PART 40—PROVISIONS COMMON TO REGISTERED ENTITIES Authority: 7 U.S.C. 1a, 2, 5, 6, 7, 8 and 12, as amended by Titles VII and VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Pub. L. 111-203, 124 Stat. 1376 (2010). Source: 76 FR 44790, July 27, 2011, unless otherwise noted. § 40.1 Definitions. As used in this part: Business day Dormant designated contract market provided, however, Dormant derivatives clearing organization provided, however, Dormant swap data repository Dormant swap execution facility provided, however, Emergency (1) Any manipulative or attempted manipulative activity; (2) Any actual, attempted, or threatened corner, squeeze, congestion, or undue concentration of positions; (3) Any circumstances which may materially affect the performance of agreements, contracts, swaps or transactions, including failure of the payment system or the bankruptcy or insolvency of any participant; (4) Any action taken by any governmental body, or any other registered entity, board of trade, market or facility which may have a direct impact on trading or clearing and settlement; and (5) Any other circumstance which may have a severe, adverse effect upon the functioning of a registered entity. Rule Terms and conditions (1) For a contract for the purchase or sale of a commodity for future delivery or an option on such a contract or an option on a commodity (other than a swap): (i) Quality and other standards that define the commodity or instrument underlying the contract; (ii) Quantity standards or other provisions related to contract size; (iii) Any applicable premiums or discounts for delivery of nonpar products; (iv) Trading hours, trading months and the listing of contracts; (v) The pricing basis, minimum price fluctuations, and maximum price fluctuations; (vi) Any price limits, no cancellation ranges, trading halts, or circuit breaker provisions, and procedures for the establishment of daily settlement prices; (vii) Speculative position limits, position accountability standards, and position reporting requirements, including an indication as to whether the contract meets the definition of a referenced contract as defined in § 150.1 of this chapter, and if so, the name of either the core referenced futures contract or other referenced contract upon which the new referenced contract submitted under this part is based. (viii) Delivery points and locational price differentials; (ix) Delivery standards and procedures, including fees related to delivery or the delivery process; alternatives to delivery and applicable penalties or sanctions for failure to perform; (x) If cash settled; the definition, composition, calculation and revision of the cash settlement price or index; (xi) [Reserved]; (xii) Option exercise price, if it is constant, and method for calculating the exercise price, if it is variable; (xiii) Threshold prices for an option contract, the existence of which is contingent upon those prices; and (xiv) Any restrictions or requirements for exercising an option; and (2) For a swap: (i) Identification of the major group, category, type or class in which the swap falls (such as an interest rate, commodity, credit or equity swap) and of any further sub-group, category, type or class that further describes the swap; (ii) Notional amounts, quantity standards, or other unit size characteristics; (iii) Any applicable premiums or discounts for delivery of nonpar products; (iv) Trading hours and the listing of swaps; (v) Pricing basis for establishing the payment obligations under, and mark-to-market value of, the swap including, as applicable, the accrual start dates, termination or maturity dates, and, for each leg of the swap, the initial cash flow components, spreads, and points, and the relevant indexes, prices, rates, coupons, or other price reference measures; (vi) Any price limits, trading halts, or circuit breaker provisions, and procedures for the establishment of daily settlement prices; (vii) Speculative position limits, position accountability standards, and position reporting requirements, including an indication as to whether the contract meets the definition of economically equivalent swap as defined in § 150.1 of this chapter, and, if so, the name of either the core referenced futures contract or referenced contract, as applicable, to which the swap submitted under this part is economically equivalent. (viii) Payment and reset frequency, day count conventions, business calendars, and accrual features; (ix) If physical delivery applies, delivery standards and procedures, including fees related to delivery or the delivery process, alternatives to delivery and applicable penalties or sanctions for failure to perform; (x) If cash settled, the definition, composition, calculation and revision of the cash settlement price, and the settlement currency; (xi) [Reserved] (xii) Option exercise price, if it is constant, and method for calculating the exercise price, if it is variable; (xiii) Threshold prices for an option, the existence of which is contingent upon those prices; (xiv) Any restrictions or requirements for exercising an option; and (xv) Life cycle events. [89 FR 88622, Nov. 7, 2024] § 40.2 Listing products for trading by certification. (a) Submission requirements. (1) The designated contract market or the swap execution facility has filed its submission electronically in a format and manner specified by the Commission; (2) The Commission has received the submission by the open of business on the business day preceding the product's listing; and (3) The submission includes: (i) The information required by appendix D to this part; (ii) A copy of the rules that set forth the contract's terms and conditions; (iii) The intended listing date; (iv) A certification by the designated contract market or the swap execution facility that the product to be listed complies with the Act and Commission regulations thereunder; (v) A concise explanation and analysis that is complete with respect to the product's terms and conditions, the underlying commodity, and the product's compliance with applicable provisions of the Act, including core principles, and the Commission's regulations thereunder. This explanation and analysis shall either be accompanied by the documentation relied upon to establish the basis for compliance with applicable law, or incorporate information contained in such documentation, with appropriate citations to data sources; (vi) A certification that the registered entity posted a notice of a pending product certification with the Commission and a copy of the submission, concurrent with the filing of a submission with the Commission, on the registered entity's website. Information that the registered entity seeks to keep confidential may be redacted from the documents published on the registered entity's website but must be republished consistent with any determination made pursuant to § 40.8(c)(4); and (vii) A request for confidential treatment, if appropriate, as permitted under § 40.8. (b) Additional information. (c) Stay. (d) Class certification of swaps. (i) Each particular swap within the certified class of swaps is based upon an excluded commodity specified in paragraph (d)(1) of this section; (ii) Each particular swap within the certified class of swaps is based upon an excluded commodity with an identical pricing source, formula, procedure, and methodology for calculating reference prices and payment obligations; (iii) The pricing source, formula, procedure, and methodology for calculating reference prices and payment obligations in each particular swap within the certified class of swaps is identical to a pricing source, formula, procedure, and methodology for calculating reference prices and payment obligations in a product previously submitted to the Commission and certified or approved pursuant to this section or § 40.3; and (iv) Each particular swap within the certified class of swaps is based upon an excluded commodity involving an identical currency or identical currencies. (2) The Commission may in its discretion require a registered entity to withdraw its certification under paragraph (d)(1) of this section and to submit each individual swap or certain individual swaps within the submission for Commission review pursuant to this section or § 40.3. [76 FR 44790, July 27, 2011, as amended at 89 FR 88623, Nov. 7, 2024; 89 FR 96897, Dec. 6, 2024] § 40.3 Voluntary submission of new products for Commission review and approval. (a) Request for approval. (1) Be filed electronically in a format and manner specified by the Commission; (2) Include the information required by appendix D to this part; (3) Include a copy of the rules that set forth the contract's terms and conditions; (4) Include an explanation and analysis that is complete with respect to the product's terms and conditions, the underlying commodity, and the product's compliance with applicable provisions of the Act, including core principles, and the Commission's regulations thereunder. This explanation and analysis shall either be accompanied by the documentation relied upon to establish the basis for compliance with the applicable law, or incorporate information contained in such documentation, with appropriate citations to data sources; (5) Describe any agreements or contracts entered into with other parties that enable the registered entity to carry out its responsibilities; (6) Include the certifications required in § 41.22 for product approval of a commodity that is a security future or a security futures product as defined in Sections 1a(44) or 1a(45) of the Act, respectively; (7) Include, if appropriate, a request for confidential treatment as permitted under § 40.8; (8) Include the filing fee required under appendix A to this part; (9) Certify that the registered entity posted a notice of its request for Commission approval of the new product and a copy of the submission, concurrent with the filing of a submission with the Commission, on the registered entity's website. Information the registered entity seeks to keep confidential may be redacted from the documents published on the registered entity's website but must be republished consistent with any determination made pursuant to § 40.8(c)(4); and (10) Include, if requested by Commission staff, additional evidence, information or data demonstrating that the contract meets, initially or on a continuing basis, the requirements of the Act, or other requirement for designation or registration under the Act, or the Commission's regulations or policies thereunder. The registered entity shall submit the requested information by the time specified by Commission staff, or at the conclusion of any extended period agreed to by Commission staff after timely receipt of a written request from the registered entity. (b) Standard for review and approval. (c) Commission review. (2) The Commission may extend the initial 45-day review period for up to an additional 45 days if the product raises novel or complex issues that require additional time to analyze, the submission is incomplete or the requestor does not respond completely to Commission questions in a timely manner, in which case the Commission shall notify the submitting registered entity within the initial 45-day review period and shall briefly describe the nature of the specific issues for which additional time for review shall be required. (3) At any time during its review of a proposed product under this section, the Commission may extend the review period for any period of time to which the registered entity agrees in writing. (4) Any amendment or supplementation made by the registered entity to the submission will be treated as the filing of a new submission under this section and be subject to the initial 45-day review period in accordance with paragraph (c)(1) of this section, unless the amendment or supplementation is requested by the Commission or is made for correction of typographical errors, renumbering or other non-substantive revisions. (5) If the review period described in paragraph (c)(1) of this section would end on a day that is not a business day, such review period shall instead be extended to end on the next business day. (d) Commission Determination Approval. (2) Notice of non-approval. (e) Effect of non-approval. (2) Notification to a registered entity under paragraph (d)(2) of this section of the Commission's determination not to approve a product shall be presumptive evidence that the entity may not truthfully certify under § 40.2 that the same, or substantially the same, product complies with the Act and the Commission's regulations thereunder. [76 FR 44790, July 27, 2011, as amended at 89 FR 88623, Nov. 7, 2024] § 40.4 Amendments to terms or conditions of enumerated agricultural products. (a) Notwithstanding the provisions of this part, a designated contract market must submit for Commission approval under the procedures of § 40.5, prior to its implementation, any rule that, for a delivery month having open interest, would materially change a product's term or condition, as defined in § 40.1, of a contract for future delivery in an agricultural commodity enumerated in section 1a(9) of the Act, or of an option on such a contract or commodity. (b) The following rules or rule amendments are not material and are not required by this section to be submitted for Commission approval under the procedures of § 40.5: (1) Rules or rule amendments that are enumerated in § 40.6(d)(2) may be implemented without prior approval or certification, provided that they are implemented pursuant to the notification procedures of § 40.6(d); (2) Rules or rule amendments that are enumerated in § 40.6(e)(2) may be implemented without prior approval or certification or notification as permitted pursuant to § 40.6(e); (3) Rules or rule amendments governing trading hours may be implemented without prior approval, provided that they are implemented pursuant to the procedures of sect; 40.6(a); (4) Rules or rule amendments that are required to comply with a binding order of a court of competent jurisdiction, or a rule, regulation or order of the Commission or of another Federal regulatory authority, may be implemented without prior approval, provided that they are implemented pursuant to the procedures of § 40.6(a); or (5) Any rule or rule amendment: (i) The text of which has been submitted pursuant to the procedures of paragraph (b)(5) of this section and § 40.6(a) at least ten business days prior to its implementation and that has been labeled “Non-Material Agricultural Rule Change;” (ii) For which the designated contract market has provided an explanation as to why it considers the rule “non-material,” and any other information that may be beneficial to the Commission in analyzing the merits of the entity's claim of non-materiality including, if applicable, a copy of a previously approved rule or rule amendment that is, in substance, the same as the non-material rule or rule amendment; and (iii) With respect to which the Commission has not notified the contract market during the review period that the rule appears to require or does require prior approval under this section. [89 FR 88624, Nov. 7, 2024] § 40.5 Voluntary submission of rules for Commission review and approval. (a) Request for approval of rules. (1) Be filed electronically in a format and manner specified by the Commission; (2) Include the information required by appendix D to this part; (3) Set forth the text of the rule or rule amendment (in the case of a rule amendment, deletions and additions must be indicated); (4) Describe the proposed effective date of the rule or rule amendment and any action taken or anticipated to be taken to adopt the proposed rule by the registered entity or by its governing board or by any committee thereof, and cite the rules of the entity that authorize the adoption of the proposed rule; (5) Provide an explanation and analysis that is complete with respect to the operation, purpose, and effect of the proposed rule or rule amendment and its compliance with applicable provisions of the Act, including core principles, and the Commission's regulations thereunder, including, as applicable, a description of the anticipated benefits to market participants or others, any potential anticompetitive effects on market participants or others, and how the rule fits into the registered entity's framework of self-regulation; (6) Certify that the registered entity posted a notice of its request for Commission approval of the new rule or rule amendment and a copy of the submission, concurrent with the filing of a submission with the Commission, on the registered entity's website. Information the registered entity seeks to keep confidential may be redacted from the documents published on the registered entity's website but must be republished consistent with any determination made pursuant to § 40.8(c)(4); (7) Provide additional information which may be beneficial to the Commission in analyzing the new rule or rule amendment. If a proposed rule affects, directly or indirectly, the application of any other rule of the registered entity, the pertinent text of any such rule must be set forth and the anticipated effect described; (8) Provide a brief explanation of any substantive opposing views expressed to the registered entity by governing board or committee members, members of the entity or market participants that were not incorporated into the rule, or a statement that no such opposing views were expressed; (9) Identify any Commission regulation that the Commission may need to amend, or sections of the Act or the Commission's regulations that the Commission may need to interpret, in order to approve the new rule or rule amendment. To the extent that such an amendment or interpretation is necessary to accommodate a new rule or rule amendment, the submission should include a reasoned analysis supporting the amendment to the Commission's regulation or the interpretation; and (10) As appropriate, include a request for confidential treatment as permitted under the procedures of § 40.8. (b) Standard for review and approval. (c) Commission review. (2) The Commission may extend the initial 45-day review period for up to an additional 45 days if the proposed rule raises novel or complex issues that require additional time for review or is of major economic significance, the submission is incomplete or the requestor does not respond completely to Commission questions in a timely manner, in which case the Commission shall notify the submitting registered entity within the initial 45-day review period and shall briefly describe the nature of the specific issues for which additional time for review shall be required. (3) At any time during its review of a proposed rule under this section, the Commission may extend the review period for any period of time to which the registered entity agrees in writing. (4) Any amendment or supplementation made by the registered entity to the submission will be treated as the filing of a new submission under this section and be subject to the initial 45-day review period in accordance with paragraph (c)(1) of this section, unless the amendment or supplementation is requested by the Commission or is made for correction of typographical errors, renumbering or other non-substantive revisions. (5) If a rule or rule amendment that is submitted for Commission approval under paragraph (a) of this section is also submitted and labeled as a “Non-Material Agricultural Rule Change” in accordance with § 40.4(b)(5), the Commission shall commence the 45-day review period in paragraph (c)(1) of this section ten business days after receiving the submission. (6) If the review period described in paragraph (c)(1) of this section would end on a day that is not a business day, such review period shall instead be extended to end on the next business day. (d) Commission determination Approval. (2) Expedited approval. (3) Notice of non-approval. (e) Effect of non-approval. (2) Notification to a registered entity under paragraph (d)(3) of this section of the Commission's determination not to approve a proposed rule or rule amendment of a registered entity shall be presumptive evidence that the entity may not truthfully certify under § 40.6 that the same, or substantially the same, proposed rule or rule amendment complies with the Act and 17 CFR chapter I. [76 FR 44790, July 27, 2011, as amended at 89 FR 88625, Nov. 7, 2024; 89 FR 96897, Dec. 6, 2024] § 40.6 Self-certification of rules. (a) Submission requirements. (1) The registered entity has filed its submission electronically in a format and manner specified by the Commission. (2) The registered entity has provided a certification that the registered entity posted a notice of pending certification with the Commission and a copy of the submission, concurrent with the filing of a submission with the Commission, on the registered entity's website. Information that the registered entity seeks to keep confidential may be redacted from the documents published on the registered entity's website but it must be republished consistent with any determination made pursuant to § 40.8(c)(4). (3) The Commission has received the submission not later than the open of business on the business day that is 10 business days prior to the registered entity's implementation of the rule or rule amendment. (4) The Commission has not stayed the submission pursuant to § 40.6(c). (5) The rule or rule amendment is not a rule or rule amendment of a designated contract market that materially changes a term or condition of a contract for future delivery of an agricultural commodity enumerated in section 1a(9) of the Act or an option on such a contract or commodity in a delivery month having open interest. (6) Rule certifications implemented in response to an emergency. (i) Rules or rule amendments implemented under procedures of the governing board to respond to an emergency as defined in § 40.1, shall, if practicable, be filed with the Commission prior to the implementation or, if not practicable, be filed with the Commission at the earliest possible time after implementation, but in no event more than twenty-four hours after implementation. Such rules shall be subject to the review and stay provisions of paragraphs (b) and (c) of this section. (ii) New rules or rule amendments that establish standards for responding to an emergency must be submitted pursuant to paragraph (a) of this section or may be submitted pursuant to § 40.5. (7) The rule submission shall include: (i) The information required by appendix D to this part (“Emergency Rule Certification” should be noted in the Description section in the case of a rule or rule amendment that responds to an emergency); (ii) The text of the rule (in the case of a rule amendment, deletions and additions must be indicated); (iii) The date of intended implementation; (iv) A certification by the registered entity that the rule complies with the Act and the Commission's regulations thereunder; (v) A concise explanation and analysis that is complete with respect to the operation, purpose, and effect of the proposed rule or rule amendment and its compliance with applicable provisions of the Act, including core principles, and the Commission's regulations thereunder; (vi) A brief explanation of any substantive opposing views expressed to the registered entity by governing board or committee members, members of the entity or market participants, that were not incorporated into the rule, or a statement that no such opposing views were expressed; and (vii) As appropriate, a request for confidential treatment pursuant to the procedures provided in § 40.8; (8) The registered entity shall provide, if requested by Commission staff, additional evidence, information or data that may be beneficial to the Commission in conducting a due diligence assessment of the filing and the registered entity's compliance with any of the requirements of the Act or the Commission's regulations or policies thereunder; and (9) Notwithstanding the 10 business day filing requirement of paragraphs (a)(3) and (b)(1) of this section, a registered entity may file a submission and certification of a new rule or a rule amendment that delists, or withdraws the certification of, a product that has no open interest and may make the delisting or withdrawal of the product with no open interest effective immediately upon filing the submission, provided that the submission is made in compliance with paragraphs (a)(1), (2) and (7) of this section. (b) Review by the Commission. (2) Any amendment or supplementation made by the registered entity to the submission will be treated as the filing of a new submission under this section and be subject to the initial 10-business day review period in accordance with paragraph (b)(1) of this section, unless the amendment or supplementation is requested by the Commission or is made for correction of typographical errors, renumbering or other non-substantive revisions. (c) Stay Stay of certification of new rule or rule amendment. (2) Public comment. (3) Expiration of a stay of certification of new rule or rule amendment. (4) Stay of effectiveness of rules or rule amendments already implemented. (5) Effect of objection. (ii) Notification to a registered entity under paragraph (c) of this section of the Commission's objection to a certification by a registered entity shall be presumptive evidence that the entity may not truthfully certify under this part that the same, or substantially the same, proposed rule or rule amendment complies with the Act and the Commission's regulations thereunder. (d) Notification of rule amendments. (1) The registered entity provides to the Commission at least weekly a summary notice of all rule amendments made effective pursuant to this paragraph (d)(1) during the preceding week. Such notice must be labeled “Weekly Notification of Rule Amendments” and need not be filed for weeks during which no such actions have been taken. One copy of each such submission shall be furnished electronically in a format and manner specified by the Commission; and (2) The rule governs: (i) Non-substantive revisions. (ii) Delivery standards set by third parties. (iii) Index products. (iv) Option contract terms. (v) Fees. (A) Total $1.00 or more per contract, and (B) Are established by an independent third party or are unrelated to delivery, trading, clearing or dispute resolution. (vi) Survey lists. (vii) Approved brands. (viii) Delivery facilities and delivery service providers. (ix) Trading months. (x) Minimum tick. (xi) Contact information. (xii) Changes to no cancellation ranges. (xiii) Option premiums or margins. (e) Notification of rule amendments not required. (1) The registered entity maintains documentation regarding all changes to rules; and (2) The rule governs: (i) Transfer of membership or ownership. (ii) Administrative procedures. (iii) Administration. (iv) Standards of decorum. (v) Fees. (A) Are less than $1.00 per contract; or (B) Relate to matters such as dues, badges, telecommunication services, booth space, real time quotations, historical information, publications, software licenses or other matters that are administrative in nature. (vi) Securities indexes. (vii) Option contract terms. (viii) Trading months. [76 FR 44790, July 27, 2011, as amended at 76 FR 45666, Aug. 1, 2011; 89 FR 88626, Nov. 7, 2024] § 40.7 Delegations. (a) Procedural matters. (i) To request, pursuant to § 40.3(c)(2) or § 40.5(c)(1)(ii) of this part, that the registered entity requesting approval amend the proposed product, rule or rule amendment, or supplement the submission to the Commission; (ii) To notify the registered entity, pursuant to § 40.3(e) or § 40.5(e) of this part, that the Commission is not approving, or is unable to approve, the proposed product, rule or rule amendment; (iii) To make all determinations reserved to the Commission in § 40.10. (2) The Commission hereby delegates, until it orders otherwise, to the Director of the Division of Clearing and Risk and, separately, to the Director of the Division of Market Oversight, to be exercised by either Director, as appropriate, or by such employees of the Commission that either Director may designate from time to time, the following authorities, after consultation with the Office of General Counsel or the General Counsel's delegate to notify a registered entity: (i) Pursuant to § 40.3(d) of this part, that the time for review of the submission has been extended because the product raises novel or complex issues that require additional time for review; (ii) Pursuant to § 40.5(d) of this part, that the time for review of the submission has been extended because the proposed rule or rule amendment raises novel or complex issues that require additional time for review or is of major economic significance; (iii) Pursuant to § 40.6(c) of this part, that the proposed rule or rule amendment has been stayed because there exist novel or complex issues that require additional time to analyze, or there is potential inconsistency with the Act or the Commission's regulations. (3) The Commission hereby delegates, until it orders otherwise, to the Director of the Division of Clearing and Risk and, separately, to the Director of the Division of Market Oversight, to be exercised by either Director, as appropriate, or by such employees of the Commission that either Director may designate from time to time, the authority to notify a registered entity, pursuant to § 40.3(d) or § 40.5(d) of this part, that the time for review of the submission has been extended, or that a rule certified pursuant to § 40.6(c) has been stayed, because the submission is incomplete or provides an inadequate explanation. (4) Emergency rules. (5) The Commission hereby delegates to the Director of the Division of Market Oversight, to be exercised by the Director or by such employees of the Commission that the Director may designate from time to time, with the concurrence of the General Counsel or the General Counsel's delegate, the authority to determine whether a rule or rule amendment submitted by a designated contract market is material under § 40.4(b)(5), and to notify the designated contract market of such determination. (b) Approval authority. (1) Relate to, but do not substantially change, the quantity, quality, or other delivery specifications, procedures, or obligations for delivery, cash settlement, or exercise under an agreement, contract or transaction approved for trading by the Commission; daily settlement prices; clearing position limits; requirements or procedures for governance of a registered entity; procedures for transfer trades; trading hours; minimum price fluctuations; and maximum price limit and trading suspension provisions; (2) Reflect routine modifications that are required or anticipated by the terms of the rule of a registered entity; (3) Establish or amend or relate to speculative limits or position accountability provisions that are in compliance with the requirements of the Act and17 CFR chapter I; (4) Are in substance the same as a rule of the same or another registered entity which has been approved previously by the Commission pursuant to section 5c(c)(3) of the Act; (5) Are consistent with a specific, stated policy or interpretation of the Commission; or (6) Relate to the listing of additional trading months of approved contracts. (c) Notwithstanding the provisions of this section, the Director of the Division of Clearing and Risk and, separately, the Director of the Division of Market Oversight may submit to the Commission for its consideration any matter that has been delegated pursuant to this section. (d) Nothing in this section shall be deemed to prohibit the Commission, at its election, from exercising any of the authority delegated pursuant to this section. (e) The Commission hereby delegates, until it orders otherwise, to the Director of the Division of Clearing and Risk and, separately, to the Director of the Division of Market Oversight, to be exercised by either Director, as appropriate, or by such employees of the Commission that either Director may designate from time to time, the authority to specify the format and manner to be used by a registered entity when filing a submission pursuant to this part. [76 FR 44790, July 27, 2011, as amended at 78 FR 22419, Apr. 16, 2013; 89 FR 88628, Nov. 7, 2024] § 40.8 Availability of public information. (a) The following sections of all applications to become a designated contract market, swap execution facility, derivatives clearing organization, or swap data repository shall be made publicly available: Transmittal letter and first page of the application cover sheet, proposed rules, narrative summary of the applicant's proposed activities and regulatory compliance chart, documents establishing the applicant's legal status, documents setting forth the applicant's corporate and governance structure and any other part of the application not covered by a request for confidential treatment. (b) [Reserved] (c) A registered entity's filing of new products pursuant to the self-certification procedures of § 40.2 of this part, new products for Commission review and approval pursuant to § 40.3 of this part, new rules and rule amendments for Commission review and approval pursuant to § 40.4 or § 40.5 of this part, and new rules and rule amendments pursuant to the self-certification procedures of § 40.6 and § 40.10 of this part shall be treated as public information unless accompanied by a request for confidential treatment. If a registered entity files a request for confidential treatment, the following procedures shall apply: (1) A detailed written justification of the confidential treatment request must be filed simultaneously with the request for confidential treatment. The form and content of the detailed written justification shall be governed by § 145.9 of this chapter; (2) All material for which confidential treatment is requested must be segregated in an appendix to the submission; (3) The submission itself must indicate that material has been segregated and, as appropriate, an additional redacted version provided; (4) Commission staff may make an initial determination with respect to the request for confidential treatment without regard to whether a request for the information has been sought under the Freedom of Information Act; (5) All requests for confidential treatment shall be subject to the process provided by § 145.9 of this chapter. (6) A submitter of information under this part may appeal an adverse decision by staff to the Commission's Office of General Counsel. The form and content of such appeal shall be governed by § 145.9(g) of this chapter. (7) The grant of any part of a request for confidential treatment under this section may be reconsidered if a subsequent request under the Freedom of Information Act is made for the information. (d) Commission staff will not consider confidential treatment requests for information that is required to be made public under the Act. The terms and conditions of a product submitted to the Commission pursuant to §§ 40.2, 40.3, 40.5 and 40.6 of this part shall be made publicly available at the time of submission. [76 FR 44790, July 27, 2011, as amended at 80 FR 59578, Oct. 2, 2015] § 40.9 [Reserved] § 40.10 Special certification procedures for submission of rules by systemically important derivatives clearing organizations. (a) Advance notice. (1) The notice of a proposed change shall provide the information required to be submitted under § 40.6(a)(7) and shall specifically describe: (i) The nature of the change and expected effects on risks to the systemically important derivatives clearing organization, its clearing members, or the market; and (ii) How the systemically important derivatives clearing organization plans to manage any identified risks. (2) Concurrent with providing the Commission with the advance notice or any request or other information related to the advance notice, the systemically important derivatives clearing organization shall provide the Board of Governors of the Federal Reserve System with a copy of such notice, request or other information in the same format and manner as required by the Board of Governors for those designated financial market utilities for which it is the Supervisory Agency pursuant to section 803(8) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. (3) The systemically important derivatives clearing organization may request that the Commission expedite the review on the grounds that the change would materially decrease risk. The Commission, in its discretion, may expedite the review and, pursuant to paragraph (g) of this section, notify the systemically important derivatives clearing organization in less than 60 days from the date the Commission receives the notice of proposed change in writing that it does not object to the proposed change and authorizes implementation of the change on an earlier date. (b) Changes requiring advance notice. (c) Further information. (d) Notice of objection. (1) The date that the notice of the proposed change was received; or (2) The date the Commission received any further information it had requested for consideration of the notice. (e) Implementation of change absent Commission objection. (1) The date that the Commission received the notice of proposed change; or (2) The date the Commission received any further information it had requested for consideration of the notice. (f) Extended review. (g) Change allowed earlier if notified of no objection. (h) Emergency changes. (1) The systemically important derivatives clearing organization shall provide notice of any such emergency change to the Commission as soon as practicable, which shall be no later than 24 hours after implementation of the change. (2) The notice of an emergency change shall: (i) Provide the information required for advance notice as set forth in paragraph (a) of this section; (ii) Describe the nature of the emergency; and (iii) Describe the reason the change was necessary for the systemically important derivatives clearing organization to continue to provide its services in a safe and sound manner. (3) The Commission may require modification or rescission of the emergency change if it finds that the change is not consistent with the Act or 17 CFR chapter I, or any applicable rules, orders, or standards prescribed under section 805(a) of the Dodd-Frank Act. (i) Where in §§ 39.3(g), 39.4(f), 39.13(i), and 39.15(b)(2) of this chapter a derivatives clearing organization is required to submit rules for approval pursuant to § 40.5, a systemically important derivatives clearing organization instead shall submit such rules pursuant to this section if the rules could materially affect the nature or level of risks presented by the systemically important derivatives clearing organization. [76 FR 44790, July 27, 2011, as amended at 89 FR 88628, Nov. 7, 2024] § 40.11 Review of event contracts based upon certain excluded commodities. (a) Prohibition. (1) An agreement, contract, transaction, or swap based upon an excluded commodity, as defined in Section 1a(19)(iv) of the Act, that involves, relates to, or references terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law; or (2) An agreement, contract, transaction, or swap based upon an excluded commodity, as defined in Section 1a(19)(iv) of the Act, which involves, relates to, or references an activity that is similar to an activity enumerated in § 40.11(a)(1) of this part, and that the Commission determines, by rule or regulation, to be contrary to the public interest. (b) [Reserved] (c) 90-day review and approval of certain event contracts. (1) The Commission shall request that a registered entity suspend the listing or trading of any agreement, contract, transaction, or swap based on an excluded commodity, as defined in Section 1a(19)(iv) of the Act, which may involve, relate to, or reference an activity enumerated in § 40.11(a)(1) or § 40.11(a)(2), during the Commission's 90-day review period. The Commission shall post on the Web site a notification of the intent to carry out a 90-day review. (2) Final determination. § 40.12 Staying of certification and tolling of review period pending jurisdictional determination. (a) Notice of novel derivative products. (2) If concurrent notice is not provided pursuant to § 40.12(a)(1), the Commission shall notify the Securities and Exchange Commission of the registered entity's submission of a novel derivative product described in § 40.12(a)(1) and accompany such notice with a copy of the submission. The Commission shall determine whether a particular submission is a novel derivative product requiring notice to the Securities and Exchange Commission not later than five business days subsequent to the date that the registered entity submits the product for Commission review. (b) Tolling of review period. (1) The Commission will provide the registered entity with a written notice of stay pending issuance of a final determination order by the Commission or the Securities and Exchange Commission. (2) The stay shall be withdrawn or the approval review period shall resume upon the Commission's or the Securities and Exchange Commission's issuance of a final determination order finding that the Commission has jurisdiction over the submission. (3) Determination order. (c) Judicial review of determination order. (1) The stay shall remain in effect until the date on which the United States Court of Appeals for the District of Columbia Circuit issues a final determination pursuant to Section 718(b)(4) of the Dodd-Frank Act, or until such date that there is a final disposition of an appeal of that determination. (2) The submission review period shall resume upon issuance of a final determination, as described in § 40.12(c)(1), that the Commission has jurisdiction over the submission. Appendix A to Part 40—Schedule of Fees (a) Applications for product approval. Federal Register. (b) Checks and applications should be sent to the attention of the Office of the Secretariat, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, N.W., Washington, DC 20581. No checks or money orders may be accepted by personnel other than those in the Office of the Secretariat. (c) Failure to submit the fee with an application for product approval will result in return of the application. Fees will not be returned after receipt. Appendixes B-C to Part 40 [Reserved] Appendix D to Part 40—Submission Instructions for Rules and Products (a) Rule and product submissions shall be submitted electronically to the Commission by a registered entity in a format and manner specified by the Commission, and shall include all of the following information: 1. Date 2. Organization 3. Type of Registered Entity 4. Type of Filing 5. Rule Numbers 6. Description 7. Identifier Code (optional) (b) Other Requirements (c) An indication of “confidential treatment requested” does not obviate the submitter's responsibility to comply with all applicable requirements for requesting confidential treatment in § 40.8 and, where appropriate, § 145.9 of this chapter, and will not substitute for notice or full compliance with such requirements. [89 FR 88628, Nov. 7, 2024] Appendix E to Part 40—Guidance on Compliance With the Materiality Assessment in § 40.4 This appendix provides guidance on complying with the requirement in § 40.4(a) that a DCM must submit rule changes that would materially change a term or condition of a contract on an agricultural product enumerated in section 1a(9) of the CEA with open interest for Commission approval under the procedures of § 40.5. Section 40.4(a) applies strictly to rules that materially change a product's economic terms and conditions, and does not apply to other rules. Guidance is set forth below to assist a DCM in assessing whether a change to the terms and conditions is material pursuant to § 40.4(a) and in explaining why it considers a rule to be non-material when § 40.4(b)(5) is applicable. The guidance below can be used to demonstrate to the Commission compliance with the requirement in § 40.4(b)(5)(ii) that the DCM explain why it considers a rule to be non-material when applicable. Materiality of a Change of a Term or Condition Any change that is enumerated by the Commission in § 40.4(b)(1) through (4) is not material for purposes of § 40.4(a) and may be submitted under the applicable § 40.6 provision that is specified in the applicable § 40.4(b). For any other rule that the DCM believes to be non-material, § 40.4(b)(5) sets forth a process for the DCM to implement the change through self-certification pursuant to § 40.6(a). In order for a DCM to self-certify a change to a term or condition of a contract on an agricultural product enumerated in CEA section 1a(9) with open interest that the DCM believes to be non-material, § 40.4(b)(5) requires the DCM to make a non-materiality filing and explain why it considers the rule change to be “non-material.” To assist an exchange in assessing and explaining whether a change to the terms and conditions is non-material pursuant to § 40.4(b)(5), paragraphs (1) through (4) of the following paragraph are the criteria that the Commission generally considers as evidence that an enumerated agricultural product rule change is non-material under § 40.4(a) pursuant to § 40.4(b)(5). A DCM may address these criteria in its assessment and explanation to demonstrate compliance with § 40.4(b)(5). The Commission considers a change to the terms and conditions of a contract on an agricultural product enumerated in CEA section 1a(9) that has open interest as a non-material change if: (1) The change should not affect a reasonable trader's decision to enter into, or maintain, a position; (2) The change should not affect a reasonable trader's decision to make or take delivery on the contract or to exercise an option on the contract; and (3) The change should not have an effect on the value of existing positions, including, but not limited to, a change affecting the price of the contract due to a change in the commodity quality characteristics of the existing contract, a change to the size of the existing contract, or a change to a cost of effecting delivery for the existing contract. [89 FR 88629, Nov. 7, 2024]