CBOT on Solid Ground in Denying `Futures for Futures’ Trades, Letter Says

The Chicago Board of Trade told the Commodity Futures Trading Commission in a Feb. 8 letter that the exchange’s position of not accepting “exchange of futures for futures” transactions is legal and that the CFTC should deny a rival’s bid to compel CBOT to allow the trades on its platform.

EFF transactions essentially are two separate but related, privately negotiated, inter-market transactions between the same commercial participants. On one side, a party establishes a futures position on one designated contract market and simultaneously offsets the positions on another DCM; the other party takes the other side of the transaction. ELX ...