(CMEGroup) Please Note: The two notices are provided to the Class A firm regardless of which client(s) caused the product benchmark exception. Class A firm clients are not given individual notices because messaging activity is measured at the Class A firm level, not the client level.
So what then? * IB now collects 2000 USD from every customer while only being fined 2000 USD? * IB chooses one random customer who has to pay all the fine? If that is per firm, how can a customer protect from the fine if he has no idea about the activities of others? I can get over the limit with 3 messages ONCE because my messages are those taking it over the benchmark?
The CME document states that it is the Class A firm that gets fined. So unless he pushed the penalty on his own 3 times during the month sending more than 20,000 orders with the cancellation rate to trigger the threshold... he's got a chance to fight this.
Well, the Interactive Brokers business entity of Timber Hill, LLC is NOT listed as a CME member firm - Timber Hill is. Looking at the CME membership directory, Interactive Brokers isn't Class A anything. And since Timber Hill certainly prop trades and messages extensively for their own gain, my guess is that they will be pricks about this and stick our poor unfortunate OP with the tab. He can and should certainly protest it to both IB management and the CME if, in fact, he was never warned about the message issue beforehand. I have no idea what the IB client futures clearing contract agreement looks like, and if there is any verbage regarding the issue buried in there. IB does have some discretion on how they pass on these surcharges according to CME member regulations: "Do Class A firms pass on surcharge fees to their customers? It is up to each Class A firm to decide how surcharge fees are distributed. However, CME Group-provided reports will be segregated by sub-firm, FIX tag 50, iLink session ID and account number so that the Class A firm can easily identify the origin of trading activity." Since Timber Hill is a designated market making firm by the CME, I am sure that all of their messaging quotas are used by their internal proprietary trading operations, and not by IB retail clearing clientele. "CHICAGO, Sept. 30 /PRNewswire-FirstCall/ -- Chicago Mercantile Exchange Inc. (CME), the largest futures exchange in the U.S., today announced the selection of six leading trading firms to help fuel further growth its electronic E-mini⢠S&P 500® equity options market. The firms chosen to become market makers are: Citadel Derivatives Trading LLC, Chicago Trading Company, Deutsche Bank Securities, Inc., Goldman Sachs, Timber Hill and Wolverine Trading LLC." "These newly selected firms join HGI Holdings, who began making markets in CME's E-mini S&P 500 equity options in November 2003. As market makers, they will provide continuous, transparent and competitive markets for CME E-mini S&P 500 equity options traded on GLOBEX. In return for their assistance in creating additional liquidity for all E-mini S&P 500 equity options customers, CME will provide its market makers with additional bandwidth."
If possible you should change the thread title to something more descriptive - e.g. "Fined $2000 by IB". If you do so (or get the mods/admins to do it) I'm sure an IB rep will be along to respond to these charges. It's certainly something I'd like to see clarified.
This is weird... since market maker firms are supposed to be exempt from this charge... as per exceptions in point 4 ... of the pdf attached above...
Well, I'm sure that since Timber Hill's proprietary trading operations are so successful for them, that they will suck up all of the messaging bandwidth they can regardless if it is associated with sanctioned market making or their own high speed automated trading efforts. The simple fact is that poor trader198 exceeded 18 messages per fill - maybe by a whole lot, sounds in his OP that he admitted as much. I do think that he has some standing to protest if, in fact, he was not warned by IB before the fine notice came out.
thanks all your input. it is all my fault, did not go to cme website to read through their rules and their product specifications. I do not want to blame IB, though they should warn me or be aware of the violation. From IB customer service, I was told the message was directly sent by CME, not IB. it is a bad day to me. all the day, tried to call around and understand this violation, so I can avoid it next time. it is a hard lesson, made me sick. this incident made me nervous about order cancellation, modification, even mouse clicking. I will forget about trading treasure bonds forever.
trader198 - For the benefit of others in this thread can you please share the message IB sent you regarding the $2,000 fine? Also how many separate days were you changing orders in ZB? You would have to violate the rule on three separate instances within 30 days to incur the fine.
Are you point and click trading, cancelling orders or are you autospreading? If you're trading with say a 5 lot but entering it in a series of 1's, this counts as 5 seperate messages. As bone said, if you're working a spreader way out of the market, there's no point in having it constantly changing price when it is never going to get filled. These are two possible areas you need to refine for the future. You should be able to engage with your platform provider to resolve this.