For Release: January 21, 1998
CFTC Seeks Public Comment on a Proposed Regulation
to Establish Conflict of Interest Restrictions for Self-Regulatory
Organization Governing Boards and Committees
Washington, D.C. -- The Commodity Futures Trading Commission (Commission) on January 16, 1998, issued a Notice of Proposed Rulemaking requesting public comment on a proposed new Commission regulation 1.69 that would require self-regulatory organizations (SROs) to adopt rules prohibiting governing board, disciplinary committee and oversight panel members from deliberating and voting on certain matters in which they had conflicts of interest. The proposed rulemaking would require that SROs adopt rules prohibiting members of these committees from deliberating and voting on any matter in which a member had a family or business relationship with the matter's named party in interest. The proposed rulemaking also would prohibit these committee members from deliberating and voting on certain types of significant actions whenever a member had a substantial financial interest in the outcome of the matter. The proposed rulemaking would implement the statutory directives of Section 5a(a)(17) of the Commodity Exchange Act, as it was amended by Section 217 of the Futures Trading Practices Act of 1992, and would give content to the "bad faith" standard traditionally applied to futures exchange governing boards.
The Commission expects the proposed rulemaking to be published in the Federal Register this week and has provided for a 30-day comment period. The proposal will be available on the Commission's Internet Home Page (www.cftc.gov) and also may be obtained by contacting the Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5100.