From: exchangeinfo@nymex.com
To: sara.shackleton@enron.com
Date: 2000-10-12 16:39:00+00:00
Subject: (00353) Trading Card Recordation Procedures and TMS on COMEX

Notice No. 00-353
October 11, 2000



TO:
COMEX Division Floor Community

FROM: Michael Campanelli, Vice President, Floor Operations, COMEX Division

RE:
New Trading Card Recordation Procedures Related to the Implementation of the 
Trade Management System (TMS) on COMEX

For trading card images mentioned as examples in the text below, please refer 
to:
http://www.nymex.com/refernce/notices/ntm_353.htm

Introduction
As you are aware, in the near future, the Exchange plans to merge the two 
divisions onto one trade processing platform.  The COMEX Division will 
replace its On-Line Trade Entry (OLTE) system with the NYMEX Trade Management 
System (TMS).

While final details are being determined; certain procedural aspects of the 
transition process can begin. Therefore, effective immediately, the following 
should be considered:



Single Sided Concept
The source document for TMS will be the trading card.  Floor staff will 
collect the original white copies and forward them to the Exchange Trade Data 
Entry area where operators will key the sell side trades.  The trading cards 
will no longer be forwarded to the Primary Clearing Members (PCM,s); instead 
they will be retained by the Exchange (THIS WILL BEGIN WITH TMS 
IMPLEMENTATION ON COMEX).  Each sell side will generate a buy side.  The 
broker,s staff will be responsible for Account Assignment, Trade Checkout and 
Corrections (in addition, for buy side trades it will be necessary to add the 
execution time).



Implementation
In accordance with the implementation of TMS, members must begin to use new 
trading card recordation procedures developed to facilitate data input.



Implementation Schedule
The COMEX Division will implement TMS for ALL COMMODITIES in the near future.
WE ASK THAT ALL MEMBERS BEGIN USING THESE RECORDATION PROCEDURES IMMEDIATELY, 
to ensure readiness when TMS implementation takes place.

This will allow members to familiarize themselves with the new recordation 
procedures and enable the Exchange,s Trade Processing staff to review the 
handwriting/recordation techniques of the COMEX Division,s membership prior 
to launch.  During this interim period, if necessary staff will contact 
members regarding their handwriting or lack of adherence to procedures.  In 
addition, staff will begin to familiarize members, clerks with TMS 
functionality.



Spread Processing
TMS will process all the legs of a spread as one transaction.  To accomplish 
this it is essential for the broker to clearly designate seller status on the 
trading card when he/she is the seller of the spread (see recordation 
procedures noted below). This indication will inform data entry personnel to 
enter the entire spread (buy and sell components).  Opposite buy spreads (not 
keyed by the Exchange) that are linked to a seller status will be generated 
by the system.


NOTE: When submitting cards for data entry, the differential must be 
indicated or it will be rejected.  If the differential is noted without 
prices for either leg, the system will assign the appropriate market pricing 
to both legs based on the most recent price reports.  If the differential is 
noted along with the price of one of the legs, the system will assign an 
appropriate price to the other leg.



Recordation Procedures
For the purpose of standardization within the community, the following 
trading card recordation procedures must be used by the brokers:

ALPHA CODES ONLY
*TMS does not recognize numeric broker codes, therefore use only the 
appropriate alpha broker codes for trading card recordation and trade 
processing.

SPREADS (MULTIPLE LEG TRADES)
*Place the value of the spread (differential) in the bottom portion of each 
entry line,s center field.  Circle the spread value. This will inform data 
entry personnel that the trade is a spread (see e.g. 1).

NOTE: Failure to place a circled differential in the spread box will result 
in the entry of the sell leg only as an outright trade.

*Place a slash through the circled differential if you are the buyer of the 
spread.  This will inform data entry personnel to ignore the spread (see e.g. 
2).

*Attach a line to either of the above mentioned indicators when a multiple 
leg spread is involved; for example:  Butterflies; this will convey that all 
the components are part of one entity (see e.g. 3).

CABINET TRADES
*Place "CAB" or "C" in the premium column (see e.g. 4).

CONVERSIONS
*Place the option components on one line.  The futures component price must 
be written on the next line, across the Strike and Premium columns (see e.g. 
5).

MATCHED ORDERS
*Place "MO" in the price column (see e.g. 6).

Trades submitted to the Exchange as MO transactions will initially receive 
the previous day,s settlement prices until the current day,s settlement 
prices are determined and immediately applied.

EXCHANGE FOR PHYSICAL "EFP,S"
*Place "EFP" or "E" in the (SPD) box (bottom portion of each entry lines 
center field) (see e.g. 7).

Crossing of Orders
Place a "Y" in the spread (SPD) box (see e.g. 8 line A), except when crossing 
an EFP, at which time the letters "EFP" must be indicated instead.  (see e.g. 
8 line B).  Additionally, it will not be necessary to denote a "Y" for cross 
trades that require the recordation of a differential.

Note:  The clearing information related to a short code that is data entered 
by the Exchange will only apply to the sell portion of the cross trade.  The 
buy side will require subsequent allocation in a typical manner.

Strip Trades
Place the beginning and ending months in the month columns of successive 
trade lines, with the average price indicated in the price column.  Write 
*STRIP* adjacent to the bracketed trade data to highlight the trade type for 
data entry personnel. (see e.g. 9).

Note: The reccommended recordation procedures for various additional types of 
trades are shown in examples 10 through 20.

Short Codes
When it is possible the account area on the card should be used to indicate 
the appropriate short code.  The Exchange will data enter the sellers short 
code and the corresponding account assignment information will be generated.

Note: When a short code is provided as part of spread sellers sell leg 
information, the allocation will be applied to both the sell leg and the buy 
leg.  If the buy is intended for the same customer but a different clearing 
member, a reallocation will be necessary.



Trading Months
1st occurrence - month symbol
2nd occurrence - circled month symbol
Beyond 2nd occurrence - month symbol plus the last digit of the appropriate 
year.

Trading Card Submission Requirements
Cards must be submitted within 15 minutes of the time of execution of the 
first trade (buy or sell) recorded on the card.  For example a trade executed 
at 10:15 a.m. must be submitted no later than 10:30 a.m. Submission 
performance will be monitored by the Exchange and those brokers deemed 
non-diligent will be subject to disciplinary action.

Note: Cards that include trades executed during either the close or 
post-close, must be submitted within 5 minutes of the bell marking the end of 
each period.

Trading Ring Change Submission Procedure
Cards must be submitted to the ring in which the trades appearing on them 
were executed.  Therefore, in cases when a broker intends to leave one ring 
to trade in another, prior to leaving if he/she has a partially completed 
card it must be submitted in the ring he/she is departing.



Trading in a Multiple Commodity Ring
Trades that are recorded on a trading card that differ from the commodity 
indicated on the heading of the card, should include the commodity name, for 
example: ALUMINUM, written adjacent to the trade details on the same entry 
line (see e.g. 21).

Audit Trail Timing
Every trade whether buy or sell, must have an accurate trade time.  There is 
no change to the audit trail timing methodology.  Just as is current 
practice, the execution times indicated by the broker on his/her trading 
cards will continue to be compared to the Exchange Times and Sales as well as 
the opposite broker,s execution times.

Questions?????? If you have questions regarding the new trading card 
procedures please call Michael Campanelli at (212) 299-2072 or David Sherman 
at (212) 299-2061.

THE EXCHANGE WILL BE CONDUCTING PROCEDURAL DIFFERENCES CLASSES IN THE NEAR 
FUTURE. ATTENDANCE WILL BE MANDATORY FOR BOTH BROKERS AND THEIR CLERKS. A 
SCHEDULE WILL BE FORTHCOMING.


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