[Federal Register Volume 76, Number 197 (Wednesday, October 12, 2011)]
[Rules and Regulations]
[Pages 63187-63188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-25898]


=======================================================================
-----------------------------------------------------------------------

COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 12


Authority of Judgment Officers to Hear Cases

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Commodity Futures Trading Commission (``Commission'') is 
amending its regulations to authorize any Commission Judgment Officer 
to conduct formal decisional proceedings. This action will promote the 
efficient use of the Commission's budget and personnel resources.

DATES: Effective Date: October 12, 2011.

FOR FURTHER INFORMATION CONTACT: Laura Richards, Office of the General 
Counsel, U.S. Commodity Futures Trading Commission, Three Lafayette 
Centre, 1155 21st Street, NW., Washington, DC 20581. Telephone: 202-
418-5126. E-mail: [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    Section 14(b) of the Commodity Exchange Act, 7 U.S.C. 18(b), 
authorizes the Commodity Futures Trading Commission to promulgate 
rules, regulations, and orders as it deems necessary or appropriate for 
the efficient and expeditious administration of its reparations 
program. Pursuant to Section 14(b), the Commission is amending Rule 
12.26(c) to authorize any Commission Judgment Officer to conduct formal 
decisional proceedings under Subpart E of the Part 12 Rules. Rule 
12.26(c) currently provides that formal decisional proceedings are to 
be conducted by an Administrative Law Judge (``ALJ''). A formal 
decisional proceeding is held when the amount claimed in damages 
exceeds $30,000 and the parties have not elected a voluntary decisional 
proceeding under Subpart C. Voluntary decisional proceedings are heard 
by a Judgment Officer without regard to the amount in controversy. See 
Rule 12.26(a). Cases where the amount is controversy is less than 
$30,000 are conducted as summary decisional proceedings by a Judgment 
Officer under Subpart D. See Rule 12.26(b).
    From time to time, the Commission has raised the ceiling for claims 
eligible to be heard as summary proceedings, most recently from $10,000 
to $30,000.\1\ Currently, most reparations cases filed involve amounts 
less than $30,000 and are assigned to the Judgment Officer. Based on 
its experience with the reparations program, the Commission has 
determined that the current limit of $30,000 on the claims that may be 
assigned to a Judgment Officer is no longer necessary or appropriate. 
The Commission also has concluded that its Judgment Officer will not be 
overburdened if reparations cases eligible to be heard as formal 
decisional proceedings are added to his docket. If necessary, the 
Commission may designate additional staff as decisional employees 
assigned to hear reparations cases. See Rule 12.2 (defining 
``Commission decisional employee'' to mean, inter alia, ``[a] Judgment 
Officer * * * and other Commission employees who may be assigned to 
hear or to participate in the decision of a particular matter'').
---------------------------------------------------------------------------

    \1\ Rules Relating to Reparation Proceedings, 59 FR 9631, 9633 
(Mar. 1, 1994) (Final Rule) (increasing the ceiling to $30,000 and 
otherwise amending Part 12).
---------------------------------------------------------------------------

    There will be no change to the procedures applicable to formal 
decisional proceedings and, therefore, no impact on any complainant or 
respondent. Parties filing or defending claims exceeding $30,000 will 
have the same procedural safeguards and face the same obligations as 
before, and the Judgment Officer will exercise all the authority 
previously held by Commission ALJs and be subject to the same 
obligations.

II. Related Matters

A. No Notice Required Under 5 U.S.C. 553

    The Commission has determined that this rule is exempt from the 
provisions of the Administrative Procedure Act, 5 U.S.C. 553, which 
generally requires notice of proposed rulemaking and provides other 
opportunities for public participation. In accordance with the 
exemptive language of 5 U.S.C. 553, this rule pertains to ``rules of 
agency organization, procedure or practice,'' as to which there exists 
agency discretion not to provide notice. If made effective immediately, 
this rule will promote efficiency and facilitate the Commission's core 
mission without imposing a new burden. Thus, the Commission has 
determined to make the rule effective immediately. 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. 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 comment.'' 5 U.S.C. 601(2). Since this rule is not being issued 
pursuant to section 553(b), it does not qualify as a ``rule'' as 
defined in the RFA, and the analysis and the certification process in 
that section do not apply.

C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1980 (``PRA''), 44 U.S.C. 3501 et 
seq., imposes certain requirements on Federal agencies, including the 
Commission, in connection with conducting or sponsoring any collection 
of information as defined by the PRA. Amended Rule 12.26(c) is not 
associated with an information collection as defined by the PRA. 
Accordingly, the Commission certifies that, for the purposes of the 
PRA, this new

[[Page 63188]]

delegation of authority does not impose a burden within the meaning of 
the PRA.

D. Cost-Benefit Analysis

    Section 15(a) of the Commodity Exchange Act (``Act''), 7 U.S.C. 
19(a), requires the Commission to consider the costs and benefits of 
its action before issuing new regulations under the Act. Section 15(a) 
does not require the Commission to quantify the costs and benefits of a 
new regulation or to determine whether the benefits of the regulation 
outweigh its costs. Nor does it require that each rule be analyzed in 
isolation when that rule is a component of a larger package of rules or 
rule revisions. Rather, section 15(a) requires the Commission to 
``consider the costs and benefits'' of the subject regulation 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. The Commission may, in its discretion, give greater 
weight to any one of the five enumerated areas of concern and may, 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 Act.
    The Commission considered the costs and benefits of this rule and 
has determined that amended Rule 12.26(c) will enhance efficiency by 
aligning the Commission's staff more closely with its workload.

List of Subjects in 17 CFR Part 12

    Administrative practice and procedure, Commodity futures, Consumer 
protection.

    Accordingly, 17 CFR Part 12 is amended as follows:

PART 12--RULES RELATING TO REPARATIONS

0
1. The authority citation for part 12 continues to read as follows:

    Authority: 7 U.S.C. 2(a)(12), 12a(5) and 18.


0
2. Revise Sec.  12.26(c) to read as follows:


Sec.  12.26  Commencement of a reparation proceeding.

* * * * *
    (c) Commencement of formal decisional proceeding. Where the amount 
claimed as damages in the complaint or as counterclaims exceeds 
$30,000, exclusive of interest and costs, and either a complainant or a 
respondent in the complaint, answer or reply, has elected the formal 
decisional procedure pursuant to subpart E of this part, and has paid 
the filing fee required by Sec.  12.25, the Director of the Office of 
Proceedings shall, if in his opinion the facts warrant taking such 
action, forward the pleadings and the materials of record to the 
Proceedings Clerk for a proceeding to be conducted in accordance with 
subpart E of this part. The Proceedings Clerk shall forthwith notify 
the parties of such action. Such notification shall be accompanied by 
an order issued by the Proceedings Clerk requiring the parties to 
complete all discovery, as provided in subpart B of this part, within 
50 days thereafter. A formal decisional proceeding commences upon 
service of such notification and order. As soon as practicable after 
service of such notification, the Proceedings Clerk shall assign the 
case to a Judgment Officer. All provisions of this part that refer to 
and grant authority to or impose obligations upon an Administrative Law 
Judge shall be read as referring to and granting authority to and 
imposing obligations upon the Judgment Officer.

    Issued in Washington, DC, on September 21, 2011, by the 
Commission.
David A. Stawick,
Secretary of the Commission.
[FR Doc. 2011-25898 Filed 10-11-11; 8:45 am]
BILLING CODE P