FEE POLICY BULLETIN
TO:

Chief Compliance Officers
New Firm Approval Contacts
Firm EFS Contacts

FROM:

Audit Department, Clearing House Division

DATE:

April 11, 2011

SUBJECT:

Clearing Fee Administration#11-03

CME Group Inc.’s (“CME Group”) corporate and clearing member community has grownsignificantly in the last several years. Our strong product mix, liquidity and distribution channels
have fostered great interest in our markets. In response to the trading community and tocultivate further growth, membership categories and incentive programs have been adopted andupdated to meet the needs of, and to benefit, our customers.
In doing so, we recognized the importance to ensure our intermediary clearing members havethe information necessary to timely and properly recognize the benefits to their clients of their
CME Group membership and incentive program participation status. At the same time, it isincumbent upon clearing members to take the necessary steps to ensure their customers areappropriately and timely registered in the Exchange Fee System (“EFS”) to ensure fees areproperly assessed from the beginning and on a continuing basis. We believe these steps are
critical to ensure our members and incentive program participants receive their reduced fees inan effective and efficient manner.
To that end, this Fee Policy Bulletin details out the:xxx

Notification process of membership and incentive program participation status to clearing
members;
Fee administration responsibilities regarding registration of accounts and traders in EFS andthe reconciliation process along with the resources available to assist in such
responsibilities; andAdoption of a new clearing member administrative fee for failure to exercise adequate due
diligence and care in the fee administration process.

We believe it is in the best interest of everyone to work together to ensure members andincentive program participants received the benefits of their status through the appropriate
reduced fees. Further, such diligence on the part of all will ensure fees are appropriately
charged resulting in a diminished need for rebates to be processed within the allowed twomonth window and fewer assessments levied during clearing fee examinations.

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April 11, 2011
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Notifications of Membership/Incentive Program Participation Status
We recognize the importance of clearing members to be well-informed of the membership andincentive program status of their clients. CME Group spends considerable effort to ensure thetimely notification of approvals and withdrawals of its members and incentive program
participants for its four subsidiary exchanges - Chicago Mercantile Exchange Inc., Chicago
Board of Trade, Inc., New York Mercantile Exchange, Inc. and Commodity Exchange, Inc.
To that end, as part of the review and approval process, applicants are required to indicate theirclearing member firms they will utilize. Upon approval of the applicant, the Audit Department
will notify, primarily through e-mail, those clearing member firms identified in the applications of
the entity’s membership/incentive program status and effective date.
Clearing member firm notifications are sent to all individuals who have been identified as “NewFirm Approval Contacts” by each clearing firm. To verify current contacts and/or to add ordelete individuals, please call the Audit Department at 312-930-3230 or send an e-mail to
Edward Wiesneth at edward.wiesneth@cmegroup.com.
Upon a membership/incentive program status change or withdrawal, a similar notification will besent, primarily through e-mail, to the clearing member firms involved of the member/incentive
program firm’s change/withdrawal.
In addition, all member approvals/withdrawals/changes in status are posted in the Special
Executive Reports of the exchanges published to the CME Group community on Mondays.
Clearing Member Fee Administration Responsibilities
The growing membership and incentive program community requires care and diligence on thepart of our clearing members to ensure their clients, both their accounts and traders, areappropriately registered in EFS. Clearing members need to know their customers and to beaware of any changes to their structures (e.g. organizational, ownership, name, etc.) and how
they may impact their continued eligibility for reduced clearing fees.
Clearing members are reminded of the importance of timely:xxx

Registration in EFS of their client accounts and traders to ensure the appropriate fees arecharged immediately;
Allocation of non trades (e.g. exercises, assignments, etc.) in EFS to member and incentive
program participant accounts to ensure fees are charged appropriately; andReconciliation of fees charged by the exchanges through EFS to the firm’s internal records
to ensure any and all errors are identified promptly and corrected.

Clearing members are responsible to have adequate controls and procedures in place to ensure
member and incentive program participant accounts are appropriately and timely registered inEFS.
CME Group has developed numerous reports within EFS designed to assist clearing members
in reconciling various fees charged including registration of accounts and operator IDs;
validation of membership status for firms, individuals and special program participants; anddiscounts associated with various fee incentive programs. In addition, CME Group has
developed an “EFS Reports Portfolio” manual designed to provide an overview of the various

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April 11, 2011
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general and reconciliation reports available and to assist in identifying the best report to use
when reviewing and reconciling fees. The EFS Reports Portfolio can be found on the EFS
homepage.
As a reminder, clearing firms have a two month period in which they may correct a customer’s
account status within EFS resulting in a change in the fees charged to that account.
Administrative Fee
CME Group is instituting an administrative fee to be charged to a clearing member wherein, in
CME Group’s sole discretion, it is determined that the clearing member did not demonstrateadequate care and due diligence in the fee administration process.
The administration fee will help to defray the costs associated with validating amounts anddelays in collecting fees due to assessments. Further, such fee, if any, will be based upon theattention and due diligence the clearing member demonstrated in ensuring compliance with feepolicies and the administration process as well as the firm’s history of compliance with fee
policies and procedures.
If you have any questions or to confirm the membership/incentive program status of a specificfirm client, please contact the Audit Department at (312) 930-3230. In addition, for EFS or fee
administrative questions, please contact the Fee Hotline at (312) 648-5470.