[Federal Register Volume 80, Number 2 (Monday, January 5, 2015)]
[Proposed Rules]
[Pages 200-201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-30831]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 80, No. 2 / Monday, January 5, 2015 / 
Proposed Rules  

[[Page 200]]



COMMODITY FUTURES TRADING COMMISSION

17 CFR Parts 1, 15, 17, 19, 32, 37, 38, 140, and 150

RIN 3038-AD99; 3038-AD82


Position Limits for Derivatives and Aggregation of Positions

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed rulemaking; reopening of comment periods.

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SUMMARY: On December 12, 2013, the Commodity Futures Trading Commission 
(``Commission'') published in the Federal Register a notice of proposed 
rulemaking (the ``Position Limits Proposal'') to establish speculative 
position limits for 28 exempt and agricultural commodity futures and 
options contracts and the physical commodity swaps that are 
economically equivalent to such contracts. On November 15, 2013, the 
Commission published in the Federal Register a notice of proposed 
rulemaking (the ``Aggregation Proposal'') to amend existing regulations 
setting out the Commission's policy for aggregation under its position 
limits regime. On December 9, 2014, the Commission's Agricultural 
Advisory Committee held a public meeting that considered, among other 
matters, deliverable supply and exemptions for bona fide hedging 
positions. In conjunction with the meeting of the Commission's 
Agricultural Advisory Committee, the Commission posted questions and 
presentation materials on the Commission's Web site; additionally, 
access to a video webcast of the meeting has been added to the Web 
site. To provide commenters with a sufficient period of time to respond 
to questions raised and points made at the Agricultural Advisory 
Committee meeting, the Commission reopened the comment periods for an 
additional 45 days, from December 9, 2014 to January 22, 2015. The 
Commission is providing notice and clarification that, in addition to 
commenting on the agenda issues noted in the December 4, 2014, Federal 
Register release providing notice of the re-opened comment period, 
comments may be made on the issues addressed at the meeting or in the 
associated materials posted to the Commission's Web site, as they 
pertain to agricultural commodities.

DATES: The comment periods for the Aggregation Proposal published 
November 15, 2013, at 78 FR 68946, and for the Position Limits Proposal 
published December 12, 2013, at 78 FR 75680, reopened on December 9, 
2014, and will close on January 22, 2015.

ADDRESSES: You may submit comments, identified by RIN 3038-AD99 for the 
Position Limits Proposal or RIN 3038-AD82 for the Aggregation Proposal, 
by any of the following methods:
     Agency Web site: http://comments.cftc.gov;
     Mail: Christopher Kirkpatrick, Secretary of the 
Commission, Commodity Futures Trading Commission, Three Lafayette 
Centre, 1155 21st Street NW., Washington, DC 20581;
     Hand Delivery/Courier: Same as Mail, above; or
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow instructions for submitting comments.
    Please submit your comments using only one method. All comments 
must be submitted in English, or if not, accompanied by an English 
translation. Comments will be posted as received to http://www.cftc.gov. You should submit only information that you wish to make 
available publicly. If you wish the Commission to consider information 
that may be exempt from disclosure under the Freedom of Information 
Act, a petition for confidential treatment of the exempt information 
may be submitted under Sec.  145.9 of the Commission's regulations (17 
CFR 145.9).
    The Commission reserves the right, but shall have no obligation, to 
review, pre-screen, filter, redact, refuse or remove any or all of your 
submission from http://www.cftc.gov that it may deem to be 
inappropriate for publication, such as obscene language. All 
submissions that have been redacted or removed that contain comments on 
the merits of the rulemaking will be retained in the public comment 
file and will be considered as required under the Administrative 
Procedure Act and other applicable laws, and may be accessible under 
the Freedom of Information Act.

FOR FURTHER INFORMATION CONTACT: Stephen Sherrod, Senior Economist, 
Division of Market Oversight, (202) 418-5452, [email protected]; or 
Riva Spear Adriance, Senior Special Counsel, Division of Market 
Oversight, (202) 418-5494, [email protected]; Commodity Futures 
Trading Commission, Three Lafayette Centre, 1155 21st Street NW., 
Washington, DC 20581.

SUPPLEMENTARY INFORMATION:

I. Background

    The Commission has long established and enforced speculative 
position limits for futures and options contracts on various 
agricultural commodities as authorized by the Commodity Exchange Act 
(``CEA'').\1\ The part 150 position limits regime \2\ generally 
includes three components: (1) The level of the limits, which set a 
threshold that restricts the number of speculative positions that a 
person may hold in the spot-month, individual month, and all months 
combined,\3\ (2) exemptions for positions that constitute bona fide 
hedging transactions and certain other types of transactions,\4\ and 
(3) rules to determine which accounts and positions a person must 
aggregate for the purpose of determining compliance with the position 
limit levels.\5\ The Position Limits Proposal generally sets out 
proposed changes to the first and second components of the position 
limits regime and would establish speculative position limits for 28 
exempt and agricultural commodity futures and option contracts, and 
physical commodity swaps that are ``economically equivalent'' to such 
contracts (as such term is used in CEA section 4a(a)(5)).\6\ The 
Aggregation Proposal generally sets out proposed changes to the third 
component of the position limits regime.\7\
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    \1\ 7 U.S.C. 1 et seq.
    \2\ See 17 CFR part 150. Part 150 of the Commission's 
regulations establishes federal position limits on futures and 
option contracts in nine enumerated agricultural commodities.
    \3\ See 17 CFR 150.2.
    \4\ See 17 CFR 150.3.
    \5\ See 17 CFR 150.4.
    \6\ See Position Limits for Derivatives, 78 FR 75680 (Dec. 12, 
2013).
    \7\ See Aggregation of Positions, 78 FR 68946 (Nov. 15, 2013).

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[[Page 201]]

    The Commission published the Position Limits Proposal and the 
Aggregation Proposal separately because it believes that the proposed 
amendments regarding aggregation of positions could be appropriate 
regardless of whether the Position Limits Proposal is finalized.\8\ If 
the Aggregation Proposal is finalized first, the modifications would 
apply to the current position limits regime for futures and option 
contracts on nine enumerated agricultural commodities. If the Position 
Limits Proposal is subsequently finalized, the modifications in the 
Aggregation Proposal would apply to the position limits regime for 28 
exempt and agricultural commodity futures and options contracts and the 
physical commodity swaps that are economically equivalent to such 
contracts.
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    \8\ See id. at 68947.
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    In order to provide interested parties with an opportunity to 
comment on the Aggregation Proposal during the comment period on the 
Position Limits Proposal, the Commission extended the comment period 
for the Aggregation Proposal to February 10, 2014, the same end date as 
the comment period for the Position Limits Proposal.\9\
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    \9\ See 79 FR 2394 (Jan. 14, 2014).
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    Subsequent to publication of the Position Limits Proposal and the 
Aggregation Proposal, the Commission directed staff to schedule a June 
19, 2014, public roundtable to consider certain issues regarding 
position limits for physical commodity derivatives. The roundtable 
focused on hedges of a physical commodity by a commercial enterprise, 
including gross hedging, cross-commodity hedging, anticipatory hedging, 
and the process for obtaining a non-enumerated exemption. Discussion 
included the setting of spot month limits in physical-delivery and 
cash-settled contracts and a conditional spot-month limit exemption. 
Further, the roundtable included discussion of: The aggregation 
exemption for certain ownership interests of greater than 50 percent in 
an owned entity; and aggregation based on substantially identical 
trading strategies. As well, the Commission invited comment on whether 
to provide parity for wheat contracts in non-spot month limits. In 
conjunction with the roundtable, staff questions regarding these topics 
were posted on the Commission's Web site.
    To provide commenters with a sufficient period of time to respond 
to questions raised and points made at the roundtable, the Commission 
published a document in the Federal Register on May 29, 2014, reopening 
the comment periods for the Position Limit Proposal and the Aggregation 
Proposal for three weeks, from June 12, 2014 to July 3, 2014. The 
Commission published notice in the Federal Register on July 3, 2014, 
further extending the comment periods to August 4, 2014.
    Comment letters received on the Position Limits Proposal are 
available at http://comments.cftc.gov/PublicComments/CommentList.aspx?id=1436. Comment letters received on the Aggregation 
Proposal are available at http://comments.cftc.gov/PublicComments/CommentList.aspx?id=1427.

II. Reopening of Comment Period

    The Commission's Agricultural Advisory Committee met on December 9, 
2014. The agenda adopted for the meeting included consideration, among 
other matters, of two issues associated with the Position Limits 
rulemaking: Deliverable supply and exemptions for bona fide hedging 
positions. In conjunction with the meeting of the Commission's 
Agricultural Advisory Committee, the Commission posted questions and 
presentation materials on the Commission's Web site; additionally, 
access to a video webcast of the meeting has been added to the Web 
site.\10\ To provide interested persons with a sufficient period of 
time to respond to questions raised and points made at the Agricultural 
Advisory Committee meeting, the Commission reopened both the Position 
Limit Proposal and the Aggregation Proposal for an additional 45-day 
comment period.\11\ The Commission is providing notice and 
clarification that, in addition to commenting on the agenda issues 
noted in the December 4, 2014, Federal Register release providing 
notice of the reopened comment period, comments may be made on the 
issues addressed at the meeting or in associated materials posted to 
the Commission's Web site, as they pertain to agricultural commodities, 
including hedges of a physical commodity by a commercial enterprise; 
and the process for estimating deliverable supplies used in the setting 
of spot month limits, as each pertains to agricultural commodities.
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    \10\ Questions, presentation materials, and a video webcast have 
been made available at http://www.cftc.gov/PressRoom/Events/opaevent_aac120914.
    \11\ See 79 FR 71973 (Dec. 4, 2014).
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    Both comment periods reopened on December 9, 2014, and will close 
on January 22, 2015.

    Issued in Washington, DC, on December 30, 2014, by the 
Commission.
Christopher J. Kirkpatrick,
Secretary of the Commission.

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

Appendix to Position Limits for Derivatives and Aggregation of 
Positions Reopening of Comment Periods--Commission Voting Summary

    On this matter, Chairman Massad and Commissioners Wetjen, Bowen, 
and Giancarlo voted in the affirmative. No Commissioner voted in the 
negative.

[FR Doc. 2014-30831 Filed 1-2-15; 8:45 am]
BILLING CODE 6351-01-P