Amendments to NYMEX Rules 559 and 560 to Establish Hard Expiration Position Limits for Certain Last Day Natural Gas Financially-Settled Contracts

The New York Mercantile Exchange, Inc. is amending Rules 559, Position Limits and Exemptions, and 560, Position Accountability.  Effective for the February 2010 expiration, these amendments will establish hard expiration position limits for the following last day natural gas financially-settled contracts:

            Henry Hub Natural Gas Last Day Financial Futures                          HH

            Henry Hub Natural Gas Swap Futures                                               NN

            Henry Hub Natural Gas Last Day Financial Option                          E7

The genesis of the amendments stem from a request by the Commodity Futures Trading Commission (“CFTC”) to apply expiration limits in lieu of the pre-existing expiration accountability levels to certain NYMEX financially-settled natural gas products comparable to that of other available financially-settled natural gas contracts that were the subject of recent significant price discovery contract (“SPDC”) rulemaking applicable to Exempt Commercial Markets (“ECMs”).  The effected ECM has recently served notice of an effective date for such limits citing the February 2010 contract and the NYMEX implementation is comparable. The amendments are reflected in the attached Chapter 5, Position Limits, Accountability Levels and Reportable Levels Table.

Additionally, Rule 559 is being amended to provide for the ability to apply for a conditional limit from the limits which will be in place for the Last Day Financial Natural Gas contracts provided that market participants can demonstrate that they have no activity or position in the physically settled Natural Gas Contract and can additionally provide information on OTC positions during the last three trading days of such contract.

Questions regarding these amendments can be directed to Anthony V. Densieski, Director, Market Surveillance, at 212.299.2881, or Chris Reinhardt, Supervisor, Market Surveillance, at 212.299.2884.

Attachment

NOTIFICATION OF AMENDMENTS TO NYMEX RULES 559 and 560

(bold/underline indicates additions; strikethrough indicates deletions)

559.F Conditional Limit in NYMEX Last Day Financial Natural Gas Contracts

The Market Regulation Department may grant a Conditional limit in Last Day Financial Natural Gas contracts of up to the equivalent of five thousand (5,000) NYMEX Physical Natural Gas Contracts (NG) during the period that position limits are applicable. Any participant seeking such exemption must agree:  (1) not to hold a position in the NG contract during the last three days of trading; (2) provide the Exchange information on the complete book of all positions related to the Henry Hub; and (3) any other information/documentation required by the Exchange.

559.FG. Violations

Violations of position limits and approved exemption limits are subject to the provisions of Rule

443.