The battle between CME Group and ELX Futures over exchange of futures for futures should not be happening, argues Philip McBride Johnson. ELX is simply trying to free-ride on CME’s liquidity.
A funny thing happened recently in the name of
"competition". ELX Futures, founded in late 2007 by some of
Wall Street’s biggest firms, effectively sat down
and wrote the equivalent of the following resolution:
RESOLVED, that effective immediately, the Johnson family
shall have full and unfettered access to their
neighbour’s swimming pool.
And, without the consent of, or even consultation with, that
In reality, ELX adopted a "rule" that purports to allow US
Treasury futures created on the Chicago Board of Trade simply
to be transferred to ELX through a non-competitive "exchange of
futures for futures".
The CBOT has said "no".
At this point I must declare: I have a dog in this race, if
not several. My law firm acts for CME Group, now owner of the
CBOT, including on this matter.
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