CROLN TURES EXON 1% JUL 31 Po: 10

July 31, 2006 OFC. OF THE SECRETARIAT

Via Electronic Mail

Ms. Eileen A. Donovan

Acting Secretary

Commodity Futures Trading Commission
ette Centre

1155 21st Street, NW

Washington, D.C. 20581

Re: CBOE F Certification

Dear Ms. Donovan:

Pursuant to Section Se(c)(1) of the Commodity Exchange Act. as amended ("Act"), and
§40.6(a) of the regulations promulgated by the Commodity Futures ‘Trading Commission under
the Act. CBOE Futures Exchange, LLC ("CFE" or "Exehange"”) hereby submits a new rule that
sets forth CFE's Independent Software Vendor Incentive Program ("ISV Program")

The ISV Program will commence on August 1, 2006.
CFE 1s not aware of any substantive opposing views to the ISV Program.

CFE hereby certifies that the ISV Program comphes with the Act and the regulations
thereunder.

eee ER

The ISV Program, to be added as Policy and Procedure V to CFE's Policies and

Procedures. is as follows:
CFE Policy and Procedure V. Independent Software Vendor Incentive Program

Any Independent Software Vendor (ISV) is eligible to request to participate in the
Program. The Exchange may approve up to five [SVs to participate in the Program. The
Exchange shall select ISVs to participate in the Program based upon the Exchange's judgment as
to which ISVs would provide the greatest amount of access to the Exchange.

For purposes of the Program, an ISV is an organization that desires to provide or provides
connectivity to the CBOE System on behalf of one or more Trading Privilege Holders (TPHs)
and is not itselfa TP]. Each TPH that accesses the CBOE System through the services of an ISV
is subject to all of the Rules of the Exchange that apply to TPHs, including the requirement that
any such TPH that is not a Clearing Member be guaranteed by a Clearing Member.

An ISV parucipant in the Program shall receive a designated one-time payment amount
from the Exchange if the ISV completes the necessary interface work and first establishes

400 South LaSalle Street Chicago, Illinois 60605-1023 www.cboe.com/cfe


Ms. Eileen A. Donovan
Page 2 of 2

connectivity to the CBOE System during the time period from August 1. 2006 through April 30.
2007 ("ISV Connection Payment").

An ISV participant in the Program shall also receive a designated monthly payment
amount for each TPH organization for which the ISV provides connectivity to the CBOE S:
during any month within the time period from August 1, 2006 through August 31, 2007 ("TPH
Connection Payment"), except that an ISV participant shall not receive TPH Connection
Payments for more than four TPH organizations for a particular month.

The Program shall commence on August 1. 2006 and terminate on August 31, 2007. The
Exchange may determine to extend the term of the Program. allow the Program to expire, or
replace or modify the Program at any time.

eR

The designated amount of the one-ume ISV Connection Payment under the ISV Program
ied amount of the monthly TPH Connection Payment under the ISV Program
were separately submitted to Commission staff on July 31, 2006 pursuant to a Freedom of
Information Act ("FOIA") confidential treatment request.

CFE beheves that all material terms of an incentive program to be wmplemented by a
designated contract market ("DCM"), including the payment terms under the program, should be
disclosed in the publicly submitted rule certification filing for that program. Accordingly, CFE
has previously included all of the material terms of CFE's incentive programs, including the
payment terms, in the publicly submitted CFE rule certification filings for those programs.
However. other DCMs have not done so. Therefore, CFE feels compelled going forward to
request confidential treatment for certain aspects of its incentive programs so as to maintain a
level playmg field with other DCMs until such time that all DCMs are required to make full
disclosure regarding the material terms of their incentive payment programs in their publicly
submitted rule certification filings.

Questions regarding this submission may be directed to Arthur Reinstein at (312) 786-
7570. Please reference our submission number CFE-2006-12 in any related correspondence.

CBOE Futures Exchange, LLC

fatrick J. Fay
Managing Director

ce Nancy Markowitz (CFTC)
David Steinberg (CFTC)
Mark Baumgardner (OCC)
Edward Dasso (NFA)