IMX HEALTH, LLC

EXHIBIT L

Attach as Exhibit L, a narrative and any other form of documentation that may be provided under other Exhibits herein, that 

describes the manner in which the Applicant is able to comply with each core principle. Such documentation must include a 

regulatory compliance chart setting forth each core principle and providing citations to the Applicant’s relevant Rules, 

policies, and procedures that address each core principle. To the extent that the application raises issues that are novel or 

for which compliance with a core principle is not self-evident, include an explanation of how that item and the application 

satisfy the core principles.

All capitalized terms used in this Exhibit L and not defined have the meanings ascribed in the Rulebook, which is included as Exhibit 

M to this Application. All references to “Rules” contained in this Exhibit are references to the Rules of the Exchange’s Rulebook.

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

Core Principle 1 – Designation as a Contract Market

(a) In general. To be designated, and 

maintain a designation, as a contract 

market, a board of trade shall comply 

with:

(1) Any core principle described in 

section 5(d) of the Act, and

(2) Any requirement that the 

Commission may impose by 

Rule or regulation pursuant to 

section 8a(5) of the Act.

(b) Reasonable discretion of the 

contract market. Unless otherwise 

determined by the Commission by 

Rule or regulation, a board of trade 

described in paragraph (a) of this 

IMX Health, LLC (“IMX” or the “Exchange”) is applying for registration 

as a designated contract market (“DCM”) by submitting Form DCM 

(the “IMX Application”). Once registered, IMX will comply with the DCM 

Core Principles. As demonstrated in this Application, IMX has drafted 

its Rulebook and Compliance Manual and has designed IMX’s 

operations to be compliant with the DCM Core Principles and the 

Commodity Exchange Act, as amended (“CEA”) and other applicable 

Commodity Futures Trading Commission (“CFTC”) Regulations 

promulgated thereunder.

IMX 

Application, 

including all 

attachments 

and Exhibits.
2

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

section shall have reasonable 

discretion in establishing the manner 

in which the board of trade complies 

with the core principles described in 

this subsection.

Core Principle 2 – Compliance with Rules

(a) In general. The board of trade shall 

establish, monitor, and enforce 

compliance with the Rules of the 

contract market, including:

(1) Access requirements;

(2) The terms and conditions of 

any contracts to be traded on 

the contract market; and

(3) Rules prohibiting abusive 

trade practices on the contract 

market.

(b) Capacity of contract market. The 

board of trade shall have the capacity 

to detect, investigate, and apply 

appropriate sanctions to any person 

that violates any Rule of the contract 

market.

(c) Requirement of Rules. The Rules of 

the contract market shall provide the 

board of trade with the ability and 

All Participants accessing the Exchange’s secure website and 

Exchange Trading Platform will do so through a unique User ID and 

password. Each Participant and/or Authorized User will have their own 

user ID and password. Pursuant to the Participant Agreement and Rule

301 and Rule 304, Participants and Authorized Users must consent to 

the jurisdiction of the Exchange before being granted access to the 

Exchange Trading Platform. Rule 303 clearly defines criteria for 

becoming a Participant of the Exchange. Chapter 4 of the Rulebook 

provides the obligations of the Participants, including Rule 403, which

requires a Participant to make its books and records available to the 

Exchange.

The Exchange’s Fee Schedule along with contract specifications will be 

made publicly available on the Exchange Website, when self-certified 

with the CFTC prior to launch. The fees are discussed in greater detail 

in Exhibit K.

The Regulatory Department will perform market surveillance using 

software licensed from Eventus, known as Validus. It will investigate 

any alleged Rule violations or misconduct, and recommend disciplinary 

action, if deemed necessary. The surveillance software used by IMX 

will generate alerts based on the Rules in Chapter 5 of the Rulebook 

and the Regulatory Department will review, investigate and address 

these alerts no later than T+1. The Regulatory Department shall also 

perform audit trail reviews and will conduct financial surveillance of 

Participants and Clearing Members that are registered as FCMs or 

Exhibit E -

Personnel

Qualifications

Exhibit FStaffing

Exhibit K -

Fees

Exhibit M -

Rulebook

Exhibit N -

Contracts

Exhibit O -

Compliance 

Manual
3

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

authority to obtain any necessary 

information to perform any function 

described in this section, including the 

capacity to carry out such 

international information-sharing 

agreements, as the Commission may 

require.

introducing brokers (“IBs”). The Exchange Trading Platform contains 

screens and functionality that will enable the Regulatory Department to 

view the market in real-time and respond to immediate concerns 

regarding users, firms or the market as a whole. Validus provides the 

tools to allow the Regulatory Department to monitor Exchange Activity 

no later than T+1. Validus is a searchable database that allows the user 

to review Exchange Activity over a selected time period to look for 

patterns of abuse. See also Exhibit O. IMX’s Regulatory Oversight 

Committee (“ROC”) oversees all facets of the Exchange’s regulatory 

program, as addressed in Rule 208. The ROC will prepare an annual 

report for the Board and the CFTC assessing the Exchange’s regulatory 

program. The report shall set forth the program’s expenses, describe 

its staffing and structure, and catalogue investigations and disciplinary 

proceedings taken during the year. 

Rules 507-515 of the Rulebook impose trading Rules designed to 

encourage ethical trading conduct and protect Participants from 

fraudulent acts (Rule 507), fictitious, wash or non-competitive 

transactions (Rule 508), market disruption (Rule 509), market 

manipulation (Rule 510), disruptive trading practices (Rule 511), 

prohibited misstatements (Rule 512), acts detrimental to welfare (Rule 

513), violations of Applicable Law (Rule 514), and unreasonable 

supervision (Rule 515). See also narrative response to Core Principle

4 and Exhibit R. As mentioned above, Valildus provides configurable 

alerts for these types of violations, which will assist the Regulatory 

Department in investigating potential Rule violations. 

Disciplinary and enforcement Rules set forth in Chapter 6 of the 

Rulebook provide theExchange with the authority to detect, investigate,

and apply appropriate sanctions to any person that violates any Rule of 

the Exchange. The Regulatory Department and Disciplinary Panel will 

enforce compliance with the Rules. Under Rule 603, the Regulatory 

Department may resolve an investigation through an informal 

disposition, including the issuance of a Warning Letter. No more than 

Exhibit P -

Disciplinary

Rules

Exhibit R -

Trade 

Practice 

Violation of 

Rules
4

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

one Warning Letter for the same potential violation may be issued to 

the same Participant during a rolling 12-month period. Under Rule 604, 

the Chief Regulatory Officer (“CRO”) will review Investigative Reports 

submitted to determine whether a reasonable basis exists to believe a 

violation within the Exchange’s jurisdiction has occurred or is about to 

occur. Under Rule 610, the Disciplinary Panel shall conduct hearings 

in connection with any disciplinary proceedings and render a decision 

pursuant to the procedures detailed in Chapter 6 of the Rulebook. 

Under Rule 616, the decisions of the Disciplinary Panel may be 

appealed before an Appeal Panel.

The Exchange has Rules in place to discipline Participants. See

Chapter 6 of the Rulebook and Exhibit P. The Exchange also has the 

authority to examine books and records (Rule 403).

Pursuant to Rule 212, the Exchange may enter into information-sharing 

agreements, as the Commission may require, as the Exchange 

determines necessary or advisable, or where the Exchange determines 

such arrangements exercise a legal or regulatory function under any

Applicable Law or considers such arrangement to be in furtherance of 

the operation or duties of the Exchange under Applicable Law. IMX

intends to join the Joint Audit Committee (“JAC”) upon designation. The 

JAC is a voluntary committee of Self-Regulatory Organizations whose 

members include DCMs, swap execution facilities, and NFA. The JAC

operates through its members to protect market integrity within and 

across the members’ markets. It provides a forum to share information 

and ideas on regulatory topics of interest, as well as identify issues 

within the industry or elsewhere that may impact their markets, 

members or self-regulatory responsibilities.
5

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

Core Principle 3 – Contracts Not Readily Susceptible to Manipulation

The board of trade shall list on the 

contract market only contracts that are 

not readily susceptible to manipulation.

The Exchange will offer trading in Contracts that are cash settled.

Pursuant to CFTC Regulation 40.2, prior to the self-certification of any 

Contract for listing on the Exchange the Exchange will perform a review 

and analysis of the factors enumerated in Appendix C to Part 38 

(Demonstration that a Contract is Not Readily Susceptible to 

Manipulation) when designing cash settled contracts. 

Contract Specifications will be made publicly available on the Exchange 

Website. Further, the Exchange will monitor and enforce position limits, 

if any, pursuant to Rule 535.

All activity in the Contracts that will be listed for trading on the Exchange 

will be subject to monitoring and surveillance by the Regulatory 

Department using Validus software licensed from Eventus. Specifically, 

the Regulatory Department will monitor for market manipulation and 

various disruptive trading practices as indicated in Chapter 5 of the 

Rulebook and Exhibit O.

Finally, the Rulebook restricts trading on the basis of non-public 

information. In particular, Rule 903 prohibits employees from trading in 

Contracts or related contracts absent prior written consent from the 

Exchange.

Exhibit M –

Rulebook

Exhibit O -

Compliance 

Manual

Core Principle 4 – Prevention of Market Disruption

The board of trade shall have the 

capacity and responsibility to prevent 

manipulation, price distortion, and 

disruptions of the delivery or cashsettlement process through market 

surveillance, compliance, and 

Pursuant to Rule 208, the ROC shall oversee the regulatory program of 

the Exchange on behalf of the Board. The Board shall delegate 

sufficient authority, dedicate sufficient resources, and allow sufficient 

time for the ROC to fulfil its mandate. The ROC shall oversee all facets 

of the Exchange’s regulatory program, including trade practice and 

market surveillance, regulatory audits, examinations, and other 

Exhibit M –

Rulebook
6

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

enforcement practices and procedures, 

including:

(a) Methods for conducting real-time 

monitoring of trading; and

(b) Comprehensive and accurate trade 

reconstructions.

regulatory responsibilities with respect to Participants (including 

ensuring compliance with, if applicable, financial integrity, financial 

reporting, sales practice, recordkeeping and other requirements) and 

the conduct of investigations.

Chapter 5 of the Rulebook contains trading Rules designed to 

encourage ethical trading conduct and protect Participants from 

fraudulent acts (Rule 507), non-competitive transactions (Rule 508), 

market manipulation (Rule 510), disruptive trading practices (Rule 511) 

and any other acts that are detrimental to the welfare of the Exchange 

(Rule 513). The Regulatory Department will be conducting market 

surveillance using the Validus software licensed from Eventus. Validus 

provides an automated market surveillance system that is programmed 

to generate alerts that detect potential market anomalies and trade 

practice violations. These alerts will be generated and reviewed no later 

than T+1. The Regulatory Department will review and address the 

alerts on a daily basis to determine if a formal investigation may be

opened. Exhibit P describes the Exchange’s disciplinary and 

enforcement protocols, tools, procedures and the arrangement for 

dispute resolution. 

IMX shall be responsible for monitoring overall activity on its market on 

a real-time basis using market monitoring functionality, risk controls,

and other tools that are part of the Exchange Trading Platform. See

Exhibits O and Q for further information regarding available Exchange 

Trading Platform risk controls. Exhibit O provides greater detail on the 

Exchange’s overall surveillance program, including information on the 

risk controls, and real-time and T+1 functionalities that will enable the 

Exchange to comply with this core principle. 

All Contracts that trade on the Exchange will be cash settled. Rule 401 

and Rule 403 require all Persons subject to the jurisdiction of the 

Exchange to maintain records pertaining to their activity on the 

Exchange, including records required by CFTC Regulation 38.254(e.g.,

Exhibit N -

Contracts

Exhibit O –

Compliance 

Manual

Exhibit P -

Disciplinary 

Rules

Exhibit Q -

Exchange 

System 

Functionality 

Overview
7

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

records of their activity in the underlying commodity and related 

derivatives markets upon request to the Exchange). 

Pursuant to Rule 212, the Exchange may enter into information-sharing 

arrangements, as the Commission may require or as it determines 

necessary or advisable, to coordinate surveillance with other markets 

where financial products, potentially relating to Exchange products, 

trade. As part of any information-sharing agreement, the Exchange 

may: (i) share trade and market surveillance reports with other markets; 

(ii) share completed and on-going investigations with other markets; (iii) 

share information concerning current and former Participants with other 

markets; and (iv) require current and former Participants to provide the 

Exchange information requested by other markets that are part of an 

information-sharing agreement with the Exchange.

IMX will also request membership in the JAC upon designation. 

Rule 211 addresses the Exchange’s record retention policy. The 

Exchange shall retain all such books and records for at least a period 

of five years, from the date thereof. Electronic records shall be readily 

accessible for the duration of the five-year period. Paper records must 

be readily accessible during the first two years of the five-year period.

Core Principle 5 – Position Limits or Accountability

To reduce the potential threat of market 

manipulation or congestion (especially 

during trading in the delivery month), the 

board of trade shall adopt for each 

contract of the board of trade, as is 

necessary and appropriate, position 

limitations or position accountability for 

speculators. For any contract that is 

subject to a position limitation established 

by the Commission, pursuant to section 

Pursuant to Rule 535, the Exchange will designate position limitations 

for each Contract, if applicable, which may be specific to a particular 

Contract or Contract expiration. Position limitations and position 

accountability levels will be published on the Exchange’sWebsite when 

a new Contract is self-certified. For any Contract that is subject to a 

position limitation established by the CFTC, the Exchange shall set the 

position limitation of the Exchange at a level not less than the position 

limitation established by the CFTC.

Exhibit M –

Rulebook 

Exhibit O –

Compliance 

Manual
8

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

4a(a), the board of trade shall set the 

position limitation of the board of trade at 

a level not higher than the position 

limitation established by the Commission.

The Regulatory Department will track Participant’s positions by large 

trader reports received from Clearing Members in order to determine 

when positions exceed the limits established for each Contract. 

The Exchange may impose or modify position accountability limits and

order reduction of positions in the event of an Emergency, as addressed 

in Rule 504. See also narrative response to Core Principle 6.

Core Principle 6 – Emergency Authority

The board of trade, in consultation or 

cooperation with the Commission, shall 

adopt Rules to provide for the exercise of 

emergency authority, as is necessary and 

appropriate, including the authority:

(a) To liquidate or transfer open positions 

in any contract;

(b) To suspend or curtail trading in any 

contract; and

(c) To require market participants in any 

contract to meet special margin 

requirements.

The Exchange’s definition of Emergency is consistent with the definition 

provided in CFTC Regulation 40.1(h).

Under Rule 504, the Board may implement Emergency Actions, subject 

to applicable provisions of the CEA and CFTC Regulations. Emergency 

Actions include, but are not limited to: (i) imposing or modifying position 

limits; (ii) imposing or modifying price limits; (iii) imposing or modifying 

intraday market restrictions; (iv) imposing special margin requirements; 

(v) ordering the liquidation or transfer of open positions in any Contract; 

(vi) ordering the fixing of a settlement price; (vii) extending or shortening 

the expiration date or Trading Hours; (viii) suspending or curtailing 

trading in any Contract; (ix) transferring Contracts and the margin 

associated therewith as permitted by Applicable Law; (x) altering any 

Contract’s settlement terms or conditions; (xi) limiting access to the 

Exchange Trading Platform by any Clearing Member, Participant or 

ISV; or (xii) taking such other actions as may be directed by the CFTC 

or other regulatory authority.

Exhibit M –

Rulebook

Core Principle 7 – Availability of General Information

The board of trade shall make available 

to market authorities, market participants, 

and the public accurate information 

concerning:

The Exchange will post general information, including but not limited to 

Contract Specifications, a copy of the Rulebook, Exchange trading 

hours, settlement procedures, requirements for membership and 

access, on-boarding procedure and general Exchange Trading 

Platform descriptions on its Website with the goal of open and fair 

Exhibit M –

Rulebook
9

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

(a) The terms and conditions of the 

contracts of the contract market; and

(b)

(1) The Rules, regulations and 

mechanisms for executing 

transactions on or through the 

facilities of the contract 

market, and

(2) The Rules and specifications 

describing the operation of the 

contract market’s:

(i) Electronic matching 

platform, or

(ii) Trade execution 

facility.

access for allParticipants. Any Rule amendments and product changes 

(including terms and conditions of the Contracts) will also be made 

available through the Exchange Website. Notice of new product 

listings, new Rules, and Rule amendments will be placed on the 

Exchange Website concurrent with the filing or submission of such 

information with the Secretary of the Commission as required by Part 

40 of the CFTC Regulations.

Rule 518 includes a description of Orders types that may be submitted 

to the Exchange Trading Platform. The Exchange matching algorithm 

is described in Rule 539. Additional details on the Exchange Trading 

Platform can be found in Chapter 5 of the Rulebook and in Exhibit Q.

Rule 308 outlines the process of providing general notices to 

Participants of the Exchange.

IMX will post to its Website any non-confidential material associated 

with regulatory filings relating to Rules and new products at the time 

IMX submits the filings to the CFTC.

Exhibit Q -

Exchange 

System 

Functionality 

Overview

Core Principle 8 – Daily Publication of Trading Information

The board of trade shall make public daily 

information on settlement prices, volume, 

open interest, and opening and closing 

ranges for actively traded contracts on 

the contract market.

As indicated in Rule 805, the Exchange will publish daily information on 

settlement prices and other pricing information (open, close, high, low), 

and well as volume and open interest for actively traded Contracts on 

its Website as required by CFTC Regulation 16.01. Settlement price 

methodology is described in further detail in Exhibit Q.

The Exchange will also transmit the information required by CFTC 

Regulation 16.01 and 16.02 to the CFTC within the times prescribed in 

these Regulations. Such daily reports to the Commission shall include 

the information described in the paragraph above, as well as 

transaction-level data and related Order information for each Contract. 

Exhibit M –

Rulebook

Exhibit Q -

Exchange 

System 

Functionality 

Overview
10

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

Reports shall include time and sales data, and reference files and any 

other information the Commission may require.

Core Principle 9 – Execution of Transactions

The board of trade shall provide a 

competitive, open, and efficient market 

and mechanism for executing 

transactions that protects the price 

discovery process of trading in the 

centralized market of the board of trade. 

The Rules of the board of trade may 

authorize, for bona fide business 

purposes:

(a) Transfer trades or office trades;

(b) An exchange of:

(1) Futures in connection with a 

cash commodity transaction:

(2) Futures for cash commodities; 

or

(3) Futures for swaps; or

(c) A futures commission merchant, 

acting as principal or agent, to enter 

into or confirm the execution of a 

contract for the purchase or sale of a 

commodity for future delivery if the 

contract is reported, recorded, or 

cleared in accordance with the Rules 

The Exchange Trading Platform provides Participants with the ability to 

execute transactions from the interaction of multiple bids and multiple 

offers within a predetermined, nondiscretionary automated trade 

matching and execution algorithm. Additional detail on the Exchange 

Trading Platform and matching algorithmcan be found in Exhibit Q. The 

Exchange will conduct periodic objective testing of the Exchange 

Trading Platform and the trade environment generally, pursuant to the 

provisions contemplated in Exhibit V – the CFTC Technology 

Questionnaire. Contracts trade under the terms publicly provided for in 

the Contract Specifications, and as certified pursuant to CFTC

Regulation 40.2. 

Rule 807 allows the transfer of trades from one Clearing Member to 

another upon notice to the Exchange and in accordance with the Rules 

of the DCO. An FCM can act as principal or agent on such trades, 

subject to the Rules of the Exchange and DCO.

IMX does not intend to support block trades or other type of off-platform 

Transactions at inception. 

Exhibit M –

Rulebook

Exhibit Q -

Exchange 

System 

Functionality 

Overview

Exhibit V –

Technology 

Questionnaire
11

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

of the contract market or a derivatives 

clearing organization.

Core Principle 10 – Trade Information

The board of trade shall maintain Rules 

and procedures to provide for the 

recording and safe storage of all 

identifying trade information in a manner 

that enables the contract market to use 

the information:

(a) To assist in the prevention of 

customer and market abuses; and

(b) To provide evidence of any violations 

of the Rules of the contract market.

The Exchange Trading Platform will maintain all information with 

respect to each Order (whether or not such Order results in a 

Transaction) and each Transaction, as well as all other information 

relating to the trade environment that determines the matching and 

clearing of trades. All information relating to Orders submitted to the 

Exchange Trading Platform and any relevant environmental parameters 

will be retained. Thus, any Order could be tracked from the time it is 

entered into the Exchange Trading Platform to the time it is matched, 

expires, or is otherwise disposed of. The Exchange may adopt further 

procedures to record and account for Contracts and Exchange activity 

pursuant to Rule 502.

Rule 529 requires users of the Platform to enter all information 

necessary to process an Order pursuant to the Rules when placing an 

Order on the Exchange Trading Platform and provides that the 

Exchange shall maintain such information. 

Audit trail data will be stored in a manner that protects it from 

unauthorized alteration as well as from accidental erasure or other loss. 

Audit trail data will be maintained pursuant to the procedures described 

in Rule 211, Exhibit V – the CFTC Technology Questionnaire, and

Exhibit S. 

Pursuant to Rule 529, each Participant is required to maintain a frontend audit trail, which stores data related to Orders placed by such 

Participant. Using sampling techniques, the Regulatory Department will 

review the front-end audit trail data retained by Participants at least 

annually to the extent required under Rule 529. Such review will include 

an examination of:

Exhibit M –

Rulebook

Exhibit O –

Compliance 

Manual

Exhibit S –

Record 

Retention 

Policy

Exhibit V –

Technology 

Questionnaire
12

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

(i) the process by which User IDs are assigned and User ID 

records are maintained;

(ii) usage patterns associated with User IDs to monitor for 

violations of User ID Rules; and

(iii) account numbers and CTI codes in trade records to ensure that 

they are accurate and being properly used. 

Furthermore, the Exchange will review compliance with recordkeeping 

obligations at least annually. In addition to retaining front-end audit trail 

data, the Exchange and Participants will retain required books and 

records for at least five years pursuant to Rules 211 and 401, 

respectively. 

Core Principle 11 – Financial Integrity of Transactions

The board of trade shall establish and 

enforce:

(a) Rules and procedures for ensuring 

the financial integrity of transactions 

entered into on or through the 

facilities of the contract market 

(including the clearance and 

settlement of the transactions with a 

derivatives clearing organization); and

(b) Rules to ensure:

(1) The financial integrity of any:

(i) Futures commission 

merchant, and

(ii) Introducing broker; and

IMX has selected The Minneapolis Grain Exchange, LLC (“MGEX”) as 

its DCO. The Agreement with MGEX is included in Exhibit N.

Pursuant to Rule 801, all Contracts traded on the Exchange must be 

cleared through a Clearing House by a Clearing Member. Chapter 8 of 

the Rulebook governs the clearing of Contracts. 

Only Participants will be permitted to submit Orders to the Exchange. 

Each Participant must be a Clearing Member or establish a clearing 

relationship with a Clearing Member under Rule 803(a). Eligibility 

requirements for Participants are provided in Chapter 3 of the Rulebook 

and for Clearing Members in Chapter 8 of the Rulebook, which tie to 

Core Principle 15. Under Rule 304, each Participant is responsible for 

the actions of its Authorized Users. Similarly, under Rules 305, 401, 

and 538, Participants, Account Administrators and Authorized Users 

are responsible for actions taken using their User IDs.

Clearing Members are responsible under CFTC Regulation 1.73 for 

establishing risk limits and screening orders for compliance with those 

risk-based limits. An Order will not be allowed on the Exchange Trading 

Exhibit M –

Rulebook

Exhibit N -

Contracts

Exhibit O –

Compliance 

Manual
13

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

(2) The protection of customer 

funds.

Platform if it has not been screened. The Exchange Trading Platform 

will have other risk controls (e.g., fat finger) that will be applied once an 

Order is transmitted to the Exchange Trading Platform as described in 

Core Principle 4. If a risk limit is nevertheless exceeded, responsibility 

for the resulting Transaction will lie with the relevant Clearing Member

and Participant in accordance with the terms of the agreements 

between them. If the Persons involved in the Transaction are amenable 

to it, the Exchange may consider reviewing the trade pursuant to Rule

540 (Trade Cancellation and Price Adjustments) provided that the 

provisions of this Rule are met. 

The Board will be responsible for reviewing the Rules governing the 

eligibility of Participants and ensuring that such Rules do not restrict 

access or impose burdens on access in a discriminatory manner. 

To become a Participant that will transact on behalf of Customers, Rule

303 lays out criteria for becoming a Participant, including that the 

Participant holds all registrations required under Applicable Law.

Similarly, Rule 405 includes a requirement that each Clearing Member

and Participant that is an FCM or IB comply with its obligations as a 

registered entity with any Government Agency or Self-Regulatory 

Organization (including obligations applicable to FCMs and IBs). Rule 

405 also provides for the submission of reports required to be filed with 

the CFTC under CFTC Regulations 1.10 and 1.12 to the Exchange. 

This allows the Exchange to assess its Participants’ and Clearing 

Members’ compliance with minimum financial requirements applicable 

to FCMs and IBs, as well as obligations with respect to protection of

customer funds. 

Rule 406 grants the Exchange authority to impose restrictions on the 

business or operations of a Participant that becomes subject to the early 

notice requirements of CFTC Regulation 1.12. As described in Exhibit 

O, the Regulatory Department will review the financial statements of 
14

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

any Participants and Clearing Members that are FCMs or IBs to ensure 

they comply with applicable regulations. 

The Exchange will rely on the DCO to conduct intraday monitoring of 

the obligations of Clearing Members created by the positions of its 

Customers as required by CFTC Regulation 38.604. This is addressed 

in the Agreement with MGEX.

Core Principle 12 – Protection of Markets and Market Participants

The board of trade shall establish and 

enforce Rules:

(a) To protect markets and market 

participants from abusive practices 

committed by any party, including 

abusive practices committed by a 

party acting as an agent for a 

participant; and

(b) To promote fair and equitable trading 

on the contract market.

Pursuant to Chapters 4 and 5 of the Rulebook and Exhibits Q and R, 

the Exchange has established various Rules designed to protect the 

markets and market participants from abusive, disruptive, fraudulent, 

non-competitive, and unfair conduct and trade practices. IMX has 

licensedValidus software from Eventus for market surveillance to assist 

the Regulatory Department to monitor the market on a T+1 basis, 

coupled with real-time tools on the Exchange Trading Platform provided 

by Connamara to assist the Exchange in identifying and prosecuting 

any abusive trading practices. Improper conduct and trade practice

violations will be investigated and adjudicated as described in Chapter 

6 of the Rulebook and Exhibit P. Further detail regarding how the 

Regulatory Department conducts these surveillance activities can be 

found in Exhibit O. 

Exhibit M –

Rulebook

Exhibit N –

Contracts 

Exhibit O –

Compliance 

Manual

Exhibit P –

Disciplinary 

Rules

Exhibit Q –

Trading 

System
15

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

Exhibit R –

Trade 

Practice 

Violations

Core Principle 13 – Disciplinary Procedures

The board of trade shall establish and 

enforce disciplinary procedures that 

authorize the board of trade to discipline, 

suspend, or expel members or market 

participants that violate the Rules of the 

board of trade, or similar methods for 

performing the same functions, including 

delegation of the functions to third parties.

Chapter 6 of the Rulebook sets forth the Rules for disciplinary 

procedures that allow IMX to discipline, suspend, expel or otherwise 

sanction Participants that violate the Rules. The Regulatory 

Department will monitor the market for any of the trade practice 

violations enumerated in Chapter 5 of the Rulebook. The Regulatory 

Department will investigate all such potential Rule violations and 

determine if the facts of the investigation warrant formal Disciplinary 

Action pursuant to Chapter 6 of the Rulebook. 

The Exchange’s CRO will oversee the Regulatory Department. The

Regulatory Department, pursuant to Rule 602, can initiate and conduct 

investigations when the information obtained indicates a possible Rule 

violation. The Regulatory Department will determine the nature and 

scope of its inquiries and investigations and will function independently 

of any commercial interests of the Exchange. The Regulatory 

Department has the authority to (i) inspect the books and records of all 

Participants; (ii) require Persons to appear before it and answer 

questions regarding possible Rule violations; (iii) prepare Investigative

Reports; (iv) make recommendations to the CRO concerning initiating 

disciplinary proceedings; (v) authorize issuance of Notices of Charges 

against Respondents alleged to have violated the Rules (if the CRO 

believes the matter should be adjudicated; and (vi) prosecute alleged 

Rule violations within the Exchange’s disciplinary jurisdiction. 

Rule 610 sets forth the functions and make-up of the Disciplinary Panel. 

If the CRO determines that a matter should be adjudicated in a formal 

Exhibit M –

Rulebook

Exhibit O –

Compliance 

Manual
16

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

hearing before the Disciplinary Panel, the Regulatory Department will 

be instructed to serve a Notice of Charges.

The Notice of Charges delivered to the Respondent will provide a 

timeline for response to the allegations. In accordance with Rule 613, 

the hearing will be fair and conducted before the members of the 

Hearing Panel. As stated in Rule 614, as promptly as is reasonable 

following a hearing, the Hearing Panel will issue a written order 

rendering its decision based on the weight of the evidence contained in 

the record of the disciplinary proceedings. A decision by a majority of 

the Hearing Panel will constitute the Decision of the Hearing Panel.

Pursuant to Rule 310, when the Exchange accepts the withdrawal of a 

Participant, all rights and privileges of such Participant terminate 

(including, without limitation, the Trading Privileges and ability to access 

the Exchange Trading Platform). The accepted withdrawal of a 

Participant shall not affect the rights of the Exchange under the Rules 

or relieve the former Participant of its obligations under the Rules, to 

perform all obligations involving any Contracts entered into by such, or 

to pay any Exchange fees, costs, or charges incurred, before the 

withdrawal, including any obligations by the Participant for activity by its 

Authorized Users. Notwithstanding the accepted withdrawal of a 

Participant, the withdrawn Participant remains subject to the Rules, the 

obligations, and the jurisdiction of the Exchange for acts done and 

omissions made while a Participant and must cooperate in any 

Exchange Proceeding as if the withdrawn Participant were still a 

Participant.

Rule 620 states that when the Trading Privileges of a Participant are 

terminated, all of a Participant’s rights and Trading Privileges will 

terminate (including those of any Authorized User), except for the right 

of the Participant in question to assert claims against others, as 

provided in the Rules. Any such termination will not affect the rights of 

creditors under the Rules. A suspended or terminated Participant 

remains subject to the Rules and the jurisdiction of the Exchange for 
17

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

acts and omissions prior to the suspension or termination, and must 

cooperate in any inquiry, investigation, or disciplinary proceeding, 

summary suspension or other summary action as if the suspended or 

terminated Participant still had Trading Privileges. The Exchange may 

discipline a suspended Participant under the Rules for any violation of 

a Rule or provision of Applicable Law committed by the Participant 

before, during, or after the suspension.

Core Principle 14 – Dispute Resolution

The board of trade shall establish and 

enforce Rules regarding and provide 

facilities for alternative dispute resolution 

as appropriate for, market participants 

and any market intermediaries.

Chapter 7 of the Rulebook sets forth the Rules concerning alternative 

dispute resolution, which provide for the resolution of disputes between 

or among Participants through the American Arbitration Association. 

Pursuant to Chapter 7, arbitration is available for all disputes, 

controversies, or claims among all market participants that relate to 

activities on or subject to the Rules.

Exhibit M – 

Rulebook

Core Principle 15 – Governance Fitness Standards

The board of trade shall establish and 

enforce appropriate fitness standards for 

directors, members of any disciplinary 

committee, members of the contract 

market, and any other person with direct 

access to the facility (including any party 

affiliated with any person described in this 

paragraph).

Persons involved in the governance of, and Persons trading on the 

Exchange will be subject to fitness and eligibility criteria under the 

Rules. More specifically, Board members, individuals serving on a 

committee established by the Board, and any disciplinary committee or 

appeals committee will be subject to the fitness standards under Rule

204, while Participants will be subject to the eligibility standards under 

Rule 303, and Authorized Users will be subject to the eligibility 

standards under Rule 304. 

Exhibit C provides a narrative of the fitness standards applicable to 

Directors. Each non-executive Director will be required to complete a 

Director Questionnaire (Exhibit C-1), which will be used in evaluating 

whether such prospective Director would meet the applicable fitness 

standards. It is expected that executive directors will be vetted through 

the employment process.

Exhibit M –

Rulebook

Exhibit C - 

Directors 

Fitness 

Standards 
18

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

Furthermore, in addition to required self-disclosure, the Regulatory 

Department will review the standing of Participants and Clearing 

Members by conducting a search of NFA’s BASIC system, as well as 

other relevant searches, as part of the onboarding process. 

Core Principle 16 – Conflicts of Interest

The board of trade shall establish and 

enforce Rules:

(a) To minimize conflicts of interest in the 

decision-making process of the 

contract market; and

(b) To establish a process for resolving 

conflicts of interest described in 

paragraph (a) of this section.

Chapter 2 of the Rulebook outlines the qualifications that a Director 

must satisfy in order to serve on the Board or one of the committees of 

IMX. The Exchange has instituted a Board consisting of at least 35% 

Public Directors as outlined in Rule 202. The ROC, as detailed in Rule

208, is composed entirely of Public Directors. The ROC oversees the 

Exchange’s regulatory program on behalf of the Board. The ROC 

makes recommendations to the Board that will, in its judgment, be best 

to promote the interests of IMX. The ROC also assists the Exchange in 

minimizing actual and potential conflicts of interest. Exhibit C-2 

contains the ROC’s charter and provides further details regarding its 

role and responsibilities.

Rule 903 contains limitations on the use or disclosure of material nonpublic information gained through the performance of official duties by 

Exchange /officials and consultants. As set forth in Rule 610, IMX also 

maintains a Disciplinary Panel that is subject to certain Rules regarding 

composition so as to preclude any group or class of industry participants 

from dominating or exercising a disproportionate influence on the 

Disciplinary Panel. The Disciplinary Panel includes at least one 

member who qualifies as a Public Director. Chapter 6 of the Rulebook 

also provides for Appeal to the Appeal Panel, which must also include 

at least one person who would qualify as a Public Director. 

As set forth in Rule 210, no member of the Board, any committee which 

has authority to take action for and in the name of the Exchange (not 

including any committee which is only authorized to make 

recommendations for action by the Board or some other committee), or 

Exhibit M –

Rulebook
19

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

any Disciplinary Panel, Hearing Panel, Review Panel, Appeals Panel or 

arbitration panel shall knowingly participate in such body's deliberations 

or voting in any matter involving a Named Party or has a material 

interest where such member: (i) is a Named Party or has material 

relationship to the Exchange; (ii) is an employer, employee or fellow 

employee of a Named Party; (iii) is associated with a Named Party

through a broker association; (iv) has a Family Relationship with a 

Named Party; or (v) has any other significant, ongoing business 

relationship with a Named Party, excluding relationships limited to 

executing Transactions opposite each other.

Core Principle 17 – Composition of Governing Boards of Contract Markets

The governance arrangements of the 

board of trade shall be designed to permit 

consideration of the views of market 

participants.

Exhibit C includes the fitness standards of the Board and Rule 202 

states that the Board shall consist of at least 35% Public Directors.

Pursuant to Rule 208, the ROC will be composed entirely of Public 

Directors. The ROC oversees IMX’s regulatory program on behalf of 

the Board. It makes recommendations to the Board that will, in its 

judgment, best promote the interests of the Exchange. Likewise, the 

ROC assists IMX in minimizing actual and potential conflicts of interest. 

The Board will be responsible for ensuring compliance with the impartial 

access requirements, including ensuring that the fee structure in not 

discriminatory. 

IMX may, from time to time, establish one or more advisory committees 

as it may deem necessary or advisable. Each advisory committee may 

consist of Directors, Officers, and representatives of Participants as 

determined by the Exchange. Advisory committees may make 

recommendations to the Board but will not be authorized to make 

decisions or act on behalf of the Exchange.

Exhibit M –

Rulebook

Exhibit B -

Officers and 

Directors

Exhibit C -

Directors 

Fitness 

Standards
20

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

The initial composition contemplated for the Board is described further 

in Exhibit B. Fitness standards applicable to members of the Board are 

described in Exhibit C.

Core Principle 18 – Recordkeeping

The board of trade shall maintain records 

of all activities relating to the business of 

the contract market:

(a) In a form and manner that is 

acceptable to the Commission: and

(b) For a period of at least 5 years.

The Exchange will maintain records of all activities related to its 

business for a period of five years and in accordance with Commission 

Regulation 1.31. See Rule 211 and Exhibit S. 

Exhibit M –

Rulebook

Exhibit S –

Record 

Retention 

Policy

Core Principle 19 – Antitrust Considerations

Unless necessary or appropriate to 

achieve the purposes of this Act, the 

board of trade shall not:

(a) Adopt any Rule or taking any action 

that results in any unreasonable 

restraint of trade; or

(b) Impose any material anticompetitive 

burden on trading on the contract 

market.

The Exchange’s Rulebook and business have been designed to avoid 

any unreasonable restraints on trade or the imposition of any material 

anticompetitive burden on trading. As described in Rule 202, the Board 

will ensure that the Exchange does not restrict access or impose 

burdens on access (including fees) in a discriminatory manner. Rule

539 and Exhibit Q details the Exchange’s algorithm for order matching. 

The Exchange will post general information, including its Contract 

Specifications and a copy of its Rulebook, on its Website. Notices of 

new Contracts, Rules, and Rule amendments will be posted on the 

Exchange Website concurrent with the filing or submission of such 

information with the CFTC. All relevant information relating to the 

Exchange and its Contracts will be made available to Participants so 

they are able to make their own determination regarding if participation 

Exhibit M –

Rulebook

Exhibit K -

Fees

Exhibit Q –

Trading 

System
21

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

in the Exchange’s market is appropriate considering their experience, 

objectives, financial resources, and any other relevant circumstances.

IMX will charge fees that are equal across classes, and such fees are

designed to be non-discriminatory. IMX makes public its Rules, fees 

and Participant eligibility criteria, among other items, on its website.

Core Principle 20 – System Safeguards

Each designated contract market shall:

(a) Establish and maintain a program of 

risk analysis and oversight to identify 

and minimize sources of operational 

risk, through the development of 

appropriate controls and procedures, 

and the development of automated 

systems, that are reliable, secure, and 

have adequate scalable capacity;

(b) Establish and maintain emergency 

procedures, backup facilities, and a 

plan for disaster recovery that allow 

for the timely recovery and 

resumption of operations and the 

fulfilment of the responsibilities and 

obligations of the board of trade; and

(c) Periodically conduct tests to verily 

that backup resources are sufficient to 

ensure continued order processing 

and trade matching, transmission of 

matched orders to a designated 

clearing organization for clearing, 

price reporting, market surveillance, 

The Exchange has developed a program of risk analysis and oversight 

to identify and minimize sources of operational risk, through the 

development of appropriate controls and procedures and the 

development of automated systems that are reliable, secure and to 

have adequate scalable capacity as described in Exhibit V.

This program is described in Exhibit V, which includes information 

regarding the security of those systems, the Exchange’s risk 

assessment reviews, internal controls for operations, functional testing, 

security testing and capacity planning and testing.

Exhibit V describes the Exchange’s emergency plan and includes a 

description of the back-up systems and emergency procedures that 

include recovery time objectives. Under the emergency plan, the 

Exchange has procedures to conduct failover tests to ensure that 

backup resources are sufficient to ensure continued order processing 

and trade matching, price reporting, market surveillance and 

maintenance of a comprehensive and accurate audit trail. In addition, 

during an emergency, Exchange Rule 504 authorizes the Exchange to 

implement temporary emergency procedures and Rules. See also Core 

Principle 6.

IMX shall review the viability of backup resources in tandem with 

resource evaluations and technology refreshes of its production 

facilities. Along with industry wide testing, the Exchange will conduct 

quarterly internal testing of its own backup systems in coordination with 

all critical regulatory and technology service providers. See Exhibit V for 

Exhibit V –

Technology 

Questionnaire
22

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

and maintenance of a comprehensive 

and accurate audit trail.

more details. The Exchange will conduct periodic objective testing of 

the Exchange Trading Platform, and trade environment generally, 

pursuant to the provisions contemplated in the CFTC Technology 

Questionnaire. The Exchange will also periodically conduct tests and 

assessments, including: vulnerability testing; penetration testing;

controls testing; security incident response plan testing and enterprise 

technology risk assessment. 

Core Principle 21 – Financial Resources

(a) In General. The board of trade shall 

have adequate financial, operational, 

and managerial resources to 

discharge each responsibility of the 

board of trade.

(b) Determination of adequacy. The 

financial resources of the board of 

trade shall be considered to be 

adequate if the value of the financial 

resources exceeds the total amount 

that would enable the contract market 

to cover the operating costs of the 

contract market for a 1-year period, 

as calculated on a rolling basis.

The Exchange will maintain financial resources that exceed the total 

amount that would enable the contract market to cover the operating 

costs sufficient to enable it to perform its functions in compliance with 

the core principles for DCMs for a twelve-month period, as calculated 

on a rolling basis, and liquid financial assets that exceed projected 

operating costs for a six-month period, as calculated on a rolling basis. 

At its inception, and until such time IMX has adequate revenue and cash 

flow, IMX will be funded, as needed, with funds from its parent company 

IMX, LLC. See also Exhibit I. 

The Exchange will follow the Guidance on Calculating Projected 

Operating Costs By DCMs and SEFs, as required by CFTC Letter 17-

25. 

The financial requirements and other materials required by this Core 

Principle will be submitted to the CFTC quarterly in the time period 

required by this Core Principle.

Exhibit I –

Financial 

Information

Core Principle 22 – Diversity of Board of Directors

The board of trade, if a publicly traded 

company, shall endeavour to recruit 

individuals to serve on the board of 

directors and the other decision-making 

IMX is not a publicly traded company; therefore this Core Principle is

not applicable.

N/A
23

Core Principle or Other Requirement IMX Health, LLC Rule, Policy or Procedure Relevant 

Exhibit(s)

bodies (as determined by the 

Commission) of the board of trade from 

among, and to have the composition of 

the bodies reflect, a broad and culturally 

diverse pool of qualified candidates.

Core Principle 23 – Securities and Exchange Commission

The board of trade shall keep any such 

records relating to swaps defined in 

Section 1a(47)(A)(v) of the Act open to 

inspection and examination by the 

Securities and Exchange Commission.

IMX does not offer any security-based contracts, therefore this Core 

Principle is not applicable.

N/A