56512 Federal Register / Vol. 75, No. 179 / Thursday, September 16, 2010 / Notices 

1See Dodd-Frank Wall Street Reform and 

Consumer Protection Act, Pub. L. No. 111–203, 124 

Stat. 1376 (2010). The text of the Dodd-Frank Act 

may be accessed at http://www.cftc.gov./

LawRegulation/OTCDERIVATIVES/index.htm. 

2Pursuant to Section 701 of the Dodd-Frank Act, 

Title VII may be cited as the ‘‘Wall Street 

Transparency and Accountability Act of 2010.’’ 

3 7 U.S.C. 1 et seq. 

4See Commodity Futures Modernization Act of 

2000, Pub. L. 106–554, 114 Stat. 2763 (2000). 

5See Section 723(a)(1)(A) of the Dodd-Frank Act. 

6Under CEA Section 1a(14), an exempt 

commodity is defined as a commodity that is 

neither an excluded nor an agricultural commodity. 

Generally, the term encompasses energy and metals 

commodities. 

• Enhance the quality, usefulness, 

and clarity of the information to be 

collected; and 

• Minimize the burden of collection 

of information on those who are to 

respond, including through the use of 

appropriate automated electronic, 

mechanical, or other technological 

collection techniques or other forms of 

information technology; e.g., permitting 

electronic submission of responses. 

Burden Statement: The respondent 

burden for this collection is estimated to 

average .59 hours per response. These 

estimates include the time needed to 

review instructions; develop, acquire, 

install, and utilize technology and 

systems for the purposes of collecting, 

validating, and verifying information, 

processing and maintaining information 

and disclosing and providing 

information; adjust the existing ways to 

comply with any previously applicable 

instructions and requirements; train 

personnel to be able to respond to a 

collection of information; and transmit 

or otherwise disclose the information. 

Respondents/Affected Entities: 147. 

Estimated Number of Responses: 

2,739.90 

Estimated Total Annual Burden on 

Respondents: 1,624.08. hours 

Frequency of Collection: On occasion. 

Burden means the total time, effort, or 

financial resources expended by persons 

to generate, maintain, retain, disclose or 

provide information to or for a federal 

agency. This includes the time needed 

to review instructions; develop, acquire, 

install, and utilize technology and 

systems for the purposes of collecting, 

validating, and verifying information, 

processing and maintaining information 

and disclosing and providing 

information; adjust the existing ways to 

comply with any previously applicable 

instructions and requirements; train 

personnel to be able to respond to a 

collection of information; and transmit 

or otherwise disclose the information. 

Dated: September 10, 2010. 

David A. Stawick, 

Secretary of the Commission. 

[FR Doc. 2010–23140 Filed 9–15–10; 8:45 am] 

BILLING CODE 6351–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

Notice Regarding the Treatment of 

Petitions Seeking Grandfather Relief 

for Trading Activity Done in Reliance 

Upon Section 2(h)(1)–(2) of the 

Commodity Exchange Act 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice. 

SUMMARY: Section 723 of the DoddFrank Wall Street Reform and Consumer 

Protection Act permits persons 

transacting business in exempt 

commodities in reliance upon Section 

2(h) of the Commodity Exchange Act to 

petition the Commission for grandfather 

relief enabling them to continue to rely 

on Section 2(h) after the effective date 

of the Dodd-Frank Wall Street Reform 

and Consumer Protection Act. While 

persons may submit such grandfather 

relief petitions in accordance with the 

procedures provided herein, at this time 

the Commission has determined that it 

will not be issuing such relief to persons 

seeking to continue to rely on Section 

2(h)(1)–(2). The Commission is prepared 

to revisit its decision in the future 

should it be necessary in order to ensure 

a smooth transition to the new 

regulatory regime mandated by the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act. Any relief 

that the Commission determines to grant 

in the future will not be limited to 

persons that may file a petition. 

DATES: Effective date: September 10, 

2010 Petitions for relief will be accepted 

until September 20, 2010. Comments on 

this notice will be accepted until 

October 18, 2010. 

ADDRESSES: You may submit comments 

or petitions for relief, identified with 

‘‘Section 2(h)(1)–(2) Grandfather Relief’’ 

in the subject line, by any of the 

following methods: 

• E-mail for comments: 

pgfrcomment@cftc.gov. E-mail for 

petitions: pgfrpetition@cftc.gov. 

• Mail: David A. Stawick, 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. 

All comments must be submitted in 

English, or if not, accompanied by an 

English translation. Comments and 

petitions will be posted as received to 

http://www.cftc.gov. 

FOR FURTHER INFORMATION CONTACT: 

David P. Van Wagner, Chief Counsel, 

Division of Market Oversight, 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. Telephone: (202) 418–5481. Email: dvanwagner@cftc.gov; or Beverly 

E. Loew, Assistant General Counsel, 

Office of the General Counsel, same 

address. Telephone: (202) 418–5648. Email: bloew@cftc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Treatment of Petitions for 

Grandfather Relief Received From 

Persons Relying Upon Section 2(h)(1)– 

(2) of the Commodity Exchange Act 

On July 21, 2010, President Obama 

signed into law the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (‘‘Dodd-Frank Act’’).1 Title VII of the 

Dodd-Frank Act 2 will amend the 

Commodity Exchange Act (‘‘CEA’’) 3 to 

establish a comprehensive new 

regulatory framework for swaps and 

security-based swaps. As part of the 

revisions to the CEA, the Dodd-Frank 

Act will delete various provisions from 

the CEA that were first established by 

the Commodity Futures Modernization 

Act of 2000 (‘‘CFMA’’) 4 to permit the 

trading of derivative instruments off of 

regulated markets. Among other such 

provisions, the Dodd-Frank Act will 

strike Section 2(h)(1)–(2) (the ‘‘Exempt 

Commodity Exemption’’) from the CEA, 

effective July 15, 2011.5 CEA Section 

2(h)(1)–(2) generally provides that 

bilateral ‘‘exempt commodity’’ 6

transactions entered into between 

eligible contract participants, as that 

term is defined by CEA Section 1a(12), 

are exempt from all of the provisions of 

the CEA, except for the anti-fraud and 

anti-manipulation provisions. 

Section 723(c)(1) of the Dodd-Frank 

Act provides that a person who is 

subject to the Exempt Commodity 

Exemption may petition the 

Commission to continue to operate 

pursuant to Section 2(h)(1)–(2) by 

submitting a petition to the Commission 

within 60 days of the enactment of the 

Dodd-Frank Act (i.e., by September 20, 

2010). Section 723(c)(1) further states 

that the Commission must consider all 

such petitions in a ‘‘prompt manner’’ 

and may grant grandfather relief for up 

to one year. The Dodd-Frank Act does 

not suggest any standard for the 

Commission to evaluate grandfather 

relief petitions from parties seeking to 

continue their reliance on the Exempt 

Commodity Exemption. 

Ordinarily, a grandfather clause in a 

regulatory statute relieves or exempts 

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Federal Register / Vol. 75, No. 179 / Thursday, September 16, 2010 / Notices 56513 

7See Sections 731 and 747 of the Dodd-Frank 

Act. 

8 In a separate action, the Commission has issued 

orders providing grandfather relief to parties 

affected by the Dodd-Frank Act’s elimination of the 

CEA Section 2(h)(3)–(7) exempt commercial market 

(‘‘ECM’’) provision and the CEA Section 5d exempt 

board of trade (‘‘EBOT’’) provision. In that matter, 

the Commission foresaw that many entities that 

currently operate as ECMs or EBOTs will seek to 

become either swap execution facilities (‘‘SEFs’’) or 

designated contract markets (‘‘DCMs’’) when the 

Commission adopts regulations implementing 

Dodd-Frank’s requirements for those facilities. 

Because the new SEF and DCM regulatory 

provisions are not likely to be completed until close 

to the same time that the ECM and EBOT provisions 

are deleted from the CEA, the Commission 

anticipated that there would be a large number of 

new SEF and DCM applications at that time. In 

order to ease this congestion of applications, and to 

facilitate the transition of current ECM and EBOT 

businesses to the new regulatory regime mandated 

by the Dodd-Frank Act, the Commission provided 

limited grandfather relief to EBOTs and ECMs. 

9 In addition to deleting the CEA Section 2(h)(1)– 

(2) Exempt Commodity Exemption from the CEA, 

the Dodd-Frank Act also will delete two other 

provisions that provide for the exclusion of bilateral 

swaps from the CEA—Section 2(d)(2) for excluded 

commodities (mostly financial products) and 

Section 2(g) for non-agricultural commodities. The 

Commission notes that the Dodd-Frank Act does 

not provide for the possibility of any grandfather 

relief for parties relying on those exclusions, which 

partially overlap with the Section 2(h)(1)–(2). The 

Commission also pledges to be attentive to the 

transition needs of parties that rely on those 

provisions, as well as Section 2(h)(1)–(2) users, as 

it considers Dodd-Frank Act-required regulations. 

10 44 U.S.C. 3501 et seq. 

11 5 CFR 1320.3(h)(4). 

12 7 U.S.C. 19(a). 

13 5 U.S.C. 601(2). 

14See 5 U.S.C 603. 

those already involved in an activity or 

business from the new regulations to be 

established by the statute because it is 

anticipated that it may be difficult for 

the parties to transition the activity or 

business to the new regulatory scheme. 

The Commission is aware of the 

transformational nature of the DoddFrank Act and its potential impact on 

the swaps industry. The Commission 

also recognizes that bilateral swaps 

trading activity currently conducted in 

reliance upon the CEA’s Exempt 

Commodity Exemption will likely 

become subject to any number of 

regulatory provisions implementing the 

requirements of the Dodd-Frank Act, 

including business conduct standards, 

recordkeeping and reporting 

requirements, and capital and margin 

requirements.7 Until the contents and 

timing of the Commission’s regulations 

affecting bilateral swaps are better 

known, however, the Commission has 

determined not to grant grandfather 

relief as it is impossible to know at this 

time whether such relief will be 

necessary.8

In implementing the important 

requirements of the Dodd-Frank Act, the 

Commission will strive to ensure that 

current practices will not be unduly 

disrupted during the transition to the 

new regulatory regime. Persons relying 

upon the Exempt Commodity 

Exemption will have an opportunity to 

comment on each of the rulemakings 

that may affect them, which will permit 

the Commission to consider and adopt 

appropriate regulatory provisions to 

address transitioning from the Exempt 

Commodity Exemption to the DoddFrank regulations as they become 

effective. Additionally, while the 

Commission has chosen at this time not 

to grant grandfather relief to parties that 

rely on the Exempt Commodity 

Exemption, if it later determines that 

Dodd-Frank Act-required regulations 

might pose particular difficulties for 

such parties that cannot be addressed in 

final regulations, the Commission is 

committed to use its available 

exemptive authorities to address such a 

situation. Any relief that the 

Commission determines to grant will 

not be limited to persons who may wish 

to file a petition.9

II. Related Matters 

a. Paperwork Reduction Act 

This notice does not impose any 

recordkeeping or information collection 

requirements, or other collections of 

information that require approval of the 

Office of Management and Budget 

(‘‘OMB’’) under the Paperwork 

Reduction Act (‘‘PRA’’).10 Requests for 

comment that are published in the 

Federal Register in which collections of 

information are not embedded are 

excluded from PRA compliance by OMB 

regulations.11 Collections of information 

that may be required as a condition for 

the grant of grandfather relief for 

persons relying on the Exempt 

Commodity Exemption will be 

addressed at the time such conditions 

may be imposed. 

b. Cost-Benefit Analysis 

Section 15(a) of the CEA 12 requires 

the Commission to consider the costs 

and benefits of its actions before taking 

certain actions under the Act. This 

notice is neither a regulation nor an 

order to which Section 15(a) applies. 

c. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(‘‘RFA’’) requires that agencies consider 

the impact of their rules on small 

businesses. This notice is not a ‘‘rule for 

which the agency publishes a general 

notice of proposed rulemaking.’’ 13

Therefore, the Commission is not 

required to conduct a regulatory 

flexibility analysis.14

Issued in Washington, DC, on September 

10, 2010, by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

Concurring Statement of Commissioner 

Scott D. O’Malia 

Regarding the Treatment of Petitions 

Seeking Grandfather Relief Pursuant to 

Section 723 of the Dodd-Frank Act for 

Trading Activity Done in Reliance 

Upon Section 2(h)(1)–(2) 

I concur in the Commission’s decision to 

presently decline to grant relief under 

Section 723 of the Dodd-Frank Act to persons 

transacting business in exempt commodities 

in reliance upon Sections 2(h)(1)–(2) of the 

Commodity Exchange Act (the ‘‘Act’’). While 

the Commission has chosen to decline to 

grant relief at this time, it is not restricted 

from using its authority to address and 

provide relief to such persons in the future. 

In an effort to proactively ensure the 

smoothest possible transition of these 

bilateral markets for transactions in exempt 

commodities into the new regulatory 

landscape, it is my hope that the Commission 

will revisit the issue at least ninety days prior 

to the Dodd-Frank Act effective date. The 

Commission remains committed to the 

efficient functioning of the markets in 

exempt commodities, and the path that we 

take in each rulemaking under the DoddFrank Act will only be enhanced by the 

comments we receive. Therefore, I urge all 

market participants who currently rely on 

Sections 2(h)(1)–(2) of the Act to help shape 

the new regulatory frontier by submitting 

their comments to the Commission. 

[FR Doc. 2010–23141 Filed 9–15–10; 8:45 am] 

BILLING CODE 6351–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

Orders Regarding the Treatment of 

Petitions Seeking Grandfather Relief 

for Exempt Commercial Markets and 

Exempt Boards of Trade 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice; final orders. 

SUMMARY: The Commission is issuing 

orders whereby entities currently 

operating as exempt commercial 

markets, pursuant to Section 2(h)(3)–(7) 

of the Commodity Exchange Act, or 

exempt boards of trade, pursuant to 

Section 5d of the Commodity Exchange 

Act, may receive grandfather relief to 

continue to operate in accordance with 

those provisions notwithstanding their 

deletion from the Commodity Exchange 

Act, effective July 15, 2011, by the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act. The 

Commission’s orders set forth various 

conditions for such grandfather relief, 

including the filing of a relief petition 

mstockstill on DSKH9S0YB1PROD with NOTICES