November 30, 2001
Notice No. 01-410

TO:		NYMEX DIVISION MEMBERS AND MEMBER FIRMS
		NYMEX DIVISION CLEARING MEMBERS

FROM:		J. Robert Collins, Jr., President

SUBJECT:	NEW TEMPORARY NYMEX RULE: EXCHANGE OF OTC ENERGY OPTIONS FOR
NYMEX ENERGY OPTIONS
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Yesterday, the Exchange distributed Notice to Members No. 01-409, which
summarized a new temporary procedure going into effect today that permits
the exchange of OTC energy options for NYMEX energy options (EOO).  As an
informational follow-up to yesterday's notice, this notice includes the text
of the new temporary EOO rule.

				NEW TEMPORARY NYMEX RULE 6.21E

Rule 6.21E.    EXCHANGE OF OTC ENERGY OPTIONS FOR, OR IN CONNECTION WITH
NYMEX ENERGY OPTIONS  (Temporary Rule)

(A) (1) An exchange of Exchange energy options for, or in connection with,
an over-the counter ("OTC") energy options product (or an OTC product with
similar characteristics) (hereafter an exchange of options for options or
"EOO") consists of two discrete, but related, transactions; an OTC options
transaction and an Exchange options transaction.  At the time such
transaction is effected, the buyer and seller of the Exchange options must
be, respectively, the seller and the buyer of the OTC options.  The OTC
options component shall involve the commodity underlying the related futures
contract to the Exchange options contract (or a derivative, by-product or
related product of such commodity).  The quantity covered by the OTC options
must be approximately equivalent to the quantity covered by the Exchange
options contracts. This temporary rule shall terminate thirty (30) days
following the effective date of the implementation of the rule.

	(2) Restriction on Eligible Contracts.  EOO transactions may be
effected for transactions in any of the Exchange's energy options contracts.

	(3) Restriction on Transactions.  An EOO that establishes a NYMEX
options position for both buyer and seller shall not be permitted on the
first business day following the expired NYMEX contract.

		(B)(1)  The report of an EOO transaction shall be given on
the Floor of the Exchange during the hours of futures trading.  (2) EOO
transactions are permitted until trading terminates on the last day of
trading in the applicable expiring options contract month.

C)  A report of such EOO transaction shall be submitted to the Exchange by
each Clearing Member representing the buyer and/or seller.  Such report
shall identify the EOO as made under this Rule and shall contain the
following information: a statement that the OTC options component of the EOO
complied with any applicable CFTC regulatory requirements at the time the
EOO was entered into between the buyer and seller, a statement that the EOO
has resulted or will result in a change of payments or other such change,
the kind and quantity of the options, the price at which the options
transaction is to be cleared, the names of the Clearing Members and
customers and such other information as the Exchange may require.  Such
report (form) shall be submitted to the Compliance Department by 12:00 noon,
no later than two (2) Exchange business days after the day of posting the
EOO on the Floor of the Exchange.

(D)(1) Each buyer and seller must satisfy the Exchange, at its request, that
the transaction is a legitimate EOO transaction.  Upon the request of the
Exchange, all documentary evidence relating to the EOO, including relevant
OTC documentation, shall be obtained by the Clearing Members from the buyer
or seller and made available by the Clearing Members for examination by the
Exchange.  Additionally, if the buyer or seller is a Member/Member Firm, the
Exchange may obtain the information directly from such person(s).

(2) No EOO that is linked to or contingent upon entry into a second,
offsetting OTC options transaction may be transacted at any time.

(3)	Failure by a buyer or seller, or its Clearing Member to satisfy the
Exchange that an EOO transaction is bona fide shall subject such buyer or
seller, if a Member/Member Firm, or the Clearing Member to disciplinary
action.  Such disciplinary action, depending on the gravity of the offense,
may be deemed to be a major offense of the Exchange's rules.  Further, if
the buyer or seller is not a Member/Member Firm, the Exchange may conduct a
hearing before the Business Conduct Committee to limit, condition or deny
access to the market.

(E) Each EOO transaction shall be posted by the Floor Members and cleared
through the Exchange in accordance with normal procedures and by the
Clearing Members involved.

(F)  All omnibus accounts and foreign brokers shall submit a signed EOO
reporting agreement in the form prescribed by the Exchange to the Exchange?s
Compliance Department.  Such Agreement shall provide that any omnibus
account or foreign broker identified by a Clearing Member (or another
omnibus account or foreign broker) as the buyer or seller of an EOO pursuant
to Rule 6.21A(C), shall supply the name of its customer and such other
information as the Exchange may require.  Such information shall be
submitted to the Exchange?s Compliance Department by 12:00 noon no later
than two (2) Exchange business days after the day of posting the EOO on the
Floor of the Exchange.  Failure by an omnibus account or foreign broker to
submit either the agreement or the particular EOO information to the
Exchange may result in a hearing by the Business Conduct Committee to limit,
condition or deny access of such omnibus account or foreign broker to the
market.