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CFTC Amends Large Trader Reporting Rules

CFTC Amends Large Trader Reporting Rules

The Commodity Futures Trading Commission has amended its large trader reporting rules, raising the number of open interest transactions for firms to qualify as large traders whose positions must be reported to the CFTC. The final rule, published in the Federal Register Dec. 21 (p. 76392), covers a laundry list of indexes and commodities, including natural gas.

For natural gas, the lower bar was raised from 175 contracts to 200 contracts for companies to qualify as large traders with reportable positions. The CFTC said the new rule, which basically follows on the proposed rule issued May of this year, will reduce the reporting burden for companies, while still ensuring that the commission receives enough information for adequate monitoring and surveillance of the market.

The CFTC noted the rules change, to be effective Jan. 20, 2005, will impact the reports provided by the commission on its Commitments of Traders (COT) report. The COT data provides a breakdown of each Tuesday's open interest for markets in which 20 or more traders hold positions that equal or exceed commission-set contract reporting levels. COT reports categorize positions as reportable or nonreportable, and provide additional information for reportable positions. "The raised contract reporting levels alter the number of reportable positions and the information that is provided on such positions in COT reports. Persons that rely on COT reports should be aware of the impact of the raised contract reporting levels," the CFTC said.

In addition, in recognition of new types of trades off the centralized market, the commission will allow reporting firms to group together exchange for futures (EFP), exchange for swaps, and exchange of futures for options and report all in the same manner they previously reported EFPs. This will not include block trades.

A copy of the rules may be obtained by accessing the commission's web site at www.cftc.gov.

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