News Column

CFTC Corrects Amendment on Enhancing Protections Afforded Customers and Customer Funds

August 1, 2014



Targeted News Service

WASHINGTON, Aug. 1 -- The Commodity Futures Trading Commission published the following rule in the Federal Register:

Enhancing Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations; Correction

A Rule by the Commodity Futures Trading Commission on 07/30/2014

Publication Date: Wednesday, July 30, 2014

Agency: Commodity Futures Trading Commission

Dates: Effective on July 30, 2014.

Effective Date: 07/30/2014

Entry Type: Rule

Action: Correcting Amendments.

Document Citation: 79 FR 44125

Page: 44125 -44127 (3 pages)

CFR: 17 CFR 140

17 CFR 1

17 CFR 30

RIN: 3038-AD88

Document Number: 2014-17934

Shorter URL: https://federalregister.gov/a/2014-17934

Action

Correcting Amendments.

Summary

The Commodity Futures Trading Commission ("CFTC") is correcting final rules published in the Federal Register of November 14, 2013 ("final rules"). Those rules, which adopted new regulations and amended existing regulations requiring enhanced customer protections, risk management programs, internal monitoring and controls, capital and liquidity standards, customer disclosures, and auditing and examination programs for futures commission merchants, took effect on January 13, 2014. This correction amends erroneous cross-references found in three sections of the final rules. Additionally, this correction amends one section of the final rules to insert language that was in the proposed rulemaking, and which was stated as being adopted in the preamble to the final rules, but was erroneously omitted from the final rule text.

DATES:

Effective on July 30, 2014.

FOR FURTHER INFORMATION CONTACT:

Thomas Smith, Deputy Director, 202-418-5495, tsmith@cftc.gov, or Mark Bretscher, Attorney-Advisor, 312-596-0529, mbretscher@cftc.gov, Division of Swap Dealer and Intermediary Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581.

SUPPLEMENTARY INFORMATION:

In the Federal Register of November 14, 2013 (78 FR 68506), the CFTC published final rules adopting new regulations and amending existing regulations requiring enhanced customer protections, risk management programs, internal monitoring and controls, capital and liquidity standards, customer disclosures, and auditing and examination programs for futures commission merchants. Those rules in 17 CFR 1.23(d)(2) and 1.23(d)(3) include erroneous cross-references to 17 CFR 1.23(c)(1) and 1.23(c)(2), which do not exist. Instead, the cross-references should be to 17 CFR 1.23(d)(1) and 1.23(d)(2). Accordingly, the Commission is making a correcting amendment which removes the erroneous cross-references to 17 CFR 1.23(c)(1) and 1.23(c)(2), contained in 17 CFR 1.23(d)(2) and 1.23(d)(3), and replaces them with corrected cross-references to 17 CFR 1.23(d)(1) and 1.23(d)(2).

Further, the final rules in 17 CFR 30.7(g)(4) include an erroneous cross-reference to 17 CFR 30.7(h)(2), which should reference 17 CFR 30.7(l), and an erroneous cross-reference to 17 CFR 30.7(g)(2), which should reference 17 CFR 30.7(g)(3). Also, 17 CFR 30.7(g)(5) contains an erroneous cross-reference to 17 CFR 30.7(c)(1) and 30.7(c)(2), which should reference 30.7(g)(3) and 30.7(g)(4). Thus, the Commission is making a correcting amendment to 17 CFR 30.7(g)(4) and 30.7(g)(5) as discussed above.

Additionally, the final rules in 17 CFR 30.7(d)(1) erroneously omitted language that was contained in the proposed rulemaking published on November 14, 2012; [1] and was stated as having been adopted in the preamble to the final rules. [2] The erroneously omitted language states that a futures commission merchant is not required to obtain an acknowledgment letter from a derivatives clearing organization ("DCO") if the DCO maintains rules that have been submitted to the Commission and that provide for the segregation of customer funds in accordance with all relevant provisions of the Commodity Exchange Act [3] and Commission regulations. Thus, the Commission is making a correcting amendment to 17 CFR 30.7(d)(1) to rectify that error.

Finally, the final rules in 17 CFR 140.91(a)(12) include an erroneous cross-reference to 17 CFR 140.91(a)(8), which should reference 17 CFR 140.91(a)(12). Thus, the Commission is making a correcting amendment to 17 CFR 140.91(a)(12) that removes the erroneous cross-reference to 17 CFR 140.91(a)(8) and replaces it with a cross-reference to 17 CFR 140.91(a)(12).

[*Federal RegisterVJ 2014-07-30]

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