[The Regulatory Plan and Unified Agenda of Federal Regulations]
[Commodity Futures Trading Commission Regulatory Plan]
[From the U.S. Government Printing Office, www.gpo.gov]


COMMODITY FUTURES TRADING COMMISSION (CFTC)
Statement of Regulatory Priorities
The regulatory objectives of the Commodity Futures Trading Commission 
are to ensure that the commodity futures and option markets remain 
competitive and respond to underlying supply and demand factors by 
detecting and preventing threats of price manipulation, abusive trading 
practices, fraud and other market disruptions, safeguarding the 
financial soundness of those markets, and providing for appropriate 
customer protection of those who trade on those markets. Futures 
markets that are free of manipulation and other anticompetitive forces 
can most effectively perform their vital economic functions of price 
discovery and risk transfer. To these ends, the Commission's objectives 
include protection of customer funds, ensuring the financial integrity 
of regulated intermediaries, and protection of customers from abusive 
trade practices.
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CFTC
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PROPOSED RULE STAGE
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196. PROHIBITION ON VOTING BY INTERESTED MEMBERS
Legal Authority:


 7 USC 7a(17) (Supp IV 1992)


CFR Citation:


 17 CFR 1.67


Legal Deadline:


None


Abstract:


The regulation will implement the provisions of section 217 of the 
Futures Trading Practices Act of 1992 which require contract markets to 
adopt rules to avoid conflicts of interest in deliberations and voting 
by members of the governing board and disciplinary and other oversight 
committees. The rulemaking will define the relationships between a 
named party in interest and a member of the governing board or 
committee which would require abstention from deliberations and voting. 
The rulemaking also will provide guidelines on situations which would 
require a member to abstain from voting on a significant action because 
of a substantial financial interest in the outcome of the vote based on 
positions held personally or at an affiliated firm, as well as other 
matters addressed by the statute. The action will potentially impact 
the selection and composition of contract market governing boards and 
committees.


Statement of Need:





The regulation will implement the provisions of section 217 of the 
Futures Trading Practices Act of 1992 which require contract markets to 
adopt rules to avoid conflicts of interest in deliberations and voting 
by members of the governing board and disciplinary and other oversight 
committees. The rulemaking will define the relationships between a 
named party in interest and a member of the governing board or 
committee which would require abstention from deliberations and voting. 
The rulemaking also will provide guidelines on situations which would 
require a member to abstain from voting on a significant action because 
of a substantial financial interest in the outcome of the vote based on 
positions held personally or at an affiliated firm, as well as other 
matters addressed by the statute. The action will potentially impact 
the selection and composition of contract market governing boards and 
committees. This rulemaking will further the regulatory objective of 
oversight of contract markets so as to assure that the markets remain 
open, competitive and efficient.


Alternatives:





These rules are required by statutory mandate set forth in the Futures 
Trading Practices Act of 1992. The Commission intends to pursue this 
rulemaking to achieve rules that will fulfill this statutory mandate in 
a cost-effective manner.


Anticipated Costs and Benefits:





As a financial regulator, the Commission is acutely aware of the costs 
of regulation. Throughout its history, the Commission has taken into 
account the costs of its proposed regulations in order to ensure that 
the benefits of its regulations outweigh the costs. To date, we know of 
no Commission regulation that adversely affected small entities as 
defined under the Regulatory Flexibility Act, 5 U.S.C. 601-611 (1988).


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           12/00/94
NPRM Comment Period End                                        01/00/95
Final Action                                                   04/00/95
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Linda Kurjan
Special Counsel
Division of Trading and Markets
Commodity Futures Trading Commission
2033 K Street NW.
Washington, DC 20581
202 254-8955
RIN: 3038-AB03
_______________________________________________________________________
CFTC
            ___________________________________________________________
FINAL RULE STAGE
            ___________________________________________________________
197. REVIEW OF COMMISSION DISCLOSURE REQUIREMENTS CONCERNING COMMODITY 
POOL OPERATORS
Legal Authority:


 7 USC 2; 7 USC 6b; 7 USC 6c; 7 USC 6l; 7 USC 6m; 7 USC 6n; 7 USC 6o; 7 
USC 12a


CFR Citation:


 17 CFR 4.21; 17 CFR 4.31; 17 CFR 4.10


Legal Deadline:


None


Abstract:


The Commission will review its requirements concerning disclosure 
materials to be provided pool participants and customers of commodity 
trading advisors with a view toward simplifying the disclosure process, 
reducing any unnecessary burdens, and harmonizing the Commission's 
disclosure requirements with those of other domestic and international 
regulators.


Statement of Need:





The proposed amendments reflect the Commission's experience in applying 
the disclosure requirements set forth in part 4 of the Commission's 
rules and significant evolution in the purposes, structure and 
activities of the managed funds marketplace. These proposed 
modifications of the CPO and CTA disclosure framework are designed to 
achieve greater simplicity, focus and clarity in performance history 
presentations; streamlining of other required disclosures; and a more 
concise and readable format for disclosure documents. They are intended 
to further regulatory priorities by ensuring that full disclosure is 
made to customers while reducing unnecessary burdens upon commodity 
pool operators and commodity trading advisors and simplifying the 
disclosure process for all participants.


Based upon more than fifteen years of experience with administering the 
part 4 disclosure framework for CPOs and CTAs, the Commission has 
undertaken a comprehensive review of the disclosure requirements for 
CPOs and CTAs to identify areas in which the regulatory structure can 
be streamlined or simplified, while continuing to provide appropriate 
customer protection. The amendments have three major purposes: (1) 
simplification of past performance disclosures; (2) reduction of 
required disclosures as to matters of secondary relevance, such as 
litigation history, business background and conflicts of interest; and 
(3) clarification and modernization of various requirements. Disclosure 
documents would be required to contain a table of contents. General 
information concerning the pool, including the break-even point, would 
be required to be set forth in the forepart of the document. The number 
and content of various previously required bold-face ``boilerplate'' 
cautionary statements would be reduced and all information voluntarily 
provided would be required to follow the relevant required disclosures.


Alternatives:





Changes are also proposed to generally facilitate pool offerings, 
particularly with respect to areas of overlap or potential 
inconsistency with Securities and Exchange Commission (SEC) rules. 
Thus, under the revisions, CPOs may update pool disclosure documents 
every 9 months, consistent with SEC requirements, rather than every 6 
months, as under current CFTC rules. In addition, CPOs may provide 
accredited investors with a notice of intended offering and term sheet, 
prior to delivery of a disclosure document.


Similar changes are proposed to be made to the requirements applicable 
to CTA disclosure documents.


Anticipated Costs and Benefits:


As a financial regulator, the Commission is acutely aware of the costs 
of regulation. Throughout its history, the Commission has taken into 
account the costs of its proposed regulations in order to ensure that 
the benefits of its regulations outweigh the costs. To date, we know of 
no Commission regulation that adversely affected small entities as 
defined under the Regulatory Flexibility Act, 5. U.S.C. 601-611 (1988).


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            59 FR 25351                                    05/16/94
NPRM Comment Period End                                        08/17/94
Final Action                                                   01/00/95
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Barbara S. Gold
Assistant Chief Counsel
Division of Trading and Markets
Commodity Futures Trading Commission
2033 K Street NW.
Washington, DC 20581
202 254-8955
RIN: 3038-AA74
_______________________________________________________________________
CFTC
198. RISK ASSESSMENT FOR HOLDING COMPANY SYSTEMS
Legal Authority:


 7 USC 6f(c) (Supp IV 1992)


CFR Citation:


 17 CFR 1.14; 17 CFR 1.15


Legal Deadline:


None


Abstract:


The Commission is proposing risk assessment regulations which would 
require futures commission merchants(1) to provide reports to the 
Commission regarding the activities of affiliated persons that are 
reasonably likely to affect materially the financial or operational 
condition of such entities; and (2) to obtain certain information and 
make and keep certain records concerning their policies, procedures or 
systems for monitoring and controlling financial and operational risks 
to them resulting from the activities of affiliated persons. The 
Commission has held discussions with the Securities and Exchange 
Commission regarding the operation of their temporary risk assessment 
regulations in an effort to avoid unnecessary duplication and sought 
input from other financial regulators.


Statement of Need:





The proposed rules, authorized by Congress in section 229 of the 
Futures Trading Practices Act of 1992, Public Law 102-546, 106 Stat. 
3590 (1992), would enhance the Commission's financial surveillance 
program by providing the Commission with access to information 
concerning the activities of affiliates of registered futures 
commission merchants (FCMs) whose activities are reasonably likely to 
have a material impact on the financial or operational condition of the 
FCM. As proposed, these rules would require registered FCMs to maintain 
certain records concerning the financial activities of such material 
affiliates, to file certain information with the Commission on an 
annual and quarterly basis and to provide additional information to the 
Commission upon the occurrence of specified events. The records 
required to be maintained and the information required to be filed 
routinely include, among other things, an organizational chart, risk 
management policies, financial statements, securities and commodity 
position data, financial instrument holdings, credit extensions, and 
information regarding positions of affiliates carried by FCMs. 
Additional information may be required upon the occurrence of a 
reduction in the FCM's adjusted net capital or the parent company's 
stockholders' equity, large outflows of the FCM's assets or large 
losses in positions of affiliates carried by the FCM, changes in an 
affiliate's credit or capital rating, and an FCM's agreement to 
guarantee the obligations of an affiliate.


The Commission views these rules as necessary to fulfill its objectives 
of protecting customer funds and ensuring financial integrity of 
regulated intermediaries. The rules are intended to enhance the 
safeguards of customer funds by providing the Commission with increased 
access to material information concerning the operations of affiliates 
of the FCM whose activities may expose the FCM to financial or 
operational risks. The new statutory authority under which these rules 
are proposed recognizes that, as illustrated by the experience of the 
CFTC and other regulators with several recent failures of regulated 
brokerage firms, the operations of regulated FCMs may be materially 
affected by, and only understood in conjunction with, the activities of 
affiliated entities, many of which may be unregulated. Concomitantly, 
the effectiveness of ongoing financial oversight programs may depend 
upon access to information concerning risks to the FCM created by 
affiliate activity, and the efficacy of regulatory responses to 
financial problems at the regulated entity may be enhanced by access to 
information concerning relevant affiliate activity.


Alternatives:





The proposals provide alternative filing options for an FCM that is 
also a securities broker-dealer, or that is part of a holding company 
with affiliates subject to the oversight of a Federal banking agency, 
State insurance commission or a foreign regulator with which the 
Commission has an information-sharing agreement to avoid duplicative 
reporting burdens. The staff has also consulted extensively with other 
financial regulators, and continues to do so, to explore the extent to 
which they may share with the Commission on a confidential basis 
relevant risk assessment information concerning entities subject to 
their supervision so as to reduce duplicative requirements.


Anticipated Costs and Benefits:


As a financial regulator, the Commission is acutely aware of the costs 
of regulation. Throughout its history, the Commission has taken into 
account the costs of its proposed regulations in order to ensure that 
the benefits of its regulations outweigh the costs. To date, we know of 
no Commission regulation that adversely affected small entities as 
defined under the Regulatory Flexibility Act, 5 U.S.C. 601-611 (1988).


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            59 FR 9689                                     03/01/94
NPRM Comment Period End                                        07/01/94
Interim Final Rule                                             10/00/94
Final Action                                                   03/00/95
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Lawrence T. Eckert
Attorney Advisor
Division of Trading and Markets
Commodity Futures Trading Commission
2033 K Street NW.
Washington, DC 20581
202 254-8955
RIN: 3038-AB01
BILLING CODE 6351-01-F