Release:             #4223-98
For Release:     December 24, 1998

CFTC Issues an Order Granting Dual Trading Exemption to the
Coffee, Sugar & Cocoa Exchange, Inc.

On December 23, 1998, the Commodity Futures Trading Commission (Commission) issued an Order granting a Dual Trading Exemption to the Coffee, Sugar & Cocoa Exchange, Inc. (CSCE or Exchange) for its Cocoa futures contract.

The Commission has completed its review of CSCE's petition for an exemption from the dual trading prohibition for CSCE's Cocoa futures contract. The dual trading prohibition generally prohibits a floor broker from executing both proprietary and customer trades in the same high-volume contract during a trading session. Based upon its consideration of the petition, as supplemented and amended, and other matters, including review of CSCE's audit trail test results, the Commission has determined that CSCE has demonstrated that it meets the standards for a dual trading exemption as reflected in section 4j(a) of the Commodity Exchange Act (Act) as interpreted in Commission regulation 155.5.

Subject to CSCE's continuing ability to demonstrate that it meets applicable requirements, the Commission has determined, with respect to CSCE's Cocoa futures contract market, that CSCE maintains a trade monitoring system which is capable of detecting and deterring, and is used on a regular basis to detect and to deter, all types of violations attributable to dual trading and, to the full extent feasible, all other violations involving the making of trades and execution of customer orders, as required by section 5a(b) of the Act and Commission regulation 155.5. The Commission further has determined that CSCE's trade monitoring system includes audit trail and recordkeeping systems that satisfy the Act and regulations.

For the exemption to remain in effect, CSCE must demonstrate on a continuing basis that it meets the relevant statutory and regulatory requirements. The Commission will monitor continued compliance through, among other things, its rule enforcement review program.

The provisions of the Commission's Order are effective on December 23, 1998, the date on which it was issued, and remain in effect unless and until the Order is revoked in accordance with section 8e(b)(3)(B) of the Act. If other CSCE contracts become affected contracts after the date of the Commission's Order, the Commission may expand the Order in response to an updated petition that includes those contracts.

The Order is available in the Federal Register. Copies of the Order may be contained by contacting the Commission's Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C., 20581, (202) 418-5100.