UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

_____________________________________________ 

Treatment of Funds Held in Connection with Clearing 

by The New York Mercantile Exchange 

of Contracts Traded on NYMEX Europe 

_____________________________________________ 

ORDER

The New York Mercantile Exchange, Inc. (“NYMEX”), a registered derivatives clearing 

organization (“DCO”), has submitted a request that the Commodity Futures Trading Commission 

(“Commission”) issue an Order permitting NYMEX and registered futures commission 

merchants (“FCMs”) to hold customer funds in accounts segregated pursuant to Section 4d of the 

Commodity Exchange Act (“Act”) and Commission Regulation 1.20, in connection with 

NYMEX’s clearing of futures and options on futures contracts traded on a non-U.S. affiliate, 

NYMEX Europe Limited (“NYMEX Europe”), located in London, England. 

The Commission has reviewed the request and the complete record in this matter 

(“Submission”), and finds that NYMEX has demonstrated that it can continue to comply with the 

requirements under the Act and the Commission’s regulations thereunder applicable to it. 

Moreover, NYMEX Europe is regulated by the U.K. Financial Services Authority, which is a 

signatory to several information sharing arrangements with the Commission and is located in a 

jurisdiction that has been deemed, pursuant to Commission Regulation 30.10, to have a 

regulatory regime that is comparable to the U.S. regulatory regime for the futures industry. 

Therefore, 
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IT IS ORDERED, pursuant to Section 4d(a)(2) of the Act, 7 U.S.C. § 6d(a)(2), that, 

subject to the terms and conditions below, NYMEX and registered FCMs that are acting 

pursuant to this Order may hold money, securities, and other property (collectively, “customer 

funds”) used to margin, guarantee, or secure commodity futures and commodity options 

contracts traded on NYMEX Europe with other customer funds used to margin, guarantee, or 

secure trades or positions in commodity futures or commodity options contracts executed on a 

Contract Market designated pursuant to Section 5 of the Act (“DCM”), or a Derivatives 

Transaction Execution Facility (“DTEF”) registered pursuant to Section 5a of the Act, in a 

segregated account or accounts maintained in accordance with Section 4d of the Act (including 

any orders issued pursuant to Section 4d(a)(2) of the Act) and the regulations thereunder, and all 

such customer funds shall be accounted for and treated and dealt with as belonging to the 

customers of the participating FCM consistently with Section 4d of the Act and the regulations 

thereunder. 

IT IS FURTHER ORDERED, that: 

(1) This Order shall apply only to futures and options on futures contracts on energy 

or metals products traded on NYMEX Europe. 

(2) Such contracts shall not be fungible with any contract offered by any DCM. 

(3) All customer funds margining, guaranteeing, or securing such commodity futures 

and commodity options contracts traded on NYMEX Europe shall be held in the U.S. by 

NYMEX or FCMs acting pursuant to this Order. 

(4) Before accepting any new product traded on NYMEX Europe for clearing 

pursuant to this Order, NYMEX must comply with the requirements of Section 5c(c) of the Act 

and Commission Regulation 40.2. 
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(5) NYMEX shall at all times fulfill all representations made in its Submission, 

including all attachments and supporting materials thereto. 

(6) Large Trader (Position) Reporting 

(a) NYMEX shall provide to the Commission the information described in 

Part 16 of the Commission’s regulations in the manner described in Parts 15 and 16 of the 

Commission’s regulations with respect to all NYMEX Europe transactions; 

(b) Each FCM acting pursuant to this Order shall provide to the Commission 

the information described in Part 17 of the Commission’s regulations in the manner 

described in Parts 15 and 17 of the Commission’s regulations with respect to all NYMEX 

Europe transactions in which it participates; and 

(c) If the Commission promulgates a regulation under the Act addressing 

obligations under Parts 15, 16, and/or 17 of the Commission’s regulations, then such 

regulation will supersede the obligations referred to in ¶¶ 6(a)-(b) above. 

(7) NYMEX’s retail customer protection fund shall be and shall remain applicable to 

customers of NYMEX Europe. See NYMEX Clearing Rules, Chapter 9 (XXV - Resolution of 

Board of Directors to establish and maintain a permanent Retail Customer Protection Mechanism 

(Feb. 10, 2004)). 

(8) NYMEX shall promptly inform the Commission of any material change in 

applicable U.K. law or regulations relevant to its operation as a DCO clearing for NYMEX 

Europe including, but not limited to, any material change to U.K. requirements for Recognised 

Investment Exchanges (“RIEs”), the status of contracts between NYMEX and its members 

(arising upon the substitution of NYMEX as clearinghouse) as Market Contracts for the purposes 

of Part VII of the U.K. Companies Act of 1989, and any other change in such law or regulations 

affecting the conclusions contained in the Submission. NYMEX also shall promptly inform the 
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Commission of any change in NYMEX Europe’s status as an RIE and any change in NYMEX 

Europe’s rules that affects its cooperation with the Commission or with NYMEX. 

(9) NYMEX Europe shall maintain a binding agreement appointing an agent in the 

U.S. for purposes of communications, including acceptance on behalf of NYMEX Europe of any 

summons, complaints, orders, subpoenas, requests for information, notice, or any other written 

document or correspondence issued by or on behalf of the Commission, the U.S. Department of 

Justice, or any U.S. clearing member, and NYMEX Europe shall promptly inform the 

Commission of any change in such agent or agreement with such agent. 

This Order is issued pursuant to Section 4d of the Act based upon the representations 

made and supporting material provided to the Commission by NYMEX in its Submission. Any 

material changes or omissions in the facts or circumstances pursuant to which this Order is 

granted might require the Commission to reconsider its finding that the relief set forth herein is 

appropriate. Further, in its discretion, the Commission may condition, modify, suspend, 

terminate, or otherwise restrict the exemptive relief granted in this Order, as appropriate, on its 

own motion. 

Issued in Washington, D.C., this __6th___ day of September, 2005. 

By the Commission 

/s/ 

Jean A. Webb 

Secretary of the Commission