Based on the recent completion of the migration of COMEX and NYMEX products to the CME Clearing System, this Advisory Notice is being issued to remind members of their responsibilities under Rule 528 (“Price Reporting”). The text of Rule 528 appears below and requires members to notify price reporting staff of the prices at which trades have been consummated and to ensure that the prices are properly posted. It is imperative that members call out all trades, as required, to ensure that Exchange price reporting staff is able to hear the prices and enter them into the Price Reporting System.
While this requirement applies to all pit-traded futures and options contracts, it is particularly critical with respect to options trades due to the large number of available option strikes listed for trading at any given time. Failure to ensure that prices are properly reported to and posted by Exchange price reporting staff may, in certain circumstances, result in a price-edit by the CME Clearing System.
Failure to comply with the requirements of Rule 528 may result in charges being issued pursuant to Rule 514.A.5. (“failure of a buyer and seller to properly notify the pit reporter of transaction prices in accordance with Rule 528 and/or failure to ascertain that such prices are properly recorded”). If found guilty by a Panel of the Floor Conduct Committee, a violation of Rule 514.A.5. may result in a fine of up to $10,000 per offense.
528. PRICE REPORTING
Parties to a pit transaction shall properly notify the designated Exchange official of the price at which trades have been consummated. Both parties to a pit trade are required to ensure that such price is properly posted.
Whenever a member makes a trade with another member and such trade constitutes a price infraction, he shall 1) immediately break the trade; or 2) satisfy all bids or offers which were adversely affected; or 3) adjust the price of the trade to the price which existed when the price infraction occurred, provided that both parties agree to adjust the price and the terms of any affected orders are satisfied.
Questions regarding this advisory may be directed to the following individuals:
Robert Stasi, Associate Director, Trading Floor Operations, 212.299.2067
Joe Vanderberg, Manager, Trading Floor Operations, 212.299.2058
Marcia Beckford, Manager, Trading Floor Operations, 212.299.2072
Michael Cerar, Supervisor, Market Regulation, 212.299.2895
For media inquiries concerning this Advisory Notice, please contact CME Group Corporate Communications at 312.930.3434 or firstname.lastname@example.org.
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