Settlement Practices

4.11.1 Settlement and Delivery Requirements

Delivery of the underlying security upon the exercise of an options contract, and payment of the aggregate exercise price in respect thereof, shall be in accordance with the Rules of the Clearing Corporation.

As promptly as possible after the exercise of an options contract by a

customer, the Member shall require the customer to make full cash payment of the

aggregate exercise price in the case of a call options contract, or to deposit the underlying security in the case of a put options contract, or to make the required margin deposit in respect thereof if the transaction is effected in a margin account, in accordance with the Rules of the Exchange and the applicable regulations of the Federal Reserve Board.

As promptly as practicable after the assignment to a customer of an exercise notice the Member shall require the customer to deposit the underlying security in the case of a call options contract if the underlying security is not carried in the customer’s account, or to make full cash payment of the aggregate exercise price in the case of a put options contract, or in either case to deposit the required margin in respect thereof if the transaction is effected in a margin account, in accordance with the Rules of the Exchange and the applicable regulations of the Federal Reserve Board.

Clearing Members must follow the procedures of the Clearing Corporation when exercising American-style cash-settled index options contracts issued or to be issued in any account at the Clearing Corporation. Members must also follow the procedures set forth below with respect to American-style cash-settled index options:

(1) For all contracts exercised by the Member or by any customer of the Member, an "exercise advice" must be delivered by the Member in such form or manner prescribed by the Exchange no later than 4:20 p.m. Eastern time (3:20 Central), or if trading hours are extended or modified in the applicable options class, no later than five (5) minutes after the close of trading on that day.

(2) Subsequent to the delivery of an "exercise," should the Member or a customer of the Member determine not to exercise all or part of the advised contracts, the Member must also deliver an "advice cancel" in such form or manner prescribed by the Exchange no later than 4:20 p.m. Eastern time (3:20 Central), or if trading hours are extended or modified in the applicable options class, no later than five (5) minutes after the close of trading on that day.

(3) An Exchange official designated by the Board may determine to extend the applicable deadline for the delivery of "exercise advice" and "advice cancel" notifications pursuant to this paragraph (h) if unusual circumstances are present.

(4) No Member may prepare, time stamp or submit an "exercise advice" prior to

the purchase of the contracts to be exercised if the Member knew or had reason to

know that the contracts had not yet been purchased.

(5) The failure of any Member to follow these procedures may result in the assessment of a fine, which may include but is not limited to disgorgement of potential economic gain obtained or loss avoided by the subject exercise, as determined by the Exchange. (6) Preparing or submitting an "exercise advice" or "advice cancel" after the

applicable deadline on the basis of material information released after such

deadline, in addition to constituting a violation of this Rule, is activity inconsistent with just and equitable principles of trade.

(7) These procedures do not apply on the business day prior to expiration in series expiring on a day other than a business day (AM Settled) or on the expiration day in series expiring on a business day (PM Settled).

(8) Exercises of American-style, cash-settled index options (and the submission of corresponding "exercise advice" and "advice cancel" forms) shall be prohibited during

any time when trading in such options is delayed, halted, or suspended, subject to the

following exceptions:

(i) The exercise of an American- style, cash-settled index option may be processed and given effect in accordance with and subject

to the rules of the Clearing Corporation while trading in the option is delayed, halted, or suspended if it can be documented, in a form prescribed by the Exchange, that the

decision to exercise the option was made during allowable time frames prior to the delay, halt, or suspension.

(ii) Exercises of expiring American-style, cash-settled index options shall not be prohibited on the last business day prior to their expiration.

(iii) Exercises of American-style, cash-settled index options shall not be prohibited during a trading halt that occurs at or after 4:00 p.m. Eastern time. In the event of such a trading halt, exercises may occur through 4:20 p.m. Eastern time. In addition, if trading resumes following such a trading halt (such as by closing rotation), exercises may occur during the resumption of trading and for five (5) minutes after the close of the resumption of trading. The provisions of this subparagraph (iii) are subject to the authority of the Board to impose restrictions on transactions and exercises pursuant to Rule 417.

(iv) An Exchange official designated by the Board may determine to permit the exercise of American-style, cash-settled index options while trading in such options is delayed, halted, or suspended.

4.11.2 Clearance Procedures

Applicable OCC By-Laws –

Any person registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, or any Non-U.S. Securities Firm, shall be eligible to become a

Clearing Member; and in addition, a futures commission merchant registered under

the Commodity Exchange Act shall be eligible to become a Clearing Member for the purpose of clearing transactions in commodity futures, futures options and commodity options. Each applicant to become a Clearing Member must meet the initial Clearing Member financial requirements then in effect and maintain facilities and personnel adequate for the expeditious and orderly transaction of business with the Corporation and other Clearing Members. Every applicant must meet such additional non-discriminatory standards of financial responsibility, operational capability, experience and competence as may from time to time be prescribed in the statutory rules of the Corporation. The Corporation may, and in cases in which the Securities and Exchange Commission, by order, directs as appropriate in the public interest, shall disapprove the application for

Applications for clearing membership s1hall be in such form and contain such information as the Board of Directors shall from time to time prescribe. The

Membership/Risk Committee shall review applications for clearing membership and shall recommend, approval or disapproval to the Board of Directors. The Membership/Risk Committee or the Board of Directors, or their designated delegates or agents, may examine the books and papers of any applicant, take such evidence as they may deem necessary or employ such other means as they may deem desirable or appropriate to ascertain relevant facts bearing upon the applicant's qualifications. If the

Membership/Risk Committee proposes to recommend to the Board of Directors that an application for clearing membership be disapproved, it shall first furnish the applicant with a written statement of its proposed recommendation and the specific grounds therefor, and afford the applicant an opportunity to be heard and to present evidence on its own behalf.

All Exchange transactions shall be cleared through the Corporation, and no other transaction shall be cleared through the Corporation without its consent.

Applicable OCC Rules –

Trade Reporting and Matching –

Each business day each Exchange shall report to the Corporation information with respect to each Exchange transaction made on such Exchange during said business day (or on a previous day and reconciled on said business day) and as to which matching trade information has been submitted by or on behalf of the Purchasing Clearing Member and the Writing or Selling Clearing Member. Such matching trade information shall also include a Customer CMTA Indicator, a CMTA Customer Identifier, and an IB Identifier to the extent required under applicable Exchange rules. If a give-up service provider reports to the Corporation the information required for Exchange transactions effected on an affiliated futures market, matched trade information from the give-up service provider shall be deemed to have been submitted to the Corporation by such affiliated futures market for all purposes of the By-Laws and Rules.

Options. If the relevant transaction is in options, the matching trade information

for such transaction shall include: