Release: #3920-96
For Release: June 19, 1996


WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that it will hold a symposium on internal controls and risk management practices on Monday, June 24, 1996, from 9:00 am until 6:00 pm, at the Commission's headquarters at Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C., in the lobby-level hearing room.

The symposium, which is open to the public and will bring together end-users, academics, dealers, and regulators, is intended as an outreach effort to raise the education level of end-users, dealers, and self-regulators concerning the resources that are available to assist in the development of internal controls and risk management practices. In addition, the symposium will consider the ways in which existing financial reports can serve as risk management tools and, generally, will encourage a dialogue on the needs of end-users and dealers and the usefulness of existing resources.

The symposium will consist of three interactive panels, with each session followed by a discussion open to all participants. The first panel will discuss risk management and internal controls concerns from the perspectives of a futures commission merchant/dealer and a counterparty. The second will evaluate risk management, internal control systems, and audit reports, in particular. The third will focus on end-users' perspectives, and, in particular, the views of boards of directors and management. The final session, or "free for all," will provide an opportunity for both panelists and the audience members to discuss the government and self-regulatory roles with respect to risk management strategies and internal controls.

The full-day program will not only stimulate discussion on an important and timely subject in light of the recent revelations by Sumitomo Corporation, but also identify areas that can be addressed by education efforts of regulators and the private sector to assure maintenance of adequate controls by both futures commission merchants/dealers and end-users. It is expected that a better understanding of existing guidance on risk management methodologies will promote enhancement of existing practices.

For a copy of the list of panelist or further information, please contact

Mr. Jordan C. Klear at (202) 418-5485. The agenda for the symposium is as follows:



MONDAY, JUNE 24, 1996

What Users, Brokers and Dealers in Financial Instruments Should Know About Risk Management Practices and Internal Controls and the Role of Regulators and Self- Regulators in Assuring Maintenance of Adequate Risk Management Practices and Internal Controls

Coffee: 9:00 - 9:30 am

Opening Remarks: Acting Chairman, John E. Tull, Jr., 9:30 am

I.Dialogue -- Risk Management and Internal Controls Concerns From the Perspective of an FCM/Dealer and a Counterparty

Panel: 10:30 am - 12:00 pm

Q's and A's: 12:00 - 12:30 pm

Lunch: 12:30 - 1:30 pm

II.Counterpoint: Evaluating Risk Management and Internal Control Systems -- What Do Users Need From Audit Reports

Panel: 1:45 - 2:45 pm

Q's and A's: 2:45 - 3:15 pm

III.End-Users' Perspectives on Risk Management and Internal Controls: The Points of View of the Board of Directors and Management

Panel: 3:15 - 4:15 pm

Q's and A's: 4:15 - 4:45 pm

Coffee/Refreshment Break 4:45 - 5:00 pm

IV."Free for All": What Can and Should Regulatory and Self-Regulatory Authorities be Doing with Respect to Risk Management Strategies and Internal Controls?

Discussion:5:00 - 6:00 pm