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  • Federal Register, Volume 76 Issue 53 (Friday, March 18, 2011)[Federal Register Volume 76, Number 53 (Friday, March 18, 2011)]

    [Proposed Rules]

    [Pages 14826-14827]

    From the Federal Register Online via the Government Printing Office []

    [FR Doc No: 2011-6399]



    17 CFR Chapter I

    RIN 3038-AD26

    Antidisruptive Practices Authority

    AGENCY: Commodity Futures Trading Commission.

    ACTION: Advance notice of proposed rulemaking; notice of termination.


    SUMMARY: On November 2, 2010, the Commodity Futures Trading Commission

    (``Commission'') issued in the Federal Register an advance notice of

    proposed rulemaking (``ANPR''). In this ANPR, the Commission requested

    public comment to assist it with promulgating rules and regulations to

    implement the disruptive practices set forth in section 4c(a) of the

    Commodity Exchange Act (``CEA''), as amended by section 747 of the

    Dodd-Frank Wall Street Reform and Consumer Protection Act (``Dodd-Frank

    Act''). After considering the comments that were submitted in response

    to the ANPR, the Commission decided not to issue any regulations at

    this time relating to new section 4c(a). Instead, the Commission is

    publishing today elsewhere in the Federal Register a proposed order

    interpreting new section 4c(a)(5). The Commission is also terminating

    the ANPR issued on November 2, 2010.

    DATES: Effective March 18, 2011.

    FOR FURTHER INFORMATION CONTACT: Robert Pease, Counsel to the Director

    of Enforcement, 202-418-5863,; Steven E. Seitz,

    Attorney, Office of the General Counsel, 202-418-5615,;

    or Mark D. Higgins, Counsel to the Director of Enforcement, 202-418-

    5864,, Commodity Futures Trading Commission, Three

    Lafayette Centre, 1151 21st Street, NW., Washington, DC 20581.

    SUPPLEMENTARY INFORMATION: On July 21, 2010, President Obama signed the

    Dodd-Frank Act.\1\ Title VII of the Dodd-Frank Act \2\ amended the

    Commodity Exchange Act (``CEA'') \3\ to establish a comprehensive new

    regulatory framework for swaps and security-based 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 Commission's rulemaking and enforcement authorities with

    respect to, among others, all registered entities and intermediaries

    subject to the Commission's oversight. Section 747 of the Dodd-Frank

    Act amends section 4c(a) of the CEA to add a new section entitled

    ``Disruptive Practices.''


    \1\ See Dodd-Frank Wall Street Reform and Consumer Protection

    Act, Public Law 111-203, 124 Stat. 1376 (2010). The text of the

    Dodd-Frank Act may be accessed at


    \2\ Pursuant to Section 701 of the Dodd-Frank Act, Title VII may

    be cited as the ``Wall Street Transparency and Accountability Act of


    \3\ 7 U.S.C. 1 et seq. (2006).


    [[Page 14827]]

    New section 4c(a) expressly prohibits certain trading practices

    that are disruptive of fair and equitable trading. New section 4c(a) of

    the CEA makes it unlawful for any person to engage in any trading,

    practice, or conduct on or subject to the rules of a registered entity



    (A) Violates bids or offers;

    (B) Demonstrates intentional or reckless disregard for the orderly

    execution of transactions during the closing period; or

    (C) Is, is of the character of, or is commonly known to the trade

    as, ``spoofing'' (bidding or offering with the intent to cancel the

    bid or offer before execution).

    Section 747 of the Dodd-Frank Act also amended section 4c(a) by

    granting the Commission authority to promulgate such ``rules and

    regulations as, in the judgment of the Commission, are reasonably

    necessary to prohibit the trading practices'' enumerated in section 747

    ``and any other trading practice that is disruptive of fair and

    equitable trading.'' The prohibition on the disruptive practices

    specified in new section 4c(a) will become effective 360 days after the

    enactment of the Dodd-Frank Act.

    On November 2, 2010, the Commission issued an ANPR inviting public

    comment on all aspects of section 747 of the Dodd-Frank Act.\4\ After

    reviewing the ANPR comments that were submitted, the Commission

    determined that it should address the disruptive practices by issuing a

    proposed order interpreting new CEA section 4c(a). Accordingly, this

    document terminates the ANPR issued on November 2, 2010. The proposed

    interpretive order referenced above, which incorporates the ANPR

    comments, is being published today elsewhere in the notice section of

    the Federal Register.


    \4\ Anti-Disruptive Trading Practices Authority Contained in the

    Dodd-Frank Wall Street Reform and Consumer Protection Act, 75 FR

    211, Nov. 2, 2010.


    This proposed interpretive order will provide market participants

    and the public with guidance on the scope of the three statutory

    disruptive practices set forth in new CEA section 4c(a).

    Issued in Washington, DC, on March 14, 2011, by the Commission.

    David A. Stawick,

    Secretary of the Commission.

    [FR Doc. 2011-6399 Filed 3-17-11; 8:45 am]

    BILLING CODE 6351-01-P

    Last Updated: March 18, 2011