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[Federal Register: May 29, 2002 (Volume 67, Number 103)]
[Rules and Regulations]
[Page 37322-37323]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29my02-4]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 11


Delegation of Authority to the Director of the Division of
Enforcement To Institute Subpoena Enforcement Proceedings

AGENCY: Commodity Future Trading Commission.

ACTION: Final rule.

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SUMMARY: The Commodity Futures Trading Commission (Commission or CFTC)
is amending regulations to delegate authority to the Director of the
Division of Enforcement, with the concurrence of the General Counsel or
General Counsel's delegee, to institute subpoena enforcement
proceedings in federal court to seek an order compelling the attendance
and testimony of witnesses and the production of documents pursuant to
a validly-issued Commission subpoena and to clarify that
notwithstanding the delegated authority, as he believes appropriate,
the Director may submit any proposed subpoena enforcement action for
Commission consideration and nothing in this delegation prohibits the
Commission from exercising the delegated authority. This amendment will
expedite the investigation process by enabling the staff more quickly
to compel individuals or entities to comply with Commission subpoenas
and conserve Commission resources. This action relates solely to the
Commission's organization, procedure and practice.

EFFECTIVE DATE: June 28, 2002.

FOR FURTHER INFORMATION CONTACT: Gretchen L. Lowe, Counselor to the
Director, Commodity Futures Trading Commission, 1155 21st Street, NW,
Washington, DC 2058. Telephone: (202) 418-5379.

SUPPLEMENTARY INFORMATION:

I. Rule 11.4(e)

    The CFTC today announced an amendment to its rules governing
investigations, and in particular, subpoenas. The Commission is
authorized to promulgate this rule under sections 2a(11) and 8a(5), of
the Commodity Exchange Act.\1\
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    \1\ Section 2a(11), 7 U.S.C. 4a(j), authorizes the Commission to
``promulgate such rules and regulations as it deems necessary to
govern the operating procedures and conduct of the business of the
Commission.'' Section 8a(5), 7 U.S.C. 12a(5) gives the Commission
the authority ``to make and promulgate such rules and regulations
as, in the judgment of the Commission, are reasonably necessary to
effectuate any of the provisions or to accomplish any of the
purposes of [the Act.].''
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    The amendment to Rule 11.4,\2\ adding paragraph (e), authorizes the
Director of Division of Enforcement, with the concurrence of the
General Counsel or General Counsel's delegee, to institute subpoena
enforcement proceedings in federal court to seek an order compelling
individuals or entities to comply with Commission subpoenas. This
delegation will expedite the investigation process and conserve
Commission resources by enabling the Division more expeditiously to
seek to compel compliance with Commission subpoenas in cases where the
entry of a court order is necessary. Notwithstanding this delegation of
authority, in instances where potential subpoena enforcement actions
raise any novel or complex issues, the Division may consult with the
Commission before the action is filed in federal court.
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    \2\ 17 CFR 11.4.
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    The Commission has determined that this amendment relates solely to
agency organization, procedure and practice and does not relate to a
substantive rule. Therefore, the provisions of the Administrative
Procedure Act, 5 U.S.C. 553, which generally require notice of proposed
rulemaking and opportunity for public participation, are not
applicable. The Commission further finds that there is good cause to
make this rule effective immediately upon publication in the Federal
Register because it will expedite the investigation process and
conserve Commission resources.

II. Related Matters

A. Consideration of Costs and Benefits and Antitrust Laws

    Section 15 of the Commodity Exchange Act requires the Commission to
consider the costs and benefits of its action as well as the public
interest to be protected by the antitrust laws before adopting a rule
or regulation under the Act. Because the amendments to part 140 relate
solely to agency organization, procedure and practice, they do not
directly implicate the specific areas of concern identified in Section
15. In any event, the Commission has considered the costs and benefits
of this amendment and has concluded that the rule is fully consistent
with the public interest and with the requirements and prohibitions of
the Commodity Exchange Act, as amended, 7 U.S.C. 4a(f) and (j), 12a(5)
and 13.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq.,
requires that agencies, in proposing rules in accordance with 5 U.S.C.
553, consider the impact of those rules on small businesses. The
Commission has determined that the provisions of the RFA do not apply
to the promulgation of this regulation since it relates solely agency
organization, procedure and practice.

C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (RPA), 4 U.S.C. 3501 et seq.,
which imposes certain requirements on federal agencies, including the
Commission, in connection with their conducting or sponsoring any
collection of information as defined by the RPA, does not apply to
these rules. This rule amendment does not contain information
collection requirements as defined by the RPA.

List of Subjects in 17 CFR Part 11

    Administrative practice and procedure, Commodity futures,
Investigations, Rules relating to investigations.


    In consideration of the foregoing and pursuant to the authority
contained in the Act, and in particular, Sections 2a and 8a, 7 U.S.C.
2(a) and 8a, the Commission hereby amends Part 11 of Chapter 1 of Title
17 of the Code of Federal Regulations as follows:

PART 11--RULES RELATING TO INVESTIGATIONS

    1. The authority citation for Part 11 continues to read as follows:

    Authority: 7 U.S.C. 2(a), 4a(j), 9 and 15, 12, 12a(5), 12(f).


    2. Section 11.4 is amended by adding paragraphs (e) and (f) to read
as follows:


[sect] 11.4  Subpoenas.

* * * * *
    (e) Pursuant to the authority granted under Sections 2(a)(11) and
8a(5) of the Act, the Commission hereby delegates to the Director of
the Division of Enforcement, with the concurrence of the General
Counsel or General Counsel's delegee, and until such time as the
Commission orders otherwise, the authority to invoke, in case of
contumacy by, or refusal to obey a subpoena issued to, any person, the
aid

[[Page 37323]]

of any court of the United States within the jurisdiction in which the
investigation or proceeding is conducted, or where such person resides
or transacts business, in requiring the attendance and testimony of
witnesses and the production of books, papers, correspondence,
memoranda and other records pursuant to subpoenas issued in accordance
with section 6(c) of the Act for the purpose of securing effective
enforcement of the provisions of this Act, for the purpose of any
investigation or proceeding under this Act, and for the purpose of any
action taken under section 12(f) of the Act.
    (f) Notwithstanding the delegation of authority to the Director set
forth in paragraph (e) of this section, in any case in which the
Director believes it appropriate the matter may be submitted to the
Commission for its consideration. Nothing in this section shall
prohibit the Commission from exercising the authority delegated in
paragraph (e) of this section.

    Issued in Washington, DC on May 22, 2002, by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 02-13300 Filed 5-28-02; 8:45 am]
BILLING CODE 6351-01-M
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