(01-154) Implementation of New NYMEX Rule 9.11A (Give-Up Trades) ,
 Notice # 01-154
May 7, 2001

TO:
All NYMEX Division Members and Member Firms

FROM:
Neal L. Wolkoff, Executive Vice President

RE:
Implementation of New NYMEX Rule 9.11A (=01&Give-Up Trades=018)

DATE:
May 7, 2001
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D
Please be advised that beginning on the trade date of Friday, June 1, 2001,=
=20
new NYMEX Rule 9.11A (=01&Give-Up Trades=018) will go into effect.

! In the absence of an applicable give-up agreement, new Rule 9.11A will=20
define the respective responsibilities/obligations to an order of executing=
=20
brokers, customers and Clearing Members.

! The term =01&executing broker=018 as used in Rule 9.11A refers to the reg=
istered=20
billing entity, Member Firm or Floor Broker to whom the order is transmitte=
d.

! Rule 9.11 will provide that, in the absence of an applicable give-up=20
agreement, a Clearing Member may reject a trade only if: (1) the trade=20
exceeds trading limits established by the Clearing Member for that customer=
=20
that have been communicated to the executing broker as provided by the rule=
=20
or (2) the trade is an error for which the executing broker is responsible.

! The new rule also places affirmative obligations on executing brokers to=
=20
confirm Clearing Member authorization for an account.  For example, prior t=
o=20
an executing broker accepting and executing an initial order for any new=20
customer account, such executing broker must confirm with the Clearing Memb=
er=20
by telephonic, electronic or written means, that:
(a) the customer has a valid account with the Clearing Member;
(b) the account number;
(c) the brokerage rate;
(d) the customer is authorized by the Clearing Member to place orders with=
=20
the executing broker for that account; and
(e) a listing or summary of persons authorized to place orders for that=20
account.
Moreover, the executing broker must retain a copy of the authorization or t=
he=20
specifics of the telephonic confirmation, which includes: opposite party,=
=20
date, time, and any other relevant information.  The Compliance Department=
=20
will conduct periodic audits of such records, and falsification of such=20
information shall be the basis for disciplinary action.


If you have any questions concerning this new rule, please contact Bernard=
=20
Purta, Senior Vice President, Regulatory Affairs and Operations, at (212)=
=20
299- 2380; Thomas LaSala, Vice President, NYMEX Compliance Department, at=
=20
(212) 299-2897; or Arthur McCoy, Vice President, Financial Surveillance=20
Section, NYMEX Compliance Department, at (212) 299-2928,

NEW RULE 9.11A (=01&Give-Up Trades=018)

(Entire rule is new.)

Rule 9.11A Give-Up Trades

In the absence of a give-up agreement whose terms and conditions govern the=
=20
responsibilities/obligations of executing brokers, customers and Clearing=
=20
Members, the following rules shall define the respective=20
responsibilities/obligations of those parties to an order.  The =01&executi=
ng=20
broker=018, as used in this rule, is the registered billing entity, Member =
Firm=20
or Floor Broker to whom the order is transmitted.

(A)   Responsibilities/Obligations of Clearing Members

(1). Limits Placed by Clearing Member.   A Clearing Member may, in its=20
discretion, place trading limits on the trades it will accept for give-up f=
or=20
a customer=01,s account from an executing broker, provided however, that th=
e=20
executing broker receives prior written or electronic notice from the=20
Clearing Member of the trading limits on that account.  Notice must be=20
received by the executing broker in a timely manner.  A copy of such notice=
=20
shall be retained by the Clearing Member.

(2). Trade Rejection.  A Clearing Member may reject (=01&DK=018) a trade on=
ly if: =20
(1) the trade exceeds the trading limits established under Section I(A) of=
=20
this rule for that customer and it has been communicated to the executing=
=20
broker as described in Subsection (A); or (2) the trade is an error for whi=
ch=20
the executing broker is responsible.  If a Clearing Member has a basis for=
=20
rejecting a trade, and chooses to do so in accordance with the provisions o=
f=20
Rule 2.21(B), it must notify the executing broker promptly.

(3). Billing.  A Clearing Member will pay all floor brokerage fees incurred=
=20
for all transactions executed by the executing broker for the customer and=
=20
subsequently accepted by the Clearing Member by means of the ATOM system. =
=20
Floor brokerage fees will be agreed upon in advance among the Clearing=20
Member, customer and the executing broker.

(B) Responsibilities/Obligations of Executing Brokers

(1) Customer Order Placement.  An executing broker will be responsible for
determining that all orders are placed or authorized by the customer.  Once=
=20
an order has been accepted, a broker or the broker=01,s clerk must:

(a) confirm the terms of the order with the customer;
(b) accurately execute the order according to its terms;
(c) confirm the execution of the order to the customer as soon as=20
practicable; and
(d) transmit such executed order to the Clearing Member as soon as=20
practicable in accordance with Exchange Rules and procedures.

2. Use of Other Persons.  Unless otherwise agreed in writing, the executing=
=20
broker is allowed to use the services of another broker in connection with=
=20
the broker=01,s obligations under these rules.  The executing broker remain=
s=20
responsible to the customer and Clearing Member under these rules.

3.  Executing Broker Responsibility for Verifying Clearing Member =20
Authorization.  Prior to a broker accepting and executing an initial order=
=20
for any new customer account, the executing broker must confirm with the=20
Clearing Member by telephonic, electronic or written means, that:
(f) the customer has a valid account with the Clearing Member;
(g) the account number;
(h) the brokerage rate;
(i) the customer is authorized by the Clearing Member to place orders with=
=20
the executing broker for that account; and
(j) a listing or summary of persons authorized to place orders for that=20
account.
The executing broker must retain a copy of the authorization or the specifi=
cs=20
of the telephonic confirmation, which includes: opposite party, date, time,=
=20
and any other relevant information.  The falsification of such information=
=20
shall be the basis for disciplinary action.

4. Rejection of Customer Order.  Where an executing broker has confirmed=20
Clearing Member authorization to execute orders on behalf of a customer in=
=20
accordance with this Rule 9.11A, the broker may, in the broker=01,s discret=
ion,=20
reject an order that the customer transmits to the broker for execution.  T=
he=20
broker shall promptly notify the customer and the Clearing Member(s) of any=
=20
such rejection.



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