Federal Register / Vol. 76, No. 176 / Monday, September 12, 2011 / Rules and Regulations 56103 

1See Dodd-Frank Wall Street Reform and 

Consumer Protection Act, Pub. L. No. 111–203, 124 

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

may be accessed through the Commission’s Web 

site at http://www.cftc.gov/. 

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

Title VII may be cited as the ‘‘Wall Street 

Transparency and Accountability Act of 2010.’’ 

3 7 U.S.C. 1 et seq. (2006). The CEA also can be 

accessed through the Commission’s Web site. 

d.1. Abrin; 

d.2. Aflatoxins; 

d.3. Botulinum toxins; 

d.4. Cholera toxin; 

d.5. Clostridium perfringens toxins; 

d.6. Conotoxin; 

d.7. Diacetoxyscirpenol toxin; 

d.8. HT–2 toxin; 

d.9. Microcystin (Cyanginosin); 

d.10. Modeccin toxin; 

d.11. Ricin; 

d.12. Saxitoxin; 

d.13. Shiga toxin; 

d.14. Staphylococcus aureus toxins; 

d.15. T–2 toxin; 

d.16. Tetrodotoxin; 

d.17. Verotoxin and other Shiga-like 

ribosome inactivating proteins; 

d.18. Viscum Album Lectin 1 (Viscumin); 

or 

d.19. Volkensin toxin. 

e. ‘‘Fungi’’, as follows: 

e.1. Coccidioides immitis; or 

e.2. Coccidioides posadasii. 

■ 7. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

1— Special Materials and Related 

Equipment, Chemicals, 

‘‘Microorganisms’’ and ‘‘Toxins,’’ ECCN 

1C352 is amended by revising the 

‘‘Related Controls’’ paragraph in the List 

of Items Controlled section, to read as 

follows: 

1C352 Animal pathogens, as follows (see 

List of Items Controlled). 

* * * * * 

List of Items Controlled 

Unit: * * * 

Related Controls: The Animal and Plant 

Health Inspection Service (APHIS), U.S. 

Department of Agriculture, and the Centers 

for Disease Control and Prevention (CDC), 

U.S. Department of Health and Human 

Services, maintain controls on the 

possession, use, and transfer within the 

United States of certain items controlled by 

this ECCN (for APHIS, see 7 CFR 331.3(b), 

9 CFR 121.3(b), and 9 CFR 121.4(b); for 

CDC, see 42 CFR 73.3(b) and 42 CFR 

73.4(b)). 

Related Definitions: * * * 

Items: 

* * * * * 

■ 8. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

1—Special Materials and Related 

Equipment, Chemicals, 

‘‘Microorganisms’’ and ‘‘Toxins,’’ ECCN 

1C360 is amended by revising paragraph 

(a) in the ‘‘Items’’ paragraph in the List 

of Items Controlled to read as follows: 

1C360 Select agents not controlled under 

ECCN 1C351, 1C352, or 1C354. 

* * * * * 

List of Items Controlled 

Unit: * * * 

Related Controls: * * * 

Related Definitions: * * * 

Items: 

Note: * * * 

a. Human and zoonotic pathogens, as 

follows: 

a.1. Viruses, as follows: 

a.1.a. Central European tick-borne 

encephalitis viruses, as follows: 

a.1.a.1. Absettarov; 

a.1.a.2. Hanzalova; 

a.1.a.3. Hypr; 

a.1.a.4. Kumlinge; 

a.1.b. Cercopithecine herpesvirus 1 (Herpes 

B virus); 

a.1.c. Flexal virus; 

a.1.d. Reconstructed replication competent 

forms of the 1918 pandemic influenza virus 

containing any portion of the coding regions 

of all eight gene segments; 

a.2. [RESERVED]; 

* * * * * 

■ 9. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

1—Special Materials and Related 

Equipment, Chemicals, 

‘‘Microorganisms’’ and ‘‘Toxins,’’ ECCN 

1C991 is amended by revising the 

‘‘Items’’ paragraph in the List of Items 

Controlled to read as follows: 

1C991 Vaccines, immunotoxins, medical 

products, diagnostic and food testing 

kits, as follows (see List of Items 

controlled). 

* * * * * 

List of Items Controlled 

Unit: * * * 

Related Controls: * * * 

Related Definitions: * * * 

Items: 

a. Vaccines against items controlled by 

ECCN 1C351, 1C352, 1C353, 1C354, or 

1C360; 

b. Immunotoxins containing items 

controlled by 1C351.d; 

c. Medical products containing botulinum 

toxins controlled by ECCN 1C351.d.3 or 

conotoxins controlled by ECCN 1C351.d.6; 

d. Medical products containing items 

controlled by ECCN 1C351.d (except 

botulinum toxins controlled by ECCN 

1C351.d.3, conotoxins controlled by ECCN 

1C351.d.6, and items controlled for CW 

reasons under 1C351.d.11 or .d.12); 

e. Diagnostic and food testing kits 

containing items controlled by ECCN 

1C351.d (except items controlled for CW 

reasons under ECCN 1C351.d.11 or .d.12). 

Dated: August 26, 2011. 

Kevin J. Wolf, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2011–22677 Filed 9–9–11; 8:45 am] 

BILLING CODE 3510–33–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 5 

Retail Foreign Exchange Transactions; 

Conforming Changes to Existing 

Regulations in Response to the DoddFrank Wall Street Reform and 

Consumer Protection Act 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final rules; interpretation. 

SUMMARY: The Commodity Futures 

Trading Commission (Commission or 

CFTC) is amending its regulations 

governing off-exchange foreign currency 

transactions with members of the retail 

public (i.e., retail forex transactions). 

These amendments (Amendments) are 

necessary to incorporate into Part 5 of 

the Commission’s regulations changes 

made to the Commodity Exchange Act 

(CEA) by the Dodd-Frank Wall Street 

Reform and Consumer Protection Act 

(Dodd-Frank Act). The Commission is 

also issuing certain related technical 

interpretations of various provisions of 

the CEA as amended by the Dodd-Frank 

Act with respect to retail forex 

transactions. 

DATES: Effective September 12, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Christopher W. Cummings, Special 

Counsel, Division of Clearing and 

Intermediary Oversight, or Barbara S. 

Gold, Associate Director, Division of 

Clearing and Intermediary Oversight, 

Commodity Futures Trading 

Commission, 1155 21st Street, NW., 

Washington, DC 20581; telephone 

number: (202) 418–5450; facsimile 

number: (202) 418–5528; and electronic 

mail: ccummings@cftc.gov or 

bgold@cftc.gov, respectively. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On July 21, 2010, President Obama 

signed the Dodd-Frank Act.1 Title VII of 

the Dodd-Frank Act 2 amended the 

CEA 3 to establish a comprehensive new 

regulatory framework for swaps and 

security-based swaps. The goal of this 

legislation was to reduce risk, increase 

transparency, and promote market 

integrity within the financial system by, 


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56104 Federal Register / Vol. 76, No. 176 / Monday, September 12, 2011 / Rules and Regulations 

4See Dodd-Frank Act Section 721(a). 

5See Dodd-Frank Act Section 742(c)(1). 

6The Commission’s regulations are found at 17 

CFR Ch. I (2011) and can be accessed through the 

Commission’s Web site, http://www.cftc.gov. 

7See, e.g., Adaptation of Regulations to 

Incorporate Swaps, 76 FR 33066 (Jun. 7, 2011) 

(‘‘June 7 Proposal’’), whereby in response to the 

deletion of the term ‘‘derivatives transaction 

execution facility’’ from the CEA by the Dodd-Frank 

Act, the Commission has proposed to delete 

reference to the term ‘‘derivatives transaction 

execution facility’’ from Regulation 5.1(m), which 

defines the term ‘‘retail forex transaction.’’ 

8For the same reason, by the June 7 Proposal, the 

Commission proposed to amend the definition of 

the term ‘‘retail forex customer’’ in paragraph (k) of 

Regulation 5.1, such that the definition similarly 

would refer to Section 1a(18). 

9CEA Section 2(c)(2)(B) generally provides the 

Commission with authority over retail forex 

transactions. 

10As a result of these changes, then, the 

identification of the permitted counterparties in 

CEA Section 2(c)(2)(B)(i)(II) runs from (aa) through 

(dd), skips (ee), and ends at (ff). See Part III of this 

Federal Register release, infra. 11See CEA Section 5b and Part 39 of the 

Commission’s regulations. 12See Title XIII of the Food, Conservation and 

Energy Act of 2008, Public Law 110–246, 122 Stat. 

1651, 2189–2204 (2008). 13 75 FR 3282, 3288 (Jan. 20, 2010). 

among other things: (1) Providing for the 

registration and comprehensive 

regulation of swap dealers and major 

swap participants; (2) imposing clearing 

and trade execution requirements on 

standardized derivative products; (3) 

creating robust recordkeeping and realtime reporting regimes; and (4) 

enhancing the Commission’s 

rulemaking and enforcement authorities 

with respect to, among others, all 

registered entities and intermediaries 

subject to the Commission’s oversight. 

To accomplish its goal, the DoddFrank Act, among other things, 

amended the existing definitions in, and 

added new definitions to, CEA Section 

1a, which has resulted in a 

reorganization and renumbering of the 

definitions in Section 1a.4 The DoddFrank Act also deleted two classes of 

persons and added a new class of 

person permitted to serve, or to offer to 

serve, as a counterparty to a retail forex 

transaction under CEA Section 

2(c)(2)(B) (‘‘permitted counterparty’’), 

which similarly has resulted in a 

reorganization and redesignation of the 

CEA provisions identifying these 

permitted counterparties.5

As is explained below, the foregoing 

changes to the CEA necessitate 

corresponding amendments to Part 5 of 

the Commission’s regulations,6 which 

concerns retail forex transactions. In 

this regard, the Commission notes that 

it is also proposing other rulemakings in 

response to the Dodd-Frank Act that 

could affect the Part 5 regulations.7 The 

Commission intends to resolve any 

discrepancies that may arise between 

any of these other rulemakings and the 

Amendments in the course of finalizing 

its rulemakings under the Dodd-Frank 

Act. 

II. The Amendments 

A. Amendments Resulting Solely From 

a Renumbering of a CEA Definition 

Several definitions in Regulation 5.1 

employ the phrase ‘‘eligible contract 

participant as that term is defined in 

[CEA] Section 1a(12).’’ Specifically, this 

phrase is found in the following 

definitions in Regulation 5.1: 

‘‘commodity pool operator’’ (paragraph 

(d)(1) of the regulation); ‘‘commodity 

trading advisor’’ (paragraph (e)(1) of the 

regulation); ‘‘introducing broker’’ 

(paragraph (f)(1) of the regulation); 

‘‘retail forex account’’ (paragraph (i) of 

the regulation); and ‘‘retail forex 

account agreement’’ (paragraph (j) of the 

regulation). However, as a result of the 

Dodd-Frank Act, the term ‘‘eligible 

contract participant’’ is now defined in 

CEA Section 1a(18). By the 

Amendments, the Commission is 

amending Regulations 5.1(d)(1), (e)(1), 

(f)(1), (i) and (j) to reflect this numbering 

change, such that each of the definitions 

contained in these regulations refers to 

CEA Section 1a(18).8

Regulations 5.10, which concerns risk 

assessment recordkeeping applicable to 

retail forex transactions, and 5.11, 

which concerns risk assessment 

reporting applicable to retail forex 

transactions, provide at paragraphs 

(c)(2) and (d)(2), respectively, that ‘‘the 

term ‘Foreign Futures Authority’ shall 

have the meaning set forth in [CEA] 

section 1a(10).’’ As a result of the DoddFrank Act, this term is now defined in 

CEA Section 1a(26). The Amendments 

similarly change Regulations 5.10(c)(2) 

and 5.11(d)(2) to reflect this numbering 

change, such that the definition of 

‘‘Foreign Futures Authority’’ refers to 

CEA Section 1a(26). 

Regulation 5.18 establishes trading 

and operational standards for persons 

offering to serve as a retail forex 

counterparty. Specifically, paragraph 

(a)(1)(ii) refers to such persons as a 

‘‘[f]utures commission merchant as 

defined in [CEA] Section 1a(20).’’ 

Pursuant to the Dodd-Frank Act, the 

term ‘‘futures commission merchant’’ 

(FCM) is now defined in CEA Section 

1a(28). Accordingly, the Amendments 

likewise revise Regulation 5.18(a)(1)(ii) 

so that the FCM reference therein is to 

CEA Section 1a(28). 

B. Amendments Resulting From the 

Change in Permitted Counterparties 

Regulation 5.1(h) defines the term 

‘‘retail foreign exchange dealer’’ (RFED) 

to mean ‘‘any person that is, or that 

offers to be, the counterparty to a retail 

forex transaction, except for a person 

described in sub-paragraph (aa), (bb), 

(cc)(AA), (dd), (ee) or (ff) of [CEA] 

section 2(c)(2)(B)(i)(II).’’ 9 The DoddFrank Act: (1) Removed from this list of 

permitted counterparties the persons 

previously found in items (dd) and (ff), 

which respectively refered to certain 

insurance companies (including a 

regulated subsidiary or affiliate) and 

investment bank holding companies; (2) 

redesignated item (ee) as item (dd); and 

(3) redesignated item (gg) as item (ff).10

In light of these changes, the 

Amendments delete from Regulation 

5.1(h)(1) the references therein to items 

(ee) and (ff) of CEA Section 

2(c)(2)(B)(i)(II). For similar reasons, the 

Amendments change the references in 

Regulations 5.10(a)(1), 5.11(a)(1) and 

5.11(a)(2) to the authority pursuant to 

which a person is registered with the 

Commission as an RFED from CEA 

Section 2(c)(2)(B)(i)(II)(gg) to CEA 

Section 2(c)(2)(B)(i)(II)(ff). 

C. Amendments Related to the FCM 

Definition 

For the effective regulation of retail 

forex transactions, the CEA and Part 5 

distinguish between an FCM that is 

‘‘primarily or substantially’’ engaged in 

soliciting and accepting orders for 

exchange-traded futures contracts and 

accepting customer funds or property to 

margin or secure such contracts, who is 

permitted under CEA Section 

2(c)(2)(B)(i)(II)(cc) to engage in retail 

forex transactions based on its 

registration as an FCM, and a person 

that is registered as an FCM but is not 

‘‘primarily or substantially’’ engaged in 

those activities, who must register as an 

RFED in order to engage in retail forex 

transactions. Regulation 5.1(g) currently 

provides that the term ‘‘[p]rimarily or 

substantially means, when used to 

describe the extent of a futures 

commission merchant’s engagement in 

the activities described in section 

1a(20)’’ of the CEA, that the FCM’s gross 

revenues meet certain thresholds, or 

that the FCM is a clearing member of a 

derivatives clearing organization.11 The 

Commission explained this distinction, 

which originated in the CFTC 

Reauthorization Act of 2008 (CRA),12 as 

being ‘‘for use in determining whether 

a registered FCM is primarily or 

substantially engaged in FCM activities, 

such that it need not register as an RFED 

in order to conduct customer 

business.’’ 13

Thus, the Commission defined the 

term ‘‘primarily or substantially’’ in 


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14See Dodd-Frank Act Section 721(a)(13). 15See Dodd-Frank Act Sections 741(b) and 742(c). 16CEA Section 2(c)(2)(C) generally provides the 

Commission with authority over certain 

transactions that are not within the scope of CEA 

Section 2(c)(2)(B). 

17This occurs once each in CEA Sections 

2(c)(2)(B)(iii), 2(c)(2)(B)(iv)(I) and 2(c)(2)(B)(iv)(III), 

and twice in CEA Section 2(c)(2)(B)(v). 

18Reference to ‘‘item (aa), (bb), (dd), (ee) or (ff)’’ 

of CEA Section 2(c)(2)(B)(i)(II) occurs in Sections 

2(c)(2)(B)(iv)(I)(aa), 2(c)(2)(B)(iv)(I)(bb), 

2(c)(2)(B)(iv)(I)(cc), 2(c)(2)(B)(iv)(II)(aa), 

2(c)(2)(C)(i)(I)(aa), 2(c)(2)(C)(ii)(II)(aa), 

2(c)(2)(C)(iii)(I)(aa), 2(c)(2)(C)(iii)(I)(bb) and 

2(c)(2)(C)(iii)(II)(aa). The reference to ‘‘item (aa) 

through (ff)’’ occurs in CEA Section 

2(c)(2)(B)(iv)(IV)(aa). 

19Absent the interpretation being provided 

herein, the instruction in Dodd-Frank Act Sections 

741(b)(8)(A) and 741(b)(9)(A) for ‘‘striking ‘(dd)’ 

each place it appears’’ in CEA Sections 2(c)(2)(B) 

and 2(c)(2)(C) not only would remove the (dd) item 

heading from Section 2(c)(2)(B)(i)(II)(dd) (which 

identifies a financial holding company as a 

permitted counterparty for retail forex transactions), 

but it would also affect all of the cross-references 

to ‘‘item (aa), (bb), (dd), (ee) or (ff),’’ identified 

previously. 

20Thus, CEA Section 2(c)(2)(B)(i)(II)(dd) retains 

its designation, and each reference to ‘‘item (aa), 

(bb), (dd), (ee) or (ff)’’ identified previously 

continues to include a reference to ‘‘a financial 

holding company.’’ 

21See 5 U.S.C. 553(b). This requirement does not 

apply to interpretative rules or general statements 

of policy. 

22 Id. 

23See 5 U.S.C. 553(d). 

24This finding also satisfies the requirements of 

the Congressional Review Act, specifically 5 U.S.C. 

808(2), allowing the Proposal to become effective, 

notwithstanding the requirement of 5 U.S.C. 801 (if 

a Federal agency finds that notice and public 

comment are ‘‘impracticable, unnecessary or 

contrary to the public interest,’’ a rule ‘‘shall take 

effect at such time as the Federal agency 

promulgating the rule determines’’). 

25 5 U.S.C. 601 et seq. (2006). 

26By its terms, the RFA does not apply to 

‘‘individuals.’’ See 48 FR 14933, n. 115 (Apr. 6, 

1983). 

Regulation 5.1(g), and drafted the 

requirement to register as an RFED if a 

registered FCM was not engaged 

primarily or substantially in FCM 

activities, with reference to the activities 

described in the then-existing FCM 

definition and by means of a simple 

reference to ‘‘the activities described in 

Section 1a(20)’’ of the CEA. However, in 

addition to renumbering the FCM 

definition in the CEA from Section 

1a(20) to Section 1a(28), the Dodd-Frank 

Act amended the FCM definition itself 

to include certain activities involving 

swaps and retail forex transactions 

among the activities that bring a person 

within the FCM definition, and it added 

to the FCM definition any person that is 

registered with the Commission as an 

FCM.14 In order to maintain the 

distinction between FCM and RFED 

established by the CRA, the 

Amendments amend Regulations 5.1(g) 

and 5.3(a)(4)(i) such that each of these 

rules refers solely to those provisions of 

the CEA’s FCM definition that were in 

effect at the time of adoption of the 

CRA—i.e., the activities that, pursuant 

to the Dodd-Frank Act, are now set forth 

in CEA Sections 1a(28)(A)(i)(I)(aa)(AA) 

(‘‘the purchase or sale of a commodity 

for future delivery’’) and 1a(28)(A)(i)(II) 

(‘‘in or in connection with the activities 

described in [item aa of subclause (I)], 

accepts any money, securities, or 

property (or extends credit in lieu 

thereof) to margin, guarantee, or secure 

any trades or contracts that result or 

may result therefrom’’). 

III. Interpretation of Dodd-Frank Act 

Amendments to CEA Sections 2(c)(2)(B) 

and 2(c)(2)(C) 

As is noted above, the Dodd-Frank 

Act revised the list of permitted 

counterparties in CEA Section 

2(c)(2)(B)(i)(II) from items (aa) through 

(gg), to items (aa) through (dd) and (ff) 

(without an item (ee)). It did so in order 

both to delete insurance companies and 

investment bank holding companies 

from the list of permitted counterparties 

in CEA Section 2(c)(2)(B)(i)(II) and to redesignate the items corresponding to the 

remaining permitted counterparties.15

However, in amending CEA Sections 

2(c)(2)(B) and 2(c)(2)(C),16 the DoddFrank Act did not adjust certain internal 

references in these sections to reflect 

these changes to the list of permitted 

counterparties. 

Thus, for example, at numerous 

places CEA Section 2(c)(2)(B) continues 

to refers to item (gg), although item (gg) 

has been redesignated as item (ff).17

Similarly, in various other provisions of 

CEA Sections 2(c)(2)(B) and 2(c)(2)(C) 

the permitted counterparties other than 

FCMs and RFEDs are listed as either 

‘‘item (aa), (bb), (dd), (ee) or (ff)’’ of CEA 

Section 2(c)(2)(B)(i)(II) or ‘‘item (aa) 

through (ff)’’ of CEA Section 

2(c)(2)(B)(i)(II).18 These references now 

inadvertently include RFEDs, because 

RFEDs are now listed in item (ff). 

Finally, these same references 

inadvertently no longer include a 

financial holding company, because 

while the Dodd-Frank Act redesignated 

this permitted counterparty as item (dd), 

it nonetheless called for ‘‘striking ‘(dd)’ 

each place it appears’’ in CEA Sections 

2(c)(2)(B) and 2(c)(2)(C).19

To avoid any impediment to a full 

implementation of its regulatory 

program for retail forex transactions that 

any of the foregoing provisions might 

present, by this Federal Register release 

the Commission is issuing the following 

interpretations of the Dodd-Frank Act. 

First, to clarify that CEA Section 

2(c)(2)(B)(i)(II) includes a financial 

holding company as a permitted 

counterparty to retail forex transactions, 

the Commission interprets the 

directions in Dodd-Frank Act Sections 

741(b)(8) and (b)(9) to strike item ‘‘(dd)’’ 

each place it appears as a direction to 

strike item ‘‘(ee)’’ instead.20 This 

interpretation is necessary and 

appropriate because pursuant to the 

Dodd-Frank Act item (dd) includes a 

financial holding company as a 

permitted counterparty to retail forex 

transactions and item (ee) no longer 

exists in CEA Section 2(c)(2)(B)(i)(II). 

Second, to clarify that an RFED is a 

permitted counterparty, the Commission 

interprets each reference in CEA 

Sections 2(c)(2)(B) and 2(c)(2)(C) to 

‘‘item (gg) ’’ as a reference to ‘‘item (ff).’’ 

This interpretation similarly is 

necessary and appropriate because 

pursuant to the Dodd-Frank Act item (ff) 

includes an RFED as a permitted 

counterparty and item (gg) no longer 

exists in CEA Section 2(c)(2)(B)(i)(II). 

IV. Related Matters 

A. Administrative Procedure Act 

The Administrative Procedure Act 

(APA) generally requires an agency to 

publish notice of a proposed rulemaking 

in the Federal Register.21 This 

requirement does not apply, however, if 

the agency ‘‘for good cause finds * * * 

that notice and public procedure are 

impracticable, unnecessary, or contrary 

to the public interest.’’ 22 In addition, 

the APA generally requires that an 

agency publish an adopted rule in the 

Federal Register 30 days before it 

becomes effective, with certain 

exceptions, including if an agency finds 

good cause.23 The Commission finds 

that notice and solicitation of comment 

before the effective date of the changes 

being made herein are unnecessary, 

inasmuch as the rule changes are 

entirely non-substantive technical 

adjustments, and the interpretation 

would do no more than clarify certain 

technical drafting anomalies to express 

what is clearly the intent of the DoddFrank Act.24 Accordingly, pursuant to 

section 553(b) of the APA, the 

Commission finds that there is good 

cause not to follow notice and comment 

procedures for this rulemaking. For the 

same reason, the Commission finds, 

pursuant to section 553(b) of the APA, 

that the Amendments may be made 

effective immediately upon publication 

in the Federal Register. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(RFA) 25 requires that agencies, in 

proposing rules, consider the impact of 

those rules on small businesses.26 The 


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27See 47 FR 18618 (Apr. 30, 1982). 

28See 47 FR 18618, 18619 (Apr. 30, 1982) (FCMs) 

and 75 FR 55410, 55416 (Sep. 10, 2010) (RFEDs). 

29See 47 FR at 18619–20. 

30See 48 FR 35248, 35276 (Aug. 3, 1993) (IBs) 

and 47 FR at 18619, 18620 (CTAs). 

31 44 U.S.C. 3501 et seq. 32 7 U.S.C. 19(a). 

Commission previously has established 

certain definitions of ‘‘small entities’’ to 

be used by the Commission in 

evaluating the impact of its rules on 

such entities in accordance with the 

RFA.27 The Commission previously has 

determined that FCMs and RFEDs 

should not be considered small entities 

for purposes of the RFA.28 With respect 

to commodity pool operators (CPOs), 

the Commission previously has 

determined that a CPO is a small entity 

for the purpose of the RFA if it meets 

the criteria for an exemption from 

registration under Regulation 

4.13(a)(2).29 Thus, because the 

Amendments apply to registered CPOs, 

the RFA is not applicable to them. As 

for introducing brokers (IBs) and 

commodity trading advisors (CTAs), the 

Commission previously has stated that 

it would evaluate within the context of 

a particular rule proposal whether all or 

some affected IBs and CTAs would be 

considered to be small entities and, if 

so, the economic impact on them of the 

particular rule.30 In this regard, the 

Commission notes that the Amendments 

apply to registered IBs and registered 

CTAs, and do not change their existing 

obligations or burdens. Moreover, as is 

explained below, the Amendments will 

not have a significant economic impact 

on any person who would be affected 

thereby, because they will not impose 

any additional operational requirements 

or otherwise direct or confine the 

activities of affected persons. 

Accordingly, the Chairman hereby 

certifies pursuant to 5 U.S.C. 605(b) that 

the Amendments will not have a 

significant economic impact on a 

substantial number of small entities. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(PRA) 31 imposes certain requirements 

on Federal agencies (including the 

Commission) in connection with their 

conducting or sponsoring any collection 

of information as defined by the PRA. 

The Commission believes that the 

Amendments will not impose new 

recordkeeping or information collection 

requirements that require approval by 

the Office of Management and Budget 

under 44 U.S.C. 3501, et seq. 

Accordingly, the PRA does not apply to 

this rulemaking. 

D. Cost-Benefit Considerations 

Section 15(a) of the CEA 32 requires 

the Commission to consider the costs 

and benefits of its actions before issuing 

a rulemaking under the CEA. By its 

terms, Section 15(a) does not require the 

Commission to quantify the costs and 

benefits of a rule or to determine 

whether the benefits of the rulemaking 

outweigh its costs; rather, it simply 

requires that the Commission 

‘‘consider’’ the costs and benefits of its 

actions. Section 15(a) further specifies 

that the costs and benefits shall be 

evaluated in light of five broad areas of 

market and public concern: (1) 

Protection of market participants and 

the public; (2) efficiency, 

competitiveness and financial integrity 

of futures markets; (3) price discovery; 

(4) sound risk management practices; 

and (5) other public interest 

considerations. The Commission may in 

its discretion give greater weight to any 

one of the five enumerated areas and 

could in its discretion determine that, 

notwithstanding its costs, a particular 

rule is necessary or appropriate to 

protect the public interest or to 

effectuate any of the provisions or 

accomplish any of the purposes of the 

CEA. 

Summary of Amendments. As is 

explained above, the Amendments to 

Part 5 ensure that the Commission’s 

regulations governing retail forex 

transactions reflect changes made to the 

CEA by the Dodd-Frank Act by, e.g., 

aligning references in Part 5 to 

definitional and other provisions in the 

CEA with the appropriate provisions in 

the CEA as amended by the Dodd-Frank 

Act. 

Costs. With respect to costs, the 

Commission has determined that the 

costs of the Amendments will not be 

significant. This is because the 

Amendments will simply amend the 

current Part 5 text to take into account 

the numerical and designation changes 

made to the CEA as a result of the DoddFrank Act. No changes are being made 

to the existing regulatory framework. 

Thus there will be little (if any) costs to 

persons who will be affected by the 

Amendments. 

Benefits. With respect to benefits, the 

Commission has determined that the 

benefits of the Amendments will be 

significant. This is because they will 

maintain the customer protections 

currently provided under Part 5 by 

ensuring that the provisions of Part 5 

accurately reflect the text of the CEA as 

amended by the Dodd-Frank Act. 

List of Subjects in 17 CFR Part 5 

Bulk transfers, Commodity pool 

operators, Commodity trading advisors, 

Consumer protection, Customer’s 

money, securities and property, 

Definitions, Foreign exchange, 

Minimum financial and reporting 

requirements, Prohibited transactions in 

retail foreign exchange, Recordkeeping 

requirements, Retail foreign exchange 

dealers, Risk assessment, Special calls, 

Trading practices. 

For the reasons presented above, the 

Commission hereby amends Chapter I of 

Title 17 of the Code of Federal 

Regulations as follows: 

PART 5—OFF-EXCHANGE FOREIGN 

CURRENCY TRANSACTIONS 

■ 1. The authority citation for part 5 is 

revised to read as follows: 

Authority: 7 U.S.C. 1a, 2, 6, 6a, 6b, 6c, 6d, 

6e, 6f, 6g, 6h, 6i, 6k, 6m, 6n, 6o, 8, 9, 9a, 12, 

12a, 13b, 13c, 16a, 18, 19, 21, and 23, as 

amended by Title VII of the Dodd-Frank Wall 

Street Reform and Consumer Protection Act, 

Pub. L. No. 111–203, 124 Stat. 1376 (Jul. 21, 

2010). 

§ 5.1 [Amended] 

■ 2. Section 5.1 is amended by: 

■ a. Removing from paragraphs (d)(1)(i), 

(e)(1), (f)(1), (i) and (j) the words 

‘‘section 1a(12) of the Act’’ and adding 

in their place the words ‘‘section 1a(18) 

of the Act’’; 

■ b. Removing from paragraph (g) 

introductory text the words ‘‘section 

1a(20) of the Act’’ and adding in their 

place the words ‘‘section 

1a(28)(A)(i)(I)(aa)(AA) of the Act and 

section 1a(28)(A)(i)(II) of the Act insofar 

as that section references the activities 

described in section 

1a(28)(A)(i)(I)(aa)(AA)’’; and 

■ c. Removing from paragraph (h)(1) the 

words ‘‘sub-paragraph (aa), (bb), 

(cc)(AA), (dd), (ee) or (ff)’’ and adding 

in their place the words ‘‘item (aa), (bb), 

(cc)(AA) or (dd)’’. 

§ 5.3 [Amended] 

■ 3. Section 5.3 is amended by 

removing from paragraph (a)(4)(i)(A) the 

words ‘‘section 1a(20) of the Act’’ and 

adding in their place the words ‘‘section 

1a(28)(A)(i)(I)(aa)(AA) of the Act and 

section 1a(28)(A)(i)(II) of the Act insofar 

as that section references the activities 

described in section 

1a(28)(A)(i)(I)(aa)(AA)’’. 

§ 5.10 [Amended] 

■ 4. Section 5.10 is amended by: 

■ a. Removing from paragraph (a)(1) 

introductory text the words ‘‘section 

2(c)(2)(B)(i)(II)(gg) of the Act’’ and 


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Federal Register / Vol. 76, No. 176 / Monday, September 12, 2011 / Rules and Regulations 56107 

adding in their place the words ‘‘section 

2(c)(2)(B)(i)(II)(ff) of the Act’’; and 

■ b. Removing from paragraph (c)(2) the 

words ‘‘section 1a(10) of the Act’’ and 

adding in their place the words ‘‘section 

1a(26) of the Act’’. 

§ 5.11 [Amended] 

■ 5. Section 5.11 is amended by: 

■ a. Removing from paragraph (a)(1) 

introductory text the words ‘‘Section 

2(c)(2)(B)(i)(II)(gg) of the Act’’ and 

adding in their place the words ‘‘section 

2(c)(2)(B)(i)(II)(ff) of the Act’’; and 

■ b. Removing from paragraph (a)(2) 

introductory text the words ‘‘section 

2(c)(2)(B)(i)(II)(gg) of the Act’’ and 

adding in their place the words ‘‘section 

2(c)(2)(B)(i)(II)(ff) of the Act’’; and 

■ c. Removing from paragraph (d)(2) the 

words ‘‘section 1a(10) of the Act’’ and 

adding in their place the words ‘‘section 

1a(26) of the Act’’. 

§ 5.18 [Amended] 

■ 6. Section 5.18 is amended by 

removing from paragraph (a)(1)(ii) the 

words ‘‘section 1a(20) of the Act’’ and 

adding in their place the words ‘‘section 

1a(28) of the Act’’. 

Issued in Washington, DC, on September 2, 

2011, by the Commission. 

Sauntia S. Warfield, 

Assistant Secretary of the Commission. 

[FR Doc. 2011–23155 Filed 9–9–11; 8:45 am] 

BILLING CODE P 

SOCIAL SECURITY ADMINISTRATION 

20 CFR Parts 404 and 416 

[Docket No. SSA–2011–0015] 

RIN 0960–AH31 

Requiring Use of Electronic Services 

by Certain Claimant Representatives 

AGENCY: Social Security Administration. 

ACTION: Final rules. 

SUMMARY: We are revising our rules to 

require that claimant representatives use 

our electronic services as they become 

available on matters for which the 

representatives request direct fee 

payment. In the future, we will publish 

a notice in the Federal Register when 

we require representatives who request 

direct fee payment on a matter to use 

our available electronic services. We are 

also adding the requirement to use our 

available electronic services on matters 

for which the representative requests 

direct fee payment as an affirmative 

duty in our representative conduct 

rules. These revisions reflect the 

increased use of technology in 

representatives’ business practices. We 

expect that the use of electronic services 

will improve our efficiency by allowing 

us to manage our workloads more 

effectively. These rules do not require 

claimants to use our available electronic 

services directly; they only require their 

representatives to use the services on 

matters for which the representatives 

request direct fee payment. 

DATES: These final rules are effective on 

October 12, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Joann S. Anderson, Office of Income 

Security Programs, Social Security 

Administration, 6401 Security 

Boulevard, Baltimore, MD 21235–6401, 

(410) 965–6716. For information on 

eligibility or filing for benefits, call our 

national toll-free number, 1–800–772– 

1213 or TTY 1–800–325–0778, or visit 

our Internet site, Social Security Online, 

at http://www.socialsecurity.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

We may issue rules and regulations to 

administer the Social Security Act (Act). 

42 U.S.C. 405(a), 902(a)(5), 810(a), and 

1383(d)(1). 

On September 8, 2008, we published 

a notice of proposed rulemaking 

(NPRM) in the Federal Register entitled 

Revisions to Rules on Representation of 

Parties, and we gave the public 60 days 

to comment. 73 FR 51963. 

In the NPRM, we proposed to add an 

affirmative duty that would have 

required professional representatives to 

conduct business with us electronically 

at the times and in the manner that we 

prescribe. We proposed to define a 

professional representative as ‘‘any 

attorney, any individual other than an 

attorney, or any entity that holds itself 

out to the public as providing 

representational services * * * before 

us, regardless of whether the 

representative charges or collects a fee 

for providing the representational 

services.’’ Proposed sections 404.1703 

and 416.1503. We received several 

comments that opposed our broad 

definition of professional representative 

and our proposal that all professional 

representatives must conduct business 

with us electronically at the times and 

in the manner we prescribe. 

After careful consideration of these 

comments, we decided to require some, 

and encourage all, representatives to use 

our electronic services as much as 

possible. 

Therefore, we are adding sections 

404.1713 and 416.1513 and revising 

sections 404.1740(b)(4) and 

416.1540(b)(4) to require that 

representatives conduct business with 

us electronically at the times and in the 

manner we prescribe on matters for 

which they request direct fee payment. 

This means that a representative will be 

required to use our available electronic 

services in conducting business with us 

on any matter for which he or she has 

or will request direct fee payment. 

We continue to consider the rest of 

the regulatory changes we proposed in 

the NPRM, and we may publish 

additional final rules to address them. 

Requiring Use of Our Electronic 

Services 

We employ comprehensive usability 

testing, which includes inviting 

members of the public to test our 

electronic services and provide 

feedback, to ensure that our electronic 

services work well before we make them 

publicly available. Even after we make 

electronic services publicly available, 

we use customer satisfaction surveys 

and request user feedback to improve 

them. In accordance with our usual 

practice, we intend to employ usability 

testing and solicit user feedback for any 

electronic services we may require 

representatives to use under these final 

rules. Once we determine that we 

should make a particular electronic 

service publicly available because it 

works well, we will publish a notice in 

the Federal Register. The notice will 

contain the new requirement(s) and a 

list of all established electronic service 

requirements. 

If we discover that a representative 

who has an affirmative duty to use the 

available electronic services is not 

complying with our rules, we may 

investigate to determine if the 

representative is purposefully violating 

this duty or attempting to circumvent 

our rules. We will use our existing rules 

in sections 20 CFR 404.1740–404.1799 

and 416.1540–416.1599 to address 

potential violations. 

We will not penalize the claimant if 

the representative disregards his or her 

affirmative duty to use our electronic 

services. We will not reject or delay a 

claimant’s request or process it 

differently if a representative fails to 

comply with this rule, but we may 

decide to pursue sanctions against the 

representative in appropriate cases. 

We also proposed to add sections 

404.1713 and 416.1513, in addition to 

the affirmative duty in proposed 

sections 404.1740 and 416.1540. We are 

adopting, with minor changes, only the 

provisions of sections 404.1713(a) and 

416.1513(a) that we proposed, and we 

are adopting, with minor changes, our 

proposed affirmative duty in final 

sections 404.1740 and 416.1540. We are 

also making other conforming changes. 


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