Notice No. 01-68
February 28, 2001


TO:
All Exchange Members and Member Firms

FROM:
Neal L. Wolkoff, Executive Vice President

RE:
Implementation of Amendments to Exchange Disciplinary Rules to Permit 
Restitution in Certain Cases
____________________________________________________________

Included below please find amendments that become effective today to NYMEX 
Rules 8.03 (&Settlements8); 8.08 (&Settlement by the Adjudication 
Committee8); 8.11 (&Decision8) and 8.55 (&Classification of Offenses8).  In 
general, these rule amendments provide Exchange disciplinary committees, 
including both NYMEX and COMEX Division disciplinary committees, with 
explicit authority to include restitution as a sanction in a disciplinary 
matter where quantifiable customer harm has resulted from a rule violation.

If you have any questions, please contact Nancy Minett, Compliance Counsel, 
Compliance Department, at (212) 299-2940.


* * * *

[Asterisks indicate additions; brackets indicate deletions.]


Rule 8.03.  SETTLEMENTS

(A) When the Compliance Department concludes that a Rule violation has 
occurred, and at any time prior to the submission of an Investigative Report 
to the Business Conduct Committee, the Compliance Department may negotiate 
with the Respondent and enter into a written Offer of Settlement with the 
Respondent.  The Respondent may agree, without admitting or denying a Rule 
violation, to an Offer of Settlement which may provide for a cease and desist 
order, a censure,     ** an order directing restitution to any injured 
person, ** and a fine of not more than $5,000 for each Rule violation 
alleged, or any combination of such penalties.  Any such settlement is 
subject to the approval of the Business Conduct Committee.

[Sections (B) and (C) remain unchanged.]

(D) Any Offer of Settlement agreed to under Sub-Sections (B) or (C) of this 
Rule may provide for a cease and desist order, a censure, ** an order 
directing restitution to any injured person,** a fine not to exceed $25,000 
for each Rule violation alleged, an expulsion or suspension from all or some 
rights and privileges of membership, the ability to hold a permit, Electronic 
Trading Privileges, employment on the Exchange Floor or employment for the 
purpose of entering orders on NYMEX ACCESS for a period not to exceed three 
(3) months for each Rule violation alleged, or any combination of such 
penalties.

[Section (E) remains unchanged.]


Rule 8.08. SETTLEMENT BY THE ADJUDICATION COMMITTEE

(A) If the Respondent wishes to settle a matter at any time after the filing 
of the complaint with the Chairman of the Adjudication Committee, the 
Respondent may submit a written settlement offer.  The settlement offer will 
be directed to the NYMEX Division Hearing Panel or the COMEX Division Hearing 
Panel, as applicable, that has not been assigned the case to hear and 
decide.  The Compliance Department may recommend to that Hearing Panel an 
approval or a rejection of any settlement offer.  Such offer may provide for 
the issuance of a cease and desist order, a censure, ** an order directing 
restitution to any injured person, ** a fine not to exceed $250,000 for each 
violation alleged to have been committed, an expulsion or suspension from all 
or some rights and privileges of membership, the ability to hold a permit, 
electronic trading privileges, employment on the Exchange Floor, or 
employment for the purposes of entering orders on NYMEX ACCESS or any 
combination of such pen!
al!
ties.

[The remainder of the Rule remains unchanged.}

Rule 8.11 DECISION

[Sections (A) through (J) remain unchanged.]

(K) If the Hearing Panel determines to order the imposition of a penalty, the 
penalties which may be imposed are any one or combination of the following: 
the issuance of a cease and desist order, a censure, ** an order directing 
restitution to any injured person, ** a fine of not more than $250,000 for 
each Rule violation found to have been committed, an expulsion or a 
suspension from all or some rights and privileges of membership, the ability 
to hold a permit, Electronic Trading Privileges, employment on the Exchange 
Floor, or employment for the purposes of entering orders on NYMEX ACCESS.

[The remainder of the Rule remains unchanged.]


Rule 8.55. CLASSIFICATION OF OFFENSES

Offenses against the Exchange shall be classified as major offenses and minor 
offenses.  Major offenses shall be punishable by **one or more of the 
following:** expulsion, suspension **from all or some rights and privileges 
of membership, the ability to hold a permit, Electronic Trading Privileges, 
employment on the Exchange Floor, or employment for the purposes of entering 
orders on NYMEX ACCESS,** a fine of not more than $250,000, **cease and 
desist order, or an order directing restitution to any injured person.**   
[or by both suspension and fine].  Minor offenses shall be punishable by 
**one or more of the following:** a fine of no more than $10,000  **cease and 
desist order, order directing restitution to any injured person** or 
suspension for not more than one year ** from all or some rights and 
privileges of membership, the ability to hold a permit, Electronic Trading 
Privileges, employment on the Exchange Floor, **or employment for the 
purposes of entering orders on !
NY!
MEX** ACCESS ** [; or both].  Unless good cause is shown, any offense 
involving fraudulent or deceitful trading practices detrimental to a customer,
s order shall be a Major Offense and shall be punishable, at a minimum, with 
a suspension or revocation of the Member,s or NYMEX ACCESS Operator,s right 
to execute customer orders.

[The remainder of the rule remains the same.}



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