• Revisions to CME/CBOT/NYMEX/COMEX Rule 619 (“Appeals”)

      • To
      • Members, Member Firms and Market Users
      • From
      • Market Regulation Department
      • #
      • SER-6256
      • Notice Date
      • 31 May 2012
      • Effective Date
      • 14 June 2012
    • Pending all relevant regulatory review periods, effective on June 14, 2012, CME, CBOT, NYMEX and COMEX will adopt revisions to Rule 619 (“Appeals”) to clarify the procedures attendant to the filing of appeals of arbitration panel decisions in member-versus-member disputes.  The revisions also incorporate a provision that allows the Appellate Panel to determine the appeal based solely upon the parties’ written submissions, the record from the arbitration proceeding and any other relevant information provided to the Appellate Panel and the parties to the appeal, provided the Appellate Panel unanimously agrees to invoke the provision.  This is intended to provide the Appellate Panel with flexibility in determining under which circumstances the participation of the parties to the appeal are necessary at the appeal hearing.
      The revisions to CME/CBOT/NYMEX/COMEX Rule 619 are set forth below, with additions underscored and deletions overstruck.
      CME/CBOT/NYMEX/COMEX Chapter 6 – Arbitration
      619.      APPEALS
      Any decision rendered in a dispute among members resulting in a non-cash award or involving a claim, counterclaim, cross-claim or third-party claim that sought a recovery over $10,000 may be appealed to an appellate panel hearing committeeof the Board (“Appellate Panel”). All other decisions rendered by an arbitration panel are final and may not be appealed. In order to appeal a decision, a party must, within 10three businessdays of receipt of the notice of decision, file with the Market Regulation Department a written requestnotice stating the grounds for the appeal and the specific error or impropriety of the original decisionbased upon the standards set forth in Rule 620 and deposit the applicable fee established by the Exchange. Within 15 days of receipt of the notice of decision, the appellant must deposit with the Market Regulation Department a cashier’s or certified check payable to CME Group in the amount of any monetary award against such appellant.
      Failure to timely comply with these requirements for appeal, when applicable, shall constitute a waiver of any right to appeal and render the arbitrators’ decision final and binding.
      Within 15 days after filing a notice ofrequest for anappeal, the appellant shall file with the Market Regulation Department any argument and any documents or information that the appellant intends to use in support of the appeal. The appellee shall have 15 days thereafter to file whatever documents or information he intends to rely upon in opposition to the appeal. An extension beyond the 15-day filing period may be granted by the Market Regulation Department upon a showing of good cause. In the case of a non-cash award, the filing of the notice of appeal shall not stay the decision appealed from unless the panel from which the appeal is taken or the Chief Regulatory Officer specifically directs that the decision be stayed.
      The appeal will be determinedshall be heardby an Appellate Panel hearing committee of the Board.  The hearing committee shallconsisting of three directors appointed by the Chairman of the Board, one of whom the Chairman of the Board shall designate as chairman of the Appellate Panelhearing committee. No director may serve on an Appellate Panel hearing committeeif he has a personal or financial interest in the matter under consideration. A party may strike any member of the Appellate Panelhearing committeefor good cause shown as determined by the Chief Regulatory Officer, in which event that director shall be excused and from hearing the matter. tThe Chairman of the Board shall then select an alternate directorparticipant from the Board. Any meeting of the Appellate Panelhearing committeeshall require the presence, either in person or by telephone, of each director appointed to the Appellate Panelcommitteeand shall be conducted by the chairman of the Appellate Panelhearing committee.
      The Appellate Panel may, by unanimous vote, determine that the appeal will be decided based solely upon the parties’ written submissions, the record from the arbitration proceeding and any other relevant information provided by the parties to the Appellate Panel.  Any information provided by one party must be provided to all parties to the appeal.  Additionally, tThe parties may, upon unanimous consent, wave the right to hearing, and  request thatthe Appellate Panelhearing committee mayconsider the matter based solely on the parties’ written submissions, subject to the approval of the Appellate Panel.
      Questions regarding the revisions to CME/CBOT/NYMEX/COMEX Rule 619 may be directed to Robert Sniegowski, Market Regulation Department, at 312.341.5991 or Erin Schwartz, Market Regulation Department, at 312.341.3083.
      For media inquiries concerning this Special Executive Report, please contact CME Group Corporate Communications at 312.930.3434 or news@cmegroup.com.