I am considering a business idea of an arcade-type business for trading futures on CME. I am thinking of setting up an LLC that would become an exchange member of each CME division. Then getting a "prime broker" FCM and negotiating heavy discount on commission, promising huge volume. Then finding clients who would become LLC members (partners), contribute their capital to the LLC (withdrawable at any time), and be given a separate sub-account, with separate statements, and benefit from low trading costs. LLC would make money by taking a cut on commission and/or exchange fee. Question: does CME allow such a business structure?
OK. I will answer myself after finding this on the web: Microsoft Word - FPB 09-01 - Clearing Fees for Member Firm Accounts CME - CBOT - NYMEX - COMEX - June 2009.doc (cmegroup.com) "The trading activity of individual customers/traders conducted in the name of the firm is not eligible for discounted member firm fees in order to prevent arcade type trading under the guise of member firm trading and to prevent the “selling” of member firm rates. Further, a member firm may only profit/benefit from the member firm trading activity through the performance of the trade and not from any other source such as a commission or charge for trade execution" It's from 2009 but probably has not changed since then. Unless anybody wants to add anything?