Commodity Futures Trading Commission February 2007 – Federal Register Recent Federal Regulation Documents

The Commodity Futures Trading Commission (Commission or CFTC) has amended Regulation 4.41, which governs advertising by commodity pool operators (CPOs), commodity trading advisors (CTAs), and the principals thereof, (1) To restrict the use of testimonials, (2) to clarify the required placement of the prescribed simulated or hypothetical performance disclaimer, and (3) to include within the regulation's coverage advertisement through electronic media (Amendments). This action is in furtherance of the Commission's longstanding view that all advertisements by CPOs, CTAs, and their principals must not be fraudulent, deceptive or misleading.

The Commission hereby adopts final acceptable practices for minimizing conflicts of interest in decision making by designated contract markets (``DCMs'' or ``exchanges''),\1\ pursuant to Section 5(d)(15) (``Core Principle 15'') \2\ of the Commodity Exchange Act (``CEA'' or ``Act'').\3\ The final acceptable practices are the first issued for Core Principle 15 and are applicable to all DCMs.\4\ They focus upon structural conflicts of interest within modern self- regulation, and offer DCMs a ``safe harbor'' by which they may minimize such conflicts and comply with Core Principle 15. To receive safe harbor treatment, DCMs must implement the final acceptable practices in their entirety, including instituting boards of directors that are at least 35% public and establishing oversight of all regulatory functions through Regulatory Oversight Committees (``ROCs') consisting exclusively of public directors.