01/11/2008
The new rule language is attached:
Chapter 1: Definitions and Interpretation
Definitions
Block Trade means a transaction organized and executed in relation to Block Trades pursuant to Rule 6.31;
Chapter 6: General Trading Rules
Rule 6.31:
(A) In this Rule 6.31, reference to a Member shall also include (i) a Guaranteed Customer and (ii) a Seat Lessee.
(B) Block Trades (privately-negotiated transactions) shall be permitted subject to the remaining provisions of this Rule 6.31;
(C) A Block Trade must be for a quantity that is at or in excess of the minimum quantity threshold. No Member may aggregate orders from multiple accounts in order to meet the minimum quantity threshold, unless that Member is permitted to do so by any regulator who is responsible for the activities of that Member on the Exchange.
(D) A member shall not execute any order by means of a Block Trade for a Customer unless that Customer has specified that the order is to be executed as a Block Trade.
(E) The price at which a Block Trade is executed must be fair and reasonable in light of:
(1) the size of the Block Trade,(F) Block Trades shall not trigger Stop Orders or any other conditional orders, permitted by these Rules, or otherwise affect orders in the regular market.
(2) the prices and sizes of other transactions in the same contract at the relevant time,
(3) the prices and sizes of transactions in other relevant markets, including without limitation the underlying cash and futures markets, at the relevant time, and
(4) the circumstances of the markets or the parties to the Block Trade.
(G) The buyer and seller to each Block Trade must ensure that it is reported to the Exchange within five (5) 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 information in respect of Block Trade(s) separately from the reports of transactions in the regular market.
(H) Members involved in the execution of a Block Trade must maintain a complete record of the transaction.
(I) Block Trades shall be permitted in accordance with this Rule 6.31 in the following Exchange products or otherwise with the prior approval of the DFSA under the conditions described:
DME Oman Crude Oil futures contracts, for a threshold minimum quantity of 100 contracts.
Submission via the CPC Trade Entry Portal or through the NYMEX Facilitation Desk:
All Parties who are eligible for participating as a principal in Block Trades as per DME Rule 6.31 and wish to submit transactions via the CPC Trade Entry Portal or via the NFD MUST also be CPC registered. Information on CPC registration can be obtained via the following link:
http://www.nymex.com/cp_start.aspx
All eligible registered principals or their registered brokers may submit block trades through the CPC Trade Entry Portal. Additionally, all eligible registered principals who wish to conduct a Block Trade without the use of a registered broker may contact the NFD at (866) 246-9639 in order to submit Block Trades for an additional fee.
Regulatory Highlights:
All Block Transactions must conform to the minimum size as prescribed by DME as specified in Rule 6.31. Further, aggregation of orders to meet the minimum Block size requirement is prohibited, except if permitted by any regulator who is responsible for the activities of that Member on the Exchange.
All Block Trades must be submitted to the Exchange within 5 minutes of execution.
The Exchange will price report all block transactions.
In addition to the DME Exchange Fee, there will be a fee for executing a Block Trade. That fee will be $.10 cents per contract/side. A further fee of $.20 per contract/side will be applied to a Block Trade that is entered into NYMEX Clearport® Clearing on behalf of the counterparties by the NYMEX Facilitation Desk.