Cantor Futures Exchange, L.P. Page | 1

Cantor Futures Exchange, L.P. 

Rule Amendment Submission #2016-1

January 21, 2016

1. The text of the rule changes to the Cantor Futures Exchange, L.P. Rulebook is attached. 

Additions are underlined and deletions are stricken through. This rule has been approved by 

Cantor Futures Exchange, L.P. Capitalized terms, unless otherwise defined herein shall possess 

the meaning(s) ascribed in the Cantor Futures Exchange, L.P. Rulebook.

2. The proposed effective date is ten business days after receipt by the Commodity Futures 

Trading Commission of this submission. 

3. Attached, please find a certification that: (1) these rules comply with the Commodity 

Exchange Act, and the Commission’s regulations thereunder; and (2) concurrent with this 

submission, Cantor Futures Exchange, L.P. posted on its website: (i) a notice of pending 

certification of the rule submissions with the Commission; and (ii) a copy of this submission.

4. A concise explanation and analysis of the operation, purpose, and effect of the amended 

rule appears below.

5. There were no opposing views expressed regarding these amended rules.

CONCISE EXPLANATION AND ANALYSIS OF THE OPERATION, PURPOSE, AND 

EFFECT OF THE CERTIFIED RULE AND ITS COMPLIANCE WITH APPLICABLE 

PROVISIONS OF THE ACT, INCLUDING CORE PRINCIPLES AND THE COMMISSION’S 

REGULATIONS THEREUNDER

Pursuant to Commission Rule 40.6(a)(7)(vi), the following is a concise explanation and analysis 

of the operation, purpose, and effect of the amended rules. CX has reviewed the Core Principles 

for Designated Contract Markets under section 5 of the Commodity Exchange Act, 7 U.S.C § 7

et seq. (“Act”), and has determined these change will not impact CX’s ability to comply with the 

Core Principles. 

The following charts identify the amendments to the Rulebook. The first chart identifies a 

number of non-substantive Rulebook revisions consisting of corrections of typographical errors 

and renumbering. As typographical corrections, these changes are not required to be certified, 

and may be put into effect with notice to the Commission. See, Commission Rule 40.6(d)(2)(i). 

This filing constitutes such notice that these changes are being put into effect. The second chart 

identifies the substantive changes to the Rulebook which are being certified under Commission 

Rule 40.6. That chart includes an explanation of the operation, purpose, and effect of each such 

change. 
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Notice of Non-substantive Rule Changes

Rule Rule Title Purpose

Cover Page N/A Correct typo 

I-1 Defined 

Terms 

Market Order Correct typo 

I-1 Defined 

Terms

Matched Trade Correct typo 

II-5(b)(i) Eligibility Correct Typo

III-3(e)(i) Eligibility Correct Typo

IV-4(a) Financial Requirements for Order 

Entry and Executions

Correct Typo

IV-4(h)(iii) Financial Requirements for Order 

Entry and Executions

Correct Typo

IV-4(i) Financial Requirements for Order 

Entry and Executions

Correct Typo

IV-4(j)(i)-(ii) Financial Requirements for Order 

Entry and Executions

Correct Typo

IV-11(e) Errors Correct Typo

V-5(c) Trade Confirmations Correct Typo

VII-1(e)-(g) Discipline and Enforcement -

General 

Renumbering 

VII-2 Inquiries and Investigations Correct Typo 
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Rule Amendments Certified Under Rule 40.6; Explanation of Operation, Purpose and 

Effect of Amendment

Rule Rule Title Change/Purpose

I-1 Defined Terms

“Executive Committee”

Removing “Executive Committee” and 

definition because an Executive 

Committee is not necessary for the 

efficient operation of the Board. 

II-2(a) Standing Committees Deletion of the Executive Standing 

Committee because it is not necessary for 

the efficient operation of the Board and 

its mandate duplicated in part, the 

mandate of the Regulatory Oversight 

Committee (“ROC”). Following this 

amendment, the ROC will constitute the 

sole standing committee of the Board of 

Directors. 

II-3 Executive Committee Delete the definition of “Executive 

Committee” to reflect the changes in II-2.

II-5(a) Eligibility Delete reference to “Executive 

Committee” to reflect the changes in II-2. 

III-3(a) Eligibility Remove language the meaning of which 

was ambiguous. 

IV-10 Information Regarding Orders The purpose of this change is to prohibit 

Participants from redistributing 

confidential order information. 

V-4(a) Minimum Financial Requirements To clarify that Participants must satisfy 

the minimum financial requirements of 

the Clearinghouse in addition to those of 

the Exchange. 

V-5(a) Trade Confirmations Clarifying that the Exchange may send or 

cause to be sent e-mail or downloadable 

confirmations. 

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Attachment — Rule Amendments

(deletions are struck through; additions underlined)

CHAPTER I

DEFINITIONS; INTERPRETATION;

AMENDMENTS

I-1. Defined Terms

***

Executive Committee

The term “Executive Committee” means the committee of the Board of Directors 

constituted in accordance with Rule II-3.

***

CHAPTER II

GOVERNANCE OF THE EXCHANGE

II-2 Standing Committees

(a) The Unless otherwise determined by the Board of Directors, the Board of Directors shall 

initially have one two standing committees: the “Executive Committee” and the “Regulatory 

Oversight Committee”.
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II-3 Executive Committee

The Executive Committee of the Board of Directors shall consist of the chairperson of the Board 

of Directors, the President (as ex officio member) and such additional individuals, who shall be 

members of the Board of Directors, as may be appointed from time to time by the chairperson of, 

and approved by, the Board of Directors. At least thirty-five (35%) percent of the members of 

the Executive Committee shall be Public Directors. The Executive Committee shall have general 

supervision over the property, business and affairs of the Exchange, subject to the authority of 

the Board of Directors. It shall make such recommendations to the Board of Directors as will, in 

its judgment, best promote the interests of the Exchange. The Executive Committee shall also 

have such other powers and perform such other duties as the Board of Directors may delegate to 

it from time to time.

Without limiting the generality of the foregoing, the Executive Committee shall have authority 

(and may delegate such authority) to: (a) monitor compliance with the Rules of the Exchange or 

any interpretation thereof and with the rules, regulations, resolutions and stated policies of the 

Board of Directors or any committee of the Board of Directors or of the Exchange by 

Participants or Authorized Traders; (b) approve any applicant to become a Participant in 

accordance with Rule III-3; (c) inquire into the business conduct and financial condition of 

Participants or Authorized Traders and require detailed financial reports and such other 

operational reports as it may deem advisable of any Participant related to its futures trading; 

(d) suspend, revoke, limit, condition, restrict or qualify a Participants’ Trading Privileges in 

accordance with Chapter VII; (e) prohibit any trading activities by a Participant that are 

excessive in relation to such Participant’s capital; and (f) exercise any other functions expressly 

assigned to it in these Rules.

II-65. Eligibility 

(a) No Person may serve as an Officer of the Exchange, or a member of the Board of 

Directors, the Executive Committee or any other disciplinary committee, arbitration panel or 

oversight panel of the Exchange or as Compliance Director if such Person: 

*****

CHAPTER III

OWNERSHIP AND TRADING PRIVILEGES

III-3. Eligibility 

(a) Participants are eligible to hold either long or short positions in Contracts only for 

their proprietary Trading Accounts. on a direct basis. In addition, Participants must: (i) satisfy 

all requirements generally applicable to Participants and Authorized Traders under these Rules 

and any applicable Contract Rules; (ii) satisfy such financial criteria as may be prescribed by the 

Exchange from time to time; (iii) have sufficient technical and operational capabilities to fulfill 

any other obligations applicable to Participants or their Authorized Traders as may from time to 
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time be required by the Exchange; and (iv) satisfy such other requirements or criteria as may 

from time to time be adopted by the Exchange.

CHAPTER IV

TRADING STANDARDS

IV-10. Information Regarding Orders

The Exchange may will make information regarding Orders (including prices bid or offered), 

trades and any other matters it may deem appropriate available to Participants, Authorized 

Traders and other Persons at such times and in such manner (whether through the Cantor Direct 

System, a ticker, financial information services or otherwise) as it may consider necessary or 

advisable from time to time.

Each Participant, Authorized Trader or other Person receiving any such information through the 

Cantor Direct System is may redistribute expressly prohibited from redistributing such 

information only to such extent and in such manner as may be unless expressly permitted by the 

Exchangefrom time to time. Employees and agents of the Exchange shall have access to the 

offices of any Participant and each of its Authorized Traders during regular business hours in 

order to observe the compliance by such Participant and its Authorized Traders with the 

immediately preceding sentence.

CHAPTER V

OBLIGATIONS OF PARTICIPANTS

V-4. Minimum Financial Requirements

(a) 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.

V-5. Trade Confirmations

(a) The Exchange shall furnish, or cause to be furnished, to each Participant that enters into a 

trade, no later than 12:00 Noon on the Trading Day immediately following the day on which 

such trade is entered into, an e-mail or downloadable confirmation of such trade in such form as 

the Exchange may from time to time prescribe, indicating the Contract bought or sold, the price, 

quantity, time of execution and such other information as the Exchange may require. In the case 

of an Option on Futures trade, such confirmation shall also indicate: (i) the amount of the 

premium and all other commissions, costs and fees, separately listed; (ii) the Option on Futures 

series; and (iii) the expiration date of the Option on Futures.
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Attachment —Non-substantive rule Changes

(deletions are struck through; additions underlined)

COVER PAGE

N/A

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

ANY NEED FOR ANY FURTHER ACTION, UNDERTAKING OR AGREEMENT, A PARTICIPANT, AND ITS 

AUTHORIZED TRADERS 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 THE EXCHANGE 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 TRADERS. SEE CHAPTER III AND 

THE RELATED DEFINITIONS IN THESE RULES.

CHAPTER I

DEFINITIONS; INTERPRETATION;

AMENDMENTS

I-1. Defined Terms

***

Market Order

The term “Market Order” has the meaning set forth in Rule IV-54(ii).

Matched Trade

The term “Matched Trade” has the meaning set forth in Rule IV-4(he).

***

CHAPTER II

GOVERNANCE OF THE EXCHANGE
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II-65. Eligibility 

(a) ***

(b) ***

(i) within the last year, the individual or any member of his or her immediate family has 

been an officer or employee of the Exchange or any of its affiliates. Solely for purposes of this 

Rule II-6, the term “affiliate” shall mean parents or subsidiaries of the Exchange or entities that 

share a common parent with the Exchange. For the avoidance of doubt, an individual may still 

qualify ais a Public Director if such individual (x) has, within the last year, served as a director of 

an affiliate of the Exchange, but (y) otherwise meets the eligibility criteria under this Rule II6(b).

*****

CHAPTER III

OWNERSHIP AND TRADING PRIVILEGES

III-3. Eligibility 

*****

(e) ***

(i) In considering any applicant for status as a Participant, an Authorized Trader of a 

Participant, or a Referring Participant, the Exchange 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

*****

CHAPTER IV

TRADING STANDARDS

IV-4. Financial Requirements for Order Entry and Executions

(a) Participants are required to have sufficient funds on deposit with the Clearinghouse such 

that any executed Orders will “PASS” the credit check as described in Rule IV-4(eh).

*****

(h) ***

(i) ***

(ii) ***
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(iii) The credit check will “FAIL” if the funds immediately available in the applicable 

Participant Clearing Account are less than the Original Margin required to establish the new 

position or increase an existing position. In such case, the size of the matched trade shall be 

reduced such that the minimum quantity of Contracts that would PASS the credit check, if any, 

based on the level of Original Margin in the applicable Participant Clearing Account, will be 

matched. Any remaining portion of the purchaser’s or seller’s Order that would have passed the 

credit check had the purchaser or seller’s Order originally been limited to such amount shall be 

restored with its original price and time priority to the Master Order Book and any remaining 

portion of the purchaser’s or seller’s Order that failed the credit check shall be cancelled. For the 

avoidance of doubt, if any part of an Order “FAILS” under this Rule IV-4(he), the placing of 

such Order shall be deemed to be a violation of this Rule for which penalties may be imposed 

under Rule IV-4(f) below.

(i) If a standing Limit Order “FAILS”, as described in Rule IV-4(he) above, then the 

Exchange will immediately notify the Participant of such event via email and the following 

penalties shall immediately be assessed by the Exchange on the Participant Clearing Account of 

the corresponding Participant:

*****

(j) ***

(i) The entry of any Order or series of Orders that, when taken in the aggregate, 

could reasonably be expected to result in Orders being cancelled as described in IV-4(he) for any 

Participant; or

(ii) The third instance of Orders being cancelled pursuant to Rule IV-4(he) for any 

Participant.

*****

IV-11. Errors 

*****

(e) Notwithstanding anything to the contrary in this Rule IV-119, if the Exchange determines

in its sole discretion that the execution of any trade was the result of Orders being incorrectly 

processed by the Cantor Direct System, or any other cause beyond the control of any Participant, 

then the Exchange may cancel such trade in the Trading Accounts of all affected Participants.

CHAPTER V

OBLIGATIONS OF PARTICIPANTS

V-5. Trade Confirmations
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*****

(c) Notwithstanding paragraphs (a) and (b) above: (i), a trade that is executed for a 

commodity pool needs to be confirmed only to the operator of such pool.

CHAPTER VII

DISCIPLINE AND ENFORCEMENT

VII-1. General

*****

(e) Any Participant or Authorized Trader 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 VII.

(f) Pursuant to this Chapter VII, 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 Trader authorized by, 

and each other agent or representative of, such Participant that constitute a 

violation as if such violation were that of the Participant;

(iii) an Authorized Trader liable for, and impose sanctions against him 

or her, for such Authorized Trader’s own acts and omissions that constitute a 

violation; and

(iv) an Authorized Trader liable for, and impose sanctions against him 

or her, for the acts and omissions of each agent or representative of such 

Authorized Trader that constitute a violation as if such violation were that of the 

Authorized Trader.

(g) Pursuant to this Chapter VII, the Exchange may in its sole discretion, and 

subject to the conditions specified in Rule III-3(g), review an appeal by any applicant of the 

Exchange’s decision to deny or otherwise limit Trading Privileges of such applicant pursuant to 

the Rules of the Exchange; provided, however, that any such decision by the Exchange to deny 

or otherwise limit applicant’s Trading Privileges shall continue in effect during such review.

VII-2. Inquiries and Investigations