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Listing Procedures

  • Economic Requirements Interpretative Statement

    Appendix C to Part 38 (formerly Guideline No. 1), 17 CFR Part 38 Appendix C, provides guidance on the type of information a designated contract market (DCM) should provide, if requested, to demonstrate its compliance with Core Principle 3 on an initial and continuing basis.

    Physical Delivery Futures

      1. The rules setting forth the terms and conditions of the futures contract.

      2. A description of the cash market for the commodity on which the contract is based.

      a. The description may include, in addition to or in lieu of materials prepared by the board of trade, existing studies by industry trade groups, academics, governmental bodies or other entities, reports of consultants, or other materials which provide a description of the underlying cash market.

      b. Where the same, or a closely related commodity, is already designated as a contract market which is not dormant, the cash market description can be confined to those aspects relevant to particular term(s) or conditions(s) which differ from such existing contract.

      3. A demonstration that the terms and conditions, as a whole, will result in a deliverable supply such that the contract will not be conducive to price manipulation or distortion and that the deliverable supply reasonably can be expected to be available to short traders and saleable by long traders at its market value in normal cash marketing channels.

    Cash Settled Futures

      1. . The rules setting forth the terms and conditions of the proposed futures contract.

      2. A description of the cash market for the commodity on which the contract is based.

      a. The description may include, in addition to or in lieu of materials prepared by the board of trade, existing studies by industry trade groups, academics, governmental bodies or other entities, reports of consultants, or other materials which provide a description of the underlying cash market.

      b. Where the same, or a closely related commodity, is already designated as a contract market which is not dormant, the cash market description can be confined to those aspects relevant to particular term(s) or conditions(s) which differ from such existing contract.

      3. A demonstration that cash settlement of the contract is at a price reflecting the underlying cash market, will not be subject to manipulation or distortion, and is based on a cash price series that is reliable, acceptable, publicly available, and timely.

    Options on Futures

      1. The rules setting forth the terms and conditions of the proposed futures contract.

      2. i) For options that are exercised into futures positions, the terms and conditions of the underlying futures contract.
      ii) For options that are exercised into physical commodity positions or are cash settled at expiration based on a specified index value:

      A. A description of the cash market for the commodity on which the contract is based.

      1. The description may include, in addition to or in lieu of material prepared by the DCM, existing studies by industry trade groups, academics, governmental bodies or other entities, promotional or marketing materials prepared by or for the DCM; reports of consultants; or other materials which provide a description of the underlying cash market.

      2. Where the same, or a closely related commodity, is already designated and is not dormant, the cash market description can be confined to those aspects relevant to particular terms(s) or condition(s) which differ from such existing contract.

    In addition, for each type of contract, the Commission has provided demonstration tables to serve as templates enumerating the significant contract terms and conditions typically contained in most contracts, as well as the Commission’s enunciated standards for assessing compliance with its regulations. That template may be modified as necessary to reflect the nature of the particular commodity, the economic characteristics of the commodity, or the contract's specific terms and conditions.