Commodity Futures Trading Commission – Federal Register Recent Federal Regulation Documents

On October 22, 2010, commencing at 1 p.m. and ending at 4 p.m., staff of the CFTC will hold a public roundtable discussion at which invited participants will discuss certain issues related to individual customer collateral protection in the context of the CFTC's rulemaking efforts pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``Act''). The roundtable will focus on protection of customer assets used as collateral in the cleared swap market under section 724(a) of the Act including the appropriate treatment of customer collateral by clearinghouses in the event of a default by a futures commission merchant. The discussion will be open to the public with seating on a first-come, first-served basis. Members of the public may also listen by telephone. Call-in participants should be prepared to provide their first name, last name, and affiliation. The information for the conference call is set forth below. US Toll-Free: (866) 844-9416. International Toll: 1-203-369-5026. Passcode: 8693978. A transcript of the public roundtable discussion will be published on the CFTC's Web site at https://www.cftc.gov/LawRegulation/ DoddFrankAct/OTC_6_SegBankruptcy.html. The roundtable discussion will take place in Lobby Level Hearing Room (Room 1000) at the CFTC's headquarters at Three Lafayette Centre, 1155 21st Street, NW., Washington, DC.

The Commodity Futures Trading Commission (Commission or CFTC) is proposing rules to implement new statutory provisions enacted by Title VII and Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The proposed regulations establish financial resources requirements for derivatives clearing organizations (DCOs) for the purpose of ensuring that they maintain sufficient financial resources to enable them to perform their functions in compliance with the Commodity Exchange Act and the Dodd- Frank Act.

Recently, the Commodity Futures Trading Commission (``Commission,'' or ``CFTC'') has been confronted with the question of how to treat certain transactions on fractional undivided interests, or shares, in single commodity investment products referred to as exchange traded funds (``ETF'' or ``ETFs''),\1\ primarily in the metals complex. The ETFs have in all relevant instances been structured as trusts (singularly, ``ETF Trust'' or ``Trust''),\2\ the assets of which consist of holdings of one specific physical commodity.\3\ The explicit and sole investment objective of each of these ETF Trusts is to track as nearly as possible the spot price of the underlying physical commodity less the expenses of trust operations. The listing of these ETF shares provides shareholders with efficient exposure to commodity market price movements.\4\ These Precious Metal Commodity-Based ETFs have primarily focused on holding either gold or silver, with a recent expansion into palladium and platinum. The Commission has issued Orders pursuant to Section 4(c) of the Commodity Exchange Act (the ``Act'') permitting the trading and clearing of certain transactions on these Trusts as, respectively, options on securities and security futures.\5\ The Previous Orders have provided exemptions from certain provisions of the Act, or the Commission's regulations thereunder, which might have been transgressed by trading or clearing, among other things, options and futures on Commodity-Based ETFs. The exemption mechanism has enabled the Commission to reserve judgment as to the jurisdictional classification (i.e. commodity or security) of Commodity-Based ETFs and options and futures on Commodity-Based ETFs while at the same time providing a mechanism to ensure both that the Commission's regulatory oversight needs are satisfied (whether through regulation by the Securities and Exchange Commission (``SEC'') or by attaching conditions to the exemption orders) and that novel products may be introduced without undue delay for market participant and investor use.

The Commodity Futures Trading Commission (CFTC) is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., Federal agencies are required to publish notice in the Federal Register concerning each proposed collection of information, including each proposed extension of an existing collection of information, and to allow 60 days for public comment in response to the notice. This notice solicits comments on requirements relating to procedures for submitting requests for exemptive, no- action, and interpretative letters.

The Technology Advisory Committee will hold a public meeting on October 12, 2010, from 1 p.m. to 5 p.m., at the CFTC's Washington, DC headquarters.

The Global Markets Advisory Committee will hold a public meeting on October 5, 2010, from 1 p.m. to 5 p.m., at the CFTC's Washington, DC headquarters.

Section 723 of the Dodd-Frank Wall Street Reform and Consumer Protection Act permits persons transacting business in exempt commodities in reliance upon Section 2(h) of the Commodity Exchange Act to petition the Commission for grandfather relief enabling them to continue to rely on Section 2(h) after the effective date of the Dodd- Frank Wall Street Reform and Consumer Protection Act. While persons may submit such grandfather relief petitions in accordance with the procedures provided herein, at this time the Commission has determined that it will not be issuing such relief to persons seeking to continue to rely on Section 2(h)(1)-(2). The Commission is prepared to revisit its decision in the future should it be necessary in order to ensure a smooth transition to the new regulatory regime mandated by the Dodd- Frank Wall Street Reform and Consumer Protection Act. Any relief that the Commission determines to grant in the future will not be limited to persons that may file a petition.

This document corrects a missing e-mail address in a proposed rule published in the Federal Register of September 9, 2010, regarding relief from certain disclosure, reporting and recordkeeping requirements that Commission staff previously has issued on a case-by- case basis to commodity pool operators (CPOs).

On September 15, 2010, commencing at 9 a.m. and ending at 12:30 p.m., staff of the Agencies will hold a public roundtable discussion at which invited participants will discuss swap execution facilities and security-based swap execution facilities in the context of certain authority that Sections 733 and 763 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``Act'') granted to the Agencies respectively. The discussion will be open to the public with seating on a first-come, first-served basis. Members of the public may also listen by telephone. Call-in participants should be prepared to provide their first name, last name, and affiliation. The information for the conference call is set forth below. US/Canada Toll-Free: 877-732-6422 Conference ID: 7772 A transcript of the public roundtable discussion will be published on the SEC's mandatory exchange trading and swap execution facilities rulemaking page at https://www.sec.gov/spotlight/ regreformcomments.shtml. The transcript also will be available by a link on the CFTC's SEF Registration Requirements and Core Principle Rulemaking, Interpretation & Guidance Web page at https://www.cftc.gov/ LawRegulation/OTCDerivatives/otc_rules.html. The roundtable discussion will take place in the Auditorium (Room L-002) at the SEC Headquarters located at 100 F Street, NE., Washington, DC.

The Commodity Futures Trading Commission (``Commission'' or ``CFTC'') is authorizing the National Futures Association (``NFA''), effective September 10, 2010, to process and grant applications for initial registration, renewed registration and withdrawals of retail foreign exchange dealers (``RFEDs'') and their associated persons (``APs'') and to issue temporary licenses to eligible APs; to conduct proceedings to deny, condition, suspend, restrict or revoke the registration of any RFED or AP of an RFED, or an applicant for registration in either category; and to maintain records regarding RFEDs and their APs, and to serve as the official custodian of those Commission records.

The Commission is extending the comment period for the Notice of Proposed Rulemaking (``NPRM'') that calls for the collection of ownership, control and related information.\1\ The new deadline for submitting public comments is October 7, 2010.

The Commodity Futures Trading Commission (CFTC) is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., Federal agencies are required to publish notice in the Federal Register concerning each proposed collection of information, and to allow 60 days for comment in response to the notice. This notice solicits comments on requirements relating to information collected to assist the Commission in the prevention of market manipulation.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank Act''), provides for the comprehensive regulation of swaps and security-based swaps. Title VII of the Dodd-Frank Act (``Title VII''), provides that the Securities and Exchange Commission (``SEC'') and the Commodity Futures Trading Commission (``CFTC'') (collectively, ``the Commissions''), in consultation with the Board of Governors of the Federal Reserve System, shall jointly further define certain key terms (specifically, ``swap'', ``security-based swap'', ``swap dealer'', ``security-based swap dealer'', ``major swap participant'', ``major security-based swap participant'', ``eligible contract participant'', and ``security-based swap agreement''), and shall jointly prescribe regulations regarding ``mixed swaps,'' as that term is used in Title VII of the Dodd-Frank Act. To assist the SEC and CFTC in further defining such terms, the Commissions are issuing this Notice and request for public comment.

This document corrects a heading in the notice of proposed rulemaking published in the Federal Register of August 9, 2010, regarding Acknowledgment Letters for Customer Funds and Secured Amount Funds.

The Commodity Futures Trading Commission (the ``Commission'') is amending its regulations regarding the operation of a commodity broker in bankruptcy, in order to permit the trustee in such bankruptcy to operate, with the written permission of the Commission, the business of such commodity broker in the ordinary course, including the purchase or sale of new commodity contracts on behalf of the customers of such commodity broker, under appropriate circumstances, as determined by the Commission.

The Commodity Futures Trading Commission (``CFTC'' or ``Commission'') is proposing a rule that would establish standards for recovery and resumption of trading and clearing operations by designated contract markets (``DCMs'') and registered derivatives clearing organizations (``DCOs'') that the Commission determines to be critical financial markets or core clearing and settlement organizations in the event of a wide-scale disruption affecting such entities' trading or clearing operations. These proposed standards would require such entities to maintain business continuity and disaster recovery resources sufficient to meet a same-day recovery time objective for trading and clearing, and maintain geographic dispersal of infrastructure and personnel sufficient to enable achievement of a same-day recovery time objective, in the event of a wide-scale disruption. The proposed amendments also revise application guidance and acceptable practices under the Core Principles for DCMs relating to business continuity and disaster recovery matters that would harmonize acceptable practices for DCMs and DCOs.