This topic is a high-level introduction to the types of pre-trade risk management services and functions available to CME Group clearing and trading participants. The functions described below are available through numerous risk management systems that are tailored for specific business lines.

All risk management services are offered by CME Group on a best-efforts basis. Clearing Member Firm (CMF) Risk Administrators only have access to the Execution Firms and Exchanges that they guarantee. Any attempt to take action on an Executing Firm and Exchange assigned to a different CMF will be rejected.

Contents

CME Group Business Lines

Business Line

Venues

Asset Class

Participant / Clearing Model

Regulators

Futures and Options on CME Globex and CME ClearPort

  • CME Globex
  • CME ClearPort 
  • Auction

Agriculture, Energy, Equity Index, FX Interest Rates, Metals and Options.

Clearing Members

  • CFTC

EBS Markets on CME Globex and EBS Direct

  • CME Globex
  • EBS Direct

FX, Metals and Cryptocurrency 

Bilateral and Prime Trading

  • CFTC
  • UK FCA 

BrokerTec Markets on CME Globex and BrokerTec Stream

  • CME Globex
  • BrokerTec Stream

Fixed Income 

Bilateral and Prime Trading

  • SEC 
  • EU/UK 
  • SMA/FCA 

Risk Management Categories

Risk management functions are broadly grouped into the following general categories:

CategoryManagement Level

Risk Limit Management


Note: Risk limits allow a risk admin to limit the risk taken during a trading session or CME Business Day.
  • Monetary Limits – Monetary Limits set based on expected market price volatility and can be set in margin or notional quantity amounts.
  • Delta (for Options) and DV01 (for Fixed Income) factors are used to normalize risk utilizations between instruments.
  • Position Limits – Long and Short Position Limits can be used for products that are traded in per Contract (Lot) terms. 
  • Limit Alerts – Alerts/Threshold Alerts notify an admin or participant that a set percentage of a limit is breached.

Order Management

  • Block New Orders - Block new orders at different management levels.  
  • Cancel Open Orders - Cancel open orders at different management levels. 
  • Cancel on Disconnect (COD) – COD is functionality that cancels all resting orders upon an ungraceful disconnect.
  • Cancel on Conclusion (COC)  - CME Globex functionality that auto-eliminates all working orders when a session Terminates and disconnects gracefully.
  • Maximum Order Size Limit - Maximum Quantity Limits/Clip-size Limits manage allowable order size.
  • Self-Match Prevention (SMP) - An optional functionality that allows market participants to prevent the matching of orders with common ownership.
  • Order Status and Management - Real-time access to information on working and filled orders.
  • Order and Trade Copies - A dedicated API service designed to facilitate real-time monitoring of trading activity.

Permission Management

  • Product Permissions – Allow and Deny List methodologies are applied.
  • Trade Type Permissions – Trade type permissions can be set to align with regulation or more restrictive for a specific client.

Dashboards and Reports

Realtime dashboards and end of day reports provide a risk management view of the credit utilization vs. limits.


Audit Trail

Risk management functions are supported by an audit trail documenting all changes in settings and their real-time effects.

Participant Models

CME Group supports cleared and non-CME Group cleared (bilateral or cleared elsewhere) trading models. The participant model dictates the Risk Manager types (admins) and management structure, such as credit entity levels.

ModelParticipants
Cleared Risk Management
  • Manager Type - CME Group, Clearing Members and Execution Firms/Trading Firms use risk management functions.
  • Management Levels (Credit Entities) – Risk Limits and order management functions can be set on and applied to Globex Trading Firm (GFIDs), Clearing Accounts, Trading Sub-Accounts and Traders.
Bilateral and Cleared elsewhere
  • Manager Type – An admin can manage risk for themselves or for the clients that they may guarantee.
  • Management Levels - Limit can be managed on GFIDs, Groups of GFIDs and Globex User IDs (Trader ID).

Risk Management UIs and APIs

To facilitate risk management, CME Group provides various user interfaces (UIs) and application programming interfaces (APIs) for different business lines and venues.

User interfaces are available from the CME Group Customer Center, which requires a CME Group Login and entitlements based on required Risk level administration.

Risk APIs use various technologies such a FIXML and JSON web services, which require an API ID for access.

Futures & Options on CME Globex and CME ClearPort

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Venue CategoryFunctionService DescriptionAdmin TypeAdmin Level
CME Globex
  • Order Management
  • Block, Unblock and Cancel

CME Kill Switch tool enables risk administrators to immediately block all new order entry and cancel all working orders.

  • Legal Clearing Entity Admin
  • Execution firm Admin
  • CME Admin
  • SenderComp
  • Execution Firm
  • Legal Clearing Entity
CME Globex
  • Order Management
  • Block and Unblock
  • Cancel Orders (API Only)

The Risk Management Interface (RMI) allows authorized Clearing Firm risk administrators to manage market exposure of their respective execution firms, at the account level

  • Clearing Firm Risk Admin
  • Account 
CME Globex
  • Order Management
  • Cancel on Disconnect

Cancel On Disconnect (COD)

Cancel on Disconnect (COD) is CME Globex functionality that cancels all resting session/day futures and options orders for registered iLink session IDs upon an ungraceful disconnect.

N/A

  • Session
CME Globex
  • Order Management
  • Self-Match Prevention

Self-Match Prevention

Self-Match Prevention (SMP) is optional functionality that allows market participants to prevent the matching of orders for accounts with common ownership, within and across different Globex Firm IDs and within and across clearing firms.

N/A

  • GFID
  • Account
CME Globex
  • Order Management
  • Order Status and Controls

Real-time access to information on working and filled orders. A reliable alternative to view order status, view fill information, and cancel working orders originating from CME Direct, proprietary, and third-party trading systems.

  • Front Office Admin
  • FirmSoft Users
  • Firms
  • Accounts
  • Session
  • SenderID
CME Globex
  • Order Management
  • Mass Quote Protection

Mass Quote Protection - User Interface

Mass Quote Protections (MQP) is a user selected function that, in certain situations, can automatically cancel resting quotes and time-out for user specified Group Codes, Product Line and Aggregate Product Lines.

  • Clearing Member
  • Execution Firm, Trader ID, Sender Comp ID.
  • Asset Class, Product Line, Product Group.
CME Globex
  • Order Message Monitoring
  • Order and Trade Copies (real-time)

Drop Copy - API

An API based service designed to facilitate real-time monitoring of order and trading activity (messages) on the CME Globex platform.

  • Clearing Member
  • Execution Firm 
  • GFID
CME Globex
  • Permission Management 
  • Product Permission

Access Manager - User Interface

Authorized users can permit accounts to submit orders for restricted products during the restricted period before contract expiration.

 

  • Clearing Member
  • Account
CME Globex
  • Risk Limit Management
  • Exposure Limits
  • Maximum Order Size
  • Limits Reports
  • Alert Notifications

CME Globex Credit Controls (GC2) - User Interface

CME Globex Credit Controls (GC2) is a front-end application that provides pre-execution risk controls that enable Clearing Firm or partner exchange Clearing firm risk administrators to set credit limits. 

  • Clearing Member
  • Execution Firm 
  • Execution Firm (by Exchange Group)
CME Globex
  • Risk Limit Management
  • Position Limits

Set daily position limits per product, at the account level. In the Account Management Service.

  • Clearing Member
  • Execution Firm 
  • Account
  • CME ClearPort
  • CME Direct 
  • Risk Limit Management
  • Position Limits

Set daily position limits per product, at the account level. In the Account Management Service.

  • Clearing Member
  • Account
  • CME Globex
  • CME ClearPort
  • CME Direct

 

  • Risk Limit Management
  • Product Restriction
  • Max Order Quantity

Entity Risk Management - User Interface

CME Entity Risk Management Service is used to manage user, firm and product-level risk for trading CME Group products electronically on the Central Limit Order Book and pre-negotiated trades

  • Clearing Member
  • Account
  • CME Globex
  • CME ClearPort
  • Risk Monitoring
  • View daily account and clearing firm activity summary.
  • View activated threshold alerts.
  • Audit trail of all account / firm activity.
  • List of rejected trades
  • Account and clearing firm limit usage, as a chart or table.

Risk Monitor - User Interface

Risk Monitor service to access a monitoring dashboard, to view and access audit details, and monitor limit usage.

  • Clearing Member
  • Execution Firm 
  • Trading Firm
  • Account

EBS on CME Globex and EBS Direct

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Venue CategoryFunctionService DescriptionAdmin TypeAdmin Level
  • EBS on CME Globex
  • EBS Direct
  • Credit Risk Management
  • Credit Relationships
  • Credit Limits
  • Credit Monitoring
  • Kill/Unkill firm
  • Audit History
  • Reports

EBS Risk Management is available to Bilateral Risk Administrators and Prime Risk Administrators to manage credit relationships, configure risk limits and access other available credit functionality for all EBS instruments comprised of Spot, precious metals and non-deliverable forwards (NDF). It also supports monitoring credit usage, audit history, and to generate an end of day report. Read-only access is available for User Interface.

Note: API access is only available for setting Credit Limits and Kill/Unkill firms.
  • EBS Bilateral Risk Admin
  • EBS Prime Risk Admin
  • GFID

EBS on CME Globex

  • Order Management
  • Order Status and Controls

Real-time access to information on working and filled orders. A reliable alternative to view order status, view fill information, and cancel working orders originating from CME Direct, proprietary, and third-party trading systems.

  • Clearing Member
  • Order
EBS on CME Globex
  • Order Message Monitoring
  • Order and Trade Copies

Drop Copy - API

An API based service designed to facilitate real-time monitoring of trading activity on the CME Globex platform.

  • Execution Firm 
  • GFID
EBS on CME Globex
  • Order Management
  • Cancel on Disconnect

Cancel on Disconnect (COD) is CME Globex functionality that cancels all resting session/day EBS orders for registered iLink session IDs upon an ungraceful disconnect.

Cancel on Conclusion (COC) is CME Globex functionality that auto-eliminates all working orders when a session Terminates and disconnects gracefully.

N/A

  • Session
EBS on CME Globex
  • Order Management
  • Self-Match Prevention

Self-Match Prevention

Self-Match Prevention (SMP) is optional functionality that allows market participants to prevent the matching of orders for accounts with common ownership, within and across different Globex Firm IDs and within and across clearing firms.

N/A

  • GFID
  • GUS

BrokerTec Markets on CME Globex

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Venue CategoryFunctionService DescriptionAdmin TypeAdmin Level
  • BrokerTec Markets on CME Globex
  • BrokerTec Stream
  • Credit Limit Management
  • Order and Trade Management
  • Dashboards and Reports
  • Notional Limits
  • Max Order Size
  • Dashboard Utilization
  • Alerts

BrokerTec Risk Management - User Interface

BrokerTec Risk Management is used by Firm administrators and viewers to access and manage BrokerTec risk and product settings.

  • Execution Firm 
  • GFID
  • Groups
  • Trader
BrokerTec Markets on CME Globex
  • Order Management
  • Order Status and Controls

Firm Soft - User Interface

Real-time access to information on working and filled orders. A reliable alternative to view order status, view fill information, and cancel working orders originating from CME Direct, proprietary, and third-party trading systems.

  • Execution Firm 
  • Order
BrokerTec Markets on CME Globex
  • Order Management
  • Cancel on Disconnect

Cancel On Disconnect (COD)

Cancel on Disconnect (COD) is CME Globex functionality that cancels all resting session/day BrokerTec orders for registered iLink session IDs upon an ungraceful disconnect.

N/A
  • Session
BrokerTec Markets on CME Globex
  • Order Management
  • Duplicate Order Check

Duplicate Order Prevention

The Securities Exchange Act Rule 15c3­5 – Risk Management Controls for Brokers or Dealers with Market Access requires that financial risk management controls and supervisory procedures be reasonably designed to systematically limit the financial exposure of the broker­ dealer that could arise as a result of market access. The iLink 3 duplicate order check is designed to address this risk by:

    • Supporting valid trading activity, and
    • Preventing the entry of erroneous orders by rejecting orders that that indicate duplicative orders over a short period of time.
N/A
  • Session
BrokerTec Markets on CME Globex
  • Order Management
  • Self-Match Prevention

Self-Match Prevention

Self-Match Prevention (SMP) is optional functionality that allows market participants to prevent the matching of orders for accounts with common ownership, within and across different Globex Firm IDs and within and across clearing firms.

N/A

  • GFID
  • GUS
BrokerTec Markets on CME Globex
  • Order Message Monitoring
  • Order and Trade Copies

Drop Copy - API

An API based service designed to facilitate real-time monitoring of trading activity on the CME Globex platform.

  • Execution Firm 
  • GFID

Contact Information

For Risk Management Services inquiries, please contact Global Account Management.