U.S. derivatives regulators are blocking the Chicago Mercantile Exchange’s (CME) move to introduce round-the-clock futures trading amid an ongoing policy consultation on the subject.
The U.S. Commodity Futures Trading Commission (CFTC) announced that it will stay the listing of an oil futures contract that the CME self certified, which could have enabled the launch of 24/7 trading immediately.
The regulator noted that it’s in the midst of an ongoing public consultation, initiated June 22, seeking public input on, “the propriety of extension of standard futures contracts to 24/7 trading, including crude oil.”
Given that continuing policy process, which hasn’t reached any conclusions on round-the-clock trading, the CFTC exercised its authority to stay the exchange’s proposed listing — which bars the CME from listing these kinds of contracts until the regulator has determined that they comply with derivatives law and regulations.
“The CFTC is in the midst of examining whether 24/7 trading of futures contracts on various asset classes is consistent with our statutory core principles,” CFTC chairman Michael Selig said in a release.
“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,” he added.
Selig called on other exchanges, “to work with agency staff to address potential legal issues before seeking to list novel contracts.”