GLOBEX Advisory Notices
To |
From | Chicago Mercantile Exchange
Subject | New CME(R) Globex(R) Customer Type Indicator (CTI) Codes
Notice Date | 2004-10-13
Notice Number | 101304-2
Effective Date |
Dear CME® Globex® Users, In accordance with the Core Principles of the Commodity Exchange Act, Exchange rules require a Customer Type Indicator (CTI) code on every transaction executed electronically or by open outcry. Recently, the Exchanges and the National Futures Association met and agreed on a harmonized set of CTI code definitions for the industry. This notice discusses how the new definitions will be applied to Chicago Mercantile Exchange (CME®) and Chicago Board of Trade (CBOT®) products. Clearing firms may need to make some system changes to apply the new definitions accurately. CBOT and CME are requesting that firms fully apply the new CTI definitions no later than December 1, 2004. Exchange representatives will be available to address any questions regarding the new definitions at the Clearing Advisory Group meeting at CME on October 27, 2004, at 9:30 a.m.
CTI 1: | Electronic Trading and Open Outcry - Applies to transactions initiated and executed by an individual member for his own account, for an account he controls, or for an account in which he has an ownership or financial interest. However, transactions initiated and executed by a member for the proprietary account of a member firm (as defined below) must be designated as CTI 2 transactions.
| New for CME: CTI 1 includes trades executed by members who exercise control over another account except for proprietary accounts of member firms. CTI 1 for electronic trading is reserved for members.
CTI 2: | Electronic Trading and Open Outcry - Applies to orders entered/trades executed for the proprietary accounts of a firm defined as follows:
| CME - clearing member firms, firms holding a membership pursuant to Rules 106.H., 106.I., 106.N., or 106.R. (also known as Electronic Corporate Members), and other similar member programs to be announced by CME.
| CBOT - category (1a), (1b), (2a), (2b), (2c) and (3) member firms as defined in Regulation 230.02, and their affiliates and designated passive investor entities as defined in Regulation 450.02(D), as well as category (4) e-cbot only member firms. CBOT members initiating and executing trades by open outcry for the proprietary account of a clearing or non-clearing member firm will continue to participate in the CTI 2/1 Conversion Program.
| New for CME and CBOT: CTI 2 was previously reserved exclusively for proprietary accounts of clearing member firms.
CTI 3: | Electronic Trading - Applies to orders entered by a member or a non-member terminal operator for the account of another individual member or an account controlled by such other individual member.
| Open Outcry - Applies to orders that a member executes on behalf of another individual member, or for an account such other member controls or in which such other member has an ownership or financial interest.
| New for CME and CBOT: Open outcry orders entered for a member's account through the normal customer order flow process will be coded as CTI 3 rather than CTI 4.
CTI 4: | Electronic Trading and Open Outcry - Applies to all orders/transactions not included in CTI categories 1, 2, or 3. These typically are orders entered by or on behalf of non-member entities.
| New for CME and CBOT: Member entities receiving preferential rates for their proprietary trading will be classified as CTI 2 rather than CTI 4.
If you have any questions regarding this matter, please contact any of the following individuals:
CBOT | Terry Quinn - Senior Manager | 312.435.3753
| Dean Payton - Vice President | 312.435.3658
CME | Jim Moran, Director, Market Regulation | 312.930.8520
| Lou Abarcar, Manager, Market Regulation | 312.648.3623
| Rich Gustafson, Manager, Market Regulation | 312.930.8512
Thank you, Chicago Mercantile Exchange Market Regulation Department