Federal Register / Vol. 76, No. 206 / Tuesday, October 25, 2011 / Proposed Rules 65999 

1See Dodd-Frank Wall Street Reform and 

Consumer Protection Act, Public Law 111–203, 124 

Stat. 1376 (2010). 

2 7 U.S.C. 1 et seq. 

3Title VII also includes amendments to the 

federal securities laws to establish a similar 

regulatory framework for security-based swaps 

under the authority of the Securities and Exchange 

Commission (‘‘SEC’’). 

4All of the amendments to the CEA in title VII 

are contained in subtitle A. Accordingly, for 

convenience, references to ‘‘title VII’’ in this notice 

of proposed amendment shall refer only to subtitle 

A of title VII. 

(f) Definitions 

For the purpose of this AD, an ‘‘engine 

shop visit’’ is induction of an engine into the 

shop for any purpose where: 

(1) All the blades are removed from the 

high-pressure (HP) compressor discs and the 

HP turbine disc, or 

(2) All the blades are removed from the 

intermediate pressure turbine disc. 

(g) Alternative Methods of Compliance 

(AMOCs) 

The Manager, Engine Certification Office, 

FAA may approve AMOCs for this AD. Use 

the procedures found in 14 CFR 39.19 to 

make your request. 

(h) Related Information 

(1) Contact Alan Strom, Aerospace 

Engineer, Engine Certification Office, FAA, 

Engine & Propeller Directorate, 12 New 

England Executive Park, Burlington, MA 

01803; phone: 781–238–7143; fax: 781–238– 

7199; e-mail: alan.strom@faa.gov, for more 

information about this AD. 

(2) Refer to MCAI European Aviation 

Safety Agency Airworthiness Directive 2009– 

0244, dated November 9, 2009, and RollsRoyce plc Alert Service Bulletin No. RB.211– 

72–AG272 for related information. Contact 

Rolls-Royce plc, P.O. Box 31, Derby, DE24 

8BJ, United Kingdom; phone: 011 44 1332 

242424, fax: 011 44 1332 249936; or e-mail: 

http://www.rollsroyce.com/contact/civil_

team.jsp, for a copy of this service 

information or download the publication 

from https://www.aeromanager.com. 

Issued in Burlington, Massachusetts, on 

October 18, 2011. 

Peter A White, 

Manager, Engine & Propeller Directorate, 

Aircraft Certification Service. 

[FR Doc. 2011–27512 Filed 10–24–11; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Chapter 1 

Effective Date for Swap Regulation 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice of proposed amendment. 

SUMMARY: On July 14, 2011, the 

Commodity Futures Trading 

Commission (‘‘CFTC’’ or the 

‘‘Commission’’) issued a final order 

(‘‘July 14 Order’’) that grants temporary 

exemptive relief from certain provisions 

of the Commodity Exchange Act 

(‘‘CEA’’) that otherwise would have 

taken effect on the general effective date 

of title VII of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (‘‘the Dodd-Frank Act’’)—July 16, 

2011. The July 14 Order grants 

temporary relief in two parts. The first 

part addresses those CEA provisions 

added or amended by title VII of the 

Dodd-Frank Act that reference one or 

more terms regarding entities or 

instruments that title VII requires be 

‘‘further defined’’ to the extent that 

requirements or portions of such 

provisions specifically relate to such 

referenced terms and do not require a 

rulemaking. The second part, which is 

based on part 35 of the Commission’s 

regulations, addresses certain provisions 

of the CEA that may apply to certain 

agreements, contracts, and transactions 

in exempt or excluded commodities as 

a result of the repeal of various CEA 

exemptions and exclusions as of the 

general effective date of July 16, 2011. 

This is a notice of a proposed 

amendment to that July 14 Order, 76 FR 

42508 (July 19, 2011), that would 

modify the temporary exemptive relief 

provided therein by extending the 

potential latest expiration date of the 

July 14 Order; and adding provisions to 

account for the repeal and replacement 

(as of December 31, 2011) of part 35 of 

the Commission’s regulations. Only 

comments pertaining to these proposed 

amendments to the July 14 Order will be 

considered as part of this notice of 

proposed amendment. 

DATES: Submit comments on or before 

November 25, 2011. 

ADDRESSES: Comments may be 

submitted, referenced as ‘‘Effective Date 

Amendments,’’ by any of the following 

methods: 

• Agency Web site, via its Comments 

Online process at http:// 

comments.cftc.gov. Follow the 

instructions for submitting comments 

through the Web site. 

• Mail: David A. Stawick, Secretary of 

the Commission, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street, NW., 

Washington, DC 20581. 

• Hand Delivery/Courier: Same as 

mail above. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Please submit your comments using 

only one method. 

All comments must be submitted in 

English, or if not, accompanied by an 

English translation. Comments will be 

posted as received to http:// 

www.cftc.gov. You should submit only 

information that you wish to make 

available publicly. If you wish the 

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 § 145.9 of the 

Commission’s regulations, 17 CFR 

145.9. 

The Commission reserves the right, 

but shall have no obligation, to review, 

pre-screen, filter, redact, refuse or 

remove any or all of your submission 

from http://www.cftc.gov that it may 

deem to be inappropriate for 

publication, such as obscene language. 

All submissions that have been redacted 

or removed that contain comments on 

the merits of the rulemaking will be 

retained in the public comment file and 

will be considered as required under the 

Administrative Procedure Act and other 

applicable laws, and may be accessible 

under the Freedom of Information Act. 

FOR FURTHER INFORMATION CONTACT: 

Terry Arbit, Deputy General Counsel, 

202–418–5357, tarbit@cftc.gov, or Mark 

D. Higgins, Counsel, 202–418–5864, 

mhiggins@cftc.gov, Office of the General 

Counsel, Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On July 21, 2010, President Obama 

signed the Dodd-Frank Act into law.1

Title VII of the Dodd-Frank Act amends 

the CEA 2 to establish a comprehensive 

new regulatory framework for swaps. 

The legislation was enacted to reduce 

risk, increase transparency, and promote 

market integrity within the financial 

system by, among other things: (1) 

Providing for the registration and 

comprehensive regulation of swap 

dealers and major swap participants; (2) 

imposing clearing and trade execution 

requirements on standardized derivative 

products; (3) creating robust 

recordkeeping and real-time reporting 

regimes; and (4) enhancing the 

rulemaking and enforcement authorities 

of the Commission with respect to, 

among others, all registered entities and 

intermediaries subject to the 

Commission’s oversight.3

Section 754 of the Dodd-Frank Act 

states that, unless otherwise provided, 

the provisions of subtitle A of title VII 

of the Dodd-Frank Act 4 ‘‘shall take 


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5These exclusions and exemptions were 

contained in former CEA sections 2(d), 2(e), 2(g), 

2(h), and 5d, 7 U.S.C. 2(d), 2(e), 2(g), 2(h), and 7a– 

3. 

6Section 712(d)(1) provides: ‘‘Notwithstanding 

any other provision of this title and subsections (b) 

and (c), the Commodity Futures Trading 

Commission and the Securities and Exchange 

Commission, in consultation with the Board of 

Governors [of the Federal Reserve System], shall 

further define the terms ‘swap’, ‘security-based 

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

‘major swap participant’, ‘major security-based 

swap participant’, and ‘security-based swap 

agreement’ in section 1a(47)(A)(v) of the 

Commodity Exchange Act (7 U.S.C. 1a(47)(A)(v)) 

and section 3(a)(78) of the Securities Exchange Act 

of 1934 (15 U.S.C. 78c(a)(78)).’’ 

7Section 721(c) provides: ‘‘To include 

transactions and entities that have been structured 

to evade this subtitle (or an amendment made by 

this subtitle), the Commodity Futures Trading 

Commission shall adopt a rule to further define the 

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

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

8See 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 and Further Definition of 

‘‘Swap,’’ ‘‘Security-Based Swap,’’ and ‘‘SecurityBased Swap Agreement’’; Mixed Swaps; SecurityBased Swap Agreement Recordkeeping, 76 FR 

29818, May 23, 2011. 

9 7 U.S.C. 6(c). 

10Effective Date for Swap Regulation, 76 FR 

42508 (issued and made effective by the 

Commission on July 14, 2011; published in the 

Federal Register on July 19, 2011). 

11Concurrent with the July 14 Order, the 

Commission’s Division of Clearing and 

Intermediary Oversight and the Division of Market 

Oversight (together ‘‘the Divisions’’) identified 

certain provisions of the Dodd-Frank Act and CEA 

as amended that would take effect on July 16, 2011, 

but that may not be eligible for the exemptive relief 

provided by the Commission in its July 14 Order— 

specifically, the amendments made to the CEA by 

Dodd-Frank Act sections 724(c), 725(a), and 731. 

On July 14, 2011, the Divisions issued Staff NoAction Relief addressing the application of these 

provisions after July 16, 2011. Available at: 

http://www.cftc.gov/ucm/groups/public/ 

@newsroom/documents/file/ 

noactionletter071411.pdf (last visited Sept. 26, 

2011). The Commission anticipates that the 

Divisions will extend and conform this no-action 

relief to any final amendment to the July 14 Order 

that may result from this proposal. 

12 76 FR at 42514. The July 14 Order did not 

extend to agreements, contracts, or transactions that 

fully met the conditions of part 35, since in such 

circumstances further relief was unnecessary. 

13 7 U.S.C. 6c(b). 

effect on the later of 360 days after the 

date of the enactment of this subtitle or, 

to the extent a provision of this subtitle 

requires a rulemaking, not less than 60 

days after publication of the final rule 

or regulation implementing such 

provision of this subtitle.’’ Thus, the 

general effective date for provisions of 

title VII that do not require a rulemaking 

was July 16, 2011. This includes the 

provisions that repealed several 

provisions of the CEA as in effect prior 

to the Dodd-Frank Act that excluded or 

exempted, in whole or in part, certain 

transactions from Commission 

oversight.5

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

Act requires the Commission and the 

SEC to undertake a joint rulemaking to 

‘‘further define’’ certain terms used in 

title VII, including the terms ‘‘swap,’’ 

‘‘swap dealer,’’ ‘‘major swap 

participant,’’ and ‘‘eligible contract 

participant.’’6 Section 721(c) requires 

the Commission to adopt a rule to 

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

‘‘swap dealer,’’ ‘‘major swap 

participant,’’ and ‘‘eligible contract 

participant’’ to prevent evasion of 

statutory and regulatory obligations.7

The Commission has issued two notices 

of proposed rulemaking that address 

these further definitions.8

The Commission’s final rulemakings 

further defining the terms in sections 

712(d) and 721(c) were not expected to 

be in effect as of July 16, 2011 (i.e., the 

general effective date set forth in section 

754 of the Dodd-Frank Act). 

Accordingly, the Commission on July 

14, 2011 exercised its exemptive 

authority under CEA section 4(c) 9 and 

its authority under section 712(f) of the 

Dodd-Frank Act by issuing the July 14 

Order.10 In so doing, the Commission 

sought to address concerns that had 

been raised about the applicability of 

various regulatory requirements to 

certain agreements, contracts, and 

transactions after July 16, 2011, and 

thereby ensure that current practices 

will not be unduly disrupted during the 

transition to the new regulatory 

regime.11

Description of Existing Relief 

The July 14 Order groups the relevant 

provisions of the Dodd-Frank Act into 

four categories and provides temporary 

exemptive relief, set to expire no later 

than December 31, 2011, with respect to 

Categories 2 and 3. A summary of the 

four categories of provisions follows. 

Category 1 covers statutory provisions 

which by their express terms require 

rulemaking to implement. Because, 

under section 754 of the Dodd-Frank 

Act, these provisions do not become 

effective until at least 60 days after the 

final rule is published, no exemptive 

relief from the general effective date is 

necessary. Category 1 provisions 

include, among others, the further 

definitions of terms regarding swap 

entities or instruments as required by 

the Dodd-Frank Act (such as the terms 

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

participant,’’ or ‘‘eligible contract 

participant’’). Category 1 also includes, 

among others: (1) Registration, capital 

and margin requirements, and business 

conduct standards for swap dealers and 

major swap participants; (2) provisions 

prohibiting agricultural swaps except 

pursuant to CFTC rules; (3) rules 

regarding swap execution facilities; and 

(4) various swap data recordkeeping and 

reporting requirements. A complete list 

of the Category 1 provisions is included 

in the appendix to the July 14 Order. 

The first part of the relief provided for 

in the July 14 Order reaches those DoddFrank Act provisions (‘‘Category 2 

provisions’’) that are self-effectuating 

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

that reference one or more of the terms 

for which the Commission and SEC are 

required to provide further definition, 

including ‘‘swap,’’ ‘‘swap dealer,’’ 

‘‘major swap participant,’’ ‘‘eligible 

contract participant,’’ and ‘‘securitybased swap agreement’’ (collectively, 

the ‘‘referenced terms’’). These Category 

2 provisions include, for example, the 

trade execution requirement of CEA 

section 2(h)(8), as amended by DoddFrank Act section 723. A complete list 

of the Category 2 provisions is included 

in the appendix to the July 14 Order. 

Because the Category 2 provisions 

would have taken effect on July 16, 2011 

pursuant to section 754, the 

Commission granted temporary relief 

from those provisions, but only to the 

extent that the requirements in such 

provisions specifically relate to a 

referenced term that is not yet further 

defined. Thus, if a Category 2 provision 

also applies to futures or options on 

futures, the provision took effect on July 

16 with respect to futures or options on 

futures. The exemption for Category 2 

provisions expires on the earlier of: (1) 

The effective date of the applicable final 

rule further defining the relevant term; 

or (2) December 31, 2011. 

In part two of the July 14 Order, the 

Commission provides temporary 

exemptive relief from the provisions of 

the CEA that may apply to certain 

agreements, contracts, and transactions 

in exempt or excluded commodities 

(generally, financial, energy and metals 

commodities) as a result of the repeal of 

the CEA exemptions and exclusions in 

former CEA sections 2(d), 2(e), 2(g), 

2(h), and 5d as of July 16, 2011 pursuant 

to sections 723(a)(1) and 734(a) of the 

Dodd-Frank Act (the ‘‘Category 3 

provisions’’). As explained in the July 

14 Order, this relief is based on the 

Commission’s existing ‘‘part 35’’ 

exemptive rules.12

Part 35 originally was promulgated in 

1993 pursuant to, among others, the 

Commission’s general exemptive 

authority in CEA section 4(c) and its 

plenary options authority under section 

4c(b),13 and provides a broad-based 

exemption from the CEA for ‘‘swap 


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14As noted in the July 14 Order, the parties 

covered under the ESP definition, while very broad, 

are not coextensive with those covered by the terms 

‘‘eligible commercial entity’’ or ‘‘eligible contract 

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

segment of persons or entities that are currently 

relying on one or more of the CEA exclusions or 

exemptions cited above might not qualify as an ESP 

and consequently would not be eligible for part 35. 

76 FR at 42511, n. 40. 

15 76 FR at 42514. With respect to commodity 

options, the Commission made clear that options 

identified in the swap agreement definition in 

paragraph (b)(1)(i) of § 35.1 of the Commission’s 

regulations and any options captured by the 

concluding catch-all language in that paragraph, as 

well as any options described in paragraphs 

(b)(1)(ii) and/or (iii) of § 35.1, involving excluded or 

exempt commodities are within the scope of the 

July 14 Order. 76 FR at 42514–15. 

16The Commission also stated, though, that 

because part 35 remained in effect at the time of the 

July 14 Order, market participants could continue 

to rely on part 35 with respect to swaps (other than 

commodity options) on enumerated agricultural 

commodities as defined in CEA section 1a(4) or 

§ 32.2 of the Commission’s regulations, as well as 

swaps and commodity options on non-enumerated 

agricultural commodities, to the extent these 

transactions fully comply with part 35. Under the 

July 14 Order, market participants also may 

continue to rely on part 32 for options on 

enumerated agricultural commodities to the extent 

these transactions are conducted in accordance 

with § 32.13(g) of the Commission’s regulations. 

Rule 32.13(g) permits off-exchange options between 

producers, processors, commercial users or 

merchants of the commodity or its products or byproducts that have a net worth of at least $10 

million. 

17 76 FR at 42522. 

18The date of July 16, 2012, is consistent with the 

potential transitional period provided in section 

723(c) of the Dodd-Frank Act regarding former CEA 

section 2(h) and section 734(c) of the Dodd-Frank 

Act regarding former CEA section 5d (i.e., for ‘‘not 

longer than a 1-year period’’ following the general 

effective date of title VII) . 

19 76 FR at 42513. 

20The Commission recently promulgated a rule 

pursuant to section 723(c)(3) of the Dodd-Frank Act 

that, effective December 31, 2011, will repeal the 

existing part 35 relief and replace it with new § 35.1 

of the Commission’s regulations. See Agricultural 

Swaps, 76 FR 49291 (Aug. 10, 2011). Rule 35.1 

provides, in pertinent part, 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. 

Continued 

agreements’’ in any commodity. 

Specifically, part 35 exempts ‘‘swap 

agreements,’’ as defined therein, from 

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

They are entered into by ‘‘eligible swap 

participants’’ (‘‘ESPs’’); 14 (2) they are 

not part of a fungible class of 

agreements standardized as to their 

material economic terms; (3) the 

creditworthiness of any party having an 

actual or potential obligation under the 

swap agreement would be a material 

consideration in entering into or 

determining the terms of the swap 

agreement, including pricing, cost, or 

credit enhancement terms; and (4) they 

are not entered into or traded on a 

multilateral transaction execution 

facility. 

Under part two of the relief provided 

for in the July 14 Order, the Commission 

stated that transactions in exempt or 

excluded commodities (and persons 

offering, entering into, or rendering 

advice or rendering other services with 

respect to such transactions) are 

temporarily exempt from provisions of 

the CEA that may apply to such 

transactions if such transactions comply 

with part 35, notwithstanding that: (1) 

The transaction may be executed on a 

multilateral transaction execution 

facility; (2) the transaction may be 

cleared; (3) persons offering or entering 

into the transaction may be eligible 

contract participants as defined in the 

CEA (prior to the enactment of the 

Dodd-Frank Act); (4) the transaction 

may be part of a fungible class of 

agreements that are standardized as to 

their material economic terms; and/or 

(5) no more than one of the parties to 

the transaction is entering into the 

transaction in conjunction with its line 

of business, but is neither an eligible 

contract participant nor an ESP, and the 

transaction was not and is not marketed 

to the public.15

Thus, for certain transactions, the July 

14 Order provides relief 

notwithstanding that the transaction 

may not satisfy certain part 35 

requirements (e.g., cleared, executed on 

a multilateral trade execution facility, 

entered into by certain persons that are 

not eligible contract participants, etc.). 

The Commission stated in the July 14 

Order that this relief is limited to 

transactions in exempt and excluded 

commodities, and does not extend to 

transactions in agricultural 

commodities, because transactions in 

agricultural commodities were not 

covered by the applicable statutory 

exclusions and exemptions in effect 

prior to July 16, 2011.16 The exemption 

in part two of the July 14 Order expires 

on the earlier of: (1) The repeal, 

withdrawal or replacement of part 35; or 

(2) December 31, 2011. 

Category 4 contains those Dodd-Frank 

Act provisions for which the 

Commission determined not to issue 

relief, and which therefore went into 

effect on July 16, 2011. A complete list 

of the Category 4 provisions is included 

in the appendix to the July 14 Order. 

The temporary exemptions issued in 

the July 14 Order are subject to several 

conditions. These conditions provide 

that the July 14 Order shall not: (1) 

Limit in any way the Commission’s antifraud or anti-manipulation authority 

under the CEA; (2) apply to any 

provision of the Dodd-Frank Act or the 

CEA that became effective prior to July 

16, 2011; (3) affect any effective date or 

compliance date set forth in any 

rulemaking issued by the Commission 

to implement provisions of the DoddFrank Act; (4) limit the Commission’s 

authority under Dodd-Frank Act section 

712(f) to issue rules, orders, or 

exemptions prior to the effective date of 

any provision of the Dodd-Frank Act 

and the CEA, in order to prepare for 

such effective date; and (5) affect the 

applicability of any provision of the 

CEA to futures contracts or options on 

futures contracts, or to cash markets.17

II. Discussion of the Proposed 

Amendments to the July 14 Order 

The Commission is proposing to 

amend the July 14 Order in two ways. 

First, the Commission is proposing to 

amend the July 14 Order to extend the 

potential latest expiry dates. With 

respect to provisions covered in the first 

part of the relief in the July 14 Order, 

the Commission is proposing that the 

temporary exemptive relief expire upon 

the earlier of: (1) The effective date of 

the applicable final rule further defining 

the relevant referenced term; or (2) July 

16, 2012.18 This amendment addresses 

the potential that, as of December 31, 

2011, the CFTC–SEC joint rulemakings 

‘‘further defining’’ the referenced terms 

will not yet be effective. The 

Commission also is proposing to amend 

the July 14 Order to extend the expiry 

date of the second part of the relief in 

the July 14 Order until the earlier of: 

(1) July 16, 2012; or (2) such other 

compliance date as may be determined 

by the Commission. For the same reason 

stated by the Commission with respect 

to the second part of the relief provided 

in the July 14 Order, the proposed 

extension of this exemptive relief ‘‘will 

allow markets and market participants 

to continue to operate under the 

regulatory regime as in effect prior to 

July 16, 2011, but subject to various 

implementing regulations that the 

Commission promulgates and applies to 

the subject transactions, market 

participants, or markets.’’ 19

Second, the Commission is proposing 

to include within the second part of the 

relief any agreement, contract or 

transaction that fully meets the 

conditions in part 35 as in effect on 

December 31, 2011. This amendment 

addresses the fact that such 

transactions, which were not included 

within the scope of the July 14 Order 

because the exemptive rules in part 35 

covered them at that time, now require 

temporary relief because part 35 will no 

longer be available after December 31, 

2011.20 Accordingly, to ensure that the 


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[It] 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 [designated contract markets (‘‘DCMs’’), 

swap execution facilities (‘‘SEFs’’)], or otherwise to 

the same extent that all other swaps are allowed to 

trade on DCMs, SEFs, or otherwise.’’ Id. at 49296. 

21The Commission also is clarifying that, by 

operation of new § 35.1 of the Commission’s 

regulations, the Commission’s statement in 

adopting the July 14 Order that a DCM may list and 

trade swaps ‘‘under the DCM’s rules related to 

futures contracts, without exemptive relief,’’ 76 FR 

at 42518, would apply, as of January 1, 2012, to 

swaps in agricultural commodities. 

22See Order Regarding the Treatment of Petitions 

Seeking Grandfather Relief for Exempt Commercial 

Markets and Exempt Boards of Trade, 75 FR 56513, 

Sept. 16, 2010. 

23 44 U.S.C. 3507(d). 

24 7 U.S.C. 19(a). 25 76 FR 42521. 

exemptive relief currently available for 

these transactions continues to be 

available after December 31, 2011, the 

Commission proposes to amend the July 

14 Order to incorporate by reference the 

part 35 relief available as of December 

31, 2011. Whereas the relief provided in 

part two of the July 14 Order was (and 

would remain) limited to transactions in 

excluded or exempt commodities, this 

proposed amendment also would 

include, beginning on January 1, 2012, 

transactions in agricultural commodities 

that fully meet the conditions in part 35 

as in effect on December 31, 2011.21 The 

Commission proposes that this further 

amendment to the July 14 Order is 

necessary to ensure that the same scope 

of the exemptive relief available before 

December 31, 2011 is available to all 

swaps and extends through July 16, 

2012, at the latest. 

In proposing these amendments, the 

Commission continues to strive to 

ensure that current practices will not be 

unduly disrupted during the transition 

to the new regulatory regime. As stated 

above, the proposed July 16, 2012 date 

coincides with the potential transitional 

period provided in sections 723(c) and 

734(c) of the Dodd-Frank Act.22 Further, 

should the Commission deem it 

appropriate to terminate or extend any 

exemptive relief under part two of the 

July 14 Order, the Commission will be 

in a better position to comprehensively 

evaluate and consider any tailored 

exemption at that time. 

The Commission believes it is in the 

interest of the public and market 

participants to continue to provide 

regulatory certainty regarding the 

applicability of the Dodd-Frank Act. 

There have been no disruptions to the 

market resulting from the July 14 Order, 

nor has the Commission received any 

request for additional relief beyond that 

provided for in the July 14 Order. 

Accordingly, the Commission believes 

the scope of the existing relief is 

appropriate and is proposing here only 

to amend that relief in the 

aforementioned ways. The Commission 

notes, for example, that Category 1 

provisions—i.e., those for which a 

rulemaking is required—will continue 

to be addressed outside the scope of the 

July 14 Order. Further, where 

appropriate, the Commission expects to 

phase-in compliance with its final rules 

over a period of time as part of the 

Commission’s ongoing commitment to 

ensuring an orderly transition to the 

new regulatory regime. 

III. Request for Comment 

The Commission requests and will 

only consider comments on the 

amendments to the July 14 Order that 

are proposed in this notice of proposed 

amendment. 

IV. Related Matters 

a. Paperwork Reduction Act 

The Paperwork Reduction Act 

(‘‘PRA’’) 23 imposes certain 

requirements on Federal agencies 

(including the Commission) in 

connection with conducting or 

sponsoring any collection of 

information as defined by the PRA. 

These proposed amendments, if 

approved, would not require a new 

collection of information from any 

persons or entities that would be subject 

to the proposed amendments. 

b. Cost-Benefit Considerations 

Section 15(a) of the CEA 24 requires 

the Commission to consider the costs 

and benefits of its action before issuing 

an order under the CEA. CEA section 

15(a) 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. 

This notice of proposed amendment 

proposes to amend the existing July 14 

Order by extending the currently 

available temporary relief to no later 

than July 16, 2012, and by accounting 

for the repeal of part 35 of the 

Commission’s regulations. As such, and 

because this proposal does not change 

the nature or limit the scope of relief 

granted in the July 14 Order, the costs 

and benefits set forth in the July 14 

Order may be incorporated by reference 

in this proposal.25 Nevertheless, the 

Commission seeks comment on whether 

these proposed amendments would 

impose any costs or confer any benefits 

beyond the July 14 Order. 

V. Proposed Amendments to the July 14 

Order 

The Commission proposes the 

following amendments to the July 14 

Order: 

The Commission, to provide for the 

orderly implementation of the 

requirements of Title VII of the DoddFrank Act, pursuant to sections 4(c) and 

4c(b) of the CEA and section 712(f) of 

the Dodd-Frank Act, hereby issues this 

Order consistent with the 

determinations set forth above, which 

are incorporated in this Final Order, as 

amended, by reference, and: 

(1) Exempts, subject to the conditions 

set forth in paragraph (3), all 

agreements, contracts, and transactions, 

and any person or entity offering, 

entering into, or rendering advice or 

rendering other services with respect to, 

any such agreement, contract, or 

transaction, from the provisions of the 

CEA, as added or amended by the DoddFrank Act, that reference one or more of 

the terms regarding entities or 

instruments subject to further definition 

under sections 712(d) and 721(c) of the 

Dodd-Frank Act, which provisions are 

listed in Category 2 of the Appendix to 

this Order; provided, however, that the 

foregoing exemption: 

a. Applies only with respect to those 

requirements or portions of such 

provisions that specifically relate to 

such referenced terms; and 

b. With respect to any such provision 

of the CEA, shall expire upon the earlier 

of: (i) The effective date of the 

applicable final rule further defining the 

relevant term referenced in the 

provision; or (ii) July 16, 2012. 

(2) Exempts, subject to the conditions 

set forth in paragraph (3), all 

agreements, contracts, and transactions, 

and any person or entity offering, 

entering into, or rendering advice or 

rendering other services with respect to, 

any such agreement, contract, or 

transaction, from the provisions of the 

CEA, if the agreement, contract, or 

transaction complies with part 35 of the 

Commission’s regulations as in effect as 

of December 31, 2011, including any 


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Federal Register / Vol. 76, No. 206 / Tuesday, October 25, 2011 / Proposed Rules 66003 

26The Commission recently promulgated a rule 

pursuant to section 723(c)(3) of the Dodd-Frank Act 

that, effective December 31, 2011, will repeal the 

existing part 35 relief and replace it with new § 35.1 

of the Commission’s regulations. See Agricultural 

Swaps, 76 FR 49291 (Aug. 10, 2011). 

agreement, contract, or transaction in an 

exempt or excluded (but not 

agricultural) commodity that complies 

with such provisions then in effect 

notwithstanding that: 

a. The agreement, contract, or 

transaction may be executed on a 

multilateral transaction execution 

facility; 

b. The agreement, contract, or 

transaction may be cleared; 

c. Persons offering or entering into the 

agreement, contract or transaction may 

not be eligible swap participants, 

provided that all parties are eligible 

contract participants as defined in the 

CEA prior to the date of enactment of 

the Dodd-Frank Act; 

d. The agreement, contract, or 

transaction may be part of a fungible 

class of agreements that are 

standardized as to their material 

economic terms; and/or 

e. No more than one of the parties to 

the agreement, contract, or transaction is 

entering into the agreement, contract, or 

transaction in conjunction with its line 

of business, but is neither an eligible 

contract participant nor an eligible swap 

participant, and the agreement, contract, 

or transaction was not and is not 

marketed to the public; 

Provided, however, that: (i) Such 

agreements, contracts, and transactions 

(and persons offering, entering into, or 

rendering advice or rendering other 

services with respect to, any such 

agreement, contract, or transaction) fall 

within the scope of any of the existing 

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

5d provisions or the line of business 

provision as in effect prior to July 16, 

2011; and (ii) the foregoing exemption 

shall expire upon the earlier of: (I) July 

16, 2012; or (II) such other compliance 

date as may be determined by the 

Commission. 

(3) Provides that the foregoing 

exemptions in paragraphs (1) and (2) 

above shall not: 

a. Limit in any way the Commission’s 

authority with respect to any person, 

entity, or transaction pursuant to CEA 

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

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

the Commission promulgated pursuant 

to such authorities, including 

regulations pursuant to CEA section 

4c(b) proscribing fraud; 

b. Apply to any provision of the 

Dodd-Frank Act or the CEA that became 

effective prior to July 16, 2011; 

c. Affect any effective or compliance 

date set forth in any rulemaking issued 

by the Commission to implement 

provisions of the Dodd-Frank Act; 

d. Limit in any way the Commission’s 

authority under section 712(f) of the 

Dodd-Frank Act to issue rules, orders, or 

exemptions prior to the effective date of 

any provision of the Dodd-Frank Act 

and the CEA, in order to prepare for the 

effective date of such provision, 

provided that such rule, order, or 

exemption shall not become effective 

prior to the effective date of the 

provision; and 

e. Affect the applicability of any 

provision of the CEA to futures 

contracts or options on futures 

contracts, or to cash markets. 

In its discretion, the Commission may 

condition, suspend, terminate, or 

otherwise modify this Order, as 

appropriate, on its own motion. This 

Final Order, as amended, shall be 

effective immediately. 

Issued in Washington, DC, on October 18, 

2011 by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

Note: 

The following appendices will not 

appear in the Code of Federal 

Regulations. 

Appendices to Notice of Proposed 

Amendment to Effective Date for Swap 

Regulation—Commission Voting 

Summary and Statements of 

Commissioners 

Appendix 1—Commission Voting 

Summary 

On this matter, Chairman Gensler and 

Commissioners Dunn, Sommers, Chilton and 

O’Malia voted in the affirmative; no 

Commissioner voted in the negative. 

Appendix 2—Statement of Chairman 

Gary Gensler 

I support the proposed amendment to the 

July 14th Exemptive Order regarding the 

effective dates of certain Dodd-Frank Act 

provisions. 

The July 14th order provided relief until 

December 31, 2011, or when the definitional 

rulemakings become effective, whichever is 

sooner, from certain provisions that would 

otherwise apply to swaps or swap dealers on 

July 16. This includes provisions that do not 

directly rely on a rule to be promulgated, but 

do refer to terms that must be further defined 

by the CFTC and SEC, such as ‘‘swap’’ and 

‘‘swap dealer.’’ 

Commission staff is working very closely 

with Securities and Exchange Commission 

(SEC) staff on rules relating to entity and 

product definitions. Staff is making great 

progress, and we anticipate taking up the 

further definition of entities in the near term 

and product definitions shortly thereafter. 

As these definitional rulemakings have yet 

to be finalized or become effective, today’s 

proposed amendment would provide relief 

through July 16, 2012, or when the 

definitional rulemakings become effective— 

whichever is sooner. 

The order also provided relief through no 

later than December 31, 2011, from certain 

CEA requirements that may apply as the 

result of the repeal, effective on July 16, 

2011, of CEA sections 2(d), 2(e), 2(g), 2(h) 

and 5d. The proposed amendment also 

extends this relief to July 16, 2012, or until 

a date the Commission may otherwise 

determine with respect to a particular 

requirement under the CEA. 

In addition, today’s proposed amendment 

also tailors the July 14th relief in light of the 

Commission’s actions finalizing the 

agricultural swap rules. 

Appendix 2—Statement of 

Commissioner Scott O’Malia 

As Yogi Berra famously proclaimed: ‘‘It is 

de ́ja` vu all over again.’’ Yogi perfectly 

encapsulates my feelings today. We find 

ourselves again voting on a proposed order 

aimed at providing legal certainty in the form 

‘‘temporary exemptive relief’’ for swap 

market participants that extends the soon to 

expire relief found in the Commission’s July 

14, 2011 exemptive order (‘‘July 14 Order’’). 

This temporary relief is necessary because: 

(1) The Commission has not yet put forth 

final rules defining such key terms such as 

‘‘swap’’ and ‘‘swap dealer’’; and (2) certain 

exemptions and exclusions for transactions 

in exempt and excluded commodities 

currently relied upon by market participants 

will be repealed effective December 31, 2011. 

The proposal states: ‘‘[t]he Commission 

proposes that this further amendment to the 

July 14 Order is necessary to ensure that the 

same scope of the exemptive relief available 

before December 31, 2011 is available to all 

swaps and extends through July 16, 2012, at 

the latest.’’ 

Unfortunately, we are once again facing an 

exemptive order that suffers the same faults 

that the July 14 Order suffered, namely: (1) 

It again includes an arbitrary sunset 

provision that will cut the transition period 

short and so will likely not provide necessary 

‘‘relief’’ to market participants, and (2) it 

demonstrates the lack of ordering of 

rulemakings combined with the failure to put 

forth an implementation schedule. We now 

need to broaden the scope of the July 14 

Order because the exemptive rules contained 

in part 35 will no longer be available to 

market participants after December 31, 2011 

even though the replacement regulatory 

regime is not in place yet.26 Part 35 is more 

commonly known as the swap exemption 

and is relied upon primarily by entities 

engaging in agricultural swaps. The 

Commission repealed part 35 in order to 

ensure that it is not used by individuals and 

entities who had relied on Sections 2(d), (g) 

and (h) of the Commodity Exchange Act 

(‘‘CEA’’) as an end run around the new 

statutory and regulatory requirements. 

I support the proposal, as I did last time, 

because it is important for the Commission 

to provide market participants and the public 

with the form of relief the exemptive order 

is contemplating, but I would have preferred 


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66004 Federal Register / Vol. 76, No. 206 / Tuesday, October 25, 2011 / Proposed Rules 

that this rule, like its predecessor, would not 

select an arbitrary end date. 

Mr. Chairman, I again renew my call for a 

comprehensive rulemaking schedule and 

implementation plan, that provides greater 

insight on reporting requirements to swap 

data repositories as well as separate 

rulemaking on real time and block rules. The 

Commission must also provide some 

certainty on the clearing and trading mandate 

including clarification of ‘‘made available for 

trading’’ and guidance on swap clearing. 

[FR Doc. 2011–27535 Filed 10–24–11; 8:45 am] 

BILLING CODE 6351–01–P 

INTERNATIONAL TRADE 

COMMISSION 

19 CFR Chapter II 

Preliminary Plan for Retrospective 

Analysis of Existing Rules 

AGENCY: International Trade 

Commission. 

ACTION: Notice of Availability; Request 

for Comments. 

SUMMARY: The United States 

International Trade Commission 

(Commission) is developing a plan for 

the retrospective analysis of its existing 

regulations. The Commission is seeking 

public comment on a preliminary 

version of such a plan. 

DATES: Comment Date: To be assured of 

consideration, written comments must 

be received by 5:15 p.m. on November 

25, 2011. 

ADDRESSES: You may submit comments, 

identified by docket number MISC–038 

by any of the following methods: 

Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Agency Web Site: http:// 

www.usitc.gov. Follow the instructions 

for submitting comments. See http:// 

www.usitc.gov/secretary/edis.htm. 

Mail: For paper submission. U.S. 

International Trade Commission, 500 E 

Street, SW., Room 112, Washington, DC 

20436. 

Hand Delivery/Courier: U.S. 

International Trade Commission, 500 E 

Street, SW., Room 112, Washington, DC 

20436. From the hours of 8:45 a.m. to 

5:15 p.m. 

For detailed instructions on 

submitting comments, see the ‘‘Public 

Participation’’ heading of the 

SUPPLEMENTARY INFORMATION section of 

this document. 

FOR FURTHER INFORMATION CONTACT: 

Peter L. Sultan, Office of the General 

Counsel, United States International 

Trade Commission, telephone 202–205– 

3094, e-mail Peter.Sultan@usitc.gov. 

Hearing-impaired individuals are 

advised that information on this matter 

can be obtained by contacting the 

Commission’s TDD terminal at 202– 

205–1810. General information 

concerning the Commission may also be 

obtained by accessing its Internet server 

(http://www.usitc.gov). 

SUPPLEMENTARY INFORMATION: Executive 

Order 13579 of July 11, 2011, calls on 

each independent regulatory agency to 

develop and release to the public, 

within 120 days of the date of the 

Executive Order, a plan under which 

the agency will periodically review its 

significant regulations to determine 

whether any such regulations should be 

modified, streamlined, expanded, or 

repealed so as to make the agency’s 

regulatory program more effective or 

less burdensome in achieving regulatory 

objectives. The following is the 

Commission’s Preliminary Plan for 

Retrospective Analysis of Existing 

Rules. The Commission welcomes 

comments from the public concerning 

this plan. 

Public Participation 

Instructions: All submissions received 

must include the agency name and the 

docket number (MISC–038) for this 

proceeding. All comments received will 

be posted without change to http:// 

www.usitc.gov, including any personal 

information provided. For paper copies, 

a signed original and 14 copies of each 

set of comments, along with a cover 

letter stating the nature of the 

commenter’s interest in the proposed 

rulemaking, should be submitted to 

James Holbein, Secretary, U.S. 

International Trade Commission, 500 E 

Street, SW., Room 112, Washington, DC 

20436. Comments, along with a cover 

letter, may be submitted electronically 

to the extent provided by Sec. 201.8 of 

the Commission’s rules. This rule may 

refer commenters to the Handbook for 

Electronic Filing Procedures (see http:// 

www.usitc.gov/secretary/edis.htm). For 

those submitting comments by mail, it 

is advisable to mail comments in 

advance of the due date since 

Commission mail will be delayed due to 

necessary security screening. 

Docket: For access to the docket to 

read comments received, go to http:// 

www.usitc.gov or U.S. International 

Trade Commission, 500 E Street, SW., 

Room 112, Washington, DC 20436. 

United States International Trade 

Commission 

Preliminary Plan for Retrospective 

Analysis of Existing Rules 

October 18, 2011 

I. Executive Summary of Plan 

Executive Orders 13579 and 13563 

recognize the importance of maintaining 

a consistent culture of retrospective 

review and analysis throughout the 

Federal government. Executive Order 

13579 calls on each independent 

regulatory agency to develop and release 

to the public a plan, consistent with law 

and reflecting the agency’s resources 

and regulatory priorities and processes, 

under which the agency will 

periodically review its significant 

regulations to determine whether any 

such regulations should be modified, 

streamlined, expanded, or repealed so 

as to make the agency’s regulatory 

program more effective or less 

burdensome in achieving the regulatory 

objectives. 

Pursuant to Executive Order 13579, 

the U.S. International Trade 

Commission developed this preliminary 

plan for retrospective analysis of its 

regulations. The plan is designed to 

create a defined method and schedule 

for identifying and reconsidering certain 

significant rules that are obsolete, 

unnecessary, unjustified, excessively 

burdensome, or counterproductive. Its 

review processes are intended to 

facilitate the identification of rules that 

warrant repeal or modification, or the 

strengthening, complementing, or 

modernizing of rules where necessary or 

appropriate. 

II. Background 

The Commission is an independent, 

quasi-judicial Federal agency with 

broad investigative responsibilities on 

matters of trade. It investigates the 

effects of dumped and subsidized 

imports on domestic industries, 

conducts global safeguard 

investigations, and adjudicates cases 

involving imports that allegedly infringe 

intellectual property rights. The 

Commission also serves as a Federal 

resource where trade data and other 

trade policy-related information are 

gathered and analyzed. The information 

and analysis are provided to the 

President, the Office of the United 

States Trade Representative (USTR), and 

Congress to facilitate the development 

of sound and informed U.S. trade 

policy. The Commission makes most of 

its information and analysis available to 

the public to promote understanding of 

international trade issues. The 

Commission also maintains the 


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