For Release: July 6, 2000
CFTC Releases Rule Enforcement Review of Chicago Board of Trade
WASHINGTON Ė The Commodity Futures Trading Commission (Commission) has notified the Chicago Board of Trade (CBT) of the results of a rule enforcement review completed by the Commissionís Division of Trading and Markets (Division). The purpose of the review was to evaluate CBTís trade practice surveillance and disciplinary programs. The target period for the review was October 1, 1998, through September 30, 1999.
The Division found that CBT maintained an adequate trade practice surveillance program. CBTís trade practice investigations were thorough, well analyzed, and adequately supported. The Division noted that CBTís use of computerized surveillance through its Sophisticated Market Analysis Research Technology system has significantly enhanced CBTís trade practice surveillance capabilities. The Division found, however, that, although there had been recent improvement, CBT continued to have a problem with delays in completing trade practice investigations. The Division recommended that CBT focus substantial attention on timely completion of investigations in order to achieve significant improvements in timeliness. The Division also made recommendations regarding expanding investigations when serious allegations of wrongdoing are made and taking cognizance of the trading activity of members whose cases are referred to a disciplinary committee.
With respect to CBTís disciplinary program, the Division found that in most cases brought before disciplinary committees, CBT imposed adequate sanctions that included substantial fines and extensive use of suspensions from the trading floor. The Division made recommendations regarding, among other things, referring multiple instances of violations, absent mitigating circumstances, to the appropriate disciplinary committee for consideration rather than issuing repeated reminder letters, and taking appropriate steps to ensure that all members and their employees understand CBTís electronic trading rules.
CBT will have 60 days to respond in writing to the Divisionís recommendations. Copies of the report are available from the Commissionís Office of Public Affairs, Three Lafayette Centre, 1155 21st Street N.W., Washington, DC 20581, (202) 418-5080, or by accessing the Commissionís website at http://www.cftc.gov/files/tm/tmcbtrer062900.pdf