q1

What are the qualifications for membership in the Exchange?

a1

Any adult of good moral character, reputation and business integrity, with adequate financial resources and credit to assume the responsibilities and privileges of membership, is eligible for election to membership in CME.

Applications are available in the Membership Department located on the Upper Lobby Level. Applications available on this Web site can be completed, printed and submitted to the Membership Department. Completed applications are filed in the Membership Department, where the approval process begins.

q2

How do I acquire a membership?

a2

You can acquire a CME membership through: purchase, family transfer, lease, gift or bequest, or through firm transfer.

A brief explanantion of each membership acquisition follows. For more details, consult the CME Rulebook.

Purchase/Sale: Memberships in CME, and the associated Class B share in CME Holdings are purchased and sold through the auction market conducted by the Membership Department.

Rule 106.C. FAMILY TRANSFER: Exchange members may temporarily transfer trading rights associated with their membership to a member of their immediate family, who shall be subject to all CME rules and regulations. Immediate family members include: mother, father, siblings, children, grandchildren and spouse.

Rule 106.D. TRANSFER: Exchange members may temporarily transfer their membership to another person, who shall be subject to all Exchange rules and regulations. Members who are leasing pursuant to Rule 106.D may trade only for their own accounts during their first year of membership.

The Membership Department maintains a list of current members who have advised CME that they wish to lease their memberships.

Rule 106.E. GIFT OR BEQUEST: An Exchange member may make a bona fide gift or bequest a membership. This rule transfers ownership from the member to the recipient. Bequests require a letter affirming the gift or an order from the Probate Court allowing the bequest.

Rule 106.F. CLEARING MEMBER TRANSFERS: The trading rights associated with a membership owned by a clearing member or a principal having a proprietary interest in the clearing member may be transferred to a member.

q3

How do I apply for membership?

a3

You must submit an application for membership, which includes questions on your educational, employment, residential and disciplinary history. The application form must be typewritten, filed with a $1,750 non-refundable fee, and include two 2" x 2" passport-quality color photographs and either a certified birth certificate or passport.

Your name will be sent to all CME members, and your photograph will be posted on the trading floor. During this posting period, members are encouraged to notify the Membership Department if they have any pertinent information about you.

Additionally, the NFA must grant you a registration as either a floor broker or a floor trader, or a temporary license to act as such, before you can begin trading on the CME trading floor (does not apply to GLOBEX traders). You can log on to www.nfa.futures.org for registration, you will also need fingerprints. Fingerprinting can be done at the NFA office, 200 W. Madison, 14th floor, Chicago IL, 60606. 

q4

Are there financial requirements?

a4

There is no net worth requirement for applicants, including lessees; however, an applicant is required to complete the financial statement of assets, liabilities, and net worth contained within the application.

q5

What occurs once my application has been filed in the Membership Department?

a5

The application process takes about 2-4 weeks. Each application is posted in a membership circular entitled Special Executive Report - Membership Sales and Transfers published each Monday. The posting serves two functions: (1) It enables any member to comment on your qualifications, and (2) It enables the filing of any claims against the seller (or transferor) of the share/membership.

During the posting period, the Membership Department prepares a report on your qualifications. Membership Department staff and an independent investigation agency will interview you, verify the information provided in the application, and review your credit history. You also will be researched in the NFA database to see if any disciplinary actions have been taken against you by the Commodity Futures Trading Commission (CFTC), NFA, Securities and Exchange Commission (SEC), National Association of Securities Dealers, Inc. (NASD) or any futures exchange. In addition, the FBI database will be searched for possible criminal actions involving you.

You also must apply for registration as a floor broker or floor trader with the NFA (does not apply to GLOBEX traders). In addition, if you are a past CME member, we will review all previous applications and Market Regulation Department records for prior rule violations or disciplinary actions. If you are or have been a member of another exchange, we may request and review copies of your applications to those exchanges.

The Membership Department reviews all submitted information and meets with you to complete the application process. You should be prepared to fully discuss your application during the application process.

To be approved, you also must meet the qualifications set forth in CME Rule 101, requiring that you possess "good moral character, reputation and business integrity, with adequate financial resources and credit to assume the responsibilities and privileges of membership."

If you have completed the appropriate training requirements (described below), you may begin trading the day after your election to membership.

You have 30 calendar days after approval to membership to acquire a membership and associated Class B share by purchase or by transfer. If you fail to do this within the 30-day period, your election may be vacated.

q6

What is necessary before I can begin trading?

a6

In addition to a membership, the following is necessary before you can begin trading:

1. You must be qualified to trade by a clearing member before executing any trades on the trading floor. This means that the clearing member is responsible as principal to the Clearing House for all trades that you execute. An officer or partner of the clearing member must sign and file a written qualification with the Membership Department. With limited exception, traders and brokers must place all personal trades on the books of their qualifying clearing member.
2. You must be registered with the NFA as either a floor broker or floor trader, or have a temporary license to act as such.  This requirement does not apply to GLOBEX traders.
3. You must be issued a trading jacket provided by the Exchange, the member or the member's clearing firm.
4. You must be issued a trading badge that indicates who you are, what you can trade and who qualifies you. CME membership badges are gold, IMM membership badges are green, IOM badges are blue, and GEM badges are gray. The badge is worn on your trading jacket and displays a unique set of alpha characters that become your trading symbol or unique name on the trading floor. You may choose up to four alpha characters, of which the first three must be unique, when you order your badge from the Membership Department. You won’t receive your badge until your written qualification to trade is on file and you have completed the mandatory Floor Orientation Programs.
5. You must have a CME access card, which is a picture identification card. You must use this card for access to the trading floor and to walk through the security turnstiles outside the trading floor entrance. Access cards are processed in the Security Systems & Processing Department on the Seventh Floor, South Tower.

q7

Is there a mandatory educational program that I must attend to prepare for membership?

a7

Yes, there is a mandatory Floor Orientation Program, including a written examination, for everyone who intends to personally execute trades or execute orders for others on the trading floor.  These programs are approximately 18 hours (five days) of combined classroom and floor time.

The Floor Orientation examination consists of true/false, multiple choice, matching and fill-in-the blank questions. The best preparation for the examination is an understanding of the written material presented during the Floor Orientation Program. Knowledge of the rules in Chapters 4 and 5 of the CME Rulebook is also necessary. Approximately 90 percent of the applicants pass the exam, and those who fail must retake an alternate version of the exam as soon as possible. Applicants who fail the exam a second time must attend the orientation program again.

A detailed knowledge of contract specifications is important, i.e., the size of individual contracts (trading units), minimum price fluctuations, value changes per tick, position limits and daily price limits. This information will be provided in the Orientation Program.

Registration for Floor Orientation occurs at the time an application for membership is submitted. Other classes are offered through the CME Professional Development and Education Department at (312) 930-8268 or (312) 930-8533 or you can e-mail the staff at edu@cme.com.

q8

What are the requirements to become a floor broker?

a8

Rule 510 of the CME Rulebook (Requirements for Floor Brokers, Traders, Floor Employees of Members and Out-Trade Clerks) describes the requirements for floor brokers and floor traders.

If you intend to trade for accounts other than your own personal account, you must be registered as a floor broker with the CFTC. You can log on to www.nfa.futures.org for registration.

You must complete CME's Floor Orientation Program in addition to receiving a floor broker license from the NFA. This program educates floor brokers about Exchange rules and Commodity Exchange Act rules and regulations related to the filling of customer orders. You can contact the CME Professional Development and Education Department for more details at edu@cme.com or 312) 930-8268 or (312) 930-8533.