Federal Register / Vol. 73, No. 199 / Tuesday, October 14, 2008 / Rules and Regulations 60625 

1Commission regulations referred to herein are 

found at 17 CFR Ch. I (2007). 

2 52 FR 28990, 29001 (August 5, 1987). 

Miami, FL, Kendall-Tamiami Executive, ILS 

OR LOC RWY 9R, Amdt 10 

Miami, FL, Kendall-Tamiami Executive, 

RNAV (GPS) RWY 9R, Amdt 1 

Miami, FL, Kendall-Tamiami Executive, 

Takeoff Minimums and Obstacle DP, 

Amdt 7 

Mattoon/Charleston, IL, Coles County 

Memorial, RNAV (GPS) RWY 29, Orig 

Mount Vernon, IL, Mount Vernon, GPS RWY 

5, Orig-A, CANCELLED 

Mount Vernon, IL, Mount Vernon, GPS RWY 

23, Orig, CANCELLED 

Mount Vernon, IL, Mount Vernon, RNAV 

(GPS) RWY 5, Orig 

Mount Vernon, IL, Mount Vernon, RNAV 

(GPS) RWY 23, Orig 

Morehead, KY, Morehead-Rowan County 

Clyde A Thomas Rgnl, RNAV (GPS) RWY 

2, Orig 

Morehead, KY, Morehead-Rowan County 

Clyde A Thomas Rgnl, RNAV (GPS) RWY 

20, Orig 

Morehead, KY, Morehead-Rowan County 

Clyde A Thomas Rgnl, Takeoff Minimums 

and Obstacle DP, Orig 

Mitchellville, MD, Freeway, VOR RWY 36, 

Orig-B, CANCELLED 

Traverse City, MI, Cherry Capital, RNAV 

(GPS) RWY 10, Orig 

Cape Girardeau, MO, Cape Girardeau Rgnl, 

ILS OR LOC RWY 10, Amdt 11 

Cape Girardeau, MO, Cape Girardeau Rgnl, 

LOC/DME BC RWY 28, Amdt 7 

Hattiesburg, MS, Hattiesburg Bobby L. Chain 

Muni, VOR RWY 13, Amdt 12 

Jackson, MS, Hawkins Field, GPS RWY 16, 

Orig, CANCELLED 

Jackson, MS, Hawkins Field, GPS RWY 34, 

Orig, CANCELLED 

Jackson, MS, Hawkins Field, RNAV (GPS) 

RWY 16, Orig 

Jackson, MS, Hawkins Field, RNAV (GPS) 

RWY 34, Orig 

Carson City, NV, Carson, RNAV (GPS)–A, 

Orig 

Carson City, NV, Carson, Takeoff Minimums 

and Obstacle DP, Orig 

New York, NY, LaGuardia, Takeoff 

Minimums and Obstacle DP, Amdt 8 

Newburgh, NY, Stewart Intl, Takeoff 

Minimums and Obstacle DP, Amdt 5 

McMinnville, OR, McMinnville Muni, 

Takeoff Minimums and Obstacle DP, 

Amdt 4 

McMinnville, OR, McMinnville Muni, VOR/ 

DME–B, Amdt 6 

Ontario, OR, Ontario Muni, Takeoff 

Minimums and Obstacle DP, Amdt 3 

State College, PA, University Park, ILS OR 

LOC RWY 24, Amdt 9 

State College, PA, University Park, RNAV 

(GPS) RWY 6, Amdt 1 

State College, PA, University Park, RNAV 

(GPS) RWY 24, Orig 

State College, PA, University Park, VOR–B, 

Amdt 10 

Lebanon, TN, Lebanon Muni, GPS RWY 19, 

Orig, CANCELLED 

Lebanon, TN, Lebanon Muni, NDB RWY 19, 

Amdt 1 

Lebanon, TN, Lebanon Muni, RNAV (GPS) 

RWY 19, Orig 

Ogden, UT, Ogden-Hinckley, VOR/DME 

RWY 7, Amdt 6 

Richlands, VA, Tazewell County, LOC/DME 

RWY 25, Orig 

Ellensburg, WA, Bowers Field, VOR–B, 

Amdt 3 

Pasco, WA, Tri-Cities, VOR/DME RWY 30, 

Amdt 3 

Correction: On September 11, 2008 (73 FR 

52779), the FAA published an Amendment 

in Docket No. 30624, Amdt No. 3284 to Part 

97 of the Federal Aviation Regulations under 

section 97.29. The 1st entry for Pittsburgh, 

PA, Pittsburgh Intl, effective September 25, 

2008, is hereby corrected to read as follows: 

Pittsburgh, PA, Pittsburgh Intl, 

CONVERGING ILS RWY 28R, Amdt 4, 

CANCELLED 

Rescinded: On August 7, 2008 (73 FR 

45861), the FAA published an Amendment 

in Docket No. 30620, Amdt No. 3280 to Part 

97 of the Federal Aviation Regulations under 

section 97.25. The following entry, effective 

September 25, 2008, is hereby rescinded in 

its entirety: 

Ketchikan, AK, Ketchikan Intl, ILS OR LOC/ 

DME Y RWY 11, Amdt 7 

[FR Doc. E8–23913 Filed 10–10–08; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 30 

Foreign Futures and Options 

Transactions 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Order. 

SUMMARY: The Commodity Futures 

Trading Commission (Commission or 

CFTC) is granting an exemption to firms 

designated by the Tokyo Financial 

Exchange, Inc. (TFX) from the 

application of certain of the 

Commission’s foreign futures and 

option regulations based upon 

substituted compliance with certain 

comparable regulatory and selfregulatory requirements of a foreign 

regulatory authority consistent with 

conditions specified by the 

Commission, as set forth herein. This 

Order is issued pursuant to Commission 

Regulation 30.10, which permits 

persons to file a petition with the 

Commission for exemption from the 

application of certain of the Regulations 

set forth in Part 30 and authorizes the 

Commission to grant such an exemption 

if such action would not be otherwise 

contrary to the public interest or to the 

purposes of the provision from which 

exemption is sought. 

DATES: Effective Date: October 14, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Andrew V. Chapin, Associate Director; 

Helene Schroeder, Special Counsel; or 

Peter B. Sanchez, Special Counsel, 

Division of Clearing and Intermediary 

Oversight, Commodity Futures Trading 

Commission, 1155 21st Street, NW., 

Washington, DC 20581. Telephone: 

(202) 418–5430. E-mail: DCIO@cftc.gov. 

SUPPLEMENTARY INFORMATION: The 

Commission has issued the following 

Order: 

Order Under CFTC Regulation 30.10 

Exempting Firms Designated by the Tokyo 

Financial Exchange, Inc. (TFX) From the 

Application of Certain of the Foreign Futures 

and Option Regulations the Later of the Date 

of Publication of the Order Herein in the 

Federal Register or After Filing of Consents 

by Such Firms and TFX, as Appropriate, to 

the Terms and Conditions of the Order 

Herein. 

Commission Regulations governing 

the offer and sale of commodity futures 

and option contracts traded on or 

subject to the regulations of a foreign 

board of trade to customers located in 

the U.S. are contained in Part 30 of the 

Commission’s regulations.1 These 

regulations include requirements for 

intermediaries with respect to 

registration, disclosure, capital 

adequacy, protection of customer funds, 

recordkeeping and reporting, and sales 

practice and compliance procedures 

that are generally comparable to those 

applicable to transactions on U.S. 

markets. 

In formulating a regulatory program to 

govern the offer and sale of foreign 

futures and option products to 

customers located in the U.S., the 

Commission, among other things, 

considered the desirability of 

ameliorating the potential 

extraterritorial impact of such a program 

and avoiding duplicative regulation of 

firms engaged in international business. 

Based upon these considerations, the 

Commission determined to permit 

persons located outside the U.S. and 

subject to a comparable regulatory 

structure in the jurisdiction in which 

they were located to seek an exemption 

from certain of the requirements under 

Part 30 of the Commission’s regulations 

based upon substituted compliance with 

the regulatory requirements of the 

foreign jurisdiction. 

Appendix A to Part 30, ‘‘Interpretative 

Statement With Respect to the 

Commission’s Exemptive Authority 

Under § 30.10 of Its Rules’’ (Appendix 

A), generally sets forth the elements the 

Commission will evaluate in 

determining whether a particular 

regulatory program may be found to be 

comparable for purposes of exemptive 

relief pursuant to Regulation 30.10.2

These elements include: (1) 

Registration, authorization or other form 


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60626 Federal Register / Vol. 73, No. 199 / Tuesday, October 14, 2008 / Rules and Regulations 

3 52 FR 28980, 28981 and 29002. 

4The Commission previously reviewed petitions 

from two Japanese self-regulatory organizations— 

the Tokyo Grain Exchange (TGE) and the Tokyo 

Commodity Exchange (TOCOM). See 58 FR10953 

(February 23, 1993) (TGE); 71 FR 6759 (February 9, 

2006) (TOCOM). 

5See, e.g., Sections 2(a)(1)(C) and (D) of the Act. 

6See, e.g., 17 CFR Part 18 (2007). 

7See, e.g., 17 CFR Parts 17 and 21 (2007). 

of licensing, fitness review or 

qualification of persons that solicit and 

accept customer orders; (2) minimum 

financial requirements for those persons 

who accept customer funds; (3) 

protection of customer funds from 

misapplication; (4) recordkeeping and 

reporting requirements; (5) sales 

practice standards; (6) procedures to 

audit for compliance with, and to take 

action against those persons who 

violate, the requirements of the 

program; and (7) information sharing 

arrangements between the Commission 

and the appropriate governmental and/ 

or self-regulatory organization to ensure 

Commission access on an ‘‘as needed’’ 

basis to information essential to 

maintaining standards of customer and 

market protection within the U.S. 

Moreover, the Commission 

specifically stated in adopting 

Regulation 30.10 that no exemption of a 

general nature would be granted unless 

the persons to whom the exemption is 

to be applied: (1) Submit to jurisdiction 

in the U.S. by designating an agent for 

service of process in the U.S. with 

respect to transactions subject to Part 30 

and filing a copy of the agency 

agreement with the National Futures 

Association (NFA); (2) agree to provide 

access to their books and records in the 

U.S. to Commission and Department of 

Justice representatives; and (3) notify 

NFA of the commencement of business 

in the U.S.3

On August 10, 2007, TFX petitioned 

the Commission on behalf of its member 

firms, located and doing business in 

Japan, for an exemption from the 

application of the Commission’s Part 30 

Regulations to those firms.4 In support 

of its petition, TFX states that granting 

such an exemption with respect to such 

firms that it has authorized to conduct 

foreign futures and option transactions 

on behalf of customers located in the 

U.S. would not be contrary to the public 

interest or to the purposes of the 

provisions from which the exemption is 

sought because such firms are subject to 

a regulatory framework comparable to 

that imposed by the Commodity 

Exchange Act (Act) and the regulations 

thereunder. 

Based upon a review of the petition, 

supplementary materials filed by TFX 

and the recommendation of the 

Commission’s staff, the Commission has 

concluded that the standards for relief 

set forth in Regulation 30.10 and, in 

particular, Appendix A thereof, have 

been met and that compliance with 

applicable Japanese law and TFX 

regulations may be substituted for 

compliance with those sections of the 

Act and regulations thereunder more 

particularly set forth herein. 

By this Order, the Commission hereby 

exempts, subject to specified conditions, 

those firms identified to the 

Commission by TFX as eligible for the 

relief granted herein from: 

—Registration with the Commission for firms 

and for firm representatives; 

—The requirement in Commission 

Regulation 30.6(a) and (d), 17 CFR § 30.6(a) 

and (d), that firms provide customers 

located in the U.S. with the risk disclosure 

statements in Commission Regulation 

1.55(b), 17 CFR 1.55(b), and Commission 

Regulation 33.7, 17 CFR 33.7, or as 

otherwise approved under Commission 

Regulation 1.55(c), 17 CFR 1.55(c); 

—The separate account requirement 

contained in Commission Regulation 30.7, 

17 CFR 30.7; 

—Those sections of Part 1 of the 

Commission’s financial regulations that 

apply to foreign futures and options sold 

in the U.S. as set forth in Part 30; and 

—Those sections of Part 1 of the 

Commission’s regulations relating to books 

and records which apply to transactions 

subject to Part 30, 

based upon substituted compliance by 

such persons with the applicable 

statutes and regulations in effect in 

Japan. 

This determination to permit 

substituted compliance is based on, 

among other things, the Commission’s 

finding that the regulatory framework 

governing persons in Japan who would 

be exempted hereunder provides: 

(1) A system of qualification or 

authorization of firms who deal in 

transactions subject to regulation under Part 

30 that includes, for example, criteria and 

procedures for granting, monitoring, 

suspending and revoking licenses, and 

provisions for requiring and obtaining access 

to information about authorized firms and 

persons who act on behalf of such firms; 

(2) Financial requirements for firms 

including, without limitation, a requirement 

for a minimum level of working capital and 

daily mark-to-market settlement and/or 

accounting procedures; 

(3) A system for the protection of customer 

assets that is designed to preclude the use of 

customer assets to satisfy house obligations 

and requires separate accounting for such 

assets; 

(4) Recordkeeping and reporting 

requirements pertaining to financial and 

trade information; 

(5) Sales practice standards for authorized 

firms and persons acting on their behalf that 

include, for example, required disclosures to 

prospective customers and prohibitions on 

improper trading advice; 

(6) Procedures to audit for compliance 

with, and to redress violations of, the 

customer protection and sales practice 

requirements referred to above, including, 

without limitation, an affirmative 

surveillance program designed to detect 

trading activities that take advantage of 

customers, and the existence of broad powers 

of investigation relating to sales practice 

abuses; and 

(7) Mechanisms for sharing of information 

between the Commission, TFX, and the 

Japanese regulatory authorities on an ‘‘as 

needed’’ basis including, without limitation, 

confirmation data, data necessary to trace 

funds related to trading futures products 

subject to regulation in Japan, position data, 

and data on firms’ standing to do business 

and financial condition. 

Commission staff have concluded, 

upon review of the petition of TFX and 

accompanying exhibits, that Japan’s 

regulation of financial futures and 

options exchanges is comparable to that 

of the U.S. in the areas specified in 

Appendix A of Part 30, as described 

above. 

This Order does not provide an 

exemption from any provision of the 

Act or regulations thereunder not 

specified herein, such as the antifraud 

provision in Regulation 30.9. Moreover, 

the relief granted is limited to brokerage 

activities undertaken on behalf of 

customers located in the U.S. with 

respect to transactions on or subject to 

the regulations of TFX for products that 

customers located in the U.S. may 

trade.5 The relief does not extend to 

regulations relating to trading, directly 

or indirectly, on U.S. exchanges. For 

example, a firm trading in U.S. markets 

for its own account would be subject to 

the Commission’s large trader reporting 

requirements.6 Similarly, if such a firm 

were carrying positions on a U.S. 

exchange on behalf of foreign clients 

and submitted such transactions for 

clearing on an omnibus basis through a 

firm registered as a futures commission 

merchant under the Act, it would be 

subject to the reporting requirements 

applicable to foreign brokers.7 The relief 

herein is inapplicable where the firm 

solicits or accepts orders from 

customers located in the U.S. for 

transactions on U.S. markets. In that 

case, the firm must comply with all 

applicable U.S. laws and regulations, 

including the requirement to register in 

the appropriate capacity. 

The eligibility of any firm to seek 

relief under this exemptive Order is 

subject to the following conditions: 

(1) The regulatory or self-regulatory 

organization responsible for monitoring 

the compliance of such firms with the 

regulatory requirements described in the 


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Federal Register / Vol. 73, No. 199 / Tuesday, October 14, 2008 / Rules and Regulations 60627 

8As described below, these representations are to 

be filed with NFA. 

9 62 FR 47792, 47793 (September 11, 1997). 

Among other duties, the Commission authorized 

NFA to receive requests for confirmation of 

Regulation 30.10 relief on behalf of particular firms, 

to verify such firms’ fitness and compliance with 

the conditions of the appropriate Regulation 30.10 

Order and to grant exemptive relief from 

registration to qualifying firms. 

10See 57 FR 49644 (November 3, 1992) 

(permitted limited marketing of foreign futures and 

foreign option products to certain governmental and 

institutional customers located in the U.S.); 59 FR 

42156 (August 17, 1994) (expanding the relief set 

forth in the 1992 release to conduct directed 

towards ‘‘accredited investors’’, as defined in the 

Securities and Exchange Commission’s Regulation 

D issued pursuant to the Securities Act of 1933). 

Regulation 30.10 petition must 

represent in writing to the CFTC8 that: 

(a) Each firm for which relief is sought is 

registered, licensed or authorized, as 

appropriate, and is otherwise in good 

standing under the standards in place in 

Japan; such firm is engaged in business with 

customers in Japan as well as in the U.S.; and 

such firm and its principals and employees 

who engage in activities subject to Part 30 

would not be statutorily disqualified from 

registration under Section 8a(2) of the Act, 7 

U.S.C. 12a(2); 

(b) It will monitor firms to which relief is 

granted for compliance with the regulatory 

requirements for which substituted 

compliance is accepted and will promptly 

notify the Commission or NFA of any change 

in status of a firm that would affect its 

continued eligibility for the exemption 

granted hereunder, including the termination 

of its activities in the U.S.; 

(c) All transactions with respect to 

customers resident in the U.S. will be made 

on or subject to the regulations of TFX and 

the Commission will receive prompt notice 

of all material changes to the relevant laws 

in Japan, any regulations promulgated 

thereunder and TFX regulations; 

(d) Customers located in the U.S. will be 

provided no less stringent regulatory 

protection than Japanese customers under all 

relevant provisions of Japanese law; and 

(e) It will cooperate with the Commission 

with respect to any inquiries concerning any 

activity subject to regulation under the Part 

30 Regulations, including sharing the 

information specified in Appendix A on an 

‘‘as needed’’ basis and will use its best efforts 

to notify the Commission if it becomes aware 

of any information that in its judgment 

affects the financial or operational viability of 

a member firm doing business in the U.S. 

under the exemption granted by this Order. 

(2) Each firm seeking relief hereunder 

must represent in writing that it: 

(a) Is located outside the U.S., its territories 

and possessions and, where applicable, has 

subsidiaries or affiliates domiciled in the 

U.S. with a related business (e.g., banks and 

broker/dealer affiliates) along with a brief 

description of each subsidiary’s or affiliate’s 

identity and principal business in the U.S.; 

(b) Consents to jurisdiction in the U.S. 

under the Act by filing a valid and binding 

appointment of an agent in the U.S. for 

service of process in accordance with the 

requirements set forth in Regulation 30.5; 

(c) Agrees to provide access to its books 

and records related to transactions under Part 

30 required to be maintained under the 

applicable statutes and regulations in effect 

in Japan upon the request of any 

representative of the Commission or U.S. 

Department of Justice at the place in the U.S. 

designated by such representative, within 72 

hours, or such lesser period of time as 

specified by that representative as may be 

reasonable under the circumstances after 

notice of the request; 

(d) Has no principal or employee who 

solicits or accepts orders from customers 

located in the U.S. who would be 

disqualified under Section 8a(2) of the Act, 

7 U.S.C. 12a(2), from doing business in the 

U.S.; 

(e) Consents to participate in any NFA 

arbitration program that offers a procedure 

for resolving customer disputes on the papers 

where such disputes involve representations 

or activities with respect to transactions 

under Part 30, and consents to notify 

customers located in the U.S. of the 

availability of such a program; 

(f) Undertakes to comply with the 

applicable provisions of Japanese laws and 

TFX regulations that form the basis upon 

which this exemption from certain 

provisions of the Act and Regulations 

thereunder is granted. 

As set forth in the Commission’s 

September 11, 1997 Order delegating to 

NFA certain responsibilities, the written 

representations set forth in paragraph 

(2) shall be filed with NFA.9 Each firm 

seeking relief hereunder has an ongoing 

obligation to notify NFA should there be 

a material change to any of the 

representations required in the firm’s 

application for relief. 

The Commission also confirms that 

TFX members that receive confirmation 

of relief set forth herein may engage in 

limited marketing conduct with respect 

to certain qualified customers located in 

the U.S. from a non-permanent location 

in the U.S., subject to the terms and 

conditions set forth in prior 

Commission Orders.10 The Commission 

notes that any firm and their employees 

or other representatives which engage in 

marketing conduct pursuant to this 

relief are deemed to have consented to 

the Commission’s jurisdiction over such 

marketing activities by their filing of a 

valid and binding appointment of an 

agent in the U.S. for service of process. 

This Order will become effective as to 

any designated TFX firm the later of the 

date of publication of the Order in the 

Federal Register or the filing of the 

consents set forth in paragraphs (2)(a)– 

(f). Upon filing of the notice required 

under paragraph (1)(b) as to any such 

firm, the relief granted by this Order 

may be suspended immediately as to 

that firm. That suspension will remain 

in effect pending further notice by the 

Commission, or the Commission’s 

designee, to the firm and TFX. 

This Order is issued pursuant to 

Regulation 30.10 based on the 

representations made and supporting 

material provided to the Commission 

and the recommendation of the staff, 

and is made effective as to any firm 

granted relief hereunder based upon the 

filings and representations of such firms 

required hereunder. Any material 

changes or omissions in the facts and 

circumstances pursuant to which this 

Order is granted might require the 

Commission to reconsider its finding 

that the standards for relief set forth in 

Regulation 30.10 and, in particular, 

Appendix A, have been met. Further, if 

experience demonstrates that the 

continued effectiveness of this Order in 

general, or with respect to a particular 

firm, would be contrary to public policy 

or the public interest, or that the 

systems in place for the exchange of 

information or other circumstances do 

not warrant continuation of the 

exemptive relief granted herein, the 

Commission may condition, modify, 

suspend, terminate, withhold as to a 

specific firm, or otherwise restrict the 

exemptive relief granted in this Order, 

as appropriate, on its own motion. 

The Commission will continue to 

monitor the implementation of its 

program to exempt firms located in 

jurisdictions generally deemed to have a 

comparable regulatory program from the 

application of certain of the foreign 

futures and option regulations and will 

make necessary adjustments if 

appropriate. 

Dated: October 8, 2008. 

By the Commission. 

David Stawick, 

Secretary of the Commission. 

[FR Doc. E8–24315 Filed 10–10–08; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 801 

[TD 9426] 

RIN 1545–BE45 

Balanced System for Measuring 

Organizational and Employee 

Performance Within the Internal 

Revenue Service 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations. 


ebenthall on PROD1PC60 with RULES