Crosstrades are permissible when:

1. the buy and sell orders are for different customers and the commodity and month are the same;

2. the orders are offered openly and competitively by open outcry in the trading ring;

3. the quantity to be purchased and sold must be bid and offered at the same price and neither bid nor offer is accepted; and

4. both the execution of the crosstrade and the quantity and price thereof are announced to the ring.

Members must clearly record the crosstrade on their trading cards. Additionally, a Member who has executed a crosstrade is required to ensure that an Exchange ring reporter is aware of the specifics of the trade and that it is entered into the Exchange Price Change Register.

The relevant sections of COMEX Division Rule 4.24, Crossing of Orders, regarding crosstrade procedures, are set forth below. Please review these rules carefully.

Rule 4.24 Crossing of Orders.

(a) Permissible Cross Trades. If a floor member receives buying and selling orders of different customers for the same commodity contract in the same delivery month, option series or strip transaction (as defined by Rule 4.38A) at prices which permit their execution by the crossing thereof, such floor member may act as buying and selling broker in the execution of such orders upon compliance with the following conditions:

(1) he shall offer the futures, option contracts, or strip transaction openly and competitively by public outcry in the ring by both bidding and offering the quantity to be purchased and sold at the same price, in the case of outright transactions and strip transactions, and at the same point spread or differential, in the case of straddles;

(2) neither such bid nor such offer is accepted; and

(3) he announces to the ring and to an employee of the Exchange the execution of such cross trade and the quantity and price thereof.

(b) Floor Members' Records of Cross Trades. A floor member executing a cross trade shall clearly identify the same on a trading card and/or order ticket or other record in form approved by the Exchange, noting thereon the exact time of execution, the date, the price, the quantity, the futures contract or futures option, the delivery month, futures option series, or strip transaction, the customers' account numbers, and the clearing member which will clear each side of the trade, provided that a cross trade effected as the means to resolve an out-trade or error shall be recorded as required by Rule 4.71 ("Resolution of Out-Trades and "Errors").*

(c) Exchange Records for Cross Trades. It shall be the obligation of a floor member executing a cross trade to ensure that every cross trade executed in the ring shall be promptly made a matter of permanent record of the Exchange by the official market reporter which record shall include the exact time of execution, the date, the price, the quantity, the futures contract or futures option, the delivery month, futures option series, or strip transaction, and the name of the floor member executing the cross trade.