Circuit breakers spoil the party for commodity funds and algorithmic traders

ICE may accept advice of the World Sugar Committee and introduce circuit breakers when sugar futures, experience price spikes or high volatility.  Trading would be interrupted or halted when limits are breached.  This may decrease the volume of sugar futures trading if funds, computer and algorithmic traders and those trading volatility reduce exposure to the market.  However, the move is intended to reduce commodity price volatility and agflation.

Rule 3.36. World Sugar Committee

(a) The World Sugar Committee shall be an Exchange Committee and shall consist of at least seven (7) and not more than twenty-one (21) individuals who are actively engaged, or employed by a firm that is actively engaged, in trading world sugar. The Board shall endeavour to appoint representatives from diverse interests within the world sugar community, such as industry representatives, FCMs, asset managers and traders.

(b) The Committee shall have and may exercise only the power or authority of recommending to the Board any modifications to the contractual terms and conditions and advising the Board with respect to World Sugar Futures and Options Contracts.

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