By Karl Plume
CHICAGO, May 16 (Reuters) - CME Group should
temporarily suspend open-outcry trading if its electronic
trading platform crashes and reopen for a brief after-hours
session if the system is restored later that day, a grain
industry group said.
The call follows last month's worst-ever outage on the
world's top agricultural commodities exchange.
CME should also develop emergency procedures in case of any
future outages of its Globex platform, which handles 95 percent
of trading volume in agricultural futures, the National Grain
and Feed Association said in a letter to the exchange operator
dated May 12 and posted to its website.
A Globex outage in several of CME's agricultural futures
markets on April 8 channeled a heavy volume of orders to its
depleted open-outcry trading "pits" near the close of trading,
typically a very busy point of the day.
"Many firms have transitioned their systems to the
electronic platform and are not prepared to try to execute large
order volumes through the pits, which in turn are no longer
prepared to handle such volume," MJ Anderson, chairman of NGFA's
risk management committee, said in the letter.
"By suspending trading, all participants will be ensured
fair access to markets, and confusion as to positions will be
limited," he said.
CME declined to comment on the feedback but said it
regularly discusses such issues with its customers and clients.
The NGFA's recommendations echoed those of many traders
following the April 8 outage, which stopped electronic trading
in 31 agricultural markets and which CME blamed on a technical
A Reuters analysis of CME trading data showed that pit
traders largely succeeded in replacing screen trade in some
(Editing by Chris Reese)