CFTC Designates Brokertec Futures Exchange as a Contract Market

Release: 4526-01
For Release: June 19, 2001

CFTC Designates Brokertec Futures Exchange as a Contract Market and Brokertec Clearing Corporation as a Registered Derivatives Clearing Organization

Washington DC - The Commodity Futures Trading Commission (Commission) announced on Monday, June 18, 2001, that it approved the application of BrokerTec Futures Exchange, L.L.C. (BTEX) for designation as a contract market. The Commission also approved the application of BrokerTec Clearing Company, L.L.C. (BCC), an affiliate of BTEX, for registration as a derivatives clearing organization. BCC will provide clearing and settlement services to BTEX. BTEX and BCC are affiliates of BrokerTec Global, L.L.C., and are headquartered in Jersey City, New Jersey. BTEX plans initially to trade short-, medium-, and long-term U.S. Treasury Note and U.S. Treasury Bond futures contracts. The Commission approved the application of BTEX as a designated contract market, and of BCC as a registered derivatives clearing organization, under the Commodity Exchange Act, as amended by the Commodity Futures Modernization Act of 2000 (CFMA).

The National Futures Association (NFA) will perform certain self-regulatory functions on behalf of BTEX, including market and financial surveillance/audits and investigating trade practice violations. NFA will also process applications from individuals employed by BTEX members, or affiliates of Members, for direct access to the BTEX Trading System (authorized traders). The Board of Trade Clearing Corporation will perform certain clearing processing services on behalf of BCC for trades executed on or through BTEX.

BTEX will utilize an automated trading system that will accept limit or market orders entered by a member, an authorized trader, or through an automated order routing system of a member. Any person is eligible to become a member of BTEX, provided that, among other things, the person, or an affiliate of the person, becomes a class B shareholder. Any BTEX member that is an entity is eligible to become a clearing member, provided that the member, among other things, be approved for membership by the BCC. BTEX's trading system will match orders based anonymously on a price and time priority trade-matching algorithm that is similar to those employed by other automated trading systems at various existing futures exchanges.

Copies of the Commission’s approval letter and other supporting material prepared by Commission staff may be obtained by contacting the Commission’s Office of the Secretariat, Three Lafayette Centre, 1155 21^st Street, N.W., Washington, D.C. 20581, (202) 418-5100.

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