Re: Commodity Futures Modernization Act of 2000

                     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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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 December 15, 2000, both the House of
Representatives and the Senate passed the Commodity Futures
Modernization Act of 2000 (the "CFMA"), which represents a dramatic
overhaul of the Commodity Exchange Act (the "CEA") and of the
regulatory scheme applicable to exchanger-traded futures and options
on futures as well as over-the-counter derivatives.  The bill will
become effective, for the most part, upon execution by President Clinton,
which is expected to occur this week. Among other things, the CFMA
provides legal certainty for a wide range of over-the-counter products
that previously could have been considered illegal off-exchange futures
contracts or commodity options, as well as legal certainty for swaps
under the federal securities laws, permits the organization and
operation of "derivatives transaction execution facilities", which will
be subject to only minimal regulatory oversight,and repeals the so-called
"Shad/Johnson Accord", which will allow futures exchanges and securities
exchanges to list futures on individual equity securities or narrow
baskets of securities.  The CFMA largely supersedes many of the Final
Rules with respect to a New Regulatory Framework adopted by the
Commodity Futures Trading Commission (the "CFTC") on November 22, 2000
(with the exception of the Shad/Johnson repeal, which was not addressed
in such Rules),and it is anticipated that the Final Rules will, for the
most part, be rescinded.




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 - CMS10701.pdf