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July 08, 2003
Allocation of Bunched Orders
The Commodity Futures Trading Commission ("CFTC") recently amended Rule 1.35 (a-1)(5), which allows certain account managers to bunch customer orders for execution and to allocate them to individual accounts prior to the end of the day. The amended rule becomes effective on July 11, 2003.
NFA Compliance Rule 2-10 adopts CFTC Rule 1.35 by reference. NFA also currently has two interpretive notices related to bunched orders, "Orders Eligible for Post-Execution Allocation" (paragraph 9036) and "The Allocation of Block Orders for Multiple Accounts" (paragraph 9029). Certain portions of these interpretive notices are inconsistent with the amended CFTC rule. NFA is in the process of revising the two notices so that they are consistent with the new rule. In the meantime, NFA Members will not be cited for non-compliance with those portions of the interpretive notices that are inconsistent with the new CFTC rule.
If you have any questions about this notice, please contact John Brodersen at (312) 781-2226.