©2020, TeraExchange, LLC. All rights reserved.

TeraExchange, LLC 

Swap Execution Facility Rulebook

Version 1.17

BY BECOMING A PARTICIPANT, OR BY ACCESSING TERAEXCHANGE IN ANY 

WAY, AND WITHOUT ANY NEED FOR ANY FURTHER ACTION, UNDERTAKING 

OR AGREEMENT, A PERSON AGREES (I) TO BE BOUND BY AND COMPLY WITH 

TERA RULES AND OBLIGATIONS, AND INSTRUMENT SPECIFICATIONS, IN EACH

CASE TO THE EXTENT APPLICABLE TO IT, AND APPLICABLE LAW, (II) TO 

BECOME SUBJECT TO THE JURISDICTION OF TERAEXCHANGE WITH RESPECT 

TO ANY AND ALL MATTERS ARISING FROM, RELATED TO, OR IN CONNECTION 

WITH, THE STATUS, ACTIONS, OR OMISSIONS OF SUCH PERSON RELATED TO 

TERA RULES, AND (III) TO ASSIST TERAEXCHANGE IN COMPLYING WITH ITS 

LEGAL AND REGULATORY OBLIGATIONS, (IV) TO COOPERATE WITH 

TERAEXCHANGE AND THE CFTC IN ANY INQUIRY, INVESTIGATION, AUDIT, 

EXAMINATION OR PROCEEDING, AND (V) TO AUTHORIZE TERAEXCHANGE TO 

PROVIDE INFORMATION REGARDING IT TO THE CFTC OR ANY SELFREGULATORY ORGANIZATION.

November 2020
- 2 -

TeraExchange, LLC..................................................................................................................1

Swap Execution Facility Rulebook...........................................................................................1

CHAPTER 1 DEFINITIONS AND RULES OF CONSTRUCTION ..................................6

Rule 101 Definitions...........................................................................................................6

Rule 102 Rules of Construction.........................................................................................14

CHAPTER 2 SEF GOVERNANCE .................................................................................14

Rule 201 Board.................................................................................................................14

Rule 202 Regulatory Oversight Committee .......................................................................15

Rule 203 Additional Committees and Panels.....................................................................16

Rule 204 Power of the Board to Review Decisions............................................................16

Rule 205 Eligibility of Directors.......................................................................................16

Rule 206 Officers..............................................................................................................18

Rule 207 Chief Compliance Officer ..................................................................................18

Rule 208 Conflicts of Interest............................................................................................20

Rule 209 Material Non-Public Information .......................................................................22

Rule 210 Emergency Rules...............................................................................................23

Rule 211 Maintenance of Books and Records ...................................................................24

Rule 212 Information-Sharing Agreements.......................................................................25

Rule 213 [Reserved]..........................................................................................................25

Rule 214 Prohibited Use of Data Collected for Regulatory Purposes.................................25

CHAPTER 3 PARTICIPANTS ........................................................................................25

Rule 301 Eligibility Criteria for Becoming a Participant....................................................25

Rule 302 Authorized Traders............................................................................................27

Rule 303 Participant Application Process..........................................................................28

Rule 304 Limitations on Trading Privileges ......................................................................29

Rule 305 Assessments and Fees........................................................................................29

Rule 306 Authorized Representatives................................................................................30

Rule 307 Recording of Communications...........................................................................30

Rule 308 Notices to Participants........................................................................................30

Rule 309 Communications between Tera and Participants.................................................30

Rule 310 Application of Tera Rules and Jurisdiction.........................................................31

Rule 311 Compliance with the Commodity Exchange Act ................................................32

Rule 312 Description of Participants’ Status......................................................................32

Rule 313 Designated Categories of Participants ................................................................32

Rule 314 Termination of Participants................................................................................32

Rule 315 Withdrawal of Participants.................................................................................32

Rule 316 Access ...............................................................................................................33

CHAPTER 4 OBLIGATIONS OF PARTICIPANTS .......................................................34

Rule 401 Information to be Provided by Participants.........................................................34

Rule 402 Duties and Responsibilities of Participants.........................................................35
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Rule 403 Representations and Required Disclosures to Tera .............................................36

Rule 404 Inspections by Tera ............................................................................................37

Rule 405 Mandatory Pre-Trade Credit Checks..................................................................38

Rule 406 Minimum Financial and Related Reporting Requirements..................................39

Rule 407 Confidentiality of Financial and Other Information............................................39

Rule 408 Authority to Impose Restrictions........................................................................39

Rule 409 Participants or Executing Firms Accessing Tera on Behalf Others......................39

Rule 410 Verification of ECP Status.................................................................................40

Rule 411 Disclosure Requirements....................................................................................40

Rule 412 Position Liquidation Upon Default.....................................................................40

Rule 413 Responsibility for Mandatory Trading................................................................40

CHAPTER 5 TRADING PRACTICES AND BUSINESS CONDUCT ............................40

Rule 501 Scope .................................................................................................................40

Rule 502 Procedures.........................................................................................................41

Rule 503 Business Days and Trading Hours......................................................................41

Rule 504 Supervision........................................................................................................41

Rule 505 Mishandling of Customer Orders .......................................................................42

Rule 506 Trading on the Order Book.................................................................................42

Rule 507 Price-Time Priority in Order Book .....................................................................42

Rule 508 Electronic and Voice-Assisted Order Entry ........................................................42

Rule 509 Position Accountability......................................................................................44

Rule 510 Order Types.......................................................................................................45

Rule 511 Bunched Orders and Orders Eligible for Post-Execution Allocation ...................45

Rule 512 Orders Entered Prior to SEF Opening.................................................................46

Rule 513 Identification of Authorized Traders...................................................................46

Rule 514 Block Trades......................................................................................................46

Rule 515 Risk Controls.....................................................................................................48

Rule 516 Use of Trading Privileges...................................................................................48

Rule 517 Priority of Customers’ Orders............................................................................49

Rule 518 Adherence to Law..............................................................................................49

Rule 519 Rule Violations..................................................................................................49

Rule 520 Fraudulent Acts Prohibited.................................................................................50

Rule 521 Fictitious, Wash or Non-Competitive Transactions Prohibited............................50

Rule 522 Market Disruption Prohibited.............................................................................50

Rule 523 Disruptive Trading Practices Prohibited .............................................................50

Rule 524 Market Manipulation Prohibited.........................................................................51

Rule 525 Misstatements Prohibited ...................................................................................51

Rule 526 Acts Detrimental to Welfare of Tera Prohibited..................................................52

Rule 527 Misuse of Tera Prohibited ..................................................................................52

Rule 528 Withholding Orders Prohibited...........................................................................52

Rule 529 Pre-discussed or Cross Trades............................................................................52

Rule 530 Disclosing Orders Prohibited..............................................................................53

Rule 531 Arranged Transactions.......................................................................................53

Rule 532 Voice-Assisted and Electronic Request for Quote Trading .................................54

Rule 533 Disputes.............................................................................................................56
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Rule 534 Trade Cancellation and Price Adjustment...........................................................56

Rule 535 Trade Review, Correction and Notification ........................................................57

Rule 536 Cleared Error Trade Correction..........................................................................58

Rule 537 Post Trade Anonymity .......................................................................................61

CHAPTER 6 CLEARING................................................................................................62

Rule 601 Mandatory Clearing ...........................................................................................62

Rule 602 Clearing Accounts..............................................................................................62

Rule 603 Clearing Firm Guarantee....................................................................................62

Rule 604 Clearing House Rules.........................................................................................63

Rule 605 Other Clearing Organizations.............................................................................63

Rule 606 Clearing Fees.....................................................................................................63

Rule 607 Clearing and Finality..........................................................................................63

Rule 608 Uncleared Transactions......................................................................................64

CHAPTER 7 RECORDKEEPING AND REPORTING ...................................................65

Rule 701 Records to be Maintained by Clearing Firms......................................................65

Rule 702 Customer Type Indicator (CTI) Codes ...............................................................66

Rule 703 Records of Trading Activity on Tera and Related Transactions..........................66

Rule 704 Reporting to SDR...............................................................................................66

Rule 705 Enforceability ....................................................................................................71

CHAPTER 8 DISCIPLINARY RULES ...........................................................................72

Rule 801 General ..............................................................................................................72

Rule 802 Inquiries and Investigations................................................................................73

Rule 803 Reports of Investigations....................................................................................74

Rule 804 Opportunity to Respond to Investigatory Report.................................................75

Rule 805 Review of Investigative Reports.........................................................................75

Rule 806 Warning Letters.................................................................................................77

Rule 807 Notice of Charges ..............................................................................................77

Rule 808 Service of Notice of Charges..............................................................................77

Rule 809 Answer to Notice of Charges..............................................................................78

Rule 810 Admission or Failure to Deny Charges...............................................................78

Rule 811 Denial of Charges and Right to a Hearing ..........................................................79

Rule 812 Settlements ........................................................................................................79

Rule 813 Hearing Panel ....................................................................................................80

Rule 814 Convening Hearings of Disciplinary Proceedings...............................................81

Rule 815 Respondent Review of Evidence ........................................................................81

Rule 816 Conducting Hearings of Disciplinary Proceedings..............................................82

Rule 817 Decision of Hearing Panel..................................................................................84

Rule 818 Sanctions ...........................................................................................................85

Rule 819 Costs..................................................................................................................86

Rule 820 Right to Appeal..................................................................................................86

Rule 821 Summary Imposition of Fines............................................................................89
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Rule 822 Summary Suspensions and Other Summary Actions ..........................................90

Rule 823 Rights and Responsibilities after Suspension or Termination..............................90

Rule 824 Notice to the Respondent and the Public ............................................................91

CHAPTER 9 MISCELLANEOUS ...................................................................................91

Rule 901 Anti-Money Laundering and Anti-Terrorism......................................................91

Rule 902 Gifts and Gratuities............................................................................................92

Rule 903 Market Data .......................................................................................................92

Rule 904 Extension or Waiver of Tera Rules.....................................................................93

Rule 905 Governing Law, Jurisdiction and Dispute Resolution .........................................93

Rule 906 LIMITATION OF LIABILITY, NO WARRANTIES ........................................94

Rule 907 Effect of Amendment, Repeal, or New Rule.......................................................97

CHAPTER 10 INSTRUMENT SPECIFICATIONS...........................................................97

Rule 1001 Instruments Listed for Trading...........................................................................97

Annex A ISDA Dodd Frank Act-Swap Transaction Reporting Party Requirements

Annex B Product Terms and Conditions
©2020, TeraExchange, LLC. All rights reserved.

CHAPTER 1 DEFINITIONS AND RULES OF CONSTRUCTION

Rule 101 Definitions

When used in the Tera Rules the following terms shall have the respective meanings as 

follows:

“Account” means, with respect to each Participant, any account established and 

maintained on Tera by such Participant or by or on behalf of an Account Holder through 

which Participant will trade Instruments.

“Account Holder” means the beneficial owner of an Account who uses a Participant as 

agent to transact on Tera, and shall include the meaning of ‘Customer’ as defined below 

and in CFTC Rule 1.3(k) as well as all other Persons who are counterparties to swaps 

executed on TeraExchange. For the avoidance of doubt, an Account Holder is not a 

Participant on Tera.

“Account Series Designation” means an identifier assigned by a Participant to a group of 

accounts, which facilitates their treatment as one account for purposes of a Bunched Order.

“Affected Person” means a SEF applicant whose participant application is declined or is 

conditioned or a Person whose status as a Participant is terminated as set forth in Rule 

303(e).

“Affiliate” means, with respect to any Person, any Person who, directly or indirectly, 

Controls, is Controlled by, or is under common Control with, such other Person.

“Appeals Panel” means a panel appointed by the Chief Compliance Officer pursuant to 

Rule 820.

“Applicable Law” means, with respect to any Person, any statute, law, regulation, rule or 

ordinance of any governmental or self-regulatory authority applicable to such Person, 

including the CEA and CFTC Regulations.

“Authorized Representative” means any Person who is authorized by a Participant to 

represent the Participant in SEF matters pursuant to Rule 306.

“Authorized Trader” means any natural person who is appointed, employed or authorized 

by a Participant to place Orders on Tera and is assigned a valid Trader ID.

“Block Trade” means a publicly reportable swap transaction that:

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

(2) Occurs away from the TeraExchange platform and is executed pursuant to the Tera 

Rules and procedures;
- 7 -

(3) Has a notional or principal amount at or above the appropriate minimum block size 

applicable to such swap; and

(4) Is reported subject to the Tera Rules and procedures and Commission Rule 43, 

including the appropriate time delay requirements of Commission Rule 43.5 and 

Tera Rule 704.

“Board” means the Board of Directors of Tera constituted from time to time in accordance 

with the Operating Agreement.

“Bunched Orders” means a single Order placed pursuant to Rule 511.

“Business Day” means the twenty-four-hour day, on all days except Saturdays, Sundays 

and legal holidays.

“By-Laws” means, with respect to any Person that is not an individual, the By-Laws or 

Operating Agreement of such Person, and, if no other Person is specified, the By-Laws or 

Operating Agreement of Tera.

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

“CFTC” means the Commodity Futures Trading Commission or any successor regulatory 

body.

“CFTC Regulations” means the rules and regulations promulgated by the CFTC, as 

amended.

“Chief Compliance Officer” means the individual appointed by the Board as Tera’s chief 

compliance officer in accordance with the Operating Agreement, with the duties and 

responsibilities as may be prescribed by the Board from time to time as set forth in Rule 

207.

“Clearable Instrument” means an Instrument that is subject to the mandatory clearing 

requirement of Section 2(h)(1)(A) of the CEA or any Instrument that is accepted by a 

Derivatives Clearing Organization for clearing and which Participants have elected to 

submit for clearing.

“Clearing Firm” means a member or participant of a Clearing House that is authorized by 

the Clearing House to clear trades in any or all Instruments for a Participant. For the 

avoidance of doubt, a Clearing Firm need not be a Participant on Tera.

“Clearing House” means a CFTC-registered Derivatives Clearing Organization or a 

derivatives clearing organization that the CFTC has determined is exempt from 

registration.

“Clearing House Rules” means the Certificate of Incorporation, the By-Laws and any 

rule, interpretation, stated policy, or Instrument Specification corresponding to any of the 
- 8 -

foregoing, in each case as adopted or amended from time to time by the Clearing House 

relating to any or all Instruments.

“Closing Period” means the period defined by Tera as such in a Notice to Participants.

“Compliance Department” means all SEF Officials, agents, and service providers of Tera 

that assist Tera with the implementation, surveillance and enforcement of the Tera Rules 

and other Obligations.

“Control” means the possession, direct or indirect, of the power to direct or cause the 

direction of the management and policies of a Person, whether through the ownership of 

securities, by Instrument, or otherwise. The terms “controlling” or “controlled” shall have 

meanings correlative to the foregoing.

“CTI Code” means a Customer Type Indicator Code as described in Rule 702.

“Customer”, as defined in CFTC Rule 1.3(k), means any Person who uses a futures 

commission merchant, introducing broker, commodity trading advisor, or commodity pool 

operator as an agent in connection with trading on TeraExchange.

“Derivatives Clearing Organization” or “DCO” has the meaning attributed to such term 

by Section la(15) of the CEA.

“Designated Contract Market” or “DCM” means a board of trade designated as a 

contract market by the CFTC which is in compliance with the rules of the Commission and 

the core principles specified in Section 5 of the CEA. 

“Director” means any member of the Board.

“Disciplinary Panel” means one or more Review Panels and one or more Hearing Panels 

collectively which are responsible for conducting hearings, rendering decisions and 

imposing sanctions with respect to disciplinary matters.

“ECP” means an eligible contract participant as defined in section 1a(18) of the CEA.

“Eligibility Criteria” means the criteria set forth in Rule 301(a).

“Emergency” has the meaning set forth in CTFC Regulation 40.1(h).

“Emergency Rules” has the meaning set forth in Rule 210(a).

“End of Trading” means such time as Tera may prescribe in a Notice to Participants or 

other Writing. The End of Trading is the time as of which such actions as are specified in 

the Tera Rules or the relevant Instrument Specifications as taking place at the end of a 

Business Day, will occur.

“Exchange User License Agreement” or “EULA” means the agreement executed by 

Participant and Tera that governs Participant’s access to and use of Tera.
- 9 -

“Executing Firm” means any entity that is a Participant trading on Tera for its own 

account or on behalf of an Account Holder or Customer. An Executing Firm shall include, 

but not be limited to Persons registered as an Introducing Broker by the CFTC. 

“Financial Entity” has the meaning set forth in CEA Section 2(h)(7)(C).

“Floor Broker” means a Participant of the type described in Rule 313.

“Floor Trader” means a Participant of the type described in Rule 313.

“Foreign Exchange Cash Settled Forward” or “FX CSF” means a contract in which 

two counterparties agree on a currency pair exchange rate for a given notional amount on 

a date in the future.

“Foreign Exchange Non-Deliverable Forward” or “FX NDF” means a FX CSF in 

which one of the currencies in the currency pair cannot legally be delivered.

“Futures Commission Merchant” or “FCM” has the meaning set forth in Section 1a(28) 

of the CEA.

“Governmental Agency” means any governmental entity, body or agency of any 

government (including the United States, or a foreign government).

“Hearing Panel” means a panel responsible for adjudicating disciplinary cases pursuant 

to a Notice of Charges authorized by a Review Panel.

“Independent Software Vendor” or “ISV” means a Person that makes available to 

Participants and Authorized Traders a system or platform offering smart order routing, 

aggregation services or other front-end applications but which does not provide the ability 

to effect transactions on such system or platform.

“Instrument” or “Tera Instrument” means any instrument that is a swap as defined in 

Section la(47) of the CEA, and any other financial contract or instrument, which is listed 

for trading on Tera or subject to the Tera Rules and not readily susceptible to manipulation

in compliance with CFTC Regulation 37.300.

“Instrument Specification” means, with respect to any Instrument, the rules or other 

trading protocols containing specifications for such Instrument, as adopted, amended, 

supplemented or otherwise modified from time to time by Tera.

“Interest Rate Swap” means an Instrument in which two parties agree to exchange 

payments on a periodic basis based on interest rate calculations.

“Interested Person” has the meaning attributed to such term in Rule 208(a).

“Introducing Broker” means persons within the meaning set forth in Section 1a(31) of 

the CEA and within the definition of ‘foreign broker’ set forth in 17 C.F.R. 1.3(xx).
- 10 -

“ISDA” means the International Swaps Derivatives Association, Inc. 

“Legal Entity Identifier” has the meaning set forth in Part 45 of the CFTC Regulations.

“Limit Order” means an Order in which the Participant specifies a minimum sale price or 

maximum purchase price.

“Major Swap Participant” has the meaning set forth in Section la(33) of the CEA.

“Market Maker” means a Participant of the type described in Rule 313.

“Market Order” means an Order to buy or sell an Instrument at whatever price is 

obtainable at the time it is entered in Tera.

“Member”, as defined in CEA Section 1(a)(34), means any Person having trading 

privileges on TeraExchange.

“No-Bust Range” means the price of an Instrument that is in the range specified by Tera 

from time to time in a Notice to Participants, as described in Rule 515(c).

“Notice of Charges” means a notice sent by the Compliance Department pursuant to Rule 

807

“Notice to Participants” means a communication sent by or on behalf of Tera to all 

Participants as described in Rule 308.

“Obligation” means each Tera Rule, order or procedure issued by Tera, including any 

Notice to Participants, and any other requirement implemented by Tera under the Tera 

Rules or pursuant to the EULA.

“Officer” has the meaning attributed to such term in Rule 206.

“Operating Agreement” means the Limited Liability Company Agreement of Tera.

“Order” means the entry of a proposed Trade into the Order Book, or a response to a 

Request for Quote.

“Order Book” means, in accordance with CFTC Regulation 37.3(a)(3), the trading system 

or platform operated by Tera in which all market participants have the ability to enter 

multiple bids and offers, observe or receive bids and offers entered by other market 

participants, and transact on such bids and offers.

“Participant” means any Person that has been granted access to TeraExchange and 

maintains Trading Privileges under its Rules and shall include the meaning of “Member” 

as defined above and under the CEA. A reference to Participant includes any Person who 

is either employed by or is an agent of such Participant (including but not limited to an 

Authorized Trader or Supervised Person) or any Person who accesses or utilizes 

TeraExchange pursuant to a Trader ID linked to a Participant. For the avoidance of doubt
- 11 -

and subject to Applicable Law, a Participant may act on behalf of itself in its own Account 

or on behalf of an Account Holder or Customer pursuant to a written delegation of trading 

authority. An ISV cannot be a Participant.

“Participant Documentation” means such application forms and agreements including 

without limitation the EULA (together with any applicable schedules, exhibits or 

appendices thereto required by Tera) in form and substance acceptable to Tera, that are 

required to be executed and delivered to Tera before a Person may access Tera.

“Participant ID” means a unique identifier assigned to a Participant by Tera for access to 

Tera.

“Permitted Transaction” means any transaction involving an Instrument that is not a 

Required Transaction.

“Person” means any natural person, association, partnership, limited liability company, 

joint venture, trust, corporation or similar entity.

“President” means the President of TeraExchange, or one duly authorized to act with the 

authority of the President.

“Proprietary Account” has the meaning ascribed to it by CFTC Regulation 1.3(y).

“Proprietary Data” means, with respect to any Person, any information that separately

discloses business transactions, market positions, or trade secrets of such Person.

“Public Director” means a Person that meets the qualifications described in Rule 205(h).

“Records” shall have the meaning set forth in Rule 701(a).

“Reference Price” means a floating price series (including derivatives contract prices and 

cash market prices or price indices) used by the parties to a swap or swaption to determine 

payments made, exchanged or accrued under the terms of a swap contract.

“Regulatory Oversight Committee” means the committee of the Board constituted in 

accordance with Rule 202.

“Reporting Counterparty” means the Participant that is designated as such pursuant to 

Rule 704. The general hierarchy for determining the Reporting Counterparty is set forth 

as: 

• If one party is a Swap Dealer, the Swap Dealer is the Reporting Counterparty. 

• If both parties are a Swap Dealer, the selling Swap Dealer is the Reporting 

Counterparty. 

• If one party is a Major Swap Participant, the Major Swap Participant is the 

Reporting Counterparty. 
- 12 -

• If both parties are a Major Swap Participant, the selling Major Swap Participant is 

the Reporting Counterparty. 

• If neither party is a Swap Dealer or Major Swap Participant and only one party is a 

financial entity (as defined in CEA Section 2(h)(7)(C)), the financial entity is the 

Reporting Counterparty. 

• If neither party is a Swap Dealer, Major Swap Participant nor a financial entity and 

one party is a US Person, the US Person will be the Reporting Counterparty. 

• If neither party is a Swap Dealer, Major Swap Participant, a financial entity nor a 

US Person, the parties will agree which party will be the Reporting Counterparty.

“Request for Quote” or “RFQ” means an electronic or voice message disseminated on 

or by Tera for the purposes of soliciting bids or offers for a specific Swap pursuant to Rule 

532.

“Required Swap Creation Data” means all primary economic terms data for a swap in 

the swap asset class in question, and all confirmation data for the swap, as defined in CFTC 

Regulation 45 and detailed Appendix 1 to Part 45.

“Required Transaction” means any transaction involving an Instrument that is subject to 

the trade execution requirement of Section 2(h)(8) of the CEA.

“Review Panel” means a panel responsible for determining whether a reasonable basis 

exists for finding a violation of Tera Rules, and for authorizing the issuance of notices of 

chargers against persons alleged to have committed violations if the Review Panel believes 

that the matter should be adjudicated.

“Rules” means, with respect to any Person, the rules of such Person and the interpretations, 

resolutions, orders, directives and procedures of the Person thereunder as in effect from 

time to time, and if no other Person is specified, means the Rules of Tera and the 

interpretations, resolutions, orders and directives and procedures of Tera thereunder as in 

effect from time to time.

“SDR” means a Swap Data Repository, as defined in Section 1 a(48) of the CEA.

“SEC” means the U.S. Securities and Exchange Commission.

“Self-Regulatory Organization” shall, unless otherwise provided, have the meaning 

attributed to such term in CFTC Regulation 1.33(ee) and, in addition, shall include a 

Derivatives Clearing Organization, and a registered futures association. Tera is a selfregulatory organization.

“SEF” means a Swap Execution Facility as defined in Section 1a(50) of the CEA.

“SEF Action” and “SEF Actions” have the meanings attributed to such terms in Rule 

208(a).
- 13 -

“SEF Activity” means business for which a Participant is subject to the Tera Rules, which 

is purportedly conducted subject to the Tera Rules, or which should have been conducted 

subject to the Tera Rules.

“SEF Official” means any Director or Officer of, or individual employed directly by, Tera, 

a regulatory services provider or any individual rendering similar services to Tera under an 

administrative or similar agreement.

“SEF Proceeding” has the meaning attributed to such term in Rule 208(a).

“Supervised Persons” means any directors, officers, employees or agents (including any 

Authorized Traders) of any Participant.

“Swap Dealer” has the meaning set form in Section 1a(49) of the CEA.

“TeraExchange” or “Tera” means TeraExchange, LLC, a Delaware limited liability 

company.

“Trade” or “Transaction” means the execution of any Order made on Tera or subject to 

Tera Rules.

“Trader ID” means a unique identifier issued to each Authorized Trader which enables 

Tera to identify the individual entering Orders into the Order Book.

“Trading Hours” means, for any Business Day, the hours during which Orders may be 

placed on TeraExchange, as shall be published by Tera in a Notice to Participants from 

time to time.

“Trading Privileges” means the rights granted to a Participant to transmit Orders and/or 

otherwise effect Transactions whether directly or indirectly, including through an ISV, on 

or pursuant to the Rules of Tera, either on its own behalf or as an Executing Firm on behalf 

of an Account Holder or Customer.

“TeraCheck” means the pre-trade credit checking facility maintained by Tera and utilized 

by Participants pursuant to Rule 405.

“Tera System” means the electronic trading facility and related operations platform, 

including but not limited to, voice assistance, for the trading of Tera Instruments.

“Unique Product Identifier” means the unique product identifier and product 

classification system determined by the CFTC under CFTC Regulation 45.7 for identifying 

each swap subject to CFTC jurisdiction in all recordkeeping and swap data reporting. 

“Unique Swap Identifier” shall have the meaning ascribed to it by CFTC Regulation 45.5, 

or any successor regulation thereto.

“Written” or “Writing” means any mode of representing or reproducing words or data 

in a visible form, including via electronic transmissions.
- 14 -

Rule 102 Rules of Construction

The following rules of construction shall apply to the Tera Rules:

(a) The headings in the Tera Rules are for convenience only and do not affect 

the construction of the Tera Rules;

(b) All references to time in the Tera Rules are to Wall Township, New Jersey,

except where expressly provided otherwise;

(c) In the Tera Rules, words denoting a singular number include the plural 

number where the context permits and vice versa;

(d) Where the context permits or requires, any pronoun shall include the 

corresponding masculine, feminine and neuter forms; and

(e) References in the Tera Rules to statutory provisions include those 

provisions as amended, and any rules or regulations promulgated 

thereunder.

CHAPTER 2 SEF GOVERNANCE

Rule 201 Board

(a) The Board shall manage the business and affairs of Tera in accordance with 

the Operating Agreement. The Board 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 or special committees of the Board or 

any panel of the Officers.

(b) The Board may act only by the decision of an absolute majority in number 

of the members of the Board, either by vote at a meeting or by written 

consent without a meeting.

(c) Each Director shall be appointed in accordance with the Operating 

Agreement and the procedures included therein and shall serve until his or 

her successor is duly appointed, or until his or her earlier resignation or 

removal, with or without cause.

(d) The members of the Board shall be of sufficiently good repute and, where 

applicable, have sufficient expertise in financial services.

(e) At all times, at least 25% of Directors, and no fewer than two, shall be Public 

Directors meeting the criteria of Rule 205(h) below.

(f) Within thirty days following the election of Directors to the Board Tera 

shall file with the CFTC a current list of its governing Board members, the 

membership interests they represent, and a description of how their 
- 15 -

qualifications meet the requirements of regulation 1.64(b), including the fair 

representation of the diversity of membership interests at TeraExchange.

Rule 202 Regulatory Oversight Committee

(a) The Regulatory Oversight Committee of the Board shall consist of two 

Public Directors appointed by the Board. Each member of the Regulatory

Oversight Committee shall serve until the due appointment of his or her 

successor, or until his or her earlier resignation or removal, with or without 

cause, as a member of the Regulatory Oversight Committee or as a Director. 

A member of the Regulatory Oversight Committee may serve for multiple 

terms. The Regulatory Oversight Committee shall report to the Board

(b) The Regulatory Oversight Committee shall oversee Tera’s regulatory 

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

Board as will, in its judgment, best promote the interests of Tera. The 

Regulatory Oversight Committee shall also have such other powers and 

perform such other duties as set forth in the Tera Rules, the Operating 

Agreement and as the Board may delegate to it from time to time.

(c) Without limiting the generality of the foregoing, the Regulatory Oversight 

Committee shall have authority to:

Monitor the compliance program of Tera for sufficiency and 

effectiveness;

Oversee all facets of the compliance program, including trade 

practice and market surveillance, audits, examinations conducted by 

third parties, and other regulatory responsibilities with respect to 

Participants, (including ensuring compliance with any financial 

integrity, financial reporting, sales practice, recordkeeping and other 

requirements);

Review the size and allocation of the regulatory budget and 

resources and the number, hiring and termination, and compensation 

of compliance personnel;

Recommend changes that would ensure fair, vigorous, and effective 

compliance; and

Review compliance proposals and advise the Board as to whether 

and how such changes may impact compliance.

(d) The Regulatory Oversight Committee shall oversee the regulatory program 

of Tera on behalf of the Board. The Board shall delegate sufficient 

authority, dedicate sufficient resources, and allow sufficient time for the 

Regulatory Oversight Committee to fulfill its mandate.
- 16 -

Rule 203 Additional Committees and Panels

(a) The Board may create such additional standing committees of the Board as 

it may from time to time deem necessary or advisable.

(b) In addition to the standing committees, the Board may from time to time 

constitute and appoint, by rule or resolution, special committees of the 

Board and designate their composition, responsibilities and powers.

(c) Tera may create additional committees of Tera, 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, Supervised Persons of 

Participants or such other individuals as may be qualified to serve on such 

committee.

Rule 204 Power of the Board to Review Decisions

The Board 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 or special committees 

of the Board.

Rule 205 Eligibility of Directors

(a) A Director must meet the qualifications set forth from time to time in the 

Operating Agreement.

(b) An individual may not serve as a Director or serve on any oversight, 

disciplinary or arbitration committee established by the Board or a 

Disciplinary Panel or an Appeals Panel if the individual:

Within the prior three (3) years has been found, by a final decision 

in any action or proceeding brought in a court of competent 

jurisdiction, the CFTC or any Self-Regulatory Organization, to have 

committed a disciplinary offense;

Within the prior three (3) years has entered into a settlement 

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

findings, any of the acts charged, included a disciplinary offense;

Has been suspended or expelled from membership in a SelfRegulatory Organization, is serving any sentence or probation, or 

owes any portion of a fine or penalty related to either:

(1) A finding of a disciplinary offense by a final decision in any 

action or proceeding brought in a court of competent 

jurisdiction, the CFTC, or any Self-Regulatory 

Organization; or
- 17 -

(2) A settlement agreement in which any of the findings or, in 

the absence of such findings, any of the acts charged 

included a disciplinary offense.

Is currently subject to an agreement with the CFTC or SelfRegulatory Organization not to apply for registration with the CFTC 

or for membership in the Self-Regulatory Organization;

Is currently, or within the past three (3) years has been, subject to a 

revocation or suspension of registration by the CFTC;

Has been convicted of a felony listed in Section 8a(2)(D)(ii) through 

(iv) of the CEA; or

Is currently subject to a denial, suspension or disqualification from 

serving on a disciplinary committee, arbitration panel or governing 

board of any Self-Regulatory Organization.

(c) Any Director, member of a committee established by the Board or any 

member of a Disciplinary Panel, Appeals Panel, any individual nominated 

to serve in any such role, or any individual authorized by the Regulatory 

Oversight Committee to take summary action shall immediately notify the 

President if such individual meets one or more of the criteria in Rule 205(b).

(d) Tera will submit to the CFTC a schedule listing all those rule violations 

which constituted disciplinary offenses by persons serving on any 

disciplinary committees, arbitration panels, oversight panels or governing 

boards and to the extent necessary to reflect revisions will submit an 

amended schedule within thirty days of the end of each calendar year. Tera 

will maintain and keep current the schedule of rule violations and will 

maintain a publicly posting of the schedule on the TeraExchange web site 

in a fashion designed to provide notice to members and otherwise ensure its 

availability to the general public.

(e) Tera will, within thirty days of finding by final decision that a person has 

committed a disciplinary offense which subjects such person to disciplinary 

action and renders such person ineligible to serve on any disciplinary

committees, arbitration panels, oversight panels or governing boards, 

provide written notice to such person, and concurrently to the CFTC

Division of Market Oversight. Such notice will state the length of 

ineligibility and include all information required to comply with the form, 

content and delivery of notice requirements of Regulation 9.11.

(f) Tera will submit to the CFTC within thirty days of the end of each calendar 

year a certified list of any persons who have been removed from any 

disciplinary committees, arbitration panels, oversight panels or governing 

board pursuant to this Rule and the requirements of Regulation 1.63 during 

the prior year.
- 18 -

(g) For purposes of this Rule, the terms “disciplinary offense,” “final decision,” 

and “settlement agreement” have the meanings set forth in CFTC 

Regulation 1.63(a).

(h) To qualify as a Public Director, a Director must be found, by the Board on 

the record, to have no material relationship with Tera or any of its Affiliates. 

A “material relationship” is one that reasonably could affect the 

independent judgment or decision making of such individual as a Public 

Director. In addition, an individual shall not be considered a “Public 

Director” if any of the following circumstances exists:

Such Director is an officer or an employee of Tera, or an officer or 

an employee of an Affiliate of Tera;

Such Director is a Participant, or a director, an officer or an 

employee of a Participant; or

Such Director, or an entity with which the Director is a partner, an 

officer, or a director, receives more than $100,000 in combined 

annual payments for legal, accounting, or consulting services from 

Tera or any Affiliate of Tera. Compensation for services as a 

director of Tera or as a director of an Affiliate of Tera does not count 

toward the $100,000 payment limit, nor does deferred compensation 

for services rendered prior to becoming a Director of Tera, so long 

as such compensation is in no way contingent, conditioned or 

revocable.

(i) Any of the relationships set forth in sub-paragraphs (e)(i) through (iii) of 

this Rule apply to the “immediate family” of such Director, i.e., spouse, 

parents, children and siblings.

(j) A Public Director may also serve as a director of an Affiliate of Tera if he 

or she otherwise meets the requirements in paragraphs (e) and (f) of this 

Rule.

Rule 206 Officers

The Board shall appoint a President, a Chief Compliance Officer, one or more vice 

presidents, a secretary, a treasurer, and such other officers of Tera (all of the foregoing, 

collectively, the “Officers”) as it may deem necessary or appropriate from time to time, in 

accordance with the Operating Agreement. The Officers shall have such powers and duties 

in the management of Tera as the Board may prescribe from time to time in accordance 

with the Operating Agreement. Each Director and Officer is entitled to indemnification 

pursuant to the Operating Agreement with respect to matters relating to Tera.

Rule 207 Chief Compliance Officer
- 19 -

(a) The Chief Compliance Officer shall report to the Board of Tera. A vote of 

the majority of the Board is required to approve the compensation of the 

Chief Compliance Officer, as well as to remove the Chief Compliance 

Officer. Tera shall notify the CFTC of the appointment or removal of the 

Chief Compliance Officer within two Business Days of such event.

(b) The individual designated to serve as Chief Compliance Officer shall have 

the background and skills appropriate for fulfilling the responsibilities of 

the position. No individual disqualified from registration pursuant to 

Sections 8a(2) or 8a(3) of the CEA may serve as a Chief Compliance 

Officer.

(c) The Board shall meet with the Chief Compliance Officer at least annually. 

The Chief Compliance Officer shall also meet with the Regulatory 

Oversight Committee at least quarterly. Each such meeting may occur in 

person or by telephone conference. The Chief Compliance Officer shall 

provide any information regarding the regulatory program of Tera that is 

requested by the Board or the Regulatory Oversight Committee.

(d) The position of Chief Compliance Officer shall carry with it the authority 

and resources to develop and enforce policies and procedures necessary to 

fulfill the duties set forth for Chief Compliance Officers in CFTC 

Regulations. The Chief Compliance Officer shall have supervisory 

authority over all staff acting at the direction of the Chief Compliance 

Officer.

(e) The Chief Compliance Officer’s duties shall include, but are not limited to, 

the following:

Overseeing and reviewing the compliance of Tera with Section 5h 

of the CEA and any related CFTC regulations;

In consultation with the Board or the President of Tera, resolving 

any conflicts of interest that may arise, including:

(1) Conflicts between business considerations and compliance 

requirements;

(2) Conflicts between business considerations and the 

requirement that Tera provide fair, open, and impartial 

access as set forth in CFTC Regulation 37.202; and

(3) Conflicts between Tera’s management and members of the 

Board;

Establishing and administering written policies and procedures 

reasonably designed to prevent violations of the CEA and any rules 

adopted by the CFTC;
- 20 -

Taking reasonable steps to ensure compliance with the CEA and 

rules of the CFTC;

Establishing procedures for the remediation of noncompliance 

issues identified by the Chief Compliance Officer through a 

compliance office review, look-back, internal or external audit 

finding, self-reported error, or validated complaint;

Establishing and following appropriate procedures for the handling, 

management response, remediation, retesting, and closing of 

noncompliance issues;

Establishing and administering a compliance manual designed to 

promote compliance with the applicable laws, rules, and regulations 

and administering a written code of ethics designed to prevent 

ethical violations and to promote honesty and ethical conduct;

Supervising the SEF’s self-regulatory program with respect to trade 

practice surveillance; market surveillance; real-time market 

monitoring; compliance with audit trail requirements; enforcement 

and disciplinary and appeals proceedings; audits; examinations 

conducted by third parties; and other regulatory responsibilities with 

respect to Participants, (including ensuring compliance with, if 

applicable, financial integrity, financial reporting, sales practice, 

recordkeeping, and other requirements); and

Preparing and filing the annual compliance report of Tera.

Rule 208 Conflicts of Interest

(a) A Director, Officer, panel member or other Person authorized to exercise 

Tera’s authority concerning any inquiry, investigation or any disciplinary

or appeals proceeding, summary suspension, or other summary actions (any 

such action, a “SEF Action” and, collectively, “SEF Actions”), or 

Emergency actions taken pursuant to Rule 210 (each such SEF Action or 

Emergency Action, a “SEF Proceeding”) who knowingly has a “material 

conflict of interest” between his or her position as a Director, Officer, panel 

member or exercise of authority concerning any SEF Proceeding and his or 

her personal interests (each, an “Interested Person”) may not participate in 

any deliberations or vote of the Board, Committee, or panel or exercise any 

authority in any SEF Proceeding involving his or her personal interest, 

except as described in Rule 208(d).

(b) For purposes of Rule 208(a), a “material conflict of interest” includes a 

Director’s, Officer’s, or other Person’s:

Being named as a respondent or potential respondent in a SEF 

Proceeding;
- 21 -

Being an employer, employee, fellow employee or an Affiliate of a 

respondent or potential respondent in a SEF Proceeding;

Having any significant, ongoing business relationship with a 

respondent or potential respondent in a SEF Proceeding;

Having a family relationship with a respondent or potential 

respondent in a SEF Proceeding (including the individual’s spouse, 

co-habitator, former spouse, parent, step-parent, child, step-child, 

sibling, step-brother, step-sister, grandparent, grandchild, uncle, 

aunt, nephew, niece, father-in-law, mother-in-law, son-in-law, 

daughter-in-law, brother-in-law or sister-in-law); and/or

Having a direct and substantial financial interest in the result of the 

deliberations or vote based upon either SEF or non-SEF positions. 

A direct and substantial financial interest includes positions held in 

Instruments in the accounts of, controlled by, or affiliated with the 

Interested Person or any other types of direct and substantial 

financial positions of the Interested Person that are reasonably 

expected to be affected by the deliberations or vote.

(c) Before considering any SEF Proceeding, an Interested Person must disclose 

in writing to the Board the material facts concerning his or her relationship 

or interest in the matter.

(d) Any Interested Person who would be required otherwise to abstain from 

deliberations and voting pursuant to Rule 208(a) as a result of having a 

direct and substantial financial interest in the result of the deliberations and 

vote may participate in deliberations, prior to a vote on the matter, if:

The material facts about the Interested Person’s financial interest in 

the matter are disclosed or known to the Board;

The Board determines that the participation by the Interested Person 

would be consistent with the public interest; and

A majority of the Directors (excluding any Interested Persons) vote 

to allow the Interested Person to participate in deliberations on the 

matter.

(e) If a determination is made pursuant to Rule 208(d) that an Interested Person 

may participate in deliberations prior to a vote, then the minutes of the 

meeting of the Board or committee thereof will reflect the determination 

and the reasons for the determination.

(f) If a determination is made pursuant to Rule 208(a) that all Directors are 

Interested Persons with respect to a matter subject to a vote by the Board, 

the President will appoint a panel of individuals who are not Interested 
- 22 -

Persons with respect to such matter, which will have the same authority and 

powers over such matter that the Board would have if the Directors were 

not Interested Persons with respect to such matter.

(g) No Director, Officer or member of any committee or panel established by 

the Board shall use or disclose for any purpose other than the performance 

of his or her official duties and responsibilities as a Director, Officer or 

committee or panel member any material, non-public information obtained 

as a result of the individual’s duties and responsibilities as a Director, 

Officer or committee or panel member. No Director, Officer or committee 

or panel member shall, directly or indirectly, disclose or use at any time, 

either during his or her association with Tera or thereafter, any confidential 

information of which the Board member or committee or panel member 

becomes aware. Each Director, Officer or committee or panel member in 

possession of confidential information shall take all appropriate steps to 

safeguard the information and to protect it against disclosure, misuse, 

espionage, loss and theft.

(h) Notwithstanding Rule 208(g), a Director, Officer or committee or panel 

member may disclose confidential information if required by law or a court 

order to be revealed to the United States Department of Justice or the CFTC.

(i) For the purposes of Rule 208(g), the terms “material information” and 

“nonpublic information” shall each have the meaning set forth in CFTC 

Regulation 1.59(a).

Rule 209 Material Non-Public Information

(a) No member of the Board or of any Board committee, no member of any 

other committee of the Company, no officer of Tera, no employee of Tera 

and no consultant to Tera shall:

Trade for such person’s own account, or for or on behalf of any other 

account, on the basis of any material, non-public information 

obtained through the performance of such person’s official duties;

Use or disclose, for any purpose other than the performance of such 

person’s official duties, any material, non-public information 

obtained by such person as a result of such person’s official duties, 

provided, however, that this Section shall not prohibit disclosures 

made by such person in the course of his or her official duties or 

disclosures made to the CFTC, any self-regulatory organization, a 

court of competent jurisdiction or any agency or department of the 

federal or state government; or

Trade, directly or indirectly, in any Instrument traded on Tera; in 

any related commodity interest; or in any commodity interest traded 

on any DCM or SEF or cleared by any Clearing House if such person 
- 23 -

has access to material non-public information concerning such 

Instrument or commodity interest.

Rule 210 Emergency Rules

(a) During an Emergency, the Board may implement temporary emergency 

procedures and rules (“Emergency Rules”), subject to the applicable 

provisions of the CEA and CFTC Regulations. Emergency Rules may 

require or authorize Tera, the Board, any committee of the Board, the 

President, or any other Officer to take any actions necessary or appropriate 

to respond to the Emergency, including, but not limited to, the following 

actions:

Imposing or modifying position limits;

Imposing or modifying price limits;

Imposing or modifying intraday market restrictions;

Ordering the liquidation or transfer of open positions in any 

contract;

Ordering the fixing of a settlement price;

Extending or shortening the expiration date or the trading hours;

Suspending or curtailing trading in any contract;

Transferring Participant contracts;

Altering any contract’s settlement terms or conditions; or

Providing for the carrying out of such actions through its agreements 

with its third-party provider of clearing or regulatory services.

(b) Before any Emergency Rule may be adopted and enforced, a required vote 

of the Board must approve the implementation of such Emergency Rule at 

a duly convened meeting. Directors may attend such a meeting by 

teleconference. If the President determines that Emergency Rules must be 

implemented with respect to an Emergency before a meeting of the Board 

can reasonably be convened, then the President shall have the authority, 

without Board action, to implement any Emergency Rules with respect to 

such Emergency that he or she deems necessary or appropriate to respond 

to such Emergency. In such circumstances, the President must convene a 

meeting of the Board as soon as practicable thereafter. Notwithstanding that 

the Board does not ratify or approve extending or making permanent any 

Emergency Rules implemented by the President pending convening of the 
- 24 -

Board meeting, all actions previously taken in accordance with such 

Emergency Rules shall remain binding and valid.

(c) Whenever Tera, the Board, any committee of the Board, or the President 

takes actions necessary or appropriate to respond to an Emergency 

(including, without limitation, the actions set forth in paragraph (a) above), 

a duly authorized representative of Tera will, as soon as practicable, ensure 

that an announcement is posted in a Notice to Participants. When the Board, 

any committee of the Board or the President determines that the Emergency 

is no longer in effect, permitting Tera to resume normal functioning, any 

such actions responding to an Emergency will be terminated.

(d) Tera will use reasonable efforts to notify the CFTC prior to implementing, 

modifying or terminating an Emergency Rule. If such prior notification is 

not possible or practicable, Tera will notify the CFTC as soon as possible 

or reasonably practicable, but in all circumstances within twenty-four (24) 

hours of the implementation, modification or termination of such 

Emergency Rule.

(e) Upon taking any action in response to an Emergency, Tera will document 

the decision-making process related to such action. Such documentation 

will be kept for at least five years following the date on which the 

Emergency ceases to exist or to affect Tera, and all such documentation will 

be provided to the CFTC upon request.

Rule 211 Maintenance of Books and Records

(a) TeraExchange shall keep, or cause to be kept, full, complete and systematic

books and records, together with all pertinent data and memoranda, of all 

activities relating to the business of TeraExchange with respect to swaps, as 

prescribed by the CFTC, including, without limitation, timestamps required 

to be maintained under CFTC Regulation 43.3, complete audit trails for all 

Transactions on or otherwise subject to its Rules, investigatory files, 

disciplinary files, and all records required by CFTC Regulation Part 37, as 

required by CFTC Regulation 45.2. Records kept pursuant to this Rule may 

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

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

the information in them is reportable, as required by CFTC Regulation 45.2.

(b) TeraExchange shall retain all such books and records described in Rule 

211(a) and required by CFTC Regulation 45.2 or any other section of the 

CEA for at least five (5) years following the final termination of a 

Transaction. Records relating to Transactions shall be readily accessible via 

real time electronic access by Tera throughout the life of the Transaction 

and for two (2) years following its final termination, and shall be retrievable 

by Tera within three (3) business days through the remainder of the period 
- 25 -

following final termination of the Transaction during which it is required to 

be kept, pursuant to CFTC Regulation 45.2(e)(1).

(c) All books and records kept pursuant to this Rule, including audit trail data 

and reconstructions, shall be made available to the CFTC in a form and 

manner that is acceptable to the CFTC, and shall be open to inspection and 

examination upon request by any representative of the CFTC, the 

Department of Justice, The Securities and Exchange Commission, and any 

other prudential regulator as authorized by the CFTC. Copies of all such 

records shall be provided, at the expense of Tera, to any representative upon 

request, by electronic means, hard copy, or both, as requested by the CFTC, 

except that copies of records originally created and exclusively maintained 

in paper form may be provided in hard copy only.

Rule 212 Information-Sharing Agreements

a) Tera will enter into information-sharing agreements or other arrangements 

or procedures necessary to establish and enforce rules that will allow Tera 

to obtain any necessary information to perform any monitoring of activity 

on TeraExchange and which allow Tera to carry out such international 

information-sharing agreements as the CFTC may require.

b) Tera will provide any information in its possession to the CFTC, in a form 

and manner of its approval, upon proper request.

c) Tera will enter into information-sharing agreements, and share information

with, other regulatory organizations, data repositories, and third-party data 

reporting services as required by the CFTC or as otherwise necessary and 

appropriate to fulfill its self-regulatory and reporting responsibilities.

Rule 213 [Reserved]

Rule 214 Prohibited Use of Data Collected for Regulatory Purposes

Tera shall not use for business or marketing purposes any Proprietary Data that Tera 

collects or receives, from or on behalf of any Person, for the purpose of fulfilling its 

regulatory obligations; provided, however, that Tera may use such Proprietary Data for 

business or marketing purposes if the Person from whom it collects or receives such 

Proprietary Data clearly consents to Tera’s use of such Proprietary Data in such manner. 

Tera shall not condition access to its markets or market services on a Person’s consent to 

Tera’s use of Proprietary Data for business or marketing purposes. Where necessary for 

regulatory purposes, Tera may share such Proprietary Data with the CFTC or one or more 

SEFs, DCMs or DCOs registered with the CFTC pursuant to Rule 211.

CHAPTER 3 PARTICIPANTS

Rule 301 Eligibility Criteria for Becoming a Participant
- 26 -

(a) To be eligible for admission as a Participant, an applicant must demonstrate 

to the satisfaction of Tera that it:

Is an ECP;

Is of good reputation and business integrity;

Maintains adequate financial resources and credit, and has adequate 

capacity to meet its financial obligations;

Is validly organized, in good standing, and authorized by its 

governing body and, if relevant, documents of organization, to trade 

financial products of a type consistent with Instruments;

Has not filed for bankruptcy;

Is not a SEF Official, agent or Affiliate of Tera;

Holds all registrations required under Applicable Law, if any;

Is not subject to statutory disqualification under Section 8a(2) of the 

CEA; 

Is not an ISV or automated trading system; and

Satisfies any other criteria that Tera may reasonably require from a 

Participant.

(b) Each Executing Firm that is acting as agent for an Account Holder or 

Customer must provide Tera with all information necessary for Tera to 

establish Accounts for such Account Holder or Customer and provide Tera 

with written representations or proof of authority to place Orders and 

execute Trades on Tera on behalf of or in the name of such Account Holder

or Customer, and verify the status of such Account Holder or Customer as 

an ECP.

(c) Once admitted, the Participant, Account Holder or Customer shall continue 

to comply with all applicable eligibility criteria in this Rule 301.

(d) Each Account Holder must be either a Clearing Firm of a Clearing House 

where the Clearable Instruments are cleared or have a clearing account with 

a Clearing Firm with respect to such Clearable Instrument and, through its 

Executing Firm, provide Tera with evidence of such relationship.

(e) Each Executing Firm that is acting as agent for an Account Holder must 

ensure that each such Account Holder has established a clearing account 

with a Clearing Firm of the Clearing House accepting for clearance the 

Clearable Instruments traded on Tera.
- 27 -

(f) Participants that do not have a relationship with a Clearing Firm as set forth 

in subsection (d) or (e) of this Rule 301 are prohibited from entering Orders 

on Tera.

(g) Upon request of Tera, each Participant shall promptly provide to Tera such 

information about its Authorized Traders as Tera requests, including but not 

limited to, the names and dates of birth of such Authorized Traders.

Rule 302 Authorized Traders

(a) Each Participant shall designate one or more Authorized Traders, who will 

be responsible for all SEF Activity conducted on behalf of the Participant.

(b) Each Authorized Trader of a Participant:

Must be a natural person;

Must satisfy any other requirements as may be prescribed by Tera 

from time to time.

Must have a Trader ID.

(c) A Participant that authorizes a third party to trade for its Account on a 

discretionary basis pursuant to a power of attorney or other written 

delegation of authority is considered controlled by the third party to whom 

trading authority has been assigned. Each Participant must identify at least 

one specific natural person as its Authorized Trader with respect to such 

Account.

(d) Without limiting the foregoing, each Authorized Trader will consent, in a 

form satisfactory to Tera, to abide by the Tera Rules and Applicable Law 

prior to accessing Tera, and each Participant will ensure on an ongoing basis 

that:

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);

Each of its Authorized Traders will be technically proficient in using 

Tera’s facility; and

Each of its Authorized Traders will conduct its business in 

accordance with the Tera Rules.

(e) By agreeing to become an Authorized Trader, an individual agrees to be 

bound by the duties and responsibilities of an Authorized Trader and to be 

subject to, and comply with, the Tera Rules and Obligations. Among other 

duties and responsibilities that Tera may impose, an Authorized Trader 
- 28 -

must ensure that any SEF Activity conducted under any Trader ID assigned 

to him or her complies with all Tera Rules and Obligations.

(f) To nominate an Authorized Trader, a Participant must follow the 

procedures established by Tera. Tera may establish criteria that individuals 

must fulfill to become an Authorized Trader. Tera will not accept the 

registration as an Authorized Trader of any individual who is a SEF Official.

(g) Tera will promptly notify a Participant in Writing of the approval of 

nominated Authorized Traders or if Tera declines to approve the 

nomination.

(h) Tera may, in its sole discretion revoke or suspend the designation of an 

Authorized Trader and shall promptly notify the Participant in Writing of 

such action. Upon such notification Tera will disable access of such 

Authorized Trader to Tera.

(i) To request the termination of the designation of an Authorized Trader, the 

Participant or the Authorized Trader must notify Tera following the 

procedures established by Tera. Tera, in its sole discretion, may postpone 

the effective time and date of the termination of the Authorized Trader if 

Tera considers it necessary to avoid any adverse impact on the market 

and/or other Participants, for the protection of other Participants or in Tera’s 

best interest. Based on the information provided to, and other information 

gathered by, Tera regarding the request to terminate the designation of an 

Authorized Trader, Tera will determine whether to:

Accept the request to terminate the designation;

Postpone the effective date of termination of the designation; and/or

Impose any terms or conditions before or after the effective date of 

termination of the designation.

Rule 303 Participant Application Process

(a) Any Person who desires to become a Participant shall:

Submit a signed EULA;

Agree in Writing to abide by the Tera Rules and Applicable Law;

Provide such information and documentation as Tera may, acting in 

good faith, reasonably request; and

Follow any other procedure established by Tera.
- 29 -

(b) Additionally, any Participant organized or located outside of the United 

States may appoint a third party as agent for service of process pursuant to 

CFTC Regulation 15.05.

(c) In considering an application from a potential Participant, Tera may require 

additional information from the applicant, or conduct an investigation to 

verify information submitted by the applicant, or both.

(d) If Tera decides to admit an applicant as a Participant, it shall promptly notify 

the applicant and state in such notice the date on which the applicant shall 

become a Participant.

(e) Tera may deny, condition, or terminate Participant status of any Person if:

Such Person is unable to satisfactorily demonstrate its ability to 

satisfy the Eligibility Criteria as set forth in Rule 301(a) to become 

or remain a Participant; or

Such Person is unable to satisfactorily demonstrate its capacity to 

adhere to all applicable Tera Rules.

(f) If Tera decides to decline or condition an application for admission as a 

Participant, or terminate a Person’s status as a Participant, Tera shall 

promptly notify such Person (the “Affected Person”) thereof in a Writing 

sent to the address provided by the applicant or maintained in the Tera 

registry of Participants. Such Affected Person may, within seven (7) 

calendar days, request in Writing that Tera provide the reasons for the 

denial, conditioning or termination of Participant status. Within fourteen 

(14) calendar days after receiving such Written request, Tera shall send in 

Writing to the Affected Person the reasons for the denial, conditioning or 

termination. Within fourteen (14) calendar days of receiving Tera’s written 

response, the Affected Person may request in Writing that Tera reconsider 

its determination, and may provide any relevant representations or other 

information that such Affected Person believes to be relevant to the 

reconsideration.

Rule 304 Limitations on Trading Privileges

Tera may at any time revoke, suspend, limit, condition, restrict or qualify the Trading 

Privileges of any Participant with or without notice to such Participant if, in the sole 

discretion of Tera, such action is in the commercially reasonable interest of Tera.

Rule 305 Assessments and Fees

Tera shall set the times and amounts of any assessments or fees to be paid by Participants, 

which assessments or fees shall be paid to Tera when due. Such fees and assessments shall 

be applied consistently to Participants with similar Trading Privileges, rights, and 

Obligations under relevant documentation, governing their relationship with and access to 
- 30 -

Tera. If a Participant fails to pay when due any such assessments or fees levied on such 

Participant, and such payment obligation remains unsatisfied for sixty (60) days after its 

due date, Tera may suspend, revoke, limit, condition, restrict or qualify the Trading 

Privileges of such Participant as it deems necessary or appropriate.

Rule 306 Authorized Representatives

Each Participant shall designate one or more Authorized Representatives who will 

represent the Participant before Tera and its committees and receive notices on behalf of 

the Participant. The Authorized Representative shall be empowered by the Participant to 

act on its behalf and Tera shall be entitled to rely on the actions of the Authorized 

Representative as binding on the Participant. Each Participant must provide Tera with 

current contact and other requested information for each of its Authorized Representatives 

so that Tera is able to immediately contact the Authorized Representatives.

Rule 307 Recording of Communications

Tera and the Participants may record conversations and retain copies of electronic 

communications between SEF Officials, on the one hand, and Participants, on the other 

hand. Any such recordings may be retained by Tera or the Participant in such manner and 

for such periods of time as such parties may deem necessary or appropriate and as 

necessary to comply with any applicable CFTC Regulations.

Rule 308 Notices to Participants

Tera shall publish a Notice to Participants with respect to each addition to, modification 

of, or clarification of, the Tera Rules or of any action to implement any Tera Rules, in a 

form and manner that is reasonably designed to enable each Participant 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. For 

purposes of publication in accordance with the first sentence of this Rule 308, it shall be 

sufficient (without limiting the discretion of Tera as to any other reasonable means of 

communication) if a Notice to Participants is published on Tera’s website. Any Notice to 

Participants shall also be deemed to have been made to all Authorized Traders, agents, 

advisors, managers and Supervised Persons of such Participants. The effective date shall 

be stated in the Notice itself, and if none is stated, will be a reasonable period of time under 

the circumstances. 

Rule 309 Communications between Tera and Participants

Each Participant shall advise Tera of its current phone number, fax number and e-mail address.

All communications between Tera and the Participant will be transmitted by electronic 

mail and/or posted on Tera’s website, except as otherwise specified by Tera. All 

communications made to a Participant shall also be deemed to have been made to all 

Account Holders, Authorized Traders and Supervised Persons, and agents of such 

Participant. Communications that are specific to an Order or Trade will be directed to the 

Participant, Account Holder, Authorized Trader or Supervised Person that initiated such 

Order or Transaction.
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Rule 310 Application of Tera Rules and Jurisdiction

(a) By becoming a Participant, accessing the Tera System, or entering any 

Order or submitting any Instrument into the Tera System, whether directly 

or through an intermediary, and without any need for any further action, 

undertaking or agreement, a Participant, its Clearing Firm, Authorized 

Traders and Supervised Persons, and any Account Holder or Customer of 

any Participant, and any ISV agrees to:

Be bound by, and comply with, the Tera Rules and obligations, 

Instrument Specifications and Applicable Law, in each case to the 

extent applicable to it;

Become subject to the jurisdiction of Tera with respect to any and 

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

actions or omissions of such Person; 

Assist Tera in complying with its legal and regulatory obligations;

Cooperate with Tera, its agents, and the CFTC in any inquiry, 

investigation, audit, examination or proceeding; and

Authorize Tera to provide information regarding such Participant, 

its Account Holders, Authorized Traders, Supervised Persons, and 

any Participants acting as agents to the CFTC or any SelfRegulatory Organization.

(b) By accessing Tera through an Executing Firm that has not provided the 

Account Holder with electronic access to the Tera System, an Account 

Holder agrees to assist Tera in complying with its legal and regulatory 

obligations, and thereby agrees without any further action, undertaking or 

agreement, to cooperate with Tera and its agents in any inquiry, 

investigation, audit, examination or proceeding relating to Transactions 

entered on Tera on its behalf; 

(c) Any Person whose Trading Privileges are revoked or terminated shall 

remain bound by the Tera Rules and Applicable Law, in each case to the 

extent applicable to it, and subject to the jurisdiction of Tera with respect to 

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

actions or omissions of such Participant prior to such revocation or 

termination;

(d) Any Person that is suspended for any period remains subject to the Tera 

Rules, the Obligations and Tera’s jurisdiction throughout the period of 

suspension. After termination or revocation of the designation of a 

Participant, the Participant remains subject to the Tera Rules, the 

Obligations and the jurisdiction of Tera for acts done and omissions made 

while registered or acting as a Participant. Any SEF Proceeding relating to 
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a Participant shall occur as if the Participant were still registered or acting 

as such;

(e) Any Person initiating or executing a transaction on or subject to the rules of 

Tera directly or through an intermediary, and any person for whose benefit 

such a transaction has been initiated or executed, and without any need for

any further action, undertaking or agreement, consents to the jurisdiction of 

Tera.

Rule 311 Compliance with the Commodity Exchange Act

All Participants shall comply with the provisions of the CEA and the rules and regulations 

duly issued pursuant thereto by the CFTC, including but not limited to the filing of reports, 

maintenance of books and records, and permitting inspection and visitation by duly 

authorized representatives of the CFTC or Department of Justice.

Rule 312 Description of Participants’ Status

A Participant shall ensure that the form, content and context of any description of the 

Participant’s status on Tera is not inconsistent with, and does not misrepresent, the 

Participant’s capacity on Tera under the Tera Rules or the Participant’s registration, if any, 

under the CEA, or under any other Applicable Law.

Rule 313 Designated Categories of Participants

(a) Floor Broker means a Participant who executes Transactions for another 

Participant and has registered with the CFTC as a Floor Broker.

(b) Floor Trader means a Participant that executes Transactions for its own 

Account and has registered with the CFTC as a Floor Trader.

(c) Market Maker means a Participant who, pursuant to a market making 

agreement with Tera, agrees to abide by the conditions of its market making 

agreement on Tera.

Rule 314 Termination of Participants

Upon its termination as a Participant, all rights and privileges of the Participant shall 

immediately cease. Following termination, all obligations of a Participant and Tera shall 

survive and the terminated Participant shall remain bound by the Tera Rules and Applicable 

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

respect to any and all matters arising from, related to, on in connection with, the status, 

actions or omissions of such Participant prior to its termination.

Rule 315 Withdrawal of Participants
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(a) To withdraw from Tera, a Participant must notify Tera following the 

procedures established by Tera. Such withdrawal shall generally be 

accepted and effective immediately upon receipt of such notice by Tera.

(b) Tera may, in its reasonable discretion, postpone the effective date of 

withdrawal of a Participant if Tera considers it necessary for the protection 

of other Participants or otherwise in the interests of Tera. In no event, 

however, shall the effective date of such withdrawal be later than the start 

of trading on the next Business Day. 

(c) When Tera accepts the withdrawal of a Participant, all rights and privileges 

of such Participant terminate (including, without limitation, the Trading 

Privileges). The accepted withdrawal of a Participant shall not affect the 

rights of Tera under the Tera Rules or relieve the former Participant of such 

Participant’s obligations under the Tera Rules before such withdrawal. 

Notwithstanding the accepted withdrawal of a Participant, the withdrawn 

Participant remains subject to the Tera Rules, the Obligations and the 

jurisdiction of Tera for acts done and omissions made while a Participant, 

and must cooperate in any SEF Proceeding under Chapter 6 as if the 

withdrawn Participant were still a Participant.

Rule 316 Access

(a) ECP Access: Tera shall provide impartial access to its markets and services, 

including indicative quotes or similar pricing data, to any ECP meeting the 

Eligibility Criteria set forth in Rule 301(a), provided that such Eligibility 

Criteria governing such access is applied in an impartial, transparent, fair 

and non-discriminatory manner and that each ECP has first consented to 

Tera’s jurisdiction and Rules and complied with all documentation 

requirements prior to being granted access.

(b) ISV Access: Tera will provide ISVs with impartial and transparent access 

to its trading platform and its data in a fair and non-discriminatory manner. 

A Person seeking to act as an ISV may apply to connect to the Tera System, 

and shall be permitted to do so by Tera, provided that the ISV meets the 

following criteria initially and on an on-going basis:

the ISV applies for connection on a form prescribed by Tera and 

provides such supporting documentation as required by Tera;

the ISV satisfies the definition of Eligible Contract Participant and 

ensures that each Person that uses the ISV to access TeraExchange 

is either a Participant or an Account Holder or Customer of a 

Participant authorized as such in accordance with the Tera Rules;

the ISV shall be duly organized, existing and in good standing under 

the laws of its jurisdiction of organization and, if required to be 
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registered in any capacity under Applicable Law, it has duly 

registered in such capacity and such registration is in effect;

the ISV satisfies Tera’s technological integrity requirements, 

including system compatibility requirements, security protocols and 

technical specifications for connection to the Tera System as may 

be specified by Tera from time to time; and,

connecting the ISV does not and will not adversely affect Tera’s 

ability to comply with CEA and CFTC Regulations.

CHAPTER 4 OBLIGATIONS OF PARTICIPANTS

Rule 401 Information to be Provided by Participants

(a) Each Participant, including a Participant that is an Executing Firm, and any 

Authorized Trader or Account Holder or Customer of a Participant, shall 

provide such information as may be reasonably requested by Tera from time to 

time, including but not limited to, such information as may be requested during 

the Participant onboarding process about the Participant, its Authorized 

Traders, and where applicable, its Account Holders or Customers. Tera shall 

obtain information including, but not be limited to, the following:

Legal Entity name;

Legal Entity Identifier, if available;

An indication of whether the Participant or Account Holder is a 

Swap Dealer;

An indication of whether the Participant or Account Holder is a 

Major Swap Participant with respect to the Instrument with respect 

to which the Order is placed;

An indication of whether the Participant or Account Holder is a 

Financial Entity;

An indication of whether the Participant or Account Holder is a U.S. 

person;

If Participant or Account Holder is not a U.S. person, the name and 

contact information for an agent for service of process; and

For individuals identified as Authorized Traders, name, date of 

birth, and regulatory registration number, if applicable.

(b) Each Participant and Authorized Trader, and any Account Holder or 

Customer of a Participant, must keep complete and accurate books and 
- 35 -

records, including records of its trading activity on Tera, activity in the 

commodity underlying any Instrument, activity in the index or instrument 

used as a reference price for any Transaction, and activity in related

markets, in such form and manner and for such period as required by CFTC 

Regulations and Applicable Law, and must make its books and records 

available, upon request, to TeraExchange, its agents, and the CFTC.

Rule 402 Duties and Responsibilities of Participants

Each Participant, acting on behalf of itself and as agent for any other Participants or 

Account Holder, shall

(a) Ensure that Tera’s facilities are used in a responsible manner and are not 

used for any improper purpose;

(b) Ensure that Tera’s facilities are used to only conduct SEF Activity;

(c) Ensure that all SEF Activity conducted by the Participant, its agents, 

Authorized Traders and Supervised Persons is performed in a manner 

consistent with the Tera Rules and their respective Obligations;

(d) Comply with all Tera Rules and Obligations and act in a manner consistent 

with each Tera Rule and Obligation;

(e) Observe high standards of integrity, market conduct, commercial honor, fair 

dealing, and just and equitable principles of trade while conducting or 

attempting to conduct any SEF Activity, or any aspect of any business 

connected with or concerning Tera;

(f) Not knowingly mislead or conceal any material fact or matter in any 

dealings or filings with Tera or in response to any SEF Proceeding;

(g) Keep all Authorized Trader’s Trader IDs, account numbers and passwords 

confidential;

(h) Be fully liable for all trading losses, Orders and Transactions in Instruments 

effected by Participant or for Participant’s Account;

(i) Be responsible for promptly informing Tera of any material changes to 

Eligibility Criteria information provided to Tera by the Participant; and

(j) Keep, or cause to be kept, complete and accurate books and records, 

including, without limitation, all books and records required to be 

maintained pursuant to the CEA, the CFTC Regulations or the Tera Rules, 

for at least five (5) years after the termination of the Instrument and required 

to be readily accessible during the first two (2) years of the five-year period, 

and make such books and records available for inspection upon request by 
- 36 -

any representative of Tera, the CFTC or other relevant regulatory or 

governmental body.

Rule 403 Representations and Required Disclosures to Tera

At the time of each use of Tera, each Participant shall be deemed to represent to Tera that 

it is an ECP, and that none of the events listed below has occurred with respect to 

Participant, and each Participant shall immediately notify the Compliance Department 

upon becoming aware that any of the following events has occurred:

(a) Any material change to the contact information provided to Tera by the 

Participant;

(b) Any damage to, or failure or inadequacy of, the systems, facilities or 

equipment of the Participant needed to effect Transactions pursuant to the 

Tera Rules or to timely perform the Participant’s financial obligations under 

or in connection with Instruments;

(c) Any refusal of admission of the Participant for membership in any SelfRegulatory Organization, SEF, DCM, or DCO;

(d) Any expulsion, suspension or fine in excess of $50,000 (whether through 

an adverse determination, voluntary settlement or otherwise) imposed on 

the Participant by any Self-Regulatory Organization, SEF, DCM, DCO or 

relevant regulatory or governmental body;

(e) Any revocation, suspension or conditioning of any registration or license of 

a Participant necessary to conduct SEF Activity granted by any 

Governmental Agency;

(f) The commencement of any judicial, administrative, or regulatory 

proceeding or investigation involving the Participant, or the imposition of 

any fine, cease and desist order, denial of trading privileges, censure or other 

sanction or remedy (whether through an adverse determination, voluntary 

settlement or otherwise) imposed by any relevant regulatory or 

governmental body;

(g) Any indictment or conviction of, or any confession of guilt or plea of guilty 

or nolo contendere by any principals or senior officers of the Participant or 

Supervised Persons for any felony or misdemeanor involving, arising from, 

or related to, the purchase or sale of any commodity, futures contract, 

Instrument, option, security, securities futures product or other financial 

instrument, or involving or arising from fraud or moral turpitude;

(h) The existence of any circumstances that would disqualify the Participant 

from registration with the CFTC;
- 37 -

(i) The Participant or a 10% or greater owner of the Participant becoming the 

subject of a petition for bankruptcy;

(j) The appointment of a receiver, trustee or administrator for the Participant 

or a 10% or greater owner of the Participant;

(k) The presentment of a petition, or the passing of a resolution, for the 

Participant’s or a 10% or greater owner of the Participant winding-up;

(l) The commencement of proceedings for the Participant’s or the 10% or 

greater owner of the Participant dissolution; or

(m) The occurrence of an event of insolvency with respect to the Participant or 

the 10% or greater owner of the Participant.

Rule 404 Inspections by Tera

(a) Tera shall have the right with such prior reasonable advance notice as is 

practicable under the circumstances, in connection with determining 

whether all Tera Rules and Obligations are being, will be, or have been 

complied with by the Participant, along with its Clearing Firm, Authorized 

Traders, Supervised Persons, any Account Holder or Customer of a 

Participant, and any other Person using the Trader ID or login credentials 

linked to the Participant, to:

Inspect systems, equipment and software of any kind operated by 

the Participant in connection with SEF Activity, wherever located;

and

Access, either physically or electronically, the systems, equipment, 

software, and the premises on which the systems, equipment, and 

software are located, any data stored in any of the systems or 

equipment, during the regular business hours and the Trading Hours 

of Tera; and/or

Copy or reproduce any data to which Tera has access under this 

Rule.

(b) Each Participant, along with its Clearing Firm, Authorized Traders, 

Supervised Persons, any Account Holder or Customer of a Participant, and 

any other Person using the Trader ID or login credentials linked to the 

Participant shall provide any outsourced provider of regulatory services

contracted by Tera with the same access to their books and records and 

offices as they are required to provide to Tera under the Tera Rules and 

Applicable Law.

(c) The Compliance Department may require a Participant, Account Holder or 

Customer of a Participant, or Authorized Trader to furnish (periodically or 
- 38 -

on a particular occasion) information concerning such Person’s activity on 

Tera or open trading positions, Instruments to which such Person is a party, 

or any other information related to the Person’s SEF Activity.

(d) In the course of a trade practice surveillance or market surveillance 

investigation into any trading activity involving post-trade allocations, 

TeraExchange will ascertain whether a post-trade allocation was made, and 

if so, Tera will request, obtain and review the post-trade allocation 

information as part of its investigation. TeraExchange is relying on the relief 

provided in CFTC NAL 17-54 with regard to certain audit trail requirements 

related to post-trade allocations. CFTC NAL 17-54 expires on November 

15, 2020.

Rule 405 Mandatory Pre-Trade Credit Checks

(a) Cleared Transactions.

Each Participant shall enter into an agreement with the applicable 

Clearing Firm(s) for its Accounts to utilize TeraCheck or a third 

party credit hub service pre-trade risk/credit filter functionality to 

ensure all Orders for cleared Transactions entered on or pursuant to 

the Tera Rules, by it or on its behalf, meet the risk-based limits 

established by such Clearing Firm, in accordance with CFTC 

Regulation 1.73, for its Accounts. Each Participant shall specify, in 

advance, on an order by order basis, the applicable Clearing Firm 

for any intended to be cleared Trade to be executed on or subject to 

the Rules of Tera. No Order will be exposed to the market for 

execution prior to an affirmative determination, on an order by order 

basis, that the Order successfully meets the risk-based limits 

established by the applicable Clearing Firm for the Participant’s 

Account. If an Order fails to satisfy the risk-based limits established 

by the Clearing Firm, it will be rejected.

Participant shall not enter cleared Ordersfor an Account greater than 

the levels set by the applicable Clearing Firm(s) for such 

Account(s). 

Tera reserves the right to suspend or terminate any Participant’s 

access to Tera at any time in the event that Participant or its Clearing 

Firm fails to establish reasonably prudent risk parameters for its 

Orders in such credit check system, as determined by Tera in its sole 

discretion.

(b) Uncleared Transactions.

The use of a pre-trade risk/credit filter for Orders for uncleared 

Transactions shall depend on the Instrument’s terms and conditions 

and the mutual agreement of the Transaction’s counterparties. 
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Rule 406 Minimum Financial and Related Reporting Requirements

Each Participant that is registered with any Self-Regulatory Organization shall comply with 

the provisions of Applicable Law relating to minimum financial and related reporting and 

recordkeeping requirements. Such Participant shall provide to Tera at the time that it files 

with the CFTC a copy of any notice or Written report that Participant is required to file 

with the CFTC pursuant to CFTC Regulation 1.12. Additionally, a Participant, whether or 

not subject to such filing requirements, shall provide Tera with such financial information 

as Tera may reasonably require from time to time. Each Participant must notify Tera 

immediately when it or an Account Holder or Customer of the Participant ceases to be an 

ECP, and if the Participant is registered with the CFTC as a futures commission merchant, 

when it ceases to satisfy the minimum financial requirements set forth in Regulation 1.17. 

A Participant that violates the aforementioned CFTC Regulations shall be deemed to have 

violated this Rule 406 and shall not affect Transactions on TeraExchange except for 

purposes of closing open positions to the extent not prohibited by Applicable Law.

Rule 407 Confidentiality of Financial and Other Information

All information and data obtained or received by the Compliance Department from 

inspections of accounting and other records, quarterly balance sheets and declarations or 

reports on financial condition will be treated as confidential by Tera; however, this Rule does 

not supplant Rule 210 (Emergency Rules) and the Rules in Chapter 8 (Disciplinary Rules), or 

any other requirement of legal process or law.

Rule 408 Authority to Impose Restrictions

Whenever a Participant is subject to the early warning requirements set forth in the CFTC 

Regulations, including, but not limited to, 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 Participants, their Account Holders or Tera.

Rule 409 Participants or Executing Firms Accessing Tera on Behalf Others

(a) A Participant shall not enter an Order or otherwise access Tera on behalf 

of a legally distinct Customer or Account Holder unless:

The Participant has prior written instruction or authority from the 

Customer or Account Holders to do so;

The Customer or Account Holder has represented to the Participant 

that it is an ECP; and

The Participant will be able to comply with Tera Rules.

(b) An Executing Firm may not enter Orders into the Tera System on behalf of 

a Participant or a legally distinct Customer or Account Holder, arrange 
- 40 -

Block Trades pursuant to Rule 514 or report Arranged Transactions 

pursuant to Rule 531 unless:

The Executing Firm has prior written instruction or authority from 

the Participant, Customer or Account Holder to do so;

The Participant, Customer or Account Holder has represented that it 

is an ECP; and

The Executing Firm will be able to comply with Tera Rules.

(c) If an Executing Firm provides access to the Tera System electronically 

either directly through the Tera System itself or indirectly through the 

Executing Firm’s proprietary trading system, the Executing Firm shall 

inform and obtain acknowledgement from the Participant, Customer or 

Account Holder of its agreement to be bound by the Tera Rules.

Rule 410 Verification of ECP Status

At least once per year, each Participant, and any Participant that is acting on behalf of a 

legally distinct Customer or Account Holder, must verify in a written certification to 

TeraExchange the continued status of such Participant, Customer or Account Holder as an 

ECP.

Rule 411 Disclosure Requirements

Each Participant must comply with all disclosure requirements set forth in applicable 

CFTC Regulations and any additional disclosure requirements imposed by the Tera Rules.

Rule 412 Position Liquidation Upon Default

Upon default of any Trade by a Participant or Account Holder or Customer of a Participant, 

Tera shall have the right to arrange the liquidation of all or some of the positions of such 

Participant or Account Holder or Customer of a Participant, as applicable, opened on or 

pursuant to the Rule of Tera

Rule 413 Responsibility for Mandatory Trading

Each Participant that is a Swap Dealer or Major Swap Participant shall be responsible for 

compliance with the mandatory trading requirement under Section 2(h)(8) of the CEA for 

any Instrument or Transaction subject to such mandatory trading requirement.

CHAPTER 5 TRADING PRACTICES AND BUSINESS CONDUCT

Rule 501 Scope
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This Chapter 5 prescribes rules concerning trading practices and business conduct on Tera 

and applies to all Orders, RFQs, indications of interest and Trades in Instruments as defined 

in Chapter 1.

Rule 502 Procedures

(a) With respect to trading on or though Tera or subject to Tera Rules, Tera 

may adopt, without limitation, procedures relating to Transactions in 

Instruments and trading on Tera or subject to Tera Rules, including 

procedures to:

Disseminate the prices of indications of interest, bids and offers on, 

and Trades in, Instruments;

Record, and account for, Instruments and SEF Activity and regulate

administrative matters affecting Instruments and SEF Activity;

Establish limits on the number and/or size of RFQs, indications of 

interest or Orders that may be submitted by a Participant through 

Tera or subject to Tera Rules;

Establish limits on the aggregate notional amount of Instruments 

that may be held by a Participant;

Establish a limit on the maximum daily price fluctuations for any 

Instrument and provide for any related restriction or suspension of 

trading in the Instrument;

Establish minimum price quoting increments for each Instrument; 

and

Require a suspended or expelled Participant, or a Participant with 

restricted trading rights, to have Instruments executed for the 

Participant to reduce or eliminate any open position or exposure to 

future price changes for the Participants in any Instrument.

(b) Tera may, in its discretion and at any time, amend any procedures adopted 

pursuant to Rule 502(a), and will publish the amendments in a Notice to 

Participants or in any other manner determined appropriate by Tera.

Rule 503 Business Days and Trading Hours

Except as provided in Rule 210 with respect to Emergencies, Tera shall determine and 

publish a Notice to Participants listing the Business Days and holidays of Tera and the 

Trading Hours for each Instrument.

Rule 504 Supervision
- 42 -

A Participant shall be responsible for establishing, maintaining and administering 

reasonable supervisory procedures to ensure that any Authorized Traders acting on its 

behalf comply with Applicable Law and the Tera Rules, and such Participant may be held 

accountable for the actions of such Authorized Traders acting on its behalf.

Rule 505 Mishandling of Customer Orders

Any Participant that mishandles any Order is responsible for all remedial actions with 

respect to such Order. 

Rule 506 Trading on the Order Book

Trading on the Order Book will remain available during Business Days and Trading Hours. 

Participants may transmit anonymously displayed Orders to the Order Book for cleared 

and uncleared Instruments electronically on the Tera System or with the assistance of 

authorized Tera personnel. Orders for un-cleared instruments are anonymously displayed 

to all market participants that have signed the TeraExchange EULA, inclusive of the 

addendum that provides a universal ISDA agreement which establishes an acceptable 

bilateral credit agreement between all Participants that have agreed to the same. At the end 

of the Trading Hours for an Instrument, all unfilled bids and offers are cancelled.

Rule 507 Price-Time Priority in Order Book

Unless otherwise stated in a Notice to Participants, all Orders entered into the Tera System 

shall be executed based on a price-time priority model (first in – first out method). Under 

the price time priority model, an anonymously displayed bid (offer) Order will be matched 

with the earliest offer (bid) Order to arrive in the Order Book at the best price. If there are 

multiple bid and offer Orders that have the same price, the earliest to arrive in the Order 

Book will be the offer (bid) Order to which the bid (offer) Order is matched. 

Rule 508 Electronic and Voice-Assisted Order Entry

(a) Electronic Order Entry. Each Participant entering an Order electronically 

with respect to any Instrument traded on Tera must provide, without 

limitation:

Participant or Authorized Trader identification;

Trading Account details;

Instrument description, including expiration date;

Price;

Quantity or notional amount;

Order type; and
- 43 -

CTI codes.

(b) All Orders in connection with Required Transactions or Permitted 

Transactions shall be entered into the Order Book or Request for Quote via 

the Tera System or other such Tera approved application interface.

(c) Voice-Assisted Order Entry. 

Participants may contact authorized Tera personnel for assistance in 

entering, modifying or removing Orders into the Order Book. 

Requests for assistance may be made on such telephone lines, 

electronic mail or instant messaging channels as Tera shall specify 

from time to time. 

Tera personnel must carry out the instructions of a Participant upon 

receipt and must make a record of the time at which the request for 

assistance was made. All communications between a Participant and 

Tera personnel will be recorded and maintained by Tera as part of 

the Tera audit trail. Tera personnel assisting Participants in the entry, 

modification or withdrawal of Orders shall have a unique User ID 

for the purpose of carrying out such instructions.

(d) Audit Trail Requirements.

Participants that directly connect to, or that provide connectivity to, 

TeraExchange are responsible for maintaining, or causing to be maintained, 

an Order routing/front-end audit trail (“Audit Trail”) for all electronic 

Orders, including Order entry, modification, cancellation and responses to 

such messages, entered into Tera through any gateway to Tera. The Audit 

Trail must contain all Order receipt, Order entry, Order modification, and 

response/receipt times to the highest level of precision achievable by the 

operating system, in accordance with CFTC requirements for electronic 

Orders and no more than one second for non-electronic Orders. The times 

captured must not be able to be modified by the Person entering the Order. 

The data must also contain all FIX Tag information and fields which should 

include, but is not limited to the following: A record of all fields relating to 

Order entry, including transaction date, product, SEF code, expiration 

month, quantity, Order Type, Order Qualifier, price, buy/sell indicator, 

stop/trigger price, Order number, unique transaction number, account 

number, session ID, operator ID, host Order number, trader Order number, 

Clearing Firm, type of action, action status code, customer type indicator, 

origin, and timestamps. For executed Orders, the Audit Trail must record 

the execution time of the Swap along with all fill information. 

(i) Participants must maintain Audit Trail information as required by 

Applicable Law and must have the ability to produce this data in a 
- 44 -

standard format upon request of the Regulatory Oversight 

Committee. 

(ii) A Participant whose customer is itself a Participant may agree with 

such customer that it is the customer’s obligation to maintain the 

Audit Trail for such customer’s Orders. Any such agreement shall

be in writing, and a copy of such agreement shall be provided to 

TeraExchange. 

(iii) No less than annually, Tera shall conduct a review of all 

Participants and Persons and firms subject to its jurisdiction and 

recordkeeping rules to verify compliance with Tera’s audit trail and 

recordkeeping requirements. Such reviews shall include, but are not 

limited to, reviews of randomly selected samples of front-end audit 

trail data for order routing systems; a review of the process by which 

user identifications are assigned and user identification records are 

maintained; a review of usage patterns associated with user 

identifications to monitor for violations of user identification rules; 

and reviews of account numbers and customer type indicator codes 

in trade records to test for accuracy and improper use.

Rule 509 Position Accountability

(a) To reduce the threat of market manipulation or congestion, Tera shall adopt 

for each of the contracts of the facility, as is necessary and appropriate, 

position limitations or position accountability levels for speculators 

pursuant to CFTC regulation 37.600. Any such limitation or accountability 

level shall be published in a Notice to Participants. A Participant who holds 

or controls aggregate positions exceeding those specified in such notice 

shall when so ordered by the Tera:

Provide in a timely manner all applicable information regarding the 

nature of the position, trading strategy, and hedging information;

Refrain from increasing the position that exceed the levels specified 

in the Position Accountability limitations published by Tera; and

Liquidate such positions in a timely and orderly manner.

(b) For purposes of this Rule, all positions in accounts for which a Person, by 

power of attorney or otherwise, directly or indirectly controls trading shall 

be included with the positions held by such Person. The provisions of this 

Rule shall apply to positions held by two or more Persons acting pursuant 

to an expressed or implied agreement or understanding, as if the positions 

were held by a single Person.
- 45 -

Rule 510 Order Types

Orders shall be placed on Tera in the form of limit orders or market orders

as described below. Participants shall use appropriate symbols or indicators 

as specified in applicable Tera procedures from time to time. 

Limit Order: A Limit Order is an Order to buy a specified quantity 

of a security at or below a specified price, or an Order to sell a 

specified quantity at or above a specified price. A Limit Order is 

good until cancelled and residual volume from a partially filled 

Limit Order will be retained until executed unless otherwise 

specified.

Market Order: A Market Order is an Order that is executed at the 

best price or prices available in the Order Book at the time the Order 

is placed and until the Order is filled.

Rule 511 Bunched Orders and Orders Eligible for Post-Execution 

Allocation

(a) Only the following categories of Participants may place a Bunched Order 

on Tera or that is subject to Tera Rules:

A commodity trading advisor registered with the CFTC pursuant to 

the CEA or excluded or exempt from registration under the CEA or 

CFTC Regulations, except for entities exempt under CFTC 

Regulation 4.14(a)(3);

An investment adviser registered with the SEC pursuant to the 

Investment Advisers Act of 1940 or with a state pursuant to 

applicable state law or excluded or exempt from registration under 

the Investment Advisers Act of 1940 or applicable state law or rule;

A bank, insurance company, trust company, or savings and loan 

association subject to federal or state regulation;

A foreign adviser that exercises discretionary trading authority 

solely over the accounts of non-U.S. persons, as defined in CFTC 

Regulation 4.7(a)(1)(iv);

A Futures Commission Merchant registered with the CFTC pursuant 

to the CEA; or

An Introducing Broker registered with the CFTC pursuant to the 

CEA.

(b) Bunched Orders must be allocated and recorded in accordance with 

applicable CFTC Regulation 1.35, or any successor regulation thereto, and 
- 46 -

consistent with the NFA Interpretative Notice 9029 related to Compliance 

Rule 2-10 or any successor regulation.

Rule 512 Orders Entered Prior to SEF Opening

Orders entered into the Tera System prior to the opening of Trading Hours shall be entered 

pursuant to procedures established by Tera from time to time in a Notice to Participants.

Rule 513 Identification of Authorized Traders

Each Authorized Trader shall be identified to Tera, in the manner prescribed by Tera, and 

shall be subject to Tera Rules. It is the duty of the Participant to ensure that Authorized 

Trader (and Trader ID) registration, as applicable, is current and accurate at all times. Each 

individual must use a Trader ID to access Tera. In no event may a Person enter an Order 

or permit the entry of an Order by an individual using a Trader ID other than the 

individual’s own Trader ID.

Rule 514 Block Trades

(a) Block Trades shall be permitted to the extent consistent with CFTC 

Regulations and the Tera Rules.

(b) The following shall govern Block Trades:

Each party to a Block Trade must qualify as an “eligible contract 

participant”, as that term is defined in Section 1a(18) of the CEA 

and CFTC Regulations.

A Block Trade must be for a quantity that is at or in excess of the 

applicable minimum block size established by the CFTC pursuant 

to Regulation 43.6. Spread trades may be executed as Block Trades, 

provided that the quantity of each leg of the spread meets the 

minimum quantity for each respective maturity. When the 

applicable minimum block size or cap size for a publicly reportable 

swap transaction is denominated in a currency other than U.S. 

dollars, TeraExchange will use a currency exchange rate that is 

widely published within the preceding two business days from the 

date of execution of the Trade to determine whether it meets the 

Block Trade qualification. Orders may not be aggregated for 

different accounts in order to achieve the minimum Block Trade size 

unless done by a Person who:

(1) A commodity trading advisor registered (or exempt from 

registration) under the CEA, or a principal thereof who has 

discretionary trading authority or directs client accounts; an 

investment advisor registered (or exempt from registration) 

under the Investment Advisors Act of 1940 who has 

discretionary trading authority or directs client accounts and 
- 47 -

satisfies the criteria of §4.7(a)(2)(v) of the CFTC 

Regulations; or, a foreign person performing a similar role 

or functions as the persons described in §43.6(h)(6)(i)(A) or 

(B) and is subject as such to foreign regulation, and

(2) Has more than $25,000,000 in total assets under 

management.

The parties to a Transaction with a notional amount at or in excess 

of the applicable minimum block size must notify Tera of the 

election to have to Transaction treated as a Block Trade. Tera will 

notify the applicable SDR of the Block Trade election when 

transmitting swap transaction and pricing data and Required Swap 

Creation Data in accordance with Rule 704.

The price at which a Block Trade is executed must be fair and 

reasonable in light of (i) the size of the Block Trade, (ii) the prices 

and sizes of other transactions in the same contract at the relevant 

time, (iii) the prices and sizes of transactions in other relevant

markets, including the related swap markets, at the relevant time, 

and (iv) the circumstances of the markets or the parties to the Block 

Trade.

(c) Block Trades must be entered using the Tera System in a manner prescribed 

from time to time by Tera.

(d) A Participant, Authorized Trader or Executing Firm must receive 

instructions from a Customer or Account Holder or obtain the Customer’s 

or Account Holder’s prior consent in writing before entering into a Block 

Trade with that Customer or Account Holder. Such instruction or consent 

may be provided in the power of attorney or similar document by which the 

Customer or Account Holder provides the Participant, Authorized Trader or 

Executing Firm with discretionary trading authority or the authority to 

direct the trading in its account.

(e) A Reporting Counterparty must transmit all swap transaction and pricing 

data, including the actual notional or principal amount, required to be 

reported under CFTC Regulation Part 43 for any Block Trade to Tera as 

soon as technologically practicable, but in any event no later than 10 

minutes following its execution. Following receipt, Tera will transmit the 

swap transaction and pricing data to the relevant SDR as soon as 

technologically practicable. The SDR will be responsible for delaying the 

public dissemination of swap transaction and pricing data relating to any 

Block Trade, and for dissemination of rounded notional or principal 

amounts, in accordance with the timeframe and requirements set forth in 

CFTC Regulation Part 43.
- 48 -

(f) Block Trade prices will not trigger unexecuted Orders in the Order Book.

(g) [Reserved]

(h) In accordance with CFTC NAL 17-60, expiring November 15, 2020, a 

Participant may execute a Block Trade for a Cleared Transaction if it: (i) 

involves an Instrument that is listed by Tera; (ii) is executed pursuant to the 

Rules and procedures of Tera, (iii) meets the notional or principal amount 

at or above the appropriate minimum block size applicable to the 

Instrument, (iv) is reported to an SDR pursuant to the Rules and procedures 

of Tera and the CFTC’s rules and regulations, (v) is screened against the 

applicable pre-trade credit limits in accordance with Rule 405, and (vi) is 

subject to void ab initio requirements where the Block Trade is rejected on 

the basis of credit. 

(i) Any Block Trade in violation of these requirements shall constitute conduct 

which is inconsistent with just and equitable principles of trade.

Rule 515 Risk Controls

(a) Tera may, in its sole discretion, reject any Order.

(b) Tera shall have the right to take any action to reduce the potential of market 

disruption, including, but not limited to, market restrictions that pause or 

halt trading in market conditions prescribed by Tera if such action is in the 

best interest of the Instrument markets.

(c) Tera shall have the right in its sole discretion to cancel Trades executed at 

prices outside of the No-Bust Range. The price of a Swap shall be within 

the “No-Bust Range” if such price is not more than 10% higher or lower 

than the price of the last trade in such Swap or, if such Swap has not 

previously been traded on that Business Day, not more than 10% higher or 

lower than the prior Business Day’s settlement price for such Swap. 

(d) If an Instrument is fungible with, linked to or a substitute for a financial 

instrument trading on another trading venue, including any trading venue 

regulated by the SEC (a “Linked Instrument”), and such other trading venue 

has placed risk controls on such financial instrument, Tera shall have the 

right to place similar risk controls on the Linked Instrument.

Rule 516 Use of Trading Privileges

No Participant may use its Trading Privileges or access Tera in any way that could be 

expected to bring disrepute upon such Participant or Tera.
- 49 -

Rule 517 Priority of Customers’ Orders

No Participant shall enter an Order into Tera for its own Account, an Account in which he 

has a direct or indirect financial interest or an account over which he has discretionary 

trading authority, including, without limitation, an Order allowing discretion as to time and 

price, when such Participant is in possession of any Order in the same Instrument from 

another Participant that Tera is capable of accepting.

Rule 518 Adherence to Law

(a) No Participant, Customer, Authorized Representative, Authorized Trader, 

Introducing Broker or Supervised Person shall engage in conduct in 

violation of Applicable Law, the Tera Rules, CFTC Regulations, the Rules 

of any SEF, or the Rules of any Designated Contract Market, Derivatives 

Clearing Organization or Self-Regulatory Organization that has jurisdiction 

over such Participant, Customer, Authorized Representative, Authorized 

Trader, Introducing Broker or Supervised Person or, with respect to SEF 

Activity, the laws, rules or regulations of any relevant Governmental 

Agency.

(b) Without limiting subsection (a) of this Rule,

Each Participant that is an FCM or a Clearing Firm must comply 

with all requirements of Applicable Law regarding the treatment of 

Customer funds and Customer Orders; and

Each Participant, Customer or Account Holder must comply with all 

margin requirements established by each relevant Clearing House 

and by each relevant Clearing Firm, if applicable, as well as any 

margin requirements set forth by CFTC Regulations or Applicable 

Law.

Rule 519 Rule Violations

(a) It shall be an offense for a Person subject to Tera’s jurisdiction to violate 

any Tera Rule regulating the conduct or business of a Participant, or any 

agreement made with Tera, or to engage in fraud, dishonorable or dishonest 

conduct, or in conduct which is inconsistent with just and equitable 

principles of trade.

(b) Any Person subject to Tera’s jurisdiction shall, upon request, assist Tera in 

any investigation into potential violations of the Tera Rules or the CEA. 

Such assistance, which must be made in good faith and in a timely manner

that is reasonable under the circumstances, may include but not be limited 

to, requiring any Participant to produce documents, to answer questions 

from Tera or its designee, and/or to appear in connection with an 

investigation.
- 50 -

(c) If a Person subject to Tera’s jurisdiction has actual or constructive notice of 

a violation of Tera Rules in connection with the use of Tera by a Participant 

and the Person fails to take appropriate action, the Person may be found to 

have committed an act detrimental to the interest or welfare of Tera.

Rule 520 Fraudulent Acts Prohibited

No Person subject to Tera’s jurisdiction shall engage in, or attempt to engage in any 

fraudulent act or engage in, or attempt to engage in any manipulative device, scheme or 

artifice to defraud, deceive, trick or mislead in connection with or related to any SEF 

Activity including, without limitation, front running, fraudulent trading, money passes, 

trading ahead of Account Holder or Customer Orders, trading against Account Holder or 

Customer Orders or accommodation trading.

Rule 521 Fictitious, Wash or Non-Competitive Transactions Prohibited

(a) No Person subject to Tera’s jurisdiction shall create fictitious Transactions 

or wash Transactions or execute any such Order with knowledge of its 

nature. No Person subject to Tera’s jurisdiction shall place or accept Orders 

in the same Instrument where the Person knows or reasonably should know 

that the purpose of the Orders is to avoid taking a bona fide market position 

exposed to market risk (Transactions commonly known or referred to as 

wash sales). Orders for different accounts with common beneficial 

ownership that are entered with the intent to negate market risk or price 

competition shall also be deemed to violate the prohibition on wash trades. 

Additionally, no Person subject to Tera’s jurisdiction shall knowingly 

execute or accommodate the execution of such Orders by direct or indirect 

means.

(b) No Person subject to Tera’s jurisdiction shall engage in a non-competitive 

transaction except with respect to Block Trades affected pursuant to Rule 

514 or Permitted Transactions Arranged by an Executing Firm pursuant to 

Rule 531.

Rule 522 Market Disruption Prohibited

No Person subject to Tera’s jurisdiction shall enter data or other information into the Tera 

System for the purposes of upsetting the equilibrium of the market in any Instrument or 

creating a condition in which prices do not or will not reflect fair market value.

Rule 523 Disruptive Trading Practices Prohibited

No Person subject to Tera’s jurisdiction shall engage in any trading practice or conduct that 

constitutes a “disruptive trading practice”, as such term is described in Section 4c(a)(5) of 

the CEA or in interpretive guidance issued by the CFTC, in relation to the trading of any 

Instrument. The following are prohibited:
- 51 -

(a) Violating Bids and Offers. No Participant, Authorized Trader, Executing 

Firm, or Account Holder or Customer of a Participant, via the Order Book, 

shall buy or attempt to buy an Instrument on Tera at a price that is higher 

than the lowest available price offered for such Instrument or sell an 

Instrument on Tera at a price that is lower than the highest available price 

bid for such Instrument.

(b) Orderly Execution of Transactions during the Closing Period. No 

Participant, Authorized Trader, Executing Firm, or Account Holder or 

Customer of a Participant shall engage in any conduct that demonstrates 

reckless or intentional disregard for the orderly execution of Transactions 

during the Closing Period, including, but not limited to, conduct commonly 

known as “banging” or “marking” the close.

(c) Spoofing. No Participant, Authorized Trader, Executing Firm, or Account 

Holder or Customer of a Participant shall intentionally engage in any 

conduct that is, is the character of, or is commonly known to the trade as 

“spoofing,” including, but not limited to:

Bidding and offering with the intent to cancel the bid or offer before 

execution;

Submitting or cancelling bids or offers to overload the quotation 

system;

Submitting or cancelling bids or offers to delay another Participants’ 

execution of Transactions;

Submitting or cancelling multiple bids or offers to create an 

appearance of false market depth; and

Submitting or cancelling bids or offers with intent to create artificial 

price movements upwards or downwards.

Rule 524 Market Manipulation Prohibited

No Person subject to Tera’s jurisdiction shall engage in any conduct that manipulates or 

attempts to manipulate the price in any Instrument, including, without limitation, engaging 

in activity in violation of CEA sections 9(a)(2), 4c(a)(5), and Commission Regulations 

180.1(a) and 180.2.

Rule 525 Misstatements Prohibited

No Person subject to Tera’s jurisdiction shall knowingly make any misstatement of a 

material fact to Tera, any SEF Official, any Board committee or SEF panel, the Compliance 

Department and/or agents of Tera or to any Participant, or knowingly omit to state a 

material fact necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading.
- 52 -

Rule 526 Acts Detrimental to Welfare of Tera Prohibited

It shall be an offense for any Person subject to Tera’s jurisdiction to engage in any act that 

is detrimental to Tera’s operations or its’ ability to comply with Applicable Law. 

Rule 527 Misuse of Tera Prohibited

Misuse of Tera is strictly prohibited. No Person subject to Tera’s jurisdiction shall (i)

willfully or negligently engage in unauthorized use of Tera; (ii) assist any Person in 

obtaining unauthorized access to Tera; (iii) trade on Tera without an agreement and an 

established account in good standing with a Derivatives Clearing Organization or a 

Clearing Firm; (iv) alter the equipment associated with Tera; (v) interfere with the 

operation of Tera; (vi) intercept or interfere with information provided by or to Tera; (vii) 

or in any way to use Tera in a manner contrary to the Tera Rules.

Rule 528 Withholding Orders Prohibited

(a) Any Participant entering Orders on Tera for any legally distinct Account 

Holders or Customers shall not withhold or withdraw from the market any 

Order, or any part of an Order, for the benefit of any Person other than such 

Account Holders or Customers.

(b) A Participant must enter immediately into Tera all Orders received from 

any legally distinct Account Holders or Customers that are executable 

immediately. If a Participant cannot immediately enter into Tera an Order 

received from such legally distinct Account Holder or Customer, the 

Participant must enter the Order into Tera as soon as practicable, and must 

immediately create an electronic record as provided in Rule 508(a).

Rule 529 Pre-discussed or Cross Trades 

(a) No Person subject to Tera’s jurisdiction in possession of any legally distinct 

Account Holder’s or Customer’s Order shall knowingly take, directly or 

indirectly, the opposite side of such Order for its own account, an account 

in which it has a direct or indirect financial interest, or an account over 

which it has discretionary trading authority.

(b) No Person subject to Tera’s jurisdiction in possession of Orders from more 

than one legally distinct Account Holder or Customer shall knowingly cause 

such Orders to execute against one another on Tera, or shall enter a prediscussed Transaction into the Tera System, except as provided in 

paragraph (c).

(c) The foregoing restriction shall not apply to Transactions executed pursuant 

to Rule 514 (Block Trades), Rule 536 (Cleared Error Trade Correction) or 

to Orders:
- 53 -

From a Participant which is a broker or dealer seeking to execute 

against an Account Holder’s Order for its own account, or 

alternatively seeking to execute two Account Holder’s Orders 

against one another, provided, in either case, that one side of the 

transaction has been exposed to other Participants as a firm quote 

available for execution on the Order Book for a minimum of 15 

seconds before the second side of the transaction has been submitted 

for execution.

Notwithstanding the foregoing, a Participant shall not be in violation 

of this rule due to Cross Trades executed by two Participants trading 

for the same account, or for separate accounts of the same Beneficial 

Ownership, where neither Participant has knowledge of the other’s 

Order and there is no coordination or prearrangement of the Cross 

Trade, provided that the relevant Participants shall be responsible, 

upon the request of TeraExchange, to demonstrate to the reasonable 

satisfaction of Tera, that neither Participant had knowledge of the 

other’s Order. For the avoidance of doubt, no delay in entering both 

sides of a pre-discussed Permitted Transaction or of a Cross Trade 

of a Permitted Transaction through TeraExchange is required. No 

Person shall enter a pre-discussed Permitted Transaction or Cross 

Trade in a Permitted Transaction for illegal or improper purposes.

Rule 530 Disclosing Orders Prohibited

No Person shall disclose another Person’s Order except to a designated SEF Official or the 

CFTC, and no Person shall solicit or induce another Person to disclose Order information. 

No Person shall take action or direct another to take action based on non-public Order 

information, however acquired.

Rule 531 Arranged Transactions

(a) Notwithstanding any provision of Rule 529 to the contrary, Tera shall 

execute Permitted Transactions between Participants, Account Holders or 

both that have been arranged by an Executing Firm and submitted to the 

Tera System in accordance with this Rule.

(b) The Executing Firm shall provide Tera with evidence in a form and manner 

acceptable to Tera that the Participant or Account Holder consents to the 

Executing Firm acting on the Participant or Account Holder’s behalf.

(c) The Executing Firm shall record such information as required by the Tera 

entry screen regarding the details of the arranged transaction as soon as 

practicable, but in no event more than 15 minutes, following agreement of 

the Participants to the terms of the transaction.

(d) The Executing Firm shall indicate whether the transaction is intended to be 

cleared or intended to be uncleared.
- 54 -

For Transactions intended to be cleared, the fields relating to 

account number and Clearing Participant shall automatically be 

populated and the transaction shall be in accordance with the 

provisions of Chapter 6 of the Tera Rules. Subject to Rule 537, the 

Executing Firm shall not disclose the identities of counterparties to 

a Transaction intended to be cleared.

For Transactions intended to be uncleared, the Executing Firm, prior 

to reporting the arranged transaction to Tera for execution under this 

rule, shall obtain a representation from each of the applicable 

Participants or Account Holders that the Participant or Account 

Holder has in place credit arrangement documentation as to the other 

party, including as applicable arrangements for the exchange of 

collateral.

(e) The Executing Firm shall keep full, complete and systematic records 

relating to the Transactions as required by CFTC Rule 1.35; and shall make 

available access to such records upon the request of Tera.

(f) The Transaction may not be entered into for illegal or improper purposes 

and must comply with the trading practice and business conduct rules of 

this Chapter. Upon request by Tera, the Executing Firm must demonstrate 

that a Transaction complies with this Rule and Applicable Law.

Rule 532 Voice-Assisted and Electronic Request for Quote Trading

(a) Electronic RFQ Trading. A Participant may solicit a bid, an offer or both, 

for a specific Instrument by entering an RFQ into the Tera System, which 

shall provide that each Participant solicited shall receive the RFQ 

solicitation with equal priority.

The requestor may submit the RFQ on an anonymous or disclosed 

basis. 

An RFQ must be sent by the requestor;

(1) For Required Transactions, to three or more recipients not 

affiliated with the requestor. In the event that Participants 

receiving an RFQ are affiliated with one another, only one 

such Participant shall be counted toward the minimum 

required number of market participants. Participants that are 

owned or controlled by the requestor shall not be counted 

toward the minimum required number of market 

participants.;

(2) For Permitted Transactions, to one or more recipients not 

affiliated with the requestor.
- 55 -

The RFQ recipient may respond to an RFQ by sending the requestor 

a responsive quote, which is firm and actionable. 

At the same time that the RFQ requestor receives the first response 

to the RFQ for a Required Transaction, Tera shall communicate to 

the requestor any bid or offer pertaining to the same Instrument 

resting on the Order Book. Tera provides the RFQ requestor the 

ability to execute against any of the bids or offers responding to the 

RFQ, including the bid or offer resting on the Order Book.

The RFQ requestor may execute against a responsive quote or a bid 

or offer on the Order Book. 

If the RFQ requestor does not execute the responsive quote within a 

pre-defined period of time set by the parties, the RFQ session ends.

By executing a responsive quote, the RFQ recipient agrees that it

shall result in a Transaction. 

(b) Voice-Assisted RFQ Trading. Tera provides Participants voice-assisted 

RFQ functionality so that they may enter RFQs and receive responsive 

quotes via voice communication with Tera personnel. A Participant may, 

for a specific Instrument, solicit a bid, an offer or both from other Tera

Participants, by contacting authorized Tera personnel on such telephone 

lines, electronic mail or instant messaging channels as Tera shall specify 

from time to time for such purpose. In carrying out such solicitations by 

telephone, electronic mail or instant messaging, the authorized Tera 

personnel shall provide each Participant solicited with equal priority.

The requestor may instruct that the RFQ be on an anonymous or 

disclosed basis. 

The RFQ must be communicated by authorized Tera personnel;

(1) For Required Transactions, to three or more recipients not 

affiliated with the requestor. In the event that Participants 

receiving an RFQ are affiliated with one another, only one 

such Participant shall be counted toward the minimum 

required number of market participants. Participants that are 

owned or controlled by the requestor shall not be counted 

toward the minimum required number of market 

participants.;

(2) For Permitted Transactions, to one or more recipients not 

affiliated with the requestor.

At the same time that authorized Tera personnel provide the RFQ 

requestor with the first response to the RFQ for a Required 
- 56 -

Transaction, such authorized Tera personnel shall communicate to 

the requestor any firm bid or offer pertaining to the same Instrument 

resting on the Order Book. The RFQ requestor may execute against 

any of the bids or offers responding to the RFQ, including the bid or 

offer resting on the Order Book. 

Upon execution, authorized Tera personnel shall enter the trade 

details into the Tera System. Tera personnel must make a record of 

the time at which the RFQ request was made as well as the responses 

received and transmitted to the requestor. All communications 

between Tera Personnel and requestors and Tera Personnel and 

recipients will be recorded and maintained by Tera.

(c) Indications of Interest.

For Permitted Transactions only, a liquidity provider (as defined by 

Tera) has the ability to display an indication of interest on Tera. An 

indication of interest is an advertisement to all Participants of the 

liquidity provider’s interest in dealing at a specific price, size, 

direction and tenor. 

An indication of interest is only an advertisement of the liquidity 

provider’s interest to deal; it is not executable. 

A Participant may trigger an RFQ, in accordance with the above 

RFQ protocols, to that liquidity provider based on the indication of 

interest. 

Rule 533 Disputes

Any dispute between an Account Holder and an Executing Firm or between two 

Participants arising out of or in connection with the solicitation or acceptance of any Order 

for execution of an Instrument, or the execution of any Instrument, shall be resolved by 

and pursuant to the arbitration rules of the NFA or such other Self-Regulatory Organization

as the parties may agree. 

Rule 534 Trade Cancellation and Price Adjustment

(a) Tera has the authority to adjust Trade prices or cancel Trades when, in its 

absolute and sole discretion, it believes such action is necessary to mitigate

market disrupting events caused by the improper or erroneous use of the 

electronic trading system or by system defects.

(b) Tera may, in its absolute and sole discretion, adjust Trade prices or cancel

any Trade if it determines that allowing a Trade to stand as executed may 

have a material adverse effect on the integrity of the market, including, but 

not limited to, Trades executed at prices outside of the No-Bust Range as 

set forth in Rule 515.
- 57 -

(c) Trades that are price-adjusted shall be inserted into Tera’s official time and 

sales records at the adjusted Trade price. Cancelled Trade prices and any 

prices that have been adjusted shall be cancelled from Tera’s official time 

and sales records. Notice of price adjustments and cancellations will be 

posted to Tera’s website.

Rule 535 Trade Review, Correction and Notification

(a) Tera may determine to review a Trade based on its independent analysis of 

market activity or upon request for review by a Participant. Upon deciding

to review a Trade, Tera will promptly notify the counterparties that the 

Trade is under review.

(b) If a Participant believes that a Trade was erroneously executed or rejected 

from clearing due to an operational or clerical error or omission, it may 

request a review of the Transaction by providing Tera with a description of 

the alleged error existing in the executed Trade or which caused the Trade 

to be rejected from clearing, the Unique Swap Identifier for the Trade in 

question and any additional information reasonably requested by Tera.

A request for review of a Trade rejected from clearing must be made 

by a Participant, in writing and including the information required 

in Rule 535(b), within 30 minutes from the issuance of the notice of 

rejection by the relevant Clearing House.

A request for review of an alleged error in an existing Trade must 

be made by a Participant, in writing and including the information 

required in Rule 535(b), no later than the end of the Business Day 

following the date of execution of the Trade in question.

(c) Upon receipt by Tera of a written request for review of a Transaction, 

including the information required in Rule 535(b), Tera will review its 

electronic audit trail to determine if Tera correctly executed the Trade. Such 

review will be completed:

With respect to a Trade rejected from clearing for non-credit 

reasons, promptly following the receipt of the request for review, 

error description and associated Unique Swap Identifier, or

With respect to a Cleared Error Trade (defined below), on the same 

Business Day if Tera received such request for review prior to 12:00 

noon on any Business Day, or

By the end of the following Business Day if such request was 

received:

(1) On or after 12:00 noon on any Business Day, or
- 58 -

(2) On any day that is not a Business Day.

(d) If the review described in this Rule reveals that the Trade was correctly 

executed by Tera, then no adjustment shall be made in the Accounts of any 

Participants.

(e) If, after review, Tera affirmatively determines that the Trade was (i) 

erroneously executed, (ii) involved an Instrument not required to be cleared 

pursuant to the clearing mandate in Section 2(h)(1) of the CEA, and (iii) 

was not designated to be submitted voluntarily for clearing to a Clearing 

House, then, no later than three Business Days after the erroneous Trade 

was executed, the Participants involved in the erroneous Trade may 

mutually agree to cancel the erroneous Trade or, subject to the Tera Rules, 

to correct or adjust the erroneous Trade price. 

(f) If, after review, Tera affirmatively determines that the Trade was (i) 

erroneously executed, (ii) involved an Instrument intended to be cleared 

pursuant to the clearing mandate in Section 2(h)(1) of the CEA, or (iii) was 

submitted voluntarily for clearing to a Clearing House, correction of the 

erroneous Trade shall be made pursuant to Rule 536 below.

(g) Notwithstanding anything to the contrary in this Rule, if Tera determines in 

its sole discretion that the execution of any erroneous Trade was the result 

of Orders being incorrectly processed by Tera, or any other cause beyond 

the control of any Participant, then Tera may cancel such Trade in the 

Accounts of all affected Participants.

Rule 536 Cleared Error Trade Correction

(a) Until the effective date on any changes in CFTC Regulations covered by 

CFTC NAL 17-27, as supplemented by CFTC NAL 20-01, this Rule 536

shall apply where an operational or clerical error or omission made by Tera, 

one of the counterparties, or an agent of the counterparty, (i) results in the 

rejection of a Trade submitted for clearing or (ii) is identified after the Trade 

has been cleared (a “Cleared Error Trade”).

(b) If Tera affirmatively determines that a Trade has been rejected from clearing 

by a Clearing House due to an operational or clerical error or omission made 

by Tera, one of the counterparties, or an agent of the counterparty, a new 

transaction, with terms and conditions that match the terms and conditions 

of the original transaction, other than any such error or omission and time 

of execution, may be executed and submitted for clearing without having 

been executed pursuant to the methods set forth in CFTC Regulation 

37.9(a)(2).

If Tera is able to determine how to correct the error or omission, it 

may execute a new Trade without obtaining the consent of the 

counterparties to the original Transaction.
- 59 -

If Tera is unable to determine how to correct the error or omission, 

it may either (x) seek guidance on how to address the error or 

omission from the counterparties, which guidance may not be 

implemented without the consent of both counterparties, or (y) elect 

not to correct the error, in which case the original Transaction will 

be deemed void ab initio.

A new Trade correcting a Trade rejected from clearing due to 

operational or clerical error or omission must, subject to the Tera 

Rules, including Rule 405, be executed on Tera and submitted for 

clearing as quickly as technologically practicable following the 

relevant Clearing Firm receipt of notice of rejection from a Clearing 

House, but, in any event, no later than one hour from the issuance 

of the notice.

If the new Trade that corrects the errors in the original Trade is also 

rejected for clearing it shall be deemed void ab initio and the

counterparties will not be provided a second opportunity to submit 

a new correcting Trade.

(c) If Tera affirmatively determines that a Trade is being carried on the books 

of a Clearing House in error, and that the correction of such Cleared Error 

Trade would not adversely impact market integrity, facilitate market 

manipulation or other illegitimate activity, or otherwise violate the CEA, 

CFTC Regulations or Tera Rules, in order to “reverse and resubmit” the 

Trade in error, trades to offset and correct the swaps carried in error on the 

books of the Clearing House, with terms and conditions that match the terms 

and conditions of the original transaction, other than any such error or 

omission and time of execution, may be executed and submitted for clearing 

without having been executed pursuant to the methods set forth in CFTC 

Regulation 37.9(a)(2).

If Tera is able to determine how to correct the error or omission, it 

may execute offsetting and correcting trades without obtaining the 

consent of the counterparties, and submit such trades to the relevant 

Clearing House for clearing.

If Tera is unable to determine how to correct the error or omission, 

it may seek guidance on how to address the error or omission from 

the counterparties to the Cleared Error Trade on how to address the 

error, and, in such case, shall only execute offsetting and correcting 

trades and submit such trades to the relevant Clearing House after 

obtaining consent from both counterparties.

New trades offsetting and correcting a Cleared Error Trade must, 

subject to the Tera Rules, including Rule 405, be executed on Tera 
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and submitted for clearing no later than three days after the Cleared 

Error Trade was executed.

(d) If, prior to a review and affirmative determination by Tera, the 

counterparties agree that a Trade has been rejected from clearing by a 

Clearing House, or a Cleared Error Trade has occurred, as the result of an 

operational or clerical error or omission and further agree how to 

appropriately correct the error in a way that will not adversely impact 

market integrity, facilitate market manipulation or other illegitimate 

activity, or otherwise violate the CEA, CFTC Regulations, or the Tera 

Rules, the counterparties to the Trade rejected from clearing or Cleared 

Error Trade may enter into offsetting and/or correcting trades to correct the 

operational or clerical error or omission without the prior notification and 

approval of Tera. 

A new Trade correcting the error or omission in a Trade that has 

been rejected from clearing by a Clearing House, with terms and 

conditions that match the terms and conditions of the original 

transaction, other than any such error or omission and time of 

execution, must, subject to the Tera Rules, including Rule 405, be 

executed on Tera and submitted for clearing within one hour of the 

issuance of notice of rejection from the relevant Clearing House.

New trades offsetting and correcting a Cleared Error Trade, with 

terms and conditions that match the terms and conditions of the 

original transaction, other than any such error or omission and time 

of execution, must, subject to the Tera Rules, including Rule 405,

be executed on Tera and submitted for clearing as soon as 

technologically practicable but in no case later than twenty-four 

hours following the execution of the Cleared Error Trade.

Upon electing to correct a Trade that has been rejected from clearing 

by a Clearing House, or to offset and correct a Cleared Error Trade, 

prior to an affirmative determination by Tera that an operational or 

clerical error or omission has occurred, a counterparty to the 

Transaction must, at the time the offsetting and/or correcting Trade 

is made, provide to Tera:

(1) The information required in Rule 535(b);

(2) A representation that the rejected Trade or Cleared Error 

Trade resulted from or contained operational or clerical 

errors or omissions; and

(3) The material terms of the rejected Trade or Cleared Error 

Trade, offsetting Trade and correcting Trade.
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Tera will perform an ex post facto review of the rejected Trade or 

Cleared Error Trade, offsetting Trade and correcting Trade within 

one Business Day of the date of execution of the offsetting Trade 

and correcting Trade. Such ex post facto review will include a 

review of Tera’s electronic audit trail and the facts and 

circumstances surrounding the rejected Trade or Cleared Error 

Trade, and a review of whether the offsetting Trade and correcting 

Trade adversely impacted market integrity, facilitated market 

manipulation or other illegitimate activity, or otherwise violated the 

CEA, CFTC Regulations, or the Tera Rules.

(1) Following the ex post facto review, Tera will make an 

affirmative determination as to whether an operational or 

clerical error or omission did exist resulting in the rejected 

Trade or Cleared Error Trade and whether it was 

appropriately corrected by the counterparties.

(2) If Tera makes an affirmative determination that an 

operational or clerical error or omission resulting in the 

rejected Trade or Cleared Error Trade did not exist 

appropriate disciplinary action will be taken against the 

counterparties in accordance with Chapter 8 of the Tera 

Rules.

(e) Upon the execution of any offsetting and/or correcting Trade, Tera shall 

report, as soon as technologically practicable, to the relevant SDR the 

following, as applicable:

Cancellation of the original trade under Part 43 of the CFTC Rules;

A Part 45 termination indicating that the original Trade rejected 

from clearing is void ab initio; and 

Swap transaction and pricing data and Required Swap Creation Data 

pursuant to Parts 43 and 45 for any offsetting and/or correcting

Trade.

Rule 537 Post Trade Anonymity

(a) Pursuant to the Commission issuing final rule § 37.9(d), it is prohibited to 

disclose, directly or indirectly, including through a third-party service 

provider, the identity of a counterparty for swaps executed, pre-arranged or 

pre-negotiated anonymously on or pursuant to the rules of a SEF and 

intended to be cleared at the time of execution.

(b) Prohibition on post-trade name give-up shall not apply to the components 

of a package transaction that are uncleared swaps or non-swap instruments. 

Examples include, but are not limited by, swaps execute with a Treasury 
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hedge cleared bilaterally between counterparties, swaps executed as part of 

a hedge to an Interest Rate Option or Credit Option and swaps executed as 

part of a package with uncleared swaps.

(c) The compliance date for swaps subject to the trade execution requirement 

under section 2(h)(8) of the CEA is November 1, 2020. The compliance 

date for swaps not subject to the trade execution requirement under section 

2(h)(8) of the CEA is July 5, 2021.

CHAPTER 6 CLEARING

Rule 601 Mandatory Clearing

(a) All Required Transactions and all Permitted Transactions, except as 

provided under Rule 608, entered into Tera or subject to the Tera Rules shall 

be cleared through a Clearing House in accordance with applicable Clearing 

House Rules and in conformity with the CEA, CFTC Regulations and the 

Rules specifically provided in this Chapter 6.

(b) Tera will route Transactions intended for clearing to the Clearing House

designated in the Instrument Specification for the Clearable Instrument in a 

manner acceptable to the Clearing House and will coordinate with each 

Clearing House to which it submits Transactions for clearing to develop 

rules and procedures to facilitate prompt, efficient, and accurate Transaction 

processing in accordance with CFTC Regulation 39.12(b)(7).

Rule 602 Clearing Accounts

For each Transaction a Participant expects to enter into on Tera or subject to Tera Rules, 

the Participant or an Account Holder of the Participant must establish a clearing account 

with the Clearing House or with a Clearing Firm that is a member of the Clearing House, 

in each case, designated in the Instrument Specification for such Clearable Instrument.

Rule 603 Clearing Firm Guarantee

(a) Each Participant that is not a Clearing Firm must obtain prior authorization 

from a Clearing Firm that will guarantee Participant’s Transactions in 

Instruments that are intended to be cleared, or enter into an appropriate 

arrangement with a Person that has such an authorization from a Clearing 

Firm. Each such guarantee or other arrangement must be in form and 

substance satisfactory to, and approved by, TeraExchange. A Clearing Firm 

must guarantee and assume financial responsibility for all Instruments of 

each Participant guaranteed by it. Where such Participant utilizes the 

services of multiple Clearing Firms, a Clearing Firm shall only be 

responsible to the extent that it has been designated to clear a particular 

Transaction.
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(b) A Clearing Firm may at any time revoke any authorization granted and 

guarantee made by it to any Participant in accordance with paragraph (a) 

above, by providing written notice of such revocation to TeraExchange. The 

guarantee will remain in effect until the non-Clearing Firm has liquidated 

or transferred all of the Participant’s positions and funds, as applicable, to 

another Clearing Firm.

(c) Upon notice that a Clearing Firm has revoked any authorization granted and 

guarantee made by it to any Participant pursuant to Rule 603(b), the Trading 

Privileges of the Participant will immediately be suspended and will not be 

reinstated until the Participant obtains new authorization from a Clearing 

Firm that will guarantee such Participant’s Transactions in accordance with 

Rule 603(a).

Rule 604 Clearing House Rules

(a) The clearing services provided by a Clearing House with respect to any 

Clearable Instrument, and the rights and obligations of purchasers and 

sellers under cleared Instruments (including rights and obligations in 

respect of clearing and settlement, variation payments and performance at 

maturity), shall be governed by the Clearing House Rules of such Clearing 

House.

(b) The Clearing House Rules shall prevail in the event of any conflict or 

inconsistency between these Rules and such Clearing House Rules with 

respect to any responsibilities or obligations of a Clearing Firm under such 

Clearing House Rules. Each Clearing Firm is bound by the Clearing House 

Rules of any Clearing House of which such Clearing Firm is a member.

Rule 605 Other Clearing Organizations

Each Clearing Firm must be a member of at least one Clearing House at all times. Tera 

may designate an additional clearing organization as a Clearing House from time to time. 

Whenever Tera designates a new Clearing House, a Clearing Firm may become a member 

of such Clearing House and clear Instruments through the Clearing House.

Rule 606 Clearing Fees

Clearing fees shall be assessed against a Clearing Firm for each side of a Transaction traded 

on, cleared by or processed through a Clearing House as such Clearing House may from 

time to time prescribe. Such clearing fees may be incorporated into the exchange fees 

assessed pursuant to Rule 305 as disclosed by Tera.

Rule 607 Clearing and Finality

(a) Tera does not guarantee that Orders executed on Tera and submitted for 

clearing will actually be cleared or otherwise result in completed and 
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binding Transactions. Participants acknowledge through their use of Tera 

that

Orders entered into Tera are intended to result in binding 

Transactions once accepted for clearing;

All obligations under such Transactions shall be enforceable against 

Participant solely by the relevant Clearing Firm and/or Clearing 

House;

The finality and binding status of any Transaction resulting from an 

Order executed on Tera shall be determined by reference to the 

relevant Clearing Firm documentation and Clearing House Rules; 

and

Tera is not a party to any cleared Transaction.

(b) Except as provided in Rule 536, in the event that an Order is executed on 

Tera and submitted to the relevant Clearing House for clearing but 

subsequently rejected by the relevant Clearing Firm or Clearing House, 

upon receipt of a clearing rejection notice from the relevant Clearing Firm 

or Clearing House such Transaction shall be deemed void ab initio and 

neither the parties thereto nor Tera shall have any further responsibility for 

such Transaction under these Rules. For the avoidance of doubt, at no time 

shall the submission by a Participant of an Order into Tera, or the execution 

of such Order against another Order on Tera, result in any transactionspecific performance obligations directly between the Participant and:

Any other Participant that has entered an Order into Tera, including 

any Order that is executed and sent for clearing contemporaneously 

with the first Participant’s Order; or 

Tera, other than the payment of associated fees in connection with 

cleared Transactions.

Rule 608 Uncleared Transactions

(a) A Permitted Transaction involving an Instrument that (i) is not required to 

be cleared pursuant to the clearing mandate in Section 2(h)(1) of the CEA 

and (ii) is not designated to be submitted voluntarily for clearing to a 

Clearing House will be an uncleared Transaction. Uncleared Transactions 

may only be entered into by counterparties, including any Participant, 

Executing Firm, Account Holder, Customer, Swap Dealer and Major 

Market Participant having previously established trading relationship 

documentation in place consistent with the requirements of Applicable Law.
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(b) Counterparties to a Permitted Transaction that has been reported to Tera by 

an Executing Firm for execution under Rule 531 may agree that such 

transactions shall be uncleared.

(c) Notwithstanding anything to the contrary in Rule 705(b), the Primary 

Economic Terms specific to the transaction agreed by the counterparties on 

Tera with respect to an uncleared Transaction shall be reflected by Tera in 

a written communication (the “Trade Communication”) sent by Tera to the 

applicable Participants or Account Holders through the Executing Firm. 

The Trade Communication, together with any underlying previously 

negotiated freestanding documents and agreements (including, without 

limitation, ISDA master agreements, other master agreements, terms 

supplements, master confirmation agreements, and incorporated industry 

definitions) governing such Transaction existing at the time of such 

commitment to which the participants are party (the “Terms Incorporated 

by Reference”) shall, taken together for purposes of CFTC Regulation 

37.6(b), comprise all of the terms of such transaction and serve as a 

confirmation of such transaction. Counterparties shall maintain all records 

of such previously negotiated freestanding agreements in accordance with 

CFTC NAL 17-17, expiring on the effective date of revised CFTC 

regulations. Each Trade Communication is deemed to incorporate the 

Terms Incorporated by Reference and in the event of any conflict between 

the Trade Communication and the Terms Incorporated by Reference, the 

Trade Communication shall prevail to the extent of any inconsistency. The 

Trade Communication shall state the same.

Upon request by Tera, counterparties to a transaction shall provide 

to Tera any underlying previously negotiated freestanding 

agreements between the counterparties.

Upon request by the CFTC to Tera, counterparties to a transaction 

shall provide Tera with any underlying previously negotiated 

freestanding agreements between the counterparties and such 

documents shall be furnished to the CFTC as soon as they are 

available.

CHAPTER 7 RECORDKEEPING AND REPORTING

Rule 701 Records to be Maintained by Clearing Firms

(a) A Participant acting as a Clearing Firm is responsible for maintaining or 

causing to be maintained records for all Orders, including Order entry, 

modification, cancellation and responses to such messages (referred to as 

the “Records”), entered into Tera. The Records must be maintained for a 

minimum of five years after the termination of the Instrument and be readily 

accessible during the first two (2) years of the five-year period, and 

Participants must have the ability to produce this data upon request of the 
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Chief Compliance Officer, his designee or the Regulatory Oversight 

Committee.

(b) The Records must contain in addition to information required by subsection 

(a) of this Rule 701, all Order receipts, Order entry, Order terms, a unique 

account identifier (that relates back to the account(s) owner(s)), Order 

modification, and response receipt times at least to a second. The Records 

must also contain all data relating to Order entry, including Transaction 

date, Instrument, applicable SEF codes, maturity date or tenor, quantity, 

Order type, Order qualifier, price, buy/sell indicator, trigger price, Order 

number, unique Transaction number, Account number, Clearing Firm, type 

of action, customer type indicator, origin, and timestamps. For executed 

Orders the Record must contain the execution time of the trade along with 

all fill information.

Rule 702 Customer Type Indicator (CTI) Codes

(a) Each Participant must identify each Transaction submitted to Tera with the 

correct customer type indicator code (a “CTI” code). The CTI codes are as 

follows:

CTI 1 - Transactions initiated and executed by an individual member 

for his own account, for an Account he controls or for an Account 

in which he has ownership or financial interest.

CTI 2 - Transactions executed for the Proprietary Account of a 

clearing member or non-clearing member firm.

CTI 3 - Transactions where an individual member or Authorized 

Trader executes for the personal account of another individual 

member, for an account the other individual member controls or for 

an Account in which the other individual member has ownership or 

financial interest.

CTI 4 - Any Transaction not meeting the definition of CTI 1, 2 or 3.

Rule 703 Records of Trading Activity on Tera and Related Transactions

As required by CFTC Regulation 37.404, each Participant, Customer or Account Holder 

of a Participant, or Authorized Trader must create and maintain records of its trading 

activity on Tera, including records of its activity in the commodity underlying any 

Instrument, activity in any index or instrument used as a reference price, and activity on 

related markets and must make such records available, upon request, to Tera, its agents, 

and the CFTC.

Rule 704 Reporting to SDR
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(a) Consistent with CFTC Regulation Part 43 and Appendix A to Part 43, and 

CFTC Regulation Part 45 Appendix 1, Tera will report swap transaction 

and pricing data, including the actual notional or principal amount of each 

Trade and an actual description of the underlying asset, and all Required 

Swap Creation Data, to a registered SDR of Tera’s choice as soon as 

technologically practicable after a publicly reportable swap transaction, 

including any Block Trade, has been executed on or pursuant to the Rules 

of TeraExchange. In reporting data to an SDR, Tera shall use the facilities, 

methods, or data standards provided or required by the relevant SDR to 

which Tera is reporting.

Tera will report swap transaction and pricing data and Required 

Swap Creation Data for a Trade to a single SDR. Thereafter, all 

Required Swap Creation Data and all required swap continuation 

data reported for the Trade shall be reported to that same SDR (or 

its successor in the event that it ceases to operate). As soon as 

technologically practicable after execution, Tera shall transmit to 

both counterparties to the Trade, and to the Derivatives Clearing 

Organization, if any, that will clear the Trade, both:

(1) The identity of the SDR to which the swap transaction and 

pricing data is reported by Tera; and

(2) The Unique Swap Identifier for the swap, created pursuant 

to CFTC Regulation 45.5.

Tera shall, to the nearest second, timestamp the receipt of swap 

transaction and pricing data from a Reporting Counterparty and the 

transmittal of such data to an SDR for public dissemination. Records 

of all such timestamps will be maintained for a period of five years 

from the execution of the publicly reportable swap transaction.

Tera shall not disclose swap transaction or pricing data for any Trade 

executed on or pursuant to the Rules of TeraExchange prior to public 

dissemination of such data by an SDR in accordance with CFTC 

Regulations.

TeraExchange reports such information to the following SDRs:

Interest Rate Swaps CME; DTCC

Non-Deliverable and Cash Settled 

Forwards

CME

(b) Each Participant and Authorized Trader:
- 68 -

Authorizes Tera to send swap transaction pricing data and Required 

Swap Creation Data on its behalf and, if applicable, on behalf of its 

Customers and Account Holders to the relevant SDR as per this Rule 

704 and further agrees to take all such actions as are deemed 

necessary or required by such SDR to facilitate or confirm such 

authorization; and

Consents to the maintenance of such swap transaction and pricing 

data and Required Swap Creation Data by the relevant SDR 

designated in accordance with Rule 704.

(c) Each Participant or Authorized Trader that enters an Order or RFQ into 

TeraExchange must provide Tera with sufficient information to enable it to 

report all Required Swap Creation Data as provided in CFTC Regulation 

Part 45, including without limitation:

The Legal Entity Identifier of such Participant or Authorized Trader;

A yes/no indication of whether such Participant or Authorized 

Trader is a Swap Dealer with respect to the product with respect to 

which the Order or RFQ is placed;

A yes/no indication of whether such Participant or Authorized 

Trader is a Major Swap Participant with respect to the product with 

respect to which the Order or RFQ is placed;

A yes/no indication of whether such Participant or Authorized 

Trader is a Financial Entity as defined in CEA Section (2)(h)(7)(C);

A yes/no indication of whether the Participant or Authorized Trader 

is a U.S. Person;

If applicable, an indication that the Participant or Authorized Trader 

will elect the end-user clearing requirement exception in CEA 

Section (2)(h)(7) for any Trade resulting from the Order or RFQ; 

and

If the Trade will be allocated:

(1) An indication that the Trade will be allocated.

(2) The Legal Entity Identifier of the agent.

(3) An indication of whether the Trade is a post-allocation.

(4) If the Trade is a post-allocation swap, the Unique Swap 

Identifier of the original transaction between the Reporting 

Counterparty and the agent.
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(A) Post allocation swaps shall be respectively effected 

and reported in accordance with the rules of the 

applicable Clearing House and SDR and in 

accordance with Parts 43 and 45 of the CFTC 

Regulations. 

(B) In the course of a trade practice surveillance or 

market surveillance investigation into any trading 

activity involving post-trade allocations, 

TeraExchange will ascertain whether a post-trade 

allocation was made, and if so, Tera will request, 

obtain and review the post-trade allocation 

information as part of its investigation. 

TeraExchange is relying on the relief provided in 

CFTC NAL 17-54 with regard to certain audit trail 

requirements related to post-trade allocations. CFTC 

NAL 17-54 expires on November 15, 2020.

(d) Tera shall use the unique LEI for each counterparty to a Trade executed on 

or pursuant to the Tera Rules in all of its recordkeeping and all of its swap 

data reporting pursuant to CFTC Regulation Part 45.

(e) Tera shall use the Unique Product Identifier according to the system 

designated by the CFTC, or if no such system has been designated, the 

internal product identifier or product description used by the SDR to which 

a Trade is reported, in all of its records and all of its swap data reporting 

pursuant to Regulation 45.

(f) Tera shall include the Unique Swap Identifier for a swap in all of its records 

and all of its swap data reporting concerning a Trade in that swap, from the 

time it creates or receives the Unique Swap Identifier, throughout the 

existence of the Trade and for as long as records are required by the CEA 

or CFTC Regulations to be kept by Tera concerning the Trade, regardless 

of any life cycle events or any changes to state data concerning the trade, 

including, without limitation, any changes with respect to counterparties to 

or ownership of the Trade.

Tera generates and assigns a Unique Swap Identifier for each swap 

executed on or pursuant to its Rules at, or as soon as technologically 

practicable following, the time of execution of the swap, and prior 

to the reporting of Required Swap Creation Data. The Unique Swap 

Identifier is a single data field combining (i) the unique 

alphanumeric code assigned to Tera by the CFTC for the purpose of 

identifying Tera with respect to Unique Swap Identifier creation and 

(ii) an alphanumeric code generated and assigned to the swap by the 

automated systems of TeraExchange, which shall be unique with 

respect to all such codes generated and assigned by TeraExchange.
- 70 -

In compliance with CFTC Regulation 45.5(a)(2), Tera will transmit 

the Unique Swap Identifier electronically as follows:

(1) To the SDR to which Tera reports Required Swap Creation 

Data following a Trade, as part of that report;

(2) To each counterparty to a Trade, as soon as technologically 

practicable after execution of the Trade;

(3) To the Derivatives Clearing Organization, if any, to which 

the Trade is submitted for clearing, as part of the Required 

Swap Creation Data transmitted to the DCO for clearing 

purposes.

(g) The Reporting Counterparty for each swap shall be established pursuant to 

the CFTC Regulation 45.8 and in accordance with compliant industry 

practice. If both counterparties to a swap are equal in the hierarchy, the 

Reporting Counterparty for such swap shall be determined in accordance 

with ISDA’s “Dodd Frank Act – Swap Transaction Reporting Party 

Requirements” document dated July 15, 2013, summarized as follows:

For rates asset class, the Reporting Counterparty will be determined 

in accordance with the ISDA Dodd-Frank Act – Swap Transaction 

Reporting Party Requirements, the relevant portion of which is 

attached to this Rulebook as Annex A;

For credit asset class, the Reporting Counterparty is the seller of 

protection;

For foreign exchange, commodity and equity asset class: the 

Reporting Counterparty is the liquidity provider. A “liquidity 

provider” is a Person that: (i) for RFQ, provided the responses to an 

RFQ that led to the reported Trade; or (ii) for an Order Book, 

provided the first quote that led to the reported Trade.

(h) Correcting Data Reported to SDR 

If a Reporting Counterparty to a Trade becomes aware of an error or 

omission in the swap transaction and pricing data or the Required 

Swap Creation Data which was reported by TeraExchange to an 

SDR with respect to such Trade, either through its own initiative or 

through notice by the other party to the swap, the Reporting 

Counterparty shall promptly notify Tera of the need to correct the 

original data transmitted to the SDR and submit corrected data to 

TeraExchange.

If TeraExchange becomes aware of an error or omission in the swap 

transaction and pricing data or the Required Swap Creation Data
- 71 -

reported by TeraExchange to an SDR, any other registered entity or 

swap counterparty, or to the CFTC with respect to a Trade, or 

receives notification from the Reporting Counterparty of an error or 

omission, TeraExchange shall promptly report such errors or 

omissions to the SDR, any other registered entity or swap 

counterparty, or to the CFTC and submit corrected data to the same 

SDR, any other registered entity or swap counterparty, or to the 

CFTC as soon as technologically practicable after discovery of any 

such error or omission.

Tera shall not submit or agree to submit a cancellation or correction 

for the purpose of re-reporting swap transaction and pricing data in 

order to gain or extend a delay in public dissemination of accurate 

swap transaction or pricing data or to otherwise evade the reporting 

requirements of Part 43 of CFTC Regulations.

(i) In the event that a registered SDR is unable to receive and hold in queue 

swap transaction and pricing data, Tera shall halt communications with the 

SDR until notice is received that the SDR has resumed normal operations. 

Upon receipt of such notice Tera shall immediately resume reporting of 

swap transaction and pricing data.

Rule 705 Enforceability

(a) Transactions entered pursuant to the Rules shall not be void, voidable, 

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

result of:

A violation by Tera of the provisions of section 5h of the CEA or 

any CFTC regulations; or

Any CFTC proceeding that:

(1) Alters or supplements a rule, term or condition under section 

8a(7) or which declares an emergency under section 8a(9) of 

the CEA;

(2) Requires Tera to alter or supplement a specific term or 

condition, trading rule or procedure; or

(3) Requires Tera to adopt a specific term or condition, trading 

rule or procedure, or to take or refrain from taking a specific 

action.

(b) Tera shall provide Participants with a Written record of all Principal 

Economic Terms of each Transaction, which shall legally supersede any 

previous agreement and serve as confirmation of all terms of the 

Transaction. Such confirmation shall occur promptly at the time of 
- 72 -

execution, provided, however, that Tera may omit from such confirmation 

specific identifiers for accounts included in Bunched Orders meeting the

applicable requirements of section 1.35(b)(5) of the CEA.

CHAPTER 8 DISCIPLINARY RULES

Rule 801 General

(a) All Participants, Authorized Traders, Supervised Persons, Account Holders 

or Customers of Participants, Clearing Firms, Executing Firms, and any 

other Person using the Trader ID or login credentials linked to a Participant,

shall be subject to Tera’s jurisdiction and disciplinary rules and as such must 

cooperate with Tera and its agents in any inquiry, investigation, audit, 

examination or proceeding relating to Transactions entered on Tera on its 

behalf. 

(b) All Participants are subject to this Chapter 8 if they, or with respect to a 

Participant, any other Person using any Trader ID and/or login credentials 

linked to the Participant, are alleged to have violated, to have aided and 

abetted a violation, to be violating, or to be about to violate, any Tera Rule 

or any provision of Applicable Law for which Tera possesses disciplinary 

jurisdiction.

(c) Tera, through the Compliance Department, the Disciplinary Panels and the 

Appeals Panel, will conduct inquiries, investigations, disciplinary and 

appeals proceedings, summary impositions of fines, summary suspensions 

or other summary actions in accordance with this Chapter 8.

(d) No Director will interfere with or attempt to influence the process or 

resolution of any inquiry, investigation, disciplinary or appeals proceeding 

and summary imposition of fines, summary suspension or other summary 

action, except to the extent provided under the Tera Rules with respect to a 

proceeding in which the Director is a member of the relevant panel.

(e) Any Participant may be represented by counsel during any inquiry, 

investigation, disciplinary or appeals proceeding, summary imposition of 

fines, summary suspension or other summary actions pursuant to this 

Chapter 8.

(f) Pursuant to this Chapter 8, Tera may hold a Participant liable for, and 

impose sanctions against such Participant, for such Participant’s own acts 

and omissions that constitute a violation as well as for the acts and 

omissions of each

Authorized Trader of such Participant;

Other Supervised Person of such Participant;
- 73 -

Other Person using the Trader ID or login credentials linked to the 

Participant, or

Other agent or representative of such Participant, in each case, that 

constitute a violation as if such violation were that of the Participant.

(g) Pursuant to this Chapter 8, Tera may review an appeal by any applicant of 

Tera’s decision to deny or otherwise limit Trading Privileges of such 

applicant pursuant to the Tera Rules; provided, however, that any such 

decision by Tera to deny or otherwise limit applicant’s Trading Privileges 

shall continue in effect during such review.

(h) A Person subject to a disciplinary or appeals proceeding (and any counsel 

or representative of such Person) and the Compliance Department and/or 

the Review Panel (and any counsel or representative of the Compliance 

Department or Review Panel) shall not knowingly make or cause to be 

made an ex parte communication relevant to the merits of a disciplinary or 

appeals proceeding to any member of the Hearing Panel hearing such 

proceeding. Members of a Hearing Panel shall not knowingly make or cause 

to be made an ex parte communication relevant to the merits of a 

disciplinary or appeals proceeding to any Person subject to such proceeding 

(and any counsel or representative of such Person) and the Compliance 

Department (and any counsel or representative of the Compliance 

Department) or the Review Panel (and any counsel or representative of the 

Review Panel). Any Person who receives, makes or learns of any 

communication which is prohibited by this rule shall promptly give notice 

of such communication and any response thereto to the Compliance 

Department and all parties to the proceeding to which the communication 

relates. A Person shall not be deemed to have violated this rule if the Person 

refuses an attempted communication concerning the merits of a proceeding 

as soon as it becomes apparent the communication concerns the merits.

Rule 802 Inquiries and Investigations

(a) The Compliance Department will investigate any matter within Tera’s 

disciplinary jurisdiction upon receipt of a request from CFTC staff or receipt 

of information that indicates a reasonable basis for finding that a violation 

of the Rules may have occurred or will occur. 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 Tera. The Compliance Department’s investigation must be 

completed within 12 months of the date when the Compliance Department 

commenced its investigation unless there are mitigating factors that may 

reasonably justify an investigation taking longer than 12 months, including 

without limitation the complexity of the investigation, the number of 

Participants or individuals involved as potential wrongdoers, the number of 
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potential violations to be investigated, and the volume of documents and 

data to be examined and analyzed by the Compliance Department.

(b) The Compliance Department has the authority to:

Initiate and conduct inquiries and investigations;

Prepare investigative reports and make recommendations 

concerning initiating disciplinary proceedings;

Prosecute alleged violations within Tera’s disciplinary jurisdiction; 

and

Represent Tera on summary imposition of fines, summary 

suspension or other summary action.

(c) Each Person subject to Tera’s jurisdiction:

Is obligated, upon reasonable notice, to appear and testify and 

respond in Writing to interrogatories required by the Compliance 

Department in connection with:

(1) Any Tera Rule;

(2) Any inquiry or investigation; or

(3) Any preparation by and presentation during a disciplinary or 

appeals proceeding, summary imposition of fines, summary 

suspension or other summary action by Tera.

Is obligated, upon reasonable notice, to produce books, records, 

papers, documents or other tangible evidence in its, his or her 

possession, custody or control required by the Compliance 

Department in connection with:

(1) Any Tera Rule;

(2) Any inquiry or investigation; or

(3) Any preparation by and presentation during a disciplinary or 

appeals proceeding, summary imposition of fines, summary 

suspension or other summary action by Tera; and

May not impede or delay any inquiry, investigation, disciplinary or 

appeals proceeding, summary imposition of fines, summary 

suspension or other summary action.

Rule 803 Reports of Investigations
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(a) 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 Tera’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.

(b) 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, staff analysis, conclusions and the 

recommendation of the Compliance Department. The report must also 

include the Participant’s disciplinary history at Tera, including copies of the 

warning letters. For each potential respondent, the Compliance Department 

will recommend either:

Closing the investigation without further action;

Summary action;

Resolving the investigation through an informal disposition, 

including the issuance of a warning letter; or

Initiating disciplinary proceedings.

(c) An informal disposition (including the issuance of a warning letter) will not 

constitute a finding of a violation or a sanction.

Rule 804 Opportunity to Respond to Investigatory Report

(a) After completing its investigation report, the Compliance Department may, 

upon approval of the Chief Compliance Officer, notify each potential 

respondent that the Compliance Department has recommended formal 

disciplinary charges against the potential respondent.

(b) The Compliance Department may allow a potential respondent to propose 

a settlement of the matter or 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. The potential respondent shall 

submit such Written statement within the time limit established by the 

Compliance Department.

Rule 805 Review of Investigative Reports

(a) The Chief Compliance Officer may, at his or her discretion, convene a 

Review Panel to review promptly each completed investigation report to 

determine whether (i) a reasonable basis exists for finding that a violation 

of Tera Rules within Tera’s jurisdiction has occurred or is about to occur, 
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and (ii) commencing disciplinary proceedings in respect of such potential 

violation is warranted.

(b) If the Review Panel determines that additional investigation or evidence is 

needed to decide whether a reasonable basis exists to find that a violation 

of Tera Rules within the Tera’s jurisdiction has occurred or is about to 

occur, the Review Panel will promptly direct the Compliance Department 

to conduct further investigation.

(c) Within 30 days of receipt of a completed investigation report, or as soon as 

commercially reasonable, the Review Panel will determine for each 

potential respondent whether to authorize one of the following actions:

The delivery of a Notice of Charges and the commencement of 

disciplinary proceedings because a reasonable basis exists to believe 

that a violation Tera Rules within the Tera’s jurisdiction has 

occurred or is about to occur and adjudication is warranted;

The informal disposition of the investigation (by issuing a warning 

letter as more fully discussed in Rule 806) because disciplinary 

proceedings are unwarranted, in which case the Review Panel shall 

provide a Written explanation which must set forth the facts and 

analysis supporting the decision to the Compliance Department; or

The closing of the investigation without any action because no 

reasonable basis exists to believe that a violation of Tera Rules 

within the Tera’s jurisdiction has occurred or is about to occur in 

which case the Review Panel shall provide a Written explanation 

including the facts and analysis supporting the decision to the 

Compliance Department.

(d) The Review Panel shall be comprised of three individuals, at least one of 

whom would qualify to serve as a Public Director in accordance with Rule 

205(h). In forming a Review Panel, the Chief Compliance Officer shall 

draw panel members from the individuals appointed by the Board as 

potential members of Review Panels. No group or class of Participants may 

dominate or exercise disproportionate influence on a Review Panel, and no 

member of the Review Panel may participate in deliberations or voting on 

any matter in which he or she has a material conflict of interest in respect to 

the proceedings as defined in Rule 208(b). A Review Panel may not include 

any person involved in adjudicating any other stage of the same proceeding. 

If a vacancy shall occur on a Review Panel after it has begun its 

proceedings, the remaining members shall complete consideration and 

disposition of the matter. Once a Review Panel has determined the matter 

for which it was appointed and has notified the Chief Compliance Officer 

in writing of its decision, it shall be dissolved automatically. The Regulatory 
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Oversight Committee may, at any time, remove any member of a Review 

Panel for cause.

Rule 806 Warning Letters

(a) Tera authorizes compliance staff to issue a warning letter to a person or 

entity under investigation or to recommend that a disciplinary committee 

take such an action. A warning letter issued in accordance with this Rule is 

not a penalty or an indication that a finding of a violation has been made. A 

copy of a warning letter issued by compliance staff must be included in the 

investigation report. No more than one warning letter for the same potential 

violation may be issued to the same person or entity during a rolling 12-

month period.

Rule 807 Notice of Charges

(a) If the Review Panel authorizes disciplinary proceedings pursuant to Rule 

805(c)(i), the Review Panel will prepare, and serve in accordance with Rule 

808, a Notice of Charges.

(b) A Notice of Charges will:

State the acts, practices or conduct that the respondent is alleged to 

have engaged in;

State the Tera Rule or provision of Applicable Law alleged to have 

been violated or about to be violated;

State the proposed sanctions;

Advise the respondent of its right to a hearing;

State the period of time within which the respondent can request a 

hearing on the Notice of Charges, which will not be less than 20 

days after service of the Notice of Charges;

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;

Advise the respondent that any allegation in the Notice of Charges 

that is not expressly denied will be deemed to be admitted; and

Advise the respondent of its right to be represented by legal counsel 

or any other representative of its choosing in all succeeding stages 

of the disciplinary process.

Rule 808 Service of Notice of Charges
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Any Notice of Charges or other documents contemplated to be served pursuant to this 

Chapter 8 may be served (and service shall be deemed complete) upon the respondent either 

personally or by leaving the same at his or her place of business, or by tracked delivery via 

reputable overnight courier, 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 Tera.

Rule 809 Answer to Notice of Charges

(a) If the respondent determines to answer a Notice of Charges, the respondent 

must file answers within 20 days after being served with such notice, or 

within such other time period determined appropriate by the Review Panel.

(b) To answer a Notice of Charges, the respondent must in Writing:

Specify the allegations that the respondent denies or admits;

Specify the allegations that the respondent does not have sufficient 

information to either deny or admit;

Specify any specific facts that contradict the Notice of Charges;

Specify any affirmative defenses to the Notice of Charges; and

Sign and serve the answer on the Review Panel.

(c) 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 statement of a lack of 

sufficient information shall have the effect of a denial of an allegation. A 

general denial by the respondent, without more, will not satisfy the 

requirements of paragraph (b) above.

Rule 810 Admission or Failure to Deny Charges

(a) If respondent admits or fails to deny any of the charges, a Hearing Panel 

may find that the violations alleged in the Notice of Charges for which the 

respondent admitted or failed to deny any of the charges have been 

committed. The Hearing Panel then must take the following action:

Impose a sanction for each violation found to have been committed;

Notify the respondent in Writing of any sanction to be imposed and 

advise the respondent that it may request a hearing on such sanction 

within a specified period of time.
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(b) If a respondent fails to request a hearing within 20 days as specified in the 

notice, the respondent will be deemed to have accepted the sanction.

Rule 811 Denial of Charges and Right to a Hearing

In the event a respondent denies charges, such respondent is entitled to a hearing on the 

charge that is denied. Except for good cause, the hearing must concern only those charges 

denied for which a hearing has been requested.

Rule 812 Settlements

(a) A respondent or potential respondent may at any time after the investigation 

report is complete 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 Review Panel. 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 Tera over it and over the 

subject matter of the proceedings and consent to the entry of the findings 

and sanctions imposed.

(b) 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 Chief Compliance Officer with a recommendation 

on whether to accept or reject the offer. Any preliminary determination by 

the Chief Compliance Officer to accept the offer shall be submitted for 

review by the Review Panel. If the Review Panel agrees, then the Chief 

Compliance Officer shall conditionally accept an offer of settlement, 

without alteration unless the respondent agrees, and that the settlement will 

become final upon the expiration of 20 days after an order of the disciplinary 

proceedings consistent with the terms of the offer of settlement is served on 

the respondent.

(c) If an offer of settlement is accepted, the Review Panel must issue a Written 

decision specifying the rule violations it has reason to believe were 

committed, including the basis or reasons for the panel’s conclusions, and 

any sanction to be imposed, which must include full Participant restitution 

where Participant harm is demonstrated. If an offer of settlement is accepted 

without the agreement of the Compliance Department, the decision must 

adequately support the Review Panel’s acceptance of the settlement. Where 

applicable, the decision must also include a statement that the respondent 

has accepted the sanctions imposed without either admitting or denying the 

rule violations. Further, if the settlement is accepted 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 under the Tera Rules.
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(d) If the offer of settlement of a respondent or potential respondent is not 

accepted by agreement between the Chief Compliance Officer and the 

Review Panel, 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 disciplinary proceedings.

Rule 813 Hearing Panel

(a) The Chief Compliance Officer will appoint a Hearing Panel to conduct 

hearings in connection with any disciplinary proceedings authorized by the 

Chief Compliance Officer or a Review Panel to make findings and impose 

sanctions pursuant to this Chapter 8. 

(b) The Hearing Panel shall be comprised of three individuals, at least one of 

whom would qualify to serve as a Public Director in accordance with Rule 

205(h). Members shall be appointed by the Board upon the recommendation 

of the Chief Compliance Officer. The chairman of the Hearing Panel shall 

be appointed by the Chief Compliance Officer. No group or class of 

Participants may dominate or exercise disproportionate influence on a 

Hearing Panel, and no member of the Hearing Panel may participate in 

deliberations or voting on any matter in which he or she has a material 

conflict of interest in respect to the proceedings as defined in Rule 208(b). 

A Hearing Panel may not include any members of Tera’s compliance staff 

or any person involved in adjudicating any other stage of the same 

proceeding. If a vacancy shall occur on a Hearing Panel after it has begun 

its proceedings, the remaining members shall complete consideration and 

disposition of the matter. Once a Hearing Panel has determined the matter 

for which it was appointed and has notified the Board in writing of its 

decision, it shall be dissolved automatically. The Board may, at any time, 

remove any member of a Disciplinary Panel for cause. 

(c) Any of the functions of Tera or the Review or Hearing Panel under this 

Chapter 8 may be performed by an outsourced regulatory service provider 

pursuant to a delegation of such functions by Tera, and references to the 

Hearing Panel or the Compliance Department, as appropriate, shall be 

deemed to be references to such third party service provider. Nevertheless, 

Tera will retain exclusive authority in all substantive decisions, including, 

but not limited to, denials of access to the Tera System for disciplinary 

reasons. Tera will document any instances where its actions differ from 

those recommended by any outsourced regulatory service provider.

(d) Within ten days of being notified of the appointment of a Hearing Panel, a

respondent may seek to disqualify any individual on the Hearing Panel for 

the reasons identified in Tera Rules or for any other reasonable grounds, by 
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serving Written notice on the Chief Compliance Officer and providing a 

copy thereof to the Hearing Panel. By not timely filing a request for 

disqualification, the respondent will be deemed to have waived any 

objection to the composition of a Hearing Panel. The President of Tera 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.

Rule 814 Convening Hearings of Disciplinary Proceedings

(a) All disciplinary proceedings (except for summary impositions of fines 

pursuant to Rule 821) will be conducted at a hearing before the Hearing 

Panel. A fair hearing will be conducted privately and confidentially. 

Notwithstanding the confidentiality of hearings, the Hearing 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.

(b) After reasonable notice to each respondent, the Hearing Panel will promptly 

convene a hearing to conduct the disciplinary proceedings with respect to 

such respondent. Parties to a disciplinary proceeding include each 

respondent and the Compliance Department.

(c) The chairman of the Hearing Panel may continue, adjourn or otherwise 

conduct the hearing, as he or she may deem appropriate. The chairman of 

the Hearing 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 

Hearing Panel will not be bound by any evidentiary or procedural rules or 

law; nevertheless, the procedures for the hearing may not be so informal as 

to deny a fair hearing. Once admitted during the hearing, the Hearing Panel 

may consider, and attach the weight it believes appropriate to, evidence or 

other materials.

(d) Except for procedural and evidentiary matters decided by the chairman of 

the Hearing Panel pursuant to paragraph (c) above and Rule 816, unless 

each respondent otherwise consents, the entire Hearing Panel must be 

present during the entire hearing and any related, deliberations.

Rule 815 Respondent Review of Evidence

(a) 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 Tera that the Compliance Department will use to support the allegations 

and proposed sanctions in the Notice of Charges or which the chairman of 

the Hearing Panel deems relevant to the disciplinary proceedings. 

Notwithstanding the foregoing, no respondent will have the right to review, 
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and Tera will have no obligation to disclose, any information protected by 

attorney-client privilege.

(b) 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.

(c) Notwithstanding anything in paragraph (b) above to the contrary, the 

Compliance Department:

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

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.

(d) For purposes of this Rule 815, information that could adversely affect 

competitive positions include positions in Instruments 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.

Rule 816 Conducting Hearings of Disciplinary Proceedings

(a) 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 Hearing Panel. If a 

respondent has timely filed an answer to the Notice of Charges in 

accordance with Rule 809, the respondent is entitled to attend and 

participate in the hearing.

(b) At a hearing conducted in connection with any disciplinary proceedings, the 

Hearing Panel or the Compliance Department and each respondent may:

Present evidence and facts determined relevant and admissible by 

the chairman of the Hearing Panel;

Call and examine witnesses; and

Cross-examine witnesses called by other parties.
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(c) Any person within Tera’s jurisdiction who is called as a witness must 

participate in the hearing and produce evidence. Tera will make reasonable 

efforts to secure the presence of all other persons called as witnesses whose 

testimony would be relevant.

(d) 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 Hearing 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 Hearing Panel 

determines that the respondent had a compelling reason for failing to timely 

file an answer. If the Hearing Panel determines that the respondent had a 

compelling reason for failing to timely file an answer, the Hearing Panel 

will adjourn the hearing and direct the respondent to promptly file a Written 

answer in accordance with Rule 809.

(e) Any Person entitled, or required or called upon, to attend a hearing before a 

Hearing 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 proceedings. Tera will require 

all Participants that are called as witnesses to appear at the hearing and 

produce evidence. Tera will make reasonable efforts to secure the presence 

of all other Persons called as witnesses whose testimony would be relevant.

(f) If during any disciplinary proceedings the Hearing Panel determines that a 

reasonable basis exists to believe that the respondent violated or is about to 

violate a Tera Rule or a provision of Applicable Law other than the 

violations alleged in the Notice of Charges, the Hearing Panel may consider 

those apparent violations after providing the respondent with an opportunity 

to answer the additional allegations in accordance with Rule 809. In 

connection with considering apparent violations pursuant to this paragraph 

(f), the Hearing Panel may request that the Compliance Department provide 

the Hearing Panel with any additional information.

(g) The Hearing Panel may summarily impose sanctions on any Participant that 

impedes or delays the progress of a hearing.

(h) Tera may arrange for any hearing conducted in connection with disciplinary 

proceedings to be recorded 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.
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(i) If the respondent has requested a hearing, a record of the hearing will be 

made and will become a part of the record of the proceeding. The record 

will be one that is capable of being accurately transcribed; however, it will 

not be transcribed unless the decision of the Hearing Panel is appealed 

pursuant to the Rules of Tera, the decision is reviewed by the CFTC 

pursuant to Section 8(c) of the CEA or Part 9 of the CFTC Regulations, or 

the transcript is requested by the CFTC or the respondent. The cost of 

transcribing the record of the hearing will be borne by the respondent who 

requests the transcript or whose application for the CFTC review of the 

disciplinary action has been granted. In all other instances, the cost of 

transcribing the record will be borne by Tera.

(j) No interlocutory appeals of rulings of any Disciplinary Panel or chairman 

of the Disciplinary Panel are permitted.

(k) Sanctions may be summarily imposed upon any Person within Tera’s 

jurisdiction whose actions impede the progress of a hearing.

Rule 817 Decision of Hearing Panel

(a) As promptly as reasonable following a hearing, the Hearing 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 Hearing Panel will constitute the decision of the Hearing 

Panel.

(b) Within thirty days of the final decision of the Hearing Panel Tera will serve 

a copy of the order of the disciplinary proceedings on the respondent, the 

Compliance Department and provide notice to the CFTC. The order will 

include:

The Notice of Charges or summary of the charges;

The answer, if any, or a summary of the answer;

A brief summary of the evidence introduced at the hearing;

Findings of fact and conclusions concerning each charge, including 

an explanation of the evidentiary and other basis for such findings 

and conclusions with respect to each charge;

The imposition of sanctions, if any, and the effective date of each 

sanction; and

Notice of the respondent’s right to appeal pursuant to Rule 820.
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(c) The order of the disciplinary proceedings will become final upon the 

expiration of 20 days after the order is served on the respondent and a copy 

thereof is provided to the Compliance Department and the CFTC.

(d) Promptly following a hearing conducted in accordance with the Tera Rules, 

the Hearing Panel shall render a written decision based upon the weight of 

the evidence contained in the record of the proceeding and shall provide a 

copy to the respondent. The decision shall include:

The Notice of Charges or a summary of the charges;

The answer, if any, or a summary of the answer;

A summary of the evidence produced at the hearing or, where 

appropriate, incorporation by reference of the investigation report;

A statement of findings and conclusions with respect to each charge, 

and a complete explanation of the evidentiary and other basis for 

such findings and conclusions with respect to each charge;

An indication of each specific rule that the respondent was found to 

have violated; and

A declaration of all sanctions imposed against the respondent, 

including the basis for such sanctions and the effective date of such 

sanctions.

Rule 818 Sanctions

(a) After notice and opportunity for hearing in accordance with the Tera Rules, 

Tera will impose sanctions if any Participant or Person is found to have 

violated or to have attempted to violate a Tera Rule or provision of 

Applicable Law for which Tera possesses disciplinary jurisdiction. All 

disciplinary sanctions imposed shall be commensurate with the violations 

committed and shall be clearly sufficient to deter recidivism or similar 

violations by other market participants. All disciplinary sanctions, including 

sanctions imposed pursuant to an accepted settlement offer, shall take into 

account the respondent’s disciplinary history. In the event of demonstrated 

customer harm, any sanction must also include full customer restitution, 

except where the amount of restitution or to whom it should be provided 

cannot be reasonably determined. Tera may impose one or more of the 

following sanctions or remedies:

Censure;

Limitation on Trading Privileges or other activities, functions or 

operations;
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Suspension of Trading Privileges;

Fine (subject to paragraph (b) below);

Restitution or disgorgement; or

Termination of Trading Privileges. 

(b) Tera may impose a fine of up to $100,000, or such other amount Tera 

determines in its sole discretion to be equitable and just under the 

circumstances, for each violation of a Tera Rule. If a fine or other amount 

is not paid within 30 days of the date that it becomes payable, then interest 

will accrue on the sum from the date that it became payable at the quoted 

prime rate plus three percent. Tera has sole discretion to select the bank on 

whose quotations to base the prime rate. Each Participant will be 

responsible for paying any fine or other amount imposed on, but not paid 

by, any of its Authorized Traders or Supervised Persons, or any Participant 

acting on its behalf.

Rule 819 Costs

(a) 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.

(b) The Disciplinary Panel may only award costs against Tera if the Panel 

concludes that Tera 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 Tera 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.

(c) The Disciplinary Panel may determine the amounts and allocation of costs 

in any manner it may deem appropriate. Tera or the respondent will pay any 

costs ordered to be paid by it by the Disciplinary Panel within 30 Business 

Days of written notice of the amount imposed by the Disciplinary Panel.

Rule 820 Right to Appeal

(a) Each respondent found by the Disciplinary Panel to have violated (or, in the 

case of a Participant, whose Authorized Trader, Supervised Person or other 

Person using its Participant ID was found to have violated) a Rule or who 

is subject to any summary fine imposed pursuant to Rule 821 or any 
- 87 -

summary action imposed pursuant to Rule 822 may appeal the decision 

within 20 days of receiving the order of the Disciplinary Panel or the notice 

of summary action, as the case may be, by filing a notice of appeal with the 

Chief Compliance Officer. 

(b) Tera may appeal all or any part of a decision of the Disciplinary Panel, 

including any sanctions that may or may not have been imposed by the 

Disciplinary Panel, within 20 days of receiving the order of the Disciplinary 

Panel, by filing a notice of appeal with the Chief Compliance Officer. 

(c) While an appeal is pending, the effect of the order of the Disciplinary Panel 

or the summary action (including any sanctions, remedies or costs imposed 

thereby) shall be suspended. 

(d) The notice of appeal must state in writing the grounds for appeal, including 

the findings of fact, conclusions or sanctions to which the appellant objects. 

An appellant may appeal the order of the Disciplinary Panel or any 

summary action on the grounds that:

The order or summary action was arbitrary, capricious, an abuse of

discretion, or not in accordance with these Rules; 

The order or summary action exceeded the authority or jurisdiction 

of the Disciplinary Panel, the Chief Compliance Officer or Tera; 

The order or summary action failed to observe required procedures;

The order or summary action was unsupported by the facts or 

evidence; or

The sanctions, remedies or costs which were imposed were 

inappropriate or unsupported by the record. 

(e) The Chief Compliance Officer will forward copies of any notice of appeal

received by it to all parties to the disciplinary proceeding or summary 

action, as the case may be, except the appellant. On or before the 20th day 

after filing a notice of appeal, the appellant must file with the Chief 

Compliance Officer and serve on Tera 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 its’ 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 on Tera a brief in reply.

(f) In connection with any appeal, Tera will furnish to the Chief Compliance

Officer and to the respondent/appellant a transcript of the hearing, any 
- 88 -

exhibits introduced at the hearing, the notice of appeal and briefs filed to 

support and oppose the appeal. 

(g) No later than 30 days after the last submission filed pursuant to paragraph 

(e) of this Rule 820, the Chief Compliance Officer will appoint an Appeals

Panel to consider and determine the appeal. An Appeals Panel shall be

comprised of three individuals, none of whom shall be a member of the 

Compliance Department or have been a member of any Disciplinary Panel 

involved in the matters on appeal. No member of an Appeals Panel may 

have a material conflict of interest in respect to the proceedings defined in 

Rule 208(b).

(h) Within 10 days of being notified of the appointment of the Appeals Panel, 

an appellant or appellee may seek to disqualify any individual named to the 

Appeals Panel for the reasons identified in these Rules, by serving written 

notice on the Chief Compliance Officer. By not timely filing a request for 

disqualification, the appellant or appellee will be deemed to have waived 

any objection to the composition of the Appeals Panel. The Chief 

Compliance Officer will decide the merits of any request for 

disqualification within his or her sole discretion. Any such decision will be 

final and not subject to appeal. 

(i) The Appeals Panel may hold a hearing to allow parties to present oral 

arguments. Any hearing will be conducted privately and confidentially. 

Notwithstanding the confidentiality of hearings, the Appeals Panel may 

appoint an expert to attend any hearing and assist in the deliberations if such 

individual(s) agree to be subject to appropriate confidentiality agreements. 

In determining procedural and evidentiary matters, the Appeals Panel will 

not be bound by evidentiary or procedural rules or law. 

(j) The Appeals Panel will only consider on appeal the record before the 

Disciplinary Panel or, in the case of a summary action, the record 

considered by the Chief Compliance Officer, the notice of appeal, the briefs 

filed in support and opposition of the appeal, and any oral arguments of the 

parties. The Appeals Panel may only consider new evidence when the 

Appeals Panel is satisfied that good cause exists for why the evidence was 

not introduced during the disciplinary proceeding or when imposing the 

summary action. 

(k) After completing its review, the Appeals Panel may affirm, modify or 

reverse any order of the Disciplinary Panel or summary action under appeal, 

in whole or in part, including increasing, decreasing or eliminating any 

sanction or remedy imposed, imposing any other sanction or remedy 

authorized by these Rules, or remanding the matter to the same or a different 

Disciplinary Panel for further disciplinary proceedings or for 

reconsideration by the Chief Compliance Officer in the case of summary 
- 89 -

action. The Appeals Panel may order a new hearing for good cause or if the 

Appeals Panel deems it appropriate. 

(l) As promptly as reasonably possible following its review, the Appeals Panel 

will issue a written decision on appeal rendering its decision base d on the 

preponderance of the evidence before the Appeals Panel. The decision of 

the Appeals Panel will include a statement of findings of fact and 

conclusions for each finding, sanction, remedy and cost reviewed on appeal, 

including each specific Rule and provision of Applicable Law that the 

respondent is found to have violated, if any, and the imposition of sanctions, 

remedies and costs, if any, and the effective date of each sanction, remedy 

or cost. 

(m) The Appeals Panel’s written order on appeal (including findings of fact and 

conclusions and the imposition of sanctions, remedies and costs, and the 

effective date of any sanction, remedy cost) will be the final action of Tera

and will not be subject to appeal within Tera. 

Rule 821 Summary Imposition of Fines

(a) The Chief Compliance Officer may summarily impose a fine against a 

Participant for failing:

To make timely payments of original or variation margin, fees, cost, 

charges or fines to Tera;

To make timely and accurate submissions to Tera of notices, reports 

or other information required by the Tera Rules; or

To keep any books and records required by the Tera Rules.

(b) The Compliance Department, within thirty days of a decision to summarily 

impose a fine against a Participant and acting on behalf of the Chief 

Compliance Officer, will provide Written notice of any fine imposed 

pursuant to this Rule 821 to each Participant subject thereto. The notice will 

specify:

The violations of the Tera Rules for which the fine is being imposed;

The date of the violation for which the fine is being imposed; and

The amount of the fine.

(c) Within 20 days of serving the notice of fine, the Participant must either pay 

or cause the payment of the fine. The fine will become final upon the 

expiration of 20 days after the notice of fine is served on the Participant.
- 90 -

(d) Tera will set the amount of any fines imposed pursuant to this Rule 821, 

with the maximum fine for each violation not to exceed $5,000. Summary 

imposition of fines pursuant to this Rule 821 will not preclude Tera from 

bringing any other action against the Participant.

Rule 822 Summary Suspensions and Other Summary Actions

(a) Notwithstanding anything in the Tera Rules to the contrary, the Chief 

Compliance Officer may, after consultation with the Regulatory Oversight 

Committee, if practicable, summarily suspend, revoke, limit, condition, 

restrict or qualify the Trading Privileges of a Participant, and may take other 

summary action against any Participant in accordance with the Tera Rules; 

provided, however, that the Chief Compliance Officer must reasonably 

believe that the business, conduct or activities of the Participant in question 

is not in the best interests of Tera or the marketplace, including based on 

any of the following:

Statutory disqualification from registration as provided in CEA 

Section 8a(2) or (3);

Non-payment of fees, costs, charges, fines or arbitration awards; or

The reasonable belief that immediate action is necessary to protect 

the public or the best interests of Tera.

(b) Whenever practicable, the Compliance Department, acting on behalf of the 

Chief Compliance Officer, will provide Written notice to the party against 

whom any action in accordance with paragraph (a) shall be taken within 

thirty days of the decision to take summary action. If thirty-day prior notice 

is not practicable, Tera will give notice at the earliest possible opportunity 

to the respondent against whom the action is brought. The Compliance 

Department, acting on behalf of the Chief Compliance Officer, will prepare 

a notice of summary action (which will state the action, the reasons for the 

action, and the effective time, date and duration of the action) and serve the 

notice on such party.

(c) The summary action will become final upon the expiration of 20 days after 

the notice of action is served on the respondent.

(d) At the request of Tera, a respondent against whom a summary action is 

brought pursuant to this Rule 822 must provide books and records over 

which the respondent has access or control and must furnish information to, 

or appear or testify before, Tera or the in connection with the enforcement 

of any Tera Rule.

Rule 823 Rights and Responsibilities after Suspension or Termination
- 91 -

(a) When the Trading Privileges of a Participant are suspended, any such 

suspension will not affect the rights of creditors under the Tera Rules or 

relieve the Participant in question of its Obligations under the Tera Rules 

incurred before the suspension, or to pay any SEF fees, costs, or charges 

incurred during the suspension. Tera may discipline a suspended Participant 

under this Chapter 8 for any violation of a Tera Rule or provision of 

Applicable Law committed by the Participant before, during or after the 

suspension.

(b) When the Trading Privileges of a Participant are terminated, all of its rights 

and Trading Privileges will terminate, except for the right of the Participant 

in question to assert claims against others, as provided in the Tera Rules. 

Any such termination will not affect the rights of creditors under the Tera 

Rules. A terminated Participant may only seek to reinstate its Trading 

Privileges by applying for Trading Privileges pursuant to Rule 302. Tera 

will not consider the application of a terminated Participant if such 

Participant continues to fail to appear at disciplinary or appeals proceedings 

without good cause or continues to impede the progress of disciplinary or 

appeals proceedings.

(c) A suspended or terminated Participant remains subject to the Tera Rules 

and the jurisdiction of Tera for acts and omissions prior to the suspension 

or termination, and must cooperate with Tera and its agents in any inquiry, 

investigation, audit, examination, disciplinary or appeals proceeding, 

summary suspension or other summary action as if the suspended or 

terminated Participant still had Trading Privileges.

(d) In the event of the suspension or revocation of the Trading Privileges of a 

Participant, Tera shall seek to facilitate the transfer of any Accounts held by 

such Participant to other Participants with Trading Privileges.

Rule 824 Notice to the Respondent and the Public

Tera will provide Written notice of disciplinary proceedings to the parties consistent with 

applicable CFTC Regulations. Whenever Tera suspends, expels, fines or otherwise 

disciplines, or denies any Person access, to Tera, Tera will make the disclosures required 

by CFTC Regulations, including the public posting, for five consecutive business days, of 

a notice containing the identity of the party against whom action was taken; a statement of 

the reasons for taking the action and the Rules which have been violated; a statement of 

the conclusions and findings made with regard to each Rule violation; the terms of the 

disciplinary action; and, the effective date of the actions taken. Thereafter, Tera will 

maintain and make available for public inspection a record of the information contained in 

the disciplinary action notice.

CHAPTER 9 MISCELLANEOUS

Rule 901 Anti-Money Laundering and Anti-Terrorism
- 92 -

(a) It is Tera policy:

Not to engage in or knowingly assist any money laundering or other 

illicit business, and

Not to engage in or knowingly assist, or be a conduit for, terrorist 

financing.

(b) Participants will be required to provide sufficient information for Tera to 

complete “know your customer” checks and to conduct restricted list 

searches, including, but not limited to, searches against the Specially 

Designated Nationals (“SDN”) and Blocked Persons list maintained by the 

Office of Foreign Assets Control of the U.S. Department of the Treasury 

(“OFAC list”).

Rule 902 Gifts and Gratuities

Except as permitted in Writing by the Chief Compliance Officer, no SEF Official may 

accept anything of value in excess of $100 from any Participant.

Rule 903 Market Data

(a) All Participants understand and acknowledge that Tera has a proprietary 

interest in:

The price and quantity data from each and every bid, offer, Order, 

Transaction, and modification thereof, including the time at which 

the Transaction was executed by, or submitted to, Tera and the 

Participant ID and the Trader ID under which it was entered (as well 

as other information identifying persons involved in the 

Transaction);

The price and quantity data of each bid and offer submitted to Tera, 

including the time at which such bid or offer was submitted to the 

Tera System;

Any yield curves prepared by Tera;

Any data and information derived from (i), (ii) and (iii) and the 

format and presentation thereof; and

The transmissions and dissemination of the data and information to 

Participants, any publisher of the data or information with whom 

Tera has a written agreement, and any other Persons.

Except as may be required for regulatory or self-regulatory 

purposes, Tera may only use or distribute the aforementioned data 
- 93 -

in a manner that prevents identification of Participants or Account 

Holders, their Accounts or their Participant ID or Trader ID.

(b) Tera may at any time restrict or establish utilization fees in respect of data 

described in Rule 903(a), with respect to all or any Participants, in order to 

safeguard the security or operations of Tera, or to preserve market, integrity, 

fair and orderly trading, or if otherwise in the public interest.

(c) Except as provided for in the Exchange User License Agreement, 

Participants may not distribute, sell or retransmit information displayed on 

the Tera to any third party.

(d) Notwithstanding Rule 903(b) and Rule 903(c), and pursuant to Part 43 and 

Part 45 of the CFTC Regulations, the CFTC will have access to the data 

described in Rule 903(a).

Rule 904 Extension or Waiver of Tera Rules

If necessary and expedient, the Chief Compliance Officer or President may, in his or her 

sole discretion, waive, or extend the time period for performing, any act or acts designated 

by the Tera Rules, but only to the extent such waiver or extension is not inconsistent with 

the CEA or the CFTC Regulations or other applicable regulations.

Rule 905 Governing Law, Jurisdiction and Dispute Resolution

(a) The law of the State of New York governs the Tera Rules regardless of the 

laws that would otherwise apply under applicable choice-of-law principles.

(b) Any dispute between Tera and a Participant arising from or in connection 

with the Tera Rules or use of Tera must be brought to arbitration pursuant 

to subsection (c) of this Rule 905 within one (1) year from the occurrence 

of the event giving rise to the dispute. This Rule 905 shall in no way create 

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

by the Tera Rules.

(c) Any dispute between Tera and a Participant arising from or in connection 

with the Tera Rules will be settled through arbitration conducted by JAMS 

in the JAMS office located in New York, New York, and pursuant to the 

JAMS Commercial Arbitration Rules.

(d) Any failure on the Part of the Participant to arbitrate a case subject to 

arbitration, or the commencement by any such Participant of a suit in any 

court prior to arbitrating a case subject to arbitration, violates these Rules 

and subjects such Participant to disciplinary proceedings pursuant to 

Chapter 8.
- 94 -

(e) In the event that this Rule 905 is held to be unenforceable in connection 

with any dispute or a claim is deemed by a court of competent jurisdiction 

to be not arbitrable:

Exclusive jurisdiction for any such dispute will reside in any state 

or federal court sitting in New York County, New York;

Tera and the Participant involved in the dispute will be presumed to 

have submitted to the personal jurisdiction of any such court;

An action to enforce any judgment or decision of such court may be 

brought in the same court or in any other court with jurisdiction or 

venue; and

All Participants unconditionally and irrevocably waive any and all 

right to trial by jury in connection with any such dispute.

Rule 906 LIMITATION OF LIABILITY, NO WARRANTIES

(a) THE SERVICES (FOR EACH INSTANCE IN THIS RULE 906, 

“SERVICES” SHALL HAVE THE MEANING AS PROVIDED IN THE 

EULA) ARE PROVIDED ON AN “AS IS,” “AS AVAILABLE” BASIS 

WITHOUT WARRANTIES OF ANY KIND AND THERE ARE NO 

EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS 

PROVIDED BY TERA (INCLUDING ITS SUBSIDIARIES AND 

AFFILIATES, AND ANY CONTRACTORS PROVIDING SERVICES 

TO TERA), NOR ANY OF THEIR RESPECTIVE DIRECTORS, 

OFFICERS, EMPLOYEES, MEMBERS, AGENTS, CONSULTANTS, 

AND LICENSORS (THE “DISCLAIMING PARTY” OR 

“DISCLAIMING PARTIES”). EACH OF THE DISCLAIMING 

PARTIES DISCLAIMS ALL WARRANTIES, CONDITIONS, 

GUARANTIES OR REPRESENTATIONS AS TO 

MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR 

OTHER WARRANTIES, CONDITIONS, GUARANTIES OR 

REPRESENTATIONS. PARTICIPANT IS SOLELY RESPONSIBLE 

FOR CONFIRMING THE ACCURACY AND ADEQUACY OF 

INFORMATION, SERVICES OR PROCESSES USED BY IT AND THE 

RESULTANT TRANSACTIONS OR OTHER OUTPUT THEREOF.

(b) EXCEPT FOR ANY INDEMNIFICATION OBLIGATION IN 

ACCORDANCE WITH RULE 206 HEREOF, OR A BREACH OF ITS 

CONFIDENTIALITY OBLIGATIONS SET FORTH IN RULE 208(G) 

AND EXCEPT WHEN THERE HAS BEEN A FINDING OF GROSS 

NEGLIGENCE, FRAUD OR WILLFUL MISCONDUCT 

(HEREINAFTER “LIMITATION EXCEPTIONS”) BY TERA, ITS 

SUBSIDIARIES OR AFFILIATES, IN NO EVENT SHALL TERA 

(INCLUDING ITS SUBSIDIARIES AND AFFILIATES), NOR ANY OF 
- 95 -

THEIR RESPECTIVE DIRECTORS, OFFICERS, MEMBERS, 

EMPLOYEES, AGENTS, CONSULTANTS, AND LICENSOR BE 

LIABLE TO ANY PERSON FOR ANY LOSSES, DAMAGES, COSTS 

OR EXPENSES, INCLUDING BUT NOT LIMITED TO LOSS OF 

PROFITS, LOSS OF USE, SPECIAL, PUNITIVE, INDIRECT, 

INCIDENTAL OR CONSEQUENTIAL DAMAGES, ARISING FROM:

ANY FAULT IN DELIVERY, DELAY, OMISSION, 

SUSPENSION, INTERRUPTION, INACCURACY OR 

TERMINATION, OR ANY OTHER CAUSE, IN CONNECTION 

WITH THE FURNISHING, PERFORMANCE, OPERATION, 

MAINTENANCE, USE OF OR INABILITY TO USE ALL OR 

ANY PART OF THE SERVICES, TERA DATA OR OTHER 

INFORMATION MADE AVAILABLE ON THE SERVICES, OR 

ANY FACILITIES USED TO SUPPORT THE SERVICES, 

INCLUDING WITHOUT LIMITATION ELECTRONIC ORDER 

ENTRY/ORDER DELIVERY, TRANSACTIONS, TRADING 

THROUGH ANY ELECTRONIC MEANS, ELECTRONIC 

COMMUNICATION OF MARKET DATA OR INFORMATION, 

WORKSTATIONS USED, PRICE REPORTING SYSTEMS AND 

ANY AND ALL TERMINALS, COMMUNICATIONS 

NETWORKS, CENTRAL COMPUTERS, SOFTWARE, 

HARDWARE, AND FIRMWARE RELATING THERETO; OR\

ANY FAILURE OR MALFUNCTION, FAULT IN DELIVERY, 

DELAY, OMISSION, SUSPENSION, INACCURACY, 

INTERRUPTION OR TERMINATION, OR ANY OTHER 

CAUSE, OF ANY SYSTEM OR SERVICE OF TERA OR 

SERVICES, EQUIPMENT OR FACILITIES USED TO SUPPORT 

SUCH SYSTEMS OR SERVICES, CAUSED BY ANY THIRD 

PARTIES INCLUDING, BUT NOT LIMITED TO, 

INDEPENDENT SOFTWARE VENDORS AND NETWORK 

PROVIDERS; OR

ANY FAULT IN DELIVERY, DELAY, SUSPENSION, 

INACCURACY OR ANY OTHER CAUSE OF ANY SYSTEM 

OR SERVICE USED BY CLEARING FIRM, EXECUTING FIRM 

OR A CLEARING HOUSE IN SUPPORT OF TRANSACTIONS 

OR CLEARING ACTIVITIES.

THE LIMITATION OF LIABILITY IN THIS RULE SHALL APPLY WHETHER 

A CLAIM ARISES IN CONTRACT, TORT, NEGLIGENCE, STRICT 

LIABILITY, CONTRIBUTION OR OTHERWISE AND WHETHER THE 

CLAIM IS BROUGHT DIRECTLY OR AS A THIRD PARTY CLAIM.

(c) NOTWITHSTANDING THE ABOVE, EXCEPT FOR LIMITATION 

EXCEPTIONS BY TERA, ITS SUBSIDIARIES OR AFFILIATES, 
- 96 -

TERA’S TOTAL COMBINED AGGREGATE OBLIGATIONS OR 

LIABILITY FOR PARTICIPANT OR ANY THIRD PARTY ARISING 

OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE 

SERVICES PROVIDED HEREUNDER SHALL NOT EXCEED $100,000 

(ONE HUNDRED THOUSAND DOLLARS) FOR ALL LOSSES 

SUFFERED FROM ALL CAUSES IN A SINGLE CALENDAR MONTH; 

AND $250,000 (TWO HUNDRED FIFTY THOUSAND DOLLARS) FOR 

ALL LOSSES FROM ALL CAUSES SUFFERED IN A SINGLE 

CALENDAR YEAR. ANY DISPUTED CLAIM PURSUANT TO THIS 

SUBSECTION MUST BE ARBITRATED PURSUANT TO RULE 905. 

IF THE NUMBER OF ALLOWED CLAIMS BY PARTICIPANT 

ARISING OUT OF ANY FAILURES OR MALFUNCTIONS ON 

A SINGLE DAY OR SINGLE MONTH CANNOT BE FULLY 

SATISFIED BECAUSE OF THE ABOVE DOLLAR 

LIMITATIONS, ALL SUCH CLAIMS SHALL BE LIMITED TO 

A PRO RATA SHARE OF THE MAXIMUM AMOUNT FOR 

THE RESPECTIVE PERIOD.

A CLAIM AGAINST TERA SHALL ONLY BE ALLOWED IF 

SUCH CLAIM IS BROUGHT IN ACCORDANCE WITH 

PROCEDURES SET FORTH BY THE RULES.

(d) LIMITATION OF LIABILITY OF PARTICIPANT. EXCEPT FOR 

LIMITATION EXCEPTIONS OR A VIOLATION OF THE RULES AND 

EXCEPT FOR ITS PAYMENT OBLIGATION TO TERA: 

IN NO EVENT SHALL PARTICIPANT (INCLUDING ITS 

SUBSIDIARIES AND AFFILIATES), NOR ANY OF THEIR 

RESPECTIVE DIRECTORS, OFFICERS, MEMBERS, 

EMPLOYEES, AGENTS, OR CONSULTANTS BE LIABLE TO 

TERA FOR ANY LOSSES, DAMAGES, COSTS OR EXPENSES, 

INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS, LOSS 

OF USE, SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL OR 

CONSEQUENTIAL DAMAGES; AND 

EXCEPT FOR LIMITATION EXCEPTIONS OR A VIOLATION 

OF THE RULES, THE MAXIMUM AGGREGATE LIABILITY 

OF PARTICIPANT (INCLUDING ITS SUBSIDIARIES AND 

AFFILIATES AND ANY CONTRACTORS PROVIDING 

SERVICES TO THEM), OR ANY OF THEIR RESPECTIVE 

DIRECTORS, OFFICERS, MEMBERS, EMPLOYEES, AGENTS, 

OR CONSULTANTS, FOR DIRECT LOSS OR DAMAGE 

WHETHER IN CONTRACT, TORT (INCLUDING 

NEGLIGENCE AND BREACH OF STATUTORY DUTY), 

STRICT LIABILITY OR OTHERWISE ARISING OUT OF OR IN 

CONNECTION WITH USE OF SERVICES OR 
- 97 -

TRANSACTIONS SHALL BE $100,000 (ONE HUNDRED 

THOUSAND DOLLARS) FOR ALL LOSSES SUFFERED FROM 

ALL CAUSES IN A SINGLE CALENDAR MONTH; AND 

$250,000 (TWO HUNDRED FIFTY THOUSAND DOLLARS) 

FOR ALL LOSSES FROM ALL CAUSES SUFFERED IN A 

SINGLE CALENDAR YEAR. ANY DISPUTED CLAIM 

PURSUANT TO THIS SUBSECTION MUST BE ARBITRATED 

PURSUANT TO RULE 533.

(e) THE LIMITATIONS OF LIABILITY IN THIS RULE 906 SHALL NOT 

PROTECT ANY PARTY FOR WHICH THERE HAS BEEN A FINAL 

DETERMINATION (INCLUDING EXHAUSTION OF ANY APPEALS) 

BY A COURT OR ARBITRATOR TO HAVE ENGAGED IN FRAUD OR 

WILLFUL MISCONDUCT. ADDITIONALLY, THE FOREGOING 

LIMITATIONS ON LIABILITY OF THIS RULE SHALL BE SUBJECT 

TO THE CEA AND THE REGULATIONS PROMULGATED 

THEREUNDER, EACH AS IN EFFECT FROM TIME TO TIME.

Rule 907 Effect of Amendment, Repeal, or New Rule

(a) Tera may, pursuant to the CEA and CFTC regulations, amend or repeal any 

Rule, and/or adopt new Rules. Any such amendment, repeal of a Rule, or 

adoption of a new Rule shall be binding on all Persons subject to the 

jurisdiction of Tera upon the effective date of such amendment, repeal, or 

adoption. 

(b) Any amendment, repeal of a Rule, or adoption of a new Rule shall be 

published in a Notice to Participants in the manner described in Rule 308.

CHAPTER 10 INSTRUMENT SPECIFICATIONS

Rule 1001 Instruments Listed for Trading

(a) Tera shall determine which Instruments can be traded from time to time 

pursuant to these Rules, provided that any such determination shall be 

submitted to the CFTC as required by the CEA and CFTC Regulations.

(b) Subject to compliance with the CEA and CFTC Regulations, Instruments 

traded on Tera may be cleared and uncleared.

(c) The current list of Instruments available for trading on Tera are posted on 

its website and below as Annex B. 
- 98 - 

Annex A

Excerpt from Dodd Frank Act-Swap Transaction

Reporting Party Requirements

Product Attribute Determination

Tiebreaker Logic

When the participant identifier tiebreaker is invoked the following processes will be used:

1a. Determining identifiers

When an entity has multiple entity identifiers (“IDs”), the following hierarchy will be used to 

determine which entity ID to use in the RP determination logic:

• LEI/CiCi is used before DTCC GTR ID which is used before an AVOX ID which is 

used before any other identifier.

1b. Identifier Tiebreaker Logic Scenarios

i. When both firms must have an LEI/CiCi then rank based on the two LEI/CiCis.

ii. When one firm has an LEI/CiCi and the other firm has a DTCC ID but does not have 

an LEI then rank based on the comparison of the LEI/CiCi to the DTCC ID.

iii. When one firm has an LEI/CiCi and the other firm has an AVOX ID but does not 

have an LEI then rank based on the comparison of the LEI/CiCi to the AVOX ID.

iv. When neither firm has an LEI/CiCi and both firms have a DTCC ID then rank based 

on the two DTCC IDs.

v. When neither firm has an LEI/CiCi and one firm has a DTCC ID and the other firm 

has only an AVOX ID then rank based on the comparison of the DTCC ID to the 

AVOX ID.
- 99 -

vi. A firm will be the RP when that firm has a DTCC ID or LEI/CiCi and the other has 

neither an LEI/CiCi nor a DTCC ID nor an AVOX ID. Please note that in all cases 

the RP will have a DTCC ID and by extension will have an LEI/CiCi.

2. Determining sort order of identifiers

• LEI/CiCi, DTCC GTR IDs, and AVOX IDs are comprised of characters from the

following set {0‐9, A‐Z}.

• For avoidance of doubt, before comparing IDs convert all IDs to UPPER CASE only.

• For comparison basis the sort order will be reverse ASCII sort order. For avoidance 

of doubt the following are sort order of precedence:

• Z, Y, X, W, V, U, T, S, R, Q, P, O, N, M, L, K, J, I, H, G, F, E, D, C, B, A, 9, 8, 7, 6,

5, 4, 3, 2, 1, 0.

3. When comparing two IDs the RP will be the firm with the first ID in the list when sorted in

reverse ASCII sort order.
- 100 -

Annex B

Product Terms and Conditions