[Federal Register Volume 60, Number 237 (Monday, December 11, 1995)]
[Proposed Rules]
[Pages 63472-63476]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30046]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 30
Foreign Commodity Options
AGENCY: Commodity Futures Trading Commission.
ACTION: Proposed rule.
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SUMMARY: The Commodity Futures Trading Commission (Commission or CFTC)
is proposing to amend rule 30.3 to eliminate the requirement that the
CFTC authorize the offer and sale of a particular foreign commodity
option before it can be offered or sold in the United States. This
proposal reflects the Commission's assessment that the continued
treatment of foreign commodity options differently from foreign futures
(which do not require a specific authorization order) should be
reevaluated.
DATES: Comments must be submitted on or before January 10, 1996.
ADDRESSES: Comments should be sent to the Secretariat, Commodity
Futures Trading Commission, Three Lafayette Centre, 1155 21st Street,
N.W., Washington, D.C. 20581. Reference should be made to ``Rule 30.3--
Foreign commodity options.''
FOR FURTHER INFORMATION CONTACT: Jane C. Kang, Esq., or Robert H.
Rosenfeld, Esq., Division of Trading and Markets, Commodity Futures
Trading Commission, Three Lafayette Centre, 1155 21st Street, N.W.,
Washington, D.C. 20581; telephone (202) 418-5435.
SUPPLEMENTARY INFORMATION:
Background
Commission rule 30.3(a) of the Commission's Part 30 rules governing
the offer and sale of foreign futures and option transactions makes it
unlawful for any person to engage in the domestic offer or sale of any
foreign commodity option contract until the Commission, by order,
authorizes the foreign option to be offered or sold in the United
States.1 A Commission order is not required with respect to
foreign futures. However, an option on a foreign stock-index futures
contract will not be approved unless, among other things, the
Commission's Office of the General Counsel has issued a no-action
letter authorizing the offer and sale in the United States of the
underlying foreign stock-index futures contract. In addition, debt
obligations of a foreign country must be designated as an exempted
security by the SEC under its rule 3a12-8, 17 CFR 240.3a12-8, before a
futures contract based on such debt obligation (or an option on such a
futures contract) may be offered or sold to a U.S. person.2
\1\ The Commission previously made clear that subject to certain
conditions applicable to transactions involving stock indexes and
foreign government debt, a rule 30.3 order would not be necessary
for transactions effected by U.S. futures commission merchants (FCM)
on behalf of foreign customers. See 57 FR 36369 (August 13, 1992).
\2\ Consistent with section 2(a)(1)(B) of the CEA, this proposed
rulemaking would not be applicable to commodity options based on or
involving a foreign futures contract based on a foreign stock index
unless the foreign stock index futures contract has been approved
for offer or sale in the United States through the issuance of a no-
action letter by the Commission's Office of the General Counsel.
Further, this proposed rulemaking would not be applicable to
commodity options based on a foreign government debt which has not
been designated as an exempted security under SEC rule 3a12-8.
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The Commission is proposing to eliminate the specific authorization
requirement of rule 30.3 thereby permitting, subject to existing
prohibitions with respect to stock index futures and options and
foreign government debt futures and options products, the offer and
sale of foreign commodity options in the same manner as currently
applies to the offer and sale of foreign futures. The Commission would,
however, continue to monitor the situation and take appropriate action
should it determine that U.S. investors, or the Commission, are not
able to obtain appropriate information related to the option
transactions of a specific exchange or are otherwise being adversely
affected by the rule change. Moreover, the proposal would not affect
the existing regulatory requirements applicable to the manner in which
appropriate products may be offered or sold to U.S. persons, e.g.,
registration of intermediaries, requirements related to sales practices
(including appropriate disclosures), availability to the Commission of
books and records and prohibitions on fraudulent activities.
The Commission's determination to propose modifications to the
current procedure of regulation 30.3(a) for approval of foreign option
products for sale to U.S. persons is based on its experiences with the
regulations governing options generally, and, in particular, with the
initial regulations imposed on foreign options trading. This proposal
reflects the Commission's assessment that the continued treatment of
foreign commodity options differently from foreign futures (which do
not require a specific authorization order) should be reevaluated.
History of Options Regulation
The regulatory approach to commodity options in the United States
[[Page 63473]]
has been particularly cautious due to the history of abuses which had
been associated with such transactions.3
\3\ The Commission notes that the abuses which characterized the
offer and sale of commodity options in the past generally involved
sales practices, 46 FR 54500, 54503 (November 3, 1981), including
sales activity with respect to alleged ``London options'' (which
appeared to have been perpetrated exclusively by sales persons or
organizations in the United States, and did not involve any improper
activities on the part of foreign exchanges), see 42 FR 18246, 18249
(April 5, 1977).
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Unsatisfactory experiences with what essentially were unregulated
sales of options on commodities in the early 1970's, and further abuses
under interim regulations adopted in 1976 ultimately resulted in the
Commission's suspension of the offer and sale of all commodity options
as of June 1, 1978 and the codification of that suspension by Congress
in the Commodity Exchange Act of 1978. See 46 FR 54500, 54502 (November
3, 1981). The suspension codified by Congress permitted the Commission
to introduce option trading, but only if the Commission could document
to its Congressional oversight committee its ability to regulate
successfully such transactions.4
\4\ See section 4c(c) of the CEA, as amended by the 1978 Act.
See 46 FR 33293, 33294 (June 29, 1981).
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Mindful of this history, in proposing a pilot program for the offer
and sale of options in 1981, the Commission expressly stated that it
was: 5
\5\ See 46 FR 33293, 33294 (June 29, 1981).
Cognizant of the need to exercise a strong degree of control
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over all aspects of commodity option trading.
Thus, the final domestic exchange-traded commodity option rules adopted
in 1981 authorized the introduction of options under a limited pilot
program which permitted only one option contract per exchange, did not
permit either foreign options or options on physical commodities to be
offered, and placed significantly greater self-regulatory
responsibilities on boards of trade than was then required for futures
trading, particularly with respect to the protection of the public from
sales practice abuses.6
\6\ See 46 FR 54500, 54502 (November 3, 1981).
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Evolution of Domestic Option Regulations
Although starting narrowly and cautiously, the Commission's options
regulations have evolved consistently with the acquisition of an
operational history under those regulations. Thus, in December 1982 the
Commission expanded the pilot program to permit each exchange to trade
one option on a futures contract and one option contract on a non-
agricultural physical commodity.7 The Commission continued to
expand the pilot program in a controlled and orderly manner so that
both the Commission and the exchanges would obtain greater experience
with the trading of options,8 subsequently expanding the pilot
program to permit more option contracts per exchange,9 to include
option contracts on futures contracts on agricultural
commodities,10 and ultimately, to eliminate the pilot status of
the option regulations.11
\7\ 47 FR 56996 (December 22, 1982).
\8\ Id. at 56997.
\9\ See, e.g., 49 FR 33641 (August 24, 1984) (permitting each
exchange to trade five contracts); 50 FR 45811 (November 4, 1985)
(increasing from five to eight the number of contracts permitted per
exchange).
\10\ 49 FR 2752 (January 23, 1984). The pilot program was
established after the statutory bar to trading options on domestic
agricultural commodities was repealed by section 206 of the Futures
Trading Act of 1982, Pub. L. 97-444, 96 Stat. 2294, 2301 (1983). The
Commission limited the pilot program to options on futures contracts
on agricultural products. The Commission noted that industry
commenters generally favored such a restriction and the Commission's
cautious approach. See 49 FR at 2754.
\11\ See 51 FR 17464 (May 13, 1986) (termination of pilot status
for non-agricultural options); 53 FR 777 (January 9, 1987)
(termination of pilot status for options on non-agricultural
physical commodities and on agricultural futures contracts).
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The Commission's incremental expansion of the domestic exchange-
traded options program was validated by Congress in 1986 when Congress
amended section 4c of the CEA to make permanent the program of
exchange-traded commodity options. As stated in the House Report on the
1986 legislation: 12
\12\ See H. Rep. 99-624, 99th Cong., 2d Sess. 15 (1986).
The Committee's amendment coincides with a recent decision by
the Commission to terminate the pilot status of the program for
trading options on futures contracts other than those on domestic
agricultural commodities and make the trading of such options
permanent. * * *
The Committee believes the Commission has practiced good
judgment in its regulation and oversight of both agricultural and
the nonagricultural options programs. Furthermore, the Committee is
satisfied that the overall experience with both of these pilot
programs indicates that few regulatory problems have arisen, and
that the exchanges have discharged their responsibilities
adequately. Additionally, the Commission has detected no adverse
effects on the underlying futures markets resulting from such option
trading.
Moreover, based on its administration of the option pilot program
for more than ten years, the Commission has previously determined to
eliminate certain provisions that were originally part of its options
designation requirements for which there were not comparable futures
regulation, such as:
--Rule 33.4(b)(9) which required a board of trade applying for
designation as a contract market with respect to commodity option
transactions to adopt special rules governing the handling by its
member FCMs of discretionary accounts in option transactions;
13
\13\ 58 FR 30701 (May 27, 1993). The Commission based this rule
change on its belief that compliance with the supervisory
requirements of rule 166.3, the requirements of rule 166.2
concerning authorization to trade, other Commission rules of general
applicability, and SRO rules such as NFA compliance rule 2-8, should
be adequate to address the regulatory concerns applicable to both
option and futures customer discretionary accounts. See 58 FR 30701,
30702.
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--rules which require boards of trade designated as contract
markets for options to adopt rules requiring FCMs that engage in the
offer or sale of commodity options regulated under Part 33 to send
copies of customer complaints and their resolutions and copies of
all promotional materials to the members' designated self-regulatory
organization (DSRO); 14 and
\14\ See 57 FR 58976, 58977 (December 14, 1992) (such records
must however be maintained by the FCM for review as part of the
routine audit process); see generally 56 FR 43694 (September 4,
1991).
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--rules which required a specified volume of trading in the
underlying futures contract prior to designation; established a
delisting criterion for the trading of low-volume contracts; and
required exchanges to provide a comprehensive list of occupational
categories of commercial users of the commodity underlying the
option.15
\15\ 56 FR 43694 (September 4, 1991). The Commission also
revised rule 33.4(d) which had required exchanges to justify
expiration dates of less than 10 days before first notice day or
last trading day of the future, whichever comes first.
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History of Foreign Options Rules.
As noted above, the Commission's initial pilot programs did not
include foreign options.16 Thus the ban contained in section 4c of
the CEA remained in effect with respect to foreign options. A program
to authorize the offer and sale of foreign exchange-traded commodity
options was not implemented until 1987 with the general adoption of the
part 30 rules governing foreign futures and option transactions
generally.17 The Part 30 rules, among other things, provided a
mechanism for lifting the ban with respect to foreign exchange-traded
options. Under rule 30.3(a), foreign exchange-traded commodity options
are prohibited from being offered or sold in the United States unless
the Commission issues a product-specific order. The part 30 rules did
not similarly require a product-specific order for foreign futures
transactions.
\16\ See 46 FR 33293, 33294 (June 29, 1981).
\17\ 52 FR 28980 (August 5, 1987).
[[Page 63474]]
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As with the Commission's pilot program for domestic exchange-traded
options, the program for foreign exchange-traded commodity options also
has proceeded cautiously. Thus, in issuing the order for any foreign
market, the Commission has considered: (1) The availability of certain
information relevant to preventing abuses including, but not limited to
trade confirmation data; (2) the arrangements in place for assuring
that sales practice abuses do not occur; (3) the arrangements for U.S.
customers to redress grievances; and (4) the regulatory environment in
which such options are traded.18
\18\ See, e.g., 53 FR 28840 (July 29, 1988).
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In particular, the Commission placed great stress initially on its
ability to obtain information from the foreign exchange with respect to
transactions entered into on that exchange on behalf of U.S.
customers.19 As stated in the final rules: 20
\19\ See 52 FR 28980, 28988 (August 5, 1987).
\20\ Id.
In order to ensure that foreign commodity exchanges are both
willing and able to share appropriate information with the
Commission * * * the Commission has determined to make the issuance
of a Commission order a prerequisite to the lawful offer and sale of
such products.
Reevaluation of foreign options rules.
Since 1987 foreign option sales to U.S. customers have been
permitted under the Commission's part 30 rules. Such sales have
occurred without the type of sales abuses that historically had been
associated with commodity option activities. Contributing to this
success has been the requirement that foreign options be sold to U.S.
customers by futures commission merchants (which ensures among other
things the adequacy of firm capital, fitness of personnel and proper
supervision of sales practices); the Commission's Part 30 rules, which
seek to ensure that foreign firms directly soliciting U.S. customers
for foreign products are otherwise regulated as to their sales
practices; 21 and the undertaking by the National Futures
Association (NFA) to audit the foreign options sales practices of
domestic firms marketing foreign options to domestic customers.22
In particular, under the current regulatory scheme, firms engaged in
the offer or sale of foreign commodity options (and futures) to U.S.
customers must either be a Commission registrant or a foreign firm
which has qualified to sell foreign products in the United States under
the Commission's Part 30 rules based on substituted compliance with a
foreign jurisdiction's licensing and fitness requirements and subject
to certain other conditions to assure the availability of the firms'
records and its submission to Commission jurisdiction under the CEA and
U.S. law otherwise.
\21\ In reviewing the foreign regulatory program for purposes of
rule 30.10, the Commission's staff considers the sales practice
compliance review program in effect in the foreign jurisdiction.
\22\ Part 33 requires exchanges as a condition of designation as
a contract market to have specific options sales practice compliance
responsibilities. NFA and the futures exchanges participate in a
Joint Audit Plan (Plan) to reduce the duplication of audit and
financial surveillance work which otherwise could occur with respect
to FCMs which are members of more than one exchange. The plan
assigns primary audit and financial surveillance responsibility for
each FCM, which is a member of more than one of the SROs, to one of
the Plan participants. The SRO which has the primary responsibility
is known as that FCM's DSRO. NFA is the DSRO for all FCMs which are
not members of any commodity exchange and therefore, do not have an
exchange SRO and, in some cases, NFA by agreement is the DSRO for
certain exchange member firms. NFA also is the DSRO responsible for
surveillance over the financial reporting and recordkeeping by all
member CPOs, and independent introducing brokers (IBs), as well as
guaranteed IBs whose guaranteeing FCMs have NFA as the DSRO. NFA
also is charged with auditing for sales practice compliance all
member IBs, CTAs and CPOs, and branch offices of FCMs for which NFA
is DSRO, as well as all futures sales practices compliance not
contracted to another SRO.
To date, NFA has undertaken, in conjunction with specific
Commission orders under rule 30.3(a), to conduct sales practice
compliance auditing of registrants marketing particular foreign
commodity options under relevant arrangements with such firms' DSRO.
Therefore, any revisions to Commission rule 30.3 would be premised
on the existence of an audit program to assure general sales
practice compliance for all foreign commodity option transactions.
See also n. 21.
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In the case of NFA, NFA audits generally include the review and
analysis of a member firm's trading records, sales materials and
practices (sales practices compliance audits), and for FCMs and
independent IBs, accounting procedures, financial statements and
records (financial audits). NFA's audit programs are designed so that
the auditors must perform a certain amount of work at the member firm's
office, testing records and resolving any discrepancies. While all NFA
members are subject to audit, decisions concerning whether to audit a
particular firm are based on a number of factors, including NFA's
review of financial statements, monitoring of media advertising,
receipt of customer complaints, knowledge of the past history of the
firm and its principals, the time elapsed since the previous NFA audit,
potential effects of market movements and referrals outside of NFA.
NFA compliance audits have two major objectives: to determine
whether the firm is maintaining records in accordance with NFA rules
and applicable Commission regulations, and to ascertain that the firm
is being operated in a professional manner and that customers are
protected against unscrupulous activities, including fraudulent or
high-pressure sales practices. The compliance program specifically
examines the firm's practices in soliciting accounts and audits could
review, among other things: records of customers' orders; customer
confirmations and other account statements; records regarding handling
of discretionary accounts; disclosure documents, advertising and other
promotional material; records of customer complaints; and records
relative to the internal supervision of account executives, order
handling or sales personnel.23
\23\ See Commission rule 33.4(c); see also n. 22.
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The Commission believes that its experience since 1987 with foreign
options justifies a reexamination of the necessity of requiring a
specific option authorization order for each options contract offered
and sold in the United States, that is, the continuing need for
differential treatment of the offer or sale of foreign futures and
foreign options in the United States. Just as the Commission's domestic
exchange-traded option program has evolved on the basis of accumulated
operational experience, the Commission believes that a similar measured
evolution, based on experience, is warranted with respect to foreign
commodity options.
However, as noted above, the Commission believes that its existing
regulatory scheme governing domestic registered firms which deal
directly with the public in conjunction with the sales practice program
of the NFA--all subject to Commission oversight--should provide
adequate sales practice protections for customers who would engage in
foreign options transactions through registered FCMs. In this
connection, prior to adopting any final rules in this regard, the
Commission would need to be assured that arrangements exist through NFA
or otherwise to ensure that sales practice compliance audits of
registrants offering foreign commodity options will be undertaken,
thereby ensuring complete sales practice compliance audit coverage of
firms (which heretofore has been mandated on a product-specific basis
under rule 30.3 orders).
Similarly, the Commission's rule 30.10 orders permitting foreign
firms to directly solicit U.S. persons for foreign products address
options and futures sales practice concerns. In addition, the
Commission notes that existing 30.10 orders have been accompanied by
information-sharing arrangements
[[Page 63475]]
which assure Commission access to relevant information of the type
which previously may not have been available.24 The Commission
further recognizes that its ability to obtain information to confirm
the existence of transactions executed on foreign exchanges 25 has
been materially enhanced by the numerous information-sharing memoranda
of understanding and cooperative arrangements that have been entered
with foreign jurisdictions.\26\
\24\ Significantly, to date, the Commission has not had occasion
to request any information under any information sharing arrangement
in connection with the approval of a particular exchange foreign
option product.
\25\ In explaining its decision to suspend the offer and sale of
foreign commodity options in the United States, the Commission noted
in 1977, among other things, that:
The Commission's investigators and auditors have also
encountered great difficulty in their attempts to verify the details
of option transactions purportedly effected for Americans on foreign
exchanges.
See 43 FR 16153, 16155 (April 17, 1977).
\26\ For example, such regulatory and enforcement MOUs and
cooperative arrangements have been entered into with authorities in
Australia, Argentina, Brazil, Canada, France, Hong Kong, Italy,
Japan, Mexico, the Netherlands, Singapore, Spain, Taiwan, and the
United Kingdom.
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Nor would elimination of the authorization requirement negatively
affect the access of U.S. customers to existing customer complaint
procedures, either under existing rule 30.10 orders for customers
directly solicited by foreign firms or under NFA's arbitration rules
governing disputes with a foreign party.
Customers solicited by foreign firms operating under a rule 30.10
order will, pursuant to the express terms of such orders, have access
to arbitration procedures both abroad and through NFA. Customers
transacting through a domestic firm will have the option of electing
NFA arbitration procedures. NFA rules governing arbitration of disputes
involving foreign parties provide that disputes involving a foreign
party may, in the discretion of NFA, be arbitrated if the parties agree
to such arbitration (see NFA foreign arbitration rule sec. 2(a)(1)).
Demands for arbitration will be rejected, however, if the claim arises
primarily out of delivery, clearance, settlement or floor practices of
a foreign exchange unless the foreign jurisdiction has no program for
the resolution of disputes, in which case NFA will hear such claims.
The rule 30.10 order permits the 30.10 firm to require a customer to
consent to use a foreign regulator's non-binding mediation or
conciliation service prior to initiating an NFA arbitration case. (See
NFA Arbitration Policy Statement (March 1, 1989)).
Thus, whether solicited by Commission registrants or foreign firms
operating under rule 30.10, the Commission believes that the systems in
place to address sales practice abuses and information sharing warrant
reexamination of existing procedures.
Finally, the Commission notes that FCMs which are not members of
foreign exchanges should assure themselves that there are no statutory
or regulatory impediments on their ability to obtain information from
foreign exchange-members firms necessary to enable such FCMs to comply
with the CEA and regulations thereunder relative to confirming the
execution of foreign option transactions.
In conclusion, the Commission believes that the differential
treatment of foreign options no longer is justified. Indeed, to the
extent that such differential treatment continues under circumstances
when such treatment is not warranted based on existing economic and/or
regulatory concerns, it risks conveying to traders the incorrect
impression that the Commission can provide a greater level of
protection with respect to foreign options than with respect to foreign
futures. Moreover, as domestic exchanges increasingly seek to link
their exchanges electronically with other exchanges worldwide, the
presence of an authorization process for commodity options raises,
under the current circumstances, an unnecessary obstacle that could
competitively disadvantage domestic exchanges.
Proposal
The Commission is therefore proposing to eliminate rule 30.3's
requirement that no foreign option may be offered or sold in the United
States until the Commission, by order, authorizes such foreign
commodity option to be offered or sold in the United States.
The Commission notes that the proposed elimination of the specific
authorization requirement in rule 30.3(a) will not affect the existing
product restrictions applicable to options on futures contracts based
on stock index products (i.e., the underlying stock index futures must
be the subject of a no-action letter issued by the CFTC's Office of the
General Counsel) and foreign government debt (i.e., the debt product
must be designated by the SEC as an exempted security under SEC rule
13a-8) contained in section 2(a)(1)(B)(v) of the CEA.
Accordingly, the Commission invites comment from interested parties
on its proposal. Moreover, the Commission specifically invites the
contract markets to indicate any other areas in which the designation
requirements for options and futures generally could be further
harmonized.
Other Matters
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq.,
requires that agencies, in proposing rules, consider the impact of
those rules on small businesses. The Commission has previously
determined that FCMs should be excluded from the definition of ``small
entity'' based upon the fiduciary nature of the FCM/customer
relationships as well as the fact that FCMs must meet minimum financial
requirements. 47 FR 18618, 18619 (April 30, 1982). The Commission
similarly determined that CPOs are not small entities for purposes of
the RFA. 47 FR 18618, 18620 (April 30, 1982). With respect to CTAs and
IBs, the Commission has stated that it would evaluate within the
context of a particular rule proposal whether all or some affected CTAs
would be considered to be small entities and, if so, the economic
impact on them of any rule. 47 FR 18618, 18620 (April 30, 1982) (CTAs);
48 FR 35248, 35276 (August 3, 1983) (IBs).
The proposed amendment of rule 30.3 is intended to facilitate the
ability of Commission registrants or exempted firms to provide
customers with access to desired products by eliminating a current
product-by-product authorization requirement, thus providing easier
access to a greater number of persons.
Accordingly, the Chairman, on behalf of the Commission, hereby
certifies, pursuant to 5 U.S.C. 605(b), that the proposed rule will not
have a significant economic impact on a substantial number of small
entities.
Paperwork Reduction Act
The Paperwork Reduction Act of 1980 (Act), 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 Act. The Commission has
determined that the proposed amendment does not have any paperwork
burden.
Persons wishing to comment on the Commission's determination on the
paperwork burden concerning this proposed rule should contact Jeff
Hill,
[[Page 63476]]
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 Mink, CFTC Clearance Officer, Three
Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581;
telephone (202) 418-5170.
List of Subjects in 17 CFR Part 30
Commodity futures.
In consideration of the foregoing, and pursuant to the authority
contained in the Commodity Exchange Act and, in particular, sections
2(a)(1)(A), 4, 4c and 8a of the Commodity Exchange Act, 7 U.S.C. 2, 6,
6c and 12a, the Commission hereby proposes to amend part 30 of chapter
I of title 17 of the Code of Federal Regulations as follows:
PART 30--FOREIGN FUTURES AND FOREIGN OPTIONS TRANSACTIONS
1. The authority citation for part 30 continues to read as follows:
Authority: Secs. 2(a)(1)(A), 4, 4c and 8a of the Commodity
Exchange Act, 7 U.S.C. 2, 6, 6c and 12a.
2. Section 30.3 is proposed to be amended by revising paragraph (a)
to read as follows:
Sec. 30.3 Prohibited transactions.
(a) It shall be unlawful for any person to engage in the offer and
sale of any foreign futures contract or foreign options transaction for
or on behalf of a foreign futures or foreign options customer, except
in accordance with the provisions of this part: Provided, that, with
the exception of the disclosure and antifraud provisions set forth in
Secs. 30.6 and 30.9 of this part, the provisions of this part shall not
apply to transactions executed on a foreign board of trade, and carried
for or on behalf of a customer at a designated contract market, subject
to an agreement with and rules of a contract market which permit
positions in a commodity interest which have been established on one
market to be liquidated on another market.
* * * * *
Issued in Washington, D.C. on December 5, 1995 by the
Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 95-30046 Filed 12-8-95; 8:45 am]
BILLING CODE 6351-01-P
