The CFTC Order requires FCStone Financial and FCStone Merchant, jointly and severally, to pay a $280,000 civil monetary penalty, to comply with certain undertakings regarding their respective practices regarding EFRPs, and to cease and desist from further violations of the Commodity Exchange Act (CEA) and CFTC Regulations, as charged. The commodity futures trading laws generally require that futures trades be executed on a futures exchange. However, the laws allow for exceptions to that requirement, such as when the futures trade is part of an EFRP, which is where parties exchange futures contracts for a related cash or over-the-counter (OTC) derivative position, such as an option or a swap, in accordance with exchange requirements. As long as the legal requirements are met, parties are permitted to execute EFRPs away from an exchange, but then must report their EFRPs to an exchange after execution. However, failure to follow the legal requirements results in such trading being fictitious.