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CME Group Announces the Launch of New Sulfur Dioxide Futures and Options Contracts

Posted on: Monday, 29 June 2009, 16:48 CDT

CHICAGO, June 29 /PRNewswire-FirstCall/ -- CME Group, the world's largest and most diverse derivatives exchange, today announced the launch of its new sulfur dioxide (SO2) emission 25-allowance futures and options contracts. The futures contract will be available for clearing through CME ClearPort(R), a set of flexible clearing services open to over the counter (OTC) market participants to substantially mitigate counterparty risk and provide capital efficiencies across asset classes, beginning July 12 for trade date July 13. The futures contract will also be available for trading through CME ClearPort. The options contract will be available for trading on the New York trading floor beginning on July 13 for trade date July 14. These contracts are listed by NYMEX and are subject to NYMEX rules and regulations.

The commodity codes for the vintages of the futures contracts will be: current vintage or earlier (SNV); vintage 2010 (V10); vintage 2011 (V11); vintage 2012 (V12); vintage 2013 (V13); vintage 2014 (V14); vintage 2015 (V15); vintage 2016 (V16); vintage 2017 (V17); vintage 2018 (V18); vintage 2019 (V19); and vintage 2020 (V20). The new options contract commodity code will be S2.

The Environmental Protection Agency's (EPA) Clean Air Act Amendments of 1990 set a goal of reducing annual sulfur dioxide emissions. Reductions in SO2 emissions are facilitated through a market-based cap and trade system -- the centerpiece of the EPA's Acid Rain Program. The new sulfur dioxide contracts will allow more flexibility in trading attributable to the vintage mechanism of this product. Compliance emitters under the EPA's Program can now have physically delivered previous vintage SO2 certificates for compliance purposes.

The contracts will be 25 SO2 emission allowance units in size with a minimum price fluctuation of $0.10 per SO2 emission allowance ($2.50 per contract). The first listed month will be the August 2009 contract. Contracts without a specified vintage year will be listed for 36 consecutive months. Contracts with a specified vintage year will be listed for two front months and two front Decembers.

The unit size and termination date differentiate these contracts from the existing SO2 emission allowance futures and option contracts, which will continue to be available for trading.

It is intended that these products will be listed for trading as part of the Green Exchange venture once that venture has sought and achieved appropriate regulatory status. The Green Exchange venture will be working with U.S. and European regulators and intends to seek recognition in the U.S. as a designated contract market and approval from the FSA in the U.K. CME Group is one of the founding members of Green Exchange Holdings LLC.

For more information, please visit www.cmegroup.com.

CME Group (www.cmegroup.com) is the world's largest and most diverse derivatives exchange. Building on the heritage of CME, CBOT and NYMEX, CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on trading floors in Chicago and New York. By acting as the buyer to every seller and the seller to every buyer, CME Clearing virtually eliminates counterparty credit risk. CME Clearing also offers financial safeguards to help mitigate systemic risk, providing the security and confidence market participants need to operate, invest and grow. CME Group offers the widest range of benchmark products available across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, and alternative investment products such as weather and real estate. CME Group is listed on NASDAQ under the symbol "CME."

The Globe logo, CME, Chicago Mercantile Exchange, CME Group, Globex, E-mini and CME ClearPort are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago. NYMEX and New York Mercantile Exchange are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners. Further information about CME Group and its products can be found at www.cmegroup.com.

CME-G

SOURCE CME Group

Source: PR Newswire

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