63102 Federal Register / Vol. 72, No. 216 / Thursday, November 8, 2007 / Rules and Regulations 

1 7 U.S.C. 1 et seq. (2000). The Act can be 

accessed at http://www.access.gpo.gov/uscode/ 

title7/chapter1_.html. 

2 7 U.S.C. 6k(1)–(3). 

3 7 U.S.C. 23. 

4 17 CFR 3.12(a). The Commission’s regulations 

can be accessed at http://www.access.gpo.gov/nara/ 

cfr/waisidx_06/17cfrv1_06.html. 

5Commission Regulation 3.31(c)(3) permits the 

filing of a Uniform Termination Notice for 

Securities Industry Registration (Form U–5) in lieu 

of a Form 8–T to report the termination of any AP 

or principal of the sponsoring intermediary. 

6 In July, 2007, NASD was succeeded by the 

Financial Industry Regulatory Authority Inc. 

7The termination notice filed for securities 

industry registration is the Form U–5. 

V–363 [Revised] 

From Mission Bay, CA; INT Mission Bay, CA, 

341° and Santa Catalina, CA, 103° radials; to 

INT Santa Catalina, CA, 103° and Mission 

Bay, CA, 327° radials; to INT Mission Bay, 

CA, 327° and El Toro, CA, 172° radials; to El 

Toro, CA; to INT El Toro, CA, 339° and 

Pomona, CA, 179° radials; to Pomona, CA. 

* * * * * 

Issued in Washington, DC, October 31, 

2007. 

Paul Gallant, 

Acting Manager, Airspace and Rules Group. 

[FR Doc. E7–21825 Filed 11–7–07; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 3 

RIN 3038–AC45 

Termination of Associated Persons 

and Principals of Futures Commission 

Merchants, Introducing Brokers, 

Commodity Trading Advisors, 

Commodity Pool Operators and 

Leverage Transaction Merchants 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final rule. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘Commission’’ or 

‘‘CFTC’’) has amended Commission 

Regulations 3.12 and 3.31 to extend the 

period during which a registered futures 

commission merchant (‘‘FCM’’), 

introducing broker (‘‘IB’’), commodity 

trading advisor (‘‘CTA’’), commodity 

pool operator (‘‘CPO’’) or leverage 

transaction merchant (‘‘LTM’’) must file 

a notice with the National Futures 

Association (‘‘NFA’’) to report the 

termination of any associated person 

(‘‘AP’’) or principal of the registered 

intermediary. The amendments modify 

existing requirements and specify that 

such intermediaries must file 

termination notices within 30 days, 

rather than 20 days, after the 

termination of the association with any 

AP or principal. 

DATES: Effective Date: January 1, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Helene D. Schroeder, Special Counsel, 

Compliance and Registration Section, 

Division of Clearing and Intermediary 

Oversight, Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581, telephone number: (202) 418–

5450; facsimile number: (202) 418–5528; 

and electronic mail: 

hschroeder@cftc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 4k of the Commodity 

Exchange Act (‘‘Act’’) 1 makes it 

unlawful for persons to be associated in 

certain specified capacities with an 

FCM, IB, CPO or CTA unless the person 

is registered as an AP thereof under the 

Act.2 Section 19 of the Act grants the 

Commission plenary authority over 

leverage transactions, and this authority 

includes the registration of APs of an 

LTM.3

Commission Regulation 3.12(a) makes 

it unlawful for any person to be 

associated with an FCM, IB, CTA, CPO 

or LTM in the capacity of an AP unless 

the person has registered under the Act 

as an AP of that sponsoring 

intermediary.4 Pursuant to Commission 

Regulation 3.12(c), application for 

registration as an AP must be on a Form 

8–R and accompanied by the applicant’s 

fingerprints, as well as a sponsor 

certification that meets the requirements 

set forth in that Regulation. 

Commission Regulations 3.12(b) and 

3.31(c)(1) provide for the termination of 

an AP’s registration. Specifically, 

Section 3.31(c)(1) requires the 

sponsoring FCM, IB, CPO, CTA or LTM 

to file a Form 8–T notice 5 with NFA 

within 20 days of either of the following 

events: (1) The person fails to become 

associated with the sponsoring FCM, IB, 

CTA, CPO or LTM; or (2) the association 

with the sponsoring firm is otherwise 

terminated. Commission Regulation 

3.31(c)(2) provides for the termination 

of any principal of an FCM, IB, CPO, 

CTA or LTM, and it also requires the 

filing of a Form 8–T within 20 days after 

the termination of the principal’s 

affiliation. 

NFA Registration Rule 214(a) likewise 

specifies that such termination notices 

must be filed within 20 days after the 

termination of the affiliation of the AP 

or principal, and it imposes a $100 fee 

upon sponsoring firms that fail to file 

termination notices on a timely basis. 

By contrast, Article V, Section 3(a) of 

the Bylaws of the National Association 

of Securities Dealers, Inc. (‘‘NASD’’) 6

specifies that members must file 

termination notices with respect to 

registered persons, including varied 

securities representatives and principals 

thereof, within 30, rather than 20, days.7

Following a review of its rules and a 

survey of its members, NFA filed a 

petition (‘‘Petition’’) with the 

Commission seeking to amend 

Regulation 3.31(c)(1) to increase the 

number of days in which a firm must 

file a termination notice from 20 to 30 

days. The Petition was based upon 

concerns raised by NFA members that 

were dually registered as FCMs or IBs 

and securities broker-dealers (‘‘BDs’’). 

The dual registrants asserted that it is an 

undue regulatory burden for them to file 

within the 20-day period for some APs, 

while for the majority of their APs, 

securities industry requirements permit 

them to file within 30 days. They 

further asserted that the 20-day period 

is difficult to comply with when a 

termination notice contains disclosure 

information that must be reviewed at 

the branch office level, by the legal and/ 

or registration departments of a firm, 

and possibly by an attorney representing 

the terminated AP. 

II. The Proposal 

In light of the Petition, the disparate 

regulatory requirements applicable to 

firms that are dual registrants, the 

burden that complying with the 20-day 

period presented, and in an effort to 

streamline regulatory requirements and 

harmonize them with the filing 

deadlines applicable to BDs, the 

Commission published in the Federal 

Register a proposal (‘‘Proposal’’) to 

extend the period of time in which a 

registered FCM, IB, CPO, CTA or LTM 

must file a termination notice in line 

with NFA’s proposal. The Proposal 

included proposed amendments to 

Regulations 3.12(b) and 3.31(c)(1) and 

(2) that would allow termination notices 

to be filed within 30, rather than 20, 

days after the association with the AP or 

principal is terminated. 

III. Comments Regarding the Proposal 

The Commission received three 

comments addressing its Proposal. The 

first comment was from a committee 

(‘‘Committee’’) of a Bar Association, the 

second comment was from an 

association of broker/dealer and 

investor advisor firms and the third 

comment was from an industry trade 

association. All three commenters 

expressed support for the Proposal and, 

in particular, applauded the 

Commission’s efforts to harmonize, 

align and ease requirements applicable 

to firms that are subject to conflicting 


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Federal Register / Vol. 72, No. 216 / Thursday, November 8, 2007 / Rules and Regulations 63103 

8 5 U.S.C. 601 et seq. 

9 47 FR 18618 (Apr. 30, 1982). 

10 47 FR 18618, 18619. 

11 5 U.S.C. 605(b). 

12 7 U.S.C. 19(a). 13 44 U.S.C. 3501 et seq. 

securities and futures regulatory 

requirements. The Committee 

additionally noted that the Proposal 

would provide additional time for the 

review of the content of termination 

notices by multiple parties, and it 

encouraged the Commission to 

promptly adopt the Proposal. 

In light of the comments received, the 

Commission has decided to adopt the 

amendments to Regulations 3.12(b) and 

3.31(a)(1) and (2) as set forth in the 

Proposal. 

IV. Related Matters 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(‘‘RFA’’) 8 requires that agencies, in 

proposing regulations, consider the 

impact of those regulations on small 

businesses. The amendments will affect 

persons that are registered as FCMs, IBs, 

CPOs, CTAs and LTMs. The 

Commission has previously established 

certain definitions of ‘‘small entities’’ to 

be used by the Commission in 

evaluating the impact of its regulations 

on such entities in accordance with the 

RFA.9 The Commission previously 

determined that registered FCMs, CPOs 

and LTMs are not small entities for the 

purpose of the RFA.10 With respect to 

the remaining persons, CTAs and IBs, 

the Commission stated in its Proposal 

that it did not believe that the proposed 

amendments to its regulations would 

place any additional burdens upon such 

persons inasmuch as these registrants 

already are subject to the requirement to 

file termination notices. The 

Commission also stated its belief that 

the proposed amendments actually 

would lessen the relevant regulatory 

burdens on CTAs and IBs inasmuch as 

they would provide these intermediaries 

with additional time in which to file 

termination notices. Accordingly, and 

based on Section 3(a) of the RFA,11 the 

Acting Chairman, on behalf of the 

Commission, certified that the proposed 

amendments would not have a 

significant economic impact on a 

substantial number of small entities. 

The Commission invited the public to 

comment regarding its analysis, and no 

commenter specifically addressed the 

small business issue. 

B. Cost-Benefit Analysis 

Section 15(a) of the Act 12 requires the 

Commission to consider the costs and 

benefits of its action before issuing a 

new regulation under the Act. By its 

terms, Section 15(a) does not require the 

Commission to quantify the costs and 

benefits of a new regulation or to 

determine whether the benefits of the 

proposed regulation outweigh its costs. 

Rather, Section 15(a) simply requires 

the Commission to ‘‘consider the costs 

and benefits’’ of its action. 

Section 15(a) further specifies that 

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 futures markets; (3) 

price discovery; (4) sound risk 

management practices; and (5) other 

public interest considerations. The 

Commission, in its discretion, may 

choose to give greater weight to any one 

of the five enumerated areas and 

determine that, notwithstanding its 

costs, a particular regulation is 

necessary or appropriate to protect the 

public interest or to effectuate any of the 

provisions or to accomplish any of the 

purposes of the Act. 

The amendments concern the filing of 

termination notices by registered 

intermediaries, in particular, FCMs, IBs, 

CPOs, CTAs and LTMs. Specifically, the 

amendments will extend the period 

during which these registered 

intermediaries must file a notice with 

NFA to report the termination of any AP 

or principal of the sponsoring 

intermediary. 

The amendments will have no effect 

on the protection of market participants 

and the public because they will not 

alter or modify the type or nature of 

information that must be filed with the 

Commission. Rather, they will provide 

registrants with additional time in 

which to file information that is already 

required to be filed and will conform 

the futures industry requirements to the 

securities industry’s time allowance for 

filing termination notices. The 

amendments will enhance the 

efficiencies experienced by 

intermediaries because they will lessen 

burdens that make it difficult for 

intermediaries to comply with the time 

allowance provided for futures firms 

filing termination notices. Further, the 

amendments will have no effect on the 

following three enumerated areas: (1) 

Competitiveness or the financial 

integrity of futures markets; (2) price 

discovery; and (3) sound risk 

management practices. The Commission 

invited public comment on its costbenefit analysis, but did not receive any 

comments addressing the issue. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(‘‘PRA’’) imposes certain obligations on 

federal agencies, including the 

Commission, in connection with their 

conducting or sponsoring any collection 

of information as defined by the PRA.13

In its Proposal, the Commission noted 

that the proposed amendments to the 

regulations would not require a new 

collection of information on the part of 

any entities subject to them. 

Specifically, the Commission stated that 

the proposed amendments would 

modify existing regulatory requirements 

by extending the period during which 

registered intermediaries are required to 

file notices with NFA to report the 

termination of APs and principals of the 

registered intermediary and that, 

therefore, the estimated burden 

associated with the collection is not 

expected to increase or decrease as a 

result. Accordingly, for purposes of the 

PRA, the Commission certified that the 

proposed amendments would not 

impact the total annual reporting or 

recordkeeping burden associated with 

the above-referenced collection of 

information, which was previously 

approved by OMB. The Commission did 

not receive any comments regarding its 

analysis relative to the PRA. 

List of Subjects in 17 CFR Part 3 

Administrative practice and 

procedure, Brokers, Commodity futures, 

Reporting and recordkeeping 

requirements. 

■ For the reasons discussed in the 

preamble, the Commission amends 17 

CFR part 3 as follows: 

PART 3—REGISTRATION 

■ 1. The authority citation for part 3 

continues to read as follows: 

Authority: 5 U.S.C. 522, 522b; 7 U.S.C. 1a, 

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

6n, 6o, 6p, 8, 9, 9a, 12, 12a, 13b, 13c, 16a, 

18, 19, 21, 23. 

■ 2. Section 3.12 is amended by revising 

paragraph (b) to read as follows: 

§ 3.12 Registration of associated persons 

of futures commission merchants, 

introducing brokers, commodity trading 

advisors, commodity pool operators and 

leverage transaction merchants. 

* * * * * 

(b) Duration of registration. A person 

registered in accordance with 

paragraphs (c), (d), (f), (i), or (j) of this 

section and whose registration has not 

been revoked will continue to be so 

registered until the revocation or 

withdrawal of the registration of each of 

the registrant’s sponsors, or until the 

cessation of the association of the 

registrant with each of his sponsors. 


rwilkins on PROD1PC63 with RULES
63104 Federal Register / Vol. 72, No. 216 / Thursday, November 8, 2007 / Rules and Regulations 

Such person will be prohibited from 

engaging in activities requiring 

registration under the Act or from 

representing himself to be a registrant 

under the Act or the representative or 

agent of any registrant during the 

pendency of any suspension of his or 

his sponsor’s registration. In accordance 

with § 3.31(c), each of the registrant’s 

sponsors must file a notice with the 

National Futures Association on Form 

8–T or on a Uniform Termination Notice 

for Securities Industry Registration 

reporting the termination of the 

association of the associated person 

within thirty days thereafter. 

* * * * * 

■ 3. Section 3.31 is amended by revising 

paragraphs (c)(1) introductory text and 

(c)(2) to read as follows: 

§ 3.31 Deficiencies, inaccuracies, and 

changes, to be reported. 

* * * * * 

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

or a Form 3–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, 

commodity trading advisor, commodity 

pool operator, introducing broker, or a 

leverage transaction merchant, that 

futures commission merchant, 

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: 

* * * * * 

(2) Each person registered as, or 

applying for registration as, a futures 

commission merchant, commodity 

trading advisor, commodity pool 

operator, introducing broker or leverage 

transaction merchant must, within 

thirty days after the termination of the 

affiliation of a principal with the 

registrant or applicant, file a notice 

thereof with the National Futures 

Association. 

* * * * * 

Issued in Washington, DC, on November 1, 

2007, by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

[FR Doc. E7–21953 Filed 11–7–07; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF THE TREASURY 

31 CFR Part 2 

Implementing Procedures for 

Mandatory Declassification Review 

and Access to Classified Information 

by Historical Researchers, Former 

Treasury Presidential and Vice 

Presidential Appointees, and Former 

Presidents and Vice Presidents 

AGENCY: Departmental Offices, Treasury. 

ACTION: Final rule. 

SUMMARY: Section 5.4 of Executive 

Order 13292 requires the Department of 

the Treasury to promulgate 

implementing regulations with respect 

to classified national security 

information and to publish such 

regulations to the extent that they affect 

members of the public. These 

regulations relate to the processing of 

mandatory declassification review 

requests by the public and providing 

access to classified information, 

consistent with the interest of the 

national security, to historical 

researchers, former Treasury 

Presidential and Vice Presidential 

appointees, and former Presidents and 

Vice Presidents. The Department of the 

Treasury is revising its implementing 

regulations relating to classified 

national security information in 31 CFR 

part 2 to address only these two matters 

relating to the public. All other Treasury 

regulations pertaining to internal 

procedures governing classified national 

security information under Executive 

Order 13292 have been transferred to 

the Treasury Security Manual. 

DATES: Effective Date: November 8, 

2007. 

FOR FURTHER INFORMATION CONTACT: 

Robert A. McMenamin, Assistant 

Director (Information Security), 

Department of the Treasury, Office of 

Security Programs, Room 3180 Annex, 

1500 Pennsylvania Avenue, NW., 

Washington, DC 20220, telephone (202) 

622–1055 (not a toll-free number). 

SUPPLEMENTARY INFORMATION: These 

regulations restate in pertinent part 

without substantive changes, existing 

processes for mandatory declassification 

review and access to classified 

information by historical researchers, 

former Treasury Presidential and Vice 

Presidential appointees, and former 

Presidents and Vice Presidents; updates 

the fee schedule for processing 

declassification review; and removes 

provisions in the current regulations 

from 31 CFR part 2 that apply to 

Treasury personnel and which have 

been transferred to the Treasury 

Security Manual. Accordingly, pursuant 

to 5 U.S.C. 553(b)(B) and (d)(3), the 

Department of the Treasury finds good 

cause that prior notice and public 

procedures with respect to this rule are 

unnecessary and contrary to the public 

interest, and that good cause exists for 

making this rule effective upon the date 

of publication in the Federal Register. 

Pursuant to Executive Order 12866, it 

has been determined that this final rule 

is not a significant regulatory action, 

and therefore a regulatory impact 

analysis is not required. Because no 

notice of proposed rulemaking is 

required, the provisions of the 

Regulatory Flexibility Act, 5 U.S.C. Ch 

6, do not apply. 

List of Subjects in 31 CFR Part 2 

Archives and records, Classified 

information, Security measures. 

■ For the reasons stated in the preamble, 

31 CFR part 2 is revised to read as 

follows: 

PART 2—NATIONAL SECURITY 

INFORMATION 

Sec. 

2.1 Processing of mandatory 

declassification review requests. 

2.2 Access to classified information by 

historical researchers, former Treasury 

Presidential and Vice Presidential 

appointees, and former Presidents and 

Vice Presidents. 

Authority: 31 U.S.C. 321, E.O. 12958, 60 

FR 19825, E.O. 13292, 68 FR 15315. 

§ 2.1 Processing of mandatory 

declassification review requests. 

(a) Except as provided by section 

3.4(b) of Executive Order 13292, Further 

Amendment to Executive Order 12958, 

as amended, Classified National 

Security Information, all information 

classified by the Department of the 

Treasury under these Orders or any 

predecessor Executive Order shall be 

subject to mandatory declassification 

review by the Department, if: 

(1) The request for a mandatory 

declassification review describes the 

document or material containing the 

information with sufficient specificity to 

enable Treasury personnel to locate it 

with a reasonable amount of effort; 

(2) The information is not exempt 

from search and review under sections 

105C, 105D, or 701 of the National 

Security Act of 1947 (50 U.S.C. 431, 432 

and 432a); and 

(3) The information has not been 

reviewed for declassification within the 

past 2 years or the information is not the 

subject of pending litigation. 

(b) Requests for classified records 

originated by the Department of the 

Treasury shall be directed to the Office 

of Security Programs, Attention: 


rwilkins on PROD1PC63 with RULES