For Release: June 11, 2001
CFTC Releases Rule Enforcement Review of the Minneapolis Grain Exchange
WASHINGTON- The Commodity Futures Trading Commission (Commission) has notified the Minneapolis Grain Exchange (MGE) of the results of a rule enforcement review completed by the Commission’s Division of Trading and Markets (T&M). The purpose of the review was to evaluate MGE’s market surveillance, trade practice surveillance, audit trail, and disciplinary programs. The target period for the review was October 1, 1999 through September 30, 2000.
In its review, T&M found that the MGE maintains adequate market surveillance and audit trail programs. The Exchange uses various reports to monitor daily price changes, spread differentials, open interest, volume, and deliverable supplies on a routine basis, and increases its level of surveillance during the expiring month. The MGE also monitors member compliance with its trade timing, order ticket and trading card recordkeeping requirements. During the target period, Exchange members maintained a very high accuracy rate in each recordkeeping category.
T&M also found, however, that the MGE was not completing investigations in a timely manner, and that its disciplinary program was not operating effectively. The report indicates that there were several investigations of a non-complex nature that were open for more than one year. The MGE also issued multiple reminder and warning letters to members for repeated violations of the same rule, which does not serve as an effective deterrent. In addition, the MGE did not take action against members who were found to have committed violations if the members had recently been issued a disciplinary letter for another violation of the same rule identified in a subsequent investigation. With the exception of the timeliness problem, the MGE’s trade practice surveillance program was operating adequately.
The MGE has 60 days to respond to T&M’s recommendations for
improvement. Copies of the report are available from the
Commission’s Office of Public Affairs, Three Lafayette Centre, 1155
21st Street N.W., Washington, DC 20581, (202) 418-5080, or by
accessing the Commission’s website at http://www.cftc.gov/tm/tmexchrer.htm.