EFRP - Reporting and Recordkeeping

Submitting EFRPs to the CME Clearing House

Exchange for Related Positions (EFRP) must be submitted to CME Clearing via CME Direct or CME ClearPort.

An EFRP transaction submitted to CME Clearing is not considered to have been accepted until the transaction has cleared and the first payment of settlement variation and performance bond has been confirmed.

Remember that the date and time of execution must be accurately submitted for each EFRP transaction, in the local time of the party(ies) entering the EFRP.

How Long Do I Have to Submit an EFRP for Clearing?

EFRP transactions should be submitted to the exchange as soon as possible following agreement to the relevant terms by the parties to the trade. The Market Regulation Department expects submission to occur the same day that the EFRP is executed, absent extenuating circumstances.

The relevant terms of the EFRP are considered to have been determined at the time the price and quantity of the exchange contract and the corresponding related position component of the transaction are agreed upon by the parties to the EFRP. However, where the actual delivery quantity may not be precisely determined by the parties until the time of delivery, the parties may contractually agree to submit the transaction to CME Clearing within the required reporting period following the time at which the actual delivery quantities are determined, rather than reporting the EFRP at the time of pricing. Absent such contractual arrangement, the transaction must be reported at the time of pricing.

Notwithstanding any of the foregoing, EFRPs may not under any circumstances be submitted for clearing later than the end of the permissible posting period that follows the expiration of the futures contract. These times are specified in the relevant product chapters of the applicable exchange rulebook.

Recordkeeping

Parties to an EFRP transaction must maintain all records relevant to the exchange contract and the related position transaction. Some of the required record include:

• Order tickets
• Records reflecting payments between the parties
• Transfer of title (where appropriate)
• Records customarily generated in accordance with relevant market practices
• Any other records required to be kept pursuant to CFTC Regulations

Upon request, such records must be provided to Market Regulation in a timely manner. It is the carrying clearing member firm’s responsibility to obtain and submit the requested records of their clients to the exchange on a timely basis.

In addition, parties who facilitate EFRP transactions must maintain all records corresponding to their facilitation of the transactions.

Responsibilities of Firms

Firms that execute or clear EFRPs on behalf of customers are responsible for ensuring that their customers are fully informed regarding exchange EFRP requirements. Upon request by the Market Regulation Department, firms carrying accounts that execute EFRPs are responsible for obtaining and submitting records of their clients’ EFRP transactions in a timely and complete manner.

Further, firms that execute or clear EFRPs on behalf of customers should exercise due diligence in identifying circumstances in which a customer’s EFRP transactions may be non-bona fide.

This is part of a course on EFRPs. For official regulatory guidance on EFRPs, reference the applicable Market Regulation Advisory Notice.