• Question & Answer Guide - Elimination of CME Group Inc. Share Requirements for Clearing Membership

      • To
      • Chief Executive Officers, Chief Financial Officers, Chief Compliance Officers
      • From
      • Audit Department, Clearing House Division
      • #
      • AIB 11-05
      • Notice Date
      • 27 July 2011
      • Effective Date
      • 13 May 2011
    •  
      Audit Information Bulletin
       
       
      TO:                  Chief Executive Officers                                                                                #11-05
                              Chief Financial Officers
                              Chief Compliance Officers
       
      From:            Audit Department, Clearing House Division
       
      DATE:             July 27, 2011
       
      SUBJECT:      Question & Answer Guide – Elimination of CME Group Inc. Share Requirements for Clearing Membership 
       
       
      CME Group Inc. (“CME Group”) announced the elimination of the requirement for clearing members to assign CME Group shares (“shares”) for their CME, CBOT and NYMEX clearing membership privileges as stated within Audit Information Bulletin #11-04. Recently, CME Group has been asked for additional clarification regarding the elimination of such requirement related to exchange membership privileges, clearing, exchange and Globex® fees (“fees”), and regulatory reporting. This Question and Answer Guide has been compiled to provide additional guidance.
       
      Exchange Membership Privileges
       
      1.    What are the share requirements for clearing membership?
       
      There are no share requirements for CME, CBOT, and NYMEX clearing membership effective May 13, 2011. Refer to Audit Information Bulletin #11-04. COMEX clearing members did not have a share requirement for clearing privileges.
       
      2.    Are there any changes to the memberships required for clearing membership?
       
      No. The following memberships are required for clearing membership of the respective exchange:
       
      • CME Clearing Membership – two CME, two IMM, two IOM and one GEM Division Memberships.  At least one CME, one IMM, one IOM and one GEM Division Membership must be owned by the clearing member or by a person with an acceptable proprietary interest in the clearing member of at least $500,000; the remaining memberships may be independently assigned.
       
      • CME Financial Instrument Clearing Member (“FICM”) – two CME, two IMM, two IOM and one GEM Division Memberships.  Memberships may be independently assigned. The CME FICM may utilize any existing exchange memberships that it maintains for CME member firm benefits (i.e. reduced fees) towards the FICM membership requirement.
       
      • CBOT Clearing Membership – one Full Membership or two Full Memberships if an FCM.  If one membership is required, then it must be owned by the clearing member or by a person with an acceptable proprietary interest in the clearing member of at least $500,000.  If two memberships are required, then at least one must be owned by the clearing member or by a person with an acceptable proprietary interest in the clearing member of at least $500,000; the remaining membership may be independently assigned. 
       
      • CBOT FICM – one Full Membership or two Associate Memberships. Memberships may be independently assigned. The CBOT FICM may utilize any existing exchange memberships that it maintains for CBOT member firm benefits (i.e. reduced fees) towards the FICM membership requirement.
       
      • NYMEX Clearing Membership – two NYMEX Memberships.  At least one must be owned by the clearing member or by a person with an acceptable proprietary interest in the clearing member of at least $500,000; the remaining membership may be independently assigned.
       
      • COMEX Clearing Membership – two COMEX Memberships.  At least one must be owned by the clearing member or by a person with an acceptable proprietary interest in the clearing member of at least $500,000; the remaining membership may be independently assigned.
       
      Further, memberships required for clearing membership may not be assigned to another member firm for membership or reduced fee privileges. 
       
      Fees
       
      3.    What are the requirements for a clearing member to receive equity member fees?
       
      In order to receive equity member fees, the share requirements are:
       
      ·         One CME Group exchange (i.e. CME, CBOT or NYMEX) – 6,000 shares;
      ·         Two CME Group exchanges – 9,000 shares; and
      ·         Three CME Group exchanges – 12,000 shares.
       
      There are no share requirements for member fees for COMEX clearing members.
       
      4.    Are there any restrictions on who can assign the shares for equity member fees?
       
      Yes.  At least 50% of the shares required for equity member fees must be owned by the clearing member or by a person with an acceptable proprietary interest in the clearing member of at least $500,000; the remaining shares may be independently assigned.
       
       
       
      5.    If a clearing member desires equity member fees for its proprietary trading must the required shares be held at Computershare?
       
      Yes, shares required for equity member fees are required to be held at Computershare. 
       
      6.    If shares are released, what are the applicable fees?
       
      CME and/or CBOT clearing members will be eligible for Rule 106.H. Trading Member Firm fees for their proprietary trading, as applicable. NYMEX clearing members will be charged non-member customer fees for their NYMEX proprietary trading. As there are no share requirements for COMEX clearing membership or equity membership, COMEX clearing members will continue to receive equity member fees for their COMEX proprietary trading.
       
      7.    If a firm is a clearing member of more than one CME Group exchange, but does not desire equity member fees for its proprietary trading on all exchanges, may a portion of the shares be released?
       
      Yes, shares for equity member fee purposes may be maintained on an exchange-by-exchange basis. Therefore, shares need only be maintained for any exchange for which equity member fees are desired. Although a firm may be a clearing member of additional exchanges, shares may be released if equity member fees are not desired for a specific exchange.
       
      8.    If a CME clearing member maintains the required shares for equity member fees, are their 100% owned subsidiaries eligible for the equity member fees too?
       
      Yes.  A CME clearing member with the required shares for equity member fees and all of its 100% owned subsidiaries are eligible for the equity member fees on their CME trading activity conducted in accordance with CME Group fee policies. 
       
      9.    Does the releasing of shares from a CME clearing member impact the fees of any 100% owned subsidiaries of the CME clearing member?
       
      Yes. CME clearing members and 100% owned subsidiaries are afforded equity member fees on their CME proprietary trading activity when shares are maintained by the CME clearing member. However, should a CME clearing member release its shares, 100% owned subsidiaries will not be eligible for CME equity member fees. Instead, all 100% owned subsidiaries will receive non-member customer fees on their proprietary trading activity. Subsidiaries and affiliates of CME clearing members may independently apply for membership at CME to receive reduced fees applicable to such membership. CME clearing members will continue to be eligible for CME Rule 106.H. Trading Member Firm fees for their proprietary trading.
       
      10. Does the releasing of shares from a clearing member impact the fees of affiliates of the clearing member?
       
      Yes. CME Rule 106.I. Affiliate Member Firms and qualified affiliates and CME Rule 106.S. Family of Funds Member Firms and qualified funds of CME clearing members will be eligible for equity member fees only if the affiliated CME clearing member retains the required shares for equity member fees. CBOT Rule 106.I. Affiliate Equity Member Firms and CBOT Rule 106.I. Affiliate Umbrella Member Firms and qualified affiliates will be afforded reduced fees as identified within the CBOT Fee Schedule only when the affiliated CBOT clearing member retains the required shares for CBOT equity member fees. 
       
      11. May a clearing member’s shares be independently assigned to another firm?
       
      Yes, clearing members may independently assign shares to another firm. However, any shares assigned to another member firm may not be utilized by the clearing member to meet its share requirement for equity member fees. If upon assignment, the clearing member does not have sufficient shares retained to meet its own share requirement for equity member fees, it will not be afforded equity member fees. 
       
      12. May a clearing member’s shares be assigned to an affiliated firm?
       
      Yes, a clearing member may assign its owned shares to an affiliated member. If the clearing member does not maintain an acceptable proprietary interest in the affiliated member firm of at least $500,000, the assignment would be considered an independent assignment. However, any shares assigned to another member firm may not be utilized by the clearing member to meet its share requirement for equity member fees. If upon assignment, the clearing member does not have sufficient shares retained to meet its own share requirement for equity member fees, it will not be afforded equity member fees. 
       
      Procedures – Release Shares
       
      13. Who should I contact to release my shares?
       
      Please contact the Audit Department at (312) 930-3230. An authorized representative of the clearing member will be required to provide a written request identifying the exchange(s) for which it would like to release shares and the number of share it wishes to release. Additionally, the Shareholder Relations Department will require an Election Form upon receipt of this written request. The form may be obtained at http://www.cmegroup.com/company/membership/files/ClassAShareElectionForm.pdf.
       
      Upon the release of the shares, the Audit Department will provide written confirmation to the clearing member that shares are no longer held for equity member fees specific to the applicable exchanges and the fees that will apply for any proprietary trading activity.
       
      14. If shares are released from Computershare, who do I contact to re-deposit the shares at Computershare?
       
      Please contact the Audit Department at (312) 930-3230. Instructions for depositing shares will then be provided by the Shareholder Relations Department.
       
      Upon the deposit of the shares, the Audit Department will provide written confirmation to the clearing member that shares are now being held for equity member fees specific to the applicable exchanges and the fees that will apply for any proprietary trading activity.
       
       
       
       
       
      15. May shares be released to a clearing member during the 60 day posting period for a withdrawing clearing member under CME, CBOT or NYMEX (“Exchange”) Rule 913?
       
      Yes. Shares are no longer a requirement for clearing membership and may be released at any time including during the 60 day posting period, as defined within Exchange Rule 913, of a withdrawing clearing member.
       
      Regulatory Reporting
       
      16. What is the regulatory treatment for shares held at ComputerShare when such shares are held for equity member fees?
       
      As the shares held at ComputerShare are no longer required for clearing membership they may be considered a current (allowable) asset within the financial statements. Shares should be recorded at market value as a current (allowable) asset, and are subject to a capital haircut in accordance with SEC Rule 240.15c3-1, currently 15% of market value.
       
      Likewise, shares owned by the clearing member but assigned to another member firm for equity member fees may be considered a current (allowable) asset within the financial statements. Shares should be recorded at market value as a current (allowable) asset, and are subject to a capital haircut in accordance with SEC Rule 240.15c3-1, currently 15% of market value.
       
      17. What is the regulatory treatment for shares released from Computershare?
       

      Shares released from Computershare should be treated as any other form of common stock owned by the firm, following all applicable industry rules and regulations for use and valuation of these shares. Shares should be recorded at market value as a current (allowable) asset, and are subject to a capital haircut in accordance with SEC Rule 240.15c3-1, currently 15% of market value.

      If you have any questions, please contact the Audit Department at (312) 930-3230. 

       

CME Group is the world’s leading derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). 
Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX.

© 2025 CME Group Inc. All rights reserved.