11/17/2000
APPROVED AMENDMENTS TO NYMEX RULE 6.40A
(An asterisk indicates deletions; parentheses indicate deletions.)
Rule 3.47 AUDIT COMMITTEE
The Audit Committee shall be a regular committee and shall consist of the Chairman of the Board and *two*(three) Public Directors appointed by the Board. One of the Public Directors shall serve as Chairman of the Committee
The Audit Committee shall:
(i) *on* (On) an annual basis:
(a) make a recommendation to the Board of Directors regarding selection, retention and discharge of independent auditors for the ensuing year; and
*(b)* review the scope and general extent of the independent auditors’ examination, the significant audit procedures which will be utilized, and fees charged for their services. ((ii) Review the audited financial statements and discuss them with management and the independent auditors. These discussions shall include, but not be limited to, the matters required to be disclosed under Statement of Auditing Standards No. 61 (established by the Auditing Standards Board) and consideration of the quality of the Exchange’s accounting principles as applied in its financial reporting, including a review of sensitive accounting estimates, reserves and accruals, judgement areas, audit adjustments (whether or not recorded), and other such inquires as the Committee or the independent auditors shall deem appropriate. Based on such review, the Committee shall make its recommendation to the Board as to the inclusion of the Exchange’s audited financial statements in the Exchange’s Annual Report on Form 10-K.
(iii) Discuss with representatives of management and the independent auditors:
the interim financial information contained in the Exchange’s
Quarterly Report on Form 10-Q prior to its filing; and
the results of the review by the independent auditors.)
*(ii) on* (On) a monthly basis, or at such times as the Committee shall determine, but not less than twice each year, meet with the independent auditors, President, Senior Vice President of Finance, *Director* (Vice President) of Internal Audit and other personnel as the Committee deems appropriate to review: (a) the scope of the audit plan;
(b) the Exchange’s financial statements;
(c) the results of external and internal audits;
(d) the effectiveness of the Exchange’s system of internal controls;
(e) any limitations imposed by Exchange personnel on the independent auditors; and
(f) such other matters as the Committee shall deem appropriate upon advising the Executive Committee.
((v)) * review *(Review) the internal audit function of the Exchange, including proposed audit programs for the coming year, the coordination of such a programs with the independent auditors, the extent to which recommendations made by the internal auditors or by the independent auditors have been implemented, and management’s response to the recommendations of the independent *auditors;* (auditors.)
(vi) *(iv)review,* (Review,) at its discretion, compliance with codes of conduct established the * Exchange;*(Exchange.)
((vii)) * consult* (Consult) with the independent auditors, and when appropriate the * Director* (Vice President) of Internal Audit, out of the presence of management.
* establish * ((viii)Establish) direct communication between the auditors and the * Board; * (Board.)
((ix))* initiate* (Initiate,) at its discretion, investigations within the parameters of foregoing responsibilities, and for that purpose with the approval of the Board, retain outside legal counsel, independent auditors, or any other such experts as if may deem *appropriate; and* (appropriate.)
((x)) * report* (Report) to the entire Board at such time as the (Committee determines,) but not less than twice a year on the activities described in this Rule.