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Filed by Board of Trade of the City of Chicago, Inc. (CBOT)
Subject Company -- Board of Trade of the City of Chicago, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
File No. 132-01854
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The following letter was distributed to CBOT members and membership interest
holders on November 28, 2000.
November 28, 2000
Dear Members:
Last week, the CFTC approved its much-awaited regulatory reform program. The
program will take effect in approximately sixty days and will enable U.S.
exchanges long-sought flexibility in designing their markets and meeting
regulatory standards. In effect, it advances our ability to compete with OTC and
foreign derivatives markets and significantly alters the relationship between
organized exchanges like the CBOT and the CFTC.
The Commission program establishes three new market categories. Under the
category of an Exempt Multilateral Transaction Execution Facility (Exempt
MTEFs), an exchange could offer a derivatives market with roughly the same
regulatory freedom as a swaps dealer. This feature provides maximum regulatory
flexibility. In addition, exchanges would be able to operate markets regulated
as Derivatives Transaction Facilities (DTFs) or Recognized Futures Exchanges
(RFEs), under which detailed CFTC regulations would be replaced with broad "core
principles." Importantly, exchanges would decide and design how to meet those
core principles, as opposed to the current model of rigid and specific
regulatory mandates.
Starting with our Promarket proposal in 1993, the CBOT has been a leader in the
effort to achieve such flexibility and fairness for organized U.S. markets. We
will continue to press for the associated legislative changes which Congress is
currently considering and to revise certain problematic aspects of this CFTC
program. However, the adoption of this program coupled with our plan to become a
for-profit institution in the near future substantially improves our prospects
for structuring our business to meet the enormous challenges ahead.
Sincerely,
/s/David P. Brennan
David P. Brennan
DPB/vp
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The CBOT urges its members and membership interest holders to read the
Registration Statement on Form S-4, including the proxy statement/prospectus
contained within the Registration Statement, regarding the CBOT restructuring
referred to herein or in connection herewith, when it becomes available, as well
as the other documents that the CBOT has filed or will file with the Securities
and Exchange Commission, because they contain or will contain important
information. CBOT members and membership interest holders may obtain a free
copy of the proxy statement/prospectus, when it becomes available, and other
documents filed by the CBOT at the Commission's web site at www.sec.gov, or from
the CBOT by directing such request in writing or by telephone to: Board of Trade
of the City of Chicago, Inc., 141 W. Jackson Blvd., Chicago, Illinois
60604-2994, Attention: Office of the Secretary, Telephone: (312) 435-3605,
Facsimile: (312) 347-3827. This communication shall not constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be any sale of
securities in any state in which offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
state. No offering of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act of 1933, as
amended.
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