[Code of Federal Regulations]
[Title 17, Volume 1]
[Revised as of April 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR40.6]

[Page 449-451]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER I--COMMODITY FUTURES TRADING COMMISSION
 
PART 40_PROVISIONS COMMON TO CONTRACT MARKETS, DERIVATIVES TRANSACTION 
EXECUTION FACILITIES AND DERIVATIVES CLEARING ORGANIZATIONS--Table of Contents
 
Sec.  40.6  Self-certification of rules by designated contract markets 
and registered derivatives clearing organizations.

    (a) Required certification. A designated contract market or a 
registered derivatives clearing organization may implement any new rule 
or rule amendment (other than a rule or rule amendment approved or 
deemed approved by the Commission under Sec.  40.5) if the following 
conditions have been met:
    (1) 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(4) of the Act or an option on such a contract 
or commodity in a delivery month having open interest;
    (2) The designated contract market or registered derivatives 
clearing organization has filed a submission electronically for the rule 
or rule amendment with the Secretary of the Commission and at the 
regional office having local jurisdiction over the submitting registered 
entity in a format specified by the Secretary of the Commission, and the 
Commission has received the submission at its headquarters by close of 
business on the business day preceding implementation of the rule; 
provided, however, rules or rule amendments implemented under procedures 
of the governing board to respond to an emergency as defined in Sec.  
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 24 hours after implementation; and
    (3) The rule submission includes:
    (i) A copy of the submission cover sheet in accordance with the 
instructions in Appendix D to this part (in the case of a rule or rule 
amendment that responds to an emergency, ``Emergency Rule 
Certification'' should be noted in the Description section of the 
submission coversheet);
    (ii) The text of the rule (in the case of a rule amendment, 
deletions and additions must be indicated);
    (iii) The date of implementation;
    (iv) 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; and
    (v) A certification by the registered entity that the rule complies 
with the Act and regulations thereunder.
    (4) 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 
certification filing and the entity's compliance with any of the 
requirements of the Act or Commission regulations or policies 
thereunder.
    (b) Stay. The Commission may stay the effectiveness of a rule 
implemented pursuant to paragraph (a) of this section during the 
pendency of Commission proceedings for filing a false certification or 
to alter or amend the rule pursuant to section 8a(7) of the Act. The 
decision to stay the effectiveness of a rule in such circumstances shall 
not be delegable to any employee of the Commission.
    (c) Notification of rule amendments. Notwithstanding the rule 
certification requirement of Section 5c(c)(1) of the Act, and paragraphs 
(a)(1), (a)(2) and (a)(3) of this section, a designated contract market 
or a registered derivatives clearing organization may place the 
following rules or rule amendments into effect without certification to 
the Commission if the following conditions are met:
    (1) The designated contract market or registered derivatives 
clearing organization provides to the Commission at least weekly a 
summary notice of all rule changes made effective pursuant

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to this paragraph during the preceding week. Such notice must be labeled 
``Weekly Notification of Rule Changes'' 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 specified by 
the Secretary of the Commission; and
    (2) The rule governs:
    (i) Nonmaterial revisions. Corrections of typographical errors, 
renumbering, periodic routine updates to identifying information about 
approved entities and other such nonsubstantive revisions of a product's 
terms and conditions that have no effect on the economic characteristics 
of the product;
    (ii) Delivery standards set by third parties. Changes to grades or 
standards of commodities deliverable on a product that are established 
by an independent third party and that are incorporated by reference as 
product terms, provided that the grade or standard is not established, 
selected or calculated solely for use in connection with futures or 
option trading and such changes do not affect deliverable supplies or 
the pricing basis for the product;
    (iii) Index products. Routine changes in the composition, 
computation, or method of selection of component entities of an index 
(other than a stock index) referenced and defined in the product's 
terms, that do not affect the pricing basis of the index, which are made 
by an independent third party whose business relates to the collection 
or dissemination of price information and which was not formed solely 
for the purpose of compiling an index for use in connection with a 
futures or option product;
    (iv) Option contract terms. Changes to option contract rules 
relating to the strike price listing procedures, strike price intervals, 
and the listing of strike prices on a discretionary basis, or
    (v) Fees. Fees or fee changes that are $1.00 or more per contract 
and are established by an independent third party or are unrelated to 
delivery, trading, clearing or dispute resolution.
    (vi) Survey lists. Changes to lists of banks, brokers, dealers, or 
other entities that provide price or cash market information to an 
independent third party and that are incorporated by reference as 
product terms.
    (3) Notification of rule amendments not required. Notwithstanding 
the rule certification requirements of section 5c(c)(1) of the Act and 
of paragraphs (a)(2) and (a)(3) of this section, designated contract 
markets and registered derivatives clearing organizations may place the 
following rules or rule amendments into effect without certification or 
notice to the Commission if the following conditions are met:
    (i) The designated contract market or registered derivatives 
clearing organization maintains documentation regarding all changes to 
rules; and
    (ii) The rule governs:
    (A) Transfer of membership or ownership. Procedures and forms for 
the purchase, sale or transfer of membership or ownership, but not 
including qualifications for membership or ownership, any right or 
obligation of membership or ownership or dues or assessments;
    (B) Administrative procedures. The organization and administrative 
procedures of a contract market or a derivatives clearing organization's 
governing bodies such as a Board of Directors, Officers and Committees, 
but not voting requirements, Board of Directors or Committee composition 
requirements or procedures, use or disclosure of material non-public 
information gained through the performance of official duties, or 
requirements relating to conflicts of interest;
    (C) Administration. The routine, daily administration, direction and 
control of employees, requirements relating to gratuity and similar 
funds, but not guaranty, reserves, or similar funds; declaration of 
holidays, and changes to facilities housing the market, trading floor or 
trading area;
    (D) Standards of decorum. Standards of decorum or attire or similar 
provisions relating to admission to the floor, badges, or visitors, but 
not the establishment of penalties for violations of such rules; and
    (E) Fees. Fees or fee changes that are less than $1.00 or that 
relate to matters such as dues, badges, telecommunication services, 
booth space, real time quotations, historical information, publications, 
software licenses or other

[[Page 451]]

matters that are administrative in nature.
    (F) Securities Indexes. Routine changes to the composition, 
computation or method of security selection of an index that is 
referenced and defined in the product's rules, and which are made by an 
independent third party.

[66 FR 42283, Aug. 10, 2001, as amended at 67 FR 62879, Oct. 9, 2002; 69 
FR 67505, Nov. 18, 2004; 71 FR 1970, Jan. 12, 2006]