Report of the 

Ag-OI Subcommittee:

Efficient and Effective Oversight of Changes to 

Agricultural Futures Contracts with Open Interest

Joseph Janzen, Subcommittee Chair, 

University of Illinois

Presentation to Meeting of the CFTC 

Agricultural Advisory Committee

June 9, 2021
Weighing Tradeoffs in 

Market Oversight

Exchanges, market participants, and 

the Commission seek:

• Timely implementation of 

changes to generate and 

achieve regulatory compliance 

• Avoidance of material impact on 

existing position holders

2
What types of 

contract 

changes?

• Exchanges and market 

participants typically 

identify need for change 

• Exchanges submit 

contract amendments to 

CFTC for approval except 

in limited cases

Subcommittee Report to Ag Advisory Committee 3
Challenge:

Significant open 

interest in 

deferred months

Subcommittee Report to Ag Advisory Committee

4
Subcommittee Objectives

Maintain focus on Commission policy and procedure

Make consensus-based recommendations

Be forward-looking, but guided by past experience

Improve market quality and mitigate risk to all parties

Subcommittee Report to Ag Advisory Committee 5
Subcommittee 

Activities

• Convened representative group of 

agricultural futures market 

participants

• Emphasis on commodity 

representation and commercial 

participants active in the delivery 

process

• Seven meetings via teleconference

• Input solicited via group discussion, 

surveys, and informal votes

• Report adopted by formal 20-0 vote 

on April 21, 2021

Subcommittee Report to Ag Advisory Committee 6

Subcommitte

e approved 

Notice 

published in 

Fed. Register

Informational 

meetings

Initial survey 

and 

discussion

Draft report 

circulated

Revised 

recommenda

tions 

circulated

Concluding 

deliberations

Final report 

adopted

Report 

presented to 

AAC

Sep 2020

Nov 2020

Jan 2021

Mar 2021

May 2021

Jul 2021
Highlights of Findings

Subcommittee finds that: • Current process for amending contracts 

works well 

• Commission engagement before and 

after submission is beneficial

• Defining materiality would be overly 

prescriptive, incompatible with 

principles-based regulation

• Existing guidance useful but requires 

updating to remain relevant

7
Recommendations 1-4

Transparency and Public Engagement

Subcommittee Report to Ag Advisory Committee 8

Provide information on 

enumerated contracts and 

past determinations

Systematically engage with 

market participants, define 

conditions for soliciting 

formal public comment

Develop guidance/policy 

for Commission dialogue 

prior to and following 

formal submission

Update risk disclosures to 

build awareness of 

potential changes
Recommendations 5-6

Effective Evaluation of Proposed Changes

Maintain principles-based approach, concentrate attention on changes 

more likely to be material

Continually improve guidance to reflect current market conditions and 

contract specifications, such as the use of self-adjusting contract 

terms

Subcommittee Report to Ag Advisory Committee 9
10

Summary Findings & 

Recommendations

“The Subcommittee finds that the 

current process for amending 

agricultural futures contracts 

works well to foster compliance 

with core principles, align contract 

terms to common commercial 

trading practices, and weigh 

interests of exchanges and market 

participants.”

I. Increase Transparency in Market Oversight

• Enumerated Contract List

• Past Materiality Determinations

II. Public Engagement

• More Consistent and Systematic Engagement

• Defined Conditions for Soliciting Public Comment

• Develop Guidance/Staff Policy on Dialogue Leading 

to Contract Changes

• Update Risk Disclosures; Increase Awareness about 

Potential for Contract Amendments

III. Effective Evaluation of Proposed Changes

• Find Some Changes are More Relevant to Price 

Determination

• Concentrate Staff Attention on Material Changes

• Continuously Improve Staff Policy and Guidance