[Federal Register Volume 64, Number 1 (Monday, January 4, 1999)]
[Rules and Regulations]
[Pages 24-27]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-34732]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Parts 145 and 147


Commission Records and Information; Open Commission Meetings

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'' or 
``CFTC'') adopts final rules relating to Commission records and 
information. The rules update and streamline procedures in light of the 
Commission's experience in the past several years and amend rules 
regarding open Commission meetings to conform to these modifications.

EFFECTIVE DATE: February 3, 1999.

FOR FURTHER INFORMATION CONTACT:
Eileen Donovan, Attorney-Advisor, Office of the Secretariat, (202) 418-
5096, Commodity Futures Trading Commission, Three Lafayette Centre, 
1155 21st Street, NW, Washington, DC 20581. Facsimile: (202) 418-5543. 
Electronic mail: [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    By notice published at 61 FR 66949 on December 19, 1996, the 
Commission requested comments from the public regarding its proposal to 
modify its rules relating to Commission records and information. The 
proposal was based on the Commission's experience since the rules 
implementing the Freedom of Information Act (``FOIA''), 5 U.S.C. 552 
(1997), had been revised October 5, 1989 and the Commission's desire to 
conform the rules to its practice and the Freedom of Information Reform 
Act of 1986 (Pub. L. 99-570, Secs. 1801-1804). The Commission proposed 
modifying the terms of Section 145.5(g)(1) to conform to Exemption 7, 5 
U.S.C. 552(b)(7), relating to requests for records compiled for law 
enforcement purposes, modifying the procedures regarding requests for 
confidential treatment and compilation of Commission records available 
to the public, increasing the schedule of fees, and changing the rule 
to reflect current addresses and telephone numbers. In response to its 
notice, the Commission received only one comment, which was submitted 
by the New York Mercantile Exchange (``NYMEX''). NYMEX expressed 
concern regarding one aspect of the proposed revision of 17 CFR 
145.9(d)(7) and (e)(1).
    Under the current scheme, when there is a FOIA request for 
materials for which confidential treatment has been sought under 
Section 145.9 by the submitter of the materials, the Assistant 
Secretary of the Commission for Freedom of Information, Privacy and 
Sunshine Acts Compliance, (``Assistant Secretary'') seemingly must 
require the submitter to file a detailed written justification of the 
confidential treatment request within ten days. However, in some cases 
the submitter's initial petition for confidential treatment of the 
information or its response to a prior FOIA request is so complete that 
the Assistant Secretary does not need supplemental information. The 
proposed modifications to Sections 145.9(d)(7)

[[Page 25]]

and 145.9(e)(1) address release of information for which confidential 
treatment has been requested but as to which the Assistant Secretary 
determines that it is necessary for the submitter of the material to 
provide supplemental information justifying confidential treatment. As 
proposed, the rule provides that the Assistant Secretary will notify 
the submitter of the material that the requested information will be 
released after ten business days unless the submitter objects by 
providing a detailed written justification and that, absent a timely 
detailed written justification, the submitter will not be given an 
opportunity to appeal an adverse determination. NYMEX contends that ten 
business days may not provide a submitter with sufficient time to 
prepare and file a detailed written justification and urges the 
Commission to revise its proposal to permit a submitter to request an 
extension of the response period.
    The Commission has decided to amend the proposed language to 
accommodate NYMEX's concern. Accordingly, in the final rule the 
Commission has inserted in Section 145.9(d)(7) ``Upon request and for 
good cause shown, the Assistant Secretary may grant an extension of 
such time,'' and in Section 145.9(e)(1) the Commission has inserted 
``(unless under Sec. 145.9(d)7) an extension of time has been 
granted).''
    The Commission reviewed the proposed language in Sections 
145.9(d)(4), 145.9(d)(6), 145.9(d)(7), and 145.9(d)(8) and determined 
that the language should be clarified. Therefore, the Commission 
redrafted those sections to make them clearer without changing the 
meaning of the proposed language substantially. Accordingly, the 
Commission determined that it was not necessary to request comment from 
the public regarding these modifications. The modifications are set 
forth below.
    Section 145.9(d)(4) is modified by changing ``possible'' to 
``practicable'' in the phrase ``at the time the information is 
submitted or as soon thereafter as possible''.
    Section 145.9(d)(6) is redrafted as follows:

    A request for confidential treatment (as distinguished from the 
material that is the subject of the request) shall be considered a 
public document. When a submitter deems it necessary to include, in 
its request for confidential treatment, information for which it 
seeks confidential treatment, the submitter shall place that 
information in an appendix to the request.

    Section 145.9(d)(7) is modified by inserting ``from the Assistant 
Secretary'' after ``On ten business days notice'' and before the comma.
    Section 145.9(d)(8)(i) is redrafted as follows:

    Requests for confidential treatment for any reasonably 
segregable material that is not exempt from public disclosure under 
the Freedom of Information Act, as implemented in Sec. 145.5, shall 
be summarily rejected under Sec. 145.9(d)(9). Requests for 
confidential treatment of public information contained in financial 
reports as specified in Sec. 1.10 shall not be processed. A 
submitter has the burden of specifying clearly and precisely the 
material that is the subject of the confidential treatment request. 
A submitter may be able to meet this burden in various ways, 
including:

    Additionally, the Commission has modified proposed Section 
145.5(g)(1)(i) ``Disclosure of nonpublic records.'' The proposed rule 
includes an exemption for records or information compiled for law 
enforcement purposes to the extent that the production of such 
information would interfere with enforcement activities undertaken by 
the listed entities. The list, as proposed, includes both ``foreign 
governmental authority'' and ``foreign futures or securities 
authority.'' It is unnecessary to include both terms because the term 
``foreign governmental authority'' includes law enforcement activities 
undertaken by a foreign futures authority as defined by the Commodity 
Exchange Act or a foreign securities authority. Accordingly, the 
Commission is deleting the term ``foreign futures or securities 
authority'' from the final rule.
    The Commission has also deleted Section 145.5(g)(2) which defines 
``investigatory records'' form the final rule because Section 
145.5(g)(1) renders it redundant and has renumbered Section 145.5(g) 
accordingly. Section 145.9(d)(10) is also deleted because it has been 
incorporated into Section 145.9(d)(4), and reference to it in Section 
145.9(d)(1) has been revised accordingly.

II. Related Matter

Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601 et seq. 
(1988), requires that agencies, in proposing rules, consider the impact 
of those rules on small businesses. The Commission has previously 
determined, pursuant to 5 U.S.C. 605(b), that Part 145 rules relating 
to Commission records and information do not have a significant 
economic impact on a substantial number of small business entities. 
Because they do not impose regulatory obligations on commodity 
professionals and small commodity firms and because, if instituted, the 
proposed corrections and amendments will expedite and improve the FOIA 
process, the Commission does not expect the final rule to have a 
significant economic impact on a substantial number of small business 
entities.
    Accordingly, pursuant to Rule 3(a) of the RFA (5 U.S.C. 605(b)), 
the Chairperson, on behalf of the Commission, certifies that this 
proposed rule will not have a significant economic impact on a 
substantial number of small entities.

List of Subjects

17 CFR Part 145

    Confidential business information, Freedom of information.

17 CFR Part 17

    Sunshine Act.

    For the reasons set forth in the preamble, title 17, parts 145 and 
147 are amended as follows:

PART 145--COMMISSION RECORDS AND INFORMATION

    1. The authority for Part 145 is revised to read:

    Authority: Pub. L. 99-570, 100 Stat. 3207; Pub. L. 89-554, 80 
Stat. 383; Pub. L. 90-23, 81 Stat. 54; Pub. L. 98-502, 88 Stat. 
1561-1564 (5 U.S.C. 552); Sec. 101(a), Pub. L. 93-463, 88 Stat. 1389 
(5 U.S.C. 4a(j)); unless otherwise noted.

    2. Section 145.5 is amended as set forth below:
    a. In the introductory paragraph add a sentence to the end as set 
forth below.
    b. Remove the introductory text of paragraph (d)(1).
    c. In (d)(1)(i)(B) and (E) remove the following phrase: ``Provided, 
The procedure set forth in 17 CFR 1.10(g) is followed:''.
    d. In (d)(1)(i)(C) and (D) remove the following phrase: ``, 
provided the procedure set forth in Sec. 1.10(g) of this chapter is 
followed''.
    e. In (d)(1)(i)(F) remove the following phrase: ``, if the 
procedure set forth in Sec. 1.10(g) of this chapter is followed''.
    f. In (d)(1)(i)(H) remove the following phrase: ``, provided the 
procedure set forth in Sec. 31.13(m) of this chapter is followed''.
    g. Paragraph (g) is revised to read as set forth below.


Sec. 145.5  Disclosure of nonpublic records.

    * * * Requests for confidential treatment of segregable public 
information will not be processed.
* * * * *
    (g) Records or information compiled for law enforcement purposes to 
the extent that the production of such records or information:

[[Page 26]]

    (1) Could reasonably be expected to interfere with enforcement 
activities undertaken or likely to be undertaken by the Commission or 
any other authority including, but not limited to, the Department of 
Justice or any United States Attorney or any Federal, State, local, or 
foreign governmental authority or any futures or securities industry 
self-regulatory organization;
    (2) Would deprive a person of a right to a fair trail or an 
impartial adjudication;
    (3) Could reasonably be expected to constitute an unwarranted 
invasion of personal privacy;
    (4) Could reasonably be expected to disclose the identity of a 
confidential source including a State, local or foreign agency or 
authority or any private institution which furnished information on a 
confidential basis and, in the case of a record or information compiled 
by a criminal law enforcement authority in the course of a criminal 
investigation or by an agency conducting a lawful national security 
intelligence investigation, information furnished by a confidential 
source;
    (5) Would disclose techniques or procedures or would disclose 
guidelines for law enforcement investigations or prosecutions if such 
disclosure could reasonably be expected to risk circumvention of the 
law; or
    (6) Could reasonably be expected to endanger the life or physical 
safety of any individual.
* * * * *


Sec. 145.6  [Amended]

    3. In Sec. 145.6(a), remove the phrase ``(816) 374-6602'' and add 
in its place ``(816) 931-7600''; remove the phrase ``10880 Wilshire 
Blvd., suite 1005 Los Angeles, California 90024, Telephone: (310) 575-
6783'' and add in its place ``10900 Wilshire Boulevard, Suite 400, Los 
Angeles, California 90024, Telephone: (310) 235-6783''.
    4. Section 145.9 is amended as set forth below:
    a. In (d)(1) remove the phrase ``(d)(10)'' and insert in its place 
``(d)(4)''.
    b. Remove (d)(10) and redesignate (d)(11) as (d)(10).
    c. Revise paragraphs (d)(4), (6), (7), and (8) and the first 
sentence of (e)(1) to read as follows:


Sec. 145.9  Petition for confidential treatment of information 
submitted to the Commission.

* * * * *
    (d) * * *
    (4) A request for confidential treatment should accompany the 
material for which confidential treatment is being sought. If a request 
for confidential treatment is filed after the filing of such material, 
the submitter shall have the burden of showing that it was not possible 
to request confidential treatment for that material at the time the 
material was filed. A request for confidential treatment of a future 
submission will not be processed. All records which contain information 
for which a request for confidential treatment is made or the 
appropriate segregable portions thereof should be marked by the person 
submitting the records with a prominent stamp, typed legend, or other 
suitable form of notice on each page or segregable portion of each page 
stating ``Confidential Treatment Requested by [name].'' If such marking 
is impractical under the circumstances, a cover sheet prominently 
marked ``Confidential Treatment Requested by [name]'' should be 
securely attached to each group of records submitted for which 
confidential treatment is requested. Each of the records transmitted in 
this matter should be individually marked with an identifying number 
and code so that they are separately identifiable. In some 
circumstances, such as when a person is testifying in the course of a 
Commission investigation or providing documents requested in the course 
of a Commission inspection, it may be impractical to submit a written 
request for confidential treatment at the time the information is first 
provided to the Commission. In no circumstances can the need to comply 
with the requirements of this section justify or excuse any delay in 
submitting information to the Commission. Rather, in such 
circumstances, the person testifying or otherwise submitting 
information should inform the Commission employee receiving the 
information, at the time the information is submitted or as soon 
thereafter as practicable, that the person is requesting confidential 
treatment for the information. The person shall then submit a written 
request for confidential treatment within 30 days of the submission of 
the information. If access is requested under the Freedom of 
Information Act with respect to material for which no timely request 
for confidential treatment has been made, it may be presumed that the 
submitter of the information has waived any interest in asserting that 
the material is confidential.
* * * * *
    (6) A request for confidential treatment (as distinguishing from 
the material that is the subject of the request) shall be considered a 
public document. When a submitter deems it necessary to include, in its 
request for confidential treatment, information for which it seeks 
confidential treatment, the submitter shall place that information in 
an appendix to the request.
    (7) On ten business days notice from the Assistant Secretary, a 
submitter shall submit a detailed written justification of a request 
for confidential treatment, as specified in paragraph (e) of this 
section. Upon request and for good cause shown, the Assistant Secretary 
may grant an extension of such time. The Assistant Secretary will 
notify the submitter that failure to provide timely a detailed written 
justification will be deemed a waiver of the submitter's opportunity to 
appeal an adverse determination.
    (8)(i) Requests for confidential treatment for any reasonably 
segregable material that is not exempt from public disclosure under the 
Freedom of Information Act, as implemented in Sec. 145.5, shall be 
summarily rejected under Sec. 145.9(d)(9). Requests for confidential 
treatment of public information contained in financial reports as 
specified in Sec. 1.10 shall not be processed. A submitter has the 
burden of specifying clearly and precisely the material that is the 
subject of the confidential treatment request. A submitter may be able 
to meet this burden in various ways, including:
    (A) Segregating material for which confidential treatment is being 
sought;
    (B) Submitting two copies of the submission: a copy from which 
material for which confidential treatment is being sought has been 
obliterated, deleted, or clearly marked and an unmarked copy; and
    (C) Clearly describing the material within a submission for which 
confidential treatment is being sought.
    (ii) A submitter shall not employ a method of specifying the 
material for which confidential treatment is being sought if that 
method makes it unduly difficult for the Commission to read the full 
submission, including all portion claimed to be confidential, in its 
entirely.
* * * * *
    (e) * * * (1) If the Assistant Secretary or his or her designee 
determines that a FOIA request seeks material for which confidential 
treatment has been requested pursuant to Sec. 145.9, the Assistant 
Secretary or his or her designee shall require the submitter to file a 
detailed written justification of the confidential request within ten 
business days (unless under Sec. 145.9(d)(7) an extension of time has 
been granted) of that determination

[[Page 27]]

unless, pursuant to an earlier FOIA request, a prior determination to 
release or withhold the material has been made, the submitter has 
already provided sufficient information to grant the request for 
confidential treatment; or the material is otherwise in the public 
domain.* * *
* * * * *

Appendix A to Part 145--[Amended]

    6. In Appendix A remove paragraph (b)(1) and redesignate paragraphs 
(b)(2) through (b)(13) as (b)(1) through (b)(12), respectively; and in 
paragraph (g) of Appendix A remove the phrase ``from the Division of 
Trading and Markets, Commodity Futures Trading Commission, 300 South 
Riverside Plaza, suite 1600 North, Chicago, Illinois 60606 or.''
    7. Amend Appendix B to Part 145 by revising paragraph (a)(3) to 
read as follows:

Appendix B to Part 145--Schedule of Fees

    (a) * * *
    (3) The Commission uses a variety of computer systems to support 
its operations and store records. Older systems of records, 
particularly systems involving large numbers of records, are maintained 
on a mainframe computer. More recently, systems have been developed 
using small, inexpensive, shared computer systems to store records. 
Systems of use in particular programmatic and administrative operations 
may also store records on the workstation computers assigned to 
particular staff members. For searches of records stored on the 
Commission's mainframe computer, the use of computer processing time 
will be charged at $456.47 for each hour, $7.61 for each minute, and 
$0.1268 for each second of computer processing time indicated by the 
job accounting log printed with each search. When searches require the 
expertise of a computer specialist, staff time for programming and 
performing searches will be charged at $32.00 per hour. For searches of 
records stored on personal computers used as workstations by Commission 
staff and shared access network servers, the computer processing time 
is included in the search time for the staff member using that 
workstation as set forth in the other paragraphs under paragraph (a) of 
Appendix B.
* * * * *

PART 147--OPEN COMMISSION MEETINGS

    8. The authority for part 147 continues to read:

    Authority: Sec. 3(a), Pub. L. 94-409, 90 Stat. 1241 (5 U.S.C. 
552b), sec. 101(a)(11), Pub. L. 93-463, 88 Stat. 1391 (7 U.S.C. 
4a(j) (Supp. V, 1975)), unless otherwise noted.


Sec. 147.3  [Amended]

    9. In Sec. 147.3 make the following changes:
    a. Remove the introductory text of paragraph (b)(4)(i).
    b. In paragraphs (b)(4)(i)(A)(2) and (5) remove the following 
phrase: ``Provided, The procedure set forth in 17 CFR 1.10(g) is 
followed:''.
    c. In paragraphs (b)(4)(i)(A)(3) and (4) remove the following 
phrase: ``, provided, the procedure set forth in Sec. 1.10(g) of this 
chapter is followed.''
    d. In paragraph (b)(4)(i)(A)(6) remove the following phrase: ``, if 
the procedure set forth in Sec. 1.10(g) of this chapter is followed.''
    e. In paragraph (b)(4)(i)(A)(8) remove the following phrase: 
``provided the procedure set forth in Sec. 31.13(m) of this chapter is 
followed.''

    Issued by the Commission.

    Dated: December 28, 1998.
Jean A. Webb,
Secretary of the Commission, Commodity Futures Trading Commission.
[FR Doc. 98-34732 Filed 12-31-98; 8:45 am]
BILLING CODE 6351-01-M