WASHINGTON - The Commodity Futures Trading Commission extended the comment period on a proposal to establish the nation's first electronic futures exchange, delaying action again on the proposed market.
The comment period ended on December 24. However, the commission, which has been reviewing the proposed exchange for a year now, said it would take additional comments through January 26.
The agency normally accepts letters on a pending proposal even after its comment period ends, but by officially extending a comment period the CFTC is letting the public know that more input is wanted.
The electronic exchange, known as FutureCom, would initially trade live cattle futures and options contracts in competition with the "open outcry" market on the Chicago Mercantile Exchange.
The agency has until July to act on the FutureCom proposal.
The CFTC action follows concerns raised by the three largest U.S. commodity exchanges that more information about FutureCom needs to be available to the public.
At FutureCom, orders would be sent to the exchange over the Internet through personal computers by traders using identification numbers and passwords to get access to secure trading on the electronic market.
FutureCom's livestock contracts would be cash-settled and reflect the value of 40,000 pounds of live cattle in the U.S. Midwest, with settlement based on cash prices surveyed by the U.S. Department of Agriculture. FutureCom's developer plans to list other contracts once the exchange is up and running.
The developer of the market, the privately held Texas Beef Group in Amarillo, recently sent the CFTC revised rules on how FutureCom would operate. However, the existing exchanges still are not satisfied.
"Many important questions remain unanswered, and serious shortcomings appear in every key area of FutureCom's proposed operation," the Chicago Mercantile Exchange told the CFTC last month. Similar complaints have been raised by the Chicago Board of Trade and the New York Mercantile Exchange.
Texas Beef's Bill O'Brien, who would run FutureCom, said then that the exchanges were asking for more information only in an effort to delay a CFTC vote on the electronic market.
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