Effective Monday, March 31, 2003, CME is implementing a minor change to the Position Adjustment function in the CLEARING 21^� Position application. The change will make the position adjustment function the same as an option exercise and do not exercise. Each position adjustment will be considered an Absolute Value instead of having a Cumulative effect.

EXAMPLE

Current Method:

Assume that a firm wants to lower their start-of-day ED June 2003 futures position from 500 to 450 by entering a position adjustment of -50.  Later, they discover that the amount should have been increased to 525. To correct the problem, the firm has to enter an adjustment of 75 lots to bring up their position to 525. In other words, firms are currently required to keep track of all adjustments made in CLEARING 21^�, in order to reach their desired final adjusted amount.

New Method:

Effective Monday, March 31^st, in the above example, the firm would just enter a +25 position adjustment.  This would replace the prior adjustment of -50 with an adjustment of +25�bringing their position up 25, instead of down 50.   In other words, starting Monday, March 31^st, if you enter more than one adjustment for the same contract, the system will assume that the last entry you submitted is the only adjustment to your start of day position.

There are no changes to the look, screens and menu options of CLEARING 21^� Position online system.

Please distribute to your back office position adjustment clerks immediately. If you have any questions about this new process, please contact Clearing House at (312) 207-2525, or contact Mahmoud Ajamia in Client Management at (majamia@cme.com).

Thank you.