99-4548. Proposed Amendments to the Contract Size and Other Provisions of the Chicago Mercantile Exchange Random Lengths Lumber Futures Contract, Submitted Under Fast Track Review Procedures

[Federal Register Volume 64, Number 36 (Wednesday, February 24, 1999)]
[Notices]
[Page 9129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-4548]


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COMMODITY FUTURES TRADING COMMISSION


Proposed Amendments to the Contract Size and Other Provisions of 
the Chicago Mercantile Exchange Random Lengths Lumber Futures Contract, 
Submitted Under Fast Track Review Procedures

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of availability of proposed contract market rule 
amendments.

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SUMMARY: The Chicago Mercantile Exchange (CME or Exchange) has proposed 
amendments to the random lengths lumber futures contract to change the 
contract size to 110,000 board feet from 80,000 board feet. Under the 
proposal, the deliverable unit will range from 105,000 to 115,000 board 
feet. The speculative position limits also would be decreased in 
proportion to the increased size of the trading unit. The proposals 
were submitted under the Commission's 45-day fast track procedures. The 
Acting Director of the Division of Economic Analysis (Division) of the 
Commission, acting pursuant to the authority delegated by Commission 
Regulation 140.96, has determined that the proposals are of major 
economic significance, and that publication for comment is in the 
public interest, will assist the Commission in considering the views of 
interested persons, and is consistent with the purpose of the Commodity 
Exchange Act.\1\

    \1\ Section 5a(a)(12) of the Act, which requires the Commission 
to publish proposed rules of ``major economic significance,'' does 
not define the meaning of the term. Moreover, section 5a(a)(12) 
provides that the Commission's determination that proposed exchange 
rules are of major economic significance under the section if final 
and not subject to judicial review. The Commission staff has 
interpreted the meaning of ``major economic significance'' broadly 
as proposed rules which may have an effect on the pricing of a 
contract, on the value of existing contracts, on a contract's 
hedging or price basing utility, or on deliverable supplies. Section 
5a(a)(12) does not define rules of ``major economic significance'' 
based upon a specific dollar impact on the economy or other such 
measures used in other statutes, such as those used in determining 
whether an agency rule is a ``major rule'' under 5 U.S.C. section 
804(2).
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DATES: Comments must be received on or before March 11, 1999.

ADDRESSES: Interested persons should submit their views and comments to 
Jean A. Webb, Secretary, Commodity Futures Trading Commission, Three 
Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581. In 
addition, comments may be sent by a facsimile transmission to facsimile 
number [phone], or by electronic mail to [e-mail]. 
Reference should be made to the amendments to the CME random lengths 
lumber futures contract.

FOR FURTHER INFORMATION CONTACT: Please contact John Forkkio of the 
Division of Economic Analysis, Commodity Futures Trading Commission, 
Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581, 
telephone [phone]. Facsimile number: [phone]. Electronic 
mail: [e-mail]

SUPPLEMENTARY INFORMATION: The CME justified the proposal by noting 
that:

    . . . railcars from 70 feet to 73 feet in length are now the 
majority (51.7%) of all railcars used in originating shipments of 
lumber from western areas. These railcars have a loading capacity 
ranging from 110,000 bf to 115,000 bf. It is reported by the 
carriers that railcars of this size are the only cars being built 
because smaller cars are more costly to load and haul on a per-pound 
basis. The current trading unit of 80,000 bf [board feet] is shipped 
on the smallest cars of 78,000 -92,000 bf loading capacity. The 
smallest cars are a declining portion of the railcar fleet in both 
absolute and relative terms.
    Allowing deliveries to be made in a range of 105,000 to 115,000 
bf will permit shipments to be made on railcars that are between 67 
feet and 73 feet in length. These cars make up an estimated 59% of 
the railcar population used in hauling lumber. The largest cars (73 
feet) are estimated to be 46.5% of this population. The variation 
allowed in the delivered unit is less than 5% of the total trading 
unit. Mills will have some flexibility in meeting their 
transportation needs with this variation.
    The speculative position limits have been lowered to account for 
the increased size of the trading unit. On a total board-foot basis, 
the position limits are unchanged.

    The CME proposes to implement the amendments for application to 
newly listed contracts only. The first month to be affected is the 
January 2000 contract month.
    The Division requests comment on the extent to which the proposed 
changes to the random length lumber futures contract reflect current 
and expected cash market practices.
    The proposed amendments were submitted pursuant to the Commission's 
fast tract procedures for streamlining the review of futures contract 
rule amendments and new contract approvals (62 FR 10434). Under those 
procedures, the proposals, absent any contract action by the 
Commission, may be deemed approved at the close of business on March 
25, 1999, 45 days after receipt of the proposals. In view of the 
limited review period provided under the fast track procedures, the 
Commission has determined to publish for public comment notice of the 
availability of the terms and conditions for 15 days, rather than 30 
days as provided for proposals submitted under the regular review 
procedures.
    Copies of the proposed amendments will be available for inspection 
at the Office of the Secretariat, Commodity Futures Trading Commission, 
Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581. 
Copies can be obtained through the Office of the Secretariat by mail at 
the above address, by phone at [phone], or via the internet on 
the CFTC website at www.cftc.gov under ``What's New & Pending''.
    Other materials submitted by the CME in support of the proposals 
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 (1997)), 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 proposals, or with respect to other materials 
submitted by the CME, should send such comments to Jean A. Webb, 
Secretary, Commodity Futures Trading Commission, Three Lafayette 
Centre, 1155 21st Street NW, Washington, DC 10581 by the specified 
date.

    Issued in Washington, DC, on February 18, 1999.
John R. Mielke,
Acting Director.
[FR Doc. 99-4548 Filed 2-23-99; 8:45 am]
BILLING CODE 6351-01-M