Client Management Advisory Notice
From | Client Management
Subject | CME Update 02-06, III. Board Approves Modifications To CME Rules To Implement CME-NYMEX Trading Arrangement.
Effective Date | 06/28/02
Notice Number | CM#0258
III. BOARD APPROVES MODIFICATIONS TO CME RULES TO IMPLEMENT CME-NYMEX TRADING ARRANGEMENT At its Regular Meeting on Wednesday, June 12, 2002, the Board of Directors approved modifications to several CME Rules which are designed to implement the CME-NYMEX trading arrangement. A brief discussion of the rule modifications is set forth below. CME Rule 578 (Limitation of Liability, No Warranties) CME Rule 578 was modified to provide that NYMEX will not be liable for losses that may be incurred by a member or customer if such loss was specifically caused by CME staff negligence or the failure, malfunction or suspension of a CME system, service or facility. 2. CME Rule 579 (GLOBEX� Control Center) Currently, CME members and clearing members are allowed to contact the GLOBEX Control Center ("GCC") for customer support and problem management so long as they are identified as "Registered Contracts" with GCC. By way of agreement, NYMEX members and clearing members who are registered with the GCC as Registered Contracts may also contact GCC for customer support and problem management related to contracts traded on GLOBEX. 3. GLOBEX Error Trade Policy NYMEX members and clearing members trading on GLOBEX will be subject to the GLOBEX Error Trade Policy. The Error Trade Policy has been modified to include the error trade no bust range for the applicable NYMEX Mini contracts traded on GLOBEX. The initial no bust ranges for NYMEX Light Sweet Crude Oil and Natural Gas mini contracts traded on GLOBEX shall be 6 ticks or less. The text of the modified rules is set forth below with additions underlined and deletions lined out. The rule modifications are effective immediately. 578. LIMITATION OF LIABILITY, NO WARRANTIES A. EXCEPT AS PROVIDED BELOW, THE EXCHANGE AND THE NEW YORK MERCANTILE EXCHANGE INC. (INCLUDING THEIR SUBSIDIARIES AND AFFILIATES), THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, CONSULTANTS, LICENSORS, MEMBERS, CLEARING MEMBERS, AND THEIR OFFICERS, DIRECTORS AND EMPLOYEES SHALL NOT BE LIABLE TO ANY PERSON FOR ANY LOSSES, DAMAGES, COSTS OR EXPENSES (INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS, LOSS OF USE, AND DIRECT, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES), ARISING FROM: (i) ANY FAILURE, MALFUNCTION, FAULT IN DELIVERY, DELAY, OMISSION, SUSPENSION, INACCURACY, INTERRUPTION, TERMINATION, OR ANY OTHER CAUSE, IN CONNECTION WITH THE FURNISHING, PERFORMANCE, OPERATION, MAINTENANCE, USE OF OR INABILITY TO USE ALL OR ANY PART OF ANY OF THE EXCHANGE�S SYSTEMS, SERVICES, EQUIPMENT OR FACILITIES USED TO SUPPORT SUCH SYSTEMS AND SERVICES, INCLUDING WITHOUT LIMITATION GLOBEX�2, CUBS�, TOPS�, CLEARING 21�, GLOBEX CONTROL CENTER�, GALAX-C�; OR (ii) ANY FAILURE OR MALFUNCTION, FAULT IN DELIVERY, DELAY, OMISSION, SUSPENSION, INACCURACY, INTERRUPTION OR TERMINATION, OR ANY OTHER CAUSE, OF ANY EXCHANGE SYSTEM, SERVICE OR FACILITY CAUSED BY ANY THIRD PARTIES INCLUDING, BUT NOT LIMITED TO, INDEPENDENT SOFTWARE VENDORS AND NETWORK PROVIDERS; OR (iii) ANY ERRORS OR INACCURACIES IN INFORMATION PROVIDED BY THE EXCHANGE OR ANY EXCHANGE SYSTEM, SERVICE OR FACILITY; OR (iv) ANY UNAUTHORIZED ACCESS TO OR UNAUTHORIZED USE OF ANY EXCHANGE SYSTEM, SERVICE OR FACILITY BY ANY PERSON. THE FOREGOING LIMITATION OF LIABILITY SHALL APPLY WHETHER A CLAIM ARISES IN CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY, CONTRIBUTION OR OTHERWISE AND WHETHER THE CLAIM IS BROUGHT DIRECTLY OR AS A THIRD PARTY CLAIM. THE FOREGOING LIMITATION OF LIABILITY SHALL BE SUBJECT TO THE COMMODITY EXCHANGE ACT AND REGULATIONS THEREUNDER. A PARTY WHO HAS BEEN FINALLY ADJUDICATED TO HAVE ENGAGED IN WILLFUL OR WANTON MISCONDUCT MAY NOT AVAIL ITSELF OF THE PROTECTIONS IN THIS RULE. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS PROVIDED BY THE EXCHANGE AND THE NEW YORK MERCANTILE EXCHANGE INC. (INCLUDING THEIR SUBSIDIARIES AND AFFILIATES), THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, CONSULTANTS, AND LICENSORS RELATING TO ANY EXCHANGE SYSTEMS, SERVICES, EQUIPMENT, OR FACILITIES, USED TO SUPPORT SUCH SYSTEMS OR SERVICES, INCLUDING THE GLOBEX SYSTEM, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR USE. [No further changes to Rule 578] * * * * * 579. GLOBEX CONTROL CENTER A. Customer Support The GLOBEX Control Center ("GCC") provides GLOBEX customer support and problem management only to members, clearing members and customers designated by clearing members. In addition, designated NYMEX members and clearing members may also receive customer support and problem management from GCC with respect to contracts traded on GLOBEX. In order to be eligible for GCC support, such persons must register with the GCC ("Registered Contacts"). The GCC provides customer support via a specified telephone number and during specified hours. GCC employees may not always be available to assist Registered Contacts. Persons other than Registered Contacts, including non-members with GLOBEX access pursuant to Rule 574.C, must contact their clearing firms to make support requests. [No further change to Rule 579] * * * * * CME GLOBEX ERROR TRADE POLICY A. Policy for Futures Contracts Traded Outside Pit Trading Hours Part A of the GLOBEX Error Trade Policy applies to futures contracts that are traded on GLOBEX outside pit trading hours. Pit trading hours are those when the contract in question or a comparable contract is traded by open outcry on the CME's trading floor. For example, the pit trading hours for Eurodollar futures are from 7:20 a.m. to 2:00 p.m. (Chicago time). * * * * * [No changes from Section A.1. through Section G.] GLOBEX Error Trade Tick Range List
Futures Contract | No Bust Range
Eurodollar (1st 8 quarterly months and all serial months) | 2.5 basis points or less
Eurodollar (9th quarterly month and on out) | 5 basis points or less
Euro-Canada | 6 basis points or less
Libor | 2.5 basis points or less
T-Bills | 2.5 basis points or less
Fed Fund "Turn" | 50 basis points or less
Mexican CETES | 30 basis points or less
Mexican TIIE | 30 basis points or less
Agency Notes | 16 ticks or less
All Brady Bonds | 20 ticks or less
All Currency Futures | 20 ticks or less
S&P 500 and E-Mini S&P 500 | 4.00 index points or less
S&P Barra Growth | 1.00 index point or less
S&P Barra Value | 1.00 index point or less
MIDCAP | 400 0.40 index point or less
Mexican IPC | 8.00 index points or less
Russell 2000 and E-Mini Russell 2000 | 0.40 index point or less
Nasdaq 100 and E-Mini Nasdaq 100 | 16.00 index points or less
Fortune e�50 | 4.00 index points or less
S&P TOPIX 150 | 3.00 index points or less
Goldman Sachs Commodity Index | 1.50 index points or less
CME QBI | 2.00 index points or less
CME Degree Days Index | 10.00 index points or less
Pork Cutout | $0.01 per pound or less
Fresh Pork Bellies | $0.015 per pound or less
Lean Hogs | $0.0097 per pound or less
Live Cattle | $0.0097 per pound or less
Feeder Cattle | $0.0097 per pound or less
NYMEX Light Sweet Crude Oil Mini | 6 ticks or less
NYMEX Natural Gas Mini | 6 ticks or less
[No further changes to the Policy] If you have any questions, please contact Mr. Stephen Szarmack, Associate General Counsel, Legal Department at 312-648-5422.