Federal Register / Vol. 63, No. 73 /Thursday, April 16, 1998 /Rules and Regulations 18819

1Such disclosures would be made to further the

goal of the comment period. That goal is to inform

the Commission’s judgment, and not to confer any

substantive rights on submitters. Letter, Donald S.,

Clark, Secretary (by direction of the Commission),

to Robert A. Hammond, Esq., Re: Institute Merieux,

S.A. Docket No. C–3301 (April 20, 1992). Cf.

General Motors Corp., 103 F.T.C. 58, 63 (1984)

(explaining rationale for the public comment period

on proposed settlements under Rule 2.34).

with the applicable alert service bulletin.

When an operator’s entire fleet has had all

DFFN’s replaced with standard fuel nozzles,

the AFM revision required by paragraph (a)

of this AD may be removed from the AFM

and the placard required by paragraph (b)(1)

of this AD may be removed from each

airplane.

New Requirements of This AD

(c) If a DFFN is installed on any airplane

in a specific operator’s fleet, accomplish the

requirements of paragraphs (c)(1) and (c)(2)

of this AD; in accordance with either Boeing

Alert Service Bulletin 747–11A2052 (for

Model 747 series airplanes) or Boeing Alert

Service Bulletin 767–11A0031 (for Model

767 series airplanes), both dated September

11, 1997; as applicable.

(1) Within 14 days after the effective date

of this AD, all airplanes in a specific

operator’s fleet must revise Section 1 of the

Limitations Section of the FAA-approved

AFM to include the following procedures.

This may be accomplished by inserting a

copy of this AD in the AFM.

(i) Revise paragraph 1 of the Engine Fuel

System section to read as follows: ‘‘The fuel

designation is General Electric (GE)

Specification D50TF2, as revised. Fuel

conforming to commercial jet fuel

specification ASTM–D–1655, Jet A, and Jet

A–1 are authorized for unlimited use in this

engine. Fuels conforming to MIL–T–5624

grade JP–5 and MIL–T–83113 grade JP–8 are

acceptable alternatives. The engine will

operate satisfactorily with any of the

foregoing fuels or any mixture thereof.’’ And,

(ii) Add the following sentence to

paragraph 2 of the Engine Fuel System

section: ‘‘The use of Jet B and JP–4 fuel is

prohibited.’’

(2) Within 30 days after the effective date

of this AD, all airplanes in a specific

operator’s fleet must accomplish the actions

required by paragraph (c)(2)(i) or (c)(2)(ii) of

this AD, as applicable.

(i) Remove the existing placard on the door

of the fueling control panel and replace it

with a new placard that restricts the use of

JP–4 and Jet B fuels (wide cut fuels), in

accordance with the applicable alert service

bulletin. Or

(ii) Remove the DFFN, and replace it with

a standard fuel nozzle, in accordance with

the applicable alert service bulletin. When an

operator’s entire fleet has had all DFFN’s

replaced with standard fuel nozzles, the AFM

revision required by paragraphs (c)(1)(i) and

(c)(1)(ii) of this AD may be removed from the

AFM, and the new placard required by

paragraph (c)(2)(i) of this AD may be

removed from each airplane.

(d) Except as provided by paragraph (e) of

this AD, if a DFFN is not installed on any

airplane in a specific operator’s fleet, no

further action is required by this AD.

(e) As of the effective date of this AD, no

person shall install any DFFN having General

Electric part number 9331M72P33,

9331M72P34, or 9331M72P41 on any

airplane unless the requirements specified by

paragraphs (c)(1)(i), (c)(1)(ii), and (c)(2)(i) of

this AD have been accomplished for the

operator’s entire fleet.

(f) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used if approved by the Manager, Seattle

Aircraft Certification Office (ACO), FAA,

Transport Airplane Directorate. Operators

shall submit their requests through an

appropriate FAA Principal Maintenance

Inspector, who may add comments and then

send it to the Manager, Seattle ACO.

Note 2: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Seattle ACO.

(g) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the airplane to

a location where the requirements of this AD

can be accomplished (except no loading of

JP–4 or Jet B fuel).

(h) Except as provided by paragraph (a) of

this AD, the actions shall be done in

accordance with Boeing Alert Service

Bulletin 747–11A2052, dated September 11,

1997, or Boeing Alert Service Bulletin 767–

11A0031, dated September 11, 1997; as

applicable. The incorporation by reference of

these service bulletins was approved

previously by the Director of the Federal

Register as of November 12, 1997 (62 FR

55728, October 28, 1997). Copies may be

obtained from Boeing Commercial Airplane

Group, P.O. Box 3707, Seattle, Washington

98124–2207. Copies may be inspected at the

FAA, Transport Airplane Directorate, 1601

Lind Avenue, SW., Renton, Washington; or at

the Office of the Federal Register, 800 North

Capitol Street, NW., suite 700, Washington,

DC.

(i) This amendment becomes effective on

May 1, 1998.

Issued in Renton, Washington, on April 9,

1998.

John J. Hickey,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 98–10054 Filed 4–15–98; 8:45 am]

BILLING CODE 4910–13–U

FEDERAL TRADE COMMISSION

16 CFR Parts 2 and 4

Procedures in Prior Approval

Proceedings

AGENCY: Federal Trade Commission.

ACTION: Final rule.

SUMMARY: The Federal Trade

Commission is amending its regulations,

which govern applications for approval

of proposed divestitures, acquisitions,

or similar transactions that are subject to

Commission review under outstanding

orders, and is also making a conforming

amendment. The principal changes

accomplished by these amendments are

to clarify the nature of the materials that

will be placed on the public record in

prior approval proceedings, to clarify

the timing of such placement, and to

provide expressly that, in appropriate

cases, the Commission may shorten,

eliminate, extend or reopen a comment

period.

DATES: The amendments are effective

April 16, 1998.

FOR FURTHER INFORMATION CONTACT:

Marc Winerman, Attorney, Office of the

General Counsel, 202–326–2451.

SUPPLEMENTARY INFORMATION:

I. Materials To Be Placed on the Public

Record in Prior Approval Proceedings

Amended Rule 2.41(f)(1) replaces the

requirement that prior approval

applications under that rule be placed

on the public record ‘‘together with

supporting materials.’’ The revised rule

explains that applications shall ‘‘fully

describe the terms of the transaction and

shall set forth why the transaction

merits Commission approval.’’ It

provides for placement on the public

record of the application, together with

any additional applicant submissions

that the Commission directs be placed

on the public record.1 It also delegates

to the Director of the Bureau of

Competition the authority to direct

placement of additional applicant

submissions on the public record

(subject to confidentiality

determinations by the General Counsel).

The rule also clarifies a requirement

for placing on the public record any

written or oral communication that

concerns a prior approval proceeding

and that is directed to a Commissioner

or ‘‘any employee involved in the

decisional process.’’ As construed by

the Commission, and as amended

§ 2.41(f)(3) makes explicit, this

disclosure requirement applies only to

communications between outside

parties and Commissioners or their

personal staffs. The amended rule also

replaces the provision that such

disclosures will be made ‘‘immediately’’

with a provision that disclosures will be

made ‘‘expeditiously.’’

Section 2.41(f)(5) makes clear that all

disclosure requirements under the rule

are subject to confidentiality requests. If

such requests are denied, the submitter

will receive notice before any disclosure

of affected information takes place. See

also 15 U.S.C. 57b–2(c). Section

2.41(f)(5) also explains that

confidentiality requests need not be
18820 Federal Register / Vol. 63, No. 73 /Thursday, April 16, 1998 /Rules and Regulations

2E.g., Press Release, ‘‘Public Comment Period on

Supermarket Divestiture Shortened’’ (November 4,

1996) (divestiture by Knonklijke Ahold NV). In

1986, the Commission decided not to seek comment

on a divestiture application from Flowers

Industries, Inc., where the Commission had denied

a similar prior application after receiving public

comment, and Flowers had then submitted a further

application with additional materials.

3See American Farm Lines v. Black Ball Freight

Service, 397 U.S. 532, 538–39 (1970); Onslow

County v. United States Dep’t of Labor, 774 F.2d

607, 611 (4th Cir. 1985).

4The reference to ‘‘requests for advice concerning

proposed mergers’’ in former Rule 4.9(b)(7)(ii) has

been deleted. It is a vestige of a previously deleted

provision in § 1.1 of the Commission’s rules. See 54

FR 14072 (1989).

resolved before, or at the time of, the

application’s disposition.

II. Provision To Shorten, Eliminate

Extend or Reopen Comment Periods

Amended Rule 2.41(f)(2) provides that

the 30-day comment period for a prior

approval application may be shortened,

eliminated, extended or reopened in

appropriate cases. The Commission has

occasionally shortened a comment

period in the past or decided not to hold

one,2 consistent with case law

establishing that agencies can deviate

from a rule (like the public comment

provision of the prior approval rule) if

the rule is not intended to confer

important procedural benefits on

individuals and if the ends of justice

require such action.3 Under the revised

rule, the Commission may determine, in

light of the relevant facts, to solicit

comment respecting a prior application

for less than 30 days, or not at all. For

example, the Commission might shorten

or eliminate a comment period if it had

previously sought comment on a similar

or identical proposal. The Commission

may also reopen or extend a comment

period if, for example, it wishes to elicit

comment on materials that are placed

on the public record late in the

comment period or after the comment

period closes.

III. Conforming Amendment to § 4.9

Finally, the Commission has made a

conforming amendment to § 4.9, which

identifies the materials that are placed

routinely on the Commission’s public

record. Rule 4.9(b)(7)(ii) formerly

provided for disclosure of certain

specified materials in prior approval

proceedings, and Rule 4.9(b)(7)(iii)

provided, with some overlap, for

disclosure of ‘‘requests for advice

concerning proposed mergers and

materials required to be made public

under § 2.41(f).’’ The Commission has

replaced these provisions with a new

subsection (ii), providing for disclosures

of ‘‘[m]aterials required to be made

public under § 2.41(f) in connection

with applications for approval of

proposed divestitures, acquisitions or

similar transactions subject to

Commission review under outstanding

orders.’’ 4 Rule 2.41(f), in turn, specifies

the applicant submissions, third party

submissions, and Commission

responses that routinely will be placed

on the public record.

IV. Procedural Matters

The proposed amendments are

exempt from the notice and comment

requirements of the Administrative

Procedure Act as ‘‘rules of agency

organization, procedure, or practice.’’ 5

U.S.C. 553(b)(A). They do not entail

information collection for purposes of

the Paperwork Reduction Act of 1980,

44 U.S.C. 3501 et seq., and are not

subject to the requirements of the

Regulatory Flexibility Act, 5 U.S.C.

605(b).

List of Subjects

16 CFR Part 2

Administrative practice and

procedure, Reporting and recordkeeping

requirements.

16 CFR Part 4

Administrative practice and

procedure, Freedom of information.

Accordingly, the Federal Trade

Commission amends Title 16, Chapter 1,

Subchapter A, the Code of Federal

Regulations as follows:

PART 2—NONADJUDICATIVE

PROCEDURES

1. The authority for part 2 continues

to read as follows:

Authority: Sec. 6, 38 Stat. 721; 15 U.S.C.

46.

2. Section 2.41(f) is revised to read as

follows:

§ 2.41 Reports of compliance.

* * * * *

(f)(1) All applications for approval of

proposed divestitures, acquisitions, or

similar transactions subject to

Commission review under outstanding

orders shall fully describe the terms of

the transaction and shall set forth why

the transaction merits Commission

approval. Such applications will be

placed on the public record, together

with any additional applicant

submissions that the Commission

directs be placed on the public record.

The Director of the Bureau of

Competition is delegated the authority

to direct such placement.

(2) The Commission will receive

public comment on a prior approval

application for 30 days. During the

comment period, any person may file

formal written objections or comments

with the Secretary of the Commission,

and such objections or comments shall

be placed on the public record. In

appropriate cases, the Commission may

shorten, eliminate, extend, or reopen a

comment period.

(3) If a Commissioner or a member of

a Commissioner’s personal staff receives

a written communication from a person

not employed by the agency concerning

a proposed transaction that is subject to

this section, such communication will

be placed on the public record

expeditiously after its receipt. If a

Commissioner or a member of a

Commissioner’s personal staff receives

an oral communication concerning such

a transaction from a person not

employed by the Commission, the

recipient shall expeditiously prepare

and have placed on the public record a

memorandum setting forth the full

contents of such communication and

the circumstances thereof.

(4) Responses to applications under

this section, together with a statement of

supporting reasons, will be published

when made, together with responses to

any public comments filed under this

section.

(5) Persons submitting information

that is subject to public record

disclosure under this section may

request confidential treatment for that

information or portions thereof. Such

requests shall be made in accordance

with 16 CFR 4.9(c) and the General

Counsel will determine whether to grant

confidentiality in accordance with 16

CFR 4.9(c). Nothing in this section

requires that confidentiality requests be

resolved prior to, or contemporaneously

with, the disposition of the application.

PART 4—MISCELLANEOUS RULES

1. The authority for part 4 continues

to read as follows:

Authority: Sec. 6, 38 Stat. 721; 15 U.S.C.

46.

2. Section 4.9 is amended by

removing paragraph (b)(7)(iii) and

revising paragraph (b)(7)(ii) to read as

follows:

§ 4.9 The public record.

* * * * *

(b) * * *

(7) * * *

(ii) Materials required to be made

public under 16 CFR 2.41(f) in

connection with applications for

approval of proposed divestitures,

acquisitions or similar transactions

subject to Commission review under

outstanding orders.

* * * * *
Federal Register / Vol. 63, No. 73 /Thursday, April 16, 1998 /Rules and Regulations 18821

1The specific agricultural commodities originally

regulated under the 1936 Act included, among

others, grains, cotton, butter, eggs, and potatoes.

Later, fats and oils, soybeans and livestock, as well

as others, were added to the list of enumerated

agricultural commodities. Commodity Exchange

Act of 1936, Public Law No. 74–675, 49 Stat. 1491

(1936). See, H. Rep. No. 421, 74th Cong., 1st Sess.

1, 2 (1934); H. Rep. No. 1551, 72d Cong., 1st Sess.

3 (1932). A more complete statement of the

statutory and regulatory history of the ban is

provided in the Notice of Proposed Rulemaking, 62

FR 59624 (November 4, 1997).

2Section 4c(b) of the Act provides that no person

‘‘shall offer to enter into, or confirm the execution

of, any transaction involving any commodity

regulated under this Act’’ which is in the nature of

an option ‘‘contrary to any rule, regulation, or other

of the Commission prohibiting any such transaction

or allowing any such transaction under such terms

and conditions as the Commission shall prescribe.’’

7 U.S.C. 6c(b).

3 17 CFR part 32. See 41 FR 51808 (Nov. 24, 1976)

(Adoption of Rules Concerning Regulation and

Fraud in Connection with Commodity Option

Transactions). See also, 41 FR 7774 (February 20,

1976) (Notice of Proposed Rules on Regulation of

Commodity Option Transactions); 41 FR 44560

(October 8, 1976) (Notice of Proposed Regulation of

Commodity Options).

4As noted above, trade options are defined as offexchange options ‘‘offered by a person having a

reasonable basis to believe that the option is offered

to the categories of commercial users specified in

the rule, where such commercial user is offered or

enters into the transaction solely for purposes

related to its business as such.’’ 41 FR at 51815; rule

32.4(a) (1976). This exemption was promulgated

based upon an understanding that commercial users

of the underlying commodity has sufficient

information concerning commodity markets insofar

as transactions related to their business as such, so

that application of the full range of regulatory

requirements was unnecessary for business-related

transactions in options on the non-enumerated

commodities. See 41 FR 44563, ‘‘Report of the

Advisory Committee on Definition and Regulation

of Market Instruments,’’ appendix A–4, p. 7

(January 22, 1976).

5Because of continuing, persistent, and

widespread abuse and fraud in their offer and sale,

the Commission in 1978 suspended all trading in

commodity options, except for trade (and

subsequently, dealer) options. 43 FR 16153 (April

17, 1976). Congress later codified the Commission’s

options ban, establishing a general prohibition

against commodity option transactions other than

trade and dealer options. Public Law No. 95–405,

92 Stat. 865 (1978).

6Public Law No. 97–444, 96 Stat. 2294, 2301

(1983).

By direction of the Commission.

Benjamin I. Berman,

Acting Secretary.

[FR Doc. 98–10078 Filed 4–15–98; 8:45 am]

BILLING CODE 6750–01–M

COMMODITY FUTURES TRADING

COMMISSION

17 CFR Parts 3, 32 and 33

Trade Options on the Enumerated

Agricultural Commodities

AGENCY: Commodity Futures Trading

Commission.

ACTION: Interim final rules.

SUMMARY: Generally, the offer or sale of

commodity options is prohibited except

on designated contract markets. 17 CFR

32.11. One of several specified

exceptions to the general prohibition on

off-exchange options is for ‘‘trade

options.’’ Trade options are offexchange options ‘‘offered by a person

having a reasonable basis to believe that

the option is offered to’’ a person or

entity within the categories of

commercial users specified in the rule,

where such commercial user ‘‘is offered

or enters into the transaction solely for

purposes related to its business as

such.’’ 17 CFR 32.4(a). Trade options,

however, are not permitted on the

agricultural commodities which are

enumerated in the Commodity

Exchange Act (Act). 7 U.S.C. 1a(3).

The Commodity Futures Trading

Commission (Commission or CFTC) is

removing the prohibition on offexchange trade options on the

enumerated agricultural commodities

pursuant to a three-year pilot program.

Because it intends to reexamine these

rules during and at the conclusion of the

pilot program, these rules are being

promulgated as interim final rule

(interim rules). The interim rules, like

the proposed rules, permit only

agricultural trade options which, if

exercised, will result in delivery of the

commodity. Such options may not be

resold, repurchased, or otherwise

cancelled other than through the

exercise or natural expiration of the

contract.

Also, the interim rules permit only

those entities which handle the

commodity in normal cash market

channels to solicit, to offer to buy or

sell, or to buy or sell such options.

Vendors of such options would be

required to become registered as

agricultural trade option merchants, to

report to the Commission on their

transactions, to provide their customers

with disclosure statements, and to

safeguard their customers’ premiums.

The interim rules substantially

streamline requirements contained in

the proposed rules, particularly the

proposed registration, reporting rules,

particularly the proposed registration,

reporting and customer fund segregation

requirements. The Commission is

exempting from the prohibition and

these interim rules individuals or

entities which meet a substantial

financial requirement, as it proposed.

Finally, the Commission is removing the

prohibition on the offer or sale of

exchange-traded options on physicals

on these commodities.

CFTC will publish at a late time a

document in the Federal Register

requesting comments on these interim

rules.

EFFECTIVE DATE: June 15, 1998.

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 at

[PArchitzel@cftc.gov].

SUPPLEMENTARY INFORMATION:

I. Background

A. The Prohibition of Agricultural Trade

Options

In 1936, responding to a history of

large price movements and disruptions

in the futures markets attributed to

speculative trading in options, Congress

completely prohibited the offer or sale

of option contracts both on and off

exchange in the specific list of

agricultural commodities then under

regulation.1 Any commodity not so

enumerated was unaffected by the

prohibition.

A history of abusive practices and

fraud in the offer and sale of offexchange options in the nonenumerated commodities was one of the

catalysts leading to enactment of the

Commodity Futures Trading

Commission Act of 1974 (1974 Act). The

1974 Act created the Commission,

substantially strengthen the Commodity

Exchange Act and broadened its scope

by bringing all commodities under

regulation for the first time. The newlycreated CFTC, vested with plenary

authority to regulate the offer and sale

of commodity options,2 promulgated a

comprehensive regulatory framework

applicable to off-exchange commodity

option transactions in the nonenumerated commodities.3 This

comprehensive framework exempted

‘‘trade options’’ from most of its

provisions except for a rule prohibiting

fraud (rule 32.9).4 In contrast, the

prohibition on the offer and sale of all

options on the enumerated agricultural

commodities remained as a

consequence of both statutory provision

and Commission rule. See, 17 CFR 32.2.

However, the attempt to create a

regulatory framework to govern the offer

and sale of off-exchange commodity

options was unsuccessful and was

suspended.5 In 1982, based on the

separate, successful pilot program to

introduce exchange-traded options on

the non-enumerated commodities,

Congress eliminated the statutory

prohibition on options on the

enumerated agricultural commodities.6

As a consequence, the Commission