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Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: exchangeinfo@nymex.com X-To: sara.shackleton@enron.com X-cc: X-bcc: X-Folder: \Sara_Shackleton_Dec2000_June2001_1\Notes Folders\Notes inbox X-Origin: SHACKLETON-S X-FileName: sshackle.nsf Notice No. 00-372 November 6, 2000 TO: All COMEX Members/Member Firms All COMEX Clearing Members All COMEX Floor Traders All COMEX Operations Managers FROM: Michael Campanelli, Vice President, Floor Operations, COMEX Division RE:Options Expiration Operational Procedures for the Trading Floor and=20 Clearing Members ___________________________________________________________________________= ___ The expiration date for the December 2000 options contract for Silver (SO Z= 0)=20 and Gold (OG Z0) is Friday, November 10, 2000. GENERAL OPERATIONAL PROCEDURES All Clearing Members and Qualified Floor Traders that carried an options=20 position as of the close of business day prior to the expiration day, or=20 engaged in trading activity on Expiration Day in the expiring options=20 contract will be required to have a knowledgeable, duly authorized on-line= =20 trade entry (OLTE) system trained representative available= =20 until released by the Exchange staff. All adjustments and/or corrections,= =20 must be accompanied by relevant supporting documentation prior to being=20 incorporated into expiration processing. In essence, making the expiration= =20 processing an extension of the afternoon trade resolution procedures. Exchange Clearing (299-2110) and Trade Processing (299-2465 and 299-2044)= =20 personnel will be available to assist with the processing of notices of=20 Exercise and Abandonment, position transfers, trade corrections and other= =20 questions or problems you may have. Failure by any Clearing Member or qualified Floor Trader to comply with=20 procedures as outlined herein may result in severe disciplinary action by t= he=20 Exchange and potential financial liability to customers or members for=20 failure to exercise diligence in the processing of information. TRADING FLOOR OPERATIONAL PROCEDURES Trading in the December 2000 Silver and Gold Options Contracts will cease a= t=20 2:25 P.M. and 2:30 P.M. respectively on November 10, 2000. All Brokers and= =20 Traders must inform their Clearing Members of their intentions to exercise = or=20 abandon such Options by 4:00 P.M. On Friday, November 10, 2000, all Brokers and Clearing Members must have a= =20 duly authorized, On-Line Trade Entry (OLTE) system trained= =20 representative available until such time as the Exchange deems necessary. NOTE: After 4:30 P.M. all expiring option trade data must be inputted on=20 special OLTE terminals located in the Trade Processing Room= .=20 Any other means of submission will be rejected by the Exchange. Members wi= ll=20 be able to submit all other trade data until 5:00 P.M. After the UTR and the Preliminary Spot Month Matched Trade Reports are=20 displayed, Clearing Member representatives will be able to pick up their=20 Preliminary Clearing reports at the Clearing Department. A final review of all submissions will be made, the Supervisor of the Trade= =20 Processing Room will detain only those Clearing Members and/or Broker=20 representatives involved. All final corrections will be made at this time= =20 and upon determination of the Supervisor that all option processing is=20 complete, all representatives will be released. Exchange Reports based on Friday=01,s submissions and processing will be=20 available on Monday morning November 13, 2000. In the event that you have any questions regarding the foregoing trading=20 floor procedures please contact Michael Campanelli at (212) 299-2072 or Dav= id=20 Sherman at (212) 299-2061. CLEARING DEPARTMENT OPERATIONAL PROCEDURES 1. OPEN POSITION CONFIRMATION (OPC) - The OPC should reflec= t=20 as accurately as possible all futures and options gross positions as of=20 close-of business on the business day prior to expiration. Review the=20 estimated current gross positions as shown and make appropriate adjustments= . =20 The OPC must be submitted not later than 9:00 AM. 2. OPTIONS EXERCISE/ABANDONMENT REQUEST FORM (E/A) - An= =20 expiring option with a strike price in-the-money by one tick or more will b= e=20 subject to automatic exercise unless an Option Abandonment Request form is= =20 submitted advising that a Clearing Member (CM) elects to=20 abandon some or all of its position in that strike price (i.e., for the=20 option series). All other options series in the expiring month will be=20 subject to automatic abandonment unless an Option Exercise Request form is= =20 submitted. When submitting an E/A form, please note the following: (a) An E/A form must be submitted not later than 5:00 PM. (b) Do not submit an Exercise form for positions in strike prices, which ar= e=20 subject to automatic Exercise nor submit an Abandonment form for positions in strike prices, whi= ch=20 are subject to automatic abandonment. © If a CM wishes to submit an E/A form to abandon a position in a strike= =20 price subject to automatic exercise or wishes to exercise a position in a= =20 strike price which is out of the money, it is necessary to notify Clearing = by=20 telephone of such anticipated action. The CM must have an officer availabl= e=20 to confirm such intention. (d) CMs may secure from Clearing a time-stamped receipt of the CM copy to= =20 assure submission of the CMs E/A forms. 3. OPTION POSITION REDUCTION REQUEST FORM (OPRR) - As a=20 general rule, purchases and sales of option contracts are presumed to be ne= w=20 business. If some or all of your purchases and sales are in fact undertak= en=20 for position liquidation purposes, OPRR forms may be submitted on the day o= f=20 expiration and will be used in conjunction with trade data to reduce your= =20 projected position in an expiring contract. OPRR requests in excess of=20 actual traded volume will be rejected. Exception: Cabinet trades and cance= l=20 correction trades will automatically liquidate existing positions, therefor= e=20 do not submit an OPRR form for cabinet or cancel correction trades. The OPRR form must be submitted not later than 5:00 PM. 4. HOUSE/CUSTOMER POSITION TRANSFER REQUEST FORM (H/C) - H/= C=20 forms may be used only to transfer previously cleared contracts between a= =20 CMs house and customer accounts. Problem trades (those which have n= ot=20 cleared prior to expiration day), must be corrected using COMEXs=20 on-line trade entry system under the direct supervision of the Trade Audits= =20 Department of COMEX (Trade Audits). The H/C form must be= =20 submitted not later than 3:30 PM. 5. EX-PIT POSITION TRANSFER REQUEST FORM (Ex-Pit) - Ex Pit= =20 forms may be used only to transfer previously cleared contracts between CMs= . =20 Problem trades (those which have not cleared prior to expiration day), must= =20 be corrected on the on-line trade entry system under the direct supervision= =20 of Trade Audits. The Ex-Pit form must be submitted not later than 3:30 PM. ***** A) At approximately 4:15 PM, two PRELIMINARY reports of the expiration=20 process will be available for distribution at the Nymex Clearing Department= : 1. OPTION EXPIRATION REPORT AND CONFIRMATION - The purpose of this report i= s=20 to project the CMs present position going into the expiration based= =20 upon the transactions which have already been submitted to Clearing. CMs= =20 should review and modify their adjusted gross positions as of=20 close-of-business on the business day prior to expiration. Further=20 adjustments may be submitted not later than 5:00 PM. The projected ending= =20 gross positions will reflect transactions accepted or rejected for clearanc= e=20 on expiration night, inclusive of Ex-Pit, H/C and OPRR transactions which= =20 have been submitted to Clearing prior to 3:30 PM, and trade information=20 submitted to COMEX prior to 3:45 PM. Normally, this report will also refle= ct=20 manually submitted Exercise and Abandonment instructions, the projected=20 number of exercises and maximum potential assignments for each strike price= ,=20 the type of exercise (manual or automatic), whether the strike is In, At or= =20 Out of the money, and the exerc! is! e value associated therewith based on settlement prices established by COME= X=20 on the day of expiration. 2. TRANSACTION LISTING - This listing will include in detail all expiring= =20 option trades submitted to COMEX prior to 3:45 PM on expiration day, and al= l=20 H/C, ExPit, OPRR and E/A transactions submitted to Clearing Prior to 3:30 P= M. Please note: Trade information reflected on the option expiration report an= d=20 transaction listing are trades submitted only. To inquire whether trades ha= ve=20 matched, each CM must review the trade reports provided by COMEXs= =20 On-Line Trade Entry (OLTE) system. B) At approximately 5:30 PM, FINAL reports of the expiration process,=20 including all submissions to Clearing and trade information submitted to=20 COMEX made by 5:00 PM, will be available for distribution at the Nymex=20 Clearing Department. C) At 5:45 PM, Preliminary In The Money Abandonment and Out Of The Money=20 Exercise information will be announced on Fast Facts. D) At Approximately 7:30 PM, a Final Notice of Exercise/Assignments will be= =20 available in each CMs lockbox located at the Nymex Clearing=20 Department. Each CM, which has exercised or been assigned one or more=20 options will receive a separate statement showing exercises and/or=20 assignments for each option series. Please check this statement carefully.= =20 Although long options positions in-the-money by one tick or more will be=20 automatically exercised, not all short option positions will be assigned if= =20 there are any options manually abandoned at such strike prices. Please not= e=20 that there also may be some at or out-of-the money options being exercised. E) At approximately 9:00 PM, the final set of clearing sheets will be=20 available in each CMs lockbox located at the Nymex Clearing=20 Department. It is strongly recommended that each CM have a representative(s) that is=20 properly trained to handle the option expiration process available beginnin= g=20 at 4:15 PM and who will receive the CMs reports at the specific=20 times. It is solely the responsibility of the CM to review these reports a= nd=20 to notify the Clearing staff immediately of any discrepancies. To obtain the exact time of the availability for each report, clearing=20 members should call (212) 513-7405, access code 702. The announcement time= =20 will occur  hour prior to availability. Attached please find a Clearing Member Procedure Summary for ease of=20 reference. Please contact John Ramos at (212) 299-2142 (Members 001-500) o= r=20 Mel Garcia at (212) 299-2144 (members 501-999) if you have any questions. OPTION EXPIRATION PROCESSING CLEARING MEMBER PROCEDURE SUMMARY Time: 3:30 PM Activity: Expits, H/C transfers, Option Position Reduction and=20 Exercise/Abandon notices Event: Submission to Clearing cutoff time. Notes: Final cutoff for Expits and H/C tranfers Time: 3:45 PM Activity: Call Fast Facts to obtain availability time of Preliminary Option= =20 Expiration Reports. Event: Fast Facts notice of Availability Time: 4:15 PM Activity: Preliminary option expiration reports available to clearing membe= rs=20 at NYMEX Clearing Department Time: 5:00 PM Activity: Options Position Reduction, Exercise/Abandon notices and Gross=20 Position Adjustments Event: Submission to Clearing Cutoff Time Notes: Final cutoff for Option Position Reduction, Exercise/Abandon notices= =20 and Gross Position Adjustments Time: 5:05 PM Activity: Call Fast Facts to obtain availability time of Final Preliminary= =20 Option expiration Reports Event: Fast Facts notice of Availability Time: 5:30 PM Activity: Final Preliminary option expiration reports available to clearing= =20 members at NYMEX Clearing Department. Time: 5:45 PM Activity: Call Fast Facts to obtain Preliminary In the Money Abandonment an= d=20 Out of the Money Exercise Information Event Fast Facts notice of information Notes: New Event Time: 6:00 PM Activity: Corrections to previously Submitted Adjustments or Notices Event: Correction period cutoff time (30 minutes after final preliminary=20 report is distributed) Notes: Final cutoff for corrections Time: 7:00 PM Activity: Call Fast Facts to obtain availability of final expiring option= =20 position and Exercise/Assignment report Event: Fast Facts notice of Availability Time: 7:30 PM Activity: Final expirating options position and Exercise/Assignment report= =20 available in clearing member's lockbox at NYMEX Clearing Department Time: 8:30 PM Activity: Call Fast Facts to obtain availability of final clearing reports. Event: Fast Facts notice of Availability Time: 9:00 PM Activity: Final clearing reports available in clearing member's lockbox at= =20 NYMEX Clearing Department. Please contact John Ramos at (212) 299-2142 (Members 001-500) or Mel Garcia= =20 at (212) 299-2144 (members 501-999) if you have any questions. __________________________________________________ Please click on the link below to indicate you have received this email. "http://208.206.41.61/email/email_log.cfm?useremail=3Dsara.shackleton@enron= .com& refdoc=3D(00-372)" Note: If you click on the above line and nothing happens, please copy the text between the quotes, open your internet browser, paste it into the web site address and press Return.
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