10/11/2000
As you are aware, in the near future, the Exchange plans to merge the two divisions onto one trade processing platform. The COMEX Division will replace its On-Line Trade Entry (OLTE) system with the NYMEX Trade Management System (TMS).
While final details are being determined; certain procedural aspects of the transition process can begin. Therefore, effective immediately, the following should be considered:
Single Sided Concept
The source document for TMS will be the trading card. Floor staff will collect the original white copies and forward them to the Exchange Trade Data Entry area where operators will key the sell side trades. The trading cards will no longer be forwarded to the Primary Clearing Members (PCM’s); instead they will be retained by the Exchange (THIS WILL BEGIN WITH TMS IMPLEMENTATION ON COMEX). Each sell side will generate a buy side. The broker’s staff will be responsible for Account Assignment, Trade Checkout and Corrections (in addition, for buy side trades it will be necessary to add the execution time).
Implementation In accordance with the implementation of TMS, members must begin to use new trading card recordation procedures developed to facilitate data input.
Implementation Schedule
The COMEX Division will implement TMS for ALL COMMODITIES in the near future. WE ASK THAT ALL MEMBERS BEGIN USING THESE RECORDATION PROCEDURES IMMEDIATELY, to ensure readiness when TMS implementation takes place.
This will allow members to familiarize themselves with the new recordation procedures and enable the Exchange’s Trade Processing staff to review the handwriting/recordation techniques of the COMEX Division’s membership prior to launch. During this interim period, if necessary staff will contact members regarding their handwriting or lack of adherence to procedures. In addition, staff will begin to familiarize members’ clerks with TMS functionality.
Spread Processing
TMS will process all the legs of a spread as one transaction. To accomplish this it is essential for the broker to clearly designate seller status on the trading card when he/she is the seller of the spread (see recordation procedures noted below). This indication will inform data entry personnel to enter the entire spread (buy and sell components). Opposite buy spreads (not keyed by the Exchange) that are linked to a seller status will be generated by the system.
NOTE: When submitting cards for data entry, the differential must be indicated or it will be rejected. If the differential is noted without prices for either leg, the system will assign the appropriate market pricing to both legs based on the most recent price reports. If the differential is noted along with the price of one of the legs, the system will assign an appropriate price to the other leg.
Recordation Procedures
For the purpose of standardization within the community, the following trading card recordation procedures must be used by the brokers:
ALPHA CODES ONLY
*TMS does not recognize numeric broker codes, therefore use only the appropriate alpha broker codes for trading card recordation and trade processing.
SPREADS (MULTIPLE LEG TRADES)
*Place the value of the spread (differential) in the bottom portion of each entry line’s center field. Circle the spread value. This will inform data entry personnel that the trade is a spread (see e.g. 1).
NOTE: Failure to place a circled differential in the spread box will result in the entry of the sell leg only as an outright trade.
*Place a slash through the circled differential if you are the buyer of the spread. This will inform data entry personnel to ignore the spread (see e.g. 2).
*Attach a line to either of the above mentioned indicators when a multiple leg spread is involved; for example: Butterflies; this will convey that all the components are part of one entity (see e.g. 3).
CABINET TRADES
*Place "CAB" or "C" in the premium column (see e.g. 4).
CONVERSIONS
*Place the option components on one line. The futures component price must be written on the next line, across the Strike and Premium columns (see e.g. 5).
MATCHED ORDERS
*Place "MO" in the price column (see e.g. 6).
Trades submitted to the Exchange as MO transactions will initially receive the previous day’s settlement prices until the current day’s settlement prices are determined and immediately applied.
EXCHANGE FOR PHYSICAL "EFP’S"
*Place "EFP" or "E" in the (SPD) box (bottom portion of each entry lines center field) (see e.g. 7).
Crossing of Orders
Place a "Y" in the spread (SPD) box (see e.g. 8 line A), except when crossing an EFP, at which time the letters "EFP" must be indicated instead. (see e.g. 8 line B). Additionally, it will not be necessary to denote a "Y" for cross trades that require the recordation of a differential.
Note: The clearing information related to a short code that is data entered by the Exchange will only apply to the sell portion of the cross trade. The buy side will require subsequent allocation in a typical manner.
Strip Trades
Place the beginning and ending months in the month columns of successive trade lines, with the average price indicated in the price column. Write *STRIP* adjacent to the bracketed trade data to highlight the trade type for data entry personnel. (see e.g. 9).
Note: The recommended recordation procedures for various additional types of trades are shown in examples 10 through 20.
(10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20)
Short Codes
When it is possible the account area on the card should be used to indicate the appropriate short code. The Exchange will data enter the sellers short code and the corresponding account assignment information will be generated.
Note: When a short code is provided as part of spread sellers sell leg information, the allocation will be applied to both the sell leg and the buy leg. If the buy is intended for the same customer but a different clearing member, a reallocation will be necessary.
Trading Months
1st occurrence - month symbol
2nd occurrence - circled month symbol
Beyond 2nd occurrence - month symbol plus the last digit of the appropriate year.
Trading Card Submission Requirements
Cards must be submitted within 15 minutes of the time of execution of the first trade (buy or sell) recorded on the card. For example a trade executed at 10:15 a.m. must be submitted no later than 10:30 a.m. Submission performance will be monitored by the Exchange and those brokers deemed non-diligent will be subject to disciplinary action.
Note: Cards that include trades executed during either the close or post-close, must be submitted within 5 minutes of the bell marking the end of each period.
Trading Ring Change Submission Procedure Cards must be submitted to the ring in which the trades appearing on them were executed. Therefore, in cases when a broker intends to leave one ring to trade in another, prior to leaving if he/she has a partially completed card it must be submitted in the ring he/she is departing.
Trading in a Multiple Commodity Ring
Trades that are recorded on a trading card that differ from the commodity indicated on the heading of the card, should include the commodity name, for example: ALUMINUM, written adjacent to the trade details on the same entry line (see e.g. 21).
Audit Trail Timing
Every trade whether buy or sell, must have an accurate trade time. There is no change to the audit trail timing methodology. Just as is current practice, the execution times indicated by the broker on his/her trading cards will continue to be compared to the Exchange Times and Sales as well as the opposite broker’s execution times.