Release:                         #4334-99
For Release:                  November 8, 1999


WASHINGTON -- The Commodity Futures Trading Commission (Commission) has notified the Coffee, Sugar & Cocoa Exchange (CSCE) of the results of a rule enforcement review completed by the Commission's Division of Trading and Markets (T&M). The purpose of the review was to evaluate CSCE's market surveillance, trade practice surveillance, and disciplinary programs. The target period for the review was October 1, 1997 through September 30, 1998.

T&M found that CSCE has an adequate market surveillance program. CSCE staff closely monitors the Exchange's markets to identify indications of possible congestion or other market situations conducive to possible price distortion and to ensure the orderly liquidation of contracts. T&M made recommendations concerning the documentation of surveillance activities and improving the timeliness of market surveillance reviews and investigations.

T&M also found that CSCE generally maintains an adequate trade practice surveillance program. CSCE conducts routine computerized surveillance of its markets sufficient to detect possible trading abuses. Trade practice investigations, including those initiated in response to customer complaints, generally were thorough, well analyzed, and completed in a timely manner. T&M, however, made several recommendations to improve further CSCE's trade practice program. These address, among other things, the scope of routine trade practice reviews and the presentation of certain investigations to a disciplinary committee.

Finally, T&M found that CSCE generally maintains an adequate disciplinary program. Disciplinary matters are promptly referred to a disciplinary committee, disciplinary proceedings are completed in a timely manner, and findings appear to be supported by the evidence. The Division made recommendations regarding the imposition of adequate sanctions in certain cases.

CSCE will have 60 days to respond in writing to T&M's recommendations. Copies of the report are available from the Commission's Office of Public Affairs, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5080, or by accessing the Commission's website at