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Date: Tue, 14 Nov 2000 00:47:00 -0800 (PST)
From: exchangeinfo@nymex.com
To: sara.shackleton@enron.com
Subject: (00-390) Proposed Amendments to COMEX Division Rule 4.08
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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=
.

(c) NOTHING IN THIS RULE SHALL BE CONSTRUED AS A LIMITATION OF THE EXCHANGE=
=01,S=20
DISCIPLINARY AUTHORITY.


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