[Code of Federal Regulations]
[Title 17, Volume 1]
[Revised as of April 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR37.6]

[Page 417-418]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER I--COMMODITY FUTURES TRADING COMMISSION
 
PART 37_DERIVATIVES TRANSACTION EXECUTION FACILITIES--Table of Contents
 
Sec.  37.6  Compliance with core principles.

    (a) In general. To maintain registration as a derivatives 
transaction execution facility upon commencing operations by listing 
products for trading or otherwise, or for a dormant derivatives 
transaction execution facility as defined in Sec.  40.1 of this chapter 
that has been reinstated under Sec.  37.5(d) upon recommencing 
operations by relisting products for trading or otherwise, and on a 
continuing basis thereafter, the derivatives transaction execution 
facility must have the capacity to be, and be, in compliance with the 
core principles of Section 5a(d) of the Act.
    (b) New and reinstated derivatives transaction execution 
facilities--(1) Certification of compliance. Unless an applicant for 
registration or for reinstatement of registration has chosen to make a 
voluntary demonstration under paragraph (b)(2) of this section, a newly 
registered derivatives transaction execution facility at the time it 
commences operations, or a dormant derivatives transaction execution 
facility as defined in Sec.  40.1 of this chapter at the time that it 
recommences operations, must certify to the Commission that it has the 
capacity to, and will, operate in compliance with the core principles 
under Section 5a(d) of the Act.
    (2) Voluntary demonstration of compliance. An applicant for 
registration or for reinstatement of registration may choose to make a 
voluntary demonstration of its capacity to operate in compliance with 
the core principles. Such demonstration may be included in an 
application submitted pursuant to Sec.  37.5 of this part.
    (i) The demonstration would include the following:
    (A) The label, ``Demonstration of Compliance with Core Principles 
for Operation''
    (B) A document that describes the manner in which the applicant will

[[Page 418]]

comply with each core principle (such as a regulatory chart), which 
could cite to documents previously submitted including documents 
submitted pursuant to Sec.  37.5(b)(1)(ii)(A)-(E); and
    (C) To the extent that any of the items in Sec.  37.5(b)(1)(ii)(A)-
(E) raise issues that are novel, or for which compliance with a core 
principle is not self-evident, an explanation as to how that item and 
the application satisfy the core principle.
    (ii) If it appears that the applicant has failed to make the 
requisite showing, the Commission will so notify the applicant at the 
end of that period. Upon commencement or recommencement of operations by 
the derivatives transaction execution facility, such a notice may be 
considered by the Commission in a determination to issue a notice of 
violation of core principles under Section 5c(d) of the Act.
    (c) Existing derivatives transaction execution facilities--(1) In 
general. Upon request by the Commission, a registered derivatives 
transaction execution facility shall file with the Commission such data, 
documents and other information as the Commission may specify in its 
request that demonstrates that the registered derivatives transaction 
execution facility is in compliance with one or more core principles as 
specified in the request or that is requested by the Commission to 
enable the Commission to satisfy its obligations under the Act.
    (2) Delegation of authority. The Commission hereby delegates, until 
it orders otherwise, the authority set forth in paragraph (c)(1) of this 
section to the Director of the Division of Market Oversight or such 
other employee or employees as the Director may designate from time to 
time. The Director may submit to the Commission for its consideration 
any matter that has been delegated in this paragraph. Nothing in this 
paragraph prohibits the Commission, at its election, from exercising the 
authority delegated in this paragraph.
    (3) Change of owners. Upon a change of ownership of an existing 
registered derivatives transaction execution facility, the new owner 
shall file electronically with the Secretary of the Commission at its 
Washington, DC, headquarters, a certification that the derivatives 
transaction execution facility meets the requirements for trading and 
the criteria for registration of Sections 5a(b) and 5a(c) of the Act, 
respectively.
    (d) Guidance regarding compliance with core principles. Appendix B 
to this part provides guidance to registered derivatives transaction 
execution facilities on compliance with the core principles under 
Section 5a(d) of the Act.

[71 FR 1963, Jan. 12, 2006]