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CHICAGO MERCANTILE EXCHANGE, BOARD OF TRADE CLEARING CORP., AGREE ON COMMON BANKING AND SETTLEMENT

 CHICAGO MERCANTILE EXCHANGE, BOARD OF TRADE CLEARING CORP.,
 AGREE ON COMMON BANKING AND SETTLEMENT
 CHICAGO, Aug. 17 /PRNewswire/ -- Officials of the Chicago Mercantile Exchange (CME) and the Board of Trade Clearing Corp. (BOTCC) today announced the completion of an agreement providing for a common banking and settlement system designed to reduce the cost of doing business at the nation's two largest futures exchanges.
 The agreement was hailed by the chairmen of each organization as a milestone in their efforts to achieve common efficiencies and maximize transaction cost savings to common members at both the CME and the Chicago Board of Trade (CBOT). Firms that are members of the CME clear their trades through the CME Clearing House Division while members firms of the CBOT clear through the BOTCC, an independent corporation.
 CME Chairman John F. Sandner said: ''This agreement represents a quantum leap forward for the futures industry. The uniform systems and operating efficiencies resulting this agreement will create a ripple effect throughout the futures industry and will help generate more business in the years to come.''
 BOTCC Chairman William M. Feldman said: ''Not only will our agreement reduce transaction costs of members firms at each exchange; it will further protect the financial integrity of our markets through the ability to net the settlements of each common member firm.''
 In essence, the Common Banking and Settlement agreement will enable firms that do business at both exchanges to effect settlement of their trades with a single transaction through a common account at one of the CME/BOTCC settlement banks. This will substantially pare transactional expenses of the common firms, according to CME/BOTCC projections.
 In addition, CME/BOTCC projections indicate the new system will result in a net risk reduction to the payment system. This is because a settlement loss at one exchange is oftentimes offset by a gain at another exchange. With such gains and losses netted under the new systems, the average payment size should be smaller and the risk of a default to either exchange diminished.
 -0- 8/17/92
 /CONTACT: Andrew Yemma of CME, 312-930-3434; or Dennis Dutterer of BOTCC, 312-786-5703/ CO: Chicago Mercantile Exchange; Board of Trade Clearing Corp. ST: Illinois IN: FIN SU:


PS -- NY088 -- 0680 08/17/92 17:04 EDT
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Publication:PR Newswire
Date:Aug 17, 1992
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