Release: #4275-99
For Release: June 7, 1999

Commodity Futures Trading Commission Issues Advisory on Alternative Execution, or Block Trading, Procedures for the Futures Industry

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.