For SO2
783. 09 Delivery Procedures
(A) RESPONSIBLITIES OF CLEARING MEMBERS HAVING OPEN LONG
POSITIONS

(1) NOTICE OF INTENTION TO ACCEPT

By 11:30 a.m. on the second business day prior to the last business day of an expiring
delivery month, a Buyer having an open position shall file with the Exchange a
properly completed and signed Notice of Intention to Accept. The Notice of Intention
to Accept shall be in the form prescribed by the Exchange and shall include: the
Name of the Buyer’s Customer, Number of contracts to be accepted, and any
additional information as may be required by the Exchange;

(3) INFORMATION PROVIDED BY BUYER TO SELLER

By 4:00 p.m. on Notice Day, the Buyer shall provide the Seller with the following
information: ATS Account Number; Vintage Year, Name, Phone Number and e-mail
address of the Account Representative (AAR) or the authorized alternate for that
ATS account, and

IV. To distinguish between Ozone Season and Annual NOX emissions allowances.
783. 01 Scope
The provisions of these rules shall apply to all NOX ozone season emissions allowances

bought or sold for future delivery on the Exchange with the Delivery at the U.S
Environmental Protection Agency's (EPA) Allowance Tracking System.


For SO2

782. 08 Product Placement

For purposes of Rule 9.19, the Seller and Buyer shall fulfill its contractual obligation on a
maturing contract unless, only if, by 12:00-pm noon on the day preceding the last trading
day in the applicable delivery month, such Seller and Buyer have received ATS account
certification from his customer, in the form prescribed by the Exchange stating that:

fe}Hf-a-beyer; the Buyer’s customer has an account with NATS, with access to
CAMD Business System.

2
7 7

Business-System.

The receipt of such certification shall not relieve the Seller or Buyer, or their respective
Customers of any obligations under any Rule other than Rule 9.19.

I. To clarify which delivery information is exchanged directly between customers’
clearing members

For NOX
783. 09 Delivery Procedures
(A) RESPONSIBLITIES OF CLEARING MEMBERS HAVING OPEN LONG
POSITIONS
(1) NOTICE OF INTENTION TO ACCEPT

By 11:30 a.m. on the second business day prior to the last business day of an expiring
delivery month, a Buyer having an open position shall file with the Exchange a
properly completed and signed Notice of Intention to Accept. The Notice of Intention
to Accept shall be in the form prescribed by the Exchange and shall include: the
Name of the Buyer’s Customer, Number of contracts to be accepted, and any
additional information as may be required by the Exchange;

(2) INFORMATION PROVIDED BY BUYER TO SELLER

By 4:00 p.m. on Notice Day, the Buyer shall provide the Seller with the following
information: NATS Account Number; Vintage Year, Name, Phone Number and e-
mail address of the Account Representative (AAR) or the authorized alternate for that
NATS account, and



September 8, 2005

1

BY EMAIL AND FACSIMILE

Office of the Secretariat 2 =|

Commodity Futures Trading Commission eo

Three Lafayette Centre Bo Sg

1155 21st Street, N.W. tes

Washington, D.C. 20581 & ~
> +

NYMEX Submission 05.158

Clarifying Amendments to NYMEX SO2 and NOX Emissions Allowaiice
Futures Contracts

Re:

Dear Ms. Jean Webb:
The New York Mercantile Exchange, Inc. ("NYMEX" or the "Exchange") is
notifying the Commodity Futures Trading Commission (“CFTC” or “Commission”) of

the following contract amendments.

The Board of Directors voted in open session to approve the following
amendments to the existing S02 and NOX futures contracts to enhance the clarity of
contract language. These amendments do not make substantive changes. They are
proposed to go in effect immediately upon notification to the Membership.

For both contracts, they include:

Removal of reference to “one ton” of emissions in contract definitions of

L
allowance to avoid confusion with quantity defined under Contract Unit rule

IL. Editing of Product Placement Rule for clarity.

Ill. Editing of Delivery Procedures Rule to clarify that some delivery information
is exchanged directly between the customer’s clearing members and not
through the Notices of Intention through the Exchange’s Clearing Department.

For the NOX contract only:
IV. The existing contract was designed for Ozone Season NOX emissions

allowances which currently trade. Annual NOX emissions allowances will
begin trading in 2007 and will not be fungible with the Ozone Season
allowances. Therefore, language is added to the contract to specify that only

Ozone Season allowances are deliverable.



V.
These specific amendments are attached.

These amendments will be effective the second business day after being sent to
the Commission. Pursuant to Section Sc(c) of the Commodity Exchange Act (“Act”) and
CFTC Rule 40.6, the Exchange hereby certifies that this clarification complies with the
Act, including regulations under the Act.

Should you have any questions concerning the above, please contact Jay Gottlieb,
Director, Research, at (212) 299-2607; or the undersigned at (212) 299-2390.

Very truly yours,

Robert A. Levin
Senior Vice President, Research


Attached Rule Amendments

Additions underlined, deletions struck-threugh
I. To eliminate “one ton” in definitions
For NOX

783.01A. Definitions

(B) NOX Allowance refers to a tradable permit to emit one-ten-ef NOX as specified
further by EPA.

For So2

782.01A. Definitions

(B) SO2 Allowance refers to a tradable permit to emit ene-ton of SO2 as specified further
by EPA.

II. To simplify and clarify Product Placement Rule

For NOX

783. 08 Product Placement

For purposes of Rule 9.19, the Seller and Buyer shall fulfill its contractual obligation on a
maturing contract unless; only if, by 12:00-pm noon on the day preceding the last trading
day in the applicable delivery month, such Seller and Buyer have received NATS account
certification from his customer, in the form prescribed by the Exchange stating that:

fa}tf-a-buyer, the Buyer’s customer has an account with NATS, with access to
CAMD Business System.

The receipt of such certification shall not relieve the Seller or Buyer, or their respective
Customers of any obligations under any Rule other than Rule 9.19.