Federal Register / Vol. 73, No. 109 / Thursday, June 5, 2008 / Notices 31979 

1 7 U.S.C. 1 et seq. 

2 7 U.S.C. 6(c). 

3OneChicago is jointly owned by the CME Group, 

Inc., IB Exchange Corp., and the Chicago Board 

Options Exchange. 

4 In accordance with Section 2(a)(9)(B)(i) of the 

Act, Commission staff forwarded the new contract 

filing to the Securities and Exchange Commission, 

the U.S. Department of Treasury and the Board of 

Governors of the Federal Reserve System on 

October 29, 2007. No comments were received in 

response to this correspondence. On January 4, 

2008, the Exchange filed a rule amendment 

concerning minimum price fluctuations to 

supplement its initial submission. 

5 7 U.S.C. 7a–2(c)(2), 17 CFR 40.5, 41.23. 

6Commission Regulations 40.5(c) and 40.7(a)(1) 

allow the Commission, and certain staff acting 

pursuant to delegated authority, to extend the 45- 

day fast-track review period by an additional 45 

days if a product raises novel or complex issues 

requiring additional time for review. 17 CFR 

40.5(c), 40.7(a)(1). 

7Section 5c(c) of the Act requires the 

Commission to approve any designated contract 

market instrument submitted for approval within 90 

days after the submission of the request unless (1) 

it finds that the trading or clearing of the instrument 

would violate the Act (or the Commission’s 

regulations), or (2) the person submitting the 

request for approval agrees to extend the period of 

review beyond the 90 day time limitation. 

8Proposed Exemptive Order for ST [SPDR] Gold 

Futures Contracts, 73 FR 13876 (March 14, 2008) 

(Proposed Order). Effective May 21, 2008, the 

streetTRACKS Gold Trust has been restyled as the 

SPDR Gold Trust. Consequently, on May 22, 2008 

the Exchange filed a rule amendment to reflect that 

change. 

9A thorough summary of the Trust’s operations 

is provided in the Proposed Order. 

SYSTEM MANAGER(S) AND ADDRESS: 

SIRA Customer Outreach Manager, 

United States Patent and Trademark 

Office, P.O. Box 1450, Alexandria, VA 

22313–1450. 

NOTIFICATION PROCEDURE: 

Information about the records 

contained in this system may be 

obtained by sending a request in 

writing, signed, to the SIRA Customer 

Outreach Manager at the address above. 

When requesting notification of or 

access to records covered by this notice, 

requesters should provide their name 

and electronic mail address in 

accordance with the inquiry provisions 

appearing in 37 CFR 102 subpart B. 

RECORD ACCESS PROCEDURES: 

Requests from individuals should be 

addressed to the SIRA Customer 

Outreach Manager at the address above. 

CONTESTING RECORD PROCEDURES: 

The general provisions for access, 

contesting contents, and appealing 

initial determinations by the individual 

concerned appear in 37 CFR 102 subpart 

B. Requests from individuals should be 

addressed to the SIRA Customer 

Outreach Manager at the address above. 

RECORD SOURCE CATEGORIES: 

Subject individuals and those 

authorized by the individual to furnish 

information. 

EXEMPTIONS CLAIMED FOR THE SYSTEM: 

None. 

Dated: May 29, 2008. 

Susan K. Fawcett, 

Records Officer, USPTO, Office of the Chief 

Information Officer, Customer Information 

Services Group, Public Information Services 

Division. 

[FR Doc. E8–12564 Filed 6–4–08; 8:45 am] 

BILLING CODE 3510–16–P 

COMMODITY FUTURES TRADING 

COMMISSION 

RIN 3038–AC52 

Exemptive Order for SPDR Gold 

Futures Contracts 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final order. 

SUMMARY: The Commodity Futures 

Trading Commission (Commission or 

CFTC) is exempting certain transactions 

in physically delivered futures contracts 

based on SPDR Gold Shares (SPDR

gold futures contracts) from those 

provisions of the Commodity Exchange 

Act (CEA or Act),1 and the 

Commission’s regulations thereunder, 

that are inconsistent with the trading 

and clearing of SPDR gold futures 

contracts as security futures. The 

exemption is conditioned on the 

compliance of transactions in SPDR

gold futures contracts with the 

requirements established for the trading 

and clearing of security futures. The 

authority for the issuance of this 

exemption is found in Section 4(c) of 

the Act.2

DATES: Effective June 5, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Bruce Fekrat, Special Counsel, Office of 

the Director (telephone 202.418.5578, 

e-mail bfekrat@cftc.gov), Division of 

Market Oversight, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street, NW., 

Washington, DC 20581. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In correspondence dated October 26, 

2007, OneChicago, LLC (OneChicago or 

the Exchange),3 a board of trade 

designated with the Commission 

pursuant to Sections 5 and 6(a) of the 

Act, proposed and requested 

Commission approval to list for trading 

SPDR gold futures contracts as security 

futures.4 OneChicago is noticeregistered with the Securities and 

Exchange Commission (SEC) as a 

national securities exchange under 

Section 6(g) of the Securities Exchange 

Act of 1934 (’34 Act) for the purpose of 

listing and trading security futures 

products. The approval request was 

filed pursuant to Section 5c(c)(2) of the 

Act and Commission Regulations 40.5 

and 41.23.5 OneChicago submitted its 

request for approval under the 45-day 

fast-track review period established by 

Commission Regulation 40.5. The fasttrack review period for the Exchange’s 

submission was scheduled to expire on 

December 10, 2007. The review period 

was extended by the Director of the 

Division of Market Oversight, pursuant 

to Regulations 40.5(c) and 40.7(a)(1), to 

January 24, 2008 on the grounds that the 

SPDR gold futures contracts raised 

novel and complex issues that required 

additional time for review.6 By letter 

dated January 23, 2008, the Exchange, 

upon the request of the Commission’s 

staff, voluntarily extended the review 

period to March 17, 2008. By letter 

dated February 26, 2008, the Exchange 

voluntarily extended the review period 

to April 30, 2008.7 By letter dated April 

28, 2008, the Exchange further 

voluntarily extended the review period 

to May 30, 2008. 

On March 14, 2008, the Commission 

published for pubic comment in the 

Federal Register a proposal to exempt, 

pursuant to Section 4(c) of the Act, 

SPDR gold futures contracts from those 

provisions of the CEA, and the 

Commission’s regulations thereunder, 

that are inconsistent with the trading 

and clearing of SPDR gold futures 

contracts as security futures.8 The 

Commission proposed to issue the 

exemption in order to facilitate the 

Exchange’s request for contract 

approval. No formal comments were 

submitted in response to the 

Commission’s publication.9

II. CEA Section 4(c) Exemptive Order 

In accordance with the Memorandum 

of Understanding entered into between 

the CFTC and the SEC on March 11, 

2008, and in particular the addendum 

thereto concerning Principles Governing 

the Review of Novel Derivative Products, 

the Commission believes that novel 

derivative products that implicate areas 

of overlapping regulatory concern 

should be permitted to trade in either or 

both a CFTC or SEC regulated 

environment, in a manner consistent 

with laws and regulations (including the 

appropriate use of all available 

exemptive and interpretive authority). 

The Commission has determined to use 


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31980 Federal Register / Vol. 73, No. 109 / Thursday, June 5, 2008 / Notices 

10The Commission recently issued a similar order 

with respect to exchange-traded credit default 

products. See Order Exempting the Trading and 

Clearing of Certain Credit Default Products 

Pursuant to the Exemptive Authority in Section 4(c) 

of the Commodity Exchange Act, 72 FR 32079 (June 

11, 2007). 

11Covered transactions are subject to certain 

exceptions not relevant here. 

12Section 4(c)(1) of the CEA, 7 U.S.C. § 6(c)(1), 

provides in full that: 

In order to promote responsible economic or 

financial innovation and fair competition, the 

Commission by rule, regulation, or order, after 

notice and opportunity for hearing, may (on its own 

initiative or on application of any person, including 

any board of trade designated or registered as a 

contract market or derivatives transaction execution 

facility for transactions for future delivery in any 

commodity under section 7 of this title) exempt any 

agreement, contract, or transaction (or class thereof) 

that is otherwise subject to subsection (a) of this 

section (including any person or class of persons 

offering, entering into, rendering advice or 

rendering other services with respect to, the 

agreement, contract, or transaction), either 

unconditionally or on stated terms or conditions or 

for stated periods and either retroactively or 

prospectively, or both, from any of the requirements 

of subsection (a) of this section, or from any other 

provision of this chapter (except subparagraphs 

(c)(ii) and (D) of section 2(a)(1) of this title, except 

that the Commission and the Securities and 

Exchange Commission may by rule, regulation, or 

order jointly exclude any agreement, contract, or 

transaction from section 2(a)(1)(D) of this title), if 

the Commission determines that the exemption 

would be consistent with the public interest. 

13Section 4(c)(2) of the CEA, 7 U.S.C. 6(c)(2), 

provides in full that: 

The Commission shall not grant any exemption 

under paragraph (1) from any of the requirements 

of subsection (a) of this section unless the 

Commission determines that—

(A) The requirement should not be applied to the 

agreement, contract, or transaction for which the 

exemption is sought and that the exemption would 

be consistent with the public interest and the 

purposes of this Act; and 

(B) The agreement, contract, or transaction—

(i) Will be entered into solely between 

appropriate persons; and 

(ii) Will not have a material adverse effect on the 

ability of the Commission or any contract market or 

derivatives transaction execution facility to 

discharge its regulatory or self-regulatory duties 

under this Act. 

14H.R. Conf. Rep. No. 102–978, 1992 

U.S.C.C.A.N. 3179, at 3213 (H.R. Conf. Rep.). 

15 7 U.S.C. 2(a)(1)(A). Security futures are subject 

to joint regulation by the CFTC and the SEC under 

Section 2(a)(1)(D) of the CEA, 7 U.S.C. 2(a)(1)(D). 

16 44 U.S.C. 3507(d). 

17 7 U.S.C. 19(a). 

its authority under Section 4(c) of the 

Act, as proposed, to exempt transactions 

in SPDR gold futures contracts from 

those provisions of the Act and the 

Commission’s regulations thereunder 

that, if the underlying were considered 

to be a commodity that is not a security, 

would be inconsistent with the trading 

and clearing of SPDR gold futures 

contracts as security futures.10 Section 

4(c)(1) of the CEA empowers the 

Commission to ‘‘promote responsible 

economic or financial innovation and 

fair competition’’ by exempting any 

transaction or class of transactions 11

from any of the provisions of the Act 

upon determining that the exemption 

would be consistent with the public 

interest.12 Section 4(c)(2) of the Act 

provides that the Commission may grant 

exemptions only when it determines 

that the requirements for which an 

exemption is being provided should not 

be applied to the agreements, contracts 

or transactions at issue; that the 

exemption is consistent with the public 

interest and the purposes of the Act; 

that the agreements, contracts or 

transactions will be entered into solely 

between appropriate persons; and that 

the exemption will not have a material 

adverse effect on the ability of the 

Commission or any designated contract 

market or derivatives transaction 

execution facility to discharge its 

regulatory or self-regulatory 

responsibilities under the CEA.13 With 

respect to the term ‘‘appropriate 

persons,’’ Section 4(c)(3) of the Act 

enumerates several categories of 

appropriate persons and provides in 

subparagraph (K) that the term shall 

include ‘‘[s]uch other persons that the 

Commission determines to be 

appropriate in light of * * * the 

applicability of appropriate regulatory 

protections.’’

In enacting Section 4(c) of the Act, 

Congress noted that the goal of the 

provision ‘‘is to give the Commission a 

means of providing certainty and 

stability to existing and emerging 

markets so that financial innovation and 

market development can proceed in an 

effective and competitive manner.’’ 14

SPDR gold futures contracts are novel 

instruments and the Commission 

believes that this is an appropriate case 

for issuing an exemption, as proposed, 

without making a finding as to the 

nature of these particular instruments. 

Accordingly, given the potential 

usefulness of SPDR gold futures 

contracts to the significant market for 

the Trust’s Shares, as well as all goldlinked markets, the Commission herein 

exempts transactions in SPDR gold 

futures contracts traded on OneChicago, 

and the clearing of such contracts as 

security futures, from the provisions of 

the Act, and the Commission’s 

regulations thereunder, to the extent 

necessary to permit them to be so traded 

and cleared. In the Commission’s 

opinion, the issuance of this exemptive 

order is in the public interest and is 

consistent with the purposes of the Act, 

because it will likely foster both 

financial innovation by bringing an 

innovative derivatives product to 

market, and competition by not 

potentially excluding other similarly 

innovative products from trading on 

regulated futures markets. In addition, 

SPDR gold futures contracts, when 

traded as security futures pursuant to 

this exemption and the Commission’s 

subsequent or concurrent approval of 

the Exchange’s submissions, will be 

subject to regulation by both the SEC 

and the Commission.15 The 

implementation of an exemption, under 

these circumstances, will not erode 

appropriate regulatory protections, and 

thus SPDR gold futures contracts will 

be traded by appropriate persons. Nor 

will this exemption impair the ability of 

the Commission or OneChicago to 

discharge any regulatory or selfregulatory duty under the Act. 

This Order is subject to termination or 

revision, on a prospective basis, if the 

Commission determines upon further 

information that this exemption is not 

consistent with the public interest. If the 

Commission believes such exemption 

becomes detrimental to the public 

interest, the Commission may revoke 

this Order on its own motion. 

III. Related Matters 

A. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(PRA) 16 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. 

This exemptive order does not require a 

new collection of information from any 

entity that would be subject to the order. 

B. Cost-Benefit Analysis 

Section 15(a) of the CEA, as amended 

by Section 119 of the Commodity 

Futures Modernization Act of 2000,17

requires the Commission to consider the 

costs and benefits of its action before 

issuing an order under the CEA. Section 

15(a) of the Act further specifies that 

costs and benefits shall be evaluated in 

light of the following five broad areas of 

market and public concern: protection 

of market participants and the public; 

efficiency, competitiveness, and 

financial integrity of futures markets; 

price discovery; sound risk management 

practices; and other public interest 

considerations. By its terms, Section 

15(a) does not require the Commission 

to quantify the costs and benefits of an 

order or to determine whether the 

benefits of the order outweigh its costs. 

Rather, Section 15(a) simply requires 

the Commission to ‘‘consider the costs 

and benefits’’ of its action. The 

Commission may give greater weight to 

any one of the five enumerated areas 

and could in its discretion determine 


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18Proposed Order at 13870. 

1 73 FR 21917 (April 23, 2008) 

2 7 U.S.C. 1 et seq. 

3 7 U.S.C. 6(c). 

4 7 U.S.C. 7a–1. 

5 15 U.S.C. 78q–l. 

6 7 U.S.C. 7a–2(c), 17 CFR 39.4(a), 40.5. 

7 streetTRACKS Gold Trust Shares, which 

underlie ST Gold Options, are described in greater 

detail in the ‘‘Proposed Exemptive Order for ST 

Gold Futures Contracts,’’ 73 FR 13867, 13868 

(March 14, 2008). On May 20, 2008, streetTRACKS

Gold Trust Shares were renamed SPDR Gold Trust 

Shares. See Prospectus for SPDR Gold Trust, 

available at http://www.spdrgoldshares.com/pdf/ 

SPDRGoldTrustProspectus.pdf (reviewed May 22, 

2008). 

8The request for approval concerning the ST 

Gold Options was filed effective February 4, 2008, 

and Amendment No. 1 thereto was filed effective 

March 7, 2008. See SR–OCC–2008–04 and 

Amendment No. 1. OCC has also filed these 

proposed rule changes with the SEC. See SEC 

Release No. 34–57695; File No. SR–OCC–2008–07 

(April 21, 2008), 73 FR 22452 (April 25, 2008). On 

May 22, 2008, OCC filed Amendment No. 2 to the 

request for approval, reflecting the change in the 

name of streetTRACKS Gold Trust Shares. 

9House Conf. Report No. 102–978, 1992 

U.S.C.C.A.N. 3179, 3213 (‘‘4(c) Conf. Report’’). 

that, notwithstanding potential costs, a 

particular order 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 

CEA. 

In the Proposed Order, the 

Commission analyzed the costs and 

benefits associated with the 

implementation of an exemption under 

Section 4(c) of the Act. The Commission 

invited public comment on its analysis 

of the costs and benefits associated with 

the issuance of an exemptive order 

under Section 4(c) of the Act.18 No 

comments were submitted to the 

Commission. 

After considering the factors 

presented in this release, the 

Commission has determined to issue 

this Order. 

Issued in Washington, DC, on May 30, 

2008 by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

[FR Doc. E8–12579 Filed 6–4–08; 8:45 am] 

BILLING CODE 6351–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

Order Exempting the Trading and 

Clearing of Certain Products Related to 

SPDR Gold Trust Shares 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final Order. 

SUMMARY: On April 23rd, 2008, the 

Commodity Futures Trading 

Commission (‘‘CFTC’’ or the 

‘‘Commission’’) published for public 

comment in the Federal Register 1 a 

proposal to exempt the trading and 

clearing of products called options on 

streetTRACKS  Gold Trust Shares (‘‘ST 

Gold Options’’), proposed to be traded 

on national securities exchanges, and 

cleared by The Options Clearing 

Corporation (‘‘OCC’’), from the 

provisions of the Commodity Exchange 

Act (‘‘CEA’’) 2 and Commission 

regulations thereunder to the extent 

necessary for them to be so traded and 

cleared. The Commission has 

determined to issue this Order 

essentially as proposed. Authority for 

this exemption is found in Section 4(c) 

of the CEA.3

DATES: Effective Date: May 30, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Robert B. Wasserman, Associate 

Director, 202–418–5092, 

rwasserman@cftc.gov, Division of 

Clearing and Intermediary Oversight, 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1151 21st Street, NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

The OCC is both a Derivatives 

Clearing Organization (‘‘DCO’’) 

registered pursuant to Section 5b of the 

CEA,4 and a securities clearing agency 

registered pursuant to Section 17A of 

the Securities Exchange Act of 1934 

(‘‘the ’34 Act’’).5

OCC filed with the CFTC, pursuant to 

Section 5c(c) of the CEA and 

Commission Regulations 39.4(a) and 

40.5 thereunder,6 requests for approval 

of rules and rule amendments that 

would enable OCC to clear and settle ST 

Gold Options 7 traded on national 

securities exchanges in its capacity as a 

registered securities clearing agency 

regulated by the Securities and 

Exchange Commission (‘‘SEC’’) (and not 

in its capacity as a DCO).8 Section 

5c(c)(3) provides that the CFTC must 

approve any such rules and rule 

amendments submitted for approval 

unless it finds that the rules or rule 

amendments would violate the CEA. 

II. Section 4(c) of the Commodity 

Exchange Act 

Section 4(c)(1) of the CEA empowers 

the CFTC to ‘‘promote responsible 

economic or financial innovation and 

fair competition’’ by exempting any 

transaction or class of transactions from 

any of the provisions of the CEA 

(subject to exceptions not relevant here) 

where the Commission determines that 

the exemption would be consistent with 

the public interest. The Commission 

may grant such an exemption by rule, 

regulation or order, after notice and 

opportunity for hearing, and may do so 

on application of any person or on its 

own initiative. 

In enacting Section 4(c), Congress 

noted that the goal of the provision ‘‘is 

to give the Commission a means of 

providing certainty and stability to 

existing and emerging markets so that 

financial innovation and market 

development can proceed in an effective 

and competitive manner.’’ 9 Permitting 

ST Gold Options to trade on national 

securities exchanges and be cleared on 

OCC as discussed above appears likely 

to foster both financial innovation and 

competition. In accordance with the 

Memorandum of Understanding entered 

into between the CFTC and the 

Securities and Exchange Commission 

(‘‘SEC’’) on March 11, 2008, and in 

particular the addendum thereto 

concerning Principles Governing the 

Review of Novel Derivative Products, the 

Commission believes that novel 

derivative products that implicate areas 

of overlapping regulatory concern 

should be permitted to trade in either or 

both a CFTC- or SEC-regulated 

environment, in a manner consistent 

with laws and regulations (including the 

appropriate use of all available 

exemptive and interpretive authority). 

ST Gold Options are novel 

instruments and, given their potential 

usefulness to the market, the 

Commission believes that this is an 

appropriate case for issuing an 

exemption without making a finding as 

to the nature of these particular 

instruments. 

Section 4(c)(2) provides that the 

Commission may grant exemptions only 

when it determines that the 

requirements for which an exemption is 

being provided should not be applied to 

the agreements, contracts or transactions 

at issue, and the exemption is consistent 

with the public interest and the 

purposes of the CEA; that the 

agreements, contracts or transactions 

will be entered into solely between 

appropriate persons; and that the 

exemption will not have a material 

adverse effect on the ability of the 

Commission or any contract market or 

derivatives transaction execution 

facility to discharge its regulatory or 

self-regulatory responsibilities under the 

CEA. 

In the April 23, 2008 Federal Register 

Release, the Commission requested 

public comment on the matters 

discussed above and all issues raised by 

its proposed exemptive order. No 

comments were received. 


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