Attn: Ms. Nancy M. Morris, Secretary


As a CBOT Exerciser, I have been and continue to be a CBOE member since January of 1995. As such, CBOE requires me to pay all the same membership dues and the same technology fees as any other CBOE member. For all that, I have the same duties and rights, including a full vote and the ability to serve on committees, as the other CBOE members.

With that as background, it seems obvious to one and to all that the CBOE's proposed Rule change regarding Article Fifth (b) is nothing more than a blatant and disingenuous attempt to confiscate my property without compensation.

For example, as part of its proposed restructure prior to a public offering, the CBOE intends to ask its members to gave up their individual lease income from their memberships in exchange for stock in the overall entity, letting the CBOE as an entity lease the seats and have the income at the corporate level. You can bet that the CBOE intends to lease more than the 930 trading rights owned by CBOE seatholders and instead will lease and gain income from the 300-400 trading rights now leased by CBOT members for use at the CBOE, as well as those on their own seats, like me. This demonstrates their desire and intent to get something for nothing.

By Charter, exercised CBOT full members have the right to share equally with all CBOE members in any distribution stemming from CBOE's planned demutualization. CBOE is now attempting to ask the SEC to rule worthless my right. This despite spending over $7 million to purchase Exercise Rights, including one two weeks ago - after filing for this proposal. It is hard to argue something is worthless and yet continue to purchase these 'worthless' items.

As other letters have stated in summarizing past agreements, the issues involved today (what happens in a merger, the right of a CBOT Exerciser to a full share of any distribution, etc) have been clearly dealt with again and again. The CBOE is making false arguments in a blatant attempt to justify their attempt to:
(a) confiscate my equity and trading rights without just compensation; and
(b) to enrich certain other members at the expense of us CBOT Exercisers.

Accordingly, I respectfully ask that you deny this rule request.

Paul Richards
CBOE Exerciser and equity owner since 1995 CBOT Full Member since 1990