STATEMENT OF CHAIRPERSON BORN
OPEN COMMISSION MEETING
SEPTEMBER 3, 1997
I would like to thank the staff of the Division of Trading and Markets
for its work on this proposed rule amendment. The Commission's
action on this proposal today represents another step in a series of
initiatives that the Commission has undertaken to streamline
regulatory requirements and to reduce regulatory burdens. One of the
Commission's top priorities during the last year has been to
ensure through regulatory relief and reform that the agency is
responsive to the challenges facing the US futures industry and its
customers while at the same time preserving important protections of
the public interest.
The Commission has taken several actions in the last year to achieve
these goals. For example, in February the Commission implemented new
"fast-track" procedures for processing certain contract
designation applications and exchange rule changes. These procedures
significantly streamlined the review process for most new exchange
contracts and many exchange rules, permitting approval within 10 days
for many types of contracts and 45 days for certain other
contracts.
The Commission also has responded to the specific needs of FCMs and
floor brokers. In June the Commission approved rules allowing for
streamlined procedures for allocation of certain bunched orders. The
Commission also provided relief to FCMs with respect to the capital
treatment of short option positions to permit more FCMs to carry such
positions for customers and to facilitate more efficient use of
capital without creating undue financial risk.
The Commission has streamlined many of its reporting and disclosure
requirements. For example, the Commission amended its reporting
requirements to permit filing by large traders of CFTC Form 40,
Statement of Reporting Trader, only when requested by the Commission
rather than annually. We have adopted rule amendments to harmonize
certain financial reporting requirements for regulated persons with
the requirements of the Securities and Exchange Commission. The
Commission also has approved in principle two-part disclosure
documents, which potentially will simplify the information provided to
customers.
The Commission has sought to take advantage of the increased
efficiencies and reduced costs made possible through the use of
electronic media. In June the Commission opened the way for FCMs to
make use of electronic media in communicating with their customers.
The Commission's guidance permits FCMs to deliver monthly
statements, trade confirmations and other account statements solely by
electronic media to customers who consent to electronic transmission
in lieu of receiving paper documents. Also in June, the Commission
authorized CTAs and CPOs to provide risk disclosure documents to their
customers via electronic media. The Commission's interpretation
enables CPOs and CTAs to provide customers with a risk disclosure
summary and a hyperlink connection to the entire risk disclosure
document.
The Commission has adopted measures to permit the electronic filing of
certain documents with the Commission. In April the Commission adopted
a rule allowing CTAs and CPOs to file their required disclosure
documents with the Commission electronically. We also have undertaken
a program to permit FCMs to file required financial reports with the
Commission electronically. These electronic media initiatives should
increase the timeliness of information flows, reduce the
administrative costs of commodity professionals and allow all members
of the industry and their customers to reap the benefits of
technological advances.
Many of the Commission's actions over the last year were undertaken in direct response to issues raised by members of the industry. Others were undertaken following an internal review and recommendations by Commission staff. The Commission currently is working on several additional regulatory streamlining initiatives, and I am sure there are other initiatives of interest to members of the industry. I would like to reiterate my open invitation for industry participants and other interested persons to share with us their views on any other specific regulatory provisions which they believe are unduly burdensome or which could be streamlined. I strongly believe that by working together, the Commission and members of our industry can reform regulation while preserving the important interests in market integrity and customer protection that have made the US futures markets the strongest, most competitive and most innovative in the world.