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[Federal Register: August 4, 2000 (Volume 65, Number 151)]
[Rules and Regulations]
[Page 47843-47847]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04au00-8]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 1

RIN 3038-AB35


Final Rules Concerning Amendments to Insider Trading Regulation

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rulemaking.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'')
hereby amends Commission Regulation 1.59, which addresses various
trading prohibitions imposed on persons associated with a self-
regulatory organization (``SRO''). Regulation 1.59 requires SROs to
adopt rules prohibiting employees, governing board members, and
committee members from certain trading activities and from improperly
disclosing any material, non-public

[[Page 47844]]

information obtained in the course of their official duties. The
Commission is now amending Regulation 1.59 so that governing board
members and committee members, and individuals serving as the
``functional equivalent'' of such members, are clearly excluded from
the definition of ``employee'' for purposes of Regulation 1.59. The
Commission also takes this opportunity to clarify the meaning of
Regulation 1.59(b)(1)(i) regarding the scope of the SRO employee
trading prohibition, and to make clear that ``non-paid advisors'' to
exchange governing boards and committees will be deemed the
``functional equivalent'' of whomever they are advising. Finally, the
Commission has determined to amend Regulation 1.59 so that consultants
to SROs are, at minimum, subject to the same restrictions as governing
board members.

EFFECTIVE DATE: December 4, 2000.

FOR FURTHER INFORMATION CONTACT: Joshua R. Marlow, Attorney-Advisor,
Division of Trading and Markets, Commodity Futures Trading Commission,
Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581.
Telephone: (202) 418-5490.

SUPPLEMENTARY INFORMATION:

I. Introduction

    On December 28, 1999, the Commission published proposed amendments
to Regulation 1.59 (``proposing release''),\1\ which generally requires
SROs to adopt rules prohibiting employees, governing board members, and
committee members from trading commodity interests on the basis of
material, non-public information obtained in the course of their
official duties (hereinafter referred to as ``material, non-public
information''). As proposed, the amendments would exclude governing
board members, and any ``functional equivalent'' thereof, from the
definition of ``employee,'' and would clarify the scope of the SRO
employee trading prohibition. The Commission also sought comment on how
Regulation 1.59 should treat consultants to SRO management and staff,
in addition to non-paid advisors to SRO governing boards and
committees. The Commission received 6 comment letters in response to
the proposed amendments.\2\
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    \1\ See 64 FR 72587 (Dec. 28, 1999).
    \2\ Letters were received from (1) New York Mercantile Exchange,
(2) National Futures Association (``NFA''), (3) Minneapolis Grain
Exchange, (4) Chicago Mercantile Exchange (``CME''), (5) Chicago
Board of Trade (``CBT''), and (6) Board of Trade Clearing
Corporation (``BOTCC'').
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II. Rule Amendments

A. Background

    Historically, two categories of individuals have been subject to
Commission Regulation 1.59: (1) SRO employees, including those employed
by the SRO on a salaried or contract basis, and (2) SRO governing board
and committee members. Regulation 1.59 prohibits these groups from
trading under various circumstances.
    Specifically, employees are absolutely prohibited from trading in
any commodity interest traded on or cleared by their employing contract
market or clearing organization, or from trading in any ``related
commodity interest,'' as that term is defined by Regulation 1.59(a).\3\
Additionally, employees with access to material, non-public information
concerning a particular commodity interest are prohibited from trading
in such commodity interest if it is traded on or cleared by contract
markets or clearing organizations other than their employing SRO, or
traded on or cleared by a linked exchange.
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    \3\ ``Related commodity interest means any commodity interest
which is traded on or subject to the rules of a contract market,
linked exchange, or other board of trade, exchange or market, other
than the self-regulatory organization by which a person is employed,
and with respect to which:
    (i) Such employing self-regulatory organization has recognized
or established intermarket spread margins or other special margin
treatment between that other commodity interest and a commodity
interest which is traded on or subject to the rules of the employing
self-regulatory organization; or
    (ii) Such other self-regulatory organization has recognized or
established intermarket spread margins or other special margin
treatment with another commodity interest as to which the person has
access to material, nonpublic information.''
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    Governing board members and committee members, on the other hand,
are prohibited only from using material, non-public information for any
purpose other than the performance of their official duties. The
possession of material, non-public information, therefore, does not
absolutely bar these individuals from trading commodity interests.
Rather, under Regulation 1.59(d), governing board and committee members
are prohibited from trading for their own account, or for or on behalf
of any other account, based on this material, non-public information.

B. Governing Board Members

    The Commission proposed to exclude salaried governing board members
from the definition of ``employee'' under Regulation 1.59(a) in order
to ensure that salaried governing board members are not subject to two
inconsistent trading restrictions--one for governing board members and
another, more restrictive, prohibition for employees. At the time these
clauses were adopted, members of governing boards generally were not
salaried. Because the industry now typically gives stipends to
governing board members, the Commission proposed to remove any
confusion by excepting salaried governing board members from the
definition of ``employee.''
    The Commission believes that inclusion of salaried governing board
members in the definition of ``employee'' might create disincentives
for competent individuals to serve in this capacity. If excluded from
the definition of ``employee,'' governing board members would remain
prohibited from using material, non-public information for purposes
other than performance of their official duties, pursuant to Regulation
1.59(c). All but one commenter supported this amendment,\4\ and the
Commission has determined to adopt the proposal.
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    \4\ BOTCC did not express an opinion on this issue.
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C. Individuals Serving as the ``Functional Equivalent'' of Governing
Board Members

    The Commission proposed to add a clause defining the term
``governing board member'' to include certain individuals who work
closely with, but who are not technically members of, the governing
board, like ex officio or emeritus governing board members. The
proposed language would deem such individuals to be the ``functional
equivalent'' of governing board members. Because of their experience,
these members can provide valuable guidance to the governing board.
However, including them in the definition of ``employee'' would subject
them to broad restrictions on trading, potentially creating a
disincentive to counsel the board on matters within their expertise.
    Four commenters supported the proposal, and another expressed its
support while noting that its board presently does not have any such
individuals participating.\5\ The Commission has determined to adopt
the proposal.
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    \5\ See CBT comment letter, January 31, 2000. BOTCC did not
comment on this issue.
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D. Employees With Access to Material, Non-Public Information Concerning
Commodity Interests Traded on or Cleared by Other SROs

    Regulation 1.59(b)(1)(i) requires SROs to maintain in effect rules
which, at a minimum, prohibit employees from trading in the following
four scenarios:

    In any commodity interest traded on or cleared by the employing
contract market or

[[Page 47845]]

clearing organization, in any related commodity interest, in any
commodity interest traded on or cleared by contract markets or
clearing organizations other than the employing self-regulatory
organization, and in any commodity interest traded on or cleared by
a linked exchange where the employee has access to material
nonpublic information concerning such commodity interest;

Regulation 1.59(b)(1)(i) (emphasis added).

    As discussed in the proposing release, the Commission believes the
existing structure of this paragraph may create confusion as to which
trading prohibitions the italicized clause modifies. In particular,
because no punctuation precedes the clause ``where the employee has
access to material nonpublic information concerning such commodity
interest'' (hereinafter referred to as the ``access clause''), this
precondition for the application of the trading restriction would
appear to apply to only one trading scenario--the trading scenario that
immediately precedes it. However, an examination of this provision as
it existed prior to the 1993 amendments to Regulation 1.59 (``1993
Amendments''), and of the Federal Register releases promulgating the
1993 Amendments,\6\ confirms that the access clause should also apply
to the prohibition on trading ``in any commodity interest traded on or
cleared by contract markets or clearing organizations other than the
employing self-regulatory organization.''
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    \6\ See 58 FR 44470 (Aug. 23, 1993); 58 FR 54966 (Oct. 25,
1993).
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    The Commission has decided to amend Regulation 1.59(b)(1)(i) by
subdividing each prohibition into a separate subparagraph, as proposed.
This amendment to paragraph (b)(1)(i) will help differentiate between
situations in which employees of SROs are absolutely prohibited from
trading commodity interests from those in which they are prohibited
from trading only if they have access to material, non-public
information.
    Toward that end, the Commission has also determined to edit the
language of the third clause of the paragraph. In the proposing
release, the Commission suggested adding the access clause back to the
third prohibition, so that it would read as it was originally intended.
No commenters disagreed with this proposal. However, it also has come
to the attention of the Commission that merely inserting the access
clause at the end of the third prohibition, without further editing,
might still result in an unclear articulation of the nature of the
prohibited conduct. The clause, as proposed, would have read:

    From trading, directly or indirectly, in any commodity interest
traded on or cleared by contract markets or clearing organizations
other than the employing self-regulatory organization where the
employee has access to material, nonpublic information concerning
such commodity interest; and

64 FR 72587, 72590 (Dec. 28, 1999).
    Regulatory history clearly indicates that this clause was only
meant to prohibit an SRO employee from trading a commodity interest on
another, non-linked exchange if he or she has access to material, non-
public information about that particular commodity interest. The
Federal Register release promulgating Regulation 1.59 states
unequivocally that exchanges may permit their employees to trade
``unrelated'' commodity interests on other exchanges, if they do not
have access to material, non-public information.\7\ The original rule
proposal included an outright ban on employee trading at other
exchanges,\8\ but the Commission ultimately adopted less restrictive
rules after receiving comments from the industry.\9\
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    \7\ The word ``unrelated'' refers to ``related commodity
interest,'' as defined by Regulation 1.59(a). See note 3, supra.
    \8\ See 50 FR 24533 (June 11, 1985).
    \9\ See 51 FR 44866, 44867 (Dec. 12, 1986). ``Commenters
contended that * * * the provision need not bar employees from
trading on other contract markets in commodity interests unrelated
to the employing exchange's products merely because the employee was
in a position to receive information that is material to activity on
the employing contract market.'' In response, the Commission wrote:
``although remaining subject to the strict ban on trading on the
employing exchange, if the exchange permits, an employee now would
be able to trade an unrelated commodity interest on another exchange
where he did not have access to material non-public information
concerning such commodity interest. The Commission emphasizes that
the two limiting factors with respect to trading by an employee on
another exchange are: (1) That the commodity interest by [sic]
unrelated to any commodity interest traded on the employing
exchange, and (2) that the employee not have access to material,
non-public information concerning the commodity interest or a
related commodity interest.''
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    On its face, however, the third clause could be misconstrued to
mean that employees are prohibited from trading all commodity interests
on a non-employing exchange, even if they only have access to material,
non-public information concerning a single commodity interest traded on
that exchange. This potential confusion arises out of the meaning of
the word ``any,'' which connotes a slightly different meaning in the
two preceding clauses. A reader applying the meaning of ``any''
consistently throughout the paragraph, as it is used in the first two
clauses, might be led to believe that the prohibition extends to all
contracts at another exchange. The Commission has therefore determined
to edit the language of this third prohibition to read as follows:

    From trading, directly or indirectly, in a commodity interest
traded on or cleared by contract markets or clearing organizations
other than the employing self-regulatory organization if the
employee has access to material, non-public information concerning
such commodity interest; \10\
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    \10\ As a result of these changes to the third prohibition, the
Commission also made non-substantive changes to the language of the
fourth prohibition--i.e., new Regulation 1.59(b)(1)(i)(D)--for
purposes of consistency.
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E. Clarification of the Treatment of ``Consultants''

    The Commission requested comment on whether ``consultants'' should
be included in the definition of ``employee'' for purposes of
Regulation 1.59, based upon its understanding that exchanges hire
consultants for a variety of purposes,\11\ often with respect to
information technology issues. These consultants may or may not gain
access to material, non-public information during the course of their
duties, depending on the nature of the work they are performing.
Although the current provisions do not explicitly include consultants
within the definition of ``employee,'' the original promulgation of
Regulation 1.59 in 1986 indicated the Commission's intention that
consultants be included.\12\ Furthermore, the definition of
``employee'' under Regulation 1.59(a) clearly states: ``Employee means
any person hired or otherwise employed on a salaried or contract basis
by a self-regulatory organization.'' (emphasis added) Although this
language appears to indicate that consultants fall into the definition
of ``employee'' under Regulation 1.59, it has recently come to the
attention of the Commission that some exchanges retain consultants that
they do not consider ``employees.'' \13\
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    \11\ Barron's Business Guides define a consultant as an
``individual or organization providing professional advice to an
organization for a fee. A wide variety of consultants exist for many
areas of organizational concerns, including management, accounting,
finance, and legal and technical matters. A consultant is an
INDEPENDENT CONTRACTOR.'' Barron's Dictionary of Business Terms 120
(2d ed. 1994) (emphasis in original).
    \12\ 51 FR 44866, 44867 at note 6 (Dec. 12, 1986). ``It should
be noted that consultants and independent contractors employed by
the self-regulatory organization would be included within the
definition of `employee' under regulation 1.59 and, therefore, would
be subject to the same restrictions applicable to all other exchange
employees.''
    \13\ See, e.g., BOTCC comment letter, February 10, 2000. ``The
Clearing Corporation is further concerned by the characterization of
such persons as `employees', albeit for limited purposes. The
Clearing Corporation, in its written agreements with consultants,
takes great care to ensure that such persons may not be deemed to be
`employees' for any purposes. We believe that the Commission's
characterization of consultants as `employees' under Regulation 1.59
undermines this effort.''

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[[Page 47846]]

    The Commission received a wide variety of comments with respect to
this issue. Three commenters supported the idea of holding consultants
to the same standard as governing board members, i.e., they shall not
use or disclose material, non-public information for any purpose other
than the performance of official duties. NFA added that such a standard
should apply only if the consultants ``are truly independent
contractors and are not under the SRO's control.'' \14\ Another
commenter, BOTCC, stated that most of its consultants do not obtain
access to material, non-public information, that it does not believe
any ``purpose is served by requiring such persons to adhere to the
complex policies that apply to its regular employees,'' and that it
instead requires its consultants with access to material, non-public
information to sign confidentiality agreements prohibiting personal use
of such information.\15\ CME and CBT expressed some support for
classifying certain consultants as employees, or the ``functional
equivalent'' thereof, depending on the nature and duration of their
relationship with the SRO.\16\ CME asserted, however, that consultants
not subject to an employee-type trading restriction should sign an
agreement not to use or disclose any material, non-public information
obtained from its relationship with the SRO. CBT represented that it
has no effective means of policing these consultants' trading
activities.
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    \14\ See NFA comment letter, January 25, 2000.
    \15\ See BOTCC comment letter, February 10, 2000.
    \16\ See CME comment letter, January 26, 2000; CBT comment
letter, January 27, 2000.
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    Based upon comments received, the Commission has determined that
consultants should, at minimum, be held to the same standard as
governing board members. This prohibition, more narrow than one which
would absolutely ban trading in any commodity interest on the
contracting SRO, is based in large part on commenters' representations
that most consultants do not gain access to material, non-public
information during the course of their work. Moreover, the Commission
acknowledges that the relationship between SROs and their consultants
is generally more attenuated than their relationship with employees
and, as a result, policing the trading activity of consultants could be
difficult for an SRO. Accordingly, the Commission has determined to
apply a less restrictive trading prohibition that will still establish
appropriate safeguards against the misuse of material, non-public
information.
    The Commission believes that, in the first instance, it is the
SRO's responsibility to distinguish between its ``employees'' and
``consultants.'' Such determinations should be made consistent with the
purposes of Regulation 1.59, and should also take into account how the
SRO distinguishes between employees and consultants for other business
purposes.\17\ The Commission will review that process in an oversight
role, as appropriate.
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    \17\ To the extent an SRO outsources a significant function
which affords access to material, non-public information, the
persons with such access should be treated as SRO employees, to the
extent practicable. The Commission intends to address this issue on
a case-by-case basis and, in the future, will consider whether other
action is indicated.
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    The Commission reminds SROs that it remains their duty to enforce
their own rules. In that connection, the Commission suggests that one
way SROs can ensure consultants do not abuse their access to material,
non-public information is to require consultants to sign
confidentiality agreements prohibiting use or disclosure of material,
non-public information gained as a result of the relationship. As
previously noted, this is the practice of BOTCC, which was supported by
CME in its comment letter. Finally, the Commission notes that those
exchanges desiring greater restrictions on personal trading by
consultants remain free to enforce stricter procedures.

F. Use of Non-Paid Advisors by Governing Boards and Committees

    The Commission also sought comment on the application of Regulation
1.59 to non-paid advisors of SRO governing boards and committees, and
requested information about the extent to which these advisors are
utilized and their level of participation in deliberations. Such
individuals have not been subject to Regulation 1.59 requirements. All
commenters were generally in agreement that non-paid advisors to
governing boards and committees should not be held to a standard more
strict than the one applicable to governing board members or committee
members, and several noted that they do not use such advisors. The
Commission agrees and has determined that these individuals are the
``functional equivalent'' of governing board members or committee
members.

G. Committee Members and the ``Functional Equivalent'' Thereof

    In association with its comments regarding the exclusion of
governing board members from the definition of ``employee,'' CBT noted
that it also routinely pays a small fee to non-member panelists of
disciplinary committees and arbitration panels and asked that the
Commission also consider excepting ``committee members who are
compensated by a self-regulatory organization solely for committee
activities.'' \18\ The Commission has considered this idea and agrees
that it should be incorporated into final amendments.\19\ These
individuals often provide valuable advice and counsel, and the
Commission would like to ensure that the potential disincentive for
members to serve in this capacity is removed.
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    \18\ See CBT comment letter, January 27, 2000.
    \19\ This change to the final amendments requires adding to
Regulation 1.59(a) both a definition of ``committee member'' and a
specific exception to the definition of ``employee,'' for reasons
consistent with those in sections II.B., II.C., and II.F., supra.
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III. Conclusion

    The Commission believes that these amendments to Regulation 1.59
clarify existing ambiguities and appropriately adapt to business
practices and changes in the industry since the regulation was last
amended. This action is taken pursuant to the Commission's authority
under Sections 5(7), 8a(5) and 9(f) of the Commodity Exchange Act
(``Act''). Amendments to Commission Regulation 1.59 will not become
effective until 120 days after the date of publication, to provide SROs
time to adopt and submit to the Commission conforming rules. The
Commission expects SROs to act expeditiously in submitting appropriate
rules.

IV. Related Matters

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA'') requires that agencies, in
promulgating rules, consider the impact of those rules on small
businesses.\20\ The Commission previously has determined that contract
markets are not ``small entities'' for purposes of the RFA and that the
Commission, therefore, need not consider the effect of proposed rules
on contract markets.\21\ Furthermore, the Acting Chairman of the
Commission previously has certified on behalf of the Commission that
comparable rule proposals affecting registered futures associations, if
adopted, would not have a significant

[[Page 47847]]

economic impact on a substantial number of small entities.\22\
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    \20\ 5 U.S.C. 601 et seq. (1994 and Supp. II 1996).
    \21\ See 47 FR 18618, 18619 (Apr. 30, 1982).
    \22\ See 58 FR 13565, 13569 (Mar. 12, 1993).
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    This rulemaking will impact SROs--both contract markets and
registered futures associations--and their employees, governing board
members, committee members, and certain independent contractors. The
Commission previously has determined that the establishment of
Regulation 1.59, as well as subsequent amendments to the regulation,
have not created significant economic impact for affected entities or
persons.\23\
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    \23\ See 47 FR 18618 (Apr. 30, 1982); 50 FR 24533 (June 11,
1985); 51 FR 44866 (Dec. 12, 1986); 52 FR 32568 (Aug. 28, 1987); 52
FR 48974 (Dec. 29, 1987); 58 FR 44470 (Aug. 23, 1993); and 58 FR
54966 (Oct. 25, 1993).
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    The Commission does not believe that these amendments will have a
significant economic impact on SROs or employees, governing board
members, committee members, and independent contractors. The new
amendments merely clarify the existing rule. The obligations and
prohibitions established by the amendments are essentially the same as
those created by SRO rules promulgated pursuant to existing Regulation
1.59.

B. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (``PRA''),\24\ which 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, does not apply to this rule. The
Commission believes the rule does not contain information collection
requirements which require the approval of the Office of Management and
Budget.
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    \24\ 44 U.S.C. 3507(d).
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List of Subjects in 17 CFR Part 1

    Commodity futures, Contract markets, Clearing organizations,
Members of contract markets.

    In consideration of the foregoing, and based on the authority
contained in the Commodity Exchange Act and, in particular, Sections 3,
4b, 5, 5a, 6, 6b, 8, 8a, 9, 17, and 23(b) thereof, 7 U.S.C. 5, 6b, 7,
7a, 8, 13a, 12, 12a, 13, 21 and 26(b), the Commission hereby amends
Title 17, Chapter I, Part 1 of the Code of Federal Regulations as
follows:

PART 1--GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT

    1. The authority citation for Part 1 continues to read as follows:

    Authority: 7 U.S.C. 2, 2a, 4, 4a, 6, 6a, 6b, 6c, 6d, 6e, 6f, 6g,
6h, 6i, 6j, 6k, 6l, 6m, 6n, 6o, 7, 7a, 8, 9, 12, 12a, 12c, 13a, 13a-
1, 16, 19, 21, 23, and 24, unless otherwise stated.


    2. Section 1.59 is amended as follows:
    A. The section title is revised.
    B. Paragraphs (a)(3) through (a)(8) are redesignated as paragraphs
(a)(5) through (a)(10).
    C. Paragraph (a)(2) is redesignated as paragraph (a)(4) and
revised, and new paragraphs (a)(2) and (a)(3) are added.
    D. Paragraph (b) introductory text, paragraph (b)(1), and paragraph
(b)(1)(i) are revised.
    E. Paragraphs (c) and (d) are revised.


Sec. 1.59  Activities of self-regulatory organization employees,
governing board members, committee members, and consultants.

    (a) Definitions. For purposes of this section:
* * * * *
    (2) Governing board member means a member, or functional equivalent
thereof, of the board of governors of a self-regulatory organization.
    (3) Committee member means a member, or functional equivalent
thereof, of any committee of a self-regulatory organization.
    (4) Employee means any person hired or otherwise employed on a
salaried or contract basis by a self-regulatory organization, but does
not include:
    (i) Any governing board member compensated by a self-regulatory
organization solely for governing board activities; or
    (ii) Any committee member compensated by a self-regulatory
organization solely for committee activities; or
    (iii) Any consultant hired by a self-regulatory organization.
* * * * *
    (b) Employees of self-regulatory organizations; Self-regulatory
organization rules. (1) Each self-regulatory organization must maintain
in effect rules which have been submitted to the Commission pursuant to
Section 5a(a)(12)(A) of the Act and Sec. 1.41 (or, pursuant to section
17(j) of the Act in the case of a registered futures association) that,
at a minimum, prohibit:
    (i) Employees of the self-regulatory organization from:
    (A) Trading, directly or indirectly, in any commodity interest
traded on or cleared by the employing contract market or clearing
organization;
    (B) Trading, directly or indirectly, in any related commodity
interest;
    (C) Trading, directly or indirectly, in a commodity interest traded
on or cleared by contract markets or clearing organizations other than
the employing self-regulatory organization if the employee has access
to material, non-public information concerning such commodity interest;
    (D) Trading, directly or indirectly, in a commodity interest traded
on or cleared by a linked exchange if the employee has access to
material, non-public information concerning such commodity interest;
and
* * * * *
    (c) Governing board members, committee members, and consultants;
Self-regulatory organization rules. Each self-regulatory organization
must maintain in effect rules which have been submitted to the
Commission pursuant to Section 5a(a)(12)(A) of the Act and Sec. 1.41
(or, pursuant to Section 17(j) of the Act in the case of a registered
futures association) which provide that no governing board member,
committee member, or consultant shall use or disclose--for any purpose
other than the performance of official duties as a governing board
member, committee member, or consultant--material, non-public
information obtained as a result of the performance of such person's
official duties.
    (d) Prohibited conduct. (1) No employee, governing board member,
committee member, or consultant shall:
    (i) Trade for such person's own account, or for or on behalf of any
other account, in any commodity interest, on the basis of any material,
non-public information obtained through special access related to the
performance of such person's official duties as an employee, governing
board member, committee member, or consultant; or
    (ii) Disclose for any purpose inconsistent with the performance of
such person's official duties as an employee, governing board member,
committee member, or consultant any material, non-public information
obtained through special access related to the performance of such
duties.
    (2) No person shall trade for such person's own account, or for or
on behalf of any other account, in any commodity interest, on the basis
of any material, non-public information that such person knows was
obtained in violation of paragraph (d)(1) of this section from an
employee, governing board member, committee member, or consultant.

    Issued in Washington, DC, on July 27, 2000 by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 00-19443 Filed 8-3-00; 8:45 am]
BILLING CODE 6351-01-P
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