Revisions to Rule 536 ("Recordkeeping Requirements for Pit, Globex and Negotiated Trades")

Pending all relevant regulatory review periods, effective on January 6, 2014, CME, CBOT, NYMEX and COMEX will adopt revisions to Sections G. ("Floor Recordings") and H. ("Retention of Records") of Rule 536 ("Recordkeeping Requirements for Pit, Globex and Negotiated Trades").  The revisions are the result of recent changes to recording requirements placed on members, member firms and employees of the foregoing on the New York and Chicago trading floors.  Detailed information concerning the recording changes was set forth in CME Group Special Executive Report S-6957 ("S-6957") issued on December 11, 2013, which may be accessed via the following link:

http://www.cmegroup.com/tools-information/lookups/advisories/market-regulation/SER-6957.html

S-6957 informed the marketplace that the Exchanges would no longer offer voice recording services for any Exchange-installed telephones located in booths on the trading floors in Chicago and New York as of December 21, 2013.  That report also indicated that the Exchanges would continue to require Exchange-issued telephonic devices used in and around the trading pits to be recorded; however the report also indicated that the retention period for such recordings would be extended to one year.

The revisions are shown below, with additions underscored and deletions overstruck.

CME/CBOT

536.G.    Telephone Recordings

Members and member firms that record conversations conducted on their Exchange Floor telephone lines must maintain the  resultant recordings for a period of 10 business days following the day when such recordings are made.

Unless specifically exempted by the Market Regulation Department or designated Exchange staff, all headset communications used in and around trading pits on the trading floor must be voice recorded by the member or member firm authorized to use the headset and all such recordings must be maintained for a minimum of 10 business days following the day on which the recording is made.  Members and member firms are permitted to utilize their own recording devices, provided that the devices meet reasonable standards with respect to quality and reliability.  Alternatively, members and member firms may utilize an Exchange administered voice recording system for a fee.

536.H.    Retention of Records

Each member and member firm and employees of the foregoing must keep full, complete and systematic records, including records created or transmitted electronically, together with all pertinent data and memoranda, of all transactions relating to its business of dealing in commodity interests and related cash or forward transactionsfutures, options and cash transactions in accordance with CFTC Regulation 1.35.  Written and electronic Such records must be retained for a minimum of five years in permanent form.  Oral communications required to be recorded pursuant to CFTC Regulation 1.35(a) must be retained for a minimum of one year past the date on which the oral communication occurred.  Oral communications recorded by the Exchange pursuant to Section G. will be maintained by the Exchange for a minimum of one year past the date on which the oral communication occurred.

All records required to be retained, and shall at all times be open to inspection by Exchange staff or any representative of the CFTC or the United States Department of Justice.

NYMEX/COMEX

536.G.    Telephone Recordings

Unless specifically exempted by the Market Regulation Department or designated Exchange staff, all headset communications used in and around trading pits on the trading floor must be voice recorded by the Exchange for a fee.  

Members and member firms must enter into a trading floor telephone subscriber agreement with the Exchange under which the subscriber agrees to pay the Exchange to record and archive all conversations conducted on their Exchange Floor telephone lines which will be maintained for a minimum period of 10 business days following the day when such recordings are made.

536.H.    Retention of Records

Each member and member firm and employees of the foregoing must keep full, complete and systematic records, including records created or transmitted electronically, together with all pertinent data and memoranda, of all transactions relating to its business of dealing in commodity interests and related cash or forward transactionsfutures, options and cash transactions in accordance with CFTC Regulation 1.35.  Written and electronic Such records must be retained for a minimum of five years in permanent form.  Oral communications required to be recorded pursuant to CFTC Regulation 1.35(a) must be retained for a minimum of one year past the date on which the oral communication occurred.  Oral communications recorded by the Exchange pursuant to Section G. will be maintained by the Exchange for a minimum of one year past the date on which the oral communication occurred.

All records required to be retained, and shall at all times be open to inspection by Exchange staff or any representative of the CFTC or the United States Department of Justice.

If you have any questions concerning these revisions, please contact the Market Regulation Department at 312.341.7970.

For media inquiries concerning this Special Executive Report, please contact CME Group Corporate Communications at 312.930.3434 or news@cmegroup.com.