Message-ID: <23067500.1075861059331.JavaMail.evans@thyme> Date: Thu, 21 Feb 2002 11:44:09 -0800 (PST) From: marketing@nymex.com To: marketing@nymex.com Subject: (02-61) Accurate Reporting of Open Interest by Clearing Members Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Exchange Information @ENRON X-To: Exchange Information X-cc: X-bcc: X-Folder: \Sara_Shackleton_Mar2002\Shackleton, Sara\Inbox X-Origin: Shackleton-S X-FileName: sshackl (Non-Privileged).pst Notice No. 02-61 February 21, 2002 TO: ALL NYMEX DIVISION MEMBERS ALL NYMEX DIVISION MEMBER FIRMS ALL NYMEX DIVISION CLEARING MEMBERS FROM: J. ROBERT COLLINS, JR., PRESIDENT RE: Accurate Reporting of Open Interest by Clearing Members Exchange rules require clearing members to carry all customer accounts accurately at the clearinghouse. The previous three monthly contract expirations for NYMEX energy futures has shown open interest on the business day following the (EFP only session) for crude oil and the products, and discrepancies in open interest as compared to delivery notices for natural gas and propane. The Exchange attributes this overstating of open interest to incorrect reporting of gross positions by clearing members and thus a failure to bring down these positions at the clearinghouse in a timely manner, i.e., by the 10:00 a.m. Exchange cutoff time for open interest calculation. As a reminder, clearing members are required to process, on a daily basis, correct open interest figures. NYMEX Rule 9.04(P) - Clearing Procedure, states, in pertinent part, that "(1) concurrent long and short positions in the current delivery month may not be offset by netting, transfer, expit, adjustment or any other bookkeeping procedures, but each side must be offset by normal floor transactions in accordance with Exchange Rules. Provided however, that a clearing member will be exempt from this requirement if: (i) one side of the concurrent position is established the business day prior to the date... [of] the offset [adjustment]...with the Clearing House... (2) For the purposes of this Rule 9.04(P), the current delivery month for energy futures contracts commences on the open of trading on the third business day prior to the respective futures contract, including the termination date. " Therefore, for concurrent positions established within this three-day period, position adjustments must be processed via the C-21 terminals no later than 10:00 a.m. on the following business day, (including the business day following contract termination), in order to correctly reflect open interest in the expiring contract month. If you have any questions concerning this matter, please contact Nick Galati at (212) 299-2920, Nick Falcone at (212) 299-2919 or Bonnie Yurga at (212) 299-2879.