About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

8 Admin. L.J. Am. U. 97 (1994-1995)
Freedom of Markets or License to Loot: Proposed Commodity Futures Trading Commission Regulation 1.35

handle is hein.journals/adminlj8 and id is 109 raw text is: FREEDOM OF MARKETS OR LICENSE TO LOOT: PROPOSED COMMODITY FUTURES TRADING COMMISSION REGULATION 1.35 Table of Contents Introduction .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . .. 97 I. C FTC . . . ... . . . . . . .. . .. . .. . . . . .. . .. . . .. . . 100 II. The History of the Proposed Amendment .............. 103 A. Background Concerning Account Identification ...... .103 B. Chicago Mercantile Exchange Contract Market Rule 536 .............................. 104 III. CFTC Regulation 1.35 ........................ 108 A. Elements of Proposed Amendment to Regulation 1.35 ......................... 108 B. Proponents' Lukewarm Reception to Regulation 1.35 Amendments ........................... 111 C. Other Arguments for Not Using Account Identifiers . . . 113 D. Intermarket Trading Strategy Is Never Defined ....... 115 E. Securities and Futures Markets Are Different ........ 116 F. No Fiduciary Duty for Exact Equivalency .......... 118 G. The Audit Trail Will Be Severely Injured .......... 119 H. Institutional Participants Are Not Sophisticated ....... 121 IV. Future Consequence If Regulation 1.35 Is Implemented .... 122 INTRODUCTION On October 20, 1993, Kemper Financial Services, a high profile mu- tual fund manager, settled charges made by the Commodity Futures Trading Commission (CFTC or Commission) and the Securities and Exchange Commission (SEC) that Kemper misallocated trades made in the securities and futures markets.' In paying $9.5 million in fines and penalties,2 Kemper neither admitted nor denied allegations that one of its portfolio managers, Thomas Richards, delayed designating for whose account he was trading until after the trades were concluded.3 Richards then allegedly proceeded to allocate more favorable trades to the 1. In the Matter of Kemper Financial Servs., CFTC Docket No. 94-3, 1993 CFTC LEXIS 314, at *6-7 (Oct. 20, 1993). 2. Id. at *11. 3. Id. at *6-7.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most