HEDGE
Street

July 12, 2005

VIA EMAIL: secretary@cftc.gov

Ms. Jean A. Webb

Secretary of the Commission
Commodity Futures Trading Commission
3 Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581

RE: Certification: HedgeStreet amending its market making rules to include the
benefit of revenue sharing with HedgeStreet - Submission pursuant to
Commission Regulation §40.6

Dear Secretary Webb:

Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended (“Act”), and
§40.6(a) of the regulations promulgated by the Commodity Futures Trading Commission
(the Commission”) under the Act, HedgeStreet, Inc. (“HedgeStreet”) hereby submits to
the Commission an amendment to its market making rules in order to broaden the benefits
available to market makers that satisfy all of the market maker obligations to include a
revenue sharing benefit based on a percentage of the transaction volume in one or more
Designated Classes of contracts'. HedgeStreet has included under Exhibit A amendments
to HedgeStreet Rule 4.4(b) in order to include the revenue sharing benefit.

HedgeStreet is not aware of any substantive opposing views to this rule amendment.
HedgeStreet hereby certifies that these rule amendments comply with the Commodity
Exchange Act, as amended, and the Commissions regulations adopted thereunder.

HedgeStreet intends to implement these rule amendments on Wednesday, July 13, 2005.

As a recently designated contract market, HedgeStreet has implemented market maker rules
in order to promote liquidity in all contracts on the market. HedgeStreet would like to
reword its market makers for fulfilling i) all of the market maker obligations as defined in
Chapter 4 of HedgeStreet’s rules; ii) all other member rules; and iii) those defined terms
and conditions of the respective market maker agreement. Therefore, HedgeStreet is
implementing the revenue sharing benefit to its rules. This revenue sharing benefit is
designed to pay market makers a certain percentage based on the volume of executed
transactions. Such percentage will be determined by HedgeStreet and defined in the market
maker agreement.

' “Designated Classes” are those Classes of contracts in which a market maker has been appointed to
abide by all of the market maker obligations defined in HedgeStreet Rule 4.5 as well as the
respective market maker agreement. 1825 S. Grant Street

San Mateo, CA 94402
Tel: 650.638.3500
www.hedgestreet.com Fax: 650.630.3501


HEDGE
Street

All trades executed in Designated Classes by a market maker are eligible to be included in
the benefit and the relevant percentages will be reflected in the market maker agreement.

AK

Should you have any questions or require additional information, please do not hesitate to
contact the undersigned at (650) 638-3511 or sford@hedgestreet.com.

Sincerely,

Stephanie Ford
Vice President, Legal & Compliance

ce: Riva Adriance — CFTC
Clarissa Manansala — HedgeStreet, Inc.

1825 S. Grant Street

‘Sulte 500

‘San Mateo, CA 94402

Tet: 650.638.3500
www.hedgestreet.com Fax: 650.838.3501



HEDGE
Street

EXHIBIT A

RULE44 BENEFITS OF BECOMING A MARKET MAKER

(a) [unchanged]

(b) Market Makers shall receive reduced trading fees and/or participate in
revenue sharing with HedgeStreet as an incentive for fulfilling the obligations of a

market maker.

(c) - (d) funchanged].

1825 S. Grant Street
Sulte 500

‘San Mateo, CA 94402
Tel: 650.838.3500
Fax: 650.638.3501

www-hedgestreet.com