[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]


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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.

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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