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ARTICLE · 27 JULY 2022

Block Trades, EFRPs And Assorted Other Trade Practice Issues: A Practical Guide Of Current Status

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With some frequency, Katten attorneys field questions from clients about exchange rules on off-exchange execution of futures and options on futures.

United StatesInternational Law
Katten Muchin Rosenman LLP
Katten Muchin Rosenman LLP
Carl E. Kennedy
Carl E. Kennedy
Stephen R. Morris
Stephen R. Morris
Alexander C. Kim
Alexander C. Kim
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With some frequency, Katten attorneys field questions from clients about exchange rules on off-exchange execution of futures and options on futures.1 This Advisory provides a high-level overview on this topic in connection with four principal derivatives exchange organizations: Chicago Mercantile Exchange Group (CME), ICE Futures U.S. (IFUS), ICE Futures Europe (IFEU) and Cboe Futures Exchange (CFE). In addition, it offers some perspective on other futures trade practice issues that have been recent focus areas for US regulators.

Block Trades and EFRPs in Futures

Commodity Futures Trading Commission (CFTC) Rule 1.38 requires futures and options on futures to be executed by "open and competitive methods" – except where transactions are executed in a "noncompetitive" manner in compliance with designated contract market rules specifically providing for such noncompetitive execution.2

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