the mau) exchange

The Exchange’s trading system is designed to be fully anonymous from order entry through execution.
The Exchange maintains a Central Limit Order Book (“CLOB”) of bids and asks for each contract that
trades on the Exchange. These CLOBs are used to transparently distribute incoming orders to all
Exchange Participants, to accept Participant orders and to match orders in a fair and transparent
manner by price-time priority. The Exchange’s system will employ a series of risk controls for Direct
Market Access Participants and futures commission merchants (“FCMs”). These risk controls include,
but are not limited to: authorized trading limits, quantity per order limits, cancel on disconnect, mass
cancel, kill switch, price banding and self-trade match prevention capabilities. All DMA market
Participants, the Exchange’s designated clearing organization (“DCO”) and National Futures Association
(“NFA”) will be provided a risk monitor to surveil the Exchange’s marketplace at all times. Further, the
Exchange’s fully automated electronic trading system will provide complete audit trail information to
the National Futures Association (NFA), with whom the Exchange contracts with for certain regulatory
services.

Compliance and Surveillance Programs - The Exchange has contracted with the NFA to provide certain
regulatory services according to an executed regulatory services agreement (“RSA”). The scope of the
RSA includes, but is not limited, to market surveillance, trade practice surveillance, audit trail review,
financial surveillance and the pursuit of investigations for disciplinary proceedings to ensure compliance
with Commission rules and regulations and Exchange rules, as well as the use of the NFA Arbitration
Forum for the resolution of appropriate disputes. Finally, the above-mentioned trade practice and
market surveillance activities are in addition to the real-time surveillance performed by the Exchange
through utilization of the market supervision tools, procedures and personnel provided by Exchange
proprietary systems and Regulatory Department employees.

Membership - The Exchange will offer three types of membership: Individual, Corporate and Clearing.

Product Terms of Futures Contracts - The Exchange intends to offer both futures and options on futures
contracts. The Exchange will provide its Participants a suite of proprietary cash-settled indices. The
Exchange intends to self-certify the contracts to be traded on the Exchange in accordance with
Commodity Exchange Act and all regulations promulgated by the Commission.

Clearance and Settlement - the Exchange is working with a registered Designated Clearing Organization
(“DCO”) to provide clearance and settlement of Exchange products. LOI is provided as Exhibit T.

Should you have any questions, please contact the undersigned at droberts@thesmallexchange.com.

Kindest Regards,

Donald E. Roberts
President and Chief Executive Officer
Small Exchange, Inc.


the ({/M exchange

Small Exchange, Inc.
19 North Sangamon St.
Chicago, IL 60607

December 4, 2018

VIA EMAIL Office of the Secretary
Commodity Futures Trading Commission
Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

Re: Small Exchange, Inc. Application for Designation as a Designated Contract Market

(“DCM”)

Dear Mr. Christopher J. Kirkpatrick,

Enclosed please find the application for Small Exchange Inc. (the “Exchange”) to be designated as a
contract market pursuant to Section 5(b) of the Commodity Exchange Act, as amended (the “Act”), and
Part 38 of the regulations promulgated by the Commodity Futures Trading Commission (the
“Commission”) thereunder. The Exchange has submitted its application pursuant to the instructions set
forth in Form DCM providing response to Exhibits A through V as attached

We are submitting simultaneously a petition for confidential treatment of the application materials
pursuant to Commission Regulations with this letter as Exhibit U.

On behalf of the Exchange, we respectfully request that the Exchange be provided with advance notice
by telephone and letter of any request to the Commission to disclose these documents so that the
Exchange and its counsel may be heard on the question of propriety of any proposed disclosure. Such
notice may be provided at the address and telephone number as provided with the application.

Overview

Governance - The Exchange seeks to become a registered Designated Contract Market (DCM) with the
Commodity Futures Trading Commission (the “Commission”). The Exchange is organized as a Delaware
corporation and operated in the United States. The Exchange will be managed by a Board of Directors in
accordance with the By-Laws of the Exchange with designated officers charged with the implementation
of short- and long-term strategy, as well as the conduct of the daily operations of the Exchange.

Technology/Trading System - The Exchange’s systems are built on proprietary technology that operates
the Exchange’s trading system, trade monitoring, risk control settings, participant administration and
membership functions.


OMB — 3038-0052

COMMODITY FUTURES TRADING COMMISSION
FORM DCM

CONTRACT MARKET
APPLICATION OR AMENDMENT TO APPLICATION FOR DESIGNATION

COVER SHEET

Small Exchange, Inc.

Exact name of Applicant as specified in charter

19 North Sangamon St.
Chicago, IL 60607
USA

Address of principal executive offices
Bi itthis is an APPLICATION for designation, complete in full and check here.

1 irtnis is an AMENDMENT to an application, or to an existing designation, list all items that are amended and check
here.

GENERAL INFORMATION

I Name under which the business of the designated contract market is or will be conducted, if different than
name specified above (include acronyms, if any):

Small Exchange SMFE
2, If name of designated contract market is being amended, state previous designated contract market name:
NIA
3. Contact information. including mailing address if differem than address specified above:

Same as above

Number and Street

City State Country Zip Code


oOoOoOs8

Office

312.858.7001

800.469.4452

OMB — 3038-0052

www.thesmallexchange.com

Main Phone number Fax

droberts@thesmallexchange.com

Website URL

E-mail Address

List of principal office(s) and address(es) where designated contract market activities are/will be conducted:

Address

Same as above

5. If Applicant is a successor to a previously designated contract market, please complete the following:
a. Date of succession
NIA
b. Full name and address of predecessor designee
Name
Number and Street
City State Country Zip Code
Main Phone Number Website URL
BUSINESS ORGANIZATION
6. Applicant is a:
Corporation
Partnership

Limited Liability Company

Other form of organization (spe
7.

8.

Date of incorporation or formation: October 13", 2017

State of incorporation or jurisdiction of organization:

Delaware


OMB -— 3038-0052

9. Applicant agrees and consents that the notice of any proceeding before the Commission in connection with
this application may be given by sending such notice by certified mail to the person named below at the
address given.

Donald Eugene Roberts President and CEO

Print Name and Tite

Small Exchange, Inc.

‘Name of Applicant

19 North Sangamon St.

Number and Street

Chicago tL 60607
City State Zip Code
SIGNATURES

10. ‘The Applicant has duly caused this application or amendment to be signed on its behalf by the undersigned,
hereunto duly authorized, this 4th day of December , 2018. The Applicant and the undersigned
represent hereby that all information contained herein is true, current, and complete. It is understood that all
required items and Exhibits are considered integral parts of this Form DCM and that the submission of any
amendment represents that all un-amended items and Exhibits remain true, current, and complete as
previously filed.

Small Exchange, Inc.

Name of Applicant

Doretet £ hobecty

Signature of Duly Authorized Person

Donald Eugene Roberts President and CEO

Print Name and Title of Signatory