[Federal Register Volume 59, Number 158 (Wednesday, August 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19437]
[[Page Unknown]]
[Federal Register: August 17, 1994]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 30
Limited Marketing Activities From a United States Location by
Certain Firms and Their Employees or Other Representatives Exempted
Under Commodity Futures Trading Commission Rule 30.10
AGENCY: Commodity Futures Trading Commission.
ACTION: Order.
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SUMMARY: The Commodity Futures Trading Commission (``Commission'' or
``CFTC''), subject to the conditions specified below, is expanding the
category of persons to whom firms operating pursuant to the Limited
Marketing Order issued on October 28, 1992 may direct limited marketing
conduct with respect to foreign futures or option contracts within the
United States through their employees or other representatives. The
relief as originally issued was limited to conduct directed towards
institutions and governmental entities identified in condition 5 of the
Limited Marketing Order whose description in terms of status and assets
has been derived generally from the definition of ``qualified eligible
participant'' (``QEP'') as that term is defined in Commission rule
4.7(a)(1)(ii), 17 CFR 4.7(a)(1)(ii). This Order will expand the relief
to conduct directed towards all ``accredited investors'' as that term
is defined in the Securities and Exchange Commission's (``SEC'')
Regulation D issued pursuant to the Securities Act of 1933.
EFFECTIVE DATE: August 17, 1994.
FOR FURTHER INFORMATION CONTACT: Jane C. Kang, Esq., or Francey L.
Youngberg, Esq., Division of Trading and Markets, Commodity Futures
Trading Commission, 2033 K Street, N.W., Washington, D.C. 20581.
Telephone: (202) 254-8955.
SUPPLEMENTARY INFORMATION: On October 28, 1992, the Commission issued
an Order under rule 30.10, 17 CFR 30.10, to permit firms that have
received rule 30.10 relief, to engage in limited marketing conduct with
respect to foreign futures or option contracts within the United States
through their employees or other representatives. 57 FR 49644 (November
3, 1992).
Among other conditions,\1\ the Order provided that such
solicitation or marketing activities occurring within the United States
be limited to such activities directed towards certain institutions and
governmental entities whose description in terms of status and assets
has been derived generally from the definition of QEP as that term is
defined in Commission rule 4.7(a)(1)(ii), 17 CFR 4.7(a)(1)(ii). The
Commission noted that the Order was a first step and that absent any
problems that would warrant a reconsideration of the appropriateness of
permitting rule 30.10 firms to operate in accordance with the Order,
the Commission may in due course expand the scope of the relief. Upon
consideration of the matter, in particular, that no issues have arisen
in connection with the operation of the Limited Marketing Order in the
two years since its issuance, the CFTC is amending condition (5) of the
Order issued on October 28, 1992 expanding the relief to be generally
consistent with the term ``accredited investors'' as defined in section
230.501(a) of Securities Exchange Commission Regulation D promulgated
pursuant to the Securities Act of 1933, 17 CFR 230.501(a), who are not
already included within the scope of current condition (5) of the
Limited Marketing Order.
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\1\The Limited Marketing Order also required that the regulatory
or self-regulatory organization to which the Commission issued 30.10
relief or its equivalent obtain written confirmation from the
Commission that the Order applies to such rule 30.10 order. To date,
the following regulatory or self-regulatory organizations have
requested and received confirmation from the Commission that the
Order will apply to their members: 1) Commission des Operations de
Bourse (December 4, 1992); 2) The Securities and Investment Board
(December 30, 1992); 3) Investment Management Regulatory
Organisation (December 30, 1992); 4) Securities and Futures
Authority (December 30, 1992); 5) The Montreal Exchange (February
10, 1993); and 6) Sydney Futures Exchange (June 30, 1993). In this
connection, the Commission would need to confirm the application of
this expanded relief to each of the organizations referred to above.
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Accordingly, condition (5) of the Order is amended as follows (new
language is italic):
``(5) Such soliciting or marketing activities occurring within the
United States will be limited to such activities directed to the
following persons, acting either for their own account or the account
of another entity which is described below:
(a) A futures commission merchant, introducing broker, commodity
pool operator or commodity trading advisor registered as such with the
Commission;
(b) A broker or dealer registered pursuant to section 15 of the
Securities Exchange Act of 1934;
(c) An investment company registered under the Investment Company
Act of 1940 or a business development company defined in section
2(a)(48) of that Act;
(d) A bank as defined in section 3(a)(2) of the Securities Act of
1933 (``Securities Act''), or any savings and loan association or other
institution as defined in section 3(a)(5)(A) of the Securities Act;
(e) An insurance company as defined in section 2(13) of the
Securities Act;
(f) A plan established by and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan
has total assets in excess of $5,000,000;
(g) An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, Provided, That the investment
decision is made by a plan fiduciary, as defined in section 3(21) of
such Act, which is a bank, savings and loan association, insurance
company or registered investment adviser, or that the employee benefit
plan has total assets in excess of $5,000,000; or, if a self-directed
plan, with investment decisions made solely by persons that are
accredited investors as defined in 17 CFR 230.501(a);
(h) A private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940;
(i) An organization described in section 501(c)(3) of the Internal
Revenue Code, with total assets in excess of $5,000,000;
(j) A corporation, Massachusetts or similar business trust, or
partnership, other than a pool, which has total assets in excess of
$5,000,000;
(k) A pool, trust, insurance company separate account or bank
collective trust, with total assets in excess of $5,000,000;
(l) A governmental entity (including the United States, a state, or
a foreign government) or political subdivision thereof, or a
multinational or supranational entity or an instrumentality, agency or
department of any of the foregoing;
(m) A Small Business Investment Company licensed by the U.S. Small
Business Administration under section 301 (c) or (d) of the Small
Business Investment Act of 1958;
(n) Any natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his purchase exceeds
$1,000,000;
(o) Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current
year; and
(p) Any entity in which all of the equity owners are accredited
investors as defined in 17 CFR 230.501(a).''
In all other respects, the terms and conditions of the Commission's
Part 30 Order issued on October 28, 1992, including the requirement
that the foreign regulatory or self-regulatory organization to which
the Commission's rule 30.10 Order was issued obtain a written
confirmation from the Commission that the Order applies to firms in its
jurisdiction with confirmed rule 30.10 relief, remain unchanged.
List of Subjects in 17 CFR Part 30
Commodity futures, Consumer protection, Fraud.
Issued in Washington, DC, on August 4, 1994.
Jean A. Webb,
Secretary of the Commission.
Accordingly, Chapter I of Title 17 of the CFR is amended as set
forth below:
PART 30--FOREIGN FUTURES AND FOREIGN OPTIONS TRANSACTIONS
1. The authority citation for part 30 continues to read as follows:
Authority: 7 U.S.C. 1a, 2, 4, 6, 6c and 12a, unless otherwise
noted.
2. Appendix A to part 30 is amended by adding a new center heading
and listing at the end of the appendix to read as follows:
Appendix A to Part 30--Interpretative Statement With Respect to the
Commission's Exemptive Authority Under Sec. 30.10 of its Rules
* * * * *
Marketing Activities by Firms Granted Rule 30.10 Relief
FR date and citation: November 3, 1992, 57 FR 49644; August 17,
1994, 59 FR [insert FR page number].
[FR Doc. 94-19437 Filed 8-16-94; 8:45 am]
BILLING CODE 6351-01-P