COMMODITY FUTURES TRADING COMMISSION
Chicago Board of Trade Petition for Exemption from the Statutory Dual Trading Prohibition in the Ten-Year U.S. Treasury Note Futures Contract Traded on the Project A Electronic Trading System
AGENCY: Commodity Futures Trading Commission
ACTION: Amended Order
SUMMARY: The Commodity Futures Trading Commission ("Commission") is amending its February 26, 1999 Order granting the Chicago Board of Trade ("CBT" or "Exchange") an exemption from the statutory prohibition against dual trading in the U.S. Treasury Bond futures contract ("T-Bond") traded on its Project A electronic trading system to include the Ten-Year U.S. Treasury Note (" Ten-Year T-Note") futures contract traded on Project A.
DATES: This Order is to be effective June 4, 1999.
FOR FURTHER INFORMATION CONTACT: Rachel F. Berdansky, Special Counsel, Division of Trading and Markets, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st St., N.W., Washington, DC 20581; telephone (202) 418-5490.
SUPPLEMENTARY INFORMATION: On February 26, 1999, the Commission issued an Order granting CBT an exemption from the statutory dual trading prohibition for its T-Bond futures contract as traded on the Exchange's electronic trading system, Project A.(1) In issuing the Order, the Commission found that CBT met the standards for granting a dual trading exemption contained in Section 4j(a) of the Commodity Exchange Act ("Act") and Commission Regulation 155.5 with regard to Project A T-Bond futures.
By letter dated March 15, 1999, shortly after the Order was issued, CBT notified the Commission that its Ten-Year T-Note futures contract traded on Project A had become an affected contract market as well, and supplemented its Petition for Exemption from the Dual Trading Prohibition to include that contract.(2) The Exchange has represented by letter dated April 20, 1999, that, with respect to the February 26, 1999 Order exempting Project A T-Bond futures from the dual trading prohibition, there have been no material changes concerning the operation of the Project A system or to CBT's trade monitoring system as applicable thereto. Therefore, the Commission finds that CBT meets all relevant standards for granting a dual trading exemption for the Ten-Year T-Note futures contract as traded on Project A.
ACCORDINGLY, on this date, the Commission HEREBY AMENDS its February 26, 1999 Order granting CBT's Petition for Exemption from the Dual Trading Prohibition for trading on Project A of its electronically traded U.S. Treasury Bond futures contracts to include an exemption for CBT's electronically traded Ten-Year U.S. Treasury Note futures contract.
For this exemption to remain in effect, CBT must demonstrate on a continuing basis that it meets the relevant statutory and regulatory requirements. The Commission will monitor continued compliance through its rule enforcement review program and any other information it may obtain about CBT's program.
The provisions of this Order shall be effective on the date on which it is issued and shall remain in effect unless and until it is revoked in accordance with Section 8e(b)(3)(B) of the Commodity Exchange Act, 7 U.S.C. §12e(b)(3)(B). If other CBT contracts electronically traded on Project A become affected contracts after the date of this Order, the Commission may expand this Order in response to an updated petition that includes those contracts.
IT IS SO ORDERED.
Jean A. Webb
Secretary to the Commission
Dated: June 4, 1999
1 64 FR 10450 (March 4, 1999). A copy of this Order is attached as Appendix A.
2 An "affected contract market" is a contract market with an average daily volume equal to or in excess of 8,000 contracts for each of four quarters during the most recent volume year. Commission Regulation 155.5(a)(9). See Section 4j(a)(4) of the Act. Under Section 4j(a) of the Act and Regulation 155.5(b), the dual trading prohibition applies to each affected contract market. The Commission, therefore, must consider separately each affected contract market. As noted by the Commission in promulgating Regulation 155.5, a contract market trading on an exchange floor will be considered separate from a contract market in the same commodity trading on a screen-based system such as Project A. See 58 FR 40335 (July 28, 1993).