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Enron Mail |
TO: All New York Mercantile Exchange Members
FROM: Neal Wolkoff, Executive Vice President RE: CFTC Approves Amendments to Natural Gas Price Limit Rules DATE: December 7, 2000 Notice # 00-419 ______________________________________________ The New York Mercantile Exchange, Inc., has received permission from the=20 Commodity Futures Trading Commission to expand the initial price limits of= =20 its natural gas futures contracts; create uniform limits across all months = of=20 trading; abbreviating the trading halt; and expand the new limits by 200%= =20 when the initial limit is reached. The amended rules, which are attached, will take effect for the opening of= =20 the open outcry tading session at 9:30 AM tomorrow. The Exchange announced this morning that the board last night voted to amen= d=20 the procedures so the new natural gas limit will be $1.000 per million=20 British thermal unit and if any contract month is traded, bid, or offered a= t=20 the limit for five minutes, the market is halted for 15 minutes. When=20 trading resumes, expanded limits are in place that allow the price to=20 fluctuate by $2.000 in either direction of the previous day's settlement=20 price. Currently, the market is halted for one hour if the price in one of the fir= st=20 two months is traded at $.750 for five minutes. When the market reopens,= =20 those limits are extended to all months, but are moved to surround the=20 previous limit in place in the direction of the move. Under the amended rules, if a halt occurs during the last two days of tradi= ng=20 in a contract, when the market reopens, there are no price limits placed on= =20 either of the first two nearby contract months. NATURAL GAS: APPROVED AMENDMENTS TO PRICE FLUCTUATION LIMIT RULES The rules below reflect the provisions that are being implemented. A copy = of=20 the rules reflecting the changes made from the prior version of these rules= =20 can be obtained from the Exchange=01,s Legal Department. Rule 220.08. PRICES AND MINIMUM FLUCTUATION SIZE (A) Prices shall be quoted in dollars and cents per million British thermal= =20 units (MMBtu). The minimum price fluctuation shall be $.001 per MMBtu. Rule 220.08A. SPECIAL PRICE FLUCTUATION LIMITS FOR NATURAL GAS FUTURES (A) Initial Price Fluctuation Limits for All Contract Months. At the=20 commencement of each trading day, there shall be price fluctuation limits i= n=20 effect for each contract month of this futures contract of $1.00 per MMBtu= =20 above or below the previous day=01,s settlement price for such contract mon= th. (B)(1) Triggering Event and Temporary Trading Halt. If a market for any=20 contract month is traded or, is bid in the case of upward price moves or is= =20 offered in the case of downward price moves, for five (5) minutes=20 consecutively at the upper or lower price limit, as applicable, then a=20 Triggering Event will be deemed to have occurred. (2) Except as otherwise provided in this rule, as a result of such Triggeri= ng=20 Event, the market will be given notice immediately that in two (2) minutes,= =20 there will be a fifteen (15) minute temporary trading halt in all contract= =20 months of that futures contract and the associated option contract=20 ("Temporary Trading Halt"). The market will remain open during this=20 two-minute notice period, and the commencement of the Temporary Trading Hal= t=20 shall not be affected by market activity occurring during this notice perio= d. (3) Expansion of Limits Following Temporary Trading Halt. Following the end= =20 of the 15-minute Temporary Trading Halt, the market shall reopen in all=20 contract months of this futures contract. When trading resumes, price=20 fluctuation limits for each contract month, except as otherwise provided in= =20 this rule, shall be expanded to $2.00 per MMBtu above and below the previou= s=20 day=01,s settlement price for such contract month; provided that if such Temporary Trading Halt occurs on either of the last t= wo=20 days of trading in the current delivery month, when trading resumes, there= =20 shall be no price fluctuation limits in effect for the remainder of the=20 trading day both for the current delivery month and for the next nearest=20 contract month to delivery. (4) Following resumption of trading after a Temporary Trading Halt, there= =20 shall be no additional trading halts and no further expansion of price limi= ts=20 for the remainder of the trading day. (C) Duration of Session Following Temporary Trading Halt. When trading=20 resumes after a Temporary Trading Halt, trading generally shall continue=20 until the regularly scheduled closing time subject to the following=20 exceptions: 1) if, at the start of the 15-minute Temporary Trading Halt, there is less= =20 than 15 minutes before the close, then, when trading resumes after the Temporary Trading=20 Halt, the trading session shall be expanded as necessary to provide for=20 fifteen (15) minutes of trading following the resumption of trading, and th= e=20 closing period shall be the final two minutes of trading of this 15-minute= =20 period of trading; 2) provided however that if the five-minute Triggering Event is completed= =20 during the closing period (on any day other than the last day of trading in the curren= t=20 delivery month), there shall be no Temporary Trading Halt for any contract= =20 month and no expansion of price limits for any contract month; and 3) provided further that if the five-minute Triggering Event is completed= =20 during the closing period on the last day of trading in the current delivery month,=20 following the 15-minute Temporary Trading Halt, trading shall resume for=20 thirty (30) minutes for all contract months. In such circumstances, the=20 closing range for the current delivery month shall include both the period= =20 from the start of the closing range to the start of the Temporary Trading= =20 Halt as well as the 30-minutes of trading following resumption of trading. (D) Application of Price Fluctuation Limits to NYMEX ACCESSc The limits=20 described in this rule shall apply to trading on NYMEX ACCESSc, except as= =20 provided by NYMEX Rule 6.56 and except that: (1) if the five-minute Triggering Event is completed during the last ninety= =20 minutes of a NYMEX ACCESSc trading session, there shall be no Temporary=20 Trading Halt and no expansion of price limits during the remainder of such= =20 NYMEX ACCESSc trading session, and (2) there shall be no Temporary Trading Halt during a NYMEX ACCESSc trading= =20 session if, in the opinion of the President of the Exchange or his designee= ,=20 either the Triggering Event was not reflective of otherwise prevailing mark= et=20 conditions or a Temporary Trading Halt is unwarranted. __________________________________________________ Please click on the link below to indicate you have received this email. 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