Washington, D.C. — Commodity Futures Trading Commission Chairman Heath P. Tarbert announced today that the Commission is accepting nominations for a Subcommittee to evaluate Commission policy with respect to the implementation of amendments to enumerated agricultural futures contracts with open interest (Ag-OI Subcommittee) under the CFTC’s Agricultural Advisory Committee (AAC). Chairman Tarbert, sponsor of the AAC, is seeking nominations for membership on the Ag-OI Subcommittee through a formal request in the Federal Register. The deadline for submissions is October 29, 2020.
“I’m pleased to form this Ag-OI Subcommittee as a manifestation of the CFTC’s core value of clarity, providing transparency to market participants about our rules and processes,” said Chairman Heath P. Tarbert. “I look forward to drawing upon the expertise of a broad group of market participants in the agriculture community to bolster the level of transparency in the execution of the CFTC’s statutory requirement to approve amendments to agricultural futures contracts.”
The Commission established the Ag-OI Subcommittee to provide a report to the AAC that will advise the Commission in the exercise of its statutory duty with respect to an exchange’s implementation plan for amendments to enumerated agricultural futures contracts with open interest, such as:
- How changes to terms or conditions of futures contracts impact the value of existing positions;
- How the exchanges should assess market conditions in deciding, announcing, or implementing amendments; and
- The scheduling of effective dates for futures contract amendments.
Enumerated agricultural commodities are listed in Section 1a(9) of the Commodity Exchange Act. Agricultural commodities with currently listed futures contracts are: wheat, cotton, rice, corn, oats, butter, fats and oils (including soybean oil, and all other fats and oils), soybeans, soybean meal, livestock, livestock products, and frozen concentrated orange juice. Recent history suggests Commission guidance on these issues may help exchanges limit risks to market participants and themselves. Exchange staff requested Commission input on this issue.
Within this charge, the Ag-OI Subcommittee may consider, but is not limited to, the following issues and topics:
- Evaluate the Commodity Exchange Act, regulations, and guidance pertaining to Designated Contract Market (DCM) requests for Commission approval of amendments to enumerated agricultural futures contracts with open interest;
- Evaluate recently approved amendments to futures contracts, including the term or condition amended, ability of that term or condition to impact the economic value of futures positions, rationale provided by the DCM, date announced, and date implemented;
- Identify terms and conditions that could impact the economic value of futures positions, what the Commission should consider in terms of evaluating the implementation plans for those amendments, and whether there could be best practices developed for implementation of any amendments to those terms or conditions; and
- Identify appropriate methods to make market participants and the public aware of the potential for an enumerated agricultural futures contract with open interest to be amended.
Chairman Tarbert invites members of the public to nominate individuals, who may or may not currently serve on the AAC, for membership on the Ag-OI Subcommittee. Self-nominations are also acceptable. See the Federal Register Notice for instructions on nomination submissions.