Commodity Futures Trading Commission 2009 – Federal Register Recent Federal Regulation Documents

The Commodity Futures Trading Commission (``CFTC'' or ``Commission'') is undertaking a review to determine whether the Mid-C Financial Peak (``MDC'') contract; Mid-C Financial Peak Daily (``MPD'') contract; Mid-C Financial Off-Peak (``OMC'') contract; and Mid-C Financial Off-Peak Daily (``MXO'') contract, offered for trading on the IntercontinentalExchange, Inc. (``ICE''), an exempt commercial market (``ECM'') under Sections 2(h)(3)-(5) of the Commodity Exchange Act (``CEA'' or the ``Act''), perform significant price discovery functions. Authority for this action is found in section 2(h)(7) of the CEA and Commission rule 36.3(c) promulgated thereunder. In connection with this evaluation, the Commission invites comment from interested parties.

The Commodity Futures Trading Commission (``the Commission'') is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., Federal agencies are required to publish notice in the Federal Register concerning each proposed collection of information, and to allow 60 days for comment in response to the notice. This notice solicits comments on requirements relating to information collected to assist the Commission in soliciting and awarding contracts.

The Commission charges fees to designated contract markets and registered futures associations to recover the costs incurred by the Commission in the operation of its program of oversight of self- regulatory organization (SRO) rule enforcement programs (17 CFR part 1 Appendix B) (National Futures Association (NFA), a registered futures association, and the contract markets are referred to as SROs). The calculation of the fee amounts to be charged for FY 2009 is based upon an average of actual program costs incurred during FY 2006, 2007, and 2008, as explained below. The FY 2009 fee schedule is set forth in the SUPPLEMENTARY INFORMATION. Electronic payment of fees is required.

On June 17, 2009, the Department of the Treasury released a White Paper on Financial Regulatory Reform (``White Paper'') calling on the SEC and the CFTC to ``make recommendations to Congress for changes to statutes and regulations that would harmonize regulation of futures and securities.'' Specifically, the White Paper recommended ``that the CFTC and the SEC complete a report to Congress by September 30, 2009 that identifies all existing conflicts in statutes and regulations with respect to similar types of financial instruments and either explains why those differences are essential to achieve underlying policy objectives with respect to investor protection, market integrity, and price transparency or makes recommendations for changes to statutes and regulations that would eliminate the differences.''

The Commodity Futures Trading Commission (the ``Commission'') proposes amending its regulations (the ``Regulations'') to create a sixth and separate ``account class,'' applicable only to the bankruptcy of a commodity broker that is a futures commission merchant (``FCM''), for positions in cleared over-the-counter (``OTC'') derivatives (and money, securities, and/or other property margining, guaranteeing, and securing such positions). In general, the concept of ``account class'' governs the manner in which the trustee calculates the net equity (i.e., claims against the estate) and the allowed net equity (i.e., pro rata share of the estate) for each customer of a commodity broker in bankruptcy. The Commission further proposes amending the Regulations to codify the appropriate allocation, in a bankruptcy of any commodity broker, of positions in commodity contracts of one account class (and the money, securities, and/or other property margining, guaranteeing, or securing such positions) that are commingled with positions in commodity contracts of the futures account class (and the money, securities, and/or other property margining, guaranteeing, or securing such positions), pursuant to an order issued by the Commission.

The Commodity Futures Trading Commission (CFTC) is issuing an order, pursuant to Section 409(b)(3) of FDICIA, stating that the supervision provided by BaFin, in conjunction with the Bundesbank, with respect to the clearing activities of Eurex satisfies appropriate standards (the Order). The Order will permit Eurex to operate a multilateral clearing organization (MCO) in the United States for any over-the-counter (OTC) derivative instrument.

On June 12, 2009, the Commodity Futures Trading Commission (``CFTC'' or ``Commission'') published for comment in the Federal Register \1\ a notice of its intent to undertake a determination whether the Henry Financial LD1 Fixed Price contract, traded on the IntercontinentalExchange, Inc. (``ICE''), an exempt commercial market (``ECM'') under sections 2(h)(3)-(5) of the Commodity Exchange Act (``CEA'' or the ``Act''), performs a significant price discovery function pursuant to section 2(h)(7) of the CEA. The Commission undertook this review based upon an initial evaluation of information and data provided by ICE as well as a Commission report on ECMs. The Commission has reviewed public comments and the entire record in this matter and has determined to issue an order finding that the ICE Henry Financial LD1 Fixed Price contract performs a significant price discovery function. Authority for this action is found in section 2(h)(7) of the CEA and Commission rule 36.3(c) promulgated thereunder.

The Commission has determined to collect certain ownership, control, and related information for all trading accounts active on U.S. futures exchanges. The information collected will enhance market transparency, leverage the Commission's existing surveillance systems, and foster synergies between its market surveillance, trade practice, enforcement, and economic research programs. The Commission will collect relevant data via an account ``Ownership and Control Report'' (``OCR'') submitted periodically by all reporting entities.\1\ Tentatively, the OCR will include a trading account number; the names

In compliance with the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), this notice announces that the Information Collection Request (ICR) abstracted below has been forwarded to the Office of Management and Budget (OMB) for review and comment. The ICR describes the nature of the information collection and its expected costs and burden; it includes the actual data collection instruments [if any].

On March 24, 2009, the Commodity Futures Trading Commission (``Commission'') published a concept release on whether to eliminate the bona fide hedge exemption for certain swap dealers and create a new limited risk management exemption from speculative position limits. Comments on the proposal were originally due by May 26, 2009. Now, at the request of interested parties, the Commission is extending the comment period to June 16, 2009.

The Commodity Futures Trading Commission (``Commission'') proposes to amend its regulations that prescribe minimum adjusted net capital (``ANC'') requirements for futures commission merchants (``FCMs'') and introducing brokers (``IBs''). The proposed amendments would increase the required minimum dollar amount of ANC, as defined in the regulations, that an FCM must maintain from $250,000 to $1,000,000. The proposed amendments also would increase the required minimum dollar amount of ANC that IBs must maintain from $30,000 to $45,000. The Commission also is proposing to amend the computation of an FCM's margin-based minimum ANC requirement to incorporate into the calculation customer and noncustomer positions in over-the-counter derivative instruments that are submitted for clearing by the FCM to derivatives clearing organizations (``DCOs'') or other clearing organizations (``cleared OTC derivative positions''). In addition, the Commission is proposing to amend the regulations to require that FCM proprietary cleared OTC derivative positions be subject to capital deductions in a manner that is consistent with the capital deductions required by the Commission's regulations for FCM proprietary positions in exchange-traded futures contracts and options contracts. Further, the Commission proposes to amend the FCM capital computation to increase the applicable percentage of the total margin-based requirement for futures, options and cleared OTC derivative positions in customer accounts from eight percent to ten percent and in noncustomer accounts from four percent to ten percent. Lastly, the Commission solicits public comments on the advisability of increasing the ANC requirement for FCMs that are also securities brokers and dealers by the amount of net capital required by the Securities and Exchange Commission (``SEC'') Rule 15c3-1(a).