[Federal Register Volume 89, Number 216 (Thursday, November 7, 2024)]
[Rules and Regulations]
[Pages 88594-88629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-24388]



[[Page 88593]]

Vol. 89

Thursday,

No. 216

November 7, 2024

Part IV





Commodity Futures Trading Commission





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17 CFR Parts 37, 38, and 40





Provisions Common to Registered Entities; Final Rule

Federal Register / Vol. 89 , No. 216 / Thursday, November 7, 2024 / 
Rules and Regulations

[[Page 88594]]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Parts 37, 38, and 40

RIN 3038-AF28


Provisions Common to Registered Entities

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'') is 
adopting amendments to the Commission's regulations under the Commodity 
Exchange Act (``CEA'' or ``Act'') that govern how registered entities 
submit self-certifications, and requests for approval, of their rules, 
rule amendments, and new products for trading and clearing, as well as 
the Commission's review and processing of such submissions. The 
amendments are intended to clarify, simplify and enhance the utility of 
those regulations for registered entities, market participants and the 
Commission.

DATES: The effective date for this final rule is December 9, 2024.

FOR FURTHER INFORMATION CONTACT: Rachel Kaplan, Senior Special Counsel, 
<a href="/cdn-cgi/l/email-protection#c3b1a8a2b3afa2ad83a0a5b7a0eda4acb5"><span class="__cf_email__" data-cfemail="fe8c959f8e929f90be9d988a9dd0999188">[email protected]</span></a>, 202-418-6233, Steven Benton, Industry Economist, 
<a href="/cdn-cgi/l/email-protection#daa9b8bfb4aeb5b49ab9bcaeb9f4bdb5ac"><span class="__cf_email__" data-cfemail="087b6a6d667c6766486b6e7c6b266f677e">[email protected]</span></a>, 202-418-5617, and Nancy Markowitz, Deputy Director, 
<a href="/cdn-cgi/l/email-protection#8ee0e3effce5e1f9e7faf4ceede8faeda0e9e1f8"><span class="__cf_email__" data-cfemail="6e00030f1c050119071a142e0d081a0d40090118">[email protected]</span></a>, 202-418-5453, Division of Market Oversight, and 
Eileen Chotiner, Senior Compliance Analyst, <a href="/cdn-cgi/l/email-protection#5c393f3433283532392e1c3f3a283f723b332a"><span class="__cf_email__" data-cfemail="107573787f64797e756250737664733e777f66">[email protected]</span></a>, 202-
418-5467, Division of Clearing and Risk, Commodity Futures Trading 
Commission, Three Lafayette Centre, 1151 21st Street NW, Washington, DC 
20581.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background
II. Amendments
III. Related Matters
    A. Regulatory Flexibility Act
    B. Paperwork Reduction Act
    C. Cost Benefit Considerations
    D. Antitrust Considerations

I. Background

    Part 40 of the Commission's regulations \1\ implements section 
5c(c) of the CEA and sets forth provisions that are common to 
registered entities, including designated contract markets (``DCMs''), 
derivatives clearing organizations (``DCOs''), swap execution 
facilities (``SEFs'') and swap data repositories (``SDRs'').\2\ Part 40 
establishes requirements and procedures for registered entities to 
submit their rules and products to the Commission prior to implementing 
rules, listing products for trading, or accepting products for 
clearing. Part 40 generally provides two means for registered entities 
to submit products, rules, and rule amendments (which include product 
amendments) to the Commission. Typically, a registered entity elects to 
use the self-certification process through which the registered entity 
certifies that the product, rule or rule amendment complies with the 
CEA and the Commission regulations.\3\ Alternatively, a registered 
entity may seek Commission approval of the product, rule or rule 
amendment.\4\
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    \1\ Commission regulations referred to in this release are found 
at 17 CFR chapter I (2024), and are accessible on the Commission's 
website at https://www.cftc.gov/LawRegulation/CommodityExchangeAct/index.htm.
    \2\ Section 1a(40) of the CEA defines the term registered entity 
to include DCMs, DCOs, SEFs and SDRs.
    \3\ See CEA section 5c(c)(1), Sec. Sec.  40.2 and 40.6. But see, 
e.g., Sec.  40.4 (requiring that a DCM submit for Commission 
approval any rule that would materially change a term or condition 
of a contract for future delivery in an agricultural commodity 
enumerated in CEA Section 1a(9) or of an option on such contract or 
commodity).
    \4\ See CEA section 5c(c)(4), Sec. Sec.  40.3 and 40.5.
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    The part 40 regulations also set forth the Commission's procedures 
for review (including approval or non-approval) of product and rule 
submissions. The part 40 regulations set forth certain information that 
must be made publicly available in connection with an application to 
become designated as a DCM, or registered as a SEF, DCO or SDR and when 
registered entities file new products, new rules and rule 
amendments.\5\ Additionally, the regulations include special 
certification provisions for certain rules submitted by systemically 
important DCOs (``SIDCOs'').\6\
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    \5\ See Sec.  40.8. Regulation Sec.  40.8 is not the subject of 
this rulemaking. Regulations 40.11 and 40.12 (which relate to the 
Commission's review of certain event contracts and the staying of 
certification and tolling of review period pending jurisdictional 
determination, respectively) are also not the subject of this 
rulemaking. A private citizen suggested changes to Sec. Sec.  40.11 
and 40.12. See Ravnitzky at 2-3. The Commission cannot consider 
herein changes to Sec. Sec.  40.11 and 40.12 as Sec. Sec.  40.11 and 
40.12 are not the subject of this rulemaking and no changes were 
proposed to Sec. Sec.  40.11 or 40.12 in the NPRM for notice and 
public comment.
    \6\ See Sec.  40.10.
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    With two exceptions, the Commission last amended the part 40 
regulations in 2011,\7\ in connection with implementing various 
amendments made to the CEA by the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (``Dodd-Frank Act''). In September 2023, based 
on the Commission's experience applying the part 40 regulations over 
the ensuing years, the Commission issued a notice of proposed 
rulemaking (the ``NPRM'') in which it proposed amendments to the part 
40 regulations.\8\ The Commission proposed the amendments to the part 
40 regulations in the NPRM to clarify, simplify and enhance the utility 
of the part 40 regulations for registered entities, market participants 
and the Commission.\9\
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    \7\ Provisions Common to Registered Entities, 76 FR 44776 (July 
27, 2011) (the ``2011 Final Rule''). In 2021, the Commission made 
targeted, conforming amendments to Sec.  40.1(j)(1)(vii) and 
(j)(2)(vii) (the portion of the definition of ``terms and 
conditions'' that relates to position limits) to conform this text 
to reflect the position limits amendments adopted by the Commission 
at that time. See Position Limits for Derivatives, 86 FR 3236 
(January 14, 2021). Additionally, in 2015, the Commission removed 
from Sec.  40.8 and appendix D to part 40 all references to 
electronic trading facilities on which significant price discovery 
contracts are traded or executed to reflect the fact that the Dodd-
Frank Act eliminated these facilities from the CEA. See Repeal of 
the Exempt Commercial Market and Exempt Board of Trade Exemptions, 
80 FR 59575 (October 2, 2015).
    \8\ Provisions Common to Registered Entities, 88 FR 61432 
(September 6, 2023).
    \9\ As discussed below in note 19, the Commission is also making 
two conforming, non-substantive changes to update the citations 
referencing the Sec.  40.1 definition of emergency mentioned in 
appendix B to part 37 and appendix B to part 38.
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    The comment period for the NPRM ended on November 6, 2023.\10\ In 
response to the NPRM, the Commission received nine comment letters that 
expressed a wide range of views on the proposed revisions to part 40. 
The letters collectively represented eight DCMs; \11\ two SEFs; \12\ 
one SDR; \13\ seven DCOs; \14\ one non-profit; \15\ two trade

[[Page 88595]]

associations; \16\ one private citizen; \17\ and one venture capital 
firm.\18\
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    \10\ The comment file for responses to the NPRM is available at 
https://comments.cftc.gov/PublicComments/CommentList.aspx?id=7430.
    \11\ Cboe Global Markets, Inc. (``Cboe'') commented on behalf of 
its two DCMs--Cboe Futures Exchange, LLC and Cboe Digital Exchange, 
LLC. CME Group Inc. (``CME Group'') commented on behalf of its four 
DCMs--Chicago Mercantile Exchange Inc. (``CME''), Board of Trade of 
the City of Chicago, Inc., New York Mercantile Exchange, Inc. and 
Commodity Exchange, Inc. (collectively, the ``CME Group 
Exchanges''). The Intercontinental Exchange Inc. (``ICE'') commented 
on behalf of its DCM--ICE Futures U.S. LMX Labs, LLC, which does 
business as Coinbase Derivatives (``Coinbase'') commented as a DCM.
    \12\ Cboe commented on behalf of its SEF--Cboe SEF, LLC. ICE 
commented on behalf of its SEF--Ice Swap Trade.
    \13\ ICE commented on behalf of its SDR--Ice Trade Vault.
    \14\ Cboe commented on behalf of its DCO--Cboe Clear Digital, 
LLC. CME Group commented on behalf of CME in its capacity as a DCO 
(also known as ``CME Clearing''). Eurex Clearing AG (``Eurex'') 
commented as a DCO. ICE commented on behalf of its four DCOs--ICE 
Clear Credit, ICE Clear U.S., ICE Clear Europe, and ICE NGX.
    \15\ Better Markets.
    \16\ The Futures Industry Association (``FIA'') and the 
International Swap Derivatives Association (``ISDA'') submitted a 
joint letter.
    \17\ Mr. Michael Ravnitzky.
    \18\ Andreessen Horowitz (``a16z'').
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    The Commission is making revisions and additions to Sec. Sec.  40.1 
through 40.7, 40.10 and appendices D and E to part 40 to clarify, 
simplify and enhance the utility of the part 40 regulations for 
registered entities, market participants and the Commission. This 
release will address the comments received on each of the relevant 
regulations and appendices below.

II. Amendments

A. Sec.  40.1--Definitions

1. Formatting Change to Sec.  40.1
    Currently, the defined terms in Sec.  40.1 are arranged in 
alphabetical order, with lettered headers. The Commission is adopting 
the amendments proposed to remove the lettered headers from Sec.  40.1 
and to instead arrange the defined terms in Sec.  40.1 solely in 
alphabetical order,\19\ resulting in the Commission having to make 
fewer conforming changes in the future to Sec.  40.1 and other 
regulations when adding or removing defined terms.\20\ The Commission 
received no comments on these proposed changes.
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    \19\ The Commission also is making two conforming changes that 
are necessitated by this change to Sec.  40.1. Specifically, the 
Commission is updating the references to the definition of emergency 
located in the guidance section regarding Emergency Authority of 
appendix B for each of parts 37 and 38 such that they reference 
Sec.  40.1 rather than Sec.  40.1(h). No substance is intended to be 
changed by these amendments.
    \20\ The Office of the Federal Register prefers the solely 
alphabetical approach to definitions sections. See Document Drafting 
Handbook, Office of the Federal Register at 2-27 (Revision 1.4, 
January 7, 2022).
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2. Non-Substantive Amendments to the Definition of ``Business Day''
    The Commission is adopting the proposed non-substantive changes to 
the definition of the term ``business day'' in Sec.  40.1(a). 
Currently, the definition of the term ``business day'' in Sec.  40.1(a) 
uses the term ``business hour'' and defines the term ``business hour'' 
to mean ``any hour between 8:15 a.m. and 4:45 p.m.'' With the exception 
of Sec.  40.1(a), the term ``business hour'' is not used in part 40. To 
enhance the readability of the definition of ``business day,'' the 
Commission is deleting the definition of the term ``business hour'' and 
all references to the term ``business hour'' that currently appear in 
the definition of ``business day'' in Sec.  40.1(a). As amended, the 
term ``business day'' means ``the intraday period of time starting at 
8:15 a.m. and ending at 4:45 p.m. Eastern Standard Time or Eastern 
Daylight Savings Time, whichever is currently in effect in Washington, 
DC, on all days except Saturdays, Sundays, and Federal holidays in 
Washington, DC.'' \21\ By way of example, both prior to this amendment 
and as amended, the Commission must receive a Sec.  40.2 self-
certification submission before 8:15 a.m. on a business day in order 
for the DCM or SEF to be able to list the product starting at 8:15 a.m. 
on the following business day.\22\ The Commission received no comments 
on these proposed changes.
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    \21\ The Commission is not making any substantive changes to the 
definition of ``Business day.''
    \22\ See Sec.  40.2(a)(2).
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3. Amendments to the Definitions of Dormant Entities
    The Commission is amending as proposed the definitions of the terms 
``dormant designated contract market,'' ``dormant derivatives clearing 
organization,'' ``dormant swap data repository,'' and ``dormant swap 
execution facility'' in Sec.  40.1. These amendments relate to the 
calculation of the duration of inactivity of a registered entity that 
will result in the registered entity being deemed dormant. As noted in 
the NPRM, the definitions in Sec.  40.1(c) through (f) were 
inconsistent and, in some cases, unclear as to how the applicable time 
periods were to be determined. Specifically, the Commission is amending 
the regulations as proposed to consistently state the time periods in 
days--i.e., 365 calendar days instead of 12 months, and 1,095 calendar 
days rather than 36 months.
    The amendments establish consistency of the regulatory text across 
the sections with respect to the calculation of the duration of 
inactivity and simplify the calculation of how long a registered entity 
has been inactive thereby reducing the potential that market 
participants may interpret the regulatory language differently. The 
Commission received no comments on these proposed changes.
4. Removal of the Terms ``Dormant Contract or Dormant Product'' and 
``Dormant Rule,'' and Related Requirements
    Regulation Sec.  40.1(b) defines the term ``dormant contract or 
dormant product,'' and Sec.  40.1(g) defines the term ``dormant rule.'' 
If a contract or product of a DCM or SEF is dormant pursuant to 
Sec. Sec.  40.1(b), 40.2(a) prohibits the DCM or SEF from listing the 
contract or product until the DCM or SEF either self certifies that the 
contract or product to be listed complies with the CEA and Commission 
regulations pursuant to Sec.  40.2(a) or obtains Commission approval of 
the contract or product pursuant to Sec.  40.3. Likewise, if a rule of 
a registered entity is dormant pursuant to Sec. Sec.  40.1(g), 40.6(a) 
prohibits the registered entity from implementing the rule until the 
registered entity either certifies that the rule complies with the CEA 
and Commission regulations in accordance with Sec.  40.6(a) or obtains 
Commission approval of the rule pursuant to Sec.  40.5.
    In the NPRM, the Commission proposed to remove the terms ``dormant 
contract or dormant product'' and ``dormant rule'' from Sec.  40.1, and 
the requirements relating to dormant products and dormant rules from 
Sec. Sec.  40.2 and 40.6.\23\ The Commission noted in the NPRM that at 
the time the Commission adopted the dormant contract definition and the 
applicable requirements, contract markets were generally required to 
obtain Commission approval of any new products prior to listing the 
products.\24\ The Commission also noted that the CEA no longer requires 
approval of each contract or product listed by an exchange.\25\ Rather, 
a DCM or SEF may list a product after self-certifying that the product 
to be listed complies with the CEA and Commission regulations in 
accordance with Sec.  40.2. Given this flexibility, DCMs and SEFs 
typically use the self-certification process in Sec.  40.6(a) to delist 
a contract that does not have any open interest before the contract 
could be considered dormant. Monitoring the dormancy status of products 
is an inefficient and unnecessary use of Commission resources.
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    \23\ This release uses ``dormant contract'' and ``dormant 
product'' interchangeably.
    \24\ NPRM at 61433.
    \25\ Section 113 of the Commodity Futures Modernization Act of 
2000 [Appendix E of Pub. L. 106-554, 114 Stat. 2763] added Section 
5c(c) to the CEA.
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    The Commission received comments from Cboe and CME Group in support 
of the proposal to remove the dormant product definition. Cboe and CME 
Group commented that the removal of the dormant product definition 
would result in little, if any, market integrity or safety concerns as 
the DCM or SEF listing the product has a continuing obligation to 
ensure that the product complies with the CEA and applicable Commission 
regulations.\26\ Cboe and CME Group also noted that removing the 
dormant product definition would have the benefit of reducing, or 
potentially reducing, compliance costs

[[Page 88596]]

for market participants and oversight costs for the Commission.\27\ 
Cboe further commented in support of removing the dormant rule 
definition and noted that such removal will not result in any reduction 
in market integrity or safety and will reduce compliance costs for 
market participants and oversight costs for the Commission.\28\
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    \26\ Cboe at 2; CME Group at 3.
    \27\ Id.
    \28\ Cboe at 2.
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    While the removal of the term ``dormant product'' will enable a 
contract that has not been traded for an extended period of time to 
remain listed, the Commission believes any new trading of the contract 
will likely not pose concerns regarding market integrity or safety 
because the DCM or SEF listing the contract has a continuing obligation 
to ensure that the contract complies with the CEA and Commission's 
regulations thereunder.\29\ The removal of the term ``dormant rule'' 
will enable a registered entity to implement a rule more than one year 
after the rule is certified by the registered entity as complying with 
the CEA and Commission regulations in accordance with Sec.  40.6, or 
approved by the Commission in accordance with Sec.  40.5. The 
Commission believes the implementation of a rule more than one year 
after it was certified or approved likely will not pose concerns 
regarding market integrity or safety because the registered entity 
implementing the rule has a continuing obligation to ensure that the 
rule complies with the CEA and the Commission's regulations 
thereunder.\30\ The Commission believes that monitoring the dormancy 
status of rules is an inefficient and unnecessary use of Commission 
resources.
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    \29\ See CEA sections 5(d)(1) and 5h(f)(1) and Sec. Sec.  
38.100(a) and 37.100(a).
    \30\ See CEA sections 5(d)(1) and 5h(f)(1) and Sec. Sec.  
38.100(a) and 37.100(a).
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    The Commission considered all comments received and believes that 
deleting the definitions would result in little, if any, reduction in 
market integrity or safety while potentially reducing compliance costs 
for market participants and oversight costs for the Commission. 
Accordingly, the Commission is removing the definitions of ``dormant 
contract or dormant product'' and ``dormant rule,'' and all references 
to ``dormant contract or dormant product'' and ``dormant rule'' in the 
regulations. The Commission will retain its definitions of dormant 
registered entities, and the rules of a dormant DCM, dormant SEF, 
dormant DCO, or dormant SDR would still need to be approved in 
connection with the entity being reinstated as a DCM, SEF, DCO or SDR, 
respectively.\31\ Also, all products of a registered entity that 
becomes dormant (including products previously listed for trading or 
offered for clearing) would still need to be approved or self-certified 
in order to be listed for trading by the reinstated DCM or SEF or 
offered for clearing by the reinstated DCO.\32\
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    \31\ See, e.g., Sec. Sec.  38.4(a)(2), 37.4(d), and 49.8(b). 
Similarly, in adopting changes to Sec.  39.4(a) in 2020, the 
Commission stated that ``[its] issuance of an order of registration 
as a DCO constitutes an approval of the applicant's rules that were 
submitted as part of the application.'' 85 FR 4852, Jan. 27, 2020.
    \32\ See, e.g., Sec. Sec.  38.4(b), 37.4(d), 40.2, and 40.3.
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5. Amendment to the Definitions of ``rule'' and ``Terms and 
Conditions''
    In the NPRM, the Commission proposed to add ``margin methodology'' 
to the definition of ``rule'' in Sec.  40.1. Prior to 2011, the 
definition of rule in Sec.  40.1 included a restriction on Commission 
review of rules relating to margin levels, based on section 8a(7) of 
the CEA.\33\ After section 736 of the Dodd-Frank Act amended section 
8a(7) of the CEA to remove the restriction on Commission review of 
rules relating to margin levels, the Commission removed the restriction 
from the definition of ``rule.'' Although DCOs have been submitting 
margin-related rule changes to the Commission since 2011, in order to 
address any perceived ambiguity regarding whether DCOs are required to 
do so, the Commission proposed to revise the definition of ``rule'' to 
include an explicit reference to margin methodology.
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    \33\ As noted in the NPRM, prior to the enactment of the CFMA in 
2000, section 5a(a)(12)(A) of the CEA required that all changes to 
contract terms and conditions be submitted to the Commission for 
approval ``except those rules relating to the setting of levels of 
margin.'' The CFMA removed Section 5a(a)(12)(A) and adopted new 
Section 5c(c), allowing registered entities to amend their rules by 
self-certification. The new provision did not retain any reference 
to the exclusion of margin rules. However, Section 8a(7) of the CEA 
was not amended by the CFMA except to replace ``contract market'' 
with ``registered entity'', and retained the provision that allowed 
the Commission to alter or supplement the rules of a DCO, except for 
rules related to ``the setting of levels of margin,'' thereby 
creating uncertainty as to whether registered entities could adopt 
or change margin rules without certifying those rules to the 
Commission. Because there was no indication that Congress intended 
to alter the status of rules relating to the setting of margin 
levels, the Commission had resolved this ambiguity by excluding the 
setting of margin levels, with limited exceptions, from the 
definition of ``rule'' in Sec.  40.1(h), as in effect prior to the 
July 2011 amendments to part 40. Section 8a(7)(D) of the CEA, as 
amended by the Dodd-Frank Act, provides that the Commission is 
authorized to alter or supplement rules of a DCO, including rules 
with respect to margin requirements, provided that the rules: (i) 
are limited to protecting the financial integrity of the [DCO]; (ii) 
are designed for risk management purposes to protect the financial 
integrity of transactions; and (iii) do not set specific margin 
amounts. The Commission eliminated the exclusion of the setting of 
margin levels from the definition of ``rule'' in its 2011 Final 
Rule.
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    ISDA and FIA supported the inclusion of ``margin methodology'' in 
the definition of ``rule,'' and noted the change would provide further 
clarity to DCOs with respect to submission of proposed changes relating 
specifically to margin methodology.\34\ CME Group also supported the 
addition, noting that its margin methodologies are filed as rules and 
it would be prudent to apply this practice uniformly across all 
DCOs.\35\ ICE opposed the addition. ICE argued a margin methodology is 
not the same as a margin-related rule and the reference to ``margin 
methodology'' could broaden the scope of the definition of ``rule'' and 
place additional reporting burdens on DCOs to submit documents that are 
not ``rules.'' \36\ ICE stated that the Commission has not established 
a proper basis for requiring such documents to be filed.\37\
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    \34\ FIA/ISDA at 1.
    \35\ CME Group at 3.
    \36\ ICE at 2.
    \37\ ICE at 2.
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    The Commission is adopting as proposed the amendment to add 
``margin methodology'' to the definition of ``rule.'' The addition of 
``margin methodology'' is not an expansion of the definition of 
``rule,'' but a clarification that a margin methodology, which 
establishes a DCO's policies and procedures for the setting of margin 
levels, is a ``stated policy'' of the DCO, and a ``stated policy'' is 
already included in the definition of ``rule.'' The fact that DCOs have 
been submitting such margin-related rules, including margin 
methodologies, since 2011 demonstrates that the interpretation of the 
definition to include margin methodology was understood by registered 
DCOs generally.
    The Commission proposed to amend the definition ``terms and 
conditions'' by removing the following two items from the scope of the 
definition such that the items to be removed will no longer be treated 
as terms and conditions, and adding the items to the categories of 
rules that may be implemented without certification pursuant to the 
notification processes in Sec.  40.6(d). With respect to a contract for 
the purchase or sale of a commodity for future delivery or an option on 
such a contract or an option on a commodity (other than a swap), the 
Commission proposed to remove ``payment or collection of commodity 
option premiums or margins'' from Sec.  40.1(j)(1)(xi)). With respect 
to a swap, the Commission proposed to remove

[[Page 88597]]

``payment or collection of option premiums or margins'' from Sec.  
40.1(j)(2)(xi)).
    CME Group supported the proposed amendment to Sec.  40.1(j)(1)(xi) 
and the corresponding change to Sec.  40.6(d)(2).\38\ CME Group 
commented that this pair of changes will lower the burden on registered 
entities while still providing sufficient notice to the Commission.\39\ 
The Commission received no comments objecting to the proposed deletions 
from Sec.  40.1 or to the corresponding additions to Sec.  40.6(d)(2).
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    \38\ CME Group at 3.
    \39\ Id.
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    The Commission is adopting these changes as proposed. The 
Commission continues to believe that registered entities should be able 
to submit rules or rule amendments governing the payment or collection 
of these premiums or margins through weekly notices to the Commission 
pursuant to Sec.  40.6(d)(2) as this will lower the burden for 
registered entities and still provide sufficient notice to the 
Commission given the fact that these rules and rule amendments are 
general in substance.\40\
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    \40\ The Commission notes that these rules and rule amendments 
do not include details regarding the models used to calculate the 
premiums or margins.
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B. Sec.  40.2--Listing Products for Trading by Certification

1. Amendments to the Cover Sheet Requirement and the Filing Format and 
Manner Requirements in Sec. Sec.  40.2(a)(3)(i), 40.3(a)(2), 40.5(a)(2) 
and 40.6(a)(7)(i), and Appendix D
    The NPRM proposed to remove the requirement to submit a cover sheet 
when filing a product submission or a rule submission (along with 
related references) from Sec. Sec.  40.2(a)(3)(i), 40.3(a)(2), 
40.5(a)(2) and 40.6(a)(7)(i), and appendix D to part 40. Given the 
development and evolution of the Commission's online portal for the 
filing of rule and product submissions (and the fact that the cover 
sheet information required by Appendix D is now entered by registered 
entities via the portal and processed and stored in the Commission's 
online systems), the cover sheet itself is now unnecessary. The 
Commission received no comments on these proposed changes.\41\
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    \41\ ICE requested an alternative process to enable them to 
submit a single filing that would cover multiple new contracts. See 
ICE at 3. The reason that each contract must be submitted through a 
separate filing is not a regulatory requirement, but rather a 
technical limitation and is thus not addressed herein. The 
Commission acknowledges that a private citizen suggested: (i) that 
more information be provided regarding the portal to ensure 
registered entities and market participants know how to use the 
portal; (ii) the Commission provide templates for registered 
entities and market participants to use as models for their part 40 
submissions; and (iii) the Commission ensure the portal is user-
friendly, reliable and secure. Ravnitzky at 1. The Commission 
clarifies that only registered entities (and not market 
participants) submit filings pursuant to Part 40 through the portal 
and that no changes are being made to the portal through this 
rulemaking. If registered entities have questions about using the 
portal, Commission staff remain available to answer their questions. 
The content required to be included in a submission is addressed in 
the relevant section of Part 40.
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    Accordingly, the Commission is revising Sec. Sec.  40.2(a)(3)(i), 
40.3(a)(2), 40.5(a)(2) and 40.6(a)(7)(i), and appendix D, each as 
proposed, to remove the cover sheet requirement and related references. 
As revised, appendix D will continue to specify the information that 
must be entered by a registered entity as part of the filing process, 
and the Commission will continue to use such information as part of its 
processing and review of submissions.
    Additionally, the Commission proposed to amend appendix D to 
require a SEF or DCM when submitting a new product to indicate whether 
the product to be listed is a ``referenced contract'' as such term is 
defined in Sec.  150.1 and as is described in appendix C to part 150. 
By way of background, the Commission's amendments to part 150 of the 
Commission's regulations (position limits) that became effective on 
March 15, 2021 introduced the term ``referenced contract'' and 
incorporated the term ``referenced contract'' into the definition of 
``terms and conditions'' in part 40.\42\ As a result, before listing a 
new contract for trading, a DCM or SEF must determine whether a new 
contract to be listed is a referenced contract pursuant to part 
150.\43\ To facilitate market participants' compliance with position 
limits, Commission staff maintain an accessible workbook of all 
referenced contracts that are currently listed on DCMs and SEFs. The 
proposed amendment would better enable Commission staff to consider 
whether new contracts to be listed should be added to the workbook in a 
timely, efficient manner and to review such submissions.
---------------------------------------------------------------------------

    \42\ See 86 FR 3236, 3307 (January 14, 2021) Position Limits for 
Derivatives (adding the definition of ``referenced contract'' to 
Sec.  150.1 and incorporating the term referenced contract into 
Sec. Sec.  40.1(j)(1)(vii) and (j)(2)(vii). See also Appendix C to 
Part 150-Guidance Regarding the Definition of Referenced Contract. 
Generally, the term ``referenced contract'' as used for purposes of 
Federal position limits in part 150 and as defined in Sec.  150.1 
means either a futures contract or an option on a futures contract 
whose settlement price is determined by reference, directly or 
indirectly, to the price of one of 25 physically-settled core 
referenced futures contracts enumerated in Sec.  150.2, or a swap 
that qualifies as an ``economically equivalent swap'' (as such term 
is defined in Sec.  150.1) to any of the 25 physically-settled core 
referenced futures contracts enumerated in Sec.  150.2.
    \43\ See Sec. Sec.  40.1(j)(1)(vii) and (j)(2)(vii), 40.2 and 
40.3.
---------------------------------------------------------------------------

    CME Group stated it supports this proposed amendment, noting that 
CME Group Exchanges identify products as referenced contracts when 
submitting new products, and it would be prudent for this to be a 
uniform practice across all DCMs and SEFs.\44\ The Commission believes 
that the identification of new products as referenced contracts as part 
of the filing process will enable the Commission to more efficiently 
process and review submissions of new contracts that are referenced 
contracts. The Commission is adopting the amendment as proposed to 
require a SEF or DCM when submitting a new product to indicate whether 
the product to be listed is a ``referenced contract.''
---------------------------------------------------------------------------

    \44\ CME Group at 3.
---------------------------------------------------------------------------

    Finally, as a related matter, the Commission is amending as 
proposed Sec. Sec.  40.2(a)(1), 40.3(a)(1), 40.5(a)(1) and 40.6(a)(1) 
to remove the reference to the ``Secretary of'' the Commission. The 
Commission also proposed to delegate the Commission's authority to 
specify the format and manner of filing under these regulations to the 
Directors of the Division of Clearing and Risk and the Division of 
Market Oversight by adding proposed Sec.  40.7(e). CME Group supported 
this delegation, noting that their DCMs, DCO and SEF collectively 
submit hundreds of filings each calendar year and that they are 
confident that the division heads will endeavor to make the filing 
formats as uniform as possible.\45\ No other comments were received on 
the proposed changes described in this paragraph. The Commission is 
delegating the authority to specify the format and manner of filing 
under Sec. Sec.  40.2(a)(1), 40.3(a)(1), 40.5(a)(1) and 40.6(a)(1) to 
the Directors of the Division of Clearing and Risk and the Division of 
Market Oversight by adopting Sec.  40.7(e) as proposed.
---------------------------------------------------------------------------

    \45\ CME Group at 3.
---------------------------------------------------------------------------

2. Amendments to Sec.  40.2(a)(3)(ii)
    As noted in the NPRM, both Sec.  40.2(a)(3)(ii) and Sec.  
40.3(a)(3) describe a requirement to submit as part of a self-
certification or a voluntary submission for Commission approval, 
respectively, the rules that set forth a contract's terms and 
conditions. The two provisions use similar, but slightly different, 
language.\46\ Given that the two

[[Page 88598]]

provisions use slightly different words, but are both intended to 
require that the DCM or SEF include a copy of the rules that set forth 
the contract's terms and conditions when submitting a self-
certification or a voluntary submission for Commission approval, 
respectively, the Commission is amending the text of Sec.  
40.2(a)(3)(ii) as proposed to mirror the text used in Sec.  40.3(a)(3). 
With this amendment, both provisions will use the same language for 
consistency and will avoid any potential misreading that the prior 
differences in language between the two provisions were intended to 
signify a difference in substance. The Commission received no comments 
on these proposed changes.
---------------------------------------------------------------------------

    \46\ Regulation Sec.  40.2(a)(3)(ii) requires the self-
certification to include ``a copy of the product's rules including 
all rules related to its terms and conditions.'' Regulation Sec.  
40.3(a)(3) says substantively the same thing, but using different 
words (requiring the voluntary submission for Commission approval of 
a product to include ``a copy of the rules that set forth the 
contract's terms and conditions'').
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3. Amendments to Sec.  40.2(a)(3)(v)
    Section 5c(c)(1) of the Act and Sec.  40.2(a)(2)(iv) require a DCM 
or SEF that elects to list a new contract or other instrument for 
trading through the self-certification process to provide to the 
Commission a written certification that the new contract or instrument 
complies with the Act and the Commission's regulations thereunder prior 
to listing the product for trading. Regulation Sec.  40.2(a)(3)(v) 
requires the DCM or SEF to submit a concise explanation and analysis of 
the product and its compliance with applicable provisions of the Act, 
including core principles, and the Commission's regulations 
thereunder.\47\ Regulation Sec.  40.2(a)(3)(v) further requires that 
the concise explanation and analysis must (1) be accompanied by 
supporting documentation, or (2) incorporate the information contained 
in such documentation, with appropriate citations to data sources. 
Additionally, Sec.  40.2(a)(2)(vi) requires the DCM or SEF to certify 
that it posted on its website a notice of the pending product 
certification and a copy of the product submission.\48\
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    \47\ When reviewing a DCM's product self-certification submitted 
pursuant to Sec.  40.2, Commission staff typically look to 
understand how the product complies with Sec. Sec.  38.200 and 
38.201 in connection with DCM Core Principle 3; Sec. Sec.  38.250 
through 38.258 in connection with DCM Core Principle 4; Sec.  38.300 
and 301, Sec. Sec.  150.2 and 150.5 in connection with DCM Core 
Principle 5; Sec. Sec.  38.400 and 38.401 in connection with DCM 
Core Principle 7; and Sec. Sec.  38.450 and 451 in connection with 
DCM Core Principle 8. Generally, a DCM will address the majority of 
these core principle obligations and Commission regulations (such as 
the DCM's rules that establish surveillance, compliance and 
enforcement practices and procedures that apply to the trading and 
activity on all of the DCM's products as required by Sec. Sec.  
38.250 and 38.251) by concisely referencing rules that the DCM 
already has implemented that will apply to the trading of the new 
product. For core principle obligations and Commission regulations 
that require compliance that is tailored to reflect the product's 
characteristics and its underlying commodity, Commission staff 
typically look at how a product complies with Sec. Sec.  38.200 and 
38.201 in connection with DCM Core Principle 3; Sec.  38.252 (for 
physical-delivery contracts) or Sec.  38.253 (for cash-settled 
contracts) in connection with DCM Core Principle 4; and Sec. Sec.  
38.300, 38.301, 150.2 and 150.5 (position limits and accountability) 
in connection with DCM Core Principle 5. To the extent a product's 
characteristics require additional tailored compliance (e.g., 
protections of markets and market participants from abusive 
practices in compliance with DCM Core Principle 12 and Sec. Sec.  
38.650 and 38.651, and adopting price limits or trading halts to 
limit periods of extreme price volatility in the contract in 
compliance with DCM Core Principle 4 and Sec.  38.255), Commission 
staff will look to understand how the product will comply in light 
of the product's unique characteristics. When reviewing a SEF's 
product self-certification submitted pursuant to 40.2, Commission 
staff typically look to understand how the product complies with 
Sec. Sec.  37.300 and 37.301 in connection with SEF Core Principle 
3; Sec. Sec.  37.400 through 37.408 in connection with SEF Core 
Principle 4; Sec. Sec.  37.600, 37.601, 150.2 and 150.5 in 
connection with SEF Core Principle 6; and Sec. Sec.  37.900 and 
37.901 in connection with SEF Core Principle 9. Generally, a SEF 
will address the majority of these core principle obligations and 
Commission regulations (such as the SEF's rules that establish 
surveillance, compliance and enforcement practices and procedures 
that apply to the trading and activity on all of the SEF's products 
as required by Sec. Sec.  37.400 and 37.401) by concisely 
referencing rules that the SEF already has implemented that will 
apply to the trading of the new product. For core principle 
obligations and Commission regulations that require compliance that 
is tailored to reflect the product's characteristics and its 
underlying commodity, Commission staff typically look at how a 
product complies with Sec.  38.300 and 38.301 in connection with SEF 
Core Principle 3, 37.402 (for physical-delivery swaps) or 37.403 
(for cash-settled swaps) in connection to SEF Core Principle 4, 
Sec. Sec.  37.600 and 37.601, 150.2 and 150.5 (position limits and 
accountability) in connection with SEF Core Principle 6. To the 
extent a product's characteristics require additional tailored 
compliance (e.g., adopting price limits or trading halts to limit 
periods of extreme price volatility in the contract in compliance 
with SEF Core Principle 4 and Sec.  37.405), Commission staff will 
look to understand how the product will comply in light of the 
product's unique characteristics.
    \48\ As noted in Sec.  40.2(a)(2)(vi), the DCM or SEF may redact 
information that it seeks to keep confidential from the documents 
published on its website, but must be republished consistent with 
any determination made pursuant to Sec.  40.8(c)(4). See also DCM 
Core Principle 4 and Sec.  38.401 that require a DCM, among other 
things, to have procedures, arrangements and resources for 
disclosing to the Commission, market participants, and the public 
dissemination of information pertaining to new product listings, new 
rules, rule amendments or other changes to previously-disclosed 
information on the DCM's website.
---------------------------------------------------------------------------

    As noted in the NPRM and as further discussed below, staff has 
observed a trend of new product certifications that do not include 
sufficient information on the underlying commodity, particularly for 
contracts on new commodities (e.g., rare earth metals). To ensure that 
a DCM or SEF's certification submission includes certain basic 
explanation and analysis concerning the product and its compliance with 
the Act and Commissions regulations thereunder, including the 
applicable core principles, the Commission proposed the following 
changes to Sec.  40.2(a)(3)(v).
    Specifically, the Commission proposed to amend the text to include 
references to the ``terms and conditions'' of the product and to ``the 
underlying commodity'' to reiterate the Commission's intent that Sec.  
40.2(a)(3)(v) requires an explanation and analysis of the product's 
underlying commodity, as well as both the product's terms and 
conditions, and the product's compliance with the applicable provisions 
of the Act, including core principles, and the Commission's regulations 
thereunder. The Commission also proposed to add the words ``that is 
complete with respect to'' the product's terms and conditions, the 
underlying commodity, and the product's compliance with applicable 
provisions of the Act, including core principles, and the Commission's 
regulations thereunder to ensure that, although the explanation be 
concise, it nevertheless has to analyze and explain the underlying 
commodity and how and why the contract's terms and conditions comply 
with the applicable core principles. This is not intended to expand or 
otherwise alter the scope of the explanation or analysis required in 
the current regulation.
    Some commenters supported the proposed amendments to Sec.  
40.2(a)(3)(v), and some commenters objected. Specifically, ISDA and FIA 
supported the proposed amendments, stating that they welcome the 
additional requirements for registered entities to provide ``complete'' 
information regarding a new product's terms and conditions under Sec.  
40.2.\49\ ISDA and FIA noted they have observed the emergence of new 
asset classes over the last decade such as cryptocurrency products 
supporting the evolution of digital assets or environmental and carbon 
products to support the green transition, and that it is critical that 
CFTC staff have access to all relevant information in its review of new 
product submissions.\50\
---------------------------------------------------------------------------

    \49\ FIA/ISDA at 1.
    \50\ Id.
---------------------------------------------------------------------------

    Better Markets also commented in support of the proposed 
amendments, calling them (including the requirement to include 
additional details about the product's underlying commodity) a much-
needed enhancement.\51\ Better Markets stated the amendments 
``acknowledge a recurring issue faced by Commission staff--the absence 
of sufficient information in product

[[Page 88599]]

submissions to fulfill the Commission's regulatory obligations.'' \52\ 
Better Markets characterized the amendments as requiring registered 
entities to provide ``a comprehensive explanation of a new product's 
terms and conditions'' . . . that is ``exhaustive in nature, covering 
the product's terms and conditions and, critically, its adherence to 
the applicable provisions of the CEA, including the core principles and 
the Commission's regulations.'' \53\ Better Markets further stated that 
by ``mandating comprehensive information about new products, including 
their underlying commodities, these amendments bolster market 
integrity, protect the interests of market participants, and ensure 
that the Commission can effectively and thoroughly evaluate 
compliance.'' \54\
---------------------------------------------------------------------------

    \51\ Better Markets at 4.
    \52\ Better Markets at 2.
    \53\ Better Markets at 2-4.
    \54\ Better Markets at 4.
---------------------------------------------------------------------------

    A16z requested that the Commission provide guidance on how market 
participants can simultaneously satisfy the requirements to be 
``complete'' while also being ``concise''.\55\ Cboe stated that the 
word ``complete'' should not be included in the product certification 
provisions, and, if it is included, Cboe requests, at a minimum, that 
the Commission clarify that the standard of completeness will be 
applied in a sensible and reasonable manner.\56\ Cboe stated that 
product certifications should focus on key points, as reflected by the 
inclusion of the word ``concise'' in the current and proposed 
regulatory language which describes the explanation and analysis that 
is required to be included. Cboe stated that it is important that the 
application of the product certification provisions focuses on 
requiring a concise description of what is relevant with respect to the 
applicable product in determining what information should be included 
instead of completeness for the sake of completeness which can lead to 
the inclusion of unneeded and irrelevant information.
---------------------------------------------------------------------------

    \55\ A16z at 6.
    \56\ Cboe suggested the Commission can achieve the same outcome 
of requiring pertinent information to be included in product 
certification filings by using the word ``of'' instead of the phrase 
``that is complete with respect to.'' Cboe stated it believes that 
the inclusion of the word ``complete'' can lead to the possibility 
that this standard will be applied in a prescriptive, inconsistent, 
and unreasonable manner (which would in turn undermine the utility 
of the product certification process for registered entities, market 
participants, and the Commission; delay the ability to implement 
products and rule enhancements that benefit the market; and inhibit 
innovation and competition). Cboe further stated the concept of 
completeness is inherently ambiguous and could be applied in a 
rigid, onerous, arbitrary, and/or subjective manner.
---------------------------------------------------------------------------

    Coinbase opposed the proposed amendments to Sec.  40.2(a)(3) and 
stated they ``believe the proposed completeness standard ``lacks 
clarity and would significantly alter the existing process for 
certification under Regulation Sec.  40.2.'' \57\ Coinbase stated that 
the proposed revision is ``unnecessarily burdensome in what it would 
require a DCM to provide to evidence compliance with the CEA and 
Commission regulations'' and is thus ``contrary to the policies 
embedded in CEA section 5c(c) that, prior to certification, the burden 
of evaluating a contract for compliance is with the DCM (not the 
Commission).'' \58\ Coinbase stated that CEA section 5c mandates that 
the Commission rely upon a DCM's ``judgment as to the level of 
information and analysis to include in a product certification to 
explain and analyze concisely the new product, including an explanation 
of the terms and conditions of the contract or the spot market for the 
underlying commodity where they DCM considers appropriate.'' \59\ 
Coinbase further stated that the standard could ``significantly expand 
a DCM's regulatory costs for preparing certified product filings'' \60\ 
and could ``cause other adverse consequences including, but not limited 
to, unnecessarily limiting and delaying the availability of a process 
for listing of derivatives contracts quickly after expending the time, 
effort and diligence to develop the product in the highly competitive 
global derivatives market.'' \61\ Coinbase further noted that the 
proposed amendment ``would leave little daylight between what a DCM 
would submit in a certified filing compared to a new product filed 
voluntarily for CFTC review and approval under CFTC Regulation Sec.  
40.3.'' \62\
---------------------------------------------------------------------------

    \57\ Coinbase at 6.
    \58\ Coinbase at 6.
    \59\ Coinbase at 6.
    \60\ Coinbase at 6.
    \61\ Coinbase at 11.
    \62\ Coinbase at 8.
---------------------------------------------------------------------------

    Coinbase stated that the NPRM provides ``only modest 
justification'' and ``does not cite any concerns that DCMs are abusing 
the certification procedure by certifying non-compliant products.'' 
\63\ Coinbase further noted that the changes are not in response to any 
statutory amendments, and that staff have not articulated any 
significant market failure or rationale that necessitates changes 
beyond those incorporated as a result of the 2011 amendments to part 
40.\64\ Coinbase noted it generally accepts the Commission's position 
that it is appropriate to impose some standard on a registered entity 
to explain in the filing the basis for its compliance with the CEA and 
CFTC regulations, but Coinbase believes the Commission should not move 
away from the standards adopted in 2011.\65\
---------------------------------------------------------------------------

    \63\ Coinbase at 7.
    \64\ Coinbase at 5.
    \65\ Coinbase at 6. Coinbase also stated that ``[a]s required by 
statute, the Commission should continue to rely upon a DCM's 
judgment as to the level of information and analysis to include in a 
product certification to explain and analyze concisely the new 
product, including an explanation of the terms and conditions of the 
contract or the spot market for the underlying commodity where the 
DCM considers appropriate.'' For a discussion of the difference 
between what must be submitted under Sec. Sec.  40.2(a)(3)(v) and 
40.3(a)(4), see the discussion below in section II.C.1.
---------------------------------------------------------------------------

    The Commission has considered the comments received in response to 
the proposed amendments to Sec.  40.2(a)(3)(v). In response to the 
comment that the statute mandates that the Commission rely upon a DCM's 
``judgment as to the level of information and analysis to include in a 
product certification to explain and analyze concisely the new 
product,'' \66\ the Commission notes that while a DCM has reasonable 
discretion in establishing the manner in which the DCM complies with 
Sec.  40.2(a)(3)(v),\67\ the DCM is nonetheless required to provide the 
information, explanation and analysis required by Sec.  40.2(a)(3)(v) 
when self-certifying a product pursuant to Sec.  40.2. For those DCMs 
and SEFs that submit written certifications that satisfy the current 
standards when filing Sec.  40.2 submissions, the changes being made to 
Sec.  40.2(a)(3)(v) should not expand their regulatory costs for 
preparing certified product filings.
---------------------------------------------------------------------------

    \66\ Coinbase at 6.
    \67\ See CEA section 5(d)(1)(B).
---------------------------------------------------------------------------

    Relatedly, and in response to the request for additional 
justification for the amendments to Sec.  40.2(a)(3)(v), the Commission 
is expanding upon the statement in the NPRM that staff have observed a 
trend of new product certifications that do not include sufficient 
information on the underlying commodity, particularly for contracts on 
new commodities (e.g., rare earth metals). The Commission has 
experienced numerous instances of registered entities certifying that 
their product complies with the Act and applicable regulations and 
submitting only cursory supporting analyses, evidence or documentation, 
which is not consistent with the current

[[Page 88600]]

requirement in Sec.  40.2(a)(3)(v).\68\ When the Commission requested 
additional information, the Commission has on numerous occasions 
experienced delays in receiving certain requested information, 
suggesting that supporting analyses had not been prepared by registered 
entities prior to certifying compliance.\69\
---------------------------------------------------------------------------

    \68\ Coinbase's letter quoted a statement made by Commission 
staff in 2018 in Advisory 18-14 that ``the existing self-
certification process has worked well. Typically, exchanges reach 
out to Commission staff in advance of launching a new contract . . . 
[a] lengthy engagement is not unusual for products that may 
implicate complex issues.'' Coinbase at 7. The Commission notes that 
while the Commission continues to believe it is helpful for both the 
registered entity and the Commission when exchanges reach out prior 
to self-certifying new products under Sec.  40.2, it is not required 
by law and it does not always happen. Additionally, even when 
registered entities elect to engage informally with staff prior to 
submitting Sec.  40.2 filings, separate and apart from such 
engagement, the Sec.  40.2 filings must stand independently, provide 
the Commission with a concise explanation and analysis with respect 
to the product's terms and conditions, the underlying commodity, and 
the product's compliance with applicable provisions of the Act, 
including core principles, and the Commission's regulations 
thereunder, and explain to the Commission and the public how and why 
the new contract is in compliance. See also DCM Core Principle 4 and 
Sec.  38.401 that require, among other things, that a DCM have 
procedures, arrangements and resources for disclosing to the 
Commission, market participants, and the public information 
pertaining to new product listings, new rules, rule amendments or 
other changes to previously-disclosed information on the DCM's 
website.
    \69\ The Commission has experienced this challenge before. In 
2011, when the Commission adopted the ``concise explanation and 
analysis'' requirement that applies today, the Commission provided 
the following insight into why it adopted this requirement then--
stating that the Commission has encountered numerous instances in 
which registered entities provided only cursory supporting analyses 
for their product submissions or, in certain cases, failed to 
document the evidentiary basis for their certifications altogether. 
The Commission also has experienced undue delays in receiving 
certain requested information, suggesting that supporting analyses 
had not been prepared by the registered entities as of the time of 
request. Without prompt receipt of supporting information, the staff 
must expend significant resources and time to replicate existing 
analyses or to otherwise independently establish a product's 
compliance with applicable law. In addition, the staff frequently 
has found it necessary to contact registered entities for additional 
guidance on product submissions. To address these problems, final 
Sec.  40.2(a)(3)(v) facilitates the staff's review of new products 
subsequent to certification while discouraging unsupported 
certification of products in the first instance. 2011 Final Rule at 
44780.
---------------------------------------------------------------------------

    By adding the word ``complete'' to Sec.  40.2, the Commission is 
not intending to create a standard that is comparable to a new product 
filed voluntarily for CFTC review and approval under Sec.  40.3. That 
is, when a DCM or SEF voluntarily submits a product for Commission 
review and approval pursuant to Sec.  40.3, the Commission is tasked 
with reviewing the information submitted for the product and using that 
information to determine whether the product would violate the Act or 
the Commission's regulations.\70\ By contrast, when a DCM or SEF elects 
to submit a product pursuant to Sec.  40.2, the DCM or SEF must certify 
that the product complies with the Act and the Commission's regulations 
thereunder.\71\
---------------------------------------------------------------------------

    \70\ See Sec.  40.3(a) and (b). As noted below in section 
II.C.1, when a DCM, SEF or DCO is requesting that the Commission 
review the product for Commission approval pursuant to Sec.  40.3, 
the Commission needs more information for Sec.  40.3 submissions 
than for Sec.  40.2 submissions--hence the inclusion of the word 
``concise'' in Sec.  40.2 and the omission of the word ``concise'' 
in Sec.  40.3. Specifically, pursuant to Sec.  40.3, the Commission 
needs to receive complete information regarding the product's terms 
and conditions, the commodity underlying the product, and the 
product's compliance with applicable provisions of the Act 
(including core principles) and the Commission's regulations to 
understand and assess whether the terms and conditions of the 
product comply with the Act (including core principles) and the 
Commission's regulations.
    \71\ By contrast, for Sec.  40.2 self-certification submissions, 
the DCM or SEF needs to submit concise information regarding the 
product and the commodity underlying the product that explains the 
terms and conditions of the product (as defined in Sec.  40.1) and 
how the DCM or SEF views the terms and conditions of the product as 
compliant with the Act and the Commission's regulations.
---------------------------------------------------------------------------

    The products offered for trading by registered entities vary 
widely, and the applicable statutory and regulatory requirements that 
apply to any particular product thus also vary widely. Each registered 
entity should be familiar with the statutory and regulatory 
requirements that apply for a particular product, and therefore should 
be able to determine what information is reasonable and appropriate for 
the submission to demonstrate compliance with these requirements when 
preparing a Sec.  40.2 submission.
    Prior to the DCM or SEF self-certifying that a product complies 
with the Act and Commission regulations thereunder, the DCM or SEF must 
complete its diligence on the product and its terms and conditions, on 
the underlying commodity, and on ensuring the product complies with the 
applicable provisions of the Act, including core principles, and the 
Commission's regulations thereunder.\72\ The DCM or SEF must have also 
established proper risk management and supervisory oversight prior to 
listing the product for trading, such as the adoption of price limits 
or trading halt provisions when deemed necessary by the DCM or SEF to 
limit the impact of periods of extreme price volatility.\73\ The DCM or 
SEF relies upon its own diligence, risk management and supervisory 
oversight when it self-certifies that the product complies with 
applicable provisions of the Act, including core principles, and the 
Commission's regulations thereunder.\74\
---------------------------------------------------------------------------

    \72\ See CEA sections 5 and 5h, and parts 37 and 38 of the 
Commission's regulations. See also note 47.
    \73\ See id. When a DCM or SEF deems it necessary to adopt price 
limit or trading halt provisions for its new product to limit the 
impact of periods of extreme price volatility in the contract, 
Commission staff typically look for an explanation of the price 
limit or trading halt provisions to understand how the DCM will 
comply with Sec.  38.255 in connection with DCM Core Principle 4, or 
how the SEF will comply with Sec.  37.405 in connection with SEF 
Core Principle 4.
    \74\ This means that a DCM should have completed research on the 
underlying commodity (including delivery points if physically 
delivered commodity and underlying cash price series if cash 
settled) and how the contract complies with the core principles. All 
this should be completed as part of developing the contract prior to 
listing. See note 47.
---------------------------------------------------------------------------

    Currently, and as amended herein, DCMs and SEFs must provide a 
written certification that the product to be listed complies with 
applicable provisions of the Act, including core principles, and the 
Commission's regulations thereunder.\75\ The DCM or SEF must include a 
concise explanation and analysis of the underlying commodity, the terms 
and conditions of the contract and the compliance of the contract with 
applicable provisions of the Act, including applicable core principles 
and Commission regulations.\76\ Cursory or conclusory explanations will 
not suffice.\77\
---------------------------------------------------------------------------

    \75\ Regulation Sec.  40.2(a)(3)(iv).
    \76\ Regulation Sec.  40.2(a)(3)(v). The DCM or SEF must also 
either include the documentation the DCM or SEF relied upon to 
establish its basis for compliance with applicable law, or 
incorporate the information contained in such documentation, with 
appropriate citations to data sources. See Sec.  40.2(a)(3)(v).
    \77\ See 2011 Final Rule at 44780. When adopting the requirement 
that a DCM provide a ``concise explanation and analysis'' pursuant 
to Sec.  40.2(a)(3)(v) to self-certify a new product, the Commission 
described the required ``concise explanation and analysis'' of the 
certified product--and its compliance with applicable law in the 
2011 Final Rule--as ``necessary for the Commission's review of a new 
product certification.''
---------------------------------------------------------------------------

    The Commission is thus adding the word ``complete'' to Sec.  
40.2(a)(3)(v) to confirm that it is essential that the DCM or SEF 
include a concise explanation and analysis (including the supporting 
information and citations or together with the accompanying 
documentation) that explains how and why the contract's terms and 
conditions comply with the applicable core principles and regulations, 
including how the terms and conditions reflect the cash market of the 
underlying commodity. This is a fact-specific endeavor that is 
dependent on the circumstances surrounding the contract and the 
underlying commodity.
    Given the tremendous breadth and variability of products and 
contracts that can be listed on CFTC regulated markets, it is not 
possible for the Commission to state definitively all of

[[Page 88601]]

the core principles and regulations that are relevant for each 
particular contract. However, the Commission notes that for any 
contract to be listed for trading on a DCM or a SEF, it is relevant for 
the DCM or SEF to analyze how the contract is not readily susceptible 
to manipulation in compliance with DCM Core Principle 3 or SEF Core 
Principle 3, respectively.\78\ For any contract to be listed for 
trading on a DCM or a SEF, it is also relevant for the DCM or SEF to 
analyze how the contract complies with DCM Core Principle 5 or SEF Core 
Principle 6, respectively,\79\ which relate to the adoption by the DCM 
or SEF of position limits or position accountability for speculators, 
as is necessary and appropriate, to reduce the potential threat of 
market manipulation or congestion (especially during trading in the 
delivery month) in the contract.
---------------------------------------------------------------------------

    \78\ CEA sections 5(d)(3) and 5h(f)(3).
    \79\ CEA sections 5(d)(5) and 5h(f)(6).
---------------------------------------------------------------------------

    In response to comments, the Commission reiterates it does not view 
the amended provision as altering what is intended to be the existing 
standard or process of complying with Sec.  40.2(a)(3)(v). The 
Commission clarifies in response to a comment received \80\ that the 
``complete'' explanation and analysis required by Sec.  40.2(a)(3)(v) 
is intended to be concise and is not intended to be exhaustive in 
nature.\81\ The Commission also does not believe that the requirements 
in the amended provision to provide evidence of compliance with the CEA 
and Commission regulations are unnecessarily burdensome.\82\
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    \80\ See Better Markets at 2-4.
    \81\ The Commission retains the authority in Sec.  40.2(b) to 
obtain additional evidence, information or data that may be 
beneficial to the Commission in conducting a due diligence 
assessment of the filing and the registered entity's compliance with 
any applicable requirements of the Act or the Commission's 
regulations or policies thereunder.
    \82\ Regulation Sec.  40.2 (a)(3)(v) already requires that the 
explanation and analysis be accompanied by the documentation relied 
upon to establish the basis for compliance with applicable law, or 
incorporate information contained in such documentation, with 
appropriate citations to data sources. For a discussion of costs, 
see the Cost Benefit Considerations section below.
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    Additionally, the Commission notes that, as proposed in the NPRM 
and as adopted herein, Sec.  40.2(a)(3)(v) retains the word 
``concise.'' In response to the request that the Commission provide 
guidance regarding how a DCM or SEF would satisfy the ``complete'' 
requirement while also being ``concise,'' the Commission notes that the 
explanation and analysis required under amended Sec.  40.2(a)(3)(v) 
should explain and analyze the product's terms and conditions, the 
underlying commodity, and how the product complies with applicable law 
and is not necessarily required to be lengthy in order to be 
``complete.'' Moreover, the explanation and analysis incorporates 
information that should already be reviewed or collected by registered 
entities. To the extent that registered entities may be unclear about 
how to apply these standards in a given submission, they are invited to 
engage with staff in advance of self-certifying the product.
    When a DCM or SEF files a product self-certification submission 
with the Commission pursuant to Sec. Sec.  40.2, 40.2(a)(3)(vi) 
requires the DCM or SEF to post a copy of its Sec.  40.2 submission on 
its website, including a copy of the rules that set forth the 
contract's terms and conditions as required by Sec.  40.2(a)(3)(ii) as 
well as the concise explanation and analysis that is complete with 
respect to the contract's terms and conditions, the underlying 
commodity, and the product's compliance with applicable provisions of 
the Act, including core principles, and the Commission's regulations 
thereunder as required by Sec.  40.2(a)(3)(v).\83\ By including this 
information in the Sec.  40.2 submission, the DCM or SEF makes the 
information accessible to market participants and the public. Access to 
the information enables market participants to make educated choices 
when selecting products to trade and platforms on which to trade these 
products.
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    \83\ See also DCM Core Principle 7 (Availability of General 
Information) and implementing Sec. Sec.  38.400(a) and 38.401.
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4. Guidance on Compliance With Sec. Sec.  40.2 and 40.3
    In appendix C of part 38, the Commission offers general guidance 
that a DCM or SEF can use to demonstrate that a contract the DCM or SEF 
certifies or submits for voluntary Commission approval (pursuant to 
Sec.  40.2(a) or Sec.  40.3, respectively) is not readily susceptible 
to manipulation.\84\ Additionally, staff has offered guidance to help 
DCMs and SEFs understand how DCMs and SEFs might elect to demonstrate 
compliance with the part 40 regulations when listing contracts on novel 
commodities (such as the guidance regarding digital commodities in CFTC 
Staff Advisory No. 18-14) for trading. Recently, the Commission 
proposed non-binding Commission Guidance Regarding the Listing of 
Voluntary Carbon Credit Derivative Contracts.\85\
---------------------------------------------------------------------------

    \84\ 17 CFR part 38, appendix C. Guidance set forth in appendix 
B to part 38 states that a DCM may use the appendix C Guidance as 
guidance in meeting DCM Core Principle 3 for new product listings. 
17 CFR part 38, appendix B, Core Principle 3 Guidance. For a 
discussion of the differences between Sec. Sec.  40.2(a) and 40.3, 
see below at section II.C.1.
    \85\ Commission Guidance Regarding the Listing of Voluntary 
Carbon Credit Derivative Contracts; Request for Comment, 88 FR 89410 
(December 27, 2023).
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    In the NPRM, the Commission included two specific product examples 
(one in each of two common categories of contracts) regarding the 
explanation and analysis that should be provided--one for a physically-
settled futures contract on copper and another for a cash-settled 
futures contract on a stock index price series.\86\ The examples are 
intended to show how a DCM or SEF may use the guidance provided in 
appendix C to part 38 to develop the concise explanation and analysis 
to submit with a product self-certification filing. A16z supported the 
inclusion of the two examples provided in the NPRM,\87\ and requested 
the Commission add an example focused on a digital asset.\88\ A16z 
suggested that the Commission explicitly state it will not treat the 
self-certification of digital assets products and rules differently 
from other commodities.\89\ A16z stated that the NPRM appears to reject 
CFTC Staff Advisory 18-14 (``Advisory 18-14'') because the NPRM 
identifies activities that would be sufficient to meet the proposed 
rules for self-certification, but would not meet Advisory 18-14.\90\ 
Cboe commented that appendix C to part 38 is guidance and should 
continue to apply as guidance.\91\
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    \86\ NPRM at 61436.
    \87\ No other comments were received in response to the two 
specific product examples provided in the NPRM.
    \88\ A16z at 6.
    \89\ A16z at 2.
    \90\ Specifically, A16z stated that an entity complying with 
appendix C to part 38 would satisfy the proposed completeness 
standard, but Advisory 18-14 addresses more than appendix C (such as 
an information sharing agreement with any underlying spot markets). 
A16z at 2-4. A16z suggested the Commission make explicit that the 
Commission is not adopting 18-14. A16z at 4.
    \91\ Cboe at 3.
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    In response to these comments, the Commission notes that part 40 
and the amendments adopted in this Final Rule are designed to apply 
across the many different types of products that are traded on DCMs and 
SEFs, cleared by DCOs and reported to SDRs. A product's compliance, and 
demonstration of compliance, is a fact and circumstances specific 
analysis. Regardless of the underlying asset class of a product being 
listed for trading, when a DCM or SEF submits a new derivatives product 
via certification, the terms and conditions of the product should be 
designed to reflect the relevant commodity characteristics used by 
market

[[Page 88602]]

participants transacting in the cash market for that commodity as well 
as cash-market practices for pricing and delivering that commodity, as 
applicable.\92\
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    \92\ See definition of terms and conditions in Sec.  40.1, CEA 
sections 5(d)(3) and 5h(f)(3). See also explanation of Core 
Principle 3 in appendix C to part 38.
---------------------------------------------------------------------------

    Appendix C to part 38 is intended to assist registered entities in 
developing new products (including due diligence, compliance, and 
documentation thereof). The guidance is not altered by the amendments 
adopted in this Final Rule. The Commission agrees that Appendix C to 
part 38 is and remains guidance. The Commission is including below the 
two illustrative examples provided in the NPRM that show what 
information a DCM or SEF should include in the explanation and analysis 
portion of its self-certification for a product it intends to list for 
trading pursuant to Sec.  40.2. While the Commission will not at this 
time provide additional examples for other asset classes generally in 
this Final Rule, the Commission notes that the examples provided are 
intended to serve as representative samples of what information an 
exchange should include in a self-certification. However, the 
Commission notes that each product is unique and may raise novel issues 
that require additional analysis or explanation not provided in the 
examples below. In this sense, digital assets will not be treated 
differently than the other commodities writ large, because the 
diversity of other commodities already requires a case by case 
determination of what an exchange should include in a self-
certification. Staff remain available to answer any questions as DCMs 
and SEFs contemplate novel products and are uncertain of their 
compliance obligations.\93\
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    \93\ Including new examples could create a logical outgrowth 
problem under the Administrative Procedures Act.
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    A DCM or SEF would satisfy the first sentence of Sec.  
40.2(a)(3)(v) with respect to Core Principle 3 by concisely explaining 
how the concepts described in appendix C to part 38 are addressed for 
the contract.\94\ Appendix C to part 38 provides guidance on the 
quality standards that should be defined for the underlying commodity 
in the contract's terms and conditions for a futures contract.\95\ The 
quality standards used should reflect those used in transactions in the 
commodity in normal cash marketing channels and comply with those 
industry established standards.\96\
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    \94\ For a product a DCM or SEF elects to submit for Commission 
review and approval, the DCM or SEF would satisfy the first sentence 
of Sec.  40.3(a)(4) with respect to Core Principle 3 by explaining 
how the concepts described in appendix C to part 38 are addressed 
for the contract. As noted above, more information is needed for a 
40.3 filing in order for the Commission to make an independent 
assessment to decide whether to approve the product than is required 
to understand the compliance diligence completed by a DCM or SEF in 
connection with their 40.2 self-certification filing of a new 
product.
    \95\ See Appendix C to part 38, paragraph (b)(2)(i)(A) for 
physically-settled contracts and paragraph (c)(4)(i)(A) for cash-
settled contracts.
    \96\ See id.
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    To improve the understanding of the level of detail expected by the 
Commission, the discussion below addresses two common categories of 
contracts and provides two specific product examples that illustrate 
what would meet the standard articulated in Sec.  40.2(a)(3)(v) of ``a 
concise explanation and analysis that is complete with respect to the 
product's terms and conditions, the underlying commodity, and the 
product's compliance with applicable provisions of the Act, including 
core principles, and the Commission's regulations thereunder.''
    Generally, as noted above, when listing a cash settled or 
physically settled contract on a commodity, the contract must comply 
with, among any other relevant provisions, DCM Core Principles 3 and 
5,\97\ SEF Core Principles 3 and 6,\98\ and part 150. To be a complete 
and concise explanation and analysis of compliance with those 
requirements, the explanation and analysis the DCM or SEF submits 
describing the characteristics of the contract's underlying commodity 
pursuant to Sec.  40.2(a)(3)(v) should include characteristics such as 
the deliverable commodity's grade, quality and deliverable supply, as 
applicable, as well as the other applicable contract characteristics 
described in appendix C to part 38. Appendix C to part 38 provides 
guidance on the quality standards that should be defined for the 
underlying commodity in the contract's terms and conditions for a 
physically-settled futures contract.\99\ The quality standards used 
should reflect those used in transactions in the commodity in normal 
cash marketing channels and comply with those industry established 
standards.\100\
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    \97\ CEA section 5(d)(3) and (5).
    \98\ CEA section 5h(f)(3) and (6).
    \99\ Appendix C to part 38, paragraph (b)(2)(i)(A).
    \100\ See id. Appendix C also provides that regardless of the 
type of commodity underlying the contract, the DCM or SEF's 
explanation and analysis should describe the cash market for the 
underlying commodity and how the contract's terms and conditions: 
reflect the cash market transactions in the underlying commodity; 
meet the risk management needs of prospective users; and promote 
price discovery of the underlying commodity. Appendix C to part 38, 
paragraph (a).
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    As a specific example for a physically-settled futures contract, 
when listing a physically settled futures contract on copper, the DCM 
should specify the acceptable standard of copper that is eligible for 
delivery on the physically-settled futures contract.\101\ Today, an 
acceptable quality standard for copper in the cash market is Grade 1 
Electrolytic Copper Cathodes (full plate or cut) that conforms to the 
latest chemical and physical specifications adopted by the American 
Society for Testing and Materials for Grade 1 Electrolytic Copper 
Cathodes (B115-00 or its latest revision). If a DCM lists a physically 
settled futures contract on Grade 1 Electrolytic Copper Cathodes, the 
only quality of copper allowed for delivery at the settlement of the 
futures contract would be copper of the quality that meets this 
industry-set standard, and as a result, the price of the futures 
contract would reflect the price of only this kind of copper. Moreover, 
for a physically-settled futures contract on Grade 1 Electrolytic 
Copper Cathodes, the DCM should provide its analysis of the estimated 
deliverable supply of the copper meeting the contract specifications 
located at the delivery facilities identified by the DCM for the 
contract, along with the DCM's explanation and analysis explaining how 
the estimated deliverable supply was used to set an exchange-set 
speculative position limit in accordance with DCM Core Principle 5 and 
Sec.  150.5.\102\
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    \101\ See Appendix C to part 38, paragraph (b)(2)(i)(A). When 
listing a cash settled futures contract on copper, the DCM should 
specify the acceptable standard of copper that underlies the cash 
price series or the physically-settled futures referenced price used 
for cash settlement purposes. See Appendix C to part 38, paragraph 
(c)(4)(i)(A).
    \102\ See Sec.  150.5(b)(1), part 38, Sec.  38.201 Additional 
sources for compliance. Appendix C to part 38.
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    Throughout the life of the futures contract up until the time of 
expiration, copper located in a DCM-approved warehouse of the quality 
specified in the contract would be eligible to be warranted by the 
warehouse for delivery on the contract. The price of the physical 
copper (Grade 1 Electrolytic Copper Cathode) to which the futures 
contract settles and the price of the physically settled futures 
contract on Grade 1 Electrolytic Copper Cathode should match--or 
converge--at the expiration date. The convergence demonstrates that the 
futures contract accurately reflects the cash price of the underlying 
commodity and compliance with DCM Core Principle 3 (that the contract 
is not readily susceptible to manipulation).

[[Page 88603]]

    Similarly, when listing a cash-settled contract based on an 
excluded commodity, the explanation and analysis the DCM or SEF submits 
describing the characteristics of the contract's underlying commodity 
should include characteristics such as the rate, index methodology, and 
pricing source, as applicable, as well as other applicable 
characteristics described in Appendix C to part 38.\103\ Appendix C to 
part 38 provides guidance on the cash settlement price calculation for 
a cash-settled futures contract.\104\ Appendix C provides that the 
cash-settlement price series used by a DCM or SEF to settle a cash-
settled contract should be reflective of the underlying cash-market of 
the commodity, and that price series should be publicly available, 
timely and reliable.\105\ The DCM or SEF should include this 
information in its explanation of how the product complies with the 
applicable provisions of the Act, including core principles, and the 
Commission's regulations thereunder.
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    \103\ See Appendix C to part 38, paragraphs (a) and (c).
    \104\ For example, when listing a cash settled futures contract 
on the S&P 500 Index, the DCM's contract specifications should 
describe the index and its methodology.
    \105\ See Appendix C to part 38, paragraphs (a) and (c).
---------------------------------------------------------------------------

    As a specific product example for a cash-settled excluded 
commodity, when listing a cash-settled futures contract on a stock 
index price series, such as the S&P 500 (a stock index of large 
capitalization stocks listed on U.S. stock exchanges), the DCM should 
specify how the cash settlement price based on the S&P 500 Index is 
reflective of the underlying cash-market, and how that price series is 
reliable, publicly available and timely.\106\ The DCM should describe 
how the S&P 500 Index price series is reflective of the underlying cash 
market of domestic large capitalization stocks by describing the 
methodology for constructing and maintaining the S&P 500 Index.\107\ 
The DCM should describe how the S&P 500 Index is considered by industry 
as an accurate and reliable index of large capitalization stocks by 
describing how the index is used as a benchmark for measuring the 
movements of the U.S. stock exchanges.\108\ The DCM should describe how 
frequently the index is calculated and where it is disseminated to the 
marketplace to describe how the index is publicly available and 
timely.\109\ Moreover, for a cash-settled futures contract on the S&P 
500, the DCM should provide its analysis of trading in S&P 500 futures 
or similar index futures and explain how this analysis was used to set 
an exchange-set position limit or position accountability level in 
accordance with DCM Core Principle 5 and Sec.  150.5.\110\
---------------------------------------------------------------------------

    \106\ See CEA Sections 5(d)(3), Sec. Sec.  38.200 and 201, and 
appendix C to part 38, paragraphs (c)(3)(iv) and (v).
    \107\ See CEA section 5(d)(3), Sec. Sec.  38.200 and 201, and 
appendix C to part 38, paragraph (a)(2).
    \108\ See CEA section 5(d)(3), Sec. Sec.  38.200 and 201, and 
appendix C to part 38, paragraph (a)(2).
    \109\ See CEA section 5(d)(3), Sec. Sec.  38.200 and 201, and 
appendix C to part 38, paragraph (a)(2).
    \110\ See Sec.  150.5(b)(1), part 38, Sec.  38.201 Additional 
sources for compliance. Appendix C to part 38.
---------------------------------------------------------------------------

    While this rulemaking does not provide an example specifically for 
contracts on digital assets, the examples above for cash-settled 
contracts and physically-settled contracts are applicable for contracts 
on digital assets that are cash-settled or physically-settled, just as 
the examples provide guidance on contracts on agricultural, energy, 
metals, and financial commodities that are cash-settled or physically-
settled. Appendix C to part 38 provides guidance on the relevant 
characteristics of the underlying commodity and contract terms and 
conditions that should be considered when the DCM or SEF is explaining 
how and why a contract is not readily susceptible to manipulation in 
compliance with Core Principle 3. Appendix C to part 38 also provides 
guidance on the estimated deliverable supply on the underlying 
commodity that should be considered when the DCM or SEF is explaining 
how and why a contract complies with DCM Core Principle 5 or SEF Core 
Principle 6 (Position Limits or Accountability).
5. Differences Between Sec. Sec.  40.2 and 40.6
    In addition to the comments noted above regarding Sec.  40.2, 
Better Markets commented that the NPRM ``doesn't adequately address the 
discrepancy in the way the Commission reviews self-certified products 
in CFTC Regulation Sec.  40.2 as compared to the way it reviews self-
certification of rules in CFTC Regulation Sec.  40.6.'' \111\ Better 
Markets requested a 10-business day review for products certified under 
Sec.  40.2 (and noted in support of this request that the U.S 
Securities and Exchange Commission adopted a 10-business day period for 
products to be listed on security-based swap execution facilities), and 
to expand the stay in Sec.  40.2(c) \112\ to mirror Sec.  40.6(c)(1) 
\113\ and allow the Commission to postpone the certification of a 
product when that product introduces novel or complex issues 
necessitating extended analysis or is accompanied by inadequate 
explanation.\114\
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    \111\ Better Markets at 2.
    \112\ Pursuant to Sec.  40.2(c), the Commission ``may stay the 
listing of a contract [certified pursuant to Sec.  40.2(a)] during 
the pendency of Commission proceedings for filing a false 
certification or during the pendency of a petition to alter or amend 
the contract terms and conditions pursuant to Section 8a(7) of the 
Act.'' The analogous stay language for rules is set forth in Sec.  
40.6(c)(4). Pursuant to Sec.  40.6(c)(4), the Commission ``may stay 
the effectiveness of an implemented rule during the pendency of 
Commission proceedings for filing a false certification or during 
the pendency of a petition to alter or amend the rule pursuant to 
section 8a(7) of the Act.''
    \113\ Regulation Sec.  40.6(c)(1) states in relevant part that 
the Commission ``may stay the certification of a new rule or rule 
amendment submitted pursuant to [40.6(a)] . . . on the grounds that 
the rule or rule amendment presents novel or complex issues that 
require additional time to analyze, the rule or rule amendment is 
accompanied by an inadequate explanation or the rule or rule 
amendment is potentially inconsistent with the Act or the 
Commission's regulations thereunder.''
    \114\ Better Markets at 5-7.
---------------------------------------------------------------------------

    By contrast, Coinbase stated that the Commission lacks statutory 
authority to reject or stay a self-certified submission for a product 
and suggested the proposed change to Sec.  40.2(a)(3)(v) would create 
procedural confusion by incorrectly implying the Commission has this 
authority if it determines the registered entity did not satisfy the 
proposed prescriptive standard.\115\ Coinbase and A16z pointed to the 
differences in statutory text that apply to self-certified products and 
self-certified rules.\116\ A16z urged the Commission to reconsider its 
``rationale and authority for more extensive product self-
certifications'' given the differences in statutory documentation 
requirements between product and rule self-certifications.\117\
---------------------------------------------------------------------------

    \115\ Coinbase at 2 and 6.
    \116\ A16z further noted that ``5c(c) has extensive provisions 
for the Commission to review and stay certifications of rules, but 
it has no similar provisions for products . . . If these statutory 
differences do not suggest that the CFTC lacks the authority to 
require extensive disclosures as part of the ``written 
certification'' of a product, at a minimum they suggest that a 
product self-certification should be materially more limited than a 
rule self-certification.''
    \117\ A16z at 5.
---------------------------------------------------------------------------

    In response to those comments, the Commission notes that CEA 
section 5c(c)(2) and (3) provide for a 10 business day review period 
for rules and rule amendments that are self-certified and a process to 
stay the certification of a rule or rule amendment that has novel or 
complex issues that require additional time to analyze, an inadequate 
explanation by the

[[Page 88604]]

submitting registered entity, or a potential inconsistency with the CEA 
or Commission regulations.\118\ By contrast, the CEA does not provide 
for a 10 business day review period or an analogous stay process for 
products that are self-certified. Consistent with these statutory 
differences, for self-certified products, the Commission did not 
propose in the NPRM, and is not adopting, either a 10-business day 
review period or a stay process analogous to Sec.  40.6(c)(1).
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    \118\ A private citizen stated that the NPRM does not define 
what constitutes a novel or complex issue, or how the Commission 
would determine if a submission is inconsistent with the CEA or the 
Commission's regulations, and suggested that the Commission better 
define what constitutes a novel or complex issue, and how the 
Commission would determine if a submission is inconsistent with the 
CEA or the Commission's regulations. Ravnitzky at 1-2. Given that 
the Commission did not propose amendments to these standards, the 
Commission is not positioned to address them herein.
---------------------------------------------------------------------------

    In response to the comment suggesting that the Commission 
reconsider its ``rationale and authority for more extensive product 
self-certifications given the differences in statutory documentation 
requirements for product self-certification versus rule self-
certifications'' and the comment stating that the statutory differences 
suggest that a product self-certification should be materially more 
limited than a rule self-certification, the Commission notes that it is 
rational that the Commission needs more documentation or information at 
the time a new product filing is initially submitted pursuant to Sec.  
40.2 and all the terms and conditions of the new product are 
established than at the time a filing is submitted to amend the terms 
or conditions of an existing product pursuant to Sec.  40.6. As 
discussed above, the second sentence of existing Sec.  40.2(a)(3)(v) 
requires that the explanation and analysis submitted to support a 
product self-certification ``either be accompanied by the documentation 
relied upon to establish the basis for compliance with applicable law, 
or incorporate information contained in such documentation, with 
appropriate citations to data sources.'' The Commission notes it did 
not propose, and is not adopting, any amendments to the second sentence 
in Sec.  40.2(a)(3)(v).
    By contrast, Sec.  40.6(a)(7)(v) does not include this 
documentation requirement. In the 2011 Final Rule, the Commission 
stated that it elected not to adopt a documentation requirement in 
Sec.  40.6(a)(7)(v) for initial rule submissions because section 5c(c) 
of the Act provides staff with ten business days to review new rules 
and rule amendments and, if necessary, authorizes staff to prevent them 
from becoming effective until staff receives adequate information from 
the submitting entity.\119\ As noted therein, the Commission's staff 
may request additional information at any time during the applicable 
rule review period pursuant to existing Sec.  40.6(a)(8). The 
Commission further stated that registered entities therefore should 
have sufficient incentives to provide adequate explanations of new 
submissions under Sec.  40.6 without the provision of actual 
documentation.\120\
---------------------------------------------------------------------------

    \119\ 2011 Final Rule at 44782.
    \120\ 2011 Final Rule at 44782.
---------------------------------------------------------------------------

C. Sec.  40.3--Voluntary Submission of New Products for Commission 
Review and Approval

1. Amendments to Sec.  40.3(a)(4)
    Regulation Sec.  40.3(a)(4) requires that when a DCM, SEF or DCO 
voluntarily submits a new product for Commission review and approval 
prior to its listing for trading or accepting the product for clearing, 
the DCM, SEF or DCO must send the Commission ``an explanation and 
analysis of the product and its compliance with applicable provisions 
of the Act, including core principles, and the Commission's regulations 
thereunder.'' As noted in the NPRM, staff relies primarily on the 
explanation and analysis provided pursuant to this requirement to 
analyze the compliance of a product submitted for review and approval 
by the Commission, including the explanation and analysis of the 
commodity underlying the product.
    The Commission proposed to amend Sec.  40.3(a)(4) to clarify that 
the regulation requires an explanation and analysis ``that is complete 
with respect to the product's terms and conditions, the underlying 
commodity and the product's compliance with the applicable provisions 
of the Act, including core principles, and the Commission's regulations 
thereunder.'' \121\ As noted in the NPRM, this amendment is intended to 
ensure the Commission receives adequate information regarding the 
product and the commodity underlying the product to analyze the 
compliance of the product's terms and conditions with the applicable 
provisions of the Act, including core principles, and the Commission's 
regulations thereunder.
---------------------------------------------------------------------------

    \121\ While the Commission is amending the regulation to include 
the word ``complete,'' the Commission notes that the `explanation 
and analysis' requirement in Sec.  40.3(a)(4) does not include the 
qualifier that the submission be 'concise' for the same reasons 
discussed below in footnote 144.
---------------------------------------------------------------------------

    ISDA and FIA supported the additional requirements for registered 
entities to provide ``complete'' information regarding a new product's 
terms and conditions under Sec.  40.3.\122\ ISDA and FIA stated that it 
is critical that CFTC staff have access to all relevant information in 
its review of new product submissions, including for new asset classes 
such as cryptocurrency products supporting the evolution of digital 
assets or environmental and carbon products to support the green 
transition.\123\
---------------------------------------------------------------------------

    \122\ FIA/ISDA at 1.
    \123\ FIA/ISDA at 1.
---------------------------------------------------------------------------

    A16z suggested the final rule would benefit from a more fulsome 
explanation of the requirements necessary to satisfy the completeness 
standard under Sec.  40.3, or alternatively, further clarification 
regarding what factors could make a submission incomplete under Sec.  
40.3 (and what additional activity, burden, and costs are necessary to 
comply with the new rule to help stakeholders understand what 
additional information, if any, the Commission requires).\124\ A16z 
requested that the Commission provide an example of how the new 
language in Sec.  40.3(a)(4) applies to digital assets.\125\
---------------------------------------------------------------------------

    \124\ A16z at 7. A16z referenced note 47 in the NPRM and stated 
that ``We are left only with a statement that the Commission 
requires ``a more detailed explanation'' without any further 
exposition about what additional details are required.''
    \125\ A16z at 6.
---------------------------------------------------------------------------

    In response to the request for a more fulsome explanation, the 
Commission notes by way of background that when a DCM, SEF or DCO 
voluntarily requests that the Commission approve a new product pursuant 
to CEA section 5c(c) and Sec.  40.3, the standard of review that the 
Commission applies in reviewing the product is set forth in Sec.  
40.3(b). Regulation Sec.  40.3(b) states that ``[t]he Commission shall 
approve a new product unless the terms and conditions of the product 
violate the Act or the Commission's regulations.'' \126\ As noted above 
and in the NPRM, the amendment to Sec.  40.3(a)(4) is intended to 
ensure the Commission receives adequate information regarding the 
product and the commodity underlying the product to analyze whether the 
terms and conditions of the product submitted for voluntary Commission 
review and approval violate the CEA or Commission regulations.
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    \126\ See also CEA section 5c(c)(5)(B).
---------------------------------------------------------------------------

    Because the DCM, SEF or DCO is requesting that the Commission 
review the product for Commission approval pursuant to Sec.  40.3, the 
Commission needs more information for Sec.  40.3

[[Page 88605]]

submissions than for Sec.  40.2 submissions--hence the inclusion of the 
word ``concise'' in Sec.  40.2 and the omission of the word ``concise'' 
in Sec.  40.3. Specifically, pursuant to Sec.  40.3, the Commission 
needs to receive complete information regarding the product's terms and 
conditions, the commodity underlying the product, and the product's 
compliance with applicable provisions of the Act (including core 
principles) and the Commission's regulations to understand and assess 
whether the terms and conditions of the product comply with the Act 
(including core principles) and the Commission's regulations.\127\ The 
products offered for trading and clearing by registered entities vary 
widely, and the applicable statutory and regulatory requirements that 
apply to any particular product thus also vary widely. Each registered 
entity should be familiar with the statutory and regulatory 
requirements that apply for a particular product, and therefore should 
be able to determine what information is reasonable and appropriate for 
the submission to demonstrate compliance with these requirements.\128\
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    \127\ By contrast, as discussed above, for Sec.  40.2 self-
certification submissions, the Commission needs to receive a concise 
explanation and analysis that is complete with respect to the 
product's terms and conditions, the underlying commodity, and the 
product's compliance with applicable provisions of the Act, 
including core principles, and the Commission's regulations 
thereunder.
    \128\ As registered entities contemplate selecting to submit new 
products for voluntary Commission review and approval pursuant to 
Sec.  40.3 in the future, Staff remain available to review drafts of 
the Sec.  40.3 filings and to offer feedback on what, if any, 
additional information would be required in order for a submission 
to be ``complete.''
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    In response to the request for a digital asset example, the 
Commission notes it will not at this time provide guidance specifically 
for digital assets, but that registered entities are always welcome to 
reach out to staff if they have any questions regarding how the 
regulations apply to products they are contemplating.\129\
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    \129\ Including new examples could create a logical outgrowth 
problem under the Administrative Procedures Act.
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    The Commission is adopting the amendments to Sec.  40.3(a)(4) as 
proposed.
2. Amendments to Sec.  40.3(a)(10)
    Regulation Sec.  40.3(a)(10) provides that when a DCM, SEF or DCO 
voluntarily submits a contract for Commission approval, Commission 
staff may request additional evidence, information or data 
demonstrating that the contract meets, initially or on a continuing 
basis, the requirements of the Act, or other requirement for 
designation or registration under the Act, or the Commission's 
regulations or policies thereunder. As noted in the NPRM, Sec.  
40.3(a)(10) required the registered entity to provide the requested 
information by the open of business two business days after the date 
Commission staff made such request, or at the conclusion of such 
extended period agreed to by Commission staff after timely receipt of a 
written request from the registered entity.
    In the NPRM, the Commission proposed to remove the two business day 
deadline from Sec.  40.3(a)(10) and replace it with ``the time 
specified by the Commission staff'' to reflect the fact that the two 
business day deadline is often not practical and that the amount of 
time a DCM, SEF or DCO needs to respond depends on the nature and scope 
of the requested information. The Commission received no comments on 
this proposed amendment and is amending Sec.  40.3(a)(10) as proposed.
3. Amendments to Sec. Sec.  40.3(c), 40.3(d) and 40.3(f)
    The Commission is reorganizing and amending paragraphs (c) and (d) 
of Sec.  40.3, which address the Commission's review and determination 
(i.e., approval or non-approval) of products submitted for Commission 
approval. More specifically, to enhance the readability of Sec.  
40.3(c), the Commission is reorganizing Sec.  40.3 as proposed so that 
all of the provisions that may affect the length of the review period 
of a product submitted for Commission approval pursuant to Sec.  40.3 
appear together in Sec.  40.3(c).\130\ The Commission is reorganizing 
Sec.  40.3(d) as proposed to address the Commission's determination, 
including: approval through the passage of the applicable review 
period; and non-approval.
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    \130\ The Commission proposed and is adopting these changes to 
enhance readability and address some confusion regarding the Sec.  
40.3 process. The Commission also proposed, and is adopting, changes 
to reorganize Sec.  40.5 to enhance readability and, in general, 
proposed, and is adopting, parallel structural changes to Sec. Sec.  
40.3 and 40.5 for consistency.
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    As noted in the NPRM, Sec.  40.3(c) provides that all products 
submitted for Commission approval under Sec.  40.3(c) shall be deemed 
approved by the Commission 45 days after receipt by the Commission, or 
at the conclusion of an extended period as provided under Sec.  
40.3(d), ``unless notified otherwise within the applicable period;'' 
provided that the conditions set forth in Sec.  40.3(c)(1) and (2) are 
satisfied. The Commission is moving the notification language from the 
introductory paragraph of Sec.  40.3(c) to Sec.  40.3(d)(1). The 
Commission is replacing the phrase ``unless notified otherwise within 
the applicable period'' (which provides a vague reference to the 
notification involved) with the phrase ``unless the Commission issues a 
notice of non-approval to the registered entity under paragraph (d)(2) 
of this section within the applicable review period.''
    In addition, the Commission proposed to amend the condition in 
Sec.  40.3(c)(2) (which the Commission is moving to Sec.  40.3(c)(4)) 
that must be met for the deemed approval to be effective. The condition 
in Sec.  40.3(c)(2) requires that the submitting entity does not amend 
the terms or conditions of the product or supplement the request for 
approval, except as requested by the Commission or for correction of 
typographical errors, renumbering or other non-substantive revisions, 
during that period. Any voluntary, substantive amendment by the 
submitting entity will be treated as a new submission under this 
section.\131\ In the NPRM, the Commission proposed to revise this 
condition such that any substantive amendment or supplementation by the 
submitting entity, including an amendment or supplementation requested 
by the Commission, would be treated as a new submission under Sec.  
40.3.
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    \131\ As noted in the NPRM, one example of a substantive 
amendment would be changes in the delivery grade or characteristics 
of the underlying commodity for a physically settled contract that 
may affect estimated deliverable supply and thus position limits for 
the contract. Another example would be a change in the price 
reference series of a new cash-settled contract that settles to a 
Price Reporting Agency source (``PRA''). Most PRAs have various 
series on the same commodity that differ from each other depending 
on characteristics such as geographical location of commodity 
transaction or commodity quality characteristics. PRA methodologies 
for the same commodity can differ between PRAs. If an amendment 
changes a PRA as the source, the underlying methodology for the 
price series would need to be examined to determine if it is not 
readily susceptible to manipulation.
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    The Commission received two comment letters responding to proposed 
Sec.  40.3(c)(4). CME Group opposed the proposed amendment, noting that 
the ``Commission presumably understands the basis for its requested 
change or changes so it should not need an additional . . . 45-day 
review period . . . to review the changes it has asked for.'' \132\ 
Coinbase disagreed with the review period restarting ``under 
circumstances when [the Commission] has also determined that the DCM's 
original filing satisfies the requirements of Regulation Sec.  
40.3(a).'' \133\
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    \132\ CME Group at 4.
    \133\ Coinbase at 10. Coinbase further stated that ``Presumably, 
Commission staff will have carefully reviewed and analyzed the 
original complete submission before asking the DCM to take such 
action and this is no compelling reason why it should need a new 45-
day window to complete its review of a submission with which it 
should already be familiar. If the new product raises novel or 
complex issues, the Commission has clear authority under the rule to 
extend the review period up to an additional 45 days . . . and to 
extend the review period further if the DCM agrees. Building in an 
arbitrary extension mechanism that could ensnare a DCM in a chain of 
potentially endless restarts of the clock flies in the face of the 
timing certainty that CEA section 5c(c)(4) is designed to provide to 
DCMs. The justification offered . . . does not warrant this dramatic 
change to Regulation Sec.  40.3.'' Id.

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[[Page 88606]]

    The Commission considered the comments received on the proposed 
amendments to Sec.  40.3(c)(4) and is revising the amendments to Sec.  
40.3(c)(4) such that the review period will not be restarted as a 
result of a DCM, SEF or DCO making an amendment or supplement in 
response to a Commission request. Specifically, as revised and adopted, 
Sec.  40.3(c)(4) will provide that ``[a]ny amendment or supplementation 
made by the registered entity to the submission will be treated as the 
filing of a new submission under this section and be subject to the 
initial 45-day review period in accordance with paragraph (c)(1) of 
this section, unless the amendment or supplementation is requested by 
the Commission or is made for correction of typographical errors, 
renumbering or other non-substantive revisions.'' \134\ As revised and 
adopted, Sec.  40.3(c)(4) is not substantively different than current 
Sec.  40.3(c)(2).
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    \134\ To effectuate this change, the Commission is removing the 
sentence currently in Sec.  40.3(c)(2) that states ``Any voluntary, 
substantive amendment by the submitting entity will be treated as a 
new submission under this section.'' This sentence is redundant and 
its removal makes Sec.  40.3(c)(4) more consistent with the 
analogous provision for rules submitted for Commission approval 
(Sec.  40.5(c)(4)).
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    The Commission also proposed to amend Sec.  40.3(d)(1) (which the 
Commission proposed to move to Sec.  40.3(c)(2)) to provide that the 
Commission may extend the initial 45 day review period for a product 
approval request for up to an additional 45 days if the submission is 
incomplete or the requestor does not respond completely to Commission 
questions in a timely manner. As noted in the NPRM, the Commission has 
the authority to extend its review of a request for rule approval under 
Sec.  40.5 if the submission is incomplete or the requestor does not 
respond completely to Commission questions in a timely manner,\135\ and 
the Commission believes having the same ability to extend reviews of 
voluntary requests for product approval under Sec.  40.3 will better 
enable the Commission to review those products. The Commission received 
no comments on this proposed amendment, and is adopting the amendment 
as proposed.
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    \135\ See Sec.  40.5(d)(1) (which is being moved to Sec.  
40.5(c)(2)). Under both current Sec.  40.5(d)(1) and final Sec.  
40.5(c)(2), the timely manner standard is dependent upon the facts 
and circumstances. The Commission proposed, and is adopting, the 
same timely manner standard for Sec.  40.3(d)(1).
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    The Commission is adopting Sec.  40.3(c)(5) as proposed to extend 
the review period under Sec.  40.3(c)(1) when the review period would 
end on a day that is not a business day to instead end on the next 
business day.\136\ In addition, the Commission is moving text from 
Sec.  40.3(d)(1) to Sec.  40.3(c)(2) and revising the text to permit an 
additional extension of up to 45 days. By way of background, Sec.  
40.3(d)(1) provided that the Commission may extend the review period 
for an additional 45 days if the product raises novel or complex issues 
that require additional time for analysis. Under current Sec.  40.3(c) 
and (d)(1), the initial 45-day review period and the 45-day extended 
review period could not exceed the 90 days permitted by section 
5c(c)(4)(C) of the CEA,\137\ absent agreement by the requestor to a 
further extension.\138\ To ensure that the total review period will not 
extend beyond 90 days after the request is submitted under the amended 
regulations, the Commission is changing as proposed the extended review 
period from ``[a]n additional 45 days'' under Sec.  40.3(d)(1) to ``up 
to an additional 45 days'' in amended Sec.  40.3(c)(2).\139\ The 
Commission received no comments on these proposed changes.
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    \136\ The Commission is revising the header of Sec.  40.3(c) 
from ``Forty-five day review'' to ``Commission review'' to reflect 
the fact that the review period may be extended beyond forty-five 
days due to adjustments so that the review period ends on a business 
day.
    \137\ Section 5c(c)(4)(C) of the Act reads in pertinent part 
that ``the Commission shall take final action on the request not 
later than 90 days after submission of the request, unless the 
person submitting the request agrees to an extension of the time 
limitation established under this paragraph.''
    \138\ Because an extension to which a registered entity may 
agree under final Sec.  40.3(c)(3) is not required to be a specified 
number of days, Commission staff can ensure that the extended period 
ends on a business day.
    \139\ For example, if the end of the initial 45-day review 
period would fall on a Saturday, it would be extended by Sec.  
40.3(c)(5) to Monday, the next business day, for a total of 47 days. 
Any additional extension under Sec.  40.3(c)(2) could not exceed 43 
days (47 + 43 = 90).
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    The Commission also is making explicit in Sec.  40.3(c)(3) as 
proposed that the Commission may at any time extend its review period 
for any period of time (including beyond the 90-day review period), 
provided that it does so with the written agreement of the registered 
entity.\140\
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    \140\ Regulation Sec.  40.3(d)(2) provided the Commission with 
authority to extend the review period with the written agreement of 
the registered entity. The amendment in Sec.  40.3(c)(3) is intended 
to ensure it is clear that the authority also applies during any 
extended review period.
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    Additionally, the Commission is redesignating Sec.  40.3(f)(1) as 
Sec.  40.3(e)(1) and making the proposed amendments to this provision. 
Regulation Sec.  40.3(f)(1) provided that ``[n]otification to a 
registered entity under paragraph (e) of this section of the 
Commission's determination not to approve a product does not prejudice 
the entity from subsequently submitting a revised version of the 
product for Commission approval or from submitting the product as 
initially proposed pursuant to a supplemented submission.'' The 
Commission is amending the text by replacing the word ``prejudice'' 
with ``prevent'', replacing the words ``pursuant to'' with ``in'', 
adding the phrase ``the revised or supplemented submission will be 
reviewed without prejudice'' at the end, and inserting two commas to 
help avoid any confusion as to the effect of the non-approval. Also, 
the changes to the section will improve consistency with Sec. Sec.  
40.5(e)(1) and 40.6(c)(5)(i). The Commission received no comments on 
these proposed changes.
    Finally, the Commission is redesignating Sec.  40.3(f)(2) as Sec.  
40.3(e)(2) and adopting the proposed amendments to this provision. 
Specifically, Sec.  40.3(f)(2) provided that notification to a 
registered entity under paragraph (e) of this section of the 
Commission's refusal to approve a product shall be presumptive evidence 
that the entity may not truthfully certify under Sec.  40.2 that the 
same, or substantially the same, product does not violate the Act or 
the Commission's regulations thereunder. The Commission is amending the 
text as proposed by replacing the words ``refusal'' with 
``determination not'', and replacing the words ``does not violate the 
Act'' with ``complies with the Act.'' The Commission believes these 
amendments will have the effect of increasing clarity and provide 
consistency with Sec. Sec.  40.2(a)(3)(iv) and 40.5(f)(2) (which the 
Commission is renumbering as Sec.  40.5(e)(2)). The Commission received 
no comments on these proposed changes.

D. Sec.  40.4--Amendments to Terms or Conditions of Enumerated 
Agricultural Products

1. Clarification Regarding Scope of Sec.  40.4 and Materiality Under 
Sec.  40.4
    Regulation Sec.  40.4(a) requires a DCM to submit rule changes that 
would materially change a term or condition of a contract on an 
agricultural product enumerated in section 1a(9) of the CEA

[[Page 88607]]

with open interest for Commission approval under the procedures of 
Sec.  40.5. The Commission notes that Sec.  40.4(a) applies strictly to 
rules that materially change a product's economic terms and conditions, 
and does not apply to other rules. To ensure this requirement is clear, 
the Commission is adding the word ``product's'' to the text of Sec.  
40.4(a) to modify ``term or condition'' as used therein and replacing 
the words ``should not be submitted under this section'' in Sec.  
40.4(b) with the words ``are not required by this section to be 
submitted for Commission approval under the procedures of Sec.  40.5,'' 
each as proposed. The Commission did not receive any comments 
responding to any of the amendments proposed to Sec.  40.4.
    By way of background, as noted in the NPRM, when a registered 
entity submits a change to any terms or conditions of a contract on an 
agricultural product enumerated in section 1a(9) of the CEA with open 
interest, the DCM's assessment of materiality affects whether the 
registered entity must submit the change for Commission approval under 
Sec.  40.5 (as is required for material changes). A DCM may file a 
change that falls within any of the four types of discrete changes 
enumerated in Sec.  40.4(b)(1) through (4) through self-certification 
pursuant to Sec.  40.6(a) or notice filing pursuant to Sec.  40.6(d), 
as applicable.\141\ For any other rule that the DCM believes to be non-
material, Sec.  40.4(b)(5) sets forth a process for the DCM to 
implement the change through self-certification pursuant to Sec.  
40.6(a). In order for a DCM to self-certify the change, Sec.  
40.4(b)(5) requires the DCM to make a non-materiality filing and 
explain why it considers the rule change to be ``non-material.''
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    \141\ Regulations 40.4(b)(1) through (4) state that the changes 
covered therein are not material. Thus, a DCM filing a change under 
Sec.  40.4(b)(1) through (4) is not required to file a non-
materiality explanation. In addition to the Sec.  40.6(a) self-
certification process and the Sec.  40.6(d)(2) notice filing process 
(which the Commission is re-designating as Sec.  40.6(d)), if 
applicable, a DCM may also place a non-material rule change into 
effect without certification or notice to the Commission if the 
conditions enumerated in Sec.  40.6(d)(3) (which the Commission is 
re-designating as Sec.  40.6(e)) are satisfied.
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    To assist a DCM in assessing and explaining whether a change to the 
terms and conditions of a contract on an agricultural product 
enumerated in section 1a(9) of the CEA that has open interest is a 
material change (and thus must be filed under Sec.  40.5 pursuant to 
Sec.  40.4(a)) or is non-material (and thus can be implemented through 
the Sec.  40.6(a) self-certification process, the Sec.  40.6(d) notice 
process or the Sec.  40.6(e) process (as applicable), all in accordance 
with Sec.  40.4(b)(5)), the Commission is adding an appendix E to part 
40 as proposed and including therein the criteria that the Commission 
generally considers as evidence that an enumerated agricultural product 
rule change is non-material under Sec.  40.4(b)(5) as proposed. 
Specifically, appendix E to part 40 provides that a non-material 
change: should not affect a reasonable trader's decision to enter into, 
or maintain, a position; should not affect a reasonable trader's 
decision to make or take delivery on the contract or to exercise an 
option on the contract; and should not have an effect on the value of 
existing positions, including, but not limited to, a change affecting 
the price of the contract due to a change in the commodity quality 
characteristics of the existing contract, a change to the size of the 
existing contract, or a change to a cost of effecting delivery for the 
existing contract. The Commission did not receive any comments 
responding to the proposal of new appendix E to part 40.
2. Additional Amendments to Sec.  40.4(b)
    The Commission is adopting the proposed amendments to Sec.  
40.4(b)(1) through (5) to enhance the readability, consistency and 
clarity of this regulatory text. Specifically, the Commission is 
clarifying that the intent of Sec.  40.4(b) is to convey that the rules 
and rule amendments identified as non-material are not required to be 
submitted for Commission approval under the procedures of Sec.  40.5. 
The Commission is replacing the word ``changes'' in each of Sec.  
40.4(b)(1) through (4) with ``rules or rule amendments'' so that the 
text of paragraphs (b)(1) through (4) use the same language as the text 
used in the introductory paragraph of Sec.  40.4(b). Additionally, the 
Commission is replacing the word ``if'' in each of Sec.  40.4(b)(1), 
(3) and (4) with the words ``provided that they are'' to clarify (and 
avoid confusion) that the implementation specified in the applicable 
paragraph (Sec.  40.4(b)(1), (3) and (4)) is a condition that must be 
satisfied in order to rely upon Sec.  40.4(b)(1), (3) or (4), as 
applicable. None of these amendments is intended to alter the substance 
of Sec.  40.4.
    The Commission is removing the reference to ``changes in no 
cancellation ranges'' in Sec.  40.4(b)(3) as proposed. As discussed 
below in section II.F.4, the Commission is amending Sec.  40.6(d) to 
allow a registered entity to file rules and rule amendments governing 
changes in no cancellation ranges pursuant to the notification 
procedures of Sec.  40.6(d). By filing rules and rule amendments 
governing no cancellation ranges pursuant Sec.  40.6(d), such rules and 
rule amendments would be non-material pursuant to Sec.  40.4(b)(1), 
making the current language ``changes in no cancellation ranges'' in 
Sec.  40.4(b)(3) redundant and unnecessary.
    Additionally, to enhance readability of Sec.  40.4(b)(5), the 
Commission is moving from Sec.  40.4(b)(5)(iii) to Sec.  40.4(b)(5)(i) 
the text requiring that a rule or rule amendment filed under Sec.  
40.4(b)(5) be submitted pursuant to the procedures of Sec.  40.6(a), 
and is deleting redundant text in Sec.  40.4(b)(5)(iii). The Commission 
is adding text to Sec.  40.4(b)(5)(ii) to provide that when a DCM 
provides an explanation as to why it considers the rule ``non-
material,'' the DCM shall, if applicable, include a previously approved 
rule or rule amendment that is, in substance, the same as the subject 
non-material rule or rule amendment. The Commission believes the copy 
of the previously approved rule or rule amendment will provide market 
participants with context and background that will be helpful 
information in understanding the subject rule or rule amendment and why 
it is non-material.

E. Sec.  40.5--Voluntary Submission of Rules for Commission Review and 
Approval

1. Reorganization and Clarification of Sec.  40.5
    The Commission is reorganizing and clarifying Sec.  40.5, which 
addresses the submission by registered entities of requests for 
Commission approval of new rules and rule amendments and the 
Commission's review of such rules and rule amendments. As amended, 
paragraphs (a) and (b) of Sec.  40.5 remain largely unchanged, with the 
exception of the conforming amendments previously discussed \142\ and 
the two changes discussed below. FIA and ISDA stated that they are 
generally supportive of all the clarifications, enhancements and 
reorganizations of Sec.  40.5.\143\
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    \142\ The amendments include the removal of references to a 
cover sheet, dormant rules, and submission to the Secretary of the 
Commission.
    \143\ FIA/ISDA at 1.
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    The Commission proposed to clarify that Sec.  40.5(a)(5) requires 
an explanation and analysis ``that is complete with respect to'' the 
operation, purpose, and effect of the proposed rule or rule amendment 
and its compliance with applicable provisions of the Act, including 
core principles and the Commission's regulations thereunder for the 
same reasons the language regarding completeness was proposed in 
Sec. Sec.  40.2(a)(3)(v), 40.3(a)(4), and 40.6(a)(7)(v). As noted in 
note 47 of the

[[Page 88608]]

NPRM, the ``explanation and analysis'' requirement in Sec.  40.5(a)(5), 
like the ``explanation and analysis'' requirement in Sec.  40.3(a)(4), 
does not include the qualifier that the submission be ``concise.'' 
\144\ A16z suggested that more explanation is required regarding what 
additional information is needed for the explanation and analysis to be 
``complete'' in the absence of the concise language.\145\ A16z 
referenced note 47 in the NPRM and suggested further explanation is 
required than the statement that the Commission requires ``a more 
detailed explanation.'' \146\
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    \144\ See NPRM at 61439. See also the 2011 Final Rule at 44782 
(stating ``The Commission notes that the `explanation and analysis' 
requirement in final Sec.  40.5(a)(5) does not include the qualifier 
that the submission be `concise.' The Commission requires registered 
entities to provide a more detailed explanation and analysis of 
rules voluntarily submitted for Commission approval under the 
provisions of Sec.  40.5.'').
    \145\ A16z at 7.
    \146\ Id.
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    In response to the request for additional explanation, the 
Commission notes by way of background that pursuant to CEA section 
5c(c)(5)(A) and Sec.  40.5(b), the Commission shall approve a new rule 
or rule amendment of a registered entity that the registered entity 
submits for Commission approval pursuant to CEA section 5c(c)(4) and in 
accordance with Sec.  40.5 unless the rule or rule amendment is 
inconsistent with the Act or the Commission's regulations. For the 
Commission to review a new rule or rule amendment of a registered 
entity for voluntary approval pursuant to this standard, the Commission 
needs to understand the rule or rule amendment and the operation, 
purpose, and effect of the rule or rule amendment. As noted above and 
in the NPRM, the amendment to Sec.  40.5(a)(5) is intended to ensure 
the Commission receives adequate information regarding the rule or rule 
amendment to analyze whether the rule or rule amendment submitted for 
voluntary Commission review and approval is inconsistent with the Act 
or the Commission's regulations.
    Because the registered entity is requesting that the Commission 
review the rule or rule amendment for Commission approval pursuant to 
Sec.  40.5, the Commission needs more information for Sec.  40.5 
submissions than for Sec.  40.6 submissions--hence the inclusion of the 
word ``concise'' in Sec.  40.6 and the omission of the word ``concise'' 
in Sec.  40.5. Specifically, pursuant to Sec.  40.5, the Commission 
needs to receive an explanation and analysis that is complete with 
respect to operation, purpose, and effect of the proposed rule or rule 
amendment and its compliance with applicable provisions of the Act, 
including core principles, and the Commission's regulations thereunder, 
to understand and assess whether the rule is inconsistent with the CEA 
or the Commission's regulations. The rules and rule amendments 
implemented by registered entities vary widely, and the statutory and 
regulatory requirements that apply to any particular rule or rule 
amendment thus also vary widely. Each registered entity should be 
familiar with the statutory and regulatory requirements that apply for 
a particular rule or rule amendment, and therefore should be able to 
determine what information is reasonable and appropriate for the 
submission to demonstrate compliance with these requirements. The 
Commission is amending Sec.  40.5(a)(5) as proposed to clarify that 
this regulation requires an explanation and analysis ``that is complete 
with respect to'' the operation, purpose, and effect of the proposed 
rule or rule amendment and its compliance with applicable provisions of 
the Act, including core principles, and the Commission's regulations 
thereunder.
    Regulation Sec.  40.5(a)(6) provides that the registered entity 
shall certify that it posted a notice on its website of the pending 
rule with the Commission. To clarify that the reference to the 
``pending rule'' in Sec.  40.5(a)(6) is intended to refer to the 
request of the registered entity for approval by the Commission of the 
new rule or rule amendment, the Commission is amending the text of 
Sec.  40.5(a)(6) as proposed by replacing the words ``pending rule with 
the Commission'' with the words ``a notice of its request for 
Commission approval of the new rule or rule amendment.'' The amended 
language will also use language that is consistent with Sec.  
40.3(a)(9).\147\ No comments were received in response to the proposed 
amendments to Sec.  40.5(a)(6).
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    \147\ The Commission also is eliminating the word ``which'' from 
the second sentence of Sec.  40.5(a)(6) to improve clarity and 
readability.
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    The Commission proposed to amend Sec.  40.5(c) and (d), which 
address the Commission's review and determination (i.e., approval or 
non-approval) of new rules and rule amendments. To enhance readability, 
the Commission is reorganizing Sec.  40.5 so that all of the provisions 
that may affect the length of the review period of a rule submitted for 
Commission approval pursuant to Sec.  40.5 appear together in Sec.  
40.5(c)--with the exception of expedited approval (which is moving to 
Sec.  40.5(d)(2)).\148\ The Commission is adding Sec.  40.5(c)(6), as 
proposed, to extend the review period under Sec.  40.5(c)(1) \149\ when 
the review period would end on a day that is not a business day to 
instead end on the next business day.\150\ The Commission is moving the 
text from Sec.  40.5(d)(1) to Sec.  40.5(c)(2)) and revising the text 
to permit an additional extension of up to 45 days. No comments were 
received in response to any of the proposed amendments to Sec.  40.5(c) 
or (d).
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    \148\ The Commission is making these changes to enhance 
readability and address some confusion regarding the Sec.  40.5 
process. Changes to Sec.  40.5(d)(2) are discussed below.
    \149\ Because an extension to which a registered entity may 
agree under Sec.  40.5(c)(3) is not required to be a specified 
number of days, Commission staff can ensure that the extended period 
ends on a business day.
    \150\ The Commission is revising the header of Sec.  40.5(c) 
from ``Forty-five- day review'' to ``Commission review'' to reflect 
the fact that, pursuant to Sec.  40.5(c)(6), the review period may 
be extended beyond forty-five days due to adjustments so that the 
review period ends on a business day.
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    By way of background, Sec.  40.5(d)(1) (which the Commission is 
moving to Sec.  40.5(c)(2)) provides that the Commission may extend the 
review period for an additional 45 days if the proposed rule raises 
novel or complex issues that require additional time for review or is 
of major economic significance, the submission is incomplete or the 
requestor does not respond completely to Commission questions in a 
timely manner. Under Sec.  40.5(c) and (d)(1), the initial 45-day 
review period and the 45-day extended review period could not exceed 
the 90 days permitted by section 5c(c)(4)(C) of the CEA, absent 
agreement to a further extension by the registered entity that 
requested the review. To ensure that the total review period will not 
extend beyond 90 days after the request is submitted under the amended 
regulations, the Commission is adopting the proposed change to the 
extended review period under Sec.  40.5(c)(2), from ``an additional 45 
days'' to ``up to an additional 45 days.'' For example, if the end of 
the initial 45-day review period would fall on a Saturday, and is 
extended by Sec.  40.5(c)(6) to Monday, the next business day, for a 
total of 47 days, any additional extension under Sec.  40.5(c)(2) could 
not exceed 43 days (47 + 43 = 90).
    The other changes the Commission is adopting to the regulatory text 
in Sec.  40.5(c) are non-substantive and are not intended to alter the 
length of time the Commission has to review a rule submitted for 
Commission approval under Sec.  40.5(a).\151\ As part of these non-

[[Page 88609]]

substantive amendments, the Commission is making explicit in Sec.  
40.5(c)(3) that the Commission may at any time extend its review period 
for any period of time, provided that it does so with the written 
agreement of the registered entity.\152\
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    \151\ The Commission is adding descriptive language into Sec.  
40.5(c)(5) to provide the reader with context to better understand 
the interaction of the provisions in Sec. Sec.  40.4(b)(5) and 
40.5(c)(5). The descriptive language added to Sec.  40.5(c)(5) is 
consistent with current Sec.  40.5(c)(2). For a discussion of the 
materiality determination under Sec.  40.4(b)(5), see Section II.D 
above.
    \152\ Regulation Sec.  40.5(d)(2) provides the Commission 
authority to extend the review period with the written agreement of 
the registered entity. The amendment in Sec.  40.5(c)(3) will ensure 
it is clear that the authority also applies during any extended 
review period.
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    The Commission is reorganizing Sec.  40.5(d) to address the 
Commission's determination with respect to a proposed rule or rule 
amendment, including: approval through the passage of the applicable 
review period; expedited approval; and non-approval. The Commission is 
renumbering Sec.  40.5(g), which addresses expedited approval of a 
proposed rule or rule amendment, as Sec.  40.5(d)(2) and amending it to 
remove the limitations that expedited approval may be used only for 
``changes to'' a proposed rule or a rule amendment, and the changes to 
the proposed rule or rule amendment may only be approved through 
expedited approval if they are consistent with ``standards approved or 
established by the Commission.'' The Commission is also removing the 
condition that ``the Commission may, at any time, alter or revoke the 
applicability of such a notice to any particular product or rule 
amendment.'' \153\ The Commission believes that the quoted text that 
these amendments will remove is not necessary or could be misconstrued 
in connection with the ability of the Commission to approve proposed 
rules and rule amendments that are consistent with the CEA and 
Commission regulations on an expedited basis.\154\ The Commission is 
also renumbering Sec.  40.5(f), which addresses the impact of non-
approval, as Sec.  40.5(e). No comments were received in response to 
any of proposed Sec.  40.5(e).
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    \153\ The Commission is unaware of ever using this condition.
    \154\ The Commission is also replacing the word ``under'' with 
``in compliance with'' in Sec.  40.5(d)(1) to clarify that 
consideration for approval is contingent upon complying with the 
requirements of Sec.  40.5(a).
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    The text of Sec.  40.5(f)(1), which the Commission is renumbering 
as Sec.  40.5(e)(1), provides that ``[n]otification to a registered 
entity under paragraph (d)(3) of this section does not prevent the 
registered entity from subsequently submitting a revised version of a 
proposed rule or rule amendment for Commission review and approval, or 
from submitting the new rule or rule amendment as initially proposed in 
a supplemented submission; the revised submission will be reviewed 
without prejudice.'' The revisions or supplements under current Sec.  
40.5(f)(1) and new Sec.  40.5(e)(1) must provide a substantive basis to 
treat the revised rule or supplemented submission differently from the 
previously submitted rule. To clarify that ``[n]otification to a 
registered entity'' means a notification of non-approval by the 
Commission, the Commission is amending this text by adding the words 
``of the Commission's determination not to approve a new rule or rule 
amendment''. The Commission also is adding the words ``or 
supplemented'' to the text to clarify that supplemented submissions are 
``reviewed without prejudice.'' \155\ The Commission believes this will 
help avoid potential confusion and make the section more consistent 
with final Sec.  40.5(e)(2) (which was previously Sec.  40.5(f)(2)).
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    \155\ The Commission additionally is non-substantively amending 
Sec.  40.5(f)(1) to include two new commas. The Commission believes 
this will improve readability and reduce the risk of confusion.
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    Regulation Sec.  40.5(f)(2), which the Commission is renumbering as 
Sec.  40.5(e)(2), provides that notification to a registered entity 
under paragraph (d)(3) of this section of the Commission's 
determination not to approve a proposed rule or rule amendment is 
presumptive evidence that the entity may not truthfully certify the 
same, or substantially the same, proposed rule or rule amendment under 
Sec.  40.6(a). To clarify that certification under Sec.  40.6(a) is 
referring to the certification that the rule or rule amendment complies 
with the CEA and the Commission's regulations, the Commission is 
amending the text to add ``complies with the Act and the Commission's 
regulations thereunder'' and to move ``under Sec.  40.6(a)'' to earlier 
in the text. The Commission believes these changes will enhance clarity 
and improve context.\156\
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    \156\ These changes also make this language consistent with the 
corresponding language in Sec. Sec.  40.3 and 40.5.
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F. Sec.  40.6--Self-Certification of Rules

1. Amendments to 40.6(a)
    Regulation Sec.  40.6(a) sets forth the submission requirements for 
rule certifications under CEA section 5c(c)(1). The Commission is 
adopting various non-substantive amendments to Sec.  40.6(a) as 
proposed. The non-substantive amendments include: revising the 
introductory text of Sec.  40.6(a), including the header, to better 
reflect the content of the regulation; moving the requirements for 
delisting of products that do not have any open interest from the 
introductory text to a new Sec.  40.6(a)(9); and revising the header 
and ordering of Sec.  40.6(a)(6) to better reflect its purposes.\157\ 
The Commission also is removing references to dormant rules, the 
submission cover sheet, and the Secretary of the Commission, as 
previously discussed, and is correcting the reference to the statutory 
definition of the term ``commodity'' in Sec.  40.6(a)(5) from ``section 
1a(4) of the Act'' to ``section 1a(9) of the Act.''
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    \157\ The Commission also is amending Sec.  40.6(a)(6)(ii) by 
adding the words ``or may be submitted pursuant to Sec.  40.5'' to 
clarify that new rules or rule amendments that establish standards 
for responding to an emergency may be either certified pursuant to 
Sec.  40.6(a) or submitted for Commission approval pursuant to Sec.  
40.5.
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    FIA and ISDA stated that they are generally supportive of all the 
clarifications, enhancements and reorganizations of Sec.  40.6 
regarding the Commission's review and approval of new rules and 
amendments submitted by DCOs.\158\
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    \158\ FIA/ISDA at 1.
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    The Commission proposed to replace the word ``of'' in Sec.  
40.6(a)(7)(v) with the words ``that is complete with respect to'' such 
that this condition, as amended, reads as follows: ``A concise 
explanation and analysis that is complete with respect to the 
operation, purpose, and effect of the proposed rule or rule amendment 
and its compliance with applicable provisions of the Act, including 
core principles, and the Commission's regulations thereunder.''
    As the Commission articulated in 2011, like the explanation and 
analysis required for new product submissions that are self-certified 
under Sec.  40.2, the explanation and analysis of certified rules or 
rule amendments ``should be a clear and informative--but not 
necessarily lengthy--discussion of the submission, the factors leading 
to the adoption of the rule or rule amendment, and the expected impact 
of the rule or rule amendment on the public and market participants.'' 
\159\ Similar to the discussion above in section II.B.3 regarding the 
explanation and analysis that must accompany new contract submissions 
under Sec.  40.2, the Commission has found that some new rule 
submissions, while being concise, have not provided adequate 
information to enable the Commission to complete its analysis of the 
compliance of the rules or rule amendments with

[[Page 88610]]

applicable provisions of the Act, including core principles, and the 
Commission's regulations.\160\ The Commission proposed to add the words 
``that is complete with respect to'' to Sec.  40.6(a)(7)(v) to ensure 
that, although the explanation be concise, it nevertheless must address 
the operation, purpose, and effect of the proposed rule or rule 
amendment and its compliance with applicable provisions of the Act, 
including core principles, and the Commission's regulations.\161\
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    \159\ 2011 Final Rule at 44782-44783.
    \160\ See NPRM at 61440.
    \161\ Id.
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    In response to the proposed amendments to Sec.  40.6(a)(7)(v), A16z 
requested that the Commission provide guidance on how market 
participants can simultaneously satisfy the requirements to be 
``complete'' while also being ``concise''.\162\ Cboe stated that the 
word ``complete'' should not be included, and if it is, Cboe requests 
at a minimum that the Commission clarify that the standard of 
completeness will be applied in a sensible and reasonable manner.\163\ 
Cboe stated that rule certifications should focus on key points, as 
reflected by the inclusion of the word ``concise'' in the current and 
proposed regulatory language which describes the explanation and 
analysis that is required to be included.\164\ Cboe stated that it is 
important that the application of the rule certification provisions 
focuses on requiring a concise description of what is relevant with 
respect to the applicable rule in determining what information should 
be included instead of completeness for the sake of completeness which 
can lead to the inclusion of unneeded and irrelevant information.\165\
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    \162\ A16z at 6.
    \163\ Cboe at 2-3. Cboe suggested the Commission can achieve the 
same outcome of requiring pertinent information to be included in 
rule certification filings by using the word ``of'' instead of the 
phrase ``that is complete with respect to.'' Cboe stated it believes 
that the inclusion of the word ``complete'' can lead to the 
possibility that this standard will be applied in a prescriptive, 
inconsistent, and unreasonable manner (which would in turn undermine 
the utility of the rule certification process for registered 
entities, market participants, and the Commission; delay the ability 
to implement rule enhancements that benefit the market; and inhibit 
innovation and competition). Cboe further stated that the concept of 
completeness is inherently ambiguous and could be applied in a 
rigid, onerous, arbitrary, and/or subjective manner.
    \164\ Cboe at 3.
    \165\ Id.
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    The Commission has considered the comments received in response to 
the proposed amendments to Sec.  40.6(a)(7)(v). The Commission notes 
that prior to a registered entity self-certifying that a rule or rule 
amendment complies with the Act and Commission regulations thereunder, 
the registered entity must complete its diligence on the rule or rule 
amendment to ensure the rule or rule amendment complies with the 
applicable provisions of the Act, including core principles, and the 
Commission's regulations thereunder.\166\ The registered entity relies 
upon its own diligence when it self-certifies that the rule or rule 
amendment complies with applicable provisions of the Act, including 
core principles, and the Commission's regulations thereunder. The 
submitted explanation and analysis is necessary for the Commission's 
review of a rule certification and should allow the Commission to 
understand the operation, purpose, and effect of the rule or rule 
amendment and how the registered entity views the rule or rule 
amendment as compliant with the Act and Commission regulations 
thereunder.
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    \166\ See CEA sections 5, 5b, 5h and 21, and parts 37, 38, 39 
and 49 of the Commission's regulations.
---------------------------------------------------------------------------

    In response to the request that the Commission provide guidance 
regarding how a registered entity would satisfy the ``complete'' 
requirement while also being ``concise,'' the Commission notes that as 
it articulated in the 2011 Final Rule, ``[a] ``concise explanation and 
analysis'' should be a clear and informative--but not necessarily 
lengthy--description of the product or rule and its implications for 
compliance with applicable law.'' \167\ As revised to include 
``complete,'' the Commission continues to believe that the concise 
explanation and analysis required under amended Sec.  40.6(a)(7)(v) 
should be a clear and informative description of the rule and its 
compliance with applicable law and is not necessarily required to be 
lengthy in order to be ``complete.'' The registered entity must include 
explanation and analysis of the operation, purpose, and effect of the 
proposed rule or rule amendment and its compliance with applicable 
provisions of the Act, including core principles, and the Commission's 
regulations thereunder. Cursory or conclusory explanations will not 
suffice.
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    \167\ 2011 Final Rule at 44787.
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    The Commission is thus adding the word ``complete'' to Sec.  
40.6(a)(7)(v) as proposed to confirm that it is essential that the 
registered entity include a concise explanation and analysis of the 
operation, purpose, and effect of the rule or rule amendment and how 
and why the rule or rule amendment complies with the applicable core 
principles and regulations. The term ``complete'' is intended to denote 
the scope of the explanation and analysis. A complete explanation and 
analysis in scope will cover all core principles and the Commission's 
regulations thereunder that are relevant to the specific rule or rule 
amendment. The core principles and regulations that apply to a 
particular rule or rule amendment vary depending on the facts and 
circumstances surrounding the rule or rule amendment.
    As noted in the NPRM, the introductory text to Sec.  40.6(a) 
includes a provision that was intended to enable a registered entity to 
delist, or withdraw a certification of, a product that does not have 
any open interest immediately upon a submission provided that the 
submission complied with the submission and certification requirements 
in Sec.  40.6(a)(1), (2) and (7).\168\ Because the introductory 
provision has not been well understood, the Commission proposed to 
clarify it by moving it and adding an explicit statement into the 
regulatory text. The Commission received no comments on these proposed 
changes and is adopting these changes as proposed. Specifically, new 
Sec.  40.6(a)(9) explicitly states that a new rule or a rule amendment 
that delists, or withdraws the certification of, a product that does 
not have any open interest may become effective immediately upon the 
filing of the submission, provided that the submission is made in 
compliance with Sec.  40.6(a)(1), (2) and (7).
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    \168\ NPRM at 61440 (quoting the 2011 Final Rule at 44783 as 
stating that the Commission, in consideration of comments from both 
CME and OCX, has determined to amend Sec.  40.6(a) to make rules 
delisting or withdrawing the certification of products effective 
upon submission to the Commission. The Commission agrees that such 
submissions should be exempt from the 10-business-day review period 
in order to avoid complicating the delisting of the product by 
providing market participants an opportunity to enter into contracts 
between the time period of submission and the effective date of the 
rule.).
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2. Amendments to Sec.  40.6(b)
    Regulation Sec.  40.6(b) sets forth the Commission's review period 
for a rule certification under Sec.  40.6(a). The regulation provides 
the Commission with a 10-business day review period after which the 
rule is deemed certified, unless the rule is stayed by the Commission 
during the review period. The Commission proposed to amend Sec.  
40.6(b) to provide that any substantive amendment or supplementation of 
the rule submission will be deemed a new submission and restart the 10-
business day review period, unless the amendment or supplementation is 
made for correction of typographical errors,

[[Page 88611]]

renumbering or other non-substantive revisions. Under proposed Sec.  
40.6(b), a substantive amendment or supplementation of a rule 
submission made in response to a Commission request would be deemed a 
new submission.
    CME Group and ICE commented on proposed Sec.  40.6(b) and stated 
that the review period should not be restarted for amendments requested 
by the Commission.\169\ CME Group noted that the ``Commission 
presumably understands the basis for its requested change or changes so 
it should not need an additional . . . 10-day review period . . . to 
review the changes it has asked for.'' \170\ Additionally, ICE 
requested Sec.  40.6(b) be amended to provide for no restarting of the 
review period for amendments or supplemental filings made with the 
consent of Commission Staff.\171\
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    \169\ CME Group at 3-4; ICE at 2-3.
    \170\ CME Group at 4.
    \171\ ICE at 3.
---------------------------------------------------------------------------

    The Commission considered the comments received on the proposed 
amendments to Sec.  40.6(b) and is revising the amendments to Sec.  
40.6(b) to provide that the review period will not be restarted for 
amendments or supplements requested by the Commission. Specifically, as 
revised and adopted, Sec.  40.6(b) will provide that any amendment or 
supplementation made by the registered entity to the submission will be 
treated as the filing of a new submission under this section and be 
subject to the initial 10-business day review period in accordance with 
paragraph (b)(1) of this section, unless the amendment or 
supplementation is requested by the Commission or is made for 
correction of typographical errors, renumbering or other non-
substantive revisions. The Commission notes that it retains the 
authority to stay a certification of a new rule or rule amendment 
submitted pursuant to Sec.  40.6(a) if, among other reasons, the 
certification is accompanied by an inadequate explanation, or is 
potentially inconsistent with the Act or the Commission's regulations 
thereunder.
3. Amendments to Sec.  40.6(c)
    Regulation Sec.  40.6(c), together with sections 5c(c)(2) and (3) 
of the Act, set forth the Commission's procedures for staying a 
submission pursuant to Sec.  40.6(a). The Commission is adding the 
phrase ``and can be implemented'' to Sec.  40.6(c)(3) as proposed in 
order to make clear that upon the expiration of a stay (without 
Commission objection), the registered entity may opt to implement the 
rule at a later time.\172\
---------------------------------------------------------------------------

    \172\ The Commission also is changing the reference in Sec.  
40.6(c)(3) from ``proposed certification'' to ``certification.''
---------------------------------------------------------------------------

    The Commission is amending Sec.  40.6 by adding a new Sec.  
40.6(c)(5) as proposed to address the effect of a Commission objection 
to a rule submitted pursuant to Sec.  40.6(a). The provision is based 
on the similar provision in Sec.  40.5(f) (which is being moved to 
Sec.  40.5(e)). Regulation Sec.  40.6(c)(5)(ii) as amended provides 
that a Commission objection to a rule certification pursuant to Sec.  
40.6(c)(3) is presumptive evidence that the entity may not truthfully 
certify that the same, or substantially the same, rule complies with 
the Act and the Commission's regulations. As adopted, Sec.  
40.6(c)(5)(i) provides that a Commission objection does not, however, 
prevent the registered entity from subsequently submitting a revised or 
supplemented version of the proposed rule or rule amendment for review 
and approval or for certification. The revisions or supplements under 
new Sec.  40.6(c)(5)(i) must provide a substantive basis to treat the 
revised rule differently from the previously submitted rule. The 
Commission received no comments in response to the proposed changes to 
Sec.  40.6(c).
4. Amendments to Sec.  40.6(d)
    Regulation Sec.  40.6(d)(2) sets forth various categories of rules 
that may be implemented by a registered entity without certification, 
provided that the registered entity complies with the weekly 
notification requirements in Sec.  40.6(d)(1). The Commission proposed 
to add the following new categories of rules to Sec.  40.6(d)(2): 
updates to email addresses or other contact information that market 
participants use to submit block trades; amendments to existing trading 
months; with respect to a contract for the purchase or sale of a 
commodity for future delivery or an option on such a contract or an 
option on a commodity (other than a swap), payment or collection of 
commodity options premiums or margins and changes to no cancellation 
ranges; and with respect to a swap, payment or collection of option 
premiums or margins. The Commission believes that these categories are 
not substantive for compliance purposes and to the extent rules are 
addressing these categories, such rules need not be subject to self-
certification and Commission review requirements of Sec.  40.6(a).
    ICE and CME Group stated that they support the amendments proposed 
to Sec.  40.6(d)(2).\173\ Cboe stated that it is unclear regarding what 
is meant by the requirement to submit weekly notifications of rule 
amendments for an amendment to existing trading months in connection 
with proposed Sec.  40.6(d)(2)(ix).\174\ Cboe stated that ``If this 
provision is referencing an amendment to a DCM's or SEF's rule 
provisions regarding its contract listing parameters, Cboe agrees that 
these amendments should be able to be made through a weekly 
notification of rule amendments.'' \175\ In response to Cboe's comment, 
the Commission notes that an amendment to existing trading months in 
connection with Sec.  40.6(d)(2)(ix) (as proposed and as amended) 
includes an addition or removal of contract month listings, provided 
that they are within the exchange's existing listing rule.\176\
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    \173\ CME Group at 3; ICE at 2.
    \174\ Cboe at 3-4.
    \175\ Cboe at 4.
    \176\ For example, if a DCM has a quarterly listing cycle of 
three years for a contract (March, June, September and December), 
the DCM could elect to add the nearest two serial listing months on 
a rolling basis where an additional serial month is listed once a 
preceding serial month expires (e.g. April and May in between March 
and June; then July and August in between June and September). 
However, the DCM could not expand the quarterly listing cycle beyond 
the nearest three years through Sec.  40.6(d)(2)(ix).
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    As discussed above in section II.A.5, the Commission believes that 
registered entities should be able to submit rules or rule amendments 
governing the payment or collection of commodity options premiums or 
margins and option premiums or margins (which are currently within the 
definition of terms and conditions in Sec.  40.1) through weekly 
notices to the Commission pursuant to Sec.  40.6(d)(2)(xiii) as these 
rules or rule amendments are generally operational rather than economic 
in nature and this change will lower the burden for registered entities 
and still provide sufficient notice to the Commission. The Commission 
also believes that registered entities should be able to submit rules 
or rule amendments that change no cancellation ranges or amend existing 
trading months through weekly notices to the Commission pursuant to 
Sec.  40.6(d)(2) as this will lower the burden for registered entities 
to implement such changes and still provide sufficient notice to the 
Commission. The Commission is adopting the amendments to Sec.  
40.6(d)(2) as proposed.
    Regulation Sec.  40.6(d)(3) set forth various categories of rules 
that may be implemented without certification or notice to the 
Commission. The Commission is renumbering Sec.  40.6(d)(3) as Sec.  
40.6(e) and making corresponding

[[Page 88612]]

non-substantive numbering changes to the paragraphs of the 
regulation.\177\ The Commission is amending Sec.  
40.6(d)(3)(ii)(v)(E)(1) (which is redesiganted as Sec.  
40.6(e)(2)(v)(A)) to add the words ``per contract'' so that it reads 
``Are less than $1.00 per contract; or'' to be consistent with the 
corresponding provision in Sec.  40.6(d)(2)(v)(A).
---------------------------------------------------------------------------

    \177\ The Commission believes the current numbering is 
inconsistent with the introductory text of Sec.  40.6(d).
---------------------------------------------------------------------------

    The Commission also requested comment on whether there are other 
categories of rules that should be added to Sec.  40.6(d)(2) or (3). 
ICE requested the Commission also amend Sec.  40.6(d)(2) to allow a DCM 
to promptly implement changes to price and volatility control mechanism 
levels in response to prevailing market conditions through the Sec.  
40.6(d)(2) weekly notice process.\178\ ICE specifically listed the 
following metrics it would like to be able to change through weekly 
notices to promptly address disorderly market conditions or mitigate 
disruptions: maximum order size, reasonability limit levels, price 
bands, circuit breaker trigger levels, and the duration of a market 
pause in periods of heightened market volatility.\179\ Because these 
suggested additions have not been included in a proposal on which the 
public has had the opportunity to provide comment, the Commission 
cannot consider adopting them here, but the Commission may consider 
proposing them in a future rulemaking.
---------------------------------------------------------------------------

    \178\ ICE at 2.
    \179\ Id.
---------------------------------------------------------------------------

    Cboe requested that the Commission clarify that DCMs and SEFs may 
list additional contract listings for a product subsequent to the 
initial contract listings for that product without any rule submission 
to the Commission, provided that the additional contract listings are 
within the parameters of the contract previously established through a 
rule or product submission to the Commission.\180\ Cboe suggested the 
Commission effectuate this change by expanding the scope of new Sec.  
40.6(e)(2)(viii) to include the subsequent listing of trading months 
which are within the currently established cycle of trading 
months.\181\ Because these suggested additions have not been included 
in a proposal on which the public has had the opportunity to provide 
comment, the Commission cannot consider adopting them here, but the 
Commission may consider proposing them in a future rulemaking.
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    \180\ Cboe at 4.
    \181\ Id. The Commission clarifies that it did not propose any 
substantive changes to Sec.  40.6(d)(3)(ii)(H)--which is being 
redesignated as Sec.  40.6(e)(2)(viii).
---------------------------------------------------------------------------

    Eurex Clearing recommended that the Commission expand the 
categories of rules covered by Sec.  40.6(d)(3) to include rules and 
rule changes that are unrelated to the DCO's activities that are 
subject to the Commission's oversight.\182\ This proposed category 
would cover a DCO rule or rule change that: (i) applies to any product 
class for which it provides clearing services that is outside the scope 
of the DCO's order of registration with the Commission; (ii) does not 
affect any product class cleared within the scope of the DCO's order of 
registration with the Commission; and (iii) does not affect the DCO's 
general operations.\183\ Because this suggested addition has not been 
included in a proposal on which the public has had the opportunity to 
provide comment, the Commission cannot consider adopting it here, but 
the Commission may consider proposing it in a future rulemaking.
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    \182\ Eurex at 2-3.
    \183\ Id.
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G. Sec.  40.7--Delegations

1. Amendments to Sec.  40.7
    Regulation Sec.  40.7 sets forth delegations of the Commission's 
authority to take various actions under the provisions of part 40. In 
the NPRM, the Commission proposed to amend Sec.  40.7 to enhance the 
regulation's clarity and utility and to add three new delegations.
    The Commission is amending the text of Sec.  40.7(a)(5) as 
proposed, which delegates the Commission's authority to determine if a 
proposed rule is material under Sec.  40.4(b)(5). The amendments 
streamline and simplify the text of the regulation by eliminating text 
that is not relevant to the delegation and an inconsistent reference to 
Sec.  40.6(d).\184\
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    \184\ Regulation Sec.  40.7(a)(5) provides that if the 
Commission determines that a rule submitted by a DCM pursuant to 
Sec.  40.4(b)(5) is not material, the rule ``may be reported 
pursuant to the provisions of Sec.  40.6(d).'' However, Sec.  
40.4(b)(5) itself provides that if a rule is deemed not material 
pursuant to the regulation, it may be filed pursuant to Sec.  
40.6(a).
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    The Commission is amending Sec.  40.7(b)(3) as proposed by adding 
the words ``or relate to'' to clarify that this delegation includes 
authority to approve rules or rule amendments of a registered entity 
that relate to, but do not establish or amend, speculative limits or 
position accountability provisions.\185\
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    \185\ The delegation is not intended to and does not affect any 
substantive authority including, for example, the Commission's 
authority to bring an enforcement action based on a person's 
violation of a registered entity's position limit rules pursuant to 
CEA section 4a(e).
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    The Commission proposed to delegate under proposed Sec.  
40.7(a)(1)(iv) and (v) the authority in proposed Sec. Sec.  40.3(c)(3) 
and 40.5(c)(3) to extend the applicable review period set forth in 
Sec. Sec.  40.3(c) and 40.5(c), respectively, for the period of time 
agreed to in writing by the registered entity. The Commission did not 
receive any comments on the proposed amendments to Sec. Sec.  
40.3(c)(3) and 40.5(c)(3). The Commission has determined not to adopt 
the two delegations proposed as Sec.  40.7(a)(1)(iv) and (v) at this 
time.
    Finally, as discussed above, the Commission is adopting Sec.  
40.7(e) to delegate the Commission's authority to specify the format 
and manner of filing under these regulations to the Directors of the 
Division of Clearing and Risk and the Division of Market Oversight, as 
proposed. CME Group commented in support of this delegation, noting 
that their DCMs, DCO and SEF collectively submit hundreds of filings 
each calendar year and that they are confident that the heads of the 
Divisions will endeavor to make the filing formats as uniform as 
possible.\186\ Given that technology is used for the Commission to 
receive submissions from the registered entities under these 
regulations and the speed at which technology evolves, the Commission 
believes it is useful for staff to have the ability to specify the 
format and manner of filings under these regulations to facilitate the 
regulations remaining current with technological advances that 
registered entities and the Commission may use in the future.
---------------------------------------------------------------------------

    \186\ CME Group at 3.
---------------------------------------------------------------------------

H. Sec.  40.10--Special Certification Procedures for Submission of 
Rules by SIDCOs

1. Definition of ``Materiality'' in Sec.  40.10
    Regulation Sec.  40.10(a), which implements section 806(e) of the 
Dodd-Frank Act, requires a SIDCO to provide notice to the Commission 
not less than 60 days in advance of any proposed change to its rules, 
procedures, or operations that could ``materially affect the nature or 
level of risks presented'' by the SIDCO. ``Materially affect the nature 
or level of risks presented'' is further defined in Sec.  40.10(b). The 
Commission proposed to revise this definition to provide greater 
specificity regarding the types of changes that would require advance 
notice under Sec.  40.10(a), including, but not limited to, material 
changes to the SIDCO's default management plan or default rules or 
procedures under Sec. Sec.  39.16 or 39.35, program of risk analysis 
and oversight

[[Page 88613]]

required under Sec.  39.18, or recovery and wind down plans required 
under Sec.  39.39; the adoption of a new or materially revised margin 
methodology; the establishment of a cross-margining program or similar 
arrangement with another clearing organization; and material changes to 
its approach to the stress testing required under Sec. Sec.  
39.13(h)(3), 39.36(a), or 39.36(c).
    FIA and ISDA supported the revised definition, noting that the non-
exhaustive list provides useful guidance to SIDCOs as to when proposed 
changes require advance notice.\187\ The Commission did not receive any 
comments opposing the change.
---------------------------------------------------------------------------

    \187\ FIA/ISDA at 1.
---------------------------------------------------------------------------

    The Commission is adopting the amendment to Sec.  40.10(b) as 
proposed. As the Commission noted in the NPRM, the ``may include, but 
are not limited to'' language means that the examples listed in the new 
definition are not exhaustive, and a proposed change that is not 
specifically mentioned nevertheless may be subject to advance notice if 
it meets the standard in Sec.  40.10(a).
    FIA and ISDA also noted that the Commission should provide a public 
comment period under Sec.  40.10 when a SIDCO submits a rule for 
Commission review that the Commission believes raises novel or complex 
issues.\188\ FIA and ISDA noted this would align the Sec.  40.10 
process for SIDCOs with the self-certification process for all 
registered entities in Sec.  40.6. The Commission notes that the 
statutory bases for these processes are different; Sec.  40.6(c) 
codifies the requirement in section 5c(c)(3)(C) of the CEA for public 
comment when the Commission determines to stay a rule certification, 
while Sec.  40.10 codifies section 806(e) of the Dodd-Frank Act, which 
does not provide for public comment. Further, the change that FIA and 
ISDA suggest would be outside the scope of this final rule. The 
Commission notes that even if Commission regulations do not require a 
public comment period, the Commission may still request public comment 
if the Commission determines it is appropriate, as it has done in the 
past.\189\
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    \188\ FIA/ISDA at 1-2.
    \189\ See, e.g., ``CFTC Seeks Public Comment on Proposed Changes 
to Chicago Mercantile Exchange Inc. Rules Regarding Direct Funding 
Participants,'' at https://www.cftc.gov/PressRoom/PressReleases/7661-17.
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2. SIDCO Submission Under Sec.  40.10 of Rules Otherwise Required To Be 
Submitted Under Sec.  40.5
    The Commission is adopting as proposed new Sec.  40.10(i), which 
requires that where any provision of the Commission's regulations 
requires a DCO to file rules for approval under Sec.  40.5, a SIDCO 
would be required instead to file those rules under Sec.  40.10, if the 
rules could materially affect the nature or level of risks presented by 
the SIDCO. Without this change, a requirement for DCOs to file rules 
pursuant to Sec.  40.5 could be misinterpreted as relieving a SIDCO 
from having to file those same rules pursuant to Sec.  40.10, or as 
creating a duplicative requirement for SIDCOs to submit rules under 
both Sec. Sec.  40.5 and 40.10. The Commission did not receive any 
comments on this aspect of the proposal.
3. Technical Corrections to Sec.  40.10
    The Commission proposed to revise the first sentence of Sec.  
40.10(a), which references ``[a] registered [DCO] that has been 
designated by the Financial Stability Oversight Council as a 
systemically important [DCO],'' to refer to the definition of 
``systemically important derivatives clearing organization'' in Sec.  
39.2. The Commission also proposed to revise Sec.  40.10(d) and (h)(3) 
to remove references to ``the purposes of the Dodd-Frank Act'' that are 
no longer necessary. The Commission did not receive any comments on 
these proposed changes. The Commission is adopting these technical 
amendments as proposed.

I. Technical Correction to Authority Section of Part 40

    The Commission is removing as proposed the reference to section 7a 
of the CEA, which was repealed by the Dodd-Frank Act,\190\ from the 
authority section for part 40.
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    \190\ Public Law 111-203, title VII, section 734(a), July 21, 
2010, 124 Stat. 1718 (2010).
---------------------------------------------------------------------------

III. Related Matters

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires agencies to consider 
whether the rules they issue will have a significant economic impact on 
a substantial number of small entities and, if so, provide a regulatory 
flexibility analysis with respect to such impact.\191\ The Commission 
has previously established certain definitions of ``small entities'' to 
be used by the Commission in evaluating the impact of its regulations 
on small entities in accordance with the RFA.\192\ The amendments to 
part 40 set forth herein impact DCMs, DCOs, SEFs and SDRs. The 
Commission has previously determined that DCMs,\193\ DCOs,\194\ 
SEFs,\195\ and SDRs \196\ are not small entities for purposes of the 
RFA. Therefore, the Chairman, on behalf of the Commission, pursuant to 
5 U.S.C. 605(b), hereby certifies that the amended rules will not have 
a significant economic impact on a substantial number of small 
entities.
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    \191\ 5 U.S.C. 601 et seq.
    \192\ Policy Statement and Establishment of ``Small Entities'' 
for purposes of the Regulatory Flexibility Act, 47 FR 18618 (Apr. 
30, 1982).
    \193\ Id. at 18618, 18619.
    \194\ New Regulatory Framework for Clearing Organizations, 66 FR 
45604, 45609 (Aug. 29, 2001).
    \195\ Core Principles and Other Requirements for Swap Execution 
Facilities, 78 FR 33476, 33548 (June 4, 2013).
    \196\ Swap Data Repositories, 75 FR 80898, 80926 (Dec. 23, 
2010).
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B. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (``PRA'') imposes certain 
requirements on Federal agencies, including the Commission, in 
connection with their conducting or sponsoring any ``collection of 
information,'' as defined by the PRA. Under the PRA, 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 PRA is 
intended, in part, to minimize the paperwork burden created for 
individuals, businesses, and other persons as a result of the 
collection of information by Federal agencies, and to ensure the 
greatest possible benefit and utility of information created, 
collected, maintained, used, shared, and disseminated by or for the 
Federal Government. The PRA applies to all information, regardless of 
form or format, whenever the Federal Government is obtaining, causing 
to be obtained, or soliciting information, and includes required 
disclosure to third parties or the public, of facts or opinions, when 
the information collection calls for answers to identical questions 
posed to, or identical reporting or recordkeeping requirements imposed 
on, ten or more persons.
    The final rulemaking modifies an existing collection of information 
previously approved by OMB, for which the Commission has received OMB 
control number 3038-0093, part 40, Provisions Common to Registered 
Entities (OMB Collection 3038-0093) (``part 40 Information 
Collection'').'' \197\ The responses to this collection are mandatory. 
The Commission is revising

[[Page 88614]]

its total burden estimates for this clearance to reflect the final 
rulemaking. The part 40 Information Collection encompasses the 
reporting burdens associated with Sec. Sec.  40.2 and 40.3 (product 
submissions); Sec. Sec.  40.5 and 40.6 (rule submissions); and Sec.  
40.10 (SIDCO submissions).\198\ The Commission received two comments on 
its burden analysis under the PRA in the proposal.\199\ These comments 
and the Commission's response are discussed below.
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    \197\ For the previously approved estimates for OMB Collection 
3038-0093, see ICR Reference No. 202312-3038-001, (conclusion date 
Feb. 9, 2024), available at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202312-3038-001.
    \198\ Id.
    \199\ A16z at 7-8; Coinbase at 8. The A16z comment noted an 
apparent inconsistency between the CBC and PRA analyses in the NPRM, 
in that the PRA recognized a cost associated with the completeness 
requirement for product and rule submissions under part 40, but the 
CBC did not. As discussed in note 74 of the NPRM, the amendments 
clarify the Commission's expectations for the content of 
submissions, which some registered entities had not been meeting in 
their recent filings. See NPRM at 61443 n.74. Although the 
Commission views the amendments as clarifying filing requirements 
rather than new requirements, for practical PRA purposes, the 
amendments will increase some registered entities' reporting burden 
compared to their current inadequate filing practices. However, 
relative to the baseline of what registered entities already should 
be doing, the burden has not changed. The A16z comment regarding the 
relationship between the PRA burden estimate and the CBC cost 
estimate is also addressed in the CBC analysis in section 
III.C.4(c)(ii) and III.C.4(e)(ii) below. Because A16z did not make 
any specific comments about the PRA estimates, but only noted an 
apparent inconsistency with the CBC, the Commission has not made any 
changes to its PRA estimates in response to the A16z comment.
---------------------------------------------------------------------------

Burden Estimates
    The amendments to Sec. Sec.  40.2(a)(3)(v), 40.3(a)(4), 40.5(a)(5), 
and 40.6(a)(7)(v) require registered entities to provide complete 
information.
    For the amendments addressing Sec. Sec.  40.2, 40.3, 40.5, and 
40.6, the Commission is retaining its PRA burden estimates discussed in 
the NPRM. As discussed in the NPRM, the Commission anticipates that 
these amendments are likely to modestly increase the reporting burden 
for registered entities, although some registered entities are already 
providing the information required under the final rule.\200\
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    \200\ Some registered entities have been providing the required 
level of detail in their part 40 filings. They will not experience 
an increased burden as compared to their current practices. For PRA 
purposes however, the Commission's burden estimates are spread 
across all reporting entities covered by part 40.
---------------------------------------------------------------------------

    Accordingly, the Commission estimates the revised information 
collection burdens for the part 40 Information Collection associated 
with the final rule as follows:
Product Submissions (Sec. Sec.  40.2 and 40.3)
    Under Sec. Sec.  40.2 and 40.3 as finalized, product submissions 
will be required include complete information. While this is not 
intended to expand or otherwise alter the scope of the explanation or 
analysis required in the current regulation, the Commission 
conservatively estimates some reporting entities may expend some 
additional time to ensure the completeness of their submissions. The 
number of respondents remains 70. The Commission estimates that the 
amendments to Sec. Sec.  40.2(a)(3)(v) and 40.3(a)(4) may add an 
additional average 1 hour of burden (for a new total of 22 hours). As 
set out in the previously approved part 40 Information Collection, the 
Commission estimates that reporting entities are likely to submit on 
average an aggregate of 848 reports annually.
    One commenter stated that the proposed revision to Sec.  40.2 
``could significantly expand a DCM's regulatory costs for preparing 
certified product filings.'' \201\ Although this commenter did not 
expressly reference the Commission's PRA burden estimates, the 
Commission is addressing this comment here as part of its PRA burden 
analysis. As stated above in section II.B.3 above, the Commission does 
not anticipate that the new requirement for ``complete'' Sec.  40.2 
submissions will constitute a significant expansion in regulatory costs 
because the registered entities, through their due diligence, will have 
already collected the information that they will now provide in their 
Sec.  40.2 filings. Additionally, the new submissions do not 
necessarily need to be lengthy. Thus, the Commission continues to 
estimate an increase of one burden hour per product filing, averaged 
across all filers.
---------------------------------------------------------------------------

    \201\ Coinbase at 8, 11.
---------------------------------------------------------------------------

    Accordingly, the aggregate annual estimate for the reporting burden 
associated with product submissions (Sec. Sec.  40.2 and 40.3), as 
amended by the final rules, is as follows:
    Estimated number of respondents: 70.
    Estimated number of reports per respondent: 12.\202\
---------------------------------------------------------------------------

    \202\ The 3-year average of total responses for Sec. Sec.  40.2 
and 40.3 submissions combined was 848 responses, calculated by 
taking the annual total submissions received under Sec. Sec.  40.2 
and 40.3 combined from all entities and averaging them for the years 
of 2020, 2021 and 2022. The estimated number of reports per 
respondent is calculated as 848 responses divided by 70 respondents 
(848 responses/70 respondents = 12 responses per respondent).
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    Average number of hours per report: 22.\203\
---------------------------------------------------------------------------

    \203\ The aggregate number of hours per report for Sec. Sec.  
40.2 and 40.3 adds 1 hour to the existing burden estimate of 21 
hours, for a total of 22.
---------------------------------------------------------------------------

    Estimated gross annual reporting burden (hours): 18,480.\204\
---------------------------------------------------------------------------

    \204\ The estimated gross annual reporting burden (hours) is 
calculated by multiplying the estimated number of respondents times 
the estimated number of reports per respondent times the average 
number of hours per report (70 respondents x 12 reports per 
respondent x 22 hours per report = 18,480 hours).
---------------------------------------------------------------------------

Rule Submissions (Sec. Sec.  40.5 and 40.6)
    Under Sec.  40.6 as finalized, rule submissions will be required to 
include complete information to enable the Commission to perform its 
analysis of the submissions. While this is not intended to expand or 
otherwise alter the scope of the explanation or analysis required in 
the current regulation, the Commission conservatively estimates some 
reporting entities may expend some additional time to ensure the 
completeness of their submissions. The number of respondents remains 
70. Although the final rulemaking only increases reporting burden for 
Sec.  40.6 submissions,\205\ the Commission averages Sec. Sec.  40.5 
and 40.6 for PRA purposes. Based on an updated review of recent 
submission data from 2020-2022, the Commission estimates that 
respondents submit on average 1,412 reports per year. Further, the 
Commission estimates that each respondent will spend approximately 2.5 
hours to prepare and submit the required reports. Accordingly, the 
aggregate annual estimate for the reporting burden is as follows:
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    \205\ While the amendments require that Sec.  40.5 submissions 
provide an explanation and analysis that is complete with respect to 
the operation, purpose, and effect of the proposed rule or rule 
amendment, Sec.  40.5 submissions are very infrequent (an average of 
5 per year over the past 3 years) and most submissions already 
provide considerable detail. Accordingly, the Commission anticipates 
that the requirement that such submissions be ``complete'' will not 
result in a measurable increase in filing burdens associated with 
Sec.  40.5 submissions.
---------------------------------------------------------------------------

    Estimated number of respondents: 70.\206\
---------------------------------------------------------------------------

    \206\ The estimated number of 70 respondents includes 16 active 
DCMs, 23 registered SEFs, 15 registered DCOs, 5 provisionally 
registered SDRs, plus pending applications for those entities.
---------------------------------------------------------------------------

    Estimated number of reports per respondent: 20.\207\
---------------------------------------------------------------------------

    \207\ As noted above, the amendment increases the burden only 
for Sec.  40.6 filings (and not for Sec.  40.5 filings). However, 
the Commission aggregates Sec. Sec.  40.5 and 40.6 for PRA purposes. 
The 3-year average of total responses for Sec. Sec.  40.5 and 40.6 
submissions combined was 1,412 responses, calculated by taking the 
annual total submissions received under Sec. Sec.  40.5 and 40.6 
combined from all entities and averaging them for the years of 2020, 
2021 and 2022. The estimated number of reports per respondent is 
calculated as 1,412 responses divided by 70 respondents (1,412 
responses/70 respondents = 20 responses per respondent).

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[[Page 88615]]

    Average number of hours per report: 2.5.\208\
---------------------------------------------------------------------------

    \208\ The aggregate number of hours per report for Sec. Sec.  
40.5 and 40.6 adds 0.5 hours to the existing burden of 2 hours per 
report, for a total of 2.5.
---------------------------------------------------------------------------

    Estimated gross annual reporting burden (hours): 3,500.\209\
---------------------------------------------------------------------------

    \209\ The estimated gross annual reporting burden (hours) is 
calculated by multiplying the estimated number of respondents times 
the estimated number of reports per respondent times the average 
number of hours per report (70 respondents x 20 reports per 
respondent x 2.5 hours per report = 3,500 hours).
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SIDCO Submissions (Sec.  40.10)
    The Commission is retaining its existing burden estimates for SIDCO 
submissions under Sec.  40.10 because the burden for SIDCO submissions 
is unaffected by the amendments. Section 40.10(a) requires a SIDCO to 
provide notice to the Commission not less than 60 days in advance of 
any proposed change to its rules, procedures, or operations that could 
``materially affect the nature or level of risks presented'' by the 
SIDCO. The Commission is revising the definition of ``materially affect 
the nature or level of risks presented'' in Sec.  40.10(b), but does 
not anticipate that this clarification will alter submission 
requirements for SIDCO filers, increase the burdens associated with 
such filings, or affect the frequency or number of such filings. 
Accordingly, the Commission is retaining the burden estimates adopted 
under Sec.  40.10, as approved by OMB during the most recent renewal of 
OMB Collection 3038-0093.\210\
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    \210\ See supra n.197. As set out in the NPRM and the PRA 
renewal, the estimated gross annual reporting burden for SIDCO 
submissions under Sec.  40.10 is 100 hours, which is calculated by 
multiplying the estimated number of respondents times the estimated 
number of reports per respondent times the average number of hours 
per report (2 respondents x 1 report per respondent per year x 50 
hours per report = 100 hours per year).
---------------------------------------------------------------------------

    The Commission believes that the other changes to reporting in the 
final rule will not increase the burden on the registered entities, and 
in some cases, may reduce reporting burden. The Commission anticipates 
that the following changes will not result in any increase in reporting 
burden:
    Dormancy (Sec.  40.1). Registered entities are no longer required 
to make submissions to revive dormant rules or products under 
Sec. Sec.  40.2, 40.3, 40.5, or 40.6, other than when required to do so 
in connection with reinstating a dormant registered entity's 
registration or designation. Accordingly, the change does not add any 
burden on registered entities, but may reduce burdens.
    Margin methodology rules (Sec. Sec.  40.1, 40.5, 40.6, 40.10). This 
provision adds ``margin methodology'' to the definition of ``rule'' and 
thus requires the corresponding rule submissions. However, registered 
entities already have been submitting margin-related rule changes under 
the current requirements. The change only clarifies existing filing 
requirements and does not add new reporting burdens.
    Terms and conditions; weekly notification (Sec. Sec.  40.1, 40.2, 
and 40.6(d)(2)). The changes to the definition of ``terms and 
conditions'' remove certain categories of information, such as payments 
and collections of certain margins and premiums that registered 
entities must submit to the Commission as part of their rule 
submissions under Sec.  40.6(a). Instead, the information will be filed 
as rules under the less burdensome weekly notification requirements of 
Sec.  40.6(d)(2). Contact information for block trades and amendments 
to ``no cancellation ranges'' will also be added to the less-burdensome 
weekly notification category under Sec.  40.6(d)(2).
    Cover sheet (Sec. Sec.  40.2, 40.3, 40.5, 40.6 and appendix D). The 
final rulemaking will remove the requirement for filers to submit a 
cover sheet. The Commission's electronic portal now collects the 
required information and generates a cover-sheet automatically, 
allowing the cover-sheet requirement to be removed and reducing burden 
to the registered entities.
    Time period for submitting additional materials for product 
approvals (Sec.  40.3(a)(10)). The final rule will provide Commission 
staff greater flexibility to set deadlines for submission of any 
additional information requested by the Commission for voluntary 
product approval by registered entities. Currently, the regulation 
requires an initial two-business-day limit after the Commission 
requests the information. The greater staff discretion to set more 
flexible deadlines may reduce the need for registered entities to 
submit extension requests, thereby reducing their burden.
    Non-materiality criteria (Sec.  40.4(b)(5)). This provision will 
provide guidance to registered entities about the non-materiality 
determination required for certain products. It will not change the 
submission requirements, but rather help registered entities understand 
Commission requirements for their submissions. The Commission 
anticipates that these clarifications are likely to reduce burden for 
reporting entities by providing more specificity about submission 
requirements.
    Materiality; submission of related rules (Sec.  40.4(b)(5)(ii)). 
The final rulemaking requires that non-materiality submissions include 
a copy of a previously approved rule or rule amendment that is, in 
substance, the same as the subject non-material rule or rule amendment 
that supports non-materiality. This could impose additional research, 
information collection, and filing burdens. However, according to 
Commission data, fewer than one non-materiality submission is made 
annually. Accordingly, the Commission anticipates that this requirement 
is unlikely to impose any material increase in reporting burden for 
covered entities.
    Resubmission (Sec.  40.6(c)(5)(ii)). This provision describes how 
an objection by the Commission to a registered entity's certification 
of a proposed rule or rule amendment would affect any future filings by 
the registered entity of the proposed rule or rule amendment to which 
the Commission objected. Because objections are infrequent, the 
Commission anticipates that the burden of this provision is unlikely to 
result in increased burden for reporting entities.
    Materiality standard (Sec.  40.10(b)). Under the amendments, the 
definition ``materially affect the nature or level of risks presented'' 
for SIDCO rule submissions will be revised to provide more useful 
guidance to registered entities. This change will not affect the 
reporting burden.
    SIDCO submission under Sec.  40.10 of rules otherwise required to 
be submitted under Sec.  40.5. This amendment will clarify filing 
requirements, but will not result in a substantive change to filing 
obligations. The Commission also anticipates that this clarification 
may reduce burden by eliminating mistaken duplicate filings.
    ``Referenced contract'' data element (Appendix D). Submissions for 
new products will include a new structured data element in the online 
portal indicating whether the product is a ``referenced contract.'' 
This information will be the same as the ``reference contract'' 
determination set out in Sec.  150.1 and appendix C to part 150. 
Accordingly, this is a non-substantive revision that will have de 
minimis impact on reporting burden.

C. Cost Benefit Considerations

1. CEA Section 15(a)
    Section 15(a) of the CEA requires the Commission to consider the 
costs and benefits of its actions before issuing regulations under the 
CEA.\211\ By its terms, section 15(a) does not require the Commission 
to quantify the costs and

[[Page 88616]]

benefits of a new rule or to determine whether the benefits of the 
adopted rule outweigh its costs. Rather, section 15(a) requires the 
Commission to ``consider the costs and benefits'' of a subject rule.
---------------------------------------------------------------------------

    \211\ 7 U.S.C. 19(a).
---------------------------------------------------------------------------

    Section 15(a) further specifies that the costs and benefits of the 
Commission's regulations 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. Collectively, these five factors are referred to herein 
as section 15(a) factors and they are addressed below. In conducting 
its analysis, the Commission may, in its discretion, give greater 
weight to any one of the five enumerated areas of concern and may 
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 to accomplish any of the purposes 
of the Act.
    In this release, the Commission is adopting amendments that may 
impose costs. Some of the amendments, however, are format, 
organizational, and non-substantive changes, which will have no costs. 
The Commission has endeavored to assess the expected costs and benefits 
of the amendments in quantitative terms, including PRA related costs, 
where possible. In situations where the Commission is unable to 
quantify the costs and benefits, the Commission identifies and 
considers the costs and benefits of the applicable amendments in 
qualitative terms.
2. Statutory and Regulatory Background
    Part 40 of the Commission's regulations implements section 5c(c) of 
the CEA and requirements and procedures for registered entities, 
including DCMs, DCOs, SEFs, SDRs, and SIDCOs, to submit their rules and 
products to the Commission prior to implementing rules, listing 
products for trading, or accepting products for clearing. Part 40 
generally provides two means for registered entities to submit rules 
and products to the Commission. There is a self-certification process 
and a Commission-approval process.\212\
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    \212\ See Sec. Sec.  40.2 through 40.6.
---------------------------------------------------------------------------

    With two exceptions, the Commission last amended the part 40 
regulations in 2011.\213\ After years of experience with registered 
entities following the processes set forth in the part 40 regulations, 
the Commission is adopting amendments to clarify, simplify, and enhance 
the utility of the part 40 regulations for registered entities and the 
Commission. Changes include amendments to: Sec.  40.1 to simplify the 
determination of whether a registered entity is deemed dormant and to 
remove the terms ``dormant rule'' and ``dormant contract or dormant 
product''; Sec. Sec.  40.2, 40.3, 40.4, 40.5 and 40.6 and appendix D to 
part 40 to reflect the development, evolution and use of the 
Commission's online portal for the filing of rule and product 
submissions; Sec. Sec.  40.2, 40.3, 40.5 and 40.6 to confirm that the 
registered entity must include a complete explanation and analysis when 
submitting its product or rule filing; add a new appendix E to part 40 
to provide guidance regarding criteria the Commission considers as 
evidence that an enumerated agricultural product rule is non-material; 
Sec. Sec.  40.5 and 40.6 to reorganize and enhance the regulations' 
utility; and Sec.  40.7 to delegate certain authorities of the 
Commission to the Director of the Division of Clearing and Risk and the 
Director of the Division of Market Oversight. The Commission also is 
amending Sec.  40.10 to provide meaningful guidance to SIDCOs regarding 
filing instructions for rules that could materially affect the nature 
or level of risks presented by the SIDCO.
---------------------------------------------------------------------------

    \213\ See 2011 Final Rule; Repeal of the Exempt Commercial 
Market and Exempt Board of Trade Exemptions, 80 FR 59575 (October 2, 
2015); and Position Limits for Derivatives, 86 FR 3236 (January 14, 
2021).
---------------------------------------------------------------------------

3. Baseline
    The Commission identified and considered the benefits and costs of 
the proposed amendments relative to a baseline standard of those 
generated by the current statutory and regulatory framework, i.e., the 
status quo. The baseline for the Commission's consideration of the 
costs and benefits of this rulemaking is the existing statutory and 
regulatory framework applicable to DCMs, DCOs, SDRs, and SEFs, in 17 
CFR part 40. Current part 40 provides substantive and procedural 
regulatory requirements for the submission of registered entities' 
self-certifications, and requests for approval, of new products for 
trading and clearing and of new rules and rule amendments. Current part 
40 also establishes guidelines for the Commission's review and 
processing of registered entities' submissions. Current part 40 
regulations explain what information must be made publicly available in 
relation to the application to become a DCM, DCO, SDR, or SEF, and when 
registered entities file submissions for new products, new rules and 
rule amendments. There are also special requirements for certain rules 
submitted by SIDCOs.
    The Commission notes that this cost-benefit consideration is based 
on its understanding that the derivatives market regulated by the 
Commission functions internationally with: (1) transactions that 
involve U.S. entities occurring across different international 
jurisdictions; (2) some entities organized outside of the United States 
that are registered with the Commission; and (3) some entities that 
typically operate both within and outside the United States and that 
follow substantially similar business practices wherever located. Where 
the Commission does not specifically refer to matters of location, the 
discussion of costs and benefits below refers to the effects of the 
regulations on all relevant derivatives activity, whether based on 
their actual occurrence in the United States or on their connection 
with, or effect on U.S. commerce.\214\
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    \214\ See, e.g., 7 U.S.C. 2(i).
---------------------------------------------------------------------------

4. Amendments
a. Amendments to Sec.  40.1 Regarding Dormant Registered Entities, 
Products, Contracts, and Rules
    The Commission is amending its regulations to simplify the 
calculation of how long a registered entity is inactive and when the 
period of inactivity results in a DCM, DCO, SDR or SEF being deemed 
dormant. The amendments to the definitions currently located in Sec.  
40.1(c) through (f) will conform the wording of these sections across 
the different types of registered entities such that any registered 
entity would be considered dormant if it is inactive for a period of 
365 calendar days, provided that a DCM, DCO or SEF will not become 
dormant during the 1,095 calendar days following the entity's initial 
and original order of designation or registration, as applicable. The 
amendments replace the current regulatory text that measures time 
periods in months with language that measures the equivalent time in 
calendar days and the amendments provide for consistent, clear start 
and end dates for measuring inactivity in connection with dormancy 
status.
    In addition, the Commission is removing from Sec.  40.1 the 
definitions and related requirements for the following terms: ``dormant 
contract or dormant product,'' and ``dormant rule,'' respectively. As 
amended, the rules of a dormant DCM, dormant SEF, dormant DCO, or 
dormant SDR will still need to

[[Page 88617]]

be approved and the products will still need to be self-certified or 
approved in connection with the entity being reinstated as a DCM, SEF, 
DCO or SDR, respectively, but a DCM, SEF, DCO or SDR that is not 
dormant will no longer need to certify, or seek approval, of a 
particular rule or product that was already approved or certified 
solely due to a lack of implementation of the rule or inactivity of the 
particular product.
i. Benefits
    The Commission believes that the changes to the part 40 dormancy 
regulations will benefit registered entities by helping registrants 
interpret dormancy period requirements consistently across the relevant 
registration types and more readily identify when dormancy applies. 
Additionally, there is a cost-savings because the removal of the terms 
``dormant contract or dormant product,'' and ``dormant rule'' and the 
associated requirements will remove the administrative and compliance 
burdens of tracking whether a product or rule has become dormant and 
the potential costs of recertifying (or obtaining approval of) a 
dormant contract, product, or rule.\215\ The Commission also believes 
that the amendments to the dormancy regulations are beneficial because 
it is unlikely that the changes will present concerns regarding market 
integrity or safety. As explained above, a registered entity 
implementing a contract, product, or rule has a continuing obligation 
to ensure that the rule complies with the CEA and the Commission's 
regulations thereunder.
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    \215\ See Cboe at 2 (``Additionally, deleting the concepts of a 
dormant product and rule will reduce compliance costs for market 
participants and oversight costs for the Commission.'')
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ii. Costs
    The Commission believes that registered entities will not incur any 
increased costs related to the amendments to the current dormancy 
regulations in part 40. Regarding the potential for a cost related to 
the reduction of market oversight, based on experience with dormant 
products and rules to date, the Commission believes that deleting the 
definitions will result in little, if any, cost to regulatory oversight 
because the Commission has observed that registrants typically manage 
products with no trading activity or inactive rules and the Commission 
is not aware of any market disruptions resulting from the inactivity of 
products or rules.\216\
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    \216\ See Cboe at 2 (stating ``In light of the benefits to be 
derived from eliminating the concepts of a dormant contract or 
product and dormant rule and that doing so will not result in any 
reduction in market integrity or safety, the Commission should 
remove these concepts from Commission regulations.'').
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b. Amendments to the Definitions of Rule and Terms and Conditions in 
Sec.  40.1
    The Commission is amending the definition of the term ``rule'' in 
Sec.  40.1(i) by including ``margin methodology'' in the list of 
specific items that are considered a ``rule,'' thereby making explicit 
what is already understood by current DCOs as implicitly included in 
the definition and codifying the current practice of DCOs submitting 
margin methodologies as rules to the Commission. The Commission also is 
amending the definition of the term ``terms and conditions'' in current 
Sec.  40.1(j) by removing from the list of terms that are considered 
``terms and conditions'' payments or collections of certain premiums or 
margins from current Sec.  40.1(j)(1)(xi) and (j)(2)(xi). The 
Commission is adding the payments or collections of such premiums or 
margins, as well as changes to the no cancellation ranges, to the 
categories of rules that may be submitted without certification in a 
weekly notice filing pursuant to Sec.  40.6(d)(2).
i. Benefits
    The Sec.  40.6(d) process permits a registered entity to implement 
a rule immediately and without self-certification provided that the 
entity files a summary notification within a week of the rule 
amendment. The Commission believes that by adding margin methodology to 
the list of items considered a rule, the Commission is making it clear 
what type of information is considered a rule and codifying a current 
practice. The amendments to the definition of ``terms and conditions'' 
will reduce compliance burdens for registered entities for rule 
amendments that address payments or collections of certain premiums or 
margins and changes to the no cancellation ranges as these could be 
filed through a weekly notification pursuant to Sec.  40.6(d)(2), which 
is a less burdensome, less costly process than through the current 
process of filing under Sec.  40.6(a).
ii. Costs
    The Commission believes that the amendment to the definition of 
``rule'' to state explicitly that ``margin methodology'' is included in 
the definition will make the term consistent with the current DCO 
practice and understanding of implicit requirements and therefore will 
not place any additional cost or burden on registered entities that 
submit rules to the Commission under part 40.
    The Commission does not expect registered entities to incur any 
additional costs or burdens related to the changes to the definition of 
``terms and conditions'' because the amendments reduce the number of 
items of information registered entities must submit to the Commission 
under Sec.  40.6(a).
c. Amendments to Sec. Sec.  40.2 and 40.3 Regarding Instructions for 
Self-Certification and Approval of Products
    The Commission is amending Sec. Sec.  40.2 and 40.3 to update 
Commission processes and filing instructions for registered entities' 
submission of products to the Commission. Amendments to Sec. Sec.  
40.2(a)(1) and 40.3(a)(1) will remove references to the Commission 
Secretary. To reflect the fact that registered entities now file 
submissions through the Commission's portal and a cover sheet is no 
longer necessary, changes to Sec. Sec.  40.2(a)(3) and 40.3(a)(2) 
remove the references to a cover sheet and replace them with a 
requirement directing registered entities to provide the information 
required by appendix D to part 40.
    Changes to Sec.  40.2(a)(3)(v) specify that a registered entity's 
concise explanation and analysis of a product must be complete with 
respect to the product's terms and conditions, the underlying 
commodity, and the product's compliance with the CEA and associated 
regulations. Changes to Sec.  40.3(a)(4) state that a registered 
entity's explanation and analysis of a product must be complete with 
respect to the product's terms and conditions, the underlying 
commodity, and the product's compliance with the CEA and associated 
regulations.
    The amendments to Sec.  40.3(a)(10) eliminate the two-business day 
deadline for registered entities to respond to Commission staff 
requests for additional information with respect to product approval 
requests under Sec.  40.3 and grant Commission staff authority to set 
response deadlines.
    Amendments to Sec.  40.3(c) concern the length of the review 
period. The amendments to Sec.  40.3(c) will permit the Commission to 
extend for an additional 45 days if the submission is incomplete or if 
the registered entity doesn't respond completely to Commission 
questions in a timely manner. The Commission also is amending Sec.  
40.3(c)(5) to provide that if an initial 45-day review period ends on a 
non-business day, such review is extended to the next business day.

[[Page 88618]]

i. Benefits
    The Commission believes the removal of the reference to the 
Secretary in the regulations is beneficial because the deletion 
modernizes the regulation and makes it consistent with current 
practices and technologies. For example, submitting entities no longer 
send submissions to the Commission's Secretary because they upload 
documents to the Commission's portal. The Commission believes that the 
elimination of the cover sheet requirement under Sec. Sec.  40.2 and 
40.3 removes redundancy because the online portal requires registered 
entities to input the same information that is required on the 
coversheet. The amendments to Sec.  40.2(a)(3)(v) should help achieve 
improved regulatory effectiveness of the self-certification processes 
by resulting in all (rather than just some) registered entities 
explaining how and why their products comply with the Act and 
Commission's regulations, thereby enabling the Commission to more 
effectively complete its analysis of compliance and allowing market 
participants to understand the products being listed for trading.\217\ 
The Commission believes that amending Sec.  40.3(a)(10) to eliminate 
the two business day deadline for responding to Commission request for 
additional information and granting Commission staff the authority to 
set a deadline based on the nature of the requested information may 
provide more flexibility to registered entities to respond and better 
enable the Commission to manage its resources and conduct more 
effective oversight over registered entities. The changes to Sec.  
40.3(c)(2) that the Commission may extend the initial 45-day review 
period for up to an additional 45 days if the submission is incomplete 
or if the registered entity doesn't respond completely to Commission 
questions in a timely manner will also encourage registered entities to 
be precise and consult with Commission staff regarding any questions 
when preparing Sec.  40.3 submissions.
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    \217\ In the NPRM, the Commission misplaced the following 
comment in the ``Costs'' section: ``In general, the proposed 
amendments to Sec. Sec.  40.2 and 40.3 will provide greater 
specificity, leaving less room for regulatory ambiguity, improve the 
quality of submissions, and reduce any administrative costs register 
entities might incur when determining what information must be 
submitted to the Commission for a product self-certification or 
product approval request.'' NPRM at 61447-448. The Commission 
recognizes that the location of the sentence in the NPRM's ``Cost'' 
section might have caused confusion and should have been placed in 
the benefits discussion. See a16z at 8 (noting that ``it is not 
clear how this point is a cost of the Proposed Rules. . . .'').
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ii. Costs
    The Commission believes that, relative to the existing Sec. Sec.  
40.2 and 40.3, amending Sec. Sec.  40.2 and 40.3 to expressly 
articulate that registered entities must provide a ``complete'' 
analysis regarding their product submissions will not measurably 
increase compliance costs. As mentioned above, after the Commission 
amended part 40 in 2011, registered entities submitted explanations and 
analyses when self-certifying products that were sufficient, meaning 
that the explanations and analyses demonstrated to the Commission that 
the products complied with the CEA and associated regulations. Over 
time, however, the Commission observed a trend of receiving new product 
certifications that were incomplete. Accordingly, while the Commission 
foresees no cognizable costs relative to the baseline, it does 
acknowledge that, as a practical matter, registered entities that have 
in the past failed to file complete analyses of their products, will 
likely have increased burdens related to preparing complete Sec.  40.2 
self-certification submissions moving forward.\218\ The amendments to 
Sec.  40.3 enabling the Commission to extend the 45-day review period 
as a result of the submission being incomplete or the entity not 
responding completely to Commission questions in a timely manner may 
cause registered entities to incur costs related to the offering of 
products submitted for voluntary Commission approval if the extended 
review period affects product-launch dates.
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    \218\ a16z suggested that the Commission reevaluate its position 
on the costs and benefits associated with the Commission`s 
instruction to registered entities to file ``complete'' analyses, 
after noting an apparent discrepancy in the NPRM between the PRA 
estimates and the cost-benefit discussion of the same amendments. 
a16z at 7-8. The Commission acknowledges tension between the NPRM's 
respective PRA and CBC analyses. To address this, the Commission 
clarifies that while the explicit addition of ``completeness'' to 
Sec. Sec.  40.2 and 40.3 is not intended to expand or otherwise 
alter the scope of the explanation or analysis required in the 
current regulation--therefore not engendering additional costs 
relative to the baseline--as a practical matter, some reporting 
entities now may expend additional time to ensure their submissions' 
compliance. More specifically, registered entities that provided 
incomplete information under the current provision will likely incur 
modest costs of one hour per filing associated with the new 
amendment to ensure their submissions are ``complete'' pursuant to 
Sec. Sec.  40.2 and 40.3, as also set out in the PRA section. For a 
discussion on PRA burden estimates, see section III.B, herein. 
Another commenter, Coinbase, asserts that ``expanded information and 
analysis requirements on registered entities for certified product 
filings will impose significant, unnecessary regulatory costs on 
DCMs. It can be time consuming and costly to prepare lengthy, 
detailed filings. . . .'' Coinbase at 8. As explained in section 
II.B.3. above, the Commission believes that a complete explanation 
is clear and informative, but not necessarily lengthy; and the 
information to be provided leverages due diligence conducted by the 
registered entity prior to certification.
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d. Amendments to Sec.  40.4 and Appendix E to Part 40, Regarding Terms 
or Conditions for Enumerated Agricultural Products
    Regulation Sec.  40.4 requires DCMs to submit a rule or rule 
amendment for Commission approval if the rule or rule amendment affects 
a contract on an enumerated agricultural product and would materially 
change a term or condition of the contract for a delivery month with 
open interest. The Commission is adding appendix E to part 40 to 
provide guidance to DCMs regarding criteria that the Commission 
considers as evidence that an enumerated agricultural product rule 
change is non-material. The Commission also is amending Sec.  
40.4(b)(5)(ii) to provide that when a DCM explains why it considers a 
rule ``non-material'' pursuant to Sec.  40.4(b)(5), the DCM will, if 
applicable, include a copy of a previously approved rule or rule 
amendment that is, in substance, the same as the non-material rule or 
rule amendment.
i. Benefits
    The Commission believes that appendix E to part 40 will aid DCMs in 
determining whether a change to terms and conditions is material. 
Specifically, the guidance offered in appendix E should reduce 
uncertainties and enable DCMs to more efficiently determine whether a 
change is material. Additionally, by directing DCMs to include a copy 
of a previously approved rule or rule amendment with submissions to the 
Commission pursuant to Sec.  40.4(b)(5)(ii), the Commission believes 
this effort will provide market participants with context and 
background that will help them understand the current rule or rule 
amendment and why it is non-material.
ii. Costs
    The Commission anticipates appendix E to part 40 might cause DCMs 
to incur a one-time compliance cost related to understanding Appendix 
E's guidance for assessing whether a rule is material. The Commission 
believes that DCMs will incur costs related to researching and 
collecting previously approved rules or rule amendments for submissions 
to the Commission.

[[Page 88619]]

e. Amendments to Sec. Sec.  40.5, 40.6, and 40.10 Regarding Filing 
Instructions for Rules
    The Commission is updating processes and outlining submission 
procedures for a registered entity to voluntarily submit its rules for 
Commission approval and for a registered entity to self-certify that 
its rules comply with the Act and Commission regulations. Amendments to 
Sec. Sec.  40.5(a)(1) and 40.6(a)(1) remove references to the 
Commission Secretary. Amendments to Sec. Sec.  40.5(a)(2) and 
40.6(a)(7)(i) remove the references to the cover sheet and replace 
these with references to the ``information required by Appendix D'' to 
part 40.
    The amendments to Sec. Sec.  40.5(a)(5) and 40.6(a)(7) describe the 
scope of the explanation and analysis that registered entities must 
submit by adding that the explanation and analysis needs to also be 
``complete'' and explain the rule or rule amendment, its operation, 
purpose and effect and how and why it complies with the Act and the 
Commission's regulations thereunder. The Commission is moving certain 
language from the introductory paragraph of Sec.  40.6(a) to become 
Sec.  40.6(a)(9) and to state more clearly therein that a new rule or a 
rule amendment that delists, or withdraws the certification of, a 
product that does not have any open interest may become effective 
immediately upon the filing of the submission, provided that the 
submission is made in compliance with Sec.  40.6(a)(1), (2) and (7). In 
addition, the amendments in Sec.  40.6(b)(2) provide that if a 
registered entity amends or supplements its initial rule submission 
under Sec.  40.6(a), the Commission will treat the amendment as a new 
submission and restart the Commission's 10-day review period, unless 
the amendments or supplementation is requested by the Commission or is 
for non-substantive revisions.
    The amendments in Sec.  40.6(c)(5) make it clear that if the 
Commission stays and ultimately objects to a rule certification, the 
registered entity may re-submit a revised version or a supplemented 
submission with a substantive basis for treating the revised rule 
differently and that the revised or supplemented submission will be 
reviewed without prejudice. In addition, the objection by the 
Commission will be treated as presumptive evidence that the registered 
entity may not truthfully certify that the same proposed rule or 
substantially the same rule complies with CEA and the Commission's 
regulations.
    The amendments to Sec.  40.6(d)(2) expand the categories of rules 
that may be implemented without a certification to include a number of 
new categories of rules. The new categories include rule amendments 
updating email addresses or contact information that market 
participants use to submit block trades; rules amending existing 
trading months; rules changing the price ranges within which a trade 
will not be cancelled; and rules governing the payment or collection of 
option premiums or margins.\219\ Registered entities may implement 
rules within these categories by notifying the Commission of the rule 
changes on a weekly basis pursuant to Sec.  40.6(d)(2). The amendments 
to Sec.  40.6(d)(2) align with the Commission's removal of a subset of 
the same categories of rules from the definition of ``terms and 
conditions'' in Sec.  40.1.
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    \219\ Regulation Sec.  40.6(d)(2)(xi) will allow registered 
entities to submit rules to allow updates of email addresses and 
contact information that market participants use to submit block 
trades. Regulation Sec.  40.6(d)(2)(xii) will allow registered 
entities to submit rules that make changes to no cancellation ranges 
on contracts for the purchase or sale of a commodity for future 
delivery or an option on such a contract or an option on a commodity 
(other than a swap). Regulation Sec.  40.6(d)(2)(xiii) will allow 
registered entities to submit rules that set or amend the payment or 
collection of commodity options premiums or margins for the purchase 
or sale of a commodity for future delivery or an option on such a 
contract or an option on a commodity (other than a swap). Regulation 
Sec.  40.6(d)(2)(xiii) will allow registered entities to submit 
rules that set or amend the payments or collections of option 
premiums or margins for a swap.
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    For SIDCOs certifying rules that could materially affect the nature 
or level of risks presented by the SIDCO, the Commission is revising 
the definition in Sec.  40.10(b) to specify that changes that require 
advance notice under Sec.  40.10 may include, but are not limited to, 
material changes to the SIDCO's default management plan or default 
rules or procedures under Sec.  39.16 or 39.35, program of risk 
analysis and oversight required under Sec.  39.18, or recovery and wind 
down plans required under Sec.  39.39; the adoption of a new or 
materially revised margin methodology; the establishment of a cross-
margining program or similar arrangement with another clearing 
organization; and material changes to its approach to the stress 
testing required under Sec.  39.13(h)(3), 39.36(a), or 39.36(c). 
Finally, the Commission is amending Sec.  40.10 to expressly state that 
where any provision of the Commission's regulations requires a DCO to 
file rules for approval under Sec.  40.5, a SIDCO will be required 
instead to file those rules under Sec.  40.10, if the rules could 
materially affect the nature or level of risks presented by the SIDCO.
i. Benefits
    The Commission believes the removal of the reference to the 
Secretary modernizes the regulation and makes it consistent with 
current practices and technologies. Submitting entities no longer send 
submissions to the Secretary with a cover sheet because they instead 
file submissions through uploading documents to, and entering 
information into, the Commission's portal. The Commission also believes 
that the elimination of the cover sheet requirement in the text of 
Sec. Sec.  40.5 and 40.6 removes redundancy because the online portal 
requires registered entities to input into the online portal the same 
information that is required on the cover sheet.
    The Commission believes the amendments to Sec.  40.5(a)(5) 
requiring complete submissions and Sec.  40.6(a)(7) stating that a 
registered entity must provide a concise explanation and analysis that 
is complete with respect to the operation, purpose, and effect of a 
certified rule or rule amendment and its compliance with applicable 
provisions of the Act, including core principles, and the Commission's 
regulations thereunder should reinforce the need for registered 
entities' filings to demonstrate such compliance. The amendments to 
Sec.  40.6(a)(7) should help achieve improved regulatory effectiveness 
of the rule self-certification processes by resulting in all (rather 
than just some) registered entities demonstrating how and why their 
rules comply with the Act and Commission's regulations, thereby 
enabling the Commission to more effectively complete its analysis of 
compliance. The amendment to Sec.  40.6(a)(9) will benefit registered 
entities by providing certainty that a registered entity may 
immediately delist, or withdraw a certification of, a product that does 
not have any open interest upon making a Sec.  40.6(a) submission.
    The amendments to Sec.  40.6(b)(2) that provide that the review 
period of a rule restarts under circumstances that are enumerated 
therein should encourage registered entities to be thorough when filing 
their initial submissions. The amendments to Sec.  40.6(c)(5) provide 
clarity regarding the impact of an objection by the Commission to a 
registered entity's certification of a rule or rule amendment on the 
grounds that the rule or rule amendment is inconsistent with the Act or 
the Commission's regulations. Specifically, under the amendment, if a 
registered entity wishes to resubmit through self-

[[Page 88620]]

certification a rule or rule amendment that the Commission objected to 
on the grounds that the proposed rule or rule amendment is inconsistent 
with the Act or the Commission's regulations, the registered entity 
must first substantively change or supplement the proposed rule or rule 
amendment to address the Commission's objection.
    The amendments to Sec.  40.6(d)(2) to add new categories of rules 
that may be implemented through a weekly notification to the Commission 
will enable registered entities to more quickly implement rules that 
fall within these new categories as the registered entity may implement 
these rules immediately and file a weekly notification of any rule 
amendments within a week of making such amendments. The process of 
drafting a weekly notification is less involved than the process of 
submitting rules pursuant to Sec.  40.6(a). Amendments to Sec.  
40.10(b) should aid SIDCOs in making determinations regarding the type 
of rules that must be submitted to the Commission under Sec.  40.10. 
Addition of Sec.  40.10(i) also should eliminate potentially 
duplicative regulatory filings under current Sec.  40.5, and, as a 
result, SIDCOs will benefit from not having to dedicate administrative 
efforts two times for similar submissions.
ii. Costs
    The Commission believes that, relative to the existing Sec. Sec.  
40.5(a) and 40.6(a)(7)(v), amending Sec. Sec.  40.5(a) and 
40.6(a)(7)(v) to expressly articulate that registered entities submit 
``complete'' rule analysis to the Commission concerning proposed rule 
changes will not measurably increase compliance costs.\220\ As 
mentioned above, there are registered entities that have filed 
submissions and met the requirements under the rules in effect prior to 
these amendments. It is unlikely that these registered entities will 
incur costs as a result of the changes to the Sec.  40.6 rule-filing 
instructions. However, some registered entities' Sec.  40.6(a)(7) 
submission have been deficient, lacking a sufficient explanation of 
rule or rule amendment, its operation, purpose and effect or how and 
why it complies with the Act and the Commission's regulations 
thereunder.\221\ Accordingly, while the Commission foresees no 
cognizable costs relative to the baseline, it does acknowledge that, as 
a practical matter, registered entities that previously have filed 
deficient Sec.  40.6(a)(7)(v) submissions will likely incur some costs, 
such as reporting burdens, related to preparing the preparation of 
material with complete information regarding the compliance of rules or 
rule amendments.
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    \220\ As discussed in the Paperwork Reduction Act discussion 
above, Sec.  40.5 submissions are infrequent, and most submitters 
already provide considerable detail about their submissions. 
Consequently, the Commission does not anticipate that the addition 
of the term ``complete'' in Sec.  40.5 will practically impact 
submitters.
    \221\ As explained in the Paperwork Reduction Act discussion, 
above, the Commission acknowledges a tension between the NPRM's 
respective PRA and CBC analyses. To address this, the Commission 
clarifies that while the explicit addition of ``completeness'' to 
Sec.  40.6 (as well as Sec.  40.5) is not intended to expand or 
otherwise alter the scope of the explanation or analysis required in 
the current regulation--therefore not engendering additional costs 
relative to the baseline--as a practical matter some reporting 
entities now may expend additional time to ensure their Sec.  40.6 
submissions' compliance. See a16z at 8 (noting that the NPRM's PRA 
section identified an additional burden but the CBC section did 
not). More specifically, as set out in the PRA analysis in section 
III.B above, registered entities that provided incomplete 
information under the current Sec.  40.6 will likely incur modest 
costs of 0.5 hour per filing.
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    The Commission does not believe that there are costs associated 
with amendments to Sec.  40.5(d). The Commission does not believe that 
there are costs associated with amendments to Sec.  40.6(b)(2) or 
40.6(c)(5). The Commission believes that the changes to Sec.  40.10 
will not place additional costs or burdens on SIDCOs because they 
identify the types of submissions that SIDCOs must file under Sec.  
40.10 and eliminate potential duplication in regulatory filings.
f. Amendments to Sec.  40.7 Regarding Delegation of Authority
    The Commission is amending Sec.  40.7 to enhance the utility and 
clarity of the regulation and add one new delegation. As discussed 
above, the Commission is adding Sec.  40.7(e) to delegate the 
Commission's authority to specify the format and manner of filing under 
these regulations to the Directors of the Division of Clearing and Risk 
and the Division of Market Oversight.
i. Benefits
    The Commission believes that delegating authority to the Divisions 
to specify format and manner of filing in Sec.  40.7(e) enhances 
efficiency.
ii. Costs
    The Commission expects that there will be no costs incurred by 
registered entities by the amendments amending the authorities 
delegated to Commission staff under part 40.
g. Amendments to Appendix D to Part 40
    With the development and use of the Commission's online portal for 
the filing of rule and product submissions, the Commission is amending 
appendix D to part 40 that sets forth instructions to registered 
entities on what information must be submitted together with part 40 
filings. The Commission also is adding a new requirement that DCMs and 
SEFs indicate when listing a new product whether the new product meets 
the definition of ``referenced contract'' as defined in Sec.  150.1 and 
described in appendix C to part 150 that is titled ``Guidance Regarding 
the Definition of Reference Contract.'' \222\
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    \222\ Refer to n.40 for a discussion on Part 150.
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i. Benefits
    The Commission believes that the amendments to appendix D to part 
40 will provide several benefits. First, the changes describe and 
modernize instructions. The text is consistent with the current 
technological practice where registered entities upload product and 
rule submissions using the Commission's online portal. Second, the 
amendment to appendix D to part 40 will require DCMs and SEFs to 
indicate as part of filing the submission whether a new product to be 
listed meets the definition of a referenced contract, thereby alerting 
Commission staff when contracts that may need to be added to the Staff 
Workbook are being listed and enable the Commission to process and 
review the submission more efficiently.
ii. Costs
    The Commission expects that there will be negligible, if any, costs 
incurred by registered entities with respect to the amendments to 
modernize Appendix D as registered entities are already submitting the 
covered rules and products using the portal. With regards to the 
amendment that DCMs and SEFs indicate whether a new product to be 
listed meets the definition of referenced contract, the Commission 
notes that DCMs and SEFs will incur costs to make these indications. 
These costs, however, will be negligible because DCMs and SEFs are 
already making the analytical determinations as to whether contracts 
are referenced contracts to meet their obligations under part 150 of 
the Commission's regulations.
h. Section 15(a) Factors
    In addition to the discussion above, the Commission has evaluated 
the costs and benefits of the amendments to 17 CFR part 40 in light of 
the following five broad areas of market and public concern identified 
in section 15(a) of the CEA: protection of market participants and the 
public; efficiency, competitiveness, and financial integrity of futures 
markets; price discovery;

[[Page 88621]]

sound risk management practices; and other public interest 
considerations.
    Protection of market participants and the public: The Commission 
believes that the changes to Sec. Sec.  40.2, 40.3, 40.5 and 40.6, 
regarding the requirement for complete explanations and analysis for 
product and rule submissions will help protect market participants and 
the public by encouraging registered entities to submit complete and 
informative filings for product and rule changes thereby explaining the 
new product, rule or rule amendment and how and why the new product, 
rule or rule amendment complies with the CEA and the Commission's 
regulations.
    Efficiency, competitiveness, and financial integrity of futures 
markets: The improvements to the regulations providing for ``complete'' 
products and rules submissions better ensure that the Commission can 
provide adequate oversight with minimal disruption to market 
efficiency. The Commission has not identified any effect of the 
regulations on innovation and competition.
    Price discovery: The Commission has not identified any effect of 
the regulations on price discovery.
    Sound risk management practices: The Commission has not identified 
any other effect of the regulations on sound risk management practices.
    Other public interest considerations: The Commission has not 
identified any effect of the regulations on other public interest 
considerations.

D. Antitrust Considerations

    Section 15(b) of the CEA requires the Commission to ``take into 
consideration the public interest to be protected by the antitrust laws 
and endeavor to take the least anticompetitive means of achieving the 
purposes of this Act, in issuing any order or adopting any Commission 
rule or regulation (including any exemption under section 4(c) or 
4c(b)), or in requiring or approving any bylaw, rule, or regulation of 
a contract market or registered futures association established 
pursuant to section 17 of this Act.'' \223\
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    \223\ 7 U.S.C. 19(b).
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    The Commission believes that the public interest to be protected by 
the antitrust laws is generally to protect competition. The Commission 
has considered whether the amendments to part 40 are likely to have 
anticompetitive effects, and if so, whether the amendments reflect the 
least anticompetitive means of achieving the purposes of this Act.\224\ 
In doing so, the Commission considered the comments received addressing 
competition.
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    \224\ CEA Section 3(b).
---------------------------------------------------------------------------

    The Commission received three comment letters that identified 
potential effects on competition in connection with the proposed 
addition of ``complete'' to Sec.  40.2(a)(3)(v) and one of these 
letters identified potential effects on competition in connection with 
the proposed addition of ``complete'' to Sec.  40.6(a)(6)(v).\225\ 
Better Markets stated that part 40 ensures that innovation takes place 
within the boundaries of market integrity, transparency and the 
protection of market participants, and provides a framework for the 
Commission to engage with market participants, assess innovations, and 
make informed decisions that contribute to the overall health and 
competitiveness of the derivatives markets.\226\ Better Markets stated 
that the proposed addition of ``complete'' to Sec.  40.2(a)(3) would 
bolster market integrity, protect the interests of market participants 
and ensure the Commission can effectively and thoroughly evaluate 
compliance.\227\ Coinbase cautioned that adding ``complete'' to Sec.  
40.2(a)(3) as proposed could unnecessarily limit and delay the 
availability of a process to list contracts on its DCM after expending 
the time, effort and diligence to develop the product in the highly 
competitive global derivatives market.\228\ Cboe commented that if the 
proposed addition of the word ``complete'' to Sec. Sec.  40.2(a)(3) and 
40.6(a)(v) were applied in a prescriptive, inconsistent and 
unreasonable manner, it would, among other things, inhibit innovation 
and competition.\229\
---------------------------------------------------------------------------

    \225\ No other amendments proposed in the NPRM elicited comments 
addressing competition.
    \226\ Better Markets at 3.
    \227\ Better Markets at 4.
    \228\ Coinbase at 11.
    \229\ Cboe at 2.
---------------------------------------------------------------------------

    The Commission agrees with Better Markets' view that the proposed 
part 40 amendments--including, importantly, the addition of 
``complete'' to Sec.  40.2(a)(3)--support the overall health and 
competitiveness of derivatives markets. The proposed addition of 
``complete'' should result in a better understanding of the product by 
the Commission and market participants, that in turn should promote 
innovation and competition. Further, the Commission does not construe 
Coinbase's or Cboe's generalized warnings to raise compelling 
anticompetitive concerns; neither comment asserts that, or articulates 
a realistic theory as to how, the addition of ``complete'' to Sec.  
40.2(a)(3)(v) or 40.6(a)(6)(v), would likely be anticompetitive--i.e., 
cause price increases or inhibit innovation--in a properly defined 
relevant antitrust market to any consequential degree.
    Accordingly, the Commission does not anticipate that the amendments 
to part 40 of its regulations would promote or result in anti-
competitive consequences or behavior. Further, even accepting, for 
argument's sake, that the requirement that a DCM or SEF submit a 
concise explanation and analysis that is complete with respect to the 
contract's terms and conditions, the underlying commodity, and the 
product's compliance with applicable provisions of the Act, including 
core principles, and the Commission's regulations could hamper 
innovation to some unspecified degree, the Commission considers this 
requirement minimal, warranted, necessary and the least anticompetitive 
means to realize its critical core interests in market integrity, 
transparency, and protection of market integrity. Similarly, even 
accepting, for argument's sake, that the requirement that a registered 
entity submit a concise explanation and analysis of a rule to be self-
certified that is complete with respect to the operation, purpose, and 
effect of the proposed rule or rule amendment and its compliance with 
applicable provisions of the Act, including core principles, and the 
Commission's regulations could hamper innovation to some unspecified 
degree, the Commission considers this requirement minimal, warranted, 
necessary and the least anticompetitive means to realize its critical 
core interests in market integrity, transparency, and protection of 
market integrity.

List of Subjects

17 CFR Part 37

    Banks, banking, Commodity futures, Reporting and recordkeeping 
requirements, Swaps.

17 CFR Part 38

    Commodity futures, Reporting and recordkeeping requirements.

17 CFR Part 40

    Commodity futures, Reporting and recordkeeping requirements.

    For the reasons stated in the preamble, the Commodity Futures 
Trading Commission amends 17 CFR chapter I as follows:

PART 37--SWAP EXECUTION FACILITIES

0
1. The authority citation for part 37 continues to read as follows:


[[Page 88622]]


    Authority:  7 U.S.C. 1a, 2, 5, 6, 6c, 7, 7a-2, 7b-3, and 12a, as 
amended by Titles VII and VIII of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376.

0
2. Amend appendix B by revising the first sentence of paragraph (a)(1) 
under ``Core Principle 8 of Section 5h of the Act--Emergency 
Authority'' to read as follows:

Appendix B to Part 37--Guidance on, and Acceptable Practices in, 
Compliance With Core Principles

* * * * *

Core Principle 8 of Section 5h of the Act--Emergency Authority

* * * * *
    (a) * * *
    (1) A swap execution facility should have rules that authorize 
it to take certain actions in the event of an emergency, as defined 
in Sec.  40.1 of this chapter. * * *
* * * * *

PART 38--DESIGNATED CONTRACT MARKETS

0
3. The authority citation for part 38 continues to read as follows:

    Authority:  7 U.S.C. 1a, 2, 6, 6a, 6c, 6d, 6e, 6f, 6g, 6i, 6j, 
6k, 6l, 6m, 6n, 7, 7a-2, 7b, 7b-1, 7b-3, 8, 9, 15, and 21, as 
amended by the Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Pub. L. 111-203, 124 Stat. 1376.


0
4. Amend appendix B by revising the third sentence of paragraph (C)(a) 
under ``Core Principle 6 of Section 5(d) of the Act'' to read as 
follows:

Appendix B to Part 38--Guidance on, and Acceptable Practices in, 
Compliance With Core Principles

* * * * *
    Core Principle 6 of Section 5(d) of the Act: * * *
* * * * *
    (C) * * *
    (a) * * * To address perceived market threats, the designated 
contract market should have rules that allow it to take certain 
actions in the event of an emergency, as defined in Sec.  40.1 of 
this chapter, including: imposing or modifying position limits, 
price limits, and intraday market restrictions; imposing special 
margin requirements; ordering the liquidation or transfer of open 
positions in any contract; ordering the fixing of a settlement 
price; extending or shortening the expiration date or the trading 
hours; suspending or curtailing trading in any contract; 
transferring customer contracts and the margin or altering any 
contract's settlement terms or conditions; and, where applicable, 
providing for the carrying out of such actions through its 
agreements with its third-party provider of clearing or regulatory 
services. * * *
* * * * *

PART 40--PROVISIONS COMMON TO REGISTERED ENTITIES

0
5. The authority citation for part 40 is revised to read as follows:

    Authority:  7 U.S.C. 1a, 2, 5, 6, 7, 8 and 12, as amended by 
Titles VII and VIII of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act, Public Pub. L. 111-203, 124 Stat. 1376 
(2010).


0
5. Revise Sec.  40.1 to read as follows:


Sec.  40.1  Definitions.

    As used in this part:
    Business day means the intraday period of time starting at 8:15 
a.m. and ending at 4:45 p.m. Eastern Standard Time or Eastern Daylight 
Savings Time, whichever is currently in effect in Washington, DC, on 
all days except Saturdays, Sundays, and Federal holidays in Washington, 
DC.
    Dormant designated contract market means any designated contract 
market on which no trading has occurred for a period of 365 days; 
provided, however, no designated contract market shall be considered 
dormant if its initial and original Commission order of designation was 
issued within the preceding 1,095 days.
    Dormant derivatives clearing organization means any derivatives 
clearing organization registered pursuant to section 5b of the Act that 
has not accepted for clearing any agreement, contract or transaction 
that is required or permitted to be cleared by a derivatives clearing 
organization under sections 5b(a) and 5b(b) of the Act, respectively, 
for a period of 365 days; provided, however, no derivatives clearing 
organization shall be considered dormant if its initial and original 
Commission order of registration was issued within the preceding 1,095 
days.
    Dormant swap data repository means any registered swap data 
repository on which no data has resided for a period of 365 days.
    Dormant swap execution facility means any swap execution facility 
on which no trading has occurred for a period of 365 days; provided, 
however, no swap execution facility shall be considered dormant if its 
initial and original Commission order of registration was issued within 
the preceding 1,095 days.
    Emergency means any occurrence or circumstance that, in the opinion 
of the governing board of a registered entity, or a person or persons 
duly authorized to issue such an opinion on behalf of the governing 
board of a registered entity under circumstances and pursuant to 
procedures that are specified by rule, requires immediate action and 
threatens or may threaten such things as the fair and orderly trading 
in, or the liquidation of or delivery pursuant to, any agreements, 
contracts, swaps or transactions or the timely collection and payment 
of funds in connection with clearing and settlement by a derivatives 
clearing organization, including:
    (1) Any manipulative or attempted manipulative activity;
    (2) Any actual, attempted, or threatened corner, squeeze, 
congestion, or undue concentration of positions;
    (3) Any circumstances which may materially affect the performance 
of agreements, contracts, swaps or transactions, including failure of 
the payment system or the bankruptcy or insolvency of any participant;
    (4) Any action taken by any governmental body, or any other 
registered entity, board of trade, market or facility which may have a 
direct impact on trading or clearing and settlement; and
    (5) Any other circumstance which may have a severe, adverse effect 
upon the functioning of a registered entity.
    Rule means any constitutional provision, article of incorporation, 
bylaw, rule, regulation, resolution, interpretation, stated policy, 
advisory, terms and conditions, trading protocol, margin methodology, 
agreement or instrument corresponding thereto, including those that 
authorize a response or establish standards for responding to a 
specific emergency, and any amendment or addition thereto or repeal 
thereof, made or issued by a registered entity or by the governing 
board thereof or any committee thereof, in whatever form adopted.
    Terms and conditions means any definition of the trading unit or 
the specific commodity underlying a contract for the future delivery of 
a commodity or commodity option contract, description of the payments 
to be exchanged under a swap, specification of cash settlement or 
delivery standards and procedures, and establishment of buyers' and 
sellers' rights and obligations under the swap or contract. Terms and 
conditions include provisions relating to the following:
    (1) For a contract for the purchase or sale of a commodity for 
future delivery or an option on such a contract or an option on a 
commodity (other than a swap):
    (i) Quality and other standards that define the commodity or 
instrument underlying the contract;
    (ii) Quantity standards or other provisions related to contract 
size;
    (iii) Any applicable premiums or discounts for delivery of nonpar 
products;

[[Page 88623]]

    (iv) Trading hours, trading months and the listing of contracts;
    (v) The pricing basis, minimum price fluctuations, and maximum 
price fluctuations;
    (vi) Any price limits, no cancellation ranges, trading halts, or 
circuit breaker provisions, and procedures for the establishment of 
daily settlement prices;
    (vii) Speculative position limits, position accountability 
standards, and position reporting requirements, including an indication 
as to whether the contract meets the definition of a referenced 
contract as defined in Sec.  150.1 of this chapter, and if so, the name 
of either the core referenced futures contract or other referenced 
contract upon which the new referenced contract submitted under this 
part is based.
    (viii) Delivery points and locational price differentials;
    (ix) Delivery standards and procedures, including fees related to 
delivery or the delivery process; alternatives to delivery and 
applicable penalties or sanctions for failure to perform;
    (x) If cash settled; the definition, composition, calculation and 
revision of the cash settlement price or index;
    (xi) [Reserved];
    (xii) Option exercise price, if it is constant, and method for 
calculating the exercise price, if it is variable;
    (xiii) Threshold prices for an option contract, the existence of 
which is contingent upon those prices; and
    (xiv) Any restrictions or requirements for exercising an option; 
and
    (2) For a swap:
    (i) Identification of the major group, category, type or class in 
which the swap falls (such as an interest rate, commodity, credit or 
equity swap) and of any further sub-group, category, type or class that 
further describes the swap;
    (ii) Notional amounts, quantity standards, or other unit size 
characteristics;
    (iii) Any applicable premiums or discounts for delivery of nonpar 
products;
    (iv) Trading hours and the listing of swaps;
    (v) Pricing basis for establishing the payment obligations under, 
and mark-to-market value of, the swap including, as applicable, the 
accrual start dates, termination or maturity dates, and, for each leg 
of the swap, the initial cash flow components, spreads, and points, and 
the relevant indexes, prices, rates, coupons, or other price reference 
measures;
    (vi) Any price limits, trading halts, or circuit breaker 
provisions, and procedures for the establishment of daily settlement 
prices;
    (vii) Speculative position limits, position accountability 
standards, and position reporting requirements, including an indication 
as to whether the contract meets the definition of economically 
equivalent swap as defined in Sec.  150.1 of this chapter, and, if so, 
the name of either the core referenced futures contract or referenced 
contract, as applicable, to which the swap submitted under this part is 
economically equivalent.
    (viii) Payment and reset frequency, day count conventions, business 
calendars, and accrual features;
    (ix) If physical delivery applies, delivery standards and 
procedures, including fees related to delivery or the delivery process, 
alternatives to delivery and applicable penalties or sanctions for 
failure to perform;
    (x) If cash settled, the definition, composition, calculation and 
revision of the cash settlement price, and the settlement currency;
    (xi) [Reserved]
    (xii) Option exercise price, if it is constant, and method for 
calculating the exercise price, if it is variable;
    (xiii) Threshold prices for an option, the existence of which is 
contingent upon those prices;
    (xiv) Any restrictions or requirements for exercising an option; 
and
    (xv) Life cycle events.
    6. Amend Sec.  40.2 by revising paragraphs (a) introductory text, 
(a)(1), (a)(3)(i), (ii), (v), and (vi), and (d) to read as follows:


Sec.  40.2  Listing products for trading by certification.

    (a) A designated contract market or a swap execution facility must 
comply with the submission requirements of this section prior to 
listing a product for trading that has not been approved under Sec.  
40.3. A submission shall comply with the following conditions:
    (1) The designated contract market or the swap execution facility 
has filed its submission electronically in a format and manner 
specified by the Commission;
* * * * *
    (3) * * *
    (i) The information required by appendix D to this part;
    (ii) A copy of the rules that set forth the contract's terms and 
conditions;
* * * * *
    (v) A concise explanation and analysis that is complete with 
respect to the product's terms and conditions, the underlying 
commodity, and the product's compliance with applicable provisions of 
the Act, including core principles, and the Commission's regulations 
thereunder. This explanation and analysis shall either be accompanied 
by the documentation relied upon to establish the basis for compliance 
with applicable law, or incorporate information contained in such 
documentation, with appropriate citations to data sources;
    (vi) A certification that the registered entity posted a notice of 
a pending product certification with the Commission and a copy of the 
submission, concurrent with the filing of a submission with the 
Commission, on the registered entity's website. Information that the 
registered entity seeks to keep confidential may be redacted from the 
documents published on the registered entity's website but must be 
republished consistent with any determination made pursuant to Sec.  
40.8(c)(4); and
* * * * *
    (d) Class certification of swaps. (1) A designated contract market 
or swap execution facility may list or facilitate trading in any swap 
or number of swaps based upon an ``excluded commodity,'' as defined in 
section 1a(19)(i) of the Act, not including any security, security 
index, and currency other than the United States Dollar and a ``major 
foreign currency,'' as defined in Sec.  15.03(a) of this chapter, or an 
``excluded commodity,'' as defined in section 1a(19)(ii)-(iv) of the 
Act, provided the designated contract market or swap execution facility 
certifies, under paragraphs (a)(1) and (2) and (a)(3)(i), (iv), and 
(vi) of this section, the following:
    (i) Each particular swap within the certified class of swaps is 
based upon an excluded commodity specified in paragraph (d)(1) of this 
section;
    (ii) Each particular swap within the certified class of swaps is 
based upon an excluded commodity with an identical pricing source, 
formula, procedure, and methodology for calculating reference prices 
and payment obligations;
    (iii) The pricing source, formula, procedure, and methodology for 
calculating reference prices and payment obligations in each particular 
swap within the certified class of swaps is identical to a pricing 
source, formula, procedure, and methodology for calculating reference 
prices and payment obligations in a product previously submitted to the 
Commission and certified or approved pursuant to this section or Sec.  
40.3; and
    (iv) Each particular swap within the certified class of swaps is 
based upon an excluded commodity involving an identical currency or 
identical currencies.
    (2) The Commission may in its discretion require a registered 
entity to

[[Page 88624]]

withdraw its certification under paragraph (d)(1) of this section and 
to submit each individual swap or certain individual swaps within the 
submission for Commission review pursuant to this section or Sec.  
40.3.

0
7. Amend Sec.  40.3 by:
0
a. Revising paragraphs (a) introductory text, (a)(1), (2), (4), (9), 
and (10), (c), and (d);
0
b. Removing paragraph (e);
0
c. Redesignating paragraph (f) as paragraph (e); and
0
d. Revising newly redesignated paragraph (e).
    The revisions read as follows:


Sec.  40.3  Voluntary submission of new products for Commission review 
and approval.

    (a) Request for approval. Pursuant to section 5c(c) of the Act, a 
designated contract market, a swap execution facility, or a derivatives 
clearing organization may request that the Commission approve a new 
product prior to listing the product for trading or accepting the 
product for clearing, or if a product was initially submitted under 
Sec.  40.2 or Sec.  39.5 of this chapter, subsequent to listing the 
product for trading or accepting the product for clearing. A submission 
requesting approval shall:
    (1) Be filed electronically in a format and manner specified by the 
Commission;
    (2) Include the information required by appendix D to this part;
* * * * *
    (4) Include an explanation and analysis that is complete with 
respect to the product's terms and conditions, the underlying 
commodity, and the product's compliance with applicable provisions of 
the Act, including core principles, and the Commission's regulations 
thereunder. This explanation and analysis shall either be accompanied 
by the documentation relied upon to establish the basis for compliance 
with the applicable law, or incorporate information contained in such 
documentation, with appropriate citations to data sources;
* * * * *
    (9) Certify that the registered entity posted a notice of its 
request for Commission approval of the new product and a copy of the 
submission, concurrent with the filing of a submission with the 
Commission, on the registered entity's website. Information the 
registered entity seeks to keep confidential may be redacted from the 
documents published on the registered entity's website but must be 
republished consistent with any determination made pursuant to Sec.  
40.8(c)(4); and
    (10) Include, if requested by Commission staff, additional 
evidence, information or data demonstrating that the contract meets, 
initially or on a continuing basis, the requirements of the Act, or 
other requirement for designation or registration under the Act, or the 
Commission's regulations or policies thereunder. The registered entity 
shall submit the requested information by the time specified by 
Commission staff, or at the conclusion of any extended period agreed to 
by Commission staff after timely receipt of a written request from the 
registered entity.
* * * * *
    (c) Commission review. (1) All products submitted for Commission 
approval pursuant to, and in compliance with the submission 
requirements of, paragraph (a) of this section shall be subject to 
review by the Commission for a period of 45 days after receipt by the 
Commission.
    (2) The Commission may extend the initial 45-day review period for 
up to an additional 45 days if the product raises novel or complex 
issues that require additional time to analyze, the submission is 
incomplete or the requestor does not respond completely to Commission 
questions in a timely manner, in which case the Commission shall notify 
the submitting registered entity within the initial 45-day review 
period and shall briefly describe the nature of the specific issues for 
which additional time for review shall be required.
    (3) At any time during its review of a proposed product under this 
section, the Commission may extend the review period for any period of 
time to which the registered entity agrees in writing.
    (4) Any amendment or supplementation made by the registered entity 
to the submission will be treated as the filing of a new submission 
under this section and be subject to the initial 45-day review period 
in accordance with paragraph (c)(1) of this section, unless the 
amendment or supplementation is requested by the Commission or is made 
for correction of typographical errors, renumbering or other non-
substantive revisions.
    (5) If the review period described in paragraph (c)(1) of this 
section would end on a day that is not a business day, such review 
period shall instead be extended to end on the next business day.
    (d) Commission Determination--(1) Approval. Any product submitted 
for Commission approval in compliance with paragraph (a) of this 
section shall be deemed approved by the Commission under section 5c(c) 
of the Act at the conclusion of the applicable review period under 
paragraph (c) of this section, unless the Commission issues a notice of 
non-approval to the registered entity under paragraph (d)(2) of this 
section within the applicable review period.
    (2) Notice of non-approval. Any time during its review under this 
section, the Commission may notify the registered entity that it will 
not, or is unable to, approve the new product. This notification will 
briefly specify the nature of the issues raised and the specific 
provision of the Act or the Commission's regulations, including the 
form or content requirements of this section, with which the new 
product is inconsistent or appears to be inconsistent with the Act or 
the Commission's regulations.
    (e) Effect of non-approval. (1) Notification to a registered entity 
under paragraph (d)(2) of this section of the Commission's 
determination not to approve a product does not prevent the entity from 
subsequently submitting a revised version of the product for Commission 
approval, or from submitting the product as initially proposed, in a 
supplemented submission; the revised or supplemented submission will be 
reviewed without prejudice.
    (2) Notification to a registered entity under paragraph (d)(2) of 
this section of the Commission's determination not to approve a product 
shall be presumptive evidence that the entity may not truthfully 
certify under Sec.  40.2 that the same, or substantially the same, 
product complies with the Act and the Commission's regulations 
thereunder.

0
8. Revise Sec.  40.4 to read as follows:


Sec.  40.4  Amendments to terms or conditions of enumerated 
agricultural products.

    (a) Notwithstanding the provisions of this part, a designated 
contract market must submit for Commission approval under the 
procedures of Sec.  40.5, prior to its implementation, any rule that, 
for a delivery month having open interest, would materially change a 
product's term or condition, as defined in Sec.  40.1, of a contract 
for future delivery in an agricultural commodity enumerated in section 
1a(9) of the Act, or of an option on such a contract or commodity.
    (b) The following rules or rule amendments are not material and are 
not required by this section to be submitted for Commission approval 
under the procedures of Sec.  40.5:
    (1) Rules or rule amendments that are enumerated in Sec.  
40.6(d)(2) may be

[[Page 88625]]

implemented without prior approval or certification, provided that they 
are implemented pursuant to the notification procedures of Sec.  
40.6(d);
    (2) Rules or rule amendments that are enumerated in Sec.  
40.6(e)(2) may be implemented without prior approval or certification 
or notification as permitted pursuant to Sec.  40.6(e);
    (3) Rules or rule amendments governing trading hours may be 
implemented without prior approval, provided that they are implemented 
pursuant to the procedures of sect; 40.6(a);
    (4) Rules or rule amendments that are required to comply with a 
binding order of a court of competent jurisdiction, or a rule, 
regulation or order of the Commission or of another Federal regulatory 
authority, may be implemented without prior approval, provided that 
they are implemented pursuant to the procedures of Sec.  40.6(a); or
    (5) Any rule or rule amendment:
    (i) The text of which has been submitted pursuant to the procedures 
of paragraph (b)(5) of this section and Sec.  40.6(a) at least ten 
business days prior to its implementation and that has been labeled 
``Non-Material Agricultural Rule Change;''
    (ii) For which the designated contract market has provided an 
explanation as to why it considers the rule ``non-material,'' and any 
other information that may be beneficial to the Commission in analyzing 
the merits of the entity's claim of non-materiality including, if 
applicable, a copy of a previously approved rule or rule amendment that 
is, in substance, the same as the non-material rule or rule amendment; 
and
    (iii) With respect to which the Commission has not notified the 
contract market during the review period that the rule appears to 
require or does require prior approval under this section.

0
9. Amend Sec.  40.5 by:
0
a. Revising paragraphs (a) introductory text, (a)(1), (2), (5), (6), 
and (9), and (c)(1);
0
b. Removing paragraph (c)(2);
0
c. Redesignating paragraph (d)(1) as paragraph (c)(2);
0
d. Revising newly redesignated paragraph (c)(2);
0
e. Redesignating paragraph (d)(2) as paragraph (c)(3);
0
f. Revising newly redesignated paragraph (c)(3);
0
g. Adding paragraphs (c)(4) through (6);
0
h. Revising paragraphs (d) introductory text and (d)(1);
0
i. Redesignating paragraph (g) as paragraph (d)(2);
0
j. Revising newly redesignated paragraph (d)(2);
0
k. Redesignating paragraph (e) as paragraph (d)(3);
0
l. Revising newly redesignated paragraph (d)(3);
0
m. Redesignating paragraphs (f)(1) and (2) as paragraphs (e)(1) and (2) 
respectively; and
0
n. Revising newly redesignated paragraphs (e)(1) and (2).
    The revisions and additions read as follows:


Sec.  40.5  Voluntary submission of rules for Commission review and 
approval.

    (a) Request for approval of rules. Pursuant to section 5c(c) of the 
Act, a registered entity may request that the Commission approve a new 
rule or rule amendment prior to implementation of the rule, or if the 
rule or rule amendment was initially submitted under Sec.  40.2 or 
40.6, subsequent to implementation of the rule. A request for approval 
shall:
    (1) Be filed electronically in a format and manner specified by the 
Commission;
    (2) Include the information required by appendix D to this part;
* * * * *
    (5) Provide an explanation and analysis that is complete with 
respect to the operation, purpose, and effect of the proposed rule or 
rule amendment and its compliance with applicable provisions of the 
Act, including core principles, and the Commission's regulations 
thereunder, including, as applicable, a description of the anticipated 
benefits to market participants or others, any potential 
anticompetitive effects on market participants or others, and how the 
rule fits into the registered entity's framework of self-regulation;
    (6) Certify that the registered entity posted a notice of its 
request for Commission approval of the new rule or rule amendment and a 
copy of the submission, concurrent with the filing of a submission with 
the Commission, on the registered entity's website. Information the 
registered entity seeks to keep confidential may be redacted from the 
documents published on the registered entity's website but must be 
republished consistent with any determination made pursuant to Sec.  
40.8(c)(4);
* * * * *
    (9) Identify any Commission regulation that the Commission may need 
to amend, or sections of the Act or the Commission's regulations that 
the Commission may need to interpret, in order to approve the new rule 
or rule amendment. To the extent that such an amendment or 
interpretation is necessary to accommodate a new rule or rule 
amendment, the submission should include a reasoned analysis supporting 
the amendment to the Commission's regulation or the interpretation; and
* * * * *
    (c) * * *
    (1) Any rule submitted for Commission approval pursuant to, and in 
compliance with the submission requirements of, paragraph (a) of this 
section shall be subject to review by the Commission for a period of 45 
days after receipt by the Commission.
    (2) The Commission may extend the initial 45-day review period for 
up to an additional 45 days if the proposed rule raises novel or 
complex issues that require additional time for review or is of major 
economic significance, the submission is incomplete or the requestor 
does not respond completely to Commission questions in a timely manner, 
in which case the Commission shall notify the submitting registered 
entity within the initial 45-day review period and shall briefly 
describe the nature of the specific issues for which additional time 
for review shall be required.
    (3) At any time during its review of a proposed rule under this 
section, the Commission may extend the review period for any period of 
time to which the registered entity agrees in writing.
    (4) Any amendment or supplementation made by the registered entity 
to the submission will be treated as the filing of a new submission 
under this section and be subject to the initial 45-day review period 
in accordance with paragraph (c)(1) of this section, unless the 
amendment or supplementation is requested by the Commission or is made 
for correction of typographical errors, renumbering or other non-
substantive revisions.
    (5) If a rule or rule amendment that is submitted for Commission 
approval under paragraph (a) of this section is also submitted and 
labeled as a ``Non-Material Agricultural Rule Change'' in accordance 
with Sec.  40.4(b)(5), the Commission shall commence the 45-day review 
period in paragraph (c)(1) of this section ten business days after 
receiving the submission.
    (6) If the review period described in paragraph (c)(1) of this 
section would end on a day that is not a business day, such review 
period shall instead be extended to end on the next business day.
    (d) Commission determination--(1) Approval. Any rule submitted for

[[Page 88626]]

Commission approval in compliance with paragraph (a) of this section 
shall be deemed approved by the Commission under section 5c(c) of the 
Act at the conclusion of the applicable review period under paragraph 
(c) of this section, unless the Commission issues a notice of non-
approval to the registered entity under paragraph (d)(3) of this 
section within the applicable review period.
    (2) Expedited approval. Notwithstanding the provisions of paragraph 
(c) of this section, a proposed rule or rule amendment, including 
changes to terms and conditions of a product that are consistent with 
the Act and Commission regulations, may be approved by the Commission 
at such time and under such conditions as the Commission shall specify 
in a written notification.
    (3) Notice of non-approval. Any time during its review under this 
section, the Commission may notify the registered entity that it will 
not, or is unable to, approve the new rule or rule amendment. This 
notification will briefly specify the nature of the issues raised and 
the specific provision of the Act or the Commission's regulations, 
including the form or content requirements of this section, with which 
the new rule or rule amendment is inconsistent or appears to be 
inconsistent with the Act or the Commission's regulations.
    (e) Effect of non-approval. (1) Notification to a registered entity 
under paragraph (d)(3) of this section of the Commission's 
determination not to approve a new rule or rule amendment does not 
prevent the registered entity from subsequently submitting a revised 
version of the proposed rule or rule amendment for Commission review 
and approval, or from submitting the new rule or rule amendment as 
initially proposed, in a supplemented submission; the revised or 
supplemented submission will be reviewed without prejudice.
    (2) Notification to a registered entity under paragraph (d)(3) of 
this section of the Commission's determination not to approve a 
proposed rule or rule amendment of a registered entity shall be 
presumptive evidence that the entity may not truthfully certify under 
Sec.  40.6 that the same, or substantially the same, proposed rule or 
rule amendment complies with the Act and 17 CFR chapter I.

0
10. Amend Sec.  40.6 by:
0
a. Revising paragraphs (a) introductory text and (a)(1), (2), and (5) 
through (8);
0
b. Adding paragraph (a)(9);
0
c. Revising paragraph (b);
0
d. Revising paragraphs (c)(2) and (3);
0
e. Adding paragraph (c)(5);
0
f. Revising paragraphs (d)(1) and (d)(2)(iii), (iv), and (ix);
0
g. Adding paragraphs (d)(2)(xi) through (xiii);
0
h. Redesignating paragraph (d)(3) as paragraph (e); and
0
i. Revising newly redesignated paragraph (e).
    The additions and revisions read as follows:


Sec.  40.6  Self-certification of rules.

    (a) Submission requirements. A registered entity shall comply with 
the certification and submission requirements of this section prior to 
implementing any rule that has not obtained Commission approval under 
Sec.  40.5, or that is submitted under Sec.  40.10, except as otherwise 
provided by Sec.  40.10(a). A submission shall comply with the 
following conditions:
    (1) The registered entity has filed its submission electronically 
in a format and manner specified by the Commission.
    (2) The registered entity has provided a certification that the 
registered entity posted a notice of pending certification with the 
Commission and a copy of the submission, concurrent with the filing of 
a submission with the Commission, on the registered entity's website. 
Information that the registered entity seeks to keep confidential may 
be redacted from the documents published on the registered entity's 
website but it must be republished consistent with any determination 
made pursuant to Sec.  40.8(c)(4).
* * * * *
    (5) The rule or rule amendment is not a rule or rule amendment of a 
designated contract market that materially changes a term or condition 
of a contract for future delivery of an agricultural commodity 
enumerated in section 1a(9) of the Act or an option on such a contract 
or commodity in a delivery month having open interest.
    (6) Rule certifications implemented in response to an emergency.
    (i) Rules or rule amendments implemented under procedures of the 
governing board to respond to an emergency as defined in Sec.  40.1, 
shall, if practicable, be filed with the Commission prior to the 
implementation or, if not practicable, be filed with the Commission at 
the earliest possible time after implementation, but in no event more 
than twenty-four hours after implementation. Such rules shall be 
subject to the review and stay provisions of paragraphs (b) and (c) of 
this section.
    (ii) New rules or rule amendments that establish standards for 
responding to an emergency must be submitted pursuant to paragraph (a) 
of this section or may be submitted pursuant to Sec.  40.5.
    (7) The rule submission shall include:
    (i) The information required by appendix D to this part 
(``Emergency Rule Certification'' should be noted in the Description 
section in the case of a rule or rule amendment that responds to an 
emergency);
    (ii) The text of the rule (in the case of a rule amendment, 
deletions and additions must be indicated);
    (iii) The date of intended implementation;
    (iv) A certification by the registered entity that the rule 
complies with the Act and the Commission's regulations thereunder;
    (v) A concise explanation and analysis that is complete with 
respect to the operation, purpose, and effect of the proposed rule or 
rule amendment and its compliance with applicable provisions of the 
Act, including core principles, and the Commission's regulations 
thereunder;
    (vi) A brief explanation of any substantive opposing views 
expressed to the registered entity by governing board or committee 
members, members of the entity or market participants, that were not 
incorporated into the rule, or a statement that no such opposing views 
were expressed; and
    (vii) As appropriate, a request for confidential treatment pursuant 
to the procedures provided in Sec.  40.8;
    (8) The registered entity shall provide, if requested by Commission 
staff, additional evidence, information or data that may be beneficial 
to the Commission in conducting a due diligence assessment of the 
filing and the registered entity's compliance with any of the 
requirements of the Act or the Commission's regulations or policies 
thereunder; and
    (9) Notwithstanding the 10 business day filing requirement of 
paragraphs (a)(3) and (b)(1) of this section, a registered entity may 
file a submission and certification of a new rule or a rule amendment 
that delists, or withdraws the certification of, a product that has no 
open interest and may make the delisting or withdrawal of the product 
with no open interest effective immediately upon filing the submission, 
provided that the submission is made in compliance with paragraphs 
(a)(1), (2) and (7) of this section.
    (b) Review by the Commission. (1) The Commission shall have 10 
business days to review the new rule or rule amendment before the new 
rule or rule amendment is deemed certified and can

[[Page 88627]]

be made effective, unless the Commission notifies the registered entity 
during the 10-business day review period that it intends to issue a 
stay of the certification under paragraph (c) of this section.
    (2) Any amendment or supplementation made by the registered entity 
to the submission will be treated as the filing of a new submission 
under this section and be subject to the initial 10-business day review 
period in accordance with paragraph (b)(1) of this section, unless the 
amendment or supplementation is requested by the Commission or is made 
for correction of typographical errors, renumbering or other non-
substantive revisions.
    (c) * * *
    (2) Public comment. The Commission shall provide a 30-day comment 
period within the 90-day period in which the stay is in effect as 
described in paragraph (c)(1) of this section. The Commission shall 
publish a notice of the 30-day comment period on the Commission 
website. Comments from the public shall be submitted as specified in 
that notice.
    (3) Expiration of a stay of certification of new rule or rule 
amendment. A new rule or rule amendment subject to a stay pursuant to 
this paragraph (c)(3) shall become effective and can be implemented, 
pursuant to the certification, at the expiration of the 90-day review 
period described in paragraph (c)(1) of this section unless the 
Commission withdraws the stay prior to that time, or the Commission 
notifies the registered entity during the 90-day time period that it 
objects to the certification on the grounds that the proposed rule or 
rule amendment is inconsistent with the Act or 17 CFR chapter I.
* * * * *
    (5) Effect of objection. (i) Notification to a registered entity 
under paragraph (c) of this section of the Commission's objection to a 
certification by a registered entity on the grounds that the proposed 
rule or rule amendment is inconsistent with the Act or the Commission's 
regulations does not prevent the registered entity from subsequently 
submitting a revised version of the proposed rule or rule amendment for 
certification or Commission review and approval, or from submitting the 
new rule or rule amendment as initially proposed, in a supplemented 
submission; the revised or supplemented submission will be reviewed 
without prejudice.
    (ii) Notification to a registered entity under paragraph (c) of 
this section of the Commission's objection to a certification by a 
registered entity shall be presumptive evidence that the entity may not 
truthfully certify under this part that the same, or substantially the 
same, proposed rule or rule amendment complies with the Act and the 
Commission's regulations thereunder.
    (d) * * *
    (1) The registered entity provides to the Commission at least 
weekly a summary notice of all rule amendments made effective pursuant 
to this paragraph (d)(1) during the preceding week. Such notice must be 
labeled ``Weekly Notification of Rule Amendments'' and need not be 
filed for weeks during which no such actions have been taken. One copy 
of each such submission shall be furnished electronically in a format 
and manner specified by the Commission; and
* * * * *
    (2) * * *
    (iii) Index products. Routine changes in the composition, 
computation, or method of selection of component entities of an index 
(other than routine changes to securities indexes to the extent that 
such changes are not described in paragraph (e)(2)(vi) of this section) 
referenced and defined in the product's terms, that do not affect the 
pricing basis of the index, which are made by an independent third 
party whose business relates to the collection or dissemination of 
price information and which was not formed solely for the purpose of 
compiling an index for use in connection with a futures or option 
product;
    (iv) Option contract terms. Changes to option contract rules, which 
may qualify for implementation without notice pursuant to paragraph 
(e)(2)(vii) of this section, relating to the strike price listing 
procedures, strike price intervals, and the listing of strike prices on 
a discretionary basis;
* * * * *
    (ix) Trading months. The initial listing of trading months, or an 
amendment to existing trading months, which may qualify for 
implementation without notice pursuant to paragraph (e)(2)(viii) of 
this section, within the currently established cycle of trading months;
* * * * *
    (xi) Contact information. Updates of email addresses or other 
contact information that market participants use to submit block 
trades;
    (xii) Changes to no cancellation ranges. For a contract for the 
purchase or sale of a commodity for future delivery or an option on 
such a contract or an option on a commodity (other than a swap), 
changes to no cancellation ranges (which are the price ranges within 
which a trade will not be cancelled); or
    (xiii) Option premiums or margins. For a contract for the purchase 
or sale of a commodity for future delivery or an option on such a 
contract or an option on a commodity (other than a swap), payment or 
collection of commodity options premiums or margins; or for a swap, 
payment or collection of option premiums or margins.
* * * * *
    (e) Notification of rule amendments not required. Notwithstanding 
the rule certification requirements of section 5c(c)(1) of the Act and 
paragraph (a) of this section, a registered entity may place the 
following rules or rule amendments into effect without certification or 
notice to the Commission if the following conditions are met:
    (1) The registered entity maintains documentation regarding all 
changes to rules; and
    (2) The rule governs:
    (i) Transfer of membership or ownership. Procedures and forms for 
the purchase, sale or transfer of membership or ownership, but not 
including qualifications for membership or ownership, any right or 
obligation of membership or ownership or dues or assessments;
    (ii) Administrative procedures. The organization and administrative 
procedures of a registered entity governing bodies such as a Board of 
Directors, Officers and Committees, but not voting requirements, Board 
of Directors or Committee composition requirements or procedures, 
decision making procedures, use or disclosure of material non-public 
information gained through the performance of official duties, or 
requirements relating to conflicts of interest;
    (iii) Administration. The routine, daily administration, direction 
and control of employees, requirements relating to gratuity and similar 
funds, but not guaranty, reserves, or similar funds; declaration of 
holidays, and changes to facilities housing the market, trading floor 
or trading area;
    (iv) Standards of decorum. Standards of decorum or attire or 
similar provisions relating to admission to the floor, badges, or 
visitors, but not the establishment of penalties for violations of such 
rules; and
    (v) Fees. Fees or fee changes, other than fees or fee changes 
associated with market making or trading incentive programs, that:
    (A) Are less than $1.00 per contract; or

[[Page 88628]]

    (B) Relate to matters such as dues, badges, telecommunication 
services, booth space, real time quotations, historical information, 
publications, software licenses or other matters that are 
administrative in nature.
    (vi) Securities indexes. Routine changes to the composition, 
computation or method of security selection of an index that is 
referenced and defined in the product's rules, and which is made by an 
independent third party.
    (vii) Option contract terms. For registered entities that are in 
compliance with the daily reporting requirements of Sec.  16.01 of this 
chapter, changes to option contract rules relating to the strike price 
listing procedures, strike price intervals, and the listing of strike 
prices on a discretionary basis.
    (viii) Trading months. For registered entities that are in 
compliance with the daily reporting requirements of Sec.  16.01 of this 
chapter, the initial listing of trading months which are within the 
currently established cycle of trading months.

0
11. Amend Sec.  40.7 by revising paragraphs (a)(5) and (b)(3) and 
adding paragraph (e) to read as follows:


Sec.  40.7  Delegations.

    (a) * * *
    (5) The Commission hereby delegates to the Director of the Division 
of Market Oversight, to be exercised by the Director or by such 
employees of the Commission that the Director may designate from time 
to time, with the concurrence of the General Counsel or the General 
Counsel's delegate, the authority to determine whether a rule or rule 
amendment submitted by a designated contract market is material under 
Sec.  40.4(b)(5), and to notify the designated contract market of such 
determination.
    (b) * * *
    (3) Establish or amend or relate to speculative limits or position 
accountability provisions that are in compliance with the requirements 
of the Act and17 CFR chapter I;
* * * * *
    (e) The Commission hereby delegates, until it orders otherwise, to 
the Director of the Division of Clearing and Risk and, separately, to 
the Director of the Division of Market Oversight, to be exercised by 
either Director, as appropriate, or by such employees of the Commission 
that either Director may designate from time to time, the authority to 
specify the format and manner to be used by a registered entity when 
filing a submission pursuant to this part.

0
12. Amend Sec.  40.10 by:
0
a. Revising paragraphs (a) introductory text, (b), (d) introductory 
text, and (h)(3); and
0
b. Adding paragraph (i).
    The revisions and addition read as follows:


Sec.  40.10  Special certification procedures for submission of rules 
by systemically important derivatives clearing organizations.

    (a) Advance notice. A systemically important derivatives clearing 
organization, as defined in Sec.  39.2 of this chapter, shall provide 
notice to the Commission not less than 60 days in advance of any 
proposed change to its rules, procedures, or operations that could 
materially affect the nature or level of risks presented by the 
systemically important derivatives clearing organization. A notice 
submitted under this section shall be subject to the filing 
requirements of Sec.  40.6(a)(1) and the website publication 
requirements of Sec.  40.6(a)(2).
* * * * *
    (b) Changes requiring advance notice. Changes to a systemically 
important derivatives clearing organization's rules, procedures, or 
operations that could materially affect the nature or level of risks 
presented by the systemically important derivatives clearing 
organization may include, but are not limited to: material changes to 
its default management plan or default rules or procedures required 
under Sec.  39.16 or 39.35 of this chapter, program of risk analysis 
and oversight required under Sec.  39.18 of this chapter, or recovery 
and wind down plans required under Sec.  39.39 of this chapter; the 
adoption of a new or materially revised margin methodology; the 
establishment of a cross-margining program or similar arrangement with 
another clearing organization; and material changes to its approach to 
the stress testing required under Sec.  39.13(h)(3) or 39.36(a) or (c) 
of this chapter. If a systemically important derivatives clearing 
organization determines that a proposed change could not materially 
affect the nature or level of risks it presents and therefore does not 
file an advance notice, the Commission may determine otherwise and 
require the systemically important derivatives clearing organization to 
withdraw the proposed change and provide notice pursuant to this 
section.
* * * * *
    (d) Notice of objection. A systemically important derivatives 
clearing organization shall not implement a change to which the 
Commission has an objection on the grounds that the proposed change is 
not consistent with the Act or 17 CFR chapter I, or any applicable 
rules, orders, or standards prescribed under section 805(a) of the 
Dodd-Frank Act. The Commission will notify the systemically important 
derivatives clearing organization in writing of any objection regarding 
the proposed change within 60 days from the later of:
* * * * *
    (h) * * *
    (3) The Commission may require modification or rescission of the 
emergency change if it finds that the change is not consistent with the 
Act or 17 CFR chapter I, or any applicable rules, orders, or standards 
prescribed under section 805(a) of the Dodd-Frank Act.
    (i) Where in Sec. Sec.  39.3(g), 39.4(f), 39.13(i), and 39.15(b)(2) 
of this chapter a derivatives clearing organization is required to 
submit rules for approval pursuant to Sec.  40.5, a systemically 
important derivatives clearing organization instead shall submit such 
rules pursuant to this section if the rules could materially affect the 
nature or level of risks presented by the systemically important 
derivatives clearing organization.

0
13. Revise appendix D to read as follows:

Appendix D to Part 40--Submission Instructions for Rules and Products

    (a) Rule and product submissions shall be submitted 
electronically to the Commission by a registered entity in a format 
and manner specified by the Commission, and shall include all of the 
following information:
    1. Date--The date of the filing.
    2. Organization--The name of the organization filing the 
submission (e.g., CBOT).
    3. Type of Registered Entity--An indication as to whether the 
rule or product is being submitted by a designated contract market 
(DCM), derivatives clearing organization (DCO), swap execution 
facility (SEF), or swap data repository (SDR).
    4. Type of Filing--An indication as to whether the filing is a 
new rule, rule amendment or new product and the section of this part 
under which the filing is submitted. For a new product to be listed 
by a DCM or a SEF, an indication whether the new product meets the 
definition of referenced contract as such term is defined in Sec.  
150.1 of this chapter and is described in appendix C to part 150 of 
this chapter.
    5. Rule Numbers--For rule filings, the rule number(s) being 
adopted or modified in the case of rule amendment filings.
    6. Description--For rule or rule amendment filings, a 
description of the new rule or rule amendment, including a 
discussion of its expected impact on the registered entity, market 
participants, and the overall market. The narrative should describe 
the substance of the submission with enough

[[Page 88629]]

specificity to characterize all material aspects of the filing.
    7. Identifier Code (optional)--A registered entity Identifier 
Code, if applicable. Such codes are commonly generated by registered 
entities to provide an identifier that is unique to each filing 
(e.g., NYMEX Submission 03-116).
    (b) Other Requirements--A submission shall comply with all 
applicable filing requirements for proposed rules, rule amendments, 
or products. The entry of the information required by paragraph (a) 
of this appendix does not obviate the registered entity's 
responsibility to comply with applicable filing requirements (e.g., 
rules submitted for Commission approval under Sec.  40.5 must be 
accompanied by an explanation of the purpose and effect of the 
proposed rule along with a description of any substantive opposing 
views).
    (c) An indication of ``confidential treatment requested'' does 
not obviate the submitter's responsibility to comply with all 
applicable requirements for requesting confidential treatment in 
Sec.  40.8 and, where appropriate, Sec.  145.9 of this chapter, and 
will not substitute for notice or full compliance with such 
requirements.

0
14. Add appendix E to read as follows:

Appendix E to Part 40--Guidance on Compliance With the Materiality 
Assessment in Sec.  40.4

    This appendix provides guidance on complying with the 
requirement in Sec.  40.4(a) that a DCM must submit rule changes 
that would materially change a term or condition of a contract on an 
agricultural product enumerated in section 1a(9) of the CEA with 
open interest for Commission approval under the procedures of Sec.  
40.5. Section 40.4(a) applies strictly to rules that materially 
change a product's economic terms and conditions, and does not apply 
to other rules. Guidance is set forth below to assist a DCM in 
assessing whether a change to the terms and conditions is material 
pursuant to Sec.  40.4(a) and in explaining why it considers a rule 
to be non-material when Sec.  40.4(b)(5) is applicable. The guidance 
below can be used to demonstrate to the Commission compliance with 
the requirement in Sec.  40.4(b)(5)(ii) that the DCM explain why it 
considers a rule to be non-material when applicable.

Materiality of a Change of a Term or Condition

    Any change that is enumerated by the Commission in Sec.  
40.4(b)(1) through (4) is not material for purposes of Sec.  40.4(a) 
and may be submitted under the applicable Sec.  40.6 provision that 
is specified in the applicable Sec.  40.4(b). For any other rule 
that the DCM believes to be non-material, Sec.  40.4(b)(5) sets 
forth a process for the DCM to implement the change through self-
certification pursuant to Sec.  40.6(a).
    In order for a DCM to self-certify a change to a term or 
condition of a contract on an agricultural product enumerated in CEA 
section 1a(9) with open interest that the DCM believes to be non-
material, Sec.  40.4(b)(5) requires the DCM to make a non-
materiality filing and explain why it considers the rule change to 
be ``non-material.'' To assist an exchange in assessing and 
explaining whether a change to the terms and conditions is non-
material pursuant to Sec.  40.4(b)(5), paragraphs (1) through (4) of 
the following paragraph are the criteria that the Commission 
generally considers as evidence that an enumerated agricultural 
product rule change is non-material under Sec.  40.4(a) pursuant to 
Sec.  40.4(b)(5). A DCM may address these criteria in its assessment 
and explanation to demonstrate compliance with Sec.  40.4(b)(5).
    The Commission considers a change to the terms and conditions of 
a contract on an agricultural product enumerated in CEA section 
1a(9) that has open interest as a non-material change if:
    (1) The change should not affect a reasonable trader's decision 
to enter into, or maintain, a position;
    (2) The change should not affect a reasonable trader's decision 
to make or take delivery on the contract or to exercise an option on 
the contract; and
    (3) The change should not have an effect on the value of 
existing positions, including, but not limited to, a change 
affecting the price of the contract due to a change in the commodity 
quality characteristics of the existing contract, a change to the 
size of the existing contract, or a change to a cost of effecting 
delivery for the existing contract.

    Issued in Washington, DC, on October 17, 2024, by the 
Commission.
Robert Sidman,
Deputy Secretary of the Commission.

    Note: The following appendices will not appear in the Code of 
Federal Regulations.

Appendices to Provisions Common to Registered Entities--Commission 
Voting Summary and Commissioner's Statements

Appendix 1--Commission Voting Summary

    On this matter, Chairman Behnam, Commissioners Johnson, 
Goldsmith Romero, and Pham voted in the affirmative. Commissioner 
Mersinger voted in the negative.

Appendix 2--Statement of Commissioner Kristin N. Johnson

    I support making our rules clearer and ensuring that our rules 
enable the Commodity Futures Trading Commission (Commission) to 
effectively address innovations regarding products, platforms, and 
technologies.
    Today, the Commission issues final amendments to provisions 
common to registered entities set forth in Part 40 of the 
Commission's regulations (the Final Rule).
    Part 40 implements Section 5c(c) of the Commodity Exchange Act 
(CEA or Act) and applies to designated contract markets (DCMs), 
derivatives clearing organizations (DCOs), Swap Execution Facilities 
(SEFs), and swap data repositories (SDRs). Notably, Part 40 includes 
the procedures by which registered entities list new products and 
implement new rules, along with standards for review and approval of 
the same by the Commission.
    As of the date of the proposed rulemaking,\1\ Part 40 had not 
been amended comprehensively for a decade.\2\ Over the last ten 
years, our markets and the market structures that characterize our 
markets have experienced significant technological advancements. 
Regulation must adapt to address emerging developments.
---------------------------------------------------------------------------

    \1\ 88 FR 61432 (Sept. 6, 2023).
    \2\ Kristin N. Johnson, Commissioner, Statement in Support of 
Proposed Amendments to Provisions Common to Registered Entities 
(July 26, 2023), Statement of Commissioner Kristin N. Johnson in 
Support of Proposed Amendments to Provisions Common to Registered 
Entities at https://www.cftc.gov/PressRoom/SpeechesTestimony/johnsonstatement072623b.
---------------------------------------------------------------------------

    Today's Final Rule updates the Commission's regulations 
governing the introduction of new products and new rules. The Final 
Rule includes updates that demonstrate the Commission's commitment 
to ongoing efforts to ensure the clarity and relevance of its 
regulatory requirements--for example, updates to reflect the fact 
that registered entities now communicate with the Commission via the 
internet.
    The Final Rule amends Sections 40.2 (self-certification of 
products), 40.3 (voluntary submission of products for Commission 
approval), 40.5 (voluntary submission of rules for Commission 
approval), and 40.6 (self-certification of rules) to require that, 
in each case, a registered entity provide a submission ``that is 
complete with respect to'' key information about the product or 
rule. These changes reflect the Commission's commitment to ensure 
that registered entities provide sufficient information to the 
Commission to enable the Commission to complete the analysis of 
compliance required under the CEA and the Part 40 regulations. 
Several commenters noted the importance of this change in ensuring 
the Commission remains adequately informed about market 
developments.\3\ And, as the Final Rule notes, the regulations 
retain the word ``concise,'' thus minimizing the burden on 
registered entities, while enabling the Commission to receive the 
information it needs.
---------------------------------------------------------------------------

    \3\ See FIA Comment Letter on Provisions Common to Registered 
Entities (Nov. 3, 2023) at 1; Better Markets Comment Letter on 
Provisions Common to Registered Entities (Nov. 6, 2023) at 4.
---------------------------------------------------------------------------

    I thank staff in the Division of Clearing and Risk and the 
Division of Market Oversight, including Rachel Kaplan, Steven 
Benton, Nancy Markowitz, and Eileen Chotiner, for their efforts on 
this rulemaking.

[FR Doc. 2024-24388 Filed 11-6-24; 8:45 am]
BILLING CODE 6351-01-P


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