13836 Federal Register / Vol. 66, No. 45 / Wednesday, March 7, 2001 / Notices

• Posting of signs in lobbies and in

other waiting areas, in several

languages, informing applicants and

clients of their right to free interpreter

services and inviting them to identify

themselves as persons needing language

assistance.

• Use of ‘‘I speak’’ cards by intake

workers and other contact personnel so

that they can identify their primary

languages.

• Keeping the language of the LEP

person in his/her record if such a record

would normally be kept for non-LEP

persons so that all staff can identify the

language assistance needs of the client.

• Employment of a sufficient number

of staff, bilingual in appropriate

languages, in client contact positions.

These persons must be trained and

competent as interpreters.

• Contracts with interpreting services

that can provide competent interpreters

in a wide variety of languages, in a

timely manner.

• Formal arrangements with

community groups for competent and

timely interpreter services by

community volunteers.

• An arrangement with a telephone

language interpreter line.

• Translation of application forms,

instructional, informational and other

key documents into appropriate nonEnglish languages. Provision of oral

interpreter assistance with documents,

for those persons whose language does

not exist in written form.

• Procedures for effective telephone

communication between staff and LEP

persons, including instructions for

English-speaking employees to obtain

assistance from bilingual staff or

interpreters when initiating or receiving

calls from LEP persons.

• Notice to and training of all staff,

particularly client contact staff, with

respect to the recipient’s Title VI

obligation to provide language

assistance to LEP persons, and on the

language assistance policies and the

procedures to be followed in securing

such assistance in a timely manner.

• Insertion of notices, in appropriate

languages, about the right of LEP

applicants and clients to free

interpreters and other language

assistance, in brochures, pamphlets,

manuals, and other materials

disseminated to the public and to staff.

• Notice to the public regarding the

language assistance policies and

procedures, and notice to and

consultation with community

organizations that represent LEP

language groups, regarding problems

and solutions, including standards and

procedures for using their members as

interpreters.

• Adoption of a procedure for the

resolution of complaints regarding the

provision of language assistance; and for

notifying clients of their right to and

how to file a complaint under Title VI

with Treasury.

• Appointment of a senior level

employee to coordinate the language

assistance program, and assurance that

there is regular monitoring of the

program.

G. Compliance and Enforcement

Treasury will enforce recipients’

responsibilities to LEP beneficiaries

through procedures provided for in Title

VI regulations. These procedures

include complaint investigations,

compliance reviews, efforts to secure

voluntary compliance, and technical

assistance. Treasury will always provide

recipients with the opportunity to come

into voluntary compliance prior to

initiating formal enforcement

proceedings.

In determining compliance with Title

VI, Treasury’s concern will be whether

the recipient’s policies and procedures

allow LEP persons to overcome

language barriers and participate

meaningfully in programs, services and

benefits. A recipient’s appropriate use of

the methods and options discussed in

this guidance will be viewed by

Treasury as evidence of a recipient’s

intent to comply with Title VI.

H. Complaint Process

Anyone who believes that he/she has

been discriminated against because of

race, color or national origin in violation

of Title VI may file a complaint with

Treasury within 180 days of the date on

which the discrimination took place.

The following information should be

included:

• Your name and address (a

telephone number where you may be

reached during business hours is

helpful, but not required);

• A general description of the

person(s) or class of persons injured by

the alleged discriminatory act(s);

• The name and location of the

organization or institution that

committed the alleged discriminatory

act(s);

• A description of the alleged

discriminatory act(s) in sufficient detail

to enable the Office of Equal

Opportunity Program (OEOP) to

understand what occurred, when it

occurred, and the basis for the alleged

discrimination.

• The letter or form must be signed

and dated by the complainant or by

someone authorized to do so on his or

her behalf.

A recipient may not retaliate against

any person who has made a complaint,

testified, assisted or participated in any

manner in an investigation or

proceeding under the statutes governing

federal financial assistance programs.

Civil rights complaints should be filed

with: Department of the Treasury, Office

of Equal Opportunity Program 1500

Pennsylvania Avenue, NW, Room 6071

Metropolitan Square, Washington, DC

20220.

I. Technical Assistance

Treasury and its bureaus will provide

technical assistance to recipients, and

will continue to be available to provide

such assistance to any recipient seeking

to ensure that it operates an effective

language assistance program. In

addition, during its investigative

process, Treasury is available to provide

technical assistance to enable recipients

to come into voluntary compliance.

[FR Doc. 01–5412 Filed 3–6–01; 8:45 am]

BILLING CODE 4810–25–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

[BPG–132413–00]

Dealers in Securities Futures

Contracts; Request for Comments

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Notice of solicitation of

comments.

SUMMARY: The IRS and Treasury

Department are soliciting comments on

the criteria that should be used to

determine whether a taxpayer is a dealer

in securities futures contracts (or

options on such contracts) for purposes

of section 1256 of the Internal Revenue

Code.

DATES: Written and electronic comments

are requested on or before May 7, 2001.

ADDRESSES: Send submissions to:

CC:M&SP:RU (BPG–132413–00), room

5226, Internal Revenue Service, POB

7604, Ben Franklin Station, Washington,

DC 20044. Submissions may be hand

delivered between the hours of 8 a.m.

and 5 p.m. to: CC:M&SP:RU (BPG–

132413–00), Courier’s Desk, Internal

Revenue Service, 1111 Constitution

Avenue NW., Washington, DC.

Alternatively, taxpayers may submit

comments electronically via the Internet

by submitting comments directly to the

IRS Internet site at http://www.irs.gov/

tax_regs/regslist.html.

FOR FURTHER INFORMATION CONTACT:

Concerning the notice, Patrick E. White

Federal Register / Vol. 66, No. 45 / Wednesday, March 7, 2001 / Notices 13837

1The references here, and in the following

paragraphs, to traders are not intended to exclude

any taxpayers who are not treated as traders for tax

purposes but who may perform functions similar to

the functions performed by equity options dealers.

(202) 622–3920; concerning submission

and delivery of comments, Treena

Garrett, (202) 622–7180 (not toll-free

numbers).

SUPPLEMENTARY INFORMATION:

Background

The Commodities Futures

Modernization Act of 2000, enacted as

part of the Consolidated Appropriations

Act, 2001 (Public Law 106–554, 114

Stat. 2763), authorizes the trading of

securities futures contracts, a new type

of derivative financial product. Another

portion of the same enactment—the

Community Renewal Tax Relief Act of

2000 (the Act)—prescribes the tax

treatment of these financial products. In

general, gain or loss is recognized on

securities futures contracts upon

disposition, and the character of such

gain or loss is determined by newly

enacted section 1234B.

The timing and character of gains and

losses on dealer securities futures

contracts, however, is determined by

section 1256. Thus, dealer securities

futures contracts are subject to mark-tomarket treatment, and capital gains or

losses are treated as 60 percent longterm capital gain or loss and 40 percent

short-term capital gain or loss. Section

1256(g)(9) defines dealer securities

futures contracts as securities futures

contracts (and options on such

contracts) that are traded on a qualified

board or exchange and are entered into

by a dealer in the normal course of the

dealer’s business of dealing in such

contracts or options. For this purpose, a

person is a dealer in securities futures

contracts or options on such contracts if

the Secretary of the Treasury determines

that the person performs functions with

respect to such contracts or options

similar to the functions performed with

respect to stock options by persons

registered with a national securities

exchange as a market maker or specialist

in listed options. The Act requires the

Secretary of the Treasury or his delegate

to make this determination no later than

July 1, 2001.

The legislative history of the Act

states the following with respect to the

determination process:

The determination of who is a dealer in

securities futures contracts is to be made in

a manner that is appropriate to carry out the

purposes of the provision, which generally is

to provide comparable tax treatment between

dealers in securities futures contracts, on the

one hand, and dealers in equity options, on

the other. Although traders in securities

futures contracts (and options on such

contracts) may not have the same marketmaking obligations as market makers or

specialists in equity options, many traders

are expected to perform analogous functions

to such market makers or specialists by

providing market liquidity for securities

futures contracts (and options) even in the

absence of a legal obligation to do so.

Accordingly, the absence of market-making

obligations is not inconsistent with a

determination that a class of traders are

dealers in securities futures contracts (and

options), if the relevant factors, including

providing market liquidity for such contracts

(and options), indicate that the market

functions of the traders is comparable to that

of equity options dealers.

H.R. Conf. Rep. No. 106–1033, 106th

Cong., 2d Sess. 1036 (2000).

The IRS and Treasury Department,

therefore, seek taxpayers’ suggestions

concerning both the substance of these

determinations and the manner in

which they should be made. As

described in more detail below, of

particular interest are comments that

will aid in establishing objective criteria

and processes for making the

determinations. In addition, comments

are solicited in certain specific areas.

First, comments are requested about

the activities and obligations of equity

options dealers, especially those

activities and obligations that contribute

to the establishment and maintenance of

an orderly market. For purposes of this

notice, the term equity options dealer

means a market maker or specialist

described in section 1256(g)(8) with

respect to options that are described in

section 1256(g)(6) without regard to the

requirement that indices be narrow

based. Any relevant way in which the

activities and obligations of market

makers differ from those of specialists

should be described; and the

significance of this difference for any

comment or other response to this

notice should be explained when

relevant.

Among the questions on which

information is sought are the following:

What are the activities imposed on, or

undertaken by, equity option dealers

that are considered making a market? Do

equity option dealers engage in

activities that extend beyond making a

market but that contribute to the

establishment and maintenance of

orderly markets? For example, equity

options dealers trading for their own

accounts (and not in response to orders

placed by an off-exchange customer)

may be a significant source of market

volume. Is that the case? If so, to what

extent does this added volume

contribute to market liquidity? Are there

other ways in which these dealers

contribute to the markets in which they

participate? What differences are there,

in scale or kind, between the activities

of equity options dealers and similar

activities of other market participants?

Although some relevant activities of

equity options dealers may be ongoing,

other critical activities may commence,

or change significantly in nature or

scope, during periods of market

disequilibrium. Information with

respect to equity options dealers’

activities at these times will be

particularly welcome.

Second, information is requested

regarding activities of traders 1 on

futures markets. Although traders on

futures markets may not have specific

market-making obligations, their trading

activities may contribute to the

establishment and maintenance of

orderly markets. Is that typically the

case? Descriptions of trading activities

on futures markets generally will be

helpful, and insights and supporting

data on the nature and extent of trading

by specific groups of futures traders will

be particularly useful. Relevant groups

for this purpose may be based on the

type of contract traded, the extent of

trading for one’s own account (as

opposed to trading in response to orders

from off-exchange customers), and the

class of exchange membership.

This discussion should be

accompanied, if possible, by an

explanation of the extent to which the

activities of traders in securities futures

contracts are expected to resemble the

activities of the specific groups

described. In general, expectations of

how trading in securities futures

contracts may or may not differ from

trading in current products will also be

helpful.

Third, comments are solicited on

administrable and economically

meaningful criteria for identifying any

traders that should be treated as dealers

in securities futures contracts. Criteria

for identifying these persons might

include, among others, the nature and

extent of trading activities (including

the extent to which the person’s trading

is concentrated in certain products),

class of exchange membership, capital,

and share of net income derived from

trading activities. Should it be possible

for a person to be a dealer in securities

futures contracts with respect to some

such contracts but not with respect to

others?

If a taxpayer’s satisfaction of the

suggested criteria may vary over time,

comments are also requested respecting

rules for determining when a taxpayer

becomes, or ceases to be, a dealer in

securities futures contracts. For

example, should it be possible for the

13838 Federal Register / Vol. 66, No. 45 / Wednesday, March 7, 2001 / Notices

status as a dealer in securities futures

contracts to change within a single

taxable year or only between taxable

years? Does a taxpayer need to know

before it enters a transaction whether it

is treated as a dealer for purposes of that

transaction? Will special rules be

required for taxpayers who have not

previously traded in the contracts?

(Initially, all taxpayers fall into this

category.) Comments regarding both

substantive criteria and the method of

application will be useful.

Comments

Written or electronic comments (a

signed original and eight (8) copies, if

written) should be timely submitted (in

the manner described in the ADDRESSES

portion of this notice) to the IRS. All

comments will be available for public

inspection and copying.

Drafting Information

The principal authors of this notice

are Patrick E. White, Office of Associate

Chief Counsel (Financial Institutions

and Products), and Matthew J. Eichner,

Office of Tax Analysis, United States

Department of the Treasury. However,

other personnel from the IRS and

Treasury Department participated in its

development.

Lon B. Smith,

Acting Associate Chief Counsel (Financial

Institutions & Products).

[FR Doc. 01–5453 Filed 3–6–01; 8:45 am]

BILLING CODE 4830–01–P