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From: Riley, John <JRiley@CFTC.

gov>
Sent: Wednesday, November 25,200910:11 AM
To: elizabethJitter@agriculture.senate.gov; Claussen, Cory (Agriculture)
<Cory_ Claussen@agriculture.senate.gov>
Cc: Leslie, Douglass <dleslie@CFTC.gov>; Arbit, Terry <tarbit@CFTC.gov>
Subject: CFTC Staff Technical Assistance: CFPA, Hedge Funds, portfolio margining
Attach: Senate Agriculture Committee-cftc staff technical comments re CFPA
11.25.09.docx; Senate Agriculture Committee-cftc staff technical comments re
hedge fund registration 11.25.09.docx; Senate Agriculture Committee-cftc staff
technical comments re portfolio margining 11.25.09.docx

Elizabeth and Cory -

I'm attaching three documents consisting ofCFTC Staff Technical Assistance. They relate to Titles in the
Senate Banking Committee's financial reform package other than the OTC title. Each item includes an
explanation. However, as further introduction, I include a note from Terry below. If you have any questions,
please let me know.

John

Terry's note:

The 3 issues covered by the attached documents are as follows:

1. Consumer Financial Protection Agency: While this legislation attempts to carve out areas within
CFTC jurisdiction from the scope of the proposed new consumer agency, staff believes that the way it has done so
is incomplete (and less than what it does on the securities side).

2. Hedge Funds: These two items of suggested statutory text are important clarifications for the CFTC
enforcement program.

3. Portfolio Margining: We are working with SEC to try to develop statutory text to implement the
portfolio margining recommendation that was contained in the recent CFTC-SEC Harmonization Report. But one
part of the legislative package that will be needed is already included in the Senate Banking Committee's
legislative proposal -- a provision that would amend the Securities Investors Protection Act (SIPA) to extend its
coverage to futures placed into a securities account. CFTC staff is proposing a wording change to this provision.

Please note:

i) Hopefully, all of the page and line numbers, as well as the references to Titles and Subtitles, in
the attached documents successfully tie into the Chairman's Mark Text that is posted on the Senate Banking
Committee website. But as you know, there are a lot of different versions of these bills floating around at this
point. If there is any confusion or uncertainty regarding where these suggested changes apply, please let us know.

ii) One more technical assistance piece is coming. We have a 4th document regarding the
definition of a "financial company," but that needs a bit more work to adapt it to the Senate Banking Committee's
Chairman's Mark, and I don't want to hold up getting these 3 document into your hands in the meantime. We
hope to have the last piece finalized and up to you this morning.

CFTC-CREW-0421
John P. Riley
Director of Legislative Affairs
Office ofthe Chairman
u.s. Connnodity Futures Trading Connnission
115521 51 St., NW
Washington, DC 20581
(202) 418-5383
JRi1ey@CFTC.gov

CFTC-CREW-0422