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Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: exchangeinfo@nymex.com X-To: tana.jones@enron.com X-cc: X-bcc: X-Folder: \Tanya_Jones_Dec2000\Notes Folders\All documents X-Origin: JONES-T X-FileName: tjones.nsf Notice No. 00-408 December 4, 2000 TO: All COMEX Members/Member Firms All COMEX Clearing Members All COMEX Floor Traders All COMEX Operations Managers FROM: Michael Campanelli, Vice President, Floor Operations, COMEX Division RE: Options Expiration Operational Procedures for the Trading Floor and Clearin= g Members _____________________________________________________ The expiration date for the January 2001 options contract for Silver (SO F0= 1)=20 and Gold (OG Z01) is Friday, December 8, 2000. GENERAL OPERATIONAL PROCEDURES All Clearing Members and Qualified Floor Traders that carried an options=20 position as of the close of business day prior to the expiration day, or=20 engaged in trading activity on Expiration Day in the expiring options=20 contract will be required to have a knowledgeable, duly authorized on-line= =20 trade entry ("OLTE") system trained representative available until released= =20 by the Exchange staff. All adjustments and/or corrections, must be=20 accompanied by relevant supporting documentation prior to being incorporate= d=20 into expiration processing. In essence, making the expiration processing a= n=20 extension of the afternoon trade resolution procedures. Exchange Clearing (299-2110) and Trade Processing (299-2465 and 299-2044)= =20 personnel will be available to assist with the processing of notices of=20 Exercise and Abandonment, position transfers, trade corrections and other= =20 questions or problems you may have. Failure by any Clearing Member or qualified Floor Trader to comply with=20 procedures as outlined herein may result in severe disciplinary action by t= he=20 Exchange and potential financial liability to customers or members for=20 failure to exercise diligence in the processing of information. TRADING FLOOR OPERATIONAL PROCEDURES Trading in the January 2001 Silver and Gold Options Contracts will cease at= =20 2:25 P.M. and 2:30 P.M. respectively on December 8, 2000. All Brokers and= =20 Traders must inform their Clearing Members of their intentions to exercise = or=20 abandon such Options by 4:00 P.M. On Friday, December 8, 2000, all Brokers and Clearing Members must have a= =20 duly authorized, On-Line Trade Entry ("OLTE") system trained representative= =20 available until such time as the Exchange deems necessary. NOTE: After 4:30 P.M. all expiring option trade data must be inputted on=20 special "OLTE" terminals located in the Trade Processing Room. Any other=20 means of submission will be rejected by the Exchange. Members will be able= =20 to submit all other trade data until 5:00 P.M. After the UTR and the Preliminary Spot Month Matched Trade Reports are=20 displayed, Clearing Member representatives will be able to pick up their=20 Preliminary Clearing reports at the Clearing Department. A final review of all submissions will be made, the Supervisor of the Trade= =20 Processing Room will detain only those Clearing Members and/or Broker=20 representatives involved. All final corrections will be made at this time= =20 and upon determination of the Supervisor that all option processing is=20 complete, all representatives will be released. Exchange Reports based on Friday=01,s submissions and processing will be=20 available on Monday morning December 11, 2000. In the event that you have any questions regarding the foregoing trading=20 floor procedures please contact Michael Campanelli at (212) 299-2072 or Dav= id=20 Sherman at (212) 299-2061. CLEARING DEPARTMENT OPERATIONAL PROCEDURES 1. OPEN POSITION CONFIRMATION ("OPC") - The OPC should reflect as accuratel= y=20 as possible all futures and options gross positions as of close-of business= =20 on the business day prior to expiration. Review the estimated current gros= s=20 positions as shown and make appropriate adjustments. The OPC must be=20 submitted not later than 9:00 AM. 2. OPTIONS EXERCISE/ABANDONMENT REQUEST FORM ("E/A") - An expiring option= =20 with a strike price in-the-money by one tick or more will be subject to=20 automatic exercise unless an Option Abandonment Request form is submitted= =20 advising that a Clearing Member ("CM") elects to abandon some or all of its= =20 position in that strike price (i.e., for the option series). All other=20 options series in the expiring month will be subject to automatic abandonme= nt=20 unless an Option Exercise Request form is submitted. When submitting an E/= A=20 form, please note the following: (a) An E/A form must be submitted not later than 5:00 PM. (b) Do not submit an Exercise form for positions in strike prices, which ar= e=20 subject to automatic Exercise nor submit an Abandonment form for positions in strike prices, whi= ch=20 are subject to automatic abandonment. © If a CM wishes to submit an E/A form to abandon a position in a strike= =20 price subject to automatic exercise or wishes to exercise a position in a= =20 strike price which is out of the money, it is necessary to notify Clearing = by=20 telephone of such anticipated action. The CM must have an officer availabl= e=20 to confirm such intention. (d) CMs may secure from Clearing a time-stamped receipt of the CM copy to= =20 assure submission of the CM=01,s E/A forms. 3. OPTION POSITION REDUCTION REQUEST FORM ("OPRR") - As a general rule,=20 purchases and sales of option contracts are presumed to be new business. = If=20 some or all of your purchases and sales are in fact undertaken for position= =20 liquidation purposes, OPRR forms may be submitted on the day of expiration= =20 and will be used in conjunction with trade data to reduce your projected=20 position in an expiring contract. OPRR requests in excess of actual traded= =20 volume will be rejected. Exception: Cabinet trades and cancel correction= =20 trades will automatically liquidate existing positions, therefore do not=20 submit an OPRR form for cabinet or cancel correction trades. The OPRR form must be submitted not later than 5:00 PM. 4. HOUSE/CUSTOMER POSITION TRANSFER REQUEST FORM ("H/C") - H/C forms may be= =20 used only to transfer previously cleared contracts between a CM=01,s house = and=20 customer accounts. Problem trades (those which have not cleared prior to=20 expiration day), must be corrected using COMEX=01,s on-line trade entry sys= tem=20 under the direct supervision of the Trade Audits Department of COMEX ("Trad= e=20 Audits"). The H/C form must be submitted not later than 3:30 PM. 5. EX-PIT POSITION TRANSFER REQUEST FORM ("Ex-Pit") - Ex Pit forms may be= =20 used only to transfer previously cleared contracts between CMs. Problem=20 trades (those which have not cleared prior to expiration day), must be=20 corrected on the on-line trade entry system under the direct supervision of= =20 Trade Audits. The Ex-Pit form must be submitted not later than 3:30 PM. ***** A) At approximately 4:15 PM, two PRELIMINARY reports of the expiration=20 process will be available for distribution at the Nymex Clearing Department= : 1. OPTION EXPIRATION REPORT AND CONFIRMATION - The purpose of this report i= s=20 to project the CM=01,s present position going into the expiration based upo= n the=20 transactions which have already been submitted to Clearing. CMs should=20 review and modify their adjusted gross positions as of close-of-business on= =20 the business day prior to expiration. Further adjustments may be submitted= =20 not later than 5:00 PM. The projected ending gross positions will reflect= =20 transactions accepted or rejected for clearance on expiration night,=20 inclusive of Ex-Pit, H/C and OPRR transactions which have been submitted to= =20 Clearing prior to 3:30 PM, and trade information submitted to COMEX prior t= o=20 3:45 PM. Normally, this report will also reflect manually submitted Exerci= se=20 and Abandonment instructions, the projected number of exercises and maximum= =20 potential assignments for each strike price, the type of exercise (manual o= r=20 automatic), whether the strike is In, At or Out of the money, and the=20 exercise val! ue! associated therewith based on settlement prices established by COMEX on th= e=20 day of expiration. 2. TRANSACTION LISTING - This listing will include in detail all expiring= =20 option trades submitted to COMEX prior to 3:45 PM on expiration day, and al= l=20 H/C, ExPit, OPRR and E/A transactions submitted to Clearing Prior to 3:30 P= M. Please note: Trade information reflected on the option expiration report an= d=20 transaction listing are trades submitted only. To inquire whether trades ha= ve=20 matched, each CM must review the trade reports provided by COMEX=01,s On-Li= ne=20 Trade Entry ("OLTE") system. B) At approximately 5:30 PM, FINAL reports of the expiration process,=20 including all submissions to Clearing and trade information submitted to=20 COMEX made by 5:00 PM, will be available for distribution at the Nymex=20 Clearing Department. C) At 5:45 PM, Preliminary In The Money Abandonment and Out Of The Money=20 Exercise information will be announced on Fast Facts. D) At Approximately 7:30 PM, a Final Notice of Exercise/Assignments will be= =20 available in each CM=01,s lockbox located at the Nymex Clearing Department.= =20 Each CM, which has exercised or been assigned one or more options will=20 receive a separate statement showing exercises and/or assignments for each= =20 option series. Please check this statement carefully. Although long optio= ns=20 positions in-the-money by one tick or more will be automatically exercised,= =20 not all short option positions will be assigned if there are any options=20 manually abandoned at such strike prices. Please note that there also may = be=20 some at or out-of-the money options being exercised. E) At approximately 9:00 PM, the final set of clearing sheets will be=20 available in each CM=01,s lockbox located at the Nymex Clearing Department. It is strongly recommended that each CM have a representative(s) that is=20 properly trained to handle the option expiration process available beginnin= g=20 at 4:15 PM and who will receive the CM=3Ds reports at the specific times. = It=20 is solely the responsibility of the CM to review these reports and to notif= y=20 the Clearing staff immediately of any discrepancies. To obtain the exact time of the availability for each report, clearing=20 members should call (212) 513-7405, access code 702. The announcement time= =20 will occur _ hour prior to availability. Attached please find a Clearing Member Procedure Summary for ease of=20 reference. Please contact John Ramos at (212) 299-2142 (Members 001-500) o= r=20 Mel Garcia at (212) 299-2144 (members 501-999) if you have any questions. OPTION EXPIRATION PROCESSING CLEARING MEMBER PROCEDURE SUMMARY Time: 3:30 PM Activity: Expits, H/C transfers, Option Position Reduction and=20 Exercise/Abandon notices Event: Submission to Clearing cutoff time. Notes: Final cutoff for Expits and H/C tranfers Time: 3:45 PM Activity: Call Fast Facts to obtain availability time of Preliminary Option= =20 Expiration Reports. Event: Fast Facts notice of Availability Time: 4:15 PM Activity: Preliminary option expiration reports available to clearing membe= rs=20 at NYMEX Clearing Department Time: 5:00 PM Activity: Options Position Reduction, Exercise/Abandon notices and Gross=20 Position Adjustments Event: Submission to Clearing Cutoff Time Notes: Final cutoff for Option Position Reduction, Exercise/Abandon notices= =20 and Gross Position Adjustments Time: 5:05 PM Activity: Call Fast Facts to obtain availability time of Final Preliminary= =20 Option expiration Reports Event: Fast Facts notice of Availability Time: 5:30 PM Activity: Final Preliminary option expiration reports available to clearing= =20 members at NYMEX Clearing Department. Time: 5:45 PM Activity: Call Fast Facts to obtain Preliminary In the Money Abandonment an= d=20 Out of the Money Exercise Information Event Fast Facts notice of information Notes: New Event Time: 6:00 PM Activity: Corrections to previously Submitted Adjustments or Notices Event: Correction period cutoff time (30 minutes after final preliminary=20 report is distributed) Notes: Final cutoff for corrections Time: 7:00 PM Activity: Call Fast Facts to obtain availability of final expiring option= =20 position and Exercise/Assignment report Event: Fast Facts notice of Availability Time: 7:30 PM Activity: Final expirating options position and Exercise/Assignment report= =20 available in clearing member's lockbox at NYMEX Clearing Department Time: 8:30 PM Activity: Call Fast Facts to obtain availability of final clearing reports. Event: Fast Facts notice of Availability Time: 9:00 PM Activity: Final clearing reports available in clearing member's lockbox at= =20 NYMEX Clearing Department. Please contact John Ramos at (212) 299-2142 (Members 001-500) or Mel Garcia= =20 at (212) 299-2144 (members 501-999) if you have any questions. __________________________________________________ Please click on the link below to indicate you have received this email. "http://208.206.41.61/email/email_log.cfm?useremail=3Dtana.jones@enron.com&= refdo c=3D(00-408)" Note: If you click on the above line and nothing happens, please copy the text between the quotes, open your internet browser, paste it into the web site address and press Return.
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