07/08/2005
The new version of the documentation should be available shortly in the Exchange's on-line registration process.
For an advance review of this documentation prior to this change on the Exchange website, please use this link to a PDF file containing this documentation. (www.nymex.com/media/282agree.pdf)
In addition, the Exchange is also implementing various rule changes in connection with this launch and these amendments can be seen in this link to a separate PDF file. (www.nymex.com/media/282rules.pdf)
This notice encourages firms seeking to utilize this new means of connectivity to review these terms in advance of registration in connection with our launch on Tuesday, July 19th, 2005. In order to assist firms in their review, please note the following summary of changes to terms within the EULA associated with this roll-out:
- Access to NYMEX ClearPort® Trading (CPT) now will be available either through the front-end trading application that will continue to be provided by NYMEX or through a FIX connection involving a proprietary or third party provider front-end trading application. In addition to the documentation requirements noted below, the Exchange is establishing processes and forms for the technical review and certification by Exchange staff both of the front-end trading application as well as of the particular connection(s) using such application to be established for a specific User applicant.
- Following upon a decision to seek to integrate documentation for connectivity through a FIX connection into the Exchange’s existing EULA rather than create a new stand-alone document, the scope of the definition for "User" remains the same but the definition for "User Agent" is expanded in the context of a FIX connection.
- Specifically, the scope of the definition for User Agents will remain the same in connection with access via the NYMEX front-end trading application; however, the term User Agent now will be used in the context of a FIX connection to refer not only to a User's employees and agents but also to customers of the User for whom the User is permitting access to CPT via the FIX connection.
- Consequently, for Users obtaining access via a FIX connection, NYMEX will not be requiring the User to register its "User Agents" with the Exchange. Exchange staff, however, will recommend that a firm User obtaining access via a FIX connection register one or more of its administrative staff as User Agents with the Exchange so as to expedite use of the NYMEX GUI in the event of a problem with the User's FIX connection.
- Specifically, the scope of the definition for User Agents will remain the same in connection with access via the NYMEX front-end trading application; however, the term User Agent now will be used in the context of a FIX connection to refer not only to a User's employees and agents but also to customers of the User for whom the User is permitting access to CPT via the FIX connection.
- While access to CPT via a FIX connection will be available for Non-Members as well as for Members, the Exchange will require a NYMEX Clearing Member to guarantee the financial obligations for a FIX connection.
- However, in view of the credit filters now found on many front-end trading applications, the Exchange will allow but will not mandate use by Clearing Members of the NYMEX risk allocation value (RAV) credit filter system in connection with Users obtaining access to CPT via a front-end trading application that has been certified by the Exchange (Certified Application).
- The decision about whether or not to use the NYMEX RAV will apply to all activity coming through that connection. Accordingly, if the NYMEX RAV was to be used for a particular connection, the applicable accounts of every customer User Agent participating through that connection would need to be registered in the NYMEX RAV.
- Consequently, there are several possible scenarios that are addressed in the EULA documentation:
- Use of NYMEX GUI. First, an individual or firm User may wish to use the Exchange's front-end trading application, in which case the main body of the EULA and Schedule A to the EULA would continue to serve as the operative documents and it would continue to be the case that a Primary Clearing Member guarantee would not be required.
- Use of FIX Connection: Clearing Member as User. Next, in the event that the User obtaining access to CPT via a Certified Application is a NYMEX Clearing Member, such Clearing Member User applicant would need to agree to the main EULA, Schedule A and to a new attachment, Schedule A-1 to Schedule A.
- The Clearing Member applicant additionally would agree to Appendix 1 to Schedule A-1, which pertains to the Exchange's certification requirements for the front-end trading application, such as credit controls, audit trail and record retention requirements.
- Use of FIX Connection: Non-Clearing Member as User. Finally, in the event that the User obtaining access to CPT via a Certified Application is not a NYMEX Clearing Member, such User applicant would need to agree to the main EULA, Schedule A and to a new attachment, Schedule A-2 to Schedule A.
- In addition, if NYMEX RAV was not to be utilized for all activity coming through that connection, the User applicant and its guaranteeing Clearing Member would need to agree to Appendix 1 to Schedule A-2, which is referenced as a Primary Clearing Member Guarantee, under which the Clearing Member is responsible for the financial obligations of the User applicant in relation to the connection to CPT and additionally is responsible to serve as the Primary Clearing Member for all activity on CPT coming through that connection.
- Alternatively, if NYMEX RAV was to be utilized, the User applicant and its guaranteeing Clearing Member would need to agree to Appendix 2 to Schedule A-2, which is referenced as a "Connection" Clearing Member Guarantee, under which the Clearing Member would be responsible for the financial obligations of the User in relation to the connection to CPT.
- Non-Clearing Member User applicants additionally would agree to Appendix 3 to Schedule A-2, which pertains to the certification requirements for the front-end trading application, such as credit controls, audit trail and record retention requirements.
- In addition, if NYMEX RAV was not to be utilized for all activity coming through that connection, the User applicant and its guaranteeing Clearing Member would need to agree to Appendix 1 to Schedule A-2, which is referenced as a Primary Clearing Member Guarantee, under which the Clearing Member is responsible for the financial obligations of the User applicant in relation to the connection to CPT and additionally is responsible to serve as the Primary Clearing Member for all activity on CPT coming through that connection.
- Use of NYMEX GUI. First, an individual or firm User may wish to use the Exchange's front-end trading application, in which case the main body of the EULA and Schedule A to the EULA would continue to serve as the operative documents and it would continue to be the case that a Primary Clearing Member guarantee would not be required.
- Notwithstanding the addition of the NYMEX miNYsm futures contracts to CPT, the Exchange will not be imposing upon launch a subscription charge for direct access to CPT, but reserves the right to revisit this stance from time to time.
- The Exchange will permit the execution of brokerage on CPT by Non-Members as well as by Members and Member Firms provided that such entities maintain all appropriate industry registrations to engage in this activity.
- The Exchange also will implement a new policy requiring registration with the Exchange of all "black box" automated trading systems having connectivity to CPT via a FIX connection as well as a policy under which charges could be imposed for an excessive level of messages in relation to executed trades as determined against a standard calculated on a rolling basis.