Federal Register / Vol. 73, No. 51 / Friday, March 14, 2008 / Notices 13867 

1 streetTRACKS is a registered service mark of 

State Street Corporation, an affiliate of State Street 

Global Markets, LLC, the marketing agent for the 

streetTRACKS Gold Trust. 

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

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

4OneChicago is jointly owned by the CME Group, 

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

Options Exchange. 

5 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. 

6 7 U.S.C. 7a–2(c)(2), 17 CFR 40.5, 41.23. 

the conservation of the tautog fishery. 

Further, the moratorium prohibits 

fishing for tautog within New Jersey 

state waters and is being implemented 

within six (6) months of the agency 

findings. 

The declaration of moratorium is 

consistent with the Administrative 

Procedures Act at 5 U.S.C. 555 insofar 

as New Jersey was promptly notified of 

the Commission’s non-compliance 

referral and given an opportunity to 

meet with the agency and provide 

comments on the matter. New Jersey has 

also been promptly notified of the 

agency’s determination in this matter. 

The Assistant Administrator for 

Fisheries, NOAA (AA), finds that 

providing prior public notice and 

opportunity for comment is 

impracticable and unnecessary. 

Providing prior notice and opportunity 

for comment would be impracticable, 

because it would prevent the agency 

from executing its functions under the 

Act in a timely manner. The Act 

contemplates quick action on the 

declaration of a moratorium that would 

not be possible if prior notice and an 

opportunity for comment are provided. 

Furthermore, providing prior notice and 

opportunity for comment would be 

unnecessary because it would serve no 

purpose. The nature of a moratorium is 

described in the Act and, therefore, 

cannot be modified in response to 

public comments. 

The declaration of moratorium does 

not trigger the analytical requirements 

of the Regulatory Flexibility Act, 5 

U.S.C. 601 et seq. because prior notice 

and opportunity for public comment are 

not required for this determination by 

the Administrative Procedures Act or 

any other law. 

The declaration of a moratorium does 

not fall under review under Executive 

Order 12866 insofar as the moratorium 

is not a regulatory action of the agency 

but is an action mandated by Congress 

upon the findings of certain conditions 

precedent set forth in the Atlantic 

Coastal Act, which also prescribes the 

nature and extent of the moratorium. 

The fishery is smaller relative to other 

Commission fisheries and a moratorium 

is not expected to materially adversely 

affect the economy or have an impact of 

over $100 million. The matter creates no 

serious inconsistency with actions by 

other agencies and it is not expected to 

have material budgetary impacts. The 

declaration of moratorium is not 

significant within the meaning of the 

Executive Order. 

The declaration of moratorium is not 

the result of a policy formulated or 

implemented by the agency, but is 

instead the result of the application of 

found facts to the Congressional 

standards set forth in the Atlantic 

Coastal Act and as such, the declaration 

does not implicate federalism in the 

manner contemplated by Executive 

Order 13132. Further, the agency has 

consulted with New Jersey to the 

maximum extent practicable in this 

matter given the truncated timeframe set 

forth in the Atlantic Coastal Act. Rather, 

the Act provides clear evidence that 

Congress intended the Secretary to have 

the authority to preempt state law. That 

authority has been delegated from the 

Secretary to NMFS. The scope of the 

moratorium reflects the standards set 

forth in the Atlantic Coastal Act, and as 

such restricts state law to the minimum 

level necessary to further the objectives 

of the statute. 

Authority: 16 U.S.C. 5101 et seq. 

Dated: March 10, 2008. 

James W. Balsiger, 

Acting Assistant Administrator for Fisheries, 

National Marine Fisheries Service. 

[FR Doc. 08–1026 Filed 3–11–08; 12:07 p.m.] 

BILLING CODE 3510–22–S 

COMMODITY FUTURES TRADING 

COMMISSION 

RIN 3038–AC52 

Proposed Exemptive Order for ST Gold 

Futures Contracts 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice of proposed order and 

request for comment. 

SUMMARY: The Commodity Futures 

Trading Commission (Commission) is 

proposing to exempt certain 

transactions in physically delivered 

futures contracts based on 

streetTRACKS Gold Trust Shares (ST 

gold futures contracts) 1 from those 

provisions of the Commodity Exchange 

Act (CEA or Act),2 and the 

Commission’s regulations thereunder, 

that are inconsistent with the trading 

and clearing of ST gold futures contracts 

as security futures. The proposed 

exemption would be conditioned on the 

compliance of transactions in ST gold 

futures contracts with the requirements 

established for security futures. The 

authority for the issuance of this 

exemption is found in Section 4(c) of 

the Act.3

DATES: Comments must be received on 

or before March 31, 2008. 

ADDRESSES: Comments should be sent to 

the Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581, attention: Office of the 

Secretariat. Comments may be sent by 

facsimile to 202.418.5521, or by e-mail 

to secretary@cftc.gov. Reference should 

be made to the ‘‘Proposed Exemptive 

Order for ST Gold Futures Contracts.’’

Comments may also be submitted 

through the Federal eRulemaking Portal 

at http://www.regulations.gov. All 

comments received will be posted 

without change to http:// 

www.CFTC.gov. 

FOR FURTHER INFORMATION CONTACT: 

Bruce Fekrat, Special Counsel, Office of 

the Director (telephone 202.418.5578, email bfekrat@cftc.gov), Division of 

Market Oversight, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street, NW., 

Washington, DC 20581. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

In correspondence dated October 26, 

2007, OneChicago, LLC (OneChicago or 

the Exchange),4 a contract market 

designated with the Commission 

pursuant to Sections 5 and 6(a) of the 

Act, proposed and requested 

Commission approval to list for trading 

ST gold futures contracts as security 

futures.5 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 41.23.6 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 


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13868 Federal Register / Vol. 73, No. 51 / Friday, March 14, 2008 / Notices 

7Commission 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 the product raises novel or complex issues 

requiring additional time for review. 17 CFR 

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

8Section 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. 

9By its terms, an ST gold futures contract would 

expire on the third Friday of each contract month. 

The contract would not be subject to speculative 

position limits prior to the last five days of trading. 

During the last five trading days, however, 

speculative positions would be limited to 13,500 

contracts, net long or short. Positions in ST gold 

futures contracts would become reportable to 

OneChicago when equal to or above 200 contracts. 

Positions in ST gold futures contracts would 

become reportable to the Commission when equal 

to or above 1,000 contracts. 

10The World Gold Council (founded in 1987) is 

a not-for-profit association registered under the 

laws of Switzerland. The Council is funded by gold 

mining companies and is tasked, in part, with 

increasing the demand for gold through marketing 

initiatives and lowering regulatory barriers to the 

widespread ownership of gold products. About the 

World Gold Council, available at http:// 

www.gold.org/discover/about_us/index.html. 

11Prospectus for the Trust’s offering of Shares 

(July 24, 2007), available at http:// 

www.streettracksgoldshares.com/pdf/ 

streetTRACKS.pdf (provides a detailed description 

of the Trust and its operations). 

12The Net Asset Value (NAV) of the Trust is the 

aggregate value of the Trust’s assets less its 

liabilities which include (1) fees paid to the 

Sponsor, (2) fees paid to the Trustee, (3) fees paid 

to the Custodian, (4) fees paid to the Marketing 

Agent, and (5) certain administrative expenses 

assessed as fees. 

13 In determining the NAV of the Trust, the 

Trustee values the gold held by the Trust on the 

basis of the price of an ounce of gold as set by the 

afternoon session of the London Bullion Market 

Association’s twice-daily fix of the price of gold. 

The gold fix is performed by five members of the 

association. HSBC Bank USA, NA, the Custodian of 

the Trust, is one of five gold fixing members. 

14By way of a simplified example, assume that 

the Trust holds 10,000 ounces of gold, the spot 

price of gold is $900 per ounce, and that there are 

50,000 Shares outstanding. Assume further that the 

Trust has accrued fees and expenses of $50,000. 

Under this example, the value of the Trust’s 

holdings of gold would be $8,950,000, and the 

value of each Share would be 1/50,000 of 

$8,950,000, or $179. 

15NYSE Arca is the electronic equities trading 

facility of NYSE Arca Equities, Inc., a whollyowned subsidiary of NYSE Euronext. 

16See Elisabeth Hehn, Exchange Traded Funds: 

Structure, Regulation and Application of a New 

Fund Class (January 16, 2006). 

Division of Market Oversight, pursuant 

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

another 45 days beyond December 10, 

2007 to January 24, 2008 on the grounds 

that the ST gold futures contracts raised 

novel and complex issues that required 

additional time for review.7 By letter 

dated January 23, 2008, the Exchange, 

upon the request of the Commission’s 

staff, voluntarily extended the review 

period to March 17, 2008.8 On February 

26, 2008, the Exchange gave a further 

voluntary extension of the review 

period until April 30, 2008. 

II. Description of the Underlying 

Commodity 

ST gold futures contracts would 

overlie 100 Shares of the 

streetTRACKS Gold Trust (Trust).9

The Trust was formed under New York 

law pursuant to a trust indenture on 

November 12, 2004. World Gold Trust 

Services, LLC, a wholly owned limited 

liability company of the World Gold 

Council,10 is the sponsor of the Trust. In 

addition, The Bank of New York is the 

trustee of the Trust, HSBC Bank USA, 

N.A. is the custodian of the Trust, and 

State Street Global Markets, LLC is the 

marketing agent for the Trust.11 The 

Trust presently does not engage in the 

business of investing or trading 

securities or commodity futures or 

options contracts. As a result, the Trust 

is not registered as an investment 

company under the Investment 

Company Act of 1940 and it is not 

managed by a commodity pool operator 

registered under the CEA. 

The Trust, from time to time, creates, 

issues, and redeems Shares which 

represent fractional undivided 

beneficial interests in the assets of the 

Trust. The sole assets of the Trust 

consist of gold bullion and limited 

amounts of cash. Accordingly, the value 

of each Share will fluctuate with the 

value of the Trust’s holdings,12 which in 

turn is dependent on the spot price of 

gold.13 That value may be found by 

dividing the aggregate value of the gold 

and cash held by the Trust less 

applicable fees and expenses by the 

quantity of Shares outstanding at any 

specific moment in time.14 The Trust is 

not actively managed and does not 

engage in any investment activities that 

are designed to avoid losses or profit 

from changes in the price of gold. 

Rather, the investment purpose of the 

Trust is to issue Shares that will track 

the spot price of gold and thereby give 

shareholders the opportunity to gain 

exposure to the commodity’s price 

volatility. 

The Trust, on an ongoing basis, will 

only issue Shares to, and only redeem 

Shares from, Authorized Participants in 

baskets of 100,000 Shares (ST Share 

Baskets). An Authorized Participant 

must (1) be a participant in the 

Depository Trust Company that is a 

registered broker-dealer or other 

securities market participant (such as a 

bank or other financial institution) that 

is not required to register as a brokerdealer to engage in securities 

transactions, (2) have entered into an 

agreement with the Trust and the 

Sponsor of the Trust, and (3) have 

established an unallocated gold account 

(paper transfer account) with the 

Custodian. Upon the payment of a 

transaction fee, Authorized Participants 

may purchase ST Share Baskets by 

depositing gold (and cash if necessary) 

in an amount equal to the NAV of an ST 

Share Basket per purchased basket. 

Likewise, Authorized Participants may 

redeem ST Share Baskets in exchange 

for an amount of gold (and cash if 

necessary) that corresponds to the NAV 

of an ST Share Basket per redeemed 

basket. All transfers of gold are 

accomplished through paper transfers, 

as opposed to physical transfers of gold, 

and are cleared through the clearing 

members of the London Bullion Market 

Association. Such members utilize 

mutually maintained unallocated gold 

accounts for the settlement of 

proprietary over-the-counter trades as 

well as for the settlement of client 

transfers. 

Upon purchasing ST Share Baskets, 

Authorized Participants may divide the 

baskets into individual Shares for resale. 

Trust Shares are registered as securities 

under the Securities Act of 1933 (’33 

Act) and listed on the NYSE Arca 

Exchange under the ticker symbol 

GLD.15 The continuous Share creation, 

sale, resale, and redemption process, 

coupled with a highly liquid market, 

creates an arbitrage mechanism that 

functions to keep the Shares trading at 

or near the NAV of the Trust’s gold 

holdings.16 Authorized Participants act 

as arbitrageurs by taking advantage of 

significant premiums or discounts in the 

trading price of outstanding Shares 

relative to the spot price of gold. If 

individual exchange-traded Shares trade 

at a price that is below the spot market 

price of gold, Authorized Participants 

will purchase and aggregate Shares into 

ST Share Baskets and redeem the 

Baskets with the Trust for an amount of 

gold with an aggregate value that is 

greater than the aggregate trading value 

of the individual Shares that comprise 

the redeemed ST Share Baskets. 

Similarly, if ST Shares are trading at a 

price that is above the spot market price 

of gold, Authorized Participants will 

deposit gold with the Trust in exchange 

for ST Share Baskets that can then be 

divided into individual Shares for resale 

to retail investors at a premium. 

III. Section 4(c) of the Commodity 

Exchange Act 

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

the Commission to ‘‘promote 


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Federal Register / Vol. 73, No. 51 / Friday, March 14, 2008 / Notices 13869 

17Covered transactions are subject to certain 

exceptions not relevant to the publication of this 

proposal. 

18Section 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. 

19Section 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. 

20 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). 

21H.R. Conf. Rep. No. 102–978, 1992 

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

22The 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). 

23Transactions in ST gold futures contracts 

would be subject to the provisions of the securities 

laws, including any applicable provision of the ’33 

and ’34 Acts. 

24H.R. Conf. Rep. at 3214–3215. 

responsible economic or financial 

innovation and fair competition’’ by 

exempting any transaction or class of 

transactions 17 from any of the 

provisions of the Act upon determining 

that the exemption would be consistent 

with the public interest.18 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.19 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 order for the Commission to 

approve the Exchange’s request to list 

for trading ST gold futures contracts as 

security futures, it would have to find 

that the interest that would underlie an 

ST gold futures contract is a security. 

However, if the contracts are considered 

to be futures contracts based on a 

commodity that is not a security, then 

they would be subject to the exclusive 

jurisdiction of the CFTC under CEA 

Section § 2(a)(1)(A), and listing the 

contract for trading as a security future 

as the Exchange proposes would violate 

the CEA.20

ST gold futures contracts would be 

based on an innovative and highly 

successful product that efficiently and 

transparently creates exposure to the 

spot price of gold by combining 

attributes of exchange traded financial 

products, cash commodity ownership 

interests, and speculative participation 

in the price volatility of a commodity. 

The jurisdictional classification of the 

underlying instrument, whether as a 

security or a commodity that is not a 

security, is not straightforward. 

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.’’ 21

Accordingly, the Commission proposes 

to use its authority under Section 4(c) of 

the Act to exempt transactions in ST 

gold futures contracts that would be 

listed for trading on OneChicago 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 ST gold futures contracts 

as security futures.22 The proposed 

exemption would require that 

transactions in ST gold futures contracts 

comply with the requirements 

established for transactions in security 

futures by the Act and the Commission’s 

regulations thereunder.23

In proposing to exercise its exemptive 

authority under Section 4(c) of the Act, 

the Commission is not required to, and 

does not, find either that an ST gold 

futures contract is based on a security, 

or that it is not based on a security and 

is thereby subject to exclusive 

regulation under the CEA. In this regard, 

the House-Senate Conference 

Committee in the legislative process 

leading to the enactment of CEA Section 

4(c) noted that: 

[T]his provision provides flexibility for the 

Commission to provide legal certainty to 

novel instruments where the determination 

as to jurisdiction is not straightforward. 

Rather than making a finding as to whether 

a product is or is not a futures contract, the 

Commission in appropriate cases may 

proceed directly to issuing an exemption.24

Futures contracts based on the 

underlying Shares of the Trust are 

‘‘novel instruments’’ and, as noted 

above, the ‘‘determination as to [their] 

jurisdiction is not straightforward.’’

Given the potential usefulness of ST 

gold futures contracts to the significant 

market for the Shares that would 

underlie such contracts, as well as all 

gold-linked markets, the Commission 

believes that this may be an appropriate 

case for issuing an exemption without 

making a finding as to the precise nature 

of the underlying Shares of the Trust. 

Exempting transactions in ST gold 

futures contracts from the provisions of 

the Act, and the Commission’s 

regulations thereunder, that are 

inconsistent with the trading and 

clearing of security futures, and thereby 

permitting the trading of ST gold futures 

contracts as security futures on 

OneChicago, may foster both financial 

innovation by expeditiously 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, 

ST gold futures contracts, if traded as 

security futures pursuant to an 

exemption, would be subject to 

regulation by both the SEC and the 

Commission. The implementation of an 

exemption, under these circumstances, 

would not erode customer protections 


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13870 Federal Register / Vol. 73, No. 51 / Friday, March 14, 2008 / Notices 

25CEA section 3(b), 7 U.S.C. 5(b). See also CEA 

section 4(c)(1), 7 U.S.C. 6(c)(1) (purpose of 

exemption is ‘‘to promote responsible economic or 

financial innovation and fair competition.’’) 

26 44 U.S.C. 3507(d). 

27 7 U.S.C. 19(a). 

or impair the ability of the Commission 

or OneChicago to discharge any 

regulatory or self-regulatory duty under 

the Act. 

IV. Request for Comment 

The purposes of the CEA include 

‘‘promot[ing] responsible innovation 

and fair competition among boards of 

trade, other markets and market 

participants.’’ 25 Based on the foregoing, 

it may be consistent with these and the 

other purposes of the CEA, and with the 

public interest, for ST gold futures 

contracts to trade on OneChicago as 

security futures. The Commission urges 

interested persons to provide comments 

that will assist the Commission in 

conducting its analysis of the issues 

relevant to this proposal. This release is 

not intended in any way to alter the 

current status of any transaction that is 

subject to one or more provisions of the 

’33 or ’34 Acts or the CEA, including 

any regulations adopted thereunder. 

V. Related Matters 

A. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(PRA) 26 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. 

The proposed exemptive order would 

not, if issued, require a new collection 

of information from any entity that 

would be subject to the proposed order. 

B. Cost-Benefit Analysis 

Section 15(a) of the CEA, as amended 

by Section 119 of the Commodity 

Futures Modernization Act of 2000,27

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. Accordingly, 

the Commission could in its discretion 

give greater weight to any one of the five 

enumerated areas and could in its 

discretion determine that, 

notwithstanding its costs, a particular 

order 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 

CEA. The Commission specifically 

invites public comment on its analysis 

of the costs and benefits associated with 

the proposed issuance of an exemptive 

order under Section 4(c) of the Act. 

The primary cost that could be 

associated with the proposed exemptive 

order is the burden that may arise from 

subjecting transactions in ST gold 

futures contracts, and thereby the 

market participants transacting in such 

contracts, to the dual regulation of 

security futures by the Commission and 

the SEC. Potential costs arising from 

dual regulation, however, are 

outweighed by the legal certainty and 

additional benefits that could arise from 

the issuance of the proposed exemptive 

order. For example, permitting the 

trading of ST gold futures contracts on 

OneChicago, through the issuance of the 

proposed exemptive order, could 

facilitate price discovery for gold and 

gold-linked interests given that a liquid 

market in ST gold futures contracts 

would serve as an additional source for 

discerning the appropriate market value 

of gold. As discussed previously, the 

issuance of the proposed exemptive 

order may also foster competition by 

bringing a new derivatives product to 

market expeditiously without negatively 

impacting potential innovations in other 

markets for other commodities. 

In addition, the issuance of the 

proposed exemptive order would not 

result in any costs in terms of reduced 

protections for Commission-regulated 

markets or market participants. 

Transactions in ST gold futures 

contracts, pursuant to the proposed 

exemption, would be executed on 

OneChicago as security futures and 

would be subject to extensive and 

detailed regulation by the SEC and the 

Commission. Consequently, only 

intermediaries registered or noticeregistered with the Commission and the 

SEC would be able to solicit, accept 

orders for, or deal in any transactions in 

connection with ST gold futures 

contracts. The implementation of an 

exemption, under these circumstances, 

would not negatively impact any 

applicable regulatory measure designed 

to protect market participants or the 

public interest. With respect to financial 

integrity, The Options Clearing 

Corporation, as both a derivatives 

clearing organization registered as such 

with the Commission and a clearing 

agency registered as such with the SEC, 

would carry out the clearing and 

settlement of OneChicago’s ST gold 

futures contracts, including directing 

appropriate arrangements for the 

payment and physical delivery of the 

Shares that would underlie the ST gold 

futures contracts. 

After considering the factors 

presented in this release, the 

Commission has determined to seek 

comment on the proposed order as 

discussed above. 

Issued in Washington, DC, on March 10, 

2008 by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

[FR Doc. E8–5203 Filed 3–13–08; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF DEFENSE 

Department of the Army 

Appointment of Army Officials to the 

Army Emergency Relief—Board of 

Managers and Board of Advisors 

AGENCY: Department of the Army, DoD. 

ACTION: Notice. 

SUMMARY: Notice is given of certain 

Army officials assigned to positions 

authorized to serve without 

compensation as a director or officer, or 

to otherwise participate in the 

management of the Army Emergency 

Relief (AER), a military welfare society. 

DATES: Effective Date: December 17, 

2007. 

FOR FURTHER INFORMATION CONTACT: 

Sandra Stockel, 703–695–4296, Office of 

the Army General Counsel, 104 Army 

Pentagon, Washington, DC 20310–0104. 

SUPPLEMENTARY INFORMATION: The Office 

of the Army General Counsel, in 

accordance with 10 U.S.C. 1033 and by 

DoD regulation (DoD 5500.7–R, 

Standards of Conduct, section 3–202), 

announces the appointment of certain 

Army officials to serve without 

compensation as a director or officer, or 

to otherwise participate in the 

management of the Army Emergency 

Relief, a military welfare society. NonFederal entities in these categories must 

be predesignated by the Secretary of 

Defense. The Secretary of Defense’s 

authority for such designations was 

delegated to the Department of Defense 

General Counsel, who has designated all 

of the organizations, and concurred in 

all of the appointments, listed below. 

Appointments made under this 

authority extend to the named officials, 


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