November 7, 2005

Ms. Jean A. Webb

Secretary

Commodity Futures Trading Commission
Three Lafayette Center

1155 21" Street, N.W.

Washington, D.C. 20581

Reference File #2596.01
Rule Certification

Dear Ms. Webb:

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

- Clarification, via the attached Notice, concerning margin treatment afforded to
members pursuant to CBOT Regulation 431.01.

The Exchange intends to implement the referenced information no later than one day after the
Commission’s receipt of this filing.

There were no opposing views concerning this Notice.

The CBOT certifies that the provisions of this Notice comply with the Commodity Exchange Act
and the rules thereunder.

Sincerely,

Paul J. Draths
Vice President and Secretary


November 4, 2005

Notice

RE: Non-Clearing Members - Margins

The Financial Compliance Committee issued a notice on May 19, 2005 clarifying the appropriate
margin treatment for members and delegates. Since that time the Exchange has received
requests for additional clarifications as follows:

1)

2)

3)

Is the value of CBOT Holdings Class A common stock included when calculating
the value of an owned membership?

Yes. In calculating the level of collateral in a member’s account that is receiving
mark to market margin treatment, the firm may consider the account’s Net
Liquidating Equity, the market value of securities in the account (less applicable SEC
haircuts), and 50% of the current bid price of an owned Class B membership and any
associated restricted Class A common stock, as quoted in the combination market.

Can my CBOT Holdings Class A common stock be used to margin my account
that is subject to margin due to option positions?

No. Except as discussed in Question 1 above, Class A common stock may not be
used to margin a member’s account until such time as the transfer restrictions are
lifted. Once the transfer restrictions are lifted, the member will be allowed to
deposit his shares with his FCM as margin collateral. The Class A common stock’s
collateral value will be equal to its current market value, as quoted on the New York
Stock Exchange, less a 15% haircut.

If I own a Class B membership but have leased it to someone else, can I still use
that membership as collateral?

No. Once you lease your membership to another party the Class B membership and
any associated restricted Class A common stock can not be used as collateral. Once
the transfer restrictions are lifted, the member will be allowed to deposit his Class A
common stock with his FCM as described in question #2.


4) Will the CBOT adopt a collateral policy similar to the CME’s for individual
option traders?

Yes. The Financial Compliance Committee has agreed to adopt the same policy as
the CME for individual members trading options. This policy allows the lesser of
50% of the value of an owned Class B membership or $100,000 as satisfactory
margin collateral. The policy does not apply if the clearing member firm is
guaranteeing a loan for the purchase of the membership and can only be used to
margin products for which the trader has membership privileges.

5) Can a member firm take an under-margin capital charge in lieu of making a
bona-fide margin or risk call to a member?

No. The Committee would like to stress that under-margin capital charges are not a
substitute for prudent risk management policies, the most basic being the timely
collection of margin or collateral to cover a member’s risk. At a minimum, the
Committee expects that member firms will follow the industry standard as set forth in
the “Margins Handbook”. This standard stipulates that after an account has been
under-margined for 5 consecutive days, the firm may only accept orders that reduce
the account’s risk exposure through either liquidation or the addition of positions that
result in an overall decrease in the account’s risk exposure.

Any question regarding the treatment of member margins should be directed to OIA - Barbara
Lorenzen at (312) 435-3683 or Lori Gialessas at (312) 435-7171.

Paul J. Draths
Vice President and Secretary