February 13, 2007
I would like to take the opportunity to comment upon the proposed rule change, File No. SR-CBOE-2006-106, which has been submitted before you for consideration. I have been a member of the Chicago Board of Trade (CBOT) since 1977, and therefore have a particular interest in this matter. I could state for the record numerous points supporting the fact that the CBOE and the CBOT having agreed many times in the past years that the CBOT played a critical role in the creation, support, and ultimate success of the CBOE. And that members of the CBOT, within certain guidelines, have the right to "exercise" that CBOT membership into a CBOE trading membership. But that is not my point at this time.
My point is that I see no reason for the CBOE to submit anything to the SEC concerning this matter. From a logical perspective I think it seems quite clear. The dispute between the CBOE and the CBOT stems from the contract between the two exchanges that lays out the terms by which a CBOT member may "exercise" his right to participate at the CBOE. This contract is in writing, and signed by both parties. The interpretation of this contract is being disputed. And with the intent to resolve this dispute, the CBOT has filed a lawsuit in Delaware. The CBOT took this action in the belief that a contract dispute should be handled by the contractual courts which hold jurisdiction in these matters. If this is not the proper action to resolve this dispute, then would you please explain what action should be taken. And if it is the proper procedure, then shouldn't the Delaware courts be permitted to do their job?
I see no reason for the CBOE to submit any proposed rule changes to the SEC regarding this matter. They can state their case in the United States the court system, as would any other parties in a contract dispute. I am willing to accept the decision of this court. Why won't the CBOE?