Notice to Members
Notice No. 453 11/30/2004
Compliance Advisory Regarding Instant Messaging ("IM") - Order Ticket Preparation and Recordkeeping Requirements (Revision to Notice to Members No. 04-273 Dated July 15, 2004)
Exchange Order Ticket preparation and retention requirements apply to ALL ORDERS received for execution on the Exchange floor or on any Exchange Electronic Trading System. Any order for which a memorandum must be prepared as required under CFTC Regulation 1.35 that is received via Instant Messaging ("IM") or other electronic media must have an order ticket created upon receipt as if the order was received by telephone unless the electronic media utilized to transmit the order otherwise complies with all CFTC-prescribed recordkeeping and regulatory requirements applicable to such systems, as described below and has been approved by the Exchange. NYMEX, COMEX and CFTC rules and regulations generally require that when an order is received from a customer, a memorandum (order ticket) must be made in non-erasable ink and time stamped upon receipt and upon report of an execution. The rules further specify that such order tickets must be maintained "in permanent form" and remain available for review by the Compliance Department. Alternatively, the written record requirement may be satisfied for orders that are received for execution on an Exchange Electronic Trading System or are prepared and transmitted to and reported from exchange trading pits by electronic media to the extent such electronic media has been approved by the Exchange and generate electronic rather than written records that capture all required information that would otherwise have to be reduced to writing, subject to certain terms and conditions. Among other things, those terms and conditions include requirements that the electronic record capture the terms of the customer order, any modifications made to the order and the time of such modifications, as well as maintaining an accurate record of when and by whom the records are accessed or modified. The electronic system must capture all required times to at least the nearest second and all records must be maintained in accordance with CFTC Regulation 1.31 recordkeeping requirements, either in hardcopy or in allowable (machine-readable) alternative form. Failure to abide by these rules will result in investigation by the Compliance Department and may result in formal disciplinary action.
Should you have any questions or require any further information, please contact exchangeinfo@nymex.com