SEC Division of Trading and Markets no-action letter: Eurex

May 3, 2006

Via Facsimile and U.S. Mail

J. Eugene Marans, Esq. Cleary, Gottlieb, Steen & Hamilton 2000 Pennsylvania Avenue NW Washington, DC 20006-1801

Re:

Compliance with Eurex No-Action Letter dated July 27, 2005

Dear Mr. Marans:

In your letter dated April 10, 2006, you request, on behalf of your client Eurex Deutschland ("Eurex") and its related parties, a modification to the terms of the no-action letter issued by the Division of Market Regulation on July 27, 2005 ("Eurex No-Action Letter"). In the Eurex No-Action Letter, we stated that the Division would not recommend enforcement action to the Securities and Exchange Commission if employees of Eurex Frankfurt AG and Deutsche Borse AG, and Eurex participants, acted as described in the Eurex No-Action Letter to familiarize certain registered broker-dealers and large financial institutions in the United States with Eurex and certain equity, index, and exchange-traded fund options traded on Eurex. 1

In requesting the Eurex No-Action Letter, you represented that Eurex would institute rules requiring Eurex participants to furnish to Eligible Broker-Dealers and Eligible Institutions a Eurex Disclosure Document before accepting an order from that Eligible Broker-Dealer or Eligible Institution to purchase or sell Options. The rules also would require that Eurex participants obtain written representations from any Eligible Broker-Dealer or Eligible Institution seeking to purchase or sell Options, signed by an appropriate officer, to the following effect:

it is an Eligible Broker-Dealer or Eligible Institution, and as such it (a) owns and invests on a discretionary basis a specified amount of eligible securities sufficient for it to be a qualified institutional buyer under Rule 144A under the Securities Act (and if a bank, savings and loan association, or other thrift institution, has net worth meeting the requirements of Rule 144A under the Securities Act) and (b) has had prior actual experience in the U.S. standardized options markets and as a result thereof has received the options disclosure document entitled "Characteristics and Risks of Standardized Options" that is prepared by the Options Clearing Corporation and the U.S. options exchanges;

it has received the Eurex Disclosure Document;

its transactions in Options will be for its own account or for the account of another Eligible Broker-Dealer or Eligible Institution or for the managed account of a non-U.S. person within the meaning of Rule 902(k)(2)(i) of Regulation S under the Securities Act;

it will not transfer any interest or participation in an Option it has purchased or written to any other U.S. person, or to any person in the United States, that is not an Eligible Broker-Dealer or Eligible Institution;

it will cause any disposition of an Option it has purchased or written to be effected only on Eurex (or submitted to the Eurex Clearing OTC Block Trade Facility as described above) and settled by Eurex Clearing, and it understands that any required payments for premium, settlement, exercise, or closing of any Option with respect to which it has a contract with the Eurex participant must be made in the designated currency. It also understands that if it has a contract with a Eurex participant as a writer of an Option, margin must be provided to the Eurex participant in such form and amount as determined by such Eurex participant, and such Eurex participant, (a) if a Non-Clearing Member, must provide margin to its Clearing Member in such form and amount as determined by that Clearing Member; or (b) if a Clearing Member, must maintain, measure, and deposit margin on such Option with Eurex Clearing in such form and amount as determined by Eurex Clearing;

it understands that Equity Options on equity securities of U.S. issuers that are traded on Eurex are not available for distribution to U.S. persons at this time;

if it is an Eligible Broker-Dealer or Eligible Institution acting on behalf of another Eligible Broker-Dealer or Eligible Institution that is not a managed account, it has obtained from the other a written representation to the same effect as the foregoing and will provide it to the Eurex participant upon demand; and

it will notify the Eurex participant of any change in the foregoing representations prior to placing any future order, and the foregoing representations will be deemed to be made with respect to each order it gives to the Eurex participant.

In your letter, you state that Eurex has concluded that the German legal framework does not contain a specific legal basis for exchanges to adopt compliance rules referring to foreign law. Accordingly, Eurex proposes to incorporate the substance of the foregoing rules into a compliance circular issued by Eurex as an order rather than as rules. You attached as an exhibit to your letter a form of the compliance circular to be issued by Eurex to its participants, together with a form letter to be executed by a Eurex participant upon receipt of the circular, in which the Eurex participant agrees to comply with the requirements outlined in the Eurex No-Action Letter as set forth in the circular.

Eurex further represents that Eurex is authorized under German public law to issue orders addressed to all Eurex participants that impose one-time or continuing obligations on these participants. Eurex also represents that, pursuant to the German Exchange Act, Eurex is required to establish and maintain a disciplinary committee that has the express authority to impose sanctions on participants for violations of exchange orders as well as German Exchange Act provisions and the rules thereunder. Eurex notes that such sanctions may include a reprimand, fine or exclusion from trading on the exchange.

We confirm that the actions Eurex proposes to take, as summarized above and set forth more fully in your letter dated April 10, 2006, are consistent with the relief granted to your client in the Eurex No-Action Letter. Except as expressly provided herein, nothing in this letter shall be deemed to waive or modify any of the provisions of the Eurex No-Action Letter.

The position of the Division in this letter concerns enforcement action only and does not represent a conclusion on the applicability of statutory or regulatory provisions of the federal securities laws. Furthermore, the position of the Division in this letter is based on the representations made in the April 10, 2006 letter and in the July 22, 2005 letter requesting no-action relief. Any different facts or conditions might require a different response, and this position is subject to modification or revocation if the facts and representations are altered.

Sincerely,

Elizabeth K. King Associate Director

Endnotes

1 Capitalized terms used in this letter without definition have the meanings given to them in the Eurex No-Action Letter.

Incoming Letter:

The Incoming Letter is in Acrobat format.

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RECEI PT

COPY

CLEARY GOTTLIEB STEEN & HAMIL-TON LLP -NrT1
SARA D
L AIII.A. ll
SAR NH C LEWIS
1OHN S MA-Y JOHN F COATMAN
.ARR _E1.Y
2000 PENNSYLVANIA AVENUE, N W 101N I MHRRHY 11 LCI ANN A MCCALL .All. M -11ER -TATCIA B M DERMO￾WASHINGTON, D C 20006-1801 .EORGE S 1AI1Y IANET L WELLS' -OANE C. RS1AEC AMYC BEAR-ABE (202) 974 1500 MITCHELL I DUPLER LINDA I SOLDO 11H. T IA. RA EDCA INCENCRR SCITH I CODES FACSIMILE (202) 974 1999 MATTHEW . SLATER MICHAEL R LAZER-1 ED-I AIMNEYER DAVID I GELIAND CATlTV C DEBWI CHIAM 01 AMIE WWW CL.EARYGOTTLIEB COM MICHAEL A MAZZU1.1 NICHOI V 0CM'TED R.BF T I COOK MARK W NELSON BENCE M CTAK NEW YORK FRANKFURT RODIN . ERGE. IEL ICFHRILDEN-RND DEREK M USH PARIS COLOGNE PA.L D AR.R"IT .RIA. SYRNE MEET I ABCE CNR2 LE ER LE ROME BRUSGSEL LONOON S MILAN HONG KONG I EUG-E DANIEL . MARA.. 'ILVU.R EAR HL 0 TENSIEH O H0iA0 C W TEALL RICHARD IC 111H.S Moscow TOKYO 1-1- -1-IL I RICHARD BIDSTR.P SCOTT N EH[-DIIT KEVIN A GNIIFIN STEVE. I KAISER ADITE IHL TO B Sl OTHER IHAN C T IlE E TDI EL1SRIT E -LUMLI WOBEIN UNDER TTE OVER-SIN. . EIN-CIHAL 01- THE WAIIINC TO 01 ElSE April 10, 2006 By Hand Delivery Ms. Elizabeth K. King EE Associate Director, Division of Market Regulation Securities and Exchange Commission ~ PR I 0 ZflU6 100 F Street, N.E. Washington, D.C. 20549 Re: Compliance with Eurex No-Action Letter Dated July 27, 2005 Dear Ms. King:
We are writing on behalf of our clients Eurex Deutschland ("Eurex") and the other clients referred to in our July 22, 2005 letter to you requesting certain no-action advice (the "no-action request letter"), and the July 27, 2005 letter from you providing such advice (the "no-action letter"), as to the desire of Eurex Frankfurt AG and Deutsche J36rse AG to famniliarize certain registered broker-dealers and large finan~cial institutions in the United States with certain options. Defined termns not otherwise defined in this letter shall have the definitions set out in the no￾action letter. The no-action letter includes a reference to a representation in the no-action request letter that Eurex will institute rules that (a) require Eurex participants to furnish to Eligible Broker-Dealers and Eligible Institutions a Eurex Disclosure Document before accepting an order from that Eligible Broker-Dealer or Eligible Institution to purchase or sell Options; and
Page 1 of a total of 14 pages
Exhibit Index begins on page 3

(b) require Eurex participants to obtain certain written representations from any Eligible Broker-Dealei or Eligible Institution seeking to purchase or sell Options, signed by an appropriate officer, to the effect that, amnong other things, it is an Eligible Broker-Dealer or Eligible Institution and has received the Eurex Disclosure Document. Eurex has now concluded, based uponl further research and consultation, that the Gennan legal framnework to which Eurex is subject (including the Gennian Exchange Act) does not contain a specific legal basis for exchanges to adopt co~rnpliance rules referring to foreign law. Eurex proposes instead for the substance of these riles to be incorporated into a compliance circular issued by Eurex as a Eurex order rather than as Eurex rules. The compliance circular would be issued as a Eurex order in the formy attached hereto as Exhibit 1, outlining the reqliirements of the no-action letter and highlighting the necessity for compliance with these requirements. Eurex represents that, in its capacity as a public law entity and self-regulatory organization under Germian public law, Eurex is authorized to issue orders addressed to all Eurex participants that impose one-time or contWinuing obligations on these participants Eurex also represents that, pursuant to the Gennan Exchange Act, Eurex is required to establish and maintain a disciplinary coimmiittee that has the express authority to impose sanctions on participants for violations of exchange orders as well as Exchange Act provisions and therules theifeunder. Eurex notes that such saiictions may include areprimand, fine or exclusion fromn trading on the exchange With this background, we would appreciate receiving your advice that Eurex's distribution of a compliance circular to its participants as a Eurex order substantially in the form of the attached draft could be used as a substitute for Eurex's adoption of rules in the fonrn that had been contemplated in the no-action request letter. We would appreciate your prompt consideration of this request for modification of the no-action letter. If for any reason the staff is not disposed to grant the iiodification of the no￾action letter as described above, we would appreciate an opportunity to discuss the situation with the staff prior to the issuance of any formal letter. Questions regarding this proposed modification of the no-action letter should be directed to me (at 202-974 1888), John R. Loatinan (at 202-974-1958) or Dr Ekkehard Jaskulla, Director -Head of Department, Markets and Regulatory of Eurex (at 49-69-21-11 51331). Sincerely yours, J. Eugene Marans Enclosure

EXHIBIT INDEX

Exhibit Page
Exhibit 1 Eurex Circular Regarding Compliance with SEC No-Action Relief for Familiarization of Certain U.S. Broker-Dealers and Large Financial Institutions With Eurex Options 4

EXHIBIT 1

Eurex Circular Number[ j

Regarding Compliance with SEC No-Action Relief

for Familiarization of Certain U.S. Broker-Dealers and

Large Financial Institutions With Eurex Options

I. This circular outlines ccertain procedures for compliance with a July 2'7,
200-5 no-action letter issued by the staff of the U.S. Securities and Exchange Commission ("SEC") regarding the familiarization of certain U.S. broker-dealers and large financial institutions ("qualified U.S. customers") with Eurex Deutschland ("Eurex") and certain equity, index and exchanige-traded fund options (collectively, the "Options") traded on Eurex.
2. The no-action letter will permit em-ployees of Eurex Frankfurrt AG and
Deutsche Borse AG ("DBAG") and Fuirex participants to engage in these familiarization activities subject to the following conditions:
A The familiarization activities must be limited to (1) options on German, Swiss, Finnish, Dutch, Italian and French eqluities; (2) options on the Dow Jones STOXX 50 Index, the Dow Jones Euro STOXX 50 Index, the Dow Jones Global Titans 50 Index, the DAX Index, the TeeDAX Index, the Swiss Market Index and the Finnish Stock Index (HEX 25); and (3) options on the l)AXE' Fund, the Dow Jones Euro STOXX 50' Fund, the iShares DJ Euro STOXX Fund and the XMTCH on SMI Fund. B Eurex participants must take reasonable steps to assure themselves (with appropriate recordkeeping), before accepting an order for any Option transaction for or with a U.S. customer, that:
(I) the qualified LI S customer is an Eligible Broker-Dealer or Eligible Institution (as defined in Annex A to this circular); (2) the qualified U.S. customnei: is acting for its own account or the account of another Eligible Broker-Dealer or Eligible Institution or the managed account of a non-U.S. person (within the meaning of Rule 902(k)(2)(i) of Regulation S under the U.S. Securities Act of 1933 as defined in Annex A to this circular);

(3) the qualified U.S. customner has had prior actual experience with traded options in the UJ.S. options mtarket (and, therefore, would have received the disclosure document for U.S. standardized options (the "ODD") called for by Rule 9b-lI under the U.S. Securities Exchange Act of 1934 (the "Exchange Act"); and (4) the qualified U.S. customer has received a current version of the Eurex document entitled "Special Characteristics and Risks of Eurex Options on Stocks, Exchangc-Traded Funds and Stock Indices" (the "Eurcx Disclosure Document").
C. Eurex participants which are not U.S. registered broker-dealers may deal
with Eligible InStitutions only in accordance with Rule 15a-6 under the Exchange Act, principally through U.S. broker-dealers as provided in that Rule. D. Eurex participants must obtain written representations from any Eligible Broker-Dealer or Eligible Institution seeking to purchase or sell Options, signed by an appropriate officer, in the fortn prescribed in Annex B to this circular. E. DBAG and Eurex Fraiikfurt mtay not engage in any general advertising concerning Options in the United States. Furthermore, copies of the Eurex Disclosure Documencrt may be provided only to Eligible Broker￾Dealers and Eligible Institutions. F. However, DBAG and Eurex Frankfurt may appoint certain DBAG and Eurex Frankfurt employees to act as their representatives in the United States. Eurex representatives in the United States and outside the United States (collectively, "Representatives") may be available to respond to inquiries from Eligible Broker-Dealers and Eligible Institutions concerning Options. G. Any Representative may make personal calls on and correspond or otherwise communicate with entities whomn such Representative reasonably believes to be Eligible Broker-Dealers and Eligible Institutions to familiarize them with the existence and operations of Eurex. Any Eligible Broker-Dealer or Eligible Institution must be provided with the Eurex Disclosure Document Upon its first visit, (communication or inquiry regarding Options.' H. The Representatives mnust maintain a reasonable supply of the Eurex Disclosure Document, and of the most recently published annual report of If the first communication is by telephone, the Furex Disclosure Document must be provided within one business day of the communication

DBAG, to respond to requests therefor fromn Eligible Brioker-Dealers and Eligible Institutions.
1. A Representative may also participate in programs and seminars in the
United States.
J. Representatives may not, however, give investment advice or make any recommendations with respect to specific Options, nor mnay Representatives solicit, take or direct orders, nor recommend or refer particular Eurex participants. If requested by an Eligible Broker-Dealer or Eligible Institution, a Representative may make available to the requester a list of all Eurex participants empowered to take orders from the public and any registeied U.S. broker-dealer affiliates of such Eurex participants. K. Eurex participants, before effecting an Options transaction with or for an Eligible Broker-Dealer or Eligible Institution, must determine that the Eligible Broker-Dealer or Eligible Institution has received the ODD and the Eurex Disclosure Document and maintain a record of that determination.
3. It must be emiphasized that if a Eurex participant wishes to accept an order
for any Option for or with a qualified UJ.S. customer pursuant to the no-action letter A the Eurex participant must take reasonable steps to assuie itself (with appropriate recordkeeping) that its qualified U.S. customer has received a current version of the Furex Disclosure Document (as described in paragraph 2(B3)(4) above); and B. the Eurex participant must obtain a written representation from thre qualified U.S. customer seeking to purchase or sell Options, signed by anr appropriate officer, in the form prescribed in Annex B to this circular (as described in paragraph 2(D) above).
4. Fur~thermore, if a Eurex participant wishes to accept one oi more orders
for any Option for or with a qualified U.S. customer pursuant to the no-action letter, the participant must return to Eurex an acknowledgment in the form prescribed in Annex C to this circular. Please contact Dr. Ekkehard Jaskulla, Director -Head of Department, Markets and Regulatory of Eurex at Ekkeliardl.Jaskullagdeuitsche-boerse.com or 49-69-21 11 5133 with any questions you may have regarding the application of this circular.

Annex A
Definition of ani Eligible Broker-Dealer or Eligible Institution To be qualified as an Eligible B~roker-Dealer or Eligible Institution for purposes of this circular, each such entity (a) must be a "qualified institutional buyer" as defined in Rule 144A(a)(1) under the U.S Securities Act of 1933 (the "Securities Act"), or an international organization excluded from the definition of "U.S. person" in Rule 902(k)(2)(vi) of Regulation S under the Securities Act, and (b) must have had prior actual experience with traded options in the U.S. options miarket (and, therefore, would have received the disclosure document for U.S. standardized options called for by Rule 9b-1 under the Securities Exchange Act of 1934 (the "Exchange Act")). Definition of "Qualified Institutional Buyer" in Rule 144A(a)(1) Under the Securities Act Rule 144A. (a) Definitions (1) For purposes of this section, "qualified institutional buyer" shall mean:
(I) Any of the following entities, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at lecast $1I00 million in securities of issuers that are not affiliated with the entity. (A) Any insurance company as defined in Section 2(13) of the Act; NOTE: A purchase by an insurance company for one or more of its separate accounts, as defined by section 2(a)(37) of the Investment Company Act of 1940 (the "Investment Company Act"), which are neither registered under section 8 of the Investment Company Act nor required to be so registered, shall be deemed to be a purchase for the account of such insurance company. (B) Any investment comrpany registered under the Investment Company Act or any business development company as defined in
Section 2(a)(48) of that Act;

(C) Any Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; (D) Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees; (E) Any employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974; (F) Any trust fund whose trustee is a bank or trust company and whose participants are exclusivcly plans of the types identified in paragraph (a)( I)(i)(D) or (E) of this section, except trust flnds that include as participants individual retirement accounts on IHFR. 1I0 plans. (G) Any business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940; (H1) Any organization desciibed in Scction 501 (c)(3) of the Internal Reveinue Code, corporation (othier thaii a bank as defined in
Section 3(a)(2) of the Act oi a savings and loan association or
other institution referenced in Section 3(a)(5)(A) of the Act or a foreign bank or savings and loan association or equivalent instiftution), partnerslip, or Massachusetts or similar business trust; and (I) Any investment adviser registered under the Investment Advisers Act. (ii) Any dealer registered pursuant to Section 15 of the Exchange Act, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers that are not affiliated with the dealer, provided that securities constituting the whole or a part of an unsold allotment to or subscription by a dealer as a participant in a public offering shall not be deemed to be owned by such dealer; (iii) Any dealer registeied pursuant to Section 15 of the Exchange Act acting in a riskless principal traiisaction on behalf of a qualified institutional buyer, NOTE: A icgistered dealer may act as agent, on a non-discretionary basis, in a transaction with a qualified institutional buyer without itself having to be a qualified institutional buyer.

(iv) Any investment company registered under the Investment Company Act, acting for its own account or for the accounts of other qualified institutional buyers, that is part of a family of investment companies which own in the aggregate at least $100 million in securities of issuers, other than issuers that are affiliated with the investment company or are part of such family of investment companies. "Family of investment companies" means any two or more investment companies registered tinder the Investment Company Act, except for a unit investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investmrent adviser (or, in the case of unit investment tnists, the samne depositor), provided that, for purposes of this
section:
(A) each serics of a series company (as defined in Rule 1Sf-2 under the Investment Company Act) shall be deemed to be a separate investment comipany; and (B) investment companies shall be deemed to have time same adviser (or (lepositor) if their advisers (or depositors) are majority￾owned subsidiaries of the same parent, or if one investment company's adviser (or depositor) is a majority-owned subsidiary of the other investment company's adviser (or depositor); (v) Any entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers; amid (vi) Any bank as defined in Section 3(a)(2) of the Act, any savings and loan association or other institution as referenced in Section 3(a)(5)(A) of the Act, or any foreign bank or savings and loan association or equivalent Institution, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owiis and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with it and that has an audited net worth of at least $25 million as demonstrated in its latest annual financial statements, as of a date not more than 16 months preceding the date of sale tinder the Rule in the ease of a U.S. bank or savings and loan association, and not more thtan 18 months preceding such date of sale for a foreign bank or savings and loan association or equivalent institution. (2) In detenmimiting the aggregate amount of securities owned and invested on a discretionary basis by an entity, the followiing instrnmments and interests shiall be excluded: bank deposit notes and certificates of deposit; loan participations;, repurchase agreements; securities owned but subject to a repurchase agreemnent; and currency, interest rate and cormmodity swaps.

(3) The aggregate value of securities owned and invested on a (liscretionary basis by an entity shall be the cost of such securities, except where the entity reports its securities holdings in its financial statements on the basis of their market value, and no current informnation with respect to the cost of those securities has been published. In the latter event, the securities may be valued at market for purposes of this section. (4) In determnining the aggregate amount of secunities owned by an entity and invested on a discretionary basis, securities owned by subsidiaries of the entity that are consolidated with the entity in its financial staternents prepared in accordance with generally accepted accounting principles may be included if the investments of such subsidiaries are managed uiider the directioii of the entity, except that, unless the entity is a reporting company under Section 1 3 or 15(d) of the Exchange Act, securities owned by such subsidiaries may not be included if the entity itself is a majority-owned subsidiary that would be included in the consolidated financial statements of another enterprise. (5) For purposes of this section, "riskless principal transaction" means a transaction in which a dealer buys a security fromn any person and makes a sinultaneous offsetting sale of such security to a qualified institutional buyer, including another dealer acting as riskless principal for a qualified institutional buyer. (6) For purposes of this section, "effective conversion premium" means the amount, expressed as a percentage of the security's conversion value, by which the pfice at mssuance of a convertible security exceeds its conversion value. (7)For purposes of this section, "effective exercise premium" meanis the amount, expressed as a percentage of the warrant's exercise value, by which the sumn of the price at issuance and the exercise pnece of a warrant exceeds its exercise value. Definition of Managed Account for a Non-U.S. Person in Rule 902(k)(2)(i) of Regulation S IUnder the Securities Act Rule 902(k)(2)(i) of Regulation S. (k)(2) The following are not "U .S. persons":
(i) Any discretionary account or similIar account (other than an estate or trust) held for the benefit or account of a noii-U.S . person by a dealer or other professional fiduciary organized, incorporated, or (if an individual) resident in the United States;

Definition of International Organization in Rule 902(k)(2)(vi) of Regulation S Under the Securities Act Rule 902(k)(2)(vi) of Regulation S. (k)(2) The following are not "U.S. persons":
(vi) The International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-Amnerican Development Bank, the Asian Development Bank, the African Development Bank, the United N~ations, and their agencies, affiliates and pension plans, and any other similar international organizations, their agencies, affiliates and pension plans. I1I

Annex B
[Letterhead of Qualified U.S. Customer]
[Date]
[Namre and Address of Eurex Participant]
Re: Options Traded on Eurex Deutsehland
Ladies and Gentlemien:
[Namne of Qualified U.S. Customner] (the "Qualified U.S. Customer") seeks to purchase or sell certain options (collectively, the "Options") traded on Eurex Dcutschland ("Eurex").
I. It is an Eligible Broker-Dealer or Eligible Institution for purposes of these
transactions, i.e,
(in) it owns and invests on a discretionary basis a specified amount of eligible securities sufficient for it to be a qualified institutional buyer under Rule 144A under the Securities Act of 1933 (the "Securities Act") (and if a hank, saving and loan association, or other thrift institution, has a net worth meeting the requirements of Rule 144A under the Securities Act); and (ii) has had prior actual experience in the U.S. standardized options markets and as a result thereof has received the options disclosure document entitled "Characteristics and Risks of Standardized Options" that is prcpared by the Optionis Clearing Corporation and the U.S. options exchanges.
2. It has received the Eurex documnent entitled "Special Characteristics and

Risks of Eurex Options on Stocks, Exchanige-Traded Funds and Stock Indices".

3. Its transactions in Options will be for its own account or for the account of
   another Eligible Broker-Dealer or Eligible Institution or for the managed account of a non-U.S. person within the meaning of Rule 902(k)(2)(i) of Regulation S under the Securities Act. 4 It will not transfer any interest or participation in an Option it has purchased or written to any other U.S. person, or to any persoii in the United States, that is not an Eligible Broker-Dealer or Eligible Institution. 5 (in) It will cause aiiy disposition of an Option it has purchased or written to be effected only on Eurex (or submitted to the Eurex

Clearing OTC Block Trade Facility) and settled by Eurfex Clearing AG ("Eurex Clearing"), and it understands that any required payments for premium, settlement, exercise, or closing of any Option in respect of which it has a contract with the Eurex participant must be made in the designated currency. (ii) It also understands that if it has a contract with a Eurcx participant as a writer of an Option, miargin must be provided to the Eurcx participant in such form and amnount as determined by such Eurex participant, and such Eurex participant, (a) if not a Clearing Member of Eurex Clearing, must provide margin to its Clearing Member in such formn and amount as determined by that Clearing Member; and (b) if a Clearing Member of Eurex Clearing, mnust maintain, measure andl deposit mnargin on such Option with Eurex Clearing in such formn and amount as determined by Eurex Clearing.
6. It understands that Options on equity securities of U).S. issuers that are traded on
Eurex are not available for distribution to UJ.S. persons at this time.
7. If it is an Eligible Broker-Dealer or Eligible Institution acting on behalf of another
Eligible Broker-Dealer or Eligible Institution that is not a managed account, it has obtained from the other a written representation to the same effect as the foregoing and will provide it to the Eurex participanit upon demnand
8. It will notify the Eurex participant of'any change in the foregoing representations
prior to placing any future order, and the foregoing representations will be deemed to be made with respect to each order it gives to the Furex participant. Very truly yours, [QU.ALIFIED Ii S. CUSTOMER] B y : _ Namne:
Title:

Annex C
[Letterhead of Eurex Participant]
[Date]
Eurex Deutschland
Legal Affairs
Section Markets and Regulatory
D-60485 Franktfirt/Main
Germany
Re: Compliance Circular Regarding Options Traded on Eurex Deutschland by

Qualified U.S. Customers

Ladies and Gentlemen:
We hereby acknowledge that we have reviewed Compliance Circular No. (the "Compliance Circular") issued by Eurex Deutschland ("Eurex") outlining certain procedures for compliance with a July 27, 2005 no-action letter issued by the staff of the U.S. Securities and Exchange Commission regarding the familiarization of certain U.S. broker-dealers and large financial institutions ("qualified U.S. customers") with Eurex and certain equity, index and exchange-traded fund options (collectively, the "Options") traded on Eurex. We hereby confirm that if we accept any orders for any Option for or with a qualified U.S. customer pursuant to the no-action letter, we will comply with the requirements applicable to Eurex participants as outlined in the Compliance Circular, including that- A. the Eurex participant must take reasonable steps to assure itself (with appropriate recordlkeeping) that its qualified U.S. customer has received a current version of the Eurex Disclosure Document (as dlescribed in the Compliance Circular); and B. the Eurex participant mnust obtain a written representation fromt the

qualified U.S. customner seeking to purchase or sell Options, signed by an appropriate

officer, in the forrm prescribed in Annex B to the Compliance Circular.

Very truly yours,
[EUREX PARTICIPANT]
B y : _
Name:
Title: