Federal Register / Vol. 65, No. 188 / Wednesday, September 27, 2000 / Notices 58051

1 64 FR 31195 (June 10, 1999); 64 FR 34851

(corrections) (June 29, 1999). The Commission first

raised the subject of alternative execution, or block

trading, procedures in its Concept Release on the

Regulation of Noncompetitive Transaction Executed

on or Subject to the Rules of a Contract Market. 63

FR 3708 (January 26, 1998). Through the Concept

Release, the Commission wished to explore whether

certain alternative execution procedures for large

size or other types of orders could be developed to

satisfy the needs of market participants while

furthering the policies and purposes of the

Commodity Exchange Act (‘‘Act’’) and the

Commission’s Regulations.

2See Letter from Mr. Paul J. Draths, Vice

President and Secretary, Chicago Board of Trade to

Ms. Jean A. Webb, Secretary, Commodity Futures

Trading Commission, dated August 31, 2000.

3CBOT’s proposal does not include the

implementation of block trading or minimum size

requirements for any particular contract. The

Exchange represented that an initial contract

designation has yet to be determined and, as such,

would be submitted separately to the Commission.

September 24, 2002, and to prohibit

entry by or on behalf of Stone

Manufacturing, Inc. under the Program

of products manufactured from fabric

exported from the United States during

that period.

Requirements for participation in the

Special Access Program are available in

Federal Register notice 63 FR 16474,

published on April 3, 1998.

Richard B. Steinkamp,

Acting Chairman, Committee for the

Implementation of Textile Agreements.

Committee for the Implementation of Textile

Agreements

September 21, 2000.

Commissioner of Customs,

Department of the Treasury, Washington, DC

20229.

Dear Commissioner: The purpose of this

directive is to notify you that the Committee

for the Implementation of Textile Agreements

has suspended Stone Manufacturing, Inc.

from participation in the Special Access

Program for the period September 25, 2000

through September 24, 2002. You are

therefore directed to prohibit entry of

products under the Special Access Program

by or on behalf of Stone Manufacturing, Inc.

during the period September 25, 2000

through September 24, 2002. You are further

directed to prohibit entry of products under

the Special Access Program by or on behalf

of Stone Manufacturing, Inc. manufactured

from fabric exported from the United States

during the period September 25, 2000

through September 24, 2002.

Sincerely,

Richard B. Steinkamp,

Acting Chairman, Committee for the

Implementation of Textile Agreements.

[FR Doc.00–24829 Filed 9–26–00; 8:45 am]

BILLING CODE 3510–DR–F

COMMODITY FUTURES TRADING

COMMISSION

Chicago Board of Trade’s Proposal To

Adopt Block Trading Procedures

AGENCY: Commodity Futures Trading

Commission.

ACTION: Notice of proposed new Chicago

Board of Trade Regulation 331.05 to

establish block trading procedures and

request for comment.

SUMMARY: The Chicago Board of Trade

(‘‘CBOT’’ or ‘‘Exchange’’), has submitted

to the Commodity Futures Trading

Commission (‘‘Commission’’) proposed

new Regulation 331.05 that would

establish block trading procedures at the

Exchange. Under these procedures,

eligible participants would be allowed

to negotiate and arrange futures

transactions of a minimum size

bilaterally away from the centralized,

competitive market. Once the specific

terms of the block transaction have been

agreed to, the counterparties would

report the relevant details of the

transaction to the Exchange for clearing

and settlement. CBOT is seeking to

allow block trading in those contract

which the Exchange initially launches

for trading on or after Decembe4r 31,

1999. CBOT’s proposal would establish

block trading procedures which in large

part resemble block trading procedures

which the Commission has approved for

the Cantor Financial Futures Exchange

and Chicago Mercantile Exchange.

Acting pursuant to the authority

delegated by Commission Regulation

140.96(b), the Division of Trading and

Markets (‘‘Division’’) has determined to

publish CBOT’s proposal for public

comment. The Division believes that

publication of the proposal is in the

public interest and will assist the

Commission in considering the views of

interested persons.

DATES: Comments must be received on

or before October 12, 2000.

ADDRESSES: Comments should be

submitted to Jean A. Webb, Secretary,

Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street, NW., Washington, DC

20581. Comments also may be sent by

facsimile to (202) 418–5221 or by

electronic mail to secretary@cftc.gov.

Reference should be made to the

‘‘Chicago Board of Trade’s Proposal to

Adopt Block Trading Procedures.’’

FOR FURTHER INFORMATION CONTACT:

Nicholas C. Milano, Attorney, Division

of Trading and Markets, Commodity

Futures Trading Commission, Three

Lafayette Centre, 1155, 21 Street, NW.,

Washington, DC 20581. Telephone:

(202) 418–5361.

SUPPLEMENTARY INFORMATION:

I. Background

On June 4, 1999, the Commodity

Futures Trading Commission issued an

Advisory on Alternate Execution, or

Block Trading, Procedures for the

Futures Industry.1 Through this

Advisory, the Commission announced

its intention to consider market

proposals to adopt alternative

execution, or block trading, procedures

for large size or other types of orders on

a case-by-case basis under a flexible

approach to the requirements of the Act

and the Commission’s regulations.

Under this approach, each contract

market retains the discretion to permit

alternative execution procedures and

has the ability to develop procedures

that reflect the particular characteristics

and needs of its individual markets and

market participants. Since that advisory,

the Commission has approved block

trading procedures at two contract

markets—the Cantor Financial Futures

Exchange on February 11, 2000 and the

Chicago Mercantile Exchange on May

19, 2000.

By letter dated August 31, 2000,

CBOT submitted proposed Regulation

331.05 to the Commission pursuant to

section 5a(a)(12)(A) of the Act and

Commission Regulation 1.41(c).2

Proposed Regulation 331.05 would

establish block trading procedures at the

Exchange whereby qualified market

participants would be allowed to

negotiate and arrange futures

transactions of a minimum size

bilaterally away from the centralized,

competitive market. Once the specific

terms of the block transaction had been

agreed to, the counterparties would

report the relevant details of the

transaction to the Exchange for clearing

and settlement. Thus, under the

proposed procedures, certain futures

transactions could be executed

noncompetitively rather than through

the Exchange’s open outcry trading

platform or its CBOT/Eurex electronic

trading system.

II. Description of CBOT’s Proposed

Block Trading Procedures

A. Eligible Contracts and Market

Participants

Under the proposed procedures,

CBOT would limit the eligibility for

block trading to those contracts that the

Exchange initially launches for trading

on or after December 31, 1999.3 CBOT’s

proposal would restrict block trading to

those market participants that qualified

as an ‘‘eligible participant’’ as that term

is defined by Commission Regulation

36.1(c)(2). In connection with block

trade transactions entered into by a

commodity trading advisor (‘‘CTA’’) on

behalf of its customers, and provided

58052 Federal Register / Vol. 65, No. 188 / Wednesday, September 27, 2000 / Notices

4The CTA must be registered under Act

(including without limitation any investment

advisor registered as such with the Securities and

Exchange Commission (‘‘SEC’’) that is exempt from

regulation under the Act or the Commission’s

regulations) and have total assets under

management exceeding $50 million.

5 Generally, under CBOT’s proposed block trading

procedures, orders from different accounts could

not be aggregated to satisfy the minimum size

requirement. However, a CTA who was permitted

to execute block trades on behalf of customers

under CBOT Regulation 331.05 would be permitted

to aggregate orders from different accounts to satisfy

the minimum size requirement.

6 In addition, each member and clearing member

that was a party to a block trade must record the

following information on its order ticket: that the

trade was a block trade; the contract (including the

delivery or expiry month) to which the block trade

relates; the number of contracts traded; the

execution price and time; identity of the

counterparty; and, if applicable, details regarding

the customer for which the block trade was

executed.

that certain registration and financial

conditions are satisfied, the CTA (and

not its underlying customers) would be

responsible for meeting the eligibility

requirements described above.

Accordingly, a CTA would be able to

enter into such transactions on behalf of

a customer without its customer having

to qualify as an ‘‘eligible participant’’

under Commission Regulation 36.1 or

without specifically authorizing the use

of the block trading procedures.4

B. Size and Price Requirements

Under proposed Regulation 331.05,

each buy or sell order underlying a

block trade must satisfy the applicable

minimum size requirements as to be

determined by the CBOT Board of

Directors, case-by-case, for each

particular contract eligible for block

trading.5 The Exchange’s proposed

procedures require that the price of a

block trade be ‘‘fair and reasonable’’ in

light of: (1) The size of such block trade;

(2) the price and size of other trades in

the same contract at the relevant time;

and (3) the price and size of trades in

other relevant markets, including

without limitation the underlying cash

market or other related futures markets,

at the relevant time. Moreover, the price

at which a block trade was executed

would not affect conditional orders and

would not be used to establish

settlement prices.

C. Transparency

Each block trade executed in

accordance with CBOT’s proposed block

trading procedures must be cleared

through clearing members of the

Exchange. Information identifying the

relevant contract, contract month, price,

quantity, time of execution and

counterparty clearing member for each

block trade must be reported to the

Exchange within five minutes

immediately following its execution.

For each block trade transaction, the

Exchange would publish information

that would identify the trade as such

and would identify the relevant

contract, contract month, price, and

quantity.6 CBOT would disseminate

such information immediately after the

block trade had been reported to the

Exchange.

III. Request for Comment

The Commission requests comment

from interested persons concerning any

aspect of CBOT’s proposed block

trading procedures.

Copies of CBOT’s proposed new

Regulation 331.05 and related materials

are available for inspection at the Office

of the Secretariat, Commodity Futures

Trading Commission, Three Lafayette

Centre, 1155 21st Street, NW.,

Washington, DC 20581. Copies also may

be obtained through the Office of the

Secretariat at the above address or by

telephoning (202) 418–5100.

Issued in Washington, DC, on September

20, 2000.

Alan L. Seifert,

Deputy Director.

[FR Doc. 00–24825 Filed 9–26–00; 8:45 am]

BILLING CODE 6351–01–M

COMMODITY FUTURES TRADING

COMMISSION

Sunshine Act Meeting

AGENCY HOLDING THE MEETING:

Commodity Futures Trading

Commission.

TIME AND DATE: 11:00 a.m., Friday,

October 6, 2000.

PLACE: 1155 21st, NW., Washington, DC,

9th Floor Conference Room.

STATUS: Closed.

MATTERS TO BE CONSIDERED: Surveillance

Matters.

CONTACT PERSON FOR MORE INFORMATION:

Jean A. Webb, 202–418–5100.

Jean A. Webb,

Sectretary of the Commission.

[FR Doc. 00–24871 Filed 9–22–00; 4:45 pm]

BILLING CODE 6351–01–M

COMMODITY FUTURES TRADING

COMMISSION

Sunshine Act Meeting

AGENCY HOLDING THE MEETING:

Commodity Futures Trading

Commission.

TIME AND DATE: 11:00 a.m., Friday,

October 13, 2000.

STATUS: Closed.

MATTERS TO BE CONSIDERED: Surveillance

Matters.

CONTACT PERSON FOR MORE INFORMATION:

Jean A. Webb, 202–418–5100.

Jean A. Webb,

Sectretary of the Commission.

[FR Doc. 00–24872 Filed 9–33–00; 4:45 pm]

BILLING CODE 6351–01–M

COMMODITY FUTURES TRADING

COMMISSION

Sunshine Act Meeting

AGENCY HOLDING THE MEETING:

Commodity Futures Trading

Commission.

TIME AND DATE: 11 a.m., Friday, October

20, 2000.

PLACE: 1155 21st, NW., Washington, DC,

9th Floor Conference Room.

STATUS: Closed.

MATTERS TO BE CONSIDERED: Surveillance

Matters.

CONTACT PERSON FOR MORE INFORMATION:

Jean A. Webb, 202–418–5100.

Jean A. Webb,

Secretary of the Commission.

[FR Doc. 00–24873 Filed 9–22–00; 4:45 pm]

BILLING CODE 6351–01–M

COMMODITY FUTURES TRADING

COMMISSION

Sunshine Act Meeting

AGENCY HOLDING THE MEETING:

Commodity Futures Trading

Commission.

TIME AND DATE: 11:00 a.m., Friday,

October 27, 2000.

PLACE: 1155 21st, NW., Washington, DC,

9th Floor Conference Room.

STATUS: Closed.

MATTERS TO BE CONSIDERED: Surveillance

Matters.

CONTACT PERSON FOR MORE INFORMATION:

Jean A. Webb, 202–418–5100.

Jean A. Webb,

Sectretary of the Commission.

[FR Doc. 00–24874 Filed 9–22–00; 4:45 pm]

BILLING CODE 6351–01–M