[Federal Register Volume 65, Number 151 (Friday, August 4, 2000)]
[Rules and Regulations]
[Pages 47843-47847]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19443]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 1

RIN 3038-AB35


Final Rules Concerning Amendments to Insider Trading Regulation

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rulemaking.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'') 
hereby amends Commission Regulation 1.59, which addresses various 
trading prohibitions imposed on persons associated with a self-
regulatory organization (``SRO''). Regulation 1.59 requires SROs to 
adopt rules prohibiting employees, governing board members, and 
committee members from certain trading activities and from improperly 
disclosing any material, non-public

[[Page 47844]]

information obtained in the course of their official duties. The 
Commission is now amending Regulation 1.59 so that governing board 
members and committee members, and individuals serving as the 
``functional equivalent'' of such members, are clearly excluded from 
the definition of ``employee'' for purposes of Regulation 1.59. The 
Commission also takes this opportunity to clarify the meaning of 
Regulation 1.59(b)(1)(i) regarding the scope of the SRO employee 
trading prohibition, and to make clear that ``non-paid advisors'' to 
exchange governing boards and committees will be deemed the 
``functional equivalent'' of whomever they are advising. Finally, the 
Commission has determined to amend Regulation 1.59 so that consultants 
to SROs are, at minimum, subject to the same restrictions as governing 
board members.

EFFECTIVE DATE: December 4, 2000.

FOR FURTHER INFORMATION CONTACT: Joshua R. Marlow, Attorney-Advisor, 
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

    On December 28, 1999, the Commission published proposed amendments 
to Regulation 1.59 (``proposing release''),\1\ which generally requires 
SROs to adopt rules prohibiting employees, governing board members, and 
committee members from trading commodity interests on the basis of 
material, non-public information obtained in the course of their 
official duties (hereinafter referred to as ``material, non-public 
information''). As proposed, the amendments would exclude governing 
board members, and any ``functional equivalent'' thereof, from the 
definition of ``employee,'' and would clarify the scope of the SRO 
employee trading prohibition. The Commission also sought comment on how 
Regulation 1.59 should treat consultants to SRO management and staff, 
in addition to non-paid advisors to SRO governing boards and 
committees. The Commission received 6 comment letters in response to 
the proposed amendments.\2\
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    \1\ See 64 FR 72587 (Dec. 28, 1999).
    \2\ Letters were received from (1) New York Mercantile Exchange, 
(2) National Futures Association (``NFA''), (3) Minneapolis Grain 
Exchange, (4) Chicago Mercantile Exchange (``CME''), (5) Chicago 
Board of Trade (``CBT''), and (6) Board of Trade Clearing 
Corporation (``BOTCC'').
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II. Rule Amendments

A. Background

    Historically, two categories of individuals have been subject to 
Commission Regulation 1.59: (1) SRO employees, including those employed 
by the SRO on a salaried or contract basis, and (2) SRO governing board 
and committee members. Regulation 1.59 prohibits these groups from 
trading under various circumstances.
    Specifically, employees are absolutely prohibited from trading in 
any commodity interest traded on or cleared by their employing contract 
market or clearing organization, or from trading in any ``related 
commodity interest,'' as that term is defined by Regulation 1.59(a).\3\ 
Additionally, employees with access to material, non-public information 
concerning a particular commodity interest are prohibited from trading 
in such commodity interest if it is traded on or cleared by contract 
markets or clearing organizations other than their employing SRO, or 
traded on or cleared by a linked exchange.
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    \3\ ``Related commodity interest means any commodity interest 
which is traded on or subject to the rules of a contract market, 
linked exchange, or other board of trade, exchange or market, other 
than the self-regulatory organization by which a person is employed, 
and with respect to which:
    (i) Such employing self-regulatory organization has recognized 
or established intermarket spread margins or other special margin 
treatment between that other commodity interest and a commodity 
interest which is traded on or subject to the rules of the employing 
self-regulatory organization; or
    (ii) Such other self-regulatory organization has recognized or 
established intermarket spread margins or other special margin 
treatment with another commodity interest as to which the person has 
access to material, nonpublic information.''
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    Governing board members and committee members, on the other hand, 
are prohibited only from using material, non-public information for any 
purpose other than the performance of their official duties. The 
possession of material, non-public information, therefore, does not 
absolutely bar these individuals from trading commodity interests. 
Rather, under Regulation 1.59(d), governing board and committee members 
are prohibited from trading for their own account, or for or on behalf 
of any other account, based on this material, non-public information.

B. Governing Board Members

    The Commission proposed to exclude salaried governing board members 
from the definition of ``employee'' under Regulation 1.59(a) in order 
to ensure that salaried governing board members are not subject to two 
inconsistent trading restrictions--one for governing board members and 
another, more restrictive, prohibition for employees. At the time these 
clauses were adopted, members of governing boards generally were not 
salaried. Because the industry now typically gives stipends to 
governing board members, the Commission proposed to remove any 
confusion by excepting salaried governing board members from the 
definition of ``employee.''
    The Commission believes that inclusion of salaried governing board 
members in the definition of ``employee'' might create disincentives 
for competent individuals to serve in this capacity. If excluded from 
the definition of ``employee,'' governing board members would remain 
prohibited from using material, non-public information for purposes 
other than performance of their official duties, pursuant to Regulation 
1.59(c). All but one commenter supported this amendment,\4\ and the 
Commission has determined to adopt the proposal.
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    \4\ BOTCC did not express an opinion on this issue.
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C. Individuals Serving as the ``Functional Equivalent'' of Governing 
Board Members

    The Commission proposed to add a clause defining the term 
``governing board member'' to include certain individuals who work 
closely with, but who are not technically members of, the governing 
board, like ex officio or emeritus governing board members. The 
proposed language would deem such individuals to be the ``functional 
equivalent'' of governing board members. Because of their experience, 
these members can provide valuable guidance to the governing board. 
However, including them in the definition of ``employee'' would subject 
them to broad restrictions on trading, potentially creating a 
disincentive to counsel the board on matters within their expertise.
    Four commenters supported the proposal, and another expressed its 
support while noting that its board presently does not have any such 
individuals participating.\5\ The Commission has determined to adopt 
the proposal.
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    \5\ See CBT comment letter, January 31, 2000. BOTCC did not 
comment on this issue.
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D. Employees With Access to Material, Non-Public Information Concerning 
Commodity Interests Traded on or Cleared by Other SROs

    Regulation 1.59(b)(1)(i) requires SROs to maintain in effect rules 
which, at a minimum, prohibit employees from trading in the following 
four scenarios:

    In any commodity interest traded on or cleared by the employing 
contract market or

[[Page 47845]]

clearing organization, in any related commodity interest, in any 
commodity interest traded on or cleared by contract markets or 
clearing organizations other than the employing self-regulatory 
organization, and in any commodity interest traded on or cleared by 
a linked exchange where the employee has access to material 
nonpublic information concerning such commodity interest;

Regulation 1.59(b)(1)(i) (emphasis added).

    As discussed in the proposing release, the Commission believes the 
existing structure of this paragraph may create confusion as to which 
trading prohibitions the italicized clause modifies. In particular, 
because no punctuation precedes the clause ``where the employee has 
access to material nonpublic information concerning such commodity 
interest'' (hereinafter referred to as the ``access clause''), this 
precondition for the application of the trading restriction would 
appear to apply to only one trading scenario--the trading scenario that 
immediately precedes it. However, an examination of this provision as 
it existed prior to the 1993 amendments to Regulation 1.59 (``1993 
Amendments''), and of the Federal Register releases promulgating the 
1993 Amendments,\6\ confirms that the access clause should also apply 
to the prohibition on trading ``in any commodity interest traded on or 
cleared by contract markets or clearing organizations other than the 
employing self-regulatory organization.''
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    \6\ See 58 FR 44470 (Aug. 23, 1993); 58 FR 54966 (Oct. 25, 
1993).
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    The Commission has decided to amend Regulation 1.59(b)(1)(i) by 
subdividing each prohibition into a separate subparagraph, as proposed. 
This amendment to paragraph (b)(1)(i) will help differentiate between 
situations in which employees of SROs are absolutely prohibited from 
trading commodity interests from those in which they are prohibited 
from trading only if they have access to material, non-public 
information.
    Toward that end, the Commission has also determined to edit the 
language of the third clause of the paragraph. In the proposing 
release, the Commission suggested adding the access clause back to the 
third prohibition, so that it would read as it was originally intended. 
No commenters disagreed with this proposal. However, it also has come 
to the attention of the Commission that merely inserting the access 
clause at the end of the third prohibition, without further editing, 
might still result in an unclear articulation of the nature of the 
prohibited conduct. The clause, as proposed, would have read:

    From trading, directly or indirectly, in any commodity interest 
traded on or cleared by contract markets or clearing organizations 
other than the employing self-regulatory organization where the 
employee has access to material, nonpublic information concerning 
such commodity interest; and

64 FR 72587, 72590 (Dec. 28, 1999).
    Regulatory history clearly indicates that this clause was only 
meant to prohibit an SRO employee from trading a commodity interest on 
another, non-linked exchange if he or she has access to material, non-
public information about that particular commodity interest. The 
Federal Register release promulgating Regulation 1.59 states 
unequivocally that exchanges may permit their employees to trade 
``unrelated'' commodity interests on other exchanges, if they do not 
have access to material, non-public information.\7\ The original rule 
proposal included an outright ban on employee trading at other 
exchanges,\8\ but the Commission ultimately adopted less restrictive 
rules after receiving comments from the industry.\9\
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    \7\ The word ``unrelated'' refers to ``related commodity 
interest,'' as defined by Regulation 1.59(a). See note 3, supra.
    \8\ See 50 FR 24533 (June 11, 1985).
    \9\ See 51 FR 44866, 44867 (Dec. 12, 1986). ``Commenters 
contended that * * * the provision need not bar employees from 
trading on other contract markets in commodity interests unrelated 
to the employing exchange's products merely because the employee was 
in a position to receive information that is material to activity on 
the employing contract market.'' In response, the Commission wrote: 
``although remaining subject to the strict ban on trading on the 
employing exchange, if the exchange permits, an employee now would 
be able to trade an unrelated commodity interest on another exchange 
where he did not have access to material non-public information 
concerning such commodity interest. The Commission emphasizes that 
the two limiting factors with respect to trading by an employee on 
another exchange are: (1) That the commodity interest by [sic] 
unrelated to any commodity interest traded on the employing 
exchange, and (2) that the employee not have access to material, 
non-public information concerning the commodity interest or a 
related commodity interest.''
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    On its face, however, the third clause could be misconstrued to 
mean that employees are prohibited from trading all commodity interests 
on a non-employing exchange, even if they only have access to material, 
non-public information concerning a single commodity interest traded on 
that exchange. This potential confusion arises out of the meaning of 
the word ``any,'' which connotes a slightly different meaning in the 
two preceding clauses. A reader applying the meaning of ``any'' 
consistently throughout the paragraph, as it is used in the first two 
clauses, might be led to believe that the prohibition extends to all 
contracts at another exchange. The Commission has therefore determined 
to edit the language of this third prohibition to read as follows:

    From trading, directly or indirectly, in a commodity interest 
traded on or cleared by contract markets or clearing organizations 
other than the employing self-regulatory organization if the 
employee has access to material, non-public information concerning 
such commodity interest; \10\
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    \10\ As a result of these changes to the third prohibition, the 
Commission also made non-substantive changes to the language of the 
fourth prohibition--i.e., new Regulation 1.59(b)(1)(i)(D)--for 
purposes of consistency.
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E. Clarification of the Treatment of ``Consultants''

    The Commission requested comment on whether ``consultants'' should 
be included in the definition of ``employee'' for purposes of 
Regulation 1.59, based upon its understanding that exchanges hire 
consultants for a variety of purposes,\11\ often with respect to 
information technology issues. These consultants may or may not gain 
access to material, non-public information during the course of their 
duties, depending on the nature of the work they are performing. 
Although the current provisions do not explicitly include consultants 
within the definition of ``employee,'' the original promulgation of 
Regulation 1.59 in 1986 indicated the Commission's intention that 
consultants be included.\12\ Furthermore, the definition of 
``employee'' under Regulation 1.59(a) clearly states: ``Employee means 
any person hired or otherwise employed on a salaried or contract basis 
by a self-regulatory organization.'' (emphasis added) Although this 
language appears to indicate that consultants fall into the definition 
of ``employee'' under Regulation 1.59, it has recently come to the 
attention of the Commission that some exchanges retain consultants that 
they do not consider ``employees.'' \13\
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    \11\ Barron's Business Guides define a consultant as an 
``individual or organization providing professional advice to an 
organization for a fee. A wide variety of consultants exist for many 
areas of organizational concerns, including management, accounting, 
finance, and legal and technical matters. A consultant is an 
INDEPENDENT CONTRACTOR.'' Barron's Dictionary of Business Terms 120 
(2d ed. 1994) (emphasis in original).
    \12\ 51 FR 44866, 44867 at note 6 (Dec. 12, 1986). ``It should 
be noted that consultants and independent contractors employed by 
the self-regulatory organization would be included within the 
definition of `employee' under regulation 1.59 and, therefore, would 
be subject to the same restrictions applicable to all other exchange 
employees.''
    \13\ See, e.g., BOTCC comment letter, February 10, 2000. ``The 
Clearing Corporation is further concerned by the characterization of 
such persons as `employees', albeit for limited purposes. The 
Clearing Corporation, in its written agreements with consultants, 
takes great care to ensure that such persons may not be deemed to be 
`employees' for any purposes. We believe that the Commission's 
characterization of consultants as `employees' under Regulation 1.59 
undermines this effort.''

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[[Page 47846]]

    The Commission received a wide variety of comments with respect to 
this issue. Three commenters supported the idea of holding consultants 
to the same standard as governing board members, i.e., they shall not 
use or disclose material, non-public information for any purpose other 
than the performance of official duties. NFA added that such a standard 
should apply only if the consultants ``are truly independent 
contractors and are not under the SRO's control.'' \14\ Another 
commenter, BOTCC, stated that most of its consultants do not obtain 
access to material, non-public information, that it does not believe 
any ``purpose is served by requiring such persons to adhere to the 
complex policies that apply to its regular employees,'' and that it 
instead requires its consultants with access to material, non-public 
information to sign confidentiality agreements prohibiting personal use 
of such information.\15\ CME and CBT expressed some support for 
classifying certain consultants as employees, or the ``functional 
equivalent'' thereof, depending on the nature and duration of their 
relationship with the SRO.\16\ CME asserted, however, that consultants 
not subject to an employee-type trading restriction should sign an 
agreement not to use or disclose any material, non-public information 
obtained from its relationship with the SRO. CBT represented that it 
has no effective means of policing these consultants' trading 
activities.
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    \14\ See NFA comment letter, January 25, 2000.
    \15\ See BOTCC comment letter, February 10, 2000.
    \16\ See CME comment letter, January 26, 2000; CBT comment 
letter, January 27, 2000.
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    Based upon comments received, the Commission has determined that 
consultants should, at minimum, be held to the same standard as 
governing board members. This prohibition, more narrow than one which 
would absolutely ban trading in any commodity interest on the 
contracting SRO, is based in large part on commenters' representations 
that most consultants do not gain access to material, non-public 
information during the course of their work. Moreover, the Commission 
acknowledges that the relationship between SROs and their consultants 
is generally more attenuated than their relationship with employees 
and, as a result, policing the trading activity of consultants could be 
difficult for an SRO. Accordingly, the Commission has determined to 
apply a less restrictive trading prohibition that will still establish 
appropriate safeguards against the misuse of material, non-public 
information.
    The Commission believes that, in the first instance, it is the 
SRO's responsibility to distinguish between its ``employees'' and 
``consultants.'' Such determinations should be made consistent with the 
purposes of Regulation 1.59, and should also take into account how the 
SRO distinguishes between employees and consultants for other business 
purposes.\17\ The Commission will review that process in an oversight 
role, as appropriate.
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    \17\ To the extent an SRO outsources a significant function 
which affords access to material, non-public information, the 
persons with such access should be treated as SRO employees, to the 
extent practicable. The Commission intends to address this issue on 
a case-by-case basis and, in the future, will consider whether other 
action is indicated.
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    The Commission reminds SROs that it remains their duty to enforce 
their own rules. In that connection, the Commission suggests that one 
way SROs can ensure consultants do not abuse their access to material, 
non-public information is to require consultants to sign 
confidentiality agreements prohibiting use or disclosure of material, 
non-public information gained as a result of the relationship. As 
previously noted, this is the practice of BOTCC, which was supported by 
CME in its comment letter. Finally, the Commission notes that those 
exchanges desiring greater restrictions on personal trading by 
consultants remain free to enforce stricter procedures.

F. Use of Non-Paid Advisors by Governing Boards and Committees

    The Commission also sought comment on the application of Regulation 
1.59 to non-paid advisors of SRO governing boards and committees, and 
requested information about the extent to which these advisors are 
utilized and their level of participation in deliberations. Such 
individuals have not been subject to Regulation 1.59 requirements. All 
commenters were generally in agreement that non-paid advisors to 
governing boards and committees should not be held to a standard more 
strict than the one applicable to governing board members or committee 
members, and several noted that they do not use such advisors. The 
Commission agrees and has determined that these individuals are the 
``functional equivalent'' of governing board members or committee 
members.

G. Committee Members and the ``Functional Equivalent'' Thereof

    In association with its comments regarding the exclusion of 
governing board members from the definition of ``employee,'' CBT noted 
that it also routinely pays a small fee to non-member panelists of 
disciplinary committees and arbitration panels and asked that the 
Commission also consider excepting ``committee members who are 
compensated by a self-regulatory organization solely for committee 
activities.'' \18\ The Commission has considered this idea and agrees 
that it should be incorporated into final amendments.\19\ These 
individuals often provide valuable advice and counsel, and the 
Commission would like to ensure that the potential disincentive for 
members to serve in this capacity is removed.
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    \18\ See CBT comment letter, January 27, 2000.
    \19\ This change to the final amendments requires adding to 
Regulation 1.59(a) both a definition of ``committee member'' and a 
specific exception to the definition of ``employee,'' for reasons 
consistent with those in sections II.B., II.C., and II.F., supra.
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III. Conclusion

    The Commission believes that these amendments to Regulation 1.59 
clarify existing ambiguities and appropriately adapt to business 
practices and changes in the industry since the regulation was last 
amended. This action is taken pursuant to the Commission's authority 
under Sections 5(7), 8a(5) and 9(f) of the Commodity Exchange Act 
(``Act''). Amendments to Commission Regulation 1.59 will not become 
effective until 120 days after the date of publication, to provide SROs 
time to adopt and submit to the Commission conforming rules. The 
Commission expects SROs to act expeditiously in submitting appropriate 
rules.

IV. Related Matters

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA'') requires that agencies, in 
promulgating rules, consider the impact of those rules on small 
businesses.\20\ The Commission previously has determined that contract 
markets are not ``small entities'' for purposes of the RFA and that the 
Commission, therefore, need not consider the effect of proposed rules 
on contract markets.\21\ Furthermore, the Acting Chairman of the 
Commission previously has certified on behalf of the Commission that 
comparable rule proposals affecting registered futures associations, if 
adopted, would not have a significant

[[Page 47847]]

economic impact on a substantial number of small entities.\22\
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    \20\ 5 U.S.C. 601 et seq. (1994 and Supp. II 1996).
    \21\ See 47 FR 18618, 18619 (Apr. 30, 1982).
    \22\ See 58 FR 13565, 13569 (Mar. 12, 1993).
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    This rulemaking will impact SROs--both contract markets and 
registered futures associations--and their employees, governing board 
members, committee members, and certain independent contractors. The 
Commission previously has determined that the establishment of 
Regulation 1.59, as well as subsequent amendments to the regulation, 
have not created significant economic impact for affected entities or 
persons.\23\
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    \23\ See 47 FR 18618 (Apr. 30, 1982); 50 FR 24533 (June 11, 
1985); 51 FR 44866 (Dec. 12, 1986); 52 FR 32568 (Aug. 28, 1987); 52 
FR 48974 (Dec. 29, 1987); 58 FR 44470 (Aug. 23, 1993); and 58 FR 
54966 (Oct. 25, 1993).
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    The Commission does not believe that these amendments will have a 
significant economic impact on SROs or employees, governing board 
members, committee members, and independent contractors. The new 
amendments merely clarify the existing rule. The obligations and 
prohibitions established by the amendments are essentially the same as 
those created by SRO rules promulgated pursuant to existing Regulation 
1.59.

B. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (``PRA''),\24\ which 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, does not apply to this rule. The 
Commission believes the rule does not contain information collection 
requirements which require the approval of the Office of Management and 
Budget.
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    \24\ 44 U.S.C. 3507(d).
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List of Subjects in 17 CFR Part 1

    Commodity futures, Contract markets, Clearing organizations, 
Members of contract markets.

    In consideration of the foregoing, and based on the authority 
contained in the Commodity Exchange Act and, in particular, Sections 3, 
4b, 5, 5a, 6, 6b, 8, 8a, 9, 17, and 23(b) thereof, 7 U.S.C. 5, 6b, 7, 
7a, 8, 13a, 12, 12a, 13, 21 and 26(b), the Commission hereby amends 
Title 17, Chapter I, Part 1 of the Code of Federal Regulations as 
follows:

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. 2, 2a, 4, 4a, 6, 6a, 6b, 6c, 6d, 6e, 6f, 6g, 
6h, 6i, 6j, 6k, 6l, 6m, 6n, 6o, 7, 7a, 8, 9, 12, 12a, 12c, 13a, 13a-
1, 16, 19, 21, 23, and 24, unless otherwise stated.


    2. Section 1.59 is amended as follows:
    A. The section title is revised.
    B. Paragraphs (a)(3) through (a)(8) are redesignated as paragraphs 
(a)(5) through (a)(10).
    C. Paragraph (a)(2) is redesignated as paragraph (a)(4) and 
revised, and new paragraphs (a)(2) and (a)(3) are added.
    D. Paragraph (b) introductory text, paragraph (b)(1), and paragraph 
(b)(1)(i) are revised.
    E. Paragraphs (c) and (d) are revised.


Sec. 1.59  Activities of self-regulatory organization employees, 
governing board members, committee members, and consultants.

    (a) Definitions. For purposes of this section:
* * * * *
    (2) Governing board member means a member, or functional equivalent 
thereof, of the board of governors of a self-regulatory organization.
    (3) Committee member means a member, or functional equivalent 
thereof, of any committee of a self-regulatory organization.
    (4) Employee means any person hired or otherwise employed on a 
salaried or contract basis by a self-regulatory organization, but does 
not include:
    (i) Any governing board member compensated by a self-regulatory 
organization solely for governing board activities; or
    (ii) Any committee member compensated by a self-regulatory 
organization solely for committee activities; or
    (iii) Any consultant hired by a self-regulatory organization.
* * * * *
    (b) Employees of self-regulatory organizations; Self-regulatory 
organization rules. (1) Each self-regulatory organization must maintain 
in effect rules which have been submitted to the Commission pursuant to 
Section 5a(a)(12)(A) of the Act and Sec. 1.41 (or, pursuant to section 
17(j) of the Act in the case of a registered futures association) that, 
at a minimum, prohibit:
    (i) Employees of the self-regulatory organization from:
    (A) Trading, directly or indirectly, in any commodity interest 
traded on or cleared by the employing contract market or clearing 
organization;
    (B) Trading, directly or indirectly, in any related commodity 
interest;
    (C) Trading, directly or indirectly, in a commodity interest traded 
on or cleared by contract markets or clearing organizations other than 
the employing self-regulatory organization if the employee has access 
to material, non-public information concerning such commodity interest;
    (D) Trading, directly or indirectly, in a commodity interest traded 
on or cleared by a linked exchange if the employee has access to 
material, non-public information concerning such commodity interest; 
and
* * * * *
    (c) Governing board members, committee members, and consultants; 
Self-regulatory organization rules. Each self-regulatory organization 
must maintain in effect rules which have been submitted to the 
Commission pursuant to Section 5a(a)(12)(A) of the Act and Sec. 1.41 
(or, pursuant to Section 17(j) of the Act in the case of a registered 
futures association) which provide that no governing board member, 
committee member, or consultant shall use or disclose--for any purpose 
other than the performance of official duties as a governing board 
member, committee member, or consultant--material, non-public 
information obtained as a result of the performance of such person's 
official duties.
    (d) Prohibited conduct. (1) No employee, governing board member, 
committee member, or consultant shall:
    (i) Trade for such person's own account, or for or on behalf of any 
other account, in any commodity interest, on the basis of any material, 
non-public information obtained through special access related to the 
performance of such person's official duties as an employee, governing 
board member, committee member, or consultant; or
    (ii) Disclose for any purpose inconsistent with the performance of 
such person's official duties as an employee, governing board member, 
committee member, or consultant any material, non-public information 
obtained through special access related to the performance of such 
duties.
    (2) No person shall trade for such person's own account, or for or 
on behalf of any other account, in any commodity interest, on the basis 
of any material, non-public information that such person knows was 
obtained in violation of paragraph (d)(1) of this section from an 
employee, governing board member, committee member, or consultant.

    Issued in Washington, DC, on July 27, 2000 by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 00-19443 Filed 8-3-00; 8:45 am]
BILLING CODE 6351-01-P