Federal Register / Vol. 65, No. 15 / Monday, January 24, 2000 / Notices 3669

1The proposed amendments involve CME Rules

802 and 830. Amended CME Rule 830 would, as

proposed, add definitions distinguishing between a

‘‘Joint Cross-Margining Program,’’ also known as the

‘‘one-pot’’ approach, and a ‘‘Guaranteed CrossMargining Program,’’ also known as the ‘‘two-pot’’

approach. Both of these approaches are described

infra. Amendments to CME Rule 830 would also,

among other things, delineate which Exchange

members are eligible to participate in a guaranteed

cross-margining program. Amended CME Rule 802,

as proposed, would mandate how the obligations of

a cross-margining program participant would be

discharged in the event of default.

2CME submitted the proposed CME–LIFFE link

to the Commission by letters dated November 23,

1999 and December 14, 1999. The Division

informed CME that the CME–LIFFE link could

become effective without prior Commission

approval, pursuant to Commission Regulation

1.41(c), by letter dated December 21, 1999. In brief,

the program permits individuals and firms with

access to CME Globex terminals to obtain crossexchange access through Globex to the contracts

listed by LIFFE on LIFFE’s electronic trading

system, CONNECT, provided they are approved by

LIFFE as members (pursuant to a fast-track

procedure), affiliate with a clearing member of LCH

to clear trades made in LIFFE contracts, and agree

to abide by LIFFE rules. Likewise, individuals and

firms with access to LIFFE CONNECT could obtain

cross-exchange access through CONNECT to the

contracts listed by CME on Globex, provided they

are LIFFE members identified to CME, affiliate with

a clearing member of CME to clear trades made in

CME contracts, and agree to abide by the Globex

trading rules of CME.

3The Division verbally requested a document of

this nature during an August 19, 1999 meeting with

representatives from CME.

month to the business day preceding the

last five trading days of the expiring

month. The speculative position limit

applicable to futures positions during

the last five trading days of the futures

contract would remain unchanged at

300 contracts.

The CME intends to make the

proposed amendments effective upon

Commission approval for all existing

and newly listed contract months

beginning with the April 2000 contract

month.

The Commission is requesting

comments on the proposed amendment.

Copies of the proposed amendments

will be available for inspection at the

Office of the Secretariat, Commodity

Futures Trading Commission, Three

Lafayette Centre, 21st Street, NW,

Washington, DC 20581. Copies of the

proposed amendments can be obtained

through the Office of the Secretariat by

mail at the above address, by phone at

(202) 418–5100, or via the Internet at

secretary@cftc.gov.

Other materials submitted by the

Exchange in support of the proposal

may be available upon request pursuant

to the Freedom of Information Act (5

U.S.C. 552) and the Commission’s

regulations thereunder (17 CFR Part 145

(1987)), except to the extent they are

entitled to confidential treatment as set

forth in 17 CFR 145.5 and 145.9.

Requests for copies of such materials

should be made to the FOI, Privacy and

Sunshine Act Compliance Staff at the

Office of Secretariat at the Commission’s

headquarters in accordance with 17 CFR

145.7 and 145.8.

Any person interested in submitting

written data, views, or arguments on the

proposed amendments, or with respect

to other materials submitted by the

Exchange, should send such comments

to Jean A. Webb, Secretary, Commodity

Futures Trading Commission, Three

Lafayette Centre, 21st Street, NW,

Washington, DC 20581 by the specified

date.

Issued in Washington, DC, on January 14,

2000.

Richard Shilts,

Acting Director.

[FR Doc. 00–1567 Filed 1–21–00; 8:45 am]

BILLING CODE 6351–01–M

COMMODITY FUTURES TRADING

COMMISSION

RIN 3038–ZA06

The Chicago Mercantile Exchange’s

Proposal To Establish a CrossMargining Program With the London

Clearing House

AGENCY: Commodity Futures Trading

Commission.

ACTION: Notice of proposed rule

amendments of the Chicago Mercantile

Exchange to implement cross-margining

with the London Clearing House.

SUMMARY: The Chicago Mercantile

Exchange (‘‘CME’’ or ‘‘Exchange’’) has

submitted to the Commodity Futures

Trading Commission (‘‘Commission’’)

proposed rule amendments that would

establish a ‘‘two-pot’’ cross-margining

program between the CME and the

London Clearing House (‘‘LCH’’). The

program would permit participants to

cross-margin their positions at the CME

Clearing House and LCH while holding

those positions at each clearing house in

separate accounts.

Acting pursuant to the authority

delegated by Commission Regulation

140.96(b), the Division of Trading and

Markets (‘‘Division’’) has determined to

publish the CME’s proposal for public

comment. The Division believes that

publication of the proposal is in the

public interest and will assist the

Commission in considering the views of

interested persons.

DATES: Comments must be received on

or before February 8, 2000.

ADDRESSES: Comments should be

submitted to Jean A. Webb, Secretary,

Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street, NW, Washington, DC

20581. Comments also may be sent by

facsimile to (202) 418–5221 or by

electronic mail to secretary@cftc.gov.

Reference should be made to ‘‘Chicago

Mercantile Exchange’s Proposal To

Establish A Cross-Margining Program

With the London Clearing House.’’

FOR FURTHER INFORMATION CONTACT:

Joshua R. Marlow, Attorney-Advisor,

Division of Trading and Markets,

Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street, NW, Washington, DC

20581. Telephone (202) 418–5490.

SUPPLEMENTARY INFORMATION:

I. Background

On October 22, 1999, CME submitted

to the Commission proposed rule

amendments that would set forth a

framework for the establishment of

guaranteed cross-margining programs

with other clearing organizations. These

proposed rule amendments were

submitted by CME in anticipation of its

plan to establish a cross-margining

program with LCH,1 based on an

electronic trading link between CME

and the London International Financial

Futures Exchange (‘‘LIFFE’’).2 All

transactions executed at LIFFE are

cleared by LCH. Because the October 22,

1999 submission lacked certain details

regarding specifics of the CME–LCH

program, CME agreed to allow the

Commission to stay its review of the

proposal until providing the

Commission with such details. On

December 27, 1999, CME submitted

additional materials to the Commission,

including a letter summarizing the

proposal; a ‘‘Cross-Margining

Agreement’’ between the CME, LCH and

LIFFE; a copy of the ‘‘Cross-Margining

Participant Agreement’’ for clearing

members participating in the CrossMargining Program; an opinion of

outside counsel regarding the crossborder bankruptcy implications of the

program’s payment guaranty provision; 3

and an overview of the proposal’s losssharing arrangement.

II. Description of the Proposed CrossMargining Program

Under the program, CME clearing

members that either (1) are clearing

3670 Federal Register / Vol. 65, No. 15 / Monday, January 24, 2000 / Notices

4All LIFFE clearing members must also be

members of LCH. 5 July 2, 1999, letter to George F. Haase, Jr., NYCC

President, from David P. Van Wagner, Associate

Director of the Division of Trading and Markets.

members at both LCH and LIFFE, or (2)

have affiliates that are clearing members

at both LCH and LIFFE,4 would be

eligible to cross-margin proprietary

positions that they maintain in Euro

Euribor and Euro Libor futures and

option contracts at LIFFE and

Eurodollar futures and option contracts

at CME. This program would take the

‘‘two-pot’’ approach to cross-margining,

whereby performance bond and

positions of participants are held in

separate accounts by the CME Clearing

House and by LCH, rather than a ‘‘onepot’’ approach in which cross-margined

positions and performance bond are

maintained by the participating clearing

organizations in jointly-held accounts.

The CME Clearing House and LCH, by

the terms of the Cross-Margining

Agreement, would calculate daily the

amount that each participant in the

program could, with cross-margining,

reduce its margin levels at LCH and

CME. LCH and the CME Clearing House

would then provide each other with

cross-guaranties in the amount of the

associated margin reductions to protect

each clearing organization in the event

of default by a clearing member of the

other clearing organization. CME’s

proposal is unique in that, unlike the

‘‘two-pot’’ guaranteed cross-margining

arrangement between the Government

Securities Clearing Corporation and the

New York Clearing Corporation

(‘‘NYCC’’) recently deemed approved by

the Commission,5 the current proposal

raises issues of transnational insolvency

which have not been previously

considered in the cross-margining

context.

III. Request for Comment

The Commission requests comment

from interested persons concerning any

aspect of CME’s proposed crossmargining program. The Commission is

especially interested in comments

regarding the cross-border bankruptcy

aspects of this proposal.

Copies of CME’s proposed rule

amendments and certain other materials

are available for inspection at the Office

of the Secretariat, Commodity Futures

Trading Commission, Three Lafayette

Centre, 1155 21st Street NW,

Washington, DC 20581. Copies of the

proposed amendments and related

materials may also be obtained through

the Office of the Secretariat by mail at

the above address, by telephone at (202)

418–5100, or by electronic mail at

secretary@cftc.gov. Other materials

submitted by CME may be available

upon request pursuant to the Freedom

of Information Act, 5 U.S.C. § 552, and

the Commission’s regulations

thereunder, 17 CFR § 145 (1987), except

to the extent they are entitled to

confidential treatment as set forth in 17

CFR §§ 145.5, 145.9. Requests for copies

of such materials should be made to the

FOIA, Privacy Act, and Sunshine Act

Compliance Staff of the Office of

Secretariat at the Commission’s

headquarters in accordance with 17 CFR

§§ 145.7, 145.8.

Issued in Washington, D.C. on January 14,

2000 by the Commission.

Alan L. Seifert,

Deputy Director.

[FR Doc. 00–1569 Filed 1–21–00; 8:45 am]

BILLING CODE 6351–01–U

CONSUMER PRODUCT SAFETY

COMMISSION

[CPSC Docket No. 00–C0004]

Lancaster Colony Corporation;

Provisional Acceptance of a

Settlement Agreement and Order

AGENCY: Consumer Product Safety

Commission

ACTION: Notice.

SUMMARY: It is the policy of the

Commission to publish settlements

which it provisionally accepts under the

Consumer Product Safety Act in the

Federal Register in accordance with the

terms of 16 CFR 1118.20(e). Published

below is a provisionally-accepted

Settlement Agreement Lancaster Colony

Corporation, a corporation, containing a

civil penalty of $150,000.

DATES: Any interested person may ask

the Commission not to accept this

agreement or otherwise comment on its

contents by filing a written request with

the Office of the Secretary by February

8, 2000.

ADDRESSES: Persons wishing to

comment on this Settlement Agreement

should send written comments to the

Comment 00–C0004, Office of the

Secretary, Consumer Product Safety

Commission, Washington, D.C. 20207.

FOR FURTHER INFORMATION CONTACT:

Ronald G. Yelenik, Trial Attorney,

Office of Compliance and Enforcement,

Consumer Product Safety Commission,

Washington, D.C. 20207; telephone

(301) 504–0626, 1351.

SUPPLEMENTARY INFORMATION: The text of

the Agreement and Order appears

below.

Dated: January 18, 2000.

Sadye E. Dunn,

Secretary.

[FR Doc. 00–1563 Filed 1–21–00;8:45am]

BILLING CODE 6355–01–M

CONSUMER PRODUCT SAFETY

COMMISSION

[CPSC Docket NO. 00–C0004]

Lancaster Colony Corporation, a

Corporation; Settlement Agreement

and Order

1. This Settlement Agreement and

Order, entered into between Lancaster

Colony Corporation, a corporation

(hereinafter, ‘‘Lancaster Colony’’ or

‘‘Respondent’’), and the staff of the

Consumer Product Safety Commission

(hereinafter, ‘‘staff’’), pursuant to the

procedures set forth in 16 C.F.R.

§ 1118.20, is a compromise resolution of

the matter described herein, without a

hearing or determination of issues of

law and fact.

The Parties

2. The staff is the staff of the

Consumer Product Safety Commission

(hereinafter, ‘‘Commission’’), an

independent federal regulatory agency

of the United States government,

established by Congress pursuant to

section 4 of the Consumer Product

Safety Act (hereinafter, ‘‘CPSA’’), as

amended, 15 U.S.C. § 2053.

3. Respondent Lancaster Colony is a

corporation organized and existing

under the laws of the State of Ohio with

its principal corporate offices located in

Columbus, Ohio. Lancaster Colony has

an operating division named Candle-lite

located in Cincinnati, Ohio, which

manufactures and sells candles.

Staff Allegations

4. Section 15(b) of the CPSA, 15

U.S.C. § 2064(b), requires a

manufacturer of a consumer product

who, inter alia, obtains information that

reasonably supports the conclusion that

the product contains a defect which

could create a substantial product

hazard or creates an unreasonable risk

of serious injury or death, to

immediately inform the Commission of

the defect or risk.

5. Between August 1995 and February

1996, Lancaster Colony through its

Candle-lite division, manufactured and

sold nationwide, approximately three

million Clearfire De-lite Candles

(hereinafter the ‘‘Candles’’ or the

‘‘product’’). A candle is a ‘‘consumer

product and Lancaster Colony is a

‘‘manufacturer’’ of a ‘‘consumer

product,’’ which is ‘‘distributed in