Next week, I have appointments with our CFTC regulators. Steve Petillo, NIBA President, and I are going to Washington, DC to meet the three new members of the Commission along with Commissioner Weijen, the remaining member of the past group of five.
Our agenda points include a discussion of Regulation 1.22 -- dubbed the "residual interest" rule, and Regulation 1.35 -- the recording rule which chiefly applies to cell phone use. The first phase of Reg. 1.22 is due to become effective in November. NIBA has not spoken to any registrant who believes this regulation is good for the industry, and that is what we will be telling the Commission. We have consistently opposed this regulation since it was proposed for reasons including that we do not believe it serves any customer protection goal, and will have the effect of making it more difficult for many of our customers to take part in the markets. We intend to stress the points made in our opinion letter submitted to the CFTC February 15, 2013.
I am still hearing from NIBA members who are trying to comply with Regulation 1.35, recording of communication which leads to a transaction. The Association, along with a majority of industry registrants, opposed this rule as far back as August 8, 2011 when it was proposed. We believe the expense involved in the recording and tracking process, and the difficulty of enforcement are only two concerns surrounding this rule. Several of our members have reported it cost about $10,000 to install the applications needed to record these conversations, and applications for texting are not very effective. They also report that additional employee time must be allocated in order to supervise APs and that their offices are spending substantial monies monthly to comply.
We do not anticipate that the Commission will repeal these two regulations. Our goal is to have the Commissioners understand the IB and CTA communities more clearly -- who we are, who our customers are and what we contribute to the industry as opposed to large hedge fund managers, trading facilities and other entities who lobby the CFTC with their specific concerns. The previous panel of Commissioners did not seem to realize the very real consequences of their rule-making on our businesses and on the interests of our clients. We will have a report the week following our DC appointments.
Regulations 1.22 and 1.35 are the topics of the BIG issue panel at the NIBA fall conference this year. Scheduled for September 22 in Chicago, the meeting also includes panels on compliance for swaps IBs and CTAs; tax issues which may effect your IRS reporting; marketing and compliance issues for CTAs and IBs who offer CTA-managed accounts; and, our annual NFA IB and CTA elected representatives review.
A CBOT floor tour, and demonstration hall at the CME Group building are on the agenda. And you will not want to miss the Box Lunch with Blu Putnam, CME Group Chief Economist. A cocktail reception wraps up the day's events. Registration is now open.