February 20, 2009 

Mr. David Stawick 

Secretary 

i~. C: C ::_ : '.f E i:J 

r:_F.T.C. 

Commodity Futures Trading Commission 

1155 21st Street, N.W. 

Washington, D.C. 20581 

Received C~C 

R~r~' Section 

Ol(c:J-3( or 

Futures Industry Association 

2001 Pennsylvania Ave. NW 

Suite 600 

Washington, DC 20006-1823 

202.466.5460 

202.296.3184 fax 

www .futuresindustry .org 

COMMENT 

Re: Comment Letter on Regulatory Governance; Conflicts oflnterest in Self-Regulation and 

Self-Regulatory Organizations (74 Fed. Reg. 3475 (Jan. 21, 2009) 

Dear Mr. Stawick: 

The Futures Industry Association is pleased to comment on the above-referenced proposed 

amendments to the Commission's Acceptable Practice for Core Principle 15 which the 

Commission previously adopted on January 31, 2007. FIA is a principal spokesman for the 

commodity futures and options industry. Our regular membership is comprised of30 of the 

largest futures commission merchants in the United States. Among our associate members are 

representatives from virtually all other segments of the futures industry, both national and 

international. Reflecting the scope and diversity of its membership, FIA estimates that its 

members serve as brokers for more than ninety percent of all customer transactions executed on 

United States contract markets. 

FIA supports the Commission's proposed amendments and the Acceptable Practice for Core 

Principle 15. This Acceptable Practice provides a safe harbor for compliance with the statutory 

core principle on conflicts of interest found at Section 5(d)(15) of the Commodity Exchange Act. 

As the Commission has noted, a central feature of this Acceptable Practice is the standard that 

Public Directors should comprise 35% ofthe members of a Designated Contract Market's Board 

of Directors. 

FIA has long championed efforts to remove even the perception of conflicts of interest on DCM 

Boards (and Regulatory Oversight, as well as Disciplinary, Committees) through increased 

reliance on Public Directors. In FIA's view, it is vitally important that DCMs include a 

significant number of Board Members that are recognized to be independent of the DCM and its 

members. While we and others might quibble with the 35% level of Public Directors (we think it 

should be higher), no one could fairly contest the Commission's definition of a public director as 

someone with no material relationship with the DCM. As the Commission's Acceptable Practice 

makes plain, any potential director with a relationship to the DCM or its members that could 

affect the independent judgment ofthat director should not be a public director. One of the best 

features of the Acceptable Practice is that it calls for a DCM's Board to certify in writing why it 

believes every one of its Public Directors satisfies the no material relationship test. 
Mr. David Stawick 

February 20, 2009 

Page2 

The Commission's proposed amendments list those relationships the Commission fmds to be 

automatically disqualifying for those being considered to be public directors. FIA knows the 

Commission has devoted considerable effort to developing these disqualifiers. Again, FIA might 

recommend expanding the list in some areas or restricting it in others, but overall we believe the 

Commission has proposed a workable and effective set of automatically disqualifying 

relationships. We urge the Commission to adopt these amendments quickly and to make its 

Acceptable Practice effective as soon as practicable. 

The Commission and its staff have worked long hours for many years on this rule making. FIA 

congratulates the Commission for its diligent and thoughtful approach to this issue. FIA believes 

the Acceptable Practice for Core Principle# 15 will achieve its goal of strengthening selfregulation in the futures industry consistent with the public interest. We look forward to the 

adoption of the proposed amendments and the implementation of the Acceptable Practice. 

Sincerely, 

John M. Damgard 

President