CBOT Chairman Carey Letter To Members Discusses the Temporary Fee Reductions

February 4, 2004

Dear Fellow Members,

In a move designed to maintain CBOT®?s position of leadership, the exchange recently announced a temporary reduction in exchange transaction fees for all market users electronically trading U.S. Treasury futures and options on futures contracts. These fees will be in place for six months, after which time they will be reviewed by the Board of Directors.

The short-term reductions equalize transaction fees between open outcry and electronically executed trades for some of our markets most active users. Features of the reduced transaction fees include:

Exchange transaction fees for members trading for a member-owned account on an individual or firm-owned seat will be waived. (Previously, those users paid $0.10 per side for the first 25,000 contracts traded and $0.05 thereafter.)
Non-members trading for an individual member?s or member-firm?s proprietary account will pay a flat exchange transaction fee of $0.06 per side, an average reduction of approximately 75 percent. (Previously, those users paid $0.30 for the first 100,000 contracts traded and $0.20 cents thereafter.)
Non-members will pay flat exchange transaction fees of $0.30 for futures transactions and $0.50 for options, an average reduction of approximately 65 percent. (Previously, those users paid $0.90 for the first 100,000 contracts traded and $0.75 thereafter.)

As I have discussed with you in the past, we face an era of heightened competition within our dynamic industry. The bottom line is, the CBOT is well prepared on every level to compete and win ? on price, product platform and access to a transparent, open marketplace. I am confident in the exchange?s ability to overcome the challenges it encounters, in part because we are taking an action-oriented approach to meeting the needs of customers.

If you have any questions on the temporary fee reductions, please do not hesitate to call me. Sincerely,

Charles P. Carey
Chairman