@

(i)

(iii)

(vy)

The market maker will be assigned to a group of security futures contracts listed
on the Exchange that is either unlimited in nature (“Unlimited Assignment”) or
will be assigned to no more than 20% of the security futures contracts listed on
the Exchange (“Limited Assignment”); and

At least 75% of the market maker’s total trading activity in CBOT security futures
contracts must be in its assigned security futures contracts, measured on a
quarterly basis; and

During at least 50% of the trading day, the market maker must have bids or offers
in the market that are at or near the best market, except in unusual market
conditions as determined by the Exchange (such as a fast market in either a
security futures contract or a security underlying a security futures contract), with
respect to at least 25% (in the case of an Unlimited Assignment) or at least one
(1) (in the case of a Limited Assignment) of its assigned security futures
contracts; and

The requirements in (ii) and (iii) must be satisfied on at least the following
percentages of trading days in each calendar quarter:

(a) 90% (in the case of an Unlimited Assignment);
(b) 80% (in the case of a Limited Assignment); or
(o) 80% (in the case of either an Unlimited Assignment or a Limited

Assignment if the Exchange is listing four or fewer security futures
contracts).

Qualification for “60/40” Tax Treatment

To qualify as a “dealer” in security futures contracts within the meaning of Section 1256(g)(9)
of the Internal Revenue Code of 1986, as amended (“Code”), a member is required to:

@

(i)

(iii)

register as a Security Futures Dealer for purposes of the Exchange’s security
futures margin rules under Category I or Category 2 above; and

undertake in its registration form to provide quotations for all products specified
for the market maker exclusion from the CBOT security futures margin rules; and

quote a minimum size of:

(a) ten (10) contracts for each security futures product not covered by (b) or
(c) below;


'S FOR OFFSETTING POSITIONS

Long security future
(or basket of security
futures representing

each component of a
1 | narrow-based

securities index!) and
long put option? on the
same underlying
security (or index)

Individual stock

20% of the current

market value of the long
security future, plus pay
for the Jong put in full.

The lower of: (1)
10% of the
aggregate exercise
price of the put
plus the aggregate
put out-of-the-
money‘ amount, if
any; or (2) 20% of

the current market

value of the long
security future.

1_Baskets of securities or security futures contracts must replicate the securities that comprise the index, and in the

same proportion.

2 Generally, for the purposes of these regulations, unless otherwise specified, stock index warrants shall be treated

as if they were index options.
3

*_“Aggregate exercise price,” with respect to an option or warrant based on an underlying security, means the

exercise price of an option or warrant contract multiplied by the numbers of units of the underlying security covered

by the option contract or warrant. “Aggregate exercise price” with respect to an index option, means the exercise

price multiplied by the index multiplier. See, e.g., Amex Rules 900 and 900C; CBOE Rule 12.3; and NASD Rule

2522.

4 “Out-of-the-money” amounts shall be determined as follows:

(1) _for stock call options and warrants, any excess of the aggregate exercise price of the option or warrant over

its current market value (as determined in accordance with Regulation T of the Board of Governors of the

Federal Reserve System);

(2) for stock put options or warrants, any excess of the current market value (as determined in accordance with

Regulation T of the Board of Governors of the Federal Reserve System) of the option or warrant over its

aggregate exercise price;

(3) _for stock index call options and warrants, any excess of the aggregate exercise price of the option or

warrant over the product of the current index value and the applicable index multiplier, and

(4) for stock index put options and warrants, any excess of the product of the current index value and the

applicable index multiplier over the aggregate exercise price of the option or warrant. See, e.g., NYSE
Rule 431 (Exchange Act Release No. 42011 (October 14, 1999), 64 FR 57172 (October 22, 1999) (order
approving SR-NYSE-99-03)); Amex Rule 462 (Exchange Act Release No. 43582 (November 17, 2000), 65
FR 71151 (November 29, 2000) (order approving SR-Amex-99-27)); CBOE Rule 12.3 (Exchange Act
Release No. 41658 (July 27, 1999), 64 FR 42736 (August 5, 1999) (order approving SR-CBOE-97-67)); or
NASD Rule 2520 (Exchange Act Release No. 43581 (November 17, 2000), 65 FR 70854 (November 28.
2000) (order approving SR-NASD-00-15)).



17

Long (short) a basket
of security futures that

together tracks a
narrow-based index

and short (long) a

narrow-based index
future

Individual stock

The greater of: (1) 5%

The greater of: (1)

5% of the current

of the current market
value of the long

market value of the
long security

or narrow-based

security future(s); or (2)

future(s); or (2) 5%

security index

5% of the current

of the current

market value of the
short security future(s).

market value of the
short security

future(s).

100 b=

Long (short) a security
future and short (long)
an identical security

future traded on a
different market.®

Individual stock

The greater of: (1) 3%

The greater of: (1
3% of the current

of the current market

market value of the

value of the long

long security

or narrow-based

security future(s); or

future(s); or (2) 3%

security index

(2) 3% of the current

of the current

market value of the

market value of the

short security future(s).

short security

future(s).

New_ Regulation 431.08 Acceptable Margin for Security Futures and Treatment of

Undermargined Accounts

Notwithstanding any other Exchange Rules or Regulations, the following provisions shall
establish the acceptable margin for Security Futures Positions that are held on behalf of

Customers _in_a_ futures account.

and the treatment _of undermargined futures accounts

containing Security Futures Contracts.

(a) Member firms may accept from their Customers as margin for Security Futures held in a

futures account, deposits of cash, margin securities (subject to the limitations set forth in

the following sentence), exempted securities, any other assets permitted under Regulation

T of the Board of Governors of the Federal Reserve System (as in effect from time to

time) to satisfy a margin deficiency in a securities margin account, and any combination

of the foregoing, each as valued in accordance with CFTC Regulations 41.46(c) and

41.46(e) or SEC Regulations 242.404(c) and_242.404(e), as applicable.

Shares of a

money market mutual fund that meet the requirements of CFTC Regulation 1.25 may be
accepted as a margin deposit from a Customer for purposes of this Rule.

(b) A member firm shall not accept as margin from any Customer securities that have been

issued by such Customer or an Affiliate of such Customer unless such member firm files

a petition with and receives permission from the Exchange for such purpose.
(c) All assets deposited by a Customer to meet margin requirements must _be and remain

unencumbered by third party claims against the depositing Customer.

® Two security futures will be considered “identical” for this purpose if they are issued by the same clearing agency

or cleared and guaranteed by the same derivatives clearing organization, have identical contract specifications, and

would offset each other at the clearing level.



Long a basket of
narrow-based security

futures that together
tracks a broad-based

index and short a

broad-based security

index call option
contract on the same

index

Narrow-based

20% of the current

20% of the current

market value of the long

market value of the

basket of narrow-based

long basket of

security futures, plus the

narrow-based

security index

aggregate call in-the-

security futures,

money amount, if any.

plus the aggregate

Proceeds from the call

call in-the-money

sale may be applied.

amount, if any.

Short a basket of

narrow-based security

futures that together
tracks a broad-based

security index and
short a broad-based
security index put

option contract on the
same index

Narrow-based

20% of the current

20% of the current

market value of the

market value of the

short basket of narrow-

short basket of

based security futures.

narrow-based

security index

plus the aggregate put
in-the-money amount, if

security futures.
plus the aggregate

any. Proceeds from the

put in-the-money

put sale may be applied.

amount, if any.

Long a basket of
narrow-based security
futures that together
tracks a broad-based
security index and
long a broad-based
security index put

option contract on the
same index

Narrow-based

20% of the current

The lower of: (1
10% of the

aggregate exercise
price of the put.

market value of the long

plus the aggregate

basket of narrow-based

put out-of-the-

security index

security futures, plus

money amount, if

pay for the long put in

any; or (2) 20% of

full.

the current market

value of the long

basket of security
futures.

Short a basket of

narrow-based security
futures that together
tracks a broad-based
security index and
long a broad-based
security index call

option contract on the
same index

Narrow-based

20% of the current

The lower of: (1)
10% of the

aggregate exercise
price of the call

market value of the

plus the aggregate

short basket of narrow-

call out-of-the-

security index

based security futures,

money amount, if

plus pay for the long

any; or (2) 20% of

call in full.

the current market
value of the short

basket of security
futures.



Short security future
(or basket of security
futures representing

each component of a
narrow-based

Individual stock

20% of the current

20% of the current

market value of the

market value of the

short security future.

short security

or narrow-based

plus the aggregate put

future, plus the

securities index) and
short put option on the

same underlying
security (or index)

security index

in-the-money amount, if

aggregate put in-

any. Proceeds from the

the-money amount.

put sale may be applied.

ifany.*

Long security future
and short position in
the same security (or
securities basket)
underlying the security

future

Individual stock
or narrow-based

security index

The initial margin

required under

Regulation T for the
short stock or stocks.

5% of the current
market value as
defined in
Regulation T of the
stock or stocks

underlying the
security future.

Long security future
(or basket of security
futures representing
each component of a
narrow-based
securities index) and
short call option on the
same underlying
security (or index)

Individual stock

20% of the current

market value of the long
security future, plus the

or narrow-based

aggregate call in-the-

security index

money amount, if any.

Proceeds from the call
sale may be applied.

20% of the current
market value of the
Jong security future,
plus the aggregate
amount, if any.

3_“In-the-money” amounts must be determined as follows:

(1) _for stock call options and warrants, any excess of the current market value (as determined in accordance

with Regulation T of the Board of Govemors of the Federal Reserve System) of the option or warrant over

its aggregate exercise price;

(2) for stock put options or warrants, any excess of the aggregate exercise price of the option or warrant over

its current market value (as determined in accordance with Regulation T of the Board of Governors of the

Federal Reserve System);

(3) for stock index call options and warrants, any excess of the product of the current index value and the

applicable index multiplier over the aggregate exercise price of the option or warrant; and

4) for stock index put options and warrants, any excess of the aj
ict of the current index value and the ay

over the pr

licable index multiplier.

regate exercise price of the option or warrant



13

Short security future
and long position in a
security immediately
convertible into the
same security
underlying the security

future, without

restriction, including
the payment of money

Individual stock
or narrow-based

security index

The initial margin
required under
Regulation T for the
long security.

10% of the current
market value, as
defined in
Regulation T, of the
long security.

14

Short security future
(or basket of security
futures representing
each component of a
narrow-based
securities index) and
long call option or
warrant on the same
underlying security (or
index)

Individual stock

20% of the current

The lower of: (1)
10% of the

aggregate exercise
price of the call

market value of the

plus the aggregate

or narrow-based

short security future

call out-of-the-

security index

plus pay for the call in

money amount, if

full.

any; or (2) 20% of
the current market
value of the short
security future.

15

Short security future,
short put option and
long call option. The
short security future,
short put and long call
must be on the same
underlying security
and the put and call
must have the same

exercise price.
(Reverse Conversion)

Individual stock

20% of the current
market value of the

10% of the

short security future

aggregate exercise

plus the aggregate put

price, plus the

in-the-money amount, if
any, plus pay for the call

aggregate put in-
the-money amount

in full. Proceeds from
put sale may be applied.

if any.

16

Long (short) a basket
of security futures,
each based on a
narrow-based security
index that together
tracks the broad-based
index and short (long)
a broad-based index
future

Narrow-based

5% of the current
market value for the

5% of the current
market value of the

security index

long (short) basket of

long (short) basket

security futures.

of security futures.



May 16, 2006

Ms. Jean A. Webb

Secretary

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21* Street, N.W.

Washington, D.C. 20581
Reference File #2655.02
Rule Certification

Dear Ms. Webb:

Pursuant to Commission Regulations 40.6 and 41.49(b)(2), the Chicago Board of Trade
(CBOT®) hereby submits the following:

- New Regulations 431.07 and 431.08 and a new Policy and new Procedures for
Chicago Board of Trade Security Futures Market Maker Registration per
the attached texts.

New Regulations 431.07 and 431.08 address customer margins for CBOT Security Futures
positions held in futures accounts. The new Policy and Procedures address the Exchange’s
security futures market: maker program for CBOT Security Futures.

As the Commission was notified by submission dated March 20, 2006 (CBOT Reference File
#2655.01), the CBOT filed the referenced provisions with the SEC in March 2006 for approval
in accordance with Section 19(b)(2) of the Securities and Exchange Act of 1934. The SEC
approved these provisions on April 14, 2006.

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

There were no opposing views concerning these provisions.

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

Sincerely,

Paul J. Draths
Vice President and Secretary


Chicago Board of Trade Security Futures Market Maker
Registration Policy and Procedures

Security Futures Market Maker Program

Pursuant to CBOT® Rule 225.00, the Exchange has adopted a security futures market maker
program under which an individual member or member firm (each referred to as a “member”
herein) may be registered with the CBOT as a “Security Futures Dealer” with respect to one or
more security futures contracts traded on the Exchange, to provide liquidity and orderliness in
the market for such contracts. In order to be registered as a Security Futures Dealer, the
member must complete and file with the Exchange, a CBOT Security Futures Dealer
Registration Form (attached below). The member will be required to identify all CBOT security
futures contracts for which it seeks to be registered as a Security Futures Dealer and to elect one
of the categories of market maker obligations set forth in CBOT Regulation 431.07(c), which are
described below. By signing the Registration Form, the member will confirm that it meets and
will continue to meet the requirements to act as a security futures market maker under CBOT
Rules and Regulations.

Market Maker Exclusion from

Security Futures Customer Margin Requirements

A member that is a security futures market maker will be excluded from the security futures
customer margin requirements set forth in CBOT Regulation 431.07, if the member meets all of
the following qualifications:

(i) The member must be registered with the Exchange as a dealer in security futures
as defined in Section 3(a)(5) of the Securities Exchange Act of 1934 (“Exchange
Act”); and

(ii) The member must be registered as a floor broker or a floor trader under Section
4f(a)(1) of the Commodity Exchange Act (“CEA”), or be registered as a dealer
with the Securities and Exchange Commission (“SEC”) under Section 15(b) of
the Exchange Act; and

(iii) | The member must maintain records sufficient to prove compliance with the
requirements set forth in CBOT Regulation 431.07 and Commodity Futures
Trading Commission (“CFTC”) Regulation 41.42(c)(2)(v) or SEC Regulation
242.400(c)(2)(v), as applicable, including without limitation, trading account
statements and other financial records sufficient to detail activity; and

(iv) — The member must hold itself out as being willing to buy and sell security futures
for its own account on a regular or continuous basis.


(d) If a Customer fails to comply with a margin call within a reasonable period of time (the
member firm may deem one hour to be a reasonable period of time), the relevant member
firm shall take the deduction required with respect to_an_undermargined account in

computing its net capital under applicable CFTC and SEC Regulations.
(e) If at any time there is a liquidating deficit in an account in which Security Futures are

held, the member firm shall take steps to liquidate positions in the account promptly and
in an orderly manner.



Long security future
and short security

Individual stock

The greater of: 5% of

The greater of: 5%
of the current

the current market value

market value of the

of the long security

long security

9 |futureonthesame | ornarow-based | Fiture: or (2) 5% ofthe | future; or (2) 5% of
underlying security (or | security index
index current market value of | the current market
index) the short security future. | value of the short
security future.
Long security future,
1
shen call option The 20% ofthe current
.
market value of the long | 10% of the
Jong security future, security future, plus the | aggregate exercise
long put and short call | Individual stock Pr ,
aggregate call in-the- price, plus the
10} must be on the same or narrow-based rs .
r we money amount, if any aggregate call in-
underlying security security index F
plus pay for the put in the-money amount.
and the put and call :
full. Proceeds from the | if any.
must have the same .
r 1 call sale may be applied.
exercise price.
(Conversion)
The lower of: (1)
Long security future, 10% of the
long put option and 9, aggregate exercise
short call option. The 20% of the current price of the put plus
market value of the long
long security future. security future. plus the the aggregate put
a ity future, plus the
long put and short call | Individual stock Fs out-of-the money
aggregate call in-the- ~
11] must be on the same or narrow-based ~ amount, if any; or
ea deine caeurity. ae money amount, if any, 0
underlying security security index ~ (2) 20% of the
rs plus pay for the put in .
and the put exercise aggregate exercise
full. Proceeds from call -
price must be below ~ price of the call,
7 . sale may be applied.
the call exercise price plus the aggregate
(Collar) call in-the-money
amount, if any.
Short security future 5% of the current
and long position in Individual stock The initial margin market value, as
the same security (or on | required under defined in
12 or narrow-based

securities basket)
underlying the security

future

security index

Regulation T for the

Regulation T, of the

long stock or stocks.

long stock or

stocks.



(iii)During at least 50% of the trading day, the Market Maker has bids or offers in the
market that are at or near the best market, except in unusual market conditions as

determined by the Exchange (such as a fast market in either a Security Futures
Contract or a security underlying a Security Futures Contract), with respect to at
least 25% (in the case of an Unlimited Assignment) or at least one (in the case of
a Limited Assignment) of its assigned Security Futures Contracts; and

(iv) The requirements in (ii) and (iii) are satisfied on (a) at least 90% of the trading
days in each calendar quarter _by Market Makers who have undertaken_an
Unlimited Assignment; or (b) at least 80% of the trading days in each calendar
quarter by Market Makers who have undertaken a Limited Assignment; or (c) on
at least 80% of the trading days in each calendar quarter by Market Makers who
have undertaken either_an Unlimited Assignment_or Limited Assignment_but
where the Exchange is listing four (4) or fewer Security Futures Contracts.

For purposes of clauses (1) and (2) above, beginning on the 181" calendar day after the
commencement of trading of Security Futures Contracts on the Exchange, a “meaningful
proportion of the total trading volume of Security Futures Contracts on the Exchange”
shall mean a minimum of 20% of such trading volume.

Any Market Maker that fails to comply with the applicable Rules of the Exchange, CFTC
Regulations 41.42 through 41.49 or SEC Regulations 242.400 through 242.406, as
applicable, shall be subject _to disciplinary action in accordance with Chapter 5.
Appropriate sanctions in the case of any such failure shall include, without limitation, a
revocation of such Market Maker’s registration with the Exchange as a Security Futures
Dealer.

(d) The Exchange shall establish initial and maintenance margin requirements applicable to
Security Futures that are held in a futures account, provided that the margin requirement
for any long or short position held by a member firm on behalf of a Customer shall not be
less than 20% of the current market value of the relevant Security Futures Contract, or
such other requirement_as may be established by the CFTC and SEC for purposes of
CFTC Regulation 41.45(b)(1) and SEC Regulation 242.403(b)(1), unless a lower margin

level is available for such position pursuant to paragraph (e) below.

(e) Initial and maintenance margin requirements for offsetting positions involving Security
Futures and related positions are provided in the schedule below, for purposes of CFTC
Regulation 41.45(b)(2) and SEC Regulation 242.403(b)(2).



(b) _ five (5) contracts for each security futures product specified by the
member to the extent such quotations are provided for delivery months
other than the next two delivery months then trading; and

(o) one (1) contract for any single stock futures contract where the average
market price for the underlying security was $100 or higher for the
preceding calendar month or for any futures contract on a narrow-based
security index, as defined by Section 1a(25) of the CEA.

Products

As noted above, in completing the CBOT Security Futures Dealer Registration Form, a member
must specify all CBOT security futures contracts for which it intends to act as a market maker.
The Exchange will assign to the member all of the security futures contracts listed, unless the
CBOT provides written notice to the member identifying any security futures contracts for which
such assignment is not being granted. A member may change the list of contracts for which it
undertakes to act as a market maker

for any calendar quarter by filing a revised CBOT Security Futures Dealer Registration Form
with the Exchange on any business day prior to the last trading day of the quarter, and the
change shall be effective retroactive to the first trading day of the quarter. Each market maker
shall be responsible for maintaining books and records that confirm that it has fulfilled its
quarterly obligations under the market maker category specified on its Registration Form with
respect to all CBOT security futures contracts assigned for that calendar quarter.


records sufficient to detail activity; and (c) hold itself out as being willing to buy and sell
Security Futures for its own account on a regular or continuous basis.

A Market Maker satisfies condition (c) above if any of the following three requirements
are fulfilled:

(1) The Market Maker:

(i) Provides continuous two-sided quotations throughout the trading day for all
delivery months of Security Futures Contracts _representing a_meaningful
proportion of the total trading volume of Security Futures Contracts on the
Exchange, subject to relaxation during unusual market conditions as determined
by the Exchange (such as a fast market in either a Security Futures Contract or a
security underlying a Security Futures Contract) at which times the Market Maker
must use its best efforts to quote continuously and competitively: and

(ii) When providing quotations, quotes with a maximum bid/ask spread of no more
than the greater of $0.20 or 150% of the bid/ask spread in the primary market for
the security underlying each Security Futures Contract.

2) The Market Maker:

(i) Responds to at least 75% of the requests for quotation for all delivery months of
Security Futures Contracts representing a meaningful proportion of the total
trading volume of Security Futures Contracts_on the Exchange, subject_to
relaxation during unusual market conditions as determined by the Exchange (such
as_a fast market in either a Security Futures Contract or a security underlying a
Security Futures Contract) at which times the Market Maker must_use its best
efforts to quote competitively; and

(ii) When responding to requests for quotation, quotes within five seconds with a
maximum bid/ask spread of no more than the greater of $0.20 or 150% of the
bid/ask spread _in the primary market for the security underlying each Security
Futures Contract.

(3) The Market Maker:

(i) Is assigned to a group of Security Futures Contracts listed on the Exchange that is
either unlimited in nature (“Unlimited Assignment”) or is assigned to no more
that_20% of the Security Futures Contracts listed on the Exchange (“Limited
Assignment”); and

(ii) At least 75% of the Market Maker’s total trading activity in Exchange Security
Futures Contracts is in its assigned Security Futures Contracts, measured on a

quarterly basis; and



New Regulation 431.07 Customer Margins for Security Futures Positions Held in
Futures Accounts

Margin requirements associated with Security Futures positions, which result from

transactions made on the Exchange on behalf of Customers, and which are held in a futures

account, shall be determined and administered in accordance with the Rules and Regulations

of the Exchange, and in compliance with CFTC Regulations 41.42 through 41.49 and SEC

Regulations 242.400 through 242.406. With regard to such Security Futures positions, if

Exchange Rules or Regulations are inconsistent with CFTC Regulations 41.42 through 41.49

and SEC Regulations 242.400 through 242.406, including any successor Regulations, the

CFTC and SEC Regulations shall prevail.

(a) Initial and maintenance margin rates used in determining Exchange margin requirements
applicable to Security Futures that are held on behalf of Customers in a futures account
shall be established at levels no lower than those prescribed by CFTC Regulation 41.45
and SEC Regulation 242.403, including any successor Regulations.

(b) As _used in this Regulation, the term “Customer” does not include (a) an “exempted
person” as defined in CFTC Regulation 41.43(a)(9) and SEC Regulation 242.401(a)(9);
or (b) Market Makers as defined below.

(c) A Person shall be a “Market Maker” for purposes of this Rule, and shall be excluded
from the requirements set forth in CFTC Regulations 41.42 through 41.49 and SEC
Regulations 242.400 through 242.406, as applicable, in accordance with CFTC
Regulation 41.42(c)(2)(v) and SEC Regulation 242.400(c)(2)(v), with respect to all
trading in Security Futures for its own account, if such Person is an Exchange Member
that is registered with the Exchange as a “Security Futures Dealer.”

Each such Market Maker shall: (a) be a member of the Exchange and be registered as a
floor trader or a floor broker with the CFTC under Section 4f(a)(1) of the CEA or be
registered_as a dealer with the SEC under Section 15(b) of the Exchange Act; (b)
maintain records sufficient to prove compliance with the requirements set forth in this
Regulation and CFTC Regulation 41.42(c)(2)(v) or SEC Regulation 242.400(c)(2)(v), as
applicable, including without limitation, trading account statements _and other financial



CBOT Regulation 431.07 also provides that any market maker that fails to comply with
applicable CBOT, CFTC, or SEC Rules or Regulations, shall be subject to disciplinary action in
accordance with Chapter 5 of the CBOT Rulebook. Appropriate sanctions in

the case of any such failure shall include, without limitation, a revocation of the market maker’s
registration with the Exchange as a Security Futures Dealer.

Market Maker Categories

CBOT Regulation 431.07(c) specifies three alternative ways for a member to satisfy the
requirement that a market maker hold itself out as being willing to buy and sell security futures
for its own account on a regular or continuous basis. Each member seeking market maker
designation must register for one of the following three market maker categories and will
undertake to perform all of the obligations set forth in the elected category:

Category 1 (CBOT Regulation 431.07(c)(1))

The market maker will provide continuous two-sided quotations throughout the trading
day for all delivery months of security futures contracts representing a meaningful
proportion of the total trading volume of security futures contracts on the Exchange,”
subject to relaxation during unusual market conditions as determined by the Exchange
(such as a fast market in either a security futures contract or a security underlying a
security futures contract) at which times the market maker must use its best efforts to
quote continuously and competitively. The market maker must provide quotations for a
minimum quantity of one (1) contract with a maximum bid/ask spread of no more than
the greater of $0.20 or 150% of the bid/ask spread in the primary market for the
underlying security.

Category 2 (CBOT Regulation 431.07(c)(2))

The market maker will respond to at least 75% of the requests for quotation for all
delivery months of security futures contracts representing a meaningful proportion of the
total trading volume of security futures contracts on the Exchange,* subject to relaxation
during unusual market conditions as determined by the Exchange (such as a fast market
in either a security futures contract or a security underlying a security futures contract)
at which times the market maker must use its best efforts to quote competitively. When
responding to requests for quotation, the market maker must quote within five seconds for
a minimum quantity of one (1) contract with a maximum bid/ask spread of no more than
the greater of $0.20 or 150% of the bid/ask spread in the primary market for the
underlying security.

Category 3 (CBOT Regulation 431.07(c)(3))

* Beginning on the 181" calendar day after the commencement of trading of security futures contracts on the
Exchange, a “meaningful proportion of the total trading volume of security futures contracts on the Exchange” will
mean a minimum of 20% of such trading volume.