CME Group has said it does not have to comply with the Commodity Futures Trading Commission’s ruling that it must accept trades opened at rival bourse ELX Futures, a so-called exchange of futures for futures (EFF).
CME’s statement, suggesting that it will continue to refuse to accept trades executed at ELX, came after a letter from the US derivatives regulator was publicised, which rejected CME’s argument for refusing EFF trades as “unpersuasive”.
The CFTC approved ELX’s application for a ruling in favour of EFF in October 2009. That effectively gave permission for market participants to open trades with ELX and then close them at CME Group.
However, almost immediately after that regulatory ruling, CME said its own rules meant it could not comply with the order. The exchange said it classified EFF trades as wash trades, and therefore prohibited them, an interpretation which it believes to...