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transferee, in accordance with petitioner’s rule 243,1 must pay a
transfer fee.
Petitioner's rule 243 is separated into three sentences.
The first states that “No transfer of a membership may be
consummated unless the transferee pays to the Association a
transfer fee”.2 The transfer fee applies not only to sales of
memberships but also to transfers of memberships without
consideration, such as intrafamily transfers and intrafirm
transfers from the name of an owner firm’s qualified partner or
employee to another qualified individual in the firm.
Petitioner’s management regards the transfer fees as necessary
for applicants to understand and recognize that they are the
owners of the association.
The second sentence of rule 243 states that “The amount of
[the transfer fee] is established from time to time by the Board
of Directors.”3 The amount of the transfer fee depends on the
class of membership transferred. During the taxable years 1988
through 1990, the transfer fees set by petitioner's board of
1 Rule 243 is part of the bylaws of the CBOT, adopted and
amended by the owners of CBOT memberships.
2 In 1925, the CBOT members adopted the predecessor of rule
243, then known as rule 111. Rule 111 was amended in 1937 to
specify that the purchaser of a membership would pay the transfer
fee. Prior thereto, rule 111 specified that the seller would pay
the fee.
3 In 1970, rule 111 was amended to provide that the amount
of the transfer fee would be set by the board of directors.
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Last modified: May 25, 2011