Notice to Members
Notice No. 562 12/20/2007
Restitution Payment Liability – Amendments to Rules 8.65, Sanctions, and 8.68, Notification of Final Disciplinary Action Involving Financial Harm to a Customer
At its meeting on December 11, 2007, the Board of Directors approved recommended amendments to Exchange Rules 8.65 and 8.68. The amendments strengthen the Rules by placing responsibility on a Member or Member Firm to pay restitution resulting from violative trading conduct by a Member or Member Firm's employee in the event of non-payment by that employee. The Member or Member Firm may still request a hearing panel, under Rule 8.65, to contest liability for restitution. These amendments will be effective December 21, 2007. Currently under Rules 8.65 and 8.68, the Exchange may hold Members and Member Firms responsible for penalties, including fines issued to their employees, and to issue final disciplinary actions against Members to rectify financial harm to customers. The Rules do not, however, specifically hold Members and/or Member Firms liable for restitution owed by their respective employees. Unlike "Sanctions," restitution is not penal in nature, but is intended to re-establish the relevant parties' financial positions prior to the violation in question. The revised rule places responsibility on the Member or Member Firm employee to pay restitution if it is not paid by the employee. The Member or Member Firm may still request a hearing panel, under Rule 8.65, to contest liability for restitution. To view these amendments, please click here
Should you have any questions or require any further information, please contact exchangeinfo@nymex.com