SUBMISSION COVER SHEET

IMPORTANT: Check box if Confidential Treatment is requested

Registered Entity Identifier Code (optional): 18-026

Organization: Commodity Exchange, Inc. (“COMEX”)

Filing as a: DCM SEF DCO SDR 

Please note - only ONE choice allowed.

Filing Date (mm/dd/yy): 01/26/18 Filing Description: Increasing the Spot Month 

Position Limits for the Five (5) Copper Futures and Options Contracts

SPECIFY FILING TYPE 

Please note only ONE choice allowed per Submission.

Organization Rules and Rule Amendments

Certification § 40.6(a)

Approval § 40.5(a)

Notification § 40.6(d)

Advance Notice of SIDCO Rule Change § 40.10(a)

SIDCO Emergency Rule Change § 40.10(h)

Rule Numbers: 

New Product Please note only ONE product per Submission.

Certification § 40.2(a) 

Certification Security Futures § 41.23(a)

Certification Swap Class § 40.2(d)

Approval § 40.3(a)

Approval Security Futures § 41.23(b)

Novel Derivative Product Notification § 40.12(a)

Swap Submission § 39.5

Official Product Name: 

Product Terms and Conditions (product related Rules and Rule Amendments)

Certification § 40.6(a) 

Certification Made Available to Trade Determination § 40.6(a)

Certification Security Futures § 41.24(a)

Delisting (No Open Interest) § 40.6(a) 

Approval § 40.5(a)

Approval Made Available to Trade Determination § 40.5(a)

Approval Security Futures § 41.24(c)

Approval Amendments to enumerated agricultural products § 40.4(a), § 40.5(a)

“Non-Material Agricultural Rule Change” § 40.4(b)(5)

Notification § 40.6(d)

Official Name(s) of Product(s) Affected: See filing.

Rule Numbers: See filing.
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 299 2299 christopher.bowen@cmegroup.com cmegroup.com

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Christopher Bowen 

Managing Director and Chief Regulatory Counsel

Legal Department

January 26, 2018

VIA ELECTRONIC PORTAL

Mr. Christopher J. Kirkpatrick

Office of the Secretariat

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, DC 20581

RE: CFTC Regulation 40.6(a) Rule Certification. Notification Regarding Increasing the 

Spot Month Position Limits of the Five (5) Copper Futures and Options Contracts.

COMEX Submission No. 18-026

Dear Mr. Kirkpatrick:

Commodity Exchange, Inc. (“COMEX” or “Exchange”) is notifying the Commodity Futures Trading 

Commission (“CFTC” or the “Commission”) that it is self-certifying an increase of the spot month position 

limits of five (5) copper futures and option contracts (the “Contracts”), commencing with the March 2018

contract month and beyond, as noted in the table below. Specifically, the increased spot month limits shall 

go into effect at the close of trading on February 27, 2018 for the March 2018 contract month and beyond. 

This submission shall become effective on February 26, 2018. 

(Bold/underline indicates addition; Strikethrough indicates deletion)

Contract Title Rule 

Chapter

Commodity 

Code

Reporting 

Level

Spot-Month 

Limit (In Net 

Futures 

Equivalents)

Single Month 

Accountability 

Level (In Net 

Futures 

Equivalents)

All Month 

Accountability 

Level (In Net 

Futures 

Equivalents)

Copper Futures 187 HG 25 1,2001,500 5,000 5,000

Copper Option 117 HX 25 1,2001,500 5,000 5,000

Copper Weekly 

Options 1010 H1E-H5E 25 1,2001,500 5,000 5,000

Copper Financial 

Futures 1190 HGS 25 1,2001,500 5,000 5,000

Copper Average 

Price Option 1191 CAP 25 1,2001,500 5,000 5,000

The Position Limit, Position Accountability and Reportable Level Table and Header Notes located in the 

Interpretations and Special Notices Section of Chapter 5 of the COMEX Rulebook (the “Table”) will be

amended to reflect the increased spot month position limits of the Contracts. (See Exhibit A: Position Limit, 

Position Accountability, and Reportable Level Table in Chapter 5 of the COMEX Rulebook with additions 

underscored and bolded and deletions overstruck (attached under separate cover.)

Consistent with Core Principle 3 of the Commodity Exchange Act, Appendix C of Part 38, the Exchange 

based the definition of deliverable supply on existing registered and eligible inventories at its Exchange 

approved warehouses for Exchange delivery. Below is the guidance provided for in Appendix C.
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 299 2299 christopher.bowen@cmegroup.com cmegroup.com

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The quantity of the commodity meeting the contract’s delivery specifications that 

reasonably can be expected to be readily available to short traders and salable by long 

traders at its market value in normal cash marketing channels at the contract’s delivery 

points during the specified delivery period, barring abnormal movement in interstate 

commerce. Typically, deliverable supply reflects the quantity of the commodity that 

potentially could be made available for sale on a spot basis at current prices at the 

contract’s delivery points. For a non-financial physical-delivery commodity contract, this 

estimate might represent product which is in storage at the delivery point(s) specified in 

the futures contract or can be moved economically into or through such points consistent 

with the delivery procedures set forth in the contract and which is available for sale on a 

spot basis within the marketing channels that normally are tributary to the delivery point(s)1.

As of December 29, 2017, the 3-year average monthly copper inventory held at COMEX approved 

warehouses totaled 89,681 short tons, the equivalent of 7,175 COMEX Copper Futures contracts. Copper 

stocks have generally trended higher over the past three years. On January 2, 2015, copper stocks stood 

at 26,257 short tons, or 2,101 contract equivalents. As of December 29, 2017, copper inventories held at 

COMEX approved warehouses totaled 210,972 short tons, the equivalent of 16,877 COMEX Copper 

Futures contracts. Furthermore, copper stocks have increased by approximately 135% in 2017. Based on 

this updated deliverable supply, staff requests to increase the spot month limits for the Contracts from 1,200 

futures equivalent contracts to 1,500 futures equivalent contracts or 20.90% of deliverable supply. This is 

proposed to be effective with the March 2018 contract month.

Inventory and Capacity of Exchange Approved Warehouses

Table 2 below provides the monthly average inventory levels of copper for the most recent three (3) year 

period stored at Exchange approved warehouses.

Month

Average 

Registered 

(Short 

Tons)

Average 

Eligible 

(Short 

Tons)

Average 

Total 

(Short 

Tons)

Average 

Total 

(Contract 

Equivalents)

15-Jan 15,174 8,783 23,957 1,917

15-Feb 15,197 3,575 18,772 1,502

15-Mar 21,496 2,194 23,690 1,895

15-Apr 23,480 1,387 24,867 1,989

15-May 22,153 638 22,791 1,823

15-Jun 23,214 2,534 25,748 2,060

15-Jul 30,043 5,733 35,776 2,862

15-Aug 33,175 1,912 35,087 2,807

15-Sep 38,011 1,023 39,034 3,123

15-Oct 42,856 3,025 45,881 3,670

15-Nov 58,945 5,785 64,730 5,178

15-Dec 60,210 11,401 71,611 5,729

16-Jan 60,906 6,108 67,014 5,361

16-Feb 65,273 1,821 67,094 5,368

16-Mar 69,589 322 69,911 5,593

 

1 http://www.cftc.gov/ucm/groups/public/@lrfederalregister/documents/file/2012-12746a.pdf
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 299 2299 christopher.bowen@cmegroup.com cmegroup.com

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16-Apr 65,424 3,486 68,910 5,513

16-May 59,623 3,368 62,991 5,039

16-Jun 59,375 916 60,291 4,823

16-Jul 62,851 1,157 64,008 5,121

16-Aug 64,993 1,448 66,441 5,315

16-Sep 68,730 924 69,654 5,572

16-Oct 70,244 1,412 71,656 5,732

16-Nov 71,422 2,784 74,206 5,936

16-Dec 79,385 3,218 82,603 6,608

17-Jan 91,811 4,239 96,050 7,684

17-Feb 106,691 7,674 114,365 9,149

17-Mar 129,266 6,819 136,085 10,887

17-Apr 144,747 5,941 150,688 12,055

17-May 152,799 2,977 155,776 12,462

17-Jun 159,392 2,113 161,505 12,920

17-Jul 164,863 2,424 167,287 13,383

17-Aug 173,292 4,644 177,936 14,235

17-Sep 177,049 14,210 191,259 15,301

17-Oct 187,304 15,702 203,006 16,240

17-Nov 194,681 13,117 207,798 16,624

17-Dec 199,318 10,729 210,047 16,804

3 Year Average 85,083 4,598 89,681 7,175

Source: CME Group

Based on the above analysis, it is estimated that the deliverable supply for the Copper Futures contract to 

be 7,175 futures contract equivalents based on the average total inventory in the Exchange approved 

warehouses during the most recent three (3) year period. The proposed spot month position limit of 1,500 

contracts represents approximately 20.90% of deliverable supply at Exchange approved warehouses 

during the most recent three (3) year period. 

The Exchange reviewed the designated contract market core principles (“Core Principles”) as set forth in 

the Commodity Exchange Act (“Act”) and identified that the amendments to the Table may have some 

bearing on the following Core Principle:

Contracts Not Readily Subject to Manipulation: The Contracts are not readily subject to manipulation 

due to the deep liquidity and robustness in the underlying physical markets.

Position Limitations or Accountability: The speculative position limits for the Contracts as demonstrated 

in this submission are consistent with the Commission’s guidance.

Availability of General Information: The Exchange will make publicly available the details of the spot 

month position limit increases by publishing a Market Surveillance Notice (“MSN”) to the market. The 

MSN will also be available on CME Group’s website.

The Exchange certifies that the amendments to the Table comply with the Act and regulations thereunder. 

There were no opposing views to the amendments to Chapter 5.

The Exchange certifies that this submission has been concurrently posted on the Exchange’s website at

http://www.cmegroup.com/market-regulation/rule-filings.html.
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 299 2299 christopher.bowen@cmegroup.com cmegroup.com

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Should you have any questions concerning the above, please contact the undersigned at 212-299-2200 or

via e-mail at CMEGSubmissionInquiry@cmegroup.com.

Sincerely,

/s/ Christopher Bowen

Managing Director and Chief Regulatory Counsel

Attachment: Exhibit A – Amendments to COMEX Rulebook Chapter 5 Position Limit, Position 

Accountability, and Reportable Level Table
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Exhibit A

COMEX Rulebook Chapter 5 Position Limit, Position Accountability, and 

Reportable Level Table

(under separate cover)

(blackline format)