[Federal Register Volume 61, Number 188 (Thursday, September 26, 1996)]
[Rules and Regulations]
[Pages 50431-50432]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24726]


=======================================================================
-----------------------------------------------------------------------

COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 1


Correction of Trading Records

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule clarification.

-----------------------------------------------------------------------

SUMMARY: On June 6, 1996, the Commodity Futures Trading Commission 
(``Commission'' or ``CFTS'') published a proposed rule amendment to its 
regulation to clarify a procedure specified for the correction of 
erroneous information on trading cards and to make that procedure 
applicable to other trading records.\1\ After consideration of comments 
received, the Commission published a final rule amendment on August 20, 
1996.\2\ One comment letter inadvertently was not mentioned in that 
release.

    \1\ 61 FR 28806 (June 6, 1996).
    \2\ 61 FR 42999 (August 20, 1996).
---------------------------------------------------------------------------

EFFECTIVE DATE: The final rule will become effective October 21, 1996.

FOR FURTHER INFORMATION CONTACT:
Duane C. Andresen, Special Counsel, Division of Trading and Markets, 
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 
Street, NW., Washington, DC 20581. Telephone: (202) 418-5490.

SUPPLEMENTARY INFORMATION: 

I. Introduction

    The Commission amended Commission Regulation 1.35(d)(7), which 
addresses the preparation, submission and correction of trading cards, 
to make its provisions applicable to all trading records. The 
Commission also amended the error correction procedures in paragraph 
(d)(7)(ii) to state that a member may correct any errors by crossing 
out erroneous information without obliterating or otherwise making 
illegible any of the originally recorded information. The Commission 
further amended paragraph (d)(7)(ii) to require that when errors on a 
trading card are corrected by rewriting the trading card, the member 
must submit a ply of the trading card, or in the absence of plies the 
original trading card, that is subsequently rewritten in accordance 
with contract market rules

[[Page 50432]]

which set forth the required collection schedule for trading cards.

II. Comment Received

    The comment letter not previously addressed was received from the 
Chicago Board of Trade (``CBT''). Many of the CBT's concerns were 
mentioned by other commenters and were considered prior to publication 
of the final rule amendment. Those concerns that were not specifically 
addressed are discussed below.

A. Applicability

    In its comment letter, the CBT stated that it is unclear what the 
Commission means by ``trading records prepared for `flashed' orders'' 
and, further, that the amendment should not be applicable to broker 
cards, which resemble trading cards and are used on a temporary basis 
until a broker or his broker assistant has an opportunity to formally 
endorse a written order ticket. The CBT stated that such cards are not 
required to be used and not relied upon as an original source document 
for clearing purposes. The CBT also stated that the amendment should 
not be applicable to desk clerks recording customers' order 
instructions.
    The provisions of the amendment are applicable to trading records 
prepared by a member of a contract market pursuant to contract market 
rules. Thus, the provisions would be applicable to such trading records 
as broker cards prepared for ``flashed'' orders if the broker cards 
were prepared pursuant to contract market rules.\3\
---------------------------------------------------------------------------

    \3\ For example, the amendment's provisions would be applicable 
to broker cards prepared pursuant to the CBT's Notice: Documentation 
Required to Comply with CFTC's Order Regarding Immediately 
Executable Flashed Orders, submitted for Commission review by letter 
dated August 5, 1996.
---------------------------------------------------------------------------

    With regard to desk clerks recording customers' order instructions, 
the provisions of the amendment are specifically applicable to order 
tickets prepared under Regulation 1.35(a-1) (2), (3) or (4) or received 
on the floor through electronic order routing systems. Desk clerks 
correcting order instructions on the original order would be required 
to correct the erroneous information, or reflect changed instructions 
received from the customer, without obliterating or otherwise making 
illegible any of the originally recorded information.

B. Trading Card Provision

    The Commission specifically requested comment regarding the trading 
card provision that permits correction of erroneous information by 
rewriting the trading card. The CBT stated that the provision should be 
retained, since members remain accountable for trading cards which are 
subsequently rewritten.
    The Commission determined to retain the provision that permits the 
correction of erroneous information on trading cards by rewriting the 
trading card. However, the Commission amended paragraph (d)(7)(ii) to 
add the requirement that the member must submit a ply of the trading 
card, or in the absence of plies the original trading card, that 
subsequently is rewritten in accordance with contract market rules 
which set forth the required collection schedule for trading cards.

III. Conclusion

    The Commission has carefully reviewed and considered this comment 
and believes that the commenter's concerns have been addressed.

    Issued in Washington, DC, on September 20, 1996 by the 
Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 96-24726 Filed 9-25-96; 8:45 am]
BILLING CODE 6351-01-M