CFTC regulations and Exchange Rules require a customer type indicator code ("CTI") on every transaction executed electronically or by open outcry.  Some firms have noted that over the years there have been minor differences in CME and CBOT requirements as to the application of CTI codes in certain circumstances.  Additionally, as electronic trading has developed, there has been some confusion as to the appropriate ways to apply CTI codes to electronically executed transactions.   CME and CBOT have agreed upon the following CTI code definitions for application at both exchanges.  These codes may be somewhat different than have been required in the past, but should be applied by all firms and members going forward:  

CTI 1: Electronic Trading- Applies to orders entered by an individual member for his/her own account or an account in which he/she has an ownership, financial interest, or control (except a clearing firm proprietary account).

Open Outcry- Applies to orders entered by a member trading for his/her own account or an account in which he/she has an ownership, financial interest, or control (except a clearing firm proprietary account).

CTI 2: Electronic Trading and Open Outcry- Applies to orders entered or trades executed for the proprietary accounts of clearing member firm, firms holding membership pursuant to Rules 106.H., 106.I., or 106.J., and firms registered under the Asian-Pacific Incentive Program or the European Incentive Program.

CTI 3: Electronic Trading- Applies to orders entered by a member or a non-member terminal operator for the account of another member or an account controlled by such other member.

Open Outcry- Applies to orders that a member executes on behalf of another member or for an account controlled by such other member, when the other member is on the floor or is entering the order via a wireless headset connection.

CTI 4: Electronic Trading - Applies to the entry or execution of all orders and trading not included in CTI categories 1, 2, or 3 discussed above.  These typically are orders entered by or on behalf of customers.

Open Outcry- Applies to the entry or execution of all orders and trading not included in CTI categories 1, 2, or 3 discussed above.  These typically are orders entered by or on behalf of customers, or orders for member accounts that are entered as written orders by the clearing firm.

If you have any questions regarding CTI codes, please contact any of the individuals listed below in the Market Regulation Department:  Lou Abarcar at 312.648.3623, or Jim Moran at 312.930.8520