23902 Federal Register I Vol. 55, No. 114 I Wednesday, June 13, 1990 / Rules and Regulations 

PART -'01-{REUOYED] 

The Commission, under its authority, 

aection 18 of the Federal Trade 

Commission Act. as amended (15 U.S.C. 

57a) amends chapter one of title 16 of 

the Code of Federal Regulations by 

removing part 401. 

By direction of the Comminion. 

Doi:Wd s. O.rk. 

Sectrtory .• 

(FR Doc. ~13576 Filed 6-12-90; 8:45am] 

Bll.LING CCXX 17-1-111 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 30 

Foreign Futures •nd Option 

Transactions 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION:. Order. 

SUMMAAY: Pursuant to sections 2(a)[l), 

4[b] and 4c of the Commodity Exchange 

Act ("Act"), 'l U.S.C. 2.. B[b] and 6c 

(1982), and part 30 of the Commission'• 

rules and regulations promulgated 

thereunder, the Commission has entered 

into a Mutual Recognition Memorandum 

of Understanding ("MRM.OU") with the 

French Commission dell OperBiions de 

Bourse ("COB"). This arrangement 

generally will permit all products of one 

jurisdiction to be offered to customers 

located in the other jurisdiction, subject 

to certain conditions specified in the 

MR.\10U intended to ensure adequate 

customer protection and the laws 

applicable to certain equity index and 

debt security products. Further, the 

arrangement will also permit brokers 

licensed in one jurisdiction to sell the 

products of that furisdir::tion to 

customel'l located in the other 

juri1diction. generally by complying 

with the rules of the licensing 

jurisdiction. and with requirements 

agreed to by the Comminion and the 

COB to eliminate regulatory gaps. As a condition of these arTangementa, and to 

reduce duplication and enhance 

cooperation. the MRMOU provides for 

information abaring on a routine and "u 

needed" ba1is in connection with 

monitoring and compliance matten, thus 

improving the Comminion's and COB'a 

ability to addre11 financial or market 

disruptions that could affect their 

marketa. 

£FFt:cnYl DATE: july 13, 1990. 

FOFI FURTHER '""ORMAT10N CONTACT: 

Jane C. Kang, Esq., or Barney L Charlon. 

Esq .. Division of Trading and Markets, 

Commodity Futures Trading 

Commission, 2033 K Street, NW .. Washington. DC 20581. Telephone: (Z02) 

2~955. 

SUPPLEMENTARY INFORMATION: On J!!ly 

23, 1987, the Commodity Futures Trading 

Commission {"Commission") adopted 

fmal rules and regulations pertaining to 

the offer or sale of commodity futures 

and option contract• traded on or 1ubject to the rules of a foreign board of 

trade.l These rules, which became 

effective on February 1,1988. establish a regulatory framework for the affer or 

sale in the United Stales of futures and 

option contracts made or to be made on 

or subject to the rule• of a foreign board 

of trade.• The part 30 rules bring foreign 

future& and option transactions 

undertaken by persons located in the 

United State• within the Commission's 

existing framewark of customer 

protections. These rules effect Congress' 

intent that such transactiona be subject 

to regulatory standards comparable to 

those applicable to domestic transactions~ and implement a concept 

of substituted compliance, such that 

compliance with a generally comparable 

foreign regulation will be considered 

sufficient to warrant exemption from 

what otherwise may be duplicative 

Commission regulation. 

In this regard, the Commission 

adopted rule 30.10 which permits 

persons located outside the United 

Stales who solicit or accept orders 

directly from United States customers 

for foreign futures or option transactions 

and who are aubject to a generally 

comparable regulatory scheme in the 

jurisdiction in which they are located to 

1eek an exemption from the application 

of certain part 30 rules. 4 In effect, as set 

forth in appendix A to the part 30 rules, 

which &eta forth the standard• the 

Commission will consider in aas"essing 

comparability, the Commission will 

accept 1ubstituted compliance by the 

foreign finn with rules and regulations 

in effect in the jurisdiction deemed 

comparable to those in effect ln the 

United States. The elements the 

Commiasion will examine in aueuing 

comparability of regulation include 

registration or other fonn of fitneu 

review, minimum capital requirements, 

proll!ction of customer funds, tales 

practice requirementa, recordkeeplng 

and reporting requirements and 

compliance procedure•. 

Unlike foreign futures, which with two 

exceptioru can be offered or sold to 

customer! re1ident in the United State• 

111 Cl'R put 30[11111!19). 5.2 FR Z8980 [Au.;. 5. 111119). 

I $2 FR 41!11 ~b.r %&, 1W7). 1 Sn S. Rep. No. SM. 87th Cona-. %d Sno. 6-48 

[196.2) ond 51 FR t211M.I:l01 (Apri!L U186). 

·~ Commi .. ion n~le 30.1CI. 17 ~ 30.1.0 (1Q89). 

without prior epproval• foreign option 

contracts ha\'e been banned since 1978.8 

The part 30 rules establish a rnechsnism 

pursu>~.nl to which this ban may be lifted on a market by market and product by 

product basis. Specifically, under 

Commission rule 30.3(a},1 the 

Commission may lift the foreign option 

ban by the issuance of an authoti7.ation 

order. ln assessing w'bether to grant a 

foreign option petition, the Commission 

bas reviewed. among other things: The 

arrangements in place for detening 

~ales practice abuses, the ability of 

United State& customel'l to redress 

grievances with respect to the offer or 

aale of such option products and the 

regulatory environment in which the 

products are traded. 

Both the rule 30.10 and rule 30.3{a) 

orders are premised on the existence of 

appropriate information sharing 

arrangements between the Commission 

and the relevant foreign regulatory 

authority. In particular, both the rule 

30.10 and rule 30.3(a) procedures 

acknowledge that interjurisdictional 

cooperation is a necessary prereq:.llsite 

for an effective regulatory program 

.,...hich is to be applied to a person 

operating from outside the United 

States. 

Based upon the foregoing, in 

particular, sections Z(a)(l), 4(b) and 4c 

of the Act and part 30 of the 

Commission's rules and regulations 

promulgated thereunder, the 

Commission has entered into the 

MRMOU with the COB. This 

arrangement generally will permit all 

produci.!J of one jurisdiction to be offered 

to customers located in the other 

jurisdiction. 1ubject to certain 

conditions specified in the MR..'AOU 

intended to eruure adequate customer 

protection. Further, the arrangement will 

also permit brokers' licensed iD one 

jurisdiction to sell the products of that 

jurisdiction to customel'llocated in the 

other jurisdiction. generally by 

complying with the rules or the licensing 

.. jurisdiction, and with requirements 

agreed to by the Commiuion and COB 

to eliminate regulatory gap1. & a 

condition of these arrangements. and to 

reduce duplication and enhance 

cooperation, the MRMOU provides for 

• Spedl'ically. futureo or optkm QD!IIn~ 

~ncemina 1tocl: IDdiOH l.lld ~pt fottiJn sovtl"'lmm!nt debt llutrwlllllb 111117 aot bt arftred or 

110ld 1D the Ualted SIIIU without ~l!lp\i&D<:e •ith 

certaiD 1dditi0111l JI"'C"C'won- S... teetioro z.t• }\1) of 

1M Act 7 U.S.C 21.11d IICilOII 311)112) of thf 

Seauitin Exc:haaa-e Act of )g:w &Dd Rlili! llll~ 

proEnula•ttd thtft>U>dtr. · 

e 5oft ComJIIifliDII Nit :!2.11, 17 (l'R ll-11 \l.ll!lll). 

1 ~ ColnJI'Ii .. lon Nlt 30.3(•).. 11 crR 30.l(a) 

(1989)-
Federal Register I Vol. .55, -No. 114 f Wednesday, June 13. !990 / Rules -end .R~gula1ions 23903 

infonnation •baring one routine ana-as neededH basis 'in connection .,;ith 

monitoring and compliance ma1:1ers, thus 

Improving the Commiuion'a 1md COB'• 

llbility ~o ~u:ld..rMs financial ormadcet 

disruptlcmt that ooald affect lhe1r 

mad::eta. 

Memorandum oTUndersl.uliling 

Regard.i.ag Mu tua1 Rocognlfitln BetweeD 

the Commo&ty'FUlurei"Trailiui 

CoiiUZlisiilon andlbe Comm1uioo.4es 

Operationa de BoUl'M 

"nle Commodityf'uturesTradin,s 

Commiuioo f':ciTC'':t end the 

CommitsiOll-dea Operation~ de &ume 

("COB"< 

oCo.atiderirlg .the 4Dcreet.ii!8 

international .activity an .their~ 

lutures.ndoption.marketl; 

Recognizing t.b.e .need oto .ahance 

client proiectioD through the OJoler&\ghld 

1be .actilo'ities of the regulated pelJlDllS 

transacting bw!neu-on ihe.lrrespectin 

markets .and throughJb.eenlarcemem.or 

Cb.e.ir respectiwe .national Jawa and 

re,gDlationJI concemin.glutw'el.and 

.o;ptioa .contr.ael.i ..and tranaactione 

involving.auch contracts: 

Desiring to develop new me!:hanisms 

for mutual cooperation and AlAi stance, 

including fhe .abaring oY Wormation. 

between !he Authorities; .and 

"'Representing that eacb Authority lias 

the power to effectuate the proriaions .o! 

this MutualRecogriition Memorandum 

of Understanding ana the annexed Side 

Letter Iconective1y "MRM'Olf'}: 'Un~erst.and the lollowing: 

Article 1-De/initioRs 

1. For the purpose~ u1thi! MRMOU: 

(a) ~~vthority"meana the CFTC'Or 

the COB; 

'{b) ~~uthorizedperson .. means: 

(1) A credit institution«e de!ine4 by 

Artic1e'1-of LawN" 64-46 dated ianuary 

24, t984 and pubfuhed in the Journal 

Officiel or the Republic "Of 'France -or an 

institution regulatedbyArticlet-69 and 

99 of such law, that 18 approvea'by'the 

ComitC des Etablinementl de Cridlt. 

controlled by .the .COmmi.nion Bancaire 

and placed under the supervision or the 

Bank ofFI'1lnce and of the COB. "and that 

b nlhori%edbythe'Co:aeil duMan:l:l~ 

1 Tflme 1o trade Puturet « Optioa 

Contraeb under Article t1 of the Lew 

dated March 28.1585, as amended br 

L-w N" e5-69S dated f12ly n. 1965.1.aw 

N• 87-1158 datedUecem.ber 31,1987, 

and Law N"-89-531 dated l'..ugus\ '1;1989. 

eacb publitbed ln the Joumal Officie1 of 

the Republic of France; 

(Z} A brokerage f'mn 'that U apprDved 

-and controlled by'tbe<:on.eil des 

Bounet de ValeW11•nd op1aced \11\der 

the aup~ialon :of' tbe COB. and 'that ·U 

authorized by 1he Conaeil da 'Marche l 

Terme1o1rade Ftrturea cr Option 

Contra.ctt; under Article-8 of the 'Law 

dated March 28. t885,11it'lmlendedby 

LawN" ~s<'lmd July 'It, !985, Lew 

N" '87-!1"58 da1ed Decem.ber31, "1987, 

Law N" 86-70 dated lllrllll!fl' 2!. '1988. 

and LawN' 89-531 dated Augus1 2.1969. 

each published in'frm3aanuil -official of 

.!he Reptibtit: tlf Pnnt:e; or 

'rsl Arry-afber-persan 'fhat h 

eufhor'D:eQ b:J th!-eonml-da. Mardie 'l 

Terme,1md~atis qnlilifiedto-.ofu:lt or 

accept Client maut nd funil;l \rmllvtng 

Fttt"al%1 m DJftion"Contrlctr. 1~ '"'Clienf .. w"'Cu.m::tzner"' mnm 1 

perwn w"ho tlirectb w1nmred}y llBl.. 

holds, wJllat%1 an mder1o Wta'in a 

.beneficial interest 'in' Puturel vr'Option 

Qmtnu:t: 

'(-d) "!Conse8 ilrs "Marrihf-& 1'"nmtr 

(*CMT'Jmeamfuprolesslmm 

Cl'l"g""lfliuton wrl!er :Article'S -ot 'the ·uw 

dated March"26, -,.ass. u 1mle'!Jded 1?y 

LawN' B5-'B!I'Silated Jcly"11.~ bw 

N' 87-llSB.dated December.31.~ and 

UrwN"e9-63l-dattro 1\:uguJ't"%, "1.989, 

with 'tbe ·B1rlhotity"'to~s1.a\:ili:r"h 1be 

General Regula ti.on clib Tatum znaJ or Option'Marketa "S'®jec't 1ofu 

jurisdiction.·to-a_p_prove !'ulfucnize-d 

Pen:om and to hnprove -dist:iplinaey 

sanctions on 1ucb "Pen: om -or their 

em.plQyees: 

1 e) ''Futures Ccmtrar:t .. "l!leans an 

agreemettt, "Subjectto~gulati.on by the 

CITC, m "lnfbject 'to ~gu}ation by 'the 

CMT and J~1at:erl1Dlder the "&apt!!Vi&ion 

of the roe. 'Which 'ia, « ie heid "OU1 to 

be. -or the ch8J'8Cter "tff11 -earrtractfor1hc 

ptrrcha'll! or t:a1e Jar ftrture de1ivery -o! a 

commodity. a fuumc.ta! instrumen'l:u an 

index.. '!md whit:h i! traded on. ""Or "SUbject 

to the ru.lee of. a Futures and/or Option 

Market; 

If} "'Futurt:B and/or Option Marie!" or ''Market"' meant: 

ttl With respect to-f'rance,1he 

markets onfuturea-or-Option Cootracta 

regulated by the CMT~d placed 'W'Ider 

the eupervi1ion of the COB under 1he 

Law-datedMarc"'b !8,"1885, tl emended 

by Law N"-85-695-dated 1uly11.1985, 

Law-N'-'67-1158 da~d December 31, 

1987, tnd LawN" --89-i31-da1ed A.ugt111t z.. 

1989, a~ad wlUdl are lUted In kmn. A-of 

thle MRMOU; and 

(2) With ft'lpect to 'the Unlte8. Stlrtes, 

the contract marklrtl {et defined 'in 

OfTC regulaticm 'l.J{h], V CFR U(liJ) 

deSignated under the Commodity 

Exdl.ange AC't {the '"'CEA j, "1 U.S.C. 1., 

and wbich are fisted in 1\nnex tl of 1he 

MRMOU; 

(g) ~JnGII(! Regu7a1l'on•-'m.eattl the 

provilionJ af the 'aw• and deC'etl ar 

FtanoeertheUnt1.ed Sta~. • nile or 

regulation -.doptecl fitereunder, «en order baaed 1:be~~m&:r. by an 

Authority, or.by ofhe <:oraeil de1 BoW'Be-e 

de ValeUT'S,-fhe CMT,·-the~ational 

Futures A.nDciafion or,y• Futures ana tor Option 'Market aubtect'l.o'lhe 

approval-cf. orin~n•Ultatitm wi1h, •n 

Authority. "COneemil!B a f\tl.lm'S-or 

()p'tion"Cltmln.ct.' 'f'uttrrea Mia for 

Option "Mark1!t.'Or •llermn tranuctif\& 

buth"resl 01!. -.nCb Market; . 

.{11) ''Nationa/FuturesAssociotirm"' 

('WFA "} tne1!HI a self.;re~ 

organization with 1he •trtb.~. inter 

olia, to regulate certain'Rqiattl"ed 

Peraons~di:ngs buliDnt«t 

Future• and/or OptiOD-Jo.brken.dha.lis• 

regillteredluturr:a Jtll&rria tiM ll!lder 

.ecficml1 d .fhe CEA.7U.S..C..21. ana 

fha t..mai.ntalu 1he records Dl Registe:::e.d 

Perlaru .under 1M CFA: 

lf}""'D_pWn Cordmcr' .mean~-•n 

agreeiiWit. .&J.ilUect .1D .n~nl !Cfjon cy Jh.e 

crrc. _Qt .. uOJ.e.d: io .regtilation. bj" .the 

CMI' and pW:ad.J.mder fie aupen;W.O.U 

o1 Jhe COB, wbilillt.s. .»lWa Dul .to 

be, or fhe character d .aD ~ption.lliA 

offer, .call or .put. .and WhiCh is :tJ:aae..a .an. or aubject .1o the.ruleJ.ct •:PuWreJ tandf 

or Dpfion "MarKet; 

m ''PezaoD"' .:nean~.a.c .mwrlilual. 

assoCiation. ~ip. .corpora.bon. 

tnat..or .any other legal .entity; 

tkl··~ed hrson"meana: 

(1~ AD AutbarUe.a Peraon that. 

pursuant to 1h.ia MRMOU, U permiUed 

to offer or teU.Future.s or O_ption 

ContractJ traded.oc tke MarkeU.ubject 

to the <iuperv.ia:ii)II of .the COB, «.to 

acce_pt orders .and fu.Ddt related ~to, 

to CUeo.te .N~aidlllg in .the United State.. 

without any additional registratiallin 

accordanCE witll the-proviiimutalpsrt 

30 of the CFTC'• regulations: -or 

{2) A RegWe:ed Peft.on that. prsuant 

to this MRMOU.-i• permUted to-offer or 

•ell Future• or Option ContractJ traded 

on the Marletl•ubject t.o the 

auperviaion of .the CITC. .or lD ace~ 

orders and hmdJ related thereto. to 

Clients~idinginFranoe. w.ithont u:y 

additional utbori.zaticm in accard.an.cz 

with the provisioDJ of Article J2 cf law 

N' 89-<531 dated Allgti.Jt.Z.. "1989: 

(lf .. Jlecogni:zinB Authority'' means: 

(1} With.ruped to theuoognition :in 

France of Regme:zoed Peracrnt lilted in 

Annex C of thi1 MRMC!IU, and the 

recognition <Df Faturel err Option 

Contract• traded on .the tdar¥e~-.utljec:t 

.tolhe supe,rvilionof theCPTC end 

liated in Annett Oofthit NRMOU. the 

COB; or 

(%) With"t'ttpect to -the t"ecoga.ltion in 

the UnHed St11tet ot Autbarlzed Pereom 

limdin ~ EclthiJ:wRMOU.wnd 

the f"e(ll)gnition -of futures or Option 

Contracta t:Wed on the "Marlo;ett subject 

to the auperririon of the COB and lia~d 

ln Anne1t Fof'thia MRMOU,;he CF"I'C: 

ond 
239N Federal Register I Vol. 55. No. 114 / Wednesday. June 13, 1990 / Rules and Regulations 

(m) "Registered Perso."'''means a 

Person who solici:s or accepts Client 

t~rders and funds related to transactions 

involving Futures ur Option Contracts 

and who is registered in accordance 

wiL'lthe req;Jire:nents of seclion 4d of 

the CEA. 7 U.S.C. 6d, and part 3 of the 

CFTC regulations thereunder. 17 CFR 

part 3. 

2.. Words used in the singular fonn in 

this MRMOU are deemed to import the 

plural, and vice versa. 

Article 11-Mutuo/ Recognition of 

Regulatory Systems 

t. The Authorities have exchanged 

corTespondence intended to inform each 

other of the Laws and Regulations and 

procedures governing the Authorized 

Persons, Registered Persons, Future& or 

Option Contracts, and Futures and/or 

Option Markets in their respective 

jurisdictions. The Authorities represent 

:bat they have informed each other of 

the Laws and Regula :ions and 

procedures go\·eming the confidentiality 

of information to be shared pursuant to 

this MRJ.fOU. 

2. Based on the representations made 

by each Authority in the exchange of 

con-espondence referred to in pa~agraph 

1 of this Article, each Authority 

recognizes the! the jurisdiction of tl.e 

other Authority has Lawt and 

Regula•ions which address: 

(a) Authorization or registration of 

Persons who offer or sell Futures or 

Option Contracts, or accept orders and 

funds related thereto, including, without 

limitation: 

{1} Criteria and procedur-es for 

refusing, granting, monitoring, 

suspending and revoking tuch 

authorization or registration; and 

(2) Pro\;sions for requiring and 

obtaining access to fitness information 

about Authorized or Registered Persons: 

(b) Financial requirements for 

Authorized or Registered Persons 

including, without limitation, 

f'equiremena concerning: 

{1} The amount and nature of the 

auets of such Penons who cany Client 

accounts or handle Client fundt: 

{2) Accounting for transactiont and 

traneaction pricet: and 

(3) Daily mark-to-market clearance 

and tettlemenl proceduret; 

(c] Syttemt for the protection of Client 

f.mds including, without Umitation. 

mechanitmt intended to: 

(1} Mitigate the loll of Client funda 

because of defalcation or default; 

(2) Enture appropriate accounting for 

Client funds and the inleretll in which 

1uch funds are invested; and 

(3) Permit the liquidation or transfer of 

Client positions when a margin call is 

DOl met; 

(d) Recordkeeping and reporting 

requirements pertaining to f:nancial and 

transaction information including, 

without limitation. information about: 

(1) Futures or Option Contract prices; 

(2} Settlement prices; 

(3) Orders; 

(4} Trade confirmations; 

{5) Statements of the finanacial 

position and other accounting records of 

the Authorized or Registered Persons; 

{6) Client account statements; and 

(7) Any other Client records: 

(e) Requirements which govern sales 

practices including. without limitation. 

the handling of Customer complaints, 

supervision of accounts, tolicitation, 

risk disclosure, discretionary accounts, 

promotional material, and tupervision of 

employees and ditcipl.inary actions: and 

{f) Procedures to audit for compliance 

with, and to redress viola tiona of, Client 

protection and sales practice 

requirements including, without 

limitation: 

(1} Surveillance programs designed to 

detect abusive activities which takeadvantage of Clients; 

(2) Powers to investigate, audit. and 

sanction the sales practices of 

Authorized or Registered Persons; and 

(3) Procedures to resolve Client 

disputes. 

3. Each Authority represents that all 

Futures or Option Contracl.ll and 

Markets subject to the supervision of 

such Authority are governed by the 

Laws and Regulations and procedures 

referred to in paragraph 2 of this Article 

and that tuch Authority will provide the 

other Authority with prompt notice of all 

material changes in such Laws and 

Regulations. 

4. Each Authority will accord to 

Clients residing in the jurisdiction of the 

other Authority the equal protection of 

its Laws and Regulations as to Clients 

residing in its own jurisdiction. 

5. Comequently, each Authority 

recognizes that: 

(a) The Futures or Option Contracts 

and Future• and/or Option Markell 

aubject to the supervision of the other 

Authority are governed by Laws and 

Regulationt intended to provide Client 

and Market protection• to Persons 

engaged in trading 1uch Futures or 

Option Contract•: and 

{b) The Recognized Persoru tubject to 

the supervition of the other Authority are governed by Laws and Regulations 

intended to provide Client and Market 

protections to Persont engaged in 

trading Futures or Option Contracts. 

6. Therefore, subject to the 

requirements. of this MRMOU including, 

without limitation, the provisions eel 

forth in Article• V and VI herein, each 

.Authority understands that:-

{a) Compliance by a Recognized 

Person with the requirements imposed 

by, and under the supervision of. one 

Authority concerning authorization or registration of Persons, is substituted for 

compliance with the authorization or 

registration requirements impo~ed by, 

and under the supervision of, the other 

Authority: and 

(b) Subject to the pTOvisions of the 

Side Letter regarding Futures or Option 

Contracts concerning aleck indices and 

certain debt securities, each Authority 

l\-;U permit the offer or sale, and 

acceptance offunds related thereto, to 

Clients residing in Its juri&diction, or 

Futures or Option Contracts which ate 

properly authorized or designated to be 

traded on Markell eubject to the 

supenrision of the other Authority. 

7. The Authorities understand that the 

recognition of an Authorized or 

Registered Person or the recognition of a 

Futures or Option Contract in 

accordance with paragraph 6 abo\·e may 

be refused by the Recognizing Authority 

if such recognition would prej!ldice the 

public interest in the jurisdiction of such 

Authority. 

8. With respect to Recognized 

Persons, each Authority acknowled;es 

that this MP..MOU is directed to 

brokerage activities by auch Petso!'ls in 

the jurisdiction of the Recognizing 

Authority, which involve Futures or 

Option Contracts traded on Markets 

subject to the supervision of the other 

Authority, and is not directed to trading 

acth;ties by these Persons on Markets 

1mbject to the supervision of the 

Recognizing Authority. 

9. Each Authority understands that 

this MRMOU doe• not exempt a 

Recognized Person or any other Person 

from any provision of the Lawe and 

Regulations in France and in the United 

State• which are not specified herein 

including. "';thou! limitation, the 

antifraud provisions of each of these 

juriJdictions. 

Article 111-Mu/uol Assistance 

Conceming Information Sharing 

1. Each Authority acknowledges that 

Its respective understandings set forth in 

thit MRMOU are baaed on the existence 

of mechaniJms for sharing information 

on an ··as needed" basis and for 

cooperating in inquiries, investigations, 

proceedings and compliance matters 

with respect to the Lawe and 

Regulation~ subject to its jurisdiction. 

2- Each Authority will; · (a] Assiat the other Authority, to the 

extent permitted by the Laws and 

Regulation• of its jurisdiction, by 

providing information concerning the 

oversight and protection of the Markets 
Federal Register I Vol. 55, No. 114 I Wednesday. June 13, 1990 I Rule& and Regulations 23905 

which are subject to the supervision of 

11\lch Authority and the protection of 

Recognized Persons' Clients residing in 

the jurisdiction of the Recognizing 

Authority. and 

(b) Designate In lhe Side Letter 

C1lntact offices allhe COB and the CITC 

to receive and proceu all requests for 

1ucb information 11haring. 

3. With respect to Recognized 

Person~. the information sharing 

described ln this Article will include. 

without limitation, information 

concerning: 

(a) Transaction Bj)ecific data. 

litcludin.g oonflrmation data and position 

data; 

(b) Any data necessary to trace the 

funds: (1) that are located in the 

jurisdiction of an Authority: {2) that 

concem tranaactions on the Markets 

subject to the tupervision of that 

Authority: {3) that are held by, or on 

behaU of, Authorized or Registered 

Persons recogni%ed by the other 

Authority. and (4) that belong to Clients 

residing in the jurisdiction of such other 

Authority; and 

{c) Data on the standing of the 

Recogniud Person to do business. 

including its financial condition. 

4. With respect to any arrangement 

between the MarkeU of each Authority 

to permit access to each others Futures 

or Option Contracts traded ori an 

electronic trading system which has 

been authorized in the respective 

jurisdiction of both Authoritie~. 

information neceuary to permit each 

Authority to ensure compliance with. or 

enforcement of, any Laws and 

Regulations of the jurisdiction of that 

Authority, may be shared pursuant to 

the provisions of this MRMOU. 

5. A request for information pursuant 

to this Article must be made in writing 

and addressed to the contact office of 

the requested Authority designated in 

accordance with paragraph Z(b) above. 

Stich request will be accompanied by 

a translation in French in the case of a 

request to the COB, and by a translation 

in English in the case of a request to the 

CITe. A request mwt specify the 

following: 

(a) The information sought by the 

requesting Authority; 

(b) A general description of the matter 

which is the subject of the request and 

the purpose for which the infonnation is 

sought and 

{c) The desired time period for the 

reply and. where appropriate, the 

11111ency thereof. in the event of urgency, 

a request for infonnation and a reply 

thereto may be transmitted by &ummary 

or emergency procedures by mlJtual 

a!Tangement of the Authorities. 

6.1n response to a request. made in 

accordance with paragraph 5 above, for 

immediate access to the books and 

recorda of a Recogni%ed Person that are 

required to be maintained under the 

Laws and Regulations in France or in 

the United States, as the case may be, 

and that relate to tranaactiona aubject to 

this MRMOU, each Authority will 

provide the other Authority with the 

copies of the booka and records which 

are the subject of the request. 

7.ln addition to the specific notice 

provisions set forth in Article V 

hereunder, each Authority will inform 

the other Authority, on an "a• needed" 

basis, about the authorization or 

registration status of a Person subject to 

ita jurisdiction and about the status of 

Futures or Option Contracts traded on 

the Market. subject to Ita supervision. 

8. Each Authority will use its best 

efforts to notify and conault with the 

other Authority if It becomes aware of 

any information which. in its judgment, 

materially and adversely affects the 

financial or operational viability of any 

Authorized or Registered Person . 

recognized by such other Authority. 

Q. Each Authority will provide, or will 

cause to be provided. to the other 

Authority, commencing with the first 

flling due after the effective date of this 

MRMOU, as promptly as practicable 

after receipt of the relevant report. the 

following information with respect to a 

Registered or Authorized Person 

recogi!iz.ed by the other Authority: 

(aJ Copies of the annual audited 

financial ata temenl. req u.ired under the 

Laws and Regulations of the jurisdiction 

of that Authority. The Authority, or ita 

designee( a), will represent that the 

annual fmancialstatement of this 

Person has been certified as required 

under the Laws and Regulations of its 

jurisdiction. Such Authority, or its 

designee(s). will further represent that. 

through the acceu it bas to financial 

compliance information regarding the 

Authorized or Registered Person. it hu 

no reason to believe that such Person 

has violated an7 of the financial 

requirements o the jurisdiction of this 

Authority; and 

(b) Details of any notice received by 

the Authority, or.ill designee( a), under 

the Laws and Regulations of the 

jurisdiction of this Authority regarding 

any breach of financial requirements 

under such Laws and Regulations. 

10. No provision of this MRMOU lhall 

be considered as conferring the right to 

ask for. or challenge. the execution of a 

request for information upon any Person 

other than the Authorities. 

11. The Authorities acknowledge that 

this MRMOU doe• not prohibit either 

Authority from taking measures. to the 

extent permitted b)' international law, 

otherwise than as provided herein to 

obtain information necessary 1o l!nsure 

compliance with, or enforcement of. its 

Laws.and Regulations. 

Article IV--Confidentiality a[ the 

Information Shared Betw~ten flle 

Authorities 

1. The requesting Authority may use 

the information furnished pursuant to 

this MRMOU solely: 

{a) For the purpose stated in the 

request, including ensuring compliance 

with, or enforcement of, any L!ws and 

Regula tiona specified in such request; or 

(b) For purpose• within the general 

framework of the ute stated in the 

request. including conducting • civil or 

administrative enforcement proceeding, 

assisting in s self-regulatory 

enforcement proceeding, anisting in a 

proceeding. lnclud.ing 11 proceeding 

whose purpose is to permit a aubsequent 

crim1nal prosecution. or conducting any 

investigation related thereto for any 

general charge applies ble to the 

violation of the provision specified in 

the request. 

2.1n order to use the information 

furnished for any purpose other than 

those stated in paragraph 1 of this 

Article, the requesting Authority must 

first inform the requested Authority of 

its intention and provide this Authority 

with the opportunity to oppose such use. 

If. under such conditions, the requested 

Authority does not oppose such use, this 

Authority may subject it to certain 

conditions. In the event where this use 

of the information is opposed by the 

requested Authority. the Authorities 

agree to consult pursuant to paragraph 8 

of Article VI hereunder as to the reasons 

for the refusal and the circumstances 

under which use of the information 

might otherwise be allowed. 

3. Each Authority shall keep 

confidential requests made within the 

framework of this MRMOU, the contents 

cf such requests, and any other matters 

arising during the operation of this 

MRMOU, including consultations 

between the Authorities. 

4. In all easea, the requesting 

Authority shall keep confidential any 

information received pursuant to this 

MRMOU to the same extent as such 

information wou1d be kept confidential 

in the jurisdiction of the requested 

Authority, except in the case whet"! the 

information provided must be disclosed 

in the course of ill use pursuant to 

paragrapha1 and 2 of this Article. 

5. However, the Authoritie• may. by 

mutual agreement. make an exception to 

the principle set forth in paragraph• 3 

and 4 above. to the extent permitted by 
23905 Federal Register / VoL 55, No. 114 I Wednesday, June 13, 1990 / Rules and Regulations 

the Laws and RqulaUona of each 

Authority. 

Article V-Recognition of Person• rmd 

Contracu 

1. The Authoritiea undentand that the 

recogniticm of au Aothariud orRegistered Person will become dfec:tin 

thirty daye after the completiou. af the 

following: 

(a) The Authority notifie1 the 

Recognizing Authority that the 

Registered or Authorized Person 11 

presently qualified to do btainess In Its 

jurisdiction and expects to commence 

busineu in the jurisdiction of the 

RecOgnizing Authority; and 

(b) The Authority provides Un! 

Recognir.ing Authority with the 

following written undertak:ing:l of the 

Authorized or Regiatered Penon: 

{1) A consent to IUbmit to jurisdiction 

in f)-ance or the United States, u thecase may be, with respect let 

trall58ctions in Fu~ or Option 

Contracu with Clients residing in weft 

juritdiction, and a binding appoi:atment 

of an agent for ten. ice of procen in the 

juriadiction of the Recognizing 

Authority, whic.h has been fLied with the 

CMf or the NF A. as the case m.~~y be, in 

accordance with the reqniremem.. o! the 

Recognizins Authority. unleu such 

appointment previous}y bu been filed 

and remaina valid; 

{2) An acknowledgement of 1ucl! 

Pe~on that it can be required by the 

Authority in the juriadlction in which it 

il authori:z.ed or registered to provide to 

that Authority immediate access to its 

boob" and n:con:I. which an: related to 

tranaactions aubject to thil MRMOU 

and which are required to be mairrtained 

under the applicable- Laws and 

Regulatioas of the ju.riadictloo af that 

Authority, auch Penon Nrther 

acknowlf:dses that each Al:lthority will 

cooperate in providins to the 

RecogniziDg Authority acce.. to the 

copies of auch boob II.D:d l'tiiCOrds wb.idr 

are the aubject of a req\lel't made by the 

Recog:nizing Authorily in accordance 

with Article m or thie MRMOU; 

(3) A liat of ita priDcipak iDdadUI& 

without llmitatiOD: 

(A) Ill directors and officera u weU 

aa U& CODtrolliDg aharebold.en. m 

partners. or any Penon occupyina a 

similar &talul or perl'onniq &imu.r 

fuDctions. having the pawer. dim::tl)' or 

indirectly, through qreemeot or 

otherwiae. to u.erdaa a eomrolliDg 

iDflueoce over ita acti'ritiea wbich are 

subject to regulatioo by aD Authority. 

(B) AsJy bok!er or beneficial CFWDer g,f 

ten percent or more ol the anllhmdina 

1harea of any clau a! stock; 

(CJ Any Penon who ha1 contribu.ted 

len ~ra:nt at more of i.b capital: 

(4) Subject to the provision• of the 

Side Letter, wch Penon coruents to 

notify all Clienll of the existence of. and 

to pe.rtidpa.te ln. any procedure 

available under the Lawtand 

Regulation• of the Recognizing 

Authority to reaolve on the papen 

Client disputes where ao.ch disputes 

involve tranaactiona withiD the pMYI.ew 

of thia MRMOU; and 

(5) Such Penon agrees to p!'Oride 

Clients residing in the juriJdictioD of the 

Recognil:ing Authority with the 

diaclosure1 required by IUCb Aathorlty: 

un1esa the Recognizing Authority givet 

notice to the other Authority that IUch 

recognition Ia refused In accordance 

with the provisioiUJ of this MRMOU. 

Z. Subject to paragraph 3' ht:l"etmder, 

the recognition by an Authority of a 

Registered or Authorized Penon will 

remain in efft:ct as long u ruch Person 

il authorized or registered in the 

Jurisdiction of the other Authority. 

3. The recognition of an Authorized or 

Registered Person may be terminated if: 

(1) The Authorized or Registered 

Penon violates the law of the 

Recognizing Authority; 

(2} The Authorized or Registered 

Penon fails to comply with any 

provision of tha MRMOU: 

(3) In the case of a Penon recognfzed 

by the CfJC, a princpal of 1uch PersoD 

beer been disqualified &om doing 

business in France. or in the C81e of a 

Penon recognized by the COB, a 

principal of 1uch Person baa been 

disqualified from doing businesa in the 

United State• llDder the CEA and CFTC 

regulations; 

(4) The continued recognition of the 

Authorized or Registered Person ia 

contrary to the Law• and Regulations ol 

the Recognizing Authority; or 

(5J The Authorized or Registered 

Penon cease1 to do blllineu in the 

juri&diclion of the Recognizing Authority 

or ln the jurisdiction o[ the Au.thocity 

where auch Peraan 1a authorized or 

regiltered. 

4. Eacl!. Authority underatanda that a 

Recogn.i..ting Penou will be required to 

comply with the requiremenll relating to 

protection of Client fwlds, pnxlential 

atandarda incl.uding 6Aancia1 

requirementa, rilk diaclo8111re and 

arbitration u aet forth In tha Slde Letter. 

5. Each Authority WJdef"''tand. that a 

Recogniud pen.oa will maiut.dn 111 

boob and recorda accordina lo the 

Law& Uld Reg!Jationa of tbejuriedictiOEt 

where such Penon II a\lllaoriPd. 01: 

registered. 

6. Each Authority will aotify the 

~Authority prioE' to the first 

offer or aale of an OptioD Contnrd 

aub}er.t to ita ~liou to Clienll 

retiding in the juriadiction of the 

Recognizing Authority. The Authorities 

m~derstand that the recognition of the 

Option Contract by auch Authority will 

not become effective until thirty days 

after publication in the Bulleti:IJ Mensuel 

of the COB or in the Federal Regiatar, as 

the case may be. of a notice 1pecifying 

the Option Contract to be offered or 

1old. un1eu IUCb ret:ognltion i1 refused 

•• permitted by paragraph 7 of ArticleD 

of thi1 MRMOU. 

7. The Authority with juriJdiction ~r 

the Market OD which are traded the 

Future• or Option Contract& offered or 

sold to Client& retiding in the 

furitd.ictioD of the Recognizing Authority 

by an Authorized or Regitlered Penon, 

will conduct. or will cauae to be 

condncted. 1ale1 practice audita' of thi! 

Authorized or Regi1lered Penon. 

Article VI-Effective Date and 

Miscellaneous Representotions 

1. Each Authority acknowledge! thal 

this MRMOU has been executed in 

accordan~ with the applicable laws 

and Regulations in France and the 

United Stale! and is bned on the 

representations made and ISilpporting 

materials exchanged by the Authoritie!. 

2. Thia MRMOU will be pl>blished. in 

France. in the Bulletin Mensae! of the 

COB, and in the United Statu, in the 

Federal Regis1er. 

3. The Authorities acknowledge that 

the effectiveness o£ thit MRMOU will 

depend upon the adoption of the 

dome, tic mearures that are necessary to 

implement fully il! provisions in the 

respective jurisdiction of each 

Authority. The Authoritie1 will 

exchange lellera to infonD each other of 

the adoption of aucb meaaurea. 

4.. Thia MRMOU will enter 

immediately into force upon the 

exchqe of lett..era referenced in the 

precedina paragrAph. provided that a 

delay of thirty daya bas elapaed since 

the publicatiOD of lhi& MRJ.AOU in the 

Bulletin Men~uel of the COB and in the 

:Federal Regiater. 

5. The Authoritie1 aclcnowledge 

however that they will implement 

Immediately thoae proviaton. of thlt 

MRMOU wh.ich are already in 

c:omptlance with the Law1 and 

Reg\Ua tion1 ol the jm.diction of both 

Authorltiel. provided that Uie ~ay 

delay referenced in the preceding 

para.gnph bu ela~ For thi1 purpo1e. 

the Wormation •baring HlialaDce 

between the Authoritiea will be eubject 

to the condruon1 deacribed in the Side 

Letlu. 

&. Subject to the DOtice" provision:~ aet 

forth in Attichr V abon. the Authortties. 

I 
Federal Register I Vol. 55, No. 114 f Wednesday. June 13, 1990 / Rules end Regulations 23907 

-

t~r their designees, may periodically 

update the Annexes of thia MRMOU. 

7. The RecognWng Authority will 

promptly notify the other Authority 

before refuting. auspendit41 or 

terminating the recognition of an 

Authorized or Registered Person, and 

before refusina. suspending or 

terminating the recognition of a Future• 

or Option Contract subject to regulation 

by the other Authority. 

8. The Authoritiea will coault. upon 

the requeat of an Authority, In lhe event 

of: 

(a) A nfu.al by an Authority to 

comply with a requett for information in 

accordance with Article m of this 

MRMOU;or 

(b) A change lri market conditions, or 

in their respective Laws and 

Regulations, or in the event of any other 

difficulty which may make it necessary 

to amend or interpret this MRMOU. 

9. The Authorities may agree on such 

practical measures as may be necenary 

to facilitate the implementation of thie 

MRMOU. 

10. This MRMOU may be amended by 

mutual written agreement of the 

Authorities. 

11. Each Authority understanda that i! 

the continued effectiveness of this 

MRMOU, in general or with respect to a 

particular Recognizing Person. or a 

Futures or Option Contract. or a Futures 

or Option Market. would prejudice the 

sovereignty, security, fundamental 

interests or public order of an Authority, 

that Authority may condition. modify, 

suspend or terminate the recOgnition of 

an Authorized or Registered Person or the recognition of a Futures or Option 

Contract. or otherwise restrict such 

recognition upon iU motion and ·written 

notice to the other Authority. 

12. Thi1 MRMOU 1hall remain in 

effect unless terminated by either 

Authority upon thirty days written 

notice to the other Authority. 

In Witness Whereof, the Undersigned, 

being duly authorized. have signed thia 

MRMOU. 

Done at Wathington. DC.la duplicate. \hit 

eth dty of June. t990, iD the Engli•h and 

French languaan.. each telct bei..nl equally 

authoritative. 

Wendy L Gra=D. 

Chairman. Commodity Futures Trading 

Commission. 

fun s.mt.c.our.. 

U Pr!sident. Commission de~ Operatiom de 

Bourse. 

.Amlex A 

. Futures and/or Option Marhet.s Placed 

under the Supervision of the COB 

The Fuiii.TI!I and/or Op!ion Markett pla~d 

under the 1upervision of the COB and 

referenced In the provision• of thit MRMOU 

are the following:-

Man;h~ .l Tenne International de Fran~ 

(MATIF). -

Annex 8 

F;;tures and/or Option Marhet.s Placed 

under the Supervision of the CFTC 

Tht Future• and/or Option Markell placed 

under tht lupervlaion of the crrc and 

ref en! need lD the provilloD.I of thi• NRMOU 

are the follow\ni: 

/v:rlex Com.moditiet Corporation 

Chicqo Board ofTn.de 

Chicago Mercantile Exchange 

Chicago Rice and Cotton Exchange 

Coffee, Sqar l Cocoa Exch&D8fl,lnc. 

Commodity Exclwqje,lne. 

Kln11t City Board ofTn.de 

MidAmeriea Commodity Exchange 

MinneapoU. Grain Exchanae 

New York Cotton Exc:haDBe 

New Yorlr. Puturet Exchange, Inc. 

New York Mercantile ExchaDBe 

Philadelphia Board of Tn.de, Inc. 

Pacific Futuret Exchanse 

Annex C 

RegiStered Persons 

The Registered Persona that. punuantto 

thb MRMOU, In! permitted to offer or tell 

the Futurea or Option Contracts lined in 

Annex D of thil MRMOU to Client' ~sidin& 

In France are the following: 

{l.ist to be provided by the CFTC). 

AnnexD 

Futures or Option Contracts Placed 

Under the Supervision of the CFTC 

The Future a or Option ContractJ placed 

under lhe 1upervision of the CFTC that. 

punuant to thh MRMOU, an: pencilled to be 

offered or .old to Client• retiding iD France 

are lhe following: 

(Us! to be provided by the CFTC). 

Annex E 

Authorized Persons 

The Authoriud Person~ that. punuantto 

thit MRMOU, are pencilled to offer or aell 

the Futurea or Option Contracts listed in 

Annex F of thil MRMOU to Clients retiding 

iD the United Statea an: the followina: 

(List to be provided by the COB). 

.Amlex F 

Futures or Option Contracts Placed 

Under the Supervision of the COB 

The Future• or Option ContrllctJ placed 

under the aupervilion of the COB that. 

punuant to this MRMOU. are penn.\1\ed to be 

offered or sold to Clienll realdina lD the 

United Sta\H are the followfnl: 

(Ustto be provided by the COB) . 

SIDE LETTER 

(une the Bth. 1990. 

Wendy L Gramm. Chairman. Commodity 

Future• Tradin& Commtuion. Z033 I( Street 

NW .. Watfuniton. DC 20:>81. 

Jean Saint-Geoun. Le Prhidenl Corru:niuion 

det Op6rationt de Bourwe, 3H3 Quai 

And:i Citro~n. 75739 PARiS CEDEX 15. 

Re; Mutual kctlgnition Memorandum of 

Undet'ftanding betWHn !he CFT'C and 

the COB ("''MRMOCF1 doled June 6. 1990 

'Ibi1 letter refen to the agreement which 

wa1 algned today by the duly authorited 

rep~untalivn of the Commodity fUturea 

Tradins Cotnmiuion ("CFTC')and the 

Corruniuion de~ Optratloru de Bour-.e 

(''COB") (collectively, the MAuthorilie~'), 

coneemirli the 1nutual rec.ognilion of Futun!1 

or Option Contracts th.ded on the Future• 

and/or Option Ma.rkell1ubject to the 

aupervitlon of thete Authoritiea, at well 11 

the recognition of Authoriud or Regi.ttered 

Pert-OD.I tnlnJ&ctins buJtnet1 0D. IUch 

Markets ("MRMOU""). Tbitleller It intended 

to facilitate the operation-of thia MRMOU 

and to further clarify certain condition~ 

impoll'd by the Authoritiea for ill 

lmplement.ation. Allterm1 used In thl.. letter 

have the II.IIle lllelninp 11 tel forth iD this 

MRMOU. 

Thia MRMOU 1.1 the retult of e:dentlve 

con.sultatioD.IIZDDDB tbe Authoritiet a.od of 

the exchange of co!T"e11pondence concerning 

the financial capacitiet of the Futurea and{ or 

Option Marll.e\J tubject to their tupervition. 

Artidt V of this MRMOU sets forth certain 

condition• impoted by each Authority in 

order for an Authorned or Registered Person 

to become and remain recogrUud by auch 

Authority. The Authoritietl understand that. 

in addition to Article V of this MR.MOU and 

in addition to any applieab\e Lawt a.nd 

Regula tiona. tht re-cognltion of an Aulboriud 

or Registered Person. for the purpote of 

permitting the offer or 11\e of Future• or 

Option Contracts in the jurisdiction of the 

Recognizing Authority. will be tubjec;t to the 

following further conditiona; 

1. Pro~ction of Client Funds 

(a) In the cue of an Authorir.ed Peraon. the 

Cleating House referen~d in Article II of the 

Law dated Msrt:h 28.1885, aa amended. and 

Article 1.3.0.4. of lhe General Regulstion of 

the CMT, y,;il! guarantee to tuch Person·, 

Client• retid.Jill! In the United Statel the 

deposits, and any Yariation msrgina. due by 

the Authori~ed Penon to tuch Clienll with 

respect to Future1 and Option Contracts 

traded on a Marlet tubject to the f'I8Ule\ioo 

of the COB. Thia full perfonnance guarantee 

will be provided to such Clients pro\ided 

that: {i) The Authori~t'd Person will inJure 

that its own potltionJ and the potitionl of ill 

C!ientl will be cleared separately, and that 

the obligation• in reapect of auch potitiou 

cannot be offaet; (ii) the Authoriud Penon 

will maintain. on behal! of auch Clienll. the 

amount of the depot it required by the 

Cleuina Houaa. in liquid suets which are 

permitted under the CMr rulet; and (iii) in 

the event of a default of the Authotiud 

Per1on. the amount referenced In 

1ubpar1graph {il) above will be tranderable 

to 1nother Autborized Penon a1 Clienl"a 

property. Furthermore. the undisbu.rted 

accrualt wiU al..o be 111aintained by tbe 

Authori.t.ed Per10n. on behalf of tuch Client•. 

in liquid an~t• thtt are identifiable at 

properly of a par1.icular Chen! e.,d that can 
23908 Federal Register / Vol. 55, No.. 114 I Wednesday, June 13. 1990 / Rules and Regulations 

be daimrd •• Clienrt propt'I"'J .a::on!Uz1 to 

Article XI of lAwN" e:Hn ol )__,. 3. UJ63, 

•• amrt~de'tt 

(b) m !be c=aN of a Replered Panon. aada 

Penon ....ur m.~tnUim the flmda ~In 

utas> or the o-re repi.aboaa.. 11 era 

l.l(gg). in aa:ordanoe with Ut. ~tla:l. 

provia~ of ~tioll td of the CEA uad. part 

1 of th. CFrC ~tioD.II ~ 11 CFR 

port 1-

z. Pruckrlfiol &qui~ 

(a) 1a the cue of an ADthodad ~ 

tucb Pe!WII will m.aintain Del equity .. 

required under the CMT Ge..eral bplatiollo 

provided thal. accordinc to ad replation. 

DO rubordinated debt or paranlee may be. 

nbsUtuted for auth Del equity in order to 

fulfill the. millfmam capir.a.l requiremenU. i.a.. 

FF7.5 mili1.cm for nonclearina member., F'F 50 

milli011 tor ind!-.idua.l dearini memben. and 

FF 315 milUoD ror seneral clel.l'iq memben. 

lllld provided. further, that. U' a more •~nt 

financial req1lirement lt imposed by the 

Europun Economlt CCimmunlty on tlli"'))d.!l 

invettment fum.t, the Authoriud Penon. will 

meet •ucll requJremrnt; 

(b) In the cue of 1 Registered Penon. tuch 

Ptnan will maintain c:apitalaa required 

ander the CFTC rule 1.17, 17 CFR 1.17: 

(c) The Authcrritie1 acknowled,e that they 

williXl'D"JUlt fmther u to tbe comparability of 

the prudential ~~t. of their 

respe-c;tiYe jn:risdicti~m~ concerning the 

Autftoriud or Regirtered hrson.a. N a 

prdiminiJI'J agreem~:nt. each Aotin:nity alto 

agrns to consult if tbe obligation. of 1 

Pel'fOn whicb b a!!thorized orrqt..med f:n ltJ 

~dlction. tore~ to Clientl h!1ldin11 in 

the jurildictkm or the other Anthorlty, txeted 

twenty-five time1any aotb Penon'• net 

equ..lty. ~ Aatboritiu will further consuJt tf 

a nb.tantial p11rt or the obtigatioiW that an 

Authoriud or Rtgi•ltred Ptnoa own to h:rt 

Clients originate& from CUem. raidina iD the 

jlllUdiction of the other Authority. 

.S..llid D4dt:¥Ure SUJ2~ 

(•J Priof- b) tire optfti-ng o{ &D KICC'II!It In 

FuttarN or Option Contract. traded CD 

Marbta aub}ect to !tie Wperv!JIO!J or tM 

COB. for Cl:i.mta rmdina Ill theth!i1td Statn. 

the Authorized PlriOfl wiH pro-ride •d 

C1iem. witb: 

(1) 1ba lnlonoetioa notice, tramla4ed Into 

EllsliJh. whicil iJ •J'P'"t"l'"'d by ttr. COB 

~~ to AJ-tid. H-bY. of tt. Lliw deled 

Much za. 1a5. aa MleAdect. Md b)' 

Jteplrion N"" uo-t 1 oltM coa. •• 

.nacbd ~ u eppeD<Ib I; ud 

(Z) Tlul ri•lr. dlldo.no all--· ... ac:cadaDce with rUJ. 30..8 aDd ..-au of tH 

cnc. 11 CPR ICUI ad S33. • .etedaed 

beftiD•a~D...tiD: 

(b] Priw to lba opaUq of l:lt ec:a.at Ill 

Fuhn!ll c.- O,tac.<Antr.cta tz:edeclMubia ,abj.c:t to. tr. ....,.. t b11oa oltM 

CfTC. b- Cimta b!lllldiJ:It Ia rr-c.. 1be 

Regl•tued Penoa wt1:1. ,_.,....a a.. ...... t1J na- w-e:t~.oa d~ nq1IINd. br 

Rl'JIIla&. N" .,._. ) oi .. COB 

ftJ•rdiltt thl oBw c.- ...-u .... ..ttw 

futuro. 

tr"lded 01111. 

ecdnctl,-

~ 

bancial 

IUlbt. ~ .. att.acbed here~ .. app-.di:J. N; Mid 

(Z.) The riJir. diKloaure Jtete=ts. 

tl"an~Jated into French. in accordu.ce with 

CITe nUn n7.1.55 and 1.110.10.11 aa :JJ-'. 

t.SS and 100.10, 11 •ttached hereto 

rnpectively 11 appendiceJIIL V and VL 

4. Arbitrot.ion P"roudure1 

The Authorized or Regk:tered ~ 

conaentl to arbllrl~. at tire etediolr or tlte 

Client. 11 the NFA or the OIT, tAe vbitntion 

ptogram~ of Hch of wh.ich provide~. • 

DtechaniJiu for a hearins em tbl papua; 

provided. however, that if the cl.ai.m aritea 

primarily Out of deJlvery, cleJ.rina, Htl)tment 

or floor practice• on Fu.turu llld/or Option 

Market•. the Recogniud Penon can elect to. 

arbitrate at the forum al the jurltdiaion la 

which ll b authorUed or f'e8ial.ered;. and 

provided. further, that the demand for 

arbi!nltioo at the CMI' or the NFA c:an. be 

filed by tM ClieDtat either web ranun. 

For pUTpO"Iet of lha MRMOU. the tmiD. 

"'public intere1t"' fn pllTigfapL 7 ol Articlll n 

of thil MRMOU lhall K!clude. without 

limitstion. the La.Wlo and Regu.Ialionl 

so venting disqoalliic:.ition from autlwriutiozt 

or regi1tratioo in effect in the jurUdiction of 

eac::h Authority. The Authoritiet understand 

thst no employee or representative ola 

Recogni:ed Penon may be permitted to 

engsge in sctivitiel 1ubject to tbi1 MRMOU 

if, to the belt k:oowledtl:e &Dd belief of liM! 

Authority in the jurildiclioo gf wbn:b the 

Recogn.i:z.ed Penon Ia authorizl:d Of 

regiatue.d.. the employee 0!" re~t.tiva of 

the Rec;:ogni%ed Penon. hu beell dit~>ali6ed. 

or would be ll&tutorily di~ualified. b-om 10 

acting under the Laws Knd Rl!gUIJtion• or the 

iu.riadiction of the Recognizins Autbority. 

For purposet or thi• MRMOU. thil term 

"dealgne-e{ar m paragrt.ph g of Article m or 

this MRMOU .hal.l ~the NFA. tht CMT, 

or Ul appropriate c:irt:wnltancel, a Futllre .. 

and{or Opuon Mark.el 

The Autboritin undentand thJt Futurea or 

Option Cootradl concernil:l& ,lock lndicea. 

and certain debt aecwitiea which are not 

exempt1ecwitie1 under IICtioo 3[a}[12J of 

the Secwitie. Excflange Aet of :tt:M and rufeo 

3a12.-8 promulgated thereunder. marU~t be 

permitted to be offered or aold pu.l'IWillt to 

thi1 MRMOU without compbece wl.lh 

certain Jdditional proceduru {ue aedion 

2.{a){t) of the CEA. 7 U.S.C.%. JKt[Qa S(•Jtt2) 

or the Seeurltiet Exchange Act of t9Sf and 

nile ~1~ promnlgated thereuade:r}. 

The Authcnitira ac:kJJowtedp trw the 

provlaiont of thi• MRMOU' concm:rlna: thenrcogn.itioc olA11\horized wRes£~ 

hraoDJ are only directed to tho.e Pwaona 

h!liding outelde the fwi.ldi.ction of the: · 

Recogni:z:izlf AlltltoriiJ. n. Autll.mtia wtU 

aacertam. m aocord&£:a wiO. ..-..Dy. 

aveed upon compliance proc:edurn or 

r-q~ that tin Pwsou wlk:ll>-

autboru.d or regjlter"Wd t.lhefrr.epeeti9'1" 

fwitdkUoa.. lo-U.. eJCtltlt po~~JWe, ·do aet 

permit dteV ~-~wtuch are located In the- ,..._.ctfoa ol th 

.Reeogniz:ing Authorit;1. tgmpp llllltbtdr 

behalf in the aclivitlet nbiect ID lbi6 

MRMOU. . 

lbe Authoritiea undentand' that the r.uu.rebyaa~or~,.._to 

tr:llll:ply with U7 ~ ol dtlt MD.IOU. 

or the =ditio- -=d ~ 

referac:.ed •bovt: may leAk ilia denial or 

llrminaticm of rwcoJ!li tiou by the R~ 

Authority. A ~lion of recognition will 

be commaai.cated. within tbirty days, b:p 

written notlc:e to the Authority of. !be 

Juriadlctioa ID wh.id!. the JluMD ll authanud 

Of rqia~ S.cb tl'rm.intliUil IZI.I)' be 

communiCI1ed c;n:liy bl the ~t oi&D 

~-

~ 

AJ. the d:.aeti011 of tbJ Autbadtf 

.-.::or;ni~ period of time ma:p 

be perml!ted to malr.t diffenm ~ntl 

r~ Clienta raidin& m the Jm:ilc&tioD oltbat. 

ADtbGrit)'. 

lbe Authoritle1 abo understand that the 

refutal hJ ~ Aulbar:it)' toboPor ll!J' 

JI"''Viiioa of thla MRMOU, or tbe c:ondit:ioall 

and undemaad~&p rderelll:ltd &ban.~ 

reau.ll in 1 lenniMtion of thiJ MRMOU.A 

te:rmiDalioa of thil J,mMMOJ uodutb• term• 

thereof will be rornumica~ iD ~and 

a period of time mutaalty aeef1)1a.bJe tuo the 

Authorit)K will be accorded to. permit 

Re~ Penon~ to malr.~other 

att&Dglmellt&. 

Each ~t}l will be I'Up()G&Ib~ for 

mQZ1U.orina. whether the Autboriud cr the 

Rtgittered Pen~on that trt recognized by the 

othll!l" Autbarity, meet the~ al thie 

MRMOU and the Side ~ter.andtrt 

otherwiae in compllance with the re1pectiY~ 

rqu.laiory rqime of et.cb.Astborlty. 

Until the uchaD.se o! le~ olAOI:i&atioD 

referenced In p8111grapb.l ol Articlu Vl ol thit 

MRMOU, the Authoritiu a.ckno.wledp their 

perticipJtiD.n.in • ~for the. rerum to 

the requetted Allthority of the docu.n:aem.. 

aud" any copies thereof. that tuch All1h.o!::ity 

hu dttignated 11 c.oulidmti.t.l inlormJIWIL 

. Article m or thi• MRMOU provldu that tile 

Authoritiea will de~ate coutact officu e.t 

their rnpective agencie1 lo receive aud 

proc:eu ..n requutl. rOl" u~i•t&nl;z 1n 

obtafniD& fnform~tion coucemint lm' 

ovenightand pro~on or their M&rhta and 

t!le protection or Recogniwd Jlti'IClll• CBeuta 

retidlna in their tnpeefiva ~ TU 

Authorlties. hereby duign~te auch contact 

offices " fulttJW~: 

CFTC: Dfvillon of n.dins and Ma:ietl. 

Commodi!J Fatulft Ttadm( Commilliotl. 

zr:m K Street. NW .. Wuhfustun. DC 20S81. 

Tef: (2m) zs.t....a9S5. hx: (2mT zs.+..!S34. 

COB:. Service db Placemenll. C:ommtuion 

· dn Opmtwn. cit> BourN........, Qui 

Ancirt CIAr6eA. 75nl hftl Cl!dn 15. Tek 

('l}4011., 81, Fax: (1) 40 U I!ISCil 

Wendy L. Gramm. 

Chairman. Co.lnmodity Fwww Troding 

"""""""' 11111 s.Int~ 

IAPriMM:Jtm4.~ -~·· --

Att.achmentl: 

u.t of Subject~ ba 17 CFR P.t SO 

Commodi!J"Iu1mn. 

A.ccording}y, 17 a'R pu130 ie 

amet~ded u 14!1 forth below: 

I 
Federal Jitegister I Vol. 55, No. 114 1 Wednesday, June 13, 1990 f Rules and Regu\;atioru 239C9 

PART 30-FOREIGN AITURES AHO 

FOREIGN OPTlON TRAHSACTtOH 

1. The authority citation for pert 30 

contin1.te. to read •• follows: 

Authority: Sea:. Z(a)(l)(A.). 4. 4<", 1nd a. or 

tht Commodity Exdranre Act. 1. U.S.C.t, e, 

lie, aDd 12.l (1S182J. 

%. Apoendix B to part 30 il amended 

bY adding the fallowing entry 

alpbabebailly:. 

Appeodix B-OptKm Coatrads 

Permitted To Be_(}fler.d aDd &oldie the 

u.s. Pun:aaut to I31.8{8J 

,.. __ 

NlttN • (Tot. 

-

r- ~-

~""'••lio:M .. .._ • 

3. Appendix C to part 30 it amend~ 

by adding the following entrr to .ad •• follows: 

Appendix C-Foreign Petmcmm 

Granted Relief From the Application of 

Certain of the Part 30 Rules Pursuant to 

f 30.10 

Authorized Persons 1!11 designated in 

Annex E to Mutual Recognition 

Memorandum of Understanding. 

fR date and citation: -199Ct. 55 

FR_ 

lnued in Wchington. DC. ct1 June 6,1990. 

J.a. A. Webb, 

SecretaJy oj the Commis.sion. 

{FR Doc. 90-13599 Filed 6-12-00; BA-5 am] 

atU.IIIQ CODE 11U·411_.,. 

SECLJRmES AND EXCHANGE 

COMMISSION 

17 CFR Parts 229,230, 239 240 and 

249 • I 

{Ret Noe-33--6867; 3+-2&094; File No. 57-

16-tlj 

RIN 3235-A87'1 

~egbtratlon ltnd Repol'tiog 

Requirement. for Employee Benefit ..... 

AOEHCY: Securities ll!ld Exchange 

Comminion. 

ACTION; Fmal nales. 

SUMMARY: The Commission today 

announced the adoption of rule and 

form amendments to revise registration 

and reporting requirements relating to 

employee benefit plans. The 

amendment• are intended w reduce 

costs and expedite the effectiveness and 

updating of Form 5-e registration 

atatr.menlJ for such plans b)•: (1} 

Streamlining Form 5-8 registration 

Procedurea wider tb.e Securities Act of 

1933: and (2) amending Form U-K under 

the Securities Exchange Act of 1934 to 

eliminate the requirement for the annual 

de1cription of the plan. 

IEFFtC'TlVf: DATE: All amendments are 

effective July 13,1990. Registrants may 

elect to comply with the new rulee on or 

aftl!!' the date .of this relea1e Dune 6, 

1990}. Registrant. electing early 

compliance and .ee1dng immediate 

effectiveness for a regWratian 

statement filed IB.J'ter the zelease date 

Uune &. lQOOJ mtr.st iDclude a statement 

in the lop right comer of.the cover page 

of the Form s-a·registratio.n stat.ement 

requesting that the registration 

statement become automatically 

effect:in upon filing in accordance with 

Rule 462. Failttre 1o include the 

statement will cause the Form S-8 

registration •tatemeot to_ be subject to 

auto.matieeffectivene.u:.z:odays after . 

filing. R~er to Section D.J. af the release 

for detailed information concerning 

transition to the new ru.les under the 

revised regulatory framework. including 

the applicability, U any, to ODgQing 

offerings on Form S-8. 

FOR FUFrn4EA tHFORMATION CONTACT: 

Elizabeth M. Murphy. Barbara C. Smith, 

or James R. Budge, Office of DisdoSW"e 

Policy. Division of Corporation Finance, 

at (202J 272.-Z589, Sccurifiea a.nd 

Exchange Commission, 450 Fifth Street 

NV\1., Washington. DC.23549.Afterthe 

effective date, <:OOlact Mary Anne 

Busse, Office of Chlef Counsel. Divis:ion 

of Corporation Finance. at (ZQ2} 272--

2573. 

SUPPLE.MENTARY tHFOR'NAT10H: The 

Commission is adopting amendments to 

Forms S-8, 1 S-3,• and F-3• under the 

Securities Act of 1933 ('"Securities 

Act");• to Rules 402,5 405.' .{16,1 424[b).• 

457(h),• 472.10 and 47Sa 11 under 

Regulation C of the Securities Act.;tt 

Items 512 '~ 8lld 6011• of Regulation~ 

' 17 011. 23!1.16b. 

' I 17 ~ 2JII.t:l. 

• 17 O'R 2311..33. 

• tsUSC. '17&..,; Hq • 

• ,, CfR ZJ0._4()%. 

•n CFR %30.405. 

• 1? ~ 230.418. 

• 17 CFJ1. Z30.4Z4{b). 

• 17 CFJI. Z30.457!h).. 10 11 CfR ZlQ.47Z. 

II 17 CF'R %.10.47!.1. 

.. 17 CF'R 2.la.~.-­

.. n CF'R lZI.5lZ. 1• n 011. :.;:~~ IIOL 

K;ll and Form 11-K" and Rule tSd- 2111 under the Securitie1 Excba.n.ge Act 

of 1934 {''f:xc:h.anBe Al:q.1 • The 

Commiujon also is adding Rules 428 

and 462 to Regulation C. 

Tab1e of Conteall 

L Executive SW11111al)' 

D. ~dmenb to ~tn.Uon and Rtpc:7rt· 

qReq~ 

A. f'rolpectu. Reqlliranentl 

t. Pll.a Documen\1 CGMiinne· Sectton 

't~a} Plolpec:tw Uacler RniMd 

%. ·~- Leg~ on PJ.&a Dooutea.ta 

S. ldentific;a.tion af Pnrtion. of OocumeDI.t 

_,..,.,. 

Deemed J>art cl Se!;;tiOil l~•l 

4.. Section 11:ta) ~ Docu.a:umt. 

Retrinrdfml'i..-e Yun 

B. UpdatiBs lbe Section tO(a) ProspecttliJ 

C. Sectioft 10(a1 f'rolpeetml Liability 

D..Ddiverr~'-

t. DdMrJ of RePtntnt .lnfu11Ditiaa 

%. Deli"'et)' o/. Sbuehokler ~­

tiont 

E. hgittrltion Statem.eot Require= a 

t. Reviled Fonnsl . 2.. Eliminllion Cl£ N'UJety Day Dl,gl"bllity 

R~mt 

:s. lite -or Form 5-41 fnr Securitm. lrst~ed 

Punu.rrt to Compentatoty G:ln~ 

to Farmer Employees. and 1o Cooau.ltants•nd AdYTton 

F. Ditcktt.ure Reqlolireme11tl 

1. Streamlined P.la.n Oitclo5Ul"l' 

2. Financial Dal.fl Con.cem:ini A!le."Tative 

lnvMtment Uedia 

S. Exhitrit.L Signahiret, and Undertal-

.... G. Rf'offf'r and RHIIlf' Rf'qllil"emuUs 

H. Other f'ropc»f'd .A.oeDdment.t to foms 

.... 

t.. Immediate Eff~rvenets of Fon!:J ~ 

Registration StJternerrts Upon !"ffir1g 

2. Automatic Regmrsti.on of Plan l:lteruu 

:!1. fililts Fee! 

4.. R.qUtratioo of AdditioAal Secwitie.J 

L Form 11-K 

J. Transition to New Syttern 

m Charta Reft«ting Rf"f'itions 

A. R!Msiom to Form S-8 

B. RevUiont to Wormation Delivery Requirement• 

IV. Coat·Benefit A.nalysi~ 

V. Final Regulatory Fiexibility An.aly5i.l 

VI. StatutOl)' Buit !or Rl.lkt at~d F~ 

VIL Text ol tile Alnendtlleota 

L Executive Summary 

The Com.miuion b adopting 

substantial revisions to the procedll1'e8 

for registering employee benefit plan 11 

,. 17 CFJI. :.S.J.O-.Z:i..aaz. 

•• J70'11. 2ALS11 . 

"17 Cf1l. ato..Ud-::1. 

••uu.s.c.,...e~~-

,. ~.,,,.Ad R•~ to5 het t..-flo •~ tc 

define "employee~~ p~~- .. erry ...,.,,.,., 

pom:-.lo .. e ... vin8'1. opuon. bonu•. •ppre<:"~"",..· 

profit aha""'" lhti.ft oncoonhn. ~or .. ,.~., 

pL•norwnllen~ttoac:co~Ao<~«>iorl• lor 

c.--< 

I 
Corrections 

This sectiOn ol 1M FEDERAL REGISTER 

contains editonal oorractions ol previously 

publ1shed Pres1denbal, Rule, Prooosed 

Rule, and Nolloe clocuments. These 

COIT&Ctlons are prepared by the Offtee of 

the Federal Reg1stat. Agency prepared 

CO!Tections are Issued as Signed 

documents and appear In the appropriate 

document categl)ries elsewhere in the 

"'"'· 

DEPARTMENT OF COMMERCE 

Bureau of Export Administration 

15 CFR Part 799 

(Docket No. 1006-46-0 1461 

Establishment of General Ucenn 

GCT; COCOM Trade 

Correction 

In rule document 90-14180 beginning 

on page 25083 in the issue of 

Wednesday, June 20. 1990, make the 

following correction~: 

On page 25089, in the third column, 

the aecond amendatory instruction 

numbered ".Z9" should ~ad "30", and in 

the fifth line, "ECCN 1746A" should read ~'ECCN 1753A''. 

COMMOCITY FUTURES TRADING 

COMMISSION 

17 CFR Part 30 

Foreign Futures and Option 

Transactions 

Correction 

In rule document 90-13599 beginning 

on page 23902 in the issue of 

Wednesday, June 13, 1990, make the 

following corrections: 

1. On page 23903, in the second 

column. in paragraph 1.(0(2) of article 1, 

al the end of the sixth line "the" should 

read "this"'. 

z. On the same page, in !he third 

column, in paragraph 1.["k)(l) of article 1, 

in the first line "Authorizes" should read 

"Authorized". 

3. On page 23904, in the third column. 

in paragraph 6.(b) of article n. at the end 

of the seventh line "or" should read 

"'or·. 

4. On page 23905, in the first column. 

in paragraph S.{c) of article III. in the 

third Une "thereof. in" should read 

"thereof. In". 

5. On the same page, in the third 

column. in paragraph 1.(a) of article IV. 

in the first line "purpose" should read 

"purposes". 

6. On page 23906. in the second 

column. in paragraph 4. of article V, in 

the second line "Recognizing" should 

read "Recognized", 

7. On the same page, in the same 

column. in paragraph 5. of article V, in 

the second line "person" should read 

"Person". 

8. On the same page, in the third 

column. in paragraph 1. of article VI. in 

the third line. "laws" should read 

"Laws". 

9. On page 23907, in the first column. 

in paragraph 11. of article VI, in the 

fourth line, "Recognizing'" should read 

"Recognized". 

10. On page 23908. in the third column, 

in the second complete paragraph, in the 

third line, "Person" should read 

"Persons", 

81~ COO[ 1505-01~ 

Fed•ral Rtgbter 

Vol 55, No. 122 

Monday. June Z5. 11190 

CEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

:J-" 

25925 

(Ooctet Noa. ERto-41f.OOO, et aL] 

Alabama Power Co.. et at.. Electtle 

R11te, SmaU Power Produet/on, and 

Interlocking Directorate FUings 

Correction 

In notice document 90-14191 beginning 

on page 25154 in the lnue or 

Wednesday, June 20,1990, make the 

following correction: 

On page 25154, in the third column. 

under S. Gulf Power Co... the Docket No. 

should read ''ER90-4CJ!Hl00", 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

[Docket Noa. CPto-1417~ et aL] 

ANR Pipeline Co., et al.; Natural Gas 

CertlfleatJon Allngs 

Correction 

In notice document 00.14193 beginning 

on page 25157 in the issue of 

Wednesday, June 20,1990. in the fu-st 

colw:nn, the fourth line should read 

"June 12. 1990." 

I