The U.S. Commodity Futures Trading Commission (CFTC) plans to block the Chicago Mercantile Exchange’s (CME) application to rapidly list around-the-clock (24x7) oil contracts, citing concerns that energy markets are not yet prepared to handle a surge of such 24x7 derivative contracts.
In June, CME stated its intention to offer 24x7 trading for a new futures contract tied to WTI crude oil, with each contract representing 10 barrels, arguing that investors want to manage their positions “whenever news breaks.”On Wednesday, CME submitted a self-certification application for this new product—meaning the CFTC has only one day to intervene before the contract can be listed for trading. According to sources familiar with the matter, the CFTC plans to block CME’s self-certification.CFTC Chairman Michael Selig has met in recent weeks with executives from energy companies including Shell, Vitol, BP, and ExxonMobil. Another CME application for the same product—which requires a 45-day review period—remains under regulatory review.[ChainCatcher]