[Federal Register Volume 59, Number 143 (Wednesday, July 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18159]


[[Page Unknown]]

[Federal Register: July 27, 1994]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 1

 

Risk Disclosure by Futures Commission Merchants, Introducing 
Brokers, Commodity Pool Operators and Commodity Trading Advisors to 
Customers

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'' or 
``CFTC'') is amending Appendix A of CFTC rule 1.55(c) adopted by the 
Commission on June 28, 1994, to identify the United Kingdom and Ireland 
as additional jurisdictions whose relevant regulatory authorities have 
adopted the generic risk disclosure statement for specified products. 
This order is issued pursuant to the Commission's recent rulemaking 
amending, among other provisions, CFTC rule 1.55(c), 59 FR 34376 (July 
5, 1994), to permit registrants to deliver to customers a two-page 
generic risk disclosure statement that may be used to satisfy the 
CFTC's risk disclosure requirements applicable to domestic and foreign 
commodity futures and commodity options, and which also is intended to 
satisfy the risk disclosure requirements of certain foreign 
jurisdictions. The Commission noted that it would on a periodic basis, 
update the listing of those jurisdictions that accept the generic risk 
disclosure document as meeting specified disclosure requirements.

EFFECTIVE DATE: July 27, 1994.

FOR FURTHER INFORMATION CONTACT: Jane C. Kang, Esq., Division of 
Trading and Markets, Commodity Futures Trading Commission, 2033 K 
Street, NW, Washington, D.C. 20581; telephone (202) 254-8955.

SUPPLEMENTARY INFORMATION:

Background

    On June 28, 1994 the Commission amended rules 1.55(c), 33.7(a) and 
190.10(c) to permit registrants to deliver to customers a generic risk 
disclosure statement contained in new Appendix A of CFTC rule 1.55(c), 
which satisfies risk disclosure statement requirements contained in 
CFTC rules 1.55(b), 33.7(b) and 190.10(c) as well as the special 
disclosure requirement related to futures-style margining of the 
options premium permitted on certain foreign exchanges. As the generic 
statement was developed in cooperation with various international 
regulators and is intended to satisfy the risk disclosure requirements 
of certain foreign jurisdictions who have implemented the language of 
this risk disclosure statement in their jurisdictions in accordance 
with their domestic law, Appendix A specifies those jurisdictions that 
permit the use of the generic risk disclosure statement and the 
products for which the statement may be used. The CFTC noted that it 
would amend Appendix A on a periodic basis to provide updated 
information in this regard.
    Subsequent to the publication of the generic risk disclosure 
statement in the Federal Register, the United Kingdom Securities and 
Futures Authority (``SFA'') and the Central Bank of Ireland (``CBI'') 
on July 11, 1994 confirmed the conclusion of applicable national 
procedures to permit the statement to be used to satisfy relevant risk 
disclosure obligations within their jurisdictions. The generic risk 
disclosure statement addresses, in the case of members of the United 
Kingdom SFA, commodity futures, options on commodity futures, options 
on commodities and options on securities, and in the case of members of 
exchanges whose rules have been approved by the CBI, financial futures 
and options on financial futures. Accordingly, the CFTC is amending 
Appendix A to reflect the addition of the United Kingdom and Republic 
of Ireland as jurisdictions in which the generic risk disclosure 
statement may be used to satisfy relevant risk disclosure requirements 
for the products specified.
    Finally, the Commission is clarifying the entry for the United 
States in Appendix A to conform the text in the entry to the text of 
the Federal Register preamble.

List of Subjects in 17 CFR Part 1

    Commodity futures, Domestic exchange-traded commodity option 
transactions.
    Accordingly, 17 CFR Part 1 is amended as set forth below:

PART 1--GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT

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

    Authority: 7 U.S.C. 1a, 2, 2a, 4, 4a, 6, 6a, 6b, 6c, 6d, 6e, 6f, 
6g, 6h, 6i, 6j, 6k, 6l, 6m, 6n, 6o, 6p, 7, 7a, 7b, 8, 9, 12, 12a, 
12c, 13a, 13a-1, 16, 16a, 19, 21, 23 and 24.

    2. Appendix A to Sec. 1.55(c) is amended by revising the entry for 
the ``United States'' which follows the text of the generic risk 
disclosure statement to read as set forth below, and by adding the 
following entries, after the ``United States'' entry:


Sec. 1.55  Distribution of ``Risk Disclosure Statement'' by futures 
commission merchants and introducing brokers.

* * * * *
    (c) * * *

Appendix A to CFTC Rule 1.55(c)--Generic Risk Disclosure Statement

    Risk Disclosure Statement for Futures and Options.
* * * * *
    United States: commodity futures, options on commodity futures 
and options on commodities subject to the Commodity Exchange Act.
    United Kingdom: futures, options on futures, options on 
commodities and options on equities traded by members of the United 
Kingdom Securities and Futures Authority pursuant to the Financial 
Services Act, 1986.
    Ireland: financial futures and options on financial futures 
traded by members of futures exchanges on exchanges whose rules have 
been approved by the Central Bank of Ireland under Chapter VIII of 
the Central Bank Act, 1989.
* * * * *
    Issued in Washington, D.C. on July 20, 1994 by the Commission.
Jean A. Webb,
 Secretary of the Commission.
[FR Doc. 94-18159 Filed 7-26-94; 8:45 am]
BILLING CODE 6351-01-P