Futures IndustryDisaster Recovery

Test Briefings

June, 2008

“DR V”

Prepared and Moderated by

John Rapa, CBCP Tellefsen and Company, L.L.C.

AGENDA

I. Introduction and Welcome

II. Testing Goals and Objectives

III. Review of Testing Protocol

IV. Member Firm Readiness Discussion

V. Timeline and Next Steps

I. INTRODUCTION AND WELCOME

Our Panelists Today:

CFE:

Todd Furney

ICE Exchanges:

Mark Wassersug

CME Group:

Karl Weinberg

NYMEX:

Eric Aldrich

TCC:

Jeff Mikula

PBOT:

Gary Rounbehler

Eurex:

Mikal Lavin

ICE Clear US:

Brian Sayler

II. TESTING GOALS AND OBJECTIVES

• Test the basic ability to conduct business (order entry through clearing) from alternate/back-up facilities simultaneously.

• Test disaster recovery capabilities among futures commission merchants, back-office service providers, recovery services providers and trading system vendors.

• Test the connectivity between exchanges, clearinghouses and their constituents’ back- up facilities (“primary to back-up”), and confirm member firms’ ability to send/receive information to/from their primary facilities/interfaces.

• Test end-to-end processing by exchanges through to, and including clearing houses; process actual test trades, produce test end of day reports with the test data.

GOALS AND OBJECTIVES … Continued

• Enter a small but meaningful sampling of orders and trades, carried out by a limited number of essential personnel from alternate locations.

• Confirm the receipt/transmission of information to/from clearing members.

• Transmit key clearing reports and information to clearing firms to verify “round-trip” communications.

III. REVIEW OF TESTING PROTOCOL• Exchanges will specify products available for order

entry/trading.• All exchanges will use their electronic trading venues for the

test and process test data through to end-of-day reports for clearing members. Testing will take place between 9:00 a.m. and 3:00 p.m. EDT.

• FIA will manage the test via an open conference bridge (conference bridge number to be announced).

• Member firms will confirm connectivity with their respective exchanges/clearinghouses:– Pre-test connectivity testing will be offered, as applicable.

• Unless so noted, firms will execute a pre-defined script of orders. Firms will use test accounts.

• Exchanges will generate fill reports on the orders.• All firms will report results and confirm post-test production

connectivity to the respective exchanges.

CBOE FUTURES EXCHANGE

• Will use CBOEdirect back up ETS.• Trade entry via scripts:

– Products to traded: VIX futures.• Pre-test requirement - Users must register via the FIA website and

establish back-up connectivity to CFE via the CBOE API Client Relations Group.

• Data will be edited to modify the trade date:– Order entry systems will reflect October 25th trade date.– Will accept either October 24th or October 25th trade date on

order input.

CBOE FUTURES EXCHANGE (Cont’d)…

• The session will open an 9:30 AM EDT• There will be no clearing component as OCC is not participating.• Transmission of regulatory data to NFA via FTP.• Pre-test connectivity tests will be offered on Tuesdays and

Thursdays in October. Please contact us to schedule a date/time.• Contact CBOE Client Relations Group with any test related

questions: 312 786 7300.

CME GROUP - GLOBEX

• Will use GLOBEX via remote data center.• Firms must register via the FIA website.• Members should call the Globex Control Center at (312) 456-2391

to report any trading problems encountered throughout the test. • Trades will be processed through to the appropriate clearing

organization (KCBOT, MGEX)– Trade date will be October 24th.

CME GROUP - GLOBEX

• Verify firm connectivity:– All GLOBEX Markets will be in Pre-Opening state.– Can use either October 24th or October 25th trade dates. All fills

will be sent back to the Firms with the trade date of the 24th.

– Firms can send a test order in any market they wish.– No trades will occur during the Pre-Opening period.– Firms will verify connectivity and can send/receive messages.

CME Group (Cont’d)…

• Order entry via test script as follows:– Enter bids as customer and offers as house at the settlement

price in the market you choose. Enter about 10 trades.– Firms may use any market they want. We do recommend that

Firms send orders in on ‘Floor Only Contracts, like the SPZ9 that will be listed on GLOBEX for the test.

– Firms may receive crossed trades and/or trades with other counterparties.

• Trade reporting to firms’ back office systems:– Should be verified and then deleted.

• Enter ex-pit transactions via CME portal URL.

CME Group (Cont’d)…

• Change FTP IP address to CME’s remote site IP address to connect to CME FTP server via RDC IP:– Using Friday’s data, FTP the PCS and Large Trader reports.– CME staff will verify receipt and then delete them.

• CME will transmit Thursday’s Trade Register and SPAN files.– Firms will verify receipt of these files and delete them.

CME Group (Cont’d)…

• Connect to RDC URL and enter a block trade for:– 5000 EDH @9740.0

• CME staff will verify receipt of the block trades and then delete them.

• Contact CME Clearing Support (CCS) team at (312) 207-2525 to obtain CME Production IP address, RDC IP address or RDC URL address.

• Switch back to CME production site IP address at test conclusion.• Finally, firms should contact the GCC at (312) 456-2391 to recap

the test results.

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THE CLEARING CORP.

• The Clearing Corp. will test from their DR site.• Members must pre-register via the FIA website.• Pre-test ping testing will take place on Saturday 9/27.• Firms will verify connectivity via a ping test. • FTP verification performed by logging on to the CCorp FTP server.• MQM connectivity will be performed by performing a MQM ping via the

MQM channels. • Previous day’s clearing reports will be available for firms to retrieve to

their testing sites.• PCS, large trader and/or ex-pit transactions will not be accepted.

EUREX

• Will use the production Eurex matching engine located in Frankfurt.• Members must pre-register via the FIA web site.• Firms should confirm all software versions at their primary sites

(including ISV, proprietary and exchange software applications) are also running at their back-up site.

• Firms will conduct a connection test, and can do so from any/all of their locations:– Firms will receive log-in message to confirm connectivity and

successful application functionality• No order entry will be permitted.• Contact the Technical Help Desk at 312-544-1100 (US) or +4969

211 11200 (EU) with any questions.

ICE Exchanges• Disaster Recovery Test Overview

– ICE Exchange will be available from Disaster Recovery site in Atlanta for front end trading application testing.

– Markets will enter a Pre-Open state at 10:00pm EDT on Friday 10/24 and Open at 9:00am EDT on Saturday 10/25:

• ICE Futures US Sugar11• ICE Futures UK WTI• ICE Futures Canada Canola• All OTC markets will be open beginning at 9:00am

– Markets will remain Open until 12:00pm on 10/25.– Non-trading applications will be available during testing

• All ICE web reporting (deal reports, position reports, etc) accurate based on test trading activity

– ICE Block will be available during testing– Firms can trade freely in all open markets. There is no set

testing script for trading

ICE (Cont’d) …

• All existing customers with valid trading IDs are welcome to participate: – Valid user ID and production password will be used for login.

• Ping Test Overview and Connection Summary– Atlanta DR site will be available to test login on Saturday, 9/27

and 10/18 from 9:00am EDT – 12:00pm EDT– All markets will be closed and only system login will be tested. – Please review the connection guidelines for the disaster

recovery site at:• https://www.theice.com/publicdocs/technology/ICE_Firewall_

Proxy_Requirements.pdf– No network, DNS, or IP changes will be required to connect to

the DR site during the ping test or the FIA DR Test

ICE (Cont’d) …

• Connection Type available for ping and DR test:– Internet

• Access available for DR site via www.theice.com– Data Hubs– Atlanta, NY, Chicago, London, Singapore

• Connection automatically routed to DR site– ICE Co-Lo

• Atlanta and Chicago locations• Automatically routed to DR site

– Connections to DR will be available after 9:00pm EDT on the Friday evening before each test

ICE (Cont’d) …

• Testing Administration and Support– All participants MUST clean up all backend system data after

testing– No trades performed during testing hours will be valid.– The ICE Helpdesk and ICE Futures UK and US Market

Supervision will be available from 8:00am EDT through 1:00pm EDT at the main phone numbers listed on the ICE website

– At the end of the DR testing period, all trade data will be deleted from the ICE exchange and databases and no record of the days transaction will persist.

• Clearing Information– All ICE Futures US trades will be submitted to the ICE Clear US

backup site– All ICE Futures Canada trade submission to the KCBOT backup

site being evaluated– ICE Futures UK and OTC cleared trade submission to UK

clearing entity being evaluated• The Production ICE Trading System and associate components will

not be available during the DR test.

ICE CLEAR US

• Connection settings and addresses used during previous Disaster Recovery tests are obsolete

• The Chicago Data Center will serve as the ICE Clear US Back-up site– IP addresses and connection details will be distributed

• Firms must register via the FIA website• Verification of connectivity between firm and DR site via ping

testing is scheduled for September 27th and October 18th

• Trade date will be October 25th

ICE CLEAR US (Cont’d)…

• Test Cases:– Clearing members will use post trade systems (PTMS and TIPS)

to enter ex-pit transactions from script and accept trades loaded by ICE Futures US into the ETS and passed through to clearing

• Test Files:– TIPS intra-day files will be available via the Data Express File

Transfer (FTP) platform– FixML trade messages will be sent to CMs via MQ– CMs will deliver PCS and Large Trader files to the back-up site

via Data Express FTP (production files from Friday, October 24th trade date)

– ICE Clear US will complete a clearing run and generate the regular clearing data files:

• Matchoff files delivered through Data Express FTP• Clearing Reports delivered through ICE eReport• SPAN file (available through CME SPAN web site)

ICE CLEAR US (Cont’d)…

• Contact NYHelpDesk@theice.com for detailed information essential for each firm to connect with the following applications running in back-up:

- ICE Trading System- PTMS, TIPS, ECS, eReports

• IP address changes necessary for Back-up Data Center/Data Express transmissions of the following:

- Matchoff file- TIPS file- PCS file

- FixML trade messaging• BC/DR support staff will be available up to and including test day.

Please direct questions to ICEClearUS@theice.com

KANSAS CITY BOARD OF TRADE• For Kansas City Board of Trade (KCBT) open outcry portion of the

test:– Injection of GLOBEX trades into KCBT clearing remote data

center.– Entry of open outcry trades into KCBT clearing remote data

center.• For GLOBEX portion of test:

– Members should logon to GLOBEX to check connectivity and contact CME Market Operations to confirm connectivity.

– Trades will be injected from GLOBEX to KCBT clearing.– Trade date sent from GLOBEX will be October 24th.

KANSAS CITY BOARD OF TRADE (Cont’d) …

• KCBT open outcry portion of test:– KCBT Clearing will contact designated firm representatives for

KCBT and provide details on trades that will need to be entered for open outcry.

– Request that each firm work with their people responsible for daily interaction/operation at KCBT to ensure continuity of documentation and communication.

– Clearing login information and instructions have been provided to those responsible for interaction with the KCBT/KCBT Clearing Corp.

– Clearing will determine any pre-testing requirements with firms.• Upon completion of trade entry for GLOBEX and open outcry,

trades files will be generated and be made available for download.

MEFF

• Trade date will be October 25.• Will use the MEFF production ETS environment. • Members will be able to trade.• During the test we will failover the backup system. • Once the failover is complete, members will be able to continue

trading.• Members will be able to get reports of their trades.• Back office systems will be prevented to enter this test.

NEW YORK MERCANTILE EXCHANGE

• Will use GLOBEX, ClearPort TMS, ClearPort Clearing, CMDownload and NYMEX SFTP systems.

• Trade date will be Monday, October 27th.• Firms must pre-register via FIA website in order to receive follow up

information, test planning documents, and email announcements during the test.

• Questions may be directed to NYMEX Director of Business Continuity – BCP@NYMEX.COM.

• Test environment will be monitored and managed via the FIA conference bridge set up for the test. – Bridge will act as test squawk box – monitored by NYMEX staff

at back up emergency operations center (EOC)– All problems will be brought up via bridge (taken off-line if

necessary)– Test will be directed and managed via the bridge and email.

NEW YORK MERCANTILE EXCHANGE (Cont’d)…

• Trades may be entered into Globex by firms. NYMEX staff will enter trades into all other platforms- use CME schedule for pre-open and open.

• Production accounts and products will be used.• Real production data will be backed up and restored back over test

data upon test completion. Test data will be saved for subsequent review.

• Detailed test scripts describing what the firms are expected to do and when to do it will be provided to registered firms. FIA registration required.

NEW YORK MERCANTILE EXCHANGE (Cont’d)…

• Firms are to connect to NYMEX backup site via their primary sites.• The Exchange will enter trades at DR site for allocation (give-ups) to

registered participating firms.• NYMEX Clearing will process end-of-day reports; there will be no

intraday reports.• The NYMEX SFTP system will be used to transfer files.

– DR SFTP server IP addresses will also be available to connect to the backup site (these have already been provided to all firms with connectivity to the primary site).

– Members will upload the previous day’s PCS and Large Trader reports via SFTP backup IP addresses.

– Firms will retrieve clearing reports and data from Member Trade Register report and CM Download site.

NEW YORK MERCANTILE EXCHANGE (Cont’d)…

• NYMEX will confirm report data against trades from test script.• All firms are to report their test results for all test sections, and

confirm post-test production connectivity to NYMEX using the Test Certification Form in section 6 of the NYMEX DR Test Plan. FIA website registration required.

PHILADELPHIA BOARD OF TRADE

• Will use the PBOT/XL trading system from the primary site.• Trade orders will be received at PBOT/XL help desk.• Trade will be automatically matched and executed with trade date of

Friday October 24, 2008.• Fill reports will be generated and transmitted to firms.• PBOT trade file will be processed for clearing and settlement.

EXCHANGE AND CLEARING HOUSE TESTING MATRIX

•CBOE Futures Exchange and CME will accept either October 24 or October 25 trade dates on order input..

+ CME will accept previous day (October 24) large trader report information.

NYMEX will use October 27 trade date

CFE CME TCC Eurex ICEExchanges

Systems CBOE Direct GLOBEX BACK UP Eurex

Prod.ICE

Exchange.

Ping Testing Y Y Y Y Y

Successful Login from Members DR Site Y Y Y Y Y

Trade Date 10/24

or

10/25

10/24

or

10/25

N/A N/A 10/25

Receipt of 10 Orders from Members Via Pre-Defined Scripts Y Y N/A N N

Transmit 10 Fill Reports to Member Firms Y Y N/A N N

Receipt of 10 Ex-Pit Reports from Member Firms Via Scripts N Y N/A N N

Receipt of PCS and Large Trader Reports from MembersN/A

Y+ N N N

Download Previous Day Clearing Reports to Members:-Match Off File-Report File-SPAN File

N/AN Y N/A N

All Production Systems Restored, Test Data Re-Set Y Y Y Y Y

EXCHANGE AND CLEARING HOUSE TESTING MATRIX

•CBOE Futures Exchange and CME will accept either October 24th or October 25th trade dates on order input..

+ CME will accept previous day (October 24th) large trader report information.

NYMEX will use October 27th trade date

KCBOT MEFF ICE Clear US NYMEX PBOT

Systems GLOBEX,

KCBT Clearing

TEMS

PROD.

ECS, PTMS, TIPS,

eReports, Data

Express, MQ Trade

Messaging

GLOBEX, CPC,

CPTMS, CMDownload

PBOT/XL

Ping Testing N N/A Y Y Y

Successful Login from Members DR Site Y Y Y Y Y

Trade Date 10/24

Or

10/25

10/25 10/25 10/27 10/24

Receipt of 10 Orders from Members Via Pre-Defined Scripts

Y Y Y Y Y

Transmit 10 Fill Reports to Member Firms Y – Trades File

Y N Y Y

Receipt of 10 Ex-Pit Reports from Member Firms Via Scripts

N N/A N Y Y

Receipt of PCS and Large Trader Reports from Members

N N/A Y Y Y

Download Previous Day Clearing Reports to Members:-Match Off Files, Report Files, SPAN Files

N N/A Y Y Y

All Production Systems Restored, Test Data Re-Set Y Y Y Y Y

PRE-TEST COMMUNICATIONSTESTING SCHEDULE

• September 27th: CME Group, Clearing Corp., ICE Clear,

ICE Exchanges, NYMEX, PBOT

• October 18th: CME, ICE Clear, ICE Exchanges,

NYMEX, PBOT

• Ad hoc testing: CBOE Futures (Tuesdays, Thursdays)

IV. MEMBER FIRM READINESS

• Discussion with member firms as to the state of their readiness:– Back-up systems/communications links.– Order entry and routing.– Market data.– Give up processing.– Clearance and settlement.– Use of third party service providers.

• Major issues or concerns.

V. TIMELINE AND NEXT STEPSJune 25th Next Call

July 23rd Monthly Call

August 27th Monthly Call

Sep 10th Monthly Call

Sept 16th, Sept 18th

Symposium Meetings – NYC, Chicago

Sept 27th Ping Testing (CME, Clearing Corp., ICE Exchanges, ICE Futures, NYMEX and PBOT)

Oct 1 Weekly Call

Oct 8th Weekly Call

Oct 15th Weekly Call

Oct 18th Ping Testing (CME, Clearing Corp. ICE Exchanges, ICE Futures, NYMEX and PBOT)

Oct 24th Friday - All Hands Call

Oct 25th Saturday – Industry DR Test

Oct 29th Post-Mortem Call

21 MORE WEEKS TO GO !