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Enron Mail |
Notice No. 00-390
November 13, 2000 TO: All COMEX Division Members FROM: M. Dawn Lowe, Vice President and Corporate Secretary RE: Proposed Amendments to COMEX Division Rule 4.08, "Not Held Orders" ____________________________________________________________ Attached please find amendments to COMEX Division Rule 4.08, "Not Held=20 Orders." As part of its Report on Gold Options Trading on September 28, 1999 (the= =20 "Report"), the Commodity Futures Trading Commission ("Commission") reviewed= =20 the current COMEX Division rules regarding not held orders. As a result, t= he=20 Commission recommended the Exchange revise its rules to clarify its format= =20 and more clearly define its characteristics using the corresponding NYMEX= =20 rules as a model. NYMEX Rule 6.15(H) provides that if a trading member=20 obtains agreement from the customer prior to accepting an order that it is= =20 being accepted on a not held basis, then the trading member is not=20 responsible for failure to execute the order, absent fraud or willful=20 misconduct. NYMEX Rule 6.16 covers orders other than not held orders, whic= h=20 applies a due diligence standard to executable orders and a negligence=20 standard to contingent orders. The attached COMEX rule incorporates the=20 Commission=01,s recommendations, based upon the NYMEX rules described herei= n. The COMEX Governors Committee, the Compliance Review Committee, the=20 Executive Committee and the Board of Directors have already reviewed and=20 approved the proposed amendment. The proposed amendments to COMEX Rule 4.08 affects a Special Matter under t= he=20 terms of the COMEX By-Laws. Accordingly, COMEX Division Members have ten= =20 (10) days to submit a petition signed by owners of at least 155 COMEX=20 Division Memberships requesting a vote of the COMEX Division Members to=20 disapprove the amendments, pursuant to the procedures set forth under COMEX= =20 By-Law 205(D). If a petition is not received, or if the amendment is not= =20 disapproved, it will be submitted to the Commodity Futures Trading Commissi= on=20 (CFTC). If you have any questions, please contact M. Dawn Lowe at (212) 299-2370, o= r=20 Thomas LaSala at (212) 299-2897. ___________________________________________________________ Brackets [ ] denote deletions, ALL CAPS denote additions: V4.08 NOT HELD ORDERS. [A member may accept and attempt to execute any order in a form not=20 specified in Rule 4.07 ("Forms of Orders"), but a member attempting to=20 execute such order in a ring shall not be held responsible for his failure = to=20 execute such order. No member or member firm may assert a claim against an= y=20 floor member for his failure to execute such order.] (a) NOT HELD ORDERS FOR EXECUTION ON THE TRADING FLOOR: (1) A TRADING MEMBER WHO OBTAINS THE AGREEMENT OF HIS CUSTOMER OR HIS=20 CUSTOMER=01,S AGENT PRIOR TO ACCEPTANCE OF ANY ORDER FROM SUCH CUSTOMER, TH= AT=20 SUCH ORDER WILL BE ACCEPTED ONLY ON A "NOT HELD" BASIS, SHALL NOT BE=20 RESPONSIBLE TO THE CUSTOMER FOR THE EXECUTION OR FAILURE TO EXECUTE SUCH=20 ORDER. HOWEVER, A CLAIM MAY BE ASSERTED AGAINST THE TRADING MEMBER BY THE= =20 CUSTOMER AND/OR THE COMPLIANCE DEPARTMENT, IF THE EXECUTION OR THE FAILURE= =20 THEREOF, WAS DONE FRAUDULENTLY OR BY WILLFUL MISCONDUCT. (2) ANY ORDER ACCEPTED ON A "NOT HELD" BASIS MUST BE SO DESIGNATED ON THE= =20 CUSTOMER ORDER TICKET AT THE TIME OF RECEIPT OF SUCH ORDER. (b) NOT HELD ORDERS FOR EXECUTION ON NYMEX ACCESSc. AN ELECTRONIC TRADER O= R=20 A NYMEX ACCESSc OPERATOR MAY ACCEPT ORDERS ON A "NOT HELD" BASIS PROVIDED= =20 THAT THEY HAVE RECEIVED PRIOR WRITTEN PERMISSION FROM THE ULTIMATE CUSTOMER= . © NOTHING IN THIS RULE SHALL BE CONSTRUED AS A LIMITATION OF THE EXCHANGE= =01,S=20 DISCIPLINARY AUTHORITY. __________________________________________________ Please click on the link below to indicate you have received this email. "http://208.206.41.61/email/email_log.cfm?useremail=3Dsara.shackleton@enron= .com& refdoc=3D(00-390)" 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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