Notice to Members
Notice No. 524 12/05/2007
Housekeeping Amendments to NYMEX Rules 11.57A and 11G.19, Permissible Pre-Execution Discussions
The amendments to Rules 11.57A and 11G.19 clarify the "first" and "second" parties who engage in pre-execution discussions, and references to NYMEX ACCESS in Rule 11.57A have been deleted. These amendments are housekeeping in nature, and are effective December 7, 2007. * * * * (Additions are in bold/italics; deletions are in bold/strikethrough.) Rule 11.57A, Permissible Pre-Execution Discussions Firms may engage in pre-execution discussions with regard to transactions executed on NYMEX electronic trading systems where the firm wishes to be assured that a counter-party will take the opposite side of the order. One party (the first party) may agree in advance with another party (the second party) that the first party will take the opposite side of the first second party's order, under the following circumstances: (A) Customers must consent to allow pre-execution discussions with other market participants. (B) Electronic Traders or Authorized Terminal Users in the case of trading on NYMEX ACCESS® or Users or User Agents in the case of trading on NYMEX ClearPort® Trading, who are solicited to participate in an electronic transaction through pre-execution discussions shall not (i) disclose to another Electronic Trader or an Authorized Terminal User in the case of trading on NYMEX ACCESS® or a User or User Agent in the case of trading on an NYMEX ClearPort® Trading the details of such discussions; or (ii) enter an order through a NYMEX electronic trading system to take advantage of information conveyed during such discussions unless the Electronic Trader or an Authorized Terminal User in the case of trading on NYMEX ACCESS® or a User or User Agent in the case of trading on an NYMEX ClearPort® Trading has agreed during the pre-execution discussions to participate in the transaction in accordance with this Rule and the order is entered to implement that agreement. (C) A period of at least five seconds shall elapse between entry of the two orders during which the order first entered is resting in the market. (D) Orders entered pursuant to this Rule must be entered in accordance with the provisions of Rule 11.57(c), if applicable. Rule 11G.19, Permissible Pre-Execution Discussions Firms may engage in pre-execution discussions with regard to transactions executed on GLOBEX in NYMEX and COMEX Products where the firm wishes to be assured that a counter-party will take the opposite side of the order. One party b>(the first party) may agree in advance with another party (the second party) that the first party will take the opposite side of the first second party's order, under the following circumstances: (A) Customers must consent to allow pre-execution discussions with other market participants. (B) GLOBEX Users who are solicited to participate in an electronic transaction through pre-execution discussions shall not (i) disclose to another GLOBEX User the details of such discussions; or (ii) enter an order through a NYMEX electronic trading system to take advantage of information conveyed during such discussions unless the GLOBEX User has agreed during the pre-execution discussions to participate in the transaction in accordance with this Rule and the order is entered to implement that agreement. (C) A period of at least five (5) seconds shall elapse between entry of the two orders for futures and a period of at least 15 seconds shall elapse between entry of the two orders for options during which the order first entered is resting in the market. (D) Orders entered pursuant to this Rule must be entered in accordance with the provisions of Section C, if applicable.
Should you have any questions or require any further information, please contact exchangeinfo@nymex.com