Release: #4094-98

For Release: January 8, 1998

CFTC Proposes to Amend its Regulation 1.35(a-1) to Permit Regulated Investment Managers to Place Bunched Orders for Futures and Futures Option Contracts Without Individual Account Identifiers and to Allocate Those Orders on a Post-Trade Basis

Washington, D.C. -- The Commodity Futures Trading Commission (Commission) on December 31, 1997, issued a Notice of Proposed Rulemaking requesting public comment on a proposal to amend Commission Regulation 1.35(a-1) to permit certain customer orders (eligible orders) to be placed on a regulated futures exchange without individual customer account identification either at the time of order placement or at the time of report of execution. The Commission's proposal would exempt from existing customer account identification requirements bunched futures and/or futures option orders placed by a regulated investment manager on behalf of consenting eligible customer accounts as part of its management of a portfolio also containing instruments which are either exempt from regulation pursuant to the Commission's regulations or excluded from regulation under the Commodity Exchange Act (Act). The proposed rule would permit eligible orders to be allocated to the included customer accounts no later than the end of the day on which the order is executed.

The Commission's proposal is responsive to evolutionary changes in the manner in which futures orders are placed, executed, and cleared, including the growth in managed funds business and the increasingly common practice of bunching multiple orders for different accounts into a single order for placement. The Commission's proposal is intended to enable portfolio managers acting in a fiduciary capacity to handle customer interests across markets, without undermining any legitimate customer or law enforcement interests. If the Commission were to approve the amendment to Regulation 1.35(a-1), exchanges that wish to permit the placement of eligible orders would have to submit appropriate rule changes to the Commission pursuant to Section 5a(a)(12)(A) of the Act and Commission Regulation 1.41.

The Notice of Proposed Rulemaking appeared in the Federal Register on January 7, 1998, and will be posted on the Commission's home page ( The comment period ends on March 8, 1998. Copies of the Notice of the Proposed Rulemaking may be obtained by contacting the Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5100.