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[Federal Register: January 4, 1999 (Volume 64, Number 1)]
[Rules and Regulations]
[Page 24-27]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04ja99-15]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Parts 145 and 147


Commission Records and Information; Open Commission Meetings

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'' or
``CFTC'') adopts final rules relating to Commission records and
information. The rules update and streamline procedures in light of the
Commission's experience in the past several years and amend rules
regarding open Commission meetings to conform to these modifications.

EFFECTIVE DATE: February 3, 1999.

FOR FURTHER INFORMATION CONTACT:
Eileen Donovan, Attorney-Advisor, Office of the Secretariat, (202) 418-
5096, Commodity Futures Trading Commission, Three Lafayette Centre,
1155 21st Street, NW, Washington, DC 20581. Facsimile: (202) 418-5543.
Electronic mail: [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    By notice published at 61 FR 66949 on December 19, 1996, the
Commission requested comments from the public regarding its proposal to
modify its rules relating to Commission records and information. The
proposal was based on the Commission's experience since the rules
implementing the Freedom of Information Act (``FOIA''), 5 U.S.C. 552
(1997), had been revised October 5, 1989 and the Commission's desire to
conform the rules to its practice and the Freedom of Information Reform
Act of 1986 (Pub. L. 99-570, Secs. 1801-1804). The Commission proposed
modifying the terms of Section 145.5(g)(1) to conform to Exemption 7, 5
U.S.C. 552(b)(7), relating to requests for records compiled for law
enforcement purposes, modifying the procedures regarding requests for
confidential treatment and compilation of Commission records available
to the public, increasing the schedule of fees, and changing the rule
to reflect current addresses and telephone numbers. In response to its
notice, the Commission received only one comment, which was submitted
by the New York Mercantile Exchange (``NYMEX''). NYMEX expressed
concern regarding one aspect of the proposed revision of 17 CFR
145.9(d)(7) and (e)(1).
    Under the current scheme, when there is a FOIA request for
materials for which confidential treatment has been sought under
Section 145.9 by the submitter of the materials, the Assistant
Secretary of the Commission for Freedom of Information, Privacy and
Sunshine Acts Compliance, (``Assistant Secretary'') seemingly must
require the submitter to file a detailed written justification of the
confidential treatment request within ten days. However, in some cases
the submitter's initial petition for confidential treatment of the
information or its response to a prior FOIA request is so complete that
the Assistant Secretary does not need supplemental information. The
proposed modifications to Sections 145.9(d)(7)

[[Page 25]]

and 145.9(e)(1) address release of information for which confidential
treatment has been requested but as to which the Assistant Secretary
determines that it is necessary for the submitter of the material to
provide supplemental information justifying confidential treatment. As
proposed, the rule provides that the Assistant Secretary will notify
the submitter of the material that the requested information will be
released after ten business days unless the submitter objects by
providing a detailed written justification and that, absent a timely
detailed written justification, the submitter will not be given an
opportunity to appeal an adverse determination. NYMEX contends that ten
business days may not provide a submitter with sufficient time to
prepare and file a detailed written justification and urges the
Commission to revise its proposal to permit a submitter to request an
extension of the response period.
    The Commission has decided to amend the proposed language to
accommodate NYMEX's concern. Accordingly, in the final rule the
Commission has inserted in Section 145.9(d)(7) ``Upon request and for
good cause shown, the Assistant Secretary may grant an extension of
such time,'' and in Section 145.9(e)(1) the Commission has inserted
``(unless under Sec. 145.9(d)7) an extension of time has been
granted).''
    The Commission reviewed the proposed language in Sections
145.9(d)(4), 145.9(d)(6), 145.9(d)(7), and 145.9(d)(8) and determined
that the language should be clarified. Therefore, the Commission
redrafted those sections to make them clearer without changing the
meaning of the proposed language substantially. Accordingly, the
Commission determined that it was not necessary to request comment from
the public regarding these modifications. The modifications are set
forth below.
    Section 145.9(d)(4) is modified by changing ``possible'' to
``practicable'' in the phrase ``at the time the information is
submitted or as soon thereafter as possible''.
    Section 145.9(d)(6) is redrafted as follows:

    A request for confidential treatment (as distinguished from the
material that is the subject of the request) shall be considered a
public document. When a submitter deems it necessary to include, in
its request for confidential treatment, information for which it
seeks confidential treatment, the submitter shall place that
information in an appendix to the request.

    Section 145.9(d)(7) is modified by inserting ``from the Assistant
Secretary'' after ``On ten business days notice'' and before the comma.
    Section 145.9(d)(8)(i) is redrafted as follows:

    Requests for confidential treatment for any reasonably
segregable material that is not exempt from public disclosure under
the Freedom of Information Act, as implemented in Sec. 145.5, shall
be summarily rejected under Sec. 145.9(d)(9). Requests for
confidential treatment of public information contained in financial
reports as specified in Sec. 1.10 shall not be processed. A
submitter has the burden of specifying clearly and precisely the
material that is the subject of the confidential treatment request.
A submitter may be able to meet this burden in various ways,
including:

    Additionally, the Commission has modified proposed Section
145.5(g)(1)(i) ``Disclosure of nonpublic records.'' The proposed rule
includes an exemption for records or information compiled for law
enforcement purposes to the extent that the production of such
information would interfere with enforcement activities undertaken by
the listed entities. The list, as proposed, includes both ``foreign
governmental authority'' and ``foreign futures or securities
authority.'' It is unnecessary to include both terms because the term
``foreign governmental authority'' includes law enforcement activities
undertaken by a foreign futures authority as defined by the Commodity
Exchange Act or a foreign securities authority. Accordingly, the
Commission is deleting the term ``foreign futures or securities
authority'' from the final rule.
    The Commission has also deleted Section 145.5(g)(2) which defines
``investigatory records'' form the final rule because Section
145.5(g)(1) renders it redundant and has renumbered Section 145.5(g)
accordingly. Section 145.9(d)(10) is also deleted because it has been
incorporated into Section 145.9(d)(4), and reference to it in Section
145.9(d)(1) has been revised accordingly.

II. Related Matter

Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601 et seq.
(1988), requires that agencies, in proposing rules, consider the impact
of those rules on small businesses. The Commission has previously
determined, pursuant to 5 U.S.C. 605(b), that Part 145 rules relating
to Commission records and information do not have a significant
economic impact on a substantial number of small business entities.
Because they do not impose regulatory obligations on commodity
professionals and small commodity firms and because, if instituted, the
proposed corrections and amendments will expedite and improve the FOIA
process, the Commission does not expect the final rule to have a
significant economic impact on a substantial number of small business
entities.
    Accordingly, pursuant to Rule 3(a) of the RFA (5 U.S.C. 605(b)),
the Chairperson, on behalf of the Commission, certifies that this
proposed rule will not have a significant economic impact on a
substantial number of small entities.

List of Subjects

17 CFR Part 145

    Confidential business information, Freedom of information.

17 CFR Part 17

    Sunshine Act.

    For the reasons set forth in the preamble, title 17, parts 145 and
147 are amended as follows:

PART 145--COMMISSION RECORDS AND INFORMATION

    1. The authority for Part 145 is revised to read:

    Authority: Pub. L. 99-570, 100 Stat. 3207; Pub. L. 89-554, 80
Stat. 383; Pub. L. 90-23, 81 Stat. 54; Pub. L. 98-502, 88 Stat.
1561-1564 (5 U.S.C. 552); Sec. 101(a), Pub. L. 93-463, 88 Stat. 1389
(5 U.S.C. 4a(j)); unless otherwise noted.

    2. Section 145.5 is amended as set forth below:
    a. In the introductory paragraph add a sentence to the end as set
forth below.
    b. Remove the introductory text of paragraph (d)(1).
    c. In (d)(1)(i)(B) and (E) remove the following phrase: ``Provided,
The procedure set forth in 17 CFR 1.10(g) is followed:''.
    d. In (d)(1)(i)(C) and (D) remove the following phrase: ``,
provided the procedure set forth in Sec. 1.10(g) of this chapter is
followed''.
    e. In (d)(1)(i)(F) remove the following phrase: ``, if the
procedure set forth in Sec. 1.10(g) of this chapter is followed''.
    f. In (d)(1)(i)(H) remove the following phrase: ``, provided the
procedure set forth in Sec. 31.13(m) of this chapter is followed''.
    g. Paragraph (g) is revised to read as set forth below.


Sec. 145.5  Disclosure of nonpublic records.

    * * * Requests for confidential treatment of segregable public
information will not be processed.
* * * * *
    (g) Records or information compiled for law enforcement purposes to
the extent that the production of such records or information:

[[Page 26]]

    (1) Could reasonably be expected to interfere with enforcement
activities undertaken or likely to be undertaken by the Commission or
any other authority including, but not limited to, the Department of
Justice or any United States Attorney or any Federal, State, local, or
foreign governmental authority or any futures or securities industry
self-regulatory organization;
    (2) Would deprive a person of a right to a fair trail or an
impartial adjudication;
    (3) Could reasonably be expected to constitute an unwarranted
invasion of personal privacy;
    (4) Could reasonably be expected to disclose the identity of a
confidential source including a State, local or foreign agency or
authority or any private institution which furnished information on a
confidential basis and, in the case of a record or information compiled
by a criminal law enforcement authority in the course of a criminal
investigation or by an agency conducting a lawful national security
intelligence investigation, information furnished by a confidential
source;
    (5) Would disclose techniques or procedures or would disclose
guidelines for law enforcement investigations or prosecutions if such
disclosure could reasonably be expected to risk circumvention of the
law; or
    (6) Could reasonably be expected to endanger the life or physical
safety of any individual.
* * * * *


Sec. 145.6  [Amended]

    3. In Sec. 145.6(a), remove the phrase ``(816) 374-6602'' and add
in its place ``(816) 931-7600''; remove the phrase ``10880 Wilshire
Blvd., suite 1005 Los Angeles, California 90024, Telephone: (310) 575-
6783'' and add in its place ``10900 Wilshire Boulevard, Suite 400, Los
Angeles, California 90024, Telephone: (310) 235-6783''.
    4. Section 145.9 is amended as set forth below:
    a. In (d)(1) remove the phrase ``(d)(10)'' and insert in its place
``(d)(4)''.
    b. Remove (d)(10) and redesignate (d)(11) as (d)(10).
    c. Revise paragraphs (d)(4), (6), (7), and (8) and the first
sentence of (e)(1) to read as follows:


Sec. 145.9  Petition for confidential treatment of information
submitted to the Commission.

* * * * *
    (d) * * *
    (4) A request for confidential treatment should accompany the
material for which confidential treatment is being sought. If a request
for confidential treatment is filed after the filing of such material,
the submitter shall have the burden of showing that it was not possible
to request confidential treatment for that material at the time the
material was filed. A request for confidential treatment of a future
submission will not be processed. All records which contain information
for which a request for confidential treatment is made or the
appropriate segregable portions thereof should be marked by the person
submitting the records with a prominent stamp, typed legend, or other
suitable form of notice on each page or segregable portion of each page
stating ``Confidential Treatment Requested by [name].'' If such marking
is impractical under the circumstances, a cover sheet prominently
marked ``Confidential Treatment Requested by [name]'' should be
securely attached to each group of records submitted for which
confidential treatment is requested. Each of the records transmitted in
this matter should be individually marked with an identifying number
and code so that they are separately identifiable. In some
circumstances, such as when a person is testifying in the course of a
Commission investigation or providing documents requested in the course
of a Commission inspection, it may be impractical to submit a written
request for confidential treatment at the time the information is first
provided to the Commission. In no circumstances can the need to comply
with the requirements of this section justify or excuse any delay in
submitting information to the Commission. Rather, in such
circumstances, the person testifying or otherwise submitting
information should inform the Commission employee receiving the
information, at the time the information is submitted or as soon
thereafter as practicable, that the person is requesting confidential
treatment for the information. The person shall then submit a written
request for confidential treatment within 30 days of the submission of
the information. If access is requested under the Freedom of
Information Act with respect to material for which no timely request
for confidential treatment has been made, it may be presumed that the
submitter of the information has waived any interest in asserting that
the material is confidential.
* * * * *
    (6) A request for confidential treatment (as distinguishing from
the material that is the subject of the request) shall be considered a
public document. When a submitter deems it necessary to include, in its
request for confidential treatment, information for which it seeks
confidential treatment, the submitter shall place that information in
an appendix to the request.
    (7) On ten business days notice from the Assistant Secretary, a
submitter shall submit a detailed written justification of a request
for confidential treatment, as specified in paragraph (e) of this
section. Upon request and for good cause shown, the Assistant Secretary
may grant an extension of such time. The Assistant Secretary will
notify the submitter that failure to provide timely a detailed written
justification will be deemed a waiver of the submitter's opportunity to
appeal an adverse determination.
    (8)(i) Requests for confidential treatment for any reasonably
segregable material that is not exempt from public disclosure under the
Freedom of Information Act, as implemented in Sec. 145.5, shall be
summarily rejected under Sec. 145.9(d)(9). Requests for confidential
treatment of public information contained in financial reports as
specified in Sec. 1.10 shall not be processed. A submitter has the
burden of specifying clearly and precisely the material that is the
subject of the confidential treatment request. A submitter may be able
to meet this burden in various ways, including:
    (A) Segregating material for which confidential treatment is being
sought;
    (B) Submitting two copies of the submission: a copy from which
material for which confidential treatment is being sought has been
obliterated, deleted, or clearly marked and an unmarked copy; and
    (C) Clearly describing the material within a submission for which
confidential treatment is being sought.
    (ii) A submitter shall not employ a method of specifying the
material for which confidential treatment is being sought if that
method makes it unduly difficult for the Commission to read the full
submission, including all portion claimed to be confidential, in its
entirely.
* * * * *
    (e) * * * (1) If the Assistant Secretary or his or her designee
determines that a FOIA request seeks material for which confidential
treatment has been requested pursuant to Sec. 145.9, the Assistant
Secretary or his or her designee shall require the submitter to file a
detailed written justification of the confidential request within ten
business days (unless under Sec. 145.9(d)(7) an extension of time has
been granted) of that determination

[[Page 27]]

unless, pursuant to an earlier FOIA request, a prior determination to
release or withhold the material has been made, the submitter has
already provided sufficient information to grant the request for
confidential treatment; or the material is otherwise in the public
domain.* * *
* * * * *

Appendix A to Part 145--[Amended]

    6. In Appendix A remove paragraph (b)(1) and redesignate paragraphs
(b)(2) through (b)(13) as (b)(1) through (b)(12), respectively; and in
paragraph (g) of Appendix A remove the phrase ``from the Division of
Trading and Markets, Commodity Futures Trading Commission, 300 South
Riverside Plaza, suite 1600 North, Chicago, Illinois 60606 or.''
    7. Amend Appendix B to Part 145 by revising paragraph (a)(3) to
read as follows:

Appendix B to Part 145--Schedule of Fees

    (a) * * *
    (3) The Commission uses a variety of computer systems to support
its operations and store records. Older systems of records,
particularly systems involving large numbers of records, are maintained
on a mainframe computer. More recently, systems have been developed
using small, inexpensive, shared computer systems to store records.
Systems of use in particular programmatic and administrative operations
may also store records on the workstation computers assigned to
particular staff members. For searches of records stored on the
Commission's mainframe computer, the use of computer processing time
will be charged at $456.47 for each hour, $7.61 for each minute, and
$0.1268 for each second of computer processing time indicated by the
job accounting log printed with each search. When searches require the
expertise of a computer specialist, staff time for programming and
performing searches will be charged at $32.00 per hour. For searches of
records stored on personal computers used as workstations by Commission
staff and shared access network servers, the computer processing time
is included in the search time for the staff member using that
workstation as set forth in the other paragraphs under paragraph (a) of
Appendix B.
* * * * *

PART 147--OPEN COMMISSION MEETINGS

    8. The authority for part 147 continues to read:

    Authority: Sec. 3(a), Pub. L. 94-409, 90 Stat. 1241 (5 U.S.C.
552b), sec. 101(a)(11), Pub. L. 93-463, 88 Stat. 1391 (7 U.S.C.
4a(j) (Supp. V, 1975)), unless otherwise noted.


Sec. 147.3  [Amended]

    9. In Sec. 147.3 make the following changes:
    a. Remove the introductory text of paragraph (b)(4)(i).
    b. In paragraphs (b)(4)(i)(A)(2) and (5) remove the following
phrase: ``Provided, The procedure set forth in 17 CFR 1.10(g) is
followed:''.
    c. In paragraphs (b)(4)(i)(A)(3) and (4) remove the following
phrase: ``, provided, the procedure set forth in Sec. 1.10(g) of this
chapter is followed.''
    d. In paragraph (b)(4)(i)(A)(6) remove the following phrase: ``, if
the procedure set forth in Sec. 1.10(g) of this chapter is followed.''
    e. In paragraph (b)(4)(i)(A)(8) remove the following phrase:
``provided the procedure set forth in Sec. 31.13(m) of this chapter is
followed.''

    Issued by the Commission.

    Dated: December 28, 1998.
Jean A. Webb,
Secretary of the Commission, Commodity Futures Trading Commission.
[FR Doc. 98-34732 Filed 12-31-98; 8:45 am]
BILLING CODE 6351-01-M
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