According to their functions, CME Market Supervision Department is divided into six groups: violation investigation, market compliance, law enforcement, data verification, legal education consultation, strategic development and technological innovation.
CME was founded in 1898, formerly known as Chicago Butter and Egg Exchange. It used to be the largest futures market in the United States and the second largest futures and futures options exchange in the world. In July 2007, the Chicago Board of Trade (CBOT) and CME announced the completion of the merger, and the new exchange after the merger was named Chicago Mercantile Exchange Group. As the largest futures and options exchange in the world, Chicago Mercantile Exchange Group occupies 95% market share in the United States and 40% market share in the world. At present, CME Group has four trading centers: CME, NYMEX, CBOT and the New York Mercantile Exchange. 20 12, 10 In June, the Chicago Mercantile Exchange Group signed a definite agreement and announced that it would acquire the Kansas Futures Exchange (KCBT). The huge market needs a corresponding regulatory system. According to the provisions of the Commodity Exchange Law of the United States, the exchange shall formulate and implement relevant rules to specify (or define in detail through detailed rules) the operation mode of the transaction execution facilities provided by the exchange, including the rules or detailed rules of the operation mode of any electronic matching platform, and ensure the financial integrity of the transactions reached by or through the contract market facilities, including the clearing and settlement of transactions with derivatives clearing organizations.
Organizational structure of supervision department of continuing medical education
CME Market Supervision Department is subordinate to Legal Supervision Department. The legal supervision department also includes the legal department and other functional departments, such as the member department, which is responsible for managing members and keeping their historical records. In addition, some groups serve the board of directors. The legal supervision department reports to the chairman of the exchange through the board of directors. Although the market supervision department is a part of the legal supervision department, in a sense, it is semi-autonomous and independent, because it should be influenced as little as possible by members, executives, board of directors and so on. The government requires the supervision department of the exchange to be independent, and the market supervision department of CME must report to the supervision Committee under the board of directors.
1.The work and functions of CME market supervision
In 20 12 years, there were 150 employees in the market supervision department of Chicago mercantile exchange group, and there were about 50 employees in each of the three exchanges under the group, namely CME, CBOT and NYMEX. CME Market Supervision Department operates horizontally, which is divided into two modules: violation investigation and market compliance. From a microscopic point of view, violation investigation focuses on the trading process and identifies behaviors that violate trading rules, such as dishwashing transactions and false declarations. From a macro perspective, market compliance focuses on positions, position restrictions, position reports and price changes, aiming at discovering market manipulation behaviors such as hoarding and forced positions.
According to their functions, CME Market Supervision Department is divided into six groups: violation investigation, market compliance, law enforcement, data verification, legal education consultation, strategic development and technological innovation.
2.2 the operation process. CME market supervision department
After the market supervision department investigates the violations or the market compliance team finds that there may be violations, it forms a preliminary investigation report, which is submitted to the preliminary examination Committee after the data verification team confirms the facts. If, after the trial, the preliminary examination committee thinks that there has been any violation, it will submit the corresponding accusation memorandum to the Commercial Committee, and the Commercial Committee will make a ruling on whether to punish the accused members or non-member market participants. If the preliminary examination committee considers that it does not constitute an offence, it may not take any action, or it may request the market supervision department to continue the investigation. The market supervision department may appeal to the Appeal Committee if it thinks that it is improper for the preliminary examination committee to take no action as a result of deliberation, or if the Commercial Committee finally decides that it is improper.
Supervision rules of continuing medical education
At present, the Chicago Mercantile Exchange Group consists of the Chicago Mercantile Exchange, CBOT, the New York Mercantile Exchange and the New York Mercantile Exchange. Although it has been merged into a group, each exchange still has an independent self-regulatory body (SRO) with its own different rules. In order to provide a common rule framework for market participants, the three exchanges have greatly revised the rules in terms of the structure, sentences and numbers of the rules manual to maintain coordination and unity.
The rules of CME are mainly divided into two parts: the first part is the definition of company registration certificate, articles of association and some professional terms; The second part is the specific rulebook. The first chapter of the rulebook is general rules, including trading and settlement rules. The next seven chapters are classified according to the varieties listed in CME, namely, agricultural products, currency, equity and index, interest rate, securities and futures products, credit default swaps and contract rules of interest rate products. The supervision system of CME is mainly embodied in the general rules, which clearly stipulates the membership, the management organization of the exchange, the trading qualification and management, the implementation of rules, arbitration and so on.
1. member
CME membership includes full members of CME, international money market, index and options market and emerging markets. The rules stipulate the procedures for the sale and transfer of member seats; Rights and responsibilities of members; Involuntary sales and other terms. CME's supervision of members is mainly based on the following two aspects:
First, abide by the Commodity Exchange Act (CEA) of the United States: all members of the exchange must abide by the provisions of CEA and the relevant rules and management measures promulgated by CFTC in accordance with the provisions of the Act, including submitting reports, keeping books and records, and accepting investigations and visits by formally authorized representatives of CFTC.
Second, violation of the United States Commodity Exchange Act (CEA): when a member violates the provisions of CEA and receives the final notice issued by CFTC according to CEA, the relevant departments of the exchange shall take necessary actions to implement CFTC's instructions and report to the board of directors.
At present, the members of China's futures market are divided into futures company members and non-futures company members, and the rules stipulate membership, membership change and supervision and management. Members who violate the regulations will be dealt with in accordance with relevant rules.
2. Exchange governance
CME stipulates the powers and responsibilities of the board of directors in the rules. In terms of supervision, the board of directors of the exchange must obey the provisions stipulated in the articles of association.
First, exercise the right of adjudication at the hearing of allegations against members, and decide the disciplinary action to be taken against the allegations after the hearing.
Second, formulate and revise the rules of the exchange, provided that the board of directors has also authorized the chairman, vice chairman and CEO to jointly formulate and revise the rules of the exchange.
Third, we have the right to take action when dealing with emergencies.
3. Trading qualifications and rules
CME stipulated the right of admission, trading qualification, management method and trading practice in the rules, made a clear definition of what constitutes trading violation, and explained various specific violations in trading practice. In addition, the rules also stipulate the exemption conditions of hedging and arbitrage, the bulk declaration system and the rules of electronic trading system Globex.
All exchange members must abide by the rules of the exchange and register in accordance with the relevant provisions of CFTC. Once the information changes, it must be reported as required and immediately notified to the shareholder relations and member service department of the exchange.
4. Rule implementation
The Board of Directors of the Chicago Mercantile Exchange often revises and supplements the existing rules to establish an open and free market, safeguard legitimate business practices, and provide protection for the public in their transactions with the Exchange and its members. In addition, the Board of Directors has set up a committee to investigate, hear and punish violations of the rules of the Exchange. The board of directors will also entrust the relevant departments of the exchange to investigate and punish violations of the exchange rules.
(1) director
Responsible for the implementation of exchange rules. You can always get the resources of the market supervision department and other exchange resources that may be needed to investigate suspected violations and the market environment. The chief supervisor can also delegate this power to the relevant personnel of the market supervision department.
(2) Business Conduct Committee
Having jurisdiction over members' conduct, trading behavior, business practices, trading ethics and other behaviors that manipulate the market or endanger the integrity of the exchange; The power to take measures in an emergency; Power to take action against non-members; The right to hold a hearing on access measures; The power to hold hearings, lawsuits and appeals on any matter within its jurisdiction; Have the right to investigate violations of members and non-members.
(3) The Committee of First Instance
When the market supervision department has reason to believe that there are violations, the preliminary examination committee is responsible for receiving and reviewing the investigation reports of relevant cases. When the market supervision department requests to file a complaint, it may not inform the preliminary examination Committee of its intention. The preliminary examination committee has the right to order any member to attend and provide all books and records related to the investigation, and to review the investigation report submitted by the market supervision department within 30 days as far as possible.
(4) hearing
All disciplinary proceedings conducted by the business conduct committee of the board of directors and the special panel of the hearing committee shall be conducted in accordance with the designated procedures.
(5) Appeal
The market supervision department may appeal to the hearing committee on the final resolution or sanction of the Business Conduct Committee or the refusal of the Committee to charge fees according to regulations. After the market supervision department appeals, the relevant resolution will be suspended, unless the chairman of the board of directors or the chairman of the special panel of the Business Conduct Committee indicates that the resolution will not be suspended during the appeal period.
The measures for handling violations in the Rules of China Futures Market do not involve specific procedures such as filing an investigation and transferring. The relevant provisions are embodied in the Measures for Investigating Violations of Shanghai Futures Exchange, which are divided into filing an investigation, transferring and receiving, hearing a case, serving and executing, and filing a case for reconsideration.
5. Arbitration
CFTC stipulates that American exchanges must have a mechanism for arbitration and mediation of disputes. Therefore, CME stipulates in its rules the procedures and rules for members to conduct compulsory arbitration on designated disputes related to the exchange.
(1) filing procedure
Initiate arbitration request: During the period when the claim can be arbitrated, the plaintiff can start the procedure by submitting a written dispute statement, filling in the arbitration data form and paying the appropriate arbitration fee to the market supervision department. The market supervision department may reject any claim that cannot fully describe the dispute, or any request made after the deadline for applying for arbitration, or any request that cannot be arbitrated in the exchange.
Respond to the arbitration request: All defendants shall submit a written reply within 2 1 day after receiving the written request. Unless one party to the arbitration challenges the arbitrability of the dispute in time, it shall give a reply within 2 1 day after receiving the written notice confirming the arbitrability of the dispute.
(2) hearing
The market supervision department selects arbitrators from the Arbitration Committee of the Exchange to form an arbitration tribunal to hear disputes and make a ruling.
(3) Ruling
The arbitration tribunal shall issue a written resolution signed by the chairman of the arbitration tribunal and the majority of its members after the hearing, or after the customer has filed a claim of no more than US$ 5,000 and relevant materials. The arbitration tribunal may decide any disputed matter and issue any order it deems necessary to settle the dispute.
(4) Appeal
If the settlement of disputes between members leads to non-cash awards, or claims, counterclaims, cross claims or third-party claims involving compensation totaling more than $65,438+00000, you can appeal to the hearing committee of the board of directors on this resolution. Other awards of the arbitral tribunal are final and cannot be appealed. If you need to appeal, you must submit a written document to the market supervision department within three working days after receiving the notice of the resolution, explain the reasons for the appeal and pay the fee.
Enlightenment and suggestions
First, dig deep into the operating rules of products and investigate and deal with market violations. In the two teams of CME Market Supervision Department responsible for finding and investigating cases-violation investigation team and market compliance team, the proportion of personnel engaged in analysis work reaches two-thirds. These people have long-term experience in tracking specific varieties. By collecting market fundamental data, they cultivate their intuition about market changes and find irregularities such as manipulation.
Second, strengthen compliance warning education and cultivate investors' good trading habits. Strengthen the publicity and explanation of the rules and supervision system, and try to remind and warn investors before they violate the rules to protect the healthy development of the market.