CME Group, the world's leading and most diverse derivatives marketplace, announced that CME Group Executive Chairman Terry Duffy will appear before the U.S. House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises today to discuss the market events of Thursday, May 6.
"CME Group futures markets functioned well on May 6, despite volatile financial market conditions and apparent pricing problems in selected individual securities markets. Following our review, we found no evidence of improper trading activity or erroneous trades by CME Globex customers," said Terry Duffy, CME Group Executive Chairman. "During the steep market decline that occurred between approximately 1:41 and 1:45 pm (CT), liquidity and effective spreads in CME's E-mini S&P 500 futures contracts were significantly better than in the related SPDR ETFs. While futures markets functioned properly, it is clear that opportunities exist to enhance the functioning of securities markets and to better coordinate across securities, futures and options markets during times of market stress. Today, CME Group is recommending: (1) the implementation of harmonized, single stock 'circuit breakers' across all regulated securities exchanges and alternative execution venues in the securities markets; (2) the adoption of harmonized 'stop logic functionality' by each regulated securities exchange and alternative securities execution venue to prevent 'waterfall' events like those that occurred in 3M, P&G and Accenture stocks on May 6; and (3) re-evaluation of inter-market circuit breaker levels and mechanisms in order to ensure they reflect market structure shifts in the securities markets, as well as current market conditions."
The hearing is scheduled for 3:00 p.m. Eastern time in the Rayburn House Office Building. Mr. Duffy's written testimony also will be available at that time.