08/17/2007
- Rule 104.36, Exchanges for Physicals, has been renamed "Exchange of Futures
for, or in connection with, Product (Physical)" and redrafted to reflect
language which conforms to the language in the parallel NYMEX Division EFP rule.
The new rule permits EFPs to be submitted directly through the ClearPort®
Clearing Trade Entry Portal (CPC).
- Allow for CPC Trade Entry Portal submission of EFP transactions in All COMEX
Division physical delivery futures contracts, including Gold (GC), Silver (SI),
Copper (HG) and Aluminum (AL) (see Notice to Members 07-393 dated August 10,
2007). Existing procedures for floor submission of EFP transactions in these
products will continue. The NYMEX Customer Facilitation Desk will accept phoned-in
transactions related to registered parties and will input them for an additional
fee. Please note that the program of allowing Clearing Members to fax EFP transactions
to the COMEX Trade Processing Area will be terminated in conjunction with the
rollout.
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- Rules 104.36A, Exchange of Aluminum Futures for, or in Connection with SWAP
Transactions, and Rule 104.36B, Exchange of Futures for, or in Connection with,
Swap Transactions, have been replaced with new Rule 104.36A, "Exchange
of Futures for, or in Connection with, Swap Transactions." The replacement
rule expands the slate of COMEX futures contracts available for EFS transactions
to include Silver (SI) and Gold (GC) Futures, and permits EFS transaction in
all contract months available for trading on the Exchange.
- Allow for CPC Trade Entry Portal submission of EFS transactions in All COMEX
Division physical delivery futures contracts including Gold (GC), Silver (SI),
Copper (HG) and Aluminum (AL). The existing EFS program/rules will be expanded
to include Gold (GC) and Silver (SI) and floor submission of these trades will
be supported. The NYMEX Customer Facilitation Desk will accept phoned-in transactions
related to registered parties and will input them for an additional fee.
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- Rule 104.36B, Exchange of OTC Metal Options for, or in Connection with, COMEX Metal Options has been added. This rule permits EOO transactions in Gold (OG), Silver (SO), and Copper (HX) options presently listed for trading on the Exchange. The new rule tracks the language of the NYMEX EOO rule. Submission of these transactions will be permitted on the trading floor or through CPC. This entry type will also be supported by floor submission directly through the Trade Processing Window.
NEW COMEX EFP, EFS, & EOO Rules (Note - Old EFP and EFS Rules are deleted and replaced by the following.)
An exchange of futures for, or in connection with, product (EFP) consists of two discrete, but related, transactions; a cash transaction and a futures transaction. At the time such transaction is effected, the buyer and seller of the futures must be the seller and the buyer of a quantity of the physical product covered by this Section. The quantity of physical product must be approximately equivalent to the quantity covered by the futures contracts.
Eligible Contracts and Transactions:
EFP transactions may be effected in all futures contracts offered for trading on the Exchange.
EFP Posting Procedures for Futures Contracts which are available for trading on the Trading Floor:
The posting of any EFP in any futures market traded on the Exchange shall be made during the hours of futures trading and otherwise in accordance with Rule 104xxx. Each EFP transaction shall be posted, immediately when relevant cash terms are determined, but in no event later than the earlier of the next business day or the end of the permissible posting period for EFPs following the expiration of the underlying futures contract, by the Floor Members and in accordance with normal procedures .
Additionally, if a futures contract available for trading on the trading floor is also available for trading on GLOBEX, EFP posting may be accomplished by submission of reports to NYMEX ClearPort® Clearing in accordance with its procedures.
(D) A report of EFP transactions shall be submitted to the Exchange by each Clearing Member representing the buyer and/or seller. Such submission shall be made by its inclusion in the daily Large Trader Reporting to the Exchange of each reportable customer, pursuant to Rule 9.33, and identified as an EFP within the Large Trader file format. The reporting of EFP transactions via Large Trader shall identify the reportable customer who executed the EFP and the kind and quantity of the futures cleared.
(E) (1) Each buyer and seller must satisfy the Exchange, at its request, that the transaction is a legitimate EFP transaction. Upon the request of the Exchange, all documentary evidence relating to the EFP, including, without limitation, evidence as to change of ownership of the cash commodity or a commitment therefore shall be obtained by the Clearing Members from the buyer or seller and made available by the Clearing Members for examination by the Exchange. Additionally, if the buyer or seller is a Member/Member Firm, the Exchange may obtain the information directly from such person(s).
(2) Failure by a buyer or seller, or its Clearing Member, to satisfy the Exchange that an EFP transaction is bona fide, shall subject such buyer or seller if a Member/Member Firm, or the Clearing Member to disciplinary action. Such disciplinary action, depending on the gravity of the offense, may be deemed to be a major offense of the Exchange's rules. Further, if the buyer or seller is not a Member/Member Firm, the Exchange may conduct a hearing before the Business Conduct Committee to limit, condition or deny access to the market.
(F) All omnibus accounts and foreign brokers shall submit a signed EFP reporting agreement in the form prescribed by the Exchange to the Exchange's Compliance Department. Such Agreement shall provide that any omnibus account or foreign broker identified by a Clearing Member (or another omnibus account or foreign broker) as the buyer or seller of an EFP pursuant to Rule 6.21(C), shall supply the name of its customer and such other information as the Exchange may require. A report of EFP transactions shall be submitted to the Exchange by each omnibus account and foreign broker representing the buyer and/or seller. Such submission shall be made by its inclusion in the daily Large Trader Reporting to the Exchange of each reportable customer, pursuant to Rule 9.33, and identified as an EFP within the Large Trader file format. The reporting of EFP transactions via Large Trader shall identify the reportable customer who executed the EFP and the kind and quantity of the futures cleared. Failure by an omnibus account or foreign broker to submit either the agreement or the particular EFP information to the Exchange may result in a hearing by the Business Conduct Committee to limit, condition or deny access of such omnibus account or foreign broker to the market.
COMEX Rule 104.36A,Exchange of Futures for, or in Connection with, Swap Transactions
(A) An exchange of futures for, or in connection with, a swap (EFS) consists of two discrete, but related, transactions; a swap transaction and a futures transaction. At the time such transaction is effected, the buyer and seller of the futures must be, respectively, the seller and the buyer of the swap. The swap component shall involve the commodity underlying the futures contract (or a derivative, by-product or related product of such commodity). The quantity covered by the swap must be approximately equivalent to the quantity covered by the futures contracts. The swap component of an EFS transaction must comply with the applicable CFTC swap regulatory requirements. (B) Eligible Contracts and Transactions.
Eligible contracts shall include Gold futures (GC), Silver futures (SI), Copper futures (HG), Aluminum futures (AL) and any Exchange contract that is listed for trading on GLOBEX.
(C) Posting/Submission Procedures for EFS Transactions.
(1) Contracts available for trading on the trading floor:
EFS transactions in eligible contracts which are available for trading on the trading floor shall be given on the floor of the Exchange by the Floor Members during the hours of floor trading for such contract and otherwise in accordance with Rule 6.90. Each EFS transaction shall be posted, immediately when the relevant swap terms are determined, but in no event later than the earlier of the next business day or the end of the following permissible posting periods for EFS transactions (following the expiration of the underlying futures contract).
Additionally, EFS transactions in the contracts cited in section (B) of this rule may be accomplished by submission of reports to NYMEX ClearPort® Clearing in accordance with its procedures.
(D) A report of EFS transactions shall be submitted to the Exchange by each Clearing Member representing the buyer and/or seller. Such submission shall be made by its inclusion with EFP transactions in the daily Large Trader Reporting to the Exchange, pursuant to Rule 9.33, within the Large Trader file format. The reporting of EFS transactions via Large Trader shall identify the reportable customer who executed the EFS and the kind and quantity of the futures cleared.
(E)(1) Each buyer and seller must satisfy the Exchange, at its request, that the transaction is a legitimate EFS transaction. Upon the request of the Exchange, all documentary evidence relating to the EFS, including a master swap agreement and any supplements thereto, shall be obtained by the Clearing Members from the buyer or seller and made available by the Clearing Members for examination by the Exchange. Additionally, if the buyer or seller is a Member/Member Firm, the Exchange may obtain the information directly from such person(s).
(2) Failure by a buyer or seller, or its Clearing Member to satisfy the Exchange that an EFS transaction is bona fide shall subject such buyer or seller, if a Member/Member firm, or the clearing member to disciplinary action. Such disciplinary action, depending on the gravity of the offense, may be deemed to be a major offense of the Exchange's rules. Further, if the buyer or seller is not a Member/Member Firm, the Exchange may conduct a hearing before the Business Conduct Committee to limit, condition or deny access to the market.
(F) All omnibus accounts and foreign brokers shall submit a signed EFS reporting agreement in the form prescribed by the Exchange to the Exchange's Compliance Department. Such Agreement shall provide that any omnibus account or foreign broker identified by a Clearing Member (or another omnibus account or foreign broker) as the buyer or seller of an EFS pursuant to Rule 6.21A(C), shall supply the name of its customer and such other information as the Exchange may require. A report of EFS transactions shall be submitted to the Exchange by each omnibus account and foreign broker representing the buyer and/or seller. Such submission shall be made by its inclusion with EFP transactions in the daily Large Trader Reporting to the Exchange, pursuant to Rule 9.33, within the Large Trader file format. The reporting of EFS transactions via Large Trader shall identify the reportable customer who executed the EFS and the kind and quantity of the futures cleared. Failure by an omnibus account or foreign broker to submit either the agreement or the particular EFS information to the Exchange may result in a hearing by the Business Conduct Committee to limit condition, or deny access of such omnibus account or foreign broker to the market.
COMEX Rule 104.36B, Exchange of OTC Metal Options for, or in Connection with, COMEX Metal Options
(A) (1) An exchange of Exchange metal options for, or in connection with, an over-the counter ("OTC") metal options product (or an OTC product with similar characteristics) (hereafter an exchange of options for options or "EOO") consists of two discrete, but related, transactions; an OTC options transaction and an Exchange options transaction. At the time such transaction is effected, the buyer and seller of the Exchange options must be, respectively, the seller and the buyer of the OTC options. The OTC options component shall involve the commodity underlying the related futures contract to the Exchange options contract (or a derivative, by-product or related product of such commodity). The quantity covered by the OTC options must be approximately equivalent to the quantity covered by the Exchange options contracts. (2) Restriction on Eligible Contracts. EOO transactions may be effected for transactions in any of the Exchange's metal options contracts.
(B)(1) Each EOO transaction shall be posted by the Floor Members and cleared through the Exchange in accordance with normal procedures and by the Clearing Members involved Additionally, EOO posting may be accomplished by submission of reports to NYMEX ClearPort® Clearing in accordance with its procedures.
(2) EOO transactions are permitted until trading terminates on the last day of trading in the applicable expiring options contract month.
(C)(1) Each buyer and seller must satisfy the Exchange, at its request, that the transaction is a legitimate EOO transaction. Upon the request of the Exchange, all documentary evidence relating to the EOO, including relevant OTC documentation, shall be obtained by the Clearing Members from the buyer or seller and made available by the Clearing Members for examination by the Exchange. Additionally, if the buyer or seller is a Member/Member Firm, the Exchange may obtain the information directly from such person(s).
(2) Failure by a buyer or seller, or its Clearing Member to satisfy the Exchange that an EOO transaction is bona fide shall subject such buyer or seller, if a Member/Member Firm, or the Clearing Member to disciplinary action. Such disciplinary action, depending on the gravity of the offense, may be deemed to be a major offense of the Exchange's rules. Further, if the buyer or seller is not a Member/Member Firm, the Exchange may conduct a hearing before the Business Conduct Committee to limit, condition or deny access to the market.