UPDATE REGARDING CLEARED OTC U.S. DOLLAR / CHILEAN PESO SPOT, FORWARD AND SWAP TRANSACTIONS

As you were notified previously in CME Group Special Executive Report, S-5713, dated Friday, April 15, 2011, Chicago Mercantile Exchange Inc. has begun offering clearing services for non-deliverable forward (NDF) over-the-counter (OTC) U.S. dollar/Chilean peso spot, forward and swap transactions. Parties to transactions in cleared OTC contracts are limited to “eligible contract participants” as defined in Section 1a(12) of the Commodity Exchange Act. Cleared OTC U.S. Dollar / Chilean Peso NDF transactions, the first of a broader NDF product suite to be rolled out at a later date, is the initial phase of CME plans to introduce clearing services for a wide range of OTC FX spot, forward, swaps; and options on FX spot and forward contracts. OTC FX transactions that are executed bilaterally through brokers, ECNs or other FX trading platforms, when submitted to the CME Clearing, are novated for purposes of clearing and application of financial safeguards, bookkeeping, trade processing, and final delivery or cash settlement. These contracts are carried in the new OTC sequestered account class.

For the full Special Executive Report, please click here (PDF).