Zero Hedge reports that Eric Scott Hunsader, founder of market data research firm Nanex in Winnetka, Illinois, which exposed the algorithm trading responsible for the flash crash in gold futures on January 6 this year has discovered documentation at the U.S. Commodity Futures Trading Commission showing that CME Group, operator of various futures markets, including the New York Commodity Exchange (Comex), has been providing to central banks outside the United States, since at least July 1, 2013, a program of discounts for trading equity market, bond market, and commodity market futures, including gold and silver futures.
The documentation consists of a letter, dated January 29 this year, from CME Group's managing director and chief regulatory counsel, Christopher Bowen, notifying the CFTC of changes to the discount trading program for central banks. In his letter, Bowen insists, "The program's incentive structure does not impact the exchanges' ability to perform their trade practice and market surveillance obligations under the CEA [Commodity Exchange Act]. The exchanges' market regulation staff will monitor trading in the program's products to prevent manipulative trading and market abuse."
This post was published at GATA
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