Swiss Franc Shock Spurs CME to Change Rules on Emergency HaltsMatthew Leising
CME Group Inc., buffeted by trading halts last week after the Swiss National Bank prompted a record surge in the franc, said it was altering how it handles volatility during emergencies.
Under rules announced Wednesday, it will be easier for the owner of the Chicago Mercantile Exchange to change limits on price swings during unusual circumstances. On Jan. 15, CME was forced to alter volatility curbs on an ad-hoc basis as the franc jumped a record 41 percent against the euro, a move so big that it halted CME futures trading three times.
CME’s global command center -- where trading at the exchange is monitored in real time -- can now modify the price limits or remove them entirely during an emergency, according to a statement. It can also decide whether trading of a given futures product should be halted or not during times of distress.