On April 27, the Commodity Futures Trading Commission announced its adoption of a final definition of “public director” for the acceptable practices to Section 5(d)(15) (Core Principle 15) of the Commodity Exchange Act. Core Principle 15 requires designated contract markets (DCMs) to establish and enforce rules to minimize conflicts of interest in the decision making process; the acceptable practices provide guidance on the composition of a DCM’s board of directors and certain committees. The acceptable practices provide, among other things, that at least 35% of a DCM’s board and any executive committees consist of public directors, that a DCM’s regulatory programs fall under the authority of a board-level regulatory oversight committee consisting exclusively of public directors, and that a DCM’s disciplinary panels include at least one public director. The definition of “public director” includes a materiality test, requiring a public director to “have no material relationships with the contract market,” and describes certain relationships that are deemed to be material. DCMs must demonstrate full compliance with Core Principle 15 by April 27, 2010.  

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