53728 Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 

19 44 U.S.C. 3507(d). 20 7 U.S.C.19(a). 

1 74 FR 12178 (Mar. 23, 2009); these rules became 

effective on April 22, 2009. 

SPDC determinations, will apply and 

weigh each factor, as appropriate, to the 

specific contract and circumstances 

under consideration. 

As part of its evaluation, the 

Commission will consider the written 

data, views, and arguments from any 

ECM that lists the potential SPDC and 

from any other interested parties. 

Accordingly, the Commission requests 

comment on whether the subject 

contracts perform significant price 

discovery functions. Commenters’ 

attention is directed particularly to 

Appendix A of the Commission’s Part 

36 rules for a detailed discussion of the 

factors relevant to a SPDC 

determination. The Commission notes 

that comments which analyze the 

contracts in terms of these factors will 

be especially helpful to the 

determination process. In order to 

determine the relevance of comments 

received, the Commission requests that 

commenters explain in what capacity 

are they knowledgeable about one or 

several of the subject contracts. 

Moreover, because five contracts are 

included in this notice, it is important 

that commenters identify to which 

contract(s) their comments apply. 

IV. Related Matters 

A. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(‘‘PRA’’) 19 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. 

Certain provisions of final Commission 

rule 36.3 impose new regulatory and 

reporting requirements on ECMs, 

resulting in information collection 

requirements within the meaning of the 

PRA; OMB previously has approved and 

assigned OMB control number 3038– 

0060 to this collection of information. 

B. Cost-Benefit Analysis 

Section 15(a) of the CEA 20 requires 

the Commission to consider the costs 

and benefits of its actions before issuing 

an order under the Act. By its terms, 

section 15(a) does not require the 

Commission to quantify the costs and 

benefits of such an order or to determine 

whether the benefits of such an order 

outweigh its costs; rather, it requires 

that the Commission ‘‘consider’’ the 

costs and benefits of its action. Section 

15(a) further specifies that the costs and 

benefits 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 bulk of the costs imposed by the 

requirements of Commission Rule 36.3 

relate to significant and increased 

information-submission and reporting 

requirements adopted in response to the 

Reauthorization Act’s directive that the 

Commission take an active role in 

determining whether contracts listed by 

ECMs qualify as SPDCs. The enhanced 

requirements for ECMs will permit the 

Commission to acquire the information 

it needs to discharge its newlymandated responsibilities and to ensure 

that ECMs with SPDCs are identified as 

entities with the elevated status of 

registered entity under the CEA and are 

in compliance with the statutory terms 

of the core principles of section 

2(h)(7)(C) of the Act. The primary 

benefit to the public is to enable the 

Commission to discharge its statutory 

obligation to monitor for the presence of 

SPDCs and extend its oversight to the 

trading of SPDCs. 

Issued in Washington, DC, on October 14, 

2009 by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

[FR Doc. E9–25183 Filed 10–19–09; 8:45 am] 

BILLING CODE 6351–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

Notice of Intent, Pursuant to the 

Authority in Section 2(h)(7) of the 

Commodity Exchange Act and 

Commission Rule 36.3(c)(3), To 

Undertake a Determination Whether 

the Fuel Oil-180 Singapore Swap 

Contract, Offered for Trading on the 

IntercontinentalExchange, Inc., 

Performs a Significant Price Discovery 

Function 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice of action and request for 

comment. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘CFTC’’ or 

‘‘Commission’’) is undertaking a review 

to determine whether the Fuel Oil—180 

Singapore Swap (‘‘SZS’’) contract, 

offered for trading on the 

IntercontinentalExchange, Inc. (‘‘ICE’’), 

an exempt commercial market (‘‘ECM’’) 

under Sections 2(h)(3)–(5) of the 

Commodity Exchange Act (‘‘CEA’’ or the 

‘‘Act’’), perform a significant price 

discovery function. Authority for this 

action is found in section 2(h)(7) of the 

CEA and Commission rule 36.3(c) 

promulgated thereunder. In connection 

with this evaluation, the Commission 

invites comment from interested parties. 

DATES: Comments must be received on 

or before November 4, 2009. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

• Follow the instructions for 

submitting comments. Federal 

eRulemaking Portal: http:// 

www.regulations.gov. 

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

Fuel Oil—180 Singapore Swap (SZS) 

Contract in the subject line of the 

message. 

• Fax: (202) 418–5521 

• Mail: Send to David A. Stawick, 

Secretary, Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581 

• Courier: Same as mail above. 

All comments received will be posted 

without change to http:// 

www.CFTC.gov/. 

FOR FURTHER INFORMATION CONTACT: 

Gregory K. Price, Industry Economist, 

Division of Market Oversight, 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. Telephone: (202) 418–5515. Email: gprice@cftc.gov; or Susan Nathan, 

Senior Special Counsel, Division of 

Market Oversight, same address. 

Telephone: (202) 418–5133. E-mail: 

snathan@cftc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

On March 16, 2009, the CFTC 

promulgated final rules implementing 

provisions of the CFTC Reauthorization 

Act of 2008 (‘‘Reauthorization Act’’) 1

which subjects ECMs with significant 

price discovery contracts (‘‘SPDCs’’) to 

self-regulatory and reporting 

requirements, as well as certain 

Commission oversight authorities, with 

respect to those contracts. Among other 

things, these rules and rule amendments 

revise the information-submission 

requirements applicable to ECMs, 

establish procedures and standards by 

which the Commission will determine 

whether an ECM contract performs a 

significant price discovery function, and 

provide guidance with respect to 

compliance with nine statutory core 

principles applicable to ECMs with 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 53729 

2The Commission may commence this process on 

its own initiative or on the basis of information 

provided to it by an ECM pursuant to the 

notification provisions of Commission rule 

36.3(c)(2). 3Where appropriate, the Commission may choose 

to interview market participants regarding their 

impressions of a particular contract. Further, while 

they may not provide direct evidentiary support 

with respect to a particular contract, the 

Commission may rely for background and context 

on resources such as its October 2007 Report on the 

Oversight of Trading on Regulated Futures 

Exchanges and Exempt Commercial Markets (‘‘ECM 

Study’’). http://www.cftc.gov/stellent/groups/ 

public/@newsroom/documents/file/pr5403– 

07_ecmreport.pdf. 4 7 U.S.C. 2(h)(7)(C). 5 17 CFR Part 36, Appendix A. 

SPDCs. These rules became effective on 

April 22, 2009. 

In determining whether an ECM’s 

contract is or is not a SPDC, the 

Commission will evaluate the contract’s 

material liquidity, price linkage to other 

contracts, potential for arbitrage with 

other contracts traded on designated 

contract markets or derivatives 

transaction execution facilities, use of 

the ECM contract’s prices to execute or 

settle other transactions, and other 

factors. 

In order to facilitate the Commission’s 

identification of possible SPDCs, 

Commission rule 36.3(c)(2) requires that 

an ECM operating in reliance on section 

2(h)(3) promptly notify the Commission 

and provide supporting information or 

data concerning any contract: (i) That 

averaged five trades per day or more 

over the most recent calendar quarter; 

and (ii)(A) for which the ECM sells price 

information regarding the contract to 

market participants or industry 

publications; or (B) whose daily closing 

or settlement prices on 95 percent or 

more of the days in the most recent 

quarter were within 2.5 percent of the 

contemporaneously determined closing, 

settlement, or other daily price of 

another agreement. 

II. Determination of a SPDC 

A. The SPDC Determination Process 

Commission rule 36.3(c)(3) 

establishes the procedures by which the 

Commission makes and announces its 

determination on whether a specific 

ECM contract serves a significant price 

discovery function. Under those 

procedures, the Commission will 

publish a notice in the Federal Register 

that it intends to undertake a 

determination as to whether the 

specified agreement, contract, or 

transaction performs a significant price 

discovery function and to receive 

written data, views, and arguments 

relevant to its determination from the 

ECM and other interested persons.2

After prompt consideration of all 

relevant information,3 the Commission 

will, within a reasonable period of time 

after the close of the comment period, 

issue an order explaining its 

determination. Following the issuance 

of an order by the Commission that the 

ECM executes or trades an agreement, 

contract, or transaction that performs a 

significant price discovery function, the 

ECM must demonstrate, with respect to 

that agreement, contract, or transaction, 

compliance with the core principles 

under section 2(h)(7)(C) of the CEA 4

and the applicable provisions of Part 36. 

If the Commission’s order represents the 

first time it has determined that one of 

the ECM’s contracts performs a 

significant price discovery function, the 

ECM must submit a written 

demonstration of its compliance with 

the core principles within 90 calendar 

days of the date of the Commission’s 

order. For each subsequent 

determination by the Commission that 

the ECM has an additional SPDC, the 

ECM must submit a written 

demonstration of its compliance with 

the core principles within 30 calendar 

days of the Commission’s order. 

B. Fuel Oil-180 Singapore Swap 

Contract 

The SZS contract specifies 1,000 

metric tons of 180 CentiStokes (cst) 

Singapore high-sulfur fuel oil. The 

contract is cash-settled based on the 

arithmetic average of the means between 

the daily high and low price quotations 

for ‘‘HSFO 180 CST’’ delivered in the 

specified calendar month, published 

under the ‘‘Singapore’’ heading within 

Platts’ Asia-Pacific/Arab Gulf 

Marketscan. The SZS contract is listed 

for up to 60 consecutive calendar 

months beginning with the next 

calendar month. 

Based upon a required quarterly 

notification filed on July 27, 2009 

(mandatory under Rule 36.3(c)(2)), the 

ICE reported that, with respect to the 

SZS contract, the total number of trades 

was 1,957 in the second quarter of 2009, 

resulting in a daily average of 30.6 

trades. During the same period, the SZS 

contract had a total trading volume of 

13,170 contracts and an average daily 

trading volume of 205.8 contracts. 

Additionally, as of June 30, 2009, open 

interest was 11,356 contracts. 

It appears that the SZS contract may 

satisfy the material liquidity and 

material price reference factors for SPDC 

determination. With respect to material 

liquidity, as noted above, trading in the 

ICE SZS contract averaged over 200 

contracts on a daily basis, with more 

than 30 separate transactions each day. 

In regard to material price reference, 

while it did not specify which contracts 

served a significant price discovery 

function or reference this particular 

contract, the Commission’s ECM Study 

stated that, in general, market 

participants view the ICE as a price 

discovery market for certain energy 

contracts. Energy contracts based on 

actively-traded locations are transacted 

heavily on the ICE’s electronic trading 

platform, with the remainder being 

completed over-the-counter and 

potentially submitted for clearing by 

voice brokers. In addition, ICE sells its 

price data to market participants in a 

number of different packages which 

vary in terms of the hubs covered, time 

periods, and whether the data are daily 

only or historical. For example, the ICE 

offers ‘‘OTC Oil End of Day’’ data 

packages with access to all price data or 

just 12, 24, 36, or 48 months of 

historical data. 

III. Request for Comment 

In evaluating whether an ECM’s 

agreement, contract, or transaction 

performs a significant price discovery 

function, section 2(h)(7) of the CEA 

directs the Commission to consider, as 

appropriate, four specific criteria: Price 

linkage, arbitrage, material price 

reference, and material liquidity. As it 

explained in Appendix A to the Part 36 

rules,5 the Commission, in making 

SPDC determinations, will apply and 

weigh each factor, as appropriate, to the 

specific contract and circumstances 

under consideration. 

As part of its evaluation, the 

Commission will consider the written 

data, views, and arguments from any 

ECM that lists the potential SPDC and 

from any other interested parties. 

Accordingly, the Commission requests 

comment on whether the ICE’s SZS 

contract performs a significant price 

discovery function. Commenters’ 

attention is directed particularly to 

Appendix A of the Commission’s Part 

36 rules for a detailed discussion of the 

factors relevant to a SPDC 

determination. The Commission notes 

that comments which analyze the 

contracts in terms of these factors will 

be especially helpful to the 

determination process. In order to 

determine the relevance of comments 

received, the Commission requests that 

commenters explain in what capacity 

are they knowledgeable about the 

subject contract. 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
53730 Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 

6 44 U.S.C. 3507(d). 

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

IV. Related Matters 

A. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(‘‘PRA’’) 6 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. 

Certain provisions of final Commission 

rule 36.3 impose new regulatory and 

reporting requirements on ECMs, 

resulting in information collection 

requirements within the meaning of the 

PRA; OMB previously has approved and 

assigned OMB control number 3038– 

0060 to this collection of information. 

B. Cost-Benefit Analysis 

Section 15(a) of the CEA 7 requires the 

Commission to consider the costs and 

benefits of its actions before issuing an 

order under the Act. By its terms, 

section 15(a) does not require the 

Commission to quantify the costs and 

benefits of such an order or to determine 

whether the benefits of such an order 

outweigh its costs; rather, it requires 

that the Commission ‘‘consider’’ the 

costs and benefits of its action. Section 

15(a) further specifies that the costs and 

benefits 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 bulk of the costs imposed by the 

requirements of Commission Rule 36.3 

relate to significant and increased 

information-submission and reporting 

requirements adopted in response to the 

Reauthorization Act’s directive that the 

Commission take an active role in 

determining whether contracts listed by 

ECMs qualify as SPDCs. The enhanced 

requirements for ECMs will permit the 

Commission to acquire the information 

it needs to discharge its newlymandated responsibilities and to ensure 

that ECMs with SPDCs are identified as 

entities with the elevated status of 

registered entity under the CEA and are 

in compliance with the statutory terms 

of the core principles of section 

2(h)(7)(C) of the Act. The primary 

benefit to the public is to enable the 

Commission to discharge its statutory 

obligation to monitor for the presence of 

SPDCs and extend its oversight to the 

trading of SPDCs. 

Issued in Washington, DC, on October 14, 

2009 by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

[FR Doc. E9–25181 Filed 10–19–09; 8:45 am] 

BILLING CODE 6351–01–P 

DEFENSE NUCLEAR FACILITIES 

SAFETY BOARD 

Sunshine Act Notice 

AGENCY: Defense Nuclear Facilities 

Safety Board. 

ACTION: Notice of public meeting. 

SUMMARY: Pursuant to the provisions of 

the ‘‘Government in the Sunshine Act’’ 

(5 U.S.C. 552b), notice is hereby given 

of the Defense Nuclear Facilities Safety 

Board’s (Board) public hearing and 

meeting described below. The Board 

will conduct a public hearing and 

meeting pursuant to 42 U.S.C. 2286b 

and invites any interested persons or 

groups to present any comments, 

technical information, or data 

concerning safety issues related to the 

matters to be considered. 

TIME AND DATE OF MEETING: 9 a.m., 

November 24, 2009. 

PLACE: Defense Nuclear Facilities Safety 

Board, Public Hearing Room, 625 

Indiana Avenue, NW., Suite 300, 

Washington, DC 20004–2001. 

Additionally, as a part of the Board’s E– 

Government initiative, the meeting will 

be presented live through Internet video 

streaming. A link to the presentation 

will be available on the Board’s Web site 

(http://www.dnfsb.gov). 

STATUS: Open. While the Government in 

the Sunshine Act does not require that 

the scheduled discussion be conducted 

in a meeting, the Board has determined 

that an open meeting in this specific 

case furthers the public interests 

underlying both the Sunshine Act and 

the Board’s enabling legislation. 

MATTERS TO BE CONSIDERED: The Board 

will hold a series of public meetings to 

examine the Department of Energy’s 

(DOE) implementation of 

Recommendation 2004–1, Oversight of 

Complex, High-Hazard Nuclear 

Operations. In 2003 and 2004, the Board 

conducted a series of eight public 

meetings that examined DOE’s methods, 

and the proposed changes to those 

methods, for providing and ensuring 

adequate protection for the public 

health and safety and that of the 

workers at DOE’s defense nuclear 

facilities. Based on the findings from 

these public meetings, the Board issued 

Recommendation 2004–1 on May 21, 

2004. While the Board notes that 

progress has been made on many of the 

22 commitments contained in DOE’s 

Implementation Plan to Improve 

Oversight of Nuclear Operations 

(Revision 2, October 2006), major 

commitments remain incomplete, and 

areas continue to require greater 

attention from senior management if 

planned activities are to be completed. 

In addition, commitments previously 

declared complete must be reviewed 

and reinforced by cognizant managers to 

reaffirm the continued achievement of 

their purposes and functions. This 

series of public meetings will examine 

the overall implementation of 

Recommendation 2004–1 in light of the 

Recommendation’s basic precepts: 

strengthen federal health and safety 

assurance; learn from internal and 

external operating experience; and 

revitalize the implementation of 

Integrated Safety Management. Of 

particular importance to the successful 

implementation of Recommendation 

2004–1 is the direct and unbroken line 

of roles and responsibilities for the 

safety of nuclear operations, extending 

from the Secretary of Energy, Program 

Secretarial Officers, and the National 

Nuclear Security Administration 

(NNSA) to field offices and sites. 

This hearing and meeting is intended 

to further assist the Board and DOE in 

their collective efforts to evaluate any 

needed improvements in the timeliness 

of issue resolution. The Board expects to 

hear presentations from the top 

leadership team of DOE and NNSA to 

outline the safety goals and safety 

management approach that DOE/NNSA 

is pursuing in the context of activities 

conducted under Recommendation 

2004–1 and other DOE safety initiatives. 

The Board may also collect any other 

information relevant to health or safety 

of the workers and the public, with 

respect to Recommendation 2004–1. 

The public hearing portion of this 

proceeding is authorized by 42 U.S.C. 

2286b. 

CONTACT PERSON FOR MORE INFORMATION: 

Brian Grosner, General Manager, 

Defense Nuclear Facilities Safety Board, 

625 Indiana Avenue, NW., Suite 700, 

Washington, DC 20004–2901, (800) 788– 

4016. This is a toll-free number. 

SUPPLEMENTARY INFORMATION: Requests 

to speak at the hearing may be 

submitted in writing or by telephone. 

The Board asks that commentators 

describe the nature and scope of their 

oral presentation. Those who contact 

the Board prior to close of business on 

November 23, 2009, will be scheduled 

for time slots, beginning at 

approximately 12 p.m. The Board will 

post a schedule for those speakers who 


cprice-sewell on DSKGBLS3C1PROD with NOTICES