Reuters: Regulatory News: UPDATE 1-CME must delay trading extension - US regulator

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UPDATE 1-CME must delay trading extension - US regulator May 3rd 2012, 16:30 Thu May 3, 2012 1:09pm EDT * CFTC says has not received CME request for 22-hour trading * CFTC needs 10 business days to review request * CME had announced planned trading extension for May 14 By Alexandra Alper WASHINGTON, May 3 (Reuters) - CME Group Inc will have to delay its plan to extend trading to 22 hours for grains futures because it has not yet requested permission from the Commodity Futures Trading Commission, the U.S. regulator said on T hu rsday. The CFTC needs at least 10 business days to review the plan, which the CME had said it would implement o n May 14. The CME's Chicago Board of Trade, a bastion of trading tradition and center of the global grain world, had announced those plans on Tuesday, in an effort to stave off competition from Atlanta-based IntercontinentalExchange (ICE). ICE announced plans last month to challenge Chicago's iron grip on grains markets by listing look-alike wheat, corn and soy contracts -- on a 22-hour basis. Most other major commodity exchanges, including the CME's New York Mercantile Exchange (NYMEX), had already shifted to near 24-hour trading cycles as China's rise spurred demand for Asia-hours activity, while hedge funds and high-frequency traders clamored for greater access. Denizens of CME's CBOT trading floor -- which will continue to trade during the same open outcry hours of 9:30 a.m. to 1:15 p.m. Central Time (CDT/1430-1615 GMT) -- had resisted the move. Groups like the National Grain and Feed Association voiced concerns on Wednesday that CME had allowed a "relatively short time for the industry to adapt." Yet, traders felt little comfort in the delay. Many remained worried that large traders will gain an unfair advantage from the 22-hour trading day, which will keep markets open for the first time when the U.S. Department of Agriculture issues key crop data. Large traders are expected to gain an advantage because they will have the personnel and advanced technology to instantly analyze and react to U.S. crop data. "I think it's a bad mistake," said Jim Gerlach, president of A/C Trading, about the extended hours. A CFTC spokesman said the agency has the option of extending the review period for the so-called "self certification" by up to 90 days. The public will be able to comment on the request, which will be posted on the CFTC website. CME did not immediately respond to questions about a new implementation date. Link this Share this Digg this Email Reprints

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