CHICAGO MERCANTILE EXCHANGE INC.
CLEARING HOUSE RISK COMMITTEE
CHARTER1I.

PurposeThe Clearing House Risk Committee (“CHRC” or the “Committee”) has been established by the Board ofDirectors (“Board”) of Chicago Mercantile Exchange Inc. (“CME”) as a special committee withparticipation from market participants. The purpose of the Committee is to assist the Board and theClearing House Oversight Committee in fulfilling their oversight responsibilities over the risk management(excluding operational risk), financial surveillance, clearing member admission and investigation functionsof the Clearing House, other than those relating to interest rate swaps.
The CHRC shall make recommendations and provide reports, as appropriate, with regard to any issue
within the CHRC’s responsibilities and authority, including making recommendations to the Clearing
House Oversight Committee for approvals in accordance with this Charter, and reports to the Board.
In fulfilling its responsibilities, the members of the CHRC shall provide risk-based input and CHRC shallprioritize the safety and efficiency of the Clearing House, generally support the stability of the broader
financial system and consider legitimate interests of clearing members and customers of clearing
members at all times in accordance with prudent risk management standards (including systemic riskmitigation) and best practices in the industry.
II.

Membership & Organization
The members of the CHRC and its Chairperson(s) shall be appointed in accordance with theprovisions of the company’s Corporate Governance Principles; provided the Chairperson(s) must
be members of the Board of CME. In appointing members to the CHRC, the Board shall seek abalance of risk management and operational expertise taking into consideration therecommendations from Clearing House management. Members of the CHRC shall be rotated ona regular basis, taking into consideration member experience, expertise and tenure.
Appointments to the Committee recommended by management with support of theChairperson(s) made in between the annual approval cycle may be approved jointly by theChairman and Chief Executive Officer and the Chair of the Nominating and GovernanceCommittee.

The CHRC shall be comprised of at least nine members, including at least:(i)

two who are members of the CME Board, including the Chairperson(s);(ii)

five who are either an employee or director of a clearing member (“Base ClearingCommittee Members”) approved to clear “Base Guaranty Fund Products” asdefined in Chapter 8 of the Rulebooks (“Base Products”) for Chicago Mercantile
Exchange Inc., Board of Trade of the City of Chicago, Inc., New York Mercantile
Exchange, Inc. and Commodity Exchange, Inc. (collectively referred to as the“Exchanges”);(iii)

two who are customers of Base Clearing Members; and(iii)

one who is neither an employee or director of CME or its affiliates nor anemployee or director of any Base Clearing Member or a customer of any Base
Clearing Member.

1The terms “significant” and “substantive” have the meanings ascribed to them in Appendix D to theCommitment and Signing Authority Policy.

1Any member of the CHRC may be removed with or without cause jointly by the Chairman andChief Executive Officer and the Chair of the Nominating Governance Committee. A member may
resign by giving at least three (3) business days’ written notice of his or her intention to do so tothe Chairperson(s) of the CHRC. Upon a resignation or removal, a replacement shall beconsidered as soon as practicable thereafter.
III.

Members that are not employees of CME or its affiliates may be paid an honorarium for attending
CHRC meetings in an amount to be determined by CME. A member eligible for an honorarium
may choose to forego being paid his or her honorarium upon written notice to the Chairperson(s)of the CHRC.
Committee Meetings, Tasks and Authority

General

The CHRC shall meet as often as the Chairperson(s) determines necessary to carry out its duties
and responsibilities but no less frequently than four times annually and keep minutes of its
proceedings.

The Chairperson(s) shall schedule all meetings of the CHRC and provide the CHRC with awritten agenda, as appropriate. A quorum of the CHRC shall be a majority of its members. A
motion shall pass upon approval from a majority of the members present. Voting may also beconducted outside a meeting via telephone and/or electronic polling of members; provided
approval is received by a majority of the current members of the Committee. Members ofmanagement and others may attend meetings to provide information or recommendations, asnecessary.

The CHRC shall perform its responsibilities in accordance with this Charter and applicableregulatory requirements.

Responsibilities
Risk Management
Risk Management — Matters Presented to the CHRC for Guidance

The CHRC shall provide guidance to the Clearing House on risk management issues relating tothe financial condition of the clearing membership for Base Products, including on mattersrelating to the financial deterioration of any Base Clearing Member.

The CHRC shall review written documentation of the risk-based input provided by the Clearing
House Risk Working Group on topics relevant to the Committee consistent with the remit set forthin this Charter.

Risk Management — Matters for Review and Final Approval by the CHRCThe CHRC shall provide guidance to the Clearing House for the development of the Default
Management Guidelines for Base Clearing Member defaults and approve all substantive changes
to such Guidelines.

Risk Management — Matters for Review, Approval and Recommendation to the Clearing House
Oversight Committee
The CHRC shall consult on and approve all matters that could have a significant impact on therisk profile of the Clearing House and recommend such matters to the Clearing House OversightCommittee for approval.
2

The CHRC shall review the adequacy of the financial safeguards for Base Products, including
receiving regular risk reports from Clearing House management which provide information on theeffectiveness of its risk management program, and shall approve all substantive changes andrecommend such changes to the Clearing House Oversight Committee for approval.

The CHRC shall review the performance bond policies for Base Products and shall approve all
substantive changes and recommend such changes to the Clearing House Oversight Committeefor approval.

The CHRC shall review and approve the Liquidity Risk Management Framework (“LRMF”) on anannual basis and recommend its approval to the Clearing House Oversight Committee. TheCHRC shall also review and approve all substantive changes to the LRMF and recommend suchchanges to the Clearing House Oversight Committee for approval.

The CHRC shall review and approve the Collateral Policy on an annual basis and recommend itsapproval to the Clearing House Oversight Committee. The CHRC shall also review and approve
all substantive changes to the Collateral Policy and recommend such changes to the Clearing
House Oversight Committee for approval.

The CHRC shall review and approve the Credit Policy on an annual basis and recommend itsapproval to the Clearing House Oversight Committee. The CHRC shall also review and approve
all substantive changes to the Credit Policy and recommend such changes to the Clearing House
Oversight Committee for approval.

The CHRC shall review and approve all substantive amendments to the Exchanges’ Rulebooks
impacting the Clearing House Division (other than Chapter 8G and Chapter 900 relating toInterest Rate Swap Products) and recommend such changes to the Clearing House OversightCommittee for approval.

The CHRC shall review and approve any new Base Products that significantly impact the risk
profile of the Clearing House and refer such products for approval to the Clearing House
Oversight Committee. The management of the Clearing House shall report to the CHRC on thelaunch of any new Base Products as part of its regular monthly reporting process.

The CHRC shall provide guidance on the Clearing House’s risk management policies andpractices relating to Base Products, including reviewing such policies and practices at least on anannual basis and shall review and approve any new risk frameworks and substantive changes toexisting risk frameworks associated with Base Products and recommend such changes to theClearing House Oversight Committee for approval.

The CHRC shall review and approve all new financial institutions to serve in the role of asettlement bank or a collateral custodian for the Clearing House and recommend their approval tothe Clearing House Oversight Committee.

Clearing Membership

Clearing House management shall present all applications for Base Clearing Members to theCHRC for risk-based feedback and such feedback, if any, shall be communicated to the Clearing
House Oversight Committee in connection with its review of such applicant for approval as aBase Clearing Member.

The CHRC shall review any changes to the Clearing Membership requirements and new types ofclearing membership and shall approve all substantive changes and recommend them to theClearing House Oversight Committee for its approval.

Disciplinary Matters


The CHRC shall enforce the provisions of the Exchanges’ Rulebooks pertaining to the financial
integrity of the Clearing Members and by any member who is an officer or a principal or who has
assigned his membership on behalf of a Clearing Member, in connection with such Clearing3Member's activities, except insofar as jurisdiction over matters relating to conduct, trading
practices, trading ethics and certain sales practices of members, and market manipulations orother actions that threaten the integrity of the market are within the purview of the BusinessConduct Committee. Notwithstanding the foregoing, the jurisdiction of the CHRC shall not extend
to IRS Products or IRS Clearing Members in such capacity when clearing solely IRS Products.
The CHRC may conduct investigations, issue charges and consider offers of settlement on its
own initiative or by referral from management or the Business Conduct Committee.

GeneralIV.

The Committee will undertake the specific responsibilities listed in this Charter and suchother matters as contemplated by the Exchanges’ Rulebooks, policies of the Clearing
House or as the Board or the Clearing House Oversight Committee may from time to timeprescribe.
Reporting Activities

One of the Chairperson(s) or his delegate who is also a member of the CME Board, on behalf ofthe Committee, shall make verbal reports to the Board on recent activities of the CHRC.

The CHRC shall prepare and adopt a written annual report to the Board summarizing the key
activities, conclusions and recommendations of the CHRC during the previous year.

The CHRC shall reassess the adequacy of this Charter no less frequently than annually andsubmit any recommended changes to the Clearing House Oversight Committee who will thenrecommend the revised Charter to the full Board for approval.

The Committee shall evaluate its performance on an annual basis and establish criteria for such
evaluation. The Committee shall report to the Board regarding the results of its evaluation andprovide copies of written evaluations, if any, to the full Board.

V.

Confidentiality
VI.

The CHRC and its members shall be responsible for preserving confidential information obtainedin performance of the CHRC’s activities. Each Member of the CHRC shall agree in writing that hewill not publish, divulge, or make known in any manner, any facts or information regarding thebusiness of any person or entity or any other information which may come to his attention in his
official capacity as a member of the CHRC. No person may serve on the Committee until such
writing is received by CME.
Conflicts of Interest

VII.

Each CHRC member shall disclose the existence of any conflicts of interest to the Chairperson(s)or the meeting secretary at the beginning of each meeting or upon being aware of a conflict
during a meeting and such disclosure shall be recorded. A member shall recuse himself or
herself, as appropriate, from consideration of matters on which he or she is conflicted.
Indemnification

Members of the CHRC are entitled to indemnification from CME as provided in the CME Bylaws
and in accordance with Delaware law.

Established 2000
Approved by the Clearing House Risk Committee: March 14, 2024
Approved by the Clearing House Oversight Committee: April 3, 2024
Approved by the Board of Directors: May 8, 20244