01/08/2001
The rules, as amended, now include prohibitions on the disclosure and use of material, non-public information obtained by consultants to the Exchange. In addition, members of the Board of Directors, Committee Members, and consultants are precluded from trading for their own account, or for or on behalf of any other account on the basis of any material, non-public information that such person knows was obtained in violation of NYMEX Rule 3.02 from a governing board member, committee member or consultant.
The amendments to these rules are now in effect. A copy of amended NYMEX Rule 3.02 ("Non-Public Information") and NYMEX Rule 6.31A ("Trading Prohibition") is attached.
Rule 3.02 RESTRICTIONS ON *GOVERNING* BOARD *MEMBERS,* [AND] COMMITTEE MEMBERS *,* *CONSULTANTS, AND OTHER PERSONS* WHO POSSESS MATERIAL, NON-PUBLIC INFORMATION
(asterisks are additions and brackets are deletions)
(A) *(1)* No member of the Board of Directors or any Committee of the Exchange *or any Consultant* shall use or disclose, for any purpose other than the performance of such [member’s] *person’s* official duties relating to the Board, [or such] Committee, *or as a Consultant*, material non-public information obtained as a result of such [member’s] *person’s* participation on the Board, [or such] Committee, *or as a Consultant.*
(2) *No person shall trade for such person’s own account, or for or on behalf of any other account, in any commodity interest, on the basis of any material, non-public information that such person knows was obtained in violation of subsection (A) of this section from a governing board member, committee member, or consultant.*
(B) The terms "material information" and "non-public information" shall have the same meaning as defined for those terms in Commission Regulation 1.59, as it may be in effect from time to time.
(C) *Definitions*:
*(1) "Governing board member" means a member, or functional equivalent thereof, of the board of governors of a self-regulatory organization.*
*(2) "Committee member" means a member, or functional equivalent thereof, of any committee of a self-regulatory organization.*
*(3) "Consultant" means a person who serves in the capacity of a consultant for either the Board of Directors or the Exchange.*
(D) Additionally, the following items shall be kept confidential if the Board’s majority deems the item confidential at the time of a Board meeting and the same is reflected in the minutes of the meeting:
(1) Deliberations and discussions;
(2) Votes, including the number and identity of the voters; and
(3) Issues requested to be included in future Board meeting agendas.
Rule 6.31A. TRADING PROHIBITION FOR EXCHANGE EMPLOYEES
(asterisks are additions and brackets are deletions)
*(A)(1) For the purpose of this Rule 6.31A, "employee" shall mean any person hired or otherwise employed on a salaried or on a contract basis by the Exchange, but does not include:*
(i) *Any governing board member, or functional equivalent thereof, compensated by a self-regulatory organization solely for governing board activities; or*
(ii) *Any committee member, or functional equivalent thereof, compensated by a self-regulatory organization solely for committee activities; or*
(iii) *Any consultant hired by a self-regulatory organization, and as defined in NYMEX Rule 3.02.*
(2) The terms "material information" and "nonpublic information" shall have the same meaning as defined for those terms in Commission Regulation 1.59, as it may be in effect from time to time.
(B)[(1)] No employee of the Exchange may disclose to any other person any material nonpublic information which said employee obtains as a result of his employment by the Exchange where said employee has or should have a reasonable expectation that the information disclosed may assist another person in trading any commodity futures or option contract, or cash commodity traded on or subject to the rules of a contract market; Provided, however, that this Section (B) shall not prohibit disclosures made in the course of an employee's duties, or disclosures made to any linked exchange, court of competent jurisdiction, or a representative of any agency or department of the federal or state government acting in his official capacity.
[(2) No employee of the Exchange shall trade for such person’s own account, or for or on behalf of any other account, in any commodity interest, on the basis of any material, non-public information that such person knows was obtained in violation of subsection (B) of this section from an employee.]
(C) [An] *No* employee of the Exchange may [not] trade, directly or indirectly in the commodity futures or option contracts or any cash commodity traded on any exchange.
(D) The President, in his sole discretion, may exempt an employee from all or some of the provisions of Section (C) of this Rule, provided that said employee applies in writing for such an exemption and demonstrates to the satisfaction of the President that the employee meets all of the following qualifications:
(i) The employee's duties are principally ministerial, secretarial or clerical;
(ii) The employee does not have access in the course of his employment to material nonpublic information;
(iii) The employee agrees to furnish to the Exchange at the President's request account statements and other documents relevant to the employee's direct or indirect trading activities; and
(iv) The employee agrees to inform the President within one (1) business day of any material change of information that may affect the employee's qualification for such an exemption.
(E) Nothing contained in this Rule 6.31A shall prohibit an employee from participating in a pooled investment vehicle, as defined in 17 C.F.R. Sec. 1.59(a)(8), so long as the employee has no direct or indirect control with respect to transactions executed by such vehicles and complies with Section (B) of this rule.
(F) Each employee of the Exchange shall be required to adhere to the policies and Guidelines of the Exchange as in effect from time-to-time and shall, when and as requested, execute an acknowledgement of the Exchange's conflict of interest policy in the form provided by the Exchange.
Should you have any questions or require any further information, please contact exchangeinfo@nymex.com