Federal Register / Vol. 79, No. 5 / Wednesday, January 8, 2014 / Proposed Rules 1347 

(202) 267–9677, to request a copy of 

Advisory Circular No. 11–2A, Notice of 

Proposed Rulemaking Distribution 

System, which describes the application 

procedure. 

The Proposal 

This action proposes to amend Title 

14, Code of Federal Regulations (14 

CFR), Part 71 by establishing Class E 

airspace extending upward from 700 

feet above the surface within a 6.3-mile 

radius to accommodate new standard 

instrument approach procedures at 

Warsaw Municipal Airport, Warsaw, 

MO. Controlled airspace is needed for 

the safety and management of IFR 

operations at the airport. 

Class E airspace areas are published 

in Paragraph 6005 of FAA Order 

7400.9X, dated August 7, 2013 and 

effective September 15, 2013, which is 

incorporated by reference in 14 CFR 

71.1. The Class E airspace designation 

listed in this document would be 

published subsequently in the Order. 

The FAA has determined that this 

proposed regulation only involves an 

established body of technical 

regulations for which frequent and 

routine amendments are necessary to 

keep them operationally current. It, 

therefore, (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. 

The FAA’s authority to issue rules 

regarding aviation safety is found in 

Title 49 of the U.S. Code. Subtitle 1, 

Section 106 describes the authority of 

the FAA Administrator. Subtitle VII, 

Aviation Programs, describes in more 

detail the scope of the agency’s 

authority. This rulemaking is 

promulgated under the authority 

described in Subtitle VII, Part A, 

Subpart I, Section 40103. Under that 

section, the FAA is charged with 

prescribing regulations to assign the use 

of airspace necessary to ensure the 

safety of aircraft and the efficient use of 

airspace. This regulation is within the 

scope of that authority as it would 

establish controlled airspace at Warsaw 

Municipal Airport, Warsaw, MO. 

Environmental Review 

This proposal will be subject to an 

environmental analysis in accordance 

with FAA Order 1050.1E, 

‘‘Environmental Impacts: Policies and 

Procedures’’ prior to any FAA final 

regulatory action. 

List of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (air). 

The Proposed Amendment 

In consideration of the foregoing, the 

Federal Aviation Administration 

proposes to amend 14 CFR part 71 as 

follows: 

PART 71—DESIGNATION OF CLASS A, 

B, C, D, AND E AIRSPACE AREAS; AIR 

TRAFFIC SERVICE ROUTES; AND 

REPORTING POINTS 

■ 1. The authority citation for part 71 

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. 

§ 71.1 [Amended] 

■ 2. The incorporation by reference in 

14 CFR 71.1 of FAA Order 7400.9X, 

Airspace Designations and Reporting 

Points, dated August 7, 2013, and 

effective September 15, 2013, is 

amended as follows: 

Paragraph 6005 Class E Airspace areas 

extending upward from 700 feet or more 

above the surface of the earth. 

* * * * * 

ACE MO E5 Warsaw, MO [New] 

Warsaw Municipal Airport, MO 

(Lat. 38°20′52′′ N., long. 93°20′43′′ W.) 

That airspace extending upward from 700 

feet above the surface within a 6.3-mile 

radius of Warsaw Municipal Airport 

Issued in Fort Worth, TX, on December 18, 

2013. 

David P. Medina, 

Manager, Operations Support Group, ATO 

Central Service Center. 

[FR Doc. 2014–00113 Filed 1–7–14; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Chapter I 

Request for Comment on Application 

of Commission Regulations to Swaps 

Between Non-U.S. Swap Dealers and 

Non-U.S. Counterparties Involving 

Personnel or Agents of the Non-U.S. 

Swap Dealers Located in the United 

States 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Request for comment. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘Commission’’) is 

requesting comment on an advisory 

issued by Commission staff on 

November 14, 2013 (the ‘‘Staff 

Advisory’’), regarding the applicability 

of certain Commission regulations to the 

activity in the United States of swap 

dealers (‘‘SDs’’) and major swap 

participants (‘‘MSPs’’) registered with 

the Commission that are established in 

jurisdictions other than the United 

States (whether an affiliate or not of a 

U.S. person, a ‘‘non-U.S. SD’’ or ‘‘nonU.S. MSP’’). 

DATES: Comments must be received on 

or before March 10, 2014. 

ADDRESSES: You may submit comments 

by any of the following methods: 

• The agency’s Web site, at http:// 

comments.cftc.gov. Follow the 

instructions for submitting comments 

through the Web site. 

• Mail: Melissa D. Jurgens, Secretary 

of the Commission, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street NW., 

Washington, DC 20581. 

• Hand Delivery/Courier: Same as 

mail above. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Please submit your comments using 

only one method. 

All comments must be submitted in 

English, or if not, accompanied by an 

English translation. Comments may be 

posted as received to http:// 

www.cftc.gov. You should submit only 

information that you wish to make 

available publicly. If you wish the 

Commission to consider information 

that may be exempt from disclosure 

under the Freedom of Information Act, 

a petition for confidential treatment of 

the exempt information may be 

submitted according to the established 

procedures in CFTC Regulation 145.9 

(17 CFR 145.9). 

The Commission reserves the right, 

but shall have no obligation, to review, 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

1348 Federal Register / Vol. 79, No. 5 / Wednesday, January 8, 2014 / Proposed Rules 

1Public Law 111–203, 124 Stat. 1376 (2010). 

2See Interpretive Guidance and Policy Statement 

Regarding Compliance with Certain Swap 

Regulations 78 FR 45292 (July 26, 2013) 

(hereinafter, the ‘‘Guidance’’). 3For purposes of this notice, the Commission 

would generally interpret the terms ‘‘U.S. person,’’ 

‘‘guaranteed affiliate,’’ and ‘‘affiliate conduit’’ in the 

same way as described in the Guidance, 78 FR at 

45316–45317, 45350–45359. The Commission uses 

the term ‘‘non-U.S. person’’ to refer to any person 

outside its interpretation of the term ‘‘U.S. person.’’ 

4The Guidance generally describes the policy and 

procedural framework under which the 

Commission would consider a substituted 

compliance program with respect to Commission 

regulations applicable to non-U.S. SDs. Specifically, 

the Commission described circumstances where it 

expected that compliance with a comparable 

regulatory requirement of a foreign jurisdiction 

would serve as a reasonable substitute for 

compliance with the attendant requirements of the 

CEA and the Commission’s regulations, 78 FR at 

45342–45344. 

5The compliance dates are summarized on the 

Compliance Dates page of the Commission’s Web 

site. (http://www.cftc.gov/LawRegulation/ 

DoddFrankAct/ComplianceDates/index.htm.) 

6 Division of Swap Dealer and Intermediary 

Oversight, Applicability of Transaction-Level 

Requirements to Activity in the United States, Nov. 

14, 2013. Available at: http://www.cftc.gov/ucm/ 

groups/public/@1rlettergeneral/documents/letter/ 

13-69.pdf. As stated in the Staff Advisory, the 

advisory, and the views expressed therein, 

represent the views of the Division of Swap Dealer 

and Intermediary Oversight only, and do not 

represent the position or view of the Commission 

or of any other office or division of the Commission. 

7See the Staff Advisory, supra note 6. 

8See CFTC Staff Letter 13–71, available on the 

Commission’s Web site: http://www.cftc.gov/ucm/ 

groups/public/@lrlettergeneral/documents/letter/ 

13-71.pdf. 

9See CFTC Staff Letter 14–01, available on the 

Commission’s Web site. 

pre-screen, filter, redact, refuse, or 

remove any or all of your submission 

from www.cftc.gov that it may deem to 

be inappropriate for publication, such as 

obscene language. All submissions that 

have been redacted or removed that 

contain comments on the merits of the 

rulemaking will be retained in the 

public comment file and will be 

considered as required under the 

Administrative Procedure Act and other 

applicable laws, and may be accessible 

under the Freedom of Information Act. 

FOR FURTHER INFORMATION CONTACT: Gary 

Barnett, Director, 202–418–5977, 

gbarnett@cftc.gov, or Frank Fisanich, 

Chief Counsel, 202–418–5949, 

ffisanich@cftc.gov, Division of Swap 

Dealer and Intermediary Oversight, 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On July 21, 2010, President Obama 

signed the Dodd-Frank Wall Street 

Reform and Consumer Protection Act 1

(‘‘Dodd-Frank Act’’ or ‘‘Dodd-Frank’’), 

which, in Title VII, established a new 

regulatory framework for swaps. 

In the three years since the enactment 

of Dodd-Frank, the Commission has 

finalized 68 rules, orders, and guidance 

statements in the process of 

implementing Title VII of the DoddFrank Act. The finalized rules 

promulgated under section 4s of the 

CEA, added by the Dodd-Frank Act, 

address registration of SDs and MSPs 

and other substantive requirements 

applicable to SDs and MSPs, while 

guidance published by the Commission 

provided the Commission’s general 

views regarding the scope of the crossborder application of such rules.2

Among other things, the Guidance sets 

forth the Commission’s general views on 

how it ordinarily expects to apply, in 

accordance with section 2(i) of the CEA, 

the CEA and certain Commission 

regulations applicable on a transactionby-transaction basis (the ‘‘transactional 

requirements’’) to swaps between a nonU.S. SD and a non-U.S. person, 

including swaps involving guaranteed 

or conduit affiliates of U.S. persons.3 In 

addition, the Guidance addressed the 

circumstances under which the 

transactional requirements could be 

satisfied through substituted 

compliance.4

With few exceptions, the delayed 

compliance dates for the Commission’s 

regulations implementing requirements 

of section 4s of the CEA have passed 

and SDs and MSPs are now required to 

be in full compliance with such 

regulations upon registration with the 

Commission.5

Subsequent to publication of the 

Guidance, swap market participants 

have raised questions with Commission 

staff regarding compliance by non-U.S. 

SDs with the transactional requirements 

when using personnel or agents located 

in the United States to enter into swaps 

with non-U.S. persons. In other words, 

swap market participants have asked 

whether the transactional requirements 

would apply to these swaps (and if so, 

whether substituted compliance may be 

available for these swaps) even though 

such swaps are between two non-U.S. 

persons, regardless of whether the 

activities of the non-U.S. SD that lead to 

such swaps take place in the United 

States. 

In response to these inquires, the Staff 

Advisory 6 was issued, stating that for 

swaps between a non-U.S. SD and a 

non-U.S. person, the transactional 

requirements either do not apply or, in 

some cases, may be subject to 

substituted compliance if the activities 

of the non-U.S. SD take place outside 

the United States. The Staff Advisory 

further stated that, for transactions 

arranged, executed, or negotiated by 

personnel or agents located in the 

United States of non-U.S. SDs (whether 

affiliates or not of a U.S. person) 

regularly using personnel or agents 

located in the U.S. to arrange, negotiate, 

or execute swaps with non-U.S. persons 

(the ‘‘Covered Transactions’’), the nonU.S. SD generally would be required to 

comply with the transactional 

requirements. The Staff Advisory 

further stated that this view would also 

apply to a Covered Transaction booked 

in a non-U.S. branch of the non-U.S. 

SD.7

The Commission notes that 

subsequent to the Staff Advisory, the 

Commission’s Divisions of Swap Dealer 

and Intermediary Oversight, Market 

Oversight, and Clearing and Risk 

provided non-U.S. SDs time-limited 

staff no-action relief from certain 

transactional requirements for Covered 

Transactions,8 and have recently 

extended such relief until September 15, 

2014, subject to certain terms and 

conditions stated in such Divisions’ noaction letter.9

II. Request for Comment 

In view of the complex legal and 

policy issues involved with respect to 

the Staff Advisory, the Commission is 

soliciting comment from all interested 

parties to further inform the 

Commission’s and its staff’s 

deliberations regarding the subjects 

addressed in the Staff Advisory. 

Accordingly, the Commission 

requests comment on all aspects of the 

Staff Advisory, including but not 

limited to the following points. If a 

comment relates to one of the specific 

points noted below, please identify the 

point by number and provide a detailed 

rationale supporting the response. 

1. The Commission invites comment 

on whether the Commission should 

adopt the Staff Advisory as Commission 

policy, in whole or in part. 

2. The Commission invites 

commenters to provide their views on 

whether transactional requirements 

should apply to Covered Transactions 

with non-U.S. persons who are not 

guaranteed or conduit affiliates of U.S. 

persons. Please provide a detailed 

analysis of any such view and its effect 

on other aspects of the Commission’s 

cross-border policy, if any. 

3. The Commission invites comment 

on whether there should be any 

differentiation in treatment of swaps 

with non-U.S. counterparties depending 

on the nature of the SD (i.e., whether it 

is a guaranteed affiliate or a conduit 

affiliate of a U.S. person). 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 79, No. 5 / Wednesday, January 8, 2014 / Proposed Rules 1349 

1 7 U.S.C. 2(i). 

2See Statement of Dissent by Commissioner Scott 

D. O’Malia, Interpretive Guidance and Policy 

Statement Regarding Compliance With Certain 

Swap Regulations and Related Exemptive Order, 

July 12, 2013, http://www.cftc.gov/PressRoom/ 

SpeechesTestimony/omaliastatement071213b. 

3 7 U.S.C. 2(i). 

4 7 U.S.C. 2(a)(1). 

5Transcript of Open Meeting to Consider CrossBorder Final Guidance and Cross-Border Phase-In 

Exemptive Order (July 12, 2013), page 79. 

4. To the extent a non-U.S. SD must 

comply with the transactional 

requirements when entering a Covered 

Transaction, should the non-U.S. SD be 

able to rely on a substituted compliance 

program for purposes of complying with 

the relevant transactional requirements? 

If so, should substituted compliance be 

available for all transactional 

requirements or only specific 

requirements? Which requirements? 

Would the response be different 

depending on the nature of the 

counterparty (i.e., whether the non-U.S. 

counterparty is a guaranteed affiliate or 

a conduit affiliate of a U.S. person)? 

5. The Commission invites comment 

on the meaning of ‘‘regularly’’ in the 

phrase ‘‘persons regularly arranging, 

negotiating, or executing swaps for or on 

behalf of an SD’’ and whether such 

persons are performing core, front-office 

activities of that SD’s swap dealing 

business. If not, what specific activities 

would constitute the core, front-office 

activities of an SD’s swap dealing 

business? What characteristics or factors 

distinguish a ‘‘core, front-office’’ activity 

from other activities? Please be 

exhaustive in describing such activities. 

6. The Commission invites comment 

on the scope and degree of ‘‘arranging, 

negotiating, or executing’’ swaps as used 

in this context. 

Issued in Washington, DC, on January 3, 

2014, by the Commission. 

Melissa D. Jurgens, 

Secretary of the Commission. 

Appendices To Request for Comment 

on Application of Commission 

Regulations to Swaps Between NonU.S. Swap Dealers and Non-U.S. 

Counterparties Involving Personnel or 

Agents of the Non-U.S. Swap Dealers 

Located in the United States 

Appendix 1—Commission Voting 

Summary 

On this matter, Chairman Gensler and 

Commissioners Chilton and Wetjen voted in 

the affirmative. Commissioner O’Malia voted 

in the negative. 

Appendix 2—Dissenting Statement of 

Commissioner Scott D. O’Malia 

If you thought that the Commission’s 

approach last year regarding cross-border 

issues resulted in an unsound rulemaking 

process, the start of 2014 is no better. 

Today’s announcement of the request for 

comment on a staff Advisory abrogates the 

Commission’s fundamental legal obligations 

under the Administrative Procedure Act 

(‘‘APA’’) and provides another example of 

the Commission’s unsound rule 

implementation process. 

Making matters worse, today’s request for 

comment is completely outside the scope of 

the cross-border Guidance and the Exemptive 

Order as the Commission did not address the 

issue relating to swaps negotiated between 

non-U.S. swap dealers (‘‘SDs’’) and non-U.S. 

counterparties acting through agents of the 

non-U.S. SDs located in the United States. 

This is simply a strategic move by the 

Commission to try to duck blame for 

consistently circumventing the fundamental 

tenets of the APA and failing to adhere 

faithfully to the express congressional 

directive to limit the extraterritorial 

application of the Dodd-Frank Act to foreign 

transactions that ‘‘have a direct and 

significant connection with activities in, or 

effect on, commerce of the United States.’’ 1

Moreover, I question why the Commission 

has decided to request comment on a narrow 

issue of the extraterritorial application of 

Dodd-Frank, while essentially ignoring the 

dozens of comments already filed as part of 

the Commission’s cross-border Exemptive 

Order.2 Simply requesting comment on a 

staff Advisory does not endorse the validity 

of the cross-border Guidance or the staff 

Advisory issued based on the Guidance. 

Additionally, I have serious concerns with 

the evolving jurisdictional application of the 

Commission’s authority over cross-border 

trades. It appears based on the staff Advisory, 

that the Commission is applying a 

‘‘territorial’’ jurisdiction test to elements of a 

trade between non-U.S. entities. To better 

understand the legal underpinnings of this 

position, I have included several additional 

questions to be considered as part of the 

overall comment file. It is my hope that 

public comments will provide greater clarity 

regarding our cross-border authority and 

identify areas where we must harmonize 

global rules with our international regulatory 

partners in the near future. It makes no sense 

to apply guidance or staff advisories that do 

not enjoy the full support and authority 

provided through rulemakings based on the 

Commodity Exchange Act (‘‘CEA’’). 

Looking forward into this year, the CFTC 

needs to do away with the reflexive rule 

implementation process via staff no-action 

and advisories that are not voted on by the 

Commission. It should be the goal of the 

Commission to develop rules that adhere to 

the APA and ensure proper regulatory 

oversight, transparency and promote 

competition in the derivatives space. 

In this regard, I would like to seek 

additional comment on the following points: 

1. Please provide your views on whether 

Covered Transactions with non-U.S. persons 

who are not guaranteed or conduit affiliates 

of U.S. persons meet the direct and 

significant test under CEA section 2(i).3

Please provide a detailed analysis of any 

such view and its effect on other aspects of 

the Commission’s cross-border policy, if any. 

Would your view change depending on 

whether a non-U.S. SD is a guaranteed 

affiliate or a conduit affiliate of a U.S. 

person? 

2. CEA section 2(a)(1) 4 provides for the 

general jurisidiction of the Commission. 

Please provide your views on whether 

Covered Transactions with non-U.S. persons 

who are not guaranteed or conduit affiliates 

of U.S. persons fall within the Commission’s 

jurisdiction under CEA section 2(a)(1) or any 

other provision of the CEA providing for 

Commission jurisdiction. Please provide a 

detailed analysis of any such view and its 

effect on other aspects of the Commission’s 

cross-border policy, if any. Would your view 

change depending on the nature of the nonU.S. SD (i.e., whether it is a guaranteed 

affiliate or a conduit affiliate of a U.S. 

person)? 

3. To the extent that Covered Transactions 

fall within the Commission’s jurisdiction, 

should a non-U.S. SD be required to comply 

with all, or only certain, Transaction-Level 

Requirements? Please provide a detailed 

analysis of any such view and its effect on 

other aspects of the Commission’s crossborder policy, if any. Would your view 

change depending on the nature of the nonU.S. SD (i.e., whether it is a guaranteed 

affiliate or a conduit affiliate of a U.S. 

person)? 

4. In the open meeting to consider the 

cross-border final guidance and cross-border 

phase-in exemptive order, I asked about the 

Commission’s enforcement and legal 

authority under the cross-border guidance. 

The Commission’s General Counsel replied, 

‘‘[T]he guidance itself is not binding strictly. 

We couldn’t go into court and, in a count of 

the complaint, list a violation of the guidance 

as an actionable claim.’’ 5 If the Commission 

adopts the staff Advisory as Commission 

policy (and not through the rulemaking 

process), please provide your views on the 

Commission’s ability to enforce such policy. 

[FR Doc. 2014–00080 Filed 1–7–14; 8:45 am] 

BILLING CODE 6351–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R06–OAR–2010–0335; FRL–9905–04– 

Region 6] 

Approval and Promulgation of 

Implementation Plans; Texas; 

Procedures for Stringency 

Determinations and Minor Permit 

Revisions for Federal Operating 

Permits 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Withdrawal of proposed rule. 

SUMMARY: On September 10, 2013, the 

Environmental Protection Agency (EPA) 

mstockstill on DSK4VPTVN1PROD with PROPOSALS