CFTC Designates New Exchange - U.S. Futures Exchange

In a public meeting, held on February 4, 2004, the Commodity Futures Trading Commission (CFTC) voted unanimously to designate the U.S. Futures Exchange, L.L.C. (USFE) as a contract market for the automated trading of futures and options on futures contracts. This is the CFTC’s seventh exchange designation since implementation of the Commodity Futures Modernization Act of 2000 (CFMA).

In commenting on the action taken today, CFTC Chairman James E. Newsome said: “With today’s unanimous vote, the Commission affirms one of the central themes of the Commodity Futures Modernization Act of 2000 – responsible innovation and fair competition among markets. I congratulate our staff on concluding a thorough review of the application for contract market designation, probably the most thorough in the Commission’s history. I am confident that we have done our job.”

During today’s meeting, the Commission was briefed on the USFE’s application by Dr. Michael Gorham, Director, Division of Market Oversight, and Patrick McCarty, the Commission’s General Counsel. At the conclusion of the briefing, the Commissioners directed a number of questions to staff before voting to approve the USFE’s application.

The USFE has contracted with the National Futures Association (NFA) to assist it in carrying out various self-regulatory responsibilities, including, among other things: market, trade practice, and financial surveillance; and investigative and disciplinary functions. The NFA will also provide its arbitration forum for resolving customer/member disputes and member/member disputes. The USFE has entered into an agreement with The Clearing Corporation (CCorp), the successor organization to the Board of Trade Clearing Corporation, to provide clearing and settlement services. CCorp is registered with the Commission as a derivatives clearing organization.

Copies of the CFTC’s approval letter and other supporting material prepared by CFTC staff 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.