• Listing of Cleared OTC London Silver Forwards (cash margin)

      • To
      • Members, Member Firms and Market Users
      • From
      • Market Regulation Department
      • #
      • SER-6225
      • Notice Date
      • 17 July 2012
      • Effective Date
      • 05 August 2012
    • Effective Sunday, August 5, 2012, for trade date Monday, August 6, 2012, and pending all relevant CFTC regulatory review periods, on behalf of the Commodity Exchange, Inc. (COMEX), the New York Mercantile Exchange, Inc. (NYMEX or Exchange) will list a Cleared OTC London Silver Forward (cash margin) contract for submission for clearing through CME ClearPort. The contract is listed with NYMEX, and subject to, the rules and regulations of NYMEX and COMEX.
      The contract specifications are as follows:

      Contract Title
      Cleared OTC London Silver Forwards (cash margin)
      Commodity Code
      LSF
      Contract Size
      0.001 troy ounces
      First Listed Month
      August 8, 2012
      Listing Period
      Every good settlement day (daily) out 5 years from T+2, on LBMA calendar
      Termination of Trading
      Last trade date is first Exchange business day preceding delivery day
      Minimum Price Intervals
      $0.00001
      Settlement Tick
      $0.00001
      Rule Chapter
      1083

      This contract will remain as a forward contract within the clearing environment. The contract will require physical delivery, as described below, and such delivery will occur at the original transaction price.
      The clearing service being offered supports the over-the-counter (OTC) market which is based on standards established by the London Bullion Market Association (LBMA). The LBMA provides, inter alia, standards for the physical delivery of silver, generally referred to as London Good Delivery standards. In the existing OTC market, deliveries of silver can take one of two forms: allocated silver, which refers to the delivery of a certified good delivery silver bar at a registered vault; or unallocated silver, which refers to the delivery of silver held in an account with an LBMA member bank – the account represents a claim on the bank which can be met through the delivery of allocated good delivery silver. Cleared OTC London Silver Forward (cash margin) contracts will result in the delivery of unallocated silver via accounts maintained with LBMA member banks in London.
      In line with OTC market practice, Cleared OTC London Silver Forward (cash margin) contracts will be available for any market standard delivery date as defined by the LBMA – typically any day that is a business day in both London and New York that is mutually agreed to by buyer and seller, subject to a maximum valid delivery date determined by the Exchange.
      Clearing Hours:
      CME ClearPort: Sunday – Friday 6:00 p.m. – 5:15 p.m. (5:00 p.m. – 4:15 p.m. Chicago Time/CT) with a 45-minute break each day beginning at 5:15 p.m. (4:15 p.m. CT).
       


       
      Fees:
      For COMEX members:
       

      Tier
      Fee per ounce ($)
      Equivalent per 5,000 oz ($)
       
       
       
      T+1 (tom), T+2 (spot), T+3
      0.00002
      0.10
      T+4 to 2 months (from spot)
      0.00010
      0.50
      2 months to 6 months
      0.00014
      0.70
      6 months to 10 years
      0.00020
      1.00

       
      For members, the proposed minimum fee per trade is $2.00
       
      For non-members:
       

      Tier
      Fee per ounce ($)
      Equivalent per 5,000 oz ($)
       
       
       
      T+1 (tom), T+2 (spot), T+3
      0.00003
      0.15
      T+4 to 2 months (from spot)
      0.00015
      0.75
      2 months to  6 months
      0.00021
      1.05
      6 months to 10 years
      0.00030
      1.50

       
      For non-members, the proposed minimum fee per trade is $3.00
      Note: “Tom” is short for Tomorrow
       
      Please refer questions on this subject to:
      Research and Product Development:
      Bob Biolsi                                 Bob.Biolsi@cmegroup.com                               +1 (212) 299-2610
      Joann Arena                              Joann.Arena@cmegroup.com                            +1 (212) 299-2356
      Metals Products & Services:
      Miguel Vias                               Miguel.vias@cmegroup.com                              +1 (212) 299-2358

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