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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_June2001\Notes Folders\All documents X-Origin: JONES-T X-FileName: tjones.nsf Notice to Members No. 01-190 June 7, 2001 REMINDER =01) THIRD NOTICE To: All NYMEX Division Members All COMEX Division Members From: Neal Wolkoff, Executive Vice President Re: Changes to Audit Trail Summary Fine Structure-NYMEX & COMEX Divisions Modification of =01&Clear-out Period=018 The Board of Directors has approved modifications to the fine structure for= =20 one-minute trade time submission for both NYMEX and COMEX Divisions. =20 Presently members falling below the 80% timely submission standard are issu= ed=20 escalating warning letters and fines unless and until they clear out their= =20 record by being in compliance for six consecutive months. After six months= ,=20 the member returns to a =01&warning letter=018 level. Effective immediatel= y, this=20 =01&clear-out period=018 is reduced from six months to four months. One-mi= nute=20 trade timing statistics for the month ending April 30, 2001 will reflect th= is=20 modification. Implementation of One-Minute Trade-Time Classes The Board also accepted the recommendation of the Compliance Review Committ= ee=20 and Floor Committee to adopt a training program for members facing one-minu= te=20 trade time fines on the NYMEX Division. The purpose of the program is to= =20 improve Exchange trade submission timing through member education by=20 identifying individual issues, tailoring individual solutions and statistic= al=20 follow-up. Training will be conducted on Thursday, June 14, Tuesday, July= =20 10, and Wednesday, August 15, 2001 by a team comprised of Committee Members= =20 and Compliance Staff with the assistance of the Training and Education=20 Committee. You may sign up for these classes at the Corrections Windows on= =20 the 3rd and 5th floors, or by contacting Lois S. Shapiro, Associate=20 Compliance Counsel, at (212) 299-2853. The June 14, 2001 class will be hel= d=20 in the Seminar Room on the 10th floor at 3:45 p.m. Plan to stay until 6:00= =20 p.m. Credit will not be given to anyone who does not attend the entire cla= ss. As incentive, any member attending any one class will be allowed to =01&do = over=018=20 up to two subsequent months in which their trade time rates are between 70%= =20 and 79%. The member will still have to complete four violation-free months= =20 before his record is =01&cleared out=018 but he may take up to six months t= o do=20 so. Members may take one class per year. Audit Trail Classes ? Purpose: to improve pit card submission statistics Exchange-wide by=20 reducing the number of individual members falling below the 80% standard fo= r=20 timely pit card submission and to facilitate their return to a =01&warning= =20 letter=018 level. ? Members who have received a warning letter or a fine for pit card=20 violations may: _ Attend an audit trail class, to be offered on June 14, July10, and August= =20 15, 2001, with future dates to be determined by the Floor=20 Committee/Compliance Review Committee. The class will be an intensive=20 discussion of pit card problems and pitfalls. Materials will focus on how= =20 the audit trail works and successful strategies for achieving a passing=20 percentage. Members will be required to analyze their own trading style in= =20 light of the material presented and pinpoint areas in which they need to=20 improve. Members will also be required to outline a plan for raising their= =20 pit card performance rates. Each plan will be discussed with the group and= =20 members will receive feedback from Floor Committee and Compliance Review=20 Committee Members, and Compliance and Floor Department Staff. Members=20 attending classes are strongly encouraged to bring their clerks with them! _ Upon completion of the class, members will be allowed to =01&do over=018 = up to=20 two subse-quent months in which their timely submission rates fall between= =20 70% and 79%. No fine or warning letter will be issued for a =01&do over=01= 8 month,=20 but the month will not count as a passing month. A member who falls below= =20 70% will receive a fine or warning letter. _ The benefit to the member will be that the month that would have counted = as=20 a failing month will not count at all, as long as the member achieved at=20 least a 70% rate. Members still need four problem-free months to return to= a=20 warning letter stage. A member who has been problem-free for 3 months woul= d=20 benefit by =01&doing over=018 a fourth (and possibly a fifth) failing month= , thus=20 having the opportunity to return to the warning letter stage despite=20 intervening failing months. A member who falls below 70% before achieving= =20 four problem-free months will receive a fine or a warning letter, as=20 appropriate. The member can still use a second =01&do over=018 month as lo= ng as he=20 meets all the above criteria. _ Staff will follow up with members attending the classes. Members will=20 receive a breakdown of their most recent audit trail fine. They will also = be=20 invited to discuss their percentages with staff on an individual basis. =20 Further, staff will supply daily or weekly statistics to any member by e-ma= il=20 or telephone upon request. _ Members are eligible for only one class per year. A member must take a= =20 class to take advantage of the benefits listed herein. Classes will be=20 offered on June 14, July 10 and August 15, 2001, and the program will apply= =20 to the next full month of audit trail statistics. The Compliance Review=20 Committee and the Floor Committee will evaluate the results of this program= =20 before deciding whether to extend this program into 2002. Incorporation of Spreads into One-Minute Trade Time =01&Pit Card=018 Statistics for NYMEX Division Present one-minute trade time =01&pit card=018 statistics do not include sp= read=20 times. During the most recent NYMEX Rule Enforcement Review--the CFTC audi= t=20 of the Exchange=01,s Compliance programs and procedures--the CFTC recommend= ed=20 that the NYMEX Division incorporate spread trades into the one-minute time= =20 statistics. The CFTC has made this recommendation in the past and the=20 Exchange has committed to respond to it. The COMEX Division one-minute trad= e=20 time statistics already include spreads. NYMEX Division Members should note that intra-commodity spread trades will = be=20 incorporated into pit card one-minute trade time accuracy rates after a=20 =01&phase in=018 process of approximately 90 days. In order to avoid subst= andard=20 percentages once spreads are incorporated, members must make sure that thei= r=20 spread prints are price reported in order to ensure that the Price Change= =20 Register for spreads is accurate. If a spread print is not reported, you= =20 will not be credited with timely submission of pit cards, even if you throw= =20 the trade into the pit in a timely manner. Pit card statistics for outright trades are presently posted on the NYMEX= =20 floor on a weekly basis. Compliance Staff will continue to post statistics= =20 for outright trades and will additionally post the statistics for spread=20 trades. These spread trade statistics are for information only so that you= =20 can assess your pit card submission rate in advance of incorporation of=20 spreads in the one-minute trade time submission percentages. For informati= on=20 purposes, the seller of the spread is considered to be the party who sells= =20 the premium month. In the case where the spread trades flat, the seller is= =20 the party who sells the nearby month. If you have any questions about this information, please call Nancy Minett,= =20 Compliance Counsel, at (212) 299-2940, or Thomas LaSala, Vice President=20 Compliance, at (212) 299-2897. __________________________________________________ Please click on the link below to indicate you have received this email. 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