32724 Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 /Rules and Regulations

actual use. This is an administrative

change and does not affect the

boundaries, designated altitudes, or

activities conducted within the

restricted areas.

The Rule

This amendment to 14 CFR part 73

changes the times of designation for R–

2534A and R–2534B, Vandenberg AFB,

CA, from ‘‘continuous’’ to ‘‘intermittent

by Notice to Airmen (NOTAM) at least

4 hours in advance.’’ The FAA is taking

this action in response to written

notification from the using agency that

a reduction in the times of use for the

restricted areas is appropriate. As the

solicitation of comments would not

offer any meaningful right or benefit to

any segment of the public, notice and

public procedure under 5 U.S.C. 553(b)

are unnecessary.

The FAA has determined that this

action only involves an established

body of technical regulations for which

frequent and routine amendments are

necessary to keep them operationally

current. Therefore, this regulation: (1) is

not a ‘‘significant regulatory action’’

under Executive Order 12866; (2) is not

a ‘‘significant rule’’ under DOT

Regulatory Policies and Procedures (44

FR 11034; February 26, 1979); and (3)

does not warrant preparation of a

regulatory evaluation as the anticipated

impact is so minimal. Since this is a

routine matter that will only affect air

traffic procedures and air navigation, it

is certified that this rule, when

promulgated, will not have a significant

economic impact on a substantial

number of small entities under the

criteria of the Regulatory Flexibility Act.

Environmental Review

This action reduces the time of

designation for restricted areas. In

accordance with FAA Order 1050.1D,

‘‘Polices and Procedures for Considering

Environmental Impacts,’’ this action is

not subject to environmental

assessments and procedures and the

National Environmental Policy Act.

List of Subjects in 14 CFR Part 73

Airspace, Incorporation by reference,

Navigation (air).

Adoption of the Amendment

In consideration of the foregoing, the

Federal Aviation Administration

amends 14 CFR part 73 as follows:

PART 73—SPECIAL USE AIRSPACE

1. The authority citation for part 73

continues to read as follows:

Authority: 49 U.S.C. 106(g), 40103, 40113,

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389.

§ 73.25 [Amended]

§ 73.25 is amended as follows:

* * * * *

R–2534A Vandenberg AFB, CA

[Amended]

By removing ‘‘Time of designation.

Continuous,’’ and inserting ‘‘Time of

designation. Intermittent by NOTAM at

least 4 hours in advance.’’

R–2534B Vandenberg AFB, CA

[Amended]

By removing ‘‘Time of designation.

Continuous,’’ and inserting ‘‘Time of

designation. Intermittent by NOTAM at

least 4 hours in advance.’’

* * * * *

Issued in Washington, DC, on June 9, 1998.

John S. Walker,

Program Director for Air Traffic Airspace

Management.

[FR Doc. 98–15956 Filed 6–15–98; 8:45 am]

BILLING CODE 4910–13–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 73

[Airspace Docket No. 98–AEA–3]

RIN 2120–AA66

Alteration of Restricted Areas; New

Jersey and New York

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Final rule.

SUMMARY: This action amends the titles

of the using agencies for Restricted

Areas R–5002A, R–5002B, R–5002C, R–

5002D, and R–5002E Warren Grove, NJ;

and R–5203 Oswego, NY. This is an

administrative change to reflect

organizational name changes that

resulted from Department of Defense

realignment actions.

EFFECTIVE DATE: 0901 UTC, August 13,

1998.

FOR FURTHER INFORMATION CONTACT: Paul

Gallant, Airspace and Rules Division,

ATA–400, Office of Air Traffic Airspace

Management, Federal Aviation

Administration, 800 Independence

Avenue, SW., Washington, DC 20591;

telephone (202) 267–8783.

SUPPLEMENTARY INFORMATION:

Background

As a result of decisions by the Defense

Base Realignment and Closure

Commission, the titles of a number of

military units have been changed. These

changes affect the units designated as

using agencies for Restricted Areas R–

5002A, R–5002B, R–5002C, R–5002D,

and R–5002E Warren Grove, NJ; and R–

5203 Oswego, NY. This action amends

the using agency titles to reflect the

current organizational name changes.

The Rule

This amendment to 14 CFR part 73

(part 73) changes the using agency

organizational names for R–5002A, R–

5002B, R–5002C, R–5002D, and R–

5002E Warren Grove, NJ; and R–5203

Oswego, NY. This administrative

change will not alter the boundaries,

altitudes, time of designation, or

activities conducted within the affected

restricted areas; therefore, I find that

notice and public procedure under 5

U.S.C. 553(b) are unnecessary.

The FAA has determined that this

regulation only involves an established

body of technical regulations for which

frequent and routine amendments are

necessary to keep them operationally

current. Therefore, this regulation: (1) is

not a ‘‘significant regulatory action’’

under Executive Order 12866; (2) is not

a ‘‘significant rule’’ under DOT

Regulatory policies and Procedures (44

FR 11034, February 26, 1979); and (3)

does not warrant preparation of a

regulatory evaluation as the anticipated

impact is so minimal.

Sections 73.50 and 73.52 of 14 CFR

part 73 were republished in FAA Order

7400.8E, dated November 7, 1997.

Environmental Review

This action is a minor administrative

change to amend the titles of designated

using agencies for existing restricted

areas. There are no changes to air traffic

control procedures or routes, or the use

of the restricted areas as a result of this

action. Therefore, this action is not

subject to environmental assessments

and procedures in accordance with FAA

Order 1050.1D, ‘‘Policies and

Procedures for Considering

Environmental Impacts,’’ and the

National Environmental Policy Act of

1989.

List of Subjects in 14 CFR Part 73

Airspace, Navigation (air).

Adoption of the Amendment

In consideration of the foregoing, the

Federal Aviation Administration

amends 14 CFR part 73, as follows:

PART 73—SPECIAL USE AIRSPACE

1. The authority citation for part 73

continues to read as follows:

Authority: 49 U.S.C. 106(g), 40103, 40113,

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389.
Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 /Rules and Regulations 32725

1 63 FR 12713 (March 16, 1998).

§ 73.50 [Amended]

2. § 73.50 is amended as follows:

* * * * *

R–5002A Warren Grove, NJ [Amended]

By removing ‘‘Using agency. Commander,

108th Tactical Fighter Wing, New Jersey Air

National Guard, McGuire AFB, NJ,’’ and

adding ‘‘Using agency. Air National Guard,

108th Air Refueling Wing, McGuire AFB,

NJ.’’

R–5002B Warren Grove, NJ [Amended]

By removing ‘‘Using agency. Commander,

108th Tactical Fighter Wing, New Jersey Air

National Guard, McGuire AFB, NJ,’’ and

adding ‘‘Using agency. Air National Guard,

108th Air Refueling Wing, McGuire AFB,

NJ.’’

R–5002C Warren Grove, NJ [Amended]

By removing ‘‘Using agency. Commander,

108th Tactical Fighter Wing, New Jersey Air

National Guard, McGuire AFB, NJ,’’ and

adding ‘‘Using agency. Air National Guard,

108th Air Refueling Wing, McGuire AFB,

NJ.’’

R–5002D Warren Grove, NJ [Amended]

By removing ‘‘Using agency. Commander,

108th Tactical Fighter Wing, New Jersey Air

National Guard, McGuire AFB, NJ,’’ and

adding ‘‘Using agency. Air National Guard,

108th Air Refueling Wing, McGuire AFB,

NJ.’’

R–5002E Warren Grove, NJ [Amended]

By removing ‘‘Using agency. Commander,

108th Tactical Fighter Wing, New Jersey Air

National Guard, McGuire AFB, NJ,’’ and

adding ‘‘Using agency. Air National Guard,

108th Air Refueling Wing, McGuire AFB,

NJ.’’

* * * * *

§ 73.52 [Amended]

3. § 73.52 is amended as follows:

* * * * *

R–5203 Oswego, NY [Amended]

By removing ‘‘Using agency. 24th Air

Division/DOTS, Griffiss AFB, NY,’’ and

adding ‘‘Using agency. Air National Guard,

Northeast Air Defense Sector/DOS, Rome,

NY.’’

* * * * *

Issued in Washington, DC, on June 8, 1998.

Reginald C. Matthews,

Acting Program Director for Air Traffic

Airspace Management.

[FR Doc. 98–15957 Filed 6–15–98; 8:45 am]

BILLING CODE 4910–13–P

COMMODITY FUTURES TRADING

COMMISSION

17 CFR Part 1

Minimum Financial Requirements for

Futures Commission Merchants

AGENCY: Commodity Futures Trading

Commission.

ACTION: Final rule.

SUMMARY: The Commodity Futures

Trading Commission (‘‘Commission’’) is

amending its minimum financial

requirements for futures commission

merchants (‘‘FCMs’’). The amendment

will eliminate a charge presently

required to be taken by FCMs in the

computation of the amount of their net

capital. This charge is commonly

referred to as the ‘‘short option value

charge’’ (‘‘SOV charge’’). The

Commission is rescinding this charge,

because it has found that the charge is

not closely correlated to the actual risk

of the customers’ short option positions

and, in any event, there are other

protections in place to address this risk.

EFFECTIVE DATE: July 16, 1998.

FOR FURTHER INFORMATION CONTACT: Paul

H. Bjarnason, Jr., Chief Accountant, or

Lawrence B. Patent, Associate Chief

Counsel, Division of Trading and

Markets, Commodity Futures Trading

Commission, 1155 21st Street, N.W.

Washington, D.C. 20581; telephone

(202) 418–5459 or 418–5439.

SUPPLEMENTARY INFORMATION:

I. Background

The minimum adjusted net capital

requirement for an FCM is currently the

greatest of: (A) $250,000; (B) four

percent of the customer funds required

to be segregated pursuant to the

Commodity Exchange Act and the

foreign futures or foreign options

secured amount, less the market value

of commodity options purchased by

customers on or subject to the rules of

a contract market or a foreign board of

trade: Provided, however, that the

deduction for each customer shall be

limited to the amount of customer funds

in such customer’s account(s) and

foreign futures and foreign options

secured amounts; (C) the amount of

adjusted net capital required by a

registered futures association of which it

is a member; or (D) for securities brokers

and dealers, the amount of net capital

required by Rule 15c3–1(a) of the

Securities and Exchange Commission

(17 CFR 240.15c3–1(a)).

In calculating the amount of adjusted

net capital needed to meet the minimum

requirement, FCMs are presently

required under Commission Rule

1.17(c)(5)(iii) to deduct a capital charge,

based upon four percent of the market

value of commodity options granted

(sold) by option customers on or subject

to the rules of a contract market or a

foreign board of trade. The Commission

adopted this provision in 1982 to

require that an FCM recognize the risk

involved in customers selling or going

short an option. Under this provision,

an FCM is required to take this charge,

regardless of the trading strategy of the

customer. Some customers have used a

short option position in combination

with another futures or commodity

option position, such as an inter-month

spread position. Although such a

position would involve less risk than a

naked position, the SOV charge would

be the same or, perhaps, greater.

On March 9, 1998, the Commission

proposed an amendment to the

minimum financial requirements for

futures commission merchants which

would eliminate Rule 1.17(c)(5)(iii).1

The Commission received two (2)

comment letters. Both supported

elimination of the charge. One letter was

jointly signed by representatives from

each of seven (7) U.S. commodity

exchanges and the other was filed by an

FCM.

The effect of the amendment is to

decrease the amount of charges taken

against capital in the computation of net

capital. The reduction in capital charges

taken by an FCM will result in an

increase in the stated amount of

adjusted net capital of an FCM carrying

short option positions in customer

accounts. The total amount of the

increase in an FCM’s net capital would

depend on the quantity and value of

short options carried in the accounts of

the FCM’s customers.

As stated in the proposing release, the

Commission proposed to rescind this

rule, because the charge is not closely

correlated to the actual risk of the

options carried on behalf of customers

and, in any event, there are other

protections in place to address the risk

of short options. In particular, the

Standard Portfolio Analysis of Risk

(‘‘SPAN’’) margining system has been

effectively used in setting appropriate

levels of risk margin, and there are

many other non-capital protections.

These protections include effective selfregulatory organization (‘‘SRO’’) audit

and financial surveillance programs and

modern risk management and control

systems at FCMs. All of the comments

received on the Commission’s proposal

to rescind the SOV charge confirmed

these views. Moreover, no comments

were received which provided any

reason to believe that the SOV charge

should not be rescinded.

II. Summary of Comments

A. Portfolio Margining System

Commenters noted that the four

percent capital charge is not closely

correlated to the actual risk of customer