MarketAxess SEF RULEBOOK

Effective as of September 1, 2021

**Table of Contents**

CHAPTER 1:	DEFINITIONS1

Rule 101.	Definitions1

CHAPTER 2:	MARKETAXESS SEF OWNERSHIP AND GOVERNANCE7

Rule 201.	Ownership7

Rule 202.	Board8

Rule 203.	Officers10

Rule 204.	Qualifications of Directors, Disciplinary Panel Members, Appeal Panel Members, Committee Members, Owners and Officers10

Rule 205.	Standing Committees11

Rule 206.	Pending Legal Proceedings.11

Rule 207.	Restrictions on Certain Persons who Possess Material, Non-Public Information: Improper Use or Disclosure of Material Non-Public Information.12

Rule 208.	Regulatory Oversight Committee12

Rule 209.	Chief Compliance Officer13

Rule 210.	Compliance Staff and Resources15

Rule 211.	Additional Board Committees and MarketAxess SEF Panels16

Rule 212.	Emergency Rules16

Rule 213.	Conflicts of Interest and Misuse of Material, Non-Public Information17

Rule 214.	Maintenance of Books and Records19

Rule 215.	Information-Sharing Agreements20

Rule 216.	Services Agreement with a Regulatory Services Provider21

CHAPTER 3:	PARTICIPANTS21

Rule 301.	Criteria for Becoming a Participant Firm21

Rule 302.	Participant Firm Application Process22

Rule 303.	Trading Privileges of a Participant Firm23

Rule 304.	Reserved.23

Rule 305.	Dues, Assessments and Fees24

Rule 306.	Authorized Traders24

Rule 307.	Authorized Representatives25

Rule 308.	Recording of Communications25

Rule 309.	Notices to Participants25

Rule 310.	Communications between the MarketAxess SEF and Participants26

Rule 311.	Application of Rules and Jurisdiction26

Rule 312.	Description of Participant’s Status27

Rule 313.	Withdrawal of Participant27

Rule 314.	Compliance with the CEA27

Rule 315.	Impartial Access27

CHAPTER 4:	OBLIGATIONS OF PARTICIPANTS27

Rule 401.	Duties and Responsibilities of Participants28

Rule 402.	Required Disclosures to the MarketAxess SEF28

Rule 403.	Inspections by the MarketAxess SEF29

Rule 404.	Minimum Financial and Related Reporting Requirements30

Rule 405.	Confidentiality of Financial and Other Information30

Rule 406.	Information Regarding Orders30

Rule 407.	Customers31

CHAPTER 5:	TRADING PRACTICES AND BUSINESS CONDUCT31

Rule 501.	Scope31

Rule 502.	Procedures31

Rule 503.	Business Days and Trading Hours32

Rule 504.	Enforceability32

Rule 505.	Fraudulent Acts Prohibited32

Rule 506.	Fictitious, Wash or Non-Competitive Transactions Prohibited32

Rule 507.	Price Dissemination.32

Rule 508.	Market Manipulation Prohibited33

Rule 509.	Disruptive Trading Practices Prohibited33

Rule 510.	Prohibition of Misstatements33

Rule 511.	Reserved.33

Rule 512.	Reserved.33

Rule 513.	Supervision33

Rule 514.	Execution of Required Transactions33

Rule 515.	Misuse of the MarketAxess SEF Trading System33

Rule 516.	Errors and Omissions in Handling Orders34

Rule 517.	Volume Discount Programs34

Rule 518.	Withholding Orders Prohibited34

Rule 519.	Priority of Customers’ Orders34

Rule 520.	Handling of Customer Orders34

Rule 521.	Disclosing Orders Prohibited34

Rule 522.	Simultaneous Buy And Sell Orders For Different Beneficial Owners35

Rule 523.	Wash Sales Prohibited35

Rule 524.	Recordkeeping Requirements for Entering Orders into the MarketAxess SEF Trading System35

Rule 525.	Prearranged and Noncompetitive Trades Prohibited37

Rule 526.	Responsibility For Customer Orders37

Rule 527.	Pre-Execution Credit Checks38

Rule 528.	Priority of Execution38

Rule 529.	Intermediation38

Rule 530.	Position Limits and Exemptions38

Rule 531.	Position Accountability39

Rule 532.	Publication of Market Data39

Rule 533.	SDR Reporting39

Rule 534.	Reserved.40

Rule 535.	Identification of Authorized Traders40

Rule 536.	LIMITATION OF LIABILITY, NO WARRANTIES40

Rule 537.	The MarketAxess SEF Control Center42

Rule 538.	The MarketAxess SEF Trading System43

Rule 539.	Trade Cancellations and Price Adjustments44

Rule 540.	Terms and Conditions45

Rule 541.	Trading Pauses and Halts46

CHAPTER 6:	PRIVATELY NEGOTIATED TRANSACTIONS46

Rule 601.	Block Trades46

Rule 602.	Recordkeeping Requirements for Privately Negotiated Trades47

CHAPTER 7:	DISCIPLINARY RULES47

Rule 701.	General47

Rule 702.	Inquiries and Investigation49

Rule 703.	Reports of Investigations50

Rule 704.	Opportunity to Respond50

Rule 705.	Review of Investigative Reports51

Rule 706.	Notice of Charges52

Rule 707.	Answer to Notice of Charges53

Rule 708.	Service of Notice of Charges53

Rule 709.	Settlements53

Rule 710.	Disciplinary Panel54

Rule 711.	Convening Hearings of Disciplinary Proceedings56

Rule 712.	Respondent Review of Evidence56

Rule 713.	Conducting Hearings of Disciplinary Proceedings57

Rule 714.	Decision of Disciplinary Panel58

Rule 715.	Sanctions and Fines59

Rule 716.	Reserved.59

Rule 717.	Summary Imposition of Fines59

Rule 718.	Summary Suspensions and Other Summary Actions60

Rule 719.	Rights and Responsibilities after Suspension or Termination61

Rule 720.	Notice to the Respondent, the Regulatory Services Provider and the Public62

CHAPTER 8:	ARBITRATION RULES62

Rule 801.	Disputes Subject to Arbitration62

Rule 802.	Initiating an Arbitration Claim63

Rule 803.	Certain Claims against the MarketAxess SEF Involving Trading Systems or Services64

Rule 804.	Claims Relating to Trade Cancellations or Price Adjustments65

Rule 805.	Right to Counsel65

Rule 806.	Governing Law65

Rule 807.	Costs65

CHAPTER 9:	CLEARING65

Rule 901.	Clearing of Swaps65

Rule 902.	Reserved.65

Rule 903.	Reserved.65

Rule 904.	Clearing House Rules65

Rule 905.	Submission of Trades to a Clearing House66

Rule 906.	 Execution and Submission to Clearing of New Swap/Old Terms and New Swap/Corrected Terms66

CHAPTER 10:	MISCELLANEOUS69

Rule 1001.	MarketAxess SEF personnel – Trading and Misuse of Material, Non-Public Information69

Rule 1002.	Gifts and Gratuities70

Rule 1003.	Market Data71

Rule 1004.	Extension or Waiver of Rules71

Rule 1005.	Effect of Amendment, Repeal or New Rule71

Rule 1006.	Uncleared Swaps71

Rule 1007.	Issuance of SEF Confirmations72

Rule 1008.	Forwarding of SEF Confirmations73

APPENDIX A:	CREDIT CONTRACTS TERMS AND CONDITIONS75

I. **APPENDIX A:	CREDIT CONTRACTS TERMS AND CONDITIONS**

**Terms and Conditions**

**Terms and Conditions of Specific Products**

A copy of the terms and conditions for each product that will be listed on the MarketAxess SEF is attached as Appendix A.  The terms and conditions applicable to all products listed for trading on the MarketAxess SEF are described below.  

**Terms and Conditions Applicable to All Products Listed in Appendix A**

Each of the following terms and conditions applies to all products listed in Appendix A hereto:  

· The trading hours are 3:00 am – 5:30 pm EST Monday through Friday.  

· Each contract has a minimum size of 10,000 and can be traded in increments of 1,000.  

· There are no daily price limits.  

· Price fluctuations are decimalized to six decimal points. 

· There are no maximum price fluctuation limits.  

· MarketAxess SEF Corporation will comply with the requirements of 17 C.F.R. 15.03 with respect to reportable levels. 

· Pursuant to the MarketAxess SEF Corporation Rulebook, MarketAxess SEF Corporation has the authority to adopt position limits or position accountability levels.  Currently, no speculative position limits are required by Parts 150 or 151 of the Commission’s regulations.  Therefore, MarketAxess SEF Corporation has not adopted any position limits or position accountability levels. 

· The cash settlement method is commonly used for credit default swaps and accepted by market participants.  The cash settlement process will include the following payments: 

· Fixed Quarterly Cash Payments: These payments are reflected in basis points and paid by the protection buyer to the protection seller.

· Upfront Fee Payment: This fee is a portion of the payments, which is expressed in percentage points of the notional. The fee is present valued and paid immediately to the seller.

· Contingent Payment: If there is a credit event (bankruptcy or failure to pay), payments related to the credit event settlement will be determined pursuant to the 2009 ISDA Credit Derivatives Determination Committees and Auction Settlement Supplement (i.e., the Big Bang Protocol).

**Explanation of Compliance with the CEA and Commission Regulations Thereunder**

MarketAxess SEF Corporation will continue to comply with the CEA and Commission regulations thereunder when listing the products included in Appendix A.  MarketAxess SEF Corporation uses the indices described below to determine the exchange of cash flows for the products it intends to list.  The indices listed below are highly liquid indices that are not readily susceptible to manipulation.  The composition and weighting of each index is governed by Markit’s rules, making it extremely difficult to manipulate.  

Each index used by the MarketAxess SEF Corporation for its contracts is a reliable indicator of market values and conditions.  Each index is highly regarded by the industry.  Markit calculates each referenced price index used by MarketAxess SEF Corporation.  Markit uses business practices that minimize the opportunity or incentive to manipulate the cash-settlement price series. Furthermore, Markit’s cash-settlement calculation involves computational procedures that eliminate or reduce the impact of potentially unrepresentative data.  

Markit Credit Indices are made up of the most liquid entities in the relevant single-name CDS market.  The indices roll on a semi-annual basis, and the composition of each new series (a new index) is established based on a transparent set of rules designed to ensure that the current series tracks the most liquid instruments in the relevant market.