The Division found that CME has adequate programs and systems in place to monitor OneChicago’s markets. With respect to market surveillance, CME routinely monitors prices, volume, open interest, and market news to augment analyses of market activity and contract expirations. In addition, exchange of futures for physicals transactions are routinely reviewed for compliance with the Exchange’s requirements.
The Division also found that OneChicago maintains adequate audit trail and trade practice surveillance programs. A complete electronic record of all entries into the OneChicago System trading host is maintained, allowing CME to efficiently and effectively reconstruct trading. CME reviews computerized exception reports and other reports on a daily basis to monitor for potential trading violations, and conducts ad-hoc queries of trading data on its electronic surveillance system. In addition, CME has developed an automated alert system to monitor for potential insider trading violations involving security futures products. The CME closed 20 inquiries relating to OneChicago trading activity during the target period, and the Division found that all were thorough, well documented and completed in a timely manner.
Lastly, the Division reviewed OneChicago’s disciplinary and dispute resolution programs. However, because no matters were referred to OneChicago’s disciplinary committees, and no arbitration proceedings were held during the target period, the Division was unable to evaluate fully the adequacy of those programs at this time.
Copies of the Division’s report are available from the Commission’s Office of External Affairs, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5080, or by accessing the Commission’s website at: www.cftc.gov.
