Advisory 52-96 For Release December 20, 1996
COMMISSION NOTICE - DESTROYED RECORDS
December 18, 1996
TO:All SROs, Futures Commission Merchants, and Other Registrants
During the week of October 28, 1996, a fire destroyed a Chicago warehouse operated by Brambles Information Services. Several futures commission merchants (FCMs) and possibly other registrants stored in that warehouse business records required to be maintained pursuant to the Commodity Exchange Act and the Commission's regulations. The Commission has been asked to grant relief to registrants whose required records were destroyed or damaged in that fire. The Commission has decided to provide relief as set forth below.
Any registrant who has had records damaged or destroyed in the fire should file with the Commission, within 30 days of the date of this notice, a sworn statement by the registrant's chief executive officer, chief financial officer, managing partner or sole proprietor. That statement should include: (1) an inventory of any records that were in the warehouse and destroyed or damaged (indicating which were destroyed and which were damaged, and the extent of damage); (2) a representation that the records on the inventory were in the warehouse and were in fact destroyed or damaged in the fire as indicated on the inventory; and (3) copies of any available documentation that substantiates that records on the inventory were in the warehouse. If any copies, identical or otherwise, currently exist of any records covered by the statement, the statement should also include (i) an inventory of those copies, and (ii) a statement that the copies are identical or, if they are not identical, a description of how they differ from the originals.
If a statement meeting all of these requirements is filed with the Commission within the time indicated, the Commission will presume that the destruction or damage of the inventoried records was excusable and will, therefore, not take any action for a violation of Commission rule 1.31, which is the Commission's record keeping rule requiring, among other things, a firm to maintain records for a 5-year period. If an issue later arises relating to the availability or condition of any records not included in such a statement, the Commission will presume that the records in question were not destroyed or damaged in the warehouse fire and their unavailability is not subject to that excuse. In either case, the presumption will be rebuttable if an issue arises concerning the availability or condition of records. Moreover, the Commission will apply the presumption of excusability only if the firm maintains any currently available copies of the destroyed or damaged records, whether identical or not, for the 5-year period that would have applied to the original records.
Any such statements should be filed with the Commission at the following address:
Commodity Futures Trading Commission
1155 21st Street, N.W.
Washington, D.C. 20581
A registrant should also file a copy of the statement with its designated self- regulatory organization. If a registrant has any questions, they may be directed to Hank Matecki, Financial Audit and Review Branch, Chicago, IL, (312) 353-6642
For the Commission,
Jean A. Webb