1538 Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 

Class D and E airspace designations 

are published in paragraph 5000, and 

6005, respectively, of FAA Order 

7400.11B dated August 3, 2017, and 

effective September 15, 2017, which is 

incorporated by reference in 14 CFR 

71.1. The Class E airspace designations 

listed in this document will be 

published subsequently in the Order. 

Availability and Summary of 

Documents for Incorporation by 

Reference 

This document proposes to amend 

FAA Order 7400.11B, Airspace 

Designations and Reporting Points, 

dated August 3, 2017, and effective 

September 15, 2017. FAA Order 

7400.11A is publicly available as listed 

in the ADDRESSES section of this 

document. FAA Order 7400.11B lists 

Class A, B, C, D, and E airspace areas, 

air traffic service routes, and reporting 

points. 

The Rule 

This action amends Title 14 Code of 

Federal Regulations (14 CFR) part 71 by 

removing Class E airspace designated as 

an extension to a Class D surface area at 

Felker Army Airfield, Fort Eustis, VA, 

due to the decommissioning of the 

Felker NDB and cancellation of the NDB 

approach, and for continued safety and 

management of IFR operations at the 

airport. The geographic coordinates of 

the airport are adjusted under Class D to 

coincide with the FAA’s aeronautical 

database. 

Additionally, this action removes the 

words ‘‘(formerly the Airport/Facility 

Directory)’’ from the Class D airspace 

legal description. 

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. Since this is a 

routine matter that only affects air traffic 

procedures and air navigation, it is 

certified that this rule, when 

promulgated, does not have a significant 

economic impact on a substantial 

number of small entities under the 

criteria of the Regulatory Flexibility Act. 

Lists of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (air). 

Adoption of the Amendment 

In consideration of the foregoing, the 

Federal Aviation Administration 

amends 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(f), 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 Federal Aviation 

Administration Order 7400.11B, 

Airspace Designations and Reporting 

Points, dated August 3, 2017, effective 

September 15, 2017, is amended as 

follows: 

Paragraph 5000 Class D Airspace. 

* * * * * 

AEA VA D Fort Eustis, VA [Amended] 

Felker Army Airfield, Fort Eustis, VA 

(Lat. 37°07′57′′ N, long. 76°36′32′′ W) 

That airspace extending upward from the 

surface to and including 2,500 feet MSL 

within a 4.4-mile radius of Felker Army 

Airfield, excluding the portion that coincides 

with the Newport News, VA, Class D airspace 

area. This Class D airspace area is effective 

during specific dates and times established in 

advance by a Notice to Airmen. The effective 

dates and times will thereafter be published 

continuously in the Chart Supplement. 

Paragraph 6004 Class E Airspace 

Designated as an Extension to a Class D 

Surface Area. 

* * * * * 

AEA VA E4 Fort Eustis, VA [Removed] 

Issued in College Park, Georgia, on January 

4, 2018. 

Ryan W. Almasy, 

Manager, Operations Support Group, Eastern 

Service Center, Air Traffic Organization. 

[FR Doc. 2018–00397 Filed 1–11–18; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Parts 3 and 9 

RIN 3038–AE15 

Technical Amendments to Rules on 

Registration and Review of Exchange 

Disciplinary, Access Denial, or Other 

Adverse Actions 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final rule. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘CFTC’’ or 

‘‘Commission’’) is adopting certain 

amendments to its rules that, 

respectively, govern registration of 

intermediaries and relate to the 

Commission’s review of exchange 

disciplinary, access denial, or other 

adverse actions. Generally speaking, 

these amendments are technical in 

nature. The amendments to both areas 

of the rules integrate existing advisory 

guidance. The amendments to the rules 

on review of exchange disciplinary, 

access denial, or other adverse actions 

also incorporate swap execution 

facilities (‘‘SEFs’’) and update 

provisions currently applicable to 

designated contract markets (‘‘DCMs’’). 

These final rules also remove numerous 

outdated cross-references, and add 

citations to applicable parallel 

provisions contained in other 

Commission regulations pertaining to 

SEFs and DCMs. Additionally, the final 

rules address the publication of final 

disciplinary and access denial actions 

taken by the SEFs and DCMs on their 

exchange websites. 

DATES: This final rule is effective March 

13, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Rachel Berdansky, Deputy Director, 

202–418–5429 or rberdansky@cftc.gov; 

David Steinberg, Associate Director, 

202–418–5102 or dsteinberg@cftc.gov; 

Division of Market Oversight, 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1151 21st Street NW, Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

A. Description of Part 9 

B. DCM Final Rules and Part 8 Removal 

C. SEF Final Rules 

II. Summary of the Proposal 

A. Amendments to Part 9: Rules Relating 

to Review of Exchange Disciplinary, 

Access Denial or Other Adverse Actions 

B. Amendment to Regulation 3.31: 

Deficiencies, Inaccuracies, and Changes 

To Be Reported 

III. Comments on the Proposal 

IV. Final Rules and Notice and Order 

A. Final Rules 

B. Deletion of References to Commission 

Form 3–R 

C. Notice and Order 

V. Related Matters 

A. Regulatory Flexibility Act 

B. Paperwork Reduction Act 

C. Cost-Benefit Considerations 

D. Antitrust Considerations 


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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 1539 

1 43 FR 59343 (Dec. 20, 1978). 

2Core Principles and Other Requirements for 

Designated Contract Markets, 77 FR 36612 (June 19, 

2012). 

3 Id. at 36697; 17 CFR 38.2. Part 9 is not included 

in the list of exempt provisions. 

4 17 CFR 9.2(c). 

5 17 CFR 38.700 through 38.712. 

6 43 FR 41950 (Sept. 19, 1978); 17 CFR 38.700 

through 38.712. For example, part 8 contained 

regulations 8.05 (Enforcement staff); 8.08 

(Disciplinary committee); and 8.20 (Final decision). 

Subpart N of part 38 has corresponding provisions: 

38.701 (Enforcement staff); 38.702 (Disciplinary 

panels); and 38.709 (Final decisions). 

7Although Commission regulation 38.2 of the 

DCM Final Rules specifies that DCMs are not 

required to comply with part 8, the Commission 

removed part 8 to avoid any confusion resulting 

from the regulations containing two sets of 

exchange disciplinary procedures as part of the 

Adaptation of Regulations to Incorporate Swaps 

Rulemaking. 17 CFR 38.2; and removal of part 8 at 

77 FR 66304 (Nov. 2, 2012). 

8Core Principles and Other Requirements for 

Swap Execution Facilities, 78 FR 33476 (June 4, 

2013). 

9See id. 33479; 17 CFR 37.2. 

10 82 FR 7738 (Jan. 23, 2017). 

11 Id. at 7740. 

12The Commission also proposed to amend the 

disciplinary action definition by removing the 

reference to regulation 8.03(i). 

13 82 FR 7741 (Jan. 23, 2017). 

14Section 735 of the Dodd-Frank Act amends 

section 5 of the CEA, including DCM Core Principle 

2. Paragraph (B)—Capacity of Contract Market—of 

Core Principle 2 specifically requires that the board 

of trade shall have the capacity to detect, 

investigate, and apply appropriate sanctions to any 

person that violates any rule of the contract market. 

Section 8c(b) of the CEA, 7 U.S.C. 12c(b), provides 

that the Commission may, in its discretion and in 

accordance with such standards and procedures as 

it deems appropriate, review any decision by an 

exchange whereby a person is suspended, expelled, 

disciplined, or denied access to the exchange. In 

addition, section 8c(b) of the CEA provides that the 

Commission may, in its discretion and upon 

application of any person who is adversely affected 

by any other exchange action, review such action. 

15 Id. The Commission notes that regulation 37.2 

requires, among other things, that a SEF shall 

comply with the part 9 regulations. 17 CFR 37.2. 

Additionally, footnote 40 of the SEF Final Rules 

states ‘‘the term ‘exchange’ used in part 9 of the 

Commission’s regulations should be interpreted to 

include a SEF for purposes of applying the 

requirements of part 9 to a SEF.’’ 78 FR 33476, 

33479 (June 4, 2013). 

16Section 1a(34) of the CEA provides that the 

term ‘‘member’’ means, among other things, an 

individual, association, partnership, corporation, or 

trust having trading privileges on the registered 

entity. See also 17 CFR 1.3(q). By amending the 

definition of ‘‘member of an exchange’’ to include 

all persons with trading privileges, the Commission 

is clarifying that the appellate process and 

Commission review, as defined in part 9, applies to 

all persons with trading privileges. 

17Specifically, the proposed definition of 

‘‘summary action’’ means a disciplinary action 

resulting in the imposition of a penalty on a person 

for violation of rules of the exchange permitted 

under the provisions of part 37, appendix B, Core 

Principle 2, section (a)(10)(vi) or part 38, appendix 

B, Core Principle 13, section (a)(4) (penalty for 

impeding progress of hearing); part 37, appendix B, 

Core Principle 2, section (a)(14) or part 38, 

appendix B, Core Principle 13, section (a)(7) 

(emergency disciplinary actions); part 37, appendix 

B, Core Principle 2, section (a)(13) (summary fines 

Continued 

I. Background 

A. Description of Part 9 

On December 20, 1978, the 

Commission adopted part 9 rules 

relating to the Commission’s review of 

exchange disciplinary, access denial, or 

other adverse actions.1 These rules 

detail the process and procedures for 

Commission review, including the 

appellate process in cases where a 

person applies to the Commission for 

review. The rules also address the 

procedures and standards governing 

filing and service, motions, and 

settlement; the process that exchanges 

must follow in providing notice of the 

final disciplinary action to the subject of 

the action and to the Commission; and 

the publication of such notice. As 

discussed below, DCMs and SEFs are 

already required to comply with the part 

9 regulations. 

B. DCM Final Rules and Part 8 Removal 

In June 2012, the Commission 

adopted final regulations for DCMs 

(‘‘DCM Final Rules’’).2 Commission 

regulation 38.2 of the DCM Final Rules 

provides that DCMs ‘‘shall comply with 

all applicable regulations under Title 17 

of the Code of Federal Regulations,’’ 

except for certain exempt provisions.3

Part 9 applies to DCMs by defining 

‘‘exchange’’ in Commission regulation 

9.2(c) for purposes of the rules as ‘‘any 

board of trade which has been 

designated as a contract market.’’ 4

Additionally, in the DCM Final Rules, 

the Commission adopted regulations in 

Subpart N—Disciplinary Procedures of 

part 38 to amend the disciplinary 

procedures applicable to DCMs.5

Several of the regulations adopted in 

subpart N of part 38 are similar to the 

text of the disciplinary procedures 

found in former part 8—exchange 

procedures for disciplinary, summary, 

and membership denial actions.6 The 

Commission removed part 8 from the 

regulations in order to avoid any 

confusion from having two sets of 

disciplinary procedures for DCMs.7 As a 

result of this removal, the current part 

9 rules, which contain cross-references 

to part 8 throughout, are being updated 

in the final rules to instead cite to 

parallel provisions now contained in 

part 37 for SEFs and part 38 for DCMs. 

C. SEF Final Rules 

On June 4, 2013, the Commission 

adopted new rules in part 37 for SEFs 

(‘‘SEF Final Rules’’).8 In regulation 37.2 

of the SEF Final Rules, the Commission 

specified that SEFs shall comply with 

the requirements of part 9.9

Accordingly, for clarity purposes, the 

final rules amend certain part 9 

definitions and language which have 

not yet been addressed, to integrate 

them into the post-Dodd-Frank 

regulatory regime. 

II. Summary of the Proposal 

A. Amendments to Part 9: Rules 

Relating to Review of Exchange 

Disciplinary, Access Denial or Other 

Adverse Actions 

On January 23, 2017, the Commission 

published a Notice of Proposed 

Rulemaking (‘‘NPRM’’ or ‘‘Proposal’’) to 

amend certain part 3 and part 9 rules.10

As discussed in the NPRM, most of the 

amendments are purely ministerial—for 

instance, some of the proposed changes 

updated definitions in Commission 

regulation 9.2 to conform them to the 

Commodity Exchange Act (‘‘CEA’’ or 

‘‘Act’’) as amended by the Dodd-Frank 

Act as well as other sections of the 

Commission’s regulations.11

The Commission proposed to amend 

the definitions of four terms in 

regulation 9.2. First, the Commission 

proposed to amend the definition of 

‘‘disciplinary action’’ by removing the 

reference to ‘‘member of an exchange’’ 

and inserting ‘‘person’’ in its place.12

The Commission explained in the 

NPRM that it is necessary to expand the 

‘‘disciplinary action’’ definition to 

account for instances where an 

exchange imposes sanctions against a 

person that is not a member of the 

exchange.13 The proposed language to 

include ‘‘person’’ in the ‘‘disciplinary 

action’’ definition is consistent with the 

statutory language found in Core 

Principle 2 for DCMs and section 8c(b) 

of the CEA, as amended by the DoddFrank Act.14 Second, the Commission 

proposed to amend the definition of 

‘‘exchange’’ in regulation 9.2(c) to 

include SEFs. This change makes it 

clear that the Commission has the 

discretion to review adverse actions 

imposed by a SEF and clarify that SEFs 

are subject to all of the part 9 

requirements.15 Third, the Commission 

proposed to amend regulation 9.2(f) to 

expand the definition of ‘‘member of an 

exchange’’ to include any person who 

has trading privileges on an exchange. 

This change is necessary to conform the 

part 9 definition of ‘‘member’’ to the 

meaning set forth in section 1a(34) of 

the CEA and in 1.3(q) of the 

Commission’s regulations.16 Fourth, the 

Commission proposed to amend the 

definition of ‘‘summary action’’ in 

regulation 9.2(k) by adding references to 

part 37 for SEFs and replacing the part 

8 references with the relevant 

provisions from part 38.17


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1540 Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 

for violations of rules regarding timely submission 

of records); or part 38, appendix B, Core Principle 

13, section (a)(6) (summary fines for violations of 

rules regarding timely submission of records, 

decorum, or other similar activities). 

18 82 FR 7741 (Jan. 23, 2017). The NFA created 

the Background Affiliation Status Information 

Center (‘‘BASIC’’) system through which the public 

can access information pertaining to the types of 

violations committed, penalties imposed, the 

effective date of the action, and, in some cases, the 

text from the exchange’s decision. 

19 Id. 

20 64 FR 39915 (July 23, 1999) (‘‘Part 9 

Advisory’’). 

21For example, a product trading on a DCM might 

be specified as a July 2016 Eurodollar future; while 

a product trading on a SEF may be a CDX North 

American High Yield Series 26 5 year. 

22 64 FR 39917 (July 23, 1999). 

23 82 FR 7743 (Jan. 23, 2017). 

24The Commission noted in the NPRM that many 

DCMs have already adopted more modern methods 

to publicize notices of disciplinary action. 82 FR 

7743 (Jan. 23, 2017). For example, the CME Group 

DCMs (Chicago Board of Trade (‘‘CBOT’’), Chicago 

Mercantile Exchange (‘‘CME’’), Commodity 

Exchange, Inc., (‘‘COMEX’’), and New York 

Mercantile Exchange, Inc. (‘‘NYMEX’’)) and ICE 

Futures U.S. notify subscribers of exchange 

disciplinary postings via email. The Commission 

also noted that the amendment generally tracks the 

Securities and Exchange Commission’s (‘‘SEC’’) 

standards for Release of Disciplinary Complaints, 

Decisions and Other Information in Financial 

Industry Regulatory Authority, Inc. (‘‘FINRA’’) Rule 

8313, in which FINRA, with SEC approval, has 

established its standard for releasing to the public 

a copy of FINRA issued disciplinary complaints, 

decisions, and other disciplinary information. See 

FINRA Rule 8313 ‘‘Release of Disciplinary 

Complaints, Decisions and Other Information,’’ 

available at http://finra.complinet.com/en/display/ 

display_main.html?rbid=2403&element_id=3892. 

See also SEC Release No. 34–69825; File No. SR– 

FINRA–2013–018 (June 21, 2013). 

25Some DCMs currently maintain records of 

disciplinary action on their websites. For example, 

CBOE Futures Exchange, LLC maintains a 

disciplinary decision database on its website that 

allows the public to review disciplinary decisions 

dating back to 2012. The Commission notes that in 

the securities industry, the New York Stock 

Exchange maintains disciplinary notices as far back 

as 1972. 

26 82 FR 7743 (Jan. 23, 2017). In November 2014, 

the CFTC launched the SmartCheck website. It 

connects investors to tools to check the registration, 

license, and disciplinary history of certain financial 

professionals. This collection of tools allows the 

responsible investor to confirm the credentials of 

investment professionals, uncover any past 

disciplinary history, and stay ahead of scam artists 

with news and alerts. 

The Commission also proposed to 

amend regulation 9.11(a) to remove the 

requirement that an exchange provide 

written notice to the Commission of a 

final disciplinary action or access denial 

action and replace it with a requirement 

to provide notice to the National 

Futures Association (‘‘NFA’’). As 

explained in the NPRM, the 

Commission delegated authority to the 

NFA in 1999 to receive and process 

exchange disciplinary and access denial 

information (‘‘Part 9 Delegation’’).18

Consequently, the NFA currently serves 

as the official custodian of records for 

exchange disciplinary filings. The 

Commission noted in the NPRM that it 

intends to amend the Part 9 Delegation 

order, consistent with the requirement 

that exchanges provide exchange 

disciplinary and access denial 

information to the NFA.19 In 1999, 

concurrent with the Part 9 Delegation, 

the Commission also published an 

advisory permitting exchanges to file 

§ 9.11 notices with the Commission or 

the NFA (‘‘Part 9 Advisory’’).20 The 

Commission proposed to codify the Part 

9 Advisory and formally replace the 

regulation 9.11 requirement that written 

notice be provided to the Commission 

by amending § 9.11 to require that 

notice be provided to the NFA via the 

NFA’s BASIC system and eliminate the 

option of filing the notice with the 

Commission. 

The Commission proposed an 

amendment to regulation 9.11(b)(3)(ii) 

by adding the type of product (as 

applicable) involved in the adverse 

action as an additional element required 

to be included in the contents of the 

notice. The Commission stated in the 

NPRM that requiring exchanges to 

provide this information in the § 9.11 

notice will provide the Commission, 

market participants, the public, and 

other exchanges with greater 

transparency concerning where market 

abuses originate and whether the abuses 

are concentrated among certain product 

types.21 The Commission also proposed 

to amend regulation 9.11(b)(3)(ii) by 

codifying the clarification contained in 

the Part 9 Advisory that an exchange 

indicate in its notice of disciplinary or 

access denial actions whether the 

violation underlying the notice resulted 

in financial harm to any customers.22

The Commission also proposed to 

amend regulation 9.11(c) by deleting 

instructions for filing notice with the 

Commission and replacing them with 

instructions for filing notice with the 

NFA given the proposed changes to 

regulation 9.11(a) discussed above. The 

NPRM provided that filing of the notice 

with the NFA is accomplished when an 

authorized exchange employee verifies 

the accuracy of the information entered 

into BASIC. 

The Commission proposed to amend 

regulation 9.11(d), which sets forth the 

effect of delivery and filing by mail, by 

deleting instructions related to filing 

notices with the Commission by mail 

since proposed regulation 9.11(c) calls 

for notice filings to be made to the NFA 

via BASIC instead of with the 

Commission by mail. 

Pursuant to Commission regulation 

9.12(b), an exchange that determines 

that a disciplinary action will become 

effective prior to the expiration of 15 

days after written notice to the person 

that is the subject of such action must 

provide notification in writing either 

personally or by telegram or other 

means of written telecommunication. 

The exchange also must immediately 

notify the Commission by telegram or 

other means of written 

telecommunication. The Commission 

proposed to modernize regulation 

9.12(b) by replacing references to 

‘‘telegram or other means of written 

telecommunication’’ with the term 

‘‘email’’ and provide a Commission 

email address for Commission 

notification. 

Commission regulation 9.13 provides 

that whenever an exchange suspends, 

expels or otherwise disciplines, or 

denies any person access to the 

exchange, it must make its findings 

public by disclosing at least the 

information contained in the 

Commission regulation 9.11(b) notice. 

An exchange also must make such 

findings public as soon as the 

disciplinary action or access denial 

action becomes effective by posting a 

notice in a conspicuous place on its 

premises. As noted in the NPRM, 

posting a notice of disciplinary action 

on the premises of an exchange does 

little to publicize the action.23

Accordingly, the Commission proposed 

to modernize regulation 9.13 by 

requiring the notice to be posted on an 

exchange’s website to which its 

members, market participants, and the 

public regularly have access.24 The 

Commission also proposed to amend 

regulation 9.13 by requiring the notice 

to be maintained and readily available 

on an exchange’s website.25 As a result, 

the existing requirement to maintain 

and make available for public 

inspection a record of the information 

contained in the disciplinary or access 

denial notice would be eliminated. 

The Commission also noted in the 

NPRM that it anticipates that upon the 

effective date of the final part 9 rules, it 

will include links on its SmartCheck 

website to each exchange’s website for 

posting notice of disciplinary action or 

access denial action.26

B. Amendment to Regulation 3.31: 

Deficiencies, Inaccuracies, and Changes 

To Be Reported 

Pursuant to Commission regulation 

3.31, an applicant or registrant as a 

futures commission merchant (‘‘FCM’’), 

retail foreign exchange dealer (‘‘RFED’’), 

swap dealer (‘‘SD’’), major swap 

participant (‘‘MSP’’), commodity trading 

advisor (‘‘CTA’’), commodity pool 

operator (‘‘CPO’’), introducing broker 


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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 1541 

27The Part 3 Advisory also explains that the 

Commission has: (1) Permitted exchanges (via the 

Part 9 Advisory) to file either electronic or written 

§ 9.11 notices with the NFA instead of the 

Commission and (2) delegated to the NFA (via the 

Part 9 Delegation) the duty to receive and process 

exchange disciplinary and access denial action 

information filed by the exchanges in accordance 

with Commission regulation 9.11. The Commission 

further explained that, as a result of the Part 9 

Advisory and Part 9 Delegation, the NFA possesses 

the exchange disciplinary and access denial action 

information that registrants and applicants for 

registrant status would otherwise be required to 

include in Form 3–R. Therefore, to avoid 

duplicative reporting, the Part 3 Advisory advises 

all individuals and entities subject to Commission 

regulation 3.31 that they are relieved from 

Commission regulation 3.31 reporting obligations 

resulting from an exchange disciplinary or access 

denial action and reported by an exchange pursuant 

to a § 9.11 notice. 64 FR 39912 (July 23, 1999). 

28 77 FR 51898 (Aug. 28, 2012). 

29See https://comments.cftc.gov/Public

Comments/CommentList.aspx?id=1776. 

(‘‘IB’’), or floor trader (‘‘FT’’) that is a 

non-natural person or leverage 

transaction merchant (‘‘LTM’’) must 

promptly correct any deficiency or 

inaccuracy in Form 7–R or Form 8–R 

which has rendered the information 

contained therein non-current or 

inaccurate. These corrections must be 

made in accordance with the 

instructions of each form to create a 

Form 3–R record of such change. 

In 1999, concurrent with the Part 9 

Delegation and Part 9 Advisory, the 

Commission issued an advisory 

pertaining to part 3 of the Commission’s 

regulations (‘‘Part 3 Advisory’’). The 

Part 3 Advisory relieves registrants and 

applicants for registrant status from 

filing the Form 3–R if the information to 

be reported is solely the result of an 

exchange disciplinary or access denial 

action.27 In 2012, the Commission 

eliminated the requirement that 

registrants and individuals use Form 3– 

R to update their existing Form 7–R or 

8–R and provided that an update to a 

registrant’s online Form 7–R or 8–R 

would automatically create a record of 

changes equivalent to a completed Form 

3–R.28 The Commission proposed to 

codify the Part 3 Advisory by amending 

regulation 3.31(a)(1) with language that 

relieves applicants or registrants from 

the obligation to update their Form 7– 

R or 8–R if the information to be 

reported is solely the result of an 

exchange disciplinary or access denial 

action. 

III. Comments on the Proposal 

The comment period for the Proposal 

ended on March 24, 2017. The 

Commission received one comment 

letter.29 The Minneapolis Grain 

Exchange (‘‘MGEX’’) generally 

supported the Proposal while offering 

some suggestions for certain provisions. 

MGEX agreed with the Commission’s 

general approach to modernize 

permitted methods of communication. 

For example, MGEX cited the language 

in proposed regulation 9.11(c) that 

would require an exchange only to 

verify that information entered into 

NFA’s BASIC system instead of mailing 

a notice to the Commission as a positive 

change. MGEX also favorably cited 

proposed regulation 9.12(b) that would 

permit an exchange to email notice of an 

early effective date of disciplinary 

action instead of mailing it or by 

telegram. MGEX noted these changes 

reduce burdens and suggested that the 

Commission make similar changes to 

proposed regulations 9.11(c) and (d) to 

allow an exchange to email a 

disciplinary or access denial notice to 

the person subject to the action. 

MGEX agreed that an exchange 

should publish notices of certain 

disciplinary actions on its website. 

However, MGEX requested that an 

exchange have flexibility regarding how 

it fulfills this obligation. In particular, 

MGEX requested that regulation 9.13 be 

amended to ensure that an exchange has 

flexibility over the format, style, and 

location of the notice on its website, as 

well as any ancillary website relating to 

the publication of such notices. MGEX 

stated that an exchange should be able 

to archive notices on its website after a 

reasonable period of time. MGEX noted 

that archived notices should be 

accessible, but an exchange should have 

discretion to maintain them separately 

on its website. In addition, MGEX 

indicated that there may be situations 

where removing a notice from its 

website would be appropriate and 

exchanges should be provided with this 

discretion. In support of its position, 

MGEX stated that the regulatory 

environment or exchange rules could 

change over time such that certain 

notices no longer provide educational or 

informative value. MGEX commented 

that having notices that are predicated 

on antiquated rules may actually 

confuse members, market participants, 

or the public. Finally, MGEX requested 

guidance that regulation 9.13 will be 

limited to disciplinary actions that were 

finalized after the effective date of any 

final rulemaking. 

IV. Final Rules and Notice and Order 

A. Final Rules 

The Commission, in consideration of 

the MGEX comment, is adopting the 

part 9 rules as proposed subject to the 

minor modifications described below. 

The Commission agrees with MGEX’s 

suggestion to amend regulations 9.11(c) 

and (d) to allow an exchange to use 

email as a permitted method of 

delivering notice of the disciplinary or 

access denial action to the person 

subject to the action. Accordingly, the 

Commission is modifying 9.11(c) to 

allow delivery of the notice to the 

person’s last known email address. The 

Commission is also amending 9.11(d) to 

provide that delivery of the disciplinary 

notice will be complete upon 

transmission of the email. 

The Commission also agrees with 

MGEX that an exchange should have 

flexibility over the format, style, and 

location of the notice on its website 

including any indexing or search 

functionality. The Commission believes 

that adopting the rule as proposed 

provides sufficient flexibility for 

exchanges in this regard, although the 

Commission notes that an exchange 

must ensure that access to all 

disciplinary notices remain readily 

accessible regardless of whether the 

exchange decides to archive notices 

after a reasonable period of time. 

In response to MGEX’s comment 

requesting that exchanges should be 

given discretion in certain situations to 

remove a disciplinary notice from its 

website, the Commission acknowledges 

MGEX’s concern that the regulatory 

environment or exchange rules could 

change over time and having notices 

that are predicated on antiquated rules 

may confuse members, market 

participants, or the public. However, the 

Commission believes that all 

disciplinary and access denial notices 

must be maintained on the exchange’s 

website without the possibility of 

removal. Access to information 

regarding all exchange disciplinary and 

access denial actions provides valuable 

guidance and information to exchange 

members, market participants, and the 

public regardless of whether the 

regulatory environment or an exchange 

rule has changed. For example, the 

notices allow customers to consider 

member firms’ and traders’ disciplinary 

histories when considering whether to 

engage in business with them. This 

includes conduct by firms and traders 

that violated an exchange rule at the 

time the rule was in effect. The final 

rule also enables customers to consider 

an exchange’s propensity to sanction 

firms and traders for rule violations 

when considering whether to trade on 

the exchange. In the limited 

circumstances where an exchange 

believes that a disciplinary notice may 

confuse its members, market 

participants, or the public as a result of 

a regulatory environment or exchange 

rule change, an exchange could address 

this concern by posting an attachment to 


sradovich on DSK3GMQ082PROD with RULES
1542 Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 

30The phrase being deleted from subsection (a)(1) 

of regulation 3.31 is ‘‘to create a Form 3–R record 

of such change.’’ 

31Registration of Intermediaries, 77 FR 51898 

(Aug. 28, 2012). 

32Agency Information Collection Activities: 

Proposed Collection Revision, Comment Request: 

Adoption of Revised Registration Form 8–R and 

Cancellation of Form 3–R, 82 FR 19663, 19664 (Apr. 

28, 2017). 

33 5 U.S.C. 601 et seq. 

34See 47 FR 18618 through 18621 (Apr. 30, 

1982). 

35See 47 FR 18618, 18619 (Apr. 30, 1982) 

(DCMs); 78 FR 33548 (June 4, 2013) (SEFs). 

36See Policy Statement and Establishment of 

Definitions of ‘‘Small Entities’’ for Purposes of the 

Regulatory Flexibility Act, 47 FR 18618 (Apr. 30, 

1982) (FCMs and CPOs); Leverage Transactions, 54 

FR 41068 (Oct. 5, 1989) (LTMs); Regulation of OffExchange Retail Foreign Exchange Transactions and 

Intermediaries, 75 FR 55410, 55416 (Sept. 10, 2010) 

(RFEDs); and Registration of Swap Dealers and 

Major Swap Participants, 77 FR 2613, 2620 (Jan. 19, 

2012) (SDs and MSPs). 

37See 47 FR 18620 (Apr. 30, 1982) (CTAs); 

Registration of Floor Traders; Mandatory Ethics 

Training for Registrants; Suspension of Registrants 

Charged With Felonies, 58 FR 19575, 19588 (Apr. 

15, 1993) (FTs); and Introducing Brokers and 

Associated Persons of Introducing Brokers, 

Commodity Trading Advisors and Commodity Pool 

Operators; Registration and Other Regulatory 

Requirements, 48 FR 35248, 35276 (Aug. 3, 1983) 

(IBs). 

the disciplinary notice that explains the 

nature of any such change. 

The Commission agrees with MGEX 

that the rulemaking should not be 

applied retroactively to final exchange 

disciplinary actions. Therefore, 

exchanges only will be required to 

publish disciplinary actions that are 

finalized after the effective date of the 

final rules. 

As discussed above, the Commission 

proposed to amend regulation 9.2(f) to 

expand the definition of ‘‘member of an 

exchange’’ to include any person who 

has trading privileges on an exchange. 

The Commission explained that this 

change is necessary to conform the part 

9 definition of ‘‘member’’ to the 

meaning set forth in section 1a(34) of 

the CEA and in 1.3(q) of the 

Commission’s regulations. The 

Commission is adopting the amendment 

to regulation 9.2(f) as proposed. The 

Commission notes that 9.2(f)(1) 

preserves the prior definition of 

‘‘member of an exchange,’’ while the 

inclusion of ‘‘any person who has 

trading privileges on an exchange’’ 

under 9.2(f)(2) conforms the ‘‘member of 

an exchange’’ definition with the 

meaning set forth in section 1a(34)(B) of 

the CEA and regulation 1.3(q)(1)(ii). 

The Commission is also adopting the 

amendment to regulation 3.31(a)(1) as 

proposed. Therefore, the final rule 

relieves applicants and registrants from 

the obligation to update their Form 7– 

R or 8–R if the information to be 

reported is solely the result of an 

exchange disciplinary or access denial 

action. 

B. Deletion of References to Commission 

Form 3–R 

The Commission is making an 

additional technical change to 

regulation 3.31. As reflected in the 

amended text of the rule, the 

Commission is eliminating the 

references to Form 3–R from subsections 

(a)(1), (a)(3), (b), and (c)(1) of regulation 

3.31 by deleting from these subsections 

the phrase ‘‘to create a Form 3–R record 

of change.’’ 30 The Commission no 

longer requires market participants to 

use the Form 3–R.31 Additionally, by 

separate Notice, the Commission 

formally proposed to cancel the Form 3– 

R and transfer the administrative 

burdens associated with that form to 

Forms 7–R and 8–R.32 Accordingly, the 

Commission is updating regulation 3.31 

to reflect the retirement of Form 3–R. 

For these same reasons, the Commission 

is making a similar technical change to 

regulation 3.11. As reflected in the 

amended text of the rule, the 

Commission is deleting the reference to 

Form 3–R from subsection (b) of 

regulation 3.11. The Commission notes 

that these changes to regulations 3.11 

and 3.31 are purely technical and do not 

affect the obligations of the individuals 

and entities subject to these rules. 

C. Notice and Order 

In a separate document published 

elsewhere in this issue of the Federal 

Register, the Commission issued an 

updated Notice and Order to replace the 

Part 9 Delegation from 1999 regarding 

the specific duties delegated by the 

Commission to the NFA for receiving 

and processing exchange disciplinary 

and access denial information. Among 

other things, the Notice and Order is 

being updated to account for the 

amendment to regulation 9.11(a) that 

will require exchanges to file 

disciplinary and access denial actions 

with the NFA. As discussed above, prior 

to this amendment, exchanges were 

only encouraged to file the notifications 

with the NFA, but not required. In 

addition, the updated Notice and Order 

includes SEFs now filing the required 

notices with the NFA as SEFs did not 

exist when the Commission issued the 

Part 9 Delegation and Advisory in 1999. 

Consistent with the Part 9 Delegation, 

the updated Notice and Order delegates 

to the NFA the authority to perform the 

following functions: (1) To process 

exchange disciplinary information filed 

by an exchange or the Commission in 

the BASIC system; (2) to provide the 

Commission with access to a 

Management Report summarizing all 

recent exchange disciplinary 

information and to provide the 

Commission with the capability to 

generate standardized reports on the 

BASIC system; (3) to assist the 

Commission in enforcing exchange 

compliance with regulation 9.11 filing 

requirements; and (4) to serve as the 

official custodian of a database 

containing records of all exchange 

disciplinary and access denial actions 

filed with the NFA for inclusion in the 

BASIC system. 

V. Related Matters 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(‘‘RFA’’) requires federal agencies, in 

promulgating rules, to consider the 

impact of those rules on small entities.33

The Commission did not receive any 

comments with respect to the RFA. The 

part 9 rules adopted herein will affect 

all SEFs and DCMs. The Commission 

previously established certain 

definitions of ‘‘small entities’’ to be used 

by the Commission in evaluating the 

impact of its regulations on small 

entities in accordance with the RFA.34

The Commission previously determined 

that DCMs and SEFs are not small 

entities for purposes of the RFA.35

The part 3 rules adopted herein will 

affect certain applicant or registrant 

FCMs, RFEDs, SDs, MSPs, CTAs, CPOs, 

IBs, FTs who are non-natural persons, 

and LTMs who will no longer have to 

file a Form 7–R or 8–R if the 

information to be reported is solely the 

result of an exchange disciplinary or 

access denial action. The Commission 

previously determined that FCMs, 

RFEDs, SDs, MSPs, CPOs, and LTMs are 

not small entities for purposes of the 

RFA.36 Therefore, the requirements of 

the RFA do not apply to those entities. 

With respect to CTAs, FTs, and IBs, the 

Commission has found it appropriate to 

consider whether such registrants 

should be deemed small entities for 

purposes of the RFA on a case-by-case 

basis, in the context of the particular 

Commission regulation at issue.37 As 

certain of these registrants may be small 

entities for purposes of the RFA, the 

Commission has considered whether the 

final rules will have a significant impact 

on these registrants. 

The amendment to Commission 

regulation 3.31 is not substantive in 

nature. In 1999, the Commission 

published the Part 3 Advisory which 

relieved all applicants and registrants 

from filing a Form 3–R if the 

information to be reported is solely the 

result of an exchange disciplinary or 


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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 1543 

38 64 FR 39912 (July 23, 1999). 

39 44 U.S.C. 3501 et seq. 

40 82 FR 7745–46 (Jan. 23, 2017). 

41For collection 3038–0052, see OMB Control No. 

3038–0052, available at http://www.reginfo.gov/ 

public/do/PRAOMBHistory?ombControlNumber= 

3038-0052. For collection 3038–0074, see OMB 

Control No. 3038–0074, available at http://

www.reginfo.gov/public/do/PRAOMB

History?ombControlNumber= 

3038-0074. 

42 82 FR 19663 (Apr. 28, 2017). 

43 7 U.S.C. 19(a). 44 82 FR 7746 (Jan. 23, 2017). 

access denial action.38 Beyond 

conforming the regulation to an 

established agency policy provided for 

in the Part 3 Advisory, the conforming 

amendments to regulation 3.31 will not 

affect the current processes or impose 

any new costs on small entities. The 

final rule codifies the filing relief set 

forth in the Part 3 Advisory and will not 

impose any new regulatory obligations 

on any registrant, including CTAs, FTs, 

and IBs. 

The Commission does not, therefore, 

expect small entities to incur any 

additional costs as a result of the final 

rules. Consequently, the Commission 

finds that no significant economic 

impact on small entities will result from 

the final rules. 

Accordingly, the Chairman, on behalf 

of the Commission pursuant to 5 U.S.C. 

605(b), certifies that the final rules will 

not have a significant economic impact 

on a substantial number of small 

entities. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(‘‘PRA’’) imposes certain requirements 

on Federal agencies, including the 

Commission, in connection with their 

conducting or sponsoring any collection 

of information, as defined by the PRA.39

An agency may not conduct or sponsor, 

and a person is not required to respond 

to, a collection of information unless it 

displays a currently valid control 

number issued by the Office of 

Management and Budget (‘‘OMB’’). The 

final rules contain provisions that 

qualify as collections of information, for 

which the Commission has already 

sought and obtained control numbers 

from the OMB. The titles for these 

collections of information are ‘‘Part 38— 

Core Principles and Other Requirements 

for Designated Contract Markets’’ (OMB 

Control Number 3038–0052) and ‘‘Part 

37—Core Principles and Other 

Requirements for Swap Execution 

Facilities’’ (OMB Control Number 3038– 

0074). 

As explained in the NPRM, the 

Commission did not seek to amend 

information collections 3038–0052 or 

3038–0074 because the Commission 

believes that the rule modifications 

proposed would not impose any new 

information collection requirements that 

require approval from OMB under the 

PRA.40 The Commission invited public 

comment on the accuracy of its 

determination that no additional 

recordkeeping or information collection 

requirements or changes to existing 

collection requirements would result 

from the Proposal.41 The Commission 

did not receive any such comments. 

Accordingly, the Commission believes 

the final rules will not impact the 

current burden estimates for collections 

3038–0052 and 3038–0074. The 

Commission will nevertheless, by 

separate action, publish in the Federal 

Register a notice and request for 

comment on the additional elements to 

be included as part of exchange notices, 

and submit to OMB an information 

collection request to amend the relevant 

information collection, in accordance 

with 44 U.S.C. 3506(c)(2)(A) and 5 CFR 

1320.8(d). As noted previously, by 

separate Notice published in the 

Federal Register, the Commission 

provided notice that the Form 3–R was 

being cancelled, and that the PRA 

burdens associated with Form 3–R 

under collections 3038–0023 and 3038– 

0072 were being reassigned to Forms 7– 

R and 8–R.42

C. Cost-Benefit Considerations 

1. Introduction 

Section 15(a) of the CEA requires the 

Commission to consider the costs and 

benefits of its actions before 

promulgating a regulation under the 

CEA or issuing certain orders.43 Section 

15(a) further specifies that the costs and 

benefits shall be evaluated in light of 

five broad areas of market and public 

concern: (1) Protection of market 

participants and the public; (2) 

efficiency, competitiveness, and 

financial integrity of the markets; (3) 

price discovery; (4) sound risk 

management practices; and (5) other 

public interest considerations. The 

Commission considers the costs and 

benefits resulting from its discretionary 

determinations with respect to the 

section 15(a) factors. 

The Commission considers the costs 

and benefits associated with the final 

rules, including updating the preexisting regulatory framework to 

incorporate SEFs, removing references 

to part 8 of the Commission’s 

regulations, and revising the reporting 

and notice requirements for DCMs and 

SEFs. The Commission compares the 

costs and benefits of this rulemaking 

against a baseline of the status quo, the 

current requirements under part 3 and 

part 9. As explained in the NPRM, and 

as adopted, the rules are primarily 

technical in nature that clarify the 

obligations under the current rules and 

generally do not impose any new costs 

on DCMs, SEFs, or market 

participants.44 Regulation 9.11(b)(3)(ii) 

will require the exchanges to specify in 

the disciplinary notices the product 

involved in the disciplinary action and 

whether the rule violation resulted in 

financial harm to any customers. The 

Commission acknowledges that these 

additional elements in the disciplinary 

notices may result in additional costs, 

but any such costs would be de 

minimis. Accordingly, the Commission 

addresses below the costs associated 

with Commission regulation 9.13 

requirement for DCMs and SEFs to 

publish and maintain disciplinary 

notices on their respective websites. 

In the Proposal, the Commission 

sought comment concerning all aspects 

of the costs and benefits. The 

Commission did not receive any 

comments that specifically addressed 

the Cost-Benefit Considerations section 

of the Proposal. However, MGEX 

commented that the proposed 

amendment to regulation 9.11(c) that 

would allow an exchange to only have 

to verify that information has been 

entered into NFA BASIC instead of 

mailing a notice to the Commission, and 

the amendment to 9.12(b) that would 

permit an exchange to satisfy its 

obligations to deliver notice of the 

disciplinary or access denial action by 

email reduces the burden to exchanges, 

albeit in nominal ways. As discussed 

above, the Commission is amending 

regulations 9.11(c) and (d) to allow 

exchanges to satisfy their delivery 

obligations of the disciplinary or access 

denial action to the person subject to the 

action by email. 

Finally, in light of NFA’s role and 

experience in performing registration 

functions on behalf of the Commission 

and as the custodian of related records 

(including exchange disciplinary 

filings), the Commission believes that it 

is appropriate to remove the 

requirement that an exchange provide 

written notice to the Commission of a 

final disciplinary action or access denial 

action and replace it with a requirement 

to provide notice to the NFA. NFA 

performs registration processing 

functions with respect to applicants and 

registrants and an individual’s or firm’s 

disciplinary history is a factor that must 

be considered in any fitness 

determination. Delegating to the NFA 

the responsibility for processing such 

filings and generating reports with the 


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1544 Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 

45 17 CFR 9.13. 

46The Commission’s cost estimates in the NPRM 

were based on the 452 disciplinary and access 

denial actions filed by DCMs in 2015. Because SEFs 

did not post any such actions with BASIC in 2015, 

the cost estimates for SEFs were based on the 

disciplinary and access denial actions filed by 

DCMs in 2015, excluding the four DCMs with the 

largest number of reported disciplinary and access 

denial actions. The Commission explained that the 

average number of disciplinary and access denial 

actions by the other 11 DCMs provide a more 

appropriate comparison with respect to estimating 

the number of actions filed by SEFs annually. This 

average resulted in an estimate of eight disciplinary 

and access denial actions filed in BASIC for each 

SEF annually. The Commission noted that as the 

SEFs mature, in terms of the number of participants 

and volume, the number of disciplinary and access 

denial actions may increase accordingly. 82 FR 

7746 (Jan. 23, 2017). 

47Bureau of Labor Statistics, Occupational 

Employment and Wages: 13–1041 Compliance 

Officers, (May 2014), available at http://

www.bls.gov/oes/current/oes131041.htm. 

48As noted in the NPRM, the Commission 

acknowledges that requiring exchanges to post final 

notices of disciplinary and access denial actions on 

their websites may necessitate additional 

bandwidth. The Commission anticipates that any 

increased costs due to added bandwidth will be 

insignificant in its calculation of the total annual 

burden associated with the final rules. 82 FR 7747 

(Jan. 23, 2017). 

information amassed, should ensure 

that the NFA has the necessary 

information to continue to make 

appropriate registration determinations. 

The Commission also believes this 

delegation will enhance efficiency by 

permitting the Commission to carry out 

its statutory responsibilities under the 

CEA, while also freeing up Commission 

resources to be directed to other parts of 

its regulatory mandate. 

2. Commission Regulation 9.13— 

Publication of Notice 

Commission regulation 9.13 requires 

all DCMs and SEFs to maintain and 

make readily accessible final notices of 

exchange disciplinary and access denial 

actions on their websites.45 This new 

requirement replaces the existing 

requirement in Commission regulation 

9.13 that exchanges publish the notice 

in a conspicuous place on the 

exchange’s premises. 

a. Costs 

The Commission continues to believe 

that requiring exchanges to post final 

disciplinary and access denial notices to 

their websites will slightly increase the 

costs for DCMs and SEFs. The 

Commission notes that the additional 

costs incurred by DCMs and SEFs will 

be offset in part due to the amendment 

in Commission regulation 9.13 that 

removes the requirement of posting 

disciplinary and access denial notices 

on the premises of the respective DCM 

or SEF. In order to estimate the 

additional costs, the Commission 

queried the NFA’s BASIC system to 

determine the total number of 

disciplinary and access denial actions 

filed by DCMs and SEFs in 2016.46

Total number of reported disciplinary 

and access denial actions in BASIC by 

all DCMs: 296. 

Total number of reported disciplinary 

and access denial actions in BASIC by 

all SEFs: 15. 

The total number of exchange 

disciplinary and access denial actions 

per year for all DCMs and SEFs is 

estimated to be 311 (296 actions for 

DCMs plus 15 actions for SEFs equals 

311 total actions per year). The 

Commission anticipates each DCM and 

SEF will spend an additional 15 

minutes per disciplinary notice to post 

on the exchange’s website above the 

current requirement of posting the 

notice on the exchange’s premises. 

Accordingly, the aggregate new burden 

of Commission regulation 9.13 is 

estimated to be 77.75 hours per year for 

the 15 DCMs and 24 SEFs (15 minutes 

multiplied by 311 anticipated actions 

per year equals 77.75 burden hours). 

The Commission expects that a 

compliance officer employed by the 

exchange will post the disciplinary or 

access denial action notices to the 

exchange website. According to recent 

Bureau of Labor Statistics National 

Occupational Employment and Wage 

Estimates, the mean hourly wage of an 

employee under occupation code 13– 

1041, ‘‘Compliance Officers,’’ that is 

employed by the ‘‘Securities and 

Commodity Exchanges’’ industry is 

$46.01. Because DCMs and SEFs can be 

large, specialized entities that may 

engage employees with wages above the 

mean, the Commission has 

conservatively chosen to use a mean 

hourly wage of $50 per hour.47

Accordingly, the burden associated with 

posting the disciplinary notices on 

exchange websites is approximately 

$3,887.50 per year for all of the 15 

DCMs and 24 SEFs, ($50 multiplied by 

the anticipated 77.75 burden hours 

equals $3,887.50 per year).48

b. Benefits 

The Commission continues to believe 

that greater access to information 

regarding exchange disciplinary and 

access denial actions provides valuable 

guidance and information to exchange 

members, market participants, and the 

public. Releasing disciplinary 

information to the public serves to deter 

and prevent future misconduct and to 

improve overall compliance standards 

in the futures and swaps industry. It 

also allows customers to consider 

member firms’ and traders’ disciplinary 

histories when considering whether to 

engage in business with them. In 

addition, firms may use such 

information to educate their traders and 

associated persons as to compliance 

matters, highlighting potential 

violations and related sanctions. 

Further, any firm or individual facing 

allegations of rule violations may access 

existing disciplinary decisions to gain 

greater insight on related facts and 

sanctions. The Commission believes 

that the added deterrence of publishing 

disciplinary notices on exchange 

websites and the enhanced investigative 

and educational benefits of making such 

information public will ultimately 

decrease the incidents of wrongdoing 

and market abuses which benefits both 

market participants and the general 

public. 

c. Section 15(a) Factors 

As noted above, section 15(a) of the 

CEA requires the Commission to 

consider the effects of its actions in light 

of the following five factors: 

(1) Protection of market participants 

and the public. The Commission 

believes that market participants and 

the public will benefit from the 

ministerial and conforming 

amendments since they eliminate 

obsolete, vestigial provisions and 

references that otherwise could be 

construed to give rise to confusing 

inconsistencies between the 

Commission’s regulations and the 

provisions of the CEA. Furthermore, the 

Commission believes that the 

amendment to regulation 9.13, which 

requires exchanges to publish notice of 

final disciplinary and access denial 

actions on exchange websites, increases 

transparency of exchange disciplinary 

actions and serves as a deterrence of 

future market abuses. These 

enhancements allow for operational 

efficiencies in oversight, increased 

deterrence from market abuses, and 

greater transparency of the exchange 

disciplinary process. Therefore, the 

Commission anticipates that the 

amendment to regulation 9.13 will 

result in improved protection of market 

participants and the public. 

(2) The efficiency, competitiveness, 

and financial integrity of the markets. 

The requirement that exchanges publish 

disciplinary notices and access denial 

actions on their websites is intended to 

improve the operational efficiency and 

financial integrity of the futures and 

swaps markets by enabling the public 

and those who access an exchange 

website to be made aware of any 

disciplinary and access denial actions 

imposed by the exchange. By publishing 


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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 1545 

the notice on the exchange’s website, 

the Commission believes that the 

efficiency and financial integrity of the 

markets will be bolstered by the 

deterrent effect achieved by posting the 

notice in a publicly accessible medium. 

(3) Price discovery. The Commission 

did not identify any impact on price 

discovery as a result of the proposed 

regulations, and did not believe there 

would be one, but sought comment as 

to any potential impact. The 

Commission did not receive any 

comments on this issue. Accordingly, 

the Commission believes that the final 

regulations will not impact price 

discovery. 

(4) Sound risk management practices. 

The Commission did not identify any 

impact on sound risk management 

practices as a result of the proposed 

regulations, and did not believe there 

would be one, but sought comment as 

to any potential impact. The 

Commission did not receive any 

comments on this issue. Accordingly, 

the Commission believes that the final 

regulations will not impact sound risk 

management practices. 

(5) Other public interest 

considerations. The Commission has not 

identified any other public interest 

considerations. 

D. Antitrust Considerations 

Section 15(b) of the CEA requires the 

Commission to take into consideration 

the public interest to be protected by the 

antitrust laws and endeavor to take the 

least anticompetitive means of 

achieving the objectives of the CEA in 

issuing any order or adopting any 

Commission rule or regulation. The 

Commission does not anticipate that the 

amendments adopted herein would 

promote or result in anticompetitive 

consequences or behavior. 

List of Subjects 

17 CFR Part 3 

Administrative practice and 

procedure, Brokers, Commodity futures, 

Major swap participants, Reporting and 

recordkeeping requirements, Swap 

dealers. 

17 CFR Part 9 

Administrative practice and 

procedure, Commodity exchanges, 

Commodity futures. 

For the reasons stated in the 

preamble, the Commodity Futures 

Trading Commission amends 17 CFR 

chapter I as follows: 

PART 3—REGISTRATION 

■ 1. The authority citation for part 3 is 

revised to read as follows: 

Authority: 5 U.S.C. 552, 552b; 7 U.S.C. 1a, 

2, 6a, 6b, 6b–1, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6k, 

6m, 6n, 6o, 6p, 6s, 8, 9, 9a, 12, 12a, 13b, 13c, 

16a, 18, 19, 21, and 23. 

■ 2. In § 3.11, revise paragraph (b) to 

read as follows: 

§ 3.11 Registration of floor brokers and 

floor traders. 

* * * * * 

(b) Duration of registration. A person 

registered as a floor broker or floor 

trader in accordance with paragraph (a) 

of this section, and whose registration 

has neither been revoked nor 

withdrawn, will continue to be so 

registered unless such person’s trading 

privileges on all contract markets and 

swap execution facilities have ceased: 

Provided, that if a floor broker or floor 

trader whose trading privileges on all 

contract markets and swap execution 

facilities have ceased for reasons 

unrelated to any Commission action or 

any contract market or swap execution 

facility disciplinary proceeding and 

whose registration is not revoked, 

suspended or withdrawn is granted 

trading privileges as a floor broker or 

floor trader, respectively, by any 

contract market or swap execution 

facility where such person held such 

privileges within the preceding sixty 

days, such registration as a floor broker 

or floor trader, respectively, shall be 

deemed to continue and no new Form 

7–R, Form 8–R or change to Form 7–R 

or Form 8–R need be filed solely on the 

basis of the resumption of trading 

privileges. A floor broker or floor trader 

is prohibited from engaging in activities 

requiring registration under the Act or 

from representing such person to be a 

registrant under the Act or the 

representative or agent of any registrant 

during the pendency of any suspension 

of such registration or of all such trading 

privileges. Each contract market and 

swap execution facility that has granted 

trading privileges to a person who is 

registered, or has applied for 

registration, as a floor broker or floor 

trader, must provide notice in 

accordance with § 3.31(d) after such 

person’s trading privileges on such 

contract market or swap execution 

facility have ceased. 

* * * * * 

■ 3. In § 3.31, revise paragraphs (a)(1), 

(a)(3)(i), (b), and (c)(1) to read as 

follows: 

§ 3.31 Deficiencies, inaccuracies, and 

changes, to be reported. 

(a)(1) Each applicant or registrant as a 

futures commission merchant, retail 

foreign exchange dealer, swap dealer, 

major swap participant, commodity 

trading advisor, commodity pool 

operator, introducing broker, floor 

trader that is a non-natural person or 

leverage transaction merchant shall, in 

accordance with the instructions 

thereto, promptly correct any deficiency 

or inaccuracy in Form 7–R or Form 8– 

R that no longer renders accurate and 

current the information contained 

therein, with the exception of any 

change that requires withdrawal from 

registration under § 3.33 or any change 

resulting from an exchange disciplinary 

or access denial action. Each such 

correction shall be prepared and filed in 

accordance with the instructions 

thereto. 

* * * * * 

(3) * * * 

(i) If the new principal is not a natural 

person, the registrant shall update such 

Form 7–R. 

* * * * * 

(b) Each applicant or registrant as a 

floor broker, floor trader or associated 

person, and each principal of a futures 

commission merchant, retail foreign 

exchange dealer, swap dealer, major 

swap participant, commodity trading 

advisor, commodity pool operator, 

introducing broker, floor trader that is a 

non-natural person, or leverage 

transaction merchant must, in 

accordance with the instructions 

thereto, promptly correct any deficiency 

or inaccuracy in the Form 8–R or 

supplemental statement thereto. 

(c)(1) After the filing of a Form 8–R 

or updating a Form 8–R by or on behalf 

of any person for the purpose of 

permitting that person to be an 

associated person of a futures 

commission merchant, retail foreign 

exchange dealer, commodity trading 

advisor, commodity pool operator, 

introducing broker, or a leverage 

transaction merchant, that futures 

commission merchant, retail foreign 

exchange dealer, commodity trading 

advisor, commodity pool operator, 

introducing broker or leverage 

transaction merchant must, within 

thirty days after the occurrence of either 

of the following, file a notice thereof 

with the National Futures Association 

indicating: 

(i) The failure of that person to 

become associated with the futures 

commission merchant, retail foreign 

exchange dealer, commodity trading 

advisor, commodity pool operator, 

introducing broker, or leverage 

transaction merchant, and the reasons 

therefor; or 

(ii) The termination of the association 

of the associated person with the futures 

commission merchant, retail foreign 

exchange dealer, commodity trading 

advisor, commodity pool operator, 


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1546 Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 

introducing broker, or leverage 

transaction merchant, and the reasons 

therefor. 

* * * * * 

PART 9—RULES RELATING TO 

REVIEW OF EXCHANGE 

DISCIPLINARY, ACCESS DENIAL OR 

OTHER ADVERSE ACTIONS 

■ 4. The authority citation for part 9 is 

revised to read as follows: 

Authority: 7 U.S.C. 1a, 2, 6b–1, 6c, 7, 7a– 

2, 7b–3, 8, 9, 9a, 12, 12a, 12c, 13b, 16a, 18, 

19, and 21. 

■ 5. In § 9.1, revise paragraphs (b) and 

(c) to read as follows: 

§ 9.1 Scope of rules. 

* * * * * 

(b) Matters excluded. This part does 

not apply to and the Commission will 

not accept notices of appeal, or petitions 

for stay pending review, of: 

(1) Any arbitration proceeding, 

regardless of whether the proceeding 

involved a controversy between 

members of an exchange; 

(2) Except as provided in §§ 9.11(a), 

(b)(3)(i) through (v), and (c), and 9.12(a) 

and 9.13 (concerning the notice, 

effective date and publication of a 

disciplinary or access denial action), 

any summary action permitted under 

the provisions of part 37, appendix B, 

Core Principle 2, paragraph (a)(13) of 

this chapter or part 38, appendix B, Core 

Principle 13, paragraph (a)(6) of this 

chapter imposing a minor penalty for 

the violation of exchange rules relating 

to decorum or attire, or relating to the 

timely submission of accurate records 

required for clearing or verifying each 

day’s transactions or other similar 

activities; and 

(3) Any exchange action arising from 

a claim, grievance, or dispute involving 

cash market transactions which are not 

a part of, or directly connected with, 

any transaction for the purchase, sale, 

delivery or exercise of a commodity for 

future delivery, a commodity option, or 

a swap. 

(4) The Commission will, upon its 

own motion or upon motion filed 

pursuant to § 9.21(b), promptly notify 

the appellant and the exchange that it 

will not accept the notice of appeal or 

petition for stay of matters specified in 

this paragraph. The determination to 

decline to accept a notice of appeal will 

be without prejudice to the appellant’s 

right to seek alternate forms of relief that 

may be available in any other forum. 

(c) Applicability of these part 9 rules. 

Unless otherwise ordered, these rules 

will apply in their entirety to all 

appeals, and matters relating thereto. 

■ 6. In § 9.2, revise paragraphs (b), (c), 

(f), and (k) to read as follows: 

§ 9.2 Definitions. 

* * * * * 

(b) Disciplinary action means any 

suspension, expulsion or other penalty 

imposed on a person by an exchange for 

violations of rules of the exchange, 

including summary actions. 

(c) Exchange means a swap execution 

facility or any board of trade which has 

been designated as a contract market. 

* * * * * 

(f) Member of an exchange means: 

(1) Any person who is admitted to 

membership or has been granted 

membership privileges on an exchange; 

any employee, officer, partner, director 

or affiliate of such member or person 

with membership privileges including 

any associated person; and any other 

person under the supervision or control 

of such member or person with 

membership privileges; or 

(2) Any person who has trading 

privileges on an exchange. 

* * * * * 

(k) Summary action means a 

disciplinary action resulting in the 

imposition of a penalty on a person for 

violation of rules of the exchange 

permitted under the provisions of part 

37, appendix B, Core Principle 2, 

paragraph (a)(10)(vi) of this chapter or 

part 38, appendix B, Core Principle 13, 

paragraph (a)(4) of this chapter (penalty 

for impeding progress of hearing); part 

37, appendix B, Core Principle 2, 

paragraph (a)(14) of this chapter or part 

38, appendix B, Core Principle 13, 

paragraph (a)(7) of this chapter 

(emergency disciplinary actions); part 

37, appendix B, Core Principle 2, 

paragraph (a)(13) of this chapter 

(summary fines for violations of rules 

regarding timely submission of records); 

or part 38, appendix B, Core Principle 

13, paragraph (a)(6) of this chapter 

(summary fines for violations of rules 

regarding timely submission of records, 

decorum, or other similar activities). 

■ 7. Revise § 9.3 to read as follows: 

§ 9.3 Provisions referenced. 

Except as otherwise provided in this 

part, the following provisions of the 

Commission’s rules relating to 

reparations contained in part 12 of this 

chapter apply to this part: § 12.3 

(Business address; hours); § 12.5 

(Computation of time); § 12.6 

(Extensions of time; adjournments; 

postponements); § 12.7 (Ex parte 

communications in reparation 

proceedings); and § 12.12 (Signature). 

■ 8. In § 9.4, revise paragraphs (a), (b), 

and (c) to read as follows: 

§ 9.4 Filing and service; official docket. 

(a) Filing with the Proceedings Clerk; 

proof of filing; proof of service. Any 

document that is required by this part 

to be filed with the Proceedings Clerk 

must be filed by delivering it in person 

or by mail to: Proceedings Clerk, Office 

of Proceedings, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street NW, 

Washington, DC 20581. To be timely 

filed under this part, a document must 

be delivered or mailed to the 

Proceedings Clerk within the time 

prescribed for filing. A party must use 

a means of filing which is at least as 

expeditious as that used in serving that 

document upon the other parties. Proof 

of filing must be made by attaching to 

the document for filing a statement of 

service as provided in § 10.12(a)(6) of 

this chapter. 

(b) Formalities of filing—(1) Number 

of copies. Unless otherwise specifically 

provided, an original and one 

conformed copy of all documents filed 

with the Commission in accordance 

with the provisions of this part must be 

filed with the Proceedings Clerk. 

(2) Title page. All documents filed 

with the Proceedings Clerk must 

include at the head thereof, or on a title 

page, the name of the Commission, the 

title of the proceeding, the docket 

number (if one has been assigned by the 

Proceedings Clerk), the subject of the 

particular document and the name of 

the person on whose behalf the 

document is being filed. 

(3) Paper, spacing, type. All 

documents filed with the Proceedings 

Clerk must be typewritten, must be on 

one grade of good white paper no less 

than 8 or more than 81⁄2 inches wide 

and no less than 101⁄2 or more than 111⁄2

inches long, and must be bound on the 

top only. They must be double-spaced, 

except for long quotations (3 or more 

lines) and footnotes which should be 

single-spaced. 

(4) Signature. The original copy of all 

papers must be signed in ink by the 

person filing the same or by his or her 

duly authorized agent or attorney. 

(c) Service—(1) General requirements. 

All documents filed with the 

Proceedings Clerk must, at or before the 

time of filing, be served upon all parties. 

A party must use a means of service 

which is at least as expeditious as that 

used in filing that document with the 

Proceedings Clerk. One copy of all 

motions, petitions or applications made 

in the course of the proceeding, all 

notices of appeal, all briefs, and letters 

to the Commission or an employee 

thereof must be served by a party upon 

all other parties. 


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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 1547 

(2) Manner of service. Service may be 

either personal or by mail. Service by 

mail is complete upon deposit of the 

document in the mail. Where service is 

effected by mail, the time within which 

the person served may respond thereto 

will be increased by three days. 

(3) Designation of person to receive 

service. The first document filed in a 

proceeding by or on behalf of any party 

must state on the first page the name 

and postal address of the person who is 

authorized to receive service for the 

party of all documents filed in the 

proceeding. Thereafter, service of 

documents must be made upon the 

person authorized unless service on a 

different authorized person or on the 

party himself or herself is ordered by 

the Commission, or unless pursuant to 

§ 9.8 the person authorized is changed 

by the party upon due notice to all other 

parties. Parties must file and serve 

notification of any changes in the 

information provided pursuant to this 

subparagraph as soon as practicable 

after the change occurs. 

* * * * * 

■ 9. In § 9.8, revise paragraph (a)(1) to 

read as follows: 

§ 9.8 Practice before the Commission. 

(a) * * * 

(1) By non-attorneys. An individual 

may appear pro se (on his or her own 

behalf); a general partner may represent 

the partnership; a bona fide officer of a 

corporation, trust or association may 

represent the corporation, trust or 

association. 

* * * * * 

■ 10. In § 9.9, revise paragraphs (b)(3) 

and (4) to read as follows: 

§ 9.9 Waiver of rules; delegation of 

authority. 

* * * * * 

(b) * * * 

(3) The General Counsel, or his or her 

designee, may submit to the 

Commission for its consideration any 

matter which has been delegated 

pursuant to paragraph (b)(1) of this 

section. 

(4) Nothing in this section will be 

deemed to prohibit the Commission, at 

its election, from exercising the 

authority delegated to the General 

Counsel, or his or her designee, under 

this section. 

■ 11. Revise § 9.11 to read as follows: 

§ 9.11 Form, contents and delivery of 

notice of disciplinary or access denial 

action. 

(a) When required. Whenever an 

exchange decision pursuant to which a 

disciplinary action or access denial 

action is to be imposed has become 

final, the exchange must, within thirty 

days thereafter, provide written notice 

of such action to the person against 

whom the action was taken and notice 

to the National Futures Association 

(‘‘NFA’’) through the NFA’s Background 

Affiliation Status Information Center 

(‘‘BASIC’’) system: Provided, That a 

designated contract market is not 

required to notify the NFA of any 

summary action, as permitted under the 

provisions of part 38, appendix B, Core 

Principle 13, paragraph (a)(6) of this 

chapter, which results in the imposition 

of minor penalties for the violation of 

exchange rules relating to decorum or 

attire. No final disciplinary or access 

denial action may be made effective by 

the exchange except as provided in 

§ 9.12. 

(b) Contents of notice. For purposes of 

this part: 

(1) The written notice of a 

disciplinary action or access denial 

action provided to the person against 

whom the action was taken by a 

designated contract market must be a 

copy of a written decision which 

accords with: 

(i) Part 38, appendix B, Core Principle 

13, paragraph (a)(3) of this chapter in 

the case of settlement offers; 

(ii) Section 38.708 of this chapter in 

the case of decisions; or 

(iii) Part 38, appendix B, Core 

Principle 13, paragraph (a)(5)(iv) of this 

chapter in the case of appeal decisions 

(including copies of any materials 

incorporated by reference) or other 

written notice which must include 

items listed in paragraphs (b)(3)(i)—(vi) 

of this section. 

(2) The written notice of a 

disciplinary action or access denial 

action provided to the person against 

whom the action was taken by a swap 

execution facility must be a copy of a 

written decision which accords with: 

(i) Part 37, appendix B, Core Principle 

2, paragraph (a)(9) of this chapter in the 

case of settlement offers; 

(ii) Section 37.206(d) of this chapter 

in the case of decisions; or 

(iii) Part 37, appendix B, Core 

Principle 2, paragraph (a)(11)(iv) of this 

chapter in the case of appeal decisions 

(including copies of any materials 

incorporated by reference) or other 

written notice which must include 

items listed in paragraphs (b)(3)(i) 

through (vi) of this section. 

(3) The notice of a disciplinary action 

or access denial action provided to the 

NFA must include only the items listed 

in the following paragraphs (b)(3)(i) 

through (v): 

(i) The name of the person against 

whom the disciplinary action or access 

denial action was taken; 

(ii) A statement of the reasons for the 

disciplinary action or access denial 

action, detailing the exchange product 

which was involved, as applicable, and 

whether the violation that resulted in 

the action also resulted in financial 

harm to any customers together with a 

listing of any rules which the person 

who was the subject of the disciplinary 

action or access denial action was 

charged with having violated or which 

otherwise serve as the basis of the 

exchange action; 

(iii) A statement of the conclusions 

and findings made by the exchange with 

regard to each rule violation charged or, 

in the event of settlement, a statement 

specifying those rule violations which 

the exchange has reason to believe were 

committed; 

(iv) The terms of the disciplinary 

action or access denial action; 

(v) The date on which the action was 

taken and the date the exchange intends 

to make the disciplinary or access 

denial action effective; and 

(vi) Except as otherwise provided in 

§ 9.1(b), a statement informing the party 

subject to the disciplinary action or 

access denial action of the availability of 

Commission review of the exchange 

action pursuant to section 8c of the Act 

and this part. 

(c) Delivery and filing of the notice. 

Delivery of the notice must be made 

personally to the person who was the 

subject of the disciplinary action or 

access denial action, by mail to such 

person at that person’s last known 

address, or by email to the person’s last 

known email address. Filing of the 

notice with the NFA is accomplished 

when an authorized exchange employee 

verifies the accuracy of the information 

entered into BASIC. 

(d) Effect of delivery by mail or email. 

Delivery by mail to the person 

disciplined or denied access will be 

complete upon deposit in the mail of a 

properly addressed and postpaid 

document. Where delivery to the person 

disciplined or denied access is effected 

by such mail, the time within which a 

notice of appeal or petition for stay may 

be filed will be increased by three days. 

Delivery by email will be complete 

upon transmission of the email. 

(e) Certification. Copies of the notice 

and the submission of any additional 

information provided pursuant to this 

section must be certified as true and 

correct by a duly authorized officer, 

agent or employee of the exchange. 

Notice filed with the NFA is deemed 

certified when an authorized exchange 

employee verifies the accuracy of the 

information entered into BASIC. 

■ 12. Revise § 9.12 to read as follows: 


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1548 Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 

§ 9.12 Effective date of disciplinary or 

access denial action. 

(a) Effective date. Any disciplinary or 

access denial action taken by an 

exchange will not become effective until 

at least fifteen days after the written 

notice prescribed by § 9.11 is delivered 

to the person disciplined or denied 

access; Provided, however, That the 

exchange may cause a disciplinary 

action to become effective prior to that 

time if: 

(1) As permitted by part 37, appendix 

B, Core Principle 2, paragraph (a)(14) of 

this chapter or part 38, appendix B, Core 

Principle 13, paragraph (a)(7) of this 

chapter (emergency disciplinary 

actions), the exchange reasonably 

believes, and so states in its written 

decision, that immediate action is 

necessary to protect the best interests of 

the marketplace; or 

(2) As permitted by part 37, appendix 

B, Core Principle 2, paragraph (a)(10)(vi) 

of this chapter or part 38, appendix B, 

Core Principle 13, paragraph (a)(4) of 

this chapter (hearings), the exchange 

determines, and so states in its written 

decision, that the actions of a person 

who is within the exchange’s 

jurisdiction has impeded the progress of 

a disciplinary hearing; or 

(3) As permitted by part 37, appendix 

B, Core Principle 2, paragraph (a)(13) of 

this chapter (summary fines for 

violations of rules regarding timely 

submission of records) or part 38, 

appendix B, Core Principle 13, 

paragraph (a)(6) of this chapter 

(summary fines for violations of rules 

regarding timely submission of records, 

decorum, or other similar activities), the 

exchange determines that a person has 

violated exchange rules relating to 

decorum or attire, or timely submission 

of accurate records required for clearing 

or verifying each day’s transactions or 

other similar activities; or 

(4) The person against whom the 

action is taken has consented to the 

penalty to be imposed and to the timing 

of its effectiveness. 

(b) Notice of early effective date. If the 

exchange determines in accordance 

with paragraph (a)(1) of this section that 

a disciplinary action will become 

effective prior to the expiration of 

fifteen days after written notice thereof, 

it must notify the person disciplined in 

writing, either personally or by email to 

the person’s last known email address, 

stating the reasons for the 

determination. The exchange must also 

immediately notify the Commission by 

email to secretary@cftc.gov. Where 

notice is delivered by email, the time 

within which the person so notified 

may file a petition for stay pursuant to 

§ 9.24(a)(2) will be increased by one 

day. 

■ 13. Revise § 9.13 to read as follows: 

§ 9.13 Publication of notice. 

Whenever an exchange suspends, 

expels or otherwise disciplines, or 

denies any person access to the 

exchange, it must make public its 

findings by disclosing at least the 

information contained in the notice 

required by § 9.11(b). An exchange must 

make such findings public as soon as 

the disciplinary action or access denial 

action becomes effective in accordance 

with the provisions of § 9.12 by posting 

a notice on its website to which its 

members and the public regularly have 

access. Such notice must be maintained 

and readily available on the exchange’s 

website. 

■ 14. In § 9.24, revise paragraph (a)(2) to 

read as follows: 

§ 9.24 Petition for stay pending review. 

(a) * * * 

(2) Within ten days after a notice of 

summary action has been delivered in 

accordance with § 9.12(b) to a person 

who is the subject of a summary action 

permitted by part 37, appendix B, Core 

Principle 2, paragraph (a)(14) of this 

chapter or part 38, appendix B, Core 

Principle 13, paragraph (a)(7) of this 

chapter (emergency disciplinary 

actions), that person may petition the 

Commission to stay the effectiveness of 

the summary action pending completion 

of the exchange proceeding. 

* * * * * 

■ 15. Revise § 9.31 to read as follows: 

§ 9.31 Commission review of disciplinary 

or access denial action on its own motion. 

(a) Request for additional information. 

Where a person disciplined or denied 

access has not appealed the exchange 

decision to the Commission, upon 

review of the notice specified in § 9.11, 

the Division of Market Oversight or the 

Division of Swap Dealer and 

Intermediary Oversight may request that 

the exchange file with the Division the 

record of the exchange proceeding, or 

designated portions of the record, a brief 

statement of the evidence and testimony 

adduced to support the exchange’s 

findings that a rule or rules of the 

exchange were violated and such 

recordings, transcripts and other 

documents applicable to the particular 

exchange proceeding as the Division 

may specify. The exchange must 

promptly advise the person who is the 

subject of the disciplinary or access 

denial action of the Division’s request. 

Within thirty days after service of the 

Division’s request, the exchange must 

file the information requested with the 

Division in the manner requested by the 

Division and, upon request, deliver that 

information to the person who is the 

subject of the disciplinary or access 

denial action. Delivery to the person 

who is the subject of the disciplinary or 

access denial action must be in the 

manner prescribed by § 9.11(c). A 

person subject to the disciplinary action 

or access denial action requesting a 

copy of the information furnished to the 

Division must, if the exchange rules so 

provide, agree to pay the exchange 

reasonable fees for printing the copy. 

(b) Review on motion of the 

Commission. The Commission may 

institute review of an exchange 

disciplinary or access denial action on 

its own motion. Other than in 

extraordinary circumstances, such 

review will be initiated within 180 days 

after the NFA has received the notice of 

exchange action provided for in § 9.11. 

If the Commission should institute 

review on its own motion, it will issue 

an order permitting the person who is 

the subject of the disciplinary or access 

denial action an opportunity to file an 

appropriate submission, and the 

exchange an opportunity to file a reply 

thereto. 

Issued in Washington, DC, on January 9, 

2018, by the Commission. 

Christopher J. Kirkpatrick, 

Secretary of the Commission. 

Note: The following appendix will not 

appear in the Code of Federal Regulations. 

Appendix to Technical Amendments to 

Rules on Registration and Review of 

Exchange Disciplinary, Access Denial 

or Other Adverse Actions—Commission 

Voting Summary 

On this matter, Chairman Giancarlo and 

Commissioners Quintenz and Behnam voted 

in the affirmative. No Commissioner voted in 

the negative. 

[FR Doc. 2018–00467 Filed 1–11–18; 8:45 am] 

BILLING CODE 6351–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 9 

Performance of Certain Functions by 

the National Futures Association With 

Respect to the Receipt and Processing 

of Exchange Disciplinary and Access 

Denial Action Information 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice and order; delegation of 

authority. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘Commission’’ or 


sradovich on DSK3GMQ082PROD with RULES