For Release: May 12, 1998
CFTC Seeks Public Comment on the New York
Mercantile Exchange's Proposed Specialist Market Maker
The Commodity Futures Trading Commission (Commission) has issued a
Notice seeking public comment on a proposal by the New York Mercantile
Exchange (NYMEX or Exchange) to establish a Specialist Market Maker
program for new or low-volume futures contracts.
The Specialist Market Maker would be a member or member firm appointed
by NYMEX to act as a market maker in a designated contract market. The
Specialist Market Maker would be required to maintain a continuous
physical presence on the floor of the Exchange throughout the regular
trading session of the contract and to maintain a two-sided market in
the contract for which he or she had been appointed. The Specialist
Market Maker also would be required to maintain a limit order book of
member and non-member limit orders. In return for these services, the
Specialist Market Maker would be paid a contract development fee and
receive various trading priorities with respect to certain
transactions executed in the trading ring for the appointed
The Commission is seeking comment on, among other things, the
appropriateness of the trading priorities that would be granted to the
Specialist Market Maker. In addition, the Commission is seeking
comment on the proposed operation of the limit order book.
The Commission expects the Notice to be published in the Federal Register shortly and has provided a 30-day comment period. The Notice is available on the Commission's Internet Home Page (www.cftc.gov). Copies of the Notice and NYMEX's proposal also may be obtained by contacting the Office of the Secretariat, Three Lafayette Centre, 1155 21stStreet, N.W., Washington, DC 20581, (202) 418-5100.