6630 Federal Register / Vol. 70, No. 25 / Tuesday, February 8, 2005 / Notices 

1 68 FR 5621 (February 4, 2003).

2 Included generally in Section 1a(12) as ECPs 

are: financial institutions; insurance companies and 

investment companies subject to regulation; 

commodity pools and employee benefit plans 

subject to regulation and asset requirements; other 

entities subject to asset requirements or whose 

obligations are guaranteed by an ECP that meets a 

net worth requirement; governmental entities; 

brokers, dealers, and FCMs subject to regulation 

and organized as other than natural persons or 

proprietorships; brokers, dealers, and FCMs subject 

to regulation and organized as natural persons or 

proprietorships subject to total asset requirements 

or whose obligations are guaranteed by an ECP that 

meets a net worth requirement; floor brokers or 

floor traders subject to regulation in connection 

with transactions that take place on or through the 

facilities of a registered entity or an exempt board 

of trade; individuals subject to total asset 

requirements; an investment adviser or commodity 

trading advisor acting as an investment manager or 

fiduciary for another ECP; and any other person that 

the Commission deems eligible in light of the 

financial or other qualifications of the person.

3For these purposes, OTC transactions are 

transactions that are not executed on a trading 

facility. As defined in Section 1a(33)(A) of the Act, 

the term ‘‘trading facility’’ generally means ‘‘a 

person or group of persons that constitutes, 

maintains, or provides a physical or electronic 

facility or system in which multiple participants 

have the ability to execute or trade agreements, 

contracts, or transactions by accepting bids and 

offers made by other participants that are open to 

multiple participants in the facility or system.’’

4Section 1a(14) defines the term ‘‘exempt 

commodity’’ to mean a commodity that is not an 

excluded commodity or an agricultural commodity. 

Section 1a(13) defines the term ‘‘excluded 

commodity’’ to mean, among other things, an 

interest rate, exchange rate, currency, credit risk or 

measure, debt instrument, measure of inflation, or 

other macroeconomic index or measure. Although 

the term ‘‘agricultural commodity’’ is not defined in 

the Act, Section 1a(4) enumerates a non-exclusive 

list of several agricultural-based commodities and 

products. The broadest types of commodities that 

fall into the exempt category are energy and metals 

products.

5OTC transactions in excluded commodities 

entered into by ECPs pursuant to Section 2(d)(1) are 

generally not subject to any provision of the Act. 

OTC transactions in exempt or excluded 

commodities that are individually negotiated by 

ECPs pursuant to Section 2(g) are also generally not 

subject to any provision of the Act. OTC 

transactions in exempt commodities entered into by 

ECPs pursuant to Section 2(h)(1) are generally not 

subject to any provision of the Act other than 

antimanipulation provisions and anti-fraud 

provisions in certain situations.

6Section 1a(12)(A)(x) of the Act.

unmitigable adverse impact on 

subsistence uses of these two species. 

Proposed Authorization

NMFS proposes to issue an IHA to 

CPA for conducting seismic surveys 

from Milne Point to the eastern channel 

of the Colville River in the U.S. Beaufort 

Sea, provided the previously mentioned 

mitigation, monitoring, and reporting 

requirements are incorporated. NMFS 

has preliminarily determined that the 

proposed activity would result in the 

harassment of small numbers of marine 

mammals; would have no more than a 

negligible impact on the affected marine 

mammal stocks; and would not have an 

unmitigable adverse impact on the 

availability of species or stocks for 

subsistence uses. 

Information Solicited

NMFS requests interested persons to 

submit comments and information 

concerning this request (see ADDRESSES).

Dated: February 2, 2005≤

Laurie K. Allen,

Director, Office of Protected Resources, 

National Marine Fisheries Service.

[FR Doc. 05–2443 Filed 2–7–05; 8:45 am]

BILLING CODE 3510–22–S

COMMODITY FUTURES TRADING 

COMMISSION 

In the Matter of the New York 

Mercantile Exchange, Inc. Petition To 

Extend Interpretation Pursuant to 

Section 1a(12)(C) of the Commodity 

Exchange Act

AGENCY: Commodity Futures Trading 

Commission.

ACTION: Order.

SUMMARY: On February 4, 2003, in 

response to a petition from the New 

York Mercantile Exchange, Inc. 

(‘‘NYMEX’’ or ‘‘Exchange’’) the 

Commodity Futures Trading 

Commission (‘‘Commission’’), issued an 

order 1 pursuant to Section 1a(12)(C) of 

the Commodity Exchange Act (‘‘Act’’). 

The order provides that, subject to 

certain conditions, Exchange floor 

brokers and floor traders (collectively 

referred to hereafter as ‘‘floor members’’) 

who are registered with the 

Commission, when acting in a 

proprietary trading capacity, shall be 

deemed to be ‘‘eligible contract 

participants’’ as that term is defined in 

Section 1a(12) of the Act. The order 

(hereafter the ‘‘original order’’ or the 

‘‘ECP Order’’) is effective for a two-year 

period and thus will expire on February 

4, 2005.

On January 19, 2005, the Exchange 

petitioned the Commission to extend 

the original order for a further one-year 

period. Based on a review of all the 

relevant facts and circumstances, 

including its review of a report required 

as a condition of the original order, 

detailing the experiences of the 

Exchange, its floor members and its 

clearing members under that order, the 

Commission has determined to grant the 

Exchange’s petition. 

Accordingly, subject to certain 

conditions as set forth in this order, 

NYMEX floor members, when acting for 

their own accounts, are permitted to 

continue to enter into certain specified 

over-the-counter (‘‘OTC’’) transactions 

in exempt commodities pursuant to 

Section 2(h)(1) of the Act. In order to 

participate, the floor member must have 

its OTC trades guaranteed by, and 

cleared at NYMEX by, an Exchange 

clearing member that is registered with 

the Commission as a futures 

commission merchant (‘‘FCM’’) and that 

meets certain minimum working capital 

requirements. This order is effective for 

a one-year period commencing on the 

expiration date of the original order.

DATES: This order is effective on 

February 4, 2005.

FOR FURTHER INFORMATION CONTACT:

Donald H Heitman, Senior Special 

Counsel, Division of Market Oversight, 

Commodity Futures Trading 

Commission, Three Lafayette Center, 

1155 21st Street, NW., Washington, DC 

20581. Telephone: 202–418–5041. Email: dheitman@cftc.gov.

SUPPLEMENTARY INFORMATION: 

I. Statutory Background 

Section 1a(12) of the Act, as amended 

by the Commodity Futures 

Modernization Act of 2000 (‘‘CFMA’’), 

Public Law 106–554, which was signed 

into law on December 21, 2000, defines 

the term ‘‘eligible contract participant’’

(‘‘ECP’’) by listing those entities and 

individuals considered to be ECPs.2

Under Sections 2(d)(1), 2(g), and 2(h)(1) 

of the Act, OTC transactions 3 entered 

into by ECPs in an ‘‘excluded 

commodity’’ or an ‘‘exempt 

commodity,’’ as those terms are defined 

by the Act,4 are exempt from all but 

certain requirements of the Act.5 Floor 

brokers and floor traders are explicitly 

included in the ECP definition only to 

the extent that the floor broker or floor 

trader acts ‘‘in connection with any 

transaction that takes place on or 

through the facilities of a registered 

entity or an exempt board of trade, or 

any affiliate thereof, on which such 

person regularly trades.’’ 6

The Act, however, gives the 

Commission discretion to expand the 

ECP category as it deems appropriate. 

Specifically, Section 1a(12)(C) provides 

that the list of entities defined as ECPs 

shall include ‘‘any other person that the 

Commission determines to be eligible in 

light of the financial or other 

qualifications of the person.’’

II. The Original NYMEX Petition 

A. Introduction

By letter dated May 23, 2002, NYMEX 

submitted a petition seeking a 

Commission interpretation pursuant to 

Federal Register / Vol. 70, No. 25 / Tuesday, February 8, 2005 / Notices 6631

7To qualify for the Section 2(h)(1) exemption, the 

transaction must: (1) Be in an exempt commodity, 

(2) be entered into by ECPs, and (3) not be entered 

into on a trading facility.

8By letter dated May 24, 2002, NYMEX filed rule 

changes implementing an initiative to provide 

clearing services for specified energy contracts 

executed in the OTC markets. NYMEX certified that 

the rules comply with the Act and the 

Commission’s regulations. Under the provision, 

NYMEX initially listed 25 contracts that are entered 

into OTC and accepted for clearing by NYMEX, but 

are not listed for trading on the Exchange. In 

connection with the NYMEX initiative, on May 30, 

2002, the Commission issued an order pursuant to 

Section 4d of the Act. The order provides that, 

subject to certain terms and conditions, the NYMEX 

Clearinghouse and FCMs clearing through the 

NYMEX Clearinghouse may commingle customer 

funds used to margin, secure, or guarantee 

transactions in futures contracts executed in the 

OTC markets and cleared by the NYMEX 

Clearinghouse with other funds held in segregated 

accounts maintained in accordance with Section 4d 

of the Act and Commission Regulations thereunder.

9EFS transactions are permitted at the Exchange 

pursuant to NYMEX Rule 6.21A, ‘‘Exchange of 

Futures for, or in Connection with, Swap 

Transactions.’’ The swap component of the 

transaction must involve the commodity underlying 

a related NYMEX futures contract, or a derivative, 

byproduct, or related product of such a commodity. 

In furtherance of its effort to permit OTC clearing 

at the Exchange, NYMEX amended the rule to 

include as eligible EFS transactions ‘‘any contract 

executed off the Exchange that the Exchange has 

designated as eligible for clearing at the Exchange.’’

The Division notes that, subsequent to the 

Commission’s ECP Order responding to the 

Exchange’s original petition, NYMEX listed on its 

ClearPort(sm) Trading venue a significant number 

of futures contracts modeled after OTC energy swap 

agreements. While these futures contracts are 

competitively traded on the ClearPort(sm) Trading 

market, the vast majority of positions in these 

contracts are established via EFS transactions that 

are executed non-competitively away from the 

Exchange and then submitted to NYMEX via its 

ClearPort(sm) Clearing service.

10NYMEX also suggested a further limitation on 

floor members’ permissible transactions by not 

permitting any OTC transactions in electricity 

commodities.

11 68 FR 5621 (February 4, 2003).

12 Id.

13See supra note 5.

14A NYMEX floor member who is determined to 

be an ECP based upon compliance with the 

provisions set forth in the Commission’s original 

order is an ECP only for the purpose of entering into 

transactions executed pursuant to Section 2(h)(1) of 

the Act and as described in the order.

15The Commission noted that the guarantor FCM 

could restrict or otherwise condition the trading for 

which the guarantee is provided. The guarantor 

could, for instance, limit trading to certain 

commodities, place financial limits on overall or 

daily positions, or restrict trading by number or size 

of acceptable transactions.

16For the purposes of an FCM clearing member, 

NYMEX Rule 9.21 defines ‘‘working capital’’ to 

mean ‘‘adjusted net capital’’ as defined by CFTC 

Regulation 1.17.

17The original order provided a sliding scale for 

the two-year duration of the original order whereby 

a clearing member was required to have minimum 

working capital of $5 million during the first 12 

months, $10 million during the thirteenth through 

eighteenth months, and $20 million thereafter. The 

final $20 million requirement is carried over into 

this order.

Section 1a(12)(C) of the Act. 

Specifically, NYMEX, acting on behalf 

of Exchange floor members and member 

clearing firms, requested that the 

Commission make a determination 

pursuant to Section 1a(12)(C) of the Act 

that floor members, when acting in a 

proprietary capacity, may enter into 

certain specified OTC transactions in 

exempt commodities pursuant to 

Section 2(h)(1) of the Act if such floor 

members have obtained a financial 

guarantee for such transactions from an 

Exchange clearing member that is 

registered with the Commission as an 

FCM.7 NYMEX suggested that the 

permissible OTC transactions be limited 

to trading in a commodity that either (1) 

is listed only for clearing at the 

Exchange,8 or (2) is listed for trading 

and clearing at the Exchange and where 

Exchange rules provide for the exchange 

of futures for swaps (‘‘EFS’’) in that 

contract.9 NYMEX further proposed that 

such transactions would be subject to 

additional conditions and restrictions 

detailed in the petition and described 

below.10

B. Arguments in Support of the Original 

Petition 

In its original petition, NYMEX 

offered supporting arguments based on 

both public interest considerations and 

a detailed analysis of the Act’s ECP 

definition. Those arguments are fully 

described in the Federal Register notice 

implementing the original 2003 order.11

C. Trading Restrictions and Exchange 

Oversight 

In its original petition, NYMEX 

represented that it would have 

appropriate compliance systems in 

place to monitor OTC trading by 

Exchange floor members.12 NYMEX also 

suggested that, consistent with the 

standards already applicable to floor 

members with respect to their trading 

on the Exchange, the Commission 

should provide that floor members’

transactions in the permissible contracts 

that are not executed on a trading 

facility be executed only pursuant to the 

Section 2(h)(1) exemption. As indicated 

above, all Section 2(h)(1) transactions 

would be subject to the Act’s 

antimanipulation provisions and, in 

certain situations, its antifraud 

provisions.13 Finally, the Exchange 

represented that it would agree, as a 

condition for its members participating 

in the OTC markets, to limit OTC 

trading by floor members such that the 

counterparties to their trades must not 

be other floor members for contracts that 

are listed for trading on the Exchange. 

Thus, for example, floor members could 

not be counterparties in connection 

with an OTC natural gas swap to be 

exchanged for a futures position in the 

NYMEX Natural Gas Futures contract. 

NYMEX floor members could be 

counterparties in connection with a 

Chicago Basis swap that is subsequently 

cleared at NYMEX through EFS 

procedures because that contract is 

listed only for clearing at the Exchange.

D. The Commission’s Conclusion 

Regarding the Original Petition 

After consideration of the original 

NYMEX petition, the Commission 

determined that NYMEX floor members, 

subject to certain conditions and for a 

two-year period commencing on the 

date of publication of the order in the 

Federal Register, would be eligible to be 

ECPs as that term is defined in Section 

1a(12) of the Act.14 The floor members 

were required to meet the financial 

qualifications of an ECP by having a 

financial guarantee for the OTC 

transactions from a NYMEX clearing 

member that is registered as an FCM 

and that meets certain minimum 

working capital requirements.

The Commission noted that the 

execution and clearing of such 

transactions has financial implications 

for the clearing system.15 Thus, the 

Commission added certain safeguards to 

the original order to limit the possibility 

of a trader entering into OTC 

transactions that could create financial 

difficulty for the guarantor FCM, the 

clearing entity or other clearing firms. 

First, the guarantor FCM must clear, at 

NYMEX, every OTC transaction for 

which it provides such a guarantee. 

Second, in order to assure that the 

guarantor FCM is adequately 

capitalized, the guarantor FCM must 

have and maintain at all times 

minimum working capital 16 of at least 

$20 million.17

The Commission determined to make 

the original order effective for a twoyear period in order to provide the 

opportunity to evaluate the impact of 

the OTC trading on both the OTC 

market and on NYMEX. Thus, the 

Commission required that NYMEX 

submit a report reviewing its 

experiences and the experiences of its 

floor members and clearing members 

with respect to OTC trading, including: 

The levels of OTC trading and related 

clearing activity; the number of floor 

members and clearing members who 

participated in these activities; and an 

evaluation of whether the Commission 

should extend this Order and, if so, 

whether any modifications should be 

made thereto. This report was to address 

6632 Federal Register / Vol. 70, No. 25 / Tuesday, February 8, 2005 / Notices 

18 68 FR 5621 (February 4, 2003).

the first eighteen months of the two-year 

period, and was to be submitted to the 

Commission no later than 30 days after 

the conclusion of that eighteen month 

period (i.e., by September 4, 2004). In 

fact, the report was incorporated into 

the Exchange’s January 19, 2005 petition 

to extend the relief granted in the 

original petition and thus was not filed 

within the timeline set out in the 

original order. Nevertheless, the 

Commission has determined to accept 

this report and not to impose any 

sanctions on the Exchange for the late 

filing of the report. 

III. The Petition to Extend the Relief 

A. The Exchange Report

The Exchange’s petition to extend the 

relief granted in the original order 

includes the required report concerning 

the experiences of the Exchange, its 

floor members and clearing members 

under the original order. At the outset, 

the report states that the Exchange 

adopted two new rules in connection 

with the original order, Rules 6.21F 

(‘‘Participation by NYMEX Floor 

Members in Special Program for Overthe-Counter Trading with FCM 

Guarantee’’) and Rule 9.41 (‘‘Special 

Capital Provisions for Clearing Members 

Guaranteeing and Clearing OTC 

Contracts Executed by NYMEX Floor 

Members’’). The Exchange notes that, if 

the Commission grants its request for an 

extension, it will certify to the 

Commission rule amendments to 

conform these rules to the terms of the 

Commission’s extension. 

With respect to compliance oversight, 

the Exchange reports that, under Rule 

6.21F, floor members are required to 

notify the Exchange Compliance 

Department prior to any participation in 

the program authorized by the ECP 

Order, and to submit all executed OTC 

transactions to the Exchange for 

clearing. Beginning April 1, 2004, the 

Exchange also required that notification 

to include a specially tailored guarantee 

form prepared by Exchange staff. In 

addition, the Exchange employs a 

special trade type indicator to allow it 

to identify EFS transactions. Thus, 

Exchange Compliance staff is able to 

identify which floor members are 

participating in the program under the 

ECP Order and whether they are 

complying with the notification and 

other requirements. Currently, none of 

the floor members trading pursuant to 

the ECP Order execute orders for 

customers in their floor member 

capacities. Therefore, they would not be 

in a position to take advantage of 

customer order information when 

trading in a proprietary capacity under 

the ECP Order. In addition, the minimal 

amount of trading done under the ECP 

Order has been regularly reviewed by 

the Exchange’s Compliance Market 

Surveillance staff. In addition, 

Compliance Market Surveillance staff 

monitors for the condition of the ECP 

Order that prohibits floor members 

participating in this program from 

engaging in EFS transactions with each 

other. Compliance staff monitors for 

compliance with this restriction by 

reviewing the trading activity of 

participating floor members to check for 

trades involving a CTI 1 vs. CTI 1 

transaction. 

With respect to actual floor member 

participation in the program, the 

Exchange notes that it has been 

‘‘relatively slight to date.’’ Only 12 floor 

members participated in the program 

overall and only seven were 

participating at the time the extension 

request was filed. With respect to 

volume, the Exchange reports that the 

floor members participating in the 

program, during the period from March 

11, 2003 through January 7, 2005, 

participated in cleared transactions 

totaling 82,855 lots on the buy side and 

79,740 lots on the sell side. In general, 

this EFS activity was concentrated in 

the smaller cash-settled natural gas or 

natural gas basis futures contracts listed 

in the NYMEX ClearPort(sm) Clearing 

System. 

By comparison, the single day volume 

for November 4, 2004, the busiest day 

experienced by NYMEX’s ClearPort(sm) 

Clearing services during that same 

period was 147,153 lots. The same press 

release announcing that volume record 

noted that total 2004 cleared volume for 

OTC transactions, as of that date, was 

10,858,906 lots. Thus, the contribution 

by floor members participating in the 

program under the Commission’s ECP 

Order ‘‘has been relatively modest.’’

The Exchange attributed this limited 

participation to a number of possible 

factors. The Exchange noted that, over 

recent months, noticeable price 

volatility in NYMEX’s core floor-traded 

products has provided ample trading 

opportunities on the Exchange’s trading 

floors in futures products, making it less 

necessary for professional futures 

traders to look to OTC markets for 

trading opportunities. Also, at present, 

the Exchange permits EFS transactions 

in natural gas futures, but not crude oil, 

heating oil or unleaded gasoline futures, 

thus making the program of interest 

primarily only to those floor members 

who already regularly trade in natural 

gas futures. In addition, many floor 

traders focus on trading in the front 

contract month, or the first few listed 

months of a contract, whereas the OTC 

natural gas market emphasizes longer 

trading periods, such as quarterly or 

seasonal strip trading, so that a floor 

trader actively engaging in OTC natural 

gas trading would likely need to retain 

an additional clerk to manage the OTC 

activity. Finally, the requirement that 

the clearing FCM guaranteeing a floor 

member’s trades under the program 

must maintain working capital of $20 

million has restricted the number of 

clearing members able to participate in 

the program and effectively narrowed 

the pool of floor members willing to 

participate in the program, since it is 

difficult (though not impossible) for a 

floor member to use his or her regular 

clearing FCM for regular futures trading 

and another for OTC trades under this 

program. 

B. The Extension Request 

The Exchange notes that its original 

petition, and the Commission’s original 

ECP Order, were based on an approach 

whereby an OTC energy swap would be 

converted, via an EFS transaction, to a 

futures position maintained at the 

Exchange’s clearinghouse. Recently, 

however, the Exchange has begun 

preparation of a draft filing to register 

with the Commission a derivatives 

transaction execution facility (DTEF). 

As a part of that filing, the Exchange 

plans to request that a large number of 

the products currently listed on the 

NYMEX ClearPort(sm) Trading product 

slate be shifted from the DCM to the 

DTEF regulatory tier. As part of that 

same filing, the Exchange staff 

anticipates revisiting the manner in 

which off-exchange energy transactions 

are submitted to the Exchange for 

participation in the ClearPort(sm) 

Clearing Service. Any such revision 

would require corresponding revisions 

in the Commission’s ECP Order. 

Therefore, the Exchange suggests that 

any substantive changes to the terms of 

the order, including the possibility of 

making the order permanent, should be 

considered in the context of the DTEF 

filing. In the meantime, the Exchange 

requests that the existing ECP Order be 

extended for an additional term of one 

year. The Exchange notes that the policy 

arguments in favor of the program under 

the original ECP Order, summarized in 

the Federal Register notice publishing 

the order,18 ‘‘remain valid and also 

support the continuation of this 

program.’’

IV. Conclusion 

Accordingly, the Commission has 

determined, consistent with the NYMEX 

petition of January 19, 2005, that it is 

Federal Register / Vol. 70, No. 25 / Tuesday, February 8, 2005 / Notices 6633

19See 68 FR 5621 at 5624–25 (February 4, 2003).

appropriate to issue an order pursuant 

to Section 1a(12)(C) of the Act extending 

the relief granted in its original February 

4, 2003 order whereby, subject to certain 

conditions and for a further one-year 

period commencing on February 4, 

2005, NYMEX floor brokers and floor 

traders are included within the 

definition of ECPs who can enter into 

OTC transactions pursuant to Section 

2(h)(1) of the Act. Although this order 

applies only to NYMEX and NYMEX 

members, the Commission would 

welcome, in response to a petition so 

requesting, providing substantially 

similar relief to other designated 

contract markets and members of 

designated contract markets.

V. Cost Benefit Analysis 

Section 15 of the Act, as amended by 

Section 119 of the CFMA, requires the 

Commission to consider the costs and 

benefits of its action before issuing a 

new regulation or order under the Act. 

By its terms, Section 15 does not require 

the Commission to quantify the costs 

and benefits of its action or to determine 

whether the benefits of the action 

outweigh its costs. Rather, Section 15 

simply requires the Commission to 

‘‘consider the costs and benefits’’ of the 

subject rule or order. 

Section 15(a) further specifies that the 

costs and benefits of the proposed rule 

or order shall be evaluated in light of 

five broad areas of market and public 

concern: (1) Protection of market 

participants and the public; (2) 

efficiency, competitiveness, and 

financial integrity of futures markets; (3) 

price discovery; (4) sound risk 

management practices; and (5) other 

public interest considerations. The 

Commission may, in its discretion, give 

greater weight to any one of the five 

enumerated areas of concern and may, 

in its discretion, determine that, 

notwithstanding its costs, a particular 

rule or order is necessary or appropriate 

to protect the public interest or to 

effectuate any of the provisions or to 

accomplish any of the purposes of the 

Act. The Commission undertook a 

detailed costs-benefits analysis in 

considering the original order.19 Actual 

experience under that order has been 

consistent with the Commission’s 

analysis.

By extending the essential provisions 

of the original 2003 order, this order is 

intended to reduce regulatory barriers 

by continuing to permit NYMEX 

members registered with the 

Commission as floor brokers or floor 

traders, when acting in a proprietary 

capacity, to enter into OTC transactions 

in exempt commodities pursuant to 

Section 2(h)(1) of the Act if such floor 

members have obtained a financial 

guarantee for such transactions from an 

Exchange clearing member that is 

registered with the Commission as an 

FCM. The Commission has considered 

the costs and benefits of this order in 

light of the specific provisions of 

Section 15(a) of the Act. 

VI. Order 

Upon due consideration, and 

pursuant to its authority under Section 

1a(12)(C) of the Act, the Commission 

hereby determines that a NYMEX 

member who is registered with the 

Commission as a floor broker or a floor 

trader, when acting in a proprietary 

trading capacity, shall continue to be 

deemed to be an eligible contract 

participant and may continue to enter 

into Exchange-specified OTC contracts, 

agreements or transactions in an exempt 

commodity under the following 

conditions: 

1. This Order is effective for one year, 

commencing on February 4, 2005. 

2. The contracts, agreements or 

transactions must be executed pursuant 

to Section 2(h)(1) of the Act. 

3. The floor broker or floor trader 

must have obtained a financial 

guarantee for the contracts, agreements 

or transactions from a NYMEX clearing 

member that: 

(a) Is registered with the Commission 

as an FCM; and, 

(b) Clears the OTC contracts, 

agreements or transactions thus 

guaranteed. 

4. Permissible contracts, agreements 

or transactions must be limited to 

trading in a commodity that either: 

(a) Is listed only for clearing at 

NYMEX or 

(b) Is listed for trading and clearing at 

NYMEX and NYMEX’s rules provide for 

exchanges of futures for swaps in that 

contract, and each OTC contract, 

agreement or transaction executed 

pursuant to the order must be cleared at 

NYMEX. 

5. The floor broker or floor trader may 

not enter into OTC contracts, 

agreements or transactions with another 

floor broker or floor trader as the 

counterparty for contracts that are listed 

for trading on the Exchange. 

6. NYMEX must have appropriate 

compliance systems in place to monitor 

the OTC contracts, agreements or 

transactions of its floor brokers and floor 

traders. 

7. Clearing members that guarantee 

and clear OTC contracts, agreements or 

transactions pursuant to this order must 

have and maintain at all times 

minimum working capital of at least $20 

million. A clearing member must 

compute its working capital in 

accordance with exchange rules and 

generally accepted accounting 

principles consistently applied. 

8. In the event NYMEX requests a 

further modification or extension of the 

ECP Order, the request shall include a 

report to the Commission reviewing the 

experiences of the Exchange and its 

floor members and clearing members 

under the Order. The report shall 

include information on the levels of 

OTC trading and related clearing 

activity, the number of floor members 

and clearing members participating in 

the activity, and the Exchange’s reasons 

supporting the further modification or 

extension of the Order. 

This order is based upon the 

representations made and supporting 

material provided to the Commission by 

NYMEX. Any material changes or 

omissions in the facts and 

circumstances pursuant to which this 

order is granted might require the 

Commission to reconsider its finding 

that the provisions set forth herein are 

appropriate. Further, if experience 

demonstrates that the continued 

effectiveness of this order would be 

contrary to the public interest, the 

Commission may condition, modify, 

suspend, terminate or otherwise restrict 

the provisions of this order, as 

appropriate, on its own motion.

Issued in Washington, DC on February 2, 

2005 by the Commission. 

Jean A. Webb, 

Secretary of the Commission.

[FR Doc. 05–2368 Filed 2–7–05; 8:45 am] 

BILLING CODE 6351–01–U

CORPORATION FOR NATIONAL AND 

COMMUNITY SERVICE 

Sunshine Act; Notice of Closed 

Meeting

AGENCY: Corporation for National and 

Community Service.

ACTION: Notice of closed meeting of the 

Board of Directors. 

SUMMARY: On Thursday, February 3, 

2005, a majority of the Board of 

Directors (Board) of the Corporation for 

National and Community Service 

(Corporation) voted, pursuant to 45 CFR 

2505.4, to close public observation for a 

meeting on February 7, 2005. The 

meeting to be closed involves 

discussions of the draft AmeriCorps 

rulemaking proposal the Corporation 

plans to submit to the Office of 

Management and Budget rulemaking 

docket. The vote followed a 

determination, in accordance with the