Trading at Settlement and Matched Order Transactions

Effective September 14, 2009, NYMEX & COMEX will adopt new Rule 524 (“Trading at Settlement (“TAS”) and Matched Order (“MO”) Transactions”) as a result of the harmonization of NYMEX and COMEX trade practice rules with the rules of CME and CBOT.  On that date, new Rule 524 will replace Rules 6.40B, 11G.30 and 104.42.  

The commodities and contract months in which TAS and MO transactions may take place are set forth below, followed by the text of the rule.

Trading at Settlement (“TAS”) Transactions

TAS transactions may take place in the following futures contract months:

Pit-Traded Contracts

Light “Sweet” Crude Oil – spot (except on the last trading day), 2^nd, 3^rd and 7^th months

New York Harbor No. 2 Heating Oil – spot (except on the last trading day), 2^nd and 3^rd months

Natural Gas – spot (except on the last trading day), 2^nd and 3^rd months

NY Harbor Gasoline Blendstock (RBOB) – spot (except on the last trading day), 2^nd and 3^rd months

CME Globex Contracts

Commodity

Code on                                   Name & Contract Months                                   Cleared Product

CME Globex

     WST              WTI Crude Oil Financial – spot, 2^nd and 3^rd months                           WS

     RTT               RBOB Gasoline Financial – spot, 2^nd and 3^rd months                         RT

     BHT               Heating Oil Financial – spot, 2^nd and 3^rd months                                BH

     HPT               Natural Gas Financial – spot, 2^nd and 3^rd months                               HP

     HHT               Natural Gas Financial (Last Day) – spot, 2^nd and 3^rd months               HH

     BBT               Brent Crude Oil Financial – spot, 2^nd and 3^rd months                         BB

     CLT               Light “Sweet” Crude Oil                                                                  CL

                          spot (except on the last trading day), 2^nd, 3^rd and 7^th months

     HOT               Heating Oil                                                                                      HO

                          spot (except on the last trading day, 2^nd and 3^rd months

     NGT               Natural Gas                                                                                      NG

                          spot (except on the last trading day), 2^nd and 3^rd months

     RBT               RBOB Gasoline                                                                                RB

                          spot (except on the last trading day), 2^nd and 3^rd months

     RET               REBCO                                                                                            RE

                          spot (except on the last trading day), 2^nd and 3^rd months

Matched Orders (“MO”)

MO transactions may take place in the following pit-traded futures contract months:

Copper – spot and next four consecutive months

Aluminum – spot and next four consecutive months

Questions regarding this Advisory Notice may be directed to the following individuals in Market Regulation:

Nancy Minett, Director, 212.299.2940

Russell Cloughen, Associate Director, 212.299.2880

Rule 524 (“Trading at Settlement (“TAS”) and Matched Order (“MO”) Transactions”)

The Exchange shall determine the commodities, contract months and time periods during which TAS and MO transactions shall be permitted.

524.A.   Trading at Settlement (“TAS”) Transactions

The following shall govern TAS transactions:

1.         TAS transactions executed in the pit must be made open and competitively pursuant to the requirements of Rule 521 during the hours designated for pit trading in the particular contract and must be identified as such on the member’s trading records.

2.   TAS transactions on Globex may take place at any time the applicable contracts are available for trading on Globex.

3.   TAS-eligible commodities and contract months may be executed as block trades pursuant to the requirements of Rule 526 except that TAS block trades may not be executed on the last day of trading in an expiring contract.

4.         TAS transactions may be executed at the current day’s settlement price or at any valid price increment ten ticks higher or lower than the settlement price.

      524.B.   Matched Order (“MO”) Transactions

The following shall govern MO transactions:

1.   The price of the MO will be the settlement price for that contract.

2.   Only Market on Close (“MOC”) orders are eligible to trade as an MO.  Members may execute an MOC order during an eligible MO time period as an MO unless specific instructions to the contrary are provided, and such instructions are denoted on the order.  Failure to enter specific instructions when placing the MOC order will forfeit a customer’s right to cancel the MOC, in whole or in part, if the order or any portion of the order has been previously executed.  An MOC order executed as an MO must be reported to the customer as an MO upon execution.  An order entered as an MO will be executed during the closing period as an MOC order if not previously executed as an MO or specifically designated to be executed only as an MO.  An order specifically designated for execution only as an MO must be designated as such at the time the order is placed.

3.   Members must identify an MOC order executed as an MO on their trading record.