On April 21, Beijing time, the Chicago Mercantile Exchange (CME) WTI crude oil futures in May had an unprecedented negative settlement price, which caused widespread concern and doubt at home and abroad.
According to reports, Continental resources, a large listed oil company in the United States, has sent an open letter to the Commodity Futures Trading Commission (CFTC), the U.S. futures market regulator, criticizing CME severely, believing that the price change may be related to the sudden conversion of CME's computer model under the current market conditions and the way of notification to allow negative price transactions. Other companies and organizations have also raised public questions about CME's role in the event, including the changes to the trading rules, the timing of these changes, and so on. According to the reporter, the Bank of China has also entrusted a lawyer to formally send a letter to CME urging it to investigate the reasons for the abnormal fluctuation of crude oil futures prices on that day.
As for CME being questioned by the market, the Financial Times reporter interviewed Professor Guo Li of Peking University Law School.
Guo Li introduced that the market showed that the crude oil futures price change is quite unusual. Its price was always positive on the day, but in the last 20 minutes of trading, it suddenly fell by nearly 40 dollars / barrel, of which 25 dollars fell in the last three minutes of trading. This kind of abnormal price change caused extensive speculation among market participants. Not long ago, the CFTC announced an in-depth investigation.
Aiming at the relationship between CME as an exchange and crude oil futures price changes, Guo said that CME is a trading platform and does not participate in trading itself, but it is the maker of trading rules. Historically, CME's WTI crude oil futures have never traded at negative prices. On April 8, CME announced that it was testing the new system and studying the possibility of supporting negative price trading of crude oil futures. On April 20, CME announced in the trading session that WTI crude oil futures could be traded at a negative price, falling below zero on the same day, and finally closed at a negative price of 37.63 USD / barrel. It can be seen that the actions of CME as a trading rule maker have a direct and significant impact on the trading mode and pricing of WTI crude oil futures. In addition, CME is also the regulator of trading activities in a certain sense, and has the responsibility to investigate the illegal price manipulation and other improper behaviors in the futures trading market.
Guo Li analyzed the impact of the crude oil futures price fluctuation on the market. He believes that many investors, trading intermediaries and other market participants, both inside and outside the United States, cannot predict that crude oil futures will trade at a negative price. The Wall Street Journal recently reported that CME's change of trading mode has puzzled many investors. Several major trading intermediaries in India have allegedly taken legal action against the commodity futures exchange of India (McX) and the securities and Exchange Commission of India (SEBI), requiring the court to annul the negative settlement price set by McX.
According to the reporter, BOC continued to communicate with relevant market institutions, comprehensively reviewing product design, business strategy, risk control and other links and processes. Listen to customers' demands and market concerns, take due responsibilities under the legal framework, work together with customers, and do our best to protect the legitimate rights and interests of customers.
