November 6, 2013

CFTC Seeks Public Comment on Amended Request from CME Group to Amend Rule 538 (Exchange for Related Positions)

Washington, DC – The Commodity Futures Trading Commission (CFTC) is requesting public comment on an amended request from the Chicago Mercantile Exchange Inc., the Board of Trade of the City of Chicago, Inc., New York Mercantile Exchange, Inc., Commodity Exchange, Inc., and the Board of Trade of Kansas City, Missouri, Inc. (collectively, the Exchanges), for approval of amendments to existing Rule 538 of the Exchanges’ rulebooks and the issuance of CME Group Market Regulation Advisory Notice RA1311-5.

The Exchanges previously had filed a related request on September 12, 2013, seeking approval of amendments to Rule 538 and issuance of CME Group Market Regulation Advisory Notice RA1311-5. The CFTC provided a 30-day public comment period on that request commencing on September 17, 2013 and ending on October 18, 2013. On November 1, 2013, the Exchanges withdrew the original request and filed an amended request for approval of amendments to Rule 538 and issuance of CME Group Market Regulation Advisory Notice RA1311-5. In order to afford the public with an opportunity to comment on the Exchanges’ amended request, the CFTC is providing an additional 30-day comment period.

The Exchanges are seeking approval to eliminate the use of transitory Exchange for Related Positions transactions (EFRPs) – except for transitory EFRPs in the Exchanges’ FX markets – wherein the execution of an EFRP is contingent upon the execution of another EFRP or related position transaction between the parties and where the transactions result in the offset of the related positions without the incurrence of market risk in the context of the related position transactions.

The Exchanges also are seeking approval to amend and/or clarify certain recordkeeping and other compliance obligations relating to non-transitory EFRPs, and to incorporate aspects of the Exchanges’ existing guidance on EFRPs set forth in CME Group Market Regulation Advisory Notice RA1006-5 from June 11, 2010, into the text of Rule 538.

Comments regarding the Exchanges’ amended request should be submitted on or before December 6, 2013.

Comments may be submitted electronically through the CFTC’s Comments Online process. All comments will be posted on the CFTC website.

Last Updated: November 6, 2013