Re:  Commodity Futures Trading Commission: Proposed Rulemaking for a New 
Regulatory Framework for Trading Facilities

                    Attached is a memorandum from Sullivan & Cromwell
concerning the above subject. A summary is also included at the end of the 
text of this e-mail message.

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their native format.  Hard copies can be obtained from Ivy Moreno at S&C in 
New York, telephone 212-558-3448, e-mail: Morenoi@sullcrom.com.

SUMMARY

                    On March 9, 2001, the Commodity Futures Trading
Commission (the ''CFTC'') published proposed rules (the ''Proposed
Rules'') which are designed to implement certain provisions of the
Commodity Futures Modernization Act of 2000 (the ''CFMA'').  66 F.R. 14262.  
Comments are due on the Proposed Rules by April 9, 2001.

                    As discussed in our Memorandum dated December 21, 2000, 
the CFMA introduced a tiered approach to regulating boards of trade, 
establishing separate regulatory regimes for designated contract markets 
(subject to the highest level of regulatory oversight), derivatives 
transaction execution facilities (a new category of less regulated markets), 
and certain exempt markets (subject only to antifraud and anti-manipulation 
rules).  The Proposed Rules implement this tiered approach and reflect the 
CFTC's new oversight role with respect to markets and market participants, in 
contrast to the prior system of direct regulation.  The Proposed Rules 
generally track the CFMA closely and also provide guidance for complying with 
the CFMA's provisions.  This memorandum highlights the most significant 
Proposed Rules applicable to each of these types of markets.






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