[Federal Register: March 20, 2001 (Volume 66, Number 54)]
[Notices]
[Page 15699-15700]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20mr01-39]

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COMMODITY FUTURES TRADING COMMISSION


New York Cotton Exchange (NYCE): Proposed Amendments to the NYCE
Cotton No. 2 Futures Contract

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of availability of proposed amendments to contract terms
and conditions.

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SUMMARY: The New York Cotton Exchange (NYCE or Exchange) has submitted
the proposed amendments to the cotton No. 2 futures contract for
approval under Section 5c(c)(2) of the Commodity Exchange Act. The
proposed amendments will: (1) Provide for price differentials for
cotton having micronaire levels of 4.8 and 4.9; (2) increase to 25
grams per tex the minimum strength requirement for deliverable cotton;
(3) establish price differentials for ``old crop'' cotton, and (4)
clarify the definition of a warehouse bale tag coupon. 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 April 19, 2001.

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 NYCE's cotton No. 2
futures contract concerning micronaire, strength, and ``old crop''
cotton.

FOR FURTHER INFORMATION 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 NYCE cotton No. 2 futures contract calls
for the delivery of 40,000 pounds of upland cotton that meets certain
quality specifications, including standards relating to micronaire and
strength. The contract also specifies a schedule of discounts for
cotton that is delivered more than three months after the cotton was
certificated as eligible for delivery. These discounts increase at
specified rates with each additional month in excess of three months
that the cotton remains certificated. Deliverable cotton must also be
stored in an Exchange-licensed warehouse.
    Currently, deliverable cotton must have a micronaire reading
between 3.5 and 4.9, and all micronaire levels are deliverable at par.
Under the proposed amendments, the micronaire range of cotton
deliverable at par will be changed to between 3.5 and 4.7. Cotton that
has a micronaire reading in the

[[Page 15700]]

range of 4.8 to 4.9 will be deliverable at a price differential equal
to the average of the rice differences quoted on the sixth business day
prior to the day of delivery by the United States Department of
Agriculture (USDA) for such cotton in designated spot markets. If the
USDA does not quote price differences for this range of micronaire
readings, the futures price differential for cotton having the
indicated micronaire levels will be zero. In support of this proposal,
the Exchange states that, ``the purpose of the change is to improve the
contract by discounting less desirable, high micronaire cotton in
delivery.''
    The Exchange is proposing to amend the current strength requirement
for deliverable cotton of 22 grams per tex. Under the proposal, the
minimum strength requirement will be raised to 25 grams per tex.
According to the Exchange, ``the purpose of the change is to improve
the contract by eliminating certain low-strength cotton from
delivery.''
    The Exchange also is seeking to establish a discount for the
delivery of ``old crop'' cotton. The proposed discount would be in
addition to the futures contract's existing age-based discounts. Under
the proposal, ``old crop'' cotton delivered on or after January 1 of
the next marketing season that follows the marketing season in which
the cotton was grown will be assessed a discount of 2 cents per pound
per ``old crop'' crop year. For example, cotton grown in the 2000 crop
year will be deliverable at par until December 31, 2001. If such ``old
crop'' cotton is delivered on January 1, 2002, it would be subject to a
discount of 2 cents per pound and, if it was delivered on January 1,
2003, this same cotton would be subject to a discount of 4 cents per
pound. The discount for delivery of the same cotton would increase by
two cents per pound for each subsequent year (i.e., six cents per lb.
in 2004, eight cents per lb. in 2005, etc.) elapsed since the marketing
season in which the cotton was grown. The Exchange states that the
proposal will ``improve the contract by adding to the cost of
delivering older cotton.''
    Finally, the Exchange is clarifying its requirement that the
Warehouse Bale Tag Coupon accompanying each sample of tendered cotton
shall be ``an official Warehouse Bale Tag Coupon issued by the
warehouse'' (emphasis added).
    The Exchange intends to implement the proposed amendments upon
Commission approval for all existing cotton No. 2 futures contract
months that have no open interest at the time of approval and for all
newly listed cotton No. 2 futures contracts.
    The Commission is requesting comments on the proposed amendments.
    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 (2000)), 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 March 14, 2001.
Richard Shilts,
Acting Director.
[FR Doc. 01-6868 Filed 3-19-01; 8:45 am]
BILLING CODE 6351-01-M