For Release: December 23, 1998
CFTC Adopts New Regulation 1.69 Requiring
Self-Regulatory Organizations to Adopt Rules Prohibiting Governing
Board, Disciplinary Committee and Oversight Panel Members from
Deliberating or Voting on Certain Matters
Washington, D.C. -- The Commodity Futures Trading
Commission today announced that it has adopted new Regulation 1.69, which
requires self-regulatory organizations to adopt rules prohibiting
governing board, disciplinary committee and oversight panel members
from deliberating or voting on certain matters where the member has
either a relationship with the matter's named party in interest or
a financial interest in the matter's outcome. The final rulemaking
implements 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.(1)
Although New Commission Regulation 1.69 is similar to Regulation 1.69 as proposed,(2) the Commission made a number of changes to the Regulation as adopted in response to comments from industry participants and their representatives. For example, under the rule as adopted, the Commission may consider granting to small exchanges exemptions from certain provisions of Regulation 1.69, on a case-by-case basis, upon demonstration that compliance would create a material hardship.
The final rulemaking also amends Commission Regulations 1.41 and 1.63
to make modifications made necessary by new Commission Regulation
1.69. Specifically, Regulation 1.41(f) was amended to clarify the
impact of abstaining board members on governing boards taking
temporary emergency actions. Regulation 1.63(a)(2)'s definition of
"disciplinary committee" was amended to more closely
parallel Regulation 1.69's definition of the same term.
The new rule will be published shortly in the Federal Register. Copies of the rule may be obtained by contacting the Commission's Office of the Secretariat, Three Lafayette Center, 1155 21st Street, N.W., Washington, D.C., 20581, (202) 418-5100 or by accessing the Commission's website at www.cftc.gov.
1. Pub. L. No. 102-546, § 217,106 Stat. 3590 (1992).
2. 63 Fed. Reg. 3492 (Jan. 23, 1998).