VOLUME 22 - BULLETIN #150

IMPORTANT REMINDER

Firms are reminded that changes in their futures open interest from exercise and assignment processing on Saturday, July 27, 2002 must be reported on Monday, July 29, 2002.

For example, if a firm is short a call option in Treasury Bonds and is assigned during the expiration processing on Saturday, the short Treasury Bond futures position that resulted from the assignment must be correctly reflected as either an opening or an offsetting position to the firm's open interest. Generally, expiration transactions resulting from Saturday’s Option Expiration are not processed in firms' bookkeeping systems until Monday evening. In these instances, firms are required to manually adjust their open interest. In the past, some firms have neglected to manually adjust futures open interest prior to the Monday morning reporting deadline. This has resulted in the public dissemination of inaccurate open interest data. As you are aware, open interest can be a significant factor in the decision to execute trades on the exchange floor by market participants. For this reason, the importance of accurate, reliable and timely open interest reporting by clearing members cannot be overemphasized.

Firms are reminded that changes to open interest resulting from Saturday’s Option Expiration processing must be correctly reported prior to the Monday morning open interest reporting deadline. Firms can make adjustments to their open interest on OTIS prior to 6:45 a.m. for Financial contracts, and prior to 7:45 a.m. for Agricultural contracts. Failure to accurately report open interest is considered a serious violation and will result in a fine.

Should you have any questions, please contact Business Controls and Proofing at (312) 786-5745.