Commodity Futures Trading Commission 2006 – Federal Register Recent Federal Regulation Documents

In compliance with the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) this notice announces that the Information Collection Request (ICR) abstracted below has been forwarded to the Office of Management and Budget (OMB) for review and comment. The ICR describes the nature of the information collection and its expected costs and burden; it includes the actual data collection instruments [if any].

The Commodity Futures Trading Commission (Commission) is revising its policy that permits foreign boards of trade that provide direct access to their automated trading systems from locations in the U.S. pursuant to a Commission staff no-action letter to list certain additional futures and option contracts on the basis of a one business day notification and without obtaining supplemental no-action relief and, in its place, establishing a ten business day advance notification requirement.

The Commodity Futures Trading Commission (``Commission'') is issuing an Order pursuant to Section 409(b)(3) of the Federal Deposit Insurance Corporation Improvement Act (``FDICIA''). Section 409 provides that the Commission (or one of several other authorized U.S. financial regulators) may determine that the supervision by a foreign financial regulator of a multilateral clearing organization for over- the-counter derivative instruments satisfies appropriate standards. The Commission is issuing this Order pursuant to Section 409(b)(3) of FDICIA with respect to the Alberta Securities Commission and its supervision of NetThruPut, Inc., a recognized clearing agency in Alberta, Canada.

The Commodity Futures Trading Commission (Commission) is amending Regulation 1.3(bb) by adding to that regulation a definition of the term ``client,'' as it relates to commodity trading advisors (CTAs). This amendment clarifies inconsistencies in the Commission's regulations concerning the advisees of CTAs, and it reflects the Commission's longstanding view that its antifraud authority extends to all CTAs, irrespective of whether they provide advice on a personalized or nonpersonalized basis. The Commission is also amending Regulation 1.3(bb) by adding the term ``derivatives transaction execution facility'' to the CTA definition set forth in that regulation.

The Commodity Futures Trading Commission (``Commission'' or ``CFTC'') is amending Commission rules to require that commodity pool annual financial reports submitted by commodity pool operators (``CPOs'') to the National Futures Association (``NFA'') be filed and affirmed electronically, in compliance with NFA's electronic filing procedures. NFA petitioned the Commission to adopt this amendment after its implementation of a pilot program for electronic filing of commodity pool annual reports in 2005. The amendment necessarily eliminates the requirement that the commodity pool annual report filed with NFA be manually signed, and replaces it with a requirement that CPOs maintain for five years in their own business records a manually signed oath or affirmation with respect to each annual report along with documentation supporting the compilation of certain key financial balances required to be submitted to NFA. In addition to mandating electronic filing, the Commission is also amending other provisions of its rules applicable to CPOs with respect to financial reporting to: (i) Explicitly state that commodity pool monthly and/or quarterly account statements distributed to participants must be prepared in accordance with generally accepted accounting principles; (ii) clarify that CPOs must file a notification of a change in a public accountant for a commodity pool with NFA; (iii) clarify that a reference to ``segregation'' with respect to a statement required to be made in an accountant's letter refers to the prohibition on commingling of funds of a commodity pool with the assets of any other person; and (iv) require that notifications concerning CPOs' election of fiscal years for commodity pools other than the calendar year or changes in fiscal year be filed solely with NFA and not the Commission. These amendments with respect to commodity pool financial reporting do not impact the distribution of annual reports to pool participants, which may continue to be provided through hard-copy distribution via postal mail or electronically if the pool participant consents thereto. Also, these amendments do not change the requirements or process for CPOs to request that the Commission provide confidential treatment to commodity pool annual reports submitted to NFA, in response to requests from the public made under the Freedom of Information Act.

On February 4, 2003, in response to a petition from the New York Mercantile Exchange, Inc. (``NYMEX'' or ``Exchange'') the Commodity Futures Trading Commission (``Commission''), issued an order \1\ pursuant to section 1a(12)(C) of the Commodity Exchange Act (``Act''). The order provided that, subject to certain conditions, Exchange floor brokers and floor traders (collectively referred to hereafter as ``floor members'') who are registered with the Commission, when acting in a proprietary trading capacity, shall be deemed to be ``eligible contract participants'' as that term is defined in section 1a(12) of the Act. The order (hereafter the ``original order'' or the ``ECP Order'') was effective for a two year period and would have expired on February 4, 2005.

The Commodity Futures Trading Commission (CFTC) is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., Federal agencies are required to publish notice in the Federal Register concerning each proposed collection of information, including each proposed extension of an existing collection of information, and to allow 60 days for public comment in response to the notice. This notice solicits comments on rules relating to review of National Futures Association decisions in disciplinary, membership denial, registration, and member responsibility actions.

On August 10, 2001, the Commodity Futures Trading Commission (``Commission'') published final rules implementing the provisions of the Commodity Futures Modernization Act of 2000 (``CFMA'') relating to trading facilities.\1\ These amendments are intended to clarify and codify acceptable practices under the rules for trading facilities, based on the Commission's experience over the intervening four years in applying those rules, including the adoption of several amendments to the original rules over the same period. The amendments also include various technical corrections and conforming amendments to the rules. In addition, these amendments revise the application and review process for registration as a derivatives clearing organization (``DCO'') by eliminating the presumption of automatic fast-track review of applications and replacing it with the presumption that all applications will be reviewed pursuant to the 180-day timeframe and procedures specified in Section 6(a) of the Commodity Exchange Act (``CEA'' or ``Act''). In lieu of the current 60-day automatic fast- track review, the Commission will permit applicants to request expedited review and to be registered as a DCO by affirmative Commission action not later than 90 days after the Commission receives the application.