CME ADDS COMPLIANCE CHIEF, EXPANDS SURVEILLANCE
The Chicago Mercantile Exchange, CME,
said it has added a new chief compliance officer and will
expand its regulatory surveillance program.
    Paul O'Kelly, currently assistant regional administrator of
the Securities and Exchange Commission, was named
vice-president of compliance for the exchange, the CME said.
    The expanded compliance program, which calls for an
increase in the exchange's compliance budget and addition of
staff, was in response to recent criticisms that the CME's
current surveillance was not able to keep up with increased
demands of recent volatility and volume, the CME said.
    The new surveillance program calls for the addition of
three floor investigators and five compliance investigators,
the CME said.
    Some of the new staff will monitor the exchange's new
Computerized Trade Reconstruction system, scheduled to start
July 1.
    In addition, three computer programmers will be added to
assist in regulatory support for the exchange's management
information system department.
    Recent criticism has been especially directed at the CME's
Standard and Poor's stock index futures and options division.
    A special membership referendum to prohibit CME members
from filling customer orders and trading for their own account
in S and P 500 futures and options will be voted on April 13.
    In a letter dated March 12, CME chairman John Sandner and
Executive committee chairman Leo Melamed urged members to
reject the referendum in favor a series of new rules.
    Included in the rule changes was the requirement that
futures brokers in the S and P pit manually record all personal
trades to the nearest minute, intended to "enhance the
effectiveness of surveillance and compliance functions,"
    "We made a promise to our members that we have kept,"
Melamed said in a release today.
    He said the new surveillance program "represents a
commitment to a vigorous enforcement policy."
 Reuter
