(a)        The Exchange may establish particular position limits on those positions of a person normally known as "spreads, straddles or arbitrage," including:

 (1)        intramarket spreads;

 (2)        intermarket spreads;

                         (3)        cash-futures arbitrage, where "cash" is defined as spot or forward positions; or

                         (4)        eligible option/option or option/futures spreads as defined in Regulation 425.01.

In addition, the Exchange may establish, on a case by case basis, particular maximum position limits on certain risk management positions in interest rate, stock index and currency futures and options, including:

 (1)        Long positions (futures, long calls, short puts) whose underlying commodity value does not exceed the sum of:

  (i)         Cash set aside in an identifiable manner, or any of the following unencumbered instruments so set aside, with maturities of less than 1 year:  U.S. Treasury obligations; U.S. agency discount notes; commercial paper rated A2 or better by Standard & Poors and P2 or better by Moody's; banker's acceptances; or certificates of deposit, plus any funds deposited as margin on such positions; and

 (ii)         Accrued profits on such positions held at the futures commission merchant.

 (2)        Long positions (futures, long calls, short puts) whose underlying commodity value does not exceed the sum of:

 (i)         The value of equity securities, debt securities, or currencies owned and being hedged by the trader holding such futures or option position, provided that the fluctuations in value of the position used to hedge such securities or currencies are substantially related to the fluctuations in value of the  securities or currencies themselves; and

                                    (ii)          Accrued profits on such positions held at the futures commission merchant.

                        (3)        Short calls whose underlying commodity value does not exceed the sum of:

                                    (i)          The value of securities or currencies underlying the futures contract upon   which the option is based or underlying the option itself and which securities or currencies are owned by the trader holding such option position; and

                                    (ii)         The value of securities or currencies whose price fluctuations are substantially related to the price fluctuations of the securities or currencies underlying the futures contract upon which the option is based or underlying the option itself and which securities or currencies are owned by the trader holding such option position.

Risk management positions eligible for particular position limits under this Regulation do not include those considered as bona fide or economically appropriate hedging positions as defined in Regulation 425.02.

(b)        Requirements for Exemptions from Position Limits. Every member or member firm which owns, controls or carries positions on behalf of a person who wishes to make purchases or sales of any commodity for future delivery or any option on a contract for future delivery in excess of the position limits then in effect, shall file statements on behalf of the person with the Exchange, in such form and manner as shall be prescribed by the Exchange in conformity with the requirements of this subsection.

(1)        Initial Statement. Initial statements concerning the classification of positions normally known in the trade as "spreads, straddles or arbitrage,” or risk management positions, as described in subsection (a) above, for the purpose of subjecting such positions to particular position limits above those specified in Regulation 425.01 (b),  shall be filed with the Exchange no later than 10 business days after the day on which such positions exceed the position limits then in effect. Such statements shall include information necessary to enable the Exchange to make a determination that the particular kinds of intended positions should be eligible for a higher position limit, including, but not limited to:

             (i)         A description of the specific nature and size of positions for future delivery or in options on contracts for future delivery and offsetting cash, forward or futures positions, where applicable, and an affirmation that intended positions to be maintained in excess of the limits set forth in Regulation 425.01 (b)  will be positions as set forth in subsection (a) above; and

            (ii)         In the case of risk management positions, information on the cash portfolio being managed and/or any cash or cash market instruments held in connection with the intended risk management position, as well as other information relevant to the conditions specified in subsection (a) above. Of particular interest are whether the cash market underlying the futures or options market has a high degree of demonstrated liquidity relative to the size of the positions, and whether there exist opportunities for arbitrage which provide a close linkage between the cash market and the futures or options market in question; and whether the positions are held on behalf of a commercial entity, including parents, subsidiaries or other related entities, which typically buys, sells or holds the underlying or a related cash market instrument.

(2)        Supplemental Statements. Whenever there is a material change in the information provided in the person's most recent statement pursuant to this Regulation, a supplemental statement which updates and confirms previous information shall be filed with the Exchange by every member or member firm owning, controlling or carrying such person's position. The supplemental statement shall be filed no later than 10 business days after the day on which the person's position exceeds the level specified in the most recent statement.

(c)        The Exchange will monitor the positions maintained by persons who have obtained particular position limits under the provisions of this Regulation. The initial and supplemental statements prescribed in subsections (b)(1) and (b)(2) above must be submitted to the Office of Investigations and Audits and shall be maintained on a confidential basis. The Exchange may request additional relevant information necessary to ensure compliance with this Regulation, and may, in its discretion, amend, revoke or otherwise limit the particular position limits established.

 (d)      The provisions of this Regulation shall not apply to Corn, Oats, Soybean, Wheat, Soybean Oil and Soybean Meal futures and options contracts traded on the Exchange, for which exemptions from position limits are governed by Commodity Futures Trading Communication Regulation 150.3.  (01/01/06)