Cleared OTC London Gold Forwards

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Spot and Forward Gold Transactions Cleared Through CME ClearPort

In response to market needs, CME Group will offer a clearing service for the OTC London gold forward market beginning September 20, 2009 for trade date September 21, 2009.

This service will support the central clearing, settlement and delivery of OTC London physical gold transactions, which will remain as OTC forwards with CME Clearing and not be converted to futures. Contracts are for 100 fine troy ounces.

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FAQs for Cleared OTC London Gold Forwards
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Service Summary

Key Features

•	This is a post-trade clearing service - execution remains in the OTC market
•	Contracts remain as forwards in clearing and are not converted to futures contracts. Every trade establishes a new open position. There is no liquidation. Upon reaching delivery, positions are netted down and CME Clearing remains in the delivery process. Delivery occurs at London Precious Metals Clearing (LPMCL) member banks using "London Good Delivery Gold."
•	Open trades are held on a gross basis at their original trade price.
•	Each business day, every open trade is marked from original trade price to the daily settlement price, with +/- differentials discounted to present value. The resulting net discounted mark-to-market amount is "collateralized." That is, it establishes a margin (performance bond) credit or liability.
•	Clearing coverage for all good forward maturities that are physically deliverable into unallocated "London Good Delivery" gold (as defined by the LBMA) extends 10 years out.

Benefits

• Risk mitigation	• Enhanced efficiency
• Independent daily valuations	• 100+ years of central clearing expertise

A Comprehensive Set of Flexible Clearing Services for the OTC Market
Launched in 2002 to provide centralized clearing services and mitigate risk in the energy marketplace, today CME ClearPort clears transactions across multiple asset classes and offers an array of clearing choices.

You can continue to negotiate your own prices privately and conduct business off-exchange – but gain the advantages of security, efficiency and confidence.

CME ClearPort today:

•	Clears more than 500,000 contracts daily
•	Brings together more than 10,000 registered users – commercial, banking, hedge funds, trading entities – IDBs, FCMs and clearing firms
•	Features more than 700 listed contracts available for clearing, with more to come

Three Ways to Enter Trades for Clearing Through CME ClearPort

•	Through a broker using the CME ClearPort Web-based User Interface (GUI)
•	Trader calls the CME ClearPort facilitation desk
•	Through a third-party matching/confirmation platform connected to the CME ClearPort API

To Register for Clearing Through CME ClearPort

•	Establish an account with a COMEX clearing member
•	Complete the Exchange User License Agreement (EULA) available at cmegroup.com/clearport
•	Once you have received your username and password, contact the clearing risk or staff person at your clearing member firm and request that your clearing account be added to RAV (Risk Account Value Manager. You will then be given permissions for any OTC broker who may be entering trades for clearing on your behalf.

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