: Such person shall provide, in a timely manner upon request by the Exchange.
information regarding the nature of the position, trading strategy, and hedging
information if applicable.

= Such person shall be deemed to have consented, when so ordered by the Exchange
acting in its discretion, not to further increase the positions which exceed the levels
specified in the chart below.

- Such positions must be initiated and liquidated in an orderly manner.

For purposes of this regulation, all positions in accounts for which a person, by power of
attorney or otherwise, directly or indirectly controls trading shall be included with the
positions held by such person. The provisions of this regulation shall apply to positions
held by two or more persons acting pursuant to an expressed or implied agreement or
understanding, the same as if the positions were held by a single person.

10-Year Municipal Note Index futures are subject to both the position accountability
requirements specified in this Regulation and the position limits specified in Regulation

425.01 and Appendix 4C.
Nothing herein shall limit the jurisdiction of the Exchange.

CONTRACT SPOT MONTH' _ ALL MONTHS OPTIONS?
US Treasury Bonds 10,000 10,000 25,000
Ten-Year US Treasury Notes 7,500 7,500 20,000
Five-Year US Treasury Notes 7,500 7,500 20,000
Two-Year US Treasury Notes 7,500 7,500 20,000
30-Day Fed Funds 3,000 3,000

10-Year Interest Rate Swap__ 5,000 5,000 15,000
5-Year Interest Rate Swap _ 5,000 5,000 15,000

444.01 Transfer Trades[;—Exchange—of—Futures—for—Physicals—and—Give-up
Fransactions] -

Transfer trades, or office trades, [are-defined-andtimited+te-trades]may be made upon the
books of a futures commission merchant, solely for the purposes of:

(a) transferring existing trades from one account to another [within—the—same
effice]carried by the same futures commission merchant where no change in

All numbers refer to futures contracts, and/or futures-equivalent contracts, net long or net short, in the
spot month.
? All numbers refer to futures contracts, and/or futures-equivalent contracts, net Jong or net short in all

months and strike prices combined. Net equivalent futures positions shall be determined in the same
manner specified in Appendix 4C.

> All numbers refer to option contracts for all months and all strike prices combined in each option category
(long call, long put, short call, and short put).



(b)

(©)

represent a substitute for positions to be taken at a later time in a physical marketing
channel, and where they are economically appropriate to the reduction of risks in the
conduct and management of a commercial enterprise, and where they arise from:

(1) The potential change in the value of assets which a person owns, [refines]
produces, manufactures, processes or merchandises or anticipates owning,
producing, manufacturing, processing[refining] or merchandising,

(2) The potential change in the value of liabilities which a person owes or
anticipates incurring, or

(3) The potential change in the value of services which a person provides,
purchases or anticipates providing or purchasing.

Notwithstanding the foregoing, no positions of a person shall be classified as bona
fide hedging unless their purpose is to offset price risks incidental to that person's
commercial cash or spot operations and such positions are established and liquidated
in an orderly manner in accordance with sound commercial practices and unless the
provisions of Regulation 425.03 have been satisfied.

Enumerated Hedging Positions. For purposes of Regulation 425.03, the definition of
bona fide or economically appropriate hedging positions in subsection (a) above
includes, but is not limited to, the following specific positions:

(1) Sales of any commodity for future delivery, purchases of any put options on
futures contracts and/or sales of any call options on futures contracts, which do
not exceed in quantity:

(i) | Ownership of the same cash commodity by the same person, and
(ii) Fixed-price purchases of the same cash commodity by the same person.

(2) Purchases of any commodity for future delivery, sales of any put options on
futures contracts and/or purchases of any call options on futures contracts,
which do not exceed in quantity:

(i) _ Fixed-price sales of the same cash commodity by the same person; and

(ii) The quantity equivalent of fixed-price sales of the cash products and
derivative products of such commodity by the same person.

(3) Sales and purchases of commodities for future delivery or of options on
contracts for future delivery described in subsections (b)(1) and (b)(2) may also
be offset by the same or other quantities of a different cash commodity,
provided that the fluctuations in the value of the position for future delivery or
of the commodity underlying the option [eentract-]position are substantially
related to the fluctuations in the value of the actual cash position.

Non-Enumerated Hedging Positions. The [Beard; €. Hee authorized-by th
Beard;]Exchange may recognize positions other than those enumerated in subsection
(b) as bona fide or economically appropriate hedging positions, in accordance with
the general definition of bona fide or economically appropriate hedging positions in
Regulation 425.02(a), upon the filing of a satisfactory initial statement in accordance
with Regulation 425.03. Such positions may include:



positions, or short_mini-sized Dow” futures ($5 multiplicr) positions against long
DJIATM futures positions, held in the same contract month and year and in the same
account in a ratio of 2 (two) mini-sized Dow ($5 multiplier) contracts to_1 (one)
DJIATM contract. The clearing member shall notify the Clearing Services Provider of
offsetting positions by submitting reports to the Clearing Services Provider in such form
and manner as the Clearing Services Provider shall specify. The positions being offset
shall be transferred to a holding account at the Clearing Services Provider and long and
short positions in the same contract month in the holding account will be netted, thus
reducing the number of open positions in such contract. (01/01/04)

444.03 Give-Up Transactions - The futures commission merchant ("executing FCM")
executing a trade_on behalf of another futures commission merchant (the "carrying
FCM") (including such carrying FCM's customers) must submit the trade to the Clearing
Services Provider for clearing, and remains responsible for the clearing and settlement of
such trade as prescribed by the Clearing Services Provider. Executing FCMs and carrying
FCMs must utilize an automated invoicing system for commission payments resulting
from. give-up transactions, as_determined by the Exchange. Notwithstanding the
foregoing, the executing FCM, carrying FCM _and, as applicable, the customer on the
account at the carrying FCM for which the trade is executed, may by agreement set out
their respective obligations and financial responsibility to one another relating to the
transfer of the trade.

[444.04——Exeh £ But: fe inc. +i ith —S¥ Transact

444.04 Exchange for Physical, Exchange for Swap, and Exchange for Risk

Transactions

(a) The following transactions may be executed outside of the Exchange’s central
markets, in accordance with the requirements of this Regulation.

qi) Exchanges of futures for, or in connection with, cash commodities
(“Exchange for Physical Transactions” or “EFPs”). EFPs may be
executed in all CBOT futures contracts.

Gi) __ Exchanges of futures for, or in connection with, swap transactions
(“Exchange for Swap Transactions” or EFSs”). EFSs may be executed
only in U.S. Treasury Bond Futures; Long Term, Medium Term, and



(hy

@

10)

benefit of any person other than the person placing the order{;].

[fera-memberte] No person shall execute any [erder] transaction on the Floor of the
Exchange after the closing bell [is-seunded] except in a call market close[;].

[for-amember+te] No person shall buy and sell as an accommodation at any time or,
except as specifically provided in Regulations [334-03,]331.04 and [350-40] 9B.13,
to use one order to fill another order, or any part thereof[;].

[fer parties] No party to an open auction transaction [te] shall fail to properly notify
the pit recorder of the price at which trades have been consummated{[;].

[fer-afleerbrekerte] No person shall allocate executions of orders in any manner
other than an equitable manner.

f

berto-initiate-durine th tradi
S

a

S
CROE-s59 CBOE-250-SteckInd

}
+ f tin-whiehh heh: interest forth tof

herfamilincladi ts—ehild: d: " dehild:
5 zy zy

ist 4 " h i and-in-k dt it $4

derfor—fatire-deli ; CBOE 59. CBOE-250-Steek—Inde:

boo te

5 Index
Thi trict hall net byt tr: ti de-by-th ber-t

425.01

(i)

tion- made-in-error by-the-samefleor member] (04/01/05)

Position Limits and Reportable Positions-

(a) Position Limits

Except as provided in Regulations 425.03, 425.04 and 425.05, no person

(i)

may own or control positions, and no member firm may carry positions for
another person, separately or in combination, net long or net short, for the
purchase or sale of commodity futures contracts or, on a futures-
equivalent basis, options on a commodity futures contract, in excess of
those positions set forth in the position limit chart in Appendix 4C._The
position limits set forth in Appendix 4C shall not apply to bona fide or
economically appropriate hedging positions which meet the requirements
of Regulations 425.02 and 425.03, nor to positions subject to particular
limits granted pursuant to Regulation 425.04. As used herein, the term
“net" shall mean the long or short position held after offsetting long
futures positions against short futures positions. The word "person" shall
include individuals, associations, partnerships, limited liability companies.

corporations and trusts.

In determining whether any person has exceeded the position limits

specified in Appendix 4C or those limits determined pursuant to
Regulations 425.03 or 425.04, or whether a position is a reportable
position as defined herein, all positions in accounts for which such person
by power of attorney or otherwise directly or indirectly holds positions or
controls trading, except as provided in Regulation 425.05, shall be



ownership is involved; [er]

(b) transferring existing trades from [the-effiee-efJan account carried by one futures
commission merchant to [the-effiee—efjan_account carried by another futures
commission merchant where no change in ownership is involved, provided that no
such transfer may be made for the purpose of evading and avoiding delivery on
such trades, and provided further, that if such transfer is made after receipt from
the Clearing Services Provider of a notice of intention to deliver applicable to
such trades, then the notice of intention to deliver must be passed through the
Clearing Services Provider along with the trades so transferred, and the Clearing
Services Provider shall thereupon pass the notice of intention to deliver to the
futures_commission merchant [te-¥hem]carrying the account to which such
transfer has been made and delivery shall be taken by such_futures commission
merchant.; All such transfer_trades shall be designatcd as such and must_be
cleared through the Exchange’s Clearing Services Provider_in the manner
provided by the Clearing Services Provider; [er;]

(c) exchanging futures for, _or in connection with cash commodities, swap
transactions, or _over-the-counter__derivative transactions, _as__ specified _in

Regulation 444.04[-er+ Hen sitheash ditto tions]; [or-]
[(4}H ex har in fat: £¢ 5 ; +4, ith; +; S ti, s+ aert thy

Fradetransacti derResulati 34.05-0F]

(c)___correcting errors on cleared_trades, provided that the original trade record
confirms the error, and such transfers are identified in the manner required by the
Exchange’s Clearing Services Provider; or

(f) transferring trades executed on behalf of another futures commission merchant
from the account of the executing futures commission merchant to the account of
the other futures commission merchant_or_its customer where no change of
ownership is involved_(‘“give-up transactions”), provided that such give-up

transactions are identified in the manner equired by the Clearing Services
Provider[the-speeial-cleart di ignated by the Beard-of Director

hhas-beon-used to identify these transfers].

The Business Conduct Committee ("BCC"), or designated staff pursuant to delegated
authority, may, in its discretion, upon written request, exempt a transfer trade from the
requirements of this [previsien] Regulation provided[img] that the transfer trade is made
for the purpose of combining the positions held by two or more commodity pools which



[444.06—Exeh f Acricultaral Cy dit-Eut: Eor-Or in C tion With OFC
Tq; ti A h f fat fe i ti ith. the- +t

{OFC} derivative action(an-EFR-4 action) ists—ef_tye—diserete—but
€ t € t

¢ . 4 :
nents —pi y ¥y rf

Commission-(04/01/05)]

500.00 Inequitable Proceedings - It shall be an offense against the Exchange to violate
any Rule or Regulation of the Exchange or any policy, Rule or Regulation of the Clearing
Services Provider to which CBOT Clearing Members are subject pursuant to a Clearing
Services Agreement between the Exchange and such Clearing Services Provider, regulating
the conduct or business of members or other persons within the jurisdiction of the
Exchange, or any agreement made with the Exchange, or to engage in fraud, dishonorable
or dishonest conduct, or in conduct or proceedings inconsistent with just and equitable
principles of trade, or make default relating to the delivery of contracts traded for future

delivery [(anless-such-defaultwassinintentiona].

502.00 [Demoralizatien-of] Market Manipulation — Any manipulation of prices of, or
any attempt to manipulate or corner the market in, any commodity, security, or futures or
options contract is prohibited. Purchases or sales of commodities, [er] securities, or
futures or options contracts, or offers to purchase or sell commodities, [or] securities, or
futures or options contracts, [made] for the purpose of upsetting the equilibrium of the
market [and-bringing about] or creating a condition [of demeralization] in which prices
do not or will not [faily] reflect fair market values, are [ferbidden] prohibited, and any
[member] person who makes or assists in making such purchase or sale or offers to
purchase or sell with knowledge of the purpose thereof, or who, with such knowledge
[shall-be-a-partyte] assists in carrying out any plan or scheme for the making of such
purchases or sales or offers to purchase or sell, shall be deemed to [be-guity-ef] have
engaged in an act inconsistent with just and equitable principles of trade and an act
detrimental to the interest or welfare of the Exchange.

505.00 [Commedity—Exehange—Aet] Adherence to Law - All members and



shall retain the original trade date of the positions. Additionally, those transfers
involving a debtor, as defined by and in accordance with Regulation 272.02, shall retain
the original trade date for purposes of delivery but shall be entered on the books of the
transferee at the settlement price on the day of the transfer.

[dr-addition,each-party] The parties to transfer trade transactions shall [fle-with]provide
to the Clearing Services Provider all information with respect to such transactions as shall

be required by the Clearing Services Provider, in the form and manner required by the

Clearing Services Provider. [a-memerandum-stating the nature-of the transaction, whether
thet +} 4;

lted-: h £ hipn—the-kind_and tity-of-eash

Y
t ti d-th: h-to-th: 4 that ived-the-fat positi +t

the-t tion-to-the-Clearing Services Provider(03/0104)]

444.02 Transfer Trades for the Purpose of Offsetting mini-sized DowTM Futures ($5
multiplier) and CBOT® Dow Jones Industrial Average’ (DJIATM) Futures _- With
the consent of the account controller, a clearing member may offset_and liquidate long
mini-sized_Dow*TM futures ($5 multiplier) positions against_short DJIASTM futures



(c)

@

[Beard, a-Committ thorized—by—the-Beard,JExchange to make a
determination that the particular kinds of intended positions should be
eligible for a higher position limit, including, but not limited to:

(i) A description of the specific nature and size of positions for future
delivery or in options on contracts for future delivery and offsetting
cash, forward or futures positions, where applicable, and an
affirmation that intended positions to be maintained in excess of the
limits set forth in Regulation 425.01 (b[a]) will be positions as set
forth in subsection (a) above; and

(ii) In the case of risk management positions, information on the cash
portfolio being managed and/or any cash or cash market instruments
held in connection with the intended risk management position, as
well as other information relevant to the conditions specified in
subsection (a) above. Of particular interest are whether the cash
market underlying the futures or options market has a high degree of
demonstrated liquidity relative to the size of the positions, and
whether there exist opportunities for arbitrage which provide a close
linkage between the cash market and the futures or options market
in question; and whether the positions are held_on behalf of a
commercial entity, including parents, subsidiaries or other related
entities, which typically buys, sells or holds the underlying or a
related cash market instrument.

(2) Supplemental Statements. Whenever there is a material change in the
information provided in the person's most recent statement pursuant to this
Regulation, a supplemental statement which updates and confirms previous
information shall be filed with [designated-stafF ee itt thorized

by—the-Beard—]the Exchange by every member or [registered—eligible

business—organization]-member firm owning, controlling or carrying such
person's position. The supplemental statement shall be filed no later than 10

business days after the day on which the person's position exceeds the level
specified in the most recent statement.

mmitte esign e-Beard]The Exchange will
monitor the positions maintained by persons who ‘have obtained particular
position limits under the provisions of this Regulation. The initial and
supplemental statements prescribed in subsections (b)(1) and (b)(2) above must be
submitted to the Office of Investigations and Audits and shall be maintained on a
confidential basis. The [Beard—ora-Committee-or designated staff authorized-by
the Beard,]Exchange may request additional relevant information necessary to
ensure compliance with this Regulation[-425-04], and may, [ferany-geed
reasen]in its discretion, amend, revoke or otherwise limit the particular position
limits established.

The provisions of this Regulation [425-04-]shall not apply to Corn, Oats, Soybean,
Wheat, Soybean Oil and Soybean Meal futures and options contracts traded on the
Exchange, for which exemptions from position limits are governed by Commodity



10, 13) 13)
Oats 600 1,200 1,750 60 60
(see #1, | (see #1,6,
13) 13)
Rough Rice 600 1,000 1,000 50 50
(see#5S) (see#2)
Soybean Oil 540 4,000 5,250 200 200
(see #1,7,| (see #1,7,
| ee 13) 13)
Soybean Meal 720 4,000 5,250 200 200
(see #1,7,| (see #1,7,
13) 13)
Ethanol 200 1,000 1,000 25

#1 Additional futures contracts may be held outside of the spot month as part of
futures/futures spreads within a crop year provided that the total of such positions, when
combined with outright positions, do not exceed the all months combined limit. In
addition, a person may own or control additional options in excess of the futures-
equivalent limits provided that those option contracts in excess of the futures-equivalent
limits are part of an eligible option/futures spread.

#2 No more than 500 futures-equivalent contracts net on the same side of the market are
allowed in a single month in all strike prices combined. Additional options contracts may
be held as part of option/options or option/futures spreads between months within the
same crop year provided that the total of such positions, when combined with outright
positions, does not exceed the all months combined limit. The futures-equivalents for
both the options and futures contracts are aggregated to determine compliance with these
net same side single month position limits.

#3 No more than 9,500 futures-equivalent contracts net on the same side of the market
are allowed in a single month in all strike prices combined. Additional options contracts
may be held as part of option/option or option/futures spreads between months within the
same crop year provided that the total of such positions, when combined with outright
positions, does not exceed the all months combined limit. The futures-equivalents for
both the options and futures contracts are aggregated to determine compliance with these
net same side single month position limits.

#4 No more than 5,000 futures-equivalent contracts net on the same side of the market
are allowed in a single month in all strike prices combined. Additional options contracts
may be held as part of option/option or option/futures spreads between months within the
same crop year provided that the total of such positions, when combined with outright
positions, does not exceed the all months combined limit. The futures-equivalents for
both the options and futures contracts are aggregated to determined compliance with
these net same side single month position limits.

#5 In the last five trading days of the expiring futures month, the speculative position
limit for the July futures month will be 200 contracts and for the September futures


immediately entered into the e-cbot system, no separate record need be made. However,
if a member or Registered User receives an order that is not immediately entered into the
e-cbot system, a record of the order including the order instructions, account designation,
date, time of receipt and any other information that is required by the Exchange must be
made. The order must be entered into the e-cbot system when it becomes executable.

1809.02 Liquidation in the Last Seven Days of Delivery Months - After trading in
expiring contracts [fer—future—deli +h t_delivery thj}has ceased in
accordance with Regulation 1809.01[- [Lof-this- chapter}, an outstanding contract[s] may be
liquidated by the delivery of book-entry U.S. Treasury Bonds (Regulation 1842.01), or by
mutual agreement by means of a bona fide exchange of such feurrent-futuresexpiring
contracts for,_or_in connection with, actual U.S. Treasury Bonds or comparable
instruments, [er-by tualage t-by fab fd h f-such t
fat fe # +H ith;] a swap transaction, Hper Regulation 444-04)} or an or an
over-the- counter derivative transaction, pursuant to Regulation 444.04. Such exchanges
must, in any event, be made no later than the fifth business day immediately preceding
the last business day of the delivery month.

2309.02 Liquidation after r Trading Has Ceased - After trading in expiring
contracts [fer-future-deliveryi tdelivery tjhas ceased in accordance with
Regulation 2309.01 (atineckopter) an outstanding contract[s] may be liquidated by the
delivery of book-entry U.S. Treasury Notes (Regulation 2342.01), or by mutual

agreement by means of a bona fide exchange of such feurrent-futuresJexpiring contracts

for. or. in connection with, actual U.S. Treasury Notes or comparable instruments, [orby

a ty fab fd i" such + fat: fi
mute yy Ha range ou

ceanection nati] a swap transaction, [per Regulation-444-04}} or an over-the-counter

derivative transaction, pursuant to 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 expiring contract (Regulation 2309.01)[the-fifth

diate} di: +thetast-busi 4: £-th: deli: th].
J JF i) bah a J
2409.02 Liquidation in the Last Seven Days of Delivery Months - After trading
in expiring contracts [fer-future-deli inth t-delivery thjhas ceased in

accordance with Regulation 2409. Olof this-chapter}, an outstanding contract[s] may be
liquidated by the delivery of book-entry U.S. Treasury Notes [er-bends ](Regulation
2442.01), or by mutual agreement by means of a bona fide exchange of such feurrent
futures expiring contracts for, or in connection with, actual U.S. Treasury Notes [er
bonds Jor comparable instruments, [orby tal-ags t-by: f-a-benafid

hange-of Fatt fe ti ith;} a swap transaction, f(per
Regulation-444-04}} or an over-the- counter derivative transaction, pursuant to Regulation
444.04. Such exchanges must, in any event, be made no later than the fifth business day
immediately preceding the last business day of the delivery month.



as reportable positions in Appendix 4C,, long or short in any one month
then all such futures and options on such futures contracts owned.

controlled or carried by that person or member firm, whether above the
given level or not, shall necessarily be deemed reportable positions.

(ii) __On or before the first day on which any position must be reported, the

person owning or controlling, or the member firm carrying the position.
must furnish to the Exchange a report, in the form prescribed by the
Exchange, identifying the owner of the account for which the position must
be reported and all persons associated with the account as described in
subsections (a)(ii) and (a)(iii) above.

Giii)___ Every person or member firm must report each and every reportable
position and provide the report required in subsection (b)(ii) above for
each person within any account carried on an omnibus basis, unless, upon
application of the person or member firm to the Exchange, a nonmember
omnibus account is specifically approved to report directly to the

Exchange.
Note: The Commodity Futures Trading Commission has imposed _speculative position

limits_on certain products, including Com, Oats, Soybean, Wheat, Soybean Oil and
Soybean Meal futures contracts, as provided in Part 150 of CFTC Regulations.

Appendix 4C

[(a}Fer the-_purpeses-of this Regulation, the]The following are definitions of titles used
in the position limit chart contained in this Appendix-

Spot Month- Spot month futures-equivalent position limit net long or net short
effective at the start of trading on the first business day prior to the first trading day of
the spot month.

Single Month- Futures-equivalent position limit net long or net short in any one
month other than the spot month.

All Months -Position limit net long or net short in all months and all strike prices
combined. Note: Long futures contracts, long call options, and short put options are
considered to be on the long side of the market while short futures contracts, long put
options, and short call options are considered to be on the short side of the market.
For each commodity, the futures-equivalents for both the options and futures
contracts are aggregated to determine compliance with the net long or net short same
side position limits.

Reportable Futures Level-Reportable futures position in any one month.


(iii)

included with the positions held by such person. Such s upon
positions shall apply to positions held by two or more persons acting
pursuant to an expressed or implied agreement or understanding, the same
as if the positions were held by, or the trading of the positions were done

by, a single person. .

Except as provided in Regulation 425.05, any person holding positions in

(iv)

more than one account, or holding accounts or positions in which the
person by power of attorney or otherwise directly or indirectly has a 10%
or greater ownership or equity interest, must aggregate all such accounts
or positions, unless such person is a limited partner, shareholder, member
of a limited liability company, beneficiary of a trust or similar type of pool
participant in a commodity pool. However, this exception does not apply
if the person is the commodity pool operator, controls the pool’s trading
decisions, or has an ownership or equity interest of 25% or greater in a

commodity pool the operator of which is exempt from registration with
the Commodity Futures Trading Commission.

A_member firm will not be in violation of this Regulation if it carries

(v)

positions for its customers in excess of the limits specified in Appendix
4C, for such reasonable period of time as the firm may require to discover
and_liquidate_the excess positions or file the appropriate hedge or
exemption statements for the customer accounts in question in accordance
with Regulation 425.03 or 425.04. For the purposes of this Regulation, a
"reasonable period of time" shall generally not exceed one business day
for those positions that are not subject to the provisions of Regulations
425.03 or 425.04.

If_an option position exceeds position limits for passive reasons such as a

(vi)

market move or exercise assignment, the person who owns or controls the
option position shall be allowed onc business day to liquidate the excess
position without being considered in violation of the limits. In addition, if
at the close of trading, an option position exceeds position limits when
evaluated using the previous day’s delta factors, but does not exceed the
limits_when evaluated using the delta factors for that _day’s close of
trading, then the position shall not constitute a position limit violation.

The Exchange may direct a person who owns or controls a position, or a

member firm that carries a position for another person, to liquidate or
otherwise reduce the position, when the total position, as defined in
subsections (a)(ii) and (a)(iii) above, exceeds the position limits set forth
in Appendix 4C, or as specifically determined pursuant to Regulations
425.03 or 425.04.

b) Reportable Positions

(i)

Ifa person owns or controls, or a member firm carries a position for

another person, equal to or greater than the number of contracts designated



Futures Trading Commission Regulation 150.3. (10/01/00)

425.05 Exemption from Aggregation for Position Limit Purposes -

(a).

(b)

(©)

Positions carried for an eligible entity, as defined in Commodity Futures Trading
Commission Regulation 150.1(d), in a separate account or accounts of an
independent account controller, as defined in Commodity Futures Trading
Commission Regulation 150.1(e), may exceed the position limits set forth in
Regulation 425.01, to the extent such positions are positions not for the spot month.

Tradine-Ci ission _Reoulation 1504 hth: the-C.
S - Pt

a t +t -to-R. Tati 1. 3; in-th: pi 7 f ants—ef

independent + troHer-previded-h]However, [that-]the overall positions
held or controlled by each such independent account controller may not exceed the
limits specified in Regulation 425.01.

Additional Requirements for Exemption of Affiliated Entities - If the independent
account controller is affiliated with the eligible entity or another independent account
controller, each of the affiliated entities must:

1) Have, and enforce, written procedures [in-place-]to preclude [such-account
controlers]the affiliated entities from having knowledge of, gaining access to,
or receiving data about, trades of the other [aeceunt-centroHers]. Such
procedures must include document routing, and other procedures or security
arrangements, including separate physical locations, which would maintain the
independence of their activities. [previded-h]However, [that-]such procedures
may provide for the disclosure of information which is reasonably necessary
for an eligible entity to maintain the level of control consistent with its[the]
fiduciary responsibilities and necessary to fulfill its duty to supervise diligently
the trading done on its behalf;

2) Trade such accounts pursuant to separately developed and independent trading
systems and market such trading systems separately; and

3) Solicit funds for such trading by separate Disclosure Documents that meet the
standards of Commodity Futures Trading Commission Regulations [424] 4.24

or 4.34, as applicable.

Upon request by the [ a au ersuch-persen

ible forth: ip $Si f£ the Offi cme tisatiy Arndt: jJExchan: ge,
any person claiming an exemption from speculative position limits under this
Regulation must provide to the-Exchange such information as specified in the request
relating to the positions owned or controlled by that person; trading done pursuant to
the claimed exemption; the futures, options, or cash market positions which support
the claim of [the] exemption; and the relevant business relationships supporting a
claim of exemption. (10/01/00)

425.06 Position Accountability - A person, as defined in Regulation 425.01(a)(i).

who holds or controls, or_a member firm that carrics for another person, aggregate

positions in excess of those specified in the chart below, or any positions with respect to

10-Year Municipal Note Index futures, shall be subject to the following provisions:



*SPOT |*SINGLE *ALL *REPORTABLE | *REPORTABL
E
CONTRACT MONTH | MONTH} MONTH FUTURES OPTIONS
LEVEL LEVEL
Bund None Nene Nene +090
[Beb} None Nene Nene 800
Sehatz Nene Nore Nene $00
10-Year Interest Rate Swap None None None 500 500
5-Year Interest Rate Swap None None None 500 500
ICBOT Dow Jones Industrial None None 50,000 200 200
lAverageTM” Index (aggregate
DJIATM limit,
see #9)
ICBOT mini-sized DowTM ($5 None None 50,000 200 200
multiplier) (aggregate
DJIATM limit,
see #9)
ICBOT Dow Jones-AIG None None 15,000 25
Commodity
Index”
ICBOT 5,000 oz. Silver 1,500 6,000 6,000 150
ICBOT 100 oz. Gold 3,000 6,000 6,000 200
ICBOT mini-sized Silver 1,500 | 1,500 3,000 750
ICBOT mini-sized Gold 4,000 4,000 6,000 600
U.S. Treasury Bonds (see #14) | None None 1,500 1,500
U.S. Treasury Notes (Syr.) (see #14) | None None 2,000 2,000
U.S. Treasury Notes (6 1/2- (see #14) None None 2,000 2,000
10yr.)
U.S. Treasury Notes (2yr.) (see #14) None None 1,000 1,000
30 Day Fed Fund None None None 600 600
10-Year Municipal Note Index 5,000 None 5,000 300
Imini-sized Eurodollars 10,000 10,000 10,000 400
(Corn and CBOT mini-sized 600 9,500 15,500 250 250
Com (aggregate, |(aggregate| (aggregate, (individual,
see #10) | , see #1, |see #1, 3, 10, see #11)
10, 13) 13)
Soybeans and 600 5,000 7,750 150 150
ICBOT mini-sized Soybeans (aggregate, |(aggregate] (aggregate, (individual,
see #10) | , see #1, |see #1, 4, 10, see #11)
10, 13) 13)
South American Soybeans 600 3,500 5,500 150
_(see #12) | (see #1) (see #1)
[Wheat and 600 4,000 5,250 150 150
ICBOT mini-sized Wheat (aggregate, (aggregate) (aggregate, (individual,
see #8, 10)| , see #1, |see #1, 7, 10, see #11)



(b)

Short Term U.S. Treasury Note Futures; Dow Jones-AIG Commodity
Index” Futures; and 10-Year and 5-Year Interest Rate Swap Futures; and

(iii) __ Exchanges of futures for, or in connection with, over-the-counter
derivative (“OTC”) transactions (“Exchange for Risk Transactions” or
“EFRs”). EFRs may be executed only in CBOT agricultural commodity
futures and in U.S. Treasury Bond Futures; Long Term, Medium Term.
and Short Term U.S. Treasury Note Futures; Dow Jones-AIG Commodity
Index“ Futures; 30-Day Fed Fund Futures and 10-Year and 5-Year
Interest Rate Swap Futures. The OTC component of an EFR must comply
with any applicable regulatory requirements prescribed by the Commodity

Futures Trading Commission.

(iv) Options on futures are not a permissible component of an EFP, EFS or
EFR.

For purposes of this Regulation, all EFPs, EFSs and EFRs shall be referred to as
Exchanges of Futures for Related Positions.

The Related Position (cash, swap, or OTC derivative) must involve the

(c)

commodity underlying the futures contract, or must be a derivative, by-product or
related product of such commodity that has a reasonable degree of price
correlation to the commodity underlying the futures contract.

An Exchange of Futures for a Related Position consists of two discrete, but

(d)

related simultaneous transactions. One party must be the buyer of (or have the
long market exposure associated with) the Related Position and the seller of the
corresponding futures, and the other party must be the seller of (or have the short
market exposure associated with) the Related Position and the buyer of the
corresponding futures. However, a member firm may facilitate, as principal, the
Related Position on behalf of a customer, provided that the member firm can
demonstrate that the Related Position was passed through to the customer that
received the futures position as part of the Exchange of Futures for Related

Position transaction.

The accounts involved on each side of an Exchange of Futures for a Related

(e)

Position: (a) must have different beneficial ownership; or (b) must be under
separate control; or (c) must involve separate legal entities.

The quantity covered by the Related Position must be approximately equivalent to

(63)

the quantity covered by the futures contracts.

Exchanges of Futures for Related Positions may be entered into in accordance

with the applicable trading increments set forth in the rules governing such futures
contracts, at such prices as are mutually agreed upon by the two parties to the
transaction.



December 15, 2005

Ms. Jean A. Webb

Secretary

Commodity Futures Trading Commission
Three Lafayette Center

1155 21" Street, NW.

Washington, DC 20581

Re: _ Reference File #2614.01
Rule Certification
Dear Ms. Webb:

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

- Amendments to CBOT® rules and regulations in Rulebook Chapters
1,3, 4, 5, 9, 9B, 18, 23, 24 and 25 per the attached texts (additions
underlined; deletions bracketed and struck through).

These amendments generally update and streamline the applicable rules and regulations
in terms of format and terminology. The amendments include consolidation of position
limit and position accountability provisions, clarification of the requirements for
Exchange for Physical (EFP), Exchange for Swap (EFS) and Exchange for Risk (EFR)
transactions, and insertion of appropriate references to the securities laws for the purpose
of security futures trading. In the case of EFR provisions, the amendments add financial
futures to the products eligible for EFR transactions. The amendments also codify the
Exchange’s current authority to enter into information-sharing agreements with other
self-regulatory organizations and modernize the language in the anti-manipulation
provisions consistent with rules adopted by other exchanges.

The CBOT intends to implement these amendments one day after the Commission’s
receipt of this filing.

There were no opposing views concerning these amendments.

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

Sincerely,

Paul J. Draths
Vice President and Secretary

b121305


#12 In the last five trading days of the expiring futures month, the speculative position
limit for the November futures month will be 180 contracts and for the January futures
month the speculative position limit will be 365 contracts.

#13 On December 10, 2005, Com and mini-sized Com single-month limits will be
increased to 13,500 contracts and all-month limits will be increased to 22,000 contracts;
Oats single-month limits will be increased to 1,400 contracts and all-month limits will be
increased to 2,000 contracts; Soybean and mini-sized Soybean single-month limits will
be increased to 6,500 contracts and all-month limits will be increased to 10,000 contracts;
Wheat, mini-sized Wheat, Soybean Oil, and Soybean Meal single-month limits will be
increased to 5,000 contracts and all-month limits will be increased to 6,500 contracts.

#14 In the last ten trading days of the expiring futures month, the following position
limits in the expiring contract will apply: U.S. Treasury Bonds — 25,000 contracts; U.S.
Treasury Notes (6% - 10 Year) — 50,000 contracts; U.S. Treasury Notes (5 Year) —
35,000 contracts; U.S. Treasury Notes (2 Year) — 25,000 contracts. No hedge exemptions

will be permitted with respect to these limits. [Fhe-pesitiontimits- noted herein shalt
Ib, 4 3: sth the D, 1, 2005 Ty fiat, tract. J
PP ty Ps :

E + forth: 7 +of-a-} ted. +H hh helderteth th; th, Weetse 1
1 Pi i
tor} edity 1 h: tid: 492% ext |. act

Per TF JP Dy PS Pr
terest_shall titut trol +t ‘ ded in Resulation 425.0
>Shalt trol accour ptas-providedin-t :

Th st: high defined R Jat; AIS H1 fe)

P oe 7 oer i=) USTs PA
trel-shall-be-a. tforth—h H. + th. +t to th, RRP iti
thigh 15, £3. i ¥y £, it: 7 i+-shall + by lat: £ the li. ts
+ forth hy, 44 +4 43 ; ff "me to-fo; bh.
* PA P
do ft thei: 1 ted v: mE date th: it:
P J ah a | Peo
file th, te-hed. : tot, tof; th, 7 4 rt 7
pprop de, ption- statement thy Ha qu
J. 4th QD. Jats AIS 92 1495 04 Fy +h. f ths, Tats,
5 7 * * PrP i) >
TM, bh, d—of ' chal} 2 Hae a dd busi: A f¢ +hi

Thet "nat! shalt the} shert ition held-after-offsettine 4

~The a  shallLinelud

individual jati +t hips—limited Habilit, i ti
5 ‘y iP 7 COFP



month the limit will be 250 contracts.

#6 No more than 1,200 futures-equivalent contracts net on the same side of the market
are allowed in a single month in all strike prices combined. Additional options contracts
may be held as part of option/option or option/futures spreads between months within the
same crop year provided that the total of such positions, when combined with outright
positions, does not exceed the all months combined limit. The futures-equivalents for
both the options and futures contracts are aggregated to determined compliance with
these net same side single month position limits.

#7 No more than 4,000 futures-equivalent contracts net on the same side of the market
are allowed in a single month in all strike prices combined. Additional options contracts
may be held as part of option/option or option/futures spreads between months within the
same crop year provided that the total of such positions, when combined with outright
positions, does not exceed the all months combined limit. The futures-equivalents for
both the options and futures contracts are aggregated to determine compliance with these
net same side single month position limits.

#8 In the last five trading days of the expiring futures month in May, the speculative
position limit will be 600 contracts if deliverable supplies are at or above 2,400 contracts,
500 contracts if deliverable supplies are between 2,000 and 2,399 contracts, 400 contracts
if deliverable supplies are between 1,600 and 1,999 contracts, 300 contracts if deliverable
supplies are between 1,200 and 1,599 contracts, and 220 contracts if deliverable supplies
are below 1,200 contracts. Deliverable supplies will be determined from the CBOT’s
Stocks of Grain report on the Friday preceding the first notice day for the May contract

month. For the purposes of [these+egulatiens]this Appendix, one mini-sized Wheat
contract shall be deemed to be equivalent to one-fifth of a corresponding Wheat contract.

#9 The aggregate position limit in CBOT mini-sized DowTM ($5 multiplier) futures and
CBOT DJIA*TM futures and options is 50,000 DJIATM contracts, net long or net short in all
contract months combined. For the purposes of [these+egulations]this Appendix, one
mini-sized DowTM ($5 multiplier) contract shall be deemed to be equivalent to one-half of
a DJIATM futures contract.

#10 The net long or net short positions in Corn, Soybeans, or Wheat contracts may not
exceed their respective position limits. The net long or net short positions in mini-sized
Com, mini-sized Soybeans, or mini-sized Wheat contracts may not exceed their
respective position limits. The aggregate net long or net short positions in Corn and
mini-sized Corn, Soybeans and mini-sized Soybeans, or Wheat and mini-sized Wheat
contracts may not exceed their respective position limits. For the purposes of [these
regulations]this Appendix, one mini-sized Corn, one mini-sized Soybean[s], or one mini-
sized Wheat contract shall be deemed to be equivalent to one-fifth of a corresponding
Corn, Soybeans, or Wheat contract.

#11 The reporting level for the primary contract is separate from the reporting level for
the mini-sized contract. Positions in any one month at or above the contract level
indicated trigger reportable status. For a person in reportable status, all positions in any
month of that contract must be reported. For the purposes of [these-regulations]this
Appendix, positions are on a contract basis.


Wording in Regulation 2509.02 applicable to contracts expiring during or before
March 2006:

2509.02 Liquidation in the Last Seven Days of Delivery Month -- After trading in
expiring contracts [fer—futare—delivery the. ont-delivery thjhas ceased in
accordance with Regulation 2509.01 [-ef+this-chapter}, an outstanding contract[s] may be
liquidated by the delivery of book-entry U.S. Treasury notes [erbends ](Regulation
2542.01), or by mutual agreement by means of a bona fide exchange of such feurrent
fatares—jexpiring contracts for,or in connection with. actual US S. 5 Treasiry notes lor
bonds Jor comparable instruments, [e mutualasreement-b @ bena

ge-of fat f i ish] a swap transaction, ffper
Roscoe 405) or an over-the- counter derivative transaction, pursuant to Regulation
444.04. Such exchanges must, in any event, be made no later than the fifth business day
immediately preceding the last business day of the delivery month.

Wording in Regulation 2509.02 applicable to contracts expiring later than March
2006:

2509.02 Liquidation [inthe—Last-S Days-of Delivery—Menth] after Trading
has Ceased -- After trading in expiring contracts has ceased in accordance with
Regulation 2509.01, an outstanding contract 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 for, or in connection with, actual U.S.
Treasury Notes or comparable instruments, a swap transaction, or an over-the-counter
derivative transaction, pursuant to Regulation 444.04. Such exchanges must, in any event,
be made no later than [the-#Ah] noon Chicago time on the business day immediately
[preceeding] following the last [business day of the delivery month] day of trading in the
expiring contract (Regulation 2509.01).



Reportable Options Level-Reportable options position in any one month in each
option category. Note:Option categories are long call, long put, short call, and short
put.

Net Equivalent Futures Position-Each option contract [has-been] will be adjusted by
the prior day’s risk factor, or delta coefficient, for that option which has been
calculated by the [Beard-ef Frade-Clearing Corporation. JExchange’s Clearing
Services Provider.

For the purpose of this [Regulation] A ppendix:

(0) An option contract's futures-equivalency shall be based on the prior day's delta
factor for the option series, as published by the [Beard-of Frade-Clearing
Corporation Exchange’s Clearing Services Provider. For example, 8 long put
contracts, each with a delta factor of 0.5, would equal 4 futures-equivalent
short contracts.

(ii) Long futures contracts shall have a delta factor of +1, and short futures
contracts shall have a delta factor of -1.

(iii) Long call options and short put options shall have positive delta factors.
(iv) Short call options and long put options shall have negative delta factors.
(v) An eligible option/option or option/futures spread is defined as an intra-month

or inter-month position in the same Chicago Board of Trade commodity
product in which the sum of the delta factors is zero.

[Except ided-in-Regulati 425.03. 425.04 and-425.05_th

positions-which-any-person-may-own, control, or earry-are-as follows:]

(Note: All position limits and reportable positions are in number of contracts and are based on futures
or [*]Net Equivalent Futures Positions, as defined above.)

[*P} tion-(a)-of this Regulation for-definition:]
{ay rf



are operated by the same commodity pool operator and traded by the same commodity
trading advisor, pursuant to the same strategy, into a single account so long as the transfer
does not result in the liquidation of any open positions, and the pro rata allocation of
interests in the consolidating account does not result in more than a de minimis change in
the value of the interest of any pool participant. Additionally, the BCC, or designated
staff pursuant to delegated authority, in its discretion, upon written request, may exempt
such other transfers in connection with, or as a result of, a merger, asset purchase,
consolidation or similar non-recurring transaction between two or more entities where
one or more entities become the successor in interest to one or more other entities.

d-in- Resulation 444.04 th h £ fan £
an S

Transfer trades must be made at the same price or prices which appear on the books of
the transferring futures commission merchant, and the transfer must also show the date
when such trade or trades were originally made. However, the BCC, or designated staff
pursuant to delegated authority, in its discretion, upon written request, may permit the
transfer of positions at settlement price if such transfer is made as a result of, or in
connection with, a merger, asset purchase, consolidation or similar non-recurring
transaction where the entity to which the positions are transferred becomes [the—]a
successor in interest to the entity from which the transfer originated. All such transfers


member firms shall comply with the Commodity Exchange Act and Commodity Futures
Trading Commission Rules_and Regulations and, with respect to security futures, the
Securities Exchange Act_of 1934 (“Exchange Act”) and Securities_and Exchange
Commission Rules and Regulations, as applicable. Any member or any member firm
[adjudged_guilty of a-vielation-of] found to have violated the Commodity Exchange Act
or [ef] any Regulation or Order thereunder, or with respect to security futures, the
Exchange Act or any Regulation or Order thereunder, by the final decision in a federal
administrative or judicial proceeding, may be deemed to have violated Rule 504.00 [ef
the Exchange]. 603 (04/01/05)

509.00 Other Offenses
A. — Itshall be an offense against the Exchange to:
(a) Attempt extortion;

{b) Trade systematically against the orders or positions of his customers;
te) [M ipul 4 Pp } f ts? pt 44 th ark t+: YY citys

seeurite]

(cd) Disseminate false or inaccurate market information;

(de) Trade or accept margins after insolvency;

(cf) Make any trade for the account of [ergive-apthe-name-of] any clearing member
without authority from such clearing member;

(fg) [Be-deprived—of the—privilege—of trading] Trade while subject to a trading
prohibition under the Commodity Exchange Act;

{#(g)Trade for any person [deprived-of-the-privilege-oftrading] subject to a trading
prohibition under the Commodity Exchange Act;

(ih) Accept an order or make a trade for any employees of the Clearing Services Provider
except in the exercise of their official duties; or

(i) _ Fail to comply with an order or award of the [Conmnittee-ef]-Arbitration Committee
or any disciplinary committee.

B. No member shall be directly or indirectly interested j in or [associated in busiiess

hy T transact; any business directly or
indirectly with or for

(a) Any bucket shop; or

(b) Any organization, firm, or individual making a practice of dealing [e]in
differences in market quotations; or

(c) Any organization, firm or individual engaged in purchasing or selling
[eommodities-or-securities] futures or options for customers and making a
practice of taking the side of the market opposite to the side taken by customers.


(>)

(©)

@

()

©

(g)

[fer-e—fleorbrekerte] No person shall sell any [ dity—forfuture delivers]
futures contract, sell any call [eommedity] option or purchase any put [eommedity]
option for his own account, or for any account in which he ha[d]s an interest, or for
[those] an an account[s] over which he has discretionary trading authority, falling-within
pti £paragraph_te)-of this Regulationwhile [helding] in possession of
any executable order of another person for the sale of any futures contract, the sale of
any call [cemmedity] option; or the purchase of any put [eommedity] option in the
same commodity product. [whieh is-exeoutable-at the market price-or-at-the price at
le- forth.
hy ine int +. forth, t5-fali +thinth ti

a hich, At a /p

f he} of this Regulation:]
te} 5.

[fer-a] No [fleer-breker] person [te] shall execute a transaction in the trading pit for
an account over which he has discretionary trading authority.

The above restriction shall not apply to:

1. transactions for another member of the Exchange for an account owned
by such member;

2. transactions for members of [the-fleerbroker's] such person’s family
which include; spouse, parent, child, grandparent, grandchild, brother,
sister, uncle, aunt, nephew, niece, or in-law;

3. transactions for proprietary accounts of member firms.
[for a-memberto] No person shall disclose at any time [hat he-is holding an-order-of

te-di: a ai lod toh: by Joti,
issih ther pers the existence or terms of an order that has not been Sisclored to
the market. [ pt ~ +t, p He ph te} \ of thic DB 2: Tats. in the |, ith +t,

eourse-ef-business_or] except at the request of an authorized representative of the
Exchange or of the Commission[;]. [¢/The mere statement of opinions or indications
of the price at which a market may open or resume trading‘does not constitute a
violation of [the-Exehange's-Rules-and-Regulations] this Regulation, =] [h]However,
nothing herein shall alter or waive a [member's] person’s responsibility to comply
with existing provisions of the Commodity Exchange Act, Commission Rules, and
the Rules and Regulations of the Exchange.[:] [f]Furthermore, it shall be a violation
of this Regulation for any individual to solicit or induce a [member] person to
disclose order information in a manner prohibited by this Regulation[;].

[fer-a+nemberte] No person shall take, directly or indirectly, the other side of any
order of another person revealed to him by reason of his relationship to such other
person, except with such other person's prior consent and in conformity with
Exchange rules, except as provided in Regulation 9B.13 or except for transactions
done in accordance with Regulation 350.04 to resolve bona fide errors or
outtrades[s].

[fer-a-member+to] No person shall make any purchase or sale which has been
pre-arranged, except as permitted under Regulations 331.05 and 444.01].

[fer-e+nemberto] No person shall withhold or withdraw from the market any order
or part of an order [of anetherp: forthe oFanoth ber] for the



(d)

(1) | Short-hedging positions (including long put options or short call options) of
unsold anticipated positions in the same cash commodity by the same person;

(2) Long-hedging positions (including long call options or short put options) of
unfilled anticipated requirements of the same cash commodity by the same
person;

(3) Short or long cross-hedging positions, provided that the fluctuations in the
value of the positions for future delivery or the commodity underlying the
options positions are substantially related to the fluctuations in the value of the
anticipated cash positions; or

(4) Any other positions in commodities for future delivery or options on futures
contracts, including those established under the concept of “delta-ratio
hedging”, under such terms and conditions as the [Beard—er-a—Committee

authorized _-by the Board. JExchange may specify.

Cash positions described in subsections (b) and (c) above shall not include those

positions or portions of positions which are bona fide or economically appropriate
hedging positions in futures or [ ically_appropriate hedging positions in-]

options pursuant to Regulations 425.02 and 425.03.

Note: Corn, Oats, Soybean, Soybean Oil, Soybean Meal and Wheat futures contracts
are subject to Commodity Futures Trading Commission Regulation 1.3(z), which
defines bona fide hedging transactions and positions. (10/01/00)

425.03 Reporting Requirements For Bona Fide or Economically Appropriate
Hedging Positions in Excess of Limits -

(a)

Initial Statement. Every member or [registered-eligible business
organization |member firm which owns, controls, or carries positions on behalf of
a person who seeks classification of such positions as bona fide or economically
appropriate hedging positions must file a statement satisfactory to [designated
staffer a Committee authorized by the Beard]the Exchange in order to classify
such positions as bona fide or economically appropriate hedging positions within
the meaning of Regulation 425.02. The initial statement of the member or
istered-eligible busi ization ]member firm filed on behalf of a person
shall be filed no later than 10 business days after the day on which the person's
position exceeds the speculative limit for each contract specified in Regulation
425.01 (b)[¢a)}], and shall include:

qd) A description of the kinds of intended positions and their potential size;

(2) A statement affirming that the kinds of intended positions are bona fide or
economically appropriate hedging positions; and

(3) With respect to the kinds of intended positions that are described as
non-enumerated hedging positions under Regulation 425.02(c), a
justification that the kinds of intended positions are consistent with the
definition of bona fide or economically appropriate hedging positions within
the meaning of Regulation 425.02(a).


(b)

plus any funds deposited as margin on such positions; and

(ii) Accrued profits on such positions held at the futures commission
merchant.

(2) Long positions (futures, long calls,_short_puts) whose underlying
commodity value does not exceed the sum of:

(0) The value of equity securities, debt securities, or currencies owned
and being hedged by the trader holding such futures or option
position, provided that the fluctuations in value of the position used
to hedge such securities or currencies are substantially related to the
fluctuations in value of the securities or currencies themselves; and

(ii) Accrued profits on such positions held at the futures commission
merchant.

(3) Short calls whose underlying commodity value does not exceed the sum of:

(i) The value of securities or currencies underlying the futures contract
upon which the option | is based or [underbingthe-futures_contract
pr bich-the-optt based-or-] underlying the option itself and
which securities or currencies are owned by the trader holding such
option position; and

(ii) | The value of securities or currencies whose price fluctuations are
substantially related to the price fluctuations of the securities or
currencies underlying the futures contract upon which the option is
based or underlying the option itself and which securities or
currencies are owned by the trader holding such option position.

Risk management positions eligible for particular position limits under this
Regulation do not include those considered as bona fide or economically
appropriate hedging positions as defined in Regulation 425.02.

Requirements for Exemptions from Position Limits. Every member or [registered
eligible business-organization]member firm which owns, controls or carries
positions on behalf of a person who wishes to make purchases or sales of any
commodity for future delivery or any option on a contract for future delivery in
excess of the position limits then in effect, shall file statements on behalf of the
Person with the Exchange, i in such form and. manner as shall be prescribed by the

JExchange, in conformity

with the requirements of this subsection,

(1) Initial Statement. Initial statements concerning the classification of positions
normally known in the trade as "spreads, straddles or arbitrage,” or risk
management positions, as described in subsection (a) above, for the purpose
of subjecting such positions to particular position limits above those
specified i in Regulation 425.01 (b[a]), shall be filed with [designated-staffer

thorized-by-the Beard]the Exchange no later than 10 business
days after the day on which such positions exceed the position limits then in
effect. Such statements shall include information necessary to enable the



ad

e)

advisor registered (or exempt from registration) under the Investment Advisors

Act of 1940 [a

ti der—the—Act al itu: Tradi

5 t £5 1.
PP On ea So
& Regulat 4h der}, or a foreign person performing a similar

i>
tole or function subject as such to foreign regulation, with total assets under

management exceeding $50 million, the individual customers need not so qualify.

Each Block Trade executed pursuant to this Regulation must be cleared through
the clearing members. Information identifying the relevant contract, contract
month, price, quantity, time of execution, [and} counterparty clearing member,
and for options, strike price, put or call and expiration month, for each Block
Trade must be reported by the seller to the Exchange within five minutes
immediately following execution of such Block Trade. The Exchange will
publicize information identifying the trade as a Block Trade and identifying the
relevant contract, contract month, price or premium, [and] quantity_and, if
applicable, the underlying commodity, whether the transaction involved a put or a
call and the strike price, for each Block Trade immediately after such information
has been reported to the Exchange.

Each clearing member and member that is party to a Block Trade shall record the
following details on its order ticket: the contract (including the delivery or expiry
month) to which such Block Trade relates; that the trade is a Block Trade; the
number of contracts traded; the price of execution_or_premium; the time of
execution; the identity of the counterparty; for options, strike price, and put or call
and, if applicable, details regarding the customer for which the Block Trade was
executed, the underlying commodity, whether the transaction involved a put or a
call and the strike price. Upon request by the Exchange, such clearing member or
member shall produce satisfactory evidence, including without limitation the
order ticket referred to in the preceding sentence, that the Block Trade meets the
requirements set forth in this Regulation. (09/01/03)

350.05 [Fleer] Trading Practices - The following acts are prohibited and shall
constitute _acts [are] detrimental to the welfare of the Exchange (except as permitted
under Regulation 331.05)[:]. This Regulation shall apply to all persons subject to the

jurisdiction of the Exchange, and, unless otherwise specified, shall apply to both the open
auction market and the e-cbot market.

@)

[fer-afleer-brekerte] No person shall purchase any [eommedityforfuture-delivery]

futures contract, purchase any call [eemmedity] option or sell any put [eommedity]
option for his own account, or for any account in which he has an interest, or for

[these] an account[s] over which he has discretionary trading authority, [falling

ithi i i ion;}-while [helding] in
possession of any executable order of another person for the purchase of any futures
contract, the purchase of any call [eemmedity] option{,] or the sale of any put

[ecommedity] option[;] in the same [i ity ]product. [+vhich-+ Hable-at-th
‘ket + tty + t hich +} ha: 1, by de—fe thy
F sa Pr
bers ft +h vaer ieh—he—-h: int +t. £¢ thi

ats-fati ithinth i f h-(e)-of this Regulation-]
Ss PR paragrapat s' g


(g) Clearing firms on opposite sides of an Exchange of Futures for a Related Position
must subsequently approve the terms of the transaction, including the clearing
firm (division), price, quantity, commodity, contract month and date prior to
submitting the transaction to the Clearing Services Provider. All Exchanges of
Futures for Related Positions must be submitted to the Clearing Services Provider
by a clearing firm acting on its own behalf or for the beneficial account of a
customer who is a party to the transaction.

(h) Each Exchange of Futures for a Related Position shall be designated as such, and
cleared through the Exchange’s Clearing Services Provider as if it were a
transaction executed in the Exchange’s central markets. The transaction shall be
submitted to the Clearing Services Provider within the time period and in the
manner specified by the Clearing Services Provider.

qi) The time of execution of an Exchange of Futures for a Related Position must be
recorded on the futures order ticket, and on the record submitted to the
Exchange’s Clearing Services Provider.

@ Parties to any Exchange of Futures for _a Related Position must maintain all
documents relevant to the futures and the cash, swap, or OTC transactions
including all documents customarily generated in accordance with cash or other
relevant market practices and any documents reflecting payment and transfer of
title, and must provide such documents to the Exchange upon its request.

444.05[3] Transfer Trades and Exchanges of Futures for Related Positions in a
Delivery Month - During the delivery month and 2 business days prior to the first
delivery day, [(erinthe-case-of enide-petreleunt during -pesition-menth)] transfer trades,
or Exchanges of Futures for Related Positions, as described in Regulation 444.04, for the
purpose of offsetting existing positions where no change of ownership is involved, are
prohibited when the date of execution of the position being transferred, or the futures
component of the Exchange of Futures for Related Position, is not the same as the
transfer_or Exchange of Futures for Related Position trade date. Positions carried at the
same or different [hewses-]futures commission merchants for the same owner 2 business
days prior [and-Jto a delivery month and thereafter [¢erin+th f-crudepetrol

i iti Jare required to be offset [i#-the-pit]through open auction or on e-
cbot, as applicable, or fulfilled through the normal delivery process. Where the positions
are carried at different futures commission merchants, t[FJhe receiving firm has the
responsibility to assure compliance with this regulation. (08/01/94)

{444.0 “Fransfer-Trades—for-the-P: £- Offset: ini-sized-_DewTMTM Fut:

cCRoT. 4 Su
5 % 5 SM, ‘
$ 143 d-CB Dew-F Jndustrial_AverageTMTM(DJLATM) Futures —With



Additions are underlined; Deletions are bracketed and [struckthreugh].

190.01 Regulatory Cooperation - The Exchange may from time to time enter into such
agreements with domestic or foreign self-regulatory organizations, associations, boards

of trade, clearing organizations, and their respective regulators providing for the
exchange of information and other forms of mutual assistance for financial surveillance
routine audits, market surveillance, investigative, enforcement and other regulatory
purposes as the Exchange may consider necessary or appropriate or as the Commodity
Futures Trading Commission may require. The Exchange is authorized to provide
information to any such organization, association, board of trade, clearing organization or
regulator that is a party to an information sharing agreement with the Exchange, in

accordance with the terms and subject to the conditions set forth in such agreement.

331.05 Block Trade Transactions — The [Beard—of—Directers} Exchange may
designate any contract initially listed for trading on or after December 31, 1999 as

eligible for Block Trade transactions under this Regulation [334-05} and shall determine
the minimum size thresholds for the contracts in which Block Trade transactions are
permitted. In determining the minimum size threshold, the [Beard—ef—-Directers}
Exchange shall take into consideration (to the extent available) the size distribution of
transactions in the contract, the size distribution of transactions in the related cash or
over-the-counter markets, and all other information relevant to transaction size in the
relevant contract. The hours of operation of the Block Trade facility shall be determined
by the [Beard-ef Directors] Exchange.

Members may enter into transactions outside of the Exchange’s central markets, at prices
mutually agreed, with respect to contracts that have been designated by the Exchange for
such purpose, provided that the following conditions are satisfied:

a) Each buy or sell order underlying a Block Trade must (i) state explicitly that it is
to be, or may be, executed by means of a Block Trade and (ii) be at least for the

minimum transaction size as determined by the [Beard-ef Direetors} Exchange.
Orders may not be aggregated in order to achieve the minimum transaction size.

b) The price at which a Block Trade is executed must be fair and reasonable in light
of (i) the size of such Block Trade; (ii) the price and size of other trades in the
same contract at the relevant time; and (iii) the price and size of trades in other
relevant markets, including without limitation the underlying cash market or other
related futures markets, at the relevant time. The price at which a Block Trade is
executed shall not affect conditional orders such as limit orders or stop orders.
The price at which a Block Trade is executed shall not be used in establishing
settlement prices.

c) Each nonmember customer to a Block Trade transaction must qualify as an
“eligible contract participant”, as that term is defined in Section 1a(12) of the
Commodity Exchange Act (“Act”), provided that, if any Block Trade is entered
into on behalf of customers by a commodity trading advisor registered (or exempt
from_registration) under the Act, including without limitation any investment


545.02 Record Keeping — [P: tHo-RuleS45-00-andRegilatih 45-03e]Each
member, [and] member firm, firm declared regular for delivery under the Exchange’s
Rules and Regulations, or other person subject to the jurisdiction of the Exchange shall
keep in an accurate and complete manner all books and records required to be made or
maintained under the Rules and Regulations and, as applicable, the Commodity
Exchange Act and Commodity Futures Trading Commission Regulations and, with
respect to security futures, the Securities and Exchange Act of 1934 and Securities and
Exchange Commission Regulations. All books and records required to be kept shall be
kept for a period of five (5) years from the date thereof and shall be readily accessible for
a period of two (2) years from the date thereof. All reports required to be submitted to
the Exchange [erits-delegate] shall be reported accurately and completely.

ah we ined. ions.
iaaintel frie . ne ine
fate ae A $3, +t: 7 tic fyets £ +h. ++ na ia} i +3
ii 7 T
fut iSS} ants. 4 Lifeati, £, bershi J
- } p:
915.03 Exchange — When used with reference to the administration of any rule or

regulation, the term “Exchange” means the Board of Directors, a Committee that has
been authorized by the Board to administer such rule or regulation, or staff designated by
the Board or such an authorized Committee to administer such rule or regulation.

9B.11 Order Entry-

(a) A member or Registered User who is registered as a floor broker or associated person,
or in a comparable capacity under applicable law, may enter discretionary or non-
discretionary orders on behalf of any account of a clearing member with the prior
approval of the clearing member responsible to clear such orders.

(b) A member or Registered User who is not registered as a floor broker or associated
person, or in a comparable capacity under applicable law, may enter non-discretionary
orders on behalf of customers. Such member or Registered User may enter discretionary
or non-discretionary orders for the account of his employer or for his own account
provided he does not enter or handle customer orders.

(c) It shall be the duty of each member or Registered User to: (1) submit orders through
the e-cbot system under his registered e-cbot User ID and (2) input for each order the
price, quantity, product, expiration month, correct CTI code and appropriate account
designation and, for options, put or call and strike price. A suspense account may be used
at the time of order entry provided that a contemporaneous written record of the order,
with the correct account designation, is made, time-stamped and maintained in
accordance with Regulation 9B.18, and provided that the correct account designation is
entered into the clearing system prior to the end of the trading day._A suspense account
may also be used at the time of order entry for bunched orders that are eligible for post-
trade allocation, and are executed pursuant to and in accordance with CFTC Regulation

1.35(a-1)(5).

(d) With respect to orders received by a member or Registered User which are



rea it: iti hall net hy-to-bi fide-hedsi itions
Ae Pt PPtY HEP BS
ts of Resulati 425-02 and 425-0: 4e-pesiti
Jarlimit ted. + to-Resulatien- 425.04
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az, Ss F ad Pt
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{87 Ort S} HF PH
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Audits (0700S)

425.02 Bona Fide Hedging Positions -

(a) General Definition. Bona fide or economically appropriate hedging positions in
futures or options shall mean positions in a contract or positions in options on a
contract for future delivery on this Exchange, where such positions normally


(b)

(©)

Supplemental Statements. Whenever there is a material change in the information
provided in the person's most recent statement filed pursuant to this Regulation, a
supplemental statement which updates and confirms previous information shall be
filed with [designated staffera-C itt thorized by the Board the Exchange
by every member or[ egistered-eligible-busi ganization |member firm
owning, controlling or carrying such person's positions. The supplemental
statement shall be filed no later than 10 business days after the day on which the
person's position exceeds the level specified in the most recent statement.

[A-G tf designated—staff_autherizedby—theBoard]The Exchange will
monitor bona fide or economically appropriate hedging positions. The initial and
supplemental statements prescribed in subsections (a) and (b) above must be
submitted to the Office of Investigations and Audits and shall be maintained on a
confidential basis. The [Beard; — Ht designated staff authorized by 4h,
Beard-JExchange may request additional relevant information necessary to ensure
compliance with this Regulation, and_may, in its discretion, amend, revoke or
otherwise limit the classification of positions as bona fide or economically
appropriate hedging positions.

Note: Commodity Futures Trading Commission Regulations 1.47 and 1.48 set forth

additional requirements for statements to be filed with the Commission for Corn.
Oats, Soybean, Soybean Oil, Soybean Meal and Wheat futures contracts, as

applicable.

425.04 Exemptions From Position Limits -

(a)

The [Beard; — itt thorized bythe Board, Exchange may establish
particular position limits on those positions of a person normally known as
"spreads, straddles or arbitrage," including:

(1) intramarket spreads;
(2) intermarket spreads;

(3) _ cash-futures arbitrage, where "cash" is defined as spot or forward positions;
or

(4) eligible option/option or option/futures spreads as defined in Regulation
425.01.

In addition, the [Beard G Ht therized—bythe-Beard, Exchange may
establish, on a case by case basis, particular maximum position limits on certain
risk management positions in interest rate, stock index and currency futures and
options, including:

qd) Long positions (futures, long calls, short puts) whose underlying
commodity value does not exceed the sum of:

(i) Cash set aside in an identifiable manner, or any of the following
unencumbered instruments so set aside, with maturities of less than
1 year: U.S. Treasury obligations; U.S. agency discount notes;
commercial paper rated A2 or better by Standard & Poor’s and P2 or
better by Moody's; banker's acceptances; or certificates of deposit,