Commodity Futures Trading Commission (CFTC) dismissed
objections last week and approved rules submitted by Chicago
Board of Trade (CBoT) and Chicago Mercantile Exchange (CME)
that will pave the way for the exchanges' clearing link next
The rule change, approved last Tuesday following a short
three-day comment period, allows CBoT to move all of its
positions held at Board of Trade Clearing Corporation (BoTCC)
to CME Clearing House. The rules' approval was applauded by the
exchanges involved and opposed by some in the industry
including Futures Industry Association (FIA). John Damgard, FIA
president, issued a statement prior to the CFTC approval
opposing such a short comment period. He suggested that more
time was needed to consider the matter.
"A preliminary reading of the CBoT submission suggests that
the proposed regulation 701.01 raises some important legal and
policy issues," Damgard said in statement. "CBoT is asking CFTC
for authority to order clearing firms to abrogate the existing
contractual relationships between themselves and the
clearinghouse. These powers could be used not only in
relationship to the CBoT-CME link but at any future time. This
is a very broad rule, and we believe the industry deserves more
time to consider its implications."
This article is available exclusively to subscribers
Please log in to continue reading.
Not yet a subscriber?
Click here to take a free trial.
Already have an account? |
Please fill in your details below and a customer service representative will contact you.