Conflicts and Affiliations

but they do not specifically address the concerns presented when an SRO has an affiliate FCM. --------------------------------------------------------------------------- \81\ 17 CFR 1.52(c)(1). \82\ 17 CFR 1.52(c)(2)(i), (d)(2)(ii)(C)(1). --------------------------------------------------------------------------- As described above, Commission Regulation 1.52 permits two or more SROs to file with the Commission a plan for delegating to a DSRO, for any FCM that is a member of more than one such SRO, the function of monitoring and examining that FCM for compliance with minimum financial and related reporting requirements.\83\ The SROs participating in such a plan form a JAC which establishes and operates a Commission-approved Joint Audit Program and designates the DSRO responsible for the examination of each FCM.\84\ Under this framework, the assignment of a particular FCM to a particular DSRO is made by the JAC pursuant to the plan; the FCM itself plays no role in selecting its DSRO and is notified of the DSRO to which it has been assigned.\85\ --------------------------------------------------------------------------- \83\ 17 CFR 1.52(d)(1). \84\ 17 CFR 1.52(d)(2)(i). \85\ See 17 CFR 1.52(i)(2). --------------------------------------------------------------------------- There is currently one Joint Audit Program, which has its origins in a Joint Audit Agreement entered into in