(i) the volume weighted average of the last two trade
prices, rounded to the nearest tick;

(ii) the mid-point between the best bid and offer
(volume weighted) in the pre-close, rounded to the
nearest tick;

(iii) spread price relationships; and

(iv) time value between the contract months.

(d) The Exchange reserves the right to take into account other
factors in determining settlement prices.

1205. Deliverable Instruments”

U.S. Environmental Protection Agency (“EPA”) SQ2 Emission
Allowances equal to the contract size.

(a) Contracts without a specified vintage year
(i) Applicable for March through December contract
expirations, the SOz emission allowances acceptable for
delivery are allowances having a vintage corresponding to
the calendar year of the contract expiration and allowances
having a vintage of any year prior to the calendar year of
the contract expiration.

(ii) | Applicable for January and February contract
expirations, the SO2 emission allowances acceptable for
delivery are allowances having a vintage of any year prior
to the calendar year of the contract expiration.

(b) Contracts with a specified vintage year

The SO, Emission Allowances acceptable for delivery are
allowances having a vintage corresponding to the specific vintage year and
allowances having a vintage of any year prior to the specified vintage year.

1206. Delivery Procedures*

(a) Delivery. Delivery is a three day process consisting of

Position Day, Notice Day and Delivery Day. The three days occur over three
consecutive Business Days.

(i) Position Day. The tenth trading day prior to a

Sulfur Financial Instrument futures contract’s expiration is the first day

that Clearing Members must report their long futures positions by trade

date to the Clearing Service Provider as of the close of business on the

tenth trading day prior to expiration. Starting on the first Position Day,

Clearing Members holding open short positions (hereafter referred to as


CCFE

Chicago Climate Futures Exchange

Chicago Climate Futures Exchange, LLC

Sulfur Financial Instrument Futures Contract Specifications

Contract Size

25 U.S EPA SO, Emission Allowances

Quotation

US dollars

Minimum Tick Increment

$1.00 per U.S. EPA SO, Emission Allowance = $25.00 per contract

Symbol

SFI

Trading Hours

7:30 a.m. — 3:00p.m. Central Time

Contract Listing Cycle

1, Standard-cycle contract listings:
a. Six consecutive quarterly contracts on a March, June, September, December cycle;
b. Front two serial calendar months; and
c. Up to eight annual December contracts

2. CCFE may list any other calendar month contract off the standard-cycle listing
schedule through the last annual December contract.

As all annual December contracts through 2014 have been listed, expiration of a June
contract will not require the listing of a new quarterly cycle contract through the June
2013 contract.

Products

Within any listed contract, CCFE may offer one or more vintage-year specific products
having different delivery specifications as follows:

Front-Year Vintage!

1-Year Deferred Vintage

2-Year Deferred Vintage

3-Year Deferred Vintage

4-Year Deferred Vintage

Additional Deferred Vintages as determined by CCFE

DAYSYNE

Deliverable Instruments

U.S. Environmental Protection Agency (“EPA”) SO Emission Allowances equal to the
contract size. The SO, Emission Allowances acceptable for delivery are allowances
having a vintage corresponding to the specified vintage of the product and allowances
having a vintage of any year prior to the specified vintage year.

First Trading Day

The first trading day of a standard-cycle contract is the first business day following an
expiration day of standard-cycle contract.

Last Trading Day

With the exception of February contracts, the last day of trading of a contract is the last
business day of the expiration month,

The last trading day for February contracts will be the third to last business day of the
month in order to coordinate with the EPA’s March |“ annual SO, compliance deadline.

Settlement Price Calculation

Settlement prices will be based on the following criteria:
a. A single traded price during the pre-close.
b. If more than one trade occurs during the pre-close, the trade volume weighted
average of the prices, rounded to the nearest tick.
c. Ifno trade occurs during the pre-close, the following will be given consideration;
1. the volume weighted average of the last two trade prices, rounded to the

' CCFE is in the process of modifying its Trading Platform to reflect the applicable vintage on all SF1 futures products.
The current January 07 and February 07 products call for delivery of allowances with vintages of 2006 or earlier.

November 2006 v5.0



The foregoing position limit shall not apply to bona fide hedge positions
meeting the requirements of the Commission Regulation § 1.3(z)(1) and the Rules
of the Exchange.

(Ri) Contract Modifications. Specifications are fixed as of the first
day of trading of a contract. If any U.S. Government agency or body issues an
order, ruling, directive or law that conflicts with the requirements of these rules,
such order, ruling, directive or law shall construed to take precedence and become
part of these rules, and all open and new contracts shall be subject to such
government orders.

(i) Daily Price Limits." Effective November 3, 2006 daily price limits
were removed.

(jk) [Reserved]”'
(kl) [Reserved]

(im) Exchange of Future for Physical. There is no minimum size for
an Exchange of Future for Physical transaction with respect to Sulfur Financial
Instrument futures contracts. The Exchange of Future for Physical must meet all
requirements of, and must be reported to the Exchange in accordance with, Rule
4ll.

(wan) Block Trades. Pursuant to Rule 412(a)(i), the minimum Block
Trade

quantity for the Sulfur Financial Instrument futures contract shall be
determined by the Exchange from time to time. If the Block Trade is executed as
a spread or a combination, one leg must meet the minimum Block Trade quantity
for the Sulfur Financial Instrument futures contract and the other legs(s) must
have a contract size that is reasonably related to the leg meeting the minimum
Block Trade quantity. The Block Trade must meet all requirements of, and must
be reported to the Exchange in accordance with, Rule 412.

1204, Settlement Price CalculationsTM
Contract month settlement prices will be based on the following criteria:
(a) A single traded price during the pre-close.

(b) If more than one trade occurs during the pre-close, the trade
volume weighted average of the prices, rounded to the nearest tick.

(c) If no trade occurs during the pre-close, the following will be
given consideration:


“seller Clearing Member”) may submit delivery tender notices to the
clearing Service Provider on their own behalf or on the behalf of their
open short futures position holders, as applicable, in a format acceptable to
the Clearing Service Provider. Upon receipt of a delivery tender notice,
the Clearing Service Provider will make the appropriate delivery
assignment.

(ii) Notice Day. On the Business Day after the
delivery tender notice has been submitted and the delivery assignment has
been made by the Clearing Service Provider, the seller Clearing Member
must provide to the buyer Clearing Member(s) a description of the
underlying EPA SOQ: Emission Allowances to be delivered. The buyer
Clearing Member(s) must provide EPA Allowance Tracking System
(“ATS”) account information to the seller Clearing Member. This
information exchange must be completed by 4:00 p.m. (Central time) on
Notice Day. The seller Clearing Member must ensure the appropriate
emission allowances are on deposit in its or its customer’s EPA ATS
account by 5:00 p.m. (Central time) on the Notice Day.

(iii) Delivery Day On the Delivery Day, the Clearing Service
Provider shall issue payment instructions to the respective buyer Clearing
Member(s) for the full contract value based upon the Position Day’s
settlement price in a means and manner prescribed by the Clearing Service
Provider. By 10:00 a.m. (Central time) on the Delivery Day, the seller
Clearing Member must ensure that it or its customer has electronically
submitted the SO. Emission Allowances transfer instructions via the
EPA’s Clean Air Market Division (CAMD) Business System. The seller
Clearing Member must forward the EPA confirmation of transfer to the
Clearing Service Provider as verification that the delivery has been
completed.

(iv) Payment After receipt of the EPA confirmation of
transfer from the seller Clearing Member, the Clearing Service Provider
will release the delivery proceeds to the seller Clearing Member according
the following schedule:

EPA confirmation received by the Clearing Service Provider at or
prior to 12:45 p.m. (Central time) - same day in the Clearing Service
Provider’s mid-day variation cycle, if applicable.

EPA confirmation received by the Clearing Service Provider after
12:45 p.m. (Central time) — next business day through the 6:40 a.m.
(Central time) settlement cycle.

1207. Validity of Documents


nearest tick;
2. the mid-point between the best bid and offer (volume weighted) in the
pre-close rounded to the nearest tick;
3. spread price relationships; and
4. time value between the contract months
d, The Exchange reserves the right to take into account other factors in determining
settlement prices.

Delivery Process

Clearing participants and parties trading the market must have SO, allowance tracking
accounts established with the EPA.

Delivery is a three day process consisting of Position Day, Notice Day and Delivery
Day. The three days occur over three consecutive business days,

Position Day

The tenth trading day prior to a contract's expiration (expiration occurring after the close
on the final trading day) is the first day that CCFE clearing members must report their
long futures positions in the expiring contract. The long positions as of the close of
business on the tenth trading prior to expiration, by trade date, must be reported to the
CCFE Clearing Service Provider (“CCFE CSP”) in the time frame and format required
by the CCFE CSP.

Starting on the First Position Day, CCFE clearing members (hereafter referred to as
“seller”) on behalf of their short futures position holders may submit delivery tender
notices to CCFE CSP, in a format acceptable to CCFE CSP.

Notice Day

Business day after the delivery tender notice has been submitted and the delivery
assignment made by the CCFE CSP, the seller clearing member provides to the buyer
clearing member(s) a description of the underlying EPA Emission Allowances to be
delivered. The buyer clearing member(s) provides EPA Allowance Tracking System
account information to the seller clearing member. Information exchange is to be
completed by 4:00 p.m. Central Time.

The seller clearing member must ensure the appropriate emission allowances are on
deposit in its or its customer’s EPA Allowance Tracking System account by the 5:00
p.m. Central Time.

Delivery Day

CCFE CSP will issue payment instructions to the respective buyer clearing member for
the full contract value based upon the Position Day’s settlement price in a means and
manner prescribed by CCFE CSP.

By 10:00 a.m. Central Time, the seller clearing member must ensure that it or its
customer has electronically submitted the allowance transfer instructions via the EPA’s
CAMD Business System.

Seller clearing member must forward the EPA confirmation to the CCFE CSP as
verification that the delivery has been completed.

Payment

CCFE CSP will release the delivery proceeds to the seller clearing member on the
following schedule.

EPA confirmation received by CCFE CSP prior to 12:45 p.m. CT — same day in the mid-
day variation cycle.

EPA confirmation received by CCFE CSP after 12:45 p.m. CT — next business day
through the 6:40 a.m. CT settlement cycle.

Price Limits

No daily price limits

Reportable Position Limits

25 contracts, equivalent to 625 U.S. EPA SO; Emission Allowances

Nearby Expiration Month
Speculative Position Limits

4,000 contracts, equivalent to 100,000 U.S. EPA SO, Emission Allowances per each
expiring product

Contract specifications rules may be subject to change. If CCFE determines that changes to the contract specifications
tules are warranted, reasonable efforts will be taken to provide appropriate advance notification of the changes.

This document is a summary of the CCFE contract specification rules. See the CCFE rulebook for complete contract

specification rules,

November 2006 v5.0



CCX

" Chicago Climate Exchange Chicago, ints 60509 F 312654 9979

November 30, 2006

Ms. Eileen A Donovan ro)
Acting Secretary o
Commodity Futures Trading Commission
Three Lafayette Centre

1155 21" Street, N.W.

Washington, C.C. 20581

Re: Chicago Climate Futures Exchange, LLC
Submission No. 06-11

Dear Ms. Donovan:

Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended (the “Act") and Parts
40.2 and 40.6(a) of the regulations promulgated by the Commodity Futures Trading Commission
(“CFTC”) under the Act, Chicago Climate Futures Exchange, LLC (“CCFE" or “Exchange”) hereby
submits amendments to its rule 1203 “Contract Specifications”, as discussed with CFTC staff.
The Exchange Is modifying what it previously submitted under Regulation 40.6 in its Submission
No. 06-09.

The Exchange amends Rule 1203 to allow for the simultaneous listing of vintage-specific contracts
having the same expiration dates but different delivery specifications. CCFE intends to make
these amendments effective as of December 1, 2006. The Exchange certifies that these
amendments neither violate nor are inconsistent with any portion of the Act or of the rules
thereunder.

A marked copy of the new Rule 1203 and a revised summary of the contract specifications for
‘SFI futures contracts are attached hereto. .

Should you require additional Information regarding this submission, please contact me at
312.554.0812. Please reference our submission number 06-11 in any related correspondence.

Very jy q

Ann M. Cresce
Senior Vice President & General Counsel

bal/enc.

ce: Martin Murray
Gregory Price

www.chicagoclimateexchange.com

+5 $02 146% 9%, NOK 486%,-2 VOC 1124934) P10 4322-6! HTT" N20 1898%4977%2 SFB 20000+800 C02 6}

‘ets +75pte Biodiversity +240pts Climate Chango-100pts Acid Raln A5Bpts Alr Quality +46pte Woathor +00pts Rainforests +75pts Blodtrorelty +240pt= Climate Change-100pts Aeld Raln-L5Bpts Air Quality +45pts Woathor +¢


The Exchange makes no representation regarding the authenticity, validity
or accuracy of any delivery tender notice, description of underlying EPA SO2
Emission Allowance transfer instructions, EPA confirmation of transfer or other
document or instrument delivered pursuant to these rules. “

‘Adopted 12-09-05; Revised 05-13-05;
" Revised 05-17-06

* Revised 11-01-06

Revised 08-29-05; Revised 05-17-06
* Revised 01-30-06; Revised 11-03-06
“ Deleted 11-03-06

“ Deleted 11-03-06

“i Revised 06-22-06; Revised 08-11-06
Adopted 05-13-05; Revised 11-01-06
* Revised 08-11-06

“ Chapter 13 Adopted 03-23-05; Chapter 13 Removed 05-13-05


CHAPTER 12!
SULFUR FINANCIAL INSTRUMENT FUTURES
CONTRACT SPECIFICATIONS

1201. Scope of Chapter

This Chapter applies to trading in Sulfur Financial Instrument futures
contacts. The procedures for clearing, trading, settlement, and any other matters
not specifically covered herein shall be governed by the generally applicable rules
of the Exchange.

1202. Eligibility

Clearing members and Trading Privilege Holders trading in Sulfur
Financial Instruments futures contacts must have SO2 registry accounts
established with the EPA.

1203. Contract Specifications"

(a) Contract size. | The contract size for the Sulfur Financial Instrument
futures contract is 25 of U.S. Environmental Protection Agency (“EPA”) SO
emission allowances (“SO2 Emission Allowances”).

(b) Schedule."

Gi) Standard-cycle Contract Listing The Exchange may list for
trading up to six consecutive quarterly contract months on the March
quarterly cycle (March, June, September, December) for the Sulfur
Financial Instrument futures contract as well as up to eight annual
December contracts after the last listed quarterly contract; and the front
two serial calendar months.

Gi) CCFE may list_any other calendar_month contract off the
standard-cycle listing schedule through the last annual December contract.

(ii) The trading hours for the Sulfur Financial Instrument futures
contract shall be determined by the Exchange from time to time.

(c) Products. Within any listed contract, the Exchange may offer one or
more vintage-vear__ specific products having different delivery
specification How
i) Front-Yeu
ii) 1-Year Deferred Vintage
iii)2-Ycar Deferred Vintage
iv)3-Year Deferred Vintage
v) 4-Year Deferred Vintage



(vi)Additional Deferred Vintages as determined by the Exchange.

a + ati, 4]: disted_centract CEE ma: ffor ditt 4
+t fie. + th. +} rs dat a +}:
s P tRetetS S F ‘
listed-contracts—but-h: _different-deli fieat defined
Histed- contracts but having-dt SE aH
Rule 1205. Fhe-trading—days—for Sulfur Fi ast + fut
sontract hal-bedetes d-by-theExeh: 3 $ +o

(ed) Termination of Trading (Contract Expiration). With the exception
of February contracts, the last day of trading of a contract is the last business day of the
expiration month at the normal Trading Session closing time

The last trading day for February contracts will be at the normal Trading Session closing
time on the third to last business day of the month in order to coordinate with the EPA’s
March I“ annual SO» compliance deadline.

(dc) New Contract Listing. A new standard-cycle contract month will
be listed on the next Business Day following a Contract Expiration.

(ef) | Minimum Tick Increment. |The minimum tick increment of the
Sulfur Financial Instrument futures contract is $1.00 per SO: Emission
Allowance, which is equal to $25.00 per contract.

(fg) Reportable Position. Pursuant to Commission Regulation §15.03
and Commission Regulation Part 17, the position level that is required to the
Commission is any open position in Sulfur Financial Instrument futures
producteontraetss at the close of trading on any trading day equal to or in excess
of twenty-five contracts on either side of the market.

If one product within a contract month has a reportable position, all
contract months’ positions must be reported.

(gh) Position Limits.” A person may not own or control more than
4,000 contracts, equivalent to 100,000 SO Emission Allowances, net long or net
short, in each nearby month expiring futures producteontractmonth.

For the purposes of this rule, the positions of all accounts for which a
person directly or indirectly controls trading shall be included, as described in
Rule 409(e).