COMMENT 

To whom it may concern, ~ · ... :. ··;: , L~ i ;:): 2 J 

I have been involved in Cocoa in many guises including 'a., 

Futures broker, cocoa merchant and a cocoa processor for some 30 yeafs;For.over:·l:~:·p'~::·\· 

years I have served on Business Conduct Committee of the now ICE. Ibave'su.rVlved.and··' 

thrived in the constant change of commodities. I will say that the proposed change to 

Regulation 1.38 strikes at the core foundation ofthe Futures markets and I would suggest 

subject to regulatory abuse. 

As the commission is aware over the past 5 years the US 

Commodity Exchanges have moved from member held not for profit organizations to 

public companies that are responsible to shareholders and not market participants. My 

experience is limited only to ICE who has a Board that has limited commodity experience 

and a management team that has even less. To entrust ICE or other Exchanges to 

interpret "trading should take place on centralized market unless there is a compelling 

reason to allow certain transactions to take place off the centralized market" is absurd as 

their motivation is clearly to increase volumes and revenues. It is true that not all 

Exchanges are equal and unfortunately, my only direct and primary experience is only 

ICE. With this said all US Commodity Exchanges to some degree have increased 

volumes, market hours, days of trading and the extension of trading months. Trading over 

bank holidays I believe subjects FCMs and the Clearing House to unnecessary risks. In 

smaller markets one already experiences a lack of liquidity and increase of volatility 

brought about by extended trading hours and days. I can only see block trading worsen 

the situation further. 

There are several reasons put forward for allowing block trading 

of which market disruption brought about by large orders tops the list. All market 

participants wish to have an orderly market abut the temporary disruption caused by large 

orders is insignificant to a market that moves sharply on little or no volume. Given the 

extraordinary times we have lived through this past year there is no such thing as a large 

order any more. Any removal of volume from the market participants given the time the 

markets are open is detrimental to the markets. I clearly see no reason to allow block 

trading. 

One has seen clearly in the Equity and Banking sectors today 

what has been allowed to happen where profit was the only incentive. The Exchanges 

only interests in the markets are any vehicle that increases volume and thereby profits. 

The Exchanges are not exposed to risks as the FCMs assume it via the Clearing Houses. 

I am NOT in favor of block trades but to allow the Exchanges to determine when it is 

allowed is putting the Fox in the chicken coup. If the Commission believes in block 

trading it should define the use of block trading in terms of regulation rather than as a 

guideline. In this areas I would suggest the Commission seeks advice from Exchange 

product committees or trade organizations directly rather than the Exchanges. These 

committees and organization have market participants who use and need the market place 

to be healthy rather than looking for profits through higher volumes. I am available for 

any comments, questions etc. at ilelliott@admis.com. 

Thank you. Jeff Lelliott 

ReceiVed CFTC 

Reco/ds Sec~ion 

Jtyc20/o1