[Federal Register: June 25, 2002 (Volume 67, Number 122)]
[Rules and Regulations]               
[Page 42709-42710]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25jn02-2]                         

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 4

RIN 3038-AB60

 
Profile Documents for Commodity Pools; Correction

AGENCY: Commodity Futures Trading Commission.

ACTION: Correcting amendments.

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SUMMARY: This document contains corrections to the final regulations 
that were published in the Federal Register of October 2, 2000 (65 FR 
58648). The regulations related to accommodating National Futures 
Association's (``NFA'') Rule 2-35(d) regarding profile documents for 
commodity pools and establishing procedures for the use, amendment and 
filing of profile documents that are parallel to those applicable to 
disclosure documents.

DATES: Effective July 25, 2002.

FOR FURTHER INFORMATION CONTACT: Eileen R. Chotiner, Futures Trading 
Specialist, (202) 418-5467, electronic mail: ``echotiner@cftc.gov,'' 
Division of Trading and Markets, Commodity Futures Trading Commission, 
1155 21st Street, NW., Washington, DC 20581.

SUPPLEMENTARY INFORMATION: Commission regulation 4.26(b), which was 
adopted in 1995,\1\ required a commodity pool operator (``CPO'') to 
attach the most current account statement and annual report for the 
pool to the disclosure document used to solicit prospective 
participants. As an alternative to attaching the account statement, the 
COP was permitted to provide information concerning the performance of 
the pool that was current within 60 days of the date the disclosure 
document was distributed.
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    \1\ 46 FR 38146 at 38189 (July 25, 1995).
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    In July 2000, the Commission proposed changes to its rules to 
permit CPOs to use a summary or ``profile'' comment prior to delivery 
of the pool's disclosure document, in accordance with rules proposed by 
NFA.\2\ The sole change the Commission proposed to Rule 4.26 was to 
extend to profile documents the provision requiring correction of a 
materially inaccurate or incomplete disclosure document. The Commission 
received only one comment letter on the proposed changes, which 
supported the amendments. The comment letter did not address the 
proposed change to Rule 4.26.
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    \2\ 65 FR 46122 (July 27, 2000).
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    The commission adopted final rules that were essentially the same 
as those proposed.\3\ Subsequent to publication of these rules, it has 
come to the Commission's attention that the revised text was 
inadvertently substituted for section 4.26(b) rather than 4.26(c). 
Today's amendment restores the text of 4.26(b), which requires that the 
most recent account statement and annual report be attached to 
commodity pool disclosure documents, and deletes the text of 4.26(c) 
that was intended to be replaced.
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    \3\ 65 FR 58648 (October 2, 2000).
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    Section 553(b) of the Administrative Procedure Act (``APA''), 5 
U.S.C. 553(b), generally requires that notice of proposed rulemaking be 
published in the Federal Register and that an opportunity for public 
comment be

[[Page 42710]]

provided when an agency promulgates new rules. APA Sec. 553(b)(B) 
provides an exception to this requirement ``when the agency for good 
cause finds (and incorporates the finding and a brief statement of 
reasons therefore in the rules issued) that notice and public procedure 
thereon are impracticable, unnecessary, or contrary to the public 
interest.'' Commission staff have been advised by National Futures 
Association, the designated self-regulatory association (``DSRO'') for 
CPOs, that despite the inadvertent amendment of Rule 4.26(b), CPOs have 
been following the rule as though the requirement for the most current 
account statement and annual report had not been eliminated. Thus, the 
Commission has determined that publication of this correction for 
comment is unnecessary because CPOs, the entities subject to the rule, 
have been operating as though the rule had been in effect.

Related Matters

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-611 (1994), 
requires that agencies, in proposing rules, consider the impact of 
those rules on small businesses. The Commission has previously 
established certain definitions of ``small entities'' to be used by the 
Commission in evaluating the impact of its rules on such entities in 
accordance with the RFA.\4\ The Commission previously has determined 
that registered CPOs are not small entities for the purpose of the 
RFA.\5\ Therefore, the Chairman, on behalf of the Commission, hereby 
certifies, pursuant to 5 U.S.C. 605(b), that the action taken herein 
will not have a significant economic impact on a substantial number of 
small entities.
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    \4\ 47 FR 18618-18621 (April 30, 1982).
    \5\ 47 FR 18619-18620.
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B. Paperwork Reduction Act

    This rule does not contain information collection requirements. 
Filing requirements regarding the disclosure document and information 
that must be distributed with it are included in section 4.21 and 4.22, 
which are part of an approved paperwork collection [OMB Control No. 
3038-0005].

C. Cost-Benefit Analysis

    Section 15 of the Commodity Exchange Act, as amended by section 119 
of the CFMA, requires the Commission, before promulgating a new 
regulation under the Act, to consider the costs and benefits of the 
Commission's action. Section 15 further specifies that costs and 
benefits shall be evaluated in light of five broad areas of market and 
public concern: (1) Protection of market participants and the public; 
(2) efficiency, competitiveness, and financial integrity of futures 
markets; (3) price discovery; (4) sound risk management practices; and 
(5) other public interest considerations. The Commission may, in its 
discretion, give greater weight to any one of the five enumerated areas 
of concern and may, in its discretion, determine that, notwithstanding 
its costs, a particular regulation was necessary or appropriate to 
protect the public interest or to effectuate any of the provisions or 
to accomplish any of the purposes of the Act.
    The main area of concern relevant to this rulemaking is the first 
set forth in the Act, ``protection of market participants and the 
public.'' The other factors are inapplicable to this rule. The 
Commission concludes that the benefit to the public of receiving the 
financial information specified above outweighs the costs of providing 
the information.

List of Subjects in 17 CFR Part 4

    Brokers, Commodity futures Commodity pool operators, Commodity 
trading advisors.

    Accordingly, 17 CFR part 4 is corrected by making the following 
correcting amendments:

PART 4--COMMODITY POOL OPERATORS AND COMMODITY TRADING ADVISORS

    1. The authority citation for Part 4 continues to read as follows:

    Authority: 7 U.S.C. 1a, 2, 4, 6b, 6c, 6l, 6m, 6n, 6o, 12a, and 
23.

    2. Section 4.26 is amended by removing paragraph (c), redesignating 
paragraph (b) as paragraph (c), and adding a new paragraph (b) to read 
as follows:


Sec. 4.26  Use, amendment and filing of Disclosure Document.

    (a) * * *
    (b) The commodity pool operator must attach to the Disclosure 
Document the most current Account Statement and Annual Report for the 
pool required to be distributed in accordance with Sec. 4.22; provided, 
however, that in lieu of the most current Account Statement the 
commodity pool operator may provide performance information for the 
pool current as of a date not more than sixty days prior to the date on 
which the Disclosure Document is distributed and covering the period 
since the most recent performance information contained in the 
Disclosure Document.
* * * * *

    Issued in Washington, DC on June 19, 2002 by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 02-15994 Filed 6-24-02; 8:45 am]
BILLING CODE 6351-01-M