[Federal Register Volume 66, Number 121 (Friday, June 22, 2001)]
[Notices]
[Pages 33531-33532]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15435]


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COMMODITY FUTURES TRADING COMMISSION


Study of the Commodity Exchange Act and Rules Thereunder

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of solicitation of comments.

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SUMMARY: The Commodity Futures Trading Commission (Commission) is 
soliciting comments to assist it in conducting a study of the Commodity 
Exchange Act (Act) and the Commission's rules and orders governing the 
conduct of registrants under the Act, as mandated by Section 125 of the 
Commodity Futures Modernization Act of 2000 (CFMA). That provision 
requires that the Commission, in conducting the study, solicit the 
views of the public, Commission registrants, registered entities and 
registered futures associations, and that an analysis of

[[Page 33532]]

comments received be included in the report of the results of the study 
to the Commission's Congressional oversight committees.

DATES: Comments must be received by August 21, 2001.

ADDRESSES: Comments may be sent to Jean A. Webb, Secretary of the 
Commission, Commodity Futures Trading Commission, Three Lafayette 
Centre, 1155 21st Street, NW., Washington, DC 20581. In addition, 
comments may be sent by facsimile transmission to (202) 418-5521, or by 
electronic mail to [email protected]. Reference should be made to 
``Intermediaries Study.''

FOR FURTHER INFORMATION CONTACT: Lawrence B. Patent, Associate Chief 
Counsel, or Barbara S. Gold, Assistant Chief Counsel, Division of 
Trading and Markets, Commodity Futures Trading Commission, Three 
Layfayette Centre, 1155 21st Street NW., Washington, DC 20581. Mr. 
Patent may be reached by telephone at (202) 418-5439 or by electronic 
mail at [email protected] and Ms. Gold may be reached by telephone at 
(202) 418-5450 or by electronic mail at [email protected].

SUPPLEMENTARY INFORMATION: The CFMA, enacted last December as part of 
the Consolidated Appropriations Act, 2001 (Public Law No. 106-554, 114 
Stat. 2763), requires the Commission to conduct a study of the Act and 
the Commission's rules and orders governing the conduct of persons 
required to register under the Act.\1\ The study must address: (1) The 
core principles and interpretations of acceptable business practices 
that the Commission has adopted or intends to adopt to replace 
provisions of the Act and rules thereunder, and the extent to which 
these changes have been or may be made pursuant to the Commission's 
exemptive authority under Section 4(c) of the Act; (2) the rules that 
the Commission has determined must be retained and the reasons 
therefor; and (3) the regulatory functions that the Commission performs 
that can be delegated to a registered futures association and the 
regulatory functions that the Commission has determined must be 
retained and the reasons therefor. In conducting the study, the 
Commission must solicit the views of the public as well as Commission 
registrants, registered entitles,\2\ and registered futures 
associations. The study must be completed by December 21, 2001 (which 
is one year from the date of enactment of the CFMA) and a report of the 
results of the study, including an analysis of comments received, must 
be transmitted to the Commission's Congressional oversight committees, 
the Committee on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition and Forestry of the Senate. The 
Commission is publishing this notice of solicitation of comments to 
assist it in conducting the study.
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    \1\ Section 125 of the CFMA. Persons required to register under 
the Act include futures commission merchants, introducing brokers, 
commodity pool operators (CPOs), commodity trading advisors (CTAs), 
associated persons of any of the foregoing, floor brokers and floor 
traders. Those terms are defined in Section 1a(20), 1a(23), 1a(5), 
1a(6), 4k, 1a(16) and 1a(17), respectively, of the Act, as amended 
by the CFMA.
    \2\ The definition of term ``registered entities'' was added to 
the Act by the CFMA as new Section 1a(29) and includes designated 
contract markets, registered derivatives transaction execution 
facilities, and registered derivatives clearing organizations. 
Designated contracts markets may include registered national 
securities exchanges, registered national securities associations, 
and alternative trading systems whose only futures-related activity 
involves security futures product. See Section 252(a) of the CFMA, 
adding a new Section 5f to the Act.
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    Persons wishing to comment should organize their comments as 
follows: (1) Identify by section number, rule number, or Federal 
Register citation the particular provision of the Act, the Commission's 
rules, or the Commission's orders, respectively, upon which comment is 
being provided; (2) indicate whether that provision should be (a) 
amended, (b) revoked without replacement, (c) revoked and replaced with 
a core principle and statement of acceptable business practices, or (d) 
retained; (3) include the proposed text of any suggested amendment or 
core principle and statement of acceptable business practices; (4) 
include a brief discussion in support of the suggested action and 
describe any problems encountered in complying with the existing 
relevant statutory and regulatory framework; (5) indicate, if 
applicable, whether the suggested change may be made pursuant to the 
Commission's exemptive authority in Section 4(c) of the Act; and (6) 
identify any regulatory functions that the Commission performs that can 
be delegated to a registered futures association and include a brief 
discussion to support such a delegation.
    Because of the potential for conflicting comments, it would aid the 
Commission's analysis if commenters also indicated the relative 
importance of proposed changes. This can be done by ranking them in 
priority order or, at least, by categorizing them in some fashion, 
e.g., high priority, medium priority, and low priority.
    Commenters should be aware that the Commission intends, as it has 
stated previously, to repropose and readopt those provisions of the New 
Regulatory Framework relating to intermediaries that were adopted and 
then withdrawn last year that are not affected by the CFMA, with any 
necessary technical, conforming changes. These new rules and rule 
amendments address, among other things, the definition of the term 
``principal,'' the addition of a principal, certified financial 
reports, ethics training, disclosure, account opening procedures, 
trading standards, reporting requirements, and offsetting positions.\3\ 
Commenters should also be aware that the Commission has already 
delegated to a registered futures association certain functions 
concerning registration processing and statutory disqualification, 
financial monitoring and auditing, review of sales practices, review of 
CPO and CTA Disclosure Documents, and matters related to foreign 
futures and options.
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    \3\ 66 FR 14262, 14267-68 (March 9, 2001); see also 65 FR 77993 
(Dec. 13, 2000).
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    Commenters are reminded that all comments will be available for 
public inspection and copying and will be posted on the Commission's 
website, www.cftc.gov. The Commission also requests that any commenter 
that is a Commission registrant identify itself as such and include its 
registration category. Following a review of comments received, the 
Commission or its staff may conduct follow-up discussions with 
interested parties.

    Issued by the Commission in Washington, DC on June 13, 2001.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 01-15435 Filed 6-21-01; 8:45 am]
BILLING CODE 6351-01-M