Via Portal Submission

June 23, 2023

MGEX Submission No. 23-36

Mr. Christopher Kirkpatrick

Secretary of the Commission

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street NW

Washington, DC 20581

RE: Rule Certification Submission Pursuant to Regulation 40.6(a); Amendments to MGEX 

Bylaws

Dear Mr. Kirkpatrick:

Pursuant to Commodity Exchange Act (“CEAct”) Section 5c and Commodity Futures Trading Commission 

(“CFTC” or “Commission”) Regulation 40.6(a), the Minneapolis Grain Exchange, LLC (“MGEX” or 

“Exchange”) hereby certifies that the amendments to MGEX Bylaws 8.1., 8.3., 8.4., 9.1., 9.3., and 9.4., as 

set forth in Exhibit A, comply with the CEAct and the Commission regulations promulgated thereunder (the 

“Proposed Amendments”). MGEX further certifies that the submission and pending changes to the MGEX

Bylaws have been posted on the Exchange website at the following link:

http://www.mgex.com/regulation.html.

Overview of Bylaw Amendments

The Proposed Amendments to the above-referenced Bylaws update the composition and qualification 

requirements for the Disciplinary Committee and Hearing Committee.

DCM Core Principles

MGEX has reviewed the Core Principles for designated contract markets (“DCM Core Principles”) and 

identified that the Proposed Amendments may impact the following DCM Core Principles:

• DCM Core Principle 2 – Compliance with Rules: The Proposed Amendments clearly establish in 

the Bylaws the composition and qualifications requirements for members of the Disciplinary 

Committee and Hearing Committee.

• DCM Core Principle 7 – Availability of General Information: The Proposed Amendments have been 

disseminated on the MGEX website, and will be available in the MGEX Rulebook, which is 

accessible online.

• DCM Core Principle 12, Protection of Markets and Market Participants: The Proposed Amendments 

establish the composition and qualifications for members of the Disciplinary Committee and 

Hearing Committee that both serve the function of protecting markets and market participants and 

promote fair and equitable trading on MGEX. 
MINNEAPOLIS GRAIN EXCHANGE, LLC

400 South 4th Street | 130 Grain Exchange Building | Minneapolis, MN 55415

612-321-7101

mgex.com

• DCM Core Principle 13, Disciplinary Procedures: The Proposed Amendments establish appropriate 

composition and qualifications for members of the Disciplinary Committee and Hearing Committee 

that do not conflict with Core Principle 13.

• DCM Core Principle 15, Governance Fitness Standards: The Proposed Amendments establish

appropriate composition and qualifications for members of the Disciplinary Committee and Hearing 

Committee that do not conflict with Core Principle 15.

• DCM Core Principle 16, Conflicts of Interest: The Proposed Amendments further reduce any 

potential conflicts of interest in the Exchange’s decision-making process.

Pursuant to MGEX Bylaw 3.1., the MGEX Board of Directors (“Board”) unanimously approved the Proposed 

Amendments at its meeting held on June 22, 2023. There were no substantive opposing views expressed 

by the Board, nor is the Exchange aware of any substantive opposing views with respect to this filing. The 

Proposed Amendments are to be effective when incorporated into the MGEX Rulebook and posted on its 

website, which will be at least 10 business days following the date of this submission. 

If there are any questions regarding this submission, please contact me at (612) 321-7128 or 

psparby@mgex.com. Thank you for your attention to this matter.

Sincerely,

Peter D. Sparby

Vice President, Counsel

Enclosure
MINNEAPOLIS GRAIN EXCHANGE, LLC

400 South 4th Street | 130 Grain Exchange Building | Minneapolis, MN 55415

612-321-7101

mgex.com

EXHIBIT A

The following MGEX Bylaws and Rules are to be amended. Additions are underlined while deletions 

are marked through.

ARTICLE VIII

DISCIPLINARY COMMITTEE

8.1. DISCIPLINARY COMMITTEE: APPOINTMENT.

There shall be established a committee to be known as the Disciplinary Committee, appointed by the Board

at the recommendation of the Chief Regulatory Officer and which shall be composed of not less than three 

(3) individuals with knowledge and experience in the financial markets. The chair of the Disciplinary 

Committee shall be an individual qualified to be a Public Director.five (5) members as hereinafter provided:

A. Two (2) of such members shall be appointed as Market Participants who are not serving 

as Officers or Directors or serving on the Hearing Committee.

B. One (1) member of the Disciplinary Committee shall consist of the President of the 

Exchange and one (1) member of the Disciplinary Committee shall consist of a member of 

the Board of Directors appointed by the President of the Exchange. 

The President of the Exchange may appoint a member of the Board of Directors to serve 

in his/her stead as a member of the Disciplinary Committee. If no member of the Board of 

Directors is available for such an appointment, the President of the Exchange may appoint 

a Market Participant of the Exchange. 

No member who is to serve as a substitute member in the place of the President shall be 

appointed as a member of the Disciplinary Committee if the member is a member of the 

Hearing Committee. 

C. One (1) member shall be an individual who qualifies as a Public Director. 

The members of the Disciplinary Committee shall should be as representative as practicable of the 

marketplace. Three (3) members of the Disciplinary Committee shall be required to constitute a quorum 

and must include an individual who meets the qualifications of a Public Director. 

8.3. DISCIPLINARY COMMITTEE: APPOINTMENT OF ALTERNATES.

If the Disciplinary Committee shall determine that it is improper for any or all of its members to serve during 

the consideration of and action upon any particular matter, or if any or all of the regular members shall be 

unable to serve during such consideration and action, the Disciplinary Committee may request the Chief 

Regulatory OfficerPresident to appoint, and the Chief Regulatory OfficerPresident shall appoint, an 

alternate or alternates to sit throughout the consideration of and action upon such matter. If an alternate is 

substituting for the individual who meets the qualifications of a Public Director, the alternate must also 

qualify as a Public Director. When so appointed, any alternate shall, with respect to the consideration of 

and action upon such particular matter, have all the powers and duties of the regular member for whom the 

alternate is acting; and such Disciplinary Committee, so constituted and consisting of such alternate or 

alternates and the remaining regular members of the Disciplinary Committee, if any, shall with respect to 

the consideration of and action upon such particular matter have all the duties and powers of the regular 

Disciplinary Committee. During the period that such a Disciplinary Committee appointed with respect to a 

particular matter is functioning, the regular Disciplinary Committee and the regular members thereof shall 
MINNEAPOLIS GRAIN EXCHANGE, LLC

400 South 4th Street | 130 Grain Exchange Building | Minneapolis, MN 55415

612-321-7101

mgex.com

continue to have all their usual powers and to perform all their usual duties concerning matters other than 

that before a Disciplinary Committee appointed with respect to a particular matter.

8.4. DISCIPLINARY COMMITTEE: DUTIES AND POWERS.

The Disciplinary Committee shall be charged with the duty and authority:

A. To prevent manipulation of prices as provided in the Commodity Exchange Act.

B. To review all investigation reports submitted to the Disciplinary Committee by the 

Department of Audits and Investigations in respect to all matters relating to activity 

conducted under the jurisdiction of MGEX and in respect to alleged violations of the Bylaws 

or MGEX RulesMGEX Bylaws or Rules. 

C. To direct the Department of Audits and Investigations to conduct such further investigation 

in respect to any such report as the Disciplinary Committee deems appropriate or 

advisable.

D. To promptly review and determine whether or not any or all charges included in the 

investigation report submitted to the Disciplinary Committee have, in its opinion, a 

reasonable foundation in fact.

E. To dismiss any or all charges included in any investigation report submitted to the 

Disciplinary Committee that are, in its opinion, without reasonable foundation in fact. 

F. To authorize the issuance of a Notice of Charges against person(s) alleged to have 

committed such violations if the Disciplinary Committee has found that the investigation 

report shows a reasonable basis for a violation and that the matter should be adjudicated.

G. To report in writing to the Board of Directors in respect to all matters which result in public 

disciplinary action. 

The Disciplinary Committee, in performing its duties, may request any Person or Market Participant to 

appear before the Disciplinary Committee in its investigations of matters set forth in the investigation report. 

The Disciplinary Committee may review the dealings and transactions of Persons or Market Participants, 

and it may examine their books, papers and records pertinent to such review. The Disciplinary Committee 

may employ such auditors, counsel or other assistants as it may deem necessary, and all expenses incident 

thereto shall be payable from the funds of the Exchange.

The Disciplinary Committee may invite a representative of the Commodity Futures Trading Commission to 

attend any or all of its meetings.

In addition to possible violations of the Bylaws or MGEX RulesMGEX Bylaws or Rules appropriately brought 

before the Disciplinary Committee pursuant to Paragraph B, above, the Disciplinary Committee also shall 

review any investigation report concerning a particular course of conduct by a Person or Market Participant 

which has produced or thereafter, in the opinion of the Disciplinary Committee, would produce a 

manipulation of prices or cornering of any commodity in violation of the MGEX Bylaws or RulesBylaws or 

MGEX Rules.

No Person or Market Participant shall violate any order of the Disciplinary Committee after having been 

duly notified thereof. Nothing, however, herein contained shall in any way be construed as superseding the 

duties and authority that have been vested in the Board of Directors by the MGEX Bylaws and RulesBylaws 

or MGEX Rules. All directives of the Disciplinary Committee pertaining to price manipulations or corners 

and requiring a market position reduction shall be effective when issued. 
MINNEAPOLIS GRAIN EXCHANGE, LLC

400 South 4th Street | 130 Grain Exchange Building | Minneapolis, MN 55415

612-321-7101

mgex.com

No member of the Disciplinary Committee shall publish, divulge or make known in any manner, except 

when reporting to the Board of Directors or to a committee concerned with such information, or when called 

upon to testify in any judicial or administrative proceeding, any facts regarding the business of any Person, 

or any other confidential information that may come to the knowledge of such Disciplinary Committee 

member in the member’s official capacity.

ARTICLE IX

HEARING COMMITTEE

9.1. HEARING COMMITTEE: APPOINTMENT.

There shall be established a committee of the Exchange to be known as the Hearing Committee, appointed 

by the Board at the recommendation of the Chief Regulatory Officer and which shall be composed of not 

less than three (3) individuals with knowledge and experience in the financial markets. The chair of the 

Hearing Committee shall be an individual qualified to be a Public Director.five (5) members as hereinafter 

provided:

A. Three (3) of such members shall be appointed by the Chairperson of the Board of Directors 

from Market Participants of the Exchange.

B. One (1) member of the Hearing Committee shall consist of the Chairperson of the Board 

of Directors. The Chairperson of the Board of Directors shall serve as the Chairperson of 

the Hearing Committee.

The Chairperson of the Board of Directors may appoint a member of the Board of Directors 

to serve in his/her stead as a member of the Hearing Committee. If no member of the Board

of Directors is available for such an appointment, the Chairperson may appoint a Market 

Participant of the Exchange. 

No member who is to serve as a substitute member in the place of the Chairperson of the 

Board of Directors shall be appointed as a member of the Hearing Committee if the member 

is a member of the Disciplinary Committee.

C. One (1) member shall be an individual who qualifies as a Public Director. 

The members of the Hearing Committee shall should be as representative as practicable of the 

marketplace. Three (3) members of the Hearing Committee shall be required to constitute a quorum and 

must include an individual who meets the qualifications of Public Director.

9.3. HEARING COMMITTEE: APPOINTMENT OF ALTERNATES.

If the Hearing Committee shall determine that it is improper for any or all of its members to serve during the 

consideration of and action upon any particular matter, or if any or all of the regular members shall be 

unable to serve during such consideration and action, the Hearing Committee may request the Chief 

Regulatory OfficerPresident of the Exchange to appoint, and the Chief Regulatory OfficerPresident of the 

Exchange shall appoint, an alternate or alternates to sit throughout the consideration of and action upon 

such matter. If an alternate is substituting for the individual who meets the qualifications of a Public Director, 

the alternate must also qualify as a Public Director. When so appointed, any alternate shall, with respect to 

the consideration of and action upon such particular matter, have all the powers and duties of the regular 

member for whom the alternate is acting; and such Hearing Committee, so constituted and consisting of 

such alternate or alternates and the remaining regular members of the Hearing Committee, if any, shall 

with respect to the consideration of and action upon such particular matter have all the duties and powers 

of the regular Hearing Committee. During the period that such Hearing Committee appointed with respect 
MINNEAPOLIS GRAIN EXCHANGE, LLC

400 South 4th Street | 130 Grain Exchange Building | Minneapolis, MN 55415

612-321-7101

mgex.com

to a particular matter is functioning, the regular Hearing Committee and the regular members thereof shall 

continue to have all their usual powers and to perform all their usual duties concerning matters other than 

that before a Hearing Committee appointed with respect to a particular matter.

9.4. HEARING COMMITTEE: DUTIES AND POWERS.

The Hearing Committee shall be charged with the following duty and authority:

A. To conduct a hearing as authorized pursuant to the MGEX Bylaws and RulesBylaws or 

MGEX Rules.

B. To impose a penalty if the Hearing Committee finds in the affirmative that there has been 

a violation, or in the alternative, to dismiss the alleged charges if the Hearing Committee 

finds that there has been no violation. 

C. To direct the Department of Audits and Investigations to conduct such further investigation 

in respect to any such report as the Committee deems appropriate or advisable on a timely 

basis.

D. In hearings conducted by the Hearing Committee, on a finding by the Hearing Committee 

that there has been a violation, to assess a penalty against those found guilty. The Hearing 

Committee may take such action it determines including, but not limited to, issuing a Letter 

of Reprimand, a suspension from trading, a monetary fine, or a recommendation to the 

Board of Directors for expulsion (singly or in any combination). 

E. To report in writing to the Board of Directors in respect to all matters which result in public 

disciplinary action.

F.E. To summon any Person or Market Participant to appear before the Hearing Committee. 

The findings and conclusions of the Hearing Committee, in respect to such matters, shall be final. There is 

no appeal to the Board of Directors or any other MGEX authority.

No member of the Hearing Committee shall publish, divulge or make known in any manner, except when 

reporting to the Board of Directors or to a committee concerned with such information, or when called upon 

to testify in any judicial or administrative proceeding, any facts regarding the business of any Person, or 

any other confidential information that may come to the knowledge of such Hearing Committee member in 

the member's official capacity.