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CFTC Blocks CME Plan For 24x7 Crude Oil Futures Trading

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The US Commodity Futures Trading Commission on Thursday halted Chicago Mercantile Exchange's (CME) bid to launch 24-hour, seven-day-a-week trading in crude oil futures, saying it needs more time to determine whether the product complies with federal derivatives laws.

The regulator said it would exercise its authority to stay CME's self-certification of the contract, preventing the exchange from listing the product as early as Friday.

The decision comes after the CFTC, on June 22, opened a public consultation on whether extending standard futures contracts to continuous 24/7 trading across various asset classes, including crude oil, is consistent with the Commodity Exchange Act and the agency's regulatory framework.

However, despite the ongoing review and public comment period, CME submitted a self-certification filing for the crude oil contract on July 8.

"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," Michael S. Selig, CFTC chairman, said in a statement.

Selig said the agency does not take a "one-size-fits-all" approach to around-the-clock trading and criticized CME for moving ahead with the filing while the Commission was still evaluating the legal and regulatory implications.

CFTC rules stipulate that exchanges can list new contracts either by self-certifying compliance or by seeking formal Commission approval.

The CFTC said CME submitted filings under both procedures. Although the stay applies to the self-certification route, the Commission said it will continue to review the exchange's separate application under its formal approval process.

The regulator said the stay will remain in place until it determines whether the proposed 24/7 crude oil futures contract complies with the Commodity Exchange Act and CFTC regulations.

Price: $238.95, Change: $-4.12, Percent Change: -1.69%

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