Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues - Comment Letter - CME Group - March 25, 2011
Recommendations Regarding Regulatory Responses to the Market Events of May 6, 2010
March 25, 2011
From the comment letter:
"Supply and demand imbalances driven by market fundamentals cannot be wished away, and as the events of May 6th demonstrated, in even the most liquid markets demand for liquidity can at times legitimately overwhelm its supply. The examination of the events of May 6th have also clearly revealed, however, that structural issues and rules which breed uncertainty can exacerbate these imbalances by adversely affecting liquidity supply and undermine the effective and efficient functioning of the markets. By contrast, sound structures and rules can strengthen the orderliness and resilience of markets during periods of turbulence. CME Group concurs with the Committee’s view that market centers, regulators and the broader industry should focus their efforts on eliminating the former, extending the latter, and continually exploring new ideas for hardening the markets against instability and disruption."