Order Exempting the Trading and Clearing of Certain Products Related to SPDR®, 31981-31983 [E8-12624]

Download as PDF Federal Register / Vol. 73, No. 109 / Thursday, June 5, 2008 / Notices that, notwithstanding potential costs, a particular order is necessary or appropriate to protect the public interest or to effectuate any of the provisions or to accomplish any of the purposes of the CEA. In the Proposed Order, the Commission analyzed the costs and benefits associated with the implementation of an exemption under Section 4(c) of the Act. The Commission invited public comment on its analysis of the costs and benefits associated with the issuance of an exemptive order under Section 4(c) of the Act.18 No comments were submitted to the Commission. After considering the factors presented in this release, the Commission has determined to issue this Order. Issued in Washington, DC, on May 30, 2008 by the Commission. David A. Stawick, Secretary of the Commission. [FR Doc. E8–12579 Filed 6–4–08; 8:45 am] BILLING CODE 6351–01–P COMMODITY FUTURES TRADING COMMISSION Order Exempting the Trading and Clearing of Certain Products Related to SPDR Gold Trust Shares Commodity Futures Trading Commission. ACTION: Final Order. yshivers on PROD1PC62 with NOTICES AGENCY: SUMMARY: On April 23rd, 2008, the Commodity Futures Trading Commission (‘‘CFTC’’ or the ‘‘Commission’’) published for public comment in the Federal Register 1 a proposal to exempt the trading and clearing of products called options on streetTRACKS  Gold Trust Shares (‘‘ST Gold Options’’), proposed to be traded on national securities exchanges, and cleared by The Options Clearing Corporation (‘‘OCC’’), from the provisions of the Commodity Exchange Act (‘‘CEA’’) 2 and Commission regulations thereunder to the extent necessary for them to be so traded and cleared. The Commission has determined to issue this Order essentially as proposed. Authority for this exemption is found in Section 4(c) of the CEA.3 DATES: Effective Date: May 30, 2008. FOR FURTHER INFORMATION CONTACT: Robert B. Wasserman, Associate 18 Proposed Order at 13870. FR 21917 (April 23, 2008) 2 7 U.S.C. 1 et seq. 3 7 U.S.C. 6(c). 1 73 VerDate Aug<31>2005 14:51 Jun 04, 2008 Jkt 214001 Director, 202–418–5092, rwasserman@cftc.gov, Division of Clearing and Intermediary Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 1151 21st Street, NW., Washington, DC 20581. SUPPLEMENTARY INFORMATION: I. Introduction The OCC is both a Derivatives Clearing Organization (‘‘DCO’’) registered pursuant to Section 5b of the CEA,4 and a securities clearing agency registered pursuant to Section 17A of the Securities Exchange Act of 1934 (‘‘the ’34 Act’’).5 OCC filed with the CFTC, pursuant to Section 5c(c) of the CEA and Commission Regulations 39.4(a) and 40.5 thereunder,6 requests for approval of rules and rule amendments that would enable OCC to clear and settle ST Gold Options 7 traded on national securities exchanges in its capacity as a registered securities clearing agency regulated by the Securities and Exchange Commission (‘‘SEC’’) (and not in its capacity as a DCO).8 Section 5c(c)(3) provides that the CFTC must approve any such rules and rule amendments submitted for approval unless it finds that the rules or rule amendments would violate the CEA. II. Section 4(c) of the Commodity Exchange Act Section 4(c)(1) of the CEA empowers the CFTC to ‘‘promote responsible economic or financial innovation and fair competition’’ by exempting any transaction or class of transactions from any of the provisions of the CEA (subject to exceptions not relevant here) where the Commission determines that the exemption would be consistent with the public interest. The Commission may grant such an exemption by rule, 47 U.S.C. 7a–1. U.S.C. 78q–l. 6 7 U.S.C. 7a–2(c), 17 CFR 39.4(a), 40.5. 7 streetTRACKS Gold Trust Shares, which underlie ST Gold Options, are described in greater detail in the ‘‘Proposed Exemptive Order for ST Gold Futures Contracts,’’ 73 FR 13867, 13868 (March 14, 2008). On May 20, 2008, streetTRACKS Gold Trust Shares were renamed SPDR Gold Trust Shares. See Prospectus for SPDR Gold Trust, available at https://www.spdrgoldshares.com/pdf/ SPDRGoldTrustProspectus.pdf (reviewed May 22, 2008). 8 The request for approval concerning the ST Gold Options was filed effective February 4, 2008, and Amendment No. 1 thereto was filed effective March 7, 2008. See SR–OCC–2008–04 and Amendment No. 1. OCC has also filed these proposed rule changes with the SEC. See SEC Release No. 34–57695; File No. SR–OCC–2008–07 (April 21, 2008), 73 FR 22452 (April 25, 2008). On May 22, 2008, OCC filed Amendment No. 2 to the request for approval, reflecting the change in the name of streetTRACKS Gold Trust Shares. 5 15 PO 00000 Frm 00032 Fmt 4703 Sfmt 4703 31981 regulation or order, after notice and opportunity for hearing, and may do so on application of any person or on its own initiative. In enacting Section 4(c), Congress noted that the goal of the provision ‘‘is to give the Commission a means of providing certainty and stability to existing and emerging markets so that financial innovation and market development can proceed in an effective and competitive manner.’’ 9 Permitting ST Gold Options to trade on national securities exchanges and be cleared on OCC as discussed above appears likely to foster both financial innovation and competition. In accordance with the Memorandum of Understanding entered into between the CFTC and the Securities and Exchange Commission (‘‘SEC’’) on March 11, 2008, and in particular the addendum thereto concerning Principles Governing the Review of Novel Derivative Products, the Commission believes that novel derivative products that implicate areas of overlapping regulatory concern should be permitted to trade in either or both a CFTC- or SEC-regulated environment, in a manner consistent with laws and regulations (including the appropriate use of all available exemptive and interpretive authority). ST Gold Options are novel instruments and, given their potential usefulness to the market, the Commission believes that this is an appropriate case for issuing an exemption without making a finding as to the nature of these particular instruments. Section 4(c)(2) provides that the Commission may grant exemptions only when it determines that the requirements for which an exemption is being provided should not be applied to the agreements, contracts or transactions at issue, and the exemption is consistent with the public interest and the purposes of the CEA; that the agreements, contracts or transactions will be entered into solely between appropriate persons; and that the exemption will not have a material adverse effect on the ability of the Commission or any contract market or derivatives transaction execution facility to discharge its regulatory or self-regulatory responsibilities under the CEA. In the April 23, 2008 Federal Register Release, the Commission requested public comment on the matters discussed above and all issues raised by its proposed exemptive order. No comments were received. 9 House Conf. Report No. 102–978, 1992 U.S.C.C.A.N. 3179, 3213 (‘‘4(c) Conf. Report’’). E:\FR\FM\05JNN1.SGM 05JNN1 31982 Federal Register / Vol. 73, No. 109 / Thursday, June 5, 2008 / Notices yshivers on PROD1PC62 with NOTICES III. Findings and Conclusions After considering the complete record in this matter, the Commission has determined that the requirements of Section 4(c) have been met. First, the exemption is consistent with the public interest and with the purposes of the CEA, including ‘‘promot[ing] responsible innovation and fair competition among boards of trade, other markets and market participants.’’ 10 It appears to be consistent with these and the other purposes of the CEA, with the public interest, with the CFTC-SEC Memorandum of Understanding of March 11, 2008, and with the addendum thereto, for the mode of trading of these transactions—whether it is to be through CFTC-regulated markets and clearing organizations or SECregulated markets and clearing agencies—to be determined by competitive market forces. Second, the ST Gold Options will be entered into solely between appropriate persons. Section 4(c)(3) includes within the term ‘‘appropriate persons’’ a number of specified categories of persons, but also in subparagraph (K), ‘‘such other persons that the Commission determines to be appropriate in light of * * * the applicability of appropriate regulatory protections.’’ National securities exchanges, OCC and broker-dealers who will intermediate transactions in ST Gold Options are subject to extensive and detailed oversight by the SEC and, in the case of the intermediaries, the securities self-regulatory organizations. Given that the products will be traded on national securities exchanges, the regulatory protections available under the securities laws, and the goal of promoting fair competition, the ST Gold Options will be traded by appropriate persons. Third, the exemption would not have a material adverse effect on the ability of the Commission or any designated contract market to carry out their regulatory responsibilities under the CEA. There is no reason to believe that granting an exemption here would interfere with the Commission’s or a designated contract market’s ability to oversee the trading of similar products or otherwise carry out their duties. Therefore, upon due consideration, pursuant to its authority under Section 4(c) of the CEA, the Commission hereby issues this Order and exempts the trading of ST Gold Options on national securities exchanges and clearing of ST Gold Options by OCC in its capacity as a registered securities clearing agency from the CEA and the Commission’s Regulations thereunder to the extent necessary to permit them to be so traded and cleared. This Order is subject to termination or revision, on a prospective basis, if the Commission determines upon further information that this exemption is not consistent with the public interest. If the Commission believes such exemption becomes detrimental to the public interest, the Commission may revoke this Order on its own motion. IV. Related Matters A. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (‘‘PRA’’) 11 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. The exemptive order will not require a new collection of information from any entities. B. Cost-Benefit Analysis Section 15(a) of the CEA, as amended by Section 119 of the Commodity Futures Modernization Act of 2000 (‘‘CFMA’’),12 requires the Commission to consider the costs and benefits of its action before issuing an order under the CEA. By its terms, Section 15(a) as amended does not require the Commission to quantify the costs and benefits of an order or to determine whether the benefits of the order 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 CEA 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 order 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 CEA. The Commission has considered the costs and benefits of the order in light 11 44 10 CEA Section 3(b), 7 U.S.C. 5(b). VerDate Aug<31>2005 14:51 Jun 04, 2008 12 7 Jkt 214001 PO 00000 U.S.C. 3507(d). U.S.C. 19(a). Frm 00033 Fmt 4703 Sfmt 4703 of the specific provisions of Section 15(a) of the CEA, as follows: 1. Protection of market participants and the public. National securities exchanges, OCC and their members who will intermediate ST Gold Options are subject to extensive regulatory oversight. 2. Efficiency, competition, and financial integrity. The exemptive order appears likely to enhance market efficiency and competition since it could encourage potential trading of ST Gold Options on markets other than designated contract markets or derivative transaction execution facilities. Financial integrity will not be affected since the ST Gold Options will be cleared by OCC, a DCO and SECregistered clearing agency, and intermediated by SEC-registered brokerdealers. 3. Price discovery. Price discovery may be enhanced through market competition. 4. Sound risk management practices. The ST Gold Options will be subject to OCC’s current risk-management practices including its margining system. 5. Other public interest considerations. The exemptive order appears likely to encourage development of derivative products through market competition without unnecessary regulatory burden. The Commission requested comment on its application of these factors in the proposing release. No comments were received. After considering these factors, the Commission has determined to issue this Order. Issued in Washington, DC, on May 30, 2008 by the Commission. David A. Stawick, Secretary of the Commission. Dissenting in Part and Concurring in Part to Exemptive Order Under Section 4(c) of the Commodity Exchange Act (CEA) To Exempt Certain Products Related to SPDR  Gold Trust Shares Traded on a National Securities Exchange and Cleared by the Options Clearing Corporation (OCC) From Provisions of the CEA, and Approval of OCC’s Request for Approval of Rules I applaud the agencies’ efforts today to enhance cooperation and coordination in approving innovative and novel products. I respectfully dissent, however, from the Commission’s issuance of the abovereferenced order. In the promulgation of such an exemptive order in furtherance of the approval process, I believe the Commission should have adequate basis E:\FR\FM\05JNN1.SGM 05JNN1 Federal Register / Vol. 73, No. 109 / Thursday, June 5, 2008 / Notices yshivers on PROD1PC62 with NOTICES for confidence that the Securities and Exchange Commission will similarly fully exercise its broad statutory exemptive authority under the securities laws to permit futures exchanges to trade products that are economically equivalent to those that are or may be approved for trading on national securities exchanges, and to allow derivatives clearing organizations to clear such products, to ensure that the futures markets are not competitively disadvantaged with regard to such products. I dissent from today’s action, because I do not believe this exemptive order provides sufficient basis for or assurance of such reciprocity in the future. Given the issuance of today’s orders, I concur in the approval of the VerDate Aug<31>2005 14:51 Jun 04, 2008 Jkt 214001 Options Clearing Corporation’s abovereferenced request for approval of rules. Bart Chilton, Commissioner, Commodity Futures Trading Commission. [FR Doc. E8–12624 Filed 6–4–08; 8:45 am] BILLING CODE 6351–01–P DEPARTMENT OF DEFENSE Office of the Secretary [Transmittal Nos. 08–55] 36(b)(1) Arms Sales Notification Department of Defense, Defense Security Cooperation Agency. ACTION: Notice. AGENCY: PO 00000 Frm 00034 Fmt 4703 Sfmt 4703 31983 SUMMARY: The Department of Defense is publishing the unclassified text of a section 36(b)(1) arms sales notification. This is published to fulfill the requirements of section 155 of Public Law 104–164 dated 21 July 1996. FOR FURTHER INFORMATION CONTACT: Ms. B. English, DSCA/DBO/CFM, (703) 601– 3740. The following is a copy of a letter to the Speaker of the House of Representatives, Transmittals 08–55 with attached transmittal, policy justification, and Sensitivity of Technology. Dated: May 28, 2008. Patricia L. Toppings, OSD Federal Register Liaison Officer, Department of Defense. BILLING CODE 5001–06–M E:\FR\FM\05JNN1.SGM 05JNN1

Agencies

[Federal Register Volume 73, Number 109 (Thursday, June 5, 2008)]
[Notices]
[Pages 31981-31983]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-12624]


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COMMODITY FUTURES TRADING COMMISSION


Order Exempting the Trading and Clearing of Certain Products 
Related to SPDR[reg] Gold Trust Shares

AGENCY: Commodity Futures Trading Commission.

ACTION: Final Order.

-----------------------------------------------------------------------

SUMMARY: On April 23rd, 2008, the Commodity Futures Trading Commission 
(``CFTC'' or the ``Commission'') published for public comment in the 
Federal Register \1\ a proposal to exempt the trading and clearing of 
products called options on streetTRACKS [supreg] Gold Trust Shares 
(``ST Gold Options''), proposed to be traded on national securities 
exchanges, and cleared by The Options Clearing Corporation (``OCC''), 
from the provisions of the Commodity Exchange Act (``CEA'') \2\ and 
Commission regulations thereunder to the extent necessary for them to 
be so traded and cleared. The Commission has determined to issue this 
Order essentially as proposed. Authority for this exemption is found in 
Section 4(c) of the CEA.\3\
---------------------------------------------------------------------------

    \1\ 73 FR 21917 (April 23, 2008)
    \2\ 7 U.S.C. 1 et seq.
    \3\ 7 U.S.C. 6(c).

---------------------------------------------------------------------------
DATES: Effective Date: May 30, 2008.

FOR FURTHER INFORMATION CONTACT: Robert B. Wasserman, Associate 
Director, 202-418-5092, rwasserman@cftc.gov, Division of Clearing and 
Intermediary Oversight, Commodity Futures Trading Commission, Three 
Lafayette Centre, 1151 21st Street, NW., Washington, DC 20581.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The OCC is both a Derivatives Clearing Organization (``DCO'') 
registered pursuant to Section 5b of the CEA,\4\ and a securities 
clearing agency registered pursuant to Section 17A of the Securities 
Exchange Act of 1934 (``the '34 Act'').\5\
---------------------------------------------------------------------------

    \4\ 7 U.S.C. 7a-1.
    \5\ 15 U.S.C. 78q-l.
---------------------------------------------------------------------------

    OCC filed with the CFTC, pursuant to Section 5c(c) of the CEA and 
Commission Regulations 39.4(a) and 40.5 thereunder,\6\ requests for 
approval of rules and rule amendments that would enable OCC to clear 
and settle ST Gold Options \7\ traded on national securities exchanges 
in its capacity as a registered securities clearing agency regulated by 
the Securities and Exchange Commission (``SEC'') (and not in its 
capacity as a DCO).\8\ Section 5c(c)(3) provides that the CFTC must 
approve any such rules and rule amendments submitted for approval 
unless it finds that the rules or rule amendments would violate the 
CEA.
---------------------------------------------------------------------------

    \6\ 7 U.S.C. 7a-2(c), 17 CFR 39.4(a), 40.5.
    \7\ streetTRACKS[supreg] Gold Trust Shares, which underlie ST 
Gold Options, are described in greater detail in the ``Proposed 
Exemptive Order for ST Gold Futures Contracts,'' 73 FR 13867, 13868 
(March 14, 2008). On May 20, 2008, streetTRACKS[supreg] Gold Trust 
Shares were renamed SPDR[reg] Gold Trust Shares. See 
Prospectus for SPDR[reg] Gold Trust, available at https://
www.spdrgoldshares.com/pdf/SPDRGoldTrustProspectus.pdf (reviewed May 
22, 2008).
    \8\ The request for approval concerning the ST Gold Options was 
filed effective February 4, 2008, and Amendment No. 1 thereto was 
filed effective March 7, 2008. See SR-OCC-2008-04 and Amendment No. 
1. OCC has also filed these proposed rule changes with the SEC. See 
SEC Release No. 34-57695; File No. SR-OCC-2008-07 (April 21, 2008), 
73 FR 22452 (April 25, 2008). On May 22, 2008, OCC filed Amendment 
No. 2 to the request for approval, reflecting the change in the name 
of streetTRACKS[supreg] Gold Trust Shares.
---------------------------------------------------------------------------

II. Section 4(c) of the Commodity Exchange Act

    Section 4(c)(1) of the CEA empowers the CFTC to ``promote 
responsible economic or financial innovation and fair competition'' by 
exempting any transaction or class of transactions from any of the 
provisions of the CEA (subject to exceptions not relevant here) where 
the Commission determines that the exemption would be consistent with 
the public interest. The Commission may grant such an exemption by 
rule, regulation or order, after notice and opportunity for hearing, 
and may do so on application of any person or on its own initiative.
    In enacting Section 4(c), Congress noted that the goal of the 
provision ``is to give the Commission a means of providing certainty 
and stability to existing and emerging markets so that financial 
innovation and market development can proceed in an effective and 
competitive manner.'' \9\ Permitting ST Gold Options to trade on 
national securities exchanges and be cleared on OCC as discussed above 
appears likely to foster both financial innovation and competition. In 
accordance with the Memorandum of Understanding entered into between 
the CFTC and the Securities and Exchange Commission (``SEC'') on March 
11, 2008, and in particular the addendum thereto concerning Principles 
Governing the Review of Novel Derivative Products, the Commission 
believes that novel derivative products that implicate areas of 
overlapping regulatory concern should be permitted to trade in either 
or both a CFTC- or SEC-regulated environment, in a manner consistent 
with laws and regulations (including the appropriate use of all 
available exemptive and interpretive authority).
---------------------------------------------------------------------------

    \9\ House Conf. Report No. 102-978, 1992 U.S.C.C.A.N. 3179, 3213 
(``4(c) Conf. Report'').
---------------------------------------------------------------------------

    ST Gold Options are novel instruments and, given their potential 
usefulness to the market, the Commission believes that this is an 
appropriate case for issuing an exemption without making a finding as 
to the nature of these particular instruments.
    Section 4(c)(2) provides that the Commission may grant exemptions 
only when it determines that the requirements for which an exemption is 
being provided should not be applied to the agreements, contracts or 
transactions at issue, and the exemption is consistent with the public 
interest and the purposes of the CEA; that the agreements, contracts or 
transactions will be entered into solely between appropriate persons; 
and that the exemption will not have a material adverse effect on the 
ability of the Commission or any contract market or derivatives 
transaction execution facility to discharge its regulatory or self-
regulatory responsibilities under the CEA.
    In the April 23, 2008 Federal Register Release, the Commission 
requested public comment on the matters discussed above and all issues 
raised by its proposed exemptive order. No comments were received.

[[Page 31982]]

III. Findings and Conclusions

    After considering the complete record in this matter, the 
Commission has determined that the requirements of Section 4(c) have 
been met. First, the exemption is consistent with the public interest 
and with the purposes of the CEA, including ``promot[ing] responsible 
innovation and fair competition among boards of trade, other markets 
and market participants.'' \10\ It appears to be consistent with these 
and the other purposes of the CEA, with the public interest, with the 
CFTC-SEC Memorandum of Understanding of March 11, 2008, and with the 
addendum thereto, for the mode of trading of these transactions--
whether it is to be through CFTC-regulated markets and clearing 
organizations or SEC-regulated markets and clearing agencies--to be 
determined by competitive market forces.
---------------------------------------------------------------------------

    \10\ CEA Section 3(b), 7 U.S.C. 5(b).
---------------------------------------------------------------------------

    Second, the ST Gold Options will be entered into solely between 
appropriate persons. Section 4(c)(3) includes within the term 
``appropriate persons'' a number of specified categories of persons, 
but also in subparagraph (K), ``such other persons that the Commission 
determines to be appropriate in light of * * * the applicability of 
appropriate regulatory protections.'' National securities exchanges, 
OCC and broker-dealers who will intermediate transactions in ST Gold 
Options are subject to extensive and detailed oversight by the SEC and, 
in the case of the intermediaries, the securities self-regulatory 
organizations. Given that the products will be traded on national 
securities exchanges, the regulatory protections available under the 
securities laws, and the goal of promoting fair competition, the ST 
Gold Options will be traded by appropriate persons.
    Third, the exemption would not have a material adverse effect on 
the ability of the Commission or any designated contract market to 
carry out their regulatory responsibilities under the CEA. There is no 
reason to believe that granting an exemption here would interfere with 
the Commission's or a designated contract market's ability to oversee 
the trading of similar products or otherwise carry out their duties.
    Therefore, upon due consideration, pursuant to its authority under 
Section 4(c) of the CEA, the Commission hereby issues this Order and 
exempts the trading of ST Gold Options on national securities exchanges 
and clearing of ST Gold Options by OCC in its capacity as a registered 
securities clearing agency from the CEA and the Commission's 
Regulations thereunder to the extent necessary to permit them to be so 
traded and cleared.
    This Order is subject to termination or revision, on a prospective 
basis, if the Commission determines upon further information that this 
exemption is not consistent with the public interest. If the Commission 
believes such exemption becomes detrimental to the public interest, the 
Commission may revoke this Order on its own motion.

IV. Related Matters

A. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (``PRA'') \11\ 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. The exemptive order will not require 
a new collection of information from any entities.
---------------------------------------------------------------------------

    \11\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

B. Cost-Benefit Analysis

    Section 15(a) of the CEA, as amended by Section 119 of the 
Commodity Futures Modernization Act of 2000 (``CFMA''),\12\ requires 
the Commission to consider the costs and benefits of its action before 
issuing an order under the CEA. By its terms, Section 15(a) as amended 
does not require the Commission to quantify the costs and benefits of 
an order or to determine whether the benefits of the order outweigh its 
costs. Rather, Section 15(a) simply requires the Commission to 
``consider the costs and benefits'' of its action.
---------------------------------------------------------------------------

    \12\ 7 U.S.C. 19(a).
---------------------------------------------------------------------------

    Section 15(a) of the CEA 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 order 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 CEA.
    The Commission has considered the costs and benefits of the order 
in light of the specific provisions of Section 15(a) of the CEA, as 
follows:
    1. Protection of market participants and the public. National 
securities exchanges, OCC and their members who will intermediate ST 
Gold Options are subject to extensive regulatory oversight.
    2. Efficiency, competition, and financial integrity. The exemptive 
order appears likely to enhance market efficiency and competition since 
it could encourage potential trading of ST Gold Options on markets 
other than designated contract markets or derivative transaction 
execution facilities. Financial integrity will not be affected since 
the ST Gold Options will be cleared by OCC, a DCO and SEC-registered 
clearing agency, and intermediated by SEC-registered broker-dealers.
    3. Price discovery. Price discovery may be enhanced through market 
competition.
    4. Sound risk management practices. The ST Gold Options will be 
subject to OCC's current risk-management practices including its 
margining system.
    5. Other public interest considerations. The exemptive order 
appears likely to encourage development of derivative products through 
market competition without unnecessary regulatory burden.
    The Commission requested comment on its application of these 
factors in the proposing release. No comments were received.
    After considering these factors, the Commission has determined to 
issue this Order.

    Issued in Washington, DC, on May 30, 2008 by the Commission.
David A. Stawick,
Secretary of the Commission.

Dissenting in Part and Concurring in Part to Exemptive Order Under 
Section 4(c) of the Commodity Exchange Act (CEA) To Exempt Certain 
Products Related to SPDR [supreg] Gold Trust Shares Traded on a 
National Securities Exchange and Cleared by the Options Clearing 
Corporation (OCC) From Provisions of the CEA, and Approval of OCC's 
Request for Approval of Rules

    I applaud the agencies' efforts today to enhance cooperation and 
coordination in approving innovative and novel products. I respectfully 
dissent, however, from the Commission's issuance of the above-
referenced order. In the promulgation of such an exemptive order in 
furtherance of the approval process, I believe the Commission should 
have adequate basis

[[Page 31983]]

for confidence that the Securities and Exchange Commission will 
similarly fully exercise its broad statutory exemptive authority under 
the securities laws to permit futures exchanges to trade products that 
are economically equivalent to those that are or may be approved for 
trading on national securities exchanges, and to allow derivatives 
clearing organizations to clear such products, to ensure that the 
futures markets are not competitively disadvantaged with regard to such 
products. I dissent from today's action, because I do not believe this 
exemptive order provides sufficient basis for or assurance of such 
reciprocity in the future. Given the issuance of today's orders, I 
concur in the approval of the Options Clearing Corporation's above-
referenced request for approval of rules.

Bart Chilton,
Commissioner, Commodity Futures Trading Commission.
 [FR Doc. E8-12624 Filed 6-4-08; 8:45 am]
BILLING CODE 6351-01-P
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