# Changes in Reporting Levels for Large Trader Reports > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A94-31258 ## Record - **Collection:** Federal Register - **Document type:** Uncategorized Document - **Published:** December 23, 1994 ## Text COMMODITY FUTURES TRADING COMMISSION 17 CFR Part 15 Changes in Reporting Levels for Large Trader Reports AGENCY: Commodity Futures Trading Commission. ACTION: Final rulemaking. ----------------------------------------------------------------------- SUMMARY: The Commodity Futures Trading Commission (Commission) is amending its regulations to raise the reporting levels at which futures commission merchants (FCMs), clearing members, foreign brokers, and traders must file large trader reports in natural gas, heating oil, frozen concentrated orange juice, and cocoa futures. By increasing the large trader reporting levels, this amendment reduces both burdens on persons reporting and the processing workload of the Commission. EFFECTIVE DATE: January 1, 1995. FOR FURTHER INFORMATION CONTACT: Lamont L. Reese, Division of Economic Analysis, 2033 K Street, NW, Washington, D.C. 20581, Telephone (202) 254-3310. SUPPLEMENTARY INFORMATION: I. Background Reporting levels are set in futures to ensure that the Commission receives adequate information to carry out its market surveillance programs. These are designed to detect and prevent market congestion and price manipulation and to enforce speculative position limits. In addition, the information serves as a basis to gauge overall hedging and speculative uses of the futures markets, use of the markets by foreign participants, and other matters of public concern. Generally, Parts 17 and 18 of the regulations require reports from members of contracts markets, FCMs or foreign brokers (``firms'') and traders, respectively, when a trader holds a ``reportable position''; i.e., any open position held or controlled by a trader at the close of business in any one future of a commodity traded on any one contract market that is equal to or in excess of the quantities fixed by the Commission in Sec. 15.03 of the regulations.\1\ --------------------------------------------------------------------------- \1\Firms which carry accounts for traders who hold ``reportable positions'' are required to identify such accounts on a Form 102 and report on the series '01 forms any reportable positions in the account, the delivery notices issued or stopped by the account and any exchanges of futures for physicals. Traders who own or control reportable positions are required to file annually a CFTC Form 40 giving certain background information concerning their trading in commodity futures and, on call by the Commission, must submit a Form 103 showing positions and transactions in the contract market specified in the call. --------------------------------------------------------------------------- The Commission periodically reviews information concerning trading volume, open interest, and the number and position sizes of individual traders relative to the reporting levels for each market to determine if coverage is adequate for effective market surveillance. In this regard, the Commission also is mindful of the paperwork burden associated with these reporting requirements and reviews them with an eye to ameliorating that burden to the extent compatible with adequate market coverage. The Commission's most recent review of reporting levels indicates that the size of trading volume, open interest, and positions of individual traders enable the Commission to raise reporting levels as follows: In cocoa, from 50 to 100 contracts; in frozen concentrated orange juice, from 25 to 50 contracts; in natural gas, from 50 to 100 contracts; and in heating oil, from 175 to 250 contracts. The Commission estimates that, by adopting the subject amendment, the number of daily position reports (i.e., series '01 reports) filed by reporting firms for the four commodities would decrease by about 33 percent. There would also be a proportionate decrease in the number of form 102's filed by firms and form 40's filed by large traders. Market coverage represented by the percent of total open interest reported through the large trader system in the subject commodities, however, is estimated to decline on average by no more than 5 percent on either the long or short side of the market. Exchanges which trade these four commodities also maintain large trader reporting systems that are similar in most respects to that operated by the Commission. All of the exchange systems rely on routine position and account identification reports from member firms similar to the Commission's series '01 reports and form 102s. As part of the current review, Commission and exchange surveillance staff have discussed the potential impact of these rule amendments on exchange surveillance programs. Exchange staff are in agreement that the new levels will provide adequate coverage for market surveillance. II. Related Matters A. Notice and Comment The Administrative Procedure Act, 5 U.S.C. 553(b), requires, in most instances, that a notice of proposed rulemaking be published in the Federal Register, and that opportunity for comment be provided when an agency promulgates new regulations. Section 553(b) sets forth an exception, however, when the agency, for good cause, finds (and incorporates the findings and a brief statement of its reasons) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest. The Commission finds that notice and public comments on the rule changes announced herein are unnecessary, because the amendments are routine determinations made by the Commission with respect to futures contracts that experience a growth in activity. These routine determinations are made to adjust reporting levels, when increasing activity in the market leads to the receipt by the Commission of a larger number of reports than is necessary for efficient surveillance of the market. In this regard, it should be further noted that these amendments do not establish any new obligations under the Act. On the contrary, these changes simplify compliance with the Act by reducing persons' reporting obligations under the rules in question. B. The Regulatory Flexibility Act (RFA) The RFA requires that agencies, in proposing rules, consider the impact of those rules on small businesses. These amendments affect large traders and FCMs, and other similar entities, such as foreign brokers and foreign traders. The Commission has defined ``small entities'' as used by the Commission in evaluating the impact of its rule in accordance with the RFA. 47 FR 18618-18621 [April 30, 1982]. In that statement, the Commission concluded that large traders and FCMs are not considered to be small entities for purposes of the RFA. In this regard, the amendments to reporting requirements fall mainly upon FCMs. Similarly, foreign brokers and foreign traders report only if carrying or holding reportable (i.e., large) positions. In addition, these amendments relieve a regulatory burden. Accordingly, the amendments have no significant impact on a substantial number of small entities. For the above reasons, and pursuant to Sec. 3(a) of the RFA (5 U.S.C. 605(b)), the Chairman, on behalf of the Commission, certifies that these regulations will not have a significant economic impact on a substantial number of small entities. C. Paperwork Reduction Act (PRA) The PRA, 44 U.S.C. 3501 et seq., imposes certain requirements on Federal agencies (including the Commission) in connection with their conducting or sponsoring any collection of information as defined by the PRA. In compliance with the PRA, the Commission previously submitted this rule and its associated information collection requirements to the Office of Management and Budget (OMB). OMB approved the collection of information associated with this rule in June 1993, and assigned OMB control number 3038-0009 to the rule. The burden associated with this entire collection, including this amended rule, is as follows: Average Burden Hours Per Response........................... 0.19 Number of Respondents....................................... 4,584 Frequency of Response....................................... Daily Persons wishing to comment on the information which would be required by these rules should contact Gary Waxman, Office of Management and Budget, Room 3228, NEOB, Washington, DC, 20503, (202) 395-7304. Copies of the information collection submission to OMB are available from Joe F. Mink, CFTC Clearance Officer, 2033 K Street, NW, Washington, DC 20581, (202) 254-9735. List of Subjects in 17 CFR Part 15 Brokers, Reporting and recordkeeping requirements. In consideration of the foregoing, and pursuant to the authority contained in the Act and, in particular, sections 4g, 4i, 5 and 8a of the Act, 7 U.S.C. 6g, 6i, 7 and 12a (1990), the Commission hereby amends Chapter I of Title 17 of the Code of Federal Regulations as follows: PART 15--REPORTS--GENERAL PROVISIONS 1. The authority citation for Part 15 continues to read as follows: Authority: 7 U.S.C. 2, 4, 5, 6a, 6c (a)-(d), 6f, 6g, 6i, 6k, 6m, 6n, 7, 9, 12a, 19 and 21; 5 U.S.C. 552 and 552(b). 2. Section 15.03 is revised to read as follows: Sec. 15.03 Quantities Fixed for Reporting. The quantities for the purpose of reports filed under parts 17 and 18 of this chapter are as follows: ------------------------------------------------------------------------ Commodity Quantity ------------------------------------------------------------------------ Wheat (bushels).............................................. 500,000 Corn (bushels)............................................... 750,000 Soybeans (bushels)........................................... 500,000 Oats (bushels)............................................... 300,000 Cotton (bales)............................................... 5,000 Frozen Concentrated Orange Juice (contracts)................. 50 Soybean oil (contracts)...................................... 175 Soybean meal (contracts)..................................... 175 Live cattle (contracts)...................................... 100 Feeder cattle (contracts).................................... 50 Hogs (contracts)............................................. 50 Sugar No. 11 (contracts)..................................... 300 Sugar No. 14 (contracts)..................................... 100 Cocoa (contracts)............................................ 100 Coffee (contracts)........................................... 50 Copper (contracts)........................................... 100 Gold (contracts)............................................. 200 Silver bullion (contracts)................................... 150 Platinum (contracts)......................................... 50 No. 2 heating oil (contracts)................................ 250 Crude Oil, sweet (contracts)................................. 300 Unleaded gasoline (contracts)................................ 150 Natural gas (contracts)...................................... 100 Long-term U.S. Treasury bonds (contracts).................... 500 GNMA (contracts)............................................. 100 Three-month (13 week) U.S. Treasury bills (contracts)........ 150 Long-term U.S. Treasury notes (contracts).................... 500 Medium-term U.S. Treasury notes (contracts).................. 300 Short-term U.S. Treasury notes (contracts)................... 200 Three-month Eurodollar time deposit rates (contracts)........ 850 Thirty-Day Interest Rates (contracts)........................ 100 One-Month Labor Rates (contracts)............................ 100 Foreign currencies (contracts)............................... 200 U.S. Dollar Index (contracts)................................ 50 Standard and Poor's 500 stock price index (contracts)........ 300 New York Stock Exchange composite index (contracts).......... 50 Amex major market index-maxi (contracts)..................... 100 Nikkei stock index (contracts)............................... 50 Municipal bonds (contracts).................................. 100 Value line average index (contracts)......................... 50 All other commodities (contracts)............................ 25 ------------------------------------------------------------------------ Issued in Washington, DC, this 15th day of December 1994, by the Commission. Jean A. Webb, Secretary of the Commission. [FR Doc. 94-31258 Filed 12-22-94; 8:45 am] BILLING CODE 6351-01-M --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-31258. Public record. Not legal advice.