Internet Cattle Trading Approval Praised

March 27, 2000

The Commodity Futures Trading Commission’s approval of a new Internet-based trading method for cattle futures drew praise from the largest cattle producer group. The National Cattlemen’s Beef Association supports the "increased competition, whether in the live cattle marketplace or by having another risk management alternative that gives sellers an alternative when trading in futures markets."

An Amarillo,TX-based firm called FutureCom is the first Internet commodity exchange approved by the commission, NCBA said. It will offer initially a contract market in cash-settled live cattle futures and options contracts with plans to expand the number of contract markets offered. FutureCom is owned by the group of partnerships that own Texas Beef Group in Amarillo and is organized as fa for-profit limited partnership.

The CFTC specified certain conditions FutureCom must fulfill before trading begins, including additional independent third-party testing of the trading system. FutureCom also will be subject to certain ongoing conditions after operations begin, including the maintenance of a segregated credit facility to support the clearing system financially and ongoing refinement and development of its trade practice surveillance program.

Financial and record keeping surveillance over those FutureCom members that are CFTC registrants will be performed by the National Futures Association.