Release: #4180-98
For Release: August 21, 1998

Commodity Futures Trading Commission Amends Commission Regulation 1.35(a-1) in Order to Permit Regulated Investment Managers to Place Bunched Orders for Futures and Futures Option Contracts Without Individual Account Identifiers and to Allocate Those Orders on a Post-Trade Basis

Washington, D.C. -- The Commodity Futures Trading Commission (Commission) on August 21, 1998, approved for publication in the Federal Register a final rule amending Commission Regulation 1.35(a-1) to permit certain bunched customer orders to be placed on U.S. futures exchanges without individual customer account identifiers either at the time of order placement or at the time of report of execution. The rule permits these orders to be allocated to customer accounts no later than the end of the day the order is executed.

The rule represents another step in the Commission's ongoing program of regulatory reform. It responds to evolutionary changes in the manner in which futures orders are placed, executed, and cleared, including the growth in managed funds business and the increasingly common practice of bunching multiple orders for different accounts into a single order for placement.

Under the rule, orders to be allocated on a post-trade basis may be placed by registered commodity trading advisors, investment advisers, and regulated foreign advisers on behalf of customers that meet criteria for financially sophisticated market participants. The account manager must disclose his or her allocation methodologies to the customers and must assure that allocations are made only to those customers. The account manager must also assure that the allocations are fair and equitable. The account manager must certify that he or she will comply with the rule and must create and maintain certain records.

Copies of the final rule 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, or by accessing the Commission's website,