For Release: July 24, 1997
CFTC ISSUES GUIDANCE CONCERNING ELECTRONIC DELIVERY OF DISCLOSURE
DOCUMENTS BY COMMODITY POOL OPERATORS AND COMMODITY TRADING
On July 22, 1997, the Commodity Futures Trading Commission
(Commission) published in the Federal Register an
Interpretation regarding use of electronic media by commodity pool
operators (CPO) and commodity trading advisors (CTA) for delivery of
disclosure documents and other Materials (62 Fed. Reg. 39104). The
Interpretation states the Commission's views concerning electronic
delivery and storage of disclosure documents and related materials.
The effective date of the Interpretation is August 21, 1997.
Among other things, the Commission's interpretative guidance makes
clear that a CPO or CTA may satisfy the delivery requirements of rule
4.21 or 4.31 by electronic media by presenting the prospective
customer with a summary risk disclosure statement and access by
hyperlink (or similarly immediate connection) to the full disclosure
document. The Commission also clarified that a customer's
acknowledgment of receipt of an electronically delivered disclosure
document may be established by use of a personal identification number
(PIN) as well as by any alternate method that uses a unique identifier
to confirm the recipient's identity.
The Interpretation permits CPOs and CTAs to maintain required records
of electronically delivered disclosure documents or other
communications either in accordance with Commission rule 1.31 or
pursuant to the guidance provided by the Securities and Exchange
Commission in its recent rulemaking concerning recordkeeping by
broker-dealers (Securities Exchange Act Release No. 34-38245, 62 Fed.
Reg. 6469 (February 12, 1997)).
In the same July 22 Federal Register release, the Commission also announced adoption of certain technical changes to rules 4.1, 4.21 and 4.31 (proposed at 61 Fed. Reg. 44009 (August 27, 1996)), which clarify the application of document format and acknowledgment of receipt requirements to electronically delivered documents.