Federal Register / Vol. 61, No. 19 / Monday, January 29, 1996 / Rules and Regulations 2719

1By February 9, 1987, the Commission had made

the programs permanent. Option trading on nonagricultural futures was made permanent effective

August 1, 1986. 51 FR 17464 (May 13, 1986); 51 FR

27529 (August 1, 1986). Option trading on

agricultural futures and options on non-agricultural

physicals were made permanent effective February

9, 1987. 52 FR 777 (January 9, 1987).

2For background on the NFA Clearinghouse, see

generally 58 FR 4949 (January 19, 1993).

3 It should be noted that on September 4, 1992,

the Commission proposed the deletion of two other

provisions in Regulation 33.4: Regulation

33.4(b)(4)(iii) and Regulation 33.4(b)(8). 57 FR

40626. On December 14, 1992, the deletion of these

two regulations became final. See 57 FR 58976.

Under these regulations, boards of trade designated

as contract markets for options were required to

adopt rules requiring member FCMs that engaged in

the offer or sale of commodity options regulated

under Part 33 to send copies of customer

complaints, the record of the final disposition

thereof, and copies of all promotional material to

the member’s DSRO.

4Currently, the exchanges are required to submit

hardcopy notices of disciplinary actions to the

Commission pursuant to Regulation 9.11.

Ultimately, however, it is anticipated that data will

be entered into the NFA Clearinghouse in lieu of

filing hardcopy notices. Until the Commission

permits such data entry directly into the NFA

Clearinghouse, in lieu of such filings, exchanges

must continue to file hardcopy notices with the

Commission within the 30-day requirement of

Regulation 9.11.

Issued in Washington, D.C. on January 22,

1996.

Jean A. Webb,

Secretary to the Commission.

[FR Doc. 96–1511 Filed 1–26–96; 8:45 am]

BILLING CODE 6351–01–P

17 CFR Part 33

Deletion of Option Regulation

Requiring That Futures Commission

Merchants Give Notification of

Disciplinary Actions to Their

Designated Self-Regulatory

Organizations; Regulation 33.4(b)(6)

AGENCY: Commodity Futures Trading

Commission.

ACTION: Final rule.

SUMMARY: The Commodity Futures

Trading Commission (‘‘Commission’’) is

amending 17 CFR Part 33 to delete

Regulation 33.4(b)(6), under which a

board of trade must adopt rules that

require each member futures

commission merchant (‘‘FCM’’) that

engages in the offer or sale of Part 33

option contracts to give notice to the

FCM’s designated self-regulatory

organization (‘‘DSRO’’) of any

disciplinary action taken against the

FCM or any of its associated persons by

the Commission or by another selfregulatory organization (‘‘SRO’’). The

purpose of this deletion is to eliminate

unnecessary recordkeeping

requirements affecting FCMs.

EFFECTIVE DATE: February 28, 1996.

FOR FURTHER INFORMATION CONTACT:

Kimberly A. Browning, Attorney,

Commodity Futures Trading

Commission, Division of Trading and

Markets, Three Lafayette Centre, 1155

21 Street NW., Washington, DC 20581.

Telephone (202) 418–5490.

SUPPLEMENTARY INFORMATION:

I. Background

Regulation 33.4(b)(6) is part of a group

of regulations that date from the

Commission’s three-year pilot program,

instituted by the Commission on

November 3, 1981, for the trading on

domestic exchanges of options on nonagricultural futures contracts. The

establishment of the pilot program was

the culmination of a long history of

Commission efforts to provide for the

trading of commodity options in a

regulated environment. Subsequently,

the Commission adopted a pilot

program that expanded the trading of

options to non-agricultural physical

commodities. 47 FR 65996 (December

22, 1982). On January 23, 1984, the

Commission adopted a separate threeyear pilot program that expanded the

trading of options on futures contracts

to domestic agricultural commodities.

49 FR 2752. Overall, the Commission

found that each pilot program had been

a success.1

Part 33 of the Commission’s

regulations governs domestic exchangetraded commodity option transactions.

Regulation 33.4, in conjunction with the

requirements of Section 5 of the

Commodity Exchange Act (‘‘Act’’), sets

forth the requirements which a board of

trade must meet in order to be

designated as a contract market for the

trading of option contracts. Part 33,

including Regulation 33.4, was adopted

concurrently with the initial

implementation of the first pilot

program in 1981. Under Regulation

33.4(b)(6), a board of trade must adopt

rules that require each member FCM

which engages in the offer or sale of Part

33 option contracts to give notice to the

FCM’s DSRO of any disciplinary action

taken against the FCM or any of its

associated persons by the Commission

or by another SRO.

By letter dated September 11, 1992,

the Chicago Board of Trade (‘‘CBT’’)

petitioned the Commission for deletion

of Regulation 33.4(b)(6). In support of its

petition, the CBT explained that, along

with other futures exchanges, it has

joined the National Futures Association

(‘‘NFA’’) in implementing a centralized

repository for the entry of information

on exchange disciplinary actions the

(‘‘NFA Clearinghouse’’).2 The CBT

stated that it believes that because the

NFA Clearinghouse includes data on

Commission, NFA and exchange

disciplinary actions, the reporting

requirements imposed on FCMs by

Regulation 33.4(b)(6) are now

duplicative and should be abolished.3

The NFA Clearinghouse went into

effect in late January 1991. At that time,

several exchanges began to file their

disciplinary action data electronically

into the NFA Clearinghouse database

through what the NFA refers to as the

exchange disciplinary action portion for

the NFA Clearinghouse. The NFA

Clearinghouse, which the exchanges

have entered into voluntarily, permits

the Commission and the exchanges to

enter and review disciplinary action

data, including disciplinary actions

taken against an FCM or any of its

associated persons by the Commission

or by another SRO, via computer

terminals at their respective locations.4

II. Proposed Rule

On January 19, 1993, the

Commission’s proposal to delete

Regulation 33.4(b)(6) was published in

the Federal Register (58 FR 4948). This

proposal was made in response to the

CBT’s September 11, 1992 petition for

deletion of Regulation 33.4(b)(6). The

Commission stated that the NFA

Clearinghouse appeared to satisfy the

objective of Regulation 33.4(b)(6) by

providing a repository for, among other

things, exchange disciplinary actions. In

making the proposal to delete

Regulation 33.4(b)(6), the Commission

stated that before it approved final

deletion of the regulation, it intended to

examine exchange and NFA refinements

to the operation of the NFA

Clearinghouse to determine whether the

system would serve the purpose of

Regulation 33.4(b)(6).

III. Comments Received

The Commission received one

comment letter, from the NFA, that

supported the proposed deletion of

Regulation 33.4(b)(6). The NFA

commented that it believes that

Regulation 33.4(b)(6) places an

unnecessary regulatory burden upon

FCMs because the Commission,

members of the public, and any DSRO

may already obtain disciplinary

information, without an FCM’s specific

disclosure, by accessing the NFA

Clearinghouse.

IV. Final Rule

Commission staff has been monitoring

each exchange’s use of the NFA

Clearinghouse. Since August 1991, the

majority of the exchanges have been
2720 Federal Register / Vol. 61, No. 19 / Monday, January 29, 1996 / Rules and Regulations

5The Commission’s deletion of the reporting

requirement is based, in part, on the existence of

the NFA Clearinghouse which provides an adequate

substitute mechanism by which SROs may obtain

disciplinary information. Should there be any

material changes in the operation of the NFA

Clearinghouse, the Commission would necessarily

evaluate the need for any supplementary reporting

requirements.

6The JCC was formed in May 1989 and consists

of senior compliance officials from each exchange

and the NFA. Commission staff is present at each

meeting as observers. The JCC was established to

aid the development of improved compliance

systems through joint exchange efforts and

information sharing among the self-regulators. In

addition, the JCC has undertaken efforts to enhance

exchange compliance with Commission regulations

by developing uniform standards and definitions

where appropriate.

7The ten uniform categories of rule violations

adopted by the JCC include: trade practice, sales

practice, speculative position limits, financial,

financial and position reporting, floor

recordkeeping, office recordkeeping, registration,

decorum and attire, and general conduct.

8Commission Regulation 1.63 prohibits an

individual from serving on exchange disciplinary

committees, oversight panels, arbitration panels or

governing boards who, among other things, was

found within the prior three years by a final

decision of a SRO, an administrative law judge, a

court of competent jurisdiction or the Commission

to have committed a disciplinary offense or who

currently is subject to an agreement with the

Commission or any SRO not to apply for

registration with the Commission or membership in

any SRO. For a complete listing of the conditions

under Commission Regulation 1.63 that prohibit an

individual from serving on such exchange

committees, panels, or boards, see 55 FR 7884

(March 6, 1990).

electronically filing their respective

disciplinary actions into the NFA

Clearinghouse in an accurate and timely

manner, including disciplinary actions

taken against an FCM or any of its

associated persons by the Commission

or by another SRO, thus satisfying the

purpose of Regulation 33.4(b)(6).

Typically, exchanges enter directly or

with the assistance of NFA, disciplinary

action data into the NFA Clearinghouse

in an accurate and timely manner.5

The disciplinary action data that the

exchanges have agreed to enter into the

NFA Clearinghouse by the NFA and that

are being entered include: (1) The

respondent’s name; (2) the rule number

violated and a description of the rule;

(3) which of the ten uniform categories

of rule violations adopted by the Joint

Compliance Committee (‘‘JCC’’),6

applies to the disciplinary action; 7 (4)

the date of the violation; (5) the effective

date of the disciplinary action; (6) the

sanction or penalty imposed on the

named respondent; (7) the name of the

exchange committee that imposed the

sanction; and (8) whether the offense

cited is one that renders the named

respondent ineligible from serving on an

exchange disciplinary committee,

oversight panel, arbitration panel or

governing board under the requirements

of Commission Regulation 1.63.8

In addition, on March 15, 1995, the

Commission advised the JCC that the

Clearinghouse must include exchange

membership denial actions and

requested that the exchange enter into

the Clearinghouse all membership

denial actions from January 1990 to the

present to bring the Clearinghouse upto-date. Currently, the exchanges are

entering such data into the

Clearinghouse.

V. Conclusion

The Commission believes that,

consistent with the other deletions

made of Regulation 33.4(b)(4)(iii) and

Regulation 33.4(b)(8), the requirements

set forth in Regulation 33.4(b)(6) also

should be deleted. The Commission also

believes that the NFA Clearinghouse

satisfies the objective of Regulation

33.4(b)(6) by providing an adequate

repository for, among other things,

exchange disciplinary actions. The

Commission no longer believes that it is

necessary for FCMs that engage in the

offer or sale of Part 33 option contracts

to give notice to the FCM’s DSRO of any

disciplinary action taken against the

FCM or any of its associated persons by

the Commission or by another SRO.

Accordingly, the Commission amends

17 CFR Part 33 by deleting Regulation

33.4(b)(6).

VI. Related Matters

A. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA)

5 U.S.C. 601 et seq., requires that

agencies, in proposing rules, consider

the impact of those rules on small

businesses. The Commission previously

has established that contract markets

and FCMs are not ‘‘small entities’’ for

purposes of the RFA. 47 FR 18618–

18621 (April 30, 1982). This deletion to

Part 33 will permit contract markets to

delete rules affecting FCMs and thereby

relieve them of that requirement.

B. Paperwork Reduction Act

The Paperwork Reduction Act of 1980

(‘‘PRA’’) 44 U.S.C. 3501 et seq., 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. In

compliance with the PRA, the

Commission previously submitted this

rule in proposed form and its associated

information collection requirements to

the Office of Management and Budget

(‘‘OMB’’). The OMB approved the

collection of information associated

with this rule on October 2, 1991 and

assigned OMB control number 3038–

0007 to the rule. While this rule has no

burden, the group of rules of which this

is a part has the following burden:

Average burden hours per response.......50.32.

Number of respondents .....................190,19.7.

Frequency of response .................on occasion.

Copies of the OMB approved

information collection package

associated with this rule may be

obtained from the Office of Management

and Budget, Room 3220, NEOB

Washington, DC, (202) 395–7340.

List of Subjects in 17 CFR Part 33

Regulation of domestic exchangetraded commodity option transactions.

In consideration of the foregoing and

pursuant to the authority contained in

the Act and, in particular, section 4(b)

of the Act, the Commission proposes to

amend Part 33 of Title 17 of the Code

of Federal Regulations as follows:

PART 33—REGULATION OF

DOMESTIC EXCHANGE-TRADED

COMMODITY OPTION TRANSACTIONS

1. The authority citation for Part 33

continues to read as follows:

Authority: 7 U.S.C. 2, 2a, 4, 6, 6a, 6b, 6e,

6f, 6g, 6i, 6j, 6k, 6l, 6m, 6n, 6o, 7, 7a, 7b, 8,

9, 11, 12a, 13a–1, 13b, 19, and 21, unless

otherwise noted.

§ 33.4 [Amended]

2. Section 33.4(b)(6) is removed.

Issued in Washington, DC, January 23,

1996 by the Commodity Futures Trading

Commission.

Jean A. Webb,

Secretary of the Commission.

[FR Doc. 96–1509 Filed 1–26–96; 8:45 am]

BILLING CODE 6351–01–M

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 70

[SD–001; FRL–5406–1]

Clean Air Act Final Full Approval of

Operating Permits Program; State of

South Dakota

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final full approval.

SUMMARY: The EPA is promulgating final

full approval of the Operating Permits

Program submitted by the State of South

Dakota for the purpose of complying

with Federal requirements for an

approvable State Program to issue

operating permits to all major stationary

sources, and to certain other sources.

EFFECTIVE DATE: February 28, 1996.

ADDRESSES: Copies of the State’s

submittal and other supporting