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106.E. Unconditional Bequests and Bona Fide Gifts of Membership

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106.E. Unconditional Bequests and Bona Fide Gifts of Membership

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pursuant to Rule 110.

6. The transferred membership may be sold in accordance with Rule 133, and the proceeds
may be applied as provided in Rule 110, to satisfy financial obligations of the transferee to
the Exchange, to another member or to a clearing member arising out of the transferee’s
use of the membership in the event that such financial obligations have not been
otherwise satisfied.
7. The transferee must be qualified to trade by a clearing member acceptable to the
transferor. The transferor may not assign the membership for membership purposes
pursuant to Rules 106.J. or 902.
8. A transferee shall place all trades on the books of his qualifying clearing member unless
written authorization to the contrary from said clearing member and from the transferor
has been filed with the Department. Failure to adhere to the requirements of this rule and
Rule 511 shall exclude a clearing member not qualifying the transferee from receiving
proceeds under Rule 110.
9. Upon a transferor’s expulsion from the Exchange, the transfer shall be revoked and the
membership shall revert to the transferor who must sell the membership within 30 days.
10. Except as provided in Rule 135, any transferee approved for membership pursuant to this
Rule 106.D. after January 7, 1985, who was not a member as of January 7, 1985, shall be
eligible to execute trades only for his own account for a cumulative period of twelve (12)
months following his or her election to membership unless exempted there from by the
Membership Committee.
11. A lease entered into on or after February 1, 1996, which is terminated by a transferee prior
to its expiration date, shall be controlled by the following early cancellation payment
obligation:
A transferee who unilaterally terminates a lease remains obligated to make the agreed
rental payments to transferor until the end of the term of the lease; however, transferee's
obligation to make such rental payments shall be reduced by the amount of rental
payments received by transferor if transferor is able to lease the membership to another
person during the remaining term of the original lease. Transferor must use his best
efforts to lease the membership to another person as soon as possible and at the highest
possible rental obtainable based on similar leases, if any, then being executed.
12. A lessor shall notify the Exchange, in a manner designated by the Exchange, of the terms
of a new lease agreement or any renewal of a lease agreement within two (2) business
days of the negotiation of the lease agreement, or renewal thereof. A lessor's failure to
comply with this Rule 106.D.12 may result in the issuance of a warning letter to the lessor.
A lessor may then be subject to an automatic fine of $500 and $1000 respectively for a
second and third violation of this rule within a rolling 12-month period from the issuance of
the warning letter. Repeated violations of this rule may be referred to a disciplinary
committee.
13. For leases expiring on or after December 31, 2006, unless otherwise previously agreed to
by the transferor and the transferee, notice must be provided by the parties of their
intention to continue a leasing arrangement at least ten (10) days prior to the expiration of
the current lease term. If either party fails to provide such notice, it is assumed that the
lease will not be renewed upon its expiration. Terms of the renewal, if any, will be subject
to negotiation between the parties.
106.E. Unconditional Bequests and Bona Fide Gifts of Membership
A member or Non-Member Investor may make a bona fide gift or bequest of membership. The
bona fide gift may be made only to immediate family members as defined in Rule 106.C.
Unless otherwise required by law, a letter affirming the gift or Letters of Office from the Probate
Court and a letter from the decedent’s personal representative allowing the transfer will be
required as a precondition of transfer.
106.F. Clearing Member
A membership may be owned by a clearing member, or a person or an entity having an
acceptable proprietary interest in the clearing member. The membership may be transferred
under this Rule provided that: (1) the transfer is approved by Exchange staff; and (2) the

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