08/12/2002
As background, the Exchange recently modified its default procedures so that the amount of each Clearing Member's Guaranty Fund that may need to be contributed in the case of a default is no longer be based on formulas that include activity (volume and open interest) for a prior specified period.
Consequently, the Exchange's practice of holding a withdrawing firm's Guaranty Fund for a period of six months (nine months for CCA firms) is no longer appropriate as the contingent liabilities will cease upon such withdrawal, and Rule 9.03 and CCA Bylaw Section 6.2C are being modified accordingly.
(Deletions are in {brackets}.)
NYMEX Rule 9.03(E) GUARANTY FUND
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(E) Surrender of Guaranty Fund Deposit
After a Clearing Member ceases to be a Clearing Member of the Exchange and after all obligations {including contingent obligations} of such member to the Exchange shall have been discharged in full, the amount of the Guaranty Fund that to which such Clearing Member is entitled shall be returned {; provided, however, that the Exchange may retain such amount for a period of six months after such Clearing Member ceases to be a member, and provided further, that such amount may, in the discretion of the Board be returned to such Clearing Member before such contingent obligations are determined, where such contingent obligations are assumed by another Clearing Member}. Any expense, including counsel fees, incurred by the Exchange in connection with a Clearing Member's deposit or the return thereof, may be charged to the Clearing Member.
CCA BY-LAW SECTIION 6.2(c) GUARANTY FUND
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After a Clearing Member ceases to be such, and after his or its actual {and contingent} obligations to the Corporation shall have been discharged in full, so much of such Clearing Member's original contribution to the Guaranty Fund as shall remain to his or its credit therein, after it has been applied, as provided by these By-laws, to the purpose for which it was contributed, shall be returned to such Clearing Member or his or its legal representatives or assigns {; provided, however, that no part of such original contribution may be withdrawn until nine (9) months subsequent to the time the last open contract of said Clearing Member with the Corporation is liquidated. Anything in this paragraph notwithstanding, the Board may, in its discretion, waive all or any part of said nine months waiting period; provided that another Clearing Member furnishes a guarantee in form and substance satisfactorily to the Board of Directors covering the contingent and actual obligations of the former Clearing Member to the Corporation}.