CME inadvertently placed test orders Monday

By Reuters
Posted Sep. 14, 2010 at 10:17 a.m.

U.S. derivatives exchange operator CME Group Inc. inadvertently placed dummy test orders into its active energy and metals markets on the CME Globex platform for about 6 minutes on Monday afternoon.

CME said that during the period beginning at 2:38 p.m. (CDT) on Monday, Sept. 13, test orders should have actually been posted into its quality assurance testing environment instead of its live trading systems.

“There were no busted trades and no price impact,” a spokesman said. The company added that it “began working with affected customers and implemented other corrective steps” as soon as it became aware of the issue.

The world’s largest futures exchange operator said it informed the Commodity Futures Trading Commission of developments related to this event, which comes at a critical juncture in financial markets.

The CME and other exchanges are under the microscope after the mostly electronic markets broke down in the May “flash crash,” sparking a broad review of computerized trading.

CME said it will address these transactions in accordance with its Rule 587, which deals with “phantom orders.”

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