[Federal Register Volume 68, Number 173 (Monday, September 8, 2003)]
[Rules and Regulations]
[Pages 52836-52837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-22755]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 4

RIN 3038-AB97


Additional Registration and Other Regulatory Relief for Commodity 
Pool Operators and Commodity Trading Advisors; Past Performance Issues; 
Correction

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rules; correction.

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SUMMARY: The Commodity Futures Trading Commission (Commission) 
published in the Federal Register of August 8, 2003, a document 
providing additional relief for certain persons excluded from the 
commodity pool operator (CPO) definition, providing

[[Page 52837]]

exemptions from registration as a CPO or commodity trading advisor 
(CTA), and facilitating communications by CPOs and CTAs (Final Rules). 
This document contains corrections to the final rules.

DATES: Effective September 8, 2003.

FOR FURTHER INFORMATION CONTACT: Barbara S. Gold, Associate Director, 
or Christopher W. Cummings, Special Counsel, Division of Clearing and 
Intermediary Oversight, Commodity Futures Trading Commission, 1155 21st 
Street, NW., Washington, DC 20581, telephone numbers: (202) 418-5450 or 
(202) 418-5445, respectively; facsimile number: (202) 418-5528; and 
electronic mail: [email protected] or [email protected], respectively.

SUPPLEMENTARY INFORMATION: The Commission published the Final Rules in 
the Federal Register of August 8, 2003 (68 FR 47221). The Final Rules 
affect CPOs and CTAs and persons excluded or exempted from registering 
as such. As published, however, the Final Rules contain errors that may 
be misleading and need clarification. In addition to correcting 
typographical errors and clarifying certain rules referenced in 
Appendix A, as is discussed below, the Commission is clarifying the 
right of redemption of a pool participant and the right of termination 
of a CTA client.
    Rules 4.13(b)(2) and 4.14(a)(8)(iii)(B), respectively, address the 
situation where a CPO qualifies for exemption from registration in 
connection with all of the pools it operates or a CTA qualifies for 
exemption from registration in connection with providing advice to all 
of its clients. In such a situation, these rules provide that where a 
registered CPO or CTA intends to claim the exemption and to withdraw 
from registration, the CPO or CTA must, among other things, provide 
pool participants or advisory clients with a right of redemption or 
right of termination, as the case may be.
    Rules 4.13(e)(2) and 4.14(c)(2), respectively, address the 
situation where a registered CPO qualifies for exemption from 
registration in connection with some of the pools it operates or a 
registered CTA qualifies for exemption from registration in connection 
with providing advice to some of the clients it advises. In such a 
situation, these rules provide that the CPO or CTA may treat the pools 
or clients for which it would otherwise qualify for exemption from 
registration as if it were in fact exempt from registration.
    The Commission is clarifying that where a CPO or CTA seeks relief, 
all pool participants and clients have the same right to redemption or 
termination regardless of whether their CPO or CTA (1) intends to 
withdraw from registration (the first situation discussed above), or 
(2) remains registered and treats them as if the CPO or CTA had in fact 
withdrawn from registration (the second situation discussed above). 
Thus, the Commission is clarifying that, regardless of registration 
status, the obligations of the CPO or CTA to pool participants or 
clients are the same in this context.

0
In rule FR Doc. 03-20094 published on August 8, 2003, 68 FR 47221, make 
the following corrections:
0
1. On page 47233, in the first column, in Sec.  4.13(e)(2)(i)(B), in 
the third line, delete the word ``and'' and in paragraph (e)(2)(ii), in 
the second line, delete ``.'' and insert ``; and'' and add new 
paragraph (e)(2)(iii) to read as follows:


Sec.  4.13  Exemption from registration as a commodity pool operator.

* * * * *
    (e) * * *
    (2) * * *
    (iii) Provides to each existing participant in a pool that the 
person elects to operate as described in paragraph (a)(3) or (a)(4) of 
this section a right to redeem the participant's interest in the pool, 
and informs each such participant of that right no later than the time 
the person commences to operate the pool as described in paragraph 
(a)(3) or (a)(4) of this section.
* * * * *


Sec.  4.14  [Corrected]

0
2. On the same page, in the third column, in Sec.  
4.14(a)(8)(iii)(A)(2), in the third and fourth lines, ``(i.e., Sec.  
4.14(a)(8)(i) or (a)(8)(ii), or both (a)(8)(i) and (a)(8)(ii))'' is 
corrected to read ``(i.e., under Sec.  4.14(a)(8)(i))''.

0
3. On page 47234, in the third column in paragraph (c)(2), in the 
eleventh line, before the period, insert the following text: ``; 
Provided Further, That the person provides to each existing client 
described in paragraph (a) of this section a right to terminate its 
advisory agreement, and informs such client of that right no later than 
the time the person commences to provide commodity interest trading 
advice to the client as if the person was exempt from registration''.


Sec.  4.22  [Corrected]

0
4. On page 47235, in the first column, in Sec.  4.22(c), in the ninth 
line, the word ``on'' is corrected to read ``of''.

0
5. On the same page, in the second column, paragraph (j) introductory 
text is redesignated as (j)(1), paragraphs (j)(A) and (B) are 
redesignated as (j)(1)(i) and (ii) respectively, and paragraph (j)(ii) 
is redesignated as paragraph (j)(2).

Appendix A to Part 4--[Corrected]

0
6. On page 47236, in the second column, in the first paragraph 
``Application,'' in the last line, ``Rule 4.13(a)(3)'' is corrected to 
read ``Rule 4.13(a)(3)(ii)(A).''

0
7. On the same page, in the second column, in paragraph ``3. 
Situation,'' in the seventh line, and in the next paragraph 
``Application,'' in the last line, ``Rule 4.13(a)(3)(i)(A)'' is 
corrected to read ``Rule 4.13(a)(3)(ii)(A)'' in each instance.

0
8. On the same page, in the third column, in the paragraph 
``Application,'' in the fifth line and in the seventh line, ``Rule 
4.13(a)(3)(i)'' is corrected to read ``Rule 4.13(a)(3)(ii)'' in each 
instance.

    Issued in Washington, DC, on September 2, 2003 by the 
Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 03-22755 Filed 9-5-03; 8:45 am]
BILLING CODE 6351-01-P