Confidential Information and Commission Records and Information, 39764-39768 [E7-14103]

Download as PDF 39764 Federal Register / Vol. 72, No. 139 / Friday, July 20, 2007 / Proposed Rules standardization of secondary or rapid methods? Should we limit our participation to validating the performance of test kits? Are there rapid tests in existence other than test kits of which you are aware? 6. Should we work on developing reference methods for tests of specific traits in grains, such as fermentable starch content? Should GIPSA pursue standardized, secondary tests for the presence of specific traits in grains, such as fermentable starch content? 7. Are co-products of ethanol production considered cereal products, according to the European Union regulations (COMMISSION REGULATION (EC) No 856/2005) for mycotoxin limits in cereals and cereal products? Should GIPSA validate the performance of test kits for the detection of mycotoxins in distillers grains? If so, what are the limits of detection which should be considered? We welcome your comments on these issues as well as any comments or suggestions related to distillers grains. Authority: 7 U.S.C. 71–87. David R. Shipman, Acting Administrator, Grain Inspection, Packers and Stockyards Administration. [FR Doc. E7–14018 Filed 7–19–07; 8:45 am] BILLING CODE 3410–KD–P 7 CFR Part 810 RIN 0580–AA96 17 CFR Parts 40 and 41 GIPSA published an advance notice of proposed rulemaking in the Federal Register on May 1, 2007, (72 FR 23775) with the intent to obtain public comment on the United States Standards for Soybeans (7 CFR Part 810). Our intent is, through the comments, to determine their effectiveness and responsiveness to current grain industry needs. The comment period of 60 days from the date of publication closed on July 2, 2007. GIPSA received a request from the soybean industry to provide interested parties additional time to comment. As a result, the comment period is reopened for a 30 day period. SUPPLEMENTARY INFORMATION: Request for Public Comment on the United States Standards for Soybeans Grain Inspection, Packers and Stockyards Administration, USDA. ACTION: Advance notice of proposed rulemaking; extension of comment period. AGENCY: We published an advance notice of proposed rulemaking in the Federal Register on May 1, 2007, (72 FR 23775), initiating a review of the United States Standards for Soybeans to determine their effectiveness and responsiveness to current grain industry needs. The notice provided an opportunity for interested parties to forward written comments to GIPSA until July 2, 2007. As a result of a request from the soybean industry, we are reopening the comment period to provide interested parties with additional time in which to comment. SUMMARY: rwilkins on PROD1PC63 with PROPOSALS We invite you to submit comments on this advance notice of proposed rulemaking. You may submit comments by any of the following methods: • E-Mail: Send comments via electronic mail to comments.gipsa@usda.gov • Mail: Send hardcopy written comments to Tess Butler, GIPSA, USDA, 1400 Independence Avenue, SW., Room 1647–S, Washington, DC 20250–3604 • Fax: Send comments by facsimile transmission to: (202) 690–2755 • Hand Delivery or Courier: Deliver comments to: Tess Butler, GIPSA, USDA, 1400 Independence Avenue, SW., Room 1647–S, Washington, DC 20250–3604. • Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting comments. • Instructions: All comments should make reference to the date and page number of this issue of the Federal Register. • Read Comments: All comments will be available for public inspection in the above office during regular business hours (7 CFR 1.27(b)). ADDRESSES: Marianne Plaus at GIPSA, USDA, 1400 Independence Avenue, SW., Washington, DC 20250–3630; Telephone (202) 720–0228; Fax Number (202) 720–1015; e-mail Marianne.Plaus@usda.gov. Grain Inspection, Packers and Stockyards Administration 16:06 Jul 19, 2007 COMMODITY FUTURES TRADING COMMISSION FOR FURTHER INFORMATION CONTACT: DEPARTMENT OF AGRICULTURE VerDate Aug<31>2005 We will consider comments that we receive by August 20, 2007. DATES: Jkt 211001 Authority: 7 U.S.C. 71–87. Alan Christian, Acting Administrator, Grain Inspection, Packers and Stockyards Administration. [FR Doc. E7–14017 Filed 7–19–07; 8:45 am] BILLING CODE 3410–KD–P PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 RIN 3038–AC44 Confidential Information and Commission Records and Information Commodity Futures Trading Commission. ACTION: Notice of proposed rulemaking. AGENCY: SUMMARY: The Commodity Futures Trading Commission is proposing to amend the procedures for confidential treatment requests by derivatives transaction execution facilities (DTEF), derivatives clearing organizations (DCO), or designated contract markets (DCM) for products and rules submitted via certification procedures or for Commission review and approval. The proposed rules will provide the exclusive means of requesting confidential treatment for product and rule submissions filed under Parts 40 and 41 of the Commission’s regulations. Specifically, DCMs, DTEFs, and DCOs will be required to follow the customary procedures of requesting confidential treatment of information submitted to the Commission except: The submitter also will be required to file a detailed written justification simultaneously with the request for confidential treatment; and the submitter will be required to segregate the material deemed confidential in an appendix to the submission. Additionally, Commission staff may make an initial determination to grant or deny confidential treatment to such material before receiving a request under the Freedom of Information Act (FOIA). The Commission is proposing these amendments to expedite the confidential treatment review process and consequently allow the Commission to provide the public with more immediate access to non-confidential information. Submit comments on or before August 20, 2007. ADDRESSES: You may submit comments by any of the following methods: • Federal eRulemaking Portal: http:// www.regulations.gov. • Mail/Hand Deliver: Eileen A. Donovan, Acting Secretary of the Commission, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. • E-mail: secretary@cftc.gov. FOR FURTHER INFORMATION CONTACT: Riva Adriance, Deputy Director for Market Review, (202) 418–5494; or David DATES: E:\FR\FM\20JYP1.SGM 20JYP1 Federal Register / Vol. 72, No. 139 / Friday, July 20, 2007 / Proposed Rules Steinberg, Attorney Advisor, (202) 418– 5102, Division of Market Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. Electronic mail: radriance@cftc.gov or dsteinberg@cftc.gov. This document is also available at http:// www.regulations.gov. SUPPLEMENTARY INFORMATION: I. Background rwilkins on PROD1PC63 with PROPOSALS A. Overview During the past two years, the Commission has observed an increase in the number of registered entity filings submitted under Parts 40 and 41 of the Commission’s regulations that are accompanied by a request for confidential treatment.1 Most of these requests for confidential treatment have been submitted to the Commission in connection with market maker incentive plans.2 Under current regulation 145.9(d)(10), when the Commission receives a request for confidential treatment for material submitted to the Commission, no determination with respect to any request for confidential treatment will be made until the Commission receives a FOIA request for the subject material. After receipt of the FOIA request, Commission Regulation 145.9(e)(1) generally requires the Assistant Secretary of the Commission to notify the submitter that the Commission received a FOIA request for material subject to the request for confidential treatment.3 In most cases, 1 A registered entity is defined under Section 1a(29) of the Commodity Exchange Act (Act) as a DCM under Section 5 of the Act (including Section 5f), a DTEF registered under Section 5a of the Act, and a DCO registered under Section 5b of the Act. (Section 5f of the Act, along with Part 41 of the Commission’s regulations, establishes requirements for national securities exchanges, national securities associations and alternative trading systems registered with the Securities and Exchange Commission to notice register with the Commission in order to list security futures products (i.e., futures on a single equity security and futures on narrow-based security indexes)). 2 Market maker incentive plans are created by a registered entity to increase volume of trading and liquidity, typically for new product launches or in markets that for other reasons have low trading volume. In general, registered entities have requested confidential treatment for the name of the market maker(s), the compensation provided by the registered entity to the market maker(s), trade priorities (i.e., percentage of the order flow), and the bid/ask spread level. 3 Commission Regulation 145.9(e)(1) provides that if the Assistant Secretary or his or her designee determines that a FOIA request seeks material for which confidential treatment has been requested pursuant to regulation 145.9, the Assistant Secretary or his or her designee shall require the submitter to file a detailed written justification of the confidential treatment request within ten business days (unless under regulation 145.9(d)(7) VerDate Aug<31>2005 16:06 Jul 19, 2007 Jkt 211001 the Assistant Secretary also requests that the submitter file a detailed written justification of the confidential treatment request within ten business days.4 As a result, both the requirement that a FOIA request must be received to trigger the confidentiality review and the need for submission of a detailed written justification delays the Commission’s ability to make a timely confidentiality determination as to whether any information should be made public. Furthermore, in some cases, the Commission never receives a FOIA request for the subject material, which prevents the Commission from moving forward with the confidential treatment review process. While the Commission recognizes limited circumstances where a registered entity filing a submission under Parts 40 and 41 may be entitled to confidential treatment, the Commission has a history of generally making certified rules and products and other rule submissions public and, furthermore, for DCMs, Designation Criterion 7 and Core Principle 7 often require such publication.5 B. Freedom of Information Act The Freedom of Information Act, 5 U.S.C. 552, provides generally that the public has a right of access to federal agency records except to the extent such records, or portions of them, are protected from disclosure by one (or more) of nine exemptions. A submitter requesting confidential treatment must request in writing that the Commission afford confidential treatment under an extension of time has been granted) of that determination unless, pursuant to an earlier FOIA request, a prior determination to release or withhold the material has been made, the submitter has already provided sufficient information to grant the request for confidential treatment, or the material is otherwise in the public domain. 4 Commission Regulation 145.9(d)(7). 5 The Commission has been publishing rule submissions on the Commission’s website since August of 2003. Prior to this date, Commission staff had consistently determined that submissions filed pursuant to Section 5a(a)(12) of the Act were public, and, pursuant to Appendix A(b)(3) or Part 145, rule filings submitted under Section 5a(a)(12) were made available in the Commission’s reading room. Section 5a(a)(12) was removed from the Act with the passage of the Commodity Futures Modernization Act of 2000 (CFMA). As a result, the Commission amended Appendix A (b)(3) to Part 145. Current Appendix A (b)(3) to Part 145 requires the Office of the Secretariat to make registered entity filings relating to rules as defined in Commission Regulation 40.1 available to the public unless the filing is covered by a request for confidential treatment. See 69 FR 67503–67508 (November 18, 2004). The Commission believes the submissions now filed under Sections 5c(c)(1) and 5c(c)(2) of the Act should, except in limited circumstances, continue to be made publicly available as they generally do not cause any competitive harm to the registered entity. PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 39765 FOIA for any information submitted to the Commission while specifying the grounds on which confidential treatment is being requested.6 A registered entity typically asserts that the information submitted to the Commission should be exempt from disclosure pursuant to FOIA exemption (b)(4), 5 U.S.C. 552 (b)(4), because the release of such information will cause competitive harm to the submitter.7 Commission Regulation 145.9 sets forth the procedures that a submitter of information to the Commission must follow in order to obtain confidential treatment for such information. That same provision, however, also permits the Commission to specify ‘‘alternative procedures’’ for ‘‘a particular study, report, investigation, or other matter.’’ 8 Consistent with that authority, the Commission is proposing to specify alternative procedures for processing requests for confidential treatment of registered entity filings submitted under Parts 40 and 41 of the Commission’s regulations. II. Proposed Amendments A. Procedures for Requesting Confidential Treatment Under Parts 40 and 41 The Commission is proposing to add paragraph (c) to Commission Regulation 40.8 to list the procedures that a registered entity must follow when filing a request for confidential treatment. Section 40.8(c) would provide the exclusive method of requesting confidential treatment for information required to be filed under Parts 40 and 41. In addition, the proposal would add new regulations 40.2(a)(3)(iv), 40.6(a)(3)(vi), 41.23(a)(7), and 41.24(a)(6) and amend regulations 40.3(a)(7) and 40.5(a)(8) to direct the 6 Commission Regulation 145.9(d)(1). (b)(4) of FOIA protects trade secrets and commercial or financial information obtained from a person that is privileged or confidential. See also Commission Regulation 145.9(d)(ii). Commission Regulation 145.9(d) provides other grounds for non-disclosure of information, including information that: (1) Is specifically exempted by a statute that either requires that the matters be withheld from the public so as to leave no discretion on the issue or establishes particular criteria for withholding or refers to particular types of matters to be withheld; (2) would constitute a clearly unwarranted invasion of the submitter’s personal privacy; (3) would reveal investigatory records compiled for law enforcement purposes whose disclosure would constitute an unwarranted invasion of the personal privacy of the submitter; and (4) would reveal investigatory records for law enforcement purposes when disclosure would interfere with enforcement proceedings or disclose investigative techniques and procedures, provided that the claim may be made only by a designated contract market or registered futures association with regard to its own investigatory records. 8 Commission Regulation 145.9(b). 7 Exemption E:\FR\FM\20JYP1.SGM 20JYP1 39766 Federal Register / Vol. 72, No. 139 / Friday, July 20, 2007 / Proposed Rules rwilkins on PROD1PC63 with PROPOSALS registered entity requesting confidential treatment to follow the new procedures specified in Commission Regulation 40.8(c). Proposed regulation 40.8(c) would further require the registered entity to follow the procedures in Commission Regulation 145.9 except that: (1) A detailed written justification of the confidential treatment request must be filed simultaneously with the submission; and (2) the material deemed confidential must be filed in an appendix to the request. Finally, the proposed rules would allow Commission staff to make an initial determination to grant or deny confidential treatment before receiving a FOIA request for the subject material. The requirement that a registered entity follow the procedures in proposed new regulation 40.8(c) would address the absence of guidance in the Commission’s regulations for a registered entity when filing a ‘‘reasonable justification’’ along with the request for confidential treatment for submissions filed under Parts 40 and 41. The proposed rules would remove the reasonable justification requirement from Commission Regulations 40.3(a)(7) and 40.5(a)(8) and direct the submitter to follow the procedures of regulation 40.8(c) with the filing of the detailed written justification.9 Additionally, the requirement that the registered entity simultaneously file the detailed written justification with the request for confidential treatment would eliminate the ten-business-day period permitted under regulation 145.9(e)(1) for the submitter to file the detailed written justification after receiving notice that a FOIA request has been received by the Commission. With these changes, the Commission would be able to conduct a thorough analysis of the detailed written justification without delay and weigh, in a more deliberate manner, the potential harm in releasing any portion of the submission against allowing the 9 67 FR 62873–62880 (October 9, 2002). Amendments to rules 40.3 and 40.5 (which require the registered entity to identify with particularity information in the submission that will be subject to a request for confidential treatment and support the request for confidential treatment with reasonable justification) were made to conform with language in Commission Regulations 37.5(b)(5) and 38.3(a)(5) (which pertain to applicants for DTEF registration and contract market designation, respectively) that required the submitter to include a reasonable justification in support of the request for confidential treatment. However, Commission Regulations 37.5(b)(5) and 38.3(a)(5) were amended by eliminating the reasonable justification requirement. Instead, these regulations now require the applicant to follow the procedures in Commission Regulation 145.9 when requesting confidential treatment. See 69 FR 67811–67817 (November 22, 2004). VerDate Aug<31>2005 16:06 Jul 19, 2007 Jkt 211001 public to have more timely access to the non-confidential information. The proposed rules would not affect the ability of the submitter to object to the denial of a confidential treatment request. Thus, the submitter would still be able to file an appeal of any adverse determination with the Commission’s Office of the General Counsel.10 The Commission also notes that a determination that any part of the request for confidential treatment should be granted may be reconsidered if a FOIA request is received by the Commission for the subject material. The proposed rule requiring material deemed confidential to be placed in an appendix to the submission would enable the Commission to make the non-confidential information available to the public as soon as it receives the submission. The Commission has observed that registered entities requesting confidential treatment sometimes ask for confidentiality for the entire submission. When this happens, the Commission is unable to make any part of the submission immediately available to the public, even when it is clear that information contained in the filing is not confidential and, furthermore, for DCMs, such publication may be required under Designation Criterion 7 and Core Principle 7.11 For example, during the past year, Commission staff has contacted certain registered entities that requested confidential treatment for submissions containing market maker incentive plans and requested that they amend their original submissions by placing the confidential information in an appendix. This has enabled the Commission to make the underlying submissions containing the nonconfidential information available to the public. The registered entities have been receptive to these requests. Based upon this experience, the Commission does not believe its proposed amendments would place an undue burden on registered entities requesting confidential treatment. Registered entities are consequently on notice that requests for confidential treatment may only cover the appendix to the submission while the underlying submission would be made immediately available to the public. Regulation 145.9(g). Commission notes that provisions under these Parts may not apply to all registered entities. For example, Section 40.2 applies to all registered entities while 40.3 applies only to DCMs and DTEFs and not DCOs. PO 00000 10 Commission 11 The Frm 00005 Fmt 4702 Sfmt 4702 B. Public Availability of Terms and Conditions of Products and Mechanisms for Executing Transactions on or Through the Facilities of the Contract Market The terms and conditions of contracts must be made available to market authorities, market participants, and the public by the DCM under Section 5(d)(7) of the Act.12 Regulations 40.3(a)(7) and 40.5(a)(8) currently provide that a product’s terms and conditions, as contained in contents of a filing of a submission to the Commission, are publicly available at the time of their submission. The Commission believes the requirement that a product’s terms and conditions be publicly available at the time of submission also applies to submissions containing terms and conditions that are filed under regulations 40.2, 40.6, 41.23, and 41.24. In an effort to create a more logical placement in the Commission’s regulations for the public availability of a product’s terms and conditions, the Commission proposes to relocate this provision to new paragraph 40.8(d) under the Availability of Public Information section of Part 40. This would ensure that registered entities are fully aware, and the public would be on notice that this information is available. The mechanisms for executing transactions on or through the facilities of the contract market must also be made available to market authorities, market participants, and the public by the DCM under Section 5(d)(7) of the Act. The Commission proposes adding language to new paragraph 40.8(d) to make clear to registered entities that this information is public and to inform the 12 67 FR 62874–75 (Oct. 9, 2002). Product terms and conditions that are made publicly available at the time of their submission to the Commission enable the Commission to obtain the views of market participants and others to ascertain whether the proposed product would be readily susceptible to manipulation, or otherwise violate the Act. Commission staff routinely conduct trade interviews when reviewing novel instruments to ascertain the relative susceptibility of a product to being manipulated. To be meaningful, these interviews require the release of the proposed instrument’s terms and conditions. Generally, the Commission intends to continue its long-standing practice of requesting public comment on the terms and conditions of new products under review for Commission approval by publication of notices in the Federal Register. In instances where notice in the Federal Register is impracticable or otherwise unnecessary, notice of a submission for voluntary approval and of the public availability of the proposed product’s terms and conditions will be through the Commission’s internet Web site (http://www.cftc.gov). The terms and conditions of products eligible for trading by self-certification will be available from the Commission, at the time that the exchange legally could commence trading—the beginning of the business day following certification to the Commission. E:\FR\FM\20JYP1.SGM 20JYP1 Federal Register / Vol. 72, No. 139 / Friday, July 20, 2007 / Proposed Rules rwilkins on PROD1PC63 with PROPOSALS public that this information is also available. The Commission notes that mechanisms for executing transactions on or through the facilities of the contract market generally include such information as trading algorithms and information from an exchange’s rulebook that pertain to trading. Moreover, the Commission notes that requests for confidential treatment covering the mechanisms for executing transactions on or through the facilities of the contract market and a product’s terms and conditions will not be processed. III. Cost-Benefit Analysis Section 15(a) of the Act, as amended by section 119 of the CFMA, requires the Commission to consider the costs and benefits of its action before issuing a new regulation under the Act. By its terms, section 15(a) as amended does not require the Commission to quantify the costs and benefits of a new regulation or to determine whether the benefits of the regulation outweigh its costs. Rather, section 15(a) simply requires the Commission to ‘‘consider the costs and benefits’’ of its action. Section 15(a) of the Act further specifies that costs and benefits shall be evaluated in light of five broad areas of market and public concern: Protection of market participants and the public; efficiency, competitiveness, and financial integrity of futures markets; price discovery; sound risk management practices; and other public interest considerations. Accordingly, the Commission could, in its discretion, give greater weight to any one of the five enumerated areas and could, in its discretion, determine that, notwithstanding its costs, a particular regulation was necessary or appropriate to protect the public interest or to effectuate any of the provisions or to accomplish any of the purposes of the Act. The Commission is considering the costs and benefits of these proposed regulations in light of the specified provisions of section 15(a) of the Act: 1. Protection of market participants and the public. The proposed amendments should have no effect on the Commission’s ability to protect market participants and the public. 2. Efficiency and competition. The proposed amendments are expected to benefit efficiency by making the nonconfidential information from registered entity submissions available to the public in a more timely manner. The Commission anticipates that the costs of compliance with the confidential treatment procedures will be minimal. The proposed amendments should have VerDate Aug<31>2005 16:06 Jul 19, 2007 Jkt 211001 no effect, from the standpoint of imposing costs or creating benefits, on competition in the futures and options markets. 3. Financial integrity of futures markets and price discovery. The amendments should have no effect, from the standpoint of imposing costs or creating benefits, on the financial integrity or price discovery function of the futures and options markets. 4. Sound risk management practices. The amendments being proposed herein should have no effect on the risk management practices of the futures and options industry. 5. Other public considerations. No additional public considerations could be determined. After considering these factors, the Commission has determined to propose the rules and rule amendments set forth below. The Commission invites public comment on its application of the costbenefit provision. Commenters also are invited to submit any data that they may have quantifying the costs and benefits of the proposal with their comment letters. IV. Related Matters A. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq. (2000), requires federal agencies, in proposing regulations, to consider the impact of those regulations on small entities. The regulations proposed herein would affect derivatives transaction execution facilities, designated contract markets, and derivatives clearing organizations. The Commission has previously determined that the foregoing entities are not small entities for purposes of the RFA.13 Accordingly, the Acting Chairman, on behalf of the Commission, hereby certifies pursuant to 5 U.S.C. 605(b) that the proposed regulations will not have a significant economic impact on a substantial number of small entities. B. Paperwork Reduction Act of 1995 This proposed rulemaking contains information collection requirements. As required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3504(h)), the Commission has submitted a copy of this section to the Office of Management and Budget (OMB) for its review. Collection of Information: Rules Relating to Part 40, Provisions Common 13 47 FR 18618, 18619 (April 30, 1982) discussing contract markets; 66 FR 42256, 42268 (August 10, 2001) discussing exempt boards of trade, exempt commercial markets and derivatives transaction execution facilities; 66FR 45605, 45609 (August 29, 2001) discussing derivatives clearing organizations. PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 39767 to DCMs, DTEFs, and DCOs, OMB Control Number 3038–0022. The expected effect of the proposed amended regulations will be to increase the burden previously approved by OMB for this collection of information by 16 hours as it will result in the filing of approximately five additional pages when a registered entity files a detailed written justification and confidential appendix under Commission Regulations 40.2, 40.3, 40.4, 40.5, and 40.6. The estimated burden was calculated as follows: Estimated number of respondents: 12. Annual responses by each respondent: .30. Total annual responses: 4. Estimated average hours per response: 4. Annual reporting burden: 16. Collection of Information: Rules Relating to Part 41, Security Futures Products, OMB Control Number 3038– 0059. The expected effect of the proposed amended regulations will be to increase the burden previously approved by OMB for this collection of information by 3.6 hours as it will result in the filing of approximately five additional pages when a registered entity files a detailed written justification and confidential appendix under Commission Regulations 41.23 and 41.24. Estimated number of respondents: 3. Annual responses by each respondent: .30. Total annual responses: .90. Estimated average hours per response: 4. Annual reporting burden: 3.6. Organizations and individuals desiring to submit comments on the information collection requirements should direct them to the Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10202, New Executive Office Building, 725 17th Street, NW., Washington, DC 20503; Attention: Desk Officer for the Commodity Futures Trading Commission. In compliance with the PRA, the Commission, through these proposed regulations, solicits comments to: (1) Evaluate 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) evaluate 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) enhance the quality, usefulness, and clarity of the information to be E:\FR\FM\20JYP1.SGM 20JYP1 39768 Federal Register / Vol. 72, No. 139 / Friday, July 20, 2007 / Proposed Rules collected; and (4) minimize the burden of collecting information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission responses. OMB is required to make a decision concerning the collection of information contained in these proposed regulations between 30 and 60 days after publication of this document in the Federal Register. Therefore, a comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication. This does not affect the deadline for the public to comment to the Commission on the proposed regulations. Copies of the information collection submission to OMB are available from the CFTC Clearance Officer, 1155 21st Street, NW., Washington DC 20581, (202) 418–5160. List of Subjects 17 CFR Part 40 Commodity futures, Contract markets, Designation application, Reporting and recordkeeping requirements. 17 CFR Part 41 PART 40—PROVISIONS COMMON TO CONTRACT MARKETS, DERIVATIVES TRANSACTION EXECUTION FACILITIES AND DERIVATIVES CLEARING ORGANIZATIONS 1. The authority for part 40 continues to read as follows: Authority: 7 U.S.C. 1a, 2, 5, 6, 6c, 7, 7a, 8 and 12a, as amended by appendix E of Pub. L. 106–554, 114 Stat. 2763A–365. 2. Section 40.2 is amended by adding paragraph (a)(3)(v) to read as follows: rwilkins on PROD1PC63 with PROPOSALS § 40.2 Listing products for trading by certification. (a) * * * (3) * * * (v) A request for confidential treatment as permitted under the procedures of § 40.8. * * * * * 3. Section 40.3 is amended by revising paragraph (a)(7) to read as follows: § 40.3 Voluntary submission of new products for Commission review and approval. (a) * * * 17:11 Jul 19, 2007 § 40.5 Voluntary submission of rules for Commission review and approval. (a) * * * (8) Include a request for confidential treatment as permitted under the procedures of § 40.8. * * * * * 5. Section 40.6 is amended by adding new paragraph (a)(3)(vi) to read as follows: § 40.6 Self-certification of rules by designated contract markets and registered derivatives clearing organizations. (a) * * * (3) * * * (vi) A request for confidential treatment as permitted under the procedures of § 40.8. * * * * * 6. Section 40.8 is amended by adding new paragraphs (c) and (d) to read as follows: § 40.8 Availability of public information. * Security futures. For the reasons stated in the preamble, the Commission proposes to amend 17 CFR parts 40 and 41 as follows: VerDate Aug<31>2005 (7) Include a request for confidential treatment as permitted under the procedures of § 40.8. * * * * * 4. Section 40.5 is amended by revising paragraph (a)(8) to read as follows: Jkt 211001 * * * * (c) A registered entity’s filing of new products under the self-certification procedures, new products for Commission review and approval, new rules and rule amendments for Commission review and approval, and new rules and rule amendments submitted under the self-certification procedures will be treated as public information unless covered by a request for confidential treatment. If a registered entity files a request for confidential treatment, the procedures in § 145.9 of this chapter shall apply with the following exceptions: (1) A detailed written justification of the confidential treatment request must be filed simultaneously with the request for confidential treatment; (2) The material deemed confidential must be segregated in an appendix to the submission; and (3) Commission staff may make an initial determination with respect to the request for confidential treatment before receiving a request under the Freedom of Information Act for the material for which confidential treatment is being sought. (d) A registered entity’s filing regarding a product’s terms and conditions and the mechanisms for executing transactions on or through the facilities of the contract market will be made publicly available at the time of submission and requests for confidential PO 00000 Frm 00007 Fmt 4702 Sfmt 4702 treatment covering this information will be denied. PART 41—SECURITY FUTURES PRODUCTS 7. The authority citation for part 41 continues to read as follows: Authority: Sections 206, 251 and 252, Pub. L. 106–554, 114 Stat. 2763, 7 U.S.C. 1a, 2, 6f, 6j, 7a–2, 12a; 15 U.S.C. 78g(c)(2). 8. Section 41.23 is amended by adding new paragraph (a)(7) to read as follows: § 41.23 Listing of security futures products for trading. (a) * * * (7) Includes a request for confidential treatment as permitted under the procedures of § 40.8. * * * * * 9. Section 41.24 is amended by adding new paragraph (a)(6) to read as follows: § 41.24 Rule amendments to security futures products. (a) * * * (6) Includes a request for confidential treatment as permitted under the procedures of § 40.8. * * * * * Issued in Washington, DC, on July 17, 2007 by the Commission. Eileen A. Donovan, Acting Secretary of the Commission. [FR Doc. E7–14103 Filed 7–19–07; 8:45 am] BILLING CODE 6351–01–P AGENCY FOR INTERNATIONAL DEVELOPMENT 22 CFR Part 215 RIN 0412–AA61 Privacy Act of 1974, Implementation of Exemptions United States Agency for International Development. ACTION: Proposed rule. AGENCY: SUMMARY: The United States Agency for International Development (USAID) is concurrently establishing a new system of records pursuant to the provisions of the Privacy Act of 1974 (5 U.S.C. 552a), entitled the ‘‘Partner Vetting System’’ (PVS). In this proposed rulemaking, USAID proposes to exempt portions of this system of records from one or more provisions of the Privacy Act because of criminal, civil, and administrative enforcement requirements. DATES: Submit comments on or before September 18, 2007. E:\FR\FM\20JYP1.SGM 20JYP1

Agencies

[Federal Register Volume 72, Number 139 (Friday, July 20, 2007)]
[Proposed Rules]
[Pages 39764-39768]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14103]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Parts 40 and 41

RIN 3038-AC44


Confidential Information and Commission Records and Information

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commodity Futures Trading Commission is proposing to amend 
the procedures for confidential treatment requests by derivatives 
transaction execution facilities (DTEF), derivatives clearing 
organizations (DCO), or designated contract markets (DCM) for products 
and rules submitted via certification procedures or for Commission 
review and approval. The proposed rules will provide the exclusive 
means of requesting confidential treatment for product and rule 
submissions filed under Parts 40 and 41 of the Commission's 
regulations. Specifically, DCMs, DTEFs, and DCOs will be required to 
follow the customary procedures of requesting confidential treatment of 
information submitted to the Commission except: The submitter also will 
be required to file a detailed written justification simultaneously 
with the request for confidential treatment; and the submitter will be 
required to segregate the material deemed confidential in an appendix 
to the submission. Additionally, Commission staff may make an initial 
determination to grant or deny confidential treatment to such material 
before receiving a request under the Freedom of Information Act (FOIA). 
The Commission is proposing these amendments to expedite the 
confidential treatment review process and consequently allow the 
Commission to provide the public with more immediate access to non-
confidential information.

DATES: Submit comments on or before August 20, 2007.

ADDRESSES: You may submit comments by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
     Mail/Hand Deliver: Eileen A. Donovan, Acting Secretary of 
the Commission, Commodity Futures Trading Commission, Three Lafayette 
Centre, 1155 21st Street, NW., Washington, DC 20581.
     E-mail: secretary@cftc.gov.

FOR FURTHER INFORMATION CONTACT: Riva Adriance, Deputy Director for 
Market Review, (202) 418-5494; or David

[[Page 39765]]

Steinberg, Attorney Advisor, (202) 418-5102, Division of Market 
Oversight, Commodity Futures Trading Commission, Three Lafayette 
Centre, 1155 21st Street, NW., Washington, DC 20581. Electronic mail: 
radriance@cftc.gov or dsteinberg@cftc.gov. This document is also 
available at http://www.regulations.gov.

SUPPLEMENTARY INFORMATION:

I. Background

A. Overview

    During the past two years, the Commission has observed an increase 
in the number of registered entity filings submitted under Parts 40 and 
41 of the Commission's regulations that are accompanied by a request 
for confidential treatment.\1\ Most of these requests for confidential 
treatment have been submitted to the Commission in connection with 
market maker incentive plans.\2\ Under current regulation 145.9(d)(10), 
when the Commission receives a request for confidential treatment for 
material submitted to the Commission, no determination with respect to 
any request for confidential treatment will be made until the 
Commission receives a FOIA request for the subject material. After 
receipt of the FOIA request, Commission Regulation 145.9(e)(1) 
generally requires the Assistant Secretary of the Commission to notify 
the submitter that the Commission received a FOIA request for material 
subject to the request for confidential treatment.\3\ In most cases, 
the Assistant Secretary also requests that the submitter file a 
detailed written justification of the confidential treatment request 
within ten business days.\4\
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    \1\ A registered entity is defined under Section 1a(29) of the 
Commodity Exchange Act (Act) as a DCM under Section 5 of the Act 
(including Section 5f), a DTEF registered under Section 5a of the 
Act, and a DCO registered under Section 5b of the Act. (Section 5f 
of the Act, along with Part 41 of the Commission's regulations, 
establishes requirements for national securities exchanges, national 
securities associations and alternative trading systems registered 
with the Securities and Exchange Commission to notice register with 
the Commission in order to list security futures products (i.e., 
futures on a single equity security and futures on narrow-based 
security indexes)).
    \2\ Market maker incentive plans are created by a registered 
entity to increase volume of trading and liquidity, typically for 
new product launches or in markets that for other reasons have low 
trading volume. In general, registered entities have requested 
confidential treatment for the name of the market maker(s), the 
compensation provided by the registered entity to the market 
maker(s), trade priorities (i.e., percentage of the order flow), and 
the bid/ask spread level.
    \3\ Commission Regulation 145.9(e)(1) provides that if the 
Assistant Secretary or his or her designee determines that a FOIA 
request seeks material for which confidential treatment has been 
requested pursuant to regulation 145.9, the Assistant Secretary or 
his or her designee shall require the submitter to file a detailed 
written justification of the confidential treatment request within 
ten business days (unless under regulation 145.9(d)(7) an extension 
of time has been granted) of that determination unless, pursuant to 
an earlier FOIA request, a prior determination to release or 
withhold the material has been made, the submitter has already 
provided sufficient information to grant the request for 
confidential treatment, or the material is otherwise in the public 
domain.
    \4\ Commission Regulation 145.9(d)(7).
---------------------------------------------------------------------------

    As a result, both the requirement that a FOIA request must be 
received to trigger the confidentiality review and the need for 
submission of a detailed written justification delays the Commission's 
ability to make a timely confidentiality determination as to whether 
any information should be made public. Furthermore, in some cases, the 
Commission never receives a FOIA request for the subject material, 
which prevents the Commission from moving forward with the confidential 
treatment review process. While the Commission recognizes limited 
circumstances where a registered entity filing a submission under Parts 
40 and 41 may be entitled to confidential treatment, the Commission has 
a history of generally making certified rules and products and other 
rule submissions public and, furthermore, for DCMs, Designation 
Criterion 7 and Core Principle 7 often require such publication.\5\
---------------------------------------------------------------------------

    \5\ The Commission has been publishing rule submissions on the 
Commission's website since August of 2003. Prior to this date, 
Commission staff had consistently determined that submissions filed 
pursuant to Section 5a(a)(12) of the Act were public, and, pursuant 
to Appendix A(b)(3) or Part 145, rule filings submitted under 
Section 5a(a)(12) were made available in the Commission's reading 
room. Section 5a(a)(12) was removed from the Act with the passage of 
the Commodity Futures Modernization Act of 2000 (CFMA). As a result, 
the Commission amended Appendix A (b)(3) to Part 145. Current 
Appendix A (b)(3) to Part 145 requires the Office of the Secretariat 
to make registered entity filings relating to rules as defined in 
Commission Regulation 40.1 available to the public unless the filing 
is covered by a request for confidential treatment. See 69 FR 67503-
67508 (November 18, 2004). The Commission believes the submissions 
now filed under Sections 5c(c)(1) and 5c(c)(2) of the Act should, 
except in limited circumstances, continue to be made publicly 
available as they generally do not cause any competitive harm to the 
registered entity.
---------------------------------------------------------------------------

B. Freedom of Information Act

    The Freedom of Information Act, 5 U.S.C. 552, provides generally 
that the public has a right of access to federal agency records except 
to the extent such records, or portions of them, are protected from 
disclosure by one (or more) of nine exemptions. A submitter requesting 
confidential treatment must request in writing that the Commission 
afford confidential treatment under FOIA for any information submitted 
to the Commission while specifying the grounds on which confidential 
treatment is being requested.\6\ A registered entity typically asserts 
that the information submitted to the Commission should be exempt from 
disclosure pursuant to FOIA exemption (b)(4), 5 U.S.C. 552 (b)(4), 
because the release of such information will cause competitive harm to 
the submitter.\7\ Commission Regulation 145.9 sets forth the procedures 
that a submitter of information to the Commission must follow in order 
to obtain confidential treatment for such information. That same 
provision, however, also permits the Commission to specify 
``alternative procedures'' for ``a particular study, report, 
investigation, or other matter.'' \8\ Consistent with that authority, 
the Commission is proposing to specify alternative procedures for 
processing requests for confidential treatment of registered entity 
filings submitted under Parts 40 and 41 of the Commission's 
regulations.
---------------------------------------------------------------------------

    \6\ Commission Regulation 145.9(d)(1).
    \7\ Exemption (b)(4) of FOIA protects trade secrets and 
commercial or financial information obtained from a person that is 
privileged or confidential. See also Commission Regulation 
145.9(d)(ii). Commission Regulation 145.9(d) provides other grounds 
for non-disclosure of information, including information that: (1) 
Is specifically exempted by a statute that either requires that the 
matters be withheld from the public so as to leave no discretion on 
the issue or establishes particular criteria for withholding or 
refers to particular types of matters to be withheld; (2) would 
constitute a clearly unwarranted invasion of the submitter's 
personal privacy; (3) would reveal investigatory records compiled 
for law enforcement purposes whose disclosure would constitute an 
unwarranted invasion of the personal privacy of the submitter; and 
(4) would reveal investigatory records for law enforcement purposes 
when disclosure would interfere with enforcement proceedings or 
disclose investigative techniques and procedures, provided that the 
claim may be made only by a designated contract market or registered 
futures association with regard to its own investigatory records.
    \8\ Commission Regulation 145.9(b).
---------------------------------------------------------------------------

II. Proposed Amendments

A. Procedures for Requesting Confidential Treatment Under Parts 40 and 
41

    The Commission is proposing to add paragraph (c) to Commission 
Regulation 40.8 to list the procedures that a registered entity must 
follow when filing a request for confidential treatment. Section 
40.8(c) would provide the exclusive method of requesting confidential 
treatment for information required to be filed under Parts 40 and 41. 
In addition, the proposal would add new regulations 40.2(a)(3)(iv), 
40.6(a)(3)(vi), 41.23(a)(7), and 41.24(a)(6) and amend regulations 
40.3(a)(7) and 40.5(a)(8) to direct the

[[Page 39766]]

registered entity requesting confidential treatment to follow the new 
procedures specified in Commission Regulation 40.8(c). Proposed 
regulation 40.8(c) would further require the registered entity to 
follow the procedures in Commission Regulation 145.9 except that: (1) A 
detailed written justification of the confidential treatment request 
must be filed simultaneously with the submission; and (2) the material 
deemed confidential must be filed in an appendix to the request. 
Finally, the proposed rules would allow Commission staff to make an 
initial determination to grant or deny confidential treatment before 
receiving a FOIA request for the subject material.
    The requirement that a registered entity follow the procedures in 
proposed new regulation 40.8(c) would address the absence of guidance 
in the Commission's regulations for a registered entity when filing a 
``reasonable justification'' along with the request for confidential 
treatment for submissions filed under Parts 40 and 41. The proposed 
rules would remove the reasonable justification requirement from 
Commission Regulations 40.3(a)(7) and 40.5(a)(8) and direct the 
submitter to follow the procedures of regulation 40.8(c) with the 
filing of the detailed written justification.\9\ Additionally, the 
requirement that the registered entity simultaneously file the detailed 
written justification with the request for confidential treatment would 
eliminate the ten-business-day period permitted under regulation 
145.9(e)(1) for the submitter to file the detailed written 
justification after receiving notice that a FOIA request has been 
received by the Commission. With these changes, the Commission would be 
able to conduct a thorough analysis of the detailed written 
justification without delay and weigh, in a more deliberate manner, the 
potential harm in releasing any portion of the submission against 
allowing the public to have more timely access to the non-confidential 
information.
---------------------------------------------------------------------------

    \9\ 67 FR 62873-62880 (October 9, 2002). Amendments to rules 
40.3 and 40.5 (which require the registered entity to identify with 
particularity information in the submission that will be subject to 
a request for confidential treatment and support the request for 
confidential treatment with reasonable justification) were made to 
conform with language in Commission Regulations 37.5(b)(5) and 
38.3(a)(5) (which pertain to applicants for DTEF registration and 
contract market designation, respectively) that required the 
submitter to include a reasonable justification in support of the 
request for confidential treatment. However, Commission Regulations 
37.5(b)(5) and 38.3(a)(5) were amended by eliminating the reasonable 
justification requirement. Instead, these regulations now require 
the applicant to follow the procedures in Commission Regulation 
145.9 when requesting confidential treatment. See 69 FR 67811-67817 
(November 22, 2004).
---------------------------------------------------------------------------

    The proposed rules would not affect the ability of the submitter to 
object to the denial of a confidential treatment request. Thus, the 
submitter would still be able to file an appeal of any adverse 
determination with the Commission's Office of the General Counsel.\10\ 
The Commission also notes that a determination that any part of the 
request for confidential treatment should be granted may be 
reconsidered if a FOIA request is received by the Commission for the 
subject material.
---------------------------------------------------------------------------

    \10\ Commission Regulation 145.9(g).
---------------------------------------------------------------------------

    The proposed rule requiring material deemed confidential to be 
placed in an appendix to the submission would enable the Commission to 
make the non-confidential information available to the public as soon 
as it receives the submission. The Commission has observed that 
registered entities requesting confidential treatment sometimes ask for 
confidentiality for the entire submission. When this happens, the 
Commission is unable to make any part of the submission immediately 
available to the public, even when it is clear that information 
contained in the filing is not confidential and, furthermore, for DCMs, 
such publication may be required under Designation Criterion 7 and Core 
Principle 7.\11\
---------------------------------------------------------------------------

    \11\ The Commission notes that provisions under these Parts may 
not apply to all registered entities. For example, Section 40.2 
applies to all registered entities while 40.3 applies only to DCMs 
and DTEFs and not DCOs.
---------------------------------------------------------------------------

    For example, during the past year, Commission staff has contacted 
certain registered entities that requested confidential treatment for 
submissions containing market maker incentive plans and requested that 
they amend their original submissions by placing the confidential 
information in an appendix. This has enabled the Commission to make the 
underlying submissions containing the non-confidential information 
available to the public. The registered entities have been receptive to 
these requests. Based upon this experience, the Commission does not 
believe its proposed amendments would place an undue burden on 
registered entities requesting confidential treatment. Registered 
entities are consequently on notice that requests for confidential 
treatment may only cover the appendix to the submission while the 
underlying submission would be made immediately available to the 
public.

B. Public Availability of Terms and Conditions of Products and 
Mechanisms for Executing Transactions on or Through the Facilities of 
the Contract Market

    The terms and conditions of contracts must be made available to 
market authorities, market participants, and the public by the DCM 
under Section 5(d)(7) of the Act.\12\ Regulations 40.3(a)(7) and 
40.5(a)(8) currently provide that a product's terms and conditions, as 
contained in contents of a filing of a submission to the Commission, 
are publicly available at the time of their submission. The Commission 
believes the requirement that a product's terms and conditions be 
publicly available at the time of submission also applies to 
submissions containing terms and conditions that are filed under 
regulations 40.2, 40.6, 41.23, and 41.24. In an effort to create a more 
logical placement in the Commission's regulations for the public 
availability of a product's terms and conditions, the Commission 
proposes to relocate this provision to new paragraph 40.8(d) under the 
Availability of Public Information section of Part 40. This would 
ensure that registered entities are fully aware, and the public would 
be on notice that this information is available.
---------------------------------------------------------------------------

    \12\ 67 FR 62874-75 (Oct. 9, 2002). Product terms and conditions 
that are made publicly available at the time of their submission to 
the Commission enable the Commission to obtain the views of market 
participants and others to ascertain whether the proposed product 
would be readily susceptible to manipulation, or otherwise violate 
the Act. Commission staff routinely conduct trade interviews when 
reviewing novel instruments to ascertain the relative susceptibility 
of a product to being manipulated. To be meaningful, these 
interviews require the release of the proposed instrument's terms 
and conditions. Generally, the Commission intends to continue its 
long-standing practice of requesting public comment on the terms and 
conditions of new products under review for Commission approval by 
publication of notices in the Federal Register. In instances where 
notice in the Federal Register is impracticable or otherwise 
unnecessary, notice of a submission for voluntary approval and of 
the public availability of the proposed product's terms and 
conditions will be through the Commission's internet Web site 
(http://www.cftc.gov).
    The terms and conditions of products eligible for trading by 
self-certification will be available from the Commission, at the 
time that the exchange legally could commence trading--the beginning 
of the business day following certification to the Commission.
---------------------------------------------------------------------------

    The mechanisms for executing transactions on or through the 
facilities of the contract market must also be made available to market 
authorities, market participants, and the public by the DCM under 
Section 5(d)(7) of the Act. The Commission proposes adding language to 
new paragraph 40.8(d) to make clear to registered entities that this 
information is public and to inform the

[[Page 39767]]

public that this information is also available. The Commission notes 
that mechanisms for executing transactions on or through the facilities 
of the contract market generally include such information as trading 
algorithms and information from an exchange's rulebook that pertain to 
trading. Moreover, the Commission notes that requests for confidential 
treatment covering the mechanisms for executing transactions on or 
through the facilities of the contract market and a product's terms and 
conditions will not be processed.

III. Cost-Benefit Analysis

    Section 15(a) of the Act, as amended by section 119 of the CFMA, 
requires the Commission to consider the costs and benefits of its 
action before issuing a new regulation under the Act. By its terms, 
section 15(a) as amended does not require the Commission to quantify 
the costs and benefits of a new regulation or to determine whether the 
benefits of the regulation outweigh its costs. Rather, section 15(a) 
simply requires the Commission to ``consider the costs and benefits'' 
of its action.
    Section 15(a) of the Act further specifies that costs and benefits 
shall be evaluated in light of five broad areas of market and public 
concern: Protection of market participants and the public; efficiency, 
competitiveness, and financial integrity of futures markets; price 
discovery; sound risk management practices; and other public interest 
considerations. Accordingly, the Commission could, in its discretion, 
give greater weight to any one of the five enumerated areas and could, 
in its discretion, determine that, notwithstanding its costs, a 
particular regulation was necessary or appropriate to protect the 
public interest or to effectuate any of the provisions or to accomplish 
any of the purposes of the Act.
    The Commission is considering the costs and benefits of these 
proposed regulations in light of the specified provisions of section 
15(a) of the Act:
    1. Protection of market participants and the public. The proposed 
amendments should have no effect on the Commission's ability to protect 
market participants and the public.
    2. Efficiency and competition. The proposed amendments are expected 
to benefit efficiency by making the non-confidential information from 
registered entity submissions available to the public in a more timely 
manner. The Commission anticipates that the costs of compliance with 
the confidential treatment procedures will be minimal. The proposed 
amendments should have no effect, from the standpoint of imposing costs 
or creating benefits, on competition in the futures and options 
markets.
    3. Financial integrity of futures markets and price discovery. The 
amendments should have no effect, from the standpoint of imposing costs 
or creating benefits, on the financial integrity or price discovery 
function of the futures and options markets.
    4. Sound risk management practices. The amendments being proposed 
herein should have no effect on the risk management practices of the 
futures and options industry.
    5. Other public considerations. No additional public considerations 
could be determined.
    After considering these factors, the Commission has determined to 
propose the rules and rule amendments set forth below. The Commission 
invites public comment on its application of the cost-benefit 
provision. Commenters also are invited to submit any data that they may 
have quantifying the costs and benefits of the proposal with their 
comment letters.

IV. Related Matters

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq. (2000), 
requires federal agencies, in proposing regulations, to consider the 
impact of those regulations on small entities. The regulations proposed 
herein would affect derivatives transaction execution facilities, 
designated contract markets, and derivatives clearing organizations. 
The Commission has previously determined that the foregoing entities 
are not small entities for purposes of the RFA.\13\ Accordingly, the 
Acting Chairman, on behalf of the Commission, hereby certifies pursuant 
to 5 U.S.C. 605(b) that the proposed regulations will not have a 
significant economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \13\ 47 FR 18618, 18619 (April 30, 1982) discussing contract 
markets; 66 FR 42256, 42268 (August 10, 2001) discussing exempt 
boards of trade, exempt commercial markets and derivatives 
transaction execution facilities; 66FR 45605, 45609 (August 29, 
2001) discussing derivatives clearing organizations.
---------------------------------------------------------------------------

B. Paperwork Reduction Act of 1995

    This proposed rulemaking contains information collection 
requirements. As required by the Paperwork Reduction Act (PRA) of 1995 
(44 U.S.C. 3504(h)), the Commission has submitted a copy of this 
section to the Office of Management and Budget (OMB) for its review.
    Collection of Information: Rules Relating to Part 40, Provisions 
Common to DCMs, DTEFs, and DCOs, OMB Control Number 3038-0022.
    The expected effect of the proposed amended regulations will be to 
increase the burden previously approved by OMB for this collection of 
information by 16 hours as it will result in the filing of 
approximately five additional pages when a registered entity files a 
detailed written justification and confidential appendix under 
Commission Regulations 40.2, 40.3, 40.4, 40.5, and 40.6.
    The estimated burden was calculated as follows:
    Estimated number of respondents: 12.
    Annual responses by each respondent: .30.
    Total annual responses: 4.
    Estimated average hours per response: 4.
    Annual reporting burden: 16.
    Collection of Information: Rules Relating to Part 41, Security 
Futures Products, OMB Control Number 3038-0059.
    The expected effect of the proposed amended regulations will be to 
increase the burden previously approved by OMB for this collection of 
information by 3.6 hours as it will result in the filing of 
approximately five additional pages when a registered entity files a 
detailed written justification and confidential appendix under 
Commission Regulations 41.23 and 41.24.
    Estimated number of respondents: 3.
    Annual responses by each respondent: .30.
    Total annual responses: .90.
    Estimated average hours per response: 4.
    Annual reporting burden: 3.6.
    Organizations and individuals desiring to submit comments on the 
information collection requirements should direct them to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Room 10202, New Executive Office Building, 725 17th Street, NW., 
Washington, DC 20503; Attention: Desk Officer for the Commodity Futures 
Trading Commission.
    In compliance with the PRA, the Commission, through these proposed 
regulations, solicits comments to: (1) Evaluate 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) evaluate 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) 
enhance the quality, usefulness, and clarity of the information to be

[[Page 39768]]

collected; and (4) minimize the burden of collecting information on 
those who are to respond, including through the use of appropriate 
automated electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission responses.
    OMB is required to make a decision concerning the collection of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. This does not affect 
the deadline for the public to comment to the Commission on the 
proposed regulations. Copies of the information collection submission 
to OMB are available from the CFTC Clearance Officer, 1155 21st Street, 
NW., Washington DC 20581, (202) 418-5160.

List of Subjects

17 CFR Part 40

    Commodity futures, Contract markets, Designation application, 
Reporting and recordkeeping requirements.

17 CFR Part 41

    Security futures.

    For the reasons stated in the preamble, the Commission proposes to 
amend 17 CFR parts 40 and 41 as follows:

PART 40--PROVISIONS COMMON TO CONTRACT MARKETS, DERIVATIVES 
TRANSACTION EXECUTION FACILITIES AND DERIVATIVES CLEARING 
ORGANIZATIONS

    1. The authority for part 40 continues to read as follows:

    Authority: 7 U.S.C. 1a, 2, 5, 6, 6c, 7, 7a, 8 and 12a, as 
amended by appendix E of Pub. L. 106-554, 114 Stat. 2763A-365.

    2. Section 40.2 is amended by adding paragraph (a)(3)(v) to read as 
follows:


Sec.  40.2  Listing products for trading by certification.

    (a) * * *
    (3) * * *
    (v) A request for confidential treatment as permitted under the 
procedures of Sec.  40.8.
* * * * *
    3. Section 40.3 is amended by revising paragraph (a)(7) to read as 
follows:


Sec.  40.3  Voluntary submission of new products for Commission review 
and approval.

    (a) * * *
    (7) Include a request for confidential treatment as permitted under 
the procedures of Sec.  40.8.
* * * * *
    4. Section 40.5 is amended by revising paragraph (a)(8) to read as 
follows:


Sec.  40.5  Voluntary submission of rules for Commission review and 
approval.

    (a) * * *
    (8) Include a request for confidential treatment as permitted under 
the procedures of Sec.  40.8.
* * * * *
    5. Section 40.6 is amended by adding new paragraph (a)(3)(vi) to 
read as follows:


Sec.  40.6  Self-certification of rules by designated contract markets 
and registered derivatives clearing organizations.

    (a) * * *
    (3) * * *
    (vi) A request for confidential treatment as permitted under the 
procedures of Sec.  40.8.
* * * * *
    6. Section 40.8 is amended by adding new paragraphs (c) and (d) to 
read as follows:


Sec.  40.8  Availability of public information.

* * * * *
    (c) A registered entity's filing of new products under the self-
certification procedures, new products for Commission review and 
approval, new rules and rule amendments for Commission review and 
approval, and new rules and rule amendments submitted under the self-
certification procedures will be treated as public information unless 
covered by a request for confidential treatment. If a registered entity 
files a request for confidential treatment, the procedures in Sec.  
145.9 of this chapter shall apply with the following exceptions:
    (1) A detailed written justification of the confidential treatment 
request must be filed simultaneously with the request for confidential 
treatment;
    (2) The material deemed confidential must be segregated in an 
appendix to the submission; and
    (3) Commission staff may make an initial determination with respect 
to the request for confidential treatment before receiving a request 
under the Freedom of Information Act for the material for which 
confidential treatment is being sought.
    (d) A registered entity's filing regarding a product's terms and 
conditions and the mechanisms for executing transactions on or through 
the facilities of the contract market will be made publicly available 
at the time of submission and requests for confidential treatment 
covering this information will be denied.

PART 41--SECURITY FUTURES PRODUCTS

    7. The authority citation for part 41 continues to read as follows:

    Authority: Sections 206, 251 and 252, Pub. L. 106-554, 114 Stat. 
2763, 7 U.S.C. 1a, 2, 6f, 6j, 7a-2, 12a; 15 U.S.C. 78g(c)(2).

    8. Section 41.23 is amended by adding new paragraph (a)(7) to read 
as follows:


Sec.  41.23  Listing of security futures products for trading.

    (a) * * *
    (7) Includes a request for confidential treatment as permitted 
under the procedures of Sec.  40.8.
* * * * *
    9. Section 41.24 is amended by adding new paragraph (a)(6) to read 
as follows:


Sec.  41.24  Rule amendments to security futures products.

    (a) * * *
    (6) Includes a request for confidential treatment as permitted 
under the procedures of Sec.  40.8.
* * * * *

    Issued in Washington, DC, on July 17, 2007 by the Commission.
Eileen A. Donovan,
Acting Secretary of the Commission.
 [FR Doc. E7-14103 Filed 7-19-07; 8:45 am]
BILLING CODE 6351-01-P