05/16/2002
Prompt response to this matter is urgent so that coordination of all matters (i.e., admission, training, booth allocation, etc.) can be completed prior to the launch of the NYMEX e-miNY Futures Contract, which is tentatively scheduled for June 2002.
A copy of the terms and conditions of the NYMEX e-miNY Trading Rights Program, as well as the request form is attached.
NYMEX e-miNY FLOOR TRADING RIGHTS PROGRAM
Number of Floor Trading Rights
Up to 60 e-miNY Floor Trading Rights will be made available to NYMEX Members and Member Firms. If the program is oversubscribed, the Exchange, in its sole discretion, reserves the right to expand the program to add more floor trading rights (as needed).
Allocation of Trading Rights/Booths
Written requests for e-miNY Floor Trading Rights submitted by Members and/or Member Firms, in the form attached hereto, and received by the Special Committee on e-miNY Trading Rights by May 24, 2002, shall be considered. The Committee shall allocate e-miNY Trading Rights to those Members and Member Firms that, in its discretion, demonstrate the greatest ability to provide liquidity to the NYMEX e-miNY contracts. The Committee shall, in its review, take into consideration, among other things, volume traded in the underlying futures contracts, and financial resources.
Upon determination of the Special Committee on e-miNY Trading Rights to allocate an e-miNY trading right, the NYMEX Member/Member Firm shall, within 7 days, submit to the Membership Department a completed application on behalf of the individual who will act as the Member/Member Firm's e-miNY "Designee". A fee of $500 will be charged to process each application. Upon acceptance and approval of such Designee's application by the Vice President of Member Services and the fulfillment of such other conditions as the Exchange may determine (including but not limited to successful completion of the "e-miNY training program"), such Designee shall be entitled to all rights and benefits and subject to all obligations applicable pursuant to the terms and conditions of the NYMEX e-miNY Trading Rights Program.
The Facilities Committee will review requests for e-miNY trading booths and allocate such booths with the goal of accommodating all requests. Only approved Designees will be permitted to occupy and/or otherwise utilize an e-miNY trading booth.
Cost of Trading Rights
A fee of $1,000 per month (per trading right) shall be charged to the Member/Member Firm to whom an e-miNY trading right has been allocated. Members/Member Firms will be responsible for providing their own equipment and front-end infrastructure in e-miNY trading booths necessary to connect to the Globex platform.
Nature of Trading Right
The e-miNY trading right granted by the Exchange shall confer limited authority on the Designee to initiate and enter NYMEX e-miNY trades on the Globex electronic trading platform and shall also permit the Designee to initiate and enter (but not personally execute) futures contracts, in the manner more specifically detailed below. Approval of an e-miNY trading right Designee shall not confer membership on the Designee and, except as specifically stated, shall not entitle the Designee to any privileges or benefits of membership.
The NYMEX e-miNY trading right shall confer limited authority on the trading right Designee to: 1) initiate, accept orders and enter trades in NYMEX e-miNY contracts on the Globex electronic trading system for the personal/house account of the NYMEX Member/Member Firm for which he is the Designee; 2) accept directly from NYMEX Member(s) (other than the NYMEX Member/Member Firm for which he is the direct Designee) on whose behalf he has been authorized to act, orders to buy and/or sell e-miNY contracts for such Member's personal account; and 3) initiate and enter orders, via hand signal, Exchange-approved headset or hand-held, order entry system, (but not personally execute) in the underlying futures contracts to arbitrage and/or hedge an e-miNY position.
All such orders entered (1,2 and 3 above) shall be identified with the proper CTI code. Designees may not directly or indirectly accept or enter into e-miNY contracts for the benefit of a person or entity that is not a NYMEX Member or Member Firm or for a Member or Member Firm for which he has not been otherwise authorized.
The number of contracts in the underlying futures that the Designee may enter shall not exceed a ratio of 1 (full) futures contract: 2.5* e-miNY contracts.
The NYMEX Member/Member Firm that has authorized an individual to act as his/its Designee shall accept into a trading account maintained at the Member/Member Firm's Primary Clearing Member all trades executed by such Designee as if such trades were executed by the Member/Member Firm himself/itself. The Member/Member Firm shall assume and accept financial responsibility for such trades in accordance with the By-Laws, Rules and Resolutions of the Exchange as if the Member/Member Firm executed such trades himself/itself.
The Member/Member Firm shall be responsible for the payment of all fees, fines and any other charges that may be assessed upon the trading right Designee. There shall be no other financial requirements imposed upon NYMEX e-miNY trading right Designees.
NYMEX e-miNY trading right Designees shall be prohibited from maintaining an individual trading account or executing, directly or indirectly, futures contracts traded on NYMEX except as specifically described above while acting in the capacity of an e-miNY Designee.
Revocation/Transferability of Floor Trading Rights
Trading rights shall not be transferable between Members and/or Member Firms. Upon the termination of the membership privileges of a Member/Member Firm that was issued an e-miNY trading right, the trading right shall automatically be revoked.
The Member/Member Firm that was issued an e-miNY trading right shall have the right any time during the term of the NYMEX e-miNY Trading Program to revoke all of his/its Designee's rights and privileges under the NYMEX e-miNY Trading Program. Upon such revocation, the Member/Member Firm may, within seven (7) days, submit a request to the Special e-miNY Trading Privileges Committee to maintain the trading right and to nominate another Designee. Failure to submit such request within the time prescribed or denial of the request will result in the automatic revocation of the trading right.
The Exchange reserves the right to terminate the program at any time, upon 60 days notice. The Exchange reserves the right to amend the terms and conditions of the program at any time. The Exchange may revoke any e-miNY trading right if the Member/Member Firm fails to meet the minimum maintenance requirements as more specifically described in a subsequent section of this document.
Submission to Jurisdiction and Rules of the Exchange
By accepting a NYMEX e-miNY trading right, the Member/Member Firm and Designee agree that they and any employee or agent of any of them shall be subject to the jurisdiction of the Exchange and shall comply with its By-Laws, Rules, and Resolutions, as may be amended from time to time, and shall be subject to Exchange disciplinary proceedings and arbitration proceedings pursuant to Exchange Rules.
As used herein, the term Rules means the Charter, Certificate of Incorporation, By-Laws, Rules, Regulations, Resolutions, Decisions and Orders of the NYMEX Division of the Exchange, and other terms defined in the Rules shall have the meanings specified therein.
Exchange Fees
Clearing and Exchange fees for NYMEX e-miNY futures contracts, shall be established by the Board and the Member/Member Firm in whose account the trades clear shall be responsible for the payment of such fees.
Duration of the NYMEX e-miNY Floor Trading Right Program
The duration of the NYMEX e-miNY trading right shall be one year commencing from the date that the first trading right is activated. Members/Member Firms allocated e-miNY trading rights pursuant to this program shall commit to participate in the program for one year unless the program is terminated sooner. The program may be extended, at the sole discretion of the Board of Directors.
Maintenance of NYMEX e-miNY Floor Trading Right
Each Member/Member Firm issued an e-miNY trading right, beginning on the Effective Date and continuing through the term of the e-miNY Trading Right Program, shall meet minimum volume performance and/or other requirements, the specific nature of which will be determined by the Special e-miNY Trading Rights Committee as function of the then prevailing market conditions. Satisfaction of such requirements will be subject to review by the Special Committee on e-miNY Trading Privileges on a quarterly basis.
In the event that a Member/Member Firm fails to meet the minimum volume and/or other performance requirements for any quarter period, or if at any time the program becomes oversubscribed, the Exchange reserves the right to revoke the trading right previously allocated to such Member/Member Firm should the Special Committee on e-miNY Trading Rights, in its sole discretion, determine that such Member/Member Firm's e-miNY executed volume is in the bottom 20% of the participants in this program.
In addition, in the event that a Member/Member Firm or a Designee thereof fails to comply with the trading limitations of the Program, the Special e-miNY Trading Rights Committee may, in its sole discretion, revoke the trading right.
Clearing Member Guarantee/Qualification
An e-miNY Designee shall not be eligible to execute NYMEX e-miNY futures contracts or enter orders for the execution of the underlying futures contracts on the floor unless the Primary Clearing Member of the Member/Member Firm in whose account the trades will clear executes such documents required by the Exchange agreeing to accept and clear in a separate account maintained by the Member/Member Firm for such purpose, all NYMEX e-miNY futures contracts executed by the Designee and all futures contracts orders entered by such Designee to arbitrage and/or hedge the Member/Member Firms e-miNY position.
Responsibility of Member/Member Firm for Designee
The Member/Member Firm authorizing an individual to act as his/its e-miNY trading rights Designee shall be unconditionally responsible and liable for any and all activities of the Designee in connection with business conducted on the Exchange.
NOTE: All requests must be received by the close of business May 24, 2002. Requests may be e-mailed to dlowe@nymex.com.
To the Members of the Special Committee on NYMEX e-miNY Trading Rights
Gentlemen:
Please accept this as a request for a NYMEX e-miNY trading right. It is intended that
________________________will serve as the Designee on the trading right.
(Name of Designee)
If approved, an application will be submitted to the Member Services Department within seven days of notification that I/we have been approved for allocation of a NYMEX e-miNY trading right.
Very truly yours,
_________________________________
Name of Member/Member Firm
_________________________________
Futures Contract Predominantly Traded
_________________________________
Floor Telephone & E-mail