CFTC Proposed Rule: Prohibiting the Aggregation of Orders to Satisfy Minimum Block Sizes or Cap Size Requirements

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Gavel.png FINAL RULE: This rule was part of the suite of final rules approved at the CFTC Open Meeting, May 16, 2013, under the title CFTC Final Rule: Procedures to Establish Appropriate Minimum Block Sizes for Large Notional Off-Facility Swaps and Block Trades; Further Measures to Protect the Identities of Parties to Swap Transactions. The rule entered Federal Register on May 31, 2013, and its effective date was July 20, 2013.
Timeline-Block Trade Aggregation Prohibition
Proposal Date Final Rule Issue Effective Date
June 27, 2012 May 31, 2013 July 20, 2013
Dodd-Frank Timeline, Real Time Public Reporting of Swap Transaction and Pricing Data
Final Rule Issue Effective Date Compliance Date
December 20, 2011 March 9, 2012 December 31, 2012
Dodd-Frank Timeline, Block Trade Minimum Size, Protection of Identities, CFTC
Proposal Date Final Rule Issue Effective Date
February 23, 2012 May 31, 2013 July 20, 2013

On June 25, 2012, the CFTC issued a proposed rulemaking that re-proposed certain provisions pertaining to block trades in swap contracts.[1] The rule would prohibit the aggregation of orders to satisfy minimum block trade or cap sizes.


On November 19, 2010, the commission issued its proposed rules for real-time reporting. The proposal included the reporting of data to a "real-time disseminator" such as a swap data repository, or to a third party such as a designated contract market (DCM) or swap execution facility (SEF) "as soon as technologically practicable."

The proposal also included tests to be conducted to determine the appropriate minimum block size for block trades and large notional transactions, a "distribution test" and "social size" test, based a trade's size relative to other trades in its category. The minimum threshold for block transactions would have been the larger of the two. However, after considering the comments from market participants, the commission admitted that they "got it wrong."[2]

The commission issued its final real-time reporting rules at its December 20, 2011 open meeting. The block trade rules were not part of the final rule. At its February 23, 2012 open meeting, the CFTC approved a proposed rulemaking that would group swaps into separate categories, establish minimum sizes for block trades and large notional off-facility swaps in each category, and protect the identities of swap counterparties in connection with the real-time public reporting of swap transaction and pricing data.[3]

The Proposed Rule

Provisions of the proposed rulemaking:

  • Orders for different trading accounts may not be aggregated in order to satisfy the minimum block size or cap size requirements, except for orders aggregated by certain commodity trading advisors, investment advisers and foreign persons. The qualifying persons must have at least $25 million in total under management.
  • Parties to a block trade must individually qualify as eligible contract participants ("ECPs"), except where a designated contract market allows certain commodity trading advisors, investment advisers and foreign persons to transact block trades for customers who are not eligible contract participants, if such qualifying commodity trading advisor, investment adviser or foreign person has more than $25,000,000 in total assets under management; and
  • Persons transacting block trades on behalf of customers must receive prior written instructions or consent from the customer.

The proposal appeared in the Federal Register on June 27, 2012. The deadline for public comment was July 27, 2012. Comments on block trade rules can be viewed HERE.

Related Document: Federal Register Entry

Comment Letters

You can find the comment letters on this proposed rule HERE


  1. CFTC Approves Notice of Proposed Rulemaking Prohibiting the Aggregation of Orders to Satisfy Minimum Block Sizes or Cap Size Requirements. CFTC. Retrieved on June 25, 2012.
  2. CFTC "got it wrong" on block trade threshold rule. Retrieved on February 24, 2012.
  3. CFTC Open Meeting on One Final Rule and One Proposed Rule. CFTC. Retrieved on February 24, 2012.

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