Dear Member:

As you may be aware, Senator Feinstein has proposed an amendment to the
Senate energy bill. The amendment seeks to redress some serious regulatory
gaps which are significant to the energy and metals marketplaces:

1)	the differential treatment of electronically traded energy and
metals futures
2)	the inability to get critically needed information from
over-the-counter (OTC) market operators

The New York Mercantile Exchange is supporting the Feinstein amendment. We
want to explain our  reasons.

Electronic trading systems offering traditional over-the-counter products
for energy and metals trading are currently exempt from any regulation. The
CFTC is without jurisdiction to oversee fair play, or to examine records,
establish standards and deter misconduct as occurs on a traditional exchange
like NYMEX.

As these systems have gained importance in the price discovery process for
many instruments, and as they are accepted as centralized marketplaces by
the customers using them, we find the exemption from regulation of the
platforms and their operators to be troubling.

The Feinstein amendment is aimed squarely at the system operators, who take
on the role of operators of a central marketplace. The amendment does not
seek to impose restrictions on where OTC market participants might trade but
provides some limited record keeping requirements, which are more than
likely already part of their daily business. Instead, the amendment seeks to
create a duty for system operators to report to the CFTC and be subject to
the "Regulatory Lite" scheme set forth in the Commodity Futures
Modernization Act.

Imagine a situation where a large market participant held a substantial
volume of crude oil in private storage, and then leased Cushing pipeline
capacity for its own use or to move additional oil into storage. Market
demand could be unmet by this company, and the ability of others to meet it
could be frustrated, thus driving the price up. Suppose this company held a
large long position on an over the counter system, and profited handsomely
from this conduct. Would you really want that market user to be able to hide
behind the unregulated status of the platform where those trades occurred to
impede investigation? Is that the type of deterrent to misconduct that the
industry wants? We do not think so.

We urge you to notify Senator Feinstein and the bill's co-sponsor, Senator
Fitzgerald of your support. Contact information is as follows:

Senator Dianne Feinstein
Contact Warren Weinstein
202-224-3841   fax 228-3954

Senator Peter Fitzgerald
Contact Terry Van Doren
202-224-2854  fax 228-1371

Chairman Jeff Bingaman
Senate Energy and Natural Resources Committee
Contact Shirley Neff
202-224-4103   fax 224-9026

We appreciate your support on this important issue.

Yours,

Vincent Viola
Chairman of the Board