Yesterday the CFTC got a surprise when Phillip McBride Johnson wrote the commission a funny response to one of their requests for comment.
Both the CFTC and the SEC regularly request comments from traders about issues currently up for debate. In this case, the CFTC wants to hear from traders about new Dodd-Frank regulations.
Usually traders’ comments are direct replies to the question (click here to download an example).
But then the CFTC asked traders and lawyers like Johnson, who heads the exchange traded commodities, futures and derivative products practice group at Skadden, Arps, Slate, Meagher & Flom, for help on this doozy:
The CFTC is charged with proposing rules to implement new statutory provisions enacted by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). The Dodd-Frank Act provides that swaps in an “agricultural commodity” (as defined by the Commission) are prohibited unless entered into pursuant to a rule, regulation or order of the Commission adopted pursuant to section 4(c) of the (“CEA” or”Act”). This advance notice of proposed rulemaking (“ANPRM”), requests comment on the appropriate conditions, restrictions or protections to be included in any such rule, regulation or order governing the trading of agricultural swaps.
So far, Johnson is the only man to reply.
Read his reponse below. Props to Emily Lambert at Forbes for finding this.
From: Philip McBride Johnson
Submit Date: 10/18/2010
From: Johnson, Philip McBride
Sent: Friday, October 15, 2010 9:56 AM
Cc: Heitman, Donald H.
Subject: Agricultural commodity definition
First, let me request a waiver of the “English-only” requirement, Thanks.
To me, there is a natural link between §723(c)(3) of the Dodd-Frank Act (definition of “agricultural commodity”) and §5c(5)(C) of the Commodity Exchange Act (instruments “contrary to the public interest”). In the latter provision, the Commodity Futures Trading Commission (“Commission”) is authorise to forbid the listing of certain products if it concludes that they relate to matters that are abhorrent to American sensibilities (e.g., wars, terrorism, assassinations, etc.).
Like every U.S. citizen, there are certain agricultural commodities that are abhorrent to me. Without prejudice to the right of other commenters to identify the foods that they most loathe, I recommend that the definition of “agricultural commodity” make clear that (like movie box office receipts and onions) the following are not “commodities” at all, perhaps by simultaneously revising §1a(9) of the Commodity Exchange Act accordingly:
any kind of duck except foie gras
anything in a bottle called a “sports drink”
clams (well, OK, if I don’t have to watch)
anything labelled as “cod”
artichokes (well, OK, if I don’t have to watch)
anything with curry in it
I truly hope that the Commission does not waste this rare opportunity to rid the world of these dreadful excuses for agricultural commodities, and I appreciate this opportunity to contribute to the Public Good.
The CFTC must love this guy. This is probably the most fun they’ve had all week.
If you want to take Johnson up on his invitation to commenters to identify the foods you loathe, the CFTC’s question is open until October 28. Submit your comment here.