Release: #4571-01
For Release: September 27, 2001

CFTC AND SEC PROPOSE JOINT RULES
RELATING TO MARGIN REQUIREMENTS AND
TREATMENT OF CUSTOMER FUNDS FOR SECURITY FUTURES PRODUCTS

Washington, D.C. –The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have proposed additional rules relating to the implementation of provisions of the Commodity Futures Modernization Act of 2000 (CFMA). The CFMA lifted the 19-year ban on the trading of single-stock and narrow-based stock index futures in this country.

First, the SEC and CFTC approved joint proposed rules governing the collection of customer margin for security futures. The proposed rules would apply to margin arrangements between intermediaries and their customers with respect to security futures.

Second, the SEC approved proposed amendments to the SEC’s customer protection rule, Exchange Act rule 15c3-3, and the CFTC proposed a new rule, rule 41.42, each of which is designed to eliminate duplicative and conflicting regulations relating to the treatment of customer funds, securities and property that are applicable to firms fully registered with both the SEC and the CFTC. Finally, the SEC and CFTC are each proposing rule changes that would eliminate certain conflicting or duplicative recordkeeping and reporting requirements involving security futures products.

The proposed rules will be published in the Federal Register for a 30-day comment period. Copies of the proposed rules are available on the websites of the CFTC and the SEC, at www.cftc.gov and www.sec.gov, respectively.

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