Nymex: CFTC Issues Order Allowing Exchange Locals To Participate In OTC Trades To Clear On The Exchange

The Commodity Futures Trading Commission (CFTC) has issued an order recognizing registered Exchange floor traders and floor brokers acting in a proprietary capacity as eligible contract participants qualified to enter into specified over-the-counter (OTC) transactions, if their trades are cleared at the Exchange and guaranteed by an Exchange clearing member, subject to certain requirements.

The order is effective for two years and was issued in response to a petition from the Exchange.

The Exchange will provide further details on the program and a launch date shortly.

Exchange President J. Robert Collins, Jr., said, "The Exchange petitioned the CFTC because adding the participation of this pool of experienced energy traders will not only provide liquidity at a time when it is increasingly needed in OTC markets, but will also increase the efficiency of the relationship between energy futures and OTC markets. These participants will perform the same valuable functions they do in Exchange markets, including enhancing price discovery through the speed and efficiency of market adjustment to new fundamentals and facilitating adjustment of the market price to new information."