June 9, 2023

Christopher J. Kirkpatrick

Secretary

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581

Re: Cboe Clear Digital, LLC Rule Certification

Submission Number CCD-2023-01C

Dear Mr. Kirkpatrick:

Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended (“Act”), 

and § 40.6(a) of the regulations promulgated by the Commodity Futures Trading Commission 

(“CFTC” or “Commission”) under the Act, Cboe Clear Digital, LLC (“CCD” or 

“Clearinghouse”) hereby submits a CCD rule amendment (“Amendment”) to update the 

dispute resolution mechanism for disputes against CCD to be consistent with the dispute 

resolution procedures required by CCD’s master membership agreement. Exhibit A to this 

submission sets forth the rule changes included in the Amendment. The Amendment will 

become effective on June 26, 2023.

CCD Rule 707 currently governs the requirements for legal proceedings brought 

against CCD, while CCD Rule 708 provides for the dispute resolution mechanisms applicable 

to disputes across Clearing Members and disputes involving Customers. In particular, CCD 

Rule 707(b) requires that any action, suit or proceeding against CCD be brought in the State 

or Federal Courts within Chicago, Illinois, and that Clearing Members consent to the 

jurisdiction of Chicago, Illinois courts.1 Cboe Clear Digital’s master membership agreement, 

to which all futures Clearing Members must agree to in order to become a Clearing Member 

of CCD, however, contains a mandatory arbitration clause which provides that any controversy 

or claim arising out of or in connection with the master membership agreement or the 

performance or breach hereof, or relating to a Clearing Member’s clearing account, including 

any claim against Cboe Digital2shall be settled by arbitration as set forth in the Cboe Digital 

Rules.3 To note, Cboe Clear Digital and its designated contract market (“DCM”) affiliate, Cboe 

Digital Exchange, LLC (“Exchange”), are joint parties to the master membership agreement, 

and, while Cboe Digital Exchange Rule 1006 provides that any disputes between the Exchange 

and its participants be brought to arbitration, the Cboe Clear Digital Rules do not currently 

1 Rule 707(b) also requires Clearing Members to bring claims within one year and waive right to a jury trial.

2 Cboe Clear Digital and its DCM affiliate, Cboe Digital Exchange, are joint parties to the master membership 

agreement and collectively are “Cboe Digital”.

3 The “Cboe Digital Rules” are defined as “the Cboe Clear Digital Rulebook, the Cboe Clear Digital Spot 

Rulebook, the Cboe Digital Exchange Rulebook, or any or all of the foregoing Rulebooks, as the context 

requires.”
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provide for dispute resolution by arbitration. The Amendment seeks to resolve this inadvertent 

discrepancy by updating CCD Rule 707 and 708 to provide for mandatory arbitration for 

claims against Cboe Clear Digital so that the dispute resolution mechanism referenced, and to 

which Clearing Members agree, in the master membership agreement is appropriately reflected 

in CCD’s rules. The Amendment updates CCD’s dispute resolution rules in a manner that is 

consistent with its affiliated Exchange’s Rule 1006. 

Specifically, the Amendment removes CCD Rules 707(b) and (c)4in their entirety. The 

Amendment adds subparagraphs (c) and (d) to CCD Rule 708 as new dispute resolution 

provisions, rather than legal proceeding provisions, for Clearing Member claims against the 

Clearinghouse. Amended CCD Rule 708(c) and (d) together provide that any dispute between 

the Clearinghouse and a Clearing Member (including an affiliate of a Clearing Member) arising 

from or in connection with the Cboe Clear Digital Rules must be brought to and settled by 

arbitration through the AAA arbitration program or another arbitration program permitted by 

Exchange Rule 1006.

5 Further, amended Rule 707(c) provides that claims must be brought 

within two years from the occurrence of the event giving rise to the dispute, and that the 

amended Rule in no way creates a cause of action nor authorizes an action that would otherwise 

be prohibited by the CCD Rules. CCD Rule 708(d), as amended, also provides that the parties

to a dispute will bear their own costs and expenses and will equally split the administrative and 

arbitrator fees. Further, if Rule 707(d) is held to be unenforceable in connection with any 

dispute, then exclusive jurisdiction resides in any state or federal court sitting in Chicago, 

Illinois (including for all actions to enforce any judgement or decision made in any court with 

such jurisdiction), and the parties involved in the dispute are presumed to have submitted to 

the personal jurisdiction of any such court. Finally, all Clearing Members unconditionally and 

irrevocably waive any and all right to trial by jury in connection with any such dispute.

The Amendment provides clarity and consistency between the dispute resolution 

procedures for claims against the Clearinghouse provided in the CCD Rules with the dispute 

resolution procedures to which the master membership agreement refers and Clearing 

Members agree. The Amendment also provides consistency across the dispute resolution 

procedures available for claims against the Clearinghouse with the dispute resolution 

procedures currently applicable to Clearing Member and Customer disputes, which, pursuant 

to Rule 708(a) and (b), must be arbitrated. Finally, the Amendment provides consistency 

between the Clearinghouse’s dispute resolution rules and its affiliate Exchange’s dispute 

resolution rules, to which Clearing Members and Exchange participants, respectively, agree to 

arbitrate claims pursuant to the master membership agreement. 

CCD believes that the Amendment is consistent with the DCO Core Principles under 

Section 5 of the Act. In particular, CCD believes that the Amendment is consistent with DCO

Core Principles H (Rule Enforcement) and L (Public Information) in that the Amendment 

updates the CCD Rulebook to provide clarity and consistency between the dispute resolution 

4 Rule 707(c) governs expenses in relation to Clearing Member claims brought against CCD pursuant to Rule 707 

(b).

5 Exchange Rule 1006 permits other arbitration programs permitted by the CFTC Regulations.
3

mechanism required for claims against the Clearinghouse in its rules and that required by the 

master membership agreement, to which Clearing Members agree to participate on CCD. As a 

result, the Amendment more clearly defines the adequate arrangements and resources for the 

resolutions of disputes (i.e., via mandatory arbitration) that are in place for any Clearing 

Member claims against the Clearinghouse. Further, as this update provides consistency 

between CCD’s dispute resolution rule, dispute resolution provisions in the master 

membership agreement, and the CCD affiliate Exchange dispute resolution provisions, the 

Amendment provides clear comprehensive rules to market participants.

CCD believes that the impact of the Amendment will be beneficial to the public and 

market participants. CCD is not aware of any substantive opposing views to the Amendment. 

CCD hereby certifies that the Amendment complies with the Act and the regulations 

thereunder. CCD further certifies that it has posted a notice of pending certification with the 

Commission and a copy of this submission on the Cboe Digital website 

(https://www.cboedigital.com/regulation/exchange-notices/) concurrent with the filing of this 

submission with the Commission.

Questions regarding this submission may be directed to Rebecca Tenuta at (312) 786-

7570. 

Cboe Clear Digital, LLC

/s/ Katherine Kirkpatrick

By: Katherine Kirkpatrick

Chief Legal Officer
1

EXHIBIT A

The Amendment, marked to show additions in underlined text and deletions in stricken text, 

consists of the following:

Cboe Clear Digital, LLC

Rulebook

* * * * *

707. Governing Law; Legal Proceedings.

(a) These Rules, the Clearing Member Agreement and all rights and obligations under the 

foregoing (including the creation of security interests in margin and guaranty fund 

deposits), shall be governed by and construed in accordance with the internal laws of the 

State of Illinois, without giving effect to the conflict of law provisions thereof.

(b) Any action, suit or proceeding against Cboe Clear Digital, its Officers, directors, limited 

liability company members, employees, or agents, must be brought within one (1) year 

from the time that a cause of action has accrued. Any such action, suit or proceeding shall 

be brought in the State or Federal courts located within Chicago, Illinois. Each Clearing 

Member expressly consents, for itself and its Authorized Representatives, to the 

jurisdiction of any such court, waives any objection to venue therein, and waives any right 

it may have to a trial by jury.

(c) In the event that a Clearing Member or an affiliate of such Clearing Member fails to prevail 

in a lawsuit or other legal proceeding instituted by such Clearing Member against (i) Cboe 

Clear Digital or (ii) any affiliate of Cboe Clear Digital or any of their respective officers, 

directors, equity holders, employees, agents, or any member of any Committee, and related 

to the business of Cboe Clear Digital, such Clearing Member shall pay to Cboe Clear 

Digital all reasonable expenses, including attorneys’ fees, incurred by Cboe Clear Digital 

in the defense of such proceeding. This paragraph (c) shall not apply to Cboe Clear Digital 

disciplinary actions, appeals thereof, or an instance in which the Board or the Officers have 

granted a waiver of the provisions hereof.

708. Dispute Resolution

(a) All Clearing Members shall be required to arbitrate all disputes between or among 

themselves that relate to or arise out of any transaction submitted for clearing to Cboe 

Clear Digital in accordance with Exchange Rule 801. For these purposes, each Clearing 

Member shall be deemed a “Member” for purposes of Exchange Rule 801.

(b) Disputes involving Customers may be arbitrated in accordance with Exchange Rule 801(c)

(c) Any dispute between the Clearinghouse and a Clearing Member or an affiliate of a 

Clearing Member arising from or in connection with the Cboe Clear Digital Rules must be 

brought to arbitration through the American Arbitration Association (“AAA”) arbitration 

program or another arbitration program permitted by Exchange Rule 1006 within two (2) 

years from the occurrence of the event giving rise to the dispute. This Rule shall in no way 
2

create a cause of action nor authorize an action that would otherwise be prohibited by the 

Cboe Clear Digital Rules.

(d) Any dispute between the Clearinghouse and a Clearing Member or an affiliate of a 

Clearing Member arising from or in connection with the Cboe Clear Digital Rules will be 

settled by arbitration administered through the AAA arbitration program or another 

arbitration program permitted by Exchange Rule 1006. Each party to the dispute will bear 

its own costs and expenses in connection with any arbitration hereunder, as well as an 

equal share of the administrative fees and the fees of the arbitrator; provided, however, 

that the arbitrator will be entitled to include in any award a full reimbursement for the 

prevailing party’s costs and expenses, such party’s share of the administrative fees and the 

fees of the arbitrator, or any combination of any or all of the above. In the event that this 

Rule 707(d) is held to be unenforceable in connection with any dispute, (i) exclusive 

jurisdiction for any such dispute will reside in any state or federal court sitting in the 

Chicago, Illinois, (ii) the Clearinghouse and the Clearing Member or Clearing Member

affiliate involved in the dispute will be presumed to have submitted to the personal 

jurisdiction of any such court, and (iii) an action to enforce any judgment or decision of 

such court may be brought in the same court or in any other court with jurisdiction or 

venue. Finally, all Clearing Members and Clearing Member affiliates unconditionally and 

irrevocably waive any and all right to trial by jury in connection with any such dispute.

* * * * *