Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Rules and Regulations 49291 

1See Dodd-Frank Wall Street Reform and 

Consumer Protection Act, Public Law 111–203, 124 

Stat. 1376 (2010). The text of the Dodd-Frank Act 

may be accessed at http://www.cftc.gov./ 

LawRegulation/OTCDERIVATIVES/index.htm. 

2Pursuant to section 701 of the Dodd-Frank Act, 

Title VII may be cited as the ‘‘Wall Street 

Transparency and Accountability Act of 2010.’’ 

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

4As discussed below, in accordance with the 

mandate of the Dodd-Frank Act, the Commission 

recently promulgated a final rule defining the term 

‘‘agricultural commodity.’’ See 76 FR 41048, July 

13, 2011. 

Commission has accredited by order at 

or before the time the product was 

tested, even if the order did not include 

the test methods specified in this notice. 

If the third party conformity assessment 

body has not been accredited by a 

Commission order as a firewalled 

conformity assessment body, the 

Commission will not accept a certificate 

of compliance based on testing 

performed by the third party conformity 

assessment body before it is accredited, 

by Commission order, as a firewalled 

conformity assessment body; 

• For tests conducted using the CPSC 

Test Method, the test was conducted on 

or after July 27, 2009. The Commission 

has chosen July 27, 2009, because it is 

the date the Commission posted a test 

method for testing component parts for 

phthalates on the Commission Web site: 

(http://www.cpsc.gov/about/cpsia/ 

CPSC-CH-C1001-09.2.pdf). The test 

method was updated on April 1, 2010, 

to the current method (http:// 

www.cpsc.gov/about/cpsia/CPSC-CHC1001-09.3.pdf.). The Commission will 

accept phthalates content certifications 

for products tested before January 1, 

2012, if the product was tested using 

either CPSC–CH–C1001–09.2 or CPSC– 

CH–C1001–09.3. The Commission 

acknowledges that, on March 3, 2009, it 

released a test method that involved 

testing the entire product (http:// 

www.cpsc.gov/about/cpsia/CPSC-CHC1001-09.1.pdf) (‘‘March 2009 test 

method’’). The Commission will not 

accept phthalates content certifications 

for products tested using the March 

2009 test method (CPSC–CH–C1001– 

09.1). The Commission considers testing 

the entire product to be less protective 

of children because mouthable 

component parts with high 

concentrations of phthalates in products 

with large quantities of nonplasticized 

parts would be able to pass the test 

because the total mass of the product 

would dilute the overall phthalate 

measure. 

• For tests conducted using the 

Chinese Test Method, the test was 

conducted on or after June 18, 2008. The 

Commission has chosen June 18, 2008, 

because that is the date that the Chinese 

Test Method was issued. 

• The third party conformity 

assessment body’s application for 

accreditation is accepted by CPSC by 

the mandatory effective date, as 

established by the Commission; 

• The accreditation scope in the 

application for accreditation expressly 

includes one or both of the acceptable 

test methods identified earlier in part I 

of this document; 

• The test results show compliance 

with the applicable current standards; 

and 

• The third party conformity 

assessment body’s accreditation and 

inclusion of one or both of the test 

methods (identified earlier in part I of 

this document) in its scope remain in 

effect through the effective date for 

mandatory third party testing and 

manufacturer certification for the 

subject products’ respective standards. 

Dated: July 29, 2011. 

Alberta E. Mills, 

Acting Secretary, Consumer Product Safety 

Commission. 

[FR Doc. 2011–19678 Filed 8–9–11; 8:45 am] 

BILLING CODE 6355–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 35 

RIN 3038–AD21 

Agricultural Swaps 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final rule. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘Commission’’ or 

‘‘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 

certain provisions of the Commodity 

Exchange Act (‘‘CEA’’ or ‘‘Act’’). On 

February 3, 2011, the Commission 

requested comment on a set of proposed 

rules that would, among other things, 

implement regulations whereby swaps 

in agricultural commodities may 

transact subject to the same rules as all 

other swaps. The proposed rules for 

swaps in an agricultural commodity 

would repeal and replace the 

Commission’s current regulations 

concerning the exemption of swap 

agreements. After reviewing the 

comments submitted in response to the 

proposed rules, the Commission has 

determined to issue these final rules for 

swaps in an agricultural commodity in 

the form as originally proposed. The 

February 3, 2011, proposed rules also 

included provisions that would 

substantially amend the Commission’s 

regulations regarding commodity option 

transactions. However, in this final rule 

the Commission is only issuing the rules 

for swaps in an agricultural commodity. 

The proposed rules for commodity 

option transactions will be addressed at 

a later date. 

DATES: Effective Date—December 31, 

2011. 

FOR FURTHER INFORMATION CONTACT: 

Donald Heitman, Senior Special 

Counsel, (202) 418–5041, 

dheitman@cftc.gov, or Ryne Miller, 

Attorney Advisor, (202) 418–5921, 

rmiller@cftc.gov, Division of Market 

Oversight, Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

A. Dodd-Frank Act 

On July 21, 2010, President Obama 

signed the Dodd-Frank Wall Street 

Reform and Consumer Protection Act.1

Title VII of the Dodd-Frank Act 2

amended the CEA 3 to establish a 

comprehensive new regulatory 

framework for swaps and security-based 

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 

requirements on standardized derivative 

products; (3) creating robust 

recordkeeping and real-time reporting 

regimes; and (4) enhancing the 

Commission’s rulemaking and 

enforcement authorities with respect to, 

among others, all registered entities and 

intermediaries subject to the 

Commission’s oversight. 

B. Proposed Agricultural Swaps Rules 

Section 723(c)(3) of the Dodd-Frank 

Act provides that swaps in an 

agricultural commodity (as defined by 

the Commission) 4 are prohibited unless 

entered into pursuant to a rule, 

regulation or order of the Commission 

adopted pursuant to CEA section 4(c). 

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49292 Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Rules and Regulations 

5 17 CFR part 35. 

6When this notice refers to ‘‘agricultural swaps,’’ 

it is referring to swaps in an agricultural 

commodity, as identified in section 723(c)(3) of the 

Dodd-Frank Act. 

7See Commodity Options and Agricultural 

Swaps, 76 FR 6095, February 3, 2011. 

8See Agricultural Swaps, 75 FR 59666, Sept. 28, 

2010. 

9Section 721 of the Dodd-Frank Act adds new 

section 1a(47) to the CEA, defining ‘‘swap’’ to 

include not only ‘‘any agreement, contract, or 

transaction commonly known as,’’ among other 

things, ‘‘an agricultural swap’’ or ‘‘a commodity 

swap,’’ but also ‘‘[an] option of any kind that is for 

the purchase or sale, or based on the value, of * * * 

commodities * * *.’’ However, the NPRM notes 

that the new swap definition did not include 

options on futures, options on any security, 

certificate of deposit, or group or index of 

securities, including any interest therein or based 

on the value thereof, that is subject to the Securities 

Act of 1933 and the Securities Exchange Act of 

1934 (see new CEA section 1a(47)(B)(iii)), and 

foreign currency options entered into on a national 

securities exchange registered pursuant to section 

6(a) of the Securities Exchange Act of 1934 (see new 

CEA section 1a(47)(B)(iv)). 

10See NPRM, 76 FR at 6096 at 6096–97, Feb. 3, 

2011. 

11 In addition to 4(c), these final rules are also 

being adopted pursuant to the Commission’s 

authority under CEA section 4c(b)—just as original 

part 35 was adopted pursuant to both CEA section 

4(c) and 4c(b). 

12Pre Dodd-Frank section 2(g) provided: 

No provision of this Act (other than section 5a (to 

the extent provided in section 5a(g)), 5b, 5d, or 

12(e)(2)) shall apply to or govern any agreement, 

contract, or transaction in a commodity other than 

an agricultural commodity if the agreement, 

contract, or transaction is— 

(1) Entered into only between persons that are 

eligible contract participants at the time they enter 

into the agreement, contract, or transaction; 

(2) subject to individual negotiation by the 

parties; and 

(3) not executed or traded on a trading facility. 

Pre Dodd-Frank CEA section 2(g). Note that 

section 2(g) is among those sections of the CEA that 

were repealed by the Dodd-Frank Act, effective July 

16, 2011. 

13Pre Dodd-Frank CEA section 2(g) was added to 

the CEA as section 105(b) of the CFMA, enacted as 

Appendix E to Public Law 106–554. 

14Notably, pre Dodd-Frank CEA section 2(g) is 

not the only statutory provision added by the 

CFMA that excluded or exempted bilateral swaps 

between eligible contract participants from the 

Commission’s jurisdiction. Pre Dodd-Frank CEA 

section 2(d)(1) excluded any such bilateral 

‘‘agreement, contract, or transaction’’ in excluded 

commodities from Commission jurisdiction, while 

pre Dodd-Frank CEA section 2(h)(1) created a 

similar exemption for a ‘‘contract, agreement or 

transaction’’ in exempt commodities. Both sections 

2(d)(1) and 2(h)(1) were also among the CEA 

provisions repealed by the Dodd-Frank Act, 

effective July 16, 2011. 

15See Agricultural Commodity Definition, 76 FR 

41048, July 13, 2011. 

16Part 35 provides eligible swap participants (as 

defined in § 35.1(b)(2)) with a general exemption 

from the CEA for a swap that is not part of a 

fungible class of agreements that are standardized 

as to their material economic terms, where the 

creditworthiness of each counterparty is a material 

consideration in entering into or determining the 

terms of the swap, and the swap is not entered into 

and traded on or through a multilateral transaction 

execution facility. See § 35.2. 

17Part 35, at § 35.2(d), also provides that ‘‘any 

person may apply to the Commission for exemption 

from any of the provisions of the Act (except 

2(a)(1)(B) [liability of principal for act of agent]) for 

other arrangements or facilities, on such terms and 

conditions as the Commission deems appropriate, 

including but not limited to, the applicability of 

other regulatory regimes.’’ See 17 CFR 35.2(d). The 

Commission has granted three such exemptions, 

which have in each instance been styled as 

exemptive orders pursuant to CEA section 4(c). See 

1. Order (1) Pursuant to Section 4(c) of the 

Commodity Exchange Act (a) Permitting Eligible 

Swap Participants To Submit for Clearing and ICE 

Clear U.S., Inc. and Futures Commission Merchants 

To Clear Certain Over-The-Counter Agricultural 

Swaps and (b) Determining Certain Floor Brokers 

and Traders To Be Eligible Swap Participants; and 

(2) Pursuant to Section 4d of the Commodity 

Exchange Act, Permitting Certain Customer 

Positions in the Foregoing Swaps and Associated 

Further, section 733 of the Dodd-Frank 

Act, new CEA section 5h(b)(2), provides 

that a swap execution facility (‘‘SEF’’) 

may not list for trading or confirm the 

execution of any swap in an agricultural 

commodity (as defined by the 

Commission) except pursuant to a rule 

or regulation of the Commission 

allowing the swap under such terms and 

conditions as the Commission shall 

prescribe. 

As a result of the Dodd-Frank 

changes, on February 3, 2011, the 

Commission published in the Federal 

Register a notice of proposed 

rulemaking to withdraw current part 35 

of the Commission’s regulations 5 and 

replace it with a new part 35 that would 

essentially permit the transaction of 

swaps in an agricultural commodity (or, 

‘‘agricultural swaps’’) 6 subject to the 

same rules and regulations applicable to 

any other swap (the ‘‘NPRM’’).7 The 

NPRM was preceded by an advanced 

notice of proposed rulemaking wherein 

the Commission sought general 

comment on the agricultural swaps 

provisions in the Dodd-Frank Act (the 

‘‘ANPRM’’).8 The NPRM included an 

overview and summary of the comments 

received on the ANPRM, which 

generally favored treating agricultural 

swaps the same as every other swap. 

C. Proposed Commodity Options Rules 

Because the Dodd-Frank Act statutory 

definition of a swap includes 

commodity options (other than options 

on futures),9 the NPRM also included 

proposed provisions that would 

substantially amend the Commission’s 

regulations regarding commodity option 

transactions. At this time, the 

Commission is only finalizing the rules 

for agricultural swaps in amended part 

35 of the Commission’s regulations. The 

proposed rules for commodity options— 

including proposed amendments to 

parts 3, 32, and 33—will be addressed 

at a later date. 

D. Final Agricultural Swaps Rules 

Accordingly, the preamble to this 

final rule reviews the statutory and 

regulatory framework governing 

agricultural swaps, as discussed in the 

NPRM,10 provides an overview and 

summary of the comments received on 

the agricultural swaps rules proposed in 

the NPRM, and includes an explanation 

of the final rules issued herein. This 

preamble also includes a discussion of 

CEA section 4(c), the primary statutory 

authority for the agricultural swaps 

rules,11 and a detailed discussion of the 

costs and benefits of the final rule, along 

with a review of those comments 

specifically addressing the costs and 

benefits of the proposed agricultural 

swaps rules. 

II. Agricultural Swaps Background 

A. Pre Dodd-Frank Swaps Provisions 

As explained in the NPRM, beginning 

in 2000, bilateral swaps between certain 

sophisticated counterparties were 

generally exempted from the 

Commission’s jurisdiction pursuant to 

pre Dodd-Frank CEA section 2(g),12

which was added to the CEA by the 

Commodity Futures Modernization Act 

of 2000 (‘‘CFMA’’).13 However, pre 

Dodd-Frank section 2(g) specifically 

excluded an ‘‘agreement, contract, or 

transaction’’ in an ‘‘agricultural 

commodity’’ from the CFMA swaps 

exemption.14 While the term 

‘‘agricultural commodity’’ is not 

specifically defined in the Act, the 

Commission recently adopted a final 

rule defining ‘‘agricultural 

commodity.’’ 15

The effect of the pre Dodd-Frank CEA 

sections explicitly excluding 

agricultural commodities from the 

CFMA statutory swaps exemptions and 

exclusions was that swaps involving 

exempt and excluded commodities were 

allowed to transact largely outside of the 

Commission’s jurisdiction or oversight, 

while swaps in agricultural 

commodities had to continue to rely on 

authority found in pre-CFMA law. As 

discussed in greater detail below, that 

pre-CFMA authority was found in part 

35 of the Commission’s regulations. 

Part 35 originally provided a broad 

exemption for certain swap agreements 

and applied to swaps in all 

commodities.16 After the CFMA 

amendments to the CEA, which 

statutorily exempted swaps on 

‘‘exempt’’ and ‘‘excluded’’ commodities 

from virtually all of the Commission’s 

jurisdiction, part 35 remained relevant 

only for agricultural swaps. With the 

exception of three outstanding 

exemptive orders related to cleared 

agricultural basis and calendar swaps 17

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Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Rules and Regulations 49293 

Property To Be Commingled With Other Property 

Held in Segregated Accounts, 73 FR 77015, Dec. 18, 

2008; 

2. Order (1) Pursuant to Section 4(c) of the 

Commodity Exchange Act, Permitting the Chicago 

Mercantile Exchange to Clear Certain Over-theCounter Agricultural Swaps and (2) Pursuant to 

Section 4d of the Commodity Exchange Act, 

Permitting Customer Positions in Such ClearedOnly Contracts and Associated Funds To Be 

Commingled With Other Positions and Funds Held 

in Customer Segregated Accounts, 74 FR 12316, 

Mar. 24, 2009; and 

3. Order (1) Pursuant to Section 4(c) of the 

Commodity Exchange Act, Permitting the Kansas 

City Board of Trade Clearing Corporation To Clear 

Over-the-Counter Wheat Calendar Swaps and (2) 

Pursuant to Section 4d of the Commodity Exchange 

Act, Permitting Customer Positions in Such 

Cleared-Only Swaps and Associated Funds To Be 

Commingled With Other Positions and Funds Held 

in Customer Segregated Accounts, 75 FR 34983, 

June 21, 2010. 

18 Issues related to options on agricultural 

commodities were reviewed in detail in the NPRM, 

76 FR 6095 at 6097–98, Feb. 3, 2011. As noted 

above, final rules regarding the post Dodd-Frank 

treatment of commodity options will be addressed 

by the Commission at a later date. 

19 ‘‘Eligible contract participant’’ is defined in 

CEA section 1a(18). A proposal to further define the 

term is also currently pending. See 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 

(joint rulemaking with Securities and Exchange 

Commission (‘‘SEC’’). The comment period closed 

February 22, 2011. 

20A designated contract market is a board of trade 

designated as a contract market under CEA section 

5. 

21See new CEA section 2(e) as added by section 

723(a)(2) of the Dodd-Frank Act. 

22The requirements for SEFs are set forth in new 

CEA section 5h. 

23 ‘‘Swap dealer’’ is defined in new CEA section 

1a(49), as added by section 721(a)(21) of the DoddFrank Act. ‘‘Major swap participant’’ is defined in 

new CEA section 1a(33), as added by section 

721(a)(16) of the Dodd-Frank Act. 

24See the recently adopted definition of 

agricultural commodity at 76 FR 41048, July 13, 

2011. 

25 Generally speaking, section 4(c) provides that, 

in order to grant an exemption, the Commission 

must determine that: (1) The exemption would be 

consistent with the public interest and the purposes 

of the CEA; (2) any agreement, contract, or 

transaction affected by the exemption would be 

entered into by ‘‘appropriate persons’’ as defined in 

section 4(c); and (3) any agreement, contract, or 

transaction affected by the exemption would not 

have a material adverse effect on the ability of the 

Commission or any contract market to discharge its 

regulatory or self-regulatory duties under the CEA. 

(which orders exempt certain swaps 

transactions from part 35’s nonfungibility and counterparty 

creditworthiness requirements), part 35 

is the sole existing authority under 

which market participants may transact 

agricultural swaps that are not 

options.18

B. Dodd-Frank Swaps Provisions 

i. Non-Agricultural Swaps 

As explained in the introduction, the 

Dodd-Frank Act amended the CEA to 

remove the CFMA swaps exemptions 

and exclusions and to create a new 

regulatory regime for swaps. Under the 

CEA, as amended by the Dodd-Frank 

Act, only eligible contract participants 

(‘‘ECPs’’) 19 may enter into a swap, 

unless such swap is entered into on a 

designated contract market (‘‘DCM’’),20

in which case any person may enter into 

the swap.21

New CEA section 2(h), as added by 

section 723(a)(3) of the Dodd-Frank Act, 

establishes a clearing requirement for 

swaps. Under that subsection, the 

Commission would determine, based on 

factors listed in the statute, whether a 

swap, or a group, category, type, or class 

of swaps, should be required to be 

cleared. A swap that is required to be 

cleared must be executed on a DCM or 

a SEF,22 if a DCM or SEF makes the 

swap available for trading. Swaps that 

are not required to be cleared may be 

executed bilaterally. 

Section 731 of the Dodd-Frank Act 

adds a new section 4s to the CEA that 

provides for the registration and 

regulation of swap dealers and major 

swap participants.23 The new 

requirements for swap dealers and 

major swap participants include, in 

part, capital and margin requirements, 

business conduct standards, and 

reporting, recordkeeping, and 

documentation requirements. 

Section 737 of the Dodd-Frank Act 

amends current CEA section 4a 

regarding position limits. Under the 

Dodd-Frank provisions and amended 

CEA section 4a, the Commission is 

directed to establish position limits as 

appropriate for futures and options 

traded on or subject to the rules of a 

designated contract market, and swaps 

that are economically equivalent to such 

futures and exchange-traded options for 

both exempt and agricultural 

commodities. 

ii. Agricultural Swaps 

Notwithstanding the new swaps 

regime in the Dodd-Frank Act, section 

723(c)(3) of Dodd-Frank prohibits swaps 

in an ‘‘agricultural commodity’’ (as 

defined by the Commission) 24 unless 

the swap is entered into pursuant to an 

exemption granted under CEA section 

4(c). The requirements of section 4(c) 

are discussed in greater detail, below.25

Dodd-Frank section 723(c)(3)(B) 

includes a ‘‘grandfather’’ clause 

providing that any rule, regulation, or 

order regarding agricultural swaps that 

was issued pursuant to the 

Commission’s section 4(c) exemptive 

authority, and that was in effect on the 

date of enactment of the Dodd-Frank 

Act, would continue to be permitted 

under such terms and conditions as the 

Commission may prescribe. Such rules, 

regulations or orders include part 35 

with respect to agricultural swaps and 

the agricultural basis and calendar 

swaps noted above. 

In addition to the provisions in 

section 723(c)(3), section 733 of the 

Dodd-Frank Act, new CEA section 

5h(b), provides that a SEF may not list 

for trading or confirm the execution of 

any swap in an agricultural commodity 

(as defined by the Commission) except 

pursuant to a rule or regulation of the 

Commission allowing the swap under 

such terms and conditions as the 

Commission shall prescribe. 

III. Agricultural Swaps Proposal in the 

NPRM 

The NPRM proposed repealing 

existing part 35 in its entirety and 

replacing it with the following: 

PART 35—SWAPS IN AN 

AGRICULTURAL COMMODITY 

(AGRICULTURAL SWAPS) 

§ 35.1 Agricultural swaps, generally. 

(a) Any person or group of persons 

may offer to enter into, enter into, 

confirm the execution of, maintain a 

position in, or otherwise conduct 

activity related to, any transaction in 

interstate commerce that is a swap in an 

agricultural commodity subject to all 

provisions of the Act, including any 

Commission rule, regulation, or order 

thereunder, otherwise applicable to any 

other swap; and 

(b) In addition to paragraph (a) of this 

section, any transaction in interstate 

commerce that is a swap in an 

agricultural commodity may be 

transacted on a swap execution facility, 

designated contract market, or otherwise 

in accordance with all provisions of the 

Act, including any Commission rule, 

regulation, or order thereunder, 

applicable to any other swap eligible to 

be transacted on a swap execution 

facility, designated contract market, or 

otherwise. 

In the NPRM, the Commission requested 

specific input on the following 

questions related to the agricultural 

swaps proposal: 

1. Generally, would the proposed 

rulemaking provide an appropriate 

regulatory framework for the transacting 

of agricultural swaps? 

2. Does the proposal for new part 35 

appropriately address all outstanding 

issues as they relate to the transaction 

of swaps in an agricultural commodity? 

3. By limiting participation in 

agricultural swaps that are transacted 

outside of a DCM to persons that meet 

the CEA definition of an eligible 

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49294 Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Rules and Regulations 

26The public comment file for the NPRM is 

available at: http://comments.cftc.gov/ 

PublicComments/CommentList.aspx?id=968. This 

summary references each of the comments that 

substantively addressed the NPRM, whether 

submitted in response to the original NPRM or in 

response to the re-opened comment period. See 

Reopening and Extension of Comment Periods for 

Rulemakings Implementing the Dodd-Frank Wall 

Street Reform and Consumer Protection Act, 76 FR 

25274, May 4, 2011 (this is the Commission’s 

Federal Register release that extended the comment 

deadline for multiple Dodd-Frank rulemakings to 

June 3, 2011). Only those comments submitted in 

response to 76 FR 25274 that specifically addressed 

the agricultural swaps proposal are included in this 

summary. In addition, the comment file for the 

NPRM also included multiple comments that did 

not directly address the Commodity Options and 

Agricultural Swaps NPRM (for example, see the 

comments from Majed El Zein, B.J. D’Milli, 

Maryknoll Office for Global Concerns, Maryknoll 

Fathers and Brothers, J.C. Hoyt, and Jon Pike). Of 

these, several addressed other proposed 

Commission rulemakings, and those comments are 

being considered in conjunction with the other 

rulemakings. 

27See, e.g., comments from The Financial 

Services Roundtable, which represents 100 of the 

largest integrated financial services companies in 

the United States; Edison Electric Institute and 

Electric Power Supply Association; Federal Energy 

Regulatory Commission; American Public Gas 

Association (‘‘APGA’’), which represents publiclyowned natural gas distribution systems; Air 

Transport Association of America (‘‘ATA’’); Amcot, 

an association of U.S. cotton marketing 

cooperatives; Coalition of Physical Energy 

Companies, an association of businesses that 

produce, process, and merchandize energy 

commodities at retail and wholesale levels; 

National Rural Electric Cooperative Association, 

American Public Power Association, and Large 

Public Power Council, all representing U.S. not-forprofit consumer-owned electric utilities in a joint 

letter; Working Group of Commercial Energy Firms, 

a group of unspecified firms which indicated that 

their primary business is the physical delivery of 

energy commodities to industrial, commercial and 

residential consumers; and Hess Corporation. 

28See, e.g., comments filed on the Commission’s 

Federal register release that re-opened the comment 

period (76 FR 25274, May 4, 2011) from the 

Commodity Options and Agricultural Swaps 

Working Group; INTL FCStone Inc.; NEW 

Cooperative Inc.; NGFA; NCFC; and Innovative Ag 

Services Co. 

29CEA section 4(c)(2) requires the CFTC to 

determine, prior to granting a 4(c) exemption, that 

(1) Such exemption is consistent with the public 

interest and purposes of the CEA, and (2) the 

exempted agreement, contract, or transaction will 

contract participant and permitting nonECPs to enter into a swap on a DCM, has 

the proposed rulemaking satisfied the 

requirements of CEA section 4(c)(3), 

which requires that any agreements, 

contracts or transactions exempted 

under this provision should be limited 

to those ‘‘entered into solely between 

appropriate persons?’’ 

4. Do the proposals omit or fail to 

appropriately consider any other areas 

of concern regarding agricultural swaps? 

IV. Summary of Comments 

A. General Overview 

Thirty-one formal comment letters 

substantively addressed the NPRM,26

representing a broad range of interests, 

including agricultural producers, 

merchants, swap dealers, commodity 

funds, futures industry organizations, 

academics/think tanks, a US 

government agency, and private 

individuals. The comments addressing 

the agricultural swaps proposal came 

from Gavilon Group, LLC (‘‘Gavilon’’), a 

feed manufacturer; the Agricultural 

Commodity Swaps Working Group (a/k/ 

a ‘‘Commodity Options and Agricultural 

Swaps Working Group’’), which is 

comprised of financial institutions, 

including Barclays Capital, Citigroup, 

Credit Suisse Securities (USA) LLC, 

JPMorgan Chase & Co., Morgan Stanley, 

and Wells Fargo & Company, that 

provide risk management and 

investment products to agricultural endusers; Chris Barnard, an individual; 

Dairy Farmers of America (‘‘DFA’’); the 

Independent Bakers Association, which 

represents over 200 small to medium 

sized, mostly family owned wholesale 

bakeries and allied industry trades; 

NextEra Energy Resources, LLC, owners 

of electricity generation assets; CME 

Group, Inc. (‘‘CME’’); Futures Industry 

Association and International Swaps 

and Derivatives Association (‘‘FIA & 

ISDA’’); National Grain and Feed 

Association (‘‘NGFA’’); Professor 

Michael Greenberger, University of 

Maryland School of Law, referencing his 

comment letter submitted for the 

agricultural commodity definition 

notice of proposed rulemaking; National 

Council of Farmer Cooperatives 

(‘‘NCFC’’); Commodity Markets Council 

(‘‘CMC’’), a trade association made up of 

U.S. futures exchanges and commercial 

end-users of futures and derivatives 

markets; and National Milk Producers 

Federation (‘‘NMPF’’). In addition, the 

NPRM received several comments that 

only addressed options,27 and several 

comments requesting exemptive relief 

for the transition period following the 

effective date of the Dodd-Frank Act.28

B. Comments on the Agricultural Swaps 

Proposal 

Just as with the comments received on 

the ANPRM, the vast majority of 

commenters who expressed an opinion 

on the topic supported treating 

agricultural swaps under the same 

regulatory scheme as other categories of 

swaps, as the Commission proposed. 

The following statements are 

representative of this sentiment: 

The use of agricultural swaps has been 

constrained relative to other swaps by virtue 

of being subject to CFTC regulatory 

requirements, while other swaps have been 

exempted from CFTC oversight. As the 

Commission’s proposed rule notes, the 

passage of the Dodd-Frank Act changes the 

regulatory structure for all swaps and 

institutes a number of safeguards, including 

the limitation that only eligible contract 

participants (ECPs) may engage in swaps 

unless entered into on a designated contract 

market; mandatory clearing requirements for 

swaps; and registration, reporting, business 

standards, and capital and margining 

requirements for swap dealers and major 

swap participants. The NGFA believes that 

these safeguards provide more-than-ample 

protection in the swaps marketplace for both 

agricultural and non-agricultural swaps and 

that there is no compelling reason to place 

additional burdens on agricultural swaps.’’ 

NGFA letter at 2. 

In our view, applying a single, uniform set 

of rules to all swaps will advance the public 

interests that Dodd-Frank and the CEA are 

designed to promote and benefit the users of 

these products.’’ CME letter at 1. 

We are pleased that, if enacted, the [NPRM] 

would revise existing CFTC regulations in 

order to treat agricultural commodity swaps 

as ‘‘swaps,’’ subjecting them to the same 

regulatory regime as all other commodity 

swap transactions under Dodd-Frank.’’ FIA & 

ISDA letter at 2. 

NCFC believes the changes and 

amendments in the proposed rule will 

provide an appropriate regulatory framework 

for the transacting of agricultural swaps. 

NCFC letter at 1. 

Similar sentiments were expressed by 

Gavilon, Amcot, CMC, the Commodity 

Options and Agricultural Swaps 

Working Group, and Barnard. 

One comment, from the National Milk 

Producers Foundation (NMPF), 

suggested that the Commission use its 

CEA section 4(c) authority to provide a 

broad-based exemption exclusively 

tailored for agricultural swaps 

transactions by certain agricultural endusers to transact outside of much of the 

Dodd-Frank swaps regime. The 

Commission believes that the logical 

place to address end-user concerns, 

such as those raised by the NMPF 

comment, is in the participant 

definitions and the end-user rules, 

which are yet to be finalized. The NMPF 

comment letter has been included in the 

record for those rulemakings. 

Addressing the concerns of end-users 

generally, rather than creating special 

rules for agricultural end-users, is 

consistent with the Commission’s 

proposed approach to treat agricultural 

swaps the same as all other swaps. 

C. Comments Regarding Whether the 

Agricultural Swaps Proposal Satisfies 

the CEA Section 4(c) Requirements 

Commenters generally expressed the 

opinion that the proposal to allow 

agricultural swaps to be treated the 

same as other commodity swaps meets 

the requirements of Section 4(c)(2) of 

the CEA.29 CME noted the robust 

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Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Rules and Regulations 49295 

be entered into solely by appropriate persons and 

will not have a material adverse effect on the ability 

of the Commission or a contract market to discharge 

its regulatory or self-regulatory duties under the 

CEA. 

30See End-User Exception to Mandatory Clearing 

of Swaps, 75 FR 80747, Dec. 23, 2010 (comment 

period closed June 3, 2011). 

31See 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 (joint rulemaking with 

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

comment period closed June 3, 2011). 

32See Characteristics Distinguishing Cash and 

Forward Contracts and ‘‘Trade’’ Options, 

Interpretive Statement of the Commission’s General 

Counsel, 50 FR 39656, Sept. 30, 1985, regarding the 

differences between forward contracts and options. 

33A book-out is a separate, subsequent agreement 

whereby two commercial parties to a forward 

contract, who find themselves in a delivery chain 

or circle at the same delivery point, can agree to 

settle (or ‘‘book-out’’) their delivery obligations by 

exchanging a net payment. See Statutory 

Interpretation Regarding Forward Transactions, 55 

FR 39188, Sept. 25, 1990. 

34See footnote 31, above. 

35 ‘‘[Part 35 * * *] exempt[s] swap agreements (as 

defined herein) meeting specified criteria from 

regulation under the Commodity Exchange Act (the 

‘‘Act’’). This rule was proposed pursuant to 

authority recently granted the Commission, a 

purpose of which is to give the Commission a 

means of improving the legal certainty of the market 

for swaps agreements.’’ 58 FR 5587, Jan. 22, 1993. 

36Recall that original part 35 was adopted 

pursuant to CEA sections 4(c) and 4c(b). The 

Commission is clarifying now that the new part 35, 

which will apply only to swaps in agricultural 

Continued 

regulatory regime introduced for the 

trading of all swaps under the DoddFrank Act and stated that ‘‘permitting 

agricultural swaps to transact under the 

same terms and conditions as other 

swaps will provide greater certainty and 

stability to the agricultural swaps 

market and will advance many of DoddFrank’s goals, including increased pretrade price transparency, and the 

reduction of systemic risk through the 

use of central counterparty 

clearinghouses.’’ Commenters also 

believed that the proposal would satisfy 

the Section 4(c)(2) requirement that 

transactions subject to this exemption 

would only be entered into by 

appropriate persons. In this regard, CME 

noted that ‘‘Under Dodd-Frank, only 

market participants that qualify as 

eligible contract participants (‘ECPs’) 

may trade swaps in the OTC market. All 

other market participants must trade 

swaps on, or subject to the rules of, a 

DCM, where they will have the full 

protections that all DCM users enjoy 

* * * these provisions should limit 

participation in agricultural swaps to 

appropriate persons.’’ Similar 

sentiments were expressed by Gavilon, 

FIA & ISDA, NCFC, and the Commodity 

Options and Agricultural Swaps 

Working Group. 

One commenter (Professor 

Greenberger) was generally opposed to 

the trading of agricultural swaps under 

the same conditions as other physical 

commodity swaps. This commenter 

expressed the belief that speculative 

investment in agricultural derivatives 

‘‘is incontrovertibly a main driving force 

of rising commodity prices and price 

volatility,’’ and that such price 

instability harms agricultural producers. 

He believes that Congress specifically 

intended for the CFTC to provide 

special protections to agricultural 

producers in trading swaps and that the 

rulemaking runs counter to Congress’ 

intent by providing for equal treatment 

of agricultural swaps and all other 

commodity swaps. However, Professor 

Greenberger did not offer an alternative 

approach, and the Commission does not 

find further reasoning to support 

treating agricultural swaps in a manner 

different than any other swap. 

D. Comments on the Treatment of 

Commodity Options 

As noted above, the options issues 

raised in the NPRM received multiple 

substantive comments, which will be 

addressed by the Commission at a later 

date. 

E. Issues Outside the Scope of the 

Proposed Rulemaking 

Although recognizing that their 

comments were outside the scope of the 

subject rulemaking, several commenters 

requested that the Commission provide 

clarity regarding the treatment of certain 

types of swap participants and 

transactions within the overall 

regulatory scheme for swaps. In this 

regard, several commenters requested 

that the Commission clarify that 

agricultural producer cooperatives that 

enter into swaps with their own 

members or third parties in the course 

of marketing their members’ agricultural 

products should be considered to be 

end-users for purposes of the DoddFrank clearing exception, and further 

that the Commission should clarify that 

producer cooperatives are excluded 

from the definitions of swap dealer and 

major swap participant (see, for 

example, comments from NGFA, NCFC, 

and DFA). The Commission has issued 

proposed rules regarding: (1) The enduser exception to mandatory clearing of 

swaps pursuant to § 723 of the DoddFrank Act; 30 and (2) further definition 

of certain terms regarding market 

participants, including the terms ‘‘swap 

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

pursuant to § 712(d) of the Dodd-Frank 

Act.31 Accordingly, the Commission is 

considering those comments in the 

context of drafting the end-user 

exception and the participant 

definitions rules. 

CMC also requested that the 

Commission clarify that certain types of 

transactions (embedded options in 

forward contracts 32 and book-outs 33) 

fall within the definition of an excluded 

forward contract rather than the 

definition of a swap. Similarly, Amcot 

requested clarification that ‘‘equity 

trades’’ or ‘‘options to redeem’’ cotton 

from the U.S. Department of 

Agriculture’s Commodity Credit 

Corporation marketing loan program 

would not be considered swaps. The 

Working Group of Commercial Energy 

Firms provided several examples of 

‘‘transactions that energy market 

participants do not historically consider 

options, but nonetheless contain an 

element of optionality * * * and should 

not be regulated as swaps.’’ These 

include daily natural gas calls, 

wholesale full requirements contracts 

for power, tolling agreements in 

organized wholesale electricity markets, 

physical daily heat rate call options, and 

capacity contracts. APGA and ATA 

requested that the Commission clarify 

that certain variable amount delivery 

contracts that are common in the energy 

sector be excluded from the definition 

of a swap. Where applicable, those 

comments are being considered by the 

Commission, jointly with the SEC, in 

considering further definitions of terms 

regarding certain products, including 

the term ‘‘swap,’’ pursuant to § 712(d) of 

the Dodd-Frank Act.34

V. Explanation of the Final Rules for 

Swaps in an Agricultural Commodity 

A. Introduction 

After considering the complete record 

in this matter, including all comments 

on both the ANPRM and NPRM, the 

Commission is adopting the revisions to 

part 35 as proposed. Broadly speaking, 

the new rules will implement 

regulations whereby swaps in 

agricultural commodities may transact 

subject to the same rules as all other 

swaps. 

Specifically, the final rules adopted 

herein will operate to withdraw existing 

part 35 of the Commission’s 

regulations—thus withdrawing the 

provisions originally adopted in 1993 to 

provide legal certainty for the bilateral 

swaps market by largely exempting 

bilateral swaps meeting the part 35 

conditions from CEA regulation.35 In its 

place, pursuant to the exemptive 

authority in CEA section 4(c) and the 

Commission’s authority in CEA section 

4c(b),36 these final rules adopt a new 

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49296 Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Rules and Regulations 

commodities, is similarly adopted pursuant to the 

authorities found in CEA sections 4(c) and 4c(b). 

37Public Law 102–546 (Oct. 28, 1992). 

38While section 4(c) was amended by the DoddFrank Act, for the purposes of this rulemaking its 

function and effect have not changed. See 4(c) 

discussion, below. 

39As noted above, original part 35 was also 

adopted pursuant to the Commission’s authority in 

CEA section 4c(b). 

40See the original proposal at 57 FR 53627, Nov. 

12, 1992. See also 57 FR 58423, Dec. 28, 1992, 

extending the comment period for an additional 

fourteen days. 

41 58 FR 5587, Jan. 22, 1993. 

42See Effective Date for Swap Regulation, 76 FR 

42508, July 19, 2011 (effective July 14, 2011). As 

noted by the Commission in the transition relief, 

existing part 35 remains available until part 35 is 

repealed or replaced. 

43 In addition to 4(c), these final rules are also 

being adopted pursuant to the Commission’s 

authority under CEA section 4c(b)—just as original 

part 35 was adopted pursuant to both CEA section 

4(c) and 4c(b). 

44New section 4(c)(1) of the CEA, 7 U.S.C. 6(c)(1), 

as amended by the Dodd-Frank Act, 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), or from any 

other provision of this Act (except subparagraphs 

(C)(ii) and (D) of section 2(a)(1), except that— 

(A) Unless the Commission is expressly 

authorized by any provision described in this 

subparagraph to grant exemptions, with respect to 

amendments made by subtitle A of the Wall Street 

Transparency and Accountability Act of 2010— 

(i) With respect to— 

(I) Paragraphs (2), (3), (4), (5), and (7), paragraph 

(18)(A)(vii)(III), paragraphs (23), (24), (31), (32), 

(38), (39), (41), (42), (46), (47), (48), and (49) of 

section 1a, and sections 2(a)(13), (2)(c)(1)(D), 4a(a), 

4a(b), 4d(c), 4d(d), 4r, 4s, 5b(a), 5b(b), 5(d), 5(g), 

5(h), 5b(c), 5b(i), 8e, and 21; and 

(II) Section 206(e) of the Gramm-Leach-Bliley Act 

(Pub. L. 106–102; 15 U.S.C. 78c note); and 

(ii) In sections 721(c) and 742 of the Dodd-Frank 

Wall Street Reform and Consumer Protection Act; 

and 

(B) 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 

Commissions determine that the exemption would 

be consistent with the public interest. 

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

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

part 35 to provide the primary authority 

for transacting swaps in an agricultural 

commodity as authorized by sections 

723(c)(3) and 733 of the Dodd-Frank 

Act. 

B. Withdrawal of Current Part 35 

In enacting the Futures Trading 

Practices Act of 1992 (the ‘‘1992 Act’’),37

Congress added section 4(c) to the CEA 

and authorized the Commission, by 

rule, regulation, or order, to exempt any 

agreement, contract or transaction, or 

class thereof, from the exchange-trading 

requirement of CEA section 4(a), or 

(with minor exceptions not relevant 

here) from any other provision of the 

Act.38 Pursuant to its new authority in 

section 4(c),39 the Commission 

proposed in 1992 40 and adopted in 

1993 41 part 35 of the Commission’s 

regulations, generally exempting certain 

swap agreements from the CEA. As 

explained above, part 35 originally 

applied to all commodities—that is, 

exempt, excluded, and agricultural 

commodities. However, certain 

amendments to the CEA made by the 

CFMA had the effect of making part 35 

relevant only for swaps in agricultural 

commodities. 

The Dodd-Frank Act amends, repeals, 

or replaces many CEA sections added by 

the CFMA (including repealing the 

statutory exemptions for swaps in 

excluded and exempt commodities at 

pre Dodd-Frank CEA sections 2(d), 2(g), 

and 2(h)). To avoid any uncertainty as 

to whether the Commission will allow 

bilateral swaps in non-agricultural 

commodities to revert to reliance on 

existing part 35 for exemption from the 

CEA and the Dodd-Frank amendments, 

the Commission is now repealing and 

replacing current part 35 in its entirety. 

C. New Part 35 

The provisions of new part 35, as 

proposed in the NPRM and as adopted 

herein, generally provide that 

agricultural swaps may be transacted 

subject to all provisions of the CEA, and 

any Commission rule, regulation or 

order thereunder, that is otherwise 

applicable to swaps. New part 35 also 

clarifies that by issuing a rule allowing 

agricultural swaps to transact subject to 

the laws and rules applicable to all 

other swaps, the Commission is 

allowing agricultural swaps to transact 

on DCMs, SEFs, or otherwise to the 

same extent that all other swaps are 

allowed to trade on DCMs, SEFs, or 

otherwise. 

D. Effective Date 

The repeal of original part 35 and the 

rules in new part 35 shall become 

effective on December 31, 2011. This 

will coincide with the expiration of the 

4(c) transition relief promulgated by the 

Commission to accommodate the 

phasing in of the Dodd-Frank swaps 

rules.42

VI. Findings Pursuant to Section 4(c) 

As noted above, section 723(c)(3)(A) 

of the Dodd-Frank Act prohibits swaps 

in an agricultural commodity. However, 

section 723(c)(3)(B) of the Dodd-Frank 

Act explicitly provides that the 

Commission may permit swaps in an 

agricultural commodity pursuant to 

CEA section 4(c), the Commission’s 

general exemptive authority, ‘‘under 

such terms and conditions as the 

Commission shall prescribe.’’ 

Accordingly, the amendments to part 35 

adopted herein are adopted pursuant to 

CEA section 4(c), as amended by the 

Dodd-Frank Act.43

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

the CFTC to exempt any transaction or 

class of transactions from any of the 

provisions of the CEA (subject to 

exceptions not relevant here) in order to 

‘‘promote responsible economic or 

financial innovation and fair 

competition.’’ 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. 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

In order to analyze the effect of 

permitting agricultural swaps to trade 

under the same terms and conditions as 

other swaps, it is appropriate to 

examine some of the major components 

of the Dodd-Frank Act that apply to 

swaps generally. The Commission 

originally performed this review in the 

NPRM, and repeats the analysis here for 

convenient reference: Section 727 of the 

Dodd-Frank Act adds, among other 

things, a new CEA section 2(a)(13) that 

mandates that swap transaction and 

pricing data be made available to the 

public. Section 723(a)(3) of the DoddFrank Act adds a new CEA section 2(h) 

that provides that the Commission shall 

determine which swaps are subject to a 

mandatory clearing requirement. New 

CEA section 2(h) also provides that 

swaps that are required to be cleared 

must be executed on a DCM or SEF, if 

a DCM or SEF makes the swap available 

for trading. As noted above, part 35, as 

it is currently written, does not permit 

clearing of agricultural swaps and does 

not contemplate any reporting of 

agricultural swaps data. 

Permitting agricultural swaps to trade 

under the same terms and conditions as 

other swaps should provide greater 

certainty and stability to existing and 

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Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Rules and Regulations 49297 

46Section 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. 

47CEA section 3(b), 7 U.S.C. 5(b). 

48New CEA section 2(e), (7 U.S.C. 2(e)). 

49See, e.g., new CEA section 5(d) (7 U.S.C. 7(d)) 

as added by section 735(b) of the Dodd-Frank Act 

and amended CEA section 5c (7 U.S.C. 7a–2) as 

amended by section 745 of the Dodd-Frank Act. 

50 7 U.S.C. 19(a). 

emerging markets so that financial 

innovation and market development can 

proceed in an effective and competitive 

manner. Treating all swaps, including 

agricultural swaps, in a consistent 

manner should provide greater certainty 

to markets. The Dodd-Frank Act 

reporting and trade execution 

requirements should lead to greater 

market and price transparency, which 

may improve market competition, 

innovation, and development. 

Centralized clearing of agricultural 

swaps by robustly regulated central 

clearinghouses should reduce systemic 

risk and provide greater certainty and 

stability to markets by reducing 

counterparty risk. 

As noted above, the NPRM requested 

comment on whether swaps in 

agricultural commodities should be 

subject to the same legal requirements 

as swaps in other commodities. The 

overwhelming majority of those 

comments, as summarized above, did in 

fact support treating agricultural swaps 

the same as every other swap. Further, 

no commenter offered a persuasive 

argument for treating agricultural swaps 

differently than other swaps under the 

Dodd-Frank Act. Thus, no commenter 

demonstrated that the proposal to treat 

agricultural swaps the same as every 

other swap failed to ‘‘promote 

responsible economic or financial 

innovation and fair competition.’’ 

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; that 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.46

The purposes of the CEA include 

‘‘ensur[ing] the financial integrity of all 

transactions subject to this Act and the 

avoidance of systemic risk’’ and 

‘‘promot[ing] responsible innovation 

and fair competition among boards of 

trade, other markets and market 

participants.’’ 47 As noted above, 

centralized clearing of agricultural 

swaps (which is not permitted under the 

current part 35 rules) should reduce 

systemic risk. Also, allowing 

agricultural swaps to trade under the 

general swaps rules contained in the 

Dodd-Frank Act would allow 

agricultural swaps to trade on SEFs and 

DCMs (which is prohibited under the 

current part 35 rules) which may result 

in increased innovation and 

competition in the agricultural swaps 

market. Reducing systemic risk and 

increasing innovation and competition 

by permitting agricultural swaps to 

trade under the same terms and 

conditions as other swaps would be 

consistent with the purposes listed 

above, the general purposes of the CEA, 

and the public interest. 

As noted above, the Dodd-Frank Act 

contains substantial new clearing and 

trade execution requirements for swaps. 

The clearing requirement is designed, 

among other things, to reduce the 

counterparty risk of a swap, and 

therefore to reduce systemic risk. The 

swap reporting and trade execution 

requirements should provide additional 

market information to the Commission, 

the markets, and the public. Thus, 

treating agricultural swaps in the same 

manner as other swaps may enhance the 

ability of the Commission or 

Commission-regulated markets to 

discharge their regulatory or selfregulatory responsibilities under the 

CEA. 

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.’’ Section 723(a)(2) of the 

Dodd-Frank Act adds, among other 

things, a new CEA section 2(e) that 

provides: ‘‘It shall be unlawful for any 

person, other than an eligible contract 

participant, to enter into a swap unless 

the swap is entered into on, or subject 

to the rules of, a [DCM].’’ 48 In light of 

the comprehensive new regulatory 

scheme for swaps and the 

enhancements made to the already 

robust regulatory system concerning 

DCMs 49 that are contained in the DoddFrank Act, the limitation on 

participation to eligible contract 

participants outside of a DCM, and the 

ability of others to enter into a swap on 

a DCM, should limit participation to 

appropriate persons. The Commission 

requested comment on its analysis of 

both section 4(c)(2) and section 4(c)(3). 

As noted in the comment summary 

above, those commenters addressing the 

question supported the Commission’s 

analysis under both 4(c)(2) and 4(c)(3). 

VII. Related Matters 

A. Cost Benefit Considerations 

Section 15(a) of the CEA 50 requires 

the Commission to consider the costs 

and benefits of its actions before issuing 

a rulemaking under the Act. By its 

terms, section 15(a) does not require the 

Commission to quantify the costs and 

benefits of the rulemaking or to 

determine whether the benefits of the 

rulemaking outweigh its costs; rather, it 

requires that the Commission 

‘‘consider’’ the costs and benefits of its 

actions. Section 15(a) further specifies 

that the 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 

rule is necessary or appropriate to 

protect the public interest or to 

effectuate any of the provisions or 

accomplish any of the purposes of the 

Act. 

i. Summary of Proposed Requirements 

The proposed rule will replace the 

swaps exemption in part 35 with new 

rules providing, in general, that 

agricultural swaps would be treated the 

same as all other swaps. As the 

Commission continues to propose and 

adopt rules implementing the DoddFrank Act, any costs associated with 

adhering to the substantive 

requirements that govern swaps 

generally are and will be addressed in 

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49298 Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Rules and Regulations 

51 ‘‘The NGFA believes that these [Dodd-Frank] 

safeguards provide more-than-ample protection in 

the swaps marketplace for both agricultural and 

non-agricultural swaps and that there is no 

compelling reason to place additional burdens on 

agricultural swaps.’’ NGFA letter at 2. See also the 

Commodity Options and Agricultural Swaps 

Working Group letters. Also, ‘‘In our view, applying 

a single, uniform set of rules to all swaps will 

advance the public interests that Dodd-Frank and 

the CEA are designed to promote and benefit the 

users of these products.’’ CME letter at 1. 

52 ‘‘[S]treamling swap regulation so that 

agricultural swaps are treated the same as other 

swaps will enable the Commission and 

Commission-regulated markets to discharge their 

regulatory duties more efficiently.’’ CME letter at 2; 

see also CMC letter and Barnard letter. 

53 ‘‘By applying the same regulatory structure and 

requirements to agricultural swaps as to other 

commodity swaps, the [NPRM] will promote legal 

certainty and an efficient allocation of compliance 

resources. * * * The costs of imposing an 

alternative regulatory structure on this important 

and well-functioning market would substantially 

outweigh any benefits. It could also make it more 

difficult for agricultural market participants to 

hedge their commercial risks.’’ See Commodity 

Options and Agricultural Swaps Working Group 

4/11/11 letter at 2–3; see also Gavilon letters. 

54 ‘‘[A] consistent approach to the regulation of all 

types of commodity swaps would eliminate the 

need to impose additional conditions on 

agricultural swaps. Equivalent treatment also would 

increase regulatory certainty in commodity markets 

by allowing market participants to structure 

documentation and compliance protocols 

consistently across commodity desks. Applying 

many aspects of the Dodd-Frank Act to agricultural 

swaps on an equivalent basis as other commodity 

swaps (e.g., registration, clearing, and reporting) 

also would promote the Commission’s stated 

mission of bringing more transparency to the OTC 

derivatives markets.’’ Commodity Options and 

Agricultural Swaps Working Group 10/29/10 letter 

at 6. 

55 5 U.S.C. 601 et seq. 

56See, respectively and as indicated, 47 FR 

18618, 18619, Apr. 30, 1982 (DCMs, CPOs, FCMs, 

and large traders); 66 FR 45604, at 45609, Aug. 29, 

2001 (DCOs); 66 FR 20740, 20743, Apr. 25, 2001 

(ECPs); and 57 FR 53627, 53630, Nov. 12, 1992 and 

58 FR 5587, 5593, Jan. 22, 1993 (ESPs). 

those various rulemakings applying to 

swaps generally. For purposes of this 

discussion, the Commission 

appropriately considers the costs and 

benefits of treating agricultural swaps as 

all other swaps are treated—as 

compared to adopting or maintaining a 

separate regulatory regime for 

agricultural swaps. The Commission has 

determined that treating agricultural 

swaps the same as other swaps would 

result in lower regulatory cost to both 

market participants and the 

Commission, because such treatment 

would eliminate dual regulatory regimes 

with which market participants must 

comply and the Commission must 

oversee. 

ii. Market and Public Concern 

(1) Protection of market participants 

and the public. The Dodd-Frank Act 

added numerous provisions to the CEA 

to protect market participants and the 

public, such as the segregation of funds 

for uncleared swaps, swap dealer 

registration and regulation that includes 

business conduct standards, and 

limitations on conflicts of interest. 

Current part 35 exempts qualifying 

swaps from nearly all sections of the 

CEA, so that these and other protections 

contained in Dodd-Frank would not 

apply to agricultural swaps entered into 

under part 35. As noted by commenters, 

in contrast to part 35, the new DoddFrank Act regulatory regime is both 

robust and comprehensive and will 

provide significant new protections to 

swap market participants.51

(2) Efficiency, competitiveness, and 

financial integrity of futures markets. 

Having a single set of regulations 

governing all swap transactions reduces 

compliance costs for markets and 

market participants, as well as eases the 

administrative burden on the 

Commission. Commenters agreed with 

this analysis.52 Furthermore, if the 

Commission did not permit agricultural 

swaps to transact subject to the same 

laws and rules as other commodity 

swaps, users of agricultural swaps that 

also engage in other types of swaps 

would be subject to dual regulatory 

regimes. These streamlined regulations 

may lead to improved efficiency, 

competitiveness and financial integrity 

of futures markets. 

(3) Price discovery. The Dodd-Frank 

Act contains numerous provisions 

designed to improve price discovery 

such as the provisions encouraging the 

clearing of swaps and the trading of 

swaps on DCMs and SEFs. For instance, 

the Dodd-Frank Act mandates that swap 

transaction and pricing data be made 

available to the public. This reporting 

and the Dodd-Frank trade execution 

requirements should foster greater 

market and price transparency, and thus 

better price discovery. 

(4) Sound risk management practices. 

Several commenters similarly noted that 

agricultural swaps are important risk 

management tools and that such swaps 

should be available on the same terms 

and conditions as other swaps that are 

used to manage risk.53 In contrast, 

original part 35, by its terms, would not 

generally allow for swaps that adhered 

to the clearing or trade execution 

provisions contained in Dodd-Frank. 

(5) Other public interest 

considerations. Treating agricultural 

swaps the same as other swaps would 

subject those swaps to the numerous 

provisions in the Dodd-Frank Act that 

protect market participants and the 

public, such as the segregation of funds 

for uncleared swaps, limitations on 

conflicts of interest, and swap dealer 

registration and regulation that includes 

business conduct standards.54

Moreover, the clearing requirement in 

the Dodd-Frank Act is intended to 

reduce systemic risk which should 

further protect the public. Thus, 

concerns that are special to agricultural 

swaps that might have existed under the 

pre Dodd-Frank regulatory regime may 

be allayed. 

iii. Conclusion 

After considering the section 15(a) 

factors, the Commission has determined 

that the benefits of amended part 35 

outweigh the costs. 

B. Regulatory Flexibility Analysis 

The Regulatory Flexibility Act 

(‘‘RFA’’) requires that agencies consider 

whether the rules they propose will 

have a significant economic impact on 

a substantial number of small entities 

and, if so, provide a regulatory 

flexibility analysis respecting the 

impact.55 The proposed rule, in 

replacing part 35, would affect eligible 

swap participants (‘‘ESPs’’) (by 

eliminating the ESP category and 

requiring agricultural swap participants 

to be eligible contract participants 

(‘‘ECPs’’), unless the transaction occurs 

on a designated contract market 

(‘‘DCM’’)). By mandating that 

agricultural swaps and options be 

treated as all other swaps, the effect of 

the proposed rule has the potential to 

affect DCMs, derivatives clearing 

organizations (‘‘DCOs’’), futures 

commission merchants (‘‘FCMs’’), large 

traders and ECPs, as well as swap 

dealers (‘‘SDs’’), major swap 

participants (‘‘MSPs’’), commodity pool 

operators (‘‘CPOs’’), swap execution 

facilities (‘‘SEFs’’), and swap data 

repositories (‘‘SDRs’’). 

i. DCMs, DCOs, FCMs, CPOs, large 

traders, ECPs, and ESPs. The 

Commission has previously determined 

that DCMs, DCOs, FCMs, CPOs, large 

traders, ECPs, and ESPs are not small 

entities for purposes of the Regulatory 

Flexibility Act.56 Accordingly, the 

Chairman, on behalf of the Commission, 

hereby certifies pursuant to 5 U.S.C. 

605(b) that these final rules will not 

have a significant economic impact on 

a substantial number of small entities 

with respect to these entities. 

ii. SDs, MSPs, SEFs, and SDRs. SDs, 

MSPs, SEFs, and SDRs are new 

categories of registrant under the DoddFrank Act. Therefore, the Commission 

has not previously addressed the 

question of whether SDs, MSPs, SEFs, 

and SDRs are, in fact, ‘‘small entities’’ 

for purposes of the RFA. For the reasons 

that follow, the Commission is hereby 

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Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Rules and Regulations 49299 

57 47 FR 18619. 

58 Id. at 18620. 

59 Id. 

60 47 FR at 18619 (DCMs) and 66 FR at 45609 

(DCOs). 

61See new CEA section 5(d), as added by section 

735(b) of the Dodd-Frank Act regarding DCM core 

principles and new CEA section 5b(c)(2), as added 

by section 725(c) of the Dodd-Frank Act regarding 

DCO core principles. 

62See new CEA section 21, as added by section 

728 of the Dodd-Frank Act. 

63 44 U.S.C. 3501 et seq. 

determining that none of these entities 

would be small entities. Accordingly, 

the Chairman, on behalf of the 

Commission, hereby certifies pursuant 

to 5 U.S.C. 605(b) that these final rules, 

with respect to SDs, MSPs, SEFs, and 

SDRs, will not have a significant impact 

on a substantial number of small 

entities. 

a. SDs: As noted above, the 

Commission previously has determined 

that FCMs are not small entities for the 

purpose of the RFA based upon, among 

other things, the requirements that 

FCMs meet certain minimum financial 

requirements that enhance the 

protection of customers’ segregated 

funds and protect the financial 

condition of FCMs generally.57 SDs 

similarly will be subject to minimum 

capital and margin requirements, and 

are expected to comprise the largest 

global financial firms. Entities that 

engage in a de minimis quantity of swap 

dealing in connection with transactions 

with or on behalf of its customers will 

be exempted from designation as an SD. 

For purposes of the RFA in this 

rulemaking, the Commission is hereby 

determining that SDs are not ‘‘small 

entities’’ for essentially the same 

reasons that FCMs have previously been 

determined not to be small entities. 

b. MSPs: The Commission also has 

determined that large traders are not 

small entities for the purpose of the 

RFA.58 The Commission considered the 

size of a trader’s position to be the only 

appropriate test for purposes of large 

trader reporting.59 MSPs, among other 

things, maintain substantial positions in 

swaps, creating substantial counterparty 

exposure that could have serious 

adverse effects on the financial stability 

of the United States banking system or 

financial markets. For purposes of the 

RFA, the Commission is hereby 

determining that MSPs are not ‘‘small 

entities’’ for essentially the same 

reasons that large traders have 

previously been determined not to be 

small entities. 

c. SEFs: The Dodd-Frank Act defines 

a SEF to mean a trading system or 

platform in which multiple participants 

have the ability to accept bids and offers 

made by multiple participants in the 

facility or system, through any means of 

interstate commerce, including any 

trading facility that facilitates the 

execution of swaps between persons 

and is not a DCM. The Commission has 

previously determined that a DCM is 

not a small entity because, among other 

things, it may only be designated when 

it meets specific criteria, including 

expenditure of sufficient resources to 

establish and maintain adequate selfregulatory programs. Likewise, the 

Commission will register an entity as a 

SEF only after it has met specific 

criteria, including the expenditure of 

sufficient resources to establish and 

maintain an adequate self-regulatory 

program. Accordingly, as with DCMs, 

the Commission is hereby determining 

that SEFs are not ‘‘small entities’’ for 

purposes of the RFA. 

d. SDRs: The Commission has 

previously determined that DCMs and 

DCOs are not small entities because of 

‘‘the central role’’ they play in ‘‘the 

regulatory scheme concerning futures 

trading.’’ 60 Because of the ‘‘importance 

of futures trading in the national 

economy,’’ to be designated as a 

contract market or registered as a DCO, 

the respective entity must meet 

stringent requirements set forth in the 

CEA.61 Similarly, swap transactions that 

are reported and disseminated by SDRs 

are an important part of the national 

economy. SDRs will receive data from 

market participants and will be 

obligated to facilitate swaps execution 

by reporting real-time data.62 Similar to 

DCOs and DCMs, SDRs will play a 

central role both in the regulatory 

scheme covering swaps trading and in 

the overall market for swap transactions. 

Additionally, the Dodd-Frank Act 

allows DCOs to register as SDRs. 

Accordingly, for essentially the same 

reasons that DCOs and DCMs have 

previously been determined not to be 

small entities, the Commission is hereby 

determining that SDRs are not ‘‘small 

entities’’ for purposes of the RFA. 

C. Paperwork Reduction Act 

Under the Paperwork Reduction Act 

(PRA),63 an agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid 

control number from the Office of 

Management and Budget (OMB). The 

Commission believes that these 

proposed rules will not impose any new 

information collection requirements that 

require approval of OMB under the 

PRA. 

In the NPRM, the Commission noted 

that, as a general matter, the proposed 

rules would allow agricultural swaps to 

trade under the same terms and 

conditions as all other swaps and that 

the proposed rules do not, by 

themselves, impose any new 

information collection requirements. 

The NPRM also noted that collections of 

information that may be associated with 

engaging in agricultural swaps are, or 

will be, addressed within each of the 

general swap-related rulemakings 

implementing the Dodd-Frank Act. The 

Commission requested public comment 

on the accuracy of its estimate that no 

additional information collection 

requirements or changes to existing 

collection requirements would result 

from the rules proposed herein, and 

none of the comments received 

addressed this request. 

Therefore, the Commission notes that, 

as a general matter, the final rules 

adopted herein will allow agricultural 

swaps to trade under the same terms 

and conditions as all other swaps and 

that the final rules do not, by 

themselves, impose any new 

information collection requirements. 

Collections of information that may be 

associated with engaging in agricultural 

swaps are, or will be, addressed within 

each of the general swap-related 

rulemakings implementing the DoddFrank Act. 

VIII. Final Rules 

List of Subjects in 17 CFR Part 35 

Commodity futures. 

In consideration of the foregoing and 

pursuant to the authority contained in 

the Act, as indicated herein, the 

Commission hereby amends chapter I of 

title 17 of the Code of Federal 

Regulations as follows: 

■ 1. Revise part 35 to read as follows: 

PART 35—SWAPS IN AN 

AGRICULTURAL COMMODITY 

(AGRICULTURAL SWAPS) 

Authority: 7 U.S.C. 2, 6(c), and 6c(b); and 

title VII, sec. 723(c)(3), Pub. L. 111–203, 124 

Stat. 1376, unless otherwise noted. 

§ 35.1 Agricultural swaps, generally. 

(a) Any person or group of persons 

may offer to enter into, enter into, 

confirm the execution of, maintain a 

position in, or otherwise conduct 

activity related to, any transaction in 

interstate commerce that is a swap in an 

agricultural commodity subject to all 

provisions of the Act, including any 

Commission rule, regulation, or order 

thereunder, otherwise applicable to any 

other swap; and 

(b) In addition to paragraph (a) of this 

section, any transaction in interstate 

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49300 Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Rules and Regulations 

commerce that is a swap in an 

agricultural commodity may be 

transacted on a swap execution facility, 

designated contract market, or otherwise 

in accordance with all provisions of the 

Act, including any Commission rule, 

regulation, or order thereunder, 

applicable to any other swap eligible to 

be transacted on a swap execution 

facility, designated contract market, or 

otherwise. 

Issued in Washington, DC, on August 4, 

2011, by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

Appendices to Agricultural Swaps— 

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 final rulemaking to authorize 

agricultural swap transactions and subject 

them to the same rules applicable to all other 

swaps transactions. The Dodd-Frank Wall 

Street Reform and Consumer Protection Act 

(Dodd-Frank Act) prohibits such transactions 

if the Commodity Futures Trading 

Commission (CFTC) does not specifically 

authorize them. The public comments the 

CFTC received overwhelmingly supported 

treating agricultural swaps the same as other 

swaps brought under regulation by the DoddFrank Act. Agricultural producers, 

processers, merchants and handlers will 

benefit from the ability to use agricultural 

swaps to hedge their risk and from the 

transparency of the Dodd-Frank Act. 

[FR Doc. 2011–20337 Filed 8–9–11; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9475] 

RIN 1545–BF83 

Corporate Reorganizations; 

Distributions Under Sections 

368(a)(1)(D) and 354(b)(1)(B); 

Correction 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Correcting amendment. 

SUMMARY: This document describes a 

correction to final regulations (TD 9475) 

that were published on Friday, 

December 18, 2009 (74 FR 67053). The 

regulations provide guidance regarding 

the qualification of certain transactions 

as reorganizations described in section 

368(a)(1)(D) where no stock and/or 

securities of the acquiring corporation is 

issued and distributed in the 

transaction. This document also 

contains final regulations under section 

358 that provide guidance regarding the 

determination of the basis of stock or 

securities in a reorganization described 

in section 368(a)(1)(D) where no stock 

and/or securities of the acquiring 

corporation is issued and distributed in 

the transaction. This document also 

contains final regulations under section 

1502 that govern reorganizations 

described in section 368(a)(1)(D) 

involving members of a consolidated 

group. 

DATES: This correction is effective on 

August 10, 2011 and is applicable on 

December 18, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Bruce A. Decker, (202) 622–7790 (not a 

toll-free number). 

SUPPLEMENTARY INFORMATION: 

Background 

The final regulations (TD 9475) that 

are the subject of this document are 

under sections 358, 368 and 1502 of the 

Internal Revenue Code. 

Need for Correction 

As published, the final regulations 

(TD 9475) contain an error that may 

prove to be misleading and is in need 

of clarification. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Correction of Publication 

Accordingly, 26 CFR part 1 is 

corrected by making the following 

correcting amendment: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 continues to read in part as 

follows: 

Authority: 26 U.S.C. 7805. * * * 

■ Par. 2. Section 1.1502–13 is amended 

by adding paragraph (l)(6) to read as 

follows: 

§ 1.1502–13 Intercompany transactions. 

* * * * * 

(l) * * * 

(6) Effective/applicability date. (i) In 

general. Paragraph (f)(7)(i) Example 4. 

applies to transactions occurring on or 

after December 18, 2009. 

(ii) [Reserved] 

* * * * * 

LaNita Van Dyke, 

Chief, Publications and Regulations Branch, 

Legal Processing Division, Associate Chief 

Counsel, (Procedure and Administration). 

[FR Doc. 2011–20224 Filed 8–9–11; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[Docket No. USCG–2011–0740] 

Drawbridge Operation Regulations; 

Pequonnock River, Bridgeport, CT, 

Maintenance 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of temporary deviation 

from regulations. 

SUMMARY: The Commander, First Coast 

Guard District, has issued a temporary 

deviation from the regulation governing 

the operation of the Metro North (Peck) 

Bridge across the Pequonnock River, 

mile 0.3, at Bridgeport, Connecticut. 

The deviation allows the bridge to 

remain in the closed position to 

facilitate miter rail repair. 

DATES: This deviation is effective from 

August 22, 2011 through November 30, 

2011. 

ADDRESSES: Documents mentioned in 

this preamble as being available in the 

docket are part of docket USCG–2011– 

0740 and are available online at 

http://www.regulations.gov, inserting 

USCG–2011–0740 in the ‘‘Keyword’’ 

and then clicking ‘‘Search.’’ They are 

also available for inspection or copying 

at the Docket Management Facility (M– 

30), U.S. Department of Transportation, 

West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue, SE., 

Washington, DC 20590, between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this rule, call or 

e-mail Ms. Judy Leung-Yee, Project 

Officer, First Coast Guard District, 

telephone (212) 668–7165, e-mail 

judy.k.leung-yee@uscg.mil. If you have 

questions on viewing the docket, call 

Renee V. Wright, Program Manager, 

Docket Operations, telephone 202–366– 

9826. 

SUPPLEMENTARY INFORMATION: The Metro 

North (Peck) Bridge, across the 

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