Release: #4180-98
For Release: August 21,
1998
Commodity Futures Trading Commission Amends
Commission Regulation 1.35(a-1) in Order 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 August 21, 1998, approved for publication in the
Federal Register a final rule amending Commission Regulation
1.35(a-1) to permit certain bunched customer orders to be placed on
U.S. futures exchanges without individual customer account identifiers
either at the time of order placement or at the time of report of
execution. The rule permits these orders to be allocated to customer
accounts no later than the end of the day the order is executed.
The rule represents another step in the Commission's ongoing
program of regulatory reform. It responds 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.
Under the rule, orders to be allocated on a post-trade basis may be
placed by registered commodity trading advisors, investment advisers,
and regulated foreign advisers on behalf of customers that meet
criteria for financially sophisticated market participants. The
account manager must disclose his or her allocation methodologies to
the customers and must assure that allocations are made only to those
customers. The account manager must also assure that the allocations
are fair and equitable. The account manager must certify that he or
she will comply with the rule and must create and maintain certain
records.
Copies of the final rule may be obtained by contacting the Commission's Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C., 20581, (202) 418-5100, or by accessing the Commission's website, www.cftc.gov.