e8-12728

FR Doc E8-12728[Federal Register: June 6, 2008 (Volume 73, Number 110)]

[Proposed Rules]

[Page 32260-32261]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr06jn08-21]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 150

RIN 3038-AC140

Revision of Federal Speculative Position Limits

AGENCY: Commodity Futures Trading Commission.

ACTION: Proposed rules; withdrawal.

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SUMMARY: On November 21, 2007, the Commodity Futures Trading Commission

(Commission or CFTC) published a proposed rulemaking to increase the

Federal speculative position limits for certain agricultural commodity

contracts set out in Commission regulation 150.2 (proposed

rulemaking).\1\ The proposed rulemaking would have increased the

single-month and all-months-combined position limits for all contracts

except contracts based on oats in accordance with the formula set out

in Commission regulation 150.5(c). The proposed rulemaking would have

also required the aggregation of traders' positions in contracts that

share substantially identical terms with regulation 150.2-enumerated

contracts, regardless of whether such contracts were specifically

delineated in that regulation, for the purposes of ascertaining

compliance with the Federal speculative position limits. For the

reasons provided below, the Commission has determined to withdraw the

proposed rulemaking.

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\1\ Revision of Federal Speculative Position Limits, 72 FR 65483

(November 21, 2007).

FOR FURTHER INFORMATION CONTACT: Donald Heitman, Senior Special

Counsel, Division of Market Oversight, Commodity Futures Trading

Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington,

DC 20581, telephone (202) 418-5041, facsimile number (202) 418-5507, e-

mail [email protected]; or Martin Murray, Economist, Division of Market

Oversight, telephone (202) 418-5276,

[[Page 32261]]

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facsimile number (202) 418-5507, e-mail [email protected]

SUPPLEMENTARY INFORMATION: The Commission has long established and

enforced speculative position limits for futures contracts on various

agricultural commodities. The Commission periodically reviews these

Federal speculative position limits, which are set out in Commission

regulation 150.2.\2\ On November 21, 2007, the Commission published its

proposed rulemaking to increase Federal speculative position limits for

all single-month and all-months-combined positions in all commodity

markets enumerated in Commission regulation 150.2, except Chicago Board

of Trade (CBT) Oats, based on the formula set out in Commission

regulation 150.5(c). The rulemaking proposed to increase levels for

single-month and all-months-combined positions for CBT Corn, Soybeans,

Wheat, Soybean Oil, and Soybean Meal; Minneapolis Grain Exchange Hard

Red Spring Wheat; Kansas City Board of Trade Hard Winter Wheat; and New

York Board of Trade \3\ Cotton No. 2. In addition, the rulemaking

proposed to require the aggregation of positions in contracts that

share substantially identical terms with regulation 150.2-enumerated

contracts, regardless of whether such contracts were specifically

delineated in that regulation, for the purposes of ascertaining

traders' compliance with the Federal speculative position limits.

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\2\ Commission 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

position limits in 2005. See 70 FR 24705 (May 11, 2005).

\3\ The New York Board of Trade was acquired by ICE Futures U.S.

in January, 2007.

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The Commission requested public comment by December 21, 2007. On

December 31, 2007, the Commission extended the initial comment period

to January 21, 2008 to give interested parties additional opportunity

to comment.\4\ The Commission received a total of 40 comment letters in

response to its Federal Register publication.\5\ Six letters generally

favored the proposed regulations and 34 letters were generally opposed

to their adoption. An Agricultural Forum held by the Commission on

April 22, 2008 served as an additional venue for the presentation of

views with respect to the proposed rulemaking and a related Commission

proposal to adopt a risk management exemption from the Federal

speculative position limits.\6\

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\4\ 72 FR 74213 (December 31, 2007).

\5\ Federal Register Comment File 07-014, available at http://

www.cftc.gov/lawandregulation/federalregister/

federalregistercomments/2007/07-014.html.

\6\ Risk Management Exemption from Federal Speculative Position

Limits, 72 FR 66097 (November 27, 2007) (to be withdrawn).

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Collectively, the comments received in response to the proposed

rulemaking and at the Commission's April 22 Agricultural Forum

reflected differing perspectives on a wide range of issues of

substantive import to the proposed rulemaking. The issues covered by

the commenters, both in favor and opposed to the Commission's proposal

to revise the Federal speculative position limits, included product

margin requirements, the convergence of cash and futures transaction

prices, the impact of commodity-linked instruments traded on national

securities exchanges on CFTC regulated transactions, the degree of

transparency for market participation, and the quantification of the

impact of speculative trading on market volatility. In light of the

wide range of divergent positions that have been put forth by

interested parties, the current market conditions for the contracts

that would be affected by the proposed rulemaking, and in order to

determine whether further consensus among the affected parties should

be sought, the Commission has determined to withdraw the proposed

rulemaking pending further consideration of the relevant issues.

Issued by the Commission this June 2, 2008, in Washington, DC.

David Stawick,

Secretary of the Commission.

[FR Doc. E8-12728 Filed 6-5-08; 8:45 am]

BILLING CODE 6351-01-P

Last Updated: June 6, 2008