To All Members:
We are very pleased to report that we expect to receive a favorable tax ruling from the Internal Revenue Service (IRS) very shortly. The ruling, which is in the final stages of preparation, will confirm that the conversion of memberships into shares of a for-profit corporation will qualify for tax-free treatment.
The ruling – the final condition of the CME’ s demutualization plan – will pave the way for the CME to become the first U.S. exchange to create equity interests that may be traded separately from exchange trading privileges. Upon consummation of the demutualization transaction, shareholders in Chicago Mercantile Exchange Inc. will own, in addition to their Class B shares, Class A shares representing pure equity in the corporation. These Class A shares, which will be publicly registered, will be transferable beginning as early as six months following the effective date of demutualization.
As we near the final stages of our transformation into a for-profit corporation, we continue to move forward aggressively in executing our business plan and fulfilling our corporate mission. Of course, we will inform you as soon as the IRS issues its final ruling, at which point all that will remain is the signing and filing of various legal and corporate documents to transform the CME into the Chicago Mercantile Exchange Inc.
