Notice # 01-137
April 20, 2001

TO:
All New York Mercantile Exchange Members and Member Firms

FROM:
Neal L. Wolkoff, Executive Vice President

RE:
Rule Changes to Implement enymex(sm)

DATE:
April 19, 2001

===========================================================

Please be advised that the NYMEX Board of Directors has approved a number
of rule changes, which are summarized below, to incorporate the
implementation of enymexK. These rule changes, which have been filed with
the CFTC and thus may become effective at any time, will be implemented
upon the launch of enymexK.

An unmarked version of these rule changes can be found on the Exchange's
website.  A hard copy "black-line" version of the rule changes, which shows
changes from the current rules, can be obtained by calling Kelly Ann Neeson
at (212) 299-2217 in the Exchange's Legal Department.

The rule changes include the following areas: trading; position limits,
accountability and reporting; arbitration, Clearing Member obligations and
a summary disciplinary procedure for denial of access.

     Trading Rules
A number of changes are being made to existing rules to reflect the
roll-out of enymexK, such as expanding such rules to cover both NYMEX
ACCESS7 and enymexK.  For example, the NYMEX ACCESS7 error trade rule has
been retitled and revised to cover error trades occurring on either system.

EFP and EFS. Similarly, Rule 6.21B and 6.21C are the Exchange's rules that
respectively govern EFP and EFS transactions for futures contracts traded
only on NYMEX ACCESS7, i.e., electricity futures contracts.  These rules
will now also govern enymexK EFP and EFS transactions.

Settlement Procedures. New NYMEX Rule 6.52E ("enymexK Settlement Price
Procedures") was modeled upon the current settlement price rule for
electricity contracts trading only on NYMEX ACCESS7. Thus, settlement
prices generally would be determined manually by the Settlement Committee,
or if the Settlement Committee was not available, by Exchange staff using
the same criteria used by the applicable Settlement Committee.  However,
one difference is that the electricity settlement rule provides that no
settlement price shall be established that would be lower than the best bid
or higher than the best offer that: (a) was for at least twenty-five (25)
contracts, and (b) had been posted with the Exchange and remained available
for execution and unfilled for the final 30 minutes of trading.  By
comparison, new NYMEX Rule 6.52E contains more general language that would
allow the Exchange to customize for each enymexK contract the bids and
offers that would be protected in the settlement!
 process.

Position Limits, Accountability and Reporting.  With regard to the four
physical delivery enymexK crude oil contracts, the amendments to NYMEX
Rules 9.26 and 9.27 provide for position accountability in the back months
and a spot month limit of 2,000 contracts for each of these four contracts.
Also, the Exchange's current hedge exemption procedures will be made
applicable to the enymexK contracts. With regard to the cash-settled
enymexK contracts, the rule amendments provide for position accountability
across all contract months. The amendments to Rule 9.34 establish a
reporting level of 25 contracts for each enymexK contract, the same
reporting level currently used for many other Exchange contracts. However,
NYMEX staff also has initiated discussions with CFTC staff regarding
possible regulatory relief to exempt market participants from these
reporting requirements to the CFTC for the cash-settled contracts.

Brokerage and Clearing Member Financial Responsibility. As to brokerage,
new Rule 9.04A ("enymexK Trading") permits brokerage to be done for enymexK
products.  Section (C) of new Rule 9.04A clarifies that a Clearing Member
will be financially responsible for trades done for each account it
carries, even if there is a system malfunction.

     Arbitration Rules
The Exchange's arbitration rules are being amended to reference Non-Member
enymexK Users and to provide that disputes between a Member and a
Non-Member enymexK User or between Non-Member enymexK Users would be
subject to Exchange arbitration on a permissive rather than on a mandatory
basis.

     Summary Disciplinary Procedures
The sole disciplinary sanction that would be applicable to a Non-Member
enymexK User would be denial of further direct access to the system.
Consistent with this approach, new Exchange Rule 8.99A establishes a
summary disciplinary procedure that would allow the Exchange to take action
when necessary on an expedited basis.

Please note that Exchange Members who are enymexK Users also will continue
to be subject to Exchange rules.

If you have any questions concerning these rules, please contact
Christopher K. Bowen, Senior Vice President and General Counsel, NYMEX
Legal Department, at (212) 299-22200; or Brian Regan, Senior Associate
General Counsel, NYMEX Legal Department, at (212) 299-2207.










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