Proposed Rules. Notice of proposed rulemaking; extension of comment period

Agency: Commodity Futures Trading Commission
Action: Notice of proposed rulemaking; extension of comment period
Citation: FR Doc. 2015-13347 · RIN 3038-AE26 · 17 CFR 32

Summary

On May 7, 2015, the Commodity Futures Trading Commission (“Commission” or “CFTC”) published in the Federal Register a notice of proposed rulemaking (the “Trade Options Proposal”) to amend the limited trade option exemption in part 32 of its regulations. The Commission is extending the comment period for the Trade Options Proposal in light of the Commission's recent interpretation concerning forward contracts with embedded volumetric optionality.

Dates

The comment period for the Trade Options Proposal published on May 7, 2015, at 80 FR 26200, is extended until June 22, 2015.

Supplementary Information

On May 7, 2015, the Commission published a proposal to amend the trade option exemption in part 32 of its regulations in the following subject areas: (1) Reporting requirements for trade option counterparties that are not swap dealers or major swap participants; (2) recordkeeping requirements for trade option counterparties that are not swap dealers or major swap participants; and (3) certain non-substantive amendments. 1 Generally, these proposed amendments are intended to facilitate use of trade options by commercial market participants to hedge against commercial and physical risks. 1 Trade Options, Notice of Proposed Rulemaking, 80 FR 26200 (May 7, 2015). On May 18, 2015, the Commission published its final interpretation regarding forward contracts with embedded volumetric optionality. 2 The interpretation identifies when an agreement, contract, or transaction would fall within the forward contract exclusions from the “swap” and “future delivery” definitions in the Commodity Exchange Act (“CEA”), notwithstanding that it allows for variations in the delivery amount ( i.e., contains “embedded volumetric optionality”). 2 Forward Contracts with Embedded Volumetric Optionality, 80 FR 28239 (May 18, 2015). In accordance with section 712(d)(4) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the interpretation was issued jointly with the U.S. Securities and Exchange Commission after consultation with the Board of Governors of the Federal Reserve System. Although the interpretation was issued jointly, it is an interpretation solely of the CFTC and does not apply to the exclusion from the swap and security-based swap definitions for security forwards or to the distinction between security forwards and security futures products. In light of the recent publication of the Commission's interpretation on forward contracts with embedded volumetric optionality, the Commission is extending the comment period for the Trade Options Proposal until June 22, 2015. Issued in Washington, DC, on May 28, 2015, by the Commission. Christopher J. Kirkpatrick, Secretary of the Commission. Note: The following appendix will not appear in the Code of Federal Regulations. Appendix to Trade Options Extension of Comment Period—Commission Voting Summary On this matter, Chairman Massad and Commissioners Wetjen, Bowen, and Giancarlo voted in the affirmative. No Commissioner voted in the negative. [FR Doc. 2015-13347 Filed 6-1-15; 8:45 am]