17700 Federal Register / Vol. 62, No. 70 / Friday, April 11, 1997 / Rules and Regulations

1See 62 FR 10427. That notice announced the

adoption of amendments to Commission

Regulations 1.41(a) and 1.41(b). These amendments,

which revise the procedures for the review of

contract market rules, will become effective on

April 7, 1997.

2Commission Regulation 1.41(a)(1) defines ‘‘rule’’

of a contract market to mean:

* * * any constitutional provision, article of

incorporation, bylaw, rule, regulation, resolution,

interpretation, stated policy, or instrument

corresponding thereto, in whatever form adopted,

and any amendment or addition thereto or repeal

thereof, made or issued by a contract market, or by

the governing board thereof or any committee

thereof.

3Commission Regulation 1.41(a)(2) defines

‘‘terms and conditions’’ to mean:

* * * any definition of the trading unit or the

specific commodity underlying a contract for future

delivery of a commodity or commodity option

contract, specification of settlement or delivery

standards and procedures, and establishment of

buyers’ and sellers’ rights and obligations under the

contract. Terms and conditions shall be deemed to

include provisions relating to the following:

(i) Quality or quantity standards for a commodity

and any applicable exemptions or discounts;

(ii) Trading hours, trading months and the listing

of contracts:

(iii) Minimum and maximum price limits and the

establishment of settlement prices;

(iv) Position limits and position reporting

requirements;

(v) Delivery points and locational price

differentials;

(vi) Delivery standards and procedures, including

alternatives to delivery and applicable penalties or

sanctions for failure to perform;

(vii) Settlement of the contract;

(viii) Payment or collection of commodity option

premiums or margins.

COMMODITY FUTURES TRADING

COMMISSION

17 CFR Part 1

Contract Market Rule Review

Procedures

AGENCY: Commodity Futures Trading

Commission.

ACTION: Final rules.

SUMMARY: The Commodity Futures

Trading Commission (‘‘Commission’’) is

amending Regulation 1.41a to revise

certain procedures relating to the review

of contract market rules. Related

amendments revising the procedures

and time periods applicable to the

Commission’s review of contract market

rules previously have been adopted.1

The instant amendments revise

Regulation 1.41a, which governs the

authority delegated to the Director of the

Division of Trading and Markets and the

Director of the Division of Economic

Analysis for purposes of processing

certain contract market rule

submissions. Specifically, the instant

amendments revise Regulation 1.41a to

conform to the procedures and time

periods previously adopted by the

Commission. The instant amendments

also include several clarifying revisions

of Regulation 1.41a.

EFFECTIVE DATE: April 11, 1997.

FOR FURTHER INFORMATION CONTACT:

Clarence Sanders, Attorney, Division of

Trading and Markets, Commodity

Futures Trading Commission, Three

Lafayette Centre, 1155 21st Street NW,

Washington, D.C. 20581. Telephone:

(202) 418–5484.

SUPPLEMENTARY INFORMATION:

I. Introduction

Section 5a(a)(12)(A) of the

Commodity Exchange Act (‘‘Act’’), 7

U.S.C. § 7a(a)(12)(A), provides that all

rules 2 of a contract market that relate to

terms and conditions 3 in futures or

options contracts traded on or subject to

the rules of a contract market must be

submitted to the Commission for its

prior approval. Section 5a(a)(12)(A)

further requires that contract markets

submit all other rules to the

Commission. Such other rules may be

made effective ten days after

Commission receipt unless, within the

ten-day period, the Exchange requests

Commission approval or the

Commission notifies the Exchange that

it intends to review the rules for

approval.

As noted above, the Commission

recently revised the procedures under

which it conducts reviews of contract

market rules. These revisions generally

streamline the procedures and shorten

the review periods applicable to the

Commission’s review of contract market

rules. The Commission is now revising

its rules applicable to the delegation of

authority to the Director of the Division

of Trading and Markets and the Director

of the Division of Economic Analysis

(collectively, ‘‘the Directors’’) as set out

in Commission Regulation 1.41a.

Specifically, Regulation 1.41a delegates

to the Directors the authority to make

certain decisions regarding rule

submissions. The primary effect of the

instant amendments is to delegate

additional authority to the Directors in

order to apply the revised procedures

and time periods for Commission

review of contract market rules in an

effective manner.

II. Amendments to Regulation 1.41a

A. Regulation 1.41a(2)(ii)—Notification

That Rules Require Approval

Several provisions of the Act other

than Section 5a(a)(12)(A) require

Commission approval of contract market

rules: Section 4b(b) (crossing of orders);

Section 4c(a) (exchange of futures for

physicals, transfer trades and office

trades); and Section 4f(b) (financial

requirements for futures commission

merchants). Paragraph (a)(2) is being

amended to state that the Directors have

delegated authority to determine and to

notify a contract market that a rule

submitted pursuant to Section

5a(a)(12)(A) of the Act and Regulation

1.41(c) for implementation without

Commission approval constitutes a rule

that requires prior Commission approval

pursuant to a specific Section of the Act

or under a Commission regulation other

than Regulation 1.41(b). Current

Regulation 1.41a delegates to the

Directors the authority to remit such a

rule but does not expressly state that the

Directors may notify a contract market

of their determination to review such

rule for Commission approval.

B. Regulation 1.41a(3) (i) and (ii)—

Notification That Rules May be Placed

into Effect Without Approval

Currently, paragraph (a)(3) states that

the Directors may determine whether

rules submitted under Regulation

1.41(c) do not require prior Commission

approval under Section 5a(a)(12)(A) of

the Act and Regulation 1.41(b) and that

such rules may become effective prior to

the expiration of the ten day period

following the Commission’s receipt of

such rules. Under the amendments,

paragraph (a)(3) is being divided into

three subparagraphs in order to

incorporate the revised procedures and

time periods previously adopted by the

Commission for the review of contract

market rules.

New paragraph (a)(3)(i), which

includes the pre-existing provisions of

paragraph (a)(3), is being amended to

provide that the Directors may notify a

contract market, as well as determine,

that rules submitted for implementation

without Commission approval do not

require such approval under either

Regulation 1.41(b) or 1.41(c). This

change simply incorporates the

condition that contract market rules that

do not relate to terms and conditions,

but that require approval under another

provision of the Act or regulations, are

to be submitted pursuant to Regulation

1.41(c) under the Commission’s revised

procedures for reviewing contract

market rules instead of Regulation

1.41(b), as was formerly the case.

New paragraph (a)(3)(ii) provides that

the Directors may determine and notify

a contract market that rules submitted

for Commission approval under

Regulation 1.41(c) do not require prior

Commission approval under Section

5a(a)(12)(A) of the Act and Regulation

1.41(b) or Regulation 1.41(c) and may be

made effective at the expiration of the

applicable review period. As in the case

of paragraph (a)(3)(i), paragraph (a)(3)(ii)
Federal Register / Vol. 62, No. 70 / Friday, April 11, 1997 / Rules and Regulations 17701

4This amendment of Regulation 1.41a, combined

with the Commission’s revised contract market rule

review procedures, authorize the Directors to make

the determination to notify a contract market that

a rule voluntarily submitted by a contract market

for Commission approval could be implemented

without Commission approval at the expiration of

ten, 45, or 75 days, whichever was applicable.

Absent such amendment, the contract market rule

could not be implemented absent Commission

approval until the expiration of the 180 day period

following Commission receipt of the rule.

5A flexibility analysis would not be required in

any case in this matter, since the amendments

would affect contract markets, which the

Commission previously has determined are not

‘‘small entities’’ for purposes of the RFA. Thus,

these rule amendments would not have a significant

economic impact on a substantial number of ‘‘small

entities.’’ See § 605(b).

is being added to Regulation 1.41a to

incorporate the requirement that rules

which do not relate to terms and

conditions, but which nonetheless

require Commission approval under

another provision of the Act or

regulations, must be submitted pursuant

to Commission Regulation 1.41(c).

More significantly, paragraph (a)(3)(ii)

delegates to the Directors the authority

to determine whether a rule submitted

for Commission approval, but which

neither the Act nor the Commission’s

regulations require to be reviewed for

approval prior to implementation,

should be implemented without

Commission approval at the expiration

of the applicable review period.

Previously, absent Commission

approval, such implementation was

only available at the expiration of 180

days following Commission receipt of

the contract market rule. Thus, the

amendments enable the Directors to

make this determination in conformity

with the Commission’s previously

revised review procedures and time

periods, prior to the expiration of the

180 day period.4

C. Regulation 1.41a(3)(iii)—Notification

that Rules Raise Novel or Complex

Issues

New paragraph (a)(3)(iii) delegates

authority to the Directors to administer

those contract market rules submitted

for Commission approval under

Regulation 1.41(c) but which raise novel

or complex issues, or are of major

economic significance. This amendment

simply provides that the Directors may

determine and notify a contract market

that the review period for the rule

submission is being extended per the

applicable review periods set out in

Regulation 1.41(c)(1)(iii).

III. Related Matters

A. Notice and Comment

The Administrative Procedure Act, 5

U.S.C. § 553(b), requires in most

instances that a notice of proposed

rulemaking be published in the Federal

Register and that opportunity for

comment be provided when an agency

promulgates new regulations. Section

553(b) sets forth an exception, however,

for rules of agency organization,

procedure, or practice. The instant

amendments apply expedited

procedures to the authority delegated to

the Directors of the Divisions of Trading

and Markets and Economic Analysis for

the review of certain contract market

rules. The Commission has determined

that these amendments relate to internal

Commission procedure and therefore

that notice and comment is not

required.

Section 553(b) also sets forth an

exception to the requirement of notice

and opportunity for public comment

when the Commission for good cause

finds such notice and public comment

are unnecessary or contrary to the

public interest. Section 553(d) provides

that publication of a substantive rule

shall be made not less than thirty days

before its effective date unless as

otherwise provided by the agency for

good cause found. The Commission

finds that notice and public comment

on the rule changes announced herein

are unnecessary and they can be made

effective immediately because the

changes do not limit any person’s

substantive rights and do not establish

any new obligations under the Act. To

the contrary, these changes simplify

compliance with the Act by delegating

authority to the Directors to process

contract market rules according to

standards which shorten the time

periods applicable to the review of

contract market rules and which have

been previously adopted following

notice and comment.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act

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

that agencies, in adopting rules,

consider the impact of those rules on

small businesses. The RFA defines the

term ‘‘rule’’ to mean ‘‘any rule for which

the agency publishes a general notice of

proposed rulemaking pursuant to [5

U.S.C.] § 553(b).’’ As noted above,

however, § 553(b) does not require that

the Commission publish a notice of

proposed rulemaking for the

amendments to Regulation 1.41a, and a

flexibility analysis of these amendments

is therefore not required. See § 601(2).

See also §§ 603 and 604.5

C. Paperwork Reduction Act

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 the rule amendments adopted

herein have no burden, the group of

rules (3038–0022) of which this is a part

has the following burden:

Average burden hours per

response.

3,546.26

Number of respondents ...... 10,971.00

Frequency of response ....... On Occasion

Persons wishing to comment on the

information that would be required by

the proposed rulemaking should contact

David Rostker, Office of Management

and Budget (‘‘OMB’’), Room 3228,

NEOB, Washington, D.C. 20503, (202)

395–7340. Copies of the information

collection submission to OMB are

available from Gerald P. Smith,

Clearance Officer, Commodity Futures

Trading Commission, Three Lafayette

Center, 1155 21st Street N.W.,

Washington D.C. 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

pursuant to 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, 13a–

1, 16, 16a, 19, 21, 23, and 24.

2. Section 1.41a is amended by

revising paragraphs (a)(2) and (a)(3) to

read as follows:

§ 1.41a Delegation of authority to the

Directors of the Division of Trading and

Markets and the Division of Economic

Analysis to process certain contract market

rules.

(a) * * *

(2) Pursuant to §§ 1.41(b) or 1.41(c) to

determine, and to notify a contract

market, that:

(i) Pursuant to § 1.41(b), a rule

submitted pursuant to section

5a(a)(12)(A) of the Act and § 1.41(c)

relates to terms and conditions, as

defined in § 1.41(a)(2);
17702 Federal Register / Vol. 62, No. 70 / Friday, April 11, 1997 / Rules and Regulations

(ii) Pursuant to § 1.41(c), a rule

submitted pursuant to section

5a(a)(12)(A) of the Act and § 1.41(c) for

implementation without Commission

approval constitutes a rule that requires

prior Commission approval pursuant to

a specific section of the Act or

Commission regulations;

(3) Pursuant to § 1.41(c) to determine,

and to notify a contract market, that:

(i) Rules submitted for

implementation without Commission

approval under § 1.41(c) do not require

prior Commission approval under

section 5a(a)(12)(A) of the Act and

§ 1.41(b) or § 1.41(c) and that such rules

may become effective prior to the

expiration of the ten day period

following the receipt of such rules by

the Commission;

(ii) Rules submitted for Commission

approval under § 1.41(c) do not require

prior Commission approval under

section 5a(a)(12)(A) of the Act and

§ 1.41(b) or § 1.41(c) and may be made

effective at the expiration of the

applicable review period;

(iii) Rules submitted for Commission

approval under § 1.41(c) raise novel or

complex issues, or are of major

economic significance, and that the

review period has been extended

pursuant to § 1.41(c)(1)(iii); and

* * * * *

Issued in Washington, D.C., on April 7,

1997, by the Commission.

Jean A. Webb,

Secretary of the Commission.

[FR Doc. 97–9398 Filed 4–10–97; 8:45 am]

BILLING CODE 6351–01–P

COMMODITY FUTURES TRADING

COMMISSION

17 CFR Part 11

Delegation of Authority To Conduct

Investigations in Assistance of Foreign

Futures Authorities

AGENCY: Commodity Futures Trading

Commission.

ACTION: Final rules.

SUMMARY: The Commission is amending

certain provisions of the Commission’s

Regulations to formalize the authority of

the Director of the Division of

Enforcement to conduct investigations

in assistance of foreign futures

authorities. The purpose of the

amendments is to set forth agency

procedure and practice with respect to

conducting such investigations.

DATES: Effective: April 11, 1997.

FOR FURTHER INFORMATION CONTACT:

Ethiopis Tafara, International

Operations Attorney, Division of

Enforcement, US Commodity Futures

Trading Commission, Three Lafayette

Centre, 1155 21st Street, NW,

Washington, DC 20581. Telephone (202)

418–5362.

SUPPLEMENTARY INFORMATION: Sections

6(c) and 8 of the Commodity Exchange

Act as amended, 7 U.S.C. §§ 12, 15

(1994), authorize the Commission to

investigate violations of the Act and

Commission regulations and orders. Part

11 of the Commission Rules delegates

this authority to the Division of

Enforcement. In the Futures Trading

Practice Act of 1992, Pub. L. 102–546,

106 Stat. 3590, Congress added Section

12(f) of the Commodity Exchange Act, 7

U.S.C. § 16(f) (1994), authorizing the

Commission to conduct investigations

in assistance of foreign futures

authorities. The Commission has

amended Part 11 of the Commission

Rules formally to authorize the Director

of the Division of Enforcement to

conduct these investigations. The

amended Rules are not substantive in

content and simply set forth agency

procedure and practice with respect to

investigations conducted in assistance

of foreign futures authorities.

Consequently, the Commission is not

seeking public comment. Similarly, the

Commission finds good cause to make

these amendments effective

immediately.

List of Subjects in 17 CFR Part 11

Investigations.

PART 11—[AMENDED]

For the reasons set forth above, Part

11 of Title 17 of the Code of Federal

Regulations is amended as follows:

1. The authority citation for Part 11 is

revised as follows:

Authority: 7 U.S.C. 4a(j), 9 and 15, 12,

12a(5), 12(f).

2. Section 11.1 is revised as follows:

§ 11.1 Scope and applicability of rules.

The rules of this part apply to

investigatory proceedings conducted by

the Commission or its staff pursuant to

Sections 6(c) and 8 and 12(f) of the

Commodity Exchange Act, as amended,

7 U.S.C. 9 and 15 and 12 and 16(f)

(1994), to determine whether there have

been violations of that Act, or the rules,

regulations or orders adopted

thereunder, or, in accordance with the

provisions of Section 12(f) of the Act,

whether there have been violations of

the laws, rules or regulations relating to

futures or options matters administered

or enforced by a foreign futures

authority, or whether an application for

designation or registration under the Act

should be denied.

3. Section 11.2, paragraph (a) is

revised as follows:

§ 11.2 Authority to conduct investigations.

(a) The Director of the Division of

Enforcement and members of the

Commission staff acting pursuant to his

authority and under his direction may

conduct such investigations as he deems

appropriate to determine whether any

persons have violated, are violating, or

are about to violate the provisions of the

Commodity Exchange Act, as amended,

or the rules, regulations or orders

adopted by the Commission pursuant to

that Act, or, in accordance with the

provisions of Section 12(f) of the Act,

whether any persons have violated, are

violating or are about to violate the

laws, rules or regulations relating to

futures or options matters administered

or enforced by a foreign futures

authority, or whether an applicant for

registration or designation meets the

requisite statutory criteria.

* * * * *

Issued in Washington, DC on March 28,

1997, by the Commission.

Jean A. Webb,

Secretary of the Commission.

[FR Doc. 97–9399 Filed 4–10–97; 8:45 am]

BILLING CODE 6351–01–M

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 100

[CGD07–97–005]

RIN 2115–AE46

Special Local Regulations; Charleston

to Bermuda Sailboat Race, Charleston,

SC

AGENCY: Coast Guard, DOT.

ACTION: Temporary final rule.

SUMMARY: The Coast Guard is

establishing temporary special local

regulations for the Charleston to

Bermuda Sailboat Race. The race will

start on May 11, 1997, between the

hours of 11 a.m. and 3 p.m. Eastern

Daylight Time (EDT) near Waterfront

Park on the Charleston Peninsula, and

will transit out to sea by the South,

Mount Pleasant, and Fort Sumter

Ranges in Charleston Harbor. The nature

of the event and the closure of portions

of Charleston Harbor creates an extra or

unusual hazard on the navigable waters

of Charleston Harbor, Charleston, SC.

These regulations are necessary for the

safety of life on the navigable waters

during the event.