FINANCIAL AND REGULATORY BULLETIN
TO: Chief Executive Officers #13-05
Chief Financial Officers
Chief Compliance Officers
DATE: December 27, 2013
SUBJECT: Exchange Rule 971.C. – Depository Account Access
On December 3, 2012 Exchange Rule 971.C. was adopted, requiring FCM clearing members to provide the Financial and Regulatory Surveillance Department (“FRS”) with access to customer account information at a bank or trust company. CME is amending this requirement to include all permissible customer depositories under CFTC Regulations.
In conjunction with the NFA and issuance of NFA Notice to Members I-13-15, FRS contacted FCM clearing members to facilitate the receipt of end of day balances from FCM customer accounts held with other clearing FCMs and foreign brokers. Additionally, FRS anticipates the reporting of FCM customer balances held at derivative clearing organizations to be completed in 2014. The amendments to Exchange Rule 971.C. provide an accurate reflection of the continued enhancements in the regulation of customer funds at the clearing firm level.
In the attached formal rule change, additions are underlined and deletions are struck. The amended Rule will be effective pending regulatory approval, anticipated December 31, 2013.
Please contact the Financial and Regulatory Surveillance Department at (312) 930-3230 if you have any questions.
Revisions to CME/CBOT/NYMEX Rule 971
Chapter 9. CLEARING MEMBERS
Rule 971. SEGREGATION, SECURED AND CLEARED SWAPS CUSTOMER REQUIREMENTS
C. In addition to complying with all applicable CFTC regulations, in order for each of an FCM clearing member’s customer segregated, secured 30.7 and Cleared Swaps Customer accounts held at a
bank or trust company to be included as segregated and secured 30.7 and Cleared Swaps Customer funds in their respective origin and calculation:
1. The FCM clearing member must provide the
Audit Department with view-only full access via the internet to the account information, in a form and manner prescribed by the Audit Department; and
bank or trust company must allow the FCM clearing member to provide the Audit Department with view-only full access via the internet to the account information, in a form and manner prescribed by the Audit Department.