CFTC Annual Report 1997

Letter of Transmittal to the U.S. Congress

During FY 1997, the Commission focused on reducing regulatory burdens while preserving the important protections of customers and market integrity that have made the U.S. futures markets the strongest, most competitive and most innovative in the world. For example, the Commission implemented new ''fast-track'' designation procedures for processing contract designation applications and exchange rule changes. The new rules permit approval within 10 days for many types of contracts and 45 days for certain other contracts.

The Commission also streamlined many of its reporting and disclosure requirements. Large traders, who used to file an annual report with the Commission, now file only on request. The Commission harmonized certain financial reporting requirements with those of the Securities and Exchange Commission, a boon to CFTC registrants who are also SEC registrants. The Commission also proposed rules that would speed the account opening process for financially sophisticated customers and provide flexibility to futures commission merchants (FCMs) and introducing brokers (IBs) to design their own risk disclosures. In addition, the Commission delegated a number of new responsibilities to the National Futures Association.

The Commission also adopted a number of initiatives that take advantage of the increased efficiencies and reduced costs made possible by electronic media. Commodity trading advisors (CTAs) and commodity pool operators (CPOs) may now file disclosure documents with the Commission electronically. We have also undertaken a program to permit FCMs to file required financial reports with the Commission electronically. In June, the Commission opened the way for FCMs to communicate with their customers electronically and authorized CPOs and CTAs to provide risk disclosure documents to their customers via electronic media. The Commission continues to expand its communication with the public through its web site, adding sections on the Division of Enforcement and the Division of Trading and Markets and allowing members of the public to send information on questionable activities directly to the Division of Enforcement.

I am proud of the commitment and diligence that Commission and CFTC staff have shown in the past year. It is with great pleasure that I submit this Annual Report of the Commodity Futures Trading Commission to the U.S. Congress.

Sincerely yours,

Brooksley Born


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