FIA submitted a comment letter to the CFTC supporting a proposed amendment to CFTC Rule 1.55(d)(1):
The Futures Industry Association (“FIA”) is pleased to write in support of the proposed amendment to Commodity Futures Trading Commission (“Commission”) rule 1.55(d)(1). If adopted, the amendment would include the consents required under Commission rules 155.3(b)(2) and 155.4(b)(2) among the prescribed disclosures, consents and elections that non-institutional customers are authorized to acknowledge having received and made through the use of a single signature. Rules 155.3(b)(2) and 155.4(b)(2), respectively, authorize an FCM and an introducing broker, with the consent of the customer, to knowingly take the opposite side of a customer’s order.
As noted in the Federal Register release accompanying the proposed amendment, the Commission promulgated a similar amendment to rule 1.55(d)(1) in November 2000, in connection with the implementation of its New Regulatory Framework. The amendment to rule 1.55(d)(1) had the support of all commenters that addressed the proposal, including FIA. Upon enactment of the Commodity Futures Modernization Act (“CFMA”), however, the Commission withdrew all of the rules constituting the New Regulatory Framework to be certain that they did not conflict with the provisions of the CFMA. The majority of those rules, but not the amendment to rule 1.55(d)(1), were repromulgated in October 2001. 66 Fed.Reg. 53510 (October 23, 2001). The omission of the amendment to rule 1.55(d)(1) appears to have been nothing more than an oversight. We encourage the Commission’s to adopt the amendment at this time.
FIA respectfully requests the Commission to adopt concurrently an amendment to rule 1.55(f), which would add the consent required under Commission rule 155.3(b)(2) to the prescribed disclosures, consents and elections that institutional customers are not required to acknowledge in opening an account with an FCM. As with the amendment to rule 1.55(d)(1), the Commission had adopted an amendment to this effect as part of its New Regulatory Framework, again with the support of all commenters.
Specifically, rule 1.55(f) was amended to read:
(f) A futures commission merchant or, in the case of an introduced account an introducing broker, may open a commodity futures account for an ‘‘institutional customer’’ as defined in §1.3(g) without furnishing such institutional customer the disclosure statements or obtaining the acknowledgments required under paragraph (a) of this section, §§1.33(g) and 1.65(a)(3), and §§30.6(a), 33.7(a), 155.3(b)(2) and 190.10(c) of this chapter.
Although the Commission did not propose an amendment to rule 1.55(f) in this Federal Register release, the omission appears to have been inadvertent. Since the Commission previously requested comment on this amendment and received uniform support for its adoption, FIA urges the Commission to adopt the above amendment to rule 1.55(f) as a final rule at the same time that it takes action on the amendment to rule 1.55(d)(1).
FIA appreciates the opportunity to comment on the proposed amendment to the Commission’s risk disclosure rules.
