3570 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Notices 

1 In February 1996, Commission staff issued noaction relief to Deutsche Terminborse (DTB), an 

automated international futures and options 

exchange headquartered in Frankfurt, Germany, 

that permitted DTB, subject to certain terms and 

conditions, to place computer terminals in the U.S. 

offices of its members for principal trading. See 

CFTC Interpretative Letter No. 96–28 (1996–1997 

Transfer Binder) Comm. Fut. L. Rep. (CCH) para. 

26,669 (Feb. 29. 1996). In June 1998, DTB merged 

with the Swiss Options and Financial Futures 

Exchange and DTB changed its name to Eurex 

Deutschland. 

2See Commission Rule 140.99, 17 CFR 140.99 

(2006), which defines the term ‘‘no-action letter’’ as 

a written statement issued by the staff of a Division 

of the Commission or of the Office of General 

Counsel that it will not recommend enforcement 

action to the Commission for failure to comply with 

a specific provision of the Act or of a Commission 

rule, regulation or order if a proposed transaction 

is completed or a proposed activity is conducted by 

the beneficiary. 

3 Direct access means that the member in the U.S. 

may enter an order directly into the trade matching 

engine to be matched according to the trade 

matching algorithm. Direct access is different from 

an automated order routing system (AORS) in that 

an order transmitted via AORS is intermediated in 

that it is entered into the trade matching engine by 

or through the intermediary, i.e., the intermediary, 

not the member in the U.S., has direct access. 

4The no-action letters issued to FBOTs, formerly 

referred to as ‘‘foreign terminal no-action letters,’’ 

are currently referred to as ‘‘direct access no-action 

letters’’ and are published on the Commission’s 

Web site at: http://www.cftc.gov/dea/ 

deaforeignterminaltable.htm. Hereinafter the letters 

are simply referred to as ‘‘no-action letters.’’ 

Reference to DTEFs in the no-action letters was 

added following the establishment of that 

registration category by the Commodity Futures 

Modernization Act of 2000. 

5Access to Automated Boards of Trade, 64 FR 

32829 (June 18, 1999). 

6Boards of Trade Located Outside of the United 

States and No-Action Relief from the Requirement 

to Become a Designated Contract Market or 

Derivatives Transaction Execution Facility, 71 FR 

64443 (November 2, 2006). 

Although non-emergency issues not 

contained in this agenda may come 

before this group for discussion, those 

issues may not be the subject of formal 

action during this meeting. Action will 

be restricted to those issues specifically 

listed in this notice and any issues 

arising after publication of this notice 

that require emergency action under 

section 305(c) of the Magnuson-Stevens 

Act, provided the public has been 

notified of the Council’s intent to take 

final action to address the emergency. 

Special Accommodations 

This meeting is physically accessible 

to people with disabilities. Requests for 

sign language interpretation or other 

auxiliary aids should be directed to Paul 

J. Howard, Executive Director, at 978– 

465–0492, at least 5 days prior to the 

meeting date. 

Authority: 16 U.S.C. 1801 et seq. 

Dated: January 14, 2009. 

Tracey L. Thompson, 

Acting Director, Office of Sustainable 

Fisheries, National Marine Fisheries Service. 

[FR Doc. E9–1084 Filed 1–16–09; 8:45 am] 

BILLING CODE 3510–22–S 

COMMODITY FUTURES TRADING 

COMMISSION 

Notice of Additional Conditions on the 

No-Action Relief When Foreign Boards 

of Trade That Have Received Staff NoAction Relief To Permit Direct Access 

to Their Automated Trading Systems 

From Locations in the United States 

List for Trading From the U.S. Linked 

Futures and Option Contracts and a 

Revision of Commission Policy 

Regarding the Listing of Certain New 

Option Contracts 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice. 

SUMMARY: The Commodity Futures 

Trading Commission (Commission) is 

providing notice requiring foreign 

boards of trade that may receive 

Commission staff no-action relief 

permitting them to make their 

automated trading systems directly 

available from the U.S. to comply with 

additional conditions for the no-action 

relief to remain effective if they list for 

trading from the U.S. contracts that are 

linked to contracts traded on certain 

U.S.-based entities. Separately, the 

Commission is providing notice that it 

is revising its policy regarding the 

notification procedures applicable to 

listing an option on a futures contract 

that already is (or can be) listed for 

trading from the U.S. 

DATES: Effective Date: The conditions 

and notification procedures are effective 

immediately. 

FOR FURTHER INFORMATION CONTACT: 

Duane C. Andresen, Senior Special 

Counsel, Division of Market Oversight, 

Commodity Futures Trading 

Commission, Three Lafayette Center, 

1155 21st Street, NW., Washington, DC 

20581. Telephone: 202–418–5492. Email: dandresen@cftc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Since 1996,1 Commission staff has 

issued no-action letters 2 to foreign 

boards of trade (FBOT) stating that, 

subject to compliance with certain 

conditions, the staff will not 

recommend that the Commission take 

enforcement action against the FBOT or 

its members if the FBOT permits its 

members or participants in the United 

States to have direct access 3 to its 

electronic trading system without 

seeking designation under the 

Commodity Exchange Act (CEA or Act) 

as a contract market (DCM) or 

registration as a derivatives transaction 

execution facility (DTEF).4 On June 2, 

1999, the Commission issued an order 

which, among other things, withdrew 

proposed rules that would have 

governed automated access to FBOTs 

from the U.S. and instructed the 

Commission staff to begin immediately 

processing no-action requests from 

FBOTs seeking to place trading 

terminals in the U.S., and to issue 

responses where appropriate, pursuant 

to the general guidelines included in the 

Eurex (DTB) no-action process, or other 

guidelines established by the 

Commission.5 On October 22, 2006, the 

Commission issued a Statement of 

Policy that affirmed the use of the noaction process to permit FBOTs to 

provide direct access to their electronic 

trading systems to U.S. members or 

authorized participants.6

Commission staff has issued 21 noaction letters since the DTB letter, all of 

which grant the no-action relief 

requested subject to a series of terms 

and conditions. The terms and 

conditions, among other things, assure 

the Division (1) That the FBOT 

continues to be a bona fide FBOT 

subject to effective regulation in its 

home country; (2) that direct access is 

restricted to authorized entities; (3) that 

the Division receives notice of any 

material changes in the information 

provided to it in support of the noaction request including, without 

limitation, any modification of the 

FBOT’s membership criteria, the 

location of its management, personnel 

or operations, the basic structure, 

nature, or operation of the trading 

system, or the regulatory or selfregulatory structure applicable to its 

members; and (4) that satisfactory 

information-sharing arrangements 

between the Commission, the FBOT, 

and the FBOT’s relevant regulatory 

authorities will remain in effect. 

With respect to the listing of new 

contracts, initially FBOTs that received 

no-action relief that wished to list 

additional futures and option contracts 

for trading by direct access from the 

U.S. were required to request in writing 

and receive supplemental no-action 

relief from Commission staff prior to 

listing the new contracts. On June 30, 

2000, the Commission issued a 

Statement of Policy that permitted 

FBOTs with no-action relief to list 

additional futures and option contracts 

for trading from the U.S. merely by 

filing with Commission staff no later 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Notices 3571 

7See Statement of Policy of the Commodity 

Futures Trading Commission Regarding the Listing 

of New Futures and Option Contracts by Foreign 

Boards of Trade That Have Received Staff NoAction Relief to Place Electronic Trading Devices in 

the U.S., 65 FR 41641 (July 6, 2000). The Statement 

of Policy did not apply to broad-based stock index 

futures and option contracts that are now covered 

by Section 2(a)(1)(C) of the Commodity Exchange 

Act. Foreign boards of trade were (and presently 

are) required to seek and receive written 

supplemental no-action relief from Commission 

staff prior to offering or selling such contracts. 

8See Notice of Revision of Commission Policy 

Regarding the Listing of New Futures and Option 

Contracts by Foreign Boards of Trade That Have 

Received Staff No-Action Relief To Provide Direct 

Access to Their Automated Trading Systems from 

Locations in the United States, 71 FR 19877 (April 

18, 2006). The notice of revision did not alter a 

FBOT’s obligation to seek and receive written 

supplemental no-action relief from Commission 

staff prior to offering or selling broad-based stock 

index futures and option contracts. The FBOT is 

still required to file with Commission staff a copy 

of the initial terms and conditions of the additional 

contracts and a certification that it is in compliance 

with the terms and conditions of its no-action letter 

and that the additional futures and option contracts 

would be traded in accordance with such terms and 

conditions. 

9On November 12, 1999, the Division of Trading 

and Markets granted to the International Petroleum 

Exchange of London (IPE) (now ICE Futures 

Europe) no-action relief to make its electronic 

trading and order matching system, Energy Trading 

System II (ETS), available to IPE members in the 

United States. CFTC Staff Letter No. 99–69 

(November 12, 1999). The November 12, 1999 IPE 

no-action letter was amended by the Division of 

Market Oversight (Division) four times between July 

26, 2002 and April 14, 2003 as trading of the 

contracts was transitioned from the ETS to the ICE 

Platform operated by IntercontinentalExchange, 

Inc., in Atlanta, Georgia and trading hours were 

extended. 

10On May 24, 2007, the Division granted to the 

DME no-action relief to make its electronic trading 

and order matching system, known as DME Direct, 

available to DME members in the U.S. CFTC Staff 

Letter No. 07–06 (May 24, 2007). 

11CFTC Staff Letter No. 08–09 (June 17, 2008); 

CFTC Staff Letter No. 08–10 (July 3, 2008). 

12The no-action letters include a provision 

pursuant to which the Division may further 

condition the relief granted therein. See, e.g., CFTC 

Staff Letter No. 99–69 (November 12, 1999), issued 

to the International Petroleum Exchange, Inc., 

which states as follows: ‘‘As with all no-action 

letters, the Division retains the authority to 

condition further, modify, suspend, terminate, or 

otherwise restrict the terms of the no-action relief 

provided herein, in its discretion.’’ 

13 In 2008 Congress authorized the Commission to 

determine, in its discretion, that a contract performs 

a significant price discovery function under criteria 

established in Section 2(h)(7) of the CEA, including 

price linkage, arbitrage, material price reference, 

and material liquidity. When the Commission by 

order makes such a determination, the ECM on 

which the significant price discovery contract is 

traded must assume, with respect to that contract, 

all the responsibilities and obligations of a 

registered entity under the CEA and Commission 

regulations, and must comply with nine core 

principles established by Section 2(h)(7)(C). See 

CFTC Reauthorization Act of 2008, Pub. L. 110–246 

at sec. 12304. See also Notice of Proposed 

Rulemaking: ‘‘Significant Price Discovery Contracts 

on Exempt Commercial Markets,’’ 73 FR 75888 

(December 12, 2008). 

14 ICE Futures Europe has listed for trading by 

direct access from the U.S. the four linked contracts 

previously identified. DME has not listed the one 

linked contract notified to the Division. 

than the business day preceding the 

initial listing of the contracts: (1) A copy 

of the initial terms and conditions of the 

additional contracts and (2) a 

certification that it is in compliance 

with the terms and conditions of its noaction letter and that the additional 

futures and option contracts would be 

traded in accordance with such terms 

and conditions.7 On April 14, 2006, in 

light of its experience since the issuance 

of the Statement of Policy and in 

recognition of the fact that the listing of 

new products may raise previously 

unidentified regulatory issues, the 

Commission issued a revision to the 

new contract listing policy (Notice of 

Revision).8 The Commission determined 

to establish a ten business day advance 

notification requirement in order to give 

Commission staff the opportunity to 

review the terms and conditions of 

proposed additional contracts to address 

any regulatory issues raised prior to the 

contract being made available for 

trading by direct access from the U.S. 

II. Additional Conditions on the NoAction Relief 

On January 17, 2006, ICE Futures 

Europe 9 notified the Division pursuant 

to the Statement of Policy of its intent 

to list for direct access from the U.S. a 

West Texas Intermediate (WTI) Light 

Sweet Crude Oil Futures Contract that 

cash-settled on the price of a physicallysettled Light Sweet Crude Oil Futures 

contract traded on the New York 

Mercantile Exchange (NYMEX), a U.S. 

DCM. On April 12, 2006, ICE Futures 

Europe notified the Division of its intent 

to list for direct access from the U.S. the 

ICE Futures New York Harbour Heating 

Oil Futures Contract and the ICE 

Futures New York Harbour Unleaded 

Gasoline Blendstock (RBOB) Futures 

Contract, each of which cash-settled on 

the price of physically-settled contracts 

traded on the NYMEX. On April 2, 

2007, ICE Futures Europe notified the 

Division of its intent to launch the ICE 

Futures WTI Light Sweet Crude Oil 

Options Contract. On December 19, 

2007 the Dubai Mercantile Exchange 

(DME) 10 notified the Division pursuant 

to the Notice of Revision of its intent to 

list for trading for direct access from the 

U.S. on DME Direct the DME WTI Crude 

Oil Financial Futures Contract which 

cash-settled based on the NYMEX Light, 

Sweet Crude Oil futures settlement 

price on the penultimate trading day. 

The listing for trading by direct access 

from the U.S. by ICE Futures Europe 

and DME of contracts which settle on 

the price of contracts traded on a CFTCregulated exchange raises very serious 

concerns for the Commission. Such 

linkages can create virtually a single 

market for the subject contracts 

consisting of both the underlying 

contract at the CFTC-regulated exchange 

and the cash-settled ‘‘look-alike’’ 

contract traded on the FBOT. In the 

absence of certain preventive measures 

at the FBOT, this contract linkage could 

compromise the Commission’s ability to 

carry out its market surveillance 

responsibilities, as well as the integrity 

of prices established on CFTC-regulated 

exchanges. 

In response to these concerns, the 

Division amended the no-action relief 

granted to ICE Futures Europe and DME, 

in letters dated June 17, 2008 and July 

3, 2008 respectively,11 by adding certain 

conditions 12 with respect to any ICE 

Futures Europe or DME contract which 

settles against any price, including the 

daily or final settlement price, of (1) a 

contract listed for trading on a DCM or 

DTEF, or (2) a contract listed for trading 

on an exempt commercial market (ECM) 

that has been determined to be a 

significant price discovery contract 13

(collectively, linked contracts).14 The 

purpose of the conditions is to ensure 

that ICE Futures Europe and DME apply 

to any linked contract comparable 

principles or requirements regarding the 

daily publication of trading information 

and the imposition of position limits or 

accountability levels for speculators as 

apply to the DCM, DTEF or ECM 

contract against which the linked 

contract settles. The conditions would 

also ensure that ICE Futures Europe and 

DME provide the Commission with 

information regarding the extent of 

speculative and nonspeculative trading 

in linked contracts that is comparable to 

the information provided to the 

Commission by DCMs, DTEFs or ECMs 

for publication of the Commitments of 

Traders Reports. 

Accordingly, the ICE Futures Europe 

and DME no-action letters were 

amended with respect to the linked 

contracts to include the following 

conditions, to be satisfied within 120 

days of the date of the amended noaction letter: 

(1) ICE Futures Europe (DME) will 

impose on linked contracts, by rule or 

otherwise, position limits or position 

accountability levels (including related 

hedge exemption provisions) that are 

comparable to the existing position 

limits or position accountability levels 

(including related hedge exemption 

provisions) as adopted by: (i) The DCM, 

DTEF or ECM for the contract against 

which the linked contract settles or (ii) 

the DCM, DTEF or ECM for a 

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3572 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Notices 

15 17 CFR 30, App. D. (2003), 68 FR 33623. 16This procedure also applies where the FBOT 

has permission to list the futures contract for 

trading by direct access but has not yet done so at 

the time it also decides to list the option contract. 

financially-settled equivalent of such 

contract; 

(2) ICE Futures Europe (DME) will 

inform the Commission in a quarterly 

report of any trader that had positions 

in a linked contract above the applicable 

ICE Futures Europe (DME) position 

limit, whether a hedge exemption was 

granted, and if not, whether a 

disciplinary action was taken; 

(3) ICE Futures Europe (DME) will 

publish daily trading information (e.g., 

settlement prices, volume, open interest, 

and opening and closing ranges) that is 

comparable to the daily trading 

information published by the DCM, 

DTEF or ECM for the contract against 

which the ICE Futures Europe (DME) 

contract settles; and 

(4) ICE Futures Europe (DME) will 

provide to the CFTC (through the 

Financial Services Authority (FSA) in 

the case of ICE Futures Europe), a daily 

report of large trader positions in each 

linked contract for all contract months 

in a form and manner that (a) can be 

fully integrated into the CFTC’s market 

surveillance systems, including full 

identification of each position’s 

beneficial owner comparable to the 

reporting that is provided by the DCM, 

DTEF, or ECM; and (b) can, (subject to 

any Memorandum of Understanding 

between the CFTC and FSA in the case 

of ICE Futures Europe), be fully 

integrated into the CFTC’s 

Commitments of Traders Report, 

including appropriate categorization of 

traders and their positions. 

The Commission is hereby providing 

notice that these conditions henceforth 

will be imposed on the no-action relief 

of any FBOT that lists for trading by 

direct access from the U.S. any futures 

or option contract which settles against 

any price, including the daily or final 

settlement price, of (1) a contract listed 

for trading on a DCM or DTEF, or (2) a 

contract listed for trading on an ECM 

that has been determined to be a 

significant price discovery contract. 

III. Listing Option Contracts 

Both the Statement of Policy and the 

Notice of Revision required separate 

notification for futures and option 

contracts in order to permit the 

contracts to be listed for direct access 

from the U.S. Thus, even if the futures 

contract is currently listed, the FBOT 

must separately notify the Division, 

pursuant to the ten business day 

advance notification requirement of the 

Notice of Revision, of its desire to list 

the option on that futures contract. In 

contrast, when the Commission’s Office 

of General Counsel (OGC) issues a noaction letter to allow the offer or sale of 

a FBOT-traded broad-based security 

index futures contract to persons 

located in the U.S., the option on that 

particular futures contract may also be 

offered or sold in the U.S. without any 

further regulatory action from OGC. 

This leads to an unusual situation when 

the FBOT, pursuant to Appendix D of 

Part 30,15 requests permission to list a 

futures contract for trading by direct 

access from the U.S. in the same noaction request letter in which the FBOT 

requests the OGC no-action position. 

When OGC issues the no-action letter, 

both the futures contract and the option 

on that contract may be offered or sold 

in the U.S. and, with the concurrence of 

the Division, the futures contract (but 

not the option on that futures contract) 

may be listed for direct access from the 

U.S. pursuant to the terms and 

conditions of the direct access no-action 

relief. The FBOT must then separately 

request permission from the Division to 

make the option contract available by 

direct access. 

In order to eliminate this 

inconsistency and to streamline the 

procedures for listing option contracts 

for direct access from the U.S., the 

Commission is hereby providing notice 

that the provisions in the Notice of 

Revision, insofar as they apply to 

options on futures contracts that are, or 

could be,16 listed for trading by direct 

access from the U.S. pursuant to the 

conditions of the FBOT’s no-action 

relief, are revised as follows: 

(1) If the option is on a broad-based 

security index futures contract which 

may be offered or sold in the U.S. and 

listed for direct access from the U.S. 

pursuant to a no-action letter issued by 

OGC, the option contract may be listed 

for direct access without further action 

by either the requesting FBOT or the 

Division. 

(2) If the option is on a futures 

contract that is neither a linked contract 

nor a broad-based security index futures 

contract which may be offered or sold 

in the U.S., the option contract may be 

listed for direct access merely by filing 

with Commission staff no later than the 

business day preceding the initial listing 

of the contract: (i) a copy of the initial 

terms and conditions of the additional 

contract and (ii) a certification that the 

FBOT is in compliance with the terms 

and conditions of its no-action letter 

and that the additional option contract 

would be traded in accordance with 

such terms and conditions. 

(3) If the option is on a futures 

contract that is a linked contract, the 

option contract may be listed for direct 

access merely by filing with 

Commission staff no later than the 

business day preceding the initial listing 

of the contract: (i) a copy of the initial 

terms and conditions of the additional 

contract and (ii) a certification that the 

FBOT is in compliance with the terms 

and conditions of its no-action letter, 

including the conditions specifically 

applicable to linked contracts, and that 

the additional option contract would be 

traded in accordance with such terms 

and conditions. 

Issued in Washington, DC on January 14, 

2009, by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

[FR Doc. E9–1153 Filed 1–16–09; 8:45 am] 

BILLING CODE 6351–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

Agency Information Collection 

Activities Under OMB Review 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Extension of an Existing 

Collection—3038–0007. 

SUMMARY: In compliance with the 

Paperwork Reduction Act (44 U.S.C. 

3501 et seq.), this notice announces that 

the Information Collection Request (ICR) 

abstracted below has been forwarded to 

the Office of Management and Budget 

(OMB) for review and comment. The 

ICR describes the nature of the 

information collection and its expected 

costs and burden; it includes the actual 

data collection instruments [if any]. 

DATES: Comments must be submitted on 

or before February 20, 2009. 

FOR FURTHER INFORMATION OR A COPY

CONTACT: William Penner, Division of 

Clearing and Intermediary Oversight, 

U.S. Commodity Futures Trading 

Commission, 1155 21st Street, NW., 

Washington, DC 20581, (202) 418–5407; 

Fax: (202) 418–5536; e-mail: 

wpenner@cftc.gov and refer to OMB 

Control No. 3038–0007. 

SUPPLEMENTARY INFORMATION: 

Title: Rules Relating to Regulation of 

Domestic Exchange-Traded Options 

(OMB Control No. 3038–0007). This is 

a request for extension of a currently 

approved information collection. 

Abstract: Rules Relating to Regulation 

of Domestic Exchange—Traded Options, 

OMB Control No. 3038–0007— 

Extension. 

The rules require futures commission 

merchants and introducing brokers (1) 

to provide their customers with 

mstockstill on PROD1PC66 with NOTICES