82_FR_7751 82 FR 7738 - Technical Amendments to Rules on Registration and Review of Exchange Disciplinary, Access Denial or Other Adverse Actions

82 FR 7738 - Technical Amendments to Rules on Registration and Review of Exchange Disciplinary, Access Denial or Other Adverse Actions

COMMODITY FUTURES TRADING COMMISSION

Federal Register Volume 82, Issue 13 (January 23, 2017)

Page Range7738-7751
FR Document2017-01232

The Commodity Futures Trading Commission (``CFTC'' or ``Commission'') is proposing technical amendments to its regulations that govern registration and review of exchange disciplinary, access denial or other adverse actions. The amendments would integrate existing advisory guidance and the amendments to part 9 would also incorporate swap execution facilities (``SEFs'') and update provisions currently applicable to designated contract markets (``DCMs''). The proposal revises existing rules to delete numerous cross-references to previously deleted regulations and adds citations to applicable parallel provisions for SEFs and DCMs. Additionally, the proposal addresses the publication of final disciplinary and access denial actions taken by the SEFs and DCMs on their exchange Web sites.

Federal Register, Volume 82 Issue 13 (Monday, January 23, 2017)
[Federal Register Volume 82, Number 13 (Monday, January 23, 2017)]
[Proposed Rules]
[Pages 7738-7751]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-01232]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Parts 3 and 9

RIN 3038-AE15


Technical Amendments to Rules on Registration and Review of 
Exchange Disciplinary, Access Denial or Other Adverse Actions

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commodity Futures Trading Commission (``CFTC'' or 
``Commission'') is proposing technical amendments to its regulations 
that govern registration and review of exchange disciplinary, access 
denial or other adverse actions. The amendments would integrate 
existing advisory guidance and the amendments to part 9 would also 
incorporate swap execution facilities (``SEFs'') and update provisions 
currently applicable to designated contract markets (``DCMs''). The 
proposal revises existing rules to delete numerous cross-references to 
previously deleted regulations and adds citations to applicable 
parallel provisions for SEFs and DCMs.

[[Page 7739]]

Additionally, the proposal addresses the publication of final 
disciplinary and access denial actions taken by the SEFs and DCMs on 
their exchange Web sites.

DATES: Comments must be received on or before March 24, 2017.

ADDRESSES: You may submit comments, identified by RIN 3038-AE15, by any 
of the following methods:
     CFTC Web site: https://comments.cftc.gov. Follow the 
instructions for submitting comments through the Comments Online 
process on the Web site.
     Mail: Christopher Kirkpatrick, Secretary of the 
Commission, Commodity Futures Trading Commission, Three Lafayette 
Centre, 1155 21st Street NW., Washington, DC 20581.
     Hand Delivery/Courier: Same as Mail, above.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    Please submit your comments using only one method.
    All comments must be submitted in English, or if not, accompanied 
by an English translation. Comments will be posted as received to 
www.cftc.gov. You should submit only information that you wish to make 
available publicly. If you wish the Commission to consider information 
that you believe is exempt from disclosure under the Freedom of 
Information Act (``FOIA''), a petition for confidential treatment of 
the exempt information may be submitted according to the procedures 
established in Commission regulation 145.9.
    The Commission reserves the right, but shall have no obligation, to 
review, pre-screen, filter, redact, refuse or remove any or all of your 
submission from www.cftc.gov that it may deem to be inappropriate for 
publication, such as obscene language. All submissions that have been 
redacted or removed that contain comments on the merits of the 
rulemaking will be retained in the public comment file and will be 
considered as required under the Administrative Procedure Act and other 
applicable laws, and may be accessible under the FOIA.

FOR FURTHER INFORMATION CONTACT: Rachel Berdansky, Deputy Director, 
Division of Market Oversight, at 202-418-5429 or [email protected]; 
or David Steinberg, Associate Director, Division of Market Oversight, 
at 202-418-5102 or [email protected], in each case, at the Commodity 
Futures Trading Commission, Three Lafayette Centre, 1151 21st Street 
NW., Washington, DC 20581.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background
    A. Description of Part 9
    B. DCM Final Rules and Part 8 Removal
    C. SEF Final Rules
II. Proposed Amendments to Regulations
    A. Introduction
    B. Part 9
    1. Commission Regulation 9.1: Scope of Rules
    2. Commission Regulation 9.2: Definitions
    3. Commission Regulation 9.4: Filing and Service; Official 
Docket
    4. Commission Regulation 9.11: Form, Contents and Delivery of 
Notice of Disciplinary or Access Denial Action
    5. Commission Regulation 9.12: Effective Date of Disciplinary or 
Access Denial Action
    6. Commission Regulation 9.13: Publication of Notice
    7. Commission Regulation 9.24: Petition for Stay Pending Review
    8. Commission Regulation 9.31: Commission Review of Disciplinary 
or Access Denial Action on Its Own Motion
    9. Minor Changes to Commission Regulations 9.3, 9.4, 9.8, and 
9.9
    C. Part 3
    1. Commission Regulation 3.31: Deficiencies, Inaccuracies, and 
Changes To Be Reported
III. Related Matters
    A. Regulatory Flexibility Act
    B. Paperwork Reduction Act
    C. Cost-Benefit Considerations
IV. Request for Comments

I. Background

A. Description of Part 9

    On December 20, 1978, the Commission adopted part 9 rules relating 
to the review of exchange disciplinary, access denial, or other adverse 
actions.\1\ The rules govern the process and procedures by which the 
Commission may review exchange disciplinary and access denial actions, 
detailing the appellate process under which such review will be 
instituted and conducted in cases where a person applies to the 
Commission for review. In addition to setting forth procedures and 
standards governing filing and service, motions, and settlement, the 
rules also cover the process by which exchanges must provide notice of 
the final disciplinary action to the subject of the disciplinary action 
and to the Commission, as well as the publication of such notice. As 
discussed below, DCMs and SEFs are already required to comply with the 
part 9 regulations.
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    \1\ 43 FR 59343 (Dec. 20, 1978).
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B. DCM Final Rules and Part 8 Removal

    In June 2012, the Commission implemented Core Principles and Other 
Requirements for Designated Contract Markets (``DCM Final Rules'').\2\ 
Commission regulation 38.2 of the DCM Final Rules provides that DCMs 
shall comply with all applicable regulations under Title 17 of the Code 
of Federal Regulations, except for certain exempt provisions.\3\ Part 9 
is not included in the list of exempt provisions. Furthermore, part 9 
applies to DCMs by defining ``exchange'' in Commission regulation 
9.2(c) for purposes of the rules as any board of trade which has been 
designated as a contract market.\4\
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    \2\ 77 FR 36612 (June 19, 2012).
    \3\ 77 FR 36697 (June 19, 2012); 17 CFR 38.2.
    \4\ 17 CFR 9.2(c).
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    Additionally, in the DCM Final Rules, the Commission adopted 
regulations in ``Subpart N--Disciplinary Procedures'' of part 38 to 
amend the disciplinary procedures applicable to DCMs.\5\ Several of the 
regulations adopted in subpart N of part 38 are similar to the text of 
the disciplinary procedures found in former part 8--exchange procedures 
for disciplinary, summary, and membership denial actions.\6\ In order 
to avoid confusion from the regulations containing two sets of 
disciplinary procedures for DCMs, the Commission removed part 8 from 
the regulations.\7\ As a result of this removal, the current part 9 
rules, which contain cross-references to part 8 throughout, are being 
updated in this rulemaking (``NPRM'' or ``Proposal'') to instead cite 
to parallel provisions now contained in part 37 for SEFs and part 38 
for DCMs.\8\
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    \5\ 17 CFR 38.700 through 38.712.
    \6\ 43 FR 41950 (Sept. 19, 1978); 17 CFR 38.700 through 38.712. 
For example, part 8 contained regulations 8.05 (Enforcement staff); 
8.08 (Disciplinary committee); and 8.20 (Final decision). Subpart N 
of part 38 has corresponding provisions: 38.701 (Enforcement staff); 
38.702 (Disciplinary panels); and 38.709 (Final decisions).
    \7\ Although Commission regulation 38.2 of the DCM Final Rules 
specifies that DCMs are not required to comply with part 8, the 
Commission removed part 8 to avoid any confusion resulting from the 
regulations containing two sets of exchange disciplinary procedures 
as part of the Adaption of Regulations to Incorporate Swaps 
Rulemaking. 17 CFR 38.2; and removal of part 8 at 77 FR 66304 (Nov. 
2, 2012).
    \8\ 17 CFR parts 9, 37, and 38. For example, in Commission 
regulation 9.2(k) the definition of ``summary action'' cites to 
Commission regulations 8.17(b), 8.25, and 8.27 which were removed 
along with the entirety of part 8. Proposed Commission regulation 
9.2(k) will instead cite to part 37, appendix B, Core Principle 2, 
paragraphs (a)(10)(vi), (a)(13), and (a)(14) [for SEFs] and part 38, 
appendix B, Core Principle 13, paragraphs (a)(4), (a)(6), and (a)(7) 
[for DCMs].
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C. SEF Final Rules

    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
(``Dodd-Frank Act'') repealed some sections of the Commodity Exchange 
Act (``CEA'' or ``Act''), amended others, and established new 
categories of Commission

[[Page 7740]]

registrants, including SEFs.\9\ Pursuant to the Dodd-Frank Act, the 
Commission adopted new rules in part 37 Core Principles and Other 
Requirements for Swap Execution Facilities (``SEF Final Rules'').\10\ 
The Commission notes that since the advent of the Dodd-Frank Act's new 
statutory framework for regulating swaps, it adopted a rulemaking 
(Adaptation of Regulations to Incorporate Swaps) implementing 
conforming changes to existing regulations to clarify those pre-Dodd-
Frank provisions, including those applicable to SEFs.\11\ Part 9, 
however, which also applies to SEFs, was not addressed in this 
rulemaking.\12\ As such, in regulation 37.2 of the SEF Final Rules, the 
Commission specified that SEFs shall comply with the requirements of 
part 9.\13\ Accordingly, for clarity purposes, this NPRM amends certain 
part 9 definitions and language which have not yet been addressed, to 
better integrate them into the post-Dodd-Frank regulatory regime.
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    \9\ See generally Dodd-Frank Wall Street Reform and Consumer 
Protection Act, Public Law 111-203, 124 Stat. 1376 (2010) available 
at http://www.cftc.gov/LawRegulation/OTCDERIVATIVES/index.htm; see 
also Dodd-Frank Act section 721(a)(50), adding CEA section 1a(50), 
codified at 7 U.S.C. 1a(50).
    \10\ 78 FR 33476 (June 4, 2013).
    \11\ 77 FR 66288 (Nov. 2, 2012).
    \12\ Id.
    \13\ See 78 FR 33476, 33479 (June 4, 2013); 17 CFR 37.2.
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II. Proposed Amendments to Regulations

A. Introduction

    This Proposal contains amendments of three different types: 
Ministerial, accommodating, and substantive. Most of the proposed 
amendments are purely ministerial--for instance, some of the proposed 
changes would update definitions in Commission regulation 9.2 to 
conform them to the CEA as amended by the Dodd-Frank Act as well as 
other sections of the Commission's regulations. Furthermore, as noted 
above, the citations to part 8 in the current part 9 rules would be 
replaced with the appropriate citations to regulations, guidance, and 
acceptable practices from parts 37 and 38.\14\ In a similar vein, one 
of the proposed amendments to Commission regulation 9.1 would remove 
the reference to section 5a(a)(11) of the CEA, since this section was 
eliminated by the passage of the Commodity Futures Modernization Act of 
2000 (``CFMA'').\15\
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    \14\ 17 CFR parts 37 and 38.
    \15\ Public Law 106-554, 114 Stat. 2763, sec. 110 (2000).
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    The proposed accommodating amendments do not impose any new 
obligations on SEFs; rather they clarify that SEFs, in addition to 
DCMs, must comply with part 9.\16\ This clarification would be 
accomplished by updating part 9's definition of ``exchange'' to include 
SEFs and to add swaps to language discussing the types of transactions 
from which an exchange disciplinary action might arise. These 
amendments are more than ministerial because they require some judgment 
in drafting. Another example of an accommodating amendment is the 
proposed formal codification of the part 3 and part 9 advisories and 
the Commission's delegation to the National Futures Association 
(``NFA'') of the responsibility to receive notice of final exchange 
disciplinary and access denial actions, in which the Commission 
encouraged exchanges to comply with the notice requirements in 
Commission regulation 9.11 (``9.11 notice'') by filing with the 
NFA.\17\ Additionally, the proposed amendment to Commission regulation 
9.11(b)(3)(ii) would codify the clarification contained in the Part 9 
Advisory that an exchange indicate in its notice of disciplinary or 
access denial actions whether the violation underlying the notice 
resulted in financial harm to any customers.\18\
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    \16\ 17 CFR part 9, Sec. Sec.  37.2 and 38.2.
    \17\ 64 FR 39913 (July 23, 1999) (``Part 9 Delegation''); 64 FR 
39912 (July 23, 1999) (``Part 3 Advisory''); 64 FR 39915 (July 23, 
1999) (``Part 9 Advisory''). As discussed more fully below in the 
preamble, the Part 9 Advisory permits exchanges to file 9.11 notices 
of final disciplinary or access denial actions with the Commission 
or with the NFA. The Part 9 Delegation gives the NFA authority to 
receive and process these notices on behalf of the Commission. 
Finally, the Part 3 Advisory relieves registrants and registrant 
applicants from Commission regulation 3.31 Form 3-R reporting 
obligations in instances when the information to be reported is 
solely the result of an exchange disciplinary or access denial 
action.
    \18\ 64 FR 39917 (July 23, 1999).
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    The remaining proposed amendments are generally substantive in that 
they include an additional element required to be included in the 
contents of a 9.11 notice and a material revision to Commission 
regulation 9.13 which currently requires exchanges to post notice of 
final exchange disciplinary action on the exchange's premises.\19\ 
First, as part 9 pertains to both DCMs and SEFs which offer a number of 
varied products for trading, the proposed amendment to Commission 
regulation 9.11 would require exchanges to include the type of product 
(as applicable) involved in the adverse action in the contents of the 
final notice. Second, the proposed amendment to Commission regulation 
9.13 would remove the requirement to post notice on the exchange's 
premises and instead require the exchange to post the notice on the 
exchange's Web site. Finally, as addressed above in the discussion of 
accommodating amendments, the Commission is proposing to codify the 
Part 9 Advisory. By specifying in the rule text that exchanges provide 
notice of final exchange disciplinary and access denial actions 
directly to the NFA, the Commission is eliminating the option for 
exchanges to file notice with the Commission.
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    \19\ 17 CFR 9.11 and 9.13.
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B. Part 9

1. Commission Regulation 9.1: Scope of Rules
    Commission regulation 9.1 governs the review by the Commission, 
pursuant to section 8c of the CEA, of any suspension, expulsion, 
disciplinary or access denial action, or other adverse action by an 
exchange.\20\ As noted above, the Commission is proposing a ministerial 
amendment to regulation 9.1(b)(1) by removing the reference to section 
5a(a)(11) of the CEA, since this section was eliminated by the passage 
of the CFMA.\21\
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    \20\ 7 U.S.C. 12c.
    \21\ Public Law 106-554, 114 Stat. 2763, sec. 110 (2000).
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    Commission regulation 9.1(b)(2) provides an exclusion from the part 
9 regulations with respect to the Commission's review of summary 
actions imposed by an exchange for a minor penalty for the violation of 
exchange rules relating to decorum, attire, or timely submission of 
accurate records required for clearing or verifying each day's 
transactions or similar activities. The Commission proposes to amend 
regulation 9.1(b)(2) by replacing the reference to regulation 8.27 with 
a reference to part 37 guidance pertaining to violations of rules 
regarding timely submission of records and part 38 guidance pertaining 
to summary fines for violations of rules regarding timely submission of 
records, decorum, or other similar activities.\22\
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    \22\ The proposed references would be to (i) part 37 guidance, 
17 CFR part 37, appendix B, Core Principle 2, paragraph (a)(13); and 
(ii) part 38 guidance, 17 CFR part 38, appendix B, Core Principle 
13, paragraph (a)(6).
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    Commission regulation 9.1(b)(3) provides an exclusion from the part 
9 regulations concerning any exchange action arising from a claim, 
grievance, or dispute involving cash market transactions which are not 
a part of, or directly connected with, any transaction for the 
purchase, sale, delivery or exercise of a commodity for future 
delivery, or a commodity option. The Commission proposes to amend 
regulation 9.1(b)(3) by inserting ``swap'' at the end of the paragraph 
to account

[[Page 7741]]

for swap transactions on a DCM or on a SEF as a result of the Dodd-
Frank Act.\23\ As noted above, the addition of ``swap'' language is a 
conforming amendment as it requires some judgment as to its inclusion.
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    \23\ Section 723(a)(3) of the Dodd-Frank Act added section 
2(h)(8) of the CEA to require, among other things, that execution of 
swaps subject to the clearing requirement of section 2(h)(1) of the 
CEA must occur on either a DCM or a SEF.
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    Commission regulation 9.1(c) provides for the applicability of part 
9 rules to matters filed with the Commission after August 6, 1987. In 
1987, the part 9 rules in place at the time were superseded and 
Commission regulation 9.1(c) governed whether an existing matter would 
be subject to the pre- or post-1987 part 9 rules. Such determination is 
no longer necessary because no pre-1987 matters are pending before the 
Commission. As a result, the Proposal seeks to remove text from 
Commission regulation 9.1(c) that governs whether a matter would be 
subject to the pre- or post-1987 part 9 rules.
2. Commission Regulation 9.2: Definitions
    The Commission proposes to revise the definition of four terms in 
regulation 9.2. First, the Commission proposes to revise the definition 
of ``disciplinary action'' in regulation 9.2(b) by deleting the 
reference to regulation 8.03(i). The Commission also proposes to remove 
the reference to ``member of an exchange'' and insert ``person'' in its 
place. The Commission believes it is necessary to expand the 
``disciplinary action'' definition to account for instances where an 
exchange imposes sanctions against a person that is not a member of the 
exchange. The Commission's proposal to include ``person'' in the 
``disciplinary action'' definition is consistent with the statutory 
language found in Core Principle 2 for DCMs and section 8c(b) of the 
CEA, as amended by the Dodd-Frank Act.\24\
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    \24\ Section 735 of the Dodd-Frank Act amends section 5 of the 
CEA, including DCM Core Principle 2. Paragraph (B)--Capacity of 
Contract Market--of Core Principle 2 specifically requires that the 
board of trade shall have the capacity to detect, investigate, and 
apply appropriate sanctions to any person that violates any rule of 
the contract market. Section 8c(b) of the CEA, 7 U.S.C. 12c(b), 
provides that the Commission may, in its discretion and in 
accordance with such standards and procedures as it deems 
appropriate, review any decision by an exchange whereby a person is 
suspended, expelled, disciplined, or denied access to the exchange. 
In addition, section 8c(b) of the CEA provides that the Commission 
may, in its discretion and upon application of any person who is 
adversely affected by any other exchange action, review such action.
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    Second, the Commission proposes to amend the definition of 
``exchange'' in regulation 9.2(c) to include SEFs. This change would 
make clear that the Commission has the discretion to review adverse 
actions imposed by a SEF and clarify that SEFs are subject to all of 
the part 9 requirements.\25\
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    \25\ Id. The Commission notes that regulation 37.2 requires, 
among other things, that a SEF shall comply with the part 9 
regulations. 17 CFR 37.2. Additionally, footnote 40 of the SEF Final 
Rules states ``the term `exchange' used in part 9 of the 
Commission's regulations should be interpreted to include a SEF for 
purposes of applying the requirements of part 9 to a SEF.'' 78 FR 
33476, 33479 (June 4, 2013).
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    Third, the Commission proposes to amend regulation 9.2(f) to expand 
the definition of ``member of an exchange'' to include any person who 
has trading privileges on an exchange. This change is necessary to 
conform the part 9 definition of ``member'' to the meaning set forth in 
section 1a(34) of the CEA and in Sec.  1.3(q) of the Commission's 
regulations.\26\
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    \26\ Section 1a(34) of the CEA provides that the term ``member'' 
means, among other things, an individual, association, partnership, 
corporation, or trust having trading privileges on the registered 
entity. See also 17 CFR 1.3(q). By amending the definition of 
``member of an exchange'' to include all persons with trading 
privileges, the Commission is clarifying that the appellate process 
and Commission review, as defined in part 9, would apply to all 
persons with trading privileges.
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    Fourth, the Commission proposes to amend the definition of 
``summary action'' in regulation 9.2(k) by adding references to part 37 
for SEFs and replacing the part 8 references with the relevant 
provisions from part 38.\27\
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    \27\ Specifically, the proposed definition of ``summary action'' 
means a disciplinary action resulting in the imposition of a penalty 
on a person for violation of rules of the exchange permitted under 
the provisions of part 37, appendix B, Core Principle 2, paragraph 
(a)(10)(vi) or part 38, appendix B, Core Principle 13, paragraph 
(a)(4) (penalty for impeding progress of hearing); part 37, appendix 
B, Core Principle 2, paragraph (a)(14) or part 38, appendix B, Core 
Principle 13, paragraph (a)(7) (emergency disciplinary actions); 
part 37, appendix B, Core Principle 2, paragraph (a)(13) (summary 
fines for violations of rules regarding timely submission of 
records); or part 38, appendix B, Core Principle 13, paragraph 
(a)(6) (summary fines for violations of rules regarding timely 
submission of records, decorum, or other similar activities).
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3. Commission Regulation 9.4: Filing and Service; Official Docket
    Commission regulation 9.4(a) describes the procedures for filing 
any document required by part 9 to be filed with the Commission 
Procedures Clerk, including proof of filing and proof of service. To 
ease the burden on parties, the Commission proposes to amend regulation 
9.4(a) by replacing the requirement of a formal affidavit of service 
with the requirement that parties submit a signed ``statement of 
service'' that: (1) Confirms that service has been made; (2) identifies 
each person served; (3) sets forth the date of service; and (4) recites 
the manner of service. The less formal and less burdensome statement of 
service effectively serves the same purpose as an affidavit of service 
(i.e., promoting and assuring the full exchange of information among 
the parties by requiring service of submissions on all of the parties 
in the proceeding). Additionally, the Commission proposes to amend 
regulation 9.4(b)(1) to reduce the burden on parties by requiring an 
original and one copy (instead of two copies) of all documents filed 
with the Commission.
4. Commission Regulation 9.11: Form, Contents and Delivery of Notice of 
Disciplinary or Access Denial Action
    Commission regulation 9.11(a) requires that whenever an exchange 
makes a decision, pursuant to which disciplinary action or access 
denial to be imposed has become final, the exchange must provide 
written notice of such action to the person against whom the action was 
taken and to the Commission within 30 days thereafter. In 1999, the 
Commission delegated authority to the NFA to receive and process 
exchange disciplinary and access denial information (``Part 9 
Delegation'').\28\ Consequently, the NFA currently serves as the 
official custodian of records for exchange disciplinary filings. The 
Commission intends to again delegate authority to the NFA, via an 
updated order to be published concurrently with the final rule, to 
receive and process exchange disciplinary and access denial 
information. The Commission proposes to issue an updated order that 
includes specific duties delegated to the NFA, such as: (1) To process 
exchange disciplinary information; (2) to provide the Commission with 
access to a report summarizing all recent exchange disciplinary 
information; (3) to assist the Commission in enforcing exchange 
compliance with regulation 9.11 filing requirements; and (4) to serve 
as the official custodian of a database containing records of the 
exchanges' disciplinary and access denial actions.
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    \28\ 64 FR 39913 (July 23, 1999). The NFA created the Background 
Affiliation Status Information Center (``BASIC'') system through 
which the public can access information pertaining to the types of 
violations committed, penalties imposed, the effective date of the 
action, and, in some cases, the text from the exchange's decision.
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    In 1999, concurrent with the Part 9 Delegation, the Commission 
published an advisory permitting exchanges to file 9.11 notices with 
the Commission or the NFA (``Part 9 Advisory'').\29\ While

[[Page 7742]]

permitting filing with the Commission, the Part 9 Advisory encourages 
exchanges to file the required notice with the NFA and to do so 
electronically as the Commission believes such filing to be faster and 
more cost-effective for both the exchanges and the NFA. In an effort to 
codify the Part 9 Advisory and formally replace the regulation 9.11 
requirement that written notice be provided to the Commission, the 
Commission proposes to amend regulation 9.11 to require that notice be 
provided to the NFA via the NFA's BASIC system and eliminate the option 
of filing the notice with the Commission.
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    \29\ 64 FR 39915 (July 23, 1999).
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    Additionally, the Commission proposes to amend regulation 9.11(a) 
by replacing the reference to regulation 8.27 with a reference to part 
38.\30\
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    \30\ Specifically, the reference to Commission regulation 8.27 
would be replaced with a reference to part 38, appendix B, Core 
Principle 13, paragraph (a)(6) (summary fines for violations of 
rules regarding timely submission of records, decorum, or other 
similar activities) for DCMs. Under the current rule and in the 
proposed rule, DCMs would not be required to report summary fines 
with respect to violations related to decorum or attire. Decorum or 
attire violations do not apply to SEFs. Accordingly, SEFs are 
required to report all disciplinary and access denial actions to 
BASIC.
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    Commission regulation 9.11(b) sets forth the content that must be 
included in the disciplinary notice. The Commission proposes 
ministerial and conforming amendments to regulation 9.11(b) by 
inserting references to part 37, replacing the references to part 8 
with references to part 38, codifying the Part 9 Advisory clarification 
that the contents of the notice include whether the violation resulted 
in customer harm, and specifying the content of notices provided to: 
(1) The person against whom the action was taken and (2) the NFA. 
Additionally, for the sake of clarity, the Commission is proposing to 
renumber regulation 9.11(b) by assigning separate paragraphs 9.11(b)(1) 
to specify the notice to be provided by DCMs, 9.11(b)(2) to specify the 
notice to be provided by SEFs, and 9.11(b)(3) to detail the list of 
items to be included in the contents of the notice.
    Furthermore, the Commission is proposing a substantive amendment to 
regulation 9.11(b)(3)(ii) by adding an additional element required to 
be included in the contents of the notice. Because part 9 pertains to 
both DCMs and SEFs, which offer a number of varied products for 
trading, the Commission believes that requiring exchanges to detail the 
type of product (as applicable) involved in the adverse action as part 
of the 9.11 notice will provide the Commission, market participants, 
the public, and other exchanges with greater transparency concerning 
where market abuses originate and whether the abuses are concentrated 
among certain product types.\31\ Specifically, proposed Commission 
regulation 9.11(b) provides that for purposes of part 9, the notice of 
disciplinary action or access denial action provided to the person 
against whom the action was taken may be a copy of a decision which 
accords with part 37 and part 38 regulations and guidance.\32\ 
Alternatively, the notice provided to the person against whom the 
action was taken must include: (i) The name of the individual against 
whom the action was taken; (ii) a statement of the reasons for the 
action, detailing the exchange product which was involved, as 
applicable, and whether the violation that resulted in the action also 
resulted in financial harm to any customers together with a list of any 
rules which the individual was charged with having violated or which 
otherwise serve as the basis of the action; (iii) a statement of the 
exchange's conclusions and findings regarding each violation charged 
or, in the event of a settlement, a statement specifying those rule 
violations which the exchange believes were committed; (iv) the terms 
of the action; (v) the date the action was taken and the date the 
action will become effective; and (vi) a statement informing the party 
subject to the action of the availability of Commission review pursuant 
to section 8c of the CEA. Additionally, the Commission proposes to 
amend regulation 9.11(b) by requiring that notice provided to the NFA 
include items (i)-(v) immediately above.
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    \31\ For example, a product trading on a DCM might be specified 
as a July 2016 Eurodollar future; while a product trading on a SEF 
may be a CDX North American High Yield Series 26 5 year.
    \32\ The notice required by Commission regulation 9.11 may be 
satisfied by providing a copy of the final decision in accordance 
with part 37, appendix B, Core Principle 2, paragraph (a)(9) or part 
38, appendix B, Core Principle 13, paragraph (a)(3) (settlement 
offers); Commission regulations 37.206(d) or 38.708 (decisions); or 
part 37, appendix B, Core Principle 2, paragraph (a)(11)(iv) or part 
38, appendix B, Core Principle 13, paragraph (a)(5)(iv) (appeal 
decisions).
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    Commission regulation 9.11(c) sets forth the delivery process that 
must be followed when providing notice of disciplinary action or access 
denial action to the person who was the subject to the action, and the 
filing process that must be followed when providing notice of the 
action to the Commission. The Commission proposes to amend regulation 
9.11(c) by deleting instructions for filing notice with the Commission 
and replacing them with instructions for filing notice with the NFA. 
Specifically, proposed Commission regulation 9.11(c) provides that 
filing of the notice with the NFA is accomplished when an authorized 
exchange employee verifies the accuracy of the information entered into 
BASIC.
    Commission regulation 9.11(d) sets forth the effect of delivery and 
filing by mail. The Commission proposes to amend regulation 9.11(d) by 
deleting instructions related to filing notices with the Commission by 
mail since proposed regulation 9.11(c) calls for notice filings be made 
to the NFA via BASIC instead of with the Commission by mail.
    Commission regulation 9.11(e) sets forth the procedures for 
certifying the notice provided pursuant to Commission regulation 9.11. 
The Commission proposes to amend regulation 9.11(e) by adding 
instructions for the certification of notice filed with the NFA. 
Specifically, proposed Commission regulation 9.11(e) provides that 
notice filed with the NFA is deemed certified when an authorized 
exchange employee verifies the accuracy of the information entered into 
BASIC.
5. Commission Regulation 9.12: Effective Date of Disciplinary or Access 
Denial Action
    Pursuant to Commission regulation 9.12(a), a disciplinary action or 
access denial imposed by an exchange will not become effective until at 
least 15 days after the written notice prescribed by Commission 
regulation 9.11 is delivered to the person disciplined or denied 
access. However, an exchange may cause a disciplinary action to become 
effective prior to that time under certain circumstances that are 
identified in Commission regulation 9.12(a)(1)-(a)(4). The Commission 
proposes to amend regulation 9.12(a)(1)-(a)(4) by adding references to 
part 37 and replacing references to part 8 with references to part 
38.\33\
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    \33\ Specifically, the Commission proposes to amend regulation 
9.12(a)(1) by adding a reference to part 37, appendix B, Core 
Principle 2, paragraph (a)(14) (emergency disciplinary actions) and 
replacing the reference to regulation 8.25 with a reference to Part 
38, appendix B, Core Principle 13, paragraph (a)(7) (emergency 
disciplinary actions). In regulation 9.12(a)(2), the Commission 
proposes to add a reference to part 37, appendix B, Core Principle 
2, paragraph (a)(10)(vi) (hearings) and replace the reference to 
regulation 8.17(b) with a reference to part 38, appendix B, Core 
Principle 13, paragraph (a)(4) (hearings). The Commission proposes 
to amend regulation 9.12(a)(3) by adding a reference to part 37, 
appendix B, Core Principle 2, paragraph (a)(13) (summary fines for 
violations of rules regarding timely submission of records) and 
replacing the reference to regulation 8.27 with a reference to part 
38, appendix B, Core Principle 13, paragraph (a)(6) (summary fines 
for violations of rules regarding timely submission of records, 
decorum, or other similar activities).

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[[Page 7743]]

    Pursuant to Commission regulation 9.12(b), an exchange that 
determines that a disciplinary action will become effective prior to 
the expiration of 15 days after written notice must notify the person 
disciplined in writing either personally or by telegram or other means 
of written telecommunication. The exchange must also immediately notify 
the Commission by telegram or other means of written telecommunication. 
In order to modernize regulation 9.12(b), the Commission proposes to 
replace references to ``telegram or other means of written 
telecommunication'' with the term ``email'' and provide a Commission 
email address where notice of the early effective date can be sent by 
the exchange.
6. Commission Regulation 9.13: Publication of Notice
    Pursuant to Commission regulation 9.13, whenever an exchange 
suspends, expels or otherwise disciplines, or denies any person access 
to the exchange, it must make public its findings by disclosing at 
least the information contained in the notice required by Commission 
regulation 9.11(b). An exchange also must make such findings public as 
soon as the disciplinary action or access denial action becomes 
effective in accordance with the provisions of Commission regulation 
9.12 by posting a notice in a conspicuous place on its premises to 
which its members and the public regularly have access for a period of 
five consecutive business days. The exchange must also maintain and 
make available for public inspection a record of the information 
contained in the disciplinary or access denial notice.
    The Commission notes that regulation 9.13 was published in 1987, at 
a time when futures trading occurred primarily in person in the 
exchange's trading pits and on exchange premises. Therefore, posting 
notice of disciplinary action or access denial action on exchange 
premises, where it could be readily viewed by market participants, was 
an effective form of publicizing the disciplinary action. Today, most 
trading on DCMs and some of the trading on SEFs occurs by electronic 
execution. While some SEF trading is executed via a voice component, 
both electronic and voice execution occurs between market participants 
that are in geographically distinct locations and generally do not set 
foot on exchange premises. Consequently, posting a notice of 
disciplinary action on the premises of an exchange does little to 
publicize a disciplinary action. In an effort to modernize Commission 
regulation 9.13, and to provide better notice of a disciplinary action 
or an access denial action, the Commission proposes to amend regulation 
9.13 to require such notice be posted on an exchange's Web site to 
which its members, market participants, and the public regularly have 
access.\34\ In addition, to better inform market participants and 
maintain a public record of disciplinary action taken by an exchange, 
the Commission proposes to amend regulation 9.13 to require that such 
notice of a disciplinary action or an access denial action be 
maintained and readily available on an exchange's Web site.\35\ As a 
result, the existing requirement to maintain and make available for 
public inspection a record of the information contained in the 
disciplinary or access denial notice would be eliminated.
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    \34\ The Commission acknowledges that many DCMs have already 
adopted more modern methods to publicize notices of disciplinary 
action. For example, the CME Group DCMs (Chicago Board of Trade 
(``CBOT''), Chicago Mercantile Exchange (``CME''), Commodity 
Exchange, Inc., (``COMEX''), and New York Mercantile Exchange, Inc. 
(``NYMEX'')) and ICE Futures U.S. notify subscribers of exchange 
disciplinary postings via email. The Commission also notes that the 
proposed amendment generally tracks the Securities and Exchange 
Commission's (``SEC'') standards for Release of Disciplinary 
Complaints, Decisions and Other Information in Financial Industry 
Regulatory Authority, Inc. (``FINRA'') Rule 8313, in which FINRA, 
with SEC approval, has established its standard for releasing to the 
public a copy of FINRA issued disciplinary complaints, decisions, 
and other disciplinary information. See FINRA Rule 8313 ``Release of 
Disciplinary Complaints, Decisions and Other Information,'' 
available at http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=3892. See also SEC Release 
No. 34-69825; File No. SR-FINRA-2013-018 (June 21, 2013).
    \35\ Some DCMs currently maintain records of disciplinary action 
on their Web sites. For example, CBOE Futures Exchange, LLC 
maintains a disciplinary decision database on its Web site that 
allows the public to review disciplinary decisions dating back to 
2012. The Commission notes that in the securities industry, the New 
York Stock Exchange maintains disciplinary notices as far back as 
1972.
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    The Commission recognizes that NFA BASIC presently acts as the 
central repository of all disciplinary action taken by DCMs and SEFs. 
However, such disciplinary information cannot be queried by a specific 
exchange. In general, the Commission believes that greater access to 
exchange disciplinary actions provides valuable guidance and 
information to market participants and potential market participants. 
Also, maintaining disciplinary actions on an exchange's public Web site 
can serve to further deter and prevent future misconduct and to improve 
overall compliance among market participants. In addition, market 
participants may use such information to educate themselves as to 
compliance matters, potential violations and related sanctions, as well 
as to revise their own compliance procedures involving similar business 
practices. Further, any market participant facing allegations of rule 
violations may access an exchange's existing disciplinary decisions to 
gain greater insight on related facts and sanctions. Finally, in an 
effort to enhance access to disciplinary information, the Commission 
anticipates that upon the effective date of the final part 9 rules, it 
will include links on its SmartCheck Web site to each exchange's Web 
site for posting notice of disciplinary action or access denial 
action.\36\
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    \36\ In November 2014, the CFTC launched the SmartCheck Web 
site. It connects investors to tools to check the registration, 
license, and disciplinary history of certain financial 
professionals. This collection of tools allows the responsible 
investor to confirm the credentials of investment professionals, 
uncover any past disciplinary history, and stay ahead of scam 
artists with news and alerts.
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7. Commission Regulation 9.24: Petition for Stay Pending Review
    Commission regulation 9.24 provides the procedures that a person 
disciplined or denied access by an exchange must follow in the event 
that a person petitions the Commission to stay a disciplinary or access 
denial action. The Commission proposes to amend regulation 9.24(a)(2) 
by adding a reference to part 37 and replacing the reference to part 8 
with a reference to part 38.\37\ In addition, the Commission proposes 
to remove the reference to regulation 8.26, which provided for 
emergency action hearing procedures, from regulation 9.24(a)(2), as the 
part 37 and 38 emergency disciplinary action guidance (cited above) 
provides for emergency action hearing procedures.
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    \37\ Specifically, the Commission proposes to add a reference to 
part 37, appendix B, Core Principle 2, paragraph (a)(14) (emergency 
disciplinary actions) and replace the reference to regulation 8.25 
with a reference to part 38, appendix B, Core Principle 13, 
paragraph (a)(7) (emergency disciplinary actions).
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8. Commission Regulation 9.31: Commission Review of Disciplinary or 
Access Denial Action on Its Own Motion
    Commission regulation 9.31(a) permits the specified Divisions at 
the Commission to request that an exchange file the record of an 
exchange proceeding and other documents applicable to an exchange 
proceeding with such Divisions, upon review of the

[[Page 7744]]

exchange notice specified in Commission regulation 9.11, in instances 
where the person disciplined or denied access by the exchange has not 
appealed the exchange decision to the Commission. The Commission 
proposes to amend regulation 9.31(a) to delete the reference to the 
Division of Clearing and Risk from the first sentence. This provision 
had previously been amended to replace an earlier reference to the 
Division [of] Clearing and Intermediary Oversight with references to 
the Division of Swap Dealer and Intermediary Oversight and the Division 
of Clearing and Risk, as the successors to the Division of Clearing and 
Intermediary Oversight. Given the current organizational 
responsibilities of the Divisions, it is not necessary to include the 
Division of Clearing and Risk in Commission regulation 9.31(a). The 
Division of Clearing and Risk does not typically review notices of 
exchange disciplinary or access denial actions filed pursuant to 
Commission regulation 9.11 but instead reviews reports regarding rule 
enforcement activities and sanctions imposed against clearing members 
by registered derivatives clearing organizations pursuant to Commission 
regulations 39.17(a)(3) and 39.19(c)(4)(xi). The Commission also 
proposes to amend regulation 9.31(a) by adding language that requires 
the exchange to provide information to the requesting Division in the 
manner requested by the Division and to the person who is the subject 
of the disciplinary or access denial action in the manner prescribed by 
regulation 9.11(c).
    The Commission also proposes to amend regulation 9.31(b) to replace 
reference to the ``Commission'' with ``NFA'' in the second sentence. 
Such replacement is necessary to conform Commission regulation 9.31(b) 
to proposed changes to Commission regulation 9.11 that call for a 
notice of disciplinary or access denial action to be provided to the 
NFA.
9. Minor Changes to Commission Regulations 9.3, 9.4, 9.8, and 9.9
    The Commission proposes to amend regulation 9.3 by correcting the 
referenced title of regulation 12.7 to read ``Ex parte communications 
in reparation proceedings.'' The Commission also proposes to amend 
regulations 9.4(b)(4) and (c)(3), 9.8(1), and 9.9(b)(3) and (4) to make 
them gender neutral.

C. Part 3

1. Commission Regulation 3.31: Deficiencies, Inaccuracies, and Changes 
To Be Reported
    Pursuant to Commission regulation 3.31, an applicant or registrant 
as a futures commission merchant, retail foreign exchange dealer, swap 
dealer, major swap participant, commodity trading advisor, commodity 
pool operator, introducing broker, floor trader that is a non-natural 
person or leverage transaction merchant shall promptly correct any 
deficiency or inaccuracy in Form 7-R or Form 8-R which has rendered the 
information contained therein non-current or inaccurate. These 
corrections must be made on Form 3-R and filed in accordance with the 
form's instructions (such instructions presently require that Form 3-R 
be filed with the NFA).
    In 1999, concurrent with the Part 9 Delegation and Part 9 Advisory, 
the Commission issued an advisory pertaining to part 3 of the 
Commission's regulations (``Part 3 Advisory''). The Part 3 Advisory 
relieves registrants and applicants for registrant status from filing a 
Form 3-R, as required under Commission regulation 3.31, if the 
information to be reported is solely the result of an exchange 
disciplinary or access denial action.\38\ The Part 3 Advisory also 
explains that the Commission has: (1) Permitted exchanges (via the Part 
9 Advisory) to file either electronic or written 9.11 notices with the 
NFA instead of the Commission and (2) delegated to the NFA (via the 
Part 9 Delegation) the duty to receive and process exchange 
disciplinary and access denial action information filed by the 
exchanges in accordance with Commission regulation 9.11. The Commission 
further explained that, as a result of the Part 9 Advisory and Part 9 
Delegation, the NFA possesses the exchange disciplinary and access 
denial action information that registrants and applicants for 
registration status would otherwise be required to include in Form 3-R. 
Therefore, to avoid duplicative reporting, the Part 3 Advisory advises 
all individuals and entities subject to Commission regulation 3.31 that 
they are relieved from Commission regulation 3.31 reporting obligations 
resulting from an exchange disciplinary or access denial action and 
reported by an exchange pursuant to a 9.11 notice.
---------------------------------------------------------------------------

    \38\ 64 FR 39912 (July 23, 1999).
---------------------------------------------------------------------------

    As discussed above, the Commission intends to again delegate 
authority to the NFA to receive and process exchange disciplinary and 
access denial information. Additionally, the Commission seeks to 
replace the Part 9 Advisory by proposing to amend regulation 9.11 to 
require that notice be provided to the NFA via the NFA's BASIC system. 
Similarly, the Commission intends to codify the Part 3 Advisory by 
proposing to amend the end of the first sentence of regulation 
3.31(a)(1) with language that relieves the following applicants or 
registrants from filing a Form 3-R if the information to be reported is 
solely the result of an exchange disciplinary or access denial action: 
Futures commission merchants (``FCMs''), retail foreign exchange 
dealers (``RFEDs''), swap dealers (``SDs''), major swap participants 
(``MSPs''), commodity trading advisors (``CTAs''), commodity pool 
operators (``CPOs''), introducing brokers (``IBs''), floor traders 
(``FTs'') that are non-natural persons or leverage transaction 
merchants (``LTMs'').

III. Related Matters

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA'') requires that agencies 
consider whether the regulations they propose will have a significant 
economic impact on a substantial number of small entities and, if so, 
provide a regulatory flexibility analysis respecting the impact.\39\ 
The part 9 rules proposed by the Commission will impact all SEFs and 
DCMs. The Commission has previously established certain definitions of 
``small entities'' to be used by the Commission in evaluating the 
impact of its regulations on small entities in accordance with the 
RFA.\40\ The Commission has also determined that DCMs and SEFs are not 
small entities for the purpose of the RFA.\41\
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    \39\ 5 U.S.C. 601 et seq.
    \40\ See 47 FR 18618 through 18621 (Apr. 30, 1982).
    \41\ See 47 FR 18618, 18619 (Apr. 30, 1982) (DCMs); 78 FR 33548 
(June 4, 2013) (SEFs).
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    The part 3 rules proposed herein would affect certain applicant or 
registrant FCMs, RFEDs, SDs, MSPs, CTAs, CPOs, IBs, FTs who are non-
natural persons, and LTMs who would no longer have to file a Form 3-R 
if the information to be reported is solely the result of an exchange 
disciplinary or access denial action. The Commission has previously 
determined that FCMs, RFEDS, SDs, MSPs, CPOs, and LTMs are not small 
entities for purposes of the RFA.\42\ Therefore, the requirements of

[[Page 7745]]

the RFA do not apply to those entities. With respect to CTAs, FTs, and 
IBs, the Commission has found it appropriate to consider whether such 
registrants should be deemed small entities for purposes of the RFA on 
a case-by-case basis, in the context of the particular Commission 
regulation at issue.\43\ As certain of these registrants may be small 
entities for purposes of the RFA, the Commission has considered whether 
this Proposal would have a significant impact on these registrants.
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    \42\ See Policy Statement and Establishment of Definitions of 
``Small Entities'' for Purposes of the Regulatory Flexibility Act, 
47 FR 18618 (Apr. 30, 1982) (FCMs and CPOs); Leverage Transactions, 
54 FR 41068 (Oct. 5, 1989) (LTMs); Regulation of Off-Exchange Retail 
Foreign Exchange Transactions and Intermediaries, 75 FR 55410, 55416 
(Sept. 10, 2010) (RFEDs); and Registration of Swap Dealers and Major 
Swap Participants, 77 FR 2613, 2620 (Jan. 19, 2012) (SDs and MSPs).
    \43\ See 47 FR 18620 (Apr. 30, 1982) (CTAs); Registration of 
Floor Traders; Mandatory Ethics Training for Registrants; Suspension 
of Registrants Charged With Felonies, 58 FR 19575, 19588 (Apr. 15, 
1993) (FTs); and Introducing Brokers and Associated Persons of 
Introducing Brokers, Commodity Trading Advisors and Commodity Pool 
Operators; Registration and Other Regulatory Requirements, 48 FR 
35248, 35276 (Aug. 3, 1983) (IBs).
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    The proposed amendment to Commission regulation 3.31 is technical 
and not substantive in nature. In 1999, the Commission published the 
Part 3 Advisory which relieved all applicants and registrants from 
filing a Form 3-R, as required under Commission regulation 3.31, if the 
information to be reported is solely the result of an exchange 
disciplinary or access denial action.\44\ As discussed in the preamble, 
the proposed amendment codifies the filing relief set forth in the Part 
3 Advisory and would not impose any new regulatory obligations on any 
registrant, including CTAs, FTs, and IBs. The Commission does not, 
therefore, expect small entities to incur any additional costs as a 
result of this Proposal. Consequently, the Commission finds that no 
significant economic impact on small entities will result from this 
Proposal.
---------------------------------------------------------------------------

    \44\ 64 FR 39912 (July 23, 1999).
---------------------------------------------------------------------------

    Accordingly, the Chairman, on behalf of the Commission pursuant to 
5 U.S.C. 605(b), certifies that the proposed rules will not have a 
significant economic impact on a substantial number of small entities.

B. Paperwork Reduction Act

1. Introduction
    The Paperwork Reduction Act of 1995 (``PRA'') 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.\45\ An agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid control number issued 
by the Office of Management and Budget (``OMB''). This NPRM contains 
recordkeeping and reporting requirements that are collections of 
information within the meaning of the PRA.
---------------------------------------------------------------------------

    \45\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

    The Proposal contains provisions that would qualify as collections 
of information, for which the Commission has already sought and 
obtained control numbers from the OMB. The titles for these collections 
of information are ``Part 38--Core Principles and Other Requirements 
for Designated Contract Markets'' (OMB Control Number 3038-0052) and 
``Part 37--Core Principles and Other Requirements for Swap Execution 
Facilities'' (OMB Control Number 3038-0074). If adopted, responses to 
these collections of information would be mandatory.
    As discussed below, the Commission is not seeking to amend 
information collections 3038-0052 or 3038-0074 because the Commission 
believes that the rule modifications proposed herein will not impose 
any new information collection requirements that require approval from 
OMB under the PRA. Accordingly, the Commission invites public comment 
on the accuracy of its estimate regarding the impact of proposed 
Commission regulation 9.11 on collections 3038-0052 and 3038-0074 and 
its determination that no additional recordkeeping or information 
collection requirements or changes to existing collection requirements 
would result from the Proposal.\46\
---------------------------------------------------------------------------

    \46\ For collection 3038-0052, see OMB Control No. 3038-0052, 
available at http://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=3038-0052. For collection 3038-0074, 
see OMB Control No. 3038-0074, available at http://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=3038-0074.
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2. Section 9.11 Amendments

    As discussed above, the proposed Commission regulation 9.11 
amendments are primarily technical and not substantive in nature. 
Commission regulation 9.11 currently requires that whenever an exchange 
makes a decision, pursuant to which disciplinary action or access 
denial to be imposed has become final, the exchange must provide 
written notice of such action to the person against whom the action was 
taken and to the Commission within 30 days thereafter. Among the 
proposed amendments to regulation 9.11, the Commission is clarifying 
the existing rules to formally incorporate SEFs under the requirements 
and therefore include references to the part 37 SEF regulations.\47\
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    \47\ 17 CFR part 37. As explained earlier in the preamble, SEFs 
are already subject to the part 9 reporting requirements under 
regulation 37.2, in which the Commission specified that SEFs shall 
comply with the requirements of part 9.
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    Furthermore, the Commission is proposing to add an additional 
element required to be included in the contents of the notice 
specifying which product type (as applicable) was involved in the 
adverse action. The Commission believes that by adding such additional 
element to the contents of the notice its impact on the burden would be 
de minimis. For example, to describe a product trading on a DCM, the 
notice might include the description, ``July 2016 Eurodollar future;'' 
while a product trading on a SEF may be a ``CDX North American High 
Yield Series 26 5 year.'' Additionally, as a result of the Commission's 
removal of part 8, the Commission is proposing to remove all cross-
references in regulation 9.11 to the part 8 regulations and replace 
these references with applicable regulations, guidance, and acceptable 
practices from parts 37 and 38.\48\ Finally, in 1999, the Commission 
published the Part 9 Advisory permitting exchanges to file 9.11 notices 
with the Commission or with the NFA.\49\ In an effort to codify the 
Part 9 Advisory and formally replace the regulation 9.11 requirement 
that written notice be provided to the Commission, the Commission 
proposes to amend regulation 9.11 to require notice be provided to the 
NFA via the BASIC system.
---------------------------------------------------------------------------

    \48\ Removal of part 8 at 77 FR 66288, (Nov. 2, 2012); and 17 
CFR parts 37 and 38.
    \49\ 64 FR 39915 (July 23, 1999).
---------------------------------------------------------------------------

3. Clarification of Collections 3038-0052 and 3038-0074
    The Commission notes that all DCMs and SEFs are already subject to 
the part 9 reporting requirements.\50\ First, part 9 applies to DCMs, 
by explicitly defining ``exchange'' in Commission regulation 9.2(c) for 
purposes of the rules as ``any board of trade which has been designated 
as a contract market.'' \51\ Furthermore, former regulation 38.2, which 
was adopted by the Commission on August 10, 2001, specifically required 
DCMs to comply with part 9 (``2001 DCM Rulemaking'').\52\ In the 2001 
DCM Rulemaking, the Commission requested an OMB control number for part 
38 to account for the reporting

[[Page 7746]]

requirements, including part 9.\53\ The text of Commission regulation 
38.2 that specifically required DCMs to comply with part 9 was amended 
on June 19, 2012, and currently provides that DCMs shall comply with 
all applicable regulations under Title 17 of the Code of Federal 
Regulations, except for certain exempt provisions.\54\ Part 9 is not 
included in the list of exempt provisions. Accordingly, Commission 
regulation 38.2 still requires that DCMs comply with the part 9 rules, 
and therefore, the Commission regulation 9.11 reporting requirements. 
Since the proposed amendments to Commission regulation 9.11 are 
primarily technical, the Commission believes that these amendments 
would not impact the current burden estimates in the DCM 3038-0052 
collection.
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    \50\ 17 CFR part 9 and 38.2 [DCMs]; 17 CFR 37.2 [SEFs].
    \51\ 17 CFR 9.2(c).
    \52\ 66 FR 42277 (August 10, 2001).
    \53\ Id. at 42268.
    \54\ 77 FR 36697 (June 19, 2012); 17 CFR 38.2.
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    As noted above, SEFs are also subject to the part 9 reporting 
requirements.\55\ The pertinent reporting burden of Commission 
regulation 9.11 for SEFs is contained in Commission regulation 37.2, 
which was adopted on June 4, 2013.\56\ Among the applicable provisions 
with which SEFs must comply, Commission regulation 37.2 explicitly 
lists part 9.\57\ Because the proposed amendments to Commission 
regulation 9.11 are primarily technical, the Commission believes these 
amendments would not impact the current burden estimates in the SEF 
3038-0074 collection.\58\
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    \55\ 17 CFR 37.2.
    \56\ 78 FR 33476 (June 4, 2013).
    \57\ 17 CFR 37.2.
    \58\ Supra note 46.
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4. Information Collection Comments
    The Commission invites comment on any aspect of the proposed 
information collection requirements discussed above. Pursuant to 44 
U.S.C. 3506(c)(2)(B), the Commission will consider public comments on 
such proposed requirements in: (1) Evaluating whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information will 
have a practical use; (2) evaluating the accuracy of the Commission's 
estimate of the burden of the proposed collection of information, 
including the validity of the methodology and assumptions used; (3) 
enhancing the quality, utility, and clarity of the information proposed 
to be collected; and (4) minimizing the burden of collection of 
information on those who are to respond, including through the use of 
appropriate automated, electronic, mechanical, or other technological 
information collection techniques.
    Copies of the submission from the Commission to OMB are available 
from the CFTC Clearance Officer, 1155 21st Street NW., Washington, DC 
20581, (202) 418-5160 or from http://RegInfo.gov. Persons desiring to 
submit comments on the proposed information collection requirements 
should send those comments to: The Office of Information and Regulatory 
Affairs, Office of Management and Budget, Room 10235, New Executive 
Office Building, Washington, DC 20503, Attention: Desk Officer of the 
Commodity Futures Trading Commission; (202) 395-6566 (fax); or 
[email protected] (email). Please provide the Commission with 
a copy of submitted comments so that all comments can be summarized and 
addressed in the final rulemaking, and please refer to the ADDRESSES 
section of this rulemaking for instructions on submitting comments to 
the Commission. OMB is required to make a decision concerning the 
proposed information collection requirements between thirty (30) and 
sixty (60) days after publication of the Proposal in the Federal 
Register. Therefore, a comment to OMB is best assured of receiving full 
consideration if OMB (as well as the Commission) receives it within 
thirty (30) days of publication of the Proposal.

C. Cost-Benefit Considerations

1. Introduction
    Section 15(a) of the CEA requires the Commission to consider the 
costs and benefits of its actions before promulgating a regulation 
under the CEA or issuing certain orders.\59\ 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 the markets; (3) price discovery; (4) sound risk 
management practices; and (5) other public interest considerations. The 
Commission considers the costs and benefits resulting from its 
discretionary determinations with respect to the section 15(a) factors.
---------------------------------------------------------------------------

    \59\ 7 U.S.C. 19(a).
---------------------------------------------------------------------------

    The Commission considers the costs and benefits associated with the 
proposed amendments, including updating the pre-existing regulatory 
framework to incorporate SEFs, removing references to part 8 of the 
Commission's regulations, and revising the reporting and notice 
requirements for DCMs and SEFs. The Commission compares the costs and 
benefits of this rulemaking against a baseline of the status quo, the 
current requirements under part 3 and part 9. As discussed more fully 
below, the Commission preliminarily believes that the only new cost 
that would be imposed by the Proposal is the requirement in Commission 
regulation 9.13 for DCMs and SEFs to publish and maintain disciplinary 
notices on their respective Web sites.
2. Part 3 and Part 9 Technical Amendments
    As explained above, the proposed amendments to part 3 and part 9 
are primarily technical in nature. The Commission believes that these 
technical amendments will not impose any new costs on DCMs, SEFs, or 
market participants. For example, among the proposed changes, the 
Commission is clarifying the definition of ``exchange'' to include SEFs 
and updating the references to part 8, which was removed by the 
Commission in 2012, to instead cite to parallel provisions now 
contained in parts 37 and 38.\60\ Furthermore, the proposed revisions 
to Commission regulations 3.31 and 9.11 codify existing reporting 
procedures which were already authorized by the Commission in the Part 
3 Advisory and Part 9 Advisory.\61\ These proposed amendments do not 
substantively change the requirements that the Commission currently 
imposes on DCMs and SEFs.\62\ Rather, instead of providing the 9.11 
notices to the Commission, as required under the current part 9 rules, 
proposed regulation 9.11 will instead instruct exchanges to provide the 
notices to the NFA, as is permitted as an alternative method of 
compliance under the Part 9 Advisory.\63\
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    \60\ Removal of part 8 at 77 FR 66288 (Nov. 2, 2012); and 17 CFR 
parts 37 and 38. See, e.g., 17 CFR part 37 appendix B, Core 
Principle 2, paragraph (a)(13) and part 38, appendix B, Core 
Principle 13, paragraph (a)(6).
    \61\ Part 9 Advisory: 64 FR 39915 (July 23, 1999); Part 3 
Advisory: 64 FR 39912 (July 23, 1999).
    \62\ Supra note 46. As noted above in the PRA, the Commission 
believes the proposed substantive amendment to add an additional 
element required to be included in the contents of a 9.11 notice 
will not materially impact the costs imposed by this NPRM.
    \63\ 17 CFR 9.11.
---------------------------------------------------------------------------

    There is also the ministerial benefit to codifying the Part 3 and 
Part 9 Advisories. Advisories are staff action and are not rules that 
have been promulgated by the Commission subject to public notice and 
comment. Thus, this rulemaking will achieve the benefit

[[Page 7747]]

of codifying the Part 3 Advisory and Part 9 Advisory into rules.
3. Summary of Proposed Amendments to Commission Regulation 9.13--
Publication of Notice
    As discussed above, proposed Commission regulation 9.13 would 
require all DCMs and SEFs to maintain and make readily accessible final 
notices of exchange disciplinary and access denial actions on their Web 
sites.\64\ This new requirement would replace the existing requirement 
in Commission regulation 9.13 that exchanges publish the notice in a 
conspicuous place on the exchange's premises.
---------------------------------------------------------------------------

    \64\ 17 CFR 9.13.
---------------------------------------------------------------------------

a. Costs
    The Commission believes that posting final disciplinary and access 
denial notices to exchange Web sites will slightly increase the costs 
for DCMs and SEFs. The Commission notes that the additional costs 
incurred by DCMs and SEFs would be offset in part due to the proposed 
amendment in Commission regulation 9.13 that would remove the 
requirement of posting disciplinary and access denial notices on the 
premises of the respective DCM or SEF. In order to estimate the 
additional costs, the Commission queried the NFA's BASIC to determine 
the total number of disciplinary and access denial actions filed by 
DCMs in 2015. Because SEFs did not post any disciplinary or access 
denial actions to BASIC in 2015, the numbers below reflect the 
disciplinary and access denial actions filed by the 15 DCMs presently 
registered with the Commission and provide the basis for estimating the 
number of disciplinary and access denial actions for SEFs annually.\65\
---------------------------------------------------------------------------

    \65\ As of November 9, 2016, 10 summary fines had been assessed 
by a total of four SEFs. The notices for such summary fines have 
been posted to BASIC. Because the Commission did not have a complete 
year of data for 2016, the Commission used the 2015 numbers of 
disciplinary and access denial actions to calculate the costs.
---------------------------------------------------------------------------

    Total number of reported disciplinary and access denial actions in 
BASIC by all DCMs in 2015: 452.
    In order to estimate the costs for SEFs, the Commission calculated 
the average number of disciplinary and access denial actions filed by 
DCMs, excluding the four DCMs with the largest number of reported 
disciplinary and access denial actions.\66\ The Commission notes that 
SEFs are relatively new entities with significantly less volume and 
fewer participants than the four DCMs that reported the highest number 
of disciplinary and access denial actions.\67\ Therefore, the 
Commission preliminary believes that the average number of disciplinary 
and access denial actions reported by the 11 other DCMs in 2015 provide 
a more appropriate comparison with respect to estimating the number of 
disciplinary and access denial actions for SEFs annually. As the SEFs 
mature, in terms of the number of participants and volume, the 
Commission anticipates that the number of disciplinary and access 
denial actions may increase accordingly.
---------------------------------------------------------------------------

    \66\ The DCMs with largest number of reported disciplinary and 
access denial actions are: ICE Futures U.S., CME, NYMEX, and CBOT.
    \67\ 78 FR 33476 (June 4, 2013). The SEF Final Rules implemented 
the SEF framework enacted by section 733 of the Dodd-Frank Act; 7 
U.S.C. 7b-3.
---------------------------------------------------------------------------

    Total number of reported disciplinary and access denial actions in 
BASIC by DCMs in 2015, excluding the 4 DCMs with the largest number of 
reported actions: 88.
    Average number of reported disciplinary and access denial actions 
in BASIC per DCM in 2015, excluding the 4 DCMs with the largest number 
of reported actions: 8.
    Currently, there are a total of 23 registered SEFs with the 
Commission. The Commission estimates that each SEF would report at 
least eight disciplinary and access denial actions annually in BASIC 
for an aggregate total of 184 disciplinary and access denial actions 
for all SEFs per year (eight actions multiplied by 23 SEFs equals 184 
actions). Thus, the total number of exchange disciplinary and access 
denial actions per year for all DCMs and SEFs is estimated to be 636 
(184 actions for SEFs plus the 452 actions for DCMs equals 636 total 
actions per year). The Commission anticipates each DCM and SEF would 
spend an additional 15 minutes per disciplinary notice to post on the 
exchange's Web site above the current requirement of posting the notice 
on the exchange's premises. Accordingly, the aggregate new burden of 
Commission regulation 9.13 is estimated to be 159 hours per year for 
the 15 DCMs and 23 SEFs (15 minutes multiplied by 636 anticipated 
actions per year equals 159 burden hours).
    The Commission expects that a compliance officer employed by the 
exchange will be posting the disciplinary or access denial action 
notices to the exchange Web site. According to recent Bureau of Labor 
Statistics National Occupational Employment and Wage Estimates, the 
mean hourly wage of an employee under occupation code 13-1041, 
``Compliance Officers,'' that is employed by the ``Securities and 
Commodity Exchanges'' industry is $46.01. Because DCMs and SEFs can be 
large, specialized entities that may engage employees with wages above 
the mean, the Commission has conservatively chosen to use a mean hourly 
wage of $50 per hour.\68\ Accordingly, the burden associated with 
posting the disciplinary notices on exchange Web sites will total 
approximately $7,950 per year for all of the 38 DCMs and SEFs, ($50 
multiplied by the anticipated 159 burden hours equals $7,950 per 
year).\69\
---------------------------------------------------------------------------

    \68\ Bureau of Labor Statistics, Occupational Employment and 
Wages: 13-1041 Compliance Officers, (May 2014), available at http://www.bls.gov/oes/current/oes131041.htm.
    \69\ The Commission acknowledges that requiring exchanges to 
post final notices of disciplinary and access denial actions on 
their Web sites may necessitate additional bandwidth. The Commission 
anticipates that any increased costs due to added bandwidth would be 
insignificant in its calculation of the total annual burden 
associated with this Proposal.
---------------------------------------------------------------------------

b. Benefits
    The Commission preliminarily believes that greater access to 
information regarding exchange disciplinary and access denial actions 
provides valuable guidance and information to exchange members, market 
participants, and the public. Releasing disciplinary information to the 
public can serve to deter and prevent future misconduct and to improve 
overall compliance standards in the futures and swaps industry. It also 
allows customers to consider member firms' and traders' disciplinary 
histories when considering whether to engage in business with them. In 
addition, firms may use such information to educate their traders and 
associated persons as to compliance matters, highlighting potential 
violations and related sanctions. Further, any firm or individual 
facing allegations of rule violations may access existing disciplinary 
decisions to gain greater insight on related facts and sanctions. The 
Commission believes that the added deterrence of publishing the 
disciplinary notices on the exchange Web sites and the enhanced 
investigative and educational benefits of making such information 
public will ultimately decrease the incidents of wrongdoing and market 
abuses which will benefit both market participants and the general 
public.
c. Section 15(a) Factors
    As noted above, section 15(a) of the CEA requires the Commission to 
consider the effects of its actions in light of the following five 
factors:
    (1) Protection of market participants and the public. The 
Commission

[[Page 7748]]

preliminarily believes that market participants and the public will 
benefit from the ministerial and conforming amendments proposed herein 
since they eliminate obsolete, vestigial provisions and references that 
otherwise could be construed to give rise to confusing inconsistencies 
between the Commission's regulations and the provisions of the CEA. 
Furthermore, the Commission preliminarily believes that the proposed 
substantive amendment to regulation 9.13, which would require exchanges 
to publish notice of final disciplinary and access denial actions on 
exchange Web sites, would increase transparency of exchange 
disciplinary actions and serve as a deterrence of future market abuses. 
These enhancements allow for operational efficiencies in oversight, 
increased deterrence from market abuses, and greater transparency of 
the exchange disciplinary process. Therefore, the Commission 
anticipates that the amendment to regulation 9.13 would result in 
improved protection of market participants and the public.
    (2) The efficiency, competitiveness, and financial integrity of the 
markets. The requirement that exchanges publish disciplinary notices 
and access denial actions on their Web site is intended to improve the 
operational efficiency, competitiveness and financial integrity of the 
futures and swaps markets by enabling the public and those who access 
the exchange Web site to be made aware of any disciplinary and access 
denial actions imposed by the exchange. As discussed above, the vast 
majority of trading no longer occurs in person on the exchange's 
premises. The Commission believes that the current requirement in 
regulation 9.13 of posting disciplinary and access denial actions on 
the exchange's premises provides little to no public notice of these 
actions. By publishing the notice on the exchange's Web site, the 
Commission believes that the efficiency, competitiveness and financial 
integrity of the markets would be bolstered by the deterrent effect 
achieved by posting the notice in a publicly accessible medium.
    (3) Price discovery. The Commission has not identified an impact on 
price discovery as a result of the proposed regulations, but seeks 
comment as to any potential impact. Will the proposed regulations 
impact, positively or negatively, the price discovery process?
    (4) Sound risk management practices. The Commission has not 
identified an impact on risk management practices as a result of the 
proposed regulations, but seeks comment as to any potential impact. 
Will the proposed regulations impact, positively or negatively, sound 
risk management practices?
    (5) Other public interest considerations. The Commission has not 
identified any other public interest considerations, but welcomes 
comment on whether this Proposal would promote public confidence in the 
integrity of derivatives markets by making notice of exchange 
disciplinary and access denial actions more readily available to the 
public. Will this Proposal impact, positively or negatively, any 
unidentified matter of interest to the public?
d. Request for Comments
    The Commission seeks additional information regarding the costs and 
benefits of the Proposal. Beyond the specific questions interspersed 
throughout its discussion above, the Commission requests comment on all 
aspects of its consideration of costs and benefits, including: 
Identification and assessment of any costs and benefits not discussed 
therein; data and any other information to assist or otherwise inform 
the Commission's ability to quantify or qualitatively describe the 
benefits and costs of the proposed rules; and substantiating data, 
statistics, and any other information to support positions posited by 
commenters with respect to the Commission's consideration of costs and 
benefits. Commenters also may suggest other alternatives to the 
proposed approach where the commenters believe that the alternatives 
would be appropriate under the CEA and provide a superior cost-benefit 
profile.

IV. Request for Comments

    The Commission requests comment on all aspects of the Proposal. 
Commenters are specifically encouraged to include any considerations 
related to the Commission's proposed notice and order delegating 
regulation 9.11 authority to the NFA.

List of Subjects

17 CFR Part 3

    Administrative practice and procedure, Brokers, Commodity futures, 
Major swap participants, Reporting and recordkeeping requirements, Swap 
dealers.

17 CFR Part 9

    Administrative practice and procedure, Commodity exchanges, 
Commodity futures.

    For the reasons stated in the preamble, the Commodity Futures 
Trading Commission proposes to amend 17 CFR chapter I as follows:

PART 3--REGISTRATION

0
1. The authority citation for part 3 continues to read as follows:

    Authority: 5 U.S.C. 552, 552b; 7 U.S.C. 1a, 2, 6a, 6b, 6b-1, 6c, 
6d, 6e, 6f, 6g, 6h, 6i, 6k, 6m, 6n, 6o, 6p, 6s, 8, 9, 9a, 12, 12a, 
13b, 13c, 16a, 18, 19, 21, and 23, as amended by Title VII of Pub. 
L. 111-203, 124 Stat. 1376.

0
2. In Sec.  3.31, revise paragraph (a)(1) to read as follows:


Sec.  3.31  Deficiencies, inaccuracies, and changes, to be reported.

    (a)(1) Each applicant or registrant as a futures commission 
merchant, retail foreign exchange dealer, swap dealer, major swap 
participant, commodity trading advisor, commodity pool operator, 
introducing broker, floor trader that is a non-natural person or 
leverage transaction merchant shall, in accordance with the 
instructions thereto, promptly correct any deficiency or inaccuracy in 
Form 7-R or Form 8-R that no longer renders accurate and current the 
information contained therein, with the exception of any change that 
requires withdrawal from registration under Sec.  3.33 or any change 
resulting from an exchange disciplinary or access denial action. Each 
such correction shall be prepared and filed in accordance with the 
instructions thereto to create a Form 3-R record of such change.
* * * * *

PART 9--RULES RELATING TO REVIEW OF EXCHANGE DISCIPLINARY, ACCESS 
DENIAL OR OTHER ADVERSE ACTIONS

0
3. The authority citation for part 9 is revised to read as follows:

    Authority: 7 U.S.C. 1a, 2, 6b-1, 6c, 7, 7a-2, 7b-3, 8, 9, 9a, 
12, 12a, 12c, 13b, 16a, 18, 19, 21.

0
4. In Sec.  9.1, revise paragraphs (b) and (c) to read as follows:


Sec.  9.1  Scope of rules.

* * * * *
    (b) Matters excluded. This part does not apply to and the 
Commission will not accept notices of appeal, or petitions for stay 
pending review, of:
    (1) Any arbitration proceeding, regardless of whether the 
proceeding involved a controversy between members of an exchange;
    (2) Except as provided in Sec. Sec.  9.11(a), 9.11(b)(3)(i) through 
(v), 9.11(c), 9.12(a) and 9.13 (concerning the notice, effective date 
and publication of a disciplinary or access denial action), any summary 
action permitted under the provisions of part 37, appendix B, Core 
Principle 2, paragraph (a)(13) of

[[Page 7749]]

this chapter or part 38, appendix B, Core Principle 13, paragraph 
(a)(6) of this chapter imposing a minor penalty for the violation of 
exchange rules relating to decorum or attire, or relating to the timely 
submission of accurate records required for clearing or verifying each 
day's transactions or other similar activities; and
    (3) Any exchange action arising from a claim, grievance, or dispute 
involving cash market transactions which are not a part of, or directly 
connected with, any transaction for the purchase, sale, delivery or 
exercise of a commodity for future delivery, a commodity option, or a 
swap.
    (4) The Commission will, upon its own motion or upon motion filed 
pursuant to Sec.  9.21(b), promptly notify the appellant and the 
exchange that it will not accept the notice of appeal or petition for 
stay of matters specified in this paragraph. The determination to 
decline to accept a notice of appeal will be without prejudice to the 
appellant's right to seek alternate forms of relief that may be 
available in any other forum.
    (c) Applicability of these part 9 rules. Unless otherwise ordered, 
these rules will apply in their entirety to all appeals, and matters 
relating thereto.
0
5. In Sec.  9.2, revise paragraphs (b), (c), (f), and (k) to read as 
follows:


Sec.  9.2  Definitions.

* * * * *
    (b) Disciplinary action means any suspension, expulsion or other 
penalty imposed on a person by an exchange for violations of rules of 
the exchange, including summary actions.
    (c) Exchange means a swap execution facility or any board of trade 
which has been designated as a contract market.
* * * * *
    (f) Member of an exchange means
    (1) Any person who is admitted to membership or has been granted 
membership privileges on an exchange; any employee, officer, partner, 
director or affiliate of such member or person with membership 
privileges including any associated person; and any other person under 
the supervision or control of such member or person with membership 
privileges; or
    (2) Any person who has trading privileges on an exchange.
* * * * *
    (k) Summary action means a disciplinary action resulting in the 
imposition of a penalty on a person for violation of rules of the 
exchange permitted under the provisions of part 37, appendix B, Core 
Principle 2, paragraph (a)(10)(vi) of this chapteror part 38, appendix 
B, Core Principle 13, paragraph (a)(4) (penalty for impeding progress 
of hearing); part 37, appendix B, Core Principle 2, paragraph (a)(14) 
of this chapter or part 38, appendix B, Core Principle 13, paragraph 
(a)(7) (emergency disciplinary actions) of this chapter; part 37, 
appendix B, Core Principle 2, paragraph (a)(13) (summary fines for 
violations of rules regarding timely submission of records) of this 
chapter; or part 38, appendix B, Core Principle 13, paragraph (a)(6) 
(summary fines for violations of rules regarding timely submission of 
records, decorum, or other similar activities) of this chapter.
0
6. Revise Sec.  9.3 to read as follows:


Sec.  9.3  Provisions referenced.

    Except as otherwise provided in this part, the following provisions 
of the Commission's rules relating to reparations contained in part 12 
of this chapter apply to this part: Sec.  12.3 (Business address; 
hours); Sec.  12.5 (Computation of time); Sec.  12.6 (Extensions of 
time; adjournments; postponements); Sec.  12.7 (Ex parte communications 
in reparation proceedings); and Sec.  12.12 (Signature).
0
7. In Sec.  9.4, revise paragraphs (a), (b), and (c) to read as 
follows:


Sec.  9.4  Filing and service; official docket.

    (a) Filing with the Proceedings Clerk; proof of filing; proof of 
service. Any document that is required by this part to be filed with 
the Proceedings Clerk must be filed by delivering it in person or by 
mail to: Proceedings Clerk, Office of Proceedings, Commodity Futures 
Trading Commission, Three Lafayette Centre, 1155 21st Street NW., 
Washington, DC 20581. To be timely filed under this part, a document 
must be delivered or mailed to the Proceedings Clerk within the time 
prescribed for filing. A party must use a means of filing which is at 
least as expeditious as that used in serving that document upon the 
other parties. Proof of filing must be made by attaching to the 
document for filing a statement of service as provided in Sec.  
10.12(a)(6) of this chapter.
    (b) Formalities of filing--(1) Number of copies. Unless otherwise 
specifically provided, an original and one conformed copy of all 
documents filed with the Commission in accordance with the provisions 
of this part must be filed with the Proceedings Clerk.
    (2) Title page. All documents filed with the Proceedings Clerk must 
include at the head thereof, or on a title page, the name of the 
Commission, the title of the proceeding, the docket number (if one has 
been assigned by the Proceedings Clerk), the subject of the particular 
document and the name of the person on whose behalf the document is 
being filed.
    (3) Paper, spacing, type. All documents filed with the Proceedings 
Clerk must be typewritten, must be on one grade of good white paper no 
less than 8 or more than 8\1/2\ inches wide and no less than 10\1/2\ or 
more than 11\1/2\ inches long, and must be bound on the top only. They 
must be double-spaced, except for long quotations (3 or more lines) and 
footnotes which should be single-spaced.
    (4) Signature. The original copy of all papers must be signed in 
ink by the person filing the same or by his or her duly authorized 
agent or attorney.
    (c) Service--(1) General requirements. All documents filed with the 
Proceedings Clerk must, at or before the time of filing, be served upon 
all parties. A party must use a means of service which is at least as 
expeditious as that used in filing that document with the Proceedings 
Clerk. One copy of all motions, petitions or applications made in the 
course of the proceeding, all notices of appeal, all briefs, and 
letters to the Commission or an employee thereof must be served by a 
party upon all other parties.
    (2) Manner of service. Service may be either personal or by mail. 
Service by mail is complete upon deposit of the document in the mail. 
Where service is effected by mail, the time within which the person 
served may respond thereto will be increased by three days.
    (3) Designation of person to receive service. The first document 
filed in a proceeding by or on behalf of any party must state on the 
first page the name and postal address of the person who is authorized 
to receive service for the party of all documents filed in the 
proceeding. Thereafter, service of documents must be made upon the 
person authorized unless service on a different authorized person or on 
the party himself or herself is ordered by the Commission, or unless 
pursuant to Sec.  9.8 the person authorized is changed by the party 
upon due notice to all other parties. Parties must file and serve 
notification of any changes in the information provided pursuant to 
this subparagraph as soon as practicable after the change occurs.
* * * * *
0
8. In Sec.  9.8, revise paragraph (a)(1) to read as follows:


Sec.  9.8  Practice before the Commission.

    (a) Practice--(1) By non-attorneys. An individual may appear pro se 
(on his or her own behalf); a general partner may represent the 
partnership; a bona fide officer of a corporation, trust or

[[Page 7750]]

association may represent the corporation, trust or association.
* * * * *
0
9. In Sec.  9.9, revise paragraphs (b)(3) and (b)(4) to read as 
follows:


Sec.  9.9  Waiver of rules; delegation of authority.

* * * * *
    (b) * * *
    (3) The General Counsel, or his or her designee, may submit to the 
Commission for its consideration any matter which has been delegated 
pursuant to paragraph (b)(1) of this section.
    (4) Nothing in this section will be deemed to prohibit the 
Commission, at its election, from exercising the authority delegated to 
the General Counsel, or his or her designee, under this section.
0
10. Revise Sec.  9.11 to read as follows:


Sec.  9.11  Form, contents and delivery of notice of disciplinary or 
access denial action.

    (a) When required. Whenever an exchange decision pursuant to which 
a disciplinary action or access denial action is to be imposed has 
become final, the exchange must, within thirty days thereafter, provide 
written notice of such action to the person against whom the action was 
taken and notice to the National Futures Association (``NFA'') through 
the NFA's Background Affiliation Status Information Center (``BASIC'') 
system: Provided, That a designated contract market is not required to 
notify the NFA of any summary action, as permitted under the provisions 
of part 38, appendix B, Core Principle 13, paragraph (a)(6) of this 
chapter, which results in the imposition of minor penalties for the 
violation of exchange rules relating to decorum or attire. No final 
disciplinary or access denial action may be made effective by the 
exchange except as provided in Sec.  9.12.
    (b) Contents of notice. For purposes of this part:
    (1) The written notice of a disciplinary action or access denial 
action provided to the person against whom the action was taken by a 
designated contract market must be a copy of a written decision which 
accords with:
    (i) Part 38, appendix B, Core Principle 13, paragraph (a)(3) of 
this chapter in the case of settlement offers;
    (ii) Section 38.708 of this chapter in the case of decisions; or
    (iii) Part 38, appendix B, Core Principle 13, paragraph (a)(5)(iv) 
of this chapter in the case of appeal decisions of this chapter 
(including copies of any materials incorporated by reference) or other 
written notice which must include items listed in paragraphs (b)(3)(i)-
(vi) of this section.
    (2) The written notice of a disciplinary action or access denial 
action provided to the person against whom the action was taken by a 
swap execution facility must be a copy of a written decision which 
accords with:
    (i) Part 37, appendix B, Core Principle 2, paragraph (a)(9) of this 
chapter in the case of settlement offers;
    (ii) Section 37.206(d) of this chapter in the case of decisions; or
    (iii) Part 37, appendix B, Core Principle 2, paragraph (a)(11)(iv) 
of this chapter in the case of appeal decisions of this chapter 
(including copies of any materials incorporated by reference) or other 
written notice which must include items listed in paragraphs (b)(3)(i) 
through (vi) of this section.
    (3) The notice of a disciplinary action or access denial action 
provided to the NFA must include only the items listed in the following 
paragraphs (i) through (v):
    (i) The name of the person against whom the disciplinary action or 
access denial action was taken;
    (ii) A statement of the reasons for the disciplinary action or 
access denial action, detailing the exchange product which was 
involved, as applicable, and whether the violation that resulted in the 
action also resulted in financial harm to any customers together with a 
listing of any rules which the person who was the subject of the 
disciplinary action or access denial action was charged with having 
violated or which otherwise serve as the basis of the exchange action;
    (iii) A statement of the conclusions and findings made by the 
exchange with regard to each rule violation charged or, in the event of 
settlement, a statement specifying those rule violations which the 
exchange has reason to believe were committed;
    (iv) The terms of the disciplinary action or access denial action;
    (v) The date on which the action was taken and the date the 
exchange intends to make the disciplinary or access denial action 
effective; and
    (vi) Except as otherwise provided in Sec.  9.1(b), a statement 
informing the party subject to the disciplinary action or access denial 
action of the availability of Commission review of the exchange action 
pursuant to section 8c of the Act and this part.
    (c) Delivery and filing of the notice. Delivery of the notice must 
be made either personally to the person who was the subject of the 
disciplinary action or access denial action or by mail to such person 
at that person's last known address. Filing of the notice with the NFA 
is accomplished when an authorized exchange employee verifies the 
accuracy of the information entered into BASIC.
    (d) Effect of delivery by mail. Delivery by mail to the person 
disciplined or denied access will be complete upon deposit in the mail 
of a properly addressed and postpaid document. Where delivery to the 
person disciplined or denied access is effected by such mail, the time 
within which a notice of appeal or petition for stay may be filed will 
be increased by three days.
    (e) Certification. Copies of the notice and the submission of any 
additional information provided pursuant to this section must be 
certified as true and correct by a duly authorized officer, agent or 
employee of the exchange. Notice filed with the NFA is deemed certified 
when an authorized exchange employee verifies the accuracy of the 
information entered into BASIC.
0
11. Revise Sec.  9.12 to read as follows:


Sec.  9.12  Effective date of disciplinary or access denial action.

    (a) Effective date. Any disciplinary or access denial action taken 
by an exchange will not become effective until at least fifteen days 
after the written notice prescribed by Sec.  9.11 is delivered to the 
person disciplined or denied access; Provided, however, That the 
exchange may cause a disciplinary action to become effective prior to 
that time if:
    (1) As permitted by part 37, appendix B, Core Principle 2, 
paragraph (a)(14) of this chapter or part 38, appendix B, Core 
Principle 13, paragraph (a)(7) (emergency disciplinary actions) of this 
chapter, the exchange reasonably believes, and so states in its written 
decision, that immediate action is necessary to protect the best 
interests of the marketplace; or
    (2) As permitted by part 37, appendix B, Core Principle 2, 
paragraph (a)(10)(vi) of the chapter or part 38, appendix B, Core 
Principle 13, paragraph (a)(4) (hearings) of this chapter, the exchange 
determines, and so states in its written decision, that the actions of 
a person who is within the exchange's jurisdiction has impeded the 
progress of a disciplinary hearing; or
    (3) As permitted by part 37, appendix B, Core Principle 2, 
paragraph (a)(13) (summary fines for violations of rules regarding 
timely submission of records) of this chapter or part 38, appendix B, 
Core Principle 13, paragraph (a)(6) (summary fines for violations of 
rules regarding timely submission of records, decorum, or other similar 
activities) of

[[Page 7751]]

this chapter, the exchange determines that a person has violated 
exchange rules relating to decorum or attire, or timely submission of 
accurate records required for clearing or verifying each day's 
transactions or other similar activities; or
    (4) The person against whom the action is taken has consented to 
the penalty to be imposed and to the timing of its effectiveness.
    (b) Notice of early effective date. If the exchange determines in 
accordance with paragraph (a)(1) of this section that a disciplinary 
action will become effective prior to the expiration of fifteen days 
after written notice thereof, it must notify the person disciplined in 
writing, either personally or by email to the person's last known email 
address, stating the reasons for the determination. The exchange must 
also immediately notify the Commission by email to [email protected]. 
Where notice is delivered by email, the time within which the person so 
notified may file a petition for stay pursuant to Sec.  9.24(a)(2) will 
be increased by one day.
0
12. Revise Sec.  9.13 to read as follows:


Sec.  9.13  Publication of notice.

    Whenever an exchange suspends, expels or otherwise disciplines, or 
denies any person access to the exchange, it must make public its 
findings by disclosing at least the information contained in the notice 
required by Sec.  9.11(b). An exchange must make such findings public 
as soon as the disciplinary action or access denial action becomes 
effective in accordance with the provisions of Sec.  9.12 by posting a 
notice on its Web site to which its members and the public regularly 
have access. Such notice must be maintained and readily available on 
the exchange's Web site.
0
13. In Sec.  9.24, revise paragraph (a)(2) to read as follows:


Sec.  9.24  Petition for stay pending review.

    (a) * * *
    (2) Within ten days after a notice of summary action has been 
delivered in accordance with Sec.  9.12(b) to a person who is the 
subject of a summary action permitted by part 37, appendix B, Core 
Principle 2, paragraph (a)(14) or part 38, appendix B, Core Principle 
13, paragraph (a)(7) (emergency disciplinary actions) of this chapter, 
that person may petition the Commission to stay the effectiveness of 
the summary action pending completion of the exchange proceeding.
* * * * *
0
14. Revise Sec.  9.31 to read as follows:


Sec.  9.31  Commission review of disciplinary or access denial action 
on its own motion.

    (a) Request for additional information. Where a person disciplined 
or denied access has not appealed the exchange decision to the 
Commission, upon review of the notice specified in Sec.  9.11, the 
Division of Market Oversight or the Division of Swap Dealer and 
Intermediary Oversight may request that the exchange file with the 
Division the record of the exchange proceeding, or designated portions 
of the record, a brief statement of the evidence and testimony adduced 
to support the exchange's findings that a rule or rules of the exchange 
were violated and such recordings, transcripts and other documents 
applicable to the particular exchange proceeding as the Division may 
specify. The exchange must promptly advise the person who is the 
subject of the disciplinary or access denial action of the Division's 
request. Within thirty days after service of the Division's request, 
the exchange must file the information requested with the Division in 
the manner requested by the Division and, upon request, deliver that 
information to the person who is the subject of the disciplinary or 
access denial action. Delivery to the person who is the subject of the 
disciplinary or access denial action must be in the manner prescribed 
by Sec.  9.11(c). A person subject to the disciplinary action or access 
denial action requesting a copy of the information furnished to the 
Division must, if the exchange rules so provide, agree to pay the 
exchange reasonable fees for printing the copy.
    (b) Review on motion of the Commission. The Commission may 
institute review of an exchange disciplinary or access denial action on 
its own motion. Other than in extraordinary circumstances, such review 
will be initiated within 180 days after the NFA has received the notice 
of exchange action provided for in Sec.  9.11. If the Commission should 
institute review on its own motion, it will issue an order permitting 
the person who is the subject of the disciplinary or access denial 
action an opportunity to file an appropriate submission, and the 
exchange an opportunity to file a reply thereto.

    Issued in Washington, DC, on January 13, 2017, by the 
Commission.
Christopher J. Kirkpatrick,
Secretary of the Commission.

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

Appendix to Amendments to Parts 3 and 9 of the Commodity Futures 
Trading Commission's Rules--Commission Voting Summary

    On this matter, Chairman Massad and Commissioners Bowen and 
Giancarlo voted in the affirmative. No Commissioner voted in the 
negative.

[FR Doc. 2017-01232 Filed 1-19-17; 8:45 am]
BILLING CODE 6351-01-P



                                                    7738                    Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules

                                                    the FAA’s Web page at http://                              Class E airspace designations are                   effective September 15, 2016, is
                                                    www.faa.gov/air_traffic/publications/                   published in paragraph 6005 of FAA                     amended as follows:
                                                    airspace_amendments/.                                   Order 7400.11A, dated August 3, 2016,                  Paragraph 6005 Class E Airspace Areas
                                                      You may review the public docket                      and effective September 15, 2016, which                Extending Upward From 700 Feet or More
                                                    containing the proposal, any comments                   is incorporated by reference in 14 CFR                 Above the Surface of the Earth.
                                                    received, and any final disposition in                  71.1. The Class E airspace designations                *       *    *     *      *
                                                    person in the Dockets Office (see the                   listed in this document will be
                                                    ADDRESSES section for the address and                   published subsequently in the Order.                   ANM UT E5 Manti, UT [New]
                                                    phone number) between 9:00 a.m. and                                                                            Manti-Ephraim Airport, Utah
                                                    5:00 p.m., Monday through Friday,                       Regulatory Notices and Analyses                           (Lat. 39°19′53″ N., long. 111°36′45″ W.)
                                                    except federal holidays. An informal                       The FAA has determined that this                       That airspace extending upward from 700
                                                    docket may also be examined during                      regulation only involves an established                feet above the surface within a 4.7-mile
                                                    normal business hours at the Northwest                  body of technical regulations for which                radius of Manti-Ephraim Airport, and that
                                                    Mountain Regional Office of the Federal                 frequent and routine amendments are                    airspace 2 miles either side of a 225° bearing
                                                    Aviation Administration, Air Traffic                    necessary to keep them operationally                   from the airport extending from the 4.7-mile
                                                    Organization, Western Service Center,                                                                          radius to 11 miles southwest of the airport,
                                                                                                            current, is non-controversial and
                                                                                                                                                                   and that airspace within 1.8 miles east of the
                                                    Operations Support Group, 1601 Lind                     unlikely to result in adverse or negative              line beginning at lat. 39°17′50″ N., long.
                                                    Avenue SW., Renton, WA 98057.                           comments. It, therefore: (1) Is not a                  111°39′27″ W., to lat. 39°14′35″ N., long.
                                                    Availability and Summary of                             ‘‘significant regulatory action’’ under                111°41′06″ W., and that airspace beginning at
                                                    Documents Proposed for Incorporation                    Executive Order 12866; (2) is not a                    the point where a 001° bearing from the
                                                    by Reference                                            ‘‘significant rule’’ under DOT                         airport intersects the 4.7-mile radius to lat.
                                                                                                            Regulatory Policies and Procedures (44                 39°26′54″ N., long. 111°36′20″ W., to lat.
                                                      This document proposes to amend                       FR 11034; February 26, 1979); and (3)                  39°26′34″ N., long. 111°31′41″ W., to the
                                                    FAA Order 7400.11A, Airspace                            does not warrant preparation of a                      point where a 053° bearing from the airport
                                                    Designations and Reporting Points,                                                                             intersects the 4.7-mile radius, thence
                                                                                                            regulatory evaluation as the anticipated
                                                    dated August 3, 2016, and effective                                                                            counter-clockwise along the 4.7-mile radius
                                                                                                            impact is so minimal. Since this is a                  to the point of beginning.
                                                    September 15, 2016. FAA Order                           routine matter that will only affect air
                                                    7400.11A is publicly available as listed                traffic procedures and air navigation, it                Issued in Seattle, Washington, on January
                                                    in the ADDRESSES section of this                                                                               10, 2017.
                                                                                                            is certified that this rule, when
                                                    document. FAA Order 7400.11A lists                      promulgated, would not have a                          Richard Roberts,
                                                    Class A, B, C, D, and E airspace areas,                 significant economic impact on a                       Acting Manager, Operations Support Group,
                                                    air traffic service routes, and reporting               substantial number of small entities                   Western Service Center.
                                                    points.                                                 under the criteria of the Regulatory                   [FR Doc. 2017–01039 Filed 1–19–17; 8:45 am]
                                                    History                                                 Flexibility Act.                                       BILLING CODE 4910–13–P

                                                      On November 22, 2016, the FAA                         Environmental Review
                                                    published in the Federal Register an                       This proposal will be subject to an                 COMMODITY FUTURES TRADING
                                                    NPRM proposing to establish Class E                     environmental analysis in accordance                   COMMISSION
                                                    airspace extending upward from 700                      with FAA Order 1050.1F,
                                                    feet above the surface at Manti-Ephraim                 ‘‘Environmental Impacts: Policies and                  17 CFR Parts 3 and 9
                                                    Airport, Manti, UT (81 FR, 83749) FAA–                  Procedures’’ prior to any FAA final
                                                    2016–8164. The FAA has received and                                                                            RIN 3038–AE15
                                                                                                            regulatory action.
                                                    concurs with a request by the National
                                                                                                            List of Subjects in 14 CFR Part 71                     Technical Amendments to Rules on
                                                    Business Aviation Association to
                                                                                                                                                                   Registration and Review of Exchange
                                                    develop IFR standard instrument                          Airspace, Incorporation by reference,                 Disciplinary, Access Denial or Other
                                                    approach circling procedures for                        Navigation (air).                                      Adverse Actions
                                                    category D aircraft for the airport. The
                                                    additional IFR category D circling                      The Proposed Amendment                                 AGENCY: Commodity Futures Trading
                                                    procedures would require additional                       Accordingly, pursuant to the                         Commission.
                                                    airspace for the safety if IFR aircraft                 authority delegated to me, the Federal                 ACTION: Notice of proposed rulemaking.
                                                    using the new procedure.                                Aviation Administration proposes to
                                                                                                                                                                   SUMMARY:     The Commodity Futures
                                                    The Proposal                                            amend 14 CFR part 71 as follows:
                                                                                                                                                                   Trading Commission (‘‘CFTC’’ or
                                                      The FAA is proposing an amendment                     PART 71—DESIGNATION OF CLASS A,                        ‘‘Commission’’) is proposing technical
                                                    to Title 14 Code of Federal Regulations                 B, C, D, AND E AIRSPACE AREAS; AIR                     amendments to its regulations that
                                                    (14 CFR) part 71 by establishing Class E                TRAFFIC SERVICE ROUTES; AND                            govern registration and review of
                                                    airspace extending upward from 700                      REPORTING POINTS                                       exchange disciplinary, access denial or
                                                    feet above the surface within a 4.7-mile                                                                       other adverse actions. The amendments
                                                    radius (from a 4-mile radius) of Manti-                 ■ 1. The authority citation for 14 CFR                 would integrate existing advisory
                                                    Ephraim Airport, Manti, UT, with                        part 71 continues to read as follows:                  guidance and the amendments to part 9
                                                    segments extending from the 4.7-mile                                                                           would also incorporate swap execution
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                                                                                                              Authority: 49 U.S.C. 106(f), 106(g), 40103,
                                                    radius to 11 miles southwest of the                     40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR,           facilities (‘‘SEFs’’) and update
                                                    airport, and 7.2 miles northeast of the                 1959–1963 Comp., p. 389.                               provisions currently applicable to
                                                    airport. Additional airspace is necessary                                                                      designated contract markets (‘‘DCMs’’).
                                                    to support the development of IFR                       § 71.1   [Amended]                                     The proposal revises existing rules to
                                                    circling procedures for category D                      ■ 2. The incorporation by reference in                 delete numerous cross-references to
                                                    aircraft operations in standard                         14 CFR 71.1 of FAA Order 7400.11A,                     previously deleted regulations and adds
                                                    instrument approach and departure                       Airspace Designations and Reporting                    citations to applicable parallel
                                                    procedures at the airport.                              Points, dated August 3, 2016, and                      provisions for SEFs and DCMs.


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                                                                            Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules                                                       7739

                                                    Additionally, the proposal addresses the                Table of Contents                                       Commission regulation 38.2 of the DCM
                                                    publication of final disciplinary and                   I. Background                                           Final Rules provides that DCMs shall
                                                    access denial actions taken by the SEFs                    A. Description of Part 9                             comply with all applicable regulations
                                                    and DCMs on their exchange Web sites.                      B. DCM Final Rules and Part 8 Removal                under Title 17 of the Code of Federal
                                                    DATES: Comments must be received on                        C. SEF Final Rules                                   Regulations, except for certain exempt
                                                    or before March 24, 2017.                               II. Proposed Amendments to Regulations                  provisions.3 Part 9 is not included in the
                                                                                                               A. Introduction                                      list of exempt provisions. Furthermore,
                                                    ADDRESSES: You may submit comments,
                                                                                                               B. Part 9
                                                    identified by RIN 3038–AE15, by any of                     1. Commission Regulation 9.1: Scope of
                                                                                                                                                                    part 9 applies to DCMs by defining
                                                    the following methods:                                        Rules                                             ‘‘exchange’’ in Commission regulation
                                                      • CFTC Web site: https://                                2. Commission Regulation 9.2: Definitions            9.2(c) for purposes of the rules as any
                                                    comments.cftc.gov. Follow the                              3. Commission Regulation 9.4: Filing and             board of trade which has been
                                                    instructions for submitting comments                          Service; Official Docket                          designated as a contract market.4
                                                    through the Comments Online process                        4. Commission Regulation 9.11: Form,
                                                                                                                  Contents and Delivery of Notice of                   Additionally, in the DCM Final Rules,
                                                    on the Web site.                                                                                                the Commission adopted regulations in
                                                                                                                  Disciplinary or Access Denial Action
                                                      • Mail: Christopher Kirkpatrick,                         5. Commission Regulation 9.12: Effective             ‘‘Subpart N—Disciplinary Procedures’’
                                                    Secretary of the Commission,                                  Date of Disciplinary or Access Denial             of part 38 to amend the disciplinary
                                                    Commodity Futures Trading                                     Action                                            procedures applicable to DCMs.5
                                                    Commission, Three Lafayette Centre,                        6. Commission Regulation 9.13:
                                                                                                                                                                    Several of the regulations adopted in
                                                    1155 21st Street NW., Washington, DC                          Publication of Notice
                                                                                                               7. Commission Regulation 9.24: Petition for          subpart N of part 38 are similar to the
                                                    20581.
                                                      • Hand Delivery/Courier: Same as                            Stay Pending Review                               text of the disciplinary procedures
                                                    Mail, above.                                               8. Commission Regulation 9.31:                       found in former part 8—exchange
                                                                                                                  Commission Review of Disciplinary or              procedures for disciplinary, summary,
                                                      • Federal eRulemaking Portal: http://
                                                                                                                  Access Denial Action on Its Own Motion            and membership denial actions.6 In
                                                    www.regulations.gov. Follow the                            9. Minor Changes to Commission
                                                    instructions for submitting comments.                                                                           order to avoid confusion from the
                                                                                                                  Regulations 9.3, 9.4, 9.8, and 9.9
                                                       Please submit your comments using                       C. Part 3                                            regulations containing two sets of
                                                    only one method.                                           1. Commission Regulation 3.31:                       disciplinary procedures for DCMs, the
                                                       All comments must be submitted in                          Deficiencies, Inaccuracies, and Changes           Commission removed part 8 from the
                                                    English, or if not, accompanied by an                         To Be Reported                                    regulations.7 As a result of this removal,
                                                    English translation. Comments will be                   III. Related Matters                                    the current part 9 rules, which contain
                                                    posted as received to www.cftc.gov. You                    A. Regulatory Flexibility Act                        cross-references to part 8 throughout,
                                                                                                               B. Paperwork Reduction Act                           are being updated in this rulemaking
                                                    should submit only information that                        C. Cost-Benefit Considerations
                                                    you wish to make available publicly. If                 IV. Request for Comments
                                                                                                                                                                    (‘‘NPRM’’ or ‘‘Proposal’’) to instead cite
                                                    you wish the Commission to consider                                                                             to parallel provisions now contained in
                                                    information that you believe is exempt                  I. Background                                           part 37 for SEFs and part 38 for DCMs.8
                                                    from disclosure under the Freedom of                    A. Description of Part 9                                C. SEF Final Rules
                                                    Information Act (‘‘FOIA’’), a petition for
                                                    confidential treatment of the exempt                      On December 20, 1978, the
                                                                                                            Commission adopted part 9 rules                            The Dodd-Frank Wall Street Reform
                                                    information may be submitted according                                                                          and Consumer Protection Act (‘‘Dodd-
                                                    to the procedures established in                        relating to the review of exchange
                                                                                                            disciplinary, access denial, or other                   Frank Act’’) repealed some sections of
                                                    Commission regulation 145.9.                                                                                    the Commodity Exchange Act (‘‘CEA’’ or
                                                       The Commission reserves the right,                   adverse actions.1 The rules govern the
                                                                                                            process and procedures by which the                     ‘‘Act’’), amended others, and established
                                                    but shall have no obligation, to review,                                                                        new categories of Commission
                                                    pre-screen, filter, redact, refuse or                   Commission may review exchange
                                                    remove any or all of your submission                    disciplinary and access denial actions,
                                                                                                                                                                      3 77  FR 36697 (June 19, 2012); 17 CFR 38.2.
                                                    from www.cftc.gov that it may deem to                   detailing the appellate process under
                                                                                                                                                                      4 17  CFR 9.2(c).
                                                    be inappropriate for publication, such as               which such review will be instituted                       5 17 CFR 38.700 through 38.712.

                                                    obscene language. All submissions that                  and conducted in cases where a person                      6 43 FR 41950 (Sept. 19, 1978); 17 CFR 38.700

                                                    have been redacted or removed that                      applies to the Commission for review. In                through 38.712. For example, part 8 contained
                                                    contain comments on the merits of the                   addition to setting forth procedures and                regulations 8.05 (Enforcement staff); 8.08
                                                    rulemaking will be retained in the                      standards governing filing and service,                 (Disciplinary committee); and 8.20 (Final decision).
                                                                                                            motions, and settlement, the rules also                 Subpart N of part 38 has corresponding provisions:
                                                    public comment file and will be                                                                                 38.701 (Enforcement staff); 38.702 (Disciplinary
                                                    considered as required under the                        cover the process by which exchanges                    panels); and 38.709 (Final decisions).
                                                    Administrative Procedure Act and other                  must provide notice of the final                           7 Although Commission regulation 38.2 of the


                                                    applicable laws, and may be accessible                  disciplinary action to the subject of the               DCM Final Rules specifies that DCMs are not
                                                                                                            disciplinary action and to the                          required to comply with part 8, the Commission
                                                    under the FOIA.                                                                                                 removed part 8 to avoid any confusion resulting
                                                                                                            Commission, as well as the publication                  from the regulations containing two sets of
                                                    FOR FURTHER INFORMATION CONTACT:
                                                                                                            of such notice. As discussed below,                     exchange disciplinary procedures as part of the
                                                    Rachel Berdansky, Deputy Director,
                                                                                                            DCMs and SEFs are already required to                   Adaption of Regulations to Incorporate Swaps
                                                    Division of Market Oversight, at 202–                                                                           Rulemaking. 17 CFR 38.2; and removal of part 8 at
                                                                                                            comply with the part 9 regulations.
                                                    418–5429 or rberdansky@cftc.gov; or                                                                             77 FR 66304 (Nov. 2, 2012).
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                                                    David Steinberg, Associate Director,                    B. DCM Final Rules and Part 8 Removal                      8 17 CFR parts 9, 37, and 38. For example, in

                                                    Division of Market Oversight, at 202–                                                                           Commission regulation 9.2(k) the definition of
                                                                                                              In June 2012, the Commission                          ‘‘summary action’’ cites to Commission regulations
                                                    418–5102 or dsteinberg@cftc.gov, in                     implemented Core Principles and Other                   8.17(b), 8.25, and 8.27 which were removed along
                                                    each case, at the Commodity Futures                     Requirements for Designated Contract                    with the entirety of part 8. Proposed Commission
                                                    Trading Commission, Three Lafayette                     Markets (‘‘DCM Final Rules’’).2                         regulation 9.2(k) will instead cite to part 37,
                                                    Centre, 1151 21st Street NW.,                                                                                   appendix B, Core Principle 2, paragraphs (a)(10)(vi),
                                                                                                                                                                    (a)(13), and (a)(14) [for SEFs] and part 38, appendix
                                                    Washington, DC 20581.                                     1 43   FR 59343 (Dec. 20, 1978).                      B, Core Principle 13, paragraphs (a)(4), (a)(6), and
                                                    SUPPLEMENTARY INFORMATION:                                2 77   FR 36612 (June 19, 2012).                      (a)(7) [for DCMs].



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                                                    7740                    Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules

                                                    registrants, including SEFs.9 Pursuant to               obligations on SEFs; rather they clarify                require the exchange to post the notice
                                                    the Dodd-Frank Act, the Commission                      that SEFs, in addition to DCMs, must                    on the exchange’s Web site. Finally, as
                                                    adopted new rules in part 37 Core                       comply with part 9.16 This clarification                addressed above in the discussion of
                                                    Principles and Other Requirements for                   would be accomplished by updating                       accommodating amendments, the
                                                    Swap Execution Facilities (‘‘SEF Final                  part 9’s definition of ‘‘exchange’’ to                  Commission is proposing to codify the
                                                    Rules’’).10 The Commission notes that                   include SEFs and to add swaps to                        Part 9 Advisory. By specifying in the
                                                    since the advent of the Dodd-Frank                      language discussing the types of                        rule text that exchanges provide notice
                                                    Act’s new statutory framework for                       transactions from which an exchange                     of final exchange disciplinary and
                                                    regulating swaps, it adopted a                          disciplinary action might arise. These                  access denial actions directly to the
                                                    rulemaking (Adaptation of Regulations                   amendments are more than ministerial                    NFA, the Commission is eliminating the
                                                    to Incorporate Swaps) implementing                      because they require some judgment in                   option for exchanges to file notice with
                                                    conforming changes to existing                          drafting. Another example of an                         the Commission.
                                                    regulations to clarify those pre-Dodd-                  accommodating amendment is the
                                                                                                                                                                    B. Part 9
                                                    Frank provisions, including those                       proposed formal codification of the part
                                                    applicable to SEFs.11 Part 9, however,                  3 and part 9 advisories and the                         1. Commission Regulation 9.1: Scope of
                                                    which also applies to SEFs, was not                     Commission’s delegation to the National                 Rules
                                                    addressed in this rulemaking.12 As such,                Futures Association (‘‘NFA’’) of the                       Commission regulation 9.1 governs
                                                    in regulation 37.2 of the SEF Final                     responsibility to receive notice of final               the review by the Commission, pursuant
                                                    Rules, the Commission specified that                    exchange disciplinary and access denial                 to section 8c of the CEA, of any
                                                    SEFs shall comply with the                              actions, in which the Commission                        suspension, expulsion, disciplinary or
                                                    requirements of part 9.13 Accordingly,                  encouraged exchanges to comply with                     access denial action, or other adverse
                                                    for clarity purposes, this NPRM amends                  the notice requirements in Commission                   action by an exchange.20 As noted
                                                    certain part 9 definitions and language                 regulation 9.11 (‘‘9.11 notice’’) by filing             above, the Commission is proposing a
                                                    which have not yet been addressed, to                   with the NFA.17 Additionally, the                       ministerial amendment to regulation
                                                    better integrate them into the post-                    proposed amendment to Commission                        9.1(b)(1) by removing the reference to
                                                    Dodd-Frank regulatory regime.                           regulation 9.11(b)(3)(ii) would codify                  section 5a(a)(11) of the CEA, since this
                                                                                                            the clarification contained in the Part 9               section was eliminated by the passage of
                                                    II. Proposed Amendments to
                                                                                                            Advisory that an exchange indicate in                   the CFMA.21
                                                    Regulations
                                                                                                            its notice of disciplinary or access                       Commission regulation 9.1(b)(2)
                                                    A. Introduction                                         denial actions whether the violation                    provides an exclusion from the part 9
                                                      This Proposal contains amendments                     underlying the notice resulted in                       regulations with respect to the
                                                    of three different types: Ministerial,                  financial harm to any customers.18                      Commission’s review of summary
                                                    accommodating, and substantive. Most                       The remaining proposed amendments                    actions imposed by an exchange for a
                                                    of the proposed amendments are purely                   are generally substantive in that they                  minor penalty for the violation of
                                                    ministerial—for instance, some of the                   include an additional element required                  exchange rules relating to decorum,
                                                    proposed changes would update                           to be included in the contents of a 9.11                attire, or timely submission of accurate
                                                    definitions in Commission regulation                    notice and a material revision to                       records required for clearing or verifying
                                                    9.2 to conform them to the CEA as                       Commission regulation 9.13 which                        each day’s transactions or similar
                                                    amended by the Dodd-Frank Act as well                   currently requires exchanges to post                    activities. The Commission proposes to
                                                    as other sections of the Commission’s                   notice of final exchange disciplinary                   amend regulation 9.1(b)(2) by replacing
                                                    regulations. Furthermore, as noted                      action on the exchange’s premises.19                    the reference to regulation 8.27 with a
                                                    above, the citations to part 8 in the                   First, as part 9 pertains to both DCMs                  reference to part 37 guidance pertaining
                                                    current part 9 rules would be replaced                  and SEFs which offer a number of                        to violations of rules regarding timely
                                                    with the appropriate citations to                       varied products for trading, the                        submission of records and part 38
                                                    regulations, guidance, and acceptable                   proposed amendment to Commission                        guidance pertaining to summary fines
                                                    practices from parts 37 and 38.14 In a                  regulation 9.11 would require exchanges                 for violations of rules regarding timely
                                                    similar vein, one of the proposed                       to include the type of product (as                      submission of records, decorum, or
                                                    amendments to Commission regulation                     applicable) involved in the adverse                     other similar activities.22
                                                    9.1 would remove the reference to                       action in the contents of the final notice.                Commission regulation 9.1(b)(3)
                                                    section 5a(a)(11) of the CEA, since this                Second, the proposed amendment to                       provides an exclusion from the part 9
                                                    section was eliminated by the passage of                Commission regulation 9.13 would                        regulations concerning any exchange
                                                    the Commodity Futures Modernization                     remove the requirement to post notice                   action arising from a claim, grievance,
                                                    Act of 2000 (‘‘CFMA’’).15                               on the exchange’s premises and instead                  or dispute involving cash market
                                                      The proposed accommodating                                                                                    transactions which are not a part of, or
                                                                                                              16 17  CFR part 9, §§ 37.2 and 38.2.
                                                    amendments do not impose any new                          17 64
                                                                                                                                                                    directly connected with, any transaction
                                                                                                                     FR 39913 (July 23, 1999) (‘‘Part 9
                                                                                                            Delegation’’); 64 FR 39912 (July 23, 1999) (‘‘Part 3
                                                                                                                                                                    for the purchase, sale, delivery or
                                                      9 See generally Dodd-Frank Wall Street Reform
                                                                                                            Advisory’’); 64 FR 39915 (July 23, 1999) (‘‘Part 9      exercise of a commodity for future
                                                    and Consumer Protection Act, Public Law 111–203,        Advisory’’). As discussed more fully below in the       delivery, or a commodity option. The
                                                    124 Stat. 1376 (2010) available at http://              preamble, the Part 9 Advisory permits exchanges to
                                                    www.cftc.gov/LawRegulation/OTCDERIVATIVES/
                                                                                                                                                                    Commission proposes to amend
                                                                                                            file 9.11 notices of final disciplinary or access
                                                    index.htm; see also Dodd-Frank Act section              denial actions with the Commission or with the
                                                                                                                                                                    regulation 9.1(b)(3) by inserting ‘‘swap’’
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                                                    721(a)(50), adding CEA section 1a(50), codified at      NFA. The Part 9 Delegation gives the NFA authority      at the end of the paragraph to account
                                                    7 U.S.C. 1a(50).                                        to receive and process these notices on behalf of the
                                                      10 78 FR 33476 (June 4, 2013).
                                                                                                            Commission. Finally, the Part 3 Advisory relieves         20 7U.S.C. 12c.
                                                      11 77 FR 66288 (Nov. 2, 2012).
                                                                                                            registrants and registrant applicants from                21 Public Law 106–554, 114 Stat. 2763, sec. 110
                                                      12 Id.                                                Commission regulation 3.31 Form 3–R reporting           (2000).
                                                      13 See 78 FR 33476, 33479 (June 4, 2013); 17 CFR      obligations in instances when the information to be       22 The proposed references would be to (i) part 37
                                                    37.2.                                                   reported is solely the result of an exchange            guidance, 17 CFR part 37, appendix B, Core
                                                      14 17 CFR parts 37 and 38.                            disciplinary or access denial action.                   Principle 2, paragraph (a)(13); and (ii) part 38
                                                      15 Public Law 106–554, 114 Stat. 2763, sec. 110          18 64 FR 39917 (July 23, 1999).
                                                                                                                                                                    guidance, 17 CFR part 38, appendix B, Core
                                                    (2000).                                                    19 17 CFR 9.11 and 9.13.                             Principle 13, paragraph (a)(6).



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                                                                            Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules                                                        7741

                                                    for swap transactions on a DCM or on                    regulation 9.2(c) to include SEFs. This                 (3) sets forth the date of service; and (4)
                                                    a SEF as a result of the Dodd-Frank                     change would make clear that the                        recites the manner of service. The less
                                                    Act.23 As noted above, the addition of                  Commission has the discretion to                        formal and less burdensome statement
                                                    ‘‘swap’’ language is a conforming                       review adverse actions imposed by a                     of service effectively serves the same
                                                    amendment as it requires some                           SEF and clarify that SEFs are subject to                purpose as an affidavit of service (i.e.,
                                                    judgment as to its inclusion.                           all of the part 9 requirements.25                       promoting and assuring the full
                                                       Commission regulation 9.1(c)                            Third, the Commission proposes to                    exchange of information among the
                                                    provides for the applicability of part 9                amend regulation 9.2(f) to expand the                   parties by requiring service of
                                                    rules to matters filed with the                         definition of ‘‘member of an exchange’’                 submissions on all of the parties in the
                                                    Commission after August 6, 1987. In                     to include any person who has trading                   proceeding). Additionally, the
                                                    1987, the part 9 rules in place at the                  privileges on an exchange. This change                  Commission proposes to amend
                                                    time were superseded and Commission                     is necessary to conform the part 9                      regulation 9.4(b)(1) to reduce the burden
                                                    regulation 9.1(c) governed whether an                   definition of ‘‘member’’ to the meaning                 on parties by requiring an original and
                                                    existing matter would be subject to the                 set forth in section 1a(34) of the CEA                  one copy (instead of two copies) of all
                                                    pre- or post-1987 part 9 rules. Such                    and in § 1.3(q) of the Commission’s                     documents filed with the Commission.
                                                    determination is no longer necessary                    regulations.26
                                                    because no pre-1987 matters are                            Fourth, the Commission proposes to                   4. Commission Regulation 9.11: Form,
                                                    pending before the Commission. As a                     amend the definition of ‘‘summary                       Contents and Delivery of Notice of
                                                    result, the Proposal seeks to remove text               action’’ in regulation 9.2(k) by adding                 Disciplinary or Access Denial Action
                                                    from Commission regulation 9.1(c) that                  references to part 37 for SEFs and
                                                                                                                                                                       Commission regulation 9.11(a)
                                                    governs whether a matter would be                       replacing the part 8 references with the
                                                                                                                                                                    requires that whenever an exchange
                                                    subject to the pre- or post-1987 part 9                 relevant provisions from part 38.27
                                                                                                                                                                    makes a decision, pursuant to which
                                                    rules.                                                  3. Commission Regulation 9.4: Filing                    disciplinary action or access denial to
                                                    2. Commission Regulation 9.2:                           and Service; Official Docket                            be imposed has become final, the
                                                    Definitions                                                Commission regulation 9.4(a)                         exchange must provide written notice of
                                                       The Commission proposes to revise                    describes the procedures for filing any                 such action to the person against whom
                                                    the definition of four terms in regulation              document required by part 9 to be filed                 the action was taken and to the
                                                    9.2. First, the Commission proposes to                  with the Commission Procedures Clerk,                   Commission within 30 days thereafter.
                                                    revise the definition of ‘‘disciplinary                 including proof of filing and proof of                  In 1999, the Commission delegated
                                                    action’’ in regulation 9.2(b) by deleting               service. To ease the burden on parties,                 authority to the NFA to receive and
                                                    the reference to regulation 8.03(i). The                the Commission proposes to amend                        process exchange disciplinary and
                                                    Commission also proposes to remove                      regulation 9.4(a) by replacing the                      access denial information (‘‘Part 9
                                                    the reference to ‘‘member of an                         requirement of a formal affidavit of                    Delegation’’).28 Consequently, the NFA
                                                    exchange’’ and insert ‘‘person’’ in its                 service with the requirement that parties               currently serves as the official custodian
                                                    place. The Commission believes it is                    submit a signed ‘‘statement of service’’                of records for exchange disciplinary
                                                    necessary to expand the ‘‘disciplinary                  that: (1) Confirms that service has been                filings. The Commission intends to
                                                    action’’ definition to account for                      made; (2) identifies each person served;                again delegate authority to the NFA, via
                                                    instances where an exchange imposes                                                                             an updated order to be published
                                                    sanctions against a person that is not a                   25 Id. The Commission notes that regulation 37.2     concurrently with the final rule, to
                                                    member of the exchange. The                             requires, among other things, that a SEF shall          receive and process exchange
                                                                                                            comply with the part 9 regulations. 17 CFR 37.2.        disciplinary and access denial
                                                    Commission’s proposal to include                        Additionally, footnote 40 of the SEF Final Rules
                                                    ‘‘person’’ in the ‘‘disciplinary action’’               states ‘‘the term ‘exchange’ used in part 9 of the      information. The Commission proposes
                                                    definition is consistent with the                       Commission’s regulations should be interpreted to       to issue an updated order that includes
                                                    statutory language found in Core                        include a SEF for purposes of applying the              specific duties delegated to the NFA,
                                                                                                            requirements of part 9 to a SEF.’’ 78 FR 33476,
                                                    Principle 2 for DCMs and section 8c(b)                  33479 (June 4, 2013).
                                                                                                                                                                    such as: (1) To process exchange
                                                    of the CEA, as amended by the Dodd-                        26 Section 1a(34) of the CEA provides that the       disciplinary information; (2) to provide
                                                    Frank Act.24                                            term ‘‘member’’ means, among other things, an           the Commission with access to a report
                                                       Second, the Commission proposes to                   individual, association, partnership, corporation, or   summarizing all recent exchange
                                                                                                            trust having trading privileges on the registered       disciplinary information; (3) to assist
                                                    amend the definition of ‘‘exchange’’ in                 entity. See also 17 CFR 1.3(q). By amending the
                                                                                                            definition of ‘‘member of an exchange’’ to include      the Commission in enforcing exchange
                                                       23 Section 723(a)(3) of the Dodd-Frank Act added     all persons with trading privileges, the Commission     compliance with regulation 9.11 filing
                                                    section 2(h)(8) of the CEA to require, among other      is clarifying that the appellate process and            requirements; and (4) to serve as the
                                                    things, that execution of swaps subject to the          Commission review, as defined in part 9, would          official custodian of a database
                                                    clearing requirement of section 2(h)(1) of the CEA      apply to all persons with trading privileges.
                                                    must occur on either a DCM or a SEF.                       27 Specifically, the proposed definition of
                                                                                                                                                                    containing records of the exchanges’
                                                       24 Section 735 of the Dodd-Frank Act amends          ‘‘summary action’’ means a disciplinary action          disciplinary and access denial actions.
                                                    section 5 of the CEA, including DCM Core Principle      resulting in the imposition of a penalty on a person       In 1999, concurrent with the Part 9
                                                    2. Paragraph (B)—Capacity of Contract Market—of         for violation of rules of the exchange permitted
                                                    Core Principle 2 specifically requires that the board   under the provisions of part 37, appendix B, Core
                                                                                                                                                                    Delegation, the Commission published
                                                    of trade shall have the capacity to detect,             Principle 2, paragraph (a)(10)(vi) or part 38,          an advisory permitting exchanges to file
                                                    investigate, and apply appropriate sanctions to any     appendix B, Core Principle 13, paragraph (a)(4)         9.11 notices with the Commission or the
                                                    person that violates any rule of the contract market.   (penalty for impeding progress of hearing); part 37,    NFA (‘‘Part 9 Advisory’’).29 While
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                                                    Section 8c(b) of the CEA, 7 U.S.C. 12c(b), provides     appendix B, Core Principle 2, paragraph (a)(14) or
                                                    that the Commission may, in its discretion and in       part 38, appendix B, Core Principle 13, paragraph
                                                                                                                                                                       28 64 FR 39913 (July 23, 1999). The NFA created
                                                    accordance with such standards and procedures as        (a)(7) (emergency disciplinary actions); part 37,
                                                    it deems appropriate, review any decision by an         appendix B, Core Principle 2, paragraph (a)(13)         the Background Affiliation Status Information
                                                    exchange whereby a person is suspended, expelled,       (summary fines for violations of rules regarding        Center (‘‘BASIC’’) system through which the public
                                                    disciplined, or denied access to the exchange. In       timely submission of records); or part 38, appendix     can access information pertaining to the types of
                                                    addition, section 8c(b) of the CEA provides that the    B, Core Principle 13, paragraph (a)(6) (summary         violations committed, penalties imposed, the
                                                    Commission may, in its discretion and upon              fines for violations of rules regarding timely          effective date of the action, and, in some cases, the
                                                    application of any person who is adversely affected     submission of records, decorum, or other similar        text from the exchange’s decision.
                                                    by any other exchange action, review such action.       activities).                                               29 64 FR 39915 (July 23, 1999).




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                                                    7742                    Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules

                                                    permitting filing with the Commission,                  exchanges with greater transparency                    NFA. Specifically, proposed
                                                    the Part 9 Advisory encourages                          concerning where market abuses                         Commission regulation 9.11(c) provides
                                                    exchanges to file the required notice                   originate and whether the abuses are                   that filing of the notice with the NFA is
                                                    with the NFA and to do so                               concentrated among certain product                     accomplished when an authorized
                                                    electronically as the Commission                        types.31 Specifically, proposed                        exchange employee verifies the
                                                    believes such filing to be faster and                   Commission regulation 9.11(b) provides                 accuracy of the information entered into
                                                    more cost-effective for both the                        that for purposes of part 9, the notice of             BASIC.
                                                    exchanges and the NFA. In an effort to                  disciplinary action or access denial                     Commission regulation 9.11(d) sets
                                                    codify the Part 9 Advisory and formally                 action provided to the person against                  forth the effect of delivery and filing by
                                                    replace the regulation 9.11 requirement                 whom the action was taken may be a                     mail. The Commission proposes to
                                                    that written notice be provided to the                  copy of a decision which accords with                  amend regulation 9.11(d) by deleting
                                                    Commission, the Commission proposes                     part 37 and part 38 regulations and                    instructions related to filing notices
                                                    to amend regulation 9.11 to require that                guidance.32 Alternatively, the notice                  with the Commission by mail since
                                                    notice be provided to the NFA via the                   provided to the person against whom                    proposed regulation 9.11(c) calls for
                                                    NFA’s BASIC system and eliminate the                    the action was taken must include: (i)                 notice filings be made to the NFA via
                                                    option of filing the notice with the                    The name of the individual against                     BASIC instead of with the Commission
                                                    Commission.                                             whom the action was taken; (ii) a                      by mail.
                                                      Additionally, the Commission                          statement of the reasons for the action,                 Commission regulation 9.11(e) sets
                                                    proposes to amend regulation 9.11(a) by                 detailing the exchange product which                   forth the procedures for certifying the
                                                    replacing the reference to regulation                   was involved, as applicable, and                       notice provided pursuant to
                                                    8.27 with a reference to part 38.30                     whether the violation that resulted in                 Commission regulation 9.11. The
                                                      Commission regulation 9.11(b) sets                    the action also resulted in financial                  Commission proposes to amend
                                                    forth the content that must be included                 harm to any customers together with a                  regulation 9.11(e) by adding instructions
                                                    in the disciplinary notice. The                         list of any rules which the individual                 for the certification of notice filed with
                                                    Commission proposes ministerial and                     was charged with having violated or                    the NFA. Specifically, proposed
                                                    conforming amendments to regulation                     which otherwise serve as the basis of                  Commission regulation 9.11(e) provides
                                                    9.11(b) by inserting references to part                 the action; (iii) a statement of the                   that notice filed with the NFA is
                                                    37, replacing the references to part 8                  exchange’s conclusions and findings                    deemed certified when an authorized
                                                    with references to part 38, codifying the               regarding each violation charged or, in                exchange employee verifies the
                                                    Part 9 Advisory clarification that the                  the event of a settlement, a statement                 accuracy of the information entered into
                                                    contents of the notice include whether                  specifying those rule violations which                 BASIC.
                                                    the violation resulted in customer harm,                the exchange believes were committed;
                                                    and specifying the content of notices                   (iv) the terms of the action; (v) the date             5. Commission Regulation 9.12:
                                                    provided to: (1) The person against                     the action was taken and the date the                  Effective Date of Disciplinary or Access
                                                    whom the action was taken and (2) the                   action will become effective; and (vi) a               Denial Action
                                                    NFA. Additionally, for the sake of                      statement informing the party subject to                  Pursuant to Commission regulation
                                                    clarity, the Commission is proposing to                 the action of the availability of                      9.12(a), a disciplinary action or access
                                                    renumber regulation 9.11(b) by                          Commission review pursuant to section                  denial imposed by an exchange will not
                                                    assigning separate paragraphs 9.11(b)(1)                8c of the CEA. Additionally, the                       become effective until at least 15 days
                                                    to specify the notice to be provided by                 Commission proposes to amend                           after the written notice prescribed by
                                                    DCMs, 9.11(b)(2) to specify the notice to               regulation 9.11(b) by requiring that                   Commission regulation 9.11 is delivered
                                                    be provided by SEFs, and 9.11(b)(3) to                  notice provided to the NFA include                     to the person disciplined or denied
                                                    detail the list of items to be included in              items (i)–(v) immediately above.                       access. However, an exchange may
                                                    the contents of the notice.                                Commission regulation 9.11(c) sets                  cause a disciplinary action to become
                                                      Furthermore, the Commission is                        forth the delivery process that must be                effective prior to that time under certain
                                                    proposing a substantive amendment to                    followed when providing notice of                      circumstances that are identified in
                                                    regulation 9.11(b)(3)(ii) by adding an                  disciplinary action or access denial                   Commission regulation 9.12(a)(1)–(a)(4).
                                                    additional element required to be                       action to the person who was the subject               The Commission proposes to amend
                                                    included in the contents of the notice.                 to the action, and the filing process that             regulation 9.12(a)(1)–(a)(4) by adding
                                                    Because part 9 pertains to both DCMs                    must be followed when providing notice                 references to part 37 and replacing
                                                    and SEFs, which offer a number of                       of the action to the Commission. The                   references to part 8 with references to
                                                    varied products for trading, the                        Commission proposes to amend                           part 38.33
                                                    Commission believes that requiring                      regulation 9.11(c) by deleting
                                                    exchanges to detail the type of product                 instructions for filing notice with the                   33 Specifically, the Commission proposes to
                                                    (as applicable) involved in the adverse                 Commission and replacing them with                     amend regulation 9.12(a)(1) by adding a reference
                                                    action as part of the 9.11 notice will                  instructions for filing notice with the                to part 37, appendix B, Core Principle 2, paragraph
                                                    provide the Commission, market                                                                                 (a)(14) (emergency disciplinary actions) and
                                                                                                                                                                   replacing the reference to regulation 8.25 with a
                                                    participants, the public, and other                        31 For example, a product trading on a DCM might
                                                                                                                                                                   reference to Part 38, appendix B, Core Principle 13,
                                                                                                            be specified as a July 2016 Eurodollar future; while   paragraph (a)(7) (emergency disciplinary actions).
                                                       30 Specifically, the reference to Commission         a product trading on a SEF may be a CDX North          In regulation 9.12(a)(2), the Commission proposes
                                                    regulation 8.27 would be replaced with a reference      American High Yield Series 26 5 year.                  to add a reference to part 37, appendix B, Core
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                                                    to part 38, appendix B, Core Principle 13, paragraph       32 The notice required by Commission regulation     Principle 2, paragraph (a)(10)(vi) (hearings) and
                                                    (a)(6) (summary fines for violations of rules           9.11 may be satisfied by providing a copy of the       replace the reference to regulation 8.17(b) with a
                                                    regarding timely submission of records, decorum, or     final decision in accordance with part 37, appendix    reference to part 38, appendix B, Core Principle 13,
                                                    other similar activities) for DCMs. Under the           B, Core Principle 2, paragraph (a)(9) or part 38,      paragraph (a)(4) (hearings). The Commission
                                                    current rule and in the proposed rule, DCMs would       appendix B, Core Principle 13, paragraph (a)(3)        proposes to amend regulation 9.12(a)(3) by adding
                                                    not be required to report summary fines with            (settlement offers); Commission regulations            a reference to part 37, appendix B, Core Principle
                                                    respect to violations related to decorum or attire.     37.206(d) or 38.708 (decisions); or part 37,           2, paragraph (a)(13) (summary fines for violations
                                                    Decorum or attire violations do not apply to SEFs.      appendix B, Core Principle 2, paragraph (a)(11)(iv)    of rules regarding timely submission of records) and
                                                    Accordingly, SEFs are required to report all            or part 38, appendix B, Core Principle 13, paragraph   replacing the reference to regulation 8.27 with a
                                                    disciplinary and access denial actions to BASIC.        (a)(5)(iv) (appeal decisions).                         reference to part 38, appendix B, Core Principle 13,



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                                                                            Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules                                                       7743

                                                       Pursuant to Commission regulation                     disciplinary action on the premises of                 misconduct and to improve overall
                                                    9.12(b), an exchange that determines                     an exchange does little to publicize a                 compliance among market participants.
                                                    that a disciplinary action will become                   disciplinary action. In an effort to                   In addition, market participants may use
                                                    effective prior to the expiration of 15                  modernize Commission regulation 9.13,                  such information to educate themselves
                                                    days after written notice must notify the                and to provide better notice of a                      as to compliance matters, potential
                                                    person disciplined in writing either                     disciplinary action or an access denial                violations and related sanctions, as well
                                                    personally or by telegram or other                       action, the Commission proposes to                     as to revise their own compliance
                                                    means of written telecommunication.                      amend regulation 9.13 to require such                  procedures involving similar business
                                                    The exchange must also immediately                       notice be posted on an exchange’s Web                  practices. Further, any market
                                                    notify the Commission by telegram or                     site to which its members, market                      participant facing allegations of rule
                                                    other means of written                                   participants, and the public regularly                 violations may access an exchange’s
                                                    telecommunication. In order to                           have access.34 In addition, to better                  existing disciplinary decisions to gain
                                                    modernize regulation 9.12(b), the                        inform market participants and                         greater insight on related facts and
                                                    Commission proposes to replace                           maintain a public record of disciplinary               sanctions. Finally, in an effort to
                                                    references to ‘‘telegram or other means                  action taken by an exchange, the                       enhance access to disciplinary
                                                    of written telecommunication’’ with the                  Commission proposes to amend                           information, the Commission
                                                    term ‘‘email’’ and provide a Commission                  regulation 9.13 to require that such                   anticipates that upon the effective date
                                                    email address where notice of the early                  notice of a disciplinary action or an                  of the final part 9 rules, it will include
                                                    effective date can be sent by the                        access denial action be maintained and                 links on its SmartCheck Web site to
                                                    exchange.                                                readily available on an exchange’s Web                 each exchange’s Web site for posting
                                                                                                             site.35 As a result, the existing                      notice of disciplinary action or access
                                                    6. Commission Regulation 9.13:                           requirement to maintain and make                       denial action.36
                                                    Publication of Notice                                    available for public inspection a record               7. Commission Regulation 9.24: Petition
                                                       Pursuant to Commission regulation                     of the information contained in the                    for Stay Pending Review
                                                    9.13, whenever an exchange suspends,                     disciplinary or access denial notice
                                                    expels or otherwise disciplines, or                      would be eliminated.                                      Commission regulation 9.24 provides
                                                    denies any person access to the                             The Commission recognizes that NFA                  the procedures that a person disciplined
                                                    exchange, it must make public its                        BASIC presently acts as the central                    or denied access by an exchange must
                                                    findings by disclosing at least the                      repository of all disciplinary action                  follow in the event that a person
                                                    information contained in the notice                      taken by DCMs and SEFs. However,                       petitions the Commission to stay a
                                                    required by Commission regulation                        such disciplinary information cannot be                disciplinary or access denial action. The
                                                    9.11(b). An exchange also must make                      queried by a specific exchange. In                     Commission proposes to amend
                                                    such findings public as soon as the                      general, the Commission believes that                  regulation 9.24(a)(2) by adding a
                                                    disciplinary action or access denial                     greater access to exchange disciplinary                reference to part 37 and replacing the
                                                    action becomes effective in accordance                   actions provides valuable guidance and                 reference to part 8 with a reference to
                                                    with the provisions of Commission                        information to market participants and                 part 38.37 In addition, the Commission
                                                    regulation 9.12 by posting a notice in a                 potential market participants. Also,                   proposes to remove the reference to
                                                    conspicuous place on its premises to                     maintaining disciplinary actions on an                 regulation 8.26, which provided for
                                                    which its members and the public                         exchange’s public Web site can serve to                emergency action hearing procedures,
                                                    regularly have access for a period of five               further deter and prevent future                       from regulation 9.24(a)(2), as the part 37
                                                    consecutive business days. The                                                                                  and 38 emergency disciplinary action
                                                    exchange must also maintain and make                        34 The Commission acknowledges that many            guidance (cited above) provides for
                                                    available for public inspection a record                 DCMs have already adopted more modern methods          emergency action hearing procedures.
                                                                                                             to publicize notices of disciplinary action. For
                                                    of the information contained in the                      example, the CME Group DCMs (Chicago Board of          8. Commission Regulation 9.31:
                                                    disciplinary or access denial notice.                    Trade (‘‘CBOT’’), Chicago Mercantile Exchange          Commission Review of Disciplinary or
                                                       The Commission notes that regulation                  (‘‘CME’’), Commodity Exchange, Inc., (‘‘COMEX’’),      Access Denial Action on Its Own
                                                    9.13 was published in 1987, at a time                    and New York Mercantile Exchange, Inc.
                                                                                                             (‘‘NYMEX’’)) and ICE Futures U.S. notify
                                                                                                                                                                    Motion
                                                    when futures trading occurred primarily                  subscribers of exchange disciplinary postings via         Commission regulation 9.31(a)
                                                    in person in the exchange’s trading pits                 email. The Commission also notes that the              permits the specified Divisions at the
                                                    and on exchange premises. Therefore,                     proposed amendment generally tracks the
                                                                                                             Securities and Exchange Commission’s (‘‘SEC’’)         Commission to request that an exchange
                                                    posting notice of disciplinary action or
                                                                                                             standards for Release of Disciplinary Complaints,      file the record of an exchange
                                                    access denial action on exchange                         Decisions and Other Information in Financial           proceeding and other documents
                                                    premises, where it could be readily                      Industry Regulatory Authority, Inc. (‘‘FINRA’’) Rule   applicable to an exchange proceeding
                                                    viewed by market participants, was an                    8313, in which FINRA, with SEC approval, has
                                                                                                             established its standard for releasing to the public   with such Divisions, upon review of the
                                                    effective form of publicizing the
                                                                                                             a copy of FINRA issued disciplinary complaints,
                                                    disciplinary action. Today, most trading                 decisions, and other disciplinary information. See        36 In November 2014, the CFTC launched the
                                                    on DCMs and some of the trading on                       FINRA Rule 8313 ‘‘Release of Disciplinary              SmartCheck Web site. It connects investors to tools
                                                    SEFs occurs by electronic execution.                     Complaints, Decisions and Other Information,’’         to check the registration, license, and disciplinary
                                                    While some SEF trading is executed via                   available at http://finra.complinet.com/en/display/    history of certain financial professionals. This
                                                                                                             display_main.html?rbid=2403&element_id=3892.           collection of tools allows the responsible investor
                                                    a voice component, both electronic and                   See also SEC Release No. 34–69825; File No. SR–        to confirm the credentials of investment
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                                                    voice execution occurs between market                    FINRA–2013–018 (June 21, 2013).                        professionals, uncover any past disciplinary
                                                    participants that are in geographically                     35 Some DCMs currently maintain records of          history, and stay ahead of scam artists with news
                                                    distinct locations and generally do not                  disciplinary action on their Web sites. For example,   and alerts.
                                                    set foot on exchange premises.                           CBOE Futures Exchange, LLC maintains a                    37 Specifically, the Commission proposes to add

                                                                                                             disciplinary decision database on its Web site that    a reference to part 37, appendix B, Core Principle
                                                    Consequently, posting a notice of                        allows the public to review disciplinary decisions     2, paragraph (a)(14) (emergency disciplinary
                                                                                                             dating back to 2012. The Commission notes that in      actions) and replace the reference to regulation 8.25
                                                    paragraph (a)(6) (summary fines for violations of        the securities industry, the New York Stock            with a reference to part 38, appendix B, Core
                                                    rules regarding timely submission of records,            Exchange maintains disciplinary notices as far back    Principle 13, paragraph (a)(7) (emergency
                                                    decorum, or other similar activities).                   as 1972.                                               disciplinary actions).



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                                                    7744                    Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules

                                                    exchange notice specified in                            C. Part 3                                               information. Additionally, the
                                                    Commission regulation 9.11, in                                                                                  Commission seeks to replace the Part 9
                                                                                                            1. Commission Regulation 3.31:
                                                    instances where the person disciplined                                                                          Advisory by proposing to amend
                                                                                                            Deficiencies, Inaccuracies, and Changes
                                                    or denied access by the exchange has                                                                            regulation 9.11 to require that notice be
                                                                                                            To Be Reported
                                                    not appealed the exchange decision to                                                                           provided to the NFA via the NFA’s
                                                    the Commission. The Commission                             Pursuant to Commission regulation                    BASIC system. Similarly, the
                                                    proposes to amend regulation 9.31(a) to                 3.31, an applicant or registrant as a                   Commission intends to codify the Part
                                                                                                            futures commission merchant, retail                     3 Advisory by proposing to amend the
                                                    delete the reference to the Division of
                                                                                                            foreign exchange dealer, swap dealer,                   end of the first sentence of regulation
                                                    Clearing and Risk from the first                        major swap participant, commodity                       3.31(a)(1) with language that relieves the
                                                    sentence. This provision had previously                 trading advisor, commodity pool                         following applicants or registrants from
                                                    been amended to replace an earlier                      operator, introducing broker, floor                     filing a Form 3–R if the information to
                                                    reference to the Division [of] Clearing                 trader that is a non-natural person or                  be reported is solely the result of an
                                                    and Intermediary Oversight with                         leverage transaction merchant shall                     exchange disciplinary or access denial
                                                    references to the Division of Swap                      promptly correct any deficiency or                      action: Futures commission merchants
                                                    Dealer and Intermediary Oversight and                   inaccuracy in Form 7–R or Form 8–R                      (‘‘FCMs’’), retail foreign exchange
                                                    the Division of Clearing and Risk, as the               which has rendered the information                      dealers (‘‘RFEDs’’), swap dealers
                                                    successors to the Division of Clearing                  contained therein non-current or                        (‘‘SDs’’), major swap participants
                                                    and Intermediary Oversight. Given the                   inaccurate. These corrections must be                   (‘‘MSPs’’), commodity trading advisors
                                                    current organizational responsibilities of              made on Form 3–R and filed in                           (‘‘CTAs’’), commodity pool operators
                                                    the Divisions, it is not necessary to                   accordance with the form’s instructions                 (‘‘CPOs’’), introducing brokers (‘‘IBs’’),
                                                    include the Division of Clearing and                    (such instructions presently require that               floor traders (‘‘FTs’’) that are non-
                                                    Risk in Commission regulation 9.31(a).                  Form 3–R be filed with the NFA).                        natural persons or leverage transaction
                                                    The Division of Clearing and Risk does                     In 1999, concurrent with the Part 9                  merchants (‘‘LTMs’’).
                                                    not typically review notices of exchange                Delegation and Part 9 Advisory, the
                                                                                                            Commission issued an advisory                           III. Related Matters
                                                    disciplinary or access denial actions
                                                                                                            pertaining to part 3 of the Commission’s                A. Regulatory Flexibility Act
                                                    filed pursuant to Commission regulation
                                                                                                            regulations (‘‘Part 3 Advisory’’). The
                                                    9.11 but instead reviews reports                                                                                   The Regulatory Flexibility Act
                                                                                                            Part 3 Advisory relieves registrants and
                                                    regarding rule enforcement activities                   applicants for registrant status from                   (‘‘RFA’’) requires that agencies consider
                                                    and sanctions imposed against clearing                  filing a Form 3–R, as required under                    whether the regulations they propose
                                                    members by registered derivatives                       Commission regulation 3.31, if the                      will have a significant economic impact
                                                    clearing organizations pursuant to                      information to be reported is solely the                on a substantial number of small entities
                                                    Commission regulations 39.17(a)(3) and                  result of an exchange disciplinary or                   and, if so, provide a regulatory
                                                    39.19(c)(4)(xi). The Commission also                    access denial action.38 The Part 3                      flexibility analysis respecting the
                                                    proposes to amend regulation 9.31(a) by                 Advisory also explains that the                         impact.39 The part 9 rules proposed by
                                                    adding language that requires the                       Commission has: (1) Permitted                           the Commission will impact all SEFs
                                                    exchange to provide information to the                  exchanges (via the Part 9 Advisory) to                  and DCMs. The Commission has
                                                    requesting Division in the manner                       file either electronic or written 9.11                  previously established certain
                                                    requested by the Division and to the                    notices with the NFA instead of the                     definitions of ‘‘small entities’’ to be used
                                                                                                            Commission and (2) delegated to the                     by the Commission in evaluating the
                                                    person who is the subject of the
                                                                                                            NFA (via the Part 9 Delegation) the duty                impact of its regulations on small
                                                    disciplinary or access denial action in
                                                                                                            to receive and process exchange                         entities in accordance with the RFA.40
                                                    the manner prescribed by regulation
                                                                                                            disciplinary and access denial action                   The Commission has also determined
                                                    9.11(c).                                                                                                        that DCMs and SEFs are not small
                                                                                                            information filed by the exchanges in
                                                       The Commission also proposes to                      accordance with Commission regulation                   entities for the purpose of the RFA.41
                                                    amend regulation 9.31(b) to replace                     9.11. The Commission further explained                     The part 3 rules proposed herein
                                                    reference to the ‘‘Commission’’ with                    that, as a result of the Part 9 Advisory                would affect certain applicant or
                                                    ‘‘NFA’’ in the second sentence. Such                    and Part 9 Delegation, the NFA                          registrant FCMs, RFEDs, SDs, MSPs,
                                                    replacement is necessary to conform                     possesses the exchange disciplinary and                 CTAs, CPOs, IBs, FTs who are non-
                                                    Commission regulation 9.31(b) to                        access denial action information that                   natural persons, and LTMs who would
                                                    proposed changes to Commission                          registrants and applicants for                          no longer have to file a Form 3–R if the
                                                    regulation 9.11 that call for a notice of               registration status would otherwise be                  information to be reported is solely the
                                                    disciplinary or access denial action to                 required to include in Form 3–R.                        result of an exchange disciplinary or
                                                    be provided to the NFA.                                 Therefore, to avoid duplicative                         access denial action. The Commission
                                                                                                            reporting, the Part 3 Advisory advises                  has previously determined that FCMs,
                                                    9. Minor Changes to Commission                          all individuals and entities subject to                 RFEDS, SDs, MSPs, CPOs, and LTMs are
                                                    Regulations 9.3, 9.4, 9.8, and 9.9                      Commission regulation 3.31 that they                    not small entities for purposes of the
                                                                                                            are relieved from Commission                            RFA.42 Therefore, the requirements of
                                                      The Commission proposes to amend
                                                    regulation 9.3 by correcting the                        regulation 3.31 reporting obligations                     39 5   U.S.C. 601 et seq.
                                                                                                            resulting from an exchange disciplinary
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                                                    referenced title of regulation 12.7 to                                                                            40 See   47 FR 18618 through 18621 (Apr. 30,
                                                                                                            or access denial action and reported by                 1982).
                                                    read ‘‘Ex parte communications in
                                                                                                            an exchange pursuant to a 9.11 notice.                    41 See 47 FR 18618, 18619 (Apr. 30, 1982)
                                                    reparation proceedings.’’ The                              As discussed above, the Commission                   (DCMs); 78 FR 33548 (June 4, 2013) (SEFs).
                                                    Commission also proposes to amend                       intends to again delegate authority to                    42 See Policy Statement and Establishment of

                                                    regulations 9.4(b)(4) and (c)(3), 9.8(1),               the NFA to receive and process                          Definitions of ‘‘Small Entities’’ for Purposes of the
                                                    and 9.9(b)(3) and (4) to make them                                                                              Regulatory Flexibility Act, 47 FR 18618 (Apr. 30,
                                                                                                            exchange disciplinary and access denial                 1982) (FCMs and CPOs); Leverage Transactions, 54
                                                    gender neutral.                                                                                                 FR 41068 (Oct. 5, 1989) (LTMs); Regulation of Off-
                                                                                                              38 64   FR 39912 (July 23, 1999).                     Exchange Retail Foreign Exchange Transactions and



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                                                                            Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules                                                     7745

                                                    the RFA do not apply to those entities.                 displays a currently valid control                     references to the part 37 SEF
                                                    With respect to CTAs, FTs, and IBs, the                 number issued by the Office of                         regulations.47
                                                    Commission has found it appropriate to                  Management and Budget (‘‘OMB’’). This                     Furthermore, the Commission is
                                                    consider whether such registrants                       NPRM contains recordkeeping and                        proposing to add an additional element
                                                    should be deemed small entities for                     reporting requirements that are                        required to be included in the contents
                                                    purposes of the RFA on a case-by-case                   collections of information within the                  of the notice specifying which product
                                                    basis, in the context of the particular                 meaning of the PRA.                                    type (as applicable) was involved in the
                                                    Commission regulation at issue.43 As                       The Proposal contains provisions that               adverse action. The Commission
                                                    certain of these registrants may be small               would qualify as collections of                        believes that by adding such additional
                                                    entities for purposes of the RFA, the                   information, for which the Commission                  element to the contents of the notice its
                                                    Commission has considered whether                       has already sought and obtained control                impact on the burden would be de
                                                    this Proposal would have a significant                  numbers from the OMB. The titles for                   minimis. For example, to describe a
                                                    impact on these registrants.                            these collections of information are
                                                       The proposed amendment to                                                                                   product trading on a DCM, the notice
                                                                                                            ‘‘Part 38—Core Principles and Other                    might include the description, ‘‘July
                                                    Commission regulation 3.31 is technical                 Requirements for Designated Contract
                                                    and not substantive in nature. In 1999,                                                                        2016 Eurodollar future;’’ while a
                                                                                                            Markets’’ (OMB Control Number 3038–                    product trading on a SEF may be a
                                                    the Commission published the Part 3                     0052) and ‘‘Part 37—Core Principles and
                                                    Advisory which relieved all applicants                                                                         ‘‘CDX North American High Yield
                                                                                                            Other Requirements for Swap Execution                  Series 26 5 year.’’ Additionally, as a
                                                    and registrants from filing a Form 3–R,                 Facilities’’ (OMB Control Number 3038–
                                                    as required under Commission                                                                                   result of the Commission’s removal of
                                                                                                            0074). If adopted, responses to these                  part 8, the Commission is proposing to
                                                    regulation 3.31, if the information to be               collections of information would be
                                                    reported is solely the result of an                                                                            remove all cross-references in regulation
                                                                                                            mandatory.                                             9.11 to the part 8 regulations and
                                                    exchange disciplinary or access denial
                                                    action.44 As discussed in the preamble,                    As discussed below, the Commission                  replace these references with applicable
                                                    the proposed amendment codifies the                     is not seeking to amend information                    regulations, guidance, and acceptable
                                                    filing relief set forth in the Part 3                   collections 3038–0052 or 3038–0074                     practices from parts 37 and 38.48
                                                    Advisory and would not impose any                       because the Commission believes that                   Finally, in 1999, the Commission
                                                    new regulatory obligations on any                       the rule modifications proposed herein                 published the Part 9 Advisory
                                                    registrant, including CTAs, FTs, and                    will not impose any new information                    permitting exchanges to file 9.11 notices
                                                    IBs. The Commission does not,                           collection requirements that require                   with the Commission or with the
                                                    therefore, expect small entities to incur               approval from OMB under the PRA.                       NFA.49 In an effort to codify the Part 9
                                                    any additional costs as a result of this                Accordingly, the Commission invites                    Advisory and formally replace the
                                                    Proposal. Consequently, the                             public comment on the accuracy of its                  regulation 9.11 requirement that written
                                                    Commission finds that no significant                    estimate regarding the impact of                       notice be provided to the Commission,
                                                    economic impact on small entities will                  proposed Commission regulation 9.11                    the Commission proposes to amend
                                                    result from this Proposal.                              on collections 3038–0052 and 3038–                     regulation 9.11 to require notice be
                                                       Accordingly, the Chairman, on behalf                 0074 and its determination that no                     provided to the NFA via the BASIC
                                                    of the Commission pursuant to 5 U.S.C.                  additional recordkeeping or information                system.
                                                    605(b), certifies that the proposed rules               collection requirements or changes to
                                                                                                            existing collection requirements would                 3. Clarification of Collections 3038–
                                                    will not have a significant economic                                                                           0052 and 3038–0074
                                                    impact on a substantial number of small                 result from the Proposal.46
                                                    entities.                                               2. Section 9.11 Amendments                                The Commission notes that all DCMs
                                                    B. Paperwork Reduction Act                                                                                     and SEFs are already subject to the part
                                                                                                              As discussed above, the proposed                     9 reporting requirements.50 First, part 9
                                                    1. Introduction                                         Commission regulation 9.11                             applies to DCMs, by explicitly defining
                                                       The Paperwork Reduction Act of 1995                  amendments are primarily technical and                 ‘‘exchange’’ in Commission regulation
                                                    (‘‘PRA’’) imposes certain requirements                  not substantive in nature. Commission                  9.2(c) for purposes of the rules as ‘‘any
                                                    on Federal agencies, including the                      regulation 9.11 currently requires that                board of trade which has been
                                                    Commission, in connection with their                    whenever an exchange makes a                           designated as a contract market.’’ 51
                                                    conducting or sponsoring any collection                 decision, pursuant to which                            Furthermore, former regulation 38.2,
                                                    of information, as defined by the PRA.45                disciplinary action or access denial to                which was adopted by the Commission
                                                                                                            be imposed has become final, the                       on August 10, 2001, specifically
                                                    An agency may not conduct or sponsor,
                                                                                                            exchange must provide written notice of                required DCMs to comply with part 9
                                                    and a person is not required to respond
                                                                                                            such action to the person against whom                 (‘‘2001 DCM Rulemaking’’).52 In the
                                                    to, a collection of information unless it
                                                                                                            the action was taken and to the                        2001 DCM Rulemaking, the Commission
                                                    Intermediaries, 75 FR 55410, 55416 (Sept. 10, 2010)
                                                                                                            Commission within 30 days thereafter.                  requested an OMB control number for
                                                    (RFEDs); and Registration of Swap Dealers and           Among the proposed amendments to                       part 38 to account for the reporting
                                                    Major Swap Participants, 77 FR 2613, 2620 (Jan. 19,     regulation 9.11, the Commission is
                                                    2012) (SDs and MSPs).                                   clarifying the existing rules to formally                47 17 CFR part 37. As explained earlier in the
                                                       43 See 47 FR 18620 (Apr. 30, 1982) (CTAs);
                                                                                                            incorporate SEFs under the                             preamble, SEFs are already subject to the part 9
                                                    Registration of Floor Traders; Mandatory Ethics
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                                                    Training for Registrants; Suspension of Registrants     requirements and therefore include                     reporting requirements under regulation 37.2, in
                                                    Charged With Felonies, 58 FR 19575, 19588 (Apr.                                                                which the Commission specified that SEFs shall
                                                    15, 1993) (FTs); and Introducing Brokers and              46 For collection 3038–0052, see OMB Control No.
                                                                                                                                                                   comply with the requirements of part 9.
                                                                                                                                                                     48 Removal of part 8 at 77 FR 66288, (Nov. 2,
                                                    Associated Persons of Introducing Brokers,              3038–0052, available at http://www.reginfo.gov/
                                                    Commodity Trading Advisors and Commodity Pool                                                                  2012); and 17 CFR parts 37 and 38.
                                                                                                            public/do/                                               49 64 FR 39915 (July 23, 1999).
                                                    Operators; Registration and Other Regulatory            PRAOMBHistory?ombControlNumber=3038-0052.
                                                    Requirements, 48 FR 35248, 35276 (Aug. 3, 1983)         For collection 3038–0074, see OMB Control No.
                                                                                                                                                                     50 17 CFR part 9 and 38.2 [DCMs]; 17 CFR 37.2

                                                    (IBs).                                                  3038–0074, available at http://www.reginfo.gov/        [SEFs].
                                                       44 64 FR 39912 (July 23, 1999).                                                                               51 17 CFR 9.2(c).
                                                                                                            public/do/
                                                       45 44 U.S.C. 3501 et seq.                            PRAOMBHistory?ombControlNumber=3038-0074.                52 66 FR 42277 (August 10, 2001).




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                                                    7746                    Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules

                                                    requirements, including part 9.53 The                   automated, electronic, mechanical, or                    the reporting and notice requirements
                                                    text of Commission regulation 38.2 that                 other technological information                          for DCMs and SEFs. The Commission
                                                    specifically required DCMs to comply                    collection techniques.                                   compares the costs and benefits of this
                                                    with part 9 was amended on June 19,                        Copies of the submission from the                     rulemaking against a baseline of the
                                                    2012, and currently provides that DCMs                  Commission to OMB are available from                     status quo, the current requirements
                                                    shall comply with all applicable                        the CFTC Clearance Officer, 1155 21st                    under part 3 and part 9. As discussed
                                                    regulations under Title 17 of the Code                  Street NW., Washington, DC 20581,                        more fully below, the Commission
                                                    of Federal Regulations, except for                      (202) 418–5160 or from http://                           preliminarily believes that the only new
                                                    certain exempt provisions.54 Part 9 is                  RegInfo.gov. Persons desiring to submit                  cost that would be imposed by the
                                                    not included in the list of exempt                      comments on the proposed information                     Proposal is the requirement in
                                                    provisions. Accordingly, Commission                     collection requirements should send                      Commission regulation 9.13 for DCMs
                                                    regulation 38.2 still requires that DCMs                those comments to: The Office of                         and SEFs to publish and maintain
                                                    comply with the part 9 rules, and                       Information and Regulatory Affairs,                      disciplinary notices on their respective
                                                    therefore, the Commission regulation                    Office of Management and Budget,                         Web sites.
                                                    9.11 reporting requirements. Since the                  Room 10235, New Executive Office
                                                                                                            Building, Washington, DC 20503,                          2. Part 3 and Part 9 Technical
                                                    proposed amendments to Commission
                                                                                                            Attention: Desk Officer of the                           Amendments
                                                    regulation 9.11 are primarily technical,
                                                    the Commission believes that these                      Commodity Futures Trading                                  As explained above, the proposed
                                                    amendments would not impact the                         Commission; (202) 395–6566 (fax); or                     amendments to part 3 and part 9 are
                                                    current burden estimates in the DCM                     OIRAsubmissions@omb.eop.gov (email).                     primarily technical in nature. The
                                                    3038–0052 collection.                                   Please provide the Commission with a                     Commission believes that these
                                                      As noted above, SEFs are also subject                 copy of submitted comments so that all                   technical amendments will not impose
                                                    to the part 9 reporting requirements.55                 comments can be summarized and                           any new costs on DCMs, SEFs, or
                                                    The pertinent reporting burden of                       addressed in the final rulemaking, and                   market participants. For example,
                                                    Commission regulation 9.11 for SEFs is                  please refer to the ADDRESSES section of                 among the proposed changes, the
                                                    contained in Commission regulation                      this rulemaking for instructions on                      Commission is clarifying the definition
                                                    37.2, which was adopted on June 4,                      submitting comments to the                               of ‘‘exchange’’ to include SEFs and
                                                    2013.56 Among the applicable                            Commission. OMB is required to make                      updating the references to part 8, which
                                                    provisions with which SEFs must                         a decision concerning the proposed                       was removed by the Commission in
                                                    comply, Commission regulation 37.2                      information collection requirements                      2012, to instead cite to parallel
                                                    explicitly lists part 9.57 Because the                  between thirty (30) and sixty (60) days                  provisions now contained in parts 37
                                                    proposed amendments to Commission                       after publication of the Proposal in the                 and 38.60 Furthermore, the proposed
                                                    regulation 9.11 are primarily technical,                Federal Register. Therefore, a comment                   revisions to Commission regulations
                                                    the Commission believes these                           to OMB is best assured of receiving full                 3.31 and 9.11 codify existing reporting
                                                    amendments would not impact the                         consideration if OMB (as well as the                     procedures which were already
                                                    current burden estimates in the SEF                     Commission) receives it within thirty                    authorized by the Commission in the
                                                    3038–0074 collection.58                                 (30) days of publication of the Proposal.                Part 3 Advisory and Part 9 Advisory.61
                                                    4. Information Collection Comments                      C. Cost-Benefit Considerations                           These proposed amendments do not
                                                                                                                                                                     substantively change the requirements
                                                       The Commission invites comment on                    1. Introduction                                          that the Commission currently imposes
                                                    any aspect of the proposed information                                                                           on DCMs and SEFs.62 Rather, instead of
                                                                                                               Section 15(a) of the CEA requires the
                                                    collection requirements discussed                                                                                providing the 9.11 notices to the
                                                                                                            Commission to consider the costs and
                                                    above. Pursuant to 44 U.S.C.                                                                                     Commission, as required under the
                                                                                                            benefits of its actions before
                                                    3506(c)(2)(B), the Commission will                                                                               current part 9 rules, proposed regulation
                                                                                                            promulgating a regulation under the
                                                    consider public comments on such                                                                                 9.11 will instead instruct exchanges to
                                                                                                            CEA or issuing certain orders.59 Section
                                                    proposed requirements in: (1)                                                                                    provide the notices to the NFA, as is
                                                    Evaluating whether the proposed                         15(a) further specifies that the costs and
                                                                                                            benefits shall be evaluated in light of                  permitted as an alternative method of
                                                    collection of information is necessary                                                                           compliance under the Part 9 Advisory.63
                                                    for the proper performance of the                       five broad areas of market and public
                                                    functions of the Commission, including                  concern: (1) Protection of market                          There is also the ministerial benefit to
                                                    whether the information will have a                     participants and the public; (2)                         codifying the Part 3 and Part 9
                                                    practical use; (2) evaluating the                       efficiency, competitiveness, and                         Advisories. Advisories are staff action
                                                    accuracy of the Commission’s estimate                   financial integrity of the markets; (3)                  and are not rules that have been
                                                    of the burden of the proposed collection                price discovery; (4) sound risk                          promulgated by the Commission subject
                                                    of information, including the validity of               management practices; and (5) other                      to public notice and comment. Thus,
                                                    the methodology and assumptions used;                   public interest considerations. The                      this rulemaking will achieve the benefit
                                                    (3) enhancing the quality, utility, and                 Commission considers the costs and
                                                    clarity of the information proposed to be               benefits resulting from its discretionary                   60 Removal of part 8 at 77 FR 66288 (Nov. 2,


                                                    collected; and (4) minimizing the                       determinations with respect to the                       2012); and 17 CFR parts 37 and 38. See, e.g., 17 CFR
                                                                                                            section 15(a) factors.                                   part 37 appendix B, Core Principle 2, paragraph
                                                    burden of collection of information on                                                                           (a)(13) and part 38, appendix B, Core Principle 13,
                                                                                                               The Commission considers the costs
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                                                    those who are to respond, including                                                                              paragraph (a)(6).
                                                                                                            and benefits associated with the                            61 Part 9 Advisory: 64 FR 39915 (July 23, 1999);
                                                    through the use of appropriate
                                                                                                            proposed amendments, including                           Part 3 Advisory: 64 FR 39912 (July 23, 1999).
                                                      53 Id.at 42268.
                                                                                                            updating the pre-existing regulatory                        62 Supra note 46. As noted above in the PRA, the

                                                      54 77                                                 framework to incorporate SEFs,                           Commission believes the proposed substantive
                                                            FR 36697 (June 19, 2012); 17 CFR 38.2.                                                                   amendment to add an additional element required
                                                      55 17 CFR 37.2.                                       removing references to part 8 of the                     to be included in the contents of a 9.11 notice will
                                                      56 78 FR 33476 (June 4, 2013).                        Commission’s regulations, and revising                   not materially impact the costs imposed by this
                                                      57 17 CFR 37.2.                                                                                                NPRM.
                                                      58 Supra note 46.                                       59 7   U.S.C. 19(a).                                      63 17 CFR 9.11.




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                                                                            Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules                                                     7747

                                                    of codifying the Part 3 Advisory and                    reported the highest number of                         $46.01. Because DCMs and SEFs can be
                                                    Part 9 Advisory into rules.                             disciplinary and access denial actions.67              large, specialized entities that may
                                                                                                            Therefore, the Commission preliminary                  engage employees with wages above the
                                                    3. Summary of Proposed Amendments
                                                                                                            believes that the average number of                    mean, the Commission has
                                                    to Commission Regulation 9.13—
                                                                                                            disciplinary and access denial actions                 conservatively chosen to use a mean
                                                    Publication of Notice
                                                                                                            reported by the 11 other DCMs in 2015                  hourly wage of $50 per hour.68
                                                       As discussed above, proposed                         provide a more appropriate comparison                  Accordingly, the burden associated with
                                                    Commission regulation 9.13 would                        with respect to estimating the number of               posting the disciplinary notices on
                                                    require all DCMs and SEFs to maintain                   disciplinary and access denial actions                 exchange Web sites will total
                                                    and make readily accessible final                       for SEFs annually. As the SEFs mature,                 approximately $7,950 per year for all of
                                                    notices of exchange disciplinary and                    in terms of the number of participants                 the 38 DCMs and SEFs, ($50 multiplied
                                                    access denial actions on their Web                      and volume, the Commission                             by the anticipated 159 burden hours
                                                    sites.64 This new requirement would                     anticipates that the number of                         equals $7,950 per year).69
                                                    replace the existing requirement in                     disciplinary and access denial actions
                                                    Commission regulation 9.13 that                                                                                b. Benefits
                                                                                                            may increase accordingly.
                                                    exchanges publish the notice in a                          Total number of reported disciplinary                  The Commission preliminarily
                                                    conspicuous place on the exchange’s                     and access denial actions in BASIC by                  believes that greater access to
                                                    premises.                                               DCMs in 2015, excluding the 4 DCMs                     information regarding exchange
                                                                                                            with the largest number of reported                    disciplinary and access denial actions
                                                    a. Costs
                                                                                                            actions: 88.                                           provides valuable guidance and
                                                       The Commission believes that posting                    Average number of reported                          information to exchange members,
                                                    final disciplinary and access denial                    disciplinary and access denial actions                 market participants, and the public.
                                                    notices to exchange Web sites will                      in BASIC per DCM in 2015, excluding                    Releasing disciplinary information to
                                                    slightly increase the costs for DCMs and                the 4 DCMs with the largest number of                  the public can serve to deter and
                                                    SEFs. The Commission notes that the                     reported actions: 8.                                   prevent future misconduct and to
                                                    additional costs incurred by DCMs and                      Currently, there are a total of 23                  improve overall compliance standards
                                                    SEFs would be offset in part due to the                 registered SEFs with the Commission.                   in the futures and swaps industry. It
                                                    proposed amendment in Commission                        The Commission estimates that each                     also allows customers to consider
                                                    regulation 9.13 that would remove the                   SEF would report at least eight                        member firms’ and traders’ disciplinary
                                                    requirement of posting disciplinary and                 disciplinary and access denial actions                 histories when considering whether to
                                                    access denial notices on the premises of                annually in BASIC for an aggregate total               engage in business with them. In
                                                    the respective DCM or SEF. In order to                  of 184 disciplinary and access denial                  addition, firms may use such
                                                    estimate the additional costs, the                      actions for all SEFs per year (eight                   information to educate their traders and
                                                    Commission queried the NFA’s BASIC                      actions multiplied by 23 SEFs equals                   associated persons as to compliance
                                                    to determine the total number of                        184 actions). Thus, the total number of                matters, highlighting potential
                                                    disciplinary and access denial actions                  exchange disciplinary and access denial                violations and related sanctions.
                                                    filed by DCMs in 2015. Because SEFs                     actions per year for all DCMs and SEFs                 Further, any firm or individual facing
                                                    did not post any disciplinary or access                 is estimated to be 636 (184 actions for                allegations of rule violations may access
                                                    denial actions to BASIC in 2015, the                    SEFs plus the 452 actions for DCMs                     existing disciplinary decisions to gain
                                                    numbers below reflect the disciplinary                                                                         greater insight on related facts and
                                                                                                            equals 636 total actions per year). The
                                                    and access denial actions filed by the 15                                                                      sanctions. The Commission believes
                                                                                                            Commission anticipates each DCM and
                                                    DCMs presently registered with the                                                                             that the added deterrence of publishing
                                                                                                            SEF would spend an additional 15
                                                    Commission and provide the basis for                                                                           the disciplinary notices on the exchange
                                                                                                            minutes per disciplinary notice to post
                                                    estimating the number of disciplinary                                                                          Web sites and the enhanced
                                                                                                            on the exchange’s Web site above the
                                                    and access denial actions for SEFs                                                                             investigative and educational benefits of
                                                                                                            current requirement of posting the
                                                    annually.65                                                                                                    making such information public will
                                                       Total number of reported disciplinary                notice on the exchange’s premises.
                                                                                                            Accordingly, the aggregate new burden                  ultimately decrease the incidents of
                                                    and access denial actions in BASIC by
                                                                                                            of Commission regulation 9.13 is                       wrongdoing and market abuses which
                                                    all DCMs in 2015: 452.
                                                       In order to estimate the costs for SEFs,             estimated to be 159 hours per year for                 will benefit both market participants
                                                    the Commission calculated the average                   the 15 DCMs and 23 SEFs (15 minutes                    and the general public.
                                                    number of disciplinary and access                       multiplied by 636 anticipated actions                  c. Section 15(a) Factors
                                                    denial actions filed by DCMs, excluding                 per year equals 159 burden hours).
                                                                                                               The Commission expects that a                          As noted above, section 15(a) of the
                                                    the four DCMs with the largest number                                                                          CEA requires the Commission to
                                                    of reported disciplinary and access                     compliance officer employed by the
                                                                                                            exchange will be posting the                           consider the effects of its actions in light
                                                    denial actions.66 The Commission notes                                                                         of the following five factors:
                                                    that SEFs are relatively new entities                   disciplinary or access denial action
                                                                                                            notices to the exchange Web site.                         (1) Protection of market participants
                                                    with significantly less volume and fewer                                                                       and the public. The Commission
                                                    participants than the four DCMs that                    According to recent Bureau of Labor
                                                                                                            Statistics National Occupational
                                                                                                                                                                     68 Bureau of Labor Statistics, Occupational
                                                      64 17 CFR 9.13.                                       Employment and Wage Estimates, the                     Employment and Wages: 13–1041 Compliance
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                                                      65 As of November 9, 2016, 10 summary fines had       mean hourly wage of an employee                        Officers, (May 2014), available at http://
                                                    been assessed by a total of four SEFs. The notices      under occupation code 13–1041,                         www.bls.gov/oes/current/oes131041.htm.
                                                    for such summary fines have been posted to BASIC.       ‘‘Compliance Officers,’’ that is                         69 The Commission acknowledges that requiring
                                                    Because the Commission did not have a complete                                                                 exchanges to post final notices of disciplinary and
                                                    year of data for 2016, the Commission used the
                                                                                                            employed by the ‘‘Securities and
                                                                                                                                                                   access denial actions on their Web sites may
                                                    2015 numbers of disciplinary and access denial          Commodity Exchanges’’ industry is                      necessitate additional bandwidth. The Commission
                                                    actions to calculate the costs.                                                                                anticipates that any increased costs due to added
                                                      66 The DCMs with largest number of reported             67 78 FR 33476 (June 4, 2013). The SEF Final         bandwidth would be insignificant in its calculation
                                                    disciplinary and access denial actions are: ICE         Rules implemented the SEF framework enacted by         of the total annual burden associated with this
                                                    Futures U.S., CME, NYMEX, and CBOT.                     section 733 of the Dodd-Frank Act; 7 U.S.C. 7b–3.      Proposal.



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                                                    7748                    Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules

                                                    preliminarily believes that market                      impact, positively or negatively, sound                PART 3—REGISTRATION
                                                    participants and the public will benefit                risk management practices?
                                                    from the ministerial and conforming                        (5) Other public interest                           ■ 1. The authority citation for part 3
                                                    amendments proposed herein since they                   considerations. The Commission has not                 continues to read as follows:
                                                    eliminate obsolete, vestigial provisions                identified any other public interest                      Authority: 5 U.S.C. 552, 552b; 7 U.S.C. 1a,
                                                    and references that otherwise could be                  considerations, but welcomes comment                   2, 6a, 6b, 6b–1, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6k,
                                                    construed to give rise to confusing                     on whether this Proposal would                         6m, 6n, 6o, 6p, 6s, 8, 9, 9a, 12, 12a, 13b, 13c,
                                                    inconsistencies between the                             promote public confidence in the                       16a, 18, 19, 21, and 23, as amended by Title
                                                    Commission’s regulations and the                        integrity of derivatives markets by                    VII of Pub. L. 111–203, 124 Stat. 1376.
                                                    provisions of the CEA. Furthermore, the                 making notice of exchange disciplinary                 ■ 2. In § 3.31, revise paragraph (a)(1) to
                                                    Commission preliminarily believes that                  and access denial actions more readily                 read as follows:
                                                    the proposed substantive amendment to                   available to the public. Will this
                                                    regulation 9.13, which would require                    Proposal impact, positively or                         § 3.31 Deficiencies, inaccuracies, and
                                                                                                                                                                   changes, to be reported.
                                                    exchanges to publish notice of final                    negatively, any unidentified matter of
                                                    disciplinary and access denial actions                  interest to the public?                                   (a)(1) Each applicant or registrant as a
                                                    on exchange Web sites, would increase                                                                          futures commission merchant, retail
                                                                                                            d. Request for Comments                                foreign exchange dealer, swap dealer,
                                                    transparency of exchange disciplinary
                                                    actions and serve as a deterrence of                       The Commission seeks additional                     major swap participant, commodity
                                                    future market abuses. These                             information regarding the costs and                    trading advisor, commodity pool
                                                    enhancements allow for operational                      benefits of the Proposal. Beyond the                   operator, introducing broker, floor
                                                    efficiencies in oversight, increased                    specific questions interspersed                        trader that is a non-natural person or
                                                    deterrence from market abuses, and                      throughout its discussion above, the                   leverage transaction merchant shall, in
                                                    greater transparency of the exchange                    Commission requests comment on all                     accordance with the instructions
                                                    disciplinary process. Therefore, the                    aspects of its consideration of costs and              thereto, promptly correct any deficiency
                                                    Commission anticipates that the                         benefits, including: Identification and                or inaccuracy in Form 7–R or Form 8–
                                                    amendment to regulation 9.13 would                      assessment of any costs and benefits not               R that no longer renders accurate and
                                                    result in improved protection of market                 discussed therein; data and any other                  current the information contained
                                                    participants and the public.                            information to assist or otherwise                     therein, with the exception of any
                                                       (2) The efficiency, competitiveness,                 inform the Commission’s ability to                     change that requires withdrawal from
                                                    and financial integrity of the markets.                 quantify or qualitatively describe the                 registration under § 3.33 or any change
                                                    The requirement that exchanges publish                  benefits and costs of the proposed rules;              resulting from an exchange disciplinary
                                                    disciplinary notices and access denial                  and substantiating data, statistics, and               or access denial action. Each such
                                                    actions on their Web site is intended to                any other information to support                       correction shall be prepared and filed in
                                                    improve the operational efficiency,                     positions posited by commenters with                   accordance with the instructions thereto
                                                    competitiveness and financial integrity                 respect to the Commission’s                            to create a Form 3–R record of such
                                                    of the futures and swaps markets by                     consideration of costs and benefits.                   change.
                                                    enabling the public and those who                       Commenters also may suggest other                      *      *     *    *    *
                                                    access the exchange Web site to be made                 alternatives to the proposed approach
                                                    aware of any disciplinary and access                    where the commenters believe that the                  PART 9—RULES RELATING TO
                                                    denial actions imposed by the exchange.                 alternatives would be appropriate under                REVIEW OF EXCHANGE
                                                    As discussed above, the vast majority of                the CEA and provide a superior cost-                   DISCIPLINARY, ACCESS DENIAL OR
                                                    trading no longer occurs in person on                   benefit profile.                                       OTHER ADVERSE ACTIONS
                                                    the exchange’s premises. The                            IV. Request for Comments                               ■ 3. The authority citation for part 9 is
                                                    Commission believes that the current                                                                           revised to read as follows:
                                                    requirement in regulation 9.13 of                         The Commission requests comment
                                                                                                            on all aspects of the Proposal.                           Authority: 7 U.S.C. 1a, 2, 6b–1, 6c, 7, 7a–
                                                    posting disciplinary and access denial                                                                         2, 7b–3, 8, 9, 9a, 12, 12a, 12c, 13b, 16a, 18,
                                                    actions on the exchange’s premises                      Commenters are specifically encouraged
                                                                                                                                                                   19, 21.
                                                    provides little to no public notice of                  to include any considerations related to
                                                                                                            the Commission’s proposed notice and                   ■ 4. In § 9.1, revise paragraphs (b) and
                                                    these actions. By publishing the notice
                                                                                                            order delegating regulation 9.11                       (c) to read as follows:
                                                    on the exchange’s Web site, the
                                                    Commission believes that the efficiency,                authority to the NFA.
                                                                                                                                                                   § 9.1   Scope of rules.
                                                    competitiveness and financial integrity                 List of Subjects                                       *      *    *     *     *
                                                    of the markets would be bolstered by the                                                                          (b) Matters excluded. This part does
                                                    deterrent effect achieved by posting the                17 CFR Part 3
                                                                                                                                                                   not apply to and the Commission will
                                                    notice in a publicly accessible medium.                   Administrative practice and                          not accept notices of appeal, or petitions
                                                       (3) Price discovery. The Commission                  procedure, Brokers, Commodity futures,                 for stay pending review, of:
                                                    has not identified an impact on price                   Major swap participants, Reporting and                    (1) Any arbitration proceeding,
                                                    discovery as a result of the proposed                   recordkeeping requirements, Swap                       regardless of whether the proceeding
                                                    regulations, but seeks comment as to                    dealers.                                               involved a controversy between
                                                    any potential impact. Will the proposed                                                                        members of an exchange;
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                                                                                                            17 CFR Part 9
                                                    regulations impact, positively or                                                                                 (2) Except as provided in §§ 9.11(a),
                                                    negatively, the price discovery process?                  Administrative practice and                          9.11(b)(3)(i) through (v), 9.11(c), 9.12(a)
                                                       (4) Sound risk management practices.                 procedure, Commodity exchanges,                        and 9.13 (concerning the notice,
                                                    The Commission has not identified an                    Commodity futures.                                     effective date and publication of a
                                                    impact on risk management practices as                    For the reasons stated in the                        disciplinary or access denial action),
                                                    a result of the proposed regulations, but               preamble, the Commodity Futures                        any summary action permitted under
                                                    seeks comment as to any potential                       Trading Commission proposes to amend                   the provisions of part 37, appendix B,
                                                    impact. Will the proposed regulations                   17 CFR chapter I as follows:                           Core Principle 2, paragraph (a)(13) of


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                                                                            Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules                                              7749

                                                    this chapter or part 38, appendix B, Core               paragraph (a)(4) (penalty for impeding                 particular document and the name of
                                                    Principle 13, paragraph (a)(6) of this                  progress of hearing); part 37, appendix                the person on whose behalf the
                                                    chapter imposing a minor penalty for                    B, Core Principle 2, paragraph (a)(14) of              document is being filed.
                                                    the violation of exchange rules relating                this chapter or part 38, appendix B, Core                 (3) Paper, spacing, type. All
                                                    to decorum or attire, or relating to the                Principle 13, paragraph (a)(7)                         documents filed with the Proceedings
                                                    timely submission of accurate records                   (emergency disciplinary actions) of this               Clerk must be typewritten, must be on
                                                    required for clearing or verifying each                 chapter; part 37, appendix B, Core                     one grade of good white paper no less
                                                    day’s transactions or other similar                     Principle 2, paragraph (a)(13) (summary                than 8 or more than 81⁄2 inches wide
                                                    activities; and                                         fines for violations of rules regarding                and no less than 101⁄2 or more than 111⁄2
                                                       (3) Any exchange action arising from                 timely submission of records) of this                  inches long, and must be bound on the
                                                    a claim, grievance, or dispute involving                chapter; or part 38, appendix B, Core                  top only. They must be double-spaced,
                                                    cash market transactions which are not                  Principle 13, paragraph (a)(6) (summary                except for long quotations (3 or more
                                                    a part of, or directly connected with,                  fines for violations of rules regarding                lines) and footnotes which should be
                                                    any transaction for the purchase, sale,                 timely submission of records, decorum,                 single-spaced.
                                                    delivery or exercise of a commodity for                 or other similar activities) of this                      (4) Signature. The original copy of all
                                                    future delivery, a commodity option, or                 chapter.                                               papers must be signed in ink by the
                                                    a swap.                                                 ■ 6. Revise § 9.3 to read as follows:                  person filing the same or by his or her
                                                       (4) The Commission will, upon its                                                                           duly authorized agent or attorney.
                                                    own motion or upon motion filed
                                                                                                            § 9.3   Provisions referenced.                            (c) Service—(1) General requirements.
                                                    pursuant to § 9.21(b), promptly notify                    Except as otherwise provided in this                 All documents filed with the
                                                    the appellant and the exchange that it                  part, the following provisions of the                  Proceedings Clerk must, at or before the
                                                    will not accept the notice of appeal or                 Commission’s rules relating to                         time of filing, be served upon all parties.
                                                    petition for stay of matters specified in               reparations contained in part 12 of this               A party must use a means of service
                                                    this paragraph. The determination to                    chapter apply to this part: § 12.3                     which is at least as expeditious as that
                                                    decline to accept a notice of appeal will               (Business address; hours); § 12.5                      used in filing that document with the
                                                    be without prejudice to the appellant’s                 (Computation of time); § 12.6                          Proceedings Clerk. One copy of all
                                                    right to seek alternate forms of relief that            (Extensions of time; adjournments;                     motions, petitions or applications made
                                                    may be available in any other forum.                    postponements); § 12.7 (Ex parte                       in the course of the proceeding, all
                                                       (c) Applicability of these part 9 rules.             communications in reparation                           notices of appeal, all briefs, and letters
                                                    Unless otherwise ordered, these rules                   proceedings); and § 12.12 (Signature).                 to the Commission or an employee
                                                    will apply in their entirety to all                     ■ 7. In § 9.4, revise paragraphs (a), (b),             thereof must be served by a party upon
                                                    appeals, and matters relating thereto.                  and (c) to read as follows:                            all other parties.
                                                                                                                                                                      (2) Manner of service. Service may be
                                                    ■ 5. In § 9.2, revise paragraphs (b), (c),              § 9.4   Filing and service; official docket.           either personal or by mail. Service by
                                                    (f), and (k) to read as follows:                           (a) Filing with the Proceedings Clerk;              mail is complete upon deposit of the
                                                    § 9.2   Definitions.                                    proof of filing; proof of service. Any                 document in the mail. Where service is
                                                                                                            document that is required by this part                 effected by mail, the time within which
                                                    *      *     *     *    *
                                                                                                            to be filed with the Proceedings Clerk                 the person served may respond thereto
                                                      (b) Disciplinary action means any
                                                                                                            must be filed by delivering it in person               will be increased by three days.
                                                    suspension, expulsion or other penalty
                                                                                                            or by mail to: Proceedings Clerk, Office                  (3) Designation of person to receive
                                                    imposed on a person by an exchange for
                                                                                                            of Proceedings, Commodity Futures                      service. The first document filed in a
                                                    violations of rules of the exchange,
                                                                                                            Trading Commission, Three Lafayette                    proceeding by or on behalf of any party
                                                    including summary actions.
                                                                                                            Centre, 1155 21st Street NW.,                          must state on the first page the name
                                                      (c) Exchange means a swap execution
                                                                                                            Washington, DC 20581. To be timely                     and postal address of the person who is
                                                    facility or any board of trade which has
                                                                                                            filed under this part, a document must                 authorized to receive service for the
                                                    been designated as a contract market.
                                                                                                            be delivered or mailed to the                          party of all documents filed in the
                                                    *      *     *     *    *                               Proceedings Clerk within the time                      proceeding. Thereafter, service of
                                                      (f) Member of an exchange means                       prescribed for filing. A party must use                documents must be made upon the
                                                      (1) Any person who is admitted to                     a means of filing which is at least as                 person authorized unless service on a
                                                    membership or has been granted                          expeditious as that used in serving that               different authorized person or on the
                                                    membership privileges on an exchange;                   document upon the other parties. Proof                 party himself or herself is ordered by
                                                    any employee, officer, partner, director                of filing must be made by attaching to                 the Commission, or unless pursuant to
                                                    or affiliate of such member or person                   the document for filing a statement of                 § 9.8 the person authorized is changed
                                                    with membership privileges including                    service as provided in § 10.12(a)(6) of                by the party upon due notice to all other
                                                    any associated person; and any other                    this chapter.                                          parties. Parties must file and serve
                                                    person under the supervision or control                    (b) Formalities of filing—(1) Number                notification of any changes in the
                                                    of such member or person with                           of copies. Unless otherwise specifically               information provided pursuant to this
                                                    membership privileges; or                               provided, an original and one                          subparagraph as soon as practicable
                                                      (2) Any person who has trading                        conformed copy of all documents filed                  after the change occurs.
                                                    privileges on an exchange.                              with the Commission in accordance                      *      *     *     *     *
                                                    *      *     *     *    *                               with the provisions of this part must be
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                                                                                                                                                                   ■ 8. In § 9.8, revise paragraph (a)(1) to
                                                      (k) Summary action means a                            filed with the Proceedings Clerk.                      read as follows:
                                                    disciplinary action resulting in the                       (2) Title page. All documents filed
                                                    imposition of a penalty on a person for                 with the Proceedings Clerk must                        § 9.8   Practice before the Commission.
                                                    violation of rules of the exchange                      include at the head thereof, or on a title               (a) Practice—(1) By non-attorneys. An
                                                    permitted under the provisions of part                  page, the name of the Commission, the                  individual may appear pro se (on his or
                                                    37, appendix B, Core Principle 2,                       title of the proceeding, the docket                    her own behalf); a general partner may
                                                    paragraph (a)(10)(vi) of this chapteror                 number (if one has been assigned by the                represent the partnership; a bona fide
                                                    part 38, appendix B, Core Principle 13,                 Proceedings Clerk), the subject of the                 officer of a corporation, trust or


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                                                    7750                    Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules

                                                    association may represent the                           materials incorporated by reference) or                person at that person’s last known
                                                    corporation, trust or association.                      other written notice which must include                address. Filing of the notice with the
                                                    *     *      *     *     *                              items listed in paragraphs (b)(3)(i)–(vi)              NFA is accomplished when an
                                                    ■ 9. In § 9.9, revise paragraphs (b)(3) and             of this section.                                       authorized exchange employee verifies
                                                    (b)(4) to read as follows:                                 (2) The written notice of a                         the accuracy of the information entered
                                                                                                            disciplinary action or access denial                   into BASIC.
                                                    § 9.9 Waiver of rules; delegation of                    action provided to the person against                    (d) Effect of delivery by mail. Delivery
                                                    authority.                                              whom the action was taken by a swap                    by mail to the person disciplined or
                                                    *      *    *     *     *                               execution facility must be a copy of a                 denied access will be complete upon
                                                       (b) * * *                                            written decision which accords with:                   deposit in the mail of a properly
                                                       (3) The General Counsel, or his or her                  (i) Part 37, appendix B, Core Principle             addressed and postpaid document.
                                                    designee, may submit to the                             2, paragraph (a)(9) of this chapter in the             Where delivery to the person
                                                    Commission for its consideration any                    case of settlement offers;                             disciplined or denied access is effected
                                                    matter which has been delegated                            (ii) Section 37.206(d) of this chapter              by such mail, the time within which a
                                                    pursuant to paragraph (b)(1) of this                    in the case of decisions; or                           notice of appeal or petition for stay may
                                                    section.                                                   (iii) Part 37, appendix B, Core                     be filed will be increased by three days.
                                                       (4) Nothing in this section will be                  Principle 2, paragraph (a)(11)(iv) of this               (e) Certification. Copies of the notice
                                                    deemed to prohibit the Commission, at                   chapter in the case of appeal decisions                and the submission of any additional
                                                    its election, from exercising the                       of this chapter (including copies of any               information provided pursuant to this
                                                    authority delegated to the General                      materials incorporated by reference) or                section must be certified as true and
                                                    Counsel, or his or her designee, under                  other written notice which must include                correct by a duly authorized officer,
                                                    this section.                                           items listed in paragraphs (b)(3)(i)                   agent or employee of the exchange.
                                                    ■ 10. Revise § 9.11 to read as follows:                 through (vi) of this section.                          Notice filed with the NFA is deemed
                                                                                                               (3) The notice of a disciplinary action             certified when an authorized exchange
                                                    § 9.11 Form, contents and delivery of                   or access denial action provided to the
                                                    notice of disciplinary or access denial
                                                                                                                                                                   employee verifies the accuracy of the
                                                                                                            NFA must include only the items listed                 information entered into BASIC.
                                                    action.
                                                                                                            in the following paragraphs (i) through                ■ 11. Revise § 9.12 to read as follows:
                                                       (a) When required. Whenever an                       (v):
                                                    exchange decision pursuant to which a                      (i) The name of the person against                  § 9.12 Effective date of disciplinary or
                                                    disciplinary action or access denial                    whom the disciplinary action or access                 access denial action.
                                                    action is to be imposed has become                      denial action was taken;                                  (a) Effective date. Any disciplinary or
                                                    final, the exchange must, within thirty                    (ii) A statement of the reasons for the             access denial action taken by an
                                                    days thereafter, provide written notice                 disciplinary action or access denial                   exchange will not become effective until
                                                    of such action to the person against                    action, detailing the exchange product                 at least fifteen days after the written
                                                    whom the action was taken and notice                    which was involved, as applicable, and                 notice prescribed by § 9.11 is delivered
                                                    to the National Futures Association                     whether the violation that resulted in                 to the person disciplined or denied
                                                    (‘‘NFA’’) through the NFA’s Background                  the action also resulted in financial                  access; Provided, however, That the
                                                    Affiliation Status Information Center                   harm to any customers together with a                  exchange may cause a disciplinary
                                                    (‘‘BASIC’’) system: Provided, That a                    listing of any rules which the person                  action to become effective prior to that
                                                    designated contract market is not                       who was the subject of the disciplinary                time if:
                                                    required to notify the NFA of any                       action or access denial action was                        (1) As permitted by part 37, appendix
                                                    summary action, as permitted under the                  charged with having violated or which                  B, Core Principle 2, paragraph (a)(14) of
                                                    provisions of part 38, appendix B, Core                 otherwise serve as the basis of the                    this chapter or part 38, appendix B, Core
                                                    Principle 13, paragraph (a)(6) of this                  exchange action;                                       Principle 13, paragraph (a)(7)
                                                    chapter, which results in the imposition                   (iii) A statement of the conclusions                (emergency disciplinary actions) of this
                                                    of minor penalties for the violation of                 and findings made by the exchange with                 chapter, the exchange reasonably
                                                    exchange rules relating to decorum or                   regard to each rule violation charged or,              believes, and so states in its written
                                                    attire. No final disciplinary or access                 in the event of settlement, a statement                decision, that immediate action is
                                                    denial action may be made effective by                  specifying those rule violations which                 necessary to protect the best interests of
                                                    the exchange except as provided in                      the exchange has reason to believe were                the marketplace; or
                                                    § 9.12.                                                 committed;                                                (2) As permitted by part 37, appendix
                                                       (b) Contents of notice. For purposes of                 (iv) The terms of the disciplinary                  B, Core Principle 2, paragraph (a)(10)(vi)
                                                    this part:                                              action or access denial action;                        of the chapter or part 38, appendix B,
                                                       (1) The written notice of a                             (v) The date on which the action was                Core Principle 13, paragraph (a)(4)
                                                    disciplinary action or access denial                    taken and the date the exchange intends                (hearings) of this chapter, the exchange
                                                    action provided to the person against                   to make the disciplinary or access                     determines, and so states in its written
                                                    whom the action was taken by a                          denial action effective; and                           decision, that the actions of a person
                                                    designated contract market must be a                       (vi) Except as otherwise provided in                who is within the exchange’s
                                                    copy of a written decision which                        § 9.1(b), a statement informing the party              jurisdiction has impeded the progress of
                                                    accords with:                                           subject to the disciplinary action or                  a disciplinary hearing; or
                                                       (i) Part 38, appendix B, Core Principle              access denial action of the availability of               (3) As permitted by part 37, appendix
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                                                    13, paragraph (a)(3) of this chapter in                 Commission review of the exchange                      B, Core Principle 2, paragraph (a)(13)
                                                    the case of settlement offers;                          action pursuant to section 8c of the Act               (summary fines for violations of rules
                                                       (ii) Section 38.708 of this chapter in               and this part.                                         regarding timely submission of records)
                                                    the case of decisions; or                                  (c) Delivery and filing of the notice.              of this chapter or part 38, appendix B,
                                                       (iii) Part 38, appendix B, Core                      Delivery of the notice must be made                    Core Principle 13, paragraph (a)(6)
                                                    Principle 13, paragraph (a)(5)(iv) of this              either personally to the person who was                (summary fines for violations of rules
                                                    chapter in the case of appeal decisions                 the subject of the disciplinary action or              regarding timely submission of records,
                                                    of this chapter (including copies of any                access denial action or by mail to such                decorum, or other similar activities) of


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                                                                            Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Proposed Rules                                   7751

                                                    this chapter, the exchange determines                   § 9.31 Commission review of disciplinary    Appendix to Amendments to Parts 3
                                                    that a person has violated exchange                     or access denial action on its own motion.  and 9 of the Commodity Futures
                                                    rules relating to decorum or attire, or                    (a) Request for additional information. Trading Commission’s Rules—
                                                    timely submission of accurate records                   Where a person disciplined or denied        Commission Voting Summary
                                                    required for clearing or verifying each                 access has not appealed the exchange           On this matter, Chairman Massad and
                                                    day’s transactions or other similar                                                                 Commissioners Bowen and Giancarlo
                                                                                                            decision to the Commission, upon
                                                    activities; or                                                                                      voted in the affirmative. No
                                                                                                            review of the notice specified in § 9.11,
                                                       (4) The person against whom the                                                                  Commissioner voted in the negative.
                                                                                                            the Division of Market Oversight or the
                                                    action is taken has consented to the
                                                                                                            Division of Swap Dealer and                 [FR Doc. 2017–01232 Filed 1–19–17; 8:45 am]
                                                    penalty to be imposed and to the timing
                                                    of its effectiveness.                                   Intermediary Oversight may request that BILLING CODE 6351–01–P
                                                       (b) Notice of early effective date. If the           the exchange file with the Division the
                                                    exchange determines in accordance                       record of the exchange proceeding, or
                                                    with paragraph (a)(1) of this section that              designated portions of the record, a brief DEPARTMENT OF HEALTH AND
                                                    a disciplinary action will become                       statement of the evidence and testimony HUMAN SERVICES
                                                    effective prior to the expiration of                    adduced to support the exchange’s
                                                                                                            findings that a rule or rules of the        Food and Drug Administration
                                                    fifteen days after written notice thereof,
                                                    it must notify the person disciplined in                exchange were violated and such
                                                                                                            recordings, transcripts and other           21 CFR Parts 11, 16, and 112
                                                    writing, either personally or by email to
                                                    the person’s last known email address,                  documents applicable to the particular      [Docket No. FDA–2017–D–0175]
                                                    stating the reasons for the                             exchange proceeding as the Division
                                                    determination. The exchange must also                   may specify. The exchange must              Compliance With and
                                                    immediately notify the Commission by                    promptly advise the person who is the       Recommendations for Implementation
                                                    email to secretary@cftc.gov. Where                      subject of the disciplinary or access       of the Standards for the Growing,
                                                    notice is delivered by email, the time                  denial action of the Division’s request.    Harvesting, Packing, and Holding of
                                                    within which the person so notified                                                                 Produce for Human Consumption for
                                                                                                            Within thirty days after service of the
                                                    may file a petition for stay pursuant to                                                            Sprout Operations; Draft Guidance for
                                                                                                            Division’s request, the exchange must
                                                    § 9.24(a)(2) will be increased by one                                                               Industry; Availability
                                                                                                            file the information requested with the
                                                    day.                                                    Division in the manner requested by the AGENCY: Food and Drug Administration,
                                                    ■ 12. Revise § 9.13 to read as follows:                 Division and, upon request, deliver that HHS.
                                                    § 9.13   Publication of notice.                         information to the person who is the        ACTION: Notification of availability.
                                                                                                            subject of the disciplinary or access
                                                       Whenever an exchange suspends,                                                                   SUMMARY: The Food and Drug
                                                                                                            denial action. Delivery to the person
                                                    expels or otherwise disciplines, or                                                                 Administration (FDA or we) is
                                                                                                            who is the subject of the disciplinary or
                                                    denies any person access to the                                                                     announcing the availability of a draft
                                                    exchange, it must make public its                       access denial action must be in the
                                                                                                                                                        guidance for industry entitled
                                                    findings by disclosing at least the                     manner prescribed by § 9.11(c). A           ‘‘Compliance with and
                                                    information contained in the notice                     person subject to the disciplinary action Recommendations for Implementation
                                                    required by § 9.11(b). An exchange must                 or access denial action requesting a        of the Standards for the Growing,
                                                    make such findings public as soon as                    copy of the information furnished to the Harvesting, Packing, and Holding of
                                                    the disciplinary action or access denial                Division must, if the exchange rules so     Produce for Human Consumption for
                                                    action becomes effective in accordance                  provide, agree to pay the exchange          Sprout Operations.’’ The draft guidance,
                                                    with the provisions of § 9.12 by posting                reasonable fees for printing the copy.      when finalized, will help sprout
                                                    a notice on its Web site to which its                      (b) Review on motion of the              operations subject to FDA’s final rule
                                                    members and the public regularly have                   Commission. The Commission may              entitled ‘‘Standards for the Growing,
                                                    access. Such notice must be maintained                  institute review of an exchange             Harvesting, Packing, and Holding of
                                                    and readily available on the exchange’s                 disciplinary or access denial action on     Produce for Human Consumption’’ (the
                                                    Web site.                                               its own motion. Other than in               Produce Safety Rule), and primarily
                                                    ■ 13. In § 9.24, revise paragraph (a)(2) to             extraordinary circumstances, such           focuses on assisting such operations in
                                                    read as follows:                                        review will be initiated within 180 days complying with the sprout-specific
                                                    § 9.24   Petition for stay pending review.              after the NFA has received the notice of requirements in Subpart M (Sprouts) of
                                                                                                            exchange action provided for in § 9.11.     the Produce Safety Rule. The draft
                                                       (a) * * *                                                                                        guidance also includes limited
                                                       (2) Within ten days after a notice of                If the Commission should institute
                                                                                                                                                        discussion on certain other applicable
                                                    summary action has been delivered in                    review on its own motion, it will issue
                                                                                                                                                        requirements of the Produce Safety
                                                    accordance with § 9.12(b) to a person                   an order permitting the person who is       Rule. This draft guidance may also be
                                                    who is the subject of a summary action                  the subject of the disciplinary or access   useful to sprout operations that are not
                                                    permitted by part 37, appendix B, Core                  denial action an opportunity to file an     subject to the Produce Safety Rule that
                                                    Principle 2, paragraph (a)(14) or part 38,              appropriate submission, and the             voluntarily choose to follow the
                                                    appendix B, Core Principle 13,                          exchange an opportunity to file a reply     standards established by the rule.
mstockstill on DSK3G9T082PROD with PROPOSALS




                                                    paragraph (a)(7) (emergency disciplinary                thereto.                                    DATES: Although you can comment on
                                                    actions) of this chapter, that person may                  Issued in Washington, DC, on January 13, any guidance at any time (see 21 CFR
                                                    petition the Commission to stay the                     2017, by the Commission.                    10.115(g)(5)), to ensure that the Agency
                                                    effectiveness of the summary action                     Christopher J. Kirkpatrick,                 considers your comment on this draft
                                                    pending completion of the exchange                                                                  guidance before it begins work on the
                                                    proceeding.                                             Secretary of the Commission.
                                                                                                                                                        final version of the guidance, submit
                                                    *      *    *     *     *                                  Note: The following appendix will not    either electronic or written comments
                                                    ■ 14. Revise § 9.31 to read as follows:                 appear in the Code of Federal Regulations.  on the draft guidance by July 24, 2017.


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Document Created: 2017-01-20 01:29:50
Document Modified: 2017-01-20 01:29:50
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionNotice of proposed rulemaking.
DatesComments must be received on or before March 24, 2017.
ContactRachel Berdansky, Deputy Director, Division of Market Oversight, at 202-418-5429 or [email protected]; or David Steinberg, Associate Director, Division of Market Oversight, at 202-418-5102 or [email protected], in each case, at the Commodity Futures Trading Commission, Three Lafayette Centre, 1151 21st Street NW., Washington, DC 20581.
FR Citation82 FR 7738 
RIN Number3038-AE15
CFR Citation17 CFR 3
17 CFR 9
CFR AssociatedAdministrative Practice and Procedure; Brokers; Commodity Futures; Major Swap Participants; Reporting and Recordkeeping Requirements; Swap Dealers and Commodity Exchanges

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