Notice to Members
Notice No. 360
09/17/2003
Amendment to NYMEX Rule 6.51, Settlement Price Committee
At its meeting on September 14, 2003, the Board of Directors approved amendments to NYMEX Division Rule 6.51, which were originally approved on a three-month pilot basis by the Board at its meeting on May 15, 2003. The pilot program ended at the end of August, and the Rule was further amended such that it would be permanently in effect. The relevant provisions are specific to Calendar Spread Options and Crack Spread Options, and generally provide for NYMEX Staff’s involvement in the Settlement Committee process, and include such employee serving as chairman of the respective sub-committees with veto and override powers. During the three-month pilot program, no significant problems or complaints have arisen as a result of Staff’s involvement in the settlement process.

6.51 Settlement Price Committee

ADDITIONS BOLDED, DELETIONS STRIKETHROUGH

(A) Except as provided in Subsection (B) below, the Settlement Price Committee, which shall be a Regular Committee, shall consist of such members or permittees as the Chairman shall appoint with the consent of the Board. The Committee shall be divided into sub-committees for each futures and options contract traded. To the extent possible, each sub-committee shall consist of at least three (3) Members, at least one of whom shall be a Floor Broker, one of whom shall be a Floor Trader, and one of whom shall represent trade interests (either personal, of his employer, or of a substantial customer base). In addition, the President shall designate a staff member for each commodity, except natural gas, who shall assist the Committee in gathering information relevant to the establishment of settlement prices and who shall be responsible to assure that written records of the settlement process are prepared, in accordance with the Rules. On any day on which there is insufficient representation of any group on a subcommittee, the Chairman or a Vice Chairman of the Settlement Committee, or their designee, shall supervise the settlement price determination for that contract.

(B)(1) For crude oil, heating oil, gasoline futures contracts and for all option contracts, the Settlement Price Committee shall consist of such Members or Non-Member representatives of Member Firms, such as Member Firm employees, as the Chairman shall appoint with the consent of the Board provided further. For the coal futures contract, the Settlement Price Committee shall also consist of representatives of Non-Member Firms. For the PJM electricity futures contract, the Settlement Price Committee also shall consist of representatives of Non-Member Firms and additionally shall include one (1) Exchange employee dedicated to service as a voting member on this committee. For Calendar Spread Options and Crack Spread Options, the Settlement Price Committee also shall include (1) Exchange employee dedicated to service as a voting member on this Committee.

(1) (2) Futures and Option Contracts Traded Solely on the Trading Floor or Traded on the Trading Floor and on (as applicable) NYMEX ACCESS® or NYMEX ClearPort(sm) Trading. For each such futures and option contract, to the extent possible, each sub-committee shall consist of at least six (6) Committee members who shall be designated by the Chairman of the Committee to establish settlement prices for such contract and of whom at least three of the six Committee members shall be Floor traders and three shall represent trade or other off-the-floor customer interests except that the PJM Electricity Settlement Committee additionally shall include one Exchange employee. Finally, in any case in which the Committee members designated by the Chairman to establish settlement prices are unable to do so by agreement of a majority, the Chairman or a Vice Chairman of the Settlement Price Committee, or their designee, shall have the authority to establish such settlement price. Notwithstanding the above, with respect to the PJM Electricity, the Calendar Spread Options and the Crack Spread Options Settlement Committees, the Exchange employee serving as a voting member of that committee also shall serve as the Chairman of the PJM, Calendar Spread Options and Crack Spread Options Settlement Price Committees and further shall have final authority in all instances to veto and to override price determinations made by that committee.

(2) (3) Futures and Option Contracts Traded Solely on NYMEX ACCESS®. For each such futures and option contract, to the extent possible, each sub-committee shall consist of at least three (3) Committee members who shall be designated by the Chairman of the Committee to establish settlement prices for such contract and of whom at least two of the three Committee members shall be Electronic Traders and one shall represent trade or other off-the-floor customer interests. Finally, in any case in which the three Committee members designated by the Chairman to establish settlement prices are unable to do so by agreement of a majority, the Chairman or a Vice Chairman of the Settlement Price Committee, or their designee, shall have the authority to establish such settlement price.
(4) All references to Calendar Spread Options and Crack Spread Options in this section (B) shall be in effect on a pilot basis and effective as per the directive of the Board of Directors.

(C) At the conclusion of the RTH trading session on the Exchange Floor each day, settlement prices shall be determined for every contract listed.

(D) The Settlement Price Committee, or any subcommittee thereof, shall have the authority to request from any member representing that certain market information should be considered in the determination of a settlement price, such documentation as it deems appropriate including, but not limited to, trading cards and order tickets.

Should you have any questions or require any further information, please contact exchangeinfo@nymex.com