03/22/2006
The proposed amendment to COMEX Division Rule 104.42 affects a "Special Matter" under the terms of the COMEX By-Laws. Accordingly, COMEX Division Members have ten (10) days to submit a petition signed by owners of at least 155 COMEX Division Memberships requesting a vote of the COMEX Division Members to disapprove the amendments, pursuant to the procedures set forth under COMEX By-Law 205(D). If a petition is not received, or if the amendment is not disapproved, it will be submitted to the Commodity Futures Trading Commission.
Proposed Amendments to Rule 104.42, Matched Orders
(Bold and italicized indicate additions,
COMEX Rule 104.42, Matched Orders
(a) Eligible Transactions. The procedures set forth in this Rule shall apply only to bids and offers in such contracts as the Board has specifically approved pursuant to section (i) of this Rule.
(b) Definitions. A Market on Close order is any order entered for execution on the close and designated as MOC. A Matched Order (MO) is an order entered in accordance with this Rule 104.42 for execution in accordance with these procedures and cleared at the established settlement price. Any MOC can be executed as an MO during the MO period unless otherwise specified as per 104.42 (f) below.
(c) Matching of Orders. Subject to sections (a) and (f) of this Rule, a floor member intending to purchase or sell a contract at the market price during the closing period may enter into a transaction, either by trading with another floor member or, subject to Rule 104.24, by means of a cross trade, for which the execution price will be determined as provided in section (d) of this Rule. Any such trading or cross trade (collectively referred to as a "matched order" or "MO") shall be made by open outcry during the five (5) minute period prior to the commencement of the closing period in aluminum futures and during the twenty-nine (29) minute period prior to the commencement of the closing period in copper futures.
(d) Matched Order Price.
(1) The price at which an MO shall be deemed to have been affected shall be the settlement price of that contract.(e) Cancellation of Matched Orders. An MO may be cancelled only upon consent of both floor members involved in the transaction and subject to the limitations set forth in Rule 104.07(g) and (h) ("Forms of Orders - Orders for Execution on Opening; Orders for Execution on the Close").
(f) MOC orders present during the MO period may be executed as MO's unless specific instructions to the contrary are given. Such orders must indicate "MOC ONLY" clearly on the face of the order ticket. Failure to enter "MOC ONLY" instructions will forfeit the customers' right to cancel the MOC, in whole or in part, if the order or any portion of the order has been previously executed. MOC's executed as MO's should be reported to the customer upon execution.
All orders entered as MO's will be executed during the "close", as MOC's, if not previously executed as MO's or specifically designated as MO only. Orders to be executed as MO only must be designated "MO only" at the time of entry.
(g) Reporting and Recordation. All MOs shall be identified as such on the executing member's trading records prepared in accordance with Rules 104.80 ("Trading Card") and 104.81 ("Order Tickets"). It shall be the obligation of the seller of the MO to ensure that every MO executed in the ring be promptly be reported to an official market reporter of the Exchange and made a matter of permanent record of the Exchange. Such record shall include the exact time of execution, the date, the volume executed, the futures contract, and the delivery month. In addition, any trades matched by means of crosstrades
(h) Due Diligence. A member who has executed or intends to execute an MO shall use due diligence to avoid trading in any contract for which MOs are permissible in a manner which would unduly affect the MO price so as to benefit the member, any other member or any customer.
(i) Transactions Eligible for Board Approval for Matched Order Procedures. The Board may, by resolution, authorize the execution of transactions in any or all of the futures contracts and delivery months specified below pursuant to the matched order procedures set forth in this Rule 104.42.
Futures Contract – Delivery Month
Gold – Two Most Actively Traded
Silver – Two Most Actively Traded
Copper – Spot and Next Four Consecutive Contract Months
Aluminum – Spot and Next Four Consecutive Contract Months
RESOLUTION
.10 Board-Designated Transactions. The following transactions have been approved by the Board for execution as matched orders under Rule 104.42:
Futures Contract – Delivery Month
Copper – Spot and Next Four Consecutive Contract Months
Aluminum – Spot and Next Four Consecutive Contract Months