For Release: August 7, 2001
CFTC Releases Market Surveillance Rule Enforcement Review of the Chicago Board of Trade
WASHINGTON- The Commodity Futures Trading Commission (Commission) has notified the Chicago Board of Trade (CBOT) of the results of a limited scope rule enforcement review of the CBOT’s market surveillance program. The review, which covered the target period of November 1, 1999 to November 1, 2000, was recently completed by the Commission’s Division of Trading and Markets (T&M).
In its review, T&M found that the CBOT maintains an effective and comprehensive market surveillance program, which is administered by an experienced and knowledgeable staff. CBOT staff routinely monitor, among other things, price relationships, volume, open interest, deliverable supply and market news. In order to facilitate orderly liquidations of expiring contracts, surveillance is heightened in each contract as expiration approaches, as well as when any potential problems arise. The CBOT also maintains complete and comprehensive contract expiration files and a large trader reporting system that contains a substantial database of position information. Further, the CBOT operates an effective program for monitoring speculative position limits and the bona fides of exchanges of futures for physicals transactions.
T&M also found that market surveillance related investigations were well documented, thorough, and completed in a timely manner. In addition, those investigations that were referred to disciplinary committees for further action were handled in an expeditious manner, and penalties that were assessed for market surveillance related violations appear reasonable relative to the conduct being sanctioned.
The report sets forth one recommendation with respect to speculative limit enforcement, to which the CBOT must respond within 60 days. 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 www.cftc.gov.