66598 Federal Register / Vol. 74, No. 240 / Wednesday, December 16, 2009 / Proposed Rules 

1 7 U.S.C. 24. 

2 17 CFR 190.04(d)(2). 

and Procedures (44 FR 11034; February 

26, 1979); and (3) does not warrant 

preparation of a regulatory evaluation as 

the anticipated impact is so minimal. 

Because this is a routine matter that will 

only affect air traffic procedures and air 

navigation, it is certified that this rule, 

when promulgated, will not have a 

significant economic impact on a 

substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

The FAA’s authority to issue rules 

regarding aviation safety is found in 

Title 49 of the United States Code. 

Subtitle 1, Section 106 describes the 

authority of the FAA Administrator. 

Subtitle VII, Aviation Programs, 

describes in more detail the scope of the 

agency’s authority. 

This rulemaking is promulgated 

under the authority described in 

Subtitle VII, Part A, Subpart 1, Section 

40103, Sovereignty and use of airspace. 

Under that section, the FAA is charged 

with prescribing regulations to ensure 

the safe and efficient use of the 

navigable airspace. This regulation is 

within the scope of that authority 

because it proposes to revise Class E 

airspace at Scammon Bay Airport, 

Scammon Bay, AK, and represents the 

FAA’s continuing effort to safely and 

efficiently use the navigable airspace. 

List of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (air). 

The Proposed Amendment 

In consideration of the foregoing, the 

Federal Aviation Administration 

proposes to amend 14 CFR part 71 as 

follows: 

PART 71—DESIGNATION OF CLASS A, 

CLASS B, CLASS C, CLASS D, AND 

CLASS E AIRSPACE AREAS; AIR 

TRAFFIC SERVICE ROUTES; AND 

REPORTING POINTS 

1. The authority citation for 14 CFR 

part 71 continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40103, 40113, 

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– 

1963 Comp., p. 389. 

§ 71.1 [Amended] 

2. The incorporation by reference in 

14 CFR 71.1 of Federal Aviation 

Administration Order 7400.9T, Airspace 

Designations and Reporting Points, 

signed August 27, 2009, and effective 

September 15, 2009, is to be amended 

as follows: 

* * * * * 

Paragraph 6005 Class E Airspace Extending 

Upward From 700 Feet or More Above the 

Surface of the Earth. 

* * * * * 

AAL AK E5 Scammon Bay, AK [Revised] 

Scammon Bay Airport, AK 

(Lat. 61°50′40′′ N., long. 165°34′25′′ W.) 

That airspace extending upward from 700 

feet above the surface within a 6.3-mile 

radius of the Scammon Bay Airport, AK; and 

that airspace extending upward from 1,200 

feet above the surface within a 73-mile radius 

of the Scammon Bay Airport, AK. 

* * * * * 

Issued in Anchorage, AK, on December 3, 

2009. 

Michael A. Tarr, 

Acting Manager, Alaska Flight Services 

Information Area Group. 

[FR Doc. E9–29846 Filed 12–15–09; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 190 

RIN 3038–AC90 

Operation, in the Ordinary Course, of 

a Commodity Broker in Bankruptcy 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Commodity Futures 

Trading Commission (the 

‘‘Commission’’) proposes amending its 

regulations (17 CFR Chapter 1, 

hereinafter, the ‘‘Regulations’’) 

regarding the operation of a commodity 

broker in bankruptcy, in order to permit 

the trustee in such bankruptcy to 

operate, with the written permission of 

the Commission, the business of such 

commodity broker in the ordinary 

course, including the purchase or sale of 

new commodity contracts on behalf of 

the customers of such commodity 

broker under appropriate circumstances, 

as determined by the Commission. 

DATES: Submit comments on or before 

January 15, 2010. 

ADDRESSES: You may submit comments, 

identified by RIN number, by any of the 

following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Agency Web Site: http:// 

www.cftc.gov. Follow the instructions 

for submitting comments on the Web 

site. 

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

the RIN number in the subject line of 

the message. 

• Fax: 202–418–5521. 

• Mail: David A. Stawick, Secretary of 

the Commission, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street, NW., 

Washington, DC 20581. 

• Hand Delivery/Courier: Same as 

mail above. 

FOR FURTHER INFORMATION CONTACT: 

Robert B. Wasserman, Associate 

Director, Division of Clearing and 

Intermediary Oversight, 202–418–5092, 

rwasserman@cftc.gov; or Nancy 

Schnabel, Special Counsel, Division of 

Clearing and Intermediary Oversight, 

202–418–5344, nschnabel@cftc.gov; 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION

I. Authority of the Commission To 

Promulgate and Amend Regulation 

190.04(d) 

The Commission is empowered by 

Section 20 of the Commodity Exchange 

Act (the ‘‘Act’’) to provide 

‘‘[n]otwithstanding title 11 of the United 

States Code * * * with respect to a 

commodity broker that is a debtor under 

chapter 7 of title 11 of the United States 

Code, by rule or regulation * * * (3) the 

method by which the business of such 

commodity broker is to be conducted or 

liquidated after the date of the filing of 

the petition under such chapter, 

including the payment and allocation of 

margin with respect to commodity 

contracts not specifically identifiable to 

a particular customer pending their 

orderly liquidation.’’ 1

The Commission exercised such 

power to promulgate Regulation 

190.04(d), which specifies the 

procedures that a trustee must follow in 

liquidating open commodity contracts 

carried by a commodity broker in 

bankruptcy. Similarly, the Commission 

will exercise such power when 

amending Regulation 190.04(d). 

Currently, Regulation 190.04(d)(2) 

denies a trustee the authority to 

purchase or sell new commodity 

contracts on behalf of customers of a 

commodity broker in bankruptcy, 

except to: (1) Offset an open commodity 

contract; (2) transfer any transferable 

notice (received by either the trustee or 

the commodity broker) applicable to an 

open commodity contract; and (3) cover, 

in its discretion and with the approval 

of the Commission, inventory or 

commodity contracts of the commodity 

broker that cannot be immediately 

liquidated due to market conditions 

(including price limits).2

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Federal Register / Vol. 74, No. 240 / Wednesday, December 16, 2009 / Proposed Rules 66599 

3 46 FR 57535, 57536 (November 24, 1981). 

4 In general, commodity brokers are required to 

guarantee all customer positions that they carry, as 

well as to use their own capital to cover the debit 

balance of any customer in an omnibus segregated 

account that they maintain, in order to prevent the 

commodity broker from using the property 

belonging to other customers to margin, guarantee, 

or secure the positions of the customer incurring 

such debit. See Section 4d of the Act (7 U.S.C. 6d). 

See also CFTC Letter No. 00–106 (November 22, 

2000) (stating that a commodity broker that is a 

futures commission merchant (‘‘FCM’’) must cover 

any deficit in the customer segregated account with 

its own funds or property, and not the funds or 

property of other customers). 

5 In the Proposing Release, the Commission 

included the following version of Regulation 

190.04(d)(2) (referenced in the Proposing Release as 

Regulation 190.04(d)(3)): Nothing in this Part shall 

be interpreted to permit the trustee to purchase new 

commodity contracts for customers of the debtor: 

Provided, however, That to prevent material 

erosion in value, the trustee may, in its discretion 

and with the approval of the Commission, cover 

uncovered inventory or commodity contracts of the 

debtor which cannot be liquidated immediately 

because of limit moves or other market conditions. 

46 FR 57353, 57561 (November 24, 1981). 

However, in the adopting release to Regulation Part 

190 (the ‘‘Adopting Release’’), the Commission 

removed the reference to ‘‘material erosion in 

value’’ in proposed Regulation 190.04(d)(2), in 

response to a comment that such reference would 

‘‘have limited the cases in which cover transactions 

could be sought by the trustee.’’ Nevertheless, the 

Commission reiterated in the Adopting Release that 

the primary purpose of Regulation 190.04(d)(2) was 

to prevent a ‘‘material erosion in value’’ of 

uncovered inventory or commodity contracts, by 

stating that ‘‘the Commission * * * believes cover 

transactions would be limited to this purpose.’’ 48 

FR 8716, 8729 (March 1, 1983). 

6Regulation 190.10(d) would apply to the 

proposed Amendment. Regulation 190.10(d) states: 

Until such time as the Commission orders 

otherwise, the Commission hereby delegates to the 

Director of the Division of Clearing and 

Intermediary Oversight, and to such members of the 

Commission’s staff acting under his direction as he 

may designate, all the functions of the Commission 

set forth in this part except the authority to approve 

or disapprove a withdrawal or settlement of a 

commodity account by a public customer pursuant 

to § 190.06(g)(3). 

7The Bankruptcy Code permits a solvent entity 

to legally file for relief under Chapter 7 of the 

Bankruptcy Code. See Collier on Bankruptcy 

¶ 109.03[2]. 

8See In re: Refco, LLC, No. 05–60134–rdd, Docket 

No. 5 (Bankr. S.D.N.Y. Nov. 25, 2005). 

II. Proposed Amendment To Allow the 

Trustee To Operate, in the Ordinary 

Course, a Commodity Broker in 

Bankruptcy 

A. Background 

In the proposing release to the 

original Regulation Part 190 (the 

‘‘Proposing Release’’), the Commission 

specified the purposes that it intended 

Regulation Part 190 to achieve, which 

included: 

[T]o limit the period during which the 

bankruptcy estate is at risk from fluctuations 

in value of the commodity contracts and 

other property contained therein; * * * to 

maximize recovery in kind; and * * * to 

provide an understandable and workable 

method for operating the estate pending 

liquidation.3

In the typical case, a commodity 

broker in bankruptcy would be 

insolvent. If a commodity broker is 

insolvent, then it would not have the 

capital necessary for operating its 

business, including for supporting the 

credit of its customers, or for otherwise 

performing on its obligations.4 Thus, 

preventing a trustee from purchasing or 

selling new commodity contracts, 

whether for the commodity broker or 

the customers thereof, would generally 

(i) minimize the risk of loss to 

customers of the commodity broker, and 

(ii) therefore, maximize the scope of 

recovery for such customers. 

However, certain purchases or sales of 

new commodity contracts may actually 

reduce the risk of loss to customers of 

a commodity broker in bankruptcy. 

Therefore, when the Commission 

promulgated Regulation Part 190 in 

1983, the Commission created certain 

exceptions to Regulation 190.04(d)(2), as 

described above. By creating such 

exceptions, the Commission 

acknowledged that the trustee must be 

allowed to purchase or sell new 

commodity contracts, whether for the 

commodity broker or the customers 

thereof, in order to: (1) Liquidate open 

commodity contracts; or (2) transfer an 

incipient delivery obligation of an open 

commodity contract. Facilitating such 

liquidation would limit the period in 

which the estate of the commodity 

broker is at risk for fluctuations in 

value. Permitting such transfer would 

tend to maximize recovery of customers 

of the commodity broker, by allowing 

the trustee to minimize or avoid claims 

for losses resulting from the inability of 

the estate of the commodity broker to 

fulfill obligations to take or effect 

delivery on open commodity contracts. 

In addition to the exceptions 

enumerated above, the Commission 

acknowledged that, if the trustee cannot 

immediately liquidate the inventory or 

open commodity contracts of a 

commodity broker in bankruptcy, 

because of market conditions (including 

price limits), then the trustee should be 

allowed to purchase or sell new 

commodity contracts, in order to cover 

or partially cover such inventory or 

commodity contracts. The Commission 

intended to permit such cover or partial 

cover in order to prevent, among other 

things, the ‘‘material erosion in value’’ 

of such inventory or commodity 

contracts, which would diminish the 

recovery of the customers of the 

commodity broker.5

B. The Proposed Amendment 

The Commission is proposing to 

amend Regulation 190.04(d) to allow the 

trustee, under appropriate 

circumstances, to operate the business 

of a commodity broker in bankruptcy in 

the ordinary course, including the 

purchase or sale of new commodity 

contracts on behalf of the customers of 

the debtor (the ‘‘Amendment’’). The 

appropriateness of a particular set of 

circumstances would be determined by 

the Commission in its discretion, and 

such operation would require the 

written permission of the Commission. 

Pursuant to Regulation 190.10(d), the 

Commission has delegated all the 

functions of the Commission in 

Regulation Part 190, except one, to the 

Director of the Division of Clearing and 

Intermediary Oversight, and therefore, 

under this proposed amendment, the 

Director would also have the power to 

make such determination and to issue 

such written permission.6

C. Rationale for the Proposed 

Amendment 

Recently, events have demonstrated 

that a commodity broker may enter into 

bankruptcy while not insolvent.7 For 

example, on Friday, November 25, 2005, 

after the closing of the relevant markets, 

Refco, LLC (‘‘Refco’’) filed for relief 

under Subchapter IV of Chapter 7 of the 

Bankruptcy Code, primarily to satisfy a 

precondition for the sale of its FCM 

business to a third party. Previously, the 

United States Bankruptcy Court for the 

Southern District of New York (‘‘District 

Court’’) had approved the sale of that 

FCM business. According to the 

agreement governing the sale, the third 

party would give the parent entities of 

Refco (i) a specified sum and (ii) the 

opportunity to retain the net regulatory 

capital of Refco.8

Shortly after Refco filed for relief 

under Subchapter IV of Chapter 7 of the 

Bankruptcy Code, the sale of its FCM 

business to a third party was 

consummated. Prior to the re-opening of 

the relevant markets on Sunday, 

November 27, 2005, all of the customer 

accounts of Refco, comprising one 

hundred percent of the net equity of 

each customer, were transferred to the 

third party. 

During the Refco proceedings, it was 

practicable to transfer customer 

accounts when all relevant markets 

were closed. However, it may not 

always be so practicable. For example, 

on Friday, September 19, 2008, prior to 

the closing of the relevant markets, 

Lehman Brothers Inc. (‘‘Lehman’’) 

became the subject of a proceeding 

under the Securities Investor Protection 

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66600 Federal Register / Vol. 74, No. 240 / Wednesday, December 16, 2009 / Proposed Rules 

9 15 U.S.C. 78aaa–111. 

10See In re: Lehman Brothers Holdings Inc., et al., 

No. 08–13555, Docket No. 258 (Bankr. S.D.N.Y. 

Sept. 20, 2008). 

11See S.I.P.C. v. Lehman Brothers, Inc., No. 08– 

8119, Docket No. 3 (S.D.N.Y. September 19, 2008). 

12 46 FR 57535, 57536 (November 24, 1981). 13 5 U.S.C. 601 et seq. 

14The proposed Amendment may apply, in the 

future, to other commodity brokers that execute 

trades and carry accounts for clearing on behalf of 

customers—namely, commodity options dealers 

and leverage transaction merchants. Currently, no 

such commodity brokers exist. Therefore, even if 

such commodity brokers would constitute ‘‘small 

entities’’ for purposes of the RFA, the proposed 

Amendment can have no current impact on such 

commodity brokers. However, it is unlikely that 

such commodity brokers would constitute ‘‘small 

entities’’ for purposes of the RFA. In defining 

‘‘small entities’’ for the purpose of the RFA, the 

Commission excluded FCMs based on the fiduciary 

nature of FCM-customer relationships, as well as 

the minimum financial requirements that apply to 

FCMs. See 47 FR 18618, 18619 (Apr. 30, 1982). 

Certain parts of this rationale would also be 

applicable to commodity options dealers, foreign 

futures commission merchants, and leverage 

transaction merchants. 

15 47 FR 18618 (Apr. 30, 1982). 

16 Id. at 18619. 

17 44 U.S.C. 3501 et seq. 

18 7 U.S.C. 19. 

Act of 1970 (‘‘SIPA’’),9 primarily to 

satisfy a precondition for the sale of its 

securities broker-dealer business and its 

FCM business to a third party. On 

Saturday, September 20, 2008, the 

District Court approved the sale of such 

securities broker-dealer business and 

FCM business, in exchange for the third 

party giving the parent of Lehman a 

specified sum.10 Shortly after such 

approval, the sale was consummated. 

Soon after the consummation, the 

customer accounts of Lehman began to 

be transferred to the third party. 

However, because the Lehman 

proceedings under SIPA had 

commenced in District Court prior to 

the closing of the relevant markets, 

customers of Lehman would have been 

unable to manage their accounts, absent 

a provision in the Order issued by the 

District Court permitting the trustee to 

conduct business in the ordinary 

course.11

The Commission is proposing the 

Amendment to enable customers to 

manage their accounts, after their 

commodity broker enters into 

bankruptcy and prior to the transfer of 

their accounts, in certain circumstances. 

As the Refco and Lehman proceedings 

illustrate, there may be cases where a 

transfer of customer accounts has been 

arranged pre-bankruptcy, and where a 

commodity broker in bankruptcy may 

nevertheless possess the capital 

necessary to continue operating its 

business in the ordinary course (e.g., to 

continue supporting the credit of its 

customers and performing on its other 

obligations), pending imminent transfer 

of customer accounts to another 

commodity broker. Therefore, 

permitting the trustee to operate such 

business in the ordinary course may 

advance the purpose of Regulation Part 

190—namely, ‘‘to provide an 

understandable and workable method 

for operating the estate pending 

liquidation.’’ 12 Thus, the proposed 

Amendment is consistent with the past 

practice of the Commission in creating 

exemptions to Regulation 190.04(d)(2) 

when necessary to advance the purposes 

of Regulation Part 190. Additionally, 

allowing customers to manage their 

accounts, as much as possible, as if the 

commodity broker had not entered into 

bankruptcy would be in the best 

interests of both the customers and the 

relevant markets in general. 

Whether a commodity broker in 

bankruptcy has sufficient capital to 

continue operating its business in the 

ordinary course is inherently a factual 

question. Therefore, the Commission 

reserves the power to limit the 

application of the proposed 

Amendment, in its discretion, by: (1) 

Requiring the trustee to obtain the 

written permission of the Commission; 

and (2) determining the circumstances 

under which the trustee may purchase 

or sell new commodity contracts on 

behalf of customers of the commodity 

broker in bankruptcy. 

In deciding whether to apply the 

proposed Amendment to a particular 

commodity broker in bankruptcy, the 

Commission may consider the following 

factors: (1) Whether the commodity 

broker has entered into an agreement 

providing for the imminent transfer of 

its customer accounts to an entity that 

is ready, willing and able to accept such 

transfer promptly; (2) whether the 

commodity broker has sufficient capital, 

at the time it becomes subject to 

bankruptcy proceedings, to continue 

operating its business in the ordinary 

course pending the transfer; and (3) 

whether a commodity broker will have 

sufficient capital, after the sale of its 

assets (including its FCM business), to 

continue operating its business in the 

ordinary course until all of its customer 

accounts have been transferred. The 

Commission anticipates that future 

bankruptcies of commodity brokers may 

present new factors for its 

consideration, and the proposed 

Amendment is therefore intended to 

provide the Commission with flexibility 

to consider such new factors in its 

discretion. 

III. Related Matters 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(‘‘RFA’’) 13 requires Federal agencies, in 

promulgating regulations, to consider 

the impact of those regulations on small 

businesses. As mentioned above, the 

proposed Amendment provides a 

limited exception to Regulation 

190.04(d)(2), by permitting a trustee to 

operate, with the written permission of 

the Commission, the business of a 

commodity broker in bankruptcy in the 

ordinary course, including the purchase 

or sale of new commodity contracts on 

behalf of the customers of such 

commodity broker. The proposed 

Amendment does not impose a 

regulatory burden on either a 

commodity broker pre-bankruptcy or a 

trustee post-bankruptcy. Moreover, the 

proposed Amendment will affect only 

FCMs (including certain foreign futures 

commission merchants).14 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.15 The Commission has previously 

determined that FCMs are not small 

entities for the purpose of the RFA.16

Accordingly, pursuant to 5 U.S.C. 

605(b), the Chairman certifies, on behalf 

of the Commission, that the proposed 

Amendment will not have a significant 

economic impact on a substantial 

number of small entities. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act 

(‘‘PRA’’) 17 imposes certain 

requirements on Federal agencies in 

connection with their conducting or 

sponsoring any collection of 

information as defined by the PRA. The 

proposed Amendment does not require 

the new collection of information on the 

part of any entities that would be 

subject to the proposed Amendment. 

Accordingly, for purposes of the PRA, 

the Commission certifies that the 

proposed Amendment, if promulgated 

in final form, would not impose any 

new reporting or recordkeeping 

requirements. 

C. Cost-Benefit Analysis 

Section 15(a) of the Act 18 requires 

that the Commission, before 

promulgating a regulation under the Act 

or issuing an order, consider the costs 

and benefits of its action. By its terms, 

Section 15(a) of the Act does not require 

the Commission to quantify the costs 

and benefits of a new regulation or to 

determine whether the benefits of the 

regulation outweigh its costs. Rather, 

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Federal Register / Vol. 74, No. 240 / Wednesday, December 16, 2009 / Proposed Rules 66601 

Section 15(a) of the Act simply requires 

the Commission to ‘‘consider the costs 

and benefits’’ of its action. 

Section 15(a) of the Act further 

specifies that costs and benefits shall be 

evaluated in light of the following 

considerations: (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. 

Accordingly, the Commission could, in 

its discretion, give greater weight to any 

one of the five considerations and 

could, in its discretion, determine that, 

notwithstanding its costs, a particular 

regulation was 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 Commission has evaluated the 

costs and benefits of the proposed 

Amendment, in light of the specific 

considerations identified in Section 

15(a) of the Act, as follows: 

1. Protection of Market Participants and 

the Public 

In the event of the bankruptcy of a 

commodity broker, the proposed 

Amendment would benefit the 

customers of such commodity broker, by 

providing them with the opportunity, 

under certain circumstances, to manage 

their accounts prior to the transfer of 

such accounts to a new commodity 

broker. 

2. Efficiency and Competition 

The proposed Amendment is not 

expected to have an effect on efficiency 

or competition. 

3. Financial Integrity of Futures Markets 

and Price Discovery 

As mentioned above, the proposed 

Amendment will promote financial 

integrity of the futures markets by 

providing customers of a commodity 

broker in bankruptcy with the 

opportunity, under certain 

circumstances, to manage their accounts 

prior to the transfer of such accounts to 

a new commodity broker. 

4. Sound Risk Management Practices 

The proposed Amendment is not 

expected to have a direct effect on the 

risk management practices of 

commodity brokers. 

5. Other Public Considerations 

Recent events, such as the Refco and 

Lehman proceedings, have 

demonstrated that the proposed 

Amendment is necessary and prudent. 

Accordingly, after considering the five 

factors enumerated in the Act, the 

Commission has determined to propose 

the regulations set forth below. 

List of Subjects in 17 CFR Part 190 

Bankruptcy, Brokers, Commodity 

futures. 

For the reasons stated in the 

preamble, the Commission proposes to 

amend 17 CFR part 190 as follows: 

PART 190—BANKRUPTCY 

1. The authority citation for Part 190 

continues to read as follows: 

Authority: 7 U.S.C. 1a, 2, 4a, 6c, 6d, 6g, 7a, 

12, 19, and 24, and 11 U.S.C. 362, 546, 548, 

556, and 761–766, unless otherwise noted. 

2. Add new paragraph (d)(3) to 

§ 190.04 to read as follows: 

§ 190.04 Operation of the debtor’s estate— 

general. 

* * * * * 

(d) * * * 

(3) Exception to liquidation only. 

Notwithstanding paragraph (d)(2) of this 

section, the trustee may, with the 

written permission of the Commission, 

operate the business of the debtor in the 

ordinary course, including the purchase 

or sale of new commodity contracts on 

behalf of the customers of the debtor 

under appropriate circumstances, as 

determined by the Commission. 

* * * * * 

Issued in Washington, DC, on December 9, 

2009 by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

[FR Doc. E9–29730 Filed 12–15–09; 8:45 am] 

BILLING CODE P 

LIBRARY OF CONGRESS 

Copyright Royalty Board 

37 CFR Part 382 

[Docket No. 2006–1 CRB DSTRA] 

Determination of Rates and Terms for 

Preexisting Subscription Services and 

Satellite Digital Audio Radio Services 

AGENCY: Copyright Royalty Board, 

Library of Congress. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Copyright Royalty Judges 

are publishing for comment proposed 

regulations governing the rates for the 

satellite digital audio radio services’ use 

of the ephemeral recordings statutory 

license under the Copyright Act for the 

period 2007 through 2012. 

DATES: Comments and objections, if any, 

are due no later than January 15, 2010. 

ADDRESSES: Comments and objections 

may be sent electronically to 

crb@loc.gov. In the alternative, send an 

original, five copies and an electronic 

copy on a CD either by mail or hand 

delivery. Please do not use multiple 

means of transmission. Comments and 

objections may not be delivered by an 

overnight delivery service other than 

U.S. Postal Service Express Mail. If by 

mail (including overnight delivery), 

comments and objections must be 

addressed to: Copyright Royalty Board, 

P.O. Box 70977, Washington, DC 20024– 

0977. If hand delivered by a private 

party, comments and objections must be 

brought to the Copyright Office Public 

Information Office, Library of Congress, 

James Madison Memorial Building, 

Room LM–401, 101 Independence 

Avenue, SE., Washington, DC 20559– 

0600, between 8:30 a.m. and 5 p.m. If 

delivered by a commercial courier, 

comments and objections must be 

delivered between 8:30 a.m. and 4 p.m. 

to the Congressional Courier Acceptance 

Site located at 2nd and D Street, NE., 

Washington, DC, and the envelope must 

be addressed as follows: Copyright 

Royalty Board, Library of Congress, 

James Madison Memorial Building, 

Room LM–403, 101 Independence 

Avenue, SE., Washington, DC 20559– 

0600. 

FOR FURTHER INFORMATION CONTACT: 

Richard Strasser, Senior Attorney, or 

Gina Giuffreda, Attorney Advisor, by 

telephone at (202) 707–7658 or by 

e-mail at crb@loc.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

On January 24, 2008, the Copyright 

Royalty Judges published in the Federal 

Register their determination of royalty 

rates and terms under the statutory 

licenses under Sections 112(e) and 114 

of the Copyright Act for the period 2007 

through 2012 for satellite digital audio 

radio services (‘‘SDARS’’). 73 FR 4080. 

In SoundExchange, Inc. v. Librarian of 

Congress, 571 F.3d 1220, 1226 (DC Cir. 

2009), the U.S. Court of Appeals for the 

DC Circuit affirmed the Judges’ 

determination in all but one respect, 

remanding to the Copyright Royalty 

Judges the single matter of specifying a 

royalty for the use of the ephemeral 

recordings statutory license under 

Section 112(e) of the Copyright Act. By 

order dated October 22, 2009, the 

Copyright Royalty Judges established a 

period commencing on November 2, 

2009, and concluding on December 2, 

2009, for Sound Exchange, Inc. and 

Sirius XM Radio Inc. (collectively, the 

‘‘Parties’’) to negotiate and submit a 

settlement of the ephemeral royalty rate 

WReier-Aviles on DSKGBLS3C1PROD with PROPOSALS