[Federal Register Volume 61, Number 188 (Thursday, September 26, 1996)]
[Rules and Regulations]
[Pages 50431-50432]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24726]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 1
Correction of Trading Records
AGENCY: Commodity Futures Trading Commission.
ACTION: Final rule clarification.
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SUMMARY: On June 6, 1996, the Commodity Futures Trading Commission
(``Commission'' or ``CFTS'') published a proposed rule amendment to its
regulation to clarify a procedure specified for the correction of
erroneous information on trading cards and to make that procedure
applicable to other trading records.\1\ After consideration of comments
received, the Commission published a final rule amendment on August 20,
1996.\2\ One comment letter inadvertently was not mentioned in that
release.
\1\ 61 FR 28806 (June 6, 1996).
\2\ 61 FR 42999 (August 20, 1996).
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EFFECTIVE DATE: The final rule will become effective October 21, 1996.
FOR FURTHER INFORMATION CONTACT:
Duane C. Andresen, Special Counsel, Division of Trading and Markets,
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st
Street, NW., Washington, DC 20581. Telephone: (202) 418-5490.
SUPPLEMENTARY INFORMATION:
I. Introduction
The Commission amended Commission Regulation 1.35(d)(7), which
addresses the preparation, submission and correction of trading cards,
to make its provisions applicable to all trading records. The
Commission also amended the error correction procedures in paragraph
(d)(7)(ii) to state that a member may correct any errors by crossing
out erroneous information without obliterating or otherwise making
illegible any of the originally recorded information. The Commission
further amended paragraph (d)(7)(ii) to require that when errors on a
trading card are corrected by rewriting the trading card, the member
must submit a ply of the trading card, or in the absence of plies the
original trading card, that is subsequently rewritten in accordance
with contract market rules
[[Page 50432]]
which set forth the required collection schedule for trading cards.
II. Comment Received
The comment letter not previously addressed was received from the
Chicago Board of Trade (``CBT''). Many of the CBT's concerns were
mentioned by other commenters and were considered prior to publication
of the final rule amendment. Those concerns that were not specifically
addressed are discussed below.
A. Applicability
In its comment letter, the CBT stated that it is unclear what the
Commission means by ``trading records prepared for `flashed' orders''
and, further, that the amendment should not be applicable to broker
cards, which resemble trading cards and are used on a temporary basis
until a broker or his broker assistant has an opportunity to formally
endorse a written order ticket. The CBT stated that such cards are not
required to be used and not relied upon as an original source document
for clearing purposes. The CBT also stated that the amendment should
not be applicable to desk clerks recording customers' order
instructions.
The provisions of the amendment are applicable to trading records
prepared by a member of a contract market pursuant to contract market
rules. Thus, the provisions would be applicable to such trading records
as broker cards prepared for ``flashed'' orders if the broker cards
were prepared pursuant to contract market rules.\3\
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\3\ For example, the amendment's provisions would be applicable
to broker cards prepared pursuant to the CBT's Notice: Documentation
Required to Comply with CFTC's Order Regarding Immediately
Executable Flashed Orders, submitted for Commission review by letter
dated August 5, 1996.
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With regard to desk clerks recording customers' order instructions,
the provisions of the amendment are specifically applicable to order
tickets prepared under Regulation 1.35(a-1) (2), (3) or (4) or received
on the floor through electronic order routing systems. Desk clerks
correcting order instructions on the original order would be required
to correct the erroneous information, or reflect changed instructions
received from the customer, without obliterating or otherwise making
illegible any of the originally recorded information.
B. Trading Card Provision
The Commission specifically requested comment regarding the trading
card provision that permits correction of erroneous information by
rewriting the trading card. The CBT stated that the provision should be
retained, since members remain accountable for trading cards which are
subsequently rewritten.
The Commission determined to retain the provision that permits the
correction of erroneous information on trading cards by rewriting the
trading card. However, the Commission amended paragraph (d)(7)(ii) to
add the requirement that the member must submit a ply of the trading
card, or in the absence of plies the original trading card, that
subsequently is rewritten in accordance with contract market rules
which set forth the required collection schedule for trading cards.
III. Conclusion
The Commission has carefully reviewed and considered this comment
and believes that the commenter's concerns have been addressed.
Issued in Washington, DC, on September 20, 1996 by the
Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 96-24726 Filed 9-25-96; 8:45 am]
BILLING CODE 6351-01-M
