Business Affiliate Marketing Regulation
|FINAL RULE: Business Affiliate Marketing Regulation Approved at CFTC Open Meeting, July 7, 2011|
|Final Rule Issue||Effective Date||Compliance Date|
|July 22, 2011||September 20, 2011||September 21, 2012|
On July 7, 2011, the CFTC held an open meeting to discuss five final rulemakings under the Dodd-Frank Act. Among the rules approved at the meeting was a final rule regarding protections to consumer information held by entities that are subject to CFTC jurisdiction.<ref>Open Meeting on Five Final Rule Proposals under the Dodd-Frank Act. CFTC. Retrieved on July 7, 2011.</ref>
The Dodd-Frank Act amended the Fair Credit Reporting Act (FCRA) to prohibit the use of certain consumer information for marketing purposes. Entities subject to CFTC jurisdiction will be required to establish programs for proper use and disposal of consumer information. The affected entities include:
- futures commission merchants,
- retail foreign exchange dealers,
- commodity trading advisors,
- commodity pool operators,
- introducing brokers, and
- swap dealers and major swap participants.
According to the final rules:
- An entity subject to CFTC jurisdiction can make solicitations to a consumer based on that consumer’s information if the consumer is given clear, conspicuous and concise notice, is given a reasonable opportunity to opt out of such use of the information; and the consumer chooses not to opt out. An opt-out period would be effective for five years.
- "Reasonable disposal" includes:
- Implementing and monitoring compliance with policies and procedures that require the burning, pulverizing, or shredding of papers containing consumer information so that the information cannot practicably be read or reconstructed;
- Implementing and monitoring compliance with policies and procedures that require the destruction or erasure of electronic media containing consumer information so that the information cannot practically be read or reconstructed; and
- After due diligence, entering into and monitoring compliance with a written contract with another party engaged in the business of record destruction to dispose of consumer information in a manner that is consistent with these regulations.
The regulations will become effective 120 days after publication in the Federal Register.<ref>Final Regulations Regarding the Protection of Consumer Information Under the Fair Credit Reporting Act. CFTC. Retrieved on July 7, 2011.</ref>
On October 19, 2010, the Commodity Futures Trading Commission (CFTC) held its second in the series of open meetings to consider the issuance of proposed rulemakings under the Dodd-Frank Act. One of the agenda items was a proposed rule regarding protections to consumer information held by entities that are subject to Commission jurisdiction.<ref>Open Meeting on Second Series of Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on July 1, 2011.</ref>
Related Documents: Fact Sheet, Q&A, and Entire Rule as it Appeared in the Federal Register