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


[[Page 24249]]


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Part XLVIII





Commodity Futures Trading Commission





_______________________________________________________________________



Semiannual Regulatory Agenda

Federal Register / Vol. 60, No. 88 / Monday, May 8, 1995 / 
Unified Agenda


Federal Register / Vol. 60, No. 88 / Monday, May 8, 1995 / 
Unified Agenda

=======================================================================

______________________________________________________________________

COMMODITY FUTURES TRADING COMMISSION (CFTC)                           
  
______________________________________________________________________

COMMODITY FUTURES TRADING COMMISSION

17 CFR Ch. I

Regulatory Flexibility Agenda

AGENCY: Commodity Futures Trading Commission.

ACTION: Publication of regulatory flexibility agenda.

______________________________________________________________________

SUMMARY: The Commodity Futures Trading Commission, in accordance with 
the requirements of the Regulatory Flexibility Act, is publishing a 
semiannual agenda of significant rules which the Commission expects to 
propose or promulgate over the next year. The Commission welcomes 
comments from small entities and others on the agenda.

ADDRESSES: Comments should be sent to: Gerry Smith, Special Assistant 
to the Executive Director, Commodity Futures Trading Commission, 2033 K 
Street NW., Washington, DC 20581, (202) 254-6090.

SUPPLEMENTARY INFORMATION: The Regulatory Flexibility Act, 5 U.S.C. 601 
et seq. (RFA), sets forth a number of requirements for agency 
rulemaking. Among other things, the RFA requires that:

    (a) During the months of April and October of each year, each 
agency shall publish in the Federal Register a regulatory 
flexibility agenda which shall contain:

    (1) A brief description of the subject area of any rule which 
the agency expects to propose or promulgate which is likely to have 
a significant economic impact on a substantial number of small 
entities;

    (2) A summary of the nature of any such rule under 
consideration for each subject area listed in the agenda pursuant 
to paragraph (1), the objectives and legal basis for the issuance 
of the rule, and an approximate schedule for completing action on 
any rule for which the agency has issued a general notice of 
proposed rulemaking; and

    (3) The name and telephone number of an agency official 
knowledgeable concerning the items listed in paragraph (1).

5 U.S.C. 602(a). The Commission has prepared an agenda of significant 
rules which it presently expects may be considered during the course of 
the next year, irrespective of their potential impact on small 
entities.1 [[Page 24250]] 


1 The Commission has published its definition of small entity to be 
used by the Commission in connection with rulemaking proceedings. 47 FR 
18618 (April 30, 1982). Pursuant to those definitions, the Commission 
is not required to list many of the agenda items contained in this 
regulatory flexibility agenda. See 5 U.S.C. 602(a)(1). Moreover, the 
Commission has previously certified, pursuant to section 605 of the 
RFA, 5 U.S.C. 605, that certain items contained in this agenda will not 
have a significant economic impact on a substantial number of small 
entities. Accordingly, listing of a rule in this regulatory flexibility 
agenda should not in any event be taken as a determination that a rule, 
when proposed or promulgated, will in fact require a regulatory 
flexibility analysis. However, the Commission hopes that the 
publication of an agenda, which includes significant rules, regardless 
of their potential impact on small entities, may serve the public 
generally by providing an early and meaningful opportunity to 
participate in and comment on the formulation of new or revised 
regulations.

    The Commission's agenda represents its best estimate of 
significant rules which will be considered over the next 12 
months.2 In this regard, section 602(d) of the RFA, 5 U.S.C. 
602(d), provides: ``Nothing in [section 602] precludes an agency 
from considering or acting on any matter not included in a 
regulatory flexibility agenda or requires an agency to consider or 
act on any matter listed in such agenda.''


2 In addition to publishing the regulatory flexibility agenda, the 
Commission also makes available to the public, on a monthly basis, a 
calendar and, on a weekly basis, an advisory, which lists rules that 
the Commission is considering or will consider in the near future.

    The Commission's April 1995 regulatory flexibility agenda is 
set forth below.

Issued in Washington, DC, on March 14, 1995, by the Commission.

Jean A. Webb,

Secretary of the Commission.

                                               Proposed Rule Stage                                              
----------------------------------------------------------------------------------------------------------------
                                                                                                     Regulation 
 Sequence                                           Title                                            Identifier 
  Number                                                                                               Number   
----------------------------------------------------------------------------------------------------------------
4645        Procedures for Involuntary Bulk Transfers or Liquidations of Customer Accounts........    3038-AA77 
4646        Prohibition on Voting by Interested Members...........................................    3038-AB03 
4647        Section 4(c) Contract Market Transactions; Swap Agreements............................    3038-AB06 
----------------------------------------------------------------------------------------------------------------


                                                Final Rule Stage                                                
----------------------------------------------------------------------------------------------------------------
                                                                                                     Regulation 
 Sequence                                           Title                                            Identifier 
  Number                                                                                               Number   
----------------------------------------------------------------------------------------------------------------
4648        Review of Commission Disclosure Requirements Concerning Commodity Pool Operators......    3038-AA74 
4649        Risk Assessment for Holding Company Systems...........................................    3038-AB01 
4650        Account Identification for Orders Submitted on Behalf of Multiple Customer Accounts...    3038-AB08 
4651        Ethics Training for Registrants.......................................................    3038-AB09 
----------------------------------------------------------------------------------------------------------------



[[Page 24251]] 
______________________________________________________________________

COMMODITY FUTURES TRADING COMMISSION (CFTC)        Proposed Rule Stage
  
______________________________________________________________________

4645. PROCEDURES FOR INVOLUNTARY BULK TRANSFERS OR LIQUIDATIONS OF 
CUSTOMER ACCOUNTS

Legal Authority:  7 USC 6d; 7 USC 6f; 7 USC 6g; 7 USC 6k; 7 USC 12a

CFR Citation:  17 CFR 1.68

Legal Deadline: None

Abstract: The CFTC will undertake a rulemaking proceeding to establish 
requirements concerning procedures to be followed by futures commission 
merchants and introducing brokers when bulk transfers or liquidations 
of customer accounts are made due to cessation or suspension of 
business or other special circumstances affecting the registrant.

Timetable:
_______________________________________________________________________

Action                            Date                      FR Cite

_______________________________________________________________________

NPRM                            09/00/95
NPRM Comment Period End         11/00/95

Small Entities Affected: Undetermined

Government Levels Affected: None

Agency Contact: Lawrence B. Patent, Associate Chief Counsel, Division 
of Trading and Markets, Commodity Futures Trading Commission, 2033 K 
Street NW., Washington, DC 20581, 202 254-8955

RIN: 3038-AA77
______________________________________________________________________



______________________________________________________________________

COMMODITY FUTURES TRADING COMMISSION (CFTC)        Proposed Rule Stage
  
______________________________________________________________________

4646. PROHIBITION ON VOTING BY INTERESTED MEMBERS

Priority:  Regulatory Plan

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                            Date                      FR Cite

_______________________________________________________________________

NPRM                            04/00/95
NPRM Comment Period End         05/00/95
Final Action                    07/00/95

Small Entities Affected: None

Government Levels Affected: None

Agency Contact: David P. Van Wagner, Special Counsel, Division of 
Trading and Markets, Commodity Futures Trading Commission, 2033 K 
Street NW., Washington, DC 20581, 202 254-8955

RIN: 3038-AB03
______________________________________________________________________



______________________________________________________________________

COMMODITY FUTURES TRADING COMMISSION (CFTC)        Proposed Rule Stage
  
______________________________________________________________________


4647. SECTION 4(C) CONTRACT MARKET TRANSACTIONS; SWAP AGREEMENTS

Legal Authority:  7 USC 2; 7 USC 6; 7 USC 6c; 7 USC 12a

CFR Citation:  17 CFR 35; 17 CFR 36

Legal Deadline: None

Abstract: The Commodity Futures Trading Commission has received 
petitions for exemptive relief submitted by the Chicago Mercantile 
Exchange (``CME'') and the Board of Trade of the City of Chicago 
(``CBOT''). The petitions request exemptions from most of the 
requirements of Commodity Exchange Act (``CEA'' or ``Act'') and 
Commission regulations for certain exchange-traded futures and option 
contracts pursuant to Section 4(c) of the Act. In response to the 
petition requests, the Commission has proposed rules which will permit 
certain contract market transactions meeting specified criteria to 
trade pursuant to exemption from certain requirements under the Act and 
Commission regulations on a section 4(c) contract market. The 
Commission is also seeking comment on whether Part 35 (exemption of 
swap agreements) should be amended to include stand-alone prohibitions 
on fraud and price manipulation.

Timetable:
_______________________________________________________________________

Action                            Date                      FR Cite

_______________________________________________________________________

NPRM                            10/28/94                    59 FR 54139
NPRM Comment Period Extended to 
1/31/95                         12/14/94                    59 FR 64359


Next Action Undetermined

Small Entities Affected: None

Government Levels Affected: None

Agency Contact: Ellyn S. Roth, Attorney, Office of the General Counsel, 
Commodity Futures Trading [[Page 24252]] Commission, 2033 K Street NW., 
Washington, DC 20581, 202 254-9880

RIN: 3038-AB06



______________________________________________________________________

COMMODITY FUTURES TRADING COMMISSION (CFTC)           Final Rule Stage
  
______________________________________________________________________

4648. REVIEW OF COMMISSION DISCLOSURE REQUIREMENTS CONCERNING 
COMMODITY POOL OPERATORS

Priority:  Regulatory Plan

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                            Date                      FR Cite

_______________________________________________________________________

NPRM                            05/16/94                    59 FR 25351
NPRM Comment Period End         08/17/94
Final Action                    04/00/95

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
______________________________________________________________________




______________________________________________________________________

COMMODITY FUTURES TRADING COMMISSION (CFTC)           Final Rule Stage
  
______________________________________________________________________

4649. RISK ASSESSMENT FOR HOLDING COMPANY SYSTEMS

Priority:  Regulatory Plan

Legal Authority:  7 USC 6f(c) (Supp IV 1992)

CFR Citation:  17 CFR 1.14; 17 CFR 1.15

Legal Deadline: None

Abstract: On December 21, 1994, the Commission adopted, as Phase I of 
the risk assessment rulemaking, final rules with respect to maintenance 
and filing of organizational charts, risk management policies, 
procedures and systems, and consolidated and consolidating financial 
statements, as well as proposed ``trigger'' event reporting in the 
event of a twenty percent decline in an FCM's adjusted net capital. The 
Commission deferred action on the balance of the proposed rules, which 
related to reporting of position data and other data concerning FCM 
affiliates. With respect to the second phase of the rulemaking process, 
the Commission's staff will continue to work with other financial 
regulators, particularly the Securities and Exchange Commission, to 
design a reporting framework that is harmonized across regulatory 
structures and, to the extent possible, reflective of a consensus as to 
which data are most meaningful to regulators and can be provided 
without undue burden. [[Page 24253]] 

Statement of Need: These rules, authorized by Congress in section 229 
of the Futures Trading Practices Act of 1992, Public Law 102-546, 106 
Stat. 3590 (1992), are intended to 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. These adopted rules 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 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 
an organizational chart, risk management policies, and consolidated and 
consolidating financial statements. In addition, notice of a twenty 
percent decline in an FCM's adjusted net capital is required. Proposals 
related to securities and commodity position data, financial instrument 
holdings, information regarding positions of affiliates carried by 
FCM's as well as certain other ``trigger'' events for reporting 
purposes have been deferred.
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 
were adopted 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                            Date                      FR Cite

_______________________________________________________________________

NPRM                            03/01/94                     59 FR 9689
NPRM Comment Period End         07/01/94
Final Action                    12/31/95
Risk Assessment for Holding Company Systems  Phase I 12/28/94 (59 FR 
66674)  Phase II 12/31/95

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
______________________________________________________________________




______________________________________________________________________

COMMODITY FUTURES TRADING COMMISSION (CFTC)           Final Rule Stage
  
______________________________________________________________________

4650. ACCOUNT IDENTIFICATION FOR ORDERS SUBMITTED ON BEHALF OF 
MULTIPLE CUSTOMER ACCOUNTS

Legal Authority:  7 USC 7; 7 USC 7a; 7 USC 7b; 7 USC 8; 7 USC 12a; 7 
USC 12c

CFR Citation:  17 CFR 1.35

Legal Deadline: None

Abstract: These rule amendments permit consolidated futures orders for 
multiple accounts to be placed and executed on contract markets without 
individual customer identification at time of entry or execution. 
Depending on the accounts, the person placing the order would identify 
accounts and either pre-file an allocation plan or certify certain 
facts.

Timetable:
_______________________________________________________________________

Action                            Date                      FR Cite

_______________________________________________________________________

NPRM                            05/03/93                    58 FR 26270
NPRM Comment Period End         06/17/93
Final Action                    05/00/95
Final Action Effective          06/00/95

Small Entities Affected: None

Government Levels Affected: None

Agency Contact: Duane C. Andresen, Attorney Advisor, Divison of Trading 
and Markets, Commodity Futures Trading Commission, 2033 K Street NW., 
Washington, DC 20581, 202 254-8955

RIN: 3038-AB08
______________________________________________________________________




______________________________________________________________________

COMMODITY FUTURES TRADING COMMISSION (CFTC)           Final Rule Stage
  
______________________________________________________________________


4651. ETHICS TRAINING FOR REGISTRANTS

Legal Authority:  7 USC 1a; 7 USC 6d; 7 USC 6e; 7 USC 6g; 7 USC 6m; 7 
USC 6p; 7 USC 12a; 7 USC 21

CFR Citation:  17 CFR 3.34

Legal Deadline: None

Abstract: The Commission is proposing amendments to its rule governing 
ethics training for registrants to provide additional guidance relative 
to ethics training providers. The proposed amendments would: (1) allow 
a person to provide ethics training if he certifies to a registered 
futures association that he is not subject to statutory 
disqualification from registration under the Commodity Exchange Act 
(Act), barred from service on self-regulatory organization governing 
boards or committees, or subject to a pending proceeding or 
investigation with respect to possible violations of the Act or rules 
or orders promulgated thereunder; (2) prohibit certain representations 
with respect to a person's status as an ethics training provider; (3) 
prohibit an ethics training provider from using that fact to qualify as 
an expert witness in an adjudicatory [[Page 24254]] proceeding before 
the Commission or from proffering evidence of that fact to qualify as 
an expert witness in any adjudicatory proceeding to which the 
Commission is a party; (4) allow wider use of ethics training 
presentation by interactive means and video tape; and (5) require 
ethics training providers to furnish records of attendees (cont)

Timetable:
_______________________________________________________________________

Action                            Date                      FR Cite

_______________________________________________________________________

NPRM                            07/22/94                    59 FR 37446
NPRM Comment Period End         09/20/94
Final Action                    05/00/95
Final Action Effective          08/00/95

Small Entities Affected: Undetermined

Government Levels Affected: Undetermined

Additional Information: ABSTRACT CONT: to a registered futures 
association.

Agency Contact: Lawrence B. Patent, Associate Chief Counsel, Division 
of Trading and Markets, Commodity Futures Trading Commission, 2033 K 
Street NW., Washington, DC 20581, 202 254-8955

RIN: 3038-AB09
[FR Doc. 95-7560 Filed 05-05-95; 8:45 am]
BILLING CODE 6351-01-F