Clearing House Advisory Notices
To | Clearing Member Firms, Chief Financial Officers, Back Office Managers
From | CME Clearing
Subject | 4th Quarter 2008 Eligible Stocks
Notice Date | 2008-10-31
Notice Number | 08-306
Effective Date | 2008-10-31
CME accepts shares of certain equity stocks for customer and house segregated performance bond collateral. CME implemented its Stock Program to enable clearing members to post shares of selected stock with the Clearing House to satisfy reserve and concentration performance bond requirements. CME’s performance bond requirements consist of three tiered amounts. The core performance bond requirement represents that portion of the total performance bond requirement, which must be satisfied using the most liquid forms of collateral. Core collateral includes all types of collateral currently accepted; recognizing the current restriction on the use of Letters of Credit and U.S. Government Agency securities whereby a clearing member may meet the first five million dollars of its core requirement and 50% of the remainder of the core requirement using Letters of Credit and U.S. Government Agencies. Reserve and concentration performance bond requirements are set from time to time and are equal to that portion of the total performance bond requirement, which may be met using reserve and concentration collateral. Reserve and concentration collateral includes all core collateral plus shares of stock eligible for the Stock Program. There is no limitation on the amount of Letters of Credit or U.S. Government Agencies used to satisfy the reserve and concentration performance bond requirements. For the full-text of this advisory, please click here.