The Futures Industry Association has been working for the last five years to reduce inefficiencies in the give-up process. The most inefficient aspect of the give-up process is the billing and collecting of fees between executing and clearing brokers. eGAINS is the give-up invoicing system licensed by FIA Tech on behalf of participating futures exchange clearing members to facilitate the calculation, invoicing, and payment of firm give-up fees. eGAINS receives give-up data from futures exchange clearing systems and provides previous month and current month-to-date views of clearing firms' give-up payables and receivables. To facilitate the calculation of give-up fees, eGAINS continuously retrieves give-up agreements from EGUS, which is an industry-wide electronic give-up agreement administration system. eGAINS matches give-up trades to give-up agreements using the executing and carrying exchange firm codes, and executing and carrying account numbers. After a give-up is matched to an agreement, eGAINS finds the appropriate give-up fee for that transaction, using detailed criteria such as futures/options, spread codes and product codes.
FIA Technology Services, Inc., a wholly owned subsidiary of FIA, has licensed the GAINS application system from CCorp. FIA Tech has outsourced the operation of eGAINS to Markit Group, a respected provider of automated solutions to the financial services industry. Markit built EGUS for FIA and currently operates and supports the system. This solution is designed to assure the confidentiality of the data.
FIA Tech will enter into agreements with participating exchanges to provide their data to the system. Eurex, ICE Futures and Liffe are the first exchanges we have approached to provide data. We plan to make the system available to additional exchanges in the North and South America, Europe, and Asia in the future.
FIA Tech will also put in place agreements with executing and clearing brokers to use the system. FIA Tech has commitments in principle from 16 major clearing firms to participate in the system. We are in the process of contacting executing brokers to invite them to participate.
FIA Tech will be governed by a board appointed by the FIA board. The FIA Tech board will be advised by a committee of participating firms.
The FIA Tech board of directors sets the fees for eGAINS. As the number of firms and exchanges in the system increases, the fee will be reduced. The eGAINS fee for 2012 is split equally between the executing and clearing broker and is based on volume.
The fee is payable in USD on the Credit Date. Using JPMorgan ACCESS, on the 20th business day after debiting the clearing broker's account, FIA Tech will credit the executing broker's account and can debit the fee from the executing broker's USD account or invoice according to the broker's instructions. All fees are due within five business days of Credit Date.