CME introduces FX incentive program for CTAs and hedge funds

The Chicago Mercantile Exchange is launching an incentive programme for commodity trading advisors and hedge funds that are active in FX markets.


The nine-month reduced pricing incentive programme, designed for a broad universe of CTAs and hedge funds, will become effective Tuesday, 1 November 2005.


To be eligible to participate in the program, a CTA or hedge fund manager must have a minimum of USD 50 million in assets under management, including managed accounts and pooled funds.


Additionally, qualifying CTAs and hedge funds must trade more than 125,000 sides per month in FX products on CME Globex to receive the incentive fee.  For qualifying CTAs and hedge funds meeting the monthly volume threshold, total transaction fees, including CME Globex charges and clearing fees, will be reduced to USD 0.60 per side versus the current USD 1.60 per side. 


"We are continuously looking at ways to keep CME futures competitively priced and believe that eligible CTAs and hedge funds will find our FX markets more attractive than ever," said Rick Sears, Managing Director, CME Foreign Exchange. "It is important to keep in mind that pricing is only one part of the equation. CME's deep liquidity, tight bid/ask spreads and the ability to execute trades in milliseconds are key factors in the success of CME FX."


CME implemented a similar incentive program for CTAs and hedge funds with assets under management at or above USD 2 billion on August 1, 2005. This program also reduces transaction fees for qualifying asset managers to USD 0.60 per side with no minimum monthly volume threshold.


 


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