69058 Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Notices 

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

2 7 U.S.C. 6(c). 

3 15 U.S.C. 78a et seq. The Commission has 

provided exemptions for gold and silver ETF 

products on three prior occasions. See Order 

Exempting the Trading and Clearing of Certain 

Products Related to SPDR® Gold Trust Shares, 73 

FR 31981 (June 5, 2008), Exemptive Order for 

SPDR® Gold Futures Contracts, 73 FR 31979 (June 

5, 2008), Order Exempting the Trading and Clearing 

of Certain Products Related to iShares® COMEX 

Gold Trust Shares and iShares® Silver Trust Shares, 

73 FR 79830 (December 30, 2008), and Order 

Exempting the Trading and Clearing of Certain 

Products Related to ETFS Physical Swiss Gold 

Shares and ETFS Physical Silver Shares, 75 FR 

37406 (June 29, 2010) (collectively, the ‘‘Previous 

Orders’’). 

4 7 U.S.C. 7a–1. 

5 15 U.S.C. 78q–l. 

6 7 U.S.C. 7a–2(c), 17 CFR 39.4(a), 40.5. 

7See Securities Exchange Act Release No. 62094 

(May 13, 2010), 75 FR 28085 (May 19, 2010) (File 

No. SR–OCC–2010–07 filed with both the CFTC and 

the Securities and Exchange Commission (‘‘SEC’’)) 

and the SEC’s approval in Securities Exchange Act 

Release No. 62290 (June 14, 2010), 75 FR 35861 

(June 23, 2010). See also Securities Exchange Act 

Release No. 62139 (May 19, 2010), 75 FR 29597 

(May 26, 2010) (SEC approval of the CBOE’s listing 

and trading of Options on the GVZ Index). 

8See Securities Exchange Act Release No. 50603 

(October 28, 2004), 69 FR 64614 (November 5, 2004) 

(original GLD Approval Order for listing and 

trading on the NYSE). 

(Merced County); Site 4 (101 acres)— 

within the Applegate Business Park, 

Highway 33, Air Park Road, Atwater 

(Merced County); Site 6 (87 acres)—City 

of Madera Airport Industrial Park/State 

Center Commerce Park, Falcon Drive, 

Madera (Madera County); Site 7 (10 

acres)—City of Madera Industrial Park, 

2500 West Industrial Avenue, Madera 

(Madera County); Site 8 (102 acres)— 

Airways East Business Park, East 

Shields Avenue, Fresno (Fresno 

County); Site 9 (225 acres)—Central 

Valley Business Park, East North 

Avenue, Fresno (Fresno County); Site 10 

(497 acres)—consisting of the Fresno 

Airport Industrial Park area located on 

Aircorp Way and at the intersection of 

E. Anderson and E. Clinton Avenues, 

Fresno, and the adjacent City of Clovis 

Industrial Park located at the 

intersection of West Dakota Avenue & 

West Pontiac Way, Clovis (Fresno 

County); Site 11 (35 acres)—Reedley 

Industrial Park II, 1301 South 

Buttonwillow Avenue, Reedley (Fresno 

County); Site 12 (128 acres)—City of 

Selma Industrial Park, East Nebraska 

Avenue, Selma (Fresno County); and, 

Site 13 (15 acres)—located at 810 E. 

Continental Avenue, Tulare, (Tulare 

County). 

For further information, contact 

Christopher Kemp at Christopher.

Kemp@trade.gov or (202) 482–0862. 

Dated: November 4, 2010. 

Andrew McGilvray, 

Executive Secretary. 

[FR Doc. 2010–28409 Filed 11–9–10; 8:45 am] 

BILLING CODE P 

COMMODITY FUTURES TRADING 

COMMISSION 

Request for Comment on a Proposal to 

Exempt, Pursuant to the Authority in 

Section 4(c) of the Commodity 

Exchange Act, the Trading and 

Clearing of Certain Products Related to 

the CBOE Gold ETF Volatility Index 

and Similar Products 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice of Proposed Order and 

Request for Comment. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘CFTC’’ or the 

‘‘Commission’’) is proposing to exempt 

the trading and clearing of certain 

contracts called ‘‘options’’ (‘‘Options’’) on 

the CBOE Gold ETF Volatility Index 

(‘‘GVZ Index’’), which would be traded 

on the Chicago Board Options Exchange 

(‘‘CBOE’’), a national securities 

exchange, and cleared through the 

Options Clearing Corporation (‘‘OCC’’) in 

its capacity as a registered securities 

clearing agency, from the provisions of 

the Commodity Exchange Act (‘‘CEA’’) 1

and the regulations thereunder, to the 

extent necessary to permit such Options 

on the GVZ Index to be so traded and 

cleared. Authority for this exemption is 

found in Section 4(c) of the CEA.2 The 

Commission is also requesting comment 

regarding whether the Commission 

should provide a categorical exemption 

that would permit the trading and 

clearing of options on indexes that 

measure the volatility of shares of gold 

exchange-traded funds (‘‘ETFs’’) 

generally, regardless of issuer, including 

options on any index that measures the 

magnitude of changes in, and is 

composed of the price(s) of shares of 

one or more gold ETFs and the price(s) 

of any other instrument(s), which other 

instruments are securities as defined in 

the Securities Exchange Act of 1934 

(‘‘the ’34 Act’’).3

DATES: Comments must be received on 

or before December 10, 2010. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: goldvolatility4c@cftc.gov. 

Include ‘‘Options on GVZ Index and 

Similar Products’’ in the subject line of 

the message. 

• Fax: 202–418–5521. 

• 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. 

All comments must be submitted in 

English, or if not, accompanied by an 

English translation. Comments may 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 

Commission to consider information 

that may be exempt from disclosure 

under the Freedom of Information Act, 

a petition for confidential treatment of 

the exempt information may be 

submitted according to the established 

procedures in CFTC Regulation 145.9. 

FOR FURTHER INFORMATION CONTACT: 

Robert B. Wasserman, Associate 

Director, 202–418–5092, 

rwasserman@cftc.gov, Division of 

Clearing and Intermediary Oversight, 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1151 21st Street, NW., Washington, DC 

20581, or Anne C. Polaski, Special 

Counsel, 312–596–0575, 

apolaski@cftc.gov, Division of Clearing 

and Intermediary Oversight, Commodity 

Futures Trading Commission, 525 W. 

Monroe Street, Suite 1100, Chicago, 

Illinois 60661. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

The OCC is both a Derivatives 

Clearing Organization (‘‘DCO’’) 

registered pursuant to Section 5b of the 

CEA,4 and a securities clearing agency 

registered pursuant to Section 17A of 

the ’34 Act.5

OCC has filed with the CFTC, 

pursuant to Section 5c(c) of the CEA 

and Commission Regulations 39.4(a) 

and 40.5 thereunder,6 a request for 

approval of a rule that would enable 

OCC to clear and settle Options on the 

GVZ Index traded on the CBOE, a 

national securities exchange, in its 

capacity as a registered securities 

clearing agency (and not in its capacity 

as a DCO).7 Section 5c(c)(3) of the CEA 

provides that the CFTC must approve 

such a rule submitted for approval 

unless it finds that the rule would 

violate the CEA. 

The GVZ Index is an index that 

measures the implied volatility of 

options on shares of the SPDR® Gold 

Trust (‘‘SPDR® Gold Trust Shares’’), an 

ETF designed to reflect the performance 

of the price of gold bullion.8


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Notices 69059 

9Section 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 7 of this title) exempt any 

agreement, contract, or transaction (or class thereof) 

that is otherwise subject to subsection (a) of this 

section (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) of this title, 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) of this title), if 

the Commission determines that the exemption 

would be consistent with the public interest. 

10House Conf. Report No. 102–978, 1992 

U.S.C.C.A.N. 3179, 3213 (‘‘4(c) Conf. Report’’). 

11See footnote 3, above. 

12 4(c) Conf. Report at 3214–3215. 

13Section 4(c)(2) of the CEA, 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. 

14CEA 3(b), 7 U.S.C. 5(b). See also CEA 4(c)(1), 

7 U.S.C. 6(c)(1) (purpose of exemptions is ‘‘to 

promote responsible economic or financial 

innovation and fair competition’’). 

II. Section 4(c) of the Commodity 

Exchange Act 

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

the CFTC to ‘‘promote responsible 

economic or financial innovation and 

fair competition’’ by exempting any 

transaction or class of transactions from 

any of the provisions of the CEA 

(subject to exceptions not relevant here) 

where the Commission determines that 

the exemption would be consistent with 

the public interest.9 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. 

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.’’ 10 Permitting 

Options on the GVZ Index to be traded 

on a national securities exchange and to 

be cleared by OCC in its capacity as a 

securities clearing agency, as discussed 

above, may foster both financial 

innovation and competition and may be 

consistent with public interest and the 

CEA. The CFTC is requesting comment 

on whether it should exempt Options on 

the GVZ Index, as described above, that 

are traded on a national securities 

exchange, and cleared through OCC in 

its capacity as a registered securities 

clearing agency, from the provisions of 

the CEA and the Commission’s 

regulations thereunder, to the extent 

necessary to permit such Options to be 

so traded and cleared. The CFTC 

previously granted exemptions for 

options on shares of gold ETFs on June 

5, 2008, December 30, 2008, and June 

29, 2010.11

In proposing this exemption, the 

CFTC need not—and does not—find 

that Options on the GVZ Index are (or 

are not) options subject to the CEA. 

During the legislative process leading to 

the enactment of Section 4(c) of the 

CEA, the House-Senate Conference 

Committee noted that: 

The Conferees do not intend that the 

exercise of exemptive authority by the 

Commission would require any 

determination beforehand that the agreement, 

instrument, or transaction for which an 

exemption is sought is subject to the [CEA]. 

Rather, this provision provides flexibility for 

the Commission to provide legal certainty to 

novel instruments where the determination 

as to jurisdiction is not straightforward. 

Rather than making a finding as to whether 

a product is or is not a futures contract, the 

Commission in appropriate cases may 

proceed directly to issuing an exemption.12

The Options on the GVZ Index 

described above raise questions 

involving their nature and the 

appropriate resulting jurisdiction over 

them. Given their potential usefulness 

to the market, however, the Commission 

believes that this may be an appropriate 

case for issuing an exemption without 

making a finding as to the nature of 

these particular instruments. 

Section 4(c)(2) of the CEA provides 

that the Commission may grant 

exemptions only when it determines 

that the requirements for which an 

exemption is being provided should not 

be applied to the agreements, contracts 

or transactions at issue, and the 

exemption is consistent with the public 

interest and the purposes of the CEA; 

that the agreements, contracts or 

transactions will be entered into solely 

between appropriate persons; and that 

the exemption will not have a material 

adverse effect on the ability of the 

Commission or Commission-regulated 

markets to discharge their regulatory or 

self-regulatory responsibilities under the 

CEA.13

The purposes of the CEA include 

‘‘promot[ing] responsible innovation and 

fair competition among boards of trade, 

other markets and market 

participants.’’ 14 It may be consistent 

with these and the other purposes of the 

CEA and with the public interest for the 

mode of trading and clearing the 

Options on the GVZ Index—whether the 

mode applicable to options on securities 

indexes or commodity indexes—to be 

determined by competitive market 

forces. Accordingly, the Commission 

proposes to use its authority under 

Section 4(c) of the CEA to exempt the 

trading of Options on the GVZ Index on 

a national securities exchange, and 

clearing thereof by a registered 

securities clearing agency, from the 

provisions of the CEA and the 

Commission’s regulations thereunder to 

the extent necessary to permit such 

Options to be so traded and cleared. 

In addition, the Commission proposes 

to use its authority under Section 4(c) of 

the CEA to exempt the trading and 

clearing of options on indexes that 

measure the volatility of shares of gold 

ETFs generally, regardless of issuer. In 

particular, the Commission proposes to 

exempt the following categories of 

Options from the provisions of the CEA 

and the Commission’s regulations 

thereunder to the extent necessary to 

permit such Options to be traded on a 

national securities exchange and cleared 

by OCC, in its capacity as a securities 

clearing agency: 

(a) Options on the GVZ Index; 

(b) Options on any index that 

measures the volatility (historical or 

expected) of the price(s) of shares of one 

or more gold ETFs; and 

(c) Options on any index that 

measures the volatility (historical or 

expected) of price(s) of shares of one or 

more gold ETFs and the price(s) of any 

other instrument(s), which other 

instruments are securities as defined in 

Section 3(a)(10) of the ’34 Act. 

The CFTC is requesting comment as to 

whether an exemption from the 

requirements of the CEA and regulations 

thereunder should be granted in the 

context of these transactions. 

On September 24, 2010, the 

Commission issued a Request for 

Comment on Options for a Proposed 

Exemptive Order Relating to the Trading 

and Clearing of Precious Metal 


emcdonald on DSK2BSOYB1PROD with NOTICES
69060 Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Notices 

15See 75 FR 60411 (September 30, 2010). 

16 44 U.S.C. 3507(d). 

17 7 U.S.C. 19(a). 

Commodity-Based ETFs and a Concept 

Release (‘‘Precious Metal ETF 

Release’’).15 In the Precious Metal ETF 

Release, the Commission requested 

comment, in part, regarding whether it 

should issue a categorical Section 4(c) 

exemption to permit options and futures 

on shares of all or some precious metal 

commodity-based ETFs to be traded and 

cleared as options on securities and 

security futures, respectively. The 

comment period for the Precious Metal 

ETF Release expires on November 1, 

2010. 

The Commission proposes to use its 

authority under Section 4(c) of the CEA 

to exempt options on indexes that 

measure the volatility of shares of gold 

ETFs at this time while it continues to 

seek comments and consider the 

appropriateness of a categorical 

exemption with respect to options and 

futures on shares of precious metal 

commodity-based ETFs. The 

Commission believes that options on an 

index that measures commodity price 

volatility based on shares of such an 

ETF do not raise the same regulatory 

concerns that may be associated with 

options and futures on shares of an ETF 

that is based on the underlying 

commodity. In this regard, trading in 

options and futures on shares of a gold 

ETF could have a potential impact on 

the deliverable supply by removing 

physical gold from physical marketing 

channels, while an index based on 

volatility measures does not raise these 

concerns in that such an index does not 

involve ownership of the commodity, 

either directly or indirectly, by traders 

in options on such an index. 

Section 4(c)(3) of the CEA includes 

within the term ‘‘appropriate persons’’ a 

number of specified categories of 

persons, and also in subparagraph (K) 

thereof ‘‘such other persons that the 

Commission determines to be 

appropriate in light of * * * the 

applicability of appropriate regulatory 

protections.’’ National securities 

exchanges and securities clearing 

agencies, as well as their members who 

will intermediate Options on the GVZ 

Index and other options on indexes that 

measure the volatility of shares of gold 

ETFs as described herein, are subject to 

extensive and detailed regulation by the 

SEC under the ‘34 Act. 

III. Request for Comment 

The Commission requests comment 

on all aspects of the issues presented by 

this proposed order. 

IV. Related Matters 

A. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(‘‘PRA’’) 16 imposes certain requirements 

on Federal agencies (including the 

Commission) in connection with their 

conducting or sponsoring any collection 

of information as defined by the PRA. 

The proposed exemptive order would 

not, if approved, require a new 

collection of information from any 

entities that would be subject to the 

proposed order. 

B. Cost-Benefit Analysis 

Section 15(a) of the CEA 17 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. 

The Commission has determined that 

the costs of this proposed order are not 

significant. Although the order would 

exempt the subject options from 

regulation under the CEA, market 

participants and the public will 

nonetheless be protected because the 

options, the markets on which they 

trade, and the intermediaries through 

which they will be traded will be 

subject to comprehensive regulation by 

the SEC. The Commission has 

determined that the benefits of the 

proposed order are substantial. The 

proposed order would promote 

efficiency in the markets, as it would 

provide certainty that the subject 

options will not be subject to 

duplicative regulation. 

After considering these factors, the 

Commission has determined to seek 

comment on the proposed order as 

discussed above. The Commission 

invites public comment on its 

application of the cost-benefit 

considerations. Commenters are 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 November 4, 

2010 by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

[FR Doc. 2010–28377 Filed 11–9–10; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF DEFENSE 

Department of the Army 

Intent To Grant an Exclusive License 

for a U.S. Government-Owned 

Invention 

AGENCY: Department of the Army, DoD. 

ACTION: Notice. 

SUMMARY: In accordance with 35 U.S.C. 

209(e), and 37 CFR 404.7 (a)(1)(i) and 37 

CFR 404.7 (b)(1)(i), announcement is 

made of the intent to grant an exclusive, 

revocable license for the invention 

claimed in U.S. Patent Application No. 

12/670,250, entitled ‘‘Obstetrics 

Simulation and Training Method and 

System,’’ filed on January 22, 2010, and 

related foreign patent applications 

deriving from PCT/US2008/076725 to 

Gaumard Scientific Company, Inc., with 

its principal place of business at 14700 

SW 136 Street, Miami, FL 33196–5691. 

ADDRESSES: Commander, U.S. Army 

Medical Research and Materiel 

Command, ATTN: Command Judge 

Advocate, MCMR–JA, 504 Scott Street, 

Fort Detrick, Frederick, MD 21702– 

5012. 

FOR FURTHER INFORMATION CONTACT: For 

licensing issues, Dr. Paul Mele, Office of 

Research and Technology Applications 

(ORTA), (301) 619–6664. For patent 

issues, Ms. Elizabeth Arwine, Patent 

Attorney, (301) 619–7808, both at 

telefax (301) 619–5034. 

SUPPLEMENTARY INFORMATION: Anyone 

wishing to object to the grant of this 

license can file written objections along 

with supporting evidence, if any, within 

15 days from the date of this 

publication. Written objections are to be 


emcdonald on DSK2BSOYB1PROD with NOTICES