* CFTC calls NYSE Liffe's oversight "adequate"
* CFTC recommends tougher enforcement on automated trades
By Alexandra Alper
April 25 NYSE Euronext's futures unit
Liffe has an "adequate" trade surveillance program but needs to
improve its enforcement, the U.S. Commodity Futures Trading
Commission said on Wednesday.
NYSE Liffe should speed up its response time on
investigations and force automated traders who may have violated
trading rules to suspend trading until the issue is resolved,
the CFTC said in a rule enforcement review.
"NYSE Liffe should reduce the amount of time it takes to
review and take action with respect to completed investigations
referred by NFA," the agency said in a release, referring to the
National Futures Association, the U.S. self-regulatory
organization which oversees the exchange.
The CFTC review covered the period from Nov. 1, 2009,
through Nov. 1, 2010.
NYSE Euronext was forced to drop its $7.4 billion merger
with Deutsche Boerse in February, after European
antitrust authorities blocked the deal over concerns the
combination of Liffe and Deutsche Boerse's Eurex would have a
quasi-monopoly in European futures trading.
The same month, NYSE Liffe stepped up its drive to tighten
regulation of its cocoa, robusta coffee, and other contracts,
with a proposal for increased reporting requirements for large
positions and position limits on delivery months.
European commodity markets are under pressure to tighten
regulation as the United States pushes forward with plans to
curb speculative activity, blamed by some for boosting food and
energy prices to record highs in 2008.
NYSE Liffe has received particular attention since July
2010, when Armajaro Asset Management's hedge fund, CC+, took the
largest delivery in 14 years on Liffe's cocoa market.
Prior to delivery, some European cocoa industry participants
sent a letter to the exchange complaining about the extent of
speculation in the London cocoa market and a lack of