The Futures Industry Association has asked the Chicago Board of Trade and the Chicago Mercantile Exchange to provide further information on the recently announced agreement to form "a common clearing link" between the two exchanges.
"We need more information about the exchanges' plans before clearing members can assess the implications of this proposal," says FIA president John Damgard. "Presently, the details are not available and have not been discussed with the clearing members of both exchanges."
He says that futures commission merchants will need to consider the business repercussions of the Cbot's decision to terminate its relationship with the Board of Trade Clearing Corporation, the membership and clearing rules of the new clearinghouse they will be required to join, and the terms of the linkage between the new CBOT clearinghouse and the CME.
These issues could affect the financial requirements for both clearing firms and their customers to trade futures in the US says Damgard.
The FIA intends to hold a meeting with its FCM members to assess the proposal and has asked representatives of the exchanges to attend the meeting. It is calling on the CME and Cbot to include clearing members in planning meeetings for the proposed link.
The FIA's regular membership consists of 40 clearing firms who collectively provide the majority of capital that supports the clearing process at US exchanges. At the end of 2002, clearing firms had $27.4 billion in margin assets deposited at the CME Clearing House and $4.7 billion at the BOTCC.