Home > 1994 Unified Agenda > ua14no94 CONSUMER PRODUCT SAFETY COMMISSION (CPSC)...ua14no94 CONSUMER PRODUCT SAFETY COMMISSION (CPSC)...
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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
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FINAL RULE STAGE
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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
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