2010-20428

FR Doc 2010-20428[Federal Register: August 18, 2010 (Volume 75, Number 159)]

[Proposed Rules]

[Page 50950]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr18au10-37]

[[Page 50950]]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Parts 1, 20, and 151

RIN 3038-AC85

Federal Speculative Position Limits for Referenced Energy

Contracts and Associated Regulations

AGENCY: Commodity Futures Trading Commission.

ACTION: Proposed rules; withdrawal.

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SUMMARY: On January 26, 2010, the Commodity Futures Trading Commission

(``CFTC'' or ``Commission'') proposed to implement position limits for

futures and option contracts based on a limited set of exempt

commodities,\1\ namely certain energy commodities (``Federal

Speculative Position Limits for Referenced Energy Contracts and

Associated Regulations,'' for ease of reference, herein referred to as

the ``Energy Proposal'').\2\ In accord with the significant amendments

introduced to the Commodity Exchange Act of 1936 (``Act'' or ``CEA'')

by the recent enactment of the Dodd-Frank Wall Street Reform and

Consumer Protection Act (``Dodd-Frank Act''),\3\ the Commission is

withdrawing its Energy Proposal as it plans to issue a notice of

rulemaking proposing position limits for regulated exempt commodity

contracts, including energy commodity contracts, as directed by the

Act.

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\1\ Section 1a(14) of the Commodity Exchange Act, 7 U.S.C.

1a(14). An exempt commodity is defined as a commodity that is

neither an excluded commodity, as that term is defined by CEA

Section 1a(13), nor an agricultural commodity. Generally the

definition encompasses energy commodities and metals.

\2\ 75 FR 4133 (January 26, 2010).

\3\ Public Law 111-203.

FOR FURTHER INFORMATION CONTACT: Bruce Fekrat, Special Counsel, Office

of the Director, Division of Market Oversight, Commodity Futures

Trading Commission, Three Lafayette Centre, 1155 21st Street, NW.,

Washington, DC 20581, telephone (202) 418-5578, facsimile number (202)

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418-5527, e-mail bfekrat@cftc.gov.

SUPPLEMENTARY INFORMATION: On January 26, 2010, the Commission issued

the Energy Proposal to establish CFTC-set position limits for four

enumerated contracts--the New York Mercantile (``NYMEX'') Henry Hub

natural gas contract, the NYMEX Light Sweet crude oil contract, the

NYMEX New York Harbor No. 2 heating oil contract, and the NYMEX New

York Harbor gasoline blendstock (RBOB) contract--as well as for, with

limited exceptions, any other contract that was exclusively or

partially based on the above referenced contracts' commodities and

delivery points. The Energy Proposal included, inter alia, provisions

relating to exemptions for bona fide hedging transactions and certain

swap dealer positions maintained to manage the risk of an unbalanced

swaps book.

At that time, section 4a(a) of the Act authorized the Commission to

establish position limits for contracts traded on or subject to the

rules of a designated contract market or significant price discovery

contracts traded on exempt commercial markets. The purpose of such

limits, as stated in prior section 4a(a), was to eliminate or prevent

excessive speculation causing sudden or unreasonable fluctuations or

unwarranted changes in the price of a commodity. Section 4a(a) of the

CEA, as amended by the Dodd-Frank Act, directs the Commission to set

position limits for all regulated exempt and agricultural commodity

derivatives. More specifically, amended section 4a(a)(2)(B) of the Act

requires the Commission to establish limits for exempt and agricultural

commodity derivatives within 180 and 270 days, respectively, of the

Dodd-Frank Act's enactment date. In addition, amended section 4a(a) of

the Act explicitly requires the implementation of aggregate position

limits across certain derivatives positions established on designated

contract markets, swap execution facilities, or foreign boards of

trade, or through bilateral trading. Thus, the CFTC intends to publish

a notice of rulemaking proposing Commission-set position limits and

exemptions therefrom for such derivatives pursuant to section 4a(a) and

other related provisions of the CEA, as amended by the Dodd-Frank Act.

In doing so, the Commission intends to take account of the Energy

Proposal and build on the substantive issues raised by the commenters

thereon.

In light of the broadened scope and new requirements of the CEA, as

amended by the Dodd-Frank Act, and amended section 4a(a) of the Act in

particular, the Commission has determined to withdraw the pending

Energy Proposal as it plans to issue a notice of rulemaking proposing

position limits and exemptions therefrom for regulated exempt commodity

derivatives, including energy derivatives, as directed by the Dodd-

Frank Act.

Issued by the Commission this August 12, 2010, in Washington,

DC.

David Stawick,

Secretary of the Commission.

[FR Doc. 2010-20428 Filed 8-17-10; 8:45 am]

BILLING CODE 6351-01-P

Last Updated: August 18, 2010