CCFE

Chicago Climate Futures Exchange

CCFE Advisory 2006-24
To: CCFE Members

From: William Boyk
Senior Vice President — Exchange Operations

Date: August 23, 2006

Re: Revised Block Trade Minimum Size Requirement

CCFE Rule 412 ~ Block Trades, paragraph (a)(i)(B) states that block trades must “...be for at
least such minimum number of Contracts as will from time to time be specified by the

Exchange...”.

CCFE had previously established a minimum block trade requirement of 20 contracts (500
allowances) in any single Sulfur Financial Instrument (“SFI”) future contract month.

Effective on August 24", CCFE is eliminating the minimum block trade size requirement
for the spot month contract; the requirement remains for all other contract months.

For additional information regarding block trades, please review the CCFE Block Trade and EFP
Procedures document that can be found at
http://vww.chicagoclimateexchange.com/membership_ccfe/resources. html.

Questions regarding this advisory may be directed to the above at 312.554.1019 /
e.com or Fran Kenck, Vice President - Compliance, at
312.229.5162 or fkenck@chicagoclimateexchange.com.



Chicago Climate Futures Exchange LLC

2 Block Trades

2.1 Minimum Block Trade Size

CCFE will communicate via Member Notices the minimum number of contracts
required for an eligible block trade. The Member Notices may also be found on
CCFE’s website at www.chicagoclimateexchange.com.

2.2, Submitting Block Trades

All negotiated block trades must be reported to the CCX Help Desk. For block
trades between two Trading Privilege Holders or Customers or Non-Customers of
one or both of the Trading Privilege Holders, CCFE requires both Trading
Privilege Holders to report the block trade to the CCX Help Desk.

The CCFE Ckaring Member/Trading Privilege Holder(s) that wil] be responsible
for the clearance of a block trade must, within 15 minutes of completion of the
negotiations, submit via facsimile the CCFE Block Trade Confirmation form.
(See Exhibit 1) No block trade will be conducted without a completed CCFE
Block Trade Confirmation form from the TPH(s).

Such written confirmation must be faxed to the CCX Help Desk at (770) 951-
5481 and must include, at a minimum:

Buyer Clearing Trading Privilege Holder
Buyer Clearing TPH name
Buyer TPH Clearing ID
Buyer Authorized Trader
Seller Clearing TPH name
Signature of the submitting Authorized Trader
Contact information for the submitting Authorized Trader

Seller Clearing Trading Privilege Holder
Seller Clearing TPH name
Seller TPH Clearing ID
Seller Authorized Trader
Buyer Clearing TPH name
Signature of the submitting Authorized Trader
Contact information for the submitting Authorized Trader

In addition, each Clearing TPH will include on their copy of the Block Trade
Confirmation form the following:
Account Number or Account ID of buyer or seller as applicable

Version 1.0

2 10/12/2004



. . 190 South LaSalle Street, Suite G00 = T 312,554.3
Chicago Climate Exchange’ Chicago, Winois 60003 32.

August 23, 2006

Ms. Jean A. Webb >
Secretary

Commodity Futures Trading Commission
Three Lafayette Centre

1155 21" Street, N.W.

Washington, C.C. 20581

Re: Chicago Climate Futures Exchange, LLC
Submission No. 06-07

Dear Ms. Webb:

Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended (the “Act”) and Parts 40.6 of
the regulations promulgated by the Commodity Futures Trading Commission (“CFTC”) under the Act,
Chicago Climate Futures Exchange, LLC (“CCFE”) hereby amends its minimum spot month contract
requirement for block trades.

The Exchange amends its block trade procedures to eliminate the minimum block trade size requirement
for the spot month contract; the requirements remain the same in all other contract months.

CCFE intends to make these amendments effective as of August 24, 2006. The Exchange certifies that
these amendments neither violate nor are inconsistent with any portion of the Act or of the rules
thereunder.

Please find enclosed herewith three appendices. Appendix A is the new CCFE Member Advisory.
Appendix B is Rule 412 of the CCFE Rulebook, entitled “Block Trading”. Appendix C is the Section 2.1 of
the CCFE Block Trade and Procedures document, entitled “Minimum Block Trading Size”.

Should you require additional information regarding this submission, please contact me at 312.554.0812.
Please reference our submission number 06-07 in any related correspondence.

Very tru)

Afn M. Cresce
Senior Vice President & General Counsel

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Martin Murray
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(j) Exchange of Future for Physical prices will not trigger unexecuted
Orders.

412. Block Trading

(a) Trading Privilege Holders may enter into transactions outside the
CCFE Trading Platform, at prices mutually agreed, with respect to Contracts
that have been designated by the Exchange for such purpose, provided all of
the following conditions are satisfied (such transactions, “Block Trades”):

@ Each buy or sell order underlying a Block Trade must
(A) state explicitly that it is to be, or may be, executed by means of a
Block Trade and (B) be for at least such minimum number of Contracts as
will from time to time be specified by the Exchange; provided that only
(x) a commodity trading advisor registered under the CEA, (y) an
investment adviser registered as such with the Securities and Exchange
Commission that is exempt from regulation under the CEA and
Commission Regulations thereunder and (z) any Person authorized to
perform functions similar or equivalent to those of a commodity trading
advisor in any jurisdiction outside the United States in which the
Exchange may be permitted from time to time to operate CCFE
Workstations, in each case with total assets under management exceeding
US$25 million, may satisfy this requirement by aggregating orders for
different accounts.

(ii) Each party to a Block Trade must qualify as an “eligible
contract participant” (as such term is defined in Section 1a(12) of the
CEA); provided that, if the Block Trade is entered into on behalf of
Customers by (A) a commodity trading advisor registered under the Act,
(B) an investment adviser registered as such with the Securities and
Exchange Commission that is exempt from regulation under the Act and
Commission Regulations thereunder or (C) any Person authorized to
perform functions similar or equivalent to those of a commodity trading
advisor in any jurisdiction outside the United States in which the
Exchange may be permitted from time to time to operate CCFE
Workstations, in each case with total assets under management exceeding
US$25 million, then only such commodity trading advisor or investment
adviser, as the case may be, but not the individual Customers, need to so
qualify.

(b) Each party to a Block Trade must comply with all applicable
Rules of the Exchange other than those which by their terms only apply to
trading through the CCFE Trading Platform.

(c) When negotiating or executing a Block Trade, a Trading Privilege
Holder or Authorized Trader must ensure that the price quoted for a Block
Trade represents a fair and reasonable price. The price at which a Block
Trade is executed must be fair and reasonable in light of (i) the size of such

37



Block Trade, (ii) the prices and sizes of other transactions in the same
Contract at the relevant time, (iii) the prices and sizes of transactions in other
relevant markets, including without limitation the underlying cash and futures
markets, at the relevant time, and (iv) the circumstances of the parties to such
Block Trade.

(d) Block Trades must be reported to the Exchange in a manner
prescribed from time to time by the Exchange. Block Trades must be reported
to the Exchange within 15 minutes after the completion of negotiations, but
may not be submitted any later than 15 minutes prior to the Contract’s
Trading Session close time.

(e) Block Trades executed after the Exchange’s trading hours must be
reported within 15 minutes after the opening of the next Trading Session.

(f) For Block Trades between two Trading Privilege Holders or
Customers or Noncustomers of one or both of the Trading Privilege Holders,
the Exchange requires both Trading Privilege Holders to report the Block
Trade.

(g) The Exchange will review the information submitted by the
Trading Privilege Holder(s) for the Block Trade and will post the Block Trade
to the CCFE Trading Platform if the details are complete and accurate in
accordance with this Rule. The Exchange will immediately publicize
information identifying the trade as a Block Trade and identifying the relevant
Contract, contract month, price or premium, quantity and, if applicable,
whether the transaction involved a put or a call and the strike price.

(h) Block Trades are not permitted during the last Trading Session for
a Contract delivery month.

(i) Block Trade prices will not trigger unexecuted Orders.

(j) Each Trading Privilege Holder that is party to a Block Trade must
record the following details on its order ticket: the Contract (including the
Delivery Month) to which such Block Trade relates; the number of Contracts
traded; the price of execution or premium; the time of execution; the identity
of the counterparty; and, if applicable, details regarding the Customer or
Noncustomer for which the Block Trade was executed, the Underlying
Commodity, whether the transaction involved a put or a call and the strike
price. Upon request by the Exchange, such Trading Privilege Holder must
produce satisfactory evidence, including the order ticket referred to in the
preceding sentence that the Block Trade meets the requirements set forth in
this Rule 412.

(k) Any Block Trade in violation of these requirements will constitute
conduct which is inconsistent with just and equitable principles of trade.

38