[Federal Register Volume 72, Number 148 (Thursday, August 2, 2007)]
[Rules and Regulations]
[Pages 42276-42277]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-14922]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 171

RIN 3038-AC43


Rules Relating To Review of National Futures Association 
Decisions in Disciplinary, Membership Denial, Registration and Member 
Responsibility Actions

AGENCY: Commodity Futures Trading Commission.

ACTION: Final Rule.

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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 
Part 171.

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

[[Page 42277]]

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.

Related Matters

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 
businesses.

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, 
Commodity futures.


0
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

0
1. The authority citation for Part 171 continues to read as follows:

    Authority: 7 U.S.C. 4a, 12a, and 21.

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2. Section 171.9 is amended by revising paragraph (b) to read as 
follows:


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 
Commission.
Eileen A. Donovan,
Acting Secretary of the Commission.
 [FR Doc. E7-14922 Filed 8-1-07; 8:45 am]
BILLING CODE 6351-01-P