[Federal Register: March 15, 2005 (Volume 70, Number 49)]
[Proposed Rules]
[Page 12621-12626]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15mr05-16]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 150

RIN 3038-AC24


Revision of Federal Speculative Position Limits

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commodity Futures Trading Commission (Commission)
periodically reviews its policies and rules pertaining to the
regulatory framework for speculative position limits, including the
speculative position limits set out in Commission regulation 150.2
(Federal speculative position limits). In this regard, the Commission
has reviewed the existing levels for Federal speculative position
limits and is now proposing to increase these limits for all single-
month and all-months-combined positions. In addition, the Commission is
proposing to delete several obsolete provisions that relate to
contracts that are no longer listed for trading or to DCMs that no
longer exist. The Commission is requesting comment on these rule
amendments.

DATES: Comments must be received on or before April 14, 2005.

ADDRESSES: Comments should be submitted to Jean A. Webb, Secretary,
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st
Street, NW., Washington, DC 20581. Comments also may be sent by
facsimile to (202) 418-5521, or by electronic mail to 
secretary@cftc.gov. Reference should be made to ``Proposed Revision of

Federal Speculative Position Limits.'' Comments may also be submitted
by connecting to the Federal eRulemaking Portal at  href="http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov" shape="rect">http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov
 and following comment submission instructions.


FOR FURTHER INFORMATION CONTACT: Clarence Sanders, Attorney, Division
of Market Oversight, Commodity Futures Trading Commission, Three
Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581,
telephone (202) 418-5068, facsimile number (202) 418-5507, electronic
mail csanders@cftc.gov; or Martin Murray, Economist, Division of Market
Oversight, telephone (202) 418-5276, facsimile number (202) 418-5507,
electronic mail mmurray@cftc.gov.

SUPPLEMENTARY INFORMATION:

I. Background

A. Introduction

    The Commission has long established and enforced speculative
position limits for futures contracts on various agricultural
commodities. The Commission periodically reviews its policies and rules
pertaining to the regulatory framework for speculative position limits,
including the Federal speculative position limits set out in Commission
regulation 150.2.\1\ Also, during March, April, and May, 2004, the
Chicago Board of Trade (CBT), the Kansas City Board of Trade (KCBT),
and the Minneapolis Grain Exchange (MGE) submitted separate petitions
to the Commission seeking repeal or amendment of Commission regulation
150.2. In addition, the New York Board of Trade (NYBOT), while not
submitting a formal petition of its own, submitted a letter in
agreement with the action sought by the petitions.
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    \1\ Regulation 150.2 imposes three types of position limits for
each specified contract: A spot month limit, a single-month limit,
and an all-months-combined limit. The Commission most recently
adopted amendments to levels for Federal speculative limits in 1999
(see 64 FR 24038, May 5, 1999).
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    The Commission published the petitions submitted by the designated
contract markets (DCMs) in the Federal Register for comment on June 17,
2004, and received eight comments in response. Based upon the petitions
and the comments received, the Commission has reexamined the particular
levels set for Federal speculative position limits. In this regard, the
Commission has reviewed the existing levels for Federal speculative
position limits and is now proposing to increase these limits for all
single-month and all-months-combined positions. In particular, the
Commission is proposing to increase levels for single-month and all-
months-combined positions for CBT Corn, Oats, Soybeans, Wheat, Soybean
Oil, and Soybean Meal;

[[Page 12622]]

MGE Hard Red Spring Wheat; KCBT Hard Winter Wheat, and NYBOT Cotton No.
2. In addition, the spot month limits for all of these commodities
would remain unchanged. Finally, the Commission is proposing to delete
several obsolete provisions in part 150 that relate to contracts that
are no longer listed for trading or to DCMs that no longer exist.\2\
The Commission is requesting comment on these rule amendments.
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    \2\ Commission regulation 150.2 currently includes Federal
speculative position limits for agricultural commodities traded on
the MidAmerica Commodity Exchange (MidAm) and for the white wheat
futures contract traded on MGE. These provisions relating to the
MidAm and the MGE white wheat futures contract are obsolete and are
proposed for repeal as part of this action. In addition, reference
to the New York Cotton Exchange is being changed to NYBOT to reflect
a change in corporate organization.
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B. Regulatory Framework

    Speculative position limits have been a tool for the regulation of
the U.S. futures markets since the adoption of the Commodity Exchange
Act of 1936. Section 4a(a) of the Commodity Exchange Act (Act), 7
U.S.C. 6a(a), states that:

    Excessive speculation in any commodity under contracts of sale
of such commodity for future delivery made on or subject to the
rules of contract markets or derivatives transaction execution
facilities causing sudden or unreasonable fluctuations or
unwarranted changes in the price of such commodity, is an undue and
unnecessary burden on interstate commerce in such commodity.

    Accordingly, section 4a(a) provides the Commission with the
authority to:

    Fix such limits on the amounts of trading which may be done or
positions which may be held by any person under contracts of sale of
such commodity for future delivery on or subject to the rules of any
contract market or derivatives transaction execution facility as the
Commission finds are necessary to diminish, eliminate, or prevent
such burden.

    This longstanding statutory framework providing for Federal
speculative position limits was supplemented with the passage of the
Futures Trading Act of 1982, which acknowledged the role of exchanges
in setting their own speculative position limits. The 1982 legislation
also provided, under section 4a(e) of the Act, that limits set by
exchanges and approved by the Commission were subject to Commission
enforcement.
    Finally, the Commodity Futures Modernization Act of 2000 (CFMA)
established designation criteria and core principles with which a DCM
must comply to receive and maintain designation. Among these, Core
Principle 5 in section 5(d) of the Act states:

    Position Limitations or Accountability--To reduce the potential
threat of market manipulation or congestion, especially during
trading in the delivery month, the board of trade shall adopt
position limitations or position accountability for speculators,
where necessary and appropriate.

    As outlined above, the regulatory structure is administered under a
two-pronged framework. Under the first prong, the Commission
establishes and enforces speculative position limits for futures
contracts on a limited group of agricultural commodities. These Federal
limits are enumerated in Commission regulation 150.2, and apply to the
following futures and option markets: CBT corn, oats, soybeans, wheat,
soybean oil, and soybean meal; MGE hard red spring wheat and white
wheat; NYBOT cotton No. 2; and KCBT hard winter wheat. Under the second
prong, individual DCMs establish and enforce their own speculative
position limits or position accountability provisions, subject to
Commission oversight and separate authority to enforce exchange-set
speculative position limits approved by the Commission. Thus,
responsibility for enforcement of speculative position limits is shared
by the Commission and the DCMs.\3\
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    \3\ Provisions regarding the establishment of exchange-set
speculative position limits were originally set forth in CFTC
regulation 1.61. In 1999, the Commission simplified and reorganized
its rules by relocating the substance of regulation 1.61's
requirements to part 150 of the Commission's rules, thereby
incorporating within part 150 provisions for both Federal
speculative position limits and exchange-set speculative position
limits (see 64 FR 24038, May 5, 1999). Section 4a(e) provides that a
violation of a speculative position limit set by a Commission-
approved exchange rule is also a violation of the Act. Thus, the
Commission can enforce directly violations of exchange-set
speculative position limits as well as those provided under
Commission rules.
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C. Petitions for Rulemaking

    The Commission has received three petitions for rulemaking and a
NYBOT letter in support thereof.\4\ The first of these was submitted by
the CBT in letters dated March 26, 2004, and April 27, 2004, the second
by the KCBT in a letter dated April 27, 2004, and the third by the MGE
in a letter dated May 20, 2004. NYBOT, while not submitting a formal
petition of its own, submitted a May 27, 2004, letter stating that it
fully supports the CBT petition.
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    \4\ Commission regulation 13.2 states in pertinent part that
``any person may file a petition with the Secretariat of the
Commission for the issuance, amendment, or repeal of a rule of
general application.''
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    The CBT petition requests that the Commission repeal regulation
150.2 and thereby eliminate the Federal speculative position limits for
all commodity markets enumerated under that rule. The KCBT petition
requests that the Commission repeal that part of regulation 150.2
pertaining to Federal speculative position limits for the KCBT hard
winter wheat contract. The MGE petition also seeks repeal of regulation
150.2 as it relates to Federal speculative limits for the MGE contract
in hard red spring wheat.\5\
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    \5\ The Commission notes that if regulation 150.2 were to be
repealed in its entirety, DCMs would be required to have speculative
position limit or position accountability provisions consistent with
section 5(d)(5) of the Act and part 38 of the Commission's
regulations.
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    Alternatively, should the Commission determine to retain regulation
150.2, all of the petitioners request that the Commission either (1)
retain Federal speculative limits only for the spot or delivery month
while eliminating Federal speculative limits for single-month and all-
months-combined positions, or (2) in lieu of eliminating non-spot-month
Federal speculative limits, increase most of the single-month and all-
months-combined limits currently found in Commission regulation 150.2.
Thus, although the petitions present a range of regulatory
alternatives, one essential element embedded in the petitions involves
an increase in speculative position limits for non-spot single months
and/or in all-months-combined.
    The petitions acknowledge that the Commission may determine to
retain these limits. As noted, under that alternative, the DCMs seek an
increase in most of the existing single-month and all-months-combined
position limits. In particular, the CBT requests that the Commission
amend that regulation to increase the single-month and all-months-
combined speculative position limits for the corn, soybeans, wheat,
soybean oil, and soybean meal contracts traded at the CBT to the
maximum levels that would be permitted if the Commission were to apply
the open interest formula found in Commission regulation 150.5 to set
all-months combined levels, and to adjust the single month limits to
reflect the existing ratio of single month to all-months-combined
levels.\6\
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    \6\ The CBT has also separately submitted for Commission
approval proposed amendments to the CBT's own speculative position
limit rules for corn, soybeans, wheat, soybean oil, and soybean
meal. The CBT's request has been stayed until such time as the
Commission may act to amend the Federal speculative position limits.
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    Using open interest data for calendar year 2003 (the most recent
year at the time the petitions were submitted), the CBT proposed the
following:

[[Page 12623]]



----------------------------------------------------------------------------------------------------------------
                                                               Single month limit  (by    All months limit  (by
                                                                     contracts)                 contract)
                        CBT contract                         ---------------------------------------------------
                                                                Current      Proposed     Current      Proposed
----------------------------------------------------------------------------------------------------------------
Corn........................................................        5,500       10,000        9,000       17,000
Soybeans....................................................        3,500        6,500        5,500       10,000
Wheat.......................................................        3,000        4,500        4,000        5,500
Soybean Oil.................................................        3,000        4,500        4,000        6,500
Soybean Meal................................................        3,000        4,500        4,000        6,000
----------------------------------------------------------------------------------------------------------------

    The CBT cites several justifications in support of the approach it
took in proposing these levels. Among these, the CBT notes that it
conducted a survey of the agricultural trading community and found that
a majority of respondents supported an increase in single-month and/or
all-months-combined limits. Additionally, the CBT notes that most
respondents supporting an increase in limits also sought to retain the
same approximate ratio of single-month to all-months-combined limits.
The CBT asserts that the proposed higher levels conform to this
standard and preserve the same approximate ratio as sought by survey
respondents.
    The CBT also comments that the proposed increases to the all-months
combined levels noted above are consistent with the percentage of open
interest formula (using data for calendar year 2003) included in
regulation 150.5, which the Commission has applied in the past when it
initiated action to increase CBT agricultural commodity limits to their
present levels (57 FR 12766, April 13, 1992, and 64 FR 24038, May 5,
1999), and which continues to serve as an acceptable practice for the
establishment of Exchange-set speculative position limits. In
particular, regulation 150.5 stipulates that all-months-combined limit
levels for tangible commodities should be set at levels no greater than
10% of the average combined futures and delta-adjusted option month-end
open interest for the most recent calendar year up to 25,000 contracts
with a marginal increase of 2.5% thereafter.
    The CBT further notes that its proposed single-month speculative
position limits were set to retain the same approximate ratio of
single-month to all-months-combined limits as requested by respondents
to its above-mentioned survey, and that the proposed limits would not
be extraordinarily large relative to total open positions in the
contracts, the breadth and liquidity of the cash market underlying each
delivery month, and the opportunity for arbitrage between the futures
market and the cash market.
    The KCBT and MGE both request that the Commission continue to
maintain ``parity'' in speculative position limit levels across wheat
exchanges. The KCBT notes that growth in trading volume has been strong
in recent years, and attributes this growth to the maintenance of
parity in speculative limits among exchanges. The KCBT further observes
that the increased growth in volume since 1999 has attracted commodity
fund business to the KCBT wheat market, and maintains that failure to
retain parity in speculative limits could cause a loss in fund business
to other markets with higher limits. In addition, the KCBT remarks that
significant trading volume is generated from arbitrage opportunities
that exist between markets, and that differing limits between exchanges
could affect the growth potential for inter-market spread volume.
Finally, the KCBT comments that reportable commercial traders continue
to hold the majority of open interest in KCBT wheat futures, and that
increasing speculative limits would permit an increase in speculative
activity and in turn increase liquidity to the benefit of commercial
users.
    The MGE notes that Federal speculative limits were most recently
increased during 1999, and concludes that this increase was intended to
recognize the greater activity in wheat futures trading. The MGE states
that it has not observed any increased susceptibility to manipulation
or price distortion in the hard red spring wheat contract during the
period following the increase in Federal speculative limits. Rather,
the MGE remarks that the increase in Federal speculative limits appears
to have added liquidity and stability to the marketplace. The MGE notes
that speculative limits historically have been uniform at the three
domestic DCMs trading wheat contracts and that failure to maintain this
equality would be unfairly discriminatory, not only to the MGE, but
also to its market participants. In this regard, the MGE observes that
many traders at the MGE, and in particular the commodity funds, utilize
arbitrage opportunities among the wheat markets, and that any disparate
treatment in speculative limits could drive away participants and
reduce market liquidity.
    As noted, NYBOT did not submit a petition of its own, but instead
submitted a letter supporting the CBT petition. The NYBOT letter also
suggests an alternative in the event that the Commission determines not
to repeal regulation 150.2. Specifically, the NYBOT comment letter
includes a request that the all-months-combined limit for Cotton No. 2
be increased from 3,500 contracts to 4,000 contracts.\7\ The NYBOT
letter supports this request on the basis of growth in open interest in
the Cotton No. 2 futures contract, based on the open interest test
specified in regulation 150.5 and using data for calendar year 2003.
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    \7\ Currently, the NYBOT does not have its own speculative
position limit provisions for cotton No. 2 but has submitted
proposed amendments that would establish such limits. NYBOT's
request has been stayed until such time as the Commission may act to
amend the Federal speculative position limits.
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D. Response to Petitions

    As previously noted, the Commission published the DCMs' request in
the Federal Register on June 17, 2004 (see 69 FR 33874, June 17, 2004).
Along with the petitions, the Commission posed six questions, including
a request for comment on general issues raised by the DCMs' petitions,
such as whether any Federal speculative limits should be retained. In
addition, the Commission requested comment on specific issues relating
to the current composition of Part 150 of the Commission's regulations,
including whether the speculative limit levels found in Commission
regulation 150.2 should be increased. The comment period closed on
August 16, 2004, and eight comment letters were received in response to
the Federal Register notice. Comments were received from an
agricultural producer, a grain company, a DCM, a CTA, and several
commercial associations, including one comment letter signed jointly by
six separate agricultural associations.
    Of the eight comment letters received, three generally opposed the
petitions and five generally supported the

[[Page 12624]]

petitions. There were some differences among those both favoring and
opposing the petitions. For example, one commenter, although in nominal
support of the petitions, conditioned that support with a
recommendation that the Commission review for prior approval any DCM-
proposed changes in speculative position limits for agricultural
commodities.
    The comment letter signed by the six agricultural associations
discussed at length the DCMs' petitions and the questions posed by the
Commission. In particular the associations indicated support for ``the
concept of expanded speculative limits'' but at the same time opposed
the DCMs' request that the Commission repeal regulation 150.2. With
respect to the DCMs' request that the single- and all-months-combined
position limits be increased, the associations responded that the new
levels proposed by the CBT should be reviewed according to existing
Commission criteria for each of the indicated contract markets. The
associations acknowledged that such a review may support increased
speculative position limits for some of the contracts. The associations
also supported the request of the KCBT and MGE that position limit
parity be retained among the wheat contracts traded on each of the
petitioning DCMs.

II. Commission Speculative Position Limit Levels

    The Commission is proposing several revisions to the speculative
position limit levels found in regulation 150.2 based upon its
experience in administering these limits and after carefully
considering the DCM petitions and the comments received in response to
the petitions for rulemaking. Under the proposed revisions, spot month
limits would remain unchanged from the current levels, but every
single-month and all-months-combined position limit would be increased.
In general, the proposed levels for all-months-combined were
established considering the open interest formula noted above and based
on data for the most recent calendar year, i.e., 2004, as well as other
pertinent considerations as explained below. With respect to the
individual month limits, a strict application of the open interest
formula contained in regulation 150.5 would have resulted in somewhat
lower individual month limits for some commodities and higher limits
for others than those proposed below. However, the Commission believes
there is merit in the argument that maintaining the existing ratios
between single-month and all-months-combined speculative position limit
levels is of benefit to the marketplace, and thus the Commission is
proposing to establish individual-month limits that are consistent with
that approach.
    In addition, with respect to the MGE and KCBT wheat contracts, the
Commission proposes to maintain parity with the levels proposed for CBT
wheat rather than establish different limits based on the open interest
formula for each contract. The Commission first adopted this parity
approach in an action to revise position limits in 1993 (see 58 FR
17973, April 7, 1993). At that time the Commission concluded that the
breadth and liquidity of the cash markets underlying the KCBT and MGE
wheat contracts justified setting these limits at parity with little
risk of regulatory harm from such action. 58 FR at 17979. The
Commission continues to believe that the breadth and liquidity of
underlying cash markets, as well as continued growth in open interest,
for the KCBT and MGE wheat contracts support maintenance of these
speculative position limit levels at parity with one another.
    The Commission is also clarifying in regulation 150.2 its practice
of aggregating traders' positions for purposes of ascertaining
compliance with Federal speculative position limits when a DCM lists
for trading two or more contracts with substantially identical terms
based on the same underlying commodity characteristics. In particular,
the aggregation requirement applies to the CBT's corn and mini-sized
corn, soybeans and mini-sized soybeans, and wheat and mini-sized wheat
futures and option contracts.
    Based on the criteria noted above, the Commission is proposing the
following changes to the Federal speculative position limits.

                                           Speculative Position Limits
                                                  [By contract]
----------------------------------------------------------------------------------------------------------------
                                                  Spot month        Single month               All months
                    Contract                    ----------------------------------------------------------------
                                                  No change     Current      Proposed     Current      Proposed
----------------------------------------------------------------------------------------------------------------
             Chicago Board of Trade

Corn & Mini-Corn...............................          600        5,500       13,500        9,000       22,000
Oats...........................................          600        1,000        1,400        1,500        2,000
Soybeans & Mini-Soybeans.......................          600        3,500        6,500        5,500       10,000
Wheat & Mini-Wheat.............................          600        3,000        5,000        4,000        6,500
Soybean Oil....................................          540        3,000        5,000        4,000        6,500
Soybean Meal...................................          720        3,000        5,000        4,000        6,500

           Minneapolis Grain Exchange

Hard Red Spring Wheat..........................          600        3,000        5,000        4,000        6,500

            New York Board of Trade

Cotton No. 2...................................          300        2,500        3,500        3,500        5,000

           Kansas City Board of Trade

Hard Winter Wheat..............................          600        3,000        5,000        4,000        6,500
----------------------------------------------------------------------------------------------------------------

    As noted above, the Commission has at this time determined to
retain Federal speculative position limits at the increased levels
proposed herein, notwithstanding that the DCM petitions sought their
elimination and replacement with DCM-administered speculative position
limit provisions. The Commission, however, intends to continue its
review of its current policies regarding the administration of
speculative position limits, including a further evaluation of the
merits of retaining Federal speculative limits. At the same time, the
Commission notes

[[Page 12625]]

that Exchanges may determine to establish, pursuant to sections 4a(e)
and 5c(c) of the Act, their own speculative position limits at levels
less than the Federal levels.\8\
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    \8\ Pursuant to subsection 5c(c)(2)(B) prior Commission approval
is required before a DCM implements a rule that materially changes
the terms and conditions, as determined by the Commission, in any
contract of sale for future delivery of a commodity specifically
enumerated in section 1a(4) of the Act (or any option thereon)
traded through its facilities if the rule amendment applies to
contracts and delivery months which have already been listed for
trading and have open interest.
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    At this time, the Commission does not intend to expand the scope of
regulation 150.2 by including futures contracts that are not already
enumerated therein, except, as noted above, in the limited case when
such contracts would share substantially identical terms with an
existing enumerated contract on the same DCM.\9\ In this regard,
Federal speculative position limits would not apply to the CBT's South
American soybean contract or the MGE's cash-settled hard red spring
wheat futures contract because these contracts have substantially
different commodity characteristics than related contracts currently
enumerated under regulation 150.2. Rather, in cases where a new
contract's terms and conditions deviate from those of the enumerated
contract list, the Commission will rely upon the DCMs to establish
speculative position limit or position accountability provisions for
such contracts consistent with the requirements of section 5(d)(5) of
the Act and part 38 of the Commission's regulations.\10\
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    \9\ The Commission also notes that should a DCM list a contract
that shared substantially identical terms with a Regulation 150.2-
enumerated contract listed on another DCM, the Commission could
consider at that time whether to amend regulation 150.2 to likewise
apply Federal limits to the newly-listed contract.
    \10\ For example, the CBT and the MGE have established Exchange-
set speculative position limits for the South American soybean and
the cash-settled national hard red spring wheat index futures
contracts, respectively.
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    Finally, the Commission notes that existing regulation 150.2 also
provides for speculative limits for agricultural commodities traded on
the MidAm and for the white wheat futures contract traded on MGE. These
provisions relating to the MidAm and the MGE white wheat futures
contract are obsolete and are proposed for repeal as part of this
action. In addition, the reference to the New York Cotton Exchange is
being changed to NYBOT to reflect a change in corporate organization.

III. Related Matters

A. Cost Benefit Analysis

    Section 15(a) of the Act requires the Commission to consider the
costs and benefits of its action before issuing a new regulation under
the Act. By its terms, section 15(a) does not require the Commission to
quantify the costs and benefits of a new regulation or to determine
whether the benefits of the proposed regulation outweigh its costs.
Rather, section 15(a) requires the Commission to ``consider the costs
and benefits'' of the subject rule.
    Section 15(a) further specifies that the costs and benefits of the
proposed rule shall be evaluated in light of five broad areas of market
and public concern: (1) Protection of market participants and the
public; (2) efficiency, competitiveness, and financial integrity of
futures markets; (3) price discovery; (4) sound risk management
practices; and (5) other public interest considerations. The Commission
may, in its discretion, give greater weight to any one of the five
enumerated areas of concern and may, in its discretion, determine that,
notwithstanding its costs, a particular rule is necessary or
appropriate to protect the public interest or to effectuate any of the
provisions or to accomplish any of the purposes of the Act.
    The proposed rules impose limited additional costs in terms of
reporting requirements, particularly since entities trading in or
holding large positions, who either approach or meet the speculative
limits of the rules herein, already file large trader reports with the
Commission. Moreover, the amendments proposed herein would increase
Federal speculative limits for some commodities and, to that extent,
reduce the compliance costs associated with these speculative position
limits. The countervailing benefits to these costs are that the
continued inclusion of appropriate speculative limits will help to
ensure the maintenance of competitive and efficient markets, protect
the price discovery and risk shifting functions, and protect market
participants and the public interest.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq.,
requires federal agencies, in proposing rules, to consider the impact
of those rules on small businesses. The Commission believes that the
proposed rule amendments to raise Commission speculative position
limits would only impact large traders. The Commission has previously
determined that large traders are not small entities for purposes of
the RFA.\11\ Therefore, the Acting Chairman, on behalf of the
Commission, hereby certifies, pursuant to 5 U.S.C. 605(b), that the
action taken herein will not have a significant economic impact on a
substantial number of small entities. The Commission also notes in this
regard that the proposed rules will raise speculative limit levels and
thereby reduce the regulatory burden on all affected entities.
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    \11\ 47 FR 18618 (April 30, 1982).
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C. Paperwork Reduction Act

    When publishing proposed rules, the Paperwork Reduction Act of 1995
(44 U.S.C. 3507(d)) imposes certain requirements on federal agencies
(including the Commission) in connection with their conducting or
sponsoring any collection of information as defined by the Paperwork
Reduction Act. In compliance with the Act, the Commission, through this
rule proposal, solicits comment to: (1) Evaluate whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including the validity of the methodology
and assumptions used; (2) evaluate the accuracy of the agency's
estimate of the burden of the proposed collection of information
including the validity of the methodology and assumptions used; (3)
enhance the quality, utility and clarity of the information to be
collected; and (4) minimize the burden of the collection of the
information on those who are to respond through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology, e.g., permitting
electronic submission of responses.
    The Commission has submitted the proposed rule and its associated
information collection requirements to the Office of Management and
Budget. The proposed rule is part of two approved information
collections. The burdens associated with these rules are as follows:

------------------------------------------------------------------------
                                            Collection No.  [3038-0009]
------------------------------------------------------------------------
Average burden hours per response.......  .3
Number of respondents...................  2946
Frequency of response...................  On occasion
-----------------------------------------
                                          Collection No.
                                          [3038-0013]
-----------------------------------------
Average burden hours per response.......  3

[[Page 12626]]


Number of respondents...................  9
Frequency of response...................  On occasion
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List of Subjects in 17 CFR Part 150

    Agricultural commodities, Bona fide hedge positions, Commodity
futures, Cotton, Grains, Position limits, Spread exemptions.
    In consideration of the foregoing, pursuant to the authority
contained in the Commodity Exchange Act, the Commission hereby proposes
to amend part 150 of chapter I of title 17 of the Code of Federal
Regulations as follows:

PART 150--LIMITS ON POSITIONS

    1. The authority citation for part 150 is revised to read as
follows:

    Authority: 7 U.S.C. 6a, 6c, and 12a(5), as amended by the
Commodity Futures Modernization Act of 2000, Appendix E of Pub. L.
106-554, 114 Stat. 2763 (2000).

    2. Section 150.2 is revised to read as follows:


Sec.  150.2  Position limits.

    No person may hold or control positions, separately or in
combination, net long or net short, for the purchase or sale of a
commodity for future delivery or, on a futures-equivalent basis,
options thereon, in excess of the following:

                                           Speculative Position Limits
                                               [In contract units]
----------------------------------------------------------------------------------------------------------------
                            Contract                                Spot month     Single month     All months
----------------------------------------------------------------------------------------------------------------
                     Chicago Board of Trade

Corn and Mini Corn 1............................................             600          13,500          22,000
Oats............................................................             600           1,400           2,000
Soybeans and Mini Soybeans 1....................................             600           6,500          10,000
Wheat and Mini Wheat 1..........................................             600           5,000           6,500
Soybean Oil.....................................................             540           5,000           6,500
Soybean Meal....................................................             720           5,000           6,500

                   Minneapolis Grain Exchange

Hard Red Spring Wheat...........................................             600           5,000           6,500

                     New York Board of Trade

Cotton No. 2....................................................             300           3,500           5,000

                   Kansas City Board of Trade

Hard Winter Wheat...............................................             600           5,000          6,500
----------------------------------------------------------------------------------------------------------------
\1\ For purposes of compliance with these limits, positions in the regular sized and mini-sized contracts shall
  be aggregated.


    Issued by the Commission this 7th day of March, 2005, in
Washington, DC.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 05-5088 Filed 3-14-05; 8:45 am]

BILLING CODE 6351-01-P