Audit Advisory Notices
To | Chief Operations Officers, Chief Compliance Officers, Firm EFS Contacts
From | Audit Department, Clearing House Division, Market Regulation Department, Legal and Regulatory Division
Subject | Clearing Fees: Exchange Fee System Account Title
Notice Date | 2005-04-18
Notice Number | Reg 05-01
Effective Date |
CME’s Exchange Fee System (“EFS”) requires the registration of account owners and controllers in order to receive the appropriate clearing fees. In addition, the account title field serves as an audit trail of the underlying account owner when the account owner itself does not hold any CME membership. In an effort to simplify the reporting requirements in EFS and enhance the efficiency and effectiveness of the clearing fee auditing process and market surveillance, we have developed these examples to identify when the account title field must be registered. Whenever the account owner identified in the clearing member’s equity system (i.e. account statement) does not exactly match that of the account owner registered in EFS, the account title field must be completed. The following chart provides examples in which the account title field is required to be registered.
| Account Owner(s) per equity system | Account Owner(s) to be registered in EFS | Account Title to be registered in EFS
1 | Proprietary trading account of a 100% owned subsidiary of a Class A clearing member | Class A clearing member | The legal name of the 100% owned subsidiary listed in the equity system
2 | Proprietary trading account of a 100% owned (directly or indirectly) subsidiary/affiliate of a Rule 106.I. member | Rule 106.I. member | The legal name of the 100% owned subsidiary / affiliate listed in the equity system
3 | A corporation, partnership, LLC, or other legal entity which does not hold a membership (and is not affiliated with a Class A clearing member or Rule 106.I. member) | Individual(s) holding membership which ultimately own 100% of the legal entity | The legal name of the entity listed in the equity system
4 | Proprietary trading account of a Class A clearing member | Class A clearing member | N/A
5 | Proprietary trading account of a Rule 106.I. member | Rule 106.I. member | N/A
6 | Proprietary trading account of an approved fund within the family of funds managed by a Rule 106.S. fund management company | Fund approved within the family of funds | N/A
7 | Proprietary trading account of a Rule 106.H. corporate member | Rule 106.H. member | N/A
8 | Proprietary trading account of a Rule 106.R. electronic corporate member | Rule 106.R. member | N/A
9 | Proprietary trading account of a Asian Incentive Participant | Asian Incentive Participant | N/A
10 | Proprietary trading account of a European Incentive Participant | European Incentive Participant | N/A
11 | Proprietary trading account of a eFX Bank Incentive Participant | eFX Bank Incentive Participant | N/A
12 | Individual member(s) | Individual member(s) | N/A
Penalties The policies set forth herein will be strictly enforced by the Exchange. A member or clearing member found to have engaged in fraudulent or dishonest conduct or to have acted in bad faith will be subject to a charge of a major rule violation. Major rule violations are punishable by a fine up to $1,000,000 plus the monetary value of any benefit received as a result of the violative activity. If you have any questions, please contact the Audit Department at (312) 930-3230 or the Market Regulation Department at (312) 930-8525 or e-mail us at clearing@cme.com.