12/09/2005
For the purpose of this notice, NYMEX Division Members include: NYMEX Division Member firms, NYMEX Division floor members, and NYMEX seat lessees with $1 million in working capital maintained through the term of the LMM agreement.
The principal obligation of a LMM would be to continuously make a market throughout the regular trading session for the NYMEX miNY™ natural gas contract listed for trading on the Exchange's ClearPort® electronic trading system. Attached for your review and information is a summary of the terms and conditions of the Program.
The Exchange's miNY Futures Steering Committee ("Steering Committee") shall review and make recommendations to the Board of Directors with respect to selection of participants for the Lead Market Maker Program. The Steering Committee's recommendations will be based, among other things, on the applicant's business reputation, financial resources and trading activity in relevant futures, options or related cash markets.
NYMEX Division Members are eligible to submit an application and proposal to become a Lead Market Maker in NYMEX miNY™ natural gas by completing and submitting the attached application form to the Membership department located on the 4th floor.
All applications must be submitted no later than Monday, December 19, 2005.
| Terms | Requirements |
| Lot Requirement | A market of 20 up and 20 down during normal trading hours in Natural Gas |
| Length of Involvement | When miNY Natural Gas achieves a liquidity benchmark of an average of 5K contracts per day for a period of 20 consecutive days (not including LMM volume) the LMM shall continue the specified priority in trading participation for a period of two (2) years subsequent to achieving this benchmark. |
| Participation Level | Up to 45% Priority with three LMMs (in the event that there are less than three LMMs, the priority percentage would be reduced to 40%) |
| Odd Lot remainders in the allocation algorithm | All "odd lot remainders" will be allocated on a first in first out basis. |
| Restrictions | All changes will be subject to Steering Committee approval. |
| There will be no application fee for the program, and there will be no maintenance fees. | |
| Fee Waiver | All transaction fees shall be waived for the life of the program |
| Payment to LMM | None |
| Exchange Membership | Required: Must be NYMEX Member |
| Working Capital | NYMEX Member — |
| Seat owner: NYMEX seat as collateral (equal to $1 MM value) | |
| or $1 MM in working capital. If the seat is financed, | |
| the member will need to maintain the outstanding | |
| balance in a separate bank account. | |
| Lessee: $1 MM in working capital | |
| Size of Bid/Ask Spread | A maximum of $0.015 (one and one half cents) in normal market conditions |
| Fast moving market provision | The applicant will manage the occurrence of abnormal market conditions in an orderly and responsible manner |
| Normal Trading Hours | 10:00 AM to 2:30 PM EST |
| EFM Market | The LMM will provide an EFM market during normal trading hours for the products |
| Assignment of LMM | The LMM is not transferable or assignable |
| Roll Period Stipulation | During the last 10 days of the Contract Period The LMM will maintain a market in both months listed — 10 up and 10 down in Natural Gas for both months |
| Termination Clause | The LMM must give the Exchange one (1) month notice of termination |