Notice to Members
Notice No. 24 01/23/2008
Reinstatement of Temporary 30-Day Lease Member Guarantee
Effective January 24, 2008, the Exchange is reinstating the former provision within the NYMEX Rules which allowed Primary Clearing Members (PCMs) to issue a "Temporary 30-Day Guarantee" to Lease Members who had their trading equity fall below the required minimums ($50K for NYMEX, $25K for COMEX). Said Rule [NYMEX 2.32(B)] was inadvertently deleted last year during the merging of the NYMEX and COMEX Divisions' Rulebooks. (Additions are bold/italicized) NYMEX Rule 2.32 – Duties of Guarantors and Qualifying Clearing Members A) Monitoring of Guaranteed Members Each PCM shall affirmatively monitor the financial condition of each Floor Member guaranteed to determine that Floor Member's compliance with the terms and financial requirements of Rule 2.23 (lease members) and shall take steps to terminate its guarantee upon non-compliance with such requirements. In the event a Lease Member fails to maintain the minimum deposit in his trading account as required by Rule 2.23 (B), he may obtain from his Primary Clearing Member a temporary thirty (30) day financial guarantee. The issuance of such a financial guarantee relieves the Clearing Member from initiating steps to terminate its relationship as the Lease Member's Primary Clearing Member and provides the applicable Lease Member with additional time to retain compliance. The financial guarantee referred to in the paragraph above must be filed with Exchange's Financial Surveillance Division on the same date it is executed. For each financial guarantee issued, the applicable Primary Clearing Member must maintain working capital in excess of that required by Rules 2.14 and 2.15 in amounts equal to $50,000 for NYMEX Division Lease Members and $25,000 for COMEX Division Lease Members. It should be noted that a Lease Member may only obtain such a financial guarantee twice within any twelve (12) month period and never in consecutive thirty (30) days periods. (B) Retention of Account Equity A PCM shall retain the account equity that comprises, for purposes of Rule 2.23, the net liquidating equity, if any, required by these Rules to be maintained in a Floor Member's trading account for the greater of ten (10) days or until any and all pending claims by Members and Member Firms have been resolved.
Should you have any questions or require any further information, please contact exchangeinfo@nymex.com