© 2010-2018 CX Futures Exchange, L.P. March 5, 2018

CX FUTURES EXCHANGE, L.P.

RULES

BY ACCESSING, OR ENTERING ANY ORDER INTO, THE CX DIRECT SYSTEM, AND WITHOUT ANY 

NEED FOR ANY FURTHER ACTION, UNDERTAKING OR AGREEMENT, A PARTICIPANT, AND ITS 

AUTHORIZED TRADERS AGREE (I) TO BE BOUND BY, AND COMPLY WITH, THE RULES OF THE 

EXCHANGE, THE RULES OF THE CLEARINGHOUSE, ANY APPLICABLE CONTRACT RULES AND 

APPLICABLE LAW, IN EACH CASE TO THE EXTENT APPLICABLE TO IT OR THEM, AND (II) TO BECOME 

SUBJECT TO THE JURISDICTION OF THE EXCHANGE WITH RESPECT TO ANY AND ALL MATTERS 

ARISING FROM, RELATED TO, OR IN CONNECTION WITH, THE STATUS, ACTIONS OR OMISSIONS OF 

SUCH PARTICIPANT AND/OR ITS AUTHORIZED TRADERS. SEE CHAPTER III AND THE RELATED 

DEFINITIONS IN THESE RULES.
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TABLE OF CONTENTS

Page

CHAPTER I DEFINITIONS; INTERPRETATION; AMENDMENTS................................. 1

I-1. Defined Terms................................................................................................. 1

I-2. Rules of Interpretation................................................................................... 12

I-3. Effect of Titles ............................................................................................... 12

I-4. Amendment of Rules..................................................................................... 12

I-5. Contract Rules .............................................................................................. 13

CHAPTER II GOVERNANCE OF THE EXCHANGE..................................................... 14

II-1. Board of Directors ......................................................................................... 14

II-2. Standing Committees.................................................................................... 14

II-3. Regulatory Oversight Committee .................................................................. 15

II-4. Additional Committees and Panels ............................................................... 16

II-5. Eligibility ........................................................................................................ 16

II-6. Power of the Board of Directors to Review Decisions ................................... 18

II-7. Officers.......................................................................................................... 19

II-8. Restrictions on Certain Persons Who Possess Material, Non-Public 

Information .................................................................................................... 19

II-9. Conflicts of Interest ....................................................................................... 20

II-10. Regulatory Cooperation ................................................................................ 23

II-11. Regulatory Services Agreement with NFA .................................................... 24

CHAPTER III OWNERSHIP AND TRADING PRIVILEGES .......................................... 25

III-1. Participants and Trading Accounts................................................................ 25

III-2. Authorized Traders........................................................................................ 26

III-3. Eligibility ........................................................................................................ 27

III-4. Application for Trading Privileges.................................................................. 29

III-5. Fees and Payments ...................................................................................... 30

III-6. [RESERVED] ................................................................................................ 30

III-7. Application of Rules and Jurisdiction Following Termination......................... 30

III-8. Recording of Communications ...................................................................... 31

III-9. Notices .......................................................................................................... 31

III-10. Communications between the Exchange and Participants ........................... 31

III-11. Referral and Solicitation of Participants and Orders...................................... 31

CHAPTER IV TRADING STANDARDS......................................................................... 35

IV-1. Contracts Traded on the Exchange............................................................... 35

IV-2. Trading Days and Trading Hours .................................................................. 35

IV-3. Order Entry.................................................................................................... 35

IV-4. Financial Requirements for Order Entry and Executions .............................. 36

IV-5. Acceptable Orders ........................................................................................ 38

IV-6. Modification and Cancellation of Orders ....................................................... 38

IV-7. Execution of Orders by the CX Direct System............................................... 38
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IV-8. Daily Settlement Price Determination............................................................ 39

IV-9. Market Crossing ............................................................................................ 40

IV-10. Information Regarding Orders....................................................................... 40

IV-11. Errors ............................................................................................................ 40

IV-12. Position Limits and Position Accountability ................................................... 41

IV-13. Price Limits.................................................................................................... 45

IV-14. Reportable Positions ..................................................................................... 46

IV-15. EFP Transactions.......................................................................................... 46

IV-16. Block Trading ................................................................................................ 47

IV-17. Exchange of Futures for, or in connection with, Swap Transaction............... 49

IV-18. Transfers of Positions ................................................................................... 50

IV-19. Emergencies ................................................................................................. 51

IV-20. Limitation of Liability...................................................................................... 53

IV-21. Opening Auctions.......................................................................................... 55

IV-22. Daily and Weekly Reports............................................................................. 57

CHAPTER V OBLIGATIONS OF PARTICIPANTS ....................................................... 58

V-1. Books and Records; Cooperation in Proceedings......................................... 58

V-2. Minimum Financial Reporting Requirements and Reports ............................ 58

V-3. Authority of the President to Impose Restrictions.......................................... 59

V-4. Minimum Financial Requirements ................................................................. 59

V-5. Trade Confirmations...................................................................................... 59

V-6. Account Statements ...................................................................................... 60

V-7. Risk Disclosure Statement ............................................................................ 60

V-8. Fraudulent or Misleading Communications ................................................... 60

V-9. System Security ............................................................................................ 60

V-10. Market Maker Programs................................................................................ 61

V-11. DPMs ............................................................................................................ 62

V-12. Investment of Certain Participant Account Funds ......................................... 65

CHAPTER VI BUSINESS CONDUCT........................................................................... 66

VI-1. Rule Violations .............................................................................................. 66

VI-2. Fraudulent Acts ............................................................................................. 66

VI-3. Fictitious Transactions .................................................................................. 66

VI-4. Market Demoralization .................................................................................. 66

VI-5. Price Manipulation......................................................................................... 67

VI-6. Prohibition of Misstatements ......................................................................... 67

VI-7. Adherence to Law ......................................................................................... 67

VI-8. Use of Trading Privileges .............................................................................. 67

VI-9. Supervision ................................................................................................... 67

VI-10. Disclosing Orders.......................................................................................... 67

VI-11. Pre-Execution Discussions............................................................................ 68

VI-12. Disruptive Practices ...................................................................................... 68

CHAPTER VII DISCIPLINE AND ENFORCEMENT...................................................... 69

VII-1. General ......................................................................................................... 69

VII-2. Inquiries and Investigations........................................................................... 70
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VII-3. Reports of Investigations............................................................................... 71

VII-4. Review of Investigative Reports .................................................................... 72

VII-5. Notice of Charges and Opportunity to Respond............................................ 72

VII-6. Answer to Notice of Charges......................................................................... 74

VII-7. Service of Notice of Charges......................................................................... 74

VII-8. Settlements ................................................................................................... 75

VII-9. Disciplinary Panel.......................................................................................... 75

VII-10. Convening Hearings of Disciplinary Proceedings.......................................... 76

VII-11. Respondent Review of Evidence .................................................................. 77

VII-12. Conducting Hearings of Disciplinary Proceedings......................................... 78

VII-13. Decision of Disciplinary Panel....................................................................... 79

VII-14. Sanctions ...................................................................................................... 80

VII-15. Costs............................................................................................................. 81

VII-16. Appeal from Disciplinary Panel Decision, Summary Impositions of 

Fines and Other Summary Actions ............................................................... 81

VII-17. Summary Imposition of Fines........................................................................ 84

VII-18. Summary Suspensions and Other Summary Actions ................................... 85

VII-19. Rights and Responsibilities after Suspension or Termination ....................... 87

VII-20. Notice to the Respondent, the Commission and the Public .......................... 88

CHAPTER VIII ARBITRATION...................................................................................... 89

VIII-1. General ......................................................................................................... 89

VIII-2. Forum............................................................................................................ 89

VIII-3. Applicable Arbitration Rules .......................................................................... 89

VIII-4. Penalties ....................................................................................................... 89

CHAPTER IX CONTRACTS ......................................................................................... 90

IX-1. Contract Specifications ................................................................................. 90

IX-2. Contract Modifications................................................................................... 90

CHAPTER X CLEARING .............................................................................................. 91

X-1. Rules of Clearinghouse................................................................................. 91
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© 2010-2018 CX Futures Exchange, L.P.

CHAPTER I

DEFINITIONS; INTERPRETATION;

AMENDMENTS

I-1. Defined Terms

Unless otherwise specifically provided in the Rules of the Exchange or the 

context otherwise requires, the terms defined in this Section I-1 shall for all purposes of 

the Rules of the Exchange have the meanings specified herein.

Affiliate

An “Affiliate” of, or a Person “Affiliated” with, another Person is a Person 

who, directly or indirectly, Controls, is Controlled by, or is under common Control with, 

such other Person.

Appeals Panel

The term “Appeals Panel” means a panel comprised of 3 individuals from 

the Regulatory Oversight Committee, with one individual acting as chairman, which will 

consider appeals in accordance with Chapter VII. If less than 3 individuals from the 

Regulatory Oversight Committee are eligible to serve on the Appeals Panel pursuant to 

Rule VII-16, the Appeals Panel shall be a panel solely comprised of those individuals from 

the Regulatory Oversight Committee that are eligible to serve on the Appeals Panel and 

such additional individuals meeting the requirements of Public Director who are appointed 

by the Compliance Director pursuant to Rule VII-16. Members of the Compliance 

Department of the Exchange shall not be eligible to serve on the Appeals Panel. 

Members of a Disciplinary Panel may not serve on an Appeals Panel for the same matter.

Applicable Law

The term “Applicable Law” means, with respect to any Person, any statute, 

law, regulation, Rule or ordinance of any governmental authority applicable to such 

Person, including the CEA, CFTC Regulations, NFA Rules, and margin rules adopted by 

the Board of Governors of the Federal Reserve System.

Assistant Secretary

The term “Assistant Secretary” means any individual appointed by the 

Board of Directors from time to time to serve as an assistant secretary of the Exchange.

Available Funds

The term “Available Funds” shall have the meaning assigned to such term 

in the Rules of the Clearinghouse.
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Authorized Trader

The term “Authorized Trader” means any natural person who is authorized 

by a Participant to place Orders on the CX Direct System.

Block Trade

The term “Block Trade” has the meaning set forth in Rule IV-16.

Block Trade Contract

The term “Block Trade Contract” has the meaning set forth in Rule IV-16.

Block Trader ID

The term “Block Trader ID” shall have the meaning ascribed to it in Rule IV16.

Board of Directors

The term “Board of Directors” means the Board of Directors of the Exchange 

constituted from time to time in accordance with the CX Futures Exchange, L.P. Operating 

Agreement and the Amended and Restated Limited Liability Company Agreement of CX 

Futures Exchange Holdings, LLC, dated as of February 18, 2009.

Business Day

The term “Business Day” means any day other than a Saturday, Sunday or 

any other day on which banking institutions in The City of New York are authorized or 

required by law, regulation or executive order to be closed.

Cancel Order

The term “Cancel Order” means an Order that cancels fully an existing buy 

or sell order.

Cancel Replace Order

The term “Cancel Replace Order” means an order to cancel fully an existing 

buy or sell Order and replace it with a new Order for a different quantity or price.

CX Direct System

The term “CX Direct System” means the proprietary order entry and 

execution system used by the Exchange for the placement and execution of Orders or 
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the collection and transmission of information relating to Contracts. Participants (and 

their Authorized Traders) will access the CX Direct System directly via the Internet.

CEA

The term “CEA” means the Commodity Exchange Act as in effect from time 

to time.

CFTC

The term “CFTC” means the Commodity Futures Trading Commission, and 

includes any successor agency or authority.

CFTC Regulation

The term “CFTC Regulation” means any rule, regulation, order or directive 

and any interpretation thereof adopted from time to time by the CFTC.

Clearinghouse

The term “Clearinghouse” means CX Clearinghouse, L.P. (including its 

successors), a limited partnership organized under the laws of the State of Delaware, or 

such other third-party clearing organization as the Exchange may designate in the future 

to provide clearing services with respect to any or all of its Contracts. 

Closed Contract Positions

The term “Closed Contract Positions” shall have the meaning assigned to 

such term in the Rules of the Clearinghouse.

Compliance Department

The term “Compliance Department” has the meaning set forth in Rule VII1(c).

Compliance Director

The term “Compliance Director” means an individual appointed by the 

Exchange who (i) does not have a relationship with the Exchange or any parent or 

subsidiary thereof of a type described in Rule II-6(b), (ii) is knowledgeable about futures 

trading and futures market operations as well as CFTC Regulations, and (iii) reports 

directly to the Regulatory Oversight Committee.
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Contract

The term “Contract” means any forward, swap, Future or option (including 

an Option on Futures), and any other agreement, contract or transaction, which has been 

approved by the Exchange as generally eligible for trading on the Exchange pursuant to 

these Rules.

Contract Profit or Loss Amounts 

The term “Contract Profit or Loss Amounts” shall have the meaning 

assigned to such term in the Rules of the Clearinghouse. 

Contract Rules

The term “Contract Rules” means, with respect to any Contract, the rules or 

other trading protocols containing specifications for such Contract, as adopted, amended, 

supplemented or otherwise modified from time to time by the Exchange.

Control

The term “Control” means the power to exercise a controlling influence over 

the management or policies of a Person, unless such power is solely the result of an 

official position with such Person. Any Person who owns beneficially, directly or indirectly, 

more than 20% of the voting power in the election of directors of a corporation, or more 

than 25% of the voting power in the election of directors of any other corporation which 

directly or through one or more Affiliates owns beneficially more than 25% of the voting 

power in the election of directors of such corporation, shall be presumed to control such 

corporation. The terms “controlling” or “controlled” shall have meanings correlative to the 

foregoing.

Director of Hearings

The term “Director of Hearings” means the individual appointed by the NFA 

on behalf of the Exchange from time to time to act as its director of hearings.

Disciplinary Panel

The term “Disciplinary Panel” has the meaning set forth in Rule VII-9.

DPM

The term “DPM” means any designated primary market maker approved by 

the Exchange from time to time in accordance with, and with the duties and 

responsibilities set forth in, Rule V-11.
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Equilibrium Price

The term “Equilibrium Price” means the price of a Contract determined in 

accordance with the application of the Exchange’s proprietary pricing algorithm, as 

described in Rule IV-23.

EFP

The term “EFP” means any exchange for physical transaction entered into 

in accordance with Rule IV-15, a component of which is not executed on the Exchange 

and a component or all of which involves a Contract.

EFS

The term “EFS” has the meaning set forth in Rule IV-17(a).

Emergency

The term “Emergency” means any occurrence or circumstance that, in the 

opinion of the Board of Directors, requires immediate action and threatens or may 

threaten the fair and orderly trading in, or the liquidation of or delivery pursuant to, any 

Contract. An Emergency may include, without limitation, any of the following:

Any manipulative activity or attempted 

manipulative activity;

Any actual, attempted or threatened corner, 

squeeze, congestion or undue concentration of positions;

Any circumstance that may materially adversely 

affect the performance of Contracts, including any failure of the payment 

system;

Any action taken by the Federal or any foreign 

government, any other governmental body, or any other exchange or trading 

facility (foreign or domestic), in each case that may have a direct adverse 

effect on trading on the Exchange;

Any circumstance that may have a severe, adverse 

effect upon the physical functions of the Exchange, including fire or other 

casualty, bomb threats, terrorist acts, substantial inclement weather, power 

failures, communications breakdowns, computer system breakdowns, 

malfunctions of plumbing, heating, ventilation and air conditioning systems 

and transportation breakdowns;
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The bankruptcy or insolvency of any Participant or 

the imposition of any injunction or other restraint by any government agency, 

court or arbitrator upon a Participant, that may affect the ability of such 

Participant to perform on its Contracts; 

Any circumstance in which it appears that any 

Participant or any other Person has failed to perform its Contracts, is 

insolvent, or is in such financial or operational condition or is conducting 

business in such a manner that such Person cannot be permitted to continue 

in business without jeopardizing the safety of other Participants, the 

Exchange or the Clearinghouse; and

Any other unusual, unforeseeable and adverse 

circumstance with respect to which it is impracticable for the Exchange to 

submit in a timely fashion a reviewable Rule to the CFTC.

End of Trading

The term “End of Trading” means 5:00 P.M. on each Trading Day or such 

other time as the Exchange may from time to time prescribe. The End of Trading is the 

time as of which such actions as are specified in these Rules or the relevant Contract 

Rules as taking place at the end of a Trading Day, such as determination Settlement 

Prices, will occur.

Entity

The term “Entity” means any Person other than a natural person (e.g., a 

corporation, partnership, sole proprietorship or trust).

Exchange

The term “Exchange” means CX Futures Exchange, L.P. (including its 

successors), a limited partnership organized under the laws of the State of Delaware, and 

when used with reference to the administration of any Rule of the Exchange, means either 

the Board of Directors or the Officer, employee, agent, committee or delegee to whom 

appropriate authority to administer such provision has been delegated by the Board of 

Directors.

Exchange Official

The term “Exchange Official” means any Officer of, or individual employed 

directly by, the Exchange.

First Trading Day
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The term “First Trading Day” means the first Trading Day on which the 

relevant Contract trades on the Exchange, as described in the applicable Contract Rules.

Funds Deposit Request

The term “Funds Deposit Request” means a Participant’s written or 

electronic authorization to withdraw and transmit funds from such Participant’s bank 

account including all information required to give effect to such withdrawal and 

transmission.

Future

The term “Future” means any contract for the purchase or sale of any 

commodity or financial instrument for future delivery or settlement, as the case may be.

General Partner

The term “General Partner” means the general partner of the Exchange.

Hearing Panel Committee

The term “Hearing Panel Committee” means the Exchange committee 

whose members are drawn from the NFA’s Hearing Committee.

Last Trading Day

The term “Last Trading Day” means the last Trading Day on which the 

relevant Contract trades on the Exchange, as described in the applicable Contract Rules.

Limit Order

The term “Limit Order” has the meaning set forth in Rule IV-5(i).

Market Maker

The term “Market Maker” means any Participant that has been appointed 

by the Exchange to perform certain market-making functions with respect to one or more 

specified Contracts pursuant to an agreement between such Participant and the 

Exchange.

Market Order

The term “Market Order” has the meaning set forth in Rule IV-5(ii).
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Matched Trade

The term “Matched Trade” has the meaning set forth in Rule IV-4(h).

Master Order Book

The term “Master Order Book” means the book maintained by the Exchange 

containing all bids and offers on Contracts entered in an Opening Auction for such 

Contracts or in continuous trading market with respect to such Contract.

NFA

The term “NFA” means the National Futures Association, and includes any 

successor organization.

Officer

The term “Officer” shall have the meaning ascribed to it in Rule II-8.

Open Contract Positions

The term “Open Contract Positions” shall have the meaning assigned to 

such term in the Rules of the Clearinghouse.

Opening Auction

The term “Opening Auction” means a two-sided, single price auction 

conducted by the Exchange on the First Trading Day with respect to any Contract at the 

times specified in the applicable Contract Rules for the purpose of determining the 

Equilibrium Price with respect to the applicable Contract.

Operating Agreement

The term “Operating Agreement” means the Limited Partnership Agreement 

of the Exchange, dated as of November 14, 2006, as amended, supplemented or 

otherwise modified from time to time.

Option on Futures

The term “Option on Futures” means any option to buy or sell any Future 

traded subject to the Rules of the Exchange.

Order

The term “Order” means any order to buy or sell a Contract on or subject to 

the Rules of the Exchange.
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Original Margin

The term “Original Margin” shall have the meaning assigned to such term 

in the Rules of the Clearinghouse.

Participant

The term “Participant” means any Person that has been granted, and 

continues to have, Trading Privileges, or otherwise remains subject to the jurisdiction of 

the Exchange under these Rules. 

Participant Clearing Account

The term “Participant Clearing Account” means, with respect to each 

Participant, the account established and maintained by such Participant at the 

Clearinghouse through which the Participant will hold, and the Clearinghouse will 

maintain and monitor, Available Funds, Open Contract Positions, Closed Contract 

Positions, Contract Profit or Loss Amounts and the corresponding margin requirements, 

if any, in connection with Open Contract Positions entered into through the Participant’s 

Trading Account.

Passwords

The term “Passwords” has the meaning set forth in Rule V-9(b).

Person

The term “Person” means any natural person, association, partnership, 

limited liability company, joint venture, trust or corporation.

President

The term “President” means the individual appointed by the Board of 

Directors from time to time to serve as president of the Exchange.

Public Director

The term “Public Director” has the meaning ascribed to it in Rule II-6(b), 

provided that such definition shall be amended from time to time as may be necessary to 

conform to any amendments or modifications to the term "Public Director" set forth in the 

CFTC Regulations as the CFTC may adopt from time to time.

Referred Participant
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The term “Referred Participant” means a Person that has been referred or 

solicited by a Referring Participant to become a Participant of the Exchange or whose 

Orders have been solicited by a Referring Participant. 

Referring Participant 

The term “Referring Participant” means a Participant that has been 

approved by the Exchange to solicit or refer another Person to become a Participant (the 

Referred Participant) or to solicit a Referred Participant’s Orders, but not to enter such 

Referred Participant’s Orders into the Trading System on behalf of that Referred 

Participant.

Regulatory Services Agreement

The term “Regulatory Services Agreement” shall have the meaning 

ascribed to it in Rule II-12.

Regulatory Oversight Committee

The term “Regulatory Oversight Committee” means the committee of the 

Board of Directors constituted in accordance with Rule II-4.

Responsible Agent

The term “Responsible Agent” shall have the meaning ascribed to it in Rule 

V-9(a).

Rules of the Clearinghouse

The term “Rules of the Clearinghouse” means the constitutive documents 

and any rules, regulations, interpretations, stated policies or instruments corresponding 

to any of the foregoing, in each case as adopted or amended from time to time by the 

Clearinghouse relating to the Exchange or any or all of the Contracts for which such 

Clearinghouse has been designated by the Exchange.

Rules of the Exchange

The term “Rules of the Exchange” means any Rule adopted or amended, 

from time to time, by the Exchange. 

Secretary

The term “Secretary” means the individual appointed by the Board of 

Directors from time to time to serve as secretary of the Exchange.
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Settlement Price

The term “Settlement Price” means, with respect to any Contract, the price 

established at the end of each Trading Day, in accordance with procedures from time to 

time specified by the Exchange. 

Supervised Persons

The term “Supervised Persons” shall mean any directors, officers or 

employees or Authorized Traders of any Participant.

Trading Account

The term “Trading Account” shall mean, with respect to each Participant, 

each account established and maintained by such Participant at the Exchange through 

which the Participant’s Authorized Traders will trade Contracts and through which the 

Exchange will monitor the Open Contract Positions and Closed Contract Positions of such 

Participant. 

Trading Day

The term “Trading Day” means any day on which the Exchange is open and 

available for the trading of Contracts and the Clearinghouse is open and available for the 

clearing of Contracts.

Trading Hours

The term “Trading Hours” means, with respect to any Contract, the hours 

during which the Exchange is regularly open for the trading of such Contract, as set forth 

in the relevant Contract Rules.

Trading Privileges

The term “Trading Privileges” means, with respect to Participants and their 

respective Authorized Traders, the right (a) to transmit Orders for certain or all Contracts 

in electronic form directly to the CX Direct System and (b) to enter into the CX Direct 

System EFPs and Block Trades involving certain or all Contracts, subject to the specific 

requirements and conditions applicable thereto. 

Treasurer

The term “Treasurer” means the individual appointed by the Board of 

Directors from time to time to serve as treasurer of the Exchange.
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Vice President

The term “Vice President” means any individual appointed by the Board of 

Directors from time to time to serve as a vice president of the Exchange.

I-2. Rules of Interpretation

For all purposes of these Rules, except as otherwise expressly provided 

herein or unless the context otherwise requires:

the terms defined in these Rules include the plural 

as well as the singular and vice versa;

words importing gender include all genders;

any reference to a Chapter, Rule or Appendix 

refers to a Chapter or Rule of, or Appendix to, these Rules;

any reference to these Rules refers to these Rules, 

including all Appendices hereto, and the words herein, hereof, thereto, 

hereto and hereunder and words of similar import refer to these Rules and 

their appendices as a whole and not to any particular Chapter, Rule, 

appendix or any other subdivision;

references to days, months and years refer to 

calendar days, months and years, respectively;

all references herein to “including” shall be deemed 

to be followed by the words “without limitation”; 

any term used herein that is defined in the CEA or 

CFTC Regulations shall have the meaning assigned to it therein; and

all references herein to a time of day refer to local 

time in The City of New York.

I-3. Effect of Titles

The titles of these Rules have been inserted for convenience of reference 

only and shall not affect the meaning of these Rules.

I-4. Amendment of Rules

New Rules of the Exchange may be adopted, and existing Rules of the 

Exchange may be amended or repealed, by the Board of Directors. All such new Rules 

of the Exchange, amendments or repeals shall become effective on such date (after any 
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required filing with, or approval thereof by, the CFTC) as may be determined by the 

Exchange.

I-5. Contract Rules

Notwithstanding any provision of these Rules to the 

contrary, the Contract Rules with respect to a particular Contract shall govern 

the applicability of these Rules to trading in such Contract and, in the event 

of any conflict between these Rules and the Contract Rules, the Contract 

Rules shall govern with respect to trading in the relevant Contract.

Notwithstanding the generality of Rule I-5(a) or 

anything to the contrary in Rule III-3, the Contract Rules for each individual 

Contract may specify:

(i) different classes of Participants eligible to trade such 

Contracts. Each such class of Participants shall have the rights and 

obligations specified by the Contract Rules for each such Contract; and

(ii) whether such Contract may be settled via cash settlement, 

physical delivery of the underlying commodity, or by any other means, as 

applicable.
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CHAPTER II

GOVERNANCE OF THE EXCHANGE

II-1. Board of Directors

The business and affairs of the Exchange shall be 

managed by the Board of Directors in accordance with the CX Futures 

Exchange, L.P. Operating Agreement and Applicable Law. 

The number of directors on the Board of Directors 

shall be seven, at least three of whom shall be Public Directors (or such other 

percentage of the Board of Directors as may be required by the CFTC 

Regulations, as amended from time to time, provided that the number of 

Public Directors shall at all times equal no less than 35% of the entire Board 

of Directors). Any vote made by the Board of Directors that results in a tie 

will require that the Board of Directors reconvene to reconsider the matter 

until such tie is broken. 

The appointment of the members of the Board of 

Directors will be made by the General Partner. The sole member of the 

General Partner shall make such appointments on behalf of the General 

Partner.

II-2. Standing Committees

Unless otherwise determined by the Board of 

Directors, the Board of Directors shall initially have one standing committee: 

the “Regulatory Oversight Committee”. 

Except as otherwise specifically provided in these 

Rules, the members of standing committees shall be appointed by the 

chairperson of the Board of Directors, subject to approval by the Board of 

Directors, as promptly as possible after each annual meeting of the 

Exchange. Each appointee shall serve for one year or until the due 

appointment of his or her successor or his or her resignation or removal, with 

or without cause, by a majority vote of the Board of Directors. Subject to 

approval by the Board of Directors, the chairperson of the Board of Directors 

shall designate the chairperson of each standing committee.

Each standing committee shall assist in the 

supervision, management and control of the affairs of the Exchange within 

its particular area of responsibility.

Subject to the authority of the Board of Directors, 

each standing committee shall determine the manner and form in which its 
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proceedings shall be conducted, and may act at a meeting or without a 

meeting, and through a quorum composed of a majority of all its members 

then in office, inclusive of ex officio members. Except as otherwise 

specifically provided in these Rules, the decision of a majority of those 

present at a meeting at which a quorum is present, or the decision of a 

majority of those participating when at least a quorum participates, shall be 

the decision of the standing committee. Any or all members of any standing 

committee may participate in any meeting thereof by telephone conference 

or similar communications equipment by means of which all members 

participating in such meeting can hear each other.

In the event of the absence or disqualification of 

any member of a standing committee from any meeting thereof, each of the 

following individuals, in the order of their availability, may appoint another 

qualified individual to act at the relevant meeting in the place of any such 

absent or disqualified member: (i) the chairperson of the Board of Directors, 

(ii) the President or (iii) the chairperson of the standing committee in 

question.

II-3. Regulatory Oversight Committee

The Regulatory Oversight Committee of the Board of Directors shall consist 

only of Public Directors, who shall be members of the Board of Directors, and shall be 

appointed from time to time by the chairperson of, and approved by, the Board of 

Directors. The Regulatory Oversight Committee shall oversee the Exchange’s regulatory 

program on behalf of the Board of Directors. It shall make such recommendations to the 

Board of Directors as will, in its judgment, best promote the interests of the Exchange, 

provided that, for the avoidance of doubt, any dissenting opinions from one or more 

members of the Regulatory Oversight Committee shall be reported to the Board of 

Directors along with any such recommendation. The Regulatory Oversight Committee 

shall also have such other powers and perform such other duties as the Board of Directors 

may delegate to it from time to time.

The Board of Directors shall confirm one member of the Regulatory 

Oversight Committee as the committee’s chairperson. The Chairperson of the Regulatory 

Oversight Committee shall determine the agenda for the committee and shall cast the tiebreaking vote on any matter where the voting members of the committee are equally 

divided.

Without limiting the generality of the foregoing, the Regulatory Oversight 

Committee shall have authority to: (a) monitor the Exchange’s regulatory program for 

sufficiency, effectiveness and independence, (b) oversee all facets of the Exchange’s 

regulatory program, including trade practice and market surveillance; audits, 

examinations, and other regulatory responsibilities with respect to Participants (including 

ensuring compliance with financial integrity, financial reporting, sales practice, 
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recordkeeping, and other requirements); and the conduct of investigations, (c) review the 

size and allocation of the regulatory budget and resources; and the number, hiring and 

termination, and compensation of regulatory personnel, (d) supervise the Exchange’s 

Compliance Director, who will report directly to the Regulatory Oversight Committee, 

(e) prepare an annual report assessing the Exchange’s self-regulatory program for the 

Board of Directors and the CFTC, which sets forth the regulatory program’s expenses, 

describes its staffing and structure, catalogues disciplinary actions taken during the year, 

and reviews the performance of disciplinary committees and panels, (f) recommend 

changes that would ensure fair, vigorous, and effective regulation, (g) review regulatory 

proposals and advise the Board of Directors as to whether and how such changes may 

impact regulation, and (h) exercise any other functions expressly assigned to it in these 

Rules.

II-4. Additional Committees and Panels

The Board of Directors may create such additional 

standing committees of the Board of Directors as it may from time to time 

deem necessary or advisable. Members of such committees must be 

members of the Board of Directors, provided that the President may be a 

voting ex officio member of any such standing committee.

In addition to the standing committees, the Board 

of Directors may from time to time constitute and appoint, by Rule or 

resolution, special committees of the Board of Directors and designate their 

composition, responsibilities and powers. The provisions regarding standing 

committees in Rule II-2 shall apply mutatis mutandis to any such special 

committees. At least 35% of the members of each special committee 

designated by the Board of Directors shall be Public Directors.

The Exchange may create additional committees of 

the Exchange, or panels, for such purposes as may from time to time be 

necessary or advisable. Members of each such committee may be members 

of the Board of Directors, Participants, Authorized Traders or such other 

individuals as may be qualified to serve on such committee. At least 35% of 

the members of each such committee designated by the Board of Directors 

shall be Public Directors (or individuals that would qualify as Public Directors 

if they were directors of the Exchange).

II-5. Eligibility

No Person may serve as an Officer of the 

Exchange, or a member of the Board of Directors, or any disciplinary 

committee, arbitration panel or oversight panel of the Exchange or as 

Compliance Director if such Person:
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(i) was found within the past three years by a final decision of a 

self-regulatory organization, an administrative law judge, a court of 

competent jurisdiction or the CFTC to have committed a disciplinary 

offense;

(ii) entered into a settlement agreement within the past three 

years in which any of the findings or, in absence of such findings, any of 

the acts charged included a disciplinary offense;

(iii) is currently suspended from trading on any contract market, is 

suspended or expelled from membership from any self-regulatory 

organization, is serving any sentence of probation or owes any portion of 

a 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 that such person committed a disciplinary 

offense; 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 offense;

(iv) is currently subject to an agreement with the CFTC or any selfregulatory organization not to apply for registration with the CFTC or 

membership in any self-regulatory organization;

(v) is currently subject to or has had imposed on him or her within 

the past three years a CFTC registration revocation or suspension in any 

capacity for any reason, or has been convicted within the past three years 

of any of the felonies listed in section 8a(2)(D)(ii) through (iv) of the CEA; 

or

(vi) is currently subject to a denial, suspension or disqualification 

from serving on the disciplinary committee, arbitration panel or governing 

board of any self-regulatory organization as that term is defined in 

Section 3(a)(26) of the Securities Exchange Act of 1934.

To qualify as a Public Director, an individual must 

be found, by action of the Board of Directors, to have no relationship with the 

Exchange that reasonably could affect the independent judgment or decision 

making of the Director. In addition, a Director shall automatically be deemed 

to have such a relationship and shall not be considered a “Public Director” if 

any of the following circumstances exist:
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(i) within the last year, the individual or any member of his or her 

immediate family has been an officer or employee of the Exchange or any 

of its affiliates. Solely for purposes of this Rule II-6, the term “affiliate” 

shall mean parents or subsidiaries of the Exchange or entities that share 

a common parent with the Exchange. For the avoidance of doubt, an 

individual may still qualify as a Public Director if such individual (x) has, 

within the last year, served as a director of an affiliate of the Exchange, 

but (y) otherwise meets the eligibility criteria under this Rule II-6(b).

(ii) within the last year, the individual or any member of his or her 

immediate family has been a member of the Exchange, or a person 

employed by or affiliated with a member. Solely for purposes of this Rule 

II-6, the term “member” is defined according to Section 1a(24) of the CEA 

and Regulation 1.3(q) promulgated by the CFTC thereunder. Therefore, 

any Participant would be considered a “member” of the Exchange. In this 

context, a person is “affiliated” with a member if he or she is an officer or 

director of the member, or if he or she has any other relationship with the 

member such that his or her impartiality could be called into question in 

matters concerning the member.

(iii) within the last year, the individual or any immediate family 

member of the individual, or a firm with which such individual or his or her 

immediate family member is affiliated, as described in Rule II-6(b)(ii) 

above, received more than $100,000 in combined annual payments from

the Exchange or its affiliates, or from a member or any person or entity 

affiliated with a member of the Exchange, in each case for legal, 

accounting or consulting services. Compensation for services as a 

Director shall not count towards the $100,000 payment limit, nor shall 

deferred compensation for services prior to becoming a Director, so long 

as such compensation is in no way contingent, conditioned or revocable.

Public Directors may also serve as directors of any 

parent company of the Exchange if the Public Directors otherwise meet the 

definition of “Public Director” in this Rule II-6.

For purposes of this Rule II-6, the terms “selfregulatory organization”, “disciplinary committee”, “arbitration panel”, 

“oversight panel”, “final decision”, “disciplinary offense”, and “settlement 

agreement” have the meanings set forth in CFTC Regulation 1.63(a).

II-6. Power of the Board of Directors to Review Decisions

The Board of Directors has the power and authority to call for review, and 

to affirm, modify, suspend or overrule, any and all decisions and actions of standing 

committees, special committees of the Board of Directors formed pursuant to Rule II-5(b) 
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and officers of the Exchange appointed pursuant to Rule II-8 (other than the Regulatory 

Oversight Committee).

II-7. Officers

The Board of Directors shall appoint a President, one or more Vice 

Presidents, a Secretary, a Treasurer, one or more Assistant Secretaries, one or more 

Assistant Treasurers and such other officers (each such person, an “Officer”) as it may 

deem necessary or appropriate from time to time, in each case for such term and on such 

other conditions as it sees fit. Any officer of the Exchange may also be a director, officer, 

partner or employee of the sole member of the General Partner or any of its affiliates.

II-8. Restrictions on Certain Persons Who Possess Material, Non-Public 

Information

None of (i) any Officer of the Exchange, (ii) any 

member of the Board of Directors or any committee established by the Board 

of Directors or the Exchange (including but not limited to the Disciplinary 

Panel and the Appeals Panel), (iii) the Compliance Director or any other 

employee or agent of the Exchange shall use or disclose any material, nonpublic information obtained in connection with the performance of his or her 

official duties, for any purpose other than the performance of his or her 

official duties.

No Officer, employee or agent of the Exchange, 

and no member of the Board of Directors or any committee established by 

the Board of Directors of the Exchange, shall (i) trade in any Contract, or any 

underlying or related commodity interest, if such Person is in possession of 

material non-public information concerning such Contract or any underlying 

or related commodity interest or (ii) disclose to any other Person material, 

non-public information, however obtained (including, without limitation, 

material non-public information obtained by an employee or agent of the 

Exchange in connection with such employee or agent’s employment or 

agency, as the case may be), if such Person could reasonably expect that 

such information might assist another Person in trading any Contract or 

underlying or related commodity interest.

Any Officer, Director, Compliance Director or 

employee or agent of the Exchange who violates any provision of this Rule II9 shall indemnify the Exchange for, and hold the Exchange harmless 

against, any losses, damages or costs that the Exchange may incur as a 

result of such violation.

Notwithstanding anything to the contrary in this 

Rule II-9, the applicable Contract Rules for each Contract traded on the 
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Exchange may impose additional prohibitions on the use of or trading on 

material non-public information by any Person.

For purposes of this Rule II-9, the terms “material 

information,” “non-public information” and “commodity interest” shall have 

the meanings ascribed to them in CFTC Regulation 1.59 or in the applicable 

Contract Rules, as the case may be.

II-9. Conflicts of Interest

Definitions. For purposes of this Rule II-10, the 

following definitions shall apply:

(i) The term “family relationship of a Person” shall mean such 

Person’s spouse, former spouse, parent, stepparent, child, stepchild, 

sibling, stepbrother, stepsister, grandparent, grandchild, uncle, aunt, 

nephew, niece or in-law.

(ii) The term “Board” shall mean the Board of Directors, and any 

committee thereof duly authorized to take action or to recommend the 

taking of action on behalf of the Exchange.

(iii) The term “member’s affiliated firm” shall mean a firm in which 

a member of the relevant deliberating body is an employee or a “principal”, 

as defined in CFTC Regulation 3.1(a).

(iv) The term “named party in interest” shall mean a Person or 

entity that is identified by name as a subject of any matter being 

considered by the Board, a disciplinary committee or oversight panel.

(v) The term “significant action” shall mean any of the following 

types of actions or Rule changes that are implemented without the 

CFTC’s prior approval:

(A) Any actions or Rule changes which address an 

“Emergency”, as defined in Chapter I of these Rules; and

(B) Any changes in margin levels that are designed to 

respond to extraordinary market conditions or otherwise likely to 

have a substantial effect on prices in any Contract.

Named Party in Interest Conflict.

(i) Prohibition. No Officer of the Exchange, Compliance Director 

or member of the Board of Directors or any standing committee, 

“disciplinary committee” or “oversight panel” (both as defined in CFTC 
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Regulation 1.69) shall knowingly participate in such body’s deliberations 

or voting in any matter involving a named party in interest where such 

member (A) is a named party in interest, (B) is an employer, employee or 

fellow employee of a named party in interest, (C) is associated with a 

named party in interest through a broker association, (D) has a family 

relationship with a named party in interest or (E) has any other significant, 

ongoing business relationship with a named party in interest, excluding 

relationships limited to executing Contracts opposite each other.

(ii) Recusal. Where the Compliance Director has or may have 

one of the relationships listed in paragraph (b)(i) of this Rule II-10 with a 

named party in interest, the Compliance Director shall recuse himself or 

herself from the matter giving rise to the conflict and the Board of Directors 

shall appoint an individual meeting all the requirements of a Compliance 

Director to serve as Compliance Director for the specific matter giving rise 

to the conflict.

(iii) Disclosure. Prior to consideration of any matter involving a 

named party in interest, each member of the deliberating body (other than 

the Compliance Director whose recusal is required pursuant to clause (ii) 

above) shall disclose to the President, or his or her designee, whether 

such member has or may have one of the relationships listed in 

paragraph (b)(i) of this Rule II-10 with a named party in interest.

(iv) Procedure and Determination. The President, or his or her 

designee, shall determine whether any member of the relevant 

deliberating body is subject to a conflicts restriction under this 

paragraph (b). Such determination shall be based upon a review of the 

following information:

(A) information provided by such member pursuant to 

clause (ii) above; and

(B) any other source of information that is held by or 

reasonably available to the Exchange.

Financial Interest in a Significant Action Conflict.

(i) Prohibition. No Officer of the Exchange, Compliance Director 

or member of the Board of Directors or any standing committee, 

“disciplinary committee” or “oversight panel” (both as defined in CFTC 

Regulation 1.69) shall participate in such body’s deliberations and voting 

on any significant action if such member knowingly has a direct and 

substantial financial interest in the result of the vote based upon either 

Exchange or non-Exchange positions that could reasonably be expected 
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to be affected by the significant action under consideration, as determined 

pursuant to this paragraph (c).

(ii) Recusal. Where the Compliance Director has or may have a 

direct and substantial financial interest in the result of the vote on any 

significant action based upon either Exchange or non-Exchange positions 

that could reasonably be expected to be affected by the significant action 

under consideration, the Compliance Director shall recuse himself or 

herself from the matter giving rise to the conflict and the Board of Directors 

shall appoint an individual meeting all the requirements of a Compliance 

Director to serve as Compliance Director for the specific matter giving rise 

to the conflict.

(iii) Disclosure. Prior to consideration of any significant action, 

each member of the deliberating body (other than the Compliance Director 

whose recusal is required pursuant to clause (ii) above) who does not 

choose to abstain from deliberations and voting shall disclose to the 

President, or his or her designee, position information known to such 

member with respect to any particular Contracts that are under 

consideration, and any other positions which the deliberating body 

reasonably expects could be affected by the significant action, as follows:

(A) gross positions held at the Exchange in such member’s 

personal accounts or “controlled accounts”, as defined in CFTC 

Regulation 1.3(j);

(B) gross positions held at the Exchange in accounts in 

which such member is a “principal”, as defined in CFTC 

Regulation 3.1(a); and

(C) any other types of positions, whether maintained at the 

Exchange or elsewhere, held in such member’s personal accounts 

or the proprietary accounts of such member’s affiliated firm, that the 

Exchange reasonably expects could be affected by the significant 

action.

(iv) Procedure and Determination. The President, or his or her 

designee, shall determine whether any member of the relevant 

deliberating body is subject to a conflicts restriction under this 

paragraph (c) based upon a review of the most recent large trader reports 

and clearing records available to the Exchange, information provided by 

such member with respect to positions pursuant to clause (ii) above and 

any other source of information that is held by and reasonably available

to the Exchange, taking into consideration the exigency of the significant 

action being contemplated. A member of a deliberating body shall be 
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subject to the conflicts restriction in clause (i) above if the review by the 

President, or his or her designee, identifies a position in such member’s 

personal or controlled accounts or accounts in which such member is a 

principal as specified in subclauses (iii)(A), (B) and (C) above.

(v) Deliberation Exemption. Any Officer of the Exchange, 

member of the Board, a “disciplinary committee” or “oversight panel” (both 

as defined in Commission Regulation 1.69) who would otherwise be 

required to abstain from deliberations and voting pursuant to this 

paragraph (c) (excluding the Compliance Director) may participate in 

deliberations, but not voting, if the deliberating body, after considering the 

factors specified below, determines that such participation would be 

consistent with the public interest, provided, however, that before reaching 

any such determination, the deliberating body shall fully consider the 

position information specified in clause (ii) above which is the basis for 

such member’s substantial financial interest in the significant action that 

is being contemplated. In making its determination, the deliberating body 

shall consider:

(A) whether such member’s participation in deliberations is 

necessary to achieve a quorum; and

(B) whether such member has unique or special expertise, 

knowledge or experience in the matter being considered.

Documentation. The minutes of any meeting to 

which the conflicts determination procedures set forth in this Rule II-10 apply 

shall reflect the following information:

(i) the names of all members of the relevant deliberating body 

who attended such meeting in person or who otherwise were present by 

electronic means;

(ii) the name of any member of the relevant deliberating body 

who voluntarily recused himself or herself or was required to abstain from 

deliberations 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 of the relevant deliberating body.

II-10. Regulatory Cooperation

The Exchange may from time to time enter into such agreements 

with domestic or foreign self-regulatory organizations, associations, boards of 
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trade and their respective regulators providing for the exchange of information and 

other forms of mutual assistance for financial surveillance, routine audits, market 

surveillance, investigative, enforcement and other regulatory purposes as the 

Exchange may consider necessary or appropriate or as the CFTC may require.

The Chief Executive Officer or the President, or their delegates, are 

authorized to provide information to an exchange or clearing organization that is a 

party to an information sharing agreement with the Exchange, in accordance with 

the terms and conditions of such agreement.

All information received by the Exchange with respect to any 

information sharing agreement, shall be held in confidence by the Exchange and 

shall not be provided to any of its nonregulatory departments or divisions or any 

other person (including to any affiliate of the Exchange), except as follows:

(i) to the governmental authority(ies) responsible for regulating 

financial instruments in the home jurisdiction of the requesting information 

sharing agreement member,

(ii) pursuant to an order of a court or other lawful process, or

(iii) as it may be necessary for conducting any investigation or 

disciplinary proceeding.

II-11. Regulatory Services Agreement with NFA

The Exchange has contracted with NFA to provide certain regulatory 

services to the Exchange pursuant to a regulatory services agreement (the “Regulatory 

Services Agreement”). In accordance with the Regulatory Services Agreement, NFA may 

perform certain surveillance, investigative, and regulatory functions under the Rules of 

the Exchange and the Exchange may provide information to NFA in connection with the 

performance by NFA of those functions. Without limitation of the foregoing, any of the 

powers or functions of the Exchange under these Rules may be delegated to the NFA 

pursuant to the Regulatory Services Agreement in such manner and on such terms as 

the Exchange and the NFA may mutually agree.
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CHAPTER III

OWNERSHIP AND TRADING PRIVILEGES

III-1. Participants and Trading Accounts

Upon application to the Exchange and an 

explanation of the reasons and uses therefore, the Exchange in its discretion 

may permit a Participant to maintain more than one Trading Account.

Each Participant and its Authorized Traders shall 

have the right to access the CX Direct System, including the right to place 

Orders for each of such Participant’s Trading Account(s).

In the event that the Exchange determines that 

Participants may be permitted to maintain more than one Trading Account, 

as described in Rule III-1(a), each Participant shall designate each of its 

Authorized Trader to trade any or all of its Trading Accounts, provided that a 

Participant shall at all times be responsible for all of its Trading Accounts as 

set forth under these Rules.

Subject to the requirements and procedures set 

forth in this Chapter III, Trading Privileges shall be offered to all applicants 

eligible to be Participants as determined by the Exchange from time to time, 

subject to any limitations or restrictions from time to time imposed by the 

Exchange. 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 the Exchange, 

including voting rights or rights to receive any dividends or other distributions, 

whether arising from a dissolution, merger, consolidation involving the 

Exchange or otherwise.

For the avoidance of doubt, and notwithstanding 

anything to the contrary in these Rules, under no circumstances shall any 

employees, officers, directors or agents of the Exchange.

(i) trade directly or indirectly in any commodity interest traded on 

the Exchange or cleared by its clearinghouse, or in a related commodity 

interest; or

(ii) trade directly or indirectly in a commodity interest traded on a 

designated contract market or swap execution facility other than the 

Exchange or cleared by a derivatives clearing organization other than the 
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Exchange’s clearinghouse, if the employee, officer or director has access 

to material non-public information concerning such commodity interest.

III-2. Authorized Traders

Each Participant that is an Entity shall be required 

to appoint one or more individuals to act as its Authorized Trader or 

Authorized Traders, as applicable.

Participants that are natural persons may act as 

their own Authorized Trader or may appoint a third party as his or her 

Authorized Trader, pursuant to a power of attorney or other instrument, in a 

form prescribed or approved by the Exchange, providing such third party with 

discretionary trading authority with respect to the Participant's Trading 

Account. 

Participants that are Entities may appoint an 

employee to act as their Authorized Trader or may appoint a third party as 

its Authorized Trader pursuant to a power of attorney or other instrument, in 

a form prescribed or approved by the Exchange, providing such third party 

with discretionary trading authority with respect to the Participant's Trading 

Account. A Participant that authorizes a third party to trade for its Trading 

Account on a discretionary basis pursuant to a power of attorney or other 

instrument must identify a specific natural person as its Authorized Trader 

with respect to such Trading Account.

Each Authorized Trader that is an employee of a 

Participant that is an Entity, and any Participant that is a natural person 

acting as his or her own Authorized Trader pursuant to Rule III-2(b) above, 

(i) must be a natural person, (ii) may have Trading Privileges with respect to 

the Trading Account or Trading Accounts, as the case may be, of one and 

only one Participant, and (iii) must satisfy any other requirements as may be 

prescribed by the Exchange from time to time. 

Each Authorized Trader that is an employee of a 

third party with discretionary trading authority with respect to the Participant's 

Trading Account (i) must be a natural person, (ii) may have Trading 

Privileges with respect to the Trading Accounts of more than one Participant, 

and (iii) must allocate contracts executed for such multiple accounts in a fair 

and equitable manner so that no account or group of accounts consistently 

receives favorable or unfavorable treatment over time, and (iv) must satisfy 

any other requirements as may be prescribed by the Exchange from time to 

time. 
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Each Participant may at any time revoke an 

authorization granted by it to any Authorized Trader by disabling such 

authorization in the CX Direct System.

Without limiting the foregoing, each Authorized 

Trader will consent, in a form satisfactory to the Exchange, to abide by the 

Rules of the Exchange and Applicable Law prior to accessing the CX Direct 

System, and each Participant will ensure on an ongoing basis that (i) none 

of its Authorized Traders is subject to a disqualification pursuant to any 

Applicable Law (unless an appropriate exemption has been obtained with 

respect thereto), (ii) each of its Authorized Traders will be technically 

proficient, (iii) each of its Authorized Traders will conduct its business in a 

fair and equitable manner, and (iv) each of its Authorized Traders will 

conduct its business in accordance with the Rules of the Exchange.

III-3. Eligibility

Participants are eligible to hold either long or short 

positions in Contracts only for their proprietary Trading Accounts.. In 

addition, Participants must: (i) satisfy all requirements generally applicable 

to Participants and Authorized Traders under these Rules and any 

applicable Contract Rules; (ii) satisfy such financial criteria as may be 

prescribed by the Exchange from time to time; (iii) have sufficient technical 

and operational capabilities to fulfill any other obligations applicable to 

Participants or their Authorized Traders as may from time to time be required 

by the Exchange; and (iv) satisfy such other requirements or criteria as may 

from time to time be adopted by the Exchange.

Notwithstanding anything to the contrary in Rule III3(a), the Exchange shall have the right to establish more than one class of 

Participants, which shall include Referring Participants as a separate class,

in connection with the trading of particular Contracts, subject to and in 

accordance with the applicable Exchange Rules. All Rules that apply to 

Participants also apply to Referring Participants except where the context 

requires otherwise. All rules that refer to Referring Participants shall only 

apply to such Persons. 

Each applicant to become a Participant that is a 

natural person must: (A) have a mechanism that is acceptable for 

transferring funds to and receiving funds from the applicant’s Clearing 

Account, (B) have attained the age of majority in the individual’s place of 

residence, (C) appoint one or more Authorized Traders pursuant to Rule III2, and (D) satisfy such other requirements or criteria as may from time to 

time be adopted by the Exchange.
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Each applicant to become a Participant that is an 

Entity must: (A) be duly organized and in good standing in its jurisdiction of 

organization, (B) have a mechanism that is acceptable for transferring funds 

to and receiving funds from the applicant’s Clearing Account, (C) have the 

legal authority and be duly authorized and empowered to become a 

Participant and to effect transactions on the Exchange, (D) appoint one or 

more Authorized Traders pursuant to Rule III-2, and (E) satisfy such other 

requirements or criteria as may from time to time be adopted by the 

Exchange.

Notwithstanding anything in the foregoing 

paragraphs (c) or (d) to the contrary:

(i) In considering any applicant for status as a Participant, an 

Authorized Trader of a Participant, or a Referring Participant, the 

Exchange may request additional information, or employ such other 

means that it deems desirable or appropriate, to ascertain relevant facts 

bearing on the applicant’s qualifications; and

(ii) The Exchange may limit trading in particular Contracts to 

specific Participants based upon financial, regulatory or other criteria 

established by the Exchange or the Exchange may limit a Referring 

Participant to acting in the capacity of Referring Participant for specific 

Contracts based upon regulatory or other criteria established by the 

Exchange. 

The Exchange in its sole discretion may deny (or 

may condition) the grant of Trading Privileges of any Participant or any 

Authorized Trader:

(i) if such Person is unable satisfactorily to demonstrate a 

capacity to adhere to all applicable Rules of the Exchange, Rules of the 

Clearinghouse and CFTC Regulations, including, to the extent applicable, 

those concerning record-keeping, reporting, finance and trading 

procedures;

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

(iii) for such other causes as the Exchange may determine from 

time to time.

The Exchange in its sole discretion may condition 

or revoke a Participant’s Trading Privileges or, in the case of an Authorized 

Trader condition or revoke its association with a Participant, if any of the 

circumstances specified in the preceding paragraph (f) exist with respect to 
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such Participant or Authorized Trader, or such Participant or Authorized 

Trader:

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

Privileges or association after such Trading Privileges or association have 

been approved;

(ii) fails to meet any condition placed by the Exchange on such 

Trading Privileges or association; or

(iii) violates any agreement with or Rule of the Exchange.

Futures commission merchants or other 

intermediaries shall not be permitted to submit trades in Contracts for 

execution on behalf of customers.

No Participant may refer or solicit another Person 

to become a Participant of the Exchange or to solicit another Participant to 

enter an Order on the Exchange, including providing related software, 

technical or other associated services except in accordance with the 

provisions of Rule III-11.

III-4. Application for Trading Privileges

Each application to become a Participant shall be 

in such form as may from time to time be prescribed by the Exchange. Each 

applicant to become a Participant shall promptly update the application 

materials if any of the information provided therein becomes inaccurate or 

incomplete. The Exchange shall act upon, and approve or disapprove, any 

such application without unreasonable delay.

Each applicant to become a Participant shall:

(i) submit to the Exchange executed forms of all application 

documents;

(ii) pay to the Exchange such initial fee as may be prescribed by 

the Exchange from time to time; and

(iii) agree in written or electronic form to abide by these Rules and 

Applicable Law.

Upon the Exchange’s approval of an applicant’s Participant application and 

upon the Exchange’s confirmation that the initial fee payable by the applicant has been 

paid to the Exchange, the applicant shall become a Participant and obtain Trading 

Privileges. 
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III-5. Fees and Payments

(a) The Board of Directors shall have the sole authority to set the 

times and amounts of any fees to be paid by Participants or any payments 

to be paid by the Exchange to Referring Participants, which fees or payments 

shall be paid when due. The Exchange shall disclose to Referred 

Participants whether it makes payments for referrals to Referring 

Participants. 

(b) If a Participant fails to pay when due any Exchange fees or 

other amounts due on such Participant, and such payment obligation 

remains unsatisfied for 30 Business Days after its due date, the Exchange 

as it deems necessary or appropriate may suspend, revoke, limit, condition, 

restrict or qualify the Trading Privileges of such Participant and its Authorized 

Traders. 

(c) If a Referring Participant fails to pay when due any Exchange 

fees or other amounts due on such Referring Participant, and such payment 

obligation remains unsatisfied for 30 Business Days after its due date, the 

Exchange as it deems necessary or appropriate may suspend, revoke, limit, 

condition, restrict or qualify the permission of a Referring Participant to act 

in the capacity of a Referring Participant. 

III-6. [RESERVED]

III-7. Application of Rules and Jurisdiction Following Termination

By accessing, or entering any Order into, the CX 

Direct System, and without any need for any further action, undertaking or 

agreement, a Participant and its Authorized Traders agree (i) to be bound 

by, and comply with, the Rules of the Exchange, the Rules of the 

Clearinghouse and Applicable Law, in each case to the extent applicable to 

it, and (ii) to become subject to the jurisdiction of the Exchange with respect 

to any and all matters arising from, related to, or in connection with, the 

status, actions or omissions of such Participant and its Authorized Traders. 

Any Participant and its Authorized Traders whose 

Trading Privileges are revoked or terminated shall remain bound by the 

Rules of the Exchange, the Rules of the Clearinghouse and Applicable Law, 

in each case to the extent applicable to it, and subject to the jurisdiction of 

the Exchange with respect to any and all matters arising from, related to, or 

in connection with, the status, actions or omissions of such Participant and 

its Authorized Traders prior to such revocation or termination.
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III-8. Recording of Communications

The Exchange may record conversations and retain copies of electronic 

communications between officers, employees or agents of the Exchange, on one hand, 

and Participants or Authorized Traders, on the other hand. Any such recordings may be 

retained by the Exchange in such manner and for such periods of time as the Exchange 

may deem necessary or appropriate but in no event less than the retention periods 

necessary to comply with Commission Rule 1.35. The NFA will have access to such 

recordings to the extent required to perform certain regulatory services to the Exchange 

pursuant to the Regulatory Services Agreement.

III-9. Notices

The Exchange shall publish a notice with respect to each addition to, 

modification of, or clarification of, the Rules of the Exchange or of any action to implement 

any Rules of the Exchange, in a form and manner that is reasonably designed to enable 

each Participant and its Authorized Traders to become aware of and familiar with, and to 

implement any necessary preparatory measures to be taken by it with respect to, such 

addition or modification, prior to the effective date thereof; provided that any failure of the 

Exchange to so publish a notice shall not affect the effectiveness of the addition or 

modification in question. For purposes of publication in accordance with the first sentence 

of this Rule III-9, it shall be sufficient (without limiting the discretion of the Exchange as to 

any other reasonable means of communication) if a notice is published on the Exchange’s 

website.

III-10. Communications between the Exchange and Participants

Each Participant must provide the Exchange with the current electronic mail 

address for each of its Authorized Traders and its Responsible Agent and immediately 

(and in any event within 24 hours) update each such address whenever it changes. All 

communications between the Exchange and the Participant (and its Authorized Traders 

and/or Responsible Agent) will be transmitted by electronic mail and/or posted on the 

Exchange website. Each Participant will be responsible for promptly reviewing and, if 

necessary, responding to all electronic communications from the Exchange. The NFA 

will have access to such communications to the extent required to perform certain 

regulatory services to the Exchange pursuant to the Regulatory Services Agreement.

III-11. Referral and Solicitation of Participants and Orders

Notwithstanding anything to the contrary in these 

Rules, a Participant may refer or solicit another Person to become a Referred 

Participant or may solicit a Referred Participant’s Orders, and may provide 

software, technical or other associated services, upon being notified by the 

Exchange under the procedures specified in paragraph (b) that the Referring 
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Participant satisfies, and remains in compliance with, the following 

conditions and is being permitted by the Exchange to act in the capacity of 

Referring Participant. The Referring Participant must:

(i) be a Participant in good standing with the Exchange;

(ii) if applicable, be registered with the National Futures 

Association in an appropriate registration category, or be exempt from 

such registration;

(iii) submit to the Exchange such additional forms and 

agreements as the Exchange shall require and promptly update any 

information provided therein that becomes inaccurate or incomplete;

(iv) maintain an amount of funds on deposit (the level of such 

amount(s) to be determined by the Exchange in the Exchange’s sole 

discretion) for as long as the person remains a Referring Participant of the 

Exchange. Such amount, minus any financial obligations payable to the 

Exchange, shall be returned to the Referring Participant upon the 

Referring Participant’s withdrawal from the Exchange or revocation of 

such Person’s status as a Referring Participant; provided however, that in 

establishing the level of such deposits, the Exchange may implement a 

tiered structure with the level of deposit corresponding to a particular 

category of Participant;

(v) provide a means acceptable to the Exchange of identifying to 

the Exchange those Participants which it refers or solicits, and the referred 

Participant’s acknowledgment that it has been referred;

(vi) demonstrate sufficient technical and operational capabilities 

to meet Exchange technical specifications and requirements as specified

by the Exchange from time to time;

(vii) solicit or refer Persons to become a Participant or solicit their 

Orders to the Exchange via:

(A) electronic media of the Referring Participant approved 

by the Exchange;

(B) electronic media made available to the Referring 

Participant by the Exchange; or 

(C) such other method as the Exchange may accept from 

time to time;
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(viii) satisfy such other requirements or criteria as may from time 

to time be adopted by the Exchange under these Rules.

(ix) For the avoidance of doubt, a Referring Participant shall not 

enter Orders into the CX Direct System on behalf of a Referred Participant 

as the Authorized Trader of a Referred Participant or in any other capacity.

Following a request by a Participant for a 

determination by the Exchange that the Participant meets the conditions of

paragraph (a) to act as a Referring Participant, the Exchange shall notify 

such Participant without unreasonable delay whether such Participant is 

permitted by the Exchange to refer or solicit Participants or their Orders. 

Provided, however, the Exchange may limit its permission to particular 

Contracts.

The Exchange in its sole discretion may deny,

condition or revoke its permission to a Referring Participant to act as a 

Referring Participant. Any such action may be appealed by the Referring 

Participant in accordance with the procedures under the provisions of 

Chapter VII, provided, however, that such sanction shall continue in effect 

during the appeal. The Exchange may take such action to deny, condition 

or revoke its permission, if:

(i) upon request, the Referring Participant is unable satisfactorily 

to demonstrate a capacity to adhere to all applicable Rules of the 

Exchange, Rules of the Clearinghouse, CFTC Regulations and Applicable 

Law;

(ii) at any time the Referring Participant fails to meet any of the 

conditions in paragraph (a); 

(iii) the Referring Participant fails to meet any limitation placed by 

the Exchange on its permission to the Referring Participant under 

paragraph (b); 

(iv) the Referring Participant violates any agreement with the 

Exchange;

(v) the actions or activities of the Referring Participant would 

bring the Exchange into disrepute;

(vi) in the discretion of the Exchange, such action is in the best 

interests of the Exchange or for such other causes as the Exchange may 

determine from time to time.
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Upon granting permission to a Referring Participant 

to act in that capacity, the Exchange shall record the referral relationship 

between a Participant and the Referring Participant in its account records 

and shall make available daily reports and information about the referred 

account activity in such form and manner as the Exchange shall from time 

to time determine.
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CHAPTER IV

TRADING STANDARDS

IV-1. Contracts Traded on the Exchange

The Exchange shall determine which Contracts are available for trading 

subject to the Rules of the Exchange from time to time and, subject to the provisions of 

Rule IX-1, approve rules containing the specifications for such Contracts, provided that 

certifications or applications with respect to such Contracts shall be submitted to the 

CFTC as required by the CEA and CFTC Regulations.

IV-2. Trading Days and Trading Hours

The Exchange shall from time to time determine 

(a) the Trading Days during any particular calendar year and (b) the Trading 

Hours with respect to any particular Contract. All time references shall be 

based on local time prevailing in The City of New York, New York, unless 

otherwise expressly set forth in the relevant Contract Rules. Opening times 

start on the first second of the minute cited. Closing times end on the first 

second of the minute cited. Trading Hours may vary among different 

Contracts. No Participant may make any bid or offer for, or engage in any 

transaction in, any Contract before or after such hours.

Trading will be suspended during periods the 

Exchange schedules for routine maintenance and during any announced 

periods of non-routine maintenance. In the event that trading is suspended 

either for routine or non-routine maintenance, notice will be given to 

Participants as promptly as practicable both by posting of a notice on the 

Exchange’s website and by e-mail directly to each Participant.

The Exchange may from time to time adopt 

procedures for the opening or closing of trading in any Contract.

IV-3. Order Entry

The Authorized Traders of each Participant shall enter Orders by electronic 

transmission to, and shall be required to provide the information required on the order 

entry page of, the CX Direct System. The Exchange shall maintain an electronic record 

of those entries. Each Participant shall be responsible for any and all Orders in each of 

its Trading Accounts to be entered by any of its Authorized Traders. 
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IV-4. Financial Requirements for Order Entry and Executions

Participants are required to have sufficient funds on 

deposit with the Clearinghouse such that any executed Orders will “PASS” 

the credit check as described in Rule IV-4(h).

To facilitate compliance with Rule IV-4(a), the 

Exchange shall establish a maximum Order size for each Trading Account 

of each Participant based upon the Participant’s Available Funds, the size of 

the Participant’s Participant Clearing Account, the Participant’s trading 

behavior, and any other factors that the Exchange deems relevant.

To facilitate compliance with Rule IV-4(a) the 

Exchange, in its sole discretion and from its own funds, may advance funds 

for immediate use to a Participant’s Clearing Account provided that: 

(i) Such Participant has Trading Privileges;

(ii) such Participant has submitted a bona-fide Funds Deposit 

Request;

(iii) such Funds Deposit Request is being processed in the normal 

course of banking transactions by the Clearinghouse;

(iv) such amount shall not exceed the lesser of the Funds Deposit 

Request or $1,000.

Notwithstanding the provisions of paragraph (c) of 

this Rule, in the event that any Funds Deposit Request has not cleared the 

Participant’s issuing bank or are otherwise deemed as non-collectable by the 

Clearinghouse then such Participant shall be subject to a summary fine not 

to exceed $2,500 for each such Funds Deposit Request.

Nothing hereinabove shall be deemed a limitation 

or waiver of the Clearinghouse’s rights to enforce its own rules respecting 

the collection of Original Margin (as defined in the rules of the 

Clearinghouse).

The Exchange shall review the maximum Order 

size for each Trading Account within 15 days of the end of each calendar 

quarter and at any other time at which the Participant deposits funds or 

withdraws funds from the Participant’s Participant Clearing Account. The 

maximum Order size for any Trading Account may be revised by the 

Exchange at any of the foregoing times, or at any time that the Exchange 

determines it necessary to make any such revision based on market 
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conditions, a Participant’s trading activity or other reasons as the Exchange 

deems appropriate.

Notwithstanding the imposition of the limits 

described in Rule IV-4(b) and Rule IV-4(c), the Participant shall remain solely 

responsible for compliance with the Rules of the Exchange and the Rules of 

the Clearinghouse.

When a bid and offer for Contracts are matched on 

the trading facilities of the Exchange (each such occurrence, a “Matched 

Trade”), the Clearinghouse shall undertake an immediate credit check prior 

to such matched trade being confirmed to any of the purchaser, the seller or 

the Clearinghouse. The credit check procedures shall be as follows:

(i) For liquidating Orders, or any portion of a matched trade that 

represents a liquidating quantity, the credit check shall “PASS”.

(ii) For the establishment of new positions or an increase in size 

of existing positions, or any portion of a liquidating trade that would create 

a new position or add to an existing position, the credit check shall PASS 

if and only if the funds immediately available in the applicable Participant 

Clearing Account are greater than or equal to the Original Margin required 

to establish the new position or increase an existing position.

(iii) The credit check will “FAIL” if the funds immediately available 

in the applicable Participant Clearing Account are less than the Original 

Margin required to establish the new position or increase an existing 

position. In such case, the size of the matched trade shall be reduced 

such that the minimum quantity of Contracts that would PASS the credit 

check, if any, based on the level of Original Margin in the applicable 

Participant Clearing Account, will be matched. Any remaining portion of 

the purchaser’s or seller’s Order that would have passed the credit check 

had the purchaser or seller’s Order originally been limited to such amount 

shall be restored with its original price and time priority to the Master Order 

Book and any remaining portion of the purchaser’s or seller’s Order that 

failed the credit check shall be cancelled. 

If a standing Limit Order “FAILS”, as described in 

Rule IV-4(h) above, then the Exchange will notify the Participant of such 

event via email.
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IV-5. Acceptable Orders

At the discretion of the Exchange, the following types of Orders, as well as 

any other types that may be approved from time to time, may be entered into the CX 

Direct System by Participants (via their Authorized Traders) with respect to a Contract:

(i) Limit Orders. A “Limit Order” is an Order to purchase or sell 

a Contract at a specified price or better. A Limit Order will be executed 

when entered to the extent that there are opposite Orders open in the CX 

Direct System, with any balance to remain as an open Order until it is 

executed or is cancelled, or until it expires at the End of Trading on the 

Trading Day designated on such Order. 

(ii) Market Orders. A “Market Order” is an Order to purchase or 

sell a Contract at the best price available in the CX Direct System at the 

time the Order is entered. A Market Order will be executed when entered 

to the extent that there are opposite Orders open in the CX Direct System, 

with any balance cancelled. 

IV-6. Modification and Cancellation of Orders

Any Order that has been entered into the CX Direct System may be 

modified or cancelled unless and until it has been executed or has otherwise expired. 

Any such modification or cancellation requires that a Cancel Replace Order or Cancel 

Order, as the case may be, with respect to the original order be entered into the CX Direct 

System. Such modification or cancellation will become effective upon the issuance of an 

acknowledgement by the CX Direct System of the Cancel Order or Cancel Replace Order, 

as the case may be.

IV-7. Execution of Orders by the CX Direct System

Orders to buy or sell any Contract are subject to the minimum trading 

requirements specified in the relevant Contract Rules and any margin requirements as 

imposed from time to time in the relevant Contract Rules or by the Clearinghouse. All 

Orders are matched with each other and executed electronically through the CX Direct 

System in accordance with an algorithm that gives first priority to Orders at the best price 

and priority among Orders entered at the same price based on their time of entry into the 

CX Direct System, with the Order first entered receiving first priority. Without limiting the 

generality of the foregoing, the algorithm to match Orders entered in the CX Direct System 

is based upon the following principles:

An Order at a better price will always have priority 

over Orders at inferior prices. As among Orders at the same price, an Order 

with time priority will be executed before Orders that have been entered after 

the Order with time priority. An Order with time priority will not lose such 
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priority if the quantity of the Order is subsequently reduced. However, an 

Order will lose its time priority if the price of the Order is changed. 

After the commencement of Trading Hours on a 

Trading Day for a particular Contract (or, with respect to any Contract which 

trades on a 24 hour, continuous basis, after the commencement of trading 

on the first Trading Day for such Contract), time priority will be assigned to 

the first Order at a price that betters the best price prevailing when the Order 

is received. Only one buy Order and one sell Order can have time priority at 

any given time. Orders with time priority will be matched first regardless of 

their respective sizes.

An Order will not lose time priority with respect to 

Orders at the same price if and when an Order at a better price is entered, 

but it will lose price priority.

Once an Order with time priority has been filled, the 

algorithm described herein will be applied to the remaining Orders at the 

same price. Thus, the Order received immediately after the Order that 

initially had time priority will be assigned time priority and be the next Order 

to be executed at such price.

Notwithstanding anything in these Rules to the contrary, the Exchange may 

at any time use a different matching algorithm for a particular Contract by giving notice of 

such algorithm to all Participants at least 10 Trading Days before such algorithm is 

implemented.

IV-8. Daily Settlement Price Determination

The daily Settlement Price of each Contract, for 

purposes of determining any amounts of margin due on Open Contract 

Positions, will be established by the Exchange as soon as practicable after 

the End of Trading on each Trading Day.

Subject to the provisions of Rule IV-7(c) and Rule 

IV-7(d), the Settlement Price of a Contract shall equal the last reported 

trading price of such Contract on the applicable Trading Day; provided, 

however, that, as of the End of Trading, if (i) the best bid is above or (ii) the 

best offer is below the last reported trading price of such Contract on such 

Trading Day, the Settlement Price shall be equal to such bid or offer price.

If there were no trades of such Contracts on such 

Trading Day, then the Settlement Price shall equal the Settlement Price at 

the End of Trading on the prior Trading Day.
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In the case of the First Trading Day of any Contract, 

the Settlement Price, for the purpose of commencing continuous trading on 

the Exchange at the conclusion of the Opening Auction, if such an Opening 

Auction is conducted, shall equal the Equilibrium Price of such Contract.

Pursuant to CFTC Regulation 16.01(b)(3), the 

Exchange shall make readily available to the public, in printed form at the 

office of the Exchange and on its website, this Rule IV-8 as the method used 

by the Exchange in determining nominal prices and Settlement Prices. 

Discretion may be used by the Exchange in determining the Settlement 

Prices in those instances when bids, offers, or trades normally used in the 

calculation of Settlement Prices are deemed by the President as not 

representative of closing market conditions.

IV-9. Market Crossing

The Exchange may from time to time adopt procedures for facilitating 

crossing of orders through the CX Direct System.

IV-10. Information Regarding Orders

The Exchange may make information regarding Orders (including prices bid 

or offered), trades and any other matters it may deem appropriate available to 

Participants, Authorized Traders and other Persons at such times and in such manner 

(whether through the CX Direct System, a ticker, financial information services or 

otherwise) as it may consider necessary or advisable from time to time.

Each Participant, Authorized Trader or other Person receiving any such 

information through the CX Direct System is expressly prohibited from redistributing such 

information unless expressly permitted by the Exchange. Employees and agents of the 

Exchange shall have access to the offices of any Participant and each of its Authorized 

Traders during regular business hours in order to observe the compliance by such 

Participant and its Authorized Traders with the immediately preceding sentence.

IV-11. Errors 

If an Order was incorrectly executed or rejected by 

the CX Direct System, a Participant or its Authorized Trader may, within ten 

minutes thereafter, request review of the Order by providing the confirmation 

number for the Order and stating the grounds for the disagreement.

Upon receipt by the Exchange of a request for 

review of an Order and the accompanying confirmation number, the 

Exchange will review its electronic audit trail to determine if the CX Direct 

System correctly interpreted and executed the Order. Such review will be 
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completed (i) on the same Business Day if the Exchange received such 

request for review prior to 12:00 Noon on any Business Day or (ii) by the end 

of the following Business Day if such request was received (x) on or after 

12:00 Noon on any Business Day or (y) on any day that is not a Business 

Day.

If the review described in Rule IV-11(b) reveals that 

the Order was incorrectly handled, then the Order in question shall be 

cancelled in the Trading Accounts of all affected Participants.

If the review described in Rule IV-11(b) reveals that 

the Order was correctly handled, then no adjustment shall be made in the 

Trading Accounts of any Participants.

Notwithstanding anything to the contrary in this 

Rule IV-11, if the Exchange determines in its sole discretion that the 

execution of any trade was the result of Orders being incorrectly processed 

by the CX Direct System, or any other cause beyond the control of any 

Participant, then the Exchange may cancel such trade in the Trading 

Accounts of all affected Participants.

IV-12. Position Limits and Position Accountability

Position Limits. Position limits shall be established 

by the Exchange from time to time for all contracts except for those contracts 

subject to Position Accountability levels under paragraph (b). Such position 

limits may be specific to a particular Contract, as set forth in the relevant 

Contract Rules, or delivery month or may be established on an aggregate 

basis among Contracts. Except as specified in paragraph (b) and (c) below, 

no Person shall control, or trade in, any number of Contracts that exceeds 

any position limits so established by the Exchange. Except as specified in 

paragraph (b) and (c) below, no Person shall be permitted to enter into any

transaction on the Exchange that would cause such Person to exceed any 

position limits.

(i) A Participant may apply to the Exchange, in accordance with 

paragraph (d) below, for certain qualified hedge transactions to be exempt 

from the position limits that would otherwise apply. For purposes of this 

Rule IV-12, the term “qualified hedge transaction” shall include any 

transaction or position in a particular Contract that represents a substitute 

for transactions to be made or positions to be taken at a later time in the 

instrument underlying such Contract or that is otherwise appropriate to the 

reduction of risks arising in connection with commercial or investment 

activities related to the instrument underlying such Contract, provided that 
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the transaction entered into or position taken on the Exchange is 

economically appropriate to reduce risks arising from:

(A) any potential change in the value of assets that a 

Participant or one or more of its Affiliates owns, produces, 

manufacturers, processes or merchandises, or to which such person 

otherwise has exposure in connection with a commercial or 

investment activity, or anticipates owning, producing, manufacturing, 

processing, or merchandising, or to which such person otherwise 

has exposure in connection with a commercial or investment activity;

(B) any potential change in the value of liabilities that a 

Participant or one or more of its Affiliates owes or anticipates 

incurring;

(C) any potential change in the value of services that a 

Participant or one or more of its Affiliates provides, purchases or 

anticipates providing or purchasing; or

(D) any other good cause shown, as determined by the 

Exchange, in its sole discretion.

(ii) On the basis of an application to the Exchange in accordance 

with paragraph (d) below, and such supplemental information as the 

Exchange may request, the Exchange will determine whether to approve 

a particular transaction as an arbitrage or spread transaction. In granting 

any such approval, the Exchange may impose such limitations as it may 

deem necessary or appropriate in light of the liquidity of the markets 

involved and the financial condition and business circumstances of the 

Participant and one more of its Affiliates. Subject to any such limitations, 

transactions approved in accordance with the immediately preceding 

sentence shall be exempt from the position limits that would otherwise 

apply.

(iii) Any application for an exemption from position limits for a 

hedging, arbitrage or spread transaction must be made by the relevant 

Participant wishing to enter into the transaction or wishing to take the 

position at issue to the Exchange in such form, and within such time limits, 

as the Exchange may from time to time prescribe. Without limiting the 

foregoing, any such application must include the following:

(A) If a qualified hedge transaction, an arbitrage 

transaction or a spread transaction, a representation that such 

transaction or position constitutes a qualified hedge transaction, an 

arbitrage transaction or a spread transaction, as the case may be, 
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and is not used in an attempt to violate or avoid any Rule of the 

Exchange;

(B) If a qualified hedge transaction, a representation that 

such transaction or position is necessary or advisable as an integral 

part of the business of such Participant or one or more of its Affiliates, 

which representation shall also include a description of such 

business;

(C) If an arbitrage or spread transaction, an undertaking 

that the prospective arbitrageur or spreader will specify the extent of 

the current or planned activity in the cash market underlying the 

Contract for which such exemption is requested by the Participant or 

one or more of its Affiliates;

(D) If an arbitrage or spread transaction, a representation 

that the positions involved are moved in an orderly manner and not 

initiated or liquidated in a manner calculated to cause unreasonable 

price fluctuations or unwarranted price changes;

(E) A representation that such Participant or one more of 

its Affiliates has complied with any applicable federal requirement 

relating to hedging, arbitrage or spread transactions, as the case 

may be, and has obtained any and all necessary approvals from the 

CFTC;

(F) A schedule of the maximum number of Contracts, long 

and short, that such Participant intends to enter into for hedging, 

arbitrage or spread transaction purposes, as the case may be;

(G) An agreement that such Participant will comply with 

any additional limits on its trading as the Exchange may from time to 

time impose; and

(H) An agreement by such Participant to submit promptly a 

supplemental statement explaining any change in circumstances 

that may affect the nature of its positions.

(iv) Any exemption from the speculative position limits for hedging 

purposes must be renewed annually, by filing a renewal application in 

accordance with this paragraph (d).

(v) In determining whether any Participant has exceeded the 

position limits established by the Exchange, all positions in Trading 

Accounts for which such Participant or any of its Affiliates, by power of 
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attorney or otherwise, directly or indirectly controls trading shall be 

included. Position limits shall apply to positions held by two or more 

Persons acting pursuant to an express or implied agreement or 

understanding in the same manner as if such positions were held by a 

single Person.

(vi) The Exchange shall have the authority to review and rescind 

any exemption granted by him or her pursuant to paragraphs (b) and (c) 

above at any time in its sole discretion.

(vii) For purposes of paragraph (e) above, “control” is presumed to 

exist when the Person in question makes investment decisions for the 

Trading Account or Trading Accounts in question or materially influences, 

directly or indirectly, the actions of any Person who makes such 

investment decisions. In addition, “control” will be presumed to exist in 

the following circumstances:

(A) Among all parties to a joint Trading Account who have 

authority to act on behalf of such Trading Account;

(B) Among all general partners to a partnership Trading 

Account;

(C) If a Person (A) holds an ownership interest of 10 

percent or more in the Person holding the Trading Account or 

Trading Accounts in question, or (B) shares in 10 percent or more of 

the profits or losses related to such Trading Account or Trading 

Accounts;

(D) If the Persons holding the Trading Account or Trading 

Accounts in question have common directors or management; or

(E) If a Person has the authority to execute transactions in 

the Trading Account or Trading Accounts in question.

(viii) Any presumption of control on the basis of the foregoing 

circumstances can be rebutted by proving that such circumstances do not

exist or by showing other circumstances which negate the presumption of 

control. Initial determinations of “control” shall be made by the President 

or his or her designee.

Position Accountability

(i) Position Accountability levels shall be established by the

Exchange, in its discretion, from time to time, for contracts having a highly 
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liquid and deep cash market. Such Position Accountability levels may be 

specific to a particular Contract, as set forth in the relevant Contract Rules, 

or delivery month or may be established on an aggregate basis among 

Contracts.

(ii) The Compliance Department may, at any time, require a 

person who owns or controls positions in contracts traded on the 

Exchange or cleared by the Clearinghouse which exceed a Position 

Accountability level to which such person is subject to provide information 

relating to the nature and size of such person’s position; the trading 

strategy employed with respect to the position; as relevant, information 

supporting a determination of the hedging nature of the position; and such 

other information as the Compliance Department may request. 

(iii) The Compliance Department may order the reduction of 

such position to the Position Accountability level of any person who fails 

to provide the information as directed.

(iv) A person who holds or controls aggregate positions in excess 

of a specified Position Accountability level shall be deemed to have 

consented not to further increase the size of such person’s position, or to 

reduce any open position which exceeds the Position Accountability level 

as directed by the head of the Compliance Department, in his or her sole 

discretion. 

(v) For purposes of this section (b), all positions in accounts for 

which a person, by power of attorney or otherwise, directly or indirectly 

holds positions or controls trading shall be included with the positions held 

by such person. Positions held by two or more persons acting pursuant to 

an expressed or implied agreement or understanding shall be treated the 

same as if the positions were held by a single person. 

IV-13. Price Limits

On each Trading Day, the amount by which the 

price of a Contract may increase or decrease is limited to an amount 

specified in the applicable Contract Rules, provided that, in each case, the 

Exchange shall have the authority, under extraordinary market 

circumstances, to set daily price limits at different levels if, in the reasonable 

judgment of the Exchange, such action is warranted for the protection of the 

market and Participants.

Price limits with respect to any Contract will be 

determined as soon as practicable following the End of Trading each Trading 
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Day based on the then-applicable Settlement Price. A Contract will not be 

allowed to trade beyond the price limit until after new price limits are 

established following the End of Trading on the next succeeding Trading 

Day.

IV-14. Reportable Positions

The Exchange shall meet the requirements of 

paragraphs (a) through (h) of CFTC Regulation 17.00 as they apply to 

trading in any Contracts that qualify as “exclusively self-cleared contracts” 

within the meaning of CFTC Regulation 15.00.

IV-15. EFP Transactions

A bona fide EFP may, subject to the relevant 

Contract Rules, be entered into by an Authorized Trader with respect to any 

Contract in accordance with the applicable trading increments set forth in the 

relevant Contract Rules, at a price mutually agreed upon by the parties to 

such transaction. Contingent EFP transactions are not permitted. Each EFP 

must contain the following three essential elements:

(i) a Futures transaction and a cash transaction that are 

integrally related;

(ii) an exchange of Futures for the underlying commodity where 

the commodity contract provides for the transfer of ownership of the 

commodity to the cash buyer upon performance of the terms of such 

contract, with delivery to take place within a reasonable time thereafter, in 

accordance with prevailing cash market practice; and

(iii) separate Persons, such that the Trading Accounts involved 

on each side of the EFP have different beneficial ownership or are under 

separate control.

In every EFP, one party must be the buyer of the 

commodity and the seller of the corresponding Futures and the other party 

must be the seller of the commodity and the buyer of the corresponding 

Futures. Prices reported of the commodity and the corresponding Futures 

must correspond to prevailing market levels of each. Further, the quantity of 

the commodity traded in an EFP must be substantially equivalent to the 

quantity of the commodity represented by the Futures portion of the 

transaction.

EFP transactions must be reported to the 

Exchange in a manner prescribed from time to time by the Exchange. EFP 
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transactions executed during Trading Hours must be reported to the 

Exchange within 30 minutes of agreement by the parties and no later than 

15 minutes prior to the End of Trading for such Contract on such Trading 

Day.

EFP transactions executed after the End of Trading 

must be reported within 15 minutes after the opening of the next Trading Day 

with respect to the underlying Contract.

For EFP transactions between the Authorized 

Traders of two Participants, the Exchange requires the Participants granting 

Trading Privileges to each of the Authorized Traders to report the 

transaction.

The Exchange will review the information submitted 

by the Participants for the EFP transaction and will post the transaction to 

the CX Direct System if the transaction details are complete and accurate in 

accordance with this Rule. The Exchange will immediately publicize 

information identifying the transaction as an EFP trade and identifying the 

relevant Contract, contract month, quantity and, if applicable, whether the 

transaction involved a put or a call and the strike price.

Each Participant involved in an EFP shall maintain 

records evidencing compliance with the criteria set forth in this Rule IV-15. 

Upon request, such Participant shall provide documentation evidencing the 

underlying cash transaction to the Exchange or the NFA.

EFP transactions are not permitted during the last 

Trading Day for a Contract delivery month.

EFP prices will not trigger unexecuted Orders.

Notwithstanding anything to the contrary in this 

Rule IV-15, an EFP may only be executed with respect to Contracts for which 

such transactions are expressly permitted by the applicable Contract Rules.

IV-16. Block Trading

Participants may, subject to the relevant Contract 

Rules, enter into transactions outside the CX Direct System, at prices 

mutually agreed, with respect to Contracts that have been designated by the 

Exchange for such purpose (each, a “Block Trade Contract”), provided that 

all of the following conditions are satisfied (each such transaction, a “Block 

Trade”): 
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(i) Each buy or sell Order underlying a Block Trade must 

(A) state explicitly that it is to be, or may be, executed by means of a Block 

Trade, (B) be for at least such minimum number of Contracts as may from 

time to time be specified by the Exchange, and CFTC Regulations and 

(C) meet any other applicable CFTC Regulations governing block trades.

Prior to entering into a Block Trade, an Authorized 

Trader of one participating Participant must apply for a unique identifying 

number (a “Block Trader ID”) by such means as prescribed by the Exchange 

from time to time. Once issued, the Block Trader ID number will be valid for 

a period of 5 minutes only. Block Trades will only be accepted from 

Authorized Traders accessing the CX Direct System with a valid Block 

Trader ID.

Each party to a Block Trade shall comply with all 

applicable Rules of the Exchange other than those which by their terms only 

apply to trading through the CX Direct System.

When negotiating or executing a Block Trade, an 

Authorized Trader must ensure that the price quoted for a Block Trade 

represents a fair price. When determining a fair price, an Authorized Trader 

should take into account the prevailing bids and offers and volume currently 

available in the CX Direct System.

Block Trades must be reported to the Exchange in 

a manner prescribed from time to time by the Exchange. Block Trades must 

be reported to the Exchange within 5 minutes after the completion of 

negotiations, but may not be submitted any later than 5 minutes prior to the 

End of Trading with respect to the underlying Contract.

For Block Trades between two Participants, the 

Exchange requires both Participants to report the Block Trade.

The Exchange will review the information submitted 

by the Participant(s) for the Block Trade and will post the Block Trade to the 

CX Direct System if the details are complete and accurate in accordance 

with this Rule. The Exchange will immediately publicize information 

identifying the trade as a Block Trade and identifying the relevant Contract, 

contract month, price or premium, quantity and, if applicable, whether the 

transaction involved a put or a call and the strike price.

Block Trades are not permitted during the last 

Trading Day for a Contract delivery month.
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Block Trade prices will not trigger unexecuted 

Orders.

Each Participant that is party to a Block Trade shall 

record the following details on its order ticket: the Contract (including the 

expiry month) to which such Block Trade relates; the number of Contracts 

traded; the price of execution or premium; the time of execution; the identity 

of the counterparty; the underlying instrument, whether the transaction 

involved a put or a call and the strike price. Upon request by the Exchange, 

such Participant shall produce satisfactory evidence, including the order 

ticket referred to in the preceding sentence, that the Block Trade meets the 

requirements set forth in this Rule IV-16.

Under no circumstances shall Participants be 

permitted to aggregate Orders across multiple Trading Accounts or multiple 

Participants in order to meet any applicable minimum size for a Block Trade.

Any Block Trade in violation of these requirements 

shall constitute conduct which is inconsistent with just and equitable 

principles of trade.

Notwithstanding anything to the contrary in this 

Rule IV-16, a Block Trade may only be executed (i) by Participants that are 

“Eligible Contract Participants,” as defined under the CEA and CFTC 

Regulations, and (ii) with respect to Contracts for which such transactions 

are expressly permitted by the applicable Contract Rules.

IV-17. Exchange of Futures for, or in connection with, Swap Transaction

An exchange of futures for, or in connection with, a 

swap transaction (“EFS”) may, subject to the relevant Contract Rules, be 

entered into by an Authorized Trader. An EFS consists of two bona fide, 

discrete, but related, transactions: a purchase and sale of Futures and a 

related swap transaction. At the time an EFS is effected, the buyer and seller 

of the Futures must be the seller and the buyer, respectively, of the swap. 

Prices reported of the Futures and the related swap transaction must 

correspond to prevailing market levels of each. The swap component of an 

EFS shall involve the commodity underlying the Futures, or a derivative, byproduct or related product of such commodity. The quantity of such 

commodity covered by the swap must be approximately equivalent to such 

quantity covered by the Futures. The swap component of an EFS must 

comply with the requirements of the CEA and CFTC Regulations thereunder. 

Contingent EFS transactions are not permitted.
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Notification of each EFS shall be given to and 

posted by the Exchange, in the manner from time to time specified by the 

Exchange, on the Trading Day on which such EFS is effected (or, in the case 

of an EFS entered into after the end of any Trading Day with respect to a 

particular Contract, then on the next succeeding Trading Day). Each EFS 

shall be cleared in accordance with normal procedures, shall be clearly 

identified and marked in the same manner as an EFP, and shall be recorded 

by the Exchange and by the Participants involved.

In addition to the notification required by paragraph 

(b) above, a report of each EFS shall be submitted to the Exchange by each 

Participant involved in clearing the Futures component of such EFS. Such 

report shall identify the EFS as having been effected under this Rule IV-17, 

and shall contain the following information: a statement that the swap 

component of the EFS complied with the requirements of the CEA and CFTC 

Regulations thereunder at the time the EFS was entered into, a statement 

that the EFS has resulted or will result in a change of payments or other such 

change, the kind and quantity of the Futures component, the price at which 

the Futures component is to be cleared, the name of each Participant 

involved in the EFS, and such other information as the Exchange may 

require. Such report shall be submitted to the Exchange no later than 12:00 

p.m. on the date that is two Trading Days after the date on which the relevant 

EFS is effected.

The Exchange has the right to require the parties 

to an EFS to demonstrate that such EFS is legitimate and satisfies the 

requirements set forth in paragraph (a) above. Upon request by the 

Exchange, all documentary evidence relating to an EFS, including a master 

swap agreement and any schedules and other documents related thereto, 

shall be obtained by the Participants involved in such EFS from the parties 

thereto, and made available by such Participants for examination by the 

Exchange.

Notwithstanding anything to the contrary in this 

Rule IV-17, an EFS may only be executed with respect to Contracts for which 

such transactions are expressly permitted by the applicable Contract Rules.

IV-18. Transfers of Positions

A Participant and its Authorized Traders may 

transfer positions between their Trading Accounts in order to:

(i) correct errors in an existing Contract, provided that the original 

trade documentation confirms the error;
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(ii) transfer an existing Contract from one Trading Account to 

another of the same Participant where no change in ownership is involved; 

or

(iii) transfer an existing Contract through operation of law from 

death or bankruptcy.

The provisions of Rule IV-18(a) shall apply to any 

Trading Account maintained by a Participant with control over one or more 

Trading Accounts, whether or not such Trading Accounts are controlled by 

the same Authorized Trader of such Participant.

Upon written request, the Exchange may, in its sole 

discretion, allow the transfer of a position as a result of a merger, asset 

purchase, consolidation, or similar non-recurring transaction for a Person 

that is an organization.

The Exchange will transfer positions pursuant to 

this Rule IV-18 at the same prices that appear on the books of the 

transferring Participant, and the transfer will indicate the date when the 

original trade was made. 

IV-19. Emergencies

General. In the event of an Emergency, the 

President or any individual designated by the President may place into 

immediate effect a temporary emergency rule, which may remain in effect 

for up to 30 Trading Days and which may provide for, or may authorize the 

Board of Directors or any committee thereof to undertake, actions necessary 

or appropriate to respond to the Emergency, including such actions as:

(i) limiting trading to liquidation only, in whole or in part;

(ii) changing the delivery month or extending or shortening the 

term of any Contract;

(iii) changing delivery points or the means of delivery provided in 

any relevant Contract Rules;

(iv) imposing or modifying position or price limits with respect to a 

particular Contract;

(v) ordering the liquidation of Contracts, the fixing of a Settlement 

Price or any reduction in positions;

(vi) ordering the exercise of Options on Futures;
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(vii) extending, limiting or changing the hours of trading;

(viii) suspending or curtailing trading in any or all Contracts or 

modifying circuit breakers;

(ix) requiring Participants to meet special margin requirements; or

(x) modifying or suspending any provision of the Rules of the 

Exchange or the Rules of the Clearinghouse.

Any such action placed into effect in accordance with the preceding 

sentence shall be reviewed by the Board of Directors as soon as practicable under the 

circumstances and may be revoked, suspended or modified by the Board of Directors.

Physical Emergency. If, in the judgment of the 

President, or any individual designated by the President and approved by 

the Board of Directors, the physical functions of the Exchange are, or are 

threatened to be, severely and adversely affected by a physical emergency, 

such Person shall have authority to take such action as he or she may deem 

necessary or appropriate to respond to such physical emergency, including 

closing the Exchange, delaying the opening of trading in one or more 

Contracts or suspending trading in or extending trading hours for one or 

more Contracts. In the event that any action has been taken pursuant to the 

immediately preceding sentence, any Person who is authorized to take such 

action may order the removal of any restriction previously imposed pursuant 

to such sentence, upon a determination by such Person that the physical 

emergency that gave rise to such restriction has sufficiently abated to permit 

the physical functions of the Exchange to continue in an orderly manner. 

Any order by any Person pursuant to this sentence shall be subject to review, 

modification or reversal by the Board of Directors. In the event that trading

is suspended in any or all Contracts, unexecuted Orders for the suspended 

Contracts that are currently resting in the CX Direct System will automatically 

be cancelled and must be resubmitted by the Participants upon resumption 

of trading in the affected Contracts.

Notification and Recording. The Exchange will 

notify the CFTC of any action taken, or proposed to be taken, pursuant to 

this Rule IV-19 in accordance with CFTC Regulation § 40.6. The decisionmaking process with respect to, and the reasons for, any such action will be 

recorded in writing.

Conflicts of Interest. The conflict of interest 

provisions set forth in Rule II-10 and the related documentation requirements 

set forth in Rule II-10 shall apply, with any such modifications or adaptations 
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as may be necessary or appropriate under the circumstances, to the taking 

of any action under this Rule IV-19 by the President, or his or her designee.

IV-20. Limitation of Liability

EXCEPT AS OTHERWISE PROVIDED IN THESE RULES, AND EXCEPT 

IN INSTANCES WHERE THERE HAS BEEN A FINDING OF WILLFUL MISCONDUCT 

OR GROSS NEGLIGENCE, IN WHICH CASE THE PARTY FOUND TO HAVE 

ENGAGED IN SUCH CONDUCT CANNOT AVAIL ITSELF OF THE PROTECTIONS IN 

THIS RULE IV-20, NEITHER THE EXCHANGE (INCLUDING ITS AFFILIATES AND ANY 

CONTRACTORS AND SUB-CONTRACTORS PROVIDING SERVICES TO THE 

EXCHANGE) NOR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, 

EMPLOYEES OR AGENTS SHALL BE LIABLE TO ANY OTHER PERSON, INCLUDING 

ANY PARTICIPANT OR PERSON ASSOCIATED WITH A PARTICIPANT (INCLUDING 

ANY AUTHORIZED TRADER), FOR ANY LOSSES, DAMAGES, COSTS OR 

EXPENSES (INCLUDING LOSS OF PROFITS, LOSS OF USE, DIRECT, INDIRECT, 

INCIDENTAL OR CONSEQUENTIAL DAMAGES), ARISING FROM (A) ANY FAILURE 

OR MALFUNCTION, INCLUDING ANY INABILITY TO ENTER OR CANCEL ORDERS, 

OF THE CX DIRECT SYSTEM OR ANY EXCHANGE SERVICES OR FACILITIES USED 

TO SUPPORT THE CX DIRECT SYSTEM, OR (B) ANY FAULT IN DELIVERY, DELAY, 

OMISSION, SUSPENSION, INACCURACY OR TERMINATION, OR ANY OTHER 

CAUSE, IN CONNECTION WITH THE FURNISHING, PERFORMANCE, 

MAINTENANCE, USE OF OR INABILITY TO USE ALL OR ANY PART OF THE CX 

DIRECT SYSTEM OR ANY EXCHANGE SERVICES OR FACILITIES USED TO 

SUPPORT THE CX DIRECT SYSTEM. THE FOREGOING SHALL APPLY 

REGARDLESS OF WHETHER A CLAIM ARISES IN CONTRACT, TORT, 

NEGLIGENCE, STRICT LIABILITY OR OTHERWISE. FURTHERMORE, THERE 

SHALL BE NO LIABILITY BASED UPON, OR IN CONNECTION WITH, ANY QUOTE OR 

OTHER INFORMATION IF NO CORRELATIVE PURCHASE OR SALE OF A 

CONTRACT IS MADE, AND IF A CORRELATIVE PURCHASE OR SALE OF A 

CONTRACT IS MADE, ANY LIABILITY SHALL BE LIMITED IN AMOUNT TO THE 

AGGREGATE PRICE OF THE CONTRACTS PURCHASED OR SOLD.

THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OR 

REPRESENTATIONS PROVIDED BY THE EXCHANGE (INCLUDING ITS AFFILIATES 

AND ANY CONTRACTORS AND SUBCONTRACTORS PROVIDING SERVICES TO 

THE EXCHANGE), RELATING TO THE CX DIRECT SYSTEM OR ANY EXCHANGE 

SERVICES OR FACILITIES USED TO SUPPORT THE CX DIRECT SYSTEM, 

INCLUDING WARRANTIES OF MERCHANTABILITY AND WARRANTIES OF FITNESS 

FOR A PARTICULAR PURPOSE OR USE. THE SERVICES OF THE EXCHANGE ARE 

BEING PROVIDED ON AN “AS IS” BASIS AT THE SOLE RISK OF THE PARTICIPANT 

AND ANY PERSON ASSOCIATED WITH THE PARTICIPANT (INCLUDING ANY 

AUTHORIZED TRADER). NEITHER THE EXCHANGE (INCLUDING ITS AFFILIATES 

AND ANY CONTRACTORS AND SUBCONTRACTORS PROVIDING SERVICES TO 
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THE EXCHANGE) NOR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, 

EMPLOYEES OR AGENTS MAKE ANY WARRANTY WITH RESPECT TO, AND NO 

SUCH PARTY SHALL HAVE ANY LIABILITY TO ANY PARTICIPANT OR ANY PERSON 

ASSOCIATED WITH A PARTICIPANT (INCLUDING ANY AUTHORIZED TRADER) 

FOR, THE ACCURACY, TIMELINESS, COMPLETENESS, RELIABILITY, 

PERFORMANCE OR CONTINUED AVAILABILITY OF THE CX DIRECT SYSTEM OR 

THE EXCHANGE, DELAYS, OMISSIONS OR INTERRUPTIONS IN EXCHANGE 

SERVICES OR THE CREDITWORTHINESS OF ANY OTHER PARTICIPANT OR ANY 

PERSON ASSOCIATED WITH A PARTICIPANT (INCLUDING ANY AUTHORIZED 

TRADER). THE EXCHANGE SHALL HAVE NO DUTY OR OBLIGATION TO VERIFY 

ANY INFORMATION DISPLAYED ON THE CX DIRECT SYSTEM OR OTHERWISE. 

EACH PARTICIPANT AND EACH PERSON ASSOCIATED WITH A PARTICIPANT 

(INCLUDING ANY AUTHORIZED TRADER) ACKNOWLEDGES AND AGREES THAT 

THE EXCHANGE (INCLUDING ITS AFFILIATES AND ANY CONTRACTORS AND 

SUBCONTRACTORS PROVIDING SERVICES TO THE EXCHANGE) DOES NOT AND 

SHALL NOT SERVE AS THE PRIMARY BASIS FOR ANY DECISIONS MADE BY SUCH 

PARTICIPANT OR PERSON ASSOCIATED WITH A PARTICIPANT (INCLUDING ANY 

AUTHORIZED TRADER), AS THE CASE MAY BE, AND IS NOT AN ADVISOR OR 

FIDUCIARY OF SUCH PARTICIPANT OR PERSON ASSOCIATED WITH A 

PARTICIPANT (INCLUDING ANY AUTHORIZED TRADER), AS THE CASE MAY BE.

EXCEPT AS OTHERWISE PROVIDED IN THESE RULES, ANY LIABILITY 

OF THE EXCHANGE (OTHER THAN LIABILITY THAT IS EXCLUDED PURSUANT TO 

THE PRECEDING TWO PARAGRAPHS OF THIS RULE IV-20) WILL BE LIMITED TO 

DIRECT, OUT-OF-POCKET LOSSES DIRECTLY CAUSED BY THE ACTS OR 

OMISSIONS OF THE EXCHANGE OR ITS DIRECTORS, OFFICERS, EMPLOYEES OR 

AGENTS; PROVIDED THAT THE TOTAL COMBINED AGGREGATE LIABILITY OF THE 

EXCHANGE AND ITS DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS TO ANY 

ONE PARTICIPANT SHALL NOT, TAKEN TOGETHER WITH ANY LIABILITY OF THE 

CLEARINGHOUSE TO SUCH PARTICIPANT RESULTING FROM THE ACTS OR 

OMISSIONS OF THE CLEARINGHOUSE OR ITS DIRECTORS, OFFICERS, 

EMPLOYEES OR AGENTS, EXCEED $25,000 FOR ALL LOSSES FROM ALL CAUSES 

SUFFERED ON A SINGLE CALENDAR DAY; $50,000 FOR ALL LOSSES SUFFERED 

FROM ALL CAUSES IN A SINGLE CALENDAR MONTH; AND $500,000 FOR ALL 

LOSSES SUFFERED FROM ALL CAUSES IN A SINGLE CALENDAR YEAR.

ANY DISPUTE ARISING OUT OF THE USE OF THE CX DIRECT SYSTEM 

OR EXCHANGE SERVICES OR FACILITIES USED TO SUPPORT THE CX DIRECT 

SYSTEM IN WHICH THE EXCHANGE (INCLUDING ITS AFFILIATES AND ANY 

CONTRACTORS AND SUBCONTRACTORS PROVIDING SERVICES TO THE 

EXCHANGE) OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, 

EMPLOYEES OR AGENTS IS A PARTY SHALL BE CONSTRUED AND ENFORCED IN 

ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. ANY ACTIONS, 

SUITS OR PROCEEDINGS AGAINST ANY OF THE FOREGOING MUST BE 
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BROUGHT WITHIN TWO YEARS FROM THE TIME THEY FIRST ARISE, AND ANY 

SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY FEDERAL OR 

STATE COURTS LOCATED IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW 

YORK. THIS PROVISION SHALL IN NO WAY CREATE A CAUSE OF ACTION AND 

SHALL NOT AUTHORIZE ANY ACTION THAT WOULD OTHERWISE BE PROHIBITED 

BY RULES OF THE EXCHANGE.

ANY PARTICIPANT OR PERSON ASSOCIATED WITH A PARTICIPANT 

(INCLUDING ANY AUTHORIZED TRADER) WHO FAILS TO PREVAIL IN A LAWSUIT 

OR OTHER LEGAL PROCEEDING INSTITUTED BY SUCH PERSON AGAINST THE 

EXCHANGE (INCLUDING ITS AFFILIATES) OR ANY OF ITS DIRECTORS, 

COMMITTEE MEMBERS, OFFICERS, EMPLOYEES, AGENTS OR CONTRACTORS, 

AND RELATED TO THE BUSINESS OF THE EXCHANGE, WILL PAY TO THE 

EXCHANGE ALL REASONABLE EXPENSES, INCLUDING ATTORNEYS’ FEES, 

INCURRED BY THE EXCHANGE IN THE DEFENSE OF SUCH PROCEEDING TO THE 

EXTENT THAT SUCH EXPENSES EXCEED FIFTY THOUSAND DOLLARS 

($50,000.00). THIS PROVISION WILL NOT APPLY TO DISCIPLINARY ACTIONS BY 

THE EXCHANGE, ADMINISTRATIVE APPEALS OF EXCHANGE ACTIONS OR IN ANY 

SPECIFIC INSTANCE WHERE THE BOARD OF DIRECTORS HAS GRANTED A 

WAIVER OF THIS PROVISION.

NOTWITHSTANDING ANY OF THE FOREGOING PROVISIONS, THIS 

RULE IV-20 SHALL IN NO WAY LIMIT THE LIABILITY OF ANY PERSON ARISING 

FROM ANY VIOLATION OF SUCH PERSON OF THE CEA OR CFTC REGULATIONS 

THEREUNDER. 

IV-21. Opening Auctions

The trading of a particular Contract on the 

Exchange may be preceded by an Opening Auction. Any such Opening 

Auction will be conducted in accordance with these Rules and the applicable 

Contract Rules and will be used to determine the opening price of such 

Contract on the First Trading Day. The Opening Auction will be a two-sided, 

single price auction conducted by the Exchange on the First Trading Day at 

the times specified in the applicable Contract Rules. At the close of the 

Opening Auction, the Exchange will apply its proprietary pricing algorithm, 

as described in Rule IV-22(d) below, to the bids and offers submitted during 

the Opening Auction to determine the Equilibrium Price at which trading in 

the relevant Contract will commence on the First Trading Day. 

The Opening Auction will be open to all 

Participants; Participants may submit either offers or bids for Contracts at 

the times specified in the applicable Contract Rules. All entries must include 

the intention to bid or offer, quantity, and price limit.
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(i) The minimum quantity Order in the Opening Auction is one 

Contract. 

(ii) Orders will remain in the Exchange’s Master Order Book and 

will be available for execution after the close of the Opening Auction, 

subject to their original price/time priority. 

(iii) Bids and offers received by the Exchange may be cancelled 

by Participants prior to the execution of the Opening Auction, which shall 

be on the First Trading Day at the time specified in the applicable Contract 

Rules.

Bids and offers submitted in the Opening Auction 

will become binding on Participants immediately upon submission. At the 

time Orders are submitted in the Opening Auction, the Clearinghouse will 

deduct Original Margin, as if the Participant’s Orders were filled in their 

entirety, from each applicable Participant Clearing Account (as defined in the 

Rules of the Clearinghouse). Original Margin rates for the Opening Auction 

will be equal to an amount specified in the applicable Contract Rules. Failure 

to have sufficient funds on deposit with and available to the Clearinghouse 

will cause the Exchange to reduce the Order quantity until the required 

Original Margin is less than or equal to the Participant’s Available Funds.

The pricing of contracts in the Opening Auction 

shall be determined as follows:

(i) If zero Contracts are matched and no bids and no offers are 

received during an Opening Auction, there will be no Equilibrium Price. 

Under such circumstances, the Exchange will, in its reasonable judgment, 

establish the opening trading price, margin rates, and price limits with 

respect to such Contract, taking into account such factors and 

considerations as it deems appropriate.

(ii) If zero Contracts are matched and there are Orders on only 

one side of the market (bid or offer), then the Equilibrium Price will be 

equal to the best price on that side (highest bid or lowest offer).

(iii) If zero Contracts are matched and there are Orders on both 

sides of the market (bid and offer) then the Equilibrium Price will be equal 

to the midpoint of the best unmatched bid and offer prices. 

(iv) If Contracts are matched and the last matching lies between 

any remaining best unmatched bids and offers, then the Equilibrium Price 

will be equal to the last matching price at which a Contract was matched.
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(v) If Contracts are matched and the last matching price lies 

below the remaining best unmatched bid or above the remaining best 

unmatched offer, then the Equilibrium Price is set equal to the 

corresponding best unmatched bid or offer.

The following shall apply to post-Opening Auction 

Contract allocations, cancelled Orders and announcements:

(i) After the completion of the Opening Auction, the Exchange 

will allocate the matched Contracts among Participants at the Equilibrium 

Price, irrespective of the bid price or offer price submitted with the Order. 

Quantities will be allocated to Participants at the Equilibrium Price in

accordance with the time priority of their Orders. 

(ii) All unmatched bids and offers entered in connection with an 

Opening Auction will be carried over and applied to regular trading in the 

applicable Contract following the execution of the Opening Auction.

(iii) After the allocations of Contracts are complete, each 

Participant who participated in the Opening Auction will be notified of the 

Equilibrium Price, the volume and open interest of Contracts cleared and 

the status of their Orders (e.g., “Filled”, “Cancelled”, “Active”). 

IV-22. Daily and Weekly Reports

The Exchange will post on its website the current 

volume, open interest, last Settlement Price and Price Limits for all active 

Contracts on each Trading Day.

The Exchange will publish additional reports from 

time to time in accordance with, and as specified in, the applicable Contract 

Rules.
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CHAPTER V

OBLIGATIONS OF PARTICIPANTS

V-1. Books and Records; Cooperation in Proceedings

Each Participant that is registered with any selfregulatory association shall prepare and keep current all books, ledgers and 

other similar records required to be kept by it pursuant to the CEA, CFTC 

Regulations and the Rules of the Exchange, and shall prepare and keep 

current such other books and records and adopt such forms as the Exchange 

may from time to time prescribe. Such books and records shall be made 

available to the Exchange and its authorized representatives, including but 

not limited to the NFA as authorized under the Regulatory Services 

Agreement, the CFTC, the Department of Justice and their respective 

authorized representatives upon request.

Each Participant that is registered with any selfregulatory association shall keep all books and records required to be kept 

by it pursuant to these Rules for a period of five years from the date on which 

they are first prepared, unless otherwise provided in these Rules or required 

by law. Such books and records shall be readily accessible during the first 

two years of such five-year period. During such five-year period, all such 

books and records shall be made available for inspection by, and copies 

thereof shall be delivered to, the Exchange and its authorized 

representatives, including but not limited to the NFA as authorized under the 

Regulatory Services Agreement, upon request.

Each Participant that is not registered with the 

CFTC or any self-regulatory organization shall prepare and keep current all 

books, ledgers and other similar records in a form and substance as the 

Exchange may from time to time prescribe. Such books and records shall 

be made available to the Exchange, the CFTC, the Department of Justice 

and their respective authorized representatives upon request.

V-2. Minimum Financial Reporting Requirements and Reports

Each Participant that is registered with any self-regulatory association shall 

comply with the provisions of Applicable Law relating to minimum financial and related 

reporting and recordkeeping requirements. A copy of any notice or written report that a 

Participant is required to file with the CFTC pursuant to CFTC Regulation 1.12 shall be 

concurrently provided to the Exchange. A Participant that violates any of the 

aforementioned CFTC Regulations shall be deemed to have violated this Rule V-2.
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V-3. Authority of the President to Impose Restrictions

Whenever a Participant is subject to the early warning requirements set 

forth in CFTC Regulation 1.12, the President or his or her designee may impose such 

conditions or restrictions on the business and operations of such Participant as the 

President or his or her designee may deem necessary or appropriate for the protection of 

other Participants or the Exchange.

V-4. Minimum Financial Requirements

Each Participant shall be required to satisfy such 

minimum financial requirements as may be established from time to time by 

the Exchange or the Clearinghouse.

Each Participant must notify the President or his or 

her designee immediately upon becoming aware that it fails to satisfy the 

minimum financial requirements applicable to it.

Unless and until a Participant is able to 

demonstrate to the Board of Directors that it is in compliance with the 

minimum financial requirements applicable to it, such Participant may not 

engage in any transactions subject to the Rules of the Exchange, except for 

the purpose of closing open positions.

V-5. Trade Confirmations

The Exchange shall furnish, or cause to be 

furnished, to each Participant that enters into a trade, no later than 12:00 

Noon on the Trading Day immediately following the day on which such trade 

is entered into, an e-mail or downloadable confirmation of such trade in such 

form as the Exchange may from time to time prescribe, indicating the 

Contract bought or sold, the price, quantity, time of execution and such other 

information as the Exchange may require. In the case of an Option on 

Futures trade, such confirmation shall also indicate: (i) the amount of the 

premium and all other commissions, costs and fees, separately listed; (ii) the 

Option on Futures series; and (iii) the expiration date of the Option on 

Futures. 

Promptly upon the expiration or exercise of any 

Option on Futures, the Exchange must furnish to each Participant holding 

such Option on Futures an e-mail confirmation statement, which shall 

include the date of such occurrence, a description of such Option on Futures, 

and in the case of exercise, the details of the Future position resulting 

therefrom. 
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Notwithstanding paragraphs (a) and (b) above, a 

trade that is executed for a commodity pool needs to be confirmed only to 

the operator of such pool.

V-6. Account Statements

The Exchange shall furnish or cause to be furnished to each Participant as 

soon as practicable after the end of each month, a monthly statement of account via email. Each such statement shall indicate, at a minimum, the Participant’s initial balance, 

closing balance, commissions and fees incurred, income received and trades made.

V-7. Risk Disclosure Statement

A risk disclosure statement in the form approved by the Exchange for

purposes of CFTC Regulation 1.55 and any other disclosure statement from time to time 

required by the Exchange is included in the application form to become a Participant and 

shall be completed by the Participants where required under CFTC Regulations.

V-8. Fraudulent or Misleading Communications

No Participant shall make, or attempt to make, any fraudulent or misleading 

communications relating to the purchase or sale of any Contract.

V-9. System Security

Each Participant that is an Entity shall at all times 

have at least one employee or agent (each, a “Responsible Agent”) 

designated as its administrator with respect to the use of the CX Direct 

System by the Authorized Traders of such Participant. Each Participant that 

is a natural person shall serve as its own Responsible Agent. The Exchange 

may prescribe such qualification standards for Responsible Agents as it may

from time to time determine necessary or advisable. Among other things, 

each Responsible Agent shall (i) have full control over access to the CX 

Direct System by the Participant (including its Authorized Traders) 

represented by such Responsible Agent and (ii) be able to access, and, if 

required, modify and withdraw, any and all Orders placed, or purported to be 

placed, by the Authorized Traders of such Participant. The Responsible 

Agent or Responsible Agents of any Participant shall also be solely

responsible for any and all communications between the Exchange and such 

Participant, and any and all notices or other communications sent to such 

Responsible Agent or Responsible Agents by the Exchange shall be binding 

on such Participant. Each Participant shall notify the Exchange promptly of 

any change regarding any of its Responsible Agents.
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Each Participant shall (i) be solely responsible for 

controlling and monitoring the use of all user identification codes and 

passwords to access the CX Direct System (collectively, “Passwords”) 

issued to its Authorized Traders and Responsible Agents by the Exchange, 

(ii) provide such Passwords only to its Authorized Traders and Responsible 

Agents, and (iii) shall notify the Exchange promptly upon becoming aware of 

any unauthorized disclosure or use of the Passwords or access to the 

Exchange or of any other reason for deactivating Passwords. Each 

Participant, on behalf of itself and its Authorized Traders, shall be bound by 

any actions taken through the use of its Passwords (other than any such 

actions resulting from the fault or negligence of the Exchange), including the 

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

such Participant or any of its Supervised Persons or executed by anyone 

other than an Authorized Trader of such Participant.

Notwithstanding anything to the contrary in Rule V9(b), each Authorized Trader shall have his or her own unique Passwords 

that may be used only by such Authorized Trader and solely for the purpose

of submitting Orders in respect of the Trading Account for which the 

Authorized Trader has Trading Privileges.

V-10. Market Maker Programs

The Exchange may from time to time adopt one or more programs under 

which one or more Participants or Authorized Traders may be designated as Market 

Makers with respect to one or more Contracts, and may be granted certain benefits in 

return for assuming obligations in order to provide liquidity and orderliness in the market 

or markets for such Contract or Contracts. Any such program may provide for any or all 

of the following:

qualifications, including any minimum net capital 

requirements, that any such Market Maker must satisfy;

the procedure by which Participants or Authorized 

Traders may seek and receive designation as Market Makers;

the obligations of such Market Makers, including 

any applicable minimum bid and offer commitments; and

the benefits accruing to such Market Makers, 

including priority in the execution of transactions effected by Participants or 

Authorized Traders in their capacity as Market Makers, reduced transaction 

fees or the receipt of compensatory payments from the Exchange.
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V-11. DPMs

Without limiting the generality of Rule V-10, the 

Exchange may from time to time approve such number of Participants as 

DPMs, and allocate to such DPMs such number and types of Contracts, as 

it may deem necessary or appropriate. Any and all such approvals or 

allocations may be reviewed, conditioned or terminated at any time in 

accordance with this Rule V-11.

A Participant desiring to act as a DPM shall file an 

application with the Exchange in such form as the Exchange may from time 

to time prescribe. DPMs shall be selected by the Exchange from among the 

applications from time to time on file with the Exchange, based on the 

Exchange’s judgment as to which applicant or applicants is or are most 

qualified to perform the functions of a DPM. Factors to be considered in 

making such selection may include, but are not limited to, any one or more 

of the following:

(i) the adequacy of each applicant’s capital;

(ii) each applicant’s operational capacity;

(iii) the trading experience of, and observance of generally 

accepted standards of conduct by, each applicant and its affiliates, in 

particular the individual or individuals who would represent such applicant 

in its capacity as a DPM (each, a “DPM Designee”);

(iv) the number and experience of support personnel of each 

applicant who will be performing functions related to its DPM business;

(v) if applicable, the regulatory history of, and history of 

adherence to the Rules of the Exchange, rules of other self-regulatory 

organizations and Applicable Law by, each applicant and affiliates, in 

particular its DPM Designees;

(vi) the willingness and ability of each applicant to promote the 

Exchange as the marketplace of choice;

(vii) the market performance commitments of each applicant;

(viii) if applicable, any performance evaluations conducted 

pursuant to the Rules of the Exchange or rules of other self-regulatory 

organizations; and

(ix) in the event that one or more affiliates of any applicant are or 

were at any time affiliates of any other DPM, adherence by such other 
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DPM to the requirements set forth in the Rules of the Exchange regarding 

responsibilities and obligations of DPMs during the time period while such 

affiliate or affiliates held such position or positions with such other DPM.

In approving any applicant as a DPM, the 

Exchange may place one or more conditions or limitations on the approval, 

including but not limited to:

(i) conditions concerning the capital, operations or personnel of 

such applicant, satisfaction of market performance commitments or 

benchmarks by such applicant, and the number or types of Contracts 

which may be allocated to such applicant; and

(ii) limitations regarding the time period for which such applicant 

is approved as a DPM (which time period may be subsequently extended 

by the Exchange at its sole discretion).

Each Participant approved as a DPM shall retain 

such status until (x) it resigns as a DPM and the Exchange relieves such 

Participant of its obligations to act as a DPM, (y) the Exchange suspends or 

terminates such DPM’s status or (z) if applicable, the time period referred to 

in paragraph (c)(ii) above expires. In any of the foregoing circumstances, 

the Exchange shall have discretion to do one or both of the following:

(i) approve an interim DPM, pending the final approval of a new 

DPM pursuant to the regular procedures for DPM approval; and

(ii) allocate on an interim basis to one or more other DPMs the 

Contracts that were allocated to the DPM whose status is affected by such 

circumstances, pending a final allocation of such Contracts pursuant to 

paragraph (e) below.

Neither an interim approval nor an allocation made pursuant to this 

paragraph (d) shall constitute a prejudgment with respect to the final approval or 

allocation.

In allocating Contracts to DPMs approved in 

accordance with paragraphs (b) and (c) above, the Exchange may: (i) 

consider any relevant information, including but not limited to performance, 

volume, capacity, market performance commitments, operational factors, 

efficiency, competitiveness and recommendations of committees of the 

Board of Directors or of the Exchange; (ii) place one or more conditions or 

limitations of the type specified in paragraph (c) above on the approval; or 

(iii) allocate any Contract to more than one DPM, such that the different 

DPMs serve at the same time but with respect to different contract months 
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or in different time zones, or such that each of the DPMs serves as the DPM 

for such Contract on a rotating basis.

No DPM may sell, transfer or assign any of its rights 

or obligations as a DPM (including but not limited to its allocation of any 

Contracts by virtue of its status as a DPM) without the prior written approval 

of such sale, transfer or assignment (including but not limited to the approval 

of the Person to which such rights, obligations or allocation are intended to 

be sold, transferred or assigned) by the Exchange. Any purported sale, 

transfer or assignment in violation of the foregoing sentence shall be void 

from the outset. For purposes of this paragraph (f), the following 

transactions shall be deemed to constitute a transfer of a DPM’s rights or 

obligations:

(i) any sale, transfer or assignment of a percentage from time to 

time determined by the Exchange of the equity or profits or losses of a 

DPM (or any series of smaller changes that in the aggregate amount to a 

change of at least such percentage); provided that any sale, transfer or 

assignment of an interest of less than such percentage may be found by 

the Exchange to constitute a transfer of a DPM’s rights or obligations if 

the particular facts and circumstances warrant such a determination;

(ii) any change in, or transfer of, Control of a DPM; and 

(iii) any merger, sale of assets or other business combination or 

reorganization involving a DPM.

The Exchange may from time to time evaluate a 

DPM’s performance with respect to, among other things, one or more of the 

following: quality of markets, market share (taking into account all contracts 

similar to the relevant Contract or Contracts), administrative factors and 

observance of ethical standards. In this connection, the Exchange may 

consider any relevant information, including but not limited to market share 

and trading data, a DPM’s regulatory history and such other factors and data 

as may be pertinent under the circumstances.

The Exchange may terminate, place conditions 

upon or otherwise limit a Participant’s approval to act as a DPM or a DPM’s 

allocation of Contracts, under any one or more of the following 

circumstances:

(i) if the Exchange finds in connection with an evaluation under 

paragraph (g) above that such Participant’s performance as a DPM has 

been unsatisfactory;
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(ii) if such Participant becomes subject to a material financial, 

operational or personnel change;

(iii) if such Participant fails to (A) comply with any conditions 

previously placed upon its approval as a DPM or its allocation of Contracts 

or (B) perform its obligations under paragraph (j) below; or

(iv) if for any reason such Participant is no longer eligible for 

approval as a DPM or to be allocated a particular number or type of 

Contracts.

Each applicant for approval as a DPM pursuant to 

paragraph (b) above shall be given an opportunity to present any matter 

which it wishes the Exchange to consider in conjunction with the application. 

Prior to taking any remedial action against a DPM pursuant to paragraph (h) 

above, such DPM shall be given notice thereof and an opportunity to present 

any matter which it wishes the Exchange to consider in determining whether 

to take such action. The Exchange may require that any presentation under 

this paragraph (i) be made partially or entirely in writing, and may require the 

submission of additional information from any Person wishing to make a 

presentation under this paragraph (i). Formal rules of evidence shall not 

apply to any proceeding involving such a presentation. Notwithstanding the 

foregoing, the Exchange shall have the authority to immediately terminate, 

condition or otherwise limit a Participant’s approval to act as a DPM in 

accordance with subparagraph (h)(ii) above, without prior notice or 

opportunity to make a presentation under this paragraph (i), if the financial, 

operational or personnel change in question warrants such action.

DPMs shall have such rights and obligations as the 

Exchange may specify in connection with their approval or prescribe from 

time to time in policies or procedures.

V-12. Investment of Certain Participant Account Funds

Participant funds on deposit with the Exchange and funds in the Trading 

Accounts of such Participants (i.e., the account containing the funds paid by Participants 

to purchase or sell Contracts and which are to be used to pay Participants at expiration 

of Contracts) will be segregated in accordance with the CFTC’s Regulations. The 

Exchange may invest such funds subject to the limitations and conditions set forth in 

CFTC Regulation 1.25. The Exchange will pay interest to Participants’ Trading Accounts 

at a rate to be determined by the Exchange on funds in Participants’ Trading Accounts in 

excess of an amount to be determined by the Exchange. The Exchange will retain all 

profit from investment of the Participant funds not paid to Participants in accordance with 

the preceding sentence.
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CHAPTER VI

BUSINESS CONDUCT

VI-1. Rule Violations

It shall be an offense to violate any Rule of the Exchange or Rule of the 

Clearinghouse regulating the conduct or business of a Participant, or any agreement 

made with the Exchange, or to engage in fraud, dishonorable or dishonest conduct, or in 

conduct which is inconsistent with just and equitable principles of trade.

VI-2. Fraudulent Acts

No Participant, Authorized Trader or, if applicable, 

any other Supervised Persons shall engage, or attempt to engage, in any 

fraudulent act or engage, or attempt to engage, in any scheme to defraud, 

deceive or trick in connection with or related to any trade on or other activity 

related to the Exchange or the Clearinghouse.

Notwithstanding anything to the contrary in these 

Rules, neither the prohibitions on trading described in Rule VI-12 nor any 

other provisions of these Rules will supersede any applicable prohibitions on 

fraud and manipulation, whether such prohibitions are prescribed by law, 

regulation or the Rules of the Exchange or the Rules of the Clearinghouse. 

All such prohibitions on fraud and manipulation, including, but not limited to, 

the antifraud provisions of the CEA and the antifraud rules promulgated by 

the CFTC thereunder, will remain in full force and effect with respect to, and 

will be fully applicable to, the trading of all Contracts. The Exchange and the 

Clearinghouse each retain the right to take any appropriate disciplinary 

actions against Participants as permitted by the Rules of the Exchange or 

the Rules of the Clearinghouse, as applicable.

VI-3. Fictitious Transactions

No Participant, Authorized Trader or, if applicable, any other Supervised 

Person shall create fictitious transactions or execute any such Order with knowledge of 

its nature.

VI-4. Market Demoralization

Orders entered into the CX Direct System for the purpose of upsetting the 

equilibrium of the market in any Contract or creating a condition in which prices do not or 

will not reflect fair market values are prohibited, and any Participant, Authorized Trader 

and, if applicable, any other Supervised Person who makes or assists in entering any 

such Order with knowledge of the purpose thereof or who, with such knowledge, in any 
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way assists in carrying out any plan or scheme for the entering of any such Order, will be 

deemed to have engaged in an act detrimental to the Exchange.

VI-5. Price Manipulation

Any manipulation of the market in any Contract is prohibited. It shall be a 

violation of this Rule for any person to manipulate or attempt to manipulate the price of 

any Contract traded on or subject to the rules of the Exchange.

VI-6. Prohibition of Misstatements

It shall be an offense to make any misstatement of a material fact to the 

Exchange (including the Board of Directors, any committee thereof or any panel of any 

such committee, any Exchange Official or any committee of the Exchange) or to the NFA 

(including any members of its staff).

VI-7. Adherence to Law

No Participant, Authorized Trader or, if applicable, any other Supervised 

Person shall engage in conduct in violation of Applicable Law, the Rules of the Exchange 

or the Rules of the Clearinghouse (insofar as the Rules of the Clearinghouse relate to the 

reporting or clearance of any transaction in Contracts).

VI-8. Use of Trading Privileges

No Participant, Authorized Trader or, if applicable, any other Supervised 

Person may use its Trading Privileges or access the Exchange in any way which could 

be expected to bring disrepute upon such Participant or the Exchange.

VI-9. Supervision

Each Participant shall be responsible for establishing, maintaining and 

administering reasonably supervisory procedures to ensure that its Supervised Persons 

comply with Applicable Law, the Rules of the Exchange and the Rules and the 

Clearinghouse, shall be responsible for supervising its Supervised Persons and may be 

held accountable for the actions of such Supervised Persons.

VI-10. Disclosing Orders

Except in accordance with any policies or procedures for pre-execution 

discussion from time to time adopted by the Exchange, no Participant shall disclose to 

any Person any Order placed by any other Person, except to an Exchange Official or a 

member of the staff of the CFTC, the NFA, or the Department of Justice, respectively.
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VI-11. Pre-Execution Discussions

Authorized Traders seeking to execute a prenegotiated transaction must wait for a reasonable period of time, which shall 

be presumed to be not less than 15 seconds after the initial Order is 

submitted to the CX Direct System, before submitting the opposite side 

Order.

Except in the case of transactions effected 

pursuant to Rule VI-11(a), no Authorized Traders shall enter through the CX 

Direct System into a pre-discussed or pre-arranged transaction. 

VI-12. Disruptive Practices

It shall be a violation of this Rule for any person to engage in any trading, 

practice, or conduct on or subject to the rules of the Exchange that:

violates bids or offers;

demonstrates intentional or reckless disregard for 

orderly execution of transactions during the closing period; or 

is, is of the character of, or is commonly known to 

the trade as, “spoofing” (bidding or offering with the intent to cancel the bid 

or offer before execution).
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CHAPTER VII

DISCIPLINE AND ENFORCEMENT

VII-1. General

All Participants and Authorized Traders shall be 

subject to the Exchange’s jurisdiction. All Participants and Authorized 

Traders are subject to this Chapter VII if they are alleged to have violated, to 

have aided and abetted a violation, to be violating, or to be about to violate, 

any Rule of the Exchange or any provision of Applicable Law for which the 

Exchange possesses disciplinary jurisdiction.

The Exchange will conduct inquiries, 

investigations, disciplinary proceedings and appeals from disciplinary 

proceedings, summary impositions of fines, summary suspensions or other 

summary actions in accordance with this Chapter VII.

The Exchange may delegate any or all of its powers 

or responsibilities under this Chapter VII to the NFA (acting in its compliance 

role, the “Compliance Department”) and the Disciplinary Panel, which may 

take any actions on behalf of the Exchange that the Exchange is permitted 

to take hereunder. In the event of any such delegation, references to the 

Exchange in this Chapter VII shall be construed to be references to the 

Compliance Department or the Disciplinary Panel, as the case may be.

No member of the staff of the Exchange will 

interfere with or attempt to influence the process or resolution of any inquiry, 

investigation, disciplinary proceeding, appeal from a disciplinary proceeding, 

summary imposition of fines, summary suspension or other summary action. 

No member of the Board of Directors will interfere with or attempt to influence 

the process or resolution of any inquiry, investigation, disciplinary 

proceeding, appeal from a disciplinary proceeding, summary, imposition of 

fines, summary suspension or other summary action with respect to which 

the member of the Board of Directors is not a member of the relevant 

Appeals Panel.

Any Participant or Authorized Trader may be 

represented by counsel during any inquiry, investigation, disciplinary 

proceeding, appeal from a disciplinary proceeding, summary imposition of 

fines, summary suspension or other summary actions pursuant to this 

Chapter VII.

Pursuant to this Chapter VII, the Exchange may 

hold:
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(i) a Participant liable for, and impose sanctions against such 

Participant, for such Participant’s own acts and omissions that constitute 

a violation;

(ii) a Participant liable for, and impose sanctions against such 

Participant, for the acts and omissions of each Authorized Trader 

authorized by, and each other agent or representative of, such Participant 

that constitute a violation as if such violation were that of the Participant;

(iii) an Authorized Trader liable for, and impose sanctions against 

him or her, for such Authorized Trader’s own acts and omissions that 

constitute a violation; and

(iv) an Authorized Trader liable for, and impose sanctions against 

him or her, for the acts and omissions of each agent or representative of 

such Authorized Trader that constitute a violation as if such violation were 

that of the Authorized Trader.

Pursuant to this Chapter VII, the Exchange may in 

its sole discretion, and subject to the conditions specified in Rule III-3(g), 

review an appeal by any applicant of the Exchange’s decision to deny or 

otherwise limit Trading Privileges of such applicant pursuant to the Rules of 

the Exchange; provided, however, that any such decision by the Exchange 

to deny or otherwise limit applicant’s Trading Privileges shall continue in 

effect during such review.

VII-2. Inquiries and Investigations

The Compliance Department will, in conjunction 

with NFA, investigate any matter within the Exchange’s disciplinary 

jurisdiction that is brought to such department’s attention, including but not 

limited to, possible violations of the Rules of the Exchange or manipulation 

of a Contract that is traded on the Exchange. All such investigations must 

be completed in a timely manner, as determined in the reasonable judgment 

of the Exchange. The Compliance Department will determine the nature and 

scope of its inquiries and investigations within its sole discretion and will 

function independently of any commercial interests of the Exchange.

The Compliance Department has the authority to:

(i) initiate and conduct inquiries and investigations;

(ii) prepare investigative reports and make recommendations 

concerning initiating disciplinary proceedings;
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(iii) prosecute alleged violations within the Exchange’s 

disciplinary jurisdiction; and

(iv) represent the Exchange on appeal from any disciplinary 

proceeding, summary imposition of fines, summary suspension or other 

summary action.

Each Participant or Authorized Trader:

(i) is obligated to appear and testify and respond in writing to 

interrogatories within the time period required by the Compliance 

Department in connection with: (A) any Rule of the Exchange; (B) any 

inquiry or investigation; or (C) 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 the Exchange;

(ii) is obligated to produce books, records, papers, documents or 

other tangible evidence in its, his or her possession, custody or control 

within the time period required by the Compliance Department in 

connection with: (A) any Rule of the Exchange; (B) any inquiry or 

investigation; or (C) 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 the Exchange; and

(iii) may not impede or delay any inquiry, investigation, 

disciplinary proceeding, appeal from a disciplinary proceeding, summary 

imposition of fines, summary suspension or other summary action.

VII-3. Reports of Investigations

The Compliance Department will maintain a log of 

all investigations and their disposition. The Compliance Department will 

prepare a written report of each investigation, regardless of whether the 

evidence gathered during any inquiry or investigation forms a reasonable 

basis to believe that a violation within the Exchange’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 written report of investigation will include the 

reasons for initiating the investigation (including a summary of the complaint, 

if any), all relevant facts and evidence gathered, and the recommendation of 

the Compliance Department. For each potential respondent, the 

Compliance Department will recommend either (i) closing the investigation 
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without further action, (ii) summary action, (iii) resolving the investigation 

through an informal disposition, including the issuance of a warning letter or 

(iv) initiating disciplinary proceedings. An informal disposition (including the 

issuance of a warning letter) will not constitute a finding of a violation or a 

sanction.

VII-4. Review of Investigative Reports 

The Compliance Director will review promptly each 

completed investigation report to determine whether a reasonable basis 

exists to believe that a violation within the Exchange’s jurisdiction has 

occurred or is about to occur. Such determination will be made by the 

Compliance Director within 10 Business Days of receipt of the applicable 

investigation report.

If the Compliance Director determines that 

additional investigation or evidence is needed to decide whether a 

reasonable basis exists to believe that a violation within the Exchange’s 

jurisdiction has occurred or is about to occur, the Compliance Director will 

direct the Compliance Department to conduct further investigation.

After receiving completion of an investigation, the 

Compliance Director will determine for each potential respondent whether to 

authorize:

(i) the commencement of disciplinary proceedings because a 

reasonable basis exists to believe that a violation within the Exchange’s 

jurisdiction has occurred or is about to occur;

(ii) the informal disposition of the investigation (by issuing a 

warning letter or otherwise) if the Compliance Director determines that a 

violation of the Rules of the Exchange or any applicable Contract Rules 

may have occurred but that formal disciplinary proceedings are 

unwarranted; or

(iii) the closing of the investigation without any action, and without 

the issuance of a warning letter, because disciplinary proceedings are not 

warranted and no reasonable basis exists to believe that a violation within 

the Exchange’s jurisdiction has occurred or is about to occur.

VII-5. Notice of Charges and Opportunity to Respond

If the Compliance Director authorizes disciplinary

proceedings pursuant to Rule VII-4, the Compliance Department will prepare 
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in accordance with Rule VII-5 and serve in accordance with Rule VII-7, a 

notice of charges within 20 Business Days thereafter.

A notice of charges will:

(i) state the acts, practices or conduct that the respondent is 

alleged to have engaged in;

(ii) state the Rule of the Exchange or provision of Applicable Law 

alleged to have been violated or about to be violated;

(iii) state the proposed sanctions;

(iv) advise the respondent of its right to submit a written statement 

explaining why a disciplinary proceeding should not be instituted or one 

or more of the potential charges should not be brought, which statement 

must be submitted within 20 Business Days after service of the notice of 

charges;

(v) advise the respondent of its right to a hearing and its right to 

have counsel present;

(vi) state the period of time within which the respondent can 

request a hearing on the notice of charges, in lieu of submitting a written 

statement pursuant to Rule VII-5(b)(iv), which will not be less than 20 

Business Days after service of the notice of charges;

(vii) 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

(viii) advise the respondent that any allegation in the notice of 

charges that is not expressly denied will be deemed to be admitted.

If the respondent submits a written statement 

pursuant to Rule VII-5(b)(iv), the Compliance Director shall, within 10 

Business Days after receipt of the written statement, advise the respondent:

(i) of the Compliance Director’s decision to drop any or all of the 

potential charges;

(ii) that the disciplinary proceedings will proceed with respect to 

all remaining charges in accordance with the notice of charges delivered 

to the respondent; and/or, as appropriate
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(iii) that the respondent shall have 20 Business Days to submit an 

answer to the notice of charges, as described in Rule VII-6.

VII-6. Answer to Notice of Charges

If the respondent determines to answer a notice of 

charges, the respondent must file answers within 20 Business Days after 

being served with such notice, or within such other time period determined 

appropriate by the Compliance Director.

To answer a notice of charges, the respondent 

must in writing:

(i) specify the allegations that the respondent denies or admits;

(ii) specify the allegations that the respondent does not have 

sufficient information to either deny or admit;

(iii) specify any specific facts that contradict the notice of charges;

(iv) specify any affirmative defenses to the notice of charges; and

(v) sign and serve the answer on the Director of Hearings.

Any failure by the respondent to timely serve an 

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 expressly deny will be deemed to be admitted. A 

general denial by the respondent, without more, will not satisfy the 

requirements of paragraph (b) above.

VII-7. Service of Notice of Charges

Any notice of charges or other documents 

contemplated to be served pursuant to this Chapter VII may be served (and 

service shall be deemed complete) upon the respondent either personally or 

by (i) leaving the same at his or her place of business 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 on the books and 

records of the Exchange, or (ii) sending the same via electronic mail to the 

e-mail address of the respondent as it appears on the books and records of 

the Exchange.
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VII-8. 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. 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 the Exchange 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) above, the Compliance 

Department will forward the offer to the Compliance Director with a 

recommendation on whether to accept or reject the offer. If the Compliance 

Director conditionally accepts an offer of settlement, the settlement will 

become final upon the expiration of 20 Business Days after an order of the 

disciplinary proceedings consistent with the terms of the offer of settlement 

is served on the respondent. 

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, fails to become final or is withdrawn by the 

respondent or potential respondent, 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.

VII-9. Disciplinary Panel

A disciplinary panel consisting of five individuals 

selected by the Board of Directors from the Exchange’s Hearing Panel 

Committee (with one individual acting as chairman) (the “Disciplinary 

Panel”), will conduct hearings in connection with any disciplinary 

proceedings, to make findings and impose sanctions pursuant to this 

Chapter VII. A separate disciplinary panel will be established prior to the 

commencement of each disciplinary matter. No Disciplinary Panel shall be 
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comprised in a manner such that any group or class of industry participants 

may reasonably be expected to dominate or exercise disproportionate 

influence on such panel. Each Disciplinary Panel shall consist of at least 

one individual who would qualify as a Public Director (if the individual was a 

director of the Exchange), except in cases limited to decorum, attire, or the 

timely submission of accurate records required for clearing or verifying each 

day’s transactions. Members of the Compliance Department of the 

Exchange shall not be eligible to serve on a Disciplinary Panel.

Within 10 Business 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 

Rule II-10 or for any other reasonable grounds, by serving written notice on 

the Compliance Director and providing a copy thereof to the Director of 

Hearings. 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 Compliance Director 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.

VII-10. Convening Hearings of Disciplinary Proceedings

All disciplinary proceedings (except for summary 

impositions of fines pursuant to Rule VII-17) will be conducted at a hearing 

before the Disciplinary Panel. A hearing will be conducted privately and 

confidentially unless the Disciplinary Panel decides that the hearing, or any 

part of it, should be held in public after giving each respondent the 

opportunity to present its, his or her views on holding a public hearing. 

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 (but in no event later than 30 Business Days 

following such notice) 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 or she 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 or law. Once admitted during the hearing, 
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the Disciplinary Panel may consider, and attach the weight it believes 

appropriate to, evidence or other materials. The Exchange 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 paragraph (c) 

above and Rule VII-11, unless each respondent otherwise consents, the 

entire Disciplinary Panel must be present during the entire hearing and any 

related deliberations.

VII-11. Respondent Review of Evidence

Prior to the commencement of a hearing, each 

respondent will be given the opportunity to review all books, records, 

documents, papers, transcripts of testimony and other tangible evidence in 

the possession or under the control of the Exchange 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 the Exchange will have no 

obligation to disclose, any information protected by attorney-client privilege 

or any other privileges recognized by Applicable Law.

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 paragraph (b) above 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 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.
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For purposes of this Rule VII-11, information that 

could adversely affect competitive positions include positions in Contracts 

currently held, trading strategies employed in establishing or liquidating 

positions, the identity of any Participant or Authorized Trader and the 

personal finances of the Person providing the information.

VII-12. 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 Rule VII-6, the respondent is entitled to 

attend and participate in the hearing.

At a hearing conducted in connection with any 

disciplinary proceedings, the Disciplinary Panel or 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 timely file an answer. If the Disciplinary 

Panel determines that the respondent had a compelling reason for failing to 

timely file an answer, the Disciplinary Panel will adjourn the hearing and 

direct the respondent to promptly file a written answer in accordance with 

Rule VII-6.

Any Person entitled, or required or called upon, to 

attend a hearing before a Disciplinary Panel pursuant to paragraph (b)(ii) 

above will be given reasonable notice, confirmed in writing, specifying the 

date, time and place of the hearing, and the caption of the disciplinary 
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proceedings. The Exchange will require all Participants and Authorized 

Traders that are called as witnesses to appear at the hearing and produce 

evidence. The Exchange will make reasonable efforts to secure the 

presence of all other Persons called as witnesses whose testimony would 

be relevant.

If during any disciplinary proceedings the 

Disciplinary Panel determines that a reasonable basis exists to believe that 

the respondent violated or is about to violate a Rule of the Exchange 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 Rule VII-6. In connection with considering 

apparent violations pursuant to this paragraph (e), the Disciplinary Panel 

may request that the Compliance Department provide the Panel with any 

additional information.

The Disciplinary Panel may summarily impose 

sanctions on any Participant or Authorized Trader that impede or delay the 

progress of a hearing.

The Exchange 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. 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 

or her 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.

VII-13. 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.

The Exchange will serve a copy of the order of the 

disciplinary proceedings on the respondent and the Compliance 

Department. The order will include:

(i) the notice of charges or summary of the allegations;
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(ii) the answer, if any, or a summary of the answer;

(iii) a brief summary of the evidence introduced at the hearing;

(iv) findings of fact and conclusions concerning each allegation, 

including each specific Rule of the Exchange and provision of Applicable 

Law that the respondent is found to have violated; 

(v) the imposition of sanctions, if any, and the effective date of 

each sanction; and

(vi) notice of the respondent’s right to appeal pursuant to Rule VII16.

Unless a timely notice of appeal is filed pursuant to 

Rule VII-16, the order of the disciplinary proceedings will become final upon 

the expiration of 20 Business Days after the order is served on the 

respondent and a copy thereof is provided to the Compliance Department.

VII-14. Sanctions

After notice and opportunity for hearing in 

accordance with these Rules, the Exchange will impose sanctions if a 

Participant or Authorized Trader is found to have violated or to have 

attempted to violate a Rule of the Exchange or provision of Applicable Law 

for which the Exchange possesses disciplinary jurisdiction. The Exchange 

may impose one or more of the following sanctions or remedies: (i) censure; 

(ii) limitation on Trading Privileges, association with a Participant or other 

activities, functions or operations; (iii) suspension of Trading Privileges or 

association with a Participant for a period not to exceed 12 months; (iv) fine 

(subject to paragraph (b) below); (v) restitution or disgorgement; 

(vi) termination of Trading Privileges; or (vii) any other sanction or remedy 

deemed to be appropriate.

The Exchange may impose a fine of up to $500,000 

for each violation. If a fine or other amount is not paid within 30 Business 

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 

percent. The Exchange 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 Authorized 

Trader authorized by, or other agent or representative of, such Participant.
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VII-15. Costs

Regardless of the outcome of any disciplinary 

proceeding, the Disciplinary Panel may order a respondent to pay some or 

all of the costs associated with the disciplinary proceedings that the 

Disciplinary Panel believes were unnecessarily caused by the respondent. 

Costs may include costs associated with the inquiry or investigation, the 

prosecution by the Compliance Department, legal and professional 

assistance, the hearing and administrative and other expenses incurred by 

the Disciplinary Panel.

The Disciplinary Panel may only award costs 

against the Exchange if the Panel concludes that the Exchange has behaved 

in a manifestly unreasonable manner in the commencement or conduct of 

the disciplinary proceedings in question. The Disciplinary Panel must limit 

any award of costs against the Exchange to an amount that the Panel 

concludes is reasonable and appropriate, but does not exceed the 

respondent’s costs for external legal or other external professional 

assistance.

The Disciplinary Panel may determine the amounts 

and allocation of costs in any manner it may deem appropriate. The 

Exchange or the respondent will pay any costs ordered to be paid by it by 

the Disciplinary Panel within 30 Business Days of the later of either written 

notice of (i) the amount imposed by the Disciplinary Panel or (ii) the 

determination of an appeal by the Appeals Panel against the Disciplinary 

Panel’s determination.

VII-16. Appeal from Disciplinary Panel Decision, Summary Impositions of 

Fines and Other Summary Actions

Each respondent found by the Disciplinary Panel to 

have violated a Rule of the Exchange or a provision of Applicable Law or 

who is subject to any summary fine imposed pursuant to Rule VII-17 or any 

summary action imposed pursuant to Rule VII-17 may appeal the decision 

within 20 Business Days of receiving the order of the disciplinary 

proceedings or the notice of summary action, as the case may be, by filing 

a notice of appeal with the Compliance Director. While an appeal is pending, 

the effect of the order of disciplinary proceedings or the summary action 

(including any sanctions, remedies or costs imposed thereby) shall be 

suspended; provided however, any summary sanction entered under Rule 

VII-18 shall continue in effect during the appeal.

The notice of appeal must state in writing the 

grounds for appeal, including the findings of fact, conclusions or sanctions 
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to which the respondent objects. An appellant may appeal the order of 

disciplinary proceedings or any summary decision on the grounds that:

(i) the decision was arbitrary, capricious, an abuse of discretion, 

or not in accordance with the Rules of the Exchange;

(ii) the decision exceeded the authority or jurisdiction of the 

Disciplinary Panel, the Compliance Director or the Exchange;

(iii) the decision failed to observe required procedures;

(iv) the decision was unsupported by the facts or evidence; or

(v) the imposed sanctions, remedies or costs are inappropriate or 

unsupported by the record.

The Compliance Director will forward copies of any 

notice of appeals 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 

Compliance Director 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 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.

In connection with any appeal, the Compliance 

Department will furnish to the Compliance Director 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.

Within 30 Business Days after the last submission

filed pursuant to paragraph (c) above, the Compliance Director will appoint 

the Appeals Panel to consider and determine the appeal. No member of the 

Disciplinary Panel that originally heard the matter may be a member of the 

Appeals Panel on such matter.

The Appeals Panel may hold a hearing to allow 

parties to present oral arguments. Any hearing will be conducted privately 

and confidentially unless the Appeals Panel decides that the hearing, or any 

part of it, should be held in public after giving each appellant the opportunity 

to present their views on holding a public hearing. Notwithstanding the 

confidentiality of hearings, the Appeals Panel may appoint individuals to 
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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 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 Compliance Director or the Compliance Director’s 

Designee, 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 on 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 or, only if it finds that the decision of the Disciplinary Panel or the 

Compliance Director that is under review, as the case may be, meets one of 

the criteria listed in Rule VII-16(i) below, modify or reverse any order of the 

disciplinary proceedings 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 the Rules of 

the Exchange, or remanding the matter to the same or a different Disciplinary 

Panel for further disciplinary proceedings or for reconsideration by the 

Compliance Director. The Appeals Panel may order a new hearing for good 

cause or if the Appeals Panel determines in its sole discretion that the 

appellant was not given a full and fair opportunity to make an argument in its 

favor and present supporting evidence.

As described in Rule VII-16(h) above, the Appeals 

Panel may modify or reverse any order of the disciplinary proceedings or 

summary action under appeal only if it finds that the decision was:

(i) Arbitrary, capricious, or an abuse of the discretion of the 

Disciplinary Panel, the Compliance Director, or the Compliance Director’s 

Designee, as the case may be;

(ii) In excess of the authority or jurisdiction of the Disciplinary 

Panel or the Compliance Director, as the case may be; or

(iii) Based on a clearly erroneous application or interpretation of 

the Rules of the Exchange or the applicable Contract Rules.

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. 
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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 of the Exchange 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 Appeal 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 the Exchange and will not be subject to appeal within 

the Exchange.

Within 10 Business 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 this 

Rule VII-16 or for any other reasonable grounds, by serving written notice on 

the Compliance Director and providing a copy thereof to the Director of 

Hearings. By not timely filing a request for disqualification, the respondent 

will be deemed to have waived any objection to the composition of an 

Appeals Panel. The Compliance Director 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.

VII-17. Summary Imposition of Fines

The Compliance Director may summarily impose a 

fine against a Participant or Authorized Trader for failing:

(i) to make timely payments of margin, options premiums, fees, 

cost, charges or fines to the Exchange or the Clearinghouse;

(ii) to make timely and accurate submissions to the Exchange of 

notices, reports or other information required by the Rules of the 

Exchange; and

(iii) to keep any books and records required by the Rules of the 

Exchange.

The Compliance Department, acting on behalf of 

the Compliance Director, will give notice of any fine imposed pursuant to this 

Rule VII-17 to each Participant or Authorized Trader subject thereto. The 

notice will specify (i) the violations of the Rules of the Exchange for which 

the fine is being imposed, (ii) the date of the violation for which the fine is 

being imposed and (iii) the amount of the fine. Within 20 Business Days of 
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serving the notice of fine, the Participant or Authorized Trader, as the case 

may be, must either pay the fine or file notice of an appeal pursuant to 

Rule VII-16. Unless timely notice of appeal is filed pursuant to Rule VII-16, 

the fine will become final upon the expiration of 20 Business Days after the 

notice of fine is served on the Participant or Authorized Trader, as the case 

may be.

The Exchange, in its sole discretion, may deduct 

the amount of any fine imposed pursuant to Rule VII-17(b) directly from the 

Participant’s Trading Account; provided, that the Exchange may not make 

such a deduction if the result would be to cause an Event of Default with 

respect to any Open Contract Positions then held in the Trading Account of 

such Participant.

The Exchange will set the amount of any fines 

imposed pursuant to this Rule VII-17, with the maximum fine for each 

violation not to exceed $5,000. Summary imposition of fines pursuant to this 

Rule VII-17 will not preclude the Exchange from bringing any other action 

against the Participant or Authorized Trader, as the case may be.

VII-18. Summary Suspensions and Other Summary Actions

Notwithstanding anything in the Rules of the 

Exchange to the contrary, the Compliance Director or the Compliance 

Director’s Designee, upon a good faith determination that there are 

substantial reasons to believe that such immediate action is necessary to 

protect the public or the best interests of the Exchange, may order that any 

party be denied access to the Trading System or the Exchange, or summarily 

limit, condition, restrict or qualify the Trading Privileges of a Participant or 

Authorized Trader, and may take other summary action against any 

Participant or Authorized Trader in accordance with the Rules of the 

Exchange; provided, however, that the Compliance Director or the 

Compliance Director’s Designee in issuing an order denying access, may 

permit such party to enter Orders solely for the purpose of liquidating the 

Open Contract Positions of such Participant while the applicable suspension, 

limitation, condition, restriction or qualification of access is in effect. 

Promptly after an order is issued pursuant to 

paragraph (a), the party shall be informed of the action taken, the reasons 

for the action, the effective date and the duration of the action. The party 

shall also be informed of his or her right to appeal the action under Rule VII16. Whenever practicable, the Compliance Department, acting on behalf of 

the Compliance Director, shall provide such notice prior to taking the action. 
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Unless timely notice of appeal is filed pursuant to 

Rule VII-16, the summary action will become final upon the expiration of 20 

Business Days after the notice of action is served on the respondent.

At the request of the Exchange or the 

Clearinghouse, a respondent against whom a summary action is brought 

pursuant to this Rule VII-18 must provide books and records over which the 

respondent has access or control and must furnish information to, or appear 

or testify before, the Exchange or the Clearinghouse in connection with the 

enforcement of any Rule of the Exchange or Rule of the Clearinghouse.

A respondent whose Trading Privileges are

suspended, limited, conditioned, restricted or qualified pursuant to this Rule 

VII-18 may apply for reinstatement by filing with the Compliance Department 

a written request stating the applicant’s reasons for seeking reinstatement. 

The Exchange will not consider a respondent’s request for reinstatement if 

the respondent (i) persists in the conduct which was the subject of the order 

denying access; (ii) owes any fines, fees, charges or costs to the Exchange, 

(iii) continues to fail to appear at disciplinary proceedings without good cause 

or (iv) 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 or her case supporting the reinstatement and the Compliance 

Department, acting on behalf of the Compliance Director 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, the 

Exchange may require any Participant or any Authorized Trader 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, or association with a Participant, 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 Appeals Panel’s initial order issued pursuant to Rule VII18(d) above. The Appeals Panel’s order may not be appealed.

Any decision to deny access pursuant to paragraph 

(a) shall not remain in effect for more than 60 days unless the Compliance 

Director or the Compliance Director’s Designee, upon further consideration 
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of the circumstances giving rise to the order denying access, issues a 

separate order denying access for an additional period of time, not to exceed 

60 days. The party must be notified thereof prior to issuance of the second 

order, unless prior notice is impracticable. Such notice must meet the 

standards provided in paragraph (b). At any time, a party subject to an 

action under this Rule VII-18, may petition the Compliance Director or the 

Compliance Director’s Designee to reconsider an access denial pursuant to 

this Rule based upon materially changed circumstances.

VII-19. Rights and Responsibilities after Suspension or Termination

When the Trading Privileges of a Participant are, or 

the association of an Authorized Trader with a Participant is, 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, enter 

Orders into the CX Direct System and receive Participant rates for fees, 

costs, and charges and deposit margin at Participant levels) will apply during 

the period of the suspension, except for the right of the Participant or 

Authorized Trader in question to assert claims against others as provided in

the Rules of the Exchange. Any such suspension will not relieve the 

Participant or Authorized Trader in question of its, his or her obligations 

under the Rules of the Exchange to perform any Contracts entered into 

before the suspension, or for any Exchange fees, costs, or charges incurred 

during the suspension. The Exchange may discipline a suspended 

Participant or Authorized Trader under this Chapter VII for any violation of a 

Rule of the Exchange or provision of Applicable Law committed by the 

Participant before, during or after the suspension.

When the Trading Privileges of a Participant are, or 

the association of an Authorized Trader with a Participant is, terminated, all 

of its rights and Trading Privileges will terminate, except for the right of the

Participant or Authorized Trader in question to assert claims against others, 

as provided in the Rules of the Exchange. A terminated Participant or 

Authorized Trader may only seek to reinstate its Trading Privileges by 

applying for Trading Privileges pursuant to Rule III-4. The Exchange will not 

consider the application of a terminated Participant or Authorized Trader if 

such Participant or Authorized Trader, as the case may be, continues to fail 

to appear at disciplinary proceedings without good cause or continues to 

impede the progress of disciplinary proceedings.

A suspended or terminated Participant or 

Authorized Trader remains subject to the Rules of the Exchange and the 

jurisdiction of the Exchange for acts and omissions prior to the suspension 

of termination, and must cooperate in any inquiry, investigation, disciplinary 

proceeding, appeal of disciplinary proceedings, summary suspension or 
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other summary action as if the suspended or terminated Participant or an 

Authorized Trader still had Trading Privileges or was still associated with a 

Participant, as the case may be.

VII-20. Notice to the Respondent, the Commission and the Public

The Exchange will provide written notice of 

disciplinary proceedings to the parties and the CFTC consistent with CFTC 

Regulations. Whenever the Exchange suspends, expels, fines or otherwise 

disciplines, or denies any Person access, to the Exchange, the Exchange 

will make the public disclosures required by CFTC Regulations.
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CHAPTER VIII

ARBITRATION

VIII-1. General

Except as otherwise provided in the Rules of the Exchange, Participants 

and Authorized Traders must arbitrate all controversies arising in connection with their 

Exchange business between or among themselves. Notwithstanding the foregoing, this 

Rule VIII-1 does not require arbitration of claims alleging employment discrimination 

(including sexual harassment) in violation of Applicable Law. 

VIII-2. Forum

NFA will conduct any and all arbitrations of a type described in Rule VIII-1.

VIII-3. Applicable Arbitration Rules

Any and all arbitrations of a type described in Rule VIII-1 above will be 

conducted pursuant to NFA’s Member Arbitration Rules.

VIII-4. Penalties

Any failure on the part of any Participant or 

Authorized Trader to arbitrate a case subject to arbitration, or the 

commencement by any such Person of a suit in any court prior to arbitrating 

a case subject to arbitration, violates the Rules of the Exchange and subjects 

such Participant or Authorized Trader to disciplinary proceedings pursuant 

to Chapter VII.

The Exchange may summarily suspend, pursuant 

to Chapter VII, a Participant or Authorized Trader that fails to satisfy an 

arbitration award rendered in any arbitration pursuant to this Chapter VIII.
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CHAPTER IX

CONTRACTS

IX-1. Contract Specifications

Each Contract will meet such specifications, and all trading in such Contract 

will be subject to such procedures and requirements, as set forth in the rules governing 

such Contract. 

IX-2. Contract Modifications

The specifications for, and the procedures and requirements for trading, any 

Contract may not be modified in any respect without the prior approval of the Exchange.
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CHAPTER X

CLEARING

X-1. Rules of Clearinghouse

The clearing services provided by the Clearinghouse with respect to any 

Contract, and the rights and obligations of purchasers and sellers under cleared Contracts 

(including, without limitation, rights and obligations in respect of clearing and settlement, 

variation margin payments and performance at maturity, and in the case of Options on 

Futures, upon exercise thereof), shall be governed by the Rules of Clearinghouse.