Chicago’s world-leading futures exchanges, as they like to call themselves, were caught red-handed last week doing what they do best–marching off in different directions.
The top movers and shakers at the Chicago Board of Trade and Chicago Mercantile Exchange had delivered the same message in Senate hearings last winter: The financial futures segment, they concurred, needs relief from heavy regulation by the Commodity Futures Trading Commission or the exchanges will continue to lose business to non-exchange dealers and foreign markets.
After an initial thrust, momentum stalled for regulation reform. So, the CBOT broke ranks and, with a coalition of eight securities firms, proposed shifting regulatory authority for government securities contracts to the Treasury Department from the CFTC.
The proposal is aimed at protecting the CBOT’s big bond-futures contract, but would leave the Merc’s foreign currency contracts without protection and put the Merc’s stock-index futures in jeopardy.
“We would rather have no bill than a bill with these provisions,” said Jack Sandner, Merc chairman.
