Federal Register / Vol. 63, No. 113 / Friday, June 12, 1998 / Proposed Rules 32161

nor an environmental impact statement

is required.

G. Executive Orders

According to Executive Order 12988

(February 5, 1996), agencies must state

in clear language the preemptive effect,

if any, of new regulations.

The PPPA provides that, generally,

when a special packaging standard

issued under the PPPA is in effect, ‘‘no

State or political subdivision thereof

shall have any authority either to

establish or continue in effect, with

respect to such household substance,

any standard for special packaging (and

any exemption therefrom and

requirement related thereto) which is

not identical to the [PPPA] standard.’’

15 U.S.C. 1476(a). A State or local

standard may be excepted from this

preemptive effect if (1) the State or local

standard provides a higher degree of

protection from the risk of injury or

illness than the PPPA standard; and (2)

the State or political subdivision applies

to the Commission for an exemption

from the PPPA’s preemption clause and

the Commission grants the exemption

through a process specified at 16 CFR

Part 1061. 15 U.S.C. 1476(c)(1). In

addition, the Federal government, or a

State or local government, may establish

and continue in effect a non-identical

special packaging requirement that

provides a higher degree of protection

than the PPPA requirement for a

household substance for the Federal,

State or local government’s own use. 15

U.S.C. 1476(b).

Thus, with the exceptions noted

above, the proposed rule exempting

Sucraid from special packaging

requirements would preempt nonidentical state or local special packaging

standards for the substance.

In accordance with Executive Order

12612 (October 26, 1987), the

Commission certifies that the proposed

rule does not have sufficient

implications for federalism to warrant a

Federalism Assessment.

List of Subjects in 16 CFR Part 1700

Consumer protection, Drugs, Infants

and children, Packaging and containers,

Poison prevention, Toxic substances.

For the reasons given above, the

Commission proposes to amend 16 CFR

part 1700 as follows:

PART 1700—[AMENDED]

1. The authority citation for part 1700

continues to read as follows:

Authority: Pub. L. 91–601, secs. 1–9, 84

Stat. 1670–74, 15 U.S.C. 1471–76. Secs

1700.1 and 1700.14 also issued under Pub. L.

92–573, sec. 30(a), 88 Stat. 1231. 15 U.S.C.

2079(a).

2. Section 1700.14 is amended by

republishing paragraph (a) introductory

text and paragraph (a)(10) introductory

text, and by adding new paragraph

(a)(10)(xx) to read as follows:

§ 1700.14 Substances requiring special

packaging.

(a) Substances. The Commission has

determined that the degree or nature of

the hazard to children in the availability

of the following substances, by reason of

their packaging, is such that special

packaging meeting the requirements of

§ 1700.20(a) is required to protect

children from serious personal injury or

serious illness resulting from handling,

using, or ingesting such substances, and

the special packaging herein required is

technically feasible, practicable, and

appropriate for these substances:

* * * * *

(10) Prescription Drugs. Any drug for

human use that is in a dosage form

intended for oral administration and

that is required by Federal law to be

dispensed only by or upon an oral or

written prescription of a practitioner

licensed by law to administer such drug

shall be packaged in accordance with

the provisions of § 1700.15 (a), (b), and

(c), except for the following:

* * * * *

(xx) Sacrosidase (sucrase)

preparations in a solution of glycerol

and water.

Dated: June 4, 1998.

Sadye E. Dunn,

Secretary, Consumer Product Safety

Commission.

List of Relevant Documents

1. Briefing memorandum from Jaqueline

Ferrante, Ph.D., EH, to the Commission,

‘‘Petition (PP 97–1) to Exempt Sucraid from

the Special Packaging Requirements for Oral

Prescription Drugs,’’ May 20, 1998.

2. Memorandum from Jaqueline Ferrante,

Ph.D., EH, to Mary Ann Danello, Ph.D.,

Associate Executive Director, EH, ‘‘Sucraid

Review’’ April 1, 1998.

3. Memorandum from Marcia P. Robins,

EC, to Jacqueline Ferrante, Ph.D., EH,

‘‘Economic Considerations: Petition for

Exemption from PPPA Requirements for Oral

Prescription Drug Sucraid,’’ April 2, 1998.

[FR Doc. 98–15493 Filed 6–11–98; 8:45 am]

BILLING CODE 6355–01–P

SOCIAL SECURITY ADMINISTRATION

20 CFR Part 416

RIN 0960–AE77

Denial of Supplemental Security

Income Benefits for Fugitive Felons

and Probation and Parole Violators

AGENCY: Social Security Administration.

ACTION: Proposed rules.

SUMMARY: These proposed regulations

would change our rules to reflect an

amendment to the Social Security Act

(the Act) made by Public Law 104–193,

the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996.

The amendment prohibits payment of

Supplemental Security Income (SSI)

benefits to certain fugitives and

probation and parole violators.

DATES: To be sure that your comments

are considered, we must receive them

no later than August 11, 1998.

ADDRESSES: Comments should be

submitted in writing to the

Commissioner of Social Security, P.O.

Box 1585, Baltimore, MD 21235; sent by

telefax to (410) 966–2830; sent by E-mail

to ‘‘regulations@ssa.gov’’; or delivered

to the Office of Process and Innovation

Management, Social Security

Administration, L2109 West Low Rise,

6401 Security Boulevard, Baltimore, MD

21235, between 8:00 A.M. and 4:30 P.M.

on regular business days. Comments

may be inspected during these same

hours by making arrangements with the

contact person shown below.

FOR FURTHER INFORMATION CONTACT:

Teresa Robinson, Policy Analyst, Office

of Program Benefits Policy, Social

Security Administration, 6401 Security

Boulevard, Baltimore, MD 21235, (410)

965–7960 for information about these

rules. For information on eligibility or

claiming benefits, call our national tollfree number, 1–800–772–1213.

SUPPLEMENTARY INFORMATION:

Background

Section 202(a) of Public Law 104–193

added section 1611(e)(5) of the Act to

preclude eligibility for SSI benefits for

certain fugitives and probation and

parole violators. In general, section

1611(e)(5) of the Act provides that a

person shall not be considered an

eligible individual or eligible spouse for

purposes of the SSI program for any

month during which the person is—

• Fleeing to avoid prosecution for a

crime, or an attempt to commit a crime,

which is a felony under the laws of the

place from which the person flees (or

which, in the case of the State of New

Jersey, is a high misdemeanor under the

laws of that State);

• Fleeing to avoid custody or

confinement after conviction for a

crime, or an attempt to commit a crime,

which is a felony under the laws of the

place from which the person flees (or

which, in the case of the State of New

Jersey, is a high misdemeanor under the

laws of that State); or
32162 Federal Register / Vol. 63, No. 113 / Friday, June 12, 1998 / Proposed Rules

• Violating a condition of probation

or parole imposed under Federal or

State law.

Section 1611(e)(5) of the Act was

effective on August 22, 1996, the date of

the enactment of Public Law 104–193,

and applies with respect to eligibility

for SSI benefits for months beginning in

August 1996.

Proposed Regulations

We are proposing to amend our

regulations concerning the SSI program

under title XVI of the Act to indicate

that a person will not be eligible for SSI

benefits under the circumstances

described in section 1611(e)(5) of the

Act. For this purpose, we propose to

make changes to the regulations in

subparts B, G, and M of 20 CFR part

416, the part which contains the

regulations for the SSI program.

Subpart B of 20 CFR part 416 explains

the general rules that we apply in

determining a person’s eligibility for SSI

benefits. In general, a person may be

eligible for SSI benefits if he or she is

a resident of the United States, has

limited income and resources, and is

age 65 or older, blind, or disabled.

Section 416.202 lists the basic

requirements which must be met in

order for a person to be eligible for SSI

benefits. We propose to amend

§ 416.202 to indicate that, in order to be

eligible for SSI benefits, a person must

not be—

(1) Fleeing to avoid prosecution for a

crime, or an attempt to commit a crime,

which is a felony under the laws of the

place from which the person flees (or

which, in the case of the State of New

Jersey, is a high misdemeanor under the

laws of that State);

(2) Fleeing to avoid custody or

confinement after conviction for a

crime, or an attempt to commit a crime,

which is a felony under the laws of the

place from which the person flees (or

which, in the case of the State of New

Jersey, is a high misdemeanor under the

laws of that State); or

(3) Violating a condition of probation

or parole imposed under Federal or

State law.

To make this change, we propose to

redesignate existing paragraph (f) of

§ 416.202 as paragraph (g) and to add a

new paragraph (f) which would contain

the provisions described above.

The regulations in subpart G of 20

CFR part 416 require an SSI recipient,

a representative payee of an SSI

recipient, or an applicant for SSI

benefits to report events that may affect

eligibility or continued eligibility for

SSI benefits or the amount of benefits.

The regulations explain that a failure to

make a timely report of such an event

may result in the assessment of a

penalty deduction against an

individual’s SSI benefits.

Section 416.708 of the regulations

describes events which must be

reported by an individual receiving SSI

benefits, a representative payee for an

SSI recipient, or an applicant awaiting

a final decision on an application for

SSI benefits. Under section 416.722 of

the regulations, a penalty deduction will

be applied if the SSI applicant, recipient

or representative payee, without good

cause, fails to report such events, and

received benefits that would have been

reduced, suspended or terminated if the

event had been timely reported. The

circumstances described in section

1611(e)(5) of the Act would make such

applicant or recipient ineligible for SSI

benefits. Therefore, we are proposing to

amend § 416.708 by adding a new

paragraph (o) to the list of events that

must be reported, and that if not

reported, may result in the assessment

of a penalty deduction. New paragraph

(o) would require an SSI applicant or

recipient, or a representative for an SSI

recipient, to report to us the occurrence

of any of the circumstances specified in

section 1611(e)(5) of the Act which

would make such applicant or recipient

ineligible for SSI benefits.

Of course, we recognize that many SSI

applicants or recipients may not report

their status under section 1611(e)(5) of

the Act to us. Thus, we will not depend

on the reports of the individual

recipient or applicant for information

that he or she is fleeing prosecution,

custody or confinement or violating a

condition of probation or parole. We

will place heavy emphasis on other

sources of such information in

determining whether someone is

ineligible under this provision. Our

principal source will be records of

Federal and State law enforcement

agencies and penal institutions, but we

will continue to explore all other

avenues of independent sources of

information which will help us decide

whether individuals are ineligible,

particularly under the provisions of

section 1611(e)(5) of the Act.

Subpart M of 20 CFR part 416

provides rules for suspending or

terminating an individual’s SSI benefit

payments when he or she no longer

meets the requirements for eligibility for

SSI benefits. We are proposing to add

new § 416.1339 to this subpart to

explain the requirement to suspend

payments when an SSI recipient is

found to be an individual who falls

under one of the provisions of section

1611(e)(5) of the Act.

Proposed § 416.1339 provides that

suspension of benefit payments because

an individual is a fugitive or a probation

or parole violator, as described above, is

effective with the first day of whichever

of the following months is earlier—

• The month in which a warrant or

order for the individual’s arrest or

apprehension, an order requiring the

individual’s appearance before a court

or other appropriate tribunal (e.g., a

parole board), or a similar order is

issued by a court or other duly

authorized tribunal on the basis of an

appropriate finding that the

individual—

(1) Is fleeing, or has fled, to avoid

prosecution for a crime, or an attempt to

commit a crime, which is a felony under

the laws of the place from which the

person flees (or which, in the case of the

State of New Jersey, is a high

misdemeanor under the laws of that

State);

(2) Is fleeing, or has fled, to avoid

custody or confinement after conviction

for a crime, or an attempt to commit a

crime, which is a felony under the laws

of the place from which the person flees

(or which, in the case of the State of

New Jersey, is a high misdemeanor

under the laws of that State); or

(3) Is violating, or has violated, a

condition of his or her probation or

parole imposed under Federal or State

law; or

• The first month during which the

individual fled to avoid such

prosecution, fled to avoid such custody

or confinement after conviction, or

violated a condition of his or her

probation or parole, if indicated in such

warrant or order, or in a decision by a

court or other appropriate tribunal.

Proposed § 416.1339 explains that an

individual will not be considered to be

ineligible for SSI benefits and benefit

payments will not be suspended under

the provisions of that section for any

month prior to August 1996.

Proposed § 416.1339 also explains

that benefits will be resumed, if

otherwise payable, effective with the

first month throughout which the

individual is determined to be no longer

fleeing to avoid such prosecution,

fleeing to avoid such custody or

confinement after conviction, or

violating a condition of his or her

probation or parole.

We also propose to amend the second

sentence of § 416.1337(b)(3)(ii) which

contains a cross-reference to the

sections of subpart M which describe

conditions under which SSI benefits are

suspended. We propose to revise the

cross-reference to include a reference to

new § 416.1339.
Federal Register / Vol. 63, No. 113 / Friday, June 12, 1998 / Proposed Rules 32163

Electronic Version

The electronic file of this document is

available on the Federal Bulletin Board

(FBB) at 9:00 A.M. on the date of

publication in the Federal Register. To

download the file, modem dial (202)

512–1387. The FBB instructions will

explain how to download the file and

the fee. This file is in WordPerfect and

will remain on the FBB during the

comment period.

Regulatory Procedures

Executive Order 12866

We have consulted with the Office of

Management and Budget (OMB) and

determined that these proposed rules do

meet the criteria for a significant

regulatory action under Executive Order

12866.

Regulatory Flexibility Act

We certify that these proposed

regulations, if promulgated, will not

have a significant economic impact on

a substantial number of small entities

because these rules affect only

individuals. Therefore, a regulatory

flexibility analysis as provided in Public

Law 96–354, the Regulatory Flexibility

Act, as amended by Public Law 104–

121, is not required.

Paperwork Reduction Act

These proposed rules contain a

reporting requirement in proposed

§ 416.708(o). As required by 44 U.S.C.

3507, as amended by section 2 of the

Paperwork Reduction Act of 1995, we

submitted a copy of the proposed rules

to OMB for its review.

Section 416.708(o) of the proposed

regulations requires an SSI applicant or

recipient, or a representative payee of an

SSI recipient, to report to SSA that the

applicant or recipient is a fugitive or

probation or parole violator as described

in that section if such event occurs. The

information reported will be used by

SSA to deny eligibility for SSI benefits

or suspend SSI benefit payments. The

respondents are SSI applicants,

recipients or representative payees. We

estimate that the public reporting

burden will be 1 minute per response

for 1,000 respondents, resulting in 16.6

annual burden hours. This includes the

time it will take to read any instructions

and provide the information. If you have

any comments or suggestions on this

estimate, write to OMB and SSA at the

following addresses:

Office of Management and Budget,

OIRA, Attention: Laura Oliven, Room

10230, New Executive Office

Building, Washington, D.C. 20503 and

Social Security Administration,

DCFAM, Attention: Nicholas E.

Tagliareni, 1–A–21 Operations

Building, 6401 Security Boulevard,

Baltimore, MD 21235.

In addition to your comments on the

accuracy of the Agency’s burden

estimate, we are soliciting comments on

the need for the information; its

practical utility; ways to enhance its

quality, utility and clarity; and on ways

to minimize burden on respondents,

including the use of automated

collection techniques or other forms of

information technology.

(Catalog of Federal Domestic Assistance

Program No. 96.006, Supplemental Security

Income)

List of Subjects in 20 CFR Part 416

Administrative practice and

procedure, Aged, Blind, Disability

benefits, Public assistance programs,

Reporting and recordkeeping

requirements, Supplemental Security

Income (SSI).

Dated: February 25, 1998.

Kenneth S. Apfel,

Commissioner of Social Security.

For the reasons set out in the

preamble, subparts B, G, and M of part

416 of chapter III of title 20 of the Code

of Federal Regulations are proposed to

be amended as follows:

PART 416—SUPPLEMENTAL

SECURITY INCOME FOR THE AGED,

BLIND, AND DISABLED

Subpart B to Part 416—[Amended]

1. The authority citation for subpart B

of part 416 continues to read as follows:

Authority: Secs. 702(a)(5), 1110(b), 1602,

1611, 1614, 1615(c), 1619(a), 1631, and 1634

of the Social Security Act (42 U.S.C.

902(a)(5), 1310(b), 1381a, 1382, 1382c,

1382d(c), 1382h(a), 1383, and 1383c); secs.

211 and 212, Pub. L. 93–66, 87 Stat. 154 and

155 (42 U.S.C. 1382 note); sec. 502(a), Pub.

L. 94–241, 90 Stat. 268 (48 U.S.C. 1681 note);

sec. 2, Pub. L. 99–643, 100 Stat. 3574 (42

U.S.C. 1382h note).

2. Section 416.202 is amended by

redesignating paragraph (f) as paragraph

(g) and by adding a new paragraph (f) to

read as follows:

§ 416.202 Who may get SSI benefits.

* * * * *

(f) You are not—

(1) Fleeing to avoid prosecution for a

crime, or an attempt to commit a crime,

which is a felony under the laws of the

place from which you flee (or which, in

the case of the State of New Jersey, is

a high misdemeanor under the laws of

that State);

(2) Fleeing to avoid custody or

confinement after conviction for a

crime, or an attempt to commit a crime,

which is a felony under the laws of the

place from which you flee (or which, in

the case of the State of New Jersey, is

a high misdemeanor under the laws of

that State); or

(3) Violating a condition of probation

or parole imposed under Federal or

State law.

* * * * *

Subpart G to Part 416—[Amended]

3. The authority citation for subpart G

of part 416 continues to read as follows:

Authority: Secs. 702(a)(5), 1611, 1612,

1613, 1614, and 1631 of the Social Security

Act (42 U.S.C. 902(a)(5), 1382, 1382a, 1382b,

1382c, and 1383); sec. 211, Pub. L. 93–66, 87

Stat. 154 (42 U.S.C. 1382 note).

4. Section 416.708 is amended by

adding a new paragraph (o) to read as

follows:

§ 416.708 What you must report.

* * * * *

(o) Fleeing to avoid criminal

prosecution or custody or confinement

after conviction, or violating probation

or parole. You must report to us that

you are—

(1) Fleeing to avoid prosecution for a

crime, or an attempt to commit a crime,

which is a felony under the laws of the

place from which you flee (or which, in

the case of the State of New Jersey, is

a high misdemeanor under the laws of

that State);

(2) Fleeing to avoid custody or

confinement after conviction for a

crime, or an attempt to commit a crime,

which is a felony under the laws of the

place from which you flee (or which, in

the case of the State of New Jersey, is

a high misdemeanor under the laws of

that State); or

(3) Violating a condition of probation

or parole imposed under Federal or

State law.

Subpart M to Part 416—[Amended]

5. The authority citation for subpart M

of part 416 continues to read as follows:

Authority: Secs. 702(a)(5), 1611–1615,

1619, and 1631 of the Social Security Act (42

U.S.C. 902(a)(5), 1382–1382d, 1382h, and

1383).

6. In § 416.1337, the second sentence

of paragraph (b)(3)(ii) is revised to read

as follows:

§ 416.1337 Exceptions to the continuation

of previously established payment level.

* * * * *

(b) * * *

(3) * * *

(ii) * * * However, if the individual’s

benefits had been correctly suspended

as provided in §§ 416.1321 through
32164 Federal Register / Vol. 63, No. 113 / Friday, June 12, 1998 / Proposed Rules

416.1330 or § 416.1339 and they should

have remained suspended but a benefit

that exceeded the dollar limitation was

paid, no further payment shall be made

to him at this time and notice of the

planned action shall not contain any

provision regarding continuation of

payment pending appeal. * * *

* * * * *

7. New § 416.1339 is added to subpart

M to read as follows:

§ 416.1339 Suspension due to flight to

avoid criminal prosecution or custody or

confinement after conviction, or due to

violation of probation or parole.

(a) Basis for suspension. An

individual is ineligible for SSI benefits

for any month during which he or she

is—

(1) Fleeing to avoid prosecution for a

crime, or an attempt to commit a crime,

which is a felony under the laws of the

place from which the individual flees

(or which, in the case of the State of

New Jersey, is a high misdemeanor

under the laws of that State); or

(2) Fleeing to avoid custody or

confinement after conviction for a

crime, or an attempt to commit a crime,

which is a felony under the laws of the

place from which the individual flees

(or which, in the case of the State of

New Jersey, is a high misdemeanor

under the laws of that State); or

(3) Violating a condition of probation

or parole imposed under Federal or

State law.

(b) Suspension Effective date. (1)

Suspension of benefit payments because

an individual is a fugitive as described

in paragraph (a)(1) or (a)(2) of this

section or a probation or parole violator

as described in paragraph (a)(3) of this

section is effective with the first day of

whichever of the following months is

earlier—

(i) The month in which a warrant or

order for the individual’s arrest or

apprehension, an order requiring the

individual’s appearance before a court

or other appropriate tribunal (e.g., a

parole board), or similar order is issued

by a court or other duly authorized

tribunal on the basis of an appropriate

finding that the individual—

(A) Is fleeing, or has fled, to avoid

prosecution as described in paragraph

(a)(1) of this section;

(B) Is fleeing, or has fled, to avoid

custody or confinement after conviction

as described in paragraph (a)(2) of this

section; or

(C) Is violating, or has violated, a

condition of his or her probation or

parole as described in paragraph (a)(3)

of this section; or

(ii) The first month during which the

individual fled to avoid such

prosecution, fled to avoid such custody

or confinement after conviction, or

violated a condition of his or her

probation or parole, if indicated in such

warrant or order, or in a decision by a

court or other appropriate tribunal.

(2) An individual will not be

considered to be ineligible for SSI

benefits and benefit payments will not

be suspended under this section for any

month prior to August 1996.

(c) Resumption of payments. If

benefits are otherwise payable, they will

be resumed effective with the first

month throughout which the individual

is determined to be no longer fleeing to

avoid such prosecution, fleeing to avoid

such custody or confinement after

conviction, or violating a condition of

his or her probation or parole.

[FR Doc. 98–15699 Filed 6–11–98; 8:45 am]

BILLING CODE 4190–29–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG–106031–98]

RIN 1545–AW13

Trading Safe Harbors

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Notice of proposed rulemaking

and notice of public hearing.

SUMMARY: This document contains

proposed rules for the treatment of

foreign taxpayers trading in derivative

financial instruments for their own

account. These proposed rules provide

that foreign taxpayers who effect

transactions in derivative financial

instruments for their own accounts are

not thereby engaged in a trade or

business in the United States if they are

not dealers in stocks, securities,

commodities or derivatives. These

proposed rules affect foreign persons

that conduct such trading for their own

account either directly through U.S.

offices or indirectly through

partnerships or other agents. This

document also provides notice of a

public hearing on these proposed

regulations.

DATES: Written comments must be

received by September 10, 1998.

Outlines of oral comments to be

discussed at the public hearing

scheduled for September 9, 1998, must

be received by August 19, 1998.

ADDRESSES: Send submissions to:

CC:DOM:CORP:R (REG–106031–98),

room 5226, Internal Revenue Service,

POB 7604, Ben Franklin Station,

Washington, DC 20044. Submissions

may be hand delivered between the

hours of 8 a.m. and 5 p.m. to:

CC:DOM:CORP:R (REG–106031–98),

Courier’s Desk, Internal Revenue

Service, 1111 Constitution Avenue NW.,

Washington, DC. Alternatively,

taxpayers may submit comments

electronically via the Internet by

selecting the ‘‘Tax Regs’’ option on the

IRS Home Page, or by submitting

comments directly to the IRS Internet

site at http://www.irs.ustreas.gov/prod/

tax—regs/comments.html. The public

hearing will be held in room 2615,

Internal Revenue Building, 1111

Constitution Avenue NW., Washington,

DC.

FOR FURTHER INFORMATION CONTACT:

Milton Cahn of the Office of Associate

Chief Counsel (International), (202)

622–3870; concerning submissions and

the hearing, LaNita Van Dyke, (202)

622–7190 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

Section 864(b) of the Code provides

that the phrase ‘‘trade or business

within the United States’’ generally

includes the performance of personal

services within the United States at any

time during the taxable year but, under

certain circumstances, does not include

trading in stocks, securities, or

commodities through an independent

agent or for a taxpayer’s own account

(the ‘‘trading safe harbors’’).

Regulations regarding certain aspects

of the trading safe harbors were

promulgated in 1972. Since the

promulgation of these regulations, the

use of derivative financial instruments

has increased significantly. This is due

in large measure to the overall

expansion and growing sophistication of

global capital markets. Although

guidance concerning the tax treatment

of derivatives and notional principal

contracts has been issued under other

provisions of the Code (see, e.g.,

§§ 1.446–3, 1.863–7(b)), the section

864(b) regulations have not been

modernized to take into account the

manner in which taxpayers customarily

use derivative transactions.

Explanation of Provisions

1. In General

These proposed regulations provide

that foreign taxpayers who are not

dealers with respect to any derivative

transactions, who are not otherwise

dealers in stocks, securities, or

commodities, and who enter into

derivative transactions for their own