Commodity Futures Trading Commission (CFTC) Issues Interpretive Guidance on Disruptive Trade Practices
Sunday, June 2, 2013

The Commodity Futures Trading Commission has issued interpretive guidance and a policy statement (interpretive statement) with respect to Section 4c(a)(5) of the Commodity Exchange Act (CEA), which prohibits certain disruptive trading practices. Specifically, Section 4c(a)(5) prohibits any person from engaging in any trading, practice or conduct on or subject to the rules of a registered entity that: (i) violates bids or offers; (ii) demonstrates intentional or reckless disregard for the orderly execution of transactions during the closing period; or (iii) is in the nature of “spoofing,” i.e., bidding or offering with the intent to cancel the bid or offer before execution.

The interpretive statement will become effective upon publication in the Federal Register.

Click here for the interpretive statement.

 

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