Federal Register / Vol. 75, No. 146 / Friday, July 30, 2010 / Rules and Regulations 44887 

word ‘‘itself’’ with the word 

‘‘themselves’’. 

2. On page 27620, in the first column, 

in the 42nd line, add a period followed 

by two spaces between ‘‘airport)’’ and 

‘‘DOT’s’’. 

3. On page 27651, in the first column, 

in the 11th line, replace ‘‘382.5’’ with 

‘‘382.7.’’ 

4. On the same page, in the second 

column, in the 27th line, replace ‘‘382.5’’ 

with ‘‘382.7.’’ 

5. On page 27654, in the first column, 

in the 29th and the 30th lines, delete the 

first word ‘‘would’’ from the phrase ‘‘if 

doing so would would not result’’ so it 

reads ‘‘if doing so would not result’’. 

6. On the same page in the same 

column, in the 34th line, delete the 

word ‘‘should’’ from the phrase ‘‘service 

would should allow’’ so it reads ‘‘service 

would allow’’. 

7. On page 27665, in the first column, 

in the 35th and the 36th lines, revise the 

phrase ‘‘mall carrier use the same 

airport’’ so it reads ‘‘Small carriers using 

the same airport. * * *’’ 

8. On the same page, in the same 

column, in the 50th line, delete the 

word ‘‘a’’ that was between the words 

‘‘the’’ and ‘‘present’’ so the phrase reads 

‘‘the present value’’. 

B. Corrections to the Final Rule 

List of Subjects in 14 CFR Part 382 

Air carriers, Consumer protection, 

Individuals with disabilities, Reporting 

and recordkeeping requirements. 

■ Accordingly, 14 CFR Part 382 is 

corrected by making the following 

correcting amendments: 

PART 382—NONDISCRIMINATION ON 

THE BASIS OF DISABILITY IN AIR 

TRAVEL; STOWAGE OF 

WHEELCHAIRS, OTHER MOBILITY 

AIDS, AND OTHER ASSISTIVE 

DEVICES 

■ 1. The authority citation for Part 382 

continues to read as follows: 

Authority: 49 U.S.C. 41705. 

■ 2. In § 382.7, revise paragraph (f) to 

read as the follows: 

§ 382.7 To whom do the provisions of this 

Part apply? 

* * * * * 

(f) If you are an indirect carrier, 

§§ 382.1 through 382.15 of this Part 

apply to you. §§ 382.17 through 382.157 

of this Part do not apply to you except 

insofar as provided by § 382.11(b). 

* * * * * 

■ 3. In § 382.11, revise paragraph (b) to 

read as the follows: 

§ 382.11 What is the general 

nondiscrimination requirement of this Part? 

* * * * * 

(b) As an indirect carrier, you must 

comply with §§ 382.17 through 382.157 

of this Part when providing facilities or 

services to passengers that would have 

otherwise been provided by a direct air 

carrier. 

■ 4. In § 382.23, revise the last sentence 

of paragraph (d) to read as the follows: 

§ 382.23 May carriers require a passenger 

with a disability to provide a medical 

certificate? 

* * * * * 

(d) * * * If the results of this medical 

review demonstrate that the passenger, 

notwithstanding the medical certificate, 

is likely to be unable to complete the 

flight without requiring extraordinary 

medical assistance (e.g., the passenger 

has apparent significant difficulty in 

breathing, appears to be in substantial 

pain, etc.) or would pose a direct threat 

to the health or safety of other persons 

on the flight, you may take an action 

otherwise prohibited under § 382.21(a) 

of this Part. 

■ 5. In § 382.27, revise paragraph (a) to 

read as the follows: 

§ 382.27 May a carrier require a passenger 

with a disability to provide advance notice 

in order to obtain certain specific services 

in connection with a flight? 

(a) Except as provided in paragraph 

(b) of this section and §§ 382.133(c)(4) 

and (5) and 382.133 (d)(5) and (6), as a 

carrier you must not require a passenger 

with a disability to provide advance 

notice in order to obtain services or 

accommodations required by this Part. 

* * * * * 

§ 382.51 [Amended] 

■ 6. In § 382.51, amend the last sentence 

of paragraph (b) by replacing the word 

‘‘part’’ with ‘‘Part’’. 

■ 7. In § 382.111, revise the first 

sentence of paragraph (e) and revise 

paragraph (f) to read as the follows: 

§ 382.111 What services must carriers 

provide to passengers with a disability on 

board the aircraft? 

* * * * * 

(e) Assistance in stowing and 

retrieving carry-on items, including 

mobility aids and other assistive devices 

stowed in the cabin (see also 382.91(d)). 

* * * . 

(f) Effective communication with 

passengers who have vision 

impairments or who are deaf or hard-ofhearing, so that these passengers have 

prompt access to information the carrier 

provides to other passengers (e.g. 

weather, on-board services, flight 

delays, connecting gates at the next 

airport). 

■ 8. In § 382.151, revise paragraph (a) 

and amend paragraph (c)(1) by adding 

the phrase ‘‘to do so’’ after the phrase 

‘‘provide the passenger a means’’ to read 

as follows: 

§ 382.151 What are the requirements for 

providing Complaints Resolution Officials? 

(a) As a carrier providing service 

using aircraft with 19 or more passenger 

seats, you must designate one or more 

CROs. 

* * * * * 

■ 9. In § 382.153, revise the introductory 

text to read as the follows: 

§ 382.153 What actions do CROs take on 

complaints? 

When a complaint is made directly to 

a CRO for a carrier providing service 

using aircraft with 19 or more passenger 

seats, the CRO must promptly take 

dispositive action as follows: 

* * * * * 

■ 10. In § 382.155, revise paragraph (a) 

by eliminating the reference to 

scheduled and nonscheduled services 

so the pertinent language reads as 

follows: 

§ 382.155 How must carriers respond to 

written complaints? 

(a) As a carrier providing service 

using aircraft with 19 or more passenger 

seats, you must respond to written 

complaints received by any means (e.g., 

letter, fax, e-mail, electronic instant 

message) concerning matters covered 

buy this Part. 

* * * * * 

Issued on July 21, 2010 at Washington, DC, 

under authority delegated in 49 CFR 1.57(j). 

Robert S. Rivkin, 

General Counsel. 

[FR Doc. 2010–18531 Filed 7–29–10; 8:45 am] 

BILLING CODE 4910–9X–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 732, 736, 740, and 748 

[Docket No. 080215200–91321–01] 

RIN 0694–AE27 

Foreign Direct Products of U.S. 

Technology 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Final rule. 

SUMMARY: The Bureau of Industry and 

Security (BIS) clarifies the scope of the 


jlentini on DSKJ8SOYB1PROD with RULES
44888 Federal Register / Vol. 75, No. 146 / Friday, July 30, 2010 / Rules and Regulations 

‘‘direct product rule’’ set forth in the 

Export Administration Regulations 

(EAR). Under the EAR’s ‘‘direct product 

rule,’’ foreign-made items that are 

located outside of the United States; 

subject to national security controls 

under the EAR; the direct product of 

U.S.-origin software or technology that 

requires a written assurance as a 

supporting document for a license or as 

a pre-condition for use of License 

Exception Technology and Software, 

Restricted (TSR); and are being 

reexported to a destination in a country 

of national security concern or a 

terrorist supporting country, are subject 

to the EAR and require an export license 

or license exception. This rule also 

makes parallel revisions or clarifications 

to written assurances required under 

License Exception TSR (Technology and 

Software Restricted), information 

required on the license application for 

national security controlled technology, 

and the instructional steps in the EAR 

that provide guidance on how to apply 

the direct product rule. 

DATES: Effective Date: This rule is 

effective July 30, 2010. 

ADDRESSES: Although this rule is in final 

form, written comments may be 

submitted via http:// 

www.regulations.gov; by e-mail directly 

to BIS at publiccomments@bis.doc.gov; 

in hardcopy to U.S. Department of 

Commerce, Bureau of Industry and 

Security, Regulatory Policy Division, 

14th and Pennsylvania Ave., NW., 

Room H–2705, Washington, DC 20230; 

or by fax to (202) 482–3355. Please 

insert ‘‘0694–AE27’’ in the subject line of 

the written comments. 

FOR FURTHER INFORMATION CONTACT: 

Sharron Cook, Office of Exporter 

Services, Bureau of Industry and 

Security, U.S. Department of Commerce, 

at (202) 482–2440 or by e-mail: 

scook@bis.doc.gov. 

Comments regarding the collections of 

information associated with this rule, 

including suggestions for reducing the 

burden, should be sent to OMB Desk 

Officer, New Executive Office Building, 

Washington, DC 20503, Attention: 

Jasmeet Seehra, or by e-mail to 

Jasmeet_K._Seehra@omb.eop.gov, or by 

fax to (202) 395–7285; and to the Office 

of Administration, Bureau of Industry 

and Security, Department of Commerce, 

14th and Pennsylvania Avenue, NW., 

Room 6883, Washington, DC 20230. 

SUPPLEMENTARY INFORMATION: 

Direct Product Rule 

Items subject to the Export 

Administration Regulations (EAR) 

include items located in the United 

States, wherever they are produced; 

items of ‘‘U.S. origin,’’ that is, those 

produced in the United States, wherever 

they are located; and certain foreign 

produced items, including items subject 

to the EAR only on the basis of the 

‘‘direct product rule.’’ The ‘‘direct 

product rule’’ is found in General 

Prohibition No. 3, section 736.2(b)(3) of 

the EAR, and in section 734.3(a)(4). 

Under the ‘‘direct product rule’’ as 

amended, foreign-made items are 

subject to the EAR and require an export 

license or license exception, if such 

items are: 

• Located outside of the United 

States; 

• Subject to national security controls 

under the EAR; 

• The direct product of U.S.-origin 

software or technology that requires a 

written assurance as a supporting 

document for a license or as a precondition for use of License Exception 

Technology and Software, Restricted 

(TSR); and 

• Being reexported to a destination in 

Country Group D:1 and E:1 of 

Supplement No. 1 to part 740. 

As discussed in section 732.2(f), it is 

necessary to determine whether an item 

is potentially subject to the ‘‘direct 

product rule’’ only with regard to 

foreign-produced items located in 

foreign countries. 

This final rule changes the ‘‘direct 

product rule’’ as it is codified in the 

EAR, by expanding the country scope of 

the rule from Country Group D:1 and 

Cuba to Country Group D:1 and E:1 

(Cuba, Iran, North Korea, Sudan, and 

Syria). This change is being made to 

bring the ‘‘direct product rule’’ into 

harmony with the policies the United 

States maintains against terrorist 

supporting countries in Country Group 

E:1. 

Part 732—Steps for Using the EAR 

This rule amends section 732.2, 

‘‘Steps Regarding Scope of the EAR,’’ by 

revising paragraph (f)(1)(i) in ‘‘Step 6: 

Foreign-made items produced with 

certain U.S. technology for export to 

specified destinations,’’ specifically 

paragraph (f)(1)(i) and amending section 

732.3, ‘‘Steps Regarding the Ten General 

Prohibitions,’’ by revising paragraph 

(f)(1)(ii) ‘‘Step 11: Foreign-produced 

direct product’’ to expand the country 

scope of these steps to include all the 

countries in Country Group E:1, namely, 

Cuba, Iran, North Korea, Sudan, and 

Syria. Because this part of the EAR is 

merely guidance, it will not affect the 

paperwork burden of the public. 

License Exception TSR (Technology 

and Software Restricted) 

A ‘‘License Exception’’ is an 

authorization contained in part 740 of 

the EAR that allows export or reexport 

under stated conditions of items subject 

to the EAR that would otherwise require 

a license under the provisions of the 

EAR. License Exception TSR, found in 

section 740.6 of the EAR, authorizes 

exports and reexports of certain 

technology and software to destinations 

in Country Group B of Supplement No. 

1 to part 740 of the EAR. Eligible 

technology and software are those that 

require a license for national security 

reasons only, and are identified by 

‘‘TSR—Yes’’ in Export Control 

Classification Numbers (ECCNs) on the 

Commerce Control List (Supplement 

No. 1 to part 774 of the EAR). Prior to 

using this license exception, a written 

assurance as described in section 740.6 

of the EAR must be obtained from the 

consignee. This assurance is required as 

a preventative measure against 

diversion or release of U.S.-origin 

technology, a national securitycontrolled foreign direct product of such 

technology, and a national securitycontrolled foreign direct product of a 

plant or manufacturing equipment made 

from such technology to Cuba or 

countries with which the U.S. has 

national security concerns and nationals 

thereof. This rule expands the country 

scope covered by this assurance to 

include all the countries in Country 

Group E:1 of Supplement No. 1 to part 

740 of the EAR. License Exception TSR 

is subject to the restrictions of section 

740.2 of the EAR that apply to all 

license exceptions in part 740 of the 

EAR. This revision will have no effect 

on the paperwork burden of exporters 

using License Exception TSR. 

License Applications for Shipments 

That Include U.S.-Origin Technology 

In addition to the instructions 

contained in Supplement No. 1 to part 

748 that describe how to submit an 

application to BIS, section 748.9 and 

Supplement No. 2 to part 748 of the 

EAR set out requirements that license 

applicants must address for certain 

items or types of transactions. This rule 

revises the instructions under paragraph 

(i), ‘‘Parts, components, and materials 

incorporated abroad into foreign-made 

products’’ by expanding the country 

scope to include all the countries in 

Country Group E:1. With the 

publication of this rule, paragraph 

(i)(2)(x) now states that if the foreignmade product is the direct product of 

U.S.-origin technology, and U.S.-origin 

technology will accompany a shipment 


jlentini on DSKJ8SOYB1PROD with RULES
Federal Register / Vol. 75, No. 146 / Friday, July 30, 2010 / Rules and Regulations 44889 

to a country listed in Country Group D:1 

or E:1 (see Supplement No. 1 to part 740 

of the EAR), Block 24 must describe the 

type of technology and how it will be 

used. This change is being made to 

conform to the changes being made 

elsewhere in this rule to the ‘‘direct 

product rule.’’ The effect of this 

amendment on the paperwork burden 

hours for filling out a license 

application is negligible, as there are 

rarely transactions involving these items 

to countries in Country Group E:1. 

Export Administration Act 

Since August 21, 2001, the Act has 

been in lapse. However, the President, 

through Executive Order 13222 of 

August 17, 2001 (3 CFR, 2001 Comp. 

783 (2002)), which has been extended 

by successive Presidential Notices, the 

most recent being that of August 13, 

2009 (74 FR 41325 (August 14, 2009)), 

has continued the Regulations in effect 

under the International Emergency 

Economic Powers Act (50 U.S.C. 1701 et 

seq.). 

Saving Clause 

Shipments of items removed from 

license exception eligibility or from 

eligibility for export without a license as 

a result of this regulatory action that 

were on dock for loading, on lighter, 

laden aboard an exporting carrier, or en 

route aboard a carrier to a port of export, 

on July 30, 2010, pursuant to actual 

orders for export to a foreign 

destination, may proceed to that 

destination under the previous license 

exception eligibility, or without a 

license, so long as they have been 

exported from the United States before 

September 28, 2010. Any such items not 

actually exported before midnight, on 

September 28, 2010, require a license in 

accordance with this regulation. 

Rulemaking Requirements 

1. This final rule has been determined 

to be significant for purposes of 

Executive Order 12866. 

2. Notwithstanding any other 

provision of law, no person is required 

to respond to, nor shall any person be 

subject to a penalty for failure to comply 

with a collection of information subject 

to the requirements of the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.) (PRA), unless that collection of 

information displays a currently valid 

Office of Management and Budget 

(OMB) Control Number. This rule 

involves two collections of information 

subject to the PRA. One of the 

collections has been approved by OMB 

under control number 0694–0088, 

‘‘Multi Purpose Application,’’ and 

carries a burden hour estimate of 58 

minutes for a manual or electronic 

submission. The other collection has 

been approved by OMB under control 

number 0694–0106, ‘‘Reporting and 

Recordkeeping Requirements under the 

Wassenaar Arrangement,’’ and carries a 

burden hour estimate of 21 minutes for 

a manual or electronic submission. Send 

comments regarding these burden 

estimates or any other aspect of these 

collections of information, including 

suggestions for reducing the burden, to 

OMB Desk Officer, New Executive 

Office Building, Washington, DC 20503; 

and to Jasmeet Seehra, OMB Desk 

Officer, by e-mail at 

Jasmeet_K._Seehra@omb.eop.gov or by 

fax to (202) 395–7285; and to the Office 

of Administration, Bureau of Industry 

and Security, Department of Commerce, 

14th and Pennsylvania Avenue, NW., 

Room 6622, Washington, DC 20230. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under Executive Order 

13132. 

4. The provisions of the 

Administrative Procedure Act (5 U.S.C. 

553) requiring notice of proposed 

rulemaking, the opportunity for public 

participation, and a delay in effective 

date, are inapplicable because this 

regulation involves a military and 

foreign affairs function of the United 

States (5 U.S.C. 553(a)(1)). Further, no 

other law requires that a notice of 

proposed rulemaking and an 

opportunity for public comment be 

given for this final rule. Because a 

notice of proposed rulemaking and an 

opportunity for public comment are not 

required to be given for this rule under 

the Administrative Procedure Act or by 

any other law, the analytical 

requirements of the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.) are 

not applicable. BIS implements the 

‘‘direct product rule’’ to require licenses 

for the reexport of items controlled for 

national security reasons to countries in 

Country Groups D:1 and E:2. If this rule 

were delayed to allow for notice and 

comment and a delay in the effective 

date, it would provide additional time 

to the embargoed countries, which are 

being added to the list of countries for 

which the direct product rule applies, to 

receive items without a license, contrary 

to the foreign policy and national 

security of the United States. Therefore, 

this regulation is issued in final form. 

Although there is no formal comment 

period, public comments on this 

regulation are welcome on a continuing 

basis. Comments should be submitted to 

Sharron Cook, Office of Exporter 

Services, Bureau of Industry and 

Security, Department of Commerce, 

14th and Pennsylvania Ave., NW., 

Room 2705, Washington, DC 20230. 

List of Subjects 

15 CFR Part 732 

Administrative practice and 

procedure, Exports, Reporting and 

recordkeeping requirements. 

15 CFR Part 736 

Exports. 

15 CFR Parts 740 and 748 

Administrative practice and 

procedure, Exports, Reporting and 

recordkeeping requirements. 

■ Accordingly, Parts 732, 736, 740 and 

748 of the Export Administration 

Regulations (15 CFR Parts 730–774) are 

amended as follows: 

PART 732—[AMENDED] 

■ 1. The authority citation for Part 732 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701–1706; E.O. 13026, 61 FR 58767, 

3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 

FR 44025, 3 CFR, 2001 Comp., p. 783; Notice 

of August 13, 2009, 74 FR 41325 (August 14, 

2009). 

■ 2. Section 732.2 is amended by 

revising paragraph (f)(1)(i) to read as 

follows: 

§ 732.2 Steps regarding scope of the EAR. 

* * * * * 

(f) * * * 

(1) * * * 

(i) Country scope of prohibition. Your 

reexport destination for the foreignproduced direct product is a destination 

in Country Group D:1 or E:1 (see 

Supplement No. 1 to part 740 of the 

EAR) (reexports of foreign-produced 

direct products to other destinations are 

not subject to General Prohibition 

Three); 

* * * * * 

■ 3. Section 732.3 is amended by 

revising paragraph (f)(1)(i), to read as 

follows: 

§ 732.3 Steps regarding the ten general 

prohibitions. 

* * * * * 

(f) * * * 

(1) * * * 

(i) Country scope of prohibition. Your 

reexport destination for the direct 

product is a destination in Country 

Group D:1 or E:1 (see Supplement No. 

1 to part 740 of the EAR) (reexports of 

foreign-produced direct products to 

other destinations are not subject to 

General Prohibition Three described in 

§ 736.2(b)(3) of the EAR); 

* * * * * 


jlentini on DSKJ8SOYB1PROD with RULES
44890 Federal Register / Vol. 75, No. 146 / Friday, July 30, 2010 / Rules and Regulations 

1 74 FR 66598 (Dec. 16, 2009). 

2For purposes of this release, a comment letter is 

referenced by: (i) Its author, (ii) its file number (as 

shown in the comment file associated with the 

Notice on the Commission’s Web site), and (iii) the 

page (if applicable). The comment file associated 

with the Notice is available at http://www.cftc.gov/ 

LawRegulation/FederalRegister/CommentFiles/09- 

034.html. 

3Albert Togut of Togut, Segal & Segal LLP 

(Trustee for Refco, LLC) (‘‘Refco Trustee’’) (CL01). 

4The Futures Industry Association (representing 

the commodity futures and options industry) 

(‘‘FIA’’) (CL02). 

PART 736—[AMENDED] 

■ 4. The authority citation for Part 736 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; 22 U.S.C. 2151 note; E.O. 

12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 

950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 

Comp., p. 219; E.O. 13026, 61 FR 58767, 3 

CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 

44025, 3 CFR, 2001 Comp., p. 783; E.O. 

13338, 69 FR 26751, May 13, 2004; Notice of 

August 13, 2009, 74 FR 41325 (August 14, 

2009); Notice of November 6, 2009, 74 FR 

58187 (November 10, 2009). 

■ 5. Section 736.2 is amended by 

revising paragraph (b)(3)(i), to read as 

follows: 

§ 736.2 General prohibitions and 

determination of applicability. 

* * * * * 

(b) * * * 

(3) * * * 

(i) Country scope of prohibition. You 

may not, without a license or license 

exception, reexport any item subject to 

the scope of this General Prohibition 

Three to a destination in Country Group 

D:1 or E:1 (See Supplement No. 1 to part 

740 of the EAR). 

* * * * * 

PART 740—[AMENDED] 

■ 6. The authority citation for Part 740 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; 22 U.S.C. 7201 et seq.; 

E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., 

p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 

Comp., p. 783; Notice of August 13, 2009, 74 

FR 41325 (August 14, 2009). 

§ 740.6 [Amended] 

■ 7. Section 740.6 is amended by 

removing the reference to ‘‘E:2’’ and 

adding in its place ‘‘E:1’’ in paragraphs 

(a)(1)(i), (a)(1)(ii), (a)(1)(iii), (a)(2)(i) and 

(a)(2)(ii). 

PART 748—[AMENDED] 

■ 8. The authority citation for Part 748 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 

3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 

FR 44025, 3 CFR, 2001 Comp., p. 783; Notice 

of August 13, 2009, 74 FR 41325 (August 14, 

2009). 

■ 9. Supplement No. 2 to Part 748 is 

amended by removing the reference to 

‘‘E:2’’ and adding in its place ‘‘E:1’’ in 

paragraph (i)(2)(x) and twice in 

paragraph (o)(3)(i). 

Dated: July 23, 2010. 

Kevin J. Wolf, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2010–18733 Filed 7–29–10; 8:45 am] 

BILLING CODE 3510–33–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 190 

RIN 3038–AC90 

Operation, in the Ordinary Course, of 

a Commodity Broker in Bankruptcy 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final rule. 

SUMMARY: The Commodity Futures 

Trading Commission (the 

‘‘Commission’’) is amending its 

regulations regarding the operation of a 

commodity broker in bankruptcy, in 

order to permit the trustee in such 

bankruptcy to operate, with the written 

permission of the Commission, the 

business of such commodity broker in 

the ordinary course, including the 

purchase or sale of new commodity 

contracts on behalf of the customers of 

such commodity broker, under 

appropriate circumstances, as 

determined by the Commission. 

DATES: Effective Date: The final rules are 

effective as of August 30, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Robert B. Wasserman, Associate 

Director, Division of Clearing and 

Intermediary Oversight, 202–418–5092, 

rwasserman@cftc.gov; or Alicia L. 

Lewis, Attorney-Advisor, Division of 

Clearing and Intermediary Oversight, 

202–418–5862, alewis@cftc.gov; 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On December 16, 2009, the 

Commission published a Notice of 

Proposed Rulemaking, which proposed 

to amend Regulation 190.04(d) to permit 

a trustee, under appropriate 

circumstances, to operate the business 

of a commodity broker in bankruptcy in 

the ordinary course, including the 

purchase or sale of new commodity 

contracts on behalf of the customers of 

such commodity broker (the ‘‘Notice’’).1

The proposed rule stated that the 

appropriateness of a particular set of 

circumstances would be determined by 

the Commission in its discretion, and 

such operation would require the 

written permission of the Commission. 

The public comment period on the 

Notice ended on January 15, 2010. The 

Commission received two comments 2

during the comment period: (i) One 

from the trustee of a futures commission 

merchant (‘‘FCM’’) that was sold as a 

going concern in bankruptcy3 and (ii) 

one from a futures industry trade 

association.4

Collectively, the comments raise the 

following five (5) concerns with the 

Notice: 

• The Commission’s proposed rule is 

premature. 

• The Commission staff should not be 

responsible for operating the FCMrelated business of an insolvent FCM/ 

broker-dealer. 

• The Commission’s proposed rule is 

overly broad as it does not specify all 

circumstances the Commission will 

consider in authorizing a trustee to 

operate the business of an FCM and 

provide the public with an opportunity 

to comment on these circumstances. 

• The Commission should work with 

the Securities and Exchange 

Commission and the Securities Investor 

Protection Corporation to develop 

uniform procedures to guide a trustee of 

an insolvent FCM/broker-dealer in the 

absence of legislative changes. 

• The Commission should grant 

immunity to a bankruptcy trustee, who 

is to operate the business of a 

commodity broker, in the limited 

operation of the business. 

The Commission will address below 

each of the five concerns. 

II. Concern That the Commission’s 

Proposed Rule Is Premature 

FIA stated that further action on the 

proposed rule is premature as the House 

of Representatives has passed a 

financial services reform bill which 

instructs the Commission, in 

coordination with the Securities and 

Exchange Commission (‘‘SEC’’) and 

several bank regulatory authorities, to 

recommend, within 180 days of the 

bill’s enactment, legislative changes to 

the federal insolvency laws to, among 


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