It was nearly two years ago when ELX Futures L.P. proudly announced that the Commodity Futures Trading Commission (CFTC) had approved their exchange of futures for futures (EFF) rule.
It was a considerable victory for the upstart exchange because it would make it easier for end users to transfer their open interest to its clearinghouse from the CME Group clearinghouse or vice versa. (more…)
The recent merger announcements from the London Stock Exchange and Toronto Exchange Group (TMX), and Deutsche Börse and NYSE Euronext brought a surge of speculation and potential merger stories to the forefront of business wires.
Who will merge next? Who will offer a competitive bid? I guess it is inevitable but there is something annoying about seeing the business press simply speculating on potential deals once these mergers get in the public consciousness.
According to a story put out by Cornell University on Dec. 1, investors, traders and regulators may have another early warning system to help prevent another market crash like the one on May 6. Instead of feeling panic and fear that investments could again be wiped out in seconds, they can rest assured that future “flash crashes” now might be “predictable and possibly preventable” thanks to a metric developed by two professors at Cornell University. (more…)
The financial landscape has become an alphabet soup of regulators, exchanges and registration categories that range from APs to USD. With the passage of the Dodd-Frank bill we have seen even more added, including some that we don’t even know what they will do or what they will look like yet. Two that we are still figuring out are swap exchange facilities and security-based swap exchange facilities, aptly shortened to SEFs and SB SEFs. To be fair, there has been talk for years about moving swaps to exchanges and clearinghouses. Until Lehman Brothers’ collapse, though, that’s all it really was – talk. Now with a government mandate, the clock is ticking before SEFs are expected to be up and running.
Commodity Futures Trading Commission Chairman Gary Gensler has not endeared himself to the industry since taking the reins of the industry regulator. It has been an odd honeymoon as Gensler’s nomination was being held up by Senators concerned over his past advocacy of keeping over-the-counter trading free from direct regulation.
CME Group has received a lot of honors since its IPO in late 2002 and generally is seen as a pretty forward looking company, so it was a bit of a surprise to see on a list of Chicago “worst boards”.
The Boston Stock Exchange (BSE), a mutual organization that manages or regulates multiple ventures, announced Sept. 5 that it has discontinued the operations of the Boston Equities Exchange (BEX).
BEX was launched in August 2005 as an electronic stock exchange but failed to gain market share, according to BSE. BEX did not see significant gains during a summer of record trading volume.
The BSE will continue to be active in the marketplace and will support its remaining ventures including the regulation of the Boston Options Exchange (BOX).
MMM. Hmm. The New York Mercantile Exchange (Nymex) has confessed — revealing in a statement that it is in talks with certain “parties” in regards to possible transactions, meaning a merger or sale.
The Nymex did not, however, name those parties, which are rumored to be the New York Stock Exchange (NYSE) and the Chicago Mercantile Exchange (CME) Group, neither of which are saying anything other than “no comment,” which surely means YES!
Speculation now lies in which exchange will end up the victor — seems to be NYSE Euronext at the moment.
Jurgens Bauer, a cotton trader at the New York Board of Trade – a regulated subsidiary of the Intercontinental Exchange (ICE) – is reporting that cotton prices went limit down today, and that the ICE trading platform (which lists Nybot’s contracts) went down with it.
“The only thing in the building that was going up today was the elevator. Even the escalator was broken on the second floor,” he wrote in an e-mail. More importantly, he writes that a serious flaw was exposed in ICE electronic trading platform: once cotton was offered at the limit, Web ICE shut down as a result.
“What happened was that trades on ICE continued to take place below limit. It was announced that any transactions that took place below limit would be nullified and canceled. This not only impacted out-right transactions, but also spreads in which one leg, or both, used inappropriate price levels. This created a nightmare for some, as they didn’t know their position. But worst of all, following the announcement trades below the limit continued to occur.”
More as the story develops.
The New York Mercantile Exchange has launched two new ethanol swaps contracts to compete with ethanol swaps on ChemConnect, which was recently acquired by the Intercontinental Exchange (ICE) and CME Group’s ethanol futures and cash settled ethanol swaps, which it recently acquired by purchasing the Chicago Board of Trade (CBOT).
“It’s going to be interesting to see if there is enough interest to become viable contracts. I expect them to be more of a slow burn,” says Rick L. Kment, ethanol and biofuels analyst for DTN. “The thing that has made RBOB and crude oil so successful is not commercial traders, while they are an important part of it. It’s really the investment and the non-commercial trader that takes that offsetting position; and especially with swap contracts, that kind of limits itself to being commercially driven.”
