CME and ICE at odds over cash contract rules; (News Story)
August 16, 2011
The CME Group and IntercontinentalExchange are squaring off over new rules for commodities trading. At issue are proposed rules that would prevent speculators from amassing futures contracts totaling more than 25 per cent of the deliverable supply of a commodity in the days leading up to expiry. But speculators could hold five times as many contracts if they settle only in cash, and do not result in delivery.
CME, in a letter dated Monday, opposed the more generous limits for cash-settled contracts, saying they increase the threat of price manipulation and were unfair. ICE, in a letter last week, said its rival's "request that the conditional limit be decreased or eliminated is a change in the status quo that is not supported by the broader marketplace."
Cross References: Dodd-Frank Section 737