Such an agreement has advantages for investors, as they can monitor all orders through a central source instead of having to record records from several different brokerage firms. In addition, an optimized clearing system reduces the cost of commissions and fees and saves time. A clearing Member Trade Agreement (CMTA) refers to an agreement that allows an investor to enter into derivatives transactions with different brokers, but consolidates those trades with a single brokerage firm for clearing purposes. Using the CMTA. A single trader can initiate trades such as options, derivatives and futures with a limited number of brokers, but only one of them can end trading. A CMTA is an agreement between different brokers to authorize and process trades from all brokers involved through a single broker. As an investor can have relationships with multiple brokers, he can launch trades with several of them at the same time. But when it comes time to clear these trades, they can settle with a single broker. Without the trading member clearing agreement, the investor would make trades with different brokers and the trades would be cleared from multiple brokers. This can be complicated and time-consuming when it comes to closing positions.

With a CMTA, a broker will submit all trades to the clearing house for settlement. As part of a clearing Member Trade Agreement (CMTA), different brokers also enter into an agreement for only one of them to file a trade for a single client, whether or not the client trades derivatives with all brokers. With this agreement, a single investor can have trading relationships with many brokers at the same time, but all trades from different brokers are processed through a single brokerage firm. According to the OCC, clearing members have raised concerns about the timely identification of the account for trades that a clearing member receives through the CMTA, Give-up and joint back-office processes. [7] OCC proposes to require the inclusion of an “Actionable Identifier” for all transactions related to a client or non-client account, Start Printed Page 20690, with the exception of market-maker transactions[8], which OCC believes would allow clearing members to identify trades in a more timely manner than a particular client or non-client account. [9] As noted in the proposed amendment to Rule 401, the applicable identifier would consist of either a name, a number of numbers, or other information identifying the account for which the transaction was executed. The OCC would also require each clearing member to establish and maintain policies and procedures that are reasonably designed to include sufficient information in the applicable identifier on the account from which the trading arose, so that the other clearing member can proceed immediately with the transaction. [10] OCC would impose the applicable identifier requirements by: (1) an annual certification process for clearing members; and (2) a review of the guidelines and procedures applicable to identifiers that can be used in periodic inspections of OCC clearing members. . .

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