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[Federal Register: June 22, 2001 (Volume 66, Number 121)]
[Notices]
[Page 33531-33532]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22jn01-34]

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COMMODITY FUTURES TRADING COMMISSION


Study of the Commodity Exchange Act and Rules Thereunder

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of solicitation of comments.

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SUMMARY: The Commodity Futures Trading Commission (Commission) is
soliciting comments to assist it in conducting a study of the Commodity
Exchange Act (Act) and the Commission's rules and orders governing the
conduct of registrants under the Act, as mandated by Section 125 of the
Commodity Futures Modernization Act of 2000 (CFMA). That provision
requires that the Commission, in conducting the study, solicit the
views of the public, Commission registrants, registered entities and
registered futures associations, and that an analysis of

[[Page 33532]]

comments received be included in the report of the results of the study
to the Commission's Congressional oversight committees.

DATES: Comments must be received by August 21, 2001.

ADDRESSES: Comments may be sent to Jean A. Webb, Secretary of the
Commission, Commodity Futures Trading Commission, Three Lafayette
Centre, 1155 21st Street, NW., Washington, DC 20581. In addition,
comments may be sent by facsimile transmission to (202) 418-5521, or by
electronic mail to [email protected]. Reference should be made to
'Intermediaries Study.'

FOR FURTHER INFORMATION CONTACT: Lawrence B. Patent, Associate Chief
Counsel, or Barbara S. Gold, Assistant Chief Counsel, Division of
Trading and Markets, Commodity Futures Trading Commission, Three
Layfayette Centre, 1155 21st Street NW., Washington, DC 20581. Mr.
Patent may be reached by telephone at (202) 418-5439 or by electronic
mail at [email protected] and Ms. Gold may be reached by telephone at
(202) 418-5450 or by electronic mail at [email protected].

SUPPLEMENTARY INFORMATION: The CFMA, enacted last December as part of
the Consolidated Appropriations Act, 2001 (Public Law No. 106-554, 114
Stat. 2763), requires the Commission to conduct a study of the Act and
the Commission's rules and orders governing the conduct of persons
required to register under the Act.\1\ The study must address: (1) The
core principles and interpretations of acceptable business practices
that the Commission has adopted or intends to adopt to replace
provisions of the Act and rules thereunder, and the extent to which
these changes have been or may be made pursuant to the Commission's
exemptive authority under Section 4(c) of the Act; (2) the rules that
the Commission has determined must be retained and the reasons
therefor; and (3) the regulatory functions that the Commission performs
that can be delegated to a registered futures association and the
regulatory functions that the Commission has determined must be
retained and the reasons therefor. In conducting the study, the
Commission must solicit the views of the public as well as Commission
registrants, registered entitles,\2\ and registered futures
associations. The study must be completed by December 21, 2001 (which
is one year from the date of enactment of the CFMA) and a report of the
results of the study, including an analysis of comments received, must
be transmitted to the Commission's Congressional oversight committees,
the Committee on Agriculture of the House of Representatives and the
Committee on Agriculture, Nutrition and Forestry of the Senate. The
Commission is publishing this notice of solicitation of comments to
assist it in conducting the study.
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    \1\ Section 125 of the CFMA. Persons required to register under
the Act include futures commission merchants, introducing brokers,
commodity pool operators (CPOs), commodity trading advisors (CTAs),
associated persons of any of the foregoing, floor brokers and floor
traders. Those terms are defined in Section 1a(20), 1a(23), 1a(5),
1a(6), 4k, 1a(16) and 1a(17), respectively, of the Act, as amended
by the CFMA.
    \2\ The definition of term 'registered entities' was added to
the Act by the CFMA as new Section 1a(29) and includes designated
contract markets, registered derivatives transaction execution
facilities, and registered derivatives clearing organizations.
Designated contracts markets may include registered national
securities exchanges, registered national securities associations,
and alternative trading systems whose only futures-related activity
involves security futures product. See Section 252(a) of the CFMA,
adding a new Section 5f to the Act.
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    Persons wishing to comment should organize their comments as
follows: (1) Identify by section number, rule number, or Federal
Register citation the particular provision of the Act, the Commission's
rules, or the Commission's orders, respectively, upon which comment is
being provided; (2) indicate whether that provision should be (a)
amended, (b) revoked without replacement, (c) revoked and replaced with
a core principle and statement of acceptable business practices, or (d)
retained; (3) include the proposed text of any suggested amendment or
core principle and statement of acceptable business practices; (4)
include a brief discussion in support of the suggested action and
describe any problems encountered in complying with the existing
relevant statutory and regulatory framework; (5) indicate, if
applicable, whether the suggested change may be made pursuant to the
Commission's exemptive authority in Section 4(c) of the Act; and (6)
identify any regulatory functions that the Commission performs that can
be delegated to a registered futures association and include a brief
discussion to support such a delegation.
    Because of the potential for conflicting comments, it would aid the
Commission's analysis if commenters also indicated the relative
importance of proposed changes. This can be done by ranking them in
priority order or, at least, by categorizing them in some fashion,
e.g., high priority, medium priority, and low priority.
    Commenters should be aware that the Commission intends, as it has
stated previously, to repropose and readopt those provisions of the New
Regulatory Framework relating to intermediaries that were adopted and
then withdrawn last year that are not affected by the CFMA, with any
necessary technical, conforming changes. These new rules and rule
amendments address, among other things, the definition of the term
'principal,' the addition of a principal, certified financial
reports, ethics training, disclosure, account opening procedures,
trading standards, reporting requirements, and offsetting positions.\3\
Commenters should also be aware that the Commission has already
delegated to a registered futures association certain functions
concerning registration processing and statutory disqualification,
financial monitoring and auditing, review of sales practices, review of
CPO and CTA Disclosure Documents, and matters related to foreign
futures and options.
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    \3\ 66 FR 14262, 14267-68 (March 9, 2001); see also 65 FR 77993
(Dec. 13, 2000).
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    Commenters are reminded that all comments will be available for
public inspection and copying and will be posted on the Commission's
website, http://www.cftc.gov. The Commission also
requests that any commenter that is a Commission registrant identify itself as such
and include its registration category. Following a review of comments received, the
Commission or its staff may conduct follow-up discussions with interested parties.

    Issued by the Commission in Washington, DC on June 13, 2001.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 01-15435 Filed 6-21-01; 8:45 am]
BILLING CODE 6351-01-M
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