Q: Where will the NYMEX Division Brent crude oil futures contract trade?
A: The Exchange will lease space from the New York Board of Trade’s FINEX Dublin operation. From 10:00 AM to 7:30 PM, prevailing Dublin time, Brent will be traded solely on the floor in Dublin; from 8:15 PM to 9:30 AM, prevailing Dublin time, Brent will be electronically traded on NYMEX ACCESS®.

Q: Which regulator will oversee trading?
A: The New York Mercantile Exchange Brent crude oil futures market will be listed for trading pursuant to the Exchange’s status as a designated contract market, subject to regulation by the U.S. Commodity Futures Trading Commission (CFTC). The Exchange additionally expects to be designated as an exchange by the Irish Financial Services Regulatory Authority. Final arrangements are subject to review and/or approval by both regulators.

Q: How will the NYMEX Division Brent crude oil futures contract be cleared?
A: As is the case with all other Exchange contracts, this contract also will be cleared by the Exchange. Consistent with the regulatory requirements for other futures contracts cleared by the Exchange, customer funds for the Brent futures contract will be held in the same accounts used for other U.S. futures contracts, segregated from the futures commission merchant’s house accounts.


Q: What are the terms of the new Brent crude oil futures contract?
A:

Contract value:	1,000 times the settlement price for one barrel.
Minimum Price Fluctuation:	$0.01 (1¢) per barrel.
Maximum Price Fluctuation:	$10 above or below the previous day’s settlement price. If the price limit is bid, offered, or traded for five consecutive minutes, trading will halt immediately for five minutes. Upon reopening, the price limits will be expanded to $20 per barrel above and below the previous day’s settlement price. A market halt in the Brent crude oil futures contract based upon these price limits will not trigger a market halt in the Exchange’s other oil futures contracts, and a market halt as a result of reaching price limits in the New York floor-traded contracts similarly will not result in a market halt in the Exchange’s Brent crude oil futures contract.
Contract months:	Thirty consecutive months with additional long-dated futures initially listed 36, 48, 60, 72, and 84 months forward.
Termination of Trading:	Trading shall end one business day before the 15th to last calendar day of the preceding contract month, if the 15th to last calendar day is not a holiday or weekend in London. If the 15th to last calendar day is a holiday or weekend in London, trading shall end one business day prior to the last business day preceding the 15th to last calendar day.
Settlement:	Cash settlement. Final settlement will be based on the Platts® Brent Index, which will include cash deals and hourly price indications as provided by Platts during the open outcry trading session in Dublin.
Position Accountability Levels:	20,000 net futures in any one month/all months.
Reportable Positions:	350 contracts.
Trading Symbol:	SC

Q: Will the Exchange offer incentives to participate in the new market?
A: Yes. The Exchange’s incentive program will consist of three components, which will each be available for an initial three-month period. First, the Exchange will provide a weekly stipend of $1,000 to permittees and to clerks to reimburse demonstrated transportation and living expenses, such as hotel bills. This stipend would be based upon a demonstrated commitment to active involvement in the Brent contract as reflected by a regular presence on the trading floor and/or trading volume in the Brent contract.

Second, the Exchange will provide a fee waiver or “holiday” of all Exchange transaction and clearing fees in the Brent futures contract, including a waiver of the surcharge charged by the Exchange for transactions on NYMEX ACCESS® in the Brent contract. In addition, the Exchange currently charges a monthly access fee of $100 for non-members who trade directly on NYMEX ACCESS®. This monthly charge also will be waived during this period.

At the end of the fee holiday, the fees will be $1.25 per round turn per contract for members and $1.55 for non-members. These fees include a Platts surcharge.

Finally, the Exchange will incentivize trading in the Brent contract by providing payment of $0.50 per lot per side for transactions in Brent for any CTI indicator types other than trades for a floor member’s own account. This payment will be available for all trade types, including not only executed transactions but also exchange of futures for physicals (EFP), exchange of futures for swaps (EFS), and exchange of futures for futures (EFF) transactions.

To take advantage of this incentive program, accounts of participating customers and member firms will need to be registered through an application which will be posted shortly to the Exchange website.

Q: Who is eligible to trade this new contract on the floor in Dublin?
A: The Exchange will make permits available to its own members as well as non-members allowing them to trade for their own account or their firm’s account for a period of three months. Initially, the permits will be limited to any individual who is a member in good standing on a recognized board of trade.
After the launch, permits will be made available to individuals who are not necessarily members or lessees of an exchange, but otherwise meet the eligibility requirements for New York Mercantile Exchange membership.

Q: How can I obtain a permit?
A: Application can be made to the Exchange membership department in New York or through the Exchange London office.

Q: Brent futures trading has been established on the IPE. Why is it to my advantage to trade the NYMEX Division Brent contract?
A: There are several advantages:
1. One of the most widely used energy market transactions is the arbitrage between IPE Brent and the NYMEX Division light, sweet crude oil futures contract (commonly referred to as West Texas Intermediate or WTI). With the availability of the NYMEX Division Brent crude oil futures contract, the Exchange will actively quote, price report, and provide a forum for trading the Brent/WTI spread, which will be cleared separately as positions in the NYMEX Division Brent and NYMEX Division light, sweet crude oil contracts. This is a significant development for the market because the transaction, which is now accomplished as an arbitrage between instruments on two separate exchanges, at times has limited liquidity or transparency. By having both legs of the spread on a single exchange, it will simply become one transparently priced, competitively traded, liquid market.

Executing the spread through one clearinghouse will also lead to significant margin efficiency and a substantial reduction in the amount of cash that needs to be posted for margin. Currently, market participants who maintain a spread position in the IPE Brent and NYMEX Division light, sweet crude oil futures contracts have outright margin obligations at two clearing organizations, the London Clearing House and the Exchange clearinghouse. By executing the spread trade as a single transaction on the Exchange, market participants will post reduced margin. Since the long leg of the transaction offsets the short leg, the Exchange recognizes the reduced risk on the spread. This is particularly effective with the Brent/WTI spread because there is typically a high correlation between the two futures contracts. The Exchange initially is offering a 95% margin credit on a one-to-one Brent/WTI spread.

2. Market participants will be able to enter into WTI/Brent spreads virtually around the clock.

3. Both the oil industry and the trading community have been vociferous in their desire to be able to continue to utilize the liquidity that the trading floor can uniquely provide. The Exchange has consistently maintained a solid commitment to open outcry trading to retain the strong element of human relationships in energy trading and facilitate the overall efficiency of the market. Floor traders can react quickly to apparent shifts in market sentiment by seeing first-hand the ebb and flow of activity on the floor, taking advantage of feedback that they cannot get from a computer screen.

4. The Exchange will offer trading at settlement (TAS) transactions for the new Brent contract which will permit TAS transactions in the first two contract months.

5. The market will trade for a two-minute session (five minutes at the end of the week) after the close of open outcry, giving market participants an extra opportunity to better manage a position. Transactions that are executed during this session are not calculated in the final settlement price.

6. The Exchange has developed substantial expertise in establishing margin requirements that appropriately reflect current market conditions and expectations. The Exchange evaluates market conditions daily, leading to sound and timely risk management.

7. Cash settlements are calculated in accordance with a transparent formula and methodology.

Q: What transaction rules and procedures will apply to the NYMEX Division Brent crude oil futures contract?
A:
1. In general, current Exchange Chapter 6 floor trading rules also will be applicable to trading on the Dublin trading floor. For example, crossing orders by a floor broker will be permitted in the NYMEX Division Brent market where a floor broker holding buy and sell orders from different customers for the same contract month can cross the two orders after first offering both orders to the market, as provided by NYMEX Division Rule 6.40, “Simultaneous Buy and Sell Orders on the Exchange Trading Floor.”

2. Market participants will be permitted to engage in an EFF transaction only in the NYMEX Division Brent crude oil futures contract as provided in Rule 6.21 D. An EFF consists of two discrete but related transactions; an initial futures transaction effected on another board of trade and a subsequent futures transaction in the NYMEX Division Brent contract that is reported to the Exchange. It allows for the position on the other board of trade to be liquidated and exchanged with a position in the NYMEX Division Brent futures contract at a price determined by the participants. The minimum transaction size is 50 contracts.

3. Market participants will be able to engage in an exchange of futures for swaps (EFS) transaction in whichan off-exchange swaps position is exchanged with a counterparty for a cleared on-exchange futures position and vice versa. Brent will be only the second NYMEX Division open outcry energy contract for which an EFS can be executed; the other is the NYMEX Division natural gas futures contract. In order to be eligible to participate in such transactions, a market participant must comply with applicable CFTC requirements for engaging in off-exchange swap transactions, which include among other things qualifying as an “eligible contract participant,” which is an institutional customer or sophisticated trader, under CFTC regulations.

4. Exchange of futures for physicals (EFP) transactions will also be available for Brent. EFPs allow market participants to exchange a futures position with a counterparty for physical crude and vice versa.

Q: Which country’s holiday calendar will determine when the markets are open?
A: The holiday schedule will follow the calendar for legal holidays in London.

Q: Where can I obtain further information about trading the new Brent futures contract?
A: In London, questions should be directed to:
Marilyn Gonzalez
Senior Director of Marketing
New York Mercantile Exchange, Inc.
Veritas House, 7th Floor
125 Finsbury Pavement
London, EC2A 1NQ
United Kingdom
44-207-920-0349
e-mail: mgonzalez@nymex.co.uk

In New York, please call the marketing hotline at (212) 299-2301

For information on NYMEX ACCESS® electronic trading in the contract, contact the Exchange customer service department at 1-800-438-8616 or 212-299-2670, or via email at custcare@nymex.com.

Forward Looking and Cautionary Statements
The New York Mercantile Exchange, Inc., has attempted, wherever possible, to make statements in good faith, as of the date of this release, by using words such as anticipates, believes, expects, and words and terms of similar substance in connection with any discussion of its present and future operations within the industry. Any forward-looking statements made by, or on behalf of, the Exchange involve a number of risks, trends, uncertainties, and other factors which may cause actual results to differ materially, including the Exchange's receipt of the necessary Commodity Futures Trading Commission approval; timely performance and cooperative effort of exchange partners; and changes in financial or business conditions at the Exchange

“Platts®” is a trademark of The McGraw-Hill Companies, Inc., and has been licensed for use by the New York Mercantile Exchange. Platts does not sponsor, endorse, sell, or promote the Brent crude oil futures contract and Platts makes no recommendations concerning the advisability of investing in the Brent crude oil futures contract.