April 19, 2010
Washington, DC – The U.S. Commodity Futures Trading Commission will meet on Tuesday, April 27, 2010, to consider whether contracts offered for trading on the IntercontinentalExchange, Inc. (ICE), the Natural Gas Exchange, Inc. (NGX) or the Chicago Climate Exchange, Inc. (CCX) perform significant price discovery functions.
The 2008 Farm Bill requires the CFTC to regulate certain derivatives traded on exempt commercial markets (ECMs) if those derivatives perform a significant price discovery function.
Following issuance of an order determining that a contract traded on an ECM performs a significant price discovery function, the ECM must, with respect to that contract, come into compliance with core principles mandated by Section 2(h)(7) of the Act and with other statutory provisions applicable to registered entities. These provisions would subject the ECM’s contract or contracts and market participants to the Commission’s position limit and emergency authorities and large trader reporting requirements, among others.
Commission Rule 36.3(c)(3) became effective on April 22, 2009, and establishes the procedures under which the Commission will make and issue its determination whether a specific transaction, contract or agreement traded on an ECM serves a significant price discovery function. Those procedures specify that the Commission will publish notice in the Federal Register that it intends to undertake a determination whether a particular contract serves a significant price discovery function and to receive written data, views and arguments relevant to its determination from the ECM and other interested persons. After prompt consideration of all relevant information, the Commission will issue an order announcing and explaining its determination.
The Commission has so far determined that the ICE Henry Financial LD1 Fixed Price Contract traded on the ICE – the largest volume natural gas swap contract traded on an ECM – serves a significant price discovery function.
The meeting will be open to the public and will be webcast via the Internet. In addition, audio of the meeting will be available via a listen-only conference call.
Meeting to Consider Significant Price Discovery Contract Determinations
CFTC Hearing Room, 1155 21st Street, NW, Washington, DC
Tuesday, April 27, 2010
Watch a live broadcast of the meeting via webcast on www.cftc.gov.
Call in to a toll-free telephone line to connect to a live audio feed.
Call-in participants should be prepared to provide their first name, last name and affiliation. Conference call information is listed below:
Domestic/Canada Toll-Free: (866) 312-4390
International Toll: (404) 537-3379
Call leader name: CFTC
R. David Gary
Last Updated: April 27, 2010