Interpretation Regarding Use of Electronic Media by Commodity Pool Operators and Commodity Trading Advisors

COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 4

Interpretation Regarding Use of Electronic Media by Commodity

Pool Operators and Commodity Trading Advisors

AGENCY: Commodity Futures Trading Commission.

ACTION: Extension of comment period and effective date of

interpretation.

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SUMMARY: On August 8, 1996, the Commodity Futures Trading Commission

(``Commission'') issued an Interpretation Regarding Use of Electronic

Media by Commodity Pool Operators and Commodity Trading Advisors, 61 FR

42146 (August 14, 1996). The deadline for the submission of comments

and the effective date was originally October 15, 1996. The Commission

has determined to extend the period for public comment for thirty days,

or until November 14, 1996. In addition, the Commission has determined

to delay the effective date for a period of sixty days, or until

December 16, 1996, to allow the Commission sufficient time to consider

any additional comments that may be received during the extended

comment period. The Pilot Program for electronic filing of commodity

pool operator and commodity trading advisor disclosure documents will

commence on October 15, 1996, as originally provided.

DATES: The Interpretative Release referenced herein is effective on

December 16, 1996. Written comments must be received on or before

November 14, 1996.

ADDRESSES: Comments should be submitted to Jean A. Webb, Secretary of

the Commission, Commodity Futures Trading Commission, 1155 21st Street,

N.W., Washington, D.C. 20581. In addition, comments may be sent by

facsimile transmission to facsimile number (202) 418-5521, or by

electronic mail to secretarycftc.gov.

FOR FURTHER INFORMATION CONTACT:

Susan C. Ervin, Deputy Director/Chief Counsel, or Gary L. Goldsholle,

Attorney/Advisor, Division of Trading and Markets, Commodity Futures

Trading Commission, 1155 21st Street, N.W., Washington, D.C. 20581.

Telephone number: (202) 418-5450. Facsimile number: (202) 418-5536.

Electronic mail: tmcftc.gov.

SUPPLEMENTARY INFORMATION: On August 8, 1996, the Commission issued an

Interpretation Regarding Use of Electronic Media by Commodity Pool

Operators and Commodity Trading Advisors (``Interpretative Release'' or

``Release''). The Interpretative Release was designed to provide

commodity pool operators (``CPOs''), commodity trading advisors

(``CTAs''), and associated persons (``AP'') thereof, with guidance

concerning the application of the Commodity Exchange Act and

regulations thereunder to activities involving electronic media. The

Commission sought comment on all issues discussed in the release, and

any related issues, and provided that the effective date of the

Interpretative Release would be October 15, 1996 and that comments

should be received on or before that date. On October 7, 1996, the

Managed Futures Association requested that the Commission postpone the

effective date of the Interpretative Release until the Commission has

completed its review of all comments received on the Release. The

Commission has also received a second request to extend the comment

period and the effective date.

The Commission has determined to extend the comment period on the

Interpretative Release for an additional thirty days and the effective

date of the release for an additional sixty days. These postponements

will provide additional time both for public comment on relevant issues

and for the Commission's review of such comments prior to the effective

date of the Release. The Commission emphasizes, however, that this

deferment does not affect the statutory and regulatory requirements

applicable to persons acting as CPOs and CTAs, whether by means of

electronic media or otherwise. As noted in the Interpretative Release,

``persons using electronic media are subject to the same statutory and

regulatory requirements under the Commission's regulatory framework as

persons employing other modes of communication.'' 61 FR at 42150. The

Commission sought to assist such persons in the use of electronic media

by publishing guidance as to specific applications of existing

requirements in the Interpretative Release. The Commission also sought

comment in various sections as to whether alternative methodologies

would be acceptable.\1\ The Commission also notes that the Commission

staff letters and advisories cited in the Release, as stated therein,

``represent interpretations by the Commission's staff and do not

necessarily represent interpretations by the Commission.'' 61 FR at

42149 n.24. These staff statements provide relevant precedent and

guidance.

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\1\ For example, with respect to the use of personal

identification numbers to substitute for manually signed

acknowledgments, the Commission welcomed comment ``concerning other

procedures for electronic acknowledgment that are consistent with

the objectives stated above.'' 61 FR at 42160.

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Finally, although the Commission is delaying the effective date of

the Interpretative Release pending the receipt and review of additional

comments, CPOs and CTAs may continue to rely on the positions stated

therein as ``safe harbor'' positions to aid CTAs and CPOs making use of

electronic media pending further statements of the Commission's views.

Additionally, the Pilot Program for electronic filing of CPO and CTA

disclosure documents will commence on October 15, 1996, as originally

proposed and is not affected by these extensions.

Issued in Washington, D.C. on October 15, 1996, by the

Commission.

Jean A. Webb,

Secretary of the Commission.

[FR Doc. 96-26949 Filed 10-21-96; 8: 45am]

BILLING CODE 6351-01-M