RE: SEC/CFMA

Since we are not an FCM or an IB, I think we can let this one go.

-----Original Message-----
From: Long, Chris
Sent: Monday, July 02, 2001 8:48 AM
To: Taylor, Mark E (Legal)
Cc: Robertson, Linda
Subject: SEC/CFMA

Mark - Should we follow? comment?

----- Forwarded by Chris Long/Corp/Enron on 07/02/2001 09:46 AM -----

Larry Decker 07/02/2001 09:23 AM To: Chris Long/Corp/Enron@ENRON cc: Subject: SEC/CFMA

No. 126 Monday July 2, 2001 Page A-3
ISSN 1523-567X
Regulation, Law & Economics

Futures Trading SEC Proposals Would Implement CFMA, Altering BD Registration Requirements

The Securities and Exchange Commission June 26 published proposed rules to implement parts of the Commodity Futures Modernization Act of 2000, including amendments to the SEC's broker-dealer registration requirements and Form BD (Release No. 34-4455, 6/20/01; 66 Fed. Reg. 34042, 6/26/01).
Those amendments would implement CFMA Section 203, which allows futures commission merchants and introducing brokers that are registered with the Commodity Futures Trading Commission to register with the SEC as broker-dealers for the limited purpose of effecting transactions in certain security futures products. SEC registration in such cases would be accomplished by filing notice with the SEC.
In addition, the SEC proposed a conditional exemption from registration under 1934 Securities Exchange Act Section 15(a). The proposed exemption would "provide guidance on the extent to which a broker-dealer registered by notice may trade security futures products," the SEC said. It would allow a broker-dealer registered by notice to trade any security futures products as long as the broker-dealer did not become a member of a registered national securities exchange or national securities association.
Finally, the commission proposed changes to Regulation S-P, which was adopted under the Gramm-Leach-Bliley Act. "These amendments would revise certain provisions of Regulation S-P in light of section 124 of the CFMA, which makes the privacy provisions of the Gramm-Leach-Bliley Act applicable to activity regulated by the CFTC." These amendments would permit futures commission merchants and introducing brokers registered by notice with the SEC as broker-dealers to comply with Regulation S-P by adhering to the CFTC's financial privacy rules, the SEC said.
Comments are due by July 26, 2001, and should refer to File No. S7-13-01.