FINANCIAL AND REGULATORY BULLETIN

TO:                  Chief Executive Officers                                                                             #14-05

                        Chief Financial Officers

                        Chief Compliance Officers

DATE:             April 16, 2014

SUBJECT:      New Rule 980.F. Required Books and Records – Administrative Fees

Effective Thursday, May 1, 2014, pending all relevant regulatory review periods, CME, CBOT and NYMEX will adopt Rule 980.F., which enables CME Group’s Financial and Regulatory Surveillance Department (“FRS”) to impose administrative fees for violations of Exchange rules related to the timely submission of financial information.  Financial information covered by this rule includes the monthly Form 1-FR or FOCUS Report; the annual certified financial statement; daily segregation, secured 30.7 and cleared swaps customer statements; semi-monthly Segregated Investment Detail Reports and any other prescribed additional reporting such as a daily net capital computation.

Under Rule 980.F., FRS may assess clearing members a $1,000 administrative fee for each required submission that is not received by the due date and time.  FRS will continue to evaluate each late submission to determine if its delay indicates weaknesses in the FCM’s policies, procedures or controls.  Where the late submission of reports or other information may be due to insufficient internal accounting controls or procedures, the clearing member may be subject to Clearing House Risk Committee review and action in lieu of, or in addition to, the administrative fee.  FRS may, in its discretion, waive assessment of the administrative fee. 

The new rule is stated below.    

Revisions to CME/CBOT/NYMEX Rule 980

980.  REQUIRED RECORDS AND REPORTS

F.            Exchange staff may impose a $1000 administrative fee upon clearing members for late submissions of reports and other information required to be submitted to the Financial and Regulatory Surveillance Department by Exchange Rules.  Where the late submission of reports or other information may be due to insufficient internal accounting controls or procedures, the Clearing House Risk Committee may impose disciplinary sanctions in lieu of, or in addition to, the administrative fees.

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