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CME AND OCC RECEIVE REGULATORY APPROVAL TO EXPAND CROSS-MARGINS TO MARKET PROFESSIONALS

 CME AND OCC RECEIVE REGULATORY APPROVAL TO EXPAND
 CROSS-MARGINS TO MARKET PROFESSIONALS
 CHICAGO, Nov. 26 /PRNewswire/ -- The Chicago Mercantile Exchange (CME) and The Options Clearing Corp. (OCC) announced today they have received regulatory approval to expand their two-year-old cross- margining program to market professionals at several exchanges.
 Concurrent approval for expansion of the CME-OCC cross-margining program was announced in Washington by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). The CME and OCC plan to implement the cross-margining expansion program on Dec. 13.
 Cross-margining involves the recognition of offsetting positions in which each side of the position is traded in a different market. In such cases, the reduction in market risk to the respective clearing organizations can result in substantial total margin reductions for the member firms.
 In 1989, the CME and OCC received regulatory approval and began a program to allow cross-margining for interexchange positions held by member firms for their proprietary accounts. The expansion will allow cross-margining by individual members of the exchanges, including market markers, specialists and registered traders, all of whom trade for their own accounts. These market professionals provide liquidity to the markets for the investing public.
 John F. Sandner, chairman of the CME, and Wayne P. Luthringshausen, chairman of the OCC, hailed the regulatory approval, noting that it was enthusiastically endorsed by CFTC Chairman Wendy Gramm and SEC Chairman Richard Breeden.
 "Cross-margining was a major recommendation of the studies conducted after the 1987 stock market crash," Sandner said. "With the expansion of our program, the markets will be more liquid than ever, benefiting investors and institutions who use them for a variety of investment and risk management needs."
 Luthringshausen said: "This program was well-conceived and thoroughly tested over the past two years between the CME and OCC, and it is a tribute to the cooperative efforts of the futures and securities options exchanges that it will now be expanded to market professionals."
 William J. Brodsky, president and chief executive officer of the CME, who has been associated with both the securities and futures industries during his career, said: "Cross-margining is a bridge between two distinct markets that reduces the risk to the clearing systems in each market. By improving cash flows and financing relief during adverse market conditions, cross-margining is a positive, progressive program for the derivative equities markets."
 Paul Stevens, president and chief operating officer of the OCC, noted that "OCC is working with other futures exchanges in order to expand cross-margining with stock index options to other indexed equity futures contracts. It is our aim to continue to expand whenever it will benefit the overall marketplace."
 Contracts to which cross-margining applies under the CME-OCC agreement are:
 -- The S&P 500 futures and options at the CME.
 -- The S&P 100 (OEX) and S&P 500 (SPX) options at the Chicago Board Options Exchange (CBOE).
 -- The Major Market Index options (XMI and MNI), and the Institutional Index option at the American Stock Exchange (AMEX).
 -- The NYSE Composite option at the New York Stock Exchange (NYSE).
 -- The FNN index option at the Pacific Stock Exchange (PSE).
 -0- 11/26/91
 /CONTACT: Andrew Yemma of CME, 312-930-3434, or Paul Stevens of the OCC, 312-322-6213/ CO: Chicago Mercantile Exchange; Options Clearing Corp. ST: Illinois IN: FIN SU:


CK -- NY096 -- 7552 11/26/91 17:57 EST
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Date:Nov 26, 1991
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