CFTC Approves New York Mercantile Exchnage's Specialist Market Maker Program

Release: #4165-98
For Release: July 9, 1998

CFTC Approves New York Mercantile Exchange's Specialist Market Maker Program

Washington, D.C. -- The Commodity Futures Trading Commission (Commission) today approved the New York Mercantile Exchange's (NYMEX or Exchange) proposal to establish a Specialist Market Maker Program (Program). The Program is intended to develop liquidity in new or low volume futures contracts.

The Specialist Market Maker will be a NYMEX member or member firm appointed by the Exchange to act as a market maker in a designated contract market. The Specialist Market Maker will be required to maintain a continuous physical presence on the floor of the Exchange throughout the regular trading session of the designated contract market and to maintain a two-sided market in the contract for which he or she had been appointed. The Specialist Market Maker also will be required to maintain a limit order book of member and non-member limit orders. In return for these services, the Specialist Market Maker will be paid a contract development fee and receive various trading priorities with respect to transactions executed in the trading ring for the appointed contract. The Program will be terminated in each designated market once the trading volume reaches a certain threshold.

A copy of the Exchange's submission may be obtained by contacting the Commission's Office of the Secretariat, Three Lafayette Centre, 1155 21^st Street, N.W., Washington, D.C. 20581, (202) 418-5100.