For Release: November 30, 1999
CFTC REVAMPS AGRICULTURAL TRADE OPTION RULES
Washington, D.C.--The Commodity Futures Trading Commission announced today that it is amending its rules for agricultural trade options (ATOs) to make them simpler and more flexible for users by permitting cash settlement. Agricultural trade options are off-exchange options on specified domestic agricultural commodities offered to producers, processors or merchandisers in connection with their business. Under the prior rules, an agricultural trade option, if exercised, had to result in physical delivery of the underlying commodity. The revised cash settlement provisions will give producers greater flexibility. The Commission is also streamlining the registration requirements for agricultural trade option merchants and their sales agents. Finally, the Commission is simplifying required disclosure statements and reducing overall reporting and recordkeeping requirements.
The final ATO rules will be published shortly in the Federal Register and will become effective 60 days after their publication date. The Commission further announced that it will permit firms and individuals to register with the Commission in advance of the rules' effective date so that they may begin offering ATOs for sale as soon as the rules become effective. Information about registering as an agricultural trade option merchant can be obtained from the National Futures Association at (312) 781-1410.
A copy of the Commission's Notice of Final Rulemaking can be obtained by contacting the Commission's Office of Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5100. The Commission also intends to make its Notice of Final Rulemaking available in the near future on its website at www.cftc.gov.