Client Management Advisory Notice
From | Client Management
Subject | Urgent: Block Trading Update
Effective Date | 11/22/00
Notice Number | CM#0047
Beginning with the evening GLOBEX�2 trading session on Tuesday, November 28, 2000 (for trade date November 29), the CME will introduce block trading for Eurodollar futures and selected equity index futures only. Please refer to Special Executive Report S-3649 for general information regarding block trade eligibility and policies. Specific information to clarify trade entry and bookkeeping impacts is summarized below. Entry of Block Trade Futures The clearing firm representing the sell-side of the block trade is required to initiate entry of the trade on the C21 EFP Market Maker Trade Entry screen. The seller will distinguish the entry of Block Trades from regular EFP transactions by entering a new Order Type of "B". (The trade type will default to "9" on the entry screen only.) Conversely, the clearing firm representing the buy-side of the block trade should ensure the order "B" is displayed on the C21 EFP Trade Acceptance screen when accepting/claiming a block trade. This new order type "B" will also be included on the TREX confirmation record that is transmitted via MQM to all firms that receive such a confirmation. At this time, Block futures trades should not be entered via firms trade entry systems. Note: Should firms execute any block futures trades on Tuesday, November 28 th ( for business of the 29th ) , please DO NOT enter these trades into the EFP system until Wednesday, November 29, 2000. After this first day, you may enter block futures trades into the EFP system at any time. Bookkeeping Changes Service Bureaus/Software Vendors and member firm systems managers will need to recognize and accept this new block trade Order Type "B" as it relates to your respective bookkeeping systems. Note: The TREX MQM confirmation record from the EFP system will include the Order Type "B" BUT IT WILL NOT INCLUDE THE TRADE TYPE 9. Instead, the trade type will default to a "1" in the trade type field of the TREX MQM record. This change is necessary to accommodate our firms whose systems would otherwise display these transactions as EFP trades in bookkeeping. Firms should note, however, that additional action might be necessary to ensure that the $1.75 block trade surcharge is passed along to the customer. This may require a manual entry in your bookkeeping system until your systems area can implement a more automated solution. The CME will charge the firm this additional fee through the EFS Clearing Fee System. If you have any questions regarding the submission of block futures trades, please contact Lisa Amato at (312) 338-2654 or Karen F. McCoy (312) 930-4524. Thank you.