UPDATE 1-CME: Ball in CFTC's court on rival ELX trade rule

* We've done what regulator has asked, CME official says

* ELX CEO says frustrated by delay, but optimistic

* Dispute grew with flurry of letters in January, February (Adds ELX comments, context, CME shares, byline)

By Jonathan Spicer

NEW YORK, April 13 (Reuters) - The ball is in the Commodity Futures Trading Commission's court on the question of how it will deal with rival ELX Futures LP's trade rule, a CME Group Inc (CME.O) official said on Tuesday.

Upstart futures exchange ELX is pushing for the CFTC, the market regulator, to allow its so-called exchange of futures for futures (EFF) rule, which would let traders easily move their U.S. Treasury contract positions from one marketplace to another -- and could pose a threat to futures giant CME.

While Wall-Street-backed ELX has said that its bigger rival is misleading regulators about EFF to stifle competition, CME has said that EFF violates its rules.

"It's between CFTC and CME, and we've done what they've asked us to do so I think the ball is in CFTC's court," Derek Sammann, managing director of CME Group's financial products and services division, told Reuters on the sidelines of an industry conference here.

"We've cycled through this with the CFTC. We are not engaged in a dialogue with ELX on this. The CFTC is our regulator and they've asked us for clarity," Sammann said.

The adoption of EFF could help ELX attract Treasury futures trading from CME, which has a near monopoly in the market. Meanwhile, U.S. lawmakers are pushing to have more over-the-counter derivatives run through exchanges and clearinghouses, lending urgency to the question of EFFs.

The dispute grew with a flurry of public letters to the CFTC earlier this year, but the regulator has been quiet since January. ELX, which in general has grabbed less than 5 percent market share in its products since its July launch, had hoped the regulator would clarify the dispute by this month.

Neal Wolkoff, chief executive of ELX, said the delay is frustrating, but he is optimistic that EFFs will be allowed.

EFF "has met this kind of fierce resistance, as if we're looking to have divestiture and government involvement, which of course we're not. We're simply looking for the ability to have privately negotiated position transfers." Wolkoff told the conference, hosted by the Futures Industry Association.

CME shares were off 0.57 percent at $308.72 on the Nasdaq. (Reporting by Jonathan Spicer. Editing by Robert MacMillan)