Commodity Futures Trading Commission – Federal Register Recent Federal Regulation Documents

The Commodity Futures Trading Commission (``Commission'') is proposing to amend Commission Regulation 3.10 regarding the registration of firms located outside the U.S. that are engaged in commodity interest activities with respect to trading on U.S. designated contract markets (``DCMs'') and U.S. derivative transaction execution facilities (``DTEFs'').\1\ The amended regulation would codify past actions of the Commission or its staff permitting certain foreign firms that limit their customers to foreign customers to submit U.S. DCM and DTEF business on behalf of those customers for clearing on an omnibus basis through a registered futures commission merchant (``FCM''), without the foreign firm having to register as an FCM pursuant to section 4d of the Commodity Exchange Act (``Act'').

The OCC, Board, FDIC, OTS, NCUA, FTC, CFTC, and SEC (the Agencies) are proposing amendments to their rules that implement the privacy provisions of the Gramm-Leach-Bliley Act (GLB Act), Title V, Subtitle A. These rules require financial institutions to provide initial and annual privacy notices to their customers. As required under section 728 of the Financial Services Regulatory Relief Act of 2006 (Regulatory Relief Act or Act), the Agencies are proposing a safe harbor model privacy form that financial institutions may use to provide disclosures under the privacy rules. Institutions that use notices based on the Sample Clauses currently contained in most of the privacy rules would lose the benefit of a safe harbor for compliance with respect to those notices if they are provided more than one year following the date of publication of a final rule. Similarly, institutions that use notices based on the Sample Clauses in the SEC's privacy rule could no longer rely on the guidance provided with respect to those notices if they are provided more than one year following the date of publication of a final rule.

The Commission hereby proposes amendments to the Acceptable Practices \1\ for section 5(d)(15) (``Core Principle 15'') of the Commodity Exchange Act (``CEA'' or ``Act'').\2\ The amendments clarify the definition of ``public director'' contained in the Acceptable Practices.\3\ The Commission believes that the proposed amendments will remove potential ambiguities and correct a technical drafting error. The amendments are consistent with the Acceptable Practices' intent to ensure the inclusion of truly public directors on designated contract market (``DCM'') boards of directors and Regulatory Oversight Committees (``ROCs''), as well as truly public persons on their disciplinary panels. The Commission welcomes comment on the proposed amendments.

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.

The Commodity Futures Trading Commission (``Commission'' or ``CFTC'') is amending Commission regulations to require that notices of exemption or exclusion under Part 4 of the Commission's regulations submitted to National Futures Association (``NFA'') be filed electronically. Under the regulations the Commission is amending, the submission of a notice through NFA's electronic exemption filing system by a person duly authorized to bind the submitter will be permitted in lieu of the manual signature currently required by each of these regulations. In addition, the Commission also is adopting technical amendments that remove the procedure for making filings with the Commission required by Part 4, and revising other sections of Part 4 to refer to filings made with NFA rather than the Commission.

The Commodity Futures Trading Commission (``the Commission'' 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, and to allow 60 days for comment in response to the notice. This notice solicits comments on requirements relating to information collected to assist the Commission in the prevention of market manipulation.

The Commodity Futures Trading Commission (``Commission'' or ``CFTC'') is proposing to amend its regulations in order to require, subject to the existing exception for certain notice registered securities brokers or dealers (``BDs''), that all persons registered with the Commission as futures commission merchants (``FCMs'') must become and remain members of at least one registered futures association (``RFA''). This action (``Proposed Amendment'') is consistent with the regulatory philosophy underlying the Commodity Futures Modernization Act of 2000 (``CFMA'').