National Cattlemen's Beef Association Calls on CME Group to Decrease Market Volatility Caused by HFT

The National Cattlemen's Beef Association ("NCBA") urged the Chicago Mercantile Exchange Group ("CME Group") to consider recommendations to reduce volatility in the market caused primarily by high frequency trading. The recommendations are intended to provide Association members with "the confidence to continue utilizing CME Group livestock futures contracts as a risk management tool."

"In order to stem the tide and maintain producer faith in CME Group risk management tools," the NCBA made the following specific recommendations and urged CME Group to address them at the upcoming NCBA Committee Meeting:

• livestock contracts should have the same limits as grain, currency and index contracts;

• a one-second latency or delay between trade actions would "make automatic trading work";

• the CME Group must be proactive in identifying "spoofing" concerns instead of waiting until they are reported;

• the CME Group must include "firm-level generic identification" in its release of audit trail data for analysis; and

• the CME Group should engage actively in regulating and policing any misuse of futures contracts instead of basing "most of its investigations on tips or concerns brought forth from those who use the contracts" (according to some NCBA members).

The NCBA Cattle Marketing and International Trade Committee Meeting is scheduled from January 27 to 29, 2016, and will take place in San Diego, CA.