From: Robert J. Griffin
Securities and Exchange Commission
Attn.: Nancy M. Morris, Secretary
As a long-time member of the Chicago Board of Trade, I wish to add my name to those who oppose the proposed CBOE rule change (File No.: SR-CBOE-2006-106). I will not repeat the many eloquent arguments that the CBOT-CME merger does not extinguish the Exercise Right Privilege which will have preceded this letter. Rather, I would just like to mention the pointlessness of filing a rule change in the first place.
First of all, the Exercise Right Privilege is a contractual matter between two business entities and has no place in the administrative law function of securities market regulation. Suppose that the Chicago Board of Trade (which, in the past, has borrowed money to erect new trading space) decided to void that debt by passing a rule change and submitting said rule change to the Commodity Futures Trading Commission for approval. That attempt to change a contractual relationship between two private parties by submitting a “rule change” to a market regulator would make as much sense as what the CBOE is doing now.
Secondly, if the CBOE truly believed that the Exercise Right Privilege will be extinguished, it would not need to pass a “rule change” at all. The contract would speak for itself. Instead, the CBOE is looking for some form of outside approval of its position in an improper and inappropriate regulatory forum.
The resolution of the dispute between the CBOE and the CBOT does not belong to the SEC, but to a court of law.
Robert J. Griffin