1110 Brickell Avenue

Suite 430k-200

Miami, FL 33131

www.ledgerx.com

June 10, 2021

VIA COMMISSION PORTAL

Christopher J. Kirkpatrick

Secretary, Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581 

Re: Commission Regulation 40.6(a) – Rule Certification

LedgerX LLC Submission No. 21-12

Dear Mr. Kirkpatrick:

LedgerX LLC (“LedgerX” or the “Company”) hereby notifies the Commodity Futures 

Trading Commission (the “Commission”), pursuant to Section 5c(c) of the Commodity Exchange 

Act (the “CEA”) and Commission Regulation 40.6(a), that it is certifying the attached amendments 

to its Rulebook. The attached amendments will become effective on June 24, 2021. 

A concise explanation and analysis of the changes and amendments, and their compliance 

with applicable provisions of the CEA, including the Core Principles and the Commission’s 

Regulations, is attached hereto as Appendix A and incorporated herein by this reference. The 

following is a brief summary of that explanation and analysis:

Miscellaneous Changes:

• LedgerX has inserted the standard acronyms for Swap Execution Facility, Designated 

Contract Market, and Derivatives Clearing Organization, which does not implicate core 

principles.

• The definition of “Business Day” has been updated to apply to any day where any trading 

facility that clears through the Company DCO is open for trading, consistent with SEF 

Core Principle 2, DCM Core Principle 2, and DCO Core Principles I and R.

• The definition of “Digital Currency” has been updated to add a reference to Ether, since 

the Company Contracts at Rules 12.15 and 12.17 use Ether as their underlying commodity. 

This change is consistent with SEF Core Principle 2 and DCM Core Principle 2.

• The definition of “Novation” has been revised to apply generally to a “Contract,” as 

separately defined in the LedgerX Rulebook, and to apply to contracts cleared through the 

Company DCO, regardless of the execution venue. These revisions are consistent with 

DCO Core Principles I and R.

• The definition of “Participant” and Rule 3.2.A.7 have been revised to reiterate that a person 

must be an ECP to be eligible to transact through a SEF, or to enter Block Trades on a 

DCM. These revisions are consistent with SEF Core Principles 2 and 7, DCM Core 

Principle 2, and DCO Core Principle C.
1110 Brickell Avenue

Suite 430k-200

Miami, FL 33131

www.ledgerx.com

2

• Withdrawal procedures set forth in Rule 6.4.D have been revised to replace references to 

“Bitcoin” with the defined term “Digital Currency,” consistent with DCO Core Principles F 

and I.

• Spelling errors in the term “public” were corrected in Rules 6.7.C and 13.2.7.C. Those 

edits do not implicate core principles.

Clarification of the Settlement Process:

• In this update, LedgerX has not changed but instead has provided a more detailed 

description of the settlement process used for swaps, consistent with a prior enhancement 

of the description of the settlement process for Options and Futures. This change is

consistent with SEF Core Principle 7, DCM Core Principle 11, and DCO Core Principles 

E and R.

• LedgerX has also corrected the definition of “Settlement Date” to describe settlement date 

how it applies when a futures contract “expires,” rather than when it matures. This change 

is consistent with SEF Core Principle 7, DCM Core Principle 11, and DCO Core Principles 

E and R.

Previously Self-Certified Swap Contract Specifications:

• LedgerX has added the specifications for previously self-certified Day-Ahead USD/ETH 

Deci Swaps. These changes are consistent with SEF Core Principle 2 and DCM Core 

Principle 2. Additionally, for both that contract, and USD/ETH Deci Options, LedgerX 

has eliminated specific reference to the LedgerX DCM, since both contracts were certified 

to be traded through both the LedgerX SEF and DCM. These changes are consistent with 

SEF Core Principle 2.

Re-Insertion of SEF Specific Provisions:

• LedgerX has reintroduced a variety of provisions related to the operation of its SEF that 

were removed after LedgerX transferred all trading to its DCM in June of 2020. These 

revisions insert references to the Company SEF in the Introduction, as well as definitions 

for “Authorized User,” “Company,” “Company Contract,” and “Swap Execution Facility,” 

consistent with SEF Core Principle 2. The same insertion was made to the definition of 

“Emergency,” consistent with SEF Core Principle 8 and CFTC Regulation 37.800. 

Reference to the SEF was also made in the definition of “Participant Application and 

Agreement,” consistent with SEF Core Principle 2 and DCO Core Principle C. Reference 

to the Company SEF was also inserted in the “Trading Hours” definition consistent with 

SEF Core Principles 2 and 4. Definitions removed in June of 2020 have also been 

reinserted, including definitions of “Company SEF,” consistent with SEF Core Principle 

2, and the definitions of “Permitted Transaction,” and “Required Transaction” consistent 

with SEF Core Principles 2 and 4.

• Reference to the Company SEF was also inserted in Rule 2.17.F, requiring LedgerX to 

specify whether information published by LedgerX applies to the Company SEF, 

consistent with SEF Core Principles 2 and 9, and CFTC Regulations 37.200, 37.900, and 

37.901.
1110 Brickell Avenue

Suite 430k-200

Miami, FL 33131

www.ledgerx.com

3

• Various rules have also been amended to require that a person be an ECP to gain impartial 

access to the Company SEF, including Rule 3.2.A.7, Rule 3.2.B.6, Rule 3.2.F.3, and Rule 

3.3.H.5. These requirements are consistent with SEF Core Principles 2 and 7, and DCO 

Core Principles C and R.

• Rule 5.2.F establishing that Company Contracts are not void or voidable due to violations 

by LedgerX of statutory or regulatory requirements was also updated to apply to SEFs, 

consistent with CFTC Regulation 37.6, and SEF Core Principles 2 and 7. 

• A description of a “Negotiated Trade Order” has also been re-introduced in Rule 5.3.A.2, 

including a description of how it is executed through the SEF, consistent with SEF Core 

Principles 2 and 4. A description of permitted and prohibited execution methods through 

the SEF has also been re-inserted in Rule 5.5.A, consistent with SEF Core Principles 2 and 

4. That re-introduction also necessitated the a revision to the description of the execution 

methods on the DCM in Rule 5.5.B, including a clarification that while Block Trades are 

permitted through the DCM, “negotiated trade orders” are only permitted through the SEF. 

These revisions are consistent with DCM Core Principles 9 and 12. Additionally, LedgerX 

has re-introduced an exception to the general prohibition against pre-negotiated trades in 

Rule 8.4.B for a “negotiated trade order” in connection with “permitted transactions” 

through the SEF, consistent with SEF Core Principles 2 and 4.

• Finally, LedgerX has reintroduced a exception Rule 11.7’s limitation of LedgerX’s liability 

for violations of Part 37, consistent with SEF Core Principle 1.

The changes and amendments to the Rulebook are reflected in a redlined copy designated 

as Appendix B. The final version of the revised Rulebook is attached at Appendix C.

LedgerX certifies that the changes and amendments comply with the CEA and Commission 

Regulations thereunder. LedgerX additionally certifies that it has concurrently posted a copy of 

this submission letter and the attachments hereto on LedgerX’s website at https://ledgerx.com/. 

LedgerX is not aware of any or substantive opposing views to the changes and amendments.

Please contact the undersigned at gc@ledgerx.com if you have any questions or you would 

otherwise like to discuss this further.

Sincerely,

Brian G. Mulherin

General Counsel, LedgerX LLC
1110 Brickell Avenue

Suite 430k-200

Miami, FL 33131

https://ledgerx.com

Appendix A
Appendix A

Below is a description of revisions to the LedgerX Rulebook. This chart is intended to ease the review of the changes made to 

the Rulebook. Since the changes may impact LedgerX’s operations as a DCM, SEF and DCO, we are explaining how the changes are 

consistent with the Core Principles and CFTC Regulations. When appropriate, a concise summary of how the changes may impact 

LedgerX’s business operations has also been included in the chart. Unless otherwise indicated herein, all section references in the chart 

refer to the revised LedgerX Rulebook. To further enhance review, the chart is organized into sub-categories to group together similar 

updates. 

RULEBOOK CHANGE

COMPLIANCE WITH CORE PRINCIPLES & REGULATIONS AND

IMPACT ON LEDGERX’S BUSINESS OPERATIONS

MISCELLANEOUS

1. Introduction: The terms Swap Execution 

Facility, Designated Contract Market, and 

Derivatives Clearing Organization were 

given the abbreviations “SEF”, “DCM” and 

“DCO” respectively. (Appendix B at vi.)

These changes do not directly implicate the Core Principles. The changes are not expected 

to materially impact LedgerX’s business operations and are intended to enhance readability 

for Participants.

2. Definition of “Business Day”: This term 

has been edited to apply not only to the 

Company DCM, but also the Company 

SEF, and any other DCM or SEF that clears 

through the Company DCO. (Appendix B 

at 3.)

The Term “business day” is used in a variety of contexts in the Rulebook in calculating time 

frames for the operation of the facility, so the definition has been edited to clarify that it 

applies to the Company SEF, and to any DCM or SEF that clears through the Company. 

This edit is, therefore, consistent with SEF Core Principle 2, requiring LedgerX to 

establish rules governing the operation of the facility. See CEA § 5h(f)(2)(C); see also 17 

C.F.R. § 37.200(c). This is also consistent with DCM Core Principle 2, requiring LedgerX 

to establish, monitor, and enforce compliance with the rules of the contract market. See 

CEA § 5(d)(2); see also 17 C.F.R. § 38.150. This also reduces operational risk through the 

development of appropriate controls and procedures, as required by DCO Core Principle I. 

See CEA § 5b(c)(2)(I)(i). Moreover, it complies with DCO Core Principle R, in that it 

ensures a well-founded, transparent, and enforceable legal framework. See CEA 

§ 5b(c)(2)(R).

3. Definition of “Digital Currency”: This term 

has been edited to add reference to Ether, 

which is a type of digital currency that is the 

underlying commodity in Company 

Contracts found at Rules 12.15 and 12.17. 

(Appendix B at 6.)

Reference to the digital currency Ether has been added to the “Digital Currency” definition, 

since it is the underlying for newly self-certified contracts at Rules 12.15 and 12.17. The 

term “Digital Currency” is used in a variety of contexts in the Rulebook for the operation of 

the facility. This addition is, therefore, consistent with SEF Core Principle 2, requiring 

LedgerX to establish rules governing the operation of the facility. See CEA § 5h(f)(2)(C); 

see also 17 C.F.R. § 37.200(c). This is also consistent with DCM Core Principle 2, 

requiring LedgerX to establish, monitor, and enforce compliance with the rules of the 
RULEBOOK CHANGE

COMPLIANCE WITH CORE PRINCIPLES & REGULATIONS AND

IMPACT ON LEDGERX’S BUSINESS OPERATIONS

contract market. See CEA § 5(d)(2); see also 17 C.F.R. § 38.150. This also reduces 

operational risk through the development of appropriate controls and procedures, as

required by DCO Core Principle I. See CEA § 5b(c)(2)(I)(i). 

4. Definition of “Novation”: This term has 

been revised to accomplish two things: (a) it 

applies to a “contract” generally as opposed 

to being limited to a “swap”; and (b) it 

applies to contracts cleared through the 

Company DCO, regardless of whether it 

was entered into on the Company SEF, the 

Company DCM, or another SEF or DCM. 

(Appendix B at 9.)

This revision reduces operational risk through the development of appropriate controls and 

procedures, as required by DCO Core Principle I. See CEA § 5b(c)(2)(I)(i). Moreover, it 

is consistent with DCO Core Principle R, in that it ensures a well-founded, transparent, 

and enforceable legal framework. See CEA § 5b(c)(2)(R).

5. Definition of “Participant”: This revision

reiterates the requirement that a person must 

be an ECP to be eligible to enter into 

transactions through a SEF, or to enter 

Block Trades on a DCM. (Appendix B at 

10.)

This revision is consistent with SEF Core Principle 2, requiring impartial access and 

requiring the establishment of rules governing trading procedures. See CEA § 5h(f)(2) ; see 

also 17 C.F.R. § 37.202. It is also consistent with SEF Core Principle 7, requiring the SEF 

to establish rules ensuring the financial integrity of swaps executed through the facility, and 

CFTC Regulation 37.702, which sets forth one of those requirements as being that a 

Participant to a SEF transaction be an ECP. See CEA § 5h(f)(7); see also 17 C.F.R. 

§ 37.702. This is also consistent with DCM Core Principle 2, requiring LedgerX to 

establish, monitor, and enforce compliance with the rules of the contract market. See CEA 

§ 5(d)(2); see also 17 C.F.R. § 38.150. This is also consistent with DCO Core Principle C

and CFTC Regulation 39.12, requiring a DCO to establish appropriate admission standards 

for participants in the DCO. See CEA § 5b(c)(2)(C); see also 17 C.F.R. § 39.12. 

6. Rule 3.2.A.7 – Access Requirements: This 

revision clarifies that a person must be an 

ECP to access a SEF, or to enter into Block 

Trades on a DCM. (Appendix B at 37.)

This revision is consistent with SEF Core Principle 2, requiring impartial access and 

requiring the establishment of rules governing trading procedures. See CEA § 5h(f)(2) ; see 

also 17 C.F.R. § 37.202. It is also consistent with SEF Core Principle 7, requiring the SEF 

to establish rules ensuring the financial integrity of swaps executed through the facility, and 

CFTC Regulation 37.702, which sets forth one of those requirements as being that a 

Participant to a SEF transaction be an ECP. See CEA § 5h(f)(7 ; see also 17 C.F.R. 

§ 37.702. This is also consistent with DCM Core Principle 2, requiring LedgerX to 

establish, monitor, and enforce compliance with the rules of the contract market. See CEA 

§ 5(d)(2); see also 17 C.F.R. § 38.150. This is also consistent with DCO Core Principle C

and CFTC Regulation 39.12, requiring a DCO to establish appropriate admission standards 

for participants in the DCO. See CEA § 5b(c)(2)(C); see also 17 C.F.R. § 39.12. 
RULEBOOK CHANGE

COMPLIANCE WITH CORE PRINCIPLES & REGULATIONS AND

IMPACT ON LEDGERX’S BUSINESS OPERATIONS

7. Rule 6.4.D: References to “Bitcoin” have 

been replaced with “Digital Currency” to 

indicate LedgerX’s common withdrawal 

procedures for all Digital Currencies. 

(Appendix B at 71.)

This is consistent with DCO Core Principle F and CFTC Regulation 39.15 in that it is 

designed to protect and ensure the safety of member and participant assets. See CEA 

§ 5b(c)(2)(F); see also 17 C.F.R. § 39.15. It also reduces operational risk through the 

development of appropriate controls and procedures, as required by DCO Core Principle I. 

See CEA § 5b(c)(2)(I)(i).

8. Rules 6.7.C, 13.2.7.C: A spelling error of 

the term “public” was corrected. (Appendix 

B at 73, 160.)

These changes do not directly implicate the Core Principles. The changes are not expected 

to materially impact LedgerX’s business operations and are intended to enhance readability 

for Participants.

CLARIFICATION OF SETTLEMENT PROCESS

9. Rule 6.2.C.4: The settlement process for 

LedgerX swaps has not changed, but 

LedgerX has provided a more detailed 

description of the settlement process, 

including describing the transfer of U.S. 

dollars and the transfer of the Underlying 

commodity. (Appendix B at 70.)

This is consistent with DCO Core Principle E and CFTC Regulation 39.14, in that it 

establishes rules that clearly state the settlement procedures for LedgerX swaps. See CEA 

§ 5b(c)(2)(E); see also 17 C.F.R. § 39.14. This is consistent with DCO Core Principle R, 

in that it ensures a well-founded, transparent, and enforceable legal framework. See CEA § 

5b(c)(2)(R). It is also consistent with DCM Core Principle 11 requiring the board of trade 

to ensure the financial integrity of transactions, including clearance and settlement with a 

DCO. See CEA § 5(d)(11). Moreover, it is consistent with SEF Core Principle 7

requiring rules for ensuring the financial integrity of swaps. See CEA § 5h(f)(7).

10. Definition of “Settlement Date”: The 

description of settlement date with respect 

to futures contracts has been corrected to 

indicate that settlement occurs on the date 

the futures contract “expires,” rather than 

the date it “matures.”

This is consistent with DCM Core Principle 11, in that the rule ensures the financial 

integrity of transactions entered into on the facility, including the clearance and settlement 

of the transactions. See CEA § 5(d)(11). Moreover, it is consistent with SEF Core 

Principle 7 requiring rules for ensuring the financial integrity of swaps. See CEA 

§ 5h(f)(7). This is also consistent with DCO Core Principle E, in that it establishes rules 

that clearly state the settlement procedures for LedgerX swaps. See CEA § 5b(c)(2)(E). 

Moreover, it is consistent with DCO Core Principle R, in that it ensures a well-founded, 

transparent, and enforceable legal framework. See CEA § 5b(c)(2)(R).

PREVIOUSLY SELF-CERTIFIED SWAP CONTRACT SPECIFICATIONS

11. Rule 12.17 – Day-Ahead USD/ETH Deci 

Swaps: LedgerX has added the previously 

self-certified contract specifications for 

USD-priced prepaid swap on 1/10th of an 

ETH.

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce rules pertaining to the terms and conditions of swaps traded through the facility. 

See CEA § 5h(f)(2). It is also consistent with DCM Core Principle 2, requiring LedgerX 

to establish rules pertaining to the terms and conditions of contracts traded through the 

contract market. See CEA § 5(d)(2). 
RULEBOOK CHANGE

COMPLIANCE WITH CORE PRINCIPLES & REGULATIONS AND

IMPACT ON LEDGERX’S BUSINESS OPERATIONS

12. Rule 12.17 – Day-Ahead USD/ETH Deci 

Swaps: Because this contract was 

previously self-certified for trading both 

through the Company’s DCM and SEF, 

LedgerX has eliminated specific references 

to the DCM in Sub-sections C and J. 

LedgerX also corrected an erroneous 

reference to Rule 12.15 in Sub-section C.

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce rules pertaining to the terms and conditions of swaps traded through the facility. 

See CEA § 5h(f)(2). 

13. Rule 12.15 – USD/ETH Deci Options: 

Because this contract was previously selfcertified for trading both through the 

Company’s DCM and SEF, LedgerX has 

eliminated specific references to the DCM 

in Sub-sections C, J, and M. (Appendix B 

at 149-150.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce rules pertaining to the terms and conditions of swaps traded through the facility. 

See CEA § 5h(f)(2). 

RE-INSERTING SEF SPECIFIC PROVISIONS

14. Introduction: Reference to “the Company 

SEF” was added to make clear that the 

Rulebook pertains to trading on the 

Company SEF. (Appendix B at 1.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules governing the operation of 

the facility. See CEA § 5h(f)(2); see also 17 C.F.R. § 37.200. 

15. Definition of “Authorized User”: This term 

was revised to include authorized users of 

Participants trading on the Company SEF. 

(Appendix B at 2.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules pertaining to impartial 

access. See CEA § 5h(f)(2); see also 17 C.F.R. § 37.202. 

16. Definition of “Company”: This term has 

been edited to include when the Company 

acts in the capacity of a SEF. (Appendix B 

at 4.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules governing the operation of 

the facility. See CEA § 5h(f)(2); see also 17 C.F.R. § 37.200. 

17. Definition of “Company Contract”: This 

term has been edited to include contracts 

listed for trading on the Company SEF. 

(Appendix B at 4.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules governing the operation of 

the facility. See CEA § 5h(f)(2); see also 17 C.F.R. § 37.200. 
RULEBOOK CHANGE

COMPLIANCE WITH CORE PRINCIPLES & REGULATIONS AND

IMPACT ON LEDGERX’S BUSINESS OPERATIONS

18. Definition of “Swap Execution Facility”: 

This term has been revised to include the 

abbreviation “SEF”. (Appendix B at 12.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules governing the operation of 

the facility. See CEA § 5h(f)(2); see also 17 C.F.R. § 37.200. 

19. Definition of “Emergency”: This term has 

been edited to include circumstances that 

may have severe, adverse effects on the 

functioning of “the Company SEF”. 

(Appendix B at 7.)

This revision is consistent with SEF Core Principle 8, requiring LedgerX to adopt rules 

providing for the exercise of emergency authority, and CFTC Regulation 37.800. See CEA 

§ 5h(f)(8); see also 17 C.F.R. § 37.800. Existing emergency rules are further set forth in the 

LedgerX Rulebook at Rule 2.12, and include the requirement to consult and cooperate with

the CFTC.

20. Definition of “Participant Application and 

Agreement”: This term has been revised to 

clarify that it applies to a Participant gaining 

access to the Company SEF. (Appendix B 

at 10.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules pertaining to impartial 

access. See CEA § 5h(f)(2); see also 17 C.F.R. § 37.202. This is also consistent with DCO 

Core Principle C and CFTC Regulation 39.12, requiring a DCO to establish appropriate 

admission standards for participants in the DCO. See CEA § 5b(c)(2)(C); see also 17 

C.F.R. § 39.12. 

21. Definition of “Trading Hours”: This term 

has been revised to apply hours in which 

orders may be entered on the Company 

SEF. (Appendix B at 13.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules governing the operation of 

the facility. See CEA § 5h(f)(2). It is also consistent with SEF Core Principle 4, requiring 

LedgerX to establish rules defining procedures for trading and processing trades through the 

SEF. See CEA § 5h(f)(4); see also 17 C.F.R. § 37.400.

22. Definition of “Company SEF”: The term 

Company SEF has been added to refer to 

the Swap Execution Facility of the 

Company. (Appendix B at 4.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules governing the operation of 

the facility. See CEA § 5h(f)(2); see also 17 C.F.R. § 37.200. 

23. Definition of “Permitted Transaction”: This 

term has been added to refer to a swap not 

subject to the trade execution requirement. 

(Appendix B at 10.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules governing the operation of 

the facility. See CEA § 5h(f)(2). It is also consistent with SEF Core Principle 4, requiring 

LedgerX to establish rules defining procedures for trading and processing trades through the 

SEF. See CEA § 5h(f)(4); see also 17 C.F.R. § 37.400.

24. Definition of “Required Transaction”: This 

term has been added to refer to a swap that 

is subject to the trade execution 

requirement. (Appendix B at 11.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules governing the operation of 

the facility. See CEA § 5h(f)(2). It is also consistent with SEF Core Principle 4, requiring 

LedgerX to establish rules defining procedures for trading and processing trades through the 

SEF. See CEA § 5h(f)(4); see also 17 C.F.R. § 37.400.
RULEBOOK CHANGE

COMPLIANCE WITH CORE PRINCIPLES & REGULATIONS AND

IMPACT ON LEDGERX’S BUSINESS OPERATIONS

25. Rule 2.17.F – Public Information: This rule 

governs the publication by LedgerX of a 

variety of information, and has been revised 

to require LedgerX to specify whether 

published information applies to the 

Company SEF. (Appendix B at 34.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules governing the operation of 

the facility. See CEA § 5h(f)(2); see also CFTC Regulation § 37.200. This revision is 

consistent with SEF Core Principle 9, requiring the timely publication of trading 

information, and CFTC Regulation 37.900-37.901. See CEA § 5h(f)(9); see also 17 C.F.R. 

§§ 37.900, 37.901.

26. Rule 3.2.A.7 – Access Requirements: This 

rule has been revised to require that a 

person be an ECP to gain impartial access to 

the Company SEF, or to clear trades 

through the Company DCO that were 

executed on another SEF. (Appendix B at 

36.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules pertaining to impartial 

access. See CEA § 5h(f)(2); see also 17 C.F.R. § 37.202. It is also consistent with SEF 

Core Principle 7, requiring the SEF to establish rules ensuring the financial integrity of 

swaps executed through the facility, and CFTC Regulation 37.702, which sets forth one of 

those requirements as being that a Participant to a SEF transaction be an ECP. See CEA 

§ 5h(f)(7); see also 17 C.F.R. § 37.702. This is also consistent with DCO Core 

Principle C and CFTC Regulation 39.12, requiring a DCO to establish appropriate 

admission standards for participants in the DCO. See CEA § 5b(c)(2)(C); see also 17 

C.F.R. § 39.12. Moreover, it is consistent with DCO Core Principle R, in that it ensures a 

well-founded, transparent, and enforceable legal framework. See CEA § 5b(c)(2)(R).

27. Rule 3.2.B.6 – Access Requirements: This 

rule has been revised to require that an FCM 

seeking to facilitate trading through a SEF 

confirm that each customer trading through 

a SEF represents that it is an ECP. 

(Appendix B at 38.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules pertaining to impartial 

access. See CEA § 5h(f)(2); see also 17 C.F.R. § 37.202. It is also consistent with SEF 

Core Principle 7, requiring the SEF to establish rules ensuring the financial integrity of 

swaps executed through the facility, and CFTC Regulation 37.702, which sets forth one of 

those requirements as being that a Participant to a SEF transaction be an ECP. See CEA 

§ 5h(f)(7); see also 17 C.F.R. § 37.702. This is also consistent with DCO Core 

Principle C and CFTC Regulation 39.12, requiring a DCO to establish appropriate 

admission standards for participants in the DCO. See CEA § 5b(c)(2)(C); see also 17 

C.F.R. § 39.12. Moreover, it is consistent with DCO Core Principle R, in that it ensures a 

well-founded, transparent, and enforceable legal framework. See CEA § 5b(c)(2)(R).

28. Rule 3.2.F.3 – Access Requirements: 

Executing Participants trading through a 

SEF must agree to confirm that each 

customer represents it is an ECP. 

(Appendix B at 39.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules pertaining to impartial 

access. See CEA § 5h(f)(2); see also 17 C.F.R. § 37.202. It is also consistent with SEF 

Core Principle 7, requiring the SEF to establish rules ensuring the financial integrity of 

swaps executed through the facility, and CFTC Regulation 37.702, which sets forth one of 

those requirements as being that a Participant to a SEF transaction be an ECP. See CEA 

§ 5h(f)(7); see also 17 C.F.R. § 37.702. This is also consistent with DCO Core 
RULEBOOK CHANGE

COMPLIANCE WITH CORE PRINCIPLES & REGULATIONS AND

IMPACT ON LEDGERX’S BUSINESS OPERATIONS

Principle C and CFTC Regulation 39.12, requiring a DCO to establish appropriate 

admission standards for participants in the DCO. See CEA § 5b(c)(2)(C); see also 17 

C.F.R. § 39.12. Moreover, it is consistent with DCO Core Principle R, in that it ensures a

well-founded, transparent, and enforceable legal framework. See CEA § 5b(c)(2)(R).

29. Rule 3.3.H.5 – Participant Obligations:

Participants trading through the Company 

SEF or another SEF that clears through the 

Company DCO must inform LedgerX if the 

Participant no longer meets the requirement 

to be an ECP. (Appendix B at 43.)

This revision is consistent with SEF Core Principle 2, requiring LedgerX to establish and 

enforce compliance with any rule of the facility, including rules pertaining to impartial 

access. See CEA § 5h(f)(2); see also 17 C.F.R. § 37.202. It is also consistent with SEF 

Core Principle 7, requiring the SEF to establish rules ensuring the financial integrity of 

swaps executed through the facility, and CFTC Regulation 37.702, which sets forth one of 

those requirements as being that a Participant to a SEF transaction be an ECP. See CEA 

§ 5h(f)(7); see also 17 C.F.R. § 37.702. This is also consistent with DCO Core 

Principle C and CFTC Regulation 39.12, requiring a DCO to establish appropriate 

admission standards for participants in the DCO. See CEA § 5b(c)(2)(C); see also 17 

C.F.R. § 39.12. Moreover, it is consistent with DCO Core Principle R, in that it ensures a 

well-founded, transparent, and enforceable legal framework. See CEA § 5b(c)(2)(R).

30. Rule 5.2.F – Company Contracts not Void 

or Voidable: The rule has been updated to 

provide that a Company Contract will not 

be void or voidable due to violations by the 

Company of statutory and regulatory 

requirements applicable to SEFs. 

(Appendix B at 61.). This effectively treats 

contracts executed through the SEF in the 

same manner those executed through the 

DCM. (Appendix B at 61.)

This requirement is consistent with CFTC Regulation 37.6, which provides that “[a]

transaction entered into on or pursuant to the rules of a swap execution facility shall not be 

void, voidable, subject to rescission, otherwise invalidated, or rendered unenforceable as a 

result of . . . (1) A violation by the swap execution facility of the provisions of section 5h of 

the Act or this part . . . .” See 17 C.F.R. § 37.6. It is also consistent with SEF Core 

Principle 2, requiring LedgerX to establish and enforce compliance with rules of the 

facility. See CEA § 5h(f)(2). It is also consistent with SEF Core Principle 7, requiring the 

SEF to establish rules ensuring the financial integrity of swaps executed through the 

facility, and CFTC Regulation 37.700. See CEA § 5h(f)(7); see also 17 C.F.R. § 37.700. 

31. Rule 5.3.A.2 – Negotiated Trade Order: 

The rule describes a Negotiated Trade Order 

as one between two counterparties only for 

Permitted Transactions on the Company’s 

SEF. It also describes how such an order is 

executed on the Company’s SEF. 

(Appendix B at 62.)

This revision is consistent with CFTC Regulation 37.9(c). See 17 C.F.R. § 37.9(c). It is 

also consistent with SEF Core Principle 2, requiring LedgerX to establish and enforce 

compliance with any rule of the facility, including rules governing the operation of the 

facility. See CEA § 5h(f)(2). Moreover, it is consistent with SEF Core Principle 4, 

requiring LedgerX to establish rules defining procedures for trading and processing trades 

through the SEF. See CEA § 5h(f)(4); see also 17 C.F.R. § 37.400.

32. Rule 5.5.A – Execution Methods – SEF: 

This section describes how LedgerX 

facilitates SEF order execution through a 

This revision is consistent with CFTC Regulation 37.9. See 17 C.F.R. § 37.9. It is also 

consistent with SEF Core Principle 2, requiring LedgerX to establish and enforce 

compliance with any rule of the facility, including rules governing the operation of the 
RULEBOOK CHANGE

COMPLIANCE WITH CORE PRINCIPLES & REGULATIONS AND

IMPACT ON LEDGERX’S BUSINESS OPERATIONS

central limit order book and Negotiated 

Trade Orders, but not Block Trades or 

EFPs. (Appendix B at 63-64). 

facility. See CEA § 5h(f)(2). It is also consistent with SEF Core Principle 4, requiring 

LedgerX to establish rules defining procedures for trading and processing trades through the 

SEF. See CEA § 5h(f)(4); see also 17 C.F.R. § 37.400.

33. Rule 5.5.B – Execution Methods – DCM: 

Because a new sub-section was created for 

SEFs, DCM execution methods also 

received a separate sub-section. In that subsection, LedgerX clarifies that Negotiated 

Trade Orders”, which by definition is 

executed through the SEF as described 

above, cannot be facilitated through the 

DCM. (Appendix B at 64.)

This revision is consistent with DCM Core Principle 9, requiring LedgerX to provide a 

competitive, open, and efficient market and mechanism for executing transactions that 

protects that price discovery process of trading in the centralized market of the board of 

trade. See CEA § 5(d)(9). It is also consistent with DCM Core Principle 12, requiring 

LedgerX to protect markets and market participants from abusive practices, and CFTC 

Regulation 38.651 which requires LedgerX to have and enforce rules protecting the market 

and market participants against abusive practices including fraudulent, noncompetitive or 

unfair trading. See CEA § 5(d)(12); see also 17 C.F.R. § 38.651.

34. Rule 8.4.B – Prohibition against PreNegotiated Trades: This revision adds an 

exception to the prohibition against prenegotiated trades for a “Negotiated Trade 

Order.” (Appendix B at 78-79.). As 

described above, a “Negotiated Trade 

Order” is only available for “permitted 

transactions” executed through the SEF. 

See LedgerX Rule 5.3.A.2.

This revision is consistent with CFTC Regulation 37.9. See 17 C.F.R. § 37.9(c). It is also 

consistent with SEF Core Principle 2, requiring LedgerX to establish and enforce 

compliance with any rule of the facility, including rules governing the operation of the 

facility. See CEA § 5h(f)(2). It is also consistent with SEF Core Principle 4, requiring 

LedgerX to establish rules defining procedures for trading and processing trades through the 

SEF. See CEA § 5h(f)(4); see also 17 C.F.R. § 37.400.

35. Rule 11.7 – Limitation of Liability: This 

section limits the liability of the Company, 

except as set forth in the Act and CFTC 

regulations, including Part 37. (Appendix 

B at 111-112.)

This revision is consistent with SEF Core Principle 1 requiring LedgerX to comply with 

Core Principles and any requirement the Commission may impose by rule or regulation. 

See CEA § 5h(f)(1).