Ethics Training for Registrants

COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 3

Ethics Training for Registrants

AGENCY: Commodity Futures Trading Commission.

ACTION: Proposed rules.

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SUMMARY: The Commodity Futures Trading Commission (Commission) is

proposing amendments to its rule governing ethics training for

registrants to provide additional guidance relative to ethics training

providers. The proposed amendments would: allow a person to provide

ethics training if he certifies to a registered futures association

that he is not subject to statutory disqualification from registration

under the Commodity Exchange Act (Act), barred from service on self-

regulatory organization (SRO) governing boards or committees, or

subject to a pending proceeding or investigation with respect to

possible violations of the Act or rules or orders promulgated

thereunder; prohibit certain representations with respect to a person's

status as an ethics training provider; prohibit an ethics training

provider from using that fact to qualify as an expert witness in an

adjudicatory proceeding before the Commission or from proffering

evidence of that fact to qualify as an expert witness in any

adjudicatory proceeding to which the Commission is a party; allow wider

use of ethics training presentation by interactive means and videotape;

and require ethics training providers to furnish records of attendees

to a registered futures association upon request.

DATES: Comments must be received by September 20, 1994.

ADDRESSES: Comments should be sent to the Office of the Secretariat,

Commodity Futures Trading Commission, 2033 K Street NW., Washington, DC

20581 and should refer to ``Ethics Training for Registrants.''

FOR FURTHER INFORMATION CONTACT: Lawrence B. Patent, Associate Chief

Counsel, Division of Trading and Markets, at the above address.

Telephone (202) 254-8955.

SUPPLEMENTARY INFORMATION:

I. Background

Section 210 of the Futures Trading Practices Act of 1992 added a

new paragraph (b) to Section 4p of the Act mandating ethics training

for registrants.1 The Commission adopted Rule 3.34 to implement

this Congressional mandate.2 The Commission subsequently issued a

notice to give further guidance with respect to information to be

supplied in applications by persons seeking to provide ethics training

to registrants.3

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\1\This provision of the Act is codified at 7 U.S.C. 6p(b)

(Supp. IV 1992) and states that:

The Commission shall issue regulations to require new

registrants, within 6 months after receiving such registration, to

attend a training session, and all other registrants to attend

periodic training sessions, to ensure that registrants understand

their responsibilities to the public under this Act, including

responsibilities to observe just and equitable principles of trade,

any rule or regulation of the Commission, any rule of any

appropriate contract market, registered futures association, or

other self-regulatory organization, or any other applicable Federal

or state law, rule or regulation.

\2\58 FR 19575, 19584-19587, 19593-19594 (April 15, 1993).

\3\58 FR 47890 (September 13, 1993).

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The Commission has reviewed several applications from persons

seeking to provide ethics training to registrants and several other

applications are currently pending with the Commission. In light of

this experience, the Commission is now proposing amendments to Rule

3.34 regarding ethics training providers in an effort to enhance the

operation of this program. Those provisions of the rule that relate to

what must be covered in ethics training and specific requirements

concerning attendance at such training by registrants would remain

unchanged.

II. Proposed Amendments

A. Certification by Ethics Training Provider

Presently, there are three categories of persons that may provide

ethics training to registrants under the Act: (1) an SRO, such as an

exchange which may have a program for its member floor brokers (FBs)

and floor traders (FTs); (2) an entity accredited to conduct continuing

education programs by a state professional licensing authority in the

fields of law, finance, accounting or economics; or (3) any other

person ``if its program is approved by the Commission for this

purpose.''4 The proposals set forth herein would maintain SROs and

state-accredited continuing education programs as ethics providers. The

Commission is also proposing, however, to permit any other person to

provide ethics training if the person files a notice with a registered

futures association certifying that the person, any principals thereof

(as defined in Commission Rule 3.1(a))5 and any individuals, on

behalf of such person, who conduct in-person ethics training or who

prepare ethics training videotape or electronic presentations, are not

subject to: (1) statutory disqualification from registration under

Sections 8a (2) or (3) or the Act;6 (2) a bar from service on SRO

governing boards or committees based on disciplinary histories,

pursuant to Commission Rule 1.637or any SRO rule adopted

thereunder;8 (3) a pending adjudicatory proceeding under Sections

6(c), 6(d), 6c, 6d, 8a or 9 of the Act or Commission Rules 3.55, 3.56

or 3.60;9 or (4) a pending investigation by the Commission's

Division of Enforcement of which the subject has been notified.10

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\4\Rule 3.34(b)(3).

\5\17 CFR 3.1(a) (1993).

\6\7 U.S.C. 12a(2) and (3) (1988 and Supp. IV 1992). The Act

specifies several grounds for disqualification including, among

others, prior revocation of registration, felony convictions, and

injunctions related to futures or securities activities.

\7\17 CFR 1.63 (1993), as amended by 58 FR 37644 (July 13,

1993).

\8\Thus, if Mr. Jones sets up Jones, Inc. to offer ethics

training and hires Ms. Smith to conduct the lectures, the

certification must include Jones, Inc., Mr. Jones and Ms. Smith.

Such certification must also cover any additional instructors who

would be hired if necessary to handle the number of registrants

enrolling in the ethics training program.

\9\A pending proceeding is a basis to bar a person whose

registration has expired within the preceding sixty days from

obtaining a temporary license upon mailing a new registration

application to NFA (see 17 CFR 3.11(c)(1)(i)(B), 3.11(c)(1)(ii)(B),

3.12(d)(1)(iv), and 3.12(i)(1)(iv) (1993)), to bar a person from

serving as a sponsor or special supervisor of a conditioned or

restricted registrant (see 17 CFR 3.60(b)(2)(i)(A) (1993)), and to

prevent withdrawal from registration (see 17 CFR 3.33(f)(1)(1993)).

\1\0The Commission also notes that this has been used as a basis

to prevent withdrawal from registration (see 17 CFR 3.33(f)(3)

(1993)).

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The Commission believes that it is appropriate for an ethics

training provider to make such a certification.11 The

Congressional mandate for ethics training is intended ``to ensure that

registrants understand their responsibilities to the public under [the]

Act, including responsibilities to observe just and equitable

principles of trade, any rule or regulation of the Commission, any

rules of any appropriate contract market, registered futures

association, or other self-regulatory organization or any other

applicable Federal or State law, rule or regulation.''12 The

Commission believes that it would be anomalous, inconsistent with the

Congressional mandate and contrary to the public interest for a person

to teach others about their responsibilities under those laws and rules

if such person has a disciplinary history that would disqualify him

from registration under the Act or service on SRO governing broads or

committees, or is involved in an adjudicatory proceeding or the subject

of an investigation pertaining to violations of such laws and rules.

The Commission is also proposing that the certification requirement be

a continuous one so that if circumstances change and the certification

becomes inaccurate, the person must so inform the registered futures

association, which shall then refuse to include such person on, or

remove such person from, the list of ethics training providers.13

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\1\1The items discussed above would apply to a certification

from any ethics training provider. If the ethics training provider

will offer training via videotape or electronic presentation, the

provider's certification would also be required to include a

statement with respect to verification of the registrant's

attendance. This is discussed below under Heading C, Videotape or

Electronic Presentation.

\1\2Section 4p(b) of the Act.

\1\3However, if a firm is subject to a pending adjudicatory

proceeding or investigation as described above, the Commission

believes that it could submit a certification to a registered

futures association with an explanation describing the circumstances

of the proceeding or investigation, particularly with respect to the

scope and nature of the proceeding or investigation in relation to

the size of the firm. For example, an investigation limited to a

single branch office of a firm that does not involve fraud or

failure to supervise might be treated differently than a proceeding

involving such allegations against the top management of a firm. The

Commission would expect the registered futures association to

consult the Commission as to any particular certification submitted

or in cases where a firm on the list becomes subject to a proceeding

or investigation.

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The purpose of this amendment is to permit National Futures

Association (NFA), currently the only registered futures association,

to maintain the list of eligible ethics training providers for purposes

of Commission Rule 3.34 and to clarify that the specific content of an

ethics training program is not being approved by the Commission or by

NFA, as discussed more fully below. The Commission would delegate

authority to NFA to establish guidance as to the required experience of

ethics training providers and permit NFA to receive and evaluate

complaints concerning such providers and make other appropriate review

of providers' operations, subject to Commission oversight. NFA would

also be delegated authority to develop appropriate procedures to verify

certifications filed by a potential ethics training provider, for

having such certifications updated periodically and for refusing to

include persons on the list of ethics training providers.14 NFA

would submit its procedures to the Commission for review pursuant to

Section 17(j) of the Act,15 which governs approval of registered

futures association rules.

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\1\4Misrepresentations contained in such certification would

also constitute federal criminal violations. See 18 U.S.C. 1001

(1988).

\1\57 U.S.C. 21(j)(1988).

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B. Permissible Representations

When the Commission has granted applications to provide ethics

training, it has stated in letters to the applicants, among other

things, that it has not approved the specific content of the ethics

training program proposed and expresses no opinion as to the program's

quality or accuracy. Indeed, it would be impossible for the Commission

to do so since it has normally been presented with only an outline of

the training course from those who filed applications.16 The

Commission therefore believes that it is appropriate to clarify the

effect of the blanket reference in Rule 3.34 to an SRO or state-

accredited continuing education entity as ethics training providers, as

well as the effect of a registered futures association's listing of

other persons providing such training.

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\1\6See Item B4 in the September 1993 notice, 58 FR 47890,

47891.

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Accordingly, the Commission is proposing to provide in new

paragraph (b)(5)(i) that no SRO, state-accredited continuing education

entity or other person included on a list of ethics training providers

``may represent or imply in any manner whatsoever that such person has

been sponsored, recommended or approved, or that such person's

abilities or qualifications, the content, quality or accuracy of his

training program, or the positions taken in the course of resolving any

actual or hypothetical situations presenting ethical issues, have in

any respect been passed upon or endorsed, by the Commission or a

registered futures association.'' Proposed new paragraph (b)(5)(i)

would further provide that any promotional or instructional material

used in connection with ethics training ``must prominently state that

the Commission and any registered futures association have not reviewed

or approved the specific content of the training program and do not

recommend the provider of such training.''17

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\1\7Proposed paragraph (b)(5)(i) would also contain a proviso

that it ``shall not be construed to prohibit a statement that a

person is included on a list of ethics training providers maintained

by a registered futures association if such statement is true in

fact and if the effect of such a listing is not misrepresented.''

The effect of this statement is intended to be that such person is

not precluded from providing ethics training by reason of

``unfitness'' as defined by the Act and the Commission's rules on

statutory disqualification.

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The Commission believes that these clarifications with respect to

representations that may be made as to the effect of providing ethics

training, whether pursuant to self-executing provisions of the rule or

to inclusion on a list maintained by a registered futures association,

are appropriate, particularly in light of existing limitations upon the

representations that may be made by registered commodity trading

advisors (CTAs), commodity pool operators (CPOs) or associated persons

(APs) of CTAs and CPOs as to the effect of registration under the Act,

which encompasses a greater level of review than pertains to ethics

providers.18

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\1\8See Section 4o(2) of the Act, 7 U.S.C. 6o(2) (1988).

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The Commission similarly believes that it is appropriate to limit

the use an ethics training provider may make of that fact in certain

adjudicatory proceedings. An ethics training provider should not be

able to use that fact to qualify as an expert witness or to present

expert testimony in an adjudicatory proceeding before the Commission

under Sections 6(c), 6(d), 8a or 14 of the Act19 or Commission

Rules 3.55, 3.56 or 3.60.20 Nor should an ethics training provider

proffer evidence of that fact in order to demonstrate experience,

competence or knowledge that would qualify the provider as an expert

witness in any adjudicatory proceeding to which the Commission is a

party, for example, a civil injunctive action brought by the Commission

under Section 6c of the Act (7 U.S.C. 13c (Supp. IV 1992)). The

Commission is therefore proposing new paragraphs (b)(5)(ii) and

(b)(5)(iii) to so provide. The Commission believes that because the

rule amendments proposed herein provide for a person to be included on

a list of ethics providers based on a self-certification process, it

would be inappropriate for any person included on such a list to use

that fact to demonstrate credentials as an expert witness. The

Commission would not consider evidence of a person's status as an

ethics provider in any administrative proceeding before it, and would

object to any such proffer in any adjudicatory proceeding to which it

is a party.

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\1\97 U.S.C. 9, 13b, 12a or 18 (1988 & Supp. IV 1992).

\2\017 CFR 3.55, 3.56 or 3.60 (1993).

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C. Videotape or Electronic Presentation

When the Commission adopted Rule 3.34, it provided in paragraph

(b)(3) that a program of ethics training could include a videotape or

electronic presentation. The Commission stated that such training would

be acceptable if the provider could substantiate the registrant's

completion of the program. The Commission further stated that such

substantiation contemplates, for example, an interactive computerized

training program that requires and records the registrant's

participation and return of such computer disk to the ethics training

provider for verification of such participation and the provider's

issuance of a certificate to that effect to the registrant.21

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\2\158 FR 19575, 19586-19587.

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The Commission had originally proposed allowing the use of

videotape or electronic presentation in recognition of the fact that it

could be difficult for registrants located substantial distances from

major metropolitan areas to attend in-person training sessions without

incurring significant expense or business disruption.22 One

contract market commenter on the Commission's proposal stated that all

registrants should have the opportunity to use an interactive computer

program. Since all of the contract markets are located in major

metropolitan areas, the Commission responded by expressing its belief

that FTs and FBs will generally attend in-person training sessions

sponsored by a contract market. The Commission also indicated, however,

that it ``may consider in its review of proposed ethics training

courses whether a particular proposal that includes an interactive

computer program would be appropriate for those whom attendance at an

in-person session would not be unduly burdensome.''23

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\2\258 FR 6748, 6756 (February 2, 1993).

\2\358 FR 19575, 19587.

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Most of the persons authorized to provide ethics training to date

currently do so by means of in-person presentation. Originally, a firm

authorized to provide such training by means of videotape or electronic

presentation was required to represent that videotape or electronic

training would be limited to registrants who live in locations outside

those metropolitan areas where in-person training will be given and for

those registrants that can provide a valid excuse for their inability

to attend sessions in those cities. The firm was further required to

represent that it would review all excuses given by registrants for

being unable to attend an in-person program in their metropolitan areas

and would assure that each such registrant is unable to attend due to

illness, vacation, business trips or other commitments that genuinely

precluded his presence.

Subsequently, the Commission's staff received several inquiries,

both from existing ethics training providers and potential new

providers, concerning the offering of interactive training in lieu of

in-person training where locational or other factors rendering in-

person training less feasible did not exist. The Commission has

reviewed this issue and believes that the previously required

representations may be difficult to interpret and may prevent the most

economic means of compliance for firms with multiple, dispersed

branches. Given the numbers of registrants, it may also be more

efficient and cost-effective to permit greater use of videotaped and

interactive training, without sacrificing the usefulness of such

training, subject to the verification procedures described below.

Accordingly, the Commission is now of the view that any registrant may

meet his ethics training requirement through in-person or through

videotaped or electronic presentations.

The Commission also wishes to make clear, however, that if

videotaped or electronic training is offered, the provider must be able

to verify that the video has been viewed or the training completed by

the registrant before the provider issues a certificate of attendance

to the registrant. Accordingly, if a provider will conduct training via

videotape or electronic presentation, either exclusively or in addition

to in-person training, the Commission is proposing that the provider's

certification referred to above be supplemented to include a

representation that the provider will maintain documentation reasonably

designed to verify that registrants have properly completed ethics

training for the minimum time required (one, two or four hours).

The Commission envisages that an appropriate verification regime

for a provider would include procedures such as the following. The

provider would maintain a list of the computer-based ethics program

purchasers and match each completed program with a record of purchase.

Registrants would be required to enter identifying information, such as

name, firm's name, business address, telephone number, date of birth,

NFA and/or Social Security number, on the control diskette and return a

signed statement with the completed computer diskette certifying that

he did in fact complete the ethics training course in the manner set

out in the instructions.

With respect to the fulfillment of the minimum time requirements

and verification of the registrants' participation in the program, the

ethics training provider could use a computer-based test to assure that

the registrant has attained a minimum level of understanding of the

materials covered, drawing upon matters covered in video and written

materials, as well as the computer program, to the extent applicable.

Registrants would be required to pass each section of the test prior to

answering questions in later sections of the test to assure that each

section of the program is completed. While those who fail the test

would be required to retake it until it is successfully completed, only

the time spent on the first test could be credited toward the ethics

training time required by Rule 3.34. Registrants answering quickly

would be given additional questions to answer, and the program would

cease recording elapsed time for those slow to answer questions. Thus,

registrants would be monitored both as to time spent and material

covered.24

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\2\4If an ethics training provider develops a computer-based

ethics training program for use by a particular registered firm and

its APs that in addition to the required subject matter also

includes material tailored to that firm, such as the firm's specific

professional conduct policies, the ethics training provider could

verify completion by the APs by relying on the registered firm's

representation as to its APs' attendance if the firm can verify the

identity of participants through the firm's in-house computer

communication system or through monitoring by the firm's supervisory

or managerial staff. The ethics training provider should require

registered firms using a tailored ethics training program to furnish

periodic reports of specified identifying information for each AP

accessing the training program.

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If a provider wished to follow a different verification regime, he

could do so if such steps had been submitted to and not found

objectionable by a registered futures association.

The Commission contemplates that an ethics training provider would

be able to document that a registrant had undertaken various steps

required for the provider to verify completion. The provider would be

required under revised paragraph (b)(4) of Rule 3.34 to keep

documentation to support its determination that ethics training has

been properly completed by a registrant and to support its issuance of

a certificate of attendance.25

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\2\5The Commission is also proposing under revised paragraph

(b)(4) of Rule 3.34 that records of trainer evaluations be

maintained.

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D. Recordkeeping

Rule 3.34(b)(4) governs recordkeeping by an ethics training

provider. The Commission is proposing to add a provision to the current

recordkeeping requirements that would require providers of ethics

training to furnish records of attendees at such training to a

registered futures association in such format as the registered futures

association may request. When the Commission adopted Rule 3.34, it

required that providers of ethics training maintain records of

attendees at such training in accordance with Commission Rule 1.31,

i.e., for a five-year period.26 The Commission also stated that it

would monitor the effectiveness of the requirement for maintaining a

record of ethics training attendance and may reconsider the issue at a

later date if appropriate.27 The Commission understands that NFA

is willing to compile information on ethics training attendance for

inclusion in the registration database and believes that ethics

training providers should cooperate with NFA requests for the

information which providers are already required to maintain. This will

allow for a central repository of such information which should benefit

all registrants and facilitate oversight of compliance with the ethics

training requirement. To facilitate NFA's incorporation of this data in

the registration database, ethics training providers should include

appropriate identifiers of registrants, such as NFA ID number, and

follow other format conventions requested by NFA.

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\2\617 CFR 1.31 (1993).

\2\758 FR 19575, 19587.

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III. Related Matters

A. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-611 (1988),

requires that agencies, in proposing rules, consider the impact of

those rules on small businesses. The proposed rule amendments discussed

herein will affect ethics training providers, which include SROs,

entities accredited to conduct continuing education programs by a state

professional licensing authority in the fields of law, finance,

accounting or economics, and any other person who complies with the

requirements to be included on a list of ethics training providers. The

SROs offering ethics training to their members are the contract markets

and the Commission has previously determined that contract markets are

not small entities under the RFA.28 As to the impact of these

proposals on other providers of ethics training or persons seeking to

become providers of ethics training, the Commission believes that such

impact will be minimal. The procedure for becoming an ethics training

provider would be simplified. The permissible representations by ethics

training providers which the Commission is proposing to codify are

consistent with the statements set forth in Commission letters issued

to date to ethics training providers. Finally, since ethics training

providers are already required to maintain records of attendees,

furnishing such information to NFA upon request should not cause an

undue burden.

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\2\847 FR 18618-18619 (April 30, 1982).

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Therefore, the Acting Chairman, on behalf of the Commission, hereby

certifies, pursuant to 5 U.S.C. 605(b), that the rules proposed herein

will not have a significant economic impact on a substantial number of

small entities. The Commission nonetheless invites comments from any

person or entity which believes that these proposed rule amendments

would have a significant impact on its operations.

B. Paperwork Reduction Act

The Paperwork Reduction Act of 1980 (PRA), 44 U.S.C. 3501 et seq.,

imposes certain requirements on federal agencies (including the

Commission) in connection with their conducting or sponsoring any

collection of information as defined by the PRA. In compliance with the

PRA, the Commission has submitted this proposed rule and its associated

information collection requirements to the Office of Management and

Budget. While the amendments proposed herein have no burden, Rule 3.34

is a part of a group of rules which has the following burden:

Rules 3.16, 3.32 and 3.34 (3038-0023, approved

June 2, 1993):

Average Burden Hours Per Response............... 1.13

Number of Respondents........................... 60,980

Frequency of Response........................... On occasion and

triennially.

Persons wishing to comment on the information which would be

required by these rules as amended should contact Gary Waxman, Office

of Management and Budget, room 3228, NEOB, Washington, D.C. 20503,

(202) 395-7340. Copies of the information collection submission to OMB

are available from Joe F. Mink, CFTC Clearance Officer, 2033 K St.

N.W., Washington, D.C. 20581, (202) 254-9735.

List of Subjects in 17 CFR Part 3

Ethics training, Registration.

Accordingly, the Commission, pursuant to the authority contained in

the Commodity Exchange Act and, in particular, Sections 1a, 4d, 4e, 4g,

4m, 4p, 8a and 17 thereof (7 U.S.C. 1a, 6d, 6e, 6g, 6m, 6p, 12a and 21

(1988 & Supp. IV. 1992)), hereby proposes to amend Part 3 of Chapter I

of Title 17 of the Code of Federal Regulations as follows:

PART 3--REGISTRATION

1. The authority citation for Part 3 continues to read as follows:

Authority: 7 U.S.C. 1a, 2, 4, 4a, 6, 6b, 6d, 6e, 6f, 6g, 6h, 6i,

6k, 6m, 6o, 6p, 8, 9, 9a, 12, 12a, 13b, 13c, 16a, 18, 19, 21 and 23;

5 U.S.C. 552, 552b.

2. Section 3.34 is proposed to be amended by revising paragraphs

(b)(3) and (b)(4) and by adding paragraph (b)(5) to read as follows:

Sec. 3.34 Mandatory ethics training for registrants.

* * * * *

(b) * * *

(3) The training required by this section must be provided by or

pursuant to a program of training (including videotape or electronic

presentation) sponsored by:

(i) A self-regulatory organization;

(ii) An entity accredited to conduct continuing education programs

by a state professional licensing authority in the fields of law,

finance, accounting or economics; or,

(iii) A person included on a list maintained by a registered

futures association who has filed a notice with the registered futures

association certifying that:

(A) The person, any principals thereof (as defined in Sec. 3.1(a))

and any individuals, on behalf of such person, who conduct in-person

ethics training or who prepare an ethics training videotape or

electronic presentation are not subject to:

(1) Statutory disqualification from registration under Sections

8a(2) or (3) of the Act;

(2) A bar from service on self-regulatory organization governing

boards or committees based on disciplinary histories pursuant to

Sec. 1.63 of this chapter or any self-regulatory organization rule

adopted thereunder;

(3) A pending adjudicatory proceeding under Sections 6(c), 6(d),

6c, 6d, 8a or 9 of the Act, or Secs. 3.55, 3.56 or 3.60; or

(4) A pending investigation by the Commission's Division of

Enforcement of which the subject has been notified; and

(B) If the person will conduct training via videotape or electronic

presentation, either exclusively or in addition to in-person training,

he will maintain documentation reasonably designed to verify the

attendance of registrants at such videotape or electronic presentation

for the minimum time required.

(iv) The certification requirement under paragraph (b)(3)(iii) of

this section is continuous and if circumstances change so that such

certification becomes inaccurate, the person must so inform the

registered futures association, which shall then refuse to include such

person on or remove such person from the list referred to in paragraph

(b)(3)(iii) of this section.

(4) Any person providing ethics training under this section must

maintain records of materials used in such training, attendees at such

training, documentation to verify completion by a registrant of

training through videotape or electronic presentation and trainer

evaluations in accordance with Sec. 1.31 of this chapter. All such

books and records shall be open to inspection by any representative of

the Commission or the U.S. Department of Justice and persons providing

ethics training shall be subject to audit by any representative of the

Commission. Records of attendees at such training shall be provided

upon request to a registered futures association in such format as

specified by the registered futures association.

(5) No person referred to in paragraph (b)(3) of this section may:

(i) Represent or imply in any manner whatsoever that such person

has been sponsored, recommended or approved, or that such person's

abilities or qualifications, the content, quality or accuracy of his

training program, or the positions taken in the course of resolving any

actual or hypothetical situations presenting ethical issues, have in

any respect been passed upon or endorsed, by the Commission, a

registered futures association, or any representative thereof. Any

promotional or instructional material used in connection with the

training required by this section must prominently state that the

Commission and any registered futures association have not reviewed or

approved the specific content of the training program and do not

recommend the provider of such training: Provided, however, that this

paragraph shall not be construed to prohibit a statement that a person

is included on a list of ethics training providers maintained by a

registered futures association if such statement is true in fact and if

the effect of such a listing is not misrepresented;

(ii) Use in any manner whatsoever the fact that he is offering

training required by this section to qualify as an expert witness or to

present expert testimony in an adjudicatory proceeding before the

Commission or one of its Administrative Law Judges under Sections 6(c),

6(d), 8a or 14 of the Act, or Secs. 3.55, 3.56 or 3.60; or

(iii) Proffer evidence that he is offering training required by

this section to demonstrate experience, competence or knowledge that

would qualify him as an expert witness in any adjudicatory proceeding

to which the Commission is a party.

* * * * *

Issued in Washington, DC on July 19, 1994, by the Commission.

Jean A. Webb,

Secretary of the Commission.

[FR Doc. 94-17880 Filed 7-21-94; 8:45 am]

BILLING CODE 6351-01-P