CFTC Permits Use of Electronic Signatures by Customers of FCMs, Clients of CTAs and Commodity Pool Participants

Washington, D.C. -- As part of its continuing efforts to tailor its regulatory framework to technological advances in the futures trading industry, the Commodity Futures Trading Commission (the "Commission") has adopted new Rule 1.4 to permit the use of electronic signatures in lieu of handwritten signatures in those instances in which Commission regulations require the signature of a customer of a futures commission merchant ("FCM") or introducing broker ("IB"), a participant in a commodity pool or a client of a commodity trading advisor ("CTA"). Accompanying Rule 1.3(tt) adds to the Commission's regulations a definition of "electronic signature" that parallels the definition in the Uniform Electronic Transactions Act recently approved and recommended for adoption in all the States by the National Conference of Commissioners of Uniform State Laws.

Under the new rules, registrants may accept electronic signatures for such purposes as acknowledgment of receipt of required disclosures and authorization to effect transactions without specific advance notice, among other things. Registrants are required to employ reasonable safeguards and to comply with applicable Federal law and Commission regulations. Registrants should be mindful that they remain obligated diligently to supervise the handling of commodity interest accounts.

The final rules have been forwarded for publication in the Federal Register and they will become effective upon publication. The final rules will also be posted on the Commission’s home page (http://www.cftc.gov/). Copies of the final rules also may be obtained by contacting the Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5100.