CFTC stays CME's crude oil futures filing as it reviews 24/7 trading proposal
The CFTC said CME's filing cannot take effect while the agency reviews whether 24/7 crude oil futures trading complies with federal rules.
The Commodity Futures Trading Commission said July 9 that it will stay CME Group's self-certified filing for a crude oil futures contract tied to 24/7 trading, pausing the product while the agency reviews it under a separate approval process.
The move means CME cannot list the contract before the CFTC determines it complies with the Commodity Exchange Act and Commission regulations. The agency said the filing would have allowed the Chicago Mercantile Exchange to begin 24/7 trading on crude oil futures as soon as the next day.
The decision comes as the CFTC considers whether standard futures contracts should extend to round-the-clock trading across asset classes. In a June 22 request for comment, the commission asked the public to weigh in on that question, including for crude oil. The agency said CME self-certified the contract on July 8 while that comment period was still open and despite what it called known risks tied to compliance with federal law and regulations.
The CFTC said exchanges can list contracts in two ways: through self-certification under 17 C.F.R. 40.2 or through Commission review and approval under 17 C.F.R. 40.3. The agency said CME made simultaneous but separate filings under both provisions. The CFTC said it will review the product under its 40.3 authority while the stay keeps the contract from going live.
Chairman Michael S. Selig said the agency is examining whether 24/7 trading of futures contracts across asset classes fits the statutory core principles that govern the market. He said the CFTC does not take a one-size-fits-all approach to 24/7 trading and said CME's filing was inappropriate.
The press release did not say how long the review may take. It also did not say when the commission expects to finish considering the public comments on 24/7 futures trading.
What happens next depends on the CFTC's review under 40.3 and its assessment of the broader 24/7 trading issue. For now, the stay prevents CME from listing the contract before the agency completes its compliance review.
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