chicago / reuters / CME Group faced off with a group of traders in Federal Court June 26 over new rules for settling end-of-day grain prices that the traders fear will put them out of business.
The traders, who work in the open-outcry pits at CME’s Chicago Board of Trade, are fighting to preserve a century-old tradition of settling futures prices for crops like corn and soybeans based on transactions executed on the historic trading floor.
They sued the exchange to reverse its decision to incorporate electronic activity into settlement prices, worried the change will shift volume away from the pits. The new settlement rules took effect June 25.
As a result of the change, floor traders “are going to sustain serious, irreparable injury,” Richard Goldwasser, a lawyer for the traders, told U.S. District Judge John Darrah.
Darrah said the issue was complex and admonished the traders for waiting until the last minute to file their lawsuit.
CME submitted details on the new rules to the CFTC on May 24.
“I acknowledge that there is an emergency,” Darrah said. “The question is, who caused the emergency?” The court scheduled another hearing for Aug. 14.