Release: #3994-97

For Release: February 27, 1997

CFTC Approves Final Rules for Fast-Track Approval Of New Contracts and Contract Amendments, and Approves the CS&CE's BFP (Milk) Futures and Options

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) at a public meeting today approved the following significant proposals:

-- Final rules for fast-track approval of new contracts and contract amendments. These rules provide for speedy review while preserving the opportunity for affected members of the public to participate in the Commission's consideration of new contracts and contract amendments. They also provide the Commission with the necessary flexibility to address complex or innovative contracts. These rules provide that many contracts will be approved in 10 days or less and others will be approved within 45 days (with a possible 30-day extension for complex or innovative contracts).

-- Final rules for fast-track consideration of other new exchange rules.

-- The Coffee Sugar and Cocoa Exchange's proposal to become a contract market in BFP (Basic Formula Price) milk futures contracts and for options on those futures contracts. This is the first cash settled futures contract for the dairy industry. In connection with its consideration of this proposed contract, the Commission also received a report from its Division of Economic Analysis on the National Cheese Exchange (NCE). This staff review was undertaken in light of the use of NCE prices by the United States Department of Agriculture in calculating the BFP. In this regard, the Division staff found that commercial access to, and participation on the NCE appears to be unimpeded, trading activity is transparent, and record-keeping by the NCE, its members, and the Department of Agriculture is sufficient for Commission oversight of trading in the proposed BFP contract.

CFTC Chairperson Brooksley Born stated,

"These rules provide the exchanges with a procedure by which their new products may be approved and listed in a streamlined, fast-track fashion. They reflect the Commission's dedication to reducing unnecessary regulatory burdens on exchanges and other regulated entities. However, the rules also preserve important public interests and fulfill the Commission's oversight responsibilities. When concerns are expressed by members of the public regarding the potential effects of new contracts, the Commission will continue to provide a neutral and expert forum for the consideration of those issues."

The documents referred to in this release are available on the Commission's home page,