Ms. Jean A. Webb
June 28, 2005
Page 5 of 5

Appendix 2: Clean Copy of Rules as Amended
CHAPTER 710: PHYSICALLY DELIVERED SINGLE SECURITY FUTURES
71004. APPROVED SECURITIES

The following securities have been approved by the Board of Directors as the subject of Physically
Delivered Single Security Futures Contracts:

Unit of Position Limit in
Approved Security Tradin; Minimum Fluctuation Expiring Contract in
id Last 5 Trading Days
Nasdaq-100 Tracking StockTM
mn 7 200 shares $0.01 or $2.00 per contract 11,250
£°QQQQ”) P
Standard & Poor’s Depositary
100 sh: 0.01 1.00 tract 2.
Receipts® (“SPDR”) shares S$ or$ per contract 22,500
iShares Russell 2000 (“IWM”) 200 shares $0.01 or $2.00 per contract 11,250



Ms. Jean A. Webb
June 28, 2005
Page 4 of 5

Appendix 1: Physically Delivered Single Security Futures

(Additions are underlined, deletions are bracketed and overstruck.)

CHAPTER 710: PHYSICALLY DELIVERED SINGLE SECURITY FUTURES

71004. APPROVED SECURITIES

The following securities have been approved by the Board of Directors as the subject of Physically
Delivered Single Security Futures Contracts:

Unit of Position Limit in
Approved Security Tenn Minimum Fluctuation | Expiring Contract in
e Last 5 Trading Days
- i
Nasdaq-1 roooone Stock 200 shares | $0.01 or $2.00 per contract 11,250
Standard & Poor's Depositary
100 shi .01 or $1.00
Receipts® SPDR") 0 shares | $0.01 or $1.00 per contract 22,500
iShares Russell 2000 (‘IWM") 200 shares | $0.01 or $2.00 per contract [23,500] 11,250



cmeé

Chicago Mercantile Exchange

20 South Wacker Drive 312/930.1000 tel
Chicago, IL 60606-7499 312/466.4410 fax
www.cme.com

June 28, 2005

Ms. Jean A. Webb

Office of the Secretariat

Commodity Futures Trading Commission
Three Lafayette Centre

1155 21" Street, N.W.

Washington, D.C. 20581

RE: SECURITY FUTURES PRODUCT RULE SUBMISSION
Section 5c(c) and Regulation §41.24 Submission ~ Exchange Certification of Rule
Amendments Governing Physically Delivered Single Security Futures.
CME Submission #05-68.

Dear Ms. Webb:

Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) hereby submits, pursuant to
Section 5c(c) of the Commodity Exchange Act (“CEA”) and Regulation §41.24 thereunder,
amendments to Rules governing the trade of physically delivered single security futures.

1. Text of Rules

CME proposes to amend its Rules governing the trade of physically delivered single
security futures as documented in Appendix 1 below with a clean copy of such Rules as
amended included in Appendix 2 below.

Note that the Exchange had previously certified its Rules governing the trade of
physically delivered single security futures with the Commission by correspondence dated May
4, 2005 (CME Submission #05-45) and May 27, 2005 (CME Submission #05-58). Per its May
4" correspondence, the Exchange proposed to list futures based on three Exchange Traded
Funds, specifically, the Nasdaq-100 Tracking StockTM (“QQQQ”), Standard & Poor’s Depositary
Receipts® (“SPDR”) and iShares Russell 2000 (“IWM”). Per its May 27 correspondence, the
Exchange amended Rules governing the IWM contract to reflect the 2-for-1 split in that security
on June 9, 2005.



Ms. Jean A. Webb
June 28, 2005
Page 2 of 5

2. Submission to SEC

Per Commission Regulation §41.24(a)(3), the Exchange certifies that it has submitted the
subject rule amendments to the Securities and Exchange Commission (“SEC”) by letter dated
June 28, 2005 and in accordance with Section 19(b)(7) of the Exchange Act and Rule 19b-7
thereunder (see File No. SR-CME-2005-01). A copy of this document has been sent under
separate cover to the Commission’s Office of the Secretariat.

3. Certifications

Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) hereby submits, pursuant to
Section 5c(c) of the Act and Regulation §41.24(a)(4) thereunder, certification that the Rule
amendments documented herein and the affected security futures product complies with the Act
and ruled thereunder.

4. Date of Implementation

Per Commission Regulation §40.6(a)(3)(iii), please note that the Exchange intends to
make these Rules effective on June 29, 2005. We acknowledge that the Commission may stay
the effectiveness or alter or amend the rule pursuant to section 8a(7) of the Act, as provided in
Commission Regulation §40.6(b).

4. Purpose and Explanation of Rule Amendments

The Exchange proposes to amend the position limits applicable to [WM futures from the
originally proposed limit of 13,500 contracts to 11,250 contracts. Note that CME Rule 71001.E.,
Position Limits, provides that “[pJosition limits shall be applied on Physically Delivered Single
Security Futures contracts such that, during the last five trading days of an expiring contract
month, a person shall not own or control more than a specified number of contracts net long or
net short in the expiring contract month, as depicted in Exchange Rule 71004. Position limits for
each Physically Delivered Single Security Futures contract shall be determined on a case-by-case
basis in accordance with CFTC Regulation §41.25(a)(3).”

As originally submitted on May 4, 2005, CME Rule 71004, APPROVED SECURITIES,
provided that the position limit applied to futures based on the iShares Russell 2000 (“IWM”)
during the last five trading days of an expiring contract month shall be 13,500 contracts. This
figure was determined by reference to CFTC Regulation §41.25(a)(3) which prescribes
appropriate position limits by reference to the average daily volume (ADV) in the security over
the prior six (6) months and the shares outstanding. Specifically, CFTC Regulation
§41.25(a)(3)(i) allows for “‘a net position limit no greater than 13,500 (100-share) contracts.”



Ms. Jean A. Webb
June 28, 2005
Page 3 of 5

But the CFTC Regulation §41.25(a)(3)(i)(A) goes on to specify that “where the average
daily trading volume in the underlying security exceeds 20 million shares, or exceeds 15 million
shares and there are more than 40 million shares of the underlying shares of the underlying
security outstanding, the designated contract market ... may adopt a net position limit no greater
than 22,500 (100-share) contracts.” IWMs did not qualify for the 22,500 limit on a pre-split
basis as shown in the table below. But if one were to adjust the ADV and shares outstanding for
IWM to reflect the 2-for-1 split concluded on June 9, 2005, the statistics are doubled. Thus,
IWMs meet the qualifications outlined in CFTC Regulation §41.25(a)(3)(i)(A). To the extent
that the Exchange amended the contract size from the originally proposed 100-share contract to a
200-share contract as a result of the split by correspondence dated May 27, 2005, that 22,500
limit need be halved to 11,250 contracts.

IWM Statistics

ADV Shares Out-
(10/04-3/05) standing (000)
Pre-Split 8,022,330 40,950 (4/22/05)
Post-Split [16,044,660 | _ 81,900 (4/22/05)

Please address any questions that arise during the review and approval process to myself
at 312-466-7469 or via e-mail at jlab@cme.com. We would be most appreciative if you would
reference CME Submission #05-68 in any related correspondence.

Sincerely,

a

John W. Labuszewski, Managing Director
Research & Product Development

Att.

ce: Office of Market Supervision
Division of Market Regulation
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-1003