Last Friday a group of brokers and traders made a last-minute bid to stop one more time change with the CME Group. Their aim is to halt a change to procedures for end-of-day prices for ag futures on the Chicago Board of Trade. That settlement time is set to change to 2 p.m. today.
The traders filed their case with the Cook County Chancery court in an effort to block the new rules from going into effect. They claim, according to wire reports, that the combined 2 p.m. settlement - with both the electronic and the pit trade settling at the same time could effectively end the use of the pit trade floor - the iconic market for U.S. grains for more than a century.
Already, CME Group has come under fire from a group - Save the Floor - that claims the moves are impacting price transparency and the future of the grain trade. At issue is an algorithm CME Group is using to "settle" pit trade and electronic market pricing. CME Group started tinkering with e-market and pit hours in May and the final settle-at-2-p.m. move was announced earlier this month.
The plaintiffs claim that the moves by CME Group would end hundreds of jobs. In addition, traders claim their share value is collapsing and they don't feel as if they've been listened too as CME Group management has moved ahead with changes.
CME Group is also under scrutiny after the MF Global Halloween collapse that is still working its way through bankruptcy courts.
For more information on the lawsuit check out the Business Week report and Reuters story. More information will be available as the court rules on the suit. The 2 p.m. settlement time is cleared by the U.S. Commodity Futures Trading Commission and goes into effect today.