Modification to Global Command Center Authority
APPLICABLE CME RULE:
402.C. BUSINESS CONDUCT COMMITTEE — Emergency Actions (in part)
The BCC is authorized to determine whether an emergency exists and whether emergency action is warranted. The following events and/or conditions may constitute emergencies:
3. Any action taken by the United States or any foreign government or any state or local government body, any other contract market, board of trade, or any other exchange or trade association (foreign or domestic), which may have a direct impact on trading on the Exchange;
6. Any other circumstance which may have a severe, adverse effect upon the functioning of the Exchange, except that declarations of Force Majeure and actions taken with respect to such declarations will be governed by the provisions of Rule 701.
In the event that the BCC determines, in the good faith exercise of its sole discretion, that an emergency exists, it may take any of the following emergency actions or any other action that may be appropriate to respond to the emergency:
12. Order any other action or undertaking to address or relieve the emergency.
On January 20, 2015, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) took emergency action to provide additional authority to the Global Command Center (“GCC”) to act outside the parameters of CME Rule 589 (“Special Price Fluctuation Limits”) in circumstances where the GCC determines, in its absolute and sole discretion, that such action is necessary to protect market integrity. On January 15, 2015, the ability of Swiss franc futures to trade at levels commensurate with trading in the Swiss franc spot market was impeded by the provisions of CME Rule 589, resulting in the GCC removing special price fluctuation limits after the Swiss franc futures market locked limit bid for the third time. In the good faith exercise of its sole discretion, the Panel determined that strict adherence to the parameters of Rule 589 may have a severe, adverse effect upon the functioning of the Exchange within the meaning of Rule 402.C. and the integrity of trading in CME products subject to the provisions of Rule 589. Thus, the Panel determined that an emergency exists and that emergency action is warranted.
Pursuant to Rule 402.C.12., effective January 20, 2015, the GCC has been granted the authority with respect to CME products subject to Rule 589 to 1) modify the amount of a price limit expansion, 2) remove price limits at any time, 3) determine whether a specified trading halt will be observed, and 4) determine the products considered a Primary Futures Contract for purposes of expanding price limits.
January 20, 2015
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