Commodity Futures Trading Commission 17 CFR Part 171 Rules Relating To Review of National Futures Association Decisions in Disciplinary, Membership Denial, Registration and Member Responsibility Actions[Federal Register: August 2, 2007 (Volume 72, Number 148)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 171
Rules Relating To Review of National Futures Association
Decisions in Disciplinary, Membership Denial, Registration and Member
AGENCY: Commodity Futures Trading Commission.
ACTION: Final Rule.
SUMMARY: The Commodity Futures Trading Commission (``Commission'' or
``CFTC'') hereby amends 17 CFR Part 171, by adding language to
Commission Rule Sec. 171.9(b) (manner of service), allowing for
service by facsimile (``fax'') or by electronic means (``e-mail''),
making either means of service effective upon receipt. The amendment
will also indicate that parties who consent to accepting service of
documents by electronic means or fax in the underlying NFA action also
consent to accepting service by the same means in proceedings under
DATES: August 2, 2007.
FOR FURTHER INFORMATION CONTACT: Thuy Dinh, Office of the General
Counsel, Commodity Futures Trading Commission, Three Lafayette Centre,
1155 21st Street, NW., Washington, DC 20581. Telephone: (202) 418-5128.
SUPPLEMENTARY INFORMATION: On October 9, 1990, the Commission adopted
Part 171 to establish standards and procedures for its review of
decisions of registered futures associations such as the National
Futures Association (``NFA'') in disciplinary actions, membership
denial actions, registration actions and member responsibility actions.
55 FR 41061. From the time Part 171 was promulgated until now,
Commission Rule 171.9(b) provides only for service by personal delivery
(effective upon receipt) or service by mail (effective upon deposit).
On May 22, 2007, the NFA asked the Commission to amend language to Rule
171.9(b), to allow service by fax and e-mail. In proposing the
amendment, NFA cited three supporting arguments: (1) To avoid undue
delay (due to cautionary procedures adopted in the post-September 11
climate, postal mail to U.S. government agencies is often delayed and
thus is not as effective as it used to be prior to September 11); (2)
to take advantage of technological means of service, which will be
faster and less costly than the mails; (3) to
streamline procedures. NFA cites Commission Rules under 17 CFR Part 10,
which allows for service of documents by fax in enforcement
proceedings. In addition, it cites its own rules governing arbitration,
compliance and disciplinary cases as allowing service by both fax and
e-mail. Thus, NFA asserts, to allow service by fax and e-mail in Part
171 would make the process more efficient.
After reviewing NFA's proposed amended language and its
justifications for the proposal, the Commission has decided to adopt
NFA's request in its entirety. Amending the 17 CFR 171.9(b) to allow
for service by fax and e-mail will(a) enhance the efficiency of
proceedings under Part 171; and (b) comport with the various
capabilities of today's changing world.
A. No Notice Is Required Under 5 U.S.C. 553
The Commission has determined that this amendment to Part 171 is
exempt from the provisions of the Administrative Procedure Act, 5
U.S.C. 553, which generally require notice of proposed rulemaking and
provide other opportunities for public participation. However, 5 U.S.C.
553 gives an agency discretion not to provide notice for ``rules of
agency organization, procedure, or practice.'' Notice and public
procedure are unnecessary in this case. The proposed amendment, if made
effective immediately, will actually promote efficiency and facilitate
the Commission's core mission. For the above reasons, the notice
requirements under 5 U.S.C. 553 are inapplicable.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601 et seq.,
requires agencies with rulemaking authority to consider the impact
those rules will have on small businesses. With respect to persons
seeking Commission reviews of NFA adjudicatory decisions, the
amendments will impose no additional regulatory burden. Commission
review of NFA disciplinary and membership denial actions has been
carried out pursuant to 17 CFR Part 171 since 1990. These amendments to
17 CFR 171.9(b) do not present any significant changes and will in fact
ease the regulatory burden by providing more options, greater certainty
and predictability concerning manners of service under Part 171.
Accordingly, the Acting Chairman, on behalf of the Commission, hereby
certifies, pursuant to 5 U.S.C. 605(b), that the amendments will not
have a significant economic impact on a substantial number of small
C. Paperwork Reduction Act
The amendments to Part 171 rules do not impose a burden within the
meaning and intent of the Paperwork Reduction Act of 1980, 44 U.S.C.
3501, et seq.
D. Cost-Benefit Analysis
Section 15(a) of the Commodity Exchange Act, 7 U.S.C. 19(a),
requires the Commission to consider the costs and benefits of its
action before issuing a new regulation. 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. Accordingly,
the Commission can, in its discretion, give greater weight to any one
of the five enumerated areas of concern and can, in its discretion,
determine that notwithstanding its costs, a particular rule is
necessary or appropriate to protect the public interest or to
effectuate any of the provisions, or accomplish any of the purposes, of
the Commodity Exchange Act.
The amendments to Part 171 will not create any significant change
in the Commission's appellate process or impose new burdens or costs
thereon. In fact, the amendments should enhance the protection of
market participants and the public by making service more certain,
faster and cheaper.
After considering these above factors, the Commission has
determined to amend Part 171, as set forth below.
List of Subjects in 17 CFR Part 171
Administrative practice and procedure, Commodity exchanges,
In consideration of the following, and pursuant to authority contained
in the Commodity Exchange Act, the Commission hereby amends chapter I
of title 17 of the Code of Federal Regulations to read as follows:
PART 171-RULES RELATING TO REVIEW OF NATIONAL FUTURES ASSOCIATION
DECISIONS IN DISCIPLINARY, MEMBERSHIP DENIAL, REGISTRATION AND
MEMBER RESPONSIBILITY ACTIONS
1. The authority citation for Part 171 continues to read as follows:
Authority: 7 U.S.C. 4a, 12a, and 21.
2. Section 171.9 is amended by revising paragraph (b) to read as
Sec. 171.9 Service
* * * * *
(b) Manner of Service: Service may be made by personal delivery
(effective upon receipt), mail (effective upon deposit), facsimile
(effective upon receipt) or electronic mail (effective upon receipt).
When service is effected by mail, the time within which the person
served may respond thereto shall be increased by five days. Parties who
consent to accepting service of documents by electronic means in the
underlying NFA action also consent to accepting service by the same
means in proceedings under this Part 171.
* * * * *
Issued in Washington, DC on the 26th of July 2007, by the
Eileen A. Donovan,
Acting Secretary of the Commission.
[FR Doc. E7-14922 Filed 8-1-07; 8:45 am]
BILLING CODE 6351-01-P
Updated August 02, 2007
Last Updated: August 4, 2007