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[Federal Register: May 1, 1998 (Volume 63, Number 84)]
[Proposed Rules]
[Page 24142-24143]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01my98-29]


[[Page 24142]]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 1


Trading Hours

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commodity Futures Trading Commission ("Commission") is
proposing to amend Commission Regulation 1.41(k) to allow additional
changes in trading hours to be deemed approved by the Commission one
business day after receipt of written notice of a change in accordance
with the regulation. The Commission is publishing notice of the
proposed rulemaking and requesting public comment.

DATES: Comments on the proposed rulemaking must be made by May 18,
1998.

ADDRESSES: Comments should be mailed to Jean A. Webb, Secretary,
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21
st Street, NW, Washington, D.C. 20581; transmitted by facsimile to
(202) 418-5521; or transmitted electronically to ([email protected]).

FOR FURTHER INFORMATION CONTACT:
Lois J, Gregory, Attorney, Contract Markets, Division of Trading and
Markets, Commodity Futures Trading Commission, Three Lafayette Center,
1155 21st Street, N.W., Washington, D.C. 20581. Telephone: (202) 418-
5483.

SUPPLEMENTARY INFORMATION:
    Regulation 1.41(k) allows a change in trading hours which does not
permit trading to open before 7:00 a.m. or close after 6:00 p.m. local
time in the city where the contract market is located to be deemed
approved by the Commission at the close of business one business day
after properly labeled written notice of the change is received by the
Commission if the change is not inconsistent with the Commodity
Exchange Act or the Commission's other regulations. Trading hour
changes which do permit trading to open before 7:00 a.m. or close after
6:00 p.m. local time must be submitted to the Commission for approval
pursuant to Regulation 1.41(b).
    The Commission is proposing to amend Regulation 1.41(k) to allow
additional changes in trading hours to be deemed approved by the
Commission one business day after receipt of written notice of a change
in accordance with the subsection. Specifically, under the rule as
proposed to be amended, if a contract market had previously received
Commission approval for trading between 6:00 p.m. and 7:00 a.m. in at
least one of its designated contracts, it could submit all subsequent
changes in trading hours pursuant to regulation 1.41(k). Thus, under
1.41(k) as proposed to be revised, the first time a contract market
proposed changing trading hours for any of its designated contracts to
fall between the hours of 6:00 p.m. and 7:00 a.m., the proposal would
have to be submitted to the Commission for approval pursuant to
Regulation 1.41(b). The Commission would review such initial proposal
to ensure that adequate systems and procedures were in place to
accommodate the expanded trading hours. Matters to be addressed would
include, among other matters, clearing, margin, market date, and
surveillance programs. Any subsequent change to trading hours could
then be approved under the expedited procedures of revised Regulation
1.41(k).
    The Commission is proposing to amend Regulation 1.41(k) in the
manner described as a result of its recent efforts to modernize and
streamline its regulatory framework. Growth, technological
developments, and around-the-clock trading have altered the
marketplace. The proposed amendment to Regulation 1.41(k) is part of
the Commission's efforts to ensure that its rules have adapted to these
changes.
    With respect to electronic trading, the proposed amendments to
Regulations 1.41(k) contemplate that listing a contract for trading on
an automated trading system would constitute more than a change in
trading hours. It would also be a change in the method of trading.
Accordingly, neither the initial establishment of an electronic trading
system nor the subsequent listing of additional contracts would be
eligible for treatment under Regulation 1.41(k). However, changes in
the trading hours of a contract that was already listed on an
electronic system would be eligible for treatment under revised
Regulation 1.41(k).

Related Matters

A. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 [Pub. L. 104-13 (May 13, 1995)]
imposes certain requirements on federal agencies (including the
Commission) in connection with their conducting or sponsoring any
collection of information as defined by the Paperwork Reduction Act.
While this proposed regulation has no burden, the group of regulations
(3038-0022), of which this is a part has the following burden:

Average burden hours per response........  3,546.26
Number of Respondents....................  10,971
Frequency of response....................  On occasion.


    Copies of the OMB approved information collection package
associated with this regulation may be obtained from the Desk Officer,
CFTC, Office of Management and Budget, Room 10202, NEOB, Washington DC
20503, (202) 395-7340.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) 5 U.S.C. 601 et seq., requires
that agencies, in proposing rules, consider the impact on small
businesses. The only entity this rulemaking would affect would be
contract markets. The Commission has previously determined that
contract markets are not "small entities" for purposes of the
Regulatory Flexibility Act, (47 FR 18618 (April 30, 1982)). Therefore,
the Chairperson, on behalf of the Commission, hereby certifies,
pursuant to 5 U.S.C. 605(b), that the action taken herein would not
have a significant economic impact on a substantial number of small
entities.

List of Subjects in 17 CFR Part 1

    Brokers, Commodity futures, Consumer protection, Reporting and
recordkeeping requirements, Segregation requirements.

    In consideration of the foregoing and pursuant to the authority
contained in the Commodity Exchange Act and, in particular Section 8a
thereof, 7 U.S.C. 12a, the Commission hereby proposes to amend Part 1
of Chapter I of Title 17 of the Code of Federal Regulations as follows:

PART 1--GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT

    1. The authority for part 1 continues to read as follows:

    Authority: 7 U.S.C. 1a, 2, 2a, 4, 4a, 6, 6a, 6b, 6c, 6d, 6e, 6f,
6g, 6h, 6i, 6j, 6k, 6l, 6m, 6n, 6o, 6p, 7, 7a, 7b, 8, 9, 12, 12a,
12c, 13a, 13a-1, 16, 16a, 19, 21, 23, and 24.

    2. Section 1.41 is amended by revising paragraph (k)(1) to read as
follows:

1.41  Contract market rules; submission of rules of the Commission;
exemption of certain rules.

* * * * *
    (k) Trading hours. (1) Notwithstanding the provisions of paragraph
(b) of this section and except in connection with an initial listing of
a contract on an automated trading system, all changes in trading hours
shall be deemed approved by the Commission at the close of business one

[[Page 24143]]

business day after written notice of such a change is received by the
Commission if:
    (i) The change is not inconsistent with any provision of the Act or
the Commission's regulations;
    (ii) For a change that permits trading anytime between 6 p.m. and 7
a.m. local time in the city where the contract market is located, the
contract market has previously received Commission approval for trading
between such hours in at least one of its designated contracts; and
    (iii) The contract market labels the written notice as being
submitted pursuant to paragraph (k) of this section.
* * * * *
    Issued in Washington D.C. on April 28, 1998, by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 98-11655 Filed 4-30-98; 8:45 am]
BILLING CODE 6351-01-M
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