The U.S. Commodity Futures Trading Commission (CFTC) is evaluating whether to block CME Group Inc.'s plans to launch round-the-clock trading for certain crude oil and gold futures contracts. This proposed move by CME, announced on a Thursday, reportedly caught the U.S. derivatives regulator by surprise. Senior agency officials, speaking anonymously, indicated that concerns exist regarding continuous trading in crude oil futures, specifically that it could exacerbate volatility during periods of geopolitical uncertainty and market stress. The CFTC believes these concerns might justify withholding approval for the contract.
CME Group aims to introduce 24/7 trading for a new crude oil contract, which would be one-tenth the size of its existing Micro WTI futures contract, with a scheduled launch date of August 30. Additionally, CME plans to begin round-the-clock trading in its 1-ounce gold futures contract on July 26. Both products require regulatory review and approval from the CFTC before they can be introduced. A spokesperson for CME declined to comment on the matter.
The CFTC subsequently opened a public comment period regarding 24/7 trading for traditional energy derivatives and perpetual contracts. CFTC Chairman Michael Selig stated that a clear, data-driven record would help the Commission understand the implications of extended trading hours and new contract designs. The CFTC evaluates perpetual futures applications on a case-by-case basis and has suggested that certain assets may not be appropriate for this product structure. This development comes shortly after CME Chief Executive Terry Duffy expressed concerns about the CFTC's decision to permit trading in perpetual cryptocurrency futures contracts.
