The application, jointly developed by the two exchanges, will create an innovative structured financial product that will allow investors, for the first time in the U.S. markets, to trade securities linked to the value of a commodity index. The provisional patent application was filed July 3, 2002.

The product structure, which shares certain characteristics with an exchange traded fund (ETF) differs in several respects from the recent series of commodity ETFs that are currently in the regulatory approval processes, or are being listed on exchanges. For example, in the NYMEX/PHLX product structure, an investor can participate in the price changes in the price movement of a wide range of financial, non-financial and physical commodities, such as crude oil and soybeans without having to actually participate in the physical market itself. This key feature limits the individual investor's exposure to the amount of their initial investment. A further benefit is the product's tax efficient structure. Based on the exchanges' collaborative research and work, the partners are confident that this proprietary method of securitizing a broad range of commodities is the best and only approach available under the current securities and commodities market structure.

"This new product is the culmination of four years of work and it will expand the opportunities for investors and offers several advantages over the increasing number of ETF products in the markets," said Meyer "Sandy" Frucher, chairman and CEO of the PHLX. "Our joint venture with NYMEX represents the initial thrust of a more extensive new product development effort we are launching in Philadelphia, which we will build on in the coming months, leveraging our existing intellectual property and debuting totally new financial vehicles for the investing public."

NYMEX Chairman Mitchell Steinhause said: "The design and approval process for this product has been a substantial investment for NYMEX and PHLX, and we are pleased that a patent application for protecting our proprietary innovations is now in the examination process by the Patent Office."