|
|
Enron Mail |
Notice # 01-137
April 20, 2001 TO: All New York Mercantile Exchange Members and Member Firms FROM: Neal L. Wolkoff, Executive Vice President RE: Rule Changes to Implement enymex(sm) DATE: April 19, 2001 =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D Please be advised that the NYMEX Board of Directors has approved a number o= f=20 rule changes, which are summarized below, to incorporate the implementation= =20 of enymexK. These rule changes, which have been filed with the CFTC and thu= s=20 may become effective at any time, will be implemented upon the launch of=20 enymexK. An unmarked version of these rule changes can be found on the Exchange=01,s= =20 website. A hard copy =01&black-line=018 version of the rule changes, which= shows=20 changes from the current rules, can be obtained by calling Kelly Ann Neeson= =20 at (212) 299-2217 in the Exchange=01,s Legal Department. The rule changes include the following areas: trading; position limits,=20 accountability and reporting; arbitration, Clearing Member obligations and = a=20 summary disciplinary procedure for denial of access. Trading Rules A number of changes are being made to existing rules to reflect the roll-ou= t=20 of enymexK, such as expanding such rules to cover both NYMEX ACCESS7 and=20 enymexK. For example, the NYMEX ACCESS7 error trade rule has been retitled= =20 and revised to cover error trades occurring on either system. EFP and EFS. Similarly, Rule 6.21B and 6.21C are the Exchange=01,s rules th= at=20 respectively govern EFP and EFS transactions for futures contracts traded= =20 only on NYMEX ACCESS7, i.e., electricity futures contracts. These rules wi= ll=20 now also govern enymexK EFP and EFS transactions. Settlement Procedures. New NYMEX Rule 6.52E (=01&enymexK Settlement Price= =20 Procedures=018) was modeled upon the current settlement price rule for=20 electricity contracts trading only on NYMEX ACCESS7. Thus, settlement price= s=20 generally would be determined manually by the Settlement Committee, or if t= he=20 Settlement Committee was not available, by Exchange staff using the same=20 criteria used by the applicable Settlement Committee. However, one=20 difference is that the electricity settlement rule provides that no=20 settlement price shall be established that would be lower than the best bid= =20 or higher than the best offer that: (a) was for at least twenty-five (25)= =20 contracts, and (b) had been posted with the Exchange and remained available= =20 for execution and unfilled for the final 30 minutes of trading. By=20 comparison, new NYMEX Rule 6.52E contains more general language that would= =20 allow the Exchange to customize for each enymexK contract the bids and offe= rs=20 that would be protected in the settleme! nt! process. Position Limits, Accountability and Reporting. With regard to the four=20 physical delivery enymexK crude oil contracts, the amendments to NYMEX Rule= s=20 9.26 and 9.27 provide for position accountability in the back months and a= =20 spot month limit of 2,000 contracts for each of these four contracts. Also= ,=20 the Exchange=01,s current hedge exemption procedures will be made applicabl= e to=20 the enymexK contracts. With regard to the cash-settled enymexK contracts, t= he=20 rule amendments provide for position accountability across all contract=20 months. The amendments to Rule 9.34 establish a reporting level of 25=20 contracts for each enymexK contract, the same reporting level currently use= d=20 for many other Exchange contracts. However, NYMEX staff also has initiated= =20 discussions with CFTC staff regarding possible regulatory relief to exempt= =20 market participants from these reporting requirements to the CFTC for the= =20 cash-settled contracts. Brokerage and Clearing Member Financial Responsibility. As to brokerage, ne= w=20 Rule 9.04A (=01&enymexK Trading=018) permits brokerage to be done for enyme= xK=20 products. Section (C) of new Rule 9.04A clarifies that a Clearing Member= =20 will be financially responsible for trades done for each account it carries= ,=20 even if there is a system malfunction. Arbitration Rules The Exchange=01,s arbitration rules are being amended to reference Non-Memb= er=20 enymexK Users and to provide that disputes between a Member and a Non-Membe= r=20 enymexK User or between Non-Member enymexK Users would be subject to Exchan= ge=20 arbitration on a permissive rather than on a mandatory basis. Summary Disciplinary Procedures The sole disciplinary sanction that would be applicable to a Non-Member=20 enymexK User would be denial of further direct access to the system. =20 Consistent with this approach, new Exchange Rule 8.99A establishes a summar= y=20 disciplinary procedure that would allow the Exchange to take action when=20 necessary on an expedited basis. Please note that Exchange Members who are enymexK Users also will continue = to=20 be subject to Exchange rules. If you have any questions concerning these rules, please contact Christophe= r=20 K. Bowen, Senior Vice President and General Counsel, NYMEX Legal Department= ,=20 at (212) 299-22200; or Brian Regan, Senior Associate General Counsel, NYMEX= =20 Legal Department, at (212) 299-2207. __________________________________________________ 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(01-137)" 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.
|