IEM Prospectus: 2010 Florida U.S. Senate Vote Share Market

On Monday, June 7, 2010, at 11:00am CDT, the Iowa Electronic Market (IEM)
will open trading in a vote-share market based on the 2010 Florida U.S. Senate
Election.

The payoffs in this market will be based on the popular vote received by the
candidates in the 2010 Florida U.S. Senate election.

This document describes the market and should be viewed as a
supplement to the IEM Trader’s Manual. Except as specified in this prospectus,
trading rules for this market are the same as those specified in the Trader’s
Manual for the Iowa Electronic Market.

CONTRACTS
At market open, the financial contracts traded in this market are:

Code
Contract Description

Crist_VS
$1 times the vote share received by Charlie Crist in the 2010 Florida U.S. Senate election
provided that
he is not the Democratic or Republican nominee

FLDem_VS
$1 times the vote share received by the Democratic nominee in the
2010 Florida U.S. Senate election

FLRep_VS
$1 times the vote share received by the Republican nominee in the 2010 Florida U.S.
Senate election

FLOth_VS
$1 times the vote share received by all other candidates in the 2010 Florida U.S. Senate election
who are not included in another contract in this market

This is a vote share market. Contract payoffs are determined by the share of the popular vote
received by the associate candidate(s) in the 2010 Florida U.S. Senate election.

The contract Crist_VS will pay off $1 times the vote share received by Charlie Crist in the
2010 Florida U.S. Senate election
provided that Crist is not the Democratic or Republican nominee. If Crist is the Democratic or
Republican nominee, this contract will expire worthless after the primary in which he is nominated is complete.

The contract FLDem_VS will pay off $1 times the vote share received by the Democratic nominee in the 2010 Florida U.S. Senate election.

The contract FLRep_VS will pay off $1 times the vote share received by the Republican nominee in the 2010 Florida U.S. Senate election.

contract FLOth_VS will pay off $1 times the vote shares received by all other candidates in the 2010 Florida U.S. Senate election who are not associated with another contract in this market (that is, the Democratic nominee, the Repubican nominee, Charlie Crist, or any other named independent candidate).

Liquidation formulas can be viewed while you are logged into the IEM trading
system by clicking on the market name, FLSen10_VS, at the upper right hand corner of the market window.

OFFICIAL SOURCE FOR CONTRACT LIQUIDATION VALUES

The Florida Division of Elections website will be the official source used
to determine payoffs. Payoffs will be determined using the results listed
after, but closest to, 9:00pm on Thursday following the elections.
In the event that the primary or Senate election is delayed or
postponed, liquidation will take place in a timely fashion after the close of
polling sites for the popular vote. If the Florida Division of Elections website does
not post results by the Tuesday following the election, the results reported in the St. Petersburg Times
released closest to, but not after 9:00pm on Thursday following the election will be used to determine payoffs.

The judgment of the IEM Governors and Directors will be final in resolving
questions of interpretation and typographical or clerical errors.

CONTRACT SPIN-OFFS

The Directors of the IEM reserve the right to introduce new contracts to the market as spin-offs of
existing contracts. When a contract spin-off occurs, an original contract will
be replaced by two or more new contracts which subdivide the payoff space of the
original contract.
For instance, the contract FLDem_VS could be split into two
contracts, Xxx_VS and FLDem_VS, where Xxx_VS denotes the candidate named Xxx
becoming the Democratic nominee
and FODem_VS denotes an individual who is not
specifically named as a Democratic nominee in another contract at the time of the Florida Democratic
Primary Election becoming the official Democratic nominee.

No holder of the pre-spinoff contracts will be adversely affected. Traders
will receive the same number of each of the new contracts as they held in the
original, and the sum of the liquidation values of the new contracts will equal
the liquidation value of the original.

Outstanding limit orders to buy or sell the contract which is to be spun-off
will be canceled just prior to the spin-off.

Decisions to spin-off a contract will be announced at least two days in
advance of the spin-off. The new contract names, the specifications regarding
liquidation values and the timing of the spin-off will be included in the
announcement. This announcement will appear as an Announcement on your WebEx
login screen.

CONTRACT BUNDLES

Fixed-price bundles consisting of one share of each of the contracts in this
market can be purchased from or sold to the IEM system at any time. The price of
each bundle is $1.00. Because the percentages of the popular vote received by
each candidate must sum to one, the total payoff from holding a bundle
consisting of one of each contract until the market closes is $1.00.

To buy or sell fixed-price bundles from the IEM exchange, use the “Market Orders”
option from the trading Console. Select the option “FLSen10_VS (buy at fixed price)” from
the Market Orders list to buy bundles. Select the “FLSen10_VS (sell at fixed price)” option
to sell bundles. Purchases will be charged to your cash account and sales will be credited
to your cash account.

Bundles consisting of one share of each of the contracts in this market may
also be purchased and sold at current aggregate market prices rather than the
fixed price of $1.00. To buy a market bundle at current ASK prices, use the
“Market Order” option as above but select the option “FLSen10_VS (buy at market prices)”.
To sell a bundle at current BID prices, select the option “FLSen10_VS (sell at market prices)”.

MARKET CLOSING

This market will remain open until contract liquidation. Liquidation values
will be credited to the cash accounts of market participants.

MARKET ACCESS

All current and newly enrolled IEM traders with U.S. dollar denominated
accounts will automatically be given trading rights in the 2010 Florida U.S. Senate
Vote Share Market. Access to the market is achieved by choosing FLSen10_VS in the
“Market Selection” pull-down menu on either the Login-Welcome screen or at the
bottom of the Trading Screen.

Funds in a trader’s cash account are fungible across markets so new
investment deposits are not required. Additional investments up to the maximum
of $500 can be made at any time. New traders can open accounts using the
IEM OnLine Account Application page.
There is a one-time account registration
fee of $5.00, and investments are limited to the range of $5.00 to $500.

Requests to withdraw funds may be submitted at any time by completing the
IEM’s Online Withdrawal Request form or by completing and mailing the paper version of the request form. Additional
information about requesting withdrawals is available at the IEM website.