For Release: June 7, 1999
Commodity Futures Trading Commission Issues
Advisory on Alternative
Execution, or Block Trading, Procedures for the Futures
Washington, D.C. The Commodity Futures Trading
Commission (Commission) today issued an Advisory on Alternative
Execution, or Block Trading, Procedures for the Futures Industry. The
Advisory follows up on the Commission's Concept Release concerning
the Regulation of Noncompetitive Transactions Executed on or Subject to
the Rules of a Contract Market. 63 FR 3708 (January 26, 1998). Through
the Advisory, the Commission is announcing its intention to consider
contract market proposals to adopt alternative execution, or block
trading, procedures for large size or other types of orders on a
case-by-case basis under a flexible approach to the requirements of the
Commodity Exchange Act and the Commission's regulations.
Under this approach, each contract market would retain the discretion to permit alternative execution procedures. Additionally, each contract market would have the ability to develop procedures that reflect the particular characteristics and needs of its individual markets and market participants. In the Advisory, the Commission encourages contract markets to solicit the input of, and coordinate with, various interested parties in the development of such alternative execution procedures for large orders, including its membership, futures commission merchants, end-users, and industry associations. Based on its experience in reviewing such contract market proposals, the Commission will determine whether any further Commission action is appropriate.
The Commission's Advisory is effective immediately and will be published in the Federal Register shortly. Copies of the Advisory 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, www.cftc.gov.