[Federal Register Volume 67, Number 103 (Wednesday, May 29, 2002)]
[Rules and Regulations]
[Pages 37322-37323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-13300]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 11


Delegation of Authority to the Director of the Division of 
Enforcement To Institute Subpoena Enforcement Proceedings

AGENCY: Commodity Future Trading Commission.

ACTION: Final rule.

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SUMMARY: The Commodity Futures Trading Commission (Commission or CFTC) 
is amending regulations to delegate authority to the Director of the 
Division of Enforcement, with the concurrence of the General Counsel or 
General Counsel's delegee, to institute subpoena enforcement 
proceedings in federal court to seek an order compelling the attendance 
and testimony of witnesses and the production of documents pursuant to 
a validly-issued Commission subpoena and to clarify that 
notwithstanding the delegated authority, as he believes appropriate, 
the Director may submit any proposed subpoena enforcement action for 
Commission consideration and nothing in this delegation prohibits the 
Commission from exercising the delegated authority. This amendment will 
expedite the investigation process by enabling the staff more quickly 
to compel individuals or entities to comply with Commission subpoenas 
and conserve Commission resources. This action relates solely to the 
Commission's organization, procedure and practice.

EFFECTIVE DATE: June 28, 2002.

FOR FURTHER INFORMATION CONTACT: Gretchen L. Lowe, Counselor to the 
Director, Commodity Futures Trading Commission, 1155 21st Street, NW, 
Washington, DC 2058. Telephone: (202) 418-5379.

SUPPLEMENTARY INFORMATION:

I. Rule 11.4(e)

    The CFTC today announced an amendment to its rules governing 
investigations, and in particular, subpoenas. The Commission is 
authorized to promulgate this rule under sections 2a(11) and 8a(5), of 
the Commodity Exchange Act.\1\
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    \1\ Section 2a(11), 7 U.S.C. 4a(j), authorizes the Commission to 
``promulgate such rules and regulations as it deems necessary to 
govern the operating procedures and conduct of the business of the 
Commission.'' Section 8a(5), 7 U.S.C. 12a(5) gives the Commission 
the authority ``to make and promulgate such rules and regulations 
as, in the judgment of the Commission, are reasonably necessary to 
effectuate any of the provisions or to accomplish any of the 
purposes of [the Act.].''
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    The amendment to Rule 11.4,\2\ adding paragraph (e), authorizes the 
Director of Division of Enforcement, with the concurrence of the 
General Counsel or General Counsel's delegee, to institute subpoena 
enforcement proceedings in federal court to seek an order compelling 
individuals or entities to comply with Commission subpoenas. This 
delegation will expedite the investigation process and conserve 
Commission resources by enabling the Division more expeditiously to 
seek to compel compliance with Commission subpoenas in cases where the 
entry of a court order is necessary. Notwithstanding this delegation of 
authority, in instances where potential subpoena enforcement actions 
raise any novel or complex issues, the Division may consult with the 
Commission before the action is filed in federal court.
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    \2\ 17 CFR 11.4.
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    The Commission has determined that this amendment relates solely to 
agency organization, procedure and practice and does not relate to a 
substantive rule. Therefore, the provisions of the Administrative 
Procedure Act, 5 U.S.C. 553, which generally require notice of proposed 
rulemaking and opportunity for public participation, are not 
applicable. The Commission further finds that there is good cause to 
make this rule effective immediately upon publication in the Federal 
Register because it will expedite the investigation process and 
conserve Commission resources.

II. Related Matters

A. Consideration of Costs and Benefits and Antitrust Laws

    Section 15 of the Commodity Exchange Act requires the Commission to 
consider the costs and benefits of its action as well as the public 
interest to be protected by the antitrust laws before adopting a rule 
or regulation under the Act. Because the amendments to part 140 relate 
solely to agency organization, procedure and practice, they do not 
directly implicate the specific areas of concern identified in Section 
15. In any event, the Commission has considered the costs and benefits 
of this amendment and has concluded that the rule is fully consistent 
with the public interest and with the requirements and prohibitions of 
the Commodity Exchange Act, as amended, 7 U.S.C. 4a(f) and (j), 12a(5) 
and 13.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., 
requires that agencies, in proposing rules in accordance with 5 U.S.C. 
553, consider the impact of those rules on small businesses. The 
Commission has determined that the provisions of the RFA do not apply 
to the promulgation of this regulation since it relates solely agency 
organization, procedure and practice.

C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (RPA), 4 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 RPA, does not apply to 
these rules. This rule amendment does not contain information 
collection requirements as defined by the RPA.

List of Subjects in 17 CFR Part 11

    Administrative practice and procedure, Commodity futures, 
Investigations, Rules relating to investigations.


    In consideration of the foregoing and pursuant to the authority 
contained in the Act, and in particular, Sections 2a and 8a, 7 U.S.C. 
2(a) and 8a, the Commission hereby amends Part 11 of Chapter 1 of Title 
17 of the Code of Federal Regulations as follows:

PART 11--RULES RELATING TO INVESTIGATIONS

    1. The authority citation for Part 11 continues to read as follows:

    Authority: 7 U.S.C. 2(a), 4a(j), 9 and 15, 12, 12a(5), 12(f).


    2. Section 11.4 is amended by adding paragraphs (e) and (f) to read 
as follows:


[sect] 11.4  Subpoenas.

* * * * *
    (e) Pursuant to the authority granted under Sections 2(a)(11) and 
8a(5) of the Act, the Commission hereby delegates to the Director of 
the Division of Enforcement, with the concurrence of the General 
Counsel or General Counsel's delegee, and until such time as the 
Commission orders otherwise, the authority to invoke, in case of 
contumacy by, or refusal to obey a subpoena issued to, any person, the 
aid

[[Page 37323]]

of any court of the United States within the jurisdiction in which the 
investigation or proceeding is conducted, or where such person resides 
or transacts business, in requiring the attendance and testimony of 
witnesses and the production of books, papers, correspondence, 
memoranda and other records pursuant to subpoenas issued in accordance 
with section 6(c) of the Act for the purpose of securing effective 
enforcement of the provisions of this Act, for the purpose of any 
investigation or proceeding under this Act, and for the purpose of any 
action taken under section 12(f) of the Act.
    (f) Notwithstanding the delegation of authority to the Director set 
forth in paragraph (e) of this section, in any case in which the 
Director believes it appropriate the matter may be submitted to the 
Commission for its consideration. Nothing in this section shall 
prohibit the Commission from exercising the authority delegated in 
paragraph (e) of this section.

    Issued in Washington, DC on May 22, 2002, by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 02-13300 Filed 5-28-02; 8:45 am]
BILLING CODE 6351-01-M