1. What products are being launched?

A: The S&P Europe 350 is a broad market equity index whose constituents account for approximately 70 percent of the total market value of European equities. The index is the European equivalent of the widely followed S&P 500 in the U.S. market, and is part of the S&P Global 1200. Constituents in the S&P Europe 350 are drawn from 15 European countries, including the United Kingdom.

The three sector indexes on which futures contracts will be launched concurrently � Financial, Information Technology and Telecom Services � represent economic activities that have generated significant interest in the European equity environment in recent months. Together, these three sectors account for 46 percent of the market capitalization of the S&P Europe 350. Contracts on the remaining seven sector indexes derived from the S&P Europe 350 index will be launched for trading later this year, including Consumer Discretionary, Consumer Staples, Energy, Health Care, Industrials, Materials and Utilities. All sector indexes are calculated using the new GICS classification system that has been jointly developed by MSCI and S&P. The S&P Europe 350 and the Sector Indexes will be referred to as the S&P Europe products.

At the June 21, 2001 launch, for each index, 4 quarterly Futures contracts and 4 quarterly Options on Futures series will be listed (Sep., 2001, Dec. 2001, Mar. 2002, June. 2002. The October 2001 serial options will be listed in July and the November, 2001 serial options will be listed in August.

2. Where will the futures and option on futures contracts be traded and how wil they be cleared?

A: The new futures and options on futures contracts will trade on the MEFF S/MART system, and the transactions will be transmitted electronically to the CME Clearing House. MEFF has joined CME�s Clearing House as a Special Clearing Member for these products. MEFF clearing members� trades will clear at CME as sub-accounts of MEFF Special Clearing Member. CME Clearing Members may clear their S&P Europe trades directly at the CME as they do for other CME products.

Customers and Non-customers may execute with any MEFF member or CME member with access to the MEFF S/Mart system. Customers and Non-customers may clear their transactions with a MEFF member where it will be cleared by the CME Clearing House through the MEFF special member or through a CME clearing member. If an S&P Europe position is cleared though a CME member, there may be margin offsets with other CME products. The choice of where a customer chooses to clear an S&P Europe position will likely depend on existing clearing relationships and potential margin offsets. (Note: at the time of writing. Regulatory approval for US entities to trade and clear the broad-based S&P Europe 350 is expected by the June 21, 2001 launch date. Regulatory approval for US entities to trade and clear the Sector Indexes is expected after the June 21, 2001 launch)

3. How will CME Members access the S&P Europe Market?

A: CME members and their customers will be granted cross-exchange access to trade the index contracts on MEFF, with CME members gaining access to trade on the MEFFS/MART system. (Regulatory approval for U.S. customers to trade these products is pending.) Please contact Danielle Dycus, CME European Marketing (44 20 7623 2550; ddycus@cmeurope.co.uk) for trading access.

4. How will CME Members who don't have a MEFF S/Mart terminal trade and clear these products

A: CME members with or without their own S/Mart terminal can have other CME or MEFF members execute trades on their behalf and have the trades given up to them. CME Member will be able to use GUS for these products as they can for other CME products including:

� Accepting trades executed by MEFF member firms or another CME firm which have been given up to them. (Note: Acceptance activity must be executed prior to 11:15am or else wait until the next business day)

� Allocate trades in the products to other CME member firms or to MEFF firms.

� Allocation and acceptance of Give-Up trades with MEFF firms can be executed by CME firms using the GUS on-line System or via the new GUS MQM as it becomes available.

� Note. Transactions may be marked for Give-up at the time of the original transaction. After the original transaction, trades may be marked for Give-up through Memo Adds or through the Globex Matched Trade Update screen.

5. How will trades appear to Clearing Members?

A. Trades executed by CME member firms will behave exactly as if they had been executed on Globex2 as follows

� Globex� TREX confirms will be generated and sent to CME member firms that execute trades on the MEFF System. (However TREX confirmation messages for Transactions executed through the MEFF S/Mart system will show the exchange code as '21' as opposed to '02' or '16'.

� The S&P Europe trades will be viewable on the GLOBEX2 Matched Trade Inquiry System.

� Firms will be able to give-up and transfer S&P Europe Trades, like any other product.

� S&P Europe trades and other transactions will be included in the Trade Register file and reported exactly like any other CME product.

6. Will CME Clearing Systems such as GUS, TES, and APS be available to transfer or give-up trades?

A: Yes. There will be no restrictions on using GUS, TES and APS for Giving-Up, Accepting or Transferring S&P Europe positions with the exception that GUS Acceptances will not be allowed between 11:15am through midnight.

� CME Members will be able to Give-up and Transfer positions to other CME members or to MEFF sub-accounts (MEFF clearing members)

7. How will transactions come through the MEFF S/Mart Trading System into the CME Clearing System?

A: All transactions executed on the MEFF S/Mart system (except for some MEFF internal transfers) will be passed onto the CME as M1 messages. All messages will be processed through the Globex2 Trade Posting System and thus appear as a Globex2 trade for clearing purposes. If the transaction is marked as a GUS trade, it will be passed to the GUS system and will be processed as any other GUS transaction (with the exception that no acceptance activity is allowed between 11:15am and 12:00 midnight Central time.)

� A CME clearing firm directly executing a regular transaction through the MEFF S/Mart system will see the transaction come through the Globex Trade Poster. The transaction can then be marked for Give-up and sent to the GUS system or be cleared by the clearing member and applied to the clearing members position.

Note: that PCS for the MEFF Europe products will be in the same file and the same time frames as for other CME products.

� Give-Ups. Automated procedures.

� Transactions in the MEFF S/Mart system can be marked with a 'Give-Up' account and be directly routed to the GUS system. Unique 'Give-Up' accounts are set up by MEFF in the S/Mart system and define existing executing firm to carrying firm relationships. A Give-Up agreement may be required to set up a 'Give-Up' account. If the executing firm executes a transaction using a 'Give-Up' account number, the order will be automatically routed into the GUS system and will await the carrying firms acceptance. The transaction remains with the executing firm until accepted by the carrying firm.

� Give-Ups Manual procedures.

� If the original transaction through the S/Mart system is not marked for Give-Up, CME Members or MEFF Special Member acting on behalf of MEFF clearing firms can use the Globex Matched Trade Update Screen to mark the trade for GUS for GUS processing.

� If the original transaction is marked for Give-up but the carrying firm is not entered, the transaction will automatically pass into the GUS system. However the executing CME member (or MEFF special member if the executing firm is a MEFF member), must enter the GUS system to input the Carry Firm. Then the Carrying Firm (or MEFF Special Member if the Carrying Firm is a MEFF member) can then accept the transaction.

8. What is the Clearing Process?

A: All trades executed by CME member firms or received as give-ups, will be cleared through regular CME Clearing House Processing.

9. Can a CME clearing firm clear S&P Europe products through a MEFF Clearing Firm? Can a MEFF Clearing Firm clear transactions through a CME Clearing Firm?

A: Once a "no action" for the CME Europe products is obtained, CME firms will be able to clear the products directly with the CME or as a customer or non-customer of a MEFF clearing member. (CFTC No Action is expected for the S&P 350 by the launch date 6/21/1, No Action for the Sector Indexes is expected on a later date. A MEFF Member can choose to clear the S&P Europe products through a CME Clearing Member.

� With the CME Clearing Member's authorization, trades in S&P products by the MEFF Member can be routed to be cleared directly by the CME Clearing Member without the need for GUS transactions.

10. What is the Trading and Clearing Timelines for these Products?

A: All trading in the S&P Europe products will occur before the CME's Intraday (ITD) settlement cycle, or between 2:00am to 10:30am Chicago time (9:00am to 5:30pm Central European Time) on the MEFF S/Mart system. No 'after hours' trading will be available at the time of the launch. All trades executed through the MEFF S/Mart system for a given business day will be margined and settled at the CME's ITD settlement cycle.

� 11:15am. Will be the deadline for GUS and transfer activity to be processed in the ITD cycle for all CME products including the S&P Europe products. After 11:15am GUS accepts for S&P Europe products will be disabled until 12am. (there will be no restriction for using the GUS system for allocating S&P Europe products after 11:15am)

� 11:15am. Is the deadline for ITD PCS for the S&P Europe products as well as all other CME products. � At ITD Settlement for Euro settled products (which the S&P Europe products will be the only such settled products at the time of the launch) will be banked with a value date of T+1, ie, the next business day.

� At the monthly option expiration (the S&P Europe options are all european style), exercise & assignment processing for the MEFF products will likewise be done as part of the ITD settlement cycle. The settlement variation from the resulting futures will be included with other Euro monies to be banked as part of the ITD settlement cycle with a value date convention of T+1.

� After the ITD settlement cycle there will normally be little or no activity for the S&P Europe products. There will be no new trades, and no GUS transfers. There may be type 8 transfers and APS transfers. On a normal day, the end of day settlement prices will for the S&P Europe products will not change from the ITD settlement prices. (In the event that a major market event occurs after the 10:30am closing time, the CME may change the settlement price of S&P Europe products at the end-of-day settlement cycle.)

� At the end of day (RTH) settlement cycle, if there are any transfer transactions which clear after ITD, the resulting Euro denominated settlement variation and/or option premium will be banked with a value date convention of T+2.

� Note: banking of Euro settlements will occur once a day at 2:00am (8:00 London time) for the prior day's (T-1) ITD settlement and the T-2 RTH settlement.

� Note: One change to position processing is in the case of a firm that does NOT submit a PCS at RTH, the clearing system will revert to the ITD PCS submission rather than the prior day's RTH PCS submission.

11. Will there be any changes to C21 screens or reports for these products?

A: Because the MEFF exchange keeps counterparties to all transactions anonymous, the opposite firm on screens, reports and datafiles will appear as firm 110. The exception to this is in the GUS system. The CME firm will see the actual counterparty as the opposing firm, whether it is a MEFF firm or another CME firm. The actual firm number will also appear on the GUS transfer record on the Trade Register.

12. Will there be any changes to file layouts or data fields?

A: For give-up trades coming from a MEFF firm, the GUS Routing File will contain the Exchange Code of "21" for MEFF in positions 26-27 of the Main GUS Routing record. For S&P Europe trades that are cleared for CME member firms, the TREX GLOBEX confirmation records will contain the Exchange Code "21" for MEFF, in positions 35-39 of the Main TREX block. The Trade ID Source code (position 146-148) will be GBX (for GLOBEX). S&P Europe products will appear in the CME's daily SPAN risk parameter files and settlement price files exactly as with any other product.

13. Are there any unique aspects to the S&P Europe Products?

A: Please access the MEFF website for detailed Contract Specifications at www.meffrv.es/ing/sp/. Contract highlights include: � Settlement in Euro. Thus each member who wants to participate in these products must have a Euro denominated account with a CME Settlement Bank. Please contact Tim Golomb, Associate Director, Financial Management (312- 930-3194) for information on establishing a Euro denominated Bank Account. As with other non-dollar settlement obligations, these Euro denominated obligations will be settled using "combined cash flows" methodology. If a CME member firm is obligated to pay Euro cash to the Clearing House, that obligation will first be satisfied from any Euro cash which that firm has deposited as performance bond collateral. A call for cash will only be issued to the extent that the obligation cannot be satisfied from existing Euro cash on deposit. Similarly for a firm receiving Euro cash, the Euro cash will automatically be deposited as Euro cash performance bond collateral. Treating Euro cash in this way reduces banking transaction costs.

� European Style Options / No contrary instruction. The options on the S&P Europe index futures will only be exercised at expiration. Additionally, no contrary instructions will be allowed, ie. no in-the-money options can be abandoned, they will be automatically exercised and no out-of-the-money options can be exercised they will be automatically abandoned.

� Note Serial month options (Jan, Feb, Apr, May, Jul, Aug, Oct, Nov) are futures settled. Because no contrary option instructions are allowed any option holder, long or short, who wants to ensure that they do not take delivery of a Futures position must liquidate their option position prior to the close of trading on the Last Trading Day.

� Note 2 on Serial Options. Serial Month Options will be exercised to a special opening calculation of the index based on the opening quotations of the underlying equity components on the third Friday of the contract month. This 'In-the-Money' price will be available by approximately 3:00am (10:00am Central European Time) on expiration day, so option position holders will know by this time whether they have a resulting futures position. Resulting futures will be settled to a closing futures price at 10:30am (5:30pm Central European Time). On expiration day for Serial Options, Firms and Service Bureaus should be prepared to accept two different prices for the underlying future, one price to exercise and assign expiring options and the second price which will be the regular end of day closing settlement price to mark-to-market the futures. (Currently for all other CME products, the 'In-the- Money' price and the closing settlement price have been the same price and thus only one price was disseminated)

14. How will Performance Bonds be calculated and what collateral can be used to meet requirements?

A: Performance bond requirements for positions in these products will be calculated in SPAN� like those for any other product. These requirements will be denominated in Euro's. As with any such product, however, this requirement need not be met with Euro-denominated collateral, and may be met with any collateral normally accepted by CME.

15. Are test files available?

A: Yes. For details on obtaining the test files please refer to Notice CM#0135 on the Client Management pages. There will be details on obtaining sample GUS Routing and MQM TREX confirmation records and also a sample SPAN file containing the S&P Europe products.

16. Important Contacts

Product/Clearing Inquiries -- Colvin Lam, Clearing House: (312) 930-3090

Trading Inquiries -- Danielle Dycus, CME London Office: 44-20-7623-2550 or;

Rick Redding, Index Product Marketing, (312) 930-3373

Banking/Settlement Inquiries -- Tim Golomb, Clearing House: (312) 930-3162

Sample Files/Layouts -- Karen F. McCoy, Client Management: (312) 930-4524

Regulatory Status - Anne Glass, Audit Department: (312) 930-3140