31642 Federal Register / Vol. 74, No. 126 / Thursday, July 2, 2009 / Proposed Rules 

1The Commission anticipates that most reporting 

entities will be designated contract markets, but 

they could be any registered entity that provides 

trade data to the Commission on a regular basis. 

2Under the CFTC’s Large Trader Record Format, 

special account numbers contain two elements: (1) 

1. Is not a ‘‘significant regulatory 

action’’ under Executive Order 12866, 

2. Is not a ‘‘significant rule’’ under the 

DOT Regulatory Policies and Procedures 

(44 FR 11034, February 26, 1979), and 

3. Will not have a significant 

economic impact, positive or negative, 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

You can find our regulatory 

evaluation and the estimated costs of 

compliance in the AD Docket. 

List of Subjects in 14 CFR Part 39 

Air transportation, Aircraft, Aviation 

safety, Safety, Incorporation by 

Reference. 

The Proposed Amendment 

Accordingly, under the authority 

delegated to me by the Administrator, 

the FAA proposes to amend 14 CFR part 

39 as follows: 

PART 39—AIRWORTHINESS 

DIRECTIVES 

1. The authority citation for part 39 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40113, 44701. 

§ 39.13 [Amended] 

2. The FAA amends § 39.13 by adding 

the following new AD: 

Boeing: Docket No. FAA–2008–0978; 

Directorate Identifier 2008–NM–014–AD. 

Comments Due Date 

(a) We must receive comments by August 

17, 2009. 

Affected ADs 

(b) None. 

Applicability 

(c) This AD applies to Boeing Model 767– 

200, –300, and –300F series airplanes, 

certificated in any category; as identified in 

Boeing Service Bulletin 767–28A0094, 

Revision 1, dated April 23, 2009. 

Note 1: This AD requires revisions to 

certain operator maintenance documents to 

include new inspections. Compliance with 

these inspections is required by 14 CFR 

91.403(c). For airplanes that have been 

previously modified, altered, or repaired in 

the areas addressed by these inspections, the 

operator may not be able to accomplish the 

inspections described in the revisions. In this 

situation, to comply with 14 CFR 91.403(c), 

the operator must request approval for an 

alternative method of compliance (AMOC) 

according to paragraph (k) of this AD. The 

request should include a description of 

changes to the required inspections that will 

ensure the continued operational safety of 

the airplane. 

Unsafe Condition 

(d) This AD results from fuel system 

reviews conducted by the manufacturer. We 

are issuing this AD to prevent the center tank 

fuel densitometer from overheating and 

becoming a potential ignition source inside 

the center fuel tank, which, in combination 

with flammable fuel vapors, could result in 

a center fuel tank explosion and consequent 

loss of the airplane. 

Compliance 

(e) Comply with this AD within the 

compliance times specified, unless already 

done. 

Modify the Fuel Quantity Indicating System 

(FQIS) Densitometer/Replace Hot Short 

Protector (HSP) 

(f) Within 60 months after the effective 

date of this AD, do the actions specified in 

paragraphs (f)(1) and (f)(2) of this AD, as 

applicable, in accordance with the 

Accomplishment Instructions of Boeing 

Service Bulletin 767–28A0094, Revision 1, 

dated April 23, 2009. 

(1) For Group 1 airplanes, Group 2 

airplanes, Configuration 1, and Group 3 

airplanes: Modify the fuel quantity indicating 

system (FQIS) densitometer. 

(2) For Group 4 airplanes: Replace the 

existing HSP with a new HSP. 

Credit for Service Information 

Accomplished Previously 

(g) Actions done before the effective date 

of this AD in accordance with Boeing Alert 

Service Bulletin 767–28A0094, dated 

November 20, 2007; are acceptable for 

compliance with the requirements of 

paragraph (f) of this AD. 

Airworthiness Limitations (AWL) Revision 

(h) Concurrently with accomplishing the 

actions required by paragraph (f) of this AD, 

revise the AWL section of the Instructions for 

Continued Airworthiness by incorporating 

AWL No. 28–AWL–22 of the Boeing 767 

Maintenance Planning Data (MPD) 

Document, D622T001–9, Section 9, Revision 

March 2009. 

No Alternative Critical Design Configuration 

Control Limitations (CDCCL) 

(i) After the actions specified in paragraph 

(g) of this AD have been accomplished, no 

alternative CDCCL for AWL No. 28–AWL–22 

may be used; unless the CDCCL is approved 

as an AMOC in accordance with the 

procedures specified in paragraph (k) of this 

AD. 

Terminating Action for AWL Revision 

(j) Incorporating AWL No. 28–AWL–22 

into the AWL section of the Instructions for 

Continued Airworthiness in accordance with 

paragraph (g)(2) of AD 2008–11–01, 

amendment 39–15523, terminates the action 

required by paragraph (h) of this AD. 

Alternative Methods of Compliance 

(AMOCs) 

(k)(1) The Manager, Seattle ACO, FAA, has 

the authority to approve AMOCs for this AD, 

if requested using the procedures found in 14 

CFR 39.19. Send information to ATTN: 

Georgios Roussos, Aerospace Engineer, 

Systems and Equipment Branch, ANM–130S, 

1601 Lind Avenue, SW., Renton, Washington 

98057–3356; telephone (425) 917–6482; fax 

(425) 917–6590. Or, e-mail information to 9- 

ANM-Seattle-ACO-AMOC–Requests@faa.gov. 

(2) To request a different method of 

compliance or a different compliance time 

for this AD, follow the procedures in 14 CFR 

39.19. Before using any approved AMOC on 

any airplane to which the AMOC applies, 

notify your principal maintenance inspector 

(PMI) or principal avionics inspector (PAI), 

as appropriate, or lacking a principal 

inspector, your local Flight Standards District 

Office. The AMOC approval letter must 

specifically reference this AD. 

Issued in Renton, Washington, on June 24, 

2009. 

Ali Bahrami, 

Manager, Transport Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. E9–15618 Filed 7–1–09; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 16 

RIN 3038–AC63 

Account Ownership and Control 

Report 

AGENCY: Commodity Futures Trading 

Commission (‘‘Commission’’). 

ACTION: Advanced notice of proposed 

rulemaking (‘‘Advanced Notice’’) and 

request for public comment. 

SUMMARY: The Commission has 

determined to collect certain ownership, 

control, and related information for all 

trading accounts active on U.S. futures 

exchanges. The information collected 

will enhance market transparency, 

leverage the Commission’s existing 

surveillance systems, and foster 

synergies between its market 

surveillance, trade practice, 

enforcement, and economic research 

programs. The Commission will collect 

relevant data via an account 

‘‘Ownership and Control Report’’ 

(‘‘OCR’’) submitted periodically by all 

reporting entities.1 Tentatively, the OCR 

will include a trading account number; 

the names and addresses of the 

account’s owners and controllers; the 

last four digits of the owners’ and 

controllers’ social security or tax ID 

numbers; the special account number, if 

one has been assigned; an indication of 

whether the account is a reportable 

account pursuant to large trader 

thresholds set forth under Part 18 of the 

Commission’s regulations; and other 

relevant information.2 This Advanced 

Federal Register / Vol. 74, No. 126 / Thursday, July 2, 2009 / Proposed Rules 31643 

A reporting firm ID and (2) a unique account 

number assigned by the reporting firm. Special 

accounts numbers are discussed more fully in 

Section III(C), below. 

3 Derived from volume data for what is today 

CBOT, CME, NYMEX, and ICE Futures U.S. These 

exchanges collectively account for 99% of the 

futures and options on futures trading volume on 

regulated exchanges in the U.S. 

4 ‘‘Trade register’’ is a generic term for a 

comprehensive, daily record of every trade 

facilitated by an exchange, whether executed via 

open-outcry, electronically, or non-competitively. 

Trade registers contain detailed information with 

respect to the terms of a trade, the parties involved, 

and other data points. They also contain trading 

account numbers, but no information with respect 

to the owners or controllers of those accounts. In 

addition, the trading account numbers in exchange 

trade registers often do not correspond to account 

numbers reported in other Commission data 

systems, including its large trader reporting system. 

The Commission has recently standardized the 

content and format of all trade registers submitted 

to it, which are now required to be FIXML Trade 

Capture Reports. FIXML and the Trade Capture 

Report are discussed in Section I (B), below. 

5Efficient integration of large trader and trade 

register data will be one of the most important 

regulatory benefits deriving from the OCR. At 

present, the Commission can sometimes link the 

two data sets on a case-by-case basis, but the 

process is extremely labor-intensive, requires 

assistance from exchange clearing members and 

others, and does not lend itself to more routine, 

automated surveillance and follow-up investigation. 

See Section III (C), below. 

6The Commission notes that it continues to 

conduct on-site surveillance of exchange’s 

remaining trading floors. 

7While accounts and persons executing trades are 

uniquely designated in the trade data, those 

designations do not reveal the actual identities of 

traders or of account owners or controllers, nor do 

they reveal relationships between trading accounts. 

Gathering such information requires a time 

consuming manual effort by Commission staff with 

the aid of exchanges, exchange clearing members, 

and others. Exchange compliance departments must 

engage in their own time consuming efforts when 

they require information with respect to trading 

account owners, controllers, and relationships for 

self-regulatory purposes. 

Notice seeks public comment on that 

tentative content, as well as on other 

features of the OCR’s planned design. 

Public comments collected in response 

to this Advanced Notice will be used in 

developing a proposed rule at a later 

date. 

DATES: Comments must be received on 

or before August 17, 2009. 

ADDRESSES: Comments should be sent to 

David Stawick, Secretary, Commodity 

Futures Trading Commission, Three 

Lafayette Centre, 1155 21st Street, NW., 

Washington, DC 20581. Comments may 

be submitted via e-mail at 

secretary@cftc.gov. ‘‘Account 

Ownership and Control Report’’ must be 

in the subject field of responses 

submitted via e-mail, and clearly 

indicated on written submissions. 

Comments may also be submitted at 

http://www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Sebastian Pujol Schott, Special Counsel, 

202–418–5641, or Cody J. Alvarez, 

Attorney Advisor, 202–418–5404, 

Division of Market Oversight, 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. The Ownership and Control Report 

Will Enhance Regulatory Oversight in 

an Electronic Trading Environment 

Since the late 1990s, U.S. designated 

contract markets (‘‘DCMs’’) have rapidly 

evolved from open-outcry trading pits to 

global electronic platforms. In 1999, 

electronic trading accounted for only 

5% of volume on all U.S. exchanges. By 

2008, it was responsible for some 80% 

of volume.3 In addition, every new 

exchange designated since the year 2000 

has offered only electronic trading, and 

many contracts that were once offered 

in open-outcry are now available only 

electronically. While open-outcry 

trading remains important in specific 

contexts, including options on futures, 

electronic platforms are now dominant 

in the United States. 

The ascendancy of electronic trading 

has revolutionized the business of 

futures, and the Commission has 

worked diligently to keep pace in every 

respect. The Commission, and its 

Division of Market Oversight (‘‘DMO’’), 

have been especially vigilant in the area 

of regulatory data and technology. 

Under all circumstances, Commission 

staff must have the information 

necessary to conduct effective oversight, 

ensure market integrity, and protect 

customers from fraud and abuse. The 

Commission has invested heavily to 

modernize its regulatory systems, and is 

equally committed to obtaining the raw 

data necessary for effective surveillance 

of futures markets. 

In many cases, the Commission 

already receives the information it 

requires for effective regulation, 

including large trader reports for market 

surveillance and exchange trade 

registers for trade practice surveillance.4

The OCR will integrate these existing 

resources, and leverage them in 

dynamic new ways. It will facilitate 

innovative trade practice and market 

surveillance by DMO; bridge the gap 

between individual transactions 

reported on exchange trade registers and 

aggregate positions reported in large 

trader data; and allow other 

Commission Offices and Divisions to 

better utilize regulatory data in support 

of their own missions.5 Each of these 

benefits is discussed more fully in 

Section III of this Advanced Notice. In 

addition, as explained immediately 

below, the OCR will increase market 

transparency and respond to new 

regulatory data needs in an era of 

electronic trading. 

For both the Commission and 

exchange compliance staffs, electronic 

trading has conferred a host of 

informational advantages, including 

more detailed and accurate order 

histories, trade records, and audit trails. 

Paradoxically, it has also challenged 

regulatory programs through the 

growing dispersion and anonymity of 

market participants. The Commission 

once monitored trading on regulated 

exchanges via on-site surveillance of 

open-outcry pits. Today, that 

surveillance is primarily electronic and 

data-driven. Indeed, as exchange trading 

has shifted to electronic platforms, trade 

data has become the device by which 

the Commission ‘‘sees’’ its regulated 

markets.6 Together with trade registers 

and large trader reports, the OCR will 

allow the Commission to see more 

clearly and completely by identifying 

otherwise anonymous market 

participants and revealing links between 

apparently unrelated trading accounts 

whose aggregate behavior is of 

regulatory consequence. 

The detail and depth of the regulatory 

data available to the Commission is 

substantial, but insufficient to substitute 

for the unique information once 

imparted by a physical presence on 

exchanges’ trading floors. Member 

brokers and locals, once clustered in 

compact rings and readily identifiable to 

Commission staff, have given way to 

large, widely dispersed pools of opaque 

persons trading on electronic platforms. 

While case-by-case manual inquiry is 

possible, the Commission has no way to 

identify traders and trading accounts 

quickly and independently. To the 

contrary, what is now visible to the 

Commission—trade data—instead 

reflects unknown individuals directing 

trades on behalf of unnamed accounts. 

The result is a growing lack of 

transparency from which even exchange 

compliance departments sometimes 

suffer.7 The OCR project seeks to redress 

this imbalance of information, and to 

realign the Commission’s data resources 

with its modern regulatory needs. 

Moreover, OCR data will also enhance 

exchanges’ internal regulatory efforts. 

B. The Commission’s Surveillance 

Systems and the Trade Capture Report 

The Commission’s surveillance 

programs include daily collection of 

trade data from all U.S. DCMs or their 

31644 Federal Register / Vol. 74, No. 126 / Thursday, July 2, 2009 / Proposed Rules 

8At present, there are 14 DCMs with listed 

contracts. 

9The Joint Compliance Committee (‘‘JCC’’) is an 

information sharing organization whose members 

include compliance officials from all U.S. DCMs. 

Commission staff representing DMO’s Market 

Compliance Section also participates in JCC 

meetings. In May of 2007, at the Commission’s 

request, the JCC created the Trade Surveillance Data 

Subcommittee (‘‘TSDS’’) to improve the manner in 

which trade data was submitted to the Commission. 

The TSDS determined to pursue the Trade Capture 

Report. 

10As noted above, the Commission already 

receives trade registers from all DCMs, and has 

developed a new trade register format called the 

Trade Capture Report. DCMs are currently 

transitioning to the Trade Capture Report, a process 

which the Commission expects to be completed by 

the end of 2009. 

11E.g., block trades. 

regulatory service providers.8 The data 

collected is central to the Commission’s 

trade practice surveillance program, and 

of growing importance to market 

surveillance and other regulatory efforts, 

as explained below. Presently, market 

and trade practice surveillance utilize 

distinct platforms—the Integrated 

Surveillance System (‘‘ISS’’) for market 

surveillance and the Trade Surveillance 

System (‘‘TSS’’) for trade practice 

surveillance. Broadly speaking, ISS 

facilitates the storage, analysis, and 

mining of large trader data while TSS 

does the same for trade data. The 

systems include a range of tools for 

automated surveillance, pattern 

detection, ad hoc examination of raw 

data, and investigation. One valuable 

benefit of the OCR is that it will 

effectively integrate these two primary 

systems by linking individual 

transactions reported on exchange trade 

registers (TSS) with aggregate positions 

reported in large trader data (ISS). TSS 

and ISS are described more fully in 

Section III, below. 

While ISS is a long-standing system, 

TSS and the data streams that support 

it are newer. The Commission has 

invested significant resources to 

develop TSS, adopting a comprehensive 

new platform better suited for 

monitoring electronic trading than 

TSS’s predecessor. One important 

component of TSS is the Trade Capture 

Report, a new data standard governing 

the trade registers submitted daily to the 

Commission by all DCMs. The Trade 

Capture Report was developed through 

a collaborative effort between the 

Commission, DCMs, and others, under 

the auspices of the Joint Compliance 

Committee.9 Design of the Trade 

Capture Report was formally completed 

in August of 2008. 

Briefly stated, the Trade Capture 

Report is an electronic file that employs 

the Financial Information eXchange 

Markup Language (‘‘FIXML’’) to 

uniformly tag or designate trade 

information provided to the 

Commission. Exchanges transmit their 

Trade Capture Reports daily via Secure 

File Transfer Protocol (‘‘SFTP’’). All 

information received is processed 

overnight by TSS and available to 

Commission staff early the following 

morning.10 Trade Capture Reports 

contain trade and related order data for 

every matched trade facilitated by an 

exchange, whether executed via openoutcry, electronically, or noncompetitively.11 Among the data 

included in the Trade Capture Report 

are trade date, product, contract month, 

trade time, price, quantity, trade type 

(e.g., open outcry outright future, 

electronic outright option, give-up, 

spread, block, etc.), executing broker, 

clearing member, opposite broker and 

clearing member, customer type 

indicator, trading account numbers, and 

numerous other data points. Additional 

information is also required for options 

on futures, including put/call indicators 

and strike price, as well as for give-ups, 

spreads, and other special trade types. 

Noticeably absent from Trade Capture 

Report data, however, is any account 

ownership or control information. 

The Trade Capture Report is central to 

the OCR project. As noted above, the 

Trade Capture Report provides the 

trading account numbers for both sides 

of a reported trade; the OCR, in turn, 

will provide biographical data for those 

account numbers. The elements of an 

OCR are set forth below. 

II. Ownership and Control Report 

Outline 

The OCR will serve as an ownership, 

control, and relationship directory for 

every trading account number reported 

to the Commission through exchanges’ 

Trade Capture Reports. The data points 

contemplated for the OCR have been 

specifically selected to achieve four 

Commission objectives. These include: 

(1) Identifying with certainty all 

accounts that are under common 

ownership or control at a single 

exchange; (2) identifying with certainty 

all accounts that are under common 

ownership or control at multiple 

exchanges; (3) identifying all trading 

accounts whose owners or controllers 

are also included in the Commission’s 

large trader reporting program 

(including Forms 40 and 102); and (4) 

identifying the entities to which the 

Commission should have recourse if 

additional information is required, 

including the trading account’s 

executing firm and clearing firm, and 

the name(s) of the firm(s) providing 

OCR information for the trading 

account. 

A. Specific Data Points Required by the 

Ownership and Control Report 

To ensure that the objectives outlined 

above are achieved, the Commission 

believes the OCR should include the 

following information: 

—The trading account number, as 

reported in the Trade Capture Report 

(see TCR tags 448 and 452, Party Role 

24); 

—Name and address of the trading 

account’s owner(s); 

—Date on which the trading account 

was assigned to its current owner(s); 

—Name and address of the trading 

account’s controller(s); 

—Date on which the trading account 

was assigned to its current 

controller(s); 

—The account controller or controllers’ 

Commodity Trading Advisor 

number(s), if applicable; 

—Special account number, if one has 

been assigned; 

—Indication of whether the trading 

account is a reportable account; 

—Indication of whether the trading 

account is a firm omnibus account, 

and if so, the name of the firm; 

—Name of the executing firm for the 

trading account, and its unique 

identifier as reported in the TCR (see 

TCR tags 448 and 452, Party Role 1); 

—Name of the clearing firm for the 

trading account, and its unique 

identifier as reported in the TCR (see 

TCR tags 448 and 452, Party Role 4); 

—The last four digits of the Social 

Security number or taxpayer 

identification number of the trading 

account’s owner(s) and controller(s); 

—Name of the firm(s) providing OCR 

information for the trading account; 

—Name of the exchange or other entity 

submitting the OCR to the 

Commission; 

—OCR transmission date. 

B. Form, Manner, and Frequency of the 

Ownership and Control Report 

The Commission anticipates that 

exchanges (and possibly other registered 

entities) will submit their OCRs weekly, 

in FIXML via SFTP. Each exchange’s 

first OCR submission will constitute a 

‘‘master file’’ containing the required 

data for all trading account numbers 

present in the Trade Capture Report 

during the previous 30 days. The master 

file will establish a baseline directory. 

Each subsequent OCR should be a 

weekly ‘‘change file’’ reporting only 

additions, deletions, or amendments to 

the master file; if the reported change 

includes changes to an account’s owners 

or controllers, the precise date of such 

Federal Register / Vol. 74, No. 126 / Thursday, July 2, 2009 / Proposed Rules 31645 

12Reporting firms include exchange clearing 

members, futures commission merchants, and 

foreign brokers. 

change should also be reported. The 

Commission understands that 

exchanges may not possess all of the 

information contemplated for the OCR, 

and that they may have to collect it from 

outside sources. 

III. Additional Benefits Derived From 

the Ownership and Control Report 

The OCR will facilitate important 

regulatory objectives in the areas of 

market transparency; trade practice and 

market surveillance; and enhanced 

enforcement and research programs. 

Many of the OCR’s systemic benefits 

have already been outlined above. It 

will allow the Commission to see its 

regulated markets more clearly and 

completely than before, and help it 

adjust to new regulatory data needs 

given that electronic platforms have 

become the dominant venue for 

regulated futures trading in the United 

States. It will also enhance the 

Commission’s surveillance 

capabilities—for example, by allowing 

staff to aggregate trading accounts under 

common ownership or control; 

facilitating links between reporting 

firms’ large trader reports and 

exchanges’ trade registers; and 

improving the Commission’s detection 

and deterrence capabilities with respect 

to specific trading practices and market 

abuses.12 Similarly, the OCR will 

introduce new efficiencies in 

surveillance and enforcement programs 

by automating what are currently slow, 

labor-intensive practices. The OCR will 

also allow the Commission to 

compensate for the loss of exchange 

trading floors and the information 

imparted by daily physical surveillance 

of a small, concentrated, and wellknown universe of exchange members. 

Furthermore, it will allow the 

Commission to maximize the benefits of 

more detailed and accurate electronic 

trading records, and to better oversee 

trading by widely dispersed individuals 

and accounts whose identities and 

relationships otherwise cannot be 

ascertained quickly and efficiently by 

Commission staff. 

In addition to broad, Commissionwide benefits, the OCR will facilitate 

specific programs administered by the 

Commission’s Division of Enforcement 

(‘‘DOE’’), Office of the Chief Economist 

(‘‘OCE’’), and DMO. Specific examples 

from each Office and Division are 

provided below. 

A. The Division of Enforcement 

DOE investigates and prosecutes 

alleged violations of the Commodity 

Exchange Act (‘‘Act’’) and Commission 

regulations. It can act against any 

number of persons and entities 

suspected of such violations, including 

individuals and firms registered with 

the Commission, those who are engaged 

in commodity futures and option 

trading on designated domestic 

exchanges, and those who improperly 

market futures and options contracts. 

DOE proceedings typically begin with 

careful investigations based on leads 

developed internally or information 

referred by other Commission divisions, 

industry self-regulatory associations; 

state, federal, and international 

authorities; and members of the public. 

At the conclusion of any investigation, 

DOE may recommend that the 

Commission initiate administrative 

proceedings or take action in Federal 

court. When DOE obtains evidence that 

criminal violations of the Act have 

occurred, it may refer the matter to the 

Department of Justice for prosecution. 

The OCR will be of immediate help to 

DOE’s investigatory work, especially 

work that relies on aggregating related 

trading accounts. DOE investigations in 

the areas of intra-day manipulation and 

trade practice rely on exchange trade 

registers/Trade Capture Reports. At 

present, however, the inherent absence 

of ownership and control information in 

Trade Capture Report data presents an 

obstacle when DOE is investigating 

potential price manipulations or trade 

practice abuses, such as front-running. 

As noted previously, the Trade Capture 

Report does not identify account owners 

or controllers, nor does it aggregate 

accounts under common ownership or 

control. Thus, any DOE investigations 

that are dependent on such information 

face special obstacles. DOE staff must 

first identify the universe of accounts 

traded in a relevant period, then request 

and await information from outside the 

Commission to identify the entity 

associated with the account number, 

and finally aggregate all identified 

entities that relate to a common owner. 

Only then can staff assess a particular 

owner’s trading activity. This timeconsuming process must be re-created 

every time DOE initiates an intra-day 

trading manipulation investigation. The 

Commission believes the information 

contained in the OCR will significantly 

reduce the time and resources expended 

in determining the identities and 

relationships between account holders, 

and thus facilitate DOE investigative 

activity across markets and exchanges. 

B. The Office of the Chief Economist 

OCE conducts research on major 

policy issues facing the Commission 

and assesses the economic impact of 

regulatory changes on the futures 

markets. It also participates in the 

development of Commission 

rulemakings, provides expert advice to 

other Commission offices and divisions, 

and conducts special studies and 

evaluations as required. An important 

objective of OCE is to help the 

Commission achieve deeper and more 

sophisticated knowledge of the futures 

markets from the data available to it. 

The OCR will advance this objective in 

significant ways. 

OCE is particularly interested in the 

OCR as a tool for enhancing the 

transparency of regulated markets 

through the disclosure of information on 

related accounts. It has a number of 

initiatives under way designed to 

enhance the Commission’s surveillance 

capabilities, assist in enforcement, and 

improve data integrity. Related account 

information derived from the OCR will 

help OCE to better link traders’ intraday 

transactions with their end-of-day 

positions. It will also help OCE to 

calculate how different categories of 

traders contribute to market wide openinterest. Building on these results, OCE 

will achieve more sophisticated benefits 

for the Commission, including new 

avenues of surveillance and 

enforcement tools. For example, armed 

with OCR/Trade Capture Report-derived 

data, OCE will eventually be able to 

accurately identify and categorize 

market participants based on their 

actual trading behavior on a contract-bycontract basis, rather than on how they 

self-report to the Commission (e.g. 

registration type, marketing/ 

merchandising activity, etc. on 

Commission Form 40). 

In addition to these specific projects, 

ownership and control information 

available via the OCR will allow OCE to 

perform more complete and accurate 

studies and provide more targeted 

guidance to other Commission staff in 

pursuing trade practice violations and 

attempted manipulations. 

C. The Division of Market Oversight 

DMO’s primary responsibility is to 

ensure that U.S. futures markets 

accurately reflect the underlying forces 

of supply and demand for all products 

traded, and that futures markets are free 

from fraud and abuse. DMO monitors all 

futures and option markets to detect and 

prevent price manipulation, abusive 

trading practices, and customer harm. It 

is concerned with both aggregate abuses 

against the market (market surveillance) 

31646 Federal Register / Vol. 74, No. 126 / Thursday, July 2, 2009 / Proposed Rules 

and individual trading violations (trade 

practice surveillance); often, the two are 

connected. DMO’s surveillance efforts 

include routine monitoring of markets 

and trades, and detailed, data-driven 

investigations of both when appropriate. 

DMO’s market surveillance and trade 

practice surveillance programs rely on 

ISS and TSS, respectively, as their 

primary technology platforms. ISS tools 

and data serve to detect and prevent 

price manipulation and market 

congestion on regulated exchanges, and 

to enforce speculative position limits 

pursuant to section 4g of the Act. ISS 

receives data from reporting firms via 

large trader reports filed daily with the 

Commission. Large trader reports show 

open end-of-day positions in futures 

and options that are at or above specific 

reporting levels set by the Commission 

(‘‘large traders’’). Related accounts are 

aggregated by reporting firms and given 

a ‘‘special account number’’ which 

DMO uses to track their consolidated 

end of day positions. Through ISS, DMO 

can account for 70 to 90% of the total 

open interest in a given market. 

ISS’ strength lies in capturing marketwide open interest and the large traders 

most responsible for that open interest. 

At the same time, ISS is limited by its 

inability to reconstruct trading and 

determine how large traders established 

their reportable positions. ISS, whose 

data includes large traders’ names but 

not their trading account numbers, 

cannot communicate with TSS, whose 

data includes trading account numbers, 

but no names. This simple disconnect 

prevents the efficient integration of 

market and trade practice surveillance 

by DMO. The Commission is 

determined to link TSS trading account 

numbers with ISS large trader names 

though the OCR. 

As previously explained, DMO’s trade 

practice surveillance program relies on 

TSS as its primary technology platform. 

Armed with trade register/Trade 

Capture Report data, TSS aids in the 

detection, analysis, and investigation of 

numerous abusive trading practices, 

including trading ahead of customer 

orders, wash trading, pre-arranged 

trading, money-passing, and other 

violations. TSS and trade register/Trade 

Capture Report data also aid in the 

detection of market abuses, such as 

banging the close, and in enforcement 

and research programs led by other 

Commission offices and Divisions. 

Like ISS, TSS possesses both 

strengths and limitations arising from its 

raw data resources. TSS’ power lies in 

its totality of information: it is a detailed 

record of every trade executed on every 

U.S. futures exchange every day. It is a 

robust instrument for customer 

protection, direct monitoring of markets 

by DMO, and oversight of exchange selfregulation. In this era of electronic 

trading, TSS is an unparalleled means of 

‘‘seeing’’ regulated markets directly and 

without filter. TSS’ limitations, 

however, are equally data-driven. TSS is 

unable to quickly aggregate related 

trading accounts because its Trade 

Capture Report data feeds do not 

contain the necessary ownership and 

control information. DMO cannot 

efficiently police for small and medium 

sized traders whose open interest does 

not reach reportable levels, but who can 

still have deleterious effects on the 

markets during concentrated periods of 

intra-day trading. Similarly, trade 

practice violations whose discovery 

might depend on recognizing concerted 

action by related accounts are more 

difficult to detect. The Commission can 

resolve each of these limitations via the 

OCR. 

While DMO’s current data resources 

are substantial, the OCR will elevate 

them to a level of sophistication and 

completeness that is appropriate for the 

size and complexity of modern futures 

markets. Integrated data—large trader 

reports in ISS, trade data in TSS, and 

OCR ownership and control information 

to bind them together—will complete 

the information chain for the 

Commission’s entire surveillance 

infrastructure. For the first time, DMO 

will be empowered to monitor the 

totality of a market in an efficient, 

integrated, and automated manner. No 

more than 24 hours after trades are 

executed and positions are established, 

DMO will see everything from large 

reportable positions to the individual 

trades responsible for those positions, 

and down further to the individual 

account owners and controllers 

responsible for those trades. Similarly, 

DMO will be empowered to monitor 

markets from the bottom up, linking 

individual accounts under common 

ownership and control, aggregating their 

intra-day trading, and viewing their 

end-of-day positions even when they do 

not reach reporting thresholds. 

Equipped with the OCR and its 

resulting synergies, all futures 

transactions will be fully transparent to 

DMO. DMO staff will have the ability to 

perform more timely analyses of trading 

activity in order to detect price 

distortions, manipulative conduct, trade 

practice abuses, and customer harm on 

individual markets and across markets 

and exchanges. 

D. Exchange Compliance Departments 

While this Advanced Notice has 

focused primarily on the OCR’s benefit 

to the Commission, OCR data may also 

be useful to exchange compliance 

departments and other regulatory 

entities in the futures industry. Many of 

the information challenges faced by the 

Commission are shared by other 

industry regulatory bodies who are 

themselves striving for maximum 

market transparency and effective 

regulation. Indeed, at least one major 

exchange already works with an 

information file that seeks to 

accomplish some of the same goals as 

the OCR. The exchange uses a ‘‘related 

accounts file’’ to aggregate certain 

trading accounts that are under common 

control, if those trading accounts are 

associated with a reportable account. 

The information collected thus acts as a 

reference file and supplement to the 

exchange’s large trader reporting 

system. The exchange’s related accounts 

file does not necessarily collect the 

same information as the Commission’s 

contemplated OCR. However, the 

Commission believes that all exchanges 

can benefit from the OCR, and from the 

complete data set proposed in this 

Advanced Notice. 

IV. Request for Comments 

The Commission invites public 

comment on any relevant aspect of the 

OCR contemplated in this Advanced 

Notice. In addition, to help the 

Commission formulate an effective and 

practical rule implementing the OCR, 

the Commission encourages responses 

to the following specific questions: 

1. Is there additional information, not 

included in Section II(A), that should be 

included in the OCR? 

2. What is the lifecycle of the 

information required by the OCR? Who 

possesses it at a root level? From what 

types of entities will exchanges draw 

the information required by the OCR 

(e.g. exchange clearing members, nonmember futures commission merchants, 

etc.)? How will exchanges obtain OCR 

information? 

3. Will OCR information be more 

difficult to acquire for some account 

types than for others? If so, what types 

of accounts will present a greater 

challenge and why? How can the 

challenge be overcome? 

4. The Commission expects that 

initially the OCR will be submitted in 

FIXML via FTP. Is there a better way to 

electronically transmit the OCR? Is there 

an existing FIXML report that may be 

used to transmit OCR information? If 

not, is there an existing FIXML report 

that can be easily modified to supply 

the information contained in the OCR? 

5. The Commission anticipates that 

each exchange will initially transmit a 

‘‘master file’’ containing the required 

information for every trading account 

Federal Register / Vol. 74, No. 126 / Thursday, July 2, 2009 / Proposed Rules 31647 

number included in the Trade Capture 

Report during the previous month or 

longer. The master file will effectively 

establish a baseline of account 

information. Subsequently, each 

exchange would be required to file a 

weekly ‘‘change file’’ reporting only 

changes that occurred during the week 

(e.g., new accounts, deleted accounts, or 

changes to accounts already in the 

master file). Is there a more convenient 

way to provide the required information 

on a regular basis? Do changes occur so 

frequently that a change file should be 

submitted daily instead of weekly? 

6. What entities will have to report 

raw data to exchanges so that exchanges 

can compile the information required by 

the OCR? Since these entities will 

already be in possession of OCR 

information, what additional measures 

will they have to take to transmit it to 

exchanges or prepare it for 

transmission? What will be the dollar 

and staff-hour cost of those measures? 

To the extent possible, please itemize 

costs related to initial implementation 

as well as regular reporting costs. 

7. How long will it take exchanges to 

assemble the necessary information and 

transmit the first OCR to the 

Commission? What will be the dollar 

and staff-hour costs associated with 

providing the OCR? To the extent 

possible, please itemize costs related to 

initial implementation as well as regular 

reporting. 

8. Will the OCR impose any disparate 

impact on small businesses? If so, how 

can it be minimized? Please describe 

and estimate the number of small 

entities that will be impacted. 

V. Conclusion 

The Commission invites comment on 

this Advanced Notice and the specific 

questions presented above. The 

comments and answers received will be 

used in developing a proposed rule with 

respect to the OCR at a later date. 

Issued in Washington, DC, on June 26, 

2009 by the Commission. 

David Stawick, 

Secretary of the Commission. 

[FR Doc. E9–15665 Filed 7–1–09; 8:45 am] 

BILLING CODE P 

SUSQUEHANNA RIVER BASIN 

COMMISSION 

18 CFR Parts 806 and 808 

Review and Approval of Projects 

AGENCY: Susquehanna River Basin 

Commission (SRBC). 

ACTION: Notice of proposed rulemaking 

and public hearing. 

SUMMARY: This document contains 

proposed rules that would amend 

project review regulations to include 

provisions specifically requiring 

Commission approval of projects 

undergoing Federal Energy Regulatory 

Commission (FERC) and Nuclear 

Regulatory Commission (NRC) licensing 

actions that affect the basin’s water 

resources; restricting the use of docket 

reopening petitions to avoid abuses of 

process; amending the ‘‘Approval by 

Rule’’ (ABR) process to standardize ABR 

notice procedures and allow for project 

sponsors to utilize approved water 

sources at approved drilling pad sites 

without the need for modification of the 

ABR; clarifying that the public hearing 

requirement for rulemaking shall be 

applicable to the proposed rulemaking 

stage of that process; and further 

providing for the time period within 

which administrative appeals must be 

filed. 

DATES: Comments on these proposed 

rules may be submitted to the SRBC on 

or before August 15, 2009. The 

Commission has scheduled two public 

hearings on the proposed rules, to be 

held August 4, 2009, in Harrisburg, 

Pennsylvania, and August 5, 2009, in 

Elmira, New York. The locations of the 

public hearings are listed in the 

addresses section of this document. 

Additionally, individuals wishing to 

testify are asked to notify the 

Commission in advance, if possible, at 

the regular or electronic addresses given 

below. 

ADDRESSES: Comments may be mailed 

to: Mr. Richard A. Cairo, Susquehanna 

River Basin Commission, 1721 N. Front 

Street, Harrisburg, PA 17102–2391, or 

by e-mail to rcairo@srbc.net. 

The public hearings will be held on 

Tuesday, August 4, 2009, at 10 a.m., at 

the Rachel Carson State Office Building, 

400 Market Street, Harrisburg, PA 

17101, and Wednesday, August 5, 2009, 

at 7 p.m., at the Holiday Inn—Elmira 

Riverview, 760 E. Water Street, Elmira, 

New York 14901. Those wishing to 

testify are asked to notify the 

Commission in advance, if possible, at 

the regular or electronic addresses given 

below. 

FOR FURTHER INFORMATION CONTACT: 

Richard A. Cairo, General Counsel, 

telephone: 717–238–0423, ext. 306; fax: 

717–238–2436; e-mail: rcairo@srbc.net. 

Also, for further information on the 

proposed rulemaking, visit the 

Commission’s Web site at http:// 

www.srbc.net. 

SUPPLEMENTARY INFORMATION: 

Background and Purpose of 

Amendments 

The SRBC adopted final rulemaking 

on December 5, 2006, published at 71 

FR 78570, December 29, 2006, 

establishing: (1) The scope and 

procedures for review and approval of 

projects under Section 3.10 of the 

Susquehanna River Basin Compact, 

Public Law 91–575; 83 Stat. 1509 et seq. 

(the compact); (2) special standards 

under Section 3.4 (2) of the compact 

governing water withdrawals, 

consumptive use of water; diversions of 

the basin’s waters, water conservation, 

and water use registration; and (3) 

procedures for hearings, administrative 

appeals, and enforcement actions. 

18 CFR 806.4(a) contains broad 

authority for the review and approval of 

water resources projects by the 

Commission, including projects on or 

crossing the boundary between two 

member States, projects in a member 

State having a significant effect on the 

water resources in another member 

State, and projects affecting the SRBC 

comprehensive plan. Nevertheless, there 

is no express provision in § 806.4 

specifically requiring that projects 

affecting the water resources of the 

basin and undergoing licensing actions 

by the FERC or the NRC be approved by 

the Commission, although that is its 

current practice. To remove any 

uncertainty regarding the need for 

approval of such projects, the 

Commission proposes to insert language 

covering certain projects involved in 

FERC and NRC licensing procedures. 

18 CFR 806.22(f), which was adopted 

by the Commission as a final rule on 

December 4, 2008, and published in the 

Federal Register on December 23, 2008, 

at p. 78618, provides an ‘‘Approval by 

Rule’’ (ABR) procedure for consumptive 

use related to natural gas well 

development that is separate from the 

pre-existing ABR process for projects 

supplied by public water systems, 

which is contained in 18 CFR 806.22(e). 

The Commission proposes to modify the 

public notice provisions related to both 

ABR provisions to make them 

consistent, and simplify the 

administration of the natural gas ABR 

procedure to allow project sponsors to 

utilize all approved sources at any 

approved drilling pad site without the 

need to register its own water source 

approvals or the need to modify each 

ABR issued for subsequently issued 

approvals. It also would allow for 

registration of other approved sources to 

allow for use at the project sponsor’s 

approved drilling pad sites. 

18 CFR 806.32 allows for the 

reopening of a project approval upon