For Release:December 19, 1996
CFTC NOTIFIES CBT THAT THE DELIVERY TERMS OF ITS CORN
AND SOYBEAN FUTURES CONTRACTS DO NOT SATISFY THE
STATUTORY OBJECTIVES OF THE COMMODITY EXCHANGE ACT
Washington -- At its open meeting today, the Commodity Futures Trading Commission (Commission) voted unanimously to notify the Chicago Board of Trade (CBT) under section 5a(a)(10) of the Commodity Exchange Act (Act) that the delivery terms of the CBT corn and soybean futures contracts no longer accomplish the statutory objectives of "permit[ting] the delivery of any commodity...at such point or points and at such quality and locational price differentials as will tend to prevent or diminish price manipulation, market congestion, or the abnormal movement of such commodity in interstate commerce."
In notifying the CBT of its finding, the Commission also communicated that the exchange will be afforded the opportunity to submit for Commission consideration proposed amendments to the delivery terms of the corn and soybean futures contracts that will accomplish the statutory objectives by March 4, 1997, a period of seventy-five days from the date of this notification. If the CBT should fail to respond in a manner which in the Commission's judgment is necessary to accomplish the stated statutory objectives, the Commission is prepared to conduct further proceedings under section 5a(a)(10).
It should be noted that the action taken today by the Commission under section 5a(a)(10) of the Act does not apply to contracts of sale for future delivery in any months in which contracts are currently outstanding and open. The Commission stated in its notification that the CBT should refrain from listing additional months for trading in those contracts during the pendency of these proceedings.
Finally, because of the importance of today's action, the Commission voted to publish the text of the "CBT Notification" in the Federal Register in order to obtain comments from the public that may assist the Commission in discharging its responsibility to act in the public interest.
Meeting materials may be obtained by contacting the Office of the Secretariat, (202) 418-5100. For further information, please call the Office of Public Affairs, (202) 418-5080.