Effective Date for Swap Regulation, 65999-66004 [2011-27535]

Download as PDF Federal Register / Vol. 76, No. 206 / Tuesday, October 25, 2011 / Proposed Rules (f) Definitions For the purpose of this AD, an ‘‘engine shop visit’’ is induction of an engine into the shop for any purpose where: (1) All the blades are removed from the high-pressure (HP) compressor discs and the HP turbine disc, or (2) All the blades are removed from the intermediate pressure turbine disc. (g) Alternative Methods of Compliance (AMOCs) The Manager, Engine Certification Office, FAA may approve AMOCs for this AD. Use the procedures found in 14 CFR 39.19 to make your request. (h) Related Information (1) Contact Alan Strom, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; phone: 781–238–7143; fax: 781–238– 7199; e-mail: alan.strom@faa.gov, for more information about this AD. (2) Refer to MCAI European Aviation Safety Agency Airworthiness Directive 2009– 0244, dated November 9, 2009, and RollsRoyce plc Alert Service Bulletin No. RB.211– 72–AG272 for related information. Contact Rolls-Royce plc, P.O. Box 31, Derby, DE24 8BJ, United Kingdom; phone: 011 44 1332 242424, fax: 011 44 1332 249936; or e-mail: https://www.rollsroyce.com/contact/civil_ team.jsp, for a copy of this service information or download the publication from https://www.aeromanager.com. Issued in Burlington, Massachusetts, on October 18, 2011. Peter A White, Manager, Engine & Propeller Directorate, Aircraft Certification Service. [FR Doc. 2011–27512 Filed 10–24–11; 8:45 am] BILLING CODE 4910–13–P COMMODITY FUTURES TRADING COMMISSION 17 CFR Chapter 1 Effective Date for Swap Regulation Commodity Futures Trading Commission. ACTION: Notice of proposed amendment. AGENCY: On July 14, 2011, the Commodity Futures Trading Commission (‘‘CFTC’’ or the ‘‘Commission’’) issued a final order (‘‘July 14 Order’’) that grants temporary exemptive relief from certain provisions of the Commodity Exchange Act (‘‘CEA’’) that otherwise would have taken effect on the general effective date of title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (‘‘the Dodd-Frank Act’’)—July 16, 2011. The July 14 Order grants temporary relief in two parts. The first part addresses those CEA provisions erowe on DSK2VPTVN1PROD with PROPOSALS SUMMARY: VerDate Mar<15>2010 15:38 Oct 24, 2011 Jkt 226001 added or amended by title VII of the Dodd-Frank Act that reference one or more terms regarding entities or instruments that title VII requires be ‘‘further defined’’ to the extent that requirements or portions of such provisions specifically relate to such referenced terms and do not require a rulemaking. The second part, which is based on part 35 of the Commission’s regulations, addresses certain provisions of the CEA that may apply to certain agreements, contracts, and transactions in exempt or excluded commodities as a result of the repeal of various CEA exemptions and exclusions as of the general effective date of July 16, 2011. This is a notice of a proposed amendment to that July 14 Order, 76 FR 42508 (July 19, 2011), that would modify the temporary exemptive relief provided therein by extending the potential latest expiration date of the July 14 Order; and adding provisions to account for the repeal and replacement (as of December 31, 2011) of part 35 of the Commission’s regulations. Only comments pertaining to these proposed amendments to the July 14 Order will be considered as part of this notice of proposed amendment. DATES: Submit comments on or before November 25, 2011. ADDRESSES: Comments may be submitted, referenced as ‘‘Effective Date Amendments,’’ by any of the following methods: • Agency Web site, via its Comments Online process at https:// comments.cftc.gov. Follow the instructions for submitting comments through the Web site. • Mail: David A. Stawick, Secretary of the Commission, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. • Hand Delivery/Courier: Same as mail above. • Federal eRulemaking Portal: https:// www.regulations.gov. Follow the instructions for submitting comments. Please submit your comments using only one method. All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to https:// www.cftc.gov. You should submit only information that you wish to make available publicly. If you wish the Commission to consider information that may be exempt from disclosure under the Freedom of Information Act, a petition for confidential treatment of the exempt information may be submitted according to the established procedures in § 145.9 of the PO 00000 Frm 00024 Fmt 4702 Sfmt 4702 65999 Commission’s regulations, 17 CFR 145.9. The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse or remove any or all of your submission from https://www.cftc.gov that it may deem to be inappropriate for publication, such as obscene language. All submissions that have been redacted or removed that contain comments on the merits of the rulemaking will be retained in the public comment file and will be considered as required under the Administrative Procedure Act and other applicable laws, and may be accessible under the Freedom of Information Act. FOR FURTHER INFORMATION CONTACT: Terry Arbit, Deputy General Counsel, 202–418–5357, tarbit@cftc.gov, or Mark D. Higgins, Counsel, 202–418–5864, mhiggins@cftc.gov, Office of the General Counsel, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. SUPPLEMENTARY INFORMATION: I. Background On July 21, 2010, President Obama signed the Dodd-Frank Act into law.1 Title VII of the Dodd-Frank Act amends the CEA 2 to establish a comprehensive new regulatory framework for swaps. The legislation was enacted to reduce risk, increase transparency, and promote market integrity within the financial system by, among other things: (1) Providing for the registration and comprehensive regulation of swap dealers and major swap participants; (2) imposing clearing and trade execution requirements on standardized derivative products; (3) creating robust recordkeeping and real-time reporting regimes; and (4) enhancing the rulemaking and enforcement authorities of the Commission with respect to, among others, all registered entities and intermediaries subject to the Commission’s oversight.3 Section 754 of the Dodd-Frank Act states that, unless otherwise provided, the provisions of subtitle A of title VII of the Dodd-Frank Act 4 ‘‘shall take 1 See Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111–203, 124 Stat. 1376 (2010). 2 7 U.S.C. 1 et seq. 3 Title VII also includes amendments to the federal securities laws to establish a similar regulatory framework for security-based swaps under the authority of the Securities and Exchange Commission (‘‘SEC’’). 4 All of the amendments to the CEA in title VII are contained in subtitle A. Accordingly, for convenience, references to ‘‘title VII’’ in this notice of proposed amendment shall refer only to subtitle A of title VII. E:\FR\FM\25OCP1.SGM 25OCP1 66000 Federal Register / Vol. 76, No. 206 / Tuesday, October 25, 2011 / Proposed Rules erowe on DSK2VPTVN1PROD with PROPOSALS effect on the later of 360 days after the date of the enactment of this subtitle or, to the extent a provision of this subtitle requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of this subtitle.’’ Thus, the general effective date for provisions of title VII that do not require a rulemaking was July 16, 2011. This includes the provisions that repealed several provisions of the CEA as in effect prior to the Dodd-Frank Act that excluded or exempted, in whole or in part, certain transactions from Commission oversight.5 Section 712(d)(1) of the Dodd-Frank Act requires the Commission and the SEC to undertake a joint rulemaking to ‘‘further define’’ certain terms used in title VII, including the terms ‘‘swap,’’ ‘‘swap dealer,’’ ‘‘major swap participant,’’ and ‘‘eligible contract participant.’’6 Section 721(c) requires the Commission to adopt a rule to ‘‘further define’’ the terms ‘‘swap,’’ ‘‘swap dealer,’’ ‘‘major swap participant,’’ and ‘‘eligible contract participant’’ to prevent evasion of statutory and regulatory obligations.7 The Commission has issued two notices of proposed rulemaking that address these further definitions.8 The Commission’s final rulemakings further defining the terms in sections 712(d) and 721(c) were not expected to be in effect as of July 16, 2011 (i.e., the general effective date set forth in section 754 of the Dodd-Frank Act). Accordingly, the Commission on July 5 These exclusions and exemptions were contained in former CEA sections 2(d), 2(e), 2(g), 2(h), and 5d, 7 U.S.C. 2(d), 2(e), 2(g), 2(h), and 7a– 3. 6 Section 712(d)(1) provides: ‘‘Notwithstanding any other provision of this title and subsections (b) and (c), the Commodity Futures Trading Commission and the Securities and Exchange Commission, in consultation with the Board of Governors [of the Federal Reserve System], shall further define the terms ‘swap’, ‘security-based swap’, ‘swap dealer’, ‘security-based swap dealer’, ‘major swap participant’, ‘major security-based swap participant’, and ‘security-based swap agreement’ in section 1a(47)(A)(v) of the Commodity Exchange Act (7 U.S.C. 1a(47)(A)(v)) and section 3(a)(78) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(78)).’’ 7 Section 721(c) provides: ‘‘To include transactions and entities that have been structured to evade this subtitle (or an amendment made by this subtitle), the Commodity Futures Trading Commission shall adopt a rule to further define the terms ‘swap’, ‘swap dealer’, ‘major swap participant’, and ‘eligible contract participant’.’’ 8 See Further Definition of ‘‘Swap Dealer,’’ ‘‘Security-Based Swap Dealer,’’ ‘‘Major Swap Participant,’’ ‘‘Major Security-Based Swap Participant’’ and ‘‘Eligible Contract Participant,’’ 75 FR 80174, Dec. 21, 2010 and Further Definition of ‘‘Swap,’’ ‘‘Security-Based Swap,’’ and ‘‘SecurityBased Swap Agreement’’; Mixed Swaps; SecurityBased Swap Agreement Recordkeeping, 76 FR 29818, May 23, 2011. VerDate Mar<15>2010 15:38 Oct 24, 2011 Jkt 226001 14, 2011 exercised its exemptive authority under CEA section 4(c) 9 and its authority under section 712(f) of the Dodd-Frank Act by issuing the July 14 Order.10 In so doing, the Commission sought to address concerns that had been raised about the applicability of various regulatory requirements to certain agreements, contracts, and transactions after July 16, 2011, and thereby ensure that current practices will not be unduly disrupted during the transition to the new regulatory regime.11 Description of Existing Relief The July 14 Order groups the relevant provisions of the Dodd-Frank Act into four categories and provides temporary exemptive relief, set to expire no later than December 31, 2011, with respect to Categories 2 and 3. A summary of the four categories of provisions follows. Category 1 covers statutory provisions which by their express terms require rulemaking to implement. Because, under section 754 of the Dodd-Frank Act, these provisions do not become effective until at least 60 days after the final rule is published, no exemptive relief from the general effective date is necessary. Category 1 provisions include, among others, the further definitions of terms regarding swap entities or instruments as required by the Dodd-Frank Act (such as the terms ‘‘swap,’’ ‘‘swap dealer,’’ ‘‘major swap participant,’’ or ‘‘eligible contract participant’’). Category 1 also includes, among others: (1) Registration, capital and margin requirements, and business conduct standards for swap dealers and major swap participants; (2) provisions prohibiting agricultural swaps except pursuant to CFTC rules; (3) rules regarding swap execution facilities; and (4) various swap data recordkeeping and 97 U.S.C. 6(c). Date for Swap Regulation, 76 FR 42508 (issued and made effective by the Commission on July 14, 2011; published in the Federal Register on July 19, 2011). 11 Concurrent with the July 14 Order, the Commission’s Division of Clearing and Intermediary Oversight and the Division of Market Oversight (together ‘‘the Divisions’’) identified certain provisions of the Dodd-Frank Act and CEA as amended that would take effect on July 16, 2011, but that may not be eligible for the exemptive relief provided by the Commission in its July 14 Order— specifically, the amendments made to the CEA by Dodd-Frank Act sections 724(c), 725(a), and 731. On July 14, 2011, the Divisions issued Staff NoAction Relief addressing the application of these provisions after July 16, 2011. Available at: https://www.cftc.gov/ucm/groups/public/ @newsroom/documents/file/ noactionletter071411.pdf (last visited Sept. 26, 2011). The Commission anticipates that the Divisions will extend and conform this no-action relief to any final amendment to the July 14 Order that may result from this proposal. 10 Effective PO 00000 Frm 00025 Fmt 4702 Sfmt 4702 reporting requirements. A complete list of the Category 1 provisions is included in the appendix to the July 14 Order. The first part of the relief provided for in the July 14 Order reaches those DoddFrank Act provisions (‘‘Category 2 provisions’’) that are self-effectuating (i.e., do not require a rulemaking) and that reference one or more of the terms for which the Commission and SEC are required to provide further definition, including ‘‘swap,’’ ‘‘swap dealer,’’ ‘‘major swap participant,’’ ‘‘eligible contract participant,’’ and ‘‘securitybased swap agreement’’ (collectively, the ‘‘referenced terms’’). These Category 2 provisions include, for example, the trade execution requirement of CEA section 2(h)(8), as amended by DoddFrank Act section 723. A complete list of the Category 2 provisions is included in the appendix to the July 14 Order. Because the Category 2 provisions would have taken effect on July 16, 2011 pursuant to section 754, the Commission granted temporary relief from those provisions, but only to the extent that the requirements in such provisions specifically relate to a referenced term that is not yet further defined. Thus, if a Category 2 provision also applies to futures or options on futures, the provision took effect on July 16 with respect to futures or options on futures. The exemption for Category 2 provisions expires on the earlier of: (1) The effective date of the applicable final rule further defining the relevant term; or (2) December 31, 2011. In part two of the July 14 Order, the Commission provides temporary exemptive relief from the provisions of the CEA that may apply to certain agreements, contracts, and transactions in exempt or excluded commodities (generally, financial, energy and metals commodities) as a result of the repeal of the CEA exemptions and exclusions in former CEA sections 2(d), 2(e), 2(g), 2(h), and 5d as of July 16, 2011 pursuant to sections 723(a)(1) and 734(a) of the Dodd-Frank Act (the ‘‘Category 3 provisions’’). As explained in the July 14 Order, this relief is based on the Commission’s existing ‘‘part 35’’ exemptive rules.12 Part 35 originally was promulgated in 1993 pursuant to, among others, the Commission’s general exemptive authority in CEA section 4(c) and its plenary options authority under section 4c(b),13 and provides a broad-based exemption from the CEA for ‘‘swap 12 76 FR at 42514. The July 14 Order did not extend to agreements, contracts, or transactions that fully met the conditions of part 35, since in such circumstances further relief was unnecessary. 13 7 U.S.C. 6c(b). E:\FR\FM\25OCP1.SGM 25OCP1 Federal Register / Vol. 76, No. 206 / Tuesday, October 25, 2011 / Proposed Rules agreements’’ in any commodity. Specifically, part 35 exempts ‘‘swap agreements,’’ as defined therein, from most of the provisions of the CEA if: (1) They are entered into by ‘‘eligible swap participants’’ (‘‘ESPs’’); 14 (2) they are not part of a fungible class of agreements standardized as to their material economic terms; (3) the creditworthiness of any party having an actual or potential obligation under the swap agreement would be a material consideration in entering into or determining the terms of the swap agreement, including pricing, cost, or credit enhancement terms; and (4) they are not entered into or traded on a multilateral transaction execution facility. Under part two of the relief provided for in the July 14 Order, the Commission stated that transactions in exempt or excluded commodities (and persons offering, entering into, or rendering advice or rendering other services with respect to such transactions) are temporarily exempt from provisions of the CEA that may apply to such transactions if such transactions comply with part 35, notwithstanding that: (1) The transaction may be executed on a multilateral transaction execution facility; (2) the transaction may be cleared; (3) persons offering or entering into the transaction may be eligible contract participants as defined in the CEA (prior to the enactment of the Dodd-Frank Act); (4) the transaction may be part of a fungible class of agreements that are standardized as to their material economic terms; and/or (5) no more than one of the parties to the transaction is entering into the transaction in conjunction with its line of business, but is neither an eligible contract participant nor an ESP, and the transaction was not and is not marketed to the public.15 Thus, for certain transactions, the July 14 Order provides relief notwithstanding that the transaction erowe on DSK2VPTVN1PROD with PROPOSALS 14 As noted in the July 14 Order, the parties covered under the ESP definition, while very broad, are not coextensive with those covered by the terms ‘‘eligible commercial entity’’ or ‘‘eligible contract participant.’’ Therefore, it is possible that a small segment of persons or entities that are currently relying on one or more of the CEA exclusions or exemptions cited above might not qualify as an ESP and consequently would not be eligible for part 35. 76 FR at 42511, n. 40. 15 76 FR at 42514. With respect to commodity options, the Commission made clear that options identified in the swap agreement definition in paragraph (b)(1)(i) of § 35.1 of the Commission’s regulations and any options captured by the concluding catch-all language in that paragraph, as well as any options described in paragraphs (b)(1)(ii) and/or (iii) of § 35.1, involving excluded or exempt commodities are within the scope of the July 14 Order. 76 FR at 42514–15. VerDate Mar<15>2010 15:38 Oct 24, 2011 Jkt 226001 may not satisfy certain part 35 requirements (e.g., cleared, executed on a multilateral trade execution facility, entered into by certain persons that are not eligible contract participants, etc.). The Commission stated in the July 14 Order that this relief is limited to transactions in exempt and excluded commodities, and does not extend to transactions in agricultural commodities, because transactions in agricultural commodities were not covered by the applicable statutory exclusions and exemptions in effect prior to July 16, 2011.16 The exemption in part two of the July 14 Order expires on the earlier of: (1) The repeal, withdrawal or replacement of part 35; or (2) December 31, 2011. Category 4 contains those Dodd-Frank Act provisions for which the Commission determined not to issue relief, and which therefore went into effect on July 16, 2011. A complete list of the Category 4 provisions is included in the appendix to the July 14 Order. The temporary exemptions issued in the July 14 Order are subject to several conditions. These conditions provide that the July 14 Order shall not: (1) Limit in any way the Commission’s antifraud or anti-manipulation authority under the CEA; (2) apply to any provision of the Dodd-Frank Act or the CEA that became effective prior to July 16, 2011; (3) affect any effective date or compliance date set forth in any rulemaking issued by the Commission to implement provisions of the DoddFrank Act; (4) limit the Commission’s authority under Dodd-Frank Act section 712(f) to issue rules, orders, or exemptions prior to the effective date of any provision of the Dodd-Frank Act and the CEA, in order to prepare for such effective date; and (5) affect the applicability of any provision of the CEA to futures contracts or options on futures contracts, or to cash markets.17 16 The Commission also stated, though, that because part 35 remained in effect at the time of the July 14 Order, market participants could continue to rely on part 35 with respect to swaps (other than commodity options) on enumerated agricultural commodities as defined in CEA section 1a(4) or § 32.2 of the Commission’s regulations, as well as swaps and commodity options on non-enumerated agricultural commodities, to the extent these transactions fully comply with part 35. Under the July 14 Order, market participants also may continue to rely on part 32 for options on enumerated agricultural commodities to the extent these transactions are conducted in accordance with § 32.13(g) of the Commission’s regulations. Rule 32.13(g) permits off-exchange options between producers, processors, commercial users or merchants of the commodity or its products or byproducts that have a net worth of at least $10 million. 17 76 FR at 42522. PO 00000 Frm 00026 Fmt 4702 Sfmt 4702 66001 II. Discussion of the Proposed Amendments to the July 14 Order The Commission is proposing to amend the July 14 Order in two ways. First, the Commission is proposing to amend the July 14 Order to extend the potential latest expiry dates. With respect to provisions covered in the first part of the relief in the July 14 Order, the Commission is proposing that the temporary exemptive relief expire upon the earlier of: (1) The effective date of the applicable final rule further defining the relevant referenced term; or (2) July 16, 2012.18 This amendment addresses the potential that, as of December 31, 2011, the CFTC–SEC joint rulemakings ‘‘further defining’’ the referenced terms will not yet be effective. The Commission also is proposing to amend the July 14 Order to extend the expiry date of the second part of the relief in the July 14 Order until the earlier of: (1) July 16, 2012; or (2) such other compliance date as may be determined by the Commission. For the same reason stated by the Commission with respect to the second part of the relief provided in the July 14 Order, the proposed extension of this exemptive relief ‘‘will allow markets and market participants to continue to operate under the regulatory regime as in effect prior to July 16, 2011, but subject to various implementing regulations that the Commission promulgates and applies to the subject transactions, market participants, or markets.’’ 19 Second, the Commission is proposing to include within the second part of the relief any agreement, contract or transaction that fully meets the conditions in part 35 as in effect on December 31, 2011. This amendment addresses the fact that such transactions, which were not included within the scope of the July 14 Order because the exemptive rules in part 35 covered them at that time, now require temporary relief because part 35 will no longer be available after December 31, 2011.20 Accordingly, to ensure that the 18 The date of July 16, 2012, is consistent with the potential transitional period provided in section 723(c) of the Dodd-Frank Act regarding former CEA section 2(h) and section 734(c) of the Dodd-Frank Act regarding former CEA section 5d (i.e., for ‘‘not longer than a 1-year period’’ following the general effective date of title VII) . 19 76 FR at 42513. 20 The Commission recently promulgated a rule pursuant to section 723(c)(3) of the Dodd-Frank Act that, effective December 31, 2011, will repeal the existing part 35 relief and replace it with new § 35.1 of the Commission’s regulations. See Agricultural Swaps, 76 FR 49291 (Aug. 10, 2011). Rule 35.1 provides, in pertinent part, that ‘‘agricultural swaps may be transacted subject to all provisions of the CEA, and any Commission rule, regulation or order thereunder, that is otherwise applicable to swaps. E:\FR\FM\25OCP1.SGM Continued 25OCP1 66002 Federal Register / Vol. 76, No. 206 / Tuesday, October 25, 2011 / Proposed Rules erowe on DSK2VPTVN1PROD with PROPOSALS exemptive relief currently available for these transactions continues to be available after December 31, 2011, the Commission proposes to amend the July 14 Order to incorporate by reference the part 35 relief available as of December 31, 2011. Whereas the relief provided in part two of the July 14 Order was (and would remain) limited to transactions in excluded or exempt commodities, this proposed amendment also would include, beginning on January 1, 2012, transactions in agricultural commodities that fully meet the conditions in part 35 as in effect on December 31, 2011.21 The Commission proposes that this further amendment to the July 14 Order is necessary to ensure that the same scope of the exemptive relief available before December 31, 2011 is available to all swaps and extends through July 16, 2012, at the latest. In proposing these amendments, the Commission continues to strive to ensure that current practices will not be unduly disrupted during the transition to the new regulatory regime. As stated above, the proposed July 16, 2012 date coincides with the potential transitional period provided in sections 723(c) and 734(c) of the Dodd-Frank Act.22 Further, should the Commission deem it appropriate to terminate or extend any exemptive relief under part two of the July 14 Order, the Commission will be in a better position to comprehensively evaluate and consider any tailored exemption at that time. The Commission believes it is in the interest of the public and market participants to continue to provide regulatory certainty regarding the applicability of the Dodd-Frank Act. There have been no disruptions to the market resulting from the July 14 Order, nor has the Commission received any request for additional relief beyond that provided for in the July 14 Order. Accordingly, the Commission believes the scope of the existing relief is appropriate and is proposing here only [It] also clarifies that by issuing a rule allowing agricultural swaps to transact subject to the laws and rules applicable to all other swaps, the Commission is allowing agricultural swaps to transact on [designated contract markets (‘‘DCMs’’), swap execution facilities (‘‘SEFs’’)], or otherwise to the same extent that all other swaps are allowed to trade on DCMs, SEFs, or otherwise.’’ Id. at 49296. 21 The Commission also is clarifying that, by operation of new § 35.1 of the Commission’s regulations, the Commission’s statement in adopting the July 14 Order that a DCM may list and trade swaps ‘‘under the DCM’s rules related to futures contracts, without exemptive relief,’’ 76 FR at 42518, would apply, as of January 1, 2012, to swaps in agricultural commodities. 22 See Order Regarding the Treatment of Petitions Seeking Grandfather Relief for Exempt Commercial Markets and Exempt Boards of Trade, 75 FR 56513, Sept. 16, 2010. VerDate Mar<15>2010 15:38 Oct 24, 2011 Jkt 226001 to amend that relief in the aforementioned ways. The Commission notes, for example, that Category 1 provisions—i.e., those for which a rulemaking is required—will continue to be addressed outside the scope of the July 14 Order. Further, where appropriate, the Commission expects to phase-in compliance with its final rules over a period of time as part of the Commission’s ongoing commitment to ensuring an orderly transition to the new regulatory regime. III. Request for Comment The Commission requests and will only consider comments on the amendments to the July 14 Order that are proposed in this notice of proposed amendment. IV. Related Matters a. Paperwork Reduction Act The Paperwork Reduction Act (‘‘PRA’’) 23 imposes certain requirements on Federal agencies (including the Commission) in connection with conducting or sponsoring any collection of information as defined by the PRA. These proposed amendments, if approved, would not require a new collection of information from any persons or entities that would be subject to the proposed amendments. b. Cost-Benefit Considerations Section 15(a) of the CEA 24 requires the Commission to consider the costs and benefits of its action before issuing an order under the CEA. CEA section 15(a) further specifies that costs and benefits shall be evaluated in light of five broad areas of market and public concern: (1) Protection of market participants and the public; (2) efficiency, competitiveness, and financial integrity of futures markets; (3) price discovery; (4) sound risk management practices; and (5) other public interest considerations. The Commission may 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 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. This notice of proposed amendment proposes to amend the existing July 14 Order by extending the currently available temporary relief to no later than July 16, 2012, and by accounting V. Proposed Amendments to the July 14 Order The Commission proposes the following amendments to the July 14 Order: The Commission, to provide for the orderly implementation of the requirements of Title VII of the DoddFrank Act, pursuant to sections 4(c) and 4c(b) of the CEA and section 712(f) of the Dodd-Frank Act, hereby issues this Order consistent with the determinations set forth above, which are incorporated in this Final Order, as amended, by reference, and: (1) Exempts, subject to the conditions set forth in paragraph (3), all agreements, contracts, and transactions, and any person or entity offering, entering into, or rendering advice or rendering other services with respect to, any such agreement, contract, or transaction, from the provisions of the CEA, as added or amended by the DoddFrank Act, that reference one or more of the terms regarding entities or instruments subject to further definition under sections 712(d) and 721(c) of the Dodd-Frank Act, which provisions are listed in Category 2 of the Appendix to this Order; provided, however, that the foregoing exemption: a. Applies only with respect to those requirements or portions of such provisions that specifically relate to such referenced terms; and b. With respect to any such provision of the CEA, shall expire upon the earlier of: (i) The effective date of the applicable final rule further defining the relevant term referenced in the provision; or (ii) July 16, 2012. (2) Exempts, subject to the conditions set forth in paragraph (3), all agreements, contracts, and transactions, and any person or entity offering, entering into, or rendering advice or rendering other services with respect to, any such agreement, contract, or transaction, from the provisions of the CEA, if the agreement, contract, or transaction complies with part 35 of the Commission’s regulations as in effect as of December 31, 2011, including any 23 44 24 7 PO 00000 U.S.C. 3507(d). U.S.C. 19(a). for the repeal of part 35 of the Commission’s regulations. As such, and because this proposal does not change the nature or limit the scope of relief granted in the July 14 Order, the costs and benefits set forth in the July 14 Order may be incorporated by reference in this proposal.25 Nevertheless, the Commission seeks comment on whether these proposed amendments would impose any costs or confer any benefits beyond the July 14 Order. Frm 00027 Fmt 4702 25 76 Sfmt 4702 E:\FR\FM\25OCP1.SGM FR 42521. 25OCP1 erowe on DSK2VPTVN1PROD with PROPOSALS Federal Register / Vol. 76, No. 206 / Tuesday, October 25, 2011 / Proposed Rules agreement, contract, or transaction in an exempt or excluded (but not agricultural) commodity that complies with such provisions then in effect notwithstanding that: a. The agreement, contract, or transaction may be executed on a multilateral transaction execution facility; b. The agreement, contract, or transaction may be cleared; c. Persons offering or entering into the agreement, contract or transaction may not be eligible swap participants, provided that all parties are eligible contract participants as defined in the CEA prior to the date of enactment of the Dodd-Frank Act; d. The agreement, contract, or transaction may be part of a fungible class of agreements that are standardized as to their material economic terms; and/or e. No more than one of the parties to the agreement, contract, or transaction is entering into the agreement, contract, or transaction in conjunction with its line of business, but is neither an eligible contract participant nor an eligible swap participant, and the agreement, contract, or transaction was not and is not marketed to the public; Provided, however, that: (i) Such agreements, contracts, and transactions (and persons offering, entering into, or rendering advice or rendering other services with respect to, any such agreement, contract, or transaction) fall within the scope of any of the existing CEA sections 2(d), 2(e), 2(g), 2(h), and 5d provisions or the line of business provision as in effect prior to July 16, 2011; and (ii) the foregoing exemption shall expire upon the earlier of: (I) July 16, 2012; or (II) such other compliance date as may be determined by the Commission. (3) Provides that the foregoing exemptions in paragraphs (1) and (2) above shall not: a. Limit in any way the Commission’s authority with respect to any person, entity, or transaction pursuant to CEA sections 2(a)(1)(B), 4b, 4o, 6(c), 6(d), 6c, 8(a), 9(a)(2), or 13, or the regulations of the Commission promulgated pursuant to such authorities, including regulations pursuant to CEA section 4c(b) proscribing fraud; b. Apply to any provision of the Dodd-Frank Act or the CEA that became effective prior to July 16, 2011; c. Affect any effective or compliance date set forth in any rulemaking issued by the Commission to implement provisions of the Dodd-Frank Act; d. Limit in any way the Commission’s authority under section 712(f) of the Dodd-Frank Act to issue rules, orders, or VerDate Mar<15>2010 15:38 Oct 24, 2011 Jkt 226001 exemptions prior to the effective date of any provision of the Dodd-Frank Act and the CEA, in order to prepare for the effective date of such provision, provided that such rule, order, or exemption shall not become effective prior to the effective date of the provision; and e. Affect the applicability of any provision of the CEA to futures contracts or options on futures contracts, or to cash markets. In its discretion, the Commission may condition, suspend, terminate, or otherwise modify this Order, as appropriate, on its own motion. This Final Order, as amended, shall be effective immediately. Issued in Washington, DC, on October 18, 2011 by the Commission. David A. Stawick, Secretary of the Commission. Note: The following appendices will not appear in the Code of Federal Regulations. Appendices to Notice of Proposed Amendment to Effective Date for Swap Regulation—Commission Voting Summary and Statements of Commissioners Appendix 1—Commission Voting Summary On this matter, Chairman Gensler and Commissioners Dunn, Sommers, Chilton and O’Malia voted in the affirmative; no Commissioner voted in the negative. Appendix 2—Statement of Chairman Gary Gensler I support the proposed amendment to the July 14th Exemptive Order regarding the effective dates of certain Dodd-Frank Act provisions. The July 14th order provided relief until December 31, 2011, or when the definitional rulemakings become effective, whichever is sooner, from certain provisions that would otherwise apply to swaps or swap dealers on July 16. This includes provisions that do not directly rely on a rule to be promulgated, but do refer to terms that must be further defined by the CFTC and SEC, such as ‘‘swap’’ and ‘‘swap dealer.’’ Commission staff is working very closely with Securities and Exchange Commission (SEC) staff on rules relating to entity and product definitions. Staff is making great progress, and we anticipate taking up the further definition of entities in the near term and product definitions shortly thereafter. As these definitional rulemakings have yet to be finalized or become effective, today’s proposed amendment would provide relief through July 16, 2012, or when the definitional rulemakings become effective— whichever is sooner. The order also provided relief through no later than December 31, 2011, from certain PO 00000 Frm 00028 Fmt 4702 Sfmt 4702 66003 CEA requirements that may apply as the result of the repeal, effective on July 16, 2011, of CEA sections 2(d), 2(e), 2(g), 2(h) and 5d. The proposed amendment also extends this relief to July 16, 2012, or until a date the Commission may otherwise determine with respect to a particular requirement under the CEA. In addition, today’s proposed amendment also tailors the July 14th relief in light of the Commission’s actions finalizing the agricultural swap rules. Appendix 2—Statement of Commissioner Scott O’Malia As Yogi Berra famously proclaimed: ‘‘It is ´ ` deja vu all over again.’’ Yogi perfectly encapsulates my feelings today. We find ourselves again voting on a proposed order aimed at providing legal certainty in the form ‘‘temporary exemptive relief’’ for swap market participants that extends the soon to expire relief found in the Commission’s July 14, 2011 exemptive order (‘‘July 14 Order’’). This temporary relief is necessary because: (1) The Commission has not yet put forth final rules defining such key terms such as ‘‘swap’’ and ‘‘swap dealer’’; and (2) certain exemptions and exclusions for transactions in exempt and excluded commodities currently relied upon by market participants will be repealed effective December 31, 2011. The proposal states: ‘‘[t]he Commission proposes that this further amendment to the July 14 Order is necessary to ensure that the same scope of the exemptive relief available before December 31, 2011 is available to all swaps and extends through July 16, 2012, at the latest.’’ Unfortunately, we are once again facing an exemptive order that suffers the same faults that the July 14 Order suffered, namely: (1) It again includes an arbitrary sunset provision that will cut the transition period short and so will likely not provide necessary ‘‘relief’’ to market participants, and (2) it demonstrates the lack of ordering of rulemakings combined with the failure to put forth an implementation schedule. We now need to broaden the scope of the July 14 Order because the exemptive rules contained in part 35 will no longer be available to market participants after December 31, 2011 even though the replacement regulatory regime is not in place yet.26 Part 35 is more commonly known as the swap exemption and is relied upon primarily by entities engaging in agricultural swaps. The Commission repealed part 35 in order to ensure that it is not used by individuals and entities who had relied on Sections 2(d), (g) and (h) of the Commodity Exchange Act (‘‘CEA’’) as an end run around the new statutory and regulatory requirements. I support the proposal, as I did last time, because it is important for the Commission to provide market participants and the public with the form of relief the exemptive order is contemplating, but I would have preferred 26 The Commission recently promulgated a rule pursuant to section 723(c)(3) of the Dodd-Frank Act that, effective December 31, 2011, will repeal the existing part 35 relief and replace it with new § 35.1 of the Commission’s regulations. See Agricultural Swaps, 76 FR 49291 (Aug. 10, 2011). E:\FR\FM\25OCP1.SGM 25OCP1 66004 Federal Register / Vol. 76, No. 206 / Tuesday, October 25, 2011 / Proposed Rules that this rule, like its predecessor, would not select an arbitrary end date. Mr. Chairman, I again renew my call for a comprehensive rulemaking schedule and implementation plan, that provides greater insight on reporting requirements to swap data repositories as well as separate rulemaking on real time and block rules. The Commission must also provide some certainty on the clearing and trading mandate including clarification of ‘‘made available for trading’’ and guidance on swap clearing. [FR Doc. 2011–27535 Filed 10–24–11; 8:45 am] BILLING CODE 6351–01–P INTERNATIONAL TRADE COMMISSION 19 CFR Chapter II Preliminary Plan for Retrospective Analysis of Existing Rules International Trade Commission. ACTION: Notice of Availability; Request for Comments. AGENCY: The United States International Trade Commission (Commission) is developing a plan for the retrospective analysis of its existing regulations. The Commission is seeking public comment on a preliminary version of such a plan. DATES: Comment Date: To be assured of consideration, written comments must be received by 5:15 p.m. on November 25, 2011. ADDRESSES: You may submit comments, identified by docket number MISC–038 by any of the following methods: Federal eRulemaking Portal: https:// www.regulations.gov. Follow the instructions for submitting comments. Agency Web Site: https:// www.usitc.gov. Follow the instructions for submitting comments. See https:// www.usitc.gov/secretary/edis.htm. Mail: For paper submission. U.S. International Trade Commission, 500 E Street, SW., Room 112, Washington, DC 20436. Hand Delivery/Courier: U.S. International Trade Commission, 500 E Street, SW., Room 112, Washington, DC 20436. From the hours of 8:45 a.m. to 5:15 p.m. For detailed instructions on submitting comments, see the ‘‘Public Participation’’ heading of the SUPPLEMENTARY INFORMATION section of this document. FOR FURTHER INFORMATION CONTACT: Peter L. Sultan, Office of the General Counsel, United States International Trade Commission, telephone 202–205– 3094, e-mail Peter.Sultan@usitc.gov. Hearing-impaired individuals are erowe on DSK2VPTVN1PROD with PROPOSALS SUMMARY: VerDate Mar<15>2010 15:38 Oct 24, 2011 Jkt 226001 advised that information on this matter can be obtained by contacting the Commission’s TDD terminal at 202– 205–1810. General information concerning the Commission may also be obtained by accessing its Internet server (https://www.usitc.gov). Executive Order 13579 of July 11, 2011, calls on each independent regulatory agency to develop and release to the public, within 120 days of the date of the Executive Order, a plan under which the agency will periodically review its significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective or less burdensome in achieving regulatory objectives. The following is the Commission’s Preliminary Plan for Retrospective Analysis of Existing Rules. The Commission welcomes comments from the public concerning this plan. SUPPLEMENTARY INFORMATION: Public Participation Instructions: All submissions received must include the agency name and the docket number (MISC–038) for this proceeding. All comments received will be posted without change to https:// www.usitc.gov, including any personal information provided. For paper copies, a signed original and 14 copies of each set of comments, along with a cover letter stating the nature of the commenter’s interest in the proposed rulemaking, should be submitted to James Holbein, Secretary, U.S. International Trade Commission, 500 E Street, SW., Room 112, Washington, DC 20436. Comments, along with a cover letter, may be submitted electronically to the extent provided by Sec. 201.8 of the Commission’s rules. This rule may refer commenters to the Handbook for Electronic Filing Procedures (see https:// www.usitc.gov/secretary/edis.htm). For those submitting comments by mail, it is advisable to mail comments in advance of the due date since Commission mail will be delayed due to necessary security screening. Docket: For access to the docket to read comments received, go to https:// www.usitc.gov or U.S. International Trade Commission, 500 E Street, SW., Room 112, Washington, DC 20436. PO 00000 Frm 00029 Fmt 4702 Sfmt 4702 United States International Trade Commission Preliminary Plan for Retrospective Analysis of Existing Rules October 18, 2011 I. Executive Summary of Plan Executive Orders 13579 and 13563 recognize the importance of maintaining a consistent culture of retrospective review and analysis throughout the Federal government. Executive Order 13579 calls on each independent regulatory agency to develop and release to the public a plan, consistent with law and reflecting the agency’s resources and regulatory priorities and processes, under which the agency will periodically review its significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective or less burdensome in achieving the regulatory objectives. Pursuant to Executive Order 13579, the U.S. International Trade Commission developed this preliminary plan for retrospective analysis of its regulations. The plan is designed to create a defined method and schedule for identifying and reconsidering certain significant rules that are obsolete, unnecessary, unjustified, excessively burdensome, or counterproductive. Its review processes are intended to facilitate the identification of rules that warrant repeal or modification, or the strengthening, complementing, or modernizing of rules where necessary or appropriate. II. Background The Commission is an independent, quasi-judicial Federal agency with broad investigative responsibilities on matters of trade. It investigates the effects of dumped and subsidized imports on domestic industries, conducts global safeguard investigations, and adjudicates cases involving imports that allegedly infringe intellectual property rights. The Commission also serves as a Federal resource where trade data and other trade policy-related information are gathered and analyzed. The information and analysis are provided to the President, the Office of the United States Trade Representative (USTR), and Congress to facilitate the development of sound and informed U.S. trade policy. The Commission makes most of its information and analysis available to the public to promote understanding of international trade issues. The Commission also maintains the E:\FR\FM\25OCP1.SGM 25OCP1

Agencies

[Federal Register Volume 76, Number 206 (Tuesday, October 25, 2011)]
[Proposed Rules]
[Pages 65999-66004]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-27535]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Chapter 1


Effective Date for Swap Regulation

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed amendment.

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SUMMARY: On July 14, 2011, the Commodity Futures Trading Commission 
(``CFTC'' or the ``Commission'') issued a final order (``July 14 
Order'') that grants temporary exemptive relief from certain provisions 
of the Commodity Exchange Act (``CEA'') that otherwise would have taken 
effect on the general effective date of title VII of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (``the Dodd-Frank 
Act'')--July 16, 2011. The July 14 Order grants temporary relief in two 
parts. The first part addresses those CEA provisions added or amended 
by title VII of the Dodd-Frank Act that reference one or more terms 
regarding entities or instruments that title VII requires be ``further 
defined'' to the extent that requirements or portions of such 
provisions specifically relate to such referenced terms and do not 
require a rulemaking. The second part, which is based on part 35 of the 
Commission's regulations, addresses certain provisions of the CEA that 
may apply to certain agreements, contracts, and transactions in exempt 
or excluded commodities as a result of the repeal of various CEA 
exemptions and exclusions as of the general effective date of July 16, 
2011. This is a notice of a proposed amendment to that July 14 Order, 
76 FR 42508 (July 19, 2011), that would modify the temporary exemptive 
relief provided therein by extending the potential latest expiration 
date of the July 14 Order; and adding provisions to account for the 
repeal and replacement (as of December 31, 2011) of part 35 of the 
Commission's regulations. Only comments pertaining to these proposed 
amendments to the July 14 Order will be considered as part of this 
notice of proposed amendment.

DATES: Submit comments on or before November 25, 2011.

ADDRESSES: Comments may be submitted, referenced as ``Effective Date 
Amendments,'' by any of the following methods:
     Agency Web site, via its Comments Online process at https://comments.cftc.gov. Follow the instructions for submitting comments 
through the Web site.
     Mail: David A. Stawick, Secretary of the Commission, 
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 
Street, NW., Washington, DC 20581.
     Hand Delivery/Courier: Same as mail above.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.

Please submit your comments using only one method.

    All comments must be submitted in English, or if not, accompanied 
by an English translation. Comments will be posted as received to 
https://www.cftc.gov. You should submit only information that you wish 
to make available publicly. If you wish the Commission to consider 
information that may be exempt from disclosure under the Freedom of 
Information Act, a petition for confidential treatment of the exempt 
information may be submitted according to the established procedures in 
Sec.  145.9 of the Commission's regulations, 17 CFR 145.9.
    The Commission reserves the right, but shall have no obligation, to 
review, pre-screen, filter, redact, refuse or remove any or all of your 
submission from https://www.cftc.gov that it may deem to be 
inappropriate for publication, such as obscene language. All 
submissions that have been redacted or removed that contain comments on 
the merits of the rulemaking will be retained in the public comment 
file and will be considered as required under the Administrative 
Procedure Act and other applicable laws, and may be accessible under 
the Freedom of Information Act.

FOR FURTHER INFORMATION CONTACT: Terry Arbit, Deputy General Counsel, 
202-418-5357, tarbit@cftc.gov, or Mark D. Higgins, Counsel, 202-418-
5864, mhiggins@cftc.gov, Office of the General Counsel, Commodity 
Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, 
NW., Washington, DC 20581.

SUPPLEMENTARY INFORMATION: 

I. Background

    On July 21, 2010, President Obama signed the Dodd-Frank Act into 
law.\1\ Title VII of the Dodd-Frank Act amends the CEA \2\ to establish 
a comprehensive new regulatory framework for swaps. The legislation was 
enacted to reduce risk, increase transparency, and promote market 
integrity within the financial system by, among other things: (1) 
Providing for the registration and comprehensive regulation of swap 
dealers and major swap participants; (2) imposing clearing and trade 
execution requirements on standardized derivative products; (3) 
creating robust recordkeeping and real-time reporting regimes; and (4) 
enhancing the rulemaking and enforcement authorities of the Commission 
with respect to, among others, all registered entities and 
intermediaries subject to the Commission's oversight.\3\
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    \1\ See Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Public Law 111-203, 124 Stat. 1376 (2010).
    \2\ 7 U.S.C. 1 et seq.
    \3\ Title VII also includes amendments to the federal securities 
laws to establish a similar regulatory framework for security-based 
swaps under the authority of the Securities and Exchange Commission 
(``SEC'').
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    Section 754 of the Dodd-Frank Act states that, unless otherwise 
provided, the provisions of subtitle A of title VII of the Dodd-Frank 
Act \4\ ``shall take

[[Page 66000]]

effect on the later of 360 days after the date of the enactment of this 
subtitle or, to the extent a provision of this subtitle requires a 
rulemaking, not less than 60 days after publication of the final rule 
or regulation implementing such provision of this subtitle.'' Thus, the 
general effective date for provisions of title VII that do not require 
a rulemaking was July 16, 2011. This includes the provisions that 
repealed several provisions of the CEA as in effect prior to the Dodd-
Frank Act that excluded or exempted, in whole or in part, certain 
transactions from Commission oversight.\5\
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    \4\ All of the amendments to the CEA in title VII are contained 
in subtitle A. Accordingly, for convenience, references to ``title 
VII'' in this notice of proposed amendment shall refer only to 
subtitle A of title VII.
    \5\ These exclusions and exemptions were contained in former CEA 
sections 2(d), 2(e), 2(g), 2(h), and 5d, 7 U.S.C. 2(d), 2(e), 2(g), 
2(h), and 7a-3.
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    Section 712(d)(1) of the Dodd-Frank Act requires the Commission and 
the SEC to undertake a joint rulemaking to ``further define'' certain 
terms used in title VII, including the terms ``swap,'' ``swap dealer,'' 
``major swap participant,'' and ``eligible contract participant.''\6\ 
Section 721(c) requires the Commission to adopt a rule to ``further 
define'' the terms ``swap,'' ``swap dealer,'' ``major swap 
participant,'' and ``eligible contract participant'' to prevent evasion 
of statutory and regulatory obligations.\7\ The Commission has issued 
two notices of proposed rulemaking that address these further 
definitions.\8\
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    \6\ Section 712(d)(1) provides: ``Notwithstanding any other 
provision of this title and subsections (b) and (c), the Commodity 
Futures Trading Commission and the Securities and Exchange 
Commission, in consultation with the Board of Governors [of the 
Federal Reserve System], shall further define the terms `swap', 
`security-based swap', `swap dealer', `security-based swap dealer', 
`major swap participant', `major security-based swap participant', 
and `security-based swap agreement' in section 1a(47)(A)(v) of the 
Commodity Exchange Act (7 U.S.C. 1a(47)(A)(v)) and section 3(a)(78) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(78)).''
    \7\ Section 721(c) provides: ``To include transactions and 
entities that have been structured to evade this subtitle (or an 
amendment made by this subtitle), the Commodity Futures Trading 
Commission shall adopt a rule to further define the terms `swap', 
`swap dealer', `major swap participant', and `eligible contract 
participant'.''
    \8\ See Further Definition of ``Swap Dealer,'' ``Security-Based 
Swap Dealer,'' ``Major Swap Participant,'' ``Major Security-Based 
Swap Participant'' and ``Eligible Contract Participant,'' 75 FR 
80174, Dec. 21, 2010 and Further Definition of ``Swap,'' ``Security-
Based Swap,'' and ``Security-Based Swap Agreement''; Mixed Swaps; 
Security-Based Swap Agreement Recordkeeping, 76 FR 29818, May 23, 
2011.
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    The Commission's final rulemakings further defining the terms in 
sections 712(d) and 721(c) were not expected to be in effect as of July 
16, 2011 (i.e., the general effective date set forth in section 754 of 
the Dodd-Frank Act). Accordingly, the Commission on July 14, 2011 
exercised its exemptive authority under CEA section 4(c) \9\ and its 
authority under section 712(f) of the Dodd-Frank Act by issuing the 
July 14 Order.\10\ In so doing, the Commission sought to address 
concerns that had been raised about the applicability of various 
regulatory requirements to certain agreements, contracts, and 
transactions after July 16, 2011, and thereby ensure that current 
practices will not be unduly disrupted during the transition to the new 
regulatory regime.\11\
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    \9\ 7 U.S.C. 6(c).
    \10\ Effective Date for Swap Regulation, 76 FR 42508 (issued and 
made effective by the Commission on July 14, 2011; published in the 
Federal Register on July 19, 2011).
    \11\ Concurrent with the July 14 Order, the Commission's 
Division of Clearing and Intermediary Oversight and the Division of 
Market Oversight (together ``the Divisions'') identified certain 
provisions of the Dodd-Frank Act and CEA as amended that would take 
effect on July 16, 2011, but that may not be eligible for the 
exemptive relief provided by the Commission in its July 14 Order--
specifically, the amendments made to the CEA by Dodd-Frank Act 
sections 724(c), 725(a), and 731. On July 14, 2011, the Divisions 
issued Staff No-Action Relief addressing the application of these 
provisions after July 16, 2011. Available at: https://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/noactionletter071411.pdf (last visited Sept. 26, 2011). The 
Commission anticipates that the Divisions will extend and conform 
this no-action relief to any final amendment to the July 14 Order 
that may result from this proposal.
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Description of Existing Relief

    The July 14 Order groups the relevant provisions of the Dodd-Frank 
Act into four categories and provides temporary exemptive relief, set 
to expire no later than December 31, 2011, with respect to Categories 2 
and 3. A summary of the four categories of provisions follows.
    Category 1 covers statutory provisions which by their express terms 
require rulemaking to implement. Because, under section 754 of the 
Dodd-Frank Act, these provisions do not become effective until at least 
60 days after the final rule is published, no exemptive relief from the 
general effective date is necessary. Category 1 provisions include, 
among others, the further definitions of terms regarding swap entities 
or instruments as required by the Dodd-Frank Act (such as the terms 
``swap,'' ``swap dealer,'' ``major swap participant,'' or ``eligible 
contract participant''). Category 1 also includes, among others: (1) 
Registration, capital and margin requirements, and business conduct 
standards for swap dealers and major swap participants; (2) provisions 
prohibiting agricultural swaps except pursuant to CFTC rules; (3) rules 
regarding swap execution facilities; and (4) various swap data 
recordkeeping and reporting requirements. A complete list of the 
Category 1 provisions is included in the appendix to the July 14 Order.
    The first part of the relief provided for in the July 14 Order 
reaches those Dodd-Frank Act provisions (``Category 2 provisions'') 
that are self-effectuating (i.e., do not require a rulemaking) and that 
reference one or more of the terms for which the Commission and SEC are 
required to provide further definition, including ``swap,'' ``swap 
dealer,'' ``major swap participant,'' ``eligible contract 
participant,'' and ``security-based swap agreement'' (collectively, the 
``referenced terms''). These Category 2 provisions include, for 
example, the trade execution requirement of CEA section 2(h)(8), as 
amended by Dodd-Frank Act section 723. A complete list of the Category 
2 provisions is included in the appendix to the July 14 Order. Because 
the Category 2 provisions would have taken effect on July 16, 2011 
pursuant to section 754, the Commission granted temporary relief from 
those provisions, but only to the extent that the requirements in such 
provisions specifically relate to a referenced term that is not yet 
further defined. Thus, if a Category 2 provision also applies to 
futures or options on futures, the provision took effect on July 16 
with respect to futures or options on futures. The exemption for 
Category 2 provisions expires on the earlier of: (1) The effective date 
of the applicable final rule further defining the relevant term; or (2) 
December 31, 2011.
    In part two of the July 14 Order, the Commission provides temporary 
exemptive relief from the provisions of the CEA that may apply to 
certain agreements, contracts, and transactions in exempt or excluded 
commodities (generally, financial, energy and metals commodities) as a 
result of the repeal of the CEA exemptions and exclusions in former CEA 
sections 2(d), 2(e), 2(g), 2(h), and 5d as of July 16, 2011 pursuant to 
sections 723(a)(1) and 734(a) of the Dodd-Frank Act (the ``Category 3 
provisions''). As explained in the July 14 Order, this relief is based 
on the Commission's existing ``part 35'' exemptive rules.\12\
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    \12\ 76 FR at 42514. The July 14 Order did not extend to 
agreements, contracts, or transactions that fully met the conditions 
of part 35, since in such circumstances further relief was 
unnecessary.
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    Part 35 originally was promulgated in 1993 pursuant to, among 
others, the Commission's general exemptive authority in CEA section 
4(c) and its plenary options authority under section 4c(b),\13\ and 
provides a broad-based exemption from the CEA for ``swap

[[Page 66001]]

agreements'' in any commodity. Specifically, part 35 exempts ``swap 
agreements,'' as defined therein, from most of the provisions of the 
CEA if: (1) They are entered into by ``eligible swap participants'' 
(``ESPs''); \14\ (2) they are not part of a fungible class of 
agreements standardized as to their material economic terms; (3) the 
creditworthiness of any party having an actual or potential obligation 
under the swap agreement would be a material consideration in entering 
into or determining the terms of the swap agreement, including pricing, 
cost, or credit enhancement terms; and (4) they are not entered into or 
traded on a multilateral transaction execution facility.
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    \13\ 7 U.S.C. 6c(b).
    \14\ As noted in the July 14 Order, the parties covered under 
the ESP definition, while very broad, are not coextensive with those 
covered by the terms ``eligible commercial entity'' or ``eligible 
contract participant.'' Therefore, it is possible that a small 
segment of persons or entities that are currently relying on one or 
more of the CEA exclusions or exemptions cited above might not 
qualify as an ESP and consequently would not be eligible for part 
35. 76 FR at 42511, n. 40.
---------------------------------------------------------------------------

    Under part two of the relief provided for in the July 14 Order, the 
Commission stated that transactions in exempt or excluded commodities 
(and persons offering, entering into, or rendering advice or rendering 
other services with respect to such transactions) are temporarily 
exempt from provisions of the CEA that may apply to such transactions 
if such transactions comply with part 35, notwithstanding that: (1) The 
transaction may be executed on a multilateral transaction execution 
facility; (2) the transaction may be cleared; (3) persons offering or 
entering into the transaction may be eligible contract participants as 
defined in the CEA (prior to the enactment of the Dodd-Frank Act); (4) 
the transaction may be part of a fungible class of agreements that are 
standardized as to their material economic terms; and/or (5) no more 
than one of the parties to the transaction is entering into the 
transaction in conjunction with its line of business, but is neither an 
eligible contract participant nor an ESP, and the transaction was not 
and is not marketed to the public.\15\
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    \15\ 76 FR at 42514. With respect to commodity options, the 
Commission made clear that options identified in the swap agreement 
definition in paragraph (b)(1)(i) of Sec.  35.1 of the Commission's 
regulations and any options captured by the concluding catch-all 
language in that paragraph, as well as any options described in 
paragraphs (b)(1)(ii) and/or (iii) of Sec.  35.1, involving excluded 
or exempt commodities are within the scope of the July 14 Order. 76 
FR at 42514-15.
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    Thus, for certain transactions, the July 14 Order provides relief 
notwithstanding that the transaction may not satisfy certain part 35 
requirements (e.g., cleared, executed on a multilateral trade execution 
facility, entered into by certain persons that are not eligible 
contract participants, etc.). The Commission stated in the July 14 
Order that this relief is limited to transactions in exempt and 
excluded commodities, and does not extend to transactions in 
agricultural commodities, because transactions in agricultural 
commodities were not covered by the applicable statutory exclusions and 
exemptions in effect prior to July 16, 2011.\16\ The exemption in part 
two of the July 14 Order expires on the earlier of: (1) The repeal, 
withdrawal or replacement of part 35; or (2) December 31, 2011.
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    \16\ The Commission also stated, though, that because part 35 
remained in effect at the time of the July 14 Order, market 
participants could continue to rely on part 35 with respect to swaps 
(other than commodity options) on enumerated agricultural 
commodities as defined in CEA section 1a(4) or Sec.  32.2 of the 
Commission's regulations, as well as swaps and commodity options on 
non-enumerated agricultural commodities, to the extent these 
transactions fully comply with part 35. Under the July 14 Order, 
market participants also may continue to rely on part 32 for options 
on enumerated agricultural commodities to the extent these 
transactions are conducted in accordance with Sec.  32.13(g) of the 
Commission's regulations. Rule 32.13(g) permits off-exchange options 
between producers, processors, commercial users or merchants of the 
commodity or its products or by-products that have a net worth of at 
least $10 million.
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    Category 4 contains those Dodd-Frank Act provisions for which the 
Commission determined not to issue relief, and which therefore went 
into effect on July 16, 2011. A complete list of the Category 4 
provisions is included in the appendix to the July 14 Order.
    The temporary exemptions issued in the July 14 Order are subject to 
several conditions. These conditions provide that the July 14 Order 
shall not: (1) Limit in any way the Commission's anti-fraud or anti-
manipulation authority under the CEA; (2) apply to any provision of the 
Dodd-Frank Act or the CEA that became effective prior to July 16, 2011; 
(3) affect any effective date or compliance date set forth in any 
rulemaking issued by the Commission to implement provisions of the 
Dodd-Frank Act; (4) limit the Commission's authority under Dodd-Frank 
Act section 712(f) to issue rules, orders, or exemptions prior to the 
effective date of any provision of the Dodd-Frank Act and the CEA, in 
order to prepare for such effective date; and (5) affect the 
applicability of any provision of the CEA to futures contracts or 
options on futures contracts, or to cash markets.\17\
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    \17\ 76 FR at 42522.
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II. Discussion of the Proposed Amendments to the July 14 Order

    The Commission is proposing to amend the July 14 Order in two ways. 
First, the Commission is proposing to amend the July 14 Order to extend 
the potential latest expiry dates. With respect to provisions covered 
in the first part of the relief in the July 14 Order, the Commission is 
proposing that the temporary exemptive relief expire upon the earlier 
of: (1) The effective date of the applicable final rule further 
defining the relevant referenced term; or (2) July 16, 2012.\18\ This 
amendment addresses the potential that, as of December 31, 2011, the 
CFTC-SEC joint rulemakings ``further defining'' the referenced terms 
will not yet be effective. The Commission also is proposing to amend 
the July 14 Order to extend the expiry date of the second part of the 
relief in the July 14 Order until the earlier of: (1) July 16, 2012; or 
(2) such other compliance date as may be determined by the Commission. 
For the same reason stated by the Commission with respect to the second 
part of the relief provided in the July 14 Order, the proposed 
extension of this exemptive relief ``will allow markets and market 
participants to continue to operate under the regulatory regime as in 
effect prior to July 16, 2011, but subject to various implementing 
regulations that the Commission promulgates and applies to the subject 
transactions, market participants, or markets.'' \19\
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    \18\ The date of July 16, 2012, is consistent with the potential 
transitional period provided in section 723(c) of the Dodd-Frank Act 
regarding former CEA section 2(h) and section 734(c) of the Dodd-
Frank Act regarding former CEA section 5d (i.e., for ``not longer 
than a 1-year period'' following the general effective date of title 
VII) .
    \19\ 76 FR at 42513.
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    Second, the Commission is proposing to include within the second 
part of the relief any agreement, contract or transaction that fully 
meets the conditions in part 35 as in effect on December 31, 2011. This 
amendment addresses the fact that such transactions, which were not 
included within the scope of the July 14 Order because the exemptive 
rules in part 35 covered them at that time, now require temporary 
relief because part 35 will no longer be available after December 31, 
2011.\20\ Accordingly, to ensure that the

[[Page 66002]]

exemptive relief currently available for these transactions continues 
to be available after December 31, 2011, the Commission proposes to 
amend the July 14 Order to incorporate by reference the part 35 relief 
available as of December 31, 2011. Whereas the relief provided in part 
two of the July 14 Order was (and would remain) limited to transactions 
in excluded or exempt commodities, this proposed amendment also would 
include, beginning on January 1, 2012, transactions in agricultural 
commodities that fully meet the conditions in part 35 as in effect on 
December 31, 2011.\21\ The Commission proposes that this further 
amendment to the July 14 Order is necessary to ensure that the same 
scope of the exemptive relief available before December 31, 2011 is 
available to all swaps and extends through July 16, 2012, at the 
latest.
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    \20\ The Commission recently promulgated a rule pursuant to 
section 723(c)(3) of the Dodd-Frank Act that, effective December 31, 
2011, will repeal the existing part 35 relief and replace it with 
new Sec.  35.1 of the Commission's regulations. See Agricultural 
Swaps, 76 FR 49291 (Aug. 10, 2011). Rule 35.1 provides, in pertinent 
part, that ``agricultural swaps may be transacted subject to all 
provisions of the CEA, and any Commission rule, regulation or order 
thereunder, that is otherwise applicable to swaps. [It] also 
clarifies that by issuing a rule allowing agricultural swaps to 
transact subject to the laws and rules applicable to all other 
swaps, the Commission is allowing agricultural swaps to transact on 
[designated contract markets (``DCMs''), swap execution facilities 
(``SEFs'')], or otherwise to the same extent that all other swaps 
are allowed to trade on DCMs, SEFs, or otherwise.'' Id. at 49296.
    \21\ The Commission also is clarifying that, by operation of new 
Sec.  35.1 of the Commission's regulations, the Commission's 
statement in adopting the July 14 Order that a DCM may list and 
trade swaps ``under the DCM's rules related to futures contracts, 
without exemptive relief,'' 76 FR at 42518, would apply, as of 
January 1, 2012, to swaps in agricultural commodities.
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    In proposing these amendments, the Commission continues to strive 
to ensure that current practices will not be unduly disrupted during 
the transition to the new regulatory regime. As stated above, the 
proposed July 16, 2012 date coincides with the potential transitional 
period provided in sections 723(c) and 734(c) of the Dodd-Frank 
Act.\22\ Further, should the Commission deem it appropriate to 
terminate or extend any exemptive relief under part two of the July 14 
Order, the Commission will be in a better position to comprehensively 
evaluate and consider any tailored exemption at that time.
---------------------------------------------------------------------------

    \22\ See Order Regarding the Treatment of Petitions Seeking 
Grandfather Relief for Exempt Commercial Markets and Exempt Boards 
of Trade, 75 FR 56513, Sept. 16, 2010.
---------------------------------------------------------------------------

    The Commission believes it is in the interest of the public and 
market participants to continue to provide regulatory certainty 
regarding the applicability of the Dodd-Frank Act. There have been no 
disruptions to the market resulting from the July 14 Order, nor has the 
Commission received any request for additional relief beyond that 
provided for in the July 14 Order. Accordingly, the Commission believes 
the scope of the existing relief is appropriate and is proposing here 
only to amend that relief in the aforementioned ways. The Commission 
notes, for example, that Category 1 provisions--i.e., those for which a 
rulemaking is required--will continue to be addressed outside the scope 
of the July 14 Order. Further, where appropriate, the Commission 
expects to phase-in compliance with its final rules over a period of 
time as part of the Commission's ongoing commitment to ensuring an 
orderly transition to the new regulatory regime.

III. Request for Comment

    The Commission requests and will only consider comments on the 
amendments to the July 14 Order that are proposed in this notice of 
proposed amendment.

IV. Related Matters

a. Paperwork Reduction Act

    The Paperwork Reduction Act (``PRA'') \23\ imposes certain 
requirements on Federal agencies (including the Commission) in 
connection with conducting or sponsoring any collection of information 
as defined by the PRA. These proposed amendments, if approved, would 
not require a new collection of information from any persons or 
entities that would be subject to the proposed amendments.
---------------------------------------------------------------------------

    \23\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

b. Cost-Benefit Considerations

    Section 15(a) of the CEA \24\ requires the Commission to consider 
the costs and benefits of its action before issuing an order under the 
CEA. CEA section 15(a) further specifies that costs and benefits shall 
be evaluated in light of five broad areas of market and public concern: 
(1) Protection of market participants and the public; (2) efficiency, 
competitiveness, and financial integrity of futures markets; (3) price 
discovery; (4) sound risk management practices; and (5) other public 
interest considerations. The Commission may 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 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.
---------------------------------------------------------------------------

    \24\ 7 U.S.C. 19(a).
---------------------------------------------------------------------------

    This notice of proposed amendment proposes to amend the existing 
July 14 Order by extending the currently available temporary relief to 
no later than July 16, 2012, and by accounting for the repeal of part 
35 of the Commission's regulations. As such, and because this proposal 
does not change the nature or limit the scope of relief granted in the 
July 14 Order, the costs and benefits set forth in the July 14 Order 
may be incorporated by reference in this proposal.\25\ Nevertheless, 
the Commission seeks comment on whether these proposed amendments would 
impose any costs or confer any benefits beyond the July 14 Order.
---------------------------------------------------------------------------

    \25\ 76 FR 42521.
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V. Proposed Amendments to the July 14 Order

    The Commission proposes the following amendments to the July 14 
Order:
    The Commission, to provide for the orderly implementation of the 
requirements of Title VII of the Dodd-Frank Act, pursuant to sections 
4(c) and 4c(b) of the CEA and section 712(f) of the Dodd-Frank Act, 
hereby issues this Order consistent with the determinations set forth 
above, which are incorporated in this Final Order, as amended, by 
reference, and:
    (1) Exempts, subject to the conditions set forth in paragraph (3), 
all agreements, contracts, and transactions, and any person or entity 
offering, entering into, or rendering advice or rendering other 
services with respect to, any such agreement, contract, or transaction, 
from the provisions of the CEA, as added or amended by the Dodd-Frank 
Act, that reference one or more of the terms regarding entities or 
instruments subject to further definition under sections 712(d) and 
721(c) of the Dodd-Frank Act, which provisions are listed in Category 2 
of the Appendix to this Order; provided, however, that the foregoing 
exemption:
    a. Applies only with respect to those requirements or portions of 
such provisions that specifically relate to such referenced terms; and
    b. With respect to any such provision of the CEA, shall expire upon 
the earlier of: (i) The effective date of the applicable final rule 
further defining the relevant term referenced in the provision; or (ii) 
July 16, 2012.
    (2) Exempts, subject to the conditions set forth in paragraph (3), 
all agreements, contracts, and transactions, and any person or entity 
offering, entering into, or rendering advice or rendering other 
services with respect to, any such agreement, contract, or transaction, 
from the provisions of the CEA, if the agreement, contract, or 
transaction complies with part 35 of the Commission's regulations as in 
effect as of December 31, 2011, including any

[[Page 66003]]

agreement, contract, or transaction in an exempt or excluded (but not 
agricultural) commodity that complies with such provisions then in 
effect notwithstanding that:
    a. The agreement, contract, or transaction may be executed on a 
multilateral transaction execution facility;
    b. The agreement, contract, or transaction may be cleared;
    c. Persons offering or entering into the agreement, contract or 
transaction may not be eligible swap participants, provided that all 
parties are eligible contract participants as defined in the CEA prior 
to the date of enactment of the Dodd-Frank Act;
    d. The agreement, contract, or transaction may be part of a 
fungible class of agreements that are standardized as to their material 
economic terms; and/or
    e. No more than one of the parties to the agreement, contract, or 
transaction is entering into the agreement, contract, or transaction in 
conjunction with its line of business, but is neither an eligible 
contract participant nor an eligible swap participant, and the 
agreement, contract, or transaction was not and is not marketed to the 
public;
    Provided, however, that: (i) Such agreements, contracts, and 
transactions (and persons offering, entering into, or rendering advice 
or rendering other services with respect to, any such agreement, 
contract, or transaction) fall within the scope of any of the existing 
CEA sections 2(d), 2(e), 2(g), 2(h), and 5d provisions or the line of 
business provision as in effect prior to July 16, 2011; and (ii) the 
foregoing exemption shall expire upon the earlier of: (I) July 16, 
2012; or (II) such other compliance date as may be determined by the 
Commission.
    (3) Provides that the foregoing exemptions in paragraphs (1) and 
(2) above shall not:
    a. Limit in any way the Commission's authority with respect to any 
person, entity, or transaction pursuant to CEA sections 2(a)(1)(B), 4b, 
4o, 6(c), 6(d), 6c, 8(a), 9(a)(2), or 13, or the regulations of the 
Commission promulgated pursuant to such authorities, including 
regulations pursuant to CEA section 4c(b) proscribing fraud;
    b. Apply to any provision of the Dodd-Frank Act or the CEA that 
became effective prior to July 16, 2011;
    c. Affect any effective or compliance date set forth in any 
rulemaking issued by the Commission to implement provisions of the 
Dodd-Frank Act;
    d. Limit in any way the Commission's authority under section 712(f) 
of the Dodd-Frank Act to issue rules, orders, or exemptions prior to 
the effective date of any provision of the Dodd-Frank Act and the CEA, 
in order to prepare for the effective date of such provision, provided 
that such rule, order, or exemption shall not become effective prior to 
the effective date of the provision; and
    e. Affect the applicability of any provision of the CEA to futures 
contracts or options on futures contracts, or to cash markets.
    In its discretion, the Commission may condition, suspend, 
terminate, or otherwise modify this Order, as appropriate, on its own 
motion. This Final Order, as amended, shall be effective immediately.

    Issued in Washington, DC, on October 18, 2011 by the Commission.
David A. Stawick,
Secretary of the Commission.

Note:

    The following appendices will not appear in the Code of Federal 
Regulations.

Appendices to Notice of Proposed Amendment to Effective Date for Swap 
Regulation--Commission Voting Summary and Statements of Commissioners

Appendix 1--Commission Voting Summary

    On this matter, Chairman Gensler and Commissioners Dunn, 
Sommers, Chilton and O'Malia voted in the affirmative; no 
Commissioner voted in the negative.

Appendix 2--Statement of Chairman Gary Gensler

    I support the proposed amendment to the July 14th Exemptive 
Order regarding the effective dates of certain Dodd-Frank Act 
provisions.
    The July 14th order provided relief until December 31, 2011, or 
when the definitional rulemakings become effective, whichever is 
sooner, from certain provisions that would otherwise apply to swaps 
or swap dealers on July 16. This includes provisions that do not 
directly rely on a rule to be promulgated, but do refer to terms 
that must be further defined by the CFTC and SEC, such as ``swap'' 
and ``swap dealer.''
    Commission staff is working very closely with Securities and 
Exchange Commission (SEC) staff on rules relating to entity and 
product definitions. Staff is making great progress, and we 
anticipate taking up the further definition of entities in the near 
term and product definitions shortly thereafter.
    As these definitional rulemakings have yet to be finalized or 
become effective, today's proposed amendment would provide relief 
through July 16, 2012, or when the definitional rulemakings become 
effective--whichever is sooner.
    The order also provided relief through no later than December 
31, 2011, from certain CEA requirements that may apply as the result 
of the repeal, effective on July 16, 2011, of CEA sections 2(d), 
2(e), 2(g), 2(h) and 5d. The proposed amendment also extends this 
relief to July 16, 2012, or until a date the Commission may 
otherwise determine with respect to a particular requirement under 
the CEA.
    In addition, today's proposed amendment also tailors the July 
14th relief in light of the Commission's actions finalizing the 
agricultural swap rules.

Appendix 2--Statement of Commissioner Scott O'Malia

    As Yogi Berra famously proclaimed: ``It is d[eacute]j[agrave] vu 
all over again.'' Yogi perfectly encapsulates my feelings today. We 
find ourselves again voting on a proposed order aimed at providing 
legal certainty in the form ``temporary exemptive relief'' for swap 
market participants that extends the soon to expire relief found in 
the Commission's July 14, 2011 exemptive order (``July 14 Order''). 
This temporary relief is necessary because: (1) The Commission has 
not yet put forth final rules defining such key terms such as 
``swap'' and ``swap dealer''; and (2) certain exemptions and 
exclusions for transactions in exempt and excluded commodities 
currently relied upon by market participants will be repealed 
effective December 31, 2011. The proposal states: ``[t]he Commission 
proposes that this further amendment to the July 14 Order is 
necessary to ensure that the same scope of the exemptive relief 
available before December 31, 2011 is available to all swaps and 
extends through July 16, 2012, at the latest.''
    Unfortunately, we are once again facing an exemptive order that 
suffers the same faults that the July 14 Order suffered, namely: (1) 
It again includes an arbitrary sunset provision that will cut the 
transition period short and so will likely not provide necessary 
``relief'' to market participants, and (2) it demonstrates the lack 
of ordering of rulemakings combined with the failure to put forth an 
implementation schedule. We now need to broaden the scope of the 
July 14 Order because the exemptive rules contained in part 35 will 
no longer be available to market participants after December 31, 
2011 even though the replacement regulatory regime is not in place 
yet.\26\ Part 35 is more commonly known as the swap exemption and is 
relied upon primarily by entities engaging in agricultural swaps. 
The Commission repealed part 35 in order to ensure that it is not 
used by individuals and entities who had relied on Sections 2(d), 
(g) and (h) of the Commodity Exchange Act (``CEA'') as an end run 
around the new statutory and regulatory requirements.
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    \26\ The Commission recently promulgated a rule pursuant to 
section 723(c)(3) of the Dodd-Frank Act that, effective December 31, 
2011, will repeal the existing part 35 relief and replace it with 
new Sec.  35.1 of the Commission's regulations. See Agricultural 
Swaps, 76 FR 49291 (Aug. 10, 2011).
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    I support the proposal, as I did last time, because it is 
important for the Commission to provide market participants and the 
public with the form of relief the exemptive order is contemplating, 
but I would have preferred

[[Page 66004]]

that this rule, like its predecessor, would not select an arbitrary 
end date.
    Mr. Chairman, I again renew my call for a comprehensive 
rulemaking schedule and implementation plan, that provides greater 
insight on reporting requirements to swap data repositories as well 
as separate rulemaking on real time and block rules. The Commission 
must also provide some certainty on the clearing and trading mandate 
including clarification of ``made available for trading'' and 
guidance on swap clearing.

[FR Doc. 2011-27535 Filed 10-24-11; 8:45 am]
BILLING CODE 6351-01-P
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