CHAPTER 4
ENFORCEMENT OF RULES
400.

GENERAL PROVISIONS401.

THE CHIEF REGULATORY OFFICER

402.

BUSINESS CONDUCT COMMITTEE
402.A. Jurisdiction and General Provisions
402.B. Sanctions
402.C. Emergency Actions

403.

CLEARING HOUSE RISK COMMITTEE
403.A. Jurisdiction and General Provisions
403.B. Emergency Actions

404.

PIT COMMITTEE

405.

FLOOR CONDUCT COMMITTEE

406.

ISSUANCE OF CHARGES

407.

INVESTIGATION, CHARGING MEMORANDUM AND NOTICE OF CHARGES
407.A. Investigation File
407.B. Notice of Charges; Opportunity for Hearing
407.C. Answer to Charges
407.D. Amendment to Charging Memorandum; Non-Prosecution of Charges

408.

CONDUCT OF HEARINGS
408.A. General
408.B. Pre-Hearing
408.C. Offers of Settlement
408.D. Contested Hearings
408.E. Decisions
408.F. Default Proceedings

409.

SUMMARY PROCEEDINGS BEFORE THE FLOOR CONDUCT COMMITTEE
409.A. Jurisdiction
409.B. Selection of Panel
409.C. Conduct of Summary Proceedings
409.D. Appeals

410.

[RESERVED]

411.

APPEAL TO A HEARING PANEL OF THE BOARD OF DIRECTORS

412.

SUMMARY ACTIONS

413.

SUMMARY ACCESS DENIAL ACTIONS
413.A. Authority to Deny Access© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

413.B. Notice
413.C. Hearing
413.D. Duration of Access Denial
414.

INVESTIGATIONS BY OTHER SELF-REGULATORY ORGANIZATIONS

415.

INFORMATION-SHARING AGREEMENTS

416.

CONFLICTS OF INTEREST
416.A. Abstention Requirements
416.B. Disclosure of Relationship

417.

PROHIBITED COMMUNICATIONS
417.A. Ex Parte Communications
417.B. Communications with Panelists
417.C. Disclosure

418.

CONSENT TO EXCHANGE JURISDICTION

419.

CONTRACT MODIFICATION

420. - 431.

[RESERVED]

432.

GENERAL OFFENSES

433.

STRICT LIABILITY FOR THE ACTS OF AGENTS

434.

[RESERVED]

435.

EFFECT OF SUSPENSION OR EXPULSION

436.

[RESERVED]

437.

NOTICE OF DISCIPLINE

438.

[RESERVED]

439.

MEMBER’S INDEMNIFICATION LIABILITY

440.

CLAIMS BY MEMBERS

441.

COMMUNICATIONS WITH THE PUBLIC AND PROMOTIONAL MATERIAL

442.

NOTIFICATION OF SIGNIFICANT EVENTS

443.

[RESERVED]

444.

PAYMENTS OF DISCIPLINARY FINES, DISGORGEMENT ORDERS ANDRESTITUTION© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

Chapter 4
Enforcement of Rules
400.

GENERAL PROVISIONSThe Board has adopted Rules, and from time to time adopts amendments and supplements to such
Rules, to promote a free and open market on the Exchange, to maintain appropriate business conduct
and to provide protection to the public in its dealings with the Exchange and its Members. The Board
has created committees to which it has delegated responsibility for the investigation, hearing andimposition of penalties for violations of Exchange Rules. The Board has also delegated responsibility
for the investigation and imposition of penalties for violations of certain Exchange Rules to Exchange
staff as set forth in the Rules. The delegation of such responsibility and authority shall in no way limit
the authority of the Board with respect to all Rule violations.
For purposes of Chapter 4, the term "Member" shall mean: 1) members and clearing members of the
Exchange, including retired members with floor access privileges and individuals and entities describedin Rule 106; 2) associated persons ("APs") and affiliates of clearing members and member firms of the
Exchange; 3) guaranteed introducing brokers of clearing members and member firms of the Exchange
and their APs; 4) Exchange permit holders and any Person or entity that has been granted cross exchange trading privileges; 5) employees, authorized representatives, contractors, and agents of a
Member in regard to the Exchange related activities of such individuals or entities; 6) regular firms; 7)
any Person subject to the jurisdiction of the Exchange pursuant to Rule 418; 8) individuals and entities
that have agreed in writing or via electronic signature to comply with the Rules of the Exchange; and
9) CBOT members and other individuals who have access to the Trading Floor.
Members are deemed to know, consent to and be bound by all Exchange Rules. Former Members
shall be subject to the continuing jurisdiction of the Exchange, including, without limitation, theapplication of Rule 432.L., with respect to any conduct that occurred while a Member.
For the purpose of Chapter 4, “Respective Department” shall mean each of the Market Regulation
Department, the Financial and Regulatory Surveillance Department or the Clearing House and“Investigation” shall mean any inquiry into a potential rule violation including, but not limited to, inquires
arising out of routine surveillance, notifications or examinations.

401.

THE CHIEF REGULATORY OFFICER
It shall be the duty of the Chief Regulatory Officer to enforce Exchange Rules, and they shall haveavailable to them at all times the resources of the Market Regulation Department, the Financial andRegulatory Surveillance Department and such other Exchange resources and departments as may benecessary to conduct investigations of potential or alleged Rule violations and market conditions. The
Chief Regulatory Officer shall have the authority to inspect the books and records of all parties subject
to the jurisdiction of the Exchange pursuant to Rule 418 and the authority to require any such party toappear before the Chief Regulatory Officer and produce their or its books and records and answer
questions regarding alleged violations of Exchange Rules, at the time, place and in the manner the
Chief Regulatory Officer designates. The Chief Regulatory Officer shall be authorized to issue charges
at the request of the Respective Department pursuant to the provisions of Rule 406. The Chief
Regulatory Officer may also delegate their authority to staff of the Market Regulation Department.

402.

BUSINESS CONDUCT COMMITTEE
402.A. Jurisdiction and General Provisions
The Business Conduct Committee (“BCC”) shall have: 1) jurisdiction over any party subject to thejurisdiction of the Exchange, including any Member, with respect to matters relating to businessconduct, trading practices, sales practices, trading ethics and market manipulations or other actions
that threaten the integrity of the market; (2) jurisdiction over any party subject to the jurisdiction of the
Exchange, including Members, with respect to matters relating to the clearing of transactions or products
at the Clearing House, the requirements and obligations of membership in the Clearing House or otheractions that threaten the integrity of the Exchange or Clearing House; 3) the authority, pursuant to Rule
402.C., to take emergency actions; 4) the authority, pursuant to Rule 413.B., to conduct hearings on© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

denials of access pursuant to Rule 413.A., 5) the authority to conduct hearings, proceedings andappeals on all matters over which it has jurisdiction; and 6) the authority to make findings on Ruleviolations against any party subject to the jurisdiction of the Exchange, including any Member.
With respect to subject matter set forth in clause (1) above, the BCC shall act through a panel(“Panel”,“BCC Panel”, or “Hearing Panel”)) comprised of a Hearing Panel Chair, two exchange
members or employees of member firms and two non-members. At least one of the exchange
members or employees of member firms must be from the designated contract market where the caseoriginated. A quorum of a Panel shall consist of a majority of the panel, but must include at least the
Hearing Panel Chair, one exchange member or employee of a member firm from the designatedcontract market where the case originated and one non-member.
With respect to subject matter set forth in clause (2) above, the BCC shall act through a BCC Panelcomprised of at least one Hearing Panel Chair that is not an employee of a clearing member, twoemployees of clearing member firms and two non-members. A quorum of a BCC Panel shall consist ofa majority of the panel, but must include at least the Hearing Panel Chair, one employee of a clearing
member firm and one non-member.
The BCC Panel shall consist of panelists who possess the requisite level of industry knowledge andexperience and with sufficiently diverse interests so as to ensure fairness in the hearing or proceeding.
No Person shall serve on the BCC unless they have agreed in writing that they will not publish, divulge,
or make known in any manner, any facts or information regarding the business of any Person or any
other information which may come to their attention in their official capacity as a member of the BCC,
except when reporting to the Board or to a committee concerned with such information or to the Legal
Department or Market Regulation Department, when requested by the CFTC or other governmental
agency or when compelled to testify in any judicial or administrative proceeding.
All information, records, materials and documents provided to the BCC and all deliberations, testimony,
information, records, materials and documents related thereto shall be treated as non -public andconfidential and shall not be disclosed, except as necessary to further an Exchange investigation or as
required by law.
402.B. Sanctions
If the Panel finds that a party, including a Member, has violated a Rule, the Panel may take one ormore of the following actions:
1. Order the party to cease and desist from the conduct found to be in violation of these Rules orfrom conduct which would violate the rules of any Designated Contract Market, Derivatives
Clearing Organization, or Swap Execution Facility owned or controlled by CME Group, or the
Commodity Exchange Act;
2. Order a party to liquidate such portion of the open contracts in the party’s proprietary or customers’
accounts, or both, as the Panel deems appropriate to ensure the integrity of Exchange contracts
or to ensure an orderly and liquid market;
3. Order a party or its customer to deposit such additional performance bonds with the Clearing
House as the Panel deems appropriate to protect the integrity of open contracts;
4. Prescribe such additional capital or other financial requirements as it deems appropriate;
5. Restrict the ability of the party to have a business affiliation with, be employed by or have a financial
or beneficial interest in a Member or broker association;
6. Restrict, suspend or terminate the party’s 1) access to the Trading Floor, 2) direct and/or indirectaccess to any Designated Contract Market, Derivatives Clearing Organization, or Swap Execution
Facility owned or controlled by CME Group, or 3) right to supervise the entry of any orders byothers into CFTC-regulated entities owned or controlled by CME Group;
7. Restrict the party’s ability to trade, place, enter, accept or solicit orders in any or all products of
any Designated Contract Market, Derivatives Clearing Organization, or Swap Execution Facility
owned or controlled by CME Group;
8. Suspend any or all of the Member’s privileges of membership as defined in Rule 121;
9. Expel the Member from membership in any Designated Contract Market, Derivatives Clearing
Organization, or Swap Execution Facility owned or controlled by CME Group;
10. Impose a fine upon the party not to exceed $5,000,000 per violation;
11. Order a party to disgorge any monetary benefit resulting from a violation of an Exchange Rule

© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

whether by that party or another party. For purposes of this provision, benefit includes, without
limitation, profit, whether realized or unrealized, and avoided losses;
12. Prescribe limitations on positions of the party as may be appropriate, including issuing an orderthat no Clearing Member accept new positions on behalf of any such party;
13. Impose advertising restrictions upon the Member pursuant to these Rules;
14. Order a party to make restitution to the account of anyone damaged by the conduct, or to theClearing Member who has previously made restitution to the account of such party;
15. Order a party or its legal counsel or other representative to pay out of pocket expenses incurredby the exchange in connection with the matter if such party, counsel or representative engaged in
vexatious, frivolous or bad faith conduct during the course of an Investigation or enforcement
proceeding;
16. Revoke the regularity status of a regular firm;
17. Order such action as is necessary to prevent a threat to the contract or violation of the Commodity
Exchange Act or Exchange Rules; and/or
18. With the approval of the Market Regulation Department and the party, order any other sanction orundertaking to address or deter the underlying violative conduct pursuant to a supported offer ofsettlement.
When determining whether to impose any of the sanctions listed above, the Panel may consider any
factors determined by the Panel to be relevant in the context of a particular case, including any of thefactors described in the “Sanctioning Guidance to Self-Regulatory Organizations” in the CFTC Policy
Statement Relating to the Commission’s Authority to Impose Civil Money Penalties and Futures Self Regulatory Organizations’ Authority to Impose Sanctions: Penalty Guidelines (1994).
402.C. Emergency Actions
1.

2.

The BCC is authorized to determine whether an emergency exists and whether emergency action
is warranted. The following events and/or conditions may constitute emergencies:a. Any actual, attempted, or threatened market manipulation;b. Any actual, attempted, or threatened corner, squeeze, congestion, or undue concentration of
positions;c. Any action taken or considered by the United States or any foreign government or any stateor local government body, any other contract market, board of trade, or any other exchangeor trade association (foreign or domestic), which may have an impact on trading on the
Exchange;d. The actual or threatened bankruptcy or insolvency of any Member or the imposition of any
injunction or other restraint by any government agency, self regulatory organization, court or
arbitrator upon a Member which may affect the ability of that Member to perform on its
contracts;
e. Any circumstance in which it appears that a Member or any other Person or entity has failed
to perform contracts or is in such financial or operational condition or is conducting businessin such a manner that such Person or entity cannot be permitted to continue in businesswithout jeopardizing the safety of customer funds, Members, or the Exchange; and/or
f. Any other circumstance which may have a severe, adverse effect upon the functioning of the
Exchange, except that declarations of Force Majeure and actions taken with respect to suchdeclarations will be governed by the provisions of Rule 701.
In the event that the BCC determines, in the good faith exercise of its sole discretion, that an
emergency exists, it may take any of the following emergency actions or any other action that may
be appropriate to respond to the emergency:a. Suspend, curtail or terminate trading in any or all contracts;
b. Restrict, suspend or terminate a party’s 1) access to the Trading Floor, 2) direct and/or indirectaccess to any Designated Contract Market, Derivatives Clearing Organization, or Swap
Execution Facility owned or controlled by CME Group, or 3) right to supervise the entry of any
orders by others into CFTC-regulated entities owned or controlled by CME Group;c. Limit trading to liquidation of contracts only;
d. Impose or modify position limits and/or order liquidation of all or a portion of a party’s account;e. Order liquidation or transfer of positions as to which the holder is unable or unwilling to make© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

3.

403.

or take delivery;f. Confine trading to a specific price range;
g. Modify price limits;h. Modify the trading days or hours;
i. Modify conditions of delivery;
j. Establish the settlement price at which contracts are to be liquidated;k. Require additional performance bond to be deposited with the Clearing House; and/or
l. Order any other action or undertaking to address or relieve the emergency.
All actions taken pursuant to subsections 1 and 2 above shall be by a majority vote of the Panelmembers present. The Market Regulation Department shall give appropriate notice of such action.
As soon as practicable, the Board and the CFTC shall be notified of the emergency action inaccordance with CFTC regulations. Nothing in this section shall in any way limit the authority of
the Board, other committees, or other appropriate officials to act in an emergency situation as
defined by these Rules.

CLEARING HOUSE RISK COMMITTEE
403.A. Jurisdiction and General Provisions
The Clearing House Risk Committee (or any subcommittee thereof) (collectively, “CHRC”), shall review
each applicant’s qualifications for status as a Clearing Member and refer each such application for
Clearing Membership along with the CHRC’s feedback to the Clearing House Oversight Committee forapproval. The CHRC may adopt regulations regarding qualifications for admission to membership in the
Clearing House, which regulations, when approved by the Board, shall have the same effect as Rules of
the Exchange. The CHRC shall review any changes to the Clearing Membership requirements and new
types of clearing membership and shall approve all substantive changes and recommend them to theClearing House Oversight Committee for its approval.
In addition to the responsibilities set forth in these Rules, the CHRC shall have the composition,
responsibilities and other characteristics as set forth in its Charter.
If the CHRC determines that a Clearing Member is in a financial condition which jeopardizes or may
jeopardize the integrity of the Exchange, the CHRC may, by majority vote:
1. Order the Clearing Member or its customers to deposit such additional performance bond with theClearing House as deemed appropriate to protect the integrity of open contracts;
2. Prescribe such additional capital or other financial requirements as it deems appropriate;
3. Impose position limits on Clearing Members based on their regulatory capital and such othercriteria as it deems appropriate;
4. Suspend a Clearing Member, subject to approval of any two of the following individuals: the Chief
Executive Officer, the Global Head of Clearing & Post-Trade Services, the Chairman of the Board,
Chairman of the CHRC, or the Chairman of the Clearing House Oversight Committee;
5. Order the Clearing Member to cease and desist from the conduct found to be contrary to the bestinterests of the Exchange; and/or
6. Any other circumstance which may have a severe, adverse effect upon the functioning of the
Exchange, except that declarations of Force Majeure and actions taken with respect to suchdeclarations will be governed by the provisions of Rule 701.
No Person shall serve on the CHRC unless they have agreed in writing that they will not publish,
divulge, or make known in any manner, any facts or information regarding the business of any Personor entity or any other information which may come to their attention in their official capacity as a memberof the CHRC, except when reporting to the Board or to a committee concerned with such informationor to the Legal Department, Financial and Regulatory Surveillance Department or Market Regulation
Department, when requested by the CFTC or other governmental agency or when compelled to testify
in any judicial or administrative proceeding.
All information and documents provided to the CHRC and all deliberations and documents related
thereto shall be treated as non-public and confidential and shall not be disclosed, except as necessary
to further an Exchange investigation or as required by law.

© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

403.B. Emergency Actions
1. The CHRC is authorized to determine whether an emergency exists and whether emergency action
is warranted. The following events and/or conditions may constitute emergencies:a. Any circumstances which may materially affect the performance of contracts traded on the
Exchange, including failure of the payment system;b. Any action taken by the United States or any foreign government or any state or local
government body, any other contract market, board of trade, or any other exchange or tradeassociation (foreign or domestic), which may have a direct impact on trading on the Exchange;c. The actual or threatened bankruptcy or insolvency of any Member or the imposition of any
injunction or other restraint by any government agency, court or arbitrator upon a Member ofthe Exchange which may affect the ability of that Member to perform on its contracts;
d. Any circumstance in which it appears that a Member or any other Person or entity has failed
to perform contracts, is insolvent, or is in such financial or operational condition or isconducting business in such a manner that such Person or entity cannot be permitted tocontinue in business without jeopardizing the safety of customer funds, Members, and/or the
Exchange; and/or
e. Any other circumstance which may have a severe, adverse effect upon the functioning of the
Exchange, except that declarations of Force Majeure and actions taken with respect to suchdeclarations will be governed by the provisions of Rule 701.
2. In the event that the CHRC determines, in the good faith exercise of its sole discretion, that an
emergency exists, it may take any of the following emergency actions or any other action that may
be appropriate to respond to the emergency:
a. Order the Clearing Member or its customer to deposit such additional performance bond with
the Clearing House as deemed appropriate to protect the integrity of open contracts;b. Prescribe such additional capital requirements as it deems appropriate;c. Prescribe such position limitations as it deems appropriate;d. Order special or advance performance bond or funds to be deposited with the Clearing House
from Members or from longs, shorts or both;e. Order such performance bond changes as it deems appropriate; and/or
f. Order any other action or undertaking to address or relieve the emergency.
All actions taken pursuant to this subsection shall be by majority vote of the committee memberspresent. A Member affected by the action taken shall be notified in writing of such action. As soon aspracticable, the Board and the CFTC shall be promptly notified of the emergency action in accordancewith CFTC regulations. Nothing in this section shall in any way limit the authority of the Board, othercommittees, or other appropriate officials to act in an emergency situation as defined by these Rules.

404.

PIT COMMITTEE
The Pit Committee shall have the authority to: 1) participate in the determination of opening and closing
ranges in accordance with Rule 546; 2) oversee and enforce changes in prices in accordance with Rule528 and the Quotation Change Procedures set forth in the Interpretations & Special Notices Section ofChapter 5; 3) resolve pit space disputes; 4) remove unauthorized Persons from the pit; and 5) resolve,
by immediate action, all grievances arising from price infractions pursuant to Rule 514 during pit
trading.
A Pit Committee member shall not exercise his authority if he or any Person, firm, or broker association
with which he is affiliated has a personal, financial, or other direct interest in the matter underconsideration. A Pit Committee member shall be deemed to have a financial interest if the decision is
likely to have an immediate financial impact on a transaction for his account or an account in which hehas an interest or if the decision is likely to impact on liability for filling an order for which he or a Personwith whom he has a financial or business relationship was responsible.

405.

FLOOR CONDUCT COMMITTEEThe Floor Conduct Committee shall be responsible for resolving pit space disputes that are not resolvedby the Pit Committee. The committee shall conduct summary proceedings for alleged violations of© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

Rule 514. Floor Conduct Committee members shall participate in the resolution of quotation change
requests pursuant to the Quotation Change Procedures set forth in the Interpretations & Special
Notices Section of Chapter 5. The Floor Conduct Committee shall have jurisdiction to conduct
summary proceedings for violations of, and assess penalties in accordance with, Exchange Rules. The
procedures contained in Rule 409 shall govern summary proceedings.

406.

ISSUANCE OF CHARGESThe Chief Regulatory Officer shall receive and review investigation reports, including examination andsurveillance reports and other notices of non-compliance from each of the Respective Departments when
the Respective Department has reasonable cause to believe a violation of an Exchange Rule has
occurred warranting disciplinary action.
The Respective Department is not required to provide a respondent notice of its intent to request theChief Regulatory Officer to issue charges.
No person shall have the right to appear before the Chief Regulatory Officer or make any written
submission on their behalf.
The Chief Regulatory Officer shall take one of the following actions:
A. If the Chief Regulatory Officer determines that a reasonable basis exists for finding that a violationof an Exchange Rule may have occurred which warrants disciplinary action, the Chief Regulatory
Officer shall issue appropriate charges.
B. If the Chief Regulatory Officer determines that no reasonable basis exists for finding that a
violation of an Exchange Rule may have occurred, the Chief Regulatory Officer shall direct thatno further action be taken.
C. Direct that the Respective Department investigate the matter further.
The Chief Regulatory Officer shall direct the Market Regulation Department to give notice of thecharges to the respondent in accordance with Rule 407.B.
All information, records, materials and documents provided to the Chief Regulatory Officer and all
information, records, materials and documents related thereto shall be treated as non -public andconfidential and shall not be disclosed, except as necessary to further an Investigation or as requiredby law.

407.

INVESTIGATION, CHARGING MEMORANDUM AND NOTICE OF CHARGES
Each Respective Department shall investigate potential or alleged Rule violations. Investigations,investigation reports, risk-based examination reports and responses, work papers, correspondence
and all information and documents obtained during the course of an investigation shall be treated as
non-public and confidential and shall not be disclosed by any party, except as necessary to further an
Exchange investigation or as required by law. At the request of the Respective Department, the Market
Regulation Department is authorized to take recorded interviews pursuant to an Exchange
Investigation. Parties and witnesses being interviewed shall have the right to representation, at theirown cost, by legal counsel or anyone other than a member of any Exchange disciplinary committee, amember of the Board, an employee of CME Group or a Person related to the investigation. The failure
to appear at a scheduled interview or to answer all of the questions posed during that interview may,in the discretion of the BCC Panel Chair, result in the Person being prohibited from testifying in a
subsequent hearing on the matter.
Upon conclusion of an investigation, the Respective Department may issue a warning letter to any
party as a result of the investigation. Such letter shall not constitute either the finding of a Ruleviolation or a penalty.
407.A. Investigation File
Each of the Respective Departments shall maintain a file once an investigation is initiated. The file shall
include any materials in the possession of the Respective Department that are relevant to the conduct
being investigated.
407.B. Notice of Charges; Opportunity for Hearing
Where the Chief Regulatory Officer has issued charges for an alleged Rule violation, the Market
Regulation Department shall issue a charging memorandum to the respondent with a brief statementof factual allegations that identifies the charged Rule violation(s). In addition, the Market Re gulation
Department will send a notice of charges to the respondent. The notice of charges shall set forth the© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

Rule(s) alleged to have been violated, and shall advise the respondent regarding the submission of a
responsive answer to each charge in accordance with Rule 407.C. Further, the notice of charges shalladvise the respondent that the matter will be heard by a BCC Panel and of the time and place for the
hearing, if known. The respondent shall also be advised of their right to appear personally at thehearing and of their right to be represented, at their own cost, by legal counsel or a member of the
Exchange, other than a member of any exchange disciplinary committee, a member of the Board, an
employee of CME Group or a Person related to the investigation.
A respondent may waive their right to a hearing at any time after receipt of the notice of charges. A
respondent who elects to waive their right to a hearing on the charges will be notified of the date on
which the BCC Panel will render its decision. Upon a finding of guilt on any charge, the BCC Panel
will promptly determine what penalties, if any, are to be imposed and their effective date. A respondent
who has waived their right to a hearing and/or admitted the charges against them will be advised of
their right to participate in the hearing solely with respect to the penalty.
407.C. Answer to Charges
The respondent shall have 21 days after notice to submit a written answer to the charges. The Market
Regulation Department and the respondent may agree in writing to an extension of the period of time
to submit an answer to such charges. Absent such agreement, upon a showing of good cause, theBCC Hearing Panel Chair may extend the period of time in which the respondent is required to submit
their answer. The answer must state that the respondent admits, denies, or lacks sufficient knowledge
to admit or deny each charge. A statement of lack of sufficient knowledge shall be deemed a denial.
If a respondent fails to answer the charges in accordance with this Rule, the Market Regulation
Department may seek a default finding and sanctions in accordance with Rule 408.F.
407.D. Amendment to Charging Memorandum; Non-Prosecution of Charges
The issuance of charges shall not prevent the Respective Department from continuing to investigate
the activity underlying the charges or investigating or examining for other potential violations by the
respondent.
The Market Regulation Department reserves the right to modify the charging
memorandum. Notwithstanding the prior sentence, no charges may be added to the charging
memorandum absent the consent of the Chief Regulatory Officer. The Respondent shall have 21 days
from notice of an amended charging memorandum to file an answer to any new or modified charges in
the amended memorandum.
The Market Regulation Department may, in its sole discretion, decline to prosecute any one or more of
the charges previously issued by the Chief Regulatory Officer. If the Market Regulation Department
declines to prosecute any previously issued charge after the Respondent has received a Notice ofCharges, the Market Regulation Department shall provide notice to the Respondent of such decision.
Further the Market Regulation Department may, in its sole discretion, resolve a previously issued
charge through issuance of a letter of warning.

408.

CONDUCT OF HEARINGS
408.A. General
All disciplinary proceedings conducted before a panel of the BCC or before a hearing panel of theBoard of Directors (each a “Panel” or “Hearing Panel”) shall be conducted in accordance with thefollowing procedures.
Hearings shall be fair. The respondent shall have the right to appear personally at the hearing and to
be represented at their own cost by legal counsel or anyone other than a member of any exchange
disciplinary committee, a member of the Board, an employee of CME Group or a Person related tothe investigation. The Panel or the Hearing Panel Chair shall have the power to compel any party
subject to its jurisdiction, including any Member, to attend, testify and/or produce evidence inconnection with the hearing. The Market Regulation Department shall make reasonable efforts to secure
the presence of all other persons called as witnesses whose testimony would be relevant.
408.B. Pre-Hearing
1. Procedural Matters
Prior to the hearing, but subsequent to the timely filing of an answer, a party charged with aviolation of an Exchange rule may examine all evidence in the investigation file that is relevant tothe violation(s) charged and all evidence which is to be relied upon by the Market Regulation
Department during the hearing. However, the respondent shall not be entitled to examine© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

2.

3.

protected attorney work product, attorney-client communications or investigative work product,
including, but not limited to, the investigation report, work papers, financial and reporting
surveillance records, internal communications and any exception reports. The respondent may
obtain a copy of all such evidence, and any copying costs shall be the sole responsibility of the
respondent. The Market Regulation Department is not required to produce or obtain any
documents that are not in its possession. A respondent who seeks documents that are not in thepossession of the Market Regulation Department may request the documents from the custodianof such documents. Upon a showing of good cause, the respondent may petition the Hearing
Panel Chair, in writing, for an order compelling the production of documents by a custodian,
provided that the custodian is subject to the jurisdiction of the Exchange, the custodian has
refused voluntarily to provide the documents and the documents are relevant to the charges. The
Market Regulation Department or the custodian may object, in whole or in part, to any such
petition.
Appointment of a Panel for a Contested Hearing
The Market Regulation Department shall, in writing, notify the respondent of the names of theindividuals originally appointed to the Panel for a contested hearing at least 28 days in advanceof the originally scheduled hearing date. Within seven days of such notice, parties to the hearing
may request the Hearing Panel Chair to strike any panelist for good cause shown. The Hearing
Panel Chair may then excuse such panelist and direct that an alternate panelist be appointed. In
the sole discretion of the Panel Chair, the hearing may be conducted with less than a full Panelprovided a quorum exists.
In the event any panelist is added, the Market Regulation Department shall provide all parties
reasonable notice regarding the new panelist. The addition of a new panelist will not delay thescheduled hearing date unless the panelist is added less than five days in advance of thescheduled hearing and a party can demonstrate good cause for the requested delay.
Notwithstanding the foregoing, any party to a contested hearing may, following the filing of ananswer to the charges, request the appointment of a Hearing Panel Chair prior to the time period
set forth above for the purpose of resolving pre-trial disputes. The matters that may be raised
before the Hearing Panel Chair include, without limitation:a. scope and timing of fact discovery;b. scope and timing of expert discovery;c. allocation of discovery costs;
d. use and disclosure of demonstratives;e. requests to alter timing requirements set forth in these Rules; orf. scheduling of the contested hearing
The Hearing Panel Chair may hold a pre-trial conference to address these issues or may, in theirdiscretion, resolve them on written submissions by the parties.
The Hearing Panel Chair shall have the authority to issue non-monetary sanctions against any
party or legal counsel or other representative who fails to comply with an order of the Chair or who
engages in vexatious, frivolous or bad faith conduct. Such sanctions may include drawing adverse
inferences or excluding legal argument, evidence or other submissions. Sanctions may not include
entry of a default judgment. The Hearing Panel Chair must allow both parties to make written
submissions on the issue prior to imposing any sanction.
Submission of Documents and Identification of Witnesses
At least 28 days in advance of a contested hearing, the respondent shall submit to the Market
Regulation Department, and the Market Regulation Department shall submit to the respondent,
copies of all books, documents, records and other tangible evidence, which each plans to rely onor refer to during its direct case at the hearing, and provide a list of the names and titles of
witnesses that each plans to call on its direct case at the hearing. The Panel may refuse toconsider any books, records, documents or other tangible evidence which was not made available
to, or witnesses whose names and titles were not submitted to, the other party pursuant to thissection.
To the extent Market Regulation or the respondent intends to call any expert witness at the hearing
then such party shall provide to the other, 28 days prior to the date of the hearing, a summary of
the expert’s opinions to be offered at the hearing and the basis and/or methodology underlying
such opinions. In addition, the expert’s credentials (e.g., a curriculum vitae) and all documents orother materials on which the expert relied in forming their opinions shall be produced to the otherparty at the same time. For purposes of this provision, staff in the Market Regulation Department© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

or other CME Group employee shall not be considered experts. The Panel may decline to consider
any expert testimony beyond the scope of the submitted summary.
4. Additional Discovery
Absent an order of the Hearing Panel Chair or consent of the parties, no discovery beyond thatset forth in Rules 407 and 408 shall be permitted.
5. Motions
The Hearing Panel Chair shall have the authority to decide all procedural and evidentiary mattersand all pre-hearing motions, and the Hearing Panel Chair’s decision shall be final.
Notwithstanding the preceding sentence, no motions to dismiss any or all of the charges or any
other dispositive motion may be filed.
Any pre-hearing motion must be submitted in writing to the parties and BCC’s counsel at least 21
days in advance of the scheduled hearing. The opposing party shall submit a response, if any,
within seven days of receipt of any pre-hearing motion. No reply papers are permitted. The
Hearing Panel Chair, in their sole discretion, may hold oral argument on any motion or may decide
any motion on the written submissions of the parties.
408.C. Offers of Settlement
A respondent that is the subject of an Investigation which has been referred to the Market Regulation
Department Enforcement Group for prosecution by a Respective Department as provided in this
Chapter, may submit for consideration by the Panel a written offer of settlement in disposition of suchmatter. Such submission may be made at any time prior to the Panel commencing deliberations at acontested hearing of the case. No offer of settlement may be submitted by a respondent to the Panelunless the Market Regulation Department supports the offer.
A respondent may submit an offer of settlement without admitting or denying the Rule violations orfactual findings upon which the penalty is based; provided, however, that an offer must include a
consent to entry of findings by the Panel regarding the conduct and Rule violations at issue, to thepenalty to be imposed and to the effective date of the penalty.
The respondent’s written offer of settlement and the Market Regulation Department’s supportingstatement shall be submitted to the Panel for consideration.
The Market Regulation Department shall, in writing, notify the respondent of the names of theindividuals originally appointed to the Panel to consider respondent’s settlement offer at least sevendays in advance of the originally scheduled hearing date. Parties to the hearing may request the
Hearing Panel Chair to strike any panelist for good cause shown. The Hearing Panel Chair may thenexcuse such panelist and direct that an alternate panelist be appointed. In the sole discretion of the
Panel Chair, the hearing may be conducted with less than a full Panel provided a quorum exists.
In the event any panelist is added, the Market Regulation Department shall provide all parties
reasonable notice regarding the new panelist. The addition of a new panelist will not delay thescheduled hearing date unless the panelist is added less than five days in advance of the scheduledhearing and a party can demonstrate good cause for the requested delay.
A respondent may withdraw an offer of settlement at any time prior to the start of the hearing on the
proposed settlement before the Panel. If the Panel accepts the offer, a written decision setting forth
the Panel’s findings and sanction shall be issued, and written notice of the decision shall be given to
the respondent. If the offer of settlement is accepted, the BCC’s decision shall be final on the date it
is signed by the Hearing Panel Chair and, unless otherwise ordered by the Panel, it shall become
effective two business days after it becomes final.
If the Panel rejects an offer of settlement, the respondent will be notified of the rejection and it will bedeemed withdrawn. If an offer is withdrawn or rejected by the Panel, the respondent shall not be
deemed to have made any admissions by reason of the offer and shall not otherwise be prejudiced byhaving submitted the offer. No statements made or documents exchanged by the parties solely in thecontext of a withdrawn or rejected offer of settlement or during any settlement negotiations shall be
admissible in any contested hearing.
Any subsequent offers of settlement shall be heard by the same Panel; however, alternate panelists
may be appointed in the event of scheduling conflicts. Any contested hearing following an offer ofsettlement not accepted by the Panel will be heard by a new Panel.
In submitting an offer of settlement, the respondent waives their right to a contested hearing and to
appeal the Panel’s decision if the offer is accepted; the respondent also waives any claim of bias or
prejudgment on the part of the Panel.

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408.D. Contested Hearings
The Market Regulation Department shall be a party to the contested hearing and shall present
evidence in support of the charged Rule violation(s). The Market Regulation Department and themembers of the Panel may question any witness and examine all the evidence stipulated to orpresented at the hearing. The respondent shall be entitled to appear personally, testify, produce
evidence, call witnesses on their behalf and cross-examine any witness. The Hearing Panel Chair
may exclude any witness, other than a party or other essential Person, during the opening statements
or during the testimony of any other witness.
The Market Regulation Department bears the burden of establishing the basis for a finding of guilt on
any charge by a preponderance of the evidence. Formal rules of evidence shall not apply. The parties
may offer such evidence as is relevant to the charges at issue. The Hearing Panel Chair shalldetermine the admissibility of evidence offered and may exclude evidence that they deem irrelevant
or cumulative. The Hearing Panel Chair has the discretion to vary the structure and presentation ofevidence to make the hearing as efficient as possible. The parties may submit stipulated facts in orderto make the hearing more efficient.
The hearing may proceed in the absence of a respondent who, after due notice, fails to appear.
However, the failure to appear is not a default if the respondent has filed a written answer denying thecharges issued. Accordingly, Market Regulation still bears the burden of proof and must present
evidence to meet that burden.
All testimony and documents produced in connection with a disciplinary hearing shall be deemed non public and confidential and shall not be disclosed except in connection with proceedings resulting fromthat hearing or as required by law. A recording or other substantially verbatim record of the hearing
shall be made by Market Regulation or a court reporter hired by Market Regulation and become partof the record of the proceeding. If a respondent requests a transcript, the respondent shall be solely
responsible for the cost of producing the transcript. No other means of recording the proceedings will
be permitted absent written agreement of the parties or pursuant to an order of the Hearing Panel
Chair.
A majority vote of the Panel is required for a finding of guilt. A respondent that is found not guilty shallnot again be charged with or tried for the same underlying conduct. In the event of a finding of guilt,
the Panel, in a separate sanctioning phase, must allow both parties to present arguments andinformation regarding the appropriate nature and amount of a sanction prior to determining suchsanction. In the absence of exceptional circumstances, as determined by the Hearing Panel Chair,
the sanctioning phase shall proceed immediately upon the conclusion of the evidence anddetermination of the committee.
The BCC’s decision shall be final on the date it is signed by the Hearing Panel Chair. The BCC’s
decision shall become the final decision of the Exchange after the appeal period has lapsed.
408.E. Decisions
Promptly following a hearing, BCC Panel shall issue to the Market Regulation Department and torespondent a written decision of the Panel’s findings, which shall include: the notice of charges (or asummary thereof); the answer to the charges, if any (or a summary thereof); a brief summary of theevidence produced at the hearing; a statement of findings and reasoned conclusions with respect toeach charge, including the specific Rules which the respondent is found to have violated; a declarationof any penalty imposed and the effective date of such penalty; and the availability, if any, of an appealof the decision within the Exchange or to the Commodity Futures Trading Commission.
408.F. Default Proceedings
If a respondent fails to submit a written answer to the charges pursuant to Rule 407.C., or answers but
fails to deny the charges, Market Regulation may serve the respondent with a motion for default and arequest for sanctions. The motion for default shall request that a BCC Panel Chair find that the respondentis deemed to have admitted the charges, and the request for sanctions shall request that a BCC Panel
impose sanctions on the admitted charges. A copy of the motion for default and request for sanctions
shall also be filed with the CME Group Legal Department, which serves as counsel to the BCC Panel.
The Respondent shall have 21 days from notice to respond to the motion for default and request for
sanctions. Thereafter, the respondent will be provided at least seven days’ notice of the date of a hearing
to consider the motion for default and request for sanctions. The respondent shall have the right to be
represented at the hearing at their own cost by legal counsel or anyone other than a member of adisciplinary committee, a member of the Board, an employee of CME Group or a Person related to theInvestigation.

© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

At the hearing, based on the written filings of the parties, except where the BCC Panel Chair determinesthat oral argument is necessary, the BCC Panel Chair will first decide if the respondent has failed toanswer the charges in accordance with Rule 407.C., and, if so, the respondent shall be deemed to haveadmitted the charges. If the BCC Panel Chair finds that the respondent has admitted the charges, therespondent will be deemed to have waived their right to a hearing on the merits of the charges, the BCC
Panel shall find that the violations alleged in the charging memorandum have been committed, and the
BCC Panel will then determine the sanctions, if any, to be imposed, after permitting both parties to present
arguments and information regarding the appropriate nature and amount of any such sanctions.
If an answer contains both an admission to one or more charges and a denial of one or more charges,
the BCC Panel will consider the penalties which may be imposed for the admitted charges at the sametime that the charges denied by the respondent are considered.
If the BCC Panel Chair does not find that the respondent has failed to answer the charges, no further
action on the charges will occur at the hearing.
Decisions on the Motion for Default and the sanctions imposed shall be issued in accordance with Rule
408.E.

409.

SUMMARY PROCEEDINGS BEFORE THE FLOOR CONDUCT COMMITTEE
409.A. Jurisdiction
A member of the Floor Conduct Committee or a designated representative of the Market Regulation
Department shall have the authority to issue charges against an individual with respect to trading
infractions as set forth in Rule 514. A panel of the Floor Conduct Committee shall have authority to
conduct summary proceedings with respect to charges under Rule 514.
Charges against an individual shall be issued by filing the appropriate forms with the Market Regulation
Department. The Market Regulation Department will then serve the respondent with a copy of thecharges.
409.B. Selection of the Panel
For proceedings before the Floor Conduct Committee, the Chief Regulatory Officer or his designee, in
consultation with a Floor Conduct Committee Co-Chairman, shall select a panel consisting of three
additional members of the Floor Conduct Committee, which may include other Co-Chairmen of thecommittee. The Chief Regulatory Officer shall endeavor to rotate the members serving on the panels.
No panelist may serve on the particular panel if he or any Person, firm, or broker association with which
he is affiliated has a personal, financial, or other direct interest in the matter under consideration.
409.C. Conduct of Summary Proceedings
A summary proceeding before the Floor Conduct Committee shall be conducted in a fair and impartial
manner.
A summary proceeding before the Floor Conduct Committee shall take place as soon as practicable
after the issuance of charges. The proceeding will not be recorded. The respondent shall be entitledto appear personally and answer the charges issued. Respondents and witnesses may not be
represented by counsel at a summary proceeding. However, an employee without membershipprivileges who is a respondent may be represented by a single representative of his employer. A panel
shall decide by a majority vote whether the individual is guilty of the violation or offense charged. If theaccused individual is found guilty, a panel may impose fines in accordance with Exchange Rules. A
witness who fails to appear at a summary proceeding after being directed to do so by the Chairman of
the panel or by staff may be charged with a violation of Rule 432.
If a panel of the Floor Conduct Committee, by a majority vote, decides that the matter is of major
importance or might warrant a penalty in excess of its own authority, the Chairman of the Panel shallrefer the matter to the Chief Regulatory Officer and shall inform the individual of this referral in writing.
409.D. Appeals
An individual found guilty of an offense who receives a fine greater than $5,000 may, within 10 days ofthe decision, file a written appeal of the decision with the Market Regulation Department. A written
appeal that fails to specify the grounds for the appeal and the specific error or impropriety of the originaldecision shall be dismissed by the Chief Regulatory Officer. The Hearing Panel Chair may also allow
the parties to file briefs in support of or in opposition to an appeal. The appeal shall be he ard by aPanel of the BCC (“BCC Panel”) whose decision shall be the final decision of the Exchange and not
subject to appeal pursuant to Rule 411. The appellant shall be entitled to be represented by counsel,
appear personally before the BCC Panel and present evidence that he may have in support of his© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

appeal. The BCC Panel shall not set aside, modify or amend the appealed decision unless it
determines, by majority vote, that the decision was:
1. Arbitrary, capricious, or an abuse of the committee’s discretion;
2. In excess of the committee’s authority or jurisdiction; or
3. Based on a clearly erroneous application or interpretation of Exchange Rules.

410.

[RESERVED]

411.

APPEAL TO A HEARING PANEL OF THE BOARD OF DIRECTORSThe Market Regulation Department may appeal to a hearing panel of the Board (“Appellate Panel”)
regarding a final decision of or sanction imposed by the BCC by filing a written notice of appeal with
the Exchange Legal Department within 10 business days after receiving notice of such decision or
sanction. A copy of such notice of appeal shall be provided to the Respondent at the time it is filedwith the Legal Department. Filing of a notice of appeal by the Market Regulation Department shall stay
any decision that is appealed unless the Chairman of the Board or the BCC Hearing Panel Chair fromwhich the appeal is taken specifically directs that the decision is not stayed pending appeal.
A Member found guilty of an offense or otherwise aggrieved by a final decision of the BCC, may appeal
to an Appellate Panel provided that the decision assesses a monetary sanction (including a fine,disgorgement or restitution) greater than $25,000 and/or an access denial or suspension of any
membership privileges for greater than ten business days against the Member. The notice shall be
filed in writing with the Exchange’s Legal Department within 10 business days after Notice of any suchdecision. A copy of such notice shall be provided to the Market Regulation Department at the time it
is filed with the Legal Department. Filing of a notice of appeal by a Member shall stay the decisionappealed unless the Market Regulation Department objects to such a stay and the Chairman of theBoard or the BCC Hearing Panel Chair from which the appeal is taken specifically directs that thedecision is not stayed pending appeal.
A notice of appeal must specify the grounds for the appeal and the specific error(s) or impropriety ofthe original decision. Upon receiving the notice of appeal the parties, in conjunction with the Exchange
Legal Department shall determine a briefing schedule for the appeal. If agreement on the schedulecannot be reached the Appellate Panel Chair shall set the schedule. The Appellate Panel Chair shalldetermine, in their sole discretion, whether to hold oral argument on the appeal or whether to decide
the appeal on the papers submitted by the parties.
The appellate hearing shall be limited to the record from the appealed proceeding. The Appellate
Panel shall not entertain any new evidence or new legal theory not raised in the prior proceeding
except upon a clear showing by the appellant that such new evidence or new legal theory did not exist
or was not ascertainable by due diligence at the time of the proceeding, and that there was insufficient
time within the intervening period prior to the hearing of the Appellate Panel for the appellant to bringsuch new evidence or legal theory to the attention of the BCC.
No member of the Board may serve on a particular Appellate Panel if they participated on the BCC
Panel that issued the decision, or if they have a personal, financial, or other direct interest in the matter
under consideration or is a member of the same broker association as the respondent or potential
respondent.
The Chairman of the Board shall appoint a director to serve as the Appellate Panel chairman, whoshall conduct the hearing, and two additional directors to serve on the Appellate Panel. One of these
directors shall be a non-member. Any party to the appeal may request the Chairman of the Board to
strike any director for good cause shown. The Chairman of the Board may then excuse such director
and shall then select an alternate director from the Board. An Appellate Panel shall consist of directorsthat possess sufficiently diverse interests so as to ensure fairness.
The Appellate Panel shall not set aside, modify or amend the appealed decision unless it determines,
by a majority vote that the decision was:A. Arbitrary, capricious, or an abuse of the committee’s discretion;
B. In excess of the committee’s authority or jurisdiction; or
C. Based on a clearly erroneous application or interpretation of Exchange Rules.
In the case of an appeal of a disciplinary decision, the Appellate Panel shall promptly issue a written
decision which shall include a statement of findings with respect to the decision from which the appeal© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

was taken and the Appellate Panel’s determination that such initial decision is affirmed, set aside,modified or amended in whole or in part and, with respect to any initial decision that is not affirmed inwhole, the Appellate Panel’s determination of the order or penalty to be imposed, if any. The decisionof the Appellate Panel shall be deemed a decision of the Board and shall be a final decision of the
Exchange. If a disciplinary sanction results from the decision of the Appellate Panel, the party against
whom such sanction was imposed shall be notified of its potential ability to appeal to the Commodity
Futures Trading Commission.
This Rule shall not apply to appeals of Arbitration Committee decisions, which shall be governed by
the Rules contained in Chapter 6.

412.

SUMMARY ACTIONS
In cases of action taken against a Member pursuant to Rules 975, 976, 977 or 8G975, the Member
affected shall be notified in writing of such action. The notice shall state: the action taken; the reason
for the action; and the effective time, date and duration thereof.
The Member may, within two business days following receipt of notice of action taken, request ahearing before a hearing panel of the Board (“Panel”). The hearing shall be conducted within 60 daysof such request, in accordance with the requirements of Rule 408, unless the Hearing Panel Chair
determines that good cause for an extension has been shown, but shall not stay any action taken
pursuant to Rules 975, 976 977 or 8G975.
Following the hearing, if any, the Panel shall cause to be prepared a written decision containing: adescription of the summary action; the reasons for such action; a description of the evidence produced
at the hearing; findings and conclusions; a determination that the summary action should be affirmed,
set aside, modified or amended and the reasons therefor; and the effective date and duration, if any,of subsequent or continuing actions. The Panel shall not set aside, modify or amend the summary
action taken against a Member unless it determines, by a majority vote, that the summary action taken
was:
A. Arbitrary, capricious, or an abuse of discretion; or
B. In excess of the committee’s authority or jurisdiction.

413.

SUMMARY ACCESS DENIAL ACTIONS
413.A. Authority to Deny Access
The Chief Regulatory Officer or his delegate, upon a good faith determination that there are substantial
reasons to believe that such immediate action is necessary to protect the best interests of the
Exchange, may order that any party be denied access to any or all CME Group markets or any Member
be immediately removed from any trading floor or facility owned or controlled by CME Group.
413.B. Notice
Promptly after an action is taken pursuant to Rule 413.A., the party shall be informed of the action
taken, the reasons for the action, and the effective date, time and the duration of the action taken. The
party shall be advised of his right to a hearing before a panel of the BCC (“Panel”) by filing notice ofintent with the Market Regulation Department within 10 business days of receiving notice of the action
taken.
413.C. Hearing
Parties shall have the right to representation, at their own cost, by legal counsel or anyone other thana member of any Exchange disciplinary committee, a member of the Board, an employee of CME
Group or a Person related to the Investigation. The Panel shall conduct a de novo hearing solely on
the issue of the denial of access in accordance with the procedures in Rule 408.A. Filing of a noticeof intent pursuant to Rule 413.B. shall not stay the Chief Regulatory Officer’s decision to deny access.
413.D. Duration of Access Denial
Any decision to deny access pursuant to Rule 413.A. or Rule 413.C. shall not remain in effect for morethan 60 days unless the Chief Regulatory Officer or his delegate, upon further consideration of thecircumstances that resulted in a prior access denial action, provides written Notice to the party that his
access will be denied for an additional period of time not to exceed 60 days and the Notice comports
with the provisions of Rule 413.B. Any subsequent extension of the access denial pursuant to thisRule must be mutually agreed to by the party and the Chief Regulatory Officer or his delegate. In theabsence of such mutual agreement, the Market Regulation Department may petition the BCC to take

© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

emergency action pursuant to Rule 402.C. At any time, a Member may petition the BCC to reconsider
an access denial pursuant to this Rule based upon materially changed circumstances.

414.

INVESTIGATIONS BY OTHER SELF-REGULATORY ORGANIZATIONS
If a self-regulatory organization that is a party to an information sharing agreement with the Exchange
requests assistance in connection with an investigation, the Chief Regulatory Officer may direct a party
subject to the jurisdiction of the Exchange pursuant to Rule 418 to submit to an examination by therequesting self-regulatory organization and to produce information pertinent to that investigation. The
request for assistance shall describe the investigation, explain why Exchange assistance is necessary
and describe the scope of assistance sought. An order directing a party subject to the jurisdiction of
the Exchange to submit to an examination shall be issued unless the Chief Regulatory Officer
determines that such order would not be in the best interests of the Exchange. An examination
pursuant to such order shall be conducted according to Exchange Rules and shall be conducted on
Exchange premises under the direction of Exchange staff. At the discretion of the Chief Regulatory
Officer, representatives of the requesting self-regulatory organization may observe and participate in
the examination. Failure to comply with an order issued under this Rule shall be an offense against
the Exchange.

415.

INFORMATION-SHARING AGREEMENTS
The Chief Executive Officer or his delegate is authorized to provide information:
A. to an exchange, clearing organization, domestic or foreign regulatory agency or member of theIntermarket Surveillance Group (“ISG”) that is a party to an information sharing agreement with
the Exchange, in accordance with the terms and conditions of such agreement; or
B. as directed by the Commission pursuant to CFTC Regulation 38.159.

416.

CONFLICTS OF INTEREST
416.A. Abstention Requirements
A member of a charging, adjudicating, or appeal committee or panel must abstain from participating in
any matter where such member:
1. Is a witness, potential witness, or a party;
2. Is an employer, employee, or co-worker of a witness, potential witness, or a party;
3. Is associated with a witness, potential witness, or a party through a broker association as definedin Exchange Rules;
4. Has any significant personal or business relationship with a witness, potential witness, or a party,
not including relationships limited to (a) executing futures or options transactions opposite eachother, or (b) clearing futures or option transactions through the same clearing member; or
5. Has a familial relationship to a witness, potential witness, or a party.
416.B. Disclosure of Relationship
1. Prior to the consideration of any matter involving a subject, each member of a charging,
adjudicating, or appeal committee or panel must disclose to the appropriate Exchange staff
whether he or she has one of the relationships listed in Rule 416.A. above with the subject.
2. In its sole discretion, Exchange staff shall determine whether any member of the committee orpanel is required to abstain in any matter.

417.

PROHIBITED COMMUNICATIONS
417.A. Ex Parte Communications
Unless on notice and opportunity for all parties to participate:
1. No subject or respondent (or any counsel to or representative of a subject or respondent) or the
Financial and Regulatory Surveillance Department (or any counsel to or representative of the
Financial and Regulatory Surveillance Department) or the Market Regulation Department (or any
counsel to or representative of the Market Regulation Department) shall knowingly make or cause
to be made an ex parte communication relevant to the merits (which shall not include scheduling© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

and procedural matters) of an Investigation or a proceeding to a member of a charging,
adjudicatory, or appeal committee or panel with respect to that matter or proceeding.
2. No member of a charging, adjudicating, or appeal committee or panel that is participating in adecision with respect to an Investigation or a proceeding shall knowingly make or cause to bemade to a subject or respondent (or any counsel to or representative of a subject or respondent)
or the Financial and Regulatory Surveillance Department (or any counsel to or representative o f
the Financial and Regulatory Surveillance Department) or the Market Regulation Department (orany counsel to or representative of the Market Regulation Department) an ex partecommunication relevant to the merits (which shall not include scheduling and procedural matters)of that matter or proceeding.
417.B. Communications with Panelists
No Person shall attempt to influence disciplinary matters pending before a charging, adjudicatory, or
appeal committee by discussing, or attempting to discuss, such pending matters with a member ofsuch committee or any member of the Board.
417.C. Disclosure
Any Person who receives, makes or learns of any communication which is prohibited by this Rule shallpromptly give notice of such communication and any response thereto to the Market Regulation
Department or the Financial and Regulatory Surveillance Department, as applicable, and all parties
to the proceeding to which the communication relates. A Person shall not be deemed to have violated
this Rule if the Person refuses an attempted communication concerning the merits of an Investigationor proceeding as soon as it becomes apparent that the communication concerns the merits.

418.

CONSENT TO EXCHANGE JURISDICTION
Any Person initiating or executing a transaction on or subject to the Rules of the Exchange directly or
through an intermediary, and any Person for whose benefit such a transaction has been initiated or
executed, expressly consents to the jurisdiction of the Exchange and agrees to be bound by and comply
with the Rules of the Exchange in relation to such transactions, including, but not limited to, rules
requiring cooperation and participation in investigatory and disciplinary processes. Any futurescommission merchant, introducing broker, associated person, or foreign Person performing a similar rolethat charges a commission or fee in connection with transactions on or subject to the Rules of the
Exchange also expressly consents to the Exchange’s jurisdiction.

419.

CONTRACT MODIFICATION
All deliveries must conform to government regulations in force at the time of delivery, and all options
must conform to government regulations in force at the time of exercise. Unless specifically provided
otherwise in the applicable product chapter, if any duly authorized U.S. government agency or bodywith appropriate jurisdiction issues an order, ruling, directive or law that conflicts with the requirementsof these Rules, such order, ruling directive or law shall be construed to take precedence and become
part of these Rules, and all open and new contracts shall be subject to such government orders.

420. – 431. [RESERVED]
432.

GENERAL OFFENSES
It shall be an offense:
A. to have an interest in, operate or knowingly act on behalf of a bucket-shop, or knowingly make anytransaction with a bucket-shop;
B. 1. to engage, or attempt to engage, in fraud or bad faith;
2. to engage in conduct or proceedings inconsistent with just and equitable principles of trade;
C. to engage in dishonest conduct;
D. to create or report a false or fictitious trade;E. to extort or attempt extortion;
F. to buy or sell any Exchange futures or options contract with the intent to default on such purchaseor sale;© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

G. to prearrange the execution of transactions in Exchange products for the purpose of transferring
equity between accounts;
H. to engage in, or attempt to engage in, the manipulation of prices of Exchange futures or options
contracts; to corner or squeeze, or attempt to corner or squeeze, the underlying cash market; tointentionally or recklessly use or employ, or attempt to use or employ, any manipulative device,scheme, or artifice to defraud; or to purchase or sell, or offer to purchase or sell Exchange futures
or options contracts, or any underlying commodities or securities, for the purpose of upsetting theequilibrium of the market or creating a condition in which prices do not or will not reflect fair market
values;I. to make a verbal or written material misstatement to the Board, a committee, or Exchange
employees;
J. to intentionally or recklessly deliver or cause to be delivered, or attempt to deliver or cause to bedelivered, false, misleading or inaccurate information concerning crop or market information orconditions that affect or may affect the price of any Exchange futures or options contract or spottransaction in the underlying commodity;
K. to trade or accept performance bonds after insolvency;
L. 1. to fail to appear before the Board, Exchange staff or any investigative or hearing committee
at a duly convened hearing, scheduled staff interview or in connection with any Investigation;
2. to fail to fully answer all questions or produce all books and records at such hearing or inconnection with any investigation, or to make false statements;
3. to fail to produce any books or records requested by duly authorized Exchange staff, in theformat and medium specified in the request, within 10 days after such request is made orsuch shorter period of time as determined by the Market Regulation Depa rtment in exigent
circumstances;
M. to use or disclose, for any purpose other than the performance of an individual's official duties asa member of any committee or the Board of Directors, any non-public information obtained byreason of participating in any Board of Directors or committee meeting or hearing;
N. to knowingly accept, directly or indirectly, a trade on the Exchange for the account of a non member employed on the floor of the Exchange;
O. for a Member to permit the use of facilities or membership privileges in a manner that is detrimental
to the interest or welfare of the Exchange or results in a violation of Exchange Rules or the
Commodity Exchange Act;
P. for a Clearing Member to fail to maintain minimum financial requirements;
Q. to commit an act which is detrimental to the interest or welfare of the Exchange or to engage inany conduct which tends to impair the dignity or good name of the Exchange;
R. to fail to submit to arbitration any dispute which Exchange staff, an arbitration panel or the Board
decides should be arbitrated pursuant to Chapter 6; or to fail to comply with a final arbitration
award;
S. to fail to comply with an order of the Board, Exchange staff or any hearing committee;
T. to engage in dishonorable or uncommercial conduct;
U. except where a power of attorney or similar document has been executed pursuant to Rule 956,
for any party to accept or transmit a customer order which has not been specifically authorized;
V. to be expelled from a U.S. or foreign designated commodities or securities exchange;
W. for any party to fail to diligently supervise its employees and agents in the conduct of their business
relating to the Exchange;
X. to aid or abet the commission of any offense against the Exchange or any violation of an Exchange
Rule;Y. to use improperly the trading or clearing platform of any Designated Contract Market, Derivatives
Clearing Organization, or Swap Execution Facility owned or controlled by CME Group or permit theunauthorized use of such platforms; and/or
Z. for a Member to fail to disclose to his qualifying Clearing Member that an involuntary bankruptcy
petition has been filed against him or, in the case of a voluntary bankruptcy proceeding, that hehas filed or has formed a definite intention to file for bankruptcy.

© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

433.

STRICT LIABILITY FOR THE ACTS OF AGENTS
Pursuant to Section 2(a)(1)(B) of the Commodity Exchange Act, and notwithstanding Rule 432.W., theact, omission, or failure of any official, agent, or other Person acting for any party within the scope of
his employment or office shall be deemed the act, omission or failure of the party, as well as of theofficial, agent or other Person who committed the act.

434.

[RESERVED]

435.

EFFECT OF SUSPENSION OR EXPULSION
Unless otherwise determined by the committee with jurisdiction over such matters, a suspended or
expelled Member shall not be entitled to any of the privileges of membership during the period of suchsuspension or expulsion, including, but not limited to, the right to:
A. access any trading floor owned or controlled by CME Group;
B. direct and indirect access to any Designated Contract Market, Derivatives Clearing Organization or
Swap Execution Facility owned or controlled by CME Group;
C. obtain member rates; andD. any applicable cross-exchange trading privileges.
A member who has been expelled may not lease out an owned membership in any exchange owned
or controlled by CME Group and must relinquish ownership of such membership(s) within 30 days ofthe date that the expulsion becomes the final decision of the Exchange.

436.

[RESERVED]

437.

NOTICE OF DISCIPLINE
Notice, in accordance with Section 8c(a)(2) of the Commodity Exchange Act, shall be made available
to an internet accessible computer database at the National Futures Association and to an internet
accessible computer database at CME Group and shall be provided to any Member or non-member
who is suspended, expelled, disciplined or denied access to the Exchange within 30 days after thedecision becomes final. Additionally, a written notice may be posted on the floor of the Exchange forfive business days promptly after the disciplinary action becomes effective. The notice shall include
the Member's or non-member’s name, the Rule(s) violated, the reason for the Exchange's action andthe action taken or penalty imposed.

438.

[RESERVED]

439.

MEMBER'S INDEMNIFICATION LIABILITYA Member or former Member shall indemnify and hold harmless the Exchange and CME Group Inc.,
including each of their respective subsidiaries and affiliates (collectively, the indemnified parties) andtheir officers, directors, employees, and agents, for any and all losses, damages, costs and expenses(including attorneys’ fees) incurred by the indemnified parties as a result (directly or indirectly) of such
Member’s violation or alleged violation of Exchange Rules or state or federal law.
Any charges arising out of this Rule shall be subject to liens as provided in Rule 110(a).

440.

CLAIMS BY MEMBERS
A Member who commences a legal action against the Exchange, its directors, officers, employees, or
agents, or another Member of the Exchange without first resorting to and exhausting the procedures
established by Rule 110 and the mandatory arbitration provisions of Chapter 6 (including appeals to
the Board), or any other Rules relating to settlement of disputes arising out of transactions or matterspertaining to the Exchange shall be deemed to have committed an act detrimental to the interest or
welfare of the Exchange. This Rule shall not abrogate an individual's right to reparations pursuant to
Section 14 of the Commodity Exchange Act.
A Member who commences a legal action against the Exchange, its directors, officers, employees, or© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.

agents, after he has exhausted all of the procedures established by the Exchange, may be found tohave committed an act detrimental to the interest or welfare of the Exchange in the event that at hearing
the Board or the BCC determines that the Member's action was not meritorious or warranted.

441.

COMMUNICATIONS WITH THE PUBLIC AND PROMOTIONAL MATERIAL
Promotional material and similar information issued by Members shall comply with the requirements of
National Futures Association Rule 2-29, as amended.

442.

NOTIFICATION OF SIGNIFICANT EVENTSEach Member shall provide immediate notice to the Market Regulation Department (and each Memberthat is a Member Firm or a Clearing Member shall also provide immediate notice to the Clearing House),in writing upon becoming aware of any of the following events relating to such Member:
1. any suspension, expulsion, revocation or restriction of such Member’s trading privileges or any
fine in excess of $25,000, through an adverse determination, voluntary settlement or otherwise,by any court, commodity or securities exchange or related clearing organization, the Securities
and Exchange Commission, the Commodity Futures Trading Commission or the securities
commission or equivalent authority of any state, territory, the District of Columbia or foreigncountry, the National Futures Association, the Financial Industry Regulatory Authority, Inc. or any
self-regulatory or regulatory organization;
2. any indictment of the Member or any of its officers for, any conviction of the Member or any of its
officers of, or any confession of guilt or plea of guilty or nolo contendere by the Member or any of
its officers to 1) any felony or 2) any misdemeanor involving, arising from, or related to the purchaseor sale of any commodity, security, futures contract, option or other financial instrument or involving
or arising from fraud or moral turpitude; and/or
3. any filing of a bankruptcy petition or insolvency, receivership or equivalent proceeding of which
the Member is a subject. In the case of a voluntary bankruptcy, insolvency, receivership orequivalent proceeding, the Member also shall notify the Market Regulation Department, (and theClearing House in the case of a Member that is a Member Firm or Clearing Member) when such
Member forms a definite intention to file such proceeding.
Nothing in this Rule shall limit or negate any other reporting obligations that any member may have tothe Exchange or any other regulator or Person.

443.

[RESERVED]

444.

PAYMENTS OF DISCIPLINARY FINES, DISGORGEMENT ORDERS AND RESTITUTION
Disciplinary fines, disgorgement, and restitution amounts levied pursuant to Exchange rules must be
submitted to the Market Regulation Department no later than the date specified in the notice of decision.
An individual or entity who fails to provide proof of payment within the time prescribed shall not be entitledto direct or indirect access to any Designated Contract Market, Derivatives Clearing Organization, orSwap Execution Facility owned or controlled by CME Group until the payment has been received. Any
party that fails to make the required payment shall immediately forfeit eligibility for any Exchange incentive
or rebate program until the amount is paid in full. Any party that fails to pay a disciplinary fine,disgorgement order, or restitution amount within the prescribed time period may also be subject tosanctions pursuant to Rule 432.S.
Parties may, subject to a determination by the sanctioning entity, be liable for unpaid fines or unpaid
disgorgement orders and restitution amounts imposed upon their employees.
(End Chapter 4)© Copyright Chicago Mercantile Exchange, Inc. All rights reserved.