Ch25 Trading Conditions

Ch25 Delivery Procedures

2536.01 Standards - The contract grade for delivery on futures contracts made under these
regulations shall be U.S. Treasury RNotes which have an original time to maturity of not more than &-five
years three months and which have a remaining ti ime. ‘0 maturity of not less than four years and-two

months-as-defined-below. Fe-be-det a th the-not ae by th
. t-day-of trading in-th f thAdl_-not boends-delivered. "
tract t-be-of th: i For the purpose of determining contract gradesettiement, “the the

time to maturity of a given issue is calculated in complete one-month increments (ke.g., 4 years_—5
months_—arnd-14 days is taken to be 4 years_—and-5 months) from the first day of the delivery

monthcontract delivery month. U.S. Treasury Notes deliverable against futures contracts under these
regulations must have fixed semi-annual coupon payments.

The-price-at-which-a-nete-with- this-time-t turity-andwith-th sp ti thi iL yield
6%- ding-to-bond-tabl -by-the-Fi | Rublishing-Co-of Boston IM: itiptied-b:

7 '¢ Prep: g-Go- 7 7 i ¥
the-setth tprice-t ive-at-th twhich-the-short ices the long.

New issues of U.S. Treasury Notes that satisfy the standards in this regulation shall be added to the
deliverable grade as they are issued. If, by auctioning a note that meets the standards of this chapter, the
U.S. Treasury Department re-opens an existing Treasury issue that does not otherwise meet _the
standards of this chapter, such that the existing issue’s payment dates and amounts are indistinguishable
from the newly auctioned issue's payment dates and amounts, then the older issue shail also be deemed
to meet the standards of this chapter and shall be deliverable.

AllU.S. Treasury Notes delivered against a futures contract must be of the same Note issue. The amount
at which the short Clearing Member invoices the long Clearing Member for delivery of said Note against a
futures contract shall be determined by multiplying:

(a) the contract settlement price, quoted in points and halves of one thirty-second (1/32) of one
point _(Requlation 2506.01), on the day that the short Clearing Member gives the Clearing
Services Provider notice of intention to deliver (Requlation 2542.01), and

(b) the price at which a note with the same time to maturity as said Note (or same time to first call
if said Note is callable), and the same coupon rate as said Note, and with par value of one (1), will
ield 6% according to bond tables prepared by the Financial Publishing Co. of Boston, Mass., and

(c) the contract size of $1,000 per price point (Regulation 2506.01).

Interest accrued _on said Note shall be charged to the long Clearing Member by the short Clearing
Member in accordance with Department of the Treasury Circular 300, Subpart P.

Notwithstanding the foregoing, the Exchange shall have the right to exclude any new issue from
deliverable status or to further limit outstanding issues from deliverable status.

Interest <-en-the-netes-shall-be-charged te the long by the short rdance-with Department of
thet y- Circular 300, Subpart R.

New-iest i4U.STreasunyNet hich-satisfy the standards inthis -regulati hall-be-addedte-th
det o d they died +h " a te-which-will: + the-standards-of thi
hapterthe Ti ” p tings th dering the-existing4+ indisti hable-trom
th ly-auctioned -the-olderi a d-to-meetthe standards-otthis-chapt d- 4d-b:
del ble—The-Exehange-shall the-rightte-exclud vi f deliverable-stat ts
further imitoutetanding 4 fromdel ble-status (03/04/00)

2542.01 Deliveries on Futures Contracts - Delivery against a Medium Term Treasury Note futures
contract that is deliverable in the contract's named month of expiration shall be by book-entry transfer
between accounts of Clearing Members at qualified banks (Regulation 2580.01) in accordance with
Department of Treasury Circular 300, Subpart O: Book-Entry Procedure. Delivery must be made no later



Member's bank, account number and specific Federal Wire instructions for the transfer of U.S. Treasury

securities. 40/04/94)

2550.00 Duties of Members - (See Rule 1050.00)-449/04/94)

2550.01 Failure to Deliver - (See Regulation 1050.01)-494+/04+/04)

2551.01 Office Deliveries Prohibited - (See Regulation 1051.01)-440/04/94)

2554.00 Failure to Accept Delivery - (See Rule 1054.00)-(40/04/04)

2554.01 Failure to Accept Delivery - (See Regulation 1054.01)

194104404)

Ch25 Regularity of Banks

2580.01 Banks - For purposes of these regulations relating to trading in Medium Term U-S-Treasury

Naote futures, the word "Bank" (Regulation 2542.01) shall mean a U.S. commercial bank (either Federal
or State charter) that is a member of the Federal Reserve System and_that has -with-capital (capital,
surplus, and undivided earnings) in excess of one hundred million dollars ($100,000,000).440/04/94}



Ch25 Trading Conditions

intermonth spreads, for which the minimum price fluctuation shall be one-fourth of one thirty-second of
one point (or $7.8125 per contract). Contracts shail not be made on any other price basis.

Mini price-fluctuations-shall-be- stip! f halt-of thirty d-(4/32} point per-t00
ie 5 rounded: to-thi +4 tract} t-forint th mn Hi
pointe4$45.62! iP Gp 1p ‘i °
“aiemuine sath fl i i 400-point
mini price-fluctuati hali-b: tiples-of fourth_ot thirty va pel
($7.8425-p: tract)Rarshallb the-b: £-400-points-Centracts-shall net be- mad seoth

2507.01 Hours of Trading - The hours of trading for Medium Term future-deliveryin-L-S—-Treasury
Note_futures shall be determined by the Exchangethe-Beard. On the last day of trading in an expiring
contractfuture, the closing time for such contractfuture shall be +2:00-noon Chicago time subject to the
provisions of the second paragraph of Rule 1007.00, The market shall be opened and closed for all

months simultaneously or in such other manner as the_Exchange-Reguwatery-Compt Ht
shall direct.40/04+494}
2509. 01 Last Day of Trading ~ Ne-trad ira SH Note fut deliverabh

a d-The last day of
trading | in_an expiring Medium Term Treasury Note futures contract shall be the last business day of the
contract's named month of expiration (Requlation 2546.01). aAny contracts remaining open after trading
in such contracts has ceased must be settled by delivery as provided in Regulation 2509.02-aftertradiag
ip-such contracts has ceased 4604-04:

2509.02 Liquidation after Trading has Ceasedin-the-Last S Days -of-the Delivery Month -
After trading in expiring contracts for—fut deli thi 4—delwery #h-has ceased in
accordance with Regulation 2509.014-of this-chapter, an an_outstanding contracts may be liquidated by the
delivery of book-entry U.S. Treasury Notes (Regulation 2542.01), or by mutual agreement by means of a
bona fide exchange of such expiring contracts eurrentfutures—for actual U.S. Treasury Notes or
comparable instruments, or by mutual agreement by means of a bona fide exchange of such expiring
contracts_currentfutures-for, or in connection with, a swap transaction (per-Regulation 444.04). Such
exchanges must, in any event, be made no later than noon Chicago time on the business day
immediately following the last day of trading in the Senin contract _(Requiation 2509.01).the—fifth
b ramediate ag the 03/04/04

2510.01 Margin Requirements - (See Regulation 431.03)-(40/04/94)


Ch25 Trading Conditions

than the last business day of the contract delivery month, as defined in Requiation 2546.01. Notice of
intention to deliver shall be given by the short Clearing Member to the Clearing Services Provider by 8:00
p.m. Chicago time, or by such other time designated by the Exchange, on the second business day
preceding delivery day.

On delivery day, the short Clearing Member must have contract grade U.S. Treasury Notes in place at his
bank, in delivery form that is acceptable to his bank, by 10:00 a.m. Chicago time, or by such other time
designated by the Exchange. The short Clearing Member must notify his bank (Regulation 2580.01) to
transfer contract grade U.S. Treasury Notes by book-entry to the long Clearing Member's account at the
long Clearing Member's bank on a delivery versus payment basis. That is, payment shall _not be made
until the notes are delivered.

On delivery day, the long Clearing Member must make funds available by 7:30 a.m. Chicago time, or by
such other time designated by the Exchange. The long Clearing Member must_notify his bank
(Regulation 2580.01) to accept contract grade U.S. Treasury Notes and to remit federal funds to the short
Clearing Member's account at the short Clearing Member's bank (Regulation 2580.01) in payment for
delivery of the notes. In the event the long Clearing Member does not agree with the terms of the invoice
received from the short Clearing Member, the long Clearing Member must notify the short Clearing
Member, and the dispute must be settled by 9:30 a.m. Chicago time, or by such other time designated b
the Exchange, on delivery day.

Qn delivery day, contract grade U.S. Treasury Notes must be transferred and payment must be made
before 1:00 p.m. Chicago time, or by such other time designated by the Exchange.

All_deliveries must be assigned by the Clearing Services Provider. Where a futures commission
merchant, as a Clearing Member, has an interest both long and short for customers on its own books, it
must tender to the Clearing Services Provider such notices of intention to deliver as it receives from its
customers who are short.

Deliveries-againet_medium US y-Note-fut tracts-shall_be-by_beek-entrytranst
bety ts—of- Clearing-Merab: +-qualified-banks—Regulation-2580.04 A ith
ig 4 {Reg Oty
Departmentott: Circular 300-Subpart-O-Boek-Entay Procedure-De! tb ey Jat
P ¥ Subp. > ¥
than_the-last- business—day_of the-menth—_Netice-cf intention te deli fos) g
Ss. Provider-by-8:00- {Chi time}-or-b: -other-time-d thi
ye sa, 8 Ss
end 4 ading-dal daytath {the-long- Cl ith
HP ' Yay: is g
thet thy ived-from-the-shert-C} g-Member_the- Jong Clearing Memb: t-notif
the-shor-Ch Merber—and-the-disput +-be-settled-by-9:30- (Chicago-tim: by-such-oth
time-d ted-by the-Exch del day—The-short-Cl Memb: +h tract-grad:
Y ger Yay $
UST tes-at-his-bank table-tte-his-bank}-del form-by-40:00- {Shi time)
“S- ¥ P ¥ ¥410-00-a4- 3g 5
b b_other-time-designated-by_the Exch: n-delivern,day—The-shert-Clearing Memb: t notify
¥ 1gA ¥ ger ¥ aay: Ag ¥
his-bank-(Regulation 2580.04} to transfer contract-grade-.S TF y-Retes-by_beok-entry-te-thetong
Clearing Member! a del +-basis That ic_payment-shall net b de-until
s ¥ Pi 7 7 pay
the-net delivered—On-deli day—thetong-Ch Memb +-pake-fund: ilable-by-7:30
3 yay, g g mm
Chi fi h-othertime-designated_by_the-Exch: d_netify-his_bank-(Reguiati
aie g G ig y ge; ¥ g
2580.04}-t +-centract-grade-d-S—Fi 1: tt + federal funde_te-the-shert-Cl
“Oy P Sh “S- ¥ 'g
Member! {-at-the-short-Clearing-Member's_-bank (Regulation 2580.04} in-p: nt-for-deli f
g g FOF HA-pay ¥
the-netes—Centract-grade-S—T ° t-be-transferred_and-_payment-mustb de-bek
4:00. (Chi tire), h-other_time-designated-by_the-Exch: deli day—Ai-del
00 pA g Hr ¥ Se; y-day-
tb d-by-the-Ch g R, Whi futur rarnission-merchant 1 g
member interest-bothtong-and-sher-t " it beok +_-tenderto-th:
Cleari ices-Rrovid 4-notices-of-intention-to-deliv it fi 4 A

2542.02 Wire Failure - In the event that delivery cannot be accomplished because of a failure of the
Federal Reserve wire, or because of a failure of access to the Federal Reserve wire on the part of either
the long Clearing Member's bank or the short Clearing Member's bank, delivery shall be made before
9:30 a.m. Chicago time on the next business day on which the Federal Reserve wire is operable. Interest

shall accrue to the long Clearing Member, and shall be paid by the short Clearing Member, beginning on
the day on which the notes were to be originally delivered.



November 9, 2005

Ms. Jean A. Webb

Secretary

Commodity Futures Trading Commission
Three Lafayette Center

1155 21* Street, N.W.

Washington, D.C. 20581

Yh e

GP
N
foo)

Reference File #2597.01
Rule Certification

Dear Ms. Webb:

Pursuant to Commission Regulation 40.6(a), the Chicago Board of Trade (CBOT®) hereby
submits the following:

- Revisions to regulations in CBOT Rulebook Chapter 25, which set forth contract

specifications for Medium Term (5 Year) Treasury Note futures, per the attached
text (additions underlined; deletions struck through).

These revisions were prompted by a recent U.S. Treasury Department announcement that its
auction schedule for new 5-year notes will be modified, beginning in February 2006, to occur at
month end rather than mid-month. Under the revised CBOT regulations, 5-year notes auctioned
and issued during the delivery month of an expiring Medium Term Treasury Note futures

contract will continue to be deliverable into the expiring contract. Specifically, under revised
Regulations 2509.01 and 2546.01:

- The last trading day in an expiring contract will be extended, from the eighth-to-last
business day of the delivery month, to the last business day of the delivery month;

- The last intention day for delivery will be the business day following last trading day; and
- The last delivery day will be the third business day following last trading day.

Other Chapter 25 regulation changes have been made for conformity with the above and also
include non-material amendments made for purposes of clarity and simplicity.



Ch25 Trading Conditions

jnth {that delivery-cannot-be-accamplished-b f-a-fail £ the Federal-R:

b f-a-failure-of-sither the_long-Clearing_-Member's_bank-or-the-short-Clearing-Member's-bank
tothe Federal Ri iro-deli Ral-b de-befere-9:30-am-on-th + busi 3
hich-the-FederalR: blo-tnterest shalt to-thet id-by-the-short beginni

1p 7 ie a GR AHAg
the-day-atwhich th % to-bs inally-del J.
yy originally :

In the event of such failure, both the long Clearing Member and the short Clearing Member must provide
documented evidence that the instructions were given to their respective banks in accordance with
Regulations 2542.01 and 2549.04 and that all other provisions of Regulations of 2542.01 and 2549.04
have been complied with.{40/04+/04}

2546.01 Date of Delivery - Delivery of contract grade medivm—tern-U.S. Treasury Notes may be
made by the short upon any permissible delivery day of the detivery-monthcontract delivery month the
short may select. The contract delivery month shail be defined so as to extend to, and to include, the third

business day following the last day of trading of the contract's named month of expiration. Delivery of
medium-ters-contract grade U.S. Treasury Notes must be made no later than the last business day of the
contract delivery atmonth, so defined. -+40/04/94)

2547.01 Delivery Notices - (See Regulation 1047.01)-440/04/04)

2548.01 Method of Delivery - (See Regulation 1048.01)-49/04/94)

2549.00 Time of Delivery, Payment, Form of Delivery Notice - (See Rule 1049,00)-440/04/94)
2549.02 Buyer's Report of Eligibility to Receive Delivery - (See Regulation 1049.02)-440/04/94)
2

2549.03 Seller's Invoice to Buyers - Upon determining the buyers obligated to accept deliveries
tendered by issuers of delivery notices, the Clearing Services Provider shall promptly furnish each issuer
the name(s) of the buyer(s) obligated to accept delivery from him, and shall promptly furnish to each such
buyer a description of each commodity tendered by said issuerh HGR igned-bythe Clearl

buyer. Thereupon, sellers (issuers of delivery notices) shall prepare
invoices addressed to ner assigned buyers, describing the documents to be delivered to each such
buyer. Such invoices shall show the amount which buyers must pay to sellers in settlement of the actual
deliveries, based on the delivery prices established by the Clearing Services Provider, and adjusted for
applicable interest payments_(Requlation 2536.01). Such invoices shall be delivered to the Clearing
Services Provider by 2:00 p.m._Chicago time, or by such other time designated by the Exchange, on the
business day immediately preceding delivery day, day-eHintertien except as regards deliveries on the last
business day of the contract delivery month. Invoices for delivery on the last business intention-day of the
contract delivery month, as defined in Requlation 2546.01, where-suchinveices-shall be delivered to the
Clearing Services Provider by 3:00 p.m., or by such other time designated by the Exchange, on the
business day immediately preceding the last delivery day._-Upon receipt of such invoices, the Clearing
Services Provider shall promptly make them available to buyers to whom they are addressed.—(O+/04/04}

2549.04 Payment - Payment shall be made in federal funds. The long Clearing Member obligated to
take delivery must take delivery and make payment before 1:00 p.m. on the day of delivery, or by such
other time designated by the Exchange, except on banking holidays when delivery must be taken and
payment made before 9:30 a.m., or by such other time designated by the Exchange, on the next banking
business day. Adjustments for differences between contract prices and delivery prices established by the
Clearing Services Provider shall be made with the Clearing Services Provider in accordance with its rules,
policies and procedures.04/04/04}

2549.05 Buyers Banking Notification - The long Clearing Member shall provide the short Clearing
raMember with a Banking Notification by 4:00 p.m. Chicago time{$:00-p.m-EST)-on-the-day- ofintentiono.
one business day prior to delivery day,-with-a-Banking-Notification. The Banking Notification form will
include the following information: the identification number and name of the long Clearing Member; the
delivery date; the notification number of the delivery assignment; the identification number and name of
the short Clearing Member making delivery; the quantity of the contract being delivered; the long Clearing


November 9, 2005
Ms. Jean A. Webb
Page Two

The Exchange intends to implement these amendments for newly-listed contract months,
beginning with June 2006 and forward, as of the business day following the Commission’s
receipt of this filing. Concurrently with this implementation and the public announcement
thereof, the Exchange also intends to reinstate trading authorization for the Medium Term
Treasury Note contracts that were delisted temporarily as of November 3, 2005 (i.e., June,
September and December 2006 futures and June 2006 options).

There were no opposing views among the CBOT Board of Directors concerning these
amendments.

The CBOT certifies that these amendments comply with the Commodity Exchange Act and the
tules thereunder.

Sincerely,

Paul J. Draths
Vice President and Secretary

B110905


Chapter 25
Medium Term U-S-Treasury Note Futures Year}

Ch25 Trading Conditions

2501.00 Authority - Trading in Medium Term Treasury Note futures may be conducted under such
terms and conditions as may be prescribed by regulation

2502.01 Application of Regulations - Trading in Medium Term Treasury Note futures shall_be
subject to the general rules of the Exchange as far as applicable and shall_also_be subject to_the
fegulations contained in this chapter, which are exclusively applicable to trading in Medium Term
Treasury Note futures. Medium Term Treasury Note futures are listed for trading by the Exchange
pursuant to Commodity Futures Trading Commission exchange certification procedures.

Futures-transacti diuraterea-L.S—T Net hall-b bjectto-the-g Jeu £-thi
Exeh: fi licable-and-shallalse-be-sublectto-thi lati tained-in-this-chapt hich
i) PAH 2) :) PROF,
lusivel ligableto-trading-i dine ust Not 04/04405)

PP ' os 7

2503.01 Emergencies, Acts of God, Acts of Government - If the delivery or acceptance or any
precondition or requirement of either, is prevented by strike, fire, accident, act of government, act of God
or other emergency, the seller or buyer shall immediately notify the Chairman. If the Chairman determines
that emergency action may be necessary, he shall call a special meeting of the Board and arrange for the
presentation of evidence respecting the emergency condition. If the Board determines that an emergency
exists, it shall take such action under Rule 180.00 as it deems necessary under the circumstances, and
its decision shall be binding upon all parties to the contract. For example, and without limiting the Board's
power, it may extend delivery dates and designate alternative delivery points in the event of conditions
interfering with the normal operations of approved facilities.

In the event the Board determines that there exists a shortage of deliverable U.S. Treasury Notes, it may,
uper-atwo-thirds-yete-under Rule 180.00, take such action as may in the Board's sole discretion appear
necessary to prevent, correct or alleviate the condition. Without limiting the foregoing or the authority of
the Board under Rule 180.00, the Board may:

(1) | designate as deliverable, —U.S. Treasury Bonds that otherwise meeting the specifications and
requirements stated in this chapter;

(2) designate as deliverable one or more issues of U.S. Treasury Notes and/or U.S. Treasury Bonds that
haveing remaining time to maturityies shorter than four years and two months_,-or longer than five
years and threewe months, and that otherwise meeting the specifications and requirements stated in

this chapter.
(3) determine a cash settlement based on the current cash-valie of a6%-coupon-tatefive year U.S.
Fy Note, determined: iAg—th t-cash market yield curve for U.S. Treasury

¥ ¥ is
securities on the last day of trading 93/04/00)

2504.01 Unit of Trading - The unit of trading shall be U.nited-S.tates Treasury Notes having a-face
value at maturity of one hundred thousand dollars ($100,000) or multiples thereof.40/04/94)

2505.01 Months Traded In - Trading in Medium_-Term U-S—Treasury Naotes futures may be
scheduled in such months as determined by the Exchange.(93/0+/90)

2506.01 Price Basls - The price of a Medium Term Treasury Note futures contract shall be quoted in
points. Par shall be on the basis_of 100 points. One point shall equal $1,000.00. The minimum price
fluctuation shall be one half of one thirty-second (1/32) of one point (or $15.625 per contract) except for