For Release: December 12, 1995
CFTC Adopts Certain Rule Amendments, Proposes Others
The Commodity Futures Trading Commission, at an open meeting in Washington on December 7, 1995, adopted certain rule amendments and proposed additional rule amendments concerning providers of ethics training to industry registrants. At the same meeting, the Commission also voted to propose amendments to its financial rules.
The rule amendments adopted by the Commission governing providers of ethics training to industry registrants will: (1) require a certification by persons seeking to provide ethics training that they would not be disqualified from registration under the Commodity Exchange Act; (2) limit certain representations that ethics training providers may make concerning their status as such; (3) facilitate the use of videotape and electronic presentations; and (4) enhance the ability of a registered futures association to track the ethics training attendance dates of registrants. To facilitate the implementation of these rule amendments, the Commission delegated authority to National Futures Association (NFA) to: (1) maintain the list of eligible ethics training providers, including the authority to refuse to include persons on such list pursuant to the criteria set forth in Commission Rule 3.34 or criteria established by NFA and approved by the Commission; (2) establish guidelines as to the required proficiency and experience of ethics training providers; (3) receive and evaluate complaints concerning such providers and conduct other appropriate reviews of providers' operations, subject to Commission oversight; (4) develop appropriate procedures to verify certifications filed by potential ethics training providers; and (5) require that such certifications be updated periodically.
The Commission also voted last Thursday to propose further rule amendments that would require an ethics training provider to have successfully completed proficiency testing requirements established by a registered futures association and to have three years of relevant futures industry experience. The Commission further voted to propose a rule amendment that would eliminate the heretofore special treatment of persons with state accreditations to furnish continuing education in the fields of law, finance, accounting or economics, thereby rendering them subject to the rules applicable generally to ethics training providers.
The proposed financial rule amendments which the Commission voted to publish for public comment would: (1) conform the Commission's minimum financial requirements for futures commission merchants (FCMs) and introducing brokers (IBs) to the industry standards established by NFA, $250,000 and $30,000, respectively; (2) codify a previous staff no-action letter to provide that prepayment of subordinated debt by an FCM or IB need generally be approved only by a firm's designated self-regulatory organization and not also by the Commission; and (3) require that FCMs collect margin from foreign brokers for omnibus accounts on a gross basis, as now required for domestic omnibus accounts. Most U.S. futures exchanges already require gross margining of foreign omnibus accounts.
The final rule amendments applicable to ethics training providers will be effective thirty days after publication in the Federal Register, which is expected this week, except that the provisions related to permissible representations will not be effective until ninety days following publication. The additional proposed rule amendments concerning ethics training providers as well as the proposed financial rule amendments will be published for comment periods of thirty days.
For further information, please contact the Commission's Office of Public Affairs at (202) 418-5080.