Notice to Members
Notice No. 170
06/10/2002
e-miNY Permit Program: Five To Two Ratio, Prohibition Against Designee Trading, Other Disciplinary Rules
Members conferring authority on a Designee to trade the e-miNY contract from a GLOBEX® electronic trading terminal located on the NYMEX floor, must set up a separate trading account (the "Special Trading Account") to clear all trades executed or authorized by the Designee. The Compliance Department will monitor activity in these Special Trading Accounts to ensure compliance with the following:

  • Orders placed by the Designee for full size futures contracts shall be limited to futures contracts related to the e-miNY contract (i.e. for a Natural Gas e-miNY contract, the related full size futures contract is a Natural Gas futures contract);


  • The ratio of full size contracts to e-miNY contracts authorized to be traded by the Designee must not exceed two full size contracts traded for every five e-miNY contracts traded in an arbitrage fashion. Scalping of full size contracts by a Designee is not permitted;


  • All orders from the Designee which are executed for related full size contracts shall be executed by a NYMEX Member authorized to accept orders from the Designee;


  • The executing NYMEX Member shall identify orders placed by the Designee for full size futures using a unique symbol relating to the Special Trading Account. That symbol shall be placed on the NYMEX Member's trading card, at the time of execution of the trade, before the related pit card is submitted to the Exchange;


  • Allocations to a Special Trading Account must be made from the trading floor using the account number established on GLOBEX for such Special Trading Account. This GLOBEX account number must be input on transfer information and thus, reflected on the Exchange's Trade Registers; and


  • Special Trading Accounts must be owned by the NYMEX Member who employs the Designee and maintained separately from the Member's other trading accounts;


  • Note: If a member, other than the owner of the Special Trading Account, executes an order for full size futures from a Designee, the executing member must designate the trade "type 3" and otherwise comply with the trade recordation and allocation procedures cited above;
Designees are considered floor employees of the Member and are not permitted to trade in any contract traded on the Exchange for their own accounts or for any account in which they have a beneficial interest. [NYMEX Rule 6.30(4)]. Members are responsible for the actions of persons they employ on the trading floor. [NYMEX Rule 6.30(5)]. Note that these prohibitions apply to all Exchange contracts, including e-miNY contracts traded over the GLOBEX® system. Relevant portions of the rules can be found on NYMEX's website.

Prohibition Against Trading Ahead of Orders

  • Members holding executable orders in NYMEX full size contracts may not trade on the same side of the market, for their personal account or any account they control, ahead of their customer orders or the orders of any associated persons. This prohibition also applies to the e-miNY.


  • Members holding executable orders in NYMEX full size contracts may not trade on the same side of the market, for their personal account, either in the full size contract or in the related e-miNY contract.


  • Further, the Member is responsible if his/her Designee trades e-miNY contracts in front of an executable customer order on the same side of the market, held by the Member or any associate, for full size contracts.


  • Members must also be aware that they cannot execute an order in the full size contract for the Designee, which would result in trading ahead of an executable customer order.
Failure to comply with the above terms may result in revocation of the e-miNY Permit and formal disciplinary action against the Member/Account Owner as well as the Designee.

Please call Nancy Minett, Compliance Counsel, at (212) 299-2940, David Schneiderman, Director Trade Practice Surveillance at (212) 299-2857, or Thomas LaSala Senior Vice President Compliance/Risk Management at (212) 288-2897 if you have any questions.
Should you have any questions or require any further information, please contact exchangeinfo@nymex.com