8106 Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Rules and Regulations 

1 17 CFR Part 4 (2006). The Commodity Exchange 

Act (Act), 7 U.S.C. 1 et seq. (2000), and the 

Commission’s regulations issued thereunder may be 

accessed through the Commission’s Web site, at 

http://www.cftc.gov/cftc.cftclawreg.htm. 2The definition of the term ‘‘principal’’ is set 

forth in Regulation 4.10(e)(1), which crossreferences the definition of the term in Regulation 

3.1(a). An example of a principal of a CPO 

organized as a corporation would be the 

corporation’s chief executive officer. 3Regulations 4.21 and 4.24–4.26 and 4.31 and 

4.34–4.36 concern the Disclosure Document that 

registered CPOs and CTAs, respectively, must 

prepare, deliver, and file. 4 45 FR 51600 (Aug. 4, 1980). 

5 46 FR 26004 (May 8, 1981). 

6While acknowledging that it was not possible to 

identify every advertisement that was prohibited by 

new Regulation 4.41, the Commission nonetheless 

gave notice in the Federal Register release 

announcing the adoption of the rule that it would 

consider the following, non-exclusive list of 

advertisements, to be prohibited: 

(1) References only to successful trades, if during 

the same time period, trades which were 

unsuccessful were also recommended or executed; 

(2) references to the results during a specific time 

period, if the results claimed were not fairly 

representative of results achieved for comparable 

periods; (3) suggestions, assurances or claims of 

profit potential that do not also fairly present the 

possibility of loss; (4) statements of opinions or 

predictions which are not clearly labeled as such 

or which have no reasonable basis in fact; and (5) 

failure to disclose whether, and to what extent, fees, 

commissions and other expenses are reflected in the 

past performance results. Id. at 26012. 

REVISIONS TO IFR ALTITUDES CHANGEOVER POINTS—AMENDMENT 466—Continued 

[Effective date March 15, 2007] 

From To MEA 

BENNY, MI FIX ............................................................................. BANJO, MI FIX ............................................................................ *3000 

*2200—MOCA.

BANJO, MI FIX ............................................................................. ZABLE, MI FIX ............................................................................. *5000 

*2900—MOCA.

ZABLE, MI FIX .............................................................................. *RONDO, MI FIX ......................................................................... 3000 

*5000—MRA.

*RONDO, MI FIX ................................................................... OTREE, MI FIX ............................................................................ **3000 

*5000—MRA.

**2400—MOCA.

OTREE, MI FIX ............................................................................. PELLSTON, MI VORTAC ............................................................ *3000 

*2400—MOCA.

Airway segment Changeover points 

From To Distance From 

§ 95.8003 VOR Federal Airway Changeover Points is Amended to Modify Changeover Point 

WHITE CLOUD, MI VOR/DME .......................................... MANISTEE, MI VOR/DME ................................................ 28 WHITE 

CLOUD. 

[FR Doc. E7–3051 Filed 2–22–07; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 4 

RIN 3038–AC35 

Advertising by Commodity Pool 

Operators, Commodity Trading 

Advisors, and the Principals Thereof 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final rules. 

SUMMARY: The Commodity Futures 

Trading Commission (Commission or 

CFTC) has amended Regulation 4.41, 

which governs advertising by 

commodity pool operators (CPOs), 

commodity trading advisors (CTAs), and 

the principals thereof, (1) To restrict the 

use of testimonials, (2) to clarify the 

required placement of the prescribed 

simulated or hypothetical performance 

disclaimer, and (3) to include within the 

regulation’s coverage advertisement 

through electronic media 

(Amendments). This action is in 

furtherance of the Commission’s 

longstanding view that all 

advertisements by CPOs, CTAs, and 

their principals must not be fraudulent, 

deceptive or misleading. 

EFFECTIVE DATE: March 26, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Barbara S. Gold, Associate Director, or 

Peter B. Sanchez, Staff Attorney, 

Division of Clearing and Intermediary 

Oversight, Commodity Futures Trading 

Commission, 1155 21st Street, NW., 

Washington, DC 20581, telephone 

numbers: (202) 418–5450 or (202) 418–

5237, respectively; facsimile number: 

(202) 418–5528; and electronic mail: 

bgold@cftc.gov or psanchez@cftc.gov, 

respectively. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Regulation 4.41 

Part 4 of the Commission’s regulations 

governs the operations and activities of 

CPOs and CTAs.1 In particular, 

Regulation 4.41 pertains to advertising 

by CPOs, CTAs, and the principals 2

thereof, an issue first addressed by the 

Commission over 25 years ago. The 

Commission originally proposed that 

CPOs, CTAs, and their principals could 

not advertise their actual past 

performance results in a format other 

than that which the CPO or CTA was 

required to use in its Disclosure 

Document,3 and that the presentation of 

simulated or hypothetical performance 

of a CPO, CTA, or the principals thereof 

would be prohibited.4 In response to the 

comments received and its further 

deliberations on these proposals, the 

Commission adopted less restrictive 

advertising regulations.5

With respect to the presentation of 

actual past performance, the 

Commission explained that it had 

adopted in Regulation 4.41(a) ‘‘a rule 

that leaves to the discretion of the [CPO, 

CTA, or principal] advertising 

performance results—whether actual, 

simulated or hypothetical—the format 

of that presentation, so long as that 

format is not false, misleading or 

deceptive.’’ 6 With regard to the 

presentation of simulated or 

hypothetical performance results, the 

Commission explained that it had 

adopted in Regulation 4.41(b) ‘‘a rule 

that allows the presentation of those 

results, provided that the presentation is 

accompanied by the statement 

prescribed in the rule,’’ whose purpose 

was ‘‘to alert prospective customers to 

the limitations inherent in simulated 

and hypothetical past performance 


jlentini on PROD1PC65 with RULES
Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Rules and Regulations 8107 

7 Id. 

8Section 4m(1) of the Act, 7 U.S.C. 6m(1) (2000), 

generally requires the registration of CPOs and 

CTAs. Regulation 4.13 provides exemptions from 

CPO registration for certain persons, and Sections 

4m(1) and 4m(3) and Regulation 4.14 provide 

exemptions from CTA registration for certain other 

persons. 

9 71 FR 49387. The Proposing Release may be 

accessed through the Commission’s Web site, at 

http://www.cftc.gov/files/foia/fedreg06/ 

foi060823a.pdf. 

10The comments on the Proposal similarly may 

be accessed through the Commission’s Web site, at 

http://www.cftc.gov/foia/comment06/foi06— 

005_1.htm. 

11 It appears that each of these CTAs is exempt 

from registration pursuant to Regulation 4.14(a)(9), 

which provides an exemption from registration for 

a CTA who does not direct client accounts or who 

does not provide commodity interest trading advice 

based on, or tailored to, the commodity interest or 

cash market positions or other circumstances or 

characteristics of particular clients. 

12 71 FR at 49389, citing Zauderer v. Office of 

Disciplinary Counsel, 471 U.S. 626, 638 (1985), and 

Pearson v. Shalala, 164 F.3d 650, 655 (D.C. Cir. 

1999). 

13 71 FR at 49388 n.9. 

14See 17 CFR 275.206(4)–1(a)(1) (2006). 

15See 68 FR 27116 at 27117 (May 19, 2003). 

16All of NFA’s rules can be accessed through 

NFA’s Web site, www.nfa.futures.org. 

17The Commission additionally has conformed 

the reference to performance in the statement to the 

references throughout Regulation 4.41(b), so the 

statement now refers to ‘‘simulated or hypothetical’’

performance (whereas previously it referred to 

‘‘hypothetical or simulated’’ performance). 

results.’’ 7 The Commission also noted 

the scope of new Regulation 4.41—that 

it applied to both oral and written 

communications and regardless of 

whether a CPO or a CTA was exempt 

from registration under the Act.8

B. The Proposal 

Based upon its experience with the 

operation of Regulation 4.41 over the 

course of the past 25 years, on August 

23, 2006, the Commission published for 

comment proposed amendments to the 

regulation (Proposing Release).9

Specifically, the Commission proposed 

to amend Regulation 4.41: (1) To restrict 

the use of testimonials; (2) to clarify the 

required placement of the prescribed 

simulated or hypothetical performance 

disclaimer; and (3) to include within the 

regulation’s coverage advertisement 

through electronic media (Proposal). 

C. The Comments on the Proposal 

The Commission received six 

comment letters in response to the 

Proposal, as follows: 10 one from a 

registered futures association; one from 

a bar association; one from a futures 

industry trade association; and three 

from unregistered CTAs.11 The first 

three commenters supported the 

Proposal, stating that it would further 

the goals of Regulation 4.41. The CTAs, 

however, questioned the Commission’s 

authority to adopt and maintain 

Regulation 4.41 altogether. 

Specifically, they objected to 

Regulation 4.41 on the grounds that it 

violates the First Amendment as applied 

to some CTAs. However, as the 

Commission explained in the Proposing 

Release, false, deceptive or misleading 

commercial speech is not protected by 

the First Amendment, and disclosure 

requirements to ensure that commercial 

speech is not false, deceptive or 

misleading are a constitutionally 

permissible form of regulation.12 Thus, 

the Commission continues to believe 

that, because Regulation 4.41 applies to 

forms of communication used by CTAs 

and CPOs for marketing their services, 

the regulation is subject to the 

constitutional standards for commercial 

speech and it complies with those 

standards. 

In light of the foregoing and the 

specific comments the Commission 

received on the Proposal, which are 

discussed more fully below, the 

Commission is adopting the revisions to 

Regulation 4.41 as proposed. In the 

Proposing Release, the Commission 

provided a detailed explanation of each 

revision it had proposed to make. 

Accordingly, the scope of this Federal 

Register release generally is restricted to 

responding to the comments received on 

the Proposal. The Commission invites 

interested persons to read the Proposing 

Release for a fuller discussion of the 

purpose of each of the amendments 

contained in the Proposal. 

II. Responses to the Comments 

A. New Regulation 4.41(a)(3): 

Testimonials on Actual Past 

Performance of CPOs, CTAs, and Their 

Principals 

As proposed and as adopted, 

Regulation 4.41(a)(3) requires 

advertisements of the actual past 

performance of a CPO, CTA, or a 

principal thereof that refer to a 

testimonial to prominently disclose 

specified information about the 

testimonial—e.g., that it may not be 

representative of the experience of other 

clients. As the Commission noted, it 

modeled this provision upon Rule 

2210(d)(2) of the National Association of 

Securities Dealers, Inc. (NASD), which 

sets similar limits on the use of 

testimonials in advertisements and 

other marketing materials applicable to 

NASD members—i.e., persons who are 

registered as securities broker-dealers 

under the Securities Exchange Act of 

1934 (BDs).13

One commenter questioned why the 

Commission proposed to regulate the 

use of testimonials along the lines of the 

NASD requirement for BDs, as opposed 

to adopting an outright prohibition 

against their use—as the Securities and 

Exchange Commission has done with 

respect to persons registered or required 

to be registered as investment 

advisers.14 The same commenter asked 

the Commission to explain its rationale 

for how it approached the use of 

testimonials—e.g., whether the 

Commission had based its approach on 

problems the Commission had observed 

or on requests for clarification from 

CPOs and CTAs. 

The purpose of this amendment, as 

with all of the Amendments, is to 

‘‘modernize and clarify’’ the 

Commission’s regulations concerning 

communications with the public—

which was the same purpose of the 

NASD in proposing its Rule 

2210(d)(2).15 While the Commission 

based this amendment on the 

observations of its staff, those 

observations were not of a nature so as 

to justify the adoption of an outright ban 

on testimonials at this time. In addition, 

the Commission notes that, as proposed 

and as adopted, Regulation 4.41(a)(3) 

applies to all CPOs and CTAs, not solely 

to those CPOs and CTAs subject to 

registration. 

B. Amended Regulation 4.41(b): The 

Statement That Must Accompany 

Simulated or Hypothetical Performance 

of CPOs, CTAs, and Their Principals 

1. Regulation 4.41(b)(1): The Text of the 

Statement 

Regulation 4.41(b)(1) prohibits the 

presentation of simulated or 

hypothetical performance results of a 

CPO, CTA, or principal thereof unless 

that presentation is accompanied by 

either: (1) The statement prescribed by 

the regulation; or (2) a statement 

prescribed by a registered futures 

association. The National Futures 

Association (NFA) currently is the sole 

registered futures association, and it has 

prescribed such a statement in its 

Compliance Rule 2–29(c).16 As 

proposed, the Commission has amended 

Regulation 4.41(b)(1) so as to clarify the 

meaning of the term ‘‘accompanied by’’

in the context of the statement 

prescribed by the regulation.17

One of the commenters on the 

Proposal questioned the need for 

alternative statements under the 

regulation. In response, the Commission 

notes that the availability of alternative 

statements provides a meaningful 

option for compliance with the 

regulation. Indeed, in the more than ten 

years following NFA’s adoption of 


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8108 Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Rules and Regulations 

18See NFA Notice to Members, Notice I–95–24 

(Dec. 28, 1995). 

19The Commission also notes that the use of 

alternative cautionary statements is not restricted to 

the presentation of simulated or hypothetical 

performance results. Commission Regulation 

1.55(b) sets forth the risk disclosure statement to be 

made to customers by futures commission 

merchants (FCMs) and introducing brokers (IBs). 

Regulation 1.55(a) provides, however, that the 

Commission may approve a risk disclosure 

statement authorized by one or more foreign 

regulatory agencies or self-regulatory organizations. 

In 1994, the Commission approved the use of an 

alternative risk disclosure for use by FCMs and IBs 

for trading in futures and options in the United 

States, the United Kingdom, and Ireland. 59 FR 

34376 (Jul. 5, 1994). The Commission similarly is 

unaware of any compliance or other problems 

arising from the existence of such dual general risk 

disclosures. 

20Regulation 4.7 makes relief from otherwise 

applicable disclosure, reporting and recordkeeping 

requirements available to registered CPOs and CTAs 

whose participants and clients are solely QEPs—

e.g., certain Commission and SEC registrants, 

‘‘knowledgeable employees’’ and ‘‘qualified 

purchasers,’’ and accredited investors who have 

investments with an aggregate market value of $2 

million. 

21See supra n. 18. 

This NFA advice was issued pursuant to the 

Commission’s letter approving the amendments and 

interpretation, which stated: 

Under recently-amended Commission Regulation 

4.41, persons who present commodity interest 

hypothetical trading results in their promotional 

material must include in such materials either the 

disclaimer specified in Commission Regulation 

4.41(b)(1)(i) or a disclaimer which complies with 

the rules promulgated by a registered futures 

association pursuant to Section 17(j) of the Act. 

Accordingly, NFA should inform its members that 

while new NFA Compliance Rule 2–29(c)(4) would 

not require members to provide [QEPs] with any 

disclaimer under Rule 2–29, members would be 

required to provide QEPs with a disclaimer 

pursuant to Commission Regulation 4.41(b)(1)(i). 

Letter from Jean A. Webb, Secretary of the 

Commission, to Daniel J. Roth, NFA’s General 

Counsel, dated Dec. 12, 1995. 

22Additional guidance regarding unacceptable 

practices can be gleaned from past enforcement 

actions concerning violations of Section 4o of the 

Act and Regulation 4.41. See, e.g., CFTC v. Vartuli, 

228 F.3d 94 (2d Cir. 2000) (prescribed statement 

appears on a separate page from the hypothetical 

trading results), and CFTC v. Heffernan, 245 

F.Supp.2d 1276 (S.D. Ga. 2003) (statement on a 

webpage, but not included in the original 

advertisement containing the hypothetical 

performance). 

23 5 U.S.C. 601 et seq. 

24 47 FR 18618 (Apr. 30, 1982). 

25 Id. at 18620. 

26 Id. 

Compliance Rule 2–29(c),18 the 

Commission has not been made aware 

of any compliance or other issues 

arising from the existence of alternative 

cautionary statements in Regulation 

4.41(b)(1).19 Accordingly, the 

Commission has not adopted the 

recommendation of this commenter that 

it abandon its own prescribed statement 

in favor of the prescribed NFA 

statement. 

Two commenters recommended that 

the Commission adopt an exception to 

its prescribed statement where 

advertisements are directed solely to 

persons who meet the definition of 

‘‘qualified eligible person’’ (QEP) in 

Commission Regulation 4.7.20 They 

claimed adoption of such an exception 

would be consistent with NFA 

Compliance Rule 2–29(c)(6). However, 

based upon its review of the record of 

the adoption of the NFA rule, the 

Commission has concluded that the 

NFA rule does not provide for any such 

exception. 

In its Notice to Members announcing 

the adoption of amendments to, and a 

formal interpretation of, Compliance 

Rule 2–29(c), NFA stated: 

Compliance Rule 2–29(c) and the 

Interpretative Notice do not apply to 

promotional materials directed exclusively to 

[QEPs] as defined in CFTC Regulation 4.7. 

However, CFTC Regulation 4.41(b) requires 

CPOs and CTAs to provide all potential pool 

participants or clients with either the 

disclaimer in NFA Compliance Rule 2–29(c) 

or the shorter disclaimer in CFTC Regulation 

4.41(b)(1)(i) if they are using hypothetical 

performance results. Therefore, promotional 

materials directed to QEPs by CPOs and 

CTAs should continue to include the 

disclaimer in CFTC Regulation 4.41(b)(i) 

(unless they include the disclaimer in 

Compliance Rule 2–29(c)) (emphasis in the 

original).21

Moreover, given the nature of 

simulated or hypothetical performance 

results, the Commission does not 

believe that it is appropriate to extend 

the approach of fewer disclosures to 

QEPs in this instance. Due to their 

financial sophistication and/or wealth, 

QEPs may justifiably be presumed to be 

better equipped to obtain information 

regarding industry professionals and to 

scrutinize the risks and rewards for 

particular investments. However, it is 

not clear that QEPs, solely by virtue of 

their being QEPs, are able to identify 

each instance in which otherwise 

unexplained performance results are 

simulated or hypothetical. 

Accordingly, the Commission has not 

adopted the recommendation of these 

commenters. 

2. Regulation 4.41(b)(2): The Meaning of 

‘‘In Immediate Proximity’’

Regulation 4.41(b)(2) requires that the 

statement prescribed by Regulation 

4.41(b)(1) be ‘‘prominently disclosed’’ if 

the simulated or hypothetical 

performance that is presented is other 

than oral. In order to make clear that 

simulated or hypothetical performance 

is clearly identified as such, as proposed 

and as adopted, Regulation 4.41(b)(2) 

specifies that the prescribed disclaimer 

also must be ‘‘in immediate proximity to 

the simulated or hypothetical 

performance being presented.’’

One commenter suggested that the 

proposed amendment lacked specificity 

as to the term ‘‘in immediate 

proximity.’’ The commenter requested 

that the Commission either define the 

term ‘‘in immediate proximity’’ or 

provide examples of how compliance 

with that requirement would be 

assessed in practice. 

In determining what constitutes ‘‘in 

immediate proximity’’ for the purpose 

of Regulation 4.41(b), the Commission 

does not believe that a bright-line test is 

practical for all circumstances. Rather, 

the Commission believes that, in 

determining what would constitute ‘‘in 

immediate proximity’’ to the simulated 

or hypothetical performance being 

advertised, the person providing the 

prescribed statement should use its best 

judgment. If it would be clear to 

someone viewing the simulated or 

hypothetical performance results that 

the statement is intended to refer to 

those particular performance results, 

then the statement would be ‘‘in 

immediate proximity’’ to the 

performance results.22 Thus, placing the 

statement on the cover page of a 

document would not be sufficient, 

because it would be on a different page 

from the simulated or hypothetical 

performance being shown. Similarly, if 

simulated or hypothetical performance 

results appear on several pages, the 

statement should appear on a sufficient 

number of pages so as to leave no doubt 

as to the nature of the performance 

results as they appear on each of those 

several pages. 

II. Related Matters 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(RFA) 23 requires that agencies, in 

proposing regulations, consider the 

impact of those regulations on small 

businesses. The Commission has 

previously established certain 

definitions of ‘‘small entities’’ to be used 

by the Commission in evaluating the 

impact of its regulations on such entities 

in accordance with the RFA.24

With respect to CTAs, the 

Commission has previously stated that 

it would evaluate within the context of 

a particular rule proposal whether all or 

some affected CTAs would be 

considered to be small entities and, if 

so, the economic impact on them of the 

proposal.25 Moreover, the Commission 

stated that CPOs would be considered 

small entities if they are exempt from 

registration by virtue of Regulation 

4.13(a).26 The Commission does not 

believe that the Amendments will have 

a significant impact on affected CTAs, 


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Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Rules and Regulations 8109 

27 44 U.S.C. 3501 et seq. 

28 7 U.S.C. 19(a) (2000). 

CPOs, and their principals. This is 

because the only burden that will be 

imposed by the Amendments will be in 

furtherance of the obligation to comply 

with the antifraud provisions of Section 

4o of the Act when presenting the past 

performance of CTAs, CPOs, and their 

principals—whether by way of actual, 

simulated or hypothetical performance 

or through the use of testimonials. 

Assuming arguendo, however, that 

compliance with Section 4o will 

constitute a significant burden, the 

burden is neither new nor additional, 

because the Amendments are consistent 

with the Commission’s longstanding 

interpretation of Section 4o as 

applicable to all advertisements by 

CTAs, CPOs, and their principals, 

including advertisements that are 

viewed electronically, and with the 

requirement that such advertisements 

must not be false or misleading. 

The Commission did not receive any 

comments relative to its analysis of the 

application of the RFA to the Proposal. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(PRA) 27 imposes certain requirements 

on Federal agencies (including the 

Commission) in connection with their 

conducting or sponsoring any collection 

of information as defined by the PRA. 

The Amendments do not require a new 

collection of information on the part of 

any entities. 

The Commission did not receive any 

comments relative to its analysis of the 

application of the PRA to the Proposal. 

C. Cost-Benefit Analysis 

Section 15(a) of the Act 28 requires the 

Commission to consider the costs and 

benefits of its action before issuing a 

new regulation under the Act. By its 

terms, Section 15(a) does not require the 

Commission to quantify the costs and 

benefits of a new regulation or to 

determine whether the benefits of the 

proposed regulation outweigh its costs. 

Rather, Section 15(a) simply requires 

the Commission to ‘‘consider the costs 

and benefits’’ of its action. 

Section 15(a) further specifies that 

costs and benefits shall be evaluated in 

light of five broad areas of market and 

public concern: Protection of market 

participants and the public; efficiency, 

competitiveness, and financial integrity 

of futures markets; price discovery; 

sound risk management practices; and 

other public interest considerations. 

Accordingly, the Commission could in 

its discretion give greater weight to any 

one of the five enumerated areas and 

could in its discretion determine that, 

notwithstanding its costs, a particular 

regulation was necessary or appropriate 

to protect the public interest or to 

effectuate any of the provisions or to 

accomplish any of the purposes of the 

Act. 

The Commission did not receive any 

comments relative to its cost-benefit 

analysis of the Proposal. 

List of Subjects in 17 CFR Part 4 

Advertising, Commodity pool 

operators, Commodity trading advisors, 

Commodity futures, Commodity 

options, Customer protection, Reporting 

and Recordkeeping. 

■ For the reasons presented above, the 

Commission hereby amends chapter I of 

Title 17 of the Code of Federal 

Regulations as follows: 

PART 4—COMMODITY POOL 

OPERATORS AND COMMODITY 

TRADING ADVISORS 

■ 1. The authority citation for part 4 

continues to read as follows: 

Authority: 7 U.S.C. 1a, 2, 4, 6b, 6c, 6l, 6m, 

6n, 6o, 12a, and 23. 

■ 2. Section 4.41 is amended by 

removing ‘‘or’’ at the end of paragraph 

(a)(1), removing the period and adding 

a semi-colon and ‘‘or’’ at the end of 

paragraph (a)(2), adding new paragraph 

(a)(3), and revising paragraphs (b)(1)(i), 

(b)(2), and (c)(1) to read as follows: 

§ 4.41 Advertising by commodity pool 

operators, commodity trading advisors, and 

the principals thereof. 

(a) * * * 

(3) Refers to any testimonial, unless 

the advertisement or sales literature 

providing the testimonial prominently 

discloses: 

(i) That the testimonial may not be 

representative of the experience of other 

clients; 

(ii) That the testimonial is no 

guarantee of future performance or 

success; and 

(iii) If, more than a nominal sum is 

paid, the fact that it is a paid 

testimonial. 

(b) * * * 

(1) * * * 

(i) The following statement: ‘‘These 

results are based on simulated or 

hypothetical performance results that 

have certain inherent limitations. 

Unlike the results shown in an actual 

performance record, these results do not 

represent actual trading. Also, because 

these trades have not actually been 

executed, these results may have underor over-compensated for the impact, if 

any, of certain market factors, such as 

lack of liquidity. Simulated or 

hypothetical trading programs in 

general are also subject to the fact that 

they are designed with the benefit of 

hindsight. No representation is being 

made that any account will or is likely 

to achieve profits or losses similar to 

these being shown.’’ ; or 

* * * * * 

(2) If the presentation of such 

simulated or hypothetical performance 

is other than oral, the prescribed 

statement must be prominently 

disclosed and in immediate proximity 

to the simulated or hypothetical 

performance being presented. 

(c) * * * 

(1) To any publication, distribution or 

broadcast of any report, letter, circular, 

memorandum, publication, writing, 

advertisement or other literature or 

advice, whether by electronic media or 

otherwise, including information 

provided via internet or e-mail, the texts 

of standardized oral presentations and 

of radio, television, seminar or similar 

mass media presentations; and 

* * * * * 

Issued in Washington, DC, on February 16, 

2007, by the Commission. 

Eileen A. Donovan, 

Acting Secretary of the Commission. 

[FR Doc. E7–3122 Filed 2–22–07; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Bureau of Customs and Border 

Protection 

19 CFR Part 123 

Advance Electronic Presentation of 

Cargo Information for Truck Carriers 

Required To Be Transmitted Through 

ACE Truck Manifest at Ports in the 

States of Michigan and New York 

AGENCY: Customs and Border Protection, 

Department of Homeland Security. 

ACTION: Notice. 

SUMMARY: Pursuant to section 343(a) of 

the Trade Act of 2002 and implementing 

regulations, truck carriers and other 

eligible parties are required to transmit 

advance electronic truck cargo 

information to the Bureau of Customs 

and Border Protection (CBP) through a 

CBP-approved electronic data 

interchange. In a previous notice, CBP 

designated the Automated Commercial 

Environment (ACE) Truck Manifest 

System as the approved interchange and 

announced that the requirement that 

advance electronic cargo information be 

transmitted through ACE would be 


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