[Federal Register Volume 63, Number 42 (Wednesday, March 4, 1998)]
[Notices]
[Page 10597]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5596]
-----------------------------------------------------------------------
COMMODITY FUTURES TRADING COMMISSION
Chicago Board of Trade Supplement to Petition for Exemption From
the Dual Trading Prohibition in Affected Contract Markets
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice of supplement to a petition for exemption from the
prohibition on dual trading for a potentially affected screen-based
traded contract market.
-----------------------------------------------------------------------
SUMMARY: Chicago Board of Trade (``CBT'' or ``Exchange'') has submitted
to the Commodity Futures Trading Commission (``Commission'') an
additional update of its October 25, 1993 petition for exemption from
the prohibition against dual trading. The supplement requests an
exemption for a screen-based traded contract if the Commission
determines that the contract is an affected contract market subject to
the dual trading prohibition. Copies of the entire file, including any
future submissions, will be available to the public upon request,
except to the extent that the Exchange has requested confidential
treatment.
ADDRESSES: Copies of the file are available from the Office of the
Secretariat, Commodity Futures Trading Commission, Three Lafayette
Centre, 1155 21st Street, NW, Washington, DC 20581. Reference should be
made to the CBT dual trading exemption petition file.
FOR FURTHER INFORMATION CONTACT: Rachel Berdansky, Special Counsel,
Division of Trading and Markets, Commodity Futures Trading Commission,
Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581;
telephone: (202) 418-5490.
SUPPLEMENTARY INFORMATION: Pursuant to Sections 4j(a)(1) and (3) of the
Commodity Exchange Act (``Act'') and Regulation 155.5 thereunder, a
board of trade may submit a petition to the Commission to exempt any of
its affected contract markets (markets with an average daily trading
volume equal to or in excess of 8,000 contracts for four consecutive
quarters) from the prohibition against dual trading. Regulation
155.5(d)(6) authorizes the Director of the Division of Trading and
Markets (``Division''), or a designee of the Director, to publish
notice of each exemption petition deemed complete under Regulation
155.5(d) and to make the petition available to the public as required
by Section 4j(a)(5) of the Act.
CBT originally submitted a petition for dual trading exemption for
ten affected contract markets on October 25, 1993. Subsequently,
pursuant to letters dated March 25 and May 14, 1994, CBT supplemented
its petition to include three additional affected contract markets. On
November 7, 1997, the Commission issued a proposed Order granting CBT
conditional dual trading exemptions for 13 affected contract markets.
Through a letter dated December 12, 1997, the Exchange notified the
Division that the average daily trading volume for the U.S. Treasury
Bond futures contract (``T-Bonds'') traded on the Exchange's screen-
based Project A system exceeded 8,000 contracts for each of four
quarters during the volume year from December 1996 through November
1997. The Exchange requested the opportunity to submit materials by
January 31, 1998, addressing whether a screen-based traded market
should be considered an affected contract market subject to the dual
trading provisions set forth in Section 4j of the Act and Regulation
155.5. On December 16, 1997, the Division granted that request, and
informed CBT that the submission also had to include a complete dual
trading exemption petition for the Project A traded T-Bond futures
contract. On January 31, 1998, the Exchange submitted a petition
supplement requesting an exemption from the dual trading prohibition
for the Project A traded T-Bond futures contract if the Commission
determines that the contract is an affected contract market. The
supplement addressed the applicability of a dual trading prohibition to
an electronic market, as well as the elements of the Exchange's trade
monitoring system as they apply to Project A.
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 though a
screen-based trading system. The Commission further stated that, while
not excluding electronic trading from the dual trading prohibition, the
Commission was retaining the flexibility to consider the matter
further. See FR 40335 (July 28, 1993). The Commission is currently
considering whether screen-based trading systems, such as Project A,
shall be subject to the dual trading provisions of Section 4j of the
Act and Regulation 155.5.
Copies of the file containing all these materials and any future
submissions, except to the extent that the Exchange has requested
confidential treatment in accordance with 17 CFR 145.9, are available
for inspection at the Commission's Office of the Secretariat, Three
Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581, and may
be obtained by mail at that address or by telephone at (202) 418-5100.
Petition materials subject to CBT's request for confidential
treatment may be available upon request pursuant to the Freedom of
Information Act (``FOIA'') (5 U.S.C. Sec. 552) and the Commission's
regulations thereunder (17 CFR Part 145), except to the extent they are
entitled to confidential treatment as set forth in 17 CFR 145.5 and
145.9. Requests for copies of such materials should be made to FOIA,
Privacy and Sunshine Act Compliance Staff of the Office of the
Secretariat at the above address in accordance with 17 CFR 145.7 and
145.8.
If the Commission determines that the Project A traded T-Bond
futures contract is subject to Section 4j of the Act and Regulation
155.5, CBT is deemed to have timely submitted its petition supplement
for the purpose of Regulation 155.5(d)(5). Therefore, application of
the dual trading prohibition against Project A trading of the T-Bond
futures contract would be suspended until the petition is acted upon.
Issued in Washington, DC, on February 26, 1998.
Alan L. Seifert,
Deputy Director, Division of Trading and Markets.
[FR Doc. 98-5596 Filed 3-3-98; 8:45 am]
BILLING CODE 6351-01-P