                                                                                                
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.                             
80.......................................        1  AN                    Record Type.                          
----------------------------------------------------------------------------------------------------------------
\1\ AN--Alpha--numeric, N--Numeric, S--Signed numeric.                                                          

    (2) 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 options 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 exchanges of 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 zero 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 NYMEX
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) Valid values for this field 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 options contract.
    (viii) Expiration Date (1). The date format is YYYYMMDD and 
represents the expiration date or delivery date of the reported futures 
or options 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 options 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 
options 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 used 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 end of a trading day. 
When report 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.
    (xiv) Record Type (1). Record type is used to correct errors or 
delete records that have previously been submitted. Valid values are 
``A'', ``C'', ``D'' or ``blank''. An A or ``blank'' is used in this 
field for all new records. If the record corrects information for a 
previously provided record, this field must contain a ``C'' or 
``blank'' and the record must contain all information on the previously 
transmitted record. If the record deletes information on a previously 
provided record, this field must contain a ``D'' and all information on 
the previously transmitted record.
* * * * *
    12. Section 17.02 is 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 or 
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.
* * * * *
    13. Section 17.03 is revised to read as follows:

[[Page 24034]]

Sec. 17.03  Delegation of authority to the Director of the Division of 
Economic Analysis and to the Executive Director.

    The Commission hereby delegates, until the Commission orders 
otherwise, the authority set forth in paragraphs (a) and (b) of this 
section to the Director of the Division of Economic Analysis and the 
authority set forth in paragraph (c) of this section to the Executive 
Director to be exercised by such Director or by such other employee or 
employees of such Director as designated from time to time by the 
Director. The Director of the Division of Economic Analysis or the 
Executive Director may submit to the Commission for its consideration 
any matter which has been delegated in this paragraph. Nothing in this 
paragraph prohibits the Commission, at its election, from exercising 
the authority delegated in this paragraph.
    (a) Pursuant to Secs. 17.00 (a) and (h), the authority to determine 
whether futures commission merchants, clearing members and foreign 
brokers can report the information required under Rule 17.00(a) and 
Rule 17.00(h) on series '01 forms or updated Commission supplied 
computer printouts upon a determination by the Director that such 
person technologically is unable to provide such information on 
compatible data processing media.
    (b) Pursuant to Sec. 17.02, the authority to instruct and/or to 
approve the time and Commission office at which the information 
required under Rules 17.00 and 17.01 must be submitted by futures 
commission merchants, clearing members and foreign brokers provided 
that such persons are unable to meet the requirements set forth in 
Sec. 17.01; and
    (c) Pursuant to Sec. 17.00(a), the authority to approve a format 
and coding structure other than that set forth in Sec. 17.00(g).
    14. Section 17.04 is 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 options 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 options 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 options transactions, 
shall total the open long put 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.
* * * * *
    Issued in Washington, DC., April 25, 1997, by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 97-11396 Filed 5-1-97; 8:45 am]
BILLING CODE 6351-01-M