CME Clearing Enhances Member Risk Controls and User Rules
Published Date: 7/23/2026
Notice
Summary
CME Securities Clearing is updating its rules to help members better manage risks and control who can act on their behalf. These changes make it easier to handle problem users and speed up closing out their positions if needed. The updates start soon and aim to keep the market safer without extra costs for members.
Analyzed Economic Effects
4 provisions identified: 2 benefits, 2 costs, 0 mixed.
Members Can Immediately Take Over User Positions
CMESC adopted a new Rule 316 that lets an authorizing Member immediately assume an authorized User's positions and transfer associated initial margin or other funds to the Member's account if the User is subject to a termination event and neither the Member nor the User is in Default to CMESC. The Member's request to CMESC is treated as an immediate termination of the Authorization Agreement (so the prior ten Business Days' advance notice is no longer required in this situation).
Member Claims on User Margin Recognized Under NY UCC
For Supported Users, CMESC will treat each Supported User Account as a securities account under the New York Uniform Commercial Code (NY UCC) and will recognize the authorizing Member as the entitlement holder who may receive any excess margin after CMESC's first-priority claim is satisfied. For Independent Users, CMESC adopted new Rule 317 to permit an Independent User to grant its authorizing Member a second-priority security interest in initial margin or other funds credited to the Independent User Account, subject to minimum terms that preserve CMESC's first-priority claim.
Members May Participate in User Default Close-Outs
CMESC revised Rules 405 and 1507 to require CMESC to promptly notify each authorizing Member of a Defaulting User and to give the Member an opportunity to participate in the close-out (liquidation or termination) of the Defaulting User's positions; the Member must respond within the time CMESC prescribes or be deemed to decline, and CMESC will promptly liquidate positions if the Member declines. The Member's obligation under Rule 406(b)(iii) to cover any losses that exceed the Defaulting User's initial margin and other assets remains in effect.
Members Must Indemnify CMESC; CMESC Has No Transfer Liability
Under the new rules, when a Member requests transfers or submits transactions for an authorized User (including under Rule 316 or the amended Rule 602), the Member is deemed to represent it has authority to act and must indemnify CMESC and its affiliates against any losses, claims, or expenses arising from disputes with the User. Proposed Rule 316(e) also states CMESC has no liability to the Member or User for losses or costs from transfers made under that rule.
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