Client Management Advisory Notice
From | Client Management
Subject | Data Entry for Brokerage Reassignment (BK Broker)
Effective Date | 01/19/01
Notice Number | CM#0105
In our regular review of trade submission, our regulatory staff found many firms are not properly entering brokerage reassignment "BK Broker" trades. This memo reiterates procedures for submitting such trades. TRADE ENTRY PROCEDURES BK broker trades allow an IOM member, trading outside his/her division (and an IMM member trading agricultural futures), to be recorded as the filling broker on the futures leg of the options/futures combination trades. The BK Broker Field (position 9-13) on Special Block A1 of the TREX record, is used to designate the IMM or CME broker who is to be credited with the associated volume for brokerage purposes. Data entry staff should enter the BK and three-character broker�s symbol in the appropriate section of their data entry screen. On TES, the entry would be made in the Foreign Exchange and Foreign Firm fields. CARD/ORDER DOCUMENTATION IOM/IMM members who execute options/futures combination trades, outside of their division, MUST record Trade Type "6" on their trading cards. In addition, they MUST record the designation of "BK" on the card, accompanied by the signature of the IMM or CME member, and record that IMM/CME member�s 3 character symbol who will be credited with the futures volume for brokerage purposes. (E.g. BK ARM). BK BROKER GIVE-UPS Enter the BK Broker trade into clearing with the "G" indicator, if your trade entry system allows, along with "BK" and the BK Broker�s acronym, then allocate the trade to the carrying firm(s) via GUS. If your entry system does not provide a field for the "G" indicator, then enter "BK" and the Broker�s acronym. After the trade had been submitted for clearing, use the TES system to enter the "G" on the trade record using the Change command on the Inquiry by Record ID, Inquiry by Card Order, or the We Show/Thy Show Inquiry/Correction screens. Then allocate the trade to the carrying firm(s) via GUS. If you forget to enter the "G" on the give-up BK Broker trade record, you must do a MEMOADD in GUS. Enter the BK Broker who is to receive the brokerage credit in the filling broker field on the GUS screen. Ad the executing firm you will have to make a manual adjustment in the ATOM system to debit the BK Broker. By doing the MEMADD and the subsequent allocation in GUS, the brokerage will automatically be debited for the carrying firm in ATOM. Some firms elect to do back office transfers of these trades, but it should be noted that if a back office transfer is done, the carrying firm will not be properly debited for brokerage and the carrying firm would have to make an adjustment on ATOM. As result, one of the above options must be utilized instead. If you have any questions, please call Farris Oweimrin at 312-648-4780 or email foweimri@cme.com.