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GDT public consultation on three rule change proposals

9 July 2017

Global Dairy Trade invites feedback on three proposed changes to the GDT Trading Event Rules.  These proposals are designed to enhance transparency and expand our scope to more markets. 

The GDT Events Oversight Board has reviewed the three proposals and will vote on them following completion of public consultation. 

The three rule change proposals are as follows:

Cessation notification requirements

The purpose of this rule change is to enhance transparency by introducing more explicit notification requirements.

The current rules require GDT to provide only 21 days’ notice of any decision to discontinue the GDT Events trading platform.  The rules do not require sellers to provide any notice of an intention to cease offering product on the platform.

We recognise that buyers, financial market participants and the wider dairy industry need confidence that they can rely on GDT to continue publishing winning prices, particularly where they are used in the settlement of dairy futures contracts.  The current rules do not meet this need.

Accordingly, we propose to amend the rules to:

  • require GDT to provide six months’ notice of any intention to discontinue the trading platform; and
  • require any seller whose winning prices are used to settle financial instruments to provide six months’ notice of any intention to cease offering their products on the platform. 

Note that this proposal does not indicate any intention by GDT or any seller to discontinue the platform or cease offering products.

A more detailed explanation of this proposal is available here.

Publication of winning prices

This rule change will enhance transparency by expanding the conditions under which winning prices are published. 

The current rules restrict GDT to publish a winning price only if it exceeds its starting price.  While this rule has resulted in only 2.7% of winning prices not being published over the past two years, some trading events experience a significantly higher number of unpublished prices.  The trading event held on 7 March 2017 is an example of this,

A recent review has identified an opportunity to reduce the incidence of unpublished prices by refining the criteria for whether a winning price may be published. 

Instead of requiring that the winning price must exceed the starting price, the amended rule will require only that bidding demand was sufficient at some point during the trading event to cause the price for the product to increase above its starting price.  This will apply even if the subsequent demand response results in the price rolling back to the starting price. 

Under this proposed rule change, the only circumstance where a winning price will not be published is if bidding demand was such that a product’s price remained equal to the starting price throughout the entire trading event.

A more detailed explanation of this proposal is available here.

Multi-seller pools

The final rule change proposal aims to extend the benefits of credible public price discovery to a wider range of markets and products.

The proposal will establish the rules required to set up one or more multi-seller pools that allow sellers to offer supply of standard product specifications into a common pool on GDT Events.   

GDT will publish the identity of participating sellers.  However, GDT will not publish information about:

  • whether a seller is participating in a particular trading event
  •  the offer quantities of each seller.

Information on offer quantities and starting prices will be provided to bidders at an aggregated pool level.

Buyers will place bids without knowing the specific seller, but with assurance that all products meet published quality certification standards and are produced from approved plants.  Successful buyers will be allocated to one of the sellers shortly after close of the trading event. 

GDT will publish the pool’s winning price for each product without identifying specific sellers.

This approach enables greater confidentiality of individual seller’s commercially sensitive information while retaining the core transparency features of GDT Events. 

The first pool is expected to be for US- sourced generic lactose products.  A number of US dairy processing companies have indicated willingness to offer supply into this pool.   

More detail on the US multi-seller pool is available here, and the proposed changes to GDT Trading Event Rules are available here.


In addition to the above rules, we will delete the rule providing for the transition from the Advisory Board to the Oversight Board (Rule B1.1).  The Oversight Board is now fully established, and so this rule is  no long relevant.



GDT invites feedback on these proposed rule changes.  Feedback must be submitted via email to help@globaldairytrade.info with the subject line: “Feedback on proposed rule changes July 17”. Submissions close on 28th July 2017. 

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