The Cost of Clearing Futures & Options Expo 2002 Thursday, November 7th

The Cost of Clearing Moderator Mark D. Connelly, Senior Manager, American Express Tax and Business Services Inc. Panelist Satish Nandapurkar Managing Director, Products and Services, Chicago Mercantile Exchange Jill Harley Vice President and Treasurer, Chicago Board of Trade Tom Croke Vice President of Operations, Lehman Brothers Rick Walsh Senior Vice President, Product Design, Rolfe & Nolan (USA) Inc. Bill Metzger Clearing Manager - Vice President, J. P. Morgan Futures Inc.

The Cost of Clearing Manage and contain the cost of clearing (clearing and exchange fees) between Exchanges/FCMs/Service Providers in order to create a “win-win”environment for all

The Cost of Clearing We would like all participants to leave today with at least one/two meaningful ideas that you could use in your quest to manage and contain the cost of clearing (exchange and clearing fees)

The Cost of Clearing Basis for Discussion: Exchanges/FCMs/Service Providers What two/three areas regarding fees do you feel you do well? What two/three areas regarding fees do you feel you need to do better?

The Cost of Clearing Historical Retrospect CBOT and CME Fee Highlights Current CBOT and CME Fee Schedules Five-Year ( ) and 2002 nine-month CBOT and CME Volume and Revenue Statistics

The Cost of Clearing CBOT and CME Fee Highlights CBOT (1992) Member $.02/sideCustomer $.50/side Delegate Tiering (1992) Trade on a leased seat, you paid between $.02 - $.30/side based on how long you were a lessee. Project A and Ceres Fees (1994) Introduction of electronic trading (Dual platforms). Same exchange fee (based on membership type) but Ceres fee based on product type and CTI coding. Open Outcry and ace Trading (September 2000) Open Outcry: $.05/side for owner, $.20/side delegate (no tiering), $.50/side customer and $.75/side customer licensed product. ace: $.25/side for owner, $.45/side for financial delegate, $.75/side for delegate, $.80/side for financial customer and $1.25/side for customer.

The Cost of Clearing CBOT and CME Fee Highlights CME ( July 1997) TypeFutureOption Equity$.07/side$.07/side 106D/F$.30/side$.10/side 106H/J/N$.50/side$.14/side CBOE$.60/side$.25/side Customer$.70/side$.35/side GLOBEX (1996) Introduction of electronic trading (dual platforms); System Fee (everyone paid) and Customer Fee. Fee Changes (August 1997 to September 2000) Various changes/reductions/increases during this timeframe. EFS System (July 2000) Online transactional viewing and adjustment facility to monitor fees. Product Type (October 2000) Fees based on product type.

The Cost of Clearing Current CBOT and CME Fee Schedules CBOT Open Auction Individual Member $.05/side Proprietary account $.06/$.05/$.04 side Delegate$.20/side Customer $.50/$.40/$.30 side (financials); $.60/$.50/$.40 side (agricultural) ace Individual Member$.15/$.13/$.10 side Proprietary account$.35/$.30/$.25 side Delegate$.30/$.28/$.25 side Customer$1.25/$.95/$.75 side (financials); $1.50 (agricultural) e-cbot$.50/$.45/$.40 side

The Cost of Clearing Current CBOT and CME Fee Schedules CME Open Outcry Equity and 106 I $.05 - $.15/side 106 D/F $.25 - $.38 side 106 H/J/N$ $.58/side NYMEX$.24 - $.585/side CBOE$.32 - $.78/side Customer$.32 - $.78/side GLOBEX System Fees$.25 - $.50/side Customer Fees (NYMEX) $ $.50/side Customer (including CBOE)$.25 - $1.00/side

The Cost of Clearing CBOT Revenue and Volume Analysis ( ) Volume (Contracts) Revenue Open Auction Electronic $ ,769,000 5,929,000 76,793, ,850,00012,339,000112,115, ,401,00011,160,000102,545, ,016,00015,512,000101,981, ,774,00052,559,000129,030, ,527,00089,477,000151,802,000 (est)

The Cost of Clearing CME Revenue and Volume Analysis ( ) Volume (Contracts) Revenue Open Auction Electronic $ ,346,000 4,396,000116,917, ,897,000 9,722,000126,524, ,678,000 16,059,000140,305, ,674,000 34,436,000156,649, ,782,000 81,931,000292,459, ,105, ,685,000261,400,000

The Cost of Clearing CBOT and CME Projected Revenue 2002 CME340,000,000 (Est) CBOT 200,000,000 (Est)

The Cost of Clearing CBOT and CME Projected Combined Revenue ,000,000

The Cost of Clearing Question and Answer Session