[Federal Register Volume 61, Number 88 (Monday, May 6, 1996)]
[Rules and Regulations]
[Pages 20127-20132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10730]



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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 3


Ethics Training for Registrants

AGENCY: Commodity Futures Trading Commission.
ACTION: Final rules.

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SUMMARY: On December 14, 1995, the Commodity Futures Trading Commission 
(Commission or CFTC) published for comment proposed amendments to 
Sec. 3.34, which governs

[[Page 20128]]

ethics training for Commission registrants. These amendments require 
ethics training providers, who have not already been authorized by the 
Commission to provide ethics training, to pass the Series 3 
Examination, the standard industry proficiency test, and possess three 
years of relevant experience. The rule is now also applicable to state-
accredited entities, which in the past were exempt from certain 
requirements.

EFFECTIVE DATE: These rule amendments will become effective June 5, 
1996. However, with respect to state-accredited persons or entities 
providing ethics training pursuant to Sec. 3.34 as of March 29, 1996, 
the applicable date shall be August 6, 1996.

FOR FURTHER INFORMATION CONTACT: Lawrence B. Patent, Associate Chief 
Counsel or Myra R. Silberstein, Attorney-Advisor, Division of Trading 
and Markets, 1155 21st Street, NW., Washington, DC 20581. Telephone 
(202) 418-5450.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 210 of the Futures Trading Practices Act of 1992 added a 
new paragraph (b) to Section 4p of the Commodity Exchange Act (Act) to 
mandate ethics training for persons required to be registered under the 
Act.<SUP>1 On April 6, 1993, the Commission adopted Rule 3.34 to 
implement this Congressional mandate.<SUP>2 Rule 3.34 requires natural 
persons registered under the Act to attend ethics training to ensure 
that they understand their responsibilities to the public under the 
Act. The required training must address the requirements of the Act and 
relevant rules concerning the treatment and handling of customer orders 
and business. Issues to be addressed may include: Honesty, fairness and 
the interests of customers and the integrity of the markets; effective 
supervisory systems and controls; assessment of financial circumstances 
and investment experience of customers; disclosure of material 
information; and avoidance of conflicts of interest.
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    \1\ This provision of the Act is codified at 7 U.S.C. 6p(b) 
(1994) and states that:
    The Commission shall issue regulations to require new 
registrants, within 6 months after receiving such registration, to 
attend a training session, and all other registrants to attend 
periodic training sessions, to ensure that registrants understand 
their responsibilities to the public under this Act, including 
responsibilities to observe just and equitable principles of trade, 
any rule or regulation of the Commission, any rule of any 
appropriate contract market, registered futures association, or 
other self-regulatory organization, or any other applicable Federal 
or state law, rule or regulation.
    \2\ 58 FR 19575, 19584-19587, 19593-19594 (Apr. 15, 1993). In 
September, 1993, the Commission issued a Federal Register release to 
clarify the procedures to be followed by persons seeking to provide 
ethics training pursuant to Rule 3.34. 58 FR 47890 (Sept. 13, 1993).
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    New registrants must attend ethics training within six months of 
being granted registration and every three years thereafter. The 
initial training is required to be at least four hours in duration; 
subsequent training must be at least one hour in duration. Persons 
registered when Rule 3.34 became effective on April 26, 1993 were 
granted until April 26, 1996 to attend an initial training session of 
at least two hours in duration and thereafter to attend a one-hour 
session every three years. Ethics trainers must maintain records of 
materials used in such training and of attendees at such training.
    In December 1995, the Commission adopted amendments to Rule 3.34 to 
enhance the operation of the ethics training program and furnish 
additional guidance with respect to the activities of ethics training 
providers.<SUP>3 These amendments, which became effective on January 
12, 1996, require, among other things, that a person seeking to provide 
ethics training certify that he is not subject to a statutory 
disqualification from registration under the Act,<SUP>4 barred from 
service on self-regulatory organization (SRO) governing boards or 
committees,<SUP>5 or subject to a pending proceeding concerning 
possible violations of the Act or rules or orders promulgated 
thereunder.<SUP>6 Also in December 1995, the Commission published 
proposals for further amendments to Rule 3.34 which would require that 
persons who seek to provide ethics training: (1) present satisfactory 
evidence of successful completion of proficiency testing requirements 
established by a registered futures association; and (2) possess a 
minimum of three years of relevant experience. The Commission also 
proposed to amend Rule 3.34 to eliminate the provision permitting 
state-accredited entities to provide ethics training without compliance 
with the requirements applicable to other providers under the 
rule.<SUP>7
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    \3\ 60 FR 63907 (Dec. 13, 1995).
    \4\ 7 U.S.C. 12a(2) and (3)(1994). The Act specifies several 
grounds for disqualification from registration including, among 
others, a prior revocation of registration, felony conviction, and 
an injunction relating to futures or securities activities.
    \5\ No person may serve on SRO governing boards or committees 
who, among other things, has been found within the prior three years 
to have committed a ``disciplinary offense'' or entered into a 
settlement agreement with respect to a charge involving a 
``disciplinary offense,'' is currently suspended from trading on any 
contract market, is suspended or expelled from membership in any 
SRO, or is currently subject to an agreement with the Commission or 
an SRO not to apply for registration or membership. A ``disciplinary 
offense'' for these purposes means any violation of the Act or the 
rules promulgated thereunder or SRO rules other than those relating 
to: (1) Decorum or attire; (2) financial requirements; or (3) 
reporting or recordkeeping, unless resulting in fines aggregating 
more than $5,000 in a calendar year, provided such SRO rule 
violations did not involve fraud, deceit or conversion, or result in 
a suspension or expulsion. 17 CFR 1.63 (1995).
    \6\ See Commission Rule 3.34(b)(3), 60 FR 63907, 63912.
    \7\ 60 FR 64132 (Dec. 14, 1995).
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    The Commission received five comment letters on the proposed rule 
amendments. The commenters included a registered futures association, 
an SRO and three ethics training providers. The commenters generally 
supported the objectives of the proposed rule amendments, but some 
commenters recommended modifications of the proposals. Comments 
addressed to specific provisions of the proposed rule amendments and 
the Commission's resolution of the issues raised therein are discussed 
below in the context of the relevant rule provision.
    Based upon its review of the comments received and in light of its 
experience in administering this program, the Commission has adopted, 
substantially in the form proposed, the amendments to Rule 3.34 
regarding ethics training providers published in December 1995. The 
amendments adopted herein will require any person other than an SRO 
seeking to provide ethics training to meet a proficiency testing 
requirement and possess a minimum of three years of relevant 
experience. These amendments have been adopted generally as proposed, 
with certain clarifications based upon the Commission's review of the 
comments received. The provisions of the rule relating to the topics to 
be covered in ethics training and the minimum requirements for 
attendance by registrants at such training remain unchanged.

II. Amendments to Commission Rule 3.34

A. Proficiency Testing and Minimum Experience Requirements

    Currently, Rule 3.34 requires that any person seeking to provide 
ethics training to registrants under Rule 3.34, other than an SRO or a 
state-accredited entity, certify to a registered futures association 
that such person, any principals thereof (as defined in Commission Rule 
3.1(a)) <SUP>8 and any individuals who, on behalf of such person, 
present ethics training or prepare ethics training videotapes or 
electronic presentations are not subject

[[Page 20129]]

to: (1) Statutory disqualification from registration under Sections 8a 
(2) or (3) of the Act; (2) a bar from service on SRO governing boards 
or committees based upon disciplinary histories pursuant to Commission 
Rule 1.63 or any SRO rule adopted thereunder; and (3) a pending 
adjudicatory proceeding under Sections 6(c), 6(d), or 9 of the Act, or 
similar proceeding under Section 8a of the Act, or Commission Rules 
3.55, 3.56 or 3.60. If the person intends to conduct training via 
videotape or electronic presentation, he must also certify that he will 
maintain documentation reasonably designed to verify attendance of 
registrants at such presentations for the minimum time required. These 
certifications are continuous; thus, if circumstances change which 
result in the certification becoming inaccurate, the ethics training 
provider must promptly so inform the registered futures association 
which, upon being so notified, shall refuse to include in, or shall 
remove such person from, the list of ethics training providers.<SUP>9
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    \8\ 17 CFR 3.1(a) (1995).
    \9\ Commission Rule 3.34(b)(3), 60 FR 63907, 63912.
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    The amendments to Rule 3.34 proposed in December 1995 would require 
any person seeking to provide ethics training (other than an SRO) to 
furnish satisfactory evidence to a registered futures association that 
he has met the proficiency testing requirement established by a 
registered futures association pursuant to Section 17(p)(1) of the Act 
for the registration of commodity professionals <SUP>10 and possesses 
three years of relevant experience. Currently, the National Commodity 
Futures Examination (Series 3 Exam) is the proficiency test required to 
be completed by most commodity professionals.<SUP>11
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    \10\ Section 17(p)(1) of the Act, 7 U.S.C. 21(p)(1)(1994), 
provides, in part, that a registered futures association must 
establish training standards and proficiency testing for persons 
involved in the solicitation of transactions subject to the Act, 
supervisors of such persons, and all persons for whom it has 
registration responsibilities.
    \11\ See NFA Registration Rule 401.
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    The proficiency requirement, coupled with a three-year experience 
requirement, provides an even-handed, objective basis for assuring a 
minimum level of expertise. Further, such standards are compatible with 
the method used by the Commission to date in reviewing applications 
from potential offerors of ethics training. As the Commission noted in 
proposing the original Rule 3.34, ``pedagogical expertise and knowledge 
of futures are factors that should be taken into consideration in 
evaluating potential offerors of ethics training.'' <SUP>12 
Consequently, in reviewing applications filed under Rule 3.34 by 
persons seeking to provide ethics training, the Commission has 
endeavored to assure that such providers demonstrate pedagogical 
experience and knowledge of the futures markets.
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    \12\ 58 FR 19575, 19586.
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    In commenting on these proposed amendments, the National Futures 
Association (NFA) stated that it fully supports the concept of 
requiring ethics training providers to meet objective and readily 
measurable standards of proficiency. NFA reiterated its view, expressed 
initially in commenting upon the amendments to Rule 3.34 in December 
1995, that it is imperative that these standards assure that ethics 
training providers possess a working knowledge of the futures industry 
and relevant regulations. NFA expressed its belief that satisfactory 
completion of the Series 3 Exam, in conjunction with three years of 
relevant experience, generally will achieve this end.
    Two commenters suggested that persons having certain types of 
experience, e.g., former CFTC Commissioners or non-compensated 
instructors, should be automatically exempted from the proficiency 
testing requirement. One commenter expressed concern that the proposed 
amendments would exclude attorneys who have practiced extensively in 
this field but who would be unwilling to incur the time and expense 
associated with taking the Series 3 Exam. This commenter recommended an 
alternative proficiency requirement to the Series 3 Exam based upon 
representations that the proposed provider is not subject to a 
statutory disqualification, is a member in good standing of a state bar 
association and: (1) Was a CFTC Commissioner or staff attorney or SRO 
staff attorney for at least two years; (2) has taught a futures course 
at an accredited university or law school for at least two years; or 
(3) has had a law practice consisting of at least thirty percent 
futures work over the previous three years. A second commenter proposed 
that the Commission exempt from the proficiency testing requirement 
experienced new instructors who participate in ethics training programs 
previously authorized by the Commission. This commenter suggested that 
such an exemption could be limited, so as not to detract from 
achievement of the objective of assuring effective, high quality ethics 
training, to instructors who: (1) Co-instruct with at least one other 
instructor who has passed the Series 3 Exam; (2) possess qualifications 
similar to those instructors previously participating as ethics 
training providers; (3) are not compensated; and (4) meet minimum 
experience requirements. The commenter supported such an exemption as a 
means of assuring a healthy influx of additional qualified instructors. 
This commenter noted that its pro bono instructors are highly 
experienced in-house counsel and compliance officers of future 
commission merchants, commodity pool operators and commodity trading 
advisors and attorneys specializing in financial services law and 
regulation who have been very effective instructors of ethics training.
    The Commission believes that requiring persons who seek to provide 
ethics training to provide proof of satisfactory completion of a 
proficiency testing requirement and of three years of relevant industry 
or pedagogical experience provide objective, readily administered 
standards for determining knowledge of relevant matters, compliance 
with which should not be unduly burdensome.<SUP>13 Compliance with the 
proficiency test requirements applicable to registrants is an 
appropriate benchmark for a minimum level of knowledge of relevant 
statutory and rule requirements.<SUP>14 However, the Commission 
appreciates that the proficiency requirement may be unduly restrictive 
in some cases and believes that this requirement can be implemented 
with sufficient flexibility to permit highly qualified instructors, at 
least those providing services on a pro bono basis, to participate in 
ethics training programs with providers who

[[Page 20130]]

have passed the Series 3 Exam. Such service is itself in furtherance of 
the public interest and established ethical precepts, and the 
Commission believes that alternative indicia of experience can be 
relied upon in such cases.
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    \13\ One commenter suggested that the minimum experience 
requirement be two years rather than three, because two years 
corresponds to the minimum experience required by NFA before APs of 
member futures commission merchants and introducing brokers are 
permitted to exercise discretion over accounts. See NFA Rule 2-8(d). 
However, the Commission believes that the special responsibilities 
of ethics training instructors warrant a three-year minimum 
experience requirement.
    \14\ The Commission believes that the Series 3 Exam is the only 
relevant proficiency test currently available for ethics training 
providers, since it is the proficiency test that is generally 
applicable to Commission registrants and is designed to assure a 
broad working knowledge of the futures industry. Although the 
Commission recently approved an alternative proficiency testing 
requirement under which general securities representatives whose 
commodity interest activity will be limited to managed accounts or 
commodity pool interests may take the Futures Managed Funds 
Examination (Series 31 Exam) in lieu of the Series 3 Exam, the 
Commission believes that even if an ethics training provider wishes 
to instruct only commodity pool operators, commodity trading 
advisors and their associated persons (APs), the more comprehensive 
based Series 3 Exam is the appropriate proficiency test.
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    The Commission therefore believes that it would be appropriate for 
NFA, in establishing proficiency standards, to create either on a case-
by-case or generic basis, a waiver of the proficiency test requirement 
in appropriate cases, where the proposed instructors would serve 
without compensation and have qualifications that evidence expertise at 
least comparable to that provided by successful completion of the 
Series 3 Exam. Such an exception might appropriately be granted in 
circumstances in which the person: (1) Co-instructs with at least one 
other instructor who has passed the Series 3 Exam; (2) meets the 
minimum experience requirements and has experience in financial 
services law and regulation; and (3) is acting on a pro bono basis, 
i.e., without compensation other than reimbursement for travel 
expenses. The Commission contemplates that NFA may grant other 
exemptions from the proficiency test requirement in special 
circumstances, such as where a scheduled instructor becomes 
unavailable.<SUP>15
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    \15\ NFA Rule 402 permits NFA's Vice-President of Compliance to 
waive the general proficiency requirements under circumstances 
approved by NFA's Board of Directors. See also NFA Interpretive 
Notices under Rule 402 at para.9018 and para.9022.
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    The Commission intends that the requirement of three years of 
relevant experience may be satisfied not only by pedagogical experience 
but, also, by relevant industry experience. For example, such industry 
experience might be acquired through legal practice in the fields of 
futures or securities or employment as a compliance officer or risk 
manager at a brokerage or end-user firm. NFA suggests in its comment 
letter that guidelines, rather than an itemized list of acceptable 
positions, be provided to address the types of experience that would be 
acceptable for this purpose. Such guidelines could include examples of 
acceptable relevant experience, such as those suggested by the 
Commission, but would not preclude satisfaction of the relevant 
experience requirement by other means. NFA (or the Commission if it 
chose to retain that responsibility) would have the discretion to 
determine whether a potential provider had demonstrated the relevant 
experience.<SUP>16
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    \16\ NFA noted that it employs a similar approach under NFA 
Compliance Rule 2-8. Rule 2-8 requires NFA associates who exercise 
discretion over customer accounts to have been registered for two 
years. NFA may, at its discretion, waive this requirement if the 
associate shows that he has equivalent experience. Although 
``equivalent experience'' is not defined in the rule, NFA has 
encountered no difficulties in administering this rule.
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    NFA expressed its willingness to establish experience re-quirements 
but requested confirmation that the Commission intends that it do so. 
The Commission believes that it is appropriate for NFA to promulgate 
rules establishing experience and proficiency standards for ethics 
training providers, subject to the general standards set forth in Rule 
3.34.<SUP>17 The Commission hereby delegates authority to NFA to 
promulgate rules establishing experience and proficiency standards for 
ethics training providers. Such standards may consist of guidelines 
consistent with the views set forth herein.<SUP>18
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    \17\ 60 FR 64132, 64133.
    \18\ Of course, NFA's rules must be submitted to the Commission 
for review pursuant to Section 17(j) of the Act, which governs 
Commission review and approval of registered futures association 
rules. 7 U.S.C. 21(j) (1994).
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B. Applicability of Certification, Proficiency Testing and Experience 
Requirements

    Rule 3.34 requires that any provider of ethics training, other than 
an SRO offering ethics training to its members or employees or an 
entity accredited to conduct continuing education programs by a state 
professional licensing authority in the fields of law, finance, 
accounting or economics, file the certification referred to above in 
order to be included on a list of ethics training providers maintained 
by a registered futures association. In December 1995, the Commission 
proposed to amend Rule 3.34 to eliminate the provision permitting 
state-accredited entities to provide ethics training without compliance 
with the requirements applicable to other providers under the rule.
    The Commission received one comment letter addressing this aspect 
of the proposals. The commenter, an SRO, supported the proposal to 
impose proficiency testing and experience requirements upon ethics 
training providers other than SROs, even if they are state-accredited 
entities. The SRO stated that until now almost all exchange members 
received their ethics training from the exchange itself. While the SRO 
believes that most members will continue to attend ethics training 
provided by the exchange, a greater number of exchange members may 
choose to enroll in ethics training programs offered by providers other 
than the SRO as a result of the December 1995 amendments to Rule 3.34 
which may increase the availability of videotape and electronic ethics 
training programs. Therefore, the SRO expressed a strong interest in 
assuring that non-SRO providers have the necessary knowledge and 
experience to provide such training.<SUP>19
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    \19\ The SRO commenter also recommended an additional amendment 
of Rule 3.34(b)(4) to require that ethics training providers submit 
records of ethics training attendance by floor traders and floor 
brokers to the contract markets that have granted them trading 
privileges as well as to NFA. The Commission adopted an amendment to 
Rule 3.34(b)(4) in December 1995 to require ethics training 
providers to furnish records of attendees at such training to a 
registered futures association but did not propose further 
amendments to this provision. 60 FR 63907, 63911-63912. While the 
Commission is generally supportive of contract markets receiving 
ethics training records on floor traders and floor brokers to whom 
they have granted trading privileges, the Commission does not 
believe that an additional amendment to Rule 3.34(b)(4) is necessary 
to achieve that end. Contract markets may encourage or require their 
own floor trader and floor broker members to provide satisfactory 
proof of satisfactory completion of the ethics training 
requirements. Further, the Commission encourages ethics training 
providers instructing floor traders and floor brokers to provide 
this information to the relevant contract markets.
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    The Commission is adopting as proposed an amendment to Rule 3.34 to 
require that state-accredited entities file with the NFA the 
certification required under Rule 3.34(b)(3)(iii) and comply with the 
other relevant provisions of Rule 3.34, including proficiency testing 
and experience requirements. In the absence of such compliance and in 
light of the potential for significant variations among state-
accreditation regimes, the Commission would have no ready means of 
assuring that such providers have a minimum level of relevant knowledge 
or experience.<SUP>20
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    \20\ As to whether SROs themselves should be subject to the 
requirements applicable to other providers under 3.34, the 
Commission believes that the business purposes and functions of 
SROs, the statutory and regulatory requirements applicable to SROs, 
and the Commission's oversight program for assuring compliance by 
SROs with their responsibilities under the Act and Commission rules 
provide sufficient assurance of the expertise and fitness of SROs as 
ethics training providers without the necessity for imposing 
additional requirements. Consequently, the Commission's proposals 
with respect to proficiency training and pedagogical or industry 
experience did not apply to SROs seeking to provide ethics training 
to their members or employees. 60 FR 64132, 64134.
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    The Commission proposed that the proficiency testing and minimum 
experience requirements apply to the provider or sponsor of the ethics 
training program, to any instructors or presenters employed by the 
provider of such ethics training, and to those persons who prepare 
ethics training videotapes or electronic presentations. NFA expressed 
concern that the rule as proposed appeared to require that the ethics 
training provider itself, which in many instances would be a corporate

[[Page 20131]]

entity, meet the proficiency and experience requirements. NFA 
recommended that the Commission clarify this aspect of the rule to make 
clear that the persons who will be required to meet these standards 
include the principals of the ethics training provider, any instructors 
or presenters employed by the provider and persons who prepare ethics 
training materials, including videotaped and electronic presentations. 
NFA also recommended that only those principals of registered firms 
that offer in-house ethics training who are directly involved with the 
ethics training process be required to meet the proficiency and 
experience requirements, noting that it would serve no purpose to 
require all principals of a registered firm to comply with these 
requirements.
    The Commission agrees that clarification of the applicability of 
the testing and experience requirements is desirable and that these 
requirements should not apply to all principals of registered firms. 
The Commission believes that the proficiency testing and experience 
requirements should apply to persons who are direct participants in 
ethics training, whether as presenters of such programs, preparers of 
course materials, or supervisors of such activities. Consequently, the 
Commission believes that unlike the required representations concerning 
fitness, which apply to all principals of the ethics training provider, 
the testing and experience requirements should not apply solely by 
virtue of status as a principal, but, rather, should be applicable 
based upon involvement in such programs as instructors, developers, 
supervisors or managers of such programs.
    A person who is currently acting as an instructor or course 
preparer for an ethics training provider whose application to provide 
ethics training has previously been granted by the Commission will not 
be subject to the proficiency testing and minimum relevant experience 
standards of Rule 3.34. However, should such an ethics training 
provider seek to add a new instructor or course preparer, such person 
would be subject to the proficiency testing and minimum relevant 
experience standards. Persons acting as instructors or presenters of 
in-person ethics training or preparing videotapes or electronic 
presentations on behalf of a state-accredited entity must meet the 
proficiency and experience requirements, even if such persons have 
previously been operating under Rule 3.34. However, for existing ethics 
training providers operating as of March 29, 1996 pursuant to the 
former Rule 3.34 provision permitting certain state-accredited entities 
to provide ethics training without further authorization, the effective 
date for these rule amendments will be deferred for 60 days to allow 
adequate time for filing the requisite certification and to take and 
pass the Series 3 Exam.

III. Related Matters

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-611 (1994), 
requires that agencies, in proposing rules, consider the impact of 
those rules on small businesses. The rule amendments discussed herein 
will not affect SROs who wish to provide ethics training but would 
affect all others who seek to be included on a list of authorized 
ethics training providers, including entities accredited to conduct 
continuing education programs by state professional licensing 
authorities in the fields of law, finance, accounting or economics. The 
impact of this proposal on persons seeking to become providers of 
ethics training should be minimal. At this time, a one-time processing 
fee for the Series 3 Exam offered by the NFA is $75.00. This should not 
constitute an unduly burdensome entry cost for ethics training 
providers; the same cost is incurred by all the attendees at ethics 
training as a cost of registration. Requiring a minimum level of 
experience also should not adversely impact small businesses as this 
requirement should not impose additional financial cost upon such 
entities. Further, the ethics training requirement, reflects a 
Congressional mandate to assure that registrants understand their 
responsibilities to the public under the Act. Therefore, these rule 
amendments will not have a significant economic impact on a substantial 
number of small entities.

B. Paperwork Reduction Act

    The Paperwork Reduction Act of 1980 (PRA), 44 U.S.C. 3501 et seq., 
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. In compliance with the 
PRA, the Commission has previously submitted the proposed rule and its 
associated information collection requirements to the Office of 
Management and Budget. While the amendments proposed herein have no 
burden, Rule 3.34 is a part of a group of rules which has the following 
burden:
    Rules 3.16, 3.32 and 3.34 (3038-0023, approved June 2, 1993):
    Average Burden Hours Per Response: 1.13.
    Number of Respondents: 60,980.
    Frequency of Response: On Occasion and Triennially.
    Persons wishing to comment on the information which will be 
required by these rules as amended should contact Jeff Hill, Office of 
Management and Budget, Room 3228, NEOB, Washington, D.C. 20503, (202) 
395-7340. Copies of the information collection submission to OMB are 
available from Joe F. Mink, CFTC Clearance Officer, 1155 21st St. NW, 
Washington, DC 20581, (202) 418-5170.

List of Subjects in 17 CFR Part 3

    Registration, Ethics Training.

    Accordingly, the Commission, pursuant to the authority contained in 
the Commodity Exchange Act and, in particular, sections 1a, 4d, 4e, 4g, 
4m, 4p, 8a and 17 thereof (7 U.S.C. 1a, 6d, 6e, 6g, 6m, 6p, 12a and 21 
(1994), hereby amends Part 3 of Chapter I of Title 17 of the Code of 
Federal Regulations as follows:

PART 3--REGISTRATION

    1. The authority citation for part 3 continues to read as follows:

    Authority: 7 U.S.C. la, 2, 4, 4a, 6, 6b, 6d, 6e, 6f, 6g, 6h, 6i, 
6k, 6m, 6o, 6p, 8, 9, 9a, 12, 12a, 13b, 13c, 16a, 18, 19, 21 and 23; 
5 U.S.C. 552, 552b.

    2. Section 3.34 is amended by removing and reserving paragraph 
(b)(3)(ii) and revising the introductory text of paragraph (b)(3)(iii) 
and paragraph (b)(3)(iii)(A)(3) to read as follows:


Sec. 3.34  Mandatory ethics training for registrants.

* * * * *
    (b) * * *
    (3) * * *
    (ii) [Reserved]
    (iii) A person included on a list maintained by a registered 
futures association who has presented satisfactory evidence to the 
registered futures association that any individuals, on behalf of such 
person, who present ethics training, prepare an ethics training 
videotape or electronic presentation, or who supervise the foregoing, 
have taken and passed the proficiency testing requirements for an 
ethics training provider, as established by rules of a registered 
futures association that have been approved by the Commission, and 
possess a minimum of three years of relevant experience for an ethics 
training

[[Page 20132]]

provider, as established by rules of a registered futures association 
that have been approved by the Commission, and who certifies that:
    (A) * * *
    (3) A pending adjudicatory proceeding under sections 6(c), 6(d), 
6c, 6d, or 9 of the Act, or similar proceeding under Section 8a of the 
Act, or Secs. 3.55, 3.56, or 3.60; and
* * * * *
    Issued in Washington, DC on April 25, 1996, by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 96-10730 Filed 5-3-96; 8:45 am]
BILLING CODE 6351-01-P