Federal Register, Volume 84 Issue 183 (Friday, September 20, 2019) 
[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