Release: #4101-98

For Release: February 2, 1998

CFTC Seeks Public Comment on the Application of Cantor Financial Futures Exchange to Become Designated as a Contract Market for Computer-Based Trading of Various U.S. Treasury Securities Futures Contracts

Washington, D.C. -- The Commodity Futures Trading Commission (Commission) on January 28, 1998, issued a notice of availability of the terms and conditions of commodity futures contracts proposed by the Cantor Financial Futures Exchange, Inc. (CFFE). CFFE has applied for designation as a contract market for the computer-based trading of US Treasury bond, ten-year note, five-year note and two-year note futures contracts.

CFFE has been formed pursuant to an agreement between the New York Cotton Exchange (NYCE) and CFFE, LLC, which is wholly owned by Cantor Fitzgerald, LP. Under the agreement, CFFE trading would be conducted on the same trading system that another Cantor Fitzgerald, LP subsidiary, Cantor Fitzgerald Securities, LLC, currently operates as an interdealer-broker in the US Treasury securities market. CFFE's regulatory responsibilities would be handled by NYCE. CFFE trades would be cleared and settled by a newly-formed clearing organization -- the New York Board of Clearing, Inc., a wholly-owned subsidiary of the Commodity Clearing Corporation which is wholly owned by NYCE.

CFFE has not previously been approved by the Commission as a contract market in any commodity. Accordingly, in addition to the terms and conditions of the proposed futures contracts, the Exchange has submitted to the Commission a proposed trade-matching algorithm; proposed rules pertaining to CFFE trading standards, governance, disciplinary and arbitration procedures, and recordkeeping requirements; and various other materials to meet the requirements for a board of trade seeking initial designation as a contract market.

The notice will appear in the Federal Register on February 3, 1998, and will be posted on the Commission's home page ( Comments on CFFE's application must be filed by April 6, 1998. Copies of the of proposed terms and conditions may be obtained by contacting the Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5100.