September 20, 2006

Ms. Eileen A. Donovan .
Acting Secretary _
Commodity Futures Trading Commission
Three Lafayette Center

1155 21" Street, N.W.

Washington, D.C. 20581

Reference File # 2721.01
Rule Certification
Dear Ms. Donovan:

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

- Amendments to Regulation 2036.01 per the attached text (additions underlined;
deletions struck through).

Regulation 2036.01 specifies standards for CBOT Binary Options on the Target Fed Funds Rate.
The referenced revisions will change the latest possible time for obtaining the applicable Target
Fed Funds Rate at expiration from 6:00 p.m. to 5:00 p.m. (Eastern time). This is an operational
change to facilitate the final settlement process.

The CBOT intends to implement these amendments for all newly listed Fed Binary Options
contract months beginning with March 2007.

There were no opposing views concerning these amendments.

The CBOT certifies that these amendments conform with the Commodity Exchange Act and the
rules thereunder.

Sincerely,

Paul J. Draths
Vice President and Secretary

b091906


Additions are boldface and underlined. Deletions are boldface and struck through.

Ch 20 Expiration Procedures

2036.01 Standards -The contract grade for a Binary Option on the Fed shall be the following
Contract Grade Index

100 minus r
where r is the Target Federal Funds Rate.

For any arbitrary date, the Target Federal Funds Rate shall be as determined at the latest meeting of the
FOMC and as most recently published by the Board of Governors of the Federal Reserve.

Example: If the Target Federal Funds Rate established at the latest meeting of the FOMC is
8.25%, the Contract Grade Index will represent this rate as ninety-one and three-quarters (91.75)
Contract Grade Index points.

Such “latest meeting of the FOMC” is not required to be a regularly scheduled meeting of the FOMC, as
defined in Regulation 2005.01

Notwithstanding the foregoing, the Contract Grade Index shall not take any value less than zero (0.00)
Index points nor any value exceeding one hundred (100.00) Index points.

Hereafter in this chapter the outcome applicable to an expiring Binary Option shall be defined as the
Contract Grade Index representation of the latest Target Federal Funds Rate to have been announced by
the Board of Governors of the Federal Reserve prior to 6:00-p4n—Easterntime 5:00 p.m. Eastern time
on the last day of trading in said Binary Option (Regulation 2009.01).

If, on the last day of trading in an expiring Binary Option, the Board of Governors of the Federal
Reserve has failed to publish prior to 6:00-p.n—Eastern-time 5:00 p.m. Eastern time the Target
Federal Funds Rate as determined at the latest meeting of the FOMC, then the outcome
applicable to such expiring Binary Option shall be based upon such determination of the Target
Federal Funds Rate as published by the Federal Reserve Bank of New York.

If, on the last day of trading in an expiring Binary Option, neither the Board of Governors of the
Federal Reserve nor the Federal Reserve Bank of New York has published prior to 6:00-p.m-
Eastern-time 5:00 p.m. Eastern time the Target Federal Funds Rate as determined at the latest
meeting of the FOMC, then the outcome applicable to such expiring Binary Option shall be based
upon such determination of the Target Federal Funds Rate as published by any Federal Reserve
District Bank.

If, on the last day of trading in an expiring Binary Option, neither the Board of Governors of the
Federal Reserve nor any Federal Reserve District Bank has published prior to 6:00-p.m-—Eastern
time 5:00 p.m. Eastern time the Target Federal Funds Rate as determined at the latest meeting
of the FOMC, then the Exchange shall defer computation of the outcome applicable to such
expiring Binary Option, and shall defer the corresponding liquidation of outstanding option
contracts, until 6:00-p.n—asterntime 5:00 p.m. Eastern time on the third business day
following the scheduled last day of trading in the expiring Binary Option.

In the event that computation of the outcome applicable to an expiring Binary Option, and the liquidation
of such outstanding option contracts, is deferred, then such deferred outcome shall be based upon a
determination of the Target Federal Funds Rate, as published between the last day of trading in the


expiring options and 6:00—p.m—asterntime 5:00 p.m. Eastern time on the third business day
thereafter:

Such deferred outcome shall be based upon the Target Federal Funds Rate as published by the
Board of Governors of the Federal Reserve during the three-business-day interval defined in the previous
paragraph.

In the absence of such publication by the Board of Governors of the Federal Reserve, the
deferred outcome shall be based upon the Target Federal Funds Rate as published by the Federal
Reserve Bank of New York during the previously defined three-business-day interval.

In the absence of such publication by either the Board of Governors of the Federal Reserve or the
Federal Reserve Bank of New York, the deferred outcome shall be based upon the Target Federal Funds
Rate as published by any Federal Reserve District Bank during the previously defined three-business-day
interval,

In the absence of such publication by either the Board of Governors of the Federal Reserve of
any Federal Reserve District Bank, the deferred outcome shall be based upon the Target Federal Funds
Rate as published in The Wall Street Journal (Central Edition) during the previously defined three-
business-day interval

In the absence of such publication by the Board of Governors of the Federal Reserve, or ay
Federal Reserve District Bank, or The Wall Street Journal (Central Edition) during the previously defined
three-business-day interval, then the deferred outcome shall be based upon the Target Federal Funds
Rate as published for the meeting of the FOMC that immediately preceded the latest meeting of the
FOMC.