05/10/2007
Procedures for Floor Submission:
All parties to a Block Trade who are eligible for participating as a principal in Block Trades as per Rule 6.21C may have a Floor Member or their representative submit the transaction. The specific procedures and recordation requirements are similar to those of the Exchange's EFP and EFS rules with the caveat that orders for and submissions of such transactions must indicate the trade with the acronym "BLK" as it is for a Block Trade.
Procedures for Submission Through the NYMEX Facilitation Desk:
All Parties who are eligible for participating as a principal in Block Trades as per Rule 6.21C MUST also be NYMEX ClearPort® Clearing ("CPC") registered. Information on CPC registration can be obtained via www.nymex.com/markets.aspx.
All CPC brokers may submit Block Trades via the attached form and fax it to the NCS provided they are properly registered with the National Futures Association ("NFA") as the transaction is conducted on or subject to the rules of a contract market. The form for use in the submission includes all relevant phone and fax numbers at the NCS and can additionally be obtained via the following links:
Form in PDF Format: http://www.nymex.com/media/energy_blocksub.pdf
Form in Word Format: http://www.nymex.com/media/energy_blocksub.doc
All eligible registered principals who wish to conduct a Block Trade without the use of a registered broker may contact the NYMEX Facilitation Desk ("NFD") at (866) 246-9639 in order to submit Block Trades. All Block Trade submissions will be permitted commencing at 8:00 PM on an Exchange calendar date for the subsequent trade date, through 5:00 PM the next day for the same trade date. No RAV or automated credit/risk limiting facility is in place when the Block Trades are entered by the NCS or the NFD. As such, Clearing Members should review these trades which are coded as type B-BLK through any of the intra-day clearing transmissions made available by NYMEX and may call the NCS within 90 minutes of trade execution time to void a trade. If such a call is made, the NCS will advise the parties that entered the trade and the opposite Clearing Member that the trade has been voided. All parties will subsequently have the ability to resolve issues around the trade and then resubmit it.
Fees per contract:
- No additional fees will be applied to Block Trades in LR, LU and LH submitted either to the NFD or through the trading floor.
All Block Transactions must conform to the minimum size as prescribed by NYMEX. Further, aggregation of orders to meet the minimum Block size requirement is prohibited, except in connection with the activity of registered CTAs.
While all parties to a Block Transaction must be an Eligible Contract Participant ("ECP") as that term is defined in Section 1a(12) of the Commodity Exchange Act, all Members of the contract market who maintain trading rights are considered ECPs under the Commodity Exchange Act for purposes of conducting Block Transactions in contracts that are available for trading.
All Block Trades must be submitted to NYMEX within 5 minutes of execution.
NYMEX will price report all block transactions.
As cited above, individuals submitting Block Trades must be properly registered with the National Futures Association ("NFA") as the transaction is conducted on a contract market.
(Additions are in bold/italics.)
Rule 6.21C, Block Trades
(A) Block trades (privately negotiated transactions) shall be permitted in such Exchange products, and for such minimum threshold quantities and under other such conditions as are listed in paragraph (B) of this Rule 6.21C. The following shall govern block trades:
(1) A block trade must be for a quantity that is at or in excess of the applicable minimum threshold. Orders from different accounts may not be aggregated in order to meet the minimum threshold, except in connection with the activities of a registered commodity trading advisor or foreign person performing a similar role, as described in Paragraphs 8 and 9, below.
(2) Each party to a block trade must be an Eligible Contract Participant as that term is defined in Section 1a(12) of the Commodity Exchange Act.
(3) A member shall not execute any order by means of a block trade for a customer unless such customer has specified that the order be executed as a block trade.
(4) The price at which a block trade is executed must be fair and reasonable in light of (i) the size of the block trade, (ii) the prices and sizes of other transactions in the same contract at the relevant time, (iii) the prices and sizes of transactions in other relevant markets, including without limitation the underlying cash and futures markets, at the relevant time, and (iv) the circumstances of the markets or the parties to the block trade.
(5) Block trades shall not set off conditional orders (e.g., Stop Orders and MIT Orders) or otherwise affect orders in the regular market.
(6) The buyer and seller must ensure that each block trade is reported to the Exchange within five minutes of the time of execution. The block trade must be submitted in accordance with procedures prescribed by the Exchange. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.
(7) Clearing members and members involved in the execution of block trades must maintain a complete record of the transaction in accordance with Exchange Rule 8.50.
(8) A commodity trading advisor ("CTA") registered or exempt from registration under the Act, including, without limitation, any investment advisor registered or exempt from registration under the Investment Advisors Act of 1940, shall be the applicable entity for purposes of Paragraphs 1, 2, 3, and 4, provided such advisors have total assets under management exceeding $25 million and the block trade is suitable for the customers of such advisors.
(9) A foreign Person performing a similar role or function to a CTA or investment advisor as described in Section I, and subject as such to foreign regulation, shall be the applicable entity for purposes of Paragraphs 1, 2, 3, and 4, provided such Persons have total assets under management exceeding $25 million and the block trade is suitable for the customers of such Persons.
(B) Block trades shall be permitted in accordance with this Rule 6.21C in the following Exchange products, under the conditions described:
(1) Spreads transactions between the Light Sweet Crude Oil (CL) and the Brent Crude Oil – Financial (BB) futures contracts, for a threshold minimum quantity of 50 contracts in each leg of the spread;
(2) Transactions in NYMEX Soft Futures Contracts: NYMEX Cocoa (CJ), NYMEX Coffee (KT), NYMEX Cotton (TT), NYMEX FCOJ (FJ), NYMEX Sugar 11 (YO) and NYMEX Sugar 14 (FT), for a threshold minimum quantity of 100 contracts;
(3) Light Sweet Crude Oil futures (CL), for a threshold minimum quantity of 200 contracts;
(4) Natural Gas futures (NG), for a threshold minimum quantity of 100 contracts;
(5) Heating Oil futures (HO), for a threshold minimum quantity of 100 contracts;
(6) New York Harbor RBOB Gasoline futures (RB), for a threshold minimum quantity of 100 contracts
(7) Gulf Coast Gasoline (LR), for a threshold minimum quantity of 100 contracts;
(8) Gulf Coast Ultra Low Sulfur Diesel (LU), for a threshold minimum quantity of 100 contracts; and
(9) New York Harbor Ultra Low Sulfur Diesel (LH), for a threshold minimum quantity of 100 contracts.