[Federal Register: January 14, 2005 (Volume 70, Number 10)]
[Rules and Regulations]
[Page 2565-2566]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



17 CFR Part 140

RIN 3038-AC18

Delegation of Authority to Director of the Division of Clearing
and Intermediary Oversight; Correction

AGENCY: Commodity Futures Trading Commission.

ACTION: Technical amendments.


SUMMARY: This document contains technical amendments to the final rule
amendments that were published on October 7, 2002 (67 FR 62350). This
rule relates to delegations of authority from the Commodity Futures
Trading Commission (Commission) to its staff.

EFFECTIVE DATES: January 14, 2005.

FOR FURTHER INFORMATION CONTACT: Barbara S. Gold, Associate Director,
or Peter Sanchez, Attorney Advisor, Division of Clearing and
Intermediary Oversight, Commodity Futures Trading Commission, 1155 21st
Street, NW., Washington, DC 20581, telephone numbers: (202) 418-5450 or
(202) 418-5237, respectively; facsimile number: (202) 418-5528; and
electronic mail: [email protected] or [email protected], respectively.


1. Technical Amendments

    By Rule 140.93, the Commission has delegated to the Director of the
Division of Clearing and Intermediary Oversight (DCIO) various
functions reserved to the Commission under Part 4 of the Commission's
regulations, which relates to the operations and activities of
commodity pool operators (CPOs) and commodity trading advisors.\1\ As
is explained below, the technical amendments the Commission is making
to Rule 140.93 conform the rule to changes the Commission previously
has made to certain paragraphs of the rule itself and to certain other
rules to which Rule 140.93 applies.

    \1\ Rule 140.93 further extends this delegation ``to such
members of the Commission's staff acting under [the Director's]
direction as he may designate from time to time.''
    Commission rules cited to herein are found at 17 CFR Ch. I
(2004). Both the Commodity Exchange Act (Act), 7 U.S.C. 1 et seq.
(2000), and the Commission's rules issued thereunder can be accessed
through the Commission's Web site, at:  href="http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.cftc.gov/cftc/cftclawreg.htm" shape="rect">http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.cftc.gov/cftc/cftclawreg.htm


    On October 7, 2002, the Commission amended its rules to reflect the
reassignment of responsibilities, including delegations of authority
pursuant to Rule 140.83, resulting from its reorganization of its
staff. Under the reorganized structure, the (former) Divisions of
Trading and Markets and Economic Analysis were reconfigured into two
new divisions and one new office, DCIO, the Division of Market
Oversight, and the Office of the Chief Economist. As amended, the
Commission's rules reflected new assignments of responsibilities,
including delegated authorities. In this regard, the Commission removed
the words ``Trading and Markets'' from the body of Rule 140.93 and
added, in their place, the words ``Clearing and Intermediary
Oversight.'' However, the Commission neglected at that time to make a
similar amendment to the title of the rule itself. Accordingly, one of
the technical amendments the Commission is making is the removal of the
words ``Trading and Markets'' from the title of Rule 140.93 and the
addition, in their place, of the words ``Clearing and Intermediary
    One of the rules to which Rule 140.93 applies is Rule 4.22, which
concerns the Annual Report that a CPO registered or required to be
registered under the Act must prepare and distribute to each
participant in each pool it operates. On December 11, 2002, the
Commission delegated to the National Futures Association (NFA) all
functions under Rule 4.22(f)--e.g., the receiving and granting or
denying of applications for extensions of time to distribute Annual
Reports.\2\ On that date, the Commission also amended Rule 4.22(f) by
removing the word ``Commission'' from the rule and adding, in its
place, the words ``National Futures Association.'' \3\ Thus, other
technical amendments the Commission is making are the removal of
paragraph (a)(2) of Rule 140.93 (such that Rule 140.93 no longer refers
to Rule 4.22(f)) and the redesignation of paragraphs (a)(3) through
(a)(6) of Rule 140.93 as paragraphs (a)(2) through (a)(5) of Rule

    \2\ 67 FR 77470 (December 18, 2002). NFA is a futures
association registered as such with the Commission under Section 17
of the Act, 7 U.S.C. 21 (2000).
    \3\ 67 FR 77409 (December 18, 2002). The Commission did not
delegate to NFA any functions under Rule 4.22(g), which concerns the
election by a CPO of its pool's fiscal year and the authority of the
Commission to disapprove a change of fiscal year after a fiscal year
has been chosen.

    Another of the rules to which Rule 140.93 applies is Rule 4.5,
which, among other things, provides an exclusion from the term
``commodity pool operator'' for specified ``eligible persons'' with
respect to their operation of certain ``qualifying entities,'' provided
those persons comply with certain conditions in operating those
entities. On August 1, 2003, the Commission eliminated certain of those
conditions from Rule 4.5 by removing paragraphs (c)(2)(i) and
(c)(2)(ii) and redesignating paragraphs (c)(2)(iii) and (c)(2)(iv) as
paragraphs (c)(2)(i) and (c)(2)(ii) of the rule.\4\ At that time,
however, the Commission did not also amend Rule 140.93 to make
conforming changes to its references to Rule 4.5. To remedy this
oversight, the final technical amendment the Commission is making is
the correction in (newly redesignated) Rule 140.93(a)(4) to refer to
Rule 4.5(c)(2)(ii).

    \4\ 68 FR 47221 (August 8, 2003).

II. Need for Correction

    As published, Rule 140.93 contains text which no longer is
accurate. Thus, it is in need of correction.

III. Related Matters

A. The Administrative Procedure Act

    The Commission finds that that Rule 140.93 relates solely to agency
practice and procedure and that notice of proposed rulemaking and
opportunity for public participation are not required. Thus, the
Commission has determined to make the amendments to Rule 140.93
effective immediately. The forgoing is in accordance with the
Administrative Procedure Act, as codified, 5 U.S.C. 553.\5\

    \5\ See 46 FR 26003, 26013, (May 6, 1981).

B. The Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601, et seq.,
requires that agencies, in proposing rules, consider the impact of
those rules on small businesses. The RFA defines the term ``rule'' to
mean ``any rule for which the agency publishes a general notice of
proposed rulemaking pursuant to section 553(b) of this title * * * for
which the agency provides an opportunity for notice and public

[[Page 2566]]

comment.'' 5 U.S.C. 601(2). Since the rules are not being effected
pursuant to section 553(b), they are not ``rules'' as defined in the
RFA, and the analysis and certification process certified in that
statute do not apply.

C. The Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501, et seq.,
which imposes certain requirements on federal agencies, including the
Commission, in connection with their conducting or sponsoring any
collection of information as defined by the PRA, does not apply to
these rule amendments because these rule amendments do not contain
information collection requirements as defined by the PRA.

D. Cost-Benefit Analysis

    Section 15 of the Act, as amended by section 119 of the CFMA,
requires the Commission, before issuing a new regulation under the Act,
to consider the costs and benefits of its action. The Commission
understands that, by its terms, section 15 does not require the
Commission to quantify the costs and benefits of a new regulation or to
determine whether the benefits of the proposed regulation outweigh its
    Section 15 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 could in its
discretion give greater weight to any one of the five enumerated areas
of concern and could in its discretion determine that, notwithstanding
its costs, a particular rule was necessary or appropriate to protect
the public interest or to effectuate any of the provisions or to
accomplish any of the purposes of the Act.
    The Commission has considered the costs and benefits of this rule
package in light of the specific areas of concern identified in section
15, at the time that the Commission delegated these responsibilities to
the Division and the National Futures Association.

List of Subjects in 17 CFR Part 140

    Authority delegations (Government agencies), Organization and
functions (Government agencies).


Accordingly, 17 CFR part 140 is corrected by making the following
technical amendments:
1. The authority citation for part 140 continues to read as follows:

    Authority: 7 U.S.C. 2, 12a.

Sec.  140.93  [Corrected]

2. In Sec.  140.93:
a. Remove the words ``Trading and Markets'' in the title and add, in
their place, ``Clearing and Intermediary Oversight.''
b. Remove paragraph (a)(2);
c. Redesignate paragraphs (a)(3) and (a)(4) as paragraphs (a)(2) and
(a)(3), respectively;
d. Redesignate paragraph (a)(5) as paragraph (a)(4) and correct ``Sec.
4.5(c)(2)(v)'' in newly redesignated paragraph (a)(4) to read ``Sec.
4.5(c)(2)(ii)''; and
e. Redesignate paragraph (a)(6) as paragraph (a)(5).
* * * * *

    Issued in Washington, DC, on January 11, 2005 by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 05-817 Filed 1-14-05; 8:45 am]