EX RULEBOOK

Joint Rulebook of Electron Exchange DCM, LLC

&

Electron Exchange DCO, LLC 

VERSION 1.0 – MAY 1, 2023 

BY ACCESSING, OR ENTERING ANY ORDER INTO, THE EX SYSTEM, AND WITHOUT 

ANY NEED FOR ANY FURTHER ACTION, UNDERTAKING OR AGREEMENT, A 

PARTICIPANT, AND ITS AUTHORIZED USERS AGREE (I) TO BE BOUND BY, AND 

COMPLY WITH, THE RULES OF THE EXCHANGE, THE RULES OF THE 

CLEARINGHOUSE, ANY APPLICABLE CONTRACT RULES AND APPLICABLE LAW, IN 

EACH CASE TO THE EXTENT APPLICABLE TO IT OR THEM, AND (II) TO BECOME 

SUBJECT TO THE JURISDICTION OF EX WITH RESPECT TO ANY AND ALL MATTERS 

ARISING FROM, RELATED TO, OR IN CONNECTION WITH, THE STATUS, ACTIONS OR 

OMISSIONS OF SUCH PARTICIPANT AND/OR ITS AUTHORIZED USERS. 

Exhibit M-1
-iTABLE OF CONTENTS 

Page 

 DEFINITIONS ..........................................................................................................1

1.1. Defined Terms .........................................................................................................1

1.2. Rules of Interpretation .............................................................................................6

1.3. Effect of Titles .........................................................................................................6

1.4. Amendment of Rules ...............................................................................................6

1.5. Contract Rules ..........................................................................................................6

1.6. Rules of the Exchange and Clearinghouse...............................................................7

 GOVERNANCE ........................................................................................................8

2.1. Authority of the Boards of Managers ......................................................................8

2.2. Eligibility .................................................................................................................9

2.3. Exchange Regulatory Oversight Committee ...........................................................9

2.4. Other Exchange Committees .................................................................................10

2.5. Clearinghouse Committees ....................................................................................11

2.6. Officers ..................................................................................................................11

2.7. Emergency Rules ...................................................................................................13

2.8. Restrictions on Certain Persons Who Possess Material, Non-Public 

Information ............................................................................................................15

2.9. Conflicts of Interest................................................................................................15

2.10. Indemnification ......................................................................................................15

2.11. Regulatory Cooperation .........................................................................................16

2.12. Regulatory Services Agreement with the NFA .....................................................17

 PARTICIPANTS .....................................................................................................18

3.1. Participant Eligibility .............................................................................................18

3.2. Participant Applications .........................................................................................19

3.3. Participant Accounts ..............................................................................................20

3.4. Authorized Users ...................................................................................................20

3.5. Amounts Payable by Participants ..........................................................................22

3.6. Participant Obligations...........................................................................................22

3.7. Responsible Agents ................................................................................................25

3.8. Incentive Programs ................................................................................................25

3.9. Limitation of Liability............................................................................................26

 TRADING PLATFORM AND METHODOLOGY ...............................................29

4.1. Contracts Traded and Cleared on EX ....................................................................29

4.2. Participants and Authorized User Access ..............................................................29

4.3. Orders .....................................................................................................................30

4.4. Execution and Confirmation Process .....................................................................31

4.5. Permitted Order Types ...........................................................................................32

4.6. Trade Confirmations ..............................................................................................32

4.7. Errors......................................................................................................................32

4.8. Position Limits and Position Accountability .........................................................33
-ii4.9. Public Data .............................................................................................................34

 CLEARING .............................................................................................................35

5.1. Submission and Acceptance of Trades for Clearing ..............................................35

5.2. Procedures for Deposits and Withdrawals from Accounts ....................................36

5.3. Settlement of Contracts ..........................................................................................37

5.4. Investment and Use of Clearing Participant Account Assets ................................37

5.5. Transfer of Positions ..............................................................................................37

 PARTICIPANT CONDUCT ...................................................................................39

6.1. Prohibited Activities ..............................................................................................39

 RULE ENFORCEMENT ........................................................................................42

7.1. Market Surveillance ...............................................................................................42

7.2. General ...................................................................................................................42

7.3. Inquiries and Investigations ...................................................................................43

7.4. Notice of Charges and Opportunity to Respond ....................................................44

7.5. Settlements .............................................................................................................46

7.6. Disciplinary Panel ..................................................................................................47

7.7. Respondent Review of Evidence ...........................................................................48

7.8. Hearings .................................................................................................................48

7.9. Decision of Disciplinary Panel ..............................................................................50

7.10. Sanctions ................................................................................................................50

7.11. Costs .......................................................................................................................51

7.12. Appeals ..................................................................................................................51

7.13. Summary Imposition of Fines ................................................................................54

7.14. Summary Suspensions and Other Summary Actions ............................................54

7.15. Publication of Disciplinary Action ........................................................................56

 ARBITRATION ......................................................................................................58

8.1. General ...................................................................................................................58

8.2. Penalties .................................................................................................................58

 CONTRACT RULES ..............................................................................................59

9.1. Contract Specifications ..........................................................................................59
1 

DEFINITIONS 

1.1. Defined Terms

Unless otherwise specifically provided in the Rules or the context otherwise 

requires, the terms defined in this Rule 1.1 shall for all purposes of the Rules have the meanings 

specified herein. 

“Account” shall have the meaning ascribed to it in Rule 3.3. 

“Affiliate” an “Affiliate” of, or a Person “Affiliated” with, another Person is a 

Person who, directly or indirectly, Controls, is Controlled by, or is under common Control with, 

such other Person. 

“API” means an application programming interface, which is a set of programming 

code that queries data, parses responses, and sends instructions between one software and another. 

“Appeals Panel” means a panel comprised of 3 individuals from the Regulatory 

Oversight Committee or otherwise as provided in Rule 7.12(e), with one individual acting as 

chairman, which will consider appeals in accordance with Chapter 7. 

“Applicable Law” means, with respect to any Person, any statute, law, regulation, 

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

including without limitation the CEA, CFTC Regulations, and the NFA rules, and any laws relating 

to economic or trade sanctions. 

“Authorized User” means any natural person who is authorized by a Participant to 

place Orders on its behalf, or if the Participant is a natural person, may be such natural person 

itself. 

“Board of Managers” or “Board” means, as the context requires, the Board of 

Managers of the Exchange or the Board of Managers of the Clearinghouse. 

“Business Day” means every day, including a Saturday, Sunday or any weekday 

from 07:00 EST to 22:00 EST, except for days upon which banking institutions in New York, New 

York are required by law, regulation or executive order to be closed. 

“CEA” means the U.S. Commodity Exchange Act as in effect from time to time. 

“CFTC” means the U.S. Commodity Futures Trading Commission and includes 

any successor agency or authority. 

“CFTC Regulation” means any rule, regulation, order or directive and any 

interpretation thereof or guidance thereon issued from time to time by the CFTC. 

“Chief Compliance Officer” means the individual appointed jointly by the Boards 

from time to time to serve as the chief compliance officer of the Exchange and the Clearinghouse. 
2 

The Chief Compliance Officer’s responsibilities include the responsibilities of a chief regulatory 

officer of a designated contract market under Part 38 of the CFTC Regulations and the 

responsibilities of a chief compliance officer of a derivatives clearing organization under Part 39 

of the CFTC Regulations. 

“Chief Executive Officer” means, as the context requires, the individual appointed 

from time to time by the Board of the Exchange to serve as chief executive officer of the Exchange 

or by the Board of the Clearinghouse to serve as chief executive officer or the Clearinghouse. The 

Boards may jointly appoint the same individual to serve as the Chief Executive Officer of both the 

Exchange and Clearinghouse. 

“Chief Financial Officer” means, as the context requires, the individual appointed 

from time to time by the Board of the Exchange to serve as chief financial officer of the Exchange 

or by the Board of the Clearinghouse to serve as chief financial officer or the Clearinghouse. The 

Boards may jointly appoint the same individual to serve as the Chief Financial Officer of both the 

Exchange and Clearinghouse. 

“Chief Operating Officer” means, as the context requires, the individual 

appointed from time to time by the Board of the Exchange to serve as chief operating officer of 

the Exchange or by the Board of the Clearinghouse to serve as chief operating officer or the 

Clearinghouse. The Boards may jointly appoint the same individual to serve as the Chief 

Operating Officer of both the Exchange and Clearinghouse. 

“Chief Risk Officer” means the individual appointed by the Board of the 

Clearinghouse from time to time to serve as chief risk officer of the Clearinghouse. 

“Chief Technology Officer” means, as the context requires, the individual 

appointed from time to time by the Board of the Exchange to serve as chief technology officer of 

the Exchange or by the Board of the Clearinghouse to serve as chief technology officer or the 

Clearinghouse. The Boards may jointly appoint the same individual to serve as the Chief 

Technology Officer of both the Exchange and Clearinghouse. 

“Clearinghouse” means Electron Exchange DCO, LLC, a Delaware limited 

liability company, in its capacity as a derivatives clearing organization registered with the CFTC 

under section 5b of the CEA. 

“Clearing Privileges” means the right of a Participant granted by the 

Clearinghouse to clear transactions in Contracts through the Clearinghouse. 

“Closed Contract Position” shall mean any combination of long and short Open 

Contract Positions that have been offset against each other. 

“Compliance Department” means the Officers and employees of the Exchange 

who are responsible for maintaining the compliance integrity of the Exchange and the 

Clearinghouse. 
3 

“Contract” means any contract that EX may approve from time to time for trading 

on or subject to the Rules of the Exchange and for which transactions in the contract are cleared 

through the Clearinghouse. 

“Contract Rules” means the rules with respect to a particular Contract that govern 

the terms of, and the applicability of these Rules to, trading in such Contract. 

“Control” means the power to exercise a controlling influence over the 

management or policies of a Person. The terms “controlling” or “controlled” shall have meanings 

correlative to the foregoing. 

“Disciplinary Panel” shall have the meaning ascribed to it in Rule 7.6. 

“Entity” means on a specified date any Person other than a natural person (e.g., a 

corporation, partnership, sole proprietorship, or trust). 

“EX” means the Exchange and Clearinghouse, collectively, or to either of them 

individually as the context may require. 

“EX System” means the proprietary order entry and execution system used by the 

Exchange for the placement and execution of Orders or the collection and transmission of 

information relating to Contracts. 

“Exchange” means Electron Exchange DCM, LLC, a Delaware limited liability 

company, in its capacity as a designated contract market registered with the CFTC under section 

5 of the CEA. 

“Expiration Time” means the specified time on a specified date established by the 

Exchange as when Final Settlement of a Contract occurs. 

“Final Settlement” means the process by which all Open Contracts are liquidated 

at a Contract’s Expiration Time. 

“Final Settlement Amount” means the amount, if any, to be paid by the 

Clearinghouse to holders of Open Contract Positions upon Final Settlement as determined by the 

Final Settlement Price and Contract rules. 

“Final Settlement Price” means, with respect to any Contract, the price used in 

Final Settlement for the purpose of calculating Final Settlement Amounts. 

“Fully-Collateralized Contracts” means Contracts with respect to which each 

party’s potential financial obligations are fully paid at the time the Contracts are entered into, and 

with respect to which no further amounts are due, either for margin, settlement amounts or 

otherwise. 

“Incentive Program” means an EX program offering compensation or other 

incentives to Participants that perform certain functions or provide liquidity pursuant to a published 

EX incentive rule. 
4 

“Incentive Program Participant” means any Participant that participates in an EX 

Incentive Program. 

“Limit Order” means an Order in which a Participant (either directly or via an 

Authorized User acting on its behalf) specifies the minimum sale price or maximum purchase price 

of a Contract. 

“Manager” means, as the contest requires, a member of the Board of Managers of 

the Exchange or of the Clearinghouse. The same individuals may serve as Managers on the Boards 

of both the Exchange and the Clearinghouse. 

“Market-Limit Order” means an order to buy or sell a stated amount of a contract 

that is to be executed at the time the order reaches the Exchange. Any unexecuted portion of a 

Market-Limit Order will become a Limit Order within the System if it cannot be executed by the 

Exchange. 

“Match Eligible” means the highest priority bid Order and the highest priority offer 

Order in the EX System when such Orders meet all the necessary parameters to be matched.

“NFA” means the National Futures Association and includes any successor 

organization. 

“Novation” means the substitution of the Clearinghouse as the counterparty on a 

Participant’s transaction in a Contract upon the Clearinghouse’s acceptance of the transaction for 

clearing, whereupon the Clearinghouse becomes the buyer to a Participant that sold the Contract 

and the seller to the Participant that purchased the contract. 

“Officer” shall have the meaning ascribed to it in Rule 2.6. 

“Open Contract Positions” means any combination of long and short Contract 

positions that have not been offset against each other. 

“Order” means any order to buy or sell a Contract on or subject to the Rules of the 

Exchange. 

“Original Margin” means the amount and type of assets required to be on deposit 

with the Clearinghouse pursuant to the applicable Contract Rules to establish a position in the 

relevant Contract. 

“Participant” means any Person that has been granted Trading Privileges and 

Clearing Privileges or otherwise remains subject to the jurisdiction of the Exchange and/or the 

Clearinghouse under these Rules. 

“Participant Agreement” means an agreement among a Participant, the Exchange 

and the Clearinghouse that a Participant must execute as a condition to obtain Trading Privileges 

and Clearing Privileges, in such form as EX may prescribe. 
5 

“Person” means any natural person, or an association, partnership, limited liability 

company, joint venture, trust, corporation, or other form of legal entity. 

“Position Accountability Level” means the size of positions in a Contract above 

which a Participant holding the positions is required to submit reports to the Exchange. 

“Public Manager” means an individual found, by action of the Board of Managers, 

on the record, to satisfy the requirements of a “public director” under Appendix B to Part 38 of the 

CFTC Regulations or conform to any amendments or modifications to the term “public director” 

set forth in CFTC Regulations as the CFTC may adopt from time to time. 

“Purchaser” means the Participant that is the purchaser under a transaction in a 

Contract. The Purchaser is the holder of a long position in such Contract. 

“Regulatory Services Agreement” shall have the meaning ascribed to it in Rule 

2.12. 

“Regulatory Oversight Committee” means the committee of the Board of the 

Exchange constituted in accordance with Rule 2.3. 

“Responsible Agent” shall have the meaning ascribed to it in Rule 3.7(a). 

“Rulebook” means this EX Rulebook. 

“Rules” means the EX rules, as outlined in this Rulebook and as may be amended 

from time to time. 

“Seller” means the Participant that is the seller under a transaction in a Contract. 

The Seller is the holder of a short position in such Contract. 

“Settlement Bank” means a depository approved by EX as an acceptable location 

for depositing and holding Participant funds. 

“Trading Day” means any day on which the Exchange is open and available for 

the trading of Contracts and the Clearinghouse is open and available for the clearing of Contracts. 

“Trading Hours” means, with respect to any Contract, the hours during which the 

Exchange is regularly open for the trading of such Contract. 

“Trading Privileges” means the right granted to a Participant by the Exchange to 

enter Orders to the EX System. 

“Underlying” means the index, asset, rate, risk, measure, instrument, differential, 

indicator, value, contingency, occurrence, or extent of an occurrence that shall determine the 

amount payable or deliverable under a Contract traded on the Exchange. 

“USD” means United States dollar. 

“User ID” shall have the meaning ascribed to it in Rule 4.2. 
6 

1.2. Rules of Interpretation 

For all purposes of these Rules, except as otherwise expressly provided herein or 

unless the context otherwise requires: 

(a) the terms defined in these Rules include the plural as well as the singular 

and vice versa; 

(b) words importing gender include all genders; 

(c) any reference to a Chapter or Rule refers to a Chapter or Rule of these Rules; 

(d) any reference to these Rules refers to these Rules, including all Appendices 

hereto, and the words herein, hereof, thereto, hereto and hereunder and words of similar import 

refer to these Rules and their appendices as a whole and not to any particular Chapter, Rule or any 

other subdivision; 

(e) references to days, months and years refer to calendar days, months and 

years, respectively; 

(f) all references herein to “including” shall be deemed to be followed by the 

words “without limitation”; 

(g) any term used herein that is defined in the CEA or CFTC Regulations shall 

have the meaning assigned to it therein (as such definition may be revised from time to time); and 

(h) all references herein to a time of day refer to local time in The City of New 

York. 

1.3. Effect of Titles 

The titles of these Rules have been inserted for convenience of reference only and 

shall not affect the meaning of these Rules. 

1.4. Amendment of Rules 

New Rules of the Exchange or Clearinghouse may be adopted, and existing Rules 

may be amended or repealed, by the relevant Board of Managers. All such new Rules, amendments 

or repeals shall become effective on such date (after any required filing with, or approval thereof 

by, the CFTC) as may be determined by EX. 

1.5. Contract Rules 

(a) Notwithstanding any provision of these Rules to the contrary, the Contract 

Rules with respect to a particular Contract shall govern the applicability of these Rules to trading 

in such Contract and, in the event of any conflict between these Rules and the Contract Rules, the 

Contract Rules shall govern with respect to trading in the relevant Contract. 
7 

1.6. Rules of the Exchange and Clearinghouse 

The Rules in Chapter 3 and Chapter 5, and any Rule that sets forth a right, obligation 

or authority of the Clearinghouse or of EX constitute Rules of each of the Exchange and the 

Clearinghouse, whereas other Rules constitute Rules of the Exchange alone. 
8 

GOVERNANCE 

2.1. Authority of the Boards of Managers 

(a) The Exchange and Clearinghouse shall each have its own Board of 

Managers. The same individuals may serve as Managers on the Board of each. The Boards will 

have the authority to take actions either collectively or separately with respect to the Exchange and 

the Clearinghouse. 

(b) The Board of Managers of the Exchange and the Board of Managers of 

Clearinghouse each has the power and authority to manage and direct the business and activities, 

respectively, of the Exchange and Clearinghouse, including but not limited to the power to 

establish the standards for Participant eligibility and access to the secure portions of EX’s website, 

the power to amend, adopt, or repeal these Rules, and the power to oversee the business conduct 

of Participants and impose penalties for violation of these Rules. Each Board of Managers shall 

manage the business and affairs, respectively, of the Exchange and Clearinghouse, in accordance 

with Applicable Law, and shall have all power and authority provided to a board of managers 

under Applicable Law. Notwithstanding the foregoing, either Board may, from time to time, 

delegate any or all aspects of the management of the day-to-day business and affairs of, 

respectively, the Exchange or Clearinghouse to a Chief Executive Officer. 

(c) The number of Managers on the Exchange’s Board of Managers shall be 

five, at least 35% of whom shall be Public Managers, or such other percentage of the Board as 

may be required by CFTC Regulations as amended from time to time. Any vote made by the 

Exchange’s Board that results in a tie will require that the Board reconvene to reconsider the matter 

until such tie is broken. The number of Managers on the Exchange’s Board may be increased or 

decreased from time to time by a vote of the Board, provided there are at all times at least five 

Managers. 

(d) The number of Managers on the Clearinghouse’s Board of Managers shall 

be five, at least 35% of whom shall be Public Managers, or such other percentage of the Board as 

may be required by CFTC Regulations as amended from time to time. Any vote made by the 

Clearinghouse’s Board that results in a tie will require that the Board reconvene to reconsider the 

matter until such tie is broken. The number of Managers on the Clearinghouse’s Board may be 

increased or decreased from time to time by a vote of the Board, provided there are at all times at 

least five Managers. 

(e) The Board of Managers of the Exchange has the power and authority to call 

for review, and to affirm, modify, suspend, or overrule any and all decisions and actions of 

committees of the Board, other than the Regulatory Oversight Committee, and Officers of the 

Exchange. 

(f) The Board of Managers of the Clearinghouse has the power and authority 

to call for review, and to affirm, modify, suspend, or overrule any and all decisions and actions of 

committees of the Board and Officers of the Clearinghouse. 
9 

2.2. Eligibility 

No Person may serve as an Officer or Manager of the Exchange or as an Officer or 

Manager of the Clearinghouse, or serve on any disciplinary committee, arbitration panel or 

oversight panel of the Exchange, or serve as the Chief Compliance Officer of EX, if such Person: 

(a) was found within the past three years by a final decision of a self-regulatory 

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

committed a violation of Applicable Law; 

(b) entered into a settlement agreement within the past three years in which any 

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

Applicable Law; 

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

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

probation or owes any portion of a fine imposed pursuant to either: 

(i) a finding by a final decision of a self-regulatory organization, an 

administrative law judge, a court of competent jurisdiction or the CFTC that such person 

committed a disciplinary offense; or 

(ii) a settlement agreement in which any of the findings or, in the 

absence of such findings, any of the acts charged included a violation of Applicable Law; 

(d) is currently subject to an agreement with the CFTC or any self- regulatory 

organization not to apply for registration with the CFTC or membership in any self-regulatory 

organization; 

(e) is currently subject to or has had imposed on him or her within the past three 

years a CFTC registration revocation or suspension in any capacity for any reason, or has been 

convicted within the past three years of any of the felonies listed in section 8a(2)(D)(ii) through 

(iv) of the CEA; 

(f) is currently subject to a denial, suspension or disqualification from serving 

on the disciplinary committee, arbitration panel or governing board of any self-regulatory 

organization as that term is defined in section 3(a)(26) of the Securities Exchange Act of 1934; or 

(g) is subject to a statutory disqualification under sections 8a(2) and 8a(3) of 

the CEA. 

2.3. Exchange Regulatory Oversight Committee 

(a) Unless otherwise determined by the Exchange’s Board of Managers, the 

Exchange’s Board shall initially have one standing committee: the “Regulatory Oversight 

Committee”. The Regulatory Oversight Committee shall have the authority granted to a regulatory 

oversight committee under Applicable Law and by the Board of Managers. The Regulatory 

Oversight Committee shall consist solely of Public Managers, who shall be members of the Board 
10 

of Managers, and shall be appointed from time to time by the chairperson of, and approved by, the 

Board of Managers. The Regulatory Oversight Committee shall oversee the Exchange’s regulatory 

compliance program on behalf of the Board of Managers. It shall make such recommendations to 

the Exchange’s Board of Managers as will, in its judgment, best promote the interests of the 

Exchange, provided that, for the avoidance of doubt, any dissenting opinions from one or more 

members of the Regulatory Oversight Committee shall be reported to the Board of Managers along 

with any such recommendation. The Regulatory Oversight Committee shall also have such other 

powers and perform such other duties as the Exchange’s Board of Managers may delegate to it 

from time to time. 

(b) Without limiting the generality of the foregoing, the Regulatory Oversight 

Committee shall have authority to: (i) monitor the Exchange’s regulatory program for sufficiency, 

effectiveness and independence, (ii) oversee all facets of the Exchange’s regulatory program, 

including trade practice and market surveillance; audits, examinations, and other regulatory 

responsibilities with respect to Participants (including ensuring compliance with financial 

integrity, financial reporting, sales practice, recordkeeping, and other requirements); and the 

conduct of investigations, (iii) review the size and allocation of the regulatory budget and 

resources; and the number, hiring and termination, and compensation of regulatory personnel, (iv) 

supervise EX’s Chief Compliance Officer, who will report directly to the Regulatory Oversight 

Committee, (v) prepare an annual report assessing the Exchange’s self-regulatory program for the 

Board of Managers and the CFTC, which sets forth the regulatory program’s expenses, describes 

its staffing and structure, catalogues disciplinary actions taken during the year, and reviews the 

performance of disciplinary committees and panels, (vi) recommend changes that would ensure 

fair, vigorous, and effective regulation, (vii) review regulatory proposals and advise the Board of 

Managers as to whether and how such changes may impact regulation, and (viii) exercise any other 

functions expressly assigned to it in these Rules or under Applicable Law. 

2.4. Other Exchange Committees 

(a) The Exchange’s Board of Managers may create additional committees or 

panels, for such purposes as may be necessary or advisable, as determined by the Board of 

Managers from time to time. Such committee may assist in the supervision, management, and 

control of the affairs of the Exchange within its particular area of responsibility and shall have the 

scope and authority granted to it by the Board of Managers. Members of each such committee may 

be members of the Board of Managers, Participants, Authorized Users or such other individuals as 

may be qualified to serve on such committee. Any such committee or panel may serve indefinitely 

or for specified, limited periods of time, as determined by the Board of Managers. 

(b) Subject to the authority of the Exchange’s Board of Managers, each 

committee shall determine the manner and form in which its proceedings shall be conducted and 

may act at a meeting or without a meeting, and through a quorum composed of a majority of all 

its members then in office, inclusive of ex officio members. Except as otherwise specifically 

provided in these Rules, the decision of a majority of those present at a meeting at which a quorum 

is present, or the decision of a majority of those participating when at least a quorum participates, 

shall be the decision of the committee. Any or all members of any committee may participate in 

any meeting thereof by telephone or video conference or similar communications equipment by 
11 

means of which all members participating in such meeting can hear and, if applicable, see each 

other. 

(c) In the event of the absence or disqualification of any member of a committee 

from any meeting thereof, each of the following individuals, in the order of their availability, may 

appoint another qualified individual to act at the relevant meeting in the place of any such absent 

or disqualified member: (i) the chairperson of the Exchange’s Board of Managers or (ii) the 

chairperson of the committee in question. 

2.5. Clearinghouse Committees 

(a) The Clearinghouse’s Board of Managers may create one or more Board or 

non-Board committees for such purposes as may be necessary or advisable, as determined by the 

Board of Managers from time to time. Such committee may assist in the supervision, management, 

and control of the affairs of the Clearinghouse within its particular area of responsibility and shall 

have the scope and authority granted to it by the Board of Managers. Members of each such 

committee may be members of the Board of Managers, Participants, Authorized Users or such 

other individuals as may be qualified to serve on such committee. Any such committee or panel 

may serve indefinitely or for specified, limited periods of time, as determined by the 

Clearinghouse’s Board of Managers. 

(b) Subject to the authority of the Clearinghouse’s Board of Managers, each 

committee shall determine the manner and form in which its proceedings shall be conducted and 

may act at a meeting or without a meeting, and through a quorum composed of a majority of all 

its members then in office, inclusive of ex officio members. Except as otherwise specifically 

provided in these Rules, the decision of a majority of those present at a meeting at which a quorum 

is present, or the decision of a majority of those participating when at least a quorum participates, 

shall be the decision of the committee. Any or all members of any committee may participate in 

any meeting thereof by telephone or video conference or similar communications equipment by 

means of which all members participating in such meeting can hear and, if applicable, see each 

other. 

(c) In the event of the absence or disqualification of any member of a committee 

from any meeting thereof, each of the following individuals, in the order of their availability, may 

appoint another qualified individual to act at the relevant meeting in the place of any such absent 

or disqualified member: (i) the chairperson of the Clearinghouse’s Board of Managers or (ii) the 

chairperson of the committee in question. 

2.6. Officers 

(a) The Exchange and the Clearinghouse shall each appoint a Chief Executive 

Officer, Chief Operating Officer, Chief Technology Officer, and Chief Financial Officer; the 

Exchange and Clearinghouse shall jointly appoint a Chief Compliance Officer; the Clearinghouse 

shall appoint a Chief Risk Officer, and the Exchange or Clearinghouse may appoint other officers 

from time to time as determined by their respective Boards of Managers (each individually an 

“Officer”). An individual may hold multiple Officer positions simultaneously, as determined by 

the applicable Board of Managers. 
12 

(b) Officers of the Exchange are appointed and may be dismissed (with or 

without cause) by majority vote of the Exchange’s Board of Managers. 

(c) Officers of the Clearinghouse are appointed and may be dismissed (with or 

without cause) by majority vote of the Clearinghouse’s Board of Managers. 

(d) The Chief Executive Officer of the Exchange may be, but shall not be 

required to be, a Manager of the Exchange. In the absence of the chairman, the Chief Executive 

Officer will perform the chairman’s duties. In the event of a disagreement between the Chief 

Executive Officer and the Board of Managers or the chairman as to an Exchange matter, the 

chairperson and/or Board of Managers shall control. Subject to the direction of the Exchange’s 

Board of Managers, the Chief Executive Officer will manage the overall business of the Exchange. 

(e) The Chief Executive Officer of the Clearinghouse may be, but shall not be 

required to be, a Manager of the Clearinghouse. In the absence of the chairman, the Chief 

Executive Officer will perform the chairman’s duties. In the event of a disagreement between the 

Chief Executive Officer and the Board of Managers or the chairman as to a Clearinghouse matter, 

the chairperson and/or Board of Managers shall control. Subject to the direction of the 

Clearinghouse’s Board of Managers, the Chief Executive Officer will manage the overall business 

of the Clearinghouse. 

(f) The Chief Operating Officer of the Exchange is responsible for managing 

the day-to-day operations of the Exchange, and will keep the minutes of the meetings of the of the 

Exchange’s Board. In the absence of the Chief Executive Officer, the Chief Operating Officer will 

perform the duties of the Exchange’s Chief Executive Officer and such other duties as from time 

to time may be assigned by the Exchange’s Chief Executive Officer or Board of Managers. 

(g) The Chief Operating Officer of the Clearinghouse is responsible for 

managing the day-to-day operations of the Clearinghouse, and will keep the minutes of the 

meetings of the of the Clearinghouse’s Board. In the absence of the Chief Executive Officer, the 

Chief Operating Officer will perform the duties of the Clearinghouse’s Chief Executive Officer 

and such other duties as from time to time may be assigned by the Clearinghouse’s Chief Executive 

Officer or Board of Managers. 

(h) The Chief Compliance Officer of EX must be an individual who (i) is 

knowledgeable about derivative market operations as well as CFTC Regulations and (ii) reports 

directly to the Regulatory Oversight Committee. The Chief Compliance Officer is responsible for 

managing the day-to-day regulatory compliance functions of EX. 

(i) The Chief Risk Officer of the Clearinghouse is responsible for managing 

the day-to-day financial, technical, and operational risk areas of the Clearinghouse and such other 

duties as from time to time may be assigned by the Clearinghouse’s Chief Executive Officer or 

Board of Managers. 

(j) The Chief Technology Officer of the Exchange is responsible for managing 

the day-to-day integrity of the EX System and is responsible for long range technology planning 

and information security and such other duties as from time to time may be assigned by the 

Exchange’s Chief Executive Officer or Board of Managers. 
13 

(k) The Chief Financial Officer of the Exchange is responsible for all funds and 

other financial assets of the Exchange and in general perform all duties incident to the office of 

Chief Financial Officer and such other duties as from time to time may be assigned by the 

Exchange’s Chief Executive Officer or Board of Managers. 

(l) The Chief Financial Officer of the Clearinghouse is responsible for all funds 

and other financial assets of the Clearinghouse and in general perform all duties incident to the 

office of Chief Financial Officer and such other duties as from time to time may be assigned by 

the Clearinghouse’s Chief Executive Officer or Board of Managers. 

2.7. Emergency Rules 

(a) In the event of an Emergency, as described in paragraph (c) of this Rule 2.7, 

the Exchange’s Chief Executive Officer or any individual designated by the Chief Executive 

Officer may place into immediate effect a temporary emergency rule, which may remain in effect 

for up to thirty (30) calendar days, to undertake actions necessary or appropriate to respond to the 

Emergency, provided that, as soon as reasonably practicable within such thirty (30) calendar day 

period, the Exchange’s Board of Managers considers and approves such action and, if it 

disapproves such action, the temporary emergency rule shall be terminated. Should the Emergency 

persist for longer than thirty (30) calendar days, such temporary emergency rules may be extended 

for additional thirty (30) calendar day periods, so long as there is: (1) an affirmative vote of twothirds of the members of the Board of Managers at a meeting at which a quorum is present; or (2) 

there is a written authorization and acknowledgement signed by at least two Officers of the 

Exchange, provided that, as soon as reasonably practicable within such thirty (30) calendar day 

period, the Exchange’s Board of Managers considers and approves such action and, if it 

disapproves such action, the temporary emergency rule shall be terminated. In any event, the 

rationale for invoking such emergency authority should be documented by the Board of Managers 

as soon as reasonably practicable. 

(b) Any temporary emergency rule adopted under this Rule may authorize the 

Exchange to act as the Board of Managers or Officers deem necessary or appropriate to meet the 

Emergency, and those actions may adversely affect the ability to trade on the Exchange or clear 

transactions through the Clearinghouse. Therefore, the possibility of an Emergency, and of the 

Exchange taking emergency action, is one of the risks that Participants should consider when 

deciding whether to trade and clear transactions on EX. 

(c) An “Emergency” may include any of the following circumstances, subject to the 

determination of the Board of Managers: 

(i) any trading activity that constitutes manipulation or attempted 

manipulation of the Exchange or Clearinghouse; 

(ii) any actual, attempted, or threatened corner, squeeze, or undue 

concentration of positions; 

(iii) any circumstance that may materially affect the performance of the 

Contracts traded on or cleared through EX, including failure of the payment system 
14 

or bankruptcy or insolvency of any participants, Settlement Bank or other bank or 

custodian; 

(iv) any action taken by the United States, any foreign government, any 

state or local governmental body, any other contract market or board of trade, or 

any other exchange, market, facility, or trade association (foreign or domestic) that 

may have a direct and material impact on trading on or clearing through EX; 

(v) any circumstances that may have a severe, adverse impact upon the 

functions or operation of EX including, for example, natural disasters such as fire 

or flood, terrorist acts such as bomb threats, physical plant breakdowns such as 

plumbing, heating, or air conditioning problems, system breakdowns such as 

power, telephony, cable, trading systems, or computer systems failures or 

interruptions to communications, the network, or the Internet; 

(vi) the imposition of any injunction or other restraint by any 

government agency, court, or arbitrator that may affect the ability of a Participant 

to perform on Contracts; 

(vii) any circumstance in which it appears that a Participant or any other 

person is in such operational condition, or is conducting business in such a manner, 

that such person cannot be permitted to continue in business without jeopardizing 

the safety of Participants, the Exchange or the Clearinghouse; and 

(viii) any other unusual, unforeseeable, and adverse circumstance which, 

in the opinion of the governing board, 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 Contracts traded or cleared through on EX. 

(d) If deemed necessary to mitigate perceived market disruptions caused by an 

Emergency, an Exchange official authorized to do so may suspend trading on the Exchange and 

clearing through the Clearinghouse during the duration of the emergency or take any other action 

that the official thinks is necessary or appropriate. The official will order an end to the action taken 

in response to the emergency as soon as the official determines that the emergency has sufficiently 

abated to permit EX to function properly. 

(e) The Exchange will make every effort practicable to notify the Director of the 

Division of Market Oversight of the CFTC, the Director’s delegates, and/or other persons 

designated by the CFTC’s Regulations that EX intends to implement, modify, or terminate a 

temporary emergency rule pursuant to Rule 2.7(a) or an action in response to an emergency 

pursuant to Rule 2.7(d) prior to the implementation, modification, or termination of the rule or 

action. If it is not possible to notify the CFTC prior to the implementation, modification, or 

termination of the rule or action, EX will notify the CFTC of the implementation, modification, or 

termination of the rule or action at the earliest possible time, and in no event more than 24 hours 

after implementation, modification, or termination. 
15 

2.8. Restrictions on Certain Persons Who Possess Material, Non-Public 

Information 

(a) No Officer, Manager, employee, or agent of the Exchange or 

Clearinghouse, and no member of any committee established by the Board of Managers of the 

Exchange or the Board of Managers of the Clearinghouse, shall use or disclose any material, nonpublic information obtained in connection with the performance of his or her official duties, for 

any purpose other than the performance of his or her official duties. 

(b) No Officer, Manager, employee or agent of the Exchange or Clearinghouse, 

and no member of any committee established by the Board of Managers of the Exchange or the 

Board of Managers of the Clearinghouse, shall disclose to any other Person material, non-public 

information, however obtained (including, without limitation, material non-public information 

obtained by an employee or agent in connection with such employee or agent’s employment or 

agency, as the case may be), if such Person could reasonably expect that such information might 

assist another Person in trading any Contract or related contract or financial instrument. 

(c) No Officer or employee of the Exchange or Clearinghouse shall trade in any 

Contract. Any Manager that is affiliated with a Participant shall, when and to the extent necessary 

or appropriate, recuse himself or herself from any Board deliberations on any matter related to the 

relevant Participant, or such Participant’s trading activity. 

(d) For purposes of this Rule 2.8, the terms “material information,” “non-public 

information” and “commodity interest” shall have the meanings ascribed to them in CFTC 

Regulation 1.59. 

2.9. Conflicts of Interest 

The Exchange is subject to and will ensure compliance with CFTC Regulation 1.69, 

which prohibits members of its Board of Managers or any disciplinary or oversight committee or 

subcommittee (including a panel) from taking part in any deliberations or voting on any matter in 

which members of the Board of Managers, committee, or subcommittee member have an interest 

or have a relationship with a named party in interest. CFTC Regulation 1.69 also requires 

disclosure by members of the Board of Managers, committee, or subcommittee (including a panel) 

of interests and relationships in certain circumstances. Consequently, members of the Exchange’s 

Board of Managers or an Exchange committee, and subcommittee members shall not participate 

in the deliberations regarding, or vote on, any matter in which members of the Board of Managers, 

committee, or subcommittee (including a panel) have an interest or have a relationship with a 

named party in interest, all as defined in CFTC Regulation 1.69, and shall disclose such interests 

in accordance with, and otherwise comply with, CFTC Regulation 1.69. 

2.10. Indemnification 

(a) The Exchange will indemnify to the full extent authorized by law any 

person who was or is a party or is threatened to be made a party to any threatened, pending, or 

completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative in 

nature, by reason of the fact that such person is or was a Manager, Officer, employee, or agent of 

the Exchange or is or was serving at the request of the Exchange as a Manager, Officer, employee, 
16 

or agent of the Exchange against expenses, including attorneys’ fees, judgments, fines, and 

amounts paid in connection with such action, suit, or proceeding. Such indemnification shall not 

be deemed exclusive of any other rights to which a person may be entitled under any agreement 

or as a matter of law or otherwise. The Exchange may purchase and maintain insurance on behalf 

of any person who is or was a Manager, Officer, employee, or agent of the Exchange against any 

liability asserted against such person and incurred by such person in any such capacity, or arising 

out of such person’s status as such, whether or not the Exchange would have the power to 

indemnify such person against such liability under the provisions of this Rule 2.10(a). However, 

no person shall be indemnified from liability for fraud, bad faith, willful misconduct, or gross 

negligence. Further, no person shall be indemnified against a civil penalty imposed by the CFTC 

under section 6b of the CEA. 

(b) The Clearinghouse will indemnify to the full extent authorized by law any 

person who was or is a party or is threatened to be made a party to any threatened, pending, or 

completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative in 

nature, by reason of the fact that such person is or was a Manager, Officer, employee, or agent of 

the Clearinghouse or is or was serving at the request of the Exchange as a Manager, Officer, 

employee, or agent of the Clearinghouse against expenses, including attorneys’ fees, judgments, 

fines, and amounts paid in connection with such action, suit, or proceeding. Such indemnification 

shall not be deemed exclusive of any other rights to which a person may be entitled under any 

agreement or as a matter of law or otherwise. The Clearinghouse may purchase and maintain 

insurance on behalf of any person who is or was a Manager, Officer, employee, or agent of the 

Clearinghouse against any liability asserted against such person and incurred by such person in 

any such capacity, or arising out of such person’s status as such, whether or not the Clearinghouse 

would have the power to indemnify such person against such liability under the provisions of this 

Rule 2.10(b). However, no person shall be indemnified from liability for fraud, bad faith, willful 

misconduct, or gross negligence. Further, no person shall be indemnified against a civil penalty 

imposed by the CFTC under section 6b of the CEA. 

2.11. Regulatory Cooperation 

(a) EX may from time to time enter into such agreements with domestic or 

foreign self-regulatory organizations, associations, boards of trade and their respective regulators 

providing for the exchange of information and other forms of mutual assistance for financial 

surveillance, routine audits, market surveillance, investigative, enforcement and other regulatory 

purposes as EX may consider necessary or appropriate or as the CFTC may require. 

(b) The Chief Executive Officer of the Exchange or Clearinghouse (as 

applicable) or their delegate is authorized to provide information to an exchange or clearing 

organization that is a party to an information sharing agreement with EX, in accordance with the 

terms and conditions of such agreement. 

(c) All information received by EX with respect to any information sharing 

agreement, shall be held in confidence by EX and shall not be provided to any non-regulatory 

departments or divisions of the Exchange or Clearinghouse or to any other person (including to 

any Affiliate), except as follows: 
17 

(i) to governmental authorities responsible for regulating financial 

instruments in the home jurisdiction of the requesting information sharing agreement 

member, 

(ii) pursuant to an order of a court or other lawful process, or 

(iii) as it may be necessary for conducting any investigation or 

disciplinary proceeding. 

2.12. Regulatory Services Agreement with the NFA 

The Exchange has contracted with the NFA to provide certain regulatory services 

to the Exchange pursuant to a regulatory services agreement (the “Regulatory Services 

Agreement”). In accordance with the Regulatory Services Agreement, the NFA may perform 

certain surveillance, investigative, and regulatory functions under the Rules and the Exchange may 

provide information to the NFA in connection with the performance by the NFA of those functions. 

Without limitation of the foregoing, any of the powers or functions of the Exchange under these 

Rules may be delegated to the NFA pursuant to the Regulatory Services Agreement in such manner 

and on such terms as the Exchange and the NFA may mutually agree. 
18 

PARTICIPANTS 

3.1. Participant Eligibility 

(a) To be eligible to trade Contracts on the Exchange and clear transactions in 

Contracts through the Clearinghouse, Participants must: (i) satisfy all requirements generally 

applicable to Participants (and as applicable, their Authorized Users) under these Rules; (ii) satisfy 

such financial criteria as may be prescribed by EX from time to time; (iii) have sufficient technical 

and operational capabilities to fulfill any other obligations applicable to Participants or their 

Authorized Users as may from time to time be required by EX; and (iv) satisfy such other 

requirements or criteria as may from time to time be adopted by EX. 

(b) If the Person applying to become a Participant to open an Account is not a 

natural person, the Participant must satisfy the following criteria, and must represent to EX that it 

does so: 

(i) It is duly organized, validly existing and in good standing under the 

laws of the jurisdiction in which it is organized and has all licenses necessary to carry on 

its business as now being conducted; 

(ii) It has the legal authority and is duly authorized and empowered to 

become a Participant and to effect transactions in Contracts on the Exchange and clear 

transactions in Contracts through the Clearinghouse; 

(iii) It is not subject to a statutory disqualification under section 8a(2) or 

8a(3) of the CEA; 

(iv) It has a mechanism that is acceptable for transferring funds to and 

receiving funds from the Participant’s Account; 

(v) It has appointed one or more Authorized User(s) pursuant to Rule 

3.4; and 

(vi) It satisfies such other requirements or criteria as may from time to 

time be adopted by EX. 

(c) If the Person applying to become a Participant to open an Account is a 

natural person, the Participant must satisfy the following criteria and represent that it: 

(i) Is at least 18 years of age and has attained the age of majority in 

their state and/or country of residence; 

(ii) Is not subject to a statutory disqualification under sections 8a(2) or 

8a(3) of the CEA; 

(iii) Has a mechanism that is acceptable for transferring funds to and 

receiving funds from the Participant’s Account; and 
19 

(iv) Satisfies such other requirements or criteria as may from time to 

time be adopted by EX. 

(d) Notwithstanding anything in the foregoing paragraphs (c) or (d) to the 

contrary, in considering any applicant for status as a Participant or an Authorized User of a 

Participant, EX may request additional information, or employ such other means that it deems 

desirable or appropriate, to ascertain relevant facts bearing on the applicant’s qualifications; and 

(e) EX in its sole discretion may deny (or may condition) the grant of Trading 

Privileges and/or Clearing Privileges of any Participant or any Authorized User if such Person is 

unable satisfactorily to demonstrate a capacity to adhere to all applicable Rules and CFTC 

Regulations, or for such other causes as EX may determine from time to time. 

(f) EX in its sole discretion may condition or revoke a Participant’s Trading 

Privileges and/or Clearing Privileges or, in the case of an Authorized User, condition or revoke its 

ability to trade and clear on behalf of a Participant, if any of the circumstances specified in the 

preceding paragraph (e) exist with respect to such Participant or Authorized User, or such 

Participant or Authorized User: 

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

Privileges and/or Clearing Privileges or status as an Authorized User; 

(ii) fails to meet any condition placed by EX on such Trading Privileges 

and/or Clearing Privileges or status as an Authorized User; 

(iii) is obligated to submit a notice to EX under Rule 3.6(h); or 

(iv) violates any agreement with EX, any Rule or any provision of 

Applicable Law. 

(g) Futures commission merchants or other brokers or intermediaries shall not 

be permitted to submit trades in Contracts for execution on the Exchange on behalf of customers 

or to submit or clear trades in Contracts through the Clearinghouse on behalf of customers. Only 

Participants and Authorized Users authorized to execute trades in Contracts on behalf of 

Participants may submit Orders for transactions in Contracts, and only subject to the conditions 

and requirements set forth in the Rules. 

3.2. Participant Applications 

(a) Each application to become a Participant shall be in such form as may from 

time to time be prescribed by EX. Each applicant to become a Participant shall promptly update 

the application materials if any of the information provided therein becomes inaccurate or 

incomplete. EX shall act upon, and approve or disapprove, any such application without 

unreasonable delay. 

(b) Each applicant to become a Participant shall: 
20 

(i) submit to EX executed forms of the Participant Agreement and all 

application documents; and 

(ii) agree in written or electronic form to abide by these Rules and 

Applicable Law. 

(c) Upon EX’s approval of an applicant’s Participant application and upon 

EX’s confirmation that the initial fee payable by the applicant has been paid to EX, the applicant 

shall become a Participant and obtain Trading Privileges and Clearing Privileges. 

(d) If EX denies an applicant’s Participant application, the applicant may 

appeal the decision by filing with the Compliance Department a petition for review of such 

application denial or trading limitation. The petition should describe in detail the reasons why the 

application should be granted. The petition must be filed within thirty (30) Business Days from 

the date upon which notice of the denial of the applicant’s Participant application was provided by 

EX. The decision of the Compliance Department will be final. An applicant whose Participant 

application has been denied by the Compliance Department will not be eligible for reapplication 

during the six months immediately following such denial. 

3.3. Participant Accounts 

(a) The Clearinghouse will establish an account on its books and records in the 

name and on behalf of the Participant and may, upon the instruction of the Participant and subject 

to the consent of EX, establish multiple accounts in the name and on behalf of the Participant (each 

such Account and all such Accounts collectively referred to herein as the “Account”). The 

Participant will be responsible for all Orders, transactions and other activity in or through its 

Account and for all amounts due with respect to any such Orders, transactions or other activity, 

including but not limited to required amounts of margin and premiums. Each Participant and its 

Authorized Users shall have the right to access the EX System, including the right to place Orders 

for each of such Participant’s Account(s). 

(b) In the event that EX determines that Participants may be permitted to 

maintain more than one Account, as described in 3.3(a), each Participant shall designate each of 

its Authorized Users to trade any or all of its Accounts, provided that a Participant shall at all times 

be responsible for all of its Accounts as set forth under these Rules and provided further that EX 

may treat all of a Participant’s Accounts as a single Account for purposes of determining the 

Participant’s compliance with the Rules and the Participant’s obligations to EX. 

(c) By virtue of obtaining Trading Privileges, a Participant shall not obtain any 

equity or other interest in EX, including voting rights or rights to receive any dividends or other 

distributions, whether arising from a dissolution, merger, consolidation involving EX or otherwise. 

3.4. Authorized Users 

(a) Each Participant that is an Entity shall be required to appoint one or more 

individuals to act as its Authorized User or Authorized Users, as applicable. Participants that are 

natural persons may act as their own Authorized User or may appoint a third party as his or her 

Authorized User, pursuant to a power of attorney or other instrument, in a form prescribed or 
21 

approved by EX, providing such third party with discretionary or non-discretionary trading 

authority with respect to the Participant’s Account. The third party to which an individual 

Participant grants trading authority may be a related person of the Participant, or an unaffiliated 

party. 

(b) Each Authorized User with discretionary trading authority with respect to 

the Participant’s Account (i) must be a natural person, (ii) may have Trading Privileges with 

respect to the Accounts of more than one Participant, provided that such Authorized User uses 

separate User IDs for each such Account, (iii) must allocate Contracts executed for such multiple 

accounts in a fair and equitable manner so that no Account or group of accounts consistently 

receives favorable or unfavorable treatment over time, and (iv) must satisfy any other requirements 

as may be prescribed by EX from time to time. 

(c) Without limiting the foregoing, each Authorized User must consent, in a 

form satisfactory to EX, to abide by the Rules and Applicable Law prior to accessing the EX 

System, and each Participant will ensure on an ongoing basis that (i) none of its Authorized Users 

is subject to a disqualification pursuant to any Applicable Law (unless an appropriate exemption 

has been obtained with respect thereto), (ii) each of its Authorized Users will be technically 

proficient, (iii) each of its Authorized Users will conduct its business in a fair and equitable 

manner, and (iv) each of its Authorized Users will conduct its business in accordance with the 

Rules. 

(d) EX may withdraw or suspend the registration of any Authorized User if 

EX determines that: 

(i) an Authorized User has failed, or has caused the Participant to fail, 

to comply with the Rules of EX; 

(ii) an Authorized User is not properly performing the responsibilities 

of an authorized representative of a Participant; 

(iii) an Authorized User has failed to comply with the conditions set 

forth in paragraph (c) of this Rule; or 

(iv) it is in the best interests of maintaining a fair and orderly market to 

do so. 

(e) If the Participant withdraws or EX suspends the registration of any Authorized 

User, the Participant must ensure that such Authorized User does not submit any quotes or Orders 

into the EX System. 

(f) The registration of an Authorized User will be withdrawn upon the written request 

of either the Authorized User or the Participant for which an Authorized User is registered. Such 

written request shall be submitted in a manner prescribed by EX. Until such written request is 

received and processed by EX, or an Authorized User’s registration is suspended or withdrawn 

pursuant to paragraph (d) of this Rule, a Participant will be responsible for all activity of such 

Authorized User(s) related to EX. 
22 

3.5. Amounts Payable by Participants 

(a) EX shall have the sole authority to establish the amounts of any fees to be 

paid by Participants, and the timing of payment of such fees, and such fees shall be paid when due. 

In addition, EX shall have the sole authority to impose minimum withdrawal amounts, fees for 

inactivity or other fees as it deems appropriate. EX may post an updated fee schedule on its website 

from time to time. Participants are deemed to have notice of any changes made to such fee schedule 

that are posted on the EX website. 

(b) Unless EX, at its discretion, elects not to do so in any instance, EX will 

withdraw the relevant fees directly from each Participant’s Account. The Participant agrees to pay, 

and authorizes EX to withdraw from its Account: (a) any fees or charges associated with any 

transactions executed or cleared on EX for its Account at such rate as is posted on EX’s website; 

(b) any costs or expenses incurred by EX in connection with its Account, including, but not limited 

to, any non-sufficient funds charges or charges imposed by EX’s settlement bank; (c) any other 

charges agreed upon between the Participant and EX; and (d) any other fines or penalties that may 

be imposed by EX from time to time. 

(c) If a Participant fails to pay when due any EX fees or other amounts due by 

such Participant, and such payment obligation remains unsatisfied for thirty (30) Business Days 

after its due date, EX as it deems necessary or appropriate, may suspend, revoke, limit, condition, 

restrict or qualify the Trading Privileges and/or Clearing Privileges of such Participant and its 

Authorized Users. Moreover, EX may submit any amounts owed by a Participant in excess of 

thirty (30) Business Days to a third-party collection agency. EX reserves the right to pursue any 

and all allowable legal action, whether criminal or civil, against the Participant to recover losses 

incurred as the result of fraud or misconduct, including attorney’s fees and other legal expenses, 

and any other remedies permitted by law. 

3.6. Participant Obligations 

(a) By accessing, or entering any Order into, the EX System, and without any 

need for any further action, undertaking or agreement, a Participant and its Authorized Users agree 

(i) to be bound by, and comply with, the Rules and Applicable Law, and (ii) to submit to the 

jurisdiction of EX with respect to any and all matters arising from, related to, or in connection 

with, the status, actions or omissions of such Participant and its Authorized Users. Any Participant 

and its Authorized Users whose Trading Privileges and/or Clearing Privileges are revoked or 

terminated shall remain bound by the Rules and Applicable Law and subject to the jurisdiction of 

EX with respect to any and all matters arising from, related to, or in connection with, the status, 

actions or omissions of such Participant and its Authorized Users prior to such revocation or 

termination. 

(b) Each Participant shall be required to satisfy such minimum financial 

requirements as may be established from time to time by the Exchange or the Clearinghouse. 

(c) All Participant communications with EX, including keystrokes entered by 

the Participant on EX, emails and telephone calls, may be recorded without further notice, and 

such recordings may be provided to regulatory authorities (subject to and in compliance with 
23 

Applicable Laws) and used as evidence in the event of any dispute. Such recordings will be and 

remain the sole property of EX and will, in the absence of manifest error, be accepted by the 

Participant as evidence of the communications so recorded. The period of retention of such 

recordings shall be as required by Applicable Law or any such longer period as may be determined 

by EX in its sole discretion. Further, such recordings may be used for EX’s own purposes 

(including, without limitation, for purposes of monitoring levels of activities in categories of 

transactions) and not for the Participant’s benefit. 

(d) Each Participant and any Authorized User(s) thereof must also cooperate 

promptly and fully with EX, its agents, and/or the CFTC in any investigation, call for information, 

inquiry, audit, examination, or proceeding. Such cooperation shall include providing EX with 

access to information on the activities of such Participant and/or Authorized User in any referenced 

or related market that provides the underlying prices for any EX Contract or that is otherwise 

related to the pricing or trading of any Contract. 

(e) Each Participant consents to allow EX to provide all information EX has in 

its possession or control regarding the Participant, including the Participant’s trading activity, to 

the CFTC or any other regulatory agency, law enforcement authority, or judicial tribunal, including 

(as may be required by information sharing agreements or other contractual, regulatory, or legal 

provisions) foreign regulatory or self-regulatory bodies, law enforcement authorities, or judicial 

tribunals. 

(f) The Rulebook, all amendments thereto and notices and policies thereunder, 

as well as the specifications for the Contracts from time to time traded and cleared on EX, will be 

publicly available on the EX website. Each Participant and each Participant’s Authorized Users(s) 

will be automatically bound by any notices, interpretations, guidance, Rule changes or other 

material posted by EX on its website, without any further action by the Participant or Authorized 

User(s). Each Participant and Authorized User is required to review the “Notices” section of the 

EX website to make itself aware of material changes to these Rules or other notices that may affect 

your rights and obligations as a Participant of EX. As mentioned above, EX shall publish a notice 

with respect to each addition to, modification of, or clarification of, the Rules, any action to 

implement any Rules, or any notices, interpretations or guidance, in a form and manner that is 

reasonably designed to enable each Participant to become aware of and familiar with, and to 

implement any necessary preparatory measures to be taken by it with respect to, such material, 

prior to the effective date thereof; provided that any failure of EX to so publish a notice shall not 

affect the effectiveness of the material in question. For purposes of publication in accordance with 

the first sentence of this Rule 3.6, it shall be sufficient (without limiting the discretion of EX as to 

any other reasonable means of communication) if a notice is published on EX’s website. 

(g) Each Participant must provide EX with the current electronic mail address 

for each of its Authorized Users and immediately (and in any event within 24 hours) update each 

such address whenever it changes. All communications between EX and the Participant (and its 

Authorized Users) will be transmitted by email and/or posted on the EX website. 

(h) Each Participant must immediately notify EX in writing upon becoming 

aware: 
24 

(i) that the Participant, any of the Participant’s officers, employees or 

any of the Participant’s Authorized Users has had access or trading privileges or clearing 

privileges suspended, or participant status is denied, in any commodity, futures, securities, 

or swaps exchange, or any other trading platform or regulatory self-regulatory agency; 

(ii) that the Participant, any of the Participant’s officers, employees or 

Authorized Users has been convicted of, pled guilty or no contest to, or entered a plea 

agreement to, any felony in any domestic, foreign or military court; 

(iii) that the Participant, any of the Participant’s officers, employees or 

Authorized Users has been convicted of, plead guilty or no contest to, or entered a plea 

agreement to a misdemeanor in any domestic, foreign, or military court which involves: 

(1) embezzlement, theft, extortion, fraud, fraudulent conversion, 

forgery, tax evasion, counterfeiting, false pretenses, bribery, gambling, 

racketeering, or misappropriation of funds, securities, or properties; or 

(2) any transaction in or advice concerning swaps, futures, options on 

futures, leveraged transactions or securities; 

(iv) that the Participant, any of the Participant’s officers, employees or 

Authorized Users has been subject to, or associated with a firm that was subject to 

regulatory proceedings before any governmental or regulatory agency; 

(v) that the Participant, any of the Participant’s officers, employees or 

Authorized Users is currently a party to any investigation or proceeding, the resolution of 

which could result in an event described in Rule 3.6(h)(i)-(iv); 

(vi) of any other material change in any information contained in the 

Participant’s application to become a Participant on EX; 

(vii) of becoming subject to early warning reporting under CFTC 

Regulation 1.12; 

(viii) of becoming the subject of a bankruptcy petition, receivership 

proceeding, or the equivalent, or being unable to meet any financial obligation as it 

becomes due; or 

(ix) of information that concerns any financial or business developments 

that may materially affect the Participant’s ability to continue to comply with any of the 

requirements to be a Participant. 

Upon the receipt of such notice, EX may take any action it determines to be appropriate, in its sole 

discretion with respect to such Participant, including but not limited to the revocation of such 

Participant’s Trading Privileges and/or Clearing Privileges. 

(i) Each Participant must diligently supervise all activities of the Participant’s 

employees and/or agents, including all Authorized Users, relating to transactions effected on EX. 
25 

Any violation of these Rules by any employee of a Participant may constitute a violation of the 

Rules by such Participant. 

(j) A Participant is not required to engage in trading activity or maintain a 

minimum balance in its account after initial funding, subject, however to a Participant obligation 

to have sufficient funds on deposit to clear its transactions in Contracts as provided in the Rules in 

Chapter 5. Notwithstanding the foregoing, EX has the authority to impose minimum withdrawal 

amounts or fees for inactivity, which will, if imposed, be posted on the EX website from time to 

time. 

3.7. Responsible Agents 

(a) Each Participant that is an Entity shall at all times have at least one 

employee or agent (each, a “Responsible Agent”) designated as its administrator with respect to 

the use of the EX System by the Authorized Users of such Participant. Each Participant that is a 

natural person shall serve as its own Responsible Agent. EX may prescribe such qualification 

standards for Responsible Agents of Participants that are entities as it may from time to time 

determine necessary or advisable. Among other things, each Responsible Agent shall (i) have full 

control over access to the EX System by the Participant (including its Authorized Users) 

represented by such Responsible Agent and (ii) be able to access, and, if required, modify and 

withdraw, any and all Orders placed, or purported to be placed, by the Authorized Users of such 

Participant. The Responsible Agent(s) of any Participant shall also be solely responsible for any 

and all communications between EX and such Participant, and any and all notices or other 

communications sent to such Responsible Agent(s) by EX shall be binding on such Participant. 

Each Participant shall notify EX promptly of any change regarding any of its Responsible Agents. 

(b) Each Participant shall (i) be solely responsible for controlling and 

monitoring the use of all User IDs and passwords to access the EX System (issued to its Authorized 

Users and Responsible Agent(s) by EX, (i) provide such User IDs and passwords only to its 

Authorized Uses and Responsible Agent(s), and (iii) shall notify EX promptly upon becoming 

aware of any unauthorized disclosure or use of the User IDs or passwords or access to EX or of 

any other reason for deactivating User IDs or passwords. Each Participant, on behalf of itself and 

its Authorized Users, shall be bound by any actions taken by use of its User IDs and passwords, 

other than any such actions resulting from the fault or negligence of EX, including the execution 

of transactions, whether or not such actions were authorized by such Participant. 

(c) Notwithstanding anything to the contrary in Rule 3.7(b), each Authorized 

User shall have his or her own unique User IDs and passwords that may be used only by such 

Authorized User and solely for the purpose of submitting Orders in respect of the Account for 

which the Authorized User has Trading Privileges. 

3.8. Incentive Programs 

EX may from time to time adopt one or more programs under which one or more 

Participants or Authorized Users may be designated as an Incentive Program Participant with 

respect to one or more Contracts and may be granted certain benefits. Any such program may 

provide for any or all of the following: 
26 

(a) qualifications, including any minimum net capital requirements, that any 

such Incentive Program Participant must satisfy; 

(b) the procedure by which Participants or Authorized Users may seek and 

receive designation as an Incentive Program Participant; 

(c) the obligations of such Incentive Program Participant; and 

(d) the benefits accruing to such Incentive Program Participant, including 

priority in the execution of transactions effected by Participants or Authorized Users in their 

capacity as Incentive Program Participants, reduced transaction fees or the receipt of compensatory 

payments from EX. 

3.9. Limitation of Liability 

EXCEPT AS OTHERWISE PROVIDED IN THESE RULES, AND EXCEPT IN 

INSTANCES WHERE THERE HAS BEEN A FINDING OF WILLFUL MISCONDUCT OR 

GROSS NEGLIGENCE, IN WHICH CASE THE PARTY FOUND TO HAVE ENGAGED IN 

SUCH CONDUCT CANNOT AVAIL ITSELF OF THE PROTECTIONS IN THIS RULE 3.9, 

NEITHER THE EXCHANGE, THE CLEARINGHOUSE, THEIR AFFILIATES OR ANY 

CONTRACTORS OR SUB-CONTRACTORS PROVIDING SERVICES TO EX, NOR ANY OF 

THEIR RESPECTIVE MANAGERS, DIRECTORS, OFFICERS, COMMITTEE MEMBERS, 

EMPLOYEES OR AGENTS, SHALL BE LIABLE TO ANY OTHER PERSON, INCLUDING 

ANY PARTICIPANT OR PERSON ASSOCIATED WITH A PARTICIPANT (INCLUDING 

ANY AUTHORIZED USERS), FOR ANY LOSSES, DAMAGES, COSTS OR EXPENSES 

(INCLUDING LOSS OF PROFITS, LOSS OF USE, DIRECT, INDIRECT, INCIDENTAL OR 

CONSEQUENTIAL DAMAGES), ARISING FROM (A) ANY FAILURE OR MALFUNCTION 

OF THE EX SYSTEM OR ANY EXCHANGE SERVICES OR CLEARINGHOUSE SERVICES 

OR FACILITIES USED TO SUPPORT THE EX SYSTEM, OR (B) ANY FAULT IN 

DELIVERY, DELAY, OMISSION, SUSPENSION, INACCURACY OR TERMINATION, OR 

ANY OTHER CAUSE, IN CONNECTION WITH THE FURNISHING, PERFORMANCE, 

MAINTENANCE, USE OF OR INABILITY TO USE ALL OR ANY PART OF THE EX 

SYSTEM OR ANY EXCHANGE SERVICES OR CLEARINGHOUSE SERVICES OR 

FACILITIES USED TO SUPPORT THE EX SYSTEM. THE FOREGOING SHALL APPLY 

REGARDLESS OF WHETHER A CLAIM ARISES IN CONTRACT, TORT, NEGLIGENCE, 

STRICT LIABILITY OR OTHERWISE. FURTHERMORE, THERE SHALL BE NO 

LIABILITY BASED UPON, OR IN CONNECTION WITH, ANY QUOTE OR OTHER 

INFORMATION IF NO CORRELATIVE PURCHASE OR SALE OF A CONTRACT IS MADE, 

AND IF A CORRELATIVE PURCHASE OR SALE OF A CONTRACT IS MADE, ANY 

LIABILITY SHALL BE LIMITED IN AMOUNT TO THE AGGREGATE PRICE OF THE 

CONTRACTS PURCHASED OR SOLD. 

THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OR 

REPRESENTATIONS PROVIDED BY THE EXCHANGE OR CLEARINGHNOUSE, NOR BY 

THEIR AFFILIATES OR ANY CONTRACTORS OR SUBCONTRACTORS PROVIDING 

SERVICES TO EX, RELATING TO THE EX SYSTEM OR ANY EXCHANGE SERVICES OR 

CLEARINGHOUSE SERVICES OR FACILITIES USED TO SUPPORT THE EX SYSTEM, 
27 

INCLUDING WARRANTIES OF MERCHANTABILITY AND WARRANTIES OF FITNESS 

FOR A PARTICULAR PURPOSE OR USE. THE SERVICES OF THE EXCHANGE AND THE 

CLEARINGHOUSE ARE BEING PROVIDED ON AN “AS IS” BASIS AT THE SOLE RISK 

OF THE PARTICIPANT AND ANY PERSON ASSOCIATED WITH THE PARTICIPANT 

(INCLUDING ANY AUTHORIZED USER). NEITHER THE EXCHANGE, THE 

CLEARINGHOUSE, ANY OF THEIR AFFILIATES OR ANY CONTRACTORS OR SUBCONTRACTORS PROVIDING SERVICES TO EX, NOR ANY OF THEIR RESPECTIVE 

MANAGERS, DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, MAKE ANY 

WARRANTY WITH RESPECT TO, AND NO SUCH PARTY SHALL HAVE ANY LIABILITY 

TO ANY PARTICIPANT OR ANY PERSON ASSOCIATED WITH A PARTICIPANT 

(INCLUDING ANY AUTHORIZED USER) FOR, THE ACCURACY, TIMELINESS, 

COMPLETENESS, RELIABILITY, PERFORMANCE OR CONTINUED AVAILABILITY OF 

THE EX SYSTEM OR THE EXCHANGE OR THE CLEARINGHOUSE, DELAYS, 

OMISSIONS OR INTERRUPTIONS IN EXCHANGE SERVICES OR CLEARINGHOUSE 

SERVICES OR THE CREDITWORTHINESS OF ANY OTHER PARTICIPANT OR ANY 

PERSON ASSOCIATED WITH A PARTICIPANT (INCLUDING ANY AUTHORIZED 

USER). THE EXCHANGE AND CLEARINGHOUSE SHALL HAVE NO DUTY OR 

OBLIGATION TO VERIFY ANY INFORMATION DISPLAYED ON THE EX SYSTEM OR 

OTHERWISE. EACH PARTICIPANT AND EACH PERSON ASSOCIATED WITH A 

PARTICIPANT (INCLUDING ANY AUTHORIZED USER) ACKNOWLEDGES AND 

AGREES THAT THE EXCHANGE, THE CLEARINGHOUSE, THEIR AFFILIATES AND 

ANY CONTRACTORS OR SUB-CONTRACTORS PROVIDING SERVICES TO EX DOES 

NOT AND SHALL NOT SERVE AS THE PRIMARY BASIS FOR ANY DECISIONS MADE 

BY SUCH PARTICIPANT OR PERSON ASSOCIATED WITH A PARTICIPANT 

(INCLUDING ANY AUTHORIZED USER), AS THE CASE MAY BE, AND IS NOT AN 

ADVISOR OR FIDUCIARY OF SUCH PARTICIPANT OR PERSON ASSOCIATED WITH A 

PARTICIPANT (INCLUDING ANY AUTHORIZED USER), AS THE CASE MAY BE. 

EXCEPT AS OTHERWISE PROVIDED IN THESE RULES, ANY LIABILITY 

OF THE EXCHANGE OR CLEARINGHOUSE (OTHER THAN LIABILITY THAT IS 

EXCLUDED PURSUANT TO THE PRECEDING TWO PARAGRAPHS OF THIS RULE 3.9) 

WILL BE LIMITED TO DIRECT, OUT-OF-POCKET LOSSES DIRECTLY CAUSED BY THE 

ACTS OR OMISSIONS OF THE EXCHANGE OR CLEARINGHOUSE OR THEIR 

MANAGERS, OFFICERS, COMMITTEE MEMBERS, EMPLOYEES OR AGENTS; 

PROVIDED THAT THE TOTAL COMBINED AGGREGATE LIABILITY OF THE 

EXCHANGE AND ITS MANAGERS, OFFICERS, EMPLOYEES OR AGENTS TO ANY ONE 

PARTICIPANT SHALL NOT, TAKEN TOGETHER WITH ANY LIABILITY OF THE 

CLEARINGHOUSE TO SUCH PARTICIPANT RESULTING FROM THE ACTS OR 

OMISSIONS OF THE CLEARINGHOUSE OR ITS MANAGERS, OFFICERS, EMPLOYEES 

OR AGENTS, EXCEED $2,500 FOR ALL LOSSES FROM ALL CAUSES SUFFERED ON A 

SINGLE CALENDAR DAY; $5,000 FOR ALL LOSSES SUFFERED FROM ALL CAUSES IN 

A SINGLE CALENDAR MONTH; AND $50,000 FOR ALL LOSSES SUFFERED FROM ALL 

CAUSES IN A SINGLE CALENDAR YEAR. 

ANY DISPUTE ARISING OUT OF THE USE OF THE EX SYSTEM OR 

EXCHANGE SERVICES OR CLEARINGHOUSE SERVICES OR FACILITIES USED TO 

SUPPORT THE EX SYSTEM IN WHICH THE EXCHANGE OR CLEARINGHOUSE OR ANY 
28 

OF THEIR RESPECTIVE MANAGERS, OFFICERS, COMMITTEE MEMBERS, 

EMPLOYEES OR AGENTS IS A PARTY SHALL BE RESOLVED AND SETTLED BY 

ARBITRATION THROUGH THE NFA. THE ARBITRATION WILL BE CONDUCTED IN 

NEW YORK, NEW YORK, BY AN ARBITRATOR OPERATING IN ACCORDANCE WITH 

THE PROVISIONS OF THE NFA’S CODE OF ARBITRATION AND MEMBER 

ARBITRATION RULES IN EFFECT AT THE TIME OF FILING OF THE CLAIM FOR 

ARBITRATION. THE ARBITRATOR SHALL HAVE THE AUTHORITY TO AWARD ANY 

REMEDY OR RELIEF THAT A COURT OF COMPETENT JURISDICTION COULD ORDER 

OR GRANT, INCLUDING THE ISSUANCE OF AN INJUNCTION. THE FEES AND 

EXPENSES OF SUCH ARBITRATION SHALL BE BORNE BY THE NON-PREVAILING 

PARTY, AS DETERMINED BY SUCH ARBITRATION. THIS PROVISION SHALL IN NO 

WAY CREATE A CAUSE OF ACTION AND SHALL NOT AUTHORIZE ANY ACTION 

THAT WOULD OTHERWISE BE PROHIBITED BY RULES OF EX. 

ANY PARTICIPANT OR PERSON ASSOCIATED WITH A PARTICIPANT 

(INCLUDING ANY AUTHORIZED USER) WHO FAILS TO PREVAIL IN A LAWSUIT OR 

OTHER LEGAL PROCEEDING INSTITUTED BY SUCH PERSON AGAINST THE 

EXCHANGE OR CLEARINGHOUSE OR ANY OF ITS MANAGERS, COMMITTEE 

MEMBERS, OFFICERS, EMPLOYEES, AGENTS OR CONTRACTORS, AND RELATED TO 

THE BUSINESS OF THE EXCHANGE OR CLEARINGHOUSE, WILL PAY TO THE 

EXCHANGE AND/OR CLEARINGHOISE ALL REASONABLE EXPENSES, INCLUDING 

ATTORNEYS’ FEES, INCURRED BY EX IN THE DEFENSE OF SUCH PROCEEDING TO 

THE EXTENT THAT SUCH EXPENSES EXCEED FIFTY THOUSAND USDs $50,000.00. 

THIS PROVISION WILL NOT APPLY TO DISCIPLINARY ACTIONS BY THE EXCHANGE, 

ADMINISTRATIVE APPEALS OF EX ACTIONS OR IN ANY SPECIFIC INSTANCE 

WHERE THE BOARD OF MANAGERS HAS GRANTED A WAIVER OF THIS PROVISION. 

NOTWITHSTANDING ANY OF THE FOREGOING PROVISIONS, THIS 

RULE 3.9 SHALL IN NO WAY LIMIT THE LIABILITY OF ANY PERSON ARISING FROM 

ANY VIOLATION OF SUCH PERSON OF THE CEA OR CFTC REGULATIONS 

THEREUNDER. 
29 

TRADING PLATFORM AND METHODOLOGY 

4.1. Contracts Traded and Cleared on EX 

The Exchange and the Clearinghouse shall determine which Contracts are available 

for trading and clearing subject to the Rules from time to time and approve rules containing the 

specifications for such Contracts, provided that certifications or applications with respect to such 

Contracts shall be submitted to the CFTC as required by the CEA and CFTC Regulations. 

4.2. Participants and Authorized User Access 

(a) During the Participant application process, an applicant, to become a 

Participant, will be required to register a user identification (“User ID”) and password. 

(b) The Participant will be required to enter the User ID and password to log 

onto and access secure portions of the EX website, including the Exchange’s EX System. Each 

time the Participant submits its unique User ID and password to log onto the EX System, the 

Participant affirms that it understands, and agrees to be bound by, these Rules and other policies 

and procedures of EX, as amended. 

(c) Each Authorized User shall maintain a unique User ID and password, 

distinct from the User ID and password of the Participant but identified as related to the Participant 

with which the Authorized User is associated. The Participant will only provide the User IDs to its 

employees or agents who are designated as, and authorized as, Authorized Users. EX reserves the 

right to revoke or modify a User ID at any time without prior notice. 

(d) The Participant will be responsible for protecting its User IDs and 

passwords, and with respect to itself, the ID(s) and password(s) of its Authorized User(s), from 

improper disclosure. In addition, a Participant may not knowingly or negligently permit any Person 

not authorized by EX and by the Participant to use the User ID and password to access the secure 

portion of the EX website, including the EX System. The Participant is required to immediately 

notify EX if it knows, or has reason to believe, that its User ID or the User ID and/or password of 

any Authorized User have been disclosed to any Person not authorized by EX and the Participant 

to use such User ID and/or password. 

(e) The Participant authorizes EX to rely upon any instruction received through 

use of its User IDs without further inquiry, and EX shall not be liable to the Participant for any 

actions taken based on instructions received through such User IDs, even if such instructions were 

not authorized by the Participant. The Participant will be liable for any and all costs, expenses, 

losses or other amounts that may result from actions taken, including transactions executed on EX, 

by any person, authorized or not, using its User ID and password or the ID and/or password of any 

Authorized User. EX will not be responsible in any way for unauthorized transactions in a 

Participant’s account. 

(f) The Participant is responsible for contracting with an internet service 

provider through which it will access the EX website and for having a backup service provider if 

reasonably necessary. The Participant is also responsible for maintaining an internet connection 
30 

speed adequate for its needs. EX will not be responsible in any way for any Orders delayed or 

trades missed or not executed in a timely fashion because of failure of the Participant’s internet 

service provider or slowness of its internet connection speed. No communication from a 

Participant will be deemed to have been received by EX until that communication is logged by the 

EX System at a point of connection designated to receive and log such communication. 

4.3. Orders 

(a) The Authorized Users of each Participant shall enter Orders for Contracts 

by electronic transmission and shall include all information required by the EX System. Each 

Participant shall be responsible for any and all Orders in each of its Accounts to be entered by any 

of its Authorized Users. 

(b) EX may use Order rate limiter functionality to cap the maximum number of 

Orders that may be submitted to the Exchange per second (or per a specific time period expressed 

in seconds) per Participant or Authorized User of a Participant, in order to prevent a risk of harm 

to the Exchange. Similarly, EX may limit the number of messages submitted by a Participant or 

Authorized User of a Participant to the Exchange for the same purpose. 

(c) Any Participant submitting Orders (directly or through an Authorized User), 

or any other messages to the Exchange, including but not limited to messages related to the 

cancellation or amendment of an Order, whether manually or via automated functionality, must 

ensure adequate controls are in place to prevent excessive messaging or other activity that may be 

deemed detrimental or disruptive to the Exchange. 

(d) Participants and their Authorized Representatives must ensure that all 

Orders, upon being Match Eligible, will comply with Rule 5.1(a). EX may, in its discretion, 

impose penalties and take such other action against a Participant if the circumstances warrant 

should the Participant violate this Rule 4.3(d). 

(e) The EX System will maintain an electronic record of all Orders to trade 

Contracts, and all executed Contracts. 

(f) The Exchange may make information regarding Orders (including prices 

bid or offered), trades and any other matters it may deem appropriate available to Participants, 

Authorized Users, and other Persons at such times and in such manner whether through the EX 

System, a ticker, financial information services or otherwise as it may consider necessary or 

advisable from time to time. 

(g) Each Participant, Authorized User, or other Person receiving any such 

information through the EX System is expressly prohibited from redistributing such information 

unless expressly permitted by the Exchange. Employees and agents of the Exchange shall have 

access to the offices of any Participant and each of its Authorized Users during regular business 

hours in order to observe the compliance by such Participant and its Authorized Users with the 

immediately preceding sentence. 

(h) The Clearinghouse, on behalf of the Exchange shall comply with the 

requirements of paragraphs (a) through (h) of CFTC Regulation 17.00 as they apply to trading in 
31 

any Contracts that qualify as “exclusively self-cleared contracts” within the meaning of CFTC 

Regulation 15.00. 

(i) The Clearinghouse may establish a maximum Order size for each Account 

of each Participant based upon the Participant’s available funds, the Participant’s trading behavior, 

and any other factors that the Exchange deems relevant. As provided in Rule 5.1(c), the EX System 

will not accept an Order for a Participant’s Account if Account does not have the necessary funds 

and/or collateral for the Order. 

(j) Any Order that has been entered into the EX System may be cancelled 

unless and until it has been executed or has otherwise expired. The EX System will attempt to 

cancel an existing Order as soon as possible after a Participant enters a cancellation instruction, 

however, if an Order has been filled in whole or in part, a Participant may cancel only that portion 

of the Order that has not been executed. 

(k) As a CFTC-registered entity (as defined in the CEA), the Exchange has the 

authority to adjust trade prices or cancel transactions when necessary to mitigate market disrupting 

events caused by malfunctions in its electronic trading platform(s) or errors in Orders submitted 

by Participants, and the Exchange will utilize this authority when, in its sole discretion, it deems 

such action necessary or appropriate. 

4.4. Execution and Confirmation Process 

Orders to buy or sell any Contract are subject to any margin or settlement 

requirements as imposed from time to time by the Clearinghouse. All Orders are matched with 

each other and executed electronically through the Exchange’s EX System in accordance with an 

algorithm that gives first priority to Orders at the best price and priority among Orders entered at 

the same price based on their time of entry into the EX System, with the Order first entered 

receiving first priority. Without limiting the generality of the foregoing, the algorithm to match 

Orders entered in the EX System is based upon the following principles: 

(a) An Order at a better price will always have priority over Orders at inferior 

prices. As among Orders at the same price, an Order with time priority will be executed before 

Orders that have been entered after the Order with time priority. 

(b) Time priority will be assigned to the first Order at a price that betters the 

best price prevailing when the Order is received. Only one buy Order and one sell Order can have 

time priority at any given time. Orders with time priority will be matched first regardless of their 

respective sizes. 

(c) An Order will not lose time priority with respect to Orders at the same price 

if and when an Order at a better price is entered, but it will lose price priority. 

(d) Once an Order with time priority has been filled, the algorithm described 

herein will be applied to the remaining Orders at the same price. Thus, the Order received 

immediately after the Order that initially had time priority will be assigned time priority and be 

the next Order to be executed at such price. 
32 

Notwithstanding anything in these Rules to the contrary, the Exchange may at any 

time use a different matching algorithm for a particular Contract by giving notice of such algorithm 

to all Participants at least ten (10) Trading Days before such algorithm is implemented. 

4.5. Permitted Order Types 

(a) All Orders must be entered and executed on the EX System central limit 

order book. 

(b) Limit Orders are added to the EX System’s central limit order book on a 

time-in-force basis supported by the EX System. Such orders are matched whenever opposing 

Orders are available in the EX System central limit order book, with any unmatched balance 

remaining until such balance is matched or is cancelled. 

(c) Market-Limit Orders are orders to buy or sell a stated amount of a contract 

that is to be executed at the time the order reaches the Exchange. A Market-Limit Order will be 

canceled if, upon receipt by the System, it cannot be executed by the Exchange. If the MarketLimit Order can only be partially filled, the order becomes a Limit Order, and the remaining 

quantity remains on the central limit order book at the fill price. 

4.6. Trade Confirmations 

A printable record of all of the terms of each trade entered into on the Exchange or 

pursuant to the Rules will be available on the EX System interface on the Participant’s activity 

page immediately upon execution. Such record shall legally supersede any previous agreement 

and serve as a confirmation of each such trade. The EX System may send confirmation messages 

to Members upon execution of a trade via an application programming interface, email client, 

mobile application, or website such message to include the contract type, quantity, and execution 

time for each matched trade. 

4.7. Errors 

(a) Upon receipt of an error notification, either internally generated or from a 

Participant, the Exchange shall review its electronic audit trail to determine, in its sole discretion, 

if the EX System incorrectly rejected or processed an Order not later than: 

(i) the same Business Day if the request was received prior to 12:00 

Noon on a Business Day. 

(ii) the end of the following Business Day if such request was received 

after 12:00 Noon on a Business Day or on any day that is not a Business Day. 

(b) Any determination by the Exchange that an Order was incorrectly rejected 

or processed absolutely and solely at EX’s discretion and such determinations are final. 

(c) If the review reveals that the Order was correctly processed by the 

Exchange, then the Exchange in its sole discretion may resolve the Participant’s review request as 

follows: 
33 

(i) If the system behavior is due to any fault of the Participant or the 

Authorized User, make no adjustments. 

(ii) if the system behavior could not reasonably be anticipated or is due 

to no fault by the Participant or the Authorized User, the Exchange may make a monetary 

adjustment from its own funds that represents a fair and equitable resolution of the Order’s 

handling, provided that any such adjustment is in its sole and absolute discretion the 

Exchange, which shall have no obligation to do so. 

(iii) No adjustments to another Participants’ positions shall be 

undertaken. 

(d) If the review reveals that the Order was incorrectly handled by the 

Exchange, then the Exchange in its sole and absolute discretion may resolve the Participant’s error 

by: 

(i) cancelling such trade in the Accounts of all directly affected 

Participants. 

(ii) making a monetary adjustment from its own funds that represents a 

fair and equitable resolution of the Order’s handling, provided that any such adjustment is 

in its sole and absolute discretion the Exchange, which shall have no obligation to do so. 

4.8. Position Limits and Position Accountability 

(a) Position Limits 

(i) Position limits may be established by the Exchange from time to 

time for any Contract. For any Contract that is also subject to position limits imposed 

under CFTC Part 150 Regulations, the Exchange’s position limits will be no higher (and 

may be lower) than those imposed by the CFTC. 

(ii) The maximum position will be set forth in the Contract Rules of any 

Contract with such limits. 

(iii) No Person shall enter into any transaction on the Exchange that 

would cause such Person to hold or control a position that exceeds any applicable position 

limit imposed by the Exchange or CFTC, except that: 

(A) Upon application from a Participant, for hedging or (for a 

Contract that is not also subject to CFTC position limits) other good cause 

shown, the Exchange in its sole discretion may exempt the Participant from 

limit on temporary or permanent basis. 

(B) Any exemption may include new limits. 

(C) The Exchange shall have the authority to review and rescind 

any exemption. 
34 

(iv) For purposes of this Rule 4.8(a), the Exchange will aggregate the 

Accounts for all Participants as provided by CFTC Regulation 150.4. Upon application 

from a Participant, the Exchange in its sole discretion may grant relief from aggregation 

under any of the exemptions provided in CFTC Regulation 150.4(b). 

(b) Position Accountability 

(i) The Exchange may, at any time, require a Participant and its 

Authorized Users who own or control positions in contracts traded on the Exchange to 

provide information relating to the nature and size of such person’s position; the trading 

strategy employed with respect to the position; information supporting a determination of 

the hedging nature of the position; and such other position information as may be requested. 

(ii) The Exchange may order the reduction of any such position of a 

Participant who fails to provide the information as directed, or in its discretion, order that 

a position above the position accountability threshold not be increased. 

4.9. Public Data 

The Exchange will post on its website the pricing, current volume and open interest 

for all active Contracts on each Trading Day. The Exchange will also post on its website any other 

information as required by CFTC Regulation 16.01. 
35 

CLEARING 

5.1. Submission and Acceptance of Trades for Clearing 

(a) Participants are required to have sufficient funds on deposit in its Account 

with the Clearinghouse such that the Account will contain the required collateral for any matched 

Orders upon acceptance by the Clearinghouse. 

(b) To facilitate compliance with this Rule the Exchange, in its sole discretion 

and from its own funds, may advance funds for immediate use to a Participant’s Account provided 

that it shall have no obligation to do so and provided further that: 

(i) Such advance is administrative in nature due to the normal course 

timing of banking transactions and is not a loan. 

(ii) Such Participant has submitted a bona-fide funds deposit request. 

(iii) Such funds deposit request is being processed in the normal course 

of banking transactions by the Clearinghouse. 

(iv) Such advanced amount shall not exceed the lesser of the funds 

deposit request or US$1,000. 

(c) Upon each Order becoming Match Eligible, the EX System will conduct a 

pre-trade check of the Participant’s Account to ensure that the Participant has sufficient funds to 

meet Rule 5.1(a). If the Participant’s Account does not have the necessary funds and/or collateral 

for the Order, the EX System will cancel the Order prior to match. 

(d) Upon the successful matching of Orders, the Clearinghouse shall 

immediately, through the process of Novation, be substituted as and assume the position of Seller 

and Purchaser. Upon such substitution, the Seller and Purchaser shall have no obligations to each 

other, and such Participants shall be deemed to have bought the Contract from or sold the Contract 

to the Clearinghouse, as the case may be, and the Clearinghouse shall have all the rights and be 

subject to all the liabilities of such Participants with respect to such transactions. Such substitution 

shall be effective in law for all purposes. The Participants of the Contract are deemed to consent 

to the Novation by entering the applicable Orders on the EX System. 

(e) Contracts with the same terms and conditions submitted to the 

Clearinghouse for clearing are economically equivalent within the Clearinghouse and may be 

offset with each other within the Clearinghouse. 

(f) Upon acceptance of a transaction in a Contract by the Clearinghouse for 

clearing: 

(i) The original transaction is extinguished; 
36 

(ii) The original Contract is replaced by an equal and opposite Contract 

between the Clearinghouse and each Participant; 

(iii) All terms of a cleared Contract must conform to the Contract 

specifications; and 

(iv) The Clearinghouse is irrevocably authorized to transfer premiums 

and/or Settlement Amounts to the appropriate Participants in accordance with the 

applicable Contract Specifications and this Rulebook. 

(g) All payments to Participants and collections from Participants in connection 

with the clearing and settlement of Contracts are irrevocable and any and all amounts paid to the 

Clearinghouse in satisfaction of the obligations of Participants in connection with Contracts are 

unconditionally deposited with the Clearinghouse and exclusively within the control of the 

Clearinghouse. 

(h) If a Contract is rejected for clearing by the Clearinghouse for any reason, 

such Contract is void ab initio. 

5.2. Procedures for Deposits and Withdrawals from Accounts 

(a) Procedures for Deposits 

(i) A Participant must submit a deposit notification through the EX 

System before the Participant may deposit funds with the Clearinghouse. A Participant 

must deposit funds on the same day as the Participant submits a deposit notification to the 

Clearinghouse. Only USD will be accepted in satisfaction of Participants’ obligations in 

connection with Contracts executed on the Exchange and cleared through the 

Clearinghouse. 

(ii) Deposits occur, and funds are available for use with respect to 

Trading Privileges and Clearing Privileges, no later than the next Settlement Bank Business 

Day after a Participant submits a deposit notification and deposits funds with EX in 

accordance with this Rule 5.2(a), unless EX has made an advance pursuant to Rule 5.1(b). 

(iii) Participants are responsible for all transfers of funds to their 

Accounts. 

(b) Withdrawals from Accounts 

(i) Participants may only withdraw amounts in excess of Original 

Margin amounts required to be on deposit in connection with open Contracts. 

(ii) Only a Participant or its Authorized User(s) may submit a 

withdrawal notification through the EX System. 

(iii) Upon receipt of a withdrawal notification, such funds are 

immediately deducted from a Participant’s Account. 
37 

(iv) Participants are responsible for providing accurate banking 

information. Withdrawn funds must be returned to a depositing bank account, except as 

permitted by EX in its sole discretion. 

(v) Withdrawals occur, and funds are available, no later than three (3) 

Settlement Bank Business Days after a Participant has submitted a withdrawal notification 

if the Participant submits a withdrawal notification during Trading Hours. 

(vi) If a Participant fails to adhere to the withdrawal procedures set forth 

herein, as applicable, EX will take reasonable measures to effect the withdrawal; however, 

if EX is unable to effect the withdrawal, the Participant’s collateral may become the sole 

property of EX, to the extent permitted by Applicable Law and pursuant to the procedures 

and disclosures posted on the EX website. EX may apply the collateral against the 

Participant’s obligations. 

5.3. Settlement of Contracts 

(a) The Clearinghouse shall maintain, on its system, a record of each 

Participant’s account balances and Contracts. 

(b) Upon a Contract’s Expiration, EX will notify all Participants of the Final 

Settlement Amount and close such Open Contract positions. 

(c) After the notice period on the last Trading Day of expiring Contracts that 

are options, the Clearinghouse will delete all such Contracts that have not been exercised from 

each Participant’s Account. 

5.4. Investment and Use of Clearing Participant Account Assets 

Subject to compliance with the applicable regulations of the CFTC, all cash and 

other property in the Participant’s Account or otherwise held by EX on the Participant’s behalf 

may, from time to time, without notice to the Participant, be co-mingled with the property of other 

Participants or be invested by EX, separately or with any other property, consistent with CFTC 

Regulations 1.25 and 39.15(e). EX shall have no obligation to inform the Participant of any such 

investments or of the results or performance of such investments and shall be entitled to retain any 

profits from or return on such investments. 

5.5. Transfer of Positions 

Upon application of a Participant, the Clearinghouse may, in its sole discretion, transfer 

positions in Contracts between Accounts to: 

(a) correct errors in an existing position, provided that the original trade 

documentation confirms the error; 

(b) transfer an existing position from one Account to another of the 

same Participant where no change in ownership is involved or between Accounts of 

Participants that are under the same common beneficial ownership; 
38 

(c) transfer an existing position through operation of law from death or 

bankruptcy; 

(d) as a result of a merger, asset purchase, consolidation, or similar nonrecurring transaction for a Person that is an organization; 

(e) transfer an existing position under other circumstances as permitted 

by Applicable Law. 

Any positions transferred pursuant to this Rule 5.5 will be at the original price and date that 

appears on the books of the Clearinghouse. 
39 

PARTICIPANT CONDUCT 

6.1. Prohibited Activities 

(a) No Participant or Authorized User shall engage in conduct in violation of 

Applicable Law or the Rules. Notwithstanding anything to the contrary in these Rules, no 

provision of these Rules will supersede any applicable prohibitions on fraud and manipulation, 

whether such prohibitions are prescribed by Applicable Law or the Rules. All such prohibitions 

on fraud and manipulation, including, but not limited to, the antifraud provisions of the CEA and 

the antifraud rules promulgated by the CFTC thereunder, will remain in full force and effect with 

respect to, and will be fully applicable to, the trading of all Contracts. The Exchange retains the 

right to take any appropriate disciplinary actions against Participants and their Authorized Users 

as permitted by the Rules, as applicable.1

(b) It shall be an offense to violate any Rule regulating the conduct or business 

of a Participant, or any agreement made with EX, or to engage in fraud, dishonorable or dishonest 

conduct, or in conduct which is inconsistent with just and equitable principles of trade. 

(c) No Participant or Authorized User shall enter into or attempt to enter into 

any trade on the Exchange that: 

(i) does not result in a change in beneficial ownership, 

(ii) is designed to artificially inflate trading volume, 

(iii) in any way attempts to circumvent EX’s Order processing, trade 

ordering, trade execution systems, or otherwise to circumvent exposure of the Order to 

open and competitive bidding on EX, or 

(iv) has some other illegitimate purpose. 

(d) No Participant or Authorized User shall engage, or attempt to engage, in 

any fraudulent act or engage, or attempt to engage, in any scheme to defraud, deceive or trick in 

connection with or related to any trade on or other activity related to the Exchange or the 

Clearinghouse. 

(e) No Participant or Authorized User shall execute any fictitious transactions 

or execute any such Order with knowledge of its nature. No Participant shall effect or induce the 

purchase or sale of any Contract for the purpose of creating or inducing a false, misleading, or 

artificial appearance of activity in such Contract, or for the purpose of unduly or improperly 

influencing the market price of such Contract or for the purpose of making a price which does not 

reflect the true state of the market in such Contract. No Participant shall arrange and execute 

1 See Section 4c of the Commodity Exchange Act. 
40 

simultaneous offsetting buy and sell Orders in a Contract with intent to artificially affect reported 

revenues, trading volumes or prices. 

(f) Orders entered into the EX System for the purpose of upsetting the 

equilibrium of the market in any Contract, creating, facilitating or exacerbating a disorderly market 

or creating a condition in which prices do not or will not reflect fair market values are prohibited, 

and any Participant or Authorized User who makes or assists in entering any such Order or clearing 

a transaction with knowledge of the purpose thereof or who, with such knowledge, in any way 

assists in carrying out any plan or scheme for the entering of any such Order or clearing a 

transaction, will be deemed to have engaged in an act detrimental to the Exchange or the 

Clearinghouse. 

(g) No Participant or Authorized User shall manipulate or attempt to 

manipulate the market in any Contract. Furthermore, no Participant shall intentionally or recklessly 

engage, or attempt to engage, in the following in connection with any Contract: use manipulation 

to defraud, make an untrue or misleading statement or omit a material fact, engage in fraudulent 

or deceitful business practices, or deliver misleading or inaccurate reports concerning market 

information that affect the price of any Contract. No Participant shall directly or indirectly 

participate in or have any interest in the profit of a manipulative operation or knowingly manage 

or finance a manipulative operation. 

(h) No Participant or Authorized User shall place or accept buy and sell Orders 

in the same product and expiration month, where the Participant knows or reasonably should know 

that the Orders are intended to avoid taking a bona fide market position exposed to market risk 

(transactions commonly known or referred to as “wash sales”). For the avoidance of doubt, 

opposing positions of the same expiration may be used to close positions before expiration and 

shall not be deemed to violate the prohibition on wash trades. Buy and sell Orders by Participants 

that are entered with the intent to negate market risk or price competition shall be deemed to violate 

the prohibition on wash trades. Additionally, no Participant shall knowingly execute or 

accommodate the execution of such Orders by direct or indirect means. 

(i) No Participant or Authorized User shall engage in any trading, practice, or 

conduct on or subject to the rules of the Exchange or the Clearinghouse that constitutes fraudulent 

or abusive trading, including, but not limited to violating bids or offers; demonstrating intentional 

or reckless disregard for orderly execution of transactions during the closing period; or what is, is 

of the character of, or is commonly known to the trade as, “spoofing” (bidding or offering with the 

intent to cancel the bid or offer before execution). Any Participant or Authorized User who makes 

or assists in entering any such Order with knowledge of the purpose thereof or who, with such 

knowledge, in any way assists in carrying out any plan or scheme for the entering of any such 

Order, will be deemed to have engaged in an act detrimental to EX. 

(j) No Participant or Authorized User shall engage in any trading, practice, or 

conduct that constitutes a “disruptive trading practice,” as such term is defined by the CEA or in 

CFTC Regulations. Disruptive trading practices shall include any activity that (i) demonstrates 

intentional or reckless disregard for the orderly execution of transactions during the closing period, 

(ii) consists of placing one or more Order with an intent to cancel such Order(s) prior to execution, 

(iii) submitting or cancelling Orders with an intent to overload EX, (iv) submitting or cancelling 
41 

bids or offers with an intent to delay another person’s execution of trades, or (v) submitting or 

cancelling multiple bids or offers to create an appearance of false market depth. 

(k) No Person shall make any misstatement of a material fact to the Exchange 

or the Clearinghouse (including the Board of Managers, any committee thereof or any panel of 

any such committee, or any Officer) or to the CFTC or the NFA (including any members of its 

staff), including on an application to become a Participant of EX. 

(l) No Participant or Authorized User may use its Trading Privileges or 

Clearing Privileges or access the Exchange or the Clearinghouse in any way which could be 

expected to bring disrepute upon such Participant or the Exchange or the Clearinghouse. 

(m) No Participant or Authorized User shall engage in any act that is detrimental 

to EX. It shall be deemed an act detrimental to EX to permit unauthorized use of EX, to assist any 

Person in obtaining unauthorized access to EX, to interfere with the operation of the EX, to 

intercept or interfere with information provided thereby, or in any way to use EX in a manner 

contrary to these Rules. 

(n) Each Participant shall be responsible for establishing, maintaining and 

administering reasonable supervisory procedures to ensure that its Authorized Users comply with 

Applicable Law and the Rules, and shall be responsible for supervising its Authorized Users and 

may be held accountable for the actions of such Authorized Users. 

(o) No Participant who is not an Entity shall trade for a person or Entity other 

than itself, unless specifically authorized to act as an Authorized User for such person or Entity, 

and no Authorized User of a Participant that is an Entity shall trade for a person or Entity other 

than the Entity for whom that person is an Authorized User, unless appropriately authorized to do 

so by each of the relevant Participants. 

(p) Except in accordance with any policies or procedures for pre-execution 

discussion or pre-clearing discussion from time to time adopted by EX, no Participant shall 

disclose to any Person any Order placed by any other Person, except to an Officer of EX or a 

member of the staff of the CFTC, the NFA, or the Department of Justice, respectively. No 

Participant shall solicit or induce another Participant to disclose Order information. No Person 

shall take action or direct another to take action based on non-public Order information, however 

acquired. The mere statement of opinions or indications of the price at which a market may open 

or resume trading does not constitute a violation of this Rule 6.1(p). 

(q) No Participant shall enter into or agree to transfer or transfer the benefit of 

any position in any Contract to another person other than through a transaction executed through 

EX. 

(r) All pre-negotiated or pre-arranged transactions that are not expressly 

permitted by EX are hereby prohibited. 
42 

RULE ENFORCEMENT 

7.1. Market Surveillance 

The EX System will record and store for a period of not less than 5 years (or longer as may 

be required by Applicable Law) in a searchable, read-only database a record of all data entered 

into the EX System. Such records shall be maintained in a readily available manner during the first 

two years. The Exchange shall conduct market surveillance and trade practice surveillance using 

this data with programs designed to alert the Exchange when potentially unusual or otherwise 

questionable trading activity takes place. The Exchange will initiate review and, where 

appropriate, investigate such unusual trading activity. The Exchange will also investigate any time 

it has other reason to believe that inappropriate activity of any sort is taking place. 

7.2. General 

(a) All Participants and Authorized Users shall be subject to EX’s jurisdiction. 

All Participants and Authorized Users are subject to this Chapter 7 if they are alleged to have 

violated, to have aided and abetted a violation, to be violating, or to be about to violate, any Rule 

or any provision of Applicable Law for which EX possesses disciplinary jurisdiction. 

(b) The Exchange will conduct inquiries, investigations, disciplinary 

proceedings and appeals from disciplinary proceedings, summary impositions of fines, summary 

suspensions or other summary actions in accordance with this Chapter 7. 

(c) No member of the staff of EX will interfere with or attempt to influence the 

process or resolution of any inquiry, investigation, disciplinary proceeding, appeal from a 

disciplinary proceeding, summary imposition of fines, summary suspension or other summary 

action. No Manager will interfere with or attempt to influence the process or resolution of any 

inquiry, investigation, disciplinary proceeding, appeal from a disciplinary proceeding, summary, 

imposition of fines, summary suspension or other summary action with respect to which the 

Manager is not a member of the relevant Appeals Panel. 

(d) Any Participant or Authorized User may be represented by counsel during 

any inquiry, investigation, disciplinary proceeding, appeal from a disciplinary proceeding, 

summary imposition of fines, summary suspension or other summary actions pursuant to this 

Chapter 7. 

(e) Pursuant to this Chapter 7, the Exchange may hold: 

(i) a Participant liable for, and impose sanctions against such 

Participant, for such Participant’s own acts and omissions that constitute a violation; 

(ii) a Participant liable for, and impose sanctions against such 

Participant, for the acts and omissions of each Authorized User authorized by, and each 

other agent or representative of, such Participant that constitute a violation as if such 

violation were that of the Participant; 
43 

(iii) an Authorized User liable for, and impose sanctions against him or 

her, for such Authorized User’s own acts and omissions that constitute a violation; and 

(iv) an Authorized User liable for, and impose sanctions against him or 

her, for the acts and omissions of each agent or representative of such Authorized User that 

constitute a violation as if such violation were that of the Authorized User. 

7.3. Inquiries and Investigations 

(a) The Compliance Department will investigate any matter within the EX’s 

disciplinary jurisdiction that is brought to such department’s attention, including but not limited 

to, possible violations of the Rules or manipulation of a Contract that is traded on the Exchange or 

cleared through the Clearinghouse. All such investigations must be completed in a timely manner, 

as determined in the reasonable judgment of the Exchange. The Compliance Department will 

determine the nature and scope of its inquiries and investigations within its sole discretion and will 

function independently of any commercial interests of EX. 

(b) The Compliance Department has the authority to: 

(i) initiate and conduct inquiries and investigations; 

(ii) prepare investigative reports and make recommendations 

concerning initiating disciplinary proceedings; 

(iii) prosecute alleged violations within the Exchange’s disciplinary 

jurisdiction; and 

(iv) represent the Exchange on appeal from any disciplinary proceeding, 

summary imposition of fines, summary suspension or other summary action. 

(c) Each Participant or Authorized User: 

(i) is obligated to appear and testify and respond in writing to 

interrogatories within the time period required by the Compliance Department in 

connection with: (A) any Rule; (B) any inquiry or investigation; or (C) 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 the Exchange; 

(ii) is obligated to produce books, records, papers, documents or other 

tangible evidence in its, his or her possession, custody or control within the time period 

required by the Compliance Department in connection with: (A) any Rule; (B) any inquiry 

or investigation; or (C) 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 the Exchange; and 
44 

(iii) may not impede or delay any inquiry, investigation, disciplinary 

proceeding, appeal from a disciplinary proceeding, summary imposition of fines, summary 

suspension or other summary action. 

(d) The Compliance Department will maintain a log of all investigations and 

their disposition. The Compliance Department will prepare a written report of each investigation, 

regardless of whether the evidence gathered during any inquiry or investigation forms a reasonable 

basis to believe that a violation within EX’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 written report of investigation will include the reasons for initiating the 

investigation (including a summary of the complaint, if any), all relevant facts and evidence 

gathered, and the recommendation of the Compliance Department. For each potential respondent, 

the Compliance Department will recommend either (i) closing the investigation without further 

action, (ii) summary action, (iii) resolving the investigation through an informal disposition, 

including the issuance of a warning letter or (i) initiating disciplinary proceedings. An informal 

disposition (including the issuance of a warning letter) will not constitute a finding of a violation 

or a sanction. 

(e) The Chief Compliance Officer will review promptly each completed 

investigation report to determine whether a reasonable basis exists to believe that a violation within 

EX’s jurisdiction has occurred or is about to occur. Such determination will be made by the Chief 

Compliance Officer within ten (10) Business Days of receipt of the applicable investigation report. 

If the Chief Compliance Officer determines that additional investigation or evidence is needed to 

decide whether a reasonable basis exists to believe that a violation within EX’s jurisdiction has 

occurred or is about to occur, the Chief Compliance Officer will direct the Compliance Department 

to conduct further investigation. 

(f) After receiving completion of an investigation, the Chief Compliance 

Officer will determine for each potential respondent whether to authorize: 

(i) the commencement of disciplinary proceedings because a 

reasonable basis exists to believe that a violation within EX’s jurisdiction has occurred or 

is about to occur; 

(ii) the informal disposition of the investigation (by issuing a warning 

letter or otherwise) if the Chief Compliance Officer determines that a violation of the Rules 

or any applicable Contract Rules may have occurred but that formal disciplinary 

proceedings are unwarranted; or 

(iii) the closing of the investigation without any action, and without the 

issuance of a warning letter, because disciplinary proceedings are not warranted and no 

reasonable basis exists to believe that a violation within EX’s jurisdiction has occurred or 

is about to occur. 

7.4. Notice of Charges and Opportunity to Respond 

(a) If the Chief Compliance Officer authorizes disciplinary proceedings 

pursuant to Rule 7.3, the Compliance Department will prepare in accordance with this Rule 7.4 
45 

and serve in accordance with this Rule 7.4, a notice of charges within twenty (20) Business Days 

thereafter. 

(b) A notice of charges will: 

(i) state the acts, practices or conduct that the respondent is alleged to 

have engaged in; 

(ii) state the Rule or provision of Applicable Law alleged to have been 

violated or about to be violated; 

(iii) state the proposed sanctions; 

(iv) advise the respondent of its right to submit a written statement 

explaining why a disciplinary proceeding should not be instituted or one or more of the 

potential charges should not be brought, which statement must be submitted within twenty 

(20) Business Days after service of the notice of charges; 

(v) advise the respondent of its right to a hearing and its right to have 

counsel present; 

(vi) state the period of time within which the respondent can request a 

hearing on the notice of charges, in lieu of submitting a written statement pursuant to Rule 

7.4(b)(iv), which will not be less than twenty (20) Business Days after service of the notice 

of charges; 

(vii) 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 

(viii) advise the respondent that any allegation in the notice of charges 

that is not expressly denied will be deemed to be admitted. 

(c) If the respondent submits a written statement pursuant to Rule 7.4(b)(iv), 

the Chief Compliance Officer shall, within ten (10) Business Days after receipt of the written 

statement, advise the respondent: 

(i) of the Chief Compliance Officer’s decision to drop any or all of the 

potential charges; 

(ii) that the disciplinary proceedings will proceed with respect to all 

remaining charges in accordance with the notice of charges delivered to the respondent; 

and/or, as appropriate 

(iii) that the respondent shall have twenty (20) Business Days to submit 

an answer to the notice of charges, as described in this Rule 7.4. 
46 

(d) If the respondent determines to answer a notice of charges, the respondent 

must file answers within twenty (20) Business 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) specify the allegations that the respondent denies or admits; 

(ii) specify the allegations that the respondent does not have sufficient 

information to either deny or admit; 

(iii) specify any specific facts that contradict the notice of charges; and 

(iv) specify any affirmative defenses to the notice of charges. 

(e) Any failure by the respondent to timely serve an 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 expressly deny will be deemed to be admitted. A general denial by the 

respondent, without more, will not satisfy the requirements of paragraph (b) above. 

(f) Any notice of charges or other documents contemplated to be served 

pursuant to this Chapter 7 may be served (and service shall be deemed complete) upon the 

respondent either personally or by (i) leaving the same at his or her place of business 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 on the books and records of EX, or (ii) sending the same 

via electronic mail to the e-mail address of the respondent as it appears on the books and records 

of EX. 

7.5. Settlements 

(a) 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. 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 EX over it and over 

the subject matter of the proceedings and consent to the entry of the findings and sanctions 

imposed. 

(b) If a respondent or potential respondent submits an offer of settlement in 

accordance with paragraph (a) above, the Compliance Department will forward the offer to the 

Chief Compliance Officer with a recommendation on whether to accept or reject the offer. If the 

Chief Compliance Officer conditionally accepts an offer of settlement, the settlement will become 

final upon the expiration of twenty (20) Business Days after an order of the disciplinary 

proceedings consistent with the terms of the offer of settlement is served on the respondent. 
47 

(c) 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. 

(d) If the offer of settlement of a respondent or potential respondent is not 

accepted, fails to become final or is withdrawn by the respondent or potential respondent, 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. 

7.6. Disciplinary Panel 

(a) A disciplinary panel consisting of five individuals selected by the 

Exchange’s Board (the “Disciplinary Panel”), will conduct hearings in connection with any 

disciplinary proceedings, to make findings and impose sanctions pursuant to this Chapter 7. A 

separate Disciplinary Panel will be established prior to the commencement of each disciplinary 

matter. No Disciplinary Panel shall be comprised in a manner such that any group or class of 

industry participants may reasonably be expected to dominate or exercise disproportionate 

influence on such panel. Each Disciplinary Panel shall consist of individuals who (1) would qualify 

as a Public Manager (if the individual was a Manager of the Exchange), except in cases limited to 

decorum, attire, or the timely submission of accurate records required for clearing or verifying 

each day’s transactions and (2) are drawn from the NFA’s Hearing Committee. For the avoidance 

of doubt, members of the Compliance Department shall not be eligible to serve on a Disciplinary 

Panel. 

(b) Within ten (10) Business 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 any reasonable grounds, by serving written notice on the Chief Compliance Officer. 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 

the merits of any request for disqualification within his or her sole discretion. Any such decision 

will be final and not subject to appeal. 

(c) All disciplinary proceedings (except for summary impositions of fines 

pursuant to Rule 7.13) will be conducted at a hearing before the Disciplinary Panel. A hearing will 

be conducted privately and confidentially unless the Disciplinary Panel decides that the hearing, 

or any part of it, should be held in public after giving each respondent the opportunity to present 

its, his or her views on holding a public hearing. 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. 

(d) After reasonable notice to each respondent, the Disciplinary Panel will 

promptly (but in no event later than thirty (30) Business Days following such notice) 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. 
48 

(e) The chairman of the Disciplinary Panel may continue, adjourn or otherwise 

conduct the hearing, as he or she 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 or law. Once admitted 

during the hearing, the Disciplinary Panel may consider, and attach the weight it believes 

appropriate to, evidence or other materials. EX will provide guidance to the chairman of the 

Disciplinary Panel on the conduct of the hearing. 

(f) Except for procedural and evidentiary matters decided by the chairman of 

the Disciplinary Panel pursuant to paragraph (e) above, unless each respondent otherwise consents, 

the entire Disciplinary Panel must be present during the entire hearing and any related 

deliberations. 

7.7. Respondent Review of Evidence 

(a) Prior to the commencement of a hearing, each respondent will be given the 

opportunity to review all books, records, documents, papers, transcripts of testimony and other 

tangible evidence in the possession or under the control of EX 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 EX will have no 

obligation to disclose, any information protected by attorney-client privilege or any other 

privileges recognized by Applicable Law. 

(b) 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. 

(c) Notwithstanding anything in paragraph (b) above to the contrary, the 

Compliance Department will not redact, edit or code competitive or investigative information 

contained in documents in a manner that would impair the respondent’s ability to defend against 

the allegations or proposed sanctions in the notices of charges, and 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. 

(d) For purposes of this Rule 7.7, information that could adversely affect 

competitive positions include positions in Contracts 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. 

7.8. Hearings 

(a) 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 
49 

notice of charges in accordance with Rule 7.4, the respondent is entitled to attend and participate 

in the hearing. 

(b) At a hearing conducted in connection with any disciplinary proceedings, the 

Disciplinary Panel or 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. 

(c) 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 crossexamining 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 timely file an answer. If the Disciplinary Panel determines that the respondent had a 

compelling reason for failing to timely file an answer, the Disciplinary Panel will adjourn the 

hearing and direct the respondent to promptly file a written answer in accordance with Rule 7.4. 

(d) Any Person entitled, or required or called upon, to attend a hearing before a 

Disciplinary Panel pursuant to paragraph (b)(ii) above will be given reasonable notice, confirmed 

in writing, specifying the date, time and place of the hearing, and the caption of the disciplinary 

proceedings. EX will require all Participants and Authorized Users that are called as witnesses to 

appear at the hearing and produce evidence. EX will make reasonable efforts to secure the presence 

of all other Persons called as witnesses whose testimony would be relevant. 

(e) If during any disciplinary proceedings the Disciplinary Panel determines 

that a reasonable basis exists to believe that the respondent violated or is about to violate 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 Rule 7.4. In connection with 

considering apparent violations pursuant to this paragraph (e), the Disciplinary Panel may request 

that the Compliance Department provide the Disciplinary Panel with any additional information. 

(f) The Disciplinary Panel may summarily impose sanctions on any Participant 

or Authorized User that impede or delay the progress of a hearing. 

(g) The Exchange 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. 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 or her sole discretion 

order the respondent to pay the costs for transcribing the recording of the hearing. 
50 

(h) No interlocutory appeals of rulings of any Disciplinary Panel or chairman 

of the Disciplinary Panel are permitted. 

7.9. Decision of Disciplinary Panel 

(a) 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. 

(b) The Exchange will serve a copy of the order of the disciplinary proceedings 

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; 

(iv) findings of fact and conclusions concerning each allegation, 

including each specific Rule and provision of Applicable Law that the respondent is found 

to have violated; 

(v) the imposition of sanctions, if any, and the effective date of each 

sanction; and 

(vi) notice of the respondent’s right to appeal pursuant to Rule 7.12. 

(c) Unless a timely notice of appeal is filed pursuant to Rule 7.12, the order of 

the disciplinary proceedings will become final upon the expiration of twenty (20) Business Days 

after the order is served on the respondent and a copy thereof is provided to the Compliance 

Department. 

7.10. Sanctions 

(a) After notice and opportunity for hearing in accordance with these Rules, the 

Exchange will impose sanctions if a Participant or Authorized User is found to have violated or to 

have attempted to violate a Rule or provision of Applicable Law for which EX possesses 

disciplinary jurisdiction. The Exchange may impose one or more of the following sanctions or 

remedies: (i) censure; (ii) limitation on Trading Privileges and/or Clearing Privileges, association 

with a Participant or other activities, functions or operations; (iii) suspension of Trading Privileges 

and/or Clearing Privileges or association with a Participant; (iv) fine (subject to paragraph (b) 

below); (v) restitution or disgorgement; (i) termination of Trading Privileges and/or Clearing 

Privileges; or (vii) any other sanction or remedy deemed to be appropriate. 

(b) The Exchange may impose a fine of up to $500,000 for each violation. If a 

fine or other amount is not paid within thirty (30) Business 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 
51 

prime rate plus three percent. EX 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 Authorized User authorized by, or other agent or representative of, such 

Participant. 

(c) No more than one warning letter may be issued to the same Person found to 

have committed the same rule violation within a rolling twelve-month period. 

7.11. Costs 

(a) Regardless of the outcome of any disciplinary proceeding, the Disciplinary 

Panel may order a respondent to pay some or all of the costs associated with the disciplinary 

proceedings that the Disciplinary Panel believes were unnecessarily caused by the respondent. 

Costs may include costs associated with the inquiry or investigation, the prosecution by the 

Compliance Department, legal and professional assistance, the hearing and administrative and 

other expenses incurred by the Disciplinary Panel. 

(b) The Disciplinary Panel may only award costs against EX if it concludes that 

EX has behaved in a manifestly unreasonable manner in the commencement or conduct of the 

disciplinary proceedings in question. The Disciplinary Panel must limit any award of costs against 

EX to an amount that it concludes is reasonable and appropriate, but does not exceed the 

respondent’s costs for external legal or other external professional assistance. 

(c) The Disciplinary Panel may determine the amounts and allocation of costs 

in any manner it may deem appropriate. EX or the respondent will pay any costs ordered to be paid 

by it by the Disciplinary Panel within thirty (30) Business Days of the later of either written notice 

of (i) the amount imposed by the Disciplinary Panel or (ii) the determination of an appeal by the 

Appeals Panel against the Disciplinary Panel’s determination. 

7.12. Appeals 

(a) Each respondent found by the Disciplinary Panel to have violated a Rule or 

who is subject to any summary fine imposed pursuant to Rule 7.13 or any summary sanction 

imposed pursuant to Rule 7.14 may appeal the decision to an Appeal Panel within twenty (20) 

Business Days of receiving the order of the disciplinary proceedings or the notice of summary 

action, as the case may be, by filing a notice of appeal with the Chief Compliance Officer. While 

an appeal is pending, the effect of the order of disciplinary proceedings or the summary action 

(including any sanctions, remedies or costs imposed thereby) shall be suspended; provided 

however, any summary sanction entered under Rule 7.14 shall continue in effect during the appeal. 

(b) 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 disciplinary proceedings or any summary decision on the grounds that: 

(i) the decision was arbitrary, capricious, an abuse of discretion, or not 

in accordance with the Rules; 
52 

(ii) the decision exceeded the authority or jurisdiction of the 

Disciplinary Panel, the Chief Compliance Officer or EX; 

(iii) the decision failed to observe required procedures; 

(iv) the decision was unsupported by the facts or evidence; or 

(v) the imposed sanctions, remedies or costs are inappropriate or 

unsupported by the record. 

(c) The Chief Compliance Officer will forward copies of any notice of appeals 

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 twentieth (20th) Business 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 twentieth (20th) Business 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 tenth 

(10th) Business Day after the date on which the appellee serves its brief in opposition, the appellant 

must file and serve a brief in reply. 

(d) 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. 

(e) Within thirty (30) Business Days after the last submission filed pursuant to 

paragraph (c) above, the Chief Compliance Officer will appoint the Appeals Panel drawn from the 

Regulatory Oversight Committee to consider and determine the appeal. If less than 3 individuals 

from the Regulatory Oversight Committee are eligible to serve on the Appeals Panel, the Appeals 

Panel shall be a panel solely comprised of those individuals from the Regulatory Oversight 

Committee that are eligible to serve on the Appeals Panel and such additional individuals meeting 

the requirements of Public Manager who are appointed by the Chief Compliance Officer. Members 

of the Compliance Department of EX shall not be eligible to serve on the Appeals Panel. Members 

of a Disciplinary Panel may not serve on an Appeals Panel for the same matter. 

(f) The Appeals Panel may hold a hearing to allow parties to present oral 

arguments. Any hearing will be conducted privately and confidentially unless the Appeals Panel 

decides that the hearing, or any part of it, should be held in public after giving each appellant the 

opportunity to present their views on holding a public hearing. Notwithstanding the confidentiality 

of hearings, the Appeals Panel may appoint individuals 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 be bound by evidentiary 

or procedural rules or law. 

(g) 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 or the Chief Compliance Officer’s designee, the notice of appeal, the briefs 

filed in support and opposition of the appeal, and any oral arguments of the parties. The Appeals 
53 

Panel may only consider new evidence when the Appeals Panel is satisfied that good cause exists 

on why the evidence was not introduced during the disciplinary proceeding or when imposing the 

summary action. 

(h) After completing its review, the Appeals Panel may affirm or, only if it finds 

that the decision of the Disciplinary Panel or the Chief Compliance Officer that is under review, 

as the case may be, meets one of the criteria listed in Rule 7.12(i) below, modify or reverse any 

order of the disciplinary proceedings 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 the 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. The Appeals Panel may order a new hearing for good cause or if the Appeals 

Panel determines in its sole discretion that the appellant was not given a full and fair opportunity 

to make an argument in its favor and present supporting evidence. 

(i) As described in Rule 7.12(h) above, the Appeals Panel may modify or 

reverse any order of the disciplinary proceedings or summary action under appeal only if it finds 

that the decision was: 

(i) Arbitrary, capricious, or an abuse of the discretion of the 

Disciplinary Panel, the Chief Compliance Officer, or the Chief Compliance Officer’s 

designee, as the case may be; 

(ii) In excess of the authority or jurisdiction of the Disciplinary Panel or 

the Chief Compliance Officer, as the case may be; or 

(iii) Based on a clearly erroneous application or interpretation of the 

Rules. 

(j) 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. 

(k) The Appeal 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 the Exchange and will not be subject to appeal 

within the Exchange or Clearinghouse. 

(l) Within ten (10) Business 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 this Rule 7.12 or for any other reasonable grounds, by serving written 

notice on the Chief Compliance Officer. By not timely filing a request for disqualification, the 
54 

respondent will be deemed to have waived any objection to the composition of an 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. 

7.13. Summary Imposition of Fines 

(a) The Chief Compliance Officer may summarily impose a fine against a 

Participant or Authorized User for failing: 

(i) to make timely payments of margin, options premiums, fees, cost, 

charges or fines to the Exchange or the Clearinghouse; 

(ii) to make timely and accurate submissions to the Exchange or 

Clearinghouse of notices, reports or other information required by the Rules; and 

(iii) to keep any books and records required by the Rules. 

(b) The Compliance Department, acting on behalf of the Chief Compliance 

Officer, will give notice of any fine imposed pursuant to this Rule 7.13 to each Participant or 

Authorized User subject thereto. The notice will specify (i) the violations of the Rules for which 

the fine is being imposed, (ii) the date of the violation for which the fine is being imposed and (iii) 

the amount of the fine. Within twenty (20) Business Days of serving the notice of fine, the 

Participant or Authorized User, as the case may be, must either pay the fine or file notice of an 

appeal pursuant to Rule 7.12. Unless timely notice of appeal is filed pursuant to Rule 7.12, the fine 

will become final upon the expiration of twenty (20) Business Days after the notice of fine is 

served on the Participant or Authorized User, as the case may be. 

(c) EX, in its sole discretion, may deduct the amount of any fine imposed 

pursuant to Rule 7.13(b) directly from the Participant’s Account; provided, that EX may not make 

such a deduction if the result would be to cause an event of default with respect to any Open 

Contract Positions then held in the Account of such Participant. 

(d) EX will set the amount of any fines imposed pursuant to this Rule 7.13, with 

the maximum fine for each violation not to exceed $5,000. Summary imposition of fines pursuant 

to this Rule 7.13 will not preclude EX from bringing any other action against the Participant or 

Authorized User, as the case may be. 

7.14. Summary Suspensions and Other Summary Actions 

(a) Notwithstanding anything in the Rules to the contrary, the Chief 

Compliance Officer or the Chief Compliance Officer’s designee, upon a good faith determination 

that there are substantial reasons to believe that such immediate action is necessary to protect the 

public or the best interests of EX, may order that any party be denied access to the Exchange and/or 

the Clearinghouse, or summarily limit, condition, restrict or qualify the Trading Privileges and/or 

the Clearing Privileges of a Participant or Authorized User, and may take other summary action 

against any Participant or Authorized User in accordance with the Rules; provided, however, that 

the Chief Compliance Officer or the Chief Compliance Officer’s designee in issuing an order 

denying access, may permit such party to enter Orders solely for the purpose of liquidating the 
55 

Open Contract Positions of such Participant while the applicable suspension, limitation, condition, 

restriction or qualification of access is in effect. 

(b) Promptly after an order is issued pursuant to paragraph (a), the party shall 

be informed of the action taken, the reasons for the action, the effective date and the duration of 

the action. The party shall also be informed of his or her right to appeal the action under Rule 7.12. 

Whenever practicable, the Compliance Department, acting on behalf of the Chief Compliance 

Officer, shall provide such notice prior to taking the action. 

(c) Unless timely notice of appeal is filed pursuant to Rule 7.12, the summary 

action will become final upon the expiration of twenty (20) Business Days after the notice of action 

is served on the respondent. 

(d) At the request of the Exchange or the Clearinghouse, a respondent against 

whom a summary action is brought pursuant to this Rule 7.14 must provide books and records 

over which the respondent has access or control and must furnish information to, or appear or 

testify before, the Exchange or the Clearinghouse in connection with the enforcement of any Rule. 

(e) A respondent whose Trading Privileges and/or Clearing Privileges are 

suspended, limited, conditioned, restricted or qualified pursuant to this 7.14 may apply for 

reinstatement by filing with the Compliance Department a written request stating the applicant’s 

reasons for seeking reinstatement. EX will not consider a respondent’s request for reinstatement if 

the respondent (i) persists in the conduct which was the subject of the order denying access; (ii) 

owes any fines, fees, charges or costs to EX, (iii) continues to fail to appear at disciplinary 

proceedings without good cause or (iv) continues to impede the progress of disciplinary 

proceedings. 

(f) 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 or her 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, EX may require any Participant or any Authorized User to appear as witnesses and 

produce evidence if the Appeals Panel determines that the evidence is relevant. 

(g) 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 and/or the Clearing Privileges, or association with a 

Participant, 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 Appeals Panel’s initial order issued pursuant to Rule 7.14(d) above. The Appeals Panel’s order 

may not be appealed. 

(h) Any decision to deny access pursuant to paragraph (a) shall not remain in 

effect for more than sixty (60) Business Days unless the Chief Compliance Officer or the Chief 

Compliance Officer’s designee, upon further consideration of the circumstances giving rise to the 
56 

order denying access, issues a separate order denying access for an additional period of time, not 

to exceed sixty (60) Business Days. The party must be notified thereof prior to issuance of the 

second order, unless prior notice is impracticable. Such notice must meet the standards provided 

in paragraph (b). At any time, a party subject to an action under this Rule 7.14, may petition the 

Chief Compliance Officer or the Chief Compliance Officer’s designee to reconsider an access 

denial pursuant to this Rule based upon materially changed circumstances. 

(i) When the Trading Privileges and/or Clearing Privileges of a Participant are, 

or the association of an Authorized User with a Participant is, suspended for a period of 12 months 

or less, none of its rights and Trading Privileges and/or Clearing Privileges (including the right to 

hold oneself out to the public as a Participant, enter Orders into the EX System and receive 

Participant rates for fees, costs, and charges and deposit margin at Participant levels) will apply 

during the period of the suspension, except for the right of the Participant or Authorized User in 

question to assert claims against others as provided in the Rules. Any such suspension will not 

relieve the Participant or Authorized User in question of its, his or her obligations under the Rules 

to perform any Contracts entered into before the suspension, or for any EX imposed fees, costs, or 

charges incurred during the suspension. EX may discipline a suspended Participant or Authorized 

User under this Chapter 7 for any violation of a Rule or provision of Applicable Law committed 

by the Participant before, during or after the suspension. 

(j) When the Trading Privileges and/or Clearing Privileges of a Participant are, 

or the association of an Authorized User with a Participant is, terminated, all of its rights and 

Trading Privileges and/or Clearing Privileges will terminate, except for the right of the Participant 

or Authorized User in question to assert claims against others, as provided in the Rules. A 

terminated Participant or Authorized User may only seek to reinstate its Trading Privileges and/or 

Clearing Privileges by applying for Trading Privileges and/or Clearing Privileges pursuant to Rule 

3. EX will not consider the application of a terminated Participant or Authorized User if such 

Participant or Authorized User, as the case may be, continues to fail to appear at disciplinary 

proceedings without good cause or continues to impede the progress of disciplinary proceedings. 

(k) A suspended or terminated Participant or Authorized User remains subject 

to the Rules and the jurisdiction of EX for acts and omissions prior to the suspension of 

termination, and must cooperate in any inquiry, investigation, disciplinary proceeding, appeal of 

disciplinary proceedings, summary suspension or other summary action as if the suspended or 

terminated Participant or an Authorized User still had Trading Privileges and/or Clearing 

Privileges or was still associated with a Participant, as the case may be. 

7.15. Publication of Disciplinary Action 

(a) Within two (2) Business Days after a disciplinary action becomes final, 

notice of any disciplinary action outcome providing that a Participant is suspended, expelled, 

disciplined, or denied access to the Exchange and/or the Clearinghouse shall be provided to the 

NFA for inclusion in its internet accessible database of disciplinary matters. 

(b) EX will make public notice of the disciplinary action by posting on its 

website, in accordance with CFTC Regulation 9.13, the information required by CFTC Regulation 
57 

9.11. The disciplinary action will be considered final on the date the notice of the disciplinary 

action is published on the EX website. 
58 

ARBITRATION 

8.1. General 

(a) Except as otherwise provided in the Rules, Participants and their Authorized 

User(s) must arbitrate all controversies arising in connection with their EX-related business 

between or among themselves. Notwithstanding the foregoing, this Rule 8.1 does not require 

arbitration of claims alleging employment discrimination (including sexual harassment) in 

violation of Applicable Law. 

(b) Except as otherwise provided in the Rules, Participants and their Authorized 

User(s) must arbitrate all controversies with the Exchange or Clearinghouse arising in connection 

with their EX-related business. 

(c) The NFA will conduct any and all arbitrations of a type described in this 

Rule 8.1 in New York, New York. Any and all arbitrations of a type described in this Rule 8.1 

above will be conducted pursuant to the NFA’s Code of Arbitration and Member Arbitration Rules. 

8.2. Penalties 

(a) Any failure on the part of any Participant or Authorized User to arbitrate a 

case subject to arbitration, or the commencement by any such Person of a suit in any court prior to 

arbitrating a case subject to arbitration, violates the Rules and subjects such Participant or 

Authorized User to disciplinary proceedings pursuant to Chapter 7. 

(b) EX may summarily suspend, pursuant to Chapter 7, a Participant or 

Authorized User that fails to satisfy an arbitration award rendered in any arbitration pursuant to 

this Chapter 8. 
59 

CONTRACT RULES 

9.1. Contract Specifications 

Each Contract will meet such specifications, and all trading in such Contract will be 

subject to such procedures and requirements, as set forth in the rules governing such Contract. 

[RESERVED]