WASHINGTON -- This week's launch of the Globex electronic trading system will give regulators their first crack at the daunting job of policing futures markets that stretch around the clock and globe.

Regulators will be treading on new territory as they enforce laws and oversee trading on a system that will link time zones and traders worldwide via electronic screens.

How best to oversee this new form of trading - as opposed to the open-outcry system used for well over a 100 years - is a matter expected to be addressed over time.

Pioneer Voyage

"It's the first real challenging foray into this |black box' type of trading," said Fowler West, one of the five commissioners at the Commodity Futures Trading Commission, the chief regulator of the United States' futures markets. "And we as regulators are going to have to keep pace with the developments."

More and more trades are expected to be done via systems like Globex that will bring dealers into the high-tech age of 24-hour-a-day screen-based trading.

Regulators will have no choice but to adjust to an electronic market. Experts say such a system offers a better "audit trail" of traders than an open-outcry market where dealers yell trades at each other.

Coordination Problems

Regulators in the United States also will have to coordinate with overseas counter-parties.

They may be forced to resolve questions over what products may be traded on such systems.

And they will have to wade through international laws and regulations covering trades done in different countries.

"Globex raises some new regulatory issues regarding which jurisdiction's laws apply," said a Commodity Futures Trading Commission staff member. "The way in which we will regulate Globex will evolve as the system evolves," he said, adding, "We're certainly ready to deal with Globex." The system - set to begin operation on Thursday - will link traders in Chicago, New York, London, and Paris who will trade foreign currency and bond futures after the close of trading on Chicago's two big futures exchanges. A bond contract from the Marche a Terme International de France, based in Paris, is scheduled to be listed early next year. Four New York exchanges and exchanges in Sydney and Singapore are in talks over having the products listed.

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