Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Rules and Regulations 10427

1 61 FR 66241 (December 17, 1996).

2On November 22, 1996, the Commission

published a separate proposed rulemaking

establishing similar ‘‘fast-track’’ review procedures

for contract market designation applications and

proposed rules relating to contract terms and

conditions under Regulation 1.41(b). (61 FR 59386.)

The Commission also is adopting that rulemaking

today in a separate Federal Register release with

slight modifications from the original proposed

rulemaking (the ‘‘fast-track’’ rulemaking). The two

rulemakings establish similar rule review

procedures and any differences between the two

schemes generally reflect differences set forth in the

statute with respect to term and condition rule

proposals and non-term and condition rule

proposals.

3 62 FR 2334 (January 16, 1997).

71°13′28′′W; to lat. 42°55′15′′N, long.

71°06′58′′W; to lat. 42°38′30′′N, long.

71°21′48′′W; to lat. 42°40′30′′N, long.

71°27′03′′W, and within 4 miles each side of

the CHERN NDB 303° bearing extending from

the 7-mile radius to 10 miles northwest of the

NDB; excluding that airspace within the

Portsmouth, NH, and Boston, MA, Class E

airspace areas.

* * * * *

ANE RI E5 Newport, RI

Newport State, RI

(Lat. 41°31′56′′N, long. 71°16′53′′W)

Providence VORTAC

(Lat. 41°43′28′′N, long. 71°25′47′′W)

That airspace extending upward from 700

feet above the surface within a 6.3-mile

radius of Newport State Airport, and within

2.2 miles on each side of the Providence

VORTAC 150° radial extending from the 6.3-

mile radius to 5.6 miles southeast of the

Providence VORTAC, and within 4 miles

northwest to 6 miles southeast of Newport

State Airport 025° bearing extending from the

6.3-mile radius to 16.2 miles northeast of the

Newport State Airport; excluding that

airspace within the New Bedford, MA, Class

E airspace area.

* * * * *

ANE RI E5 Providence, RI

Providence, Theodore Francis Green State

Airport, RI

(Lat. 41°43′25′′N, long. 71°25′36′′W)

Providence VORTAC

(Lat. 41°43′28′′N, long. 71°25′47′′W)

That airspace extending upward from 700

feet above the surface within an 8.8-mile

radius of Theodore Francis Green State

Airport, and within 4 miles northwest to 4.5

miles southeast of the Providence VORTAC

211° radial extending from the 8.8-mile

radius to 16.7 miles southwest of the

Providence VORTAC, and within 4 miles on

each side of the VORTAC 330° radial

extending from the 8.8-mile radius to 15.4

miles northwest of the Providence VORTAC,

and within 2.9 miles on each side of the

Providence VORTAC 132° radial extending

from the 8.8-mile radius to 9.6 miles

southeast of the Providence VORTAC;

excluding that airspace within the North

Kingstown, RI, Pawtucket, RI, and Newport,

RI, Class E airspace areas.

* * * * *

Issued in Burlington, MA, on February 28,

1997.

David J. Hurley,

Assistant Manager, Air Traffic Division, New

England Region.

[FR Doc. 97–5713 Filed 3–6–97; 8:45 am]

BILLING CODE 4910–13–M

14 CFR Part 71

[Airspace Docket No. 96–ANE–45]

Removal of Class E Airspace; Fall

River, MA

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Direct final rule; confirmation of

effective date.

SUMMARY: This action removes the Class

E airspace area at Fall River, MA due to

the closure of the Fall River Municipal

Airport (KFLR) and the cancellation of

the standard instrument approach

procedure to that airport.

EFFECTIVE DATE: This rule was effective

0901 UTC, January 30, 1997.

FOR FURTHER INFORMATION CONTACT:

Raymond Duda, Operations Branch,

ANE–530.3, 12 New England Executive

Park, Burlington, MA 01803–5299;

telephone (617) 238–7533; fax (617)

238–7596.

SUPPLEMENTARY INFORMATION: The FAA

published this direct final with a

request for comments in the Federal

Register on December 19, 1996 (61 FR

66910). The FAA uses the direct final

rulemaking procedure for a noncontroversial rule where the FAA

believes that there will be no adverse

public comment. This direct final rule

advised the public that no adverse

comments were anticipated, and that

unless a written adverse comment, or a

written notice of intent to submit such

an adverse comment, were received

within the comment period, the

regulation would become effective on

January 30. No adverse comments were

received, and thus this notice confirms

that this final rule became effective on

that date.

Issued in Burlington, MA, on February 28,

1997.

David J. Hurley,

Manager, Air Traffic Division, New England

Region.

[FR Doc. 97–5715 Filed 3–6–97; 8:45 am]

BILLING CODE 4910–13–M

COMMODITY FUTURES TRADING

COMMISSION

17 CFR Part 1

Final Rulemaking Concerning Contract

Market Rule Review Procedures

AGENCY: Commodity Futures Trading

Commission.

ACTION: Final rulemaking.

SUMMARY: The Commodity Futures

Trading Commission (‘‘Commission’’)

has adopted amendments to

Commission Regulation 1.41(c) that

establish procedures for the

Commission’s review of contract market

rules that do not relate to contract terms

and conditions. The amendments

shorten the Commission’s time frame for

reviewing complex rules and streamline

the rule review process such that rule

changes generally can be deemed

approved or permitted to be put into

effect without Commission approval.

Specifically, all non-term and

condition rule changes that meet the

form and content requirements will be

deemed approved or be permitted to be

put into effect without approval ten

days after Commission receipt, unless

the Commission takes action to

commence review of the proposal for a

45-day period (or a 75-day period in the

case of rules published for comment in

the Federal Register) or the contract

market agrees to another, specified

review period. At the end of the 45-day

(or 75-day) review period, a proposed

rule meeting the form and content

requirements will be deemed approved

or become effective without approval

unless the Commission informs the

submitting contract market of its

intention to initiate disapproval

proceedings, the contract market

withdraws the proposal, or the contract

market requests that the review period

be extended to the current 180-day

period.

EFFECTIVE DATE: April 7, 1997.

FOR FURTHER INFORMATION CONTACT:

David P. Van Wagner, Special Counsel,

Division of Trading and Markets,

Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street, NW., Washington, DC

20581. Telephone: (202) 418–5490.

SUPPLEMENTARY INFORMATION:

I. Introduction

On December 17, 1996, the

Commission published for public

comment in the Federal Register 1

proposed amendments to Commission

Regulation 1.41 revising the

Commission’s procedures for the review

of contract market rules that do not

relate to terms and conditions.2 The

original comment period was scheduled

to end on January 16, 1997, but was

extended by the Commission until

January 31, 1997.3
10428 Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Rules and Regulations

4The Commission’s original proposal regarding

non-term and condition rule changes also proposed

to revise the heading to Commission Regulation

1.41(b) so that it expressly applied to term and

condition rule changes. That revision has been

incorporated in the Commission’s separate fasttrack rulemaking for term and condition rule

changes.

5Current Commission Regulation 1.41(b)(5)

requires that rule submissions ‘‘[n]ote and briefly

describe any substantive opposing views expressed

by the members of the contract market or others

with respect to the proposed rule.’’

II. Comments Received

The Commission received seven

comment letters. The comment letters

were submitted by four futures

exchanges (the Chicago Board of Trade

(‘‘CBT’’), the Chicago Mercantile

Exchange (‘‘CME’’), the Coffee, Sugar &

Cocoa Exchange, Inc. (‘‘CSC’’), and the

New York Mercantile Exchange

(‘‘NYMEX’’)); two futures trade

associations (the Futures Industry

Association (‘‘FIA’’) and the Managed

Futures Association (‘‘MFA’’)); and, a

registered futures association (the

National Futures Association (‘‘NFA’’).

The Commission has carefully

reviewed the comments received and

has decided to issue amended

Regulation 1.41(c) as final with three

modifications from the original

proposal.4 The comments and an

explanation of the Commission’s

decision to adopt amended Regulation

1.41(c) are discussed below.

III. Commission Regulation 1.41(c)

A. Overview

The following description consists of

a section-by-section analysis of the

Commission’s final rulemaking. Each

section describes a provision of the

Commission’s proposed rulemaking,

discusses relevant suggestions made by

the commenters, and indicates how the

provision has been adopted in the final

rulemaking.

In addition to commenting on specific

sections of proposed Regulation 1.41(c),

several commenters questioned the

necessity for Regulation 1.41’s basic

requirement that contract market rules

receive Commission review before being

put into effect. As discussed in more

detail in the fast-track rulemaking, the

Commission believes that prior review

of proposed contract market rule

changes can be essential to ensuring the

financial integrity of the markets and to

protecting the public interest. Contract

market actions can affect the interests of

a large number of non-member market

participants and the general public. As

self-regulatory organizations, contract

markets have a responsibility to comply

with and enforce the requirements of

the Act and the Commission’s

regulations. As member organizations,

however, contract markets may not

always be cognizant of, or sensitive to,

the impact of particular rule changes on

the general public or on market

participants who are not contract market

members and who are not involved

directly in the contract markets’

formulation of such rules. The

Commission believes that its prior

review procedures help to ensure that

contract markets meet their selfregulatory responsibilities with respect

to all market participants and that rule

changes are not inconsistent with the

public interest.

The Commission’s prior review

procedures also ensure that the

Commission is able to solicit the views

of market users, other regulators, and

other interested parties with respect to

rule proposals. These parties often

provide valuable insights concerning

the impact of rule proposals that are

essential to the Commission’s

completing meaningful analyses of

contract market submissions. The

Commission believes such oversight

also provides additional incentives for

the contract markets to take market

users’ needs and the public interest into

account in the first instance, thereby

improving the functioning of the selfregulatory process.

The Commission concurs with FIA’s

comment that Commission disapproval

of contract market rule changes after

their implementation is not a viable

alternative to prior Commission review

and approval. The Commission believes

that this approach would be inefficient

and could impact market users or the

public adversely during the pendency of

a disapproval proceeding by increasing

uncertainty in the marketplace.

Several commenters contended that

the Commission’s current rule review

procedures cause unwarranted delays in

the implementation of contract market

rule changes and put the contract

markets at a competitive disadvantage to

foreign futures exchanges and over-thecounter markets. No evidence was

provided, however, to suggest that the

time frames provided for by the

proposed rulemaking would create

competitive disadvantages. Notably, all

of the commenters conceded that the

Commission’s proposed rulemaking

would further the goal of implementing

contract market rule changes more

promptly. The commenters differed,

however, on whether contract markets

would be able to implement their rule

changes promptly enough under the

proposed rulemaking. The Commission

believes that its streamlined procedures

will allow contract markets to

implement their rule proposals in an

expeditious manner, while still ensuring

that the public is protected from rules

that are discriminatory, anticompetitive, or illegal or that create

serious concerns with respect to

financial or market integrity.

NFA stated in its comment letter that

the need for timely rule review and

approval is as important to registered

futures associations as it is to contract

markets. Accordingly, NFA

recommended that the Commission

extend proposed Regulation 1.41(c)’s

rule review procedures to cover the rule

changes of registered futures

associations. While the Commission

agrees with NFA that it should adopt a

streamlined rule review scheme for

registered futures associations, it does

not believe that it would be appropriate

to include registered futures

associations within the terms of this

rulemaking. Regulation 1.41 was

established expressly for contract

market rule proposals and includes

procedures that are inapplicable to

registered futures association rules.

However, although the Commission has

determined not to make amended

Regulation 1.41(c) applicable to

registered futures associations, the

Commission will propose a rulemaking

in the near future to establish similar

rule review procedures tailored to the

types of rules adopted by registered

futures associations. In the interim, the

Commission intends to follow

Regulation 1.41(c)’s basic review

procedures and deadlines when

reviewing registered futures association

rule changes.

B. Regulation 1.41(c)(1)(i)—Form and

Content of Submissions

Proposed Commission Regulation

1.41(c)(1)(i) established form and

content requirements for all rules

submitted to the Commission pursuant

to Regulation 1.41(c). That proposal

preserved the form and content

requirements that currently apply to

rules submitted to the Commission

pursuant to Regulation 1.41(b) and

Regulation 1.41(c). Proposed Regulation

1.41(c)(1)(i) also required that

Regulation 1.41(c) submissions include

certain other information to help

expedite the Commission’s review of

such submissions.

Under the current form and content

requirements of Commission Regulation

1.41, contract markets must include in

their rule submissions any substantive

views expressed by their members or

others in opposition to a proposed rule.5

As a clarification of this requirement,

proposed amended Regulation

1.41(c)(1)(i)(E) specified that the views
Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Rules and Regulations 10429

6See Section 5a(a)(14)(A) of the Act and

Commission Regulation 1.64(a)(4).

7For example, there have been a number of

occasions when contract market submissions have

indicated that a rule proposal was the subject of a

membership vote and that a substantial minority of

members opposed the measure. Based on this

information, Commission staff made further

inquiries to determine the views of those opposing

members and took those views into account while

reviewing the rule proposal.

of opposing governing board members

also must be included in proposed rule

submissions. In addition, proposed

amended Regulation 1.41(c)(1)(i)(E)

provided that the currently-required

description of opposing views must

indicate the membership interest

categories 6 of persons who were

opposed to the proposed contract

market rule.

Proposed Regulation 1.41(c)(1)(i)(F)

required that contract markets specify in

their submissions any sections of the

Act or the Commission’s regulations

that relate to a proposed rule,

particularly citing any such provisions

that require Commission approval of the

rule. To the extent a submission was

potentially inconsistent with a

provision of the Act or the

Commission’s regulations, the proposal

required that the submission contain a

reasoned analysis addressing that issue

and supporting adoption of the rule.

Proposed Regulation 1.41(c)(1)(i)(G)

required that contract markets indicate

in their submissions whether they were

requesting Commission approval for a

proposed rule.

The CBT, CME, and CSC each

objected to proposed amended

Regulation 1.41(c)(1)(i)(E)’s requirement

that contract market rule submissions

identify the membership interest

categories of persons who opposed a

rule proposal. They contended that the

provision intruded upon their internal

decision making processes without

providing any information that would

be useful to the Commission in its rule

review process. CME and CSC

particularly stated that the proposal

would force revisions to their boards’

deliberative and voting procedures.

FIA supported the proposed

amendment to Commission Regulation

1.41(c)(1)(i)(E). The FIA believed that

opposing view information is especially

important given the fact that contract

market rules that are submitted to the

Commission pursuant to Regulation

1.41(c) are rarely published for public

comment.

The Commission believes that

information about the views and

categories of persons who oppose rule

proposals will help the Commission to

ascertain whether others believe that a

proposal raises important issues and to

identify rules that should be published

for comment and, thus, will generally

benefit the rule review process overall.

Upon receipt, Commission staff now

often requests contract markets

submitting rule proposals to supplement

their submissions with information

about the views and identities of

persons who have expressed opposition

to rule proposals, whether they be board

members or members of the contract

market. This information helps alert

Commission staff to potential regulatory

issues that are not apparent from the

text of a proposed rule and, thus, helps

to focus the staff’s analysis of the

proposal. In addition, this information

allows the Commission to avoid the

time-consuming process of publishing

rule proposals for public comment,

since Commission staff can contact

representative members of the

appropriate membership interest

category to obtain their views on

particular rule proposals.7

The Commission agrees with the

CME’s comment that board members do

not necessarily vote on issues based

upon the membership interest categories

they represent. However, the

Commission’s experience has been that

persons from the same membership

interest category often have common

business circumstances which influence

their views on contract market

regulatory matters. Accordingly,

contract market directors and members

who oppose new rule proposals often

express views that reflect their

membership interest categories. The fact

that a contract market member might

have views on rule proposals that are

particular to his or her membership

interest category is recognized in section

5a(a)(14)(A) of the Act and Regulation

1.64 which require that contract markets

provide board representation for a

diversity of membership interests.

The provision will ensure that the

Commission will have opposing view

information when it initiates its review

of a rule proposal, thus obviating the

need for Commission staff to obtain

such information from the submitting

contract market during the course of a

rule’s review, which will be especially

helpful to assuring that the Commission

will meet the compressed time frames

established by the proposed rulemaking.

The CME contended that proposed

amended Regulation 1.41(c)(1)(i)(E) will

put an additional burden on contract

market staffs to speak with each board

member who votes against a proposed

rule to determine the reasons for his or

her opposition. To clarify, the proposed

rulemaking only will require contract

markets to record the views of board

members opposing a rule proposal when

such views are openly expressed during

board deliberations. Contract market

staffs will not be required to ascertain

the views of an opposing board member

when the member does not express any

rationale for his or her opposition.

In its comment letter, NYMEX

characterized proposed amended

Regulation 1.41(c)(1)(i) (E) through (G)

as informational burdens that will add

to the length of time expended by

contract market staff to prepare a

submission and will provide

Commission staff with additional

reasons for remitting a rule submission

for failing to meet form and content

requirements.

As indicated above, each of these

provisions will require contract markets

to include in their initial submissions to

the Commission information which

Commission staff often requests of

contract markets during the course of

rule reviews. Including this information

in Regulation 1.41(c)’s form and content

requirements should speed up the rule

review process considerably by

reducing the need to request such

information after a rule is submitted.

For the reasons stated above, the

Commission has determined to adopt

amended Regulation 1.41(c)(1)(i) (A)

through (E) as proposed. The

Commission has determined, however,

to adopt a revised version of proposed

amended Regulation 1.41(c)(1)(F) and

not to adopt proposed amended

Regulation 1.41(c)(1)(i)(G).

In its final rulemaking, the

Commission has revised Regulation

1.41(c)(1)(i)(F) to require that contract

markets identify in their submissions

any provisions of the Act or the

Commission’s regulations that may

require amendment or interpretation in

order to implement a proposed rule

change. Under this requirement,

contract markets must provide the

Commission with a reasoned analysis of

why such an amendment or

interpretation is necessary. The

requirement will permit the

Commission to focus on and to address

speedily rules which may violate

provisions of the Act or regulations or

require their amendment or

interpretation. The Commission believes

that this requirement not only will

facilitate its consideration of various

contract market rule proposals, but also

will enable it, to the extent consistent

with the Act and the public interest, to

amend its regulations as needed to

permit contract market innovation in an

evolving marketplace.

The Commission also believes that

proposed amended Regulation
10430 Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Rules and Regulations

8Of course, proposed Regulation 1.41(c)(1)(iii)

would not mandate Commission retention of all

rules that raise such novel or complex issues or that

are of major economic significance. The

Commission would only have the discretion to

retain such rules for further review.

1.41(c)(1)(i)(G), which required a

contract market to indicate expressly

whether it was requesting approval of a

proposed rule, is not necessary and may

be deleted from the final rulemaking.

Commission staff will review each rule

proposal to determine whether or not it

requires Commission approval under

any provision of the Act or the

regulations and will treat it accordingly.

Of course, to the extent that a proposed

rule does not require Commission

approval, but the submitting contract

market desires approval, the contract

market must clearly request approval in

its submission.

C. Regulation 1.41(c)(1)(ii)—Failure To

Meet Form and Content Requirements

Proposed Regulation 1.41(c)(1)(ii)

permitted the Commission to remit rule

proposals that did not comply with the

form and content requirements of

Regulation 1.41(c)(1)(i). This provision

simply replicated the remittal authority

set forth in current Regulation 1.41(b)

and Regulation 1.41(c). The CBT, CME,

and CSC each objected to this provision

on the grounds that the Commission

uses its remittal authority to delay and

to prevent the implementation of

contract market rule proposals. The CBT

in particular stated that Commission

staff uses its remittal authority to raise

questions that are unrelated to the

threshold question of whether a rule

proposal would violate the Act or the

Commission’s regulations.

The Commission believes that

retaining the authority to remit

incomplete submissions is essential to

its ability to make reasoned analyses as

to whether proposed contract market

rules are consistent with the Act and the

Commission’s regulations. The

Commission believes that it is

sometimes impossible to determine the

operation, purpose and effect of

proposed rules based solely on their

text. Regulation 1.41’s form and content

requirements have been formulated

accordingly. The Commission believes

that reserving the authority to remit

incomplete submissions disciplines the

submission process by assuring that

contract markets adequately explain

their proposals at the outset. This

discipline is even more essential under

the proposed rulemaking’s compressed

time frames.

As previously noted, the public

comment process frequently identifies

or focuses issues. The Commission’s

remittal authority also helps to ensure

that contract markets will supplement

their submissions where necessary to

address issues identified by commenters

during the comment process.

For the reasons stated above, the

Commission has determined to adopt

amended Regulation 1.41(c)(1)(ii) as

proposed.

D. Regulation 1.41(c)(1)(iii)—Extension

of Review Period

Proposed Regulation 1.41(c)(2)

provided that proposed non-term and

condition rule changes would be

deemed approved or be allowed to go

into effect without approval, as

appropriate, ten days after their receipt

by the Commission unless they were

retained by the Commission for further

review. Proposed Regulation

1.41(c)(1)(iii) specified that the

Commission could extend the ten-day

review period to 45 days (75 days when

a rule was published for public

comment), if the Commission

determined within ten days of receipt

that the rule ‘‘raises novel or complex

issues which require additional time for

review or is of major economic

significance’’ and so notified the

submitting contract market. Such types

of rule proposals might include:

(1) Rules relating to the financial

integrity of markets or their participants

(e.g., CME establishment of Globex

Foreign Exchange Facility to serve as

market maker for certain CME foreign

currency futures contracts traded

through the Globex system (approved by

the Commission on August 9, 1996)); (2)

rules establishing novel trading

procedures or providing for noncompetitive trading (e.g., CME LOX

program which substitutes an electronic

order execution facility for open outcry

execution of large lot currency contracts

(approved by the Commission on March

18, 1993), CME rule amendment

restricting exchange for physical

transactions in Eurodollar futures

contracts (approved by the Commission

on November 29, 1995), CME rule

amendment establishing all-or-none

order-filling procedures whereby certain

designated orders can only be executed

in their entirety (approved by the

Commission on May 2, 1996)); (3) rules

providing for the differential treatment

of different classes of market

participants (e.g., broker incentive

programs at various contract markets);

(4) rules establishing linkages among

exchanges (e.g., establishment of mutual

offset system between CME and

Singapore Monetary Exchange

(approved by the Commission on

August 28, 1989)); (5) rules relating to

the application of new technology to the

marketplace (e.g., CME’s Globex trading

system (approved by the Commission on

February 8, 1989), CBT’s Project A

trading system (approved by the

Commission on October 19, 1992),

NYMEX’s ACCESS trading system

(approved by the Commission on

December 17, 1992)); and, (6) rules

raising customer protection issues (e.g.,

CME rules allocating liability in

connection with the operation of the

Globex trading system (allowed to go

into effect without approval by the

Commission on September 27, 1991),

CBT rule establishing post settlement

trading sessions (allowed to go into

effect without approval by the

Commission on April 14, 1992)).

CME commented that the proposed

bases for extending Commission review

of a rule proposal would not necessarily

have any nexus with a determination of

whether the proposal would violate the

Act or the Commission’s regulations. To

the contrary, Commission review always

is directed towards making such a

determination. The Commission

believes that these are the types of rules

that the Commission may require

additional time to review carefully.8

Indeed, FIA pointed out in its comment

letter that the types of rules listed in the

Commission’s proposed rulemaking

release as possibly needing more than

ten days of review are precisely the

types of rules that FIA saw as raising

sufficiently important issues to require

it to submit comments to the

Commission in the past. Similarly, MFA

commented that Commission retention

of rule proposals that raise novel or

complex issues for further review would

be beneficial as it would enable the

Commission to focus its inquiries, while

still permitting the contract markets to

implement rule changes in an efficient

manner.

As the CBT pointed out in its

comment letter, under section

5a(a)(12)(A) of the Act, Commission

staff may not itself extend the ten-day

review period for non-term and

condition rule changes that do not

require approval. Absent the consent of

the submitting contract market, the

Commission may only retain such rule

proposals for further review if ‘‘the

Commission notifies such contract

market in writing of its determination to

review such rules for approval.’’ This

determination is not delegable to

Commission staff.

For the reasons stated above, the

Commission has determined to adopt

amended Regulation 1.41(c)(1)(iii) as

proposed.
Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Rules and Regulations 10431

9Regulation 1.41(c) would apply to all non-term

and condition rule changes. Accordingly, the

provision would cover: (1) Rule changes that do not

require Commission approval under section

5a(a)(12)(A) of the Act and may be placed into effect

ten days after Commission receipt; (2) rule changes

that require approval under a provision of the Act

other than section 5a(a)(12)(A); (3) rule changes as

to which the submitting contract market requests

approval; and (4) changes which the Commission

determines to review for approval.

10As indicated in footnote 9 above, the

Commission would consider two types of rules

under proposed Regulation 1.41(c)—rules which

would receive Commission approval (based upon

either the submitter’s request, the Commission’s

discretion, or a statutory requirement) and rules

which could be placed into effect without

Commission approval. Under section 5a(a)(12)(A) of

the Act, the Commission must act upon rules which

may be placed into effect without Commission

approval within ten days of receipt. Absent the

consent of the submitting contract market, the only

way to extend the review period for such types of

rule submissions is if the Commission itself decides

to review the submission for approval, in which

case the Commission has 180 days to act on the rule

proposal.

11Under section 5a(a)(12)(A), the Commission

must ‘‘institute’’ disapproval proceedings within

180 days of receipt.

12Since January 1, 1995, the Commission has

published only the following three Regulation

1.41(c) submissions for public comment in the

Federal Register: (1) A CME proposal to revise

margin requirements for certain CME members (60

FR 54339 (October 23, 1995)); (2) a CME proposal

to establish a wholly-owned subsidiary which

would function as a market maker for certain CME

foreign exchange currency futures contracts traded

through the Globex system (61 FR 9678 (March 11,

1996)); and (3) a CME proposal to permit

commodity trading advisors to obtain Globex

terminals to trade for their proprietary accounts and

the accounts that they manage (61 FR 21162 (May

9, 1996)).

E. Regulation 1.41(c)(2)—Action Within

Ten Days

Proposed Regulation 1.41(c)(2)

provided that proposed non-term and

condition rule changes that required

approval or that could be placed into

effect without approval would ‘‘be

deemed approved or be placed into

effect, as appropriate, ten days after

Commission receipt,’’ unless the

Commission notified the submitting

contract market otherwise.

NFA in its comment letter requested

clarification as to the meaning of ‘‘as

appropriate’’ in this provision. Rule

changes submitted to the Commission

pursuant to proposed Regulation 1.41(c)

generally would be deemed approved or

be allowed to go into effect without

approval, as requested in the contract

market’s submission, at the conclusion

of the ten-day review period. In those

instances where a submitting contract

market did not request particular

treatment for a rule proposal or

requested improper treatment (i.e.,

requested that the Commission allow

into effect without approval a rule

change that required Commission

approval), the Commission would

determine what treatment would be

appropriate for the submission and

would deem approved those rules that

required approval and allow into effect

those rules that did not require

approval.9 The Commission’s use of the

term ‘‘as appropriate’’ in proposed

Regulation 1.41(c)(2) is intended to

cover these various possible

applications.

The Commission has determined to

adopt amended Regulation 1.41(c)(2) as

proposed.

F. Regulation 1.41(c)(3)—Action Within

45 or 75 days

Under proposed Regulation 1.41(c)(3),

any proposed rule that the Commission

retained for further review under

Regulation 1.41(c)(1)(iii) generally

would be ‘‘deemed approved or placed

into effect, as determined by the

Commission,’’ 45 days after Commission

receipt (or 75 days in the case of rules

that were published for comment in the

Federal Register).

NFA requested clarification as to the

meaning of ‘‘as determined by the

Commission’’ in proposed Regulation

1.41(c)(3). Any rule proposal that was

retained for the extended 45-day (or 75-

day) review period would necessarily be

considered for Commission approval.10

Under section 5a(a)(12)(A) of the Act,

rule proposals that are being considered

for approval must either be approved by

the Commission or be subjected to a

disapproval proceeding within 180 days

of Commission receipt.11 If the

Commission does not take either course

of action within 180 days, the proposed

rule ‘‘may be made effective by the

contract market until such time as the

Commission disapproves such rule.’’

By providing the Commission with

the discretion to ‘‘determine’’ either to

approve a proposed rule or to allow it

into effect at the end of the 45-day (or

75-day) review period, proposed

Regulation 1.41(c)(3) would replicate

the options currently available to the

Commission under section 5a(a)(12)(A)

of the Act at the end of the 180-day

review period. The proposed

rulemaking would simply compress the

time frame for this determination from

180 to 45 (or 75) days.

The CBT suggested in its comment

letter that the Commission does not

need to use the public comment process

for exchange rule proposals and,

therefore, the Commission’s proposed

rulemaking need not provide for an

extended review period for rules

published in the Federal Register. By

contrast, FIA stated that it was essential

to retain this process to provide an

opportunity for the public to comment

on rule proposals that raise novel or

complex issues.

The Commission notes that, under

section 5a(a)(12)(A) of the Act, it is

required to publish in the Federal

Register for public comment any

proposed rule of major economic

significance. The Commission also

publishes significant rule changes, from

time to time, when it believes that it is

in the public interest to do so.

The Commission rarely publishes

Regulation 1.41(c) proposals for

comment.12 Nonetheless, the

Commission believes that it is important

for it to solicit the views of persons and

entities that might be affected by

significant contract market rule

proposals. By providing a 30-day

extension of the review period for rules

that are published in the Federal

Register, the proposed rulemaking

would provide the Commission with a

reasonable amount of time to review

and analyze contract market rule

proposals in light of any comments

received. The Commission believes that

the ability to extend review to

accommodate public comment should

balance the need of contract markets to

adapt to new circumstances with the

Commission’s need to assure that the

public’s concerns and views are

considered in appropriate cases. Under

revised Regulation 1.41(c), the review

period for proposed rules which are

published for comment would still be

considerably shorter than the current

180-day statutory review period.

For the reasons stated above, the

Commission has determined to adopt

amended Regulation 1.41(c)(3) as

proposed.

G. Regulation 1.41(c)(4)—Disapproval

Proceedings

Under proposed Regulation 1.41(c)(4),

any Commission notice to a contract

market that the Commission intended to

commence disapproval proceedings

with respect to a proposed rule change

would be required to specify the nature

of the issues raised by the proposal and

the sections of the Act or the

Commission’s regulations that the rule

appeared to violate. Under the

provision, the submitting contract

market would have 15 days from the

issuance of the notification either to

withdraw the proposal or to request that

the Commission consider the proposal

pursuant to the regular 180-day review

procedures of section 5a(a)(12)(A) of the

Act. If the submitting contract market

chose neither of these options, the

Commission would commence

disapproval proceedings no later than
10432 Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Rules and Regulations

13A contract market also could choose to amend

its rule proposal and have it considered pursuant

to the 180-day review procedures of section

5a(a)(12)(A) of the Act. A contract market could, of

course, choose to withdraw its proposal and resubmit an amended version, thereby resetting the

time for review. 14See 47 FR 18618, 18619 (April 30, 1982).

30 days after its issuance of the

notification. Thus, under the proposed

rulemaking, disapproval proceedings

would commence no later than 75 days

after a rule’s submission (or 105 days in

the case of rules that were published for

comment in the Federal Register).

The Commission received a number

of comments asking for clarifications of

how proposed Regulation 1.41(c)(4)

would be applied.

NFA questioned whether a

Commission notice to a contract market

to institute disapproval proceedings

under Regulation 1.41(c)(4) should be

issued publicly. NFA believed that

public notification at this stage would

be inappropriate given that the

submitting contract market might

withdraw its proposal or grant the

Commission additional review time.

Under Regulation 1.41(c)(3), if the

Commission decided to institute a

disapproval proceeding for a rule

proposal, it would notify the submitting

contract market no later than 45 days

after the rule’s submission (or 75 days

if the rule was published for comment).

While the Commission would not

publicize this notice in the Federal

Register, it would be a matter of public

record under Regulation 145.2 and

Appendix A to the Part 145 Regulations,

unless subject to the confidentiality

restrictions of Regulation 145.5. If the

contract market did not withdraw its

proposal or extend the proposal’s

review period within 15 days of the

issuance of such notice, the Commission

would commence formal disapproval

proceedings consistent with the

procedures required by the Act and the

Commission’s regulations.13 When

commencing such proceedings, the

Commission would provide the

submitting contract market and any

other possibly interested parties with an

opportunity to present their views on

the matter to the Commission. However,

if the submitting contract market

withdrew the rule and offered to amend

it, the Commission would not

commence such a proceeding while the

contract market attempted to resolve

any regulatory issues.

NFA also commented that the

Commission and submitting contract

markets may want to extend any of

proposed Regulation 1.41(c)(4)’s various

deadlines for disapproval proceedings

in order to reach compromise

agreements on the disposition of rule

proposals. The Commission agrees with

NFA and believes that Regulation

1.41(c)’s deadlines, including

disapproval proceeding deadlines,

could be extended upon the mutual

agreement of the Commission and the

subject contract market.

FIA asked for clarification on

Regulation 1.41(c)(4)’s deadline for the

conclusion of a disapproval proceeding.

Upon the commencement of a

disapproval proceeding under this

provision, the Commission would

follow the procedures currently

mandated by section 5a(a)(12)(A) of the

Act. That provision states that the

Commission must ‘‘conclude a

disapproval proceeding with respect to

any rule within one year after receipt or

within such longer period as the

contract market may agree to.’’ If such

a proceeding is not concluded within

the prescribed time, the rule proposal

may be deemed effective until such time

as the Commission disapproves the rule.

For the reasons stated above, the

Commission has determined to adopt

Regulation 1.41(c)(4) with one

clarification. Under the final

rulemaking, a contract market would

have 15 days from the receipt of a

disapproval proceedings notice to

withdraw or to extend the review period

for its proposal. Under the proposed

rulemaking, a contract market had to

respond within 15 days from the date of

issuance of such a notice.

IV. Conclusion

The Commission has determined to

adopt Regulation 1.41(c) with three

modifications from the original

proposed rulemaking. Specifically,

Regulation 1.41(c)(1)(i)(F) has been

revised to require that contract markets

identify any provisions of the Act or the

Commission’s regulations that may

require amendment or interpretation in

order to implement a proposed rule

change. In addition, the Commission

has deleted proposed Regulation

1.41(c)(1)(i)(G) and its requirement that

contract markets expressly indicate in

their submissions whether they are

requesting rule approval. Finally,

Regulation 1.41(c)(4) has been revised to

clarify when contract markets must

respond to notices to institute

disapproval proceedings.

Although Commission Regulation

1.41(c), by its own terms, applies only

to Commission review of contract

market rule proposals, the Commission

will propose a regulation with similar

rule review procedures for registered

futures associations in the near future.

In the interim, the Commission will

abide by the requirements of Regulation

1.41(c) when reviewing rule proposals

from registered futures associations.

In formulating these new rule

amendments, the Commission has

attempted to balance the objective of

meaningful review of contract market

rule proposals under the Act with the

contract markets’ reasonable desire to

implement their proposals as

expeditiously as possible. Upon the

implementation of amended Regulation

1.41(c), the Commission will continue

to monitor the rule review process

closely and, based upon its experience,

may consider further refinements to

these procedures in the future.

Amended Commission Regulation

1.41(c) will become effective 30 days

after its publication in the Federal

Register. All contract market rule

proposals submitted to the Commission

after that date will be subject to

Regulation 1.41(c)’s new review

procedures. Contract market rules that

are pending with the Commission at the

time of amended Regulation 1.41(c)’s

effective date will continue to be subject

to Regulation 1.41’s current review

procedures.

V. Related Matters

A. Regulatory Flexibility Act

The Regulatory Flexibility Act

(‘‘RFA’’), 5 U.S.C. 601 et seq., requires

that agencies, in promulgating rules,

consider the impact of those rules on

small businesses. The Commission has

previously determined that contract

markets are not ‘‘small entities’’ for

purposes of the RFA.14 This rulemaking

establishes streamlined procedures for

the review of contract market proposed

non-term and condition rule changes.

Accordingly, the Chairperson, on behalf

of the Commission, hereby certifies,

pursuant to section 3(a) of the RFA, 5

U.S.C. 605(b), that the action taken

herein will not have a significant

economic impact on a substantial

number of small entities.

B. Agency Information Activities:

Proposed Collection; Comment Request

The Paperwork Reduction Act of 1980

(‘‘PRA’’), 44 U.S.C. 3501 et seq., 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.

While this rulemaking has no burden,

the group of rules (3038–0022) of which

it is a part has the following burden:

Average burden hours per response—

3,546.26

Number of respondents—10,971.00
Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Rules and Regulations 10433

Frequency of response—On Occasion

Copies of the information collection

submission to Office of Management

and Budget are available from Gerald P.

Smith, Clearance Officer, Commodity

Futures Trading Commission, Three

Lafayette Centre, 1155 21st Street, NW.,

Washington, DC 20581. Telephone:

(202) 418–5160.

List of Subjects in 17 CFR Part 1

Commodity exchanges, Contract

markets, Rule review procedures.

In consideration of the foregoing, and

based on the authority contained in the

Commodity Exchange Act and, in

particular, sections 4c, 5, 5a, 6 and 8a

thereof, 7 U.S.C. 6c, 7, 7a, 8 and 12a, the

Commission hereby amends title 17,

chapter I, part 1 of the Code of Federal

Regulations as follows:

PART 1—GENERAL REGULATIONS

UNDER THE COMMODITY EXCHANGE

ACT

1. The authority citation for part 1

continues to read as follows:

Authority: 7 U.S.C. 1a, 2, 2a, 4, 4a, 6, 6a,

6b, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6j, 6k, 6l, 6m,

6n, 6o, 6p, 7, 7a, 8, 9, 12, 12a, 12c, 13a, 13a1, 16, 16a, 19, 21, 23, and 24.

2. Section 1.41(c) is revised to read as

follows:

§ 1.41 Contract market rules; submission

of rules to the Commission; exemption of

certain rules.

* * * * *

(c) Rules that do not relate to terms

and conditions. (1)(i) Except as

provided in paragraphs (d) and (f) of

this section (exempt or temporary

emergency rules), each contract market

shall submit to the Commission

pursuant to section 5a(a)(12)(A) of the

Act prior to the proposed effective dates

all proposed rules that do not relate to

terms and conditions. One copy of the

rule shall be furnished to the

Commission at its Washington, DC

headquarters, and one copy shall be

transmitted by the contract market to

the regional office of the Commission

having local jurisdiction over the

contract market. Each such submission

under this paragraph (c) shall, in the

following order:

(A) State that it is being submitted

pursuant to Commission regulation

1.41(c);

(B) Set forth the text of the proposed

rule (in the case of any change in,

addition to, or deletion from any current

rule of the contact market, the current

rule shall be fully set forth, with

brackets used to indicate words to be

deleted and underscoring used to

indicate words to be added);

(C) Describe the proposed effective

date of the proposed rule and any action

taken or anticipated to be taken to adopt

the proposed rule by the contract

market, or by the governing board

thereof or any committee thereof, and

cite the rules of the contract market

which authorize the adoption of the

proposed rule;

(D) Explain the operation, purpose,

and effect of the proposed rule,

including, as applicable, a description

of the anticipated benefits to market

participants or others, any potential

anticompetitive effects on market

participants, or others, how the rule fits

into the contract market’s scheme of

self-regulation, information which

demonstrates that the proposed rule is

not inconsistent with the policies and

purposes of the Act, and any other

information which may be beneficial to

the Commission in analyzing the

proposed rule. If a proposed rule affects,

directly or indirectly, the application of

any other rule of the contract market, set

forth the pertinent text of any such rule

and describe the anticipated effect;

(E) Note and briefly describe any

substantive opposing views expressed

by governing board members, members

of the contract market, or others with

respect to the proposed rule which were

not incorporated into the proposed rule

prior to its submission to the

Commission. Any such description also

should identify the membership interest

categories, as that term is defined by

Commission regulation 1.64(a)(4), of

persons who were opposed to the

proposed rule; and,

(F) Identify any sections of the Act or

the Commission’s regulations that the

Commission may need to amend or

interpret in order to approve or allow

into effect the proposed rule. To the

extent that such an amendment or

interpretation is necessary to

accommodate a proposed rule, the

contract market must provide a

reasoned analysis supporting its

submission.

(ii) The Commission may remit to the

contract market, with an appropriate

explanation where practicable, and not

accept for review any rule submission

that does not comply with the form and

content requirements of paragraphs

(c)(1)(i) (A) through (F) of this section.

(iii) The Commission may notify the

contract market within ten days after

receipt of a submission filed pursuant to

paragraph (c)(1) of this section, that the

proposed rule raises novel or complex

issues which require additional time for

review or is of major economic

significance and therefore that the

review period has been extended as

specified in paragraph (c)(3) of this

section. This notification will briefly

specify the nature of the issues for

which additional time for review is

required.

(2) All proposed contract market rules

submitted for review under paragraph

(c) of this section may be deemed

approved or be placed into effect, as

appropriate, ten days after Commission

receipt (or at such earlier time as may

be determined by the Commission)

unless:

(i) The Commission notifies the

contract market that the submission

does not comply with the form and

content requirements of paragraph

(c)(1)(i) of this section;

(ii) The Commission notifies the

contract market that the review period

for the submission has been extended

pursuant to paragraph (c)(1)(iii) of this

section; or

(iii) The contract market agrees to

another, specified review period.

(3) Any rule for which the

Commission extends the review period

pursuant to paragraph (c)(1)(iii) of this

section may be deemed approved or be

placed into effect, as determined by the

Commission, forty-five days after

Commission receipt of such rule or

seventy-five days after Commission

receipt in the case of rules that have

been published for comment in the

Federal Register (or at such earlier time

as may be determined by the

Commission) unless the Commission

notifies the contract market that:

(i) The submission, including any

supplementary materials and in

consideration of any comments from the

public or other government agencies,

does not comply with the form and

content requirements of paragraph

(c)(1)(i) of this section; or

(ii) The Commission intends to

institute a proceeding to disapprove the

rule pursuant to the procedures

specified in section 5a(a)(12)(A) of the

Act.

(4) A notice of intention to commence

a disapproval proceeding issued

pursuant to paragraph (c)(3) of this

section will:

(i) Identify the nature of the issues

raised by the proposed rule and the

specific sections of the Act or the

Commission’s regulations that the rule

appears to violate; and,

(ii) State that the Commission may

commence disapproval proceedings for

the proposed rule within thirty days

after the Commission’s issuance of the

notification, unless within fifteen days

of receipt of such notice the contract

market:

(A) Withdraws the rule, or

(B) Requests the Commission to

review the rule pursuant to the one
10434 Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Rules and Regulations

1See, Futures Trading Act of 1921, Pub. L. 67–

66, 42 Stat. 187 (1921). Designation as a contract

market under the 1921 Act was contingent upon a

board of trade’s meeting specified statutory criteria,

including providing for the prevention of

manipulative activity. Although the

constitutionality of this Act was successfully

challenged as an improper use of the Congressional

taxing power in Hill v. Wallace, 259 U.S. 44 (1922),

all subsequent legislation regulating the futures

industry followed this pattern.

2Prior to 1974, the Act defined ‘‘commodity’’ by

specific enumeration. Accordingly, new contracts

that were not so enumerated were unregulated. The

definition of commodity periodically would be

updated to include additional commodities in

which trading had commenced on those exchanges

which traded other regulated contracts. For

example, livestock and livestock products were

added to the Act’s definition of ‘‘commodity’’ as

part of the 1968 amendments to the Act, after such

contracts had already begun trading on the Chicago

Mercantile Exchange. Pub. L. 90–258 section 1(a),

49 Stat. 1491 (1968).

Other futures exchanges, including the

Commodity Exchange, Inc. and the former Coffee

and Sugar and Cocoa exchanges, operated wholly

outside of the regulatory scheme.

hundred and eighty day review

procedures set forth in section

5a(a)(12)(A) of the Act.

* * * * *

Issued in Washington, D.C. on February 27,

1997, by the Commission.

Jean A. Webb,

Secretary of the Commission.

[FR Doc. 97–5568 Filed 3–6–97; 8:45 am]

BILLING CODE 6351–01–P

17 CFR Parts 1 and 5

Revised Procedures for Commission

Review and Approval of Applications

for Contract Market Designation and of

Exchange Rules Relating to Contract

Terms and Conditions

AGENCY: Commodity Futures Trading

Commission.

ACTION: Final rulemaking.

SUMMARY: On November 22, 1996, the

Commodity Futures Trading

Commission (‘‘Commission’’) proposed

rules amending its procedures relating

to the review and approval of

applications for contract market

designation and proposed exchange rule

amendments relating to contract terms

and conditions. Based upon its

consideration of the comments received

in response to its Notice of Proposed

Rulemaking, 61 FR 59386 (November

22, 1996), and upon its independent

analysis, the Commission is

promulgating new rule 5.1.

Rule 5.1 establishes fast-track

procedures for Commission review of

exchange applications for contract

market designation as an alternative to

the current review procedures. Under

these alternative procedures,

applications for designation of cashsettled and other specified futures and

option contracts will be deemed to be

approved ten days—and all others,

forty-five days—after receipt, unless the

exchange is notified otherwise. The

final rules have been modified, in

response to public comment, by

including within the ten-day category

proposed option contracts based upon

futures contracts that are already

designated and by confirming explicitly

within the rule that exchanges may

modify applications nonsubstantively

under the fast-track review procedures.

The Commission also is amending

rule 1.41, as proposed, to provide an

alternative fast-track review of proposed

amendments to contract terms or

conditions. These procedures are

similar to those for contract market

designations and include both ten-day

and forty-five-day review periods. These

review periods can be extended for one

thirty-day period in appropriate

instances. In a companion notice

published separately in the Federal

Register, the Commission also is

adopting fast-track procedures relating

to the review of proposed exchange

rules which do not relate to contract

terms or conditions.

EFFECTIVE DATE: April 7, 1997.

FOR FURTHER INFORMATION CONTACT: Paul

M. Architzel, Chief Counsel, Division of

Economic Analysis, Commodity Futures

Trading Commission, Three Lafayette

Centre, 1155 21st Street, N.W.,

Washington, D.C. 20581, (202) 418–

5260, or electronically,

[PArchitzel@cftc.gov].

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory

Requirements for Commission

Designation of Proposed Contract

Markets

The requirement that boards of trade

meet specified conditions in order to be

designated as contract markets has been

a fundamental tool of federal regulation

of commodity futures exchanges for the

past seventy-five years.1 Prior to the

1974 amendments to the Commodity

Exchange Act, 7 U.S.C. 1 et seq. (‘‘Act’’),

however, the statutory scheme did not

require the Commodity Exchange

Authority (‘‘CEA’’), the Commission’s

predecessor agency, to approve in

advance the trading of all new futures

contracts,2 nor did it require agency

approval of exchange rules before they

became effective. Rather, exchange rules

amending the terms and conditions of

futures contracts were subject only to

disapproval after becoming effective.

See, Pub. L. 90–258, sec. 23, 82 Stat. 33

(1968).

The 1974 amendments to the Act

rejected that approach. Instead, as part

of Congress’ overall intent to strengthen

federal regulatory oversight of the

futures industry, the 1974 amendments

provided for a meaningful government

review of all new futures contracts

before trading could begin and of

proposed amendments to the terms or

conditions of existing contracts. See, H.

Rep. No. 93–975, 93d Cong., 2d Sess. at

78, 82 (1974).

Subsequently, Congress reinforced

this determination by enhancing the

opportunity for public participation in

the Commission’s review procedures.

As part of the 1978 amendments to the

Act, Congress added the provision

requiring a public comment period for

economically significant proposed

exchange rules. That amendment to

section 5a(a)(12) of the Act was offered

from the floor during debate in the

House of Representatives. In offering

this amendment, Representative AuCoin

reasoned that

[m]any of the notifications [of changes to

exchange rules] approved by this

Commission are technical and rather

noncontroversial.

However, there are a number of proposed

rule changes that are controversial because of

their expected impact on the way a particular

commodity is traded or on the broader effects

that a change may bring about in the

production and distribution of that

commodity.

124 Cong. Rec. H7312 (July 26, 1978).

Over the years, the Commission has

demonstrated flexibility in

implementing its regulatory mandate to

review and approve new contracts and

amendments to existing contracts. Based

upon its administrative experience, the

Commission periodically has revised

and updated its procedures to provide

exchanges with more specific criteria for

meeting the contract market designation

requirements; to reflect new

developments in futures trading—such

as the introduction of financial futures,

futures on aggregates or indices of

securities and cash settlement as a

substitute for physical delivery; and,

where appropriate, to lessen the burden

on applicants by reducing the

information required and streamlining

the form of application.

In this regard, Guideline No. 1, 17

CFR part 5, appendix A, which provides

guidance on the information to be

included in designation applications

and on the criteria for meeting the

statutory designation requirements, was

last amended in January 1992. The 1992

amendment substantially reduced and

streamlined the guideline’s