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REMINDER NOTICE
Harmonized CME and CBOT Customer Type Indicator (CTI) Codes
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.
In October 2004, CME and CBOT announced how the new CTI code definitions will be applied for CME and CBOT products. Many
Clearing Firms have already applied these new CTI definitions, while others are in the process of making system changes.
Both the CBOT and the CME are anticipating that all firms will apply the new CTI definitions no later than December 31, 2004.
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 firm, firms holding a membership pursuant to Rules 106.H., 106.I., 106.N., 106.R (also known
as Electronic Corporate Members) or 106.S., 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 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 the proprietary accounts of clearing member firms.
CTI 3: Electronic Trading – Applies to orders entered by member or 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.
Questions regarding this notice may be directed to any of the following individuals:
CBOT: Terry Quinn, Senior Manager, Office of Investigations & Audits
tquinn@cbot.com or 312-435-3753
Dean Payton, Vice President, Office of Investigations & Audits
dpayton@cbot.com or 312-435-3658
CME: Jim Moran, Director, Market Regulation
jmoran@cme.com or 312-930-8520
Lou Abarcar, Manager, Market Regulation
labarcar@cme.com or 312-648-3623
Rich Gustafson, Manager, Market Regulation
rgustafson@cme.com or 312-930-8512
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