35372 Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Proposed Rules 

1 17 CFR 145.9. 

2See Dodd-Frank Wall Street Reform and 

Consumer Protection Act, Public Law 111–203, 124 

Stat. 1376 (2010). 

3 7 U.S.C. 1 et seq. 

Meeting Procedures 

(a) The meetings will be informal in 

nature and will be conducted by one or 

more representatives of the FAA 

Western Service Area. A representative 

from the FAA will present a briefing on 

the planned Class B airspace area 

modification. Each participant will be 

given an opportunity to deliver 

comments or make a presentation, 

although a time limit may be imposed. 

Only comments concerning the plan to 

modify the Las Vegas Class B airspace 

will be accepted. 

(b) The meetings will be open to all 

persons on a space-available basis. 

There will be no admission fee or other 

charge to attend and participate. 

(c) Any person wishing to make a 

presentation to the FAA panel will be 

asked to sign in and estimate the 

amount of time needed for such 

presentation. This will permit the panel 

to allocate an appropriate amount of 

time for each presenter. These meetings 

will not be adjourned until everyone on 

the list has had an opportunity to 

address the panel. 

(d) Position papers or other handout 

material relating to the substance of 

these meetings will be accepted. 

Participants wishing to submit handout 

material should present an original and 

two copies (3 copies total) to the 

presiding officer. There should be 

additional copies of each handout 

available for other attendees. 

(e) These meetings will not be 

formally recorded. However, a summary 

of comments made at the meetings will 

be filed in the docket. 

Agenda for the Meetings 

—Sign-in. 

—Presentation of Meeting Procedures. 

—Informal Presentation of the planned 

Class B Airspace area modification. 

—Public Presentations and Discussions. 

—Closing Comments. 

Issued in Washington, DC, on June 13, 

2011. 

Gary A. Norek, 

Acting Manager, Airspace, Regulations and 

ATC Procedures Group. 

[FR Doc. 2011–15107 Filed 6–16–11; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Chapter 1 

Effective Date for Swap Regulation 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice of proposed order and 

request for comment. 

SUMMARY: Pursuant to section 754 of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (‘‘Dodd-Frank 

Act’’), the general effective date for 

certain provisions of subtitle A of title 

VII of the Dodd-Frank Act (‘‘Title VII’’) 

that do not require a rulemaking is 360 

days after enactment, or July 16, 2011, 

unless another effective date is 

specifically provided. Following the 

general effective date, market 

participants may be subject to certain 

Commodity Exchange Act (‘‘CEA’’ or 

‘‘Act’’) requirements but not others. To 

provide greater clarity regarding the 

applicability of various statutory and 

regulatory requirements, the Commodity 

Futures Trading Commission (‘‘CFTC’’ 

or the ‘‘Commission’’) is proposing to 

grant, pursuant to its section 4(c) 

exemptive authority, temporary relief in 

two parts with respect to various 

requirements of the CEA that apply or 

may apply to certain agreements, 

contracts, and transactions. In part one, 

the Commission is proposing to 

temporarily exempt persons or entities 

with respect to provisions of the CEA 

added or amended by the Dodd-Frank 

Act that reference one or more terms 

regarding entities or instruments that 

Title VII requires be ‘‘further defined,’’ 

such as the terms ‘‘swap,’’ ‘‘swap 

dealer,’’ ‘‘major swap participant,’’ or 

‘‘eligible contract participant,’’ to the 

extent that requirements or portions of 

such provisions specifically relate to 

such referenced terms. In part two, the 

Commission is proposing to grant relief 

from certain provisions of the CEA that 

will or may apply to certain agreements, 

contracts, and transactions in exempt or 

excluded commodities as a result of the 

repeal of various CEA exemptions and 

exclusions as of July 16, 2011. 

DATES: Comments must be received on 

or before July 1, 2011. 

ADDRESSES: Comments may be 

submitted, referenced as ‘‘Effective 

Dates,’’ by any of the following 

methods: 

• Agency Web site, via its Comments 

Online process: http:// 

comments.cftc.gov. Follow the 

instructions for submitting comments 

through the Web site. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Send to David A. Stawick, 

Secretary, Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. 

• Courier: Same as mail above. 

Please submit your comments using 

only one method. ‘‘Effective Dates’’ 

must be in the subject field of responses 

submitted via e-mail, and clearly 

indicated on written submissions. All 

comments must be submitted in 

English, or if not, accompanied by an 

English translation. Comments will be 

posted as received to http:// 

www.cftc.gov. You should submit only 

information that you wish to make 

available publicly. If you wish the CFTC 

to consider information that you believe 

is exempt from disclosure under the 

Freedom of Information Act, a petition 

for confidential treatment of the exempt 

information may be submitted according 

to the procedures established in section 

145.9 of the CFTC’s regulations.1

The CFTC reserves the right, but shall 

have no obligation, to review, prescreen, filter, redact, refuse or remove 

any or all of your submission from 

http://www.cftc.gov that it may deem to 

be inappropriate for publication, 

including obscene language. All 

submissions that have been redacted or 

removed that contain comments on the 

merits of this action will be retained in 

the public comment file and will be 

considered as required under the 

Administrative Procedure Act and other 

applicable laws, and may be accessible 

under the Freedom of Information Act. 

FOR FURTHER INFORMATION CONTACT: 

Terry Arbit, Deputy General Counsel, 

202–418–5120, tarbit@cftc.gov, or 

Harold Hardman, Deputy General 

Counsel, 202–418–5120, 

hhardman@cftc.gov, Office of the 

General Counsel, or Steven Kane, 

Consultant, 202–418–5911, 

skane@cftc.gov, Office of the Chief 

Economist, Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1151 21st Street, NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

On July 21, 2010, President Obama 

signed the Dodd-Frank Act.2 Title VII of 

the Dodd-Frank Act amends the CEA 3

to establish a comprehensive new 

regulatory framework for swaps. The 

legislation was enacted to reduce risk, 

increase transparency, and promote 

market integrity within the financial 

system by, among other things: (1) 

Providing for the registration and 

comprehensive regulation of swap 

dealers and major swap participants; (2) 

imposing clearing and trade execution 

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Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Proposed Rules 35373 

4Subtitle A of Title VII contains two parts. Part 

I, entitled ‘‘Regulatory Authority,’’ consists of 

sections 711–720; part II, entitled ‘‘Regulation of 

Swap Markets,’’ consists of sections 721–754. 

Subtitle B of Title VII is entitled ‘‘Regulation of 

Security-Based Swap Markets,’’ and consists of 

sections 761–774. References to ‘‘Title VII’’ in this 

Release shall include only subtitle A of Title VII. 

5See Reopening and Extension of Comment 

Periods for Rulemakings Implementing the DoddFrank Wall Street Reform and Consumer Protection 

Act, 76 FR 25274, May 4, 2011. 

6The Commission has noted its ability to phase 

in implementation of the new requirements based 

on factors such as: The type of swap, including by 

asset class; the type of market participants that 

engage in such trades; the speed with which market 

infrastructures can meet the new requirements; and 

whether registered market infrastructures or 

participants might be required to have policies and 

procedures in place ahead of compliance with such 

policies and procedures by non-registrants. http:// 

www.cftc.gov/ucm/groups/public/@newsroom/ 

documents/file/staffconcepts050211.pdf. 

7Section 712(d) provides: ‘‘Notwithstanding any 

other provision of this title and subsections (b) and 

(c), the Commodity Futures Trading Commission 

and the Securities and Exchange Commission, in 

consultation with the Board of Governors [of the 

Federal Reserve System], shall further define the 

terms ‘swap’, ‘security-based swap’, ‘swap dealer’, 

‘security-based swap dealer’, ‘major swap 

participant’, ‘major security-based swap 

participant’, and ‘security-based swap agreement’ in 

section 1a(47)(A)(v) of the Commodity Exchange 

Act (7 U.S.C. 1a(47)(A)(v)) and section 3(a)(78) of 

the Securities Exchange Act of 1934 (15 U.S.C. 

78c(a)(78)).’’ 

8Section 721(c) provides: ‘‘To include 

transactions and entities that have been structured 

to evade this subtitle (or an amendment made by 

this subtitle), the Commodity Futures Trading 

Commission shall adopt a rule to further define the 

terms ‘swap’, ‘swap dealer’, ‘major swap 

participant’, and ‘eligible contract participant’.’’ 

9See Further Definition of ‘‘Swap Dealer,’’ 

‘‘Security-Based Swap Dealer,’’ ‘‘Major Swap 

Participant,’’ ‘‘Major Security-Based Swap 

Participant’’ and ‘‘Eligible Contract Participant,’’ 75 

FR 80174, Dec. 21, 2010 (‘‘Entity Definitions’’) and 

Further Definition of ‘‘Swap,’’ ‘‘Security-Based 

Swap,’’ and ‘‘Security-Based Swap Agreement’’; 

Mixed Swaps; Security-Based Swap Agreement 

Recordkeeping, 76 FR 29818, May 23, 2011. 

10See Notice Regarding the Treatment of Petitions 

Seeking Grandfather Relief for Trading Activity 

Done in Reliance Upon Section 2(h)(1)–(2) of the 

Commodity Exchange Act, 75 FR 56512, 56513, 

Sept. 16, 2010 (‘‘Grandfather Notice’’). 

11 7 U.S.C. 6(c). 

12 7 U.S.C. 6s(a), 6s(e) and 6s(h), respectively. 

requirements on standardized derivative 

products; (3) creating robust 

recordkeeping and real-time reporting 

regimes; and (4) enhancing the 

rulemaking and enforcement authorities 

of the Commission with respect to, 

among others, all registered entities and 

intermediaries subject to the 

Commission’s oversight. Title VII also 

includes amendments to the Federal 

securities laws to establish a similar 

regulatory framework for security-based 

swaps under the authority of the 

Securities and Exchange Commission 

(‘‘SEC’’). 

Section 754 of the Dodd-Frank Act 

provides that, unless otherwise 

provided, the provisions of subtitle A of 

Title VII 4 ‘‘shall take effect on the later 

of 360 days after the date of the 

enactment of this subtitle or, to the 

extent a provision of this subtitle 

requires a rulemaking, not less than 60 

days after publication of the final rule 

or regulation implementing such 

provisions of this subtitle.’’ The date 

360 days after the date of enactment is 

July 16, 2011. 

To implement the Dodd-Frank Act, 

the Commission has to-date issued 53 

advance notices of proposed rulemaking 

or notices of proposed rulemaking, two 

interim final rules, one final rule, and 

one proposed interpretive order. The 

regulatory requirements that have been 

proposed by the Commission present a 

substantially complete mosaic of the 

Commission’s proposed regulatory 

framework under Title VII. In light of 

this substantially complete mosaic, the 

Commission reopened or extended the 

comment period of many of its proposed 

rulemakings in order to provide the 

public with an additional opportunity to 

comment on the proposed new 

regulatory framework for swaps, either 

in part or as a whole.5 The extended 

comment period closed on June 3, 2011. 

The Commission also has solicited 

public comments on phasing of rule 

implementation (i.e., identifying which 

requirements can be met sooner and 

which ones will take more time).6

II. Background and Discussion 

Section 712(d)(1) of the Dodd-Frank 

Act requires the Commission and the 

SEC to further define certain terms used 

in Title VII, including the terms ‘‘swap,’’ 

‘‘swap dealer,’’ ‘‘major swap 

participant,’’ and ‘‘eligible contract 

participant.’’ 7 Section 721(c) requires 

the Commission to adopt a rule to 

further define the terms ‘‘swap,’’ ‘‘swap 

dealer,’’ ‘‘major swap participant,’’ and 

‘‘eligible contract participant’’ to 

prevent evasion of statutory and 

regulatory obligations.8 The 

Commission has issued two notices of 

proposed rulemaking that address these 

definitions.9

The Commission’s final rulemakings 

further defining the terms in sections 

712(d) and 721(c) will not be in place 

as of July 16, 2011. Consequently, 

concerns have been raised about effects 

upon the swaps market during the 

period between July 16, 2011 and prior 

to the date(s) that those rulemakings 

have been completed. The Commission 

is proposing this relief to address these 

concerns and provide clarity to market 

participants upon the general effective 

date of the Dodd-Frank Act. The 

Commission reiterates its intent to 

‘‘strive to ensure that current practices 

will not be unduly disrupted during the 

transition to the new regulatory 

regime.’’ 10

Section 712(f) of the Dodd-Frank Act 

authorizes the Commission to 

‘‘promulgate rules, regulations, or orders 

permitted by this [Dodd-Frank] Act,’’ 

conduct studies and prepare reports, 

register persons, and ‘‘exempt persons, 

agreements, contracts, or transactions 

from the provisions of the Act, under 

the terms contained in this Act,’’ in 

order to prepare for the effective dates 

of the provisions of Title VII. Section 

4(c) of the CEA, as amended by the 

Dodd-Frank Act, provides the 

Commission with authority to exempt 

certain agreements, contracts, and 

transactions that may otherwise be 

subject to the CEA from various 

provisions of the CEA.11

The provisions of Title VII can be 

grouped into 4 major categories: 

(1) Provisions that require a rulemaking 

(for which relief is not being proposed); 

(2) self-effectuating provisions that 

reference terms that require further 

definition; (3) self-effectuating 

provisions that do not reference terms 

that require further definition and that 

repeal provisions of current law; and (4) 

self-effectuating provisions for which 

relief is not being proposed. 

Section 754 specifies that unless 

otherwise provided in Title VII, 

provisions requiring a rulemaking 

become effective ‘‘not less than 60 days 

after publication of the final rule’’ (but 

not before July 16, 2011). Category 1 

provisions, therefore, are not selfeffectuating. A significant number of the 

Title VII provisions fall into this 

category. Examples of such provisions 

in Category 1 include new CEA section 

4s(a) (governing registration of swap 

dealers and major swap participants), 

new CEA section 4s(e) (governing 

capital and margin requirements for 

swap dealers and major swap 

participants), and new CEA section 

4s(h) (external business conduct 

standards for swap dealers and major 

swap participants).12 The requirements 

in these provisions of the CEA will not 

become effective, at a minimum, until 

60 days after publication of a final 

Commission rule (and not before July 

16, 2011). 

Because these provisions are not selfeffectuating as of July 16, 2011, it is not 

necessary to provide relief with respect 

to Category 1 provisions as of July 16, 

and they are outside the scope of the 

proposed order. Similarly, Category 4 

provisions also are outside the scope of 

the proposed order, and will go into 

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35374 Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Proposed Rules 

13Examples of Category 4 provisions include new 

CEA section 5b(c)(2), 7 U.S.C. 7a–1(c)(2) (core 

principles for derivatives clearing organizations 

(‘‘DCOs’’)); new CEA section 5(d), 7 U.S.C. 7(d) 

(core principles for designated contract markets); 

and new CEA sections 4c(a)(5)–(6), 7 U.S.C. 

6c(a)(5)–(6) (certain anti-disruptive practices 

authority). To the extent that the Commission has 

issued proposed rulemakings to implement any 

Category 4 provisions, any requirements or 

guidance in such rulemakings will not become 

effective until the effective date of a final 

rulemaking. 

In two cases, a Category 4 provision that amends 

the CEA references a term that requires further 

definition, but nevertheless, the Commission does 

not believe that it is appropriate to include the 

provision in the proposed order. These provisions 

are new CEA section 5b(g), 7 U.S.C. 7a–1(g) 

(depository institutions and SEC-registered clearing 

agencies clearing swaps prior to enactment are 

‘‘deemed to be registered’’ as DCOs); and amended 

CEA section 22(a), 7 U.S.C. 25(a) (private right of 

action with respect to swaps). 

There also are provisions in Category 4 that 

reference a term that requires further definition, but 

that do not amend the CEA and thus are outside the 

scope of the Commission’s exemptive authority 

under CEA Section 4(c). Such provisions in Title 

VII include, for example: (1) Section 711 and much 

of section 712 (provisions regarding certain 

definitions and regulatory authority of CFTC and 

SEC); and (2) sections 724(b) and 725(g) (amending 

the Bankruptcy Code and the Legal Certainty for 

Bank Products Act of 2000, respectively). 

14See, e.g., Futures Industry Association, Petition 

for Exemption Pursuant to Section 4(c) of the 

Commodity Exchange Act (June 1, 2011) (requesting 

that the Commission ‘‘adopt an order pursuant to 

section 4(c) of the [CEA] exempting such Clearing 

Members from the requirements of section 4d(f) of 

the CEA, as added by section 724 of [the DoddFrank Act], for a period of not less than 30 calendar 

days, beginning July 16, 2011, the effective date of 

many provisions of the Dodd-Frank Act, and ending 

not before August 15, 2011’’) (footnote omitted). 

New CEA section 4d(f), 7 U.S.C. 7d(f), falls within 

Category 2 discussed above. 

See also (1) Futures Industry Association, 

Institute of International Bankers, International 

Swaps and Derivatives Association, Investment 

Company Institute, Securities Industry and 

Financial Markets Association, and U.S. Chamber of 

Commerce, Request for Clarification and Relief 

Under Sections 754 and 739 of the Dodd-Frank 

Wall Street Reform and Consumer Protection Act; 

Petition for Exemption Pursuant to Section 4(c) of 

the Commodity Exchange Act, (June 10, 2011); (2) 

The Financial Services Roundtable, Letter re. 

Automatically Effective Provisions under Title VII 

of the Dodd-Frank Act, Application for Exemption 

Pursuant to Section 4(c) of the Commodity 

Exchange Act and Section 712(f) Pending 

Effectiveness of Final Rulemaking (June 10, 2011); 

(3) National Grain and Feed Association, Letter re. 

Status of Options on Agricultural Commodities 

Entered Into After July 16, 2011 (June 7, 2011); and 

(4) Paul Pantano on behalf of Commodity Options 

and Agricultural Swaps Working Group, Letter re. 

Transition Exemption for Options on Agricultural 

Commodities Entered Into After July 15, 2011 (June 

6, 2011). 15The Commission’s authority to provide 

exemptive relief under CEA section 4(c), as 

amended by section 721(d) of the Dodd-Frank Act, 

may not extend to certain Category 2 provisions of 

the Dodd-Frank Act and the CEA. These provisions 

include: new CEA section 4s(l), 7 U.S.C. 6s(l) 

(providing for swap dealer segregation requirements 

with respect to uncleared swaps); amended CEA 

section 5b(a), 7 U.S.C. 7a–1(a) (prohibiting a DCO 

from performing the functions of a DCO with 

respect to swaps unless the DCO is registered with 

the Commission); and new CEA section 4s(k), 7 

U.S.C. 6s(k) (providing for the duties and 

designation of a chief compliance officer for swap 

dealers and major swap participants). As such, 

these provisions will take effect on July 16, 2011, 

and may not be subject to the exemptive relief 

noted above granted by the Commission. The 

Commission staff has informed the Commission 

that it is separately considering whether to issue a 

no-action letter in which the staff would state that 

it would not recommend that the Commission 

commence an enforcement action against markets 

or market participants for failure to comply with the 

above-referenced provisions over a similar time 

period. 

16The Dodd-Frank Act amended the CEA’s antifraud and anti-manipulation provisions, including 

CEA section 4b, to cover ‘‘swaps.’’ Although these 

provisions therefore would, under the proposed 

relief, not apply to ‘‘swaps’’ under the Dodd-Frank 

Act because that term is subject to further 

definition, nevertheless, they will apply to all 

transactions other than ‘‘swaps’’ (including, but not 

limited to, futures contracts, options on futures 

contracts, transactions with retail customers in 

foreign currency or other commodities pursuant to 

CEA section 2(c)(2) (7 U.S.C. 2(c)(2)), and 

transactions subject to exemptive relief pursuant to 

part two of the proposed order). 

17See, e.g., section 737(d) of the Dodd-Frank Act 

(amendments regarding position limits effective on 

the date of enactment). Similarly, this relief would 

not affect the effective date of any provision that 

may become effective after July 16, 2011, such as 

section 716 of the Dodd-Frank Act. 

18Accordingly and by way of non-exclusive 

example, where a provision references both swaps 

and futures, this relief does not affect in any way 

the application of the provision (and any 

implementing Commission regulations thereunder) 

insofar as it refers to futures. 

effect on July 16, 2011.13 Lists of 

Category 1 and Category 4 provisions 

prepared by Commission staff will be 

published on the Commission’s Web 

site. 

The proposed relief discussed herein 

is considered in two parts, each 

addressing one of the remaining 

Categories noted above: (1) Category 2— 

provisions that are self-effectuating (i.e., 

do not require rulemaking) and 

reference terms that require further 

definition (i.e., ‘‘swap,’’ ‘‘swap dealer,’’ 

‘‘major swap participant,’’ or ‘‘eligible 

contract participant’’); and (2) Category 

3—provisions that are self-effectuating 

(i.e., do not require rulemaking) and 

repeal provisions of current law, but 

that do not reference terms that require 

further definition. These parts are 

discussed, in turn, in the sections that 

follow. 

A. Part One: Category 2—SelfEffectuating Provisions Referencing 

Terms That Require Further Definition 

Some provisions of Title VII that do 

not require a rulemaking and thus, 

under section 754, become effective on 

July 16, 2011, specifically reference the 

terms ‘‘swap,’’ ‘‘swap dealer,’’ ‘‘major 

swap participant,’’ or ‘‘eligible contract 

participant’’ (or other entities or 

instruments) which themselves are the 

subject of rulemakings for further 

definition under sections 712(d) and 

721(c) of the Dodd-Frank Act. As 

discussed above, the final rulemakings 

on these further definitions will not be 

in place by July 16, 2011. 

In response to requests from market 

participants for greater clarity regarding 

the applicability of various regulatory 

requirements to certain agreements, 

contracts, and transactions (referred to 

hereafter collectively as ‘‘transactions’’) 

following the general effective date,14

the Commission is proposing this 

temporary exemptive order pursuant to 

section 4(c) of the CEA. Specifically, for 

the Category 2 provisions described 

above, the Commission proposes to 

exempt persons and entities from the 

provisions of the CEA, as added or 

amended by the Dodd-Frank Act, that 

reference one or more of the terms 

regarding entities or instruments subject 

to further definition under sections 

712(d) and 721(c) of the Dodd-Frank 

Act, including the terms ‘‘swap,’’ ‘‘swap 

dealer,’’ ‘‘major swap participant,’’ or 

‘‘eligible contract participant.’’ 15 The 

proposed exemptive relief from such 

provisions would apply only with 

respect to those requirements or 

portions of such provisions that 

specifically relate to such referenced 

terms. 

This proposed relief would not in any 

way limit the Commission’s authority 

with respect to any person, entity, or 

transaction pursuant to CEA sections 

2(a)(1)(B), 4b, 4o, 6(c), 6(d), 6c, 8(a), 

9(a)(2), or 13, or the regulations of the 

Commission promulgated pursuant to 

such authorities, including CEA section 

4c(b) proscribing fraud.16 This relief 

would not apply to any provisions of 

Title VII and the CEA that have become 

effective prior to July 16, 2011 17 or 

Commission regulations already issued. 

Further, this relief would not affect any 

effective date set out in any specific 

Dodd-Frank Act rulemaking by the 

Commission. In addition, the proposed 

order would not limit the Commission’s 

authority under section 712(f) of the 

Dodd-Frank Act to issue rules, orders, or 

exemptions prior to the effective date of 

any provision, in order to prepare for 

the effective date of such provision, 

provided that such rule, order, or 

exemption shall not become effective 

prior to the effective date of the 

provision. Finally, this proposed order 

would not affect the applicability of any 

provision of the CEA to futures 

contracts or options on futures 

contracts.18

The proposed temporary exemptive 

relief would expire upon the earlier of: 

(1) The effective date of the applicable 

final rule further defining the relevant 

term; or (2) December 31, 2011. The 

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Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Proposed Rules 35375 

19The Commission adopted a similar approach in 

not granting ‘‘grandfather’’ relief with respect to 

transactions being conducted under CEA sections 

2(h)(1) and (2), 7 U.S.C, 2(h)(1) and (2): ‘‘Until the 

contents and timing of the Commission’s 

regulations affecting bilateral swaps are better 

known, however, the Commission has determined 

not to grant grandfather relief as it is impossible to 

know at this time whether such relief will be 

necessary.’’ See Grandfather Notice, 75 FR at 56513. 

20 7 U.S.C. 2(h). 

21 7 U.S.C. 7a–3. 

22 7 U.S.C. 2(d)(1). 

23The term ‘‘excluded commodity’’ is defined in 

CEA section 1a(13), 7 U.S.C. 1a(13), to include, 

among other things, financial instruments such as 

a currency, interest rate, or exchange rate, or any 

economic or commercial index based on prices, 

rates, values, or levels that are not within the 

control of any party to the transaction. 

24 7 U.S.C. 2(d)(2). 

25 7 U.S.C. 2(g). 

26 7 U.S.C. 2(h)(1)–(2). 

27The term ‘‘exempt commodity’’ is defined in 

CEA section 1a(14), 7 U.S.C. 1a(14), as a commodity 

other than an excluded or agricultural commodity, 

and includes energy and metals commodities. 

28 7 U.S.C. 2(h)(3)–(7). 

29The term ‘‘eligible commercial entity’’ is 

defined in CEA section 1a (11), 7 U.S.C. 1a(11). 

30 7 U.S.C. 7a–3. 

31 7 U.S.C. 2(e). 

32The parties covered under the ESP definition, 

while very broad, are not coextensive with those 

covered by the terms ‘‘ECE’’ or ‘‘eligible contract 

participant.’’ Therefore, it is possible that a small 

segment of persons or entities that are currently 

relying on one or more of the CEA exclusions or 

exemptions cited above might not qualify as an ESP 

and consequently would not be eligible for 

exemptive relief under part 35. 

33This condition was designed so that the 

exemption would not establish ‘‘a market in swap 

agreements, the terms of which are fixed and are 

not subject to negotiation that functions essentially 

in the same manner as an exchange but for the 

bilateral execution of transactions.’’ See Exemption 

for Certain Swap Agreements, 58 FR 5587, at 5590, 

Jan. 22, 1993. 

34By this condition, the exemption does not 

extend to transactions that are subject to a clearing 

system where the credit risk of individual members 

of the system to each other in a transaction to which 

each is a counterparty is effectively eliminated and 

Continued 

Commission is proposing to limit this 

proposed relief to no more than a fixed 

period—i.e. December 31, 2011—for 

several reasons. 

First, the Commission believes it 

appropriate and prudent to periodically 

review the extent and scope of any relief 

provided from the CEA, as amended by 

the Dodd-Frank Act. The Commission 

anticipates that additional rulemakings 

to implement the Dodd-Frank Act will 

be completed during this period of 

transitional relief. During this period the 

Commission also will be considering the 

appropriate phase-in of the various 

regulatory requirements under the 

Dodd-Frank rulemakings. Accordingly, 

the Commission believes it would be 

appropriate to periodically re-examine 

the scope and extent of the proposed 

exemptive relief in order to ensure that 

the scope of relief is appropriately 

tailored to the schedule of 

implementation of the Dodd-Frank Act 

requirements.19

Second, the limitation of this 

exemptive relief to no more than a fixed 

period of time is consistent with similar 

limitations on transitional relief 

provided by the Congress elsewhere in 

Title VII. Section 723(c) of the DoddFrank Act allows persons to submit 

petitions to the Commission ‘‘to remain 

subject to section 2(h) of the [CEA].’’ 20

In acting upon such petitions, the 

Commission may allow persons to 

‘‘continue operating subject to section 

2(h) [of the CEA] for not longer than a 

1-year period.’’ Similarly, section 734 

authorizes the Commission to grant 

petitions for persons to remain subject 

to the provisions of section 5d of the 

CEA governing the operation of exempt 

boards of trade (‘‘EBOTs’’) ‘‘for up to 1 

year after the effective date of this 

subtitle.’’ 21 In light of these provisions 

authorizing the Commission to provide 

transitional relief for no longer than a 

fixed period of time, the Commission 

believes it would be appropriate to 

provide transitional relief consistent 

with section 712(f) of the Dodd-Frank 

Act and CEA section 4(c) under this 

proposed order for no longer than a 

fixed time period. 

The Commission nonetheless 

reiterates its intent that existing 

practices should not be unduly 

disrupted during any transition period. 

Moreover, the Commission reiterates its 

intent to deliberatively and efficiently 

proceed to complete the rulemakings to 

implement the Dodd-Frank Act. In the 

event that a further definitions 

rulemaking is completed prior to 

December 31, 2011, the Commission 

will at that time address the appropriate 

phase-in and implementation dates of 

the resulting regulatory requirements. 

Alternatively, should the proposed 

order expire at the end of the fixed time 

period—December 31, 2011—such 

expiration will not affect the 

Commission’s ability to provide further 

relief, as appropriate, to avoid undue 

disruption or costs to market 

participants. 

B. Part Two: Category 3—Provisions 

That are Self-Effectuating and Repeal 

Provisions of Current Law But That Do 

Not Reference Terms That Require 

Further Definition 

Currently, the CEA includes 

provisions that exclude or exempt, in 

whole or in part, certain transactions 

from Commission oversight under the 

CEA. These are as follows: 

i. Section 2(d)(1),22 transactions in 

excluded commodities 23 between 

eligible contract participants and not 

executed or traded on a trading facility; 

ii. Section 2(d)(2),24 principal-toprincipal transactions in excluded 

commodities between certain eligible 

contract participants and executed or 

traded on an electronic trading facility; 

iii. Section 2(g),25 transactions subject 

to individual negotiation between 

eligible contract participants in 

commodities other than agricultural 

commodities and not executed or traded 

on a trading facility; 

iv. Sections 2(h)(1)–(2),26 transactions 

in exempt commodities 27 between 

eligible contract participants and not 

entered into on a trading facility; 

v. Sections 2(h)(3)–(7),28 principal-toprincipal transactions in exempt 

commodities between eligible 

commercial entities (‘‘ECEs’’) 29 and 

executed or traded on an electronic 

trading facility (called exempt 

commercial markets, or ‘‘ECMs’’); 

vi. Section 5d,30 transactions in 

commodities, among other things, 

having a nearly inexhaustible 

deliverable supply or no cash market, 

between eligible contract participants 

and traded on an EBOT; and 

vii. Section 2(e),31 which generally 

provides that nothing in the CEA 

governs or is applicable to an electronic 

trading facility that limits transactions 

authorized to be conducted on its 

facilities to those satisfying the 

requirements of sections 2(d)(2), 2(g) or 

2(h)(3). 

Under the Dodd-Frank Act, these 

provisions all will be removed from the 

CEA as of July 16, 2011. However, part 

35 of the Commission’s regulations will 

continue to be available with respect to 

transactions that meet the conditions 

therein, until such time as it may be 

withdrawn, amended, or replaced by the 

Commission. 

Part 35 originally was promulgated in 

1993 pursuant to the Commission’s 

general exemptive authority in CEA 

section 4(c), and provides a broad-based 

exemption from the CEA for ‘‘swap 

agreements’’ in any commodity. 

Specifically, part 35 exempts ‘‘swap 

agreements,’’ as defined therein, from 

most of the provisions of the CEA if: (1) 

They are entered into by ‘‘eligible swap 

participants’’ (‘‘ESPs’’); 32 (2) they are 

not part of a fungible class of 

agreements standardized as to their 

material economic terms; 33 (3) the 

creditworthiness of any party having an 

actual or potential obligation under the 

swap agreement would be a material 

consideration in entering into or 

determining the terms of the swap 

agreement, including pricing, cost, or 

credit enhancement terms; 34 and (4) 

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replaced by a system of mutualized risk of loss that 

binds members generally whether or not they are 

counterparties to the original transaction. Id. at 

5591. 

35 In this context, a multilateral transaction 

execution facility is a physical or electronic facility 

in which all market makers and other participants 

that are members simultaneously have the ability to 

execute transactions and bind both parties by 

accepting offers which are made by one member 

and open to all members of the facility. Id. 

36Similarly, part 32 of the Commission’s 

regulations will continue to be available with 

respect to commodity option transactions that meet 

the conditions therein, until such time as part 32 

may be withdrawn, amended, or replaced by the 

Commission. See Commodity Options and 

Agricultural Swaps, 76 FR 6095, Feb 3, 2011. 

37Commenters responding to the Commission’s 

proposed Entity Definitions have suggested that the 

Commission should exercise its authority to further 

define the term ‘‘eligible contract participant’’ to 

encompass the ‘‘line of business’’ provision that 

was a part of the Commission’s Policy Statement 

Concerning Swap Transactions, 54 FR 30694, 

30696–30697, July 21, 1989. The staff is evaluating 

these comments in the context of the Commission’s 

rulemaking to further define the term ‘‘eligible 

contract participant.’’ 

38 In September 2010, the Commission published 

an order in the Federal Register providing that it 

would extend grandfather relief to ECMs and 

EBOTs provided that certain conditions are met. 

See Order Regarding the Treatment of Petitions 

Seeking Grandfather Relief for Exempt Commercial 

Markets and Exempt Boards of Trade, 75 FR 56513, 

Sept. 16, 2010. Nothing in this proposed order is 

intended to impact the availability of this 

grandfather relief. 

39This exemptive relief would not be available to 

an electronic trading facility that, as of July 15, 

2011, is not already operating as an ECM pursuant 

to CEA sections 2h(3)–(7), or to an EBOT that, as 

of July 15, 2011, is not already operating pursuant 

to CEA section 5d, or not compliant with the 

conditions set forth in such provisions. 

40As discussed above, the addition of the term 

‘‘swap’’ to some of these provisions would not in 

any way affect the applicability of these anti-fraud 

and anti-manipulation enforcement provisions to 

transactions subject to relief pursuant to part two 

of the proposed order. 

41Further, the proposed order would not affect 

any Commission rulemaking authority over 

agreements, contracts, or transactions that may not 

depend on the terms subject to further definition 

under sections 712(d) or 721(c) of the Dodd-Frank 

Act. This relief also would not affect any provisions 

of the Dodd-Frank Act or the CEA that have become 

effective prior to July 16, 2011 or regulations 

already issued. 

42Section 4(c)(1) of the CEA, 7 U.S.C. 6(c)(1), 

provides in full that: 

In order to promote responsible economic or 

financial innovation and fair competition, the 

Commission by rule, regulation, or order, after 

notice and opportunity for hearing, may (on its own 

initiative or on application of any person, including 

any board of trade designated or registered as a 

contract market or derivatives transaction execution 

facility for transactions for future delivery in any 

commodity under section 5 of this Act) exempt any 

agreement, contract, or transaction (or class thereof) 

that is otherwise subject to subsection (a) (including 

any person or class of persons offering, entering 

into, rendering advice or rendering other services 

with respect to, the agreement, contract, or 

transaction), either unconditionally or on stated 

terms or conditions or for stated periods and either 

retroactively or prospectively, or both, from any of 

the requirements of subsection (a) of this section, 

or from any other provision of this chapter (except 

subparagraphs (C)(ii) and (D) of section 2(a)(1), 

except that the Commission and the Securities and 

Exchange Commission may by rule, regulation, or 

order jointly exclude any agreement, contract, or 

transaction from section 2(a)(1)(D)), if the 

Commission determines that the exemption would 

be consistent with the public interest. 

43CEA Section 4(c)(3), 7 U.S.C. 6(c)(3), includes 

within the term ‘‘appropriate persons’’ a number of 

specified categories of persons deemed appropriate 

under the CEA for entering into transactions 

exempted by the Commission under section 4(c). 

This includes persons the Commission determines 

to be appropriate in light of their financial or other 

qualifications, or the applicability of appropriate 

regulatory protections. 

they are not entered into or traded on 

a multilateral transaction execution 

facility.35 Accordingly, transactions that 

fully meet the conditions of part 35 are 

outside the scope of the proposed 

order.36

However, because part 35 covers 

essentially non-standardized, noncleared, non-exchange traded 

transactions, certain persons or entities 

that currently rely on the CEA 

exclusions or exemptions cited above 

may not qualify for part 35. In response 

to requests from market participants for 

greater clarity regarding the 

applicability of various statutory and 

regulatory requirements to certain 

transactions following the general 

effective date, the Commission, 

pursuant to its authority under section 

4(c) of the CEA, is proposing to grant 

relief for those transactions that satisfy 

the conditions specified below. 

Specifically, the Commission is 

proposing to temporarily exempt a 

transaction in exempt or excluded 

commodities (and any person or entity 

offering or entering into such 

transaction) from the CEA (other than 

the anti-fraud and anti-manipulation 

enforcement provisions identified 

below) following the general effective 

date if the transaction otherwise would 

comply with part 35, notwithstanding 

that: (1) The transaction may be 

executed on a multilateral transaction 

execution facility; (2) the transaction 

may be cleared; (3) persons offering or 

entering into the transaction may be 

eligible contract participants as defined 

in the CEA (prior to July 16, 2011); (4) 

the transaction may be part of a fungible 

class of agreements that are 

standardized as to their material 

economic terms; and/or (5) no more 

than one of the parties to the transaction 

is entering into the transaction in 

conjunction with its line of business, 

but is neither an eligible contract 

participant nor an ESP, and the 

transaction was not and is not marketed 

to the public (the ‘‘line of business 

provision’’).37

As noted above, this proposed 

temporary exemptive relief would not 

affect the availability of either part 35 or 

part 32 with respect to transactions that 

fully meet the conditions therein.38 For 

transactions that fall outside of existing 

part 35 or part 32, this relief would only 

be available to the extent those 

transactions (and persons offering or 

entering into such transactions) fall 

within the scope of any of the existing 

CEA sections 2(d), 2(e), 2(g), 2(h), and 

5d as in effect prior to July 16, 2011 39

or the line of business provision. 

With respect to any transaction within 

the scope of the proposed order, the 

proposed exemptive relief would not in 

any way limit the Commission’s 

authority with respect to any person, 

entity, or transaction pursuant to CEA 

sections 2(a)(1)(B), 4b, 4o, 6(c), 6(d), 6c, 

8(a), 9(a)(2) or 13, or the regulations of 

the Commission promulgated pursuant 

to such authorities, including CEA 

section 4c(b) proscribing fraud.40

Additionally, this proposed relief would 

not affect any Dodd-Frank Act 

implementing regulations (and any 

implementation period contained 

therein) that the Commission 

promulgates and applies to the subject 

transactions, market participants, or 

markets.41 This proposed temporary 

exemptive relief would expire upon the 

earlier of: (1) December 31, 2011; or (2) 

the repeal or replacement of part 35 or 

part 32, as applicable. The Commission 

is proposing to provide this exemptive 

relief in part two of the proposed order 

for no longer than a fixed period of time 

for the same reasons as described above 

with respect to part one of the proposed 

order. 

III. Section 4(c) of the Commodity 

Exchange Act 

Section 4(c)(1) of the CEA 42

authorizes the CFTC to exempt any 

transaction or class of transactions 

(including any person or class of 

persons offering, entering into, 

rendering advice or rendering other 

services with respect to, the transaction) 

from any of the provisions of the CEA 

(subject to certain exceptions). Pursuant 

to section 4(c)(2), the Commission must 

determine that: (1) The exemption is 

appropriate for the transactions and 

consistent with the public interest; (2) 

the exemption is consistent with the 

purposes of the CEA; (3) the transaction 

will be entered into solely between 

‘‘appropriate persons;’’ 43 and (4) the 

exemption will not have a material 

adverse effect on the ability of the 

Commission or any contract market to 

discharge its regulatory or selfregulatory responsibilities under the 

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44CEA Section 4(c)(2), 7 U.S.C. 6(c)(2), provides 

in full that: 

The Commission shall not grant any exemption 

under paragraph (1) from any of the requirements 

of subsection (a) of this section unless the 

Commission determines that— 

(A) The requirement should not be applied to the 

agreement, contract, or transaction for which the 

exemption is sought and that the exemption would 

be consistent with the public interest and the 

purposes of this Act; and 

(B) the agreement, contract, or transaction— 

(i) Will be entered into solely between 

appropriate persons; and 

(ii) Will not have a material adverse effect on the 

ability of the Commission or any contract market or 

derivatives transaction execution facility to 

discharge its regulatory or self-regulatory duties 

under this Act. 

45House Conf. Report No. 102–978, 1992 

U.S.C.C.A.N. 3179, 3213. 

46See CEA section 4(c)(3)(K), 7 U.S.C. 6(c)(3)(K) 

(appropriate persons may include such ‘‘other 

persons that the Commission determines to be 

appropriate in light of their financial or other 

qualifications, or the applicability of appropriate 

regulatory protections’’). 

47 44 U.S.C. 3507(d). 

48 7 U.S.C. 19(a). 

CEA.44 The Commission may grant such 

an exemption by rule, regulation or 

order, after notice and opportunity for 

hearing, and may do so on application 

of any person or on its own initiative. 

Further, the Commission may grant 

such an exemption either conditionally 

or unconditionally, or for stated periods 

within the Commission’s discretion. 

Finally, section 712(f) of the DoddFrank Act authorizes the Commission to 

‘‘exempt persons, agreements, contracts, 

or transactions from the provisions of 

the [Dodd-Frank] Act, under the terms 

contained in’’ the Dodd-Frank Act, in 

order to prepare for the effective dates 

of the provisions of Title VII. 

In enacting section 4(c), Congress 

noted that the goal of the provision ‘‘is 

to give the Commission a means of 

providing certainty and stability to 

existing and emerging markets so that 

financial innovation and market 

development can proceed in an effective 

and competitive manner.’’ 45 The 

proposed relief is intended to provide 

clarity and stability to the markets and 

market participants concerning the 

applicability of the provisions of the 

CEA, as added or amended by the DoddFrank Act (in part one), and the current 

provisions of the CEA as repealed by the 

Dodd-Frank Act (in part two), upon the 

general effective date of the Dodd-Frank 

Act, thereby avoiding or minimizing 

undue and unwarranted disruptions to 

the markets. 

The Commission notes that the 

proposed order is temporary in scope 

and reserves the Commission’s antifraud and anti-manipulation 

enforcement authority. As such, the 

Commission believes that the proposed 

order would be consistent with the 

public interest and purposes of the CEA. 

The Commission also believes the order 

to be limited to appropriate persons, 

including persons in current registration 

categories for which the Dodd-Frank Act 

expanded the definition to include 

activities relating to swaps (e.g., 

introducing brokers, commodity pool 

operators, commodity trading advisors, 

and associated persons thereof).46 The 

proposed order will not have a material 

adverse effect on the ability of the 

Commission or any contract market to 

discharge its regulatory or selfregulatory duties under the CEA. 

The Commission seeks comment on 

whether the proposed temporary 

exemptions are consistent with the 

public interest and other requirements 

of CEA section 4(c). 

IV. Request for Comment 

The Commission requests comment 

on all aspects of this proposed 

temporary exemptive order. 

V. Related Matters 

A. Paperwork Reduction Act 

The Paperwork Reduction Act 

(‘‘PRA’’) 47 imposes certain 

requirements on Federal agencies 

(including the Commission) in 

connection with conducting or 

sponsoring any collection of 

information as defined by the PRA. This 

proposed temporary exemptive order, if 

approved, would not require a new 

collection of information from any 

persons or entities that would be subject 

to the proposed order. 

B. Cost-Benefit Analysis 

Section 15(a) of the CEA 48 requires 

the Commission to consider the costs 

and benefits of its action before issuing 

an order under the CEA. By its terms, 

section 15(a) does not require the 

Commission to quantify the costs and 

benefits of an order or to determine 

whether the benefits of the order 

outweigh its costs. Rather, section 15(a) 

simply requires the Commission to 

‘‘consider the costs and benefits’’ of its 

action. 

Section 15(a) of the CEA further 

specifies that costs and benefits shall be 

evaluated in light of five broad areas of 

market and public concern: (1) 

Protection of market participants and 

the public; (2) efficiency, 

competitiveness, and financial integrity 

of futures markets; (3) price discovery; 

(4) sound risk management practices; 

and (5) other public interest 

considerations. The Commission may in 

its discretion give greater weight to any 

one of the five enumerated areas and 

could in its discretion determine that, 

notwithstanding its costs, a particular 

order is necessary or appropriate to 

protect the public interest or to 

effectuate any of the provisions or to 

accomplish any of the purposes of the 

CEA. 

1. Protection of Market Participants and 

the Public 

As discussed above, the Commission 

is proposing that the scope of this 

temporary exemptive relief be limited to 

persons who are ‘‘appropriate persons’’ 

as set forth in section 4(c) of the Act. 

Further, this proposal does not affect the 

Commission’s existing and future antifraud and anti-manipulation authorities, 

including CEA sections 2(a)(1)(B), 4b, 

4o, 6(c), 6(d), 6c, 8(a), 9(a)(2), or 13, or 

the regulations of the Commission 

promulgated pursuant to such 

authorities, including section 4c(b) 

proscribing fraud. The Commission 

believes that market participants and 

the public will benefit from the clarity 

offered by the proposed temporary 

exemptive relief, while maintaining the 

Commission’s authorities regarding the 

prevention and deterrence of fraud and 

manipulation. With respect to costs, the 

Commission believes that the exemptive 

relief imposes no affirmative duties or 

obligations on market participants and 

the public. The temporary exemptive 

relief does not contain any requirement 

to create, retain, submit, or disclose any 

information. Furthermore, the 

exemptive relief imposes no 

recordkeeping or related data retention 

or disclosure requirements on any 

person, including small businesses. 

Consequently, the Commission finds it 

unlikely that the exemptive relief will 

impose any additional costs beyond the 

existing costs associated with ongoing 

operations, including those that ensure 

that behavior and statements are not 

fraudulent or manipulative. 

2. Efficiency, Competition, and 

Financial Integrity 

Although the Dodd-Frank Act 

establishes a comprehensive new 

regulatory framework for swaps, the 

Commission’s work to implement that 

framework will not be complete as of 

July 16, 2011. Accordingly, this relief 

offers the benefit of greater clarity in the 

swaps market that is in the interest of 

both the markets and the public. 

Accordingly, the Commission believes 

that this temporary exemptive relief is 

an appropriate measure to facilitate a 

transition to the comprehensive new 

regulatory framework for swaps set out 

in Title VII of the Dodd-Frank Act. Such 

an orderly transition will promote 

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35378 Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Proposed Rules 

market efficiency, competition, and 

financial integrity. 

3. Price Discovery 

As stated above, the temporary relief 

proposed here is designed to maintain 

the functioning of the markets until 

such time as the comprehensive new 

regulatory framework for swaps set forth 

in the Dodd-Frank Act is in place. With 

the clarity offered by the proposed 

exemptive relief, markets would 

function better as venues for price 

discovery. 

4. Sound Risk Management Practices 

Appropriate persons covered by this 

proposal would be subject to the 

Commission’s full array of existing antifraud and anti-market manipulation 

provisions and certain new authorities 

provided under the Dodd-Frank Act. 

Market participants and the public will 

benefit substantially from the 

continuing protection through the 

prevention and deterrence of fraud and 

manipulation. Markets protected from 

fraud and manipulation function better 

as venues for price discovery and risk 

management. 

5. Other Public Interest Considerations 

The proposed exemptive order is 

temporary and limited. It would not 

affect the applicability of any provision 

of the CEA to futures contracts, options 

on futures contracts, or transactions 

with retail customers in foreign 

currency or other commodities pursuant 

to CEA section 2(c)(2). Further, it would 

expire at an appropriate date, as 

discussed above. The expiration 

provision would permit the Commission 

to ensure that the scope and extent of 

exemptive relief is appropriately 

tailored to the schedule of 

implementation of the Dodd-Frank Act 

requirements. 

After considering these factors, the 

Commission has determined to seek 

comment on the proposed temporary 

exemptive order, as discussed above. 

The Commission seeks comment on all 

aspects of the foregoing proposed 

application of the cost-benefit 

considerations set forth in CEA section 

15(a). Commenters also are invited to 

submit any data or other information 

that they may have quantifying or 

qualifying the costs and benefits of the 

proposal with their comment letters. 

Issued in Washington, DC, on June 14, 

2011 by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

Appendices to Effective Date for Swap 

Regulation—Commission Voting 

Summary and Statements of 

Commissioners 

Note: The following appendices will not 

appear in the Code of Federal Regulations. 

Appendix 1—Commission Voting 

Summary 

On this matter, Chairman Gensler and 

Commissioners Dunn, Sommers, Chilton and 

O’Malia voted in the affirmative; no 

Commissioner voted in the negative. 

Appendix 2—Statement of Chairman 

Gary Gensler 

I support the proposed order regarding the 

effective dates of certain Dodd-Frank Act 

provisions. 

The Dodd-Frank Act has a deadline of 360 

days after enactment for completion of the 

bulk of our rulemakings—July 16, 2011. Both 

the Dodd-Frank Act and the Commodity 

Exchange Act (CEA) give the CFTC the 

flexibility and authority to address the issues 

relating to the effective dates of Title VII. We 

have coordinated closely with the SEC on 

these issues. 

Section 754 of the Dodd-Frank Act states 

that Subtitle A of Title VII—the Subtitle that 

provides for the regulation of swaps—‘‘shall 

take effect on the later of 360 days after the 

date of the enactment of this subtitle or, to 

the extent a provision of this subtitle requires 

a rulemaking, not less than 60 days after 

publication of the final rule or regulation 

implementing such provisions of this 

subtitle.’’ 

Thus, those provisions that require 

rulemakings will not go into effect until the 

CFTC finalizes the respective rules. This is a 

substantial portion of the derivatives 

provisions under Dodd-Frank. Furthermore, 

they will only go into effect based on the 

phased implementation dates included in the 

final rules. Today we are releasing a list of 

the provisions of the swaps subtitle that 

require rulemakings. 

There are other provisions of Title VII that 

do not require rulemaking and will take 

effect on July 16. The proposed order that we 

are considering today would provide relief 

until December 31, 2011, or when the 

definitional rulemakings become effective, 

whichever is sooner, from certain provisions 

that would otherwise apply to swaps or swap 

dealers on July 16. This includes provisions 

that do not directly rely on a rule to be 

promulgated, but do refer to terms that must 

be further defined by the CFTC and SEC, 

such as ‘‘swap’’ and ‘‘swap dealer.’’ 

The proposed order also would provide 

relief through no later than December 31, 

2011, from certain CEA requirements that 

may result from the repeal, effective on July 

16, 2011, of some of sections 2(d), 2(e), 2(g), 

2(h) and 5d. 

There have been suggestions to delay 

implementation of the derivatives reforms 

included in the Dodd-Frank Act. That is not 

what today’s proposed order is. Instead, it 

provides the time necessary for the 

Commission to complete the rulemaking 

process to implement the Dodd-Frank Act. 

Some might ask: Why six months? Six 

months will provide the Commission with 

the opportunity to re-examine the status of 

final rulemaking in light of the changed 

regulatory landscape at the time. It would 

allow us, if appropriate at the time, to tailor 

relief from certain provisions of the DoddFrank Act at the end of the year. 

It is important to note, however, that until 

the CFTC completes its rule-writing process 

and implements and enforces those new 

rules, the public remains unprotected. 

Appendix 3—Statement of 

Commissioner Bart Chilton 

I concur with the Commission’s decision 

today to provide needed relief with regard to 

provisions of the Wall Street Reform and 

Consumer Protection Act that go into effect 

on July 16, 2011. I believe, however, that the 

precise nature of this relief must be 

developed utilizing an iterative process with 

affected parties to ensure that essential legal 

certainty is provided to the markets and to 

market participants. I will not support any 

final rule on this issue that does not provide 

clear and unequivocal guidance regarding the 

legality of transactions and the required 

responsibilities under the Act. In addition, 

this relief must be issued promptly, in order 

to ensure that there is no gap in the effective 

date of the Act’s provisions and the common 

understanding of the effectiveness of those 

dates. 

[FR Doc. 2011–15195 Filed 6–15–11; 4:15 pm] 

BILLING CODE 6351–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Parts 175 and 183 

[Docket No. USCG–2009–0206] 

RIN 1825–AB34 

Installation and Use of Engine Cut-Off 

Switches on Recreational Vehicles 

Correction 

Proposed Rule document 2011–14140 

was inadvertently published in the 

Rules section of the issue of June 8, 

2011, beginning on page 33161. It 

should have appeared in the Proposed 

Rules section. 

[FR Doc. 2011–15122 Filed 6–16–11; 8:45 am] 

BILLING CODE 1505–01–D 

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