• CME Clearing Material Rule Change Policy

      • To
      • Chief Financial Officers, Chief Compliance Officers
      • From
      • Audit Department, Clearing House Division
      • #
      • AIB 10-06
      • Notice Date
      • 13 July 2010
      • Effective Date
      • 13 July 2010
    • In the normal course of managing its business, CME Clearing is routinely called upon to recommend rule or policy changes to support both on-going business needs and new business initiatives.  Currently, CME Clearing presents proposed rule or policy changes to the Clearing House Risk Committee for discussion and approval.  Those rules approved by the Clearing House Risk Committee are ultimately subject to Board approval before being submitted to the CFTC for self-certification.   CME Clearing believes it is in the best interests of our membership community to notify clearing firms of proposed material rule and policy changes before they are submitted to the CFTC for self-certification.  The intent of this policy is to allow clearing firms the chance to assess the impact of proposed rules changes and the opportunity to comment on those changes in order to better align our mutual interests.  In its best judgment, CME Clearing, with guidance from the Clearing House Risk Committee, will determine what constitutes a material change to the rules or policies.  This new notification approach will not apply to those situations where CME Clearing or the Clearing House Risk Committee must take action under the rules in an emergency situation.  

        

      ·         CME Clearing, with guidance from the Clearing House Risk Committee, will decide what constitutes a significant rule change or policy change.  Examples may include membership requirements, financial requirements, safeguards (guaranty fund) and margin methodology.

      ·         CME Clearing will present the changes to the Clearing House Risk Committee for discussion and approval.

      ·         CME Clearing will publish the new rules or policies via Clearing Advisories and Audit Information Bulletins to notify interested parties.  In general, comments on the changes will be required to be received within two weeks of the publication date.  The publications will note comment deadlines and the responsible person to whom comments should be sent. 

      ·         CME Clearing will review comments received and use its judgment to determine whether to incorporate additional amendments.  If additional amendments are deemed necessary, CME Clearing will present the revised rule or policy to the Clearing House Risk Committee for discussion.

      ·         Once the final rule or policy change has been approved by the Clearing House Risk Committee, the rule or policy change will be self-certified with the CFTC.  The membership will again be notified of the new final rule or policy via Clearing Advisories and Audit Information Bulletins.

       

      This information is being provided to our clearing member firms and their appropriate staff (ie., financial, compliance, legal, risk management and operations.)  To be included on the distribution list, please contact Bonnie Kucera in the Clearing House at 312-634-1570 or bonnie.kucera@cmegroup.com and Edward Wiesneth in the Audit Department at 312-930-3239 or Edward.wiesneth@cmegroup.com.  For questions, please contact Tim Doar, Managing Director, Risk Management, Clearing at 312-930-3162 or tim.doar@cmegroup.com or Anne Bagan, Managing Director, Audit Department at 312-930-3140 or anne.bagan@cmegroup.com.