Ch2 Registration

tit bara that4 hould-b: istered-as-antIntroducins Broker—Fut

230.02 Registration of Memberships_and_Class_A Shares for Eligible—Business
Organizations-a_ Member Firm- An individual desiring to register a membership and/or
shares of Class A common stock of CBOT Holdings fer-in order to qualify an cEligible
bBusiness oOrganization as_a_ member firm under Rule 230.00, and_an cligible business
organization secking to qualify as a member firm, shall submit as-applications in the forms

designated by the Exchange. givingth f-the-Fligible Bust Ores tionand-the
busi 3; hich jt 4. eed vel thy inte +} t ted-bythe Exch. - ‘he

Busi Orsanizati In—additi the—applicatio: +-desionatethe 4 fb: 5
$ - 7 PP Ss a fs s

- : s :__The categories of
member firms and the numbers of memberships and/or numbers of shares of Class A common
stock of CBOT Holdings that must be registered on behalf of a member firm in cach category
are listed below.

Membership Type Trading Rights Class A Shares
Clearing Member Firms
(la) Registered FCM 2 Series B-1 (Full) 54,676
(1b) Proprietary Trading Firm 1 Series B-1 (Full) 27.338
(1c) Sole Proprietor 1 Series B-1 (Full) 27,338
Equity Member Firms
(2a) Registered FCM 1 Series B-1 (Full) 27,338
(2b) Proprietary Trading Firm 1 Series B-1 (Full); or 27,338
1 Series B-2 (Associate) 10.000

(2c) Pools, Hedge Funds or Other 4 Series B-1 (Full) and

Collective Investment Vehicles 2 Scrics B-2 (Associate) 129,352

(Category (2c) qualifies the Equity Member Firm, and up to five additional such entities
where the firm exercises trading control over, is under common trading control with, or

wholly owns such entities.)
Trading Member Firms

(Ga)_ Registered FCM 1 Series B-1 (Full) None
(3b) Proprietary Trading Firm 1 Series B-1 (Full); or None
1 Serics B-2 (Associate): or None
1 Series B-4 (IDEM); or None
1 Series B-5 (COM) None
(3c) Pools, Hedge Funds or Other 2 Series B-1 (Full) and

216


Ch2 Purchase and Sale or Transfer of Membership

sale of his membership and any associated shares of Class A common stock of CBOT

Holdings, as defined in Rule 252.00.ferthwith by the-Beard.

237


(gh)

250.01
(or his

Ch2 Purchase and Sale or Transfer of Membership

(vi) A member/grantor, who is the sole trustee of a trust to which he has transferred
his membership, may temporarily transfer the-trading-right J-privtt his
membership to a member of his same family, as defined in paragraph (cd) above.

(vii)A membership held in trust may not be registered fer-to qualify a member firm

privitegespursuant to Rule 230.00, unless it is a self-owned registered
membership and the member complies with procedures and conditions established

by the Exchange.

(viii)The transfer shall be revoked and the membership shall revert to the transferor
upon official notice to the Exchange that the trust has been revoked.

Notice of Membership Sale or Transfer and Filing Claims —
0) ? :

ta busi day-on-the-following busi day}-{“notice- days}, {The Exchange
shall make available to the membership a notice listing the following claims
events:: each sale, transfer or exchange of a membership;; each termination or
expiration of a delegation agreement;; each termination of the nomination of an
individual to exercise the rights and privileges of a membership that is owned by a
member firm;; and each termination of registration of a membership on behalf of a
member firm, whether individually-owned or firm-owned, that occurred during the
period beginning on the preceding notice day and ending on the business day
preceding the current notice day.

(ii) A member or member firm, to establish his or its claim and to become entitled to
his or its rights under Rule 252.00 to share in the proceeds of a membership and any
associated shares of Class A common stock of CBOT Holdings as provided therein,
must file a statement of claim with the Member Services Department within 20
days after by neater thanthe -business-day immediately preceding the -notice-day
that-folt the netiee-day hich-the Exchange prevides-makes notice available
to the membership of the relevant claims event-te-+the-membership. However, the
Board may determine to extend this period, in its discretion, based upon the
circumstances of a particular claims event, The Exchange shall hold the proceeds
from the sale, transfer or other disposition of a membership and any associated
shares of Class A common stock of CBOT Holdings until such time as the relevant
claims period has run and/or any disputed claims have been resolved. Members
and member firms may not assert claims against such proceeds to the extent that
such claims result from conduct that occurred subsequent to the sale, transfer or
other disposition of the membership and any associated shares of Class A common
stock of CBOT Holdings. (07/04/05)

Sale and Transfer of Membership and Continuing Jurisdiction - A member
legal representative) desiring to sell his membership shall deliver to the Department of

Member Services a signed authorization of sale, in the form prescribed by the Exchange. The
member must also deliver to the Department of Member Services a signed consent to
jurisdiction in the form prescribed by the Exchange before his authorization of sale will be
accepted. With respect to the sale of a firm-owned membership, the consent to jurisdiction
must be signed by the last nominee and, if the sale would terminate the firm's member firm
status, a consent to jurisdiction must also be executed on behalf of the firm.

The Exchange shall continue to have jurisdiction with respect to members and member firms
for a period of five years after the termination of such individuals’ or firms’ membership

233


Ch2 Insolvency

Sueh-state: + shall-in-th f- h hi £ the Exch: a art £

285.05 Financial Requirements -

A. All member firms that are registered as Futures Commission Merchants must comply
with the requirements set forth in the following CFTC Regulations:

1. 1.10 - Financial reports;

a. In addition to the requirements set forth in CFTC Regulation 1.10 each
member FCM must:

1. File with the Exchange unaudited monthly financial statements,
including an unaudited monthly financial statement as of the firm's
fiscal year end; and

2. Submit with the certified year-end financial statement a reconciliation
between the certified financial statement and the unaudited monthly
financial statement as of the firm’s fiscal year end; and

3. For all financial statement filings, submit a Statement of Income (Loss)
for the period between the date of the most recent financial statement

242


Ch2 Applicants

(b) Series B-2 (Associate) members — Government Instruments Market; Index Debt and
Energy Market; and Commodity Options Market

(c) Series B-3 (GIM) members — Government Instruments Market
(d) Series B-4 (IDEM) members — Index, Debt and Energy Market
(e) Series B-5 (COM) members —- Commodity Options Market

Members shall have the right, subject to the Rules and Regulations of the Exchange, to trade
as principal and as broker for others, to communicate from the Floor of the Exchange with
persons not on the Floor of the Exchange, and to solicit orders from others from the Floor of
the Exchange, only with respect to the eligible futures and/or options contracts designated
above.

Series B-2 (Associate), Series B-3 (GIM), Series B-4 (IDEM), and Series B-5 (COM)
memberships shall not carry with them the attributes of Series B-1 (Full) memberships under
Article Fifth(b) of the Certificate of Incorporation of the Chicago Board Options Exchange.
(05/01/05)

212.01 Registered Entities - Notwithstanding any other Regulation, any member who is
associated as a partner, shareholder, member, officer, manager, employee, or consultant with
any entity or natural person that is or should be registered as an Introducing Broker, Futures
Commission Merchant, Commodity Trading Advisor or Commodity Pool Operator as those
terms are defined in Section la of the Commodity Exchange Act and/or 17 C.F.R. 1.3, mai
not solicit orders of others from the Floor of the Exchange unless the entity or natural person
for which or for whom the member is soliciting orders is also a member firm or a member of
the Exchange.

221.00 Delegation - An individual member may delegate the trading rights and privileges of a
Series B-1 (Full), Series B-2 (Associate), Series B-3 (GIM), Series B-4 (IDEM), or Series B-5
(COM) membership to an individual (a "delegate") upon the following terms and conditions:

(a) The delegate shall first be approved by the Exchange under the standards of Rule
200.00 and shall sign a written agreement to become familiar with, observe and be
bound by the Certificate of Incorporation, Bylaws, Rules, and Regulations of the
Exchange, and all amendments subsequently made thereto. An approved delegate,
who is not subject to a suspension or expulsion, shall remain approved to enter a new
delegation agreement within six (6) months following the termination of the previous
delegation agreement. The Exchange may, in its discretion, grant extensions of this six
(6) month approval period.

(b) The delegation agreement, any amendment thereto, and any termination, revocation,
or renewal thereof, shall be in writing in such form as the Exchange may prescribe,
and a copy thereof shall be filed by the member with the Exchange as a precondition
to its effectiveness: Provided, however, the delegation agreement shall terminate
automatically upon the happening of any of the following events:

(1) Loss of any of the qualifications for entering a delegation agreement, such as sale
of the membership of the member or expulsion of the member or the delegate; or

(2) The suspension of the member or the delegate by the Exchange;

However, if a delegation agreement terminates automatically as the result of a sale of
the membership, the termination will not take effect until payment of the purchase
price has been made, or 5:04:30 p.m. of the next business day following the day on

210


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trust shall be di das bers tre:

(4)-the member ist} Je-setth £-the trast:
+h: " t makine-decisi £ +}
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& tre 8} tea} 426} sHemberti+ rereth rd

jnitiated-or ted-b ber 4104/03)

450.02J| Transaction Fee Status of CBOE Exercisers - See Regulation 244.07
p + R ; ; ith e

2001-A +-—bet the—E: nd_the-Chicase_Beard Opt Exch:
d-Octeber-7-2004—Feb: ik

(CBOE dified_by_the ett ts—dat





Ch2 Registration

may designate, for member firm transaction fee treatment, up to a total of five non-FCM, non-
clearing passive investor entities, where the member firm or member firm affiliate exercises
trading control over, or is under common trading control with, such entities, or in addition
with respect to a category (2c) member firm, which wholly owns such entities. For purposes
of this regulation, a “passive investor entity” is defined as a commodity pool, hedge fund, or
other collective investment vehicle.

If a Regulation 230.02, category (1a), (1b), (2a) or (2b) member firm and/or its member firm
affiliates, or (2c) member firm wishes to designate more than five passive investor entities as
described in this paragraph (ii), there _must_be an additional four (4) Series B-1 (Full)
memberships and two (2) Series B-2 (Associate) memberships and an additional 129,352
shares of Class A common stock of CBOT Holdings registered on the member firm’s behalf,
in order for the member firm and/or member firm affiliates to be eligible to designate up to a
total of six additional such entities.

(iii) Provisions Applicable to Designations of Member Firm Affiliates and Passive Investor
Entities — All_designations_of member firm affiliates and passive investor entities, as
described in paragraphs (i) and (ii) above, shall be subject to the following provisions:

(a) In order to become effective, the designation must be documented with, and approved by.
the Exchange in such manner as the Exchange prescribes.

(b) Upon such designation, the member firm affiliate or passive investor entity shall be
subject to the Exchange’s jurisdiction and to all duties and obligations imposed upon
members and member firms under the Rules and Regulations; provided, however, that the
Exchange may exempt such member firm affiliates or passive investor entities from any
such duty or obligation which, in the Exchange’s sole judgment, is incompatible or in
conflict with, or is unrelated to, the activities of the member firm affiliate or passive

investor entity.

(c) The Exchange may withdraw its approval of such designation for good cause.

(d) A_non-qualifying membership and non-qualifying shares of Class A common stock of
CBOT Holdings described in paragraph (i)(b), and all of the memberships and shares of
Class A Common stock of CBOT Holdings described in paragraphs (i)(c) and (ii), will be
subject to sale by the Exchange for the acts or delinquencies of the member firm by which
they are designated or for which they are registered, and/or for the acts or delinquencies of
any member firm affiliate or passive investor entity that has been designated by the
member firm under this regulation.

(e) Upon the sale or transfer of a non-qualifying membership or any of the shares of Class A
common stock of CBOT Holdings described in paragraph (i)(b) or any of the
memberships or shares of Class A common stock of CBOT Holdings described in
paragraphs (i)(c) and (ii), claims may be filed pursuant to Regulation 249.01(g) against the
member firm by which they are designated or for which they are registered, and/or against
any member firm affiliate or passive investor entity that has been designated by the
member firm under this regulation.

230.04 Liability of Registered Memberships and Registered Shares — Member firms and
member firm affiliates shall be subject to all requirements and prohibitions contained in the
Rules and Regulations that are applicable to members, unless otherwise specificd in the Rules
and Regulations. All nominees on memberships registered to qualify a member firm or
member firm affiliate shall be subject to discipline, and all registered memberships and
registered shares of Class A common stock of CBOT Holdings shall be subject to sale by the

220


Ch2 Insolvency

270.00 Insolvency - A member, member firm, or any other person with trading

privileges, who failste-perferm-his-contracts_is insolvent, or is the subject of a petition for
bankruptcy_or its equivalent, or whose membership is registered for a member firm which

fails te-perferm-its-contracts,is insolvent, or is the subject of a petition for bankruptcy _or its
equivalent, shall immediately inform the Secretary in writing that he or such member firm is
insolvent, or is the subject of a petition for bankruptcy or its equivalentunable+e-meethis-or
it: nats—and-p: ptnetice-+t £- shall be—ei: to-the-Exeh . Subject to the
provisions of Regulation 540.06, the Chairman of the Board may, upon the recommendation
of the Business Conduct Committee or the Financial Compliance Committee, he shattthereby
beeome-suspended such member or member firm from membership until, after having settled
with his or its creditors,erthe-crediters-of such membertirnt he such member or member
firm has been reinstated by the Board.

If a clearing member firm learns that any of the above-specified conditions apply to a member
or member firm whose trades it clears, the clearing member firm must also immediately
provide written notice thereof to the Secretary-and-prempt netice-thereef shall -be-givento of
the Exchange. For purposes of this provision, a clearing member firm will be deemed to have
learned of such a conditions, if a member who is registered for the firm, and is also a general
partner of a partnership, an officer or director of a corporation, or a manager of a limited
liability company, has actual knowledge thereof.

Nothing in this Rule shall preclude disciplinary action for the violation of any Rule or
Regulation of the Exchange which contributed to the condition for which the person is
suspended under this Rule. (04/01/05)

270.01 Restrictions on Operations - The Financial Compliance Committee shall advise
the Chairman or Acting Chairman of the Board whenever it appears that a member—member
firm_or member firm affiliate, as defined in Regulation 230.03helly-ewned-affiiate-of such
member or member firm-oF-any-other person-with-trading privileges is insolvent; is failing to
meet the minimum capital requirements of the Exchange and cannot demonstrate its ability to
achieve compliance; is in such financial condition that it cannot be permitted to continue in
business with safety to its customers, its creditors, or the Exchange; or such other condition or
practice exists which may adversely affect the safety of funds or positions carried for others.
Upon the receipt of such advice, the Chairman or Acting Chairman may, subject to the
provisions of Regulation 540.06, impose any restriction upon the operations of asuch member;
member firm or member firm affiliate whelly-owned-affiliate-or anyother personswith trading

privileges as he deems appropriate in the circumstances.—inehiding—but not timited teh

@ECOURTS;
tb} 4th £ ith fund: t-oth: +} tected by} hich ied
5 Pp Pp af are-earried for
te} Restrict +h + +f fond ¢ Sith fF oth bi +t
« Sap S SOF s
basis:

Any member-member firm_or member firm affiliatetheirwhelly-owned-affilates,orpersons

withtrading-_privileges-failing or refusing to comply promptly with a restriction imposed by
the Chairman shal-may be fined, suspended, or expelled by the Exchange.

238


Additions are underlined; Deletions are struckthrough.

Chapter 2
Membership
el

Ch2 Applicants

201.00 Application for Membership - Each application for membership shall be in writing
and filed with the Exchange. All applicants for membership shall be investigated as to the
representations contained in the application. Upon receipt of the application for membership,
the Secretary shall, within fifteen days thereafter, make available to the membership the name
of the applicant—an h mean i e-bulleti ard-for a-peri

least-ten-d: fter-such netification-te-th: bershi 3,
Yy +f F mbership.

Any individual who wishes to acquire a membership for investment purposes only (and not
tor purposes of changing or influencing control of the CBOT or its affiliates) shall file an
investor application as prescribed by the Exchange. An individual who is approved as an
investor and who subsequently wishes to engage in trading activities on the Exchange will be
subject to filing and approval of a membership application as prescribed by the Exchange.

201.02 Maintenance of Membership Qualifications

4+—_____—__———Each applicant for membership, member and member firm
immediately shall notify the Exchange, in writing, upon the occurrence of any of the following
events:

- Such applicant’s, member's or member firm’s suspension or expulsion from, or bar from
association with members of, any other exchange or self-regulatory organization, or
any order prohibiting such applicant, member or member firm from reapplying for
membership in, or trading privileges on, another exchange or self-regulatory

+ organization;

- Such applicant’s, member's or member firm’s plea of guilty to or conviction of any

felony.

Failure to notify the Exchange within ten days of the occurrence of such an event shall be an act
detrimental to the Exchange.

If_a clearing member firm learns that any of the above-specified events have occurred with
respect to a member or member firm whose trades it clears, the clearing member firm must also
immediately provide written notice thereof to Secretary of the Exchange. For purposes of this
provision, a clearing member firm will be deemed to have learned of such an event if an
individual whose membership is registered on behalf of the clearing member firm, and who is
also_a_ general partner if the firm is a partnership, an officer or director if the firm is a
corporation, or a manager if the firm is_a limited liability company, has actual_knowledge
thereof.

Baik +, tH fy +} E: hh Hs thin i: ¥ £ th, f cueh- nt-shall-b, aet
detrimental tetheExchange—-For the purpose of this regulation, "felony" shall mean any
criminal sanction that is punishable-byimprisonment-of more+th ¥ Fines ss-of
$40,000defined as a felony by the law of the applicable jurisdiction.

1) Upon the Exchange’s receipt of notification, by whatever means, of the occurrence of
any of the above-referenced events, the matter shall be referred to the Membership
Committee.; In the case of a member or member firm, the Membership Committee

201


(cd)

Ch2 Purchase and Sale or Transfer of Membership

acquiring member firm may t transfer the membership to substitute-one of its own

principals or employees-as-t iththe-right-+ ise-the-rights-and
pent ofthe bership, pursuant to the procedures and conditions
established by the Exchange, including any required deposits orf clearing firm

guarantees.

(b) A member firm that owns a membership may substitute-—as—the
nemineetransfer the membership to a principal or employee of another member
firm which is its wholly-owned subsidiary, a parent entity which owns 100% of
the member firm, or a sister entity that is 100% owned by its parent entity,
pursuant to the procedures and conditions established by the Exchange, including
any required deposits or clearing firm guarantees.

(c) Each substitution-transfer described in paragraphs (iv)(a) and (iv)(b) above,
with respect to a Series B-3 (GIM) membership, shall count toward the two
consecutive assignments specified in Rule 296.00(1).

(vi) The Exchange may discipline the member firm that owns the membership, or for
which the membership is registered, and the individual nominee, and may direct a
sale of the membership, for the acts or delinquencies of the member firm that
owns the membership or for which the membership is registered, and for the acts
or delinquencies of the individual nominee, in accordance with the Rules and
Regulations of the Exchange.

tt d a iti: tablished-by-the-Exeh includ

pur ALto-any-pr s s = Bes ry

Transfer within Family -

It shall be permissible to transfer a membership between members of the same family
(a spouse, parent, sibling, child, grandparent, grandchild, aunt, uncle or in-laws), or a
decedent's membership within the same family, on a temporary or permanent basis,
pursuant to procedures and conditions established by the Exchange, including any
required deposits or clearing firm guarantees, provided such transferee is approved for
the appropriate membership status.

A membership subject to a temporary family transfer may not be registered to qualify
a_ member firm pursuant to Rule 230.00. A temporary transfer shal] be null and void
upon a sale or transfer of the membership by the transferor, and a temporary transfer
shall be revoked upon written notice by the transferor to the transferee and the
Member Services Department, or upon official notice of the death or formally declared
incompetence of the transferor. The provisions of Rule 221.00(c) shall apply to the
transferor and the temporary transferee in the same manner that those provisions apply
to a member and his delegate. The voting rights of a Series B-1 (Full) or Series B-2

231


Ch2 Registration

Collective Investment Vehicles 1 Series B-2 (Associate) ‘None

(Category (3c) qualifies the Trading Member Firm, and up to two additional such entities
where the firm exercises trading control over, is under common trading control with, or
wholly owns such entities. Each additional Serics B-] or Series B-2 membership qualifies
one additional such entity that meets the foregoing requirements.)

(4) e-cbot Member Firms 1 Series B-] (Full) — Leased; or None

1 Series B-2 (Associate) — Leased__None

(5) Investment Only Member Firms 1 Series B-1 (Full) None
1 Series B-2 (Associate) None
1 Serics B-3 (GIM) None
1 Series B-4 (DEM) None
1 Series B-5 (COM) None

Proprictary Trading Firms, whether they arc Equity Member Firms or Trading Member Firms,
must _be wholly-owned by members or members and employecs of the firm; or must have a
business purpose deemed appropriate by the Exchange, including cash grain firms, financial
institutions, market makers designated by the Exchange, proprietary trading firms (that do not
otherwise meet the definition of a Pool, Hedge Fund or Other Collective Investment Vehicle)
or other forms of business approved by the Exchange.

4b)}—_Resistered FCM —_N. J}
3} ei

A_member firm that is qualified by the registration of one or more Scrics B-1 (Full)

memberships shall be entitled to member firm transaction fees for all contracts traded on the
Exchange. A member firm that is qualified solely by the registration of a Series B-2
(Associate), Series B-4 (IDEM) or Series B-5 (COM) membership shall only be entiticd to
member firm transaction fees with respect to those contracts in which such members have
trading privileges, respectively. However, no Investment Only Member Firm shall be entitled
to member firm transaction fees.

217


Ch2 Registration

230.14 Delegation of Approval Authority - The Chairman of the Membership
Committee, or a member of the Membership Committee who has been designated by the
Membership Committee Chairman or the Member Services Department upon delegation by
the Chairman, will have the authority to approve the application of a Series B-1 (Full) or
Series B-2 (Associate) member to register his or her membership for a member firm under
Rule 230.00, provided that the member firm is currently registered in accordance with Rule

230. 00. ‘Tho power “te--dony_such--applieationsis expressly raserved te" the Regulatory

the Chai

223


Ch2 Registration

one or more member firms, which wholly owns a member firm, or which is wholly owned by
the same parent company(ies) as a member firm. For purposes of this regulation, the term
“member firm” shall refer only to a firm registered with the Exchange pursuant to registration
categories (1a), (1b), (2a) or (2b) of Regulation 230.02.

(a) A_member firm affiliate may qualify for delegate fee treatment (i.e., the applicable
member firm fee plus the applicable delegate fee) with respect to its transactions on the
Exchange: (1) if a Series B-1 (Full) membership, leased in the name of one of its
principals or employees, and 27,338 shares of Class A common stock of CBOT Holdings
are registered on its behalf: or (2) if a Series B-2 (Associate) membership, leased in the
name of one of its principals or employees, and 10,000 shares of Class A common stock
of CBOT Holdings are registered on its behalf.

(b) A member firm which owns one or more Series B-1 (Full) or Series B-2 (Associate)
memberships, in addition to any memberships required for its own registration under Rule
230.00 (hereinafter “non-qualifying memberships”) may designate such a non-qualifying
membership _as_well_as_non-qualifying (not_required for the member firm’s own
registration) shares of Class A common stock of CBOT Holdings, to make its member
firm_affiliate eligible for member firm transaction fee treatment. A non-qualifying
membership and non-qualifying shares may not be designated for more than one member
firm affiliate at any given time. A member firm affiliate, for which a non-qualifying
Series B-1 (Full) membership has been designated, must have 27,338 shares of Class A
common stock of CBOT Holdings either registered or designated on its behalf, in order to
be eligible for member firm transaction fee treatment. A member firm affiliate, for which
a_non-qualifying Series B-2 (Associate) membership has been designated, must_have
10,000 shares of Class A common stock of CBOT Holdings either _registered_or
designated on its behalf, in order to be eligible for member firm transaction fee treatment.

(c) A member firm that has at least four (4) Series B-1 (Full) memberships and two (2) Series
B-2 (Associate) memberships and_ 129,352 shares of Class A common stock of CBOT
Holdings (which may be acquired and registered as combinations or as separate interests
in one or more transactions) registered _on its behalf, including any Series B-1 (Full)
memberships and shares of Class A common stock of CBOT Holdings required for its
own registration under Rule 230.00, may designate any number of its member firm
affiliates for member firm transaction fee treatment. A member firm whose proprietary
trading on the Exchange includes only agricultural contracts may, at its option, designate
for member firm transaction fee treatment any number of its member firm affiliates whose
proprietary trading on the Exchange also includes_only agricultural contracts, if the
member firm has at least five (5) Series B-1 (Full) memberships and 136,690 shares of
Class_A common stock of CBOT Holdings registered on its behalf (which may be
acquired _and_registered_as combinations or _as_separate interests _in_one_or more

transactions).

(ii) Member Firm Designation of Passive Investor Entities - A member firm that is registered
with the Exchange pursuant to registration categories (1a), (1b), (2a) or (2b) of Regulation
230.02, and that has at least four (4) Series B-1 (Full) memberships and two (2) Series B-2
(Associate) memberships and 129,352 shares of Class A common stock of CBOT Holdings
registered on its behalf, including any Series B-1 (Full) memberships and shares of Class A
common stock of CBOT Holdings required for its own registration under Rule 230.00, and/or
member firm affiliates of such a category (1a), (1b), (2a) or (2b) member firm, or a member
firm registered with the Exchange pursuant to registration category (2c) of Regulation 230.02.

219


(de)

(ef)

(fg)

Ch2 Purchase and Sale or Transfer of Membership

(Associate) member who makes a temporary family transfer will remain with the
transferor, and the transferor will remain cligible for elective office and committee
appointments. A temporary family transfer shall not qualify the transferee for elective
office in such circumstances where a membership is required. A temporary transfer of
a Serics B-3 (GIM) membership to a family member under this paragraph shall not
count toward the two consccutive assignments specified in Rule 296.00(1).

Sale by Legal Representative -

The membership of a deceased member or a member who has been adjudicated
incompetent may be sold by his legal representative pursuant to procedures and
conditions established by the Exchange.

Exchange of Memberships -

Members may exchange certain Sseries eof B memberships for certain other Sseries of
B memberships, either directly or indirectly, pursuant to procedures and conditions
established by the Exchange, including any required deposits or clearing firm
guarantees.

Transfer to a Trust -

(i) A member or a member's personal representative (including his or her agent under
a durable power of attorney) may transfer his or her membership to a trust of
which the member is a grantor, pursuant to procedures and conditions established
by the Exchange, if: (1) while the member is living and competent, the member is
the sole trustee of the trust, (2) the member retains the right to revoke the trust
during his or her life, and (3) all beneficiaries of the trust are members of the
grantor's family who would be eligible for a family transfer from the grantor
pursuant to section (d) of this regulation.

(ii) A trust shall take the membership subject to all of the rules of the Exchange,
including Rules 230.00 and 252.00; however, Rule 252.00 shall not apply to the
transfer of a membership to a trust wherein the member/grantor is the trustee.
The transfer of a Series B-3 (GIM) membership to a trust wherein the
member/grantor is the trustee shall not count toward the two consecutive
assignments specified in Rule 296.00(1).

(iii) The interests in the membership that inure to the beneficiaries of the trust shall be
subject to all of the rules of the Exchange; the Exchange's rights with respect to
the membership shall be superior to those of the beneficiaries; and the Exchange
shall have no liability to the beneficiaries of the trust in the event of the
mishandling of the trust assets by the trustee.

(iv) The trustee (and any successor), if not already a member, shall be required to
qualify for membership and satisfy the requirements of Chapter 2 of these Rules
and Regulations.

(v) The grantor's liability to the Exchange under Rule 209.00 shall continue with
respect to any claim arising out of an act or omission occurring prior to such
transfer, and the membership will continue to be treated as the asset of the grantor
for the purposes of Rule 209.00 and for otherwise meeting any obligations to the
Exchange arising out of the grantor's use of the membership prior to the transfer
to the trust, including fines imposed with respect to conduct occurring prior to the
transfer.

232


Ch2 Registration

g St
+ mpl +} aN tered. behalf-ef-such. jzat By4f-
P iP Poy t zi +
Series B2-44 te} bership th £ } v f-suel:
Ft +f te} SHIPS F prey s
raanization—and_10-000-sh: iwall Ae: ck-of-CBOT-Heldings+ 2
F B
therin-the ef-the £-th bership £$+th izati
incipal: " th . istered behalf-of h + A h
Pp Pi pleyees + 2 ae shal—of-s ants > ys
bershi 4: £-C} tock be ired_and. tered—as—a

least £the follows binati
OneS Bult bership-and27.338-sha
€ ‘P 7 5
One Series B2-(Associate) bership-and40,000-shares:
One Series B34GIM} bership-and-5-000-shares:
One-Series B-4 4DEM) bership-and+.100-shares-or
One Series BS(COM} bership-and-2,500-shar
Suel bershi d-shares-of Class-A toek be-s d-and-recistered-as-a

forthe _ benefit of th: berfi d-sueh: beri shal-b. titled berfi


Ch2 Applicants
(g) Formal rules of evidence need not apply, but the hearing shall not be so informal as to
be unfair.
(h) The respondent shall have the right to invoke Rule 548.00, if applicable.

(i) The Member Services Department shall be a party to the hearing and shall present its
case on those issues which are the subject of the hearing.

Gj) The respondent shall be entitled to appear personally at the hearing and to be
represented by counsel.

(kK) The parties shall be entitled to cross-examine any person¢s} appearing as witnesstes).

() The parties shall be entitled to call witnesses and to present such evidence as may be
relevant to the issue(s) presented.

(m) Pursuant to Rule 545.00, all persons within the jurisdiction of the Exchange who are
called as witnesses shall be obliged to appear at the hearing and/or to produce evidence.

(n) A substantially verbatim record of the hearing, capable of being accurately transcribed,
shall be made and shall become part of the record of the proceeding. (04/01/05)

202.03 Membership Committee's Preliminary—Decisions - All preiminary—decisions
rendered by the Membership Committee to_ deny an applicant_after_a hearing shall be in
writing and shall be based upon the weight of the evidence contained in the record of the
proceeding. A copy of the decision shall be provided to the respondent and shall include:

(a) The issue¢s) presented to the Committee;

4} Th braitted-by-th: licant ber-if £th, swe:
SP pitted by the -apphea: omnber; AY ae s :

(be) A brief summary of the evidence produced at the hearing;

(cd) A statement of findings and conclusions with respect to the issue(s) presented; _and

(de) A declaration containing the Committee's preliminary-decision to deny the applicant;

}—__—_———Al such decisions shall be rendered within thirty business days after
the conclusion of the hearing, unless, by virtue of the complexity of the issue or other special
circumstances, additional time is required.; ¢¢}- Fee tH hal—e pendent

> é verre

an application is denied by ‘the Membership Committee _after_a hearing the applicant_may

appeal the denial to the Appellate Committee pursuant to the procedures set forth in Regulation
540.05. However, the decision of the Appellate Committee shall be final and may not be

appealed to the Board.

206.02 Gratuities - No member of the Exchange shall employ any employee of the Exchange
or of the Clearing Services Provider, for any servic

bythe-Exeh such-Clearina Services Provid , without having first obtained the_written

approval of the President of the Exchange or of the Clearing Services Provider, as the-ease
yb auplicable- ml isteringth ithth f-said- ployee tt e £44
ices dh 20untLofsaid pensation.

No member shall give any compensation or gratuity to an employee of the Clearing Services

206


Ch2 Purchase and Sale or Transfer of Membership

249.01 Purchase and Sale or Transfer of Membership - Memberships may not be
purchased, sold or transferred except as authorized by the Exchange.

(a) Purchase and Sale of Memberships by Individuals —

(i) An individual may purchase or sell a membership pursuant to the procedures and
conditions established by the Exchange, including any required deposits or
clearing member guarantee agreements.

A clearing member guarantee agreement shall be executed on a form prescribed by
the Exchange. In the event that the prospective purchaser of a membership fails to
make payment in the amount of his bid by 45:390 p.m. of the next business day
following the day on which he was notified that his bid was matched to an offer,
the—any_clearing member who has executed a clearing member guarantee
agreement shall purchase the membership and shall make payment in the full
amount of the bid by 45:390 p.m. of the business day following the day upon
which payment was due from the prospective purchaser.

Failure to fulfill the obligations set forth in a clearing member guarantee
agreement shall constitute an_acts detrimental to the interest and welfare of the
Exchange.

(ii) Within ten (10) business days of notice to the purchaser that his or her bid has
been matched to an offer, the purchaser, if not already a member, shall file with
the Department of Member Services an application for the appropriate
membership status, in such form as may be prescribed by the Exchange. Such
form shall include an agreement by the applicant to take no recourse against the
Exchange in the event he or she is not approved for a particular membership
status, except as may be permitted under Section 8c of the Commodity Exchange
Act, as amended, and a release of the Exchange of any claim or right that such
individual would otherwise have had by reason of such failure to be so
eleetedapproved. No person may exercise the rights of a particular membership
status until he or she is approved for such membership status.

If a purchaser of a membership fails to file an application for membership, is not
approved for membership status, or if for any reason his application is withdrawn,
the Exchange shall retain any membership processing fee charged pursuant to
Rule 243.00, and the purchaser shall assume all risk of gain or loss from the resale
of the membership. The purchaser shall take all necessary steps to sell the
membership within thirty (30) days of notification of his failure to be approved
for membership status, withdrawal of his application, or the purchase of the
membership if he failed to file an application.

If the purchaser fails to effect a sale within the time period specified in this
section (ii), the Exchange shall be entitled to sell the membership and any
associated restricted shares of Class A common stock of CBOT Holdings at the
price of the highest bid to purchase at any time during the next business day
following the thirtieth (30) day after notification of his failure to be approved for
membership status, withdrawal of his application, or the purchase of the
membership if he failed to file an application. If, at the open of business on the
next business day following the thirtieth day after such notification, withdrawal,
or purchase, there is no bid to purchase, the membership and any associated
restricted shares of Class A common stock of CBOT Holdings shall be offered for

229


Ch2 Assessments and Fees

in the account, in accordance with Regulation 244.06._An account owned by and held in the
name _of a non-member spouse or other relative of a member shall not be considered_a
member’s account.

244.02 Member's Own Account _in Trust - For the purpose _of Rule 244.00, a
commodity futures and/or commodity options trading account placed in trust shall be deemed
a “member’s own account” if the following conditions are satisfied:

(1) the member is the sole settlor of the trust; and

(2) the member is one of the trustees of the trust and as such trustee, has sole control over
the investment-making decisions of the trust; and

__(3) the beneficiaries of the trust include only the member, the member’s spouse and/or the
member’s descendants; and

(4) the trust declaration expressly incorporates the Rules _and Regulations of the
Exchange, as may be amended; and

(5) the interest in the trust that inures to the beneficiaries of the trust shall be subject to all
Rules and Regulations of the Exchange, as may be amended; and

__(6) the non-member trustee, if any, expressly agrees in the trust declaration, to be subject
to all Rules and Regulations of the Exchange, as amended; and

(7) the member provides to the Exchange’s Member Services Department, a copy of the
trust declaration creating the trust, as well as any amendments thereto, along with a
letter_from_an attorney stating that in the attorney’s opinion, the trust created is
designed to achieve the estate planning objectives of the member.

Upon the member’s death, or if the member is adjudged incompetent, any commodity futures
and/or commodity options trading account placed in trust pursuant to this Regulation by such
member will be treated as a non-member trading account for purposes of implementing Rule
244.00.

244.03 Member Firm’s Proprietary Account - For the purpose of implementing Rule
244.00, the term “proprietary account of a member firm” shall refer only to those commodity
futures and/or commodity options trading accounts that are wholly owned by and held in the
name of the member firm. For an account to qualify as a member firm proprietary account,
any individual who initiates and/or enters trades on behalf of the proprietary account (unless
he owns a membership and is entering trades within the scope of his membership privileges)
must meet the following requirements:

(1) may not provide trading capital for the account; and

(2) may not have responsibility to provide capital based on trading losses; and

(3) for_individuals_that_are_not_issued_a W-2 (or comparable documentation in
jurisdictions other than the United States) the firm must have a written agreement
detailing the full terms of their compensation agreements; and

(4) may not contribute subordinated debt, unless the individual is a partner, member of a
limited liability company, or shareholder of the member firm; and

(5) gross trading profits and losses must be reported in the firm’s income statement.

Any account that does not meet the above criteria will be considered a joint account with the
individual entering the trades and, therefore, must comply with Regulation 244.06.

226


Ch2 Applicants

3-—_A#t the-heari ducted. nt-to-Sections—t-or 2(e)-abk is-hel.



Ch2 Applicants

hich diately shall + 4 +h ttert det +f if th, } fiiciant hacic t
reeommendpromptly reconsider that the member’s or member firm’s membership
status be—recensidered. In connection with such reconsideration, the _member_or
member firm shall have the right to_a hearing before the Membership Committee
pursuant to the hearing procedures set forth in Regulation 202.02, unless_the
Membership Committee determines to recommend that the Chairman of the Exchange
take summary action as described in paragraph (2) below. However, a member will
not be entitled to appear personally at the hearing, and will only be permitted to appear
through counsel or another representative of his choosing if he i is incarcerated at the
time of the hearing. Fhe Mem I minittee-shall-a eirme

* Ht f4es-detersiiay. inthis+egard, Upon full consideration of all “of the
evidence before it, the Membership Committee may take one or more of the following
actions:

(a) determine that the member’s or member firm’s membership status should not be
modified;

(b) refer the matter to the Office of Investigations and Audits for an investigation to
determine whether violations of the Rules and Regulations have occurred;

(c)__ recommend that the Board of Directors deny the member’s or member _firm’s
access to the floor or to the c-cbot system pending the conclusion of any
investigation or disciplinary proceedings resulting therefrom, pursuant to Rule
$21.00: or

(d)__ recommend that the Board of Directors expel the member or member firm.

(2).___ The Chairman of the Exchange, upon the advice of the Membership Committee, is

authorized to take summary action-pursuantte-thisregulatien, when immediate action is
necessary to protect the best interests of the marketplace or membership, including denial

of the member’s or member firm’s access to the floor or to the e-cbot system, without
affording prior opportunity for hearing. Such action shall be subject to the procedures set
forth in Regulation 540.06, except that any hearing shall be held before the Membership
Committee, the Member Services Department shall be a party to the hearing and present
the case on those matters which are the subject of the hearing, and a member will not be
entitled to appear personally at a hearing, and will only be permitted to appear through
counsel or another representative of his choosing, if he is incarcerated at the time of the

Fh f¢ Hs rf edi halt at, +b ti
hearing. SP ply
fa) Thi dent—shalt da racticable—be- .d- +h ti efx thi
ed P q P3 >
} Tf r Ht +t ticabl. +h. dent-shall-bi d
action-istaken_Tf-p p pi
th. ‘7 + th, est bh toni Thi .e hal:
p pportuniby hall:
(1) State the act
CT mH 5
(2) Breft tate-th forth $: id
+ y 2
43) Stat th £f +} +; and-d: $e-2 d-th: a Fat: £ +h. HOR:

b}— Th dent-shalt-h: the-rishtte-b: ated bytecal + th
7 S ei

202


ih ith-respect-to-al} tract | ith- + tract hich-Series-_B-2

Pp al-eontracts-oronty Fespeett

fan jate}-Members-have- tradi: iyi th ab

cs ate} SP > ry Oe:

An-Fligible Busi Q: ization h: mberfi aEsuantto

igible-B: ‘ganization, purs
this Rule 230.00 be-a-CBOFCl} d-to-clearing-_privi} ith
spect-to-al} tracts t-to-th: ts-of-Rule-703.00-—Memb

firmas—shall_b: biectto—all tained—in—the-Rul 4

230.01 Ownership of Registered Memberships and Registered Shares - For purposes of
Rule 230.00 and Regulation 230.02, all Series B_ memberships and_all shares of Class A
common stock of CBOT Holdings registered on behalf of a member firm must be owned by
either the member firm, another member firm which is wholly owned by such member firm.

which wholly owns such member firm, or which is wholly owned by the same_parent
company(ies) as such member firm, or the nominees or member-shareholders who registered
such memberships or shares, except in those instances where a leased membership and/or the
lessor’s shares of Class A common stock may be registered for a member firm or a member
firm affiliate under Rule 230.00 or Regulation 230.02 or 230.03.

alt ; hall-be-s: ot to-d

Line-and-t: istered berships-and-sh: wae



(b)

(©)

@

©

()

Ch2 Applicants

Services Department as soon as practicable. At least ten (10) business days in advance
of the hearing, the Member Services Department shall submit to the hearing officer.
with a copy to respondent, copies of all documents which the Member Services
Department intends to rely upon in presenting its case, as well as the names of any

witnesses the Department intends to call, Atteastten-10}-business-days-in-advance-of

the-h th Jent—shall_submitte+the—heart fie ith tot}
Ss P swith Spy
Member-Services-Department ies-ofall-d. ats-whieh-the- dentintends-+
} ¥Ser partment, cop: iP nds-+to
1 i tine hi hi swell-as—thi £ itn th
yap P Sea ofan S6US

The Member Services Department shall be entitled in advance of the hearing to examine
all documents in the possession or under the control of the respondent which will be
relied upon by the respondent in addressing the issue(s) contained in the Preliminary
Denial Letter or which are relevant to those issues. The Member Services Department
shall make its request to examine any such documents by submitting it in writing to the

respondent as soon as Practicable. Atteastten{10}-business_days-in-advance-of th
+9 dent 4 f-all-d. 7 hich the -M. berS, ies Dp Ft 4
Py P COP} dee ‘ a SemicesDepar
wt dot |: + +} ts vel} the f a fae th
4 +yuponin-pres s + aes

At least ten (10) business days in advance of the hearing.
the respondent shall submit to the hearing officer, with a copy to the Member Services
Department, copies of all documents which the respondent intends to rely upon in
presenting his or her case, as well as the names of any witnesses the respondent intends
to call.

Any dispute over a request to examine any document in the possession or under the
control of either party shall be submitted to the Chairman of the Committee for
resolution only after the parties have made all reasonable attempts to resolve the dispute
among themselves.

The hearing panel may refuse to consider any document which was not made available
to the opponent of the evidence or was not disclosed in accordance with this
paragraphregulation. The panel may also exclude the testimony of any witness whose
name was not submitted to the opponent of the witness as provided above. The hearing
panel may consider such evidence or testimony upon a clear showing that such evidence
was not ascertainable by due diligence at least ten (10) business days in advance of the
hearing and that there was insufficient time prior to the hearing to bring such evidence
to the attention of the opposing party.

The hearing shall be promptly held before disinterested members of the Membership
Committee or any duly appointed Subcommittee thereof after reasonable notice to the
parties. No member of the Membership Committee may serve on a hearing panel in a
particular matter if he or she or any person or firm with which he or she is affiliated has
a financial, personal or other direct interest in the matter under consideration, or has a
relationship with the respondent, of the type described in Regulation 188.04(a).

After service of the preliminary denial letter, both parties to the hearing are prohibited
from making any ex parte contacts with any member of the Membership Committee.
For the purpose of this paragraph, an "ex parte contact" shall mean any communication,
either written or oral, which relates directly or indirectly to the issue to be heard and
which is made to a member of the Membership Committee who will be a member of the
panel which shall decide the issue.

205


Ch2 Registration

Exchange for the acts or delinquencies of the member firm, or any member firm affiliate
which is qualified by such registered memberships or shares, as well as for those of such
nominees or any member-shareholders who have registered shares on behalf of the member
firm. In addition, the proceeds of the sale or transfer of any registered memberships or
registered shares of Class A common stock shall be subject to claims pursuant to Rule 252.00.

230.053 Designated—Persens—_Consent_to Jurisdiction by Persons with a Financial
Interest in, or Control over, a Member Firm -

(6}—Any indivi . is .
nonmember entity;who or which holds more than a 25% financial interest in a member
firm, or who or which exercises actual control over the management of the member
firm may, at the Exchange's sole discretion, be required to execute a Consent to

Jurisdiction in such form as may be prescribed by the Exchange. Upenthemenrber
fi U # it the-Mempbersh ip <-FE: Ly ittees it

jae. 14
P y Pp

230.065 Additional Seat Requirement - A firm registered under Regulation 230.02,
Category (2c)(3) may take up to eighteen months from the date of its registration approval. if
such approval was granted prior to April 26, 2006, to acquire and complete the registration of
its six required memberships and 129,352 shares of Class A common stock of CBOT
Holdings. However, no such firm will be approved for member firm status until such time as
it has purchased, or has registered on its behalf, at least one Series B-1 (Full) membership and
27,338 shares of Class A common stock of CBOT Holdings and one Series B-2 (Associate)
membership and 10,000 shares of Class A common stock of CBOT Holdings.

A firm registered under Regulation 230.02, Category (1a), (1b), (2a) or (2b) may take up to
eighteen months from the date that it has designated a commodity pool or hedge fund for
member transaction fee treatment; pursuant to Regulation 450-02)230.03, if such designation
was made prior to April 26, 2006, in which to acquire and complete registration of the six
memberships and 129,352 shares of Class A common stock of CBOT Holdings required for
this purpose. In order to initiate this designation process, the firm must have purchased or
must have registered on its behalf, at least one Series B-1 (Full) membership and 27,338
shares of Class A common stock of CBOT Holdings and one Series B-2 (Associate)
membership and 10,000 shares of Class A common stock of CBOT Holdings.

Until such time as the membership/stock requirement has been met, the Category (2c)@)
member firm and the qualified commodity pool or hedge fund of a Category (1a), (1b), (2a)
and (2b) member firms will continue to be charged exchange transaction fees at the non-
member level. Once the membership/stock requirement has been completely satisfied, the

221


April 28, 2006 : may ,

Ms. Jean A. Webb

Secretary

Commodity Futures Trading Commission
Three Lafayette Center

1155 21" Street, N.W.

Washington, D.C. 20581

Reference File # 2668.01
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 Rulebook Chapter 2 “Membership”, and to related

provisions, per the attached texts (additions underlined; deletions struck through).

The referenced amendments represent a comprehensive streamlining and updating of this
rulebook chapter. In addition, certain existing provisions from Rulebook Chapters 3 and
4 are being relocated to Chapter 2 to achieve a more logical arrangement of related rules.
The key changes incorporated in the revised Chapter 2 are summarized below.

Rule 230 and Regulation 230.02 establish a new category of member firm, the
“Trading Member Firm”. Non-clearing entities may qualify for Trading Member
Firm status and gain eligibility for reduced transaction fees through the
registration of Series B memberships, without being required also to register
shares of CBOT Holdings, Inc. Class A common stock. (Member firms which
register both memberships and stock as specified in these provisions will qualify
as “Equity Member Firms”. Equity Member Firms will be eligible for transaction
fee rates lower than these applicable to Trading Member Firms.)

Regulation 201.02 requires a clearing firm to notify the Exchange if it has actual
knowledge that a member whose trades it clears has been suspended or expelled
from another self-regulatory organization or has been convicted of a felony. This
obligation is consistent with the obligation of a clearing member firm to notify the
Exchange of the bankruptcy of a member whose trades it clears pursuant to Rule
270.00. Regulation 201.02 also includes as triggering events not only a
suspension or expulsion, but also a bar from association with members or an order
prohibiting a former member from reapplying for membership, since these events
are similar in their impact and severity.


Ch2 Insolvency

approved electronic transmission must be accompanied by the CBOT
assigned Personal Identification Numbers (PINsS) of the authorized
signers. The PIN sumber-will constitute and become a substitute for
the manual signature of the authorized signer-te-the-elecironically-filed
finaneialrepert. The PIN is a representation by the authorized signer
that, to the best of his or her knowledge, all information contained in
the statement being transmitted under the PIN is true, correct and
complete.

67. The unauthorized use of a CBOT assigned Personal Identification
Number for electronic attestation by an unauthorized party is forbidden.

2. 1.12 - Maintenance of minimum financial requirements—by—futures—commmission
merchants; and

3. 1.16 - Qualifications and reports of accountants; and

4. 1.17 - Minimum financial requirements—fer—futures—comunissi: hants—and
introducing brokers; and

5. 1.18 - Records for and relating to financial reporting and monthly computation-by
1.20 through 1.30 - Customers’ Money, Securities, and Property; and

1.32 - Segregated account; daily computation and record; and

1.34 — Monthly record, “point balance”;

ko Jo aw

1.36(a) — Record of securitics and property reccived from_customers and option

customers; and

108. 30.7 - Treatment of foreign futures or foreign options secured amount.

Notwithstanding the foregoing requirements, the CBOT may impose additional
accounting, reporting, financial and/or operational requirements as determined necessary

by the Exchange.

Each non-FCM Clearing Member firm must file with the Exchange a certified year-end
financial statement within 90 days of the firm’s year end. In addition, such a firm is also
required to file, within 45 days of the statement dates, unaudited quarterly financial
statements for each of the three quarters that do not end on the firm’s year end.

Sole Proprietor Clearing Members must file with the Exchange unaudited quarterly
financial statements within 45 days of the statement dates.

For firms that are regular to deliver agricultural products see Appendix 4E.
For firms that are regular to deliver Rough Rice see Appendix 37D.

In addition, any FCMs, Non-FCMs, or Sole Proprietors who are CBOT Clearing
Members must comply with any additional minimum financial requirements or financial
statement filing requirements imposed on such members by the Exchange, or by the
Clearing Services Provider, pursuant to a Clearing Services Agreement.

Exchange staff may grant exceptions to the financial requirements imposed by this
Regulation, unless required by the Commodity Futures Trading Commission, for good
cause, if it is determined that such exceptions will not jeopardize the financial integrity of
the Exchange, or the Clearing Services Provider, as applicable. (10/01/03)

244


(c)

Ch2 Applicants

claims shall be subordinated to the claims of the Primary Clearing Member. Such written
permission of the Primary Clearing Member must be filed with the Member Services
Department. Written authorization from the other clearing member, authorizing the non-
clearing member to submit trades through the clearing member, must also be filed with
the Member Services Department. Thereafter, such clearing member shall be liable upon
all trades made by the non-clearing member for an account maintained with the clearing
member (unless authorization is revoked as provided _in (c) below) and shall be a party to
all disputes arising from trades between the authorized non-clearing member and another
member or member firm made for an account _maintained with the clearing member.

REVOCATION OF AUTHORIZATION. A revocation of authorization, either by a

(d)

Primary Clearing Member or another clearing member, must be filed in writing with the
Member Services Department and will become effective when notice of such revocation
is made available to the membership. A non-clearing member whose Primary Clearing
Member has revoked authorization shall be denied access to the Floor until another
clearing member has designated itself as the non-clearing member's Primary Clearing
Member, pursuant to (a) above. Revocation of a non-clearing member's authorization to
execute transactions through the e-cbot system shall be in accordance with Regulation
9B.08.

The non-clearing member will not be permitted to submit_a_new Primary Clearing

Member authorization or clear trades through a new Primary Clearing Member until
such time_as the former Primary Clearing Member files a release_with the Member
Services Department. A Primary Clearing Member who has revoked Primary Clearing
Member status to a non-clearing member must give the non-clearing member a release
upon the non-clearing member's request when the non-clearing member has obtained a
new Primary Clearing Member unless the non-clearing member _has_an_ unsatisfied
indebtedness to the Primary Clearing Member (1) where the indebtedness is due to a
deficit arising from futures or options transactions on the Exchange, (2) where the
Primary Clearing Member is the guarantor under an existing valid guarantee of a loan
which had been _made_to the non-clearing member exclusively for the purpose of
financing the purchase of the non-clearing member's membership, or (3) where the
member has entered into an existing valid Control Agreement with the Primary Clearing
Member under Regulation 252.01, with respect to his membership and/or any shares of
Class A common stock of CBOT Holdings, in order to secure an indebtedness. A non-
clearing member who believes that his Primary Clearing Member is unreasonably
withholding a release may file an arbitration claim pursuant to the procedures set forth

in Chapter 6.

207.02 Primary Clearing Member Permission for Member Registration - A member may

register his or her membership and any restricted shares of Class A common stock of
CBOT Holdings for a member firm under Rule 230.00, if that member firm is not his or
her Primary Clearing Member, only if he or she has written permission to do so from his
or_her Primary Clearing Member. Such written permission of the Primary Clearing
Member must be filed with the Member Services Department.

207.03 Error Accounts -
(a)__ Each non-clearing member who acts as a floor broker (i) shall maintain a personal error

account with his Primary Clearing Member into which he places brokerage errors: and (ii)
may maintain personal error accounts at one or more other clearing members, in addition

208


Ch2 Applicants

Provider without the written approval of unlessthe-giving of such -conipensation or gratuity be
first submitted in-writing te-the Clearing Services Provider-and-appreved.

No member, member firm or employee thereof shall directly or indirectly give or offer to give
any compensation or gratuity in excess of $250 (or having a reasonable aggregate value in
excess of $250) per person per year to any employee of the Exchange. Employees of the
Exchange are forbidden to accept any compensation or gratuity in excess of $250 from any

member, member firm or employee # fF dered-orto-b dered-without
the written approval of unlessthe-e strc ti tuity-befirst- submitted

in4writingte-the President and-approvedof the Exchange, A gift of any kind is considered a
gratuity.

No member, member firm or employee thereof, shall give or offer to give gratuities to, or
accept gratuities from, any other member, member firm or employee thereof in an amount
exceeding that which may be considered reasonable and proper under normal business
practices as determined by the Business Conduct Committee. The giving or offering to give
gratuities to a member, member firm or employee thereof is not to become a vehicle to obtain
Exchange related business in a non-competitive fashion. The requirements of this Regulation
apply to both the provider and the recipients of such gratuities. Failure to comply with this
Regulation may be deemed an act detrimental to the interest or welfare of the Exchange.
(07/01/05)

207.00 Service _Offiee Address - Every member shall register with the Secretary
Exchange an address and subsequent changes thereef where notices may be served. 128
(08/01/94)

207.01 Primary Clearing Member and Other Clearing Members -
(a) _PRIMARY CLEARING MEMBER. Each non-clearing member who executes trades

on the Exchange must have one Primary Clearing Member who will accept and clear the
member's personal trades. A written authorization must_be on file with the Member
Services Department_authorizing such non-clearing member, without qualification, to
submit trades through such Primary Clearing Member, and designating such clearing
member as the non-clearing member's Primary Clearing Member. Such Primary Clearing
Member shall guarantee and assume complete responsibility for all trades and orders
executed or directed to be executed by such non-clearing member, including all orders
that_such non-clearing member executes or fails to execute, either negligently, or in
violation of Exchange rules and regulations.

(b) OTHER CLEARING MEMBERS. _A non-clearing member_may have one or more
clearing members, in addition to his Primary Clearing Member, through whom he may
also clear his trades, provided he has written permission to do so from his Primary
Clearing Member. However, as provided in Rule 252.00, such other clearing member's

207


450.04 Exchange Service Fees — Adjustments — See Rule 245.00 Exehange

Fi tion Fee adiust + tine £ th - teft tion-f +b
YY s pi 7 action fees am

450.05 Fees — Scc Rule 246.00 Memb 4 bert it ted-tower-f

490.08 Advertising - No member shall publish any advertisement of other than strictly

legitimate business character.


Ch2 Insolvency

become a part of the debtor's estate on the date of the entry of the order for relief, and
with respect to which:

(i) trading has ceased on the date of the entry of the order for relief; or (ii) notice of
delivery has been tendered on or before the date of the entry of the order for relief;
or

(iii) trading ceases before such futures contract can be liquidated by the trustee of the
debtor's estate.

In such circumstances, any customer for whose account such member is holding any such
futures contract shall make delivery of and receive payment for, or receive delivery of and
make payment for, the physical commodity as required to fulfill such contract directly
between the customer and the opposite clearing member identified by the Clearing
Services Provider as the party to whom delivery should be made or from whom delivery
should be taken by such customer, in accordance with the policies, Rules and Regulations
of the Clearing Services Provider. Such opposite clearing member shall receive delivery
of and make payment for, or make delivery of and receive payment for, such commodity
in accordance with the policies, Rules and Regulations of the Clearing Services Provider;
provided, however, that nothing contained herein shall prevent such customer and such
opposite clearing member from settling any such contract on such terms as may be
mutually agreed upon.

(d) The making or taking of delivery or payment with respect to any futures contract in
accordance with paragraph (c) shall discharge in full the obligations of such customer and
such opposite clearing member to the debtor and to every other person with respect
thereto, but shall not discharge the debtor from any of its obligations with respect to such
contract except to the extent that such delivery or payment is made.

(e) Nothing contained in this Regulation shall relieve any customer of its obligation to make
or take delivery under any Exchange futures contract for the sole reason that delivery must
be made to or taken from a commodity broker which is a debtor. (04/01/05)

274.00 Reinstatement - When a person or firm suspended under the
provisions of this-ChapterRule 270.00 or Rule 278.00 applies for reinstatement, the Secretary
shall make notice thereof available to the membership and-shal-pest netice-+th Lapesth

bulletin-beard- at least fifteen days prior to the consideration by the Board of such application.
The applicant shall furnish information to the Exchange, in writing, that demonstrates that the
condition which was the basis for the suspension no longer exists. te-said- Beard thetist-eFhis

dit tat tefth: iginally e-andth + fthesetth t-in-eaeh

ease-In the event that the Board docs not determine to reinstate the applicant based upon such
written information, tFhe appleatier-applicant shall have the right to have the application be
heard in accordance with Regulation 540.03(c)-(j).

bs £the Board

Ifthe anplicant-failst ive-th: ; te-ofpxvo-thirds of tl
Hthe-app- s PF Ag ofthe mem

240


Ch2 Assessments and Fees

electronic trading platform;
b) e-cbot Trades ~

i) If a Series B-] (Full) member who is an Exerciser Member is physically present on the
CBOE trading floor or is logged onto the CBOE’s electronic trading platform at the time
an order is entered or altered in e-cbot by or on behalf of such Exerciser Member, then
such Exerciser Member will be obligated to pay non-member (customer) rates for trades
resulting from the execution of such orders.

ii) A series B-] (Full) member delegate who is an Exerciser Member will be obligated to
pay non-member (customer) rates for all trades executed on e-cbot by or on behalf of such
Exerciser Member.

The foregoing obligations will not apply if such Exerciser_Member_possesses_another
membership that has not either been delegated or, in the case of another CBOT Series B-1
(Full) membership, used as a basis to exercise and become a member of the CBOE, and that
entitles such member to trade in a particular product.

244.08 Category (2c) Fees - Member firms qualified under Regulation 230.02 Category
(2c) will be granted the same fee treatment as the proprietary accounts of Category (1a), (1b).
(2a) and (2b) member firms where the trade is cither initiated or executed by a non-member.

245.00 Exchange Service Fees — Adjustments ~ Exchange Transaction Fee adjustments
resulting from the overpayment of transaction fees must be made through the Exchange Fee
Billing System’s (“EFB”) on-line correction facility. The Exchange will only grant
adjustments to member firms for the overpayment of exchange transaction fees for the prior
two months from the month the adjustment is made to the EFB on-line correction facility.

The Exchange will only require member firms to make adjustments for the underpayment of
exchange transaction fees for a period up to one year back from the end of the audit period
selected by the Exchange. Exchange findings of underpayments may not be offset with an
adjustment for any overpayments, except as provided above. Interest and/or costs may be
assessed in accordance with policies established by the Exchange.

246.00 Fees - Members and member firms will be granted lower fees than non-members.

228


Ch2 Insolvency

h-cleari ber—whe- editer_of. bi result-of-debts_relatedte th
duet-of-busi broker—trad issi hant-shall +-te-the-B:

such indebted: der Rules-252.00-and253.00{08/01/94)

cae ee Se eee aan any advertisement of other than strictly

a 04-108 /01/94

245


Ch2 Assessments and Fees

244.04 Individual Member’s Trading Account - For purposes of implementing Rule
244.00, for an account to qualify as an individual member’s account or a joint account of
individual members, where the trades are executed on e-cbot, any individual who initiates
and/or enters trades on behalf of the account (unless he owns a membership and is entering
trades within the scope of his membership privileges) must meet the following requirements:

(1) may not provide trading capital for the account; and

(2) may not have responsibility to provide capital based on trading losses; and

(3) the individual member must have a written agreement detailing the full terms of the
trader’s compensation; and

(4) the trader may not make a loan to the individual member for the purposes of providing
trading capital.

A member that is trading on the floor may designate up to a maximum of two clerks who may
execute trades initiated by the member through e-cbot. Such trades will be eligible for fees at
the individual member rate.

Any account that does not meet the above criteria will be considered a joint account with the
individual entering the trades, and, therefore, must comply with Regulation 244.06.

244.05 Firm Owner Trading a Proprietary Account - In cases where _a non-member
owner, non-member member of a limited liability company, or non-member partner of a
member firm trades a member firm proprietary account, and where the non-member trader’s
compensation is tied to the profitability of the specific proprietary account(s), in order for the
trades in such proprietary account to receive member fee treatment, the non-member trader
must maintain at least $200,000 in the trading account(s) and the $200,000 must be available
to support the trading activity on the Exchange. If the non-member trader does not maintain
the requisite $200,000, the account will be considered a joint account between the member
firm_and the non-member trader and, therefore, the transaction fees will be determined in
accordance with Regulation 244.06.

244.06 Joint Accounts — Any account where profits and/or losses are shared by more
than one party (member or non-member), shall pay Exchange transaction fees based on the
highest rate applicable to any of the account’s participants. In addition, a trading account that
is funded by a loan shall be deemed a joint account between the borrower and the lender
unless it can be demonstrated that the terms of the loan represent a reasonable interest rate.
not affected by the profits and/or losses generated in the account. Further, if the terms of the
loan suggest that the loan need not be paid back in the event of losses, the trading account
shall be deemed a joint account.

244.07 Transaction Fee Status of CBOE Exercisers_- Pursuant to Rules 244.00 and
221.00, as applicable, and in accordance with the August 7, 200] Agreement between the
Exchange and the Chicago Board Options Exchange (“CBOE”), as modified by the letter
agreements, dated October 7, 2004, February 11, 2005 and February 14, 2005, between the
Exchange, CBOE and CBOT Holdings, Series B-1 (Full) members and Series B-] (Full)
member delegates who utilize their rights in Series B-] (Full) membership as a basis to
exercise and become a member of the CBOE without purchasing a membership on such
exchange (hereinafter referred to as “Exerciser Members”) will be subject to the following:

a) Open Auction Trades — Exerciser Members will be obligated to pay non-member
(customer) rates for trades executed on the CBOT Exchange Floor by or on behalf of such
Exerciser Member at any time when such Exerciser Member is logged on to the CBOE’s

227


202.00 Approval for Membership - 1-a-majority-of the Membership-Committee-presentand

ffirmat th 1 +-shall-by i—_The-p te-d 4;

The Membership Committee _may approve an applicant’s admission to membership by a
majority vote or the Chairman of the Membership Committce may delegate to the Member
Services Department the power to approve applications for membership. However, the
Member Services Department shall refer any application to the Membership Committee for its
review if the applicant has disclosed, or an investigation has revealed, any of the following:
disciplinary or criminal history: bankruptcy filings; unsatisfied indebtedness to any person or
entity in the commodities or securities business; negative net worth; or that the applicant has
falsely answered any question on the membership application.

The Membership Committce may, in its discretion, require an applicant to appear in person
for an examination before the Committee or before a representative of the Member Services
Department. If the Committee determines not to approve an applicant after reviewing his or
her membership application and considering any such examination, the Committee shall issue
a_preliminary denial letter, and the applicant shal] be entitled to_a hearing before the
Committee in accordance with Regulation 202.02.

202.02 Procedures for Hearings on Preliminary Denials by the Membership Committee -
In connection with all hearings conducted with respect to preliminary denials of applications
for membership or any other denial by the Membership Committee, the following procedures
shall be followed:

(a) The respondent shall be entitled in advance of the hearing to examine all; documents in
the possession or under the control of the Exchange upon which the Member Services
Department will rely in presenting the issue(s) contained in the Preliminary Denial
Letter or which are relevant to those issues. The respondent shall make his or her
request to examine any such documents by submitting it in writing to the Member

204


Ch2 Registration

In order to qualify a ncw clearing member firm or a new registered futures commission
merchant member firm, whether or not such firm is a _current_member firm in_another
category. Hactivity level (1a), (4b) oF Ga} has beer designated the applicant shall submit_the
firm’s- the-folh He | tis f the Ehaibl +4, x certified
financial statement prepared by an independent Certified Public Accountant as of the most
recent fiscal year end, and a financial statement (which need not be certified) which is current
as of the most recent preceding calendar month end._ However, a Sole Proprietor that _is
seeking to qualify as a clearing member firm shall submit a financial statement in the form
designated by the Exchange. In order to qualify a firm in all other firm membership

categories, H-activitytevel 2b}-26)-3)-+4)-0H(6}His-designated,the applicant shall submit

such financial information of the Eligible Business-Organizationfirm that may be required, in
the discretion of the Exchange. Ara ppt iwhe-is-applying to-be-a Sole Proprietor CBOF
Eh rf M: by halt bpit-at tat + inthe desi +, by th, FE; h

Ifa member firm desires to change its member firm category, it must submit any documents
required by the Exchange, and it must obtain the approval of the Exchange. The Exchange
may, in its discretion, waive or modify any of the foregoing requirements_regarding the
submission of financial information, or grant temporary approval pending the submission of
such financial information, in the case of changes in registratien-member firm category that
are necessitated by reorganization of current member firms. eurrently+egistered withthe

trati ssitated-b izati ££} thy istered withth

Upon receipt of an application to qualify a_ new member for-new_firm-segistration for-an
ib} tien, the Exchange shall, within fifteen days thereafter, make the

name_of_ the firm available ‘to the membership. th a f-the—FHeite—B

Ore sl se enton mh a

ry ‘P=

No membership nor any particular shares of Class A common stock of CBOT Holdings may
be registered on behalf of more than one member firm or member firm affiliate.

Except as provided in Regulationsle 230-00221.09, no membership registered for any
member firm under Rule 230.00 may be delegated under the provisions of Rule 221.00.

An cEligible bBusiness oOrganization which has been conditionally approved for member
firm status shall have six (6) months after the date that it was notified of such approval, or
within such extension of said period as may be granted by the Exchange, to satisfy any
conditions or contingencies imposed on such approval. If the conditions or contingencies are
not satisfied by the applicable deadline, the Exchange's approval of the cEligible bBusiness
oOrganization for member firm status shall be deemed void. +960-(08/01/05)

230.03 Member Firm Affiliates and Designated Passive Investor Entities

(i) Member Firm Affiliates - For purposes of this regulation, the term “member firm affiliate”
shall mean a non-futures commission merchant, non-clearing entity which is wholly owned by

218


Gid}-Previsi Asslcablete—Desienati £ Member—Fi Affiliates—and—P:

} tor—Entiti AH-designati £ mber—fi ffliates—and_passivei +

tities —as-deseribed-in-para hs-4-and-ii}-ab: hall-be-subject_te-thefel}
rye

450.02E Joint Accounts — See Regulation 244.06
} hared_b th Fey. 1 ber—shalt Exel



(©)

@

Ch2 Purchase and Sale or Transfer of Membership

the proceeds of the membership and the associated shares of Class A common stock of
CBOT Holdings shall be applied to the following purposes and in the following order of
priority prior to the payment of any proceeds to the member:

(1) FIRST, the payment of all debts owed to the Clearing Services Provider, if the
membership transferred was registered for a Clearing Member in order to qualify
the Clearing Member for clearing status pursuant to Rule 703.00, by the member
whose membership is transferred. With respect to any other membership, the
Exchange shall have the first priority for the debts described in paragraph (2)
below, and the Clearing Services Pprovider shall have the second priority.

(2) SECOND, the payment of all debts owed to the Exchange by such member,
including, but not limited to, dues, assessments, service fees and fines.

(3) THIRD, the payment to such member's Primary Clearing Member or Members, as
specified in Rule-333-00Rcgulation 207.01, of all claims filed under Regulation
249.01(gh) for trading losses of such member arising out of transactions on the
Exchange, and which claims have been allowed by the Exchange.__Any_ such
indebtedness shall be paid first to the Primary Clearing Member who most recently
qualified the member prior to the transfer, and_any such indebtedness owed to
former Primary Clearing Members shall be paid in reverse chronological order of
the revocation of authorization pursuant to Regulation 207.01(c) (most recent debt
first). However, any such indebtedness which was incurred prior to April 26, 2006
shall be paid in chronological order of the revocation of authorization (oldest debt

first).

(4) FOURTH, the payment to other Clearing Members of all claims filed under
Regulation 249.01(gh) for trading losses of such member arising out of transactions
on the Exchange, and which claims have been allowed by the Exchange.

(5) FIFTH, the payment to members and member firms of all claims filed under
Regulation 249.01(gh) for money owed on loans which had been made to the
member whose membership was transferred, exclusively for the purpose of
financing the purchase of such membership, and which claims have been allowed
by the Exchange.

(6) SIXTH, the payment to members and member firms of all claims filed under
Regulation 249.01(gh) otherwise arising from transactions or business _on_the
Exchange, or in connection with membership in the Exchange, Mentber's-Centracts;

exe} + fp 1 dabtc. hich 4 Jated tet: duet of by +eS rs
broker—tade: fut issih rehant, and which claims have been
allowed by the Exchange.

PRO RATA PAYMENT. If the proceeds of a sale, transfer or other disposition of
membership and the associated shares of Class A common stock of CBOT Holdings are
insufficient to pay all filed claims allowed by the Exchange, such claims, within the
priorities listed in (b) above, shall be paid pro rata, except as provided in (f) below.

SURPLUS, IF ANY. Claims which are not filed during the period specified in Regulation
249.01(gh) but which would otherwise qualify under (a) above may, if allowed by the
Exchange, be paid out of any surplus after all other claims allowed by the Exchange have
been paid in full and shall be paid in preference to claims referred to in (f) below. The
remaining surplus, if any, of the proceeds of a sale, transfer or other disposition of
membership and the associated shares of Class A common stock of CBOT Holdings, after

235


(ce)

(09)

(g)

(h)

Ch2 Purchase and Sale or Transfer of Membership

payment of all claims allowed by the Exchange under this Rule, shall be paid to the
person whose membership is transferred, or to his legal representatives, upon the
execution by him or them of any releases required by the Exchange.

VALUATION.

(1) Claims which have not matured at the time of the transfer of the membership may
be treated as though they had matured, and the amount due may be fixed and
determined by the Exchange on the basis of market values or such other basis as the
Exchange deems to be fair and just.

(2) If a claim is contingent or the amount that will ultimately be due cannot be
immediately ascertained and determined, the Exchange may reserve and retain such
amount from the proceeds as it deems appropriate, pending determination of the
amount due on the claim.

(3) Acclaim shall be allowed by the Exchange only for the amount due after deducting
the amount of the proceeds of the sale of any collateral held by the claimant or the
fair value of such collateral as determined by the Exchange. The Exchange may
require, before determining whether to allow the claim, that all such collateral be
sold.

CLAIMS OF PARTNERS. Claims growing out of transactions between partners, who are
members of the Exchange, shall not share in the proceeds of the membership and
associated Class A shares of CBOT Holdings of one of such partners until all other claims
as allowed by the Exchange have been paid in full.

However, where a partnership is the Primary Clearing Member or other Clearing Member
for one of its member partners, or where a partnership has made a loan to one of its
member partners exclusively for the purpose of financing the purchase of the partner’s
membership, the partnership may share in the proceeds from the sale, transfer or other
disposition of such partner’s membership and_associated Class A_shares_of CBOT
Holdings, pursuant to the priorities in subparagraphs (b)(3), (b)(4) or (b)(5) above, as
applicable.

RIGHTS OF CREDITORS OF DECEASED, INCOMPETENT, SUSPENDED, OR
EXPELLED MEMBER. The death, incompetency, expulsion or suspension of a member
shall not affect the rights of creditors under the provisions of this Rule.

DEATH OR INCOMPETENCY OF CREDITOR MEMBERS. When a member is in
debt to another member, the death or incompetency of the creditor member or the transfer
of his membership either by his estate or legal representative or at the direction of the
Exchange, shall not affect the rights of the creditor member or his estate; to share in the
proceeds of the debtor’s membership and the associated Class A shares of CBOT
Holdings under this Rule. (8/01/05)

256.00 Expelled Member - When a member is expelled or becomes
ineligible for reinstatement, his membership-may be disposed ofthe Exchange may direct the

236


N by ber-fi hallidentify its-stat ist bs st <

PA
ha; "Ex eh S, i Fee!t ess-thi t-shy tual 4: d 5}.
+Atshi ctually dueand-pay
te-th, Bs 4: ve) Rylet 8-06- +4. ‘O4+ ‘O53
dd, tod ath: facet: dat f_A. i}-}--1974 Exeh: Ss } Ey be;
BEOpte! PF >
# f: AM. ryt. 4974 for Exeh. es Ser Ry nabs transact
450.02A Member's Own Account - Sec Regulation 244.01 Ferthe—purpese—of
; ph +} 3 Rule 0-00—+4 +4 a ber. 4 shall fe te—th

450.02B Member's Own Account in Trust - Scc Regulation 244.02 Ferthe-purpese


Ch2 Assessments and Fees

242.00

Negleet Failure to Pay Dues or Assessments - Any member who aegleets-fails

to pay his dues or assessments, er instalimentsthereof-within thirty days after such

ment_or installments thereof has Hed-fer-paymenttheir due date, may be
suspended pursuant to Rule 278.00. until sueh-assessment,orinstalments-thereefis- paid tfa
memb Jeets-t - +. +astall tc thy, Cay. erat so¢d-ef-si

Hes Pay 7 5 Sap

244.00 Exchange Service Fees -

(a)

members and member firms. Each Series B-1 (Full), Series B-2 (Associate), Series

B-3 (GIM), Series B-4 (IDEM), or Series B-5 (COM) member (hereinafter referred to
as “‘members”), and member firm shall be obligated to pay, at such times and in such
manner as the Exchange may prescribe, fees for transactions executed by open auction
and on e-cbot, as described below and in accordance with the fee schedule set forth in
Appendix 2A , which is incorporated into this Rule by reference. In that Appendix.
the applicable rate specifications shall be per contract/per side, and the applicable
volume specifications shall be per calendar month.

(1) Open auction fee caps ~ with respect to open auction trades for a Series B-1 (Full).
Series B-2 (Associate), Series B-3 (GIM), Series B-4 (IDEM) or Series B-5
(COM) member’s own account, the maximum of fees paid by any such member
shall be $20,000 per year per person who initiates and executes the trades. With
respect to open auction trades for the proprietary account of a Regulation 230.02
Category (la), (1b), (2a), (2b), (3a) or (3b) member firm or a member firm
affiliate, as defined in Regulation 230.03, which are initiated and executed by the
same member, the maximum of fees paid by any such member firm or member
firm affiliate shall be $20,000 per year per person who initiates and executes the
trades.

(2) Open auction floor broker fee - Open auction trades executed by a member as a
floor broker for others shall incur_a floor brokerage charge of 2 cents per
contract/per side. Provided, however, that this charge shall not apply to trades
which are both initiated and executed by the same member for the account of a
member, or the proprietary account of a member firm. The maximum of fees paid
by any Series B-1 (Full), Series B-2 (Associate), Series B-3 (GIM), Series B-4
(IDEM) or Series B-5 (COM) member pursuant to this subsection shall be $20,000
per year. When a member executes trades as a floor broker for others and also
initiates and executes open auction trades for his or her own account, the
maximum of fees paid by such member for all such open auction trades
collectively shall be $20,000 per year.

224


yA ber-fi hich. Series B+4+-(Ful} berships-in-addition-1

at rH iP tien

thes ired—for—it istrati derRule230.00—and ySeries-B-2

A iate)- bership(s}_thereinafter —“ Lifiyy berships”}—

€ PSK —E t TRE PS y
ienat 4 fy} bership Ha Lfvine (aot ized
Sti SHER -RO-G ¥ P s + yet i add

forth berfirny: istrati m £-Class A tock-ef- CBOE

Heldines-t ke-its ber-firm affiliate eligible for ber-firm-transaction-fe

Q}S BoA jate} berships-and 429,352 shares-of Classe toek-of



4.

© Rule 286.00 requires clearing members to file monthly reports with the Exchange
listing those members whose trades that they clear who have an unsecured
indebtedness to such clearing members of $5,000 or more. The rule also provides
that the Exchange shall furnish such information to other clearing members upon
written request. Based ona lack of requests by clearing members for the
information which the Exchange maintains under this rule, the Exchange has
determined that the rule is no longer useful. Accordingly, it is being eliminated.

The CBOT intends to implement these amendments no sooner than one day after the
Commission’s receipt of this filing.

There were no opposing views with respect to 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

042506


Ch2 Insolvenc\

or, at the option of the member FCM, the most recent certified financial
statement filed with the Exchange; and

Each member FCM must promptly submit to the Exchange, unless
specifically exempted, copies of any financial statements (for example,
Focus Reports) submitted to any other futures or securities exchange,
self-regulatory organization, Clearing Services Provider, or federal
government agency.

Statement Certification and Attestation Requirements:

1.

Fora-member FCM whieh is-a-registered_partnership,-All | financial
reports_submitted to the Exchange must be signed in thea manner es

determinedprescribed by the Exchange 4-e—electronic-or- manual by
the imdividual_designated—as—the—Chief Financial Officer,_or_the
individual who performs the_same _functions, (ores having these

Regulation 230-030), provided that,_in the case of a partnership, such
individual he is a general partner.

An attestation letter must accompany all audited financial reperts
whichstatements that are filed with the Exchange;-as_well-as-any
Lrepertswhich t-filed-electronically. The attestation letter

must certify that copies of the financial reports-statements shall shallmust be

made available to—4a}-each member of the Chicage—Beard—of
FradeExchange whose membership is registered for the FCM: -b)}eaeh

ro 5
230-03{a}-—and (e) each general partner inthe-case-ofif the FCM is a
partnership.

The signature of the Chief Financial Officer, or the person who has
these-responsibititiesperforms the same functions, may be waived by
the Exchange, at the discretion of the Exchange. In the event of such
waiver, an FCM will be required_to have the Chief Executive Officer
sign the financial statements or, in the case of a partnership, a general
partner if the Chief Executive Officer is not a general partner.te-have-a

£ Havbt busi } zation—_th FCM Hb, + ed-tot thi
Chief-Exeeutive Off. ion-the-fi ial reports—In-eith t-this

didual +-either bea mbes f£theChic: B -d-ot-Trad
prsthi by vt ted-bythe FCM. -d; th R hat:

Financial repert—statements audited by an independent public
accountant must be attested to by the independent public accountant.

Financial reperts-statements that whieh-are filed through Exchange-

243


Ch2 Insolvency

titled to-be balloted for-at+ bsequent 1 tinos-ef

ided-h that the three ballots-+

276.00 | Suspended Member-Time for Settlement - If a person or firm suspended under

the provisions of Rule 270.00 or Rule 278.00 fails to either apply for reinstatement or to be
reinstated, pursuant to Rule 274.00 or Regulation 540.06, within (30) thirty days from the date
of his-such suspension, or within such further time as the Exchange may grant, the Exchange
may direct the sale of seH his-such person’s membership and any associated shares of Class A
common stock of CBOT Holdings, as defined in Rule 252.00, or in the case of a firm, any
memberships and shares of Class A common stock that are owned by, or registered on behalf
of, the firm.

278.00 Suspension for Default - Where a member, member firm, or any other person
with trading privileges, fails to (a) Pay seligulyons owed to perferm-anExchange-contract
ith,-orpay 2 miracts-to-another member _in connection with
transactions or business on the Exchange, or membership i in the Exchange, or (b) pay
obligations owed to the Exchange, the defaulting member _or firm, on complaint of the other
member or, in the case of a debt owed to the Exchange, of the Freasurer Accounting and
Finance Department of the Exchange, shalt-may, subject to the provisions of Regulation
540.06, be suspended by the Chairman of the Board, upon the recommendation of the
Business Conduct Committee, until the contract is performed or the debt satisfied, and he has
been reinstated by the Exchange. Member-fi al-be-deemed- Bi derthis Rute:

Lieati fe instat tif ired. +-toRule274.00-shall-alt deroath.

Nothing in this Rule shall preclude disciplinary action for the violation of any Rule or
Regulation of the Exchange which contributed to the condition for which the member or firm
is suspended under this Rule.

278.01 Arbitration of Default — If the member alleged to be in default to another member
pursuant to Rule 278.00 denies the default, he shall be entitled to have the claim arbitrated,
and the complaining member shall have the responsibility to submit the claim to arbitration
purse to the procedures set forth in Chapter 6. “fhe files an-arbitration claims in the matter;

If the "salon is admitted or established by a final arbitration award that is not paid within ‘the
time period specified in Regulation 630. 13, the e defaulting member: shal-ma ay be suspended

pursuant to Rule 278.00.u

241


(c)

Ch2 Applicants

which the purchaser was notified that his bid was matched to an offer, whichever is
later. The delegate will continue to have the right to exercise the trading rights of the
membership and the purchaser will not be permitted to exercise such trading rights
until the effective time of the termination, regardless of whether the purchaser has paid
the purchase price prior to that time. Moreover, the selling member will continue to
be subject to all of the liabilities described in paragraph (c)(1) below, which arise from
the delegate’s use of the trading rights of the membership until the effective time of
such termination, regardless of whether the purchaser has paid the purchase price prior
to that time.

(1) The member shall remain liable for an amount up to, but not in excess of, the
value of the member trading rights (and the lessor’s shares of Class A common stock
of CBOT Holdings if, and only to the extent that, such shares are-registered for an e-
cbot member firm or a member firm affiliate under Rule 230.00 or Regulation
230.03)450-02D} for the debts, acts and delinquencies of the delegate (or the e-cbot
member firm or member firm affiliate, if applicable) arising from the delegate's use of
the member trading rights. The member trading rights so delegated (and the lessor’s
shares of Class A common stock of CBOT Holdings described above, if applicable)
may be sold to satisfy any such liability in accordance with the Rules and Regulations
of the Exchange. Delegation shall not relieve the member of any of his obligations or
liabilities which he might otherwise have by virtue of being a member of the
Exchange to other members of the Exchange;

(2) Upon the termination or expiration of the delegation agreement, the Exchange shall
make notice thereof available to the membership. Thereafter, all members and
delegates who may have claims against the delegate (or any e-cbot member firm or
member firm affiliate for which the leased seat has been registered pursuant to Rule
230.00 or Regulation 230.03)450-02D) may file claims pursuant to Regulation
249.01(gh). The member entering into a delegation agreement shall be responsible for
the payment of those claims allowed by the Exchange and not satisfied promptly by
the delegate (or the e-cbot member firm or member firm affiliate, if applicable), but
only to the extent of the value of the membership so delegated (and the lessor’s shares
of Class A Common stock of CBOT Holdings if, and only to the extent that, such
shares are registered for an e-cbot member firm or a member firm affiliate under Rule

230.00 or Regulation 230.03)450-02D);

+ ee *

221.05 Delegates' Clearing Members -

qa)

(2)

Except as provided in paragraph (2) below, no delegate may receive clearing
authorization from any Primary Clearing Member, or from any other Clearing Member,
pursuant to Rule [333-09] 207.01 without first having:

(a) obtained written permission from his/her member-delegator; and
(b) filed such written permission with the Department of Member Services.

In the event that a delegate cannot obtain written permission from his/her member-
delegator before he or she receives clearing authorization from a new Primary Clearing
Member, such delegate may nevertheless obtain such clearing authorization if the new
Primary Clearing Firm executes and submits to the Department of Member Services a

2n1


countthatd: " +-the-ab: teria-willb idered-a-jeint towith

% pow Fa +}
bs. tit dividual_and therefor tcomplyawith Regulation 450.025.
450.02C(iii) Firm Owner Trading a Proprietary Account - Sce Regulation 244.05 In
be Iya st jpelud: limited—Habihe +t ef
Sa * = JP 2
bef} trad: by } i
mrembertine < +m proprH
+: tedteth fitabihe £ +h,
P P J
thetrad. ae. f tf tt:
sf 7 +], + $908 O00. +h 4;
aHablet + the trad: Teterts
pports Fey
4 +h: et Hte-$260-000- the
thi + by 44 th: by
be-dets a 44 4. ith R ati.

450.02D Member Firm Affiliates and Designated Passive Investor Entities - Sec
Regulation 230.03

ffiliate-shalt Fat: al ission_ Merchant. 4, tityawhiel:

Jeased-in-th £ Fits pri 1 J . 4-10.000-sH: $C}



Ch2 Registration

230.00 Registration of Memberships and Shares of Class A Common Stock to
Qualify a Member Firm _- An cEligible bBusiness oOrganization may qualify as be a
member firm of the Exchange if the required numbers of memberships and/or shares of Class
A common Stock of CBOT Holdings are registered on behalf of the firm, as specified in

Regulation 230.02.

All registered memberships must be in the name of a principal or employee of the member
firm. Such principal or employee shall be referred to _as_a “nominee” with respect to the
membership. All registered shares of Class A common stock of CBOT Holdings must be in
the name of the member firm, or one or more member-principals or member-cmployces of the
member firm. Registered memberships and registered shares are not required to be in the
name of the same individuals. All such membership or share registrations may be terminated
at_any time by the Exchange, or by the member firm, the nominees or the registering
shareholders, as applicable, with the prior written approval of the Exchange.

No shares of Class A common stock of CBOT Holdings that are qualifying a member firm, or
a_member_firm_ affiliate under Regulation 230.02 or 230.03. may be sold, pledged
hypothecated, lent, re-registered or otherwise transferred without the prior written approval of
the Exchange. Each member or member firm registering shares of Class A common stock to
qualify a member firm or member firm affiliate is deemed to acknowledge that the Exchange
has control over such shares and must comply with any policies or procedures established b
the Exchange to effect control over such shares.

All memberships and/or shares of Class A common stock of CBOT Holdings that are owned
by _a member firm that is not_a clearing member firm or a registered futures commission
merchant may be in the name of a principal or employee of, and may be registered (except as
provided in Rule 249.01(b)(i)) on behalf of, another member firm which is wholly owned by
such member firm, which wholly owns such member firm, or which is wholly owned by the
same parent company(ics) as such member firm. During the term that any such memberships
or shares that are necessary to qualify the member firm are registered on behalf of such other
member firm, the member firm owning the memberships or shares will not be entitled to
member firm transaction fees. However, any such member firm will remain subject to all
applicable Exchange Rules and Regulations, including the disciplinary procedures set forth in
Chapter 5, and the arbitration procedures set forth in Chapter 6.



-3-

Regulation 230.06 (formerly Regulation 230.05) is being amended so that the
eighteen month grace period that had formerly been given to pool and hedge fund
member firms to acquire the six previously required memberships will not apply
to new Equity Member Firms in this category that become member firms after the
effective date of the change. This grace period is being eliminated because,
although Equity Member Firms will still be required to obtain 4 Series B-1 (Full)
and 2 Series B-2 (Associate) memberships, they can qualify as Trading Member
Firms once they acquire 2 Series B-1 (Full) and 1 Series B-2 (Associate)
memberships.

Regulation 230.07 (formerly Regulation 230.06) retains the 30-day grace period
for a member firm to notify the Exchange of a replacement nominee on a firm-
owned membership when the prior nominee leaves the employ of the member
firm. However, Regulation 230.07 makes it explicit that member firm privileges
would terminate immediately if the firm sold any of its qualifying Class A shares
of common stock.

Regulation 249.01 makes it explicit that claims by members and member firms, in
order to be allowed, must result from conduct that occurred prior to the sale or
transfer of the membership against which such claims are made.

Regulation 250.01 permits the Exchange to retain the proceeds of a membership
sale pending the outcome of any legal proceeding that is pending or is highly
probable, and in connection with which the member may be required to indemnify
the Exchange pursuant to Rule 209.00.

The sixth priority under Rule 252.00 is being amended to make it clear that
members and member firms may not assert claims that relate to trades executed
on other exchanges.

Regulation 278.01 currently provides that a member against whom a Rule 278.00
complaint has been filed is entitled to arbitration if he denies the complaint, and it
places the burden for filing the arbitration proceeding on the defaulting member.
Under the revised regulation, the complaining member will be the party to file the
arbitration claim.


Ch2 Purchase and Sale or Transfer of Membership

status, whether or not such members or member firms have signed a consent to jurisdiction.
Each such individual and firm:

- Remains responsible for any violations of Exchange rules and regulations
committed while a member or member firm; and

- Agrees to have any disputes which arose while a member or member firm and
which relate to or arose out of any transaction upon the Exchange or membership in
the Exchange, resolved in accordance with Exchange rules and regulations.

The Exchange may retain, in its discretion, some or all of the proceeds from the sale of a
membership and any associated shares of Class A common stock of CBOT Holdings, as defined
in Rule 252.00, until the conclusion of any potential or pending disciplinary matter against the
member or member firm, of which the Exchange is aware or becomes aware prior to the
distribution of such proceeds. The Exchange may also retain, in its discretion, some or all of
such proceeds pending the outcome of any Icgal proceeding that is pending or is highly
probable with respect to which the member or member firm may be required to indemnify the
Exchange pursuant to Rule 209.00.

251.01 Member Under Investigation - No member may transfer his membership by
intra-family transfer under Regulation 249.01(cd) and no member firm may transfer a
firm-owned membership from one member employee to another employee under Regulation
249.01(b), unless the approval of the Regulatory Compliance Committee is first secured,
when the member is under investigation by the Exchange or when disciplinary charges have
been filed against him or when he is under suspension for causes other than default,
insolvency, or non-payment of assessments or dues. 1835 (07/01/05)

252.00 Proceeds of Membership and Class A Common Stock -

(a) GRANT OF SECURITY INTEREST. Each member of the Exchange grants to the
Exchange for the benefit of the Exchange, the Clearing Services Provider, such member’s
Primary Clearing Member, all other Clearing Members and all other members of the
Exchange, a security interest in the shares of Class A common stock of CBOT Holdings
associated with each of such member’s memberships in the Exchange, which, for
purposes of this Rule 252.00, includes all restricted shares of Class A common stock of
CBOT Holdings associated with each of such member’s memberships (regardless of
holder) and all restricted and unrestricted shares of Class A common stock of CBOT
Holdings registered on behalf of, or designated—ferwhich qualify, CBOT Clearing
Members, member firms, member firm affiliates and designated passive investor entities
under Rule 230.00 or Regulation—450.62B230.03, and the proceeds thereof for the
purpose of securing such members’, member firms’, member firm affiliates’ or
designated passive investor entities’ obligations, whether direct or indirect, absolute or
contingent, under the Certificate of Incorporation, Bylaws and Rules and Regulations of
the Exchange, including, without limitation, this Rule 252.00.

(b) ORDER OF DISTRIBUTION. This Rule applies to each sale, transfer or other
disposition of a membership and all shares of Class A common stock of CBOT Holdings
associated with such membership, whether made by a member voluntarily or at the
direction of the Exchange. In connection with any such sale, transfer or other disposition,

234


Ch2 Registration

Exchange will grant an adjustment to the appropriate member fee level via a fee credit. This
adjustment period will not exceed eighteen months. If the member firm takes more than
eighteen months to meet the membership/stock requirement, the Exchange will grant an
adjustment only for the eighteen months immediately prior to meeting the membership/stock
requirements. (07/01/05)

230.076 | Member Firm Status Upon Death or Withdrawal of Registered Member - A
member firm shall notify the Exchange in writing within five business days of Upon the death
or withdrawaltermination of employment of a membernomincee i in whose name a firm-owned
membership i is registered. behalf of aber tiem ori Ah 4 FChass A
+H gs-are registered on-behalf of a memberfirm, If where-such
death or withdrawal-termination would “result in failure of the member firm to meet the
requirements of Rule 230.00_or-Rule-703.00, or Regulation 230.02 erRegulation-230-05, the
member firm shall transfer such firm-owned membership into the name of another nominee.
pursuant to Regulation 249.01(b), within thirty (30) days of such death or termination. Tthe
Exchange may, upon application of the member firm, grant the member firm an extension of

privileges underthe—appleable_Rules—_and—Regulations—for such period and under such
conditions as the Exchange may fixprescribe.

Upon the sale of shares of Class A common stock of CBOT Holdings that are registered on
behalf of a member firm, where such sale would result in failure of the member firm to meet
the requirements of Rule 230.00 or 703.00, or Regulation 230.02, the member firm shall
immediately notify the Exchange of such sale, and member firm privileges shall terminate

immediately upon such sale. Upon: the death or withdreswal-eF a momber-whose membership i

behalf-of-a
istered-on_behalt-of-a- bert: “th berth hall_withi iw. 4pusi d f
h-death. ithdrawal_netify_theExechange-ofthe-depart fit inee. Failure to

comply with the provisions of this Regulation mayshal! be referred to the Business Conduct
Committee, for possible disciplinary action. 4063 (07/01/05)

222


2-

Rule 202.00 and Regulation 202.03 currently only authorize the Membership
Committee to make a recommendation that an applicant for membership should
be denied, after a hearing, and grant the authority to make the final decision to the
Regulatory Compliance Committee. Under the revised provisions the
Membership Committee’s decision will be final, while providing an applicant
with the right to appeal a denial to the Appellate Committee. Similarly, reference
to the Regulatory Compliance Committee is being removed from Regulation
201.02, with respect to reconsideration of membership, and from Regulation
230.14, with respect to applications to register a membership for a member firm.
(In the context of reconsideration of membership, there would be no right of
appeal to the Appellate Committee, since any expulsion would be imposed by the
Board upon the recommendation of the Membership Committee.)

Regulation 207.01 (which is the relocated Rule 333.00) clearly states the
obligations of a Primary Clearing Member (“PCM”) by indicating that the PCM
would “guarantee and assume complete responsibility for all trades and orders
executed or directed to be executed by [the] non-clearing member, including all
orders that such non-clearing member executes or fails to execute, either
negligently, or in violation of Exchange rules and regulations.”

Regulation 207.01 also explicitly permits a member who believes that his PCM is
unreasonably withholding a release to file an arbitration claim and would provide
an additional basis for withholding a release (which may overlap with the
currently specified bases), namely the existence of a Control Agreement with the
PCM under Regulation 252.01, with respect to the member’s membership and/or
shares of Class A common stock, in order to secure an indebtedness.

In addition, Regulation 207.01 currently provides that when PCMs make claims
against the transfer of a membership under Rule 252.00 for trading losses,
payment shall be made in the chronological order of revocation of PCM status,
such that the earliest debt would be paid first, and the first PCM would have
priority over the current PCM. In the revised regulation, this order is being
reversed, such that the current PCM would be paid first, and the oldest debt would
be paid last. This provision also is being relocated to Rule 252.00 and will only
become effective with respect to debts incurred after the rule change.

Regulation 230.05 (formerly Regulation 230.03) “Designated Persons” provisions
are being eliminated because they are unnecessary in light of other current rules
and regulations and Exchange procedures.



Chapter 3

333.00 Trades of Non-Clearing Members - See Regulation 207.01



Ch2 Purchase and Sale or Transfer of Membership

sale by the Exchange at the same price as the lowest offer to sell. The total
amount realized from the sale of the membership and any associated restricted
shares of Class A common stock of CBOT Holdings shall be remitted to the
unsuccessful applicant in full satisfaction of all obligations of the Exchange,
subject to Exchange Rule 252.00.

(iii)An individual whose membership status was terminated through a sale of his

membership, transfer of a firm-owned membership which was in the individual’s
name pursuant to paragraph (b) below, or termination of a temporary family
designation-transfer pursuant to paragraph (cd) below, and who is not subject to a
suspension or expulsion, shall remain eligible, for a period of six (6) months
following such sale, transfer, or termination to acquire another membership. The
Exchange may, in its discretion, grant extensions to this six (6) month approval
period.

(b) Nomination and Substitutien-Transfer by Member Firm

0)

(ii)

A member firm may own a Series B-1 (Full), e#Series B-2 (Associate), Series B-

3 (GIM), Series B-4 (IDEM), or Series B-5 (COM) membership which is in the

name of a nominee, provided that (i) the nominee is a principal or employee of

such member firm; and (ii) #he-any qualifying membership i is registered on behalf

of such member firm,_pursuant to Rule 230.00,:-andit-the-appropriat

of shares-of Class-A-commen- stock SECBOF loldines ew sostecred on behell of
xcept as otherwise

sth prembertn seach case pantie Rule 230, 00_o:
provided in Rule 230.00 or Regulation 221.09. Additionally—a-member-firm-may

B-34GIM)- Series B-4 IDEM),-and-S B-54(COM} bership:
hich inthe £- i } i Js-or-full i I of
u s ‘ F F proyees
fi high bershi be—delezated. suantto—Reoulati
iP Pp e
22190. H. . Series B34GIM)-S B-4-4DEM)- ;B
COM} bershi b istered-on-behalfofa ber-fi
(EO mer pray

A_member firm shall be entitled to transfer a_firm-owned membership, and to

receive the net proceeds from such transfer, after satisfaction of all claims against
the nominee and against the member firm, in accordance with Rule 252.00.

(iii) A member firm may terminate a nominee’s right to exercise the rights and

privileges of a firm-owned membership at any time. In that event, the nominee’s
right to exercise the rights and privileges of that membership terminates
immediately and automatically. If a nominee wrongfully exercises any right or
privilege of membership after termination, the member firm shall remain
responsible for that nominee’s liabilities and actions arising from such exercise
until the member firm provides written notice of the termination to the Exchange
and such notice has been made available to the membership.

(iv#)A member firm that owns a membership may transfer such membership from

substitute-one nomince fer-to another nominee who is a principal or employee of
the member firm, or of another member firm as permitted by paragraph (iv)(b)
below or Rule 230.00, pursuant to the procedures and conditions established by
the Exchange, including any required deposits or clearing firm guarantees.

(év) (a) In the event that a member firm that owns a membership is acquired by

another member firm through the purchase of 100% of the acquired firm's
assctspartiership—ortimitedtabitity-eompany_property—orcorporate stock, the

230


Ch2 Insolvency

Nothing in this Regulation shall preclude disciplinary action for the violation of any Rule or
Regulation of the Exchange which contributed to the condition for which restrictions are
imposed under this Regulation. 1794 (04/01/05)

271.00 Announcement of Suspension - Whenever a member; fegi

bi Fe ti tt ithtrading-privilegesor member firm has been
suspended pursuant to Regulation 540. 06, the Secretary of the Exchange shall immediately
announce te the provide notice to the membership. the-suspension-of such-member_eligible

herp . If such suspension is modified or rescinded after
hears the Secretary shall anneunee-notify the membership of the revised actionte—the
membership. 420-404-0198)

ith-t} ber—fi ti d-te-e} th the Exch:

+i J + designate—24-08/0194)

272.02 Deliveries in Bankruptcy Situation -
(a) For purposes of this Regulation:

(i) The term "customer" shall mean any person for whom a member carries an
Exchange futures contract except a non-public customer as that term is defined in
CFTC Regulation 190.01(bb).

(ii) The term "debtor" shall mean any member with respect to which an order for relief
is entered under the Bankruptcy Code.

(iti) The term "order for relief" means the filing of a petition in bankruptcy in a
voluntary case and the adjudication of bankruptcy in an involuntary case.

(iv) The term "tender" with respect to a notice of delivery shall mean, in the case of a
short clearing member that has presented such a notice to the Clearing Services
Provider, the assignment of such notice by the Clearing Services Provider to a long
clearing member, and, in the case of a long clearing member, the acceptance by
such member of such notice from the Clearing Services Provider if such notice is
not transferred by such long clearing member within the time permitted under the
Rules of the Exchange or the Clearing Services Provider.

(b) This Regulation shall apply only in the event and under the circumstances set forth in
paragraph (c) hereof, and only in the event that the opposite clearing member referred to
in paragraph (c) is not itself a debtor.

(c) Notwithstanding any provisions of Exchange Rules or Regulations, the policies, Rules or
Regulations of the Clearing Services Provider to the contrary, the requirements set forth
in this paragraph (c) shall apply in the event that any member becomes a debtor, and that
at that time such member carries for a customer any Exchange futures contract in the
current delivery month with respect to which the underlying physical commodity has not

239


Ch2 Assessments and Fees

(3) Firm-owned_ memberships — Notwithstanding subparagraphs (a)(1) and _(a)(2)
above, the fees applicable with respect to memberships which are owned by
member firms shall be equivalent, in the following categories, to those which the
Exchange prescribes for delegates:

(i) Trades for such member’s own account, in cases where the individual is not a
principal of the member firm which owns his/her membership. For purposes
of this paragraph, an individual shall be deemed a principal of a member firm
if he/she holds a majority ownership interest in that firm and/or meets other
such criteria as the Exchange may prescribe by regulation; and

(ii) Trades executed by such member on behalf of any account other than the
proprietary account or a customer account of the member firm owner of the
membership, or its member firm affiliate, as defined in Regulation 230.03.

(b) non-members. Each member firm handling the funds of non-member customers shall
include, in the statements to such customers, fees for the open auction and _e-cbot
transactions executed for the accounts of such customers in accordance with the fee
schedule _set_forth in Appendix 2A. In that Appendix, the applicable_rate
specifications shall be per contract/per side, and the applicable volume specifications
shall be per calendar month.

All such fees collected from non-member customers shall be remitted by the member
or member firm at such times and in such manner as the Exchange may prescribe.

No member firm shall identify on its statements to nonmember customers any charge
as an "Exchange Service Fee" unless the amount shown is actually due and payable to

the Exchange under this Rule.
c) surcharges. Exchange transaction fee surcharges, exchange fees for non-trade

transactions, and clearing fees are set forth in Appendix 2A, which is incorporated into
this Rule by reference.

d revenue. The Exchange shall have the authority in its discretion to suspend any of the
fees specified in this Rule at any time during a fiscal year

(e) _ reports. Each member or member firm subject to the provisions of this Rule shall
submit to the Exchange such reports as the Exchange may deem necessary for the
administration of this Rule.

f) __ special assessments... This Rule shall not be construed to supersede Rule 240.00 in

any way nor to abrogate the responsibility and right of the Exchange to levy such
additional assessments, charges or fees upon the membership as it_may deem

necessary or advisable.
244.01 Member's Own Account - For the purpose of implementing Rule 244.00, the

term ‘“‘member’s own account” shall refer only to those commodity futures and/or commodity
options trading accounts that are wholly owned by and held in the name of one or more
members. For any account held by more than one member, all trades made for such account
shall pay transaction fees equal to the highest fee required of any of the individual participants

225


(b)

Ch2 Applicants

to his Primary Clearing Member, provided he has written permission to do so from his
Primary Clearing Member on file with the Member Services Department. _ This
requirement shall not apply to a floor broker who solely initiates and/or enters trades on
behalf of a member firm’s proprietary account, as defined in Regulation 244.03.

Each clearing member who carries an error account agrees to accept and clear the broker's

trades involving brokerage errors. A written authorization must be filed with the Member
Services Department authorizing the broker, without qualification, to submit trades
involving brokerage errors through such clearing member. Such clearing member shall be
liable upon all trades involving brokerage errors that are submitted to the error account
(unless authorization is revoked as provided herein) and shall be a party to all disputes
involving trades between the broker, in his capacity as a broker, and another member or
member _firm_that_may ultimately be submitted to the error account. Revocation of
authorization granted pursuant to this Regulation must_be filed in writing with the
Member Services Department _and will become effective when notice of such revocation
is made available to the membership.

207.04 Funds in Trading Accounts Carried by Clearing Members - The following shall

apply to trading accounts which are carried for non-clearing members by clearing members

pursuant to Regulation 215.01:

(a)

If a non-clearing member trades in excess of written limits prescribed by the carrying

clearing member, and/or if the_non-clearing member is alleged to have engaged in
reckless and _unbusinesslike dealing inconsistent with just_and equitable principles of
trade, the disposition of any and all funds in the applicable trading accounts(s) may be
suspended by the carrying clearing member, or by the Exchange through the Board of
Directors, Executive Committee, Floor Governors Committee or Arbitration Executive
Committee, pending a determination by the Arbitration Committee regarding the
appropriateness of the non-clearing member's conduct.

Any Arbitration Committee decision to release trading account funds to the non-clearing
member shall include the payment of interest by the clearing member to the non-clearing
member as determined by the Arbitration Committee.

Either the carrying clearing member or the Exchange may direct that the disposition of

trading account funds be suspended pursuant to subparagraph (a) of this regulation.
However, if such suspension is initiated by the clearing member the suspension will be
subject to review within one business day by the Board or one of the Committees
designated in paragraph (a). The purpose of this review will be to determine if sufficient
grounds exist to warrant continuation of the suspension pending a final determination by
the Arbitration Committee. Exchange proceedings in this regard will be conducted in
accordance with Regulation 540.60 "Procedures for Member Responsibility Actions".

211.00 Membership Trading Privileges - Members shall be allowed to trade all existing and
prospective futures and/or options contracts which shall be listed from time to time in the
markets specified below:

(a)

Series B-1 (Full) members — Agricultural and Associated Market;; Government
Instrument Market;; Index, Debt and Energy Market; and Commodity Options Market

209


(a}—_Each- Jeari ‘ber—who—aets—as—ath broek i: istered—with—th

a} Ss €
fas dit-Fus Fradine-C tered—fute +
amodity + ading 723
floer-breker-4)-shalt tala ha tawith his Py CI Merl
te-whieh-he-pl brek 443} tad 4 t
A pla 7 aay Hp ce
dary—cleari by ddition—te—his—P:
Membe: ded—he-ha: ten—p to-d fj his-P; Ch aa
Memb. File-with Member Services Depart t

333.03 Funds in Trading Accounts Carried by Clearing Members - See Regulation
5 : lene

TF} fe}. +: halt 1 trad + >
207.04 pply-t 2 ts-whieh df e



Chapter 4

450.00 Exchange Service Fees - See Rule 244.00

4 ted-by-th: ber—th $f id-by Y

sate nember- + # yas
rat berfi ffiliate-shall_be-$20-000- 5
8 > F per pe
he-initiat ad 4es-the-trad

Series B-4-GDEM) ies-B-5(COM} aberp +-te-this-subsecti
hall -be-$20-000- Wh by tes-trad: #1, bro
$20; peryear- & ades-—a
for-other d-alse-initiat 4 a tion-trades_for-his_orher
h
tj
ned
to-th
i}—Frades-K h-member?: +4 s-wherethe-individualis
neta-principal-of-th berfi hieh- histh be ia
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Ch2 Applicants

suretyship agreement inuring to the benefit of the member-delegator and in a form
approved by the Exchange. However, the delegate must obtain his/her member-
delegator's permission within 30 days of changing Primary Clearing Members. If the
delegate does not obtain the permission within that period, he or she will be denied access
to the floor and to the e-cbot system. The delegate will not be able to regain access to the
floor_or_to the ¢-cbot system until such permission is submitted to the Department of
Member Services. (04/01/99)

221.09 Delegation of Firm-Owned Memberships - A member firm may delegate the
rights and privileges of a firm-owned membership to an individual €delegate~} upon the
terms and conditions set forth in Rule 221.00, but only if the membership being delegated is
not necessary to satisfy the requirements for registration as a member firm er-+fappheable,as
a-elearing-memberfirm,in the applicable category, under Rule 230.02. exeept-as-othervise
provided-in Rule 230.00 and Regulation 230.02.Notwithstanding the foregoing, a member

firm that is not_a clearing member firm or a registered futures commission merchant may
delegate all of its firm-owned memberships, including any memberships that are required for
its own registration under Rule 230.00, upon the terms and conditions set forth in Rule
221.00. During the term of the delegation of any firm-owned membership that is required to
qualify such a member firm, the firm will not be entitled to member firm transaction fees.
However, during the term of any delegation of the qualifying memberships of a member firm
the firm will remain subject to all applicable Exchange Rules and Regulations, including the
disciplinary procedures set forth in Chapter 5, and the arbitration procedures sect forth in

Chapter 6.
222.00 Multiple Membership - A member may own more than one membership in his

name, and a member firm may own the-+tite-and-valie-of more than one membership pursuant
to Regulation 249.01(b). 872 (08/01/94)

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