For Release: May 25, 1999
CFTC REDUCES RULES ON CONTRACT
Washington, D.C.--The Commodity Futures Trading Commission (CFTC) today
dramatically reduced the burden on U.S. futures exchanges associated with
applying for approval of new contracts. The Commission today replaced
five pages of rules in the Code of Federal Regulations with three
separate, user-friendly application forms. The separate application forms
apply to physical delivery futures contracts, cash-settled futures
contracts and option contracts. Each makes use of charts or checklists to
reduce significantly the paperwork burden on United States exchanges in
applying for CFTC approval of new futures and option contracts.
The new application forms reduce paperwork by permitting exchanges to use third-party generated written materials in support of their applications and by eliminating unnecessary narrative information. In addition, exchanges are not being required routinely to provide information concerning the economic utility of the proposed contract. Exchanges will be able to download the application forms from the Commission's internet website and to submit completed applications electronically.
The CFTC reviews and approves new futures and option contracts to ensure that they are not readily susceptible to manipulation and that they comply with other regulatory requirements and protections, such as speculative position limits. These revisions to the application requirements, when coupled with earlier initiatives to cut the time for CFTC review, will significantly reduce the overall costs on United States exchanges associated with the contract review and approval requirements and simplify the process.
Beginning in 1997, the Commission began a far-reaching program of regulatory reform. That program was intended to reduce unnecessary regulatory burdens while preserving the important public protections of the Commodity Exchange Act. The reform program's first initiative established fast-track procedures for Commission review and approval of applications for new contracts. Under the fast-track alternative procedures, new contracts are approved within forty-five days, and some in as few as ten days.
In announcing today's action by the CFTC, Chairperson Brooksley Born stated:
Simplifying the application for contract approval and eliminating unnecessary associated paperwork is an important continuation of the regulatory reform program initiated by the CFTC during my tenure as its chairperson. The results of that initiative are gratifying, having strengthened the futures industry's competitiveness while maintaining important public protections.
The new application forms are attached. Copies of the Federal Register notice may be obtained by contacting the Commission's Office of the Secretariat, three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5100, or on the CFTC's website at www.cftc.gov.