[Federal Register Volume 60, Number 84 (Tuesday, May 2, 1995)]
[Notices]
[Pages 21503-21504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10883]



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COMMODITY FUTURES TRADING COMMISSION


New York Cotton Exchange: Proposed Amendments Relating to the 
Maximum Daily Price Fluctuation and the Minimum Price Fluctuation 
Limits for the Cotton No. 2 Futures Contract

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of Proposed Contract Rule Change.

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SUMMARY: The New York Cotton Exchange (``NYCE'') has submitted proposed 
amendments to its cotton No. 2 futures contract that will: (1) Increase 
to three from two cents per pound the contract's base maximum daily 
price fluctuation limit (base maximum limit) for all contract months 
listed for trading whenever the settlement price for any one contract 
month equals or exceeds 95 cents per pound; (2) provide that the 
proposed three-cent-per-pound maximum limit may be increased to 
[[Page 21504]] four and one-half cents per pound under specified 
conditions; and (3) increase to 5/100ths from 1/100th of one cent per 
pound the minimum price fluctuation limit for a contract month whenever 
prices for that contract month equal or exceed 95 cents per pound.
    In accordance with Section 5a(a)(12) of the Commodity Exchange Act 
and acting pursuant to the authority delegated by Commission Regulation 
140.96, the Acting Director of the Division of Economic Analysis 
(``Division'') of the Commodity Futures Trading Commission 
(``Commission'') has determined, on behalf of the Commission, that 
publication of the proposed amendments 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 May 9, 1995.

ADDRESSES: Interested persons should submit their views and comments to 
Jean A. Webb, Secretary, Commodity Futures Trading Commission, 2033 K 
Street NW, Washington, DC 20581. Reference should be made to the 
proposed amendments relating to changes in the maximum price and the 
minimum price fluctuation limits for the cotton No. 2 futures contract.

FOR FURTHER INFORMATION CONTACT:
Frederick V. Linse, Division of Economic Analysis, Commodity Futures 
Trading Commission, 2033 K Street NW. Washington, DC 20581, telephone 
(202) 254-7303.

SUPPLEMENTARY INFORMATION: The cotton No. 2 futures contract currently 
specifies a base maximum limit of 2 cents per pound above or below the 
previous day's settlement price. The contract's existing terms also 
provide that, whenever the prices for 3 or more contract months 
increase or decrease by the base maximum limit for 3 consecutive 
business days, the base maximum limit is increased to 3 cents per pound 
for those contract months only. The current minimum price fluctuation 
limit is 1/100 of one cent per pound.
    As noted, the proposed amendments will provide that, whenever the 
daily settlement price for any single futures contract month is 95 
cents per pound or higher, the base maximum limit for all contract 
months on the next business day will be three cents per pound. The 
proposed amendments also will stipulate that, if three or more contract 
months settle at the higher three-cent-per-pound maximum limit for 
three consecutive business days and the price for at least one contract 
month is 95 cents per pound or greater, the three-cent maximum limit 
will be increased to four and one-half cents per pound for all contract 
months. The limit will remain at this level until (1) there are no 
individual-month settlement prices which are 95 cents per pound or 
higher, and (2) the settlement prices for no more than 2 months have 
increased or decreased by the three-cent limit.
    In addition, the proposed amendments will specify that, whenever 
the prices for a contract month are 95.00 cents per pound or higher, 
the minimum price fluctuation for that contract month shall be 5/100ths 
of one cent per pound, except that straddle transactions may continue 
to be made at prices expressed in minimum values of 1/100th of one cent 
per pound.
    The NYCE intends to apply the proposed amendments to all existing 
and newly listed contract months following Commission approval.
    In support of the proposal to increase the base maximum limit when 
futures prices are trading at or above 95 cents per pound, the Exchange 
stated that:

    It is the view of the [NYCE's Board of Directors] that trading 
at * * * levels [of 95 cents per pound] is another indication of 
market activity warranting the ability to trade further before the 
market locks limit up. During discussion, it was noted that cotton 
futures already have the most restrictive price limits, regular 
limits being about two percent of current market value and expanded 
limits, being approximately three percent of such values.

    The Commission is requesting comments on the proposals within the 
specified period of time in view of the cotton market's recent 
heightened volatility and the consequent need for timely consideration 
by the Commission of the proposals. In this respect, on the vast 
majority of the trading days during April 1995, the settlement prices 
for at least one of the two nearby contract months listed for this 
future contract have increased or decreased by the existing two-cent-
per-pound base maximum limit.
    Copies of the proposed amendments will be available for inspection 
at the Office of the Secretariat, Commodity Futures Trading Commission, 
2033 K Street NW, Washington, DC 20581. Copies of the amended terms and 
conditions can be obtained through the Office of the Secretariat by 
facsimile by telephone at (202) 254-6314.
    The materials submitted by the NYCE in support of the proposed 
amendments 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)). Requests for copies of such 
materials should be made to the FOI, Privacy and Sunshine Act 
Compliance Staff of the Office of the Secretariat at the Commission's 
headquarters in accordance with CFR 145.7 and 145.8.
    Any person interested in submitting written data, views or 
arguments on the proposed amendments should send such comments to Jean 
A. Webb, Secretary, Commodity Futures Trading Commission, 2033 K Street 
NW, Washington, DC 20581 by the specified date.

    Issued in Washington, DC, on April 28, 1995.
Blake Imel,
Acting Director, Division of Economic Analysis.
[FR Doc. 95-10883 Filed 5-1-95; 8:45 am]
BILLING CODE 6351-01-M