12/14/2005
For the purpose of this notice, NYMEX Division Members include: NYMEX Division Member firms, NYMEX Division floor members who own their seats 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 Exchange's NYMEX miNY™ Heating Oil or Unleaded Gas futures contracts listed for trading on the NYMEX 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.
The Lead Market Maker Program in NYMEX miNY™ Heating Oil and Unleaded Gas futures contracts is limited to a maximum of two LMMs in each of these products.
NYMEX Division Members interested in participating in the Lead Market Maker program in NYMEX miNY™ Heating Oil or Unleaded Gas should complete the attached application form and submit it to the Membership Department by no later than Wednesday, December 21.
It is anticipated that the contracts will launch on January 17, 2006.
| Terms | Requirements |
| Lot Requirement | A market of 40 up and 40 down during normal trading hours in Heating Oil or Unleaded Gas (20 up and 20 down each LMM) |
| Length of Involvement | When NYMEX miNY™ Heating Oil or NYMEX miNY™ Unleaded 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 one (1) year subsequent to achieving this benchmark. |
| Participation Level | 40% Priority (in the event of more than one LMM, the priority percentage would be split equally) |
| Odd Lot remainders in the allocation algorithm | All "lot remainders" will be allocated on a first in first out basis (rounding up in the event of odd lots) |
| 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 $0.004 (four tenths cents) or two ticks 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 — 20 up and 20 down in both months (minimum 10 up and 10 down each LMM) |
| Termination Clause | The LMM must give the Exchange one (1) month notice of termination |
| Trial Period | The LMM is obligated to a one-month minimum trial period, commencing upon first day of LMM trading |