10/01/2007
Only Members who are registered with the CFTC as Floor Brokers ("FBs") may solicit customer orders or exercise discretion over execution of customer orders. A Clerical Employee who is registered with the NFA as an Associated Person ("AP") of a Futures Commission Merchant ("FCM") or Introducing Broker ("IB") may solicit, accept and handle customer orders for GLOBEX and block trades from on and off of the trading floor.
The permitted activities of Clerical Employees who are not registered as APs of an FCM or IB are more limited, as described below in the following Questions and Answers. Under NYMEX Rule 6.30(B)(1) Clerical Employees are permitted to work on the trading floor as GLOBEX electronic trading designees when properly registered with the Exchange as a NYMEX broker assistant ("NBA") (see Notice No. 315, June 8, 2006) or as a COMEX broker assistant ("CBA") (see Notice 636, November 30, 2006).
Members are reminded that they are responsible for supervising their Clerical Employees, and, under NYMEX Rule 6.30 (B)(5), Members may be subject to disciplinary action for any violation committed by Clerical Employees. References to "Clerical Employee" in the Questions and Answers below are to Clerical Employees who are not registered as APs of an FCM or IB.
I. Handling of Customer GLOBEX Orders Received Off of the Trading Floor
Q1: May a Member who is registered as an FB solicit, accept or enter into GLOBEX customer orders from off of the trading floor?II. Handling of Customer Block Trade Orders By Clerical Employees
A1: Yes, a Member FB may solicit, accept and/or enter into GLOBEX customer orders from off of the trading floor provided that he/she has floor trading privileges on the Division applicable to the orders. (A Member who is only registered as a Floor Trader and not as a FB may not handle any customer order, either on the trading floor or off of the trading floor.)
Q2: May a Clerical Employee accept customer orders off of the trading floor and enter such orders for execution on GLOBEX?
A2: A Clerical Employee registered by a Member FB as an NBA or CBA as appropriate to the orders handled by the Clerical Employee may accept and enter customer orders into GLOBEX only from: (1) the NYMEX/COMEX trading floor; or (2) the office of his/her Member FB employer. In that regard, before permissioning a Clerical Employee that is registered as an NBA or CBA to accept or enter customer orders from any location, the Member FB should carefully consider his/her ability to effectively supervise such Clerical Employee.
Q3: May a Clerical Employee solicit a customer order on the trading floor or from off of the trading floor?
A3: No. A Clerical Employee may not solicit a customer order from any location.
Q4: May a Clerical Employee exercise discretion over a customer order on the floor or from off of the trading floor?
A4: No. A Clerical Employee may not exercise discretion over any order from any location.
Q5: May a Clerical Employee who receives on the trading floor, a request from a customer to obtain a quote ("RFQ") for a block trade, approach Members who are registered as Floor Brokers or Floor Traders who are known to make markets in block trades and request from them a quote for a block trade?
A5: Yes -- provided that the employer of the Clerical Employee has authorized the Clerical Employee to handle block trade orders of customers and the Clerical Employee has not solicited the customer order. After obtaining the quote in response to the customer's RFQ, the Clerical Employee must communicate the quote to the customer, but may not otherwise act on the RFQ without specific instructions from the customer.
Q6: If in Q5 above the Customer instructed the Clerical Employee to obtain a quote for a block trade and to effect the block order if the quote met specified price and quantity parameters, may the Clerical Employee approach Members who are registered as Floor Brokers or Floor Traders, request an RFQ, and instruct such Member to consummate the block trade on behalf of the customer in accordance with the terms of the customer's order?
A6: Yes, provided the Clerical Employee does not solicit the order and does not execute the block trade order on his/her own discretion, and provided the Member employing the Clerical Employee has authorized the Clerical Employee to accept customer orders for block trades.
Q7: May a Clerical Employee who receives an order for a block trade from a customer ("Customer A") call up another customer ("Customer B") and inform him/her of the block trade order and/or inquire as to his/her willingness to enter into a block trade?
A7: No. Clerical Employees are not permitted to engage in the solicitation of customer orders. Initiating a call to Customer B in the circumstances described above would likely be deemed to constitute the solicitation of an order. However, the Clerical Employee could inform the Member FB who employs him/her of Customer A's pending block trade order, and the Member FB could call Customer B and inquire as to Customer B's interest in participating in the block trade.
Q8: May a Clerical Employee who is not located on the trading floor respond to a customer's request for an RFQ for a block trade or otherwise handle customer block trade orders from off of the trading floor?
A8: No. A Clerical Employee who is not located on the trading floor may not respond to customer block trade RFQs or otherwise handle customer block trade orders.