CBOT Holdings, Inc., holding company for the Chicago Board of Trade (CBOT®) (NYSE: BOT), one of the leading global derivatives exchanges, today announced that it will reduce the number of CBOT Holdings, Inc. Class A shares that clearing and equity members must hold as part of their share holding requirements.
Effective August 1, 2007, the share requirement for Futures Commission Merchant (FCM) Clearing members will be 27,000 shares and Non-FCM Clearing Members will be 13,500 shares. For existing CBOT clearing firms, the number of Class A shares that must be held by the clearing member will be decreased incrementally over a three-month period beginning June 1, 2007. On the first day of each month, the share requirement will decrease by approximately 9,225 Class A shares for Clearing FCMs and 4,613 Class A shares for Clearing Non-FCMs. Currently, Clearing FCMs are required to hold 54,676 shares and Clearing Non-FCMs are required to hold 27,338 shares, and will be reduced to 27,000 shares and 13,500 shares respectively.
The share requirements for Equity Member firms are similarly being reduced. The new share requirements for Equity Members are being reduced by approximately 50 percent, and will also be phased in over a three-month period beginning June 1, 2007.
CBOT President and CEO Bernard W. Dan said, “By reducing the Class A share requirements, we are recognizing the increase in the value of the assets used to satisfy the capital investment requirements, while lowering costs and releasing incremental equity capital for our existing clearing and equity members. Ultimately, this move will release additional equity capital to each of our clearing and equity member firms. In addition, this change allows us to attract new market participants to the Chicago Board of Trade who want to access and participate in clearing CBOT’s diverse range of products. The CBOT continues to look for ways to enhance trading efficiencies for our market participants.”
As a result of the change in Class A share requirements, the number of shares that are currently required to be held for clearing purposes or by Equity Members to qualify for reduced transaction fees will be lowered by approximately 1.4 million shares each month over the three-month period.
CBOT also noted that these changes were not a recommendation that members sell their shares. In addition, Full Members must continue to own interests equal to 27,338 shares (in addition to a B-1 membership and an ERP) to be an Exerciser Member at the Chicago Board Options Exchange.
For more information on the reduction in the Class A share requirements for Equity Members to qualify for reduced transaction fees, please visit the fee schedule located at www.cbot.com/cbot/pub/page/0,3181,1042,00.html.
About the CBOT
As one of the leading global derivative exchanges, the Chicago Board of Trade provides a diverse mix of financial, equity and commodity futures and options-on-futures products. Building on its 158-year history, the CBOT continues to advance into the future using the strength of deep liquidity, market integrity and member-trader expertise. Using superior trading technology in both electronic and open-auction trading platforms, the CBOT provides premier customer service to risk managers and investors worldwide. For more information, visit our website at www.cbot.com.
