EXCHANGE NEWSWIRE, 23 September 2011
CME’s petition to increase grain position limits by as much as 23% to 85% is being supported by CFTC, which issued a draft stating that “the Commission has determined to adopt the position limit levels proposed by the CME Group”. A vote on the rule is scheduled for October 4, and if passed, could take effect about 60 days after, according to Reuters.
CBOE raised minimum margin requirements for contracts linked to the CBOE Volatility Index (VIX), according to the Wall Street Journal. Initial margins for speculative positions are now more than twice what they were in early August, and rose to $10,600 as of Friday.
TMX CEO Tom Kloet said that the rationale to bring the Canadian Depository Services (CDS) under the exchange group’s control “exists whether we do Maple or don’t do Maple”, as stated in the Financial Times. TMX currently has an 18% stake in CDS, with the rest being held by large Canadian banks and by an investment industry regulator.
SGX will offer new order types from September 26, including “Market on Open and Market on Close”, “Market-to-limit” and “Session State Orders”, which will allow investors more flexibility in order execution. Traders can now exit all positions at the end of the trading day and set the session state in which their orders are to be triggered.
Oslo Borse suspended trading at 1140 GMT due to technical problems and it is not certain when operations will be resumed. A spokeswoman said that “we could not get the data from London that enables us to produce the feeds, which means that we don’t have the data needed to produce the indexes”.
CFTC Commissioner Bart Chilton said that regulation of international commodities markets will help control price volatility and benefit customers by making trading “more competitive, more efficient and effective.” Chilton also commented that the CFTC is writing market regulation rules as supply and demand fundamentals cannot explain the high price volatility seen this year and 2008.
CFTC aims to further expand the type of derivatives transactions that can be exempted from its commodity position limit regime. A final draft of the rule said that “the commission has considered the comments and has expanded the list of enumerated hedge transactions, consistent with the statutory definition of bona fide hedging.
European Union’s transaction tax plan is aimed at all derivatives trades, while bond auctions and dealings with central banks will be exempted, according to Bloomberg. A draft commission document states that “tax policy in this area should, generally speaking, favor socially and economically sustainable activities and penalize economically and socially not-rewarding activities.” The draft also cited “myopic profit maximization” related to HFT or complex structured products as an example of activities to be discouraged.
Provided By: Equity Research Desk, www.erdesk.com