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June 19, 2001
National Futures Association to provide regulatory services for BrokerTec Futures Exchange LLC
June 19, Chicago - National Futures Association announced today that it has signed an agreement with BrokerTec Futures Exchange, LLC ("BTEX") to provide regulatory services to the new electronic exchange. BTEX, a subsidiary of BrokerTec Global LLC, was granted designated contract market status from the Commodity Futures Trading Commission ("CFTC") on June 18, 2001.
Owned by fourteen institutional shareholders, BrokerTec Global's mission is to provide fast, reliable, cost-effective and straight-through processing services to the world's fixed income trading community. BrokerTec's adding of fixed income futures to its product suite follows its launch of commercial operations in June 2000 as a fully electronic inter-dealer broker of fixed income securities.
NFA will perform trade practice and market surveillance activities for BTEX as well as other regulatory services which include conducting background checks, investigating and litigating any disciplinary matters that may arise, performing auditing and financial surveillance functions as the CFTC requires and resolving disputes that may arise.
"While older exchanges typically have their own internal departments to provide these functions, the recent trend has been for new exchanges to outsource these functions to external regulatory authorities," said Hank Mlynarski, President of BTEX and BrokerTec Clearing Company. "BTEX believes that NFA is the most skilled and respected independent body in the industry to perform these duties, and its selection confirms BTEX's desire to deliver the safest, soundest, most efficient and transparent futures exchange available today to market participants."
BTEX is the second new electronic exchange since the passage of the Commodity Futures Modernization Act of 2000 to outsource its regulatory programs to NFA. In May 2000, NFA entered into an agreement with the Merchants' Exchange of St. Louis LLC ("Merchants' Exchange") to provide regulatory services for the exchange. Merchants' Exchange was granted designated contract market status from the CFTC in July 2000 and began trading on December 8, 2000.
"We congratulate BTEX on receiving designated contract market status from the CFTC, and we look forward to providing them with the programs and services that will help them achieve success in the industry" said Dan Roth, NFA's Senior Executive Vice-President.
NFA is the industrywide self-regulatory organization for the U.S. futures industry. Since 1982, NFA has provided regulatory programs and services to ensure futures industry integrity, protect market participants and help its members meet their regulatory responsibilities.