Overview
Wash Trades
- Wash Trades - Definition of a Wash Trade
- Wash Trades – Responsibility and Implications
- Wash Trades – Automated Trading Systems
- Wash Trades - Freshening
EFRP
- EFRP - What is an EFRP?
- EFRP - Parties to an EFRP
- EFRP - Pricing and the Related Position for EFRPs
- EFRP - Reporting and Recordkeeping
- EFRP - Prohibited Transitory EFRPs
Block Trades
- Block Trades - What is a Block Trade?
- Block Trades – Participant Eligibility
- Block Trades – Eligible Products, Times and Prices
- Block Trades – Reporting and Recordkeeping
- Block Trades – Pre-Hedging
- Block Trades – TAS, TAM and BTIC
Disruptive Practices Prohibited
- Disruptive Practices Prohibited - General Information
- Disruptive Practices Prohibited - Factors Market Regulation Considers
- Disruptive Practices Prohibited - Spoofing
- Disruptive Practices Prohibited - Flipping
- Disruptive Practices Prohibited - Additional Examples
- Disruptive Practices Prohibited - Frequently Asked Questions
CME Globex Operator ID Requirements
- CME Globex Operator ID Requirements – General Rule
- CME Globex Operator ID Requirements - Registration and Requirements
- CME Globex Operator ID Requirements - Individual and Team Operators
Pre-Execution Communications
Rule 524 - TAS, TAM, BTIC and TACO
Enforcement Process
Each party to a block trade must be an Eligible Contract Participant (ECP), which is a defined term under Section 1a of the U.S. Commodity Exchange Act. Commodity Trading Advisors (CTAs), and other persons performing a similar role, may also participate in block transactions provided they have total assets under management exceeding 25 million U.S. dollars and the block trade is suitable for their customers.
Eligible Contract Participants
Eligible Contract Participants generally include exchange members and member firms, broker/dealers, government entities, pension funds, commodity pools, corporations, investment companies, insurance companies, depository institutions and high net-worth individuals. The official definition of an ECP can be found in Section 1a of the U.S. Commodity Exchange Act.
Customer Orders
A customer order may only be executed by means of a block trade if the customer has specified the order be executed as a block trade. In the case of CTAs, the CTA must give consent to their broker to execute their orders as a block.
Block trades between accounts with common ownership
Block trades between different accounts with common beneficial ownership are prohibited unless each party's decision to enter the block trade is made by an independent decision-maker, each party has a legal and independent bona fide business purpose for engaging in the block trade and the block trade is executed at a fair and reasonable price.
In the absence of satisfying all the requirements, the transaction may constitute an illegal wash trade prohibited by Rule 534. Common beneficial ownership is defined as not only accounts with the same beneficial ownership, but also accounts with common beneficial ownership that is less than 100%.
This is part of a course on block trades. For official regulatory guidance on block trades, reference the applicable Market Regulation Advisory Notice.
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