04/30/2004
The attached amendments are being implemented in response to concerns of current and potential systems users of Exchange electronic trading platforms. These companies have noted that Exchange requirements for trading on our systems conflict with their current business organization. Specifically, it is becoming increasingly common in the energy industry for companies that have a holding company and multiple corporate affiliates for one of the affiliates (or less frequently the parent itself) to be designated as the trading arm of the conglomerate. This entity then typically conducts all of the trading not only for itself but also for all of the other affiliates. However, under our current electronic trading rule structure, except for limited exceptions such as commodity pool operators and commodity trading advisors, the general rule is that only Members and Member Firms may place orders on the electronic systems for third parties.
The attached amended rules revise our current rule structure so as to permit the above-referenced business practice on both of our two electronic trading platforms. The amendments maintain the general Exchange policy that execution of brokerage is reserved as a privilege of Exchange membership. The amendments, however, add a new limited exception that would allow a Non-Member corporate entity to enter orders onto the electronic system for its corporate parent or for a corporate affiliate (that is also a wholly-owned subsidiary of the same corporate parent) and similarly would allow the parent to enter orders on behalf of its affiliates.
The amended rule structure is intended to bring Exchange requirements more in line with the business organization of potential new system users. The Exchange will continue to strive to better meet the needs of all of its market users. As a condition for utilizing the new rule provisions, an entity that is a registered system user and that is serving as the trading entity for related affiliates must notify the Exchange in writing that it will be serving as the trading entity for affiliated companies and also must identify the affiliated companies for which such trading will be done. This notification must be submitted to the Exchange’s Customer Service Center (CSC), which can be contacted at the following email address: custcare@nymex.com . Questions concerning such written submissions may be directed to the CSC by calling 1 (800) 438-8616.
View amendments here.