The Commodity Futures Trading Commission (CFTC) announced today that it will exercise its authority to stay the listing of a contract that would have allowed Chicago Mercantile Exchange to initiate 24/7 trading on crude oil futures as soon as tomorrow.

On June 22, the Commission issued a request for comment seeking public input on the propriety of extension of standard futures contracts to 24/7 trading, including crude oil. Despite an ongoing public comment period and known risks as to whether such trading on crude oil would be consistent with the Commodity Exchange Act and Commission regulations thereunder, on July 8, CME sought to self-certify such a contract.

The Commission said it will exercise its authority under 17 C.F.R. 40.2(c) to stay this contract.

“The CFTC is in the midst of examining whether 24/7 trading of futures contracts on various asset classes is consistent with our statutory Core Principles,” said Chairman Michael S. Selig. “As I’ve said repeatedly, we do not take a one-size-fits all approach to 24/7 trading. CME’s decision to disregard the Commission’s effort to undertake a reasoned analysis of the critical issues at stake is wholly inappropriate and necessitates Commission action to stay the certification. The Commission encourages exchanges to work with agency staff to address potential legal issues before seeking to list novel contracts.”

The CFTC’s regulations offer exchanges two methods to list contracts — self certification under 40.2 or to seek Commission review and approval under 40.3. CME made simultaneous, but separate filings under both provisions. The Commission will conduct a thorough review of the product filings under its 40.3 authorities.

By staying the 40.2 filing, the Commission will bar CME from listing such contracts before the Commission has determined they comply with the CEA and Commission regulations thereunder.