• Revisions to Chapter 8 – Transfer of References to Dubai Mercantile Exchange Ltd. (“DME”) and Elimination of References to the Green Exchange, LLC (“GreenX”)

      • To
      • Members, Member Firms and Market Users
      • From
      • Market Regulation Department
      • #
      • SER-6384
      • Notice Date
      • 07 September 2012
      • Effective Date
      • 14 September 2012
    • Pending all relevant regulatory review periods, effective on Friday, September 14, 2012, legacy references to Dubai Mercantile Exchange Ltd. (“DME”) will be transferred from Chapter 8 of the NYMEX Rulebook to Chapter 8 of the CME Rulebook to reflect the recent vacation of NYMEX’s registration as a derivatives clearing organization (“DCO”).  Due to this vacation, CME has been the registered DCO for trades in DME products since August 6, 2012.
       
      On August 26, 2012, products listed for trading by the Green Exchange, LLC (“GreenX”) designated contract market (“DCM”) were transferred to NYMEX.  As a result of the transfer, legacy references to GreenX are unnecessary and are being eliminated from Chapter 8 of the NYMEX Rulebook.
       
      Additionally, missing references to Exchange of Options for Options are being added to CME and CBOT Rule 808 (“CME ClearPort: Procedures for Trade Submission”).  Lastly, in order to ensure consistency between NYMEX Rules 538 (“Exchange for Related Positions”) and 808, a legacy reference to Exchange for Swaps (“EFS”) in Rule 808 is being modified to Exchange for Risk (“EFR”).
       
      The revisions are set forth below, with additions underscored and deletions overstruck.
       
      If you have any questions concerning this matter, please contact Robert Sniegowski, Senior Director, Rules & Regulatory Outreach, Market Regulation Department, at 312.341.5991.
       
      For media inquiries concerning this Special Executive Report, please contact CME Group Corporate Communications at 312.930.3434 or news@cmegroup.com.
       
      Revisions to NYMEX Chapter 8
       
      800. CLEARING HOUSE
      800.A. CME Clearing House
      The Exchange shall utilize the services of the CME Clearing House in order to protect market participants and to maintain the integrity of the contracts traded on or processed through the Exchange. Membership in the Clearing House shall be a right and privilege granted by the Board of Directors which may, from time to time, establish such classes of membership in the Clearing House, together with the duties, rights and privileges thereof, as it deems necessary.
      800.B. Dubai Mercantile Exchange Limited
      For purposes of these Chapter 8 rules and except as otherwise noted within a particular rule, all references to requirements, conditions or procedures of the Clearing House, shall be deemed to apply to Dubai Mercantile Exchange Limited ("DME") contracts. The Clearing House, in relation to providing clearing services to the DME for transactions effected on or subject to the rules of the DME, will provide reports and such other information to the DME as may be required for the business operation and regulatory requirements applicable to the DME.
      800.C. Green Exchange, LLC
      For purposes of these Chapter 8 rules and except as otherwise noted within a particular rule, all references to requirements, conditions or procedures of the Clearing House, shall be deemed to apply to Green Exchange, LLC ("GreenX") contracts.
      The Clearing House, in relation to providing clearing services to GreenX for transactions effected on or subject to the rules of GreenX, will provide reports and such other information to GreenX as may be required for the business operation and regulatory requirements applicable to GreenX.
       
      808. CME CLEARPORT: PROCEDURES FOR TRADE SUBMISSION
      (A) Scope of Rule. This rule governs transactions not competitively executed on the Exchange ("Transactions") that are submitted via CME ClearPort for clearing in connection with a contract that is listed on the Exchange for clearing only or listed for trading and clearing on the Exchange. In submitting such Transactions to CME Clearport or in allowing such Transactions to be submitted to the CME Clearport, the two parties to the Transaction shall be deemed to have mutually agreed to initiate a process to substitute their transaction for a standardized futures contract listed for trading and clearing on the Exchange. For purposes of this rule, the two parties to the Transaction shall be referenced as the "Parties to the Transaction." Further, with respect to Transactions on the Dubai Mercantile Exchange Limited (“DME”) or the Green Exchange, LLC (“GreenX”), any breach of procedures related to this Rule shall be handled pursuant to the rules and regulations of DME or GreenX (as applicable).
      [Section (B) is unchanged.]
      (C) Submission of Futures and Options. The process of submission of a futures or options Transaction shall not be deemed to have been completed unless and until the Parties to the Transaction have successfully concluded the submission of the Transaction to the Exchange (or to DME or GreenX, as appropriate) as an Eexchange of Ffutures for Pphysicals ("EFP"), an Eexchange of Ffutures for Riskswaps ("EFRS"), an exchange of OTC Options for exchange oOptions ("EOO") or as a Block Trade, as applicable, pursuant to the respective provisions of Exchange Rules 526 or 538relevant NYMEX, COMEX, DME or GreenX Rules, and the provisions of this Rule.
      [Section (D) is unchanged.]
      (E) Registration of Eligible Participants, Eligible Accounts and Authorized Brokers. Each Clearing Member must register with the Exchange in the manner required for any customer authorized by the Clearing Member to submit transactions to the Exchange (or DME or GreenX, as appropriate) pursuant to this rule, and must also register with the Exchange the applicable account numbers for each such customer. For each such account, the Clearing Member carrying that account also must submit to the Exchange in the manner provided the name of any Broker(s) who has registered with the Exchange for services provided by the Exchange, and who is authorized by the customer to act on its behalf in the submission of executed transactions to the Exchange and related activity. For any such Brokers authorized by the customer and submitted to the Exchange by the Clearing Member, such submission by the Clearing Member will not constitute an endorsement or ratification of the customer's authorization of the Broker. Moreover, submission of Brokers authorized by the customer will not mean that the Clearing Member is in privity with, has a relationship with and/or is otherwise standing behind any of the customer's authorized Brokers, and the Clearing Member will have no responsibility for any such Brokers selected by the customer and no duty or obligation to supervise the activities of any such Brokers.
      [The remainder of the Rule is unchanged.]
       
      850. EXCHANGE SERVICE FEES
      (A) Charges for clearing trades shall be fixed by the Board upon the recommendation of the Clearing House Risk Committee and shall be payable by Clearing Members as billed. All Clearing Fees shall be charged per contract bought, sold, delivered or accepted. (B) A minimum fee of $800.00 per month shall be charged to Clearing Members. (C) Claims by Clearing Members for adjustments to clearing charges or fees shall be made to the Exchange within 90 days of the invoicing of such charges by the Exchange. The failure to claim adjustments within this period shall constitute a waiver of such claim by the Clearing Member. (D) Clearing Members shall collect from non-member customers a transaction fee as established by the Exchange for each commodity contract bought or sold or otherwise cleared on or subject to the rules of the Exchange and/or the Dubai Mercantile Exchange Limited and remit said fees to the Clearing House as billed.
       
      Revisions to CME Chapter 8
       
      800. CLEARING HOUSE
      The Exchange shall maintain and operate a Clearing House in order to protect market participants and to maintain the integrity of the contracts traded on or processed through the Exchange. Membership in the Clearing House shall be a right and privilege granted by the Board of Directors which may, from time to time, establish such classes of membership in the Clearing House, together with the duties, rights and privileges thereof, as it deems necessary. Whenever these rules create a right in favor of the Clearing House, or impose a liability on the Clearing House, it shall be construed as the right or liability of the Exchange, and shall be enforced by or against the Exchange.
      For purposes of these Chapter 8 rules and except as otherwise noted within a particular rule, all references to requirements, conditions or procedures of the Clearing House, shall be deemed to apply to Dubai Mercantile Exchange Limited (“DME”) contracts.  The Clearing House, in relation to providing clearing services to DME for transactions effected on or subject to the rules of the DME, will provide reports and such other information to the DME as may be required for the business operation and regulatory requirements applicable to the DME.
       
       
      808. CME CLEARPORT: PROCEDURES FOR TRADE SUBMISSION
      (A) Scope of Rule. This rule governs transactions not competitively executed on the Exchange ("Transactions") that are submitted via CME ClearPort for clearing in connection with a contract that is listed on the Exchange for clearing only or listed for trading and clearing on the Exchange. In submitting such Transactions to CME ClearPort or in allowing such Transactions to be submitted to CME ClearPort, the two parties to the Transaction shall be deemed to have mutually agreed to initiate a process to substitute their transaction for a standardized futures contract listed for trading and clearing on the Exchange. For purposes of this rule, the two principals in such Transactions shall be referenced as the "Parties to the Transaction."  Further, with respect to Transactions on the Dubai Mercantile Exchange Limited (“DME”), any breach of procedures related to this Rule shall be handled pursuant to the rules and regulations of DME.
      [Section (B) is unchanged.]
      (C) Submission of Transactions. The process of submission of a Transaction shall not be deemed to have been completed unless and until the Parties to the Transaction have successfully concluded the submission of the Transaction to the Exchange (or to DME, as appropriate)as an exchange of futures for physicals ("EFP"), an exchange of futures for risk ("EFR"), an exchange of OTC Option for exchange option (“EOO”) or as a Block Trade, as applicable, pursuant to the respective provisions of Exchange rules 538 and 526, relevant DME Rules, and the provisions of this Rrule.
      [Section (D) is unchanged.]
      (E) Registration of Eligible Participants, Eligible Accounts and Authorized Brokers. Each CME Clearing Member must register with the Exchange in the manner required for any customer authorized by the Clearing Member to submit transactions to the Exchange (or DME, as appropriate)pursuant to this rule, and must also register with the Exchange the applicable account numbers for each such customer. For each such account, the Clearing Member carrying that account also must submit to the Exchange in the manner provided the name of any Broker(s) who has registered with the Exchange for services provided by the Exchange, and who is authorized by the customer to act on its behalf in the submission of executed transactions to the Exchange and related activity.
      For any such Brokers authorized by the customer and submitted to the Exchange by the Clearing Member, such submission by the Clearing Member will not constitute an endorsement or ratification of the customer's authorization of the Broker. Moreover, submission of Brokers authorized by the customer will not mean that the Clearing Member is in privity with, has a relationship with and/or is otherwise standing behind any of the customer's authorized Brokers, and the Clearing Member will have no responsibility for any such Brokers selected by the customer and no duty or obligation to supervise the activities of any such Brokers.
      [The remainder of the Rule is unchanged.]
       
      850. FEES
      A. Exchange Fees
      Exchange fees, including clearing fees, Globex system fees, brokerage and/or any transaction surcharges, shall be assessed against a clearing member for each side of a transaction traded on, cleared by or processed through the Exchange and/or the Dubai Mercantile Exchange Limited (“DME”)as the Board, or Exchange staff or DME, as appropriate,may from time to time prescribe.
      [The remainder of the Rule is unchanged.]
       
      Revisions to CBOT Chapter 8
       
      808. CME CLEARPORT: PROCEDURES FOR TRADE SUBMISSION
      [Sections (A) and (B) are unchanged.]

      (C) Submission of Transactions. The process of submission of a Transaction shall not be deemed to have been completed unless and until the Parties to the Transaction have successfully concluded the submission of the Transaction to the Exchange as an Eexchange of Ffutures for Pphysicals ("EFP"), an Eexchange of Ffutures for Rrisk ("EFR"), an Exchange of Options for Options (“EOO”) or a Block Trade, as applicable, pursuant to the respective provisions of Exchange Rrules 538 and 526 and the provisions of this Rrule.

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