Commission Approves Internet-Based FutureCom Exchange

Washington -- The Commodity Futures Trading Commission issued orders on Monday, March 13, 2000, approving FutureCom, LTD., ("FutureCom") as a contract market in cash-settled live cattle futures and option contracts. FutureCom is a new commodity futures exchange and is the first internet-based exchange approved by the Commission. FutureCom has established its own clearing house with FutureCom�s clearing bank to perform the clearing operations. The Commission also is approving today the operation of the FutureCom clearing house. FutureCom is owned by the group of partnerships that own Texas Beef Group in Amarillo, Texas and is organized as a for-profit limited partnership.

Every member of FutureCom will also be its own clearing member and initial margin to support any position must be on deposit with the exchange before an order will be accepted by the trading system for execution. Each member�s margin level and position limits will be tied to its net worth and income-based membership level and overall creditworthiness. Trading and clearing will be automated and electronically integrated. Although FutureCom members may authorize other members to place orders in the system on their behalf, each member will handle its own funds and no financial intermediaries will be involved in connection with trading on FutureCom.

The Commission has specified certain conditions FutureCom must fulfill before trading begins. They include additional independent third-party testing of the trading system. FutureCom will also be subject to certain ongoing conditions after operations begin. These include the maintenance of a segregated credit facility to support the clearing system financially, and ongoing refinement and development of its trade practice surveillance program. The National Futures Association will perform financial and recordkeeping surveillance over those FutureCom members that are Commission registrants.

More information about FutureCom is available in the memoranda from the Division of Trading and Markets and the Division of Economic Analysis recommending that the Commission designate FutureCom as a contract market.