Eurex's US futures exchange application came under intense scrutiny in a Washington hearing last Thursday, shedding new light on several details of the exchange as well as regulatory opinions recently raised by competitors.
Members of the US House Agriculture Committee questioned Mike McErlean, president and ceo of Eurex US, Jim Newsome, chairman of Commodity Futures Trading Commission (CFTC), Chicago's exchange leaders, as well as trade association members about a host of issues surrounding the exchange's application. The nearly three-hour meeting covered questions about market practices allowed by Eurex US as well as regulatory oversight, self-regulation, its ownership and board structure and market incentive programs.
Ultimately, the Ag committee can do little to prevent the application from being approved or rejected by CFTC. But because the committee oversees the regulator, it can exert pressure on CFTC. Political pressure, for example, helped push CFTC to move Eurex's application from the 60-day fast...