Forms and Instructions: Pass-Through Instructions


Pass-Through Instructions

These instructions apply when a Pass-Through Letter of Credit ("LC") on UCG Uniform Form Letter of Credit is being issued to Chicago Mercantile Exchange Inc. ("CME") and to a CME clearing member firm as Joint Beneficiaries. Note that the Pass-Through LC is somewhat different than the Standard UCG Form LC in that it provides for Joint Beneficiaries, one of which is the CME. Unlike the Standard UCG Form LC, the Pass-Through LC does not contain provisions for transfer of the right to draw. Otherwise, the terms of the two forms are substantially identical. Except to supply the information required on the Cover Page of the form, the text of the form LC shall not be altered in any way by the Issuing Bank without express notice to and consent of the Joint Beneficiaries. These instructions do not form a part of an LC issued on the form.

  1. Eligible Banks: CME Group rules specify requirements that Issuing Banks must meet. LCs will be accepted only from those banks that are on the approved list of CME Group and shall be on bank letterhead. There may also be limits on the aggregate amount of LCs that will be accepted from any one bank. CME may limit each Issuing Bank in the amount of LCs that may be issued to any one applicant.
  2. Cover Page: Information for the following items should be supplied as follows:
Applicant This is the name of the "account party" having the reimbursement obligation to the issuing bank.
Account Enter one of the following as directed by the Clearing Member: "Proprietary" or "Customer Segregated."
Governing Law Illinois law must be selected as the governing law.
Beneficiary The Beneficiary of the LC shall be:

CME Group
20 South Wacker Drive
Chicago, Illinois 60606
Attention: CME Clearing

- And -

[Name and address of clearing member firm]
Amount The Amount must be stated in both text and numeric form. The Amount may be denominated in USD or in other currencies that CME may approve from time to time. If the Amount is to be in a currency other than USD, the name of the currency must be clearly specified here in addition to the Amount. Unless another currency is specified, the Amount will be assumed to be in USD.
Expiry Date The Expiry Date shall meet the following criteria: (i) it must be the last business day of a calendar quarter, and (ii) newly issued LCs must be valid for 90 days, not to exceed two years.
Primary Office All Issuing Banks must specify a Primary Office in the United States.
Alternative Offices It is preferred, but not required, that the Issuing Bank specify at least one Alternative Office.
Non-U.S. Office If the LC is denominated in a currency other than USD, the Issuing Bank must specify a non-U.S. Office.
Approved Means It is preferred that Amendments will be made by S.W.I.F.T. MT707 or MT799 message or by hand delivery of a manually signed copy and, if necessary, by tested telex.
Cutoff Time A Cutoff Time of 3:00 p.m. Central Standard Time is acceptable
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