52088 Federal Register / Vol. 62, No. 193 / Monday, October 6, 1997 / Notices

1 7 U.S.C. 12a(10)(1994).

2 7 U.S.C. 21(j)(1994).

3 7 U.S.C. 21(o)(1)(1994).

4Letter from Robert K. Wilmouth, President of

NFA, to Brooksley Born, Chairperson of the

Commission, dated June 20, 1997.

5Commission rules referred to herein can be

found at 17 CFR Ch. I (1997).

6As used in this Notice and Order, the term

‘‘process’’ generally refers to the review of the

filing, notice or claim for compliance with

applicable requirements and, as appropriate,

provision of notice of any deficiency in the filing,

notice or claim.

7Advisory No. 18–96, (1994–1996 Transfer

Binder) Comm. Fut. L. Rep. (CCH) ¶26,659 (April

11, 1996).

8Pursuant to Rule 4.21(a), a CPO may not solicit,

accept or receive funds, securities or other property

from a prospective participant in a pool that it

operates or intends to operate unless, on or before

the date it engages in that activity, the COP delivers

or causes to be delivered to the prospective

participant a Disclosure Document for the pool

containing the information set forth in Rule 4.24.

3 Category 359–C: only HTS numbers

6103.42.2025, 6103.49.8034, 6104.62.1020,

6104.69.8010, 6114.20.0048, 6114.20.0052,

6203.42.2010, 6203.42.2090, 6204.62.2010,

6211.32.0010, 6211.32.0025 and

6211.42.0010; Category 659–C: only HTS

numbers 6103.23.0055, 6103.43.2020,

6103.43.2025, 6103.49.2000, 6103.49.8038,

6104.63.1020, 6104.63.1030, 6104.69.1000,

6104.69.8014, 6114.30.3044, 6114.30.3054,

6203.43.2010, 6203.43.2090, 6203.49.1010,

6203.49.1090, 6204.63.1510, 6204.69.1010,

6210.10.9010, 6211.33.0010, 6211.33.0017

and 6211.43.0010. 4 Category 369–F: only HTS number

6302.91.0045; Category 369–P: only HTS

numbers 6302.60.0010 and 6302.91.0005. 5 Category 369–R: only HTS number

6307.10.2020. 6 Category 369–S: only HTS number

6307.10.2005. 7 Category 666–P: only HTS numbers

6302.22.1010, 6302.22.1020, 6302.22.2010,

6302.32.1010, 6302.32.1020, 6302.32.2010

and 6302.32.2020. 8 Category 666–S: only HTS numbers

6302.22.1030, 6302.22.1040, 6302.22.2020,

6302.32.1030, 6302.32.1040, 6302.32.2030

and 6302.32.2040.

The Committee for the Implementation of

Textile Agreements has determined that

these actions fall within the foreign affairs

exception to the rulemaking provisions of 5

U.S.C.553(a)(1).

Sincerely,

Troy H. Cribb,

Chairman, Committee for the Implementation

of Textile Agreements.

[FR Doc.97–26387 Filed 10–3–97; 8:45 am]

BILLING CODE 3510–DR–F

COMMODITY FUTURES TRADING

COMMISSION

Performance of Certain Functions by

National Futures Association with

Respect to Commodity Pool Operators

and Commodity Trading Advisors

AGENCY: Commodity Futures Trading

Commission.

ACTION: Notice and Order.

SUMMARY:The Commodity Futures

Trading Commission (Commission) is

authorizing the National Futures

Association (NFA) to conduct reviews of

disclosure documents required to be

filed with the Commission by

commodity pool operators (CPOs) and

commodity trading advisors (CTAs)

pursuant to Rules 4.26(d) and 4.36(d),

respectively. In addition, the

Commission is authorizing NFA to

process the following: (1) Notices of

eligibility for exclusion for certain

otherwise regulated persons from the

definition of CPO, pursuant to Rule 4.5;

(2) notices of claim for exemption from

certain Part 4 requirements with respect

to commodity pools (pools) and CTAs

whose participants or clients are

qualified eligible participants (QEPs) or

qualified eligible clients (QECs),

respectively, pursuant to Rule 4.7; (3)

claims of exemption from certain Part 4

requirements for CPOs with respect to

pools that principally trade securities,

pursuant to Rule 4.12(b); (4) statements

of exemption from registration as a CPO,

pursuant to Rule 4.13; (5) notices of

exemption from registration as a CTA

for certain persons registered as an

investment adviser, pursuant to Rule

4.14(a)(8); and (6) notices of claim for

exemption from provisions of Part 4 for

certain registered CPOs operating

offshore pools, pursuant to Advisory

18–96. Further, the Commission is

authorizing NFA to maintain and serve

as the official custodian of certain

Commission records.

EFFECTIVE DATE: November 1, 1997.

FOR FURTHER INFORMATION CONTACT:

Until the effective date of November 1,

1997, comments regarding this Notice

and Order may be directed to Paul H.

Bjarnason, Jr., Deputy Director, or Kevin

P. Walek, Senior Special Counsel,

Division of Trading and Markets,

Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street, N.W., Washington, DC

20581. Telephone: (202) 418–5430.

United States of America

Before the Commodity Futures Trading

Commission Order Authorizing the

Performance of Certain Functions With

Respect to Commodity Pool Operators and

Commodity Trading Advisors

I. Authority and Background

Section 8a(10) of the Commodity

Exchange Act 1 (Act) provides that the

Commission may authorize any person

to perform any portion of the

registration functions under the Act,

notwithstanding any other provision of

law, in accordance with rules adopted

by such person and submitted to the

Commission for approval or, if

applicable, for review pursuant to

Section 17(j) of the Act 2 and subject to

the provisions of the Act applicable to

registrations granted by the

Commission. Section 17(o)(1) of the

Act 3 provides that the Commission may

require NFA to perform Commission

registration functions in accordance

with the Act and NFA rules. NFA has

confirmed its willingness to perform

certain functions now performed by the

Commission and has provided the

Commission with a detailed proposal

setting forth standards and procedures

to be followed and reports to be

generated in administering the functions

discussed below.4

Upon consideration, the Commission

has determined to authorize NFA,

effective November 1, 1997, to perform

the following functions: (1) to conduct

reviews of disclosure documents

required to be filed with the

Commission by CPOs and CTAs

pursuant to Rules 4.26(d) 5 and 4.36(d),

respectively; (2) to process 6 notices of

eligibility for exclusion for certain

otherwise regulated persons from the

definition of CPO, pursuant to Rule 4.5;

(3) to process notices of claim for

exemption from certain Part 4

requirements with respect to commodity

pools and CTAs whose participants or

clients are QEPs or QECs, respectively,

pursuant to Rule 4.7; (4) to process

claims of exemption from certain Part 4

requirements for CPOs with respect to

pools that principally trade securities,

pursuant to Rule 4.12(b); (5) to process

statements of exemption from

registration as a CPO, pursuant to Rule

4.13; (6) to process notices of exemption

from registration as a CTA for certain

persons registered as an investment

adviser, pursuant to Rule 4.14(a)(8); (7)

to process notices of claim for

exemption from provisions of Part 4 for

certain registered CPOs operating

offshore pools, pursuant to Advisory

18–96; 7 and (8) to maintain and to serve

as the official custodian of records for

the filings, notices and claims required

by the rules listed above. As discussed

below, each of these functions involves

disclosure requirements or exemptions

from disclosure, reporting,

recordkeeping and registration

requirements for CPOs and CTAs.

A. CPO and CTA Compliance with Rule

4.26(d) and 4.36(d)

Rule 4.26(d)(1) requires that a CPO

file a disclosure document 8 with the

Commission for each pool that it

operates or intends to operate not less
Federal Register / Vol. 62, No. 193 / Monday, October 6, 1997 / Notices 52089

9Rule 4.8 provides an exemption from the 21-day

prefiling requirement of Rule 4.26(d)(1) to CPOs

with respect to pools offered or sold solely to

‘‘accredited investors’’ in an offering exempt from

registration under the Securities Act of 1933, as

well as to CPOs of 4.12(b) pools in an exempt

offering under the Securities Act of 1933.

10Pursuant to Rule 4.31(a), a CTA may not solicit

or enter into an agreement with a prospective client

to direct or to guide the client’s commodity interest

account or trading unless, at or before the time it

engages in the solicitation or enters into the

agreement (whichever is earlier), the CTA delivers

or causes to be delivered to the prospective client

a disclosure document for the trading program

containing the information set forth in the Rule

4.34.

11 45 FR 51600, 51603 (August 4, 1980); 46 FR

26004, 26010 (May 8, 1981).

12Pursuant to Rule 4.24(d)(3)(i), privately offered

commodity pools are those offered pursuant to

section 4(2) of the Securities Act of 1933, as

amended (15 U.S.C. 77d(2)), or pursuant to

Regulation D thereunder (17 CFR 230.501 et seq.).

13CFTC Interpretative Letter No. 95–44, [1994–

1996 Transfer Binder] Comm. Fut. L. Rep. (CCH)

¶ 26,385 (April 20, 1995).

14Rule 4.5 also excludes certain trading vehicles

from the commodity pool definition, and thus, their

operators are not required to file any notice or make

any specified representations to claim exclusion

from the commodity pool operator definition.

than 21 calendar days prior to the date

the CPO first intends to deliver the

document to a prospective participant

in the pool.9 Similarly, Rule 4.36(d)(1)

requires that a CTA file a disclosure

document 10 with the Commission for

each trading program that it offers or

intends to offer not less than 21

calendar days prior to the date the CTA

first intends to deliver the document to

a prospective client in the trading

program. Further, pursuant to Rules

4.26(d)(2) and 4.36(d)(2), CPOs and

CTAs, respectively, must file with the

Commission all subsequent

amendments to their disclosure

documents within 21 calendar days of

the date upon which the CPO or CTA

first knows or has reason to know of the

defect requiring the amendment. In

addition, CPOs and CTAs may not use

their disclosure documents for more

than nine months from the effective

dates of such documents, in accordance

with Rules 4.26(a)(2) and 4.36(b),

respectively. The Commission’s

Division of Trading and Markets

reviews disclosure documents filed by

CPOs and CTAs, issues comment letters

noting any compliance issues, and

works with registrants to resolve these

issues.11

NFA Compliance Rule 2–13 requires

that NFA members file with NFA a copy

of any document required to be filed

with the Commission pursuant to Part 4

of the regulations. NFA staff review CPO

and CTA disclosure documents during

the course of on-site audits as well as

through a desk review program, as part

of its audit priority system. In light of

NFA’s experience in receiving and

reviewing disclosure documents of

CPOs and CTAs, the Commission

believes that it is appropriate for NFA

to undertake the performance of this

function. Accordingly, by this Order,

NFA is authorized to review all

disclosure documents filed by CTAs and

all disclosure documents filed by CPOs

for privately offered commodity pools 12

and to provide notice of deficiencies.

Such review of CTA and CPO disclosure

documents will include those

documents filed pursuant to the instant

filing procedure set forth in Commission

Advisory 95–44.13

B. Notices of Eligibility for Exclusion

From the Definition of CPO

Rule 4.5 provides an exclusion from

the definition of commodity pool

operator for certain persons who would

otherwise be considered commodity

pool operators. This exclusion is

available for certain otherwise regulated

persons, as set forth in Rule 4.5 (a)(1)

through (a)(4) in connection with the

operation of a qualified entity as

described in Rule 4.5(b).14 Eligible

persons claiming exclusion pursuant to

Rule 4.5 must file with the Commission

and NFA a notice of eligibility

containing the information specified in

Rule 4.5(c). By this Order, NFA is

authorized to process notices of

eligibility for exclusion from the

definition of the term commodity pool

operator pursuant to Rule 4.5.

C. Claims for Exemption From Certain

Part 4 Requirements With Respect to

Commodity Pools and CTAs Whose

Participants or Clients Are QEPs or

QECs

Rule 4.7 provides an exemption from

certain Part 4 requirements with respect

to the operators of commodity pools

whose participants are limited to QEPs

and with respect to commodity trading

advisors whose clients are QECs, as

those terms are defined by the Rule.

Any registered commodity pool operator

meeting the requirements of Rule

4.7(a)(2) may claim relief from certain

disclosure, reporting, and recordkeeping

requirements by filing with the

Commission and NFA a notice of claim

for exemption pursuant to Rule

4.7(a)(3). Any registered commodity

trading advisor meeting the

requirements of Rule 4.7(b)(2) may

claim relief from disclosure and

recordkeeping requirements with

respect to the accounts or qualified

eligible clients who have given due

consent to their account being an

exempt account under Rule 4.7 by filing

with the Commission and NFA a notice

of claim for exemption pursuant to

paragraph 4.7(b)(3). By this Order, NFA

is authorized to process notices of claim

for exemption filed by qualifying CPOs

and CTAs pursuant to Rule 4.7.

D. Exemption From Certain Part 4

Requirements for CPOs With Respect to

Pools That Principally Trade Securities

Rule 4.12(b) provides an exemption

from certain disclosure and reporting

requirements for registered CPOs of

pools which principally trade securities

and meet the criteria set forth in Rule

4.12(b)(1). Eligible CPOs must file a

claim of exemption with the

Commission and NFA pursuant to Rule

4.12(b)(3). By this Order, NFA is

authorized to process claims for

exemption filed by qualifying CPOs

pursuant to Rule 4.12(b).

E. Exemption From Registration as a

CPO

Rule 4.13 provides for an exemption

from registration as a CPO for persons

operating pools which meet the criteria

set forth in either Rule 4.13(a)(1) or Rule

4.13(a)(2). Eligible persons must file

with the Commission and NFA copies of

the statement provided to pool

participants setting forth the

information specified in Rule 4.13(b)(1).

By this Order, NFA is authorized to

process statements of exemption from

CPO registration filed by qualifying

persons pursuant to Rule 4.13.

F. Exemption From Registration as a

CTA for Certain Persons Registered as

Investment Advisers

Rule 4.14(a)(8) provides exemption

from registration as a CTA for registered

investment advisers whose commodity

advice is directed to Rule 4.5 entities

and who meet the other criteria set forth

in Rule 4.14(a)(8) (i)–(ii). Persons

claiming exemption from CTA

registration pursuant to Rule 4.14(a)(8)

must file with the Commission and NFA

a notice of exemption in accordance

with Rule 4.14(a)(8) (iii) and (v). By this

Order, NFA is authorized to process

notices of exemption from CTA

registration filed by qualifying persons

pursuant to Rule 4.14(a)(8).

G. Claims for Exemption From

Provisions of Part 4 for Certain

Registered CPOs Operating Offshore

Pools

Commission Advisory 18–96 makes

generally available to certain registered

CPOs relief from disclosure, reporting

and certain recordkeeping requirements

in connection with the operation of

offshore commodity pools. Registered

CPOs who operate offshore commodity

pools may claim such relief by filing a

notice of a claim for exemption with the
52090 Federal Register / Vol. 62, No. 193 / Monday, October 6, 1997 / Notices

15 49 FR 39593 (October 9, 1984); 50 FR 34885

(August 28, 1985); 51 FR 25929 (July 17, 1986); 54

FR 19594 (May 8, 1989); 54 FR 41133 (October 5,

1989); 58 FR 19657 (April 15, 1993).

Commission and NFA that sets forth the

representations specified in the

Advisory. By this Order, NFA is

authorized to process notices of claims

for exemption filed by qualifying CPOs

pursuant to Advisory 18–96.

H. Recordkeeping Requirements

By prior orders, the Commission has

authorized NFA to maintain various

other Commission registration records

and has certified NFA as the official

custodian of such records for this

agency.15 The Commission has now

determined, in accordance with its

authority under Section 8a(10) of the

Act, to authorize NFA to maintain and

to serve as the official custodian of

records for the filings, notices and

claims required by Rules 4.26(d),

4.36(d), 4.5, 4.7, 4.12(b), 4.13 and

4.14(a)(8) and Commission Advisory

18–96. This determination is based

upon NFA’s representations regarding

the implementation of rules and

procedures for maintaining and

safeguarding all such records, in

connection with NFA’s assumption of

responsibility for the above-mentioned

activities.

In maintaining the Commission’s

records pursuant to this Order, NFA

shall be subject to all other requirements

and obligations imposed upon it by the

Commission in existing or future orders

or regulations. In this regard, NFA shall

also implement such additional

procedures (or modify existing

procedures) as are acceptable to the

Commission and as are necessary: to

ensure the security and integrity of the

records in NFA’s custody; to facilitate

prompt access to those records by the

Commission and its staff, particularly as

described in other Commission orders

or rules; to facilitate disclosure of public

or nonpublic information in those

records when permitted by Commission

orders or rules and to keep logs as

required by the Commission concerning

disclosure of nonpublic information;

and otherwise to safeguard the

confidentiality of the records.

II. Conclusion and Order

The Commission has determined, in

accordance with the provisions of

Sections 8a(10) and 17(o)(1) of the Act

and NFA’s letter dated August 27, 1997,

to authorize NFA to perform the

following functions:

(1) To conduct reviews of disclosure

documents required to be filed with the

Commission by CPOs and CTAs

pursuant to Rules 4.26(d) and 4.36(d),

respectively;

(2) To process notices of eligibility for

exclusion for certain otherwise

regulated persons from the definition of

CPO, pursuant to Rule 4.5;

(3) to process notices of claim for

exemption from certain Part 4

requirements with respect to commodity

pools and CTAs whose participants or

clients are QEPs or QECs, respectively,

pursuant to Rule 4.7;

(4) To process claims of exemption

from certain Part 4 requirements for

CPOs with respect to pools that

principally trade securities, pursuant to

Rule 4.12(b);

(5) To process statements of

exemption from registration as a CPO,

pursuant to Rule 4.13;

(6) To process notices of exemption

from registration as a CTA for certain

persons registered as an investment

adviser, pursuant to Rule 4.14(a)(8);

(7) To process notices of claim for

exemption from provisions of Part 4 for

certain registered CPOs operating

offshore pools, pursuant to Advisory 18-

96; and

(8) To maintain and to serve as the

official custodian of records for the

filings, notices and claims required by

the rules listed above.

NFA shall perform these functions in

accordance with the standards

established by the Act and the

regulations and orders promulgated

thereunder, particularly Part 4 of the

regulations and Commission orders

issued thereunder, and shall provide the

Commission with such summaries and

periodic reports as the Commission may

determine are necessary for effective

oversight of this program.

These determinations are based upon

the Congressional intent expressed in

Sections 8a(10) and 17(o) of the Act that

the Commission have the authority to

delegate to NFA any portion of the

Commission’s registration

responsibilities under the Act for

purposes of carrying out these

responsibilities in the most efficient and

cost-effective manner and upon NFA’s

representations concerning the

standards and procedures to be followed

and the reports to be generated in

administering these functions.

This Order does not, however,

authorize NFA to render ‘‘no-action’’

positions, exemptions or interpretations

with respect to applicable disclosure,

reporting, recordkeeping and

registration requirements.

Nothing in this Order or in Sections

8a(10) or 17(o) of the Act shall affect the

Commission’s authority to review NFA’s

performance of the Commission

functions listed in paragraphs 1–8

above.

NFA is authorized to perform all

functions specified herein until such

time as the Commission orders

otherwise. Nothing in this Order shall

prevent the Commission from exercising

the authority delegated herein. NFA

may submit to the Commission for

decision any specific matters that have

been delegated to it, and Commission

staff will be available to discuss with

NFA staff issues relating to the

implementation of this Order. Nothing

in this Order affects the applicability of

any previous orders issued by the

Commission under Part 4.

Issued in Washington, D.C., on September

30, 1997 by the Commission.

Catherine D. Dixon,

Assistant Secretary of the Commission.

[FR Doc. 97–26389 Filed 10–3–97; 8:45 am]

BILLING CODE 6351–01–P

DEPARTMENT OF DEFENSE

Office of the Secretary

TRICARE Formerly Known as the

Civilian Health and Medical Program of

the Uniformed Services (CHAMPUS);

Fiscal Year 1998 Mental Health Rate

Updates

AGENCY: Office of the Secretary, DoD.

ACTION: Notice of updated mental health

per diem rates.

SUMMARY: This notice provides for the

updating of hospital-specific per diem

rates for high volume providers and

regional per diem rates for low volume

providers; the updated cap per diem for

high volume providers; the beneficiary

per diem cost-share amount for low

volume providers for FY 1998 under the

TRICARE Mental Health Per Diem

Payment System; and the updated per

diem rates for both full-day and half-day

TRICARE Partial Hospitalization

Programs for fiscal year 1998.

EFFECTIVE DATE: The rates contained in

this notice are effective for services

occurring on or after October 1, 1997.

FOR FURTHER INFORMATION CONTACT:

Stan Regensberg, Program Development

Branch, TRICARE Support Office,

telephone (303) 361–1342.

SUPPLEMENTARY INFORMATION: The final

rule published in the Federal Register

on September 6, 1988, (53 FR 34285) set

forth reimbursement changes that were

effective for all inpatient hospital

admissions in psychiatric hospitals and

exempt psychiatric units occurring on

or after January 1, 1989. The final rule

published in the Federal Register on