MARKET REGULATION ADVISORY NOTICE______________________________________________________________________
ExchangeCME

SubjectRegistration and Identification of Broker Associations

Rule References

Rule 515

Advisory Date

April 18, 2022

Advisory Number

CME RA2202-2

Effective Date

May 2, 2022

Effective trade date May 2, 2022, and pending all relevant CFTC regulatory review periods, this Advisory
Notice supersedes CME Market Regulation Advisory Notice RA2103-2 from August 30, 2021. It is being
issued to notify CME members that all SOFR options contract months will be added to the list of contracts
subject to the intra-association trading restrictions pursuant to CME Rule 515.E. (“Trading Restrictions”),
on May 2, 2022.
All contract months of SOFR options (collectively, “Interest Rate options”) are subject to the intraassociation trading restrictions pursuant to CME Rule 515.E. (“Trading Restrictions”);
The complete text of Rule 515 begins on page 2 of this Advisory Notice.
Interest Rate Options Trading Restrictions as of May 2, 2022
The intra-association trading restrictions among members of CME broker associations operating inInterest Rate options are set forth below.
A. Contract Months Subject to the Restrictions
All listed contract months from the first day of trading through the last day of trading.
B. Restrictions
Order executions in restricted contract months by members of a broker association opposite othermembers of the same broker association are limited to 20% per month.
Best and Only Bid and Offer Documentation
In circumstances where two members of the same broker association trade opposite one another in acontract month subject to the trading restrictions set forth above, and at the time the trade is executedone member is the best and only bid and the other member is the best and only offer, the quantity
associated with the execution will be removed from each member’s monthly intra-association percentage
restrictions provided that all of the following requirements are met:
1. A note is made on the trading document by one of the two members involved in the trade
indicating that at the time the trade was executed, one member was the best and only bid and theother member was the best and only offer in the pit. Noting “B&O” on the trading document issufficient for this purpose. That notation must be made contemporaneously with the trade beingmade.
2. The time of the trade to the nearest minute is recorded on the trading document containing theB&O notation.
3. A signature and a legible acronym of a member (or the signature of an Exchange official)attesting to the fact that the members were the best and only bid and best and only offer at thetime the trade was made must be noted on the trading document. The signature and acronym ofCME RA2202-2
April 18, 2022
Page 2 of 3
the member (or the signature of the Exchange official) must be obtained as soon as possible after
the trade has been made. Members executing the trade may request signatures only frommembers (or Exchange officials) who were present when the trade was made. Members
signing such trading documents may do so only if they were present and can attest to thefact that the trade was a best and only bid and offer at the time it was made. Members ofthe same broker association are not eligible to sign as a witness for this purpose.
4. Copies of the documentation are forwarded to the Market Regulation Department, marked to theattention of Jackie Cerven or Jeffrey Nierman.
Properly documented best and only bids and offers will be removed from each member’s intraassociation trading volume and total trade volume when calculating compliance with the applicabletrading restrictions. If the removal of the volume associated with the best and only bids and offers resultsin the reduction of a member’s intra-association trading percentage to a non-violative level, the member
will not be deemed to have violated Rule 515.E.
Documentation that does not meet all the requirements set forth above will not be accepted by theMarket Regulation Department.
Questions regarding this advisory may be directed to one of the following individuals in MarketRegulation:
Jackie Cerven, Senior Data Investigator, at 312.872.5341
Jeffrey Nierman, Lead Data Investigator, at 312.341.3195.
For media inquiries concerning this Advisory Notice, please contact CME Group Corporate Communications at 312.930.3434 or
news@cmegroup.com.

515.
REGISTRATION AND IDENTIFICATION OF BROKER ASSOCIATIONS
515.A. Definitions
1. Floor Brokerage Activity - The execution or pre-execution handling of orders on the trading floor.
2. Broker Association - A broker association shall include the following associations between two or more memberswith trading floor access privileges, at least one of whom is engaged in floor brokerage activity:
a. Revenue Sharing Association: Associations between members who:i. share profits or losses associated with their brokerage and/or error account activity; and/orii. have an employer and employee relationship which relates to floor brokerage activity;
b. Non-Revenue Sharing Association: Associations between members who:
i. regularly share a deck of orders; and/orii. share employee salary expenses.
c. Any other group or combination deemed by the Exchange to be a broker association.
3. Principal of a Revenue Sharing Association – Each individual who has formal or de facto control over the affairsof, or has a ten percent or greater ownership interest in, a Revenue Sharing Association not owned by a clearing
member firm.
4. Spokesperson of a Non-Revenue Sharing Association and Revenue Sharing Associations owned by a clearing
member firm – An individual authorized to represent a Non-Revenue Sharing Association or Clearing Firm owned
Revenue Sharing Association in connection with its registration obligations set forth in Section B.
5. Investor – An individual who has a direct beneficial interest in a Revenue Sharing Association but is not a principal
as defined in A.3. above.
515.B. Registration Requirements
1. A member of a broker association shall not handle or execute an order unless that association has registered withthe Exchange.
2. Members or Member Firms must have majority ownership interest in any broker association.

CME RA2202-2
April 18, 2022
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Principals involved in floor brokerage activity must have trading privileges in the membership division required foraccess to the products handled by the members of the association. Principals who are not involved in floor
brokerage activity must own a membership in the membership division required for access to the products handled
by the members of the association. Notwithstanding the above, principals not regularly involved in floor brokerage
activity may hold a membership in any division in circumstances where the association is owned by a MemberFirm and such Member Firm owns a membership in the membership division required for access to the products
handled by the members of the association.
4. No registered broker association or member thereof shall permit a party to have any direct or indirect profit orownership interest in a broker association unless such party is registered in the association in accordance with thisrule.
5. Registration shall be accomplished by filing the appropriate registration forms with the Market Regulation
Department.
6. It shall be the responsibility of the broker association and its principals or spokespersons to ensure that theassociation is properly registered. Any additions, deletions or other changes to the information already reported
must be provided to the Market Regulation Department within two business days after the event giving rise to suchchanges.
7. The Exchange may request any additional information from a broker association as deemed appropriate.
515.C. Prohibition on Sharing of Personal Trading Profits
Registrants in a broker association may not share profits or losses associated with their personal trading activity bydirect or indirect means, except for profits and losses related to brokerage errors.
515.D. Supervision
Each principal of a Revenue Sharing Association must diligently supervise the association’s member registrants andnon-member employees and may be held directly liable for violations of any rule of the Exchange by such registrants
and employees. Regardless of whether the principal is held responsible for the act or acts constituting the violation,
each principal is jointly liable for the payment of any fines assessed against another principal, registrant or employeeof the association provided that the violation occurred while that person was functioning in his capacity with theassociation.
515.E. Trading Restrictions
The Exchange may impose limits on the percentage of personal trading and/or brokerage volume that members of abroker association may execute with one another. Violations of such restrictions will result in summary action according
to the following schedule on a rolling 12 month period:First Occurrence Letter of Warning
Second Occurrence $5,000 fine
Subsequent Occurrence $10,000 fine
The Exchange may restrict a member of a Revenue Sharing Association from trading for any account such member
owns, controls or in which such member has a financial interest opposite other members of the association executing
orders. Violation of such restrictions will result in summary action according to the following schedule on a rolling 24month period:First Occurrence Letter of Warning
Second Occurrence $500 fineThird Occurrence $1,000 fine
Subsequent Occurrence $5,000 fine
Actions taken pursuant to this section are final and may not be appealed; however members will have 15 days following
receipt of notification of the action to present evidence to the Market Regulation Department that administrative, clericalor other errors caused the apparent rule violation.
Notwithstanding the provisions of this section, the Market Regulation Department may, at any time, refer matters thatit deems egregious to the Chief Regulatory Officer for the consideration of charges.