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.
Contents
CME Group Business Lines
Business Line | Venues | Asset Class | Participant / Clearing Model | Regulators |
---|---|---|---|---|
Futures and Options on CME Globex and CME ClearPort |
| Agriculture, Energy, Equity Index, FX Interest Rates, Metals and Options. | Clearing Members |
|
EBS Markets on CME Globex and EBS Direct |
| FX, Metals and Cryptocurrency | Bilateral and Prime Trading |
|
BrokerTec Markets on CME Globex and BrokerTec Stream |
| Fixed Income | Bilateral and Prime Trading |
|
Risk Management Categories
Risk management functions are broadly grouped into the following general categories:
Category | Management Level |
---|---|
Risk Limit Management | Note: Risk limits allow a risk admin to limit the risk taken during a trading session or CME Business Day.
|
Order Management |
|
Permission Management |
|
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.
Model | Participants |
---|---|
Cleared Risk Management |
|
Bilateral and Cleared elsewhere |
|
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
Venue | Category | Function | Service Description | Admin Type | Admin Level |
---|---|---|---|---|---|
CME Globex |
|
| CME Kill Switch tool enables risk administrators to immediately block all new order entry and cancel all working orders. |
|
|
CME Globex |
|
| The Risk Management Interface (RMI) allows authorized Clearing Firm risk administrators to manage market exposure of their respective execution firms, at the account level |
|
|
CME Globex |
|
| 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 |
|
CME Globex |
|
| 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 |
|
CME Globex |
|
| 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. |
|
|
CME Globex |
|
| 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. |
|
|
CME Globex |
|
| An API based service designed to facilitate real-time monitoring of order and trading activity (messages) on the CME Globex platform. |
|
|
CME Globex |
|
| Access Manager - User Interface Authorized users can permit accounts to submit orders for restricted products during the restricted period before contract expiration.
|
|
|
CME Globex |
|
| 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. |
|
|
CME Globex |
|
| Set daily position limits per product, at the account level. In the Account Management Service. |
|
|
|
|
| Set daily position limits per product, at the account level. In the Account Management Service. |
|
|
|
|
| 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 |
|
|
|
|
| Risk Monitor service to access a monitoring dashboard, to view and access audit details, and monitor limit usage. |
|
|
EBS on CME Globex and EBS Direct
Venue | Category | Function | Service Description | Admin Type | Admin Level |
---|---|---|---|---|---|
|
|
| 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 on CME Globex |
|
| 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. |
|
|
EBS on CME Globex |
|
| An API based service designed to facilitate real-time monitoring of trading activity on the CME Globex platform. |
|
|
EBS on CME Globex |
|
| 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 |
|
EBS on CME Globex |
|
| 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 |
|
BrokerTec Markets on CME Globex
Venue | Category | Function | Service Description | Admin Type | Admin Level |
---|---|---|---|---|---|
|
|
| BrokerTec Risk Management - User Interface BrokerTec Risk Management is used by Firm administrators and viewers to access and manage BrokerTec risk and product settings. |
|
|
BrokerTec Markets on CME Globex |
|
| 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. |
|
|
BrokerTec Markets on CME Globex |
|
| 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 |
|
BrokerTec Markets on CME Globex |
|
| 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:
| N/A |
|
BrokerTec Markets on CME Globex |
|
| 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 |
|
BrokerTec Markets on CME Globex |
|
| An API based service designed to facilitate real-time monitoring of trading activity on the CME Globex platform. |
|
|
Contact Information
For Risk Management Services inquiries, please contact Global Account Management.