Federal Register / Vol. 73, No. 17 / Friday, January 25, 2008 / Proposed Rules 4499 

1Commission regulations referred to herein are 

found at 17 CFR Ch. I (2007). References to trading 

on U.S. DCMs or DTEFs shall include trading that 

is subject to the rules of such entities as well. 2 72 FR 63976 (November 14, 2007). 

3 Id. 

4 52 FR 28980 (August 5, 1987). 

5Regulations 30.1(a), (b) and (c), define the terms 

‘‘foreign futures,’’ ‘‘foreign options,’’ and ‘‘foreign 

futures or foreign options customer,’’ respectively. 6See Regulation 30.4. 

approved the information collection 

requirements and has assigned OMB Control 

Number 2120–0056. 

Issued in Kansas City, Missouri, on January 

17, 2008. 

James E. Jackson, 

Acting Manager, Small Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. E8–1245 Filed 1–24–08; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Parts 3 and 30 

RIN 3038–AC26 

Exemption From Registration for 

Certain Firms With Regulation 30.10 

Relief 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Proposed rules. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘Commission’’) is 

proposing to amend the regulations 

regarding the registration of certain 

firms located outside the U.S. that are 

engaged in commodity interest activities 

with respect to trading on U.S. 

designated contract markets (‘‘DCMs’’) 

and U.S. derivative transaction 

execution facilities (‘‘DTEFs’’).1 The 

amended regulation would codify past 

actions of the Commission’s staff 

permitting certain foreign firms that 

have confirmed relief from registration 

as futures commission merchants 

(‘‘FCMs’’) in accordance with the 

regulations to introduce to registered 

FCMs certain U.S. customers in 

connection with trading U.S. DCM and 

DTEF listed futures and commodity 

options without having to register as an 

introducing broker pursuant to section 

4d of the Commodity Exchange Act 

(‘‘Act’’). The Commission also is 

proposing to revoke the regulations 

regarding quarterly reporting 

requirements for foreign futures and 

foreign options transactions. 

DATES: Comments must be received on 

or before February 25, 2008. 

ADDRESSES: Comments may be 

submitted, identified by RIN 3038–

AC26, by any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: secretary@cftc.gov. Include 

‘‘Exemption from Registration for 

Certain Firms with Regulation 30.10 

Relief’’ in the subject line of the 

message. 

• Fax: 202/418–5521. 

• Mail or Courier: Send to David 

Stawick, Secretary, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st St., NW., Washington, 

DC 20581. 

All comments received will be posted 

without change to http://www.cftc.gov, 

including any personal information 

provided. 

FOR FURTHER INFORMATION CONTACT: 

Andrew V. Chapin, Special Counsel, at 

(202) 418–5465, Division of Clearing 

and Intermediary Oversight, Commodity 

Futures Trading Commission, Three 

Lafayette Centre, 1155 21st Street, NW., 

Washington, DC 20581. Electronic mail: 

achapin@cftc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background Information 

A. Registration Requirements for 

Commodity Interest Activities on U.S. 

Markets 

Part 3 of the Commission’s regulations 

governs the registration of 

intermediaries engaged in the offer and 

sale of, and providing advice 

concerning, futures and commodity 

options traded on U.S. markets, 

including both DCMs and DTEFs. In 

particular, Regulation 3.10 sets forth the 

manner in which FCMs, introducing 

brokers (‘‘IBs’’), commodity trading 

advisors (‘‘CTAs’’), commodity pool 

operators (‘‘CPOs’’) and leverage 

transaction merchants must apply for 

registration with the Commission. 

Regulation 3.10(c) also provides an 

exemption from registration for certain 

persons. For example, Regulation 

3.10(c)(1) provides an exemption from 

registration as an FCM for any person 

trading solely for proprietary accounts, 

as defined in Regulation 1.3(y). 

The Commission recently adopted 

amendments to Regulation 3.10(c) to 

codify the Commission’s longstanding 

policy towards certain foreign 

intermediaries, known as foreign 

brokers.2 New Regulation 3.10(c)(2) 

provides an exemption from registration 

as an FCM to any foreign broker that 

limits its customers to persons located 

outside the U.S. and submits 

transactions executed on U.S. exchanges 

for clearing on an omnibus basis 

through a registered FCM. The 

Commission also promulgated 

Regulation 3.10(c)(3) to provide an 

exemption from registration to any 

foreign person engaged in the activity of 

an introducing broker, commodity pool 

operator or commodity trading advisor 

solely on behalf of customers located 

outside the U.S., provided that all 

commodity interest transactions are 

submitted for clearing to a registered 

FCM.3

B. Part 30 of the Commission’s 

Regulations 

In 1987, the Commission adopted a 

new Part 30 of its regulations to govern 

the offer and sale to U.S. persons of 

futures and option contracts entered 

into on or subject to the rules of a 

foreign board of trade.4 These 

regulations were promulgated pursuant 

to Sections 2(a)(1)(A), 4(b) and 4c of the 

Act, which vest the Commission with 

exclusive jurisdiction over the offer and 

sale, in the U.S., of futures and 

commodity option contracts traded on 

or subject to the rules of a board of 

trade, exchange or market located 

outside of the U.S. 

Part 30 sets forth regulations 

governing foreign futures and foreign 

option transactions executed on behalf 

of customers located in the U.S., 

referred to in the regulations as foreign 

futures or foreign options customers.5

For example, Regulation 30.4 requires 

any person engaged in the activities that 

are described in the regulation to 

register with the Commission as an 

FCM, IB, CPO or CTA, respectively, 

unless such person claims relief from 

registration under Part 30. The activities 

described in Regulation 30.4 essentially 

are similar to those of an FCM, IB, CPO 

or CTA defined in the Act, except that 

the transactions that the person 

intermediates are conducted on or 

subject to the rules of a foreign board of 

trade. The transactions that are subject 

to regulation and require registration 

under Part 30 include the solicitation or 

acceptance of orders for trading any 

foreign futures or foreign option 

contract and acceptance of money, 

securities or property to margin, 

guarantee or secure any foreign futures 

or foreign option trades or contracts.6

Under Part 30, certain persons located 

outside the U.S. may obtain an 

exemption from registration and certain 

other requirements. For example, under 

Regulation 30.10 and Appendix A 

thereto, the Commission may exempt a 

foreign firm that solicits or accepts 

orders (and accepts money, securities or 

property to margin the trades made 

thereto) from customers located in the 

U.S. from compliance with certain 


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4500 Federal Register / Vol. 73, No. 17 / Friday, January 25, 2008 / Proposed Rules 

7See Appendix A to Part 30; 62 FR 47792 

(September 11, 1997). 8See, e.g., CFTC Letter 07–23, [Current Transfer 

Binder] Comm. Fut. L. Rep. (CCH) ¶lll 

(November 23, 2007). 

9See, e.g., CFTC Staff Letter 07–06, [Current 

Transfer Binder], Comm. Fut. L. Rep. (CCH) ¶

lllll at lllll, n.3 (May 24, 2007). CFTC 

Letter 07–06 is one of a series of letters issued by 

the Division of Market Oversight that permits 

members of a particular foreign exchange located in 

the U.S. to connect directly to the foreign 

exchange’s order and trade matching system 

without the exchange having to register as a DCM 

or DTEF. For the purposes of the no-action relief, 

the term ‘‘members’’ includes ‘‘affiliates’’ as defined 

consistent with this proposal. The Commission 

notes that, as a condition of the no-action relief, 

members connected directly to the foreign exchange 

are ultimately responsible for the conduct of any 

affiliate. 

Commission rules, including those rules 

pertaining to registration, provided that 

a comparable regulatory system exists in 

the firm’s home country and that certain 

safeguards are in place to protect U.S. 

investors, including an informationsharing arrangement between the 

Commission and the firm’s home 

country regulator.7 Relief from 

registration pursuant to Regulation 

30.10 does not extend to any activities 

related to acting as an intermediary with 

respect to trading, directly or indirectly, 

on any U.S. exchanges. 

C. Interpretation of the Rule 30.10 

Exemption 

The Division of Clearing and 

Intermediary Oversight (‘‘Division’’) has 

issued a series of no-action letters that 

permit, in limited circumstances, a 

foreign firm exempt from FCM 

registration pursuant to Regulation 

30.10 (‘‘Regulation 30.10 firm’’), to 

intermediate transactions executed on 

U.S. exchanges on behalf of U.S. 

customers. Specifically, the Division 

confirmed that it would not recommend 

that the Commission commence any 

enforcement action against certain 

FCMs and affiliated Regulation 30.10 

firms if such unregistered affiliates 

introduced certain sophisticated U.S. 

customers to a registered FCM for the 

purpose of trading on U.S. designated 

contract markets.8 The relief in each noaction letter issued by the Division was 

predicated upon the relevant FCM’s 

acknowledgment that it would be jointly 

and severally liable for any violations of 

the Act or the Commission’s regulations 

committed by the foreign affiliate in 

connection with those activities, even if 

the FCM did not submit the trade for 

clearing. In addition, the no-action relief 

required that all U.S. customers be 

introduced on a fully-disclosed basis, 

and that any non-U.S. affiliate would 

not be permitted either to solicit any 

U.S. customer or handle any U.S. 

customer funds for trading on U.S. 

markets. 

In granting the above no-action relief, 

the Division recognized that a U.S. 

institutional customer may achieve 

greater operational and economic 

efficiencies by eliminating the need to 

use multiple order entry systems to 

engage in transactions in both U.S. and 

non-U.S. markets. In addition, the 

Division acknowledged that, by 

consolidating orders into a single 

execution system, an intermediating 

FCM may mitigate more effectively the 

increased systemic and liquidity risks 

associated with such activities. 

Given that the no-action relief 

provided by the Division applies only to 

the recipients of each no-action letter, 

the Commission believes that it may be 

appropriate to provide relief for all 

FCMs and their affiliates that provide 

brokerage services to U.S. institutional 

investors in like cirumstances. Like 

those FCMs addressed by the Division’s 

no-action relief, these FCMs also have 

institutional U.S. customers that trade 

globally throughout the 24-hour trading 

day, and who currently must use 

multiple order entry systems to execute 

transactions both domestically and 

abroad. Accordingly, the Commission 

has determined to propose to amend 

Regulation 3.10(c) to address the issue 

without the need for separate no-action 

letters, and invites public comment on 

all aspects of the proposed rule. 

II. Proposed Regulations 

The Commission proposes to codify 

the staff interpretations described in 

Section I.C above. Specifically, the 

Commission proposes to promulgate 

Regulation 3.10(c)(4) to exempt from 

registration as an IB a firm located 

outside the U.S. that introduces certain 

sophisticated U.S. customers to a 

registered FCM for the purpose of 

trading on a DCM or DTEF. The 

exemption would be limited to those 

foreign firms that are affiliated with an 

FCM and have obtained confirmation of 

relief pursuant to the terms and 

conditions of an order issued by the 

Commission pursuant to Regulation 

30.10. Any account introduced pursuant 

to this exemption must be introduced 

on a fully-disclosed basis in accordance 

with Regulation 1.57 and the foreign 

firm would not be permitted to solicit 

any U.S. customers nor handle any U.S. 

customer funds for trading on U.S. 

markets. The Commission has proposed 

to limit the exemption in Regulation 

3.10(c)(4) to Regulation 30.10 firms 

because Regulation 30.10 relief is 

predicated on the existence of a 

comparable regulatory program in the 

jurisdiction in which the affiliate is 

located, and the presence of certain 

safeguards to protect U.S. investors, 

including standards for fitness and an 

information-sharing arrangement 

between the Commission and the 

authorities in the affiliate’s home 

country. 

The Commission notes that the 

Division’s existing no-action letters 

provide exemptive relief to foreign firms 

acting on behalf of certain 

‘‘institutional’’ and ‘‘commercial’’

entities. In search of a workable 

universal standard, the Commission has 

proposed to structure the exemption so 

as to limit the offer and sale of U.S. 

contracts to institutional customers, as 

defined in Regulation 1.3(g). The 

Commission also proposes Regulation 

3.10(c)(6) that, for the purposes of this 

regulation, the term ‘‘affiliate’’ means 

any person that: (i) Owns 50 percent or 

more of the FCM; (ii) is owned 50 

percent or more by the FCM; or (iii) is 

owned 50 percent or more by a third 

person that also owns 50 percent or 

more of the FCM.9

Consistent with the terms and 

conditions of relief established by the 

Division in the no-action process, the 

Commission also proposes to predicate 

the availability of the exemption upon 

the relevant FCM’s acknowledgment, to 

be filed with NFA pursuant to proposed 

Regulation 3.10(c)(4)(iii), that it would 

be jointly and severally liable for any 

violations of the Act or the 

Commission’s regulations committed by 

the foreign affiliate in connection with 

those activities, even if the FCM 

ultimately did not submit the trade for 

clearing. As such, the Commission has 

proposed to limit the exemption to firms 

affiliated with an FCM so that the FCM 

may maintain the appropriate level of 

oversight to ensure that the foreign 

affiliate complies with the conditions 

for relief as set forth in the proposed 

regulation. 

Proposed regulation 3.10(c)(4), in 

keeping with the no-action letters issued 

to date, prohibits the firm wishing to 

take advantage of the IB registration 

exemption from soliciting customer 

orders for trading on U.S. exchanges. 

This registration exemption only is 

intended to be a convenience for 

institutional customers so that they 

need not use multiple order entry 

processes to transact related business. 

For example, an institutional customer 

seeking to establish a position on the 

London Metal Exchange (LME) may 

desire to hedge that position with 

contracts listed on the New York 

Mercantile Exchange (NYMEX). Absent 

relief, a Regulation 30.10 firm executing 

and/or submitting for clearing the LME 

transaction may not participate in the 


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Federal Register / Vol. 73, No. 17 / Friday, January 25, 2008 / Proposed Rules 4501 

10The following letters for no-action relief will be 

superceded if the proposed rules are adopted: CFTC 

Letters 03–28, 04–09, 04–14, 05–06, 07–05, 07–08, 

07–16, 07–17, 07–20 and 07–23. The Commission 

seeks comments from any party adversely affected 

by the determination to rescind these CFTC Letters. 

11Compare Regulation 30.12, 17 CFR 30.12 

(Direct Foreign Order Transmittal). Pursuant to 

Regulation 30.12(b)(1)(i), an FCM must possess, for 

example, $20,000,000 in adjusted net capital in 

order for one of its ‘‘authorized customers’’ to 

engage in direct foreign order transmittal with an 

unregistered foreign futures and options broker for 

the purpose of trading foreign futures or options 

through the FCM’s customer omnibus account. 

12 47 FR 18618–18621 (April 30, 1982). 

13 47 FR 18619–18620. 

acceptance of orders for any NYMEX 

contracts. Pursuant to the proposed 

regulation, a Regulation 30.10 firm may 

introduce the institutional customer to a 

registered FCM for the purposes of 

submitting the NYMEX transaction for 

clearing, provided that the institutional 

customer initiates the transaction. 

The exemption from registration also 

is not intended to be used by firms as 

a promotional vehicle. The proposed 

regulation would not permit a 

Regulation 30.10 firm to solicit new 

customers based on its ability to access 

U.S. markets. As stated above, the 

Commission is proposing to create a 

limited-purpose exemption from IB 

registration so that existing institutional 

customers may reduce transactional 

costs associated with the use of multiple 

order entry processes. 

The Commission also notes that the 

proposed amendments to Regulation 

3.10(c) are intended to provide a 

limited-purpose registration exemption 

available only to those foreign firms 

engaging in bona fide global futures 

brokerage activities on behalf of 

institutional customers located in the 

U.S. Absent such relief, these firms 

would be required to register with the 

Commission in the appropriate capacity, 

because the applicable Regulation 30.10 

relief does not extend to brokerage 

activities undertaken, directly or 

indirectly, on U.S. exchanges on behalf 

of any U.S. person. A foreign firm not 

engaged in bona fide global futures 

brokerage activities on behalf of 

institutional customers, e.g., a firm 

limiting its brokerage activities on 

behalf of U.S. customers to trading 

solely on U.S. exchanges, may not rely 

on the proposed exemptions to 

circumvent the IB registration 

requirement. An FCM submitting the 

acknowledgment set forth in proposed 

Regulation 3.10(c)(4)(iii) could be held 

liable for any violations of a foreign 

affiliate in an attempt to circumvent the 

Commission’s registration requirements 

in this regard. 

The Commission further notes that 

proposed Regulation 3.10(c)(4) would 

replace prior staff letters as the sole 

source of authorization for those 

unregistered foreign firms that introduce 

to an FCM U.S. customers for the 

purpose of trading on U.S. markets.10 A 

firm that fails to comply with any of the 

terms or conditions of the applicable 

Regulation 30.10 order, including a 

failure to comply with any element of 

the regulatory program on which relief 

was predicated, would make the firm 

ineligible for relief set forth in proposed 

Regulation 3.10(c)(4). 

In each of the existing no-action 

letters on this subject cited in the 

footnote, the Division considered the 

size of the FCM and its relationship 

with its particular non-U.S. affiliate 

prior to determining that relief would 

not be contrary to the public interest. 

More specifically, the Division 

determined that the financial strength 

and organizational structure of each 

FCM provided a reasonable basis upon 

which to rely that it could honor the 

acknowledgement of joint and several 

liability. Accordingly, the Commission 

solicits comments as to whether it 

would be appropriate to establish 

minimum capital or other standards for 

the affiliated FCM as a condition for 

exemptive relief.11

The Commission also solicits 

comment as to whether the proposed 

limited-purpose registration exemption 

should be extended to otherwise 

qualified foreign persons that advise 

institutional customers for the purposes 

of trading on U.S. markets. This relief 

would be available, for example, to the 

foreign affiliate of an FCM that provides 

trading advice tailored to the particular 

circumstances of U.S. customers that 

meet the institutional customer 

standards regarding the trading of both 

domestic and foreign futures as part of 

an overall global strategy. 

The Commission also is proposing to 

revoke Regulation 30.8. Regulation 30.8 

requires each FCM to provide NFA with 

a quarterly report containing data for the 

total volume of foreign futures and 

options contracts effected on foreign 

boards of trade. From its experience, the 

Commission recognizes that FCMs are 

engaging in both domestic and foreign 

futures and options transactions on 

behalf of customers located in the U.S., 

and therefore are subject to other 

extensive reporting and recordkeeping 

requirements set forth in Part 1 of its 

regulations. As such, the Commission 

believes that the reporting requirement 

set forth in Regulation 30.8 is overly 

burdensome and no longer necessary. 

The Commission solicits comments as 

to whether remaining reporting 

requirements are sufficient for FCMs 

engaged in foreign futures and options 

transactions on behalf of customers 

located in the U.S. 

III. Related Matters 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(‘‘RFA’’), 5 U.S.C. 601–611, requires that 

agencies, in proposing regulations, 

consider the impact of those regulations 

on small businesses. 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.12 The 

Commission previously has determined 

that registered FCMs are not small 

entities for the purpose of the RFA 

because each FCM has an underlying 

fiduciary relationship with its 

customers, regardless of the size of the 

FCM.13 The Commission notes that the 

foreign persons affected by the proposed 

changes to the Commission’s regulations 

would be registered as FCMs if not for 

the exemption provided therein and, as 

such, would maintain a fiduciary 

relationship with customers similar to 

the relationship maintained by each 

registered FCM. Therefore, the Acting 

Chairman, on behalf of the Commission, 

hereby certifies, pursuant to 5 U.S.C. 

605(b), that these proposed regulations 

will not have a significant economic 

impact on a substantial number of small 

entities. Nonetheless, the Commission 

specifically requests comment on the 

impact these proposed rules may have 

on small entities. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(‘‘PRA’’) (44 U.S.C. 3501 et seq. (Supp. 

I 1995)) imposes certain requirements 

on federal agencies (including the 

Commission) in connection with their 

conducting or sponsoring any collection 

of information as defined by the PRA. 

While the proposed rule discussed 

herein has no burden, the group of rules 

(3038–0023, Rules, Regulations and 

Forms for Domestic and Foreign Futures 

and Options Related to Registration 

with the Commission) of which it is a 

part has the following burden: 

Average Burden Hours per Response: 

18.11. 

Number of Respondents: 76,750. 

Frequency of Response: Annually and 

on occasion. 

The Office of Management and Budget 

(‘‘OMB’’) approved the collection of 

information associated with this group 

of rules on August 17, 2004. Copies of 

the OMB-approved information 

collection submission are available from 


pwalker on PROD1PC69 with PROPOSALS
4502 Federal Register / Vol. 73, No. 17 / Friday, January 25, 2008 / Proposed Rules 

the CFTC Clearance Officer, 1155 21st 

Street, NW., Washington, DC 20581, 

(202) 418–5160. 

C. Costs and Benefits of the Proposed 

Rules 

Section 15(a) of the Act requires the 

Commission to consider the costs and 

benefits of its actions before issuing new 

regulations under the Act. By its terms, 

Section 15(a) does not require the 

Commission to quantify the costs and 

benefits of new regulations or to 

determine whether the benefits of the 

proposed regulations outweigh their 

costs. Rather, Section 15(a) requires the 

Commission to ‘‘consider the cost and 

benefits’’ of the subject regulations. 

Section 15(a) further specifies that the 

costs and benefits of the proposed 

regulations 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 may, in its discretion, give 

greater weight to any one of the five 

enumerated areas of concern and may, 

in its discretion, 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 proposed regulations should 

foster the protection of market 

participants and the public by providing 

greater legal certainty to the commodity 

interest activities of persons located 

outside the U.S. As the activity set forth 

in the proposed regulations presently is 

permitted under staff interpretation and 

no-action, the proposed regulations 

should have no material impact from 

the standpoint of imposing costs or 

creating benefits, on efficiency, 

competitiveness and financial integrity 

of financial markets, price discovery, 

sound risk management practices, or 

any other public interest considerations. 

List of Subjects 

17 CFR Part 3 

Definitions, Foreign futures, 

Consumer protection, Foreign options, 

Registration requirements. 

17 CFR Part 30 

Definitions, Foreign futures, 

Consumer protection, Foreign options, 

Registration requirements. 

In consideration of the foregoing, and 

pursuant to the authority contained in 

the Commodity Exchange Act and, in 

particular, sections 2(a)(1), 4(b), 4c and 

8a thereof, 7 U.S.C. 2, 6(b), 6c and 12a 

(1982), and pursuant to the authority 

contained in 5 U.S.C. 552 and 552b 

(1982), the Commission hereby proposes 

to amend Chapter I of Title 17 of the 

Code of Federal Regulations 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, 4, 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, unless otherwise noted. 

2. Section 3.10 is amended by adding 

paragraph (c)(4) to read as follows: 

§ 3.10 Registration of futures commission 

merchants, introducing brokers, commodity 

trading advisors, commodity pool operators 

and leverage transaction merchants. 

* * * * * 

(c) Exemption from registration for 

certain persons. 

* * * * * 

(4) A person located outside the 

United States, its territories or 

possessions that is exempt from 

registration as a futures commission 

merchant in accordance with § 30.10 of 

this chapter is not required to register as 

an introducing broker in accordance 

with section 4d of the Act if: 

(i) Such a person is affiliated with a 

futures commission merchant registered 

in accordance with section 4d of the 

Act; 

(ii) Such a person introduces, on a 

fully-disclosed basis in accordance with 

§ 1.57 of this chapter, any institutional 

customer, as defined in § 1.3(g) of this 

chapter, to a registered futures 

commission merchant for the purpose of 

trading on a designated contract market 

or derivatives execution facility; 

(iii) Prior to a person located outside 

the United States, its territories or 

possessions, that is exempt from 

registration as a futures commission 

merchant pursuant to § 30.10 of this 

chapter, engaging in the introducing 

activities described in this paragraph, 

the affiliated futures commission 

merchant has filed with the National 

Futures Association (ATTN: Vice 

President, Compliance) an 

acknowledgement that it will be jointly 

and severally liable for any violations of 

the Act or the Commission’s regulations 

committed by such person in 

connection with those introducing 

activities, whether or not the affiliated 

futures commission merchant submits 

for clearing any trades resulting from 

those introducing activities; and 

(iv) Such person does not solicit any 

person located in the United States, its 

territories or possessions for trading on 

a designated contract market or 

derivatives transaction execution 

facility, nor does such person handle 

the customer funds of any person 

located in the United States, its 

territories or possessions for the purpose 

of trading on any designated contract 

market or derivatives transaction 

execution facility. 

(v) For the purposes of this paragraph, 

a person shall be affiliated with a 

futures commission merchant if such a 

person: 

(A) Owns 50 percent or more of the 

futures commission merchant; 

(B) Is owned 50 percent or more by 

the futures commission merchant; or 

(C) Is owned 50 percent or more by a 

third person that also owns 50 percent 

or more of the futures commission 

merchant. 

* * * * * 

PART 30—FOREIGN FUTURES AND 

FOREIGN OPTIONS TRANSACTIONS 

3. The authority citation for part 30 

continues to read as follows: 

Authority: 7 U.S.C. 1a, 2, 4, 6, 6c, and 12a, 

unless otherwise noted. 

§ 30.8 [Removed and reserved] 

4. Section 30.8 is removed and 

reserved: 

Dated: January 15, 2008. 

By the Commission. 

David Stawick, 

Secretary of the Commission. 

[FR Doc. E8–979 Filed 1–24–08; 8:45 am] 

BILLING CODE 6351–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 70 

[EPA–R05–OAR–2007–1198; FRL–8521–4] 

State Operating Permits Program; 

Ohio; Revision to the Acid Rain 

Regulations 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: EPA proposes to approve into 

the Ohio operating permits program 

revisions submitted by the State of Ohio 

for the purpose of amending the Acid 

Rain Permits and Compliance portion of 

the program. The changes made to OAC 

3745–103, which comprises the 

revisions, include rules for phase II acid 

rain permits and new information on 

items incorporated by reference. 

DATES: Comments must be received on 

or before February 25, 2008. 


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