Notice to Members
Notice No. 401
10/26/2004
Amendment to NYMEX Division Rule 6.21A, Exchange of Futures for, or in Connection With, Swap Transactions
At its last meeting, the Board of Directors determined to change NYMEX Division Rule 6.21A, Exchange of Futures for, or in Connection With, Swap Transactions, from a pilot program to permanent status, effective immediately. The NYMEX Division EFS rule was first implemented in connection with the roll-out of the Exchange Brent contract three years ago. The rule was expanded later that year to encompass Natural Gas transactions. The EFS procedure has proven to be a valuable mechanism that has dramatically expanded the scope of the Exchange’s services, including transactions submitted to clearing via the NYMEX ClearPort(sm) clearing website procedures.

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(strike-outs in bold indicate deletions.)

Rule 6.21A. EXCHANGE OF FUTURES FOR, OR IN CONNECTION WITH, SWAP TRANSACTIONS (Pilot Program)

(A) (1) An exchange of futures for, or in connection with, a swap (EFS) consists of two discrete, but related, transactions; a swap transaction and a futures transaction. At the time such transaction is effected, the buyer and seller of the futures must be, respectively, the seller and the buyer of the swap. The swap component shall involve the commodity underlying the futures contract (or a derivative, by-product or related product of such commodity). The quantity covered by the swap must be approximately equivalent to the quantity covered by the futures contracts. The swap component of an EFS transaction must comply with the applicable CFTC swap regulatory requirements. The initial term of the pilot program shall be three years from the effective date of this Rule 6.21A.

(The remainder of the rule is unchanged.)

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