* CME has now until Oct. 4 to impose new spec margin rules
* Rules will increase trading costs to spec members
* Unclear if CFTC will ultimately revise rule
NEW YORK, July 24 The CME Group has been
granted a second extension by the U.S. Commodity Futures Trading
Commission before imposing controversial new rules that will
increase margins for its non-hedge, or spec, members, a CME
spokesman said on Tuesday.
CME, the Chicago-based U.S. commodity and futures exchange,
now has until Oct. 4 to implement the rules required under new
federal legislation, spokesman Damon Leavell said.
The extension is also expected to apply to rival
InterContinentalExchange, sources said. ICE declined to
The rules will increase trading costs by as much as a third
for exchange members classified as speculators and not bona-fide
hedgers such as farmers.
It is unclear whether the 60-day reprieve is aimed at giving
the exchange and its members more time to prepare for the
changes or if the CFTC may ultimately revise the rule, which is
part of the new exchange rules under the Dodd-Frank financial
Atlanta-based ICE and CME rushed to secure the first
extension in May and delay the changes after traders expressed
alarm about their financial impact.
In May, the exchanges said they would work with regulators
to address member-customer concerns during the review period.
At the time, news of the rule changes caused widespread
confusion among metals, energy and agricultural traders and
roiled the Chicago Board of Trade corn market as local
speculators liquidated spread positions rather than face the
need to put more capital on margin to maintain positions.