VOLUME 28 – BULLETIN #039

TO:	ALL CLEARING PARTICIPANT
FROM:	CLIENT SERVICES AND SUPPORT
DATE:	June 6, 2008
SUBJECT:	Expiration Processing and Open Interest Reporting

Clearing participants are reminded that changes to open interest resulting from Chicago Climate Future Exchange’s Option Expiration processing must be correctly reported prior to next business day’s 10:00 a.m. open interest reporting deadline. Clearing participants can make these adjustments using The Clearing Corporation’s Position Management application. Following is the schedule of CCFE option contracts that are set to expire this May:

For example, if a clearing participant is short a call option and this position is assigned during expiration processing, the short Carbon Financial futures position that resulted from the assignment must be correctly reflected in the participant’s open interest reported to TCC as either an opening or an offsetting position on the last trading day of the expiring option contract. Generally, expiration transactions resulting from Option Expiration are not processed in a clearing participant's bookkeeping systems until the following business day. In these instances, clearing participants are required to manually adjust their open interest prior to the next business day’s 10:00 a.m. open interest reporting deadline through use of TCC’s Position Management application. In the past, some clearing participants that received a futures position due to an option assignment, have neglected to manually adjust their futures open interest prior to next business day’s deadline and this failure to make appropriate adjustments has resulted in the dissemination of inaccurate open interest data. As you are aware, open interest can be a significant factor in the decision to execute trades by a market clearing participant, therefore, the importance of accurate, reliable and timely open interest reporting by clearing participants cannot be overemphasized.

Should you have any questions, please call or e-mail one of the following Client Services and Support Representatives: