03/10/2006
The following highlights the amendments to Rule 9.03 which are effective on May 1, 2006.
1. A minimum Fund balance will be set at $200 million.
2. Contributions to the Fund will be calculated using a hybrid formula of Risk (85%) and Volume (15%).
(Explanation – The Exchange will calculate the following on a quarterly basis.)
- Determine each Clearing Member's overall % of risk margin and volume.
- Multiply each firm’s risk % by $170 million ($200 million @ 85%).
- Multiply each firm’s volume % by $30 million ($200 million @ 15%).
- Combine totals to determine contribution.
- Re-compute on a quarterly basis.
4. A surcharge will be added to Clearing Members granted position limit exemptions.
5. Acceptable deposits will now include shares of approved money market mutual funds. Please note that each Clearing Member will be formally notified of their new Fund contribution requirement no later than April 15, 2006. The firms will then have until May 1, 2006, to meet the requirement. Thereafter, a re-computation will be performed within two weeks of the end of each calendar quarter with any additional monies required to be posted within two weeks of notification.
The amendments provide the Exchange with additional resources and help support our financial safeguard system which is continually reviewed to ensure the integrity of our marketplace.
Changes to NYMEX Rule 9.03
(Additions are Bold and Italicized; Deletions have a
NYMEX 9.03, Guaranty Fund
(A) Contributions
Each Clearing Member shall deposit, and keep deposited, with the Exchange the amount prescribed in Section (B) as a contribution to the Guaranty Fund. The monies, securities, and instruments so deposited shall collectively constitute a fund known as the "Guaranty Fund" and shall be used as provided in the Rules to reimburse the Exchange for any loss sustained by the Exchange as a result of the failure of any Clearing Member to discharge his obligations in accordance with the Rules. The Board of Directors shall determine the appropriate size of the Guaranty Fund.
(B) Schedule of Contributions
The amount required to be deposited by each Clearing Member shall be
(ii) Sole Division Members: 10% of the firm's modified capital, as defined in Rule 9.20(A)(1) and based on the most recent financial statement submitted to the Exchange, with a minimum contribution of $100,000 and a maximum contribution of $2 million.
The amount deposited shall be in the form of
(1) U.S. Dollars,
shares of certain Money Market Mutual Funds as approved by the Board of Directors and subject to the provisions of NYMEX Rule 9.05 (E) (4),
(3) securities issued by the Department of the Treasury of the United States maturing within ten (10) years of the date of the deposit and guaranteed as to principal and interest by the United States government valued at ninety-five percent (95%) of par value.