Computerized Trade Reconstruction ("CTR") Monthly Edit Programs

This Advisory Notice supersedes CME & CBOT Market Regulation Advisory Notice RA0805-3 from March 12, 2008, and is being updated and reissued based on changes to CME & CBOT Rule 536.F. (“CTR Enforcement Program and Sanction Schedule”).

Rule 536.F. has been amended to eliminate the exception program related to missing quotes and to modify the fining schedule for individual member violations by adding fine levels of $250 and $2,500.  The text of amended Rule 536.F. pertaining to the CTR enforcement program is reproduced below and is followed by an updated FAQ section beginning on page 3 of this Advisory Notice.

536.F.             CTR Enforcement Program and Sanction Schedule

CTR Monthly Enforcement Program

The CTR threshold levels for members with 100 or more transactions per month are as follows:

Exception Type                                            Threshold Level

Bracket Exceptions                                     8% and above

Time of Execution for

                        Verbal Orders                                               8% and above

                        Sequence Errors                                         8% and above

A letter of warning shall be issued for a first occurrence of exceeding any threshold.  Subsequent occurrences within 12 months of exceeding a threshold shall result in automatic fines starting at $250, and then increasing to $500, $1,000, $2,500, and $5,000 for each subsequent occurrence.

A member will have 15 days after receipt of a letter of warning or a fine to present evidence to the Market Regulation Department in support of having the letter of warning or fine dismissed showing that administrative, clerical, or other errors by the clearing firm caused the member to exceed the threshold level.  If the member does not submit such evidence, or if the Market Regulation Department determines that the evidence submitted is insufficient to reduce the percentage below the threshold level, the letter of warning or fine shall be final and may not be appealed.

The monthly CTR enforcement of timestamp exceptions for firms with 1,000 or more transactions per month is 8% and above.  A letter of warning shall be issued for a first occurrence of exceeding the threshold.  Subsequent occurrences within 12 months of exceeding the threshold shall result in automatic fines starting at $1,500 for the second occurrence, then increasing to $5,000 and $10,000 for each subsequent occurrence.

A firm will have 15 days after receipt of a letter of warning or a fine to present evidence to the Market Regulation Department in support of having the letter of warning or fine dismissed.  If the firm does not submit such evidence, or if the Market Regulation Department determines that the evidence submitted is insufficient to reduce the percentage below the threshold level, the letter of warning or fine shall be final and may not be appealed.

Notwithstanding the provisions of this Section, the Market Regulation Department may, at any time, refer matters that it deems egregious to the Probable Cause Committee.

Questions regarding this Advisory Notice should be directed to the following individuals in Market Regulation:

                                Lou Abarcar, Associate Director       312.341.3236

                                Terry Quinn, Manager                          312.435.3753