For Release: December 27, 2000
CFTC DESIGNATES ONEXCHANGE BOARD OF TRADE
AS A CONTRACT MARKET AND ONEXCHANGE CLEARING CORPORATION AS A REGISTERED CLEARING ORGANIZATION
Washington D.C. - The Commodity Futures Trading Commission (Commission) announced on Friday, December 22, 2000, that it approved the application of onExchange Board of Trade, Inc. (ONXBOT) for designation as a contract market. The Commission also approved the application of onExchange Clearing Corporation, Inc. (ONXCC) for registration as a derivatives clearing organization; ONXCC will provide all clearing and settlement services to ONXBOT. ONXBOT and ONXCC are subsidiaries of onExchange, Inc. of Waltham, Massachusetts and will operate as for-profit entities. ONXBOT plans initially to trade Five Year U.S. Treasury Note futures contracts.
The National Futures Association (NFA) will perform self-regulatory functions on behalf of ONXBOT, including financial surveillance and investigating and prosecuting trade practice violations. NFA also will assist ONXBOT in conducting market surveillance. ONXBOT is the first contract market, and ONXCC is the first derivatives clearing organization, to be approved by the Commission under the Commodity Exchange Act, as it was amended by the Commodity Futures Modernization Act of 2000 (CFMA). The CFMA was signed into law on December 21, 2000.
ONXBOT trading will be conducted only by Subscribers, who must qualify as Eligible Swap Participants under Part 35 of the Commission’s Regulations, or their Authorized Traders. All ONXBOT Subscribers will automatically become ONXCC members and will clear their own trades. ONXBOT’s trading system, onTrade, will anonymously match orders based on a price and time priority trade-matching algorithm similar to those employed by other electronic trading systems at various existing futures exchanges.
Copies of Commission Orders, and the Commission’s approval letter may be obtained by contacting the Commission’s Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5100.