| | | Audit Advisory Notice | |  | | | | From | Audit Department, Clearing House Division |
| Subject | Financial Reporting of CME Shares |
| Effective Date | 05/03/01 |
| Notice Number | 01-02 |
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At the April 18, 2001 Chicago Mercantile Exchange Inc. Annual Meeting of Shareholders, the period during which transfer restrictions apply to Class A shares was extended. The extension of transfer restrictions from the original date, May 14, 2001, was made in order to facilitate a possible initial public offering.
As Class A shares are currently non-transferable and both Class A and Class B shares are subject to the claims of CME, the shares should continue to be reflected as non-current (i.e. non-allowable) assets at original cost in the financial statements. The financial statement presentation would remain identical to the classification of memberships prior to demutualization as the amount should be reported on 1-FR Line 15 - Exchange memberships at cost or FOCUS Line 12.B. - Memberships in exchanges: Owned at cost, as appropriate.
This financial statement presentation is identical to that indicated in AIB 01-01 dated January 18, 2001. As the restrictions are eliminated on the Class A shares and a ready market develops, we will issue an Audit Information Bulletin discussing any changes in financial statement presentation.
If you have any questions, please call the Audit Department at (312) 930-3230 or e-mail us at audits@cme.com. | | | |