Launch of Two (2) New SO2 Emission 25-Allowance Futures and Option Contracts on CME ClearPort®, the NYMEX Trading Floor and Globex®

On Sunday, July 12, 2009 for trade date Monday, July 13, 2009, the New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will launch a new SO₂ Emission 25-Allowance Futures contract for trading and clearing on CME ClearPort.  The SO₂ Emission 25-Allowance Futures contract will be available for trading on Globex on trade date July 27, 2009.

Additionally, on Tuesday, July 14, 2009, the Exchange will launch a new SO₂ Emission 25-Allowance Option contract for trading on the NYMEX trading floor and for clearing on CME ClearPort.

CME ClearPort is a set of flexible clearing services open to over the counter (OTC) market participants to significantly mitigate counterparty risk and provide capital efficiencies across asset classes. 

These contracts are listed by NYMEX, and are subject to NYMEX rules and regulations. 

A.    SO₂ Emission 25-Allowance Futures Contract

Contract Unit

The contract unit shall be twenty five (25) SO₂ emission allowances for delivery made by transfer through AMS.

Deliverable Allowances

1)     Contracts without a specified vintage year:

(a)   For March through December contract terminations, SO₂ emission allowances acceptable for delivery are allowances with either a vintage corresponding to the calendar year of the terminating contract month or a vintage of any year prior to the calendar year of the terminating contract month.

(b)   For January and February contract terminations, SO₂ emission allowances acceptable for delivery are allowances with a vintage of any year prior to the calendar year of the terminating contract month.

2)     Contracts with a specified vintage year

SO₂ emission allowances acceptable for delivery are allowances with a vintage corresponding to the specific vintage year of the terminating contract month or a vintage of any year prior to the specified vintage year of the terminating contract month.

Termination of Trading

With the exception of February contracts, trading in the current delivery month shall cease on the last business day of the contract month. Trading in the February contracts shall cease on the third to last business day of the expiring contract month.

Minimum Price Fluctuations

Prices shall be quoted in dollars and cents per allowance. The minimum price fluctuation shall be $0.10 per SO₂ emission allowance ($2.50 per contract).

Codes

Listed Months

1)     Contracts without a specified vintage year

The first listed month for these contracts will be August 2009.  Monthly contracts will list thirty-six months, consecutively. 

2)     Contracts with a specified vintage year

The first listed month for these contracts will be August 2009.  Monthly contracts will list two consecutive front months and, the December of the current year and the December of the year following the current year.  A vintage December of the current year will not be listed due to non-vintage December coverage.

The Exchange will allow exchange of futures for physical (“EFP”) and exchange of futures for swap (“EFS”) transactions to be submitted through CME ClearPort clearing.  The EFP and EFS transactions in these futures contracts will be governed by the provisions of Exchange Rules 6.21 and 6.21A, respectively. 

Rulebook Chapter: 554

B.    SO₂ Emission 25-Allowance Option

Trading Unit

An SO₂ Emission 25-Allowance Option contract is a European-style option. An SO₂ Emission 25-Allowance put or call option contract traded on the Exchange represents an option to assume a short or long position in the underlying SO₂ Emission 25-Allowance Futures contract without a specified vintage year traded on the Exchange.

Expiration

An SO₂ Emission 25-Allowance Option contract listed on the Exchange shall expire at the close of trading three business days prior to the expiration of the underlying SO₂ Emission 25-Allowance Futures contract.

Strike Prices

Ten strike prices in increments of $1.00 per allowance above and below the at-the-money strike price. Strike price boundaries are adjusted according to futures price movements.

Listed Months

The first listed month will be August 2009.  Monthly contracts will list thirty-six months, consecutively. 

Code: S2

Rulebook Chapter: 606

C.     Trading Hours

Electronic trading and clearing is conducted from 6:00 p.m. Sunday until 5:15 p.m. Friday (New York Prevailing time) via the CME ClearPort^® electronic clearing and trading systems.  There is a 45-minute break each day between 5:15 p.m. (current trade date) and 6:00 p.m. (next trade date).

Open outcry trading on the Exchange trading floor is available between 9:00 a.m. and 2:30 p.m. (New York Prevailing time) Monday through Friday, except on Exchange Holidays.

D.    Fee Schedule

Please find below the fee schedule for listing of the new SO₂ Emission 25-Allowance Futures and Option contracts.

The chapters setting forth the terms and conditions of these contracts will be available on the Exchange’s online rulebook. Margins and position limits are announced in separate notices.

Should you have any questions or require any further information, please contact Brad Leach at 212.299.2609.