The plan has already received approval from the members of the Exchange and the Securities and Exchange Commission. The Exchange is also seeking a favorable tax ruling from the Internal Revenue Service before the plan goes into effect.
Exchange Chairman Daniel Rappaport said, "We are very pleased to be rapidly moving forward with this change, which will reposition the Exchange as a 21st century business enterprise that will create and pursue profitable new opportunities, react rapidly and decisively in an increasingly competitive marketplace, and explore interest by outside investors. A holding company structure will best enable us to to raise capital and complete strategic transactions at the holding company level, while at the same time dealing with purely Exchange-related matters at the Exchange level."
Under the plan, the Exchange, a not-for-profit membership corporation under New York law, will be reorganized as a for-profit membership corporation under Delaware law and will be renamed New York Mercantile Exchange, Inc. A new stock-holding company named NYMEX Holdings, Inc., will be formed to own all of the economic interests and most of the voting control in the for-profit membership corporation. Each existing NYMEX Division membership will be converted into one share of common stock in NYMEX Holdings, Inc., representing equity in the overall organization, and one membership in the Exchange representing trading privileges.
The common stock and trading privileges will not be separable until a majority of stockholders vote to permit separate trading of the common stock and trading rights. Until that time, the boards of directors of NYMEX Holdings, Inc., and New York Mercantile Exchange, Inc., will be identical 22-person boards drawn from the same membership categories and in the same proportions as currently apply. Eligibility for membership will continue to be subject to the current rules.
The Exchange is the largest physical commodity exchange in the world, with volume reaching close to 110 million contracts in 1999. The futures and options contracts traded at the Exchange are based on such strategic commodities as oil, gold, silver, natural gas, electricity, copper, and aluminum.
