Futures Trading Act Enforcement Rules Article 6

The term "off-market offsetting" in subparagraph 1 of paragraph 2 of Article 108 of the Act means the trading activities of a futures commission merchant which, after receiving an order from its futures customer, fails to execute the trade on a futures exchange, but directly or indirectly takes the other side of the trade of its futures customers or brokers the trade with other futures customers.The term "cross-trading" in subparagraph 2 of paragraph 2 of Article 108 of the Act refers to the trading activities of a futures commission merchant which, intending to make a specific futures customer the counterparty to the futures trading of another futures customer, fails to follow the rules of open competitive bidding, but directly or indirectly privately brokers the futures trading.The term "taking the other side of a customer's order" in subparagraph 3 of paragraph 2 of Article 108 of the Act means a futures commission merchant which, without the prior written consent of a futures customer and without following the rules of the futures exchange, becomes the buyer of a sell order, or the seller of a buy order of such futures customer.The term "accommodation trading" in subparagraph 4 of paragraph 2 of Article 108 of the Act refers to the futures trading activity of futures firms or any other persons, who, without following the rules of open competitive bidding or the method for making block trades prescribed by the futures exchange, directly or indirectly coordinate with each other for the trading.The provisions referred to in the preceding four paragraphs shall not include off-exchange futures trading that is allowed according to law.