FR Doc 2010-20428[Federal Register: August 18, 2010 (Volume 75, Number 159)]
[Proposed Rules]               
[Page 50950]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[[Page 50950]]



17 CFR Parts 1, 20, and 151

RIN 3038-AC85

Federal Speculative Position Limits for Referenced Energy 
Contracts and Associated Regulations

AGENCY: Commodity Futures Trading Commission.

ACTION: Proposed rules; withdrawal.


SUMMARY: On January 26, 2010, the Commodity Futures Trading Commission 
(``CFTC'' or ``Commission'') proposed to implement position limits for 
futures and option contracts based on a limited set of exempt 
commodities,\1\ namely certain energy commodities (``Federal 
Speculative Position Limits for Referenced Energy Contracts and 
Associated Regulations,'' for ease of reference, herein referred to as 
the ``Energy Proposal'').\2\ In accord with the significant amendments 
introduced to the Commodity Exchange Act of 1936 (``Act'' or ``CEA'') 
by the recent enactment of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (``Dodd-Frank Act''),\3\ the Commission is 
withdrawing its Energy Proposal as it plans to issue a notice of 
rulemaking proposing position limits for regulated exempt commodity 
contracts, including energy commodity contracts, as directed by the 

    \1\ Section 1a(14) of the Commodity Exchange Act, 7 U.S.C. 
1a(14). An exempt commodity is defined as a commodity that is 
neither an excluded commodity, as that term is defined by CEA 
Section 1a(13), nor an agricultural commodity. Generally the 
definition encompasses energy commodities and metals.
    \2\ 75 FR 4133 (January 26, 2010).
    \3\ Public Law 111-203.

FOR FURTHER INFORMATION CONTACT: Bruce Fekrat, Special Counsel, Office 
of the Director, Division of Market Oversight, Commodity Futures 
Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., 
Washington, DC 20581, telephone (202) 418-5578, facsimile number (202) 
418-5527, e-mail [email protected].

SUPPLEMENTARY INFORMATION: On January 26, 2010, the Commission issued 
the Energy Proposal to establish CFTC-set position limits for four 
enumerated contracts--the New York Mercantile (``NYMEX'') Henry Hub 
natural gas contract, the NYMEX Light Sweet crude oil contract, the 
NYMEX New York Harbor No. 2 heating oil contract, and the NYMEX New 
York Harbor gasoline blendstock (RBOB) contract--as well as for, with 
limited exceptions, any other contract that was exclusively or 
partially based on the above referenced contracts' commodities and 
delivery points. The Energy Proposal included, inter alia, provisions 
relating to exemptions for bona fide hedging transactions and certain 
swap dealer positions maintained to manage the risk of an unbalanced 
swaps book.
    At that time, section 4a(a) of the Act authorized the Commission to 
establish position limits for contracts traded on or subject to the 
rules of a designated contract market or significant price discovery 
contracts traded on exempt commercial markets. The purpose of such 
limits, as stated in prior section 4a(a), was to eliminate or prevent 
excessive speculation causing sudden or unreasonable fluctuations or 
unwarranted changes in the price of a commodity. Section 4a(a) of the 
CEA, as amended by the Dodd-Frank Act, directs the Commission to set 
position limits for all regulated exempt and agricultural commodity 
derivatives. More specifically, amended section 4a(a)(2)(B) of the Act 
requires the Commission to establish limits for exempt and agricultural 
commodity derivatives within 180 and 270 days, respectively, of the 
Dodd-Frank Act's enactment date. In addition, amended section 4a(a) of 
the Act explicitly requires the implementation of aggregate position 
limits across certain derivatives positions established on designated 
contract markets, swap execution facilities, or foreign boards of 
trade, or through bilateral trading. Thus, the CFTC intends to publish 
a notice of rulemaking proposing Commission-set position limits and 
exemptions therefrom for such derivatives pursuant to section 4a(a) and 
other related provisions of the CEA, as amended by the Dodd-Frank Act. 
In doing so, the Commission intends to take account of the Energy 
Proposal and build on the substantive issues raised by the commenters 
    In light of the broadened scope and new requirements of the CEA, as 
amended by the Dodd-Frank Act, and amended section 4a(a) of the Act in 
particular, the Commission has determined to withdraw the pending 
Energy Proposal as it plans to issue a notice of rulemaking proposing 
position limits and exemptions therefrom for regulated exempt commodity 
derivatives, including energy derivatives, as directed by the Dodd-
Frank Act.

    Issued by the Commission this August 12, 2010, in Washington, 
David Stawick,
Secretary of the Commission.
[FR Doc. 2010-20428 Filed 8-17-10; 8:45 am]