• Core Principle 9(B)(iii) Trades

      • To
      • Members, Member Firms and Market Users
      • From
      • Market Regulation Department
      • #
      • NYMEX RA1201-6RR
      • Notice Date
      • 12 October 2012
      • Effective Date
      • 12 October 2012
    • This Advisory Notice supersedes Revised NYMEX Market Regulation Advisory Notice RA1201-6R issued several hours ago. That Advisory Notice incorrectly indicated that NYMEX submitted its revised block trade rules to the CFTC on October 1, 2012. The revised block rules were self-certified to the CFTC on September 27, 2012. 
       
      Other than correcting the date, the remainder of the information in this Advisory Notice is unchanged.
       
      NYMEX Market Regulation Advisory Notice RA1201-6 (Rule 525 Core Principle 9(B)(iii) Trades) from September 26, 2012.  Rule 525 will not become effective and will be formally withdrawn upon the effective date of the block trade rules that NYMEX submitted to the CFTC on September 27, 2012.  The block trade rules are scheduled to become effective at the start of trading on October 15, pursuant to the self-certification process.  This Advisory Notice is being issued to notify the marketplace that the CME ClearPort business model will be transitioned to promote direct execution of the CME ClearPort slate of futures contracts and options on futures contracts by means of trading on Globex and on the trading floor. All CME ClearPort contracts already listed on CME Globex will continue to be offered on that platform, and ongoing product additions to CME Globex will continue as per the schedule identified here. 
       
      In order to ensure orderly trading for those products that market participants may wish to trade apart from the public auction market and that are eligible for such trading, the block trade rules that NYMEX submitted to the CFTC on October 1, 2012, are scheduled to become effective at the start of trading on October 15, pursuant to the self-certification process.
       
      Exchange for Related Position (EFRP, including EFS and EOO) transactions may continue under our rules as another means of execution in CME ClearPort products for market participants. It is our understanding that the CFTC Division of Swap Dealer and Intermediary Oversight will be issuing interpretive guidance making clear that the swap component of any EFRP trade is a swap that is subject to all applicable swap regulations, including such swap regulations that are effective as of October 12, 2012. 
       
      We also understand the CFTC Division of Swap Dealer and Intermediary Oversight will today be issuing no-action relief which provides that the swap components of EFRP trades that are entered into prior to December 31, 2012, will not count toward any market participant's swap dealer de minimis threshold.
       
      This Advisory Notice also supersedes the CME Open Letter to the Energy Market of September 24, 2012, (and associated CME ClearPort FAQ), which are also withdrawn.
       
      Questions regarding this Advisory Notice may be directed to the following individuals in Market Regulation:                                            
       
      Thomas LaSala, Chief Regulatory Officer, at 212.299.2897
      Dean Payton, Deputy Chief Regulatory Officer, at 312.435.3658
      Robert Sniegowski, Senior Director, at 312.341.5991
       
       
      For media inquiries concerning this Advisory Notice, please contact CME Group Corporate Communications at 312.930.3434 or news@cmegroup.com.

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