Sent via email to: submissions@cftc.gov April 5, 2016

Christopher Kirkpatrick

Office of the Secretariat 

U.S. Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street NW

Washington, DC 20581

RE: Clear Markets North America, Inc. – Rule Amendments

Dear Mr. Kirkpatrick: 

Pursuant to Commodity Futures Trading Commission (“CFTC” or “Commission”) Regulation 40.6(a), 

Clear Markets North America, Inc. (“CMSEF”) hereby notifies the Commission that it has amended its 

Rulebook. 

CMSEF is amending the Rulebook to enhance compliance with the Commodity Exchange Act (the 

“CEA”) and CFTC Regulations, including the swap execution facility (“SEF”) Core Principles, and to 

provide clarity for Participants on CMSEF. These amendments follow discussions with CFTC staff 

regarding CMSEF’s Rulebook. 

The amendments to the Rulebook, as well as explanations, are attached as Exhibit A. A copy of the 

amended Rulebook is also attached, as Exhibit B.

CMSEF hereby certifies that: (i) the amended Rulebook complies with the CEA and the CFTC

Regulations thereunder, and (ii) this submission is being concurrently posted on the CMSEF website.

* * * * *

If you have any questions regarding the above, please contact me at king@clear-markets.com or 980-

819-1170.

Respectfully submitted,

Zachary J. King

Chief Compliance Officer

Clear Markets North America, Inc.

Attachments: 

Exhibit A: CMSEF Rulebook Amendments and Explanations

Exhibit B: CMSEF Rulebook (Clean and Redline)
Exhibit A: CMSEF Rulebook Amendments and Explanations

Rule Number Rule Amendment Explanation and Support for 

Rule Amendment

Table of Contents Reassigned page numbers Clerical 

Table of Contents Revised titles, corrected 

errors, new titles added

Clerical 

Definitions Amended definition of “Block 

Trade” to more closely mirror 

CFTC Regulation 43.2

Amended at request of CFTC 

(12-18-2015) in support of 

compliance with Part 43 of the 

CFTC Regulations

Definitions Amended definition of “Legal 

Entity Identifier” 

Amended to provide clarity at 

request of CFTC (12-18-2015) 

in support of compliance with 

Part 45 of the CFTC 

Regulations

Definitions Amended definition of “Major 

Swap Participant” to reference 

CEA Section 1a(33)

Amended at request of CFTC 

(12-18-2015) 

Definitions Amended definition of 

“Reporting Counterparty” to 

reference CFTC Regulations 

45.1 and 45.8

Amended to provide clarity at

request of CFTC (12-18-2015)

Rule 218 Amended to specifically 

reference CFTC Regulations 

43.3(h) and 45.2(a)

Amended at request of CFTC 

(12-18-2015) in support of 

compliance with Part 45 of the 

CFTC Regulations

Rule 219 Added Rule to set forth 

CMSEF’s swap data 

recordkeeping obligations

Amended at request of CFTC 

(12-18-2015) in support of 

compliance with Part 45 of the 

CFTC Regulations

Rule 303A Amended to specifically set 

forth that parties to a Block 

Trade must be Participants of 

CMSEF and therefore must be 

ECPs

Amended at request of CFTC 

(12-18-2015) in support of 

compliance with Core 

Principal 2 (ECP status)

Rule 409 Amended to clarify relief is 

based on CFTC No-Action 

Letter No. 15-24; also 

amended to state that CMSEF 

may halt or suspend trading

Amended at request of CFTC 

(9-17-2015) and request of 

CFTC (11-6-2015) and 

request of CFTC (11-18-2015) 

and request of CFTC (12-1-

2015) and request of CFTC 

(12-18-15) in support of 

compliance with Core 

Principal 2 and Core Principal 

8 (adjusting and canceling 

trades)

Rule 416 Amended to set forth specific 

CFTC Regulations from which 

Rules are derived; also 

amended to set forth how 

consent to transact a Block 

Amended at request of CFTC 

(12-18-2015) in support of 

Part 43 of the CFTC 

Regulations (specifically

CFTC Regulation 43.6)
Trade may be provided; also 

amended to clarify how Block 

Trade notification is 

accomplished to CMSEF and 

to the SDR.

Rule 418A Renumbered Rule 418 as 

Rule 418A and amended for 

clarity, not substantive

Amended at request of CFTC (12-18-2015)

Rule 418B Added Rule to set forth 

requirements for publicly 

reportable swap transactions, 

consistent with Part 43 of the 

CFTC Regulations

Amended at request of CFTC (12-18-2015) in support of 

Part 43 of the CFTC Regulations

Rule 418C Added Rule to set forth 

requirements for reporting 

counterparties

Amended at request of CFTC (12-18-2015) in support of 

Part 45 of the CFTC 

Regulations (specifically 

CFTC Regulation 45.8(h))

Rule 503 Amended for clarity, not 

substantive

N/A
Exhibit	B:	CMSEF Rulebook

[See	Next	Page]
Swap Execution Facility 

Rulebook

April 2016

Revision 2.2

ALL CLEAR MARKETS SWAP EXECUTION FACILITY PARTICIPANTS AND AUTHORIZED USERS, 

WHETHER SUCH PARTICIPANT OR AUTHORIZED USER ACCESSES CMSEF DIRECTLY OR 

THROUGH AN INTERMEDIARY, AND ANY CLEARING MEMBER WHICH GUARANTEES SWAPS 

TRADED ON CMSEF, HEREBY AGREE THAT THESE RULES ARE BINDING UPON ANY SUCH 

PERSON OR ENTITY AND ITS EMPLOYEES AND CUSTOMERS. IT IS FURTHER AGREED THAT 

THESE RULES ARE APPLICABLE AND THAT SUCH PERSONS ARE SUBJECT TO THE 

JURISDICTION OF CMSEF, THE CFTC, AND ANY RELEVANT SELF-REGULATORY ORGANIZATION. 

ALL SUCH PERSONS HEREBY AGREE TO COOPERATE FULLY IN THE EVENT CMSEF, THE CFTC, 

OR A SELF-REGULATORY ORGANIZATION CONDUCTS ANY INQUIRY, INVESTIGATION, OR AUDIT 

OF ANY PARTICIPANT OR ACTIVITY CONDUCTED ON THIS SWAP EXECUTION FACILITY.
CMSEF Rulebook CMSEF Page 2

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Table of Contents

Chapter 1 Definitions ...........................................................................................................................6

Chapter 2 Governance ......................................................................................................................11

Rule 201 Board ......................................................................................................................................11

Rule 202 Nominating Committee...........................................................................................................11

Rule 203 Regulatory Oversight Committee ...........................................................................................11

Rule 204 Additional Standing Committees............................................................................................12

Rule 205 Ability of the Board to Review Decisions ..............................................................................12

Rule 206 Ability of the Board to Amend these Rules ............................................................................12

Rule 207 Eligibility ................................................................................................................................12

Rule 208 Officers...................................................................................................................................13

Rule 209 Chief Compliance Officer.......................................................................................................13

Rule 210 Conflicts of Interest ................................................................................................................14

Rule 211 Non-Public Information ..........................................................................................................15

Rule 212 Reporting to the CFTC ...........................................................................................................16

Rule 213 Reserved .................................................................................................................................16

Rule 214 Reserved .................................................................................................................................16

Rule 215 Reserved .................................................................................................................................16

Rule 216 Information Sharing Agreements............................................................................................16

Rule 217 Agreements with Regulatory Services Providers....................................................................16

Rule 218 Maintenance of Books and Records........................................................................................17

Rule 219 Swap Recordkeeping ..............................................................................................................17

Chapter 3 Participants .......................................................................................................................18

Rule 301 Jurisdiction..............................................................................................................................18

Rule 302 Trading Privileges...................................................................................................................18

Rule 303A Eligibility Criteria for Participants and Access....................................................................19

Rule 303B Eligibility Criteria for Independent Software Vendors ........................................................20

Rule 303C Direct Market Access...........................................................................................................20

Rule 303D Withdrawing from CMSEF..................................................................................................21

Rule 304 Authorized Users ....................................................................................................................21

Rule 305 CMSEF Platform Security ......................................................................................................22

Rule 306 Participant Application Process..............................................................................................22
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Rule 307 Authorized Representatives ....................................................................................................22

Rule 308 Customers of Participants.......................................................................................................23

Rule 309A Minimum Financial Standards.............................................................................................23

Rule 309B Minimum Financial Standards Reporting ............................................................................23

Rule 310 Authority to Impose Restrictions............................................................................................24

Rule 311 Mandatory Trading .................................................................................................................24

Rule 312 Uncleared Swaps.....................................................................................................................24

Rule 313 Fees.........................................................................................................................................24

Rule 314 Communications between CMSEF and Participants ..............................................................24

Rule 315 Notices....................................................................................................................................24

Rule 316 Reserved .................................................................................................................................25

Rule 317 Continuing Applicability of Jurisdiction and Rules................................................................25

Rule 318 Participant Trading Records ...................................................................................................25

Rule 319 Participant Maintenance of Records .......................................................................................25

Rule 320 Legal Certainty for CMSEF Trades........................................................................................26

Chapter 4 Trading Standards and Practices ..................................................................................26

Rule 401 Swaps Traded on CMSEF.......................................................................................................26

Rule 402 Prohibited Trading Activities..................................................................................................27

Rule 403 Fraudulent Acts and Misstatements........................................................................................27

Rule 404 Misuse of the CMSEF Trading Platform ................................................................................27

Rule 405 Trading Hours.........................................................................................................................27

Rule 406 Execution of Swaps on CMSEF..............................................................................................28

Rule 407A Required Transactions..........................................................................................................30

Rule 407B Clearing Exception for Swaps..............................................................................................30

Rule 408 Cancellation of Orders by Participants ...................................................................................30

Rule 409 Modification or Cancellation of Orders and Trades by CMSEF.............................................30

Rule 410A Pre-Execution Credit Checks...............................................................................................31

Rule 410B Confirmation of Agreements Between Counterparties.........................................................31

Rule 411 Cleared Swaps ........................................................................................................................31

Rule 412 Position Limits or Accountability ...........................................................................................31

Rule 413A Position Limits.....................................................................................................................32

Rule 413B Position Accountability ........................................................................................................32
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Rule 414 Real-Time Market Monitoring and Surveillance ....................................................................32

Rule 415 Mishandled Customer Orders .................................................................................................33

Rule 416 Block Trades...........................................................................................................................33

Rule 417A Pre-Trade Communications .................................................................................................34

Rule 417B Information Obtained in Pre-Trade Communications..........................................................34

Rule 418A Dissemination of Prices and Trading Information ...............................................................34

Rule 418B Publicly Reportable Swap Transactions...............................................................................35

Rule 418C Reporting Counterparties .....................................................................................................35

Rule 419 Emergency Rules....................................................................................................................35

Chapter 5 Disciplinary Rules ............................................................................................................36

Rule 501 General....................................................................................................................................36

Rule 502 CMSEF’s Right to Inspect Books, Records and Systems.......................................................37

Rule 503 Investigations..........................................................................................................................37

Rule 504 Reports of Investigations ........................................................................................................38

Rule 505 Opportunity to Respond to Investigation Reports...................................................................38

Rule 506 Review of Investigation Reports.............................................................................................38

Rule 507 Warnings.................................................................................................................................39

Rule 508 Notice of Charges ...................................................................................................................39

Rule 509 Service of Notice of Charges..................................................................................................39

Rule 510 Answer to Notice of Charges..................................................................................................40

Rule 511 Right to a Hearing...................................................................................................................40

Rule 512 Settlements..............................................................................................................................40

Rule 513 Disciplinary Panels.................................................................................................................41

Rule 514 Convening Hearings of Disciplinary Proceedings ..................................................................42

Rule 515 Respondent Review of Evidence ............................................................................................42

Rule 516 Conducting Hearings of Disciplinary Proceedings.................................................................43

Rule 517 Decision of Disciplinary Panel ...............................................................................................44

Rule 518 Sanctions.................................................................................................................................45

Rule 519 Appeal from Disciplinary Panel Decision, Summary Impositions of Fines and Other 

Summary Actions...................................................................................................................................45

Rule 520 Summary Imposition of Fines.................................................................................................47

Rule 521 Summary Suspensions and Other Summary Actions..............................................................47
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Rule 522 Reinstatement after Summary Suspension..............................................................................48

Rule 523 Rights and Responsibilities after Suspension or Termination.................................................48

Rule 524 Notice of Disciplinary Proceedings ........................................................................................49

Rule 525 CFTC Review of CMSEF Actions..........................................................................................49

Chapter 6 Miscellaneous........................................................................................................................49

Rule 601 Gifts and Gratuities.................................................................................................................49

Rule 602 Rule Violations.......................................................................................................................49

Rule 603 Market Data ............................................................................................................................50

Rule 604 Publication of Trading Information ........................................................................................50

Rule 605 Anti-Money Laundering .........................................................................................................50

Rule 606 Swaps Trading by CMSEF Officials ......................................................................................50

Rule 607 Confidentiality ........................................................................................................................51

Rule 608 Information-Sharing Agreements ...........................................................................................51

Rule 609 Rule Changes Due to Changes in Government Regulations...................................................51

Rule 610 Governing Law .......................................................................................................................51

Rule 611 Force Majeure .........................................................................................................................52

Rule 612 Extension or Waiver of CMSEF Rules...................................................................................52

Rule 613 Trading Restrictions of CMSEF Employees...........................................................................52
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Chapter 1 Definitions

Unless otherwise specified, the following are defined terms and shall have the meanings specified below.

Acceptable Price Range means the range of prices that an order may be executed without 

being subject to review by the CMSEF Compliance Department and shall be published on the 

CMSEF website.

Account Manager means a Person that meets the criteria set forth in CFTC Rule 43.6(h)(6).

Act or CEA means the Commodity Exchange Act, as amended from time to time.

Affiliate means an affiliate of a Participant or a Person or entity who controls, is controlled or is 

directed, either directly or indirectly by another Person or Participant.

API means application programming interface.

Appeals Panel means a panel appointed by the Chief Compliance Officer under Rule 519.

Applicable Law means, with respect to any Person, and statute, law, regulation, rule or 

ordinance of any governmental or self-regulatory authority applicable to such Person, including 

the CEA, Exchange Act and CFTC Regulations.

Authorized Person means any Person who is authorized by a Participant to represent the 

Participant in CMSEF matters.

Authorized User means any Person who is an agent or Employee of a Participant or Customer 

of a Participant and is authorized by such Participant to access the SEF by any means. For the 

avoidance of doubt, any Authorized User of a Customer shall not be considered an Authorized 

User of the Sponsoring Broker providing DMA to the Customer by virtue of the DMA relationship 

between the two parties. 

Block Trade means a publicly reportable swap transaction that meets the definition found in 

CFTC Regulation 43.2; specifically a Block Trade:

(1) Involves a swap that is listed on CMSEF;

(2) Occurs away from CMSEF's trading system or platform and is executed pursuant to CMSEF's 

Rules and procedures;

(3) Has a notional or principal amount at or above the appropriate minimum block size applicable 

to such swap; and

(4) Is reported subject to the rules and procedures of CMSEF and the rules described in Part 43 

of the CFTC Regulations, including the appropriate time delay requirements set forth in CFTC 

Regulation 43.5.

Board means the Board of Directors of CMSEF constituted in accordance with these Rules and 

Applicable Law.

Business Day means any day on which CMSEF is open for trading.

By-Laws mean the By-Laws of CMSEF.

CFTC or Commission means the Commodity Futures Trading Commission and any successor 

regulatory agency or authority.
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CFTC Regulations means the rules and regulations of the CFTC, as amended.

Chief Compliance Officer is described under Rule 209. 

Cleared Swap means a Swap that is required to be cleared under Section 2(h)(1)(A) of the CEA 

and CFTC Regulation 39.5 or is accepted for clearing by a Derivatives Clearing Organization 

even though such Swap is not required to be cleared.

Clearing Exception means meeting the requirements for exemption from the clearing 

requirement set forth in Section 2(h)(1) of the Act because one counterparty to the transaction is 

entitled to the exception by virtue of meeting the requirements set forth in Section 2(h)(7) of the 

CEA, CFTC Regulations or CFTC Staff No- Action Letters. 

Clearing Exception Form means a form that entitles a counterparty to enter into a swap with a 

Clearing Exception under the Rules of CMSEF. 

Clearing House means a Derivatives Clearing Organization or non-US central clearing house 

approved by the CFTC that provides clearing services for Swaps traded on CMSEF.

Clearing Member means a member of a Clearing House that is authorized to clear trades for 

Participants or on behalf of a Participant or Authorized Users under the CMSEF Rules.

Client means a Person, other than an individual, that has provided written authority to an Account 

Manager to execute Swaps on CMSEF on behalf of and in the name of that Person. 

CMSEF means Clear Markets North America, Inc.

Compliance Department means anyone that assists CMSEF in the surveillance and 

enforcement of the CMSEF Rules. This includes Employees and agents of CMSEF, including 

Employees and agents of the Regulatory Services Provider.

Control means the possession, direct or indirect, or the power or ability to influence or direct or 

cause the direction of the management and policies of an entity, whether through the ownership 

of securities or otherwise.

Customer has the meaning set forth in CFTC Regulation 1.3(k).

Customer Account means an account held by a Participant on behalf of a Customer.

Derivatives Clearing Organization or DCO has the meaning set forth in Section 1a(15) of the 

CEA.

Direct Market Access or DMA means an arrangement among a Sponsoring Broker, its 

Customer and CMSEF that allows one or more representatives of that Customer to have Trading 

Access using the Participant ID of the Sponsoring Broker. 

Director means any member of the Board of CMSEF.

Disciplinary Offense has the meaning set forth in CFTC Regulation 1.63(a).

Disciplinary Panel means a panel appointed by the CCO pursuant to Rule 513 to conduct 

hearings, render decisions, and impose sanctions involving disciplinary matters pursuant to these 

Rules. 
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Disciplinary Proceedings means all actions taken by CMSEF with respect to potential violations 

of the Rules, as set forth in Chapter 5 of this Rulebook. 

DMA Customer means a Customer of a Sponsoring Broker where representatives of the 

Customer that are Persons are designated by the Sponsoring Broker to have Trading Access to 

the SEF Platform using the Participant ID of the Sponsoring Broker and where such Customer 

signs the DMA Customer Documentation. 

DMA Customer Documentation means the agreements (together with any applicable 

schedules, exhibits or appendices thereto required by CMSEF) in form and substance acceptable 

to CMSEF, that are required to be executed and delivered to CMSEF before a DMA Customer 

may access the SEF Platform. 

DMA Order means an Order or RFQ placed by a DMA Customer using the Participant ID of the 

Sponsoring Broker. 

Eligible Contract Participant or ECP means a Participant as defined by Section 1a(18) of the 

CEA.

Emergency means any occurrence or circumstance that, in the opinion of the Board, or a Person 

or Persons duly authorized to issue such an opinion on behalf of the Board under circumstances 

and pursuant to procedures that are specified, requires immediate action and threatens or may 

threaten such things as the fair and orderly trading in, or the liquidation of or delivery pursuant to, 

any agreements, contracts, swaps or transactions or the timely collection and payment of funds in 

connection with clearing and settlement by a derivatives clearing organization, including: (a) any 

manipulative or attempted manipulative activity; (b) any actual, attempted or threatened corner, 

squeeze, congestion or undue concentration of positions; (c) any circumstances which may 

materially affect the performance of agreements, contracts, swaps or transactions, including 

failure of the payment system or the bankruptcy or insolvency of any participant; (d) any action 

taken by any governmental body, or any other registered entity, board of trade, market or facility 

which may have a direct impact on trading or clearing and settlement; (e) at the request of the 

CFTC; and (f) any other circumstance which may have a severe, adverse effect upon the 

functioning of CMSEF. 

Emergency Rules has the meaning set forth in Rule 419.

Employee has the meaning found in CFTC Regulation 1.59.

Exchange Act means the Securities Exchange Act of 1934, as amended.

Final Decision has the meaning set forth in CFTC Regulation 1.63(a).

Financial Entity means any Participant meeting the criteria set forth in Section 2(h)(7)(C) of the 

CEA.

Futures Commission Merchant or FCM has the meaning set forth in Section 1a(28) of the CEA.

Independent Software Vendor or ISV means a Person that provides Participants with a system 

or platform to route orders to CMSEF but does not provide Participants with the ability to execute 

swaps on system or platform. An ISV cannot be a Participant.

Investigation means a process by which the Compliance Department determines whether a 

violation of CMSEF Rules has occurred. 
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Investigation Report has the meaning as described in Rule 504.

Legal Entity Identifier has the meaning described in CFTC Regulation 45.6.

Major Swap Participant is defined in Section 1a(33) of the CEA.

Market Data means any data or other information contained in, displayed on, or generated by 

transactions entered into or executed on CMSEF.

Market Date Vendor means a vendor who has entered into an agreement with CMSEF to 

distribute Market Data.

NFA means the National Futures Association.

Officer means an officer of CMSEF.

Order means an actionable bid or offer (i) in response to a Request For Quote, (ii) displayed in 

the Order Book, or (iii) modification of an RFQ or price displayed in the Order Book.

Order Book means the Central Limit Order book part of the CMSEF trading system in which all 

Participants have the ability to enter multiple bids or offers, observe or receive bids and offers 

entered by other Participants, and execute such bids and offers.

Participant means any Person that has been granted Trading Privileges under the CMSEF Rules 

and who may trade for its own account or for or on behalf of a Customer.

Participant Data means any and all data and other information submitted to CMSEF by the 

Participant.

Participant Documentation means any such agreements and subsequent addenda or 

amendments required by CMSEF before a Participant will be granted Trading Privileges.

Participant ID is a unique identifier assigned to each Participant by CMSEF.

Person means any natural person or entity.

President means the Person appointed by the Board as CMSEF’s chief executive officer in 

accordance with CMSEF’s By Laws and duties as determined by the Board.

Proprietary Account is defined by CFTC Regulation 1.3(y).

Proprietary Data means any information with respect to any Person or the identity of such 

Person or their transactions or trading positions.

Public Director means a director of CMSEF who is not an Employee or agent of CMSEF and 

whose compensation is not tied to the performance of CMSEF.

Regulatory Oversight Committee or ROC means the committee of the Board as described in 

Rule 203.

Regulatory Services Agreement means the agreement by which CMSEF delegates certain 

market surveillance, trade practice surveillance, and other regulatory compliance related services 

to a Regulatory Services Provider.
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Regulatory Services Provider means the organization that provides regulatory services to 

CMSEF under a Regulatory Services Agreement.

Reporting Counterparty means a Participant that is designated as such under CFTC Regulation

45.1 and 45.8.

Request for Quote or RFQ means a request for quote sent by a Participant to other Participants 

for the purpose of getting bids or offers for a specific instrument under these Rules.

Required Swap Creation Data is defined under CFTC Regulation 45.1.

Required Transaction means any Swap transaction that is required under Section 2(h)(8) of the 

CEA to be executed on a SEF.

Review Panel means a panel formed for the purpose of deciding whether there has been a 

violation of CMSEF Rules.

Rules mean any rule adopted from time to time by CMSEF relating to the operation of or conduct 

of trading on CMSEF.

SEC means the Securities and Exchange Commission and any successor agency or regulatory 

authority.

SEF means a swap execution facility as registered with the CFTC and defined in Section 1a(50) 

of the CEA. CMSEF is a SEF.

Settlement Agreement has the meaning set forth in CFTC Regulation 1.63(a).

Sponsoring Broker means a Participant that designates one or more of its Customers as DMA 

Customers under the CMSEF Rules. 

Swap means any instrument defined as a swap under Section 1a(47) of the CEA and as defined 

in further CFTC Regulations, and is traded on CMSEF.

Swap Data Repository or SDR means any swap data repository registered with the CFTC as 

defined by Section 1a(48) of the CEA.

Swap Dealer means a swap dealer as defined in Section 1a(49) of the CEA.

Trade means any executed transaction for the purchase or sale of a Swap on CMSEF.

Trading Hours means the hours during which Participants may regularly execute trades on 

CMSEF.

Trading Privileges means the rights granted to a Participant to enter Orders and execute Swap 

transactions on CMSEF.

User ID means a unique identifier issued to each Authorized User, which enables CMSEF to 

identify each individual accessing the CMSEF system.
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Chapter 2 Governance

Rule 201 Board

(i) CMSEF shall be governed by the Board according to the Bylaws of Clear Markets North 

America, Inc.

(ii) At all times following the CFTC granting CMSEF permission to operate as a SEF the Board 

shall be composed of at least 35%, but in no case less than two, or fewer than the minimum 

number or percentage of Public Directors required by CFTC Regulations.

(iii) Public Directors can only be appointed or removed by an absolute majority of the members of 

the Board or Stockholders, either:

a. in a meeting;

b. by written consent of all Directors in lieu of a meeting; or

c. by written consent of a majority of Stockholders in lieu of a meeting.

(iv) Public Directors shall serve for two-year terms from their date of election, and shall meet the 

following criteria:

a. Public Directors may not be members of CMSEF;

b. Public Directors may not be salaried Employees of CMSEF;

c. Public Directors may not primarily perform services for CMSEF in a capacity other 

than as a member of the Board; and

d. Public Directors shall not be officers, principals or Employees of a Participant of 

CMSEF.

(v) Members of the Board, including Public Directors must be of sufficient integrity and have 

relevant experience in financial markets.

(vi) Non-executive Directors and Public Directors compensation shall not be linked to the 

performance of CMSEF.

Rule 202 Nominating Committee

The Board shall create a Nominating Committee to identify and nominate qualified individuals to 

serve on the Board as required by Applicable Law. The Board shall take this action no later than 

the date set for compliance as set by the CFTC in order for CMSEF to operate as a SEF. The 

Committee shall include no fewer than the minimum number of Public Directors required by the 

CFTC at all times following the compliance date set by the CFTC.

Rule 203 Regulatory Oversight Committee

The Board shall create a Regulatory Oversight Committee chaired by the Chief Compliance 

Officer. A majority of the members of the Regulatory Oversight Committee shall be Public 

Directors. The Regulatory Oversight Committee shall report to the Board and shall be 

responsible for:

(i) overseeing CMSEF’s regulatory program, including but not limited to audits, 

examinations, Investigations, financial reporting, market surveillance and record keeping;

(ii) monitoring compliance with all regulatory requirements, including those of the CFTC and 

SEC;

(iii) review the performance of the Chief Compliance Officer and the Compliance Department;

(iv) review and approve the annual compliance budget and resources;

(v) review and approve all proposed regulatory changes or changes to CMSEF’s regulatory 

program;

(vi) review any Investigations conducted by CMSEF;

(vii) prepare an annual report to the Board and the CFTC on CMSEF’s regulatory program; 
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(viii) monitoring the sufficiency, independence and effectiveness of the CMSEF’s regulatory 

program; and

(ix) undertake any additional duties required under these Rules or assigned to it by the 

Board.

Rule 204 Additional Standing Committees

The Board may create additional standing committees as may be necessary from time to time.

Rule 205 Ability of the Board to Review Decisions

The Board has the authority to review and affirm, modify, or overrule any and all actions taken by 

any Committees of the Board.

Rule 206 Ability of the Board to Amend these Rules

Subject to any required approval or filing required by the CFTC, the Board may from time to time 

amend, repeal or adopt new Rules. All such amendments, repeals, or new Rules shall become 

effective on the date specified by the Board unless otherwise directed by the CFTC.

Rule 207 Eligibility

A Person may not serve on the Board or a Disciplinary Panel, or be an Officer or Employee of 

CMSEF if the individual:

(i) has been convicted of a felony listed in Section 8a(2)(D)(ii) through (iv) of the CEA; 

(ii) is subject to a denial, suspension or disqualification from serving on a disciplinary 

committee, arbitration panel, or governing board of any self-regulatory organization as 

that term was defined in the Exchange Act;

(iii) was found by Final Decision in the past three (3) years of a self-regulatory organization, 

administrative law judge, a court of competent jurisdiction, the CFTC or the SEC to have 

committed a disciplinary offence;

(iv) entered into a Settlement Agreement within the past three (3) years in which any of the 

findings or, in absence of such findings, any of the acts charged, included a Disciplinary 

Offense;

(v) is currently suspended from trading on any contract market, is suspended or expelled 

from membership with any self-regulatory organization, is serving any sentence of 

probation or owes any portion of any fine imposed pursuant to either (A) a finding by a 

Final Decision of a self-regulatory organization, an administrative law judge, a court of 

competent jurisdiction or the CFTC or SEC that the Person committed a disciplinary 

offence, or (B) a Settlement Agreement in which any of the findings or, in absence of 

such findings, any of the acts charged, included a disciplinary offence;

(vi) is subject to an agreement with any self-regulatory organization not to apply for 

membership; or

(vii) is subject to an agreement with the CFTC not to apply for registration.

In the event any of the above events occur with respect to a Board Member, member of a 

Disciplinary Panel, Officer, or Employee of CMSEF, the individual shall immediately disclose the 

occurrence to the CCO.
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Rule 208 Officers

The Board shall appoint a President, Chief Compliance Officer, Chief Financial Officer, Chief 

Technology Officer and other such officers and the Board may deem necessary from time to time. 

The President shall be the Chief Executive Officer. Any Officer may also be a board member, 

Employee or officer of any of CMSEF’s Affiliates or subsidiaries.

Rule 209 Chief Compliance Officer

The Board shall appoint an individual to serve as the CCO of CMSEF. The Board shall approve 

the compensation of the CCO. Removal of the CCO shall require the approval of a majority of the 

Board. CMSEF shall notify the CFTC of the removal of the CCO and the appointment of any new 

CCO, whether interim or permanent, within two business days of such appointment. 

The CCO shall be an individual who:

(i) has the background and experience necessary to handle the responsibilities of the 

position; and

(ii) would not be disqualified from serving as a Director of CMSEF.

The CCO shall:

(i) report directly to the Board;

(ii) meet with the Board at least annually; 

(iii) meet with the Regulatory Oversight Committee at least quarterly (each such meeting may 

occur in person or by means of conference telephone); 

(iv) provide any information regarding the regulatory program of the SEF operated by 

CMSEF that is requested by the Board or the Regulatory Oversight Committee;

(v) report directly to the Chief Executive Officer or President of CMSEF;

(vi) be responsible for implementing and overseeing the SEF’s compliance with the Core 

Principles set forth in Section 5h of the CEA and Part 37 of the CFTC Regulations;

(vii) establish and implement written policies and procedures designed to prevent violations of 

CFTC, and CEA regulations and take reasonable steps to ensure compliance with such 

regulations;

(viii) establish and administer a compliance manual which ensures compliance with all 

applicable laws and rules and is designed to prevent ethical violations;

(ix) supervise CMSEF’s self-regulatory program. This includes market surveillance, trade 

practice surveillance, real-time market monitoring, compliance with the CEA and CFTC

Regulations; 

(x) oversee and manage the CMSEF Compliance Department;

(xi) act as a point of contact with the CFTC and other regulators regarding requests for 

information, including books and records requests; and

(xii) In consultation with the Board or the CEO of CMSEF, resolve any conflicts of interest that 

may arise, including: 

a. conflicts between business considerations and compliance requirements;

b. conflicts between business considerations and the requirement that the SEF 

operated by CMSEF provide fair, open, and impartial access as set forth in CFTC 

Regulation 37.202; and 

c. conflicts between CMSEF’s management and members of the Board.
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Rule 210 Conflicts of Interest

CMSEF Officers and members of the Board, Disciplinary Panels or the Regulatory Oversight 

Committee shall not participate in deliberations or voting in any matter involving a situation where 

they have a conflict of interest. 

A conflict of interest shall include situations where such individual apart from his interest in 

CMSEF or an affiliate:

(i) Is a named party in interest;

(ii) Is an employer, Employee, or fellow Employee of a named party in interest;

(iii) Is associated with a named party in interest through a “broker association” as defined 

in CFTC Regulation 156.1;

(iv) Has any other significant, ongoing business relationship with a named party in 

interest, not including relationships limited to executing futures or option transactions 

opposite of each other or to clearing futures or option transactions through the same 

clearing member; or

(v) Has a family relationship with a named party in interest.

It shall also include situations where the individual has a direct financial interest in the result of 

the deliberations or vote or has any other personal interests, which may be affected by the 

outcome of the vote or deliberations. 

Prior to the commencement of deliberations, each member of the deliberating body shall disclose 

to the CCO whether such member has or believes that he may have a conflict of interest. All 

conflicts of interest must be documented by the CCO.

The CCO shall then determine whether any member of the relevant deliberating body has a 

conflict of interest. 

Regardless of the determination of the CCO, no Officer or member of the Board, Disciplinary 

Panel or the Regulatory Oversight Committee shall take part in deliberations and voting on any 

significant action if such Person has a direct or indirect substantial financial interest in the result 

of the deliberation or vote.

Individuals who are required to abstain from deliberations and voting pursuant to the above may 

participate in discussions and provide information if the other members unanimously determine 

that such individual’s information is relevant but such individual but may not vote nor be present 

for voting. In determining whether the individual shall be included in discussions, the members 

shall consider the following: 

(i) whether the individual’s participation is consistent with the public interest; and

(ii) whether the member has a unique or special expertise, knowledge or experience in 

the matter under consideration.

Prior to any determination pursuant to the above, the deliberating body must fully consider the 

position information which is the basis for the member's direct and substantial financial interest in 

the result of a vote on a significant action pursuant to the above. No Person who is a named 

party or has a relationship with a named party may participate in any deliberations, regardless of 

any other factors. 

The Board shall document that the conflicts determination procedures required by this section 

have been followed. Such records shall include:

(i) The names of all members who attended the meeting in person or who otherwise 

were present by electronic means;

(ii) The name of any member who voluntarily recused himself or herself or was required 

to abstain from deliberations and/or voting on a matter and the reason for the recusal 
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or abstention, if stated; and

(iii) Information on the position information that was reviewed for each member.

In determining whether a conflict of interest exists regarding a significant action, the determining 

body must include a review of the following:

(i) Gross positions held at CMSEF in the member's personal accounts or “controlled 

accounts,” as defined in CFTC Regulation 1.3(j);

(ii) Gross positions held at CMSEF in proprietary accounts, as defined in CFTC 

Regulation 1.17(b)(3), at the member's affiliated firm;

(iii) Gross positions held at CMSEF in accounts in which the member is a principal, as 

defined in CFTC Regulation 3.1(a);

(iv) Net positions held at CMSEF in “Customer” accounts, as defined in CFTC Regulation 

1.17(b)(2), at the member's affiliated firm; and,

(v) Any other types of positions, whether maintained at CMSEF or elsewhere, held in the 

member's personal accounts or the proprietary accounts of the member's affiliated 

firm that CMSEF reasonably expects could be affected by the significant action.

Taking into consideration the exigency of the significant action, such determinations should be 

based upon:

(i) The most recent large trader reports and clearing records available to CMSEF;

(ii) Information provided by the member with respect to positions pursuant to CFTC 

Regulation 1.69(b)(2)(ii); and

(iii) Any other source of information that is held by and reasonably available to CMSEF.

Each Disciplinary Committee or Hearing Panel shall include sufficient different membership 

interests in order to ensure fairness and to prevent special treatment or preference for any 

Person in the conduct of its respective responsibilities.

At least one member of any Disciplinary Panel or Hearing Panel shall be a Person who is not a 

member of CMSEF whenever a Disciplinary Panel or Hearing Panel is acting with respect to a 

disciplinary action in which 

(i) the subject of the action is a member of CMSEF's Board or a Disciplinary Panel 

or Hearing Panel;

(ii) any of the charged, alleged or adjudicated contract market rule violations 

involve:

a. Manipulation or attempted manipulation of the price of a commodity, a 

futures contract or an option on a futures contract, or

b. Conduct which directly results in financial harm to a non-member of 

CMSEF.

This Rule governing Conflicts of Interest shall apply in an Emergency, as described in Rule 419. 

The Board shall determine by majority vote the Person that shall fill in for the CCO in all cases 

where the CCO is unable to fulfill his responsibilities as CCO due to a conflict of interest. The 

CCO shall not participate in such deliberations. 

Rule 211 Non-Public Information

No Officer, Employee, consultant, or member of the Board, a Committee, or a Disciplinary Panel 

shall use or disclose any non-public information obtained in connection with his or her official 

duties for any purpose other than the performance of his or her official duties.
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When necessary or required by the CFTC or other regulators, CMSEF may share non-public 

information with one or more regulators, or SEFs, DCMs, or DCOs registered with the CFTC with 

which the member has a connection.

CMSEF is required to share information with the CFTC upon request, in a form and manner that 

is acceptable to the CFTC. CMSEF is also required to share any necessary information in order 

to perform the functions described in Section 5h of the CEA.

Rule 212 Reporting to the CFTC

The Board shall submit a written report about any of the following to the CFTC:

(i) Board rejection of a recommendation or action of the Regulatory Oversight 

Committee; or

(ii) the removal of a member of the Board or an Officer due to his becoming ineligible 

under Rule 207.

Rule 213 Reserved

Rule 214 Reserved

Rule 215 Reserved

Rule 216 Information Sharing Agreements

CMSEF shall enter into information sharing agreements or other arrangements necessary to 

permit CMSEF to obtain necessary information, which will enable CMSEF to establish and 

enforce rules, which will enable the motoring of trading and trade processing. CMSEF will 

provide information to the CFTC upon request. CMSEF will also participate in international 

information sharing agreements as may be required by the CFTC from time to time. As part of 

any information sharing agreements, CMSEF may:

(i) share information and documents concerning current and past Participants and/or 

Customers as necessary for SEF to comply with its SRO obligations, to other 

markets;

(ii) assist in market surveillance with other markets as necessary for SEF to comply with 

its SRO obligations, to other markets;

(iii) share information and documents concerning current and past Investigations; and/or

(iv) require current and past Participants and/or Customers to provide information and 

documents, which have been requested by other markets or regulators with which 

CMSEF has an information sharing agreement.

Rule 217 Agreements with Regulatory Services Providers

In the future, as permitted by CEA and CFTC Rules and Regulations, CMSEF may contract with 

a Regulatory Services Provider (RSP) to provide some regulatory services to CMSEF. In the 

event CMSEF contracts with an RSP, the terms and conditions under which an RSP will provide 

Regulatory Services to CMSEF will be governed by a written Regulatory Services Agreement 

(RSA) between CMSEF and the RSP being contracted. CEA and CFTC Rules and Regulations 

permit CMSEF to outsource certain investigative, regulatory, and surveillance functions to an 
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RSP. If CMSEF chooses to outsource such services, CMSEF shall retain the ultimate decision 

making authority with respect to any regulatory functions that are contracted to an RSP.

Rule 218 Maintenance of Books and Records

(i) CMSEF and all Participants (and DMA Customers) shall maintain all books and 

records (including all audit trail data and reconstructions) required to be maintained 

pursuant to the CEA and CFTC Regulations 43.3(h) and 45.2(a) and CMSEF and all 

Participants (and DMA Customers) must provide information to the CFTC upon 

request, in a form, time and manner acceptable to the CFTC. Such requests may be 

on a routine or non-routine basis (i.e. if the Participant is under Investigation pursuant 

to Chapter 5 of this Rulebook).

(ii) Such books and records shall be kept for the life of each Swap transacted pursuant 

to these Rules and five years following the termination of such Swap. Participants 

and their Customers shall make such books and records readily accessible to 

CMSEF for inspection, in each case in the form and manner required under the CEA 

and CFTC Regulations. CMSEF may request records through a written 

communication from the CMSEF Marketing Department to the Person designated by 

the Participant as the Compliance Contact. The Participant’s Business Contact will 

serve as a backup. CMSEF requests for books and records may be made on a 

routine basis and requests may also be made for non-routine data from the 

Participant. 

(iii) CMSEF may disclose information it obtains from Participants and Customers’ books 

and records, to any government agency, self-regulatory organization or other Person, 

information concerning or associated with a Participant or other Person if the CMSEF 

believes such disclosure is necessary and appropriate in exercising a legal or 

regulatory function, whether or not a formal arrangement governing the disclosure 

exists or a request for information was made.

Rule 219 Swap Recordkeeping

As prescribed by CFTC Regulation 45.2(a)(1), CMSEF shall keep full, complete, and systematic 

records, together with all pertinent data and memoranda, of all activities relating to the business 

of such entity or person with respect to swaps, as prescribed by the Commission. Such records 

shall include, without limitation, all records required by Part 37 of the CFTC Regulations.

(i) Record retention. As prescribed by CFTC Regulation 45.2(c), all records required to 

be kept pursuant to this section shall be retained with respect to each swap 

throughout the life of the swap and for a period of at least five years following the 

final termination of the swap.

(ii) Retention form. As prescribed by CFTC Regulation 45.2(d), records required to be 

kept pursuant to this section must be kept as follows: Records required to be kept by 

CMSEF may be kept in electronic form, or kept in paper form if originally created and 

exclusively maintained in paper form, so long as they are retrievable, and information 

in them is reportable, as required by this section.

(iii) Record retrievability. As prescribed by CFTC Regulation 45.2(e), records required to 

be kept by CMSEF pursuant to this section shall be retrievable as follows: Each 

record required by this section or any other section of the CEA to be kept by a 

CMSEF shall be readily accessible via real time electronic access by the registrant 

throughout the life of the swap and for two years following the final termination of the 

swap, and shall be retrievable by the registrant within three business days through 
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the remainder of the period following final termination of the swap during which it is 

required to be kept.

(iv) Record inspection. As prescribed by CFTC Regulation 45.2(h), all records required to 

be kept pursuant to this section shall be open to inspection upon request by any 

representative of the Commission, the United States Department of Justice, or the 

Securities and Exchange Commission, or by any representative of a prudential 

regulator as authorized by the Commission. Copies of all such records shall be 

provided, at the expense of the entity or person required to keep the record, to any 

representative of the Commission upon request. Copies of records required to be 

kept by CMSEF shall be provided either by electronic means, in hard copy, or both, 

as requested by the Commission, with the sole exception that copies of records 

originally created and exclusively maintained in paper form may be provided in hard 

copy only. 

Chapter 3 Participants

Rule 301 Jurisdiction

All applicants of CMSEF must agree to the following in writing:

ALL CLEAR MARKETS SWAP EXECUTION FACILITY PARTICIPANTS AND AUTHORIZED 

USERS, WHETHER SUCH PARTICIPANT OR AUTHORIZED USER ACCESSES CMSEF 

DIRECTLY OR THROUGH AN INTERMEDIARY, AND ANY CLEARING MEMBER WHICH 

GUARANTEES SWAPS TRADED ON CMSEF, HEREBY AGREE THAT THESE RULES ARE 

BINDING UPON ANY SUCH PERSON OR ENTITY AND ITS EMPLOYEES AND CUSTOMERS. 

IT IS FURTHER AGREED THAT THESE RULES ARE APPLICABLE AND THAT SUCH 

PERSONS ARE SUBJECT TO THE JURISDICTION OF CMSEF, THE CFTC, AND ANY 

RELEVANT SELF-REGULATORY ORGANIZATION. ALL SUCH PERSONS HEREBY AGREE 

TO COOPERATE FULLY IN THE EVENT CMSEF, THE CFTC, OR A SELF-REGULATORY 

ORGANIZATION CONDUCTS ANY INQUIRY, INVESTIGATION, OR AUDIT OF ANY 

PARTICIPANT OR ACTIVITY CONDUCTED ON THIS SWAP EXECUTION FACILITY.

Rule 302 Trading Privileges

Subject to the requirements, procedures and conditions set forth in this Chapter and any 

limitation, restriction or revocation from time to time imposed by CMSEF, trading privileges and 

electronic access to the Platform shall be offered to Participants. Trading privileges are nontransferable, non-assignable and may not be sold or leased. By virtue of obtaining trading 

privileges, a Participant shall not obtain any equity or other interest in CMSEF, including voting 

rights or rights to receive any dividends or other distributions, whether arising from a dissolution, 

merger, or consolidation involving CMSEF or otherwise. 

Subject to this Rule, CMSEF deny Trading Privileges to any Person: 

(i) if such Person is unable satisfactorily to demonstrate a capacity to adhere to all 

applicable Rules and Applicable Law; 

(ii) if such Person would bring CMSEF into disrepute; or 

(iii) for such other cause as the CMSEF may decide. 

Subject to this Rule, CMSEF may determine not to permit any Person to keep its Trading 

Privileges, or may suspend, remove or limit such Trading Privileges if such Person: 

(i) fails to meet any of the qualification requirements for Trading Privileges after such 

Trading Privileges have been approved; 

(ii) fails to meet any condition placed by CMSEF on such Trading Privileges; 
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(iii) violates any agreement with the CMSEF, a Clearing Member or a DCO; or 

(iv) has summary action taken against it by CMSEF under these Rules. 

In the case of any suspension, revocation or limitation of the Trading Privileges of any Participant 

pursuant to this Rule, CMSEF may also suspend, revoke or limit the Trading Privileges of such 

Participant’s Authorized Users as CMSEF deems necessary to protect other Participants and the 

integrity of CMSEF.

In the case of any suspension, revocation or limitation of the Trading Privileges of any Authorized 

User of any Participant pursuant to this Rule, CMSEF, in its sole discretion, may also suspend, 

revoke or limit the Trading Privileges of such Participant or such Participant’s other Authorized 

Users as CMSEF deems necessary to protect other Participants and the integrity of the CMSEF. 

Any decision by CMSEF to deny, suspend, revoke or limit the Trading Privileges of any Person 

will be undertaken by CMSEF in an impartial, transparent, fair and nondiscriminatory manner.

Rule 303A Eligibility Criteria for Participants and Access

Access to CMSEF’s Platform to any ECP shall be provided in a fair, impartial and nondiscriminatory manner. 

To be eligible to be a Participant (including being a party to a Block Trade), an applicant must 

demonstrate to the satisfaction of CMSEF that it:

(i) is an ECP that is eligible to enter into Swaps it wishes to trade on CMSEF;

(ii) completed and submitted the Participant Documentation and any other 

documentation requested by CMSEF;

(iii) is validly organized, in good standing, and authorized to trade Swaps on CMSEF;

(iv) is not in bankruptcy;

(v) is not an affiliate of CMSEF;

(vi) holds all necessary licenses and registrations required by applicable law;

(vii) is in compliance with all registration or authorization requirements of its home 

country, 

(viii) is in compliance with all recordkeeping requirements in these Rules and Applicable 

Law;

(ix) is not disqualified under Section 8a(2) of the CEA;

(x) distributed the Rules to its Authorized Persons, Authorized Users and Customers; 

(xi) is not an ISV or automated trading system;

(xii) is a reputable business;

(xiii) is not an individual;

(xiv) meets any other CMSEF or CFTC criteria; and

(xv) is not disqualified in any other way.

In order to be admitted, the Participant shall represent in writing that it meets all of the eligibility 

criteria set forth in this Rulebook. Once admitted, the Participant shall continue to comply with all 

eligibility criteria and shall notify CMSEF in writing if it ceases to meet any of the applicable 

eligibility criteria. CMSEF shall monitor all Participants to ensure that each Participant continues 

to remain an ECP.

Upon request, all Participants shall provide the names of its Customers and Authorized Users to 

CMSEF.
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Each Participant must represent in writing to CMSEF that it believes, based on reasonable 

efforts, that all of the Participant’s Customers for whom the Participant effects transactions on 

CMSEF are ECPs. The Participant shall notify CMSEF immediately if it becomes aware that this 

representation is no longer true. 

All Participants must be members of or have entered into an agreement with a DCO or registered 

clearing organization to clear Swaps that are executed on or pursuant to the Rules of CMSEF.

A Participant that is a Clearing Member may enter an Order, only if: 

(i) the Participant has entered into any necessary documentation with its counterparty; 

and

(ii) the Participant otherwise meets the criteria set forth in these Rules.

Participants that are not Clearing Members shall be eligible to enter an Order pursuant to these 

Rules, only if: 

(iii) the Participant (if the Participant is an Account Manager, only if the Account Manager 

on behalf of its client account(s)) can verify on a pre-trade basis that a Clearing 

Member has assumed the financial responsibility to clear such Cleared Swaps for the 

Participant with the applicable DCO;

(iv) the Participant has entered into any necessary documentation with its counterparty; 

and 

(v) the Participant otherwise meets the criteria set forth in these Rules.

A Participant that is registered as a Swap Dealer must undertake and be able to discharge:

(i) any pre-trade disclosure it may owe to such other Participant when engaging in a 

Swap transaction on a disclosed basis; and

(ii) any due diligence and analysis obligations it may owe to its counterparty. 

Rule 303B Eligibility Criteria for Independent Software Vendors

An Independent Software Vendor (ISV) seeking to provide access to CMSEF must be an entity 

that is duly organized and in good standing, have no legal restrictions that would prohibit it from 

operating as an ISV, satisfy CMSEF’s technological integrity requirements, complete the 

necessary ISV access documentation, agree to abide by the Rules and Applicable Law, consent 

to the jurisdiction of CMSEF, pay the fees that may be established by CMSEF from time to time, 

and not adversely affect CMSEF’s ability to comply with Applicable Law. Access to CMSEF’s 

Platform to any ISV shall be provided in a fair, impartial and non-discriminating manner. Persons 

seeking access to CMSEF or a Platform through an ISV must be a Participant or Authorized 

Person specifically authorized by a Participant to have such access.

ISVs affiliated with a SEF or swap broking operation must also agree to grant ISV access to 

CMSEF or a CMSEF affiliate chosen by CMSEF.

Rule 303C Direct Market Access

Only a Sponsoring Broker may sponsor a DMA Customer. 

All trades in Cleared Swaps executed via DMA connection must be guaranteed by a Sponsoring 

Broker that assumes financial responsibility for all activity through the DMA connection.
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Each DMA Customer must execute the DMA Customer Documentation as a condition of being 

granted access to CMSEF. 

A Sponsoring Broker shall assist CMSEF in any Investigation into potential violations of the 

CMSEF Rules, CFTC Regulations or the CEA, which occur through or with respect to a DMA 

connection guaranteed by such Sponsoring Broker. Such assistance must be timely and may 

include requiring any DMA Customer to produce documents, to answer questions from CMSEF, 

and/or to appear in connection with an Investigation. 

A Sponsoring Broker shall suspend or terminate the Trading Access of a DMA Customer or any 

Authorized Trader associated with such DMA Customer if CMSEF determines that the actions of 

the DMA Customer or any of its Authorized Traders threaten the integrity of CMSEF or liquidity of 

any Swap or violate any CMSEF Rule or if the DMA Customer or any of its Authorized Traders 

fails to cooperate in an Investigation. 

Any trading activity by a DMA Customer using a Participant ID shall be considered to be trading 

activity by the Participant. Such Participant shall be liable for any violations in connection with 

such trading activity as if the Participant had engaged in trading activity. 

Rule 303D Withdrawing from CMSEF

A Person that has access to CMSEF may withdraw from CMSEF at its own discretion by

providing written notice. After withdrawing from CMSEF, the Person’s obligations to CMSEF 

cease, except the Person remains under the jurisdiction of CMSEF with respect to acts and 

omissions made while such Person had access to CMSEF. The Person remains subject to the 

Participation Agreement, the CMSEF Rulebook and any other agreements with respect to acts or 

omissions that occur while the Person has access to CMSEF.

Rule 304 Authorized Users

All Participants must appoint at least one Employee as an Authorized User. Participants may 

appoint additional Employees, agents or authorized contractors who are individuals to act as 

Authorized Users. Participants must specify whether additional Authorized Users are entitled:

(i) to exercise Trading Privileges on behalf of the Participant; or 

(ii) to access CMSEF on “view only” basis. 

To add Authorized Users, Participants shall notify the CMSEF in the form and manner prescribed 

by CMSEF. All Authorized Users must consent to abide by these Rules and Applicable Law prior 

to accessing the SEF through the Participant. CMSEF may also require each Authorized User to 

satisfy additional requirements as CMSEF may prescribe from time to time. All Authorized Users 

shall be subject to the disciplinary authority of CMSEF and subject to possible fine or restriction or 

revocation of Trading Privileges if they are found to have violated any of these Rules, or the CEA 

and CFTC Regulations, as they apply to swaps trading on CMSEF.

CMSEF may, in its sole discretion, revoke, suspend, or limit the designation of a Person as an 

Authorized User, and shall promptly notify the Participant in accordance with the procedures 

established by CMSEF. 

Participants may at any time revoke an authorization granted to an Authorized User or a User ID 

granted to any other Person by the Participant by providing written notice of such revocation to 

CMSEF.

Participants shall take immediate and appropriate measures to ensure that, after any such 

revocation, the affected Authorized User shall not have access to the SEF and the affected 

Person shall not utilize its User ID.
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All Participants agree to be bound by these Rules and these Rules shall also apply to each of a 

Participant’s Authorized Users. Each Participant is responsible for the actions of its Authorized 

Users.

Rule 305 CMSEF Platform Security

Each Participant shall:

(i) be solely responsible for controlling and monitoring the use of all User IDs issued to 

it, or its Authorized Users by CMSEF;

(ii) ensure that each Person accessing the SEF using such User IDs is assigned a 

unique password and that each password is used only by the Person to whom it is 

assigned; and

(iii) notify CMSEF promptly upon becoming aware of any unauthorized disclosure or use 

of User IDs or passwords, or of any other reason for deactivating User IDs or 

passwords. Each Participant shall be bound by any actions taken through the use of 

its User IDs or passwords, including the execution of transactions, whether or not 

such actions were authorized by such Participant or any of its Supervised Persons, or 

whether or not such transactions are executed by an Authorized User of the

Participant.

Rule 306 Participant Application Process

CMSEF shall require Persons who wish to become a Participant on CMSEF to:

(i) submit a complete and signed CMSEF User Agreement;

(ii) agree in writing to abide by CMSEF Rules and applicable law; 

(iii) appoint a third party agent acceptable to CMSEF as its US representative if the 

Person is located outside the United States as required under CFTC Regulation 

15.05; and

(iv) provide any additional information requested by CMSEF.

CMSEF may conduct an Investigation or verify any information provided by a potential 

Participant.

CMSEF at its sole discretion, may reject a potential Participant’s application or terminate a 

Participants status if:

(i) such Person is unable to satisfy the eligibility criteria set forth in these Rules;

(ii) such Person is unable to demonstrate that they can adhere to all applicable CMSEF 

Rules and applicable law; and

(iii) would reflect badly upon CMSEF or its other Participants.

Rule 307 Authorized Representatives

All Participants shall designate one or more individuals as Authorized Representatives who will 

be the official points of contact for CMSEF. Authorized Representatives shall:

(i) meet the eligibility criteria for Rule 207;

(ii) represent the Participant on CMSEF committees;

(iii) receive CMSEF notices on behalf of the Participant; and

(iv) be empowered to act on behalf of the Participant.

Participants are required to keep CMSEF advised of the most current contact information for their 

Authorized Representatives and to notify CMSEF if an Authorized Representative is no longer 

qualified under Rule 207.
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Rule 308 Customers of Participants

Participants are required to know their Customers and are required to act in the best interests of 

their Customers at all times. Participants found to not to be acting in the best interests of their 

Customers shall be subject to suspension or revocation of their access privileges.

Participants shall not enter an Order in the name of a Customer unless that Customer has 

entered into a written agreement with the Participant authorizing the Participant to enter Orders 

on terms that may be decided by CMSEF from time to time.

Written agreements between Participants and their Customers must contain at least:

(i) the full legal name and identifying information of the Customer;

(ii) a description of the Customer’s business if acting as agent;

(iii) a representation from the Customer that it is an ECP;

(iv) that the Customer consents to the jurisdiction of CMSEF;

(v) that the Customer will comply with any applicable CMSEF Rules;

(vi) that the Customer will maintain and make available for inspection its books and 

records as required to enforce CMSEF Rules as they apply to CMSEF; and

(vii) consent to monitoring of its trading activities by CMSEF and CMSEF’s Regulatory 

Services provider. 

The Customer must notify the Participant if the Customer ceases to meet the applicable ECP 

criteria.

Rule 309A Minimum Financial Standards 

Each Participant shall:

(i) maintain an account with a Clearing Member that provides for the clearing of all 

Trades that such Participant executes on CMSEF for its own account; and 

(ii) cause each Customer on whose behalf it acts to maintain an account with a Clearing 

Member that provides for the clearing of all Trades that Participant executes on 

CMSEF on behalf of such Customer. 

Each Participant or Authorized User shall stay within the trading limits established for their own 

account by their Clearing Member. Each Participant or Authorized User shall provide notice to 

CMSEF of such trading limits. Each Participant or Authorized User shall provide CMSEF with 

immediate written notice of any change in such trading limits. 

At least once a year, each Participant or Authorized User shall provide CMSEF with a written 

certification that:

(i) Participant is and continues to be an ECP; and 

(ii) as applicable, all the Customers on whose behalf the Participant or Authorized User

has executed or will execute trades are also ECPs.

Rule 309B Minimum Financial Standards Reporting 

Each Participant must maintain all records required by the CEA, CFTC Regulations or these 

Rules, including all records of trading activity in the underlying commodity and related markets as 

it applies to swaps traded on CMSEF. Participants must make this information available at the 

request of CMSEF, the CFTC or the Department of Justice.

Each Participant must notify CMSEF immediately upon becoming aware that it fails to satisfy the 

minimum financial requirements applicable to it, including the requirement to qualify as an ECP. 
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Participants shall submit financial and related information to CMSEF or the RSP, as applicable, in 

the form and manner requested. A Participant that is unable to demonstrate to CMSEF that it is 

in compliance with such minimum financial requirements shall not engage in transactions subject 

to these Rules except for the purpose of closing open positions. 

Participants that are registered with any SRO shall comply with all Applicable Law related to 

minimum financial reporting and recordkeeping requirements. Participants shall provide CMSEF 

with copies of any reports they are required to file with the CFTC pursuant to CFTC Regulation 

1.12 as it applies to swaps traded on CMSEF.

Rule 310 Authority to Impose Restrictions

In order to ensure the protection of CMSEF, Customers and other Participants, CMSEF may 

impose restrictions on any Participants subject to early warning requirements under CFTC 

Regulation 1.12.

Rule 311 Mandatory Trading

Participants that are Swap Dealers or Major Swap Participants are responsible for complying with 

the mandatory trading requirement as defined under Section 2(h)(8) of the CEA and shall not 

enter into any Required Transaction outside a SEF that lists a Swap, which is Required to Trade.

Rule 312 Uncleared Swaps

Absent a Clearing Exception for an Order, as set forth in Rule 407B, CMSEF only permits 

Participants to place orders for, and execute Cleared Swaps. 

Rule 313 Fees

CMSEF shall set Participant’s fees and payment terms for using the CMSEF platform. CMSEF 

shall have the right, at its sole discretion, to terminate or suspend a Participant’s access or 

privileges in the event a Participant fails to satisfy such payment obligation within thirty (30) days 

after its due date.

In the event that CMSEF suspends a Participant’s access to CMSEF, a Participant shall continue 

to be bound by any and all other applicable Rules.

Rule 314 Communications between CMSEF and Participants

Each Participant must provide CMSEF with current contact information for each of its Authorized 

Persons and Authorized Users. Such information must include the Authorized Persons or 

Authorized User’s full name, electronic mail address, and a telephone number for use during 

business hours.

CMSEF may, at its sole discretion, record communications between CMSEF and Participants, 

provided that such recording complies with all applicable regulations. This recording may include, 

but is not limited to, recorded telephone conversations, emails, copies of faxes or other 

documents exchanged between CMSEF and Participants. CMSEF’s RSP’s, as applicable, shall 

have access to such electronic records in the event it is required pursuant to a Regulatory 

Services Agreement.

Rule 315 Notices

CMSEF shall publish on its website and electronically notify each Participant of each addition to, 

modification of, or clarification of, these Rules or of any action to implement any Rules. 
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Participants shall be notified prior to CMSEF notifying the CFTC or the effective date. In the 

event of an Emergency, CMSEF shall have the right to take actions without notifying its 

Participants in advance of such action.

Rule 316 Reserved

Rule 317 Continuing Applicability of Jurisdiction and Rules

In the event CMSEF suspends or terminates a Participant or Authorized User’s access or 

privileges, such Participant or Authorized User shall continue to be subject to and bound by these 

Rules, Applicable Law, and the jurisdiction of CMSEF for all acts arising from before the 

Participant or Authorized User’s access or privileges were terminated. Participants and 

Authorized Users who have had access or privileges suspended shall cooperate with any 

Investigations or Disciplinary Proceedings related to the termination of their access.

Rule 318 Participant Trading Records

Required Records. Each Participant and Customer shall (i) prepare and keep current full, 

complete and systematic records and information which include all pertinent data and 

memoranda relating to the complete audit trail all of the Trades it executes and attempts to

execute on CMSEF as are required to be kept by it pursuant to applicable law and regulation 

including, without limitation, all records required by CFTC Regulation 37.404, and (ii) shall keep 

current such other records and information and adopt such forms as CMSEF may from time to 

time require (“Trading Records”). 

Participants and Customers are required to make available to CMSEF or CMSEF’s RSP (if any) 

any and all position and trading information relating to orders placed and trades executed on 

CMSEF. 

Participants and Customers are also required to keep and provide records of their trading activity 

in the index or instrument used as a reference price, the underlying commodity and related 

derivatives markets for any swaps they trade on CMSEF as it applies to those swaps traded on 

CMSEF. CMSEF may limit the application this requirement to Participants who conduct 

substantial trading on CMSEF.

Rule 319 Participant Maintenance of Records

(i) Participants, and as applicable, Authorized Users and Customers that have trading 

privileges on CMSEF, shall maintain all books and records that are required to be 

maintained pursuant to the CEA and CFTC Regulations (including, but not limited to, 

CFTC Regulations 1.31 and 1.35). This includes all records related to the trading of 

Swaps.

(ii) Such books and records shall be kept for the life of each Swap transacted pursuant 

to these Rules and five years following the termination of such Swap. Participants 

shall make copies of such books and records readily accessible to CMSEF for 

inspection, in each case in the form and manner required under the CEA and CFTC 

Regulations. During the first two years copies of such Trading Records shall be 

readily accessible.

(iii) CMSEF may disclose information it obtains from Participants books and records, to 

any government agency (foreign or domestic), self-regulatory organization or other 

Person as required by law, information concerning or associated with a Participant or 

other Person if the CMSEF believes such disclosure is necessary and appropriate in 
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exercising a legal or regulatory function, whether or not a formal arrangement 

governing the disclosure exists or a request for information was made.

(iv) Participants shall make Trading Records available to the CFTC upon request and/or 

permit on-site inspection by duly authorized CFTC personnel.

Rule 320 Legal Certainty for CMSEF Trades 

A transaction entered into on or pursuant to the CMSEF Rules shall not be void, voidable, subject to 

rescission, otherwise invalidated, or rendered unenforceable as a result of: 

(i) a violation by CMSEF of the provisions of Section 5h of the Act or CFTC Regulations;

(ii) any CFTC proceeding to alter or supplement a Rule, term, or condition under Section 

8a(7) of the Act or to declare an emergency under Section 8a(9) of the Act; or 

(iii) any other proceeding the effect of which is to: 

a. alter or supplement a specific term or condition or trading rule or procedure; or

b. require CMSEF to adopt a specific term or condition, trading rule or procedure, 

or to take or refrain from taking a specific action.

Chapter 4 Trading Standards and Practices

Rule 401 Swaps Traded on CMSEF

CMSEF shall determine which Swaps can be traded pursuant to these Rules and shall submit 

such Swaps to the CFTC as required by the CEA and CFTC Regulations. At this time CMSEF 

only permits the trading of Cleared Swaps, unless a Participant meets the requirements of Rule 

407. Only Swaps permitted by these Rules may be traded on CMSEF, regardless of the method 

of execution. 

CMSEF shall determine the rules and procedures for trading Swaps on CMSEF. This includes 

Rules and procedures to:

(i) determine which Swaps can be traded on CMSEF;

(ii) determine the criteria for listing a Swap for trade;

(iii) disseminate bids and offers and other trading information;

(iv) recording and accounting for Swaps traded on CMSEF;

(v) monitoring the trading activities of Participants and their Customers on CMSEF;

(vi) establishing limits on the size and number of Orders that a Participant may enter into 

CMSEF;

(vii) establish limits on the maximum daily price movements;

(viii) establish a minimum price quoting increment for each Swap; 

(ix) regulate any administrative matters affecting actives on CMSEF; and

(x) All orders shall contain the following information:

a. the name of the Participant

b. the name of Authorized User (Trader)

c. the Contract Name (description)

d. the Price

e. the Quantity

f. the Clearinghouse to which it will be sent for clearing

g. the Customer name, if applicable

h. the Account number
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CMSEF may amend, at its sole discretion any of these Rules or procedures at any time. 

Rule 402 Prohibited Trading Activities

No Participant or any of its Authorized Users or Account Managers shall use the CMSEF Platform 

to knowingly engage in any of the following abusive trading practices:

(i) wash or enter or execute non-competitive Swaps transactions;

(ii) accommodation trading, improper cross trading, front running, trading ahead of 

Customers, trading against Customers;

(iii) pre-arranged trading (except for Block Trades permitted by Rule 416 or trades 

following communication permitted by Rule 417);

(iv) fraudulent trading or money passes;

(v) disclose information about Customer orders; or

(vi) take any action, which will disrupt the trading on CMSEF or another SEF.

Rule 403 Fraudulent Acts and Misstatements

No Participant or any of its Authorized Representatives, Authorized Users or Account Managers 

shall knowingly:

(i) use CMSEF to engage in any fraudulent acts or schemes to defraud or mislead other 

Participants or CMSEF;

(ii) withhold Customer orders;

(iii) engage in fraudulent trading of any form; or

(iv) engage in an attempt to manipulate the market in any form.

Misstatements by Participants and their Authorized Representatives, Authorized Users or 

Account Managers shall be grounds for termination of CMSEF access and privileges.

Rule 404 Misuse of the CMSEF Trading Platform

CMSEF strictly prohibits misuse of the CMSEF trading platform. No Participant or any of its 

Authorized Users or Account Managers shall knowingly engage in unauthorized use or misuse 

the CMSEF platform or to assist any Person or individual from gaining access for the purposes of 

misuse or take any actions, which will be detrimental to CMSEF.

Misuse by Participants and their Authorized Representatives and Authorized Users shall be 

grounds for termination of CMSEF access and privileges.

Rule 405 Trading Hours

CMSEF shall in its sole discretion determine:

(i) the Business Days on which CMSEF will be open for trading;

(ii) the Trading Hours on such Business Days during which CMSEF will be open for 

trading; and

(iii) the Time Zone in which CMSEF Rules shall apply.

Unless otherwise specified in these Rules:

(i) all references to time shall be based upon local time in New York, New York;

(ii) opening times start on the first second of the minute cited; and

(iii) closing times end on the last second of the minute cited. 

CMSEF reserves the right to modify all of the above without advance notice in the event of an 

Emergency.
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Rule 406 Execution of Swaps on CMSEF

The following are the acceptable methods CMSEF provides Participants in order to execute 

Swaps on CMSEF:

(i) Anonymous Central Limit Order Book (Minimum Functionality):

a. Acceptable Orders. The following kinds of orders may be entered into the 

Central Limit Order Book (CLOB) of the CMSEF Platform.

I. Limit Orders. A “Limit Order” is an order to buy or sell a contract at a 

specified price or better.

II. Market Orders. A “Market Order” is an order to purchase or sell a 

contract at the best price on the CMSEF Platform at the time the order is 

entered on the CMSEF Platform (only available via fix API connection).

III. Fill or Kill. A “Fill or Kill” Order must be filled entirely or the Order is 

cancelled. 

IV. Immediate or Cancel. An “Immediate or Cancel” Order must be filled 

instantly or the Order is cancelled. 

b. Good until Time. An Order may be entered such that the Order is cancelled at a 

specific time if it is not executed (note that this feature is not available if 

accessing the system through the CMSEF website).Entry of Orders. An 

anonymous order may be submitted directly by the Participant for its own 

account or on behalf of a Customer on whose behalf such a Participant is 

authorized to act. Each order on the CLOB must contain the following 

information:

I. Bid/Offer Indication

II. Price

III. Notional Amount 

IV. Instrument 

c. Time Delay Requirement. All Participants that are a broker or dealer and who, in 

connection with the execution of a Required Transaction, seek to either execute 

against a Customer’s order or execute two Customers against each other 

through the CMSEF’s CLOB shall use the following procedure:

I. If a Participant seeks to execute an order against a Customer order, then 

such Participant must enter the Customer order into the CMSEF CLOB 

and then wait at least 15 seconds before entering the Participant’s order; 

or

II. If a Participant seeks to execute two Customer orders against each 

other, then such Participant shall enter one side of the trade into the 

CMSEF CLOB and wait at least 15 seconds before entering the second 

side of the trade for execution.

d. Time Delay Exception. The time delay requirement does not apply to DMA 

Orders where a broker or dealer does not engage in some form of prearrangement or pre-negotiation of such order.

e. Price-Time Priority. All prices received in the CLOB are sorted based on strict 

price-time priority protocol.

f. Trading Limits. Participants shall only enter orders for such Contracts and for 

such amounts as is permitted within the scope of their trading limits.

g. Matching of Orders. Orders submitted will be matched as follows:

I. Market Orders. Matching orders will be matched against all pending bids 

and offers in accordance with a price-time priority protocol. If any portion 

of the market order is not filled, the unfilled remainder will be canceled.

II. Limit Orders. Limit orders will be matched with bids and offers that have 

a price that is at or better than the price of the limit order, in accordance 

with the price-time protocol. If any portion of the limit order is not filled, 

the unfilled portion of the order will remain in the market at the price and 

time that the order was entered. 

h. Unfilled Orders.
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I. After the close of trading each Trading Day, all unfilled bids and offers 

will be cancelled

II. Upon a Participant’s logging out from the CMSEF Platform during the 

Trading Day, all unfilled bids and offers entered by such Participant will 

be cancelled.

i. Matching Algorithm. The CMSEF matching engine operates as a market 

order/limit order system. Orders are handled as follows:

I. Market orders are executed at the top of the market and can be matched 

with multiple standing orders at different prices if necessary to fill the 

market order volume;

II. Limit orders will execute at the requested price or better; and

III. Any unmatched limit order (or portion of an order) becomes a standing 

order in the system.

(ii) Request for Quote (RFQ)

a. Orders Entry of. Participants may submit RFQ inquiries on a name disclosed 

basis. Unless the Participant is submitting an RFQ pursuant to Rule 416, 

submission of RFQ inquiries must be sent to minimum of three counterparties 

none of which shall be: 

I. affiliated of or controlled by the counterparty requesting the RFQ inquiry; 

or 

II. affiliates of or controlled by each other.

b. Bids and Offers. At the same time that the requester receives the first 

responsive bid or offer, CMSEF shall communicate to the requester any firm bid 

or offer pertaining to the same instrument resting on the CLOB.

c. Responses. CMSEF shall provide the requester with the ability to execute

against any firm CLOB bids or offers along with any responsive orders to the 

RFQ. 

d. Execution of Orders. The Requestor may accept any response to the RFQ upon 

receipt. After the Requestor accepts an RFQ, the responding party is given a 

“last look” in order to execute the Order. 

e. Trading Protocols. CMSEF will ensure that its trading protocols provide each 

Participant with equal priority in receiving RFQs and in transmitting and 

displaying for execution responses to RFQs. 

f. Submitting a Request. Each RFQ shall include the following information 

regarding the Swap that the Participant is requesting quotes:

I. Product

II. Pay/Receive Indication

III. DCO

IV. Currency

V. Tenor

VI. Frequency

VII. Day Count

VIII. Instrument(s)

IX. Effective Date

X. End Date

XI. Business Day Conversion

XII. Calendar

XIII. Roll Conversion

XIV. Notional Amount

XV. Day Count Fraction

XVI. Clearing FCM 

g. Response to RFQ. Each response to an RFQ must contain a price.

h. Last Look. After the RFQ requestor receives a quote, the requester will be able 

to execute. If the requester executes the quote, the Participant that submitted 

the quote will have a “last look” where such Participant will confirm the quote. 
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The last look will expire in 30 seconds and until the Participant confirms the 

quote the requestor may cancel the quote. 

i. Customer. The Customer requesting a quote on the RFQ system must be 

identified by the Participant entering the request, regardless if the Customer is 

the Participant or an Authorized User. 

(iii) Priorities of Orders: For any bid or offer on the CLOB, and for any RFQ or response 

to an RFQ, each Participant shall be given equal priority in terms of when such 

actions shall be displayed to the relevant Participants on CMSEF. Each order 

submitted on the SEF shall include the following:

a. The Legal Entity Identifier of the Participant or Client placing the order;

b. A yes/no indication of whether the Participant or Client is a swap dealer with 

respect to the product with respect to which the order is placed.

c. A yes/no indication of whether the Participant or Client is a major swap 

participant with respect to the product with respect to which the order is placed.

d. A yes/no indication of whether the Participant or Client is a Financial Entity.

e. A yes/no indication of whether the Participant or Client is a U.S. Person.

f. If applicable, an indication that the Participant or Client will elect the clearing 

requirement exception in CEA section (2)(h)(7) for any swap resulting from the 

order.

Rule 407A Required Transactions

Required Transactions that do not qualify as a Block Trade or a Clearing Exception shall be 

executed on CMSEF according to Rule 406.

Rule 407B Clearing Exception for Swaps 

Each Participant wishing to execute an Order under a Clearing Exception on CMSEF must submit 

all documentation required by Part 50 of the CFTC Regulations (the Clearing Exception Form) 

prior to placing an Order subject to the Clearing Exception. A Participant shall submit all required 

documentation supporting its eligibility (or the eligibility of its relevant Authorized User, as

applicable) for the Clearing Exception. Any Order subject to the Clearing Exception shall be 

rejected if an applicable Clearing Exception Form is not on file with CMSEF. 

The Clearing Exception may only be used for Orders that are not executed on the CLOB. 

Rule 408 Cancellation of Orders by Participants

Participants may cancel any Order, which has been entered on CMSEF unless it has been 

executed or expired. 

Rule 409 Modification or Cancellation of Orders and Trades by CMSEF

Before an Order is sent to a Clearinghouse, CMSEF may cancel any Order that, if allowed to 

remain, would have meaningful adverse effects on the integrity of the market, if the Order is 

entered in a price outside a range known as the Acceptable Price Range, or a CMSEF system 

malfunction. The Acceptable Price Range shall be determined by CMSEF based on the market 

data available to CMSEF. It may change from time to time and shall be published on the CMSEF 

website. 

Once a trade has been cleared by a Clearinghouse, CMSEF may adjust trade prices or cancel if 

there is a CMSEF system malfunction or with the consent of both Counterparties. Such 

modification or cancellation shall be effected by a pre-arrange trade or trades, consistent with 
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CFTC No-Action Letter No. 15-24 (published by the CFTC on April 22, 2015; relief expires June 

15, 2016). 

At any time, CMSEF may halt or suspend trading on its platform in order to maintain a fair and 

orderly market, as required by these Rules. Any halt or suspension in trading shall be 

communicated to Participants as soon as practicable. 

If CMSEF takes action pursuant to this Rule, it will give prompt notice to affected Participant or 

Participants. 

Rule 410A Pre-Execution Credit Checks

CMSEF will verify prior to the execution of any Order that the Participants or Authorized User 

have sufficient credit limits with their Clearing Members so that the trade will be able to be 

accepted by the Clearing House for Clearing. CMSEF will not permit Participants or Authorized 

User to execute transactions if their credit limits are insufficient. 

All Orders will be prescreened on an order-by-order basis. A Clearing Member may reject an 

Order pre-execution or post-execution. If an Order is rejected by the Clearing Member postexecution, such Order shall be void ab initio.

It is the responsibility of the Participants or Authorized User to evaluate the credit quality of their 

Prime Broker, FCM, and or Clearinghouse, and their counterparty on uncleared swaps.

Rule 410B Confirmation of Agreements Between Counterparties

The terms of the Swap, which shall serve as a confirmation of the transaction, will be sent at the 

time of execution of the Swap. Specifically, upon the execution of a Swap, CMSEF will provide 

each counterparty to a transaction that is entered into on or pursuant to the rules of the SEF with 

a written record of all of the terms of the Swap, which shall legally supersede any previous 

agreement and serve as a confirmation of the transaction; provided, that specific Customer

identifiers for accounts included in bunched orders involving Swaps will not be included in 

confirmations provided by CMSEF if the applicable requirements of CFTC Regulation 1.35(b)(5) 

are met.

Rule 411 Cleared Swaps

The following does not apply with respect to swaps subject to the clearing requirement exception 

in CEA section (2)(h)(7) for which a counterparty has elected such exception. 

Each Cleared Swap shall be cleared through the Clearing House indicated in the Swap 

Specification in accordance with the CEA and the CFTC Regulations.

For each Cleared Swap a Participant expects to enter into via the SEF Platform or subject to 

CMSEF Rules, the Participant or a Client or Customer of the Participant must establish a clearing 

account with the Clearing House or with a Clearing Member of the Clearing House, in each case, 

designated in the Swap Specification for such Cleared Swap.

Submission of executed trades to the applicable DCO shall be the responsibility of CMSEF. 

Rule 412 Position Limits or Accountability
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To reduce the potential threat of market manipulation or congestion, SEF shall adopt for each of 

the contracts of the facility, as is deemed necessary and appropriate by SEF, position limitations 

or position accountability levels for speculators.

Rule 413A Position Limits

In accordance with CFTC Regulations, CMSEF may from time to time adopt position limits and 

grant exceptions from position limits as may be necessary.

CMSEF shall not set position limits in excess of CFTC limits.

In the event CMSEF adopts position limits, Participants may request and exemption from such 

limits by filing an application with CMSEF’s Market Monitor Team. Participants may not exceed 

such limits until they have received Written approval from CMSEF. Applications to exceed 

position limits must be filed in a form acceptable to CMSEF and must at a minimum include:

(i) the name and contact information of the Participant; 

(ii) a description of the exemption being requested;

(iii) whether the exemption is for 

a. bona fide hedging as defined in CFTC Regulation §1.3(z)(1),

b. risk management, or 

c. arbitrage/spread positions; and

(iv) a description of the complete underlying exposure related to the exemption request.

In the event that CMSEF agrees to provide the requested exemption, the Participant must agree 

to:

(i) provide CFSEF with any information or documentation requested by CMSEF; 

(ii) to comply with any and all terms, conditions or limitations imposed by CMSEF;

(iii) permit CMSEF modify or revoke the exemption at any time; 

(iv) agree to initiate and liquidate positions in an orderly manner; and 

(v) agree to immediately notify CMSEF of any material change to the information 

provided to CMSEF.

CMSEF reserves the right to take any actions necessary in response to any Emergency situation 

that may arise including forcing any Participant to reduce any outstanding positions.

Rule 413B Position Accountability 

All Participants shall be bound by CMSEF’s position accountability levels for Required 

Transactions. CMSEF will set these levels in accordance with appropriate CFTC Regulations. 

In the event a Participant holds or controls aggregate positions in a Swap in excess of CMSEF 

position accountability levels, the Participant shall be subject to the following: 

(i) The Participant shall promptly provide any information requested by CMSEF 

concerning size and type of the position and any efforts to hedge the position.

(ii) The Participant shall, if directed by CMSEF, liquidate in an orderly manner, or not 

increase further the positions, which exceed CMSEF’s position accountability levels. 

(iii) The Participant shall, upon request by CMSEF, identify the beneficial owner and or 

any controlling parties for such positions.

CMSEF reserves the right to take any actions necessary in response to any Emergency situation 

that may arise, including forcing any Participant to reduce any outstanding positions.

Rule 414 Real-Time Market Monitoring and Surveillance
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Real-time monitoring of trading on CMSEF for compliance purposes shall be conducted by 

CMSEF’s Compliance Department. CMSEF will monitor and surveil participants and market data 

on an ongoing and real time basis to ensure compliance with all applicable laws, rules, 

regulations and the CMSEF rulebook. If CMSEF believes a violation may be occurring or about 

to occur CMSEF may take actions including, but not limited to, halting a Participant's ability to 

execute trades on CMSEF.

(i) CMSEF shall monitor and evaluate data on:

a. an ongoing basis in order to detect and prevent manipulation, price distortion, 

and where necessary disruptions in the cash-settlement process, and

b. general market data in order to detect and prevent manipulative activity that 

would result in the failure of the market price to reflect the normal forces of 

supply and demand, unusual trading volumes, and impairments to market 

liquidity.

(ii) In addition, CMSEF may protect market integrity through use of the following safeguards 

to prevent the entry of orders in any of the following circumstances:

a. pre-trade quantity limits on individual orders to screen for order quantities not 

within acceptable parameters;

b. pre-trade price collars to screen for orders outside of current market conditions;

and

c. pre-trade check to screen for risk based limits set by the clearing member.

Such pre trade quantity and risk limits shall be posted on CMSEF’s web site.

Rule 415 Mishandled Customer Orders

CMSEF shall not be held liable for any Customer Orders, which are mishandled by Participants. 

Participants will be solely responsible for all remedial actions in the event a Participant 

mishandles a Customer Order.

Rule 416 Block Trades 

CMSEF’s appropriate minimum block sizes shall be consistent with appropriate minimum block 

sizes set by the CFTC. CMSEF shall not permit Participants to execute Swaps as Block Trades 

below the appropriate minimum block size set by the CFTC. 

The following Block Trade Rules shall apply to Block Trades executed on CMSEF:

(i) Block Trades shall be trades that are at or in excess of the appropriate minimum block 

size set by the CFTC and may be executed on CMSEF by RFQ by requesting a price 

from fewer than three RFQ Receivers.

(ii) Block Trades must trade at prices that are fair and reasonable in the context of:

(i) market conditions;

(ii) other transactions in the market at the time; and

(iii) the nature of the Participants to the Block Trade.

(iii) Block Trades shall not affect resting orders.

(iv) Participants shall not aggregate Orders for different accounts to create Block Trades 

unless permitted by CFTC Regulation 43.6(h)(6).
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(v) Block Trades executed off CMSEF must be reported by the Participants to CMSEF as 

soon as practicable but no later than five (5) minutes before the time such Block Trade 

would be reported by an SDR. The actual notional or principal amount of the Block Trade 

shall be reported to CMSEF, which shall report the Block Trade as set forth in CFTC 

Regulation 43.6 and Appendices B, D, E, and F to Part 43 of the CFTC Regulations. 

CMSEF reserves the right to investigate all Block Trades to ensure that they comply with all 

applicable CMSEF Rules and CFTC Regulations.

A Participant transacting a Block Trade on behalf of a Customer must receive prior written 

instruction or consent from the Customer in order to do so. Such instruction or consent may be 

provided in the power of attorney or similar document by which the customer provides the person 

with discretionary trading authority or authority to direct the trading in its account.

The parties to a publicly reportable swap transaction on CMSEF that has a notional amount at or 

above the appropriate minimum block size shall notify CMSEF of its election to have the publicly 

reportable swap transaction treated as a Block Trade. CMSEF, pursuant to these Rules, shall 

notify the SDR of such a Block Trade election when transmitting swap transaction and pricing 

data to such SDR in accordance with CFTC Regulation 43.3(b)(1).

Rule 417A Pre-Trade Communications

A Participant or Authorized User, acting on behalf of a Customer, must have the Customer’s 

consent before engaging in pre-arrangement communication with a counterparty. The Participant 

or Authorized User may not disclose such communications to any third party and may not use 

such communications to enter into alternative transactions other than the transaction permitted by 

this Rule. In any case in which a transaction is agreed upon as the result of pre-arrangement

communication, the Participant or Participants must allow a 15-second delay between orders 

entered on the SEF. There is no mechanism on the CMSEF system that prevents a trade from 

being submitted before such 15-second delay has occurred and therefore any applicable Order 

that is executed without the delay shall be a violation of these Rules and CFTC Regulations. 

Rule 417B Information Obtained in Pre-Trade Communications

All Participants or Authorized Users party to the pre-arrangement communication permitted by 

Rule 417A are prohibited from disclosing such communications to any third party and may not 

use such communications to enter into alternative transactions other than the transaction 

permitted by this rule.

Rule 418A Dissemination of Prices and Trading Information

CMSEF shall publish information daily on its website regarding prices, volume, and other data as 

required by the CFTC Regulations. 

CMSEF will also make available a central pricing screen on CMSEF with a real-time view of 

resting bids and offers.

CMSEF may make available to Participants an indicative, non-attributed pricing page on CMSEF 

for certain types of Swaps of the most commonly traded tenors within such type of Swap.

CMSEF shall choose, at its sole discretion, a SDR. As required by CFTC Regulation 37.901(a), 

CMSEF shall transmit swap transaction and pricing data for each Swap executed pursuant to 

these Rules to the appropriate SDR in the form and manner required. 
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CMSEF may provide such swap transaction and pricing data to Participants and Authorized 

Users no earlier than the time it transmits such information to an SDR and in a form that does not 

disclose the identities, or otherwise facilitate identification, of the parties to the Swap.

Rule 418B Publicly Reportable Swap Transactions 

Pursuant to Part 43 and Appendix A to Part 43 of the CFTC Regulations and Part 45 and 

Appendix 1 to Part 45 of the CFTC Regulations, CMSEF shall transmit swap transaction and 

pricing data and minimum primary economic terms to a registered SDR as soon as 

technologically practicable after the publicly reportable swap transaction has been executed on or 

pursuant to the rules of CMSEF.

CMSEF and Participants shall not submit or agree to submit a cancellation or correction for the 

purpose of re-reporting Swap transaction and pricing data in order to gain or extend a delay in 

public dissemination of accurate Swap transaction or pricing data or to otherwise evade the 

reporting requirements in Part 43 of the CFTC Regulations. 

Rule 418C Reporting Counterparties 

For all swaps executed on CMSEF, each swap counterparty shall provide sufficient information to 

CMSEF to enable CMSEF to report all swap creation data to enable CMSEF to report all 

Required Swap Creation Data. To achieve this, each Participant placing an order with respect to 

any Swap traded on CMSEF must include in the order the information required by CMSEF Rule 

406(iii). 

All Reporting Counterparties are required to notify CMSEF in the event the Reporting 

Counterparty becomes aware that an error or omission in reporting has occurred.

Rule 419 Emergency Rules

In the event of an Emergency, CMSEF may implement temporary Emergency procedures and 

Emergency Rules, subject to the applicable provisions of the CEA and CFTC Regulations. 

Implementation of Emergency Rules shall be done in consultation with the CFTC. Emergency 

Rules may require or authorize CMSEF, the Board, any committee of the Board, the President, or 

any other Officer to take actions necessary or appropriate to respond to the Emergency, including 

the following actions: 

(i) suspending or curtailing trading or limiting trading to liquidation only (in whole or in 

part)

(ii) extending or shortening the last trading date for Swaps; 

(iii) ordering the fixing of a settlement price; 

(iv) ordering the liquidation or transfer of an open position in any Swap, or the 

(v) reduction of positions; 

(vi) extending, limiting or changing the Trading Hours; 

(vii) imposing or modifying intraday market restrictions; 

(viii) transferring Customer contracts and the margin in an Emergency; 

(ix) imposing special margin requirements; 

(x) extending or shortening the expiration date of a Swap; 

(xi) altering any Swap’s settlement terms and conditions; 

(xii) imposing or modifying price limits; and/or

(xiii) imposing, modifying or reducing position limits.

Before any Emergency Rule may be adopted and enforced, a required vote of the Board must 

approve the implementation of such Emergency Rule at a duly convened meeting requested by 
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the President or any other Officer. Directors may attend such a meeting by teleconference. Each 

Director participating in such meeting shall be subject to CMSEF’s Conflict of Interest Rules. If 

the CEO or CMSEF determines that Emergency Rules must be implemented with respect to an 

Emergency before a meeting of the Board can reasonably be convened, then the CEO shall have 

the authority, without Board action, to implement any Emergency Rules with respect to such 

Emergency that he or she deems necessary or appropriate to respond to such Emergency. 

Whenever CMSEF, the Board, any committee of the Board, or the President takes actions 

necessary or appropriate to respond to an Emergency (including the actions set forth above), an 

Authorized Representative of CMSEF will post a Notice to Participants regarding such 

Emergency, as soon as practicable. When the Board, any committee of the Board or the CEO 

determines that the Emergency is no longer in effect, permitting the SEF operated by CMSEF to 

resume normal functioning; any such actions responding to an Emergency will be terminated. 

CMSEF will use reasonable efforts to notify the CFTC prior to implementing, modifying or 

terminating an Emergency Rule. If such prior notification is not possible or practicable, CMSEF 

will notify the CFTC as soon as possible or reasonably practicable, but in all circumstances within 

twenty-four (24) hours of the implementation, modification or termination of such Emergency 

Rule. 

Upon taking any action in response to an Emergency, CMSEF will document the decision-making 

process related to such action. Such documentation will be kept for at least five years following 

the date on which the Emergency ceases to exist or to affect the SEF operated by CMSEF, and 

all such documentation will be provided to the CFTC upon request. 

Chapter 5 Disciplinary Rules

Rule 501 General 

All Participants, Authorized Persons, Authorized Users, Clearing Members, and Participant’s 

Customers shall be subject to the CMSEF’s jurisdiction. Participants, Authorized Persons, 

Authorized Users, Clearing Members, and Participant’s Customers are subject to this Chapter 5 if 

they, or with respect to a Participant, any other Person using any of its User IDs, are alleged to 

have violated, or to have aided and abetted a violation of, or are about to violate, any Rule or any 

provision of Applicable Law for which CMSEF possesses disciplinary jurisdiction. 

CMSEF, through its Compliance Department and the Disciplinary Panel, will conduct 

Investigations, Disciplinary Proceedings and appeals from Disciplinary Proceedings, summary 

impositions of fines, summary suspensions or other summary actions in accordance with this 

Chapter. 

No CMSEF member of the Board, Officer, Employee, or Agent will interfere or attempt to interfere 

with any Investigation, disciplinary hearing, or summary imposition of a judgment or other 

summary action.

CMSEF shall permit Participants, Authorized Persons, Authorized Users, Clearing Members, or

Participant’s Customers to be represented by counsel during any Investigation, disciplinary 

hearing, or imposition of a fine or summary judgment.

CMSEF may hold a Participant or Authorized User liable for, and impose sanctions against such 

Participant or Authorized User for such Person’s own acts and omissions, or those of its agents, 

representatives or any Person or API using a User ID of such Participant or Authorized User. 
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CMSEF may additionally hold a Participant liable for the acts and omissions of its Authorized 

Users. 

CMSEF may delegate any or all of its powers or responsibilities under this Chapter 5 to the RSP, 

which may take any action on behalf CMSEF that the CMSEF is permitted to take hereunder; 

provided, however, that the CMSEF shall retain supervisory authority with respect to such powers 

and responsibilities and will document instances where its actions differ in any material respect 

from those recommended by the RSP. 

Rule 502 CMSEF’s Right to Inspect Books, Records and Systems

CMSEF’s Compliance Department and CMSEF’s RSP (if any) will have the right to inspect the 

books, records, systems, equipment, and software of Participants, Authorized Persons, 

Authorized Users, Clearing Members and Participant’s Customers.

CMSEF’s Compliance Department and CMSEF’s RSP (if any) will have the right to obtain 

position and trading information directly from Participants as necessary to perform CMSEF’s 

Oversight functions as set forth in this Rulebook. 

Rule 503 Investigations

CMSEF’s Compliance Department or Disciplinary Panels will investigate any matter within 

CMSEF’s disciplinary jurisdiction of which it becomes aware. The Compliance Department will 

determine the nature and scope of its Investigations within its sole discretion and will function 

independently of any commercial interests of CMSEF. An Investigation will be initiated if the 

Compliance Department or other CMSEF Departments determines that a violation of CMSEF 

may have occurred. The Compliance Department may informally contact Participants in order to 

obtain information. 

Notwithstanding the above, CMSEF will commence an Investigation at the request of the CFTC. 

CMSEF’s Compliance Department has the authority to: 

(i) initiate and conduct Investigations; 

(ii) prepare Investigation Reports and make recommendations concerning initiating 

Disciplinary Proceedings; 

(iii) allege violations within CMSEF’s disciplinary jurisdiction; 

(iv) prosecute alleged violations within CMSEF’s disciplinary jurisdiction; and

(v) represent CMSEF on an appeal to an Appeal Panel of any Disciplinary Proceeding, 

summary imposition of fines, summary suspension or other summary action. 

Each Participants, Authorized Persons, Authorized Users, Clearing Members, and Participant’s 

Customers: 

(i) is obligated to appear, testify and respond in writing to interrogatories within the 

time period required by the Compliance Department in connection with any Rule, 

any Investigation; or any preparation by and presentation during a Disciplinary 

Proceeding or appeal from a decision in a Disciplinary Proceeding, summary 

imposition of fines, summary suspension or other summary action by CMSEF; 

(ii) is obligated to produce books, records, papers, documents or other tangible 

evidence in his possession, custody or control within the time period required by 

the Compliance Department in connection with any Rule, any Investigation, any 

preparation by and presentation during a Disciplinary Proceeding or appeal from 

a decision in any Disciplinary Proceeding, summary imposition of fines, summary 

suspension or other summary action by CMSEF; and 
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(iii) may not impede or delay any Investigation, Disciplinary Proceeding, appeal from 

a Disciplinary Proceeding, summary imposition of fines, summary suspension or 

other summary action. 

Rule 504 Reports of Investigations 

CMSEF’s Compliance Department will maintain a log of all Investigations and their disposition. 

The Compliance Department will prepare a written report of each Investigation (the “Investigation 

Report”), regardless of whether the evidence gathered during any Investigation forms a 

reasonable basis to believe that a violation within CMSEF’s jurisdiction has occurred or is about 

to occur or whether the evidence gathered results in closing the matter without further action or 

through summary action. 

Any Investigation Report will include the reasons for initiating the Investigation (including a 

summary of the complaint, if any), all relevant facts and evidence gathered and the analysis, 

conclusions and recommendation of the Compliance Department. For each potential respondent, 

the Compliance Department will recommend either: 

(i) closing the Investigation without further action; 

(ii) entering into a summary action;

(iii) resolving the Investigation through an informal disposition, including the issuance by 

the Compliance Department of a warning letter (provided that no more than one 

warning letter for the same violation may be issued to the same potential respondent 

during a rolling 12-month period);

(iv) initiating Disciplinary Proceedings; or 

(v) negotiating a settlement. 

An informal disposition (including the issuance of a warning letter by the Compliance Department) 

will not constitute a finding of a violation or a sanction. 

CMSEF’s Compliance Department shall provide the Investigation Report to the Chief Compliance 

Officer, who shall determine whether the Investigation Report is complete.

CMSEF’s Compliance Department shall complete each Investigation in a timely manner and, 

absent mitigating factors, no later than 12 months after the date that such Investigation was 

opened. 

Rule 505 Opportunity to Respond to Investigation Reports 

After completing the Investigation Report, if the evidence gathered during an Investigation forms 

a reasonable basis to believe that a violation within CMSEF’s jurisdiction has occurred or is about 

to occur, CMSEF’s Compliance Department may, upon approval of the Chief Compliance Officer, 

notify each potential respondent that the Compliance Department has recommended formal 

disciplinary charges against each such potential respondent. 

The potential respondents shall be notified in writing and shall have fourteen days to respond, 

unless extenuating circumstances require a response sooner.

CMSEF’s Compliance Department may allow a potential respondent to propose a settlement of 

the matter or to submit a written statement explaining why either a Disciplinary Proceeding should 

not be instituted or one or more of the potential charges should not be brought. The potential 

respondent shall submit such written statement within the time limit established by the 

Compliance Department. 

Rule 506 Review of Investigation Reports 
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CMSEF’s Compliance Department will, within 30 days, take one of the following actions: 

(i) If CMSEF’s Compliance Department determines that no reasonable basis exists to 

believe that a violation within CMSEF’s jurisdiction has occurred or is about to occur, it 

may direct that no further action be taken. Upon such determination, the Compliance 

Department will provide a written statement setting forth the facts and analysis supporting 

the decision. 

(ii) If CMSEF’s Compliance Department determines that Disciplinary Proceedings are 

unwarranted, it may issue a warning letter setting forth, in writing, the facts and analysis 

supporting the decision. 

(iii) If CMSEF’s Compliance Department determines that additional inquiries or evidence is 

needed to decide whether a reasonable basis exists to believe that a violation within 

CMSEF’s jurisdiction has occurred or is about to occur, it will continue the Investigation. 

(iv) If CMSEF’s Compliance Department determines that a reasonable basis exists to believe 

that a violation within CMSEF’s jurisdiction has occurred or is about to occur, the 

potential respondent will be served with a notice of charges and proceed in accordance

with this Chapter 5. 

Rule 507 Warnings

CMSEF’s Compliance Department is authorized to issue a warning letter to an individual or entity 

subject to an Investigation. If a warning letter is issued by the CMSEF’s Compliance Department, 

it shall not be considered an indication that a violation has occurred. Only one warning letter may

be issued to the same individual or entity per violation per year.

Rule 508 Notice of Charges 

If CMSEF’s Compliance Department authorizes Disciplinary Proceedings pursuant to these 

Rules, it will prepare, and serve in accordance with these Rules, a notice of charges. 

A notice of charges will: 

(i) state the acts, practices or conduct in which the respondent is alleged to have 

engaged; 

(ii) state the Rule alleged to have been violated or about to be violated; 

(iii) advise the respondent of its right to a hearing and its right to be represented by 

legal counsel or any other representative of its choosing (other than a Director, 

Officer or Employee of CMSEF, any member of the Disciplinary Panel or any 

Person substantially related to the Disciplinary Proceedings such as a material 

witness or other respondent) in all succeeding stages of the disciplinary process; 

(iv) state the period of time within which the respondent can request a hearing on the 

notice of charges, which will not be less than 20 days after service of the notice 

of charges; 

(v) advise the respondent that any failure to request a hearing within the period 

stated, except for good cause, will be deemed to constitute a waiver of the right 

to a hearing; and 

(vi) advise the respondent that any allegation in the notice of charges that is not 

expressly denied will be deemed to be admitted. 

Rule 509 Service of Notice of Charges 
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CMSEF shall serve notice of charges or other documents contemplated to be served pursuant to 

this Chapter 5 to a contact designated by each Participant. CMSEF may serve such notice (and 

service shall be deemed complete) to the respondent personally, or by deposit in the United 

States mail, postage prepaid, via registered or certified mail addressed to the respondent at the 

address as it appears in records of CMSEF. Notice of Charges may also be served by electronic 

mail to the respondent’s electronic mail address as it appears on the books and records of 

CMSEF, if followed by a hard copy of the document sent promptly thereafter by registered or 

certified mail addressed to the respondent at the respondent’s address as it appears in records of 

CMSEF. 

Rule 510 Answer to Notice of Charges 

If the respondent determines to answer a notice of charges, the respondent must file an answer 

within 20 days after being served with such notice, or within such other time period determined 

appropriate by the Chief Compliance Officer. 

To answer a notice of charges, the respondent must in writing: 

(i) for each allegation set forth in the notice of charges, admit such allegation, deny 

such allegation, or affirmatively state that the respondent does not have and is 

unable to obtain sufficient information to admit or deny such allegation, which 

shall have the effect of a denial of such allegation; 

(ii) specify any specific facts that contradict the notice of charges; 

(iv) specify any affirmative defenses to the notice of charges; 

(iv) sign and serve the answer on the Chief Compliance Officer; and 

(v) if applicable, request a hearing before a Disciplinary Panel. 

Any failure by the respondent to serve a timely answer to a notice of charges will be deemed to 

be an admission to the allegations in such notice. Any failure by the respondent to answer one or 

more allegations in a notice of charges will be deemed to be an admission of that allegation or 

those allegations. Any allegation in a notice of charges that the respondent fails to deny will be 

deemed to be admitted. A general denial by the respondent, without more, will not satisfy the 

requirements of the second paragraph of this Rule. 

If a respondent admits or fails to specifically deny any of the allegations in the notice of charges, 

the Disciplinary Panel shall find that the violations set forth in such allegations have been 

committed and shall impose a sanction for such violations. The Disciplinary Panel shall promptly 

notify the respondent in writing of any sanction imposed pursuant to this Rule and advise the 

respondent that the respondent may request a hearing on such sanction within 20 days of the 

respondent being served with such notice. Any failure by the respondent to do so will be deemed 

to be an acceptance of the sanctions in such notice and waiver of any right to appeal such 

sanctions. 

A respondent shall be granted a hearing before a Disciplinary Panel for every instance in which 

such respondent either denies an allegation and requests a hearing in accordance with this Rule; 

or requests a hearing in accordance with this Rule.

Rule 511 Right to a Hearing

All respondents who have denied a charge shall be afforded the opportunity for a hearing. The 

hearing must concern only those charges, which the respondent has denied.

Rule 512 Settlements 

A respondent or potential respondent may at any time propose in writing an offer of settlement to 

anticipated or instituted Disciplinary Proceedings. Any offer of settlement should contain 
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proposed findings and sanctions and be signed by the respondent or potential respondent and 

submitted to the Compliance Department, and shall take into account, among other things, the 

disciplinary history of the respondent or potential respondent. A respondent or potential 

respondent may offer to settle Disciplinary Proceedings without admitting or denying the findings 

contained in the order of the Disciplinary Proceedings but must accept the jurisdiction of CMSEF 

over it and over the subject matter of the proceedings and consent to the entry of the findings and 

sanctions imposed. 

If a respondent or potential respondent submits an offer of settlement in accordance with 

paragraph (a) of this Rule, the Compliance Department will forward the offer to the Disciplinary 

Panel with a recommendation on whether to accept or reject the offer. The respondent or 

potential respondent may withdraw such offer of settlement at any time before acceptance by the 

Disciplinary Panel, but may not withdraw such offer at any time after acceptance by the 

Disciplinary Panel. 

The Disciplinary Panel may accept the offer of settlement, but may not alter the terms of a 

settlement offer unless the respondent or potential respondent agrees. 

If an offer of settlement is accepted by the Disciplinary Panel, it shall issue a written decision 

specifying: 

(i) the Rule violations it has reason to believe were committed, including the basis 

or reasons for its conclusions; 

(ii) any sanction to be imposed, which must include full Customer restitution where 

Customer harm has been demonstrated; and 

(iii) if applicable, that the respondent has accepted the sanctions imposed without 

either admitting or denying the Rule violations. 

In the event that the Disciplinary Panel accepts an offer of settlement without the agreement of 

the Compliance Department, the decision must adequately support such acceptance. 

If an offer of settlement is accepted and the related order of Disciplinary Proceedings becomes 

final, the respondent’s submission of the offer will be deemed to constitute a waiver of the right to 

notice, opportunity for a hearing and review and appeal under these Rules. 

If the offer of settlement of a respondent or potential respondent is not accepted by the 

Disciplinary Panel, fails to become final or is withdrawn by the respondent or potential respondent 

before its acceptance by the Disciplinary Panel, the matter will proceed as if the offer had not 

been made and the offer and all documents relating to it will not become part of the record. 

Neither a respondent or potential respondent nor the Compliance Department may use an 

unaccepted offer of settlement as an admission or in any other manner at a hearing of, or appeal 

from, Disciplinary Proceedings. 

Rule 513 Disciplinary Panels 

The Disciplinary Panel shall conduct hearings in connection with any Disciplinary Proceedings 

(except for summary impositions of fines pursuant to these Rules), to make findings, render 

decisions, and impose sanctions pursuant to this Chapter 5. 

Each Disciplinary Panel shall be composed of three individuals selected by the Chief Compliance 

Officer. Except in cases limited to the timely submission of accurate records, each Disciplinary 

Panel shall consist of an individual who would not be disqualified from serving as a Public 

Director, who shall chair the Disciplinary Panel. 

No member of the Compliance Department may serve on a Disciplinary Panel. 
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Except as may otherwise be provided in these Rules, the Board may at any time remove any 

member of a Disciplinary Panel for cause. 

Within 10 days of being notified of the appointment of the Disciplinary Panel, a respondent may 

seek to disqualify any individual named to the Disciplinary Panel for the reasons identified in 

these Rules, by serving written notice on the Chief Compliance Officer and providing a copy 

thereof to the chairman of the Disciplinary Panel. By not timely filing a request for disqualification, 

the respondent will be deemed to have waived any objection to the composition of a Disciplinary 

Panel. The Chief Compliance Officer will decide in his sole discretion the merits of any request 

for disqualification. Any such decision will be final and not subject to appeal. 

All information, records, materials and documents provided to the Disciplinary Panel and all 

deliberations, testimony, information, records, materials and documents related thereto shall be 

treated as non-public and confidential and shall not be disclosed, except as necessary to further 

an Investigation or as otherwise required by law. No individual shall serve on a Disciplinary Panel 

unless that individual has agreed in writing that he will not publish, divulge, or make known in any 

manner facts or information regarding the business of any Person or other information which may 

come to his or her attention in his official capacity as a member of the Disciplinary Panel, except:

a. when reporting to the Board or to a Standing Committee concerned with such 

information;

b. when reporting to the Compliance Department;

c. when requested by the CFTC or other government agency; or 

d. when compelled to testify in any judicial or administrative proceeding. 

Rule 514 Convening Hearings of Disciplinary Proceedings 

All Disciplinary Proceedings (except for summary impositions of fines pursuant to these Rules) 

will be conducted at a hearing before a Disciplinary Panel. Hearings will be conducted fairly, 

privately and confidentially. Notwithstanding the confidentiality of hearings, the Disciplinary Panel 

may appoint an expert to attend any hearing and assist in deliberations if such expert agrees to 

be subject to an appropriate confidentiality agreement. 

After reasonable notice to each respondent, the Disciplinary Panel will promptly convene a 

hearing to conduct the Disciplinary Proceedings with respect to such respondent. Parties to a 

Disciplinary Proceeding include each respondent and the Compliance Department. 

The chairman of the Disciplinary Panel may continue, adjourn or otherwise conduct the hearing, 

as he may deem appropriate. The chairman of the Disciplinary Panel will determine all 

procedural and evidentiary matters, including the admissibility and relevance of any evidence 

proffered. In determining procedural and evidentiary matters, the chairman of the Disciplinary 

Panel will not be bound by any evidentiary or procedural rules of law. Once admitted during the 

hearing, the Disciplinary Panel may consider, and attach the weight it believes appropriate to, 

evidence or other materials. CMSEF’s Legal Department will provide guidance to the chairman of 

the Disciplinary Panel on the conduct of the hearing. 

Except for procedural and evidentiary matters decided by the chairman of the Disciplinary Panel 

pursuant to these Rules, unless each respondent otherwise consents, the entire Disciplinary 

Panel must be present during the entire hearing and any related deliberations. 

Rule 515 Respondent Review of Evidence 

Prior to the commencement of a hearing, each respondent will be given the opportunity, subject 

to the sections below, to review all books, records, documents, papers, transcripts of testimony 

and other tangible evidence in the possession or under the control of CMSEF that the 

Compliance Department will use to support the allegations and proposed sanctions in the notice 

of charges or which the chairman of the Disciplinary Panel deems relevant to the Disciplinary 
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Proceedings. Notwithstanding the foregoing, no respondent will have the right to review, and 

CMSEF will have no obligation to disclose, any information protected by attorney-client privilege. 

All requests for such information must be made not less than 10 days prior to the scheduled 

hearing date, unless the chairman of the Disciplinary Panel agrees otherwise. 

If any books, records, documents, papers, transcripts of testimony, or other tangible evidence 

contain information that could adversely affect the competitive position of the Person providing 

the information or if such information might compromise other Investigations being conducted by 

the Compliance Department, the Compliance Department may redact, edit or code such 

information before furnishing it to the respondent. 

Notwithstanding anything in this Rule to the contrary, the Compliance Department: 

(i) will not redact, edit or code competitive or investigative information contained in 

documents in a manner that would materially impair the respondent’s ability to 

defend against the allegations or proposed sanctions in the notices of charges, 

and 

(ii) will provide the respondent with access to the information and portions of the 

documents that the Compliance Department intends to rely on to support the 

allegations or proposed sanctions in the notice of charges. 

For purposes of these Rules, information that could adversely affect competitive positions 

includes positions in Swaps currently held, trading strategies employed in establishing or 

liquidating positions, the identity of any Participant or Authorized User and the personal finances 

of the Person providing the information. 

The respondent shall treat as confidential all data and information provided to it pursuant to these 

Rules, and shall not disclose any such data or information, except as necessary to the 

respondent’s defense of notice of charges and any appeal of the decision of the Disciplinary 

Panel.

Rule 516 Conducting Hearings of Disciplinary Proceedings 

At a hearing conducted in connection with any Disciplinary Proceedings, the Compliance 

Department will present its case supporting the allegations and proposed sanctions in the notice 

of charges to the Disciplinary Panel. If a respondent has timely filed an answer to the notice of 

charges in accordance with these Rules, the respondent is entitled to attend and participate in the 

hearing. 

At a hearing conducted in connection with any Disciplinary Proceedings, the Compliance 

Department and each respondent may: 

(i) present evidence and facts determined relevant and admissible by the chairman 

of the Disciplinary Panel; 

(ii) call and examine witnesses; and 

(iii) cross-examine witnesses called by other parties. 

If the respondent fails to file an answer, has filed a general denial, or if any or all of the allegations 

in the notice of charges are not expressly denied in the respondent’s answer, the chairman of the 

Disciplinary Panel may limit evidence concerning any allegations not expressly denied in 

determining the sanctions to impose. If a respondent fails to file an answer but appears at the 

hearing, the respondent may not participate in the hearing (by calling or cross-examining 

witnesses, testifying in defense, presenting evidence concerning the notice of charges, or 

otherwise) unless the Disciplinary Panel determines that the respondent had a compelling reason 

for failing to file a timely answer. If the Disciplinary Panel determines that the respondent had a 

compelling reason for failing to file a timely answer, the Disciplinary Panel will adjourn the hearing 

and direct the respondent to promptly file the written answer in accordance with these Rules. 
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Any Person entitled, or required or called upon, to attend a hearing before a Disciplinary Panel 

pursuant to this Rule will be given reasonable notice, confirmed in writing, specifying the date, 

time and place of the hearing, and the caption of the Disciplinary Proceedings. CMSEF will 

require all Authorized Persons and Authorized Users that are called as witnesses to appear at the 

hearing and produce evidence. CMSEF will make reasonable efforts to secure the presence of 

all other Persons called as witnesses whose testimony would be relevant. 

If during any Disciplinary Proceedings the Disciplinary Panel determines that a reasonable basis 

exists to believe that the respondent violated a Rule or a provision of Applicable Law other than 

the violations alleged in the notice of charges, the Disciplinary Panel may consider those 

apparent violations after providing the respondent with an opportunity to answer the additional 

allegations in accordance with these Rules. In connection with considering apparent violations 

pursuant to this Rule, the Disciplinary Panel may request that the Compliance Department 

provide the Disciplinary Panel with any additional information. 

The Disciplinary Panel may summarily impose sanctions on any Participant, Authorized Person, 

or Authorized User that impedes or delays the progress of a hearing. 

CMSEF will arrange for any hearing conducted in connection with Disciplinary Proceedings to be 

recorded hearing verbatim, or substantially verbatim, in a manner capable of accurate 

transcription. The record shall not be transcribed unless requested by CTFC staff or the 

respondent or the decision is appealed. If the respondent requests a copy of all or portions of the 

recording of a hearing, the chairman of the Disciplinary Panel may within his sole discretion order 

the respondent to pay the costs for transcribing the recording of the hearing. 

No interlocutory appeals of rulings of any Disciplinary Panel or chairman of the Disciplinary Panel 

are permitted. 

Rule 517 Decision of Disciplinary Panel 

As promptly as reasonable following a hearing, the Disciplinary Panel will issue an order 

rendering its decision based on the weight of the evidence contained in the record of the 

Disciplinary Proceedings. A decision by a majority of the Disciplinary Panel will constitute the 

decision of the Disciplinary Panel. 

CMSEF will serve a copy of the order of the Disciplinary Panel on the respondent and the 

Compliance Department. The order will include: 

(i) the notice of charges or summary of the allegations; 

(ii) the answer, if any, or a summary of the answer; 

(iii) a brief summary of the evidence introduced at the hearing (or, where appropriate, 

incorporation by reference of the Investigation Report); 

(iv) findings of fact and conclusions concerning each allegation, including each specific 

Rule that the respondent is found to have violated; 

(v) the imposition of sanctions, if any, the basis for the sanctions, and effective date of 

each sanction; and 

(vi) notice of the respondent’s right to appeal pursuant to these Rules. 

A Disciplinary Panel shall be dissolved automatically when it has decided the matter for which it 

was appointed and has notified the respondent and the Chief Compliance Officer in writing of its 

decision. 

Unless a timely notice of appeal is filed pursuant to these Rules, the order of the Disciplinary 

Panel will become final upon the expiration of 20 days after the order is served on the respondent 

and a copy thereof is provided to the Compliance Department. 
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CMSEF will notify the Person subject to a Disciplinary Panel decision within thirty days of the 

action taken against such Person. 

Rule 518 Sanctions 

After notice and opportunity for hearing in accordance with these Rules, CMSEF will impose 

sanctions if any Participants, Authorized Persons, Authorized Users, Clearing Members, and 

Participant’s Customers, or other Person using any of the Participant’s User IDs is found to have 

violated or to have attempted to violate a Rule or provision of Applicable Law for which CMSEF 

possesses disciplinary jurisdiction. Any such sanctions shall take into account the respondent’s 

disciplinary history (if any). CMSEF may impose one or more of the following sanctions or 

remedies: 

(i) a warning letter, provided that no more than one warning letter may be issued to the 

same respondent found to have committed the same rule violation within a rolling 12-

month period; 

(ii) censure; 

(iii) limitation, restriction or qualification of Trading Privileges or other activities, functions 

or operations; 

(iv) suspension of Trading Privileges for a period not to exceed 12 months; 

(v) fine (subject to this Rule); 

(vi) restitution or disgorgement (in the event of a Customer harm, full Customer

restitution, except where the amount of restitution or to whom it should be provided 

cannot reasonably be determined); 

(vii) termination of Trading Privileges; 

(viii) expulsion; or 

(ix) any other sanction or remedy deemed to be appropriate. 

CMSEF will consider the severity of the violation and the deterrent effect when determining an 

appropriate sanction.

CMSEF may impose a fine of up to $100,000 for each violation. If a fine or other amount is not 

paid within 30 days of the date that it becomes payable, then interest will accrue on the sum from 

the date that it became payable at the quoted prime rate plus three per cent. CMSEF has sole 

discretion to select the bank on whose quotations to base the prime rate. Each Participant will be 

responsible for paying any fine or other amount imposed on, but not paid by, any of its Authorized 

Persons or Authorized Users. 

Rule 519 Appeal from Disciplinary Panel Decision, Summary Impositions of Fines and Other 

Summary Actions 

Each respondent found by the Disciplinary Panel to have violated (or, in the case of a Participant, 

whose Authorized User, Clearing Member or other Person using its User ID was found to have 

violated) a Rule or who is subject to any summary fine imposed pursuant to these Rules or any 

summary action imposed pursuant to these Rules may appeal the decision within 20 days of 

receiving the order of the Disciplinary Panel or the notice of summary action, as the case may be, 

by filing a notice of appeal with the Chief Compliance Officer. 

The Compliance Department may appeal all or any part of a decision of the Disciplinary Panel, 

including any sanctions that may or may not have been imposed by the Disciplinary Panel, within 

20 days of receiving the order of the Disciplinary Panel, by filing a notice of appeal with the Chief 

Compliance Officer. 

While an appeal is pending, the effect of the order of the Disciplinary Panel or the summary 

action (including any sanctions, remedies or costs imposed thereby) shall be suspended. 
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The notice of appeal must state in writing the grounds for appeal, including the findings of fact, 

conclusions or sanctions to which the respondent objects. An appellant may appeal the order of 

the Disciplinary Panel or any summary action on the grounds that: 

(i) the order or summary action was arbitrary, capricious, an abuse of discretion, or not 

in accordance with these Rules; 

(ii) the order or summary action exceeded the authority or jurisdiction of the Disciplinary 

Panel, the Chief Compliance Officer or CMSEF; 

(iii) the order or summary action failed to observe required procedures; 

(iv) the order or summary action was unsupported by the facts or evidence; or 

(v) the sanctions, remedies or costs, which were imposed, were inappropriate or 

unsupported by the record. 

The Chief Compliance Officer will forward copies of any notice of appeal received by it to all 

parties to the Disciplinary Proceeding or summary action, as the case may be, except the 

appellant. On or before the 20th day after filing a notice of appeal, the appellant must file with the 

Chief Compliance Officer and serve on the Compliance Department a brief supporting the notice 

of appeal and documents supporting the brief. On or before the 20th day after the date on which 

the appellant serves their supporting brief, the appellee must file and serve its brief in opposition. 

On or before the 10th day after the date on which the appellee serves its brief in opposition, the 

appellant must file and serve a brief in reply on the Compliance Department. 

In connection with any appeal, the Compliance Department will furnish to the Chief Compliance 

Officer and to the respondent/appellant a transcript of the hearing, any exhibits introduced at the 

hearing, the notice of appeal and briefs filed to support and oppose the appeal. 

No later than 30 days after the last submission filed pursuant to this Rule, the Chief Compliance 

Officer will appoint an Appeals Panel to consider and determine the appeal. An Appeals Panel 

shall be comprised of three individuals, none of whom shall be a member of the Compliance 

Department or have been a member of any Disciplinary Panel involved in the matters on appeal. 

The chairman of the Appeals Panel shall be an individual who would not be disqualified from 

serving as a Public Director. 

Within 10 days of being notified of the appointment of the Appeals Panel, a respondent may seek 

to disqualify any individual named to the Appeals Panel for the reasons identified in these Rules, 

by serving written notice on the Chief Compliance Officer. By not filing a timely request for 

disqualification, the respondent will be deemed to have waived any objection to the composition 

of the Appeals Panel. The Chief Compliance Officer will decide the merits of any request for 

disqualification within his or her sole discretion. Any such decision will be final and not subject to 

appeal. 

The Appeals Panel may hold a hearing to allow parties to present oral arguments. Any hearing 

will be conducted privately and confidentially. Notwithstanding the confidentiality of hearings, the 

Appeals Panel may appoint an expert to attend any hearing and assist in the deliberations if such 

individuals agree to be subject to appropriate confidentiality agreements. In determining 

procedural and evidentiary matters, the Appeals Panel will not be bound by evidentiary or 

procedural rules or law. 

The Appeals Panel will only consider on appeal the record before the Disciplinary Panel or, in the 

case of a summary action, the record considered by the Chief Compliance Officer, the notice of 

appeal, the briefs filed in support and opposition of the appeal, and any oral arguments of the 

parties. The Appeals Panel may only consider new evidence when the Appeals Panel is satisfied 

that good cause exists for why the evidence was not introduced during the Disciplinary 

Proceeding or when imposing the summary action. 

After completing its review, the Appeals Panel may affirm, modify or reverse any order of the 

Disciplinary Panel or summary action under appeal, in whole or in part, including increasing, 
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decreasing or eliminating any sanction or remedy imposed, imposing any other sanction or 

remedy authorized by these Rules, or remanding the matter to the same or a different Disciplinary 

Panel for further Disciplinary Proceedings or for reconsideration by the Chief Compliance Officer 

in the case of summary action. The Appeals Panel may order a new hearing for good cause or if 

the Appeals Panel deems it appropriate. 

As promptly as reasonably possible following its review, the Appeals Panel will issue a written 

decision on appeal rendering its decision based on the weight of the evidence before the Appeals 

Panel. The decision of the Appeals Panel will include a statement of findings of fact and 

conclusions for each finding, sanction, remedy and cost reviewed on appeal, including each 

specific Rule and provision of Applicable Law that the respondent is found to have violated, if any, 

and the imposition of sanctions, remedies and costs, if any, and the effective date of each 

sanction, remedy or cost. 

The Appeals Panel’s written order on appeal (including findings of fact and conclusions and the 

imposition of sanctions, remedies and costs, and the effective date of any sanction, remedy cost) 

will be the final action of CMSEF and will not be subject to appeal within CMSEF.

Rule 520 Summary Imposition of Fines 

The Chief Compliance Officer may summarily impose a fine against a Participant (on behalf of 

itself or any of its Authorized Persons, Authorized Users, or Customers, or other Persons using 

any of its User IDs), Clearing Member, or Authorized User for failing: 

(i) to timely pay fees, cost, charges or fines to CMSEF or a DCO; 

(ii) to make timely and accurate submissions to CMSEF of notices, reports or other 

information required by these Rules; and 

(iii) to keep any books and records required by these Rules. 

The Compliance Department, acting on behalf of the Chief Compliance Officer, will give notice of 

any fine imposed pursuant to this Rule to each Participant or Authorized User subject thereto. 

The notice will specify:

(i) the violation of these Rules for which the fine is being imposed;

(ii) the date of the violation; and 

(iii) the amount of the fine. Within 20 days of serving the notice of fine, the 

Participant, or Authorized User, as the case may be, must either pay or cause 

the payment of the fine or file notice of an appeal pursuant to these Rules. 

Unless timely notice of appeal is filed pursuant to these Rules, the fine will 

become final upon the expiration of 20 days after the notice of fine is served on 

the Participant, or Authorized User, as the case may be. 

CMSEF will set the amount of any fines imposed pursuant to this Rule, with the maximum fine for 

each violation not to exceed $5,000. Summary imposition of fines pursuant to this Rule will not 

preclude CMSEF from bringing any other action against the Participant, or Authorized User, as 

the case may be. 

Rule 521 Summary Suspensions and Other Summary Actions 

Notwithstanding anything in these Rules to the contrary, if the Chief Compliance Officer 

reasonably believes that immediate action is necessary to protect the best interests of CMSEF or

the marketplace, the Chief Compliance Officer may, after consultation with the Regulatory 

Oversight Committee summarily suspend, revoke, limit, condition, restrict or qualify the Trading 

Privileges of a Participant or Authorized User and take other summary action against a 

Participant or any of its Authorized Users in accordance with these Rules. 

Whenever practicable, the Compliance Department, acting on behalf of the Chief Compliance 

Officer, shall provide prior written notice to the party against whom any action in accordance with 
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this Rule shall be taken. If prior notice is not practicable, CMSEF will give notice at the earliest 

possible opportunity to the respondent against whom the action is brought. The Compliance 

Department, acting on behalf of the Chief Compliance Officer, will prepare a notice of summary 

action (which will state the action, the reasons for the action, and the effective time, date and 

duration of the action) and serve the notice on such party and advise the recipient of the notice of 

its right to a prompt hearing before a Disciplinary Panel and its right to be represented by legal 

counsel or other representative at such hearing. A request by the recipient of the notice for such 

a hearing shall not delay the effectiveness of the summary action. 

At the request of CMSEF, a respondent against whom a summary action is brought pursuant to 

this Rule must provide books and records over which the respondent has access or control and 

must furnish information to, or appear or testify before, CMSEF or the Disciplinary Panel with the 

enforcement of any Rule. 

If a hearing is requested pursuant to this Rule, the Disciplinary Panel will promptly convene a 

hearing to be conducted in accordance with these Rules.

As promptly as reasonably possible after the hearing, the Disciplinary Panel will issue to the 

respondent a written order affirming, modifying, or reversing the summary action. The order will 

include a description of the summary action taken, a summary of the evidence introduced at the 

reinstatement hearing, a statement of findings of fact and conclusions, a description of any action 

taken or to be taken by CMSEF, and the effective date, time and duration thereof. 

Any decision of a Disciplinary Panel pursuant to this Rule will be the final action of CMSEF, and 

not subject to appeal within CMSEF upon serving the respondent with a copy of the decision. 

Rule 522 Reinstatement after Summary Suspension 

A respondent whose Trading Privileges are suspended, revoked, limited, conditioned, restricted 

or qualified pursuant to these Rules may apply for reinstatement by filing with the Compliance 

Department a written request stating the applicant’s reasons for seeking reinstatement. CMSEF 

will not consider a respondent’s request for reinstatement if the respondent 

(i) owes any fines, fees, charges or costs to CMSEF, 

(ii) continues to fail to appear at Disciplinary Proceedings without good cause or 

(iii) continues to impede the progress of Disciplinary Proceedings. 

Within a reasonable period after the filing of a request for reinstatement, the Appeals Panel will 

conduct a hearing to consider the request. At the hearing for reinstatement, the respondent will 

present its, his case supporting the reinstatement and the Compliance Department, acting on 

behalf of the Chief Compliance Officer may, in its discretion, present its case opposing or 

supporting the reinstatement and each may present relevant and admissible evidence and facts 

and call, examine and cross-examine witnesses. At the hearing for reinstatement, CMSEF may 

require Participants, Authorized Persons, Authorized Users, Clearing Members, or Participant’s 

Customers to appear as witnesses and produce evidence if the Appeals Panel determines that 

the evidence is relevant. 

As promptly as reasonably possible after a reinstatement hearing, the Appeals Panel will issue an 

order reinstating, denying the reinstatement, or placing conditions on the reinstatement of the 

Trading Privileges of the respondent. The order will include a brief summary of the evidence 

introduced at the reinstatement hearing; and, if applicable, findings of fact and conclusions not 

contained in the notice of summary action issued pursuant to these Rules. The order of the 

Appeals Panel may not be appealed. 

Rule 523 Rights and Responsibilities after Suspension or Termination 
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When the Trading Privileges of a Participant or Authorized User are suspended for a period of 12 

months or less, none of its rights and Trading Privileges (including the right to hold oneself out to 

the public as a Participant or Authorized User or enter Orders or RFQs into the SEF and receive 

Participant rates for fees, costs, and charges and deposit margin at Participant levels) will apply 

to such Participant, Authorized Person or Authorized User during the period of the suspension, 

except for the right to assert claims against others as provided in these Rules. Any such 

suspension will not affect the rights of creditors under these Rules or relieve the Participant or 

Authorized User of its obligations under these Rules to perform any Swaps entered into before 

the suspension, or for any Company fees, costs, or charges incurred during the suspension. 

CMSEF may discipline a suspended Participant, Authorized Person or Authorized User under this 

Chapter 5 for any violation of a Rule or provision of Applicable Law committed by the Participant 

or Authorized User before, during or after the suspension.

When the Trading Privileges of a Participant or Authorized User are terminated, all of its rights 

and Trading Privileges will terminate, except for the right of the Participant, Authorized Person or 

Authorized User in question to assert claims against others, as provided in these Rules. Any 

such termination will not affect the rights of creditors under these Rules. A terminated Participant 

or Authorized User may only seek to reinstate his Trading Privileges by providing CMSEF with 

satisfactory evidence that he complies with these Rules. CMSEF will not consider the application 

of a terminated Participant or Authorized User if such Participant or Authorized User, as the case 

may be, fails to appear at Disciplinary Proceedings without good cause or impedes the progress 

of Disciplinary Proceedings. 

A suspended or terminated Participant or Authorized User remains subject to these Rules and the 

jurisdiction of CMSEF for any acts or omissions prior to the suspension or termination, and must 

cooperate in any Investigation, Disciplinary Proceeding, appeal from Disciplinary Proceedings, 

summary suspension or other summary action as if the suspended or terminated Participant or 

Authorized User still had Trading Privileges. 

Rule 524 Notice of Disciplinary Proceedings 

CMSEF will provide written notice of Disciplinary Proceedings to the parties and the RSP 

consistent with applicable CFTC Regulations. Whenever CMSEF suspends, expels, fines or 

otherwise disciplines, or denies any Person access, to CMSEF, CMSEF will make the public 

disclosures required by CFTC Regulations.

Rule 525 CFTC Review of CMSEF Actions

The review by the CFTC, pursuant to section 8c of the Act, as amended, of any suspension, 

expulsion, disciplinary or access denial action, or other adverse action by CMSEF, shall be 

governed by Part 9 of the CFTC’s Regulations.

Chapter 6 Miscellaneous

Rule 601 Gifts and Gratuities 

Except with the prior written approval of the Chief Compliance Officer, no Participant, Authorized 

Person, or Authorized User shall, directly or indirectly, give or permit to be given anything of 

value, including gifts and gratuities, to any CMSEF member of the Board, Officer, Employee, or 

Agent of CMSEF.

Rule 602 Rule Violations
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CMSEF shall consider it a violation of these Rules for a Participant, Authorized Person, 

Authorized User, or Customer of a Participant to knowingly violate the terms of any agreement 

made with CMSEF.

Rule 603 Market Data

CMSEF owns all rights, title and interest in and to all intellectual property and other proprietary 

rights (including all copyright, patent, trademark or trade secret rights) in any and all Market Data, 

and all derivative works based thereon, generated in the course of the operations of CMSEF. 

Participants, and other Persons affiliated with any of the foregoing may not distribute, sell or 

retransmit Market Data to any third party without the consent of CMSEF, with the exception of 

information about specific trades executed on CMSEF by the Participant or other Person affiliated 

with the Participant. 

CMSEF may share such proprietary data or personal information with one or more registered 

entities (as such term is defined in CFTC Regulations).

CMSEF is prohibited from the use any proprietary data or personal information obtained through 

the course of its regulatory role to further any commercial any business interest, without express 

permission. Such information includes, but is not limited to:

1. Records or data obtained through CMSEF’s surveillance of Participants; 

2. Records or data obtained related to a CMSEF Enforcement Action or 

Investigation; and

3. Records or data obtained from Participants by request

Access to the SEF may not in any way be conditioned upon the Participant agreeing to allow 

CMSEF to use its proprietary records or data. Such agreement must be in the form of 

independent, affirmative consent via separate signature from the Participant that CMSEF is 

collecting data or personal information for CMSEF’s regulatory role. 

Rule 604 Publication of Trading Information

As required by Core Principle 9 of Part 37, and by Part 16, of the CFTC Regulations, CMSEF will 

publish information about trading activities on CMSEF. CMSEF will publish such information in a 

timely manner.

Rule 605 Anti-Money Laundering

CMSEF requires all of its Participants to ensure that they “know their Customers and Employees”. 

CMSEF requires that all Participants, their Approved Persons and Approved Users agree to not 

knowingly assist any money laundering or other illicit business and will not knowingly assist or be 

a conduit for terrorist financing.

CMSEF may require that Participants provide evidence to prove that Participants’ Customers are 

not Specifically Designated Nations or Blocked Persons as designated by the Office of Foreign 

Assets Control of the U.S. Department of the Treasury.

Rule 606 Swaps Trading by CMSEF Officials

CMSEF prohibits members of the Board, Officers, Employees, and independent contractors from 

trading, directly or indirectly, any Swap traded on CMSEF or any other SEF where such individual 

has access to material non-public information concerning such Swap. Swaps traded by 
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retirement plans or retirement investments where the individual is not involved in the decision 

making process shall not be deemed to constitute trading directly or indirectly in a Swap.

Rule 607 Confidentiality

With the following exceptions, CMSEF shall hold in confidence all non-public information provided 

by a Participant, Customer of a Participant or Authorized User:

(i) when legally requested by a Government Agency or the regulatory authority 

(foreign or domestic);

(ii) to a SDR, DCO, or other entity for the purposes of clearing a Swap;

(iii) to a Regulatory Services Provider;

(iv) when required as part of a legal proceeding;

(v) as part of an Investigation into market abuses or Disciplinary Proceedings;

(vi) with the consent of the Participant; and

(vii) any other reason permitted by these Rules.

Rule 608 Information-Sharing Agreements 

As required by Applicable Law, from time to time CMSEF may enter into information-sharing 

agreements to coordinate surveillance with domestic or foreign regulators, self-regulatory 

organizations, clearing organizations, exchanges, markets or other execution facilities to share 

information. 

Under such information-sharing agreements, CMSEF may:

(i) share information about current and former Participants;

(ii) share information about current and ongoing Investigations;

(iii) share information about CMSEF market activity; and

(iv) require Participants to provide detailed information about their activities, Customers 

and staff.

Rule 609 Rule Changes Due to Changes in Government Regulations

CMSEF may, from time to time, amend or repeal any Rule and/or adopt new Rules as required to 

remain in compliance with a CFTC or CEA Rules or Regulations. All new Rules, amendments or 

repeals of a Rule or adoption of a new Rule, shall take effect upon the effective date adopted by 

CMSEF.

Any and all such changes shall be binding on all Participants, Authorized Officials, Authorized 

Users, and Customers of Participants of the CMSEF. 

CMSEF may, in its sole discretion, waive, or extend the time period for performing, any act or 

acts designated by these Rules, but only to the extent that such waiver or extension is not 

inconsistent with the CEA or CFTC Regulations

Rule 610 Governing Law

Any disputes between CMSEF and a Participant, a Participant’s Authorized Person or Authorized 

User or a Customer of a Participant shall be governed by, and construed in accordance with, the 

laws of the State of New York applicable to contracts executed and performed wholly within the 

State of New York, without regard to any provisions of New York law that would apply the 

substantive law of a different jurisdiction. 

Any legal actions against CMSEF, its members of the Board, Officers, Employees, or agents 

must be brought within one year from the date of the event that caused the accrued. Legal 
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actions against CMSEF shall be brought in the State or Federal courts located within the Borough 

of Manhattan in the City of New York. 

Participants, Authorized Persons, Authorized Users, and Customers of Participants who fail to 

prevail in a lawsuit or other legal proceeding against CMSEF or its members of the Board, 

Officers, Employees or Agents shall reimburse CMSEF for all expenses, including reasonable 

attorneys’ fees, incurred by CMSEF or its members of the Board, Officers, Employees or Agents 

by CMSEF in the defense of such proceedings. 

Rule 611 Force Majeure

CMSEF shall not be obligated to perform its obligations under these Rules or any agreement with 

a Participant, or to compensate any Participant or a Participant’s Customer for losses as a result 

of any circumstances that CMSEF determines, in its sole discretion, may have an adverse effect 

upon the functions and facilities of CMSEF. For the avoidance of doubt, this includes acts of 

God, fire or other natural disasters, bomb threats, acts of terrorism or war, severely inclement 

weather, power outages, interruption in telecommunications or Internet services or services by 

network service providers, work stoppages, severe market disruptions, disputes with service 

providers, or other unforeseen events.

Rule 612 Extension or Waiver of CMSEF Rules

The Chief Compliance Officer of CMSEF may, in his sole discretion, waive, or extend the time 

period for performing, any act or acts designated by CMSEF Rules, but only to the extent that 

such waiver or extension is not inconsistent with the CEA or CFTC Regulations.

Rule 613 Trading Restrictions of CMSEF Employees

Employees of CMSEF are prohibited from:

(i) Trading, directly or indirectly, in any commodity interest traded on CMSEF;

(ii) Trading, directly or indirectly, in any related commodity interest;

(iii) Trading, directly or indirectly, in a commodity interest traded on contract markets or 

SEFs or cleared by DCOs other than CMSEF; provided, that this prohibition only 

applies if the Employee has access to material, non-public information concerning 

such commodity interest;

(iv) Trading, directly or indirectly, in a commodity interest traded on or cleared by a linked 

exchange if the Employee has access to material, non-public information concerning 

such commodity interest; and

(v) Disclosing to any other Person any material, non-public information which such 

Employee obtains as a result of his or her employment at CMSEF where such 

Employee has or should have a reasonable expectation that the information 

disclosed may assist another Person in trading any commodity interest; provided, 

however, That such rules shall not prohibit disclosures made in the course of an 

Employee's duties, or disclosures made to another self-regulatory organization, 

linked exchange, court of competent jurisdiction or representative of any agency or 

department of the federal or state government acting in his or her official capacity.
Swap Execution Facility 

Rulebook

FebruaryApril 2016

Revision 2.02.2

ALL CLEAR MARKETS SWAP EXECUTION FACILITY PARTICIPANTS AND AUTHORIZED USERS, 

WHETHER SUCH PARTICIPANT OR AUTHORIZED USER ACCESSES CMSEF DIRECTLY OR 

THROUGH AN INTERMEDIARY, AND ANY CLEARING MEMBER WHICH GUARANTEES SWAPS 

TRADED ON CMSEF, HEREBY AGREE THAT THESE RULES ARE BINDING UPON ANY SUCH 

PERSON OR ENTITY AND ITS EMPLOYEES AND CUSTOMERS. IT IS FURTHER AGREED THAT 

THESE RULES ARE APPLICABLE AND THAT SUCH PERSONS ARE SUBJECT TO THE 

JURISDICTION OF CMSEF, THE CFTC, AND ANY RELEVANT SELF-REGULATORY ORGANIZATION. 

ALL SUCH PERSONS HEREBY AGREE TO COOPERATE FULLY IN THE EVENT CMSEF, THE CFTC, 

OR A SELF-REGULATORY ORGANIZATION CONDUCTS ANY INQUIRY, INVESTIGATION, OR AUDIT 

OF ANY PARTICIPANT OR ACTIVITY CONDUCTED ON THIS SWAP EXECUTION FACILITY.
Table of Contents

Chapter 1 Definitions .........................................................................................................................65

Chapter 2 Governance ......................................................................................................................11

Rule 201 Board ......................................................................................................................................11

Rule 202 Nominating Committee...........................................................................................................11

Rule 203 Regulatory Oversight Committee ...........................................................................................11

Rule 204 Additional Standing Committees............................................................................................12

Rule 205 Ability of the Board to Review Decisions ..............................................................................12

Rule 206 Ability of the Board to Amend these Rules ............................................................................12

Rule 207 Eligibility ................................................................................................................................12

Rule 208 Officers...................................................................................................................................13

Rule 209 Chief Compliance Officer.......................................................................................................13

Rule 210 Conflicts of Interest ................................................................................................................14

Rule 211 Non-Public Information ..........................................................................................................15

Rule 212 Reporting to the CFTC ...........................................................................................................16

Rule 213 Reserved .................................................................................................................................16

Rule 214 Reserved .................................................................................................................................16

Rule 215 Reserved .................................................................................................................................16

Rule 216 Information Sharing Agreements............................................................................................16

Rule 217 Agreements with Regulatory Services Providers....................................................................16

Rule 218 Maintenance of Books and Records....................................................................................1617

Rule 219 Swap Recordkeeping ..............................................................................................................17

Chapter 3 Participants ...................................................................................................................1718

Rule 301 Jurisdiction..........................................................................................................................1718

Rule 302 Trading Privileges...............................................................................................................1718

Rule 303A Eligibility Criteria for Participants and Access................................................................1819

Rule 303B Eligibility Criteria for Independent Software Vendors ....................................................1920

Rule 303C Direct Market Access...........................................................................................................20

Rule 303D Withdrawing from CMSEF..............................................................................................2021

Rule 304 Authorized Users ....................................................................................................................21

Rule 305 CMSEF Platform Security ..................................................................................................2122

Rule 306 Participant Application Process..........................................................................................2122
Rule 307 Authorized Representatives ................................................................................................2122

Rule 308 Customers of Participants...................................................................................................2223

Rule 309A Minimum Financial Standards.........................................................................................2223

Rule 309B Minimum Financial Standards Reporting ............................................................................23

Rule 310 Authority to Impose Restrictions........................................................................................2324

Rule 311 Mandatory Trading .............................................................................................................2324

Rule 312 Uncleared Swaps.................................................................................................................2324

Rule 313 Fees.....................................................................................................................................2324

Rule 314 Communications between CMSEF and Participants ..........................................................2324

Rule 315 Notices....................................................................................................................................24

Rule 316 Reserved .............................................................................................................................2425

Rule 317 Continuing Applicability of Jurisdiction and Rules............................................................2425

Rule 318 Participant Trading Records ...............................................................................................2425

Rule 319 Participant Maintenance of Records ...................................................................................2425

Rule 320 Legal Certainty for CMSEF Trades........................................................................................26

Chapter 4 Trading Standards and Practices ..............................................................................2526

Rule 401 Swaps Traded on CMSEF...................................................................................................2526

Rule 402 Prohibited Trading Activities..............................................................................................2627

Rule 403 Fraudulent Acts and Misstatements....................................................................................2627

Rule 404 Misuse of the CMSEF Trading Platform ............................................................................2627

Rule 405 Trading Hours.....................................................................................................................2627

Rule 406 Execution of Swaps on CMSEF..........................................................................................2728

Rule 407A Required Transactions......................................................................................................2930

Rule 407B Clearing Exception for Swaps..............................................................................................30

Rule 408 Cancellation of Orders by Participants ...............................................................................2930

Rule 409 Modification or Cancellation of Orders and Trades by CMSEF.........................................2930

Rule 410A Pre-Execution Credit Checks...........................................................................................3031

Rule 410B Confirmation of Agreements Between Counterparties.........................................................31

Rule 411 Cleared Swaps ....................................................................................................................3031

Rule 412 Position Limits or Accountability .......................................................................................3031

Rule 413A Position Limits.................................................................................................................3132

Rule 413B Position Accountability ....................................................................................................3132
Rule 414 Real-Time Market Monitoring and Surveillance ................................................................3132

Rule 415 Mishandled Customer Orders .............................................................................................3233

Rule 416 Block Trades.......................................................................................................................3233

Rule 417A Pre-Trade Communications .............................................................................................3334

Rule 417B Information Obtained in Pre-Trade Communications......................................................3334

Rule 418A Dissemination of Prices and Trading Information ...........................................................3334

Rule 418B Publicly Reportable Swap Transactions...............................................................................35

Rule 418C Reporting Counterparties .....................................................................................................35

Rule 419 Emergency Rules................................................................................................................3335

Chapter 5 Disciplinary Rules ........................................................................................................3436

Rule 501 General................................................................................................................................3436

Rule 502 CMSEF’s Right to Inspect Books, Records and Systems...................................................3537

Rule 503 Investigations......................................................................................................................3537

Rule 504 Reports of Investigations ....................................................................................................3638

Rule 505 Opportunity to Respond to Investigation Reports...............................................................3638

Rule 506 Review of Investigation Reports.........................................................................................3738

Rule 507 Warnings.............................................................................................................................3739

Rule 508 Notice of Charges ...............................................................................................................3739

Rule 509 Service of Notice of Charges..............................................................................................3839

Rule 510 Answer to Notice of Charges..............................................................................................3840

Rule 511 Right to a Hearing...............................................................................................................3940

Rule 512 Settlements..........................................................................................................................3940

Rule 513 Disciplinary Panels.............................................................................................................3941

Rule 514 Convening Hearings of Disciplinary Proceedings ..............................................................4042

Rule 515 Respondent Review of Evidence ........................................................................................4142

Rule 516 Conducting Hearings of Disciplinary Proceedings.............................................................4143

Rule 517 Decision of Disciplinary Panel ...........................................................................................4244

Rule 518 Sanctions.............................................................................................................................4345

Rule 519 Appeal from Disciplinary Panel Decision, Summary Impositions of Fines and Other 

Summary Actions...............................................................................................................................4345

Rule 520 Summary Imposition of Fines.............................................................................................4547

Rule 521 Summary Suspensions and Other Summary Actions..........................................................4647
Rule 522 Reinstatement after Summary Suspension..........................................................................4648

Rule 523 Rights and Responsibilities after Suspension or Termination.............................................4748

Rule 524 Notice of Disciplinary Proceedings ....................................................................................4749

Rule 525 CFTC Review of CMSEF Actions......................................................................................4749

Chapter 6 Miscellaneous....................................................................................................................4849

Rule 601 Gifts and Gratuities.............................................................................................................4849

Rule 602 Rule Violations...................................................................................................................4849

Rule 603 Market Data ........................................................................................................................4850

Rule 604 Publication of Trading Information ....................................................................................4850

Rule 605 Anti-Money Laundering .....................................................................................................4850

Rule 606 Swaps Trading by CMSEF Officials ..................................................................................4950

Rule 607 Confidentiality ....................................................................................................................4951

Rule 608 Information-Sharing Agreements .......................................................................................4951

Rule 609 Rule Changes Due to Changes in Government Regulations...............................................4951

Rule 610 Governing Law ...................................................................................................................5051

Rule 611 Force Majeure .....................................................................................................................5052

Rule 612 Extension or Waiver of CMSEF Rules...............................................................................5052

Rule 613 Trading Restrictions of CMSEF Employees.......................................................................5052
Chapter 1 Definitions

Unless otherwise specified, the following are defined terms and shall have the meanings specified below.

Acceptable Price Range means the range of prices that an order may be executed without 

being subject to review by the CMSEF Compliance Department and shall be published on the 

CMSEF website.

Account Manager means a Person that meets the criteria set forth in CFTC Rule 43.6(h)(6).

Act or CEA means the Commodity Exchange Act, as amended from time to time.

Affiliate means an affiliate of a Participant or a Person or entity who controls, is controlled or is 

directed, either directly or indirectly by another Person or Participant.

API means application programming interface.

Appeals Panel means a panel appointed by the Chief Compliance Officer under Rule 519.

Applicable Law means, with respect to any Person, and statute, law, regulation, rule or 

ordinance of any governmental or self-regulatory authority applicable to such Person, including 

the CEA, Exchange Act and CFTC Regulations.

Authorized Person means any Person who is authorized by a Participant to represent the 

Participant in CMSEF matters.

Authorized User means any Person who is an agent or Employee of a Participant or Customer 

of a Participant and is authorized by such Participant to access the SEF by any means. For the 

avoidance of doubt, any Authorized User of a Customer shall not be considered an Authorized 

User of the Sponsoring Broker providing DMA to the Customer by virtue of the DMA relationship 

between the two parties. 

Block Trade means a publicly reportable swap transaction in a swap transacted in under Rule 

416, which is publicly reported pursuant to Part 43 of the CFTC Regulations.that meets the 

definition found in CFTC Regulation 43.2; specifically a Block Trade:

(1) Involves a swap that is listed on CMSEF;

(2) Occurs away from CMSEF's trading system or platform and is executed pursuant to CMSEF's 

Rules and procedures;

(3) Has a notional or principal amount at or above the appropriate minimum block size applicable 

to such swap; and

(4) Is reported subject to the rules and procedures of CMSEF and the rules described in Part 43 

of the CFTC Regulations, including the appropriate time delay requirements set forth in CFTC 

Regulation 43.5.

Board means the Board of Directors of CMSEF constituted in accordance with these Rules and 

Applicable Law.

Business Day means any day on which CMSEF is open for trading.

By-Laws mean the By-Laws of CMSEF.

CFTC or Commission means the Commodity Futures Trading Commission and any successor 

regulatory agency or authority.
CFTC Regulations means the rules and regulations of the CFTC, as amended.

Chief Compliance Officer is described under Rule 209. 

Cleared Swap means a Swap that is required to be cleared under Section 2(h)(1)(A) of the CEA 

and CFTC Regulation 39.5 or is accepted for clearing by a Derivatives Clearing Organization 

even though such Swap is not required to be cleared.

Clearing Exception means meeting the requirements for exemption from the clearing 

requirement set forth in Section 2(h)(1) of the Act because one counterparty to the transaction is 

entitled to the exception by virtue of meeting the requirements set forth in Section 2(h)(7) of the 

CEA, CFTC Regulations or CFTC Staff No- Action Letters. 

Clearing Exception Form means a form that entitles a counterparty to enter into a swap with a 

Clearing Exception under the Rules of CMSEF. 

Clearing House means a Derivatives Clearing Organization or non-US central clearing house 

approved by the CFTC that provides clearing services for Swaps traded on CMSEF.

Clearing Member means a member of a Clearing House that is authorized to clear trades for 

Participants or on behalf of a Participant or Authorized Users under the CMSEF Rules.

Client means a Person, other than an individual, that has provided written authority to an Account 

Manager to execute Swaps on CMSEF on behalf of and in the name of that Person. 

CMSEF means Clear Markets North America, Inc.

Compliance Department means anyone that assists CMSEF in the surveillance and 

enforcement of the CMSEF Rules. This includes Employees and agents of CMSEF, including 

Employees and agents of the Regulatory Services Provider.

Control means the possession, direct or indirect, or the power or ability to influence or direct or 

cause the direction of the management and policies of an entity, whether through the ownership 

of securities or otherwise.

Customer has the meaning set forth in CFTC Regulation 1.3(k).

Customer Account means an account held by a Participant on behalf of a Customer.

Derivatives Clearing Organization or DCO has the meaning set forth in Section 1a(15) of the 

CEA.

Direct Market Access or DMA means an arrangement among a Sponsoring Broker, its 

Customer and CMSEF that allows one or more representatives of that Customer to have Trading 

Access using the Participant ID of the Sponsoring Broker. 

Director means any member of the Board of CMSEF.

Disciplinary Offense has the meaning set forth in CFTC Regulation 1.63(a).

Disciplinary Panel means a panel appointed by the CCO pursuant to Rule 513 to conduct 

hearings, render decisions, and impose sanctions involving disciplinary matters pursuant to these 

Rules. 
Disciplinary Proceedings means all actions taken by CMSEF with respect to potential violations 

of the Rules, as set forth in Chapter 5 of this Rulebook. 

DMA Customer means a Customer of a Sponsoring Broker where representatives of the 

Customer that are Persons are designated by the Sponsoring Broker to have Trading Access to 

the SEF Platform using the Participant ID of the Sponsoring Broker and where such Customer 

signs the DMA Customer Documentation. 

DMA Customer Documentation means the agreements (together with any applicable 

schedules, exhibits or appendices thereto required by CMSEF) in form and substance acceptable 

to CMSEF, that are required to be executed and delivered to CMSEF before a DMA Customer 

may access the SEF Platform. 

DMA Order means an Order or RFQ placed by a DMA Customer using the Participant ID of the 

Sponsoring Broker. 

Eligible Contract Participant or ECP means a Participant as defined by Section 1a(18) of the 

CEA.

Emergency means any occurrence or circumstance that, in the opinion of the Board, or a Person 

or Persons duly authorized to issue such an opinion on behalf of the Board under circumstances 

and pursuant to procedures that are specified, requires immediate action and threatens or may 

threaten such things as the fair and orderly trading in, or the liquidation of or delivery pursuant to, 

any agreements, contracts, swaps or transactions or the timely collection and payment of funds in 

connection with clearing and settlement by a derivatives clearing organization, including: (a) any 

manipulative or attempted manipulative activity; (b) any actual, attempted or threatened corner, 

squeeze, congestion or undue concentration of positions; (c) any circumstances which may 

materially affect the performance of agreements, contracts, swaps or transactions, including 

failure of the payment system or the bankruptcy or insolvency of any participant; (d) any action 

taken by any governmental body, or any other registered entity, board of trade, market or facility 

which may have a direct impact on trading or clearing and settlement; (e) at the request of the 

CFTC; and (f) any other circumstance which may have a severe, adverse effect upon the 

functioning of CMSEF. 

Emergency Rules has the meaning set forth in Rule 419. 

Employee has the meaning found in CFTC Regulation 1.59.

Exchange Act means the Securities Exchange Act of 1934, as amended.

Final Decision has the meaning set forth in CFTC Regulation 1.63(a).

Financial Entity means any Participant meeting the criteria set forth in Section 2(h)(7)(C) of the 

CEA.

Futures Commission Merchant or FCM has the meaning set forth in Section 1a(28) of the CEA.

Independent Software Vendor or ISV means a Person that provides Participants with a system 

or platform to route orders to CMSEF but does not provide Participants with the ability to execute 

swaps on system or platform. An ISV cannot be a Participant.

Investigation means a process by which the Compliance Department determines whether a 

violation of CMSEF Rules has occurred. 
Investigation Report has the meaning as described in Rule 504.

Legal Entity Identifier has the meaning described in Part 45 of the CFTC RegulationsRegulation 

45.6.

Major Swap Participant is defined in Part 45Section 1a(33) of the CEA.

Market Data means any data or other information contained in, displayed on, or generated by 

transactions entered into or executed on CMSEF.

Market Date Vendor means a vendor who has entered into an agreement with CMSEF to 

distribute Market Data.

NFA means the National Futures Association.

Officer means an officer of CMSEF.

Order means an actionable bid or offer (i) in response to a Request For Quote, (ii) displayed in 

the Order Book, or (iii) modification of an RFQ or price displayed in the Order Book.

Order Book means the Central Limit Order book part of the CMSEF trading system in which all 

Participants have the ability to enter multiple bids or offers, observe or receive bids and offers 

entered by other Participants, and execute such bids and offers.

Participant means any Person that has been granted Trading Privileges under the CMSEF Rules 

and who may trade for its own account or for or on behalf of a Customer.

Participant Data means any and all data and other information submitted to CMSEF by the 

Participant.

Participant Documentation means any such agreements and subsequent addenda or 

amendments required by CMSEF before a Participant will be granted Trading Privileges.

Participant ID is a unique identifier assigned to each Participant by CMSEF.

Person means any natural person or entity.

President means the Person appointed by the Board as CMSEF’s chief executive officer in 

accordance with CMSEF’s By Laws and duties as determined by the Board.

Proprietary Account is defined by CFTC Regulation 1.3(y).

Proprietary Data means any information with respect to any Person or the identity of such 

Person or their transactions or trading positions.

Public Director means a director of CMSEF who is not an Employee or agent of CMSEF and 

whose compensation is not tied to the performance of CMSEF.

Regulatory Oversight Committee or ROC means the committee of the Board as described in 

Rule 203.
Regulatory Services Agreement means the agreement by which CMSEF delegates certain 

market surveillance, trade practice surveillance, and other regulatory compliance related services 

to a Regulatory Services Provider.

Regulatory Services Provider means the organization that provides regulatory services to 

CMSEF under a Regulatory Services Agreement.

Reporting Counterparty means a Participant that is designated as such under Part 45 of the 

CFTC RegulationsRegulation 45.1 and 45.8.

Request for Quote or RFQ means a request for quote sent by a Participant to other Participants 

for the purpose of getting bids or offers for a specific instrument under these Rules.

Required Swap Creation Data is defined under CFTC Regulation 45.1.

Required Transaction means any Swap transaction that is required under Section 2(h)(8) of the 

CEA to be executed on a SEF.

Review Panel means a panel formed for the purpose of deciding whether there has been a 

violation of CMSEF Rules.

Rules mean any rule adopted from time to time by CMSEF relating to the operation of or conduct 

of trading on CMSEF.

SEC means the Securities and Exchange Commission and any successor agency or regulatory 

authority.

SEF means a swap execution facility as registered with the CFTC and defined in Section 1a(50) 

of the CEA. CMSEF is a SEF.

Settlement Agreement has the meaning set forth in CFTC Regulation 1.63(a).

Sponsoring Broker means a Participant that designates one or more of its Customers as DMA 

Customers under the CMSEF Rules. 

Swap means any instrument defined as a swap under Section 1a(47) of the CEA and as defined 

in further CFTC Regulations, and is traded on CMSEF.

Swap Data Repository or SDR means any swap data repository registered with the CFTC as 

defined by Section 1a(48) of the CEA.

Swap Dealer means a swap dealer as defined in Section 1a(49) of the CEA.

Trade means any executed transaction for the purchase or sale of a Swap on CMSEF.

Trading Hours means the hours during which Participants may regularly execute trades on 

CMSEF.

Trading Privileges means the rights granted to a Participant to enter Orders and execute Swap 

transactions on CMSEF.
User ID means a unique identifier issued to each Authorized User, which enables CMSEF to 

identify each individual accessing the CMSEF system.
Chapter 2 Governance

Rule 201 Board

(i) CMSEF shall be governed by the Board according to the Bylaws of Clear Markets North 

America, Inc.

(ii) At all times following the CFTC granting CMSEF permission to operate as a SEF the Board 

shall be composed of at least 35%, but in no case less than two, or fewer than the minimum 

number or percentage of Public Directors required by CFTC Regulations.

(iii) Public Directors can only be appointed or removed by an absolute majority of the members of 

the Board or Stockholders, either:

a. in a meeting;

b. by written consent of all Directors in lieu of a meeting; or

c. by written consent of a majority of Stockholders in lieu of a meeting.

(iv) Public Directors shall serve for two-year terms from their date of election, and shall meet the 

following criteria:

a. Public Directors may not be members of CMSEF;

b. Public Directors may not be salaried Employees of CMSEF;

c. Public Directors may not primarily perform services for CMSEF in a capacity other 

than as a member of the Board; and

d. Public Directors shall not be officers, principals or Employees of a Participant of 

CMSEF.

(v) Members of the Board, including Public Directors must be of sufficient integrity and have 

relevant experience in financial markets.

(vi) Non-executive Directors and Public Directors compensation shall not be linked to the 

performance of CMSEF.

Rule 202 Nominating Committee

The Board shall create a Nominating Committee to identify and nominate qualified individuals to 

serve on the Board as required by Applicable Law. The Board shall take this action no later than 

the date set for compliance as set by the CFTC in order for CMSEF to operate as a SEF. The 

Committee shall include no fewer than the minimum number of Public Directors required by the 

CFTC at all times following the compliance date set by the CFTC.

Rule 203 Regulatory Oversight Committee

The Board shall create a Regulatory Oversight Committee chaired by the Chief Compliance 

Officer. A majority of the members of the Regulatory Oversight Committee shall be Public 

Directors. The Regulatory Oversight Committee shall report to the Board and shall be 

responsible for:

(i) overseeing CMSEF’s regulatory program, including but not limited to audits, 

examinations, Investigations, financial reporting, market surveillance and record keeping;

(ii) monitoring compliance with all regulatory requirements, including those of the CFTC and 

SEC;

(iii) review the performance of the Chief Compliance Officer and the Compliance Department;

(iv) review and approve the annual compliance budget and resources;

(v) review and approve all proposed regulatory changes or changes to CMSEF’s regulatory 

program;

(vi) review any Investigations conducted by CMSEF;

(vii) prepare an annual report to the Board and the CFTC on CMSEF’s regulatory program; 
(viii) monitoring the sufficiency, independence and effectiveness of the CMSEF’s regulatory 

program; and

(ix) undertake any additional duties required under these Rules or assigned to it by the 

Board.

Rule 204 Additional Standing Committees

The Board may create additional standing committees as may be necessary from time to time.

Rule 205 Ability of the Board to Review Decisions

The Board has the authority to review and affirm, modify, or overrule any and all actions taken by 

any Committees of the Board.

Rule 206 Ability of the Board to Amend these Rules

Subject to any required approval or filing required by the CFTC, the Board may from time to time 

amend, repeal or adopt new Rules. All such amendments, repeals, or new Rules shall become 

effective on the date specified by the Board unless otherwise directed by the CFTC.

Rule 207 Eligibility

A Person may not serve on the Board or a Disciplinary Panel, or be an Officer or Employee of 

CMSEF if the individual:

(i) has been convicted of a felony listed in Section 8a(2)(D)(ii) through (iv) of the CEA; 

(ii) is subject to a denial, suspension or disqualification from serving on a disciplinary 

committee, arbitration panel, or governing board of any self-regulatory organization as 

that term was defined in the Exchange Act;

(iii) was found by Final Decision in the past three (3) years of a self-regulatory organization, 

administrative law judge, a court of competent jurisdiction, the CFTC or the SEC to have 

committed a disciplinary offence;

(iv) entered into a Settlement Agreement within the past three (3) years in which any of the 

findings or, in absence of such findings, any of the acts charged, included a Disciplinary 

Offense;

(v) is currently suspended from trading on any contract market, is suspended or expelled 

from membership with any self-regulatory organization, is serving any sentence of 

probation or owes any portion of any fine imposed pursuant to either (A) a finding by a 

Final Decision of a self-regulatory organization, an administrative law judge, a court of 

competent jurisdiction or the CFTC or SEC that the Person committed a disciplinary 

offence, or (B) a Settlement Agreement in which any of the findings or, in absence of 

such findings, any of the acts charged, included a disciplinary offence;

(vi) is subject to an agreement with any self-regulatory organization not to apply for 

membership; or

(vii) is subject to an agreement with the CFTC not to apply for registration.

In the event any of the above events occur with respect to a Board Member, member of a 

Disciplinary Panel, Officer, or Employee of CMSEF, the individual shall immediately disclose the 

occurrence to the CCO.
Rule 208 Officers

The Board shall appoint a President, Chief Compliance Officer, Chief Financial Officer, Chief 

Technology Officer and other such officers and the Board may deem necessary from time to time. 

The President shall be the Chief Executive Officer. Any Officer may also be a board member, 

Employee or officer of any of CMSEF’s Affiliates or subsidiaries.

Rule 209 Chief Compliance Officer

The Board shall appoint an individual to serve as the CCO of CMSEF. The Board shall approve 

the compensation of the CCO. Removal of the CCO shall require the approval of a majority of the 

Board. CMSEF shall notify the CFTC of the removal of the CCO and the appointment of any new 

CCO, whether interim or permanent, within two business days of such appointment. 

The CCO shall be an individual who:

(i) has the background and experience necessary to handle the responsibilities of the 

position; and

(ii) would not be disqualified from serving as a Director of CMSEF.

The CCO shall:

(i) report directly to the Board;

(ii) meet with the Board at least annually; 

(iii) meet with the Regulatory Oversight Committee at least quarterly (each such meeting may 

occur in person or by means of conference telephone); 

(iv) provide any information regarding the regulatory program of the SEF operated by 

CMSEF that is requested by the Board or the Regulatory Oversight Committee;

(v) report directly to the Chief Executive Officer or President of CMSEF;

(vi) be responsible for implementing and overseeing the SEF’s compliance with the Core 

Principles set forth in Section 5h of the CEA and Part 37 of the CFTC Regulations;

(vii) establish and implement written policies and procedures designed to prevent violations of 

CFTC, and CEA regulations and take reasonable steps to ensure compliance with such 

regulations;

(viii) establish and administer a compliance manual which ensures compliance with all 

applicable laws and rules and is designed to prevent ethical violations;

(ix) supervise CMSEF’s self-regulatory program. This includes market surveillance, trade 

practice surveillance, real-time market monitoring, compliance with the CEA and CFTC 

Regulations; 

(x) oversee and manage the CMSEF Compliance Department;

(xi) act as a point of contact with the CFTC and other regulators regarding requests for 

information, including books and records requests; and

(xii) In consultation with the Board or the CEO of CMSEF, resolve any conflicts of interest that 

may arise, including: 

a. conflicts between business considerations and compliance requirements;

b. conflicts between business considerations and the requirement that the SEF 

operated by CMSEF provide fair, open, and impartial access as set forth in CFTC 

Regulation 37.202; and 

c. conflicts between CMSEF’s management and members of the Board.
Rule 210 Conflicts of Interest

CMSEF Officers and members of the Board, Disciplinary Panels or the Regulatory Oversight 

Committee shall not participate in deliberations or voting in any matter involving a situation where 

they have a conflict of interest. 

A conflict of interest shall include situations where such individual apart from his interest in 

CMSEF or an affiliate: 

(i) Is a named party in interest;

(ii) Is an employer, Employee, or fellow Employee of a named party in interest;

(iii) Is associated with a named party in interest through a “broker association” as defined 

in CFTC Regulation 156.1;

(iv) Has any other significant, ongoing business relationship with a named party in 

interest, not including relationships limited to executing futures or option transactions 

opposite of each other or to clearing futures or option transactions through the same 

clearing member; or

(v) Has a family relationship with a named party in interest.

It shall also include situations where the individual has a direct financial interest in the result of 

the deliberations or vote or has any other personal interests, which may be affected by the 

outcome of the vote or deliberations. 

Prior to the commencement of deliberations, each member of the deliberating body shall disclose 

to the CCO whether such member has or believes that he may have a conflict of interest. All 

conflicts of interest must be documented by the CCO.

The CCO shall then determine whether any member of the relevant deliberating body has a 

conflict of interest. 

Regardless of the determination of the CCO, no Officer or member of the Board, Disciplinary 

Panel or the Regulatory Oversight Committee shall take part in deliberations and voting on any 

significant action if such Person has a direct or indirect substantial financial interest in the result 

of the deliberation or vote.

Individuals who are required to abstain from deliberations and voting pursuant to the above may 

participate in discussions and provide information if the other members unanimously determine 

that such individual’s information is relevant but such individual but may not vote nor be present 

for voting. In determining whether the individual shall be included in discussions, the members 

shall consider the following: 

(i) whether the individual’s participation is consistent with the public interest; and

(ii) whether the member has a unique or special expertise, knowledge or experience in 

the matter under consideration.

Prior to any determination pursuant to the above, the deliberating body must fully consider the 

position information which is the basis for the member's direct and substantial financial interest in 

the result of a vote on a significant action pursuant to the above. No Person who is a named 

party or has a relationship with a named party may participate in any deliberations, regardless of 

any other factors. 

The Board shall document that the conflicts determination procedures required by this section 

have been followed. Such records shall include:

(i) The names of all members who attended the meeting in person or who otherwise 

were present by electronic means;

(ii) The name of any member who voluntarily recused himself or herself or was required 

to abstain from deliberations and/or voting on a matter and the reason for the recusal 
or abstention, if stated; and

(iii) Information on the position information that was reviewed for each member. 

In determining whether a conflict of interest exists regarding a significant action, the determining 

body must include a review of the following:

(i) Gross positions held at CMSEF in the member's personal accounts or “controlled 

accounts,” as defined in CFTC Regulation 1.3(j);

(ii) Gross positions held at CMSEF in proprietary accounts, as defined in CFTC 

Regulation 1.17(b)(3), at the member's affiliated firm;

(iii) Gross positions held at CMSEF in accounts in which the member is a principal, as 

defined in CFTC Regulation 3.1(a);

(iv) Net positions held at CMSEF in “Customer” accounts, as defined in CFTC Regulation 

1.17(b)(2), at the member's affiliated firm; and,

(v) Any other types of positions, whether maintained at CMSEF or elsewhere, held in the 

member's personal accounts or the proprietary accounts of the member's affiliated 

firm that CMSEF reasonably expects could be affected by the significant action.

Taking into consideration the exigency of the significant action, such determinations should be 

based upon:

(i) The most recent large trader reports and clearing records available to CMSEF;

(ii) Information provided by the member with respect to positions pursuant to CFTC 

Regulation 1.69(b)(2)(ii); and

(iii) Any other source of information that is held by and reasonably available to CMSEF.

Each Disciplinary Committee or Hearing Panel shall include sufficient different membership 

interests in order to ensure fairness and to prevent special treatment or preference for any 

Person in the conduct of its respective responsibilities.

At least one member of any Disciplinary Panel or Hearing Panel shall be a Person who is not a 

member of CMSEF whenever a Disciplinary Panel or Hearing Panel is acting with respect to a 

disciplinary action in which 

(i) the subject of the action is a member of CMSEF's Board or a Disciplinary Panel 

or Hearing Panel;

(ii) any of the charged, alleged or adjudicated contract market rule violations 

involve:

a. Manipulation or attempted manipulation of the price of a commodity, a 

futures contract or an option on a futures contract, or

b. Conduct which directly results in financial harm to a non-member of 

CMSEF.

This Rule governing Conflicts of Interest shall apply in an Emergency, as described in Rule 419. 

The Board shall determine by majority vote the Person that shall fill in for the CCO in all cases 

where the CCO is unable to fulfill his responsibilities as CCO due to a conflict of interest. The 

CCO shall not participate in such deliberations. 

Rule 211 Non-Public Information

No Officer, Employee, consultant, or member of the Board, a Committee, or a Disciplinary Panel 

shall use or disclose any non-public information obtained in connection with his or her official 

duties for any purpose other than the performance of his or her official duties.
When necessary or required by the CFTC or other regulators, CMSEF may share non-public 

information with one or more regulators, or SEFs, DCMs, or DCOs registered with the CFTC with 

which the member has a connection.

CMSEF is required to share information with the CFTC upon request, in a form and manner that 

is acceptable to the CFTC. CMSEF is also required to share any necessary information in order 

to perform the functions described in Section 5h of the CEA.

Rule 212 Reporting to the CFTC

The Board shall submit a written report about any of the following to the CFTC: 

(i) Board rejection of a recommendation or action of the Regulatory Oversight 

Committee; or

(ii) the removal of a member of the Board or an Officer due to his becoming ineligible 

under Rule 207.

Rule 213 Reserved

Rule 214 Reserved

Rule 215 Reserved

Rule 216 Information Sharing Agreements

CMSEF shall enter into information sharing agreements or other arrangements necessary to 

permit CMSEF to obtain necessary information, which will enable CMSEF to establish and 

enforce rules, which will enable the motoring of trading and trade processing. CMSEF will 

provide information to the CFTC upon request. CMSEF will also participate in international 

information sharing agreements as may be required by the CFTC from time to time. As part of 

any information sharing agreements, CMSEF may:

(i) share information and documents concerning current and past Participants and/or 

Customers as necessary for SEF to comply with its SRO obligations, to other 

markets;

(ii) assist in market surveillance with other markets as necessary for SEF to comply with 

its SRO obligations, to other markets;

(iii) share information and documents concerning current and past Investigations; and/or

(iv) require current and past Participants and/or Customers to provide information and 

documents, which have been requested by other markets or regulators with which 

CMSEF has an information sharing agreement.

Rule 217 Agreements with Regulatory Services Providers

In the future, as permitted by CEA and CFTC Rules and Regulations, CMSEF may contract with 

a Regulatory Services Provider (RSP) to provide some regulatory services to CMSEF. In the 

event CMSEF contracts with an RSP, the terms and conditions under which an RSP will provide 

Regulatory Services to CMSEF will be governed by a written Regulatory Services Agreement 

(RSA) between CMSEF and the RSP being contracted. CEA and CFTC Rules and Regulations 

permit CMSEF to outsource certain investigative, regulatory, and surveillance functions to an 
RSP. If CMSEF chooses to outsource such services, CMSEF shall retain the ultimate decision 

making authority with respect to any regulatory functions that are contracted to an RSP.

Rule 218 Maintenance of Books and Records

(i) CMSEF and all Participants (and DMA Customers) shall maintain all books and 

records (including all audit trail data and reconstructions) required to be maintained 

pursuant to the CEA and CFTC Regulations 43.3(h) and 45.2(a) and CMSEF and all 

Participants (and DMA Customers) must provide information to the CFTC upon 

request, in a form, time and manner acceptable to the CFTC. Such requests may be 

on a routine or non-routine basis (i.e. if the Participant is under Investigation pursuant 

to Chapter 5 of this Rulebook). 

(ii) Such books and records shall be kept for the life of each Swap transacted pursuant 

to these Rules and five years following the termination of such Swap. Participants 

and their Customers shall make such books and records readily accessible to 

CMSEF for inspection, in each case in the form and manner required under the CEA 

and CFTC Regulations. CMSEF may request records through a written 

communication from the CMSEF Marketing Department to the Person designated by 

the Participant as the Compliance Contact. The Participant’s Business Contact will 

serve as a backup. CMSEF requests for books and records may be made on a 

routine basis and requests may also be made for non-routine data from the 

Participant. 

(iii) CMSEF may disclose information it obtains from Participants and Customers’ books 

and records, to any government agency, self-regulatory organization or other Person, 

information concerning or associated with a Participant or other Person if the CMSEF 

believes such disclosure is necessary and appropriate in exercising a legal or 

regulatory function, whether or not a formal arrangement governing the disclosure 

exists or a request for information was made.

Rule 219 Swap Recordkeeping

As prescribed by CFTC Regulation 45.2(a)(1), CMSEF shall keep full, complete, and systematic 

records, together with all pertinent data and memoranda, of all activities relating to the business 

of such entity or person with respect to swaps, as prescribed by the Commission. Such records 

shall include, without limitation, all records required by Part 37 of the CFTC Regulations.

(i) Record retention. As prescribed by CFTC Regulation 45.2(c), all records required to 

be kept pursuant to this section shall be retained with respect to each swap 

throughout the life of the swap and for a period of at least five years following the 

final termination of the swap.

(ii) Retention form. As prescribed by CFTC Regulation 45.2(d), records required to be 

kept pursuant to this section must be kept as follows: Records required to be kept by 

CMSEF may be kept in electronic form, or kept in paper form if originally created and 

exclusively maintained in paper form, so long as they are retrievable, and information 

in them is reportable, as required by this section.

(iii) Record retrievability. As prescribed by CFTC Regulation 45.2(e), records required to 

be kept by CMSEF pursuant to this section shall be retrievable as follows: Each 

record required by this section or any other section of the CEA to be kept by a 

CMSEF shall be readily accessible via real time electronic access by the registrant 

throughout the life of the swap and for two years following the final termination of the 

swap, and shall be retrievable by the registrant within three business days through 
the remainder of the period following final termination of the swap during which it is 

required to be kept.

(iv) Record inspection. As prescribed by CFTC Regulation 45.2(h), all records required to 

be kept pursuant to this section shall be open to inspection upon request by any 

representative of the Commission, the United States Department of Justice, or the 

Securities and Exchange Commission, or by any representative of a prudential 

regulator as authorized by the Commission. Copies of all such records shall be 

provided, at the expense of the entity or person required to keep the record, to any 

representative of the Commission upon request. Copies of records required to be 

kept by CMSEF shall be provided either by electronic means, in hard copy, or both, 

as requested by the Commission, with the sole exception that copies of records 

originally created and exclusively maintained in paper form may be provided in hard 

copy only. 

Chapter 3 Participants

Rule 301 Jurisdiction

All applicants of CMSEF must agree to the following in writing:

ALL CLEAR MARKETS SWAP EXECUTION FACILITY PARTICIPANTS AND AUTHORIZED 

USERS, WHETHER SUCH PARTICIPANT OR AUTHORIZED USER ACCESSES CMSEF 

DIRECTLY OR THROUGH AN INTERMEDIARY, AND ANY CLEARING MEMBER WHICH 

GUARANTEES SWAPS TRADED ON CMSEF, HEREBY AGREE THAT THESE RULES ARE 

BINDING UPON ANY SUCH PERSON OR ENTITY AND ITS EMPLOYEES AND CUSTOMERS. 

IT IS FURTHER AGREED THAT THESE RULES ARE APPLICABLE AND THAT SUCH 

PERSONS ARE SUBJECT TO THE JURISDICTION OF CMSEF, THE CFTC, AND ANY 

RELEVANT SELF-REGULATORY ORGANIZATION. ALL SUCH PERSONS HEREBY AGREE 

TO COOPERATE FULLY IN THE EVENT CMSEF, THE CFTC, OR A SELF-REGULATORY 

ORGANIZATION CONDUCTS ANY INQUIRY, INVESTIGATION, OR AUDIT OF ANY 

PARTICIPANT OR ACTIVITY CONDUCTED ON THIS SWAP EXECUTION FACILITY.

Rule 302 Trading Privileges

Subject to the requirements, procedures and conditions set forth in this Chapter and any 

limitation, restriction or revocation from time to time imposed by CMSEF, trading privileges and 

electronic access to the Platform shall be offered to Participants. Trading privileges are nontransferable, non-assignable and may not be sold or leased. By virtue of obtaining trading 

privileges, a Participant shall not obtain any equity or other interest in CMSEF, including voting 

rights or rights to receive any dividends or other distributions, whether arising from a dissolution, 

merger, or consolidation involving CMSEF or otherwise. 

Subject to this Rule, CMSEF deny Trading Privileges to any Person: 

(i) if such Person is unable satisfactorily to demonstrate a capacity to adhere to all 

applicable Rules and Applicable Law; 

(ii) if such Person would bring CMSEF into disrepute; or 

(iii) for such other cause as the CMSEF may decide. 

Subject to this Rule, CMSEF may determine not to permit any Person to keep its Trading 

Privileges, or may suspend, remove or limit such Trading Privileges if such Person: 

(i) fails to meet any of the qualification requirements for Trading Privileges after such 

Trading Privileges have been approved; 

(ii) fails to meet any condition placed by CMSEF on such Trading Privileges; 
(iii) violates any agreement with the CMSEF, a Clearing Member or a DCO; or 

(iv) has summary action taken against it by CMSEF under these Rules. 

In the case of any suspension, revocation or limitation of the Trading Privileges of any Participant 

pursuant to this Rule, CMSEF may also suspend, revoke or limit the Trading Privileges of such 

Participant’s Authorized Users as CMSEF deems necessary to protect other Participants and the 

integrity of CMSEF.

In the case of any suspension, revocation or limitation of the Trading Privileges of any Authorized 

User of any Participant pursuant to this Rule, CMSEF, in its sole discretion, may also suspend, 

revoke or limit the Trading Privileges of such Participant or such Participant’s other Authorized 

Users as CMSEF deems necessary to protect other Participants and the integrity of the CMSEF. 

Any decision by CMSEF to deny, suspend, revoke or limit the Trading Privileges of any Person 

will be undertaken by CMSEF in an impartial, transparent, fair and nondiscriminatory manner.

Rule 303A Eligibility Criteria for Participants and Access

Access to CMSEF’s Platform to any ECP shall be provided in a fair, impartial and nondiscriminatory manner. 

To be eligible to be a Participant (including being a party to a Block Trade), an applicant must 

demonstrate to the satisfaction of CMSEF that it:

(i) is an ECP that is eligible to enter into Swaps it wishes to trade on CMSEF;

(ii) completed and submitted the Participant Documentation and any other 

documentation requested by CMSEF;

(iii) is validly organized, in good standing, and authorized to trade Swaps on CMSEF;

(iv) is not in bankruptcy;

(v) is not an affiliate of CMSEF;

(vi) holds all necessary licenses and registrations required by applicable law;

(vii) is in compliance with all registration or authorization requirements of its home 

country, 

(viii) is in compliance with all recordkeeping requirements in these Rules and Applicable 

Law;

(ix) is not disqualified under Section 8a(2) of the CEA;

(x) distributed the Rules to its Authorized Persons, Authorized Users and Customers; 

(xi) is not an ISV or automated trading system;

(xii) is a reputable business;

(xiii) is not an individual;

(xiv) meets any other CMSEF or CFTC criteria; and

(xv) is not disqualified in any other way.

In order to be admitted, the Participant shall represent in writing that it meets all of the eligibility 

criteria set forth in this Rulebook. Once admitted, the Participant shall continue to comply with all 

eligibility criteria and shall notify CMSEF in writing if it ceases to meet any of the applicable 

eligibility criteria. CMSEF shall monitor all Participants to ensure that each Participant continues 

to remain an ECP.

Upon request, all Participants shall provide the names of its Customers and Authorized Users to

CMSEF.
Each Participant must represent in writing to CMSEF that it believes, based on reasonable 

efforts, that all of the Participant’s Customers for whom the Participant effects transactions on 

CMSEF are ECPs. The Participant shall notify CMSEF immediately if it becomes aware that this 

representation is no longer true. 

All Participants must be members of or have entered into an agreement with a DCO or registered 

clearing organization to clear Swaps that are executed on or pursuant to the Rules of CMSEF.

A Participant that is a Clearing Member may enter an Order, only if: 

(i) the Participant has entered into any necessary documentation with its counterparty; 

and

(ii) the Participant otherwise meets the criteria set forth in these Rules.

Participants that are not Clearing Members shall be eligible to enter an Order pursuant to these 

Rules, only if: 

(iii) the Participant (if the Participant is an Account Manager, only if the Account Manager 

on behalf of its client account(s)) can verify on a pre-trade basis that a Clearing 

Member has assumed the financial responsibility to clear such Cleared Swaps for the 

Participant with the applicable DCO;

(iv) the Participant has entered into any necessary documentation with its counterparty; 

and 

(v) the Participant otherwise meets the criteria set forth in these Rules.

A Participant that is registered as a Swap Dealer must undertake and be able to discharge:

(i) any pre-trade disclosure it may owe to such other Participant when engaging in a 

Swap transaction on a disclosed basis; and

(ii) any due diligence and analysis obligations it may owe to its counterparty. 

Rule 303B Eligibility Criteria for Independent Software Vendors

An Independent Software Vendor (ISV) seeking to provide access to CMSEF must be an entity 

that is duly organized and in good standing, have no legal restrictions that would prohibit it from 

operating as an ISV, satisfy CMSEF’s technological integrity requirements, complete the 

necessary ISV access documentation, agree to abide by the Rules and Applicable Law, consent 

to the jurisdiction of CMSEF, pay the fees that may be established by CMSEF from time to time, 

and not adversely affect CMSEF’s ability to comply with Applicable Law. Access to CMSEF’s 

Platform to any ISV shall be provided in a fair, impartial and non-discriminating manner. Persons 

seeking access to CMSEF or a Platform through an ISV must be a Participant or Authorized 

Person specifically authorized by a Participant to have such access.

ISVs affiliated with a SEF or swap broking operation must also agree to grant ISV access to 

CMSEF or a CMSEF affiliate chosen by CMSEF.

Rule 303C Direct Market Access

Only a Sponsoring Broker may sponsor a DMA Customer. 

All trades in Cleared Swaps executed via DMA connection must be guaranteed by a Sponsoring

Broker that assumes financial responsibility for all activity through the DMA connection.
Each DMA Customer must execute the DMA Customer Documentation as a condition of being 

granted access to CMSEF. 

A Sponsoring Broker shall assist CMSEF in any Investigation into potential violations of the 

CMSEF Rules, CFTC Regulations or the CEA, which occur through or with respect to a DMA 

connection guaranteed by such Sponsoring Broker. Such assistance must be timely and may 

include requiring any DMA Customer to produce documents, to answer questions from CMSEF, 

and/or to appear in connection with an Investigation. 

A Sponsoring Broker shall suspend or terminate the Trading Access of a DMA Customer or any 

Authorized Trader associated with such DMA Customer if CMSEF determines that the actions of 

the DMA Customer or any of its Authorized Traders threaten the integrity of CMSEF or liquidity of 

any Swap or violate any CMSEF Rule or if the DMA Customer or any of its Authorized Traders 

fails to cooperate in an Investigation. 

Any trading activity by a DMA Customer using a Participant ID shall be considered to be trading 

activity by the Participant. Such Participant shall be liable for any violations in connection with 

such trading activity as if the Participant had engaged in trading activity. 

Rule 303D Withdrawing from CMSEF

A Person that has access to CMSEF may withdraw from CMSEF at its own discretion by 

providing written notice. After withdrawing from CMSEF, the Person’s obligations to CMSEF 

cease, except the Person remains under the jurisdiction of CMSEF with respect to acts and 

omissions made while such Person had access to CMSEF. The Person remains subject to the 

Participation Agreement, the CMSEF Rulebook and any other agreements with respect to acts or 

omissions that occur while the Person has access to CMSEF.

Rule 304 Authorized Users

All Participants must appoint at least one Employee as an Authorized User. Participants may 

appoint additional Employees, agents or authorized contractors who are individuals to act as 

Authorized Users. Participants must specify whether additional Authorized Users are entitled:

(i) to exercise Trading Privileges on behalf of the Participant; or 

(ii) to access CMSEF on “view only” basis. 

To add Authorized Users, Participants shall notify the CMSEF in the form and manner prescribed 

by CMSEF. All Authorized Users must consent to abide by these Rules and Applicable Law prior 

to accessing the SEF through the Participant. CMSEF may also require each Authorized User to 

satisfy additional requirements as CMSEF may prescribe from time to time. All Authorized Users 

shall be subject to the disciplinary authority of CMSEF and subject to possible fine or restriction or 

revocation of Trading Privileges if they are found to have violated any of these Rules, or the CEA 

and CFTC Regulations, as they apply to swaps trading on CMSEF.

CMSEF may, in its sole discretion, revoke, suspend, or limit the designation of a Person as an 

Authorized User, and shall promptly notify the Participant in accordance with the procedures 

established by CMSEF. 

Participants may at any time revoke an authorization granted to an Authorized User or a User ID 

granted to any other Person by the Participant by providing written notice of such revocation to 

CMSEF.

Participants shall take immediate and appropriate measures to ensure that, after any such 

revocation, the affected Authorized User shall not have access to the SEF and the affected 

Person shall not utilize its User ID.
All Participants agree to be bound by these Rules and these Rules shall also apply to each of a 

Participant’s Authorized Users. Each Participant is responsible for the actions of its Authorized 

Users.

Rule 305 CMSEF Platform Security

Each Participant shall:

(i) be solely responsible for controlling and monitoring the use of all User IDs issued to 

it, or its Authorized Users by CMSEF;

(ii) ensure that each Person accessing the SEF using such User IDs is assigned a 

unique password and that each password is used only by the Person to whom it is 

assigned; and

(iii) notify CMSEF promptly upon becoming aware of any unauthorized disclosure or use 

of User IDs or passwords, or of any other reason for deactivating User IDs or 

passwords. Each Participant shall be bound by any actions taken through the use of 

its User IDs or passwords, including the execution of transactions, whether or not 

such actions were authorized by such Participant or any of its Supervised Persons, or 

whether or not such transactions are executed by an Authorized User of the 

Participant.

Rule 306 Participant Application Process

CMSEF shall require Persons who wish to become a Participant on CMSEF to:

(i) submit a complete and signed CMSEF User Agreement;

(ii) agree in writing to abide by CMSEF Rules and applicable law; 

(iii) appoint a third party agent acceptable to CMSEF as its US representative if the 

Person is located outside the United States as required under CFTC Regulation 

15.05; and

(iv) provide any additional information requested by CMSEF.

CMSEF may conduct an Investigation or verify any information provided by a potential 

Participant.

CMSEF at its sole discretion, may reject a potential Participant’s application or terminate a 

Participants status if:

(i) such Person is unable to satisfy the eligibility criteria set forth in these Rules;

(ii) such Person is unable to demonstrate that they can adhere to all applicable CMSEF 

Rules and applicable law; and

(iii) would reflect badly upon CMSEF or its other Participants.

Rule 307 Authorized Representatives

All Participants shall designate one or more individuals as Authorized Representatives who will 

be the official points of contact for CMSEF. Authorized Representatives shall:

(i) meet the eligibility criteria for Rule 207;

(ii) represent the Participant on CMSEF committees;

(iii) receive CMSEF notices on behalf of the Participant; and

(iv) be empowered to act on behalf of the Participant.

Participants are required to keep CMSEF advised of the most current contact information for their 

Authorized Representatives and to notify CMSEF if an Authorized Representative is no longer 

qualified under Rule 207.
Rule 308 Customers of Participants

Participants are required to know their Customers and are required to act in the best interests of 

their Customers at all times. Participants found to not to be acting in the best interests of their 

Customers shall be subject to suspension or revocation of their access privileges.

Participants shall not enter an Order in the name of a Customer unless that Customer has 

entered into a written agreement with the Participant authorizing the Participant to enter Orders

on terms that may be decided by CMSEF from time to time.

Written agreements between Participants and their Customers must contain at least:

(i) the full legal name and identifying information of the Customer;

(ii) a description of the Customer’s business if acting as agent;

(iii) a representation from the Customer that it is an ECP;

(iv) that the Customer consents to the jurisdiction of CMSEF;

(v) that the Customer will comply with any applicable CMSEF Rules;

(vi) that the Customer will maintain and make available for inspection its books and 

records as required to enforce CMSEF Rules as they apply to CMSEF; and

(vii) consent to monitoring of its trading activities by CMSEF and CMSEF’s Regulatory 

Services provider. 

The Customer must notify the Participant if the Customer ceases to meet the applicable ECP 

criteria.

Rule 309A Minimum Financial Standards 

Each Participant shall: 

(i) maintain an account with a Clearing Member that provides for the clearing of all 

Trades that such Participant executes on CMSEF for its own account; and 

(ii) cause each Customer on whose behalf it acts to maintain an account with a Clearing 

Member that provides for the clearing of all Trades that Participant executes on 

CMSEF on behalf of such Customer. 

Each Participant or Authorized User shall stay within the trading limits established for their own 

account by their Clearing Member. Each Participant or Authorized User shall provide notice to 

CMSEF of such trading limits. Each Participant or Authorized User shall provide CMSEF with 

immediate written notice of any change in such trading limits. 

At least once a year, each Participant or Authorized User shall provide CMSEF with a written 

certification that: 

(i) Participant is and continues to be an ECP; and 

(ii) as applicable, all the Customers on whose behalf the Participant or Authorized User 

has executed or will execute trades are also ECPs.

Rule 309B Minimum Financial Standards Reporting 

Each Participant must maintain all records required by the CEA, CFTC Regulations or these 

Rules, including all records of trading activity in the underlying commodity and related markets as 

it applies to swaps traded on CMSEF. Participants must make this information available at the 

request of CMSEF, the CFTC or the Department of Justice.

Each Participant must notify CMSEF immediately upon becoming aware that it fails to satisfy the 

minimum financial requirements applicable to it, including the requirement to qualify as an ECP. 
Participants shall submit financial and related information to CMSEF or the RSP, as applicable, in 

the form and manner requested. A Participant that is unable to demonstrate to CMSEF that it is 

in compliance with such minimum financial requirements shall not engage in transactions subject 

to these Rules except for the purpose of closing open positions. 

Participants that are registered with any SRO shall comply with all Applicable Law related to 

minimum financial reporting and recordkeeping requirements. Participants shall provide CMSEF 

with copies of any reports they are required to file with the CFTC pursuant to CFTC Regulation 

1.12 as it applies to swaps traded on CMSEF.

Rule 310 Authority to Impose Restrictions

In order to ensure the protection of CMSEF, Customers and other Participants, CMSEF may 

impose restrictions on any Participants subject to early warning requirements under CFTC 

Regulation 1.12.

Rule 311 Mandatory Trading

Participants that are Swap Dealers or Major Swap Participants are responsible for complying with 

the mandatory trading requirement as defined under Section 2(h)(8) of the CEA and shall not 

enter into any Required Transaction outside a SEF that lists a Swap, which is Required to Trade. 

Rule 312 Uncleared Swaps

Absent a Clearing Exception for an Order, as set forth in Rule 407B, CMSEF only permits 

Participants to place orders for, and execute Cleared Swaps. 

Rule 313 Fees

CMSEF shall set Participant’s fees and payment terms for using the CMSEF platform. CMSEF 

shall have the right, at its sole discretion, to terminate or suspend a Participant’s access or 

privileges in the event a Participant fails to satisfy such payment obligation within thirty (30) days 

after its due date.

In the event that CMSEF suspends a Participant’s access to CMSEF, a Participant shall continue 

to be bound by any and all other applicable Rules.

Rule 314 Communications between CMSEF and Participants

Each Participant must provide CMSEF with current contact information for each of its Authorized 

Persons and Authorized Users. Such information must include the Authorized Persons or 

Authorized User’s full name, electronic mail address, and a telephone number for use during 

business hours.

CMSEF may, at its sole discretion, record communications between CMSEF and Participants, 

provided that such recording complies with all applicable regulations. This recording may include, 

but is not limited to, recorded telephone conversations, emails, copies of faxes or other 

documents exchanged between CMSEF and Participants. CMSEF’s RSP’s, as applicable, shall 

have access to such electronic records in the event it is required pursuant to a Regulatory 

Services Agreement. 

Rule 315 Notices

CMSEF shall publish on its website and electronically notify each Participant of each addition to, 

modification of, or clarification of, these Rules or of any action to implement any Rules. 
Participants shall be notified prior to CMSEF notifying the CFTC or the effective date. In the 

event of an Emergency, CMSEF shall have the right to take actions without notifying its 

Participants in advance of such action.

Rule 316 Reserved 

Rule 317 Continuing Applicability of Jurisdiction and Rules

In the event CMSEF suspends or terminates a Participant or Authorized User’s access or 

privileges, such Participant or Authorized User shall continue to be subject to and bound by these 

Rules, Applicable Law, and the jurisdiction of CMSEF for all acts arising from before the 

Participant or Authorized User’s access or privileges were terminated. Participants and 

Authorized Users who have had access or privileges suspended shall cooperate with any 

Investigations or Disciplinary Proceedings related to the termination of their access.

Rule 318 Participant Trading Records

Required Records. Each Participant and Customer shall (i) prepare and keep current full, 

complete and systematic records and information which include all pertinent data and 

memoranda relating to the complete audit trail all of the Trades it executes and attempts to 

execute on CMSEF as are required to be kept by it pursuant to applicable law and regulation 

including, without limitation, all records required by CFTC Regulation 37.404, and (ii) shall keep 

current such other records and information and adopt such forms as CMSEF may from time to 

time require (“Trading Records”). 

Participants and Customers are required to make available to CMSEF or CMSEF’s RSP (if any) 

any and all position and trading information relating to orders placed and trades executed on 

CMSEF. 

Participants and Customers are also required to keep and provide records of their trading activity 

in the index or instrument used as a reference price, the underlying commodity and related 

derivatives markets for any swaps they trade on CMSEF as it applies to those swaps traded on 

CMSEF. CMSEF may limit the application this requirement to Participants who conduct 

substantial trading on CMSEF. 

Rule 319 Participant Maintenance of Records

(i) Participants, and as applicable, Authorized Users and Customers that have trading 

privileges on CMSEF, shall maintain all books and records that are required to be 

maintained pursuant to the CEA and CFTC Regulations (including, but not limited to, 

CFTC Regulations 1.31 and 1.35). This includes all records related to the trading of 

Swaps.

(ii) Such books and records shall be kept for the life of each Swap transacted pursuant 

to these Rules and five years following the termination of such Swap. Participants 

shall make copies of such books and records readily accessible to CMSEF for 

inspection, in each case in the form and manner required under the CEA and CFTC 

Regulations. During the first two years copies of such Trading Records shall be 

readily accessible. 

(iii) CMSEF may disclose information it obtains from Participants books and records, to 

any government agency (foreign or domestic), self-regulatory organization or other 

Person as required by law, information concerning or associated with a Participant or 

other Person if the CMSEF believes such disclosure is necessary and appropriate in 
exercising a legal or regulatory function, whether or not a formal arrangement 

governing the disclosure exists or a request for information was made.

(iv) Participants shall make Trading Records available to the CFTC upon request and/or 

permit on-site inspection by duly authorized CFTC personnel.

Rule 320 Legal Certainty for CMSEF Trades 

A transaction entered into on or pursuant to the CMSEF Rules shall not be void, voidable, subject to 

rescission, otherwise invalidated, or rendered unenforceable as a result of: 

(i) a violation by CMSEF of the provisions of Section 5h of the Act or CFTC Regulations;

(ii) any CFTC proceeding to alter or supplement a Rule, term, or condition under Section 

8a(7) of the Act or to declare an emergency under Section 8a(9) of the Act; or 

(iii) any other proceeding the effect of which is to: 

a. alter or supplement a specific term or condition or trading rule or procedure; or

b. require CMSEF to adopt a specific term or condition, trading rule or procedure, 

or to take or refrain from taking a specific action.

Chapter 4 Trading Standards and Practices

Rule 401 Swaps Traded on CMSEF

CMSEF shall determine which Swaps can be traded pursuant to these Rules and shall submit 

such Swaps to the CFTC as required by the CEA and CFTC Regulations. At this time CMSEF 

only permits the trading of Cleared Swaps, unless a Participant meets the requirements of Rule 

407. Only Swaps permitted by these Rules may be traded on CMSEF, regardless of the method 

of execution. 

CMSEF shall determine the rules and procedures for trading Swaps on CMSEF. This includes 

Rules and procedures to:

(i) determine which Swaps can be traded on CMSEF;

(ii) determine the criteria for listing a Swap for trade;

(iii) disseminate bids and offers and other trading information;

(iv) recording and accounting for Swaps traded on CMSEF;

(v) monitoring the trading activities of Participants and their Customers on CMSEF;

(vi) establishing limits on the size and number of Orders that a Participant may enter into 

CMSEF;

(vii) establish limits on the maximum daily price movements;

(viii) establish a minimum price quoting increment for each Swap; 

(ix) regulate any administrative matters affecting actives on CMSEF; and

(x) All orders shall contain the following information:

a. the name of the Participant

b. the name of Authorized User (Trader)

c. the Contract Name (description)

d. the Price

e. the Quantity

f. the Clearinghouse to which it will be sent for clearing

g. the Customer name, if applicable

h. the Account number
CMSEF may amend, at its sole discretion any of these Rules or procedures at any time. 

Rule 402 Prohibited Trading Activities

No Participant or any of its Authorized Users or Account Managers shall use the CMSEF Platform 

to knowingly engage in any of the following abusive trading practices:

(i) wash or enter or execute non-competitive Swaps transactions;

(ii) accommodation trading, improper cross trading, front running, trading ahead of 

Customers, trading against Customers;

(iii) pre-arranged trading (except for Block Trades permitted by Rule 416 or trades 

following communication permitted by Rule 417); 

(iv) fraudulent trading or money passes;

(v) disclose information about Customer orders; or 

(vi) take any action, which will disrupt the trading on CMSEF or another SEF.

Rule 403 Fraudulent Acts and Misstatements

No Participant or any of its Authorized Representatives, Authorized Users or Account Managers 

shall knowingly:

(i) use CMSEF to engage in any fraudulent acts or schemes to defraud or mislead other 

Participants or CMSEF;

(ii) withhold Customer orders;

(iii) engage in fraudulent trading of any form; or

(iv) engage in an attempt to manipulate the market in any form.

Misstatements by Participants and their Authorized Representatives, Authorized Users or 

Account Managers shall be grounds for termination of CMSEF access and privileges.

Rule 404 Misuse of the CMSEF Trading Platform

CMSEF strictly prohibits misuse of the CMSEF trading platform. No Participant or any of its 

Authorized Users or Account Managers shall knowingly engage in unauthorized use or misuse 

the CMSEF platform or to assist any Person or individual from gaining access for the purposes of 

misuse or take any actions, which will be detrimental to CMSEF.

Misuse by Participants and their Authorized Representatives and Authorized Users shall be 

grounds for termination of CMSEF access and privileges.

Rule 405 Trading Hours

CMSEF shall in its sole discretion determine:

(i) the Business Days on which CMSEF will be open for trading;

(ii) the Trading Hours on such Business Days during which CMSEF will be open for 

trading; and

(iii) the Time Zone in which CMSEF Rules shall apply.

Unless otherwise specified in these Rules:

(i) all references to time shall be based upon local time in New York, New York;

(ii) opening times start on the first second of the minute cited; and

(iii) closing times end on the last second of the minute cited. 

CMSEF reserves the right to modify all of the above without advance notice in the event of an 

Emergency.
Rule 406 Execution of Swaps on CMSEF

The following are the acceptable methods CMSEF provides Participants in order to execute 

Swaps on CMSEF:

(i) Anonymous Central Limit Order Book (Minimum Functionality):

a. Acceptable Orders. The following kinds of orders may be entered into the 

Central Limit Order Book (CLOB) of the CMSEF Platform.

I. Limit Orders. A “Limit Order” is an order to buy or sell a contract at a 

specified price or better.

II. Market Orders. A “Market Order” is an order to purchase or sell a 

contract at the best price on the CMSEF Platform at the time the order is 

entered on the CMSEF Platform (only available via fix API connection).

III. Fill or Kill. A “Fill or Kill” Order must be filled entirely or the Order is 

cancelled. 

IV. Immediate or Cancel. An “Immediate or Cancel” Order must be filled 

instantly or the Order is cancelled. 

Good until Time. An Order may be entered such that the Order is cancelled at a 

specific time if it is not executed (note that this feature is not available if 

accessing the system through the CMSEF website).

b. Entry of Orders. An anonymous order may be submitted directly by the 

Participant for its own account or on behalf of a Customer on whose behalf such 

a Participant is authorized to act. Each order on the CLOB must contain the 

following information:

I. Bid/Offer Indication

II. Price

III. Notional Amount 

IV. Instrument 

c. Time Delay Requirement. All Participants that are a broker or dealer and who, in 

connection with the execution of a Required Transaction, seek to either execute 

against a Customer’s order or execute two Customers against each other 

through the CMSEF’s CLOB shall use the following procedure:

I. If a Participant seeks to execute an order against a Customer order, then 

such Participant must enter the Customer order into the CMSEF CLOB 

and then wait at least 15 seconds before entering the Participant’s order; 

or

II. If a Participant seeks to execute two Customer orders against each 

other, then such Participant shall enter one side of the trade into the 

CMSEF CLOB and wait at least 15 seconds before entering the second 

side of the trade for execution.

d. Time Delay Exception. The time delay requirement does not apply to DMA 

Orders where a broker or dealer does not engage in some form of prearrangement or pre-negotiation of such order. 

e. Price-Time Priority. All prices received in the CLOB are sorted based on strict 

price-time priority protocol.

f. Trading Limits. Participants shall only enter orders for such Contracts and for 

such amounts as is permitted within the scope of their trading limits.

g. Matching of Orders. Orders submitted will be matched as follows:

I. Market Orders. Matching orders will be matched against all pending bids 

and offers in accordance with a price-time priority protocol. If any portion 

of the market order is not filled, the unfilled remainder will be canceled.

II. Limit Orders. Limit orders will be matched with bids and offers that have 

a price that is at or better than the price of the limit order, in accordance 

with the price-time protocol. If any portion of the limit order is not filled, 

the unfilled portion of the order will remain in the market at the price and 

time that the order was entered. 

h. Unfilled Orders.
I. After the close of trading each Trading Day, all unfilled bids and offers 

will be cancelled

II. Upon a Participant’s logging out from the CMSEF Platform during the 

Trading Day, all unfilled bids and offers entered by such Participant will 

be cancelled.

i. Matching Algorithm. The CMSEF matching engine operates as a market 

order/limit order system. Orders are handled as follows:

I. Market orders are executed at the top of the market and can be matched 

with multiple standing orders at different prices if necessary to fill the 

market order volume;

II. Limit orders will execute at the requested price or better; and

III. Any unmatched limit order (or portion of an order) becomes a standing 

order in the system.

(ii) Request for Quote (RFQ)

a. Orders Entry of. Participants may submit RFQ inquiries on a name disclosed 

basis. Unless the Participant is submitting an RFQ pursuant to Rule 416, 

submission of RFQ inquiries must be sent to minimum of three counterparties 

none of which shall be: 

I. affiliated of or controlled by the counterparty requesting the RFQ inquiry; 

or 

II. affiliates of or controlled by each other.

b. Bids and Offers. At the same time that the requester receives the first 

responsive bid or offer, CMSEF shall communicate to the requester any firm bid 

or offer pertaining to the same instrument resting on the CLOB.

c. Responses. CMSEF shall provide the requester with the ability to execute 

against any firm CLOB bids or offers along with any responsive orders to the 

RFQ. 

d. Execution of Orders. The Requestor may accept any response to the RFQ upon 

receipt. After the Requestor accepts an RFQ, the responding party is given a 

“last look” in order to execute the Order. 

e. Trading Protocols. CMSEF will ensure that its trading protocols provide each 

Participant with equal priority in receiving RFQs and in transmitting and 

displaying for execution responses to RFQs. 

f. Submitting a Request. Each RFQ shall include the following information 

regarding the Swap that the Participant is requesting quotes:

I. Product

II. Pay/Receive Indication

III. DCO

IV. Currency

V. Tenor

VI. Frequency

VII. Day Count

VIII. Instrument(s)

IX. Effective Date

X. End Date

XI. Business Day Conversion

XII. Calendar

XIII. Roll Conversion

XIV. Notional Amount

XV. Day Count Fraction

XVI. Clearing FCM 

g. Response to RFQ. Each response to an RFQ must contain a price.

h. Last Look. After the RFQ requestor receives a quote, the requester will be able 

to execute. If the requester executes the quote, the Participant that submitted 

the quote will have a “last look” where such Participant will confirm the quote. 
The last look will expire in 30 seconds and until the Participant confirms the 

quote the requestor may cancel the quote. 

i. Customer. The Customer requesting a quote on the RFQ system must be 

identified by the Participant entering the request, regardless if the Customer is 

the Participant or an Authorized User. 

(iii) Priorities of Orders: For any bid or offer on the CLOB, and for any RFQ or response 

to an RFQ, each Participant shall be given equal priority in terms of when such 

actions shall be displayed to the relevant Participants on CMSEF. Each order 

submitted on the SEF shall include the following:

a. The Legal Entity Identifier of the Participant or Client placing the order;

b. A yes/no indication of whether the Participant or Client is a swap dealer with 

respect to the product with respect to which the order is placed.

c. A yes/no indication of whether the Participant or Client is a major swap 

participant with respect to the product with respect to which the order is placed.

d. A yes/no indication of whether the Participant or Client is a Financial Entity.

e. A yes/no indication of whether the Participant or Client is a U.S. Person.

f. If applicable, an indication that the Participant or Client will elect the clearing 

requirement exception in CEA section (2)(h)(7) for any swap resulting from the 

order.

Rule 407A Required Transactions

Required Transactions that do not qualify as a Block Trade or a Clearing Exception shall be 

executed on CMSEF according to Rule 406.

Rule 407B Clearing Exception for Swaps 

Each Participant wishing to execute an Order under a Clearing Exception on CMSEF must submit 

all documentation required by Part 50 of the CFTC Regulations (the Clearing Exception Form) 

prior to placing an Order subject to the Clearing Exception. A Participant shall submit all required 

documentation supporting its eligibility (or the eligibility of its relevant Authorized User, as 

applicable) for the Clearing Exception. Any Order subject to the Clearing Exception shall be 

rejected if an applicable Clearing Exception Form is not on file with CMSEF. 

The Clearing Exception may only be used for Orders that are not executed on the CLOB. 

Rule 408 Cancellation of Orders by Participants

Participants may cancel any Order, which has been entered on CMSEF unless it has been 

executed or expired. 

Rule 409 Modification or Cancellation of Orders and Trades by CMSEF

Before an Order is sent to a Clearinghouse, CMSEF may cancel any Order that, if allowed to 

remain, would have meaningful adverse effects on the integrity of the market, if the Order is 

entered in a price outside a range known as the Acceptable Price Range, or a CMSEF system 

malfunction. The Acceptable Price Range shall be determined by CMSEF based on the market 

data available to CMSEF. It may change from time to time and shall be published on the CMSEF 

website. 

Once a trade has been cleared by a Clearinghouse, CMSEF may adjust trade prices or cancel if 

there is a CMSEF system malfunction or with the consent of both Counterparties. Such 

modification or cancellation shall be effected by a pre-arrange trade or trades, consistent with 
CFTC No-Action Letter No. 15-2524 (published by the CFTC on April 22, 2015; relief expires 

June 15, 2016). 

At any time, CMSEF may halt or suspend trading on its platform in order to maintain a fair and 

orderly market, as required by these Rules. Any halt or suspension in trading shall be 

communicated to Participants as soon as practicable. 

If CMSEF takes action pursuant to this Rule, it will give prompt notice to affected Participant or 

Participants. 

Rule 410A Pre-Execution Credit Checks

CMSEF will verify prior to the execution of any Order that the Participants or Authorized User 

have sufficient credit limits with their Clearing Members so that the trade will be able to be 

accepted by the Clearing House for Clearing. CMSEF will not permit Participants or Authorized 

User to execute transactions if their credit limits are insufficient. 

All Orders will be prescreened on an order-by-order basis. A Clearing Member may reject an 

Order pre-execution or post-execution. If an Order is rejected by the Clearing Member postexecution, such Order shall be void ab initio.

It is the responsibility of the Participants or Authorized User to evaluate the credit quality of their 

Prime Broker, FCM, and or Clearinghouse, and their counterparty on uncleared swaps.

Rule 410B Confirmation of Agreements Between Counterparties

The terms of the Swap, which shall serve as a confirmation of the transaction, will be sent at the 

time of execution of the Swap. Specifically, upon the execution of a Swap, CMSEF will provide 

each counterparty to a transaction that is entered into on or pursuant to the rules of the SEF with 

a written record of all of the terms of the Swap, which shall legally supersede any previous 

agreement and serve as a confirmation of the transaction; provided, that specific Customer 

identifiers for accounts included in bunched orders involving Swaps will not be included in 

confirmations provided by CMSEF if the applicable requirements of CFTC Regulation 1.35(b)(5) 

are met.

Rule 411 Cleared Swaps

The following does not apply with respect to swaps subject to the clearing requirement exception 

in CEA section (2)(h)(7) for which a counterparty has elected such exception. 

Each Cleared Swap shall be cleared through the Clearing House indicated in the Swap 

Specification in accordance with the CEA and the CFTC Regulations.

For each Cleared Swap a Participant expects to enter into via the SEF Platform or subject to 

CMSEF Rules, the Participant or a Client or Customer of the Participant must establish a clearing 

account with the Clearing House or with a Clearing Member of the Clearing House, in each case, 

designated in the Swap Specification for such Cleared Swap.

Submission of executed trades to the applicable DCO shall be the responsibility of CMSEF. 

Rule 412 Position Limits or Accountability
To reduce the potential threat of market manipulation or congestion, SEF shall adopt for each of 

the contracts of the facility, as is deemed necessary and appropriate by SEF, position limitations 

or position accountability levels for speculators.

Rule 413A Position Limits

In accordance with CFTC Regulations, CMSEF may from time to time adopt position limits and 

grant exceptions from position limits as may be necessary.

CMSEF shall not set position limits in excess of CFTC limits.

In the event CMSEF adopts position limits, Participants may request and exemption from such 

limits by filing an application with CMSEF’s Market Monitor Team. Participants may not exceed 

such limits until they have received Written approval from CMSEF. Applications to exceed 

position limits must be filed in a form acceptable to CMSEF and must at a minimum include:

(i) the name and contact information of the Participant; 

(ii) a description of the exemption being requested;

(iii) whether the exemption is for 

a. bona fide hedging as defined in CFTC Regulation §1.3(z)(1),

b. risk management, or 

c. arbitrage/spread positions; and

(iv) a description of the complete underlying exposure related to the exemption request.

In the event that CMSEF agrees to provide the requested exemption, the Participant must agree 

to:

(i) provide CFSEF with any information or documentation requested by CMSEF; 

(ii) to comply with any and all terms, conditions or limitations imposed by CMSEF;

(iii) permit CMSEF modify or revoke the exemption at any time; 

(iv) agree to initiate and liquidate positions in an orderly manner; and 

(v) agree to immediately notify CMSEF of any material change to the information 

provided to CMSEF.

CMSEF reserves the right to take any actions necessary in response to any Emergency situation 

that may arise including forcing any Participant to reduce any outstanding positions.

Rule 413B Position Accountability 

All Participants shall be bound by CMSEF’s position accountability levels for Required 

Transactions. CMSEF will set these levels in accordance with appropriate CFTC Regulations. 

In the event a Participant holds or controls aggregate positions in a Swap in excess of CMSEF 

position accountability levels, the Participant shall be subject to the following: 

(i) The Participant shall promptly provide any information requested by CMSEF 

concerning size and type of the position and any efforts to hedge the position.

(ii) The Participant shall, if directed by CMSEF, liquidate in an orderly manner, or not 

increase further the positions, which exceed CMSEF’s position accountability levels. 

(iii) The Participant shall, upon request by CMSEF, identify the beneficial owner and or 

any controlling parties for such positions.

CMSEF reserves the right to take any actions necessary in response to any Emergency situation 

that may arise, including forcing any Participant to reduce any outstanding positions.

Rule 414 Real-Time Market Monitoring and Surveillance
Real-time monitoring of trading on CMSEF for compliance purposes shall be conducted by 

CMSEF’s Compliance Department. CMSEF will monitor and surveil participants and market data 

on an ongoing and real time basis to ensure compliance with all applicable laws, rules, 

regulations and the CMSEF rulebook. If CMSEF believes a violation may be occurring or about 

to occur CMSEF may take actions including, but not limited to, halting a Participant's ability to 

execute trades on CMSEF.

(i) CMSEF shall monitor and evaluate data on:

a. an ongoing basis in order to detect and prevent manipulation, price distortion, 

and where necessary disruptions in the cash-settlement process, and

b. general market data in order to detect and prevent manipulative activity that 

would result in the failure of the market price to reflect the normal forces of 

supply and demand, unusual trading volumes, and impairments to market 

liquidity.

(ii) In addition, CMSEF may protect market integrity through use of the following safeguards 

to prevent the entry of orders in any of the following circumstances:

a. pre-trade quantity limits on individual orders to screen for order quantities not 

within acceptable parameters; 

b. pre-trade price collars to screen for orders outside of current market conditions; 

and

c. pre-trade check to screen for risk based limits set by the clearing member.

Such pre trade quantity and risk limits shall be posted on CMSEF’s web site.

Rule 415 Mishandled Customer Orders

CMSEF shall not be held liable for any Customer Orders, which are mishandled by Participants. 

Participants will be solely responsible for all remedial actions in the event a Participant 

mishandles a Customer Order.

Rule 416 Block Trades 

CMSEF’s appropriate minimum block trade sizesizes shall be consistent with appropriate

minimum block trade sizes set by the CFTC. CMSEF shall not permit Participants to execute 

Swaps as Block Trades below the appropriate minimum block size set by the CFTC. 

The following Block Trade Rules shall apply to Block Trades executed on CMSEF:

(i) Block Trades shall be trades that are at or in excess of the applicableappropriate

minimum block size set by the CFTC and may be executed on CMSEF by RFQ by 

requesting a price from fewer than three RFQ Receivers.

(ii) Block Trades must trade at prices that are fair and reasonable in the context of:

(i) market conditions;

(ii) other transactions in the market at the time; and

(iii) the nature of the Participants to the Block Trade.

(iii) Block Trades shall not affect resting orders.

(iv) Participants shall not aggregate Orders for different accounts to create Block Trades 

unless permitted by Applicable LawCFTC Regulation 43.6(h)(6).
(v) Block Trades executed off CMSEF must be reported by the Participants to CMSEF as 

soon as practicable but no later than five (5) minutes before the time such Block Trade 

would be reported by an SDR. The actual notional or principal amount of the Block Trade 

shall be reported to CMSEF, which shall report the Block Trade as set forth in CFTC 

Regulation 43.6 and Appendices B, D, E, and F to Part 43 of the CFTC Regulations. 

CMSEF reserves the right to investigate all Block Trades to ensure that they comply with all 

applicable CMSEF Rules and CFTC Regulations.

A Participant transacting a Block Trade on behalf of a Customer must receive prior written 

instruction or consent from the Customer in order to do so. Such instruction or consent may be 

provided in the power of attorney or similar document by which the customer provides the person 

with discretionary trading authority or authority to direct the trading in its account.

The parties to a publicly reportable swap transaction on CMSEF that has a notional amount at or 

above the appropriate minimum block size shall notify CMSEF of its election to have the publicly 

reportable swap transaction treated as a Block Trade. CMSEF, pursuant to these Rules, shall 

notify the SDR of such a Block Trade election when transmitting swap transaction and pricing 

data to such SDR in accordance with CFTC Regulation 43.3(b)(1).

Rule 417A Pre-Trade Communications

A Participant or Authorized User, acting on behalf of a Customer, must have the Customer’s 

consent before engaging in pre-arrangement communication with a counterparty. The Participant 

or Authorized User may not disclose such communications to any third party and may not use 

such communications to enter into alternative transactions other than the transaction permitted by 

this Rule. In any case in which a transaction is agreed upon as the result of pre-arrangement 

communication, the Participant or Participants must allow a 15-second delay between orders 

entered on the SEF. There is no mechanism on the CMSEF system that prevents a trade from 

being submitted before such 15-second delay has occurred and therefore any applicable Order 

that is executed without the delay shall be a violation of these Rules and CFTC Regulations. 

Rule 417B Information Obtained in Pre-Trade Communications

All Participants or Authorized Users party to the pre-arrangement communication permitted by 

Rule 417A are prohibited from disclosing such communications to any third party and may not 

use such communications to enter into alternative transactions other than the transaction 

permitted by this rule.

Rule 418A Dissemination of Prices and Trading Information

CMSEF shall publish information daily on its website regarding prices, volume, and other data as 

required by the CFTC Regulations. 

CMSEF will also make available a central pricing screen on CMSEF with a real-time view of 

resting bids and offers.

CMSEF may make available to Participants an indicative, non-attributed pricing page on CMSEF 

for certain types of Swaps of the most commonly traded tenors within such type of Swap.

CMSEF shall choose, at its sole discretion, a SDR. As required by CFTC Regulation 37.901(a), 

CMSEF shall transmit Required swap Creationtransaction and pricing data for each Swap 

executed pursuant to these Rules to the appropriate SDR in the form and manner required. 
CMSEF may provide such Required swap Creationtransaction and pricing data to Participants 

and Authorized Users no earlier than the time it transmits such information to an SDR and in a 

form that does not disclose the identities, or otherwise facilitate identification, of the parties to the 

Swap.

Rule 418B Publicly Reportable Swap Transactions 

Pursuant to Part 43 and Appendix A to Part 43 of the CFTC Regulations and Part 45 and 

Appendix 1 to Part 45 of the CFTC Regulations, CMSEF shall transmit swap transaction and 

pricing data and minimum primary economic terms to a registered SDR as soon as 

technologically practicable after the publicly reportable swap transaction has been executed on or 

pursuant to the rules of CMSEF.

CMSEF and Participants shall not submit or agree to submit a cancellation or correction for the 

purpose of re-reporting Swap transaction and pricing data in order to gain or extend a delay in 

public dissemination of accurate Swap transaction or pricing data or to otherwise evade the 

reporting requirements in Part 43 of the CFTC Regulations. 

Rule 418C Reporting Counterparties 

For all swaps executed on CMSEF, each swap counterparty shall provide sufficient information to 

CMSEF to enable CMSEF to report all swap creation data to enable CMSEF to report all 

Required Swap Creation Data. To achieve this, each Participant placing an order with respect to 

any Swap traded on CMSEF must include in the order the information required by CMSEF Rule 

406(iii). 

All Reporting Counterparties are required to notify CMSEF in the event the Reporting 

Counterparty becomes aware that an error or omission in reporting has occurred. 

Rule 419 Emergency Rules

In the event of an Emergency, CMSEF may implement temporary Emergency procedures and 

Emergency Rules, subject to the applicable provisions of the CEA and CFTC Regulations. 

Implementation of Emergency Rules shall be done in consultation with the CFTC. Emergency 

Rules may require or authorize CMSEF, the Board, any committee of the Board, the President, or 

any other Officer to take actions necessary or appropriate to respond to the Emergency, including 

the following actions: 

(i) suspending or curtailing trading or limiting trading to liquidation only (in whole or in 

part)

(ii) extending or shortening the last trading date for Swaps; 

(iii) ordering the fixing of a settlement price; 

(iv) ordering the liquidation or transfer of an open position in any Swap, or the 

(v) reduction of positions; 

(vi) extending, limiting or changing the Trading Hours; 

(vii) imposing or modifying intraday market restrictions; 

(viii) transferring Customer contracts and the margin in an Emergency; 

(ix) imposing special margin requirements; 

(x) extending or shortening the expiration date of a Swap; 

(xi) altering any Swap’s settlement terms and conditions; 

(xii) imposing or modifying price limits; and/or

(xiii) imposing, modifying or reducing position limits. 
Before any Emergency Rule may be adopted and enforced, a required vote of the Board must 

approve the implementation of such Emergency Rule at a duly convened meeting requested by 

the President or any other Officer. Directors may attend such a meeting by teleconference. Each 

Director participating in such meeting shall be subject to CMSEF’s Conflict of Interest Rules. If 

the CEO or CMSEF determines that Emergency Rules must be implemented with respect to an 

Emergency before a meeting of the Board can reasonably be convened, then the CEO shall have 

the authority, without Board action, to implement any Emergency Rules with respect to such 

Emergency that he or she deems necessary or appropriate to respond to such Emergency. 

Whenever CMSEF, the Board, any committee of the Board, or the President takes actions 

necessary or appropriate to respond to an Emergency (including the actions set forth above), an 

Authorized Representative of CMSEF will post a Notice to Participants regarding such 

Emergency, as soon as practicable. When the Board, any committee of the Board or the CEO 

determines that the Emergency is no longer in effect, permitting the SEF operated by CMSEF to 

resume normal functioning; any such actions responding to an Emergency will be terminated. 

CMSEF will use reasonable efforts to notify the CFTC prior to implementing, modifying or 

terminating an Emergency Rule. If such prior notification is not possible or practicable, CMSEF 

will notify the CFTC as soon as possible or reasonably practicable, but in all circumstances within 

twenty-four (24) hours of the implementation, modification or termination of such Emergency 

Rule. 

Upon taking any action in response to an Emergency, CMSEF will document the decision-making 

process related to such action. Such documentation will be kept for at least five years following 

the date on which the Emergency ceases to exist or to affect the SEF operated by CMSEF, and 

all such documentation will be provided to the CFTC upon request. 

Chapter 5 Disciplinary Rules

Rule 501 General 

All Participants, Authorized Persons, Authorized Users, Clearing Members, and Participant’s 

Customers shall be subject to the CMSEF’s jurisdiction. Participants, Authorized Persons, 

Authorized Users, Clearing Members, and Participant’s Customers are subject to this Chapter 5 if 

they, or with respect to a Participant, any other Person using any of its User IDs, are alleged to 

have violated, or to have aided and abetted a violation of, or are about to violate, any Rule or any 

provision of Applicable Law for which CMSEF possesses disciplinary jurisdiction. 

CMSEF, through its Compliance Department and the Disciplinary Panel, will conduct 

Investigations, Disciplinary Proceedings and appeals from Disciplinary Proceedings, summary 

impositions of fines, summary suspensions or other summary actions in accordance with this 

Chapter. 

No CMSEF member of the Board, Officer, Employee, or Agent will interfere or attempt to interfere 

with any Investigation, disciplinary hearing, or summary imposition of a judgment or other 

summary action.

CMSEF shall permit Participants, Authorized Persons, Authorized Users, Clearing Members, or 

Participant’s Customers to be represented by counsel during any Investigation, disciplinary 

hearing, or imposition of a fine or summary judgment.
CMSEF may hold a Participant or Authorized User liable for, and impose sanctions against such 

Participant or Authorized User for such Person’s own acts and omissions, or those of its agents, 

representatives or any Person or API using a User ID of such Participant or Authorized User. 

CMSEF may additionally hold a Participant liable for the acts and omissions of its Authorized 

Users. 

CMSEF may delegate any or all of its powers or responsibilities under this Chapter 5 to the RSP, 

which may take any action on behalf CMSEF that the CMSEF is permitted to take hereunder; 

provided, however, that the CMSEF shall retain supervisory authority with respect to such powers 

and responsibilities and will document instances where its actions differ in any material respect 

from those recommended by the RSP. 

Rule 502 CMSEF’s Right to Inspect Books, Records and Systems

CMSEF’s Compliance Department and CMSEF’s RSP (if any) will have the right to inspect the 

books, records, systems, equipment, and software of Participants, Authorized Persons, 

Authorized Users, Clearing Members and Participant’s Customers.

CMSEF’s Compliance Department and CMSEF’s RSP (if any) will have the right to obtain 

position and trading information directly from Participants as necessary to perform CMSEF’s 

Oversight functions as set forth in this Rulebook. 

Rule 503 Investigations 

CMSEF’s Compliance Department or Disciplinary Panels will investigate any matter within 

CMSEF’s disciplinary jurisdiction of which it becomes aware. The Compliance Department will 

determine the nature and scope of its Investigations within its sole discretion and will function 

independently of any commercial interests of CMSEF. An Investigation will be initiated if the 

Compliance Department or other CMSEF Departments determines that a violation of CMSEF 

may have occurred. The Compliance Department may informally contact Participants in order to 

obtain information. 

Notwithstanding the above, CMSEF will commence an Investigation at the request of the CFTC. 

CMSEF’s Compliance Department has the authority to: 

(i) initiate and conduct Investigations; 

(ii) prepare Investigation Reports and make recommendations concerning initiating 

Disciplinary Proceedings; 

(iii) allege violations within CMSEF’s disciplinary jurisdiction; 

(iv) prosecute alleged violations within CMSEF’s disciplinary jurisdiction; and

(v) represent CMSEF on an appeal to an Appeal Panel of any Disciplinary Proceeding, 

summary imposition of fines, summary suspension or other summary action. 

Each Participants, Authorized Persons, Authorized Users, Clearing Members, and Participant’s 

Customers: 

(i) is obligated to appear, testify and respond in writing to interrogatories within the 

time period required by the Compliance Department in connection with any Rule, 

any Investigation; or any preparation by and presentation during a Disciplinary 

Proceeding or appeal from a decision in a Disciplinary Proceeding, summary 

imposition of fines, summary suspension or other summary action by CMSEF; 

(ii) is obligated to produce books, records, papers, documents or other tangible 

evidence in his possession, custody or control within the time period required by 

the Compliance Department in connection with any Rule, any Investigation, any 

preparation by and presentation during a Disciplinary Proceeding or appeal from 
a decision in any Disciplinary Proceeding, summary imposition of fines, summary 

suspension or other summary action by CMSEF; and 

(iii) may not impede or delay any Investigation, Disciplinary Proceeding, appeal from 

a Disciplinary Proceeding, summary imposition of fines, summary suspension or 

other summary action. 

Rule 504 Reports of Investigations 

CMSEF’s Compliance Department will maintain a log of all Investigations and their disposition. 

The Compliance Department will prepare a written report of each Investigation (the “Investigation 

Report”), regardless of whether the evidence gathered during any Investigation forms a 

reasonable basis to believe that a violation within CMSEF’s jurisdiction has occurred or is about 

to occur or whether the evidence gathered results in closing the matter without further action or 

through summary action. 

Any Investigation Report will include the reasons for initiating the Investigation (including a 

summary of the complaint, if any), all relevant facts and evidence gathered and the analysis, 

conclusions and recommendation of the Compliance Department. For each potential respondent, 

the Compliance Department will recommend either: 

(i) closing the Investigation without further action; 

(ii) entering into a summary action;

(iii) resolving the Investigation through an informal disposition, including the issuance by 

the Compliance Department of a warning letter (provided that no more than one 

warning letter for the same violation may be issued to the same potential respondent 

during a rolling 12-month period);

(iv) initiating Disciplinary Proceedings; or 

(v) negotiating a settlement. 

An informal disposition (including the issuance of a warning letter by the Compliance Department) 

will not constitute a finding of a violation or a sanction. 

CMSEF’s Compliance Department shall provide the Investigation Report to the Chief Compliance 

Officer, who shall determine whether the Investigation Report is complete.

CMSEF’s Compliance Department shall complete each Investigation in a timely manner and, 

absent mitigating factors, no later than 12 months after the date that such Investigation was 

opened. 

Rule 505 Opportunity to Respond to Investigation Reports 

After completing the Investigation Report, if the evidence gathered during an Investigation forms 

a reasonable basis to believe that a violation within CMSEF’s jurisdiction has occurred or is about 

to occur, CMSEF’s Compliance Department may, upon approval of the Chief Compliance Officer, 

notify each potential respondent that the Compliance Department has recommended formal 

disciplinary charges against each such potential respondent. 

The potential respondents shall be notified in writing and shall have fourteen days to respond, 

unless extenuating circumstances require a response sooner.

CMSEF’s Compliance Department may allow a potential respondent to propose a settlement of 

the matter or to submit a written statement explaining why either a Disciplinary Proceeding should 

not be instituted or one or more of the potential charges should not be brought. The potential 

respondent shall submit such written statement within the time limit established by the 

Compliance Department. 
Rule 506 Review of Investigation Reports 

CMSEF’s Compliance Department will, within 30 days, take one of the following actions: 

(i) If CMSEF’s Compliance Department determines that no reasonable basis exists to 

believe that a violation within CMSEF’s jurisdiction has occurred or is about to occur, it 

may direct that no further action be taken. Upon such determination, the Compliance 

Department will provide a written statement setting forth the facts and analysis supporting 

the decision. 

(ii) If CMSEF’s Compliance Department determines that Disciplinary Proceedings are 

unwarranted, it may issue a warning letter setting forth, in writing, the facts and analysis 

supporting the decision. 

(iii) If CMSEF’s Compliance Department determines that additional inquiries or evidence is 

needed to decide whether a reasonable basis exists to believe that a violation within 

CMSEF’s jurisdiction has occurred or is about to occur, it will continue the Investigation. 

(iv) If CMSEF’s Compliance Department determines that a reasonable basis exists to believe 

that a violation within CMSEF’s jurisdiction has occurred or is about to occur, the 

potential respondent will be served with a notice of charges and proceed in accordance 

with this Chapter 5. 

Rule 507 Warnings

CMSEF’s Compliance Department is authorized to issue a warning letter to an individual or entity 

subject to an Investigation. If a warning letter is issued by the CMSEF’s Compliance Department, 

it shall not be considered an indication that a violation has occurred. Only one warning letter may 

be issued to the same individual or entity per violation per year. 

Rule 508 Notice of Charges 

If CMSEF’s Compliance Department authorizes Disciplinary Proceedings pursuant to these 

Rules, it will prepare, and serve in accordance with these Rules, a notice of charges. 

A notice of charges will: 

(i) state the acts, practices or conduct in which the respondent is alleged to have 

engaged; 

(ii) state the Rule alleged to have been violated or about to be violated; 

(iii) advise the respondent of its right to a hearing and its right to be represented by 

legal counsel or any other representative of its choosing (other than a Director, 

Officer or Employee of CMSEF, any member of the Disciplinary Panel or any 

Person substantially related to the Disciplinary Proceedings such as a material 

witness or other respondent) in all succeeding stages of the disciplinary process; 

(iv) state the period of time within which the respondent can request a hearing on the 

notice of charges, which will not be less than 20 days after service of the notice 

of charges; 

(v) advise the respondent that any failure to request a hearing within the period 

stated, except for good cause, will be deemed to constitute a waiver of the right 

to a hearing; and 

(vi) advise the respondent that any allegation in the notice of charges that is not 

expressly denied will be deemed to be admitted. 
Rule 509 Service of Notice of Charges 

CMSEF shall serve notice of charges or other documents contemplated to be served pursuant to 

this Chapter 5 to a contact designated by each Participant. CMSEF may serve such notice (and 

service shall be deemed complete) to the respondent personally, or by deposit in the United 

States mail, postage prepaid, via registered or certified mail addressed to the respondent at the 

address as it appears in records of CMSEF. Notice of Charges may also be served by electronic 

mail to the respondent’s electronic mail address as it appears on the books and records of 

CMSEF, if followed by a hard copy of the document sent promptly thereafter by registered or 

certified mail addressed to the respondent at the respondent’s address as it appears in records of 

CMSEF. 

Rule 510 Answer to Notice of Charges 

If the respondent determines to answer a notice of charges, the respondent must file an answer 

within 20 days after being served with such notice, or within such other time period determined 

appropriate by the Chief Compliance Officer. 

To answer a notice of charges, the respondent must in writing: 

(i) for each allegation set forth in the notice of charges, admit such allegation, deny 

such allegation, or affirmatively state that the respondent does not have and is 

unable to obtain sufficient information to admit or deny such allegation, which

shall have the effect of a denial of such allegation; 

(ii) specify any specific facts that contradict the notice of charges; 

(iv) specify any affirmative defenses to the notice of charges; 

(iv) sign and serve the answer on the Chief Compliance Officer; and 

(v) if applicable, request a hearing before a Disciplinary Panel. 

Any failure by the respondent to serve a timely answer to a notice of charges will be deemed to 

be an admission to the allegations in such notice. Any failure by the respondent to answer one or 

more allegations in a notice of charges will be deemed to be an admission of that allegation or 

those allegations. Any allegation in a notice of charges that the respondent fails to deny will be 

deemed to be admitted. A general denial by the respondent, without more, will not satisfy the 

requirements of the second paragraph of this Rule. 

If a respondent admits or fails to specifically deny any of the allegations in the notice of charges, 

the Disciplinary Panel shall find that the violations set forth in such allegations have been 

committed and shall impose a sanction for such violations. The Disciplinary Panel shall promptly 

notify the respondent in writing of any sanction imposed pursuant to this Rule and advise the 

respondent that the respondent may request a hearing on such sanction within 20 days of the 

respondent being served with such notice. Any failure by the respondent to do so will be deemed 

to be an acceptance of the sanctions in such notice and waiver of any right to appeal such 

sanctions. 

A respondent shall be granted a hearing before a Disciplinary Panel for every instance in which 

such respondent either denies an allegation and requests a hearing in accordance with this Rule; 

or requests a hearing in accordance with this Rule.

Rule 511 Right to a Hearing

All respondents who have denied a charge shall be afforded the opportunity for a hearing. The 

hearing must concern only those charges, which the respondent has denied.
Rule 512 Settlements 

A respondent or potential respondent may at any time propose in writing an offer of settlement to 

anticipated or instituted Disciplinary Proceedings. Any offer of settlement should contain 

proposed findings and sanctions and be signed by the respondent or potential respondent and 

submitted to the Compliance Department, and shall take into account, among other things, the 

disciplinary history of the respondent or potential respondent. A respondent or potential 

respondent may offer to settle Disciplinary Proceedings without admitting or denying the findings 

contained in the order of the Disciplinary Proceedings but must accept the jurisdiction of CMSEF 

over it and over the subject matter of the proceedings and consent to the entry of the findings and 

sanctions imposed. 

If a respondent or potential respondent submits an offer of settlement in accordance with 

paragraph (a) of this Rule, the Compliance Department will forward the offer to the Disciplinary 

Panel with a recommendation on whether to accept or reject the offer. The respondent or 

potential respondent may withdraw such offer of settlement at any time before acceptance by the 

Disciplinary Panel, but may not withdraw such offer at any time after acceptance by the 

Disciplinary Panel. 

The Disciplinary Panel may accept the offer of settlement, but may not alter the terms of a 

settlement offer unless the respondent or potential respondent agrees. 

If an offer of settlement is accepted by the Disciplinary Panel, it shall issue a written decision 

specifying: 

(i) the Rule violations it has reason to believe were committed, including the basis 

or reasons for its conclusions; 

(ii) any sanction to be imposed, which must include full Customer restitution where 

Customer harm has been demonstrated; and 

(iii) if applicable, that the respondent has accepted the sanctions imposed without 

either admitting or denying the Rule violations. 

In the event that the Disciplinary Panel accepts an offer of settlement without the agreement of 

the Compliance Department, the decision must adequately support such acceptance. 

If an offer of settlement is accepted and the related order of Disciplinary Proceedings becomes 

final, the respondent’s submission of the offer will be deemed to constitute a waiver of the right to 

notice, opportunity for a hearing and review and appeal under these Rules. 

If the offer of settlement of a respondent or potential respondent is not accepted by the 

Disciplinary Panel, fails to become final or is withdrawn by the respondent or potential respondent 

before its acceptance by the Disciplinary Panel, the matter will proceed as if the offer had not 

been made and the offer and all documents relating to it will not become part of the record. 

Neither a respondent or potential respondent nor the Compliance Department may use an 

unaccepted offer of settlement as an admission or in any other manner at a hearing of, or appeal 

from, Disciplinary Proceedings. 

Rule 513 Disciplinary Panels 

The Disciplinary Panel shall conduct hearings in connection with any Disciplinary Proceedings 

(except for summary impositions of fines pursuant to these Rules), to make findings, render 

decisions, and impose sanctions pursuant to this Chapter 5. 

Each Disciplinary Panel shall be composed of three individuals selected by the Chief Compliance 

Officer. Except in cases limited to the timely submission of accurate records, each Disciplinary 
Panel shall consist of an individual who would not be disqualified from serving as a Public 

Director, who shall chair the Disciplinary Panel. 

No member of the Compliance Department may serve on a Disciplinary Panel. 

Except as may otherwise be provided in these Rules, the Board may at any time remove any 

member of a Disciplinary Panel for cause. 

Within 10 days of being notified of the appointment of the Disciplinary Panel, a respondent may 

seek to disqualify any individual named to the Disciplinary Panel for the reasons identified in 

these Rules, by serving written notice on the Chief Compliance Officer and providing a copy 

thereof to the chairman of the Disciplinary Panel. By not timely filing a request for disqualification, 

the respondent will be deemed to have waived any objection to the composition of a Disciplinary 

Panel. The Chief Compliance Officer will decide in his sole discretion the merits of any request 

for disqualification. Any such decision will be final and not subject to appeal. 

All information, records, materials and documents provided to the Disciplinary Panel and all 

deliberations, testimony, information, records, materials and documents related thereto shall be 

treated as non-public and confidential and shall not be disclosed, except as necessary to further 

an Investigation or as otherwise required by law. No individual shall serve on a Disciplinary Panel 

unless that individual has agreed in writing that he will not publish, divulge, or make known in any 

manner facts or information regarding the business of any Person or other information which may 

come to his or her attention in his official capacity as a member of the Disciplinary Panel, except:

a. when reporting to the Board or to a Standing Committee concerned with such 

information;

b. when reporting to the Compliance Department;

c. when requested by the CFTC or other government agency; or 

d. when compelled to testify in any judicial or administrative proceeding. 

Rule 514 Convening Hearings of Disciplinary Proceedings 

All Disciplinary Proceedings (except for summary impositions of fines pursuant to these Rules) 

will be conducted at a hearing before a Disciplinary Panel. Hearings will be conducted fairly, 

privately and confidentially. Notwithstanding the confidentiality of hearings, the Disciplinary Panel 

may appoint an expert to attend any hearing and assist in deliberations if such expert agrees to 

be subject to an appropriate confidentiality agreement. 

After reasonable notice to each respondent, the Disciplinary Panel will promptly convene a 

hearing to conduct the Disciplinary Proceedings with respect to such respondent. Parties to a 

Disciplinary Proceeding include each respondent and the Compliance Department. 

The chairman of the Disciplinary Panel may continue, adjourn or otherwise conduct the hearing, 

as he may deem appropriate. The chairman of the Disciplinary Panel will determine all 

procedural and evidentiary matters, including the admissibility and relevance of any evidence 

proffered. In determining procedural and evidentiary matters, the chairman of the Disciplinary 

Panel will not be bound by any evidentiary or procedural rules of law. Once admitted during the 

hearing, the Disciplinary Panel may consider, and attach the weight it believes appropriate to, 

evidence or other materials. CMSEF’s Legal Department will provide guidance to the chairman of 

the Disciplinary Panel on the conduct of the hearing. 

Except for procedural and evidentiary matters decided by the chairman of the Disciplinary Panel 

pursuant to these Rules, unless each respondent otherwise consents, the entire Disciplinary 

Panel must be present during the entire hearing and any related deliberations. 

Rule 515 Respondent Review of Evidence 
Prior to the commencement of a hearing, each respondent will be given the opportunity, subject 

to the sections below, to review all books, records, documents, papers, transcripts of testimony 

and other tangible evidence in the possession or under the control of CMSEF that the 

Compliance Department will use to support the allegations and proposed sanctions in the notice 

of charges or which the chairman of the Disciplinary Panel deems relevant to the Disciplinary 

Proceedings. Notwithstanding the foregoing, no respondent will have the right to review, and 

CMSEF will have no obligation to disclose, any information protected by attorney-client privilege. 

All requests for such information must be made not less than 10 days prior to the scheduled 

hearing date, unless the chairman of the Disciplinary Panel agrees otherwise. 

If any books, records, documents, papers, transcripts of testimony, or other tangible evidence 

contain information that could adversely affect the competitive position of the Person providing 

the information or if such information might compromise other Investigations being conducted by 

the Compliance Department, the Compliance Department may redact, edit or code such 

information before furnishing it to the respondent. 

Notwithstanding anything in this Rule to the contrary, the Compliance Department: 

(i) will not redact, edit or code competitive or investigative information contained in 

documents in a manner that would materially impair the respondent’s ability to 

defend against the allegations or proposed sanctions in the notices of charges, 

and 

(ii) will provide the respondent with access to the information and portions of the 

documents that the Compliance Department intends to rely on to support the 

allegations or proposed sanctions in the notice of charges. 

For purposes of these Rules, information that could adversely affect competitive positions 

includes positions in Swaps currently held, trading strategies employed in establishing or 

liquidating positions, the identity of any Participant or Authorized User and the personal finances 

of the Person providing the information. 

The respondent shall treat as confidential all data and information provided to it pursuant to these 

Rules, and shall not disclose any such data or information, except as necessary to the 

respondent’s defense of notice of charges and any appeal of the decision of the Disciplinary 

Panel.

Rule 516 Conducting Hearings of Disciplinary Proceedings 

At a hearing conducted in connection with any Disciplinary Proceedings, the Compliance 

Department will present its case supporting the allegations and proposed sanctions in the notice 

of charges to the Disciplinary Panel. If a respondent has timely filed an answer to the notice of 

charges in accordance with these Rules, the respondent is entitled to attend and participate in the 

hearing.

At a hearing conducted in connection with any Disciplinary Proceedings, the Compliance 

Department and each respondent may: 

(i) present evidence and facts determined relevant and admissible by the chairman 

of the Disciplinary Panel; 

(ii) call and examine witnesses; and 

(iii) cross-examine witnesses called by other parties. 

If the respondent fails to file an answer, has filed a general denial, or if any or all of the allegations 

in the notice of charges are not expressly denied in the respondent’s answer, the chairman of the 

Disciplinary Panel may limit evidence concerning any allegations not expressly denied in 

determining the sanctions to impose. If a respondent fails to file an answer but appears at the 

hearing, the respondent may not participate in the hearing (by calling or cross-examining 

witnesses, testifying in defense, presenting evidence concerning the notice of charges, or 
otherwise) unless the Disciplinary Panel determines that the respondent had a compelling reason 

for failing to file a timely answer. If the Disciplinary Panel determines that the respondent had a 

compelling reason for failing to file a timely answer, the Disciplinary Panel will adjourn the hearing 

and direct the respondent to promptly file the written answer in accordance with these Rules. 

Any Person entitled, or required or called upon, to attend a hearing before a Disciplinary Panel 

pursuant to this Rule will be given reasonable notice, confirmed in writing, specifying the date, 

time and place of the hearing, and the caption of the Disciplinary Proceedings. CMSEF will 

require all Authorized Persons and Authorized Users that are called as witnesses to appear at the 

hearing and produce evidence. CMSEF will make reasonable efforts to secure the presence of 

all other Persons called as witnesses whose testimony would be relevant. 

If during any Disciplinary Proceedings the Disciplinary Panel determines that a reasonable basis 

exists to believe that the respondent violated a Rule or a provision of Applicable Law other than 

the violations alleged in the notice of charges, the Disciplinary Panel may consider those 

apparent violations after providing the respondent with an opportunity to answer the additional 

allegations in accordance with these Rules. In connection with considering apparent violations 

pursuant to this Rule, the Disciplinary Panel may request that the Compliance Department 

provide the Disciplinary Panel with any additional information. 

The Disciplinary Panel may summarily impose sanctions on any Participant, Authorized Person, 

or Authorized User that impedes or delays the progress of a hearing. 

CMSEF will arrange for any hearing conducted in connection with Disciplinary Proceedings to be 

recorded hearing verbatim, or substantially verbatim, in a manner capable of accurate 

transcription. The record shall not be transcribed unless requested by CTFC staff or the 

respondent or the decision is appealed. If the respondent requests a copy of all or portions of the 

recording of a hearing, the chairman of the Disciplinary Panel may within his sole discretion order 

the respondent to pay the costs for transcribing the recording of the hearing. 

No interlocutory appeals of rulings of any Disciplinary Panel or chairman of the Disciplinary Panel 

are permitted. 

Rule 517 Decision of Disciplinary Panel 

As promptly as reasonable following a hearing, the Disciplinary Panel will issue an order 

rendering its decision based on the weight of the evidence contained in the record of the 

Disciplinary Proceedings. A decision by a majority of the Disciplinary Panel will constitute the 

decision of the Disciplinary Panel. 

CMSEF will serve a copy of the order of the Disciplinary Panel on the respondent and the 

Compliance Department. The order will include: 

(i) the notice of charges or summary of the allegations; 

(ii) the answer, if any, or a summary of the answer; 

(iii) a brief summary of the evidence introduced at the hearing (or, where appropriate, 

incorporation by reference of the Investigation Report); 

(iv) findings of fact and conclusions concerning each allegation, including each specific 

Rule that the respondent is found to have violated; 

(v) the imposition of sanctions, if any, the basis for the sanctions, and effective date of 

each sanction; and 

(vi) notice of the respondent’s right to appeal pursuant to these Rules. 

A Disciplinary Panel shall be dissolved automatically when it has decided the matter for which it 

was appointed and has notified the respondent and the Chief Compliance Officer in writing of its 

decision. 
Unless a timely notice of appeal is filed pursuant to these Rules, the order of the Disciplinary 

Panel will become final upon the expiration of 20 days after the order is served on the respondent 

and a copy thereof is provided to the Compliance Department. 

CMSEF will notify the Person subject to a Disciplinary Panel decision within thirty days of the 

action taken against such Person. 

Rule 518 Sanctions 

After notice and opportunity for hearing in accordance with these Rules, CMSEF will impose 

sanctions if any Participants, Authorized Persons, Authorized Users, Clearing Members, and 

Participant’s Customers, or other Person using any of the Participant’s User IDs is found to have 

violated or to have attempted to violate a Rule or provision of Applicable Law for which CMSEF 

possesses disciplinary jurisdiction. Any such sanctions shall take into account the respondent’s 

disciplinary history (if any). CMSEF may impose one or more of the following sanctions or 

remedies: 

(i) a warning letter, provided that no more than one warning letter may be issued to the 

same respondent found to have committed the same rule violation within a rolling 12-

month period; 

(ii) censure; 

(iii) limitation, restriction or qualification of Trading Privileges or other activities, functions 

or operations; 

(iv) suspension of Trading Privileges for a period not to exceed 12 months; 

(v) fine (subject to this Rule); 

(vi) restitution or disgorgement (in the event of a Customer harm, full Customer 

restitution, except where the amount of restitution or to whom it should be provided 

cannot reasonably be determined); 

(vii) termination of Trading Privileges; 

(viii) expulsion; or 

(ix) any other sanction or remedy deemed to be appropriate. 

CMSEF will consider the severity of the violation and the deterrent effect when determining an 

appropriate sanction.

CMSEF may impose a fine of up to $100,000 for each violation. If a fine or other amount is not

paid within 30 days of the date that it becomes payable, then interest will accrue on the sum from 

the date that it became payable at the quoted prime rate plus three per cent. CMSEF has sole 

discretion to select the bank on whose quotations to base the prime rate. Each Participant will be 

responsible for paying any fine or other amount imposed on, but not paid by, any of its Authorized 

Persons or Authorized Users. 

Rule 519 Appeal from Disciplinary Panel Decision, Summary Impositions of Fines and Other

Summary Actions 

Each respondent found by the Disciplinary Panel to have violated (or, in the case of a Participant, 

whose Authorized User, Clearing Member or other Person using its User ID was found to have 

violated) a Rule or who is subject to any summary fine imposed pursuant to these Rules or any 

summary action imposed pursuant to these Rules may appeal the decision within 20 days of 

receiving the order of the Disciplinary Panel or the notice of summary action, as the case may be, 

by filing a notice of appeal with the Chief Compliance Officer. 

The Compliance Department may appeal all or any part of a decision of the Disciplinary Panel, 

including any sanctions that may or may not have been imposed by the Disciplinary Panel, within 

20 days of receiving the order of the Disciplinary Panel, by filing a notice of appeal with the Chief 

Compliance Officer. 
While an appeal is pending, the effect of the order of the Disciplinary Panel or the summary 

action (including any sanctions, remedies or costs imposed thereby) shall be suspended. 

The notice of appeal must state in writing the grounds for appeal, including the findings of fact, 

conclusions or sanctions to which the respondent objects. An appellant may appeal the order of 

the Disciplinary Panel or any summary action on the grounds that: 

(i) the order or summary action was arbitrary, capricious, an abuse of discretion, or not 

in accordance with these Rules; 

(ii) the order or summary action exceeded the authority or jurisdiction of the Disciplinary 

Panel, the Chief Compliance Officer or CMSEF; 

(iii) the order or summary action failed to observe required procedures; 

(iv) the order or summary action was unsupported by the facts or evidence; or 

(v) the sanctions, remedies or costs, which were imposed, were inappropriate or 

unsupported by the record. 

The Chief Compliance Officer will forward copies of any notice of appeal received by it to all 

parties to the Disciplinary Proceeding or summary action, as the case may be, except the 

appellant. On or before the 20th day after filing a notice of appeal, the appellant must file with the 

Chief Compliance Officer and serve on the Compliance Department a brief supporting the notice 

of appeal and documents supporting the brief. On or before the 20th day after the date on which 

the appellant serves their supporting brief, the appellee must file and serve its brief in opposition. 

On or before the 10th day after the date on which the appellee serves its brief in opposition, the 

appellant must file and serve a brief in reply on the Compliance Department. 

In connection with any appeal, the Compliance Department will furnish to the Chief Compliance 

Officer and to the respondent/appellant a transcript of the hearing, any exhibits introduced at the 

hearing, the notice of appeal and briefs filed to support and oppose the appeal. 

No later than 30 days after the last submission filed pursuant to this Rule, the Chief Compliance 

Officer will appoint an Appeals Panel to consider and determine the appeal. An Appeals Panel 

shall be comprised of three individuals, none of whom shall be a member of the Compliance 

Department or have been a member of any Disciplinary Panel involved in the matters on appeal. 

The chairman of the Appeals Panel shall be an individual who would not be disqualified from 

serving as a Public Director. 

Within 10 days of being notified of the appointment of the Appeals Panel, a respondent may seek 

to disqualify any individual named to the Appeals Panel for the reasons identified in these Rules, 

by serving written notice on the Chief Compliance Officer. By not filing a timely request for 

disqualification, the respondent will be deemed to have waived any objection to the composition 

of the Appeals Panel. The Chief Compliance Officer will decide the merits of any request for 

disqualification within his or her sole discretion. Any such decision will be final and not subject to 

appeal. 

The Appeals Panel may hold a hearing to allow parties to present oral arguments. Any hearing 

will be conducted privately and confidentially. Notwithstanding the confidentiality of hearings, the 

Appeals Panel may appoint an expert to attend any hearing and assist in the deliberations if such 

individuals agree to be subject to appropriate confidentiality agreements. In determining 

procedural and evidentiary matters, the Appeals Panel will not be bound by evidentiary or 

procedural rules or law. 

The Appeals Panel will only consider on appeal the record before the Disciplinary Panel or, in the 

case of a summary action, the record considered by the Chief Compliance Officer, the notice of 

appeal, the briefs filed in support and opposition of the appeal, and any oral arguments of the 

parties. The Appeals Panel may only consider new evidence when the Appeals Panel is satisfied 
that good cause exists for why the evidence was not introduced during the Disciplinary 

Proceeding or when imposing the summary action. 

After completing its review, the Appeals Panel may affirm, modify or reverse any order of the 

Disciplinary Panel or summary action under appeal, in whole or in part, including increasing, 

decreasing or eliminating any sanction or remedy imposed, imposing any other sanction or 

remedy authorized by these Rules, or remanding the matter to the same or a different Disciplinary 

Panel for further Disciplinary Proceedings or for reconsideration by the Chief Compliance Officer 

in the case of summary action. The Appeals Panel may order a new hearing for good cause or if 

the Appeals Panel deems it appropriate. 

As promptly as reasonably possible following its review, the Appeals Panel will issue a written 

decision on appeal rendering its decision based on the weight of the evidence before the Appeals 

Panel. The decision of the Appeals Panel will include a statement of findings of fact and 

conclusions for each finding, sanction, remedy and cost reviewed on appeal, including each 

specific Rule and provision of Applicable Law that the respondent is found to have violated, if any, 

and the imposition of sanctions, remedies and costs, if any, and the effective date of each 

sanction, remedy or cost. 

The Appeals Panel’s written order on appeal (including findings of fact and conclusions and the 

imposition of sanctions, remedies and costs, and the effective date of any sanction, remedy cost) 

will be the final action of CMSEF and will not be subject to appeal within CMSEF.

Rule 520 Summary Imposition of Fines 

The Chief Compliance Officer may summarily impose a fine against a Participant (on behalf of 

itself or any of its Authorized Persons, Authorized Users, or Customers, or other Persons using 

any of its User IDs), Clearing Member, or Authorized User for failing: 

(i) to timely pay fees, cost, charges or fines to CMSEF or a DCO; 

(ii) to make timely and accurate submissions to CMSEF of notices, reports or other 

information required by these Rules; and 

(iii) to keep any books and records required by these Rules. 

The Compliance Department, acting on behalf of the Chief Compliance Officer, will give notice of 

any fine imposed pursuant to this Rule to each Participant or Authorized User subject thereto. 

The notice will specify:

(i) the violation of these Rules for which the fine is being imposed;

(ii) the date of the violation; and 

(iii) the amount of the fine. Within 20 days of serving the notice of fine, the 

Participant, or Authorized User, as the case may be, must either pay or cause 

the payment of the fine or file notice of an appeal pursuant to these Rules. 

Unless timely notice of appeal is filed pursuant to these Rules, the fine will 

become final upon the expiration of 20 days after the notice of fine is served on 

the Participant, or Authorized User, as the case may be. 

CMSEF will set the amount of any fines imposed pursuant to this Rule, with the maximum fine for 

each violation not to exceed $5,000. Summary imposition of fines pursuant to this Rule will not 

preclude CMSEF from bringing any other action against the Participant, or Authorized User, as 

the case may be. 

Rule 521 Summary Suspensions and Other Summary Actions 

Notwithstanding anything in these Rules to the contrary, if the Chief Compliance Officer 

reasonably believes that immediate action is necessary to protect the best interests of CMSEF or 

the marketplace, the Chief Compliance Officer may, after consultation with the Regulatory 

Oversight Committee summarily suspend, revoke, limit, condition, restrict or qualify the Trading 
Privileges of a Participant or Authorized User and take other summary action against a 

Participant or any of its Authorized Users in accordance with these Rules. 

Whenever practicable, the Compliance Department, acting on behalf of the Chief Compliance 

Officer, shall provide prior written notice to the party against whom any action in accordance with 

this Rule shall be taken. If prior notice is not practicable, CMSEF will give notice at the earliest 

possible opportunity to the respondent against whom the action is brought. The Compliance 

Department, acting on behalf of the Chief Compliance Officer, will prepare a notice of summary 

action (which will state the action, the reasons for the action, and the effective time, date and 

duration of the action) and serve the notice on such party and advise the recipient of the notice of 

its right to a prompt hearing before a Disciplinary Panel and its right to be represented by legal 

counsel or other representative at such hearing. A request by the recipient of the notice for such 

a hearing shall not delay the effectiveness of the summary action. 

At the request of CMSEF, a respondent against whom a summary action is brought pursuant to 

this Rule must provide books and records over which the respondent has access or control and 

must furnish information to, or appear or testify before, CMSEF or the Disciplinary Panel with the 

enforcement of any Rule. 

If a hearing is requested pursuant to this Rule, the Disciplinary Panel will promptly convene a 

hearing to be conducted in accordance with these Rules.

As promptly as reasonably possible after the hearing, the Disciplinary Panel will issue to the 

respondent a written order affirming, modifying, or reversing the summary action. The order will 

include a description of the summary action taken, a summary of the evidence introduced at the 

reinstatement hearing, a statement of findings of fact and conclusions, a description of any action 

taken or to be taken by CMSEF, and the effective date, time and duration thereof. 

Any decision of a Disciplinary Panel pursuant to this Rule will be the final action of CMSEF, and 

not subject to appeal within CMSEF upon serving the respondent with a copy of the decision. 

Rule 522 Reinstatement after Summary Suspension 

A respondent whose Trading Privileges are suspended, revoked, limited, conditioned, restricted 

or qualified pursuant to these Rules may apply for reinstatement by filing with the Compliance 

Department a written request stating the applicant’s reasons for seeking reinstatement. CMSEF 

will not consider a respondent’s request for reinstatement if the respondent 

(i) owes any fines, fees, charges or costs to CMSEF, 

(ii) continues to fail to appear at Disciplinary Proceedings without good cause or 

(iii) continues to impede the progress of Disciplinary Proceedings. 

Within a reasonable period after the filing of a request for reinstatement, the Appeals Panel will 

conduct a hearing to consider the request. At the hearing for reinstatement, the respondent will 

present its, his case supporting the reinstatement and the Compliance Department, acting on 

behalf of the Chief Compliance Officer may, in its discretion, present its case opposing or 

supporting the reinstatement and each may present relevant and admissible evidence and facts 

and call, examine and cross-examine witnesses. At the hearing for reinstatement, CMSEF may 

require Participants, Authorized Persons, Authorized Users, Clearing Members, or Participant’s 

Customers to appear as witnesses and produce evidence if the Appeals Panel determines that 

the evidence is relevant. 

As promptly as reasonably possible after a reinstatement hearing, the Appeals Panel will issue an 

order reinstating, denying the reinstatement, or placing conditions on the reinstatement of the 

Trading Privileges of the respondent. The order will include a brief summary of the evidence 

introduced at the reinstatement hearing; and, if applicable, findings of fact and conclusions not 
contained in the notice of summary action issued pursuant to these Rules. The order of the

Appeals Panel may not be appealed. 

Rule 523 Rights and Responsibilities after Suspension or Termination 

When the Trading Privileges of a Participant or Authorized User are suspended for a period of 12 

months or less, none of its rights and Trading Privileges (including the right to hold oneself out to 

the public as a Participant or Authorized User or enter Orders or RFQs into the SEF and receive 

Participant rates for fees, costs, and charges and deposit margin at Participant levels) will apply 

to such Participant, Authorized Person or Authorized User during the period of the suspension, 

except for the right to assert claims against others as provided in these Rules. Any such 

suspension will not affect the rights of creditors under these Rules or relieve the Participant or 

Authorized User of its obligations under these Rules to perform any Swaps entered into before 

the suspension, or for any Company fees, costs, or charges incurred during the suspension. 

CMSEF may discipline a suspended Participant, Authorized Person or Authorized User under this 

Chapter 5 for any violation of a Rule or provision of Applicable Law committed by the Participant 

or Authorized User before, during or after the suspension.

When the Trading Privileges of a Participant or Authorized User are terminated, all of its rights 

and Trading Privileges will terminate, except for the right of the Participant, Authorized Person or 

Authorized User in question to assert claims against others, as provided in these Rules. Any 

such termination will not affect the rights of creditors under these Rules. A terminated Participant 

or Authorized User may only seek to reinstate his Trading Privileges by providing CMSEF with 

satisfactory evidence that he complies with these Rules. CMSEF will not consider the application 

of a terminated Participant or Authorized User if such Participant or Authorized User, as the case 

may be, fails to appear at Disciplinary Proceedings without good cause or impedes the progress 

of Disciplinary Proceedings. 

A suspended or terminated Participant or Authorized User remains subject to these Rules and the 

jurisdiction of CMSEF for any acts or omissions prior to the suspension or termination, and must 

cooperate in any Investigation, Disciplinary Proceeding, appeal from Disciplinary Proceedings, 

summary suspension or other summary action as if the suspended or terminated Participant or 

Authorized User still had Trading Privileges. 

Rule 524 Notice of Disciplinary Proceedings 

CMSEF will provide written notice of Disciplinary Proceedings to the parties and the RSP 

consistent with applicable CFTC Regulations. Whenever CMSEF suspends, expels, fines or 

otherwise disciplines, or denies any Person access, to CMSEF, CMSEF will make the public 

disclosures required by CFTC Regulations.

Rule 525 CFTC Review of CMSEF Actions

The review by the CFTC, pursuant to section 8c of the Act, as amended, of any suspension, 

expulsion, disciplinary or access denial action, or other adverse action by CMSEF, shall be 

governed by Part 9 of the CFTC’s Regulations.

Chapter 6 Miscellaneous

Rule 601 Gifts and Gratuities 

Except with the prior written approval of the Chief Compliance Officer, no Participant, Authorized 

Person, or Authorized User shall, directly or indirectly, give or permit to be given anything of 
value, including gifts and gratuities, to any CMSEF member of the Board, Officer, Employee, or 

Agent of CMSEF.

Rule 602 Rule Violations

CMSEF shall consider it a violation of these Rules for a Participant, Authorized Person, 

Authorized User, or Customer of a Participant to knowingly violate the terms of any agreement 

made with CMSEF.

Rule 603 Market Data

CMSEF owns all rights, title and interest in and to all intellectual property and other proprietary 

rights (including all copyright, patent, trademark or trade secret rights) in any and all Market Data, 

and all derivative works based thereon, generated in the course of the operations of CMSEF. 

Participants, and other Persons affiliated with any of the foregoing may not distribute, sell or 

retransmit Market Data to any third party without the consent of CMSEF, with the exception of 

information about specific trades executed on CMSEF by the Participant or other Person affiliated 

with the Participant. 

CMSEF may share such proprietary data or personal information with one or more registered 

entities (as such term is defined in CFTC Regulations).

CMSEF is prohibited from the use any proprietary data or personal information obtained through 

the course of its regulatory role to further any commercial any business interest, without express 

permission. Such information includes, but is not limited to:

1. Records or data obtained through CMSEF’s surveillance of Participants; 

2. Records or data obtained related to a CMSEF Enforcement Action or 

Investigation; and

3. Records or data obtained from Participants by request

Access to the SEF may not in any way be conditioned upon the Participant agreeing to allow 

CMSEF to use its proprietary records or data. Such agreement must be in the form of 

independent, affirmative consent via separate signature from the Participant that CMSEF is 

collecting data or personal information for CMSEF’s regulatory role. 

Rule 604 Publication of Trading Information

As required by Core Principle 9 of Part 37, and by Part 16, of the CFTC Regulations, CMSEF will 

publish information about trading activities on CMSEF. CMSEF will publish such information in a 

timely manner.

Rule 605 Anti-Money Laundering

CMSEF requires all of its Participants to ensure that they “know their Customers and Employees”. 

CMSEF requires that all Participants, their Approved Persons and Approved Users agree to not 

knowingly assist any money laundering or other illicit business and will not knowingly assist or be 

a conduit for terrorist financing.

CMSEF may require that Participants provide evidence to prove that Participants’ Customers are 

not Specifically Designated Nations or Blocked Persons as designated by the Office of Foreign 

Assets Control of the U.S. Department of the Treasury.
Rule 606 Swaps Trading by CMSEF Officials

CMSEF prohibits members of the Board, Officers, Employees, and independent contractors from 

trading, directly or indirectly, any Swap traded on CMSEF or any other SEF where such individual 

has access to material non-public information concerning such Swap. Swaps traded by 

retirement plans or retirement investments where the individual is not involved in the decision 

making process shall not be deemed to constitute trading directly or indirectly in a Swap.

Rule 607 Confidentiality

With the following exceptions, CMSEF shall hold in confidence all non-public information provided 

by a Participant, Customer of a Participant or Authorized User:

(i) when legally requested by a Government Agency or the regulatory authority 

(foreign or domestic);

(ii) to a SDR, DCO, or other entity for the purposes of clearing a Swap;

(iii) to a Regulatory Services Provider;

(iv) when required as part of a legal proceeding;

(v) as part of an Investigation into market abuses or Disciplinary Proceedings;

(vi) with the consent of the Participant; and

(vii) any other reason permitted by these Rules.

Rule 608 Information-Sharing Agreements 

As required by Applicable Law, from time to time CMSEF may enter into information-sharing 

agreements to coordinate surveillance with domestic or foreign regulators, self-regulatory 

organizations, clearing organizations, exchanges, markets or other execution facilities to share 

information. 

Under such information-sharing agreements, CMSEF may:

(i) share information about current and former Participants;

(ii) share information about current and ongoing Investigations;

(iii) share information about CMSEF market activity; and

(iv) require Participants to provide detailed information about their activities, Customers 

and staff.

Rule 609 Rule Changes Due to Changes in Government Regulations

CMSEF may, from time to time, amend or repeal any Rule and/or adopt new Rules as required to 

remain in compliance with a CFTC or CEA Rules or Regulations. All new Rules, amendments or 

repeals of a Rule or adoption of a new Rule, shall take effect upon the effective date adopted by 

CMSEF.

Any and all such changes shall be binding on all Participants, Authorized Officials, Authorized 

Users, and Customers of Participants of the CMSEF. 

CMSEF may, in its sole discretion, waive, or extend the time period for performing, any act or 

acts designated by these Rules, but only to the extent that such waiver or extension is not 

inconsistent with the CEA or CFTC Regulations

Rule 610 Governing Law

Any disputes between CMSEF and a Participant, a Participant’s Authorized Person or Authorized 

User or a Customer of a Participant shall be governed by, and construed in accordance with, the 

laws of the State of New York applicable to contracts executed and performed wholly within the 
State of New York, without regard to any provisions of New York law that would apply the 

substantive law of a different jurisdiction. 

Any legal actions against CMSEF, its members of the Board, Officers, Employees, or agents 

must be brought within one year from the date of the event that caused the accrued. Legal 

actions against CMSEF shall be brought in the State or Federal courts located within the Borough 

of Manhattan in the City of New York. 

Participants, Authorized Persons, Authorized Users, and Customers of Participants who fail to 

prevail in a lawsuit or other legal proceeding against CMSEF or its members of the Board, 

Officers, Employees or Agents shall reimburse CMSEF for all expenses, including reasonable 

attorneys’ fees, incurred by CMSEF or its members of the Board, Officers, Employees or Agents 

by CMSEF in the defense of such proceedings. 

Rule 611 Force Majeure

CMSEF shall not be obligated to perform its obligations under these Rules or any agreement with 

a Participant, or to compensate any Participant or a Participant’s Customer for losses as a result 

of any circumstances that CMSEF determines, in its sole discretion, may have an adverse effect 

upon the functions and facilities of CMSEF. For the avoidance of doubt, this includes acts of 

God, fire or other natural disasters, bomb threats, acts of terrorism or war, severely inclement 

weather, power outages, interruption in telecommunications or Internet services or services by 

network service providers, work stoppages, severe market disruptions, disputes with service 

providers, or other unforeseen events.

Rule 612 Extension or Waiver of CMSEF Rules

The Chief Compliance Officer of CMSEF may, in his sole discretion, waive, or extend the time 

period for performing, any act or acts designated by CMSEF Rules, but only to the extent that 

such waiver or extension is not inconsistent with the CEA or CFTC Regulations.

Rule 613 Trading Restrictions of CMSEF Employees

Employees of CMSEF are prohibited from:

(i) Trading, directly or indirectly, in any commodity interest traded on CMSEF;

(ii) Trading, directly or indirectly, in any related commodity interest;

(iii) Trading, directly or indirectly, in a commodity interest traded on contract markets or 

SEFs or cleared by DCOs other than CMSEF; provided, that this prohibition only 

applies if the Employee has access to material, non-public information concerning 

such commodity interest;

(iv) Trading, directly or indirectly, in a commodity interest traded on or cleared by a linked 

exchange if the Employee has access to material, non-public information concerning 

such commodity interest; and

(v) Disclosing to any other Person any material, non-public information which such 

Employee obtains as a result of his or her employment at CMSEF where such 

Employee has or should have a reasonable expectation that the information 

disclosed may assist another Person in trading any commodity interest; provided, 

however, That such rules shall not prohibit disclosures made in the course of an 

Employee's duties, or disclosures made to another self-regulatory organization, 

linked exchange, court of competent jurisdiction or representative of any agency or 

department of the federal or state government acting in his or her official capacity.