Federal Register, Volume 76 Issue 126 (Thursday, June 30, 2011)[Federal Register Volume 76, Number 126 (Thursday, June 30, 2011)]
[Proposed Rules]
[Pages 38328-38330]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16430]



5 CFR Chapter XLI

17 CFR Chapter I

Reducing Regulatory Burden; Retrospective Review Under E.O. 13563

AGENCY: Commodity Futures Trading Commission.

ACTION: Request for information.


SUMMARY: In accordance with Executive Order 13563, ``Improving 
Regulation and Regulatory Review,'' the Commodity Futures Trading 
Commission (``CFTC'' or ``Commission'') intends to review its existing 
regulations to evaluate their continued effectiveness in achieving the 
objectives for which they were adopted. In this regard, the Commission 
has developed a plan to identify and evaluate its regulations 
periodically to determine whether any such regulations should be 
modified, expanded, streamlined or repealed in order to make the 
agency's regulatory program more effective (the ``Plan'').

DATES: Interested parties are encouraged to submit their views on the 
Plan on or before August 29, 2011.

ADDRESSES: You may make your submission, identified by ``Plan for 
Retrospective Review,'' by any of the following methods:
     The agency's Web site, at http://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: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    Please make your submission using only one method. All submissions 
must be in English, or if not, accompanied by an English translation. 
Your submission may be posted as received to http://www.cftc.gov. You 
should submit only information that you wish to make available 
publicly. If you wish the Commission to consider information that you 
believe is exempt from disclosure under the Freedom of Information Act, 
a petition for confidential treatment of the exempt information may be 
submitted according to the procedures established in Sec.  145.9 of the 
Commission's regulations.\1\

    \1\ 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 http://www.cftc.gov that it may deem to be 
inappropriate for publication, such as obscene language.

FOR FURTHER INFORMATION CONTACT: Maria D. Godel, Assistant General 
Counsel, Office of General Counsel, 1155 21st Street, NW., Washington, 
DC 20581. Telephone: 202-418-5120 and electronic mail: [email protected]


I. The Executive Order

    On January 18, 2011, President Obama issued Executive Order 13563 
entitled ``Improving Regulation and Regulatory Review.'' The Executive 
Order emphasizes several guiding principles, including that: agencies 
consider the costs and benefits of their regulations and choose the 
least burdensome path; the regulatory process must be transparent and 
include public participation; and agencies must attempt to coordinate, 
simplify and harmonize regulations to reduce costs and promote 
certainty for businesses and the public. Section 6 of the Executive 
Order focuses on the importance of maintaining a consistent culture of 
retrospective review and analysis by agencies of their regulatory 
programs. To that end, section 6 includes a ``look-back'' provision for 
agencies to develop a preliminary plan under which the agency will 
periodically review its existing significant regulations to determine 
whether any should be modified, streamlined, expanded or repealed in 
order to make the agency's regulatory program more effective and less 
    In a memorandum dated February 2, 2011, the administrator of the 
Office of Management and Budget's Office of Information and Regulatory 
Affairs (``OIRA'') provided guidance to the heads of executive 
departments and agencies and independent regulatory agencies regarding 
the principles and requirements of Executive Order 13563 (the ``OIRA 
Memorandum''). While Executive Order 13563 does not apply to 
independent agencies, such as the Commission, the OIRA Memorandum 
encourages independent agencies to give consideration to its 
provisions, consistent with their legal authority, and to consider 
undertaking voluntarily retrospective analysis of existing rules.
    The OIRA Memorandum emphasizes that in formulating its plan for 
retrospective review, ``each agency should exercise its discretion to 
develop a plan tailored to its specific mission, resources, 
organizational structure and rulemaking history and volume.''

II. The Commission's Plan

    As part of the implementation of the Dodd-Frank Wall Street 
Transparency and Accountability Act (``Dodd-Frank Act''), the 
Commission already has reviewed many of its existing regulations. In 
determining the extent to which these existing regulations have needed 
to be modified to conform to the Dodd-Frank Act's new requirements, the 
Commission already has subjected many of its rules to scrutiny.\2\ As 
such, ``Phase

[[Page 38329]]

One'' of the Commission's retrospective review of its existing 
regulations is (and has been) well underway as a significant effort 
prior to the issuance of Executive Order 13563 and the OIRA Memorandum.

    \2\ For example, the Commission has published notices of 
proposed rulemakings addressing conforming amendments to its 
regulations regarding the registration of intermediaries under 17 
CFR part 3, 76 FR 12888, Mar. 9, 2011; to conform the requirements 
under 17 CFR part 4 governing the operations and activities of 
commodity pool operators and commodity trading advisors consistent 
with title VII of the Dodd-Frank Act, 76 FR 11701, Mar. 3, 2011; and 
to make consistent with title VII of the Dodd-Frank Act part 40's 
provisions common to all registered entities, 75 FR 67282, Nov. 2, 
2010. Further, the Commission has published notices of proposed 
rulemaking to implement changes to core principles for designated 
contract markets (``DCMs'') and derivatives clearing organizations 
(``DCOs'') under title VII of the Dodd-Frank Act by revising part 
38, applicable to DCMs, and part 39, applicable to DCOs, 75 FR 
80572, Dec. 22, 2010; 75 FR 63113, Oct. 14, 2010; 75 FR 77576, Dec. 
13, 2010; 75 FR 78185, Dec. 15, 2010; 76 FR 3698, Jan. 20, 2010; and 
76 FR 13101, Mar. 10, 2011. The Commission also is engaged in a 
proposed rulemaking to adapt all applicable CFTC regulations to the 
Dodd-Frank Act: proposed revisions to part 1 of the Commission's 
regulations would amend certain fundamental definitions and 
recordkeeping rules; conforming changes to parts 5 (off-exchange 
foreign currency transactions); 7 (registered entity rules altered 
or supplemented by the Commission); 41 (Security futures products); 
15 (general reports); 18 (reports by traders); 21 (special calls); 
36 (exempt markets); 140 (organization, functions and procedures); 
145 (Commission records and information); 155 (trading standards) 
and 166 (customer protection) also have been proposed, 76 FR 33066, 
Jun. 7, 2011.

    Accordingly, the Commission's Plan is as follows. After the 
substantial completion of the promulgation of final rules under the 
Dodd-Frank rulemaking process, including the revision of various 
existing Commission regulations to conform to the requirements of the 
Dodd-Frank legislation, the Commission intends to begin the process of 
the periodic, retrospective examination of the remainder of its 
regulations (i.e., those regulations that were not reviewed as part of 
the Dodd-Frank effort). This process will constitute ``Phase Two'' of 
the Commission's retrospective review. A Regulatory Review Group 
(``Group''), consisting of senior agency staff, will be formed to 
implement the CFTC Plan.
    In accordance with the OIRA Memorandum, the Group will solicit 
public input on which rules should be reviewed. Subsequently, the Group 
will recommend to the Commission a list of candidate rules for review. 
To aid the Commission in its consideration, the Group will prioritize 
the rules recommended for review according to the Commission's 
statutory mission and resources. The Commission then will determine 
which rules will be reviewed.
    If, as a result of the retrospective review, the Commission 
determines to propose a revision to an existing regulation, the 
Commission will provide the public with notice and opportunity for 
comment as required by the Administrative Procedure Act. Additionally, 
section 15(a) of the Commodity Exchange Act (``CEA'') provides that 
before promulgating a regulation under the CEA, the Commission shall 
consider the costs and benefits of such an action. The CFTC publishes a 
list of proposed rules that becomes part of the ``Unified Agenda of 
Federal Regulatory and Deregulatory Actions.'' \3\ The Unified Agenda 
provides uniform reporting of data on regulatory and deregulatory 
activities under development throughout the federal government. The 
results of the foregoing process for developing the list of regulations 
for retrospective review will be integrated into the Unified Agenda.

    \3\ See the CFTC's Unified Agenda at:

    The Commission encourages interested parties to submit their views 
on the Plan. Specifically, the Commission seeks submissions that 
address the following:
    1. As stated above, as ``Phase Two'' of its retrospective review, 
the Commission intends to examine those regulations that were not 
reviewed as part of the Dodd-Frank rulemaking process (including the 
revision of various existing Commission regulations to conform to the 
requirements of the Dodd-Frank legislation). Are there any of the 
Commission's other regulations, presently intended for potential 
examination under ``Phase Two'' that should, instead, be reviewed 
before the substantial completion of the Dodd-Frank rulemaking and 
conformation process?
    2. What criteria should the Commission use to prioritize the review 
of existing regulations?
    3. As the Executive Order and OIRA Memorandum indicate, the 
Executive Order does not apply to independent agencies. Which of the 
principles and guidelines with respect to retrospective review should 
the Commission voluntarily adopt? Are there any principles or 
guidelines that are not appropriate for the Commission to voluntarily 

    Issued in Washington, DC, on June 23, 2011, by the Commission.
David A. Stawick,
Secretary of the Commission.

    Note:  The following appendix will not appear in the Code of 
Federal Regulations.

Appendix to Retrospective Review of Agency Rules--Concurring Statement 
of Commissioner Jill E. Sommers

    I am pleased the Commission has expressed its intent to 
periodically engage in a retrospective review of its regulations to 
determine whether any should be modified, streamlined, expanded or 
repealed in accordance with Executive Order 13563. Executive Order 
13563, which reaffirms and builds upon Executive Order 12866 of 
September 30, 1993, sets forth a blueprint for promulgating regulations 
in a manner that is transparent and designed to achieve regulatory 
goals in the least burdensome, most cost-effective way. Taken together, 
the orders emphasize the importance of public participation in 
rulemaking, adopting rules only upon a reasoned determination that the 
benefits justify the costs, and maintaining flexibility by specifying 
performance objectives rather than prescriptive rules, where possible. 
I wholeheartedly agree with the regulatory philosophy embodied in the 
Executive Orders and support the Commission's determination to seek 
comment on which of the principles and guidelines with respect to 
retrospective review the Commission should voluntarily adopt. I write 
separately to express my concern, based upon the record of the Dodd-
Frank rulemaking process thus far, that the Commission is not complying 
with either the letter or the spirit of the Executive Orders.
    The Commission states that ``Phase One'' of a retrospective 
analysis is already well underway through its review of its pre-Dodd-
Frank rulebook and various proposed conforming amendments. While I 
agree that amendments to the existing rules will be necessary to 
conform with new Dodd-Frank definitions and requirements, I objected to 
the timing of some of the proposals, which in my view were premature 
because final rules establishing certain definitions and requirements 
had not yet been adopted. We will inevitably have to engage in a round 
of conforming amendments to the conforming amendments once the rules 
upon which they are based are finalized. Rushing conforming amendment 
proposals in the guise of complying with Executive Order 13563 is, in 
my opinion, disingenuous and an inefficient use of both the 
Commission's and the public's resources.
    The Commission also cites its proposed rulemakings to implement new 
requirements for complying with the core principles for designated 
contract markets and derivatives clearing organizations as a ``Phase 
One'' retrospective analysis initiative. Again, changes to the 
Commission's guidance and acceptable practices for complying with core 
principles are in order given the Dodd-Frank amendments. My objection 
here is that, contrary to the Executive Orders, the Commission has 
proposed detailed prescriptive rules for complying with the core 
principles rather than preserving the flexibility that was intended by 
Congress and encouraged by the President.
    I have objected in the past to the Commission's failure to conduct 
a robust cost-benefit analysis in connection with its Dodd-Frank 
proposals. And I have yet to see evidence at the proposal stage that we 
are truly looking for the least burdensome, most cost-effective way to 
meet regulatory goals. I believe that a

[[Page 38330]]

retrospective review of rules is an important part of the regulatory 
process as long as it does not impose additional burdens to the agency 
and to the public. I urge the Commission as we move forward with 
finalizing rules to consider the goals of the Executive Orders.

[FR Doc. 2011-16430 Filed 6-29-11; 8:45 am]