[Federal Register Volume 84, Number 183 (Friday, September 20, 2019)]
[Proposed Rules]
[Pages 49490-49492]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20361]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 13

RIN Number 3038-AE90


Public Rulemaking Procedures

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commodity Futures Trading Commission (the ``Commission'') 
is proposing to amend part 13 of its regulations to eliminate the 
provisions that set forth the procedure for the formulation, amendment, 
or repeal of rules or regulations. Because the Administrative Procedure 
Act (``APA'') governs the Commission's rulemaking process, the 
Commission believes that it is unnecessary to codify the rulemaking 
process in a Commission regulation. Part 13, as amended, will be 
comprised solely of the procedure for filing petitions for rulemakings 
as the APA does not address this process.

DATES: Comments must be received on or before October 21, 2019.

ADDRESSES: You may submit comments, identified by RIN number 3038-AE90, 
by any of the following methods:
     Agency Website: http://comments.cftc.gov;
     Mail: Secretary of the Commission, Commodity Futures 
Trading Commission, Three Lafayette Centre, 1155 21st Street NW, 
Washington, DC 20581;
     Hand Delivery/Courier: Same as Mail, above.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow instructions for submitting comments.
    All comments must be submitted in English, or if not, accompanied 
by an English translation. Comments will be posted as received to 
http://www.cftc.gov. You should submit only information that you wish 
to make available publicly. If you wish the Commission to consider 
information that may be exempt from disclosure under the Freedom of 
Information Act, a petition for confidential treatment of the exempt 
information may be submitted according to the procedures established in 
CFTC regulations at 17 CFR part 145.
    The Commission reserves the right, but shall have no obligation, to 
review, pre-screen, filter, redact, refuse or remove any or all of your 
submission from http://www.cftc.gov that it may deem to be 
inappropriate for publication, such as obscene language. All 
submissions that have been redacted or removed that contain comments on 
the merits of the rulemaking will be retained in the public comment 
file and will be considered as required under the Administrative 
Procedure Act and other applicable laws, and may be accessible under 
the Freedom of Information Act.

FOR FURTHER INFORMATION CONTACT: Herminio Castro, Senior Special 
Counsel, (202) 418-6705, [email protected]; Dhaval Patel, Counsel, (202) 
418-5125, [email protected]; Office of the General Counsel, Commodity 
Futures Trading Commission, 1155 21st Street NW, Washington, DC 20581.

SUPPLEMENTARY INFORMATION: 

I. Discussion

    Part 13 sets forth procedures for the formulation, amendment, or 
repeal of rules or regulations insofar as those procedures directly 
affect the public.\1\ The Commission promulgated part 13 pursuant to 
former section 4a(j) of the Commodity Exchange Act (``CEA''),\2\ which 
is currently section 2(a)(12) of the CEA.\3\ Section 2(a)(12) states 
that the Commission is authorized to promulgate such rules and 
regulations as it deems necessary to govern the operating procedures 
and conduct of business of the Commission. This section authorizes, but 
does not require, the Commission to promulgate regulations governing 
its rulemaking process. The Commission first adopted part 13 in 1976 
and has not revised part 13 since.
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    \1\ 17 CFR part 13.
    \2\ See 41 FR 17536 (Apr. 27, 1976); Public Law 93-463, Sec. 
101(a)(11), 88 Stat. 1391, 7 U.S.C. 4a(j).
    \3\ 7 U.S.C. 2(a)(12).
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    The Commission would eliminate the provisions in part 13 that set 
forth the process for rulemakings.\4\ As originally adopted, part 13 
was intended to track the APA rulemaking process. However, in its 
current form, part 13 does not fully conform to the APA, which may 
create ambiguity and confusion about the procedures to be followed by 
the Commission in rulemakings.\5\ To be clear, the APA governs 
Commission rulemakings. Specifically, section 553 of the APA provides 
for the procedures to be followed by the Commission when promulgating 
formal and informal rulemakings.\6\ Because the APA governs the 
Commission's rulemaking process, the Commission believes that it is 
unnecessary to codify the rulemaking process in a Commission regulation 
that would be duplicative of the APA.
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    \4\ The provisions being eliminated are 17 CFR 13.1, 13.3, 13.4, 
13.5, and 13.6. 17 CFR 13.2 is being retained and renumbered as 17 
CFR 13.1.
    \5\ For example, section 13.4(b) allows formal rulemakings to be 
conducted through oral presentation or written submissions; in 
contrast, APA sections 556 and 557 require a trial-like process to 
be followed for formal rulemakings.
    \6\ See 5 U.S.C. 551 et seq.; Attorney General's Manual on the 
Administrative Procedure Act 9 (1947).
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    The Commission would retain regulation 13.2, which is supplemental 
to the APA. Regulation 13.2 describes the procedures by which anyone 
who wishes the Commission to consider the issuance, amendment, or 
repeal of a rule may petition the Commission. Specifically, regulation 
13.2 provides instructions as to where the petition should be sent, 
what information should be included in the petition, and prescribes the 
manner in which the Commission must respond to such petition. The 
Commission believes that retaining this provision is necessary as the 
APA does not address this process. Furthermore, a formalized process 
for petitions would promote consistency and transparency in the way 
that the Commission handles petitions for rulemakings.
    Accordingly, this proposed rulemaking would remove regulations 
13.1, 13.3, 13.4, 13.5, and 13.6 from part 13 and retain and renumber 
regulation 13.2 as regulation 13.1. In addition, the Commission would 
revise the authority citation for part 13. The current authority cited 
for part 13, 7 U.S.C. 4a(j), is incorrect due to subsequent renumbering 
and is being changed to 7 U.S.C. 2(a)(12).

II. Related Matters

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act \7\ requires federal agencies to 
consider whether the rules they propose will have a significant 
economic impact on a substantial number of small entities and, if so, 
to provide a regulatory flexibility analysis regarding the economic 
impact on those entities. This rule would remove unnecessary and 
potentially confusing provisions of part 13 and update the authority 
cited. As

[[Page 49491]]

stated above, section 553 of the APA provides for the procedures to be 
followed by the Commission when promulgating formal and informal 
rulemakings.\8\ Because the APA governs the Commission's rulemaking 
process, the proposed changes would not change how the Commission's 
rulemaking process is conducted. Likewise, the proposed rule would not 
have a significant economic impact on how small entities would conduct 
themselves in the promulgation of the Commission's rules. The 
amendments being proposed would not affect how entities participate in 
the rulemaking process to submit data, views or arguments. Moreover, 
the proposal would retain the current process for submitting petition 
for rulemakings to the Commission. Accordingly, the Chairman, on behalf 
of the Commission, hereby certifies pursuant to 5 U.S.C. 605(b) that 
the proposed regulations will not have a significant economic impact on 
a substantial number of small entities.
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    \7\ 5 U.S.C. 601 et seq.
    \8\ See 5 U.S.C. 551 et seq.; Attorney General's Manual on the 
Administrative Procedure Act 9 (1947).
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B. Paperwork Reduction Act

    The Paperwork Reduction Act (``PRA'') \9\ imposes certain 
requirements on federal agencies in connection with their conducting or 
sponsoring any collection of information. This proposed rule does not 
contain any new collection of information requirements within the 
meaning of the PRA. Accordingly, the requirements imposed by the PRA 
are not applicable to this rule.
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    \9\ 5 U.S.C. 3501 et seq.
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C. Cost-Benefit Considerations

    Section 15(a) of the CEA \10\ requires the Commission to consider 
the costs and benefits of its actions before promulgating a regulation 
under the CEA or issuing certain orders. Section 15(a) further 
specifies that the 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 the futures markets; (3) price discovery; (4) 
sound risk management practices; and (5) other public interest 
considerations. The Commission considers the costs and benefits 
resulting from its discretionary determinations with respect to the 
section 15(a) factors.
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    \10\ 7 U.S.C. 19(a).
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    As discussed above, the proposed rule removes redundant and 
potentially confusing provisions. The proposal is a procedural rule 
that would not make any substantive change to the Commission rulemaking 
process. By simplifying the rules setting forth the procedures to be 
followed in rulemaking proceedings, the Commission will eliminate any 
confusion about the rulemaking procedures that apply, and thus make 
them more efficient and understandable to the public and market 
participants. Further, the proposed rule should impose no costs on the 
public since the amendments being proposed should not alter how the 
public participates in the rulemaking process to submit data, views or 
arguments.
    Because the APA governs the Commission's rulemaking process, the 
proposed changes would not affect the protection of market participants 
and the public as they would continue to enjoy the ability to petition 
for rulemaking and otherwise participate in the Commission's rulemaking 
process. Further, as a procedural rule, the proposal would not impact 
the efficiency, competitiveness, and financial integrity of the futures 
markets, price discovery, or sound risk management practices. Finally, 
it is in the public interest to make the Commission's rulemaking 
procedures more efficient and understandable to the public and market 
participants.

D. Antitrust Considerations

    Section 15(b) of the CEA requires the Commission to take into 
consideration the public interest to be protected by the antitrust laws 
and endeavor to take the least anticompetitive means of achieving the 
objectives of the CEA, in issuing any order or adopting any Commission 
rule or regulation. The Commission does not anticipate that the 
proposed amendments to part 13 will result in anticompetitive behavior 
as the Commission would simply be updating part 13 to remove 
unnecessary and potentially confusing provisions and making technical 
changes.

List of Subjects in 17 CFR Part 13

    Administrative practice and procedure, Rulemaking procedures.

    For the reasons stated in the preamble, the Commodity Futures 
Trading Commission proposes to amend 17 CFR part 13 as set forth below.

0
1. Revise part 13 to read as follows:

PART 13--RULEMAKING PROCEDURES

Sec.
13.1 Petition for issuance, amendment, or repeal of a rule.

    Authority:  7 U.S.C. 2(a)(12).


Sec.  13.1  Petition for issuance, amendment, or repeal of a rule.

    Any person may file a petition with the Secretariat of the 
Commission for the issuance, amendment or repeal of a rule of general 
application. The petition shall be directed to Secretariat, Commodity 
Futures Trading Commission, Three Lafayette Centre, 1155 21st Street 
NW, Washington, DC 20581, and shall set forth the text of any proposed 
rule or amendment or shall specify the rule the repeal of which is 
sought. The petition shall further state the nature of the petitioner's 
interest and may state arguments in support of the issuance, amendment 
or repeal of the rule. The Secretariat shall acknowledge receipt of the 
petition, refer it to the Commission for such action as the Commission 
deems appropriate, and notify the petitioner of the action taken by the 
Commission. Except in affirming a prior denial or when the denial is 
self-explanatory, notice of a denial in whole or in part of a petition 
shall be accompanied by a brief statement of the grounds of denial.

    Issued in Washington, DC, on September 16, 2019, by the 
Commission.
Robert Sidman,
Deputy Secretary of the Commission.
    Note: The following appendices will not appear in the Code of 
Federal Regulations.

Appendices to Public Rulemaking Procedures--Commission Voting Summary 
and Commissioner's Statement

Appendix 1--Commission Voting Summary

    On this matter, Chairman Tarbert and Commissioners Quintenz, 
Behnam, Stump, and Berkovitz voted in the affirmative. No 
Commissioner voted in the negative.

Appendix 2--Concurring Statement of Commissioner Rostin Behnam

    I respectfully concur with the Commodity Futures Trading 
Commission's (the ``Commission'' or ``CFTC'') proposal to amend part 
13 of the Commission's Regulations (the ``Proposal''). The Proposal 
aims to succinctly and unambiguously confirm that the Commission's 
rulemaking process is governed by the Administrative Procedure Act 
(``APA'').
    As explained in the Proposal, the provisions of part 13 were 
originally adopted in 1976 as a replacement for the Rules of 
Practice of the CFTC's predecessor agency, the Commodity Exchange 
Authority, which would remain in effect ``unless and until'' 
terminated, modified, or suspended by the CFTC. In condensing the 
APA framework into part 13, the CFTC \1\ perhaps went further

[[Page 49492]]

than needed to both ensure the public's awareness of the new 
agency's purview and to provide it the clearest understanding of the 
means to initiate and participate in the rulemaking process. However 
unnecessary it may seem at today's point in the digital age, 
directly providing interested persons a truncated version of the 
applicable operating rules so that they may exercise their rights to 
participate in the rulemaking process and hold their regulators 
accountable was laudable. Eager to effectuate its mandate and build 
its regulatory footprint, the Commission clearly understood the 
value in ensuring the barriers to participation were few.
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    \1\ Commodity Futures Trading Commission Act of 1974, Public Law 
93-463, 411, 88 Stat. 1389, 1414 (1974).
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    I am pleased today that the Commission has chosen to publish the 
Proposal for public comment. The removal of the part 13 regulations 
viewed as duplicative of the APA's statutorily prescribed procedures 
for agency rulemakings and adjudications--which is almost part 13 in 
its entirety--could be accomplished without engaging the public in 
notice-and-comment on grounds that such regulations are strictly 
technical and administrative in nature. However, the Commission has 
recognized the importance of ensuring that as we move forward in 
improving the efficacy of our regulations, they remain current and 
reflective of our statutory mandate, which includes adhering to 
process and providing transparency. Whereas here we are preparing to 
remove the rules setting forth the Commission's interpretation as to 
the application of the requirements of the APA with regard to 
information rulemaking \2\--with the intent to rely exclusively and 
unambiguously on the APA, it will be useful to hear from the public 
as to whether there remain matters of importance that ought to be 
considered before we move forward.
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    \2\ See 5 U.S.C. 553.
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    This Proposal is consistent with the Department of Treasury's 
October 2017 Report on Capital Markets in which it encouraged the 
CFTC to make full use of its ability to solicit public comment in 
order to better signal to the public what information may be 
relevant.\3\ To say that the various provisions of part 13 are 
unnecessary does not mean they are useless. To the extent part 13 
may in some instances accord more elaborate procedures than the APA 
sets as the minimum, I hope that the Commission is alerted thereto.
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    \3\ U.S. Department of the Treasury, A Financial System That 
Creates Economic Opportunities: Capital Markets at 218 (Oct 2017), 
https://www.treasury.gov/press-center/press-releases/Documents/A-Financial-System-Capital-Markets-FINAL-FINAL.pdf.
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    While I have some concerns about the guidance and plainly 
written information to be lost upon the almost wholesale elimination 
of part 13, I am pleased that the Chairman and the Commission staff 
will be publishing a primer on the Commission's rulemaking process 
to ensure that our governing procedures remain accessible to all 
interested persons.

[FR Doc. 2019-20361 Filed 9-19-19; 8:45 am]
BILLING CODE 6351-01-P