after written notice of such a change is received by the Commission if:

(i) The change is not inconsistent with any provision of the Act or the Commission's regulations; and

(ii) The contract market labels the written notice as being submitted pursuant to paragraph (k) of this section.

(2) The Commission will, within ten days after receipt by the Commission of notice of a change in trading hours, notify the contract market making the submission if it appears that the change is not consistent with some provision of the Act or the Commission's regulations. Upon such notification by the Commission to the contract market, the change will be subject to the usual procedures under section 5a(a)(12)(A) of the Act and paragraph (b) of this section.

(1) Trading months. (1) Notwithstanding the provisions of paragraph (b) of this section, all changes in trading months shall be deemed approved by the Commission ten days after written notice of such a change is received by the Commission if:

(i) The change is consistent with a rule of the contract market governing the listing of trading months which has been approved by the Commission, and with the Act and the Commission's regulations;

(ii) The change does not provide for the listing of a trading month outside the currently established cycle of trading months; and

(iii) For proposals to delist previously listed futures or option contract months, the months to be delisted have no open interest at the time of delisting.

(iv) The contract market labels the written notice as being submitted pursuant to paragraph (1) of this section.

(2) The Commission will, within ten days after receipt by the Commission of notice of a change in the listing of trading months, notify the contract market making the submission if it appears that the change is not consistent with the provisions of this paragraph. Upon such notification by the Commission to the contract market, the change will be subject to the usual procedures under section 5a(a)(12)(A) of the Act and paragraph (b) of this section.

(m) Contract terms established by independent third parties. (1) Notwithstanding the provisions of paragraph (b) of this section, changes in grades or standards of commodities on which futures or options contracts are based, which are established, selected or calculated by independent third parties and which are incorporated by reference as terms of a contract, shall be deemed approved by the Commission ten days after written notice of such a change is received by the Commission if:

(i) The grade or standard is established, selected or calculated by an independent third party for purposes other than solely for use in connection with a futures or options contract;

(ii) The change is consistent with a rule of the contract market which has been approved by the Commission for this purpose, and with the Act and the Commission's regulations; and

(iii) The contract market labels the written notice as being submitted pursuant to paragraph (m) of this section.

(2) The Commission will, within ten days after receipt by the Commission of notice of such a change, notify the contract market making the submission if it appears that the change is not consistent with the provisions of this paragraph. Upon such notification by the Commission to the contract market, the change will be subject to the usual procedures under section 5a(a)(12)(A) of the Act and paragraph (b) of this section.

(n) Other changes. (1) Notwithstanding the provisions of paragraph (b) of this section, changes in the terms and conditions of a futures or option contract other than those changes specified in paragraphs (h) (m) of this section shall be deemed approved by the Commission at such time as the Commission shall specify if:

(i) The Commission notifies the contract market in writing, at the time of contract market designation, or such other time as the Commission may deem appropriate, that certain changes in terms and conditions may be submitted pursuant to the provisions of this paragraph;

(ii) The change is consistent with standards established by the Commission in its notification to the contract

market of the applicability of this paragraph, and with the Act and the Commission's regulations; and

(iii) The contract market labels the written notice as being submitted pursuant to paragraph (n) of this section.

(2) The Commission will within ten days after receipt by the Commission of notice of a change submitted pursuant to this paragraph, notify the contract market making the submission if it appears that the change is not consistent with standards established by the Commission. Upon such notification by the Commission to the contract market, the change will be subject to the usual procedures under section 5a(a)(12)(A) of the Act and paragraph (b) of this section.

(3) The Commission may at any time alter or revoke the applicability of this paragraph to any particular contract.

(0) Option strike price listing procedures. (1) Notwithstanding the provisions of paragraph (b) of this section, all changes in the number of strike prices listed, both initially when a contract for a specific expiration date is first listed for trading and throughout the life of that option contract, and changes in the strike-price interval(s) shall be deemed approved by the Commission 10 days after written notice of such change is received by the Commission if:

(i) The amended rule provides for a strike-price listing procedure that is specified and automatic.

(ii) The amended rule does not affect any option with open interest at the time the rule goes into effect.

(iii) The contract market labels the written notice as being submitted pursuant to Commission Regulation 1.41(0).

(2) The Commission will, within 10 days after receipt by the Commission of notice of a change in the strike price listing procedure of an option contract, notify the contract market making the submission if it appears that the change is not consistent with the provisions of this paragraph. Upon such notification by the Commission to the contract market, the change will be subject to the usual procedures under section 5a(a)(12)(A) of the Act and paragraph (b) of this section.

(p) Option last trading day specification. (1) For purposes of this paragraph, an option on a future is an option contract that includes a provision for exercise of the option into an underlying futures contract. An option on a physical does not contain such a provision. (2) Notwithstanding the provisions of all paragraph (b) of this section, changes in the last trading day of an option on a future or an option on a physical shall be deemed approved by the Commission 10 days after written notice of such change is received by the Commission if:

(i) For futures options not based on cash-settled futures contracts, the option expires not less than one business day before the earlier of the last trading day or first notice day of the underlying futures contract; for futures options based on cash-settled futures contracts, the option expires no later than the last trading day of the underlying futures contract; or, for options on physicals, the option expires not less than one business day before the earlier of the last trading day or first notice day of any non-cash-settled futures contract in the same or a related commodity, or no later than the last trading day of a cash-settled futures contract in the same or a related commodity.

(ii) The amended last trading day rule does not apply to any option with open interest at the time the rule goes into effect.

(iii) The contract market labels the written notice as being submitted pursuant to Commission Regulation 1.41(p).

(3) The Commission will, within 10 days after receipt by the Commission of notice of a change in the last trading day specification of an option contract, notify the contract market making the submission if it appears that the change is not consistent with the provisions of this paragraph. Upon such notification by the Commission to the contract market, the change will be subject to the usual procedures under section 5a(a)(12) of the Act and paragraph (b) of this section.

(q) Option cabinet trade provisions. (1) For purposes of this paragraph, a cabinet trade is defined as an option trade that represents a transaction whereby

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the per-contract value of the cabinet trade is less than the per-contract value associated with a trade at the existing minimum premium fluctuation specified in the contract market's rules for that option contract.

(2) Notwithstanding the provisions of paragraph (b) of this section, all initial specifications of, and changes to, option cabinet trade provisions shall be deemed approved by the Commission 10 days after written notice of such change is received by the Commission if:

(i) The initial specification of a cabinet trade rule or a change thereto provides that the per-contract value (or values) of the cabinet trade is (are) less than the per-contract value associated with a trade at the existing minimum premium fluctuation specified in the contract market's rules for that option contract.

(ii) The contract market labels the written notice as being submitted pursuant to paragraph (q) of this section.

(3) The Commission will, within 10 days after receipt by the Commission of notice of a change in the cabinet trade provisions of an option contract, notify the contract market making the submission if it appears that the change is not consistent with the provisions of this paragraph. Upon such notification by the Commission to the contract market, the change will be subject to the usual procedures under section 5a(a)(12) of the Act and paragraph (b) of this section.

(r) Option serial month listing procedures. (1) Serial options arise when exchanges list options with different expiration dates based on the same underlying futures contract month. Accordingly, and for purposes of this paragraph, a serial option is defined as a futures option contract which is based on the same futures delivery month but which expires earlier than the option contract expiring nearest to but before, or on, the last trading day of the underlying futures delivery month.

(2) Notwithstanding the provisions of paragraph (b) of this section, all initial specifications of, and changes to, the serial option listing procedures for options on futures (option contracts that include a provision for exercise into a

futures contract) shall be deemed approved by the Commission 10 days after written notice of such change is received by the Commission if:

(i) The rule provides for a serial option listing procedure that is specified and automatic.

(ii) The contract market labels the written notice as being submitted pursuant to Commission Regulation 1.41(r).

(3) The Commission will, within 10 days after receipt by the Commission of notice of a rule change relating to the serial option listing procedure of an option on a futures contract, notify the contract market making the submission if it appears that the change is not consistent with the provisions of this paragraph. Upon such notification by the Commission to the contract market, the change will be subject to the usual procedures under section 5a(a)(12)(A) of the Act and paragraph (b) of this section.

(8) Option automatic exercise procedures. (1) Notwithstanding the provisions of paragraph (b) of this section, all rules relating to automatic exercise provisions for options on futures shall be deemed approved by the Commission 10 days after written notice of such change is received by the Commission if:

(i) The rule provides for automatic exercise procedures that are specified and objective, apply to in-the-money options only, and provide an opportunity for option holders to override the automatic exercise provision. (ii) The contract market labels the written notice as being submitted pursuant to Commission Regulation 1.41(8).

(2) The Commission will, within 10 days after receipt by the Commission of notice of a change in the automatic exercise procedures of an option contract, notify the contract market making the submission if it appears that the change is not consistent with the provisions of this paragraph. Upon such notification by the Commission to the contract market, the change will be subject to the usual procedures under section 5a(a)(12)(A) of the Act and paragraph (b) of this section.

(t) Financial standards for regular delivery facilities. (1) Notwithstanding the

provisions of paragraph (b) of this section, all changes in the financial standards or financial requirements for regular delivery facilities or comparable entities shall be deemed approved by the Commission 10 days after written notice of such change is received by the Commission if:

(i) The contract market includes evidence that the amended rule does not affect the regularity or delivery status of any existing facility declared regular by the contract market for the relevant commodity(ies) or likely candidates for regularity status.

(ii) The proposed requirement is specified in the rules, is objective and applies uniformly to all existing regular facilities as well as to all applications for regularity.

(iii) The proposed requirement is related solely for the purpose of ensuring the financial integrity of the regular facility(ies).

(iv) The contract market labels the written notice as being submitted pursuant to Commission Regulation 1.41(t).

(2) The Commission will, within 10 days after receipt by the Commission of a rule change relating to the financial standards or requirements for regular delivery facilities, notify the contract market making the submission if it appears that the change is not consistent with the provisions of this paragraph or if the submission raises issues relating to the requirements of the Commodity Exchange Act or the regulations promulgated thereunder. Upon such notification by the Commission to the contract market, the change will be subject to the usual procedures under section 5a(a)(12)(A) of the Act and paragraph (b) of this section.

(Approved by the Office of Management and Budget under control numbers 3038-0007 and 3038-0022)

[41 FR 40098, Sept. 17, 1976, as amended at 46 FR 54523, Nov. 3, 1981; 46 FR 63035, Dec. 30, 1981; 48 FR 4259, Jan. 28, 1983; 48 FR 49008, Oct. 24, 1983; 50 FR 30138, July 24, 1985; 50 FR 31839, Aug. 7, 1985; 56 FR 42685, Aug. 29, 1991; 57 FR 20637, May 14, 1992; 57 FR 27924, June 23, 1992; 58 FR 26237, May 3, 1993; 58 FR 37653, July 13, 1993; 59 FR 2289, Jan. 14, 1994; 59 FR 5525, Feb. 7, 1994; 62 FR 10433, 10439, Mar. 7, 1997]

(c) Rules that do not relate to terms and conditions. (1) Except as provided in paragraphs (d) and (f) of this section (exempt or temporary emergency rules), one copy of any rule which does not relate to terms and conditions or which a contract market proposes to place into effect without submission to the Commission for approval under section 5a(a)(12) of the Act and paragraph (b) of this section shall be furnished to the Commission at its Washington, DC headquarters at least ten days prior to its proposed effective date. One copy also shall be transmitted by the contract market to the regional office of the Commission having local jurisdiction over the contract market. Each such submission shall be labeled as being submitted pursuant to paragraph (c) of this section and include the information required by paragraphs (b)(2) through (b)(5) of this section.

(2) The Commission may remit to the contract market, with an appropriate explanation where practicable, and not accept pursuant to this paragraph (c) any submission that does not comply with the form and content requirements of this paragraph. Rules submitted pursuant to this paragraph (c) otherwise may become effective ten days after receipt (or at such earlier time as may be determined by the Commission) unless the Commission notifies the contract market in writing of its determination to review such rules for prior approval under section 5a(a)(12)(A) of the Act and paragraph (b) of this section.

2. At 62 FR 10439, Mar. 7, 1997, §1.41(b), the introductory text, paragraphs (b)(1), (b)(2), (b)(3), (b)(4), (b)(5) and the concluding text was redesignated as (b)(1)(i), (b)(1)(1)(A), (b)(1)(1)(B), (b)(1)(1)(C), (b)(1)(1)(D), (b)(1)(i)(E), and (b)(1)(ii), respectively; the first sentence of newly redesignated paragraph (b)(1)(i) and newly redesignated paragraph (b)(1)(ii) was revised; and paragraphs (b)(2) through (b)(4) was added, effective Apr. 7, 1997. For the convenience of the user, the superseded text is set forth as follows:

$1.41 Contract market rules; submission of rules to the Commission; exemption of certain rules.

(b) Submission of rules for prior Commission approval. (1)(1)Except as provided herein and