3668 Federal Register / Vol. 65, No. 15 / Monday, January 24, 2000 / Notices

lean hog futures option contract that

correspond to contract months for the

underlying lean hogs futures contract

expire simultaneously with such futures

contract months. Currently, traders’

combined positions in the futures and

option contracts are subject to

speculative position limits of 2000

contracts for positions held in

individual non-spot contract months

and 650 contracts for positions held in

the expiring contract month from the

close of business on the fifth business

day of that month through the last

trading day of the expiring contract

month (the tenth business day of the

month).

The proposed amendments would

increase the speculative position limit

applicable to individual non-spot

contract months to 2,400 contracts from

2,000 contracts. The proposed

amendments also would increase to 950

contracts from 650 contracts the

speculative limit applicable from the

close of business on the fifth business

day of the expiring contract month

through the last trading day for that

month.

The CME intends to make the

proposed amendments effective upon

Commission approval for all existing

and newly listed contract months.

The Commission is requesting

comments on the proposed

amendments.

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 146

(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 of 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. 00–1566 Filed 1–21–00; 8:45 am]

BILLING CODE 6351–01–M

COMMODITY FUTURES TRADING

COMMISSION

RIN 3038–ZA04

Chicago Mercantile Exchange:

Proposed Amendments to the Live

Cattle Futures and Option Contracts

Increasing the Contracts’ Speculative

Position Limits

AGENCY: Commodity Futures Trading

Commission.

ACTION: Notice of availability of

proposed amendments to contract terms

and conditions.

SUMMARY: The Chicago Mercantile

Exchange (CME or Exchange) has

proposed amendments to the

Exchange’s live cattle futures and option

contracts. The proposed amendments

would increase to 3,200 contracts from

2,400 contracts the speculative position

limit applicable to individual non-spot

months. The proposed amendments also

would increase to 900 contracts from

600 contracts the speculative position

limit applicable to positions held in the

expiring contract month from the close

of business on the business day

following the first Friday of the contract

month to the business day preceding the

last five trading days of the expiring

month. The proposed amendments were

submitted under the Commission’s 45-

day Fast Track procedures which

provides that, absent any contrary

action by the Commission, the proposed

amendments may be deemed approved

on February 24, 2000—45 days after the

Commission’s receipt of the proposals.

The Acting Director of the Division of

Economic Analysis (Division) of the

Commission, acting pursuant to the

authority delegated by Commission

Regulations 140.96, has determined that

publication of the proposed

amendments is in the public interest,

will assist the Commission in

considering the views of interested

persons, and is consistent with the

purposes of the Commodity Exchange

Act.

DATES: Comments must be received on

or before February 8, 2000.

ADDRESSES: Interested persons should

submit their views and comments to

Jean A. Webb, Secretary, Commodity

Futures Trading Commission, Three

Lafayette Centre, 21st Street, NW,

Washington, DC 20581. In addition,

comments may be sent by facsimile

transmission to facsimile number (202)

418–5521, or by electronic mail to

secretary@cftc.gov. Reference should be

made to the proposed amendments to

the speculative position limits for the

CME live cattle futures and option

contracts.

FOR FURTHER INFORMATION CONTACT:

Please contact John Bird of the Division

of Economic Analysis, Commodity

Futures Trading Commission, Three

Lafayette Centre, 21st Street, NW,

Washington, DC 20581, telephone (202)

418–5274. Facsimile number: (202) 418–

5527. Electronic mail: jbird@cftc.gov.

SUPPLEMENTARY INFORMATION: The live

cattle futures calls for delivery of 40,000

pounds of live steers at specified CMEapproved livestock yards located in

Iowa, Kansas, Oklahoma, Texas, New

Mexico and Colorado or, at the delivery

receiver’s request, at CME-approved

cattle slaughter plants located near the

CME-approved livestock yards. The live

cattle futures option contract is

exercisable into the futures contract and

option contract months expire prior to

the last five trading days for the

underlying futures contract month (the

last trading day for expiring contract

months is the last business day of the

month). Non-delivery period option

contract months expire on the last

Friday of the month and delivery period

options expire on the business day

preceding the last nine business days of

the underlying futures contract month.

Currently, traders’ combined positions

in the futures and option contracts are

subject to speculative position limits of

2,400 contracts in individual non-spot

contract months and 600 contracts

commencing at the close of business on

the business day following the first

Friday of the contract month. In

addition, positions in the expiring

futures contract month are subject to a

speculative position limit of 300

contracts during the last five trading

days of the expiring contract month.

The proposed amendments would

increase to 3,200 contracts from 2,400

contracts the speculative position limit

applicable to combined futures and

option positions in individual non-spot

months. The proposed amendments also

would increase to 900 contracts from

600 contracts the speculative position

limit applicable to combined futures

and option positions held in the

expiring contract month from the close

of business on the business day

following the first Friday of the contract

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