FEE POLICY BULLETIN
TO:

Individual NYMEX Members
Individual COMEX Members
Chief Compliance Officers
New Firm Approval Contacts
Firm EFS Contacts

FROM:

Audit Department, Clearing House Division

DATE:

March 14, 2011

SUBJECT:NYMEX/COMEX – Individual Members and Power of Attorney#11-02

CME Group Inc. (“CME Group”) sets the fee policies for its four subsidiary exchanges - Chicago
Mercantile Exchange Inc. (“CME”), Chicago Board of Trade, Inc. (“CBOT”), New York
Mercantile Exchange, Inc. (“NYMEX”) and Commodity Exchange, Inc. (“COMEX”).
In response to market participant feedback, CME Group issued Fee Policy Bulletin (“FPB”) #1101 detailing CME, CBOT, NYMEX and COMEX individual member fee eligibility polices. While
FPB #11-01 clarified and consolidated CME Group’s fee policies for applying reduced fees totrades for individual member accounts it did not address permitted Power of Attorney (“POA”)
traders of NYMEX and COMEX individual members.
Under the Second Amended and Restated Certificate of Incorporation of New York Mercantile
Exchange, Inc., individual members of NYMEX and COMEX may grant POA of electronic
trading discretion to no more than three non-member individuals if owning a membership or nomore than one non-member individual if leasing a membership. As a result, CME Group is
issuing this FPB setting forth the policies regarding the granting of POA electronic trading
discretion.
This FPB only applies to the unique benefits and requirements pertaining to individual membersof NYMEX and COMEX with respect to granting POA electronic trading discretion and iseffective July 1, 2011. All other individual member fee policies as detailed in FPB #11-01 must
be complied with.

1.

Eligibility

Individual members of NYMEX and COMEX including individuals owning a membership (equitymembers) and individuals leasing a membership (lessees) are eligible to grant POA ofelectronic trading discretion.

NYMEX/COMEX – Individual Members and Power of Attorney
March 14, 2011
Page 2

Individuals owning a NYMEX or COMEX membership may grant POA of electronic trading to nomore than three non-member individuals per membership owned. Individuals leasing a NYMEXor COMEX membership may grant POA of electronic trading to one non-member individual permembership leased.1
In accordance with NYMEX Rule 501, non-member individuals granted POA of electronic
trading discretion may not have access to the trading floor as a non-member employee of anindividual member or member firm.

2.

Registration of POA Electronic Trader

In order to grant a non-member individual POA of electronic trading, the POA electronic trader
must be appointed and registered to the individual NYMEX/COMEX member. An “Appointmentof NYMEX/COMEX POA Electronic Trader” must be completed and filed with NYMEX’sMembership Services Department. Such grant of POA will remain in effect until terminated byfiling a notice with NYMEX’s Membership Services Department.
Once registered with NYMEX’s Membership Services Department, the clearing member firmmust register the POA electronic trader’s Operator ID (e.g. Tag 50 ID) and the individual
NYMEX/COMEX member’s account in the Exchange Fee System (“EFS”). A clearing member
will not be able to properly register the POA electronic trader in EFS until the POA electronic
trader has been properly appointed and registered with NYMEX’s Membership ServicesDepartment.

3.

Individual NYMEX/COMEX Member AccountIn order to obtain member clearing fees, an individual NYMEX or COMEX member accountmust be 100% owned by an individual NYMEX or COMEX member, 100% jointly owned byindividual NYMEX or COMEX members, 100% owned by a corporate entity which is 100%owned by an individual NYMEX or COMEX member or 100% owned by a corporate entity which
is 100% jointly owned by individual NYMEX or COMEX members.2
All funding of and contributions to the individual NYMEX or COMEX member account must be100% made by the individual NYMEX or COMEX member(s).

1For clarity, non-member individuals who are not otherwise bona-fide W-2 employees or 1099-MISC
independent contractors of a clearing member entering orders on behalf of NYMEX and COMEX
individual members may be granted a POA of electronic trading in accordance with this FPB. With thegrant of POA of electronic trading, the orders entered by such non-member individuals for the account ofa NYMEX or COMEX individual member may be assessed member fees.
2For clarity, NYMEX and COMEX are separate exchanges and each must be joined independently formembership status. Further, for purposes of this FPB, individual member will imply individual
membership is held within the applicable exchange for purposes of receiving the member fees andbenefits detailed.

NYMEX/COMEX – Individual Members and Power of Attorney
March 14, 2011
Page 3As a result and as the POA is only a grant of electronic trading discretion, a POA electronic
trader may not:
••
•

4.

Have an ownership interest in the individual NYMEX or COMEX member’s account;Contribute any funding to the individual NYMEX or COMEX member’s account in the form ofa capital contribution, loan or any other type of payment; andBe responsible in any way for the individual NYMEX or COMEX member’s account including
losses of the account.

Individual NYMEX/COMEX Member Trade Execution/Order Submission

A POA electronic trader may trade with discretion as well as enter orders for the account of anindividual NYMEX or COMEX member. Only trades conducted electronically of NYMEX andCOMEX products, in the respective exchange of the individual member, will be entitled tomember fees.3
The POA electronic trader(s) and the individual NYMEX or COMEX member(s) must be the soledecision-maker(s) in the submission of each order and must physically enter each order.
Orders that result from the collective activity and decision making of a group/team of individuals(not all of whom are individual NYMEX or COMEX members or POA electronic traders ofindividual NYMEX or COMEX members) will not be considered traded by an individual NYMEXor COMEX member/POA electronic trader eligible for member fees. CME Group has sole
discretion to determine the universe of individuals who are part of the group/team involved intrading.
Usage of an Automated Trading System (“ATS”) by individual NYMEX or COMEX members inwhich POA electronic traders are involved in the (1) determination of trading strategies,
parameters, inputs, and alerts, (2) operation and administration of the system and (3) monitoringof trading performance, system performance and alerts will, as a general rule, require acorporate entity membership status in order to be eligible for reduced rates. Under very limited
circumstances wherein the specific usage of an ATS is consistent with the spirit of individual
member trading, CME Group will, in its sole discretion, grant individual member fees for tradesby an ATS for an individual member account. Refer to FPB #11-01 for a complete discussion ofindividual member fee policies regarding the utilization of ATS.

5.

POA Trader Compensation

A POA electronic trader may be a bona-fide employee or an independent contractor/selfemployed individual of the individual NYMEX or COMEX member.
A POA electronic trader may be compensated for his trading activities of the individual NYMEXor COMEX member’s account through receipt of a salary, salary plus bonus, discretionary
payment, or profit split. Further, a POA electronic trader may share in the profitability/earn a3

NYMEX products includes only products listed on the NYMEX Exchange and does not include products
cleared through CME ClearPort.

NYMEX/COMEX – Individual Members and Power of Attorney
March 14, 2011
Page 4return based on the member’s account performance. Any profit splits with POA electronictraders may not exceed 80%/20% (i.e. 80% to the POA electronic trader/20% to the individual
NYMEX or COMEX member). Further, any discretionary compensation including bonuses
when added to any salary paid to the POA electronic trader, may not exceed 80% of theaccount’s profit.

6.

Application of Fees

For discretionary and non-discretionary orders entered by POA electronic traders of individual
NYMEX or COMEX members, only the membership status of the account owner, that is theindividual NYMEX or COMEX member, will impact the fees assessed.

If you have any questions, please call the Audit Department at (312) 930-3230.