SUBMISSION COVER SHEET

IMPORTANT: Check box if Confidential Treatment is requested 

Registered Entity Identifier Code (optional): ___________________________ 

Organization: ______________________________________________________________________ 

Filing as a: DCM SEF DCO SDR Please note - only ONE choice allowed. 

Filing Date (mm/dd/yy): ___________ Filing Description:

SPECIFY FILING TYPE Please note only ONE choice allowed per Submission. 

Organization Rules and Rule Amendments

Certification § 40.6(a)

Approval § 40.5(a)

Notification § 40.6(d)

Advance Notice of SIDCO Rule Change § 40.10(a)

SIDCO Emergency Rule Change § 40.10(h)

 Rule Numbers: ____________________________________________________________________ 

New Product Please note only ONE product per Submission.

Certification § 40.2(a) 

Certification Security Futures § 41.23(a)

Certification Swap Class § 40.2(d)

Approval § 40.3(a)

Approval Security Futures § 41.23(b) 

Novel Derivative Product Notification § 40.12(a)

Swap Submission § 39.5

 Official Product Name: _____________________________________________________________ 

Product Terms and Conditions (product related Rules and Rule Amendments)

Certification § 40.6(a) 

Certification Made Available to Trade Determination § 40.6(a)

Certification Security Futures § 41.24(a)

Delisting (No Open Interest) § 40.6(a) 

Approval § 40.5(a)

Approval Made Available to Trade Determination § 40.5(a)

Approval Security Futures § 41.24(b)

Approval Amendments to enumerated agricultural products § 40.4(a), § 40.5(a)

“Non-Material Agricultural Rule Change” § 40.4(b)(5)

Notification § 40.6(d)

 Official Name(s) of Product(s) Affected: ________________________________________________ 

Rule Numbers: ______________________________________________________________________ 

Clear Markets North America, Inc.

✔

11/6/2020

✔

406, 410, AND 418C
Sent via CFTC online portal November 6, 2020

Melissa Jurgens

Office of the Secretariat

U.S. Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street NW

Washington, DC 20581

RE: Clear Markets North America, Inc. – Rule Amendments

Dear Ms. Jurgens:

Pursuant to Section 5c(c) of the Commodity Exchange Act (the “Act”) and Section 40.6(a) of 

the regulations of the U.S. Commodity Futures Trading Commission (the “CFTC”, or the 

“Commission”), Clear Markets North America, Inc. (“CMSEF”) hereby notifies the 

Commission that it has amended its Rulebook. The amended Rulebook will become effective 

on November 23rd 2020. 

A concise explanation and analysis of the amendments to the Rulebook and their compliance 

with applicable provisions of the Act, including core principles and the Commission’s 

regulations, is attached hereto as Exhibit A. A clean copy of the amended Rulebook is 

attached hereto as Exhibit B, and a copy of the amended Rulebook marked to show changes 

against the previous version of the Rulebook is attached hereto as Exhibit C. 

CMSEF hereby certifies that: (i) the amended Rulebook complies with the Act and the 

Commission’s regulations thereunder, and (ii) a notice and copy of this submission is being 

concurrently posted on CMSEF’s website. There were no substantive opposing views to the 

to the Rulebook.

Please contact the undersigned at (980) 819-1165 with any questions regarding this matter. 

Very truly yours, 

Zachary J. King

Chief Compliance Officer

Clear Markets North America, Inc.

Attachments:

Exhibit A: CMSEF Rulebook Amendments and Explanations

Exhibit B: CMSEF Rulebook (Clean)

Exhibit C: CMSEF Rulebook (Redline)
Exhibit A: CMSEF Rulebook Amendments and Explanations

Rule Number Rule Amendment Explanation and Support 

for Rule Amendment

Table of Contents Reassigned page numbers Clerical, not substantive

406 Amended rule to reflect 

CFTC final rule 37.9(d), 

correct clerical errors.

Rule amendment prevents 

the disclosure of the name of 

a swap Participant or 

Counterparty consistent with 

Rule 37.9(d)

410 Amended rule to reflect 

CFTC final rule 37.9(d)

Rule amendment ensures 

consistency with 37.9(d)

418C Correct Error Clerical, not substantive
Exhibit B: CMSEF Rulebook (Clean

[See Next Page]
Swap Execution Facility 

Rulebook

November 2020

Version 11.3.2020

ALL CLEAR MARKETS SWAP EXECUTION FACILITY PARTICIPANTS AND AUTHORIZED USERS, 

WHETHER SUCH PARTICIPANT OR AUTHORIZED USER ACCESSES CMSEF DIRECTLY OR THROUGH 

AN INTERMEDIARY, AND ANY CLEARING MEMBER WHICH GUARANTEES SWAPS TRADED ON 

CMSEF, HEREBY AGREE THAT THESE RULES ARE BINDING UPON ANY SUCH PERSON OR ENTITY 

AND ITS EMPLOYEES AND CUSTOMERS. IT IS FURTHER AGREED THAT THESE RULES ARE 

APPLICABLE AND THAT SUCH PERSONS ARE SUBJECT TO THE JURISDICTION OF CMSEF, THE CFTC, 

AND ANY RELEVANT SELF-REGULATORY ORGANIZATION. ALL SUCH PERSONS HEREBY AGREE TO 

COOPERATE FULLY IN THE EVENT CMSEF, THE CFTC, OR A SELF-REGULATORY ORGANIZATION 

CONDUCTS ANY INQUIRY, INVESTIGATION, OR AUDIT OF ANY PARTICIPANT OR ACTIVITY 

CONDUCTED ON THIS SWAP EXECUTION FACILITY.
CMSEF Rulebook CMSEF Page 2

Table of Contents

Chapter 1 Definitions........................................................................................................................... 6

Chapter 2 Governance ........................................................................................................................ 11

Rule 201 Board...................................................................................................................................... 11

Rule 202 Nominating Committee .......................................................................................................... 11

Rule 203 Regulatory Oversight Committee........................................................................................... 11

Rule 204 Additional Standing Committees ........................................................................................... 12

Rule 205 Ability of the Board to Review Decisions.............................................................................. 12

Rule 206 Ability of the Board to Amend these Rules............................................................................ 12

Rule 207 Eligibility ............................................................................................................................... 12

Rule 208 Officers................................................................................................................................... 12

Rule 209 Chief Compliance Officer...................................................................................................... 12

Rule 210 Conflicts of Interest................................................................................................................ 13

Rule 211 Non-Public Information ......................................................................................................... 15

Rule 212 Reporting to the CFTC........................................................................................................... 15

Rule 213 Reserved................................................................................................................................. 16

Rule 214 Reserved................................................................................................................................. 16

Rule 215 Reserved................................................................................................................................. 16

Rule 216 Information Sharing Agreements........................................................................................... 16

Rule 217 Agreements with Regulatory Services Providers................................................................... 16

Rule 218 Maintenance of Books and Records....................................................................................... 16

Rule 219 Swap Recordkeeping.............................................................................................................. 17

Chapter 3 Participants ........................................................................................................................ 17

Rule 301 Jurisdiction............................................................................................................................. 17

Rule 302A Trading Privileges............................................................................................................... 18

Rule 302B Brokered Access to CMSEF................................................................................................ 18

Rule 303A Eligibility Criteria for Participants and Access................................................................... 18

Rule 303B Eligibility Criteria for Independent Software Vendors........................................................ 20

Rule 303C Direct Market Access .......................................................................................................... 20

Rule 303D Withdrawing from CMSEF................................................................................................. 20

Rule 304 Authorized Users.................................................................................................................... 20

Rule 305 CMSEF Platform Security ..................................................................................................... 21
CMSEF Rulebook CMSEF Page 3

Rule 306 Participant Application Process.............................................................................................. 21

Rule 307 Authorized Representatives.................................................................................................... 22

Rule 308 Customers of Participants....................................................................................................... 22

Rule 309A Minimum Financial Standards ............................................................................................ 22

Rule 309B Minimum Financial Standards Reporting............................................................................ 23

Rule 310 Authority to Impose Restrictions ........................................................................................... 23

Rule 311 Mandatory Trading................................................................................................................. 23

Rule 312 Uncleared Swaps.................................................................................................................... 23

Rule 313 Fees........................................................................................................................................ 23

Rule 314 Communications between CMSEF and Participants.............................................................. 23

Rule 315 Notices ................................................................................................................................... 24

Rule 316 Reserved................................................................................................................................. 24

Rule 317 Continuing Applicability of Jurisdiction and Rules............................................................... 24

Rule 318 Participant Trading Records................................................................................................... 24

Rule 319 Participant Maintenance of Records....................................................................................... 24

Rule 320 Legal Certainty for CMSEF Trades ....................................................................................... 25

Chapter 4 Trading Standards and Practices........................................................................................ 25

Rule 401 Swaps Traded on CMSEF...................................................................................................... 25

Rule 402 Prohibited Trading Activities................................................................................................. 25

Rule 403 Fraudulent Acts and Misstatements ....................................................................................... 26

Rule 404 Misuse of the CMSEF Trading Platform................................................................................ 26

Rule 405 Trading Hours........................................................................................................................ 26

Rule 406 Execution of Swaps on CMSEF............................................................................................. 26

Rule 407A Required Transactions......................................................................................................... 29

Rule 407B Permitted Transactions........................................................................................................ 29

Rule 407C Clearing Exception for Swaps............................................................................................. 30

Rule 408 Cancellation of Orders by Participants................................................................................... 30

Rule 409 Modification or Cancellation of Orders and Trades by CMSEF............................................ 30

Rule 410A Pre-Execution Credit Checks .............................................................................................. 30

Rule 410B Confirmation of Agreements Between Counterparties........................................................ 30

Rule 411 Cleared Swaps........................................................................................................................ 31

Rule 412 Position Limits and Accountability........................................................................................ 31
CMSEF Rulebook CMSEF Page 4

Rule 413A Position Limits .................................................................................................................... 31

Rule 413B Position Accountability ....................................................................................................... 32

Rule 414 Real-Time Market Monitoring and Surveillance.................................................................... 32

Rule 415 Mishandled Customer Orders................................................................................................. 32

Rule 416A Block Trades ....................................................................................................................... 32

Rule 416B Execution of Block Trades Through RFQ........................................................................... 33

Rule 417A Pre-Trade Communications................................................................................................. 33

Rule 417B Information Obtained in Pre-Trade Communications ......................................................... 34

Rule 418A Dissemination of Prices and Trading Information............................................................... 34

Rule 418B Publicly Reportable Swap Transactions.............................................................................. 34

Rule 418C Reporting Counterparties..................................................................................................... 34

Rule 419 Emergency Rules ................................................................................................................... 35

Chapter 5 Disciplinary Rules ............................................................................................................. 36

Rule 501 General................................................................................................................................... 36

Rule 502 CMSEF’s Right to Inspect Books, Records and Systems ...................................................... 36

Rule 503 Investigations......................................................................................................................... 36

Rule 504 Reports of Investigations........................................................................................................ 37

Rule 505 Opportunity to Respond to Investigation Reports.................................................................. 37

Rule 506 Review of Investigation Reports............................................................................................ 38

Rule 507 Warnings................................................................................................................................ 38

Rule 508 Notice of Charges................................................................................................................... 38

Rule 509 Service of Notice of Charges.................................................................................................. 39

Rule 510 Answer to Notice of Charges................................................................................................. 39

Rule 511 Right to a Hearing .................................................................................................................. 39

Rule 512 Settlements............................................................................................................................. 40

Rule 513 Disciplinary Panels................................................................................................................. 40

Rule 514 Convening Hearings of Disciplinary Proceedings.................................................................. 41

Rule 515 Respondent Review of Evidence............................................................................................ 41

Rule 516 Conducting Hearings of Disciplinary Proceedings ................................................................ 42

Rule 517 Decision of Disciplinary Panel............................................................................................... 43

Rule 518 Sanctions................................................................................................................................ 43
CMSEF Rulebook CMSEF Page 5

Rule 519 Appeal from Disciplinary Panel Decision, Summary Impositions of Fines and Other 

Summary Actions.................................................................................................................................. 44

Rule 520 Summary Imposition of Fines................................................................................................ 45

Rule 521 Summary Suspensions and Other Summary Actions............................................................. 46

Rule 522 Reinstatement after Summary Suspension ............................................................................. 46

Rule 523 Rights and Responsibilities after Suspension or Termination................................................ 47

Rule 524 Notice of Disciplinary Proceedings........................................................................................ 47

Rule 525 CFTC Review of CMSEF Actions......................................................................................... 48

Chapter 6 Miscellaneous ........................................................................................................................... 48

Rule 601 Gifts and Gratuities................................................................................................................ 48

Rule 602 Rule Violations....................................................................................................................... 48

Rule 603 Market Data............................................................................................................................ 48

Rule 604 Publication of Trading Information........................................................................................ 48

Rule 605 Anti-Money Laundering......................................................................................................... 48

Rule 606 Swaps Trading by CMSEF Officials...................................................................................... 49

Rule 607 Confidentiality........................................................................................................................ 49

Rule 608 Information-Sharing Agreements........................................................................................... 49

Rule 609 Rule Changes Due to Changes in Government Regulations .................................................. 49

Rule 610 Governing Law....................................................................................................................... 49

Rule 611 Force Majeure ........................................................................................................................ 50

Rule 612 Extension or Waiver of CMSEF Rules .................................................................................. 50

Rule 613 Trading Restrictions of CMSEF Employees.......................................................................... 50
CMSEF Rulebook CMSEF Page 6

Chapter 1 Definitions

Unless otherwise specified, the following are defined terms and shall have the meanings specified below.

Acceptable Price Range means the range of prices that an order may be executed without being subject to review by 

the CMSEF Compliance Department and shall be published on the CMSEF website.

Account Manager means a Person that meets the criteria set forth in CFTC Rule 43.6(h)(6).

Act or CEA means the Commodity Exchange Act, as amended from time to time.

Affiliate means an affiliate of a Participant or a Person or entity who controls, is controlled or is directed, either 

directly or indirectly by another Person or Participant.

API means application programming interface.

Appeals Panel means a panel appointed by the Chief Compliance Officer under Rule 519.

Applicable Law means, with respect to any Person, and statute, law, regulation, rule or ordinance of any governmental 

or self-regulatory authority applicable to such Person, including the CEA, Exchange Act and CFTC Regulations.

Authorized Broker User means a type of Authorized User that is a Person who is employed or is an agent of a 

Registered Broker and who has been authorized by such Registered Broker to access one or more Platforms pursuant 

to Rule 302B and to enter Orders or execute Swaps on a Platform on behalf of Participants that have brokerage

agreements the Registered Broker.

Authorized Person means any Person who is authorized by a Participant to represent the Participant in CMSEF 

matters.

Authorized User means any Person who is an agent or Employee of a Participant or Customer of a Participant and is 

authorized by such Participant to access the SEF by any means. For the avoidance of doubt, any Authorized User of 

a Customer shall not be considered an Authorized User of the Sponsoring Broker providing DMA to the Customer by 

virtue of the DMA relationship between the two parties. 

Block Trade means a publicly reportable swap transaction that meets the definition found in CFTC Regulation 43.2, 

or meets the requirements of CFTC No-Action Letter No. 15-60; specifically, a Block Trade:

(1) Involves a swap that is listed on CMSEF;

(2) Is executed pursuant to CMSEF's Rules and procedures;

(3) Has a notional or principal amount at or above the appropriate minimum block size applicable to such swap; 

and

(4) Is reported subject to the rules and procedures of CMSEF and the rules described in Part 43 of the CFTC 

Regulations, including the appropriate time delay requirements set forth in CFTC Regulation 43.5.

Board means the Board of Directors of CMSEF constituted in accordance with these Rules and Applicable Law.

Business Day means any day on which CMSEF is open for trading.

By-Laws mean the By-Laws of CMSEF.

CFTC or Commission means the Commodity Futures Trading Commission and any successor regulatory agency or 

authority.

CFTC Regulations means the rules and regulations of the CFTC, as amended.
CMSEF Rulebook CMSEF Page 7

Chief Compliance Officer is described under Rule 209. 

Cleared Swap means a Swap that is required to be cleared under Section 2(h)(1)(A) of the CEA and CFTC Regulation 

39.5 or is accepted for clearing by a Derivatives Clearing Organization even though such Swap is not required to be 

cleared.

Clearing Exception means meeting the requirements for exemption from the clearing requirement set forth in Section 

2(h)(1) of the Act because one counterparty to the transaction is entitled to the exception by virtue of meeting the 

requirements set forth in Section 2(h)(7) of the CEA, CFTC Regulations or CFTC Staff No- Action Letters. 

Clearing Exception Form means a form that entitles a counterparty to enter into a swap with a Clearing Exception 

under the Rules of CMSEF. 

Clearing House means a Derivatives Clearing Organization or non-US central clearing house approved by the CFTC 

that provides clearing services for Swaps traded on CMSEF.

Clearing Member means a member of a Clearing House that is authorized to clear trades for Participants or on behalf 

of a Participant or Authorized Users under the CMSEF Rules.

Client means a Person, other than an individual, that has provided written authority to an Account Manager to execute 

Swaps on CMSEF on behalf of and in the name of that Person. 

CMSEF means Clear Markets North America, Inc. and its trading platform(s).

Compliance Department means anyone that assists CMSEF in the surveillance and enforcement of the CMSEF 

Rules. This includes Employees and agents of CMSEF, including Employees and agents of the Regulatory Services 

Provider.

Control means the possession, direct or indirect, or the power or ability to influence or direct or cause the direction 

of the management and policies of an entity, whether through the ownership of securities or otherwise.

Customer has the meaning set forth in CFTC Regulation 1.3(k).

Customer Account means an account held by a Participant on behalf of a Customer.

Derivatives Clearing Organization or DCO has the meaning set forth in Section 1a(15) of the CEA.

Direct Market Access or DMA means an arrangement among a Sponsoring Broker, its Customer and CMSEF that 

allows one or more representatives of that Customer to have Trading Access using the Participant ID of the Sponsoring 

Broker. 

Director means any member of the Board of CMSEF.

Disciplinary Offense has the meaning set forth in CFTC Regulation 1.63(a).

Disciplinary Panel means a panel appointed by the CCO pursuant to Rule 513 to conduct hearings, render decisions, 

and impose sanctions involving disciplinary matters pursuant to these Rules. 

Disciplinary Proceedings means all actions taken by CMSEF with respect to potential violations of the Rules, as set 

forth in Chapter 5 of this Rulebook. 
CMSEF Rulebook CMSEF Page 8

DMA Customer means a Customer of a Sponsoring Broker where representatives of the Customer that are Persons

are designated by the Sponsoring Broker to have Trading Access to the SEF Platform using the Participant ID of the 

Sponsoring Broker and where such Customer signs the DMA Customer Documentation. 

DMA Customer Documentation means the agreements (together with any applicable schedules, exhibits or 

appendices thereto required by CMSEF) in form and substance acceptable to CMSEF, that are required to be executed 

and delivered to CMSEF before a DMA Customer may access the SEF Platform. 

DMA Order means an Order or RFQ placed by a DMA Customer using the Participant ID of the Sponsoring Broker. 

Eligible Contract Participant or ECP means a Participant as defined by Section 1a(18) of the CEA.

Emergency means any occurrence or circumstance that, in the opinion of the Board, or a Person or Persons duly 

authorized to issue such an opinion on behalf of the Board under circumstances and pursuant to procedures that are 

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

liquidation of or delivery pursuant to, any agreements, contracts, swaps or transactions or the timely collection and 

payment of funds in connection with clearing and settlement by a derivatives clearing organization, including: (a) any 

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

or undue concentration of positions; (c) any circumstances which may materially affect the performance of 

agreements, contracts, swaps or transactions, including failure of the payment system or the bankruptcy or insolvency 

of any participant; (d) any action taken by any governmental body, or any other registered entity, board of trade, 

market or facility which may have a direct impact on trading or clearing and settlement; (e) at the request of the CFTC; 

and (f) any other circumstance which may have a severe, adverse effect upon the functioning of CMSEF. 

Emergency Rules has the meaning set forth in Rule 419.

Employee has the meaning found in CFTC Regulation 1.59.

Exchange Act means the Securities Exchange Act of 1934, as amended.

Final Decision has the meaning set forth in CFTC Regulation 1.63(a).

Financial Entity means any Participant meeting the criteria set forth in Section 2(h)(7)(C) of the CEA.

Futures Commission Merchant or FCM has the meaning set forth in Section 1a(28) of the CEA.

Independent Software Vendor or ISV means a Person that provides Participants with a system or platform to route 

orders to CMSEF but does not provide Participants with the ability to execute swaps on system or platform. An ISV 

cannot be a Participant.

Investigation means a process by which the Compliance Department determines whether a violation of CMSEF Rules 

has occurred. 

Investigation Report has the meaning as described in Rule 504.

Legal Entity Identifier has the meaning described in CFTC Regulation 45.6.

Major Swap Participant is defined in Section 1a(33) of the CEA.

Market Data means any data or other information contained in, displayed on, or generated by transactions entered 

into or executed on CMSEF.

Market Date Vendor means a vendor who has entered into an agreement with CMSEF to distribute Market Data.
CMSEF Rulebook CMSEF Page 9

NFA means the National Futures Association.

Officer means an officer of CMSEF.

Order means an actionable bid or offer (i) in response to an RFQ, (ii) displayed in the Order Book, or (iii) modification 

of an RFQ or price displayed in the Order Book.

Order Book means the Central Limit Order book part of the CMSEF trading system in which all Participants have 

the ability to enter multiple bids or offers, observe or receive bids and offers entered by other Participants, and execute 

such bids and offers.

Participant means any Person that has been granted Trading Privileges under the CMSEF Rules and who may trade 

for its own account or for or on behalf of a Customer.

Participant Data means any and all data and other information submitted to CMSEF by the Participant.

Participant Documentation means any such agreements and subsequent addenda or amendments required by 

CMSEF before a Participant will be granted Trading Privileges.

Participant ID is a unique identifier assigned to each Participant by CMSEF.

Person means any natural person or entity.

President means the Person appointed by the Board as CMSEF’s chief executive officer in accordance with CMSEF’s 

By-Laws and duties as determined by the Board.

Proprietary Account is defined by CFTC Regulation 1.3(y).

Proprietary Data means any information with respect to any Person or the identity of such Person or their transactions 

or trading positions.

Public Director means a director of CMSEF who is not an Employee or agent of CMSEF and whose compensation 

is not tied to the performance of CMSEF.

Registered Broker means a type of Participant that is registered as a Futures Commission Merchant or Introducing 

Broker or in another capacity that permits the Person to enter agency trades on behalf of others, or is exempt from 

such registration, and only enters Orders or executes Swaps on CMSEF on behalf of other Participants, but not 

proprietary trades on behalf of the Registered Broker. 

Regulatory Oversight Committee or ROC means the committee of the Board as described in Rule 203.

Regulatory Services Agreement means the agreement by which CMSEF delegates certain market surveillance, trade 

practice surveillance, and other regulatory compliance related services to a Regulatory Services Provider.

Regulatory Services Provider means the organization that provides regulatory services to CMSEF under a 

Regulatory Services Agreement.

Reporting Counterparty means a Participant that is designated as such under CFTC Regulation 45.1 and 45.8.

Request for Quote or RFQ means a request for quote sent by a Participant to other Participants for the purpose of 

getting bids or offers for a specific instrument under these Rules.

Required Swap Creation Data is defined under CFTC Regulation 45.1.
CMSEF Rulebook CMSEF Page 10

Required Transaction means any Swap transaction that is required under Section 2(h)(8) of the CEA to be executed 

on a SEF.

Review Panel means a panel formed for the purpose of deciding whether there has been a violation of CMSEF Rules.

Rules mean any rule adopted from time to time by CMSEF relating to the operation of or conduct of trading on 

CMSEF.

SEC means the Securities and Exchange Commission and any successor agency or regulatory authority.

SEF means a swap execution facility as registered with the CFTC and defined in Section 1a(50) of the CEA. CMSEF 

is a SEF.

Settlement Agreement has the meaning set forth in CFTC Regulation 1.63(a).

Sponsoring Broker means a Participant that designates one or more of its Customers as DMA Customers under the 

CMSEF Rules. 

Swap means any instrument defined as a swap under Section 1a(47) of the CEA and as defined in further CFTC 

Regulations, and is traded on CMSEF.

Swap Data Repository or SDR means any swap data repository registered with the CFTC as defined by Section 

1a(48) of the CEA.

Swap Dealer means a swap dealer as defined in Section 1a(49) of the CEA.

Trade means any executed transaction for the purchase or sale of a Swap on CMSEF.

Trading Hours means the hours during which Participants may regularly execute trades on CMSEF.

Trading Privileges means the rights granted to a Participant to enter Orders and execute Swap transactions on 

CMSEF.

User ID means a unique identifier issued to each Authorized User, which enables CMSEF to identify each individual 

accessing the CMSEF system.

Voice Request for Quote of VRFQ means a request for quote sent by a Participant to other Participants via a CMSEF 

Voice Agent for the purpose of getting bids or offers for a specific instrument under these Rules. Outside of Rule 

406(ii) and Rule 416, references to RFQ shall also include VRFQ.
CMSEF Rulebook CMSEF Page 11

Chapter 2 Governance

Rule 201 Board

(i) CMSEF shall be governed by the Board according to the By-Laws of Clear Markets North America, 

Inc.

(ii) At all times following the CFTC granting CMSEF permission to operate as a SEF the Board shall be 

composed of at least 35%, but in no case less than two, or fewer than the minimum number or 

percentage of Public Directors required by CFTC Regulations.

(iii) Public Directors can only be appointed or removed by an absolute majority of the members of the 

Board or Stockholders, either:

a. in a meeting;

b. by written consent of all Directors in lieu of a meeting; or

c. by written consent of a majority of Stockholders in lieu of a meeting.

(iv) Public Directors shall serve for two-year terms from their date of election, and shall meet the following 

criteria:

a. Public Directors may not be members of CMSEF;

b. Public Directors may not be salaried Employees of CMSEF;

c. Public Directors may not primarily perform services for CMSEF in a capacity other than as a 

member of the Board; and

d. Public Directors shall not be officers, principals or Employees of a Participant of CMSEF.

(v) Members of the Board, including Public Directors must be of sufficient integrity and have relevant 

experience in financial markets.

(vi) Non-executive Directors and Public Directors compensation shall not be linked to the performance of 

CMSEF.

Rule 202 Nominating Committee

The Board shall create a Nominating Committee to identify and nominate qualified individuals to serve on 

the Board as required by Applicable Law. The Board shall take this action no later than the date set for 

compliance as set by the CFTC in order for CMSEF to operate as a SEF. The Committee shall include no 

fewer than the minimum number of Public Directors required by the CFTC at all times following the 

compliance date set by the CFTC.

Rule 203 Regulatory Oversight Committee

The Board shall create a Regulatory Oversight Committee chaired by the Chief Compliance Officer. A 

majority of the members of the Regulatory Oversight Committee shall be Public Directors. The Regulatory 

Oversight Committee shall report to the Board and shall be responsible for:

(i) overseeing CMSEF’s regulatory program, including but not limited to audits, examinations, 

Investigations, financial reporting, market surveillance and record keeping;

(ii) monitoring compliance with all regulatory requirements, including those of the CFTC and SEC;

(iii) review the performance of the Chief Compliance Officer and the Compliance Department;

(iv) review and approve the annual compliance budget and resources;

(v) review and approve all proposed regulatory changes or changes to CMSEF’s regulatory program;

(vi) review any Investigations conducted by CMSEF;

(vii) prepare an annual report to the Board and the CFTC on CMSEF’s regulatory program; 

(viii) monitoring the sufficiency, independence and effectiveness of the CMSEF’s regulatory program; 

and

(ix) undertake any additional duties required under these Rules or assigned to it by the Board.
CMSEF Rulebook CMSEF Page 12

Rule 204 Additional Standing Committees

The Board may create additional standing committees as may be necessary from time to time.

Rule 205 Ability of the Board to Review Decisions

The Board has the authority to review and affirm, modify, or overrule any and all actions taken by any

Committees of the Board.

Rule 206 Ability of the Board to Amend these Rules

Subject to any required approval or filing required by the CFTC, the Board may from time to time amend, 

repeal or adopt new Rules. All such amendments, repeals, or new Rules shall become effective on the date 

specified by the Board unless otherwise directed by the CFTC.

Rule 207 Eligibility

A Person may not serve on the Board or a Disciplinary Panel, or be an Officer or Employee of CMSEF if the 

individual:

(i) has been convicted of a felony listed in Section 8a(2)(D)(ii) through (iv) of the CEA; 

(ii) is subject to a denial, suspension or disqualification from serving on a disciplinary committee, 

arbitration panel, or governing board of any self-regulatory organization as that term was defined in 

the Exchange Act;

(iii) was found by Final Decision in the past three (3) years of a self-regulatory organization, 

administrative law judge, a court of competent jurisdiction, the CFTC or the SEC to have committed 

a disciplinary offence;

(iv) entered into a Settlement Agreement within the past three (3) years in which any of the findings or, 

in absence of such findings, any of the acts charged, included a Disciplinary Offense;

(v) is currently suspended from trading on any contract market, is suspended or expelled from 

membership with any self-regulatory organization, is serving any sentence of probation or owes any 

portion of any fine imposed pursuant to either (A) a finding by a Final Decision of a self-regulatory 

organization, an administrative law judge, a court of competent jurisdiction or the CFTC or SEC 

that the Person committed a disciplinary offence, or (B) a Settlement Agreement in which any of 

the findings or, in absence of such findings, any of the acts charged, included a disciplinary offence;

(vi) is subject to an agreement with any self-regulatory organization not to apply for membership; or

(vii) is subject to an agreement with the CFTC not to apply for registration.

In the event any of the above events occur with respect to a Board Member, member of a Disciplinary Panel, 

Officer, or Employee of CMSEF, the individual shall immediately disclose the occurrence to the CCO.

Rule 208 Officers

The Board shall appoint a President, Chief Compliance Officer, Chief Financial Officer, Chief Technology 

Officer and other such officers and the Board may deem necessary from time to time. The President shall be 

the Chief Executive Officer. Any Officer may also be a board member, Employee or officer of any of 

CMSEF’s Affiliates or subsidiaries.

Rule 209 Chief Compliance Officer
CMSEF Rulebook CMSEF Page 13

The Board shall appoint an individual to serve as the CCO of CMSEF. The Board shall approve the 

compensation of the CCO. Removal of the CCO shall require the approval of a majority of the Board. 

CMSEF shall notify the CFTC of the removal of the CCO and the appointment of any new CCO, whether 

interim or permanent, within two business days of such appointment. 

The CCO shall be an individual who:

(i) has the background and experience necessary to handle the responsibilities of the position; and

(ii) would not be disqualified from serving as a Director of CMSEF.

The CCO shall:

(i) report directly to the Board;

(ii) meet with the Board at least annually; 

(iii) meet with the Regulatory Oversight Committee at least quarterly (each such meeting may occur in 

person or by means of conference telephone); 

(iv) provide any information regarding the regulatory program of the SEF operated by CMSEF that is 

requested by the Board or the Regulatory Oversight Committee;

(v) report directly to the Chief Executive Officer or President of CMSEF;

(vi) be responsible for implementing and overseeing the SEF’s compliance with the Core Principles set 

forth in Section 5h of the CEA and Part 37 of the CFTC Regulations;

(vii) establish and implement written policies and procedures designed to prevent violations of CFTC, 

and CEA regulations and take reasonable steps to ensure compliance with such regulations;

(viii) establish and administer a compliance manual which ensures compliance with all applicable laws 

and rules and is designed to prevent ethical violations;

(ix) supervise CMSEF’s self-regulatory program. This includes market surveillance, trade practice 

surveillance, real-time market monitoring, compliance with the CEA and CFTC Regulations; 

(x) oversee and manage the CMSEF Compliance Department;

(xi) act as a point of contact with the CFTC and other regulators regarding requests for information, 

including books and records requests; and

(xii) In consultation with the Board or the CEO of CMSEF, resolve any conflicts of interest that may

arise, including: 

a. conflicts between business considerations and compliance requirements;

b. conflicts between business considerations and the requirement that the SEF operated by 

CMSEF provide fair, open, and impartial access as set forth in CFTC Regulation 37.202; 

and 

c. conflicts between CMSEF’s management and members of the Board.

Rule 210 Conflicts of Interest

CMSEF Officers and members of the Board, Disciplinary Panels or the Regulatory Oversight Committee

shall not participate in deliberations or voting in any matter involving a situation where they have a conflict 

of interest. 

A conflict of interest shall include situations where such individual apart from his interest in CMSEF or an 

affiliate:

(i) Is a named party in interest;

(ii) Is an employer, Employee, or fellow Employee of a named party in interest;

(iii) Is associated with a named party in interest through a “broker association” as defined in CFTC 

Regulation 156.1;

(iv) Has any other significant, ongoing business relationship with a named party in interest, not 

including relationships limited to executing futures or option transactions opposite of each other 
CMSEF Rulebook CMSEF Page 14

or to clearing futures or option transactions through the same clearing member; or

(v) Has a family relationship with a named party in interest.

It shall also include situations where the individual has a direct financial interest in the result of the 

deliberations or vote or has any other personal interests, which may be affected by the outcome of the vote 

or deliberations. 

Prior to the commencement of deliberations, each member of the deliberating body shall disclose to the CCO 

whether such member has or believes that he may have a conflict of interest. All conflicts of interest must 

be documented by the CCO.

The CCO shall then determine whether any member of the relevant deliberating body has a conflict of 

interest. 

Regardless of the determination of the CCO, no Officer or member of the Board, Disciplinary Panel or the 

Regulatory Oversight Committee shall take part in deliberations and voting on any significant action if such 

Person has a direct or indirect substantial financial interest in the result of the deliberation or vote.

Individuals who are required to abstain from deliberations and voting pursuant to the above may participate 

in discussions and provide information if the other members unanimously determine that such individual’s 

information is relevant but such individual but may not vote nor be present for voting. In determining whether 

the individual shall be included in discussions, the members shall consider the following: 

(i) whether the individual’s participation is consistent with the public interest; and

(ii) whether the member has a unique or special expertise, knowledge or experience in the matter 

under consideration.

Prior to any determination pursuant to the above, the deliberating body must fully consider the position 

information which is the basis for the member's direct and substantial financial interest in the result of a vote 

on a significant action pursuant to the above. No Person who is a named party or has a relationship with a 

named party may participate in any deliberations, regardless of any other factors. 

The Board shall document that the conflicts determination procedures required by this section have been 

followed. Such records shall include:

(i) The names of all members who attended the meeting in person or who otherwise were present

by electronic means;

(ii) The name of any member who voluntarily recused himself or herself or was required to abstain 

from deliberations and/or voting on a matter and the reason for the recusal or abstention, if 

stated; and

(iii) Information on the position information that was reviewed for each member.

In determining whether a conflict of interest exists regarding a significant action, the determining body must 

include a review of the following:

(i) Gross positions held at CMSEF in the member's personal accounts or “controlled accounts,” as 

defined in CFTC Regulation 1.3(j);

(ii) Gross positions held at CMSEF in proprietary accounts, as defined in CFTC Regulation 

1.17(b)(3), at the member's affiliated firm;

(iii) Gross positions held at CMSEF in accounts in which the member is a principal, as defined in 

CFTC Regulation 3.1(a);

(iv) Net positions held at CMSEF in “Customer” accounts, as defined in CFTC Regulation 

1.17(b)(2), at the member's affiliated firm; and,

(v) Any other types of positions, whether maintained at CMSEF or elsewhere, held in the member's 

personal accounts or the proprietary accounts of the member's affiliated firm that CMSEF 

reasonably expects could be affected by the significant action.

Taking into consideration the exigency of the significant action, such determinations should be based upon:
CMSEF Rulebook CMSEF Page 15

(i) The most recent large trader reports and clearing records available to CMSEF;

(ii) Information provided by the member with respect to positions pursuant to CFTC Regulation 

1.69(b)(2)(ii); and

(iii) Any other source of information that is held by and reasonably available to CMSEF.

Each Disciplinary Committee or Hearing Panel shall include sufficient different membership interests in 

order to ensure fairness and to prevent special treatment or preference for any Person in the conduct of its 

respective responsibilities.

At least one member of any Disciplinary Panel or Hearing Panel shall be a Person who is not a member of 

CMSEF whenever a Disciplinary Panel or Hearing Panel is acting with respect to a disciplinary action in 

which 

(i) the subject of the action is a member of CMSEF's Board or a Disciplinary Panel or Hearing 

Panel;

(ii) any of the charged, alleged or adjudicated contract market rule violations involve:

a. Manipulation or attempted manipulation of the price of a commodity, a futures 

contract or an option on a futures contract, or

b. Conduct which directly results in financial harm to a non-member of CMSEF.

This Rule governing Conflicts of Interest shall apply in an Emergency, as described in Rule 419. 

The Board shall determine by majority vote the Person that shall fill in for the CCO in all cases where the 

CCO is unable to fulfill his responsibilities as CCO due to a conflict of interest. The CCO shall not participate 

in such deliberations. 

Rule 211 Non-Public Information

No Officer, Employee, consultant, or member of the Board, a Committee, or a Disciplinary Panel shall use 

or disclose any non-public information obtained in connection with his or her official duties for any purpose 

other than the performance of his or her official duties.

When necessary or required by the CFTC or other regulators, CMSEF may share non-public information 

with one or more regulators, or SEFs, DCMs, or DCOs registered with the CFTC with which the member 

has a connection.

CMSEF is required to share information with the CFTC upon request, in a form and manner that is acceptable 

to the CFTC. CMSEF is also required to share any necessary information in order to perform the functions 

described in Section 5h of the CEA.

Rule 212 Reporting to the CFTC

The Board shall submit a written report about any of the following to the CFTC:

(i) Board rejection of a recommendation or action of the Regulatory Oversight Committee; or

(ii) the removal of a member of the Board or an Officer due to his becoming ineligible under Rule 

207.
CMSEF Rulebook CMSEF Page 16

Rule 213 Reserved

Rule 214 Reserved

Rule 215 Reserved

Rule 216 Information Sharing Agreements

CMSEF shall enter into information sharing agreements or other arrangements necessary to permit CMSEF 

to obtain necessary information, which will enable CMSEF to establish and enforce rules, which will enable 

the motoring of trading and trade processing. CMSEF will provide information to the CFTC upon request. 

CMSEF will also participate in international information sharing agreements as may be required by the CFTC 

from time to time. As part of any information sharing agreements, CMSEF may:

(i) share information and documents concerning current and past Participants and/or Customers as 

necessary for SEF to comply with its SRO obligations, to other markets;

(ii) assist in market surveillance with other markets as necessary for SEF to comply with its SRO 

obligations, to other markets;

(iii) share information and documents concerning current and past Investigations; and/or

(iv) require current and past Participants and/or Customers to provide information and documents, 

which have been requested by other markets or regulators with which CMSEF has an 

information sharing agreement.

Rule 217 Agreements with Regulatory Services Providers

In the future, as permitted by CEA and CFTC Rules and Regulations, CMSEF may contract with a Regulatory 

Services Provider (RSP) to provide some regulatory services to CMSEF. In the event CMSEF contracts with 

an RSP, the terms and conditions under which an RSP will provide Regulatory Services to CMSEF will be 

governed by a written Regulatory Services Agreement (RSA) between CMSEF and the RSP being contracted. 

CEA and CFTC Rules and Regulations permit CMSEF to outsource certain investigative, regulatory, and 

surveillance functions to an RSP. If CMSEF chooses to outsource such services, CMSEF shall retain the 

ultimate decision making authority with respect to any regulatory functions that are contracted to an RSP.

Rule 218 Maintenance of Books and Records

(i) CMSEF and all Participants (and DMA Customers) shall maintain all books and records 

(including all audit trail data and reconstructions) required to be maintained pursuant to the 

CEA and CFTC Regulations, including CFTC Regulations 43.3(h) and 45.2(a) and CMSEF 

and all Participants(and DMA Customers) must provide information to the CFTC upon request, 

in a form, time and manner acceptable to the CFTC. Such requests may be on a routine or nonroutine basis (i.e. if the Participant is under Investigation pursuant to Chapter 5 of this

Rulebook).

(ii) Such books and records shall be kept for the life of each Swap transacted pursuant to these 

Rules and five years following the termination of such Swap. Participants and their Customers 

shall make such books and records readily accessible to CMSEF for inspection, in each case in 

the form and manner required under the CEA and CFTC Regulations. CMSEF may request 

records through a written communication from the CMSEF Marketing Department to the 

Person designated by the Participant as the Compliance Contact. The Participant’s Business 

Contact will serve as a backup. CMSEF requests for books and records may be made on a 

routine basis and requests may also be made for non-routine data from the Participant. 
CMSEF Rulebook CMSEF Page 17

(iii) CMSEF may disclose information it obtains from Participants and Customers’ books and 

records, to any government agency, self-regulatory organization or other Person, information 

concerning or associated with a Participant or other Person if the CMSEF believes such 

disclosure is necessary and appropriate in exercising a legal or regulatory function, whether or 

not a formal arrangement governing the disclosure exists or a request for information was made.

Rule 219 Swap Recordkeeping

As prescribed by CFTC Regulation 45.2(a)(1), CMSEF shall keep full, complete, and systematic records, 

together with all pertinent data and memoranda, of all activities relating to the business of such entity or 

person with respect to swaps, as prescribed by the Commission. Such records shall include, without 

limitation, all records required by Part 37 of the CFTC Regulations.

(i) Record retention. As prescribed by CFTC Regulation 45.2(c), all records required to be kept 

pursuant to CFTC Regulation 45.2 shall be retained with respect to each swap throughout the 

life of the swap and for a period of at least five years following the final termination of the 

swap.

(ii) Retention form. As prescribed by CFTC Regulation 45.2(d), records required to be kept 

pursuant to CFTC Regulation 45.2 must be kept as follows: Records required to be kept by 

CMSEF may be kept in electronic form, or kept in paper form if originally created and 

exclusively maintained in paper form, so long as they are retrievable, and information in them 

is reportable, as required by CFTC Regulation 45.2.

(iii) Record retrievability. As prescribed by CFTC Regulation 45.2(e), records required to be kept 

by CMSEF pursuant to CFTC Regulation 45.2 shall be retrievable as follows: Each record 

required by CFTC Regulation 45.2 or any other section of the CEA to be kept by CMSEF shall 

be readily accessible via real time electronic access by the registrant throughout the life of the 

swap and for two years following the final termination of the swap, and shall be retrievable by 

CMSEF within three business days through the remainder of the period following final 

termination of the swap during which it is required to be kept.

(iv) Record inspection. As prescribed by CFTC Regulation 45.2(h), all records required to be kept 

pursuant to CFTC Regulation 45.2 shall be open to inspection upon request by any 

representative of the Commission, the United States Department of Justice, or the Securities 

and Exchange Commission, or by any representative of a prudential regulator as authorized by 

the Commission. Copies of all such records shall be provided, at the expense of CMSEF, to any 

representative of the Commission upon request. Copies of records required to be kept by 

CMSEF shall be provided either by electronic means, in hard copy, or both, as requested by the 

Commission, with the sole exception that copies of records originally created and exclusively 

maintained in paper form may be provided in hard copy only. 

Chapter 3 Participants

Rule 301 Jurisdiction

All applicants of CMSEF must agree to the following in writing:

ALL CLEAR MARKETS SWAP EXECUTION FACILITY PARTICIPANTS AND AUTHORIZED 

USERS, WHETHER SUCH PARTICIPANT OR AUTHORIZED USER ACCESSES CMSEF DIRECTLY 

OR THROUGH AN INTERMEDIARY, AND ANY CLEARING MEMBER WHICH GUARANTEES 

SWAPS TRADED ON CMSEF, HEREBY AGREE THAT THESE RULES ARE BINDING UPON ANY 

SUCH PERSON OR ENTITY AND ITS EMPLOYEES AND CUSTOMERS. IT IS FURTHER AGREED 

THAT THESE RULES ARE APPLICABLE AND THAT SUCH PERSONS ARE SUBJECT TO THE 

JURISDICTION OF CMSEF, THE CFTC, AND ANY RELEVANT SELF-REGULATORY 
CMSEF Rulebook CMSEF Page 18

ORGANIZATION. ALL SUCH PERSONS HEREBY AGREE TO COOPERATE FULLY IN THE EVENT 

CMSEF, THE CFTC, OR A SELF-REGULATORY ORGANIZATION CONDUCTS ANY INQUIRY, 

INVESTIGATION, OR AUDIT OF ANY PARTICIPANT OR ACTIVITY CONDUCTED ON THIS SWAP 

EXECUTION FACILITY.

Rule 302A Trading Privileges

Subject to the requirements, procedures and conditions set forth in this Chapter and any limitation, restriction 

or revocation from time to time imposed by CMSEF, trading privileges and electronic access to the Platform 

shall be offered to Participants. Trading privileges are non-transferable, non-assignable and may not be sold 

or leased. By virtue of obtaining trading privileges, a Participant shall not obtain any equity or other interest 

in CMSEF, including voting rights or rights to receive any dividends or other distributions, whether arising 

from a dissolution, merger, or consolidation involving CMSEF or otherwise. 

Subject to this Rule, CMSEF deny Trading Privileges to any Person: 

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

Rules and Applicable Law; 

(ii) if such Person would bring CMSEF into disrepute; or 

(iii) for such other cause as the CMSEF may decide. 

Subject to this Rule, CMSEF may determine not to permit any Person to keep its Trading Privileges, or may 

suspend, remove or limit such Trading Privileges if such Person: 

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

Privileges have been approved; 

(ii) fails to meet any condition placed by CMSEF on such Trading Privileges; 

(iii) violates any agreement with the CMSEF, a Clearing Member or a DCO; or 

(iv) has summary action taken against it by CMSEF under these Rules. 

In the case of any suspension, revocation or limitation of the Trading Privileges of any Participant pursuant 

to this Rule, CMSEF may also suspend, revoke or limit the Trading Privileges of such Participant’s 

Authorized Users as CMSEF deems necessary to protect other Participants and the integrity of CMSEF.

In the case of any suspension, revocation or limitation of the Trading Privileges of any Authorized User of 

any Participant pursuant to this Rule, CMSEF, in its sole discretion, may also suspend, revoke or limit the 

Trading Privileges of such Participant or such Participant’s other Authorized Users as CMSEF deems 

necessary to protect other Participants and the integrity of the CMSEF. 

Any decision by CMSEF to deny, suspend, revoke or limit the Trading Privileges of any Person will be 

undertaken by CMSEF in an impartial, transparent, fair and nondiscriminatory manner.

Rule 302B Brokered Access to CMSEF 

A Registered Broker, if acting in an agency capacity on behalf of a Participant or Customer, must have an 

executed agreement with such Participant or Customer, in order to enter Orders on behalf of such Participants 

or Customers. All Orders entered by the Registered Broker must be entered in a manner consistent with the 

terms of this agreement. 

A Registered Broker may only enter Orders on behalf of a Participant or Customer’s Proprietary Account. 

Rule 303A Eligibility Criteria for Participants and Access

Access to CMSEF’s Platform to any ECP shall be provided in a fair, impartial and non-discriminatory 

manner. 
CMSEF Rulebook CMSEF Page 19

To be eligible to be a Participant (including being a party to a Block Trade), an applicant must demonstrate 

to the satisfaction of CMSEF that it:

(i) is an ECP that is eligible to enter into Swaps it wishes to trade on CMSEF;

(ii) completed and submitted the Participant Documentation and any other documentation 

requested by CMSEF;

(iii) is validly organized, in good standing, and authorized to trade Swaps on CMSEF;

(iv) is not in bankruptcy;

(v) is not an affiliate of CMSEF;

(vi) holds all necessary licenses and registrations required by applicable law;

(vii) is in compliance with all registration or authorization requirements of its home country, 

(viii) is in compliance with all recordkeeping requirements in these Rules and Applicable Law;

(ix) is not disqualified under Section 8a(2) of the CEA;

(x) distributed the Rules to its Authorized Persons, Authorized Users and Customers; 

(xi) is not an ISV or automated trading system;

(xii) is a reputable business;

(xiii) is not an individual;

(xiv) meets any other CMSEF or CFTC criteria; and

(xv) is not disqualified in any other way.

In order to be admitted, the Participant shall represent in writing that it meets all of the eligibility criteria set 

forth in this Rulebook. Once admitted, the Participant shall continue to comply with all eligibility criteria 

and shall notify CMSEF in writing if it ceases to meet any of the applicable eligibility criteria. CMSEF shall 

monitor all Participants to ensure that each Participant continues to remain an ECP.

Upon request, all Participants shall provide the names of its Customers and Authorized Users to CMSEF.

Each Participant must represent in writing to CMSEF that it believes, based on reasonable efforts, that all of 

the Participant’s Customers for whom the Participant effects transactions on CMSEF are ECPs. The 

Participant shall notify CMSEF immediately if it becomes aware that this representation is no longer true. 

All Participants must be members of or have entered into an agreement with a DCO or registered clearing 

organization to clear Swaps that are executed on or pursuant to the Rules of CMSEF.

A Participant that is a Clearing Member may enter an Order, only if: 

(i) the Participant has entered into any necessary documentation with its counterparty; and

(ii) the Participant otherwise meets the criteria set forth in these Rules.

Participants that are not Clearing Members shall be eligible to enter an Order pursuant to these Rules, only 

if: 

(iii) the Participant (if the Participant is an Account Manager, only if the Account Manager on behalf 

of its client account(s)) can verify on a pre-trade basis that a Clearing Member has assumed the 

financial responsibility to clear such Cleared Swaps for the Participant with the applicable 

DCO;

(iv) the Participant has entered into any necessary documentation with its counterparty; and 

(v) the Participant otherwise meets the criteria set forth in these Rules.

A Participant that is registered as a Swap Dealer must undertake and be able to discharge:

(i) any pre-trade disclosure it may owe to such other Participant when engaging in a Swap 

transaction on a disclosed basis; and

(ii) any due diligence and analysis obligations it may owe to its counterparty. 
CMSEF Rulebook CMSEF Page 20

Rule 303B Eligibility Criteria for Independent Software Vendors

An Independent Software Vendor (ISV) seeking to provide access to CMSEF must be an entity that is duly 

organized and in good standing, have no legal restrictions that would prohibit it from operating as an ISV, 

satisfy CMSEF’s technological integrity requirements, complete the necessary ISV access documentation, 

agree to abide by the Rules and Applicable Law, consent to the jurisdiction of CMSEF, pay the fees that may 

be established by CMSEF from time to time, and not adversely affect CMSEF’s ability to comply with 

Applicable Law. Access to CMSEF’s Platform to any ISV shall be provided in a fair, impartial and nondiscriminating manner. Persons seeking access to CMSEF or a Platform through an ISV must be a Participant 

or Authorized Person specifically authorized by a Participant to have such access.

ISVs affiliated with a SEF or swap broking operation must also agree to grant ISV access to CMSEF or a 

CMSEF affiliate chosen by CMSEF.

Rule 303C Direct Market Access

Only a Sponsoring Broker may sponsor a DMA Customer. 

All trades in Cleared Swaps executed via DMA connection must be guaranteed by a Sponsoring Broker that 

assumes financial responsibility for all activity through the DMA connection.

Each DMA Customer must execute the DMA Customer Documentation as a condition of being granted 

access to CMSEF. 

A Sponsoring Broker shall assist CMSEF in any Investigation into potential violations of the CMSEF Rules, 

CFTC Regulations or the CEA, which occur through or with respect to a DMA connection guaranteed by 

such Sponsoring Broker. Such assistance must be timely and may include requiring any DMA Customer to 

produce documents, to answer questions from CMSEF, and/or to appear in connection with an Investigation. 

A Sponsoring Broker shall suspend or terminate the Trading Access of a DMA Customer or any Authorized 

Trader associated with such DMA Customer if CMSEF determines that the actions of the DMA Customer or 

any of its Authorized Traders threaten the integrity of CMSEF or liquidity of any Swap or violate any CMSEF 

Rule or if the DMA Customer or any of its Authorized Traders fails to cooperate in an Investigation. 

Any trading activity by a DMA Customer using a Participant ID shall be considered to be trading activity by 

the Participant. Such Participant shall be liable for any violations in connection with such trading activity as 

if the Participant had engaged in trading activity.

Rule 303D Withdrawing from CMSEF

A Person that has access to CMSEF may withdraw from CMSEF at its own discretion by providing written 

notice. After withdrawing from CMSEF, the Person’s obligations to CMSEF cease, except the Person 

remains under the jurisdiction of CMSEF with respect to acts and omissions made while such Person had 

access to CMSEF. The Person remains subject to the Participation Agreement, the CMSEF Rulebook and 

any other agreements with respect to acts or omissions that occur while the Person has access to CMSEF.

Rule 304 Authorized Users

All Participants must appoint at least one Employee as an Authorized User. Participants may appoint 

additional Employees, agents or authorized contractors who are individuals to act as Authorized Users. 

Participants must specify whether additional Authorized Users are entitled:

(i) to exercise Trading Privileges on behalf of the Participant; or 
CMSEF Rulebook CMSEF Page 21

(ii) to access CMSEF on “view only” basis. 

To add Authorized Users, Participantsshall notify the CMSEF in the form and manner prescribed by CMSEF. 

All Authorized Users must consent to abide by these Rules and Applicable Law prior to accessing the SEF

through the Participant. CMSEF may also require each Authorized User to satisfy additional requirements 

as CMSEF may prescribe from time to time. All Authorized Users shall be subject to the disciplinary 

authority of CMSEF and subject to possible fine or restriction or revocation of Trading Privileges if they are 

found to have violated any of these Rules, or the CEA and CFTC Regulations, as they apply to swaps trading 

on CMSEF.

CMSEF may, in its sole discretion, revoke, suspend, or limit the designation of a Person as an Authorized 

User, and shall promptly notify the Participant in accordance with the procedures established by CMSEF. 

Participants may at any time revoke an authorization granted to an Authorized User or a User ID granted to 

any other Person by the Participant by providing written notice of such revocation to CMSEF.

Participants shall take immediate and appropriate measures to ensure that, after any such revocation, the 

affected Authorized User shall not have access to the SEF and the affected Person shall not utilize its User 

ID.

All Participants agree to be bound by these Rules and these Rules shall also apply to each of a Participant’s 

Authorized Users. Each Participant is responsible for the actions of its Authorized Users.

Rule 305 CMSEF Platform Security

Each Participant shall:

(i) be solely responsible for controlling and monitoring the use of all User IDs issued to it, or its 

Authorized Users by CMSEF;

(ii) ensure that each Person accessing the SEF using such User IDs is assigned a unique password 

and that each password is used only by the Person to whom it is assigned; and

(iii) notify CMSEF promptly upon becoming aware of any unauthorized disclosure or use of User 

IDs or passwords, or of any other reason for deactivating User IDs or passwords. Each 

Participant shall be bound by any actions taken through the use of its User IDs or passwords, 

including the execution of transactions, whether or not such actions were authorized by such 

Participant or any of its Supervised Persons, or whether or not such transactions are executed 

by an Authorized User of the Participant.

Rule 306 Participant Application Process

CMSEF shall require Persons who wish to become a Participant on CMSEF to:

(i) submit a complete and signed CMSEF User Agreement;

(ii) agree in writing to abide by CMSEF Rules and applicable law; 

(iii) appoint a third party agent acceptable to CMSEF as its US representative if the Person is located 

outside the United States as required under CFTC Regulation 15.05; and

(iv) provide any additional information requested by CMSEF.

CMSEF may conduct an Investigation or verify any information provided by a potential Participant.

CMSEF at its sole discretion, may reject a potential Participant’s application or terminate a Participants status 

if:

(i) such Person is unable to satisfy the eligibility criteria set forth in these Rules;

(ii) such Person is unable to demonstrate that they can adhere to all applicable CMSEF Rules and 

applicable law; and

(iii) would reflect badly upon CMSEF or its other Participants.
CMSEF Rulebook CMSEF Page 22

Rule 307 Authorized Representatives

All Participants shall designate one or more individuals as Authorized Representatives who will be the 

official points of contact for CMSEF. Authorized Representatives shall:

(i) meet the eligibility criteria for Rule 207;

(ii) represent the Participant on CMSEF committees;

(iii) receive CMSEF notices on behalf of the Participant; and

(iv) be empowered to act on behalf of the Participant.

Participants are required to keep CMSEF advised of the most current contact information for their Authorized 

Representatives and to notify CMSEF if an Authorized Representative is no longer qualified under Rule 207.

Rule 308 Customers of Participants

Participants are required to know their Customers and are required to act in the best interests of their 

Customers at all times. Participants found to not to be acting in the best interests of their Customers shall be 

subject to suspension or revocation of their access privileges.

Participants shall not enter an Order in the name of a Customer unless that Customer has entered into a written 

agreement with the Participant authorizing the Participant to enter Orders on terms that may be decided by 

CMSEF from time to time.

Written agreements between Participants and their Customers must contain at least:

(i) the full legal name and identifying information of the Customer;

(ii) a description of the Customer’s business if acting as agent;

(iii) a representation from the Customer that it is an ECP;

(iv) that the Customer consents to the jurisdiction of CMSEF;

(v) that the Customer will comply with any applicable CMSEF Rules;

(vi) that the Customer will maintain and make available for inspection its books and records as 

required to enforce CMSEF Rules as they apply to CMSEF; and

(vii) consent to monitoring of its trading activities by CMSEF and CMSEF’s Regulatory Services 

provider. 

The Customer must notify the Participant if the Customer ceases to meet the applicable ECP criteria.

Rule 309A Minimum Financial Standards 

Each Participant shall:

(i) maintain an account with a Clearing Member that provides for the clearing of all Trades that 

such Participant executes on CMSEF for its own account; and 

(ii) cause each Customer on whose behalf it acts to maintain an account with a Clearing Member 

that provides for the clearing of all Trades that Participant executes on CMSEF on behalf of 

such Customer. 

Each Participant or Authorized User shall stay within the trading limits established for their own account by 

their Clearing Member. Each Participant or Authorized User shall provide notice to CMSEF of such trading 

limits. Each Participant or Authorized User shall provide CMSEF with immediate written notice of any 

change in such trading limits. 

At least once a year, each Participant or Authorized User shall provide CMSEF with a written certification 

that:

(i) Participant is and continues to be an ECP; and 

(ii) as applicable, all the Customers on whose behalf the Participant or Authorized User has 

executed or will execute trades are also ECPs.
CMSEF Rulebook CMSEF Page 23

Rule 309B Minimum Financial Standards Reporting 

Each Participant must maintain all records required by the CEA, CFTC Regulations or these Rules, including 

all records of trading activity in the underlying commodity and related markets as it applies to swaps traded 

on CMSEF. Participants must make this information available at the request of CMSEF, the CFTC or the 

Department of Justice.

Each Participant must notify CMSEF immediately upon becoming aware that it fails to satisfy the minimum 

financial requirements applicable to it, including the requirement to qualify as an ECP. 

Participants shall submit financial and related information to CMSEF or the RSP, as applicable, in the form 

and manner requested. A Participant that is unable to demonstrate to CMSEF that it is in compliance with 

such minimum financial requirements shall not engage in transactions subject to these Rules except for the 

purpose of closing open positions. 

Participants that are registered with any SRO shall comply with all Applicable Law related to minimum 

financial reporting and recordkeeping requirements. Participants shall provide CMSEF with copies of any 

reports they are required to file with the CFTC pursuant to CFTC Regulation 1.12 as it applies to swaps 

traded on CMSEF.

Rule 310 Authority to Impose Restrictions

In order to ensure the protection of CMSEF, Customers and other Participants, CMSEF may impose 

restrictions on any Participants subject to early warning requirements under CFTC Regulation 1.12.

Rule 311 Mandatory Trading

Participants that are Swap Dealers or Major Swap Participants are responsible for complying with the 

mandatory trading requirement as defined under Section 2(h)(8) of the CEA and shall not enter into any 

Required Transaction outside a SEF that lists a Swap, which is Required to Trade.

Rule 312 Uncleared Swaps

Absent a Clearing Exception for an Order, as set forth in Rule 407B, CMSEF only permits Participants to 

place orders for, and execute Cleared Swaps. 

Rule 313 Fees

CMSEF shall set Participant’s fees and payment terms for using the CMSEF platform. CMSEF shall have 

the right, at its sole discretion, to terminate or suspend a Participant’s access or privileges in the event a 

Participant fails to satisfy such payment obligation within thirty (30) days after its due date.

In the event that CMSEF suspends a Participant’s access to CMSEF, a Participant shall continue to be bound 

by any and all other applicable Rules.

Rule 314 Communications between CMSEF and Participants

Each Participant must provide CMSEF with current contact information for each of its Authorized Persons 

and Authorized Users. Such information must include the Authorized Persons or Authorized User’s full 

name, electronic mail address, and a telephone number for use during business hours.

CMSEF may, at its sole discretion, record communications between CMSEF and Participants, provided that 

such recording complies with all applicable regulations. This recording may include, but is not limited to, 

recorded telephone conversations, emails, copies of faxes or other documents exchanged between CMSEF 

and Participants. CMSEF’s RSP’s, as applicable, shall have access to such electronic records in the event it 

is required pursuant to a Regulatory Services Agreement.
CMSEF Rulebook CMSEF Page 24

Rule 315 Notices

CMSEF shall publish on its website and electronically notify each Participant of each addition to, 

modification of, or clarification of, these Rules or of any action to implement any Rules. Participants shall 

be notified prior to CMSEF notifying the CFTC or the effective date. In the event of an Emergency, CMSEF 

shall have the right to take actions without notifying its Participants in advance of such action.

Rule 316 Reserved

Rule 317 Continuing Applicability of Jurisdiction and Rules

In the event CMSEF suspends or terminates a Participant or Authorized User’s access or privileges, such 

Participant or Authorized User shall continue to be subject to and bound by these Rules, Applicable Law, 

and the jurisdiction of CMSEF for all acts arising from before the Participant or Authorized User’s access or 

privileges were terminated. Participants and Authorized Users who have had access or privileges suspended 

shall cooperate with any Investigations or Disciplinary Proceedings related to the termination of their access.

Rule 318 Participant Trading Records

Required Records. Each Participant and Customer shall (i) prepare and keep current full, complete and 

systematic records and information which include all pertinent data and memoranda relating to the complete 

audit trail all of the Trades it executes and attempts to execute on CMSEF as are required to be kept by it 

pursuant to applicable law and regulation including, without limitation, all records required by CFTC 

Regulation 37.404, and (ii) shall keep current such other records and information and adopt such forms as 

CMSEF may from time to time require (“Trading Records”). 

Participants and Customers are required to make available to CMSEF or CMSEF’s RSP (if any) any and all 

position and trading information relating to orders placed and trades executed on CMSEF. 

Participants and Customers are also required to keep and provide records of their trading activity in the index 

or instrument used as a reference price, the underlying commodity and related derivatives markets for any 

swaps they trade on CMSEF as it applies to those swaps traded on CMSEF. CMSEF may limit the application 

this requirement to Participants who conduct substantial trading on CMSEF.

Rule 319 Participant Maintenance of Records

(i) Participants, and as applicable, Authorized Users and Customers that have trading privileges 

on CMSEF, shall maintain all books and records that are required to be maintained pursuant to 

the CEA and CFTC Regulations (including, but not limited to, CFTC Regulations 1.31 and 

1.35). This includes all records related to the trading of Swaps.

(ii) Such books and records shall be kept for the life of each Swap transacted pursuant to these 

Rules and five years following the termination of such Swap. Participants shall make copies of 

such books and records readily accessible to CMSEF for inspection, in each case in the form 

and manner required under the CEA and CFTC Regulations. During the first two years copies 

of such Trading Records shall be readily accessible.

(iii) CMSEF may disclose information it obtains from Participants books and records, to any 

government agency (foreign or domestic), self-regulatory organization or other Person as 

required by law, information concerning or associated with a Participant or other Person if the 

CMSEF believes such disclosure is necessary and appropriate in exercising a legal or regulatory 

function, whether or not a formal arrangement governing the disclosure exists or a request for 

information was made.
CMSEF Rulebook CMSEF Page 25

(iv) Participants shall make Trading Records available to the CFTC upon request and/or permit onsite inspection by duly authorized CFTC personnel.

Rule 320 Legal Certainty for CMSEF Trades 

A transaction entered into on or pursuant to the CMSEF Rules shall not be void, voidable, subject to rescission, 

otherwise invalidated, or rendered unenforceable as a result of: 

(i) a violation by CMSEF of the provisions of Section 5h of the Act or CFTC Regulations;

(ii) any CFTC 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 procedure; or

b. require CMSEF to adopt a specific term or condition, trading rule or procedure, or to 

take or refrain from taking a specific action.

Chapter 4 Trading Standards and Practices

Rule 401 Swaps Traded on CMSEF

CMSEF shall determine which Swaps can be traded pursuant to these Rules and shall submit such Swaps to 

the CFTC as required by the CEA and CFTC Regulations. At this time CMSEF only permits the trading of 

Cleared Swaps, unless a Participant meets the requirements of Rule 407. Only Swaps permitted by these 

Rules may be traded on CMSEF, regardless of the method of execution. 

CMSEF shall determine the rules and procedures for trading Swaps on CMSEF. This includes Rules and 

procedures to:

(i) determine which Swaps can be traded on CMSEF;

(ii) determine the criteria for listing a Swap for trade;

(iii) disseminate bids and offers and other trading information;

(iv) recording and accounting for Swaps traded on CMSEF;

(v) monitoring the trading activities of Participants and their Customers on CMSEF;

(vi) establishing limits on the size and number of Orders that a Participant may enter into CMSEF;

(vii) establish limits on the maximum daily price movements;

(viii) establish a minimum price quoting increment for each Swap; 

(ix) regulate any administrative matters affecting actives on CMSEF; and

(x) All orders shall contain the following information:

a. the name of the Participant

b. the name of Authorized User (Trader)

c. the Contract Name (description)

d. the Price

e. the Quantity

f. the Clearinghouse to which it will be sent for clearing

g. the Customer name, if applicable

h. the Account number

CMSEF may amend, at its sole discretion any of these Rules or procedures at any time. 

Rule 402 Prohibited Trading Activities
CMSEF Rulebook CMSEF Page 26

No Participant or any of its Authorized Users or Account Managers shall use the CMSEF Platform to 

knowingly engage in any of the following abusive trading practices:

(i) wash or enter or execute non-competitive Swaps transactions;

(ii) accommodation trading, improper cross trading, front running, trading ahead of Customers, 

trading against Customers;

(iii) pre-arranged trading (except for Block Trades permitted by Rule 416 or trades following 

communication permitted by Rule 417);

(iv) fraudulent trading or money passes;

(v) disclose information about Customer orders; or 

(vi) take any action, which will disrupt the trading on CMSEF or another SEF.

No Participant or any of its Authorized Users or Account Managers shall manipulate, or attempt to 

manipulate, the prices on CMSEF in any form; including, without limitation, engaging in activity in violation 

of CEA sections 9(a)(2) and 4c(a)(5) and Commission Regulations 180.1(a) and 180.2.

Rule 403 Fraudulent Acts and Misstatements

No Participant or any of its Authorized Representatives, Authorized Users or Account Managers shall 

knowingly:

(i) use CMSEF to engage in any fraudulent acts or schemes to defraud or mislead other 

Participants or CMSEF;

(ii) withhold Customer orders;

(iii) engage in fraudulent trading of any form; or

(iv) engage in an attempt to manipulate the market in any form.

Misstatements by Participants and their Authorized Representatives, Authorized Users or Account Managers

shall be grounds for termination of CMSEF access and privileges.

Rule 404 Misuse of the CMSEF Trading Platform

CMSEF strictly prohibits misuse of the CMSEF trading platform. No Participant or any of its Authorized 

Users or Account Managers shall knowingly engage in unauthorized use or misuse the CMSEF platform or 

to assist any Person or individual from gaining access for the purposes of misuse or take any actions, which 

will be detrimental to CMSEF.

Misuse by Participants and their Authorized Representatives and Authorized Users shall be grounds for 

termination of CMSEF access and privileges.

Rule 405 Trading Hours

CMSEF shall in its sole discretion determine:

(i) the Business Days on which CMSEF will be open for trading;

(ii) the Trading Hours on such Business Days during which CMSEF will be open for trading; and

(iii) the Time Zone in which CMSEF Rules shall apply.

Unless otherwise specified in these Rules:

(i) all references to time shall be based upon local time in New York, New York;

(ii) opening times start on the first second of the minute cited; and

(iii) closing times end on the last second of the minute cited. 

CMSEF reserves the right to modify all of the above without advance notice in the event of an Emergency.

Rule 406 Execution of Swaps on CMSEF

The following are the acceptable methods CMSEF provides Participants in order to execute Swaps on 

CMSEF:
CMSEF Rulebook CMSEF Page 27

(i) Anonymous Central Limit Order Book (Minimum Functionality):

a. Acceptable Orders. The following kinds of orders may be entered into the Central Limit 

Order Book (CLOB) of the CMSEF Platform.

I. Limit Orders. A “Limit Order” is an order to buy or sell a contract at a specified 

price or better.

II. Market Orders. A “Market Order” is an order to purchase or sell a contract at the 

best price on the CMSEF Platform at the time the order is entered on the CMSEF 

Platform (only available via fix API connection).

III. Fill or Kill. A “Fill or Kill” Order must be filled entirely or the Order is cancelled. 

IV. Immediate or Cancel. An “Immediate or Cancel” Order must be filled instantly 

or the Order is cancelled. 

b. Good until Time. An Order may be entered such that the Order is cancelled at a specific 

time if it is not executed (note that this feature is not available if accessing the system 

through the CMSEF website).

c. Entry of Orders. An anonymous order may be submitted directly by the Participant for its 

own account or on behalf of a Customer on whose behalf such a Participant is authorized 

to act. Each order on the CLOB must contain the following information:

I. Bid/Offer Indication

II. Price

III. Notional Amount 

IV. Instrument 

d. Time Delay Requirement. All Participants that are a broker or dealer and who, in 

connection with the execution of a Required Transaction, seek to either execute against a 

Customer’s order or execute two Customers against each other through the CMSEF’s 

CLOB shall use the following procedure:

I. If a Participant seeks to execute an order against a Customer order, then such 

Participant must enter the Customer order into the CMSEF CLOB and then wait 

at least 15 seconds before entering the Participant’s order; or

II. If a Participant seeks to execute two Customer orders against each other, then such 

Participant shall enter one side of the trade into the CMSEF CLOB and wait at 

least 15 seconds before entering the second side of the trade for execution.

e. Time Delay Exception. The time delay requirement does not apply to DMA Orders where 

a broker or dealer does not engage in some form of pre-arrangement or pre-negotiation of 

such order.

f. Price-Time Priority. All prices received in the CLOB are sorted based on strict price-time 

priority protocol.

g. Trading Limits. Participants shall only enter orders for such Contracts and for such 

amounts as is permitted within the scope of their trading limits.

h. Matching of Orders. Orders submitted will be matched as follows:

I. Market Orders. Matching orders will be matched against all pending bids and 

offers in accordance with a price-time priority protocol. If any portion of the 

market order is not filled, the unfilled remainder will be canceled.

II. Limit Orders. Limit orders will be matched with bids and offers that have a price 

that is at or better than the price of the limit order, in accordance with the pricetime protocol. If any portion of the limit order is not filled, the unfilled portion of 

the order will remain in the market at the price and time that the order was entered. 

i. Unfilled Orders.

I. After the close of trading each Trading Day, all unfilled bids and offers will be 

cancelled

II. Upon a Participant’s logging out from the CMSEF Platform during the Trading 

Day, all unfilled bids and offers entered by such Participant will be cancelled.

j. Matching Algorithm. The CMSEF matching engine operates as a market order/limit order 

system. Orders are handled as follows:

I. Market orders are executed at the top of the market and can be matched with 

multiple standing orders at different prices if necessary to fill the market order 

volume;
CMSEF Rulebook CMSEF Page 28

II. Limit orders will execute at the requested price or better; and

III. Any unmatched limit order (or portion of an order) becomes a standing order in 

the system.

k. Counterparty Anonymity.

I. Except as otherwise required under the Act or the Commission’s regulations, 

CMSEF shall not directly or indirectly, including through a third-party service 

provider, disclose the identity of a counterparty to a Swap that is executed 

anonymously and intended to be cleared.

II. CMSEF shall establish and enforce rules that prohibit any person from directly or 

indirectly, including through a third-party service provider, disclosing the identity 

of a counterparty to a Swap that is executed anonymously and intended to be 

cleared.

III. For purposes of subsections I and II above, ‘‘executed anonymously’’ shall 

include a Swap that is pre-arranged or pre-negotiated anonymously, including by 

a Participant of CMSEF.

IV. For a package transaction that includes a component transaction that is not a Swap 

intended to be cleared, disclosing the identity of a counterparty shall not violate 

subsections I and II above. For purposes of this paragraph, a ‘‘package 

transaction’’ consists of two or more component transactions executed between 

two or more counterparties where:

1. Execution of each component transaction is contingent upon the 

execution of all other component transactions; and

2. The component transactions are priced or quoted together as one 

economic transaction with simultaneous or near-simultaneous execution 

of all components.

V. This “Counterparty Anonymity” section shall apply to all Required Transactions 

and shall apply to Permitted Transactions beginning on July 5, 2020.

(ii) Request for Quote (RFQ)

a. Orders Entry. Participants may submit RFQ inquiries on a name disclosed basis. Unless 

the Participant is submitting an RFQ pursuant to Rule 416, submission of RFQ inquiries 

must be sent to minimum of three counterparties; none of which shall be: 

I. affiliated of or controlled by the counterparty requesting the RFQ inquiry; or 

II. affiliates of or controlled by each other.

b. Bids and Offers. At the same time that the requester receives the first responsive bid or 

offer, CMSEF shall communicate to the requester any firm bid or offer pertaining to the 

same instrument resting on the CLOB.

c. Responses. CMSEF shall provide the requester with the ability to execute against any firm 

CLOB bids or offers along with any responsive orders to the RFQ. 

d. Execution of Orders. The requester may accept any response to the RFQ upon receipt. 

After the requester accepts an RFQ, the responding party is given a “last look” in order to 

execute the Order. 

e. Trading Protocols. CMSEF will ensure that its trading protocols provide each Participant

with equal priority in receiving RFQs and in transmitting and displaying for execution 

responses to RFQs. 

f. Submitting a Request. Each RFQ shall include the following information regarding the 

Swap that the Participant is requesting quotes:

I. Product

II. Pay/Receive Indication

III. DCO

IV. Currency

V. Tenor

VI. Frequency

VII. Day Count

VIII. Instrument(s)

IX. Effective Date
CMSEF Rulebook CMSEF Page 29

X. End Date

XI. Business Day Conversion

XII. Calendar

XIII. Roll Conversion

XIV. Notional Amount

XV. Day Count Fraction

XVI. Clearing FCM 

g. Response to RFQ. Each response to an RFQ must contain a price.

h. Last Look. After the RFQ requester receives a quote, the requester will be able to execute. 

If the requester executes the quote, the Participant that submitted the quote will have a “last 

look” where such Participant will confirm the quote. The last look will expire in 30 seconds 

and until the Participant confirms the quote the requester may cancel the quote. 

Customer. The Customer requesting a quote on the RFQ system must be identified by the 

Participant entering the request, regardless if the Customer is the Participant or an 

Authorized User. 

(iii) Voice Order-Entry. Notwithstanding Rule 406(iii), a Participant may enter any order on the 

CLOB (Rule 406(i)) or RFQ (Rule 406(ii)) systems through communication with a Voice 

Agent. In this manner, any action that is permissible on the CLOB or RFQ may be taken on 

behalf of the Participant by the Voice Agent at the direction of the Participant.

(iv) Priorities of Orders: For any bid or offer on the CLOB, and for any RFQ or response to an 

RFQ, each Participant shall be given equal priority in terms of when such actions shall be 

displayed to the relevant Participants on CMSEF. Each order submitted on the SEF shall 

include the following:

a. The Legal Entity Identifier of the Participant or Client placing the order;

b. A yes/no indication of whether the Participant or Client is a swap dealer with respect to the 

product with respect to which the order is placed.

c. A yes/no indication of whether the Participant or Client is a major swap participant with 

respect to the product with respect to which the order is placed.

d. A yes/no indication of whether the Participant or Client is a Financial Entity.

e. A yes/no indication of whether the Participant or Client is a U.S. Person.

f. If applicable, an indication that the Participant or Client will elect the clearing requirement 

exception in CEA section (2)(h)(7) for any swap resulting from the order.

(v) Brokered Orders: Participants may enter an Order through a Registered Broker for which the 

Participant has entered into an agreement that permits the Registered Broker to act on behalf of 

the Participant. Such Order are treated as if the Order was entered directly by the Participant, 

under the rules of CMSEF.

Rule 407A Required Transactions

Required Transactions that do not qualify as a Block Trade or a Clearing Exception shall be executed on CMSEF 

according to Rule 406.

Rule 407B Permitted Transactions

Permitted Transactions shall be executed on CMSEF according to Rule 406, with the following qualifications:

(i) Permitted Transactions may be entered via RFQ to any number of Participants; and 

(ii) Permitted Transactions negotiated off-SEF may be entered for execution and clearing by the 

staff of the SEF directly, at the direction of a Registered Broker. 
CMSEF Rulebook CMSEF Page 30

Rule 407C Clearing Exception for Swaps 

Each Participant wishing to execute an Order under a Clearing Exception on CMSEF must submit all 

documentation required by Part 50 of the CFTC Regulations (the Clearing Exception Form) prior to placing 

an Order subject to the Clearing Exception. A Participant shall submit all required documentation supporting 

its eligibility (or the eligibility of its relevant Authorized User, as applicable) for the Clearing Exception. 

Any Order subject to the Clearing Exception shall be rejected if an applicable Clearing Exception Form is 

not on file with CMSEF. 

The Clearing Exception may only be used for Orders that are not executed on the CLOB. 

Rule 408 Cancellation of Orders by Participants

Participants may cancel any Order, which has been entered on CMSEF unless it has been executed or expired. 

Rule 409 Modification or Cancellation of Orders and Trades by CMSEF

Before an Order is sent to a Clearinghouse, CMSEF may cancel any Order that, if allowed to remain, would 

have meaningful adverse effects on the integrity of the market, if the Order is entered in a price outside a 

range known as the Acceptable Price Range, or a CMSEF system malfunction. The Acceptable Price Range 

shall be determined by CMSEF based on the market data available to CMSEF. It may change from time to 

time and shall be published on the CMSEF website. 

Once a trade has been cleared by a Clearinghouse, CMSEF may adjust trade prices or cancel if there is a 

CMSEF system malfunction or with the consent of both Counterparties. Such modification or cancellation 

shall be effected by a pre-arranged trade or trades, consistent with CFTC No-Action Letter No. 15-24

(published by the CFTC on April 22, 2015; relief expires June 15, 2016). 

At any time, CMSEF may halt or suspend trading on its platform in order to maintain a fair and orderly 

market, as required by these Rules. Any halt or suspension in trading shall be communicated to Participants 

as soon as practicable. 

If CMSEF takes action pursuant to this Rule, it will give prompt notice to affected Participant or Participants. 

Rule 410A Pre-Execution Credit Checks

CMSEF will verify prior to the execution of any Order that the Participants or Authorized User have sufficient 

credit limits with their Clearing Members so that the trade will be able to be accepted by the Clearing House 

for Clearing. CMSEF will not permit Participants or Authorized User to execute transactions if their credit 

limits are insufficient. 

All Orders will be prescreened on an order-by-order basis. A Clearing Member may reject an Order preexecution or post-execution. If an Order is rejected by the Clearing Member post-execution, such Order shall 

be void ab initio.

It is the responsibility of the Participants or Authorized User to evaluate the credit quality of their Prime 

Broker, FCM, and or Clearinghouse, and their counterparty on uncleared swaps.

Rule 410B Confirmation of Agreements Between Counterparties

The terms of the Swap, which shall serve as a confirmation of the transaction, will be sent at the time of 

execution of the Swap. Specifically, upon the execution of a Swap, CMSEF will provide each counterparty 

to a transaction that is entered into on or pursuant to the rules of the SEF with a written record of all of the 
CMSEF Rulebook CMSEF Page 31

terms of the Swap, which shall legally supersede any previous agreement and serve as a confirmation of the 

transaction; provided, that specific Customer identifiers for accounts included in bunched orders involving 

Swaps will not be included in confirmations provided by CMSEF if the applicable requirements of CFTC 

Regulation 1.35(b)(5) are met. Confirmations of Swaps delivered to counterparties shall not include any 

information that violates Rule 406(i)(k).

Rule 411 Cleared Swaps

The following does not apply with respect to swaps subject to the clearing requirement exception in CEA 

section (2)(h)(7) for which a counterparty has elected such exception. 

Each Cleared Swap shall be cleared through the Clearing House indicated in the Swap Specification in 

accordance with the CEA and the CFTC Regulations.

For each Cleared Swap a Participant expects to enter into via the SEF Platform or subject to CMSEF Rules, 

the Participant or a Client or Customer of the Participant must establish a clearing account with the Clearing 

House or with a Clearing Member of the Clearing House, in each case, designated in the Swap Specification 

for such Cleared Swap.

Submission of executed trades to the applicable DCO shall be the responsibility of CMSEF.

Rule 412 Position Limits and Accountability

To reduce the potential threat of market manipulation or congestion, SEF shall adopt for each of the contracts 

of the facility, as is deemed necessary and appropriate by SEF, position limitations or position accountability 

levels for speculators.

Rule 413A Position Limits

In accordance with CFTC Regulations, CMSEF may from time to time adopt position limits and grant 

exceptions from position limits as may be necessary.

CMSEF shall not set position limits in excess of CFTC limits.

In the event CMSEF adopts position limits, Participants may request and exemption from such limits by 

filing an application with CMSEF’s Market Monitor Team. Participants may not exceed such limits until 

they have received Written approval from CMSEF. Applications to exceed position limits must be filed in a 

form acceptable to CMSEF and must at a minimum include:

(i) the name and contact information of the Participant; 

(ii) a description of the exemption being requested;

(iii) whether the exemption is for 

a. bona fide hedging as defined in CFTC Regulation §1.3(z)(1),

b. risk management, or 

c. arbitrage/spread positions; and

(iv) a description of the complete underlying exposure related to the exemption request.

In the event that CMSEF agrees to provide the requested exemption, the Participant must agree to:

(i) provide CFSEF with any information or documentation requested by CMSEF; 

(ii) to comply with any and all terms, conditions or limitations imposed by CMSEF;

(iii) permit CMSEF modify or revoke the exemption at any time; 

(iv) agree to initiate and liquidate positions in an orderly manner; and 

(v) agree to immediately notify CMSEF of any material change to the information provided to 

CMSEF.

CMSEF reserves the right to take any actions necessary in response to any Emergency situation that may 

arise including forcing any Participant to reduce any outstanding positions.
CMSEF Rulebook CMSEF Page 32

Rule 413B Position Accountability 

All Participants shall be bound by CMSEF’s position accountability levels for Required Transactions. 

CMSEF will set these levels in accordance with appropriate CFTC Regulations. 

In the event a Participant holds or controls aggregate positions in a Swap in excess of CMSEF position 

accountability levels, the Participant shall be subject to the following: 

(i) The Participant shall promptly provide any information requested by CMSEF concerning size 

and type of the position and any efforts to hedge the position.

(ii) The Participant shall, if directed by CMSEF, liquidate in an orderly manner, or not increase 

further the positions, which exceed CMSEF’s position accountability levels. 

(iii) The Participant shall, upon request by CMSEF, identify the beneficial owner and or any 

controlling parties for such positions.

CMSEF reserves the right to take any actions necessary in response to any Emergency situation that may 

arise, including forcing any Participant to reduce any outstanding positions.

Rule 414 Real-Time Market Monitoring and Surveillance

Real-time monitoring of trading on CMSEF for compliance purposes shall be conducted by CMSEF’s 

Compliance Department. CMSEF will monitor and surveil participants and market data on an ongoing and 

real time basis to ensure compliance with all applicable laws, rules, regulations and the CMSEF rulebook. If 

CMSEF believes a violation may be occurring or about to occur CMSEF may take actions including, but not 

limited to, halting a Participant's ability to execute trades on CMSEF.

(i) CMSEF shall monitor and evaluate data on:

a. an ongoing basis in order to detect and prevent manipulation, price distortion, and where 

necessary disruptions in the cash-settlement process, and

b. general market data in order to detect and prevent manipulative activity that would result 

in the failure of the market price to reflect the normal forces of supply and demand, unusual 

trading volumes, and impairments to market liquidity.

(ii) In addition, CMSEF may protect market integrity through use of the following safeguards to prevent 

the entry of orders in any of the following circumstances:

a. pre-trade quantity limits on individual orders to screen for order quantities not within 

acceptable parameters;

b. pre-trade price collars to screen for orders outside of current market conditions; and

c. pre-trade check to screen for risk based limits set by the clearing member.

Such pre trade quantity and risk limits shall be posted on CMSEF’s web site.

Rule 415 Mishandled Customer Orders

CMSEF shall not be held liable for any Customer Orders, which are mishandled by Participants. Participants 

will be solely responsible for all remedial actions in the event a Participant mishandles a Customer Order.

Rule 416A Block Trades 

CMSEF’s appropriate minimum block sizes shall be consistent with appropriate minimum block sizes set by 

the CFTC. CMSEF shall not permit Participants to execute Swaps as Block Trades below the appropriate 

minimum block size set by the CFTC. 
CMSEF Rulebook CMSEF Page 33

The following Block Trade Rules shall apply to Block Trades executed on CMSEF:

(i) Block Trades shall be trades that are at or in excess of the appropriate minimum block size set by 

the CFTC and may be executed on CMSEF by RFQ by requesting a price from fewer than three 

RFQ Receivers.

(ii) Block Trades must trade at prices that are fair and reasonable in the context of:

(i) market conditions;

(ii) other transactions in the market at the time; and

(iii) the nature of the Participants to the Block Trade.

(iii) Block Trades shall not affect resting orders.

(iv) Participants shall not aggregate Orders for different accounts to create Block Trades unless 

permitted by CFTC Regulation 43.6(h)(6).

(v) Block Trades executed off CMSEF must be reported by the Participants to CMSEF as soon as 

practicable but no later than five (5) minutes before the time such Block Trade would be reported 

by an SDR. The actual notional or principal amount of the Block Trade shall be reported to CMSEF, 

which shall report the Block Trade as set forth in CFTC Regulation 43.6 and Appendices B, D, E, 

and F to Part 43 of the CFTC Regulations. 

CMSEF reserves the right to investigate all Block Trades to ensure that they comply with all applicable 

CMSEF Rules and CFTC Regulations.

A Participant transacting a Block Trade on behalf of a Customer must receive prior written instruction or 

consent from the Customer in order to do so. Such instruction or consent may be provided in the power of 

attorney or similar document by which the customer provides the person with discretionary trading authority 

or authority to direct the trading in its account.

The parties to a publicly reportable swap transaction on CMSEF that has a notional amount at or above the 

appropriate minimum block size shall notify CMSEF of its election to have the publicly reportable swap 

transaction treated as a Block Trade. CMSEF, pursuant to these Rules, shall notify the SDR of such a Block 

Trade election when transmitting swap transaction and pricing data to such SDR in accordance with CFTC 

Regulation 43.3(b)(1).

Rule 416B Execution of Block Trades Through RFQ

Block Trades shall only be executed on CMSEF using the RFQ system, and only if the conditions of CFTC 

No-Action Letter No. 15-60 (published by the CFTC on November 2, 2015; relief expires November 15, 

2016) are met. These requirements are as follows:

(i) the Block Trade must meet the definition found in this Rulebook, and must be executed under 

the Rules of CMSEF;

(ii) a pre-trade credit check must be completed at the time the order for a block trade enters the 

Block Trade on the RFQ system; and

(iii) all Block Trades are subject to void ab initio requirements if swap is rejected on the basis of 

credit. 

Rule 417A Pre-Trade Communications

A Participant or Authorized User, acting on behalf of a Customer, must have the Customer’s consent before 

engaging in pre-arrangement communication with a counterparty. The Participant or Authorized User may 

not disclose such communications to any third party and may not use such communications to enter into 

alternative transactions other than the transaction permitted by this Rule. In any case in which a transaction 

is agreed upon as the result of pre-arrangement communication, the Participant or Participants must allow a 
CMSEF Rulebook CMSEF Page 34

15-second delay between orders entered on the SEF. There is no mechanism on the CMSEF system that

prevents a trade from being submitted before such 15-second delay has occurred and therefore any applicable 

Order that is executed without the delay shall be a violation of these Rules and CFTC Regulations. 

Rule 417B Information Obtained in Pre-Trade Communications

All Participants or Authorized Users party to the pre-arrangement communication permitted by Rule 417A 

are prohibited from disclosing such communications to any third party and may not use such communications 

to enter into alternative transactions other than the transaction permitted by this rule.

Rule 418A Dissemination of Prices and Trading Information

CMSEF shall publish information daily on its website regarding prices, volume, and other data as required 

by the CFTC Regulations. 

CMSEF will also make available a central pricing screen on CMSEF with a real-time view of resting bids 

and offers.

CMSEF may make available to Participants an indicative, non-attributed pricing page on CMSEF for certain 

types of Swaps of the most commonly traded tenors within such type of Swap.

CMSEF shall choose, at its sole discretion, an SDR. As required by CFTC Regulation 37.901(a), CMSEF 

shall transmit swap transaction and pricing data for each Swap executed pursuant to these Rules to the 

appropriate SDR in the form and manner required. At this time, all trades on CMSEF will be reported to 

DTCC Data Repository (U.S.) LLC.

CMSEF may provide such swap transaction and pricing data to Participants and Authorized Users no earlier 

than the time it transmits such information to an SDR and in a form that does not disclose the identities, or 

otherwise facilitate identification, of the parties to the Swap.

Rule 418B Publicly Reportable Swap Transactions 

Pursuant to Part 43 and Appendix A to Part 43 of the CFTC Regulations and Part 45 and Appendix 1 to Part 

45 of the CFTC Regulations, CMSEF shall transmit swap transaction and pricing data and minimum primary 

economic terms to a registered SDR as soon as technologically practicable after the publicly reportable swap 

transaction has been executed on or pursuant to the rules of CMSEF.

CMSEF and Participants shall not submit or agree to submit a cancellation or correction for the purpose 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 in Part 43 of the 

CFTC Regulations. 

Rule 418C Reporting Counterparties 

For all swaps executed on CMSEF, each swap counterparty shall provide sufficient information to CMSEF 

to enable CMSEF to report all Required Swap Creation Data to enable CMSEF to report all Required Swap 

Creation Data. To achieve this, each Participant placing an order with respect to any Swap traded on CMSEF 

must include in the order the information required by CMSEF Rule 406(iii). 

In the event that the Reporting Counterparty cannot otherwise be determined because either (a) both 

counterparties are swap dealers, (b) both counterparties are major swap participants, (c) both counterparties 

are a financial entities as defined by Section 2(h)(7)(C) of the CEA but not a swap dealer or a major swap 

participant, or (d) both counterparties are neither a swap dealer nor a major swap participants nor a financial 

entity as defined by Section 2(h)(7)(C) of the CEA, then the reporting counterparty shall be the buyer. 
CMSEF Rulebook CMSEF Page 35

All Reporting Counterparties are required to notify CMSEF in the event the Reporting Counterparty becomes 

aware that an error or omission in reporting has occurred. 

Rule 419 Emergency Rules

In the event of an Emergency, CMSEF may implement temporary Emergency procedures and Emergency 

Rules, subject to the applicable provisions of the CEA and CFTC Regulations. Implementation of Emergency 

Rules shall be done in consultation with the CFTC. Emergency Rules may require or authorize CMSEF, the 

Board, any committee of the Board, the President, or any other Officer to take actions necessary or 

appropriate to respond to the Emergency, including the following actions: 

(i) suspending or curtailing trading or limiting trading to liquidation only (in whole or in part)

(ii) extending or shortening the last trading date for Swaps; 

(iii) ordering the fixing of a settlement price; 

(iv) ordering the liquidation or transfer of an open position in any Swap, or the 

(v) reduction of positions; 

(vi) extending, limiting or changing the Trading Hours; 

(vii) imposing or modifying intraday market restrictions; 

(viii) transferring Customer contracts and the margin in an Emergency; 

(ix) imposing special margin requirements; 

(x) extending or shortening the expiration date of a Swap; 

(xi) altering any Swap’s settlement terms and conditions; 

(xii) imposing or modifying price limits; and/or

(xiii) imposing, modifying or reducing position limits.

Before any Emergency Rule may be adopted and enforced, a required vote of the Board must approve the

implementation of such Emergency Rule at a duly convened meeting requested by the President or any other 

Officer. Directors may attend such a meeting by teleconference. Each Director participating in such meeting

shall be subject to CMSEF’s Conflict of Interest Rules. If the CEO or CMSEF determines that Emergency 

Rules must be implemented with respect to an Emergency before a meeting of the Board can reasonably be 

convened, then the CEO shall have the authority, without Board action, to implement any Emergency Rules 

with respect to such Emergency that he or she deems necessary or appropriate to respond to such Emergency. 

Whenever CMSEF, the Board, any committee of the Board, or the President takes actions necessary or 

appropriate to respond to an Emergency (including the actions set forth above), an Authorized Representative 

of CMSEF will post a Notice to Participants regarding such Emergency, as soon as practicable. When the 

Board, any committee of the Board or the CEO determines that the Emergency is no longer in effect, 

permitting the SEF operated by CMSEF to resume normal functioning; any such actions responding to an 

Emergency will be terminated. 

CMSEF will use reasonable efforts to notify the CFTC prior to implementing, modifying or terminating an 

Emergency Rule. If such prior notification is not possible or practicable, CMSEF will notify the CFTC as 

soon as possible or reasonably practicable, but in all circumstances within twenty-four (24) hours of the 

implementation, modification or termination of such Emergency Rule. 

Upon taking any action in response to an Emergency, CMSEF will document the decision-making process 

related to such action. Such documentation will be kept for at least five years following the date on which 

the Emergency ceases to exist or to affect the SEF operated by CMSEF, and all such documentation will be 

provided to the CFTC upon request. 
CMSEF Rulebook CMSEF Page 36

Chapter 5 Disciplinary Rules

Rule 501 General 

All Participants, Authorized Persons, Authorized Users, Clearing Members, and Participant’s Customers 

shall be subject to the CMSEF’s jurisdiction. Participants, Authorized Persons, Authorized Users, Clearing 

Members, and Participant’s Customers are subject to this Chapter 5 if they, or with respect to a Participant, 

any other Person using any of its User IDs, are alleged to have violated, or to have aided and abetted a 

violation of, or are about to violate, any Rule or any provision of Applicable Law for which CMSEF possesses 

disciplinary jurisdiction. 

CMSEF, through its Compliance Department and the Disciplinary Panel, will conduct Investigations, 

Disciplinary Proceedings and appeals from Disciplinary Proceedings, summary impositions of fines, 

summary suspensions or other summary actions in accordance with this Chapter. 

No CMSEF member of the Board, Officer, Employee, or Agent will interfere or attempt to interfere with any 

Investigation, disciplinary hearing, or summary imposition of a judgment or other summary action.

CMSEF shall permit Participants, Authorized Persons, Authorized Users, Clearing Members, or Participant’s 

Customers to be represented by counsel during any Investigation, disciplinary hearing, or imposition of a 

fine or summary judgment.

CMSEF may hold a Participant or Authorized User liable for, and impose sanctions against such Participant 

or Authorized User for such Person’s own acts and omissions, or those of its agents, representatives or any 

Person or API using a User ID of such Participant or Authorized User. CMSEF may additionally hold a 

Participant liable for the acts and omissions of its Authorized Users. 

CMSEF may delegate any or all of its powers or responsibilities under this Chapter 5 to the RSP, which may 

take any action on behalf CMSEF that the CMSEF is permitted to take hereunder; provided, however, that 

the CMSEF shall retain supervisory authority with respect to such powers and responsibilities and will 

document instances where its actions differ in any material respect from those recommended by the RSP. 

Rule 502 CMSEF’s Right to Inspect Books, Records and Systems

CMSEF’s Compliance Department and CMSEF’s RSP (if any) will have the right to inspect the books, 

records, systems, equipment, and software of Participants, Authorized Persons, Authorized Users, Clearing 

Members and Participant’s Customers.

CMSEF’s Compliance Department and CMSEF’s RSP (if any) will have the right to obtain position and 

trading information directly from Participants as necessary to perform CMSEF’s Oversight functions as set 

forth in this Rulebook. 

Rule 503 Investigations

CMSEF’s Compliance Department or Disciplinary Panels will investigate any matter within CMSEF’s 

disciplinary jurisdiction of which it becomes aware. The Compliance Department will determine the nature 

and scope of its Investigations within its sole discretion and will function independently of any commercial 

interests of CMSEF. An Investigation will be initiated if the Compliance Department or other CMSEF 

Departments determines that a violation of CMSEF may have occurred. The Compliance Department may 

informally contact Participants in order to obtain information. 

Notwithstanding the above, CMSEF will commence an Investigation at the request of the CFTC. 

CMSEF’s Compliance Department has the authority to: 
CMSEF Rulebook CMSEF Page 37

(i) initiate and conduct Investigations; 

(ii) prepare Investigation Reports and make recommendations concerning initiating Disciplinary 

Proceedings; 

(iii) allege violations within CMSEF’s disciplinary jurisdiction; 

(iv) prosecute alleged violations within CMSEF’s disciplinary jurisdiction; and

(v) represent CMSEF on an appeal to an Appeal Panel of any Disciplinary Proceeding, summary 

imposition of fines, summary suspension or other summary action. 

Each Participants, Authorized Persons, Authorized Users, Clearing Members, and Participant’s Customers: 

(i) is obligated to appear, testify and respond in writing to interrogatories within the time 

period required by the Compliance Department in connection with any Rule, any 

Investigation; or any preparation by and presentation during a Disciplinary Proceeding or 

appeal from a decision in a Disciplinary Proceeding, summary imposition of fines, 

summary suspension or other summary action by CMSEF; 

(ii) is obligated to produce books, records, papers, documents or other tangible evidence in his 

possession, custody or control within the time period required by the Compliance 

Department in connection with any Rule, any Investigation, any preparation by and 

presentation during a Disciplinary Proceeding or appeal from a decision in any Disciplinary 

Proceeding, summary imposition of fines, summary suspension or other summary action 

by CMSEF; and 

(iii) may not impede or delay any Investigation, Disciplinary Proceeding, appeal from a 

Disciplinary Proceeding, summary imposition of fines, summary suspension or other 

summary action. 

Rule 504 Reports of Investigations 

CMSEF’s Compliance Department will maintain a log of all Investigations and their disposition. The 

Compliance Department will prepare a written report of each Investigation (the “Investigation Report”), 

regardless of whether the evidence gathered during any Investigation forms a reasonable basis to believe that 

a violation within CMSEF’s jurisdiction has occurred or is about to occur or whether the evidence gathered 

results in closing the matter without further action or through summary action. 

Any Investigation Report will include the reasons for initiating the Investigation (including a summary of the 

complaint, if any), all relevant facts and evidence gathered and the analysis, conclusions and recommendation 

of the Compliance Department. For each potential respondent, the Compliance Department will recommend 

either: 

(i) closing the Investigation without further action; 

(ii) entering into a summary action;

(iii) resolving the Investigation through an informal disposition, including the issuance by the 

Compliance Department of a warning letter (provided that no more than one warning letter for 

the same violation may be issued to the same potential respondent during a rolling 12-month 

period);

(iv) initiating Disciplinary Proceedings; or 

(v) negotiating a settlement. 

An informal disposition (including the issuance of a warning letter by the Compliance Department) will not 

constitute a finding of a violation or a sanction. 

CMSEF’s Compliance Department shall provide the Investigation Report to the Chief Compliance Officer, 

who shall determine whether the Investigation Report is complete.

CMSEF’s Compliance Department shall complete each Investigation in a timely manner and, absent 

mitigating factors, no later than 12 months after the date that such Investigation was opened. 

Rule 505 Opportunity to Respond to Investigation Reports 
CMSEF Rulebook CMSEF Page 38

After completing the Investigation Report, if the evidence gathered during an Investigation forms a 

reasonable basis to believe that a violation within CMSEF’s jurisdiction has occurred or is about to occur,

CMSEF’s Compliance Department may, upon approval of the Chief Compliance Officer, notify each 

potential respondent that the Compliance Department has recommended formal disciplinary charges against 

each such potential respondent. 

The potential respondents shall be notified in writing and shall have fourteen days to respond, unless 

extenuating circumstances require a response sooner.

CMSEF’s Compliance Department may allow a potential respondent to propose a settlement of the matter or 

to submit a written statement explaining why either a Disciplinary Proceeding should not be instituted or one 

or more of the potential charges should not be brought. The potential respondent shall submit such written 

statement within the time limit established by the Compliance Department. 

Rule 506 Review of Investigation Reports 

CMSEF’s Compliance Department will, within 30 days, take one of the following actions: 

(i) If CMSEF’s Compliance Department determines that no reasonable basis exists to believe that a 

violation within CMSEF’s jurisdiction has occurred or is about to occur, it may direct that no 

further action be taken. Upon such determination, the Compliance Department will provide a 

written statement setting forth the facts and analysis supporting the decision. 

(ii) If CMSEF’s Compliance Department determines that Disciplinary Proceedings are unwarranted, it 

may issue a warning letter setting forth, in writing, the facts and analysis supporting the decision. 

(iii) If CMSEF’s Compliance Department determines that additional inquiries or evidence is needed to 

decide whether a reasonable basis exists to believe that a violation within CMSEF’s jurisdiction 

has occurred or is about to occur, it will continue the Investigation. 

(iv) If CMSEF’s Compliance Department determines that a reasonable basis exists to believe that a 

violation within CMSEF’s jurisdiction has occurred or is about to occur, the potential respondent 

will be served with a notice of charges and proceed in accordance with this Chapter 5. 

Rule 507 Warnings

CMSEF’s Compliance Department is authorized to issue a warning letter to an individual or entity subject 

to an Investigation. If a warning letter is issued by the CMSEF’s Compliance Department, it shall not be 

considered an indication that a violation has occurred. Only one warning letter may be issued to the same 

individual or entity per violation per year.

Rule 508 Notice of Charges 

If CMSEF’s Compliance Department authorizes Disciplinary Proceedings pursuant to these Rules, it will 

prepare, and serve in accordance with these Rules, a notice of charges. 

A notice of charges will: 

(i) state the acts, practices or conduct in which the respondent is alleged to have engaged; 

(ii) state the Rule alleged to have been violated or about to be violated; 

(iii) advise the respondent of its right to a hearing and its right to be represented by legal counsel 

or any other representative of its choosing (other than a Director, Officer or Employee of 

CMSEF, any member of the Disciplinary Panel or any Person substantially related to the 

Disciplinary Proceedings such as a material witness or other respondent) in all succeeding 

stages of the disciplinary process; 
CMSEF Rulebook CMSEF Page 39

(iv) state the period of time within which the respondent can request a hearing on the notice of 

charges, which will not be less than 20 days after service of the notice of charges; 

(v) advise the respondent that any failure to request a hearing within the period stated, except 

for good cause, will be deemed to constitute a waiver of the right to a hearing; and 

(vi) advise the respondent that any allegation in the notice of charges that is not expressly 

denied will be deemed to be admitted. 

Rule 509 Service of Notice of Charges 

CMSEF shall serve notice of charges or other documents contemplated to be served pursuant to this Chapter 

5 to a contact designated by each Participant. CMSEF may serve such notice (and service shall be deemed 

complete) to the respondent personally, or by deposit in the United States mail, postage prepaid, via registered 

or certified mail addressed to the respondent at the address as it appears in records of CMSEF. Notice of 

Charges may also be served by electronic mail to the respondent’s electronic mail address as it appears on 

the books and records of CMSEF, if followed by a hard copy of the document sent promptly thereafter by 

registered or certified mail addressed to the respondent at the respondent’s address as it appears in records of 

CMSEF. 

Rule 510 Answer to Notice of Charges 

If the respondent determines to answer a notice of charges, the respondent must file an answer within 20 days 

after being served with such notice, or within such other time period determined appropriate by the Chief 

Compliance Officer. 

To answer a notice of charges, the respondent must in writing: 

(i) for each allegation set forth in the notice of charges, admit such allegation, deny such 

allegation, or affirmatively state that the respondent does not have and is unable to obtain 

sufficient information to admit or deny such allegation, which shall have the effect of a 

denial of such allegation; 

(ii) specify any specific facts that contradict the notice of charges; 

(iv) specify any affirmative defenses to the notice of charges; 

(iv) sign and serve the answer on the Chief Compliance Officer; and 

(v) if applicable, request a hearing before a Disciplinary Panel. 

Any failure by the respondent to serve a timely answer to a notice of charges will be deemed to be an 

admission to the allegations in such notice. Any failure by the respondent to answer one or more allegations 

in a notice of charges will be deemed to be an admission of that allegation or those allegations. Any allegation 

in a notice of charges that the respondent fails to deny will be deemed to be admitted. A general denial by 

the respondent, without more, will not satisfy the requirements of the second paragraph of this Rule. 

If a respondent admits or fails to specifically deny any of the allegations in the notice of charges, the 

Disciplinary Panel shall find that the violations set forth in such allegations have been committed and shall 

impose a sanction for such violations. The Disciplinary Panel shall promptly notify the respondent in writing 

of any sanction imposed pursuant to this Rule and advise the respondent that the respondent may request a 

hearing on such sanction within 20 days of the respondent being served with such notice. Any failure by the 

respondent to do so will be deemed to be an acceptance of the sanctions in such notice and waiver of any 

right to appeal such sanctions. 

A respondent shall be granted a hearing before a Disciplinary Panel for every instance in which such 

respondent either denies an allegation and requests a hearing in accordance with this Rule; or requests a 

hearing in accordance with this Rule.

Rule 511 Right to a Hearing

All respondents who have denied a charge shall be afforded the opportunity for a hearing. The hearing 

must concern only those charges, which the respondent has denied.
CMSEF Rulebook CMSEF Page 40

Rule 512 Settlements 

A respondent or potential respondent may at any time propose in writing an offer of settlement to anticipated 

or instituted Disciplinary Proceedings. Any offer of settlement should contain proposed findings and 

sanctions and be signed by the respondent or potential respondent and submitted to the Compliance 

Department, and shall take into account, among other things, the disciplinary history of the respondent or 

potential respondent. A respondent or potential respondent may offer to settle Disciplinary Proceedings 

without admitting or denying the findings contained in the order of the Disciplinary Proceedings but must 

accept the jurisdiction of CMSEF over it and over the subject matter of the proceedings and consent to the 

entry of the findings and sanctions imposed. 

If a respondent or potential respondent submits an offer of settlement in accordance with paragraph (a) of 

this Rule, the Compliance Department will forward the offer to the Disciplinary Panel with a recommendation 

on whether to accept or reject the offer. The respondent or potential respondent may withdraw such offer of 

settlement at any time before acceptance by the Disciplinary Panel, but may not withdraw such offer at any 

time after acceptance by the Disciplinary Panel. 

The Disciplinary Panel may accept the offer of settlement, but may not alter the terms of a settlement offer 

unless the respondent or potential respondent agrees. 

If an offer of settlement is accepted by the Disciplinary Panel, it shall issue a written decision specifying: 

(i) the Rule violations it has reason to believe were committed, including the basis or reasons 

for its conclusions; 

(ii) any sanction to be imposed, which must include full Customer restitution where Customer

harm has been demonstrated; and 

(iii) if applicable, that the respondent has accepted the sanctions imposed without either 

admitting or denying the Rule violations. 

In the event that the Disciplinary Panel accepts an offer of settlement without the agreement of the 

Compliance Department, the decision must adequately support such acceptance. 

If an offer of settlement is accepted and the related order of Disciplinary Proceedings becomes final, the 

respondent’s submission of the offer will be deemed to constitute a waiver of the right to notice, opportunity 

for a hearing and review and appeal under these Rules. 

If the offer of settlement of a respondent or potential respondent is not accepted by the Disciplinary Panel, 

fails to become final or is withdrawn by the respondent or potential respondent before its acceptance by the 

Disciplinary Panel, the matter will proceed as if the offer had not been made and the offer and all documents 

relating to it will not become part of the record. Neither a respondent or potential respondent nor the 

Compliance Department may use an unaccepted offer of settlement as an admission or in any other manner 

at a hearing of, or appeal from, Disciplinary Proceedings. 

Rule 513 Disciplinary Panels 

The Disciplinary Panel shall conduct hearings in connection with any Disciplinary Proceedings (except for 

summary impositions of fines pursuant to these Rules), to make findings, render decisions, and impose 

sanctions pursuant to this Chapter 5. 

Each Disciplinary Panel shall be composed of three individuals selected by the Chief Compliance Officer. 

Except in cases limited to the timely submission of accurate records, each Disciplinary Panel shall consist of 

an individual who would not be disqualified from serving as a Public Director, who shall chair the 

Disciplinary Panel. 

No member of the Compliance Department may serve on a Disciplinary Panel. 
CMSEF Rulebook CMSEF Page 41

Except as may otherwise be provided in these Rules, the Board may at any time remove any member of a 

Disciplinary Panel for cause. 

Within 10 days of being notified of the appointment of the Disciplinary Panel, a respondent may seek to 

disqualify any individual named to the Disciplinary Panel for the reasons identified in these Rules, by serving 

written notice on the Chief Compliance Officer and providing a copy thereof to the chairman of the 

Disciplinary Panel. By not timely filing a request for disqualification, the respondent will be deemed to have 

waived any objection to the composition of a Disciplinary Panel. The Chief Compliance Officer will decide 

in his sole discretion the merits of any request for disqualification. Any such decision will be final and not 

subject to appeal. 

All information, records, materials and documents provided to the Disciplinary Panel and all deliberations, 

testimony, information, records, materials and documents related thereto shall be treated as non-public and 

confidential and shall not be disclosed, except as necessary to further an Investigation or as otherwise required 

by law. No individual shall serve on a Disciplinary Panel unless that individual has agreed in writing that he 

will not publish, divulge, or make known in any manner facts or information regarding the business of any 

Person or other information which may come to his or her attention in his official capacity as a member of 

the Disciplinary Panel, except:

a. when reporting to the Board or to a Standing Committee concerned with such 

information;

b. when reporting to the Compliance Department;

c. when requested by the CFTC or other government agency; or 

d. when compelled to testify in any judicial or administrative proceeding. 

Rule 514 Convening Hearings of Disciplinary Proceedings 

All Disciplinary Proceedings (except for summary impositions of fines pursuant to these Rules) will be 

conducted at a hearing before a Disciplinary Panel. Hearings will be conducted fairly, privately and 

confidentially. Notwithstanding the confidentiality of hearings, the Disciplinary Panel may appoint an expert 

to attend any hearing and assist in deliberations if such expert agrees to be subject to an appropriate 

confidentiality agreement. 

After reasonable notice to each respondent, the Disciplinary Panel will promptly convene a hearing to 

conduct the Disciplinary Proceedings with respect to such respondent. Parties to a Disciplinary Proceeding

include each respondent and the Compliance Department. 

The chairman of the Disciplinary Panel may continue, adjourn or otherwise conduct the hearing, as he may 

deem appropriate. The chairman of the Disciplinary Panel will determine all procedural and evidentiary 

matters, including the admissibility and relevance of any evidence proffered. In determining procedural and 

evidentiary matters, the chairman of the Disciplinary Panel will not be bound by any evidentiary or procedural 

rules of law. Once admitted during the hearing, the Disciplinary Panel may consider, and attach the weight 

it believes appropriate to, evidence or other materials. CMSEF’s Legal Department will provide guidance to 

the chairman of the Disciplinary Panel on the conduct of the hearing. 

Except for procedural and evidentiary matters decided by the chairman of the Disciplinary Panel pursuant to 

these Rules, unless each respondent otherwise consents, the entire Disciplinary Panel must be present during 

the entire hearing and any related deliberations. 

Rule 515 Respondent Review of Evidence 

Prior to the commencement of a hearing, each respondent will be given the opportunity, subject to the sections 

below, to review all books, records, documents, papers, transcripts of testimony and other tangible evidence 

in the possession or under the control of CMSEF that the Compliance Department will use to support the 

allegations and proposed sanctions in the notice of charges or which the chairman of the Disciplinary Panel 

deems relevant to the Disciplinary Proceedings. Notwithstanding the foregoing, no respondent will have the 

right to review, and CMSEF will have no obligation to disclose, any information protected by attorney-client 
CMSEF Rulebook CMSEF Page 42

privilege. All requests for such information must be made not less than 10 days prior to the scheduled hearing 

date, unless the chairman of the Disciplinary Panel agrees otherwise. 

If any books, records, documents, papers, transcripts of testimony, or other tangible evidence contain

information that could adversely affect the competitive position of the Person providing the information or 

if such information might compromise other Investigations being conducted by the Compliance Department, 

the Compliance Department may redact, edit or code such information before furnishing it to the respondent. 

Notwithstanding anything in this Rule to the contrary, the Compliance Department: 

(i) will not redact, edit or code competitive or investigative information contained in 

documents in a manner that would materially impair the respondent’s ability to defend 

against the allegations or proposed sanctions in the notices of charges, and 

(ii) will provide the respondent with access to the information and portions of the documents 

that the Compliance Department intends to rely on to support the allegations or proposed 

sanctions in the notice of charges. 

For purposes of these Rules, information that could adversely affect competitive positions includes positions 

in Swaps currently held, trading strategies employed in establishing or liquidating positions, the identity of 

any Participant or Authorized User and the personal finances of the Person providing the information. 

The respondent shall treat as confidential all data and information provided to it pursuant to these Rules, and 

shall not disclose any such data or information, except as necessary to the respondent’s defense of notice of 

charges and any appeal of the decision of the Disciplinary Panel.

Rule 516 Conducting Hearings of Disciplinary Proceedings 

At a hearing conducted in connection with any Disciplinary Proceedings, the Compliance Department will 

present its case supporting the allegations and proposed sanctions in the notice of charges to the Disciplinary 

Panel. If a respondent has timely filed an answer to the notice of charges in accordance with these Rules, the 

respondent is entitled to attend and participate in the hearing. 

At a hearing conducted in connection with any Disciplinary Proceedings, the Compliance Department and 

each respondent may: 

(i) present evidence and facts determined relevant and admissible by the chairman of the 

Disciplinary Panel; 

(ii) call and examine witnesses; and 

(iii) cross-examine witnesses called by other parties. 

If the respondent fails to file an answer, has filed a general denial, or if any or all of the allegations in the 

notice of charges are not expressly denied in the respondent’s answer, the chairman of the Disciplinary Panel 

may limit evidence concerning any allegations not expressly denied in determining the sanctions to impose. 

If a respondent fails to file an answer but appears at the hearing, the respondent may not participate in the 

hearing (by calling or cross-examining witnesses, testifying in defense, presenting evidence concerning the 

notice of charges, or otherwise) unless the Disciplinary Panel determines that the respondent had a 

compelling reason for failing to file a timely answer. If the Disciplinary Panel determines that the respondent 

had a compelling reason for failing to file a timely answer, the Disciplinary Panel will adjourn the hearing 

and direct the respondent to promptly file the written answer in accordance with these Rules. 

Any Person entitled, or required or called upon, to attend a hearing before a Disciplinary Panel pursuant to 

this Rule will be given reasonable notice, confirmed in writing, specifying the date, time and place of the 

hearing, and the caption of the Disciplinary Proceedings. CMSEF will require all Authorized Persons and 

Authorized Users that are called as witnesses to appear at the hearing and produce evidence. CMSEF will 

make reasonable efforts to secure the presence of all other Persons called as witnesses whose testimony would 

be relevant. 
CMSEF Rulebook CMSEF Page 43

If during any Disciplinary Proceedings the Disciplinary Panel determines that a reasonable basis exists to 

believe that the respondent violated a Rule or a provision of Applicable Law other than the violations alleged 

in the notice of charges, the Disciplinary Panel may consider those apparent violations after providing the 

respondent with an opportunity to answer the additional allegations in accordance with these Rules. In 

connection with considering apparent violations pursuant to this Rule, the Disciplinary Panel may request 

that the Compliance Department provide the Disciplinary Panel with any additional information. 

The Disciplinary Panel may summarily impose sanctions on any Participant, Authorized Person, or 

Authorized User that impedes or delays the progress of a hearing. 

CMSEF will arrange for any hearing conducted in connection with Disciplinary Proceedings to be recorded 

hearing verbatim, or substantially verbatim, in a manner capable of accurate transcription. The record shall 

not be transcribed unless requested by CTFC staff or the respondent or the decision is appealed. If the 

respondent requests a copy of all or portions of the recording of a hearing, the chairman of the Disciplinary 

Panel may within his sole discretion order the respondent to pay the costs for transcribing the recording of 

the hearing. 

No interlocutory appeals of rulings of any Disciplinary Panel or chairman of the Disciplinary Panel are 

permitted. 

Rule 517 Decision of Disciplinary Panel 

As promptly as reasonable following a hearing, the Disciplinary Panel will issue an 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 Disciplinary Panel will constitute the decision of the Disciplinary Panel. 

CMSEF will serve a copy of the order of the Disciplinary Panel on the respondent and the Compliance 

Department. The order will include: 

(i) the notice of charges or summary of the allegations; 

(ii) the answer, if any, or a summary of the answer; 

(iii) a brief summary of the evidence introduced at the hearing (or, where appropriate, incorporation 

by reference of the Investigation Report); 

(iv) findings of fact and conclusions concerning each allegation, including each specific Rule that 

the respondent is found to have violated; 

(v) the imposition of sanctions, if any, the basis for the sanctions, and effective date of each 

sanction; and 

(vi) notice of the respondent’s right to appeal pursuant to these Rules. 

A Disciplinary Panel shall be dissolved automatically when it has decided the matter for which it was 

appointed and has notified the respondent and the Chief Compliance Officer in writing of its decision. 

Unless a timely notice of appeal is filed pursuant to these Rules, the order of the Disciplinary Panel will 

become final upon the expiration of 20 days after the order is served on the respondent and a copy thereof is 

provided to the Compliance Department. 

CMSEF will notify the Person subject to a Disciplinary Panel decision within thirty days of the action taken 

against such Person. 

Rule 518 Sanctions 

After notice and opportunity for hearing in accordance with these Rules, CMSEF will impose sanctions if 

any Participants, Authorized Persons, Authorized Users, Clearing Members, and Participant’s Customers, or 

other Person using any of the Participant’s User IDs is found to have violated or to have attempted to violate 

a Rule or provision of Applicable Law for which CMSEF possesses disciplinary jurisdiction. Any such 

sanctions shall take into account the respondent’s disciplinary history (if any). CMSEF may impose one or 

more of the following sanctions or remedies: 
CMSEF Rulebook CMSEF Page 44

(i) a warning letter, provided that no more than one warning letter may be issued to the same 

respondent found to have committed the same rule violation within a rolling 12-month period; 

(ii) censure; 

(iii) limitation, restriction or qualification of Trading Privileges or other activities, functions or 

operations; 

(iv) suspension of Trading Privileges for a period not to exceed 12 months; 

(v) fine (subject to this Rule); 

(vi) restitution or disgorgement (in the event of a Customer harm, full Customer restitution, except 

where the amount of restitution or to whom it should be provided cannot reasonably be 

determined); 

(vii) termination of Trading Privileges; 

(viii) expulsion; or 

(ix) any other sanction or remedy deemed to be appropriate. 

CMSEF will consider the severity of the violation and the deterrent effect when determining an appropriate 

sanction.

CMSEF may impose a fine of up to $100,000 for each violation. If a fine or other amount is not paid within 

30 days of the date that it becomes payable, then interest will accrue on the sum from the date that it became 

payable at the quoted prime rate plus three per cent. CMSEF has sole discretion to select the bank on whose 

quotations to base the prime rate. Each Participant will be responsible for paying any fine or other amount 

imposed on, but not paid by, any of its Authorized Persons or Authorized Users. 

Rule 519 Appeal from Disciplinary Panel Decision, Summary Impositions of Fines and Other Summary Actions 

Each respondent found by the Disciplinary Panel to have violated (or, in the case of a Participant, whose 

Authorized User, Clearing Member or other Person using its User ID was found to have violated) a Rule or

who is subject to any summary fine imposed pursuant to these Rules or any summary action imposed pursuant 

to these Rules may appeal the decision within 20 days of receiving the order of the Disciplinary Panel or the 

notice of summary action, as the case may be, by filing a notice of appeal with the Chief Compliance Officer. 

The Compliance Department may appeal all or any part of a decision of the Disciplinary Panel, including 

any sanctions that may or may not have been imposed by the Disciplinary Panel, within 20 days of receiving 

the order of the Disciplinary Panel, by filing a notice of appeal with the Chief Compliance Officer. 

While an appeal is pending, the effect of the order of the Disciplinary Panel or the summary action (including 

any sanctions, remedies or costs imposed thereby) shall be suspended. 

The notice of appeal must state in writing the grounds for appeal, including the findings of fact, conclusions 

or sanctions to which the respondent objects. An appellant may appeal the order of the Disciplinary Panel or 

any summary action on the grounds that: 

(i) the order or summary action was arbitrary, capricious, an abuse of discretion, or not in 

accordance with these Rules; 

(ii) the order or summary action exceeded the authority or jurisdiction of the Disciplinary Panel, 

the Chief Compliance Officer or CMSEF; 

(iii) the order or summary action failed to observe required procedures; 

(iv) the order or summary action was unsupported by the facts or evidence; or 

(v) the sanctions, remedies or costs, which were imposed, were inappropriate or unsupported by 

the record. 

The Chief Compliance Officer will forward copies of any notice of appeal received by it to all parties to the 

Disciplinary Proceeding or summary action, as the case may be, except the appellant. On or before the 20th 

day after filing a notice of appeal, the appellant must file with the Chief Compliance Officer and serve on the 

Compliance Department a brief supporting the notice of appeal and documents supporting the brief. On or 

before the 20th day after the date on which the appellant serves their supporting brief, the appellee must file 
CMSEF Rulebook CMSEF Page 45

and serve its brief in opposition. On or before the 10th day after the date on which the appellee serves its 

brief in opposition, the appellant must file and serve a brief in reply on the Compliance Department. 

In connection with any appeal, the Compliance Department will furnish to the Chief Compliance Officer and 

to the respondent/appellant a transcript of the hearing, any exhibits introduced at the hearing, the notice of 

appeal and briefs filed to support and oppose the appeal. 

No later than 30 days after the last submission filed pursuant to this Rule, the Chief Compliance Officer will 

appoint an Appeals Panel to consider and determine the appeal. An Appeals Panel shall be comprised of

three individuals, none of whom shall be a member of the Compliance Department or have been a member 

of any Disciplinary Panel involved in the matters on appeal. The chairman of the Appeals Panel shall be an 

individual who would not be disqualified from serving as a Public Director. 

Within 10 days of being notified of the appointment of the Appeals Panel, a respondent may seek to disqualify 

any individual named to the Appeals Panel for the reasons identified in these Rules, by serving written notice 

on the Chief Compliance Officer. By not filing a timely request for disqualification, the respondent will be 

deemed to have waived any objection to the composition of the Appeals Panel. The Chief Compliance 

Officer will decide the merits of any request for disqualification within his or her sole discretion. Any such 

decision will be final and not subject to appeal. 

The Appeals Panel may hold a hearing to allow parties to present oral arguments. Any hearing will be 

conducted privately and confidentially. Notwithstanding the confidentiality of hearings, the Appeals Panel 

may appoint an expert to attend any hearing and assist in the deliberations if such individuals agree to be 

subject to appropriate confidentiality agreements. In determining procedural and evidentiary matters, the 

Appeals Panel will not be bound by evidentiary or procedural rules or law. 

The Appeals Panel will only consider on appeal the record before the Disciplinary Panel or, in the case of a 

summary action, the record considered by the Chief Compliance Officer, the notice of appeal, the briefs filed 

in support and opposition of the appeal, and any oral arguments of the parties. The Appeals Panel may only 

consider new evidence when the Appeals Panel is satisfied that good cause exists for why the evidence was 

not introduced during the Disciplinary Proceeding or when imposing the summary action. 

After completing its review, the Appeals Panel may affirm, modify or reverse any order of the Disciplinary 

Panel or summary action under appeal, in whole or in part, including increasing, decreasing or eliminating 

any sanction or remedy imposed, imposing any other sanction or remedy authorized by these Rules, or 

remanding the matter to the same or a different Disciplinary Panel for further Disciplinary Proceedings or 

for reconsideration by the Chief Compliance Officer in the case of summary action. The Appeals Panel may 

order a new hearing for good cause or if the Appeals Panel deems it appropriate. 

As promptly as reasonably possible following its review, the Appeals Panel will issue a written decision on 

appeal rendering its decision based on the weight of the evidence before the Appeals Panel. The decision of 

the Appeals Panel will include a statement of findings of fact and conclusions for each finding, sanction, 

remedy and cost reviewed on appeal, including each specific Rule and provision of Applicable Law that the 

respondent is found to have violated, if any, and the imposition of sanctions, remedies and costs, if any, and 

the effective date of each sanction, remedy or cost. 

The Appeals Panel’s written order on appeal (including findings of fact and conclusions and the imposition 

of sanctions, remedies and costs, and the effective date of any sanction, remedy cost) will be the final action 

of CMSEF and will not be subject to appeal within CMSEF.

Rule 520 Summary Imposition of Fines 

The Chief Compliance Officer may summarily impose a fine against a Participant (on behalf of itself or any 

of its Authorized Persons, Authorized Users, or Customers, or other Persons using any of its User IDs), 

Clearing Member, or Authorized User for failing: 

(i) to timely pay fees, cost, charges or fines to CMSEF or a DCO; 
CMSEF Rulebook CMSEF Page 46

(ii) to make timely and accurate submissions to CMSEF of notices, reports or other 

information required by these Rules; and 

(iii) to keep any books and records required by these Rules. 

The Compliance Department, acting on behalf of the Chief Compliance Officer, will give notice of any fine 

imposed pursuant to this Rule to each Participant or Authorized User subject thereto. The notice will specify:

(i) the violation of these Rules for which the fine is being imposed;

(ii) the date of the violation; and 

(iii) the amount of the fine. Within 20 days of serving the notice of fine, the Participant, or 

Authorized User, as the case may be, must either pay or cause the payment of the fine or 

file notice of an appeal pursuant to these Rules. Unless timely notice of appeal is filed 

pursuant to these Rules, the fine will become final upon the expiration of 20 days after the 

notice of fine is served on the Participant, or Authorized User, as the case may be. 

CMSEF will set the amount of any fines imposed pursuant to this Rule, with the maximum fine for each 

violation not to exceed $5,000. Summary imposition of fines pursuant to this Rule will not preclude CMSEF 

from bringing any other action against the Participant, or Authorized User, as the case may be. 

Rule 521 Summary Suspensions and Other Summary Actions 

Notwithstanding anything in these Rules to the contrary, if the Chief Compliance Officer reasonably believes 

that immediate action is necessary to protect the best interests of CMSEF or the marketplace, the Chief 

Compliance Officer may, after consultation with the Regulatory Oversight Committee summarily suspend, 

revoke, limit, condition, restrict or qualify the Trading Privileges of a Participant or Authorized User and 

take other summary action against a Participant or any of its Authorized Users in accordance with these 

Rules. 

Whenever practicable, the Compliance Department, acting on behalf of the Chief Compliance Officer, shall 

provide prior written notice to the party against whom any action in accordance with this Rule shall be taken. 

If prior notice is not practicable, CMSEF will give notice at the earliest possible opportunity to the respondent 

against whom the action is brought. The Compliance Department, acting on behalf of the Chief Compliance 

Officer, will prepare a notice of summary action (which will state the action, the reasons for the action, and 

the effective time, date and duration of the action) and serve the notice on such party and advise the recipient 

of the notice of its right to a prompt hearing before a Disciplinary Panel and its right to be represented by 

legal counsel or other representative at such hearing. A request by the recipient of the notice for such a 

hearing shall not delay the effectiveness of the summary action. 

At the request of CMSEF, a respondent against whom a summary action is brought pursuant to this Rule 

must provide books and records over which the respondent has access or control and must furnish information 

to, or appear or testify before, CMSEF or the Disciplinary Panel with the enforcement of any Rule. 

If a hearing is requested pursuant to this Rule, the Disciplinary Panel will promptly convene a hearing to be 

conducted in accordance with these Rules.

As promptly as reasonably possible after the hearing, the Disciplinary Panel will issue to the respondent a 

written order affirming, modifying, or reversing the summary action. The order will include a description of 

the summary action taken, a summary of the evidence introduced at the reinstatement hearing, a statement of 

findings of fact and conclusions, a description of any action taken or to be taken by CMSEF, and the effective 

date, time and duration thereof. 

Any decision of a Disciplinary Panel pursuant to this Rule will be the final action of CMSEF, and not subject 

to appeal within CMSEF upon serving the respondent with a copy of the decision. 

Rule 522 Reinstatement after Summary Suspension 
CMSEF Rulebook CMSEF Page 47

A respondent whose Trading Privileges are suspended, revoked, limited, conditioned, restricted or qualified 

pursuant to these Rules may apply for reinstatement by filing with the Compliance Department a written 

request stating the applicant’s reasons for seeking reinstatement. CMSEF will not consider a respondent’s 

request for reinstatement if the respondent 

(i) owes any fines, fees, charges or costs to CMSEF, 

(ii) continues to fail to appear at Disciplinary Proceedings without good cause or 

(iii) continues to impede the progress of Disciplinary Proceedings. 

Within a reasonable period after the filing of a request for reinstatement, the Appeals Panel will conduct a 

hearing to consider the request. At the hearing for reinstatement, the respondent will present its, his case 

supporting the reinstatement and the Compliance Department, acting on behalf of the Chief Compliance 

Officer may, in its discretion, present its case opposing or supporting the reinstatement and each may present 

relevant and admissible evidence and facts and call, examine and cross-examine witnesses. At the hearing 

for reinstatement, CMSEF may require Participants, Authorized Persons, Authorized Users, Clearing 

Members, or Participant’s Customers to appear as witnesses and produce evidence if the Appeals Panel 

determines that the evidence is relevant. 

As promptly as reasonably possible after a reinstatement hearing, the Appeals Panel will issue an order 

reinstating, denying the reinstatement, or placing conditions on the reinstatement of the Trading Privileges 

of the respondent. The order will include a brief summary of the evidence introduced at the reinstatement 

hearing; and, if applicable, findings of fact and conclusions not contained in the notice of summary action 

issued pursuant to these Rules. The order of the Appeals Panel may not be appealed. 

Rule 523 Rights and Responsibilities after Suspension or Termination 

When the Trading Privileges of a Participant or Authorized User are suspended for a period of 12 months or 

less, none of its rights and Trading Privileges (including the right to hold oneself out to the public as a 

Participant or Authorized User or enter Orders or RFQs into the SEF and receive Participant rates for fees, 

costs, and charges and deposit margin at Participant levels) will apply to such Participant, Authorized Person 

or Authorized User during the period of the suspension, except for the right to assert claims against others as 

provided in these Rules. Any such suspension will not affect the rights of creditors under these Rules or 

relieve the Participant or Authorized User of its obligations under these Rules to perform any Swaps entered 

into before the suspension, or for any Company fees, costs, or charges incurred during the suspension. 

CMSEF may discipline a suspended Participant, Authorized Person or Authorized User under this Chapter 5 

for any violation of a Rule or provision of Applicable Law committed by the Participant or Authorized User 

before, during or after the suspension.

When the Trading Privileges of a Participant or Authorized User are terminated, all of its rights and Trading 

Privileges will terminate, except for the right of the Participant, Authorized Person or Authorized User in 

question to assert claims against others, as provided in these Rules. Any such termination will not affect the 

rights of creditors under these Rules. A terminated Participant or Authorized User may only seek to reinstate 

his Trading Privileges by providing CMSEF with satisfactory evidence that he complies with these Rules. 

CMSEF will not consider the application of a terminated Participant or Authorized User if such Participant 

or Authorized User, as the case may be, fails to appear at Disciplinary Proceedings without good cause or 

impedes the progress of Disciplinary Proceedings. 

A suspended or terminated Participant or Authorized User remains subject to these Rules and the jurisdiction 

of CMSEF for any acts or omissions prior to the suspension or termination, and must cooperate in any 

Investigation, Disciplinary Proceeding, appeal from Disciplinary Proceedings, summary suspension or other 

summary action as if the suspended or terminated Participant or Authorized User still had Trading Privileges. 

Rule 524 Notice of Disciplinary Proceedings 

CMSEF will provide written notice of Disciplinary Proceedings to the parties and the RSP consistent with 

applicable CFTC Regulations. Whenever CMSEF suspends, expels, fines or otherwise disciplines, or denies 

any Person access, to CMSEF, CMSEF will make the public disclosures required by CFTC Regulations.
CMSEF Rulebook CMSEF Page 48

Rule 525 CFTC Review of CMSEF Actions

The review by the CFTC, pursuant to section 8c of the Act, as amended, of any suspension, expulsion, 

disciplinary or access denial action, or other adverse action by CMSEF, shall be governed by Part 9 of the 

CFTC’s Regulations.

Chapter 6 Miscellaneous

Rule 601 Gifts and Gratuities 

Except with the prior written approval of the Chief Compliance Officer, no Participant, Authorized Person, 

or Authorized User shall, directly or indirectly, give or permit to be given anything of value, including gifts 

and gratuities, to any CMSEF member of the Board, Officer, Employee, or Agent of CMSEF.

Rule 602 Rule Violations

CMSEF shall consider it a violation of these Rules for a Participant, Authorized Person, Authorized User, or 

Customer of a Participant to knowingly violate the terms of any agreement made with CMSEF.

Rule 603 Market Data

CMSEF owns all rights, title and interest in and to all intellectual property and other proprietary rights 

(including all copyright, patent, trademark or trade secret rights) in any and all Market Data, and all derivative 

works based thereon, generated in the course of the operations of CMSEF. 

Participants, and other Persons affiliated with any of the foregoing may not distribute, sell or retransmit 

Market Data to any third party without the consent of CMSEF, with the exception of information about 

specific trades executed on CMSEF by the Participant or other Person affiliated with the Participant. 

CMSEF may share such proprietary data or personal information with one or more registered entities (as 

such term is defined in CFTC Regulations).

CMSEF is prohibited from the use any proprietary data or personal information obtained through the course 

of its regulatory role to further any commercial any business interest, without express permission. Such 

information includes, but is not limited to:

1. Records or data obtained through CMSEF’s surveillance of Participants; 

2. Records or data obtained related to a CMSEF Enforcement Action or Investigation; and

3. Records or data obtained from Participants by request

Access to the SEF may not in any way be conditioned upon the Participant agreeing to allow CMSEF to use 

its proprietary records or data. Such agreement must be in the form of independent, affirmative consent via 

separate signature from the Participant that CMSEF is collecting data or personal information for CMSEF’s

regulatory role. 

Rule 604 Publication of Trading Information

As required by SEF Core Principle 9 and Parts 37 and 16 of the CFTC Regulations, CMSEF will publish 

information about trading activities on CMSEF. CMSEF will publish such information in a timely manner.

Rule 605 Anti-Money Laundering
CMSEF Rulebook CMSEF Page 49

CMSEF requires all of its Participants to ensure that they “know their Customers and Employees”. CMSEF 

requires that all Participants, their Approved Persons and Approved Users agree to not knowingly assist any 

money laundering or other illicit business and will not knowingly assist or be a conduit for terrorist financing.

CMSEF may require that Participants provide evidence to prove that Participants’ Customers are not 

Specifically Designated Nations or Blocked Persons as designated by the Office of Foreign Assets Control 

of the U.S. Department of the Treasury.

Rule 606 Swaps Trading by CMSEF Officials

CMSEF prohibits members of the Board, Officers, Employees, and independent contractors from trading, 

directly or indirectly, any Swap traded on CMSEF or any other SEF where such individual has access to 

material non-public information concerning such Swap. Swaps traded by retirement plans or retirement 

investments where the individual is not involved in the decision making process shall not be deemed to 

constitute trading directly or indirectly in a Swap.

Rule 607 Confidentiality

With the following exceptions, CMSEF shall hold in confidence all non-public information provided by a 

Participant, Customer of a Participant or Authorized User:

(i) when legally requested by a Government Agency or the regulatory authority (foreign or 

domestic);

(ii) to a SDR, DCO, or other entity for the purposes of clearing a Swap;

(iii) to a Regulatory Services Provider;

(iv) when required as part of a legal proceeding;

(v) as part of an Investigation into market abuses or Disciplinary Proceedings;

(vi) with the consent of the Participant; and

(vii) any other reason permitted by these Rules.

Rule 608 Information-Sharing Agreements 

As required by Applicable Law, from time to time CMSEF may enter into information-sharing agreements 

to coordinate surveillance with domestic or foreign regulators, self-regulatory organizations, clearing 

organizations, exchanges, markets or other execution facilities to share information. 

Under such information-sharing agreements, CMSEF may:

(i) share information about current and former Participants;

(ii) share information about current and ongoing Investigations;

(iii) share information about CMSEF market activity; and

(iv) require Participants to provide detailed information about their activities, Customers and staff.

Rule 609 Rule Changes Due to Changes in Government Regulations

CMSEF may, from time to time, amend or repeal any Rule and/or adopt new Rules as required to remain in 

compliance with a CFTC or CEA Rules or Regulations. All new Rules, amendments or repeals of a Rule or 

adoption of a new Rule, shall take effect upon the effective date adopted by CMSEF.

Any and all such changes shall be binding on all Participants, Authorized Officials, Authorized Users, and 

Customers of Participants of the CMSEF. 

CMSEF may, in its sole discretion, waive, or extend the time period for performing, any act or acts designated 

by these Rules, but only to the extent that such waiver or extension is not inconsistent with the CEA or CFTC 

Regulations

Rule 610 Governing Law
CMSEF Rulebook CMSEF Page 50

Any disputes between CMSEF and a Participant, a Participant’s Authorized Person or Authorized User or a 

Customer of a Participant shall be governed by, and construed in accordance with, the laws of the State of 

New York applicable to contracts executed and performed wholly within the State of New York, without 

regard to any provisions of New York law that would apply the substantive law of a different jurisdiction. 

Any legal actions against CMSEF, its members of the Board, Officers, Employees, or agents must be brought 

within one year from the date of the event that caused the accrued. Legal actions against CMSEF shall be 

brought in the State or Federal courts located within the Borough of Manhattan in the City of New York. 

Participants, Authorized Persons, Authorized Users, and Customers of Participants who fail to prevail in a 

lawsuit or other legal proceeding against CMSEF or its members of the Board, Officers, Employees or Agents 

shall reimburse CMSEF for all expenses, including reasonable attorneys’ fees, incurred by CMSEF or its 

members of the Board, Officers, Employees or Agents by CMSEF in the defense of such proceedings. 

Rule 611 Force Majeure

CMSEF shall not be obligated to perform its obligations under these Rules or any agreement with a 

Participant, or to compensate any Participant or a Participant’s Customer for losses as a result of any 

circumstances that CMSEF determines, in its sole discretion, may have an adverse effect upon the functions

and facilities of CMSEF. For the avoidance of doubt, this includes acts of God, fire or other natural disasters, 

bomb threats, acts of terrorism or war, severely inclement weather, power outages, interruption in 

telecommunications or Internet services or services by network service providers, work stoppages, severe 

market disruptions, disputes with service providers, or other unforeseen events.

Rule 612 Extension or Waiver of CMSEF Rules

The Chief Compliance Officer of CMSEF may, in his sole discretion, waive, or extend the time period for 

performing, any act or acts designated by CMSEF Rules, but only to the extent that such waiver or extension 

is not inconsistent with the CEA or CFTC Regulations.

Rule 613 Trading Restrictions of CMSEF Employees

Employees of CMSEF are prohibited from:

(i) Trading, directly or indirectly, in any commodity interest traded on CMSEF;

(ii) Trading, directly or indirectly, in any related commodity interest;

(iii) Trading, directly or indirectly, in a commodity interest traded on contract markets or SEFs or 

cleared by DCOs other than CMSEF; provided, that this prohibition only applies if the 

Employee has access to material, non-public information concerning such commodity 

interest;

(iv) Trading, directly or indirectly, in a commodity interest traded on or cleared by a linked 

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

commodity interest; and

(v) Disclosing to any other Person any material, non-public information which such Employee

obtains as a result of his or her employment at CMSEF where such Employee has or should 

have a reasonable expectation that the information disclosed may assist another Person in 

trading any commodity interest; provided, however, That such rules shall not prohibit 

disclosures made in the course of an Employee's duties, or disclosures made to another selfregulatory organization, linked exchange, court of competent jurisdiction or representative of 

any agency or department of the federal or state government acting in his or her official 

capacity.
Exhibit C: CMSEF Rulebook (Redline)

[See Next Page]
Swap Execution Facility 

Rulebook

August 2017

November 2020

Version 3.111.3.2020

ALL CLEAR MARKETS SWAP EXECUTION FACILITY PARTICIPANTS AND AUTHORIZED USERS, 

WHETHER SUCH PARTICIPANT OR AUTHORIZED USER ACCESSES CMSEF DIRECTLY OR THROUGH 

AN INTERMEDIARY, AND ANY CLEARING MEMBER WHICH GUARANTEES SWAPS TRADED ON 

CMSEF, HEREBY AGREE THAT THESE RULES ARE BINDING UPON ANY SUCH PERSON OR ENTITY 

AND ITS EMPLOYEES AND CUSTOMERS. IT IS FURTHER AGREED THAT THESE RULES ARE 

APPLICABLE AND THAT SUCH PERSONS ARE SUBJECT TO THE JURISDICTION OF CMSEF, THE CFTC, 

AND ANY RELEVANT SELF-REGULATORY ORGANIZATION. ALL SUCH PERSONS HEREBY AGREE TO 
CMSEF Rulebook CMSEF Page 2

COOPERATE FULLY IN THE EVENT CMSEF, THE CFTC, OR A SELF-REGULATORY ORGANIZATION 

CONDUCTS ANY INQUIRY, INVESTIGATION, OR AUDIT OF ANY PARTICIPANT OR ACTIVITY 

CONDUCTED ON THIS SWAP EXECUTION FACILITY.
CMSEF Rulebook CMSEF Page 3

Table of Contents

Chapter 1Definitions61...................................................................................................... Definitions

7

Chapter 2Governance2..................................................................................................... Governance

12

Rule 201 Board...................................................................................................................................... 12

Rule 202 Nominating Committee .......................................................................................................... 12

Rule 203 Regulatory Oversight Committee........................................................................................... 12

Rule 204 Additional Standing Committees ........................................................................................... 13

Rule 205 Ability of the Board to Review Decisions.............................................................................. 13

Rule 206 Ability of the Board to Amend these Rules............................................................................ 13

Rule 207 Eligibility ............................................................................................................................... 13

Rule 208 Officers................................................................................................................................... 13

13Rule 209 Chief Compliance Officer.................................................................................................. 13

Rule 210 Conflicts of Interest................................................................................................................ 14

Rule 211 Non-Public Information ......................................................................................................... 16

Rule 212 Reporting to the CFTC........................................................................................................... 16

Rule 213 Reserved................................................................................................................................. 17

Rule 214 Reserved................................................................................................................................. 17

Rule 215 Reserved................................................................................................................................. 17

Rule 216 Information Sharing Agreements........................................................................................... 17

Rule 217 Agreements with Regulatory Services Providers................................................................... 17

Rule 218 Maintenance of Books and Records....................................................................................... 17

Rule 219 Swap Recordkeeping.............................................................................................................. 18

Chapter 3Participants3 ..................................................................................................... Participants

18

Rule 301 Jurisdiction............................................................................................................................. 18

Rule 302A Trading Privileges............................................................................................................... 19

Rule 302B Brokered Access to CMSEF................................................................................................ 19

Rule 303A Eligibility Criteria for Participants and Access................................................................... 19

Rule 303B Eligibility Criteria for Independent Software Vendors........................................................ 21

Rule 303C Direct Market Access .......................................................................................................... 21

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Rule 303D Withdrawing from CMSEF................................................................................................. 21

21Rule 304 Authorized Users ............................................................................................................... 21

Rule 305 CMSEF Platform Security ..................................................................................................... 22

Rule 306 Participant Application Process.............................................................................................. 22

Rule 307 Authorized Representatives.................................................................................................... 23

Rule 308 Customers of Participants....................................................................................................... 23

Rule 309A Minimum Financial Standards ............................................................................................ 23

Rule 309B Minimum Financial Standards Reporting............................................................................ 24

Rule 310 Authority to Impose Restrictions ........................................................................................... 24

Rule 311 Mandatory Trading................................................................................................................. 24

Rule 312 Uncleared Swaps.................................................................................................................... 24

Rule 313 Fees........................................................................................................................................ 24

Rule 314 Communications between CMSEF and Participants.............................................................. 24

Rule 315 Notices ................................................................................................................................... 25

Rule 316 Reserved................................................................................................................................. 25

Rule 317 Continuing Applicability of Jurisdiction and Rules............................................................... 25

Rule 318 Participant Trading Records................................................................................................... 25

Rule 319 Participant Maintenance of Records....................................................................................... 25

Rule 320 Legal Certainty for CMSEF Trades ....................................................................................... 26

Chapter 4Trading 4 ..............................................................................Trading Standards and Practices

26

Rule 401 Swaps Traded on CMSEF...................................................................................................... 26

26Rule 402 Prohibited Trading Activities............................................................................................. 26

Rule 403 Fraudulent Acts and Misstatements ....................................................................................... 27

Rule 404 Misuse of the CMSEF Trading Platform................................................................................ 27

Rule 405 Trading Hours........................................................................................................................ 27

27Rule 406 Execution of Swaps on CMSEF......................................................................................... 27

Rule 407A Required Transactions......................................................................................................... 30

Rule 407B Permitted Transactions........................................................................................................ 30

Rule 407C Clearing Exception for Swaps............................................................................................. 31

Rule 408 Cancellation of Orders by Participants................................................................................... 31

30Rule 409 Modification or Cancellation of Orders and Trades by CMSEF........................................ 31

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CMSEF Rulebook CMSEF Page 5

Rule 410A Pre-Execution Credit Checks .............................................................................................. 31

Rule 410B Confirmation of Agreements Between Counterparties........................................................ 31

Rule 411 Cleared Swaps........................................................................................................................ 32

31Rule 412 Position Limits and Accountability.................................................................................... 32

Rule 413A Position Limits .................................................................................................................... 32

Rule 413B Position Accountability ....................................................................................................... 33

32Rule 414 Real-Time Market Monitoring and Surveillance ............................................................... 33

Rule 415 Mishandled Customer Orders................................................................................................. 33

Rule 416A Block Trades ....................................................................................................................... 33

Rule 416B Execution of Block Trades Through RFQ........................................................................... 34

Rule 417A Pre-Trade Communications................................................................................................. 34

Rule 417B Information Obtained in Pre-Trade Communications ......................................................... 35

Rule 418A Dissemination of Prices and Trading Information............................................................... 35

Rule 418B Publicly Reportable Swap Transactions.............................................................................. 35

Rule 418C Reporting Counterparties..................................................................................................... 35

Rule 419 Emergency Rules ................................................................................................................... 36

Chapter 5Disciplinary 5........................................................................................... Disciplinary Rules

37

Rule 501 General................................................................................................................................... 37

Rule 502 CMSEF’s Right to Inspect Books, Records and Systems ...................................................... 37

Rule 503 Investigations......................................................................................................................... 37

Rule 504 Reports of Investigations........................................................................................................ 38

Rule 505 Opportunity to Respond to Investigation Reports.................................................................. 38

38Rule 506 Review of Investigation Reports........................................................................................ 39

Rule 507 Warnings................................................................................................................................ 39

Rule 508 Notice of Charges................................................................................................................... 39

Rule 509 Service of Notice of Charges.................................................................................................. 40

39Rule 510 Answer to Notice of Charges............................................................................................. 40

Rule 511 Right to a Hearing .................................................................................................................. 40

Rule 512 Settlements............................................................................................................................. 41

Rule 513 Disciplinary Panels................................................................................................................. 41

Rule 514 Convening Hearings of Disciplinary Proceedings.................................................................. 42

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CMSEF Rulebook CMSEF Page 6

Rule 515 Respondent Review of Evidence............................................................................................ 42

Rule 516 Conducting Hearings of Disciplinary Proceedings ................................................................ 43

Rule 517 Decision of Disciplinary Panel............................................................................................... 44

Rule 518 Sanctions................................................................................................................................ 44

Rule 519 Appeal from Disciplinary Panel Decision, Summary Impositions of Fines and Other 

Summary Actions.................................................................................................................................. 45

Rule 520 Summary Imposition of Fines................................................................................................ 46

46Rule 521 Summary Suspensions and Other Summary Actions......................................................... 47

Rule 522 Reinstatement after Summary Suspension ............................................................................. 47

Rule 523 Rights and Responsibilities after Suspension or Termination................................................ 48

Rule 524 Notice of Disciplinary Proceedings........................................................................................ 48

48Rule 525 CFTC Review of CMSEF Actions..................................................................................... 49

48Chapter 6 Miscellaneous....................................................................................................................... 49

48Rule 601 Gifts and Gratuities............................................................................................................ 49

48Rule 602 Rule Violations .................................................................................................................. 49

Rule 603 Market Data............................................................................................................................ 49

Rule 604 Publication of Trading Information........................................................................................ 49

Rule 605 Anti-Money Laundering......................................................................................................... 49

49Rule 606 Swaps Trading by CMSEF Officials.................................................................................. 50

49Rule 607 Confidentiality ................................................................................................................... 50

Rule 608 Information-Sharing Agreements........................................................................................... 50

Rule 609 Rule Changes Due to Changes in Government Regulations.................................................. 50

50Rule 610 Governing Law .................................................................................................................. 50

50Rule 611 Force Majeure .................................................................................................................... 51

Rule 612 Extension or Waiver of CMSEF Rules .................................................................................. 51

Rule 613 Trading Restrictions of CMSEF Employees.......................................................................... 51

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CMSEF Rulebook CMSEF Page 7

Chapter 1Definitions1 Definitions

Unless otherwise specified, the following are defined terms and shall have the meanings specified below.

Acceptable Price Range means the range of prices that an order may be executed without being subject to review by 

the CMSEF Compliance Department and shall be published on the CMSEF website.

Account Manager means a Person that meets the criteria set forth in CFTC Rule 43.6(h)(6).

Act or CEA means the Commodity Exchange Act, as amended from time to time.

Affiliate means an affiliate of a Participant or a Person or entity who controls, is controlled or is directed, either 

directly or indirectly by another Person or Participant.

API means application programming interface.

Appeals Panel means a panel appointed by the Chief Compliance Officer under Rule 519.

Applicable Law means, with respect to any Person, and statute, law, regulation, rule or ordinance of any governmental 

or self-regulatory authority applicable to such Person, including the CEA, Exchange Act and CFTC Regulations.

Authorized Broker User means a type of Authorized User that is a Person who is employed or is an agent of a 

Registered Broker and who has been authorized by such Registered Broker to access one or more Platforms pursuant 

to Rule 302B and to enter Orders or execute Swaps on a Platform on behalf of Participants that have brokerage

agreements the Registered Broker.

Authorized Person means any Person who is authorized by a Participant to represent the Participant in CMSEF 

matters.

Authorized User means any Person who is an agent or Employee of a Participant or Customer of a Participant and is 

authorized by such Participant to access the SEF by any means. For the avoidance of doubt, any Authorized User of 

a Customer shall not be considered an Authorized User of the Sponsoring Broker providing DMA to the Customer by 

virtue of the DMA relationship between the two parties. 

Block Trade means a publicly reportable swap transaction that meets the definition found in CFTC Regulation 43.2, 

or meets the requirements of CFTC No-Action Letter No. 15-60; specifically, a Block Trade:

(1) Involves a swap that is listed on CMSEF;

(2) Is executed pursuant to CMSEF's Rules and procedures;

(3) Has a notional or principal amount at or above the appropriate minimum block size applicable to such swap; 

and

(4) Is reported subject to the rules and procedures of CMSEF and the rules described in Part 43 of the CFTC 

Regulations, including the appropriate time delay requirements set forth in CFTC Regulation 43.5.

Board means the Board of Directors of CMSEF constituted in accordance with these Rules and Applicable Law.

Business Day means any day on which CMSEF is open for trading.

By-Laws mean the By-Laws of CMSEF.

CFTC or Commission means the Commodity Futures Trading Commission and any successor regulatory agency or 

authority.

CFTC Regulations means the rules and regulations of the CFTC, as amended.
CMSEF Rulebook CMSEF Page 8

Chief Compliance Officer is described under Rule 209. 

Cleared Swap means a Swap that is required to be cleared under Section 2(h)(1)(A) of the CEA and CFTC Regulation 

39.5 or is accepted for clearing by a Derivatives Clearing Organization even though such Swap is not required to be 

cleared.

Clearing Exception means meeting the requirements for exemption from the clearing requirement set forth in Section 

2(h)(1) of the Act because one counterparty to the transaction is entitled to the exception by virtue of meeting the 

requirements set forth in Section 2(h)(7) of the CEA, CFTC Regulations or CFTC Staff No- Action Letters. 

Clearing Exception Form means a form that entitles a counterparty to enter into a swap with a Clearing Exception 

under the Rules of CMSEF. 

Clearing House means a Derivatives Clearing Organization or non-US central clearing house approved by the CFTC 

that provides clearing services for Swaps traded on CMSEF.

Clearing Member means a member of a Clearing House that is authorized to clear trades for Participants or on behalf 

of a Participant or Authorized Users under the CMSEF Rules.

Client means a Person, other than an individual, that has provided written authority to an Account Manager to execute 

Swaps on CMSEF on behalf of and in the name of that Person. 

CMSEF means Clear Markets North America, Inc. and its trading platform(s).

Compliance Department means anyone that assists CMSEF in the surveillance and enforcement of the CMSEF 

Rules. This includes Employees and agents of CMSEF, including Employees and agents of the Regulatory Services 

Provider.

Control means the possession, direct or indirect, or the power or ability to influence or direct or cause the direction 

of the management and policies of an entity, whether through the ownership of securities or otherwise.

Customer has the meaning set forth in CFTC Regulation 1.3(k).

Customer Account means an account held by a Participant on behalf of a Customer.

Derivatives Clearing Organization or DCO has the meaning set forth in Section 1a(15) of the CEA.

Direct Market Access or DMA means an arrangement among a Sponsoring Broker, its Customer and CMSEF that 

allows one or more representatives of that Customer to have Trading Access using the Participant ID of the Sponsoring 

Broker. 

Director means any member of the Board of CMSEF.

Disciplinary Offense has the meaning set forth in CFTC Regulation 1.63(a).

Disciplinary Panel means a panel appointed by the CCO pursuant to Rule 513 to conduct hearings, render decisions, 

and impose sanctions involving disciplinary matters pursuant to these Rules. 

Disciplinary Proceedings means all actions taken by CMSEF with respect to potential violations of the Rules, as set 

forth in Chapter 5 of this Rulebook. 
CMSEF Rulebook CMSEF Page 9

DMA Customer means a Customer of a Sponsoring Broker where representatives of the Customer that are Persons

are designated by the Sponsoring Broker to have Trading Access to the SEF Platform using the Participant ID of the 

Sponsoring Broker and where such Customer signs the DMA Customer Documentation. 

DMA Customer Documentation means the agreements (together with any applicable schedules, exhibits or 

appendices thereto required by CMSEF) in form and substance acceptable to CMSEF, that are required to be executed 

and delivered to CMSEF before a DMA Customer may access the SEF Platform. 

DMA Order means an Order or RFQ placed by a DMA Customer using the Participant ID of the Sponsoring Broker. 

Eligible Contract Participant or ECP means a Participant as defined by Section 1a(18) of the CEA.

Emergency means any occurrence or circumstance that, in the opinion of the Board, or a Person or Persons duly 

authorized to issue such an opinion on behalf of the Board under circumstances and pursuant to procedures that are 

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

liquidation of or delivery pursuant to, any agreements, contracts, swaps or transactions or the timely collection and 

payment of funds in connection with clearing and settlement by a derivatives clearing organization, including: (a) any 

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

or undue concentration of positions; (c) any circumstances which may materially affect the performance of 

agreements, contracts, swaps or transactions, including failure of the payment system or the bankruptcy or insolvency 

of any participant; (d) any action taken by any governmental body, or any other registered entity, board of trade, 

market or facility which may have a direct impact on trading or clearing and settlement; (e) at the request of the CFTC; 

and (f) any other circumstance which may have a severe, adverse effect upon the functioning of CMSEF. 

Emergency Rules has the meaning set forth in Rule 419.

Employee has the meaning found in CFTC Regulation 1.59.

Exchange Act means the Securities Exchange Act of 1934, as amended.

Final Decision has the meaning set forth in CFTC Regulation 1.63(a).

Financial Entity means any Participant meeting the criteria set forth in Section 2(h)(7)(C) of the CEA.

Futures Commission Merchant or FCM has the meaning set forth in Section 1a(28) of the CEA.

Independent Software Vendor or ISV means a Person that provides Participants with a system or platform to route 

orders to CMSEF but does not provide Participants with the ability to execute swaps on system or platform. An ISV 

cannot be a Participant.

Investigation means a process by which the Compliance Department determines whether a violation of CMSEF Rules 

has occurred. 

Investigation Report has the meaning as described in Rule 504.

Legal Entity Identifier has the meaning described in CFTC Regulation 45.6.

Major Swap Participant is defined in Section 1a(33) of the CEA.

Market Data means any data or other information contained in, displayed on, or generated by transactions entered 

into or executed on CMSEF.

Market Date Vendor means a vendor who has entered into an agreement with CMSEF to distribute Market Data.
CMSEF Rulebook CMSEF Page 10

NFA means the National Futures Association.

Officer means an officer of CMSEF.

Order means an actionable bid or offer (i) in response to an RFQ, (ii) displayed in the Order Book, or (iii) modification 

of an RFQ or price displayed in the Order Book.

Order Book means the Central Limit Order book part of the CMSEF trading system in which all Participants have 

the ability to enter multiple bids or offers, observe or receive bids and offers entered by other Participants, and execute 

such bids and offers.

Participant means any Person that has been granted Trading Privileges under the CMSEF Rules and who may trade 

for its own account or for or on behalf of a Customer.

Participant Data means any and all data and other information submitted to CMSEF by the Participant.

Participant Documentation means any such agreements and subsequent addenda or amendments required by 

CMSEF before a Participant will be granted Trading Privileges.

Participant ID is a unique identifier assigned to each Participant by CMSEF.

Person means any natural person or entity.

President means the Person appointed by the Board as CMSEF’s chief executive officer in accordance with CMSEF’s 

By-Laws and duties as determined by the Board.

Proprietary Account is defined by CFTC Regulation 1.3(y).

Proprietary Data means any information with respect to any Person or the identity of such Person or their transactions 

or trading positions.

Public Director means a director of CMSEF who is not an Employee or agent of CMSEF and whose compensation 

is not tied to the performance of CMSEF.

Registered Broker means a type of Participant that is registered as a Futures Commission Merchant or Introducing 

Broker or in another capacity that permits the Person to enter agency trades on behalf of others, or is exempt from 

such registration, and only enters Orders or executes Swaps on CMSEF on behalf of other Participants, but not 

proprietary trades on behalf of the Registered Broker. 

Regulatory Oversight Committee or ROC means the committee of the Board as described in Rule 203.

Regulatory Services Agreement means the agreement by which CMSEF delegates certain market surveillance, trade 

practice surveillance, and other regulatory compliance related services to a Regulatory Services Provider.

Regulatory Services Provider means the organization that provides regulatory services to CMSEF under a 

Regulatory Services Agreement.

Reporting Counterparty means a Participant that is designated as such under CFTC Regulation 45.1 and 45.8.

Request for Quote or RFQ means a request for quote sent by a Participant to other Participants for the purpose of 

getting bids or offers for a specific instrument under these Rules.

Required Swap Creation Data is defined under CFTC Regulation 45.1.
CMSEF Rulebook CMSEF Page 11

Required Transaction means any Swap transaction that is required under Section 2(h)(8) of the CEA to be executed 

on a SEF.

Review Panel means a panel formed for the purpose of deciding whether there has been a violation of CMSEF Rules.

Rules mean any rule adopted from time to time by CMSEF relating to the operation of or conduct of trading on 

CMSEF.

SEC means the Securities and Exchange Commission and any successor agency or regulatory authority.

SEF means a swap execution facility as registered with the CFTC and defined in Section 1a(50) of the CEA. CMSEF 

is a SEF.

Settlement Agreement has the meaning set forth in CFTC Regulation 1.63(a).

Sponsoring Broker means a Participant that designates one or more of its Customers as DMA Customers under the 

CMSEF Rules. 

Swap means any instrument defined as a swap under Section 1a(47) of the CEA and as defined in further CFTC 

Regulations, and is traded on CMSEF.

Swap Data Repository or SDR means any swap data repository registered with the CFTC as defined by Section 

1a(48) of the CEA.

Swap Dealer means a swap dealer as defined in Section 1a(49) of the CEA.

Trade means any executed transaction for the purchase or sale of a Swap on CMSEF.

Trading Hours means the hours during which Participants may regularly execute trades on CMSEF.

Trading Privileges means the rights granted to a Participant to enter Orders and execute Swap transactions on 

CMSEF.

User ID means a unique identifier issued to each Authorized User, which enables CMSEF to identify each individual 

accessing the CMSEF system.

Voice Request for Quote of VRFQ means a request for quote sent by a Participant to other Participants via a CMSEF 

Voice Agent for the purpose of getting bids or offers for a specific instrument under these Rules. Outside of Rule 

406(ii) and Rule 416, references to RFQ shall also include VRFQ.
CMSEF Rulebook CMSEF Page 12

Chapter 2Governance2 Governance

Rule 201 Board

(i) CMSEF shall be governed by the Board according to the By-Laws of Clear Markets North America, 

Inc.

(ii) At all times following the CFTC granting CMSEF permission to operate as a SEF the Board shall be 

composed of at least 35%, but in no case less than two, or fewer than the minimum number or 

percentage of Public Directors required by CFTC Regulations.

(iii) Public Directors can only be appointed or removed by an absolute majority of the members of the 

Board or Stockholders, either:

a. in a meeting;

b. by written consent of all Directors in lieu of a meeting; or

c. by written consent of a majority of Stockholders in lieu of a meeting.

(iv) Public Directors shall serve for two-year terms from their date of election, and shall meet the following 

criteria:

a. Public Directors may not be members of CMSEF;

b. Public Directors may not be salaried Employees of CMSEF;

c. Public Directors may not primarily perform services for CMSEF in a capacity other than as a 

member of the Board; and

d. Public Directors shall not be officers, principals or Employees of a Participant of CMSEF.

(v) Members of the Board, including Public Directors must be of sufficient integrity and have relevant 

experience in financial markets.

(vi) Non-executive Directors and Public Directors compensation shall not be linked to the performance of 

CMSEF.

Rule 202 Nominating Committee

The Board shall create a Nominating Committee to identify and nominate qualified individuals to serve on 

the Board as required by Applicable Law. The Board shall take this action no later than the date set for 

compliance as set by the CFTC in order for CMSEF to operate as a SEF. The Committee shall include no 

fewer than the minimum number of Public Directors required by the CFTC at all times following the 

compliance date set by the CFTC.

Rule 203 Regulatory Oversight Committee

The Board shall create a Regulatory Oversight Committee chaired by the Chief Compliance Officer. A 

majority of the members of the Regulatory Oversight Committee shall be Public Directors. The Regulatory 

Oversight Committee shall report to the Board and shall be responsible for:

(i) overseeing CMSEF’s regulatory program, including but not limited to audits, examinations, 

Investigations, financial reporting, market surveillance and record keeping;

(ii) monitoring compliance with all regulatory requirements, including those of the CFTC and SEC;

(iii) review the performance of the Chief Compliance Officer and the Compliance Department;

(iv) review and approve the annual compliance budget and resources;

(v) review and approve all proposed regulatory changes or changes to CMSEF’s regulatory program;

(vi) review any Investigations conducted by CMSEF;

(vii) prepare an annual report to the Board and the CFTC on CMSEF’s regulatory program; 

(viii) monitoring the sufficiency, independence and effectiveness of the CMSEF’s regulatory program; 

and

(ix) undertake any additional duties required under these Rules or assigned to it by the Board.
CMSEF Rulebook CMSEF Page 13

Rule 204 Additional Standing Committees

The Board may create additional standing committees as may be necessary from time to time.

Rule 205 Ability of the Board to Review Decisions

The Board has the authority to review and affirm, modify, or overrule any and all actions taken by any

Committees of the Board.

Rule 206 Ability of the Board to Amend these Rules

Subject to any required approval or filing required by the CFTC, the Board may from time to time amend, 

repeal or adopt new Rules. All such amendments, repeals, or new Rules shall become effective on the date 

specified by the Board unless otherwise directed by the CFTC.

Rule 207 Eligibility

A Person may not serve on the Board or a Disciplinary Panel, or be an Officer or Employee of CMSEF if the 

individual:

(i) has been convicted of a felony listed in Section 8a(2)(D)(ii) through (iv) of the CEA; 

(ii) is subject to a denial, suspension or disqualification from serving on a disciplinary committee, 

arbitration panel, or governing board of any self-regulatory organization as that term was defined in 

the Exchange Act;

(iii) was found by Final Decision in the past three (3) years of a self-regulatory organization, 

administrative law judge, a court of competent jurisdiction, the CFTC or the SEC to have committed 

a disciplinary offence;

(iv) entered into a Settlement Agreement within the past three (3) years in which any of the findings or, 

in absence of such findings, any of the acts charged, included a Disciplinary Offense;

(v) is currently suspended from trading on any contract market, is suspended or expelled from 

membership with any self-regulatory organization, is serving any sentence of probation or owes any 

portion of any fine imposed pursuant to either (A) a finding by a Final Decision of a self- selfregulatory organization, an administrative law judge, a court of competent jurisdiction or the CFTC 

or SEC that the Person committed a disciplinary offence, or (B) a Settlement Agreement in which 

any of the findings or, in absence of such findings, any of the acts charged, included a disciplinary 

offence;

(vi) is subject to an agreement with any self-regulatory organization not to apply for membership; or

(vii) is subject to an agreement with the CFTC not to apply for registration.

In the event any of the above events occur with respect to a Board Member, member of a Disciplinary Panel, 

Officer, or Employee of CMSEF, the individual shall immediately disclose the occurrence to the CCO.

Rule 208 Officers

The Board shall appoint a President, Chief Compliance Officer, Chief Financial Officer, Chief Technology 

Officer and other such officers and the Board may deem necessary from time to time. The President shall be 

the Chief Executive Officer. Any Officer may also be a board member, Employee or officer of any of 

CMSEF’s Affiliates or subsidiaries.

Rule 209 Chief Compliance Officer
CMSEF Rulebook CMSEF Page 14

The Board shall appoint an individual to serve as the CCO of CMSEF. The Board shall approve the 

compensation of the CCO. Removal of the CCO shall require the approval of a majority of the Board. 

CMSEF shall notify the CFTC of the removal of the CCO and the appointment of any new CCO, whether 

interim or permanent, within two business days of such appointment. 

The CCO shall be an individual who:

(i) has the background and experience necessary to handle the responsibilities of the position; and

(ii) would not be disqualified from serving as a Director of CMSEF.

The CCO shall:

(i) report directly to the Board;

(ii) meet with the Board at least annually; 

(iii) meet with the Regulatory Oversight Committee at least quarterly (each such meeting may occur in 

person or by means of conference telephone); 

(iv) provide any information regarding the regulatory program of the SEF operated by CMSEF that is 

requested by the Board or the Regulatory Oversight Committee;

(v) report directly to the Chief Executive Officer or President of CMSEF;

(vi) be responsible for implementing and overseeing the SEF’s compliance with the Core Principles set 

forth in Section 5h of the CEA and Part 37 of the CFTC Regulations;

(vii) establish and implement written policies and procedures designed to prevent violations of CFTC, 

and CEA regulations and take reasonable steps to ensure compliance with such regulations;

(viii) establish and administer a compliance manual which ensures compliance with all applicable laws 

and rules and is designed to prevent ethical violations;

(ix) supervise CMSEF’s self-regulatory program. This includes market surveillance, trade practice 

surveillance, real-time market monitoring, compliance with the CEA and CFTC Regulations; 

(x) oversee and manage the CMSEF Compliance Department;

(xi) act as a point of contact with the CFTC and other regulators regarding requests for information, 

including books and records requests; and

(xii) In consultation with the Board or the CEO of CMSEF, resolve any conflicts of interest that may 

arise, including: 

a. conflicts between business considerations and compliance requirements;

b. conflicts between business considerations and the requirement that the SEF operated by 

CMSEF provide fair, open, and impartial access as set forth in CFTC Regulation 37.202; 

and 

c. conflicts between CMSEF’s management and members of the Board.

Rule 210 Conflicts of Interest

CMSEF Officers and members of the Board, Disciplinary Panels or the Regulatory Oversight Committee

shall not participate in deliberations or voting in any matter involving a situation where they have a conflict 

of interest. 

A conflict of interest shall include situations where such individual apart from his interest in CMSEF or an 

affiliate:

(i) Is a named party in interest;

(ii) Is an employer, Employee, or fellow Employee of a named party in interest;

(iii) Is associated with a named party in interest through a “broker association” as defined in CFTC 

Regulation 156.1;

(iv) Has any other significant, ongoing business relationship with a named party in interest, not 

including relationships limited to executing futures or option transactions opposite of each other 
CMSEF Rulebook CMSEF Page 15

or to clearing futures or option transactions through the same clearing member; or

(v) Has a family relationship with a named party in interest.

It shall also include situations where the individual has a direct financial interest in the result of the 

deliberations or vote or has any other personal interests, which may be affected by the outcome of the vote 

or deliberations. 

Prior to the commencement of deliberations, each member of the deliberating body shall disclose to the CCO 

whether such member has or believes that he may have a conflict of interest. All conflicts of interest must 

be documented by the CCO.

The CCO shall then determine whether any member of the relevant deliberating body has a conflict of 

interest. 

Regardless of the determination of the CCO, no Officer or member of the Board, Disciplinary Panel or the 

Regulatory Oversight Committee shall take part in deliberations and voting on any significant action if such 

Person has a direct or indirect substantial financial interest in the result of the deliberation or vote.

Individuals who are required to abstain from deliberations and voting pursuant to the above may participate 

in discussions and provide information if the other members unanimously determine that such individual’s 

information is relevant but such individual but may not vote nor be present for voting. In determining whether 

the individual shall be included in discussions, the members shall consider the following: 

(i) whether the individual’s participation is consistent with the public interest; and

(ii) whether the member has a unique or special expertise, knowledge or experience in the matter 

under consideration.

Prior to any determination pursuant to the above, the deliberating body must fully consider the position 

information which is the basis for the member's direct and substantial financial interest in the result of a vote 

on a significant action pursuant to the above. No Person who is a named party or has a relationship with a 

named party may participate in any deliberations, regardless of any other factors. 

The Board shall document that the conflicts determination procedures required by this section have been 

followed. Such records shall include:

(i) The names of all members who attended the meeting in person or who otherwise were present 

by electronic means;

(ii) The name of any member who voluntarily recused himself or herself or was required to abstain

from deliberations and/or voting on a matter and the reason for the recusal or abstention, if 

stated; and

(iii) Information on the position information that was reviewed for each member.

In determining whether a conflict of interest exists regarding a significant action, the determining body must 

include a review of the following:

(i) Gross positions held at CMSEF in the member's personal accounts or “controlled accounts,” as 

defined in CFTC Regulation 1.3(j);

(ii) Gross positions held at CMSEF in proprietary accounts, as defined in CFTC Regulation 

1.17(b)(3), at the member's affiliated firm;

(iii) Gross positions held at CMSEF in accounts in which the member is a principal, as defined in 

CFTC Regulation 3.1(a);

(iv) Net positions held at CMSEF in “Customer” accounts, as defined in CFTC Regulation 

1.17(b)(2), at the member's affiliated firm; and,

(v) Any other types of positions, whether maintained at CMSEF or elsewhere, held in the member's 

personal accounts or the proprietary accounts of the member's affiliated firm that CMSEF

reasonably expects could be affected by the significant action.

Taking into consideration the exigency of the significant action, such determinations should be based upon:
CMSEF Rulebook CMSEF Page 16

(i) The most recent large trader reports and clearing records available to CMSEF;

(ii) Information provided by the member with respect to positions pursuant to CFTC Regulation 

1.69(b)(2)(ii); and

(iii) Any other source of information that is held by and reasonably available to CMSEF.

Each Disciplinary Committee or Hearing Panel shall include sufficient different membership interests in 

order to ensure fairness and to prevent special treatment or preference for any Person in the conduct of its 

respective responsibilities.

At least one member of any Disciplinary Panel or Hearing Panel shall be a Person who is not a member of 

CMSEF whenever a Disciplinary Panel or Hearing Panel is acting with respect to a disciplinary action in 

which 

(i) the subject of the action is a member of CMSEF's Board or a Disciplinary Panel or Hearing 

Panel;

(ii) any of the charged, alleged or adjudicated contract market rule violations involve:

a. Manipulation or attempted manipulation of the price of a commodity, a futures 

contract or an option on a futures contract, or

b. Conduct which directly results in financial harm to a non-member of CMSEF.

This Rule governing Conflicts of Interest shall apply in an Emergency, as described in Rule 419. 

The Board shall determine by majority vote the Person that shall fill in for the CCO in all cases where the 

CCO is unable to fulfill his responsibilities as CCO due to a conflict of interest. The CCO shall not participate 

in such deliberations. 

Rule 211 Non-Public Information

No Officer, Employee, consultant, or member of the Board, a Committee, or a Disciplinary Panel shall use 

or disclose any non-public information obtained in connection with his or her official duties for any purpose 

other than the performance of his or her official duties.

When necessary or required by the CFTC or other regulators, CMSEF may share non-public information 

with one or more regulators, or SEFs, DCMs, or DCOs registered with the CFTC with which the member 

has a connection.

CMSEF is required to share information with the CFTC upon request, in a form and manner that is acceptable 

to the CFTC. CMSEF is also required to share any necessary information in order to perform the functions 

described in Section 5h of the CEA.

Rule 212 Reporting to the CFTC

The Board shall submit a written report about any of the following to the CFTC:

(i) Board rejection of a recommendation or action of the Regulatory Oversight Committee; or

(ii) the removal of a member of the Board or an Officer due to his becoming ineligible under Rule 

207.
CMSEF Rulebook CMSEF Page 17

Rule 213 Reserved

Rule 214 Reserved

Rule 215 Reserved

Rule 216 Information Sharing Agreements

CMSEF shall enter into information sharing agreements or other arrangements necessary to permit CMSEF 

to obtain necessary information, which will enable CMSEF to establish and enforce rules, which will enable 

the motoring of trading and trade processing. CMSEF will provide information to the CFTC upon request. 

CMSEF will also participate in international information sharing agreements as may be required by the CFTC 

from time to time. As part of any information sharing agreements, CMSEF may:

(i) share information and documents concerning current and past Participants and/or Customers as 

necessary for SEF to comply with its SRO obligations, to other markets;

(ii) assist in market surveillance with other markets as necessary for SEF to comply with its SRO 

obligations, to other markets;

(iii) share information and documents concerning current and past Investigations; and/or

(iv) require current and past Participants and/or Customers to provide information and documents, 

which have been requested by other markets or regulators with which CMSEF has an 

information sharing agreement.

Rule 217 Agreements with Regulatory Services Providers

In the future, as permitted by CEA and CFTC Rules and Regulations, CMSEF may contract with a Regulatory 

Services Provider (RSP) to provide some regulatory services to CMSEF. In the event CMSEF contracts with 

an RSP, the terms and conditions under which an RSP will provide Regulatory Services to CMSEF will be 

governed by a written Regulatory Services Agreement (RSA) between CMSEF and the RSP being contracted. 

CEA and CFTC Rules and Regulations permit CMSEF to outsource certain investigative, regulatory, and 

surveillance functions to an RSP. If CMSEF chooses to outsource such services, CMSEF shall retain the 

ultimate decision making authority with respect to any regulatory functions that are contracted to an RSP.

Rule 218 Maintenance of Books and Records

(i) CMSEF and all Participants (and DMA Customers) shall maintain all books and records 

(including all audit trail data and reconstructions) required to be maintained pursuant to the 

CEA and CFTC Regulations, including CFTC Regulations 43.3(h) and 45.2(a) and CMSEF 

and all Participants (and DMA Customers) must provide information to the CFTC upon request, 

in a form, time and manner acceptable to the CFTC. Such requests may be on a routine or nonroutine basis (i.e. if the Participant is under Investigation pursuant to Chapter 5 of this 

Rulebook).

(ii) Such books and records shall be kept for the life of each Swap transacted pursuant to these 

Rules and five years following the termination of such Swap. Participants and their Customers 

shall make such books and records readily accessible to CMSEF for inspection, in each case in 

the form and manner required under the CEA and CFTC Regulations. CMSEF may request 

records through a written communication from the CMSEF Marketing Department to the 

Person designated by the Participant as the Compliance Contact. The Participant’s Business 

Contact will serve as a backup. CMSEF requests for books and records may be made on a 

routine basis and requests may also be made for non-routine data from the Participant. 
CMSEF Rulebook CMSEF Page 18

(iii) CMSEF may disclose information it obtains from Participants and Customers’ books and 

records, to any government agency, self-regulatory organization or other Person, information 

concerning or associated with a Participant or other Person if the CMSEF believes such 

disclosure is necessary and appropriate in exercising a legal or regulatory function, whether or 

not a formal arrangement governing the disclosure exists or a request for information was made.

Rule 219 Swap Recordkeeping

As prescribed by CFTC Regulation 45.2(a)(1), CMSEF shall keep full, complete, and systematic records, 

together with all pertinent data and memoranda, of all activities relating to the business of such entity or 

person with respect to swaps, as prescribed by the Commission. Such records shall include, without 

limitation, all records required by Part 37 of the CFTC Regulations.

(i) Record retention. As prescribed by CFTC Regulation 45.2(c), all records required to be kept 

pursuant to CFTC Regulation 45.2 shall be retained with respect to each swap throughout the 

life of the swap and for a period of at least five years following the final termination of the 

swap.

(ii) Retention form. As prescribed by CFTC Regulation 45.2(d), records required to be kept 

pursuant to CFTC Regulation 45.2 must be kept as follows: Records required to be kept by 

CMSEF may be kept in electronic form, or kept in paper form if originally created and 

exclusively maintained in paper form, so long as they are retrievable, and information in them 

is reportable, as required by CFTC Regulation 45.2.

(iii) Record retrievability. As prescribed by CFTC Regulation 45.2(e), records required to be kept 

by CMSEF pursuant to CFTC Regulation 45.2 shall be retrievable as follows: Each record 

required by CFTC Regulation 45.2 or any other section of the CEA to be kept by CMSEF shall 

be readily accessible via real time electronic access by the registrant throughout the life of the 

swap and for two years following the final termination of the swap, and shall be retrievable by 

CMSEF within three business days through the remainder of the period following final 

termination of the swap during which it is required to be kept.

(iv) Record inspection. As prescribed by CFTC Regulation 45.2(h), all records required to be kept 

pursuant to CFTC Regulation 45.2 shall be open to inspection upon request by any 

representative of the Commission, the United States Department of Justice, or the Securities 

and Exchange Commission, or by any representative of a prudential regulator as authorized by 

the Commission. Copies of all such records shall be provided, at the expense of CMSEF, to any 

representative of the Commission upon request. Copies of records required to be kept by 

CMSEF shall be provided either by electronic means, in hard copy, or both, as requested by the 

Commission, with the sole exception that copies of records originally created and exclusively 

maintained in paper form may be provided in hard copy only. 

Chapter 3Participants3 Participants

Rule 301 Jurisdiction

All applicants of CMSEF must agree to the following in writing:

ALL CLEAR MARKETS SWAP EXECUTION FACILITY PARTICIPANTS AND AUTHORIZED 

USERS, WHETHER SUCH PARTICIPANT OR AUTHORIZED USER ACCESSES CMSEF DIRECTLY 

OR THROUGH AN INTERMEDIARY, AND ANY CLEARING MEMBER WHICH GUARANTEES 

SWAPS TRADED ON CMSEF, HEREBY AGREE THAT THESE RULES ARE BINDING UPON ANY 

SUCH PERSON OR ENTITY AND ITS EMPLOYEES AND CUSTOMERS. IT IS FURTHER AGREED 

THAT THESE RULES ARE APPLICABLE AND THAT SUCH PERSONS ARE SUBJECT TO THE 

JURISDICTION OF CMSEF, THE CFTC, AND ANY RELEVANT SELF- SELF-REGULATORY 
CMSEF Rulebook CMSEF Page 19

ORGANIZATION. ALL SUCH PERSONS HEREBY AGREE TO COOPERATE FULLY IN THE EVENT 

CMSEF, THE CFTC, OR A SELF-REGULATORY ORGANIZATION CONDUCTS ANY INQUIRY, 

INVESTIGATION, OR AUDIT OF ANY PARTICIPANT OR ACTIVITY CONDUCTED ON THIS SWAP 

EXECUTION FACILITY.

Rule 302A Trading Privileges

Subject to the requirements, procedures and conditions set forth in this Chapter and any limitation, restriction 

or revocation from time to time imposed by CMSEF, trading privileges and electronic access to the Platform 

shall be offered to Participants. Trading privileges are non-transferable, non-assignable and may not be sold 

or leased. By virtue of obtaining trading privileges, a Participant shall not obtain any equity or other interest 

in CMSEF, including voting rights or rights to receive any dividends or other distributions, whether arising 

from a dissolution, merger, or consolidation involving CMSEF or otherwise. 

Subject to this Rule, CMSEF deny Trading Privileges to any Person: 

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

Rules and Applicable Law; 

(ii) if such Person would bring CMSEF into disrepute; or 

(iii) for such other cause as the CMSEF may decide. 

Subject to this Rule, CMSEF may determine not to permit any Person to keep its Trading Privileges, or may 

suspend, remove or limit such Trading Privileges if such Person: 

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

Privileges have been approved; 

(ii) fails to meet any condition placed by CMSEF on such Trading Privileges; 

(iii) violates any agreement with the CMSEF, a Clearing Member or a DCO; or 

(iv) has summary action taken against it by CMSEF under these Rules. 

In the case of any suspension, revocation or limitation of the Trading Privileges of any Participant pursuant 

to this Rule, CMSEF may also suspend, revoke or limit the Trading Privileges of such Participant’s 

Authorized Users as CMSEF deems necessary to protect other Participants and the integrity of CMSEF.

In the case of any suspension, revocation or limitation of the Trading Privileges of any Authorized User of 

any Participant pursuant to this Rule, CMSEF, in its sole discretion, may also suspend, revoke or limit the 

Trading Privileges of such Participant or such Participant’s other Authorized Users as CMSEF deems 

necessary to protect other Participants and the integrity of the CMSEF. 

Any decision by CMSEF to deny, suspend, revoke or limit the Trading Privileges of any Person will be 

undertaken by CMSEF in an impartial, transparent, fair and nondiscriminatory manner.

Rule 302B Brokered Access to CMSEF 

A Registered Broker, if acting in an agency capacity on behalf of a Participant or Customer, must have an 

executed agreement with such Participant or Customer, in order to enter Orders on behalf of such Participants 

or Customers. All Orders entered by the Registered Broker must be entered in a manner consistent with the 

terms of this agreement. 

A Registered Broker may only enter Orders on behalf of a Participant or Customer’s Proprietary Account. 

Rule 303A Eligibility Criteria for Participants and Access

Access to CMSEF’s Platform to any ECP shall be provided in a fair, impartial and non-discriminatory 

manner. 
CMSEF Rulebook CMSEF Page 20

To be eligible to be a Participant (including being a party to a Block Trade), an applicant must demonstrate 

to the satisfaction of CMSEF that it:

(i) is an ECP that is eligible to enter into Swaps it wishes to trade on CMSEF, or is a Registered 

Broker;

(ii) completed and submitted the Participant Documentation and any other documentation 

requested by CMSEF;

(iii) is validly organized, in good standing, and authorized to trade Swaps on CMSEF;

(iv) is not in bankruptcy;

(v) is not an affiliate of CMSEF;

(vi) holds all necessary licenses and registrations required by applicable law;

(vii) is in compliance with all registration or authorization requirements of its home country, 

(viii) is in compliance with all recordkeeping requirements in these Rules and Applicable Law;

(ix) is not disqualified under Section 8a(2) of the CEA;

(x) distributed the Rules to its Authorized Persons, Authorized Users and Customers; 

(xi) is not an ISV or automated trading system;

(xii) is a reputable business;

(xiii) is not an individual;

(xiv) meets any other CMSEF or CFTC criteria; and

(xv) is not disqualified in any other way.

In order to be admitted, the Participant shall represent in writing that it meets all of the eligibility criteria set 

forth in this Rulebook. Once admitted, the Participant shall continue to comply with all eligibility criteria 

and shall notify CMSEF in writing if it ceases to meet any of the applicable eligibility criteria. CMSEF shall 

monitor all Participants to ensure that each Participant continues to remain an ECP.

Upon request, all Participants shall provide the names of its Customers and Authorized Users to CMSEF.

Each Participant must represent in writing to CMSEF that it believes, based on reasonable efforts, that all of 

the Participant’s Customers for whom the Participant effects transactions on CMSEF are ECPs. The 

Participant shall notify CMSEF immediately if it becomes aware that this representation is no longer true. 

All Participants must be members of or have entered into an agreement with a DCO or registered clearing 

organization to clear Swaps that are executed on or pursuant to the Rules of CMSEF.

A Participant that is a Clearing Member may enter an Order, only if: 

(i) the Participant has entered into any necessary documentation with its counterparty; and

(ii) the Participant otherwise meets the criteria set forth in these Rules.

Participants that are not Clearing Members shall be eligible to enter an Order pursuant to these Rules, only 

if: 

(iii) the Participant (if the Participant is an Account Manager, only if the Account Manager on behalf 

of its client account(s)) can verify on a pre-trade basis that a Clearing Member has assumed the 

financial responsibility to clear such Cleared Swaps for the Participant with the applicable 

DCO;

(iv) the Participant has entered into any necessary documentation with its counterparty; and 

(v) the Participant otherwise meets the criteria set forth in these Rules.

A Participant that is registered as a Swap Dealer must undertake and be able to discharge:

(i) any pre-trade disclosure it may owe to such other Participant when engaging in a Swap 

transaction on a disclosed basis; and
CMSEF Rulebook CMSEF Page 21

(ii) any due diligence and analysis obligations it may owe to its counterparty. 

Rule 303B Eligibility Criteria for Independent Software Vendors

An Independent Software Vendor (ISV) seeking to provide access to CMSEF must be an entity that is duly 

organized and in good standing, have no legal restrictions that would prohibit it from operating as an ISV, 

satisfy CMSEF’s technological integrity requirements, complete the necessary ISV access documentation, 

agree to abide by the Rules and Applicable Law, consent to the jurisdiction of CMSEF, pay the fees that may 

be established by CMSEF from time to time, and not adversely affect CMSEF’s ability to comply with 

Applicable Law. Access to CMSEF’s Platform to any ISV shall be provided in a fair, impartial and nonnon-discriminating manner. Persons seeking access to CMSEF or a Platform through an ISV must be a 

Participant or Authorized Person specifically authorized by a Participant to have such access.

ISVs affiliated with a SEF or swap broking operation must also agree to grant ISV access to CMSEF or a 

CMSEF affiliate chosen by CMSEF.

Rule 303C Direct Market Access

Only a Sponsoring Broker may sponsor a DMA Customer. 

All trades in Cleared Swaps executed via DMA connection must be guaranteed by a Sponsoring Broker that 

assumes financial responsibility for all activity through the DMA connection.

Each DMA Customer must execute the DMA Customer Documentation as a condition of being granted 

access to CMSEF. 

A Sponsoring Broker shall assist CMSEF in any Investigation into potential violations of the CMSEF Rules, 

CFTC Regulations or the CEA, which occur through or with respect to a DMA connection guaranteed by 

such Sponsoring Broker. Such assistance must be timely and may include requiring any DMA Customer to 

produce documents, to answer questions from CMSEF, and/or to appear in connection with an Investigation. 

A Sponsoring Broker shall suspend or terminate the Trading Access of a DMA Customer or any Authorized 

Trader associated with such DMA Customer if CMSEF determines that the actions of the DMA Customer or 

any of its Authorized Traders threaten the integrity of CMSEF or liquidity of any Swap or violate any CMSEF 

Rule or if the DMA Customer or any of its Authorized Traders fails to cooperate in an Investigation. 

Any trading activity by a DMA Customer using a Participant ID shall be considered to be trading activity by 

the Participant. Such Participant shall be liable for any violations in connection with such trading activity as 

if the Participant had engaged in trading activity.

Rule 303D Withdrawing from CMSEF

A Person that has access to CMSEF may withdraw from CMSEF at its own discretion by providing written 

notice. After withdrawing from CMSEF, the Person’s obligations to CMSEF cease, except the Person 

remains under the jurisdiction of CMSEF with respect to acts and omissions made while such Person had 

access to CMSEF. The Person remains subject to the Participation Agreement, the CMSEF Rulebook and 

any other agreements with respect to acts or omissions that occur while the Person has access to CMSEF.

Rule 304 Authorized Users

All Participants must appoint at least one Employee as an Authorized User. Participants may appoint 

additional Employees, agents or authorized contractors who are individuals to act as Authorized Users. 

Participants must specify whether additional Authorized Users are entitled:
CMSEF Rulebook CMSEF Page 22

(i) to exercise Trading Privileges on behalf of the Participant; or 

(ii) to access CMSEF on “view only” basis. 

To add Authorized Users, Participantsshall notify the CMSEF in the form and manner prescribed by CMSEF. 

All Authorized Users must consent to abide by these Rules and Applicable Law prior to accessing the SEF

through the Participant. CMSEF may also require each Authorized User to satisfy additional requirements 

as CMSEF may prescribe from time to time. All Authorized Users shall be subject to the disciplinary 

authority of CMSEF and subject to possible fine or restriction or revocation of Trading Privileges if they are 

found to have violated any of these Rules, or the CEA and CFTC Regulations, as they apply to swaps trading 

on CMSEF.

CMSEF may, in its sole discretion, revoke, suspend, or limit the designation of a Person as an Authorized 

User, and shall promptly notify the Participant in accordance with the procedures established by CMSEF. 

Participants may at any time revoke an authorization granted to an Authorized User or a User ID granted to 

any other Person by the Participant by providing written notice of such revocation to CMSEF.

Participants shall take immediate and appropriate measures to ensure that, after any such revocation, the 

affected Authorized User shall not have access to the SEF and the affected Person shall not utilize its User 

ID.

All Participants agree to be bound by these Rules and these Rules shall also apply to each of a Participant’s 

Authorized Users. Each Participant is responsible for the actions of its Authorized Users.

Rule 305 CMSEF Platform Security

Each Participant shall:

(i) be solely responsible for controlling and monitoring the use of all User IDs issued to it, or its 

Authorized Users by CMSEF;

(ii) ensure that each Person accessing the SEF using such User IDs is assigned a unique password 

and that each password is used only by the Person to whom it is assigned; and

(iii) notify CMSEF promptly upon becoming aware of any unauthorized disclosure or use of User 

IDs or passwords, or of any other reason for deactivating User IDs or passwords. Each 

Participant shall be bound by any actions taken through the use of its User IDs or passwords, 

including the execution of transactions, whether or not such actions were authorized by such 

Participant or any of its Supervised Persons, or whether or not such transactions are executed 

by an Authorized User of the Participant.

Rule 306 Participant Application Process

CMSEF shall require Persons who wish to become a Participant on CMSEF to:

(i) submit a complete and signed CMSEF User Agreement;

(ii) agree in writing to abide by CMSEF Rules and applicable law; 

(iii) appoint a third party agent acceptable to CMSEF as its US representative if the Person is located 

outside the United States as required under CFTC Regulation 15.05; and

(iv) provide any additional information requested by CMSEF.

CMSEF may conduct an Investigation or verify any information provided by a potential Participant.

CMSEF at its sole discretion, may reject a potential Participant’s application or terminate a Participants status 

if:

(i) such Person is unable to satisfy the eligibility criteria set forth in these Rules;

(ii) such Person is unable to demonstrate that they can adhere to all applicable CMSEF Rules and 

applicable law; and

(iii) would reflect badly upon CMSEF or its other Participants.
CMSEF Rulebook CMSEF Page 23

Rule 307 Authorized Representatives

All Participants shall designate one or more individuals as Authorized Representatives who will be the 

official points of contact for CMSEF. Authorized Representatives shall:

(i) meet the eligibility criteria for Rule 207;

(ii) represent the Participant on CMSEF committees;

(iii) receive CMSEF notices on behalf of the Participant; and

(iv) be empowered to act on behalf of the Participant.

Participants are required to keep CMSEF advised of the most current contact information for their Authorized 

Representatives and to notify CMSEF if an Authorized Representative is no longer qualified under Rule 207.

Rule 308 Customers of Participants

Participants are required to know their Customers and are required to act in the best interests of their

Customers at all times. Participants found to not to be acting in the best interests of their Customers shall be 

subject to suspension or revocation of their access privileges.

Participants shall not enter an Order in the name of a Customer unless that Customer has entered into a written 

agreement with the Participant authorizing the Participant to enter Orders on terms that may be decided by 

CMSEF from time to time.

Written agreements between Participants and their Customers must contain at least:

(i) the full legal name and identifying information of the Customer;

(ii) a description of the Customer’s business if acting as agent;

(iii) a representation from the Customer that it is an ECP;

(iv) that the Customer consents to the jurisdiction of CMSEF;

(v) that the Customer will comply with any applicable CMSEF Rules;

(vi) that the Customer will maintain and make available for inspection its books and records as 

required to enforce CMSEF Rules as they apply to CMSEF; and

(vii) consent to monitoring of its trading activities by CMSEF and CMSEF’s Regulatory Services 

provider. 

The Customer must notify the Participant if the Customer ceases to meet the applicable ECP criteria.

Rule 309A Minimum Financial Standards 

Each Participant shall:

(i) maintain an account with a Clearing Member that provides for the clearing of all Trades that 

such Participant executes on CMSEF for its own account; and 

(ii) cause each Customer on whose behalf it acts to maintain an account with a Clearing Member 

that provides for the clearing of all Trades that Participant executes on CMSEF on behalf of 

such Customer. 

Each Participant or Authorized User shall stay within the trading limits established for their own account by 

their Clearing Member. Each Participant or Authorized User shall provide notice to CMSEF of such trading 

limits. Each Participant or Authorized User shall provide CMSEF with immediate written notice of any 

change in such trading limits. 

At least once a year, each Participant or Authorized User shall provide CMSEF with a written certification 

that:

(i) Participant is and continues to be an ECP; and 

(ii) as applicable, all the Customers on whose behalf the Participant or Authorized User has 

executed or will execute trades are also ECPs.
CMSEF Rulebook CMSEF Page 24

Rule 309B Minimum Financial Standards Reporting 

Each Participant must maintain all records required by the CEA, CFTC Regulations or these Rules, including 

all records of trading activity in the underlying commodity and related markets as it applies to swaps traded 

on CMSEF. Participants must make this information available at the request of CMSEF, the CFTC or the 

Department of Justice.

Each Participant must notify CMSEF immediately upon becoming aware that it fails to satisfy the minimum 

financial requirements applicable to it, including the requirement to qualify as an ECP. 

Participants shall submit financial and related information to CMSEF or the RSP, as applicable, in the form 

and manner requested. A Participant that is unable to demonstrate to CMSEF that it is in compliance with 

such minimum financial requirements shall not engage in transactions subject to these Rules except for the 

purpose of closing open positions. 

Participants that are registered with any SRO shall comply with all Applicable Law related to minimum 

financial reporting and recordkeeping requirements. Participants shall provide CMSEF with copies of any 

reports they are required to file with the CFTC pursuant to CFTC Regulation 1.12 as it applies to swaps 

traded on CMSEF.

Rule 310 Authority to Impose Restrictions

In order to ensure the protection of CMSEF, Customers and other Participants, CMSEF may impose 

restrictions on any Participants subject to early warning requirements under CFTC Regulation 1.12.

Rule 311 Mandatory Trading

Participants that are Swap Dealers or Major Swap Participants are responsible for complying with the 

mandatory trading requirement as defined under Section 2(h)(8) of the CEA and shall not enter into any 

Required Transaction outside a SEF that lists a Swap, which is Required to Trade.

Rule 312 Uncleared Swaps

Absent a Clearing Exception for an Order, as set forth in Rule 407B, CMSEF only permits Participants to 

place orders for, and execute Cleared Swaps. 

Rule 313 Fees

CMSEF shall set Participant’s fees and payment terms for using the CMSEF platform. CMSEF shall have 

the right, at its sole discretion, to terminate or suspend a Participant’s access or privileges in the event a 

Participant fails to satisfy such payment obligation within thirty (30) days after its due date.

In the event that CMSEF suspends a Participant’s access to CMSEF, a Participant shall continue to be bound 

by any and all other applicable Rules.

Rule 314 Communications between CMSEF and Participants

Each Participant must provide CMSEF with current contact information for each of its Authorized Persons 

and Authorized Users. Such information must include the Authorized Persons or Authorized User’s full 

name, electronic mail address, and a telephone number for use during business hours.

CMSEF may, at its sole discretion, record communications between CMSEF and Participants, provided that 

such recording complies with all applicable regulations. This recording may include, but is not limited to, 

recorded telephone conversations, emails, copies of faxes or other documents exchanged between CMSEF 

and Participants. CMSEF’s RSP’s, as applicable, shall have access to such electronic records in the event it 

is required pursuant to a Regulatory Services Agreement.
CMSEF Rulebook CMSEF Page 25

Rule 315 Notices

CMSEF shall publish on its website and electronically notify each Participant of each addition to, 

modification of, or clarification of, these Rules or of any action to implement any Rules. Participants shall 

be notified prior to CMSEF notifying the CFTC or the effective date. In the event of an Emergency, CMSEF 

shall have the right to take actions without notifying its Participants in advance of such action.

Rule 316 Reserved

Rule 317 Continuing Applicability of Jurisdiction and Rules

In the event CMSEF suspends or terminates a Participant or Authorized User’s access or privileges, such 

Participant or Authorized User shall continue to be subject to and bound by these Rules, Applicable Law, 

and the jurisdiction of CMSEF for all acts arising from before the Participant or Authorized User’s access or 

privileges were terminated. Participants and Authorized Users who have had access or privileges suspended 

shall cooperate with any Investigations or Disciplinary Proceedings related to the termination of their access.

Rule 318 Participant Trading Records

Required Records. Each Participant and Customer shall (i) prepare and keep current full, complete and 

systematic records and information which include all pertinent data and memoranda relating to the complete 

audit trail all of the Trades it executes and attempts to execute on CMSEF as are required to be kept by it 

pursuant to applicable law and regulation including, without limitation, all records required by CFTC 

Regulation 37.404, and (ii) shall keep current such other records and information and adopt such forms as 

CMSEF may from time to time require (“Trading Records”). 

Participants and Customers are required to make available to CMSEF or CMSEF’s RSP (if any) any and all 

position and trading information relating to orders placed and trades executed on CMSEF. 

Participants and Customers are also required to keep and provide records of their trading activity in the index 

or instrument used as a reference price, the underlying commodity and related derivatives markets for any 

swaps they trade on CMSEF as it applies to those swaps traded on CMSEF. CMSEF may limit the application 

this requirement to Participants who conduct substantial trading on CMSEF.

Rule 319 Participant Maintenance of Records

(i) Participants, and as applicable, Authorized Users and Customers that have trading privileges 

on CMSEF, shall maintain all books and records that are required to be maintained pursuant to 

the CEA and CFTC Regulations (including, but not limited to, CFTC Regulations 1.31 and 

1.35). This includes all records related to the trading of Swaps.

(ii) Such books and records shall be kept for the life of each Swap transacted pursuant to these 

Rules and five years following the termination of such Swap. Participants shall make copies of 

such books and records readily accessible to CMSEF for inspection, in each case in the form 

and manner required under the CEA and CFTC Regulations. During the first two years copies 

of such Trading Records shall be readily accessible.

(iii) CMSEF may disclose information it obtains from Participants books and records, to any 

government agency (foreign or domestic), self-regulatory organization or other Person as 

required by law, information concerning or associated with a Participant or other Person if the 

CMSEF believes such disclosure is necessary and appropriate in exercising a legal or regulatory 

function, whether or not a formal arrangement governing the disclosure exists or a request for 

information was made.
CMSEF Rulebook CMSEF Page 26

(iv) Participants shall make Trading Records available to the CFTC upon request and/or permit onsite inspection by duly authorized CFTC personnel.

Rule 320 Legal Certainty for CMSEF Trades 

A transaction entered into on or pursuant to the CMSEF Rules shall not be void, voidable, subject to rescission, 

otherwise invalidated, or rendered unenforceable as a result of: 

(i) a violation by CMSEF of the provisions of Section 5h of the Act or CFTC Regulations;

(ii) any CFTC 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 procedure; or

b. require CMSEF to adopt a specific term or condition, trading rule or procedure, or to 

take or refrain from taking a specific action.

Chapter 4Trading 4 Trading Standards and Practices

Rule 401 Swaps Traded on CMSEF

CMSEF shall determine which Swaps can be traded pursuant to these Rules and shall submit such Swaps to 

the CFTC as required by the CEA and CFTC Regulations. At this time CMSEF only permits the trading of 

Cleared Swaps, unless a Participant meets the requirements of Rule 407. Only Swaps permitted by these 

Rules may be traded on CMSEF, regardless of the method of execution. 

CMSEF shall determine the rules and procedures for trading Swaps on CMSEF. This includes Rules and 

procedures to:

(i) determine which Swaps can be traded on CMSEF;

(ii) determine the criteria for listing a Swap for trade;

(iii) disseminate bids and offers and other trading information;

(iv) recording and accounting for Swaps traded on CMSEF;

(v) monitoring the trading activities of Participants and their Customers on CMSEF;

(vi) establishing limits on the size and number of Orders that a Participant may enter into CMSEF;

(vii) establish limits on the maximum daily price movements;

(viii) establish a minimum price quoting increment for each Swap; 

(ix) regulate any administrative matters affecting actives on CMSEF; and

(x) All orders shall contain the following information:

a. the name of the Participant

b. the name of Authorized User (Trader)

c. the Contract Name (description)

d. the Price

e. the Quantity

f. the Clearinghouse to which it will be sent for clearing

g. the Customer name, if applicable

h. the Account number

CMSEF may amend, at its sole discretion any of these Rules or procedures at any time. 

Rule 402 Prohibited Trading Activities
CMSEF Rulebook CMSEF Page 27

No Participant or any of its Authorized Users or Account Managers shall use the CMSEF Platform to 

knowingly engage in any of the following abusive trading practices:

(i) wash or enter or execute non-competitive Swaps transactions;

(ii) accommodation trading, improper cross trading, front running, trading ahead of Customers, 

trading against Customers;

(iii) pre-arranged trading (except for Block Trades permitted by Rule 416 or trades following 

communication permitted by Rule 417);

(iv) fraudulent trading or money passes;

(v) disclose information about Customer orders; or 

(vi) take any action, which will disrupt the trading on CMSEF or another SEF.

No Participant or any of its Authorized Users or Account Managers shall manipulate, or attempt to 

manipulate, the prices on CMSEF in any form; including, without limitation, engaging in activity in violation 

of CEA sections 9(a)(2) and 4c(a)(5) and Commission Regulations 180.1(a) and 180.2.

Rule 403 Fraudulent Acts and Misstatements

No Participant or any of its Authorized Representatives, Authorized Users or Account Managers shall 

knowingly:

(i) use CMSEF to engage in any fraudulent acts or schemes to defraud or mislead other 

Participants or CMSEF;

(ii) withhold Customer orders;

(iii) engage in fraudulent trading of any form; or

(iv) engage in an attempt to manipulate the market in any form.

Misstatements by Participants and their Authorized Representatives, Authorized Users or Account Managers

shall be grounds for termination of CMSEF access and privileges.

Rule 404 Misuse of the CMSEF Trading Platform

CMSEF strictly prohibits misuse of the CMSEF trading platform. No Participant or any of its Authorized 

Users or Account Managers shall knowingly engage in unauthorized use or misuse the CMSEF platform or 

to assist any Person or individual from gaining access for the purposes of misuse or take any actions, which 

will be detrimental to CMSEF.

Misuse by Participants and their Authorized Representatives and Authorized Users shall be grounds for 

termination of CMSEF access and privileges.

Rule 405 Trading Hours

CMSEF shall in its sole discretion determine:

(i) the Business Days on which CMSEF will be open for trading;

(ii) the Trading Hours on such Business Days during which CMSEF will be open for trading; and

(iii) the Time Zone in which CMSEF Rules shall apply.

Unless otherwise specified in these Rules:

(i) all references to time shall be based upon local time in New York, New York;

(ii) opening times start on the first second of the minute cited; and

(iii) closing times end on the last second of the minute cited. 

CMSEF reserves the right to modify all of the above without advance notice in the event of an Emergency.

Rule 406 Execution of Swaps on CMSEF

The following are the acceptable methods CMSEF provides Participants in order to execute Swaps on 

CMSEF:
CMSEF Rulebook CMSEF Page 28

(i) Anonymous Central Limit Order Book (Minimum Functionality):

a. Acceptable Orders. The following kinds of orders may be entered into the Central Limit 

Order Book (CLOB) of the CMSEF Platform.

I. Limit Orders. A “Limit Order” is an order to buy or sell a contract at a specified 

price or better.

II. Market Orders. A “Market Order” is an order to purchase or sell a contract at the 

best price on the CMSEF Platform at the time the order is entered on the CMSEF 

Platform (only available via fix API connection).

III. Fill or Kill. A “Fill or Kill” Order must be filled entirely or the Order is cancelled. 

IV. Immediate or Cancel. An “Immediate or Cancel” Order must be filled instantly 

or the Order is cancelled. 

b. Good until Time. An Order may be entered such that the Order is cancelled at a specific 

time if it is not executed (note that this feature is not available if accessing the system 

through the CMSEF website).

c. Entry of Orders. An anonymous order may be submitted directly by the Participant for its 

own account or on behalf of a Customer on whose behalf such a Participant is authorized 

to act. Each order on the CLOB must contain the following information:

I. Bid/Offer Indication

II. Price

III. Notional Amount 

IV. Instrument 

d. Time Delay Requirement. All Participants that are a broker or dealer and who, in 

connection with the execution of a Required Transaction, seek to either execute against a 

Customer’s order or execute two Customers against each other through the CMSEF’s 

CLOB shall use the following procedure:

I. If a Participant seeks to execute an order against a Customer order, then such 

Participant must enter the Customer order into the CMSEF CLOB and then wait 

at least 15 seconds before entering the Participant’s order; or

II. If a Participant seeks to execute two Customer orders against each other, then such 

Participant shall enter one side of the trade into the CMSEF CLOB and wait at 

least 15 seconds before entering the second side of the trade for execution.

e. Time Delay Exception. The time delay requirement does not apply to DMA Orders where 

a broker or dealer does not engage in some form of pre-arrangement or pre- pre-negotiation 

of such order.

f. Price-Time Priority. All prices received in the CLOB are sorted based on strict priceprice-time priority protocol.

g. Trading Limits. Participants shall only enter orders for such Contracts and for such 

amounts as is permitted within the scope of their trading limits.

h. Matching of Orders. Orders submitted will be matched as follows:

I. Market Orders. Matching orders will be matched against all pending bids and 

offers in accordance with a price-time priority protocol. If any portion of the 

market order is not filled, the unfilled remainder will be canceled.

II. Limit Orders. Limit orders will be matched with bids and offers that have a price 

that is at or better than the price of the limit order, in accordance with the pricetime protocol. If any portion of the limit order is not filled, the unfilled portion of 

the order will remain in the market at the price and time that the order was entered. 

i. Unfilled Orders.

I. After the close of trading each Trading Day, all unfilled bids and offers will be 

cancelled

II. Upon a Participant’s logging out from the CMSEF Platform during the Trading 

Day, all unfilled bids and offers entered by such Participant will be cancelled.

j. Matching Algorithm. The CMSEF matching engine operates as a market order/limit order 

system. Orders are handled as follows:

I. Market orders are executed at the top of the market and can be matched with 

multiple standing orders at different prices if necessary to fill the market order 

volume;
CMSEF Rulebook CMSEF Page 29

II. Limit orders will execute at the requested price or better; and

III. Any unmatched limit order (or portion of an order) becomes a standing order in 

the system.

k. Counterparty Anonymity. 

I. Except as otherwise required under the Act or the Commission’s regulations, 

CMSEF shall not directly or indirectly, including through a third-party service 

provider, disclose the identity of a counterparty to a Swap that is executed 

anonymously and intended to be cleared.

II. CMSEF shall establish and enforce rules that prohibit any person from directly or 

indirectly, including through a third-party service provider, disclosing the identity 

of a counterparty to a Swap that is executed anonymously and intended to be 

cleared.

III. For purposes of subsections I and II above, ‘‘executed anonymously’’ shall 

include a Swap that is pre-arranged or pre-negotiated anonymously, including by 

a Participant of CMSEF.

IV. For a package transaction that includes a component transaction that is not a Swap 

intended to be cleared, disclosing the identity of a counterparty shall not violate 

subsections I and II above. For purposes of this paragraph, a ‘‘package 

transaction’’ consists of two or more component transactions executed between 

two or more counterparties where:

1. Execution of each component transaction is contingent upon the 

execution of all other component transactions; and

2. The component transactions are priced or quoted together as one 

economic transaction with simultaneous or near-simultaneous execution 

of all components.

V. This “Counterparty Anonymity” section shall apply to all Required Transactions 

and shall apply to Permitted Transactions beginning on July 5, 2020.

(ii) Request for Quote (RFQ)

a. Orders Entry. Participants may submit RFQ inquiries on a name disclosed basis. Unless 

the Participant is submitting an RFQ pursuant to Rule 416, submission of RFQ inquiries 

must be sent to minimum of three counterparties; none of which shall be: 

I. affiliated of or controlled by the counterparty requesting the RFQ inquiry; or 

II. affiliates of or controlled by each other.

b. Bids and Offers. At the same time that the requester receives the first responsive bid or 

offer, CMSEF shall communicate to the requester any firm bid or offer pertaining to the 

same instrument resting on the CLOB.

c. Responses. CMSEF shall provide the requester with the ability to execute against any firm 

CLOB bids or offers along with any responsive orders to the RFQ. 

d. Execution of Orders. The requester may accept any response to the RFQ upon receipt. 

After the requester accepts an RFQ, the responding party is given a “last look” in order to 

execute the Order. 

e. Trading Protocols. CMSEF will ensure that its trading protocols provide each Participant

with equal priority in receiving RFQs and in transmitting and displaying for execution 

responses to RFQs. 

f. Submitting a Request. Each RFQ shall include the following information regarding the 

Swap that the Participant is requesting quotes:

I. Product

II. Pay/Receive Indication

III. DCO

IV. Currency

V. Tenor

VI. Frequency

VII. Day Count

VIII. Instrument(s)

IX. Effective Date
CMSEF Rulebook CMSEF Page 30

X. End Date

XI. Business Day Conversion

XII. Calendar

XIII. Roll Conversion

XIV. Notional Amount

XV. Day Count Fraction

XVI. Clearing FCM 

g. Response to RFQ. Each response to an RFQ must contain a price.

h. Last Look. After the RFQ requester receives a quote, the requester will be able to execute. 

If the requester executes the quote, the Participant that submitted the quote will have a “last 

look” where such Participant will confirm the quote. The last look will expire in 30 seconds 

and until the Participant confirms the quote the requester may cancel the quote. 

Customer. The Customer requesting a quote on the RFQ system must be identified by the 

Participant entering the request, regardless if the Customer is the Participant or an 

Authorized User. 

(iii) Voice Order-Entry. Notwithstanding Rule 406(iii), a Participant may enter any order on the 

CLOB (Rule 406(i)) or RFQ (Rule 406(ii)) systems through communication with a Voice 

Agent. In this manner, any action that is permissible on the CLOB or RFQ may be taken on 

behalf of the Participant by the Voice Agent at the direction of the Participant.

(iv) Priorities of Orders: For any bid or offer on the CLOB, and for any RFQ or response to an 

RFQ, each Participant shall be given equal priority in terms of when such actions shall be 

displayed to the relevant Participants on CMSEF. Each order submitted on the SEF shall 

include the following:

a. The Legal Entity Identifier of the Participant or Client placing the order;

b. A yes/no indication of whether the Participant or Client is a swap dealer with respect to the 

product with respect to which the order is placed.

c. A yes/no indication of whether the Participant or Client is a major swap participant with 

respect to the product with respect to which the order is placed.

d. A yes/no indication of whether the Participant or Client is a Financial Entity.

e. A yes/no indication of whether the Participant or Client is a U.S. Person.

f. If applicable, an indication that the Participant or Client will elect the clearing requirement 

exception in CEA section (2)(h)(7) for any swap resulting from the order.

(v) Brokered Orders: Participants may enter an Order through a Registered Broker for which the 

Participant has entered into an agreement that permits the Registered Broker to act on behalf of 

the Participant. Such Order are treated as if the Order was entered directly by the Participant, 

under the rules of CMSEF.

Rule 407A Required Transactions

Required Transactions that do not qualify as a Block Trade or a Clearing Exception shall be executed on CMSEF 

according to Rule 406.

Rule 407B Permitted Transactions

Permitted Transactions shall be executed on CMSEF according to Rule 406, with the following qualifications:

(i) Permitted Transactions may be entered via RFQ to any number of Participants; and 

(ii) Permitted Transactions negotiated off-SEF may be entered for execution and clearing by the 

staff of the SEF directly, at the direction of a Registered Broker. 
CMSEF Rulebook CMSEF Page 31

Rule 407C Clearing Exception for Swaps 

Each Participant wishing to execute an Order under a Clearing Exception on CMSEF must submit all 

documentation required by Part 50 of the CFTC Regulations (the Clearing Exception Form) prior to placing 

an Order subject to the Clearing Exception. A Participant shall submit all required documentation supporting 

its eligibility (or the eligibility of its relevant Authorized User, as applicable) for the Clearing Exception. 

Any Order subject to the Clearing Exception shall be rejected if an applicable Clearing Exception Form is 

not on file with CMSEF. 

The Clearing Exception may only be used for Orders that are not executed on the CLOB. 

Rule 408 Cancellation of Orders by Participants

Participants may cancel any Order, which has been entered on CMSEF unless it has been executed or expired. 

Rule 409 Modification or Cancellation of Orders and Trades by CMSEF

Before an Order is sent to a Clearinghouse, CMSEF may cancel any Order that, if allowed to remain, would 

have meaningful adverse effects on the integrity of the market, if the Order is entered in a price outside a 

range known as the Acceptable Price Range, or a CMSEF system malfunction. The Acceptable Price Range 

shall be determined by CMSEF based on the market data available to CMSEF. It may change from time to 

time and shall be published on the CMSEF website. 

Once a trade has been cleared by a Clearinghouse, CMSEF may adjust trade prices or cancel if there is a 

CMSEF system malfunction or with the consent of both Counterparties. Such modification or cancellation 

shall be effected by a pre-arranged trade or trades, consistent with CFTC No-Action Letter No. 15-24

(published by the CFTC on April 22, 2015; relief expires June 15, 2016). 

At any time, CMSEF may halt or suspend trading on its platform in order to maintain a fair and orderly 

market, as required by these Rules. Any halt or suspension in trading shall be communicated to Participants 

as soon as practicable. 

If CMSEF takes action pursuant to this Rule, it will give prompt notice to affected Participant or Participants. 

Rule 410A Pre-Execution Credit Checks

CMSEF will verify prior to the execution of any Order that the Participants or Authorized User have sufficient 

credit limits with their Clearing Members so that the trade will be able to be accepted by the Clearing House 

for Clearing. CMSEF will not permit Participants or Authorized User to execute transactions if their credit 

limits are insufficient. 

All Orders will be prescreened on an order-by-order basis. A Clearing Member may reject an Order pre- preexecution or post-execution. If an Order is rejected by the Clearing Member post-execution, such Order shall 

be void ab initio.

It is the responsibility of the Participants or Authorized User to evaluate the credit quality of their Prime 

Broker, FCM, and or Clearinghouse, and their counterparty on uncleared swaps.

Rule 410B Confirmation of Agreements Between Counterparties

The terms of the Swap, which shall serve as a confirmation of the transaction, will be sent at the time of 

execution of the Swap. Specifically, upon the execution of a Swap, CMSEF will provide each counterparty 

to a transaction that is entered into on or pursuant to the rules of the SEF with a written record of all of the 
CMSEF Rulebook CMSEF Page 32

terms of the Swap, which shall legally supersede any previous agreement and serve as a confirmation of the 

transaction; provided, that specific Customer identifiers for accounts included in bunched orders involving 

Swaps will not be included in confirmations provided by CMSEF if the applicable requirements of CFTC 

Regulation 1.35(b)(5) are met. Confirmations of Swaps delivered to counterparties shall not include any 

information that violates Rule 406(i)(k).

Rule 411 Cleared Swaps

The following does not apply with respect to swaps subject to the clearing requirement exception in CEA 

section (2)(h)(7) for which a counterparty has elected such exception. 

Each Cleared Swap shall be cleared through the Clearing House indicated in the Swap Specification in 

accordance with the CEA and the CFTC Regulations.

For each Cleared Swap a Participant expects to enter into via the SEF Platform or subject to CMSEF Rules, 

the Participant or a Client or Customer of the Participant must establish a clearing account with the Clearing 

House or with a Clearing Member of the Clearing House, in each case, designated in the Swap Specification 

for such Cleared Swap.

Submission of executed trades to the applicable DCO shall be the responsibility of CMSEF. 

Rule 412 Position Limits and Accountability

To reduce the potential threat of market manipulation or congestion, SEF shall adopt for each of the contracts 

of the facility, as is deemed necessary and appropriate by SEF, position limitations or position accountability 

levels for speculators.

Rule 413A Position Limits

In accordance with CFTC Regulations, CMSEF may from time to time adopt position limits and grant 

exceptions from position limits as may be necessary.

CMSEF shall not set position limits in excess of CFTC limits.

In the event CMSEF adopts position limits, Participants may request and exemption from such limits by 

filing an application with CMSEF’s Market Monitor Team. Participants may not exceed such limits until 

they have received Written approval from CMSEF. Applications to exceed position limits must be filed in a 

form acceptable to CMSEF and must at a minimum include:

(i) the name and contact information of the Participant; 

(ii) a description of the exemption being requested;

(iii) whether the exemption is for 

a. bona fide hedging as defined in CFTC Regulation §1.3(z)(1),

b. risk management, or 

c. arbitrage/spread positions; and

(iv) a description of the complete underlying exposure related to the exemption request.

In the event that CMSEF agrees to provide the requested exemption, the Participant must agree to:

(i) provide CFSEF with any information or documentation requested by CMSEF; 

(ii) to comply with any and all terms, conditions or limitations imposed by CMSEF;

(iii) permit CMSEF modify or revoke the exemption at any time; 

(iv) agree to initiate and liquidate positions in an orderly manner; and 

(v) agree to immediately notify CMSEF of any material change to the information provided to 

CMSEF.

CMSEF reserves the right to take any actions necessary in response to any Emergency situation that may 

arise including forcing any Participant to reduce any outstanding positions.
CMSEF Rulebook CMSEF Page 33

Rule 413B Position Accountability 

All Participants shall be bound by CMSEF’s position accountability levels for Required Transactions. 

CMSEF will set these levels in accordance with appropriate CFTC Regulations. 

In the event a Participant holds or controls aggregate positions in a Swap in excess of CMSEF position 

accountability levels, the Participant shall be subject to the following: 

(i) The Participant shall promptly provide any information requested by CMSEF concerning size 

and type of the position and any efforts to hedge the position.

(ii) The Participant shall, if directed by CMSEF, liquidate in an orderly manner, or not increase 

further the positions, which exceed CMSEF’s position accountability levels. 

(iii) The Participant shall, upon request by CMSEF, identify the beneficial owner and or any 

controlling parties for such positions.

CMSEF reserves the right to take any actions necessary in response to any Emergency situation that may 

arise, including forcing any Participant to reduce any outstanding positions.

Rule 414 Real-Time Market Monitoring and Surveillance

Real-time monitoring of trading on CMSEF for compliance purposes shall be conducted by CMSEF’s 

Compliance Department. CMSEF will monitor and surveil participants and market data on an ongoing and 

real time basis to ensure compliance with all applicable laws, rules, regulations and the CMSEF rulebook. If 

CMSEF believes a violation may be occurring or about to occur CMSEF may take actions including, but not 

limited to, halting a Participant's ability to execute trades on CMSEF.

(i) CMSEF shall monitor and evaluate data on:

a. an ongoing basis in order to detect and prevent manipulation, price distortion, and where 

necessary disruptions in the cash-settlement process, and

b. general market data in order to detect and prevent manipulative activity that would result 

in the failure of the market price to reflect the normal forces of supply and demand, unusual 

trading volumes, and impairments to market liquidity.

(ii) In addition, CMSEF may protect market integrity through use of the following safeguards to prevent 

the entry of orders in any of the following circumstances:

a. pre-trade quantity limits on individual orders to screen for order quantities not within 

acceptable parameters;

b. pre-trade price collars to screen for orders outside of current market conditions; and

c. pre-trade check to screen for risk based limits set by the clearing member.

Such pre trade quantity and risk limits shall be posted on CMSEF’s web site.

Rule 415 Mishandled Customer Orders

CMSEF shall not be held liable for any Customer Orders, which are mishandled by Participants. Participants 

will be solely responsible for all remedial actions in the event a Participant mishandles a Customer Order.

Rule 416A Block Trades 

CMSEF’s appropriate minimum block sizes shall be consistent with appropriate minimum block sizes set by 

the CFTC. CMSEF shall not permit Participants to execute Swaps as Block Trades below the appropriate 

minimum block size set by the CFTC. 
CMSEF Rulebook CMSEF Page 34

The following Block Trade Rules shall apply to Block Trades executed on CMSEF:

(i) Block Trades shall be trades that are at or in excess of the appropriate minimum block size set by 

the CFTC and may be executed on CMSEF by RFQ by requesting a price from fewer than three 

RFQ Receivers.

(ii) Block Trades must trade at prices that are fair and reasonable in the context of:

(i) market conditions;

(ii) other transactions in the market at the time; and

(iii) the nature of the Participants to the Block Trade.

(iii) Block Trades shall not affect resting orders.

(iv) Participants shall not aggregate Orders for different accounts to create Block Trades unless 

permitted by CFTC Regulation 43.6(h)(6).

(v) Block Trades executed off CMSEF must be reported by the Participants to CMSEF as soon as 

practicable but no later than five (5) minutes before the time such Block Trade would be reported 

by an SDR. The actual notional or principal amount of the Block Trade shall be reported to CMSEF, 

which shall report the Block Trade as set forth in CFTC Regulation 43.6 and Appendices B, D, E, 

and F to Part 43 of the CFTC Regulations. 

CMSEF reserves the right to investigate all Block Trades to ensure that they comply with all applicable 

CMSEF Rules and CFTC Regulations.

A Participant transacting a Block Trade on behalf of a Customer must receive prior written instruction or 

consent from the Customer in order to do so. Such instruction or consent may be provided in the power of 

attorney or similar document by which the customer provides the person with discretionary trading authority

or authority to direct the trading in its account.

The parties to a publicly reportable swap transaction on CMSEF that has a notional amount at or above the 

appropriate minimum block size shall notify CMSEF of its election to have the publicly reportable swap 

transaction treated as a Block Trade. CMSEF, pursuant to these Rules, shall notify the SDR of such a Block 

Trade election when transmitting swap transaction and pricing data to such SDR in accordance with CFTC 

Regulation 43.3(b)(1).

Rule 416B Execution of Block Trades Through RFQ

Block Trades shall only be executed on CMSEF using the RFQ system, and only if the conditions of CFTC 

No-Action Letter No. 15-60 (published by the CFTC on November 2, 2015; relief expires November 15, 

2016) are met. These requirements are as follows:

(i) the Block Trade must meet the definition found in this Rulebook, and must be executed under 

the Rules of CMSEF;

(ii) a pre-trade credit check must be completed at the time the order for a block trade enters the 

Block Trade on the RFQ system; and

(iii) all Block Trades are subject to void ab initio requirements if swap is rejected on the basis of 

credit. 

Rule 417A Pre-Trade Communications

A Participant or Authorized User, acting on behalf of a Customer, must have the Customer’s consent before 

engaging in pre-arrangement communication with a counterparty. The Participant or Authorized User may 

not disclose such communications to any third party and may not use such communications to enter into 

alternative transactions other than the transaction permitted by this Rule. In any case in which a transaction 

is agreed upon as the result of pre-arrangement communication, the Participant or Participants must allow a 
CMSEF Rulebook CMSEF Page 35

15-second delay between orders entered on the SEF. There is no mechanism on the CMSEF system that 

prevents a trade from being submitted before such 15-second delay has occurred and therefore any applicable 

Order that is executed without the delay shall be a violation of these Rules and CFTC Regulations. 

Rule 417B Information Obtained in Pre-Trade Communications

All Participants or Authorized Users party to the pre-arrangement communication permitted by Rule 417A 

are prohibited from disclosing such communications to any third party and may not use such communications 

to enter into alternative transactions other than the transaction permitted by this rule.

Rule 418A Dissemination of Prices and Trading Information

CMSEF shall publish information daily on its website regarding prices, volume, and other data as required 

by the CFTC Regulations. 

CMSEF will also make available a central pricing screen on CMSEF with a real-time view of resting bids 

and offers.

CMSEF may make available to Participants an indicative, non-attributed pricing page on CMSEF for certain 

types of Swaps of the most commonly traded tenors within such type of Swap.

CMSEF shall choose, at its sole discretion, an SDR. As required by CFTC Regulation 37.901(a), CMSEF 

shall transmit swap transaction and pricing data for each Swap executed pursuant to these Rules to the 

appropriate SDR in the form and manner required. At this time, all trades on CMSEF will be reported to 

DTCC Data Repository (U.S.) LLC.

CMSEF may provide such swap transaction and pricing data to Participants and Authorized Users no earlier 

than the time it transmits such information to an SDR and in a form that does not disclose the identities, or 

otherwise facilitate identification, of the parties to the Swap.

Rule 418B Publicly Reportable Swap Transactions 

Pursuant to Part 43 and Appendix A to Part 43 of the CFTC Regulations and Part 45 and Appendix 1 to Part 

45 of the CFTC Regulations, CMSEF shall transmit swap transaction and pricing data and minimum primary 

economic terms to a registered SDR as soon as technologically practicable after the publicly reportable swap 

transaction has been executed on or pursuant to the rules of CMSEF.

CMSEF and Participants shall not submit or agree to submit a cancellation or correction for the purpose 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 in Part 43 of the 

CFTC Regulations. 

Rule 418C Reporting Counterparties 

For all swaps executed on CMSEF, each swap counterparty shall provide sufficient information to CMSEF 

to enable CMSEF to report all Required Swap Creation Data to enable CMSEF to report all Required Swap 

Creation Data. To achieve this, each Participant placing an order with respect to any Swap traded on CMSEF 

must include in the order the information required by CMSEF Rule 406(iii). 

In the event that the Reporting Counterparty cannot otherwise be determined because either (a) both counter 

parties counterparties are swap dealers, (b) both counterparties are major swap participants, (c) both 

counterparties are a financial entities as defined by Section 2(h)(7)(C) of the CEA but not a swap dealer or a 

major swap participant, or (d) both counterparties are neither a swap dealer nor a major swap participants nor 

a financial entity as defined by Section 2(h)(7)(C) of the CEA, then the reporting counterparty shall be the 

buyer. 
CMSEF Rulebook CMSEF Page 36

All Reporting Counterparties are required to notify CMSEF in the event the Reporting Counterparty becomes 

aware that an error or omission in reporting has occurred. 

Rule 419 Emergency Rules

In the event of an Emergency, CMSEF may implement temporary Emergency procedures and Emergency 

Rules, subject to the applicable provisions of the CEA and CFTC Regulations. Implementation of Emergency 

Rules shall be done in consultation with the CFTC. Emergency Rules may require or authorize CMSEF, the 

Board, any committee of the Board, the President, or any other Officer to take actions necessary or 

appropriate to respond to the Emergency, including the following actions: 

(i) suspending or curtailing trading or limiting trading to liquidation only (in whole or in part)

(ii) extending or shortening the last trading date for Swaps; 

(iii) ordering the fixing of a settlement price; 

(iv) ordering the liquidation or transfer of an open position in any Swap, or the 

(v) reduction of positions; 

(vi) extending, limiting or changing the Trading Hours; 

(vii) imposing or modifying intraday market restrictions; 

(viii) transferring Customer contracts and the margin in an Emergency; 

(ix) imposing special margin requirements; 

(x) extending or shortening the expiration date of a Swap; 

(xi) altering any Swap’s settlement terms and conditions; 

(xii) imposing or modifying price limits; and/or

(xiii) imposing, modifying or reducing position limits.

Before any Emergency Rule may be adopted and enforced, a required vote of the Board must approve the

implementation of such Emergency Rule at a duly convened meeting requested by the President or any other 

Officer. Directors may attend such a meeting by teleconference. Each Director participating in such meeting 

shall be subject to CMSEF’s Conflict of Interest Rules. If the CEO or CMSEF determines that Emergency 

Rules must be implemented with respect to an Emergency before a meeting of the Board can reasonably be 

convened, then the CEO shall have the authority, without Board action, to implement any Emergency Rules 

with respect to such Emergency that he or she deems necessary or appropriate to respond to such Emergency. 

Whenever CMSEF, the Board, any committee of the Board, or the President takes actions necessary or 

appropriate to respond to an Emergency (including the actions set forth above), an Authorized Representative 

of CMSEF will post a Notice to Participants regarding such Emergency, as soon as practicable. When the 

Board, any committee of the Board or the CEO determines that the Emergency is no longer in effect, 

permitting the SEF operated by CMSEF to resume normal functioning; any such actions responding to an 

Emergency will be terminated. 

CMSEF will use reasonable efforts to notify the CFTC prior to implementing, modifying or terminating an 

Emergency Rule. If such prior notification is not possible or practicable, CMSEF will notify the CFTC as 

soon as possible or reasonably practicable, but in all circumstances within twenty-four (24) hours of the 

implementation, modification or termination of such Emergency Rule. 

Upon taking any action in response to an Emergency, CMSEF will document the decision-making process 

related to such action. Such documentation will be kept for at least five years following the date on which 

the Emergency ceases to exist or to affect the SEF operated by CMSEF, and all such documentation will be 

provided to the CFTC upon request. 
CMSEF Rulebook CMSEF Page 37

Chapter 5Disciplinary 5 Disciplinary Rules

Rule 501 General 

All Participants, Authorized Persons, Authorized Users, Clearing Members, and Participant’s Customers 

shall be subject to the CMSEF’s jurisdiction. Participants, Authorized Persons, Authorized Users, Clearing 

Members, and Participant’s Customers are subject to this Chapter 5 if they, or with respect to a Participant, 

any other Person using any of its User IDs, are alleged to have violated, or to have aided and abetted a 

violation of, or are about to violate, any Rule or any provision of Applicable Law for which CMSEF possesses 

disciplinary jurisdiction. 

CMSEF, through its Compliance Department and the Disciplinary Panel, will conduct Investigations, 

Disciplinary Proceedings and appeals from Disciplinary Proceedings, summary impositions of fines, 

summary suspensions or other summary actions in accordance with this Chapter. 

No CMSEF member of the Board, Officer, Employee, or Agent will interfere or attempt to interfere with any 

Investigation, disciplinary hearing, or summary imposition of a judgment or other summary action.

CMSEF shall permit Participants, Authorized Persons, Authorized Users, Clearing Members, or Participant’s 

Customers to be represented by counsel during any Investigation, disciplinary hearing, or imposition of a 

fine or summary judgment.

CMSEF may hold a Participant or Authorized User liable for, and impose sanctions against such Participant 

or Authorized User for such Person’s own acts and omissions, or those of its agents, representatives or any 

Person or API using a User ID of such Participant or Authorized User. CMSEF may additionally hold a 

Participant liable for the acts and omissions of its Authorized Users. 

CMSEF may delegate any or all of its powers or responsibilities under this Chapter 5 to the RSP, which may 

take any action on behalf CMSEF that the CMSEF is permitted to take hereunder; provided, however, that 

the CMSEF shall retain supervisory authority with respect to such powers and responsibilities and will 

document instances where its actions differ in any material respect from those recommended by the RSP. 

Rule 502 CMSEF’s Right to Inspect Books, Records and Systems

CMSEF’s Compliance Department and CMSEF’s RSP (if any) will have the right to inspect the books, 

records, systems, equipment, and software of Participants, Authorized Persons, Authorized Users, Clearing 

Members and Participant’s Customers.

CMSEF’s Compliance Department and CMSEF’s RSP (if any) will have the right to obtain position and 

trading information directly from Participants as necessary to perform CMSEF’s Oversight functions as set 

forth in this Rulebook. 

Rule 503 Investigations

CMSEF’s Compliance Department or Disciplinary Panels will investigate any matter within CMSEF’s 

disciplinary jurisdiction of which it becomes aware. The Compliance Department will determine the nature 

and scope of its Investigations within its sole discretion and will function independently of any commercial 

interests of CMSEF. An Investigation will be initiated if the Compliance Department or other CMSEF 

Departments determines that a violation of CMSEF may have occurred. The Compliance Department may 

informally contact Participants in order to obtain information. 

Notwithstanding the above, CMSEF will commence an Investigation at the request of the CFTC. 

CMSEF’s Compliance Department has the authority to: 
CMSEF Rulebook CMSEF Page 38

(i) initiate and conduct Investigations; 

(ii) prepare Investigation Reports and make recommendations concerning initiating Disciplinary 

Proceedings; 

(iii) allege violations within CMSEF’s disciplinary jurisdiction; 

(iv) prosecute alleged violations within CMSEF’s disciplinary jurisdiction; and

(v) represent CMSEF on an appeal to an Appeal Panel of any Disciplinary Proceeding, summary 

imposition of fines, summary suspension or other summary action. 

Each Participants, Authorized Persons, Authorized Users, Clearing Members, and Participant’s Customers: 

(i) is obligated to appear, testify and respond in writing to interrogatories within the time 

period required by the Compliance Department in connection with any Rule, any 

Investigation; or any preparation by and presentation during a Disciplinary Proceeding or 

appeal from a decision in a Disciplinary Proceeding, summary imposition of fines, 

summary suspension or other summary action by CMSEF; 

(ii) is obligated to produce books, records, papers, documents or other tangible evidence in his 

possession, custody or control within the time period required by the Compliance 

Department in connection with any Rule, any Investigation, any preparation by and 

presentation during a Disciplinary Proceeding or appeal from a decision in any Disciplinary 

Proceeding, summary imposition of fines, summary suspension or other summary action 

by CMSEF; and 

(iii) may not impede or delay any Investigation, Disciplinary Proceeding, appeal from a 

Disciplinary Proceeding, summary imposition of fines, summary suspension or other 

summary action. 

Rule 504 Reports of Investigations 

CMSEF’s Compliance Department will maintain a log of all Investigations and their disposition. The 

Compliance Department will prepare a written report of each Investigation (the “Investigation Report”), 

regardless of whether the evidence gathered during any Investigation forms a reasonable basis to believe that 

a violation within CMSEF’s jurisdiction has occurred or is about to occur or whether the evidence gathered 

results in closing the matter without further action or through summary action. 

Any Investigation Report will include the reasons for initiating the Investigation (including a summary of the 

complaint, if any), all relevant facts and evidence gathered and the analysis, conclusions and recommendation 

of the Compliance Department. For each potential respondent, the Compliance Department will recommend 

either: 

(i) closing the Investigation without further action; 

(ii) entering into a summary action;

(iii) resolving the Investigation through an informal disposition, including the issuance by the 

Compliance Department of a warning letter (provided that no more than one warning letter for 

the same violation may be issued to the same potential respondent during a rolling 12-month 

period);

(iv) initiating Disciplinary Proceedings; or 

(v) negotiating a settlement. 

An informal disposition (including the issuance of a warning letter by the Compliance Department) will not 

constitute a finding of a violation or a sanction. 

CMSEF’s Compliance Department shall provide the Investigation Report to the Chief Compliance Officer, 

who shall determine whether the Investigation Report is complete.

CMSEF’s Compliance Department shall complete each Investigation in a timely manner and, absent 

mitigating factors, no later than 12 months after the date that such Investigation was opened. 

Rule 505 Opportunity to Respond to Investigation Reports 
CMSEF Rulebook CMSEF Page 39

After completing the Investigation Report, if the evidence gathered during an Investigation forms a 

reasonable basis to believe that a violation within CMSEF’s jurisdiction has occurred or is about to occur,

CMSEF’s Compliance Department may, upon approval of the Chief Compliance Officer, notify each 

potential respondent that the Compliance Department has recommended formal disciplinary charges against 

each such potential respondent. 

The potential respondents shall be notified in writing and shall have fourteen days to respond, unless 

extenuating circumstances require a response sooner.

CMSEF’s Compliance Department may allow a potential respondent to propose a settlement of the matter or 

to submit a written statement explaining why either a Disciplinary Proceeding should not be instituted or one 

or more of the potential charges should not be brought. The potential respondent shall submit such written 

statement within the time limit established by the Compliance Department. 

Rule 506 Review of Investigation Reports 

CMSEF’s Compliance Department will, within 30 days, take one of the following actions: 

(i) If CMSEF’s Compliance Department determines that no reasonable basis exists to believe that a 

violation within CMSEF’s jurisdiction has occurred or is about to occur, it may direct that no 

further action be taken. Upon such determination, the Compliance Department will provide a 

written statement setting forth the facts and analysis supporting the decision. 

(ii) If CMSEF’s Compliance Department determines that Disciplinary Proceedings are unwarranted, it 

may issue a warning letter setting forth, in writing, the facts and analysis supporting the decision. 

(iii) If CMSEF’s Compliance Department determines that additional inquiries or evidence is needed to 

decide whether a reasonable basis exists to believe that a violation within CMSEF’s jurisdiction 

has occurred or is about to occur, it will continue the Investigation. 

(iv) If CMSEF’s Compliance Department determines that a reasonable basis exists to believe that a 

violation within CMSEF’s jurisdiction has occurred or is about to occur, the potential respondent 

will be served with a notice of charges and proceed in accordance with this Chapter 5. 

Rule 507 Warnings

CMSEF’s Compliance Department is authorized to issue a warning letter to an individual or entity subject 

to an Investigation. If a warning letter is issued by the CMSEF’s Compliance Department, it shall not be 

considered an indication that a violation has occurred. Only one warning letter may be issued to the same 

individual or entity per violation per year.

Rule 508 Notice of Charges 

If CMSEF’s Compliance Department authorizes Disciplinary Proceedings pursuant to these Rules, it will 

prepare, and serve in accordance with these Rules, a notice of charges. 

A notice of charges will: 

(i)(i) state the acts, practices or conduct in which the respondent is alleged to have engaged; 

(ii)(ii) state the Rule alleged to have been violated or about to be violated; 

(iii)(iii) advise the respondent of its right to a hearing and its right to be represented by legal counsel 

or any other representative of its choosing (other than a Director, Officer or Employee of 

CMSEF, any member of the Disciplinary Panel or any Person substantially related to the 

Disciplinary Proceedings such as a material witness or other respondent) in all succeeding 

stages of the disciplinary process; 
CMSEF Rulebook CMSEF Page 40

(iv)(iv) state the period of time within which the respondent can request a hearing on the notice of 

charges, which will not be less than 20 days after service of the notice of charges; 

(v)(v) advise the respondent that any failure to request a hearing within the period stated, except 

for good cause, will be deemed to constitute a waiver of the right to a hearing; and 

(vi)(vi) advise the respondent that any allegation in the notice of charges that is not expressly 

denied will be deemed to be admitted. 

Rule 509 Service of Notice of Charges 

CMSEF shall serve notice of charges or other documents contemplated to be served pursuant to this Chapter 

5 to a contact designated by each Participant. CMSEF may serve such notice (and service shall be deemed 

complete) to the respondent personally, or by deposit in the United States mail, postage prepaid, via registered 

or certified mail addressed to the respondent at the address as it appears in records of CMSEF. Notice of 

Charges may also be served by electronic mail to the respondent’s electronic mail address as it appears on 

the books and records of CMSEF, if followed by a hard copy of the document sent promptly thereafter by 

registered or certified mail addressed to the respondent at the respondent’s address as it appears in records of 

CMSEF. 

Rule 510 Answer to Notice of Charges 

If the respondent determines to answer a notice of charges, the respondent must file an answer within 20 days 

after being served with such notice, or within such other time period determined appropriate by the Chief 

Compliance Officer. 

To answer a notice of charges, the respondent must in writing: 

(i)(i) for each allegation set forth in the notice of charges, admit such allegation, deny such 

allegation, or affirmatively state that the respondent does not have and is unable to obtain 

sufficient information to admit or deny such allegation, which shall have the effect of a 

denial of such allegation; 

(ii)(ii) specify any specific facts that contradict the notice of charges; 

(iv) (iv)specify any affirmative defenses to the notice of charges; 

(iv)(iv) sign and serve the answer on the Chief Compliance Officer; and 

(v)(v) if applicable, request a hearing before a Disciplinary Panel. 

Any failure by the respondent to serve a timely answer to a notice of charges will be deemed to be an 

admission to the allegations in such notice. Any failure by the respondent to answer one or more allegations 

in a notice of charges will be deemed to be an admission of that allegation or those allegations. Any allegation 

in a notice of charges that the respondent fails to deny will be deemed to be admitted. A general denial by 

the respondent, without more, will not satisfy the requirements of the second paragraph of this Rule. 

If a respondent admits or fails to specifically deny any of the allegations in the notice of charges, the 

Disciplinary Panel shall find that the violations set forth in such allegations have been committed and shall 

impose a sanction for such violations. The Disciplinary Panel shall promptly notify the respondent in writing 

of any sanction imposed pursuant to this Rule and advise the respondent that the respondent may request a 

hearing on such sanction within 20 days of the respondent being served with such notice. Any failure by the 

respondent to do so will be deemed to be an acceptance of the sanctions in such notice and waiver of any 

right to appeal such sanctions. 

A respondent shall be granted a hearing before a Disciplinary Panel for every instance in which such 

respondent either denies an allegation and requests a hearing in accordance with this Rule; or requests a 

hearing in accordance with this Rule.

Rule 511 Right to a Hearing

All respondents who have denied a charge shall be afforded the opportunity for a hearing. The hearing 

must concern only those charges, which the respondent has denied.
CMSEF Rulebook CMSEF Page 41

Rule 512 Settlements 

A respondent or potential respondent may at any time propose in writing an offer of settlement to anticipated 

or instituted Disciplinary Proceedings. Any offer of settlement should contain proposed findings and 

sanctions and be signed by the respondent or potential respondent and submitted to the Compliance 

Department, and shall take into account, among other things, the disciplinary history of the respondent or 

potential respondent. A respondent or potential respondent may offer to settle Disciplinary Proceedings 

without admitting or denying the findings contained in the order of the Disciplinary Proceedings but must 

accept the jurisdiction of CMSEF over it and over the subject matter of the proceedings and consent to the 

entry of the findings and sanctions imposed. 

If a respondent or potential respondent submits an offer of settlement in accordance with paragraph (a) of 

this Rule, the Compliance Department will forward the offer to the Disciplinary Panel with a recommendation 

on whether to accept or reject the offer. The respondent or potential respondent may withdraw such offer of 

settlement at any time before acceptance by the Disciplinary Panel, but may not withdraw such offer at any 

time after acceptance by the Disciplinary Panel. 

The Disciplinary Panel may accept the offer of settlement, but may not alter the terms of a settlement offer 

unless the respondent or potential respondent agrees. 

If an offer of settlement is accepted by the Disciplinary Panel, it shall issue a written decision specifying: 

(i)(i) the Rule violations it has reason to believe were committed, including the basis or reasons 

for its conclusions; 

(ii)(ii) any sanction to be imposed, which must include full Customer restitution where Customer

harm has been demonstrated; and 

(iii)(iii) if applicable, that the respondent has accepted the sanctions imposed without either 

admitting or denying the Rule violations. 

In the event that the Disciplinary Panel accepts an offer of settlement without the agreement of the 

Compliance Department, the decision must adequately support such acceptance. 

If an offer of settlement is accepted and the related order of Disciplinary Proceedings becomes final, the 

respondent’s submission of the offer will be deemed to constitute a waiver of the right to notice, opportunity 

for a hearing and review and appeal under these Rules. 

If the offer of settlement of a respondent or potential respondent is not accepted by the Disciplinary Panel, 

fails to become final or is withdrawn by the respondent or potential respondent before its acceptance by the 

Disciplinary Panel, the matter will proceed as if the offer had not been made and the offer and all documents 

relating to it will not become part of the record. Neither a respondent or potential respondent nor the 

Compliance Department may use an unaccepted offer of settlement as an admission or in any other manner 

at a hearing of, or appeal from, Disciplinary Proceedings. 

Rule 513 Disciplinary Panels 

The Disciplinary Panel shall conduct hearings in connection with any Disciplinary Proceedings (except for 

summary impositions of fines pursuant to these Rules), to make findings, render decisions, and impose 

sanctions pursuant to this Chapter 5. 

Each Disciplinary Panel shall be composed of three individuals selected by the Chief Compliance Officer. 

Except in cases limited to the timely submission of accurate records, each Disciplinary Panel shall consist of 

an individual who would not be disqualified from serving as a Public Director, who shall chair the 

Disciplinary Panel. 

No member of the Compliance Department may serve on a Disciplinary Panel. 
CMSEF Rulebook CMSEF Page 42

Except as may otherwise be provided in these Rules, the Board may at any time remove any member of a 

Disciplinary Panel for cause. 

Within 10 days of being notified of the appointment of the Disciplinary Panel, a respondent may seek to 

disqualify any individual named to the Disciplinary Panel for the reasons identified in these Rules, by serving 

written notice on the Chief Compliance Officer and providing a copy thereof to the chairman of the 

Disciplinary Panel. By not timely filing a request for disqualification, the respondent will be deemed to have 

waived any objection to the composition of a Disciplinary Panel. The Chief Compliance Officer will decide 

in his sole discretion the merits of any request for disqualification. Any such decision will be final and not 

subject to appeal. 

All information, records, materials and documents provided to the Disciplinary Panel and all deliberations, 

testimony, information, records, materials and documents related thereto shall be treated as non-public and 

confidential and shall not be disclosed, except as necessary to further an Investigation or as otherwise required 

by law. No individual shall serve on a Disciplinary Panel unless that individual has agreed in writing that he 

will not publish, divulge, or make known in any manner facts or information regarding the business of any 

Person or other information which may come to his or her attention in his official capacity as a member of 

the Disciplinary Panel, except:

a. when reporting to the Board or to a Standing Committee concerned with such 

information;

b. when reporting to the Compliance Department;

c. when requested by the CFTC or other government agency; or 

d. when compelled to testify in any judicial or administrative proceeding. 

Rule 514 Convening Hearings of Disciplinary Proceedings 

All Disciplinary Proceedings (except for summary impositions of fines pursuant to these Rules) will be 

conducted at a hearing before a Disciplinary Panel. Hearings will be conducted fairly, privately and 

confidentially. Notwithstanding the confidentiality of hearings, the Disciplinary Panel may appoint an expert 

to attend any hearing and assist in deliberations if such expert agrees to be subject to an appropriate 

confidentiality agreement. 

After reasonable notice to each respondent, the Disciplinary Panel will promptly convene a hearing to 

conduct the Disciplinary Proceedings with respect to such respondent. Parties to a Disciplinary Proceeding

include each respondent and the Compliance Department. 

The chairman of the Disciplinary Panel may continue, adjourn or otherwise conduct the hearing, as he may 

deem appropriate. The chairman of the Disciplinary Panel will determine all procedural and evidentiary 

matters, including the admissibility and relevance of any evidence proffered. In determining procedural and 

evidentiary matters, the chairman of the Disciplinary Panel will not be bound by any evidentiary or procedural 

rules of law. Once admitted during the hearing, the Disciplinary Panel may consider, and attach the weight 

it believes appropriate to, evidence or other materials. CMSEF’s Legal Department will provide guidance to 

the chairman of the Disciplinary Panel on the conduct of the hearing. 

Except for procedural and evidentiary matters decided by the chairman of the Disciplinary Panel pursuant to 

these Rules, unless each respondent otherwise consents, the entire Disciplinary Panel must be present during 

the entire hearing and any related deliberations. 

Rule 515 Respondent Review of Evidence 

Prior to the commencement of a hearing, each respondent will be given the opportunity, subject to the sections 

below, to review all books, records, documents, papers, transcripts of testimony and other tangible evidence 

in the possession or under the control of CMSEF that the Compliance Department will use to support the 

allegations and proposed sanctions in the notice of charges or which the chairman of the Disciplinary Panel 

deems relevant to the Disciplinary Proceedings. Notwithstanding the foregoing, no respondent will have the 

right to review, and CMSEF will have no obligation to disclose, any information protected by attorney-client 
CMSEF Rulebook CMSEF Page 43

privilege. All requests for such information must be made not less than 10 days prior to the scheduled hearing 

date, unless the chairman of the Disciplinary Panel agrees otherwise. 

If any books, records, documents, papers, transcripts of testimony, or other tangible evidence contain 

information that could adversely affect the competitive position of the Person providing the information or 

if such information might compromise other Investigations being conducted by the Compliance Department, 

the Compliance Department may redact, edit or code such information before furnishing it to the respondent. 

Notwithstanding anything in this Rule to the contrary, the Compliance Department: 

(i)(i) will not redact, edit or code competitive or investigative information contained in 

documents in a manner that would materially impair the respondent’s ability to defend 

against the allegations or proposed sanctions in the notices of charges, and 

(ii)(ii) will provide the respondent with access to the information and portions of the documents 

that the Compliance Department intends to rely on to support the allegations or proposed 

sanctions in the notice of charges. 

For purposes of these Rules, information that could adversely affect competitive positions includes positions 

in Swaps currently held, trading strategies employed in establishing or liquidating positions, the identity of 

any Participant or Authorized User and the personal finances of the Person providing the information. 

The respondent shall treat as confidential all data and information provided to it pursuant to these Rules, and 

shall not disclose any such data or information, except as necessary to the respondent’s defense of notice of 

charges and any appeal of the decision of the Disciplinary Panel.

Rule 516 Conducting Hearings of Disciplinary Proceedings 

At a hearing conducted in connection with any Disciplinary Proceedings, the Compliance Department will 

present its case supporting the allegations and proposed sanctions in the notice of charges to the Disciplinary 

Panel. If a respondent has timely filed an answer to the notice of charges in accordance with these Rules, the 

respondent is entitled to attend and participate in the hearing. 

At a hearing conducted in connection with any Disciplinary Proceedings, the Compliance Department and 

each respondent may: 

(i)(i) present evidence and facts determined relevant and admissible by the chairman of the 

Disciplinary Panel; 

(ii)(ii) call and examine witnesses; and 

(iii)(iii) cross-examine witnesses called by other parties. 

If the respondent fails to file an answer, has filed a general denial, or if any or all of the allegations in the 

notice of charges are not expressly denied in the respondent’s answer, the chairman of the Disciplinary Panel 

may limit evidence concerning any allegations not expressly denied in determining the sanctions to impose. 

If a respondent fails to file an answer but appears at the hearing, the respondent may not participate in the 

hearing (by calling or cross-examining witnesses, testifying in defense, presenting evidence concerning the 

notice of charges, or otherwise) unless the Disciplinary Panel determines that the respondent had a 

compelling reason for failing to file a timely answer. If the Disciplinary Panel determines that the respondent 

had a compelling reason for failing to file a timely answer, the Disciplinary Panel will adjourn the hearing 

and direct the respondent to promptly file the written answer in accordance with these Rules. 

Any Person entitled, or required or called upon, to attend a hearing before a Disciplinary Panel pursuant to 

this Rule will be given reasonable notice, confirmed in writing, specifying the date, time and place of the 

hearing, and the caption of the Disciplinary Proceedings. CMSEF will require all Authorized Persons and 

Authorized Users that are called as witnesses to appear at the hearing and produce evidence. CMSEF will 

make reasonable efforts to secure the presence of all other Persons called as witnesses whose testimony would 

be relevant. 
CMSEF Rulebook CMSEF Page 44

If during any Disciplinary Proceedings the Disciplinary Panel determines that a reasonable basis exists to 

believe that the respondent violated a Rule or a provision of Applicable Law other than the violations alleged 

in the notice of charges, the Disciplinary Panel may consider those apparent violations after providing the 

respondent with an opportunity to answer the additional allegations in accordance with these Rules. In 

connection with considering apparent violations pursuant to this Rule, the Disciplinary Panel may request 

that the Compliance Department provide the Disciplinary Panel with any additional information. 

The Disciplinary Panel may summarily impose sanctions on any Participant, Authorized Person, or 

Authorized User that impedes or delays the progress of a hearing. 

CMSEF will arrange for any hearing conducted in connection with Disciplinary Proceedings to be recorded 

hearing verbatim, or substantially verbatim, in a manner capable of accurate transcription. The record shall 

not be transcribed unless requested by CTFC staff or the respondent or the decision is appealed. If the 

respondent requests a copy of all or portions of the recording of a hearing, the chairman of the Disciplinary 

Panel may within his sole discretion order the respondent to pay the costs for transcribing the recording of 

the hearing. 

No interlocutory appeals of rulings of any Disciplinary Panel or chairman of the Disciplinary Panel are 

permitted. 

Rule 517 Decision of Disciplinary Panel 

As promptly as reasonable following a hearing, the Disciplinary Panel will issue an 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 Disciplinary Panel will constitute the decision of the Disciplinary Panel. 

CMSEF will serve a copy of the order of the Disciplinary Panel on the respondent and the Compliance 

Department. The order will include: 

(i)(i) the notice of charges or summary of the allegations; 

(ii)(ii) the answer, if any, or a summary of the answer; 

(iii)(iii) a brief summary of the evidence introduced at the hearing (or, where appropriate, incorporation 

by reference of the Investigation Report); 

(iv)(iv) findings of fact and conclusions concerning each allegation, including each specific Rule that 

the respondent is found to have violated; 

(v)(v) the imposition of sanctions, if any, the basis for the sanctions, and effective date of each 

sanction; and 

(vi)(vi) notice of the respondent’s right to appeal pursuant to these Rules. 

A Disciplinary Panel shall be dissolved automatically when it has decided the matter for which it was 

appointed and has notified the respondent and the Chief Compliance Officer in writing of its decision. 

Unless a timely notice of appeal is filed pursuant to these Rules, the order of the Disciplinary Panel will 

become final upon the expiration of 20 days after the order is served on the respondent and a copy thereof is 

provided to the Compliance Department. 

CMSEF will notify the Person subject to a Disciplinary Panel decision within thirty days of the action taken 

against such Person. 

Rule 518 Sanctions 

After notice and opportunity for hearing in accordance with these Rules, CMSEF will impose sanctions if 

any Participants, Authorized Persons, Authorized Users, Clearing Members, and Participant’s Customers, or 

other Person using any of the Participant’s User IDs is found to have violated or to have attempted to violate 

a Rule or provision of Applicable Law for which CMSEF possesses disciplinary jurisdiction. Any such 

sanctions shall take into account the respondent’s disciplinary history (if any). CMSEF may impose one or 

more of the following sanctions or remedies: 
CMSEF Rulebook CMSEF Page 45

(i) a warning letter, provided that no more than one warning letter may be issued to the same 

respondent found to have committed the same rule violation within a rolling 12-month period; 

(ii) censure; 

(iii) limitation, restriction or qualification of Trading Privileges or other activities, functions or 

operations; 

(iv) suspension of Trading Privileges for a period not to exceed 12 months; 

(v) fine (subject to this Rule); 

(vi) restitution or disgorgement (in the event of a Customer harm, full Customer restitution, except 

where the amount of restitution or to whom it should be provided cannot reasonably be 

determined); 

(vii) termination of Trading Privileges; 

(viii) expulsion; or 

(ix) any other sanction or remedy deemed to be appropriate. 

CMSEF will consider the severity of the violation and the deterrent effect when determining an appropriate 

sanction.

CMSEF may impose a fine of up to $100,000 for each violation. If a fine or other amount is not paid within 

30 days of the date that it becomes payable, then interest will accrue on the sum from the date that it became 

payable at the quoted prime rate plus three per cent. CMSEF has sole discretion to select the bank on whose 

quotations to base the prime rate. Each Participant will be responsible for paying any fine or other amount 

imposed on, but not paid by, any of its Authorized Persons or Authorized Users. 

Rule 519 Appeal from Disciplinary Panel Decision, Summary Impositions of Fines and Other Summary Actions 

Each respondent found by the Disciplinary Panel to have violated (or, in the case of a Participant, whose 

Authorized User, Clearing Member or other Person using its User ID was found to have violated) a Rule or 

who is subject to any summary fine imposed pursuant to these Rules or any summary action imposed pursuant 

to these Rules may appeal the decision within 20 days of receiving the order of the Disciplinary Panel or the 

notice of summary action, as the case may be, by filing a notice of appeal with the Chief Compliance Officer. 

The Compliance Department may appeal all or any part of a decision of the Disciplinary Panel, including 

any sanctions that may or may not have been imposed by the Disciplinary Panel, within 20 days of receiving 

the order of the Disciplinary Panel, by filing a notice of appeal with the Chief Compliance Officer. 

While an appeal is pending, the effect of the order of the Disciplinary Panel or the summary action (including 

any sanctions, remedies or costs imposed thereby) shall be suspended. 

The notice of appeal must state in writing the grounds for appeal, including the findings of fact, conclusions 

or sanctions to which the respondent objects. An appellant may appeal the order of the Disciplinary Panel or 

any summary action on the grounds that: 

(i) the order or summary action was arbitrary, capricious, an abuse of discretion, or not in 

accordance with these Rules; 

(ii) the order or summary action exceeded the authority or jurisdiction of the Disciplinary Panel, 

the Chief Compliance Officer or CMSEF; 

(iii) the order or summary action failed to observe required procedures; 

(iv) the order or summary action was unsupported by the facts or evidence; or 

(v) the sanctions, remedies or costs, which were imposed, were inappropriate or unsupported by 

the record. 

The Chief Compliance Officer will forward copies of any notice of appeal received by it to all parties to the 

Disciplinary Proceeding or summary action, as the case may be, except the appellant. On or before the 20th 

day after filing a notice of appeal, the appellant must file with the Chief Compliance Officer and serve on the 

Compliance Department a brief supporting the notice of appeal and documents supporting the brief. On or 

before the 20th day after the date on which the appellant serves their supporting brief, the appellee must file 
CMSEF Rulebook CMSEF Page 46

and serve its brief in opposition. On or before the 10th day after the date on which the appellee serves its 

brief in opposition, the appellant must file and serve a brief in reply on the Compliance Department. 

In connection with any appeal, the Compliance Department will furnish to the Chief Compliance Officer and 

to the respondent/appellant a transcript of the hearing, any exhibits introduced at the hearing, the notice of 

appeal and briefs filed to support and oppose the appeal. 

No later than 30 days after the last submission filed pursuant to this Rule, the Chief Compliance Officer will 

appoint an Appeals Panel to consider and determine the appeal. An Appeals Panel shall be comprised of

three individuals, none of whom shall be a member of the Compliance Department or have been a member 

of any Disciplinary Panel involved in the matters on appeal. The chairman of the Appeals Panel shall be an 

individual who would not be disqualified from serving as a Public Director. 

Within 10 days of being notified of the appointment of the Appeals Panel, a respondent may seek to disqualify 

any individual named to the Appeals Panel for the reasons identified in these Rules, by serving written notice 

on the Chief Compliance Officer. By not filing a timely request for disqualification, the respondent will be 

deemed to have waived any objection to the composition of the Appeals Panel. The Chief Compliance 

Officer will decide the merits of any request for disqualification within his or her sole discretion. Any such 

decision will be final and not subject to appeal. 

The Appeals Panel may hold a hearing to allow parties to present oral arguments. Any hearing will be 

conducted privately and confidentially. Notwithstanding the confidentiality of hearings, the Appeals Panel 

may appoint an expert to attend any hearing and assist in the deliberations if such individuals agree to be 

subject to appropriate confidentiality agreements. In determining procedural and evidentiary matters, the 

Appeals Panel will not be bound by evidentiary or procedural rules or law. 

The Appeals Panel will only consider on appeal the record before the Disciplinary Panel or, in the case of a 

summary action, the record considered by the Chief Compliance Officer, the notice of appeal, the briefs filed 

in support and opposition of the appeal, and any oral arguments of the parties. The Appeals Panel may only 

consider new evidence when the Appeals Panel is satisfied that good cause exists for why the evidence was 

not introduced during the Disciplinary Proceeding or when imposing the summary action. 

After completing its review, the Appeals Panel may affirm, modify or reverse any order of the Disciplinary 

Panel or summary action under appeal, in whole or in part, including increasing, decreasing or eliminating 

any sanction or remedy imposed, imposing any other sanction or remedy authorized by these Rules, or 

remanding the matter to the same or a different Disciplinary Panel for further Disciplinary Proceedings or 

for reconsideration by the Chief Compliance Officer in the case of summary action. The Appeals Panel may 

order a new hearing for good cause or if the Appeals Panel deems it appropriate. 

As promptly as reasonably possible following its review, the Appeals Panel will issue a written decision on 

appeal rendering its decision based on the weight of the evidence before the Appeals Panel. The decision of 

the Appeals Panel will include a statement of findings of fact and conclusions for each finding, sanction, 

remedy and cost reviewed on appeal, including each specific Rule and provision of Applicable Law that the 

respondent is found to have violated, if any, and the imposition of sanctions, remedies and costs, if any, and 

the effective date of each sanction, remedy or cost. 

The Appeals Panel’s written order on appeal (including findings of fact and conclusions and the imposition 

of sanctions, remedies and costs, and the effective date of any sanction, remedy cost) will be the final action 

of CMSEF and will not be subject to appeal within CMSEF.

Rule 520 Summary Imposition of Fines 

The Chief Compliance Officer may summarily impose a fine against a Participant (on behalf of itself or any 

of its Authorized Persons, Authorized Users, or Customers, or other Persons using any of its User IDs), 

Clearing Member, or Authorized User for failing: 

(i)(i) to timely pay fees, cost, charges or fines to CMSEF or a DCO; 
CMSEF Rulebook CMSEF Page 47

(ii)(ii) to make timely and accurate submissions to CMSEF of notices, reports or other 

information required by these Rules; and 

(iii)(iii) to keep any books and records required by these Rules. 

The Compliance Department, acting on behalf of the Chief Compliance Officer, will give notice of any fine 

imposed pursuant to this Rule to each Participant or Authorized User subject thereto. The notice will specify:

(i) the violation of these Rules for which the fine is being imposed;

(ii) the date of the violation; and 

(iii) the amount of the fine. Within 20 days of serving the notice of fine, the Participant, or 

Authorized User, as the case may be, must either pay or cause the payment of the fine or 

file notice of an appeal pursuant to these Rules. Unless timely notice of appeal is filed 

pursuant to these Rules, the fine will become final upon the expiration of 20 days after the 

notice of fine is served on the Participant, or Authorized User, as the case may be. 

CMSEF will set the amount of any fines imposed pursuant to this Rule, with the maximum fine for each 

violation not to exceed $5,000. Summary imposition of fines pursuant to this Rule will not preclude CMSEF 

from bringing any other action against the Participant, or Authorized User, as the case may be. 

Rule 521 Summary Suspensions and Other Summary Actions 

Notwithstanding anything in these Rules to the contrary, if the Chief Compliance Officer reasonably believes 

that immediate action is necessary to protect the best interests of CMSEF or the marketplace, the Chief 

Compliance Officer may, after consultation with the Regulatory Oversight Committee summarily suspend, 

revoke, limit, condition, restrict or qualify the Trading Privileges of a Participant or Authorized User and 

take other summary action against a Participant or any of its Authorized Users in accordance with these 

Rules. 

Whenever practicable, the Compliance Department, acting on behalf of the Chief Compliance Officer, shall 

provide prior written notice to the party against whom any action in accordance with this Rule shall be taken. 

If prior notice is not practicable, CMSEF will give notice at the earliest possible opportunity to the respondent 

against whom the action is brought. The Compliance Department, acting on behalf of the Chief Compliance 

Officer, will prepare a notice of summary action (which will state the action, the reasons for the action, and 

the effective time, date and duration of the action) and serve the notice on such party and advise the recipient 

of the notice of its right to a prompt hearing before a Disciplinary Panel and its right to be represented by 

legal counsel or other representative at such hearing. A request by the recipient of the notice for such a 

hearing shall not delay the effectiveness of the summary action. 

At the request of CMSEF, a respondent against whom a summary action is brought pursuant to this Rule 

must provide books and records over which the respondent has access or control and must furnish information 

to, or appear or testify before, CMSEF or the Disciplinary Panel with the enforcement of any Rule. 

If a hearing is requested pursuant to this Rule, the Disciplinary Panel will promptly convene a hearing to be 

conducted in accordance with these Rules.

As promptly as reasonably possible after the hearing, the Disciplinary Panel will issue to the respondent a 

written order affirming, modifying, or reversing the summary action. The order will include a description of 

the summary action taken, a summary of the evidence introduced at the reinstatement hearing, a statement of 

findings of fact and conclusions, a description of any action taken or to be taken by CMSEF, and the effective 

date, time and duration thereof. 

Any decision of a Disciplinary Panel pursuant to this Rule will be the final action of CMSEF, and not subject 

to appeal within CMSEF upon serving the respondent with a copy of the decision. 

Rule 522 Reinstatement after Summary Suspension 
CMSEF Rulebook CMSEF Page 48

A respondent whose Trading Privileges are suspended, revoked, limited, conditioned, restricted or qualified 

pursuant to these Rules may apply for reinstatement by filing with the Compliance Department a written 

request stating the applicant’s reasons for seeking reinstatement. CMSEF will not consider a respondent’s 

request for reinstatement if the respondent 

(i)(i) owes any fines, fees, charges or costs to CMSEF, 

(ii)(ii) continues to fail to appear at Disciplinary Proceedings without good cause or 

(iii)(iii) continues to impede the progress of Disciplinary Proceedings. 

Within a reasonable period after the filing of a request for reinstatement, the Appeals Panel will conduct a 

hearing to consider the request. At the hearing for reinstatement, the respondent will present its, his case 

supporting the reinstatement and the Compliance Department, acting on behalf of the Chief Compliance 

Officer may, in its discretion, present its case opposing or supporting the reinstatement and each may present 

relevant and admissible evidence and facts and call, examine and cross-examine witnesses. At the hearing 

for reinstatement, CMSEF may require Participants, Authorized Persons, Authorized Users, Clearing 

Members, or Participant’s Customers to appear as witnesses and produce evidence if the Appeals Panel 

determines that the evidence is relevant. 

As promptly as reasonably possible after a reinstatement hearing, the Appeals Panel will issue an order 

reinstating, denying the reinstatement, or placing conditions on the reinstatement of the Trading Privileges 

of the respondent. The order will include a brief summary of the evidence introduced at the reinstatement 

hearing; and, if applicable, findings of fact and conclusions not contained in the notice of summary action 

issued pursuant to these Rules. The order of the Appeals Panel may not be appealed. 

Rule 523 Rights and Responsibilities after Suspension or Termination 

When the Trading Privileges of a Participant or Authorized User are suspended for a period of 12 months or 

less, none of its rights and Trading Privileges (including the right to hold oneself out to the public as a 

Participant or Authorized User or enter Orders or RFQs into the SEF and receive Participant rates for fees, 

costs, and charges and deposit margin at Participant levels) will apply to such Participant, Authorized Person 

or Authorized User during the period of the suspension, except for the right to assert claims against others as 

provided in these Rules. Any such suspension will not affect the rights of creditors under these Rules or 

relieve the Participant or Authorized User of its obligations under these Rules to perform any Swaps entered 

into before the suspension, or for any Company fees, costs, or charges incurred during the suspension. 

CMSEF may discipline a suspended Participant, Authorized Person or Authorized User under this Chapter 5 

for any violation of a Rule or provision of Applicable Law committed by the Participant or Authorized User 

before, during or after the suspension.

When the Trading Privileges of a Participant or Authorized User are terminated, all of its rights and Trading 

Privileges will terminate, except for the right of the Participant, Authorized Person or Authorized User in 

question to assert claims against others, as provided in these Rules. Any such termination will not affect the 

rights of creditors under these Rules. A terminated Participant or Authorized User may only seek to reinstate 

his Trading Privileges by providing CMSEF with satisfactory evidence that he complies with these Rules. 

CMSEF will not consider the application of a terminated Participant or Authorized User if such Participant 

or Authorized User, as the case may be, fails to appear at Disciplinary Proceedings without good cause or 

impedes the progress of Disciplinary Proceedings. 

A suspended or terminated Participant or Authorized User remains subject to these Rules and the jurisdiction 

of CMSEF for any acts or omissions prior to the suspension or termination, and must cooperate in any 

Investigation, Disciplinary Proceeding, appeal from Disciplinary Proceedings, summary suspension or other 

summary action as if the suspended or terminated Participant or Authorized User still had Trading Privileges. 

Rule 524 Notice of Disciplinary Proceedings 

CMSEF will provide written notice of Disciplinary Proceedings to the parties and the RSP consistent with 

applicable CFTC Regulations. Whenever CMSEF suspends, expels, fines or otherwise disciplines, or denies 

any Person access, to CMSEF, CMSEF will make the public disclosures required by CFTC Regulations.
CMSEF Rulebook CMSEF Page 49

Rule 525 CFTC Review of CMSEF Actions

The review by the CFTC, pursuant to section 8c of the Act, as amended, of any suspension, expulsion, 

disciplinary or access denial action, or other adverse action by CMSEF, shall be governed by Part 9 of the 

CFTC’s Regulations.

Chapter 6 Miscellaneous

Rule 601 Gifts and Gratuities 

Except with the prior written approval of the Chief Compliance Officer, no Participant, Authorized Person, 

or Authorized User shall, directly or indirectly, give or permit to be given anything of value, including gifts 

and gratuities, to any CMSEF member of the Board, Officer, Employee, or Agent of CMSEF.

Rule 602 Rule Violations

CMSEF shall consider it a violation of these Rules for a Participant, Authorized Person, Authorized User, or 

Customer of a Participant to knowingly violate the terms of any agreement made with CMSEF.

Rule 603 Market Data

CMSEF owns all rights, title and interest in and to all intellectual property and other proprietary rights 

(including all copyright, patent, trademark or trade secret rights) in any and all Market Data, and all derivative 

works based thereon, generated in the course of the operations of CMSEF. 

Participants, and other Persons affiliated with any of the foregoing may not distribute, sell or retransmit 

Market Data to any third party without the consent of CMSEF, with the exception of information about 

specific trades executed on CMSEF by the Participant or other Person affiliated with the Participant. 

CMSEF may share such proprietary data or personal information with one or more registered entities (as 

such term is defined in CFTC Regulations).

CMSEF is prohibited from the use any proprietary data or personal information obtained through the course 

of its regulatory role to further any commercial any business interest, without express permission. Such 

information includes, but is not limited to:

1. Records or data obtained through CMSEF’s surveillance of Participants; 

2. Records or data obtained related to a CMSEF Enforcement Action or Investigation; and

3. Records or data obtained from Participants by request

Access to the SEF may not in any way be conditioned upon the Participant agreeing to allow CMSEF to use 

its proprietary records or data. Such agreement must be in the form of independent, affirmative consent via 

separate signature from the Participant that CMSEF is collecting data or personal information for CMSEF’s

regulatory role. 

Rule 604 Publication of Trading Information

As required by SEF Core Principle 9 and Parts 37 and 16 of the CFTC Regulations, CMSEF will publish 

information about trading activities on CMSEF. CMSEF will publish such information in a timely manner.

Rule 605 Anti-Money Laundering
CMSEF Rulebook CMSEF Page 50

CMSEF requires all of its Participants to ensure that they “know their Customers and Employees”. CMSEF 

requires that all Participants, their Approved Persons and Approved Users agree to not knowingly assist any 

money laundering or other illicit business and will not knowingly assist or be a conduit for terrorist financing.

CMSEF may require that Participants provide evidence to prove that Participants’ Customers are not 

Specifically Designated Nations or Blocked Persons as designated by the Office of Foreign Assets Control 

of the U.S. Department of the Treasury.

Rule 606 Swaps Trading by CMSEF Officials

CMSEF prohibits members of the Board, Officers, Employees, and independent contractors from trading, 

directly or indirectly, any Swap traded on CMSEF or any other SEF where such individual has access to 

material non-public information concerning such Swap. Swaps traded by retirement plans or retirement 

investments where the individual is not involved in the decision making process shall not be deemed to 

constitute trading directly or indirectly in a Swap.

Rule 607 Confidentiality

With the following exceptions, CMSEF shall hold in confidence all non-public information provided by a 

Participant, Customer of a Participant or Authorized User:

(i) when legally requested by a Government Agency or the regulatory authority (foreign or 

domestic);

(ii) to a SDR, DCO, or other entity for the purposes of clearing a Swap;

(iii) to a Regulatory Services Provider;

(iv) when required as part of a legal proceeding;

(v) as part of an Investigation into market abuses or Disciplinary Proceedings;

(vi) with the consent of the Participant; and

(vii) any other reason permitted by these Rules.

Rule 608 Information-Sharing Agreements 

As required by Applicable Law, from time to time CMSEF may enter into information-sharing agreements 

to coordinate surveillance with domestic or foreign regulators, self-regulatory organizations, clearing 

organizations, exchanges, markets or other execution facilities to share information. 

Under such information-sharing agreements, CMSEF may:

(i) share information about current and former Participants;

(ii) share information about current and ongoing Investigations;

(iii) share information about CMSEF market activity; and

(iv) require Participants to provide detailed information about their activities, Customers and staff.

Rule 609 Rule Changes Due to Changes in Government Regulations

CMSEF may, from time to time, amend or repeal any Rule and/or adopt new Rules as required to remain in 

compliance with a CFTC or CEA Rules or Regulations. All new Rules, amendments or repeals of a Rule or 

adoption of a new Rule, shall take effect upon the effective date adopted by CMSEF.

Any and all such changes shall be binding on all Participants, Authorized Officials, Authorized Users, and 

Customers of Participants of the CMSEF. 

CMSEF may, in its sole discretion, waive, or extend the time period for performing, any act or acts designated 

by these Rules, but only to the extent that such waiver or extension is not inconsistent with the CEA or CFTC 

Regulations

Rule 610 Governing Law
CMSEF Rulebook CMSEF Page 51

Any disputes between CMSEF and a Participant, a Participant’s Authorized Person or Authorized User or a 

Customer of a Participant shall be governed by, and construed in accordance with, the laws of the State of 

New York applicable to contracts executed and performed wholly within the State of New York, without 

regard to any provisions of New York law that would apply the substantive law of a different jurisdiction. 

Any legal actions against CMSEF, its members of the Board, Officers, Employees, or agents must be brought 

within one year from the date of the event that caused the accrued. Legal actions against CMSEF shall be 

brought in the State or Federal courts located within the Borough of Manhattan in the City of New York. 

Participants, Authorized Persons, Authorized Users, and Customers of Participants who fail to prevail in a 

lawsuit or other legal proceeding against CMSEF or its members of the Board, Officers, Employees or Agents 

shall reimburse CMSEF for all expenses, including reasonable attorneys’ fees, incurred by CMSEF or its 

members of the Board, Officers, Employees or Agents by CMSEF in the defense of such proceedings. 

Rule 611 Force Majeure

CMSEF shall not be obligated to perform its obligations under these Rules or any agreement with a 

Participant, or to compensate any Participant or a Participant’s Customer for losses as a result of any

circumstances that CMSEF determines, in its sole discretion, may have an adverse effect upon the functions 

and facilities of CMSEF. For the avoidance of doubt, this includes acts of God, fire or other natural disasters, 

bomb threats, acts of terrorism or war, severely inclement weather, power outages, interruption in 

telecommunications or Internet services or services by network service providers, work stoppages, severe 

market disruptions, disputes with service providers, or other unforeseen events.

Rule 612 Extension or Waiver of CMSEF Rules

The Chief Compliance Officer of CMSEF may, in his sole discretion, waive, or extend the time period for 

performing, any act or acts designated by CMSEF Rules, but only to the extent that such waiver or extension 

is not inconsistent with the CEA or CFTC Regulations.

Rule 613 Trading Restrictions of CMSEF Employees

Employees of CMSEF are prohibited from:

(i) Trading, directly or indirectly, in any commodity interest traded on CMSEF;

(ii) Trading, directly or indirectly, in any related commodity interest;

(iii) Trading, directly or indirectly, in a commodity interest traded on contract markets or SEFs or 

cleared by DCOs other than CMSEF; provided, that this prohibition only applies if the 

Employee has access to material, non-public information concerning such commodity 

interest;

(iv) Trading, directly or indirectly, in a commodity interest traded on or cleared by a linked 

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

commodity interest; and

(v) Disclosing to any other Person any material, non-public information which such Employee

obtains as a result of his or her employment at CMSEF where such Employee has or should 

have a reasonable expectation that the information disclosed may assist another Person in 

trading any commodity interest; provided, however, That such rules shall not prohibit 

disclosures made in the course of an Employee's duties, or disclosures made to another selfself-regulatory organization, linked exchange, court of competent jurisdiction or 

representative of any agency or department of the federal or state government acting in his or 

her official capacity.