Federal Register / Vol. 62, No. 39 / Thursday, February 27, 1997 / Rules and Regulations 8875

1Relief under this Supplemental Order extends

only to those products falling within the

jurisdiction of the Commodity Exchange Act

(‘‘CEA’’ or ‘‘Act’’) and remains subject to existing

product restrictions under the CEA and

Commission regulations and procedures thereunder

related to stock indices and foreign government

debt (see CEA section 2(a)(1)(B)(v) and Securities

and Exchange Commission rule 3a12–8).

2 In 1989 the Commission issued a series of rule

30.10 orders authorizing firms designated by the

U.K. Securities and Investments Board and certain

U.K. ‘‘Self-Regulating Organisations’’ to conduct

brokerage activities for U.S. customers on any nonU.S. exchange designated under U.K. law. See 54

FR 21599, 21600 (May 19, 1989) (SIB), 54 FR 21604,

21605 (May 19, 1989) (Association of Futures

Brokers and Dealers (‘‘AFBD’’)), 54 FR 21609, 21610

(May 19, 1989) (The Securities Association

(‘‘TSA’’)), and 54 FR 21614, 21615 (May 19, 1989)

(Investment Management Regulatory Organisation).

The AFBD and TSA subsequently merged to form

the Securities and Futures Association, which

became the successor organization for rule 30.10

purposes. See 56 FR 14017 (April 5, 1991).

The Commission also has issued similar

supplemental relief to the Sydney Futures

Exchange, see 58 FR 19209 (April 13, 1993), and to

the New Zealand Futures and Options Exchange,

see 61 FR 64985 (December 10, 1996).

3The term ‘‘non-U.S. exchange’’ refers to a foreign

board of trade which is defined in Commission rule

1.3(ss), 17 CFR § 1.3(ss) as: Any board of trade,

exchange or market located outside the United

States, its territories or possessions, whether

incorporated or unincorporated, where foreign

futures or foreign options transactions are entered

into.

Thus, contracts that are traded on a market that

has been designated as a contract market pursuant

to section 5 of the CEA are not within the scope

of this Order.

4Letter dated March 26, 1996, from Johanne

Dupont, Legal Counsel to the Montreal Exchange,

to Ms. Jane Kang, CFTC Division of Trading and

Markets (‘‘March 26, 1996 Request’’).

accordance with a method approved by the

Manager Standardization Branch, ANM–113,

FAA, Transport Airplane Directorate.

(b) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used if approved by the Manager, Manager,

Standardization Branch, ANM–113, FAA,

Transport Airplane Directorate. Operators

shall submit their requests through an

appropriate FAA Principal Maintenance

Inspector, who may add comments and then

send it to the Manager, Standardization

Branch, ANM–113.

Note 2: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Standardization Branch,

ANM–113.

(c) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the airplane to

a location where the requirements of this AD

can be accomplished.

(d) The actions shall be done in accordance

with Dornier Service Bulletin SB–328–53–

051, dated August 16, 1994. This

incorporation by reference was approved by

the Director of the Federal Register in

accordance with 5 U.S.C. 552(a) and 1 CFR

part 51. Copies may be obtained from Dornier

Luftfahrt GmbH, P.O. Box 1103, D–82230

Wessling, Germany. Copies may be inspected

at the FAA, Transport Airplane Directorate,

1601 Lind Avenue, SW., Renton,

Washington; or at the Office of the Federal

Register, 800 North Capitol Street, NW., suite

700, Washington, DC.

(e) This amendment becomes effective on

April 3, 1997.

Issued in Renton, Washington, on February

20, 1997.

James V. Devany,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 97–4717 Filed 2–26–97; 8:45 am]

BILLING CODE 4910–13–U

COMMODITY FUTURES TRADING

COMMISSION

17 CFR Part 30

Foreign Futures and Option

Transactions

AGENCY: Commodity Futures Trading

Commission.

ACTION: Order.

SUMMARY: The Commodity Futures

Trading Commission (‘‘Commission’’ or

‘‘CFTC’’) is issuing a Supplemental

Order authorizing members of the

Montreal Exchange (‘‘Exchange’’)

designated for relief under Commission

rule 30.10 (‘‘Exchange Member’’ or

‘‘Member’’) to solicit and accept orders

from U.S. customers for otherwise

permitted transactions 1 on all non-U.S.

exchanges where such Members are

authorized by the regulations of the

Montreal Exchange to conduct futures

business for customers.

This Supplemental Order is issued

pursuant to Commission rule 30.10,

which permits the Commission to grant

an exemption from certain provisions of

Part 30 of the Commission’s regulations,

and the Commission’s Order dated

March 14, 1989, granting relief under

rule 30.10 to designated members of the

Montreal Exchange.

EFFECTIVE DATE: February 27, 1997.

FOR FURTHER INFORMATION CONTACT: Jane

C. Kang, Esq., or Robert H. Rosenfeld,

Esq., Division of Trading and Markets,

Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street, N.W., Washington,

D.C. 20581. Telephone: (202) 418–5430.

SUPPLEMENTARY INFORMATION: The

Commission has issued the following

Supplemental Order:

Supplemental Order Permitting

Members of the Montreal Exchange

Designated for Relief Under Commission

Rule 30.10 to Solicit and to Accept

Orders from U.S. Customers for

Otherwise Permitted Transactions on

All Non-U.S. Exchanges Where Such

Members Are Authorized by Exchange

Regulations to Conduct Futures

Business for Customers

On March 14, 1989, the Commission

issued an Order granting relief under

rule 30.10 to designated members of the

Montreal Exchange, 54 FR 11179 (March

17, 1988) (‘‘Original Order’’). The

Original Order limited the scope of

permissible brokerage activities

undertaken by designated Montreal

Exchange members on behalf of U.S.

customers to transactions ‘‘on or subject

to the rules of the Exchange.’’ 54 FR at

11811 (condition (1)(c)). Subsequently,

however, the Commission has issued

rule 30.10 orders which did not include

this limitation.2

By letter dated March 26, 1996, the

Montreal Exchange petitioned the

Commission to revise the Original Order

to permit designated members of the

Montreal Exchange to solicit or accept

orders from U.S. foreign futures and

options customers for all otherwise

permitted transactions on all non-U.S.

exchanges 3 where Exchange Members

are authorized by Exchange regulations

to conduct futures and options business

for customers, subject to the Montreal

Exchange’s and Members’ continued

compliance with the terms of the

Original Order and such other

conditions as may be imposed by the

Commission.4 The Exchange further

represented that it would carry out its

compliance, surveillance, and rule

enforcement activities with respect to

solicitations and acceptances of orders

by designated Montreal Exchange

members of U.S. customers for

otherwise permitted transactions on all

non-U.S. markets where such Members

are authorized by Exchange regulations

to conduct futures and options business

for U.S. customers.

Upon due consideration and for the

reasons stated in the Original Order, the

Commission has determined to issue

this Supplemental Order permitting

Montreal Exchange members designated

for rule 30.10 relief to solicit and to

accept orders from U.S. foreign futures

and options customers for otherwise

permitted transactions in commodity

futures and commodity options

(including options on futures) on or

subject to the rules of any exchange

where such Montreal Exchange

Members are authorized by Exchange

regulations to conduct options and

futures business for customers, other

than a contract market designated as

such pursuant to section 5 of the CEA,
8876 Federal Register / Vol. 62, No. 39 / Thursday, February 27, 1997 / Rules and Regulations

5Montreal Exchange member firms which

currently operate under the Original Order will be

deemed to have consented to condition (3) by

effecting transactions pursuant to this

Supplemental Order. Exchange members which

apply for confirmation of rule 30.10 relief

subsequent to the issuance of this Supplementary

Order must submit representations to the

Commission consistent with condition (3) of this

Order.

6See paragraph (2)(f) of the Original Order.

7See CFTC Advisory No. 87–4, Foreign Futures

and Options: Compliance and Operational

Questions and Answers, November 18, 1987,

reprinted in Comm. Fut. L. Rep. (CCH) ¶ 23,975.

8This proviso is intended to ensure that the

originating Member makes reasonable inquiries and

understands prior to the initiation of a trade the

conditions under which its customers’ funds will be

held at all subsequent depositories, so that it may

determine whether it may count a particular

intermediary or clearing house as a good separate

account depository for purposes of this Order or

must alternatively set aside funds in the manner set

forth in paragraph (6)2. The Member initially would

discuss with its immediate intermediary broker

whether funds will be transferred to any subsequent

depositories and determine the conditions under

which such funds would be treated. Compliance

with this condition would be satisfied by the

Member obtaining relevant information or

assurances from appropriate sources such as, for

example, the immediate intermediary broker,

exchanges or clearinghouses, exchange regulators,

banks, attorneys or regulatory references.

This requirement is intended to ensure that funds

provided by U.S. customers for foreign futures and

options transactions, whether held at a U.S. FCM

under rule 30.7(c) or a firm exempted from

registration as an FCM under CFTC rule 30.10, will

receive equivalent protection at all intermediaries

and exchange clearing organizations. Thus, for

example, an exchange that does not segregate

customer from firm obligations and firms which

trade on such exchanges and which do not arrange

to comply otherwise with any of the procedures

described in paragraph (6) would not be deemed an

acceptable separate account. Specifically, such

exchange or firms could not provide a valid and

binding acknowledgement to a rule 30.10 exempted

firm.

This provision is not intended to create a duty on

a rule 30.10 firm that it audit any intermediaries for

continued compliance with the undertakings it has

obtained based on discussions with those relevant

intermediaries. It is intended to make clear that

firms must engage in a due diligence inquiry before

customer funds are sent to another intermediary

and take appropriate action (i.e., set aside funds) in

undertaken by such Members from a

location in Quebec.

The expanded rule 30.10 relief

provided under this Supplemental

Order, however, is contingent on the

Montreal Exchange’s and Exchange

Members’ continued compliance with

the Original Order and their compliance

with the following conditions:

(1) The Montreal Exchange will carry out

its compliance, surveillance and rule

enforcement activities with respect to

solicitations and acceptance of orders by

designated Exchange Members of U.S.

customers for options and futures business

on all non-U.S. exchanges listed in Article

7452 of the Exchange rules to the same extent

that it conducts such activities in regard to

Exchange business;

(2) It will cooperate with the Commission

with respect to any inquiries concerning any

activity which is the subject of this

Supplemental Order, including sharing the

information specified in Appendix A to the

Part 30 rules, 17 CFR Part 30, on an ‘‘as

needed’’ basis on the same basis as set forth

in the Original Order;

(3) Each Montreal Exchange Member firm

confirmed for relief under the Original Order

seeking to engage in activities which are the

subject of this Supplemental Order must

agree to provide the books and records

related to such activities required to be

maintained under the applicable Exchange

regulations and laws in effect in Quebec on

the same basis as set forth in the Original

Order.5

Furthermore, the Commission seeks to

ensure that the funds of U.S. foreign

futures and options customers will be

subject to consistent protection

irrespective of whether the Montreal

Exchange Member effects trades directly

on the Montreal Exchange (where under

the terms of the Original Order

Exchange Members are required to

maintain a separate account in a manner

consistent with the provisions of rule

30.7) 6 effects trades on another foreign

futures and options exchange of which

the Montreal Exchange firm is a

member, or trades through the

intermediation of a foreign exchange

member. Accordingly, the expanded

relief permitting Montreal Exchange

Member firms to engage in foreign

futures and options transactions for U.S.

customers other than on the Montreal

Exchange under this Supplemental

Order will be contingent upon

compliance by the Exchange Member

firm with the following additional

conditions:

(4) Foreign futures and options exchanges

on which the Montreal Exchange Member

firm may engage in transactions on behalf of

U.S. customers are those non-U.S. exchanges

identified in Article 7452 of the Exchange

rules, provided however, that Exchange

Members may not engage in any transactions

on behalf of U.S. customers on an exchange

designated as a contract market under section

5 of the CEA;

(5) The Montreal Exchange Member firm

will continue to comply with the terms of the

Original Order with respect to transactions

effected for U.S. customers on the Montreal

Exchange; 7

(6) With respect to transactions effected on

any other non-U.S. futures and options

exchange on behalf of U.S. customers,

whether by the Montreal Exchange Member

directly as a clearing member of such other

exchange or through the intermediation of

one or more intermediaries, the Montreal

Exchange Member complies with paragraphs

(6) 1 or 2 below:

1. a. must maintain in a separate account

or accounts money, securities and property

in an amount at least sufficient to cover or

satisfy all of its current obligations to U.S.

customers denominated as the foreign futures

or foreign options secured amount;

b. may not commingle such money,

securities and property with the money,

securities or property of the Member, with

any proprietary account of such Member and

may not use such money, securities and

property to secure or guarantee the

obligations of, or extend credit to, the

Member or any proprietary account of the

Member;

c. may deposit together with the secured

amount required to be on deposit in the

separate account or accounts referred to in

paragraph (6)1. a. above, money, securities or

property held for or on behalf of non-U.S.

customers of the Member for the purpose of

entering into foreign futures and options

transactions. In such a case, the amount that

must be deposited in such separate account

or accounts must be no less than the greater

of (1) the foreign futures and foreign options

secured amount required by paragraph (6)1.

a. above, plus the amount that would be

required to be on deposit if all such

customers (including non-U.S. customers)

were subject to such requirement, or (2) the

foreign futures and foreign options secured

amount required by paragraph (6)1. a. above,

plus the amount required to be held in a

separate account or accounts for or on behalf

of such non-U.S. customers pursuant to any

applicable law, rule, regulation or order, or

any rule of any self-regulatory organization;

d. the separate account or accounts referred

to in paragraph (6)1. a. above must be

maintained under an account name that

clearly identifies them as such, with any of

the following depositories:

(1) another person registered with the

Commission as a futures commission

merchant (‘‘FCM’’) or a firm exempted from

FCM registration pursuant to CFTC rule

30.10;

(2) the clearing organization of any foreign

board of trade;

(3) any member and/or clearing member of

such foreign board of trade; or

(4) a bank or trust company which any of

the depositories identified in (1)–(3) above

may use consistent with the applicable laws

and rules of the jurisdiction in which the

depository is located; and

e. the separate account or accounts referred

to in paragraph (6)1. a. may be deemed a

good secured amount depository only if the

Member obtains and retains in its files for the

period required by applicable law and

Exchange regulations a written

acknowledgement from such separate

account depository that:

(1) it was informed that such money,

securities or property are held for or on

behalf of customers of the Member; and

(2) it will ensure that such money,

securities or property will be held and

treated at all times effectively in accordance

with the provisions of this paragraph; and,

provided further, that the Member assures

itself that such separate account depository

will not pass on such money, securities or

property to any other depository unless the

Member has assured itself that all such other

separate account depositories will treat such

funds in a manner consistent with the

procedures described in this paragraph (6)1

herein; 8 or,
Federal Register / Vol. 62, No. 39 / Thursday, February 27, 1997 / Rules and Regulations 8877

the event that it becomes aware of facts leading it

to conclude that customer funds are not being

handled consistent with the requirements of

Commission rules or relevant rule 30.10 order by

any subsequent intermediary or clearing house.

1The Filer Manual originally was adopted on

April 1, 1993, and became effective on April 26,

1993. Release No. 33–6986 (April 1, 1993) (58 FR

18638). The most recent update to the Filer Manual

was adopted in Release No. 33–7351 (October 2,

1996) [61 FR 52283], and became effective on

October 7, 1996.

2See Release Nos. 33–6977 (February 23, 1993)

(58 FR 14628), IC–19284 (February 23, 1993) (58 FR

14848), 35–25746 (February 23, 1993) (58 FR

14999), and 33–6980 (February 23, 1993) (58 FR

15009) for a comprehensive treatment of the rules

adopted by the Commission governing mandated

electronic filing. See also Release No. 33–7122

(December 19, 1994) (59 FR 67752), in which the

Commission made the EDGAR rules final and

applicable to all domestic registrants and adopted

minor amendments to the EDGAR rules; Release

No. 33–7351, in which the Commission adopted the

most recent update to the Filer Manual; and Release

No. 33–7369 (December 5, 1996) (61 FR 65440), in

which the Commission proposed additional minor

technical amendments to the EDGAR rules.

3 17 CFR 274.21 (certificate of accounting of

securities and similar investments in the custody of

management investment companies filed pursuant

to Rule 17f–1).

4 17 CFR 274.220 (certificate of accounting of

securities and similar investments in the custody of

management investment companies filed pursuant

to Rule 7f–2).

5 17 CFR 240.23c–2(b) (notice by closed-end

investment companies of intention to call or redeem

their own securities).

6 17 CFR 274.221 (notification of periodic

repurchase offer).

7 17 CFR 240.23c–3. Submission type ‘‘N–23C3A’’

is to be used for filings made pursuant to Rule 23c–

3(a) only; ‘‘N–23C3B,’’ Rule 23c–3(b) only; and ‘‘N–

23C3C,’’ Rule 23c–3(a) and (b).

8 17 CFR 230.462(b).

9 15 U.S.C. 77a et seq. The new submission types

are: S–4MEF (for use in connection with

registration statements filed on Form S–4 (17 CFR

239.25) and F–4MEF (for use in connection with

registration statements on Form F–4 (17 CFR

Continued

2. must set aside funds constituting the

entire secured amount requirement in a

separate account as set forth in Commission

rule 30.7, 17 C.F.R. § 30.7, and treat those

funds in the manner described by that rule.

The expanded rule 30.10 relief

provided by this Supplemental Order

also is contingent upon the Montreal

Exchange’s and Montreal Exchange

Members’ continued compliance with

the Original Order and the enumerated

conditions above.

This Supplemental Order is issued

based on the information provided to

the Commission as set forth herein,

including the letter dated March 26,

1996, from the Montreal Exchange. Any

changes or material omissions may

require the Commission to reconsider

the authorization granted in this

Supplemental Order.

Further, if experience demonstrates

that the continued effectiveness of this

Order in general, or with respect to a

particular Member, would be contrary to

public policy or the public interest, or

that the systems in place for the

exchange of information or other

circumstances do not warrant

continuation of the exemptive relief

granted herein, the Commission may

condition, modify, suspend, terminate,

withhold as to a specific Member, or

otherwise restrict the exemptive relief

granted in this Order, as appropriate, on

its own motion. If necessary, provisions

will be made for servicing existing

client positions.

List of Subjects in 17 CFR Part 30

Commodity futures, Commodity

options, Foreign futures.

Accordingly, 17 CFR Part 30 is

amended as set forth below:

PART 30—FOREIGN FUTURES AND

FOREIGN OPTIONS TRANSACTIONS

1. The authority citation for Part 30

continues to read as follows:

Authority: 7 U.S.C. 1a, 2, 4, 6, 6c and 12a,

unless otherwise noted.

2. Appendix C to Part 30 is amended

by adding the following citation under

the existing entry for Firms designated

by the Montreal Exchange to read as

follows:

Appendix C to Part 30–Foreign

Petitioners Granted Relief From the

Application of Certain of the Part 30

Rules Pursuant to § 30.10

* * * * *

Firms designated by the Montreal

Exchange.

* * * * *

FR date and citation: February 27,

1997, 62 FR.

* * * * *

Issued in Washington, D.C. on February 21,

1997.

Jean Webb,

Secretary of the Commission.

[FR Doc. 97–4865 Filed 2–26–97; 8:45 am]

BILLING CODE 6351–01–P

SECURITIES AND EXCHANGE

COMMISSION

17 CFR Part 232

[Release Nos. 33–7394; 34–38319; 35–

26672; 39–2346; IC–22522]

RIN 3235–AG96

Adoption of Updated EDGAR Filer

Manual

AGENCY: Securities and Exchange

Commission.

ACTION: Final rules.

SUMMARY: The Commission is adopting

an updated edition of the EDGAR Filer

Manual and is providing for its

incorporation by reference into the Code

of Federal Regulations.

EFFECTIVE DATE: The amendment to 17

CFR Part 232 (Regulation S–T) will be

effective on March 10, 1997. The new

edition of the EDGAR Filer Manual

(Release 5.20) will be effective on March

10, 1997. The incorporation by reference

of the EDGAR Filer Manual is approved

by the Director of the Federal Register

as of March 10, 1997.

FOR FURTHER INFORMATION CONTACT: In

the Office of Information Technology,

David T. Copenhafer at (202) 942–8800;

for questions concerning investment

company filings, Ruth Armfield

Sanders, Senior Counsel, Division of

Investment Management, at (202) 942–

0591; and for questions with respect to

documents subject to review by the

Division of Corporation Finance,

Margaret R. Black at (202) 942–2940.

SUPPLEMENTARY INFORMATION: The

Commission today announces the

adoption of an updated EDGAR Filer

Manual (‘‘Filer Manual’’), which sets

forth the technical formatting

requirements governing the preparation

and submission of electronic filings

through the Electronic Data Gathering,

Analysis, and Retrieval (‘‘EDGAR’’)

system.1 Compliance with the

provisions of the Filer Manual is

required in order to assure the timely

acceptance and processing of filings

made in electronic format. Filers should

consult the Filer Manual in conjunction

with the Commission’s rules governing

mandated electronic filing when

preparing documents for electronic

submission.2

In this update, several submission

types have been added to accommodate

electronic submission of certain

investment company filings.

Specifically, new EDGAR submission

types ‘‘40–17F1’’ and ‘‘40–17F2’’ have

been added to accommodate the filing of

Forms N–17F–1 3 and N–17F–2; 4

submission type ‘‘N–23C–2,’’ to

accommodate filings under Rule 23c–

2(b); 5 and submission types ‘‘N–

23C3A,’’ ‘‘N–23C3B,’’ and ‘‘N–23C3C,’’

to accommodate the filing of Form N–

23C–3,6 pursuant to Rule 23c–3.7

With respect to documents subject to

review by the Division of Corporation

Finance, two additional submission

types have been added to accommodate

more completely the electronic

submission of filings made pursuant to

Rule 462(b) 8 under the Securities Act of

1933.9