The Financial Times is reporting that Nymex has set a June 3 date for a member meeting to discuss Nymex bylaw 311-G, which in effect says that that should Nymex end floor trading for a listed product, or Nymex list it only for electronic trading, or if 90% of the volume is traded electronically, members would be entitled, in perpetuity, or until the exchange no longer lists the product to trade electronically, to whatever is greater: 10% of the gross revenue or 100% of the additional fees or surcharges.
As a thought experiment, substitute “no longer exists.” for “no longer lists…”
And another thing…
in going through the bylaws, I was drawn to another section on the same page :
(E) As further provided by Section 500(B), the consent of the owners of 75% of
all of the Class A Memberships shall be required for any transaction, regardless of form, the effect of which is to cause the Clearing House to no longer be wholly-owned by the Exchange.
This could be part of the reason that the CME Group/Nymex deal includes the prerequisite that Nymex buy back 75% of the memberships before the deal can close.
wasn’t demutualization supposed to put an end to these kinds of issues? It’s just another example of how nothing is ever as simple as it looks.
