August 4, 2005

Via E-Mail

205 6S -5 BA 8: 43
Office of the Secretariat
Commodity Futures Trading Commission OFC. OF 7 CRETARIAT
Three Lafayette Centre

1155 21st Street, N.W.
Washington, D.C. 20581

Re: _—_ Rule Certification. NYMEX Submission 05.136: Notification of Amendments
to NYMEX Rules 4.01, Customer Margins, and 4.03, Unsecured Loans.

Dear Ms. Jean Webb:

The New York Mercantile Exchange ("NYMEX" or the "Exchange") is notifying the Commodity
Futures Trading Commission (“CFTC” or “Commission”) of amendments to NYMEX Rules 4.01,
Customer Margins, and 4.03, Unsecured Loans. The amendments will become effective Monday,
August 8, 2005.

Rule 4.01 was amended to conform minor differences regarding the requirements, across both
NYMEX and COMEX Divisions, for customers to post with their Clearing Members similar instruments
when meeting margin requirements. General housekeeping amendments were made as well.

The amendments to Rule 4.03 eliminate the ability of Clearing Members to make unsecured
loans to their customers for the purpose of meeting margin requirements on COMEX products. Instead,
the rule requires that such loans must be secured as is currently allowed for NYMEX products.
Customers will be able to meet margin requirements on either Division by posting with their Clearing
Members the following: U.S. Dollars; Foreign Currency (freely convertible to Dollars); U.S. Treasuries
(max. 10 year maturity with value at 95% of face); Equity Securities (NYSE, AMEX, NASDAQ; min.
$10 value/share); Letters of Credit; and Warehouse Receipts (Exchange product valued at 75%)

Pursuant to Section Sc(c) of the Commodity Exchange Act (“Act”) and CFTC Rule 40.6, the
Exchange hereby certifies that the amendments comply with the Act, including regulations under the Act.

Should you have any questions concerning the above, please contact Arthur McCoy, Vice
President, Financial Surveillance and Risk Management, at (212) 299-2928.

Very truly yours,

Nancy M. Minett
Vice President
Compliance Department

ce: Thomas LaSala
Brian Regan


Bold italic underlining indicates additions; Bold strikethreugh indicates deletions.)
Rule 4.01, Customer's Margins
[Paragraphs (A) through (D) remain unchanged.]

(E)(1) A Member Firm may accept deposits from its customers in one or more of the following forms as
margin to cover open NYMEX and COMEX Division positions:

(a) United States Currency; or any currency freely convertible to United States currency; provided that if
foreign currency is deposited, its value shall be calculated so that at the current rate of exchange the U.S.
dollar equivalent of the foreign currency satisfies the customer's margin obligation.

(b) Securities issued by the Department of the Treasury of the United States maturing within ten (10)
years of the date of the deposit and guaranteed as to principal and interest by the United States

Government. Such securities shall be valued at ninety five percent (95%) of par value.

(c) Fully paid equity securities which are listed for trading on the New York Stock Exchange, Inc., er

the American Stock Exchange, Inc., whieh-are-tradedin-th th 1 ket-app’ d-fo1
‘gin bythe Board-of G. £ the Federal R Beard or Nasdaq, provided that such

securities; (i) are free from liens and encumbrances; (ii) represent no more than 5% of the issued and
outstanding shares of any one issuer; and (iii) have a market value of at least $10 per share. Such equity
securities shall be_ are valued at 75% of the market value. thereef Clearing members may not accept as
margin from their customers equity securities issued by said customer or those of the customer’s
affiliates.

(d) #} Letters of credit in favor of a clearing member carrying an account, or in the case of any letter or
credit to be used on a pass-through basis with the Clearing House, a letter of credit in favor of the
Exchange. All letters of credit shall be issued in such form as may be prescribed by the Exchange and by
a depository which has been approved by the Exchange for issuance and confirmation of letters of credit
drawn in favor of the Clearing Members or in favor of the Exchange, as applicable. Clearing Members
may not accept from their customers letters of credit issued by said customer, the customer’s affiliates,

the Clearing Member, or the Clearing Member’s affiliates.

(e) d Deliverable warehouse receipts for commodities traded on the Exchange provided that such receipts
will be valued as margin at no more than 75% of the value of the commodity.

(Fhe net tiquidati re-# t 4 nt the initial i pirements-for-the

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(3) (2) Calls issued by Member Firms for additional margin from customers may only be met by: deposits
conforming to the © requirements of Rule 4, O10) (2) for open NN MEEN Division positions; or

esitions-on-cither divi of the or favorable market movements which, ‘when taken
into consideration and combined with any other monies available, enable the customer's margin to equal
or exceed the then prevailing initial margin requirement.

[Paragraphs (F) through (I) remain unchanged.]

Rule 4.03, Unsecured Loans

Clearing Members shall not be permitted to make loans to any customers for the purpose of financing
margins en- NYMEX _Divisien-contraets unless such loans are secured, as such term is defined in
Section 1.17 of the regulations of the Commodity Futures Trading Commission.