Chicago Mercantile Exchange (CME) Group logo. Reuters Yonhap News

Trading on the Chicago Mercantile Exchange (CME), the world's largest derivatives trading platform, was halted for over 10 hours on the 28th due to system issues.

According to a CME announcement, trading of futures, options, and commodities was suspended starting around 11:40 AM Korean time on the 28th. Trading then gradually resumed normally around 10 PM Korean time.

The CME reported that trading in the Globex futures and options market, which accounts for approximately 90% of trading volume, resumed normally at 10:30 PM Korean time.

The CME is the world's largest derivatives exchange, trading futures and options on various asset classes including stocks, bonds, currencies, and commodities.

Given the large trading volume, it has a significant impact on the spot market and also serves to provide benchmark price information to global investors.

The system outage occurred during the night hours in US time, as the New York Stock Exchange was closed on November 27th for Thanksgiving.

When CME trading is halted, South Korean-listed Exchange Traded Funds (ETFs) that use overseas stock indices, crude oil, or bonds as underlying assets can experience price distortions as they trade without benchmark information.

When futures trading is suspended, financial companies lose their hedging tools and cannot adequately perform their market-making functions.

ETFs widely traded by domestic retail investors, such as those tracking the S&P 500 and Nasdaq 100 indices, also rely on stock index information calculated by CME during Korean market hours for their trading.

The CME stated that the incident was caused by an issue with the data center's cooling system.

Bloomberg News reported that the cooling system at a data center in the Chicago area caused the incident, citing the data center operator CyrusOne.

The CME experienced disruptions in trading of agricultural derivatives due to technical issues in 2014. In February 2019, trading was also suspended for three hours due to system problems.

Thomas Texier, Group Head of Clearing at financial services firm Marex, commented on the incident, stating, "This event highlights how concentrated the futures trading market is. There are not many alternative exchanges for major derivatives."

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