GUIDANCE. ICE Futures Europe Policy on the Processing of Contras, Position Transfers, and Error Corrections

Transcription

1 GUIDANCE ICE Futures Europe Policy on the Processing of Contras, Position Transfers, and Error Corrections October 2007 Copyright Intercontinental Exchange, Inc All Rights Reserved.

2 ICE Futures Europe Policy on the Processing of Contras, Position Transfers, and Error Corrections This Guidance replaces and updates earlier Guidance on the processing of contra trades, position transfers and error corrections via the Trade Registration System ( TRS ) issued in Circular 05/47 G03 dated 7 April For the purposes of this Guidance the term contra will mean: a) a trade to effectively correct a missed allocation where the trade is held in the d account of the originating Member, or b) a trade to correct an allocation made by one Member and accepted by the receiving Member in error; or c) a trade to correct an EFP or EFS trade processing error. All trades are entered with the company mnemonic. 1. Contra Trades Members may request the registration of a contra trade by submitting a Contra Request Form, completed by a member of staff authorised to request the registration of a contra on behalf of the Member, to ICE Futures Europe Market Supervision either by to Marketsupervision-Europe@theice.com or by fax to +44 (0) Members are reminded that contras are subject to certain criteria. The Exchange deals with requests for contras in the following way: (i) (ii) contras identified on trade day + 1 will be entered into TRS at the original trade price; contras identified on trade day + 2 or later will be entered into TRS at: (a) the previous night s settlement; or (b) the original trade price upon request of the Member and subject to acceptance by the Clearing House. Members are requested to forward the Contra Request Forms as early as possible to the ICE Futures Europe Market Supervision staff to ensure timely entry of the details to TRS. ICE Futures Europe Market Supervision staff enter all Contras via ICEBlock, a facility which enables Members to view all Contras entered on WebICE. Contras flow from WebICE to TRS, for normal processing using the following trade types within the electronic trading environment on TRS (see point 1.1 below): Y Cross contra; and, F EFP/EFS contra. All Contras entered will appear in TRS with a trade status of UR, and it is the Member s responsibility to assign the trade to an account or allocate the trade to another Member as appropriate. ICE Futures Europe October 2007 Page 2

3 1.1 Trading Environment The TRS trading environment indicator is not visible on the usual TRS enquiry screens but Members may search on TRS in either environment by entering: EN=E for electronic environment; or EN=F for floor environment. Members wishing to search for EFP/EFS contras on TRS should use EN=E to direct the search to the correct TRS trading environment for contras. Point 2.1 advises that position transfers are also entered as F trade types, however, they are within the TRS floor environment. 2. Position Transfers To facilitate client account management by Clearing Members, position transfers between Clearing Members of the Exchange are permitted at any time providing the client account at the transferee (receiving Member) and the client account at the transferor (transferring Member) is the same client entity. A position transfer is affected by the input of a trade which closes the position with the transferor and opens the position with the transferee. The price at which positions are transferred is the previous night s settlement price. However it is possible, upon request, to transfer a position at the original trade price or at a price within the high and low of the day on which the positions transfers are requested. The attached ICE Futures Europe Position Transfer Request Form must be submitted by both the transferor Member and the transferee Member to ICE Futures Europe Market Supervision staff either by to Marketsupervison-Europe@theice.com or by fax to +44 (0) ICE Futures Europe Market Supervision staff will review the requests to confirm that details match (client name, contract, month, lots and price) and that the price is within the permitted range before entering the transfers to TRS. Requests for position transfers may be submitted at any time during Market hours for the contract month up until one hour before the expiry of the relevant contract month on the last day of trading. When reviewing position transfers the ICE Futures Europe Market Supervision staff may seek further explanations or supporting documentation from Members in order to confirm their understanding of the nature of the transaction. However, processing of a position transfer will not preclude the Exchange from instigating disciplinary proceedings in the event that it transpires that the position transfer may have been in contravention of applicable Exchange Regulations or Guidance. 2.1 Trading Environment Position transfers are processed as floor environment trades within TRS and are assigned a trade type of F. Members are able to distinguish these from EFP/EFS contra trades on TRS which are also processed as trade type F, because all EFP/EFS contras are processed in the electronic environment through ICEBlock. The TRS environment indicator is not visible on the usual TRS enquiry screens but Members may search on TRS for position transfers in the floor environment by entering EN=F as part of the enquiry with the applicable client account code. ICE Futures Europe October 2007 Page 3

4 3. Error Corrections The Error Correction Facility and the circumstances in which an error correction may be submitted are described in detail in ICE Futures Europe Trading Procedure 8.5. The Error Correction Facility provides an authorisation process for trades to correct certain trading/order handling errors related to client business only (not proprietary trading). Details of the error and related order together with the requested error correction must be ed to Marketsupervison- or faxed to ICE Futures Europe Market Supervision on +44 (0) on the declaration form attached. When authorised, ICE Futures Europe staff will enter the error correction into TRS. When reviewing error correction requests, the Exchange may seek further explanations or supporting documentation from Members in order to confirm the nature of the error, the events which gave rise to it and related actions by Member staff. However Exchange authorisation of an error correction request will not preclude it from instigating disciplinary proceedings in the event that it transpires that the error correction trade may have been in contravention of applicable Exchange Regulations or Guidance. 3.1 Trading Environment The Exchange processes error corrections within the floor trading environment on TRS as a trade type X. Members may distinguish these from cross trades on TRS which are also processed as trade type X, because all cross trades are processed in the electronic environment within TRS. Members will be able to search for error corrections in TRS in the floor environment as explained in point 2.1 above for position transfers using EN=F. 4. Table of the relevant codes and trading environments Trade type Trade environment E = Electronic F = Floor Search Cross contra Y E EN=E EFP/EFS contra F E EN=E Position transfers F F EN=F Error corrections X F EN=F Crosses X E EN=E Any questions arising from this Guidance should be addressed to: Danny Pinder or Sarah Roy, ICE Futures Europe Market Supervision on +44 (0) or danny.pinder@theice.com, sarah.roy@theice.com. ICE Futures Europe October 2007 Page 4

5 ICE Futures Europe Position Transfer Request Transferor Member Transferee Member (Please tick one box only) Fao: ICE Futures Europe Tel: +44 (0) Fax: +44 (0) Name: Telephone: Member: Please process the following position transfer at the price indicated: Client Name: Account Ref: From (mne): N* S** To (mne): N* **S Contract Month Lots Bought /Sold Price Signed: Date: Print name: *N = Non Segregated **S = Segregated

6 ERROR CORRECTION DECLARATION FORM Date of Error Member Name and Mnemonic Time Error Detected Trader Mnemonic Nature of Error Buy/Sell Contract Month & Year Exercise Price & call or put Price Volume Time Order Slip Number Trader Mnemonic Contract Month & Year Exercise Price & call or put Price Volume Client Order Details Error Correction Request Trade (if applicable) I confirm that I am an authorised signatory of the aforementioned Member for the purpose of making this declaration in respect of the error correction facility. The cross trade will be a house/client cross. Any improvement has been or will be offered in full to the client. Where applicable, the appropriate client consent has been obtained. The above information is correct and the requirements of the relevant ICE Futures Europe Trading Procedures have been met. Amount of improvement waived/loss accepted by Client Signature: Print Name: Member s Fax No Please either this form to marketsupervision-europe@theice.com or fax it to ICE Futures Europe on +44 (0) If there is a problem in sending this fax then please contact Market Supervision on +44 (0) FOR EXCHANGE USE ONLY Time Current market price/settlement price Total improvement/loss Exchange Official Signature Print Name The signing of this declaration by an Exchange Official allows the error correction to be entered into TRS. It does not preclude the taking of disciplinary action should further investigation reveal breaches of ICE Futures Europe Regulations.