Release: #4138-98

For Release: April 27, 1998



CFTC Approves Rules Facilitating Merger Between Coffee, Sugar & Cocoa Exchange, Inc. and New York Cotton Exchange

Washington - On April 24, 1998, the Commodity Futures Trading Commission (Commission) approved rules of the Coffee, Sugar & Cocoa Exchange, Inc. (CSCE) and the New York Cotton Exchange (NYCE) that facilitate a merger of the two exchanges. The respective memberships of CSCE and NYCE approved the merger on December 22, 1997.

The merger is to be effected in two stages. During the first stage, CSCE and NYCE will reorganize as separate corporate entities under the control of a common holding company, the Board of Trade of the City of New York (NYBT). CSCE and NYCE full members will relinquish their respective equity interests and governance rights in CSCE and NYCE, and NYBT will become the sole voting and equity member of CSCE and NYCE. In exchange, CSCE and NYCE full members will receive full memberships in NYBT, as well as cash and installment notes. In addition, each full member of CSCE and NYCE also will receive a membership in CFFE Regulatory Services, Inc. (CFFE Regulatory). CFFE Regulatory holds a 100% equity interest in Cantor Financial Futures Exchange, Inc. an exchange that recently submitted to the Commission an application for designation as a contract market in U.S. Treasury bond, ten-year note, five-year note, and two-year note futures contracts.

During the first stage of the merger, CSCE members will retain exclusive trading rights in CSCE futures and option contracts, and NYCE members will retain exclusive trading rights in NYCE futures and option contracts. The first stage of the merger is expected to take effect prior to June 30, 1998.

The second stage of the merger involves CSCE and NYCE merging into the NYBT, with the NYBT being the surviving corporate entity. At that time, former CSCE and NYCE full members will have joint trading rights in all CSCE and NYCE futures and option contracts which will be redesignated under the NYBT. The second stage of the merger is expected to take effect by June 30, 2004.

A copy of the merger submission 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.