the same as, or substantially the same as, a term or condition approved for any other designated contract market which is not dormant with the meaning of §5.2 of this part, then the individual term(s) or condition(s) need not be analyzed and justified and need only be referenced to the original, approved term or condition.

(i) The justification submitted by a board of trade concerning significant contract terms shall include, when applicable, (a) evidence of conformity with the underlying cash market and (b) evidence that the term or condition will provide for a deliverable supply which will not be conducive to price manipulation or distortion and that such a supply reasonably can be expected to be available to the short trader and saleable by the long trader at its market value in normal cash marketing channels. To the extent that a term or condition is not in conformity with prevailing cash market practices, the board of trade shall provide a reason for the variance and demonstrate that the term or condition is necessary or appropriate for the contract and will result in sufficiently available and saleable deliverable supplies.

(ii) For contracts which require delivery, the justification shall include a demonstration that the contract terms and conditions, as a whole, will result in a deliverable supply which will not be conducive to price manipulation or distortion, including when applicable the following:

(A) Complete specification and commodity characteristics for par and non-par delivery (such as grade, class, weight, issuer, maturity, rating) including the economic basis for the premiums and discounts, or lack thereof, for differing characteristics. For futures contracts based on debt securities, this shall include an economic justification of the formula to be used for the evaluation of non-par instruments;

(B) All delivery points, including, when applicable, for each point:

(1) The nature of the cash market at the delivery point (e.g., auction market, buying station or export terminal);

(2) A description of the composition of the market;

(3) The normal commercial practice for establishing cash market values and the availability of published cash prices reflecting the value of the deliverable commodity;

(4) The level of deliverable supplies normally available, including the seasonal distribution of such supplies; and

(5) Any locational differentials for delivery points, including the economic basis for discounts or premiums, or lack thereof, applying to delivery points;

(C) A description of the delivery facility (such as warehouse, depository, financial institution) including:

(1) The type(s) of delivery facility at each delivery point;

(2) The number and total capacity of facilities meeting contact requirements;

(3) The proportion of such capacity expected to be available for traders who may wish to make delivery and seasonal changes in such proportions; and

(4) The extent to which ownership and control of such facilities is dispersed or concentrated.

(iii) For contracts when cash settlements may serve as an alternative to, or substitute for, physical delivery, information submitted by the board of trade pursuant to this section must include evidence that the cash settlement of the contract is at a price reflecting the underlying cash market, will not be subject to manipulation or distortion, and must also include:

(A) An analysis of the price series upon which such settlement will be based, including the series' reliability, acceptability, public availability and timeliness, and

(B) An analysis of the potential for manipulation or distortion of the cash-price series. (iv) With regard to delivery months, the board of trade shall specify the delivery months and, when applicable, shall describe the relationship of each futures delivery month to cyclical variations in deliverable supplies, availability of warehouse space, transportation facilities, cash market activity, and any other factors which may affect the viability of delivery or ascertaining a cash settlement price in each such month. The board of trade's justification shall also consider the delivery months for existing contracts which draw on the same deliverable supply or cash settlement mechanism.

(v) For those contract markets required to have in effect speculative position limits under § 1.61 of this chapter, the board of trade shall include an analysis of the consistency of the speculative position limits proposed in the application with the criteria set forth in that section.

(3) Stipulation of Conformity to the Cash Market. A board of trade shall submit a stipulation that, when applicable, the following terms and conditions of its proposed contract are consistent with prevailing cash market practices. For those terms and conditions which are contrary to such a stipulation, the board of trade shall provide a reason for the variance from prevailing cash market practices and demonstrate that the term or condition is necessary or appropriate for the contract. These terms and conditions include the following:

(i) The permissible delivery pack or composition of delivery units;

(ii) The size of contract unit;

(iii) The inspection and certification procedures for the verification of delivery eligibility and, for perishable commodities, the duration of the inspection certificate and any discounts applied to deliveries of a given age;

(c) For Designation of Contract Markets in Options on Physicals.-(1) Terms and Conditions. A board of trade shall submit the terms and conditions of the proposed option.

(2) Description of the Cash Market. A board of trade shall submit a description of the cash market as provided under paragraph (a)(1) of this Guideline.

(3) Justification of Terms and Conditions. A board of trade shall submit an analysis and justification of the following:

(i) The term(s) and conditions(s) identified in paragraph (a)(2) of this Guideline relevant to the option on a physical;

(ii) Any term or condition not meeting a criterion identified on the Option Designation Checklist contained in paragraph (c)(5) of this Guideline; and

(iii) Such other term(s) and condition(s) as requested.

(4) Stipulation of Conformity to the Cash Market. A board of trade shall submit a stipulation that the terms and conditions listed in paragraph (a)(3) of this Guideline are consistent with prevailing cash market practices, or, for those which are not, a justification consistent with paragraph (a)(3) of this Guideline.

(5) Option Desgination Checklist. A board of trade shall submit an Option Designation Checklist for Options on Physicals. When each individual criterion identified by the checklist is met by a term or condition of the proposed option, the exchange rule number or other identification of the term or condition shall be included on the checklist. The option designation checklist is as follows:

(6) Other required information. As requested, a board of trade shall submit additional evidence, information, data or stipulations relating to whether a contract meets, initially or on a continuing basis, the public interest standard contained in section 5(7) of the Act, the economic purpose standard of §33.4(a)(5)(i) of this chapter, or any other requirement for designation under the Act or Commission rules.

[57 FR 3523, Jan. 30, 1992, as amended at 59 FR 2291, Jan. 14, 1994; 59 FR 5316, Feb. 4, 1994]

APPENDIX B TO PART 5-SCHEDULE OF FEES

(a) Applications for contract market designation. Each application for designation must be accompanied by a check or money order made payable to the Commodity Futures Trading Commission in an amount to be determined annually by the Commission and published in the FEDERAL REGISTER.

183-051 D-99--8

(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, NW., 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 applications for designation as a contract market will result in return of the application. Fees will not be returned after receipt.

(Secs. 4c(c), 5, 5a, and 8a(5) of the Commodity Exchange Act, 7 U.S.C. 6c(c), 7, 7a, and 12a(5); sec. 26 of the Futures Trading Act of 1978, 92 Stat. 877, 7 U.S.C. 16a (Supp. V 1981), as amended by sec. 237 of the Futures Trading Act of 1982, Pub. L. 97-444, 96 Stat. 2326 (Jan. 11, 1983); Independent Offices Appropriation

Act of 1952, as amended by Pub. L. 97-258, 96 Stat. 1051 (Sept. 13, 1982))

[48 FR 38217, Aug. 23, 1983, as amended at 51 FR 21150, June 11, 1986; 52 FR 22635, June 15, 1987; 60 FR 49334, Sept. 25, 1995]

APPENDIX C TO PART 5-INTERNAL PROCEDURE REGARDING PERIOD FOR RESPONSE BY EXCHANGES

(a) Response Period. The failure of an exchange to provide a substantially complete, substantive response within one year from the date of a written Commission notice of the material incompleteness of an application for contract market designation, or to supplement such an application within one year from the date of a voluntary agreement to do so, will be deemed to constitute the withdrawal of such an application. Such a withdrawal results in forfeiture of the designation application fee and terminates the Commission's statutory review period for that application. The applicable fee for designation applications will be waived for a period of one year from the date of the application's withdrawal where the withdrawn designation application, or a substantially identical application, is refiled within that period. A refiled designation application will be treated as a new application in all other respects.

(b) Pending Applications. For all applications pending on the effective date of this procedure, requests for a further stay of the tolling period must be made by the governing board of the exchange within fortyfive days prior to the expiration of a year from the date of the stay. Provided however, That in no event shall such a request be required before April 14, 1987. Such requests for a further stay should affirm the exchange's intention to complete the designation applications for which the stay is being requested. Such requests should be sent to the attention of the Office of the Secretariat, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. Those pending applications for which no such request is received will be subject to the procedures contained in paragraph (a) of this appendix.

[52 FR 1446, Jan. 14, 1987, as amended at 60 FR 49334, Sept. 25, 1995]

APPENDIX D TO PART 5-INTERNAL PRO-
PERIOD FOR

CEDURE REGARDING
PUBLIC COMMENT

The Commission will seek public comment on applications for designation of futures and option contract markets by publishing a notice of availability of the terms and conditions of the proposed contract. Generally, the Commission will provide for a public comment period of thirty days on such appli

If the customer elects to initiate an arbitration proceeding of any customer claim or grievance, the member shall submit to arbitration in accordance with these Arbitration Rules and Regulations. The Arbitration shall be initiated by delivery to the Administrator of (a) a Statement of Claim and a "Chicago Board of Trade Arbitration Submission Agreement for Customer's Claims and Grievances" signed by the customer or (b) a Statement of Claim and another arbitration agreement between the parties, which agreement conforms in all respects with any applicable requirements prescribed by the Commodity Futures Trading Commission. The refusal of any member or employee to sign the "Chicago Board of Trade Arbitration Submission Agreement for Customer's Claims and Grievances❞ shall not deprive the Arbitration Committee or a Mixed Panel constituted pursuant to Regulation 620.02 of jurisdiction to arbitrate customers' claims under these Arbitration Rules and Regulations. The Committee and Mixed Panels have jurisdiction to arbitrate a counterclaim asserted in such an arbitration, but only if it arises out of the transaction or occurrence that is the subject of the customer's claim or grievance and does not require for adjudication the presence of essential witnesses, parties or third persons over whom the Association does not have jurisdiction. Other counterclaims are subject to arbitration by the Committee, or a Mixed Panel, only if the customer agrees to the submission after the counterclaim has arisen.

[49 FR 10660, Mar. 22, 1984]

Subpart A-General Provisions

§ 8.01 Scope of rules.

This part sets forth the standards to be followed by an exchange in establishing procedures for investigating and adjudicating possible rule violations within the disciplinary jurisdiction of the exchange, for taking summary action in member responsibility cases and in cases involving violations of rules regarding decorum, submission of records or other similar activities, and for adjudicating membership denial determinations. Nothing in this part shall be construed to prohibit an exchange from adopting additional rules and practices not inconsistent with those set forth herein.

§ 8.02 Implementing exchange rules.

(a) Each exchange shall submit to the Commission for its approval rules implementing the following regulations: §§ 8.11, 8.13, 8.15, 8.17, 8.18 and 8.20 of subpart B and §§ 8.26 and 8.28 of subpart C. Any such rule not previously submitted to the Commission shall not be put into effect prior to Commission approval.

(b) An exchange may adopt rules implementing any or all of the following