The Commodities Futures Trading Commission is expected to grant a delay on a rule set to take effect Friday that would impact clearing of energy swaps at the CME Group, according to sources familiar with the matter.
Those deals will also start counting toward a new $8 billion threshold that the CFTC has set to determine whether the firm should be subject to greater oversight at the end of the year. This new regulatory framework for swaps was mandated by the 2010 Dodd-Frank Act .
Based on the expected deadline, ICE spokeswoman Brookly McLaughlin said that the IntercontinentalExchange is moving ahead with plans to shift energy swaps to futures at the end of this week. CME Group spokesman Damon Leavell had no comment. A swap is basically an agreement to exchange one contract today for another contract at a future date.
The CME Group and IntercontinentalExchange have both been trying to shift swaps activity to the futures market in order to avoid customer business leaving the exchanges. Customers want the ability to trade in the futures market and therefore, avoid reporting the trades as swaps which would require greater regulatory oversight.
Some floor traders and brokers at the CME Group's New York Mercantile Exchange, where energy futures and options are traded, have voiced concern in recent days that these moves toward electronic trading systems will mean a move away from traditional open outcry business and also mean less price transparency.
Those proposed changes that were set to go into effect Friday, include establishing lower block trade thresholds that would allow customers to transact futures trades in privately negotiated transactions and not through the open outcry process. The proposal for a new threshold for block trades cleared through the CME Group, as part of the shift from energy swaps to futures, has now been postponed until January, according to a source familiar with the matter.
The CFTC said the proposal regarding new block trade thresholds at the NYMEX is still under review.
—By CNBC's Sharon Epperson