From: Gregory J. Ellis
Sent: February 20, 2007
Subject: File No. SR-CBOE-2006-106

It is with great distress that I am composing this letter to voice my feelings regarding the CBOE actions to eliminate the exercise rights of the CBOT full members. As a full member since 1998 and an associate member since 1981 I thought these two exchanges were up front with one another when it came to negotiations.

Yes, there have been differences of opinion. Yes, there have been differences regarding what has been important between the two exchanges. However, with the CBOT and the CBOE coming to terms with the culmination of exercise right, trading right and shares to allow for exercise on the CBOE by CBOT members, I thought there was a meeting of the minds. We were finally on the same page.

Now, however, with the CBOE interpretation that a pending merger of the CBOT with the CME extinguishes the exercise rights, the CBOE has created unilaterally an unfair situation for those CBOT members who possess all three components and who wish to exercise their rights at the CBOE.

The CBOE wishes to enrich their members at the expense of those CBOT members who have held on to these components and who anticipated such a demutualization/share offering by the CBOE. In no way, shape or form should a merger between the CBOT and the CME affect the components allowing for such exercise at the CBOE. I am not a lawyer but it seems to me that if a CBOT member has acted in good faith with the terms that the CBOE has helped draw up, then that CBOT member should not be penalized for in essence doing what is required of him.

I could go on but I think this is the crux of the matter. Thank you for your time and attention. I do not envy your situation of having to rule in what has turned out to be a very volatile situation.


Gregory J. Ellis
CBOT Full Member