Commission records and information; open commission meetings,

[Federal Register: January 4, 1999 (Volume 64, Number 1)]

[Rules and Regulations]

[Page 24-27]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr04ja99-15]

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.

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: secretary@cftc.gov.

SUPPLEMENTARY INFORMATION:

1. 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)

   [[Page 25]]

   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.

2. 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:

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

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

      3. In (d)(1)(i)(B) and (E) remove the following phrase: ``Provided, The procedure set forth in 17 CFR 1.10(g) is followed:''.

      4. 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''.

      5. In (d)(1)(i)(F) remove the following phrase: ``, if the procedure set forth in Sec. 1.10(g) of this chapter is followed''.

      6. In (d)(1)(i)(H) remove the following phrase: ``, provided the procedure set forth in Sec. 31.13(m) of this chapter is followed''.

      7. 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:

      [[Page 26]]

      (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:

      1. In (d)(1) remove the phrase ``(d)(10)'' and insert in its place ``(d)(4)''.

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

      3. 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 filedafter 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:

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

      2. 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:''.

      3. 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.''

      4. 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.''

      5. 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. 98-34732Filed12-31-98; 8:45 am]

      BILLING CODE 6351-01-M