SEAT MARKET QUOTES AS OF FRIDAY, NOVEMBER 24, 2006 CLASS BID OFFER LAST SALE AMOUNT LAST SALE DATE CBOT FULL MEMBERSHIP

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1 Exchange November 24, 2006 Volume 34, Number 47 Bulletin The Constitution and Rules of the Chicago Board Options Exchange, Incorporated ( Exchange ), in certain specific instances, require the Exchange to provide notice to the Exchange membership. To satisfy this requirement, a copy of the Exchange Bulletin, including the Regulatory Bulletin, is delivered by free of charge or by hard copy for a fee to all effective members on a weekly basis. Members are encouraged to receive the Exchange and Regulatory Bulletin and Information Circulars via . subscriptions may be obtained by submitting your name, firm if applicable, address, and phone number, to members@cboe.com. There is no charge for delivery of the Exchange and Regulatory Bulletin or for Information Circulars. If you do sign up for delivery, please remember to inform the Membership Department of address changes. Subscriptions for hard copy delivery may be obtained by submitting your name, firm if any, mailing address and telephone number to: Chicago Board Options Exchange, Accounting Department, 400 South LaSalle, Chicago, Illinois 60605, Attention: Bulletin Subscriptions. The cost of an annual subscription (January 1 through December 31) is $ ($ after July 1), payable in advance. For up-to-date Seat Market Quotes, call THE-CBOE and select choice 3 from the main menu, or, visit click CBOE Member Site and then Seat Market Information on the following page. For access to the CBOE Member Web Site, please also notify the Membership Department by sending an to members@cboe.com or by phone at Copyright 2006 Chicago Board Options Exchange, Incorporated SEAT MARKET QUOTES AS OF FRIDAY, NOVEMBER 24, 2006 CLASS BID OFFER LAST SALE AMOUNT LAST SALE DATE CBOE $1,650, $1,900, $1,500, November 17, 2006 CBOT FULL MEMBERSHIP CLASS BID OFFER LAST SALE AMOUNT LAST SALE DATE With CBOE Exercise Right $1,902, $2,300, $1,950, November 17, 2006 Without CBOE Exercise Right $1,376, $6,000, $1,850, May 31, 2006 CBOE Exercise Right $152, $165, $150, November 20, 2006

2 Page November 24, 2006 Volume 34, Number 47 Chicago Board Options Exchange MEMBERSHIP INFORMATION FOR 11/16/06 THROUGH 11/22/06 MEMBERSHIP APPLICATIONS RECEIVED FOR WHICH A POSTING PERIOD IS REQUIRED Nominee(s) / Inactive Nominee(s): Termination Date Individual Membership Applicants Date Posted Michael Dinsmore, Lessor 11/22/ Sturbridge Houston, TX Member Organization Applicants Date Posted Toro Trading, LLC 11/22/06 Matthew G. Calder, Nominee 120 Broadway - 20th Floor New York, NY Danon A. Robinson - Managing Member MEMBERSHIP LEASES New Leases Effective Date Lessor: William F. Egbert 11/21/06 Lessee: Drysdale Holdings, LLC Rate: 0.25% Term: Monthly Lessor: Herzog, Heine, Geduld, Inc. 11/21/06 Lessee: DC Trading Partners, LLC Rate: 0.25% Term: Monthly Lessor: Christopher M. Wheaton Inc. 11/22/06 Lessee: Everest Trading, LLC Gary B. Patzik, NOMINEE Rate: 0.25% Term: Monthly Kevin P. Davitt (KPD) 11/16/06 Market Street Securities, Inc. William R. Bergey (BLY) 11/20/06 Global Execution Brokers, LP David G. Shepard (DGS) 11/21/06 Banc Of America Securities, LLC Glenn A. McMillan 11/21/06 Css, LLC Gregg S. Shamberg (SHM) 11/22/06 Everest Trading, LLC Edward M. Reid (EMR) 11/22/06 Wellington Capital Markets, LLC EFFECTIVE MEMBERSHIPS Individual Members CBT Registered For: Effective Date Michael J. Leitner (MJL) 11/20/06 Allston Trading, LLC Type of Business to be Conducted: Floor Broker Lessor(s): Effective Date William F. Egbert 11/21/06 Terminated Leases Termination Date Nominee(s) / Inactive Nominee(s): Effective Date Lessor: John P. Robinson 11/17/06 Lessee: TD Options, LLC Lessor: Associated Options Inc 11/22/06 Lessee: Everest Trading, LLC Gregg S. Shamberg (SHM), NOMINEE Lessor: Christopher M. Wheaton Inc. 11/22/06 Lessee: Associated Options Inc. Stuart J. Kipnes (KIP), NOMINEE MEMBERSHIP TERMINATIONS Individual Members CBT Registered For: Termination Date Matthew Stodola (WSH) 11/20/06 Citigroup Derivatives Markets Inc. David C. Adent (SUN) 11/20/06 PEAK6 Capital Management, LLC Gregory I. Wasserman (GIW) 11/20/06 Consolidated Trading, LLC Frederick F. Sloneker (SLO) 11/20/06 TD Options, LLC Type of Business to be Conducted: Market Maker Maureen A. Malloy (IMO) 11/20/06 X-Change Financial Access, LLC Type of Business to be Conducted: Floor Broker Jason D. Osier (JDO) 11/21/06 Banc Of America Securities, LLC Type of Business to be Conducted: No Trading Functions Randy N. Chandra 11/21/06 DC Trading Partners, LLC Type of Business to be Conducted: Remote Market Maker Member Organizations Lessee(s): Effective Date DC Trading Partners, LLC 11/21/06 Type of Business to be Conducted: Remote Market Maker Joseph P. Cullen (CUL) 11/22/06 Cutler Group, LP Lessor(s): Termination Date John P. Robinson (JON) 11/17/06

3 Page 3 November 24, 2006 Volume 34, Number 47 Chicago Board Options Exchange CHANGES IN MEMBERSHIP STATUS Member Organizations Effective Date Individual Members Effective Date Ioannis S. Moraitis 11/22/06 From: CBT Registered For SMC Option Management, LLC; Market Maker To: Nominee For SMC Option Management, LLC; Market Maker Gary B. Patzik 11/22/06 From: Lessor To: Lessor/Nominee For Everest Trading, LLC; Market Maker Ryan M. Kole 11/22/06 From: CBT Registered For Consolidated Trading, LLC; Market Maker To: CBT Registered For Consolidated Trading, LLC; Market Maker/Floor Broker Associated Options Inc. 11/22/06 From: Lessor/ Lessee/ Non-Member Customer Business; Associated with a Market Maker/ Floor Broker To: Owner/ Lessee/ Non-Member Customer Business; Associated with a Market Maker/ Floor Broker Css, LLC 11/21/06 From: Owner; Associated with a Market Maker/ Remote Market Maker To: Lessor Drysdale Holdings, LLC 11/21/06 From: Owner/ Lessee; Associated with a Market Maker/ Floor Broker/ Remote Market Maker To: Lessee; Associated with a Market Maker/ Floor Broker/ Remote Market Maker Kevin Kwiatt 11/22/06 From: Nominee For Consolidated Trading, LLC; Market Maker To: Nominee For Consolidated Trading, LLC; Market Maker/Floor Broker

4 Page 4 November 24, 2006 Volume 34, Number 47 Chicago Board Options Exchange RESEARCH CIRCULARS The following Research Circulars were distributed between November 17 and November 22, If you wish to read the entire document, please refer to the CBOE website at and click on the Trading Tools Tab. New listings and series information is also available in the Trading Tools section of the website. For questions regarding information discussed in a Research Circular, please call The Options Clearing Corporation at OPTIONS. Research Circular #RS November 17, 2006 Myogen, Inc. ( MYOG/QJV/YAM/VBN ): Merger Completed -- Cash Settlement Research Circular #RS November 20, 2006 msystems Ltd. ( FLSH/FFU/WSJ/VUM ) Merger COMPLETED with SanDisk Corporation ( SNDK/SWQ/SWF/YSD/YEB/OWS ) Research Circular #RS November 20, 2006 Connetics Corporation ( CNCT/UXU/YGN/VQB ) Proposed Merger with Stiefel Laboratories, Inc. Research Circular #RS November 20, 2006 JLG Industries, Inc. ( JLG/LPC/ZPC ) Proposed Merger with Oshkosh Truck Corporation Research Circular #RS November 20, 2006 NS Group, Inc. ( NSS ) Proposed Merger with IPSCO Inc. ( IPS/LPQ/OPQ ) Research Circular #RS November 21, 2006 Brinker International, Inc. ( EAT ) 3 for 2 Stock Split Ex-Distribution Date: December 1, 2006 Research Circular #RS November 21, 2006 Saks Incorporated ( SKS/LYJ/VOF ) CONTRACT ADJUSTMENT FOR SPECIAL CASH DIVIDEND Ex-Date: December 1, 2006 Research Circular #RS November 21, 2006 Nortel Networks Corporation ( NT/WNT ) 1-for-10 Reverse Stock Split Ex-Distribution Date: December 1, 2006 Research Circular #RS November 21, 2006 AmSouth Bancorporation ( ASO/adj. ACZ ) Determination of Cash-in-Lieu Amount Research Circular #RS November 22, 2006 Wireless HOLDRs Trust ( WMH & adj. WDT ) Distribution of Shares of Idearc Inc. ( IAR ) Ex-Distribution Date: November 27, 2006 Research Circular #RS November 22, 2006 Telecom HOLDRs Trust ( TTH & adj. TLN ) Distribution of Shares of Idearc Inc. ( IAR ) Ex-Distribution Date: November 27, 2006 POSITION LIMIT CIRCULARS Pursuant to Exchange Rule 4.11, the Exchange issued the below listed Position Limit Circulars on November 9 and 21, The complete circulars are available from the Department of Market Regulation, in the data information bins on the 2nd Floor of the Exchange, and on the CBOE website at cboe.com under the Market Data tab. To receive regular updates of the position limit list via fax, contact Candice Nickrand at (312) Questions concerning position and exercise limits may be directed to the Department of Market Regulation to Joanna Fields at (312) or Michael Felty at (312) POSITION LIMIT CIRCULAR PL06-53 November 9, 2006 Fisher Scientific International, Inc. ( FSH/LEW/ZCH ) merger completed with Trumpet Merger Corporation, a wholly owned subsidiary of Thermo Electron Corporation ( TMO ) Effective Date November 10, 2006 POSITION LIMIT CIRCULAR PL06-55 November 21, 2006 mystems Ltd. ( FLSH/FFU/WSJ/VUM ) merger completed with Project Desert Ltd., a wholly owned subsidiary of SanDisk Corporation ( SNDK/SWQ/SWF/YSD/YEB/OWS ) Effective Date November 20, 2006

5 November 29, 2006 Volume RB17, Number 47 The Constitution and Rules of the Chicago Board Options Exchange, Incorporated ( Exchange ), in certain specific instances, require the Exchange to provide notice to the membership. The weekly Regulatory Bulletin is delivered to all effective members to satisfy this requirement. Copyright 2006 Chicago Board Options Exchange, Incorporated. Regulatory Circular RG To: Members From: Legal Division Date: November 16, 2006 Re: REGULATORY CIRCULARS Rule Change Regarding Open Outcry Crossing Priority A rule change that amends CBOE Rule 6.74, Crossing Orders, has become effective (see Release ; SR-CBOE ). Rule 6.74 is an open outcry crossing rule that was adopted prior to the time that CBOE established the Hybrid Trading System, which, among other things, introduced dynamic quotes and the ability for non-public customer orders to be placed in the electronic book. The rule change updated Rule 6.74 to clarify the priority of these electronic trading interests. Specifically: Priority Generally: For purposes of establishing priority for bids and offers, the rule change clarifies that, at the same price: (i) bids and offers of in-crowd market participants ( ICMPs ) 1 have first priority to trade (except as otherwise provided in the Rule with respect to public customer orders resting in the electronic book); and (ii) all other bids and offers, including bids and offers of broker-dealer orders in the electronic book and electronic quotes of Market-Makers, have second priority to trade. Crossing Priority under Rule 6.74(d): Rule 6.74(d) describes the procedures for crossing eligible orders when a Floor Broker is seeking a crossing participation entitlement. The rule change clarifies how the remaining balance of an order will be allocated among the trading crowd after public customer orders in the book, the crossing participation entitlement and any DPM/LMM participation entitlement (if applicable) have been satisfied. The rule change provides that the remaining balance will be allocated among ICMPs who established the market. 2 Broker-dealer 1 The term ICMP only includes an in-crowd Market-Maker, in-crowd DPM or LMM, and Floor Broker or PAR Official representing orders in the trading crowd. 2 The rule change also clarifies that the balance is allocated among bids (offers) made by ICMPs in the sequence in which they are made. If bids (offers) were made at the same time, or in the event that the sequence cannot be determined, priority shall be apportioned equally among the ICMPs who established the market. In the event an ICMP declines to accept any portion of the available contracts, any remaining contracts shall be apportioned equally among the other ICMPs who established the market until all contracts have been apportioned. However, nothing prohibits a Floor Broker or DPM/LMM from trading more than November 29, 2006 Volume RB17, Number 47 1

6 orders resting in the book and electronic quotes are not entitled to participate if there is sufficient interest among the ICMPs in the trading crowd at the same price or better. However, to the extent there is any remaining balance for which there is not sufficient interest among the ICMPs, same-priced broker-dealer orders resting in the book and electronic quotes would have priority to trade next. 11(a) & G Exemption Requirements: Section 11(a)(1) of the Securities Exchange Act of 1934 (the Exchange Act ) restricts securities transactions of a member of any national securities exchange effected on that exchange for (i) the member s own account, (ii) the account of a person associated with the member, or (iii) an account over which the member or a person associated with the member exercises discretion unless a specific exemption is available, such as transactions by broker dealers acting in the capacity of a Market-Maker and other exemptions. The rule change makes clear that members must ensure that they qualify for an exemption from Section 11(a)(1). The rule change also addresses the manner in which members relying on Section 11(a)(1)(G) of the Exchange Act and Rule 11a1-1(T) thereunder (commonly referred to as the G exemption) must comply with the G exemption requirement to yield priority to any bid or offer at the same price for the account of a person who is not, or is not associated with, a member (a non-member ), irrespective of the size of any such bid or offer or the time when it is entered. Because CBOE s electronic book does not distinguish between member and non-member broker-dealer orders, the rule change clarifies that members relying on the G exemption must yield priority to any same-priced bid or offer of public customer orders and broker-dealer orders resting in the electronic book, as well as any other bids and offers that have priority over those broker-dealer orders under the Rule. 3 Members seeking further information regarding the open outcry crossing procedures should refer to the rule change, which is available on CBOE s website at For additional information on the applicable crossing participation entitlements and Section 11(a)(1) requirements, please refer to Regulatory Circulars RG06-83 and RG05-102, respectively. For any other questions, please contact Jennifer Lamie, Legal Division, at (312) their applicable participation percentage entitlement if other ICMPs do not choose to trade the remaining portion of the order. 3 Thus, for example, assume that a Floor Broker is relying on the G exemption and asserting a crossing participation entitlement for his proprietary order pursuant to Rule 6.74(d). The Floor Broker would have to yield priority to same priced public customer orders resting in the book, the DPM/LMM (to the extent a participation entitlement applies), ICMPs (to the extent each ICMP is not also relying on the G exemption), and brokerdealer orders resting in the book. After yielding, the Floor Broker would have priority to trade (along with any other ICMPs also relying in the G exemption) and can assert his crossing participation entitlement. The Floor Broker s entitlement to the remaining balance of the original order, when combined with the applicable DPM/LMM participation entitlement, shall not exceed 40% of the order. Again, however, provided the G exemption requirements are satisfied, nothing prohibits a Floor Broker or DPM/LMM from trading more than their applicable percentage entitlement if other ICMPs do not choose to trade the remaining portion of the order. To the extent there may be any further remaining balance, same-priced electronic quotes of Market-Makers would have priority to trade next. November 29, 2006 Volume RB17, Number 47 2

7 Regulatory Circular RG To: Members, Member Firms and Member Organizations From: The Index Options Procedure Committee (IOPC) Date: November 21, 2006 Re: RUT and OEF Hybrid Dials/Settings The following system settings will be in place for the Russell 2000, symbol RUT, which will be converted to a Hybrid class on Tuesday, November 21, 2006, and S&P100 I-shares, symbol OEF, which will be converted to Hybrid on Wednesday, November 22, For RUT: - Trade allocation will be on a Pro-Rata basis - Book trigger timer (N-second joining period) will be set to 1 second - Quote-to-Quote Lock timer will be set to 1 second - Seat cost will be.25 - RMMs will not be permitted upon Hybrid launch For OEF: - Trade allocation will be on a Pro-Rata basis - Book trigger timer will be set to 0 seconds - Quote-to-Quote Lock timer will be set to 0 seconds - Seat cost will be RMMs will be permitted as of Hybrid launch Customer Priority and the standard DPM participation right will be in place for both symbols. COB, COA, HAL, and AIM will be active. Preferred Market-Maker will be available in both symbols. If you have any questions, please contact any member of the IOPC, Anthony Montesano (montesan@cboe.com), or the Help Desk at Regulatory Circular RG Date: November 21, 2006 To: From: Re: Market-Maker Firms and DPM Firms Legal Division Relief from Commodity Pool Operator and Commodity Trading Advisor Registration Requirements for Security Futures Trading The Commodity Futures Trading Commission (CFTC) issued a No-Action Letter to CBOE in 2002 related to Commodity Pool Operator (CPO) and Commodity Trading Advisor (CTA) registration requirements under the Commodity Exchange Act (CEA) in the context of trading security futures products. (CFTC No-Action Letter (August 21, 2002)). CPOs and CTAs are generally required to register with the CFTC. 1 The No-Action Letter grants certain relief with respect to these two registration requirements. The relief granted only applies to trading in 1 See CEA Sections 1a(5) and 1a(6) (defining CPO and CTA) and CEA Sections 4m and 4n (describing CPO and CTA registration requirements). November 29, 2006 Volume RB17, Number 47 3

8 security futures products and does not apply to trading in other future products, including those that are currently traded on CBOE Futures Exchange, LLC. As further explained below, a CBOE Market-Maker firm or DPM firm that desires to take advantage of the relief granted by the No-Action Letter in 2005 must file a claim form with the CFTC between December 1, 2006 and January 15, Relief from CPO Registration Requirements The No-Action Letter grants relief from CPO registration requirements to operators of CBOE Market-Maker firms and DPM firms that trade security futures products on a proprietary basis provided that certain criteria are satisfied. CBOE Market-Maker firms and DPM firms are collectively referred to in this circular as Market-Maker Firms. The operator of a Market-Maker Firm is a person or entity with authority to bind the Firm. The operator of a Market-Maker Firm organized as a general partnership or a limited partnership would be a general partner. The operator of a Market-Maker Firm organized as a limited liability company would be a managing member or manager. The operator of a Market-Maker Firm organized as a corporation would be the chief executive officer or president of the corporation (or another officer with authority to bind the corporation). Pursuant to the No-Action Letter, the operator of a Market-Maker Firm that trades security futures products is not required to register as a CPO if the Firm meets the following criteria: 1. The Market-Maker Firm is registered with the Securities and Exchange Commission as a broker-dealer; 2. The Market-Maker Firm is a member in good standing of CBOE; 3. Anyone who participates in the profits/losses associated with the trading of security futures products by the Market-Marker Firm is not statutorily disqualified under Section 8a(2) or (3) of the CEA and is one of the following: (a) (b) (c) a "knowledgeable employee" (as defined in Investment Company Act Rule 3c-5(a)(4)) of the Market-Maker Firm or an immediate family member of a such a person (defined as a child, parent, sibling, or spouse, or family trust for the benefit of one or more immediate family members); a retired knowledgeable employee of the Market-Maker Firm or of another CBOE member firm, or an immediate family member of such a person; or one of up to ten natural persons who does not qualify under subparagraphs (a) or (b) above and who is either (i) an officer, director, employee, or principal of a registered broker-dealer or (ii) a "qualified eligible person" (as defined in CEA Rule 4.7(a)); 4. The Market-Maker Firm does not solicit public investors in the Firm; and 5. In no event does or will an interest in the Market-Maker Firm represent an indirect investment by another individual, except in the case that the beneficial owner of the interest is a natural person who meets the criteria of paragraph 3 above. November 29, 2006 Volume RB17, Number 47 4

9 These criteria are referred to in the No-Action Letter as the Market-Maker Criteria. Relief from CTA Registration Requirements The No-Action Letter also grants relief from CTA registration requirements to CBOE Market-Makers that trade security futures products on a proprietary basis on behalf of Market- Maker Firms provided that certain criteria are satisfied. Specifically, pursuant to the No-Action Letter, an individual CBOE Market-Maker trader that trades security futures products on behalf of a Market-Maker Firm is not required to register as a CTA if the trader meets the following criteria: 1. The trader is an associated person of a Market-Maker Firm that meets the Market- Maker Criteria and is operating pursuant to the terms of the No-Action Letter without CPO registration; 2. The trader will provide commodity interest trading advice solely to the Market- Maker Firm and to persons associated with the Firm whose trading, in whole or in part, is for the benefit of the Firm; 3. The trader does not hold himself or herself out generally to the public as a CTA; and 4. The trader is not statutorily disqualified under Section 8a(2) or (3) of the CEA. These criteria are referred to in the No-Action Letter as the Trader Criteria. Filing Requirement In order for a Market-Maker Firm's operator and Market-Maker traders to receive the benefit of the relief granted by the No-Action Letter, the Market-Marker Firm must file with the CFTC a "Claim of CPO and CTA Registration No-Action Position" prior to entering into a transaction involving a security futures product. In order to continue to receive the benefit of the No-Action Letter, the Market-Maker Firm must annually file an updated Claim with the CFTC by January 15th of each year. The updated Claim may be filed no earlier than December 1st of the year prior to the year for which the Claim is being filed. The No-Action Letter requires that the Claim provide the name, main business address and main business telephone number of the Market-Maker Firm and its operator; provide the name and CBOE acronym of each of the Firm's Market-Maker traders; and be signed and dated by a duly authorized representative of the Firm. If the Market-Maker Firm has more than one operator, only one operator needs to be identified in the Claim. The No-Action Letter also requires that the Market-Maker Firm represent in the Claim that: 1. The Market-Maker Firm meets the Market-Maker Criteria and the Market-Maker Firm's traders meet the Trader Criteria (collectively referred to in the No-Action Letter as the Criteria); 2. The Market-Maker Firm will permit the CFTC or its delegee to inspect the Market- Maker Firm's books and records to confirm that the Criteria are being met without the need for a formal CFTC-issued order of investigation or other judicial process; and November 29, 2006 Volume RB17, Number 47 5

10 3. The Market-Maker Firm will advise the CFTC in writing within thirty days when it or any previously identified trader is statutorily disqualified under Section 8a(2) or (3) of the CEA. A Claim form that may be completed by Market-Maker Firms and submitted to the CFTC in order to receive the benefit of the No-Action Letter is attached to this circular. Generally Applicable Provisions Each CBOE member with trading rights on CBOE is a member of OneChicago, LLC, and to the extent provided in OneChicago rules, becomes bound by OneChicago rules and subject to the jurisdiction of OneChicago by accessing or entering any order into the OneChicago System. Accordingly, CBOE members that trade security futures products on OneChicago will be subject to OneChicago rules and to applicable CFTC and SEC regulations relating to the trading of security futures products even if relieved from CPO or CTA registration requirements. For example, even if relieved of CPO or CTA registration requirements, CBOE Market-Maker Firms and their Market-Maker traders will remain subject to the antifraud provisions of the CEA and CFTC regulations and to CFTC large trader reporting requirements. Sole Proprietor Market-Makers and Single Shareholder/LLC Member Market-Maker Firms Individual sole proprietor Market-Makers and Market-Maker Firms with a single shareholder or LLC member that do not solicit, accept, or receive funds, securities, or property from others for the purpose of trading futures products (including security futures products) and do not trade futures products through a joint account arrangement are not commodity pools. Accordingly, neither they nor their operators are required to register with the CFTC as CPOs, and they have no need to seek to receive the benefit of the No-Action Letter. Contact Information and Resources This circular is not intended to provide a complete description of the provisions of the No- Action Letter and related CEA provisions and CFTC regulations. Market-Maker Firms are advised to consult the No-Action Letter and these related provisions and regulations for additional detail. Market-Maker Firms may also wish to consult with their own legal counsel to discuss how the No-Action Letter and the related provisions and regulations may apply to their particular circumstances. Copies of the No-Action Letter and the specific legal provisions cited in this circular are available from the Legal Division. Any questions regarding this circular may be directed to Arthur Reinstein of the Legal Division at (312) (Regulatory Circular RG Revised) November 29, 2006 Volume RB17, Number 47 6

11 Claim of CPO and CTA Registration No-Action Position Form Date: Commodity Futures Trading Commission Central Region Division of Clearing and Intermediary Oversight 525 Monroe Street Suite 1100 Chicago, Illinois Attn: Branch Chief Dear Sir or Madam: Re: Claim Pursuant to No-Action Letter dated August 21, 2002 under Section 4m of the Commodity Exchange Act ("CEA") As a duly authorized representative, I write on behalf of the operator 1 and Traders (as defined below) of ("Market-Maker Firm") to claim relief pursuant to the No-Action Letter dated August 21, 2002 from the requirements to register as a commodity pool operator and/or commodity trading advisor. Market-Maker Firm acts as a Market-Maker firm or a designated primary Market-Maker firm on the Chicago Board Options Exchange ("CBOE"). Please be advised of the following information: Main business address of Market-Maker Firm: Main business telephone number: Operator of Market-Maker Firm: Attached to this letter as Annex A are the names and unique CBOE acronyms of each of the Market-Maker Firm's traders who act as Market-Makers ("Traders") who desire to claim the relief available under the No-Action Letter. Market-Maker Firm hereby represents that: (1) it meets the Market-Maker Criteria (as defined in the No-Action Letter) and the Traders meet the Trader Criteria (as defined in the No- Action Letter) (together, the "Criteria"); (2) it will permit the Commodity Futures Trading Commission or its delegee to inspect the Market-Maker Firm's books and records to confirm that the Criteria are being met without the need for a formal Commission-issued order of investigation or other judicial process; and (3) it will advise the Commission in writing within thirty days when it or any previously identified Trader is statutorily disqualified under Section 8a(2) or (3) of the CEA. Market-Maker Firm understands that the No-Action Letter provides that in order to take advantage of the relief described in the No-Action Letter, it is required to re-file this claim annually between December 1 and January The operator of a Market-Maker Firm is a person or entity with authority to bind the firm. The operator of a Market-Maker Firm organized as a general partnership or limited partnership is a general partner. The operator of a Market-Maker Firm organized as a limited liability company is a managing member or a manager of the limited liability company. The operator of a Market-Maker Firm organized as a corporation is the Chief Executive Officer or President of the corporation (or another officer with authority to bind the corporation). November 29, 2006 Volume RB17, Number 47 7

12 Please contact at should you have any questions about this notice. Sincerely, Name: Title: November 29, 2006 Volume RB17, Number 47 8

13 Annex A Name of Market-Maker Firm: Date of Claim: Names and CBOE Acronyms of Firm Market-Maker Traders: Name CBOE Acronym November 29, 2006 Volume RB17, Number 47 9

14 RULE CHANGES APPROVED RULE CHANGE(S) The Securities and Exchange Commission ("SEC") has approved the following change(s) to Exchange Rules pursuant to Section 19(b) of the Securities Exchange Act of 1934, as amended ("the Act"). Copies are available on the CBOE public website at: The effective date of the rule change is the date of approval unless otherwise noted. SR-CBOE Quarterly Index Options On November 16, 2006, the SEC approved Rule Change File No. SR-CBOE , which filing establishes strike price parameters for quarterly index options. Any questions regarding the rule change may be directed to Angelo Evangelou, Legal Division, at Additions are underlined. Deletions are [bracketed and stricken]. Rule Terms of Index Option Contracts (a) General. (1) No change. (2) Expiration Months. Index option contracts may expire at three-month intervals or in consecutive months. The Exchange may list up to six expiration months at any one time, but will not list index options that expire more than twelve months out. Notwithstanding the preceding restriction, until the expiration in November 2004, the Exchange may list up to seven expiration months at any one time for the SPX, MNX and DJX index option contracts, provided one of those expiration months is November Short Term Option Series Pilot Program. Notwithstanding the preceding restriction, after an index option class has been approved for listing and trading on the Exchange, the Exchange may open for trading on any Friday that is a business day ( Short Term Option Opening Date ) series of options on that class that expire on the next Friday that is a business day ( Short Term Option Expiration Date ). If the Exchange is not open for business on a Friday, the Short Term Option Opening Date will be the first business day immediately prior to that Friday. Similarly, if the Exchange is not open for business on a Friday, the Short Term Option Expiration Date will be the first business day immediately prior to that Friday. The Exchange may continue to list Short Term Option Series until the Short Term Option Series Pilot Program expires on July 12, Regarding Short Term Option Series, the Exchange may select up to five currently listed option classes on which Short Term Option Series may be opened on any Short Term Option Opening Date. In addition to the five-option class restriction, the Exchange also may list Short Term Option Series on any option classes that are selected by other securities exchanges that employ a similar Pilot Program under their respective rules. For each index option class eligible for participation in the Short Term Option Series Pilot Program, the Exchange may open up to seven Short Term Option Series on index options for each expiration date in that class. The strike November 29, 2006 Volume RB17, Number 47 10

15 price of each Short Term Option Series will be fixed at a price per share, with approximately the same number of strike prices being opened above and below the calculated value of the underlying index at about the time that the Short Term Option Series are initially opened for trading on the Exchange (e.g., if seven series are initially opened, there will be at least three strike prices above and three strike prices below the value of the underlying security or calculated index value). If the Exchange has opened less than seven Short Term Option Series for a Short Term Option Expiration Date, additional series may be opened for trading on the Exchange when the Exchange deems it necessary to maintain an orderly market, to meet customer demand or when the current value of the underlying index moves substantially from the exercise price or prices of the series already opened. No Short Term Option Series on an index option class may expire in the same week during which any monthly option series on the same index class expire or, in the case of QIXs, in the same week during which the QIXs expire. Quarterly Options Series Pilot Program. Notwithstanding the preceding restriction, for a one-year pilot period, the Exchange may list and trade options series that expire at the close of business on the last business day of a calendar quarter ( Quarterly Options Series ). The Exchange may list Quarterly Options Series for up to five (5) currently listed options classes that are either index options or options on ETFs. In addition, the Exchange may also list Quarterly Options Series on any options classes that are selected by other securities exchanges that employ a similar pilot program under their respective rules. The one-year pilot will commence either the day the Exchange first initiates trading in a Quarterly Options Series or July 24, 2006, whichever is earlier. The Exchange may list series that expire at the end of the next consecutive four (4) calendar quarters, as well as the fourth quarter of the next calendar year. For example, if the Exchange is trading Quarterly Options Series in the month of May 2006, it may list series that expire at the end of the second, third, and fourth quarters of 2006, as well as the first and fourth quarters of Following the second quarter 2006 expiration, the Exchange could add series that expire at the end of the second quarter of Quarterly Options Series shall be P.M. settled. The strike price of each Quarterly Options Series will be fixed at a price per share, with at least two, [strike prices above] but no more than five, strike prices above and at least two, but no more than five, strike prices below the value of the underlying [security] index at about the time that a Quarterly Options Series is opened for trading on the Exchange. [The Exchange shall list strike prices for a Quarterly Options Series that are within $5 from the closing price of the underlying on the preceding day. The Exchange may open for trading additional Quarterly Options Series of the same class if the current index value of the underling index moves substantially from the exercise price of those Quarterly Options Series that already have been opened for trading on the Exchange. The exercise price of each] The Exchange shall list strike prices for Quarterly Options Series [open for trading on the Exchange shall be] that are reasonably related to the current index value of the underlying index to which such series relates at [or] about the time such series of options is first opened for trading November 29, 2006 Volume RB17, Number 47 11

16 on the Exchange. The term reasonably related to the current index value of the underlying index means that the exercise price is within thirty percent (30%) [away from] of the current index value. The Exchange may open for trading additional Quarterly Options Series of the same class when the Exchange deems it necessary to maintain an orderly market, to meet customer demand or when the market price of the underlying security moves substantially from the initial exercise price or prices. The Exchange may also open for trading additional Quarterly Options Series that are more than thirty percent (30%) away from the current index value, provided that demonstrated customer interest exists for such series, as expressed by institutional, corporate, or individual customers or their brokers. Market-Makers trading for their own account shall not be considered when determining customer interest under this provision. The Exchange may open additional strike prices of a Quarterly Options Series that are above the value of the underlying index provided that the total number of strike prices above the value of the underlying index is no greater than five. The Exchange may open additional strike prices of a Quarterly Options Series that are below the value of the underlying index provided that the total number of strike prices below the value of the underlying index is no greater than five. The opening of any new Quarterly Options Series shall not affect the series of options of the same class previously opened. (3) (5) No change. (b) (c) No change. Interpretations and Policies: No change. EFFECTIVE-ON-FILING RULE CHANGE(S) The following rule filing(s) were submitted to the SEC effective on filing, and may have taken effect pursuant to Section 19(b)(3) of the Securities Exchange Act. They will remain in effect barring further action by the SEC within 60 days after their publication in the Federal Register. Copies are available on the CBOE public website at SR-CBOE Hybrid Electronic Quoting Fee On November 20, 2006, the Exchange filed Rule Change File No. SR-CBOE , which filing proposes to establish a Hybrid Electronic Quoting Fee to promote and encourage more efficient quoting. This rule change also relates to the implementation of a Penny Pilot Program in thirteen option classes on January 26, Any questions regarding the rule change may be directed to Patrick Sexton, Legal Division, at Additions are underlined. The deletion is [bracketed and stricken]. SR-CBOE Appointment Costs On November 20, 2006, the Exchange filed Rule Change File No. SR-CBOE , which filing proposes to amend CBOE rules relating to the appointment costs of RUT options and OEF options in connection with CBOE s determination to trade these two option classes on the Hybrid Trading System. Any questions regarding the rule change may be directed to Patrick Sexton, November 29, 2006 Volume RB17, Number 47 12

17 Legal Division, at The addition is underlined. Deletions are [bracketed and stricken]. Rule 8.3 Appointment of Market-Makers Rule 8.3. This Rule governs the appointment of Market-Makers other than Remote Market-Makers. Rule 8.4 governs the appointment of Remote Market-Makers. (a) No change. (b) No change. (c) Market-Maker Appointments. Absent an exemption by the Exchange, an appointment of a Market-Maker confers the right to quote electronically or in open outcry in its appointed classes as described below. A Market-Maker may only change its appointed classes with the prior approval of the Exchange. Such requests must be made in a form and manner prescribed by the Exchange. In determining whether to approve such requests, the Exchange shall consider the factors contained in paragraph (a). (i) No change. (ii) Hybrid Classes. Subject to paragraph (v) below, a Market-Maker can quote electronically in an appropriate number of Hybrid Classes that are located at one trading station. The appointment cost of each Hybrid Class is.01, except for Options on the Russell 2000 Index (RUT) which has an appointment cost of.25. (iii) No change. (iv) Non-Hybrid and Non-Hybrid 2.0 Classes (collectively Non-Hybrid Classes ). In addition to paragraphs (i) through (iii) above, and subject to paragraph (v) below, a Market-Maker can select as his appointment one or more Non-Hybrid Classes traded on the Exchange, which confers the right to trade in open outcry in an appropriate number of Non-Hybrid Classes as described below. Each Non-Hybrid Class will be assigned an "appointment cost", which are set forth below. Non-Hybrid Classes Appointment Cost Options on the Standard & Poor's 500 (SPX) 1.0 Options on the S&P 100 (OEX)* Options on the S&P 100 (XEO)* 1.0 NASDAQ 100 Index Options (NDX) 1.0 Options on the ishares Russell 2000 Index Fund (IWM).85 [Options on the Russell 2000 Index (RUT).45] Morgan Stanley Retail Index Options (MVR).25 [Options on the ishares S&P 100 (OEF).01] * The OEX and XEO option classes collectively have an appointment cost of 1.0. (v) - (viii) No change. (d) No change.... Interpretations and Policies:.01 No change. November 29, 2006 Volume RB17, Number 47 13

18 SR-CBOE QIX Options On October 20, 2006, the Exchange filed Rule Change File No. SR-CBOE , which filing proposes to make a technical change to the definition of QIX options. Any questions regarding the rule change may be directed to Angelo Evangelou, Legal Division, at The addition is underlined. The deletion is [bracketed and stricken]. Rule Definitions (a) (r) No change. Quarterly Index Expiration or QIX (s) The term Quarterly Index Expiration or QIX means an index option contract that expires [on the first business day of the month following the end] on the last business day of a calendar quarter. (t) (z) No change. Interpretations and Policies:.01 No change. Appeals Committee Decisions Chapter XIX of the Exchange's Rules provides persons who have been economically aggrieved by certain Exchange actions the opportunity to have the action reviewed by a panel of the Appeals Committee. Any questions regarding the appeals process may be directed to the Office of the Secretary at Pursuant to a policy adopted by the Board of Directors, each Appeals Committee decision relating to an appeal filed after June 15, 1998 (and any Board of Directors decision relating to the appeal) is summarized in the Regulatory Bulletin and made available by the Legal Division upon written request. No Appeals Committee decision will be publicized or otherwise made available until the Exchange's review of the appeal becomes final. Appeal File No. 06A002 - In the Matter of the Relocation of the DJX Crowd This appeal was brought by members of the trading crowd located at Post 7, Station 7 at which the DJX, DIA, and DXL option classes were traded. The appeal concerned a decision by the Allocation Committee to relocate the DJX, DIA, and DXL option classes from Post 7, Station 7 to Post 4, Station 9. A hearing on the appeal was held before an Appeals Committee Panel, and the Panel issued a written decision regarding the appeal following the hearing. Based upon the information and testimony presented at the hearing, the Panel found that the Appellants did not meet their burden of showing by a preponderance of the evidence that the decision of the Allocation Committee was erroneous or otherwise inappropriate under CBOE rules. Among other things, the Panel found that the Allocation Committee had the authority under CBOE rules to make the decision that it made, complied with the procedural requirements to take such action, and adhered to the requirements with respect to the required basis for a relocation decision. Accordingly, the Panel affirmed the decision of the Allocation Committee. November 29, 2006 Volume RB17, Number 47 14