[Federal Register Volume 66, Number 54 (Tuesday, March 20, 2001)]
[Notices]
[Pages 15699-15700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-6868]


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COMMODITY FUTURES TRADING COMMISSION


New York Cotton Exchange (NYCE): Proposed Amendments to the NYCE 
Cotton No. 2 Futures Contract

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of availability of proposed amendments to contract terms 
and conditions.

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SUMMARY: The New York Cotton Exchange (NYCE or Exchange) has submitted 
the proposed amendments to the cotton No. 2 futures contract for 
approval under Section 5c(c)(2) of the Commodity Exchange Act. The 
proposed amendments will: (1) Provide for price differentials for 
cotton having micronaire levels of 4.8 and 4.9; (2) increase to 25 
grams per tex the minimum strength requirement for deliverable cotton; 
(3) establish price differentials for ``old crop'' cotton, and (4) 
clarify the definition of a warehouse bale tag coupon. The Acting 
Director of the Division of Economic Analysis (Division) of the 
Commission, acting pursuant to the authority delegated by Commission 
Regulation 140.96, has determined that publication of the proposed 
amendments is in the public interest and will assist the Commission in 
considering the views of interested persons.

DATES: Comments must be received on or before April 19, 2001.

ADDRESSES: Interested persons should submit their views and comments to 
Jean A. Webb, Secretary, Commodity Futures Trading Commission, Three 
Lafayette Centre, 21st Street, NW., Washington, DC 20581. In addition, 
comments may be sent by facsimile transmission to facsimile number 
(202) 418-5521, or by electronic mail to [email protected]. Reference 
should be made to the proposed amendments to the NYCE's cotton No. 2 
futures contract concerning micronaire, strength, and ``old crop'' 
cotton.

FOR FURTHER INFORMATION CONTACT: Martin Murray of the Division of 
Economic Analysis, Commodity Futures Trading Commission, Three 
Lafayette Centre, 21st Street NW., Washington, DC 20581, telephone 
(202) 418-5276. Facsimile number: (202) 418-5527. Electronic mail: 
[email protected].

SUPPLEMENTARY INFORMATION: The NYCE cotton No. 2 futures contract calls 
for the delivery of 40,000 pounds of upland cotton that meets certain 
quality specifications, including standards relating to micronaire and 
strength. The contract also specifies a schedule of discounts for 
cotton that is delivered more than three months after the cotton was 
certificated as eligible for delivery. These discounts increase at 
specified rates with each additional month in excess of three months 
that the cotton remains certificated. Deliverable cotton must also be 
stored in an Exchange-licensed warehouse.
    Currently, deliverable cotton must have a micronaire reading 
between 3.5 and 4.9, and all micronaire levels are deliverable at par. 
Under the proposed amendments, the micronaire range of cotton 
deliverable at par will be changed to between 3.5 and 4.7. Cotton that 
has a micronaire reading in the

[[Page 15700]]

range of 4.8 to 4.9 will be deliverable at a price differential equal 
to the average of the rice differences quoted on the sixth business day 
prior to the day of delivery by the United States Department of 
Agriculture (USDA) for such cotton in designated spot markets. If the 
USDA does not quote price differences for this range of micronaire 
readings, the futures price differential for cotton having the 
indicated micronaire levels will be zero. In support of this proposal, 
the Exchange states that, ``the purpose of the change is to improve the 
contract by discounting less desirable, high micronaire cotton in 
delivery.''
    The Exchange is proposing to amend the current strength requirement 
for deliverable cotton of 22 grams per tex. Under the proposal, the 
minimum strength requirement will be raised to 25 grams per tex. 
According to the Exchange, ``the purpose of the change is to improve 
the contract by eliminating certain low-strength cotton from 
delivery.''
    The Exchange also is seeking to establish a discount for the 
delivery of ``old crop'' cotton. The proposed discount would be in 
addition to the futures contract's existing age-based discounts. Under 
the proposal, ``old crop'' cotton delivered on or after January 1 of 
the next marketing season that follows the marketing season in which 
the cotton was grown will be assessed a discount of 2 cents per pound 
per ``old crop'' crop year. For example, cotton grown in the 2000 crop 
year will be deliverable at par until December 31, 2001. If such ``old 
crop'' cotton is delivered on January 1, 2002, it would be subject to a 
discount of 2 cents per pound and, if it was delivered on January 1, 
2003, this same cotton would be subject to a discount of 4 cents per 
pound. The discount for delivery of the same cotton would increase by 
two cents per pound for each subsequent year (i.e., six cents per lb. 
in 2004, eight cents per lb. in 2005, etc.) elapsed since the marketing 
season in which the cotton was grown. The Exchange states that the 
proposal will ``improve the contract by adding to the cost of 
delivering older cotton.''
    Finally, the Exchange is clarifying its requirement that the 
Warehouse Bale Tag Coupon accompanying each sample of tendered cotton 
shall be ``an official Warehouse Bale Tag Coupon issued by the 
warehouse'' (emphasis added).
    The Exchange intends to implement the proposed amendments upon 
Commission approval for all existing cotton No. 2 futures contract 
months that have no open interest at the time of approval and for all 
newly listed cotton No. 2 futures contracts.
    The Commission is requesting comments on the proposed amendments.
    Copies of the proposed amendments will be available for inspection 
at the Office of the Secretariat, Commodity Futures Trading Commission, 
Three Lafayette Centre, 21st Street NW., Washington, DC 20581. Copies 
of the proposed amendments can be obtained through the Office of the 
Secretariat by mail at the above address, by phone at (202) 418-5100, 
or via the Internet at [email protected].
    Other materials submitted by the Exchange in support of the 
proposal may be available upon request pursuant to the Freedom of 
Information Act (5 U.S.C. 552) and the Commission's regulations 
thereunder (17 CFR part 145 (2000)), except to the extent they are 
entitled to confidential treatment as set forth in 17 CFR 145.5 and 
145.9. Requests for copies of such materials should be made to the FOI, 
Privacy and Sunshine Act Compliance Staff of the Office of Secretariat 
at the Commission's headquarters in accordance with 17 CFR 145.7 and 
145.8.
    Any person interested in submitting written data, views, or 
arguments on the proposed amendments, or with respect to other 
materials submitted by the Exchange, should send such comments to Jean 
A. Webb, Secretary, Commodity Futures Trading Commission, Three 
Lafayette Centre, 21st Street NW., Washington, DC 20581 by the 
specified date.

    Issued in Washington, DC, on March 14, 2001.
Richard Shilts,
Acting Director.
[FR Doc. 01-6868 Filed 3-19-01; 8:45 am]
BILLING CODE 6351-01-M