Commission Records and Information; Open Commission Meetings

COMMODITY FUTURES TRADING COMMISSION

17 CFR Parts 145 and 147

Commission Records and Information; Open Commission Meetings

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'' or

``CFTC'') adopts final rules relating to Commission records and

information. The rules update and streamline procedures in light of the

Commission's experience in the past several years and amend rules

regarding open Commission meetings to conform to these modifications.

EFFECTIVE DATE: February 3, 1999.

FOR FURTHER INFORMATION CONTACT:

Eileen Donovan, Attorney-Advisor, Office of the Secretariat, (202) 418-

5096, Commodity Futures Trading Commission, Three Lafayette Centre,

1155 21st Street, NW, Washington, DC 20581. Facsimile: (202) 418-5543.

Electronic mail: [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

By notice published at 61 FR 66949 on December 19, 1996, the

Commission requested comments from the public regarding its proposal to

modify its rules relating to Commission records and information. The

proposal was based on the Commission's experience since the rules

implementing the Freedom of Information Act (``FOIA''), 5 U.S.C. 552

(1997), had been revised October 5, 1989 and the Commission's desire to

conform the rules to its practice and the Freedom of Information Reform

Act of 1986 (Pub. L. 99-570, Secs. 1801-1804). The Commission proposed

modifying the terms of Section 145.5(g)(1) to conform to Exemption 7, 5

U.S.C. 552(b)(7), relating to requests for records compiled for law

enforcement purposes, modifying the procedures regarding requests for

confidential treatment and compilation of Commission records available

to the public, increasing the schedule of fees, and changing the rule

to reflect current addresses and telephone numbers. In response to its

notice, the Commission received only one comment, which was submitted

by the New York Mercantile Exchange (``NYMEX''). NYMEX expressed

concern regarding one aspect of the proposed revision of 17 CFR

145.9(d)(7) and (e)(1).

Under the current scheme, when there is a FOIA request for

materials for which confidential treatment has been sought under

Section 145.9 by the submitter of the materials, the Assistant

Secretary of the Commission for Freedom of Information, Privacy and

Sunshine Acts Compliance, (``Assistant Secretary'') seemingly must

require the submitter to file a detailed written justification of the

confidential treatment request within ten days. However, in some cases

the submitter's initial petition for confidential treatment of the

information or its response to a prior FOIA request is so complete that

the Assistant Secretary does not need supplemental information. The

proposed modifications to Sections 145.9(d)(7)

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and 145.9(e)(1) address release of information for which confidential

treatment has been requested but as to which the Assistant Secretary

determines that it is necessary for the submitter of the material to

provide supplemental information justifying confidential treatment. As

proposed, the rule provides that the Assistant Secretary will notify

the submitter of the material that the requested information will be

released after ten business days unless the submitter objects by

providing a detailed written justification and that, absent a timely

detailed written justification, the submitter will not be given an

opportunity to appeal an adverse determination. NYMEX contends that ten

business days may not provide a submitter with sufficient time to

prepare and file a detailed written justification and urges the

Commission to revise its proposal to permit a submitter to request an

extension of the response period.

The Commission has decided to amend the proposed language to

accommodate NYMEX's concern. Accordingly, in the final rule the

Commission has inserted in Section 145.9(d)(7) ``Upon request and for

good cause shown, the Assistant Secretary may grant an extension of

such time,'' and in Section 145.9(e)(1) the Commission has inserted

``(unless under Sec. 145.9(d)7) an extension of time has been

granted).''

The Commission reviewed the proposed language in Sections

145.9(d)(4), 145.9(d)(6), 145.9(d)(7), and 145.9(d)(8) and determined

that the language should be clarified. Therefore, the Commission

redrafted those sections to make them clearer without changing the

meaning of the proposed language substantially. Accordingly, the

Commission determined that it was not necessary to request comment from

the public regarding these modifications. The modifications are set

forth below.

Section 145.9(d)(4) is modified by changing ``possible'' to

``practicable'' in the phrase ``at the time the information is

submitted or as soon thereafter as possible''.

Section 145.9(d)(6) is redrafted as follows:

A request for confidential treatment (as distinguished from the

material that is the subject of the request) shall be considered a

public document. When a submitter deems it necessary to include, in

its request for confidential treatment, information for which it

seeks confidential treatment, the submitter shall place that

information in an appendix to the request.

Section 145.9(d)(7) is modified by inserting ``from the Assistant

Secretary'' after ``On ten business days notice'' and before the comma.

Section 145.9(d)(8)(i) is redrafted as follows:

Requests for confidential treatment for any reasonably

segregable material that is not exempt from public disclosure under

the Freedom of Information Act, as implemented in Sec. 145.5, shall

be summarily rejected under Sec. 145.9(d)(9). Requests for

confidential treatment of public information contained in financial

reports as specified in Sec. 1.10 shall not be processed. A

submitter has the burden of specifying clearly and precisely the

material that is the subject of the confidential treatment request.

A submitter may be able to meet this burden in various ways,

including:

Additionally, the Commission has modified proposed Section

145.5(g)(1)(i) ``Disclosure of nonpublic records.'' The proposed rule

includes an exemption for records or information compiled for law

enforcement purposes to the extent that the production of such

information would interfere with enforcement activities undertaken by

the listed entities. The list, as proposed, includes both ``foreign

governmental authority'' and ``foreign futures or securities

authority.'' It is unnecessary to include both terms because the term

``foreign governmental authority'' includes law enforcement activities

undertaken by a foreign futures authority as defined by the Commodity

Exchange Act or a foreign securities authority. Accordingly, the

Commission is deleting the term ``foreign futures or securities

authority'' from the final rule.

The Commission has also deleted Section 145.5(g)(2) which defines

``investigatory records'' form the final rule because Section

145.5(g)(1) renders it redundant and has renumbered Section 145.5(g)

accordingly. Section 145.9(d)(10) is also deleted because it has been

incorporated into Section 145.9(d)(4), and reference to it in Section

145.9(d)(1) has been revised accordingly.

II. Related Matter

Regulatory Flexibility Act

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

(1988), requires that agencies, in proposing rules, consider the impact

of those rules on small businesses. The Commission has previously

determined, pursuant to 5 U.S.C. 605(b), that Part 145 rules relating

to Commission records and information do not have a significant

economic impact on a substantial number of small business entities.

Because they do not impose regulatory obligations on commodity

professionals and small commodity firms and because, if instituted, the

proposed corrections and amendments will expedite and improve the FOIA

process, the Commission does not expect the final rule to have a

significant economic impact on a substantial number of small business

entities.

Accordingly, pursuant to Rule 3(a) of the RFA (5 U.S.C. 605(b)),

the Chairperson, on behalf of the Commission, certifies that this

proposed rule will not have a significant economic impact on a

substantial number of small entities.

List of Subjects

17 CFR Part 145

Confidential business information, Freedom of information.

17 CFR Part 17

Sunshine Act.

For the reasons set forth in the preamble, title 17, parts 145 and

147 are amended as follows:

PART 145--COMMISSION RECORDS AND INFORMATION

1. The authority for Part 145 is revised to read:

Authority: Pub. L. 99-570, 100 Stat. 3207; Pub. L. 89-554, 80

Stat. 383; Pub. L. 90-23, 81 Stat. 54; Pub. L. 98-502, 88 Stat.

1561-1564 (5 U.S.C. 552); Sec. 101(a), Pub. L. 93-463, 88 Stat. 1389

(5 U.S.C. 4a(j)); unless otherwise noted.

2. Section 145.5 is amended as set forth below:

a. In the introductory paragraph add a sentence to the end as set

forth below.

b. Remove the introductory text of paragraph (d)(1).

c. In (d)(1)(i)(B) and (E) remove the following phrase: ``Provided,

The procedure set forth in 17 CFR 1.10(g) is followed:''.

d. In (d)(1)(i)(C) and (D) remove the following phrase: ``,

provided the procedure set forth in Sec. 1.10(g) of this chapter is

followed''.

e. In (d)(1)(i)(F) remove the following phrase: ``, if the

procedure set forth in Sec. 1.10(g) of this chapter is followed''.

f. In (d)(1)(i)(H) remove the following phrase: ``, provided the

procedure set forth in Sec. 31.13(m) of this chapter is followed''.

g. Paragraph (g) is revised to read as set forth below.

Sec. 145.5 Disclosure of nonpublic records.

* * * Requests for confidential treatment of segregable public

information will not be processed.

* * * * *

(g) Records or information compiled for law enforcement purposes to

the extent that the production of such records or information:

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(1) Could reasonably be expected to interfere with enforcement

activities undertaken or likely to be undertaken by the Commission or

any other authority including, but not limited to, the Department of

Justice or any United States Attorney or any Federal, State, local, or

foreign governmental authority or any futures or securities industry

self-regulatory organization;

(2) Would deprive a person of a right to a fair trail or an

impartial adjudication;

(3) Could reasonably be expected to constitute an unwarranted

invasion of personal privacy;

(4) Could reasonably be expected to disclose the identity of a

confidential source including a State, local or foreign agency or

authority or any private institution which furnished information on a

confidential basis and, in the case of a record or information compiled

by a criminal law enforcement authority in the course of a criminal

investigation or by an agency conducting a lawful national security

intelligence investigation, information furnished by a confidential

source;

(5) Would disclose techniques or procedures or would disclose

guidelines for law enforcement investigations or prosecutions if such

disclosure could reasonably be expected to risk circumvention of the

law; or

(6) Could reasonably be expected to endanger the life or physical

safety of any individual.

* * * * *

Sec. 145.6 [Amended]

3. In Sec. 145.6(a), remove the phrase ``(816) 374-6602'' and add

in its place ``(816) 931-7600''; remove the phrase ``10880 Wilshire

Blvd., suite 1005 Los Angeles, California 90024, Telephone: (310) 575-

6783'' and add in its place ``10900 Wilshire Boulevard, Suite 400, Los

Angeles, California 90024, Telephone: (310) 235-6783''.

4. Section 145.9 is amended as set forth below:

a. In (d)(1) remove the phrase ``(d)(10)'' and insert in its place

``(d)(4)''.

b. Remove (d)(10) and redesignate (d)(11) as (d)(10).

c. Revise paragraphs (d)(4), (6), (7), and (8) and the first

sentence of (e)(1) to read as follows:

Sec. 145.9 Petition for confidential treatment of information

submitted to the Commission.

* * * * *

(d) * * *

(4) A request for confidential treatment should accompany the

material for which confidential treatment is being sought. If a request

for confidential treatment is filed after the filing of such material,

the submitter shall have the burden of showing that it was not possible

to request confidential treatment for that material at the time the

material was filed. A request for confidential treatment of a future

submission will not be processed. All records which contain information

for which a request for confidential treatment is made or the

appropriate segregable portions thereof should be marked by the person

submitting the records with a prominent stamp, typed legend, or other

suitable form of notice on each page or segregable portion of each page

stating ``Confidential Treatment Requested by [name].'' If such marking

is impractical under the circumstances, a cover sheet prominently

marked ``Confidential Treatment Requested by [name]'' should be

securely attached to each group of records submitted for which

confidential treatment is requested. Each of the records transmitted in

this matter should be individually marked with an identifying number

and code so that they are separately identifiable. In some

circumstances, such as when a person is testifying in the course of a

Commission investigation or providing documents requested in the course

of a Commission inspection, it may be impractical to submit a written

request for confidential treatment at the time the information is first

provided to the Commission. In no circumstances can the need to comply

with the requirements of this section justify or excuse any delay in

submitting information to the Commission. Rather, in such

circumstances, the person testifying or otherwise submitting

information should inform the Commission employee receiving the

information, at the time the information is submitted or as soon

thereafter as practicable, that the person is requesting confidential

treatment for the information. The person shall then submit a written

request for confidential treatment within 30 days of the submission of

the information. If access is requested under the Freedom of

Information Act with respect to material for which no timely request

for confidential treatment has been made, it may be presumed that the

submitter of the information has waived any interest in asserting that

the material is confidential.

* * * * *

(6) A request for confidential treatment (as distinguishing from

the material that is the subject of the request) shall be considered a

public document. When a submitter deems it necessary to include, in its

request for confidential treatment, information for which it seeks

confidential treatment, the submitter shall place that information in

an appendix to the request.

(7) On ten business days notice from the Assistant Secretary, a

submitter shall submit a detailed written justification of a request

for confidential treatment, as specified in paragraph (e) of this

section. Upon request and for good cause shown, the Assistant Secretary

may grant an extension of such time. The Assistant Secretary will

notify the submitter that failure to provide timely a detailed written

justification will be deemed a waiver of the submitter's opportunity to

appeal an adverse determination.

(8)(i) Requests for confidential treatment for any reasonably

segregable material that is not exempt from public disclosure under the

Freedom of Information Act, as implemented in Sec. 145.5, shall be

summarily rejected under Sec. 145.9(d)(9). Requests for confidential

treatment of public information contained in financial reports as

specified in Sec. 1.10 shall not be processed. A submitter has the

burden of specifying clearly and precisely the material that is the

subject of the confidential treatment request. A submitter may be able

to meet this burden in various ways, including:

(A) Segregating material for which confidential treatment is being

sought;

(B) Submitting two copies of the submission: a copy from which

material for which confidential treatment is being sought has been

obliterated, deleted, or clearly marked and an unmarked copy; and

(C) Clearly describing the material within a submission for which

confidential treatment is being sought.

(ii) A submitter shall not employ a method of specifying the

material for which confidential treatment is being sought if that

method makes it unduly difficult for the Commission to read the full

submission, including all portion claimed to be confidential, in its

entirely.

* * * * *

(e) * * * (1) If the Assistant Secretary or his or her designee

determines that a FOIA request seeks material for which confidential

treatment has been requested pursuant to Sec. 145.9, the Assistant

Secretary or his or her designee shall require the submitter to file a

detailed written justification of the confidential request within ten

business days (unless under Sec. 145.9(d)(7) an extension of time has

been granted) of that determination

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unless, pursuant to an earlier FOIA request, a prior determination to

release or withhold the material has been made, the submitter has

already provided sufficient information to grant the request for

confidential treatment; or the material is otherwise in the public

domain.* * *

* * * * *

Appendix A to Part 145--[Amended]

6. In Appendix A remove paragraph (b)(1) and redesignate paragraphs

(b)(2) through (b)(13) as (b)(1) through (b)(12), respectively; and in

paragraph (g) of Appendix A remove the phrase ``from the Division of

Trading and Markets, Commodity Futures Trading Commission, 300 South

Riverside Plaza, suite 1600 North, Chicago, Illinois 60606 or.''

7. Amend Appendix B to Part 145 by revising paragraph (a)(3) to

read as follows:

Appendix B to Part 145--Schedule of Fees

(a) * * *

(3) The Commission uses a variety of computer systems to support

its operations and store records. Older systems of records,

particularly systems involving large numbers of records, are maintained

on a mainframe computer. More recently, systems have been developed

using small, inexpensive, shared computer systems to store records.

Systems of use in particular programmatic and administrative operations

may also store records on the workstation computers assigned to

particular staff members. For searches of records stored on the

Commission's mainframe computer, the use of computer processing time

will be charged at $456.47 for each hour, $7.61 for each minute, and

$0.1268 for each second of computer processing time indicated by the

job accounting log printed with each search. When searches require the

expertise of a computer specialist, staff time for programming and

performing searches will be charged at $32.00 per hour. For searches of

records stored on personal computers used as workstations by Commission

staff and shared access network servers, the computer processing time

is included in the search time for the staff member using that

workstation as set forth in the other paragraphs under paragraph (a) of

Appendix B.

* * * * *

PART 147--OPEN COMMISSION MEETINGS

8. The authority for part 147 continues to read:

Authority: Sec. 3(a), Pub. L. 94-409, 90 Stat. 1241 (5 U.S.C.

552b), sec. 101(a)(11), Pub. L. 93-463, 88 Stat. 1391 (7 U.S.C.

4a(j) (Supp. V, 1975)), unless otherwise noted.

Sec. 147.3 [Amended]

9. In Sec. 147.3 make the following changes:

a. Remove the introductory text of paragraph (b)(4)(i).

b. In paragraphs (b)(4)(i)(A)(2) and (5) remove the following

phrase: ``Provided, The procedure set forth in 17 CFR 1.10(g) is

followed:''.

c. In paragraphs (b)(4)(i)(A)(3) and (4) remove the following

phrase: ``, provided, the procedure set forth in Sec. 1.10(g) of this

chapter is followed.''

d. In paragraph (b)(4)(i)(A)(6) remove the following phrase: ``, if

the procedure set forth in Sec. 1.10(g) of this chapter is followed.''

e. In paragraph (b)(4)(i)(A)(8) remove the following phrase:

``provided the procedure set forth in Sec. 31.13(m) of this chapter is

followed.''

Issued by the Commission.

Dated: December 28, 1998.

Jean A. Webb,

Secretary of the Commission, Commodity Futures Trading Commission.

[FR Doc. 98-34732 Filed 12-31-98; 8:45 am]

BILLING CODE 6351-01-M