The Commodity Futures Trading Commission (CFTC) recently announced it will exercise its authority to stay the listing of a contract that would have allowed Chicago Mercantile Exchange (CME) to initiate around-the-clock trading on crude oil futures as soon as Friday.
The CFTC issued a request for comment on June 22 seeking public input on the propriety of extension of standard futures contracts to 24/7 trading, including crude oil. The Chicago Mercantile Exchange sought to self-certify an oil trading contract on July 8 despite the ongoing public comment period and the uncertainty as to whether such trading would be consistent with commission regulations following the comment period.
CFTC regulations offer exchanges two methods to list contracts, either through self certification under 40.2 or through commission review and approval under 40.3. CME made simultaneous, but separate filings, under both provisions.
“As I’ve said repeatedly, we do not take a one-size-fits all approach to 24/7 trading,” CFTC Chairman Michael Selig said. “CME’s decision to disregard the Commission’s effort to undertake a reasoned analysis of the critical issues at stake is wholly inappropriate and necessitates Commission action to stay the certification.”
The commission will conduct a review. Until there is a determination, the exchange is barred from listing such contracts.