ICAP GLOBAL DERIVATIVES LIMITED

Facility Rulebook

Version 3.63.7

December 2016June 2017

© Copyright 2016 ICAP GLOBAL DERIVATIVES LIMITED

All Rights Reserved.
FACILITY RULEBOOK

TABLE OF CONTENTS PAGE

DEFINITIONS 1

CHAPTER 1 10

MARKET GOVERNANCE 10

Rule 101 Board of Directors and Officers 10

Rule 102 Limitation of Liability 10

Rule 103 Confidentiality 11

Rule 104 Emergency Action 12

Rule 105 Suspension of Trading 15

Rule 106 Risk Controls for Trading 15

Rule 107 Market Data 15

Rule 108 Intellectual Property 16

CHAPTER 2 19

TRADING PRIVILEGES 19

Rule 201 Trading Privilege Holders 19

Rule 202 Authorised Traders and Authorised Trading Firms 21

Rule 203 Financial Integrity 23

Rule 204 Clearing 23

Rule 205 Application for and Grant of Trading Privileges 27

Rule 206 Participant and Customer Obligations; Suspension or Termination of Access 29

Rule 207 Customers 30

Rule 208 Recordkeeping 30

Rule 209 Communications of IGDL with Participants 32

Rule 210 Required Disclosures to IGDL 33

Rule 211 Dues, Fees and Expenses 34

Rule 212 Market Maker Programs 34

Rule 213 Independent Software Vendors 35

Rule 214 Withdrawal of Participant 35

CHAPTER 3 37

TRADING PROCEDURES 37

Rule 301 Trading Sessions 37

Rule 302 Information about, and access to, IGDL’s Order Book 37

Rule 303 Required Transactions 37

Rule 304 Permitted Transactions 38

Rule 305 Execution Methods for Required Transactions 38

Rule 306 Work Up 41

Rule 307 Acceptable Bids and Offers 41

Rule 308 Block Trades 41

Rule 309 Reporting and Data Collection 42

Rule 310 Bid/Offer Cancellation 44

Rule 311 [Reserved] 44

Rule 312 Enforceability of Transactions 45

Rule 313 Intermediated Transactions 46

Rule 314 Bunched Orders 46

Rule 315 IGDL Authority over Transactions 47

Rule 316 Reporting Counterparty 52

CHAPTER 4 53

TRADING STANDARDS 53

Rule 401 Fraudulent Statements and Acts 53

Rule 402 Abusive Trading Practices 53

Rule 403 Good Faith Bids/Offers and RFQs 53

Rule 404 Pre-Execution Discussions and Pre-Arranged Transactions 53

Rule 405 Manipulation and Price Distortion 54
Rule 406 Disruptive Trading Practices 54

Rule 407 General Offences 55

Rule 408 Position Limits and Position Accountability 55

CHAPTER 5 57

RULE ENFORCEMENT 57

Rule 501 Jurisdiction 57

Rule 502 Facility Market Regulation Staff Powers and Duties 57

Rule 503 The Review Panel 58

Rule 504 Notice of Charges 59

Rule 505 Answer; Request for Hearing; Failure to Answer or Deny Charges 59

Rule 506 Selection of Hearing Panel 60

Rule 507 Challenge to Members of the Hearing Panel 60

Rule 508 Hearing on Sanctions in the Event of Failure to Deny Charges; Failure to Request

Hearing Deemed Acceptance of Sanctions 60

Rule 509 Settlement Prior to Commencement of Hearing 61

Rule 510 Hearing Procedures 61

Rule 511 Written Decision of Hearing Panel 63

Rule 512 Liability for Expenses 64

Rule 513 Effective Date of Sanctions 64

Rule 514 Summary Suspension 64

Rule 515 Extension of Time Limits 65

Rule 516 Summary Fines 65

CHAPTER 6 67

CONTRACTS TO BE TRADED 67

Rule 601 Listing Procedures 67

Rule 602 Swaps Not Readily Susceptible to Manipulation 67

CHAPTER 7 68

GOVERNING LAW, JURISDICTION AND DISPUTE RESOLUTION 68

Rule 701 Choice of Law 68

Rule 702 Disputes Among Trading Privilege Holders, Authorised Traders, Authorised Trading

Firms and Customers 68

Rule 703 Disputes with IGDL 68

CHAPTER 8 69

CONTRACT SPECIFICATIONS 69

Rule 801 Interest Rate Swaps Products Descriptions 69

CHAPTER 9 93

SYSTEM PROTOCOLS 93

Rule 901 iSwap System Protocol 93

Rule 902 Voice RFQ System Protocol 102

ii
DEFINITIONS

Except where the context requires otherwise, the following terms shall have the following meanings when

used in the Rules. Use of the singular shall include the plural and vice versa, unless the context requires

otherwise.

Act means the U.S. Commodity Exchange Act, as amended from time to time.

Affiliate means, with respect to any person, any other person who controls, is controlled by or is under

common control with such person.

Affirm means the process by which the counterparties to a Cleared Contract verify that they agree on the

details of the transaction after execution on the Facility but prior to submission to the relevant DCO, which

may be done by any means acceptable to the counterparties, including the use of an Affirmation Hub,

and “Affirmations” shall be construed accordingly.

Affirmation Hub means a third-party service designated by IGDL to route Cleared Contracts to DCOs

and which may provide Participants with the opportunity to Affirm the Cleared Contracts.

Answer shall have the meaning set forth in Rule 505.

Applicable Law means, with respect to any person, any statute, law, regulation, rule or ordinance of any

Governmental Authority applicable to such person, including but not limited to the FCA’s rules, the Act

and Commission Regulations.

Appropriate Minimum Block Size shall have the meaning set forth in Rule 308.

Authorised Trader means an individual designated as such by, and acting on behalf of, a Trading

Privilege Holder to enter Bids/Offers, issue and respond to RFQs, submit Pre-Arranged Crosses, access

a Trading Platform and execute transactions in Contracts.

Authorised Trading Firm means an entity designated as such by a Trading Privilege Holder to enter

Bids/Offers, issue and respond to RFQs, submit Pre-Arranged Crosses, access a Trading Platform and

execute transactions in Contracts either as an Intermediary for such Trading Privilege Holder or as a

Customer with DMA granted by such Trading Privilege Holder.

BASIC shall have the meaning set forth in Rule 205(f).

Bid/Offer means a bid or offer entered into a Trading Platform operated by IGDL or submitted to the

Facility in response to an RFQ.

Block Trade means a Swap transaction that is publicly reportable under Part 43 of the Commission

Regulations that:

(a) Involves a Swap that is listed on the Facility;

(b) Occurs away from the Facility and is executed pursuant to Rule 308;

(c) Has a notional or principal amount at or above the Appropriate Minimum Block Size; and

(d) Is reported to the Facility as provided in Rule 308.

Board means the Board of Directors of IGDL.
Breakage Agreement means an agreement or any other arrangement between the parties that provides

for the assessment of liability or payment of damages between the parties to a Cleared Contract in the

event that the Cleared Contract is rejected from clearing.

Business Day means any day on which a Contract is available for trading on the Facility.

Call Option means an Option whereby (i) the purchaser has the right, but not the obligation, to buy an

Underlying Interest, at the strike price specified; and (ii) the grantor has the obligation, upon exercise, to

enter into an Underlying Interest for delivery in such Delivery Month, at such strike price.

CF10 means the head of Compliance and Oversight (Controlled Function 10), or one duly authorised to

act with the authority of the CF10.

Chairman of the Board means the chairman of the Board.

Chief Compliance Officer means the chief compliance officer of IGDL, or one duly authorised to act with

the authority of the Chief Compliance Officer.

Chief Executive Officer means the Chief Executive Officer of IGDL, or one duly authorised to act with

the authority of such officer.

Class means, with respect to any Swap, a Contract covering the same Underlying Interest.

Cleared Contract means any Contract that is listed for clearing by IGDL.

Clearing Firm means a clearing member of a DCO that is authorised pursuant to the rules of such DCO

to clear transactions in any or all Contracts.

Clearing Firm Representation shall have the meaning set forth in Rule 204(f).

Cleared Treasury Security means any U.S. Treasury Security cleared through the Fixed Income

Clearing Corporation.

CME means Chicago Mercantile Exchange Inc.

Commission means the U.S. Commodity Futures Trading Commission or any successor regulatory

body.

Commission Regulations means any rule, regulation, order, directive and any interpretation thereof

promulgated by the Commission, as amended.

Commodity shall have the same meaning as in the Act.

Commodity Interest shall have the meaning set forth in Commission Regulation 1.3.

Compliance Function means the Chief Compliance Officer and CF10 together.

Confirmation shall have the same meaning as in Commission Regulation 45.1.

Confidential Information means all non-public information that is stated to be or that can reasonably

expected to be of a confidential or trade secret nature in any form obtained by a Participant from IGDL in

accessing or using the Systems, including, but not limited to, any processes, or proprietary data,

information or documents regarding the Systems, save to the extent that such information: (i) is already

in the public domain at the time of disclosure; (ii) enters the public domain other than by a breach of any

obligation of confidentiality; (iii) is required to be disclosed by reason of Applicable Law, provided that,

2
where permitted by Applicable Law, prior notice of such disclosure shall be provided to IGDL as soon as

practicable in order to permit IGDL to seek a protective order or take other appropriate action to

safeguard the Confidential Information; or (iv) is permitted to be disclosed pursuant to the Rules.

Contract means any Swap listed for trading on the Facility.

Covered Package Transaction means a “MAT/Non-MAT Uncleared Package Transaction,” a

“MAT/Non-Swap Instruments Package Transaction,” and a “MAT/Non-CFTC Swap Package

Transaction,” each as defined in NAL 16-76, expiring November 15, 2017.

Customer means any person (including another Trading Privilege Holder), or such person’s agent with

the legal ability to direct trading on behalf of such person, that transacts on the Facility through a

Participant acting as an Intermediary.

Customer Type Indicator Codes shall have the meaning set forth in Rule 208.

DCO means, with respect to any Swap, a derivatives clearing organisation authorised to clear such

Swap.

Delivery Month means, with respect to any Contract, the month in which delivery of an Underlying

Interest is to be made pursuant to the terms of such Contract.

Derived Information means Information that has been altered, enhanced, modified or from which

derivative information has been created.

Director means a member of the Board.

Directed Voice RFQ means a voice RFQ conducted in accordance with Rule 305(c)(2).

DMA means a Trading Privilege Holder (including an Intermediary) permitting a Customer to transmit

orders electronically to the Trading Privilege Holder’s systems for onward transmission to a Trading

Platform utilising the Trading Privilege Holder’s trading identification.

DTCC means DTCC Data Repository (U.S.) LLC.

Eligible Counterparty has the meaning given in the FCA Handbook.

Emergency shall have the meaning set forth in Rule 104.

Erroneously Cleared Transactions shall have the meaning set forth in Rule 315(i).

Error shall have the meaning set forth in Rule 315(h).

Expiration Day means the day on which an Option expires.

Execution Specialist means any personnel of IGDL responsible for assisting Participants with entering

Bids/Offers in the Order Book, issuing and responding to RFQs, executing and receiving reports of Block

Trades and executing Pre-Arranged Crosses.

Facility means the venue provided by IGDL for the execution of Contracts, as set out in this Facility

Rulebook.

Facility Subject Person means any person that has consented to the jurisdiction of the Facility and

agreed to be bound by and comply with the Rules pursuant to Rule 201(e).

3
FCA means the Financial Conduct Authority.

FICC Clearing Member means a clearing member of the Fixed Income Clearing Corporation’s

Government Securities Division.

FICC Clearing Member Representation shall have the meaning set forth in Rule 204(j).

Financial Entity has the meaning set forth in the Act.

Governance Policy means the Governance Policy of IGDL available on the Facility’s website.

Governmental Authority means any domestic or foreign government (or political subdivision),

governmental or regulatory authority, agency, court, commission or other governmental or regulatory

entity (including any self-regulatory association).

Hearing Date shall have the meaning set forth in Rule 506.

Hearing Panel shall have the meaning set forth in the Governance Policy.

Hearing Panel Chairman shall have the meaning set forth in Rule 506.

Hearing Record shall have the meaning set forth in Rule 510.

Held Order means a firm executable Order placed for entry onto the Order Book.

ID shall have the meaning set forth in Rule 302.

ICAP means ICAP plc and its Affiliates.

IGDL means ICAP Global Derivatives Limited (Company Number: 03635229).

IGDL Indemnified Party shall have the meaning set forth in Rule 108(f).

Implied Package Transaction means a transaction executed on or subject to the Rules involving two or

more instruments that is quoted as one economic transaction with simultaneous or near simultaneous

execution of all components, but where the execution of each component is not contingent upon the

execution of all other components and where any Participant or Customer may submit a Bid/Offer for less

than all of the components of the transaction.

Indemnified Party shall have the meaning set forth in Rule 108(f).

Indemnifying Party shall have the meaning set forth in Rule 108(f).

Information shall have the meaning set forth in Rule 107.

Intellectual Property Rights means all right, title and interest in and to (i) trademarks, service marks,

brand names and other indications of origin and the goodwill associated with the foregoing; (ii) inventions,

patents, trade secrets, know-how, processes and systems; (iii) copyright and database rights; and

(iv) any other intellectual property or similar proprietary rights in any jurisdiction, in each case whether

registrable or not.

Intermediary means any person that enters Bids/Offers into a Trading Platform, issues and responds to

RFQs, reports block trades or submits Pre-Arranged Crosses to the Facility on behalf of Customers,

4
including without limitation, any futures commission merchant, introducing broker or commodity trading

adviser registered with the Commission.

Intermediated Transaction means any transaction on the Facility conducted through an Intermediary.

ISDA means the International Swaps and Derivatives Association, Inc.

ISDA Reporting Party Rules means the reporting party rules set forth in the document published by

ISDA entitled “Dodd Frank Act – Swap Transaction Reporting Party Requirements” dated July 15, 2013,

as set forth in Annex 1.

JSCC means Japan Securities Clearing Corporation.

Last Trading Day means, with respect to any Swap, the last day on which trading is permitted for such

Swap in accordance with the Rules.

Legal Entity Identifier or LEI shall have the same meaning as in Commission Regulations.

Losses shall have the meaning set forth in Rule 102(a).

Major Swap Participant shall have the same meaning as in the Act and Commission Regulations.

Managed Order shall have the meaning set forth in Rule 305(c)(4).

Market Regulation Staff means the personnel designated by IGDL as members of the Market

Regulation Staff, any agents of IGDL that assist in the implementation, surveillance, and enforcement of

its rules and related obligations, and IGDL’s Regulatory Services Provider.

MiFID means the Markets in Financial Instruments Directive 2004/39/EC.

MTF means multilateral trade facility, as defined in the FCA Handbook.

NAL means Commission No-Action Letter.

NFA means the National Futures Association.

Non-Cleared Contract means a Contract that is not a Cleared Contract.

Non-Directed Voice RFQ means a voice RFQ conducted in accordance with Rule 305(c)(1).

Non-Reviewable Range means the amounts that are above and below the fair market value for each

Contract or Contract type, as set forth in Rule 315.

Notice shall have the meaning set forth in Rule 504.

Option means a Swap whereby one party grants to another the right, but not the obligation, to buy or sell

a Commodity or other Underlying Interest.

Order means an instruction by a Customer to a Participant to execute a transaction on behalf of such

Customer.

Order Book means a Trading Platform in which all Trading Privilege Holders have the ability to enter,

observe and transact on multiple Bids/Offers.

5
Package Transaction means a transaction executed on the Facility or subject to the Rules involving two

or more instruments: (i) that is executed between two or more parties that are Participants or Customers;

(ii) that is priced or quoted as one economic transaction with simultaneous or near simultaneous

execution of all components; (iii) that has at least one component that is a Swap that has been made

available to trade pursuant to section 2(h)(8) of the Act; and (iv) where the execution of each component

is contingent upon the execution of all other components.

Participant means any Trading Privilege Holder, Authorised Trader or Authorised Trading Firm.

Participant Indemnified Party shall have the meaning set forth in Rule 108(f).

Participation Committee shall have the meaning set forth in the Governance Policy.

Permitted Transaction means any transaction involving a Swap that is not subject to the trade execution

requirement in section 2(h)(8) of the Act.

person means any individual, sole proprietorship, corporation, limited liability company, limited liability

partnership, partnership, association, estate, trust, governmental agency, unincorporated organisation or

any other legal entity.

Physical Emergency shall have the meaning set forth in Rule 104.

Position Limit means the maximum position, either net long or net short, in one Series or a combination

of various Series of a particular Class that may be held or controlled by one person, or subject to

aggregation with such person’s position, as prescribed by IGDL and/or Commission.

Pre-Arranged Cross means a Permitted Transaction pre-arranged pursuant to Rule 304(b).

Proceeding shall have the meaning set forth in Rule 108(f).

Proprietary Data and Personal Information means data and information that separately discloses

business transactions, market positions or trade secrets of a person with respect to that person, but

excludes information in a Confirmation or Trade Communication that discloses the identity of another

person.

Public Director means any person who qualifies as a “public director” within the meaning set forth in the

Commission Regulations.

Put Option means an Option whereby (i) the purchaser has the right, but not the obligation, to sell an

Underlying Interest at the strike price specified; and (ii) the grantor has the obligation, upon exercise, to

buy an Underlying Interest at such strike price.

Recipient means a Participant who is a recipient of an RFQ.

Regulatory Agency means any Governmental Authority, including the FCA, the Commission and the

U.S. Securities and Exchange Commission (“SEC”), the NFA and any other SRO, and any organisation,

whether domestic or foreign, granted authority under statutory or regulatory provisions to regulate its own

activities and the activities of its members, not including IGDL.

Regulatory Oversight Committee shall have the meaning set forth in the Governance Policy.

Regulatory Services Provider means an outside organisation which provides regulatory services to

IGDL pursuant to an agreement.

6
Rejected Leg shall have the meaning set forth in Rule 315(i).

Rejected Transactions shall have the meaning set forth in Rule 315(i).

Related Parties shall have the meaning set forth in Rule 107.

Request for Quote or RFQ means a request by one Participant to at least such minimum number of

Participants as may be required by Commission Regulations from time to time for a market quote that

shall constitute a Bid/Offer.

Required Transaction means any transaction involving a Swap that is subject to the trade execution

requirement in section 2(h)(8) of the Act.

Respondent shall have the meaning set forth in Rule 504(a).

Review Panel shall have the meaning set forth in the Governance Policy.

Risk-Based Limits means the risk-based limits established by a Clearing Firm in accordance with

Commission Regulation 1.73.

Rule or Rules means the rules, resolutions, interpretations, statements of policy, decisions, directives

and orders of the Facility (including this Rulebook).

Secretary means the individual appointed by the Board from time to time to serve as secretary of IGDL.

SEF means swap execution facility, as defined in the Act.

Series means all Contracts of the same Class having identical terms.

SRO means self-regulatory organisation.

Swap shall have the same meaning as in the Act and Commission Regulations. Swap Data Repository

or SDR shall have the same meaning as in the Act.

Swap Dealer shall have the same meaning as in the Act and Commission Regulations.

Systems means the Trading Platforms, including various proprietary and third party software, firmware,

hardware, keypads and supporting documentation to which Participants are granted access by IGDL.

System Protocol means the terms from time to time in force upon which a Participant may access a

specific Trading Platform, including any supplemental written guidelines provided by IGDL to the

Participant, as amended from time to time. The System Protocols shall be posted on the Facility’s

website. In the event of any inconsistency between the provisions of any System Protocol and the Rules,

the terms of the System Protocol shall prevail.

Terms Incorporated by Reference shall have the meaning set forth in Rule 312.

Trade Communication shall have the meaning set forth in Rule 312.

Trading Platform means any of the separate electronic central limit order books and other systems

administered by or on behalf of IGDL for the trading of Contracts pursuant to specific System Protocols

for each such system.

7
Trading Privilege Holder means an individual or entity with Trading Privileges on the Facility granted

pursuant to Rule 201 (including an Intermediary), but does not include an Authorised Trading Firm or

Authorised Trader.

Trading Privileges means permission from IGDL given to any Trading Privilege Holder in accordance

with Rule 201 to access the Facility, or to any Authorised Trading Firm or Authorised Trader in

accordance with Rule 202 to access the Facility.

Trading Session means, with respect to any Contract, the period of hours on any Business Day during

which such Contract is available for trading, as specified in the Rules governing such Contract.

Underlying Interest means the interest which is the subject of a Swap.

U.S. Dollar Swap Spread means a Package Transaction in which each of the Swap components has

been made available to trade by IGDL pursuant to section 2(h)(8) of the Act and all other components are

U.S. Treasury Securities.

U.S. Treasury Security means a bond, note, bill or other evidence of indebtedness issued by the United

States Treasury.

Violation means a violation of any of the Rules.

8
GENERAL

Regulatory Status

United Kingdom and the EEA

ICAP Global Derivatives Limited (FRN 191757) is regulated by the FCA and is authorised, among other

things, to:

• arrange (bring about) deals in investments

• deal in investments as agent;

• make arrangements with a view to transactions in investments; and

• operate a MTF (as set in the relevant System Protocol).

IGDL has passporting rights under MiFID in relation to certain of its permissions.

United States of America

IGDL is registered as a SEF with the Commission.

Compliance Oversight

The Chief Compliance Officer and the Head of Compliance and Oversight (CF10), both appointed by the

Board, assist IGDL in meeting its regulatory obligations, as set out by the Commission and the FCA

respectively.

References in this Facility Rulebook and any other related document to the Compliance Function is

intended to mean, for Commission related considerations, the Chief Compliance Officer and, for FCA

related considerations, the CF10. To the extent any of the activities concern both the Commission and

FCA, the Chief Compliance Officer and the CF10 will cooperate to ensure compliance with the respective

regulations.

9
CHAPTER 1 MARKET GOVERNANCE

Rule 101 Board of Directors and Officers

(a) Management. The Board manages, operates and sets policies, including the Governance Policy,

for IGDL and the Facility. The Board has the power to appoint such officers of IGDL as it may deem

necessary or appropriate from time to time.

(b) Governance Policy. The Governance Policy shall be deemed to be part of the Rules, and shall

be deemed to be incorporated herein, to the same extent and with the same force and effect as if set

forth herein in their entirety.

Rule 102 Limitation of Liability

(a) TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND EXCEPT FOR PRIVATE RIGHTS

OF ACTION UNDER SECTION 22(B) OF THE ACT OR IN INSTANCES WHERE AN ICAP PARTY (AS

DEFINED BELOW) HAS BEEN FINALLY ADJUDICATED TO HAVE ENGAGED IN NEGLIGENCE,

WILFUL DEFAULT OR FRAUD, IGDL (INCLUDING ITS RESPECTIVE SUBSIDIARIES AND

AFFILIATES) AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,

CONSULTANTS AND LICENSORS (EACH, AN “ICAP PARTY”), SHALL NOT BE LIABLE TO ANY

PERSON FOR ANY LOSSES, DAMAGES, COSTS OR EXPENSES (INCLUDING, BUT NOT LIMITED

TO, LOSS OF PROFITS, LOSS OF USE, AND DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL

OR PUNITIVE DAMAGES) IN CONTRACT, TORT, OR OTHERWISE AND WHETHER THE CLAIM IS

BROUGHT DIRECTLY OR AS A THIRD PARTY CLAIM, ARISING FROM:

(1) ANY FAILURE, MALFUNCTION, FAULT IN DELIVERY, DELAY, OMISSION,

SUSPENSION, INACCURACY, INTERRUPTION, TERMINATION, OR ANY OTHER

CAUSE, IN CONNECTION WITH THE FURNISHING, PERFORMANCE, OPERATION,

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

SYSTEMS AND SERVICES OF IGDL OR ANY ICAP PARTY, OR SERVICES,

EQUIPMENT OR FACILITIES USED TO SUPPORT SUCH SYSTEMS AND SERVICES,

INCLUDING WITHOUT LIMITATION ELECTRONIC ORDER ENTRY/DELIVERY,

TRADING THROUGH ANY ELECTRONIC MEANS, ELECTRONIC COMMUNICATION

OF MARKET DATA OR INFORMATION, WORKSTATIONS USED BY PARTICIPANTS,

PRICE REPORTING SYSTEMS AND ANY AND ALL TERMINALS, COMMUNICATIONS

NETWORKS, CENTRAL COMPUTERS, SOFTWARE, HARDWARE, FIRMWARE AND

PRINTERS RELATING THERETO; OR

(2) ANY FAILURE OR MALFUNCTION, FAULT IN DELIVERY, DELAY, OMISSION,

SUSPENSION, INACCURACY, INTERRUPTION OR TERMINATION, OR ANY OTHER

CAUSE, OF ANY SYSTEM OR SERVICE OF IGDL OR ANY ICAP PARTY, OR

SERVICES, EQUIPMENT OR FACILITIES USED TO SUPPORT SUCH SYSTEMS OR

SERVICES, CAUSED BY ANY THIRD PARTIES INCLUDING, BUT NOT LIMITED TO,

INDEPENDENT SOFTWARE VENDORS AND NETWORK PROVIDERS; OR

(3) ANY ERRORS OR INACCURACIES IN INFORMATION PROVIDED BY IGDL OR ANY

ICAP PARTY OR ANY OF IGDL’S OR ICAP PARTY’S SYSTEMS, SERVICES OR

FACILITIES; EXCEPT FOR INCORRECT ORDER STATUS; OR

10
(4) ANY UNAUTHORISED ACCESS TO OR UNAUTHORISED USE OF ANY OF IGDL’S

OR ICAP PARTY’S SYSTEMS, SERVICES OR FACILITIES BY ANY PERSON.

(b) NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS (INCLUDING BUT NOT

LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE

OR USE) ARE PROVIDED BY IGDL OR ANY ICAP PARTY, THEIR RESPECTIVE OFFICERS,

DIRECTORS, EMPLOYEES, AGENTS, CONSULTANTS, OR LICENSORS RELATING TO ANY

SYSTEMS OR SERVICES OF IGDL OR ICAP PARTY OR SERVICES, EQUIPMENT OR FACILITIES

USED TO SUPPORT SUCH SYSTEMS OR SERVICES, INCLUDING A TRADING PLATFORM, WHICH

ARE PROVIDED “AS IS” TO PARTICIPANTS. NEITHER IGDL NOR ICAP MAKE ANY

REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED THAT ANY SYSTEMS OR

SERVICES OF IGDL OR ICAP (INCLUDING EACH OF THEIR RESPECTIVE SUBSIDIARIES AND

AFFILIATES) OR SERVICES, EQUIPMENT OR FACILITIES USED TO SUPPORT SUCH SYSTEMS OR

SERVICES, INCLUDING A TRADING PLATFORM, WILL MEET A PARTICIPANT’S REQUIREMENTS,

HAVE UNINTERRUPTED OR ERROR-FREE OPERATION, BE AVAILABLE DURING ANY SPECIFIED

BUSINESS HOURS (WHETHER ADVERTISED OR NOT) OR OPERATE IN CONJUNCTION WITH

OTHER SOFTWARE.

(c) ANY DISPUTE ARISING OUT OF THE USE OF SYSTEMS OR SERVICES OF IGDL OR ANY

ICAP PARTY OR SERVICES, EQUIPMENT OR FACILITIES USED TO SUPPORT SUCH SYSTEMS OR

SERVICES IN WHICH IGDL OR AN ICAP PARTY IS A PARTY MUST BE BROUGHT WITHIN ONE

YEAR FROM THE TIME THAT A CAUSE OF ACTION HAS ACCRUED. ANY SUCH DISPUTE MAY

ONLY BE LITIGATED SUBJECT TO THE RULES OF THIS RULEBOOK AND WILL BE GOVERNED BY

THE LAWS SET OUT IN THIS RULEBOOK.

(d) EXCEPT IN INSTANCES WHERE AN ICAP PARTY HAS BEEN FINALLY ADJUDICATED TO

HAVE ENGAGED IN NEGLIGENCE, WILLFUL DEFAULT OR FRAUD, IN NO EVENT SHALL THE ICAP

PARTIES’ TOTAL COMBINED AGGREGATE LIABILITY FOR ALL CLAIMS ARISING OUT OF ANY

NEGLIGENCE, FAILURES, MALFUNCTIONS, FAULTS IN DELIVERY, DELAYS, OMISSIONS,

SUSPENSIONS, INACCURACIES, INTERRUPTIONS, TERMINATIONS, ORDER STATUS ERRORS

OR ANY OTHER CAUSES, IN CONNECTION WITH THE FURNISHING, PERFORMANCE,

OPERATION, MAINTENANCE, USE OF OR INABILITY TO USE ALL OR ANY PART OF ANY OF

IGDL’S OR AN ICAP PARTY’S SYSTEMS OR SERVICES, OR SERVICES, EQUIPMENT OR

FACILITIES USED TO SUPPORT SUCH SYSTEMS AND SERVICES, OR THE NEGLIGENCE OF IGDL

OR AN ICAP PARTY STAFF, EXCEED $50,000 FOR ALL LOSSES FROM ALL CAUSES SUFFERED

BY ALL PERSONS ON A SINGLE DAY; $200,000 FOR ALL LOSSES SUFFERED BY ALL PERSONS

FROM ALL CAUSES IN A SINGLE CALENDAR MONTH; AND $500,000 FOR ALL LOSSES FROM ALL

CAUSES SUFFERED BY ALL PERSONS IN A SINGLE CALENDAR YEAR.

(e) A CLAIM AGAINST IGDL OR AN ICAP PARTY, ARISING OUT OF ANY FAILURE OR

MALFUNCTION SHALL ONLY BE ALLOWED IF SUCH CLAIM IS BROUGHT IN ACCORDANCE WITH

THIS RULE.

(f) NOTWITHSTANDING THE FOREGOING, THE LIMITATION OF LIABILITY PURSUANT TO

THIS RULE 102 IS LIMITED TO CLAIMS ARISING OUT OF IGDL’S AND AN ICAP PARTY’S

OPERATION OF THE FACILITY AND/OR PROVISION OF SERVICES TO IGDL.

Rule 103 Confidentiality

(a) IGDL shall not, and shall cause its Affiliates not to, use for business or marketing purposes any

Proprietary Data or Personal Information it or any of its Affiliates collects or receives, from or on behalf of

any person, for the purpose of fulfilling IGDL’s regulatory obligations, unless the person who provided

such data or information provides prior written consent to IGDL’s use of such data or information for such

purposes. In furtherance of Applicable Law, IGDL may share such data and information with its Affiliates,

the Commission, the FCA, one or more SEFs, SDRs, DCOs or Designated Contract Markets registered

11
with the Commission, and, to the extent permitted by Applicable Law, other Governmental Authorities,

including those in countries outside the U.S. and U.K. IGDL may, upon request of a Trading Privilege

Holder, provide a list of current Trading Privilege Holders on a confidential basis. The receiving Trading

Privilege Holder shall not disclose the contents of the list without the prior consent of IGDL. Proprietary

Data and Personal Information shall not include aggregated price and volume information not identified

with a specific Participant or Customer, and IGDL may use such aggregated information for business and

marketing purposes.

(b) No IGDL employee shall trade, directly or indirectly, in any:

(1) Contract;

(2) Commodity Interest related to a Contract;

(3) Commodity Interest traded on designated contract markets or SEFs or cleared by DCOs

if the employee has access to material, non-public information concerning such

Commodity Interest; or

(4) Commodity Interest traded on or cleared by a linked exchange if the employee has

access to material, non-public information concerning such Commodity Interest.

(c) No IGDL Affiliate, member of the Board or any committee established by the Board or by or

pursuant to the Rules of the Facility, or any officer or other employee or consultant of IGDL, shall, either

during or after service with IGDL:

(1) trade for such person’s own account, or for or on behalf of any other account, in any

Commodity Interest, on the basis of any material, non-public information obtained

through special access related to the performance of such person’s official duties; or

(2) absent prior written consent of IGDL, use, directly or indirectly, information that is

deemed to be non-public information, or disclose non-public information to others, except

(i) to others within IGDL, IGDL’s Affiliates or to outside advisers thereof or other service

providers for IGDL, provided that such advisors and service providers are subject to

confidentiality obligations, and that, in each case, such disclosure is necessary for the

performance of Facility-related duties by the individual or entity, (ii) if required by a

Regulatory Agency, or (iii) if compelled to do so by valid legal process, provided that the

individual or entity notifies IGDL in advance thereof to the extent permitted.

(d) Subject to Rule 103(a), IGDL shall not, except as reasonably necessary to operate any Trading

Platform, to fulfil its obligations under this Rulebook or to comply with Applicable Law or any request of

the Commission or the FCA, without the prior written consent of a Trading Privilege Holder in each

instance, (i) use in advertising, publicity, marketing or other promotional materials, the name, trade name,

trademark, trade device, service mark or symbol of such Trading Privilege Holder or any of its Affiliates,

or (ii) represent that any product or any service provided by IGDL has been approved or endorsed by

such Trading Privilege Holder or any of its Affiliates.

(e) For purposes of this Rule 103, the terms “employee”, “material information” and “non-public

information” have the meanings ascribed to them in Commission Regulation § 1.59.

Rule 104 Emergency Action

(a) Definitions. As used in this section:

The term “Emergency” shall mean any occurrence or circumstance which, in the opinion of IGDL,

requires immediate action and threatens or may threaten such things as the fair and orderly trading in, or

12
the liquidation of, or delivery pursuant to, any Contracts on the Facility, including any manipulative or

attempted manipulative activity; any actual, attempted, or threatened corner, squeeze, congestion, or

undue concentration of positions; any circumstances which may materially affect the performance of

Contracts traded on the Facility, including failure of the payment system or the bankruptcy or insolvency

of any Participant; any action taken by any Governmental Authority, or any other board of trade, swap

execution facility, market or facility which may have a direct impact on trading on the Facility and any

other circumstance which may have a severe, adverse effect upon the functioning of the Facility.

(b) Emergency action may be taken by the following:

(1) By the Board in the case of any Emergency;

(2) By any two members of the Board in the case of any Emergency where it is impracticable

in the opinion of the Chairman of the Board or in his or her absence, any

two (2) members of the Board, to call a meeting of the Board to deal with the Emergency;

or

(3) By any committee of IGDL pursuant to powers conferred on said committee under the

Rules or by the Board.

(c) Vote Required

The vote required of the Board or committee authorised to take any Emergency action hereunder shall

be:

(1) In the case of action by the Board, the affirmative vote of a majority of the members of

the Board present and voting at a meeting at which there is a quorum; or

(2) In the case of action by a committee, the affirmative vote of two (2) or more persons

constituting not less than a majority of the members of said committee present and voting

at a meeting at which there is a quorum.

The consent in writing to any Emergency action of all members of the Board or of a committee, as

applicable, shall be sufficient to take such Emergency action without a meeting. A member of the Board

or of a committee shall be deemed present or in attendance at a meeting if such a person participates in

the meeting by means of a conference telephone or similar communications equipment allowing all

persons participating in the meeting to hear each other at the same time.

(d) Action which may be taken

(1) In the event of an Emergency, IGDL may, subject to Part 40 of the Commission

Regulations under the Act, place into immediate effect a Rule which may provide for, or

may authorise IGDL, or any committee, to undertake actions which, in the opinion of

IGDL are necessary or appropriate to meet the Emergency, including, but not limited to,

such actions as:

(i) Extending or shortening the expiration date for trading in Contracts;

(ii) Extending the time of delivery under or expiration of Contracts;

(iii) Extending, limiting or changing hours of Trading Sessions;

(iv) Imposing or modifying price limits;

13
(v) Imposing or modifying Position Limits;

(vi) Imposing or modifying intraday market restrictions;

(vii) Ordering the liquidation or transfer of open positions in any Contract;

(viii) Ordering the establishment of a settlement price;

(ix) Suspending trading pursuant to Rule 105 or curtailing trading in any Contract;

(x) Cancel any Bid/Offer;

(xi) Altering any Contract’s settlement terms or conditions prior to execution and

adjusting or cancelling any executed transaction pursuant to Rule 315; and

(xii) Modifying or suspending any provision of the Rules.

(2) In the event of an Emergency when a quorum of the Board is not available, all trading on

the Facility may be suspended by an affirmative vote of a majority of the Directors

present, or by action of one Director if only one Director is present, for such period of

time as in their or his or her judgment is necessary. In the event of an Emergency which

prevents normal attendance at a meeting of the Board, when no Director is present, any

authorised officer of IGDL shall have authority to order suspension of trading on the

Facility for such period of time as in his or her judgment is necessary. Any action taken

under this paragraph (b) shall be subject to review and modification by the Board.

(3) Whenever any action is taken under this Rule pursuant to which trading is suspended or

other changes in procedure are made, all matters relating to notices, deliveries and other

obligations may be suspended or deferred in such manner as the Board or committee, as

the case may be, may determine.

(4) IGDL may be required to take an Emergency action when directed by the FCA or the

Commission. If a Contract is traded both on the Facility and on one or more other swap

execution facilities, any Emergency action to liquidate or transfer of open positions in any

Contract will be made in consultation with the Commission or Commission staff.

(e) Physical Emergencies

(1) In the event the physical functions of the Facility or IGDL are, or are threatened to be,

severely and adversely affected by a physical emergency, such as fire or other casualty,

bomb threat, substantial inclement weather, power failure, communication or

transportation breakdown, computer malfunction, screen-based Trading Platform

break-down, malfunction of plumbing, heating, ventilation and air conditioning systems,

backlog or delay in clearing or in the processing of data related to clearing Cleared

Contracts (a “Physical Emergency”), the Chairman of the Board, or in his or her

absence the Chief Executive Officer, or in both of their absences any other authorised

officer may take any action which, in the opinion of such officer is necessary or

appropriate to deal with the Physical Emergency, including, but not limited to, suspending

trading in any one or more Contracts, delaying the opening of trading in any one or more

Contracts, extending the Last Trading Day and/or the time of trading.

(2) In the event a designated officer has ordered suspension of trading, the Chairman of the

Board or the Chief Executive Officer, or in their absence any other authorised officer may

order restoration of trading on the Facility, or may remove other restrictions so imposed,

14
if such officer determines that the Physical Emergency has sufficiently abated to permit

the physical functions of IGDL or the Facility to continue in an orderly manner.

(f) IGDL will promptly report any action taken hereunder to the Commission and the FCA and

explain the decision-making process, the reasons for the exercise of emergency authority and how any

conflicts of interest were addressed. Any emergency Rule or Rule amendment shall be filed with the

Commission in accordance with Part 40 of the Commission Regulations under the Act.

(g) In exercising its authority under this Rule 104, IGDL shall, in its reasonable discretion, and where

appropriate, permitted by Applicable Law and not precluded by exigent circumstances, consult and

coordinate with DCOs, other swap execution facilities, boards of trade, relevant Participants, and other

parties in considering what actions to take hereunder.

Rule 105 Suspension of Trading

The Board may, in its discretion, by an affirmative vote of a majority of the Directors present at a meeting

at which there is a quorum (which, in an Emergency other than a Physical Emergency, may be held

without previous notice), close the Facility or suspend trading in any one or more Contracts on such days

or portions of days as will, in its judgment, serve to promote the best interest of IGDL.

Rule 106 Risk Controls for Trading

The Regulatory Oversight Committee may impose controls to reduce the potential risk of market

disruption, including but not limited to market restrictions that pause or halt trading in specified market

conditions.

Rule 107 Market Data

(a) Subject to Rule 103, and each Participant’s and Customer’s rights in its own Proprietary Data and

Personal Information, IGDL owns all rights, title and interest in and to all intellectual property and other

proprietary rights (including all copyright, database rights, trademarks and trade secrets, or similar

proprietary rights in any jurisdiction whether or not registrable) in and to any data, analytics, research or

other information (including without limitation Bids/Offers, RFQs, Pre-Arranged Crosses, the contents of

Confirmations and Trade Communications, such Confirmations and Trade Communications themselves,

prices and volumes of transactions) contained in, displayed on, generated by or derived from the Facility

and the Trading Platforms (collectively the “Information”). IGDL shall not decompile or reverse engineer

any of a Participant’s or Customer’s Proprietary Data and Personal Information for the purpose of

ascertaining such Participant’s or Customer’s trading strategies, except to the extent reasonably

necessary for IGDL’s operations, to perform its surveillance and monitoring functions or to otherwise

comply with Applicable Law. Subject to each Participant’s and Customer’s rights in its own Proprietary

Data and Personal Information, each Participant and Customer (i) agrees to keep the Information

confidential and cause each of its employees, Affiliates, Authorised Trading Firms, Customers, agents,

consultants, independent software vendors and other persons affiliated with any of the foregoing, as

applicable (collectively “Related Parties”), to keep the Information confidential, and (ii) agrees not to, and

shall cause its applicable Related Parties not to, sell, lease, license, transfer, provide or otherwise make

available to any third party any form of access to or use of any of the Information.

(b) Subject to paragraph (c) of this Rule 107, each Participant and Customer agrees that it shall not,

and shall cause its Related Parties not to, license, sublicense, transfer, redistribute, resell, alter, enhance,

make derivative works of, download to computer or reverse engineer all or any part of the Information

(other than such Participant’s or Customer’s Proprietary Data and Personal Information).

(c) Notwithstanding paragraph (b) of this Rule 107:

15
(1) Solely (x) for use in connection with a Trading Privilege Holder’s own trading activity (and

not, for the avoidance of doubt, for use by a Trading Privilege Holder’s sales, risk

management (except for use by such Trading Privilege Holder’s compliance and other

risk departments for regulatory purposes), research, wealth management or asset

management departments/functions) or (y) to the extent necessary for a Trading

Privilege Holder’s information technology department to perform transaction-related

support functions for such Trading Privilege Holder, Trading Privilege Holders that:

(i) pay the monthly TPH API Restricted Usage Minimum Fee, as described in

IGDL’s Trade Execution Fee Card, as amended from time to time, shall be

entitled to (x) download Information to a computer and/or (y) create Derived

Information; and

(ii) pay the monthly TPH API Full Usage Minimum Fee, as described in IGDL’s

Trade Execution Fee Card, shall be entitled to (x) download Information to a

computer, (y) create Derived Information and/or (z) redistribute Derived

Information (and only Derived Information).

(2) Customers that are Authorised Trading Firms for which a Trading Privilege Holder has

provided DMA may have access to Information through such Trading Privilege Holder in

connection with such Customer’s trading activity.

(d) IGDL shall bear no liability for any Derived Information, and each Trading Privilege Holder shall

defend, indemnify and hold harmless each SEF Indemnified Party (as defined in Rule 108) from and

against any Losses to which any SEF Indemnified Party may become subject, insofar as such Losses

arise out of or in connection with, or are based upon any Proceeding against a SEF Indemnified Party

that arises out of or relates to any Derived Information created by or on behalf of such Trading Privilege

Holder or any of its Related Parties.

Rule 108 Intellectual Property

(a) The Systems are the exclusive Intellectual Property of IGDL or its affiliates or licensors.

Participants have no access to the Systems and no rights with respect to the Systems, except as

expressly granted by IGDL. Subject to any required approvals from any applicable Regulatory Agency,

IGDL shall have the right to modify at any time a System’s functionality, configuration, appearance,

content and the Swaps made available for trading via a System.

(b) Upon granting Trading Privileges to a Participant, IGDL grants to that Participant a revocable,

non-exclusive, non-transferable license to access and use the Systems in accordance with the Rules for

the sole purpose of (i) entering into Swaps via the Systems, and (ii) receiving and transmitting information

generated by or made available through the Systems from time to time. Such license shall terminate

when the Participant’s Trading Privileges terminate.

(c) Intellectual Property Rights

(1) By becoming a Participant, each Participant acknowledges and agrees that the

Intellectual Property Rights in the Systems are a valuable asset of IGDL or its affiliates or

licensors or their respective successors. Each Participant shall protect and safeguard

the Intellectual Property Rights in and to the Systems by using the same degree of care

that the Participant generally uses to protect its own Intellectual Property Rights and

business assets, but in any event with no less than a reasonable degree of care.

(2) Each Participant shall promptly notify IGDL upon becoming aware of any infringement or

misappropriation of any Intellectual Property Rights of IGDL or its affiliates or licensors.

Each Participant shall comply with all reasonable requests made by IGDL (at IGDL’s

16
reasonable expense) to protect and enforce the Intellectual Property Rights of IGDL or its

affiliates or licensors in the Systems.

(d) Restrictions

(1) Subject to Rule 202, a Participant shall not sell, lease, license, transfer, provide or

otherwise make available to any third party (including an affiliate of Participant), any form

of access to or use of the System.

(2) A Participant shall not alter, enhance, make derivative works of, download to computer,

decompile, disassemble or reverse engineer all or any part of the Systems except solely

to the extent (i) expressly required by Applicable Law or permitted by the Rules, or

(ii) necessary in direct connection with support functions related to transactions on or

subject to the Rules.

(e) Notwithstanding Rule 102, IGDL represents and warrants that it owns or is licensed all

Intellectual Property Rights in or to the Systems.

(f) Indemnities

(1) IGDL shall defend, indemnify and hold harmless each Participant and its officers,

directors, employees and agents (each a “Participant Indemnified Party”) from and

against all Losses as a result of any third party claim or proceeding of any nature

(“Proceeding”) against a Participant Indemnified Party determining that the Systems

(other than the EBS NDF System, which includes but is not limited to the technology

known as EBS Dealing Service and Brokernet), or the use thereof by the Participant

Indemnified Party as authorized hereunder, violates any Intellectual Property Rights of

any third party provided that such Losses do not result from (i) any Participant

Indemnified Party’s fraud, gross negligence or willful misconduct; (ii) violation of

Applicable Law by the Participant Indemnified Party; or (iii) the Participant’s breach of the

Rules.

(2) Each Participant shall defend, indemnify and hold harmless IGDL and each ICAP Party

(each an “IGDL Indemnified Party”) from and against any Losses to which any IGDL

Indemnified Party may become subject, insofar as such Losses arise out of or in

connection with, or are based upon any Proceeding against an IGDL Indemnified Party

that arises out of or relates to any access, use or misuse of the Systems by the

Participant or by any person accessing the Systems using the Participant’s ID provided

that such Losses do not result from (i) an IGDL Indemnified Party’s fraud, gross

negligence or willful misconduct; (ii) violation of Applicable Law by the IGDL Indemnified

Party; or (iii) the IGDL Indemnified Party’s breach of the Rules.

(3) If a Proceeding is commenced against a party entitled to indemnification under this

Rule 108 (the “Indemnified Party”), notice shall be given to the party obligated to

provide such indemnification (the “Indemnifying Party”) as soon as reasonably

practicable. The Indemnifying Party shall be entitled to take control of the Proceeding

and any settlement of it, and the Indemnified Party shall give the Indemnifying Party, at

the Indemnifying Party’s reasonable cost, all reasonable assistance in relation to the

Proceeding.

(4) Notwithstanding anything to the contrary contained in Rule 102 or a System Protocol, no

limitation or exclusion of liability shall apply with respect to any direct losses or claims

based on confidentiality, or to IGDL’s intellectual property infringement indemnification

obligations set forth in this Rule 108.

17
(g) Confidentiality

Each Participant shall keep confidential all Confidential Information of IGDL or IGDL’s affiliates or

licensors, both during the term and after termination of the license granted by this Rule 108. Each

Participant may disclose Confidential Information to its professional advisers but otherwise may only

disclose Confidential Information to those of its employees and representatives who need to know such

Confidential Information for the purposes of exercising or performing the rights and obligations of

Participant under the Rules and have been informed of the confidential nature of the Confidential

Information divulged. No Participant will disclose Confidential Information to any third party except as

follows: (i) with the consent of IGDL; (ii) as necessary to a DCO of which such Participant is a member or

in connection with the clearing of a Swap; (iii) subject to appropriate confidentiality requirements no less

stringent than the confidentiality provisions hereunder, to any person providing services to such party

relating to transactions on or subject to the Rules; or (iv) to IGDL’s Regulatory Services Provider.

(h) Each Participant shall maintain commercially available virus checking software to protect itself

and the Systems from viruses, notify IGDL immediately of any defect in the System or any unauthorized

access or change to the System of which the Participant becomes aware and comply with any security

measures and procedures for authentication required by IGDL from time to time.

18
CHAPTER 2 TRADING PRIVILEGES

Rule 201 Trading Privilege Holders

(a) Trading Privileges

(1) Subject to the requirements and procedures set forth in this Chapter 2, Trading Privileges

will be granted on an impartial basis to all applicants from time to time approved by IGDL

as eligible to be Trading Privilege Holders, subject to any limitations or restrictions from

time to time imposed by IGDL. Trading Privileges are non-transferable (except under

certain limited circumstances which must be approved by IGDL), non-assignable and

may not be sold or leased. Circumstances under which Trading Privileges may be

transferred, subject to IGDL approval, include, for example, transfers due to corporate

reorganisations. Each Trading Privilege Holder will have the right to access the Facility

(including, subject to the applicable System Protocol, any Trading Platform) including the

right to:

(i) place Bids/Offers, RFQs and Pre-Arranged Crosses for each of its proprietary

accounts;

(ii) where permitted under this Rulebook and by Applicable Law, place Bids/Offers,

RFQs and Pre-Arranged Crosses for the accounts of such Customers as an

Intermediary; and

(iii) appoint other persons to act on its behalf as an Authorised Trader or Authorised

Trading Firm pursuant to Rule 202, including providing DMA to a Customer.

(2) By virtue of obtaining Trading Privileges, a Trading Privilege Holder will not obtain any

equity or other interest in IGDL or the Facility, including voting rights or rights to receive

any dividends or other distributions, whether arising from a dissolution, merger or

consolidation involving IGDL, the Facility or otherwise.

(3) In granting Trading Privileges, IGDL may impose such restrictions or limitations as it may

deem necessary or appropriate, and in accordance with Applicable Law. IGDL shall

apply such restrictions or limitations to applicants in an impartial, non-discriminatory

manner, consistent with the Act, Commission Regulations and FCA rules thereunder.

IGDL will deny the grant of Trading Privileges where an applicant has failed to meet any

requirements for such grant.

(b) Financial Requirements

(1) Any person that wishes to have Trading Privileges must have sufficient resources to

guarantee the adequate settlement of transactions pursuant to Rule 204, and must meet

the other financial and related reporting requirements set forth in this Rule 201.

(2) Each Trading Privilege Holder must provide a signed written or electronic representation,

prior to being granted access to the Facility, that it qualifies as an “eligible contract

participant” as defined in the Act upon initial application for Trading Privileges.

(3) Each Trading Privilege Holder shall, no less frequently than annually, provide IGDL either

with (i) its annual financial report that it provides to the Commission or (ii) a written or

19
electronic representation providing that such Trading Privilege Holder has been, and

continues to be as of such date, an “eligible contract participant” as defined in the Act.

(4) Each Trading Privilege Holder must notify IGDL’s Compliance Function immediately upon

becoming aware that it fails to satisfy the minimum financial requirements applicable to it.

(5) Unless and until a Trading Privilege Holder is able to demonstrate to IGDL that it is in

compliance with the minimum financial requirements applicable to it, such Trading

Privilege Holder may not engage in any transactions subject to the Rules of the Facility,

except for the purpose of closing open positions that were opened on the Facility.

(c) Fitness Standards

(1) IGDL may deny the grant of Trading Privileges, or may prevent a person from becoming

an Authorised Trader or Authorised Trading Firm of a Trading Privilege Holder, if such

person:

(i) is unable satisfactorily to demonstrate a capacity to adhere to all applicable

Rules of the Facility or any Regulatory Agency, Rules of any DCO to which the

Trading Privilege Holder submits Cleared Contracts for clearing, Commission

Regulations and SRO regulations, including those concerning recordkeeping,

reporting, financial requirements and trading procedures;

(ii) would bring IGDL or the Facility into disrepute; or

(iii) is otherwise not fit and proper to be a Trading Privilege Holder, Intermediary,

Authorised Trader or Authorised Trading Firm.

(2) IGDL may determine not to permit a Trading Privilege Holder or any Authorised Trader or

Authorised Trading Firm of a Trading Privilege Holder to keep its, his or her Trading

Privileges or maintain his or her association with a Trading Privilege Holder, as the case

may be, if such Trading Privilege Holder, Authorised Trader or Authorised Trading Firm:

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

Authorised Trader or Authorised Trading Firm status after such Trading

Privileges or Authorised Trader or Authorised Trading Firm status has been

approved;

(ii) fails to comply with any limitation placed by IGDL on such Trading Privileges or

Authorised Trader or Authorised Trading Firm status; or

(iii) commits a material Violation.

(3) IGDL may deny the grant of Trading Privileges, or may prevent a person from becoming

an Authorised Trader or Authorised Trading Firm, if they do not have a sufficient level of

trading ability and competence or adequate organisational arrangements.

(4) Any decision made by IGDL pursuant to this Rule 201 must be consistent with both the

provisions of this Rule and the Act and Commission Regulations and FCA rules

thereunder.

(d) IGDL may (i) deny the grant of Trading Privileges, (ii) prevent a person from becoming an

Intermediary or Authorised Trader or Authorised Trading Firm, and (iii) determine not to permit a Trading

Privilege Holder or any Intermediary or Authorised Trader or Authorised Trading Firm to keep its, his or

her Trading Privileges or maintain his, her or its association with a Trading Privilege Holder, as the case

20
may be, if such Trading Privilege Holder, Intermediary, Authorised Trader or Authorised Trading Firm

causes or would cause IGDL to be in violation of Applicable Law.

(e) Consent to Facility Rules

Prior to obtaining access to the Facility and each time a Participant or Customer initiates or executes a

transaction on the Facility, directly or through an Intermediary, each Participant and each Customer shall

be deemed to have expressly consented to the jurisdiction of the Facility and agreed to be bound by and

comply with the Rules. At the time any Clearing Firm provides a Clearing Firm Representation, each

such Clearing Firm shall expressly consent to the jurisdiction of the Facility and agree to be bound by and

comply with the Rules.

Rule 202 Authorised Traders and Authorised Trading Firms

(a) Each Trading Privilege Holder may from time to time permit one or more persons to enter

Bids/Offers, issue and respond to RFQs, submit Pre-Arranged Crosses, access a Trading Platform and

effect transactions in Contracts on the Facility. Such authority may be granted to one or more Authorised

Traders.

(1) Authorised Traders

(i) Each Trading Privilege Holder which is trading for its own account as a principal

may permit one or more individuals as Authorised Traders to enter Bids/Offers

and RFQs and Pre-Arranged Crosses on its behalf. In such case, the Trading

Privilege Holder shall be principal to any resulting transactions made on its

behalf by such Authorised Traders or to one or more Authorised Trading Firms.

(ii) Each Trading Privilege Holder which is an Intermediary trading for the accounts

of Customers may permit one or more individuals as Authorised Traders to enter

Bids/Offers and RFQs and Pre-Arranged Crosses on its behalf as an

Intermediary for such Customers. In such cases, the Trading Privilege Holder

has responsibility for all actions and failures to act of such Authorised Traders,

but the Customer on whose behalf each transaction is made shall be the

principal to any transactions made on its behalf by such Authorised Traders.

(iii) Each Trading Privilege Holder which is an Intermediary trading for the accounts

of Customers that are natural persons may provide such a Customer with DMA

to the Facility by permitting the Customer to become an Authorised Trader to

enter Bids/Offers and RFQs on behalf of the Customer. In such case, the

Customer shall be the principal to any transactions entered into as an Authorised

Trader. As provided for in section (b)(3) below, IGDL may grant or deny DMA to

a Customer in its sole discretion.

(iv) The Trading Privilege Holder shall be responsible to IGDL for acting with

reasonable care in granting Authorised Trader status.

(2) Authorised Trading Firms

(i) Each Trading Privilege Holder which is an Intermediary trading for the accounts

of Customers that are entities may provide such a Customer with DMA to the

Facility by permitting the Customer to become an Authorised Trading Firm and

by permitting one or more individuals associated with the Authorised Trading

Firm to become Authorised Traders to enter Bids/Offers and RFQs on behalf of

the Customer. In such case, the Customer on whose behalf each transaction is

made shall be the principal to any transactions made on its behalf by such

21
Authorised Trading Firm through the Authorised Traders. As provided for in

section (b)(3) below, IGDL may grant or deny DMA to a Customer in its sole

discretion.

(ii) [NOT USED]

(iii) The Trading Privilege Holder shall be responsible to IGDL for acting with

reasonable care in granting Authorised Trading Firm status.

(iv) Each Trading Privilege Holder will obtain a signed written or electronic

representation, prior to being granted access to the Facility, that each of its

Authorised Trading Firms continues to qualify as an “eligible contract participant”

as defined in the Act and provide such representation to IGDL and shall notify

the SEF if any Authorized Trading Firm no longer qualifies as an “eligible

contract participant”.

(b) IGDL Approval

(1) No person may act as an Authorised Trader or Authorised Trading Firm before being

approved to do so by IGDL, which IGDL will do on an impartial basis.

(2) Each prospective Authorised Trader and Authorised Trading Firm, or the Trading

Privilege Holder on their behalf, will, prior to being permitted by IGDL to act as an

Authorised Trader or Authorised Trading Firm, as the case may be, submit an application

in the form required by IGDL and will satisfy such requirements as may be prescribed by

IGDL from time to time.

(3) Each prospective Authorised Trading Firm, or the Trading Privilege Holder on its behalf,

must provide a written or electronic representation, prior to being granted access to the

Facility, that the Authorised Trading Firm qualifies as (x) an “eligible contract participant”

as defined in the Act, and (y) an Eligible Counterparty, and that it has all registrations,

licenses and consents required by its constituent documents and Applicable Law to

transact in Contracts. The foregoing representation may be provided directly to IGDL by

the Authorised Trading Firm in a form provided by IGDL or, alternatively, the Trading

Privilege Holder may provide IGDL evidence satisfactory to IGDL that the Authorised

Trading Firm has provided such consents, agreements and representations to the

Trading Privilege Holder.

(4) DMA to the Facility by an Authorised Trader or an Authorised Trading Firm shall be

granted or denied in the sole discretion of IGDL. IGDL will notify a Trading Privilege

Holder of its approval or disapproval of the designation of an Authorised Trader or

Authorised Trading Firm for DMA. IGDL may, in its sole discretion, revoke or suspend

the designation of an Authorised Trader or Authorised Trading Firm for DMA, and shall

notify the Trading Privilege Holder of such action in accordance with procedures

established by IGDL.

(c) Responsibilities to IGDL

(1) Each Trading Privilege Holder shall notify IGDL in writing if its relationship with an

Authorised Trader or Authorised Trading Firm has been terminated, and such Trading

Privilege Holder may at any time revoke any authorisation granted by it to any Authorised

Trader or Authorised Trading Firm by providing written notice of such revocation to IGDL.

(2) By permitting any of its Authorised Traders and/or Authorised Trading Firm to access and

use the Facility (including any Trading Platform) from any jurisdiction or to act as an

22
Intermediary for trades on behalf of Customers located in any jurisdiction, each Trading

Privilege Holder represents and warrants that each such access to or use of the Facility,

or action as an Intermediary, does not violate any law applicable to the Trading Privilege

Holder, the Authorised Trader, the Authorised Trading Firm or, to such Trading Privilege

Holder’s knowledge, IGDL.

(d) Intermediation

(1) A Participant may not act as an Intermediary for any other entity or person, unless the

Trading Privilege Holder does so in accordance with Applicable Law.

(2) A Trading Privilege Holder may not transact as an Intermediary for any Customer unless

the Trading Privilege Holder has submitted a signed representation to IGDL that each of

its Customers is an “eligible contract participant” as defined in the Act and as an Eligible

Counterparty.

Rule 203 Financial Integrity

(a) Each Trading Privilege Holder, Authorised Trading Firm and Customer must be an “eligible

contract participant” as defined in the Act and an Eligible Counterparty (i) prior to obtaining access to the

Facility, and (ii) at the time that such person enters into each transaction on the Facility or subject to the

Rules.

(b) For Cleared Contracts:

(1) each Trading Privilege Holder or Authorised Trading Firm transacting on the Facility as a

principal is required to demonstrate to IGDL, with appropriate documentary evidence as

required by IGDL from time to time, that such Trading Privilege Holder or Authorised

Trading Firm is a Clearing Firm or that it has clearing arrangements in place with a

Clearing Firm, including having the Clearing Firm Representation required by

Rule 204(f); and

(2) each Trading Privilege Holder acting as an Intermediary shall confirm that each of its

Customers has clearing arrangements in place with a Clearing Firm and obtain from its

Customers any documentary evidence as required by IGDL from time to time to that

effect, including any Clearing Firm Representation required by Rule 204(f). The Trading

Privilege Holder shall provide such documentary evidence to IGDL.

(c) For Contracts listed on the Facility as bilateral Contracts, each Trading Privilege Holder,

Authorised Trading Firm or Customer that enters into such Contracts as a principal must undergo such

credit checks and provide such credit information as the Facility may require from time to time.

Rule 204 Clearing

(a) All Contracts executed on the Facility that are subject to mandatory clearing under Section 2(h) of

the Act must be cleared through a DCO by a Clearing Firm. Any other Contracts executed on the Facility

may be cleared at the discretion of the parties to such transaction; provided that such Contracts are able

to be cleared through a DCO by a Clearing Firm. After being submitted to and accepted by the relevant

DCO, each Cleared Contract will be subject to the rules, policies and procedures of such DCO.

(b) Pre-Execution Credit Check / Risk Screening.

(1) In advance of submitting each Bid/Offer or Pre-Arranged Cross to the Facility for any

Cleared Contract, each Trading Privilege Holder or Authorised Trading Firm shall identify

23
the Clearing Firm to which any resulting transaction will be submitted for clearing at the

relevant DCO and:

(i) if acting as principal, shall ensure that it has sufficient credit with such Clearing

Firm for the resulting transaction and that the resulting transaction satisfies such

Clearing Firm’s Risk-Based Limits; and

(ii) if acting as an Intermediary, other than with respect to DMA, shall confirm that its

Customer has sufficient credit with the Customer’s Clearing Firm for the resulting

transaction and that the resulting transaction satisfies such Clearing Firm’s RiskBased Limits.

In the event that there is insufficient credit or the transaction does not satisfy a Clearing Firm’s RiskBased Limits, the Trading Privilege Holder or Authorised Trading Firm may not submit such Bid/Offer or

Pre-Arranged Cross to the Facility.

(2) Each Clearing Firm that provides a Clearing Firm Representation for a Participant or

Customer may notify IGDL of the Risk-Based Limits it has established for such

Participant or Customer, and such Risk-Based Limits shall become effective upon

acknowledgment of receipt by IGDL. Any change to such Risk-Based Limits shall

become effective only upon acknowledgment of receipt by IGDL.

(c) A Clearing Firm that seeks to effect transactions on the Facility for its own account or the account

of any Customer must be a Trading Privilege Holder.

(d) IGDL may share information with any DCO that would assist such DCO in evaluating and

monitoring a Clearing Firm’s compliance with these criteria. A Clearing Firm agrees to cooperate with

IGDL and each relevant DCO in any such monitoring.

(e) Clearing Firms shall clear Cleared Contracts in accordance with all applicable Rules and DCO

rules.

(f) Clearing Firm Representation

(1) Each Trading Privilege Holder or Authorised Trading Firm that is not a Clearing Firm and

is transacting in Cleared Contracts on the Facility as a principal shall obtain a

representation from a Clearing Firm, in form and substance satisfactory to, and approved

by, IGDL (a “Clearing Firm Representation”). Under such representation, the Clearing

Firm must accept for clearing all Cleared Contracts of each Trading Privilege Holder or

Authorised Trading Firm for which it clears Cleared Contracts, subject to any Risk-Based

Limits that are in effect pursuant to Rule 204(b)(2). Where a Trading Privilege Holder or

Authorised Trading Firm uses the services of multiple Clearing Firms, a Clearing Firm

shall be responsible only to the extent that it has been designated by such Trading

Privilege Holder or Authorised Trading Firm to clear a particular Cleared Contract.

(2) Each Trading Privilege Holder acting as Intermediary shall obtain from the Customer a

Clearing Firm Representation from a Clearing Firm pursuant to which the Clearing Firm

accepts for clearing all transactions in Cleared Contracts entered into by the Customer,

subject to any Risk-Based Limits that are in effect pursuant to Rule 204(b)(2). Where a

Customer uses the services of multiple Clearing Firms, a Clearing Firm shall be

responsible only to the extent that it has been designated by such Customer to clear a

particular Cleared Contract.

(3) Every Contract that is subject to a Clearing Firm Representation and results from a

Bid/Offer or Pre-Arranged Cross that is within any Risk-Based Limits that are in effect

24
pursuant to Rule 204(b)(2) is deemed accepted for clearing by the Clearing Firm upon

execution.

(4) A Clearing Firm may at any time (but on prior written notice to IGDL) revoke any Clearing

Firm Representation made by it to a Trading Privilege Holder, Authorised Trading Firm or

Customer (as applicable) in accordance with paragraph (1) and/or (2) above, by

providing prior written notice of such revocation to IGDL. The Clearing Firm

Representation will remain in effect for all Contracts for which Bids/Offers or PreArranged Cross were submitted to a Trading Platform prior to IGDL’s acknowledgment of

the revocation, which IGDL shall undertake to effectuate as promptly as practicable.

(5) Each Trading Privilege Holder, Authorised Trading Firm or, if applicable, Customer must

assist its Clearing Firm and the DCO in the clearing of its Cleared Contracts.

(6) Upon notice that a Clearing Firm has revoked any authorisation granted and Clearing

Firm Representation made by it to a Trading Privilege Holder, Authorised Trading Firm or

Customer pursuant to this Rule 204(f), the right of such Trading Privilege Holder,

Authorised Trading Firm or Customer (as applicable) to enter into Cleared Contracts will

be automatically terminated, and such Trading Privilege Holder, Authorised Trading Firm

or Customer must obtain another Clearing Firm Representation from a Clearing Firm

before the Trading Privilege Holder’s, Authorised Trading Firm’s or Customer’s right to

access to trade Cleared Contracts via the Facility will be reinstated.

(g) A DCO may be given access to the Facility for the purpose of obtaining any information required

by the DCO to clear contracts, including, without limitation, real-time data regarding Bids/Offers, PreArranged Crosses and the execution of transactions. IGDL may impose such restrictions on a DCO’s

access that it determines, in its sole discretion, are necessary and appropriate.

(h) Failure to Clear

(1) Subject to a Clearing Firm’s obligation to accept for clearing all Contracts resulting from

Bids/Offers or Pre-Arranged Crosses that satisfy the Risk-Based Limits in effect for a

Participant or Customer, any Cleared Contract, including one leg of a Package

Transaction, that is rejected for clearing by a Clearing Firm or DCO for any reason,

including an error by IGDL in permitting a Bid/Offer or Pre-Arranged Cross to be made

that did not satisfy the Risk-Based Limits in effect at the time the Bid/Offer or PreArranged Cross was made, shall be void ab initio and will be cancelled by IGDL. For the

avoidance of doubt, any component leg of a Package Transaction that was accepted for

clearing will not be affected by the rejection of another leg of the same Package

Transaction.

(2) Any Contract, including any component leg of a Package Transaction, that was executed

on the Facility without the intent to be cleared, but later determined by the parties to the

transaction to be cleared, will not be void if rejected for clearing by a DCO to which the

Contract or component leg of the Package Transaction was submitted.

(3) In the event a Cleared Contract, including one leg of a Package Transaction, is cancelled

by IGDL pursuant to this Rule 204(h), IGDL will report such cancellation to the relevant

SDR pursuant to Part 43 of the Commission Regulations.

(4) Any transaction cancelled under this Rule 204(h) (except for transactions rejected by a

DCO for credit reasons) may be re-executed pursuant to the procedures set forth in

Rule 315(i).

25
(i) Submission of Cleared Contracts to DCOs

(1) IGDL shall route each Cleared Contract executed on the Facility and accepted for

clearing by a Clearing Firm to the DCO identified pursuant to Rule 208(d) as soon as

technologically practicable after execution, and in no event later than ten (10) minutes

after execution. IGDL may do so either by submitting the Cleared Contract directly to the

DCO or by routing the Cleared Contract through an Affirmation Hub.

(2) Cleared Contracts that are routed through an Affirmation Hub shall be routed in

accordance with the following procedures:

(i) All Cleared Contracts executed as Pre-Arranged Crosses, via Voice RFQ or on

the Order Book with the assistance of an Execution Specialist, must be Affirmed

by Participants or Customers, as applicable, as soon as technologically

practicable after execution, and in no event later than ten (10) minutes after

execution; and

(ii) All other Cleared Contracts shall be automatically submitted by the Affirmation

Hub to the relevant DCO as soon as technologically practicable after receipt from

IGDL, without Participants or Customers being provided the opportunity to Affirm.

(3) Failure by a Participant or Customer to Affirm a Cleared Contract routed through an

Affirmation Hub within the ten (10) minute time frame required by this Rule 204(i) shall be

a Violation; provided that:

(i) such failure shall be a Violation only by the Participant(s) or Customer(s), as

applicable, that failed to Affirm the Cleared Contract in accordance with this Rule;

and

(ii) no such failure shall be a Violation where the failure was substantially the result

of, as determined in IGDL’s discretion, any errors or delays caused by IGDL or

any Execution Specialist.

(4) The Compliance Function or a designated member of the Market Regulation Staff shall,

on a monthly basis, review the previous month’s Affirmations by Participants and

Customers for compliance with this Rule 204(i). Notwithstanding such regular monthly

reviews, the Compliance Function or any member of the Market Regulation Staff may

investigate possible Violations of this Rule 204(i) at any time upon becoming aware of

such possible Violation. Investigations of possible Violations of this Rule 204(i) shall be

conducted in accordance with Rule 502, including that the Compliance Function may

determine to impose summary fines in accordance with Rule 516. The Compliance

Function or a designated member of the Market Regulation Staff shall review each

possible Violation of this Rule 204(i) in light of all the facts and circumstances, including

whether any errors or delays were caused by IGDL or any Execution Specialist.

(j) FICC Clearing Member Representation

(1) Each Trading Privilege Holder that is not a FICC Clearing Member and is transacting in

the Swap component of a U.S. Dollar Swap Spread on the Facility as a principal shall

provide evidence, in form and substance satisfactory to, and approved by, the Facility

that a FICC Clearing Member will accept for clearing all U.S. Treasury Security

components of a U.S. Dollar Swap Spread executed on the Facility prior to such time as

the Facility acknowledges withdrawal of such obligation pursuant to Rule 204(j)(3) (a

“FICC Clearing Member Representation”).

26
(2) Each Trading Privilege Holder acting as Intermediary shall obtain from the Customer

evidence of a FICC Clearing Member Representation with respect to all U.S. Treasury

Security components of a U.S. Dollar Swap Spread executed on the Facility for such

Customer and submit such evidence to the Facility in form and substance satisfactory to,

and approved by, the Facility.

(3) A Trading Privilege Holder, on its own behalf or on behalf of its Customer, as the case

may be, may at any time withdraw any FICC Clearing Member Representation upon prior

written notice of such withdrawal to the Facility and acknowledgement of such withdrawal

by the Facility.

(4) Each Trading Privilege Holder or, if applicable, Customer must assist its FICC Clearing

Member and FICC in the clearing of its Cleared Treasury Securities.

(5) Upon the withdrawal of a FICC Clearing Member Representation by a Trading Privilege

Holder pursuant to Rule 204(j)(3), the right of such Trading Privilege Holder or its

Customer (as applicable) to enter into the Swap component of U.S. Dollar Swap Spreads

will be automatically terminated, and such Trading Privilege Holder (on its own behalf, or

on behalf of its Customer, as the case may be) must provide new evidence of a FICC

Clearing Member Representation from a FICC Clearing Member before the Trading

Privilege Holder’s or Customer’s right to enter into the Swap component of U.S. Dollar

Swap Spreads via the Facility will be reinstated.

(6) Each Participant or, where a transaction is on behalf of a Customer, the relevant

Customer, is obligated to settle all U.S. Treasury Security components of a U.S. Dollar

Swap Spread where the Swap component is traded on the Facility. Any failure to settle

such U.S. Treasury component shall be a Violation; provided that, in the event FICC

rejects such U.S. Treasury Security for clearing due to operational error beyond the

control of the relevant Participant or Customer, the failure to settle such U.S. Treasury

component shall not be a Violation.

(k) Breakage Agreements Prohibited. Participants and Customers are prohibited from requiring a

Breakage Agreement from any other Participant or Customer as a condition of trading with that other

Participant or Customer.

Rule 205 Application for and Grant of Trading Privileges

(a) Application Requirement. Each applicant for Trading Privileges will submit an application to IGDL

in a form and manner prescribed by IGDL. Each applicant will promptly update the application materials

if any of the information provided therein becomes inaccurate or incomplete after the date of submission

and prior to any approval of the application. IGDL will act upon, and approve or disapprove, any such

application without unreasonable delay.

(b) Upon submission of an application and satisfaction of the requirements and procedures set forth

in this Chapter 2, and approval by IGDL, a person applying for Trading Privileges will be granted Trading

Privileges. If the application process is not completed by the applicant within six months of submission of

an application and payment of any applicable fee, the application will be deemed to be withdrawn.

(c) Any applicant who has been denied Trading Privileges or Authorised Trader or Authorised

Trading Firm status with a Trading Privilege Holder, and any Trading Privilege Holder or Authorised

Trader or Authorised Trading Firm of a Trading Privilege Holder who is not permitted to keep its, his or

her Trading Privileges or maintain his or her status as an Authorised Trader or Authorised Trading Firm

may request an appeal of IGDL’s decision pursuant to the procedures set forth in Rule 205(e). No

determination of IGDL to discontinue a person’s Trading Privileges or Authorised Trader or Authorised

27
Trading Firm status will take effect until the review procedures hereunder have been exhausted or the

time for review has expired.

(d) Any applicant to become a Trading Privilege Holder who has been denied Trading Privileges

pursuant to this Rule 205 will not be eligible for re-application during the six months immediately following

such denial.

(e) Appeal of Denial of Trading Privileges or Suspension or Termination of Access

(1) If IGDL, pursuant to this Rule, denies an application for Trading Privileges or association

with a Trading Privilege Holder as an Authorised Trader or Authorised Trading Firm, or

determines not to permit a person to keep its Trading Privileges or maintain its

association as an Authorised Trader or Authorised Trading Firm, or suspends or revokes

a Participant’s or Customer’s access to the Facility pursuant to Rule 206(a) or (e), then,

in any such case, the affected applicant, Trading Privilege Holder, Authorised Trader

Authorised Trading Firm, Participant or Customer, as the case may be, within seven days

after receiving written notice of such decision, may request in writing that IGDL provide

the reasons therefor in writing. Within 14 days of receiving any such written request,

IGDL will provide the applicant, Trading Privilege Holder, Authorised Trader, Authorised

Trading Firm, Participant or Customer, as the case may be, with such reasons in writing.

Within 14 days of receiving IGDL’s written response, the applicant, Trading Privilege

Holder, Authorised Trader, Authorised Trading Firm, Participant or Customer, as the

case may be, may request, in writing, that the Participation Committee reconsider IGDL’s

initial decision and may provide any written representations or other information that the

applicant, Trading Privilege Holder, Authorised Trader, Authorised Trading Firm,

Participant or Customer, as the case may be, believes is relevant to the reconsideration.

(2) Within 28 days of receiving either a written request for reconsideration or written

representations or information from the applicant, Trading Privilege Holder, Authorised

Trader, Authorised Trading Firm, Participant or Customer, as the case may be, or a

statement from such person that no such representation or information is to be made or

supplied, the Participation Committee will either confirm, reverse or modify the initial

decision and will promptly notify the applicant, Trading Privilege Holder, Authorised

Trader, Authorised Trading Firm, Participant or Customer, as the case may be,

accordingly. The Participation Committee may in its discretion schedule a hearing or

establish any other process that it believes is necessary and appropriate to consider the

request for reconsideration. Any decision by the Participation Committee pursuant to this

subparagraph (2) constitutes the final action of IGDL with respect to the matter in

question and is not subject to appeal. Any action that may be taken by the Participation

Committee under this Rule 205(e) or (f) may be taken by the Board if no Participation

Committee has been established.

(f) Effective Date of Denial of Trading Privileges or Suspension or Termination of Access

(1) If IGDL, pursuant to this Rule, makes a final determination to deny an application for

Trading Privileges or association with a Trading Privilege Holder as an Authorized Trader

or Authorized Trading Firm, or determines not to permit a person to keep its Trading

Privileges or maintain its association as an Authorized Trader or Authorized Trading

Firm, or suspends or revokes a Participant’s or Customer’s access to IGDL pursuant to

Rule 206(a) or (e), then the Participation Committee shall provide written notice within

thirty (30) days of its determination to the applicant, Participant or Customer, as

applicable. The written notice must include:

(i) the name of the applicant, Participant or Customer;

28
(ii) a statement of the Participation Committee’s reasons for the denial of Trading

Privileges, suspension or revocation of access to IGDL, including a listing of any

Rules the Participation Committee determined were Violated and whether the

Violation resulted in any financial harm to Customers;

(iii) a statement of the conclusions and findings of the Participation Committee with

respect to each Violation, or, in the event of a settlement, a statement specifying

the alleged Violations;

(iv) the terms of the denial of Trading Privileges, suspension or revocation of access

to IGDL;

(v) the date on which the determination was made and the effective date of the

determination; and

(vi) a statement informing the applicant, Participant or Customer that the denial of

Trading Privileges, suspension or revocation of access to IGDL may be appealed

to the Commission pursuant to Part 9 of the Commission Regulations.

(2) IGDL shall also provide the written notice to the NFA through the NFA’s Background

Affiliation Status Information Center (“BASIC”), or deliver the written notice to NFA to be

input into BASIC.

(3) Any decision by IGDL to deny Trading Privileges or to suspend or revoke access to IGDL

pursuant to this Rule shall be the final decision of IGDL and shall become effective in

accordance with the timeline set forth in Rule 513(b).

(4) If IGDL denies Trading Privileges or to suspends or revokes access to the SEF pursuant

to this Rule, it must publicly publish the information contained in the written notice

pursuant to Rule 205(f)(1).

Rule 206 Participant and Customer Obligations; Suspension or Termination of Access

(a) Each Participant and Customer must comply with these Rules, applicable provisions of the Act,

and relevant Commission Regulations and FCA rules. Each Participant and Customer must also

cooperate promptly and fully with IGDL, its agents, its Regulatory Services Provider, and/or a Regulatory

Agency in any investigation, call for information, inquiry, audit, examination, or proceeding. Such

cooperation shall include a duty to provide supplemental verbal or other information if the Participant or

Customer learns that a previous response is incomplete or incorrect in any material respect. Additionally,

each Trading Privilege Holder must update its email address promptly after any change and update all

other material information provided in its application for Trading Privileges within five days after that

information has changed. If any Participant or Customer fails to satisfy these obligations, IGDL may

revoke or suspend the Participant’s or Customer’s access to the Facility in full or in part.

(b) Each Participant and Customer consents to allow IGDL to provide all information IGDL has about

the Participant or Customer, including the Participant’s or Customer’s trading activity, to the Regulatory

Services Provider, the Commission 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,

judicial tribunals and any other service provider to IGDL solely in connection with the service provider’s

performance of services to IGDL and subject to the service provider’s agreeing to maintain such

information as confidential, including that such service provider shall not:

(1) use such information for any purpose other than in connection with providing services to

the Facility (including that it may not otherwise use such information for its own business

29
or marketing purposes), unless specifically required in order to fulfill such service

provider’s regulatory obligations; or

(2) disclose such information to any other person, except (i) to its employees or Affiliates,

provided that the employees or Affiliates are subject to confidentiality obligations at least

as stringent as those applicable to the service provider, and that, in each case, such

disclosure is necessary for the performance of services to the Facility by the service

provider, or (ii) if compelled to do so by valid legal or regulatory process, provided that

the service provider notifies IGDL in advance thereof to the extent permitted.

(c) Each Participant is required to review the “Notices” section of IGDL’s website to make itself

aware of material changes to these Rules or other notices that may affect their rights and obligations as a

Participant.

(d) Each Trading Privilege Holder must diligently supervise all activities of the Trading Privilege

Holder’s employees and/or agents, including all Authorised Traders and Authorised Trading Firms

relating to transactions effected on the Facility. Any Violation by any employee of a Trading Privilege

Holder, including an Authorised Trader or Authorised Trading Firm, shall constitute a Violation by such

Trading Privilege Holder.

(e) IGDL may revoke or suspend a Participant’s access to the Facility in full or in part if the

Participant acts as an Intermediary on behalf of a Customer and such Customer maintains a position in

any Contract that, when considered in light of the other positions maintained by the Participant through

which such Customer accesses the Facility, and any other factors that IGDL reasonably deems relevant,

IGDL reasonably believes could jeopardise the financial safety of such Participant or any of such

Participant’s other Customers. In making this determination, IGDL may consider any relevant factors,

including, as applicable, (i) the positions maintained by such Participant, such Participant’s Authorised

Traders, Authorised Trading Firms and other Customers, (ii) financial information provided by such

Participant; and (iii) in consultation and coordination with the relevant DCOs, the level of margin

maintained by such Participant at such Participant’s Clearing Firm.

(f) Each Trading Privilege Holder which is a Swap Dealer or Major Swap Participant and enters into

or facilitates a Swap that is subject to mandatory clearing under Section 2(h) of the Act shall be

responsible for compliance with the mandatory trading requirement under Section 2(h)(8) of the Act.

Rule 207 Customers

(a) No Participant shall act as an Intermediary unless the Trading Privilege Holder has entered into

an agreement with the Customer that provides that the Customer agrees that all Contracts shall be

governed by the Rules, the Act and the Commission Regulations and FCA rules, insofar as they are

applicable to that Contract, although no such agreement shall be required by these Rules when the

Customer of a Trading Privilege Holder is another Trading Privilege Holder.

(b) Where a Customer and Intermediary are both Trading Privilege Holders, the Customer shall

provide IGDL with such notice of the relationship as IGDL may require from time to time.

(c) Each Customer shall be the principal to all executed transactions resulting from any Bids/Offers

or Pre-Arranged Crosses entered on behalf of the Customer. Where a Participant is acting as an

Intermediary on behalf of a Customer, the Participant shall have no liability, whether or not the identity of

the Customer has been disclosed, in respect of any transactions executed on behalf of a Customer, to

any other party, including any other Participant or the Customer of any other Participant.

(d) Except to the extent that IGDL sends Confirmations of Contracts directly to the relevant

Customer, each such Customer authorises IGDL to send Confirmations of Contracts entered into through

30
an Intermediary to the Intermediary and authorises such Intermediary to accept such Confirmations on

behalf of the Customer.

Rule 208 Recordkeeping

(a) Each Participant and Customer must prepare and keep current all books, ledgers and other

similar records required to be kept by it pursuant to Applicable Law and the Rules of the Facility.

(b) Each Participant and Customer shall keep records of the Swaps it trades on or subject to the

Rules, and of its trading in each index, instrument or commodity underlying such Swaps, as well as of its

trading of other derivatives that are based on any such index, instrument or commodity. These records

shall include records of purchases, sales, ownership, production, processing and use of such Swaps,

indices, instruments, commodities and derivatives, and may be in the form customarily generated in

accordance with sound commercial practices in the relevant markets.

(c) Each Participant and Customer must keep all books and records required to be kept by it

pursuant to the Rules for a period of five years from the date on which they are first prepared, unless

otherwise provided in the Rules or required by Applicable Law. Such books and records must be readily

accessible during the first two years of such five-year period. During such five- year period, all such

books and records must, where Applicable Law requires it, be made available for inspection by, and

copies thereof must be delivered to IGDL, IGDL’s Regulatory Services Provider, the Commission, the

U.S. Department of Justice, the FCA, any other European Union regulatory agency governing a

Participant and/or Customer and the authorised representatives of the foregoing, upon request.

(d) The following information must be provided to IGDL by each Participant prior to entering a

Bid/Offer or Pre-Arranged Cross with respect to any Swap traded on the Facility:

• Authorised Trader ID

• Trading Privilege Holder ID

• Swap

• Series, if applicable

• DCO where Swap is to be cleared

• Price

• Quantity

• Side of the Bid/Offer

• Customer Type Indicator Code (defined below)

• Trading account and other relevant account information, including Clearing Firm

• LEI of the Participant placing the Bid/Offer or initiating the RFQ

• For Intermediated Transactions, the LEI of the Customer

• Yes/no indication of whether the Participant or Customer is a Swap Dealer for that Swap

• Yes/no indication of whether the Participant or Customer is a Major Swap Participant

31
• Yes/no indication of whether the Participant or Customer is a Financial Entity

• Yes/no indication of whether the Participant or Customer is a U.S. person as defined by

the Commission;

• For Cleared Contracts, confirmation of the availability of credit at the Clearing Firm to

which any resulting transaction will be submitted for clearing at the relevant DCO;

• Any information required by the applicable System Protocol; and

• If the Swap will be allocated:

o an indication that the Swap will be allocated;

o the LEI of the Account Manager;

o if the Swap is a pre-execution allocated Swap, the account and LEI for each

Customer that will receive allocations;

o an indication of whether the Swap is a post-execution allocation Swap; and

o if the Swap is a post-execution allocation Swap, the unique Swap identifier of the

original transaction between the reporting counterparty and the agent.

For purposes of this Rule 208, the “Customer Type Indicator Codes” are as follows:

CTI 1 – Bid/Offer for the proprietary account of a Trading Privilege Holder that is a natural person.

CTI 2 – Bid/Offer for the proprietary account of a Trading Privilege Holder that is not a natural

person.

CTI 3 – Bid/Offer which an individual Trading Privilege Holder or Authorised Trader executes for

the proprietary account of another Trading Privilege Holder or for an account which the other

Trading Privilege Holder controls or has an ownership or financial interest in.

CTI 4 – Any Bid/Offer not meeting the definition of CTI 1, 2 or 3, including those entered on

behalf of Customers.

(e) The Rules regarding the recordkeeping obligations set forth in this Rule 208 shall be promulgated

to achieve the purposes and requirements of Applicable Law. While IGDL will have sole discretion,

subject to Applicable Law, to determine such Rules, IGDL will take into consideration in doing so

comparable requirements applicable to Participants.

Rule 209 Communications of IGDL with Participants

(a) Written Notices

IGDL will publish a notice with respect to each addition to, modification of, or clarification of the Rules, or

of any action taken to implement any Rule, in a form and manner that is reasonably designed to enable

each Trading Privilege Holder to become aware of and familiar with, and to implement any necessary

preparatory measures to be taken by it with respect to, such addition or modification, prior to the effective

date thereof; provided that any failure of IGDL to so publish a notice will not affect the effectiveness of the

addition or modification in question. Each Trading Privilege Holder will provide its respective Authorised

Traders, Authorised Trading Firms and Customers with copies of any such notice. For purposes of

publication in accordance with the first sentence of this Rule 209(a), it will be sufficient (without limiting

32
the discretion of IGDL as to any other reasonable means of communication) if a notice is (a) sent to each

Trading Privilege Holder by mail, recognised courier service, facsimile or electronic mail (including by

means of a hyperlink included in an electronic mail message), to the address, facsimile number or

electronic mail address (as applicable) provided by such Trading Privilege Holder for such purpose or

(b) published on the Facility’s website. Each Trading Privilege Holder, on its own behalf, and on behalf of

its Authorised Traders, Authorised Trading Firms and Customers, as applicable, must monitor the

Facility’s website for any notices published under this Rule 209(a).

(b) Recording of Communications

IGDL and Trading Privilege Holders may record conversations and retain copies of electronic

communications between officers, employees or agents of IGDL, on the one hand, and Trading Privilege

Holders (including their Affiliates), Authorised Traders, Authorised Trading Firms or Customers, on the

other hand. Any such recordings or other records may be retained by IGDL or such Trading Privilege

Holder, as the case may be, in such manner and for such periods of time as IGDL, or such Trading

Privilege Holder, as the case may be, may deem necessary or appropriate.

Rule 210 Required Disclosures to IGDL

Each Trading Privilege Holder must promptly notify IGDL in writing upon becoming aware:

(a) that the Trading Privilege Holder, any of the Trading Privilege Holder’s officers or any of the

Trading Privilege Holder’s Authorised Traders or Authorised Trading Firms has been the subject of a

material sanction, penalty or other adverse action by any Regulatory Agency which is related to

transactions in Swaps, futures, options on futures, securities, commodities, or Swaps-related banking;

(b) that the Trading Privilege Holder, any of the Trading Privilege Holder’s officers or any of the

Trading Privilege Holder’s Authorised Traders or Authorised Trading Firms has been convicted of, pled

guilty or no contest to, or entered in a plea agreement of a material nature in any domestic, foreign or

military court which involves:

(1) embezzlement, theft, extortion, fraud, fraudulent conversion, forgery, counterfeiting, false

pretences, bribery, gambling, racketeering, or misappropriation of funds, securities or

properties; or

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

commodities, or Swaps-related banking;

(c) that the Trading Privilege Holder, any of the Trading Privilege Holder’s officers or any of the

Trading Privilege Holder’s Authorised Traders or Authorised Trading Firms is subject to material

regulatory proceedings before any Regulatory Agency which are related to transactions in Swaps,

futures, options on futures, securities, commodities, or Swaps-related banking;

(d) that the Trading Privilege Holder, any of the Trading Privilege Holder’s officers or any of the

Trading Privilege Holder’s Authorised Traders or Authorised Trading Firms have been denied or

withdrawn any application for registration or license submitted to any Regulatory Agency, and of any

material revocation, suspension or conditioning of any registration or license granted by any Regulatory

Agency, which in each case is related to transactions in Swaps, futures, options on futures, securities,

commodities, or Swaps-related banking;

(e) that any of the Trading Privilege Holder’s Authorised Traders or Authorised Trading Firms have:

33
(1) had their status as an Authorised Trader or Authorised Trading Firm permanently

revoked by the Trading Privilege Holder, whether due to employment termination,

termination of status as a Customer or otherwise; or

(2) had their access to the Facility temporarily revoked by the Trading Privilege Holder;

(f) of any material change:

(1) in any information contained in the Trading Privilege Holder’s membership application, or

in an Authorised Trader’s or Authorised Trading Firm’s application pursuant to Rule 202,

including a Trading Privilege Holder’s, Authorised Trading Firm’s or Customer’s status as

an “eligible contract participant” or an Eligible Counterparty; or

(2) to an Authorized Trader’s or Authorized Trading Firm’s signed representation to IGDL

that each of its Customers is an “eligible contract participant” pursuant to Rule 202(d);

(g) of any withdrawal from membership by the Trading Privilege Holder, any of the Trading Privilege

Holder’s officers or any of the Trading Privilege Holder’s Authorised Traders or Authorised Trading Firms,

in any SRO, designated contract market, DCO or swap execution facility;

(h) of any damage to, or failure or inadequacy of, the systems, facilities or equipment used to effect

transactions or perform financial obligations under or in connection with Contracts of the Trading Privilege

Holder or any of its Authorised Traders or Authorised Trading Firms;

(i) of any change in the location of the principal office of the Trading Privilege Holder or any of the

Trading Privilege Holder’s Authorised Traders or Authorised Trading Firms;

(j) of any failure to maintain segregated funds as required by the Commission when the Trading

Privilege Holder is a futures commission merchant registered with the Commission;

(k) of becoming subject to early warning reporting under Commission Regulation 1.12; and

(l) of becoming the subject of a bankruptcy proceeding or being unable to meet any financial

obligation as it becomes due.

Rule 211 Dues, Fees and Expenses

(a) The Board has the sole power to set the payment dates and amounts of any dues, assessments

or fees to be levied on Trading Privilege Holders, which dues, assessments or fees will be paid to IGDL

the when due. Fees will be comparable for Trading Privilege Holders receiving comparable access to, or

services from, IGDL.

(b) If a Trading Privilege Holder fails to pay when due any IGDL dues, assessments or fees levied on

such Trading Privilege Holder, and such payment obligation remains unsatisfied thirty (30) days after its

due date, IGDL may suspend, revoke, limit, condition, restrict or qualify the Trading Privileges of such

Trading Privilege Holder as it deems necessary or appropriate.

Rule 212 Market Maker Programs

IGDL may from time to time adopt, pursuant to Part 40 of the Commission Regulations, one or more

programs under which one or more Trading Privilege Holders or others may be approved and designated

as market makers with respect to one or more Contracts in order to provide liquidity and orderliness in the

market or markets for such Contract or Contracts. Any such program may provide for any or all of the

following:

34
(a) qualifications, including any minimum net capital requirements, that any such market maker must

satisfy;

(b) the procedure by which Trading Privilege Holders or others may seek and receive designation as

market holders;

(c) the obligations of such market makers, including any applicable minimum bid and offer

commitments;

(d) the benefits accruing to such market makers, including priority in the execution of transactions

effected by Trading Privilege Holders or others as approved by IGDL in their capacity as market makers,

reduced transaction fees or the receipt of compensatory payments from IGDL;

(e) the requirement that such designated market makers agree to abide by the Rules and are subject

to the jurisdiction of the Facility; and

(f) any pre-trade trade transparency requirements that may apply to the best Bid/Offer prices and

volumes of any such market makers.

Rule 213 Independent Software Vendors

IGDL shall provide impartial access to independent software vendors who enter into a development and

maintenance agreement with IGDL (an “ISV Development and Maintenance Agreement”). Fees will be

comparable for independent software vendors receiving comparable access to, or services from, IGDL.

Each independent software vendor that enters into an ISV Development and Maintenance Agreement

must satisfy the following criteria, which IGDL shall apply in a fair and nondiscriminatory manner:

(a) If required to be registered in any capacity under Applicable Law, it has duly registered in such

capacity and such registration is in effect and has not lapsed or been revoked, suspended or withdrawn;

(b) It complies with the applicable technical access standards, system compatibility requirements,

security protocols and technical specifications for connection to IGDL’s electronic systems as may be

specified by IGDL from time to time;

(c) It must ensure that each person that uses the independent software vendors to access the

Facility is either a Participant or a Customer of a Participant authorised as such in accordance with these

Rules;

(d) It may provide data obtained from the Facility solely to such Participants or Customers of

Participants in connection with their actual and proposed trading activity in Contracts and similar

contracts, and shall not provide such data to any other swap execution facility, security-based swap

execution facility, designated contract market, national securities exchange or other trading facility or

system without the prior written consent of IGDL;

(e) In the case of any RFQ or Bid/Offer submitted to IGDL through an independent software vendor,

the independent software vendor will provide sufficient detail to identify the Participant (and, in the case of

a Customer transaction, the Customer) as required by IGDL; and

(f) It satisfies such other impartial and transparent criteria as IGDL may specify from time to time,

subject to Applicable Law.

Rule 214 Withdrawal of Participant

35
(a) To withdraw from the Facility, a Participant must notify IGDL in writing, following such procedures

as may be established by IGDL.

(b) IGDL may, in its reasonable discretion, refuse to accept a Participant’s withdrawal request or may

postpone the effective date of withdrawal of a Participant if IGDL considers it necessary for the protection

of the Participant’s Customers, other Participants or otherwise in the interests of IGDL.

(c) Based on the information provided to, and other information gathered by, IGDL regarding a

Participant’s withdrawal request, IGDL will determine whether to: (i) accept the withdrawal request;

(ii) postpone the effective date of the withdrawal; or (iii) impose any terms or conditions before or after the

effective date of withdrawal.

(d) If IGDL refuses to accept a Participant’s withdrawal request or postpones the effective date of

withdrawal of a Participant, IGDL may waive the obligation to pay some or all of the fees, costs and

charges that IGDL would have imposed during the period after the date on which the requested

withdrawal would have otherwise taken effect.

(e) When IGDL accepts the withdrawal of a Participant, all rights and privileges of such Participant

terminate (including the Trading Privileges and ability to access a Trading Platform). The accepted

withdrawal of a Participant shall not affect the rights of IGDL under the Rules or relieve the former

Participant of its obligations with respect to previously executed transactions (including any contractual

obligations relating to any Contracts entered into by such Participant, or the payment of any fees, costs,

or charges incurred prior to such withdrawal). Notwithstanding the accepted withdrawal of a Participant,

the withdrawn Participant remains subject to the jurisdiction of the Facility for acts done and omissions

made while a Participant, and must cooperate in any proceeding under Chapter 5 as if such withdrawal

had not taken place.

(f) Upon delivery of a withdrawal notice:

(1) Participant shall promptly notify its Authorised Traders and Authorised Trading Firms that

they may no longer access the Facility on behalf of Participant, and Participant shall with

reasonable diligence, to the extent practicable, terminate electronic access of its

Authorised Traders and Authorised Trading Firms to the Facility; and

(2) IGDL shall suspend Participant’s access to the Facility, promptly notify its relevant

personnel that Participant and its Authorised Trading Firms may no longer access the

Facility on behalf of Participant, and with reasonable diligence, to the extent practicable,

terminate electronic access of Participant’s Authorised Traders to the Facility.

36
CHAPTER 3 TRADING PROCEDURES

Rule 301 Trading Sessions

Except as otherwise provided in these Rules or determined by the Board, transactions in any Contract will

only be executed during the Trading Session for such Contract. IGDL may from time to time modify its

regular Trading Session and establish Trading Sessions, in addition to the regular Trading Sessions, as it

deems appropriate.

Rule 302 Information about, and access to, IGDL’s Order Book

(a) Each Authorised Trader and each Trading Privilege Holder that is an individual will receive a user

identification (“ID”) and password. As a Trading Privilege Holder or Authorised Trader, such person will

be able to access IGDL’s Order Book, which functions as an electronic central limit order book and

provides the highest priority to Bids/Offers with the best price, for trading in the Swap asset classes or

sub-products approved for such Trading Privilege Holder or Authorised Trader, enter and accept

Bids/Offers, and otherwise access information regarding, or perform functions for, such person’s account

using its ID and password.

(b) For account security and audit trail purposes, each Trading Privilege Holder and Authorised

Trader agrees that IGDL may maintain logs of the IP address used to log on to any Order Book.

(c) Each Trading Privilege Holder will be responsible for protecting from improper disclosure its ID

and password, and the IDs and passwords of its Authorised Traders. In addition, a Trading Privilege

Holder may not knowingly or negligently permit any person not authorised by IGDL and by the Trading

Privilege Holder to use the ID and password to access the Order Book. Each Trading Privilege Holder is

required to immediately notify IGDL if it knows, or has reason to believe, that its ID and/or password, or

the ID and/or password of any Authorised Trader have been disclosed to any person not authorised by

IGDL and the Trading Privilege Holder to use such ID and/or password.

(d) Except as otherwise provided in Rule 102.

(1) each Trading Privilege Holder will be liable for all costs and any losses that it may incur

from transactions executed on the Facility by any person, authorised or not, using its ID

and password or the ID and/or password of any of its Authorised Traders; and

(2) IGDL will not be responsible in any way for unauthorised transactions for a Trading

Privilege Holder’s account.

(e) Each Trading Privilege Holder is responsible for contracting with a network provider through

which it will access the Facility and for having a backup service provider if the Trading Privilege Holder

deems it necessary. Each Trading Privilege Holder is also responsible for maintaining a network

connection speed adequate for its needs. IGDL will not be responsible in any way for any Bids/Offers

delayed or transactions missed or not executed in a timely fashion because of failure of the Trading

Privilege Holder’s Internet service provider or slowness of its network connection speed. No

communication from a Trading Privilege Holder will be deemed to have been received by IGDL until that

communication is logged by the Order Book server.

Rule 303 Required Transactions

37
(a) No Participant shall execute a Required Transaction on the Facility other than via the Facility’s

Order Book or Request for Quote procedures, unless such transaction is a Block Trade, in which case it

shall be executed in accordance with Rule 308.

(b) Upon execution of a Required Transaction on the Facility, IGDL will report the transaction to the

SDR as soon as technologically practicable after execution in accordance with Rule 309.

(c) Package Transactions. In accordance with NAL 16-76, expiring November 15, 2017, a

Participant may execute a Swap component of a Covered Package Transaction through any method of

execution offered by the Facility, notwithstanding that execution of such Swap component would

otherwise be a Required Transaction.

Rule 304 Permitted Transactions

(a) Participants may enter Bids/Offers for Permitted Transactions directly into the Facility’s Order

Book for that Contract.

(b) Participants may submit to an Execution Specialist for execution Permitted Transactions

negotiated and agreed to outside the Facility’s Order Book, at prices mutually agreed, with regard to

Contracts that have been designated by IGDL for such purpose (each such transaction a “Pre-Arranged

Cross”). Pre-Arranged Crosses that are submitted to an Execution Specialist for execution must be

submitted by the seller, unless otherwise agreed to by the parties; however, in the case of an

Intermediated Transaction, the Participant acting as the Intermediary shall have the obligation to submit

the Pre-Arranged Cross to the Execution Specialist. The Participant submitting the Pre-Arranged Cross

to the Execution Specialist must provide the information required by Rule 208(d).

(c) An Execution Specialist may facilitate the negotiation and execution of a Pre-Arranged Cross by

two Participants only as follows: upon request of a Participant, the Execution Specialist may, without

using any Trading Platform, Order Book or RFQ procedure, contact one or more other Participants to

determine interest in a Pre-Arranged Cross.

(d) Upon execution of the Permitted Transaction on the Facility, IGDL will report the transaction to

the SDR as soon as technologically practicable after execution in accordance with Rule 309.

(e) Each Participant that is party to, or Intermediary in, a Pre-Arranged Cross executed pursuant to

section (b) of this Rule 304 must record the following details of the transaction: the Contract (including

the Delivery Month) to which such transaction relates; the number of Contracts traded; the price of

execution or premium; the identity of the counterparty; and, if applicable, details regarding the Customer

for which the transaction was executed, as well as, if applicable, the Underlying Interest and whether the

transaction involved a put or a call and the strike price. Upon request by IGDL, such Participant must

produce satisfactory evidence, including the transaction information referred to in the preceding sentence

that the transaction meets the requirements set forth in this Rule.

Rule 305 Execution Methods for Required Transactions

(a) Execution through the Order Book

(1) A Participant may enter Bids/Offers to transact in Contracts by electronic transmission

over a network or through an Execution Specialist. If a Participant submits a Bid/Offer to

the Order Book through an Execution Specialist, the Execution Specialist shall provide

the Participant with a confirmation that the Bid/Offer was entered into the Order Book as

soon as possible after such entry. Neither the Order Book nor an Execution Specialist

will disclose the identities of Participants submitting Bids/Offers prior to the execution of a

transaction through the Order Book.

38
(2) A Participant will enter a Bid/Offer to transact in one or more Contracts by indicating to

the Facility in the manner required by a Trading Platform or the Execution Specialist the

information required by Rule 208(d).

(3) The Participant will be responsible for any and all Bid/Offer entries it posts on the Facility.

Posted Bids/Offers are subject to acceptance by other Participants.

(4) The Order Book will keep an electronic record of all Bids/Offers to transact in Contracts,

and all executed transactions.

(5) The records kept by IGDL will include all of the Bid/Offer terms identified in this Rule as

well as the date and time that the transaction was executed.

(6) The Order Book will provide Participants with the ability to post firm Bids/Offers on a

centralised electronic screen that is accessible to all Participants with access to the

Order Book. Each Participant may then choose to transact on the basis of a firm

Bid/Offer by entering a Bid/Offer which accepts the firm Bid/Offer.

(7) For a Participant who has the ability to accept a Bid/Offer it submits on behalf of a

Customer or to execute Bids/Offers from two Customers against each other, or for two

Participants who desire to execute offsetting Bids/Offers as a result of pre-execution

discussions, the Participant or Participants must allow at least a 15 second delay

between the entry of those two Bids/Offers, such that one side of the potential transaction

is disclosed and made available to other Participants for at least 15 seconds (or such

other time as IGDL may publish for particular contracts) before the second side of the

potential transaction, whether for the Participant’s own account or for Participant’s

Customer, is submitted for execution. Participants and Customers may engage in

pre-execution discussions with regard to such Bids/Offers in accordance with

Rule 404(c).

(b) [NOT USED]

(c) Voice Request for Quote Systems. Participants may initiate either a Non-Directed Voice RFQ or

a Directed Voice RFQ by contacting an Execution Specialist. If the Participant does not specify that it

wishes the RFQ to go to less than all Participants, the Execution Specialist shall direct the RFQ to all

Participants.

(1) Non-Directed Voice RFQ.

(i) The Execution Specialist will transmit the RFQ to all other Participants, and all

other Participants may respond.

(ii) Prior to execution the Execution Specialist will not disclose the identities of

Participants who transmit or respond to a Non-Directed Voice RFQ.

(2) Directed Voice RFQ.

(i) The Execution Specialist will transmit the RFQ to no less than three

(3) Recipients, to which all such Recipients may respond.

(ii) A Participant that requests an Execution Specialist to send an RFQ to fewer than

all Participants may not request that an Execution Specialist send any RFQ to

another Participant that is affiliated with or controlled by the RFQ requester or to

two more Participants that are affiliated with or controlled by each other. An

Execution Specialist that sends an RFQ to fewer than all Participants, after

39
consideration of reasonably available information, may not knowingly send an

RFQ on behalf of the requesting Participant to another Participant that is

affiliated with or controlled by the RFQ requester, or to two or more Participants

that are affiliated with or controlled by each other. For purposes of this

Rule 305(c), “control” includes but is not limited to the grant of trading discretion

by one Participant to another.

(iii) The identity of a Directed Voice RFQ requester shall be disclosed to the

Recipients upon transmittal of any Directed Voice RFQ and the identities of the

Recipients that provide responses shall be disclosed to the RFQ requestor at the

time of such responses.

(iv) A Participant may elect to not receive Directed Voice RFQs upon written notice

to the Facility.

(3) With respect to both Non-Directed Voice RFQs and Directed Voice RFQs:

(i) Together with the first response from any Recipient, the Execution Specialist will

communicate to the requesting Participant any firm resting Bid/Offer for the Swap

indicated in the RFQ that is posted in the Order Book together with any

responses to the RFQ from the Recipients.

(ii) Responses to RFQs must be in the form of a Bid/Offer. The RFQ requestor may

accept such RFQ response by submitting a corresponding Bid/Offer.

(iii) An Execution Specialist will act in accordance with a Participant’s instructions,

the Rules and Applicable Law.

(4) Managed Orders. With respect to Non-Directed Voice RFQs only:

(i) Unless otherwise instructed by a Recipient, an unfilled Bid/Offer provided in

response to an RFQ shall be entered into the Order Book by an Execution

Specialist on behalf of a Participant (“Managed Orders”).

(ii) Execution Specialists shall cancel a Managed Order if:

A. The Participant instructs the Execution Specialist to cancel the Managed

Order;

B. The Participant is filled in the same instrument in an RFQ and the

Managed Order is filled prior to the Execution Specialist cancelling the

order; or

C. Time has passed and market conditions have changed sufficiently since

the entry of the Managed Order such that the Managed Order should be

cancelled. The following conditions must be met before a Managed

Order is cancelled in the Order Book:

(aa) The Managed Order must be exposed to the Order Book for at

least 15 seconds; and

(bb) A material change in the equilibrium price of the particular

instrument has occurred as identified by any of the following:

40
i. New Bids/Offers, initiations of Voice RFQs, or responses

to Voice RFQs indicating one or more Participants are

willing to trade at a worse price; or

ii. The instrument’s mid-rate has moved through the

Managed Order’s price; or

iii. A material economic market event has occurred,

including, but not limited to, U.S. Department of Labor’s

Bureau of Labor Statistics Economic News Releases,

Federal Reserve announcements, or natural or manmade disasters.

(iii) Failure of an Execution Specialist to cancel a Managed Order pursuant to

305(c)(3)(b)(ii) prior to it being filled in whole or in part shall be considered an

error of the Facility that may be cancelled pursuant to Rule 315(a).

Rule 306 Work Up

Work-up sessions in Required Transactions are permitted in both electronic trading and RFQ, subject to

the System Protocol for the Trading Platform for each product. Work-up transactions do not qualify as a

Block Trade even if a Participant’s transactions as part of the work-up session has a notional or principal

amount at or above the appropriate minimum block size applicable to such Swap.

Rule 307 Acceptable Bids and Offers

(a) The Bid/Offer types shall be as specified in the appropriate System Protocol.

(b) A Participant submitting a Held Order for less than the Appropriate Minimum Block Size for

execution on the Facility shall submit such a Held Order directly to the Order Book or, if submitted to the

Facility through an Execution Specialist, such Execution Specialist shall submit such a Held Order directly

to the Order Book.

Rule 308 Block Trades

Participants must enter into uncleared Block Trades away from the Facility, i.e., outside a Trading

Platform, System, Order Book, RFQ procedure or Prearranged Cross procedure under Rule 304(b).

Participants may enter into Block Trades in Cleared Contracts in accordance with Rule 308(f). All Block

Trades must be executed at prices mutually agreed, with regard to Contracts that have been designated

by IGDL for such purpose, subject to the following conditions:

(a) The Block Trade must be for at least such minimum number of Contracts as will from time to time

be specified by IGDL (the “Appropriate Minimum Block Size”). Except as may otherwise be permitted

by Commission Regulation 43.6(h)(6), Participants shall not aggregate Contracts of different Participants

or Customers to achieve the Appropriate Minimum Block Size. Furthermore, each leg of a Package

Transaction must achieve the Appropriate Minimum Block Size independently of each other leg of the

Package Transaction. The current Appropriate Minimum Block Sizes are posted on the “Regulation”

section of the IGDL website.

(b) When negotiating or executing a Block Trade, a Participant must ensure that the price quoted for

a Block Trade represents a fair and reasonable price. The price at which a Block Trade is executed must

be fair and reasonable in light of (i) the size of such Block Trade, (ii) the prices and sizes of other

transactions in the same Contract at the relevant time, (iii) the prices and sizes of transactions in other

relevant markets at the relevant time, and (iv) the circumstances of the parties to such Block Trade.

41
(c) Block Trades that are not Cleared Contracts must be reported to the Facility by the seller, unless

otherwise agreed to by the parties, as soon as technologically practicable after execution, and in no event

later than ten (10) minutes after execution, by contacting an Execution Specialist; however, in the case of

an Intermediated Transaction, the Participant acting as the Intermediary shall have the obligation to

report the Block Trade to the Facility as soon as technologically practicable after execution. The

Participant reporting the Block Trade to the Facility must explicitly state to the Execution Specialist that

the parties are electing to have the Block Trade treated as such, must state the time of execution to the

nearest second and must provide the information required by Rule 208(d).

(d) IGDL will review the information submitted by the Participants for a Block Trade that is not a

Cleared Contract and will post the transaction to a Trading Platform if the details are complete and

accurate in accordance with this Rule. IGDL will report the transaction to the SDR as soon as

technologically practicable after execution in accordance with Rule 309 and will identify the Block Trade

as such in the report. IGDL will not disclose any detail of a Block Trade that is not a Cleared Contract

prior to the public dissemination of the Block Trade by the SDR.

(e) Each Participant that is party to, or Intermediary for, a Block Trade that is not a Cleared Contract

must record the following details of the transaction: the Contract (including the Delivery Month) to which

such transaction relates; the number of Contracts traded; the price of execution or premium; the time of

execution; the identity of the counterparty; and, if applicable, details regarding the Customer for which the

transaction was executed, as well as, if applicable, the Underlying Interest and whether the transaction

involved a put or a call and the strike price. Upon request by IGDL, such Participant must produce

satisfactory evidence, including the information referred to in the preceding sentence that the transaction

meets the requirements set forth in this Rule.

(f) In accordance with NAL 16-74, expiring November 15, 2017, a Participant may execute a Block

Trade that is a Cleared Contract either (i) via the Facility’s voice RFQ procedures in Rule 305(c), with the

exception that there shall be no minimum number of required Participants to whom an RFQ must be sent,

or (ii) as a Pre-Arranged Cross in accordance with the procedures in Rule 304, notwithstanding that the

execution of the Block Trade does not occur away from the Facility’s trading system. Each Block Trade

executed pursuant to this Rule 308(f) must involve Contracts listed by the Facility, be executed pursuant

to the Rules and meet the Appropriate Minimum Block Size. The Facility will report each Block Trade

transaction to the SDR as soon as technologically practicable after execution in accordance with

Rule 309. The Facility will not disclose any detail of such a Block Trade prior to the public dissemination

of the Block Trade by the SDR.

(g) Each counterparty to a Block Trade must be an “eligible contract participant” as defined in the

Act.

(h) Each Intermediary entering into a Block Trade on behalf of a Customer (or in the case of an

Authorised Trader acting as an Intermediary, its Trading Privilege Holder’s Customer) must have received

a written instruction or consent to do so from the Customer prior to the execution of the Block Trade. The

written instruction or consent must be specific as to Block Trades but may be included in a power of

attorney or similar document in which the Customer provides the Intermediary with discretionary trading

authority to direct the trading in the Customer’s account.

(i) Any Block Trade in violation of these requirements will constitute conduct which is inconsistent

with just and equitable principles of trade.

(j) Nothing in this Rule 308 shall prohibit a Participant from executing a transaction via the Order

Book, vRFQ procedures or as a Pre-Arranged Cross that exceeds the Appropriate Minimum Block Size.

Such transactions will not receive treatment as Block Trades and will not be afforded a reporting time

delay under Part 43 of the Commission Regulations.

42
Rule 309 Reporting and Data Collection

(a) In furtherance of Applicable Law, IGDL will capture and retain all transaction data, so as to be

able to reconstruct all transactions within a reasonable period of time and to provide evidence of any

Violations.

(b) In furtherance of Applicable Law, IGDL will retain records for all transactions executed on the

Facility. This includes all Bids/Offers, RFQs and Pre-Arranged Crosses, whether accepted, unaccepted,

cancelled or modified, and all acceptances of such transactions.

(c) In furtherance of Applicable Law, IGDL shall maintain an electronic transaction history database,

which includes a history of all Bids/Offers transactions, and also includes: (i) all data that are input into

the trade entry system; (ii) the categories of Participant or Customer for which each transaction is

executed, including whether the Participant or Customer executed the transaction for its own account;

(iii) timing and sequencing data adequate to reconstruct trading; and (iv) subject to Rule 309(h),

identification of each Participant or Customer to which fills are allocated.

(d) IGDL will use the electronic transaction history database to reconstruct trading and identify

possible Violations. In furtherance of Applicable Law, IGDL will conduct an annual review of compliance

by all Participants and Customers that are responsible for, or in control of, the creation of audit trail

records with its audit trail and recordkeeping requirements and will identify Participants and Customers

that may have failed to comply with such requirements. Such Participants and Customers will be subject

to investigation by the Market Regulation Staff for possible disciplinary action. The annual review must

include, but is not limited to, reviews of randomly-selected samples of front end audit trail data for order

routing systems; a review of the process by which user identifications are assigned and user identification

records are maintained; a review of usage patterns associated with user identifications to monitor for

violations of user identification Rules; and reviews of account numbers and Customer Type Indicator

Codes in transaction records to test for accuracy and improper use.

(e) All such information will be maintained by IGDL in a manner that protects it from unauthorised

alteration, as well as from accidental erasure or other loss.

(f) IGDL will publish trading information as required by:

(1) Core Principle 9, Commission Regulation § 37.901 and Part 16 of the Commission

Regulations; and

(2) FCA rules and MAR 5.8 and 5.9.

(g) Reporting to SDRs.

(1) IGDL will report all transactions in Contracts executed on the Facility or pursuant to the

Rules to an SDR of IGDL’s choice as soon as technologically practicable after the

execution of such transaction. IGDL will report such transactions as set forth below:

(i) Cleared Contracts, including all legs of a Package Transaction, in all asset

classes: IGDL reports to DTCC;

(ii) Non-Cleared Contracts, including all legs of a Package Transaction, in all asset

classes: IGDL reports to DTCC.

With respect to Cleared Contracts, all Cleared Contracts are currently cleared by

LCH.Clearnet, Ltd., CME or JSCC and will be reported to DTCC. With respect to NonCleared Contracts, the Facility reports all such transactions to DTCC.

43
(2) As soon as technologically practicable after the execution of a Contract, IGDL will report

to both counterparties, and to the DCO, if any, that will clear the Contract: (i) the identity

of the SDR to which the Contract was reported; and (ii) the Contract’s unique Swap

identifier.

(3) All real-time data required by Part 43 of the Commission Regulations and all creation

data, including primary economic terms and confirmation data, required by Part 45 of the

Commission Regulations will be reported to the relevant SDR as provided for under

Part 43 and Part 45 of the Commission Regulations.

(4) IGDL will disseminate swap transaction and pricing data relating to Contracts to

Participants no earlier than the transmittal of such information to the relevant registered

SDR.

(5) After becoming aware of or being notified of any errors or omissions in the transaction or

pricing data set forth in a Confirmation by a Participant pursuant to Rule 312, the Facility

shall then promptly submit corrected data to the relevant SDR.

(6) Neither the Facility nor any Participant may submit or agree to submit a cancelation or

correction for the purposes of re-reporting Swap transaction and pricing data in order to

gain or extend a delay in public dissemination of accurate Swap transaction or pricing

data or to otherwise evade the reporting requirements of Part 43 of the CFTC

Regulations.

(h) Post Trade Allocations.

(1) In reliance on NAL 15-68, expiring November 15, 2017, IGDL will not capture post-trade

allocations in its audit trail data or conduct associated audit trail reviews of post-trade

allocations.

(2) Each Participant and Customer shall provide IGDL post-trade allocation information to

the SEF upon the request of IGDL.

(3) During the course of any trade practice surveillance or market surveillance investigation

into any trading activity involving post-trade allocations, upon the request of the CFTC or

otherwise, IGDL shall ascertain whether a post-trade allocation was made. Upon

determining that such an allocation was made, IGDL shall request, obtain and review the

post-trade allocation information as part of its investigation.

Rule 310 Bid/Offer Cancellation

(a) A Participant can submit instructions to either cancel or modify a Bid/Offer which that Participant

has placed on the Facility if that Bid/Offer has not yet been accepted. Upon receipt of instructions to

cancel a Bid/Offer that has not been executed, a Trading Platform will withdraw the Bid/Offer and confirm

the cancellation of the Bid/Offer. If a Participant modifies a Bid/Offer that has not been executed, IGDL

will treat the modified Bid/Offer as a new Bid/Offer.

(b) IGDL will attempt to cancel or modify an existing Bid/Offer after a Participant enters a cancellation

or modification instruction. However, the Bid/Offer may be executed before IGDL is able to cancel or

modify it. If a Bid/Offer has been filled in whole or in part, a Participant may modify or cancel only that

portion of the Bid/Offer (if any) that has not been executed. Once cancelled by IGDL, a Bid/Offer will not

be executed.

44
(c) Upon suspension or revocation of a Participant’s trading privileges by IGDL, any unaccepted

Bid/Offer on the Facility for such Participant shall be cancelled by IGDL.

Rule 311 [Reserved]

Rule 312 Enforceability of Transactions

(a) Settlement

(1) Each Participant or, where a transaction is on behalf of a Customer, the relevant

Customer, is obligated to settle all transactions executed, pursuant to the Rules in this

Chapter 3.

(2) A transaction executed on the Facility or subject to the Rules shall not be void, voidable,

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

(i) a violation by the Facility of Section 5h of the Act or Part 37 of the Commission

Regulations;

(ii) any Commission proceeding to alter or supplement a rule, term or condition

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

the Act; or

(iii) any other proceeding the effect of which is to: (A) alter or supplement a specific

term or condition or trading rule or procedures; or (B) require the Facility to adopt

a specific term or condition, trading rule or procedure, or to take or refrain from

taking a specific action.

(b) Issuance of Facility Confirmations for Cleared Contracts. Participants and Customers are

obligated to submit for clearing all Contracts so required by the Act, Commission Regulations and any

other applicable law. For Cleared Contracts, IGDL will provide the Trading Privilege Holder a

Confirmation of all the terms of each transaction executed on the Facility at the time of execution;

provided that where a Trading Privilege Holder is a Customer in an Intermediated Transaction, the

confirmation will be provided to the Intermediary in accordance with Rule 313(c). The Confirmation

provided by IGDL for Cleared Contracts will be the final legally binding confirmation of the terms of any

transaction executed on the Facility and will supersede any conflicting confirmation or agreement

provided to, or between, as applicable, Participants and Customers, regardless of when such other

confirmation is provided.

(c) Issuance of Facility Confirmations for Uncleared Transactions

(1) The economic terms specific to the transaction agreed by each Participant and/or

Customer on the Facility with respect to an uncleared transaction shall be reflected by

the Facility in a written communication (the “Trade Communication”) issued to each

applicable Participant and/or Customer at the time of execution of the uncleared

transaction. The Trade Communication, together with the documents and agreements

(including, without limitation, ISDA master agreements, other master agreements, terms

supplements, master confirmation agreements, and incorporated industry definitions)

governing such transaction existing at the time of such commitment to which each

Participant and/or Customer are party (the “Terms Incorporated by Reference”) shall,

taken together, for purposes of Commission Regulation 37.6(b), comprise all of the terms

of such transaction and serve as the Confirmation of such transaction.

(2) In satisfaction of the obligations imposed on IGDL under Commission Regulation 37.6(b),

(i) each Trade Communication is deemed to incorporate the Terms Incorporated by

45
Reference set forth in this Rule 312(c) upon issuance of the Trade Communication,

(ii) each Participant and Customer hereby agrees that the provisions of Rule 312(c)(3)

shall govern any conflicting terms, and (iii) the resulting Confirmation takes place at the

time of execution of, and contains all the terms of, the transaction.

(3) In the event of any conflict between (x) the Trade Communication and (y) the Terms

Incorporated by Reference, the Trade Communication shall prevail to the extent of any

inconsistency and each Trade Communication shall state the same.

(4) In accordance with NAL 1617-2517, expiring March 31, 2017on the effective date of

revised Commission regulations governing SEF confirmation procedures, upon the

request of IGDL, each Participant and Customer shall provide copies of the Terms

Incorporated by Reference to IGDL.

(5) In accordance with NAL 1617-2517, expiring March 31, 2017on the effective date of

revised Commission regulations governing SEF confirmation procedures, upon the

request of the Commission, IGDL shall request the Terms Incorporated by Reference

from the relevant Participant or Customer and shall provide such Terms Incorporated by

Reference to the Commission as soon as possible after receipt from the Participant or

Customer.

(6) Review of Confirmations. Each Participant shall review the contents of each

Confirmation issued to it pursuant to this Rule 312 and shall promptly report any errors or

omissions in the transaction or pricing data therein to the counterparty to the Contract.

Each Participant that is the reporting counterparty for such Contract, as determined

pursuant to Rule 316, shall report all such errors or omissions to the Facility as soon as

technologically practicable after becoming aware of the errors or omissions.

Rule 313 Intermediated Transactions

(a) Subject to Rule 305(a)(6), Participants who are Intermediaries shall immediately enter into a

Trading Platform all executable Orders received by telephone from their Customers, and shall

immediately submit all RFQs and Pre-Arranged Crosses to an Execution Specialist. If an Order, RFQ or

Pre-Arranged Cross cannot be immediately entered into a Trading Platform or submitted to an Execution

Specialist, as applicable, an electronic record which includes the account identifier that relates to the

account owner, time of receipt, and terms of the Order, RFQ or Pre-Arranged Cross must immediately be

created, and the Order, RFQ or Pre-Arranged Cross must be entered into a Trading Platform or

submitted to an Execution Specialist as soon as practicable.

(b) Priority of execution. Non-discretionary executable Customer Orders received by a Participant

who is an Intermediary shall be entered into Facility in the sequence received. Non-discretionary Orders

that cannot be immediately entered must be entered when the Orders become executable, in the

sequence in which the Orders were received.

(c) IGDL shall provide all Confirmations of Intermediated Transactions to the Intermediary upon

execution of the transaction. Except to the extent that IGDL sends Confirmations of Contracts directly to

the relevant Customer, any Participant that transacts as an Intermediary for any Customer shall be

responsible for ensuring that such Customers receive all Confirmations of Contracts entered into on

behalf of such Customers as soon as technologically practicable after receipt of the Confirmation from

IGDL.

Rule 314 Bunched Orders

46
Bunched Orders must be allocated and recorded in accordance with Commission Regulation 1.35(b)(5)

and the NFA’s Interpretive Notice related to Compliance Rule 2-10. Bunched Orders may be entered

using a designation for a group of accounts or suspense account number; provided, however that:

(1) the Bid/Offer or Pre-Arranged Cross is being placed by a Participant who is, or is acting

on behalf of, an account manager for multiple accounts eligible for post execution

allocation; or

(2) a written, pre-determined allocation scheme that defines the group of accounts has been

provided to the Clearing Firm accepting or clearing the Bid/Offer or Pre-Arranged Cross

prior to the time that such Bid/Offer or Pre-Arranged Cross is entered.

Rule 315 IGDL Authority over Transactions

(a) IGDL Authority Regarding Cancellations, Price Adjustments and New or Offsetting Transactions

IGDL has authority to cancel any transaction or adjust the price of any transaction executed on the

Facility, or to execute or require the execution of a new or offsetting transaction: (i) when IGDL

determines in its sole discretion such action is necessary to mitigate market disrupting events caused by

the improper or erroneous use of a Trading Platform or by system defects; (ii) at any time IGDL

determines, in its sole discretion, that allowing a transaction to stand as executed may have a material

adverse effect on the integrity of the market; or (iii) in accordance with Rule 204(h), Rule 315(c),

Rule 315(d), Rule 315(h), or Rule 315(i). All decisions of IGDL regarding IGDL’s cancellation of

transactions or the adjustment of transaction prices and the execution of new or offsetting transactions

shall be final, subject to Rule 315(d).

(b) Determination to Review a Transaction’s Price

(1) IGDL may determine to review a transaction’s price based on its independent analysis of

market activity or upon a Participant’s request. A Participant’s request for review must be

made (i) for an uncleared Pre-Arranged Cross, within one (1) Business Day of the

execution of such transaction and (ii) for any other transaction executed on the Facility,

within 5 minutes of the execution of such transaction. In the absence of a timely request

for review, IGDL may determine whether or not a transaction will be subject to review in

its sole discretion. Notwithstanding the foregoing, subject to Applicable Law, IGDL shall

amend the terms of, or cancel, any transaction that the parties, together with the DCO, as

applicable, mutually agree to amend or cancel, in the event that such amendment or

cancellation is not submitted to IGDL within the applicable review period specified above.

(2) If IGDL determines to review a transaction’s price, it will promptly issue an alert to all

Participants via a Trading Platform or electronic mail indicating that the transaction is

under review.

(c) Review of a Transaction’s Price

(1) In reviewing a transaction’s price, IGDL will first determine whether the price of the

transaction is in the Non-Reviewable Range.

(2) In applying the Non-Reviewable Range, IGDL shall determine the fair value price for the

Swap at the time the transaction under review occurred. IGDL may consider any

relevant information, including, but not limited to, the last transaction price of the Swap or

a better Bid/Offer, a more recent price for a different maturity date, the price of the same

or related Swap established in another venue or another market, the market conditions at

47
the time of the transaction, the theoretical value of an Option based on the most recent

implied volatility and responses to an RFQ.

(3) If IGDL determines that the price of a transaction is inside the Non-Reviewable Range,

IGDL will issue an alert indicating that the transaction shall stand as executed.

(4) If IGDL determines that the price of a transaction is outside the Non-Reviewable Range,

IGDL shall have the right, in its sole discretion, to cancel or adjust the price of such

transaction.

(5) The method of adjustment or cancellation of any Cleared Contract that is adjusted or

cancelled pursuant to Rule 315(c)(4) shall be the method provided for by the rules and

procedures of the relevant DCO.

(d) Alternative Resolution by Agreement of Parties for Transactions Reviewed for Price

(1) With the approval of IGDL, parties to a transaction that is under review for price or that

has had its price adjusted may instead, together with the DCO, as applicable, mutually

agree to cancel or otherwise adjust the price of the transaction.

(2) With the approval of IGDL, parties to a transaction that is cancelled may instead, together

with the DCO, as applicable, mutually agree to adjust the price of such transaction to a

price within the Non-Reviewable Range.

(3) Subject to sections (d)(1) and (d)(2), parties to a transaction that is cancelled or that has

had its price adjusted may mutually agree to a cash adjustment.

(4) Any cancellation or adjustment made pursuant to sections (d)(1), (d)(2) or (d)(3) must be

reported to the Facility by the parties within one (1) Business Day and the parties must

maintain a record of such adjustment.

(e) Liability for Losses Resulting from Cancellations or Price Adjustments

(1) A party that through error or mistake enters a Bid/Offer, RFQ or Pre-Arranged Cross that

results in a cancellation or price adjustment shall be responsible for demonstrated claims

of realised losses incurred by persons whose transaction prices were cancelled or

adjusted; provided, however, that a claimant shall not be entitled to compensation for

losses incurred as a result of the claimant’s failure to take reasonable actions to mitigate

the loss.

(2) A claim for a loss pursuant to this Rule 315 must be submitted to the Facility within one

(1) Business Day of the event giving rise to the claim. IGDL will reject any claim that is

not filed in a timely manner and such decision shall be final. Eligible claims shall be

forwarded by IGDL to the party responsible for the Bid/Offer, RFQ or Pre-Arranged Cross

that resulted in a cancellation or a price adjustment of a transaction and the Participant

through which the transaction was submitted to the Facility. Such party, or Participant on

behalf of such party, shall, within ten (10) Business Days of receipt of the claim, admit or

deny responsibility in whole or in part. Failure to respond to the claim within ten

(10) Business Days shall be deemed a denial of liability.

(3) To the extent that liability is admitted, payment shall be made within ten (10) Business

Days. Unless otherwise agreed upon in writing by the parties, failure to make the

payment within ten (10) Business Days shall be deemed a denial of liability for the

48
purposes of this Rule 315. A copy of any such written agreement must be provided to

IGDL.

(4) To the extent that liability is denied, the party making the claim may submit the claim for

arbitration pursuant to Rule 702. Such claims must be submitted to IGDL within ten

(10) Business Days of the date the party was issued notification that liability was denied.

(f) The Non-Reviewable Ranges for all Swaps listed on the Facility are as follows:

(1) Outright Contracts: Less than +/- 1.5 basis points.

(2) Package Transactions and individual components of Implied Package Transactions:

Less than +/- 1.0 basis point.

(g) Records of Cancellations and Price Adjustments

(1) Cancelled transactions and any prices that have been adjusted shall be cancelled in

IGDL’s official records.

(2) Transactions that have had their price adjusted shall be reflected in IGDL’s official

records at the adjusted price.

(h) Review of Transactions for Errors

(1) If a Participant, Customer or Clearing Firm believes that any transaction in one or more

Contracts was executed, cleared or rejected for clearing as a result of an Error, as

defined in Rule 315(h)(3), such person may request review of the transaction.

(2) Upon receipt of a request for review of a transaction, or if IGDL determines on its own

initiative to conduct such a review, IGDL will review its records to determine if an Error

occurred.

(3) IGDL may cancel or adjust the transaction, or execute or require the execution of a new

or offsetting Cleared Contract under the procedures of Rule 315(i), as appropriate, if the

review described in this Rule reveals that:

(i) a Trading Platform or an Execution Specialist made a material mistake or that a

mistake occurred as a result of a malfunction in a Trading Platform or by human

error;

(ii) a Bid/Offer or RFQ or Pre-Arranged Cross was incorrectly displayed and/or

executed and/or reported;

(iii) a Trading Platform, an Execution Specialist, Participant or Customer made a

clerical or operating error or omission that caused a transaction to be rejected

from clearing and void ab initio; or

(iv) a Clearing Firm or DCO rejected a leg of a Package Transaction for clearing

because of the sequencing of submission for clearing of the legs of the

applicable Package Transaction (each of the foregoing, an “Error”).

(4) If the review described in this Rule reveals that no Error occurred, IGDL will inform any

person who requested the review that IGDL has determined that the transaction was

49
properly handled, the evidence supporting that determination, and that a cancelation,

adjustment or a new or offsetting transaction under Rule 315(i) will not be made.

(5) IGDL will document in writing all requests for review of transactions received by IGDL, or

any review on its own initiative, the time and manner in which IGDL reviewed its

electronic audit trail in response to the request or review on its own initiative, the outcome

of that review, and the action or actions taken by IGDL in response to that review.

(6) If a transaction is reviewable for price under Rule 315(b), the procedures of this

Rule 315(h) shall not apply.

(i) Procedures for Correcting Errors

(1) The procedures of this Rule 315(i) are in accordance with NAL 1617-5827, expiring June

15, 2017on the effective date of revised Commission regulations governing swaps with

clerical and operational errors executed on a swap execution facility, and are limited to:

(i) A Cleared Contract that was rejected for clearing and void ab initio because of a

clerical or operational error or omission by IGDL, a Participant or a Customer

(each, a “Rejected Transaction”),

(ii) A leg of a Package Transaction that was rejected for clearing because of the

sequencing of submission for clearing of the legs of the applicable Package

Transaction and only for such rejected leg (each, a “Rejected Leg”), and

(iii) A Cleared Contract that is carried on a DCO’s books as a result of a clerical or

operational error or omission by IGDL, a Participant or a Customer that was not

identified until after the Cleared Contract had been cleared (each, an

“Erroneously Cleared Transaction”),

in each case where the Facility has affirmatively determined that the transaction or a term

thereof resulted from an Error.

(2) For Rejected Transactions and Rejected Legs, if a Participant, Customer or Clearing

Firm believes that a transaction qualifies as a Rejected Transaction or a Rejected Leg,

such Participant, Customer or Clearing Firm shall request review of the transaction

pursuant to Rule 315(h).

(i) Upon completion of the review of the transaction pursuant to Rule 315(h), if IGDL

determines that an Error resulted in a Rejected Transaction or a Rejected Leg

and:

A. If IGDL is able to determine how to correct the Error, IGDL shall execute

a new Cleared Contract with the same terms as the Rejected

Transaction or Rejected Leg, other than the Error, without obtaining

consent of the Participant that submitted the Rejected Transaction or

Rejected Leg or the Customer on whose behalf such transaction was

submitted. The new Cleared Contract must be submitted by an

Execution Specialist as a Pre-Arranged Cross, and such Pre-Arranged

Cross shall be subject to pre-execution credit check and risk screening

pursuant to Rule 204(b).

B. If IGDL is unable to determine how to correct the Error, IGDL shall

consult with the Clearing Firms for the Rejected Transaction or Rejected

Leg and the Participants and Customers involved in such transaction, as

50
necessary, and the Clearing Firms for such transactions may, with the

consent of each respective Customer or Participant, agree to a new

Cleared Contract with the same terms as the rejected Cleared Contract,

other than the Error. Such Customer or Participant consent may not be

obtained in advance, and must be sought and obtained by each Clearing

Firm on a case-by-case basis, after the Cleared Contract has been

rejected. If there is such agreement and consent, the new Cleared

Contract must be submitted by the Participant specified in Rule 304(b)

as a Pre-Arranged Cross pursuant to the procedure in Rule 304(b), and

such Pre-Arranged Cross shall be subject to pre-execution credit check

and risk screening pursuant to Rule 204(b).

(ii) Upon execution of such Pre-Arranged Cross by IGDL to replace a Rejected

Transaction or Rejected Leg, IGDL shall submit the transaction to the DCO for

clearing as quickly as technologically practicable, but in any case no later than

60 minutes from the issuance of the notice of rejection by the DCO to the

Clearing Firms.

(iii) If the new Cleared Contract resulting from such Pre-Arranged Cross is rejected

from clearing, it is void ab initio and no additional new Cleared Contract will be

permitted to be submitted under the procedure in this Rule 315(i)(2).

(iv) IGDL shall report Swap transaction data to the relevant SDR pursuant to

Rule 309(f) for a new Cleared Contract that clears with the same terms as the

Rejected Transaction or Rejected Leg, as applicable, other than the Error,

including: a Part 43 cancellation for the original transaction, a Part 45

termination indicating the original transaction is void ab initio, and swap

transaction data pursuant to Parts 43 and 45 for the new Cleared Contract. Such

data shall reference the original cancelled trade, indicate that it has been

reported pursuant to the procedures described in this Rule 315(i)(2) and link the

original cancelled trade to the new trade for reporting to the relevant SDR under

Part 43 and Part 45 of the Commission Regulations.

(v) The procedures in this Rule 315(i)(2) are not available for Rejected Legs of

Package Transactions that are rejected for clearing by a Clearing Firm or DCO

because the Package Transaction as a whole failed to satisfy the applicable

Risk-Based Limits.

(3) For Erroneously Cleared Transactions, if a Participant, Customer or Clearing Firm

believes that a Cleared Contract is carried on the books of a DCO as a result of an Error,

such Participant, Customer or Clearing Firm may request review of the transaction

pursuant to Rule 315(h).

(i) Upon completion of the review of the transaction pursuant to Rule 315(h), if IGDL

determines that an Error resulted in an Erroneously Cleared Transaction and:

A. If IGDL is able to determine how to correct the Error, IGDL shall execute

a Cleared Contract that offsets the Erroneously Cleared Transaction

carried on the books of the relevant DCO through the same Clearing

Firms that cleared the Erroneously Cleared Transaction and IGDL shall

execute a new Cleared Contract with the same terms as the Erroneously

Cleared Transaction, other than the Error, in each case without obtaining

consent of the Participant that submitted the Erroneously Cleared

Transaction or the Customer on whose behalf such transaction was

submitted; provided that, where an Erroneously Cleared Transaction did

51
not satisfy the Risk-Based Limits of a Participant’s Clearing Firm, IGDL

shall obtain the consent of the relevant Clearing Firm prior to executing

such offsetting Cleared Contract. The new Cleared Contract must be

submitted by an Execution Specialist as a Pre-Arranged Cross, and such

Pre-Arranged Cross shall be subject to pre-execution credit check and

risk screening pursuant to Rule 204(b).

B. If IGDL is unable to determine how to correct the Error, IGDL shall

consult with the Clearing Firms for Erroneously Cleared Transactions

and the Participants and Customers involved in such transaction, as

necessary, and the relevant Customer or Participant may agree to

execute a Cleared Contract that offsets the Erroneously Cleared

Transaction carried on the books of the relevant DCO through the same

Clearing Firms that cleared the Erroneously Cleared Transaction and to

execute to a new Cleared Contract with the same terms as the rejected

Cleared Contract, other than the Error. The new Cleared Contracts must

be submitted by the Participant specified in Rule 304(b) as Pre-Arranged

Crosses pursuant to the procedure in Rule 304(b), and such

Pre-Arranged Crosses shall be subject to pre-execution credit check and

risk screening pursuant to Rule 204(b).

(ii) Upon execution of such Pre-Arranged Crosses by IGDL to offset an Erroneously

Cleared Transaction and to enter into a new Cleared Contract, IGDL shall submit

the transactions to the DCO for clearing as quickly as technologically practicable,

but in any case no later than three days after the Erroneously Cleared

Transaction was executed.

(4) For the avoidance of doubt, the procedures of this Rule 315(i) are not applicable to any

transaction rejected by a DCO for credit reasons.

Rule 316 Reporting Counterparty

(a) For each Contract executed on or subject to the Rules, IGDL shall report all required data to an

SDR in accordance with Rule 309, and shall include in such creation data the identification of the

reporting counterparty. The reporting counterparty will be determined by IGDL, if possible, in accordance

with Commission Regulation 45.8(a) – (f) and in the event the counterparties to the Contract are of the

same hierarchy level, the ISDA Reporting Party Rules, the relevant portion of which is attached to this

Rulebook as Annex 1, and identify to the counterparties which is the reporting counterparty. If IGDL is

unable to determine the reporting counterparty in accordance with Commission Regulation 45.8(a) - (f)

and the ISDA Reporting Party Rules, IGDL will identify the buyer of the Contract as the reporting

counterparty in the creation data. By executing the Contract on the Facility, the counterparties agree to

the use of the ISDA Reporting Party Rules and where necessary, the identification of the buyer as

reporting counterparty, and waive the opportunity to agree separately upon a reporting counterparty and

to receive notice from IGDL, as provided in Commission Regulation 45.8(d) and 45.8(f).

(b) [NOT USED]

(c) For each Contract executed on or subject to the Rules, the reporting counterparty and/or the

relevant DCO is responsible for reporting continuation data to the SDR to which the creation data for the

Contract was first reported in accordance with Commission Regulations 45.4 and 45.10.

52
CHAPTER 4 TRADING STANDARDS

Rule 401 Fraudulent Statements and Acts

(a) No Participant or Customer shall make or attempt to make any untrue or misleading statement of

a material fact or to omit to state a material fact necessary in order to make the statements made not

untrue or misleading, in connection with or related to any transaction on or other activity related to IGDL

or the Facility.

(b) No Participant or Customer may engage in or attempt to engage in any fraudulent act, or engage

in or attempt to engage in any manipulative device, scheme or artifice to cheat, defraud or deceive, in

connection with or related to any transaction on or other activity related to IGDL or the Facility.

Rule 402 Abusive Trading Practices

(a) No Participant or Customer shall create fictitious or wash transactions on the Facility or execute

any Bid/Offer for a fictitious or wash transaction with knowledge of its nature.

(b) No Participant or Customer shall engage in trading on the Facility or subject to the Rules for the

purpose of passing money or transferring equity from one account to another.

(c) No Participant trading as an Intermediary on behalf of a Customer shall engage in trading ahead

of a Customer Order, trading against a Customer Order without the Customer’s consent, front running a

Customer Order, accommodation trading or improper cross trading.

Rule 403 Good Faith Bids/Offers and RFQs

(a) A Participant or Customer shall not knowingly enter, or cause to be entered, a Bid/Offer or RFQ

into the Facility other than in good faith for the purpose of executing bona fide transactions.

(b) A Participant or Customer shall not knowingly enter, or cause to be entered, a Bid/Offer or RFQ

unless such Participant or Customer has sufficient funds to provide the required collateral for the related

Contract should the Contract be executed.

Rule 404 Pre-Execution Discussions and Pre-Arranged Transactions

No Participant or Customer shall prearrange or pre-negotiate or non-competitively execute any

transaction on the Facility except as follows:

(a) Block Trades are not subject to this prohibition.

(b) Permitted Transactions executed pursuant to Rule 304 are not subject to this prohibition.

(c) Participants and Customers may engage in pre-execution discussions with regard to transactions

executed on the Facility in accordance with Rule 305(a)(7); provided, however, that:

(1) A party may not engage in pre-execution communications with other market participants

on behalf of another party unless the party for whose benefit the transaction is being

made has previously consented to permit such communications.

(2) Parties to pre-execution communications shall not:

53
(i) disclose to a non-party the details of such communications; or

(ii) enter a Bid/Offer to take advantage of information conveyed during such

communications except in accordance with this Rule.

(3) Notwithstanding paragraph (c)(2) of this Rule, a party may disclose or use such

communications if such disclosure or use is authorised in writing by the counterparty, or

is necessary:

(i) for the effective execution of any Swap for or with the counterparty;

(ii) to hedge or mitigate any exposure created by such Swap; or

(iii) to comply with a request of the Commission, the U.S. Department of Justice, any

self-regulatory organisation, or an applicable prudential regulator, including but

not limited to the FCA, or as otherwise required by law.

(d) Where a transaction is executed pursuant to Rule 315(i), communications concerning such

transaction shall not be considered pre-execution communications prohibited by this Rule 404.

Rule 405 Manipulation and Price Distortion

(a) Any manipulation or attempted manipulation of the price of any Contract is prohibited.

(b) Bids/Offers entered into a Trading Platform or Pre-Arranged Crosses submitted to an Execution

Specialist for the purpose of upsetting the equilibrium of the market in any Contract or creating a

condition in which prices do not or will not reflect fair market values are prohibited and it shall also be

prohibited for any Participant or Customer to make or assist in entering any such Bid/Offer or PreArranged Cross with knowledge of the purpose thereof or, with such knowledge, to assist in carrying out

any plan or scheme for the entering of any such Bid/Offer or Pre-Arranged Cross.

(c) Any other manipulative and disruptive behaviour not otherwise prohibited by the Rules is

prohibited to the extent prohibited by the Act or Commission Regulations, including but not limited to

Sections 6(c)(1) and (3), 9(a)(2), 4c(a)(5)(A) and (C) of the Act and Commission Regulations 180.1(a)

and 180.2.

Rule 406 Disruptive Trading Practices

(a) No Participant or Customer shall enter or cause to be entered any Bid/Offer or other message

with the intent to:

(1) mislead other Participants;

(2) overload, delay, or disrupt the Order Book or any other systems of the Facility or other

Participants; and

(3) disrupt the orderly conduct of trading or the fair execution of transactions.

(b) No Participant or Customer shall engage in any trading, practice or conduct on the Facility or

subject to the Rules that (1) violates Bids/Offers; (2) demonstrates intentional or reckless disregard for

the orderly execution of transactions during the closing period; (3) is, is of the character of, or is

commonly known to the trade as, “spoofing” (entering a Bid/Offer with the intent to cancel the Bid/Offer

before execution); or (4) is any other manipulative or disruptive trading practice prohibited by the Act or

Commission Regulations.

54
Rule 407 General Offences

It will be an offence for a Participant or Customer to:

(a) violate any Rule regulating the conduct or business of a Participant or Customer or any

agreement made with IGDL;

(b) engage in any act detrimental to IGDL’s operations or self-regulatory function or IGDL’s ability to

enforce its Rules or is detrimental to the interest or welfare of the Facility;

(c) fail to observe the proper standards of conduct expected of market participants;

(d) engage in any conduct which tends to impair the dignity or good name of the Facility;

(e) engage in conduct inconsistent with just and equitable principles of trade;

(f) engage in dishonourable or uncommercial conduct;

(g) aid or abet the commission of any Violation by another person;

(h) fail to supervise its employees or agents in the conduct of the Participant’s or Customer’s

business related to the Facility; and

(i) engage in conduct in violation of Applicable Law or the rules of any DCO which clears a Cleared

Contract in connection with or related to any transaction on or other activity related to the Facility.

Rule 408 Position Limits and Position Accountability

(a) To reduce the potential threat of market manipulation or congestion, the Facility shall adopt for

each Contract, as is necessary and appropriate, Position Limits or position accountability levels for

speculators.

(b) IGDL hereby adopts the Commission’s Position Limits for any Contract for which the Commission

has adopted a Position Limit. In no event will IGDL set its Position Limits at a level higher than the

Commission’s Position Limits.

(c) For Permitted Transactions, IGDL may set and enforce position accountability levels or send the

Commission a list of the Permitted Transactions transacted on the Facility.

(d) All Participants and Customers must comply with all IGDL and Commission requirements

regarding Position Limits or position accountability levels.

(e) Each Participant required to file any report, statement, form or other information with the

Commission pursuant to Commission Regulations concerning a Position Limit on any Contract or

commodity underlying a Contract must simultaneously file a copy of such report, statement, form or other

information with IGDL. Such information shall include, for Participants who are Intermediaries,

information concerning the Customers for which transactions are made on the Facility.

(f) Any Participant or Customer who exceeds an IGDL or Commission Position Limit by entering into

a transaction on the Facility shall be deemed in Violation. In addition, any Participant or Customer

entering bids or offers, if accepted, which would cause that Participant or Customer to exceed the

applicable IGDL or Commission Position Limit, shall be in Violation.

(g) Without limiting any provision of these Rules, IGDL shall have the authority to obtain from any

Participant or Customer, on request, information with respect to all positions of such Participant or

55
Customer in Contracts which are equivalent, for purposes of IGDL or Commission Position Limits, to

those transacted in by the Participant on the Facility.

56
CHAPTER 5 RULE ENFORCEMENT

Rule 501 Jurisdiction

(a) IGDL shall have the authority to initiate and conduct investigations, and prosecute Violations

committed by Facility Subject Persons, and to impose sanctions for such Violations as provided in these

Rules.

(b) Each Participant and Clearing Firm, upon becoming a Participant or Clearing Firm and thereafter

upon any change of address shall file with IGDL a written notice designating an address for receiving

service of documents. If a Participant or Clearing Firm fails to designate such an address, service by mail

to its address on file with IGDL shall be good service, and delivery thereof shall be deemed to have

occurred as of the date of such mailing.

Rule 502 Facility Market Regulation Staff Powers and Duties

(a) It shall be the duty of the Compliance Function to enforce these Rules, and shall have the

authority to inspect the books and records of all Facility Subject Persons and the authority to require any

Facility Subject Person to appear before it to answer questions regarding matters being investigated by

the Market Regulation Staff. The Compliance Function may also delegate such authority to Market

Regulation Staff who shall consist of personnel of IGDL, and such other Regulatory Services Providers as

IGDL may hire on a contract basis. The Compliance Function shall ensure that surveillance systems are

established to monitor trading to prevent manipulation and price distortion. Such monitoring may be done

by the Market Regulation Staff or a third party provider, and shall include real time monitoring and the

ability to conduct comprehensive and accurate transaction reconstructions.

(b) The Market Regulation Staff shall conduct investigations of possible Violations, prepare written

reports respecting such investigations, furnish such reports to the Review Panel and conduct the

prosecution of such Violations. An investigation must be commenced upon receipt of a request from any

Regulatory Agency, its staff or receipt of information (such as data produced by automated surveillance

systems) by IGDL that in the judgment of the Market Regulation Staff indicates a reasonable basis for

finding that a Violation may have occurred or will occur. Absent mitigating factors, each investigation will

be completed no later than 12 months after the investigation is opened. Mitigating factors include the

complexity of the investigation, the number of firms or individuals involved as potential wrongdoers, the

number of potential Violations to be investigated and the volume of documents and data to be examined

and analysed by Market Regulation Staff.

(c) If, in any case, the Compliance Function or another member of the Market Regulation Staff,

designated for this purpose by the Compliance Function, concludes that there is a reasonable basis for

finding a Violation, he or she shall (i) present an investigation report concerning the matter to the Review

Panel or (ii), in the case of Violations subject to Rule 516, proceed in accordance with Rule 516. The

investigation report must include the reason the investigation was initiated; a summary of the complaint, if

any; the relevant facts; Market Regulation Staff’s analysis and conclusions; and a recommendation as to

whether disciplinary action should be pursued. The report may also include the Facility Subject Person’s

disciplinary history at the Facility, including copies of any warning letters. The Market Regulation Staff

may issue a warning letter, including for minor transgressions. However, no more than one warning letter

may be issued to the same person found to have committed the same Violation more than once in a

rolling 12-month period.

(d) If, in any case, the Compliance Function or another member of the Market Regulation Staff,

designated for this purpose by the Compliance Function, concludes that no reasonable basis exists for

finding a Violation, he or she must prepare a written investigation report including the reason the

57
investigation was initiated; a summary of the complaint, if any; the relevant facts; and Market Regulation

Staff’s analysis and conclusions. The Compliance Function or another member of the Market Regulation

Staff may issue a warning letter in any case where it is concluded that no reasonable basis exists for

finding a Violation, without limitation on the number of warning letters issued to a person.

(e) Before presenting an investigation report to the Review Panel, the Market Regulation Staff may,

in its sole discretion, inform the prospective Respondent that it intends to submit the matter to the Review

Panel, and at such time the proposed Respondent may submit an offer of settlement to the Hearing

Panel, in accordance with the procedures of Rule 509, prior to presentation of the investigation report to

the Review Panel.

(f) IGDL has contracted with NFA to act as Regulatory Services Provider to provide certain

regulatory services to IGDL, including reviews of the Facility’s audit trail information for potential

Violations. IGDL will retain ultimate decision-making authority with respect to any regulatory services to

be provided by NFA.

(g) IGDL or its Regulatory Services Provider shall have the right with such prior reasonable advance

notice as is practicable under the circumstances (unless in furtherance of regulatory purposes in which

case without prior notice to Facility Subject Persons), in connection with determining whether all Rules

are being, will be, or have been complied with by the Facility Subject Person, to: (i) inspect systems,

equipment and software of any kind operated by the Facility Subject Person in connection with accessing,

and the Facility Subject Person’s transacting on, the Facility, wherever located; (ii) access, either

physically or electronically, the systems, equipment, software, and the premises on which the systems,

equipment, and software are located, any data stored in any of the systems or equipment, during the

regular business hours; and/or (iii) copy or reproduce any data to which IGDL has access under this

Rule. Each Facility Subject Person shall provide the Regulatory Services Provider with the same access

to its books and records and offices as it is required to provide to IGDL under the Rules and Applicable

Law.

Rule 503 The Review Panel

(a) The Review Panel shall have the power to direct that an investigation of any suspected Violation

be conducted by the Market Regulation Staff, and shall hear any matter referred to it by the Market

Regulation Staff regarding a suspected Violation.

(b) The Review Panel shall be appointed by the Board, and shall be comprised of five persons,

including at least two Participants and at least two non-Participants. In the case where the subject of the

investigation is a Clearing Firm, at least one member of the Review Panel shall be a Clearing Firm. The

Board shall appoint as chairman (the “Review Panel Chairman”) of the Review Panel a person who

would not be disqualified from serving as a “Public Director” as defined in Commission Regulations.

Three panel members shall constitute a quorum for any action, so long as they are in attendance at the

time of the relevant action. The Review Panel may not include any members of the Market Regulation

Staff, any person involved in adjudicating any other stage of the same Proceeding, or any person with a

history of disciplinary offenses that would be disqualifying under CFTC Regulation § 1.63(c). The Review

Panel shall include at least one member that is not a member of IGDL whenever the Review Panel is:

(i) acting with respect to a disciplinary action in which the Respondent is a member of the Board, the

Review Panel or the Hearing Panel; or (ii) when the suspected Violation involves manipulation (or

attempted manipulation) of the price of a Contract or conduct which directly results in financial harm to a

non-member of IGDL. The Review Panel shall include sufficient different membership interests so as to

ensure fairness and to prevent special treatment or preference for any person.

(c) All information, records, and documents provided to the Review Panel, and all related records

and documents shall be treated as confidential and shall not be disclosed, except as necessary to further

an IGDL investigation or as required by Applicable Law.

58
(d) Upon receipt of an investigation report, the Review Panel shall promptly review the report and,

within thirty (30) days of receipt, take one of the following actions:

(1) If the Review Panel determines that additional investigation or evidence is needed, it

shall promptly direct the Market Regulation Staff to conduct further investigation;

(2) If the Review Panel determines that no reasonable basis exists for finding a Violation or

that prosecution is otherwise unwarranted, it may direct that no further action be taken.

Such determination must be in writing and must include a written statement setting forth

the facts and analysis supporting the decision; or

(3) If the Review Panel determines that a reasonable basis exists for finding a Violation and

adjudication is warranted, it must direct that the Facility Subject Person alleged to have

committed the Violation be served with a notice of charges as set forth in Rule 504.

(e) If the Review Panel determines that there may have been a Violation but that no adjudication is

warranted, the Review Panel may issue a warning letter to the Facility Subject Person informing it that

there may have been a Violation and that such continued activity may result in disciplinary sanctions.

Where a Violation is determined to have occurred, no more than one warning letter for the same potential

Violation may be issued to the same person during a rolling 12 month period.

Rule 504 Notice of Charges

(a) If the Review Panel determines that a reasonable basis exists for finding a Violation and

adjudication is warranted, the Compliance Function shall serve a notice of charges (a “Notice”) on the

Facility Subject Person alleged to have been responsible for the Violation (such Facility Subject Person,

the “Respondent”). Such Notice shall state:

(1) the acts, practices or conduct with which the Respondent is charged;

(2) the Rules allegedly violated and how such acts, practices or conduct constitute a

Violation of such Rules;

(3) that the Respondent is entitled, upon written request filed with IGDL, within twenty

(20) days of service of the Notice, to a formal hearing on the charges;

(4) that the failure of the Respondent to request a hearing within twenty (20) days of service

of the Notice, except for good cause shown, shall be deemed a waiver of its right to a

hearing;

(5) that the failure of the Respondent to file an Answer (as defined in Rule 505) with the

Market Regulation Staff within twenty (20) days of service of the Notice shall be deemed

an admission of all of the acts, practices or conduct alleged in the Notice; and

(6) that the failure of the Respondent to expressly deny a particular charge contained in the

Notice shall be deemed an admission of such acts, practices or conduct.

(b) A Respondent shall have the right to be represented by legal counsel or any other representative

of its choosing in all succeeding stages of the disciplinary process, except by any member of the Board,

Review Panel or Hearing Panel, any employee of IGDL or any person substantially related to the

underlying investigation, such as a material witness or Respondent.

Rule 505 Answer; Request for Hearing; Failure to Answer or Deny Charges

59
(a) The Respondent shall serve on the Compliance Function a written answer (an “Answer”) to the

Notice and a written request for a hearing on the charges within thirty (30) days of the date of service of

the Notice. The Answer must include a statement that the Respondent admits, denies, or does not have

and is unable to obtain sufficient information to deny each allegation. A statement of lack of sufficient

information shall have the effect of a denial of the allegation.

(b) The Respondent’s failure to file an Answer within such thirty (30) day period shall be deemed an

admission of all allegations contained in the Notice.

(c) The Respondent’s failure to expressly deny a particular charge contained in the Notice shall be

deemed an admission of such acts, practices or conduct.

(d) The Respondent’s failure to request a hearing within such thirty (30) day period, absent good

cause shown, shall be deemed a waiver of Respondent’s right to a hearing.

Rule 506 Selection of Hearing Panel

(a) Formal hearings on any Notice shall be conducted by the Hearing Panel selected by the Board.

The Hearing Panel shall include at least two Participants and at least two non-Participants. In the case

where any Respondent is a Clearing Firm, at least one member of the Hearing Panel shall be a Clearing

Firm. The Board shall also select, as chairman of the Hearing Panel (“Hearing Panel Chairman”), a

person who would not be disqualified from serving as a “Public Director” as defined in Commission

Regulations. The Hearing Panel Chairman, in his or her sole discretion, shall set a date for the hearing

(the “Hearing Date”). The Hearing Panel may not include any members of the Market Regulation Staff,

any person involved in adjudicating any other stage of the same Proceeding, or any person with a history

of disciplinary offenses that would be disqualifying under CFTC Regulation § 1.63(c). The Hearing Panel

shall include at least one member that is not a member of IGDL whenever the Hearing Panel is: (i) acting

with respect to a disciplinary action in which the Respondent is a member of the Board, the Review Panel

or the Hearing Panel; or (ii) when the suspected violation involves manipulation (or attempted

manipulation) of the price of a Contract or conduct which directly results in financial harm to a

non-member of IGDL. The Hearing Panel shall include sufficient different membership interests so as to

ensure fairness and to prevent special treatment or preference for any person.

(b) The Hearing Panel Chairman shall notify the Market Regulation Staff and the Respondent of the

Hearing Date and the names of the members of the Hearing Panel at least fifteen (15) days prior to the

Hearing Date.

(c) No member of the Hearing Panel shall hear a case in which that member has a direct financial,

personal or other interest in the matter under consideration.

Rule 507 Challenge to Members of the Hearing Panel

Within ten (10) days after service on the Respondent of notice of the Hearing Date and names of the

members of the Hearing Panel, the Respondent may challenge, in writing, the inclusion of any member of

the Hearing Panel for cause, including without limitation, if the member has a direct financial, personal or

other interest in the matter under consideration. The merits of such challenge shall be finally decided by

the Regulatory Oversight Committee. If said written challenge is not received within such ten (10) day

period, absent good cause shown, any such right to challenge is deemed waived.

Rule 508 Hearing on Sanctions in the Event of Failure to Deny Charges; Failure to Request Hearing

Deemed Acceptance of Sanctions

In the event the Respondent fails to file an Answer or admits or fails to deny the charge of a Violation

contained in the Notice, the Hearing Panel shall find the Respondent guilty of each such Violation and

may impose a sanction for each such Violation subject to the limitations set forth in Rule 511(b)(7). The

60
Hearing Panel shall promptly notify the Respondent of any such sanction and of the Respondent’s right to

a hearing on the sanction within the period of time which shall be stated in the notice, after the imposition

of such sanction. Failure to request a hearing on the sanction in a timely manner, absent good cause

shown, shall be deemed to be acceptance of the sanction.

Rule 509 Settlement Prior to Commencement of Hearing

(a) Prior to the commencement of the hearing, the Hearing Panel may accept a written offer of

settlement from the Respondent, whereby the Respondent, without either admitting or denying any

Violations, may agree to:

(1) a cease and desist order;

(2) a fine for each Violation plus the monetary value of any benefit received as a result of the

Violation (provided that in no case shall any fine exceed $100,000 per Violation);

(3) restitution of any counterparty harm; and/or

(4) revocation or suspension of Trading Privileges or Customer or Clearing Firm status of the

Respondent.

(b) If the Hearing Panel accepts an offer of settlement, it must issue a written decision specifying

each Violation it has reason to believe was committed, including the basis for the Hearing Panel’s

conclusions. The sanctions must include full counterparty restitution where counterparty harm is

demonstrated, except where the amount of restitution or to whom it should be provided cannot be

reasonably determined. If an offer of settlement is accepted without the support of the Market Regulation

Staff, the decision must adequately support the Hearing Panel’s acceptance of the settlement. Where

applicable, the decision must include a statement that the Respondent has accepted the sanctions

imposed without either admitting or denying any Violations. Any sanctions imposed pursuant to an offer

of settlement must take into account the Respondent’s disciplinary history.

(c) The Respondent may withdraw an offer of settlement at any time before final acceptance by the

Hearing Panel. If an offer is withdrawn after submission, or is rejected by the Hearing Panel, the

Respondent may not be deemed to have made any admissions by reason of the offer of settlement and

may not be otherwise prejudiced by having submitted the offer of settlement.

Rule 510 Hearing Procedures

(a) In every instance where a Respondent has requested a hearing on a charge that is denied, or on

a sanction set by the Hearing Panel pursuant to Rule 508, the Respondent will have the opportunity for a

hearing in accordance with the procedures of this Rule.

(b) The Hearing Panel shall determine the procedures to be followed in any hearing before it, except

that the following shall apply in every case:

(1) The hearing must be fair and must be promptly convened after reasonable notice to the

Respondent.

(2) The prosecution shall be conducted by the Market Regulation Staff.

(3) The Respondent shall be allowed to appear personally at the hearing, and to be

represented by legal counsel or any other representative of its choosing and, either

personally or through such representative, to present witnesses and documentary

evidence and to cross-examine witnesses.

61
(4) The Market Regulation Staff and the Respondent shall deliver to each other a statement

listing the witnesses expected to be called and the documents expected to be introduced

into evidence, together with copies of such documents, by ten (10) days’ prior notice to

the hearing or as the Hearing Panel may reasonably specify. Unless the Hearing Panel,

in its discretion, waives compliance with this requirement, no witness may testify and no

documentary evidence may be introduced into evidence unless listed in and, in the case

of documents, furnished with such statement. On written request, the Market Regulation

Staff shall provide the Respondent with access to all books, documents or other tangible

evidence in the possession or under the control of IGDL which are to be relied upon by

the Market Regulation Staff or which are relevant to the charges; provided, however, that

protected attorney work product, attorney-client communications and investigative work

product, including the investigation report, are neither discoverable by a Respondent nor

subject to review by a Respondent as part of the investigation file.

(5) IGDL shall require that persons within its jurisdiction who are called as witnesses

participate in the hearing and produce evidence, and will make reasonable efforts to

secure the presence of all other persons called as witnesses whose testimony would be

relevant. Failure by a Facility Subject Person to so participate and produce evidence

when requested by IGDL shall be a Violation.

(6) No formal rules of evidence shall apply, and the Hearing Panel shall be free to accept or

reject any and all evidence it considers proper, but the hearing may not be so informal as

to deny a fair hearing.

(7) Neither the Market Regulation Staff, the Respondent, any witnesses testifying before the

Hearing Panel nor any other person within the Facility’s jurisdiction shall engage in

conduct that may impede the progress of a hearing or the fair and just resolution of the

subject matter thereof, and any such conduct may itself constitute a Violation.

(8) Ex parte contacts by any of the parties with members of the Hearing Panel shall not be

permitted.

(9) A substantially verbatim record capable of being accurately transcribed shall be made of

the Proceeding, provided, however, that such record need not be transcribed, unless the

transcript is requested by the Respondent or an applicable regulator, or unless the

decision is appealed to the Commission or reviewed by the Commission on its own

motion. In all other instances, a summary record of the hearing is permitted.

(10) The cost of transcribing the record of the hearing must be borne by a Respondent who

requests the transcript, or whose application for Commission review of the disciplinary

action has been granted. In all other instances, the cost of transcribing the record will be

borne by IGDL.

(11) The Notice, the Answer, any stenographic transcript of the hearing, the documentary

evidence and any other material presented to the Hearing Panel by either party with

notice to the other shall constitute the record of the hearing (the “Hearing Record”).

(12) The burden of proof shall be on the prosecution to prove a Violation by a preponderance

of the evidence. A finding of a Violation shall be made by majority vote based on the

Hearing Panel’s decision as to the weight of the evidence contained in the Hearing

Record.

(13) All sanctions imposed by the Hearing Panel must be commensurate with the Violations

committed and must be clearly sufficient to deter additional similar Violations by the

Respondent and similar Violations by other Facility Subject Persons. All sanctions must

62
take into account the Respondent’s disciplinary history. In the event of demonstrated

counterparty harm, any sanctions must include full counterparty restitution, except where

the amount of restitution or to whom it should be provided cannot be reasonably

determined.

Rule 511 Written Decision of Hearing Panel

(a) Promptly following a hearing conducted in accordance with Chapter 5 of the Rules, the Hearing

Panel shall render a written decision based upon the weight of evidence in the Hearing Record and must

provide a copy to the Respondent within thirty (30) days of such decision.

(b) The written decision shall include:

(1) the name of the Respondent;

(2) a summary of the charges alleged in the Notice;

(3) a summary of the Answer;

(4) a summary of the evidence produced at the hearing or, where appropriate, incorporation

by reference of the investigation report;

(5) a statement of the findings and conclusions of the Hearing Panel with respect to each

charge, and a complete explanation of the evidentiary and other basis for such findings

and conclusions with respect to each charge, or in the event of a settlement, a statement

specifying the alleged Violations;

(6) an indication of each specific Rule that the Respondent was found to have violated and

whether the Violation resulted in any financial harm to Customers;

(7) an order stating any sanctions imposed, including the basis for the sanctions, any terms

of the sanctions, the date the determination to impose sanctions was made and the

effective date of such sanctions; the sanctions that may be imposed on the Respondent

shall be one or more of the following:

(i) a cease and desist order;

(ii) a fine for each Violation plus the monetary value of any benefit received as a

result of the Violation (provided that in no case shall any fine exceed $100,000

per Violation);

(iii) restitution of counterparty harm, except where the amount of restitution or to

whom it should be provided cannot be reasonably determined; and/or

(iv) the issuance of a suspension or revocation of Trading Privileges or Customer or

Clearing Firm status of the Respondent; and

(8) a statement informing the respondent that the imposition of sanctions may be appealed

to the Commission pursuant to Part 9 of the Commission Regulations.

(c) The Hearing Panel shall take into consideration the Respondent’s disciplinary history prior to

imposing any disciplinary sanctions.

63
(d) IGDL shall also provide the written decision to the NFA through BASIC, or deliver the written

decision to the NFA to be input into BASIC.

(e) If IGDL suspends or revokes the Trading Privileges or Customer or Clearing Firm status of the

Respondent, it must publicly publish the information contained in the written notice pursuant to

Rule 511(b).

Rule 512 Liability for Expenses

Any Respondent that, after notice and opportunity for hearing, has been found to have committed a

Violation may, in the discretion of the Hearing Panel appointed in the matter, be required to pay to IGDL

an amount equal to any and all reasonable and documented out-of-pocket expenses incurred by IGDL in

connection with the prosecution of such Violations, in addition to any fine or other monetary sanction

which may be imposed upon such Respondent by virtue of the Violations found by the Hearing Panel.

Rule 513 Effective Date of Sanctions

(a) If a Respondent submits an offer of a settlement to the Hearing Panel, any sanction included as a

part of such settlement shall become final and effective on the date that the Hearing Panel approves such

settlement, or on such other date as is specified in the decision.

(b) Subject to Rule 513(c) and (d), any decision (including any sanctions) by a Hearing Panel

pursuant to this Chapter 5 or the Participation Committee pursuant to Rule 205 shall be the final decision

of IGDL and shall become effective fifteen (15) days, or such longer time as the Hearing Panel or

Participation Committee may specify, after a copy of the written decision of the Hearing Panel or

Participation Committee has been served on the Respondent, applicant, Participant or Customer as

applicable.

(c) In any case where a Respondent, applicant, Participant or Customer has consented to the action

taken and to the timing of its effectiveness, the Hearing Panel or Participation Committee may cause the

decision involving any disciplinary action (including any sanctions) to become effective prior to the fifteen

(15) day period.

(d) Any decision (including any sanctions) by a Hearing Panel or the Participation Committee may

become effective prior to the time set forth in Rule 513(b) if:

(1) IGDL reasonably believes, and so states in its written decision, that immediate action is

necessary pursuant to Rule 514;

(2) IGDL determines and so states in its written decision, that the actions of a SEF Subject

Person have impeded the progress of a disciplinary hearing; or

(3) IGDL determines a SEF Subject Person has violated Rules relating to timely submission

of accurate records required for clearing or verifying each day’s transactions or other

similar activities.

(e) If a decision is to become effective earlier than the time set forth in Rule 513(b) pursuant to

Rule 513(c) or Rule 513(d), IGDL shall notify the Respondent, applicant, Participant or Customer in

writing stating the reasons for the determination.

(f) Any fine or other monetary sanction imposed by a Hearing Panel shall be due and payable on the

effective date of the decision imposing such fine or sanction, or on such later date as the Hearing Panel

may specify.

64
Rule 514 Summary Suspension

(a) A Facility Subject Person (as identified by Market Regulation Staff in an investigation or by a

Trading Privilege Holder acting as an Intermediary for such Facility Subject Person) may be summarily

and immediately suspended from trading on the Facility, upon a written determination based on a

reasonable belief, by the Chairman of the Regulatory Oversight Committee that such immediate action is

necessary to protect the best interest of the market place.

(b) The Facility Subject Person against whom such summary action is taken shall be served with a

notice of the action either before the action is taken or at the earliest possible opportunity thereafter. The

notice shall state the action taken, the reasons for the action, the effective date and time, and the duration

of the action.

(c) The Facility Subject Person may as soon as practicable, upon written request, have a hearing

before the Hearing Panel pursuant to the procedures of Rule 510.

(d) Promptly following the hearing, the Hearing Panel shall render a written decision based upon the

weight of the evidence in the record and shall provide a copy to the Facility Subject Person. The decision

shall include a description of the summary action taken, the reasons for the summary action, a summary

of the evidence produced at the hearing, a statement of findings and conclusions, a determination that

the summary action should be affirmed, modified or reversed, a declaration of any action to be taken

pursuant to the determination, and the effective date and duration of the action.

Rule 515 Extension of Time Limits

Any time limit provided for in Rule 504, Rule 505, Rule 506, Rule 507, Rule 508, or Rule 510 may be

extended by mutual consent of the Respondent and the Market Regulation Staff, or by the Hearing Panel

Chairman.

Rule 516 Summary Fines

(a) Notwithstanding any other provision of this Chapter 5, the Compliance Function or its designee

shall have the authority to impose summary fines on Participants and Customers without the need for any

formal disciplinary procedures with respect to Violations of any Rule listed in Rule 516(e). Pursuant to

Rule 202(a)(1)(ii), a Participant that is an Intermediary may be held responsible for a Violation by its

Customer. Investigations of possible Violations of such a Rule shall be conducted in accordance with

Rule 502, but otherwise actions taken pursuant to this Rule 516 shall be made in accordance with the

procedures set forth herein rather than the procedures set forth in the remainder of this Chapter 5. The

authority to impose a summary fine under this Rule 516 does not prevent the Compliance Function from

submitting a Violation of any rule listed in Rule 516(e) to the Review Panel in accordance with the formal

disciplinary procedures of this Chapter 5.

(b) The Compliance Function or its designee shall give written notice to each Participant and

Customer subject to any summary fine imposed pursuant to this Rule 516. The written notice (“Fine

Notice”) shall set forth: (i) the provision of the Rules allegedly Violated; (ii) the act or omission

constituting each such Violation; (iii) the fine imposed for each Violation; and (iv) the date by which such

fine becomes final and must be paid or contested as provided below, which date shall be not less than

30 days after the date the Fine Notice was provided to the Participant or Customer.

(c) Any Participant or Customer against whom a summary fine is imposed pursuant to this Rule 516

may contest the imposition of such fine by serving on the Compliance Function a written answer to the

Fine Notice. Such answer (“Notice of Contest”) must: (i) state that the Participant or Customer contests

the imposition of the fine; (ii) acknowledges that the alleged Violation will be referred to the Review Panel;

and (iii) be submitted to the Compliance Function on or before the date specified in the Fine Notice.

Upon submission of a Notice of Contest the matter shall become subject to review by the Review Panel in

65
accordance with the formal disciplinary procedures set forth in the remainder of this Chapter 5 and shall

no longer be subject to this Rule 516.

(d) For purposes of imposing fines pursuant to this Rule 516, the Compliance Function shall review

all the facts and circumstances prior to determining whether a Violation occurred and may aggregate

individual Violations and treat such Violations as a single offense.

(e) The Compliance Function shall set the amount of any fine imposed pursuant to this Rule 516,

with the maximum aggregate fine for Violations of the same Rule, or subsection thererof, imposed by the

Compliance Function not to exceed $7,000 on an annual basis. If, in any case, the Compliance Function

or another member of the Market Regulation Staff, designated for this purpose by the Compliance

Function, concludes that there is a reasonable basis for finding an additional Violation, he or she shall

present an investigation report concerning the matter to the Review Panel in accordance with Rule 502,

which shall proceed in accordance with Rule 503. The following schedule lists the recommended actions

that the Compliance Function may impose:

Rule

Violation

Action Taken Per each Violation in a Rolling 12-month period

First

Violation

Second

Violation

Third

Violation

Fourth Violation

Rule 204(i) Warning

Letter

$2,000 $5,000 Referral to Review Panel for formal

disciplinary procedures.

66
CHAPTER 6 CONTRACTS TO BE TRADED

Rule 601 Listing Procedures

Any Trading Privilege Holder may propose to IGDL the listing of a Swap on the Facility by submitting a

listing application to IGDL. The Chief Executive Officer shall have authority subject to complying with

Rule 602 and to objectively justifiable commercial criteria, to submit the contract to the Commission,

either with a request for prior approval, or with a self-certification.

Rule 602 Swaps Not Readily Susceptible to Manipulation

Before the Chief Executive Officer submits a Swap to the Commission for prior approval or with a

self-certification, the Chief Compliance Officer shall determine that the Swap is not readily susceptible to

manipulation, and shall submit to the Commission the following information required by Appendix C to

Part 38 of Commission Regulations to show that the Swap complies with Core Principle 3:

(a) For cash-settled Swaps, documentation demonstrating that the settlement price index is a

reliable indicator of market values and conditions, is highly regarded by industry/market agents, and is

publicly available on a timely basis.

(b) Where an independent, private-sector third party calculates the referenced price index,

verification that the third party utilises business practices that minimise the opportunity or incentive to

manipulate the cash settlement prices included in the index.

(c) Where IGDL generates the cash settlement prices included in the index, information

demonstrating that the calculation procedures safeguard against potential attempts to artificially influence

the price, and a description of how the calculation procedures eliminate or reduce the impact of

potentially unrepresentative data.

(d) Appropriate speculative limits to prevent manipulation.

(e) Procedures for intraday market restrictions that pause or halt trading in the event of extraordinary

price moves that may result in distorted prices.

67
CHAPTER 7 GOVERNING LAW, JURISDICTION AND DISPUTE RESOLUTION

Rule 701 Choice of Law

The laws of England and Wales, without regard to its conflict of laws principles, will govern this Rulebook

and all disputes arising out of or related to IGDL, the Facility or any transaction on the Facility.

Rule 702 Disputes Among Trading Privilege Holders, Authorised Traders, Authorised Trading Firms and

Customers

All disputes between and among Facility Subject Persons that arise out of or relate to IGDL or the Facility

or any transaction that was made or attempted to be made on the Facility shall be resolved exclusively in

the courts of England and Wales, save for in the following circumstance:

(1) if all parties to the dispute are members or associates of the NFA, the dispute will be

resolved in NFA Member Arbitration; or

(2) if all parties separately agree to another forum, the dispute will be resolved in the other

forum.

Rule 703 Disputes with IGDL

(a) Subject to Rule 102, all disputes between and among IGDL on the one hand, and Facility Subject

Persons on the other hand, that arise out of or relate to the Facility, or any transaction that was made or

attempted to be made on the Facility, shall be resolved exclusively in the courts of England and Wales.

Suit on any such dispute must be brought within one year from the time the cause of action has accrued.

(b) Any current or former Facility Subject Person who does not substantially prevail in a lawsuit or

any other type of legal proceeding instituted in a court of law or otherwise against IGDL or any of its

officers, directors, committee members, volunteers, employees or agents, shall pay to IGDL any and all

reasonable expenses and disbursements, including reasonable attorneys’ fees, incurred by IGDL to

defend such lawsuit or proceeding.

68
CHAPTER 8 CONTRACT SPECIFICATIONS

Rule 801 Interest Rate Swaps Products Descriptions

Trading Hours

Unless otherwise indicated in a Swap’s specifications, the trading hours for all Swaps governed by this

Rule 801 are as follows:

o Order Book:

 1:30 a.m. – 5:30 p.m. Eastern Time, Monday to Friday (i-Swap)

 5:30 p.m. – 1:30 a.m. Eastern Time, Monday to Friday (GTN)

 3:00 p.m. Sunday – 1:30 a.m. Monday, Eastern Time (GTN)

o Voice RFQ: 24 Hours, Monday to Friday.

o All Pre-Arranged Crosses: 24 Hours, Monday to Friday.

Products — Rule 801:

(1) Fixed for Floating IRS

(2) Basis Swaps

(3) Forward Rate Agreements (FRA)

(4) Overnight Index Swaps (OIS)

(5) Interest Rate Options

(a) Swap Options

(b) Inflation Swaps

(c) Inflation Rate Options

(d) Exotic Options and Swaps

69
Product Specifications

Rule 801(1) — Fixed for Floating IRS

A Fixed for Floating IRS is an Interest Rate Swap for which settlement is in the form of periodic fixed

interest payments and a stream of periodic floating interest payments based on an interest rate over a

term to maturity. The interest rate payments are exchanged for a specified period based on a notional

amount.

Currencies

USD

EUR

GBP

Specifications

Trading Conventions

o Buyer (Payer) pays fixed interest rate and receives floating interest rate.

o Seller (Receiver) receives fixed interest rate and pays floating interest rate.

Upfront Payment Dates:

o USD – T+1 through maturity

o EUR – T+1 through maturity

o GBP – T+1 through maturity

Settlement Convention:

o USD – T+2

o EUR – T+2

o GBP – T+2

Swap Leg Conventions

o The terms of Fixed versus Floating Interest Rate Swaps are based on a number of

combinations of the criteria below.

 Fixed Leg

• Payment Frequency

o Monthly, Quarterly, Semi-Annually, or Annually

• Day Count Convention

o 30/360, Actual/360, Actual/365.FIXED, Actual/Actual.ISDA,

30E/360, 30E/360.ISDA, Actual/Actual.ICMA

• Holiday Calendar

o Applied in accordance for the country currency denoted for the

instrument

• Business Day Convention

o Modified following with adjustment to period end dates.

Business days in this convention must be valid business days for

the countries denoted by the currency (EUTA, GBLO, USNY). If

not, it will be the next day that is a business day on both

calendars.

• Fixed Rate

o The traded interest rate yield or basis points on Trade Date

 Floating Leg

• Reset Frequency

o Monthly, Quarterly, Semi-Annual

• Day Count Convention

o 30/360, Actual/360, Actual/365.FIXED, Actual/Actual.ISDA,

30E/360, 30E/360.ISDA, Actual/Actual.ICMA

• Holiday Calendar

70
o Applied in accordance for the country currency denoted for the

instrument

• Business Day Convention

o Modified Following with adjustment to period end dates.

Business days in this convention must be valid business days for

the countries denoted by the currency (EUTA, GBLO, USNY). If

not, it will be the next day that is a business day on both

calendars.

• Fixed Rate

o The traded interest rate yield or basis points on Trade Date

• Interest Rate Benchmark

o EUR-EURIBOR-Reuters, EUR-EURIBOR-Telerate(incoming),

GBP-LIBOR-BBA, USD-LIBOR-BBA.

o Leg Computation Convention: none, flat, straight or spread exclusive.

Trade Date

o The date on which the parties enter into the Swap transaction.

Effective Date

o The first date from which fixed and floating interest amounts accrue. It is also referred to

as the Start Date or the Value Date. The Effective Date of the Swap must be a business day

subject to the appropriate Business Day Convention.

Trade Start Type

o Spot Starting

 A swap whose Effective Date is 2 business days from the Trade Date (T+2).

o Forward Starting

 A swap whose Effective Date is anything after the Effective Date for a Spot

Starting swap.

o Same Day Starting

 A swap whose Effective Date is the same as the Trade Date (T+0).

Maturity Date

o The final date until which Fixed and Floating amounts accrue. The Maturity Date may

also be referred to as the Termination Date or End Date.

Tenor

o The duration of time from the Effective Date to the Maturity Date. Tenors of any duration

greater than 0 years to 50 years.

o Listed Tenors, also known as On-the-Run, are whole calendar year Spot Starting

Contracts with a Tenor of 1 through 51 years.

o Other Tenors, also known as Off-the-Run, means any partial year Tenor (Months,

Weeks, Days).

Roll Day Convention

o The date used for determining all fixed and floating Reset Dates. Roll Days define the

beginning and end of Fixed and Floating interest accrual periods.

o For On-the-Run Contracts, the Roll Day is the same date of the month as the Effective

Date. For Off-the-Run Contracts, it can be any date of the month, subject to the provisions of

the Business Day Convention. Roll Day marks the start of a new interest accrual period, and

is the date on which a Reset Rate takes effect.

Floating Reset Dates

71
o Dates utilized to determine the Floating Rate amounts for each interest accrual period

during the Tenor of the contract. Except in the case of a Stub Period, the Reset Date is

aligned with the floating rate frequency as determined.

First Period Fixing Date

o For Spot Starting swaps, the Interest Rate for the first interest period is fixed on the

Trade Date, for both Floating and Fixed Rates.

o For Forward Starting swaps, the Fixed Rate for the first interest period is fixed on the

Trade Date, and the Floating Rate for the first interest period is fixed 2 business days prior to

the first floating payment date, taking into account agreed non-working days.

Stub Period Rate

o For swaps with partial year Tenors, an interest period that is shorter than the standard

underlying Floating index interest periods may occur between the Effective Date and the first

or last Roll Date (knows as a Stub Period). In these cases, the Interest Rate for such Stub

Period is determined using linear interpolation based on the two index rates that surround the

Stub Period this can be applied either at the start or end of that period: Front or Back.

Trade Types

o The Platform may support the following trade types:

 Outrights

• An Outright swap is where one party is the payer of the fixed rate and

receiver of the floating rate and the other party is the receiver of the fixed

fate and payer of the floating rate.

 Switches or Spreads

• Is the simultaneous purchase and sale of two different Tenors of the

yield curve (e.g. 2 year by 10 year).

 Butterflies

• Butterflies are a combination of two spreads/switches (e.g. 2 year by

5 year by 10 year).

Contract Size

o Minimum notional size is dependent on currency and tenor.

Minimum Price Fluctuation

o Outrights

 The interest rate yield is quoted in increments of a minimum of .000025

(1/40th of a basis point).

o Spreads and Butterflies will be quoted in basis points dependent in multiples of the

increments of the underlying Outrights.

Final Settlement Price

o Multiple payments take place during the term of the swap. Settlement price used for the

periodic exchange of fixed and floating payments is based on the following factors:

 Fixed Leg

• Payment amount on the fixed leg is based on the traded price and

notional amounts of the swap on Trade Date. Payment timing on the

fixed leg is based on the Payment Frequency, Day Count Convention,

Business Day Convention, and Roll Day.

 Floating Leg

• Payment on the floating leg is based on the Interest Rate and notional

amounts of the swap. Payments on the floating leg are based on the

Payment Frequency, Day Count Convention, Business Day Convention,

72
Roll Day Convention, Spread (if any), Floating Rate Day Count Fraction

and Floating Reset Dates.

Additional Payments/Fees

o None.

Clearing

o Contracts are eligible to be cleared at CME, LCH.Clearnet and JSCC.

73
Rule 801(2) — Basis Swaps

A Basis Swap is an Interest Rate Swap for which settlement is in the form of periodic floating interest

payments and periodic floating interest payments based on interest rate benchmarks over a term to

maturity. The interest rate payments are exchanged for a specified period based on a notional amount.

Currencies

USD

EUR

GBP

Specifications

Trading Conventions

o Buyer (Payer) pays floating interest rate plus/minus a spread and receives floating

interest rate.

o Seller (Receiver) receives floating interest rate plus/minus a spread and pays floating

interest rate.

Supported Basis Combinations

o 1M EURIBOR vs 3M EURIBOR

o 1M EURIBOR vs 6M EURIBOR

o 3M EURIBOR vs 6M EURIBOR

o 1M GBP-LIBOR vs 3M GBP-LIBOR

o 1M GBP-LIBOR vs 6M GBP-LIBOR

o 3M GBP-LIBOR vs 6M GBP-LIBOR

o 1M USD-LIBOR vs Federal Funds H.15

o 3M USD-LIBOR vs Federal Funds H.15

o 6M USD-LIBOR vs Federal Funds H.15

o 1M USD-LIBOR vs 3M USD-LIBOR

o 1M USD-LIBOR vs 6M USD-LIBOR

o 3M USD-LIBOR vs 6M USD-LIBOR

Upfront Payment Dates:

o USD – T+1 through maturity

o EUR – T+1 through maturity

o GBP – T+1 through maturity

Settlement Convention:

o USD – T+1

o EUR – T+1

o GBP – T+1

Swap Leg Conventions

o The terms of Floating vs. Floating Interest Rate Swaps are based on a number of

combinations of the criteria below.

 Floating Leg 1

• Payment Frequency

o Monthly, Quarterly, Semi-Annually, or Annually

• Day Count Convention

o 30/360, Actual/360, Actual/365.FIXED, Actual/Actual.ISDA,

30E/360, 30E/360.ISDA, Actual/Actual.ICMA

• Holiday Calendar

o Applied in accordance for the country currency denoted for the

instrument

• Business Day Convention

o Modified Following with adjustment to period end dates.

Business days in this convention must be valid business days on

74
both the calendars (EUTA, GBLO, USNY). If not, it will be the

next day that is a business day on both calendars.

• Floating Rate

o The floating interest rate yield or basis points on Trade Date

 Floating Leg 2

• Reset Frequency

o Monthly, Quarterly, Semi-Annual or Annually

• Day Count Convention

o 30/360, Actual/360, Actual/365.FIXED, Actual/Actual.ISDA,

30E/360, 30E/360.ISDA, Actual/Actual.ICMA

• Holiday Calendar

o Applied in accordance for the country currency denoted for the

instrument

• Business Day Convention

o Modified Following with adjustment to period end dates.

Business days in this convention must be valid business days on

both calendars (EUTA, GBLO, USNY). If not, it will be the next

day that is a business day on calendars.

• Interest Rate Benchmark

o EUR-EURIBOR-Reuters, EUR-EURIBOR-Telerate (incoming),

GBP-LIBOR-BBA, USD-LIBOR-BBA.

Trade Date

o The date on which the parties enter into the Swap transaction.

Effective Date

o The first date from which floating interest amounts accrue. It is also referred to as the

Start Date or the Value Date. The Effective Date of the Swap must be a business day

subject to the appropriate Business Day Convention.

Trade Start Type

o Spot Starting

 A swap whose Effective Date is 2 business days from the Trade Date (T+2).

o Forward Starting

 A swap whose Effective Date is anything after the Effective Date for a Spot

Starting swap.

o Same Day Starting

 A swap whose Effective Date is the same as the Trade Date (T+0).

Maturity Date

o The final date until which Floating amounts accrue. The Maturity Date may also be

referred to as the Termination Date or End Date.

Tenor

o The duration of time from the Effective Date to the Maturity Date. The Exchange will

support Tenors of any duration greater than 0 years to 50 years.

o Listed Tenors, also referred to as On-the-Run, means whole year Spot Starting or Same

Day Starting Instruments with a Tenor of 1 through 15, 20, 25, 30, 35, 40,45 and 50 years.

o Other Tenors means any whole year Tenors other than the Listed Tenors and any partial

year Tenor.

Roll Day Convention

o The date used for determining all fixed and floating Reset Dates. Roll Days define the

beginning and end of Floating interest accrual periods.

o For On-the-Run Instruments, the Roll Day is the same date of the month as the Effective

Date. For Off-the-Run Instruments, it can be any date of the month, subject to the provisions

of the Business Day Convention. Roll Day marks the start of a new interest accrual period,

and is the date on which a Reset Rate takes effect.

75
 Note: Subject to good business days – as with all instruments, will never roll

forward to the following month.

Floating Reset Dates

o Dates utilized to determine the Floating Rate amounts for each interest accrual period

during the Tenor of the Instrument. Except in the case of a Stub Period, the Reset Date is 2

business days (USD, EUR) or zero business days (GBP) prior to the Roll Date for that

interest accrual period.

First Period Fixing Date

o For Spot Starting and Same Day Starting swaps, the Interest Rate for the first interest

period is fixed on the Trade Date, for both Floating Rates.

o For Forward Starting swaps, the Floating Rate for the first interest period is fixed on the

Trade Date, and the Floating Rate for the first interest period is fixed 2 business days prior to

the Effective Date.

Stub Period Rate

o For swaps with partial year Tenors, an interest period that is shorter than the standard

underlying Floating index interest periods may occur between the Effective Date and the first

or last Roll Date (knows as a Stub Period). In these cases, the Interest Rate for such Stub

Period is determined using linear interpolation based on the two index rates that surround the

Stub Period this can be applied either at the start or end of that period: Front or Back.

Trade Types

o The Platform may support the following trade types:

 Outrights

• An Outright swap is where one party is the payer of the floating rate 1

plus/minus a spread and receiver of the floating rate 2 and the other

party is the receiver of the floating rate 1 plus/minus a spread and payer

of the floating rate 2.

 Switches

• Switches are the simultaneous purchase and sale of two different Tenors

of the yield curve (e.g. 2 year by 10 year).

 Butterflies

• Butterflies are the simultaneous purchase(s) and sale(s) of three

different tenors of the yield curve (e.g. 2 year by 5 year by 10 year).

Instrument Minimum and Incremental Size

o Minimum notional size is dependent on currency and tenor.

o Block Trades

 Minimum notional size as stated by the Commission and increments dependent

on currency and tenor.

Quoting Convention

o Outrights are quoted in interest rate yield in a minimum 1/10th of a basis point

increments.

o Spreads and Butterflies are quoted in interest rate yield differential in minimum

1/10th basis point increments.

 Spot Starting

• Close of business on Trade Date.

 Forward Starting

• Close of business three business days prior to the Effective Date of the

swap.

 Block Trades must occur outside the Order Book and in a quantity that meets or

exceeds Appropriate Minimum Block Sizes set by the Commission.

Final Settlement Price

o Multiple payments take place during the term of the swap. Settlement price is based on

the following factors, which must be specified by the parties:

76
 Interest rate, interest rate benchmark, notional amounts of the swap, Payment

Frequency, Day Count Convention, Business Day Convention, Roll Day

Convention, Spread (if any), Floating Rate Day Count Fraction and Floating

Reset Dates.

Additional Payments/Fees

o None.

Clearing

o Contracts are eligible to be cleared at CME, LCH.Clearnet and JSCC.

77
Rule 801(3) — Forward Rate Agreement (FRA)

A Forward Rate Agreement is an Interest Rate Swap for which settlement is in the form of one fixed

interest payment and one floating interest payment based on an interest rate benchmark to be paid or

received on an obligation beginning at a future start date. The interest rate payments are exchanged

based on a notional amount.

Currencies

USD

EUR

GBP

Specifications

Trading Conventions

o Buyer (Payer) pays fixed interest rate and receives floating interest rate.

o Seller (Receiver) receives fixed interest rate and pays floating interest rate.

Upfront Payment Dates:

o USD – T+1 through maturity

o EUR – T+1 through maturity

o GBP – T+1 through maturity

Settlement Convention:

o USD – T+1

o EUR – T+1

o GBP – T+1

Swap Leg Conventions

o The terms of FRAs are based on a number of combinations of the criteria below.

 Fixed Leg

• Payment Frequency

o Once

• Day Count Convention

o 30/360, Actual/360, Actual/365.FIXED, Actual/Actual.ISDA,

30E/360, 30E/360.ISDA, Actual/Actual.ICMA

• Holiday Calendar

o Applied in accordance with the country relating to the currency of

the instrument

• Business Day Convention

o Modified Following with adjustment to period end dates.

Business days in this convention must be valid business days on

both the holiday calendars of that country (EUTA, GBLO,

USNY). If not, it will be the next day that is a business day on

both calendars.

• Fixed Rate

o The traded interest rate yield or basis points on Trade Date

 Floating Leg

• Reset Frequency

o Once

• Day Count Convention

o 30/360, Actual/360, Actual/365.FIXED, Actual/Actual.ISDA,

30E/360, 30E/360.ISDA, Actual/Actual.ICMA

• Holiday Calendar

o Applied in accordance with the country relating to the currency of

the instrument

• Business Day Convention

o Modified Following with adjustment to period end dates.

Business days in this convention must be valid business days on

78
both the calendars for each country (EUTA, GBLO, USNY). If

not, it will be the next day that is a business day on both

respective country holiday calendars.

• Interest Rate Benchmark

o EUR-EURIBOR-Reuters, EUR-EURIBOR-Telerate (incoming),

GBP-LIBOR-BBA, USD-LIBOR-BBA

Trade Date

o The date on which the parties enter into the Swap transaction.

Effective Date

o The first date from which fixed and floating interest amounts accrue. It is also referred to

as the Start Date or the Value Date. The Effective Date of the Swap must be a business day

subject to the appropriate Business Day Convention.

Maturity Date

o The final date until which Fixed and Floating amounts accrue. The Maturity Date may

also be referred to as the Termination Date or End Date. The maturity range is 3 days to

3 years, subject to the maximum tenor listed below.

Tenor

o The duration of time from the Effective Date to the Maturity Date Tenors will be support

for any duration greater than 0 month to 12 months.

o Listed Tenors, also referred to as On-the-Run, means whole year Spot Starting or Same

Day Starting Instruments with a Tenor of an integer number of months.

o Other Tenors means any Tenors other than the Listed Tenors.

Floating Reset Dates

o Dates utilized to determine the Floating Rate amount for the interest accrual period

during the Tenor of the Instrument. Except in the case of a Stub Period, the Reset Date is

adjusted business days dependent on the currency prior to the Roll Date for that interest

accrual period.

First Period Fixing Date

o The Fixed Rate for the first interest period is fixed on the Trade Date, and the Floating

Rate for the first interest period is fixed 2 business days prior to the Effective Date.

Trade Types

o The Platform may support the following trade types:

 Outrights

• An Outright swap is where one party is the payer of the fixed rate and

receiver of the floating rate and the other party is the receiver of the fixed

rate and payer of the floating rate.

 Switches also known as Spreads

• These are the simultaneous purchase and sale of two different Tenors of

the yield curve (e.g. 3x6 by 9x12).

Instrument Minimum and Incremental Size.

o Minimum notional size is dependent on currency and tenor.

o Block Trades. Minimum notional size as stated by the Commission and increments

Dependent on currency and tenor.

Quoting Convention

o Outrights are quoted in interest rate yield in minimum of 1/40th of a basis point

increments.

o Spreads/Switches will be quoted in basis points dependent in multiples of the increments

of the underlying Outrights.

Last Trading Day

o Spot Starting

 Close of business on Trade Date.

79
o Forward Starting

 Close of business three business days prior to the Effective Date of the swap.

Final Settlement Price

o Multiple payments take place during the term of the swap. Settlement price is based on

the following factors, which must be specified by the parties:

 Interest rate, interest rate benchmark, notional amounts of the swap, Payment

Frequency, Day Count Convention, Business Day Convention, Roll Day

Convention, Spread (if any), Floating Rate Day Count Fraction, Floating Reset

Dates, Discount Rate, Discount Rate Day Count Fraction and FRA

Discounting/FRA Yield Discounting.

Additional Payments/Fees

o None.

Clearing

o Contracts are eligible to be cleared at CME, LCH.Clearnet and JSCC.

Block Trades must occur outside the Order Book and in a quantity that meets or exceeds Appropriate

Minimum Block Sizes set by the Commission.

80
Rule 801(4) — Overnight Index Swaps (0IS)

Contract

Specification

Details

Product Description An Overnight Index Swap is an interest rate swap for which settlement is in the

form of periodic fixed interest payments and periodic floating interest payments

based on an overnight rate being exchanged for a fixed interest rate over a term to

maturity. The interest rate payments are exchanged for a specified period based

on a notional amount.

Currencies The interest rate cash flows are net settled in the following major currencies on

fixing date:

USD

EUR

GBP

Trading

Conventions

• Buyer (Payer) pays fixed interest rate and receives floating interest rate.

• Seller (Receiver) receives fixed interest rate and pays floating interest rate.

Upfront Payment

Dates

• USD – T+1 through maturity

• EUR – T+1 through maturity

• GBP – T+1 through maturity

Settlement

Convention

• USD – T+1

• EUR – T+1

• GBP – T+1

Swap Leg

Conventions

The terms of Fixed vs. Floating Interest Rate Swaps are based on a number of

combinations of the criteria below.

• Fixed Leg

o Payment Frequency

 At Maturity Date, Annually, semi-annual, Quarterly, or

monthly.

o Day Count Convention

 30/360, Actual/360, Actual/365.FIXED,

Actual/Actual.ISDA, 30E/360, 30E/360.ISDA,

Actual/Actual.ICMA

o Holiday Calendar

 Applied in accordance for the country currency denoted for

the instrument

o Business Day Convention

 Modified Following with adjustment to period end dates.

Business days in this convention must be valid business

days on both the calendars (EUTA, GBLO, USNY). If not,

it will be the next day that is a business day on both

calendars.

o Leg Pay Date Offset:

 USD – 2D

 EUR – 1D

 GBP – 0D

o Fixed Rate

 The traded interest rate yield or basis points on Trade

Date

• Floating Leg

o Reset Frequency

81
Contract

Specification

Details

 Daily

o Day Count Convention

 30/360, Actual/360, Actual/365.FIXED,

Actual/Actual.ISDA, 30E/360, 30E/360.ISDA,

Actual/Actual.ICMA

o Holiday Calendar

 Applied in accordance for the country currency denoted for

the instrument

o Business Day Convention

 Modified Following with adjustment to period end dates.

Business days in this convention must be valid business

days on both calendars (EUTA, GBLO, USNY). If not, it

will be the next day that is a business day on both

calendars.

o Leg Pay Date Offset:

 USD – 2D

 EUR – 1D

 GBP – 0D

o Overnight Rate

 EUR-EONIA-OIS-COMPOUND, GBP-WMBA-SONIACOMPOUND, USD-Federal Funds-H.15-OISCOMPOUND

Trade Date The date on which the parties enter into the Swap transaction.

Effective Date The first date from which fixed and floating interest amounts accrue. It is also

referred to as the Start Date or the Value Date. The Effective Date of the Swap

must be a business day subject to the appropriate Business Day Convention.

Trade Start Type • Spot Starting

o A swap whose Effective Date is 2 business days from the Trade

Date (T+2).

• Forward Starting

o A swap whose Effective Date is anything after the Effective Date

for a Spot Starting swap.

• Same Day Starting

o A swap whose Effective Date is the Trade Date (T+0).

• Day +1 Starting

o A swap whose Effective Date is the Trade Date (T+1).

Maturity Date The final date until which Fixed and Floating amounts accrue. The Maturity Date

may also be referred to as the Termination Date or End Date.

Tenor The duration of time from the Effective Date to the Maturity Date. The Exchange

will support Tenors of any duration greater than 0 years to 30 years.

• Listed Tenors, also referred to as On-the-Run, means whole year Spot

Starting or Same Day Starting Instruments with a Tenor of 1 through 15,

20, 25, and 30 years.

• Other Tenors means any whole year Tenors other than the Listed Tenors

and any partial year Tenor.

Roll Day

Convention

The date used for determining all fixed and floating Reset Dates. Roll Days define

the beginning and end of Fixed and Floating interest accrual periods.

• For On-the-Run Instruments, the Roll Day is the same date of the month

as the Effective Date. For Off-the-Run Instruments, it can be any date of

82
Contract

Specification

Details

the month, subject to the provisions of the Business Day Convention. Roll

Day marks the start of a new interest accrual period, and is the date on

which a Reset Rate takes effect.

Floating Reset

Dates

Dates utilized to determine the Floating Rate amounts for each interest accrual

period during the Tenor of the Instrument. Except in the case of a Stub Period, the

Reset Date is adjusted business days dependent on the currency prior to the Roll

Date for that interest accrual period.

First Period Fixing

Date.

• For Spot Starting and Same Day Starting swaps, the Interest Rate for the

first interest period is fixed on the Trade Date, for both Floating and Fixed

Rates.

• For Forward Starting swaps, the Fixed Rate for the first interest period is

fixed on the Trade Date, and the Floating Rate for the first interest period is

fixed 2 business days prior to the Effective Date.

Stub Period Rate For swaps with partial year Tenors, an interest period that is shorter than the

standard underlying Floating index interest periods may occur between the

Effective Date and the first or last Roll Date (knows as a Stub Period). In these

cases, the Interest Rate for such Stub Period is determined using linear

interpolation based on the two index rates that surround the Stub Period this can

be applied either at the start or end of that period: Front or Back.

Trade Types The Platform may support the following trade types:

• Outrights

o An Outright swap is where one party is the payer of the fixed rate

and receiver of the floating rate and the other party is the receiver

of the fixed rate and payer of the floating rate.

• Switches also known as Spreads

o These are the simultaneous purchase and sale of two different

Tenors of the yield curve (e.g. 2 year by 10 year).

• Butterflies

o Butterflies are the simultaneous purchase(s) and sale(s) of three

different tenors of the yield curve (e.g. 2 year by 5 year by 10

year).

Instrument

Minimum and

Incremental Size.

• Minimum notional size is dependent on currency and tenor.

• Block Trades

o Minimum notional size as stated by the Commission and

increments dependent on currency and tenor.

Quoting Convention • Outrights are quoted in interest rate yield in minimum of 1/40th of a basis

point increments.

• Spreads and Butterflies will be quoted in basis points dependent in

multiples of the increments of the underlying Outrights.

Last Trading Day • Spot Starting

o Close of business on Trade Date.

• Forward Starting

o Close of business three business days prior to the Effective Date

of the swap.

Additional • None.

83
Contract

Specification

Details

Payments/Fees

Clearing • Contracts are eligible to be cleared at CME, LCH.Clearnet and JSCC.

Block Trades • Block Trades must occur outside the Order Book and in a quantity that

meets or exceeds Appropriate Minimum Block Sizes set by the

Commission.

84
Rule 801(5) — Interest Rate Options

Interest Rate Options contracts cover the following product areas:

• Interest Rate Options

• Swaptions

• Inflation Swaps

• Inflation Rate Options

• Exotic Options and Swaps

Currencies

Interest Rate Options

USD

EUR

GBP

Swaptions

USD

EUR

GBP

Inflation Swaps

EUR

GBP

Inflation Rate Options

USD

EUR

GBP

Exotic Options and Swaps

USD

EUR

GBP

Specifications

Option Type

o Interest Rate Swaption

 Type

• Payer – A buyer of a payer Swaption has the option to pay the

underlying swap at the agreed price

• Receiver – A buyer of a receiver Swaption has the option to receive the

underlying swap at the agreed price

 Term – The future length of the swap

 Exercise – The date at which the option can be exercised on

 Underlying Swap

• Fixed Leg

o Fixed Interest rate

• Floating Leg

o Underlying benchmark

• Optional knockout clause

o Interest Rate Options

 Type

• Cap – The buyer of a Cap option receives the payments at the end of

each period in which the underlying interest rate exceeds an agreed

strike price

• Floor – The buyer of a Floor option receives the payments at the end of

each period in which the underlying interest rate is below an agreed

strike price

 Underlying Interest Rate

85
• Single Underlying Rate – Single underlying interest rate as listed in the

Interest Rate benchmarks

• Spread – Spread between 2 underlying interest rates as listed in the

interest rate benchmarks

 Strike

 Expiry Date

 Convention

• Payment Frequency

o Monthly

o Quarterly

o Bi-Annually

o Annually

• Payment rate

o Digital

o Linear

 Payment currency

 Optional no call period – must be an agreed number of calendar days

 Option premium

 Optional reset period – must be an agreed number of calendar days

 Start Type

• Immediate

• Forward

o Exotic Options and Swaps

 Type

• Buyer – The buyer of the swap receives a series of payments in relation

to one agreed swap leg (leg 1) and makes a series of payments based

on another agreed swap leg (leg 2)

• Seller – The seller of the swap makes a series of payments in relation to

one agreed swap leg (leg 1) and receives a series of payments based on

another agreed swap leg (leg 2)

 Tenor

 Leg 1

• Rate type

o Fixed – agreed spread

o Floating

 Single Underlying Rate – Single underlying interest rate

as listed in the Interest Rate benchmarks

 Spread – Spread between 2 underlying interest rates as

listed in the interest rate benchmarks

• Currency

• Optional agreed spread

• Optional agreed rate range

• Optional cap

• Optional floor

 Leg 2

• Rate type

o Fixed – agreed spread

o Floating – Floating

 Single Underlying Rate – Single underlying interest rate

as listed in the Interest Rate benchmarks

 Spread – Spread between 2 underlying interest rates as

listed in the interest rate benchmarks

• Currency

• Optional agreed spread

• Optional agreed rate range

• Optional cap

86
• Optional floor

 Optional reset period – must be an agreed number of calendar days

 Optional break clause

 Optional correlation factor – This will be a mathematical formula on which the

payout of the trade will be based. This formula will be agreed at the time of

trade.

 Start Type

• Immediate

• Forward

 Optional coupon

 Optional lockout period

o Inflation Swap

 Inflation Swap – The buyer of an inflation swap pays a fixed interest rate and

receives the agreed floating inflation rate

• Tenor

• Fixed Rate (Traded Price)

• Inflation Rate benchmark – this can be any inflation benchmark that

settles in the listed currencies

• Optional forward start

o Inflation Option

 Types

• Cap – The buyer of a cap option receives the right to receive a payment

should the rate of the agreed underlying index rise above a certain level

• Floor – The seller of a floor option receives the right to receive a

payment should the rate of the agreed underlying index fall below a

certain level

 Tenor

 Exercise Type

• American

• European

• Bermudan

 Premium (Traded Price x agreed notional)

 Premium Type

• Spot

• Annuity

• Forward

Payment Frequency

o Interest Rate Swaptions – the payment frequency will be an agreed, valid, calendar

integer

o Interest Rate Options – the payment frequency will be an agreed, valid, calendar integer

o Exotic Options and Swaps – the payment frequency will be an agreed, valid, calendar

integer

o Inflation Swaps – the payment frequency will be an agreed, valid, calendar integer

o Inflation Rate Options – the payment frequency will be an agreed, valid, calendar integer

Day Count Convention

o Interest Rate Swaptions

 30/360

 Act/360

 Act/365

 360/360

 30E/360

 AFI/365

 ACT/366

 ACT/ACT

o Interest Rate Options

87
 ACT/360

 ACT/365

 360/360

 30/360

 30E/360

 AFI/365

 ACT/366

 ACT/ACT

o Exotic Options and Swaps

 ACT/360

 ACT/365

 360/360

 30/360

 30E/360

 AFI/365

 ACT/366

 ACT/ACT

o Inflation Swaps

 ACT/360

 ACT/365

 360/360

 30/360

 30E/360

 AFI/365

 ACT/3613

 ACT/ACT

Holiday Calendar Conventions

o Interest Rate Swaptions

 ABU DHABI

 SYDNEY

 TORONTO

 PRAGUE

 COPENHAGEN

 HONG KONG

 BUDAPEST

 LONDON

 TEL AVIV

 JAFFA

 TOKYO

 WELLINGTON

 SEOUL

 BANGKOK

 TARGET

 WARSAW

 MOSCOW

 RIYADH

 SINGAPORE

 ISTANBUL

 NEW YORK

 OSLO

 STOCKHOLM

 JOHNNESBURG

 KUALA LUMPAR

o Interest Rate Options

 ABU DHABI

88
 SYDNEY

 TORONTO

 PRAGUE

 COPENHAGEN

 HONG KONG

 BUDAPEST

 LONDON

 TEL AVIV

 JAFFA

 TOKYO

 WELLINGTON

 SEOUL

 BANGKOK

 TARGET

 WARSAW

 MOSCOW

 RIYADH

 SINGAPORE

 ISTANBUL

 NEW YORK

 OSLO

 STOCKHOLM

 JOHNNESBURG

 KUALA LUMPAR

o Exotic Options and Swaps

 ABU DHABI

 SYDNEY

 TORONTO

 PRAGUE

 COPENHAGEN

 HONG KONG

 BUDAPEST

 LONDON

 TEL AVIV

 JAFFA

 TOKYO

 WELLINGTON

 SEOUL

 BANGKOK

 TARGET

 WARSAW

 MOSCOW

 RIYADH

 SINGAOPRE

 ISTANBUL

 NEW YORK

 OSLO

 STOCKHOLM

 JOHNNESBURG

 KUALA LUMPAR

o Inflation Swaps

 NEW YORK

 LONDON

 EUROPE

 Australia

o Inflation Rate Options

89
 NEW YORK

 LONDON

 EUROPE

Business Day Conventions

o Interest Rate Swaptions

 Modified

 Modified Following

o Interest Rate Options

 Modified

 Modified Following

o Exotic Options and Swaps

 Modified

 Modified Following

o Inflation Swaps

 Modified

 Modified Following

o Inflation Rate Options

 Modified

 Modified Following

Effective Date

o Interest Rate Swaptions – The effective date will be a valid business day

o Interest Rate Options – The effective date will be a valid business day

o Exotic Options and Swap – The effective date will be a valid business day

o Inflation Swaps – The effective date will be a valid business day

o Inflation Rate Options – The effective date will be a valid business day

Maturity Date

o Interest Rate Swaptions – The maturity date will be a valid calendar day

o Interest Rate Options – The maturity date will be a valid calendar day

o Exotic Options and Swaps – The maturity date will be a valid calendar day

o Inflation Swaps – effective date + tenor of swap

o Inflation Rate Options – Not applicable

Tenors

o Interest Rate Swaptions 0 – 100 years inclusive

o Interest Rate Options – 0 – 100 years inclusive

o Exotic options and swaps – 0 – 100 years inclusive

o Inflation Swap – 0 – 100 years inclusive

o Inflation Rate Options 0 – 100 years inclusive

Roll Dates

o Interest Rate Swaptions

 Calendar dates

 End of month

 IMM Dates

o Interest Rate Options

 Calendar dates

 End of month

 IMM Dates

o Exotic Options and Swaps

 Calendar dates

 End of month

 IMM Dates

 None

o Inflation Swaps – 0 – 50 years inclusive

o Inflation Rate Options – 0 – 50 years inclusive

90
Fixing Dates

o Interest Rate Swaptions – The fixing date will be a valid business day

o Interest Rate Options – The fixing date will be a valid business day

o Exotic Options and Swaps – The fixing date will be a valid business day

o Inflation Swaps – The fixing date(s) will be a valid calendar day

o Inflation Options – The fixing date(s) will be a valid calendar day

Settlement

o Interest Rate Swaptions

 Swaptions will be settled by either

• Cash

• Delivery of the swap

• Part Cash; Part Delivery

 The settlement date(s) will be valid business days

o Interest Rate Options

• All options contracts are cash settled

• The settlement date(s) will be valid business days

o Exotic Options and Swaps

 Contracts will be settled by either

• Cash

• Delivery of the swap

• Part Cash; Part Delivery

 The settlement date(s) will be valid business days

o Inflation Swaps – Are cash settled in line with the payment frequency

o Inflation Rate Options – Are cash settled in line with the payment frequency

Contract Size

o Minimum and Incremental Sizes

 Interest Rate Swaptions

• The minimum size for a Swaption is 1,000 of the agreed currency of the

trade

• There is no minimum incremental size for a Swaption

 Interest Rate Options

• The minimum size for an option is 1,000 of the currency of the underlying

index of the trade

• There is no minimum incremental size for an option

 Exotic Options and Swaps

• The minimum size for an instrument in this category is 1,000 units of the

currency of the underlying index of the trade

• There is no minimum incremental size for instruments in this category

 Inflation Swaps

• The minimum size for an instrument in this category is 1,000 units of the

currency of the underlying index of the trade

• There is no minimum incremental size for instruments in this category

 Inflation Rate Options

• The minimum size for an instrument in this category is 1,000 units of the

currency of the underlying index of the trade

• There is no minimum incremental size for instruments in this category

o Accreting Size – Any product can be traded on

 An accreting basis

 A non-accreting basis

Quoting Convention

o Interest Rate Swaptions are all quoted in basis points

o Interest Rate Options are all quoted in basis points

o Exotic Options and Swaps are all quoted in basis points

o Inflation Swaps are all quoted in basis points

91
o Inflation Options are all quoted in basis points

Benchmark Interest Rates

o Contracts will be limited to all or a subset of the following underlying benchmark indices:

 EBOR

 BBR

 CDOR

 LIBOR

 PRIBOR

 CIBOR

 CIBOR2

 HIBOR

 BUBOR

 TELBOR01

 WIBOR

 MOSPRIME

 SAIBOR

 TRILIBOR

 NIBOR

 STIBOR JIBAR

 EURIBOR

 ISDAFIX

 ICAP Listed Interest Rates Swaps

Minimum and Incremental Price

o Interest Rate Swaptions

 There is no minimum price

 There is no minimum incremental price

o Interest Rate Options

 There is no minimum price

 There is no minimum incremental price

o Exotic Options and Swaps

 There is no minimum price

 There is no minimum incremental price

o Inflation Swaps

 There is no minimum price

 There is no minimum incremental price

o Inflation Options

 There is no minimum price

 There is no minimum incremental price

Reporting

o All Interest Rate Options trades are reported in accordance with NFA and SDR

requirements

Clearing

o Interest Rate Options traded on ICAP SEF are not cleared.

92
93

The following information has been submitted to the Commission subject to a request for confidential

treatment in accordance with Commission Regulation 145.9 in order to prevent disclosure of IGDL’s

confidential commercial information upon a request under the Freedom of Information Act. IDGL

requests that the recipient limit distribution to those individuals with a need to know.

ACTIVE 211634036
Summary report:

Litéra® Change-Pro TDC 10.1.0.200 Document comparison done on

6/20/2017 2:27:04 PM

Style name: Sidley Default

Intelligent Table Comparison: Active

Original DMS: iw://SIDLEYDMS/ACTIVE/211634036/19

Description: IGDL Facility Rulebook v3.6 (Filed 12-13-16) (JSCC)

Modified DMS: iw://SIDLEYDMS/ACTIVE/211634036/20

Description: IGDL Facility Rulebook v3.7 (Filed 6-20-17) (NALs)

Changes:

Add 12

Delete 11

Move From 0

Move To 0

Table Insert 0

Table Delete 0

Table moves to 0

Table moves from 0

Embedded Graphics (Visio, ChemDraw, Images etc.) 0

Embedded Excel 0

Format changes 0

Total Changes: 23