Notices to Members

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Notice I-03-12

September 18, 2003

OTC Transactions Subsequently Converted to Futures Subject to NFA's Assessment Fee Effective November 1, 2003

The Board of Directors has amended NFA Bylaw 1301(b) to clarify that NFA's assessment fee applies to OTC contracts entered into outside of an exchange's matching facility but then submitted to an exchange's clearinghouse for conversion to futures contracts. FCM Members must collect the assessment fee on these transactions beginning November 1, 2003.

To date, NYMEX is the only contract market that has adopted rules to offer OTC contracts that are later converted to futures contracts. For a listing of these OTC contracts, please see With the exception of the Henry Hub Natural Gas Swap, all of the NYMEX OTC contracts are subject to NFA's full assessment fee, which is currently $.06 per round turn. The Henry Hub Natural Gas Swap contract, which is one-fourth the size of a similar futures contract traded on NYMEX, is subject to the $.04 per round turn assessment fee for mini-contracts.

Questions concerning the application of the assessment fee to these products should be directed to:

    Scott Reeves, Director
    Treasurer's Office
    National Futures Association
    200 West Madison Street
    Chicago, Illinois 60606-3447

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