[Federal Register: October 12, 2000 (Volume 65, Number 198)]
[Notices]
[Page 60619-60621]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12oc00-37]
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COMMODITY FUTURES TRADING COMMISSION
Chicago Board of Trade: Proposed Amendments to the Chicago Board
of Trade Corn and Soybeans Futures Contracts, Increasing the Maximum
Daily Premium Charge, Decreasing the Maximum Number of Shipping
Certificates Issuable, and Modifying Certain Loading Requirements
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice of availability of proposed amendments to contract terms
and conditions.
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SUMMARY: The Chicago Board of Trade (CBOT or Exchange) has submitted
proposed amendments to its corn and soybeans futures contracts which
would increase the maximum daily premium charge, decrease the maximum
number of shipping certificates issuable, and modify certain loading
requirements. The CBT's proposals are described in detail below. The
proposed amendments were submitted under the
[[Page 60620]]
Commission's 45-day Fast Track procedures which provide that, absent
any contrary action by the Commission, the proposed amendments may be
deemed approved on November 20--45 days after the Commission's receipt
of the proposals. 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 November 13, 2000.
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 secretary@cftc.gov. Reference
should be made to the proposed amendments to the CBOT's maximum
permissible premium charge, maximum number of shipping certificates
issuable, and certain loading requirements.
FOR FURTHER INFORMATION CONTACT: Please 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:
mmurray@cftc.gov
SUPPLEMENTARY INFORMATION: The CBT's proposed amendments are summarized
in the table below.
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Item Current terms Proposed terms
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1. Increase the daily premium 12/100 cent/bu/day 15/100 cent/bu/day
charge on outstanding shipping at Chicago, 10/ at all locations
certificates. 100 cent/bu/day on all
at all other outstanding
locations. shipping
certificates,
effective
November 1, 2001.
2. Decrease the maximum number Maximum Maximum
of shipping certificates certificates certificates
operators of delivery issuable limited issuable limited
facilities are allowed to issue. to the storage to the storage
capacity of capacity in
delivery Chicago, and 20
facilities in times the
Chicago, and 30 delivery
times the facility's
delivery registered daily
facility's rate of loading
registered daily at facilities on
rate of loading the Illinois
at facilities on Waterway and St.
the Illinois Louis.
Waterway and St.
Louis.
3. Rescind the cessation of Premium charges Premium charges
premium charges while stop 10 days stop after load-
transportation is after out is completed.
constructively placed. transportation is
constructively
placed, or load-
out is completed,
whichever is
earlier.
4. Include the stevedoring costs Certificate owner Certificate issuer
in barge load-out charge. pays for pays for
stevedoring costs stevedoring costs
for barge load- for barge load-
out. out.
5. Extend the responsibility of Certificate owner Certificate owner
the certificate owner to must reimburse must reimburse
reimburse the certificate certificate certificate
issuer's expense for making issuer if owner issuer if owner
grain available at the delivery fails to place fails to place
location. barge within 10 barge within 10
days of scheduled days of scheduled
loading date. loading date or
cancels loading
orders and
requires shipping
certificates to
be reissued.
6. Eliminate the requirement Delivery Delivery
that shipping certificates be facilities on the facilities on the
delivered in multiples of Illinois Waterway Illinois Waterway
55,000 bushels. must make initial must make initial
deliveries in deliveries in
multiples of multiples of
55,000 bushels. 5,000 bushels.
7. Improve merchantability of (No current provision.) In the event
shipping certificates at less than eleven shipping
shipping stations with less certificates are outstanding at a
than eleven outstanding at a delivery facility, the owner of all
delivery facility, the owner of such outstanding shipping
all such outstanding shipping certificates may cancel the shipping
certificates. certificates and obligate the
certificate issuer to provide a
market value at which the issuer will
either buy back all the canceled
shipping certificates or sell the
balance needed to complete a barge
loading of at least 55,000 bushels,
taker's preference.
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The Exchange intends to make the proposed amendments effective on
November 1, 2001, for all existing and newly listed contract months
beginning with the November 2001 contract month. The proposed changes
will apply to all shipping certificates that are outstanding on the
effective date. Shipping certificates issued prior to November 1, 2001
or shipping certificates that are returned to the shipper, or his
agent, for reissuance prior to November 1, 2000 may indicate two
premium charges, one for the period through October 31, 2001 and other
commencing on November 1, 2001.
In support of the proposed amendments, the Exchange provides the
following justification:
Increase in the maximum premium charge. The CBT indicates
that the proposed charge better reflects commercial charges in the
delivery territory during periods of high crop surplus, such as
currently exist. Thus, the CBT believes that the proposal will improve
convergence between cash and futures prices.
Reduction in the maximum number of shipping certificates
issuable to 20 times the daily rate of load-out. The CBT believes that
the proposal will provide more timely load-out to receivers by reducing
the potential delivery lineup to 20 business days from 30. The Exchange
further notes that ``only about 20 percent of the [current] maximum
number of shipping certificates have been registered at one time.''
Consequently, it believes that this proposal would not reduce
substantively ``the effective deliverable supply.''
Receiver must pay premium charges through completion of
loading, rather than through the earlier of ten business days following
constructive placement of barges or completion of loading. The CBT
indicates that the proposal ``would compensate the maker for securing
grain in preparation for load-out.'' The Exchange also notes that the
receiver is protected from unnecessary delays in loading (and
consequent increased premium charges) by the contracts' existing
preferential treatment of shipping certificate holders over all other
receivers, as well as the proposed reduction in the potential delivery
line-up to 20 days, as indicated above.
Stevedoring fees for loading grain into barges are to be
paid by the certificate issuer. The CBT indicates that this reflects
customary cash market practice, and ``will standardize the load-out
charges at all shipping stations for barges.''
Clarification that receiver must compensate deliverer for
costs incurred when loading orders are canceled. The CBT notes that the
proposal merely
[[Page 60621]]
``clarifies that the taker must reimburse the maker for expenses for
making the grain available for load-out when loading and shipping
instructions are canceled prior to load-out.''
Permit delivery in minimum increments of 5,000 bushels,
rather than 55,000 bushels. The CBT states that, ``If the taker can
issue shipping certificates in any multiple of 5,000 bushels and not be
restricted to making initial deliveries in multiples of 55,000 bushels,
the delivery process will be simplified and made more flexible.''
Furthermore, the ``concern that less than barge load quantities would
be left outstanding is minimized'' by the proposed requirement that a
shipper with fewer than a barge-load quantity of certificates
outstanding must quote a market rate for buying back the certificates
or selling a sufficient quantity of certificates to make up a barge
load.
New requirement that shippers provide a market quote for
buying or selling shipping certificates should the number of shipping
certificates at the shipping station fall below eleven certificates
(55,000 bushels or one barge load). The CBT states that the proposal
``increases merchandising opportunities of outstanding shipping
certificates for the taker.'' The CBT also notes that, ``if the shipper
does not wish to be obligated to buy back shipping certificates or
provide the balance for loadout, he may decide to maintain at least
eleven shipping certificates outstanding at a shipping station.''
The Commission is requesting comments on the proposed amendments.
In particular, the Commission requests that commenters address the
extent to which the proposals reflect commercial practices, and their
potential impact on deliverable supplies for the corn and soybeans
futures contracts.
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 secretary@cftc.gov.
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 (1987)), 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 October 6, 2000.
Richard Shilts,
Acting Director.
[FR Doc. 00-26221 Filed 10-11-00; 8:45 am]
BILLING CODE 6351-01-M
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