Block trades are a type of noncompetitive transaction that are permissible under rules of the Commodity Futures Trading Commission if they are executed strictly in accordance with the applicable exchange’s rules. If they are not so executed, the transaction may be a violation of not only the applicable exchange’s rules, but of applicable law and CFTC rules. Typically, exchange block trade rules set forth the minimum qualifications of counterparties, the minimum size of permitted block trades; time reporting requirements, a ban on the entity receiving the customer’s order from trading for itself based on the order information (e.g., no pre-hedging or anticipatory hedging); and a requirement that once a person receives nonpublic information regarding a potential block trade, it cannot trade to take advantage of the information in advance of a public report of the block trade by the exchange. Not all of an exchange’s products may be eligible for block trading, and block trading thresholds may change depending on the time of day. In particular, a trader receiving a request for a block trade, and refusing the transaction, may not use the information for his/her own trading decision, or share the information with another person until a public report of such block trade is published. Likewise, a trader receiving a request for a block trade cannot enter an order for the same or closely related product first, and subsequently execute the block trade. He or she must execute the block trade first, and then may enter a hedging or another type of order for the same or closely related product. This subsequent order may occur as soon as the block trade is executed, even prior to the public report of the trade. However, exchanges' restrictions on using information obtained in pre-execution communications are not meant to interfere with unrelated trading activity of a firm. Rules on block trades may subtly vary in some aspects from exchange to exchange. (Click here to access CME Group’s Market Regulatory Advisory Notice dated November 30, 2015 regarding block trades—which includes the text of its applicable rule 526—and here to access ICE Futures U.S. Block Trades – FAQs dated November 18, 2015—which includes the text of its applicable rule 4.07. Click here to also access ICE Futures U.S. Pre-Execution Communications FAQ dated January 2015.)