Trading Hours

COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 1

Trading Hours

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'') is

making amendments to its Regulation 1.41(k) to allow additional changes

in trading hours to be deemed approved by the Commission one business

day after receipt of written notice of a change in accordance with the

regulation.

EFFECTIVE DATE: July 22, 1998.

FOR FURTHER INFORMATION CONTACT:

Lois J. Gregory, Attorney-Advisor, Contract Markets, Division of

Trading and Markets, Commodity Futures Trading Commission, Three

Lafayette Centre, 1155 21st Street, NW, Washington, D.C. 20581.

Telephone: (202) 418-5483.

SUPPLEMENTARY INFORMATION: Regulation 1.41(k) allows a change in

trading hours which does not permit trading to open before 7:00 a.m. or

close after 6:00 p.m. local time in the city where the contract market

is located to be deemed approved by the Commission at the close of

business one business day after properly labeled written notice of the

change is received by the Commission if the change is not inconsistent

with the Commodity Exchange Act or the Commission's other regulations.

Trading hour changes which do permit trading to open before 7:00 a.m.

or close after 6:00 p.m. local time must be submitted to the Commission

for approval pursuant to Regulation 1.41(b).

On May 1, 1998 (63 FR 24142), the Commission published for comment

proposed amendments to Regulation 1.41(k) to allow additional changes

in trading hours, as set forth below, to be deemed approved by the

Commission one business day after receipt of written notice of a change

in accordance with the regulation. The comment period for the proposal

was 15 days and closed on May 18, 1998. The Commission received two

comments in response to the notice and both were supportive of the

proposal.

The Commission has determined to amend Regulation 1.41(k) in the

manner previously notice. As revised, Regulation 1.41(k) will allow

additional changes is trading hours to be deemed approved by the

Commission one business day after receipt of written notice of a change

in accordance with the subsection. Specifically, if a contract market

has previously received Commission approval for trading between 6:00

p.m. and 7:00 a.m. in at least one of its designated contracts, it may

submit all subsequent changes in trading hours pursuant to Regulation

1.41(k). Thus, under revised 1.41(k), the first time a contract market

proposes changing trading hours for any of its designated contracts to

fall between the hours of 6:00 p.m. to 7:00 a.m., the proposal must be

submitted to the Commission for approval pursuant to Regulation

1.41(b). The Commission will review such initial proposal to ensure

that adequate systems and procedures are in place to accommodate the

expanded trading hours. Matters to be addressed will include, among

other matters, clearing, margin, market data, and surveillance

programs. Any subsequent change to trading hours can be approved under

the expedited procedures of Regulation 1.41(k).

The Commission notes that listing a contract for trading on an

automated trading system will constitute more than a change in trading

hours. It will also be a change in the method of trading. Accordingly,

neither the initial establishment of an electronic trading system nor

the subsequent listing of additional contracts will be eligible for

treatment under Regulation 1.41(k). However, changes in the trading

hours of a contract that is already listed on an electronic system will

be eligible for treatment under revised Regulation 1.41(k).

Related Matters

A. Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (Pub. L. 104-13 (May 13, 1995))

imposes certain requirements on federal agencies (including the

Commission) in connection with their conducting or sponsoring any

collection of information as defined by the Paperwork Reduction Act.

While this proposed regulation has no burden, the group of regulations

(3038-0022), of which this is a part has the following burden:

Average burden hours per response, 3,546.26

Number of Respondents, 10,971

Frequency of response, on occasion

Copies of the OMB approved information collection package

associated with this regulation may be obtained from the Desk Officer,

CFTC, Office of Management and Budget, Room 10202, NEOB Washington DC

20503, (202) 395-7340.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) 5 U.S.C. 601 et seq., requires

that agencies, in adopting regulations, consider the impact of those

regulations on small businesses. The only entity this rulemaking will

affect would be contract markets. The Commission has previously

determined that contract markets are not ``small entities'' for

purposes of the Regulatory Flexibility Act, (47 FR 18618 (April 30,

1982)). Therefore, the Chairperson, on behalf of the Commission, hereby

certifies, pursuant to 5 U.S.C. 605(b), that the action taken herein

will not have a significant economic impact on a substantial number of

small entities.

List of Subjects in 17 CFR Part 1

Brokers, Commodity futures, Consumers protection, Reporting and

recordkeeping requirements, Segregation requirements.

In consideration of the foregoing and pursuant to the authority

contained in the Commodity Exchange Act and, in particular Section 8a

thereof, 7 U.S.C. 12a, the Commission hereby amends Part 1 of Chapter I

of Title 17 of the Code of Federal Regulations as follows:

PART 1--GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT

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

Authority: 7 U.S.C. 1a, 2, 2a, 4, 4a, 6, 6a, 6b, 6c, 6d, 6e, 6f,

6g, 6h, 6i, 6j, 6k, 6l, 6m, 6n, 6o, 6p, 7, 7a, 7b, 8, 9, 12, 12a,

12c, 13a, 13a-1, 16, 16a, 19, 21, 23, and 24.

2. Section 1.41 is amended by revising paragraph (k)(1) to read as

follows: 1.41 Contract market rules; submission of rules to the

Commission, exemption of certain rules.

* * * * *

(k) Trading Hours. (1) Notwithstanding the provisions of paragraph

(b) of this section and except in connection with an initial listing of

a contract on an automated trading system, all changes in trading hours

shall be deemed approved by the Commission at the close of business one

business day after written notice of such a change is received by the

Commission if:

(i) The change is not inconsistent with any provision of the Act or

the Commission's regulations;

(ii) For a change that permits trading anytime between 6:00 p.m.

and 7:00 a.m. local time in the city where the contract market is

located, the contract

[[Page 33849]]

market has previously received Commission approval for trading between

such hours in at least one of its designated contracts; and

(iii) The contract market labels the written notice as being

submitted pursuant to paragraph (k) of this section.

* * * * *

Issued in Washington D.C. on June 16, 1998, by the Commission.

Jean A. Webb,

Secretary of the Commission.

[FR Doc. 98-16520 Filed 6-19-98; 8:45 am]

BILLING CODE 6351-01-M