cmeé

Chicago Mercantile Exchange

20 South Wacker Drive
Chicago, IL 60606-7499
www.cme.com

October 27, 2005

Ms. Jean A. Webb

Office of the Secretariat

Commodity Futures Trading Commission
Three Lafayette Centre

1155 21" Street, NW

Washington, DC 20581

RE: CME Rules 400 and 402.B.13 and the Chapter 5 title
Submission No. 05-108

Dear Ms. Webb:

Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) hereby notifies the Commission that
effective October 26, 2005, the Exchange approved minor amendments to CME Rule 400 (“General
Provisions”), CME Rule 402.B.13. (“Business Conduct Committee — Hearings”) and the title of Chapter
5 (‘Trading Qualifications and Practices”). The change to Rule 400 codifies the applicability of
Exchange rules to individuals and entities that have agreed in writing to comply with Exchange rules,
for example participants in the Asian and European Incentive Plans. Rule 402.B.13. has been
amended to eliminate any ambiguity with respect to the Business Conduct Committee’s authority to
order a Member (as defined in Rule 400) to make restitution to the account of any party damaged by
such Member’s conduct. Lastly, the reference to floor privileges in the title of Chapter 5 has been
eliminated given that the rules in Chapter 5 are not limited to on-floor trading activity.

The text of the approved amendments are attached with additions underscored and deletions
overstruck.

The Exchange certifies that this regulatory advisory neither violates nor is inconsistent with any
provision of the Commodity Exchange Act or of the rules and regulations thereunder.
If you have any questions regarding this matter, please call me at (312) 648-5422.

Sincerely,

/S/ Stephen M. Szarmack
Director and Associate General Counsel

‘SMS/eInv5479 SUB 05-108.doc


400.

402.

GENERAL PROVISIONS

{The first paragraph is unchanged.)

For purposes of Chapter 4, the term "Member" shall mean: 1) individual members and clearing
members of the Exchange, including retired members with floor access privileges and individuals
and entities described in Rule 106; 2) associated persons ("APs") and affiliates of clearing
members of the Exchange (including, but not limited to, related parties of Rule 106.1. firms in regard
to their Exchange related business); 3) guaranteed introducing brokers of clearing members of the
Exchange, Exchange permit holders and any person or entity that has been granted cross-
exchange trading privileges;—and 4) employees, authorized representatives, contractors, and
agents of any of the above persons or entities, in regard to the Exchange related activities of such
employees and agents;_and 5) individuals and entities that have agreed in writing to comply with
the rules of the Exchange.

{The remainder of the rule is unchanged.}

BUSINESS CONDUCT COMMITTEE
[Section 402.A. is unchanged.]

402.B. Hearings

Hearings by the BCC shall be before a Panel, and shall be conducted by a chairman of the BCC in
accordance with the provisions of Rule 408.

If a Member is found guilty, by a majority vote, the Panel may do one or more of the following:
[1-12 are unchanged.]

13. Direct the Member to make restitution, in such amount as is warranted by the evidence, to the
account of any partythe-custemer damaged by the conduct, or to the Clearing Member who
has previously made restitution to the account of such partythe-customer.

The Panel may also find that the evidence warrants an adjustment to the account of a
partyeustomer where a Member, though not in violation of an Exchange rule, has not fulfilled
his or its responsibility for proper execution of such party’sa-customer order.

[The remainder of the rule is unchanged.]

CHAPTER 5
FLOOR PRIMILEGES— TRADING QUALIFICATIONS AND PRACTICES