NYMEX Statement on U.S. Treasury Department Blueprint for Financial Regulatory Reform

NYMEX Statement on U.S. Treasury Department Blueprint for Financial Regulatory
Reform

NEW YORK, March 31 /PRNewswire-FirstCall/ -- NYMEX Holdings, Inc.
(NYSE: NMX), the parent company of the New York Mercantile Exchange, Inc.
(NYMEX), the world's largest physical commodities exchange, today issued the
following statement in response to the U.S. Treasury Department's "Blueprint
for Financial Regulatory Reform" (Report).
We commend the Treasury Department in undertaking this thoughtful and
detailed year-long review of the current structure of our federal financial
regulatory system. We operate in a dynamic economy, and we believe that it is
necessary and appropriate for government officials to engage in periodic
reviews to assess whether current structures and policies have kept pace with
rapidly evolving markets.
Thus while much of the current regulatory structure for the securities
industry remains a hold-over from the Great Depression era, the regulatory
structure of the futures industry was modernized by landmark legislation
enacted by Congress in late 2000. As a result of the implementation of this
legislation, which pioneered the use of broad-based core principles that
establish flexible but demanding general performance standards to be met by
regulated entities, the futures industry has seen a substantial surge in
innovative new products and services that benefit not only the immediate
market participants but also the broader U.S. economy as well.
The Report begins with several short term objectives. In particular, it is
recommending an expansion in the size and role of the President's Working
Group on Financial Markets (PWG).
"The PWG has played a critical role in coordinating policy analysis and
response among federal financial regulatory officials, particularly in
mitigating systemic risk, enhancing market integrity and investor protection
and supporting market efficiency and competitiveness, and I welcome an
expanded role for the PWG in coordination and communication among the federal
agencies," said James E. Newsome, NYMEX President and Chief Executive Officer,
who served as member of the PWG during his prior service as CFTC Chairman.
Beyond the specific short-term objectives, the Report otherwise sets forth
longer term objectives requiring further study and review. In general, these
objectives are quite sweeping in nature and generally will require
Congressional action to implement new laws and thus will entail a process that
may extend over several years.
NYMEX looks forward to working with Treasury, the CFTC, Congress and other
interested parties on ensuring that any legislative proposal will continue to
preserve and to support innovative and competitive markets and will enhance
the ability of firms based in the U.S. to compete in a global marketplace.
Futures exchanges regulated by the CFTC currently face competition not only
from exempt over-the-counter derivatives venues in the U.S. but also from
foreign exchanges operating under various levels of regulation overseas.
The Report commends the CFTC's current principles-based regulatory
philosophy and indeed calls upon the SEC to adopt a similar approach. NYMEX
strongly supports the emphasis in the Report on the value of a flexible core
principles regulatory philosophy that can best keep pace with rapidly evolving
financial markets. NYMEX also commends the Treasury Department for requiring
that the SEC necessarily adopt fully various policies that are already well in
place at the CFTC, including a core principles regulatory approach and a
streamlined approval process for new rules and products, as a necessary
condition preceding any possible future consolidation of the two regulatory
agencies.
Finally, the Report refers to a consolidation of the SEC and the CFTC
under an "evolutionary" framework that likely would extend over a number of
years. NYMEX believes that a consolidation of these agencies does not
represent the only way for rationalizing differences between futures and
securities regulation. Moreover, any such review must be undertaken with care
and necessarily must fully take into account the very real differences in
market functions, products and regulatory missions. Thus, for example, there
are critical differences in the use of performance bonds to secure open
futures positions as compared with the use of margins in the securities
business model.
About NYMEX Holdings, Inc.
NYMEX Holdings, Inc. (NYSE: NMX) is the parent company of the New York
Mercantile Exchange, Inc., the world's largest physical commodities exchange,
offering futures and options trading in energy and metals contracts and
clearing services for more than 400 off-exchange energy contracts. Through a
hybrid model of open outcry floor trading and electronic trading on CME
Globex(R) and NYMEX ClearPort(R), NYMEX offers crude oil, petroleum products,
natural gas, coal, electricity, gold, silver, copper, aluminum, platinum group
metals, emissions, and soft commodities contracts for trading and clearing
virtually 24 hours each day. Further information about NYMEX Holdings, Inc.
and the New York Mercantile Exchange, Inc. is available on the NYMEX website
at http://www.nymex.com.
Forward Looking and Cautionary Statements
This press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act, with respect to our
future performance, operating results, strategy, and other future events. Such
statements generally include words such as could, can, anticipate, believe,
expect, seek, pursue, and similar words and terms, in connection with any
discussion of future results. Forward-looking statements involve a number of
assumptions, risks, and uncertainties, any of which may cause actual results
to differ materially from the anticipated, estimated, or projected results
referenced in forward-looking statements. In particular, the forward-looking
statements of NYMEX Holdings, Inc., and its subsidiaries are subject to the
following risks and uncertainties: the success and timing of new futures
contracts and products; changes in political, economic, or industry
conditions; the unfavorable resolution of material legal proceedings; the
impact and timing of technological changes and the adequacy of intellectual
property protection; the impact of legislative and regulatory actions,
including without limitation, actions by the Commodity Futures Trading
Commission; and terrorist activities and international hostilities, which may
affect the general economy as well as oil and other commodity markets. We
assume no obligation to update or supplement our forward-looking statements.
SOURCE NYMEX Holdings, Inc.

Media, Anu Ahluwalia, +1-212-299-2439, or Investors, Keil Decker,
+1-212-299-2209, both of NYMEX Holdings, Inc.