Dodd-Frank Section 747 prohibiting Spoofing

Elise Fleischaker Rules And Regulations

cftcSection 747 of the Dodd-Frank Act amends section 4c(a) of the CEA  (“Prohibited Transactions”) to add a new section entitled “Disruptive Practices.” New CEA section 4c(a)(5) makes it unlawful for any person to engage in any trading, practice, or conduct on or subject to the rules of a registered entity that–(A) violates bids or offers; (B) demonstrates intentional or reckless disregard for the orderly execution of transactions during the closing period; or (C) is, is of the character of, or is commonly known to the trade as, “spoofing” (bidding or offering with the intent to cancel the bid or offer before execution). Dodd-Frank Act section 747 also amends section 4c(a) of the CEA by granting the Commission authority under new section 4c(a)(6) of the CEA to promulgate such “rules and regulations as, in the judgment of the Commission, are reasonably necessary to prohibit the trading practices” enumerated therein “and any other trading practice that is disruptive of fair and equitable trading.” \4\