Commodity Futures Trading Commission 2010 – Federal Register Recent Federal Regulation Documents

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 Act.

The Commodity Futures Trading Commission (``Commission'' or ``CFTC'') is proposing to amend its regulations regarding the required content of the acknowledgment letter that a registrant must obtain from any depository holding its segregated customer funds or funds of foreign futures or foreign options customers, and certain technical changes.

The Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues will hold a public meeting on August 11, 2010, from 9 a.m. to 1 p.m., at the CFTC's Washington, DC headquarters. At the meeting, the committee will continue its examination of the market events of May 6, 2010.

On October 6, 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 SP-15 \2\ Financial Day-Ahead LMP Peak (``SPM'') contract and SP-15 Financial Day-Ahead LMP Off-Peak (``OFP'') contract,\3\ which are listed 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 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 other available information. The Commission has reviewed the entire record in this matter, including all comments received, and has determined to issue orders finding that the SPM and OFP contracts perform 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.

On October 26, 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 PJM \2\ WH \3\ Real Time Peak (``PJM'') contract and PJM WH Real Time Off-Peak (``OPJ'') contract,\4\ which are listed 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 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 other available information. The Commission has reviewed the entire record in this matter, including all comments received, and has determined to issue orders finding that the PJM and OPJ contracts perform 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 CFTC's Agricultural Advisory Committee will hold a public meeting on August 5, 2010, from 9 a.m. to 1 p.m., at the Commission's Washington, DC headquarters. The agenda for the meeting includes (1) the ICE Futures US Cotton Contract, (2) wheat price convergence issues, and (3) price reporting issues in the cattle and hog markets. Members of the public may file written statements with the committee. If time permits, reasonable provision will be made for oral presentations by members of the public of up to five minutes.

On October 6, 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 Mid-C \2\ Financial Peak (``MDC'') contract and Mid-C Financial Off-Peak (``OMC'') contract,\3\ which are listed 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 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 other available information. The Commission has reviewed the entire record in this matter, including all comments received, and has determined to issue orders finding that the MDC and OMC contracts perform 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.

On October 6, 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 Mid-C \2\ Financial Peak Daily (``MPD'') contract and Mid-C Financial Off-Peak Daily (``MXO'') contract,\3\ which are listed 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 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 other available information. The Commission has reviewed the entire record in this matter, including all comments received, and has determined to issue orders finding that the MPD and MXO contracts do not perform 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.

On April 15, 2010, the Commodity Futures Trading Commission (``CFTC'' or the ``Commission'') published for public comment in the Federal Register \1\ a proposal to exempt the trading and clearing of certain contracts called ``options'' and other contracts called ``security futures'' on each of ETFS Physical Swiss Gold Shares (``Gold Products'') and ETFS Physical Silver Shares (``Silver Products'') (collectively, ``Gold and Silver Products''), which would be traded on national securities exchanges (as to options) and designated contract markets registered with the Securities and Exchange Commission (``SEC'') as limited purpose national securities exchanges (as to security futures), and in either case cleared through the Options Clearing Corporation (``OCC'') in its capacity as a registered securities clearing agency, from the provisions of the Commodity Exchange Act (``CEA'') \2\ and the regulations thereunder, to the extent necessary to permit them to be so traded and cleared. Authority for this exemption is found in Section 4(c) of the CEA.\3\ The Commission also requested comment on whether it should amend all orders issued exempting the trading and clearing of options on gold and silver share-based products from CEA provisions and Commission regulations thereunder, to impose market and large trader reporting requirements under Commission regulations to the trading and clearing of the options

The Commodity Futures Trading Commission (Commission or CFTC) is granting an exemption to firms designated by Bursa Malaysia Derivatives Berhad (Bursa Derivatives), a subsidiary of Bursa Malaysia Berhad (Bursa Malaysia), from the application of certain of the Commission's foreign futures and options regulations based upon substituted compliance with certain comparable regulatory and self- regulatory requirements of a foreign regulatory authority consistent with conditions specified by the Commission, as set forth herein. This Order is issued pursuant to Commission Regulation 30.10, which permits persons to file a petition with the Commission for exemption from the application of certain of the Regulations set forth in Part 30 and authorizes the Commission to grant such an exemption if such action would not be otherwise contrary to the public interest or to the purposes of the provision from which exemption is sought.

The Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues is providing notice that it will hold a public meeting on Tuesday, June 22, 2010, in the Auditorium, Room L-002, at the SEC's main offices, 100 F Street, NE., Washington, DC. The meeting will begin at 1 p.m. (EST) and will be open to the public. The Committee meeting will be webcast on the SEC's Web site at https:// www.sec.gov. Persons needing special accommodations to take part because of a disability should notify a contact person listed below. The public is invited to submit written statements to the Committee.

Hard Eight Futures, LLC (``HEF'') has petitioned the Commodity Futures Trading Commission (``Commission'' or ``CFTC'') for exemptive relief, pursuant to Section 4(c) of the Commodity Exchange Act (``Act'' or ``CEA''),\1\ to permit U.S. eligible contract participants (``ECPs''),\2\ subject to certain conditions, to trade foreign non- narrow-based security index futures contracts where the foreign exchange has not obtained a staff no-action letter with respect to the offer and sale of such futures contracts to U.S. persons. The conditions proposed in HEF's petition are: (i) Relief is only available for futures on broad-based security indexes; (ii) the securities comprising such an index are principally traded on, by, or through any exchange or market located outside the U.S.; (iii) the Commission must have a Memorandum of Understanding with the foreign exchange's regulator with respect to information sharing and cooperation; \3\ and (iv) an ECP seeking to claim the exemption would file notice with the Commission, which would be effective with respect to that person and index, unless the Commission notifies the person within ten (10) business days that the claimant does not meet the requirements of the exclusion, or that the index does not qualify as broad based.

The Commodity Futures Trading Commission (``CFTC'' or ``Commission'') proposes a rule (``Proposal'') that requires Designated Contract Markets (DCMs), Derivatives Transaction Execution Facilities (DTEFs), and Exempt Commercial Markets (ECMs) that list significant price discovery contracts (SPDCs) that offer co-location and/or proximity hosting services to market participants to have equal access to co-location and/or proximity hosting services without artificial barriers that act to exclude some market participants from accessing these services or that act to bar otherwise qualified third-party

The Chairmen of the SEC and CFTC, with the concurrence of the other SEC and CFTC Commissioners, respectively, intend to establish the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues (the ``Committee'').

On October 9, 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 Zone 6-NY Financial Basis (``TZS'') 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 other available information. The Commission has reviewed the entire record in this matter, including all comments received, and has determined to issue an order finding that the TZS contract does not perform 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.

On October 9, 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 San Juan Financial Basis (``SNJ'') 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 other available information. The Commission has reviewed the entire record in this matter, including all comments received, and has determined to issue an order finding that the SNJ contract does not perform 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.

On October 9, 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 Permian Financial Basis (``PER'') 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 other available information. The Commission has reviewed the entire record in this matter, including all comments received, and has determined to issue an order finding that the PER contract does not perform 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.