February 23, 2007
Nancy M. Morris
Secretary, Securities and Exchange Commision
100 F Street, NE
Washington DC 20549-1090
"File No. SR-CBOE-2006-106"
Ladies and Gentlemen,
My name is David P. Baby. I have been a member of The Chicago Board of Trade since March of 1973. I am writing to you regarding The Chicago Board of Options Exchange's rule change proposal (SR-CBOE-2006-106), which would extinguish my right of almost 34 years. The exercise right was granted to CBOT members in the CBOE's Certificate of Incorporation article Fifth (b), and has remained intact up to the present time. By allowing this rule change, it would in effect take away the trading and access rights to the CBOE and the right to share in any distribution from the CBOE's planned demutualization.
The original contract has been confirmed numerous times since the CBOE's inception. On September 1 1992, the "1992 agreement" was established amplifying the exercise right. On August 7, 2001 as ammended October 7, 2004 and February 14, 2005 the "2001 agreement", and on December 17, 2003 the "2003 agreement" all confirming the exercise right. This agreement remained intact when the CBOT demutualized in October of 2005 and became "CBOT Holdings". Additionally the CBOE has acknowledged these rights by attempting to purchase approximately 75 exercise rights for the past 2 years. Their most recent purchase was 3 weeks ago after their filing with the SEC over their proposed rule change.
I believe strongly in our legal system and due process. I feel the existing dispute is a matter of state corporate and contract law and all decisions should come from the pending Delaware litigation. I respectfully request that the SEC decline approval of the proposed rule change "SR-CBOE-2006-106". Thank you for your time and consideration in this matter.
David P. Baby
CBOT Full Member