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iiiCMEGroup ~~ 

C.F.T.C. 

OFFICE OF THE SECRETARIAT 

Debra K. Kokal 

Director 

ACME/Chicago Board of Trade Company Audit Department 

March 19, 2009 

Mr. David Stawick 

Secretary of the Commission 

Commodity Futures Trading Commission 

Three Lafayette Centre 

1155 21st Street, NW 

Washington. DC 20581 

secreta ry@cftc. g ov 

RE: RIN 3038-AC72 

2009 APR 7 Pf'l 3 03 

COMMENT 

Received CFTC 

Records Section 

f?/Jr 

Acknowledgment Letters for Customer Funds and Secured Amount Funds 

Dear Mr. Stawick: 

The Joint Audit Committee ("JAC") appreciates the oppor:tunity to comment on the proposed 

changes to the regulations regarding acknowledgment letters "for customer. funds and secured 

amounts .. ' . . . . . . . ·· .... ·. . . . .. . . . .. · ... 

. ·.. :· .. -~ ~ .. 

Recent events. have·tested two lon~fstanding assurn.ptloris surrounding customer accoUhts' that 

are properly" titled and covered· by proper ackn-owledgme'nt letters. (1) that such funds· wpuld be 

immediately· released or transferred when. requested by the. depositing futures commission 

merchant ("FCM"), and (2) that such accounts would not be subject to any right of offset, or lien, 

on account of any indebtedness, obligations or liabilities owed by the FCM. As a result, the JAC 

applauds and fully supports the Commodity Futures Trading Commission's ("Commission") 

desire to strengthen both the segregation and secured amount acknowledgment letters. 

The JAC fully endorses the proposed rules which would require depositories to explicitly 

recognize, within the acknowledgment letter, the authority of the Commission, as well as the 

FCM or the Derivatives Clearing Organization ("DCO"), as applicable, to direct the 

transfer/release of customer funds carried in accounts covered by a properly executed 

acknowledgment letter. In matters where time is of the essence, the Commission should hold 

all powers necessary to protect customer funds and the proposed rules strengthen that ability. 

We do believe a significant change for the FCM community will be the move away from a broad 

based, non-acco1.1nt specific, acknowledgment letter to the new proposed requirement of an 

acknowledgment letter that must include the account number for each account covered. The 

Commission has· proposed that the effective date of the amendments would be 180 days from 

the date of publication of the final regulations in the Federal Register based on its understanding 

that FCMs' will need time to· update their.-: existing acknowledgment letters.· However, the 

proposal does not address an acceptable time frame for subsequent changes that would require 

amending a given acknowledgment letter (e.g., name change of FCM or depository, merger of 

FCM or depository, addition or deletion ofaccount number): As history demonstrates, a myriad 

20 South Wacker Drive Chicago, Illinois 60606 T 312 930 3235 F 312 930 3242 debbie.kokal@cmegroup.com cmegroup.com 
.... Mr. David Stawick 

March 19, 2009 

Page 2 

of these changes routinely occur. Therefore, the JAC respectfully requests guidance regarding 

the circumstances that would necessitate updating acknowledgment letters as well as 

acceptable timeframes for the updating of such letters due to such future events. 

In addition, the proposed rules would require an FCM to file properly executed 

acknowledgement letters with the firm's regional office of the Commission. In addition, although 

the Commission is proposing requiring submission of segregated and secured acknowledgment 

letters, no supporting documentation (i.e., documentation necessary for verification) is being 

required. As a result, the benefit of submitting such acknowledgment letters to the Commission 

is unclear. 

Finally, the FCM community has long appreciated the fact that under Commission Regulations 

1.20 and 1.26, acknowledgment letters need not be obtained from DCOs that have adopted and 

submitted to the Commission rules that provide for the segregation of customer funds in 

accordance with the Commodity Exchange Act ("CEA"). Consistent with those regulations, the 

JAC requests that the Commission amend Regulation 30.7 to provide similar relief that would 

exempt DCOs from having to provide secured funds acknowledgment letters if they follow the 

requirements of the CEA. 

In sum, we believe that the Commission's proposals to strengthen the acknowledgment letters 

for customer funds and secured amounts will enhance the regulatory certainty of such letters 

when it is most needed. We appreciate the Commission's efforts in this regard. 

The JAC appreciates the opportunity to comment on the CFTC's proposed changes to 

acknowledgment letters for customer funds and secured amounts. We would be happy to 

discuss any of these issues with Commission staff. If you have any questions or comments, 

please feel free to contact me at (312) 930-3235 or debbie.kokal@cmegroup.com. 

On Behalf of the Joint Audit Committee, 

Debra K. Kokal 

Chairman 

cc: Tom Smith, Deputy Director, Audit and Financial Review 

20 South Wacker Drive Chicago. Illinois 60606 T312 9301000 F312 466 4410 cmegroup.com