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

The CFTC asked for public comment on the amendments requested by 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. (the "Exchanges") to existing Rule 538 of the Exchanges' rulebooks and the CME Group Market Regulation Advisory. The Exchanges requested the elimination of the use of transitory Exchange for Related Positions ("EFRP") transactions 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. The Exchanges also seek to clarify certain recordkeeping and other compliance obligations related to non-transitory EFRPs, and to incorporate aspects of their existing guidance of EFRPs set forth in the CME Group Market Regulation Advisory Notice into the text of Rule 538. Comments on the amendments should be submitted by October 18.

See: CFTC Press Release; Exchange Groups Letter to CFTC.