For Release: June 7, 1999
CFTC Amends Order Granting the Chicago Board of
Trade a Dual Trading Exemption for the Treasury Bond Futures Contract on
its Project A Electronic Trading System to Include the Project A Ten-Year
Treasury Note Futures Contract
On June 4, 1999, the Commodity Futures Trading Commission (Commission)
amended its February 26, 1999 Order granting an exemption from the
statutory dual trading prohibition to the Chicago Board of Trade (CBT)
for its U.S. Treasury Bond (T-Bond) futures contract traded on CBT's
Project A electronic trading system. The Order was amended to include
within the exemption, the Ten-Year U.S. Treasury Note (Ten-Year T-Note)
futures contract traded on Project A. The Commission took this action
based on CBT's representation that there have been no material
changes in facts concerning the operation of the Project A system or
CBT's trade monitoring system since the Commission issued its
February 26, 1999 Order.
Subject to CBT's continuing ability to demonstrate that it meets applicable requirements, the Commission has determined, with respect to CBT's electronically traded T-Bond and Ten-Year T-Note futures contracts, that CBT maintains a trade monitoring system that 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 types of trading violations, as required by Section 5a(b) of the Commodity Exchange Act and Commission Regulation 155.5. In issuing the Order and the amended Order, the Commission specifically took into account the ability of the Project A electronic trading system to provide a precise, comprehensive, and unalterable audit trail. The electronic audit trail appears to reduce the opportunity for trading abuse, and facilitates the detection and prosecution of any possible wrongdoing that may occur.
The amended Order will be published shortly in the Federal Register. Copies of the amended Order 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 at www.cftc.gov.