April 29, 2020

Submitted via CFTC Portal

Mr. Christopher J. Kirkpatrick

Office of the Secretariat

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581

Re: tpSEF Inc. – Regulation 40.6(a) Rule Certification; Notification of Amendments to 

Rulebook (tpSEF Submission #20-06R)

Dear Mr. Kirkpatrick:

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

the regulations of the Commodity Futures Trading Commission (the “Commission”), tpSEF Inc. (“tpSEF”), 

a registered swap execution facility, hereby notifies the Commission that it wishes to amend its Rulebook 

as provided in Exhibit A and its Compliance Manual as provided in Exhibit D. The intended date of 

implementation of the amended Rulebook and Compliance Manual is May 14, 2020.

Pursuant to Commission Regulation 40.6, this submission includes:

(i) Rulebook:

a. A concise explanation and analysis of the amendments to the Rulebook and their 

compliance with applicable provisions of the Act, attached as Exhibit A;

b. A clean copy of the amended Rulebook, attached as Exhibit B;

c. A copy of the amended Rulebook marked to show changes to the previously effective 

version, attached as Exhibit C;

(ii) Compliance Manual:

a. A concise explanation and analysis of the amendments to the Compliance Manual and their 

compliance with applicable provisions of the Act, attached as Exhibit D;

b. A clean copy of the amended Compliance Manual, attached as Exhibit E; and

c. A copy of the amended Compliance Manual marked to show changes to the previously 

effective version, attached as Exhibit F.
Mr. Christopher J. Kirkpatrick

April 29, 2020

Page 2

tpSEF is separately filing with the CFTC FOIA Compliance Office, pursuant to Commission Regulation 

145.9, a petition for confidential treatment of Confidential Exhibits D, E and F (the “FOIA Confidential 

Treatment Request”) on the grounds that disclosure would reveal confidential commercial and financial 

information. A copy of the FOIA Confidential Treatment Request is included with this submission.

tpSEF hereby certifies that the amendments comply with the requirements of the Act and Commission 

regulations thereunder. tpSEF is not aware of any substantive opposing views expressed with respect to this 

filing and certifies that, concurrent with this filing, a copy of this submission was posted on tpSEF’s website.
Mr. Christopher J. Kirkpatrick

April 29, 2020

Page 3

Please contact Brian D. Donnelly, Chief Compliance Officer, at (201) 984-6956 or by email at 

bddonnelly@tullettprebon.com with any questions regarding this matter.

Very truly yours,

tpSEF Inc.

By: _______________________

Name: Brian D. Donnelly

Title: Chief Compliance Officer

Date: April 29, 2020

Enclosures

cc: CFTC Division of Market Oversight (dmosubmissions@cftc.gov)

Nancy Markowitz, CFTC (nmarkowitz@cftc.gov)
Mr. Christopher J. Kirkpatrick

April 29, 2020

Page 1

EXHIBIT A

Explanation of Amended Rulebook 

tpSEF has amended its Rulebook as provided below. In general, the Rulebook has been amended (i) to 

make conforming changes to the updated Compliance Manual, and (ii) to make certain non-substantive 

changes related to typographical errors and formatting throughout the Rulebook. Capitalized terms used 

but not defined herein have the meanings assigned to them in the Rulebook.

Section/Rule Description of Revision

Reason and/or

Supporting Rule or Core

Principle

Cover Page Changed effective date. Conforming change

Table of 

Contents

Updated Table of Contents. Conforming change

Section 1: Definitions

Rule 1000 A definitions of “Financial Entity,” was added to clarify 

use of the term in Rule 8001. 

Conforming Change

Section 2: SEF Governance

Rule 2201 Rule 2201 was amended to clarify that the Chief 

Compliance Officer’s responsibility to enforce the SEF 

Rules.

Core Principle 2; CFTC 

Regulations 37.201 and 

37.203 

Rule 2401 Rule 2401 was amended to remove language referencing 

proposed but never adopted Commission Regulations 

regarding the responsibilities of the Regulatory Oversight 

Committee.

Core Principle 2; CFTC 

Regulations 37.201 and 

37.203

Rule 2602 Rule 2602 was amended for clarity. Core Principle 2; CFTC

Regulation 37.7

Section 3: Participant Access Rules

Rule 3000 Rule 3000 was amended to clarify that the SEF will 

review financial filings and notices made by Participants 

in order to monitor Participants’ status as ECPs.

Core Principle 7; CFTC 

Regulations 37.702 and 

37.703

Rule 3112 Rule 3112 was amended to clarify that an Introducing 

Broker may execute Transactions on behalf of Customers 

in addition to introducing Orders. 

Core Principle 2; CFTC 

Regulation 37.203

Section 4: Transaction Execution
Mr. Christopher J. Kirkpatrick

April 29, 2020

Page 2

Section/Rule Description of Revision

Reason and/or

Supporting Rule or Core

Principle

Rule 4008 Rule 4008 was amended to clarify that the SEF has the 

right to impose market restrictions in order to prevent 

market disruption. 

Core Principle 4; CFTC 

Regulations 37.400 and 

37.405

Rule 4012 Rule 4012 was amended to provide that confirmations of 

Prime Broker Transactions will be sent to the Prime 

Broker Client.

Core Principle 2; CFTC 

Regulation 37.6

Rule 4100 Rule 4100 was amended to clarify that the Board, the 

CEO or, if the CEO is unavailable, the most senior 

officer that is available, may take Emergency Actions.

Core Principle 8

Section 5: Conduct of Participants and Other Persons

Rule 5000 Rule 5000 was amended to provide specifically that each 

Participant must settle all Transactions entered into 

pursuant to the SEF Rules.

Core Principle 4; Core 

Principle 7; CFTC Regulation 

37.702

Rule 5100 Rule 5100 was amended to consolidate and clarify the 

enumerated list of prohibited trading practices to conform 

to the tpSEF Compliance Manual.

Conforming Change; Core 

Principle 2; Core Principle 3

Section 6: Enforcement of Rules and Disciplinary Proceedings 

Rule 6002 Rule 6002 was amended to clarify that the Market 

Regulation Department may recommend the preparation 

and service of a Notice of Charges.

Core Principle 2; CFTC 

Regulations 37.201 and 

37.206
Mr. Christopher J. Kirkpatrick

April 29, 2020

EXHIBIT B

tpSEF Inc. Rulebook

(Clean Version)
tpSEF Inc.

Rulebook

Effective May 14, 2020
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TABLE OF CONTENTS

SECTION 1 DEFINITIONS ......................................................................................................................1

Rule 1000 Definitions .......................................................................................................................... 1

SECTION 2 SEF GOVERNANCE .........................................................................................................14

Rule 2000 The SEF ............................................................................................................................ 14

Rule 2100 Board................................................................................................................................. 14

Rule 2200 Officers............................................................................................................................. 15

Rule 2201 Chief Compliance Officer................................................................................................. 15

Rule 2300 Qualification of Chief Compliance Officer ...................................................................... 17

Rule 2301 Qualifications of Directors, Panel Members, Committee Members and Officers............ 17

Rule 2400 [Reserved]......................................................................................................................... 18

Rule 2401 Regulatory Oversight Committee ..................................................................................... 18

Rule 2500 Conflicts of Interest Relating to Self-Regulatory Actions................................................ 19

Rule 2501 Voting by Interested Parties.............................................................................................. 20

Rule 2502 Restrictions on Certain Persons who Possess Confidential Information; Improper 

Use or Disclosure of Confidential Information................................................................. 22

Rule 2600 Services Agreement with a Regulatory Services Provider ............................................... 23

Rule 2601 Services Agreement with Other Service Providers........................................................... 24

Rule 2602 Prohibited Use of Data Collected for Regulatory Purposes.............................................. 24

SECTION 3 PARTICIPANT ACCESS RULES....................................................................................25

Rule 3000 Qualifications.................................................................................................................... 25

Rule 3100 Application Requirements ................................................................................................ 26

Rule 3101 Review of Application...................................................................................................... 27

Rule 3102 Acceptance as a SEF Participant....................................................................................... 27

Rule 3103 Denial, Conditioning or Termination of Participant Status .............................................. 27

Rule 3104 Duty to Keep Current........................................................................................................ 28

Rule 3105 Withdrawal of Participant; Temporary Deactivation of Trading Privileges..................... 28

Rule 3106 Dissolution of Participants................................................................................................ 29

Rule 3107 Jurisdiction and Application of SEF Rules....................................................................... 29

Rule 3108 Notices to Participants...................................................................................................... 30

Rule 3109 Authorized Traders........................................................................................................... 30

Rule 3110 Sponsored Access............................................................................................................ 31

Rule 3111 [Reserved]......................................................................................................................... 33

Rule 3112 Introducing Brokers.......................................................................................................... 33

Rule 3113 Authorized Representatives.............................................................................................. 33

Rule 3114 Communications between the SEF and Participants......................................................... 33

Rule 3115 Recording of Communications......................................................................................... 34

Rule 3200 Change of Control; Non-Assignment ............................................................................... 34

Rule 3300 Fees................................................................................................................................... 34

Rule 3301 Volume Discounts............................................................................................................. 35

Rule 3400 ISVs .................................................................................................................................. 35

Rule 3500 Customers and Clients...................................................................................................... 36

Rule 3501 Disclosure Requirements; Know Your Counterparty Requirements................................ 36

SECTION 4 TRANSACTION EXECUTION........................................................................................37

Rule 4000.A. Trading Hours................................................................................................................... 37
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Rule 4000.B. Swap Specifications.......................................................................................................... 37

Rule 4001 Procedures......................................................................................................................... 37

Rule 4002 Required Identifications.................................................................................................... 38

Rule 4003.A. Execution of Transactions................................................................................................. 38

Rule 4003.B. Order Book ....................................................................................................................... 39

Rule 4003.C. Trade at Settlement Cross Transactions............................................................................ 43

Rule 4004 Permitted Cross Transactions ........................................................................................... 44

Rule 4005 Mishandling of Customer Orders...................................................................................... 44

Rule 4006 Trading Halts.................................................................................................................... 45

Rule 4007 Termination of the SEF Connection ................................................................................. 45

Rule 4008 Risk Controls.................................................................................................................... 45

Rule 4009 Priority of Customers’ Orders........................................................................................... 45

Rule 4010 Trading Against Customers’ Orders Prohibited; Withholding Orders Prohibited............ 45

Rule 4011 Time Delay Requirement for Required Cross Transactions............................................. 46

Rule 4012 Confirmations and USIs.................................................................................................... 46

Rule 4013.A. Cleared Swaps................................................................................................................... 48

Rule 4013.B. Uncleared Swaps............................................................................................................... 52

Rule 4014 Information Regarding Orders and Dissemination of Trade Data.................................... 53

Rule 4015 Enforceability.................................................................................................................... 53

Rule 4016 Block Trades..................................................................................................................... 53

Rule 4017 Pre-Execution Credit Checks............................................................................................ 55

Rule 4018 Risk Mitigation Sessions .................................................................................................. 55

Rule 4100 SEF Rules Do Not Limit Emergency Powers................................................................... 55

Rule 4101 Position Limits.................................................................................................................. 56

Rule 4102 Exemptions from Position Limits..................................................................................... 56

Rule 4103 Position Accountability..................................................................................................... 56

Rule 4104 Enforcement of Position Limits and Position Accountability Levels............................... 57

Rule 4105 Prime Broker Transactions ............................................................................................... 58

SECTION 5 CONDUCT OF PARTICIPANTS AND OTHER PERSONS.........................................60

Rule 5000 Duties and Responsibilities of Participants, Sponsored Participants, Customers 

and Clients........................................................................................................................ 60

Rule 5001 Required Disclosures to the SEF ...................................................................................... 60

Rule 5100 Abusive Trading Practices Prohibited .............................................................................. 62

Rule 5101 Good Faith Bids and Offers.............................................................................................. 63

Rule 5102 Invalid Transactions.......................................................................................................... 63

Rule 5103 Trade Cancellation, Correction, Offset and Adjustment................................................... 64

Rule 5103.A. SEF Authority Regarding Trade Cancellation, Correction, Offset and Adjustment......... 64

Rule 5103.B. Transaction Price Review ................................................................................................. 64

Rule 5103.C. Review of Transactions for Errors.................................................................................... 65

Rule 5103.D. Records and Reporting of Cancellations and Price Adjustments...................................... 66

Rule 5103.E. Cancellation of Prime Brokerage Transactions ................................................................ 66

Rule 5104 Misuse of the SEF............................................................................................................. 67

Rule 5200 Rule Violations................................................................................................................. 67

Rule 5201 Fraudulent Acts Prohibited ............................................................................................... 68

Rule 5202 [Reserved]......................................................................................................................... 68

Rule 5203 Fictitious or Wash Transactions; Permitted Pre-Execution Communications.................. 68

Rule 5204 Market Disruptions Prohibited.......................................................................................... 69

Rule 5205 Market Manipulation Prohibited....................................................................................... 69

Rule 5206 Disruptive Trading Practices Prohibited........................................................................... 69
iii

Rule 5207 Prohibition of Misstatements............................................................................................ 69

Rule 5208 Acts Detrimental to the SEF Prohibited............................................................................ 69

Rule 5209 Adherence to Law............................................................................................................. 69

Rule 5210 Communications with the Public and Promotional Material............................................ 70

Rule 5300 Duty to Supervise.............................................................................................................. 70

Rule 5400 Inspections by the SEF ..................................................................................................... 70

Rule 5500 Information-Sharing.......................................................................................................... 71

Rule 5600 Minimum Financial and Related Reporting Requirements............................................... 71

Rule 5601 Confidentiality of Financial and Other Information ......................................................... 72

Rule 5602 Authority to Impose Restrictions...................................................................................... 72

Rule 5603 Additional Disclosure Requirements................................................................................ 72

Rule 5700 Gifts and Gratuities........................................................................................................... 72

Rule 5701 Anti-Money Laundering and Anti-Terrorism................................................................... 72

Rule 5702 Market Data ...................................................................................................................... 73

Rule 5703 Extension or Waiver of SEF Rules................................................................................... 73

SECTION 6 ENFORCEMENT OF RULES AND DISCIPLINARY PROCEEDINGS ....................74

Rule 6000 General.............................................................................................................................. 74

Rule 6001 Inquiries and Investigations.............................................................................................. 75

Rule 6002 Reports of Investigations.................................................................................................. 76

Rule 6003 Opportunity to Respond.................................................................................................... 77

Rule 6004 Review of Investigation Reports....................................................................................... 77

Rule 6005 Notice of Charges ............................................................................................................. 79

Rule 6006 Answer to Notice of Charges............................................................................................ 79

Rule 6007 Service of Notice of Charges............................................................................................ 80

Rule 6008 Settlement Offers.............................................................................................................. 80

Rule 6009 Disciplinary Panel............................................................................................................. 82

Rule 6010 Convening Hearings of Disciplinary Proceedings............................................................ 82

Rule 6011 Respondent Review of Evidence ...................................................................................... 83

Rule 6012 Conducting Hearings of Disciplinary Proceedings........................................................... 84

Rule 6013 Decision of Disciplinary Panel ......................................................................................... 85

Rule 6014 Sanctions........................................................................................................................... 86

Rule 6015 Right to Appeal from Disciplinary Panel Decision, Summary Impositions of 

Fines and Other Summary Actions................................................................................... 87

Rule 6016 Summary Imposition of Fines........................................................................................... 90

Rule 6017 Warning Letters ................................................................................................................ 91

Rule 6018 Summary Access Denial Actions...................................................................................... 91

Rule 6019 Rights and Responsibilities after Suspension, Temporary Deactivation or 

Termination....................................................................................................................... 91

Rule 6020 Notice to the Respondent, the Regulatory Services Provider and the Public; 

Effectiveness of Disciplinary and Access Denial Actions................................................ 92

Rule 6021 Costs ................................................................................................................................. 93

Rule 6022 Ex Parte Communications................................................................................................ 93

Rule 6023 [Reserved]......................................................................................................................... 94

Rule 6024 Extension or Waiver of the SEF Rules............................................................................. 94

Rule 6025 Effect of Amendment, Repeal or New SEF Rule ............................................................. 94

Rule 6026 [Reserved]......................................................................................................................... 94

Rule 6027 Governing Law, Jurisdiction and Dispute Resolution ...................................................... 94

Rule 6028 Limitation of Liability, Indemnity .................................................................................... 95
iv

SECTION 7 EMERGENCIES.................................................................................................................98

Rule 7000 Emergency Rules.............................................................................................................. 98

SECTION 8 RECORDKEEPING AND REPORTING......................................................................100

Rule 8000 Maintenance of Books and Records by the SEF............................................................. 100

Rule 8001 Order Information........................................................................................................... 100

Rule 8002 Books and Records ......................................................................................................... 102

Rule 8003 Recordkeeping Requirements for Block Trades............................................................. 103

Rule 8004 Access to Position Information....................................................................................... 104

Rule 8005 Reporting to a Swap Data Repository............................................................................. 104

Rule 8006 Timely Publication of Trading Information.................................................................... 105

Appendix A ISDA Reporting Counterparty Rules

Appendix B tpSEF Inc. Swap Specifications

Appendix C tpSEF Inc. Risk Mitigation Procedures

Appendix D Appropriate Minimum Block Sizes 
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SECTION 1

DEFINITIONS

Rule 1000 Definitions

Unless otherwise specifically provided in the SEF Rules or the context otherwise requires, the 

following terms have the meanings specified herein.

“Account Manager” means an investment manager or other Person acting in a similar capacity that 

(i) is not an individual, and (ii) acts as an agent and attorney-in-fact to transact Swaps via the SEF 

in the name and on behalf of a Client. An Account Manager may be a Participant, a Sponsored 

Participant or a Customer.

“Affected Person” has the meaning specified in Rule 3103.

“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.

“Affirm” means the process by which the counterparties to a Cleared Swap verify that they agree 

on the details of the transaction after execution on the SEF but prior to submission to the relevant 

DCO, which may be done by any means acceptable to the counterparties, including the use of an 

Affirmation Hub.

“Affirmation Hub” means a third-party service designated by the SEF to route Cleared Swaps to 

DCOs and which may provide Participants or Customers, as applicable, with the opportunity to 

Affirm the Cleared Swaps.

“Appeals Panel” means a panel appointed by the Chief Compliance Officer pursuant to Rule 6015.

“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 (without 

limitation) these SEF Rules, any DCO Rule, the CEA and CFTC Regulations.

“Appropriate Minimum Block Size” means the minimum notional or principal amount established 

from time to time by the CFTC for a category of Swap that qualifies as a block trade pursuant to 

CFTC Regulation 43.6. The Appropriate Minimum Block Size is published by the CFTC or its 

designee from time to time in accordance with CFTC Regulations 43.6 and 43.7 and are included 

in Appendix D hereto.

“Approved SDR” has the meaning specified in Rule 8005(b).

“Authorized Representative” means any natural Person who is employed and authorized by a

Participant to represent the Participant in SEF matters pursuant to Rule 3113.

“Authorized Trader” means a Person who is appointed, employed or authorized by a Participant 

(or by a Sponsored Participant) and who has been assigned a User ID by the SEF. Each Authorized 

Trader: (i) must be a natural Person; (ii) must have been granted Trading Privileges with respect 

to the trading activities of a Participant (or Sponsored Participant); and (iii) must satisfy any other 
-2-

requirements as may be prescribed by the SEF from time to time. In the case of a Prime Broker 

Client, each Authorized Trader designated by such Prime Broker Client shall be considered an 

Authorized Trader of the Prime Broker Client and not of the relevant Prime Broker.

“Block Trade” means a Swap that: (i) has a notional or principal amount at or above the 

Appropriate Minimum Block Size applicable to such Swap; (ii) is executed pursuant to the SEF 

Rules and (x) in the case of an Uncleared Block Trade, occurs away from a SEF trading system or 

platform or (y) in the case of a Cleared Block Trade, is executed on a non-Order Book trading 

system or platform of the SEF in accordance with Rule 4016(j); and (iii) is a publicly reportable 

swap transaction that is reported subject to the SEF Rules and procedures of the SEF and Part 43 

of the CFTC Regulations.

“Board” means the board of directors of the SEF.

“Business Day” means a day on which the SEF is open for trading as provided on the SEF website.

“By-Laws” means the by-laws of the SEF.

“Cancellation Notice” has the meaning specified in Rule 4105(b)(2).

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

“CFTC” means the U.S. Commodity Futures Trading Commission.

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

“Chief Compliance Officer” means the chief compliance officer of the SEF appointed pursuant to 

Rule 2201.

“Chief Executive Officer” or “CEO” means the chief executive officer of the SEF appointed by the 

Board pursuant to Rule 2200.

“Cleared Block Trade” means a Block Trade in a Cleared Swap.

“Cleared Swap” means (i) a Swap that is subject to the Clearing Requirement, or (ii) any Swap of 

a type that is accepted by a DCO for clearing that the parties have elected to submit for clearing, 

whether or not the particular Swap is accepted or rejected.

“Clearing Exception” means an exception to, or an exemption from, the Clearing Requirement, 

which exception or exemption is set forth in Section 2(h)(7) of the CEA, CFTC Regulations or any 

CFTC No-Action Letter.

“Clearing Exempt Transaction” means a Transaction that is not subject to the Clearing 

Requirement due to an election by one or more counterparties to use an available Clearing 

Exception.

“Clearing Firm” means a Clearing Member that provides clearing services to one or more 

Participants, Sponsored Participants, Clients or Customers and has either executed a Clearing Firm 
-3-

Agreement or in relation to which the relevant Participant, Sponsored Participant, Client, Customer 

and/or Clearing Member has provided the SEF with evidence or assurances satisfactory to the SEF 

of the existence and scope of the clearing services provided.

“Clearing Firm Agreement” means an agreement between the SEF and a Clearing Firm that 

includes (i) a list of the DCOs of which the Clearing Firm is a member, (ii) a list of the Persons 

for whom the Clearing Firm provides clearing services and (iii) if the Clearing Firm does not clear 

at all such DCOs for all such Persons, a per-Person list of the DCOs at which it does clear for such 

Person. The Clearing Firm shall be entitled to update this information in its sole discretion by 

written notice to the SEF and upon receipt of such notice, the SEF shall take such action necessary 

to effect the Clearing Firm’s modifications as promptly as practicable. For the avoidance of doubt, 

notwithstanding that such notice has not yet been provided or such modifications made, if the 

Clearing Firm has ceased to provide clearing services to a Person on any or all DCOs, the Clearing 

Firm may reject all such Person’s trades during the pre-execution credit check described in Rule 

4017.

“Clearing Member” means a member of a DCO that is authorized to clear Swaps for itself and/or 

for other Persons.

“Clearing Requirement” means the mandatory clearing requirement set forth in Section 2(h)(1)(A) 

of the CEA.

“Client” means a Person that granted in writing to an Account Manager investment discretion on 

behalf and in the name of such Person.

“Confirmation” means a written record of all the terms of a Transaction as required by Applicable 

Law.

“Correcting Transaction” has the meaning specified in Rule 4013.A.(f).

“Cross Transaction” a Permitted Cross Transaction or a Required Cross Transaction.

“Customer” means a Person for whom an Introducing Broker, as agent, (i) enters Orders and/or 

engages in Transactions on the SEF, and/or (ii) submits Uncleared Block Trades pursuant to the 

SEF Rules. A Customer may be a Participant acting through an Introducing Broker as agent in 

accordance with the foregoing sentence, including a Participant that is a Prime Broker Client acting 

through an Introducing Broker.

“Customer Type Indicator Code” has the meaning specified in Rule 8001(a).

“DCM” means a designated contract market as defined in CFTC Regulation 1.3(h).

“DCO” means a derivatives clearing organization as defined in Section 1a(15) of the CEA that is 

registered with, or has been exempted from registration by, the CFTC and that provides clearing 

services with respect to any Swaps traded on the SEF or pursuant to the SEF Rules.
-4-

“DCO Rules” means the relevant organizational documents of a DCO and any relevant rule, 

interpretation, stated policy or instrument corresponding to any of the foregoing, in each case as 

adopted or amended from time to time by the DCO.

“DDR” has the meaning specified in Rule 8005(b).

“Deal Management System” means the SEF’s back-end systems that facilitate post-trade 

processing and that can be used to execute Permitted Cross Transactions as described in Rule 4004.

“Director” means any member of the Board.

“Disclosable Financial Interest” means the position information contained in CFTC Regulation 

1.69(b)(2)(iii)(A) – (E).

“Disciplinary Action” means any inquiry, investigation, disciplinary proceeding, appeal from a 

disciplinary proceeding, summary imposition of fines, summary suspension or other summary 

action.

“Disciplinary Offense” means any of the following violations, which, in each case, arises out of a 

proceeding or action that is brought by the SEF, a Self-Regulatory Organization, the CFTC or any 

federal or state agency or other governmental body:

(1) Any violation of the SEF Rules or the rules of a Self-Regulatory Organization, 

except those violations related to (i) decorum or attire, (ii) financial requirements 

or (iii) reporting or recordkeeping unless resulting in fines aggregating more than 

$5,000 within any calendar year;

(2) Any violation described in paragraph (1)(i) – (iii) immediately above that involves 

fraud, deceit or conversion or results in a suspension or expulsion;

(3) Any violation of the CEA or CFTC Regulations; or

(4) Any failure to exercise supervisory responsibility with respect to acts described in 

paragraphs (1) – (3) immediately above when such failure is itself a violation of the 

SEF Rules, the rules of a Self-Regulatory Organization, the CEA or the CFTC 

Regulations.

“Disciplinary Panel” means the panel appointed by the Chief Compliance Officer to act in an 

adjudicative role and fulfill various adjudicative responsibilities and duties described in Section 6 

of the SEF Rules.

“Displayed Order” has the meaning specified in Rule 4011(a)(2).

“ECP” means an “eligible contract participant” as defined in Section 1a(18) of the CEA and CFTC 

Regulations thereunder.

“Emergency” means any occurrence or circumstance that, in the opinion of the Board and/or the 

CEO (or, if the CEO is not available, the most senior Officer that is available), requires immediate 
-5-

action and threatens or may threaten such things as the fair and orderly trading in, or the liquidation 

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

and payment of funds in connection with clearing and settlement by a DCO, including, without 

limitation, the following:

(1) any manipulative or attempted manipulative activity;

(2) any actual, attempted or threatened corner, squeeze, congestion or undue 

concentration of positions in a Swap or any related asset;

(3) any circumstance that may materially affect the performance of agreements, 

contracts, swaps or transactions, including failure of the payment system or the

bankruptcy or insolvency of any Participant;

(4) any action taken by any governmental body, or any other registered entity, board 

of trade, market or facility that may have a direct impact on trading or clearing and 

settlement of, or the legality or enforceability of, any Swap;

(5) the imposition of any injunction or other restraint by any government agency, court 

or arbitrator upon a DCO which may affect the ability of a DCO to perform on a 

Swap;

(6) any circumstance that may have a severe, adverse impact upon the functions and 

facilities of the SEF, including, but not limited to, acts of God, fire, flood or other 

natural disasters, bomb threats, acts of terrorism or war, severely inclement weather 

or failure or malfunction of all or a portion of the SEF, or other system breakdowns 

or interruptions such as power, computer, communication or transportation systems 

or the Internet;

(7) any circumstance in which it appears to the Board and/or the CEO (or, if the CEO 

is not available, the most senior Officer that is available) that a DCO or any other 

Person:

(i) has failed to perform on a Swap;

(ii) is insolvent; or

(iii) is in a financial or operational condition or is conducting business such that 

(A) the DCO cannot be permitted to continue to clear Swaps transacted on 

the SEF or pursuant to the SEF Rules without jeopardizing the safety of 

Participants, the SEF or any other Person or (B) the Person cannot be 

permitted to continue to transact business on the SEF without jeopardizing 

the safety of Participants, the SEF, any DCO or any other Person; or

(8) any other circumstance that may have a severe, adverse effect upon the functioning 

of the SEF.
-6-

“Emergency Action” means any action taken in accordance with Rule 7000 by the SEF, the Board, 

any committee of the Board, the CEO or any other Officer in response to an Emergency, including, 

without limitation, any of the following actions:

(1) suspending or curtailing trading or limiting trading (in whole or in part);

(2) ordering the fixing of a settlement price, or the reduction of positions;

(3) extending, limiting or changing the Trading Hours;

(4) temporarily modifying or suspending any provision of the SEF Rules or 

Obligations;

(5) imposing or modifying price limits;

(6) altering any contract’s settlement terms or conditions;

(7) imposing or modifying position limits; and/or

(8) ordering any other action or undertaking to address or relieve the Emergency.

“Emergency Rules” has the meaning specified in Rule 7000.

“Error” has the meaning specified in Rule 5103.C.

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

“Execution Specialist” means a SEF employee responsible for assisting Participants and Sponsored 

Participants (and any of their Supervised Persons) in entering on the SEF Orders and Transactions 

and receiving reports of Uncleared Block Trades.

“Family Relationship” means, with respect to any natural person, such natural person’s spouse, 

former spouse, parent, stepparent, child, stepchild, sibling, stepbrother, stepsister, grandparent, 

grandchild, uncle, aunt, nephew, niece or in-law.

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

“FCM” means futures commission merchant as defined under Section 1a(28) of the CEA and 

CFTC Regulation 1.3(p).

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

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

“Instrument Reference Price” has the meaning specified in Rule 4003.B.(d)(1)(ii).

“Interested Person” has the meaning specified in Rule 2500(a).

“Introducing Broker” is a Participant that (i) is a registered or exempt FCM or introducing broker 

(as defined in Section 1a(31) of the CEA and CFTC Regulation 1.3(mm)), and (ii) enters Orders 
-7-

or engages in Transactions on the SEF, and/or submits Uncleared Block Trades pursuant to the 

SEF Rules, on behalf of one or more Customers.

“Investigation Report” means any written report of investigation prepared by the Market 

Regulation Department.

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

“ISDA Reporting Counterparty Rules” means the rules identified in Appendix A hereto, as may be 

amended from time to time, for establishing a Reporting Counterparty under the circumstances 

where CFTC Regulation 45.8 does not determine a Reporting Counterparty (for example, because 

both counterparties are Swap Dealers or both counterparties are Major Swap Participants) as 

published by ISDA under the title “Dodd Frank Act – Swap Transaction Reporting Party 

Requirements” as such rules may be amended, restated, supplemented or otherwise modified or 

replaced from time to time.

“ISV” means independent software vendor.

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

“Major Swap Participant” has the meaning set forth in Section 1a(33) of the CEA and CFTC 

Regulations thereunder.

“Market Regulation Department” means the department within the SEF managed and overseen by 

the Chief Compliance Officer that regulates compliance with the SEF Rules. For purposes of the 

SEF Rules, Market Regulation Department may, as applicable, also include any Regulatory 

Services Provider pursuant to a Regulatory Services Agreement.

“MAT/Agency MBS Package Transactions” has the meaning set forth in CFTC No-Action Letter 

14-137.

“MAT/Futures Package Transactions” has the meaning set forth in CFTC No-Action Letter 17-

55.

“MAT/MAT Cleared Package Transaction” means a Package Transaction, all components of 

which are made available to trade and which is not a Clearing Exempt Transaction.

“MAT/New Issuance Bond Package Transactions” has the meaning set forth in CFTC No-Action 

Letter 17-55.

“MAT/Non-CFTC Swap Package Transactions” has the meaning set forth in CFTC No-Action 

Letter 17-55.

“MAT/Non-MAT Cleared Package Transactions” has the meaning set forth in CFTC No-Action 

Letter 15-55.

“MAT/Non-MAT Uncleared Package Transactions” has the meaning set forth in CFTC No-Action 

Letter 17-55.
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“MAT/Non-Swap Instruments Package Transactions” has the meaning set forth in CFTC NoAction Letter 17-55, and shall, for the avoidance of doubt, exclude (1) U.S. Dollar Swap Spreads; 

(2) MAT/Futures Package Transactions; (3) MAT/Agency MBS Package Transactions; and (4) 

MAT/New Issuance Bond Package Transactions.

“Material Adverse Change” means a significant event that negatively affects the subject 

referenced.

“Material Conflict of Interest” has the meaning specified in Rule 2500(a).

“Member” has the meaning specified in Section 1a(34) of the CEA and CFTC Regulation 1.3(q), 

and shall include for purposes of the SEF Rules all Participants(including Sponsoring Participants) 

and all Sponsored Participants.

“Membership Interests” means financial institutions that vary as to their jurisdiction of 

organization, size, registration and regulatory status, primary business and business model.

“Named Party in Interest” means a Person that is identified by name as a subject of any matter 

being considered by the Board, any committee established by the Board (including the Regulatory 

Oversight Committee) or any SEF Panel.

“NFA” means the National Futures Association.

“Non-Self-Clearing” means, with respect to a DCO and any particular Swap, a Participant,

Sponsored Participant, Client or Customer that is not a Clearing Member with respect to the related 

DCO and Swap.

“Notice of Charges” has the meaning specified in Rule 6005(a).

“Notice to Participants” has the meaning specified in Rule 3108.

“Obligation” means any and all duties and/or responsibilities arising under each SEF Rule, order 

or procedure issued by the SEF (including Notices to Participants) and other requirements 

implemented by the SEF under the SEF Rules, including the terms and conditions of each Swap, 

as well as any contractual obligations between a Participant and the SEF.

“Off-Book Ticket Functionality” means the functionality provided within the OMS that allows for 

the execution of Permitted Cross Transactions away from the Order Book. This functionality is 

available to market participants only for Transactions in the Rates asset class and for Transactions 

that are non-deliverable forwards.

“Officer” has the meaning specified in Rule 2200.

“Offsetting Transaction” has the meaning specified in Rule 4013.A.(f).

“Order” means a firm bid or offer for a Swap.
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“Order Book” means the trading systems operated by the SEF in which any Participant or any 

market participant acting through a Participant has the ability to enter multiple bids and offers, 

observe or receive bids and offers entered by other Participants, and transact on such bids and 

offers. All bids and offers on the Order Book shall be Orders (i.e., firm bids or offers and not 

indications of interest or indicative quotes), and all Orders shall be displayed on the Order Book 

on an anonymous basis. Any market participant who wishes to connect to and use the Order Book 

may choose to do so, as more fully described in Rule 4003.B. The Order Book is available for all 

Swaps listed for trading by the SEF.

“Order Book Waiver” has the meaning specified in Rule 4003.B.(f)(2).

“Order Management System” or “OMS” means the SEF’s front-end system that houses the Order 

Book, as well as the SEF’s Off-Book Ticket Functionality. Market participants may connect to the 

OMS via a graphical user interface (GUI) or an application program interface (API), which allows 

third-party trading systems to interact with the OMS.

“Package Transaction” means a transaction involving two or more instruments: (1) that is 

executed between two or more counterparties; (2) that is priced or quoted as one economic 

transaction with simultaneous or near simultaneous execution of all components; (3) that has at 

least one component that is a Swap that is a Required Transaction; and (4) where the execution of 

each component is contingent upon the execution of all other components. No Swap is prohibited 

from being executed on the SEF by virtue of its being part of a Package Transaction. The categories 

of Package Transactions currently executed on the SEF are: (i) MAT/MAT Cleared Package 

Transactions; (ii) MAT/Non-MAT Cleared Package Transactions; and (iii) MAT/Non-MAT 

Uncleared Package Transactions. The categories of Package Transactions currently facilitated by 

the SEF are: (i) MAT/Non-Swap Instruments Package Transactions (MAT/Bonds only); (ii) US 

Dollar Swap Spreads; and (iii) MAT/Futures Package Transactions (MAT/Eurodollar Futures 

only). Such facilitation is done by the SEF’s providing an execution venue for the Swap legs and 

reference price information regarding the non-Swap legs. The reference price is made available to 

Participants for informational purpose only. The SEF does not execute the non-Swap legs of 

Package Transactions; the counterparties to any Package Transaction involving a non-Swap 

component must execute such non-Swap component away from the SEF.

“Package Transaction (Order Book Exempt)” is a Package Transaction for which the CFTC has 

granted currently-effective no-action relief or an exception or exemption from the requirements of 

Section 2(h)(8) of the CEA and/or CFTC Regulation 37.9. Pursuant to CFTC No-Action Letter 

17-55, the following are Package Transactions (Order Book Exempt) until 11:59 p.m. (Eastern 

Time) on November 15, 2020: (a) MAT/New Issuance Bond Package Transactions; (b) 

MAT/Futures Package Transactions; (c) MAT/Non-MAT Uncleared Package Transactions; (d) 

MAT/Non-Swap Instruments Package Transactions; and (e) MAT/Non-CFTC Swap Package 

Transactions. If any such no-action relief is extended, upon and to the extent of such extension, 

the relevant Package Transaction will continue to be a Package Transaction (Order Book Exempt) 

for purposes of the SEF Rules.

“Participant” means any Person, other than an ISV, that has been admitted by the SEF as a 

“Participant” and that has been granted, and continues to have, Trading Privileges.
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“Participation Criteria” means the criteria set forth in Rule 3000(a).

“Permitted Cross Transaction” means a Permitted Transaction submitted to the SEF for execution 

either directly or via an Execution Specialist following some form of permitted pre-arrangement 

or pre-negotiation between or among the parties.

“Permitted Transaction” shall have the meaning provided in CFTC Regulation 37.9(c)(1).

“Person” means a natural person or an entity.

“Personal Information” means personally identifiable information or data concerning or relating 

to a Person’s employees, customers or prospective customers.

“Prime Broker” means a Participant that has authorized a Prime Broker Client to place Prime 

Brokerage Orders and execute Prime Broker Transactions on the SEF in the name of and on behalf 

of such Participant and that has been accepted by the SEF to act in such capacity.

“Prime Broker Acknowledgement Letter” shall have the meaning set forth in Rule 4105(b)(1).

“Prime Broker Client” means a Participant that has been identified by a Prime Broker in a Prime 

Broker Acknowledgment Letter to place Prime Brokerage Orders on the SEF and to execute Prime 

Broker Transactions in the name of and on behalf of such Prime Broker.

“Prime Broker Limit” means any limit, term or trading parameter established by a Prime Broker 

in respect of a Prime Broker Client, including credit limits and any categories of permissible 

Uncleared Swaps.

“Prime Broker Transaction” means a Permitted Cross Transaction in an Uncleared Swap executed 

on the SEF pursuant to Rule 4105 where one counterparty is a Prime Broker and the other is a 

Person (which may also be a Prime Broker) with which the Prime Broker has swap trading 

relationship documentation in place in accordance with the requirements of Rule 4013.B.

“Prime Brokerage Order” means an Order for a Prime Broker Transaction.

“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 any Director who qualifies as a “Public Director” within the meaning of 

the By-Laws.

“Regulatory Oversight Committee” or “ROC” means the committee described in Rule 2401.

“Regulatory Services Agreement” means the agreement(s) between the SEF and Regulatory 

Services Provider(s), under which market surveillance and trade practice surveillance functions 

are delegated to the Regulatory Services Provider.
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“Regulatory Services Provider” means the organization, if any, which provides regulatory services 

to the SEF pursuant to a Regulatory Services Agreement. The SEF’s Regulatory Services Provider 

is currently the NFA.

“Related Party” has the meaning given in Rule 6028.

“Reporting Counterparty” has the meaning set forth in Part 45 of the CFTC Regulations.

“Required Cross Transaction” means a Required Transaction (other than a Block Trade or Package 

Transaction (Order Book Exempt)) (x) in which a Participant acting as a broker or dealer seeks to 

either execute against its Customer’s Order or execute two of its customers’ Orders against each 

other, and (y) that is submitted for execution on the Order Book, either directly or via an Execution 

Specialist, following some form of permitted pre-arrangement or pre-negotiation.

“Required Transaction” shall have the meaning provided in CFTC Regulation 37.9(a)(1), as may 

be amended from time to time.

“Resting Quote” means any firm bid or offer displayed on the Order Book of the SEF.

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

finding a violation of the SEF Rules or other provision of Applicable Law for which the SEF has 

disciplinary jurisdiction, and for authorizing the issuance of notices of charges against Persons 

alleged to have committed violations if the Review Panel believes that the matter should be 

adjudicated.

“Risk Mitigation Sessions” has the meaning specified in Rule 4018.

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

“SEF” means the swap execution facility operated by tpSEF Inc. or any successor thereto.

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

Regulatory Services Provider or any individual rendering similar services to the SEF under an 

administrative or similar agreement.

“SEF Panel” means any Review Panel, Disciplinary Panel, Appeals Panel or any other disciplinary 

or oversight panel of the SEF and any subcommittee thereof.

“SEF Proceeding” and “SEF Proceedings” means any inquiry, investigation, disciplinary 

proceeding or any appeal from a disciplinary proceeding, summary suspension or other summary 

actions.

“SEF Rules” means the rules of the SEF as set forth herein, as may be amended from time to time 

by the SEF.

“Self-Clearing” means, as to any DCO and Swap, a Participant, Sponsored Participant, Client or 

Customer that is a Clearing Member of the relevant DCO with respect to such Swap.
-12-

“Self-Regulatory Action” means an Emergency Action or a SEF Proceeding.

“Self-Regulatory Organization” means the Financial Industry Regulatory Authority, the NFA or 

any other self-regulatory organization under the CFTC Regulations or the rules and regulations of 

the SEC.

“Significant Action” has the meaning specified in CFTC Regulation 1.69(a)(8).

“Sponsored Participant” means a third-party ECP that is extended Trading Privileges by a 

Sponsoring Participant pursuant to Rule 3110.

“Sponsoring Participant” means a Participant that extends Trading Privileges to a Sponsored 

Participant pursuant to Rule 3110.

“Supervised Persons” means Authorized Traders, directors, officers, employees or agents of any 

Participant or Sponsored Participant.

“Swap” means any “swap” as defined in CEA Section 1a(47) that has been listed for trading on 

the SEF.

“Swap Data Repository” or “SDR” has the meaning set forth in Section 1a(48) of the CEA.

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

“Swap Specification” means, with respect to any Swap, the specifications for such Swap as set 

forth in Appendix B hereto, including any materials incorporated by reference therein.

“TAS Cross Transaction” has the meaning given in Rule 4003.C.(a).

“Terms Incorporated by Reference” has the meaning given in Rule 4012.

“tpSEF Risk Mitigation Procedures” means the SEF’s procedures for Risk Mitigation Sessions, 

which are attached hereto as Appendix C.

“Trade Communication” has the meaning given in Rule 4012.

“Trading Hours” means, for any Business Day, the hours specified in Rule 4000.A. below.

“Trading Privileges” means the right granted to a Participant by the SEF, or extended to a 

Sponsored Participant by a Sponsoring Participant, to use the SEF for execution of Swaps, in each 

case acting through one or more Authorized Traders.

“Transaction” means any Swap transacted on the SEF in accordance with the SEF Rules or, in the 

case of an Uncleared Block Trade, transacted away from a SEF trading system or platform in 

accordance with the SEF Rules.

“Uncleared Block Trade” means a Block Trade other than a Cleared Block Trade.

“Uncleared Swap” means a Swap other than a Cleared Swap.
-13-

“User ID” means a unique identifier issued to each Authorized Trader of a Participant that enables 

the SEF to identify the individual.

“U.S. Dollar Swap Spreads” has the meaning set forth in CFTC No-Action Letter 15-55.

“USI” means a unique swap identifier created by the SEF pursuant to Part 45 of the CFTC 

Regulations.

“Waiting Order” has the meaning specified in Rule 4011(a)(2).
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SECTION 2

SEF GOVERNANCE

Rule 2000 The SEF

The SEF is a corporation organized under the laws of the state of Delaware. The By-Laws of the 

SEF govern the management and operation of the SEF.

BOARD

Rule 2100 Board

(a) The Officers shall manage the day-to-day business operations of the SEF. The Board has 

the power and authority to oversee, and to affirm, modify, suspend or overrule, any and all 

decisions and actions of any committees of the Board or any panel of Officers related to 

the day-to-day business operations of the SEF.

(b) The Board will determine which Swaps are available from time to time for trading subject 

to the SEF Rules, and will approve specifications for such Swaps; provided that the Board 

may delegate the authority to approve such rules to a SEF committee or to one or more 

Officers of the SEF; provided, further, that certifications or applications with respect to 

such rules will be submitted to the CFTC as required by the CEA and any regulations 

thereunder.

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

by vote at a meeting, by unanimous written consent without a meeting, or as otherwise set 

forth in the By-Laws. In the event of an Emergency, which in the judgment of the CEO 

(or, if the CEO is not available, the most senior Officer that is available) requires immediate 

action, a special meeting of the Board may be convened without notice, consisting of those 

Directors who are immediately available in person or by telephone and can be joined in the 

meeting in person or by conference telephone. The actions taken at such a meeting shall be 

effective if at least a quorum of the Directors participates either personally or by conference 

telephone.

(d) At all times, at least 35% of the Directors shall be Public Directors. Each Director 

(including Public Directors) shall be appointed in accordance with the By-Laws and shall 

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

removal, with or without cause. The Directors shall include members who have had 

relevant experience in some capacity (whether as a current or former employee, officer, 

director, principal, consultant, advisor, service provider or otherwise) working with or for 

a diversity of Membership Interests.

(e) Each Director is entitled to indemnification pursuant to the By-Laws with respect to matters 

relating to the SEF.

(f) To qualify as a Director, an individual must meet the qualifications for directors set forth 

in the By-Laws, and to qualify as a Public Director, an individual must meet the 

qualifications for “Public Directors” set forth in the By-Laws.
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(g) Without limitation of any other provisions of this Rule 2100, the provisions of Article III 

of the By-Laws shall be deemed to be part of the SEF Rules and shall be deemed to be 

incorporated herein, to the same extent and with the same force and effect as if set forth 

herein in their entirety.

OFFICERS

Rule 2200 Officers

(a) The Board shall appoint a Chief Executive Officer and such other officers of the SEF (each 

of the foregoing, an “Officer,” and collectively, the “Officers”) as it may deem necessary 

or appropriate from time to time, in accordance with and as required by the By-Laws.

(b) Any Officer may also be a director, officer, partner or employee of the SEF or any of its 

Affiliates.

(c) The Officers shall have such powers and duties in the management of the SEF as the Board 

may prescribe from time to time.

(d) Each Officer is entitled to indemnification pursuant to the By-Laws with respect to matters 

relating to the SEF.

Rule 2201 Chief Compliance Officer

(a) Either the Board or the Chief Executive Officer shall appoint a Chief Compliance Officer. 

The Board shall approve the compensation of the individual appointed as Chief 

Compliance Officer. Removal of the Chief Compliance Officer shall require the approval 

of a majority of the Board. The SEF shall notify the CFTC of the removal of the Chief 

Compliance Officer and the appointment of any new Chief Compliance Officer, whether 

interim or permanent, within two (2) Business Days of such removal and appointment.

(b) The Chief Compliance Officer’s duties shall include, but are not limited to, the following:

(1) overseeing and reviewing the SEF’s compliance with Applicable Law, including, 

without limitation, Section 5h of the CEA and related CFTC Regulations;

(2) enforcing the SEF Rules;

(3) in consultation with the CEO and such others, including, without limitation, the 

Board and/or the Regulatory Oversight Committee, as deemed appropriate and 

necessary, resolving any conflicts of interest that may arise, including: (i) conflicts 

between business considerations and compliance requirements; (ii) conflicts 

between business considerations and the requirement that the SEF provide fair, 

open and impartial access as set forth in the CFTC Regulations; and (iii) conflicts 

between the SEF’s management and members of the Board;

(4) establishing and administering requisite written policies and procedures reasonably 

designed to prevent violations of the CEA and CFTC Regulations;
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(5) taking reasonable steps to ensure compliance with the CEA and CFTC Regulations;

(6) establishing procedures for the remediation of noncompliance issues identified by 

the Chief Compliance Officer through compliance office reviews, look-backs, 

internal or external audit findings, self-reported errors or validated complaints;

(7) establishing and following appropriate procedures for the handling, management 

response, remediation, retesting and closing of noncompliance issues;

(8) establishing and administering a compliance manual designed to promote 

compliance with Applicable Law and a written code of ethics designed to prevent 

ethical violations and to promote honesty and ethical conduct;

(9) 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 proceedings, audits, 

examinations and other regulatory responsibilities with respect to Participants, 

Customers, Clients and other market participants (including seeking to ensure 

compliance with, if applicable, financial integrity, financial reporting, sales 

practice, recordkeeping and other requirements);

(10) supervising the effectiveness and sufficiency of any regulatory services provided 

to the SEF by a Regulatory Services Provider; and

(11) preparing and filing the annual compliance report as required under the CEA and 

applicable CFTC Regulations.

(c) The Chief Compliance Officer shall have available to him or her at all times the authority 

and the resources of the Market Regulation Department and such other resources as may 

be necessary to develop and enforce policies and procedures necessary to fulfill the duties 

set forth for chief compliance officers of swap execution facilities in the CEA and the 

CFTC Regulations. The Chief Compliance Officer shall have supervisory authority over 

all staff of the Market Regulation Department and all other compliance staff.

(d) The Chief Compliance Officer shall report directly to the Board. The Chief Compliance 

Officer shall have the authority to inspect the books and records of all Participants and the 

authority to require any Participant to appear before him or her and produce its books and 

records and answer questions regarding alleged violations of the SEF Rules or other 

provision of Applicable Law for which the SEF has disciplinary jurisdiction, at the time, 

place and in the manner it designates. The Chief Compliance Officer may also delegate 

such authority to staff of the Market Regulation Department and/or the Regulatory Services 

Provider.
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QUALIFICATIONS

Rule 2300 Qualification of Chief Compliance Officer

(a) The Chief Compliance Officer shall have the background and skills appropriate for 

fulfilling the responsibilities of the position.

(b) The Chief Compliance Officer may not be disqualified from registration pursuant to 

Section 8a(2) or (3) of the CEA.

Rule 2301 Qualifications of Directors, Panel Members, Committee Members and 

Officers

(a) A Director or Officer must meet the qualifications set forth from time to time in the ByLaws.

(b) An individual may not serve as a Director or an Officer, hold a 10% or more ownership 

interest in the SEF or serve on a committee established by the Board (including the 

Regulatory Oversight Committee) or any SEF Panel if the individual:

(1) within the prior three (3) years has been found by a final decision of the SEF, a 

Self-Regulatory Organization, an administrative law judge, a court of competent 

jurisdiction or a Government Agency to have committed a Disciplinary Offense;

(2) 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;

(3) is currently suspended from trading on a DCM, is suspended or expelled from 

membership in a Self-Regulatory Organization, is serving any sentence or 

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

(i) a finding of a Disciplinary Offense by a final decision of the SEF, a SelfRegulatory Organization, an administrative law judge, a court of competent 

jurisdiction or a Government Agency; or

(ii) 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;

(4) is currently subject to an agreement with a Government Agency, the SEF or a SelfRegulatory Organization not to apply for registration with the Government Agency 

or for membership in the SEF or the Self-Regulatory Organization;

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

suspension of registration by the CFTC for any reason;

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

CEA; or
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(7) 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 as that term is defined in Section 3(a)(26) of the Exchange Act.

(c) Any Director, Officer, member of a committee established by the Board, any SEF Panel 

member, 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 Chief Executive Officer or the Chief Compliance Officer if such individual meets one 

or more of the criteria in Rule 2301(b).

(d) For purposes of Rule 2301(b), the terms “final decision” and “settlement agreement” have 

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

BOARD COMMITTEES

Rule 2400 [Reserved]

Rule 2401 Regulatory Oversight Committee

(a) The Regulatory Oversight Committee of the Board shall be composed entirely of Public 

Directors appointed by the Board.

(b) Each member of the Regulatory Oversight Committee shall serve for a term of two (2) 

calendar years from the date of his or her appointment or until such Person ceases to be 

Public Director or until removed from the ROC by the Board. A member of the Regulatory 

Oversight Committee may serve for multiple terms.

(c) The Regulatory Oversight Committee shall oversee the SEF’s regulatory program 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. It shall make such recommendations to the Board that, in its judgment, will best 

promote the interests of the SEF. The Regulatory Oversight Committee shall also have 

such other powers and perform such other duties as set forth in the SEF Rules and as the 

Board may delegate to it from time to time.

(d) Without limiting the generality of the foregoing, the Regulatory Oversight Committee shall 

have authority to:

(1) monitor the regulatory program of the SEF for sufficiency, effectiveness, and 

independence; and

(2) oversee all facets of the regulatory program.

(e) The Regulatory Oversight Committee reports to the Board.
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CONFLICTS OF INTEREST AND CONFIDENTIAL INFORMATION

Rule 2500 Conflicts of Interest Relating to Self-Regulatory Actions

(a) A Director, Officer, SEF Panel member or other Person authorized to exercise the SEF’s 

authority concerning a Self-Regulatory Action who has a Material Conflict of Interest 

between (i) his or her exercise of authority concerning a Self-Regulatory Action, and (ii) 

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

deliberations or vote of the Board (which includes for purposes hereof a Board committee) 

or SEF Panel, or (y) exercise any authority, with respect to the Self-Regulatory Action 

involving his or her personal interest, except as described below.

For purposes of this Rule 2500, a Director, Officer, SEF Panel member or other Person has 

a “Material Conflict of Interest” when such Director, Officer, SEF Panel member or other 

Person:

(1) is named as a respondent or potential respondent or a witness or potential witness 

in a Self-Regulatory Action;

(2) is an employer, employee, fellow employee or an Affiliate of a respondent or 

potential respondent or a witness or potential witness in the Self-Regulatory Action;

(3) has any significant, ongoing business relationship with a respondent or potential 

respondent or a witness or potential witness in the Self-Regulatory Action;

(4) has a Family Relationship with a respondent or potential respondent or a witness or 

potential witness in a Self-Regulatory Action (including the individual’s spouse, 

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

stepbrother, stepsister, grandparent, grandchild, uncle, aunt, nephew, niece, fatherin-law, mother-in-law, brother-in-law or sister-in-law); and/or

(5) is involved in any other circumstance that gives rise to a conflict between the 

Director’s, Officer’s, panel member’s or other Person’s exercise of authority 

concerning a Self-Regulatory Action and his or her personal interests.

(b) Before considering any Self-Regulatory Action, an Interested Person, or a Director, 

Officer, SEF Panel member or other Person authorized to exercise the SEF’s authority 

concerning a Self-Regulatory Action that believes he or she is or may be an Interested 

Person, must disclose in writing to the Board the material facts concerning his or her 

relationship or interest in the matter. Following such disclosure, the Board shall determine 

whether any Person that believes he or she is or may be an Interested Person actually is an 

Interested Person. Notwithstanding any contrary determination by the Board, any Person 

that believes he or she is or may be an Interested Person may recuse himself or herself from 

deliberations and voting or the exercise of authority pursuant to Rule 2500(a) above upon 

his or her election.

(c) Any Interested Person who would be required otherwise to abstain from deliberations and 

voting or the exercise of authority pursuant to Rule 2500(a) above as a result of having 
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Material Conflict of Interest may participate in deliberations, prior to a vote on the matter, 

if:

(1) the material facts about the Interested Person’s interest in the matter are disclosed 

or known to the Board or SEF Panel;

(2) the Board determines that the participation by the Interested Person would be 

consistent with the public interest; and

(3) a majority of the Directors (excluding any Interested Persons) vote to allow the 

Interested Person to participate in deliberations on the matter.

(d) If a determination is made pursuant to Rule 2500(c) 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.

(e) If a determination is made that all Directors are Interested Persons with respect to a matter 

subject to a vote by the Board, the Chief Executive Officer (unless the Chief Executive 

Officer is an Interested Person, in which case the most senior Officer who is not an 

Interested Person) will appoint a panel of individuals who are not Interested 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.

Rule 2501 Voting by Interested Parties

(a) Relationship with Named Party in Interest.

(1) A member of the Board, any committee established by the Board (including the 

ROC) or any SEF Panel must abstain from such body’s deliberations and voting on 

any matter involving a Named Party in Interest where such member:

(i) is a Named Party in Interest;

(ii) is an employer, employee or fellow employee of a Named Party in Interest; 

(iii) is associated with a Named Party in Interest through a “broker association” 

as defined in CFTC Regulation 156.1;

(iv) has any other significant, ongoing business relationship with a Named Party 

in Interest, not including relationships limited to executing futures or option 

transactions opposite of each other or to clearing futures or option 

transactions through the same clearing member; or

(v) has a Family Relationship with a Named Party in Interest.

(2) Prior to the consideration of any matter involving a Named Party in Interest, each 

member of the Board, any committee established by the Board (including the ROC) 
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or any SEF Panel must disclose to the Chief Compliance Officer whether he or she 

is a Named Party in Interest or has one of the relationships listed in Rule 

2501(a)(1)(ii)-(v) above with a Named Party in Interest.

(3) The following procedure will apply with respect to any matter involving a Named 

Party in Interest under this Rule 2501:

(i) In its sole discretion, the Chief Compliance Officer, in consultation with the 

ROC (excluding any potentially interested members of the ROC), shall 

determine whether any member of the Board, any committee established by 

the Board (including the ROC) or a SEF Panel is required to abstain from 

deliberations and voting on the matter.

(ii) The determination of the Chief Compliance Officer will take into 

consideration the exigency of the matter and shall be based upon: (x) 

information provided by the member pursuant to Rule 2501(a)(2), and (y) 

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

the SEF.

(4) Notwithstanding any contrary determination made in accordance with Rule 

2501(a)(3), any Person that believes he or she is or may be a Named Party in Interest 

or has or may have one of the relationships listed in Rule 2501(a)(1)(ii)-(v) above 

with a Named Party in Interest may recuse himself or herself from deliberations 

and voting on the relevant matter involving a Named Party in Interest.

(b) Financial Interest in Significant Action.

(1) A member of the Board, any committee established by the Board (including the 

ROC) or any SEF Panel must abstain from such body’s deliberations and voting on 

any Significant Action if the member knowingly has a direct and substantial 

financial interest in the result of the vote based upon either exchange or nonexchange positions that could reasonably be expected to be affected by the action.

(2) Prior to the consideration of any Significant Action, each member of the Board, any 

committee established by the Board (including the ROC) or any SEF Panel must 

disclose to Chief Compliance Officer any Disclosable Financial Interest that is 

known to such member. This requirement does not apply to members who choose 

to abstain from deliberations and voting on the subject Significant Action.

(3) The Chief Compliance Officer will independently require a member of the Board, 

any committee established by the Board (including the ROC) or any SEF Panel to 

abstain from both the deliberations and voting by the Board, committee or SEF 

Panel on any Significant Action if the Chief Compliance Officer, in consultation 

with the ROC (excluding any potentially interested members of the ROC),

determines that the member has a direct and substantial financial interest in the 

result of the vote. The determination of the Chief Compliance Officer must include 

a review of the member’s Disclosable Financial Interest, take into consideration the 

exigency of the Significant Action and should be based upon: (x) the most recent 
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large trader reports and clearing records available to the SEF; (y) information 

provided by the member with respect to any Disclosable Financial Interest pursuant 

to Rule 2501(b)(2); and (z) any other source of information that is held by and 

reasonably available to the SEF.

(4) The Board, any committee established by the Board (including the ROC) or any 

SEF Panel may permit a member to participate in deliberations prior to a vote on a 

Significant Action for which deliberations such member otherwise would be 

required to abstain, pursuant to this Rule 2501(b), if such participation would be 

consistent with the public interest and the member recuses himself or herself from 

voting on such action.

(5) In making a determination as to whether to permit a member to participate in 

deliberations on a Significant Action for which such member otherwise would be 

required to abstain, the deliberating body shall consider the following factors:

(i) Whether the member’s participation in deliberations is necessary for the 

deliberating body to achieve a quorum in the matter, and

(ii) Whether the member has unique or special expertise, knowledge or 

experience in the matter under consideration.

Prior to making any such determination, the relevant deliberating body must fully 

consider the position information that is the basis for the member’s direct and 

substantial financial interest in the result of a vote on a Significant Action. 

(6) The Board, Board committees and SEF Panels must reflect in their minutes or 

otherwise document that the conflicts determination procedures required by this 

Rule 2501 have been followed. Such records also must include:

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

otherwise were present by electronic means;

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

required to abstain from deliberations and/or voting on a matter and the 

reason for the recusal or abstention, if stated; and

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

member. 

Rule 2502 Restrictions on Certain Persons who Possess Confidential Information; 

Improper Use or Disclosure of Confidential Information

(a) No Director, Officer, member of any committee or panel established by the Board or any 

employee or consultant of the SEF shall use or disclose, either during his or her association 

with the SEF or thereafter, for any purpose other than the performance of his or her official 

duties and responsibilities as a Director, Officer, committee or panel member or employee 

or consultant any confidential information (including any material, non-public 
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information) obtained as a result of the individual’s duties and responsibilities as a 

Director, Officer, committee or panel member or employee or consultant. Any Director, 

Officer, committee or panel member or employee or consultant 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.

(b) Notwithstanding Rule 2500(a), a Director, Officer, member of any committee or panel 

established by the Board or employee or consultant of the SEF may disclose confidential 

information (i) in the course of his or her official duties; (ii) to any Self-Regulatory 

Organization, DCO, court of competent jurisdiction or representative of any agency or 

department of the federal or state government acting in his or her official capacity; (iii) if 

such information is or becomes a matter of public knowledge through no fault of the 

Director, Officer, member of any committee or panel established by the Board or employee 

or consultant; or (iv) as required pursuant to Applicable Law.

(c) No Director, Officer, or member of any committee or panel established by the Board, no 

employee of the SEF and no consultant to the SEF shall:

(1) 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;

(2) use or disclose, for any purpose other than the performance of such Person’s official 

duties, any confidential information obtained by such Person as a result of such 

Person’s official duties; provided, however, that this Rule shall not prohibit any 

disclosures that are expressly permitted pursuant to Rule 2502(b); or

(3) trade, directly or indirectly, in (i) any Swap traded on the SEF, (ii) any related 

commodity interest (as defined in CFTC Regulation 1.59(a)), or (iii) any 

commodity interest traded on any DCM or SEF or cleared by any DCO if such 

Person has access to material non-public information concerning such commodity 

interest.

SERVICE AGREEMENTS

Rule 2600 Services Agreement with a Regulatory Services Provider

(a) The SEF may enter into a Regulatory Services Agreement with a Regulatory Services 

Provider to perform certain surveillance, investigative, and regulatory functions under the 

SEF Rules and the SEF may provide information to the Regulatory Services Provider in 

connection with the performance of those functions.

(b) The SEF shall retain ultimate decision-making authority with respect to any functions that 

are contracted to a Regulatory Services Provider and shall remain responsible for the 

performance of any Regulatory Services received.
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Rule 2601 Services Agreement with Other Service Providers

The SEF, in its discretion, may enter into services agreements with service providers of its 

choosing to perform functions under the SEF Rules, and may provide information to such service 

providers in connection with the performance of those functions.

Rule 2602 Prohibited Use of Data Collected for Regulatory Purposes

The SEF will not use for business or marketing purposes any Proprietary Data or Personal 

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

regulatory obligations unless the Person from whom it collects or receives such data or information 

clearly consents to the SEF’s use of such data or information in such manner by providing a 

separate signed consent prior to such use. The SEF will not condition access to its market(s) or 

market services on a Person’s consent to the SEF’s use of Proprietary Data or Personal Information 

for business or marketing purposes. The SEF, where necessary for regulatory purposes and as 

permitted by Applicable Law, may share such data or information with one or more DCOs, swap 

execution facilities or DCMs registered with the CFTC. In such an event, the SEF will request the 

DCO, swap execution facility or DCM to maintain the confidentiality of any such information in 

the same manner as the DCO, swap execution facility or DCM would protect its own proprietary 

data.
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SECTION 3

PARTICIPANT ACCESS RULES

QUALIFICATIONS

Rule 3000 Qualifications

(a) To be eligible for admission as a Participant, an applicant must satisfy the following criteria 

(the “Participation Criteria”):

(1) is an ECP;

(2) is of good reputation and business integrity;

(3) maintains adequate financial resources and credit, has adequate capacity to meet its 

financial obligations and has not filed for bankruptcy;

(4) if it is an entity, is validly organized, in good standing and authorized by its 

governing body and, if relevant, documents of organization, to act as a Participant 

and comply with its obligations under the SEF Rules and doing so will not violate 

any material agreement by which it is bound or require any consents not already 

obtained;

(5) is not prohibited from using the services of the SEF for any reason whatsoever;

(6) holds all registrations required under Applicable Law, including, without 

limitation, any introducing broker, futures commission merchant, and/or swap 

dealer registration (each as defined in the CEA and CFTC Regulations), and if 

required pursuant to Applicable Law, is a member of the NFA;

(7) is not subject to statutory disqualification under Section 8a(2) of the CEA; and

(8) satisfies any other criteria that the SEF may require from a Participant to enable the 

SEF to perform its responsibilities as a Self-Regulatory Organization, comply with 

Applicable Law or provide services, provided such criteria are impartial, 

transparent and applied in a fair and nondiscriminatory manner.

(b) Each Participant intending to trade Cleared Swaps for its own account must either be (i) 

Self-Clearing with respect to the DCO where the Cleared Swaps it will trade are cleared, 

or (ii) if it is Non-Self-Clearing, have a clearing account with a Clearing Firm and be 

permitted by the related Clearing Firm to clear such Swaps at such DCO through such 

Clearing Firm.

(c) Each Participant that is an Account Manager, Introducing Broker or Sponsoring Participant 

must ensure that each of its Clients, Customers or Sponsored Participants (as applicable) 

intending to trade Cleared Swaps meets the requirements of Rule 3000(b) above.
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(d) Participants are prohibited from entering Orders or Transactions in Cleared Swaps on the 

SEF on behalf of any party (whether the Participant itself or its Client, Customer or 

Sponsored Participant) that is Non-Self-Clearing unless such party has a relationship with 

a Clearing Firm as described in Rule 3000(b)(ii) that covers the relevant Order or 

Transaction.

(e) The SEF shall review any financial filings and notices made by its Participants pursuant to 

the SEF Rules to determine whether they continue to qualify as ECPs. If any Client or 

Customer of an Account Manager or Introducing Broker is not also a Participant, the SEF 

shall obtain from the applicable Account Manager or Introducing Broker a representation 

that such Client or Customer is an ECP, which will be deemed repeated each time the 

applicable Account Manager or Introducing Broker transacts on the SEF on behalf of such 

Client or Customer.

(f) Upon request of the SEF or its Regulatory Services Provider, each Participant (and each 

Authorized Trader) shall promptly provide to the Market Regulation Department or the 

Regulatory Services Provider (i) the names of its Customers, Client or Sponsored 

Participants (if applicable) and (ii) such information about Authorized Traders as the SEF 

requests.

(g) The SEF may from time to time establish different categories of Participants receiving 

access to the SEF. Participants receiving comparable access to, or services from, the SEF 

will be subject to comparable fee structures.

(h) Consistent with Applicable Law, the SEF will provide access to its trading platform and 

services on a fair and nondiscriminatory basis to any ECP that complies with the SEF’s 

documentation and eligibility requirements as set forth in the SEF Rules.

PARTICIPANT APPLICATION AND ONGOING PARTICIPANT MATTERS

Rule 3100 Application Requirements

A Person that wishes to become a Participant of the SEF must:

(a) Submit to the SEF an accurate and complete application and execute and deliver any 

applicable agreements and other documents as may be required by the SEF from time to 

time;

(b) if it is an entity, provide a copy of all formation documents including any amendments 

thereto if requested by the SEF;

(c) if it is an applicant organized or located outside of the United States, enter into a written 

agreement acceptable to the SEF appointing a third party as its U.S. agent for service of 

process for purposes of CFTC Regulation 15.05, and shall provide the SEF with a copy of 

the agreement;

(d) provide such other information as may be requested by the SEF; and
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(e) provide (i) written or electronic confirmation of its status as an ECP, and (ii) with respect 

to any Client, Customer or Sponsored Participant that is not also a Participant and on whose 

behalf it wishes to trade on the SEF, a representation that such Client, Customer or 

Sponsored Participant is an ECP, which representation will be deemed repeated each time 

the Participant transacts on the SEF, whether for its own account or on behalf of such 

Client, Customer or Sponsored Participant.

Rule 3101 Review of Application

(a) The SEF shall review a prospective Participant’s application and may ask for and review 

any additional information it deems relevant.

(b) The SEF in its discretion may conduct an investigation of any applicant.

Rule 3102 Acceptance as a SEF Participant

(a) If the SEF decides to admit an applicant as a Participant, it shall notify the applicant and 

state in such notice the date on which the applicant shall become a Participant.

(b) Once admitted, a Participant shall continue at all times to satisfy all the Participation 

Criteria set forth in Rule 3000(a) and all other applicable eligibility criteria the SEF may 

specify from time to time.

(c) Admission as a Participant only entitles the Participant to Trading Privileges and does not 

confer any right of ownership in the SEF, or right to attend or vote at meetings of the SEF, 

or right to share in the profits of the SEF.

Rule 3103 Denial, Conditioning or Termination of Participant Status

(a) The SEF may deny, condition or terminate Participant status of any Person:

(1) if such Person is unable to satisfactorily demonstrate its ability to satisfy the 

Participation Criteria or any other eligibility criteria required to become or remain 

a Participant or any of the representations and warranties made by the Participant 

is untrue;

(2) if such Person is unable to satisfactorily demonstrate its capacity to adhere to all 

applicable SEF Rules and any other Applicable Law, including those concerning 

recordkeeping, reporting, financial requirements and trading procedures;

(3) if such Person fails to comply with any limitation placed by the SEF on such Person;

(4) if such Person commits a violation of the SEF Rules;

(5) if such Person would bring the SEF into disrepute as determined by the SEF in its 

sole discretion; or

(6) for such other reason the SEF may reasonably determine.
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(b) If the SEF decides to deny or condition an application for admission as a Participant, or 

terminate a Person’s status as a Participant, the SEF shall promptly notify such Person (the 

“Affected Person”) thereof in a writing sent to the address in the SEF application form or 

maintained in the SEF’s records. Such Affected Person may, within seven (7) calendar 

days of receipt of such notification, request in writing that the SEF reconsider its 

determination.

(c) Within thirty (30) calendar days of receiving the request for reconsideration, the SEF shall 

either confirm, reverse or modify the denial, conditioning or termination of the Affected 

Person as a Participant, and shall promptly notify the Affected Person accordingly in a 

writing sent to the address in the SEF application form or maintained in the SEF’s records.

(d) Any denials, conditionings or terminations implemented by the SEF pursuant to this Rule 

3103 will be impartially enforced.

(e) Any denial, conditioning or termination that represents a suspension, expulsion, 

disciplinary or access denial action or other adverse action within the meaning of Part 9 of 

the CFTC Regulations may (to the extent required thereby) be subject to review by the 

CFTC pursuant to Part 9 of the CFTC Regulations.

Rule 3104 Duty to Keep Current

(a) If any material information in the Participant’s application becomes outdated or otherwise 

is inaccurate or incomplete for any reason, the Participant must promptly update the 

application.

(b) Within thirty (30) calendar days following the end of each calendar year, Participants shall 

review and revise, as necessary, all information provided in their applications and provide 

such revisions to the SEF.

Rule 3105 Withdrawal of Participant; Temporary Deactivation of Trading Privileges

(a) To withdraw from the SEF, a Participant must notify the SEF of its withdrawal. Such 

withdrawal shall be accepted and effective immediately upon receipt of such notice by the 

SEF, provided that the SEF may, in its reasonable discretion, refuse to accept a 

Participant’s withdrawal request or may postpone the effective date of withdrawal of a 

Participant if the SEF considers it necessary for the protection of the Participant’s 

Customers, other Participants or otherwise in the interests of the SEF.

(b) Upon the effectiveness of the withdrawal of a Participant, all rights and privileges of such 

Participant with respect to the SEF shall terminate (including, without limitation, Trading 

Privileges). Notwithstanding the accepted withdrawal of a Participant, the withdrawn 

Participant, and any Client, Customer or Sponsored Participant thereof, shall remain bound 

by the SEF Rules and subject to the jurisdiction of the SEF with respect to any and all 

matters arising from, related to or in connection with, the status, actions or omissions of 

such Person prior to such withdrawal and must cooperate in any SEF Proceeding as if the 

former Participant were still a Participant.
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(c) Notwithstanding the foregoing, a Participant may request, in writing, that the SEF 

temporarily deactivate its Trading Privileges. The SEF may approve or deny any such 

request in its sole discretion, and may approve any such request on such terms as the SEF 

shall determine in its sole discretion. Upon approval of any such request, the Participant’s 

Trading Privileges shall be deactivated and the Participant will not be permitted to execute 

Transactions on the SEF or otherwise access the SEF until its Trading Privileges have been 

reinstated by the SEF. The Participant shall incur no new fees during the period of its 

deactivation.

Rule 3106 Dissolution of Participants

Upon dissolution of a Participant, all rights and privileges of such Participant with respect to the 

SEF shall terminate, but all obligations of such Participant shall survive.

Rule 3107 Jurisdiction and Application of SEF Rules

(a) Prior to obtaining access to the SEF and each time a Participant, Customer, Client, 

Sponsored Participant or any other Person initiates or executes a transaction on or subject 

to the SEF Rules, directly or through an intermediary, such Participant, Customer, Client,

Sponsored Participant or other Person and any Supervised Person acting on its behalf shall 

be deemed to have expressly:

(1) consented to the jurisdiction of the SEF with respect to any and all matters arising 

from, related to, or in connection with, the status, actions or omissions of such 

Person;

(2) agreed to be bound by, and comply with, the SEF Rules and all Obligations, the 

DCO Rules and Applicable Law, in each case to the extent applicable to it;

(3) agreed to assist the SEF in complying with its legal and regulatory obligations, 

cooperate with the SEF, its Regulatory Services Provider(s) and the CFTC in any 

inquiry, investigation, audit, examination or proceeding, and authorizes the SEF to 

provide information regarding it to any Regulatory Services Provider, the CFTC or 

any Self-Regulatory Organization.

(b) At the time any Clearing Firm executes a Clearing Firm Agreement, such Clearing Firm 

shall be deemed to have expressly:

(1) consented to the jurisdiction of the SEF with respect to any and all matters arising 

from, related to, or in connection with, the status, actions or omissions of such 

Person;

(2) agreed to be bound by, and comply with, the SEF Rules and all Obligations, the 

DCO Rules and Applicable Law, in each case to the extent applicable to it;

(3) agreed to assist the SEF in complying with its legal and regulatory obligations, 

cooperate with the SEF, its Regulatory Services Provider(s) and the CFTC in any 

inquiry, investigation, audit, examination or proceeding, and authorizes the SEF to 
-30-

provide information regarding it to any Regulatory Services Provider, the CFTC or 

any Self-Regulatory Organization.

(c) Any Person (including any Authorized Trader) whose access to the SEF is suspended for 

any period, and, if applicable, any Client, Customer or Sponsored Participant thereof, 

remains subject to the SEF Rules and to the jurisdiction of the SEF throughout the period 

of suspension and must cooperate in any SEF Proceeding. Any Person whose access to the 

SEF is revoked or terminated, and, if applicable, any Client, Customer or Sponsored 

Participant thereof, shall remain bound by the SEF Rules and subject to the jurisdiction of 

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

the status, actions or omissions of such Person prior to such revocation or termination and 

must cooperate in any SEF Proceeding.

Rule 3108 Notices to Participants

(a) The SEF shall publish a notice with respect to each addition to, modification or clarification 

of the SEF Rules or of any action to implement any SEF Rules on the SEF’s website or via 

an electronic mail distribution 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 (each a “Notice to 

Participants”). For purposes of publication in accordance with the first sentence of this 

Rule 3108, it shall be sufficient (without limiting the discretion of the SEF as to any other 

reasonable means of communication) if a Notice to Participants is published on the SEF’s 

website.

(b) Any Notice to Participants published on the SEF’s website or otherwise provided to 

Participants shall be deemed to have been made to all of a Participant’s Supervised Persons, 

Clients, Customers and Sponsored Participants.

(c) Each Participant is required to review the “Notices to SEF Participants” section of the 

SEF’s website to make itself aware of material changes to the SEF Rules or other notices 

that may affect its rights and obligations as a Participant, and is responsible for conveying 

such information to its Supervised Persons, Clients, Customers and Sponsored Participants 

in accordance with Rule 3114(c).

Rule 3109 Authorized Traders

(a) Each Participant shall designate one or more Authorized Trader(s), which, in the case of a 

Sponsoring Participant, may include any Person appointed, employed or authorized by a 

Sponsored Participant as provided in Rule 3110. Participants shall be responsible to the 

SEF for acting with reasonable care in granting Authorized Trader status to any individual.

(b) By agreeing to become an Authorized Trader, an individual is deemed to expressly consent 

to the jurisdiction of the SEF and agrees to be bound by the duties and responsibilities of 

an Authorized Trader and to be subject to, and comply with, the SEF Rules and Obligations. 

Among other duties and responsibilities that the SEF may impose, an Authorized Trader 

must:
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(1) have the authority, at the SEF’s request, to adjust or withdraw any Order or 

Transaction submitted under any User ID assigned to him or her;

(2) conduct activity under any User ID assigned to him or her in compliance with all 

SEF Rules and Obligations; and

(3) ensure he or she has been assigned his or her own User ID.

(c) To designate an Authorized Trader, a Participant must follow the procedures established 

by the SEF. The SEF may establish criteria that individuals must fulfill to become an 

Authorized Trader.

(d) The SEF will maintain a list of all designated Authorized Traders for each Participant.

(e) The SEF may, in its sole discretion, refuse to approve an Authorized Trader or revoke or 

suspend the designation of an individual as Authorized Trader to protect other Participants 

and the integrity of the SEF or for any other reason and shall promptly notify the related 

Participant of such action.

(f) To request the termination of the designation of an individual as Authorized Trader, the 

Participant must follow the procedures established by the SEF.

(g) Each Authorized Trader shall be identified to the SEF in the manner prescribed by the SEF 

and shall be subject to the SEF Rules. It is the duty of the Participant to ensure that each 

Authorized Trader registration is current and accurate at all times.

(h) Without limiting the foregoing, prior to accessing the SEF each Authorized Trader consents 

to abide by the SEF Rules and Applicable Law and each Participant will ensure on an 

ongoing basis that: (i) none of its Authorized Traders is subject to a disqualification 

pursuant to any Applicable Law (unless an appropriate exemption has been obtained with 

respect thereto); (ii) each of its Authorized Traders will be technically proficient; (iii) each 

of its Authorized Traders will conduct its business in a fair and equitable manner; and 

(iv) each of its Authorized Traders will comply with the SEF Rules and Obligations and 

conduct its business in accordance with Applicable Law.

Rule 3110 Sponsored Access

(a) A Sponsoring Participant may extend Trading Privileges to one or more Sponsored 

Participants. If the Sponsoring Participant is not the Sponsored Participant’s Clearing Firm, 

the Sponsoring Participant will provide all relevant clearing information to the SEF on 

behalf of the Sponsored Participant. Each Sponsored Participant shall designate one or 

more Authorized Traders to transact on the SEF.

(b) The Sponsoring Participant is responsible for all Orders and Transactions placed by any 

Person acting on behalf of or in the name of the Sponsored Participant on the SEF as if 

such Orders or Transactions were placed by the Sponsoring Participant (whether or not the 

Sponsoring Participant was aware of and/or had approved the placing of such Orders or 
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Transactions). Any execution occurring as a result of an Order or Transaction entered by a 

Sponsored Participant shall be binding in all respects on the Sponsoring Participant.

(c) The Sponsoring Participant must monitor the Sponsored Participant’s access to the SEF 

and activity on the SEF, including, but not limited to, the entry, cancellation or other

processing of Orders, risk management, trade reporting, clearing and settlement of 

Transactions.

(d) The Sponsored Participant is not a Participant of the SEF. The SEF has no liability to, and 

the SEF owes no duties or obligations to, nor has any responsibility for, the Sponsored 

Participant. Notwithstanding anything herein to the contrary, the Sponsored Participant and 

any other Person using a User ID or login credentials linked to a Participant will be subject 

to, and must comply with, the SEF Rules, and may be subject to Disciplinary Action by 

the SEF for any violation or attempted violation of the SEF Rules or provisions of

Applicable Law for which the SEF has disciplinary jurisdiction. The Sponsored Participant 

will be deemed to have represented and warranted that it is an ECP and that it has all 

registrations, licenses and consents required under Applicable Law. The Sponsoring 

Participant further agrees to cooperate with the SEF, or any other regulator, in connection 

with any inquiry regarding the Sponsored Participant’s access and activities relating to the 

SEF and, in connection with such inquiry, the Sponsoring Participant shall ensure the 

cooperation of the Sponsored Participant and procure that the Sponsored Participant is 

contractually bound to cooperate with the SEF or any other regulator.

(e) The Sponsoring Participant shall ensure that:

(1) the Sponsored Participant, its directors, members, officers, employees and agents 

comply with Applicable Law and the policies and procedures issued or approved 

by the SEF and with all of the duties and/or obligations imposed on Participants 

under the SEF Rules as if the Sponsored Participant were a Participant for such 

purposes, except with respect to any such duties and/or obligations which 

manifestly only relate to the Sponsoring Participant;

(2) the Sponsored Participant takes reasonable security precautions to prevent 

unauthorized access to and use of the SEF, including unauthorized entry of 

information on the SEF and unauthorized use of information and data made 

available by the SEF; and

(3) the Sponsored Participant uses any market data for its own internal purposes only 

and only in accordance with the SEF Rules.

(f) The SEF shall obtain from each Sponsoring Participant a representation that each of its 

Sponsored Participants will be an ECP at the time each such Sponsored Participant 

transacts on the SEF.

(g) The SEF will promptly notify a Sponsoring Participant in writing of its approval, or refusal 

to approve, the designation of a Sponsored Participant. The SEF may, in its sole discretion, 

revoke, limit, restrict or suspend the designation of a Sponsored Participant, and shall 

notify the Participant of such action in accordance with SEF procedures.
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(h) A Sponsoring Participant that seeks to terminate the designation of a Sponsored Participant 

shall notify the SEF in writing, providing such information as the SEF may require. The 

SEF shall terminate the Sponsored Participant’s access to the SEF in accordance with 

procedures established by the SEF.

Rule 3111 [Reserved]

Rule 3112 Introducing Brokers 

(a) An Introducing Broker will be permitted to introduce Orders and execute Transactions on 

the SEF on behalf of a Customer (which may include another Participant or an Account 

Manager acting on behalf of a Client) where such Customer has so authorized the 

Introducing Broker. Any time an Introducing Broker introduces an Order or Transaction 

on the SEF on behalf of a Customer, such Introducing Broker shall be deemed to represent 

that the Customer on whose behalf it is acting has granted the Introducing Broker such 

authorization. An Introducing Broker shall provide the SEF with such notice and/or proof 

of such Customer authorization as the SEF may request from time to time.

(b) If authorized, an Introducing Broker may enter any Order, submit a Block Trade, or 

introduce to the SEF for execution any Transaction, permissible under the SEF Rules on 

behalf of such Customer.

(c) Each Customer shall be the principal to all executed Transactions resulting from Orders 

submitted by an Introducing Broker to the SEF on such Customer’s behalf (other than 

where the Customer is a Prime Broker Client executing a Prime Broker Transaction in the 

name of and on behalf of a Prime Broker, in which case the relevant Prime Broker shall be 

principal to such Transaction).

Rule 3113 Authorized Representatives

(a) Each Participant shall designate an Authorized Representative(s) who will represent the 

Participant before the SEF and its committees and receive notices on behalf of the 

Participant.

(b) An Authorized Representative shall be empowered by the Participant to act on its behalf 

and the SEF shall be entitled to rely on the actions of the Authorized Representative as 

binding on the Participant and each of its Authorized Traders.

(c) Each Participant must provide the SEF with current contact and other requested 

information for each of its Authorized Representatives so that the SEF is able to 

immediately contact the Authorized Representatives.

Rule 3114 Communications between the SEF and Participants

(a) Each Participant must provide the SEF with its current electronic mail address and 

telephone number and the electronic mail address and telephone number of each of its 

Authorized Traders and immediately (and in any event within 24 hours) update this 

information whenever it changes.
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(b) All communications between the SEF and the Participant will be transmitted by electronic 

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

(c) Each Participant shall be responsible for conveying such communications to all of its 

Supervised Persons, Clients, Customers and Sponsored Participants (and Authorized 

Traders thereof).

(d) Each Participant will be responsible for promptly reviewing and, if necessary, responding 

to all electronic communications from the SEF to the Participant or any of its Supervised 

Persons.

(e) All communications made to Participants shall also be deemed to have been made to all of 

its Supervised Persons, Clients, Customers and Sponsored Participants (and Authorized 

Traders thereof).

Rule 3115 Recording of Communications

The Market Regulation Department and/or Regulatory Services Provider(s) may record 

conversations and retain copies of electronic communications between the SEF, on one hand, and 

Participants, Sponsored Participants, Clients or Customers or any of their Supervised Persons or 

other agents, on the other hand. Any such recordings may be retained by the SEF or the Regulatory 

Services Provider in such manner and for such periods of time as the SEF may deem necessary or 

appropriate and in accordance with Applicable Law. The SEF or Regulatory Services Provider 

will retain such recording in compliance with CFTC Regulations.

MATERIAL CHANGES

Rule 3200 Change of Control; Non-Assignment

(a) A Participant must provide written notice to the SEF of any of the following changes to its 

ownership, control or business operations prior to any such change taking effect to the 

extent practicable and in any event no later than 48 hours after any such change takes effect:

(1) a merger of the Participant with another Person, or

(2) a transfer, issuance or other transaction that results in one Person owning 50% or 

more of the voting equity of the Participant or a transaction that results in the 

transfer of all or substantially all of the assets of the Participant.

(b) A Participant may not assign its rights as a Participant without the written consent of the 

SEF, which consent shall not be unreasonably withheld.

FEES

Rule 3300 Fees

(a) The SEF shall set the times and amounts of any assessments or fees (including access and 

utilization fees), costs and charges to be paid by Participants. By accessing the SEF, 
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Participants agree to be bound by the fee schedule in effect at the time the applicable SEF 

services are rendered.

(b) A Participant will be responsible for the payment of all fees charged to it with respect to 

any Transaction, including, without limitation, any Transaction that is (i) for any or no 

reason, not fully performed by the parties thereto or (ii) subsequently voided or rescinded.

(c) Assessments, fees, costs and charges and other amounts owed to the SEF are payable upon 

receipt of the invoice. If a Participant fails to pay when due any assessments, fees, costs 

and charges owed, and such payment obligation remains unsatisfied thirty (30) days after 

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

Privileges of such Participant as it deems necessary or appropriate.

Rule 3301 Volume Discounts

The SEF may from time to time establish financial incentives for meeting trading volume, liquidity 

thresholds and/or other standards as may be established by the SEF.

INDEPENDENT SOFTWARE VENDORS

Rule 3400 ISVs

(a) Consistent with Applicable Law, the SEF will provide access to its trading platform, 

services and data on a fair and nondiscriminatory basis to any ISV that complies with the 

SEF’s documentation and eligibility requirements for ISVs as set forth in the SEF Rules.

(b) An ISV that wishes to access the SEF must:

(1) consent to the jurisdiction of the SEF and agree to be bound by, and comply with, 

the SEF Rules and all Obligations, the DCO Rules and Applicable Law, in each 

case to the extent applicable to it;

(2) execute an ISV participation agreement in the form supplied by the SEF;

(3) pay the monthly access fees that may be established by the SEF from time to time, 

which fees will be comparable for ISVs receiving comparable access to, or services 

from, the SEF;

(4) comply with the applicable technical access standards, system compatibility 

requirements, security protocols and technical specifications for connection to the 

SEF as may be specified by the SEF from time to time;

(5) ensure that each Person that uses the ISV to access the SEF is either a Participant 

or a Client or Customer of a Participant;
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(6) in the case of any Order or Transaction submitted to the SEF through the ISV, 

provide sufficient detail to identify the Participant (and, if applicable, the 

Participant’s Client or Customer) as required by the SEF; and

(7) satisfy any other criteria that the SEF may require to perform its responsibilities as 

a Self-Regulatory Organization, comply with Applicable Law or provide services, 

provided such criteria are impartial, transparent and applied in a fair and 

nondiscriminatory manner.

(c) An ISV may provide data obtained from the SEF solely to Participants and/or Clients or 

Customers of a Participant in connection with such Participants’ and/or Clients’ or 

Customers’ actual and proposed trading activity on the SEF, and will not provide such data 

to any other swap execution facility, security-based swap execution facility, DCM, national 

securities exchange or other trading facility or system without the prior written consent of 

the SEF.

BUSINESS CONDUCT REQUIREMENTS

Rule 3500 Customers and Clients

No Participant shall enter an Order or enter into a Transaction in the name of a Customer or Client, 

unless the Customer or Client has so authorized the Participant. Any time an Introducing Broker 

or Account Manager introduces an Order or Transaction on the SEF on behalf of a Customer or 

Client (as applicable), such Introducing Broker or Account Manager shall be deemed to represent 

that the Customer or Client on whose behalf it is acting has granted the Introducing Broker or 

Account Manager such authorization. 

Rule 3501 Disclosure Requirements; Know Your Counterparty Requirements 

(a) With respect to Uncleared Swaps, Participants that are Swap Dealers or Major Swap 

Participants shall verify through representations or otherwise the status of each Swap 

counterparty as an ECP as provided in CFTC Regulations applicable to business conduct 

standards for Swap Dealers and Major Swap Participants in their dealing with 

counterparties.

(b) Participants that are Introducing Brokers must verify the status of each of their Customers

as an ECP.

(c) Participants that are Account Managers must verify the status of each of their Clients as an 

ECP.

(d) Participants that are Sponsoring Participants must verify the status of each of their 

Sponsored Participants as an ECP.

(e) Each Participant and Supervised Person, Client, Customer or Sponsored Participant of a 

Participant must comply with all disclosure requirements set forth in under Applicable Law 

including any additional disclosure requirements imposed by the SEF Rules.
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SECTION 4

TRANSACTION EXECUTION

This Section 4 prescribes Rules concerning trade practices and business conduct on the SEF and 

applies to all Orders and Transactions.

Rule 4000.A. Trading Hours

Except with respect to Emergencies, the SEF shall determine and publish the Business Days of the 

SEF and the Trading Hours for each Swap. Participants are prohibited from sending any Order or 

entering into any Transaction or using any other facility of the SEF outside of the designated 

Trading Hours for the relevant Swap. The Trading Hours for each Swap shall be twenty-three (23) 

hours per Business Day other than between 5:30 p.m. and 6:30 p.m. (Eastern Time), in each case, 

subject to any variation as may be published by the SEF in a Notice to Participants or included in 

the relevant Swap Specification.

Rule 4000.B. Swap Specifications

(a) Notwithstanding any provision of the SEF Rules to the contrary, the terms and conditions 

set forth in the Swap Specification with respect to a particular Swap shall govern the trading 

in such Swap on the SEF and, in the event of any conflict between the general terms of the 

SEF Rules excluding the Swap Specifications and the particular terms of the SEF Rules set 

forth in the Swap Specification, the particular terms of the SEF Rules set forth in the Swap 

Specification shall govern with respect to trading in the relevant Swap on the SEF.

(b) The Swap Specification for each individual Swap may specify:

(1) different classes of Participants eligible to trade such Swaps. Each such class of 

Participants shall have the rights and obligations specified by the Swap 

Specification for each such Swap;

(2) whether such Swap may be settled via cash settlement, physical delivery of the 

underlying commodity, or by any other means, as applicable; and

(3) the method for determining settlement prices.

(c) The SEF shall permit trading only in Swaps that are not readily susceptible to manipulation.

Rule 4001 Procedures

(a) With respect to trading on or though the SEF or subject to the SEF Rules, the SEF may 

adopt, without limitation, procedures relating to Transactions in Swaps and trading on the 

SEF or subject to the SEF Rules, including procedures to:

(1) disseminate the prices of bids and offers on, and Transactions in, Swaps;

(2) record, and account for, Swaps and SEF activity and regulate administrative matters 

affecting Swaps and SEF activity;
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(3) establish daily limits (or such other frequency as may be determined from time to 

time by the SEF) on the notional amount and/or risk of Orders or Transactions that 

may be submitted by a Participant through the SEF or subject to the SEF Rules;

(4) establish limits on Swaps that may be held by a Participant, Customer, Client or 

Sponsored Participant;

(5) establish a limit on the maximum daily price fluctuations for any Swap and provide 

for any related restriction or suspension of trading in the Swap; and

(6) establish minimum price quoting increments for each Swap.

(b) The SEF may, in its discretion and at any time, amend any procedures adopted pursuant to 

Rule 4001(a), and will publish the amendments in a Notice to Participants or in any other 

manner determined appropriate by the SEF.

Rule 4002 Required Identifications

(a) Each Participant and all related Authorized Traders (including those of its Sponsored 

Participants) must have a User ID assigned in accordance with the procedure adopted by 

the SEF from time to time in order to access the SEF. The User ID assigned to an 

Authorized Trader may not be reassigned to another Authorized Trader.

(b) Orders entered on the SEF must include the User ID assigned to the Authorized Trader. An 

Authorized Trader is prohibited from allowing any other Person to use such unique 

identification to enter Orders on the SEF. No Person may enter Orders on the SEF using a 

User ID that has not been assigned to such Person.

(c) Each Participant shall be responsible for all Orders placed or Transactions executed using 

any of the User IDs assigned to its Authorized Traders or those of any of its Sponsored 

Participants. Prime Brokers shall be responsible for all Prime Brokerage Orders placed or 

Prime Broker Transactions executed by a Prime Broker Client acting in its capacity as such 

subject to and in accordance with the relevant Prime Broker Acknowledgement Letter and 

Rules 4105 and 5103.E.

(d) Participants must terminate an Authorized Trader’s access to the SEF upon termination of 

the Authorized Trader’s employment at, or authorization or appointment by, the Participant 

or Sponsored Participant (as applicable).

Rule 4003.A. Execution of Transactions

(a) No Person shall execute a Required Transaction subject to the SEF’s jurisdiction other than 

via the Order Book unless such Transaction is a Block Trade, Package Transaction (Order 

Book Exempt) or a Clearing Exempt Transaction. All Required Cross Transactions will be 

subject to the time delay requirement set forth in Rule 4011, including TAS Cross 

Transactions that are Required Cross Transactions.
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(b) No Person shall enter into a Clearing Exempt Transaction subject to the SEF’s jurisdiction 

unless it (or, if applicable, its Customer, Client or Sponsored Participant) or the 

counterparty to the Swap is eligible for and elects to rely on a Clearing Exception. Upon 

request of the SEF, a Participant, Sponsored Participant, Customer or Client shall submit 

to the SEF all documentation supporting eligibility for the applicable Clearing Exception.

(c) Permitted Transactions (including Permitted Cross Transactions) may be executed through 

the SEF’s Order Book as described in Rule 4003.B. In addition, Permitted Cross 

Transactions may be executed away from the SEF’s Order Book as described in Rule 4004. 

Certain Permitted Transactions may also be executed via Risk Mitigation Sessions as 

specified in Rule 4018 and the tpSEF Risk Mitigation Procedures.

(d) Any swap component of a Package Transaction (Order Book Exempt) may be executed in 

the same manner as any Permitted Cross Transaction as described in Rule 4004 or, if 

available for execution on the SEF’s Order Book, through the SEF’s Order Book.

(e) Block Trades are required to be executed in accordance with the requirements of Rule 

4016.

(f) No executed Transactions may be submitted to the SEF other than Block Trades that occur 

away from the SEF and that are executed in accordance with the requirements of Rule 

4016.

(g) TAS Cross Transactions must be submitted to the SEF and executed in accordance with 

the requirements of Rule 4003.C.

(h) Any Order or Cross Transaction that is submitted to the SEF may be cancelled prior to 

execution. 

Rule 4003.B. Order Book

(a) All Orders posted to the Order Book are firm (i.e., there are no indications of interest or 

indicative quotes allowed).

(b) An acceptable Order must include a specific price and size, as well information meeting 

the requirements of Rule 8001.

(c) Order Types.

(1) An acceptable Order must indicate the time in force, which may include the 

following:

(i) “Day” (or “Fill-and-Store”) Orders are only good for the Business Day and 

applicable Trading Hours in which they are entered.

(ii) “Fill-or-Kill” (“FOK”) Orders must be immediately executed for the entire 

size of the Order or are cancelled automatically.
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(iii) “All-or-None” (“AON”) Orders must be executed for the entire size of the 

Order or are cancelled automatically. AON Orders enter the Order Book as 

passive Orders.

(iv) “Immediate or Cancel” (“IOC”) Orders must be executed fully or partially 

and, if partially, the remaining quantity is cancelled automatically.

(v) “Good ‘til Time” (“GTT”) Orders are cancelled after a specified time if no 

matching Order is placed.

(vi) “Good ‘til Price” (“GTP”) Orders will be cancelled if the reference price of 

the specified instrument is moved up or down (depending upon whether the 

Order is a bid or offer).

(vii) “One Cancels Other” (“OCO”) Orders are paired Orders stipulating that if 

one of the Orders is executed, the other is automatically cancelled.

(2) Good ‘til Time, Good ‘til Price and One Cancels Other Orders are all also Day 

Orders, in that they are only good for the Business Day and applicable Trading 

Hours in which they are entered, even if the time, price or execution conditions are 

not otherwise met.

(3) Not all Orders types are available for all Swaps. The table below shows the Order 

types available for each asset class:

Asset Class Day FOK AON IOC GTT GTP OCO

Credit   ×    

Commodities   × ×  × ×

Rates   US$ only   × EUR/GBP 

only

Non-Deliverable Forwards   ×    

Equities   ×   × ×

FX Options  × ×    

(d) Pre-Trade Controls.

(1) Order Limits. The SEF may, within its sole discretion, set Order limits by product 

and by instrument within a particular asset class. The following types of Order 

limits may be imposed:

(i) Order Size Limit (OSL): This is the maximum size allowed for any single 

Order. Any Order submitted will be checked against the product/asset 
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class’s Order Size Limit, and if the Order exceeds this limit, such Order will 

be rejected and the Participant will be notified.

(ii) Order Price Limit (OPL): This is the maximum price differential allowed 

for any Order. Any Order submitted will be checked against the 

product/asset class’s Order Price Limit and if the Order exceeds this limit, 

it will be rejected and the Participant will be notified. The price differential 

will be calculated as follows:

(Order price entered) - (Instrument Reference Price) = |Price Differential|

The “Instrument Reference Price” is an estimated current price for the 

relevant Swap, based on either current trading data for that instrument on 

the SEF and elsewhere, or, in the absence of current trading data for the 

relevant Swap, implied from current trading data for other instruments.

(2) Price Tick Deviation. If the price for any Order entered into the Order Book is 

greater than (i) the top contra-Order price or, if no contra-Orders exist in the Order 

Book, the Instrument Reference Price, plus (ii) the specified number of tick 

increments in the Maximum Price Tick Deviation parameter for the Swap, the 

Order will be rejected. The Maximum Price Tick Deviation parameter for each 

Swap is determined by the SEF from time to time in its sole discretion.

(3) Restriction Against Self-Trading. The Order Book system is configured to prohibit 

the matching of Orders placed by Authorized Traders of the same Participant.

(e) Implied Orders. The SEF offers limited implied order functionality. Under this 

functionality, individual separate Orders, which in aggregate would form the legs of a 

liquid spread trade, are displayed in the Order Book both as individual outright trades and 

in aggregate as a spread trade. This functionality is only made available for tenors at which 

spread trades are customarily transacted as determined by the SEF from time to time and 

displayed on the Order Book.

(f) Order Entry.

(1) Orders, including Orders for Required Cross Transactions and Permitted Cross 

Transactions, may be entered into the Order Book for execution either (i) directly 

by any Participant that has established direct connectivity to the SEF’s Order 

Management System, or (ii) by an Execution Specialist acting on the instruction of 

a Participant. Order information may be communicated by Participants to 

Execution Specialists via telephone and/or via electronic modes of communication 

such as email and instant message.

(2) Certain Participants that have elected not to establish direct connectivity to the 

OMS have executed a “tpSEF Inc. Terms of Use and SEF Order Book Waiver” (the 

“Order Book Waiver”) in lieu of the “tpSEF Inc. Terms of Use.” During the 

effectiveness of its “Order Book Waiver,” a Participant must access the Order Book 
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via an Execution Specialist both for Transactions that must be executed on Order 

Book pursuant to Rule 4003.A. and for Transactions voluntarily executed on the 

Order Book. Any such Participant may elect to establish direct connectivity to the 

OMS at any time by executing the “tpSEF Inc. Terms of Use” and terminating its 

“Order Book Waiver.” For the avoidance of doubt, all Participants, including those 

that have signed the “Order Book Waiver,” are required to comply with the 

requirements of Rule 4003.A. relating to the execution of Required Transactions.

(3) An Order placed on the Order Book may be cancelled provided such Order has not 

been executed. The price or size of an Order placed on the SEF that has not fully 

traded may be revised. If the size is reduced, the time priority originally assigned 

to the Order does not change. Revising the price or increasing the size will reset the 

Order’s time priority in the queue to the time the SEF receives the revision. Order 

cancellations or revisions may be communicated by Participants to Execution 

Specialists via telephone and/or via electronic modes of communication such as 

email and instant message.

(4) When an Authorized Trader logs off and any relevant time-out has expired, (i) all 

Orders on the Order Book submitted by that Authorized Trader may be terminated 

or may remain live, depending on the manner in which the Authorized Trader has 

configured his or her account and (ii) where the Authorized Trader has entered the 

Order on behalf of a Customer, all such Customer Orders will be terminated. If for 

any reason the connection to the SEF is lost and not-re-established within any 

relevant time-out period, all Orders entered from that location on the SEF are 

deactivated.

(g) Order Book Display and Interaction.

(1) Once an Order is entered into the Order Book, the Order is displayed 

simultaneously to all Participants that have established direct connectivity to the 

OMS and may be transacted on as described in Rule 4003.B.(h) below.

(2) All Orders will be displayed on an anonymous basis and each Order Book platform 

will show, in real-time, the best price and the depth per product.

(3) For Participants that have direct connectivity to the OMS, each Order Book 

platform displays all executions to all Participants, and for each individual 

Participant, its Order and execution history for the trading day.

(4) The SEF’s Order Book supports the following Order interactions on any active 

Order, which may be taken only by the Participant who submitted the Order or by 

an Execution Specialist acting on the Participant’s instructions:

(i) Amend, and

(ii) Cancel. (If a partially executed Order is cancelled, only the balance of the 

Order is cancelled.)
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(5) Information regarding Orders on the Order Book will be provided upon request to 

any Participant by an Execution Specialist via telephone and/or via electronic 

modes of communication such as email and instant message.

(h) Matching of Orders on the Order Book.

Orders may be either matched automatically or manually hit or lifted as described in this 

Rule 4003.B.(h). In each case, Orders will be executed using price and time priority.

(1) Ability to Trade. In the case of either Manual Matching or Automatic Matching as 

described in this Rule 4003.B.(h):

(i) An Order for a Cleared Swap may only be hit or lifted by, or matched with 

a contra-Order for, a Participant (or a Participant’s Customer or Client) that 

is, or whose Clearing Firm is, a Clearing Member at the DCO at which the 

Swap is to be cleared, and 

(ii) An Order for an Uncleared Swap may only be hit or lifted by, or matched 

with a contra-Order for, a Participant (or a Client or Customer of a 

Participant) that has swap trading relationship documentation in place with 

the relevant counterparty and only to the extent that each counterparty has 

available credit line, both as described in Rule 4013.B.

(2) Manual Matching. Subject to the requirements of Rule 4003.B.(h)(1) above, a 

Participant may manually hit or lift, in whole or in part, any resting Order within 

the Order Book that is (i) at the best price(s) within the market for the relevant 

product, and (ii) if there are multiple Orders at the same price(s), entered first in the 

Order Book.

(3) Automatic Matching. Subject to the requirements of Rule 4003.B.(h)(1) above and 

depending on Order type (as described in Rule 4003.B.(c)) and the Orders resting 

on the Order Book, Orders entered into the Order Book will be automatically (i) 

matched (fully or partially) to one or more Orders within the Order Book based on 

price and time priority or (ii) cancelled. Certain Order Book platforms do not 

support Automatic Matching.

Rule 4003.C. Trade at Settlement Cross Transactions

(a) A Participant may submit to the SEF for execution a Cross Transaction for which the fixed 

rate will be the ICE Swap Rate for the “USD Rates 1100” benchmark run and for the 

relevant tenor published by ICE Benchmark Administration Limited at 11:15 a.m. New 

York time on the date of the Participant’s submission (each such Cross Transaction, a “TAS 

Cross Transaction”). TAS Cross Transactions may be submitted to the SEF between 7 a.m. 

New York time and 10:59 a.m. New York time on each day the SEF is open for business.

(b) Each TAS Cross Transaction submitted to the SEF will be held in abeyance by the SEF, 

and will not be deemed executed, until the relevant ICE Swap Rate has been announced 

and, in the case of any TAS Cross Transaction that is a Required Cross Transaction, the 
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time delay requirement set forth in Rule 4011 has been applied as described in Rule 

4003.C.(c) below.

(c) For any TAS Cross Transaction that is a Required Cross Transaction, the time delay 

requirement described in Rule 4011 will be applied immediately following the 

announcement of the relevant ICE Swap Rate.

(d) Once a TAS Cross Transaction has been executed: (i) the SEF will generate and send a 

Confirmation to each counterparty in accordance with Rule 4012; (ii) the Transaction will 

be reported by the SEF to an Approved SDR in accordance with Rule 8005; and (iii) if it 

is a Cleared Swap, the Transaction will be routed by the SEF to the relevant DCO in 

accordance with Rule 4013.A.

Rule 4004 Permitted Cross Transactions

(a) Permitted Cross Transactions may either be:

(1) Executed through the SEF’s Order Book as described in Rule 4003.B., or

(2) Submitted to the SEF for execution away from the SEF’s Order Book either (i) to 

an Execution Specialist, or (ii) for FX options, non-deliverable forwards and 

Transactions in the Rates asset class, directly by Participants that have established 

direct connectivity to the SEF.

(b) Permitted Cross Transactions that are submitted to an Execution Specialist for execution 

away from the Order Book may be executed through either (1) the SEF’s Deal Management 

System, or (2) if available, the OMS using Off-Book Ticket Functionality. A Participant 

submitting a Permitted Cross Transaction to an Execution Specialist must provide the 

information required by Rule 8001. Permitted Cross Transactions may be communicated 

to an Execution Specialist via telephone and/or via electronic modes of communication 

such as email and instant message.

(c) Permitted Cross Transactions submitted directly to the SEF for execution away from the 

Order Book by Participants that have established direct SEF connectivity will be executed 

as follows:

(1) Through the OMS using Off-Book Ticket Functionality for Permitted Cross 

Transactions in the Rates asset class and non-deliverable forwards, and

(2) Through the SEF’s Deal Management System for FX options.

Rule 4005 Mishandling of Customer Orders

Any Participant that mishandles any Customer Order is responsible for all remedial actions with 

respect to such Order.
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Rule 4006 Trading Halts

The SEF, in its sole discretion, may declare a trading halt at any time.

Rule 4007 Termination of the SEF Connection

The SEF shall have the right to summarily terminate the direct, electronic connection of any 

Participant to the SEF. Additionally, the SEF shall have the right to direct a Participant to 

immediately terminate the direct, electronic access to the SEF of any Sponsored Participant. Any 

such termination shall be impartially enforced and shall be invoked only for technical reasons. Any 

affected Participant or Sponsored Participant shall continue to have access to the SEF by means of 

an Execution Specialist, unless such access is denied in accordance with the procedures set forth 

in Rule 3103 or elsewhere in the SEF Rules. 

Rule 4008 Risk Controls

(a) The SEF may, in its sole discretion, to protect other Participants and the integrity of the 

SEF, reject any Order or Transaction placed or reported on the SEF.

(b) The SEF shall have the right to take any action to prevent or reduce the potential of market 

disruption, including, but not limited to, market restrictions that pause or halt trading, if 

such action is in the best interest of the swap markets and/or the SEF.

Rule 4009 Priority of Customers’ Orders

No Participant that is an Introducing Broker shall enter an Order into the SEF 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, including, without limitation, an Order allowing discretion as to 

time and price, when such Introducing Broker is in possession of any Order in the same Swap for 

its Customer that the SEF is capable of accepting.

Rule 4010 Trading Against Customers’ Orders Prohibited; Withholding Orders 

Prohibited

(a) No Participant in possession of a 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) The foregoing restriction shall not apply to the following:

(1) Block Trades, and

(2) Transactions where the Customer has granted prior consent and such consent is 

permitted under Applicable Law.

(c) Except as otherwise explicitly permitted under this Rule 4010(c) and Rule 5203(b), no 

Person shall (i) disclose another Person’s Order to buy or sell except to a designated SEF 
-46-

Official or the CFTC, (ii) solicit or induce another Person to disclose Order information or 

(iii) take action or direct another to take action based on non-public Order information, 

however acquired. The mere statement of opinions or indications of the price at which a 

market may open or resume trading does not constitute a violation of this Rule. Nothing 

contained in this Rule 4010(c) shall prevent a Person from disclosing information as may 

be required by legal process (including subpoena or demand for productions) or to such 

Person’s agents or advisors (including, but not limited to, accountants and auditors and 

legal counsel).

(d) Any Participant entering Orders on the SEF for its Customer or Client 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 Customer or Client.

(e) A Participant must immediately enter into the SEF all Orders received from its Customers 

that are executable immediately. If a Participant cannot immediately enter into the SEF an 

Order received from its Customer, the Participant must enter the Order into the SEF as 

soon as practicable, and must immediately create an electronic record as provided in Rule 

8002.

Rule 4011 Time Delay Requirement for Required Cross Transactions

(a) With respect to Required Cross Transactions, the following conditions must be satisfied:

(1) in the case of an execution by a Participant as principal/dealer against a customer 

Order, the Customer Order shall be entered into the Order Book as a firm quote and 

exposed to the market for at least 15 seconds before the Participant’s Order may be 

entered, and

(2) in the case of an execution by a Participant acting as broker of two customers’ 

Orders against each other, one side of the potential Transaction (the “Displayed 

Order”) shall be entered into the Order Book as a firm quote and exposed to the 

market for at least 15 seconds before the second side of the potential Transaction

(the “Waiting Order”) may be entered.

(b) With respect to a Required Cross Transaction subject to Rule 4011(a)(2) above, any 

Participant, Sponsored Participant, Customer or Client whose Order is the Waiting Order 

shall not, directly or indirectly, execute against the Displayed Order prior to the time that 

entry of the Waiting Order is permitted under Rule 4011(a)(2) above.

Rule 4012 Confirmations and USIs

(a) The SEF will generate and send a Confirmation to each counterparty to a Transaction

(which, in the case of a Prime Broker Transaction, will be the relevant Prime Broker) at 

the time of execution of such Transaction; provided that where a counterparty to a 

Transaction is a Customer, the Confirmation may be provided to the Customer’s 

Introducing Broker in accordance with Rule 4012(f); and provided further that where a 

Prime Broker Client executes a Prime Broker Transaction, a copy of the Confirmation shall 

be sent to the Prime Broker Client. Upon receipt of a Confirmation, such counterparty, 
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Introducing Broker or Prime Broker Client (as applicable) shall, as soon as practicable, 

review the contents of such Confirmation and promptly report any errors or omissions to 

the SEF.

(b) The Confirmation (including, with respect to Uncleared Swaps, the Terms Incorporated by 

Reference as defined in Rule 4012(d)(1)) shall legally supersede any previous agreement 

and shall constitute a confirmation as defined in CFTC Regulation 45.1. The Confirmation 

shall contain, among other things:

(1) the USI for the Transaction; and

(2) the identity of the Swap Data Repository to which the Transaction is being reported.

(c) With respect to certain products, Transactions and counterparties, a Confirmation may be 

provided on the SEF’s behalf by MarkitSERV’s Organized Trading Venue (OTV) 

Confirmation Service or other similar confirmation service. Subject to Rule 4012(d),

regardless of the means of delivery, pursuant to these rules, each Participant, Sponsored 

Participant, Customer and Client agrees that the Confirmation represents legally binding 

documentation memorializing the agreement of the parties to all the terms of the 

Transaction.

(d) Confirmations for Uncleared Swaps.

(1) With respect to any Uncleared Swap, the economic terms specific to the 

Transaction shall be reflected in a written communication (the “Trade 

Communication”) sent by the SEF to each counterparty, Introducing Broker or 

Prime Broker Client in accordance with Rule 4012(a). The Trade Communication, 

together with the documents and agreements (including, without limitation, ISDA 

master agreements, other master agreements, terms supplements, master 

confirmation agreements and incorporated industry definitions) governing such 

Transaction (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. The provisions of this Rule 

4012(d) relating to Terms Incorporated by Reference rely on relief granted by the 

CFTC’s Division of Market Oversight in No-Action Letter 17-17, which expires on 

the effective date of any changes to the relevant CFTC Regulations.

(2) In satisfaction of the obligations imposed on the SEF under CFTC 

Regulation 37.6(b), each Trade Communication (and thus each Confirmation) is 

deemed to incorporate the Terms Incorporated by Reference. All Confirmations for 

Uncleared Swaps that are generated and issued directly by the SEF shall state that 

they incorporate by reference any previously-negotiated freestanding agreement of 

the counterparties governing such Transaction.

(3) In the event of any conflict or inconsistency between (i) the Trade Communication 

and (ii) the Terms Incorporated by Reference, the Trade Communication shall 

prevail to the extent of any such conflict or inconsistency, and each Trade 

Communication will state the same.
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(4) For each Uncleared Swap executed on or pursuant to the SEF Rules, each 

previously-negotiated freestanding agreement of the counterparties included in the 

Terms Incorporated by Reference must be available to the SEF and/or the CFTC 

staff upon request within a reasonable period of time. Any such agreements 

provided to the SEF in connection with a CFTC request will be furnished to the 

CFTC as soon as they are available.

(e) The USI referred to in 4012(a) above shall be created by the SEF and transmitted to each 

counterparty as soon as technologically practicable in accordance with CFTC Rule 

45.5(a)(2).

(f) By executing a Transaction on the SEF through an Introducing Broker, each Customer is 

deemed to authorize the SEF to send Confirmations of such Transactions to the applicable 

Introducing Broker and to authorize such Introducing Broker to accept such Confirmations 

on behalf of such Customer.

(g) By providing a Prime Broker Acknowledgement Letter to the SEF, each Prime Broker is 

deemed to authorize the SEF to send Confirmations of Prime Broker Transactions to the 

applicable Prime Broker Client and, in the case of a Prime Broker Transaction transacted 

through an Introducing Broker, to the applicable Introducing Broker, subject to Rule 

4105(b). 

Rule 4013.A. Cleared Swaps

(a) Each Cleared Swap shall be cleared through the DCO indicated in the Swap Specification 

or agreed by the parties in accordance with the Applicable Law, provided that the DCO 

must be one of those recognized by the SEF. The DCOs currently recognized by the SEF 

are:

(1) ASX Clear (Futures) Pty Limited

(2) Chicago Mercantile Exchange, Inc.

(3) Eurex Clearing AG

(4) ICE Clear Credit LLC

(5) Japan Securities Clearing Corporation

(6) LCH.Clearnet LLC

(7) LCH.Clearnet Limited

The SEF may recognize additional DCOs either through amendment of this Rule 4013.A. 

or by issuance of a Notice to Participants.

(b) For each Cleared Swap a Participant expects to enter into via the SEF or subject to the SEF 

Rules (whether for itself or for a Client, Customer or Sponsored Participant), the Participant 
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or a Participant’s Client, Customer or Sponsored Participant, as applicable, must establish 

a clearing account with the relevant DCO or with a Clearing Firm that is a Clearing Member 

of such DCO.

(c) The SEF shall route each Cleared Swap executed on the SEF (and accepted for clearing by 

a Clearing Firm if the relevant party to the Transaction is Non-Self-Clearing) to the relevant 

DCO as soon as technologically practicable after execution, and in no event later than ten 

(10) minutes after execution. The SEF may do so either by submitting the Cleared Swap 

directly to the DCO or by routing the Cleared Swap through an Affirmation Hub or other 

middleware provider. A Transaction will be deemed to have been accepted for, or rejected 

from, clearing upon receipt of appropriate notice, in accordance with Applicable Law, from 

the DCO or from a third party acting on behalf of the DCO as authorized by the DCO for 

such purpose. The acceptance of a Transaction for clearing shall not relieve any Participant, 

Client or Customer of the duty to act in good faith and with reasonable care and diligence.

(d) If a Transaction in a Cleared Swap (including a Transaction that is a component leg of a 

Package Transaction) is rejected by the DCO or a third party acting on behalf of the DCO, 

such Transaction is void ab initio and shall be cancelled by the SEF. Trades that are rejected 

from clearing may not be held in a suspended state and then re-submitted.

(e) Rejected Transactions in Cleared Swaps.

(1) If the SEF determines pursuant to the procedures set forth in Rule 5103.C. that a 

Transaction in a Cleared Swap (including a Transaction that is a component leg of 

a Package Transaction) is rejected from clearing (i) because of a clerical or 

operational error or omission made by the SEF or by one of the counterparties to 

the Transaction or its agent, or (ii) in the case of a component leg of a Package 

Transaction, due to the sequencing of the submission of the component legs of the 

Package Transaction, a new trade, with terms and conditions that match the terms 

and conditions of the original trade, other than any such error or omission and time 

of execution, may be executed on the SEF and submitted for clearing without 

having been executed pursuant to the methods set forth in CFTC Regulations 

37.9(a)(2) or 38.500.

(2) If the SEF is identifies and determines how to correct the error or omission, it may 

execute the new trade without obtaining the consent of the counterparties.

(3) If the SEF is unable to determine how to correct the error or omission, the SEF, at 

its election, may either (x) seek guidance from the counterparties (and, if applicable, 

their agents and/or Clearing Firms) with respect to how to correct the error after 

which the SEF may then correct the error with the consent of both counterparties, 

or (y) elect not to fix the Transaction, in which case the Transaction will be treated 

as void ab initio and shall be cancelled by the SEF.

(4) Execution of a new trade pursuant to this Rule 4013.A.(e) must comply with the 

requirements specified in Rule 4017 and must occur as quickly as technologically 

practicable after receipt of notice of the rejection by the DCO, but, in any event, no 
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later than sixty (60) minutes from issuance of such notice. If the resubmitted 

Transaction is rejected, such Transaction will be void ab initio and shall be 

cancelled by the SEF. The counterparties may not resubmit a new Transaction a 

second time.

(5) The procedure set forth in this Rule 4013.A.(e) is not available with respect to 

Transactions that are rejected from clearing for credit reasons.

(6) This Rule 4013.A.(e) relies on relief granted by the CFTC’s Divisions of Market 

Oversight and Clearing and Risk in No-Action Letter 17-27, which expires on the 

effective date of revised CFTC Regulations that address clerical or operational 

errors.

(f) Erroneously Cleared Transactions.

(1) If it is determined pursuant to the procedures set forth in Rule 5103.C. that a 

Transaction in a Cleared Swap (including a Transaction that is a component leg of 

a Package Transaction) was incorrectly executed or cleared as the result of a clerical 

or operational error or omission, the SEF may permit the original counterparties to 

the Transaction to enter into a prearranged Transaction on the SEF that offsets the 

Transaction carried on the DCO’s books (an “Offsetting Transaction”), without the 

Offsetting Transaction having to be executed pursuant to the methods required in 

CFTC Regulations 37.9(a)(2) and 38.500. The SEF may also permit the original 

counterparties (or, if the wrong legal entity was assigned as a counterparty to the 

original Transaction, the intended counterparties) to enter into a prearranged 

Transaction on the SEF that corrects the errors in the original Transaction 

(“Correcting Transaction”), without the Correcting Transaction having to be 

executed pursuant to the methods required in CFTC Regulations 37.9(a)(2) and 

38.500.

(2) If the SEF identifies and determines how to correct the error or omission, it may 

execute the Offsetting Transaction and the corresponding Correcting Transaction 

without obtaining the consent of the counterparties. 

(3) If the SEF is unable to determine how to correct the error or omission, the SEF may 

either (x) seek guidance from the counterparties to the Transaction and, if 

applicable, their agents and/or Clearing Firms, after which the SEF may then 

correct the error by executing an Offsetting Transaction and corresponding 

Correcting Transaction with the consent of both counterparties, or (y) elect not to 

correct the error, in which case the original Transaction shall stand as executed.

(4) Offsetting Transactions and Correcting Transactions executed pursuant to this Rule 

4013.A.(f) must comply with the requirements specified in Rule 4017 and must be 

executed and cleared no later than three (3) days after the original, erroneous 

Transaction was executed.
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(5) The procedure set forth in this Rule 4013.A.(f) is available only with respect to 

clerical or operational errors or omissions made by the SEF, a counterparty to a 

Transaction or an agent of a counterparty to a Transaction.

(6) This Rule 4013.A.(f) relies on relief granted by the CFTC’s Divisions of Market 

Oversight and Clearing and Risk in No-Action Letter 17-27, which expires on the 

effective date of revised CFTC Regulations that address clerical or operational 

errors.

(g) The SEF shall have the right to (i) suspend Trading Privileges of the Participant(s) or 

Sponsored Participant(s) that executed one or more rejected Transactions or prohibit 

further trading on behalf of the Client(s) or Customer(s) on whose behalf any rejected 

Transaction(s) were executed, or (ii) take any other action permitted by the SEF Rules. The 

liability for any losses arising out of or in connection with a rejected Transaction will be 

determined by the parties to the Transaction. For the avoidance of doubt, the SEF will have 

no liability for any such losses.

(h) It shall not be a condition for access to the SEF that any Participant be subject to a breakage 

agreement. This includes breakage agreements in respect of Package Transactions.

(i) Each Person that is registered, or required to be registered, with the CFTC as a Swap Dealer 

or Major Swap Participant is responsible for compliance with the mandatory trading 

requirement under Section 2(h)(8) of the CEA when such Person enters into, or facilitates 

entry into, a Swap that is subject to the Clearing Requirement.

(j) The clearing services provided by a DCO in respect of a Cleared Swap will be governed 

by the rules, policies and procedures of that DCO. In addition, with respect to any DCO 

that has been granted an exemption from registration as such, the clearing services provided 

by such DCO must comply with any terms and conditions imposed on that DCO by the 

CFTC in connection with the DCO’s exemption from registration.

(k) Procedures for Cleared Swaps Routed Through an Affirmation Hub.

(1) Each Cleared Swap that is routed to the relevant DCO through an Affirmation Hub 

shall be routed in accordance with the following procedures:

(i) (x) All Cleared Swaps resulting from Risk Mitigation Sessions, and (y) all 

Cleared Swaps that (A) are executed directly on the Order Book without the 

assistance of an Execution Specialist and (B) do not involve intermediation 

by an Introducing Broker, shall be automatically submitted by the 

Affirmation Hub to the relevant DCO as soon as technologically practicable 

after receipt from the SEF, without Participants or Customers being 

provided the opportunity to Affirm; and

(ii) All other Cleared Swaps must be Affirmed by Participants or Customers, as 

applicable, as soon as technologically practicable after execution so that 

each such Cleared Swap is routed to and received by the applicable DCO 

no later than ten (10) minutes after execution.
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(2) Failure by a Participant or Customer to Affirm a Cleared Swap routed through an 

Affirmation Hub within the time frame required by Rule 4013.A.(k)(1)(ii) shall be 

considered a violation of the SEF Rules; provided that:

(i) Such failure shall be a violation of the SEF Rules only by the Participant(s) 

or Customer(s), as applicable, that failed to Affirm the Cleared Swap in 

accordance with Rule 4013.A.(k)(1)(ii); and

(ii) No such failure shall be a violation of the SEF Rules where the failure, as 

determined in the SEF’s discretion, was substantially the result of any errors 

or delays caused by the SEF, any Execution Specialist, the Affirmation Hub 

or any event (such as loss of internet connectivity, power or other force

majeure) beyond the reasonable control of the Participant or Customer.

(3) The Market Regulation Department shall, on a monthly basis, review the previous 

month’s Affirmations by Participants and Customers for compliance with this Rule 

4013.A.(k). Notwithstanding such regular monthly reviews, the SEF may at any 

time conduct investigations of possible violations of Rule 4013.A.(k)(1)(ii) in 

accordance with the procedures set forth in Rule 6001. The SEF, through its Market 

Regulation Department, shall review each possible violation of Rule 

4013.A.(k)(1)(ii) in light of all the facts and circumstances, including whether any 

errors or delays were caused by the SEF, any Execution Specialist, the Affirmation 

Hub or any event (such as loss of internet connectivity, power or other force 

majeure) beyond the reasonable control of the Participant or Customer.

(4) Unless the Market Regulation Department, the Regulatory Oversight Committee or 

the Chief Compliance Officer determines otherwise in accordance with the 

provisions of Chapter 6 of the SEF Rules, upon the first violation of Rule 

4013.A.(k)(1)(ii) in any rolling 12-month period a warning letter will be issued in 

accordance with Rule 6017, upon the second or third violation a summary fine will 

be imposed in accordance with Rule 6016 and upon the fourth (or higher) violation, 

the matter will be referred to a Disciplinary Panel for formal disciplinary 

proceedings.

Rule 4013.B. Uncleared Swaps

A Participant may enter into an Uncleared Swap for its own account only with a counterparty with 

which such Participant has swap trading relationship documentation that meets the requirements 

of Applicable Law. A Participant may enter into an Uncleared Swap on behalf of a Customer or 

Client only if such Customer (or, where the Customer is a Prime Broker Client, the related Prime 

Broker) or Client has swap trading relationship documentation with the relevant counterparty that 

meets the requirements of Applicable Law. A Participant acting as a Prime Broker Client may 

enter into an Uncleared Swap in the name of and on behalf of a Prime Broker only with a 

counterparty with which such Prime Broker has swap trading relationship documentation that 

meets the requirements of Applicable Law. The Participant and/or Customer or Client or 

Participant’s Prime Broker shall provide any information requested by the SEF in the processing 

and settlement of such Uncleared Swaps. In addition, a Participant, for itself or on behalf of its 
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Customer or Client may, from time to time, input onto the SEF’s systems, either itself, or by 

instructing an Execution Specialist, the credit line for any or all parties with which it, or such 

Customer or Client, has such swap trading relationship documentation.

Rule 4014 Information Regarding Orders and Dissemination of Trade Data

The SEF may make information regarding Orders (including prices and amounts), Transactions 

and any other matters it may deem appropriate available to Participants and other Persons at such 

times and in such manner (whether through the SEF, a ticker, financial information services or 

otherwise) as it may consider necessary from time to time. In accordance with Rule 5702, each 

Participant or other Person receiving any such information through the SEF may redistribute such 

information only to such extent and in such manner as may be permitted by the SEF from time to 

time.

Participants are hereby notified that the SEF discloses swap transaction and pricing data for 

publicly reportable swap transactions executed on the Order Book prior to the public dissemination 

of such data by the relevant Swap Data Repository. This data is available to all Participants that 

have elected to obtain a connection to the Order Book and is disclosed to such Participants

contemporaneously with the transmission of the data to the applicable Swap Data Repository for 

public dissemination.

Rule 4015 Enforceability

(a) A Transaction entered into on or pursuant to the SEF Rules shall not be void, voidable, 

subject to rescission or otherwise invalidated or rendered unenforceable as a result of:

(1) a violation by the SEF of the provisions of Section 5h of the CEA or Part 37 of the 

CFTC Regulations;

(2) any CFTC proceeding to alter or supplement a rule, term or condition under 

Section 8a(7) of the CEA or to declare an emergency under Section 8a(9) of the 

CEA; or 

(3) any other proceeding the effect of which is to alter, supplement or otherwise require 

the SEF to adopt a specific term or condition, trading rule or procedure or to take 

or refrain from taking a specific action.

(b) Without limiting the generality of the foregoing, failure of the SEF to broadcast any 

message in respect of a Transaction made on the SEF shall not invalidate any Transaction 

recorded by the SEF.

Rule 4016 Block Trades

The following shall govern all Block Trades in Swaps:

(a) All Block Trades, unless otherwise exempted by a SEF Rule, must comply with the 

recordkeeping requirements set forth in Rule 8003.
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(b) Block Trades that occur away from a trading system or platform of the SEF must be 

submitted to the SEF in a manner prescribed from time to time by the SEF. Each such 

submission must include all of the data required by Parts 43 and 45 of the CFTC 

Regulations, including without limitation (i) a notification to the SEF of the parties’ 

election to have the Transaction treated as a Block Trade, and (ii) the actual notional or 

principal amount of the Transaction. The parties entering into a Block Trade must agree 

upon which party shall be responsible for reporting all terms of the Transaction to the SEF

(which party may be an Introducing Broker), and such designated party must report the 

Block Trade to the SEF as soon as technologically practicable after execution, but no later 

than ten (10) minutes after execution. Only Block Trades that are not Cleared Swaps are 

permitted to occur away from a trading system or platform of the SEF.

(c) Upon receipt of the submission of a Block Trade as required by Rule 4016(b), the SEF will 

review the submission, and will report the Transaction as required by Parts 43 and 45 of 

the CFTC Regulations as soon as technologically practicable after execution. Such report 

to the SDR will include among other things the actual notional or principal amount of the 

Transaction and a notification to the Swap Data Repository of the parties’ election to have 

the Transaction treated as a block trade.

(d) Swap components of Package Transactions may be executed as Block Trades, provided 

that each such swap component is for a quantity that is equal to or in excess the Appropriate 

Minimum Block Size.

(e) A Participant transacting a Block Trade on behalf of a Client or Customer must receive 

prior written instruction or consent from the Client or Customer to do so.

(f) Except as may be permitted by CFTC Regulation 43.6(h)(6), the aggregation of Orders 

across multiple Customers or Clients in order to meet the Appropriate Minimum Block 

Size is prohibited.

(g) Each party to a Block Trade shall comply with all applicable SEF Rules and, without 

limiting the generality of the foregoing, each such party shall be an ECP.

(h) Any Block Trade in violation of these requirements may constitute conduct which is 

inconsistent with just and equitable principles of trade.

(i) Upon request by the SEF, each party to a Block Trade shall produce satisfactory evidence 

that the Block Trade meets the requirements set forth in the SEF Rules.

(j) Cleared Block Trades must be executed on a non-Order Book trading system or platform 

of the SEF. Each Order underlying such a Cleared Block Trade must comply with the 

requirements for Order information set forth in Rule 8001 and shall include a notification 

to the SEF of the party’s election to have the resultant publicly reportable swap transaction 

treated as a Block Trade. In addition, all such Cleared Block Trades must comply with the 

pre-execution credit check requirements set forth in Rule 4017 and all other applicable SEF 

Rules and CFTC Regulations. For the avoidance of doubt, all Block Trades in Cleared 

Swaps must be executed on a non-Order Book trading system or platform of the SEF in 

accordance with this Rule 4016(j) in order to facilitate compliance with Rule 4017. This 
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Rule 4016(j) relies on relief granted by the CFTC’s Division of Market Oversight in NoAction Letter 17-60, which expires at the earlier of (i) 11:59 p.m. (Eastern Time) on 

November 15, 2020, and (ii) the effective date of any CFTC action with respect to the 

issues discussed therein. If such no-action relief is extended, upon and to the extent of such 

extension, the provisions of this Rule 4016(j) will continue apply.

Rule 4017 Pre-Execution Credit Checks

(a) At the time of submitting an Order for any Cleared Swap (including any Cleared Swap that 

is a leg of a Package Transaction) or any Cleared Block Trade, a Participant (whether for 

itself or for a Customer or Client) must designate a Clearing Member with regard to the 

Transaction, which may be either the relevant party to the Transaction if such party is SelfClearing or a designated Clearing Firm if the relevant party to the Transaction is Non-SelfClearing.

(b) Prior to the execution of any Order for a Cleared Swap (including any Cleared Swap that 

is a leg of a Package Transaction) or any Cleared Block Trade for which the relevant party 

is Non-Self-Clearing, the SEF will facilitate pre-execution credit screening by or on behalf 

of the designated Clearing Firm. Upon receiving confirmation that the Order or Cleared 

Block Trade satisfies the Clearing Firm’s pre-execution limits with respect to such party, 

the SEF will accept the Order or Cleared Block Trade for execution. If the SEF does not 

promptly receive confirmation or receives confirmation that the Order or Cleared Block 

Trade does not satisfy the Clearing Firm’s pre-execution limits with respect to such party, 

the SEF will cancel the Order or Cleared Block Trade.

(c) Any party that is Self-Clearing with respect to a Transaction is deemed to represent, by 

submitting an Order for its proprietary account or, in the case of a Customer, causing its 

Introducing Broker to do so, that it has completed pre-execution screening of its internal 

clearing risk limits for proprietary accounts.

Rule 4018 Risk Mitigation Sessions

The SEF may conduct periodic anonymous risk mitigation sessions (“Risk Mitigation Sessions”) 

in accordance with the tpSEF Risk Mitigation Procedures. Information on upcoming Risk 

Mitigations Sessions are made available by the SEF on its website. The tpSEF Risk Mitigation 

Procedures are attached hereto as Appendix C.

POSITION LIMITS AND POSITION ACCOUNTABILITY LEVELS

Rule 4100 SEF Rules Do Not Limit Emergency Powers

Nothing contained in the SEF Rules relating to position limits shall in any way be construed to 

limit the ability of the SEF to take an Emergency Action as enumerated in the SEF Rules, and, 

unless the Board and/or the CEO (or, if the CEO is not available, the most senior Officer that is 

available) in taking an Emergency Action shall state otherwise, any such Emergency Action shall 

be effective with respect to all Participants, Sponsored Participants, Clients and Customers 

regardless of whether an exemption from the position limits has previously been granted pursuant 

to these SEF Rules.
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Rule 4101 Position Limits

(a) To reduce the potential threat of market manipulation or congestion, the SEF shall adopt 

for each of the contracts of the SEF as is necessary and appropriate, position limits for 

speculators.

(b) Except as otherwise provided by the SEF Rules, no Person, including a Participant, 

Sponsored Participant, Client or Customer, may hold or control a position in excess of such 

position limits, and no Person may maintain a position in excess of such position limits for 

a Client or Customer if such Person knows, or with reasonable care should know, that such 

position will cause such Client or Customer to exceed the applicable position limits.

(c) Position limits shall apply to (i) all positions in accounts for which any Person, by power 

of attorney or otherwise, directly or indirectly holds positions or controls trading, and 

(ii) positions held by two or more Persons acting pursuant to an expressed or implied 

agreement or understanding, as if the positions were held by, or the trading of the positions 

were done by, a single Person.

(d) Each Participant required to file any report, statement, form or other information with the 

CFTC pursuant to CFTC Regulations concerning a position limit on any Transaction or 

commodity underlying a Transaction must simultaneously file a copy of such report, 

statement, form or other information with the SEF. Such information shall include, for 

Participants who are Introducing Brokers, information concerning the Customers for which 

Transactions are entered into on the SEF.

Rule 4102 Exemptions from Position Limits

Any Person seeking an exemption from the position limits referred to in Rule 4101 must file an 

application with the SEF in the manner and within the time limits prescribed by the SEF. The SEF 

shall notify the applicant whether the exemption has been approved and whether the SEF has 

imposed any limitations or conditions on the exemption. The decision of the SEF shall be final.

Rule 4103 Position Accountability

(a) To reduce the potential threat of market manipulation or congestion, the SEF shall adopt, 

as is necessary and appropriate, position accountability levels for speculators for each of 

the contracts of the SEF. Any Person, including a Participant, Sponsored Participant, Client 

or Customer, who owns or controls Swaps in excess of the applicable position 

accountability level shall provide the SEF, at its request, any information regarding the 

nature of the position, trading strategy or hedging activities, if applicable, and if ordered

by the SEF, shall not increase the size of any such position.

(b) For purposes of this Rule 4103, 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 4103 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.
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Rule 4104 Enforcement of Position Limits and Position Accountability Levels

(a) No Person may for itself or any Customer or Client maintain a combination of Swaps which 

is, or which when aggregated in accordance with this Rule is, in excess of the limits 

established pursuant to Rule 4101 (or, to the extent ordered not to increase such positions 

pursuant to Rule 4103, a position in excess of the relevant level).

(b) In the event the SEF learns that a Person maintains positions in accounts with more than 

one (1) Person such that the aggregate position in all such accounts exceeds (i) the position 

limits established pursuant to Rule 4101 or (ii) to the extent such Person is ordered not to 

increase such positions pursuant to Rule 4103, the relevant level, the SEF may notify all 

Persons maintaining or carrying such accounts of the total positions of such accounts. Such 

notice may also instruct each such Person to reduce the positions in such accounts 

immediately after receipt of the notice, proportionately or otherwise so that the aggregate 

positions of such accounts does not exceed the position limits and position accountability 

levels established pursuant to Rules 4101 and 4103, unless as provided by Rule 4104(c) 

below, a request for an exemption is made and granted by the SEF pursuant to this Rule 

4104. Any Person receiving such notice shall immediately take such steps as may be 

necessary to liquidate such number of contracts as shall be determined by the SEF in order 

to cause the aggregate positions of such accounts to comply with the position limits and 

position accountability levels established pursuant to Rules 4101 and 4103. 

Notwithstanding the foregoing, the Persons may reduce the positions of such accounts by 

a different amounts so long as after all reductions have been accomplished, the positions 

comply with the position limits and position accountability levels established pursuant to 

Rules 4101 and 4103.

(c) In the event a Person exceeds its position limit due to sudden unforeseen increases in its 

bona fide hedging needs, such Person shall not be considered in violation of the SEF Rules 

provided that such Person requests a hedge exemption to carry such increased position 

within five (5) Business Days following the day on which the Person’s position limit was 

exceeded and provided that such exemption is granted by the SEF.

(d) Subject to the foregoing provisions of this Rule 4104, in the event that a Person’s position 

exceeds the position limits established pursuant to Rule 4101 or ordered by the SEF such 

Person shall liquidate such amount of Swaps as the SEF shall direct in order to eliminate 

the excess within such time as the SEF may prescribe and shall report to the SEF when 

such liquidations have been completed. If a Person fails so to liquidate contracts within the 

time prescribed by the SEF, then, in addition to any other actions the SEF may take, the 

SEF may take such steps as it may deem necessary or appropriate to liquidate such 

contracts on behalf and at the expense of such Person to the extent necessary to eliminate 

such excess. Without limiting the generality of the foregoing, to the extent applicable, the 

SEF may request the DCO to effect such liquidation in accordance with rules of the DCO. 

In addition, the SEF in its discretion may require any Person carrying an account for itself 

or a Customer or Client to obtain and hold additional original margin in such amount and 

form and by such time as the SEF shall specify until such excess has been eliminated.
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Rule 4105 Prime Broker Transactions

(a) General.

(1) All Prime Broker Transactions shall be executed pursuant to this Rule 4105, in 

addition to other applicable provisions of the SEF Rules.

(2) A Prime Broker and each of its Prime Broker Clients must be a Participant approved 

by the SEF.

(3) Each Prime Broker Client may enter Prime Brokerage Orders and execute 

Permitted Cross Transactions on the SEF in the name of and on behalf of the 

relevant Prime Broker.

(b) Prime Broker Obligations.

(1) Prime Broker Acknowledgment Letter. Each Participant that desires to transact 

Prime Broker Transactions on the SEF as a Prime Broker Client shall cause its 

Prime Broker to provide to the SEF an acknowledgement letter, in a form and 

substance satisfactory to, and approved by, the SEF (a “Prime Broker 

Acknowledgement Letter”) that the Prime Broker will, subject to the terms of its 

Prime Broker Acknowledgement Letter, the Prime Broker’s right to cancel a Prime 

Broker Transaction in accordance with the provisions of Rule 5103.E and other

applicable provisions of the SEF Rules, accept and be financially responsible for 

all Prime Broker Transactions executed in its name by such Participant. 

(2) Cancellation of Designation of Prime Broker Client. The designation of a 

Participant as a Prime Broker Client by a Prime Broker and the Prime Broker’s 

obligations in respect of that Prime Broker Client shall continue in full force and 

effect until cancelled or terminated by written notice (a “Cancellation Notice”) to 

the SEF in accordance with the terms of the relevant Prime Broker’s Prime Broker 

Acknowledgement Letter. Any such Cancellation Notice shall become effective 

upon receipt by the SEF. No such termination or cancellation shall in any manner 

affect the Prime Broker’s obligations and liabilities incurred by the Prime Broker 

in respect of the relevant Prime Broker Client prior to the effective date and time 

of the relevant Cancellation Notice.

(3) No Supervisory Responsibilities. A Prime Broker has no responsibility to supervise 

any Prime Broker Client or any of such Prime Broker Client’s Supervised Persons.

(4) Prime Broker Cancellation of Prime Broker Transactions. A Prime Broker shall

have the right to cancel a Prime Broker Transaction in accordance with the 

provisions of Rule 5103.E within two (2) hours of the time that the SEF provides 

the Prime Broker with a Confirmation of such Transaction in accordance with Rule 

4012.

(c) Prime Broker Client Obligations.
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(1) In advance of submitting each Prime Brokerage Order and Permitted Cross 

Transaction to the SEF pursuant to this Rule 4105, each Prime Broker Client shall 

ensure the Prime Brokerage Order or Permitted Cross Transaction complies with 

any relevant Prime Broker Limit then in effect.

(2) Upon receiving notice (whether from the SEF, its Prime Broker or otherwise) that 

a Prime Broker has cancelled a Participant’s designation as a Prime Broker Client, 

such Participant shall cancel any unfilled Prime Brokerage Orders and Permitted 

Cross Transactions submitted in the name of and on behalf of the relevant Prime 

Broker and shall not submit any additional Prime Brokerage Orders or Permitted 

Cross Transactions in the name of and on behalf of that Prime Broker.

(d) Fees. Fees for Prime Broker Transactions will be charged to the relevant Prime Broker 

Client, except for Prime Broker Transactions in which the relevant Prime Broker Client 

transacts through an Introducing Broker, in which case fees for such Transaction will be 

charged to the Prime Broker Client’s Introducing Broker.
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SECTION 5

CONDUCT OF PARTICIPANTS AND OTHER PERSONS

DUTIES AND OBLIGATIONS

Rule 5000 Duties and Responsibilities of Participants, Sponsored Participants, 

Customers and Clients

Each Participant and Sponsored Participant shall (and shall cause all of its respective Supervised 

Persons to) and each Customer and Client shall:

(a) use the SEF and effect Transactions in a responsible manner and not for any improper 

purpose;

(b) use the SEF only to conduct permitted activity as determined by the SEF;

(c) comply with the SEF Rules and conduct all such activity in a manner consistent with the 

SEF Rules and Obligations;

(d) comply with Applicable Law;

(e) settle all Transactions entered into on or pursuant to the SEF Rules;

(f) 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 activity 

on or through the SEF or any aspect of any business connected with or concerning the SEF;

(g) not knowingly mislead or conceal any material fact or matter in any dealings or filings with 

the SEF or in response to any SEF Proceeding;

(h) keep any User IDs, account numbers and passwords related to the SEF confidential;

(i) employ practices to monitor and enforce compliance with risk limits established in 

conformance with Applicable Law; and

(j) keep, or cause to be kept, complete and accurate books and records in accordance with 

Rule 8002.

Rule 5001 Required Disclosures to the SEF

(a) Each Participant, Sponsored Participant, Customer and Client shall immediately notify the 

Market Regulation Department in writing at such time as it becomes aware of the 

occurrence of any of the following events:

(1) any damage to, or failure or inadequacy of, the systems, facilities or equipment of

such Person to effect Transactions pursuant to the SEF Rules;
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(2) any failure to timely perform such Person’s financial obligations under or in 

connection with Swaps of such Person (or Swaps of any Customer, Client or 

Sponsored Participant of such Person, as applicable);

(3) any violation of Applicable Law in connection with such Person’s access to, or 

activities on the SEF, including the requirements of the CFTC and, if applicable, 

NFA;

(4) a Material Adverse Change in such Person’s financial condition or in the financial 

condition of an Affiliate of such Person if such change materially impacts such 

Person’s ability to satisfy its obligations under the SEF Rules;

(5) any refusal of admission of such Person to any other swap execution facility, 

commodity or securities exchange, DCM, DCO, Self-Regulatory Organization or 

other business or professional association, or withdrawal by such Person of any 

application for participation or membership in any swap execution facility, 

commodity or securities exchange, DCM, DCO, Self-Regulatory Organization or 

other business or professional association;

(6) the indictment or conviction of, or any confession of guilt or plea of guilty or nolo 

contendere by such Person (or, if applicable, any of its respective Supervised 

Persons with access to the SEF) for any felony of any nature or misdemeanor 

involving, arising from, or related to, the purchase or sale of any Swap or other 

financial instrument, or involving or arising from moral turpitude, 

misrepresentation, fraud, deceit, theft, embezzlement, gambling, conversion or 

abuse of a fiduciary relationship;

(7) the issuance of a formal order of investigation (or its equivalent), or the 

commencement, by the issuance or service of a written complaint (or its 

equivalent), of any judicial, administrative or self-regulatory proceeding, as the 

case may be, against such Person (or, if applicable, any of its respective Supervised 

Persons) by the CFTC, the SEC, the securities commission or equivalent authority 

of any state, territory, the District of Columbia or foreign country, or any swap 

execution facility, commodity or securities exchange or related clearing 

organization, DCM, DCO, any Self-Regulatory Organization or other business or 

professional association;

(8) the bankruptcy or insolvency of such Person or any of its Affiliates; or

(9) any suspension, expulsion, bar, fine, censure, cease and desist order, temporary or 

permanent injunction, denial of Trading Privileges or any other sanction or 

discipline imposed on such Person (or, if applicable, any of its respective 

Supervised Persons), whether through an adverse determination, voluntary 

settlement or otherwise, by:

(i) a swap execution facility, commodity or securities exchange, DCM, DCO, 

Self-Regulatory Organization or other business or professional association;
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(ii) the SEC, the CFTC or the securities commission or equivalent authority of 

any state, territory, the District of Columbia or foreign country; or

(iii) any federal court, state court, Government Agency not mentioned above or 

quasi-governmental body.

(b) Each Participant, Sponsored Participant, Customer and Client shall notify the Market 

Regulation Department in writing within ten (10) days of becoming aware of the 

occurrence of any of the following events:

(1) any denial or withdrawal of any application for any registration or license with 

respect to such Person (or, if applicable, any of its respective Supervised Persons) 

by or from the SEC, the CFTC or the securities commission or equivalent authority 

of any state, territory, the District of Columbia or foreign country, or

(2) the issuance of a bar by any agency of the United States from contracting with the 

United States.

TRADING CONDUCT

Rule 5100 Abusive Trading Practices Prohibited

(a) No Participant or Sponsored Participant or any of its respective Supervised Persons, nor 

any Customer or Client, 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, any of the following trading practices except as otherwise authorized 

under the SEF Rules:

(1) parking;

(2) pre-arranged trading (it being understood that pre-arranged trading does not include 

Transactions resulting from pre-execution communications to the extent permitted 

by Rule 5203(b));

(3) adjusted trading or overtrading;

(4) front-running;

(5) wash trading;

(6) cross transactions;

(7) fictitious transactions;

(8) money passes;

(9) non-competitive transactions (unless otherwise exempt or excluded pursuant to the 

SEF Rules);
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(10) accommodation trading; 

(11) fraudulent trading; or

(12) any other trading practices that the SEF or the CFTC deems to be abusive.

Additionally, no Participant or Sponsored Participant or any of its respective Supervised 

Persons, nor any Customer or Client, shall knowingly execute or accommodate the 

execution of any such activity by direct or indirect means.

(b) No Participant, Sponsored Participant, Customer or Client shall trade any Swap that is not 

authorized to trade on the SEF.

Rule 5101 Good Faith Bids and Offers

A Participant or Sponsored Participant shall not knowingly enter, nor shall any Participant, 

Sponsored Participant, Customer or Client, cause to be entered, bids or offers into the SEF other 

than in good faith for the purpose of executing bona fide Transactions.

Rule 5102 Invalid Transactions

(a) A Transaction made or purported to be made on or pursuant to the SEF Rules may be 

declared invalid by the SEF in the following circumstances:

(1) Unrepresentative Price. If, taking into consideration current market conditions, the 

SEF determines that a Transaction has taken place at an unrepresentative price, the 

SEF, at its absolute discretion, may declare such Transaction invalid. The SEF may 

take into account such information as it deems appropriate when determining 

whether to invalidate a Transaction, including, without limitation, the following:

(i) price movement of other swap contracts with similar terms;

(ii) current market conditions, including levels of activity and volatility;

(iii) time period between different quotes and between quoted and traded prices;

(iv) market or other information regarding price movement in related swap 

contracts; or

(v) manifest error.

(2) Breach of Applicable Law. If the SEF determines that a Transaction has been made 

in breach of Applicable Law, the SEF may declare the Transaction invalid.

(b) When a Transaction is declared invalid by the SEF, the parties to the Transaction will be 

notified by the SEF of that fact and a message will be broadcast through the SEF 

announcing the Swap contract and price level of the invalid Transaction, and the invalid 

Transaction may be displayed on the SEF as a cancelled Transaction.
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Rule 5103 Trade Cancellation, Correction, Offset and Adjustment

Rule 5103.A. SEF Authority Regarding Trade Cancellation, Correction, Offset and 

Adjustment 

The SEF has authority to cancel, or adjust the price of, any Transaction executed on or pursuant to 

the SEF Rules, or to execute or require the execution of a new or offsetting Transaction:

(a) when the SEF determines in its sole discretion such action is necessary to mitigate market 

disrupting events caused by the improper or erroneous use of the SEF or by system defects;

(b) at any time the SEF determines in its sole discretion that allowing a Transaction to stand 

as executed may have a material adverse effect on the integrity of the market;

(c) in accordance with Rule 4013.A. and this Rule 5103;

(d) where the Transaction was intended to be cleared and was submitted to a DCO via an 

Affirmation Hub or other middleware provider but was not presented to the DCO for 

clearing due to a post-execution processing issue;

(e) where the SEF determines in its sole discretion that a mistake occurred as a result of an 

error by an Execution Specialist; or

(f) to comply with Applicable Law.

Rule 5103.B. Transaction Price Review

(a) Determination to Review a Transaction’s Price.

(1) The SEF may determine to review a Transaction’s price based on its independent 

analysis of market activity or upon a Participant’s request (including a Participant 

that is a Prime Broker Client).

(2) A Participant’s request for review must be made within ten (10) minutes of 

execution the relevant Transaction and must include the USI for the Transaction 

and a statement of the grounds for the review. In the absence of a timely request for 

review, the SEF may determine whether or not a Transaction will be subject to 

review in its sole discretion. Notwithstanding the foregoing, subject to Applicable 

Law, the SEF shall amend the terms of, or cancel, any Transaction that the parties, 

together with the DCO, as applicable, mutually agree to amend or cancel, even in 

the event that such amendment or cancellation is not submitted to the SEF within 

the applicable review period specified above.

(b) Review of a Transaction’s Price.

(1) In reviewing a Transaction’s price, the SEF shall use good faith efforts to determine 

the fair mid-market price for the Swap at the time the Transaction was executed. 

The SEF may consider any relevant information, including, but not limited to, the 
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last transaction price of the Swap or a better bid/offer, a more recent price for a 

different maturity date, the price of the same or related Swap established in another 

venue or another market, the market conditions at the time of the Transaction and 

the theoretical value of an option based on the most recent implied volatility.

(2) Following the SEF’s determination of a Transaction’s fair mid-market price in 

accordance with Rule 5103.B.(b)(1) above, the SEF shall have the right, in its sole 

discretion, to cancel or adjust the price of such Transaction or to require the entry 

into an offsetting Transaction; provided, however, that the SEF shall not make any 

such cancellation or price adjustment or require the entry of an offsetting 

Transaction if such action would, in the SEF’s sole discretion, (i) adversely impact 

market integrity, (ii) facilitate market manipulation or other illegitimate activity or 

(iii) otherwise violate the CEA, CFTC Regulations or the SEF Rules.

(3) The method of adjustment or cancellation of any Cleared Swap that is adjusted or 

cancelled shall be the method provided for by the rules and procedures of the 

relevant DCO.

Rule 5103.C. Review of Transactions for Errors

(a) If a Participant, Sponsored Participant, Client or Customer believes that any Transaction 

was incorrectly executed, cleared or rejected from clearing as a result of an Error (as 

defined in Rule 5103.C.(f) below), such Person may, within ten (10) minutes thereafter, 

request a review of the Transaction by providing the USI for the Transaction and stating 

the grounds for the disagreement.

(b) Upon timely receipt by the SEF of a request for a Transaction review in accordance with 

Rule 5103.C.(a) above, or if the SEF determines on its own initiative to conduct such a 

review, the SEF will review its electronic audit trail and other relevant records to determine 

if an Error occurred. If the request for review is not timely, the SEF may, in its sole 

discretion, perform a review of the Transaction.

(c) If the review described in this Rule 5103.C. reveals that the Transaction was incorrectly 

executed, cleared or rejected from clearing as a result of an Error, the SEF may cancel or 

adjust the Transaction, or execute or require the execution of a new or offsetting 

Transaction (in accordance with the procedures specified in Rule 4013.A. for Cleared 

Swaps), as appropriate; provided, however, that the SEF shall not take any action pursuant 

to this Rule 5103.C.(c) if such action would, in the SEF’s sole discretion, (i) adversely 

impact market integrity, (ii) facilitate market manipulation or other illegitimate activity or 

(iii) otherwise violate the CEA, CFTC Regulations or the SEF Rules.

(d) If the review described in this Rule 5103.C. reveals that the Transaction was not incorrectly 

executed, nor cleared or rejected from clearing as a result of an Error, then no adjustment 

shall be made.

(e) If a Transaction is reviewable for price under Rule 5103.B., the procedures of this Rule 

5103.C. shall not apply. For the avoidance of doubt, if a Transaction was correctly executed 
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but the reporting to the SDR was in error, Rule 8005 shall apply and this Rule 5103.C. shall 

not apply.

(f) For purposes of this Rule 5103.C., an “Error” shall mean the occurrence of any of the 

following:

(1) A mistake made as the result of a malfunction of the SEF or human error, including 

a mistake made by an Execution Specialist;

(2) An Order was incorrectly displayed and/or executed;

(3) A clerical or operational error or omission made by the SEF or a Participant

(including a Prime Broker Client), Sponsored Participant, Client or Customer (or 

any agent of any of the foregoing) that caused a transaction to be rejected from 

clearing and void ab initio;

(4) A Clearing Firm or DCO rejected a leg of a Package Transaction for clearing 

because of the sequencing of submission for clearing of the legs of the applicable 

Package Transaction; or

(5) Where a Transaction was intended to be cleared and was submitted to a DCO via 

an Affirmation Hub or other middleware provider but was not presented to the DCO 

for clearing due to a post-execution processing issue.

Rule 5103.D. Records and Reporting of Cancellations and Price Adjustments

(a) Cancelled Transactions and any prices that have been adjusted shall be cancelled in the 

SEF’s official records.

(b) Transactions that have had their price adjusted shall be reflected in the SEF’s official 

records at the adjusted price.

(c) If a Transaction is either cancelled or adjusted pursuant to Rule 5103, the SEF shall submit 

a cancellation or correction of the Transaction to the same SDR to which the Transaction 

was previously reported.

Rule 5103.E. Cancellation of Prime Brokerage Transactions

(a) Subject to Rule 4105(b)(4), a Prime Broker shall have the right to cancel any Prime Broker 

Transaction within two (2) hours of the time that the SEF provides the Prime Broker with

a Confirmation of such Transaction in accordance with Rule 4012 (i) that is executed in 

breach of a Prime Broker Limit; (ii) that was executed by a Person that was not authorized 

by the Prime Broker; or (iii) that was executed for an unauthorized product. The Prime 

Broker shall communicate the cancellation directly to the SEF and indicate the reason for 

the cancellation. The SEF shall be entitled to rely on the Prime Broker’s statement that any 

such grounds exist without inquiry and shall have no liability to the Prime Broker, the 

Prime Broker Client, or the counterparty to the cancelled Transaction or any other party in 

so doing. 
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(b) If any Prime Broker Transaction is cancelled by the SEF pursuant to the provisions of this 

Rule 5103.E., the Prime Broker, the Prime Broker Client and the counterparty shall be 

liable for payments in respect of such cancellation in accordance with the terms of their 

agreements or as they may otherwise agree. The SEF shall have no involvement in 

determination of any such payments. 

(c) Notwithstanding anything to the contrary in the SEF Rules, the SEF shall have the right, 

in its sole discretion, to suspend, revoke, limit, condition, restrict or qualify the ability of 

any Participant to transact on the SEF as a Prime Broker or Prime Broker Client 

following the use of the cancellation right in 5103.E.(a).

(d) Nothing in this Rule 5103.E shall restrict the rights of a Prime Broker Client to request a 

review of a Prime Broker Transaction pursuant to the other provisions of Rule 5103. 

Rule 5104 Misuse of the SEF

Misuse of the SEF is strictly prohibited. It shall be a violation of the SEF Rules for any Person to 

willfully or negligently engage in unauthorized access to the SEF, to assist any Person in obtaining 

unauthorized access to the SEF, to trade on the SEF without the authorization of a Participant, to 

alter the equipment associated with the SEF, to interfere with the operation of the SEF, to use or 

configure a component of the SEF in a manner that does not conform to the SEF Rules, to intercept 

or interfere with information provided on or through the SEF, or in any way to use the SEF in a 

manner contrary to the SEF Rules.

VIOLATIONS

Rule 5200 Rule Violations

(a) It shall be a violation for a Participant, Sponsored Participant, Customer or Client or any 

Supervised Person to violate any SEF Rule, to breach any agreement made with the SEF, 

to violate Applicable Law, or to engage in fraud, dishonorable conduct, or in conduct which 

is inconsistent with just and equitable principles of trade.

(b) Participants, Sponsored Participants, Customers and Clients and Supervised Persons shall 

assist the SEF in any investigation into potential violations of Applicable Law. Such 

assistance must be timely and may include, but not be limited to, requiring any Participant, 

Sponsored Participant, Client, Customer or Supervised Person to produce documents, to 

answer questions from the SEF or its designee, and/or to appear in connection with an 

investigation.

(c) If a Participant, Sponsored Participant, Customers or Client has actual or constructive 

notice of a violation in connection with the use of the SEF by a Participant, Sponsored 

Participant, Client, Customer or Supervised Person and such Person fails to notify the 

Market Regulation Department within a reasonable time, such Person may be found to 

have committed an act detrimental to the interest or welfare of the SEF.
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Rule 5201 Fraudulent Acts Prohibited

No Participant, Sponsored Participant, Customer or Client (or any Supervised Persons) shall 

engage in, or attempt to engage in, any fraudulent act or engage in, or attempt to engage in, any 

scheme to defraud, deceive, trick or mislead in connection with or related to any SEF activity.

Rule 5202 [Reserved]

Rule 5203 Fictitious or Wash Transactions; Permitted Pre-Execution Communications

(a) No Participant, Sponsored Participant, Customer or Client (or any Supervised Persons) 

shall create fictitious transactions or wash transactions. No Person shall place or accept 

Orders in the same Swap 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 shall knowingly execute or accommodate the execution of such 

Orders by direct or indirect means.

(b) Participants, Sponsored Participants, Customers and Clients (and any of their Supervised 

Persons) may engage in pre-execution communications (including communications with 

respect to Orders) relating to:

(1) Permitted Cross Transactions;

(2) Block Trades executed pursuant to Rule 4016;

(3) Transactions executed pursuant to the procedures specified in Rule 4013.A.(e) and 

(f);

(4) Package Transactions (Order Book Exempt); and

(5) Required Cross Transactions; 

provided that with respect to any pre-execution communications permitted by (1) through 

(5) above:

(i) the parties to the pre-execution communications do not disclose to a nonparty the details of such communications or use the information obtained in 

a manner contrary to Applicable Law, and

(ii) the requirements of Rule 4011 are satisfied to the extent applicable.

Nothing contained in this Rule 5203(b) shall prevent a Person from disclosing 

information as may be required by legal process (including subpoena or demand for 

productions) or to such Person’s agents or advisors (including, but not limited to, 

accountants and auditors and legal counsel).
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Rule 5204 Market Disruptions Prohibited

Orders entered into the SEF for the purpose of upsetting the equilibrium of the market in any Swap 

or creating a condition in which prices do not or will not reflect fair market values are prohibited, 

and any Participant, Sponsored Participant, Customers or Client (or any of their respective 

Supervised Persons) who makes or assists in entering any such Order with knowledge of the 

purpose thereof or who, with such knowledge, in any way assists in carrying out any plan or 

scheme for the entering of any such Order, will be deemed to have engaged in an act detrimental 

to the SEF in violation of this Rule 5204.

Rule 5205 Market Manipulation Prohibited

No Participant, Sponsored Participant, Customer or Client (or any of their respective Supervised 

Persons) shall attempt to manipulate or manipulate the price of any Swap including, without 

limitation, cornering, “front-running”, “money passes”, trading ahead or against Customer Orders, 

combination or improper cross trading involving, for example and without limitation, a short term 

riskless transaction taking advantage of an incoming Order or the offset of a prior position to avoid 

an adverse market move.

Rule 5206 Disruptive Trading Practices Prohibited

No Participant, Sponsored Participant, Customer or Client (or any of their respective Supervised 

Persons) shall engage in any trading, practice or conduct that constitutes a “disruptive trading 

practice,” as such term is defined by the Section 4c(a)(5) of the CEA (7 U.S.C. § 6c(a)(5)) or the 

related CFTC Regulations.

Rule 5207 Prohibition of Misstatements

No Participant, Sponsored Participant, Customer or Client (or any of their respective Supervised 

Persons) shall make any knowing misstatement of a material fact to the SEF, any SEF Official, 

any Board committee or SEF Panel, any agent of the SEF (including the Regulatory Services 

Provider) or any Participant, Sponsored Participant, Customer, Client or Supervised Person. All 

swap data or other information submitted from time to time by any Participant, Sponsored 

Participant, Customer or Client (or any of their respective Supervised Persons) to the SEF, or by 

the SEF on behalf of any such Person, to any Clearing Firm, Affirmation Hub, DCO or SDR, shall 

be accurate and complete in all material respects as of the time submitted.

Rule 5208 Acts Detrimental to the SEF Prohibited

No Participant, Sponsored Participant, Customer or Client (or any of their respective Supervised 

Persons) shall engage in any act that is detrimental to the SEF.

Rule 5209 Adherence to Law

No Participant, Sponsored Participant, Customer or Client (or any of their respective Supervised 

Persons) shall engage in conduct that is a violation of the Applicable Law.
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Rule 5210 Communications with the Public and Promotional Material

Promotional material and similar information issued by Participants shall comply with Applicable 

Law.

SUPERVISION

Rule 5300 Duty to Supervise

Each Participant shall establish, maintain and administer reasonable supervisory procedures to 

monitor the compliance of its Supervised Persons with the SEF’s Rules and any applicable 

provisions of the CEA or CFTC Regulations and such Participant may be held accountable for the 

actions of such Supervised Persons. As set forth in Rule 4105(b)(3), a Prime Broker shall have no 

responsibility to supervise any Prime Broker Client or any of such Prime Broker Client’s 

Supervised Persons.

INSPECTIONS

Rule 5400 Inspections by the SEF

(a) The SEF and the Regulatory Services Provider (and their respective authorized 

representatives), shall have the right, in connection with determining whether all 

Obligations are being, will be, or have been complied with by a Participant, Sponsored 

Participant, Customer or Client, in accordance with Applicable Law:

(1) inspect books and records, systems, equipment and software operated by such 

Person in connection with any SEF activity, wherever located;

(2) access the systems, equipment, software and the premises on which the systems, 

equipment and software are located and any data stored in any of the systems or 

equipment, during the regular business hours and the Trading Hours of the SEF 

without prior notice to such Person; and/or

(3) remove, copy or reproduce any data to which the SEF has access under the SEF 

Rules.

(b) Each such Person shall provide the Regulatory Services Provider with the same access to 

its books and records and offices as it is required to provide the SEF under the SEF Rules 

and Applicable Law.

(c) The Market Regulation Department may require a Participant to furnish (periodically or on 

a particular occasion) information concerning the Participant’s activity on the SEF. For a 

Participant, such information includes but is not limited to, the Participant’s open trading 

positions or Swaps to which the Participant is a party.

(d) The SEF shall provide prior notice to a Person in the event of an inspection that has been 

prescheduled by the SEF.
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INFORMATION SHARING

Rule 5500 Information-Sharing

(a) The SEF may enter into information-sharing agreements or other arrangements or 

procedures to establish and enforce rules that will allow the SEF to obtain any necessary 

information to perform any monitoring of trading and trade processing, provide 

information to the CFTC upon request and that allow the SEF to carry out such 

international information-sharing agreements as the CFTC may require. As part of any 

information- sharing agreements or other arrangements or procedures adopted pursuant to 

this Rule 5500, the SEF may:

(1) provide market surveillance reports to other markets;

(2) share information and documents concerning current and former Participants with 

other markets;

(3) share information and documents concerning ongoing and completed investigations 

with other markets; and/or

(4) require its current or former Participants, or their Sponsored Participants, 

Customers or Clients, to provide information and documents to the SEF at the 

request of other markets with which the SEF has an information- sharing agreement 

or other arrangements or procedures.

(b) The SEF may enter into any arrangement with any Person or body (including, without 

limitation, the CFTC, the NFA, any Self-Regulatory Organization, any exchange, market, 

Swap Data Repository, reporting services or clearing organization or foreign regulatory 

authority) if the SEF considers such arrangement to be in furtherance of the SEF’s purpose 

or duties under Applicable Law.

(c) The SEF may disclose to any Person or entity information concerning or associated with a 

Participant or other Person where the SEF believes such disclosure is reasonably necessary 

and appropriate in exercising a legal or regulatory function.

(d) Participants, Sponsored Participants, Customers and Clients shall provide the SEF any 

requested information pursuant to the SEF Rules or Applicable Law as necessary for the 

SEF to perform any of the functions described in these SEF Rules.

FINANCIAL REQUIREMENTS

Rule 5600 Minimum Financial and Related Reporting Requirements

(a) Each Participant that is registered with any Government Agency, including the CFTC and 

the SEC, or a Self-Regulatory Organization shall comply with the provisions of Applicable 

Law, including, but not limited to, the rules and regulations such Government Agency or 
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Self-Regulatory Organization imposes on a Participant relating to minimum financial and 

related reporting and recordkeeping requirements.

(b) Each Participant shall qualify as an ECP and undertake to timely update any change to the 

Participant’s status as an ECP.

(c) A copy of any notice or written report that a Participant is required to file with the CFTC 

pursuant to CFTC Regulation 1.12 shall be concurrently provided to the SEF.

(d) A Participant who is subject to and violates CFTC Regulations 1.10, 1.12, 1.17 or 1.18 

shall be deemed to have violated this Rule 5600.

Rule 5601 Confidentiality of Financial and Other Information

All information and data obtained or received by the Market Regulation Department from 

inspections of accounting and other records, quarterly balance sheets and declarations or reports 

on financial condition will be treated as confidential by the SEF; however, this Rule 5601 does not 

supplant Rule 5500 and the SEF Rules in Section 7, Applicable Law, or any other requirement of 

legal process or law.

Rule 5602 Authority to Impose Restrictions

Whenever a Participant is subject to the early warning requirements set forth in CFTC 

Regulation 1.12, the SEF may impose such conditions or restrictions on the business and 

operations of such Participant as the SEF may deem necessary or appropriate for the protection of 

customers, other Participants, or the SEF.

Rule 5603 Additional Disclosure Requirements

Each Participant must comply with all disclosure requirements set forth in applicable CFTC and 

Self-Regulatory Organization rules and regulations. Any such disclosure may be combined with a 

disclosure regarding the existence of financial interests held by the Participant in the SEF or any 

other exchange.

MISCELLANEOUS

Rule 5700 Gifts and Gratuities

Participants shall maintain and enforce gifts policies and procedures to prevent gifts in excess of 

one hundred dollars ($100) to Directors, Officers and SEF employees.

Rule 5701 Anti-Money Laundering and Anti-Terrorism

It is SEF policy: (1) not to engage in or knowingly assist any money laundering or other illicit 

business, and (2) not to engage in or knowingly assist, or be a conduit for, terrorist financing. 

Participants will be required to provide sufficient information for Participants and their Customers 

or Clients, if applicable, for SEF to conduct restricted list searches, including, but not limited to, 
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searches against the Specially Designated Nationals and Blocked Persons list maintained by the 

Office of Foreign Assets Control of the U.S. Department of the Treasury.

Rule 5702 Market Data

(a) All Participants, Sponsored Participants, Customers and Clients and all Supervised 

Persons, agents, vendors, and other Persons affiliated with the foregoing understand and 

acknowledge that the SEF has a proprietary interest in:

(1) the price and quantity data from each and every Transaction executed on the SEF 

or subject to the SEF Rules, including the time at which the Transaction was 

executed on, or submitted to, the SEF;

(2) the price and quantity data for each and every Order or Block Trade submitted to 

the SEF, including the time at which the Order was entered;

(3) the yield curves and reference prices prepared by the SEF;

(4) any data and information derived from (1), (2) and (3) and the format and 

presentation thereof (except a Participant’s confidential information or data); and

(5) the transmissions and dissemination of the data and information to Participants, any 

publisher of the data or information with whom the SEF has a written agreement, 

and any other Persons.

(b) Except with respect to such Person’s confidential information or data, Participants,

Sponsored Participants, Customers and Clients and Supervised Persons may not distribute, 

sell or retransmit any other information displayed on the SEF to any third party without the 

express written consent of the SEF.

(c) The SEF may at any time restrict or establish utilization fees in respect of data described 

in Rule 5702(a) with respect to all or any Participants, Sponsored Participants, Customers 

or Clients in order to safeguard the security or operations of the SEF or to preserve market 

integrity, fair and orderly trading, or if otherwise in the public interest, provided, however, 

that view-only access is provided free-of-charge.

Rule 5703 Extension or Waiver of SEF Rules

If necessary and expedient, the SEF may, in its sole discretion, waive, or extend the time period 

for performing, any act or acts designated by the SEF Rules, but only to the extent such waiver or 

extension is not inconsistent with the CEA or the CFTC Regulations.
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SECTION 6

ENFORCEMENT OF RULES AND

DISCIPLINARY PROCEEDINGS

Rule 6000 General

(a) All Participants, Sponsored Participants, Account Managers, Authorized Traders, Clients, 

Customers, Supervised Persons and any other Person using a User ID of a Participant or 

login credentials linked to a Participant or User ID shall be subject to the SEF’s jurisdiction. 

Any Participant, Sponsored Participant, Account Manager, Authorized Trader, Client, 

Customer, Supervised Person or other Person using a User ID of a Participant or login 

credentials linked to a Participant or User ID is subject to this Section 6 if such Person is 

alleged to have violated, to have aided and abetted a violation, to be violating, or to be 

about to violate, any SEF Rule or any other provision of Applicable Law for which the 

SEF has disciplinary jurisdiction.

(b) The SEF, through its Market Regulation Department, Review Panels, Disciplinary Panels 

and Appeals Panels will conduct inquiries, investigations, disciplinary proceedings and 

appeals from disciplinary proceedings, summary impositions of fines, summary 

suspensions or other summary actions in accordance with this Section 6.

(c) The SEF and its Regulatory Services Provider are parties to a Regulatory Service 

Agreement as referenced in Rule 2600, pursuant to which the Regulatory Services Provider 

has agreed to perform certain regulatory services described in this Section 6 on behalf of 

SEF. The SEF Rules that refer to the SEF, SEF staff, the Market Regulation Department 

and other SEF departments should be understood as also referring to the Regulatory 

Services Provider, the Regulatory Services Provider staff and the Regulatory Services 

Provider departments acting on behalf of SEF pursuant to the Regulatory Services 

Agreement. Notwithstanding the fact that the SEF has entered into the Regulatory Services 

Agreement with its Regulatory Services Provider to perform some of the SEF’s functions, 

the SEF shall retain ultimate legal responsibility for, and control of, such functions.

(d) No SEF Official will interfere with or attempt to influence the process or resolution of a 

Disciplinary Action except to the extent provided under the SEF Rules with respect to a 

proceeding in which the SEF Official is a member of the relevant panel.

(e) Any Participant, Sponsored Participant, Account Manager, Authorized Trader, Client, 

Customer or Supervised Person may be represented by counsel during any Disciplinary 

Action pursuant to this Section 6.

(f) The SEF may hold a Participant or any Customer or Client liable for, and impose sanctions 

against such Participant, Customer or Client, for such Participant’s, Customer’s or Client’s

own acts and omissions that constitute a violation as well as for, in the case of a Participant, 

the acts and omissions of each (A) Authorized Trader of such Participant, (B) other

Supervised Person of such Participant, (C) other Person using a User ID of such Participant 

or login credentials linked to the Participant or User ID, (D) agent or representative of such 
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Participant, in each case, that constitute a violation as if such violation were that of the 

Participant, or (E) Sponsored Participant, Client or Customer of such Participant.

(g) The SEF may hold an Authorized Trader liable for, and impose sanctions against such 

Authorized Trader for, such Authorized Trader’s own acts and omissions that constitute a 

violation as well as or for the acts and omissions of any agent or representative of such 

Authorized Trader that constitute a violation as if such violation were that of the 

Authorized Trader.

Rule 6001 Inquiries and Investigations

(a) The Market Regulation Department shall investigate potential or alleged violations of the 

SEF Rules. The Market Regulation Department will commence an investigation (i) upon 

the receipt of a request from CFTC staff or (ii) upon the discovery or receipt of information 

that, in the judgment of the Market Regulation Department, indicates a reasonable basis 

for finding that a violation may have occurred or will occur. The Market Regulation 

Department will determine the nature and scope of its inquiries and investigations and will 

function independently of any commercial interests of the SEF.

(b) The Market Regulation Department may:

(1) initiate and conduct inquiries and investigations, and engage such third-party 

advisors, include legal counsel, as it deems appropriate;

(2) prepare Investigation Reports and make recommendations concerning initiating 

disciplinary proceedings;

(3) prosecute alleged violations within the SEF’s disciplinary jurisdiction; and

(4) represent the SEF on summary imposition of fines, summary suspension or other 

summary action.

(c) Each Clearing Firm, Participant, Sponsored Participant, Account Manager, Authorized 

Trader, Customer, Client and Supervised Person and any other Person that is subject to the 

SEF’s jurisdiction:

(1) is obligated to appear and testify and respond in writing to interrogatories within 

the time period required by the SEF in connection with:

(i) any SEF Rule or any other provision of Applicable Law for which the SEF 

has disciplinary jurisdiction;

(ii) any Disciplinary Action; or

(iii) any preparation for and presentation during a Disciplinary Action; 
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(2) is obligated to produce books, records, papers, documents or other tangible 

evidence in its, his or her possession, custody or control within the time period 

required by the SEF in connection with:

(i) any SEF Rule or any other provision of Applicable Law for which the SEF 

has disciplinary jurisdiction;

(ii) any situation in which such books, records, papers, documents or other 

tangible evidence would be useful to the SEF in determining if a violation 

of a SEF Rule has occurred;

(iii) any Disciplinary Action; or

(iv) any preparation for and presentation during a Disciplinary Action; and

(3) may not impede or delay any Disciplinary Action.

(d) Each investigation must be completed in a timely manner. Absent mitigating factors, a 

timely manner is no later than twelve (12) months after the date that an investigation is 

opened. Mitigating factors that may reasonably justify an investigation taking longer than 

twelve (12) months to complete include the complexity of the investigation, the number of 

firms or individuals involved as potential wrongdoers, the number of potential violations 

to be investigated, and the volume of documents and data to be examined and analyzed by 

the Market Regulation Department.

Rule 6002 Reports of Investigations

(a) The Market Regulation Department will maintain a log of all investigations and the 

disposition of each. The Market Regulation Department will prepare an Investigation 

Report, regardless of whether the evidence gathered during any inquiry or investigation 

forms a reasonable basis to believe that a violation within the SEF’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) The Investigation Report will include the reasons for initiating the investigation (including 

a summary of the complaint, if any), all relevant facts and evidence gathered, Market 

Regulation Department’s analysis and conclusions, the potential respondent’s disciplinary 

history at the SEF, and the recommendation of the Market Regulation Department. For 

each potential respondent, the Market Regulation Department will recommend:

(1) closing the investigation without further action;

(2) settlement;

(3) summary action;

(4) the preparation and service of a Notice of Charges for initiating a disciplinary 

proceeding;
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(5) resolving the investigation through an informal disposition, including the issuance 

of a warning letter (an informal disposition (including the issuance of a warning 

letter) will not constitute a finding of a violation or a sanction);

(6) forwarding the Investigation Report to a Review Panel as discussed in Rule 6004; 

or

(7) in the case of one of the violations described in Rule 6016(a)(1) through (4), 

forwarding the Investigation Report to the Regulatory Oversight Committee for 

determination regarding whether to impose a summary fine under Rule 6016.

(c) After reviewing the Investigation Report, the Chief Compliance Officer will:

(1) proceed with the Market Regulation Department’s recommendation;

(2) forward the Investigation Report to a Review Panel as discussed in Rule 6004; or

(3) in the case of one of the violations described in Rule 6016(a)(1) through (4), 

forward the Investigation Report to the Regulatory Oversight Committee for 

determination regarding whether to impose a summary fine under Rule 6016.

Rule 6003 Opportunity to Respond

(a) If the Review Panel authorizes disciplinary proceedings or the Chief Compliance Officer 

determines to proceed with the Market Regulation Department’s recommendation to 

initiate disciplinary proceedings, the Market Regulation Department will notify each 

potential respondent that the Market Regulation Department or Review Panel has 

recommended formal disciplinary charges against the potential respondent.

(b) The SEF 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 Market Regulation 

Department.

Rule 6004 Review of Investigation Reports

(a) The Chief Compliance Officer may, in his/her discretion, convene a Review Panel to 

review the Investigation Report.

(b) The Review Panel shall be appointed by the Chief Compliance Officer or the SEF’s 

Regulatory Services Provider and shall be comprised of three individuals, at least two of 

whom would not be disqualified from serving as Public Directors. Each Review Panel must 

include members who have had relevant experience in some capacity (whether as a current 

or former employee, officer, director, principal, consultant, advisor, service provider or 

otherwise) working with or for sufficient different Membership Interests so as to ensure 

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

Review Panel’s responsibilities, and no member of the Review Panel may be involved in 
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the adjudication of any other stage of the same proceeding. If a vacancy occurs on a Review 

Panel after it has begun a proceeding, the remaining members of the panel shall complete 

consideration and disposition of the matter. Once the Review Panel has provided its 

decision, it shall be dissolved automatically.

(c) The Review Panel will review the Investigation Report and any reports of additional 

investigation or evidence provided by the Market Regulation Department pursuant to Rule 

6004(c)(1) below and, within thirty (30) days of receiving the Investigation Report or 

report of additional investigation or evidence, as applicable, will take one of the following 

actions:

(1) If the Review Panel determines that additional investigation or evidence is needed, 

it will promptly direct the Market Regulation Department to conduct further 

investigation or obtain additional evidence.

(2) If the Review Panel determines that no reasonable basis exists for finding a 

violation of the SEF Rules or any other provision of Applicable Law for which the 

SEF has disciplinary jurisdiction has occurred or is about to occur or that 

adjudication is otherwise unwarranted, it may direct that no further action be taken. 

Such determination will be in writing, and will include the reason the investigation 

was initiated, a summary of the complaint, a written statement setting forth the facts 

and analysis supporting the decision and, if applicable, any recommendations. The 

Review Panel shall also provide the written statement to any applicable Regulatory 

Services Provider.

(3) If the Review Panel determines that a reasonable basis exists for finding a violation 

of the SEF Rules or any other provision of Applicable Law for which the SEF has 

disciplinary jurisdiction has occurred or is about to occur and adjudication is 

warranted, the Review Panel will determine for each potential respondent whether 

to authorize:

(i) the informal disposition of the investigation (by issuing a warning letter or 

otherwise) because disciplinary proceedings are unwarranted, in which case 

the Review Panel shall provide a written explanation to any Regulatory 

Services Provider;

(ii) the closing of the investigation without any action because no reasonable 

basis exists to believe that a violation within the SEF’s jurisdiction has 

occurred or is about to occur in which case the Review Panel shall provide 

a written explanation to any Regulatory Services Provider; or

(iii) the commencement of disciplinary proceedings because a reasonable basis 

exists to believe that a violation within the SEF’s jurisdiction has occurred 

or is about to occur.

(d) A failure of the Review Panel to act within the time prescribed above shall not prevent the 

appointment of a Disciplinary Panel. The Chief Compliance Officer shall inform the ROC 

of any such failure of the Review Panel to act. The ROC shall, within thirty (30) days of 
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the date by which the Review Panel was required to act review the failure and take 

appropriate action and may itself take any of the actions which the Review Panel could 

have taken under Rule 6004(c), including appointment of a Disciplinary Panel.

Rule 6005 Notice of Charges

(a) If the Review Panel (or the ROC in the event of a failure of the Review Panel to act within 

the requisite time period) authorizes disciplinary proceedings or the Chief Compliance 

Officer elects to follow the recommendation of the Market Regulation Department to 

commence a disciplinary proceeding, the Chief Compliance Officer will appoint a 

Disciplinary Panel as provided in Rule 6009. In addition, the Market Regulation 

Department will prepare, and serve in accordance with Rule 6007, a notice of charges (a 

“Notice of Charges”).

(b) A Notice of Charges will:

(1) state the acts, practices or conduct that the respondent is alleged to have engaged 

in;

(2) state the SEF Rule or other provision of Applicable Law alleged to have been 

violated or about to be violated;

(3) state the proposed sanctions;

(4) advise the respondent of its right to a hearing;

(5) advise the respondent of its right to be represented by legal counsel of its choosing 

in all succeeding stages of the disciplinary process;

(6) state the period of time within which the respondent can request a hearing on the 

Notice of Charges, which will not be less than twenty (20) days after service of the 

Notice of Charges;

(7) advise the respondent that any failure to request a hearing within the period stated,

except for good cause, will be deemed to constitute a waiver of the right to a 

hearing; and

(8) advise the respondent that any allegation in the Notice of Charges that is not 

expressly denied or answered will be deemed to be admitted.

Rule 6006 Answer to Notice of Charges

(a) If the respondent determines to answer a Notice of Charges, the respondent must file

answers within twenty (20) days after being served with such notice, or within such longer 

time period determined by the Disciplinary Panel in accordance with Rule 6012.
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(b) To answer a Notice of Charges, the respondent must in writing:

(1) specify the allegations that the respondent denies or admits;

(2) specify the allegations that the respondent does not have sufficient information to 

either deny or admit;

(3) specify any specific facts that contradict the Notice of Charges;

(4) specify any affirmative defenses to the Notice of Charges; and

(5) sign and serve the answer on the Disciplinary 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 general denial by the 

respondent, without more, will not satisfy the foregoing requirements.

Rule 6007 Service of Notice of Charges

(a) Any Notice of Charges or other documents to be served pursuant to this Section 6 may be

served on the respondent personally or may be served (and service shall be deemed 

complete) by leaving the same at his or her place of business, by entrusting the same to 

reputable overnight courier for tracked delivery, or by depositing the same in the United 

States mail, postage prepaid, via registered or certified mail, in either case addressed to 

respondent at the address as it appears on the books and records of the SEF.

(b) Any Notice of Charges or other documents contemplated to be served pursuant to this 

Section 6 may also be served upon the respondent and service shall be deemed complete 

via electronic mail to the electronic mail address as it appears on the books and records of 

the SEF.

Rule 6008 Settlement Offers

(a) A respondent or potential respondent may, at any time after completion of an Investigation 

Report and before disciplinary proceedings have concluded, propose in writing an offer of 

settlement related to anticipated or instituted disciplinary proceedings.

(b) Any offer of settlement should contain proposed findings and sanctions and be signed by 

the respondent or potential respondent and submitted to the Market Regulation 

Department.

(c) A respondent or potential respondent may offer to settle disciplinary proceedings without 

admitting or denying the findings contained in the Notice of Charges but must accept the 

jurisdiction of the SEF over it and over the subject matter of the proceedings and consent 

to the entry of the findings and sanctions imposed.
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(d) If a respondent or potential respondent submits an offer of settlement in accordance with 

Rule 6008(a) above, the Market Regulation Department will forward the offer to the Chief 

Compliance Officer and the Chief Compliance Officer will in turn forward the offer to the 

Disciplinary Panel with a recommendation on whether to accept or reject the offer.

(e) If an offer of settlement is forwarded to it pursuant to Rule 6008(d) above, the Disciplinary 

Panel must review the offer of settlement within ninety (90) Business Days after receipt of 

the offer of settlement by the Chief Compliance Officer unless an extension has been 

agreed by the respondent in writing. The Disciplinary Panel may accept the offer of 

settlement, but may not alter the terms of a settlement offer unless the respondent agrees. 

A Disciplinary Panel, in its discretion, may permit the respondent to accept a sanction 

without admitting or denying the rule violation on which the sanction is based.

(f) If an offer of settlement is accepted by the Disciplinary Panel, it shall issue a written 

decision specifying:

(1) the rule violations it has reason to believe were committed, including the basis or 

reasons for the panel’s conclusions;

(2) any sanction to be imposed, which must include full customer restitution where 

customer harm is demonstrated, except where the amount of restitution or to whom 

it should be provided cannot be reasonably determined; and

(3) if applicable, that the respondent has accepted the sanctions imposed without either 

admitting or denying the rule violations.

(g) In the event that the Disciplinary Panel accepts an offer of settlement without the agreement 

of the Chief Compliance Officer, the Disciplinary Panel’s written decision must adequately 

support such acceptance.

(h) If an offer of settlement is accepted and the related decision becomes final, the respondent’s 

submission of the offer will be deemed to constitute a waiver of the right to notice, 

opportunity for a hearing and review and appeal under the SEF Rules.

(i) The respondent may withdraw his, her or its offer of settlement at any time before final 

acceptance by the Disciplinary Panel. If an offer is withdrawn after submission, or is 

rejected by the Disciplinary Panel, the respondent must not be deemed to have made any 

admissions by reason of the offer of settlement and must not be otherwise prejudiced by 

having submitted the offer of settlement.

(j) If the offer of settlement of a respondent or potential respondent is not accepted by the 

Disciplinary Panel, fails to become final or is withdrawn by the respondent or potential 

respondent, 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 Market Regulation Department may use an unaccepted offer 

of settlement as an admission or in any other manner at a hearing of disciplinary 

proceedings.
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Rule 6009 Disciplinary Panel

(a) The Chief Compliance Officer or the SEF’s Regulatory Services Provider will appoint a 

Disciplinary Panel (a) 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 and/or (b) to review any offer of settlement made by a respondent or 

potential respondent after completion of an Investigation Report. The Disciplinary Panel 

will be comprised of three individuals, at least two of whom would not be disqualified from 

serving as Public Directors. In addition, each Disciplinary Panel must include members 

who have had relevant experience in some capacity (whether as a current or former 

employee, officer, director, principal, consultant, advisor, service provider or otherwise) 

working with or for sufficient different Membership Interests so as to ensure fairness and 

to prevent special treatment or preference for any Person in the conduct of the Disciplinary 

Panel’s responsibilities. A Disciplinary Panel may not include any members of the SEF’s 

compliance staff or any Person involved in adjudicating any other stage of the same 

proceeding. If a vacancy shall occur on a Disciplinary Panel after it has begun its 

proceedings, the remaining members shall complete consideration and disposition of the 

matter. Once a Disciplinary Panel has made its decision and notified all relevant parties, it 

shall be dissolved automatically. The chair of the Disciplinary Panel shall be appointed by 

the Chief Compliance Officer.

(b) Within ten (10) days of being notified of the appointment of the Disciplinary Panel, a 

respondent may seek to disqualify any individual named to the Disciplinary Panel for the 

reasons identified in the SEF Rules or for any other reasonable grounds by serving written 

notice on the Chief Compliance Officer. By not timely filing a request for disqualification, 

the respondent will be deemed to have waived any objection to the composition of a 

Disciplinary Panel. The Chief Compliance Officer, in consultation with the General 

Counsel, of the SEF 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.

(c) No Person shall serve on a Disciplinary Panel unless that Person has agreed in writing that 

he or she will not publish, divulge, or make known in any manner, any facts or information 

regarding the business of any Person or any other information which may come to his 

attention in his official capacity as a member of the Disciplinary Panel, except when 

reporting to the Board or to a committee concerned with such information or to the Market 

Regulation Department, when requested by the CFTC or other Government Agency or 

when compelled to testify in any judicial or administrative proceeding.

(d) All information, records, materials and documents provided to the Disciplinary Panel and 

all deliberations, testimony, information, records, materials and documents related thereto 

shall be treated as non-public and confidential and shall not be disclosed, except as 

necessary to further a SEF investigation or as required by law.

Rule 6010 Convening Hearings of Disciplinary Proceedings

(a) A hearing will be conducted privately and confidentially. Notwithstanding the 

confidentiality of hearings, the Disciplinary Panel may appoint an expert to attend any 
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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 Disciplinary Panel will promptly convene 

a hearing to conduct the disciplinary proceedings with respect to such respondent. Parties 

to a disciplinary proceeding include each respondent and the Market Regulation 

Department.

(c) The chair of the Disciplinary Panel may continue, adjourn or otherwise conduct the 

hearing, as he or she may deem appropriate. The chair of the Disciplinary Panel will 

determine all procedural and evidentiary matters, including the admissibility and relevance 

of any evidence proffered.

(d) In determining procedural and evidentiary matters, the chair of the Disciplinary Panel will 

not be bound by any evidentiary or procedural rules or law. Once admitted during the 

hearing, the Disciplinary Panel may consider, and attach the weight it believes appropriate 

to, evidence or other materials. The General Counsel of the SEF, or his or her designee, 

may provide guidance to the chair of the Disciplinary Panel on the conduct of the hearing.

(e) Except for procedural and evidentiary matters decided by the chair of the Disciplinary 

Panel pursuant to Rule 6010(c) above and Rule 6012, unless each respondent otherwise 

consents, the entire Disciplinary Panel must be present during the entire hearing and any 

related deliberations.

Rule 6011 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 the SEF that the Market Regulation 

Department will use to support the allegations and proposed sanctions in the Notice of 

Charges or which the chair of the Disciplinary Panel deems relevant to the disciplinary 

proceedings. Notwithstanding the foregoing, no respondent will have the right to review, 

and the SEF will have no obligation to disclose, any documents that:

(1) are privileged or constitute attorney work product;

(2) were prepared by an employee of the SEF but will not be offered in evidence in the 

disciplinary proceedings;

(3) may disclose a technique or guideline used in examinations, investigations or 

enforcement proceedings; or 

(4) disclose the identity of a confidential source.

(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 Market Regulation Department, the Market 
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Regulation Department may redact, edit or code such information before furnishing it to 

the respondent.

(c) Notwithstanding anything in Rule 6011(b) above to the contrary, the Market Regulation 

Department:

(1) 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

(2) will provide the respondent with access to the information and portions of the 

documents that the Market Regulation Department intends to rely on to support the 

allegations or proposed sanctions in the Notice of Charges.

(d) For purposes of this Rule 6011, information that could adversely affect competitive 

positions may include positions in Swaps or other positions currently held, trading 

strategies employed in establishing or liquidating positions, the identity of any Customer, 

Client, Sponsored Participant, Participant or Authorized Trader and the personal finances 

of the Person providing the information.

Rule 6012 Conducting Hearings of Disciplinary Proceedings

(a) At a hearing conducted in connection with any disciplinary proceedings, the Market 

Regulation Department will present its case supporting the allegations and proposed 

sanctions in the Notice of Charges to the Disciplinary Panel. The respondent is entitled to 

attend and participate in the hearing.

(b) At a hearing conducted in connection with any disciplinary proceedings, the Disciplinary 

Panel or the Market Regulation Department and each respondent may:

(1) present evidence and facts determined relevant and admissible by the chair of the 

Disciplinary Panel;

(2) call and examine witnesses; and

(3) cross-examine witnesses called by other parties.

(c) 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 chair of the Disciplinary Panel may limit evidence concerning any allegations not 

expressly denied in determining the sanctions to impose. If a respondent fails to file an 

answer but appears at the hearing, the respondent may not participate in the hearing (by 

calling or cross-examining witnesses, testifying in defense, presenting evidence concerning 

the Notice of Charges, or otherwise) unless the Disciplinary Panel determines that the 

respondent had a compelling reason for failing to timely file an answer. If the Disciplinary 

Panel determines that the respondent had a compelling reason for failing to timely file an 

answer, the Disciplinary Panel will adjourn the hearing and direct the respondent to 

promptly file a written answer in accordance with Rule 6006.
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(d) If the respondent has requested a hearing on a charge that the respondent denies, or on a 

sanction set by the Disciplinary Panel under Rule 6014, the respondent will be given an 

opportunity for a hearing in accordance with the SEF Rules. Except for good cause, such 

hearing will be limited to addressing those charges denied by the respondent and/or 

sanctions set by the Disciplinary Panel under Rule 6014 for which a hearing has been 

requested.

(e) Any Person entitled, or required or called upon, to attend a hearing before a Disciplinary 

Panel pursuant to Rule 6012(b)(2) will be given reasonable notice, confirmed in writing, 

specifying the date, time and place of the hearing, and the caption of the disciplinary 

proceedings. All Persons subject to the SEF’s jurisdiction that are called as witnesses are 

required to appear at the hearing and, where applicable, produce evidence. The SEF 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 Disciplinary Panel determines that a reasonable 

basis exists to believe that the respondent violated or is about to violate the SEF Rules or 

any other provision of Applicable Law for which the SEF has disciplinary jurisdiction other 

than the violations alleged in the Notice of Charges, the Disciplinary Panel may consider 

those apparent violations after providing the respondent with an opportunity to answer the 

additional allegations in accordance with Rule 6006. In connection with considering 

apparent violations pursuant to this Rule 6012(f), the Disciplinary Panel may request that 

the Market Regulation Department provide the Disciplinary Panel with any additional 

information related to the violations at issue.

(g) The Disciplinary Panel may provide that a sanction be summarily imposed upon any Person 

within its jurisdiction whose actions impede the progress of a hearing.

(h) If the respondent has requested the hearing, a copy of the hearing must be made and must 

become a part of the record of the proceedings. The SEF will 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 chair of the Disciplinary 

Panel may within his or her sole discretion require the respondent to pay the costs for 

transcribing the recording of the hearing.

(i) No interlocutory appeals of rulings of any Disciplinary Panel or chair of the Disciplinary 

Panel are permitted.

Rule 6013 Decision of Disciplinary Panel

(a) Promptly following a hearing, the Disciplinary Panel will issue a written order rendering 

its final decision based on the weight of the evidence contained in the record of the 

disciplinary proceedings. A decision by a majority of the Disciplinary Panel will constitute 

the final decision of the Disciplinary Panel.
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(b) The Disciplinary Panel will serve a copy of the order of the disciplinary proceedings on 

the respondent and the Market Regulation Department. The order will include:

(1) The name of the respondent;

(2) the Notice of Charges or summary of the charges;

(3) the answer, if any, or a summary of the answer;

(4) a summary of the evidence produced at the hearing or, where appropriate, 

incorporation by reference of the Investigation Report;

(5) a statement of findings of fact and conclusions with respect to each charge, 

including a complete explanation of the evidentiary and other basis for such 

findings and conclusions with respect to each charge;

(6) each specific SEF Rule and/or other provision of Applicable Law that the 

respondent was found to have violated;

(7) a declaration of all sanctions imposed against the respondent, if any, including the 

basis for such sanctions and the effective date of each sanction;

(8) notice of respondent’s right to appeal; and

(9) a statement informing the respondent of the availability of CFTC review of the 

action pursuant to Part 9 of the CFTC Regulations.

(c) The written decision of the Disciplinary Panel will become effective upon the expiration 

of fifteen (15) days after it is served on the respondent and provided to the Market 

Regulation Department; provided, however, that the SEF may cause the decision to become 

effective prior to that time to the extent permitted under Part 9 of the CFTC Regulations.

Rule 6014 Sanctions

(a) After notice and opportunity for hearing in accordance with the SEF Rules, the SEF will 

impose sanctions on any Person subject to the SEF’s jurisdiction, including any Clearing 

Firm, Customer, Client, Sponsored Participant, Participant, Account Manager, Authorized 

Trader or Supervised Person, or any Person using a Participant’s User ID or login 

credentials linked to a Participant or User ID, if such Person is found to have violated or to 

have attempted to violate a SEF Rule or other provision of Applicable Law for which the 

SEF has disciplinary jurisdiction. All sanctions, including those imposed pursuant to an 

accepted settlement offer, must 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. Any such sanction (including any fine) shall be commensurate 

with the violation committed and clearly sufficient to deter recidivism or similar violations 

by other market participants.
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The SEF may impose one or more of the following sanctions or remedies:

(1) censure;

(2) limitation on Trading Privileges, ability to otherwise access the SEF, and/or other 

activities, functions or operations;

(3) suspension of Trading Privileges and/or ability to otherwise access the SEF;

(4) fine (subject to Rule 6014(b) below);

(5) restitution and/or disgorgement;

(6) termination of Trading Privileges and/or ability to otherwise access the SEF; 

(7) limitation, suspension or termination of rights as a Clearing Firm; or

(8) any other sanction or remedy deemed to be appropriate.

(b) The SEF may impose a fine of up to $100,000, unless aggravating or mitigating 

circumstances otherwise warrant as determined by the SEF, for each violation of the SEF 

Rules or other provision of Applicable Law for which the SEF has disciplinary jurisdiction. 

The minimum fine for any one violation is $1,000. If a fine or other amount is not paid 

within thirty (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 lesser of (i) the quoted prime rate plus three 

percent, and (ii) the maximum rate of interest permitted by Applicable Law. The SEF has 

sole discretion to select the bank on whose quotations it will base the prime rate. A 

Participant will be responsible for paying any fine or other amount imposed on, but not 

paid by, any of its Supervised Persons.

Rule 6015 Right to Appeal from Disciplinary Panel Decision, Summary Impositions of 

Fines and Other Summary Actions

(a) Each respondent found by the Disciplinary Panel to have violated the SEF Rules or other 

provision of Applicable Law for which the SEF has disciplinary jurisdiction or who is 

subject to termination or limitation of Trading Privileges, any summary fine imposed 

pursuant to Rule 6016 or any other summary action may appeal the decision within twenty 

(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) The SEF 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 twenty 

(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.
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(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:

(1) the order or summary action was arbitrary, capricious, an abuse of discretion or not 

in accordance with the SEF Rules;

(2) the order or summary action exceeded the authority or jurisdiction of the 

Disciplinary Panel, the Chief Compliance Officer or the SEF;

(3) the order or summary action failed to observe required procedures;

(4) the order or summary action was unsupported by the facts or evidence; or

(5) the sanctions, remedies or costs imposed were inappropriate or unsupported by the 

record.

(e) The Chief Compliance Officer will forward copies of any notice of appeal received by him 

or her to all parties to the disciplinary proceeding or summary action, as the case may be, 

except the appellant. On or before the twentieth (20th) day after filing a notice of appeal, 

the appellant must file with the Chief Compliance Officer and serve on the appellee a brief 

supporting the notice of appeal and documents supporting the brief. On or before the 

twentieth (20th) day after the date on which the appellant serves its supporting brief, the 

appellee must file and serve its brief in opposition on the Chief Compliance Officer and 

the appellant. On or before the tenth (10th) day after the date on which the appellee serves 

its brief in opposition, the appellant may file and serve on the SEF a brief in reply.

(f) In connection with any appeal, the Market Regulation Department will furnish to the Chief 

Compliance Officer and to the appellant and appellee a transcript of the hearing and any 

exhibits introduced at the hearing.

(g) No later than thirty (30) days after the last submission filed pursuant to paragraph (e) of 

this Rule 6015, the Chief Compliance Officer or the SEF’s Regulatory Services Provider 

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 Market 

Regulation Department or have been a member of the Disciplinary Panel involved in the 

matters on appeal and at least two of whom would not be disqualified from serving as 

Public Directors. In addition, each Appeals Panel must include members who have had 

relevant experience in some capacity (whether as a current or former employee, officer, 

director, principal, consultant, advisor, service provider or otherwise) working with or for 

sufficient different Membership Interests so as to ensure fairness and to prevent special 

treatment or preference for any Person in the conduct of the Appeals Panel’s 

responsibilities. The chair of the Appeals Panel shall be an individual who would not be 

disqualified from serving as a Public Director.

(h) Within ten (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 or any Person 

designated as chair thereof for the reasons identified in Rule 2500 or in the definition of 
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Public Director (as the case may be) or on other reasonable grounds, 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 and appointment of its chair. 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 the SEF Rules, or remanding the matter to the same or a 

different Disciplinary Panel for further disciplinary proceedings or for reconsideration by 

the Chief Compliance Officer in the case of summary action. The Appeals Panel may order 

a new hearing for good cause or if the Appeals Panel deems it appropriate.

(l) As promptly as reasonably possible following its review, the Appeals Panel will issue a 

written decision on appeal rendering its decision based on the preponderance of the 

evidence before the Appeals Panel and will provide a copy to the Chief Compliance 

Officer, the appellant and the appellee. 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 SEF Rule and other provision of Applicable 

Law for which the SEF has disciplinary jurisdiction 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 the SEF and will not be subject to appeal within the 

SEF; provided, however, that any suspension, expulsion, disciplinary or access denial 

action or other adverse action by the SEF may (to the extent required thereby) be subject 

to review by the CFTC pursuant to Part 9 of the CFTC Regulations.
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Rule 6016 Summary Imposition of Fines

(a) Notwithstanding any other provision of this Chapter 6, the SEF may, based on a 

determination made by the Regulatory Oversight Committee and without the need for any 

formal disciplinary procedures, summarily impose a fine against a Participant, Sponsored 

Participant, Account Manager, Authorized Trader, Client, Customer, Supervised Person or 

any other Person using a User ID of a Participant or login credentials linked to a Participant 

or User ID for failure to:

(1) comply with the requirements set forth in Rule 4013.A.(k)(1)(ii);

(2) make timely and accurate submissions to the SEF of notices, reports or other 

information required by the SEF Rules;

(3) make timely payments of assessments, fees, costs, charges or fines to the SEF; or

(4) keep any books and records required by the SEF Rules.

Investigations of possible violations of any of the foregoing shall be conducted by the 

Market Regulation Department in accordance with Rule 6001, but otherwise actions 

taken pursuant to this Rule 6016 shall be made in accordance with the procedures set 

forth herein rather than the procedures set forth in the remainder of this Chapter 6. The 

authority to impose a summary fine under this Rule 6016 does not prevent the Chief 

Compliance Officer from submitting any Investigation Report to a Review Panel in 

accordance with the formal disciplinary procedures of this Chapter 6 if the Regulatory 

Oversight Committee elects not to impose such a summary fine.

(b) The Market Regulation Department will give notice of any fine determined to be imposed 

by the Regulatory Oversight Committee pursuant to this Rule 6016 to each Participant or 

other Person subject thereto. The notice will specify:

(1) the violations of the SEF Rules for which the fine is being imposed;

(2) the date of the violation for which the fine is being imposed; and

(3) the amount of the fine.

(c) Within twenty (20) days of serving the notice of fine, the Participant or other Person subject 

thereto, as the case may be, must either pay or cause the payment of the fine. If a fine or 

other amount is not paid within twenty (20) days of the date that it becomes payable, then 

interest will accrue on the sum from the date that it became payable at the lesser of (i) the 

quoted prime rate plus three percent, and (ii) the maximum rate of interest permitted by 

Applicable Law. The SEF has sole discretion to select the bank on whose quotations it will 

base the prime rate. A Participant will be responsible for paying any fine or other amount 

imposed on, but not paid by, any of its Supervised Persons.

(d) The SEF will set the amount of any fines imposed pursuant to this Rule 6016 at no less 

than $1,000 per violation, with the maximum fine for each violation not to exceed $5,000. 
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Recurring violations will be subject to progressively larger fines. Summary imposition of 

fines pursuant to this Rule 6016 will not preclude the SEF from bringing any other action 

against the Participant or any other Person.

Rule 6017 Warning Letters

The SEF authorizes the Market Regulation Department to issue a warning letter to a Person or 

entity under investigation or to recommend that a Disciplinary Panel take such an action. A 

warning letter issued in accordance with this Rule 6017 is not a penalty or an indication that a 

finding of a violation has been made. A copy of a warning letter issued by the Market Regulation 

Department will 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 6018 Summary Access Denial Actions

(a) The Chief Compliance Officer, upon a good faith determination that there is a reasonable 

belief that such immediate action is necessary to protect the best interests of the SEF, may 

summarily suspend, revoke, limit, condition, restrict or qualify the Trading Privileges of a 

Participant, Sponsored Participant or any Supervised Person, including denial of access to 

the SEF.

(b) Non-Participants, including Customers and Clients, may be denied access to the SEF by 

the Chief Compliance Officer upon a good faith determination that there are substantial 

reasons to believe that such immediate action is necessary to protect the best interests of 

the SEF.

(c) If practicable, a respondent must be served with a notice before the action is taken or 

otherwise at the earliest possible opportunity. The notice must state the action taken, the 

reasons for the action, and the effective date, time and the duration of the action taken. The 

party shall be advised of his right to a hearing, as soon as reasonably practicable, before a 

Disciplinary Panel by filing notice of intent with the Market Regulation Department within 

ten (10) Business Days of the notice date.

(d) Any suspension, revocation, limitation, condition, restriction or qualification imposed on 

any Participant, Supervised Person or non-Participant (including Sponsored Participants, 

Customers and Clients) pursuant to this Rule 6018 will be impartially enforced.

(e) Any denial, conditioning or termination that represents a suspension, expulsion, 

disciplinary or access denial action or other adverse action within the meaning of Part 9 of 

the CFTC Regulations may (to the extent required thereby) be subject to review by the 

CFTC pursuant to Part 9 of the CFTC Regulations.

Rule 6019 Rights and Responsibilities after Suspension, Temporary Deactivation or 

Termination

(a) When a Person’s Trading Privileges and/or ability to otherwise access the SEF are 

suspended or temporarily deactivated in accordance with Rule 3105(c), none of its rights 
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(including the right to hold oneself out to the public as a Participant or Authorized Trader, 

enter Orders into the SEF, submit Block Trades to the SEF, and receive Participant rates 

for fees, costs, and charges) will apply during the period of the suspension or deactivation, 

except for the right of the Person in question to assert claims against others as provided in 

the SEF Rules. Any such suspension or deactivation will not affect the rights of creditors 

under the SEF Rules or relieve the Person in question of its, his or her obligations under 

the SEF Rules to perform any Swaps entered into before the suspension or deactivation, or 

for any SEF fees, costs, or charges incurred during the suspension or deactivation. The SEF 

may discipline a suspended or deactivated Person under this Section 6 for any violation of 

the SEF Rules or other provision of Applicable Law committed by such Person before, 

during or after the suspension or deactivation.

(b) When a Person’s Trading Privileges and/or ability to otherwise access the SEF are 

terminated, all of its related rights will terminate, except for the right of the Person in 

question to assert claims against others, as provided in the SEF Rules. Any such 

termination will not affect the rights of creditors under the SEF Rules.

(c) When a Person’s Trading Privileges and/or ability to otherwise access the SEF are 

terminated, such person will pay to the SEF all assessments, fees, costs, charges and fines

due through the termination date (unless such Person shall have previously provided the 

SEF with written notice of a bona fide dispute in assessments, fees, costs and charges in 

which case such Person will pay all undisputed fees due through the termination date or 

unless any such fine is then the subject of an appeal, in which case such fine shall be due 

in accordance with the procedures applicable to such appeal).

(d) The SEF will not consider the application of a terminated Participant or Authorized Trader 

if such Participant or Authorized Trader, as the case may be, continues to fail to appear at 

disciplinary proceedings without good cause or continues to impede the progress of 

disciplinary proceedings.

(e) A suspended, deactivated or terminated Person remains bound by the SEF Rules and 

subject to the jurisdiction of the SEF with respect to any and all matters arising from, 

related to or in connection with, the status, actions or omissions of such Person prior to 

such suspension, deactivation or termination, and must cooperate in any inquiry, 

investigation, disciplinary proceeding, appeal of disciplinary proceedings, summary 

suspension or other summary action as if the suspended, deactivated or terminated Person 

still had Trading Privileges or ability to otherwise access the SEF.

Rule 6020 Notice to the Respondent, the Regulatory Services Provider and the Public; 

Effectiveness of Disciplinary and Access Denial Actions

(a) The SEF will provide written notice of disciplinary proceedings and of any access denial 

actions pursuant to Rule 3103 or 6018 to the relevant parties and the Regulatory Services 

Provider consistent with applicable CFTC Regulations. Whenever the SEF suspends, 

expels, fines or otherwise disciplines or denies any Person access to the SEF, the SEF will 

make the disclosures and notifications required by Part 9 of the CFTC Regulations 
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(including by any of the alternative methods available thereunder) and any other applicable 

CFTC Regulations.

(b) Without limiting the generality of the foregoing, the SEF shall, in accordance with the 

requirements of CFTC Regulation 9.11, provide written notice of its final decision 

regarding any disciplinary or access denial action to the Person against whom the action 

was taken within thirty (30) days of rendering such decision. Pursuant to CFTC Regulation 

9.12, any disciplinary or access denial action taken will not become effective until at least 

fifteen (15) days after the written notice is delivered to the Person disciplined or denied 

access; provided, however, that the SEF may cause a Disciplinary Action to become 

effective prior to that time in accordance with CFTC Regulation 9.12.

Rule 6021 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 if the Disciplinary Panel concludes that the respondent has behaved in a 

manifestly unreasonable manner. Costs may include costs associated with the inquiry or 

investigation, the prosecution by the Market Regulation 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 the SEF if the panel concludes that 

the SEF has behaved in a manifestly unreasonable manner in the commencement or 

conduct of the disciplinary proceedings in question. The Disciplinary Panel must limit any 

award of costs against the SEF 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. The SEF or the respondent will pay any costs ordered to be paid 

by it by the Disciplinary Panel within thirty (30) days of written notice of the amount 

imposed by the Disciplinary Panel. If costs are not paid within twenty (20) days of the date 

that it becomes payable, then interest will accrue on the sum from the date that it became 

payable at the lesser of (i) the quoted prime rate plus three percent and (ii) the maximum 

rate of interest permitted by applicable law. The SEF has sole discretion to select the bank 

on whose quotations it will base the prime rate. Participant will be responsible for paying 

any costs imposed on, but not paid by, any of its Supervised Persons.

Rule 6022 Ex Parte Communications

(a) A Person subject to a disciplinary proceeding or an appeal from a disciplinary proceeding 

(and any counsel or representative of such Person) and the Market Regulation Department 

(and any counsel or representative of the Market Regulation Department) shall not 

knowingly make or cause to be made an ex parte communication relevant to the merits of 

a disciplinary proceeding or an appeal from a disciplinary proceeding to any member of 

the Disciplinary Panel or Appeals Panel hearing such proceeding.
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(b) Members of a Disciplinary Panel or an Appeals Panel shall not knowingly make or cause 

to be made an ex parte communication relevant to the merits of a disciplinary proceeding 

or an appeal from a disciplinary proceeding to any Person subject to such proceeding (and 

any counsel or representative of such Person) or the Market Regulation Department (and 

any counsel or representative of the Market Regulation Department).

(c) Any Person who receives, makes or learns of any communication that is prohibited by this 

Rule 6022 shall promptly give notice of such communication and any response thereto to 

the Market Regulation Department and all parties to the proceeding to which the 

communication relates.

(d) A Person shall not be deemed to have violated this Rule 6022 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 6023 [Reserved]

Rule 6024 Extension or Waiver of the SEF Rules

If necessary and expedient, the Chief Compliance Officer may, in his or her sole discretion, waive, 

or extend the time period for performing, any act or acts designated by the SEF Rules, but only to 

the extent such waiver or extension is not inconsistent with the CEA, CFTC Regulations or other 

applicable regulations.

Rule 6025 Effect of Amendment, Repeal or New SEF Rule

(a) If an amendment or repeal of a SEF Rule or adoption of a new SEF Rule does not materially 

change the terms or conditions of a Swap and does not affect the value of open Swaps, then 

the effective date of any amendment or repeal of a SEF Rule or adoption of a new SEF 

Rule relating to Swaps is binding on all Swaps entered into before and after the effective 

date of such amendment, repeal or adoption.

(b) If an amendment or repeal of a SEF Rule or adoption of a new SEF Rule materially changes 

the terms or conditions of a Swap or affects the value of open Swaps, then the amendment, 

repeal or new SEF Rule is binding only on Swaps listed for trading after the effective date 

of such amendment, repeal or adoption, and Swaps listed as of the effective date of such 

amendment, repeal or adoption with no open positions then in existence, unless otherwise 

specifically provided by the Board.

Rule 6026 [Reserved]

Rule 6027 Governing Law, Jurisdiction and Dispute Resolution

(a) The law of the State of New York governs the SEF Rules regardless of the laws that would 

otherwise apply under applicable choice-of-law principles.

(b) Any dispute between the SEF and a Person arising from or in connection with the SEF 

Rules or use of the SEF must be brought to arbitration pursuant to subsection (c) of this 
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Rule 6027 within two (2) years from the occurrence of the event giving rise to the dispute. 

This Rule 6027 shall in no way create a cause of action nor authorize an action that would 

otherwise be prohibited by the SEF Rules.

(c) Any dispute between the SEF and a Person arising from or in connection with the SEF 

Rules will be settled by arbitration administered in New York County, New York by the 

American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules. 

The dispute will be submitted to one arbitrator who will be appointed by the AAA. Any 

arbitrator appointed for purposes of this Rule 6027 will have experience with and 

knowledge of commodities, derivatives and Swaps as listed on the National Roster of 

Arbitrators kept in the AAA’s records. Judgment on the award rendered by the arbitrator 

will be binding on the parties and may be entered in any state or federal court sitting in 

New York County, New York, and the SEF and each Person shall be deemed to have 

consented to the personal jurisdiction of any such court. Each party to the dispute will bear 

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

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

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

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

arbitrator, or any combination of any or all of the above. In the event that this Rule 6027 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, (i) exclusive jurisdiction for any such dispute 

will reside in any state or federal court sitting in New York County, New York, (ii) the 

SEF and the Person involved in the dispute will be presumed to have submitted to the 

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

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

jurisdiction or venue. Finally, all Persons unconditionally and irrevocably waive any and 

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

Rule 6028 Limitation of Liability, Indemnity

(a) UNLESS ARISING OUT OF THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT 

OR FRAUD OF THE SEF, THE SEF, ITS SUBSIDIARIES AND AFFILIATES AND 

THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS 

(EACH A “RELATED PARTY” AND COLLECTIVELY “RELATED PARTIES”) 

HAVE NO LIABILITY, CONTINGENT OR OTHERWISE, TO PARTICIPANTS OR 

TO THIRD PARTIES, FOR THE CORRECTNESS, QUALITY, ACCURACY, 

SECURITY, COMPLETENESS, RELIABILITY, PERFORMANCE, TIMELINESS, 

PRICING OR CONTINUED AVAILABILITY OF THE SEF SERVICES OR FOR 

DELAYS OR OMISSIONS OF THE SEF SERVICES, OR FOR THE FAILURE OF ANY 

CONNECTION OR COMMUNICATION SERVICE TO PROVIDE OR MAINTAIN 

PARTICIPANT ACCESS TO THE SEF SERVICES, OR FOR ANY INTERRUPTION 

IN OR DISRUPTION OF A PARTICIPANT’S ACCESS OR ANY ERRONEOUS 

COMMUNICATIONS BETWEEN THE SEF AND A PARTICIPANT. THE SEF AND 

ITS RELATED PARTIES ARE NOT LIABLE FOR ANY SPECIAL, INDIRECT, 

INCIDENTAL OR CONSEQUENTIAL DAMAGES WHICH A PARTICIPANT OR 

ANY THIRD PARTY MAY INCUR OR EXPERIENCE BECAUSE THE 

PARTICIPANT ENTERED INTO THESE TERMS OR RELIED ON THE SEF 
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SERVICES, EVEN IF THE SEF KNOWS OF THE POSSIBILITY OF THOSE 

DAMAGES. THE SEF AND ITS RELATED PARTIES ARE NOT RESPONSIBLE FOR 

INFORMING A PARTICIPANT OF ANY DIFFICULTIES THE SEF OR OTHER 

THIRD PARTIES EXPERIENCE CONCERNING USE OF THE SEF SERVICES OR TO 

TAKE ANY ACTION IN CONNECTION WITH THOSE DIFFICULTIES. THE SEF 

AND ITS RELATED PARTIES ALSO HAVE NO DUTY OR OBLIGATION TO 

VERIFY, CORRECT, COMPLETE OR UPDATE ANY INFORMATION DISPLAYED 

IN THE SEF SERVICES. EACH PARTICIPANT IS SOLELY RESPONSIBLE FOR 

ANY LOSSES, DAMAGES OR COSTS RESULTING FROM THE PARTICIPANT’S 

RELIANCE ON ANY DATA OR INFORMATION THAT THE SEF MAY PROVIDE 

IN CONNECTION WITH A PARTICIPANT’S USE OF THE SEF SERVICES.

(b) THE SEF DOES NOT MAKE ANY RECOMMENDATION AS TO THE SUITABILITY 

OF ANY INVESTMENT OR PROPOSED TRANSACTION. EACH PARTICIPANT 

ACKNOWLEDGES THAT THE SEF WILL NOT, AND ARE UNDER NO DUTY TO, 

PROVIDE ADVICE IN RELATION TO ANY SUCH TRANSACTION OR PROPOSED 

TRANSACTION THROUGH ANY SEF SERVICE. EACH PARTICIPANT AGREES 

THAT (i) THE SEF SERVICES ARE NOT AND WILL NOT BE THE BASIS FOR ANY 

OF INVESTMENT DECISIONS BY A PARTICIPANT AND (ii) PARTICIPANTS ARE 

SOLELY RESPONSIBLE FOR (A) ANY INVESTMENT OR TRADING DECISIONS 

THAT THE PARTICIPANT MAKES WITH RESPECT TO THE PRODUCTS 

AVAILABLE VIA ANY SEF SERVICE AND (B) DETERMINING WHETHER ANY 

TRANSACTION IS SUITABLE, APPROPRIATE OR ADVISABLE FOR THE 

PARTICIPANT OR SPONSORED PARTICIPANT OR CLIENTS OR CUSTOMERS. 

PROVISION OF THE SEF SERVICES DOES NOT MAKE THE SEF AN ADVISOR OR 

FIDUCIARY FOR A PARTICIPANT, SPONSORED PARTICIPANT, CLIENT OR 

CUSTOMER. THESE TERMS DO NOT CONSTITUTE AN OFFER TO SELL OR 

SOLICITATION OF AN OFFER TO BUY SECURITIES OR OTHER INSTRUMENTS. 

IN ADDITION, THE SEF SERVICES DO NOT INCLUDE ANY INVESTMENT, 

FINANCIAL, LEGAL OR TAX ADVICE WHICH PARTICIPANT MAY DESIRE OR 

NEED IN CONNECTION WITH ANY TRANSACTION. PARTICIPANTS ARE 

RESPONSIBLE FOR OBTAINING ANY LEGAL OR TAX ADVICE.

(c) IF A THIRD PARTY CLAIMS THAT THE SEF SERVICES INFRINGE UPON ITS 

PATENT COPYRIGHT, OR TRADE SECRET, OR ANY SIMILAR INTELLECTUAL 

PROPERTY RIGHT, THE SEF WILL DEFEND THE PARTICIPANT AGAINST THAT 

CLAIM AT THE SEF’S EXPENSE AND PAY ALL DAMAGES THAT A COURT 

FINALLY AWARDS, PROVIDED THAT THE PARTICIPANT PROMPTLY NOTIFY 

THE SEF IN WRITING OF THE CLAIM AND COOPERATE WITH THE SEF IN THE 

DEFENSE OR ANY RELATED SETTLEMENT NEGOTIATIONS. THE SEF SHALL 

HAVE SOLE CONTROL OVER THE DEFENSE AND ANY NEGOTIATION FOR ITS 

SETTLEMENT OR COMPROMISE. IF SUCH A CLAIM IS MADE OR IS LIKELY TO 

BE MADE, THE SEF SHALL, AT THE SEF’S SOLE OPTION, HAVE THE RIGHT TO 

TAKE ONE OR MORE OF THE FOLLOWING ACTIONS AT NO ADDITIONAL 

COST TO THE PARTICIPANT: (i) PROCURE THE RIGHT FOR THE PARTICIPANT 

TO CONTINUE THE USE OF THE SEF SERVICES; (ii) REPLACE THE SEF 

SERVICES WITH NON-INFRINGING SOFTWARE; OR (iii) MODIFY THE SEF 
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SERVICES SO AS TO BE NON-INFRINGING. IF THE SEF DETERMINE THAT 

NONE OF THESE ALTERNATIVES IS REASONABLY AVAILABLE, THE 

PARTICIPANT AGREES TO IMMEDIATELY TERMINATE ITS USE OF THE SEF 

SERVICES ON THE SEF’S WRITTEN REQUEST. HOWEVER, THE SEF HAS NO 

OBLIGATION FOR ANY CLAIM BASED ON THE SEF’S USE OF THE SEF 

SERVICES IN ANY MANNER INCONSISTENT WITH THESE TERMS, 

PARTICIPANT’S MODIFICATION OF THE SEF SERVICES OR PARTICIPANT’S 

COMBINATION, OPERATION, OR USE OF THE SEF SERVICES WITH ANY 

PRODUCT, DATA, OR APPARATUS NOT SPECIFIED OR PROVIDED BY THE SEF, 

PROVIDED THAT SUCH CLAIM SOLELY AND NECESSARILY IS BASED ON 

SUCH COMBINATION, OPERATION OR USE, OR FOR CONTINUED ALLEGEDLY 

INFRINGING ACTIVITY BY THE PARTICIPANT AFTER THE PARTICIPANT 

HAVE BEEN NOTIFIED OF POSSIBLE INFRINGEMENT, UNLESS APPROVED IN 

ADVANCE BY THE SEF. THE FOREGOING REPRESENTS THE SOLE AND 

EXCLUSIVE REMEDY FOR PARTICIPANTS WITH REGARD TO ANY OF THE 

ABOVE INFRINGEMENTS OR ALLEGED INFRINGEMENTS.

(d) WITH THE EXCEPTION OF THE PROVISIONS OF RULE 6028(c), THE SEF’S 

LIABILITY AND THE COLLECTIVE LIABILITY OF THE SEF’S RELATED 

PARTIES AND THE THIRD PARTY SERVICE PROVIDERS SELECTED BY THE 

SEF, IF ANY, ARISING OUT OF ANY KIND OF LEGAL CLAIM (WHETHER IN 

CONTRACT, TORT, OR OTHERWISE) OR IN ANY WAY CONNECTED TO A 

PARTICIPANT’S USE OF THE SEF SERVICES WILL NOT EXCEED $500,000 

UNLESS CAUSED DIRECTLY BY THE SEF’S GROSS NEGLIGENCE OR WILLFUL 

MISCONDUCT.

(e) NONE OF THE ABOVE WILL LIMIT PARTICIPANT’S RIGHTS AND REMEDIES 

OTHERWISE AVAILABLE UNDER THE STATE OR FEDERAL SECURITIES 

LAWS, CFTC REGULATIONS OR THE CEA.
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SECTION 7

EMERGENCIES

Rule 7000 Emergency Rules

(a) During an Emergency, the Board and/or the CEO (or, if the CEO is not available, the most 

senior Officer that is available), in consultation with the CFTC and/or any relevant DCO, 

as necessary, 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 the SEF, the Board, any committee of the 

Board, the CEO or any other Officer to take Emergency Action necessary or appropriate 

to respond to the Emergency. If applicable, the SEF may provide for the carrying out of 

Emergency Actions through its agreements with its Regulatory Services Provider.

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

must approve the enforcement of such Emergency Rule at a duly convened meeting. 

Directors may attend such a meeting by teleconference and such meeting may, if necessary, 

be conducted pursuant to Rule 2100(c). Notwithstanding, if the CEO (or, if the CEO is not 

available, the most senior Officer that is available) determines that Emergency Rules must 

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

reasonably be convened, then the CEO (or such seniormost Officer) 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 CEO (or such seniormost Officer) must convene a meeting of 

the Board (which may, if necessary, be conducted pursuant to Rule 2100(c)) as soon as 

practicable thereafter. Notwithstanding that the Board does not ratify or approve extending 

or making permanent any Emergency Rules implemented by the CEO or seniormost 

Officer pending convening of the Board meeting, all actions previously taken in accordance 

with such Emergency Rules shall remain binding and valid.

(c) Whenever the SEF, the Board, any committee of the Board, the CEO or any other Officer 

takes actions necessary or appropriate to respond to an Emergency in accordance with any 

Emergency Rule, a duly authorized representative of the SEF, where possible, will post an 

announcement in a Notice to Participants. When the Board and/or the CEO (or, if the CEO 

is not available, the most senior Officer that is available) determines that the Emergency 

has been reduced sufficiently to allow the SEF to resume normal functioning, any such 

actions responding to an Emergency will be terminated.

(d) The SEF 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, 

the SEF 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, the SEF will document the decisionmaking process related to such action. Such documentation will be kept for at least five (5) 
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years following the date on which the Emergency ceases to exist or to affect the SEF, and 

all such documentation will be provided to the CFTC upon request.
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SECTION 8

RECORDKEEPING AND REPORTING

Rule 8000 Maintenance of Books and Records by the SEF

(a) The SEF shall keep, or cause to be kept, all books and records required to be maintained 

by it pursuant to the CEA and the CFTC Regulations, including CFTC Regulations 37.1001 

and 45.2. Such records shall include, without limitation, a complete audit trail for all Swaps 

executed on or subject to the SEF Rules, investigatory files and disciplinary files.

(b) The SEF shall retain all books and records related to a Swap executed on or pursuant to the 

SEF Rules throughout the life of the Swap and for a period of at least five (5) years 

following the final termination of the Swap and shall retain all other books and records for 

a period of at least five (5) years, in each case, in the form and manner required under the 

CEA and CFTC Regulations, including CFTC Regulations 1.31, 45.2 and 37.1001.

(c) All books and records required to be maintained by the SEF shall be open to inspection 

upon request by any representative of the CFTC, the United States Department of Justice 

or the SEC or by any representative of a prudential regulator as authorized by the CFTC. 

In addition, all audit trail data and reconstructions shall be made available to the CFTC or 

the United States Department of Justice in a form, manner and time that is acceptable to 

the CFTC or the United States Department of Justice, as applicable.

(d) The SEF may disclose, to any Government Agency, Self-Regulatory Organization or other 

Person, information concerning or associated with a Participant or other Person if the SEF

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

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

for information was made.

Rule 8001 Order Information

(a) Each Authorized Trader entering an Order with respect to any Swap traded on or subject 

to the SEF Rules must include with the Order, all data required to enable the SEF to meet 

its reporting obligations under Parts 43 and 45 of the CFTC Regulations, including without 

limitation:

(1) the User ID;

(2) the Participant ID;

(3) the Legal Entity Identifier of the Participant and, where the Participant is acting as 

agent, of the Customer or Client, with respect to the Swap for which the Order is 

placed;

(4) the price or yield, quantity and maturity or expiration date of the Swap;

(5) side of the Order;
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(6) the Customer Type Indicator Code (as specified below);

(7) a yes/no indication of whether the Participant, Customer or Client is a Swap Dealer;

(8) a yes/no indication of whether the Participant, Customer or Client is a Major Swap 

Participant;

(9) a yes/no indication of whether the Participant, Customer or Client is a Financial 

Entity;

(10) a yes/no indication of whether the Participant, Customer or Client is a U.S. person;

(11) if the Swap will be allocated:

(i) an indication that the Swap will be allocated;

(ii) the Legal Entity Identifier of the Account Manager acting as agent;

(iii) a yes/no indication of whether the Account Manager acting as agent is a 

U.S. person;

(iv) an indication of whether the Swap is a post-allocation Swap;

(v) if the Swap is a post-allocation Swap, the account and Legal Entity 

Identifier for each Client that received allocations; and

(vi) if the Swap is a post-allocation Swap, the USI of the original Transaction 

between the Reporting Counterparty and the Account Manager acting as 

agent;

(12) if applicable, an indication that the Participant, Customer or Client will elect to rely 

on a Clearing Exception for any Swap resulting from the Order and a description 

of the applicable Clearing Exception; 

(13) a yes/no indication of whether the Order is part of a Package Transaction; 

(14) if the Order is part of a Package Transaction, a description of the Transaction;

(15) an indication of whether the Order is a Prime Brokerage Order; and

(16) if a Prime Brokerage Order, the identity of the relevant Prime Broker.

For purposes of this Rule 8001(a), the “Customer Type Indicator Codes” are as follows:

• CTI 1 – Orders for the proprietary account of a Participant that is natural person.

• CTI 2 – Orders for the proprietary account of a Participant that is not a natural 

person.
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• CTI 3 – Order entered by a Participant for the proprietary account of another 

Participant or for an account which the other Participant controls or has an 

ownership or financial interest in.

• CTI 4 – Any order not meeting the definition of CTI 1, 2 or 3, including those 

entered by Introducing Brokers on behalf of a Customer.

(b) Participants and ISVs that operate systems that route orders to the SEF are responsible for 

maintaining or causing to be maintained a routing/front-end audit trail for all Orders, which 

shall include Order entry, modification and cancellation and any SEF responses to such 

messages. For executed Orders, such audit trail must record the execution time of the 

Transaction, along with all fill information. Participants and ISVs shall maintain audit trail 

information as required by Applicable Law and must have the ability to produce audit trail 

data in a reasonably usable format upon request of the SEF. The SEF will enforce these 

audit trail and recordkeeping requirements by conducting an annual review of all 

Participants to verify their compliance with the SEF’s audit trail and recordkeeping 

requirements.

Rule 8002 Books and Records

(a) Each Member, Customer, Client and Clearing Member must prepare and keep, or cause to 

be kept, all books, ledgers and other records relating to its activity on the SEF required to 

be kept by it pursuant to Applicable Law, and must prepare and keep such other books and 

records relating to its SEF activity as the SEF may from time to time prescribe. Such books 

and records must include, as applicable, records of such Person’s trading, including records 

of the Person’s activity in the index or instrument used as a reference price, the underlying 

commodity and related derivatives markets, and records of all non-swap components of 

Package Transactions. Each such Person shall retain all required books and records in 

accordance with Applicable Law, including the applicable provisions of CFTC Regulations 

1.31 and 45.2, and shall make such books and records available, upon request, to the SEF, 

the SEF’s Regulatory Services Provider, the CFTC or the United States Department of 

Justice and as otherwise required by Applicable Law.

(b) In addition to the information required by subsection (a) of this Rule 8002, each Member 

must comply with all applicable requirements of CFTC Regulation 1.35.

(c) If a Participant cannot enter an Order received from its Customer into the SEF, either 

directly or indirectly through an Execution Specialist, the Participant must immediately 

create an electronic record that includes the account identifier that relates to the Customer, 

time of receipt and terms of the Order.

(d) Each Person required to keep records in accordance with this Rule 8002 shall keep all 

books and records in accordance with the SEF Rules for a period of five (5) years from the 

date on which they are first prepared unless otherwise provided in the SEF Rules or other 

Applicable Law. Such books and records shall be readily accessible during the first two (2) 

years of such five-year period, unless otherwise provided in the SEF Rules or other 

Applicable Law. Each such Person that is a counterparty to a Swap on the SEF or pursuant 
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to the SEF Rules shall retain all books and records related to such Swap for the life of the 

Swap and for a period of at least five (5) years following the final termination of the Swap. 

Each such Person that is a counterparty to an Uncleared Swap on the SEF or pursuant to 

the SEF Rules shall notify the SEF of any extension of the final termination of the Swap 

beyond the original stated maturity in order to enable the SEF to comply with Rule 8000(b) 

and the SEF’s obligations under Applicable Law.

(e) The SEF may require a Member, Customer or Client to furnish any information in 

connection with such Person’s activities on the SEF including (i) information relating to 

Swaps executed on the SEF or pursuant to the SEF Rules , on or pursuant to the rules of 

other swap execution facilities, DCMs or in related derivatives markets or to transactions 

or positions in the products underlying, related to or indexed to those Swaps or to which 

those Swaps are indexed (in whole or in part), and (ii) information requested by a 

Government Agency relating to the SEF and/or the SEF’s compliance with Applicable Law 

that the SEF believes is maintained by, or otherwise in the possession or control of, such 

Person.

(f) Each Authorized Trader shall prepare and keep, or cause to be kept, all books, ledgers and 

other records relating to its activity on the SEF as may be required to enable its related 

Member to comply with such Member’s obligations under this Rule 8002. Each Authorized 

Trader shall not knowingly take any action that would cause its associated Member to fail 

to comply with Rule 8002(d), and each Authorized Trader shall cooperate as necessary to 

enable its associated Member to comply with such Member’s obligations under Rule 

8002(e).

(g) Without limiting the generality of the foregoing, with respect to any Swap that has been 

allocated following execution on the SEF or pursuant to the SEF Rules, all Members, 

Customers and Clients must prepare and keep, or cause to be kept, all books, ledgers and 

other records as may be necessary to provide relevant information with respect to such 

post-trade allocation and will furnish such information to the SEF if the SEF, at the request 

of the CFTC or otherwise, requests such information. This Rule 8002(g) is intended to 

comply with the conditions of the no-action relief granted by the CFTC’s Division of 

Market Oversight in No-Action Letter 17-54, expiring at 11:59 p.m. (Eastern Time) on 

November 15, 2020. If such no-action relief is extended, upon and to the extent of such 

extension, the provisions of this Rule 8002(g) will continue apply.

Rule 8003 Recordkeeping Requirements for Block Trades

Block Trades submitted to the SEF in accordance with Rule 4016(b) must comply with the 

following recordkeeping requirements:

(a) Block Trades must be submitted in the form of a written or electronic record and must 

include information meeting the requirements of Rule 8001, including, without limiting the 

generality of the foregoing, Legal Entity Identifier information required by Rule 8001(8) 

with respect to parties and, where required, their agents, and a timestamp reflecting the 

date and time that the submission was received by the SEF. 
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(b) The record shall also include a timestamp reflecting the date and time that the Transaction 

was executed or cancelled to the nearest millisecond.

Rule 8004 Access to Position Information

Without limiting any provision of these SEF Rules, the SEF and any Regulatory Services Provider, 

shall have the authority to obtain from any Participant, Sponsored Participant, Account Manager, 

Customer or Client, or Supervised Person information with respect to positions of such Person or 

any Sponsored Participant, Customer or Client, or Supervised Person. This authority shall include 

the authority to obtain information concerning positions maintained at other firms, and it shall be 

the obligation of a Participant receiving such an inquiry to obtain such information from its 

Account Manager, Sponsored Participant, Customer, Client, or any Supervised Person. In the event 

a Participant Sponsored Participant, Customer, Client, or any Supervised Person fails to provide 

the requested information the SEF, in addition to any other remedy provided in these SEF Rules, 

may order that the Participant, Account Managers, Sponsored Participant, Customer, Client, or 

any Supervised Person liquidate the positions that are related to the inquiry.

Rule 8005 Reporting to a Swap Data Repository

(a) The SEF will report each Swap executed on the SEF or pursuant to the SEF Rules as soon 

as technologically practicable after execution to an Approved SDR in compliance with 

Parts 43 and 45 of the CFTC Regulations. For all Swaps executed on the SEF or pursuant 

to the SEF Rules, the SEF will report all swap transaction and pricing data required to be 

reported by Part 43 of the CFTC Regulations and all “primary economic terms data” (as 

defined in CFTC Regulation 45.1) required by Part 45 of the CFTC Regulations. In

addition, for Uncleared Swaps, the SEF will report any “confirmation data” (as defined in 

CFTC Regulation 45.1) that is readily available and collected by the SEF.

(b) All Swaps executed on the SEF or pursuant to the SEF Rules will be reported to DTCC 

Data Repository (U.S.) LLC (“DDR”), except that Swaps in the commodities asset class 

will be reported to the Approved SDR selected by the parties prior to executing the relevant 

Swap. The SDRs that are currently “Approved SDRs” are: (i) DDR; (ii) Chicago 

Mercantile Exchange Inc.; and (iii) ICE Trade Vault.

(c) The Reporting Counterparty for each Swap shall be established pursuant to CFTC 

Regulation 45.8. If the identity of the Reporting Counterparty cannot be established under 

CFTC Regulation 45.8, the ISDA Reporting Counterparty Rules shall be applied as 

provided in Appendix A hereto.

(d) If at any time the Reporting Counterparty for a Transaction that was executed on the SEF

or pursuant to the SEF Rules becomes aware of an error or omission in the swap transaction 

or pricing data that was reported with respect to such Transaction, either through its own 

initiative or through notice by the other party to the Transaction, such party shall promptly 

notify the SEF of the error and/or correction. Upon receiving a notification from the 

Reporting Counterparty or otherwise becoming aware of an error or omission in the swap 

transaction or pricing data reported with respect to a Transaction executed on the SEF or 

pursuant to the SEF Rules, the SEF shall promptly submit corrected data to the same Swap 
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Data Repository to which the Transaction was previously reported. For the avoidance of 

doubt, if a Transaction was incorrectly executed, Rule 5103 shall apply.

(e) No Person shall 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 Applicable 

Law, including the reporting requirements set forth in Part 43 of the CFTC Regulations.

Rule 8006 Timely Publication of Trading Information

The SEF will publish trading information as required by Core Principle 9 of Part 37 and by Part 16 

of the CFTC Regulations.

ACTIVE 218045559
Mr. Christopher J. Kirkpatrick

April 29, 2020

EXHIBIT C

tpSEF Inc. Rulebook

(Marked Version)
tpSEF Inc.

Rulebook

Effective March 1May 14, 2020

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TABLE OF CONTENTS

SECTION 1 DEFINITIONS 1

Rule 1000 Definitions 1

SECTION 2 SEF GOVERNANCE 14

Rule 2000 The SEF 14

Rule 2100 Board 14

Rule 2200 Officers 15

Rule 2201 Chief Compliance Officer 15

Rule 2300 Qualification of Chief Compliance Officer 1617

Rule 2301 Qualifications of Directors, Panel Members, Committee Members and Officers 17

Rule 2400 [Reserved] 18

Rule 2401 Regulatory Oversight Committee 18

Rule 2500 Conflicts of Interest Relating to Self-Regulatory Actions 19

Rule 2501 Voting by Interested Parties 20

Rule 2502 Restrictions on Certain Persons who Possess Confidential Information; Improper Use

or Disclosure of Confidential Information 2322

Rule 2600 Services Agreement with a Regulatory Services Provider 2423

Rule 2601 Services Agreement with Other Service Providers 24

Rule 2602 Prohibited Use of Data Collected for Regulatory Purposes 24

SECTION 3 PARTICIPANT ACCESS RULES 25

Rule 3000 Qualifications 25

Rule 3100 Application Requirements 26

Rule 3101 Review of Application 27

Rule 3102 Acceptance as a SEF Participant 27

Rule 3103 Denial, Conditioning or Termination of Participant Status 27

Rule 3104 Duty to Keep Current 28

Rule 3105 Withdrawal of Participant; Temporary Deactivation of Trading Privileges 28

Rule 3106 Dissolution of Participants 29

Rule 3107 Jurisdiction and Application of SEF Rules 29

Rule 3108 Notices to Participants 30

Rule 3109 Authorized Traders 30

Rule 3110 Sponsored Access 31

Rule 3111 [Reserved] 33

Rule 3112 Introducing Brokers 33

Rule 3113 Authorized Representatives 33

Rule 3114 Communications between the SEF and Participants 33

Rule 3115 Recording of Communications 34

Rule 3200 Change of Control; Non-Assignment 34

Rule 3300 Fees 34

Rule 3301 Volume Discounts 35

Rule 3400 ISVs 35

Rule 3500 Customers and Clients 36

Rule 3501 Disclosure Requirements; Know Your Counterparty Requirements 36

SECTION 4 TRANSACTION EXECUTION 37

Rule 4000.A. Trading Hours 37

Rule 4000.B. Swap Specifications 37

Rule 4001 Procedures 37

Rule 4002 Required Identifications 38

i

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Rule 4003.A. Execution of Transactions 38

Rule 4003.B. Order Book 39

Rule 4003.C. Trade at Settlement Cross Transactions 43

Rule 4004 Permitted Cross Transactions 44

Rule 4005 Mishandling of Customer Orders 44

Rule 4006 Trading Halts 45

Rule 4007 Termination of the SEF Connection 45

Rule 4008 Risk Controls 45

Rule 4009 Priority of Customers’ Orders 45

Rule 4010 Trading Against Customers’ Orders Prohibited; Withholding Orders Prohibited 45

Rule 4011 Time Delay Requirement for Required Cross Transactions 46

Rule 4012 Confirmations and USIs 46

Rule 4013.A. Cleared Swaps 48

Rule 4013.B. Uncleared Swaps 52

Rule 4014 Information Regarding Orders and Dissemination of Trade Data 53

Rule 4015 Enforceability 53

Rule 4016 Block Trades 53

Rule 4017 Pre-Execution Credit Checks 55

Rule 4018 Risk Mitigation Sessions 55

Rule 4100 SEF Rules Do Not Limit Emergency Powers 55

Rule 4101 Position Limits 56

Rule 4102 Exemptions from Position Limits 56

Rule 4103 Position Accountability 56

Rule 4104 Enforcement of Position Limits and Position Accountability Levels 57

Rule 4105 Prime Broker Transactions 58

SECTION 5 CONDUCT OF PARTICIPANTS AND OTHER PERSONS 60

Rule 5000 Duties and Responsibilities of Participants, Sponsored Participants, Customers and

Clients 60

Rule 5001 Required Disclosures to the SEF 60

Rule 5100 Abusive Trading Practices Prohibited 62

Rule 5101 Good Faith Bids and Offers 63

Rule 5102 Invalid Transactions 63

Rule 5103 Trade Cancellation, Correction, Offset and Adjustment 64

Rule 5103.A. SEF Authority Regarding Trade Cancellation, Correction, Offset and Adjustment 64

Rule 5103.B. Transaction Price Review 64

Rule 5103.C. Review of Transactions for Errors 65

Rule 5103.D. Records and Reporting of Cancellations and Price Adjustments 66

Rule 5103.E. Cancellation of Prime Brokerage Transactions 66

Rule 5104 Misuse of the SEF 67

Rule 5200 Rule Violations 67

Rule 5201 Fraudulent Acts Prohibited 68

Rule 5202 [Reserved] 68

Rule 5203 Fictitious or Wash Transactions; Permitted Pre-Execution Communications 68

Rule 5204 Market Disruptions Prohibited 69

Rule 5205 Market Manipulation Prohibited 69

Rule 5206 Disruptive Trading Practices Prohibited 69

Rule 5207 Prohibition of Misstatements 69

Rule 5208 Acts Detrimental to the SEF Prohibited 69

Rule 5209 Adherence to Law 69

Rule 5210 Communications with the Public and Promotional Material 70

ii

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Rule 5300 Duty to Supervise 70

Rule 5400 Inspections by the SEF 70

Rule 5500 Information-Sharing 71

Rule 5600 Minimum Financial and Related Reporting Requirements 71

Rule 5601 Confidentiality of Financial and Other Information 72

Rule 5602 Authority to Impose Restrictions 72

Rule 5603 Additional Disclosure Requirements 72

Rule 5700 Gifts and Gratuities 72

Rule 5701 Anti-Money Laundering and Anti-Terrorism 72

Rule 5702 Market Data 73

Rule 5703 Extension or Waiver of SEF Rules 73

SECTION 6 ENFORCEMENT OF RULES AND DISCIPLINARY PROCEEDINGS 74

Rule 6000 General 74

Rule 6001 Inquiries and Investigations 75

Rule 6002 Reports of Investigations 76

Rule 6003 Opportunity to Respond 77

Rule 6004 Review of Investigation Reports 77

Rule 6005 Notice of Charges 79

Rule 6006 Answer to Notice of Charges 79

Rule 6007 Service of Notice of Charges 80

Rule 6008 Settlement Offers 80

Rule 6009 Disciplinary Panel 82

Rule 6010 Convening Hearings of Disciplinary Proceedings 82

Rule 6011 Respondent Review of Evidence 83

Rule 6012 Conducting Hearings of Disciplinary Proceedings 84

Rule 6013 Decision of Disciplinary Panel 85

Rule 6014 Sanctions 86

Rule 6015 Right to Appeal from Disciplinary Panel Decision, Summary Impositions of Fines and

Other Summary Actions 87

Rule 6016 Summary Imposition of Fines 90

Rule 6017 Warning Letters 91

Rule 6018 Summary Access Denial Actions 91

Rule 6019 Rights and Responsibilities after Suspension, Temporary Deactivation or Termination 91

Rule 6020 Notice to the Respondent, the Regulatory Services Provider and the Public;

Effectiveness of Disciplinary and Access Denial Actions 92

Rule 6021 Costs 93

Rule 6022 Ex Parte Communications 93

Rule 6023 [Reserved] 94

Rule 6024 Extension or Waiver of the SEF Rules 94

Rule 6025 Effect of Amendment, Repeal or New SEF Rule 94

Rule 6026 [Reserved] 94

Rule 6027 Governing Law, Jurisdiction and Dispute Resolution 94

Rule 6028 Limitation of Liability, Indemnity 95

SECTION 7 EMERGENCIES 98

Rule 7000 Emergency Rules 98

SECTION 8 RECORDKEEPING AND REPORTING 100

Rule 8000 Maintenance of Books and Records by the SEF 100

Rule 8001 Order Information 100

Rule 8002 Books and Records 102

Rule 8003 Recordkeeping Requirements for Block Trades 103

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Rule 8004 Access to Position Information 104

Rule 8005 Reporting to a Swap Data Repository 104

Rule 8006 Timely Publication of Trading Information 105

Appendix A ISDA Reporting Counterparty Rules

Appendix B tpSEF Inc. Swap Specifications

Appendix C tpSEF Inc. Risk Mitigation Procedures

Appendix D Appropriate Minimum Block Sizes

iv

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SECTION 1

DEFINITIONS

Rule 1000 Definitions

Unless otherwise specifically provided in the SEF Rules or the context otherwise requires, the

following terms have the meanings specified herein.

“Account Manager” means an investment manager or other Person acting in a similar capacity

that (i) is not an individual, and (ii) acts as an agent and attorney-in-fact to transact Swaps via the

SEF in the name and on behalf of a Client. An Account Manager may be a Participant, a

Sponsored Participant or a Customer.

“Affected Person” has the meaning specified in Rule 3103.

“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.

“Affirm” means the process by which the counterparties to a Cleared Swap verify that they agree

on the details of the transaction after execution on the SEF but prior to submission to the relevant

DCO, which may be done by any means acceptable to the counterparties, including the use of an

Affirmation Hub.

“Affirmation Hub” means a third-party service designated by the SEF to route Cleared Swaps to

DCOs and which may provide Participants or Customers, as applicable, with the opportunity to

Affirm the Cleared Swaps.

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

6015.

“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

(without limitation) these SEF Rules, any DCO Rule, the CEA and CFTC Regulations.

“Appropriate Minimum Block Size” means the minimum notional or principal amount

established from time to time by the CFTC for a category of Swap that qualifies as a block trade

pursuant to CFTC Regulation 43.6. The Appropriate Minimum Block Size is published by the

CFTC or its designee from time to time in accordance with CFTC Regulations 43.6 and 43.7 and

are included in Appendix D hereto.

“Approved SDR” has the meaning specified in Rule 8005(b).

“Authorized Representative” means any natural Person who is employed and authorized by a

Participant to represent the Participant in SEF matters pursuant to Rule 3113.

“Authorized Trader” means a Person who is appointed, employed or authorized by a Participant

(or by a Sponsored Participant) and who has been assigned a User ID by the SEF. Each

Authorized Trader: (i) must be a natural Person; (ii) must have been granted Trading Privileges

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with respect to the trading activities of a Participant (or Sponsored Participant); and (iii) must

satisfy any other requirements as may be prescribed by the SEF from time to time. In the case of

a Prime Broker Client, each Authorized Trader designated by such Prime Broker Client shall be

considered an Authorized Trader of the Prime Broker Client and not of the relevant Prime

Broker.

“Block Trade” means a Swap that: (i) has a notional or principal amount at or above the

Appropriate Minimum Block Size applicable to such Swap; (ii) is executed pursuant to the SEF

Rules and (x) in the case of an Uncleared Block Trade, occurs away from a SEF trading system

or platform or (y) in the case of a Cleared Block Trade, is executed on a non-Order Book trading

system or platform of the SEF in accordance with Rule 4016(j); and (iii) is a publicly reportable

swap transaction that is reported subject to the rulesSEF Rules and procedures of the SEF and

Part 43 of the CFTC Regulations.

“Board” means the board of directors of the SEF.

“Business Day” means a day on which the SEF is open for trading as provided on the SEF

website.

“By-Laws” means the by-laws of the SEF.

“Cancellation Notice” has the meaning specified in Rule 4105(b)(2).

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

“CFTC” means the U.S. Commodity Futures Trading Commission.

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

“Chief Compliance Officer” means the chief compliance officer of the SEF appointed pursuant to

Rule 2201.

“Chief Executive Officer” or “CEO” means the chief executive officer of the SEF appointed by

the Board pursuant to Rule 2200.

“Cleared Block Trade” means a Block Trade in a Cleared Swap.

“Cleared Swap” means (i) a Swap that is subject to the Clearing Requirement, or (ii) any Swap

of a type that is accepted by a DCO for clearing that the parties have elected to submit for

clearing, whether or not the particular Swap is accepted or rejected.

“Clearing Exception” means an exception to, or an exemption from, the Clearing Requirement,

which exception or exemption is set forth in Section 2(h)(7) of the CEA, CFTC Regulations or

any CFTC No-Action Letter.

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“Clearing Exempt Transaction” means a Transaction that is not subject to the Clearing

Requirement due to an election by one or more counterparties to use an available Clearing

Exception.

“Clearing Firm” means a Clearing Member that provides clearing services to one or more

Participants, Sponsored Participants, Clients or Customers and has either executed a Clearing

Firm Agreement or in relation to which the relevant Participant, Sponsored Participant, Client,

Customer and/or Clearing Member has provided the SEF with evidence or assurances

satisfactory to the SEF of the existence and scope of the clearing services provided.

“Clearing Firm Agreement” means an agreement between the SEF and a Clearing Firm that

includes (i) a list of the DCOs of which the Clearing Firm is a member, (ii) a list of the Persons

for whom the Clearing Firm provides clearing services and (iii) if the Clearing Firm does not

clear at all such DCOs for all such Persons, a per-Person list of the DCOs at which it does clear

for such Person. The Clearing Firm shall be entitled to update this information in its sole

discretion by written notice to the SEF and upon receipt of such notice, the SEF shall take such

action necessary to effect the Clearing Firm’s modifications as promptly as practicable. For the

avoidance of doubt, notwithstanding that such notice has not yet been provided or such

modifications made, if the Clearing Firm has ceased to provide clearing services to a Person on

any or all DCOs, the Clearing Firm may reject all such Person’s trades during the pre-execution

credit check described in Rule 4017.

“Clearing Member” means a member of a DCO that is authorized to clear Swaps for itself and/or

for other Persons.

“Clearing Requirement” means the mandatory clearing requirement set forth in Section

2(h)(1)(A) of the CEA.

“Client” means a Person that granted in writing to an Account Manager investment discretion on

behalf and in the name of such Person.

“Confirmation” means a written record of all the terms of a Transaction as required by

Applicable Law.

“Correcting Transaction” has the meaning specified in Rule 4013.A.(f).

“Cross Transaction” a Permitted Cross Transaction or a Required Cross Transaction.

“Customer” means a Person for whom an Introducing Broker, as agent, (i) enters Orders and/or

engages in Transactions on the SEF, and/or (ii) submits Uncleared Block Trades pursuant to the

SEF Rules. A Customer may be a Participant acting through an Introducing Broker as agent in

accordance with the foregoing sentence, including a Participant that is a Prime Broker Client

acting through an Introducing Broker.

“Customer Type Indicator Code” has the meaning specified in Rule 8001(a).

“DCM” means a designated contract market as defined in CFTC Regulation 1.3(h).

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“DCO” means a derivatives clearing organization as defined in Section 1a(15) of the CEA that is

registered with, or has been exempted from registration by, the CFTC and that provides clearing

services with respect to any Swaps traded on, the SEF or pursuant to the rules of, the SEF Rules.

“DCO Rules” means the relevant organizational documents of a DCO and any relevant rule,

interpretation, stated policy or instrument corresponding to any of the foregoing, in each case as

adopted or amended from time to time by the DCO.

“DDR” has the meaning specified in Rule 8005(b).

“Deal Management System” means the SEF’s back-end systems that facilitate post-trade

processing and that can be used to execute Permitted Cross Transactions as described in Rule

4004.

“Director” means any member of the Board.

“Disclosable Financial Interest” means the position information contained in CFTC Regulation

1.69(b)(2)(iii)(A) – (E).

“Disciplinary Action” means any inquiry, investigation, disciplinary proceeding, appeal from a

disciplinary proceeding, summary imposition of fines, summary suspension or other summary

action.

“Disciplinary Offense” means any of the following violations, which, in each case, arises out of a

proceeding or action that is brought by the SEF, a Self-Regulatory Organization, the CFTC or

any federal or state agency or other governmental body:

(1) Any violation of the rules of the SEF Rules or the rules of a Self-Regulatory

Organization, except those violations related to (i) decorum or attire, (ii) financial

requirements or (iii) reporting or recordkeeping unless resulting in fines

aggregating more than $5,000 within any calendar year;

(2) Any violation described in paragraph (1)(i) – (iii) immediately above that

involves fraud, deceit or conversion or results in a suspension or expulsion;

(3) Any violation of the CEA or CFTC Regulations; or

(4) Any failure to exercise supervisory responsibility with respect to acts described in

paragraphs (1) – (3) immediately above when such failure is itself a violation of

the rules of the SEF Rules, the rules of a Self-Regulatory Organization, the CEA

or the CFTC Regulations.

“Disciplinary Panel” means the panel appointed by the Chief Compliance Officer to act in an

adjudicative role and fulfill various adjudicative responsibilities and duties described in

Section 6 of the SEF Rules.

“Displayed Order” has the meaning specified in Rule 4011(a)(2).

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

CFTC Regulations thereunder.

“Emergency” means any occurrence or circumstance that, in the opinion of the Board and/or the

CEO (or, if the CEO is not available, the most senior Officer that is available), requires

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

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

timely collection and payment of funds in connection with clearing and settlement by a DCO,

including, without limitation, the following:

(1) any manipulative or attempted manipulative activity;

(2) any actual, attempted or threatened corner, squeeze, congestion or undue

concentration of positions in a Swap or any related asset;

(3) any circumstance that may materially affect the performance of agreements,

contracts, swaps or transactions, including failure of the payment system or the

bankruptcy or insolvency of any Participant;

(4) any action taken by any governmental body, or any other registered entity, board

of trade, market or facility that may have a direct impact on trading or clearing

and settlement of, or the legality or enforceability of, any Swap;

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

court or arbitrator upon a DCO which may affect the ability of a DCO to perform

on a Swap;

(6) any circumstance that may have a severe, adverse impact upon the functions and

facilities of the SEF, including, but not limited to, acts of God, fire, flood or other

natural disasters, bomb threats, acts of terrorism or war, severely inclement

weather or failure or malfunction of all or a portion of the SEF, or other system

breakdowns or interruptions such as power, computer, communication or

transportation systems or the Internet;

(7) any circumstance in which it appears to the Board and/or the CEO (or, if the CEO

is not available, the most senior Officer that is available) that a DCO or any other

Person:

(i) has failed to perform on a Swap;

(ii) is insolvent; or

(iii) is in a financial or operational condition or is conducting business such

that (A) the DCO cannot be permitted to continue to clear Swaps

transacted on the SEF or pursuant to the rules of the SEF Rules without

jeopardizing the safety of Participants, the SEF or any other Person or (B)

the Person cannot be permitted to continue to transact business on the SEF

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without jeopardizing the safety of Participants, the SEF, any DCO or any

other Person; or

(8) any other circumstance that may have a severe, adverse effect upon the

functioning of the SEF.

“Emergency Action” means any action taken in accordance with Rule 7000 by the SEF, the

Board, any committee of the Board, the CEO or any other Officer in response to an Emergency,

including, without limitation, any of the following actions:

(1) suspending or curtailing trading or limiting trading (in whole or in part);

(2) ordering the fixing of a settlement price, or the reduction of positions;

(3) extending, limiting or changing the Trading Hours;

(4) temporarily modifying or suspending any provision of the SEF Rules or

Obligations;

(5) imposing or modifying price limits;

(6) altering any contract’s settlement terms or conditions;

(7) imposing or modifying position limits; and/or

(8) ordering any other action or undertaking to address or relieve the Emergency.

“Emergency Rules” has the meaning specified in Rule 7000.

“Error” has the meaning specified in Rule 5103.C.

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

“Execution Specialist” means a SEF employee responsible for assisting Participants and

Sponsored Participants (and any of their Supervised Persons) in entering on the SEF Orders and

Transactions and receiving reports of Uncleared Block Trades.

“Family Relationship” means, with respect to any natural person, such natural person’s spouse,

former spouse, parent, stepparent, child, stepchild, sibling, stepbrother, stepsister, grandparent,

grandchild, uncle, aunt, nephew, niece or in-law.

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

“FCM” means futures commission merchant as defined under Section 1a(28) of the CEA and

CFTC Regulation 1.3(p).

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

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

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“Instrument Reference Price” has the meaning specified in Rule 4003.B.(d)(1)(ii).

“Interested Person” has the meaning specified in Rule 2500(a).

“Introducing Broker” is a Participant that (i) is a registered or exempt FCM or introducing

broker (as defined in Section 1a(31) of the CEA and CFTC Regulation 1.3(mm)), and (ii) enters

Orders or engages in Transactions on the SEF, and/or submits Uncleared Block Trades pursuant

to the SEF Rules, on behalf of one or more Customers.

“Investigation Report” means any written report of investigation prepared by the Market

Regulation Department.

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

“ISDA Reporting Counterparty Rules” means the rules identified in Appendix A hereto, as may

be amended from time to time, for establishing a Reporting Counterparty under the

circumstances where CFTC Regulation 45.8 does not determine a Reporting Counterparty (for

example, because both counterparties are Swap Dealers or both counterparties are Major Swap

Participants) as published by ISDA under the title “Dodd Frank Act – Swap Transaction

Reporting Party Requirements” as such rules may be amended, restated, supplemented or

otherwise modified or replaced from time to time.

“ISV” means independent software vendor.

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

“Major Swap Participant” has the meaning set forth in Section 1a(33) of the CEA and CFTC

Regulations thereunder.

“Market Regulation Department” means the department within the SEF managed and overseen

by the Chief Compliance Officer that regulates compliance with the SEF Rules. For purposes of

the SEF Rules, Market Regulation Department may, as applicable, also include any Regulatory

Services Provider pursuant to a Regulatory Services Agreement.

“MAT/Agency MBS Package Transactions” has the meaning set forth in CFTC No-Action Letter

14-137.

“MAT/Futures Package Transactions” has the meaning set forth in CFTC No-Action Letter 17-

55.

“MAT/MAT Cleared Package Transaction” means a Package Transaction, all components of

which are made available to trade and which is not a Clearing Exempt Transaction.

“MAT/New Issuance Bond Package Transactions” has the meaning set forth in CFTC No-Action

Letter 17-55.

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“MAT/Non-CFTC Swap Package Transactions” has the meaning set forth in CFTC No-Action

Letter 17-55.

“MAT/Non-MAT Cleared Package Transactions” has the meaning set forth in CFTC No-Action

Letter 15-55.

“MAT/Non-MAT Uncleared Package Transactions” has the meaning set forth in CFTC NoAction Letter 17-55.

“MAT/Non-Swap Instruments Package Transactions” has the meaning set forth in CFTC NoAction Letter 17-55, and shall, for the avoidance of doubt, exclude (1) U.S. Dollar Swap

Spreads; (2) MAT/Futures Package Transactions; (3) MAT/Agency MBS Package Transactions;

and (4) MAT/New Issuance Bond Package Transactions.

“Material Adverse Change” means a significant event that negatively affects the subject

referenced.

“Material Conflict of Interest” has the meaning specified in Rule 2500(a).

“Member” has the meaning specified in Section 1a(34) of the CEA and CFTC Regulation 1.3(q),

and shall include for purposes of the SEF Rules all Participants (including Sponsoring

Participants) and all Sponsored Participants.

“Membership Interests” means financial institutions that vary as to their jurisdiction of

organization, size, registration and regulatory status, primary business and business model.

“Named Party in Interest” means a Person that is identified by name as a subject of any matter

being considered by the Board, any committee established by the Board (including the

Regulatory Oversight Committee) or any SEF Panel.

“NFA” means the National Futures Association.

“Non-Self-Clearing” means, with respect to a DCO and any particular Swap, a Participant,

Sponsored Participant, Client or Customer that is not a Clearing Member with respect to the

related DCO and Swap.

“Notice of Charges” has the meaning specified in Rule 6005(a).

“Notice to Participants” has the meaning specified in Rule 3108.

“Obligation” means any and all duties and/or responsibilities arising under each SEF Rule, order

or procedure issued by the SEF (including Notices to Participants) and other requirements

implemented by the SEF under the SEF Rules, including the terms and conditions of each Swap,

as well as any contractual obligations between a Participant and the SEF.

“Off-Book Ticket Functionality” means the functionality provided within the OMS that allows

for the execution of Permitted Cross Transactions away from the Order Book. This functionality

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is available to market participants only for Transactions in the Rates asset class and for

Transactions that are non-deliverable forwards.

“Officer” has the meaning specified in Rule 2200.

“Offsetting Transaction” has the meaning specified in Rule 4013.A.(f).

“Order” means a firm bid or offer for a Swap.

“Order Book” means the trading systems operated by the SEF in which any Participant or any

market participant acting through a Participant has the ability to enter multiple bids and offers,

observe or receive bids and offers entered by other Participants, and transact on such bids and

offers. All bids and offers on the Order Book shall be Orders (i.e., firm bids or offers and not

indications of interest or indicative quotes), and all Orders shall be displayed on the Order Book

on an anonymous basis. Any market participant who wishes to connect to and use the Order

Book may choose to do so, as more fully described in Rule 4003.B. The Order Book is available

for all Swaps listed for trading by the SEF.

“Order Book Waiver” has the meaning specified in Rule 4003.B.(f)(2).

“Order Management System” or “OMS” means the SEF’s front-end system that houses the Order

Book, as well as the SEF’s Off-Book Ticket Functionality. Market participants may connect to

the OMS via a graphical user interface (GUI) or an application program interface (API), which

allows third-party trading systems to interact with the OMS.

“Package Transaction” means a transaction involving two or more instruments: (1) that is

executed between two or more counterparties; (2) that is priced or quoted as one economic

transaction with simultaneous or near simultaneous execution of all components; (3) that has at

least one component that is a Swap that is a Required Transaction; and (4) where the execution

of each component is contingent upon the execution of all other components. No Swap is

prohibited from being executed on the SEF by virtue of its being part of a Package Transaction.

The categories of Package Transactions currently executed on the SEF are: (i) MAT/MAT

Cleared Package Transactions; (ii) MAT/Non-MAT Cleared Package Transactions; and (iii)

MAT/Non-MAT Uncleared Package Transactions. The categories of Package Transactions

currently facilitated by the SEF are: (i) MAT/Non-Swap Instruments Package Transactions

(MAT/Bonds only); (ii) US Dollar Swap Spreads; and (iii) MAT/Futures Package Transactions

(MAT/Eurodollar Futures only). Such facilitation is done by the SEF’s providing an execution

venue for the Swap legs and reference price information regarding the non-Swap legs. The

reference price is made available to Participants for informational purpose only. The SEF does

not execute the non-Swap legs of Package Transactions; the counterparties to any Package

Transaction involving a non-Swap component must execute such non-Swap component away

from the SEF.

“Package Transaction (Order Book Exempt)” is a Package Transaction for which the CFTC has

granted currently-effective no-action relief or an exception or exemption from the requirements

of Section 2(h)(8) of the CEA and/or CFTC Regulation 37.9. Pursuant to CFTC No-Action

Letter 17-55, the following are Package Transactions (Order Book Exempt) until 11:59 p.m.

(Eastern Time) on November 15, 2020: (a) MAT/New Issuance Bond Package Transactions; (b)

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MAT/Futures Package Transactions; (c) MAT/Non-MAT Uncleared Package Transactions; (d)

MAT/Non-Swap Instruments Package Transactions; and (e) MAT/Non-CFTC Swap Package

Transactions. If any such no-action relief is extended, upon and to the extent of such extension,

the relevant Package Transaction will continue to be a Package Transaction (Order Book

Exempt) for purposes of the SEF Rules.

“Participant” means any Person, other than an ISV, that has been admitted by the SEF as a

“Participant” and that has been granted, and continues to have, Trading Privileges.

“Participation Criteria” means the criteria set forth in Rule 3000(a).

“Permitted Cross Transaction” means a Permitted Transaction submitted to the SEF for

execution either directly or via an Execution Specialist following some form of permitted prearrangement or pre-negotiation between or among the parties.

“Permitted Transaction” shall have the meaning provided in CFTC Regulation 37.9(c)(1).

“Person” means a natural person or an entity.

“Personal Information” means personally identifiable information or data concerning or relating

to a Person’s employees, customers or prospective customers.

“Prime Broker” means a Participant that has authorized a Prime Broker Client to place Prime

Brokerage Orders and execute Prime Broker Transactions on the SEF in the name of and on

behalf of such Participant and that has been accepted by the SEF to act in such capacity.

“Prime Broker Acknowledgement Letter” shall have the meaning set forth in Rule 4105(b)(1).

 “Prime Broker Client” means a Participant that has been identified by a Prime Broker in a Prime

Broker Acknowledgment Letter to place Prime Brokerage Orders on the SEF and to execute

Prime Broker Transactions in the name of and on behalf of such Prime Broker.

“Prime Broker Limit” means any limit, term or trading parameter established by a Prime Broker

in respect of a Prime Broker Client, including credit limits and any categories of permissible

Uncleared Swaps.

 “Prime Broker Transaction” means a Permitted Cross Transaction in an Uncleared Swap

executed on the SEF pursuant to Rule 4105 where one counterparty is a Prime Broker and the

other is a Person (which may also be a Prime Broker) with which the Prime Broker has swap

trading relationship documentation in place in accordance with the requirements of Rule 4013.B.

“Prime Brokerage Order” means an Order for a Prime Broker Transaction.

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

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

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“Public Director” means any Director who qualifies as a “Public Director” within the meaning

of the By-Laws.

“Regulatory Oversight Committee” or “ROC” means the committee described in Rule 2401.

“Regulatory Services Agreement” means the agreement(s) between the SEF and Regulatory

Services Provider(s), under which market surveillance and trade practice surveillance functions

are delegated to the Regulatory Services Provider.

“Regulatory Services Provider” means the organization, if any, which provides regulatory

services to the SEF pursuant to a Regulatory Services Agreement. The SEF’s Regulatory

Services Provider is currently the NFA.

“Related Party” has the meaning given in Rule 6028.

“Reporting Counterparty” has the meaning set forth in Part 45 of the CFTC Regulations.

“Required Cross Transaction” means a Required Transaction (other than a Block Trade or

Package Transaction (Order Book Exempt)) (x) in which a Participant acting as a broker or

dealer seeks to either execute against its customer’sCustomer’s Order or execute two of its

customers’ Orders against each other, and (y) that is submitted for execution on the Order Book,

either directly or via an Execution Specialist, following some form of permitted pre-arrangement

or pre-negotiation.

“Required Transaction” shall have the meaning provided in CFTC Regulation 37.9(a)(1), as may

be amended from time to time.

“Resting Quote” means any firm bid or offer displayed on the Order Book of the SEF.

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

finding a violation of the SEF Rules or other provision of Applicable Law for which the SEF has

disciplinary jurisdiction, and for authorizing the issuance of notices of charges against Persons

alleged to have committed violations if the Review Panel believes that the matter should be

adjudicated.

“Risk Mitigation Sessions” has the meaning specified in Rule 4018.

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

“SEF” means the swap execution facility operated by tpSEF Inc. or any successor thereto.

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

the Regulatory Services Provider or any individual rendering similar services to the SEF under

an administrative or similar agreement.

“SEF Panel” means any Review Panel, Disciplinary Panel, Appeals Panel or any other

disciplinary or oversight panel of the SEF and any subcommittee thereof.

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“SEF Proceeding” and “SEF Proceedings” means any inquiry, investigation, disciplinary

proceeding or any appeal from a disciplinary proceeding, summary suspension or other summary

actions.

“SEF Rules” means the rules of the SEF as set forth herein, as may be amended from time to

time by the SEF.

“Self-Clearing” means, as to any DCO and Swap, a Participant, Sponsored Participant, Client or

Customer that is a Clearing Member of the relevant DCO with respect to such Swap.

“Self-Regulatory Action” means an Emergency Action or a SEF Proceeding.

“Self-Regulatory Organization” means the Financial Industry Regulatory Authority, the NFA or

any other self-regulatory organization under the CFTC Regulations or the rules and regulations

of the SEC.

“Significant Action” has the meaning specified in CFTC Regulation 1.69(a)(8).

“Sponsored Participant” means a third-party ECP that is extended Trading Privileges by a

Sponsoring Participant pursuant to Rule 3110.

“Sponsoring Participant” means a Participant that extends Trading Privileges to a Sponsored

Participant pursuant to Rule 3110.

“Supervised Persons” means Authorized Traders, directors, officers, employees or agents of any

Participant or Sponsored Participant.

 “Swap” means any “swap” as defined in CEA Section 1a(47) that has been listed for trading on

the SEF.

“Swap Data Repository” or “SDR” has the meaning set forth in Section 1a(48) of the CEA.

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

“Swap Specification” means, with respect to any Swap, the specifications for such Swap as set

forth in Appendix B hereto, including any materials incorporated by reference therein.

“TAS Cross Transaction” has the meaning given in Rule 4003.C.(a).

“Terms Incorporated by Reference” has the meaning given in Rule 4012.

“tpSEF Risk Mitigation Procedures” means the SEF’s procedures for Risk Mitigation Sessions,

which are attached hereto as Appendix C.

“Trade Communication” has the meaning given in Rule 4012.

“Trading Hours” means, for any Business Day, the hours specified in Rule 4000.A. below.

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“Trading Privileges” means the right granted to a Participant by the SEF, or extended to a

Sponsored Participant by a Sponsoring Participant, to use the SEF for execution of Swaps, in

each case acting through one or more Authorized Traders.

“Transaction” means any Swap transacted on the SEF in accordance with the SEF Rules or, in

the case of an Uncleared Block Trade, transacted away from a SEF trading system or platform in

accordance with the SEF Rules.

“Uncleared Block Trade” means a Block Trade other than a Cleared Block Trade.

“Uncleared Swap” means a Swap other than a Cleared Swap.

“User ID” means a unique identifier issued to each Authorized Trader of a Participant that

enables the SEF to identify the individual.

“U.S. Dollar Swap Spreads” has the meaning set forth in CFTC No-Action Letter 15-55.

“USI” means a unique swap identifier created by the SEF pursuant to Part 45 of the CFTC

Regulations.

“Waiting Order” has the meaning specified in Rule 4011(a)(2).

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SECTION 2

SEF GOVERNANCE

Rule 2000 The SEF

The SEF is a corporation organized under the laws of the state of Delaware. The By-Laws of the

SEF govern the management and operation of the SEF.

BOARD

Rule 2100 Board

(a) The Officers shall manage the day-to-day business operations of the SEF. The Board has

the power and authority to oversee, and to affirm, modify, suspend or overrule, any and

all decisions and actions of any committees of the Board or any panel of Officers related

to the day-to-day business operations of the SEF.

(b) The Board will determine which Swaps are available from time to time for trading

subject to the SEF Rules, and will approve specifications for such Swaps; provided that

the Board may delegate the authority to approve such rules to a SEF committee or to one

or more Officers of the SEF; provided, further, that certifications or applications with

respect to such rules will be submitted to the CFTC as required by the CEA and any

regulations thereunder.

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

Directors by vote at a meeting, by unanimous written consent without a meeting, or as

otherwise set forth in the By-Laws. In the event of an Emergency, which in the judgment

of the CEO (or, if the CEO is not available, the most senior Officer that is available)

requires immediate action, a special meeting of the Board may be convened without

notice, consisting of those Directors who are immediately available in person or by

telephone and can be joined in the meeting in person or by conference telephone. The

actions taken at such a meeting shall be effective if at least a quorum of the Directors

participates either personally or by conference telephone.

(d) At all times, at least 35% of the Directors shall be Public Directors. Each Director

(including Public Directors) shall be appointed in accordance with the By-Laws and shall

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

removal, with or without cause. The Directors shall include members who have had

relevant experience in some capacity (whether as a current or former employee, officer,

director, principal, consultant, advisor, service provider or otherwise) working with or for

a diversity of Membership Interests.

(e) Each Director is entitled to indemnification pursuant to the By-Laws with respect to

matters relating to the SEF.

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(f) To qualify as a Director, an individual must meet the qualifications for directors set forth

in the By-Laws, and to qualify as a Public Director, an individual must meet the

qualifications for “Public Directors” set forth in the By-Laws.

(g) Without limitation of any other provisions of this Rule 2100, the provisions of Article III

of the By-Laws shall be deemed to be part of the SEF Rules and shall be deemed to be

incorporated herein, to the same extent and with the same force and effect as if set forth

herein in their entirety.

OFFICERS

Rule 2200 Officers

(a) The Board shall appoint a Chief Executive Officer and such other officers of the SEF

(each of the foregoing, an “Officer,” and collectively, the “Officers”) as it may deem

necessary or appropriate from time to time, in accordance with and as required by the ByLaws.

(b) Any Officer may also be a director, officer, partner or employee of the SEF or any of its

Affiliates.

(c) The Officers shall have such powers and duties in the management of the SEF as the

Board may prescribe from time to time.

(d) Each Officer is entitled to indemnification pursuant to the By-Laws with respect to

matters relating to the SEF.

Rule 2201 Chief Compliance Officer

(a) Either the Board or the Chief Executive Officer shall appoint a Chief Compliance

Officer. The Board shall approve the compensation of the individual appointed as Chief

Compliance Officer. Removal of the Chief Compliance Officer shall require the approval

of a majority of the Board. The SEF shall notify the CFTC of the removal of the Chief

Compliance Officer and the appointment of any new Chief Compliance Officer, whether

interim or permanent, within two (2) Business Days of such removal and appointment.

(b) The Chief Compliance Officer’s duties shall include, but are not limited to, the following:

(1) overseeing and reviewing the SEF’s compliance with Applicable Law, including,

without limitation, Section 5h of the CEA and related CFTC Regulations;

(2) enforcing the SEF Rules;

(3) (2) in consultation with the CEO and such others, including, without limitation,

the Board and/or the Regulatory Oversight Committee, as deemed appropriate and

necessary, resolving any conflicts of interest that may arise, including: (i)

conflicts between business considerations and compliance requirements; (ii)

conflicts between business considerations and the requirement that the SEF

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provide fair, open and impartial access as set forth in the CFTC Regulations; and

(iii) conflicts between the SEF’s management and members of the Board;

(4) (3) establishing and administering requisite written policies and procedures

reasonably designed to prevent violations of the CEA and CFTC Regulations;

(5) (4) taking reasonable steps to ensure compliance with the CEA and CFTC

Regulations;

(6) (5) establishing procedures for the remediation of noncompliance issues identified

by the Chief Compliance Officer through compliance office reviews, look-backs,

internal or external audit findings, self-reported errors or validated complaints;

(7) (6) establishing and following appropriate procedures for the handling,

management response, remediation, retesting and closing of noncompliance

issues;

(8) (7) establishing and administering a compliance manual designed to promote

compliance with Applicable Law and a written code of ethics designed to prevent

ethical violations and to promote honesty and ethical conduct;

(9) (8) 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 proceedings, audits,

examinations and other regulatory responsibilities with respect to Participants,

Customers, Clients, Authorized Traders and other market participants (including

seeking to ensure compliance with, if applicable, financial integrity, financial

reporting, sales practice, recordkeeping and other requirements);

(10) (9) supervising the effectiveness and sufficiency of any regulatory services

provided to the SEF by a Regulatory Services Provider; and

(11) (10) preparing and filing the annual compliance report as required under the CEA

and applicable CFTC Regulations.

(c) The Chief Compliance Officer shall have available to him or her at all times the authority

and the resources of the Market Regulation Department and such other resources as may

be necessary to develop and enforce policies and procedures necessary to fulfill the

duties set forth for chief compliance officers of swap execution facilities in the CEA and

the CFTC Regulations. The Chief Compliance Officer shall have supervisory authority

over all staff of the Market Regulation Department and all other compliance staff.

(d) The Chief Compliance Officer shall report directly to the Board. The Chief Compliance

Officer shall have the authority to inspect the books and records of all Participants and

the authority to require any Participant to appear before him or her and produce its books

and records and answer questions regarding alleged violations of the SEF Rules or other

provision of Applicable Law for which the SEF has disciplinary jurisdiction, at the time,

place and in the manner it designates. The Chief Compliance Officer may also delegate

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such authority to staff of the Market Regulation Department and/or the Regulatory

Services Provider.

QUALIFICATIONS

Rule 2300 Qualification of Chief Compliance Officer

(a) The Chief Compliance Officer shall have the background and skills appropriate for

fulfilling the responsibilities of the position.

(b) The Chief Compliance Officer may not be disqualified from registration pursuant to

Section 8a(2) or (3) of the CEA.

Rule 2301 Qualifications of Directors, Panel Members, Committee Members and

Officers

(a) A Director or Officer must meet the qualifications set forth from time to time in the ByLaws.

(b) An individual may not serve as a Director or an Officer, hold a 10% or more ownership

interest in the SEF or serve on a committee established by the Board (including the

Regulatory Oversight Committee) or any SEF Panel if the individual:

(1) within the prior three (3) years has been found by a final decision of the SEF, a

Self-Regulatory Organization, an administrative law judge, a court of competent

jurisdiction or a Government Agency to have committed a Disciplinary Offense;

(2) 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;

(3) is currently suspended from trading on a DCM, is suspended or expelled from

membership in a Self-Regulatory Organization, is serving any sentence or

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

(i) a finding of a Disciplinary Offense by a final decision of the SEF, a SelfRegulatory Organization, an administrative law judge, a court of

competent jurisdiction or a Government Agency; or

(ii) 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;

(4) is currently subject to an agreement with a Government Agency, the SEF or a

Self-Regulatory Organization not to apply for registration with the Government

Agency or for membership in the SEF or the Self-Regulatory Organization;

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

suspension of registration by the CFTC for any reason;

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

CEA; or

(7) is currently subject to a denial, suspension or disqualification from serving on a

disciplinary committee, arbitration panel or governing board of any selfregulatory organization as that term is defined in Section 3(a)(26) of the

Exchange Act.

(c) Any Director, Officer, member of a committee established by the Board, any SEF Panel

member, 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 Chief Executive Officer or the Chief Compliance Officer if such individual meets one

or more of the criteria in Rule 2301(b).

(d) For purposes of Rule 2301(b), the terms “final decision” and “settlement agreement”

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

BOARD COMMITTEES

Rule 2400 [Reserved]

Rule 2401 Regulatory Oversight Committee

(a) The Regulatory Oversight Committee of the Board shall be composed entirely of Public

Directors appointed by the Board.

(b) Each member of the Regulatory Oversight Committee shall serve for a term of two (2)

calendar years from the date of his or her appointment or until such Person ceases to be

Public Director or until removed from the ROC by the Board. A member of the

Regulatory Oversight Committee may serve for multiple terms.

(c) The Regulatory Oversight Committee shall oversee the SEF’s regulatory program 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. It shall make such recommendations to the Board that, in its judgment, will best

promote the interests of the SEF. The Regulatory Oversight Committee shall also have

such other powers and perform such other duties as set forth in the SEF Rules and as the

Board may delegate to it from time to time.

(d) Without limiting the generality of the foregoing, the Regulatory Oversight Committee

shall have authority to:

(1) monitor the regulatory program of the SEF for sufficiency, effectiveness, and

independence; and

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(2) oversee all facets of the regulatory program, including:.

(i) trade practice and market surveillance; audits, examinations, and other

regulatory responsibilities with respect to Participants (including

compliance with, if applicable, financial integrity, financial reporting,

sales practice, recordkeeping, and other requirements); and the conduct of

investigations;

(ii) reviewing the size and allocation of the regulatory budget and resources, and

the number, hiring, termination and compensation of regulatory personnel;

(iii) reviewing the performance of the Chief Compliance Officer of the SEF and

making recommendations regarding such performance to the CEO;

(iv) recommending changes that would ensure fair, vigorous, and effective

regulation; and

(v) reviewing all regulatory proposals prior to implementation and advising the

Board as to whether and how such changes may impact regulation.

(e) The Regulatory Oversight Committee reports to the Board.

CONFLICTS OF INTEREST AND CONFIDENTIAL INFORMATION

Rule 2500 Conflicts of Interest Relating to Self-Regulatory Actions

(a) A Director, Officer, SEF Panel member or other Person authorized to exercise the SEF’s

authority concerning a Self-Regulatory Action who has a Material Conflict of Interest

between (i) his or her exercise of authority concerning a Self-Regulatory Action, and (ii)

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

deliberations or vote of the Board (which includes for purposes hereof a Board

committee) or SEF Panel, or (y) exercise any authority, with respect to the SelfRegulatory Action involving his or her personal interest, except as described below.

For purposes of this Rule 2500, a Director, Officer, SEF Panel member or other Person

has a “Material Conflict of Interest” when such Director, Officer, SEF Panel member or

other Person:

(1) is named as a respondent or potential respondent or a witness or potential witness

in a Self-Regulatory Action;

(2) is an employer, employee, fellow employee or an Affiliate of a respondent or

potential respondent or a witness or potential witness in the Self-Regulatory

Action;

(3) has any significant, ongoing business relationship with a respondent or potential

respondent or a witness or potential witness in the Self-Regulatory Action;

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(4) has a Family Relationship with a respondent or potential respondent or a witness

or potential witness in a Self-Regulatory Action (including the individual’s

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

stepbrother, stepsister, grandparent, grandchild, uncle, aunt, nephew, niece,

father-in-law, mother-in-law, brother-in-law or sister-in-law); and/or

(5) is involved in any other circumstance that gives rise to a conflict between the

Director’s, Officer’s, panel member’s or other Person’s exercise of authority

concerning a Self-Regulatory Action and his or her personal interests.

(b) Before considering any Self-Regulatory Action, an Interested Person, or a Director,

Officer, SEF Panel member or other Person authorized to exercise the SEF’s authority

concerning a Self-Regulatory Action that believes he or she is or may be an Interested

Person, must disclose in writing to the Board the material facts concerning his or her

relationship or interest in the matter. Following such disclosure, the Board shall

determine whether any Person that believes he or she is or may be an Interested Person

actually is an Interested Person. Notwithstanding any contrary determination by the

Board, any Person that believes he or she is or may be an Interested Person may recuse

himself or herself from deliberations and voting or the exercise of authority pursuant to

Rule 2500(a) above upon his or her election.

(c) Any Interested Person who would be required otherwise to abstain from deliberations and

voting or the exercise of authority pursuant to Rule 2500(a) above as a result of having

Material Conflict of Interest may participate in deliberations, prior to a vote on the

matter, if:

(1) the material facts about the Interested Person’s interest in the matter are disclosed

or known to the Board or SEF Panel;

(2) the Board determines that the participation by the Interested Person would be

consistent with the public interest; and

(3) a majority of the Directors (excluding any Interested Persons) vote to allow the

Interested Person to participate in deliberations on the matter.

(d) If a determination is made pursuant to Rule 2500(c) 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.

(e) If a determination is made that all Directors are Interested Persons with respect to a

matter subject to a vote by the Board, the Chief Executive Officer (unless the Chief

Executive Officer is an Interested Person, in which case the most senior Officer who is

not an Interested Person) will appoint a panel of individuals who are not Interested

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.

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Rule 2501 Voting by Interested Parties

(a) Relationship with Named Party in Interest.

(1) A member of the Board, any committee established by the Board (including the

ROC) or any SEF Panel must abstain from such body’s deliberations and voting

on any matter involving a Named Party in Interest where such member:

(i) is a Named Party in Interest;

(ii) is an employer, employee or fellow employee of a Named Party in

Interest;

(iii) is associated with a Named Party in Interest through a “broker

association” as defined in CFTC Regulation 156.1;

(iv) has any other significant, ongoing business relationship with a Named

Party in Interest, not including relationships limited to executing futures or

option transactions opposite of each other or to clearing futures or option

transactions through the same clearing member; or

(v) has a Family Relationship with a Named Party in Interest.

(2) Prior to the consideration of any matter involving a Named Party in Interest, each

member of the Board, any committee established by the Board (including the

ROC) or any SEF Panel must disclose to the Chief Compliance Officer whether

he or she is a Named Party in Interest or has one of the relationships listed in Rule

2501(a)(1)(ii)-(v) above with a Named Party in Interest.

(3) The following procedure will apply with respect to any matter involving a Named

Party in Interest under this Rule 2501:

(i) In its sole discretion, the Chief Compliance Officer, in consultation with

the ROC (excluding any potentially interested members of the ROC), shall

determine whether any member of the Board, any committee established

by the Board (including the ROC) or a SEF Panel is required to abstain

from deliberations and voting on the matter.

(ii) The determination of the Chief Compliance Officer will take into

consideration the exigency of the matter and shall be based upon: (x)

information provided by the member pursuant to Rule 2501(a)(2), and (y)

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

the SEF.

(4) Notwithstanding any contrary determination made in accordance with Rule

2501(a)(3), any Person that believes he or she is or may be a Named Party in

Interest or has or may have one of the relationships listed in Rule 2501(a)(1)(ii)-

(v) above with a Named Party in Interest may recuse himself or herself from

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deliberations and voting on the relevant matter involving a Named Party in

Interest.

(b) Financial Interest in Significant Action.

(1) A member of the Board, any committee established by the Board (including the

ROC) or any SEF Panel must abstain from such body’s deliberations and voting

on any Significant Action if the member knowingly has a direct and substantial

financial interest in the result of the vote based upon either exchange or nonexchange positions that could reasonably be expected to be affected by the action.

(2) Prior to the consideration of any Significant Action, each member of the Board,

any committee established by the Board (including the ROC) or any SEF Panel

must disclose to Chief Compliance Officer any Disclosable Financial Interest that

is known to such member. This requirement does not apply to members who

choose to abstain from deliberations and voting on the subject Significant Action.

(3) The Chief Compliance Officer will independently require a member of the Board,

any committee established by the Board (including the ROC) or any SEF Panel to

abstain from both the deliberations and voting by the Board, committee or SEF

Panel on any Significant Action if the Chief Compliance Officer, in consultation

with the ROC (excluding any potentially interested members of the ROC),

determines that the member has a direct and substantial financial interest in the

result of the vote. The determination of the Chief Compliance Officer must

include a review of the member’s Disclosable Financial Interest, take into

consideration the exigency of the Significant Action and should be based upon:

(x) the most recent large trader reports and clearing records available to the SEF;

(y) information provided by the member with respect to any Disclosable Financial

Interest pursuant to Rule 2501(b)(2); and (z) any other source of information that

is held by and reasonably available to the SEF.

(4) The Board, any committee established by the Board (including the ROC) or any

SEF Panel may permit a member to participate in deliberations prior to a vote on

a Significant Action for which deliberations such member otherwise would be

required to abstain, pursuant to this Rule 2501(b), if such participation would be

consistent with the public interest and the member recuses himself or herself from

voting on such action.

(5) In making a determination as to whether to permit a member to participate in

deliberations on a Significant Action for which such member otherwise would be

required to abstain, the deliberating body shall consider the following factors:

(i) Whether the member’s participation in deliberations is necessary for the

deliberating body to achieve a quorum in the matter, and

(ii) Whether the member has unique or special expertise, knowledge or

experience in the matter under consideration.

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Prior to making any such determination, the relevant deliberating body must fully

consider the position information that is the basis for the member’s direct and

substantial financial interest in the result of a vote on a Significant Action.

(6) The Board, Board committees and SEF Panels must reflect in their minutes or

otherwise document that the conflicts determination procedures required by this

Rule 2501 have been followed. Such records also must include:

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

otherwise were present by electronic means;

(ii) The name of any member who voluntarily recused himself or herself or

was required to abstain from deliberations and/or voting on a matter and

the reason for the recusal or abstention, if stated; and

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

member.

Rule 2502 Restrictions on Certain Persons who Possess Confidential Information;

Improper Use or Disclosure of Confidential Information

(a) No Director, Officer, member of any committee or panel established by the Board or any

employee or consultant of the SEF shall use or disclose, either during his or her

association with the SEF or thereafter, for any purpose other than the performance of his

or her official duties and responsibilities as a Director, Officer, committee or panel

member or employee or consultant any confidential information (including any material,

non-public information) obtained as a result of the individual’s duties and responsibilities

as a Director, Officer, committee or panel member or employee or consultant. Any

Director, Officer, committee or panel member or employee or consultant 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.

(b) Notwithstanding Rule 2500(a), a Director, Officer, member of any committee or panel

established by the Board or employee or consultant of the SEF may disclose confidential

information (i) in the course of his or her official duties; (ii) to any Self-Regulatory

Organization, DCO, court of competent jurisdiction or representative of any agency or

department of the federal or state government acting in his or her official capacity; (iii) if

such information is or becomes a matter of public knowledge through no fault of the

Director, Officer, member of any committee or panel established by the Board or

employee or consultant; or (iv) as required pursuant to Applicable Law.

(c) No Director, Officer, or member of any committee or panel established by the Board, no

employee of the SEF and no consultant to the SEF shall:

(1) 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;

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(2) use or disclose, for any purpose other than the performance of such Person’s

official duties, any confidential information obtained by such Person as a result of

such Person’s official duties; provided, however, that this Rule shall not prohibit

any disclosures that are expressly permitted pursuant to Rule 2502(b); or

(3) trade, directly or indirectly, in (i) any Swap traded on the SEF, (ii) any related

commodity interest (as defined in CFTC Regulation 1.59(a)), or (iii) any

commodity interest traded on any DCM or SEF or cleared by any DCO if such

Person has access to material non-public information concerning such commodity

interest.

SERVICE AGREEMENTS

Rule 2600 Services Agreement with a Regulatory Services Provider

(a) The SEF may enter into a Regulatory Services Agreement with a Regulatory Services

Provider to perform certain surveillance, investigative, and regulatory functions under the

SEF Rules and the SEF may provide information to the Regulatory Services Provider in

connection with the performance of those functions.

(b) The SEF shall retain ultimate decision-making authority with respect to any functions

that are contracted to a Regulatory Services Provider and shall remain responsible for the

performance of any Regulatory Services received.

Rule 2601 Services Agreement with Other Service Providers

The SEF, in its discretion, may enter into services agreements with service providers of its

choosing to perform functions under the SEF Rules, and may provide information to such service

providers in connection with the performance of those functions.

Rule 2602 Prohibited Use of Data Collected for Regulatory Purposes

The SEF will not use for business or marketing purposes any Proprietary Data or Personal

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

its regulatory obligations; provided, however, the SEF may use such data or information for

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

or information clearly consents to the SEF’s use of such data or information by means of an

independent, affirmativein such manner by providing a separate signed consent prior to such use.

The SEF will not condition access to its market(s) or market services on a Person’s consent to

the SEF’s use of Proprietary Data or Personal Information for business or marketing purposes.

The SEF, where necessary for regulatory purposes and as permitted by Applicable Law, may

share such data or information with one or more DCOs, swap execution facilities or DCMs

registered with the CFTC. In such an event, the SEF will request the DCO, swap execution

facility or DCM to maintain the confidentiality of any such information in the same manner as

the DCO, swap execution facility or DCM would protect its own proprietary data.

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SECTION 3

PARTICIPANT ACCESS RULES

QUALIFICATIONS

Rule 3000 Qualifications

(a) To be eligible for admission as a Participant, an applicant must satisfy the following

criteria (the “Participation Criteria”):

(1) is an ECP;

(2) is of good reputation and business integrity;

(3) maintains adequate financial resources and credit, has adequate capacity to meet

its financial obligations and has not filed for bankruptcy;

(4) if it is an entity, is validly organized, in good standing and authorized by its

governing body and, if relevant, documents of organization, to act as a Participant

and comply with its obligations under the SEF Rules and doing so will not violate

any material agreement by which it is bound or require any consents not already

obtained;

(5) is not prohibited from using the services of the SEF for any reason whatsoever;

(6) holds all registrations required under Applicable Law, including, without

limitation, any introducing broker, futures commission merchant, and/or swap

dealer registration (each as defined in the CEA and CFTC Regulations), and if

required pursuant to Applicable Law, is a member of the NFA;

(7) is not subject to statutory disqualification under Section 8a(2) of the CEA; and

(8) satisfies any other criteria that the SEF may require from a Participant to enable

the SEF to perform its responsibilities as a Self-Regulatory Organization, comply

with Applicable Law or provide services, provided such criteria are impartial,

transparent and applied in a fair and nondiscriminatory manner.

(b) Each Participant intending to trade Cleared Swaps for its own account must either be (i)

Self-Clearing with respect to the DCO where the Cleared Swaps it will trade are cleared,

or (ii) if it is Non-Self-Clearing, have a clearing account with a Clearing Firm and be

permitted by the related Clearing Firm to clear such Swaps at such DCO through such

Clearing Firm.

(c) Each Participant that is an Account Manager, Introducing Broker or Sponsoring

Participant must ensure that each of its Clients, Customers or Sponsored Participants (as

applicable) intending to trade Cleared Swaps meets the requirements of Rule 3000(b)

above.

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(d) Participants are prohibited from entering Orders or Transactions in Cleared Swaps on the

SEF on behalf of any party (whether the Participant itself or its Client, Customer or

Sponsored Participant) that is Non-Self-Clearing unless such party has a relationship with

a Clearing Firm as described in Rule 3000(b)(ii) that covers the relevant Order or

Transaction.

(e) The SEF shall monitorreview any financial filings and notices made by its Participants to

ensure that pursuant to the SEF Rules to determine whether they continue to qualify as

ECPs. If any Client or Customer of an Account Manager or Introducing Broker is not

also a Participant, the SEF shall obtain from the applicable Account Manager or

Introducing Broker a representation that such Client or Customer is an ECP, which will

be deemed repeated each time the applicable Account Manager or Introducing Broker

transacts on the SEF on behalf of such Client or Customer.

(f) Upon request of the SEF or its Regulatory Services Provider, each Participant (and each

Authorized Trader) shall promptly provide to the Market Regulation Department or the

Regulatory Services Provider (i) the names of its Customers, Client or Sponsored

Participants (if applicable) and (ii) such information about Authorized Traders as the SEF

requests.

(g) The SEF may from time to time establish different categories of Participants receiving

access to the SEF. Participants receiving comparable access to, or services from, the SEF

will be subject to comparable fee structures.

(h) Consistent with Applicable Law, the SEF will provide access to its trading platform and

services on a fair and nondiscriminatory basis to any ECP that complies with the SEF’s

documentation and eligibility requirements as set forth in the SEF Rules.

PARTICIPANT APPLICATION AND ONGOING PARTICIPANT MATTERS

Rule 3100 Application Requirements

A Person that wishes to become a Participant of the SEF must:

(a) Submit to the SEF an accurate and complete application and execute and deliver any

applicable agreements and other documents as may be required by the SEF from time to

time;

(b) if it is an entity, provide a copy of all formation documents including any amendments

thereto if requested by the SEF;

(c) if it is an applicant organized or located outside of the United States, enter into a written

agreement acceptable to the SEF appointing a third party as its U.S. agent for service of

process for purposes of CFTC Regulation 15.05, and shall provide the SEF with a copy

of the agreement;

(d) provide such other information as may be requested by the SEF; and

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(e) provide (i) written or electronic confirmation of its status as an ECP, and (ii) with respect

to any Client, Customer or Sponsored Participant that is not also a Participant and on

whose behalf it wishes to trade on the SEF, a representation that such Client, Customer or

Sponsored Participant is an ECP, which representation will be deemed repeated each

time the Participant transacts on the SEF, whether for its own account or on behalf of

such Client, Customer or Sponsored Participant.

Rule 3101 Review of Application

(a) The SEF shall review a prospective Participant’s application and may ask for and review

any additional information it deems relevant.

(b) The SEF in its discretion may conduct an investigation of any applicant.

Rule 3102 Acceptance as a SEF Participant

(a) If the SEF decides to admit an applicant as a Participant, it shall notify the applicant and

state in such notice the date on which the applicant shall become a Participant.

(b) Once admitted, a Participant shall continue at all times to satisfy all the Participation

Criteria set forth in Rule 3000(a) and all other applicable eligibility criteria the SEF may

specify from time to time.

(c) Admission as a Participant only entitles the Participant to Trading Privileges and does not

confer any right of ownership in the SEF, or right to attend or vote at meetings of the

SEF, or right to share in the profits of the SEF.

Rule 3103 Denial, Conditioning or Termination of Participant Status

(a) The SEF may deny, condition or terminate Participant status of any Person:

(1) if such Person is unable to satisfactorily demonstrate its ability to satisfy the

Participation Criteria or any other eligibility criteria required to become or remain

a Participant or any of the representations and warranties made by the Participant

is untrue;

(2) if such Person is unable to satisfactorily demonstrate its capacity to adhere to all

applicable SEF Rules and any other Applicable Law, including those concerning

recordkeeping, reporting, financial requirements and trading procedures;

(3) if such Person fails to comply with any limitation placed by the SEF on such

Person;

(4) if such Person commits a violation of the SEF Rules;

(5) if such Person would bring the SEF into disrepute as determined by the SEF in its

sole discretion; or

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(6) for such other reason the SEF may reasonably determine.

(b) If the SEF decides to deny or condition an application for admission as a Participant, or

terminate a Person’s status as a Participant, the SEF shall promptly notify such Person

(the “Affected Person”) thereof in a writing sent to the address in the SEF application

form or maintained in the SEF’s records. Such Affected Person may, within seven (7)

calendar days of receipt of such notification, request in writing that the SEF reconsider its

determination.

(c) Within thirty (30) calendar days of receiving the request for reconsideration, the SEF

shall either confirm, reverse or modify the denial, conditioning or termination of the

Affected Person as a Participant, and shall promptly notify the Affected Person

accordingly in a writing sent to the address in the SEF application form or maintained in

the SEF’s records.

(d) Any denials, conditionings or terminations implemented by the SEF pursuant to this Rule

3103 will be impartially enforced.

(e) Any denial, conditioning or termination that represents a suspension, expulsion,

disciplinary or access denial action or other adverse action within the meaning of Part 9

of the CFTC Regulations may (to the extent required thereby) be subject to review by the

CFTC pursuant to Part 9 of the CFTC Regulations.

Rule 3104 Duty to Keep Current

(a) If any material information in the Participant’s application becomes outdated or

otherwise is inaccurate or incomplete for any reason, the Participant must promptly

update the application.

(b) Within thirty (30) calendar days following the end of each calendar year, Participants

shall review and revise, as necessary, all information provided in their applications and

provide such revisions to the SEF.

Rule 3105 Withdrawal of Participant; Temporary Deactivation of Trading Privileges

(a) To withdraw from the SEF, a Participant must notify the SEF of its withdrawal. Such

withdrawal shall be accepted and effective immediately upon receipt of such notice by

the SEF, provided that the SEF may, in its reasonable discretion, refuse to accept a

Participant’s withdrawal request or may postpone the effective date of withdrawal of a

Participant if the SEF considers it necessary for the protection of the Participant’s

Customers, other Participants or otherwise in the interests of the SEF.

(b) Upon the effectiveness of the withdrawal of a Participant, all rights and privileges of such

Participant with respect to the SEF shall terminate (including, without limitation, Trading

Privileges). Notwithstanding the accepted withdrawal of a Participant, the withdrawn

Participant, and any Client, Customer or Sponsored Participant thereof, shall remain

bound by the SEF Rules and subject to the jurisdiction of the SEF with respect to any and

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

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of such Person prior to such withdrawal and must cooperate in any SEF Proceeding as if

the former Participant were still a Participant.

(c) Notwithstanding the foregoing, a Participant may request, in writing, that the SEF

temporarily deactivate its Trading Privileges. The SEF may approve or deny any such

request in its sole discretion, and may approve any such request on such terms as the SEF

shall determine in its sole discretion. Upon approval of any such request, the Participant’s

Trading Privileges shall be deactivated and the Participant will not be permitted to

execute Transactions on the SEF or otherwise access the SEF until its Trading Privileges

have been reinstated by the SEF. The Participant shall incur no new fees during the

period of its deactivation.

Rule 3106 Dissolution of Participants

Upon dissolution of a Participant, all rights and privileges of such Participant with respect to the

SEF shall terminate, but all obligations of such Participant shall survive.

Rule 3107 Jurisdiction and Application of SEF Rules

(a) Prior to obtaining access to the SEF and each time a Participant, Customer, Client,

Sponsored Participant or any other Person initiates or executes a transaction on or subject

to the rules of the SEF Rules, directly or through an intermediary, such Participant,

Customer, Client, Sponsored Participant or other Person and any Supervised Person

acting on its behalf shall be deemed to have expressly:

(1) consented to the jurisdiction of the SEF with respect to any and all matters arising

from, related to, or in connection with, the status, actions or omissions of such

Person;

(2) agreed to be bound by, and comply with, the SEF Rules and all Obligations, the

DCO Rules and Applicable Law, in each case to the extent applicable to it;

(3) agreed to assist the SEF in complying with its legal and regulatory obligations,

cooperate with the SEF, its Regulatory Services Provider(s) and the CFTC in any

inquiry, investigation, audit, examination or proceeding, and authorizes the SEF

to provide information regarding it to any Regulatory Services Provider, the

CFTC or any Self-Regulatory Organization.

(b) At the time any Clearing Firm executes a Clearing Firm Agreement, such Clearing Firm

shall be deemed to have expressly:

(1) consented to the jurisdiction of the SEF with respect to any and all matters arising

from, related to, or in connection with, the status, actions or omissions of such

Person;

(2) agreed to be bound by, and comply with, the SEF Rules and all Obligations, the

DCO Rules and Applicable Law, in each case to the extent applicable to it;

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(3) agreed to assist the SEF in complying with its legal and regulatory obligations,

cooperate with the SEF, its Regulatory Services Provider(s) and the CFTC in any

inquiry, investigation, audit, examination or proceeding, and authorizes the SEF

to provide information regarding it to any Regulatory Services Provider, the

CFTC or any Self-Regulatory Organization.

(c) Any Person (including any Authorized Trader) whose access to the SEF is suspended for

any period, and, if applicable, any Client, Customer or Sponsored Participant thereof,

remains subject to the SEF Rules and to the jurisdiction of the SEF throughout the period

of suspension and must cooperate in any SEF Proceeding. Any Person whose access to

the SEF is revoked or terminated, and, if applicable, any Client, Customer or Sponsored

Participant thereof, shall remain bound by the SEF Rules and subject to the jurisdiction

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

with, the status, actions or omissions of such Person prior to such revocation or

termination and must cooperate in any SEF Proceeding.

Rule 3108 Notices to Participants

(a) The SEF shall publish a notice with respect to each addition to, modification or

clarification of the SEF Rules or of any action to implement any SEF Rules on the SEF’s

website or via an electronic mail distribution 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

(each a “Notice to Participants”). For purposes of publication in accordance with the first

sentence of this Rule 3108, it shall be sufficient (without limiting the discretion of the

SEF as to any other reasonable means of communication) if a Notice to Participants is

published on the SEF’s website.

(b) Any Notice to Participants published on the SEF’s website or otherwise provided to

Participants shall be deemed to have been made to all of a Participant’s Supervised

Persons, Clients, Customers and Sponsored Participants.

(c) Each Participant is required to review the “Notices to SEF Participants” section of the

SEF’s website to make itself aware of material changes to the SEF Rules or other notices

that may affect its rights and obligations as a Participant, and is responsible for

conveying such information to its Supervised Persons, Clients, Customers and Sponsored

Participants in accordance with Rule 3114(c).

Rule 3109 Authorized Traders

(a) Each Participant shall designate one or more Authorized Trader(s), which, in the case of

a Sponsoring Participant, may include any Person appointed, employed or authorized by

a Sponsored Participant as provided in Rule 3110. Participants shall be responsible to the

SEF for acting with reasonable care in granting Authorized Trader status to any

individual.

(b) By agreeing to become an Authorized Trader, an individual is deemed to expressly

consent to the jurisdiction of the SEF and agrees to be bound by the duties and

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responsibilities of an Authorized Trader and to be subject to, and comply with, the SEF

Rules and Obligations. Among other duties and responsibilities that the SEF may impose,

an Authorized Trader must:

(1) have the authority, at the SEF’s request, to adjust or withdraw any Order or

Transaction submitted under any User ID assigned to him or her;

(2) conduct activity under any User ID assigned to him or her in compliance with all

SEF Rules and Obligations; and

(3) ensure he or she has been assigned his or her own User ID.

(c) To designate an Authorized Trader, a Participant must follow the procedures established

by the SEF. The SEF may establish criteria that individuals must fulfill to become an

Authorized Trader.

(d) The SEF will maintain a list of all designated Authorized Traders for each Participant.

(e) The SEF may, in its sole discretion, refuse to approve an Authorized Trader or revoke or

suspend the designation of an individual as Authorized Trader to protect other

Participants and the integrity of the SEF or for any other reason and shall promptly notify

the related Participant of such action.

(f) To request the termination of the designation of an individual as Authorized Trader, the

Participant must follow the procedures established by the SEF.

(g) Each Authorized Trader shall be identified to the SEF in the manner prescribed by the

SEF and shall be subject to the SEF Rules. It is the duty of the Participant to ensure that

each Authorized Trader registration is current and accurate at all times.

(h) Without limiting the foregoing, prior to accessing the SEF each Authorized Trader

consents to abide by the SEF Rules and Applicable Law and each Participant will ensure

on an ongoing basis that: (i) none of its Authorized Traders is subject to a

disqualification pursuant to any Applicable Law (unless an appropriate exemption has

been obtained with respect thereto); (ii) each of its Authorized Traders will be technically

proficient; (iii) each of its Authorized Traders will conduct its business in a fair and

equitable manner; and (iv) each of its Authorized Traders will comply with the SEF

Rules and Obligations and conduct its business in accordance with Applicable Law.

Rule 3110 Sponsored Access

(a) A Sponsoring Participant may extend Trading Privileges to one or more Sponsored

Participants. If the Sponsoring Participant is not the Sponsored Participant’s Clearing

Firm, the Sponsoring Participant will provide all relevant clearing information to the SEF

on behalf of the Sponsored Participant. Each Sponsored Participant shall designate one or

more Authorized Traders to transact on the SEF.

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(b) The Sponsoring Participant is responsible for all Orders and Transactions placed by any

Person acting on behalf of or in the name of the Sponsored Participant on the SEF as if

such Orders or Transactions were placed by the Sponsoring Participant (whether or not

the Sponsoring Participant was aware of and/or had approved the placing of such Orders

or Transactions). Any execution occurring as a result of an Order or Transaction entered

by a Sponsored Participant shall be binding in all respects on the Sponsoring Participant.

(c) The Sponsoring Participant must monitor the Sponsored Participant’s access to the SEF

and activity on the SEF, including, but not limited to, the entry, cancellation or other

processing of Orders, risk management, trade reporting, clearing and settlement of

Transactions.

(d) The Sponsored Participant is not a Participant of the SEF. The SEF has no liability to,

and the SEF owes no duties or obligations to, nor has any responsibility for, the

Sponsored Participant. Notwithstanding anything herein to the contrary, the Sponsored

Participant and any other Person using a User ID or login credentials linked to a

Participant will be subject to, and must comply with, the SEF Rules, and may be subject

to Disciplinary Action by the SEF for any violation or attempted violation of the SEF

Rules or provisions of Applicable Law for which the SEF has disciplinary jurisdiction.

The Sponsored Participant will be deemed to have represented and warranted that it is an

ECP and that it has all registrations, licenses and consents required under Applicable

Law. The Sponsoring Participant further agrees to cooperate with the SEF, or any other

regulator, in connection with any inquiry regarding the Sponsored Participant’s access

and activities relating to the SEF and, in connection with such inquiry, the Sponsoring

Participant shall ensure the cooperation of the Sponsored Participant and procure that the

Sponsored Participant is contractually bound to cooperate with the SEF or any other

regulator.

(e) The Sponsoring Participant shall ensure that:

(1) the Sponsored Participant, its directors, members, officers, employees and agents

comply with Applicable Law and the policies and procedures issued or approved

by the SEF and with all of the duties and/or obligations imposed on Participants

under the SEF Rules as if the Sponsored Participant were a Participant for such

purposes, except with respect to any such duties and/or obligations which

manifestly only relate to the Sponsoring Participant;

(2) the Sponsored Participant takes reasonable security precautions to prevent

unauthorized access to and use of the SEF, including unauthorized entry of

information on the SEF and unauthorized use of information and data made

available by the SEF; and

(3) the Sponsored Participant uses any market data for its own internal purposes only

and only in accordance with the SEF Rules.

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(f) The SEF shall obtain from each Sponsoring Participant a representation that each of its

Sponsored Participants will be an ECP at the time each such Sponsored Participant

transacts on the SEF.

(g) The SEF will promptly notify a Sponsoring Participant in writing of its approval, or

refusal to approve, the designation of a Sponsored Participant. The SEF may, in its sole

discretion, revoke, limit, restrict or suspend the designation of a Sponsored Participant,

and shall notify the Participant of such action in accordance with SEF procedures.

(h) A Sponsoring Participant that seeks to terminate the designation of a Sponsored

Participant shall notify the SEF in writing, providing such information as the SEF may

require. The SEF shall terminate the Sponsored Participant’s access to the SEF in

accordance with procedures established by the SEF.

Rule 3111 [Reserved]

Rule 3112 Introducing Brokers

(a) An Introducing Broker will be permitted to introduce Orders and execute Transactions on

the SEF on behalf of a Customer (which may include another Participant or an Account

Manager acting on behalf of a Client) where such Customer has so authorized the

Introducing Broker. Any time an Introducing Broker introduces an Order or Transaction

on the SEF on behalf of a Customer, such Introducing Broker shall be deemed to

represent that the Customer on whose behalf it is acting has granted the Introducing

Broker such authorization. An Introducing Broker shall provide the SEF with such notice

and/or proof of such Customer authorization as the SEF may request from time to time.

(b) If authorized, an Introducing Broker may enter any Order, submit a Block Trade, or

introduce to the SEF for execution any Transaction, permissible under the SEF Rules on

behalf of such Customer.

(c) Each Customer shall be the principal to all executed Transactions resulting from Orders

submitted by an Introducing Broker to the SEF on such Customer’s behalf (other than

where the Customer is a Prime Broker Client executing a Prime Broker Transaction in

the name of and on behalf of a Prime Broker, in which case the relevant Prime Broker

shall be principal to such Transaction).

Rule 3113 Authorized Representatives

(a) Each Participant shall designate an Authorized Representative(s) who will represent the

Participant before the SEF and its committees and receive notices on behalf of the

Participant.

(b) An Authorized Representative shall be empowered by the Participant to act on its behalf

and the SEF shall be entitled to rely on the actions of the Authorized Representative as

binding on the Participant and each of its Authorized Traders.

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(c) Each Participant must provide the SEF with current contact and other requested

information for each of its Authorized Representatives so that the SEF is able to

immediately contact the Authorized Representatives.

Rule 3114 Communications between the SEF and Participants

(a) Each Participant must provide the SEF with its current electronic mail address and

telephone number and the electronic mail address and telephone number of each of its

Authorized Traders and immediately (and in any event within 24 hours) update this

information whenever it changes.

(b) All communications between the SEF and the Participant will be transmitted by

electronic mail and/or posted on the SEF’s website, except as otherwise specified by the

SEF.

(c) Each Participant shall be responsible for conveying such communications to all of its

Supervised Persons, Clients, Customers and Sponsored Participants (and Authorized

Traders thereof).

(d) Each Participant will be responsible for promptly reviewing and, if necessary, responding

to all electronic communications from the SEF to the Participant or any of its Supervised

Persons.

(e) All communications made to Participants shall also be deemed to have been made to all

of its Supervised Persons, Clients, Customers and Sponsored Participants (and

Authorized Traders thereof).

Rule 3115 Recording of Communications

The Market Regulation Department and/or Regulatory Services Provider(s) may record

conversations and retain copies of electronic communications between the SEF, on one hand,

and Participants, Sponsored Participants, Clients or Customers or any of their Supervised

Persons or other agents, on the other hand. Any such recordings may be retained by the SEF or

the Regulatory Services Provider in such manner and for such periods of time as the SEF may

deem necessary or appropriate and in accordance with Applicable Law. The SEF or Regulatory

Services Provider will retain such recording in compliance with CFTC Regulations.

MATERIAL CHANGES

Rule 3200 Change of Control; Non-Assignment

(a) A Participant must provide written notice to the SEF of any of the following changes to

its ownership, control or business operations prior to any such change taking effect to the

extent practicable and in any event no later than 48 hours after any such change takes

effect:

(1) a merger of the Participant with another Person, or

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(2) a transfer, issuance or other transaction that results in one Person owning 50% or

more of the voting equity of the Participant or a transaction that results in the

transfer of all or substantially all of the assets of the Participant.

(b) A Participant may not assign its rights as a Participant without the written consent of the

SEF, which consent shall not be unreasonably withheld.

FEES

Rule 3300 Fees

(a) The SEF shall set the times and amounts of any assessments or fees (including access and

utilization fees), costs and charges to be paid by Participants. By accessing the SEF,

Participants agree to be bound by the fee schedule in effect at the time the applicable SEF

services are rendered.

(b) A Participant will be responsible for the payment of all fees charged to it with respect to

any Transaction, including, without limitation, any Transaction that is (i) for any or no

reason, not fully performed by the parties thereto or (ii) subsequently voided or

rescinded.

(c) Assessments, fees, costs and charges and other amounts owed to the SEF are payable

upon receipt of the invoice. If a Participant fails to pay when due any assessments, fees,

costs and charges owed, and such payment obligation remains unsatisfied thirty (30) days

after its due date, the SEF may suspend, revoke, limit, condition, restrict or qualify the

Trading Privileges of such Participant as it deems necessary or appropriate.

Rule 3301 Volume Discounts

The SEF may from time to time establish financial incentives for meeting trading volume,

liquidity thresholds and/or other standards as may be established by the SEF.

INDEPENDENT SOFTWARE VENDORS

Rule 3400 ISVs

(a) Consistent with Applicable Law, the SEF will provide access to its trading platform,

services and data on a fair and nondiscriminatory basis to any ISV that complies with the

SEF’s documentation and eligibility requirements for ISVs as set forth in the SEF Rules.

(b) An ISV that wishes to access the SEF must:

(1) consent to the jurisdiction of the SEF and agree to be bound by, and comply with,

the SEF Rules and all Obligations, the DCO Rules and Applicable Law, in each

case to the extent applicable to it;

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(2) execute an ISV participation agreement in the form supplied by the SEF;

(3) pay the monthly access fees that may be established by the SEF from time to time,

which fees will be comparable for ISVs receiving comparable access to, or

services from, the SEF;

(4) comply with the applicable technical access standards, system compatibility

requirements, security protocols and technical specifications for connection to the

SEF as may be specified by the SEF from time to time;

(5) ensure that each Person that uses the ISV to access the SEF is either a Participant

or a Client or Customer of a Participant;

(6) in the case of any Order or Transaction submitted to the SEF through the ISV,

provide sufficient detail to identify the Participant (and, if applicable, the

Participant’s Client or Customer) as required by the SEF; and

(7) satisfy any other criteria that the SEF may require to perform its responsibilities

as a Self-Regulatory Organization, comply with Applicable Law or provide

services, provided such criteria are impartial, transparent and applied in a fair and

nondiscriminatory manner.

(c) An ISV may provide data obtained from the SEF solely to Participants and/or Clients or

Customers of a Participant in connection with such Participants’ and/or Clients’ or

Customers’ actual and proposed trading activity on the SEF, and will not provide such

data to any other swap execution facility, security-based swap execution facility, DCM,

national securities exchange or other trading facility or system without the prior written

consent of the SEF.

BUSINESS CONDUCT REQUIREMENTS

Rule 3500 Customers and Clients

No Participant shall enter an Order or enter into a Transaction in the name of a Customer or

Client, unless the Customer or Client has so authorized the Participant. Any time an Introducing

Broker or Account Manager introduces an Order or Transaction on the SEF on behalf of a

Customer or Client (as applicable), such Introducing Broker or Account Manager shall be

deemed to represent that the Customer or Client on whose behalf it is acting has granted the

Introducing Broker or Account Manager such authorization.

Rule 3501 Disclosure Requirements; Know Your Counterparty Requirements

(a) With respect to Uncleared Swaps, Participants that are Swap Dealers or Major Swap

Participants shall verify through representations or otherwise the status of each Swap

counterparty as an ECP as provided in CFTC Regulations applicable to business conduct

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standards for Swap Dealers and Major Swap Participants in their dealing with

counterparties.

(b) Participants that are Introducing Brokers must verify the status of each of their

Customers as an ECP.

(c) Participants that are Account Managers must verify the status of each of their Clients as

an ECP.

(d) Participants that are Sponsoring Participants must verify the status of each of their

Sponsored Participants as an ECP.

(e) Each Participant and Supervised Person, Client, Customer or Sponsored Participant of a

Participant must comply with all disclosure requirements set forth in under Applicable

Law including any additional disclosure requirements imposed by the SEF Rules.

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SECTION 4

TRANSACTION EXECUTION

This Section 4 prescribes Rules concerning trade practices and business conduct on the SEF and

applies to all Orders and Transactions.

Rule 4000.A. Trading Hours

Except with respect to Emergencies, the SEF shall determine and publish the Business Days of

the SEF and the Trading Hours for each Swap. Participants are prohibited from sending any

Order or entering into any Transaction or using any other facility of the SEF outside of the

designated Trading Hours for the relevant Swap. The Trading Hours for each Swap shall be

twenty-three (23) hours per Business Day other than between 5:30 p.m. and 6:30 p.m. (Eastern

Time), in each case, subject to any variation as may be published by the SEF in a Notice to

Participants or included in the relevant Swap Specification.

Rule 4000.B. Swap Specifications

(a) Notwithstanding any provision of the SEF Rules to the contrary, the terms and conditions

set forth in the Swap Specification with respect to a particular Swap shall govern the

trading in such Swap on the SEF and, in the event of any conflict between the general

terms of the SEF Rules excluding the Swap Specifications and the particular terms of the

SEF Rules set forth in the Swap Specification, the particular terms of the SEF Rules set

forth in the Swap Specification shall govern with respect to trading in the relevant Swap

on the SEF.

(b) The Swap Specification for each individual Swap may specify:

(1) different classes of Participants eligible to trade such Swaps. Each such class of

Participants shall have the rights and obligations specified by the Swap

Specification for each such Swap;

(2) whether such Swap may be settled via cash settlement, physical delivery of the

underlying commodity, or by any other means, as applicable; and

(3) the method for determining settlement prices.

(c) The SEF shall permit trading only in Swaps that are not readily susceptible to

manipulation.

Rule 4001 Procedures

(a) With respect to trading on or though the SEF or subject to the SEF Rules, the SEF may

adopt, without limitation, procedures relating to Transactions in Swaps and trading on the

SEF or subject to the SEF Rules, including procedures to:

(1) disseminate the prices of bids and offers on, and Transactions in, Swaps;

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(2) record, and account for, Swaps and SEF activity and regulate administrative

matters affecting Swaps and SEF activity;

(3) establish daily limits (or such other frequency as may be determined from time to

time by the SEF) on the notional amount and/or risk of Orders or Transactions

that may be submitted by a Participant through the SEF or subject to the SEF

Rules;

(4) establish limits on Swaps that may be held by a Participant, Customer, Client or

Sponsored Participant;

(5) establish a limit on the maximum daily price fluctuations for any Swap and

provide for any related restriction or suspension of trading in the Swap; and

(6) establish minimum price quoting increments for each Swap.

(b) The SEF may, in its discretion and at any time, amend any procedures adopted pursuant

to Rule 4001(a), and will publish the amendments in a Notice to Participants or in any

other manner determined appropriate by the SEF.

Rule 4002 Required Identifications

(a) Each Participant and all related Authorized Traders (including those of its Sponsored

Participants) must have a User ID assigned in accordance with the procedure adopted by

the SEF from time to time in order to access the SEF. The User ID assigned to an

Authorized Trader may not be reassigned to another Authorized Trader.

(b) Orders entered on the SEF must include the User ID assigned to the Authorized Trader.

An Authorized Trader is prohibited from allowing any other Person to use such unique

identification to enter Orders on the SEF. No Person may enter Orders on the SEF using a

User ID that has not been assigned to such Person.

(c) Each Participant shall be responsible for all Orders placed or Transactions executed using

any of the User IDs assigned to its Authorized Traders or those of any of its Sponsored

Participants. Prime Brokers shall be responsible for all Prime Brokerage Orders placed or

Prime Broker Transactions executed by a Prime Broker Client acting in its capacity as

such subject to and in accordance with the relevant Prime Broker Acknowledgement

Letter and Rules 4105 and 5103.E.

(d) Participants must terminate an Authorized Trader’s access to the SEF upon termination

of the Authorized Trader’s employment at, or authorization or appointment by, the

Participant or Sponsored Participant (as applicable).

Rule 4003.A. Execution of Transactions

(a) No Person shall execute a Required Transaction subject to the SEF’s jurisdiction other

than via the Order Book unless such Transaction is a Block Trade, Package Transaction

(Order Book Exempt) or a Clearing Exempt Transaction. All Required Cross

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Transactions will be subject to the time delay requirement set forth in Rule 4011,

including TAS Cross Transactions that are Required Cross Transactions.

(b) No Person shall enter into a Clearing Exempt Transaction subject to the SEF’s

jurisdiction unless it (or, if applicable, its Customer, Client or Sponsored Participant) or

the counterparty to the Swap is eligible for and elects to rely on a Clearing Exception.

Upon request of the SEF, a Participant, Sponsored Participant, Customer or Client shall

submit to the SEF all documentation supporting eligibility for the applicable Clearing

Exception.

(c) Permitted Transactions (including Permitted Cross Transactions) may be executed

through the SEF’s Order Book as described in Rule 4003.B. In addition, Permitted Cross

Transactions may be executed away from the SEF’s Order Book as described in Rule

4004. Certain Permitted Transactions may also be executed via Risk Mitigation Sessions

as specified in Rule 4018 and the tpSEF Risk Mitigation Procedures.

(d) Any swap component of a Package Transaction (Order Book Exempt) may be executed

in the same manner as any Permitted Cross Transaction as described in Rule 4004 or, if

available for execution on the SEF’s Order Book, through the SEF’s Order Book.

(e) Block Trades are required to be executed in accordance with the requirements of Rule

4016.

(f) No executed Transactions may be submitted to the SEF other than Block Trades that

occur away from the SEF and that are executed in accordance with the requirements of

Rule 4016.

(g) TAS Cross Transactions must be submitted to the SEF and executed in accordance with

the requirements of Rule 4003.C.

(h) Any Order or Cross Transaction that is submitted to the SEF may be cancelled prior to

execution.

Rule 4003.B. Order Book

(a) All Orders posted to the Order Book are firm (i.e., there are no indications of interest or

indicative quotes allowed).

(b) An acceptable Order must include a specific price and size, as well information meeting

the requirements of Rule 8001.

(c) Order Types.

(1) An acceptable Order must indicate the time in force, which may include the

following:

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(i) “Day” (or “Fill-and-Store”) Orders are only good for the Business Day

and applicable Trading Hours in which they are entered.

(ii) “Fill-or-Kill” (“FOK”) Orders must be immediately executed for the

entire size of the Order or are cancelled automatically.

(iii) “All-or-None” (“AON”) Orders must be executed for the entire size of the

Order or are cancelled automatically. AON Orders enter the Order Book

as passive Orders.

(iv) “Immediate or Cancel” (“IOC”) Orders must be executed fully or partially

and, if partially, the remaining quantity is cancelled automatically.

(v) “Good ‘til Time” (“GTT”) Orders are cancelled after a specified time if no

matching Order is placed.

(vi) “Good ‘til Price” (“GTP”) Orders will be cancelled if the reference price

of the specified instrument is moved up or down (depending upon whether

the Order is a bid or offer).

(vii) “One Cancels Other” (“OCO”) Orders are paired Orders stipulating that if

one of the Orders is executed, the other is automatically cancelled.

(2) Good ‘til Time, Good ‘til Price and One Cancels Other Orders are all also Day

Orders, in that they are only good for the Business Day and applicable Trading

Hours in which they are entered, even if the time, price or execution conditions

are not otherwise met.

(3) Not all Orders types are available for all Swaps. The table below shows the Order

types available for each asset class:

Asset Class Day FOK AON IOC GTT GTP OCO

Credit   ×    

Commodities   × ×  × ×

Rates   US$ only   ×

EUR/GBP

only

Non-Deliverable Forwards   ×    

Equities   ×   × ×

FX Options  × ×    

(d) Pre-Trade Controls.

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(1) Order Limits. The SEF may, within its sole discretion, set Order limits by

product and by instrument within a particular asset class. The following types of

Order limits may be imposed:

(i) Order Size Limit (OSL): This is the maximum size allowed for any single

Order. Any Order submitted will be checked against the product/asset

class’s Order Size Limit, and if the Order exceeds this limit, such Order

will be rejected and the Participant will be notified.

(ii) Order Price Limit (OPL): This is the maximum price differential allowed

for any Order. Any Order submitted will be checked against the

product/asset class’s Order Price Limit and if the Order exceeds this limit,

it will be rejected and the Participant will be notified. The price

differential will be calculated as follows:

(Order price entered) - (Instrument Reference Price) = |Price Differential|

The “Instrument Reference Price” is an estimated current price for the

relevant Swap, based on either current trading data for that instrument on

the SEF and elsewhere, or, in the absence of current trading data for the

relevant Swap, implied from current trading data for other instruments.

(2) Price Tick Deviation. If the price for any Order entered into the Order Book is

greater than (i) the top contra-Order price or, if no contra-Orders exist in the

Order Book, the Instrument Reference Price, plus (ii) the specified number of tick

increments in the Maximum Price Tick Deviation parameter for the Swap, the

Order will be rejected. The Maximum Price Tick Deviation parameter for each

Swap is determined by the SEF from time to time in its sole discretion.

(3) Restriction Against Self-Trading. The Order Book system is configured to

prohibit the matching of Orders placed by Authorized Traders of the same

Participant.

(e) Implied Orders. The SEF offers limited implied order functionality. Under this

functionality, individual separate Orders, which in aggregate would form the legs of a

liquid spread trade, are displayed in the Order Book both as individual outright trades and

in aggregate as a spread trade. This functionality is only made available for tenors at

which spread trades are customarily transacted as determined by the SEF from time to

time and displayed on the Order Book.

(f) Order Entry.

(1) Orders, including Orders for Required Cross Transactions and Permitted Cross

Transactions, may be entered into the Order Book for execution either (i) directly

by any Participant that has established direct connectivity to the SEF’s Order

Management System, or (ii) by an Execution Specialist acting on the instruction

of a Participant. Order information may be communicated by Participants to

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Execution Specialists via telephone and/or via electronic modes of

communication such as email and instant message.

(2) Certain Participants that have elected not to establish direct connectivity to the

OMS have executed a “tpSEF Inc. Terms of Use and SEF Order Book Waiver”

(the “Order Book Waiver”) in lieu of the “tpSEF Inc. Terms of Use.” During the

effectiveness of its “Order Book Waiver,” a Participant must access the Order

Book via an Execution Specialist both for Transactions that must be executed on

Order Book pursuant to Rule 4003.A. and for Transactions voluntarily executed

on the Order Book. Any such Participant may elect to establish direct

connectivity to the OMS at any time by executing the “tpSEF Inc. Terms of Use”

and terminating its “Order Book Waiver.” For the avoidance of doubt, all

Participants, including those that have signed the “Order Book Waiver,” are

required to comply with the requirements of Rule 4003.A. relating to the

execution of Required Transactions.

(3) An Order placed on the Order Book may be cancelled provided such Order has

not been executed. The price or size of an Order placed on the SEF that has not

fully traded may be revised. If the size is reduced, the time priority originally

assigned to the Order does not change. Revising the price or increasing the size

will reset the Order’s time priority in the queue to the time the SEF receives the

revision. Order cancellations or revisions may be communicated by Participants

to Execution Specialists via telephone and/or via electronic modes of

communication such as email and instant message.

(4) When an Authorized Trader logs off and any relevant time-out has expired, (i) all

Orders on the Order Book submitted by that Authorized Trader may be

terminated or may remain live, depending on the manner in which the Authorized

Trader has configured his or her account and (ii) where the Authorized Trader has

entered the Order on behalf of a Customer, all such Customer Orders will be

terminated. If for any reason the connection to the SEF is lost and not-reestablished within any relevant time-out period, all Orders entered from that

location on the SEF are deactivated.

(g) Order Book Display and Interaction.

(1) Once an Order is entered into the Order Book, the Order is displayed

simultaneously to all Participants that have established direct connectivity to the

OMS and may be transacted on as described in Rule 4003.B.(h) below.

(2) All Orders will be displayed on an anonymous basis and each Order Book

platform will show, in real-time, the best price and the depth per product.

(3) For Participants that have direct connectivity to the OMS, each Order Book

platform displays all executions to all Participants, and for each individual

Participant, its Order and execution history for the trading day.

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(4) The SEF’s Order Book supports the following Order interactions on any active

Order, which may be taken only by the Participant who submitted the Order or by

an Execution Specialist acting on the Participant’s instructions:

(i) Amend, and

(ii) Cancel. (If a partially executed Order is cancelled, only the balance of the

Order is cancelled.)

(5) Information regarding Orders on the Order Book will be provided upon request to

any Participant by an Execution Specialist via telephone and/or via electronic

modes of communication such as email and instant message.

(h) Matching of Orders on the Order Book.

Orders may be either matched automatically or manually hit or lifted as described in this

Rule 4003.B.(h). In each case, Orders will be executed using price and time priority.

(1) Ability to Trade. In the case of either Manual Matching or Automatic Matching

as described in this Rule 4003.B.(h):

(i) An Order for a Cleared Swap may only be hit or lifted by, or matched with

a contra-Order for, a Participant (or a Participant’s Customer or Client)

that is, or whose Clearing Firm is, a Clearing Member at the DCO at

which the Swap is to be cleared, and

(ii) An Order for an Uncleared Swap may only be hit or lifted by, or matched

with a contra-Order for, a Participant (or a Client or Customer of a

Participant) that has swap trading relationship documentation in place

with the relevant counterparty and only to the extent that each

counterparty has available credit line, both as described in Rule 4013.B.

(2) Manual Matching. Subject to the requirements of Rule 4003.B.(h)(1) above, a

Participant may manually hit or lift, in whole or in part, any resting Order within

the Order Book that is (i) at the best price(s) within the market for the relevant

product, and (ii) if there are multiple Orders at the same price(s), entered first in

the Order Book.

(3) Automatic Matching. Subject to the requirements of Rule 4003.B.(h)(1) above

and depending on Order type (as described in Rule 4003.B.(c)) and the Orders

resting on the Order Book, Orders entered into the Order Book will be

automatically (i) matched (fully or partially) to one or more Orders within the

Order Book based on price and time priority or (ii) cancelled. Certain Order Book

platforms do not support Automatic Matching.

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Rule 4003.C. Trade at Settlement Cross Transactions

(a) A Participant may submit to the SEF for execution a Cross Transaction for which the

fixed rate will be the ICE Swap Rate for the “USD Rates 1100” benchmark run and for

the relevant tenor published by ICE Benchmark Administration Limited at 11:15 a.m.

New York time on the date of the Participant’s submission (each such Cross Transaction,

a “TAS Cross Transaction”). TAS Cross Transactions may be submitted to the SEF

between 7 a.m. New York time and 10:59 a.m. New York time on each day the SEF is

open for business.

(b) Each TAS Cross Transaction submitted to the SEF will be held in abeyance by the SEF,

and will not be deemed executed, until the relevant ICE Swap Rate has been announced

and, in the case of any TAS Cross Transaction that is a Required Cross Transaction, the

time delay requirement set forth in Rule 4011 has been applied as described in Rule

4003.C.(c) below.

(c) For any TAS Cross Transaction that is a Required Cross Transaction, the time delay

requirement described in Rule 4011 will be applied immediately following the

announcement of the relevant ICE Swap Rate.

(d) Once a TAS Cross Transaction has been executed: (i) the SEF will generate and send a

Confirmation to each counterparty in accordance with Rule 4012; (ii) the Transaction

will be reported by the SEF to an Approved SDR in accordance with Rule 8005; and (iii)

if it is a Cleared Swap, the Transaction will be routed by the SEF to the relevant DCO in

accordance with Rule 4013.A.

Rule 4004 Permitted Cross Transactions

(a) Permitted Cross Transactions may either be:

(1) Executed through the SEF’s Order Book as described in Rule 4003.B., or

(2) Submitted to the SEF for execution away from the SEF’s Order Book either (i) to

an Execution Specialist, or (ii) for FX options, non-deliverable forwards and

Transactions in the Rates asset class, directly by Participants that have established

direct connectivity to the SEF.

(b) Permitted Cross Transactions that are submitted to an Execution Specialist for execution

away from the Order Book may be executed through either (1) the SEF’s Deal

Management System, or (2) if available, the OMS using Off-Book Ticket Functionality.

A Participant submitting a Permitted Cross Transaction to an Execution Specialist must

provide the information required by Rule 8001. Permitted Cross Transactions may be

communicated to an Execution Specialist via telephone and/or via electronic modes of

communication such as email and instant message.

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(c) Permitted Cross Transactions submitted directly to the SEF for execution away from the

Order Book by Participants that have established direct SEF connectivity will be

executed as follows:

(1) Through the OMS using Off-Book Ticket Functionality for Permitted Cross

Transactions in the Rates asset class and non-deliverable forwards, and

(2) Through the SEF’s Deal Management System for FX options.

Rule 4005 Mishandling of Customer Orders

Any Participant that mishandles any Customer Order is responsible for all remedial actions with

respect to such Order.

Rule 4006 Trading Halts

The SEF, in its sole discretion, may declare a trading halt at any time.

Rule 4007 Termination of the SEF Connection

The SEF shall have the right to summarily terminate the direct, electronic connection of any

Participant to the SEF. Additionally, the SEF shall have the right to direct a Participant to

immediately terminate the direct, electronic access to the SEF of any Sponsored Participant. Any

such termination shall be impartially enforced and shall be invoked only for technical reasons.

Any affected Participant or Sponsored Participant shall continue to have access to the SEF by

means of an Execution Specialist, unless such access is denied in accordance with the procedures

set forth in Rule 3103 or elsewhere in the SEF Rules.

Rule 4008 Risk Controls

(a) The SEF may, in its sole discretion, to protect other Participants and the integrity of the

SEF, reject any Order or Transaction placed or reported on the SEF.

(b) The SEF shall have the right to take any action to prevent or reduce the potential of

market disruption, including, but not limited to, market restrictions that pause or halt

trading, if such action is in the best interest of the swap markets and/or the SEF.

Rule 4009 Priority of Customers’ Orders

No Participant that is an Introducing Broker shall enter an Order into the SEF 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, including, without limitation, an Order allowing

discretion as to time and price, when such Introducing Broker is in possession of any Order in

the same Swap for its Customer that the SEF is capable of accepting.

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Rule 4010 Trading Against Customers’ Orders Prohibited; Withholding Orders

Prohibited

(a) No Participant in possession of a 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) The foregoing restriction shall not apply to the following:

(1) Block Trades, and

(2) Transactions where the Customer has granted prior consent and such consent is

permitted under Applicable Law.

(c) Except as otherwise explicitly permitted under this Rule 4010(c) and Rule 5203(b), no

Person shall (i) disclose another Person’s Order to buy or sell except to a designated SEF

Official or the CFTC, (ii) solicit or induce another Person to disclose Order information

or (iii) take action or direct another to take action based on non-public Order information,

however acquired. The mere statement of opinions or indications of the price at which a

market may open or resume trading does not constitute a violation of this Rule. Nothing

contained in this Rule 4010(c) shall prevent a Person from disclosing information as may

be required by legal process (including subpoena or demand for productions) or to such

Person’s agents or advisors (including, but not limited to, accountants and auditors and

legal counsel).

(d) Any Participant entering Orders on the SEF for its Customer or Client 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 Customer or Client.

(e) A Participant must immediately enter into the SEF all Orders received from its

Customers that are executable immediately. If a Participant cannot immediately enter into

the SEF an Order received from its Customer, the Participant must enter the Order into

the SEF as soon as practicable, and must immediately create an electronic record as

provided in Rule 8002.

Rule 4011 Time Delay Requirement for Required Cross Transactions

(a) With respect to Required Cross Transactions, the following conditions must be satisfied:

(1) in the case of an execution by a Participant as principal/dealer against a customer

Order, the customerCustomer Order shall be entered into the Order Book as a

firm quote and exposed to the market for at least 15 seconds before the

Participant’s Order may be entered, and

(2) in the case of an execution by a Participant acting as broker of two customers’

Orders against each other, one side of the potential Transaction (the “Displayed

Order”) shall be entered into the Order Book as a firm quote and exposed to the

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market for at least 15 seconds before the second side of the potential Transaction

(the “Waiting Order”) may be entered.

(b) With respect to a Required Cross Transaction subject to Rule 4011(a)(2) above, any

Participant, Sponsored Participant, Customer or Client whose Order is the Waiting Order

shall not, directly or indirectly, execute against the Displayed Order prior to the time that

entry of the Waiting Order is permitted under Rule 4011(a)(2) above.

Rule 4012 Confirmations and USIs

(a) The SEF will generate and send a Confirmation to each counterparty to a Transaction

(which, in the case of a Prime Broker Transaction, will be the relevant Prime Broker) at

the time of execution of such Transaction; provided that where a counterparty to a

Transaction is a Customer, the Confirmation may be provided to the Customer’s

Introducing Broker in accordance with Rule 4012(f); and provided further that where a

Prime Broker Client executes a Prime Broker Transaction, a copy of the Confirmation

shall be sent to the Prime Broker Client in addition to being sent to the Prime Broker.

Upon receipt of a Confirmation, such counterparty, Introducing Broker or Prime Broker

Client (as applicable) shall, as soon as practicable, review the contents of such

Confirmation and promptly report any errors or omissions to the SEF.

(b) The Confirmation (including, with respect to Uncleared Swaps, the Terms Incorporated

by Reference as defined in Rule 4012(d)(1)) shall legally supersede any previous

agreement and shall constitute a confirmation as defined in CFTC Regulation 45.1. The

Confirmation shall contain, among other things:

(1) the USI for the Transaction; and

(2) the identity of the Swap Data Repository to which the Transaction is being

reported.

(c) With respect to certain products, Transactions and counterparties, a Confirmation may be

provided on the SEF’s behalf by MarkitSERV’s Organized Trading Venue (OTV)

Confirmation Service or other similar confirmation service. Subject to Rule 4012(d),

regardless of the means of delivery, pursuant to these rules, each Participant, Sponsored

Participant, Customer and Client agrees that the Confirmation represents legally binding

documentation memorializing the agreement of the parties to all the terms of the

Transaction.

(d) Confirmations for Uncleared Swaps.

(1) With respect to any Uncleared Swap, the economic terms specific to the

Transaction shall be reflected in a written communication (the “Trade

Communication”) sent by the SEF to each counterparty, Introducing Broker or

Prime Broker Client in accordance with Rule 4012(a). The Trade

Communication, together with the documents and agreements (including, without

limitation, ISDA master agreements, other master agreements, terms supplements,

master confirmation agreements and incorporated industry definitions) governing

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such Transaction (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. The provisions of

this Rule 4012(d) relating to Terms Incorporated by Reference rely on relief

granted by the CFTC’s Division of Market Oversight in No-Action Letter 17-17,

which expires on the effective date of any changes to the relevant CFTC

Regulations.

(2) In satisfaction of the obligations imposed on the SEF under CFTC

Regulation 37.6(b), each Trade Communication (and thus each Confirmation) is

deemed to incorporate the Terms Incorporated by Reference. All Confirmations

for Uncleared Swaps that are generated and issued directly by the SEF shall state

that they incorporate by reference any previously-negotiated freestanding

agreement of the counterparties governing such Transaction.

(3) In the event of any conflict or inconsistency between (i) the Trade

Communication and (ii) the Terms Incorporated by Reference, the Trade

Communication shall prevail to the extent of any such conflict or inconsistency,

and each Trade Communication will state the same.

(4) For each Uncleared Swap executed on or pursuant to the rules of the SEF Rules,

each previously-negotiated freestanding agreement of the counterparties included

in the Terms Incorporated by Reference must be available to the SEF and/or the

CFTC staff upon request within a reasonable period of time. Any such agreements

provided to the SEF in connection with a CFTC request will be furnished to the

CFTC as soon as they are available.

(e) The USI referred to in 4012(a) above shall be created by the SEF and transmitted to each

counterparty as soon as technologically practicable in accordance with CFTC Rule

45.5(a)(2).

(f) By executing a Transaction on the SEF through an Introducing Broker, each Customer is

deemed to authorize the SEF to send Confirmations of such Transactions to the

applicable Introducing Broker and to authorize such Introducing Broker to accept such

Confirmations on behalf of such Customer.

(g) By providing a Prime Broker Acknowledgement Letter to the SEF, each Prime Broker is

deemed to authorize the SEF to send Confirmations of Prime Broker Transactions to the

applicable Prime Broker Client and, in the case of a Prime Broker Transaction transacted

through an Introducing Broker, to the applicable Introducing Broker, subject to Rule

4105(b).

Rule 4013.A. Cleared Swaps

(a) Each Cleared Swap shall be cleared through the DCO indicated in the Swap Specification

or agreed by the parties in accordance with the Applicable Law, provided that the DCO

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must be one of those recognized by the SEF. The DCOs currently recognized by the SEF

are:

(1) ASX Clear (Futures) Pty Limited

(2) Chicago Mercantile Exchange, Inc.

(3) Eurex Clearing AG

(4) ICE Clear Credit LLC

(5) Japan Securities Clearing Corporation

(6) LCH.Clearnet LLC

(7) LCH.Clearnet Limited

The SEF may recognize additional DCOs either through amendment of this Rule 4013.A.

or by issuance of a Notice to Participants.

(b) For each Cleared Swap a Participant expects to enter into via the SEF or subject to the

SEF Rules (whether for itself or for a Client, Customer or Sponsored Participant), the

Participant or a Participant’s Client, Customer or Sponsored Participant, as applicable,

must establish a clearing account with the relevant DCO or with a Clearing Firm that is a

Clearing Member of such DCO.

(c) The SEF shall route each Cleared Swap executed on the SEF (and accepted for clearing

by a Clearing Firm if the relevant party to the Transaction is Non-Self-Clearing) to the

relevant DCO as soon as technologically practicable after execution, and in no event later

than ten (10) minutes after execution. The SEF may do so either by submitting the

Cleared Swap directly to the DCO or by routing the Cleared Swap through an

Affirmation Hub or other middleware provider. A Transaction will be deemed to have

been accepted for, or rejected from, clearing upon receipt of appropriate notice, in

accordance with Applicable Law, from the DCO or from a third party acting on behalf of

the DCO as authorized by the DCO for such purpose. The acceptance of a Transaction

for clearing shall not relieve any Participant, Client or Customer of the duty to act in

good faith and with reasonable care and diligence.

(d) If a Transaction in a Cleared Swap (including a Transaction that is a component leg of a

Package Transaction) is rejected by the DCO or a third party acting on behalf of the

DCO, such Transaction is void ab initio and shall be cancelled by the SEF. Trades that

are rejected from clearing may not be held in a suspended state and then re-submitted.

(e) Rejected Transactions in Cleared Swaps.

(1) If the SEF determines pursuant to the procedures set forth in Rule 5103.C. that a

Transaction in a Cleared Swap (including a Transaction that is a component leg of

a Package Transaction) is rejected from clearing (i) because of a clerical or

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operational error or omission made by the SEF or by one of the counterparties to

the Transaction or its agent, or (ii) in the case of a component leg of a Package

Transaction, due to the sequencing of the submission of the component legs of the

Package Transaction, a new trade, with terms and conditions that match the terms

and conditions of the original trade, other than any such error or omission and

time of execution, may be executed on the SEF and submitted for clearing

without having been executed pursuant to the methods set forth in CFTC

Regulations 37.9(a)(2) or 38.500.

(2) If the SEF is identifies and determines how to correct the error or omission, it

may execute the new trade without obtaining the consent of the counterparties.

(3) If the SEF is unable to determine how to correct the error or omission, the SEF, at

its election, may either (x) seek guidance from the counterparties (and, if

applicable, their agents and/or Clearing Firms) with respect to how to correct the

error after which the SEF may then correct the error with the consent of both

counterparties, or (y) elect not to fix the Transaction, in which case the

Transaction will be treated as void ab initio and shall be cancelled by the SEF.

(4) Execution of a new trade pursuant to this Rule 4013.A.(e) must comply with the

requirements specified in Rule 4017 and must occur as quickly as technologically

practicable after receipt of notice of the rejection by the DCO, but, in any event,

no later than sixty (60) minutes from issuance of such notice. If the resubmitted

Transaction is rejected, such Transaction will be void ab initio and shall be

cancelled by the SEF. The counterparties may not resubmit a new Transaction a

second time.

(5) The procedure set forth in this Rule 4013.A.(e) is not available with respect to

Transactions that are rejected from clearing for credit reasons.

(6) This Rule 4013.A.(e) relies on relief granted by the CFTC’s Divisions of Market

Oversight and Clearing and Risk in No-Action Letter 17-27, which expires on the

effective date of revised CFTC Regulations that address clerical or operational

errors.

(f) Erroneously Cleared Transactions.

(1) If it is determined pursuant to the procedures set forth in Rule 5103.C. that a

Transaction in a Cleared Swap (including a Transaction that is a component leg of

a Package Transaction) was incorrectly executed or cleared as the result of a

clerical or operational error or omission, the SEF may permit the original

counterparties to the Transaction to enter into a prearranged Transaction on the

SEF that offsets the Transaction carried on the DCO’s books (an “Offsetting

Transaction”), without the Offsetting Transaction having to be executed pursuant

to the methods required in CFTC Regulations 37.9(a)(2) and 38.500. The SEF

may also permit the original counterparties (or, if the wrong legal entity was

assigned as a counterparty to the original Transaction, the intended

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counterparties) to enter into a prearranged Transaction on the SEF that corrects

the errors in the original Transaction (“Correcting Transaction”), without the

Correcting Transaction having to be executed pursuant to the methods required in

CFTC Regulations 37.9(a)(2) and 38.500.

(2) If the SEF identifies and determines how to correct the error or omission, it may

execute the Offsetting Transaction and the corresponding Correcting Transaction

without obtaining the consent of the counterparties.

(3) If the SEF is unable to determine how to correct the error or omission, the SEF

may either (x) seek guidance from the counterparties to the Transaction and, if

applicable, their agents and/or Clearing Firms, after which the SEF may then

correct the error by executing an Offsetting Transaction and corresponding

Correcting Transaction with the consent of both counterparties, or (y) elect not to

correct the error, in which case the original Transaction shall stand as executed.

(4) Offsetting Transactions and Correcting Transactions executed pursuant to this

Rule 4013.A.(f) must comply with the requirements specified in Rule 4017 and

must be executed and cleared no later than three (3) days after the original,

erroneous Transaction was executed.

(5) The procedure set forth in this Rule 4013.A.(f) is available only with respect to

clerical or operational errors or omissions made by the SEF, a counterparty to a

Transaction or an agent of a counterparty to a Transaction.

(6) This Rule 4013.A.(f) relies on relief granted by the CFTC’s Divisions of Market

Oversight and Clearing and Risk in No-Action Letter 17-27, which expires on the

effective date of revised CFTC Regulations that address clerical or operational

errors.

(g) The SEF shall have the right to (i) suspend Trading Privileges of the Participant(s) or

Sponsored Participant(s) that executed one or more rejected Transactions or prohibit

further trading on behalf of the Client(s) or Customer(s) on whose behalf any rejected

Transaction(s) were executed, or (ii) take any other action permitted by the SEF Rules.

The liability for any losses arising out of or in connection with a rejected Transaction will

be determined by the parties to the Transaction. For the avoidance of doubt, the SEF will

have no liability for any such losses.

(h) It shall not be a condition for access to the SEF that any Participant be subject to a

breakage agreement. This includes breakage agreements in respect of Package

Transactions.

(i) Each Person that is registered, or required to be registered, with the CFTC as a Swap

Dealer or Major Swap Participant is responsible for compliance with the mandatory

trading requirement under Section 2(h)(8) of the CEA when such Person enters into, or

facilitates entry into, a Swap that is subject to the Clearing Requirement.

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(j) The clearing services provided by a DCO in respect of a Cleared Swap will be governed

by the rules, policies and procedures of that DCO. In addition, with respect to any DCO

that has been granted an exemption from registration as such, the clearing services

provided by such DCO must comply with any terms and conditions imposed on that DCO

by the CFTC in connection with the DCO’s exemption from registration.

(k) Procedures for Cleared Swaps Routed Through an Affirmation Hub.

(1) Each Cleared Swap that is routed to the relevant DCO through an Affirmation

Hub shall be routed in accordance with the following procedures:

(i) (x) All Cleared Swaps resulting from Risk Mitigation Sessions, and (y) all

Cleared Swaps that (A) are executed directly on the Order Book without

the assistance of an Execution Specialist and (B) do not involve

intermediation by an Introducing Broker, shall be automatically submitted

by the Affirmation Hub to the relevant DCO as soon as technologically

practicable after receipt from the SEF, without Participants or Customers

being provided the opportunity to Affirm; and

(ii) All other Cleared Swaps must be Affirmed by Participants or Customers,

as applicable, as soon as technologically practicable after execution so that

each such Cleared Swap is routed to and received by the applicable DCO

no later than ten (10) minutes after execution.

(2) Failure by a Participant or Customer to Affirm a Cleared Swap routed through an

Affirmation Hub within the time frame required by Rule 4013.A.(k)(1)(ii) shall be

considered a violation of the SEF Rules; provided that:

(i) Such failure shall be a violation of the SEF Rules only by the

Participant(s) or Customer(s), as applicable, that failed to Affirm the

Cleared Swap in accordance with Rule 4013.A.(k)(1)(ii); and

(ii) No such failure shall be a violation of the SEF Rules where the failure, as

determined in the SEF’s discretion, was substantially the result of any

errors or delays caused by the SEF, any Execution Specialist, the

Affirmation Hub or any event (such as loss of internet connectivity, power

or other force majeure) beyond the reasonable control of the Participant or

Customer.

(3) The Market Regulation Department shall, on a monthly basis, review the previous

month’s Affirmations by Participants and Customers for compliance with this

Rule 4013.A.(k). Notwithstanding such regular monthly reviews, the SEF may at

any time conduct investigations of possible violations of Rule 4013.A.(k)(1)(ii) in

accordance with the procedures set forth in Rule 6001. The SEF, through its

Market Regulation Department, shall review each possible violation of Rule

4013.A.(k)(1)(ii) in light of all the facts and circumstances, including whether any

errors or delays were caused by the SEF, any Execution Specialist, the

Affirmation Hub or any event (such as loss of internet connectivity, power or

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other force majeure) beyond the reasonable control of the Participant or

Customer.

(4) Unless the Market Regulation Department, the Regulatory Oversight Committee

or the Chief Compliance Officer determines otherwise in accordance with the

provisions of Chapter 6 of the SEF Rules, upon the first violation of Rule

4013.A.(k)(1)(ii) in any rolling 12-month period a warning letter will be issued in

accordance with Rule 6017, upon the second or third violation a summary fine

will be imposed in accordance with Rule 6016 and upon the fourth (or higher)

violation, the matter will be referred to a Disciplinary Panel for formal

disciplinary proceedings.

Rule 4013.B. Uncleared Swaps

A Participant may enter into an Uncleared Swap for its own account only with a counterparty

with which such Participant has swap trading relationship documentation that meets the

requirements of Applicable Law. A Participant may enter into an Uncleared Swap on behalf of a

Customer or Client only if such Customer (or, where the Customer is a Prime Broker Client, the

related Prime Broker) or Client has swap trading relationship documentation with the relevant

counterparty that meets the requirements of Applicable Law. A Participant acting as a Prime

Broker Client may enter into an Uncleared Swap in the name of and on behalf of a Prime Broker

only with a counterparty with which such Prime Broker has swap trading relationship

documentation that meets the requirements of Applicable Law. The Participant and/or Customer

or Client or Participant’s Prime Broker shall provide any information requested by the SEF in

the processing and settlement of such Uncleared Swaps. In addition, a Participant, for itself or on

behalf of its Customer or Client may, from time to time, input onto the SEF’s systems, either

itself, or by instructing an Execution Specialist, the credit line for any or all parties with which it,

or such Customer or Client, has such swap trading relationship documentation.

Rule 4014 Information Regarding Orders and Dissemination of Trade Data

The SEF may make information regarding Orders (including prices and amounts), Transactions

and any other matters it may deem appropriate available to Participants and other Persons at such

times and in such manner (whether through the SEF, a ticker, financial information services or

otherwise) as it may consider necessary from time to time. In accordance with Rule 5702, each

Participant or other Person receiving any such information through the SEF may redistribute

such information only to such extent and in such manner as may be permitted by the SEF from

time to time.

Participants are hereby notified that the SEF discloses swap transaction and pricing data for

publicly reportable swap transactions executed on the Order Book prior to the public

dissemination of such data by the relevant Swap Data Repository. This data is available to all

Participants that have elected to obtain a connection to the Order Book and is disclosed to such

Participants contemporaneously with the transmission of the data to the applicable Swap Data

Repository for public dissemination.

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Rule 4015 Enforceability

(a) A Transaction entered into on or pursuant to the SEF Rules shall not be void, voidable,

subject to rescission or otherwise invalidated or rendered unenforceable as a result of:

(1) a violation by the SEF of the provisions of Section 5h of the CEA or Part 37 of

the CFTC Regulations;

(2) any CFTC proceeding to alter or supplement a rule, term or condition under

Section 8a(7) of the CEA or to declare an emergency under Section 8a(9) of the

CEA; or

(3) any other proceeding the effect of which is to alter, supplement or otherwise

require the SEF to adopt a specific term or condition, trading rule or procedure or

to take or refrain from taking a specific action.

(b) Without limiting the generality of the foregoing, failure of the SEF to broadcast any

message in respect of a Transaction made on the SEF shall not invalidate any Transaction

recorded by the SEF.

Rule 4016 Block Trades

The following shall govern all Block Trades in Swaps:

(a) All Block Trades, unless otherwise exempted by a SEF Rule, must comply with the

recordkeeping requirements set forth in Rule 8003.

(b) Block Trades that occur away from a trading system or platform of the SEF must be

submitted to the SEF in a manner prescribed from time to time by the SEF. Each such

submission must include all of the data required by Parts 43 and 45 of the CFTC

Regulations, including without limitation (i) a notification to the SEF of the parties’

election to have the Transaction treated as a Block Trade, and (ii) the actual notional or

principal amount of the Transaction. The parties entering into a Block Trade must agree

upon which party shall be responsible for reporting all terms of the Transaction to the

SEF (which party may be an Introducing Broker), and such designated party must report

the Block Trade to the SEF as soon as technologically practicable after execution, but no

later than ten (10) minutes after execution. Only Block Trades that are not Cleared Swaps

are permitted to occur away from a trading system or platform of the SEF.

(c) Upon receipt of the submission of a Block Trade as required by Rule 4016(b), the SEF

will review the submission, and will report the Transaction as required by Parts 43 and 45

of the CFTC Regulations as soon as technologically practicable after execution. Such

report to the SDR will include among other things the actual notional or principal amount

of the Transaction and a notification to the Swap Data Repository of the parties’ election

to have the Transaction treated as a block trade.

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(d) Swap components of Package Transactions may be executed as Block Trades, provided

that each such swap component is for a quantity that is equal to or in excess the

Appropriate Minimum Block Size.

(e) A Participant transacting a Block Trade on behalf of a Client or Customer must receive

prior written instruction or consent from the Client or Customer to do so.

(f) Except as may be permitted by CFTC Regulation 43.6(h)(6), the aggregation of Orders

across multiple Customers or Clients in order to meet the Appropriate Minimum Block

Size is prohibited.

(g) Each party to a Block Trade shall comply with all applicable SEF Rules and, without

limiting the generality of the foregoing, each such party shall be an ECP.

(h) Any Block Trade in violation of these requirements may constitute conduct which is

inconsistent with just and equitable principles of trade.

(i) Upon request by the SEF, each party to a Block Trade shall produce satisfactory evidence

that the Block Trade meets the requirements set forth in the SEF Rules.

(j) Cleared Block Trades must be executed on a non-Order Book trading system or platform

of the SEF. Each Order underlying such a Cleared Block Trade must comply with the

requirements for Order information set forth in Rule 8001 and shall include a notification

to the SEF of the party’s election to have the resultant publicly reportable swap

transaction treated as a Block Trade. In addition, all such Cleared Block Trades must

comply with the pre-execution credit check requirements set forth in Rule 4017 and all

other applicable SEF Rules and CFTC Regulations. For the avoidance of doubt, all Block

Trades in Cleared Swaps must be executed on a non-Order Book trading system or

platform of the SEF in accordance with this Rule 4016(j) in order to facilitate compliance

with Rule 4017. This Rule 4016(j) relies on relief granted by the CFTC’s Division of

Market Oversight in No-Action Letter 17-60, which expires at the earlier of (i) 11:59

p.m. (Eastern Time) on November 15, 2020, and (ii) the effective date of any CFTC

action with respect to the issues discussed therein. If such no-action relief is extended,

upon and to the extent of such extension, the provisions of this Rule 4016(j) will continue

apply.

Rule 4017 Pre-Execution Credit Checks

(a) At the time of submitting an Order for any Cleared Swap (including any Cleared Swap

that is a leg of a Package Transaction) or any Cleared Block Trade, a Participant (whether

for itself or for a Customer or Client) must designate a Clearing Member with regard to

the Transaction, which may be either the relevant party to the Transaction if such party is

Self-Clearing or a designated Clearing Firm if the relevant party to the Transaction is

Non-Self-Clearing.

(b) Prior to the execution of any Order for a Cleared Swap (including any Cleared Swap that

is a leg of a Package Transaction) or any Cleared Block Trade for which the relevant

party is Non-Self-Clearing, the SEF will facilitate pre-execution credit screening by or on

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behalf of the designated Clearing Firm. Upon receiving confirmation that the Order or

Cleared Block Trade satisfies the Clearing Firm’s pre-execution limits with respect to

such party, the SEF will accept the Order or Cleared Block Trade for execution. If the

SEF does not promptly receive confirmation or receives confirmation that the Order or

Cleared Block Trade does not satisfy the Clearing Firm’s pre-execution limits with

respect to such party, the SEF will cancel the Order or Cleared Block Trade.

(c) Any party that is Self-Clearing with respect to a Transaction is deemed to represent, by

submitting an Order for its proprietary account or, in the case of a Customer, causing its

Introducing Broker to do so, that it has completed pre-execution screening of its internal

clearing risk limits for proprietary accounts.

Rule 4018 Risk Mitigation Sessions

The SEF may conduct periodic anonymous risk mitigation sessions (“Risk Mitigation Sessions”)

in accordance with the tpSEF Risk Mitigation Procedures. Information on upcoming Risk

Mitigations Sessions are made available by the SEF on its website. The tpSEF Risk Mitigation

Procedures are attached hereto as Appendix C.

POSITION LIMITS AND POSITION ACCOUNTABILITY LEVELS

Rule 4100 SEF Rules Do Not Limit Emergency Powers

Nothing contained in the SEF Rules relating to position limits shall in any way be construed to

limit the ability of the SEF to take an Emergency Action as enumerated in the SEF Rules, and,

unless the Board and/or the CEO (or, if the CEO is not available, the most senior Officer that is

available) in taking an Emergency Action shall state otherwise, any such Emergency Action

shall be effective with respect to all Participants, Sponsored Participants, Clients and Customers

regardless of whether an exemption from the position limits has previously been granted

pursuant to these SEF Rules.

Rule 4101 Position Limits

(a) To reduce the potential threat of market manipulation or congestion, the SEF shall adopt

for each of the contracts of the SEF as is necessary and appropriate, position limits for

speculators.

(b) Except as otherwise provided by the SEF Rules, no Person, including a Participant,

Sponsored Participant, Client or Customer, may hold or control a position in excess of

such position limits, and no Person may maintain a position in excess of such position

limits for a Client or Customer if such Person knows, or with reasonable care should

know, that such position will cause such Client or Customer to exceed the applicable

position limits.

(c) Position limits shall apply to (i) all positions in accounts for which any Person, by power

of attorney or otherwise, directly or indirectly holds positions or controls trading, and

(ii) positions held by two or more Persons acting pursuant to an expressed or implied

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agreement or understanding, as if the positions were held by, or the trading of the

positions were done by, a single Person.

(d) Each Participant required to file any report, statement, form or other information with the

CFTC pursuant to CFTC Regulations concerning a position limit on any Transaction or

commodity underlying a Transaction must simultaneously file a copy of such report,

statement, form or other information with the SEF. Such information shall include, for

Participants who are Introducing Brokers, information concerning the Customers for

which Transactions are entered into on the SEF.

Rule 4102 Exemptions from Position Limits

Any Person seeking an exemption from the position limits referred to in Rule 4101 must file an

application with the SEF in the manner and within the time limits prescribed by the SEF. The

SEF shall notify the applicant whether the exemption has been approved and whether the SEF

has imposed any limitations or conditions on the exemption. The decision of the SEF shall be

final.

Rule 4103 Position Accountability

(a) To reduce the potential threat of market manipulation or congestion, the SEF shall adopt,

as is necessary and appropriate, position accountability levels for speculators for each of

the contracts of the SEF. Any Person, including a Participant, Sponsored Participant,

Client or Customer, who owns or controls Swaps in excess of the applicable position

accountability level shall provide the SEF, at its request, any information regarding the

nature of the position, trading strategy or hedging activities, if applicable, and if ordered

by the SEF, shall not increase the size of any such position.

(b) For purposes of this Rule 4103, 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 4103 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.

Rule 4104 Enforcement of Position Limits and Position Accountability Levels

(a) No Person may for itself or any Customer or Client maintain a combination of Swaps

which is, or which when aggregated in accordance with this Rule is, in excess of the

limits established pursuant to Rule 4101 (or, to the extent ordered not to increase such

positions pursuant to Rule 4103, a position in excess of the relevant level).

(b) In the event the SEF learns that a Person maintains positions in accounts with more than

one (1) Person such that the aggregate position in all such accounts exceeds (i) the

position limits established pursuant to Rule 4101 or (ii) to the extent such Person is

ordered not to increase such positions pursuant to Rule 4103, the relevant level, the SEF

may notify all Persons maintaining or carrying such accounts of the total positions of

such accounts. Such notice may also instruct each such Person to reduce the positions in

such accounts immediately after receipt of the notice, proportionately or otherwise so that

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the aggregate positions of such accounts does not exceed the position limits and position

accountability levels established pursuant to Rules 4101 and 4103, unless as provided by

Rule 4104(c) below, a request for an exemption is made and granted by the SEF pursuant

to this Rule 4104. Any Person receiving such notice shall immediately take such steps as

may be necessary to liquidate such number of contracts as shall be determined by the

SEF in order to cause the aggregate positions of such accounts to comply with the

position limits and position accountability levels established pursuant to Rules 4101 and

4103. Notwithstanding the foregoing, the Persons may reduce the positions of such

accounts by a different amounts so long as after all reductions have been accomplished,

the positions comply with the position limits and position accountability levels

established pursuant to Rules 4101 and 4103.

(c) In the event a Person exceeds its position limit due to sudden unforeseen increases in its

bona fide hedging needs, such Person shall not be considered in violation of the SEF

Rules provided that such Person requests a hedge exemption to carry such increased

position within five (5) Business Days following the day on which the Person’s position

limit was exceeded and provided that such exemption is granted by the SEF.

(d) Subject to the foregoing provisions of this Rule 4104, in the event that a Person’s

position exceeds the position limits established pursuant to Rule 4101 or ordered by the

SEF such Person shall liquidate such amount of Swaps as the SEF shall direct in order to

eliminate the excess within such time as the SEF may prescribe and shall report to the

SEF when such liquidations have been completed. If a Person fails so to liquidate

contracts within the time prescribed by the SEF, then, in addition to any other actions the

SEF may take, the SEF may take such steps as it may deem necessary or appropriate to

liquidate such contracts on behalf and at the expense of such Person to the extent

necessary to eliminate such excess. Without limiting the generality of the foregoing, to

the extent applicable, the SEF may request the DCO to effect such liquidation in

accordance with rules of the DCO. In addition, the SEF in its discretion may require any

Person carrying an account for itself or a Customer or Client to obtain and hold

additional original margin in such amount and form and by such time as the SEF shall

specify until such excess has been eliminated.

Rule 4105 Prime Broker Transactions

(a) General.

(1) All Prime Broker Transactions shall be executed pursuant to this Rule 4105, in

addition to other applicable provisions of the SEF Rules.

(2) A Prime Broker and each of its Prime Broker Clients must be a Participant

approved by the SEF.

(3) Each Prime Broker Client may enter Prime Brokerage Orders and execute

Permitted Cross Transactions on the SEF in the name of and on behalf of the

relevant Prime Broker.

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(b) Prime Broker Obligations.

(1) Prime Broker Acknowledgment Letter. Each Participant that desires to transact

Prime Broker Transactions on the SEF as a Prime Broker Client shall cause its

Prime Broker to provide to the SEF an acknowledgement letter, in a form and

substance satisfactory to, and approved by, the SEF (a “Prime Broker

Acknowledgement Letter”) that the Prime Broker will, subject to the terms of its

Prime Broker Acknowledgement Letter, the Prime Broker’s right to cancel a

Prime Broker Transaction in accordance with the provisions of Rule 5103.E and

other applicable provisions of the SEF Rules, accept and be financially

responsible for all Prime Broker Transactions executed in its name by such

Participant.

(2) Cancellation of Designation of Prime Broker Client. The designation of a

Participant as a Prime Broker Client by a Prime Broker and the Prime Broker’s

obligations in respect of that Prime Broker Client shall continue in full force and

effect until cancelled or terminated by written notice (a “Cancellation Notice”) to

the SEF in accordance with the terms of the relevant Prime Broker’s Prime

Broker Acknowledgement Letter. Any such Cancellation Notice shall become

effective upon receipt by the SEF. No such termination or cancellation shall in

any manner affect the Prime Broker’s obligations and liabilities incurred by the

Prime Broker in respect of the relevant Prime Broker Client prior to the effective

date and time of the relevant Cancellation Notice.

(3) No Supervisory Responsibilities. A Prime Broker has no responsibility to

supervise any Prime Broker Client or any of such Prime Broker Client’s

Supervised Persons.

(4) Prime Broker Cancellation of Prime Broker Transactions. A Prime Broker shall

have the right to cancel a Prime Broker Transaction in accordance with the

provisions of Rule 5103.E within two (2) hours of the time that the SEF provides

the Prime Broker with a Confirmation of such Transaction in accordance with

Rule 4012.

(c) Prime Broker Client Obligations.

(1) In advance of submitting each Prime Brokerage Order and Permitted Cross

Transaction to the SEF pursuant to this Rule 4105, each Prime Broker Client shall

ensure the Prime Brokerage Order or Permitted Cross Transaction complies with

any relevant Prime Broker Limit then in effect.

(2) Upon receiving notice (whether from the SEF, its Prime Broker or otherwise) that

a Prime Broker has cancelled a Participant’s designation as a Prime Broker

Client, such Participant shall cancel any unfilled Prime Brokerage Orders and

Permitted Cross Transactions submitted in the name of and on behalf of the

relevant Prime Broker and shall not submit any additional Prime Brokerage

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Orders or Permitted Cross Transactions in the name of and on behalf of that

Prime Broker.

(d) Fees. Fees for Prime Broker Transactions will be charged to the relevant Prime Broker

Client, except for Prime Broker Transactions in which the relevant Prime Broker Client

transacts through an Introducing Broker, in which case fees for such Transaction will be

charged to the Prime Broker Client’s Introducing Broker.

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SECTION 5

CONDUCT OF PARTICIPANTS AND OTHER PERSONS

DUTIES AND OBLIGATIONS

Rule 5000 Duties and Responsibilities of Participants, Sponsored Participants,

Customers and Clients

Each Participant and Sponsored Participant shall (and shall cause all of its respective Supervised

Persons to) and each Customer and Client shall:

(a) use the SEF and effect Transactions in a responsible manner and not for any improper

purpose;

(b) use the SEF only to conduct permitted activity as determined by the SEF;

(c) comply with the SEF Rules and conduct all such activity in a manner consistent with the

SEF Rules and Obligations;

(d) comply with Applicable Law;

(e) settle all Transactions entered into on or pursuant to the SEF Rules;

(f) (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

activity on or through the SEF or any aspect of any business connected with or

concerning the SEF;

(g) (f) not knowingly mislead or conceal any material fact or matter in any dealings or filings

with the SEF or in response to any SEF Proceeding;

(h) (g) keep any User IDs, account numbers and passwords related to the SEF confidential;

(i) (h) employ practices to monitor and enforce compliance with risk limits established in

conformance with Applicable Law; and

(j) (i) keep, or cause to be kept, complete and accurate books and records in accordance with

Rule 8002.

Rule 5001 Required Disclosures to the SEF

(a) Each Participant, Sponsored Participant, Customer and Client shall immediately notify

the Market Regulation Department in writing at such time as it becomes aware of the

occurrence of any of the following events:

(1) any damage to, or failure or inadequacy of, the systems, facilities or equipment of

such Person to effect Transactions pursuant to the SEF Rules;

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(2) any failure to timely perform such Person’s financial obligations under or in

connection with Swaps of such Person (or Swaps of any Customer, Client or

Sponsored Participant of such Person, as applicable);

(3) any violation of Applicable Law in connection with such Person’s access to, or

activities on the SEF, including the requirements of the CFTC and, if applicable,

NFA;

(4) a Material Adverse Change in such Person’s financial condition or in the financial

condition of an Affiliate of such Person if such change materially impacts such

Person’s ability to satisfy its obligations under the SEF Rules;

(5) any refusal of admission of such Person to any other swap execution facility,

commodity or securities exchange, DCM, DCO, Self-Regulatory Organization or

other business or professional association, or withdrawal by such Person of any

application for participation or membership in any swap execution facility,

commodity or securities exchange, DCM, DCO, Self-Regulatory Organization or

other business or professional association;

(6) the indictment or conviction of, or any confession of guilt or plea of guilty or nolo

contendere by such Person (or, if applicable, any of its respective Supervised

Persons with access to the SEF) for any felony of any nature or misdemeanor

involving, arising from, or related to, the purchase or sale of any Swap or other

financial instrument, or involving or arising from moral turpitude,

misrepresentation, fraud, deceit, theft, embezzlement, gambling, conversion or

abuse of a fiduciary relationship;

(7) the issuance of a formal order of investigation (or its equivalent), or the

commencement, by the issuance or service of a written complaint (or its

equivalent), of any judicial, administrative or self-regulatory proceeding, as the

case may be, against such Person (or, if applicable, any of its respective

Supervised Persons) by the CFTC, the SEC, the securities commission or

equivalent authority of any state, territory, the District of Columbia or foreign

country, or any swap execution facility, commodity or securities exchange or

related clearing organization, DCM, DCO, any Self-Regulatory Organization or

other business or professional association;

(8) the bankruptcy or insolvency of such Person or any of its Affiliates; or

(9) any suspension, expulsion, bar, fine, censure, cease and desist order, temporary or

permanent injunction, denial of Trading Privileges or any other sanction or

discipline imposed on such Person (or, if applicable, any of its respective

Supervised Persons), whether through an adverse determination, voluntary

settlement or otherwise, by:

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(i) a swap execution facility, commodity or securities exchange, DCM, DCO,

Self-Regulatory Organization or other business or professional

association;

(ii) the SEC, the CFTC or the securities commission or equivalent authority of

any state, territory, the District of Columbia or foreign country; or

(iii) any federal court, state court, Government Agency not mentioned above

or quasi-governmental body.

(b) Each Participant, Sponsored Participant, Customer and Client shall notify the Market

Regulation Department in writing within ten (10) days of becoming aware of the

occurrence of any of the following events:

(1) any denial or withdrawal of any application for any registration or license with

respect to such Person (or, if applicable, any of its respective Supervised Persons)

by or from the SEC, the CFTC or the securities commission or equivalent

authority of any state, territory, the District of Columbia or foreign country, or

(2) the issuance of a bar by any agency of the United States from contracting with the

United States.

TRADING CONDUCT

Rule 5100 Abusive Trading Practices Prohibited

(a) No Participant or Sponsored Participant or any of its respective Supervised Persons, nor

any Customer or Client, 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, any of the following trading practices except as otherwise

authorized under the SEF Rules:

(1) front-runningparking;

(2) wash trading;

(2) (3) pre-arranged trading (it being understood that pre-arranged trading does not

include Transactions resulting from pre-execution communications to the extent

permitted by Rule 5203(b));

(3) adjusted trading or overtrading;

(4) fraudulent tradingfront-running;

(5) money passeswash trading;

(6) fictitiouscross transactions;

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(7) fictitious transactions;

(8) money passes;

(9) (7) non-competitive transactions (unless otherwise exempt or excluded pursuant

to the SEF Rules);

(10) (8) accommodation trading; or

(11) fraudulent trading; or

(12) (9) any other trading practices that the SEF or the CFTC deems to be abusive.

Additionally, no Participant or Sponsored Participant or any of its respective Supervised

Persons, nor any Customer or Client, shall knowingly execute or accommodate the

execution of any such activity by direct or indirect means.

(b) No Participant, Sponsored Participant, Customer or Client shall trade any Swap that is

not authorized to trade on the SEF.

Rule 5101 Good Faith Bids and Offers

A Participant or Sponsored Participant shall not knowingly enter, nor shall any Participant,

Sponsored Participant, Customer or Client, cause to be entered, bids or offers into the SEF other

than in good faith for the purpose of executing bona fide Transactions.

Rule 5102 Invalid Transactions

(a) A Transaction made or purported to be made on or pursuant to the rules of the SEF Rules

may be declared invalid by the SEF in the following circumstances:

(1) Unrepresentative Price. If, taking into consideration current market conditions,

the SEF determines that a Transaction has taken place at an unrepresentative

price, the SEF, at its absolute discretion, may declare such Transaction invalid.

The SEF may take into account such information as it deems appropriate when

determining whether to invalidate a Transaction, including, without limitation, the

following:

(i) price movement of other swap contracts with similar terms;

(ii) current market conditions, including levels of activity and volatility;

(iii) time period between different quotes and between quoted and traded

prices;

(iv) market or other information regarding price movement in related swap

contracts; or

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(v) manifest error.

(2) Breach of Applicable Law. If the SEF determines that a Transaction has been

made in breach of Applicable Law, the SEF may declare the Transaction invalid.

(b) When a Transaction is declared invalid by the SEF, the parties to the Transaction will be

notified by the SEF of that fact and a message will be broadcast through the SEF

announcing the Swap contract and price level of the invalid Transaction, and the invalid

Transaction may be displayed on the SEF as a cancelled Transaction.

Rule 5103 Trade Cancellation, Correction, Offset and Adjustment

Rule 5103.A. SEF Authority Regarding Trade Cancellation, Correction, Offset and

Adjustment

The SEF has authority to cancel, or adjust the price of, any Transaction executed on or pursuant

to the rules of the SEF Rules, or to execute or require the execution of a new or offsetting

Transaction:

(a) when the SEF determines in its sole discretion such action is necessary to mitigate market

disrupting events caused by the improper or erroneous use of the SEF or by system

defects;

(b) at any time the SEF determines in its sole discretion that allowing a Transaction to stand

as executed may have a material adverse effect on the integrity of the market;

(c) in accordance with Rule 4013.A. and this Rule 5103;

(d) where the Transaction was intended to be cleared and was submitted to a DCO via an

Affirmation Hub or other middleware provider but was not presented to the DCO for

clearing due to a post-execution processing issue;

(e) where the SEF determines in its sole discretion that a mistake occurred as a result of an

error by an Execution Specialist; or

(f) to comply with Applicable Law.

Rule 5103.B. Transaction Price Review

(a) Determination to Review a Transaction’s Price.

(1) The SEF may determine to review a Transaction’s price based on its independent

analysis of market activity or upon a Participant’s request (including a Participant

that is a Prime Broker Client).

(2) A Participant’s request for review must be made within ten (10) minutes of

execution the relevant Transaction and must include the USI for the Transaction

and a statement of the grounds for the review. In the absence of a timely request

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for review, the SEF may determine whether or not a Transaction will be subject to

review in its sole discretion. Notwithstanding the foregoing, subject to Applicable

Law, the SEF shall amend the terms of, or cancel, any Transaction that the

parties, together with the DCO, as applicable, mutually agree to amend or cancel,

even in the event that such amendment or cancellation is not submitted to the SEF

within the applicable review period specified above.

(b) Review of a Transaction’s Price.

(1) In reviewing a Transaction’s price, the SEF shall use good faith efforts to

determine the fair mid-market price for the Swap at the time the Transaction was

executed. The SEF may consider any relevant information, including, but not

limited to, the last transaction price of the Swap or a better bid/offer, a more

recent price for a different maturity date, the price of the same or related Swap

established in another venue or another market, the market conditions at the time

of the Transaction and the theoretical value of an option based on the most recent

implied volatility.

(2) Following the SEF’s determination of a Transaction’s fair mid-market price in

accordance with Rule 5103.B.(b)(1) above, the SEF shall have the right, in its

sole discretion, to cancel or adjust the price of such Transaction or to require the

entry into an offsetting Transaction; provided, however, that the SEF shall not

make any such cancellation or price adjustment or require the entry of an

offsetting Transaction if such action would, in the SEF’s sole discretion, (i)

adversely impact market integrity, (ii) facilitate market manipulation or other

illegitimate activity or (iii) otherwise violate the CEA, CFTC Regulations or the

SEF Rules.

(3) The method of adjustment or cancellation of any Cleared Swap that is adjusted or

cancelled shall be the method provided for by the rules and procedures of the

relevant DCO.

Rule 5103.C. Review of Transactions for Errors

(a) If a Participant, Sponsored Participant, Client or Customer believes that any Transaction

was incorrectly executed, cleared or rejected from clearing as a result of an Error (as

defined in Rule 5103.C.(f) below), such Person may, within ten (10) minutes thereafter,

request a review of the Transaction by providing the USI for the Transaction and stating

the grounds for the disagreement.

(b) Upon timely receipt by the SEF of a request for a Transaction review in accordance with

Rule 5103.C.(a) above, or if the SEF determines on its own initiative to conduct such a

review, the SEF will review its electronic audit trail and other relevant records to

determine if an Error occurred. If the request for review is not timely, the SEF may, in its

sole discretion, perform a review of the Transaction.

(c) If the review described in this Rule 5103.C. reveals that the Transaction was incorrectly

executed, cleared or rejected from clearing as a result of an Error, the SEF may cancel or

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adjust the Transaction, or execute or require the execution of a new or offsetting

Transaction (in accordance with the procedures specified in Rule 4013.A. for Cleared

Swaps), as appropriate; provided, however, that the SEF shall not take any action

pursuant to this Rule 5103.C.(c) if such action would, in the SEF’s sole discretion, (i)

adversely impact market integrity, (ii) facilitate market manipulation or other illegitimate

activity or (iii) otherwise violate the CEA, CFTC Regulations or the SEF Rules.

(d) If the review described in this Rule 5103.C. reveals that the Transaction was not

incorrectly executed, nor cleared or rejected from clearing as a result of an Error, then no

adjustment shall be made.

(e) If a Transaction is reviewable for price under Rule 5103.B., the procedures of this Rule

5103.C. shall not apply. For the avoidance of doubt, if a Transaction was correctly

executed but the reporting to the SDR was in error, Rule 8005 shall apply and this Rule

5103.C. shall not apply.

(f) For purposes of this Rule 5103.C., an “Error” shall mean the occurrence of any of the

following:

(1) A mistake made as the result of a malfunction of the SEF or human error,

including a mistake made by an Execution Specialist;

(2) An Order was incorrectly displayed and/or executed;

(3) A clerical or operational error or omission made by the SEF or a Participant

(including a Prime Broker Client), Sponsored Participant, Client or Customer (or

any agent of any of the foregoing) that caused a transaction to be rejected from

clearing and void ab initio;

(4) A Clearing Firm or DCO rejected a leg of a Package Transaction for clearing

because of the sequencing of submission for clearing of the legs of the applicable

Package Transaction; or

(5) Where a Transaction was intended to be cleared and was submitted to a DCO via

an Affirmation Hub or other middleware provider but was not presented to the

DCO for clearing due to a post-execution processing issue.

Rule 5103.D. Records and Reporting of Cancellations and Price Adjustments

(a) Cancelled Transactions and any prices that have been adjusted shall be cancelled in the

SEF’s official records.

(b) Transactions that have had their price adjusted shall be reflected in the SEF’s official

records at the adjusted price.

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(c) If a Transaction is either cancelled or adjusted pursuant to Rule 5103, the SEF shall

submit a cancellation or correction of the Transaction to the same SDR to which the

Transaction was previously reported.

Rule 5103.E. Cancellation of Prime Brokerage Transactions

(a) Subject to Rule 4105(b)(4), a Prime Broker shall have the right to cancel any Prime

Broker Transaction within two (2) hours of the time that the SEF provides the Prime

Broker with a Confirmation of such Transaction in accordance with Rule 4012 (i) that is

executed in breach of a Prime Broker Limit; (ii) that was executed by a Person that was

not authorized by the Prime Broker; or (iii) that was executed for an unauthorized

product. The Prime Broker shall communicate the cancellation directly to the SEF and

indicate the reason for the cancellation. The SEF shall be entitled to rely on the Prime

Broker’s statement that any such grounds exist without inquiry and shall have no liability

to the Prime Broker, the Prime Broker Client, or the counterparty to the cancelled

Transaction or any other party in so doing.

(b) If any Prime Broker Transaction is cancelled by the SEF pursuant to the provisions of

this Rule 5103.E., the Prime Broker, the Prime Broker Client and the counterparty shall

be liable for payments in respect of such cancellation in accordance with the terms of

their agreements or as they may otherwise agree. The SEF shall have no involvement in

determination of any such payments.

(c) Notwithstanding anything to the contrary in the SEF Rules, the SEF shall have the right,

in its sole discretion, to suspend, revoke, limit, condition, restrict or qualify the ability of

any Participant to transact on the SEF as a Prime Broker or Prime Broker Client

following the use of the cancellation right in 5103.E.(a).

(d) Nothing in this Rule 5103.E shall restrict the rights of a Prime Broker Client to request a

review of a Prime Broker Transaction pursuant to the other provisions of Rule 5103.

Rule 5104 Misuse of the SEF

Misuse of the SEF is strictly prohibited. It shall be a violation of the SEF Rules for any Person to

willfully or negligently engage in unauthorized access to the SEF, to assist any Person in

obtaining unauthorized access to the SEF, to trade on the SEF without the authorization of a

Participant, to alter the equipment associated with the SEF, to interfere with the operation of the

SEF, to use or configure a component of the SEF in a manner that does not conform to the SEF

Rules, to intercept or interfere with information provided on or through the SEF, or in any way

to use the SEF in a manner contrary to the SEF Rules.

VIOLATIONS

Rule 5200 Rule Violations

(a) It shall be a violation for a Participant, Sponsored Participant, Customer or Client or any

Supervised Person to violate any SEF Rule, to breach any agreement made with the SEF,

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to violate Applicable Law, or to engage in fraud, dishonorable conduct, or in conduct

which is inconsistent with just and equitable principles of trade.

(b) Participants, Sponsored Participants, Customers and Clients and Supervised Persons shall

assist the SEF in any investigation into potential violations of Applicable Law. Such

assistance must be timely and may include, but not be limited to, requiring any

Participant, Sponsored Participant, Client, Customer or Supervised Person to produce

documents, to answer questions from the SEF or its designee, and/or to appear in

connection with an investigation.

(c) If a Participant, Sponsored Participant, Customers or Client has actual or constructive

notice of a violation in connection with the use of the SEF by a Participant, Sponsored

Participant, Client, Customer or Supervised Person and such Person fails to notify the

Market Regulation Department within a reasonable time, such Person may be found to

have committed an act detrimental to the interest or welfare of the SEF.

Rule 5201 Fraudulent Acts Prohibited

No Participant, Sponsored Participant, Customer or Client (or any Supervised Persons) shall

engage in, or attempt to engage in, any fraudulent act or engage in, or attempt to engage in, any

scheme to defraud, deceive, trick or mislead in connection with or related to any SEF activity.

Rule 5202 [Reserved]

Rule 5203 Fictitious or Wash Transactions; Permitted Pre-Execution Communications

(a) No Participant, Sponsored Participant, Customer or Client (or any Supervised Persons)

shall create fictitious transactions or wash transactions. No Person shall place or accept

Orders in the same Swap 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 shall knowingly execute or accommodate the execution of

such Orders by direct or indirect means.

(b) Participants, Sponsored Participants, Customers and Clients (and any of their Supervised

Persons) may engage in pre-execution communications (including communications with

respect to Orders) relating to:

(1) Permitted Cross Transactions;

(2) Block Trades executed pursuant to Rule 4016;

(3) Transactions executed pursuant to the procedures specified in Rule 4013.A.(e)

and (f);

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(4) Package Transactions (Order Book Exempt); and

(5) Required Cross Transactions;

provided that with respect to any pre-execution communications permitted by (1) through

(5) above:

(i) the parties to the pre-execution communications do not disclose to a nonparty the details of such communications or use the information obtained

in a manner contrary to Applicable Law, and

(ii) the requirements of Rule 4011 are satisfied to the extent applicable.

Nothing contained in this Rule 5203(b) shall prevent a Person from disclosing

information as may be required by legal process (including subpoena or demand for

productions) or to such Person’s agents or advisors (including, but not limited to,

accountants and auditors and legal counsel).

Rule 5204 Market Disruptions Prohibited

Orders entered into the SEF for the purpose of upsetting the equilibrium of the market in any

Swap or creating a condition in which prices do not or will not reflect fair market values are

prohibited, and any Participant, Sponsored Participant, Customers or Client (or any of their

respective Supervised Persons) who makes or assists in entering any such Order with knowledge

of the purpose thereof or who, with such knowledge, in any way assists in carrying out any plan

or scheme for the entering of any such Order, will be deemed to have engaged in an act

detrimental to the SEF in violation of this Rule 5204.

Rule 5205 Market Manipulation Prohibited

No Participant, Sponsored Participant, Customer or Client (or any of their respective Supervised

Persons) shall attempt to manipulate or manipulate the price of any Swap including, without

limitation, cornering, “front-running”, “money passes”, trading ahead or against

customerCustomer Orders, combination or improper cross trading involving, for example and

without limitation, a short term riskless transaction taking advantage of an incoming Order or the

offset of a prior position to avoid an adverse market move.

Rule 5206 Disruptive Trading Practices Prohibited

No Participant, Sponsored Participant, Customer or Client (or any of their respective Supervised

Persons) shall engage in any trading, practice or conduct that constitutes a “disruptive trading

practice,” as such term is defined by the Section 4c(a)(5) of the CEA (7 U.S.C. § 6c(a)(5)) or the

related CFTC Regulations.

Rule 5207 Prohibition of Misstatements

No Participant, Sponsored Participant, Customer or Client (or any of their respective Supervised

Persons) shall make any knowing misstatement of a material fact to the SEF, any SEF Official,

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any Board committee or SEF Panel, any agent of the SEF (including the Regulatory Services

Provider) or any Participant, Sponsored Participant, Customer, Client or Supervised Person. All

swap data or other information submitted from time to time by any Participant, Sponsored

Participant, Customer or Client (or any of their respective Supervised Persons) to the SEF, or by

the SEF on behalf of any such Person, to any Clearing Firm, Affirmation Hub, DCO or SDR,

shall be accurate and complete in all material respects as of the time submitted.

Rule 5208 Acts Detrimental to the SEF Prohibited

No Participant, Sponsored Participant, Customer or Client (or any of their respective Supervised

Persons) shall engage in any act that is detrimental to the SEF.

Rule 5209 Adherence to Law

No Participant, Sponsored Participant, Customer or Client (or any of their respective Supervised

Persons) shall engage in conduct that is a violation of the Applicable Law.

Rule 5210 Communications with the Public and Promotional Material

Promotional material and similar information issued by Participants shall comply with

Applicable Law.

SUPERVISION

Rule 5300 Duty to Supervise

Each Participant shall establish, maintain and administer reasonable supervisory procedures to

monitor the compliance of its Supervised Persons with the SEF’s Rules and any applicable

provisions of the CEA or CFTC Regulations and such Participant may be held accountable for

the actions of such Supervised Persons. As set forth in Rule 4105(b)(3), a Prime Broker shall

have no responsibility to supervise any Prime Broker Client or any of such Prime Broker

Client’s Supervised Persons.

INSPECTIONS

Rule 5400 Inspections by the SEF

(a) The SEF and the Regulatory Services Provider (and their respective authorized

representatives), shall have the right, in connection with determining whether all

Obligations are being, will be, or have been complied with by a Participant, Sponsored

Participant, Customer or Client, in accordance with Applicable Law:

(1) inspect books and records, systems, equipment and software operated by such

Person in connection with any SEF activity, wherever located;

(2) access the systems, equipment, software and the premises on which the systems,

equipment and software are located and any data stored in any of the systems or

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equipment, during the regular business hours and the Trading Hours of the SEF

without prior notice to such Person; and/or

(3) remove, copy or reproduce any data to which the SEF has access under the SEF

Rules.

(b) Each such Person shall provide the Regulatory Services Provider with the same access to

its books and records and offices as it is required to provide the SEF under the SEF Rules

and Applicable Law.

(c) The Market Regulation Department may require a Participant to furnish (periodically or

on a particular occasion) information concerning the Participant’s activity on the SEF.

For a Participant, such information includes but is not limited to, the Participant’s open

trading positions or Swaps to which the Participant is a party.

(d) The SEF shall provide prior notice to a Person in the event of an inspection that has been

prescheduled by the SEF.

INFORMATION SHARING

Rule 5500 Information-Sharing

(a) The SEF may enter into information-sharing agreements or other arrangements or

procedures to establish and enforce rules that will allow the SEF to obtain any necessary

information to perform any monitoring of trading and trade processing, provide

information to the CFTC upon request and that allow the SEF to carry out such

international information-sharing agreements as the CFTC may require. As part of any

information- sharing agreements or other arrangements or procedures adopted pursuant to

this Rule 5500, the SEF may:

(1) provide market surveillance reports to other markets;

(2) share information and documents concerning current and former Participants with

other markets;

(3) share information and documents concerning ongoing and completed

investigations with other markets; and/or

(4) require its current or former Participants, or their Sponsored Participants,

Customers or Clients, to provide information and documents to the SEF at the

request of other markets with which the SEF has an information- sharing

agreement or other arrangements or procedures.

(b) The SEF may enter into any arrangement with any Person or body (including, without

limitation, the CFTC, the NFA, any Self-Regulatory Organization, any exchange, market,

Swap Data Repository, reporting services or clearing organization or foreign regulatory

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authority) if the SEF considers such arrangement to be in furtherance of the SEF’s

purpose or duties under Applicable Law.

(c) The SEF may disclose to any Person or entity information concerning or associated with

a Participant or other Person where the SEF believes such disclosure is reasonably

necessary and appropriate in exercising a legal or regulatory function.

(d) Participants, Sponsored Participants, Customers and Clients shall provide the SEF any

requested information pursuant to the SEF Rules or Applicable Law as necessary for the

SEF to perform any of the functions described in these SEF Rules.

FINANCIAL REQUIREMENTS

Rule 5600 Minimum Financial and Related Reporting Requirements

(a) Each Participant that is registered with any Government Agency, including the CFTC

and the SEC, or a Self-Regulatory Organization shall comply with the provisions of

Applicable Law, including, but not limited to, the rules and regulations such Government

Agency or Self-Regulatory Organization imposes on a Participant relating to minimum

financial and related reporting and recordkeeping requirements.

(b) Each Participant shall qualify as an ECP and undertake to timely update any change to

the Participant’s status as an ECP.

(c) A copy of any notice or written report that a Participant is required to file with the CFTC

pursuant to CFTC Regulation 1.12 shall be concurrently provided to the SEF.

(d) A Participant who is subject to and violates CFTC Regulations 1.10, 1.12, 1.17 or 1.18

shall be deemed to have violated this Rule 5600.

Rule 5601 Confidentiality of Financial and Other Information

All information and data obtained or received by the Market Regulation Department from

inspections of accounting and other records, quarterly balance sheets and declarations or reports

on financial condition will be treated as confidential by the SEF; however, this Rule 5601 does

not supplant Rule 5500 and the SEF Rules in Section 7, Applicable Law, or any other

requirement of legal process or law.

Rule 5602 Authority to Impose Restrictions

Whenever a Participant is subject to the early warning requirements set forth in CFTC

Regulation 1.12, the SEF may impose such conditions or restrictions on the business and

operations of such Participant as the SEF may deem necessary or appropriate for the protection

of customers, other Participants, or the SEF.

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Rule 5603 Additional Disclosure Requirements

Each Participant must comply with all disclosure requirements set forth in applicable CFTC and

Self-Regulatory Organization rules and regulations. Any such disclosure may be combined with

a disclosure regarding the existence of financial interests held by the Participant in the SEF or

any other exchange.

MISCELLANEOUS

Rule 5700 Gifts and Gratuities

Participants shall maintain and enforce gifts policies and procedures to prevent gifts in excess of

one hundred dollars ($100) to Directors, Officers and SEF employees.

Rule 5701 Anti-Money Laundering and Anti-Terrorism

It is SEF policy: (1) not to engage in or knowingly assist any money laundering or other illicit

business, and (2) not to engage in or knowingly assist, or be a conduit for, terrorist financing.

Participants will be required to provide sufficient information for Participants and their

Customers or Clients, if applicable, for SEF to conduct restricted list searches, including, but not

limited to, searches against the Specially Designated Nationals and Blocked Persons list

maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury.

Rule 5702 Market Data

(a) All Participants, Sponsored Participants, Customers and Clients and all Supervised

Persons, agents, vendors, and other Persons affiliated with the foregoing understand and

acknowledge that the SEF has a proprietary interest in:

(1) the price and quantity data from each and every Transaction executed on the SEF

or subject to the SEF Rules, including the time at which the Transaction was

executed on, or submitted to, the SEF;

(2) the price and quantity data for each and every Order or Block Trade submitted to

the SEF, including the time at which the Order was entered;

(3) the yield curves and reference prices prepared by the SEF;

(4) any data and information derived from (1), (2) and (3) and the format and

presentation thereof (except a Participant’s confidential information or data); and

(5) the transmissions and dissemination of the data and information to Participants,

any publisher of the data or information with whom the SEF has a written

agreement, and any other Persons.

(b) Except with respect to such Person’s confidential information or data, Participants,

Sponsored Participants, Customers and Clients and Supervised Persons may not

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distribute, sell or retransmit any other information displayed on the SEF to any third

party without the express written consent of the SEF.

(c) The SEF may at any time restrict or establish utilization fees in respect of data described

in Rule 5702(a) with respect to all or any Participants, Sponsored Participants, Customers

or Clients in order to safeguard the security or operations of the SEF or to preserve

market integrity, fair and orderly trading, or if otherwise in the public interest, provided,

however, that view-only access is provided free-of-charge.

Rule 5703 Extension or Waiver of SEF Rules

If necessary and expedient, the SEF may, in its sole discretion, waive, or extend the time period

for performing, any act or acts designated by the SEF Rules, but only to the extent such waiver

or extension is not inconsistent with the CEA or the CFTC Regulations.

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SECTION 6

ENFORCEMENT OF RULES AND

DISCIPLINARY PROCEEDINGS

Rule 6000 General

(a) All Participants, Sponsored Participants, Account Managers, Authorized Traders, Clients,

Customers, Supervised Persons and any other Person using a User ID of a Participant or

login credentials linked to a Participant or User ID shall be subject to the SEF’s

jurisdiction. Any Participant, Sponsored Participant, Account Manager, Authorized

Trader, Client, Customer, Supervised Person or other Person using a User ID of a

Participant or login credentials linked to a Participant or User ID is subject to this

Section 6 if such Person is alleged to have violated, to have aided and abetted a violation,

to be violating, or to be about to violate, any SEF Rule or any other provision of

Applicable Law for which the SEF has disciplinary jurisdiction.

(b) The SEF, through its Market Regulation Department, Review Panels, Disciplinary Panels

and Appeals Panels will conduct inquiries, investigations, disciplinary proceedings and

appeals from disciplinary proceedings, summary impositions of fines, summary

suspensions or other summary actions in accordance with this Section 6.

(c) The SEF and its Regulatory Services Provider are parties to a Regulatory Service

Agreement as referenced in Rule 2600, pursuant to which the Regulatory Services

Provider has agreed to perform certain regulatory services described in this Section 6 on

behalf of SEF. The SEF Rules that refer to the SEF, SEF staff, the Market Regulation

Department and other SEF departments should be understood as also referring to the

Regulatory Services Provider, the Regulatory Services Provider staff and the Regulatory

Services Provider departments acting on behalf of SEF pursuant to the Regulatory

Services Agreement. Notwithstanding the fact that the SEF has entered into the

Regulatory Services Agreement with its Regulatory Services Provider to perform some of

the SEF’s functions, the SEF shall retain ultimate legal responsibility for, and control of,

such functions.

(d) No SEF Official will interfere with or attempt to influence the process or resolution of a

Disciplinary Action except to the extent provided under the SEF Rules with respect to a

proceeding in which the SEF Official is a member of the relevant panel.

(e) Any Participant, Sponsored Participant, Account Manager, Authorized Trader, Client,

Customer or Supervised Person may be represented by counsel during any Disciplinary

Action pursuant to this Section 6.

(f) The SEF may hold a Participant or any Customer or Client liable for, and impose

sanctions against such Participant, Customer or Client, for such Participant’s, Customer’s

or Client’s own acts and omissions that constitute a violation as well as for, in the case of

a Participant, the acts and omissions of each (A) Authorized Trader of such Participant,

(B) other Supervised Person of such Participant, (C) other Person using a User ID of such

Participant or login credentials linked to the Participant or User ID, (D) agent or

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representative of such Participant, in each case, that constitute a violation as if such

violation were that of the Participant, or (E) Sponsored Participant, Client or Customer of

such Participant.

(g) The SEF may hold an Authorized Trader liable for, and impose sanctions against such

Authorized Trader for, such Authorized Trader’s own acts and omissions that constitute a

violation as well as or for the acts and omissions of any agent or representative of such

Authorized Trader that constitute a violation as if such violation were that of the

Authorized Trader.

Rule 6001 Inquiries and Investigations

(a) The Market Regulation Department shall investigate potential or alleged violations of the

SEF Rules. The Market Regulation Department will commence an investigation (i) upon

the receipt of a request from CFTC staff or (ii) upon the discovery or receipt of

information that, in the judgment of the Market Regulation Department, indicates a

reasonable basis for finding that a violation may have occurred or will occur. The Market

Regulation Department will determine the nature and scope of its inquiries and

investigations and will function independently of any commercial interests of the SEF.

(b) The Market Regulation Department may:

(1) initiate and conduct inquiries and investigations, and engage such third-party

advisors, include legal counsel, as it deems appropriate;

(2) prepare Investigation Reports and make recommendations concerning initiating

disciplinary proceedings;

(3) prosecute alleged violations within the SEF’s disciplinary jurisdiction; and

(4) represent the SEF on summary imposition of fines, summary suspension or other

summary action.

(c) Each Clearing Firm, Participant, Sponsored Participant, Account Manager, Authorized

Trader, Customer, Client and Supervised Person and any other Person that is subject to

the SEF’s jurisdiction:

(1) is obligated to appear and testify and respond in writing to interrogatories within

the time period required by the SEF in connection with:

(i) any SEF Rule or any other provision of Applicable Law for which the SEF

has disciplinary jurisdiction;

(ii) any Disciplinary Action; or

(iii) any preparation for and presentation during a Disciplinary Action;

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(2) is obligated to produce books, records, papers, documents or other tangible

evidence in its, his or her possession, custody or control within the time period

required by the SEF in connection with:

(i) any SEF Rule or any other provision of Applicable Law for which the SEF

has disciplinary jurisdiction;

(ii) any situation in which such books, records, papers, documents or other

tangible evidence would be useful to the SEF in determining if a violation

of a SEF Rule has occurred;

(iii) any Disciplinary Action; or

(iv) any preparation for and presentation during a Disciplinary Action; and

(3) may not impede or delay any Disciplinary Action.

(d) Each investigation must be completed in a timely manner. Absent mitigating factors, a

timely manner is no later than twelve (12) months after the date that an investigation is

opened. Mitigating factors that may reasonably justify an investigation taking longer than

twelve (12) months to complete include the complexity of the investigation, the number

of firms or individuals involved as potential wrongdoers, the number of potential

violations to be investigated, and the volume of documents and data to be examined and

analyzed by the Market Regulation Department.

Rule 6002 Reports of Investigations

(a) The Market Regulation Department will maintain a log of all investigations and the

disposition of each. The Market Regulation Department will prepare an Investigation

Report, regardless of whether the evidence gathered during any inquiry or investigation

forms a reasonable basis to believe that a violation within the SEF’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) The Investigation Report will include the reasons for initiating the investigation

(including a summary of the complaint, if any), all relevant facts and evidence gathered,

Market Regulation Department’s analysis and conclusions, the potential respondent’s

disciplinary history at the SEF, and the recommendation of the Market Regulation

Department. For each potential respondent, the Market Regulation Department will

recommend:

(1) closing the investigation without further action;

(2) settlement;

(3) summary action;

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(4) the preparation and service of a Notice of Charges for initiating a disciplinary

proceeding;

(5) resolving the investigation through an informal disposition, including the issuance

of a warning letter (an informal disposition (including the issuance of a warning

letter) will not constitute a finding of a violation or a sanction);

(6) forwarding the Investigation Report to a Review Panel as discussed in Rule 6004;

or

(7) in the case of one of the violations described in Rule 6016(a)(1) through (4),

forwarding the Investigation Report to the Regulatory Oversight Committee for

determination regarding whether to impose a summary fine under Rule 6016.

(c) After reviewing the Investigation Report, the Chief Compliance Officer will:

(1) proceed with the Market Regulation Department’s recommendation;

(2) forward the Investigation Report to a Review Panel as discussed in Rule 6004; or

(3) in the case of one of the violations described in Rule 6016(a)(1) through (4),

forward the Investigation Report to the Regulatory Oversight Committee for

determination regarding whether to impose a summary fine under Rule 6016.

Rule 6003 Opportunity to Respond

(a) If the Review Panel authorizes disciplinary proceedings or the Chief Compliance Officer

determines to proceed with the Market Regulation Department’s recommendation to

initiate disciplinary proceedings, the Market Regulation Department will notify each

potential respondent that the Market Regulation Department or Review Panel has

recommended formal disciplinary charges against the potential respondent.

(b) The SEF 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

Market Regulation Department.

Rule 6004 Review of Investigation Reports

(a) The Chief Compliance Officer may, in his/her discretion, convene a Review Panel to

review the Investigation Report.

(b) The Review Panel shall be appointed by the Chief Compliance Officer or the SEF’s

Regulatory Services Provider and shall be comprised of three individuals, at least two of

whom would not be disqualified from serving as Public Directors. Each Review Panel

must include members who have had relevant experience in some capacity (whether as a

current or former employee, officer, director, principal, consultant, advisor, service

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provider or otherwise) working with or for sufficient different Membership Interests so as

to ensure fairness and to prevent special treatment or preference for any Person in the

conduct of the Review Panel’s responsibilities, and no member of the Review Panel may

be involved in the adjudication of any other stage of the same proceeding. If a vacancy

occurs on a Review Panel after it has begun a proceeding, the remaining members of the

panel shall complete consideration and disposition of the matter. Once the Review Panel

has provided its decision, it shall be dissolved automatically.

(c) The Review Panel will review the Investigation Report and any reports of additional

investigation or evidence provided by the Market Regulation Department pursuant to

Rule 6004(c)(1) below and, within thirty (30) days of receiving the Investigation Report

or report of additional investigation or evidence, as applicable, will take one of the

following actions:

(1) If the Review Panel determines that additional investigation or evidence is

needed, it will promptly direct the Market Regulation Department to conduct

further investigation or obtain additional evidence.

(2) If the Review Panel determines that no reasonable basis exists for finding a

violation of the SEF Rules or any other provision of Applicable Law for which

the SEF has disciplinary jurisdiction has occurred or is about to occur or that

adjudication is otherwise unwarranted, it may direct that no further action be

taken. Such determination will be in writing, and will include the reason the

investigation was initiated, a summary of the complaint, a written statement

setting forth the facts and analysis supporting the decision and, if applicable, any

recommendations. The Review Panel shall also provide the written statement to

any applicable Regulatory Services Provider.

(3) If the Review Panel determines that a reasonable basis exists for finding a

violation of the SEF Rules or any other provision of Applicable Law for which

the SEF has disciplinary jurisdiction has occurred or is about to occur and

adjudication is warranted, the Review Panel will determine for each potential

respondent whether to authorize:

(i) the informal disposition of the investigation (by issuing a warning letter or

otherwise) because disciplinary proceedings are unwarranted, in which

case the Review Panel shall provide a written explanation to any

Regulatory Services Provider;

(ii) the closing of the investigation without any action because no reasonable

basis exists to believe that a violation within the SEF’s jurisdiction has

occurred or is about to occur in which case the Review Panel shall provide

a written explanation to any Regulatory Services Provider; or

(iii) the commencement of disciplinary proceedings because a reasonable basis

exists to believe that a violation within the SEF’s jurisdiction has occurred

or is about to occur.

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(d) A failure of the Review Panel to act within the time prescribed above shall not prevent

the appointment of a Disciplinary Panel. The Chief Compliance Officer shall inform the

ROC of any such failure of the Review Panel to act. The ROC shall, within thirty (30)

days of the date by which the Review Panel was required to act review the failure and

take appropriate action and may itself take any of the actions which the Review Panel

could have taken under Rule 6004(c), including appointment of a Disciplinary Panel.

Rule 6005 Notice of Charges

(a) If the Review Panel (or the ROC in the event of a failure of the Review Panel to act

within the requisite time period) authorizes disciplinary proceedings or the Chief

Compliance Officer elects to follow the recommendation of the Market Regulation

Department to commence a disciplinary proceeding, the Chief Compliance Officer will

appoint a Disciplinary Panel as provided in Rule 6009. In addition, the Market

Regulation Department will prepare, and serve in accordance with Rule 6007, a notice of

charges (a “Notice of Charges”).

(b) A Notice of Charges will:

(1) state the acts, practices or conduct that the respondent is alleged to have engaged

in;

(2) state the SEF Rule or other provision of Applicable Law alleged to have been

violated or about to be violated;

(3) state the proposed sanctions;

(4) advise the respondent of its right to a hearing;

(5) advise the respondent of its right to be represented by legal counsel of its

choosing in all succeeding stages of the disciplinary process;

(6) state the period of time within which the respondent can request a hearing on the

Notice of Charges, which will not be less than twenty (20) days after service of

the Notice of Charges;

(7) advise the respondent that any failure to request a hearing within the period

stated, except for good cause, will be deemed to constitute a waiver of the right to

a hearing; and

(8) advise the respondent that any allegation in the Notice of Charges that is not

expressly denied or answered will be deemed to be admitted.

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Rule 6006 Answer to Notice of Charges

(a) If the respondent determines to answer a Notice of Charges, the respondent must file

answers within twenty (20) days after being served with such notice, or within such

longer time period determined by the Disciplinary Panel in accordance with Rule 6012.

(b) To answer a Notice of Charges, the respondent must in writing:

(1) specify the allegations that the respondent denies or admits;

(2) specify the allegations that the respondent does not have sufficient information to

either deny or admit;

(3) specify any specific facts that contradict the Notice of Charges;

(4) specify any affirmative defenses to the Notice of Charges; and

(5) sign and serve the answer on the Disciplinary 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

general denial by the respondent, without more, will not satisfy the foregoing

requirements.

Rule 6007 Service of Notice of Charges

(a) Any Notice of Charges or other documents to be served pursuant to this Section 6 may be

served on the respondent personally or may be served (and service shall be deemed

complete) by leaving the same at his or her place of business, by entrusting the same to

reputable overnight courier for tracked delivery, or by depositing the same in the United

States mail, postage prepaid, via registered or certified mail, in either case addressed to

respondent at the address as it appears on the books and records of the SEF.

(b) Any Notice of Charges or other documents contemplated to be served pursuant to this

Section 6 may also be served upon the respondent and service shall be deemed complete

via electronic mail to the electronic mail address as it appears on the books and records of

the SEF.

Rule 6008 Settlement Offers

(a) A respondent or potential respondent may, at any time after completion of an

Investigation Report and before disciplinary proceedings have concluded, propose in

writing an offer of settlement related to anticipated or instituted disciplinary proceedings.

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(b) Any offer of settlement should contain proposed findings and sanctions and be signed by

the respondent or potential respondent and submitted to the Market Regulation

Department.

(c) A respondent or potential respondent may offer to settle disciplinary proceedings without

admitting or denying the findings contained in the Notice of Charges but must accept the

jurisdiction of the SEF over it and over the subject matter of the proceedings and consent

to the entry of the findings and sanctions imposed.

(d) If a respondent or potential respondent submits an offer of settlement in accordance with

Rule 6008(a) above, the Market Regulation Department will forward the offer to the

Chief Compliance Officer and the Chief Compliance Officer will in turn forward the

offer to the Disciplinary Panel with a recommendation on whether to accept or reject the

offer.

(e) If an offer of settlement is forwarded to it pursuant to Rule 6008(d) above, the

Disciplinary Panel must review the offer of settlement within ninety (90) Business Days

after receipt of the offer of settlement by the Chief Compliance Officer unless an

extension has been agreed by the respondent in writing. The Disciplinary Panel may

accept the offer of settlement, but may not alter the terms of a settlement offer unless the

respondent agrees. A Disciplinary Panel, in its discretion, may permit the respondent to

accept a sanction without admitting or denying the rule violation on which the sanction is

based.

(f) If an offer of settlement is accepted by the Disciplinary Panel, it shall issue a written

decision specifying:

(1) the rule violations it has reason to believe were committed, including the basis or

reasons for the panel’s conclusions;

(2) any sanction to be imposed, which must include full customer restitution where

customer harm is demonstrated, except where the amount of restitution or to

whom it should be provided cannot be reasonably determined; and

(3) if applicable, that the respondent has accepted the sanctions imposed without

either admitting or denying the rule violations.

(g) In the event that the Disciplinary Panel accepts an offer of settlement without the

agreement of the Chief Compliance Officer, the Disciplinary Panel’s written decision

must adequately support such acceptance.

(h) If an offer of settlement is accepted and the related decision becomes final, the

respondent’s submission of the offer will be deemed to constitute a waiver of the right to

notice, opportunity for a hearing and review and appeal under the SEF Rules.

(i) The respondent may withdraw his, her or its offer of settlement at any time before final

acceptance by the Disciplinary Panel. If an offer is withdrawn after submission, or is

rejected by the Disciplinary Panel, the respondent must not be deemed to have made any

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admissions by reason of the offer of settlement and must not be otherwise prejudiced by

having submitted the offer of settlement.

(j) If the offer of settlement of a respondent or potential respondent is not accepted by the

Disciplinary Panel, fails to become final or is withdrawn by the respondent or potential

respondent, 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 Market Regulation Department may use an unaccepted offer

of settlement as an admission or in any other manner at a hearing of disciplinary

proceedings.

Rule 6009 Disciplinary Panel

(a) The Chief Compliance Officer or the SEF’s Regulatory Services Provider will appoint a

Disciplinary Panel (a) 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 and/or (b) to review any offer of settlement made by a

respondent or potential respondent after completion of an Investigation Report. The

Disciplinary Panel will be comprised of three individuals, at least two of whom would

not be disqualified from serving as Public Directors. In addition, each Disciplinary Panel

must include members who have had relevant experience in some capacity (whether as a

current or former employee, officer, director, principal, consultant, advisor, service

provider or otherwise) working with or for sufficient different Membership Interests so as

to ensure fairness and to prevent special treatment or preference for any Person in the

conduct of the Disciplinary Panel’s responsibilities. A Disciplinary Panel may not

include any members of the SEF’s compliance staff or any Person involved in

adjudicating any other stage of the same proceeding. If a vacancy shall occur on a

Disciplinary Panel after it has begun its proceedings, the remaining members shall

complete consideration and disposition of the matter. Once a Disciplinary Panel has made

its decision and notified all relevant parties, it shall be dissolved automatically. The chair

of the Disciplinary Panel shall be appointed by the Chief Compliance Officer.

(b) Within ten (10) days of being notified of the appointment of the Disciplinary Panel, a

respondent may seek to disqualify any individual named to the Disciplinary Panel for the

reasons identified in the SEF Rules or for any other reasonable grounds by serving

written notice on the Chief Compliance Officer. By not timely filing a request for

disqualification, the respondent will be deemed to have waived any objection to the

composition of a Disciplinary Panel. The Chief Compliance Officer, in consultation with

the General Counsel, of the SEF 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.

(c) No Person shall serve on a Disciplinary Panel unless that Person has agreed in writing

that he or she will not publish, divulge, or make known in any manner, any facts or

information regarding the business of any Person or any other information which may

come to his attention in his official capacity as a member of the Disciplinary Panel,

except when reporting to the Board or to a committee concerned with such information or

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to the Market Regulation Department, when requested by the CFTC or other Government

Agency or when compelled to testify in any judicial or administrative proceeding.

(d) All information, records, materials and documents provided to the Disciplinary Panel and

all deliberations, testimony, information, records, materials and documents related

thereto shall be treated as non-public and confidential and shall not be disclosed, except

as necessary to further a SEF investigation or as required by law.

Rule 6010 Convening Hearings of Disciplinary Proceedings

(a) A hearing will be conducted privately and confidentially. Notwithstanding the

confidentiality of hearings, the Disciplinary Panel may appoint an expert to attend any

hearing and assist in deliberations if such expert agrees to be subject to an appropriate

confidentiality agreement.

(b) After reasonable notice to each respondent, the Disciplinary Panel will promptly convene

a hearing to conduct the disciplinary proceedings with respect to such respondent. Parties

to a disciplinary proceeding include each respondent and the Market Regulation

Department.

(c) The chair of the Disciplinary Panel may continue, adjourn or otherwise conduct the

hearing, as he or she may deem appropriate. The chair of the Disciplinary Panel will

determine all procedural and evidentiary matters, including the admissibility and

relevance of any evidence proffered.

(d) In determining procedural and evidentiary matters, the chair of the Disciplinary Panel

will not be bound by any evidentiary or procedural rules or law. Once admitted during

the hearing, the Disciplinary Panel may consider, and attach the weight it believes

appropriate to, evidence or other materials. The General Counsel of the SEF, or his or her

designee, may provide guidance to the chair of the Disciplinary Panel on the conduct of

the hearing.

(e) Except for procedural and evidentiary matters decided by the chair of the Disciplinary

Panel pursuant to Rule 6010(c) above and Rule 6012, unless each respondent otherwise

consents, the entire Disciplinary Panel must be present during the entire hearing and any

related deliberations.

Rule 6011 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 the SEF that the Market Regulation

Department will use to support the allegations and proposed sanctions in the Notice of

Charges or which the chair of the Disciplinary Panel deems relevant to the disciplinary

proceedings. Notwithstanding the foregoing, no respondent will have the right to review,

and the SEF will have no obligation to disclose, any documents that:

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(1) are privileged or constitute attorney work product;

(2) were prepared by an employee of the SEF but will not be offered in evidence in

the disciplinary proceedings;

(3) may disclose a technique or guideline used in examinations, investigations or

enforcement proceedings; or

(4) disclose the identity of a confidential source.

(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 Market Regulation Department, the Market

Regulation Department may redact, edit or code such information before furnishing it to

the respondent.

(c) Notwithstanding anything in Rule 6011(b) above to the contrary, the Market Regulation

Department:

(1) 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

(2) will provide the respondent with access to the information and portions of the

documents that the Market Regulation Department intends to rely on to support

the allegations or proposed sanctions in the Notice of Charges.

(d) For purposes of this Rule 6011, information that could adversely affect competitive

positions may include positions in Swaps or other positions currently held, trading

strategies employed in establishing or liquidating positions, the identity of any Customer,

Client, Sponsored Participant, Participant or Authorized Trader and the personal finances

of the Person providing the information.

Rule 6012 Conducting Hearings of Disciplinary Proceedings

(a) At a hearing conducted in connection with any disciplinary proceedings, the Market

Regulation Department will present its case supporting the allegations and proposed

sanctions in the Notice of Charges to the Disciplinary Panel. The respondent is entitled to

attend and participate in the hearing.

(b) At a hearing conducted in connection with any disciplinary proceedings, the Disciplinary

Panel or the Market Regulation Department and each respondent may:

(1) present evidence and facts determined relevant and admissible by the chair of the

Disciplinary Panel;

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(2) call and examine witnesses; and

(3) cross-examine witnesses called by other parties.

(c) 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 chair of the Disciplinary Panel may limit evidence concerning any allegations not

expressly denied in determining the sanctions to impose. If a respondent fails to file an

answer but appears at the hearing, the respondent may not participate in the hearing (by

calling or cross-examining witnesses, testifying in defense, presenting evidence

concerning the Notice of Charges, or otherwise) unless the Disciplinary Panel determines

that the respondent had a compelling reason for failing to timely file an answer. If the

Disciplinary Panel determines that the respondent had a compelling reason for failing to

timely file an answer, the Disciplinary Panel will adjourn the hearing and direct the

respondent to promptly file a written answer in accordance with Rule 6006.

(d) If the respondent has requested a hearing on a charge that the respondent denies, or on a

sanction set by the Disciplinary Panel under Rule 6014, the respondent will be given an

opportunity for a hearing in accordance with the SEF Rules. Except for good cause, such

hearing will be limited to addressing those charges denied by the respondent and/or

sanctions set by the Disciplinary Panel under Rule 6014 for which a hearing has been

requested.

(e) Any Person entitled, or required or called upon, to attend a hearing before a Disciplinary

Panel pursuant to Rule 6012(b)(2) will be given reasonable notice, confirmed in writing,

specifying the date, time and place of the hearing, and the caption of the disciplinary

proceedings. All Persons subject to the SEF’s jurisdiction that are called as witnesses are

required to appear at the hearing and, where applicable, produce evidence. The SEF 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 Disciplinary Panel determines that a

reasonable basis exists to believe that the respondent violated or is about to violate the

SEF Rules or any other provision of Applicable Law for which the SEF has disciplinary

jurisdiction other than the violations alleged in the Notice of Charges, the Disciplinary

Panel may consider those apparent violations after providing the respondent with an

opportunity to answer the additional allegations in accordance with Rule 6006. In

connection with considering apparent violations pursuant to this Rule 6012(f), the

Disciplinary Panel may request that the Market Regulation Department provide the

Disciplinary Panel with any additional information related to the violations at issue.

(g) The Disciplinary Panel may provide that a sanction be summarily imposed upon any

Person within its jurisdiction whose actions impede the progress of a hearing.

(h) If the respondent has requested the hearing, a copy of the hearing must be made and must

become a part of the record of the proceedings. The SEF will arrange for any hearing

conducted in connection with disciplinary proceedings to be recorded verbatim, or

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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 chair of the

Disciplinary Panel may within his or her sole discretion require the respondent to pay the

costs for transcribing the recording of the hearing.

(i) No interlocutory appeals of rulings of any Disciplinary Panel or chair of the Disciplinary

Panel are permitted.

Rule 6013 Decision of Disciplinary Panel

(a) Promptly following a hearing, the Disciplinary Panel will issue a written order rendering

its final decision based on the weight of the evidence contained in the record of the

disciplinary proceedings. A decision by a majority of the Disciplinary Panel will

constitute the final decision of the Disciplinary Panel.

(b) The Disciplinary Panel will serve a copy of the order of the disciplinary proceedings on

the respondent and the Market Regulation Department. The order will include:

(1) The name of the respondent;

(2) the Notice of Charges or summary of the charges;

(3) the answer, if any, or a summary of the answer;

(4) a summary of the evidence produced at the hearing or, where appropriate,

incorporation by reference of the Investigation Report;

(5) a statement of findings of fact and conclusions with respect to each charge,

including a complete explanation of the evidentiary and other basis for such

findings and conclusions with respect to each charge;

(6) each specific SEF Rule and/or other provision of Applicable Law that the

respondent was found to have violated;

(7) a declaration of all sanctions imposed against the respondent, if any, including the

basis for such sanctions and the effective date of each sanction;

(8) notice of respondent’s right to appeal; and

(9) a statement informing the respondent of the availability of CFTC review of the

action pursuant to Part 9 of the CFTC Regulations.

(c) The written decision of the Disciplinary Panel will become effective upon the expiration

of fifteen (15) days after it is served on the respondent and provided to the Market

Regulation Department; provided, however, that the SEF may cause the decision to

become effective prior to that time to the extent permitted under Part 9 of the CFTC

Regulations.

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Rule 6014 Sanctions

(a) After notice and opportunity for hearing in accordance with the SEF Rules, the SEF will

impose sanctions on any Person subject to the SEF’s jurisdiction, including any Clearing

Firm, Customer, Client, Sponsored Participant, Participant, Account Manager,

Authorized Trader or Supervised Person, or any Person using a Participant’s User ID or

login credentials linked to a Participant or User ID, if such Person is found to have

violated or to have attempted to violate a SEF Rule or other provision of Applicable Law

for which the SEF has disciplinary jurisdiction. All sanctions, including those imposed

pursuant to an accepted settlement offer, must 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. Any such sanction (including any

fine) shall be commensurate with the violation committed and clearly sufficient to deter

recidivism or similar violations by other market participants.

The SEF may impose one or more of the following sanctions or remedies:

(1) censure;

(2) limitation on Trading Privileges, ability to otherwise access the SEF, and/or other

activities, functions or operations;

(3) suspension of Trading Privileges and/or ability to otherwise access the SEF;

(4) fine (subject to Rule 6014(b) below);

(5) restitution and/or disgorgement;

(6) termination of Trading Privileges and/or ability to otherwise access the SEF;

(7) limitation, suspension or termination of rights as a Clearing Firm; or

(8) any other sanction or remedy deemed to be appropriate.

(b) The SEF may impose a fine of up to $100,000, unless aggravating or mitigating

circumstances otherwise warrant as determined by the SEF, for each violation of the SEF

Rules or other provision of Applicable Law for which the SEF has disciplinary

jurisdiction. The minimum fine for any one violation is $1,000. If a fine or other amount

is not paid within thirty (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 lesser of (i) the quoted

prime rate plus three percent, and (ii) the maximum rate of interest permitted by

Applicable Law. The SEF has sole discretion to select the bank on whose quotations it

will base the prime rate. A Participant will be responsible for paying any fine or other

amount imposed on, but not paid by, any of its Supervised Persons.

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Rule 6015 Right to Appeal from Disciplinary Panel Decision, Summary Impositions of

Fines and Other Summary Actions

(a) Each respondent found by the Disciplinary Panel to have violated the SEF Rules or other

provision of Applicable Law for which the SEF has disciplinary jurisdiction or who is

subject to termination or limitation of Trading Privileges, any summary fine imposed

pursuant to Rule 6016 or any other summary action may appeal the decision within

twenty (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) The SEF 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

twenty (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:

(1) the order or summary action was arbitrary, capricious, an abuse of discretion or

not in accordance with the SEF Rules;

(2) the order or summary action exceeded the authority or jurisdiction of the

Disciplinary Panel, the Chief Compliance Officer or the SEF;

(3) the order or summary action failed to observe required procedures;

(4) the order or summary action was unsupported by the facts or evidence; or

(5) the sanctions, remedies or costs imposed were inappropriate or unsupported by

the record.

(e) The Chief Compliance Officer will forward copies of any notice of appeal received by

him or her to all parties to the disciplinary proceeding or summary action, as the case

may be, except the appellant. On or before the twentieth (20th) day after filing a notice of

appeal, the appellant must file with the Chief Compliance Officer and serve on the

appellee a brief supporting the notice of appeal and documents supporting the brief. On

or before the twentieth (20th) day after the date on which the appellant serves its

supporting brief, the appellee must file and serve its brief in opposition on the Chief

Compliance Officer and the appellant. On or before the tenth (10th) day after the date on

which the appellee serves its brief in opposition, the appellant may file and serve on the

SEF a brief in reply.

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(f) In connection with any appeal, the Market Regulation Department will furnish to the

Chief Compliance Officer and to the appellant and appellee a transcript of the hearing

and any exhibits introduced at the hearing.

(g) No later than thirty (30) days after the last submission filed pursuant to paragraph (e) of

this Rule 6015, the Chief Compliance Officer or the SEF’s Regulatory Services Provider

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 Market

Regulation Department or have been a member of the Disciplinary Panel involved in the

matters on appeal and at least two of whom would not be disqualified from serving as

Public Directors. In addition, each Appeals Panel must include members who have had

relevant experience in some capacity (whether as a current or former employee, officer,

director, principal, consultant, advisor, service provider or otherwise) working with or for

sufficient different Membership Interests so as to ensure fairness and to prevent special

treatment or preference for any Person in the conduct of the Appeals Panel’s

responsibilities. The chair of the Appeals Panel shall be an individual who would not be

disqualified from serving as a Public Director.

(h) Within ten (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

or any Person designated as chair thereof for the reasons identified in Rule 2500 or in the

definition of Public Director (as the case may be) or on other reasonable grounds, 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 and appointment of its chair. 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 the SEF Rules, or remanding the matter to the

same or a different Disciplinary Panel for further disciplinary proceedings or for

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reconsideration by the Chief Compliance Officer in the case of summary action. The

Appeals Panel may order a new hearing for good cause or if the Appeals Panel deems it

appropriate.

(l) As promptly as reasonably possible following its review, the Appeals Panel will issue a

written decision on appeal rendering its decision based on the preponderance of the

evidence before the Appeals Panel and will provide a copy to the Chief Compliance

Officer, the appellant and the appellee. 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 SEF Rule and other provision of Applicable

Law for which the SEF has disciplinary jurisdiction 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 the SEF and will not be subject to

appeal within the SEF; provided, however, that any suspension, expulsion, disciplinary or

access denial action or other adverse action by the SEF may (to the extent required

thereby) be subject to review by the CFTC pursuant to Part 9 of the CFTC Regulations.

Rule 6016 Summary Imposition of Fines

(a) Notwithstanding any other provision of this Chapter 6, the SEF may, based on a

determination made by the Regulatory Oversight Committee and without the need for

any formal disciplinary procedures, summarily impose a fine against a Participant,

Sponsored Participant, Account Manager, Authorized Trader, Client, Customer,

Supervised Person or any other Person using a User ID of a Participant or login

credentials linked to a Participant or User ID for failure to:

(1) comply with the requirements set forth in Rule 4013.A.(k)(1)(ii);

(2) make timely and accurate submissions to the SEF of notices, reports or other

information required by the SEF Rules;

(3) make timely payments of assessments, fees, costs, charges or fines to the SEF; or

(4) keep any books and records required by the SEF Rules.

Investigations of possible violations of any of the foregoing shall be conducted by the

Market Regulation Department in accordance with Rule 6001, but otherwise actions

taken pursuant to this Rule 6016 shall be made in accordance with the procedures set

forth herein rather than the procedures set forth in the remainder of this Chapter 6. The

authority to impose a summary fine under this Rule 6016 does not prevent the Chief

Compliance Officer from submitting any Investigation Report to a Review Panel in

accordance with the formal disciplinary procedures of this Chapter 6 if the Regulatory

Oversight Committee elects not to impose such a summary fine.

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(b) The Market Regulation Department will give notice of any fine determined to be imposed

by the Regulatory Oversight Committee pursuant to this Rule 6016 to each Participant or

other Person subject thereto. The notice will specify:

(1) the violations of the SEF Rules for which the fine is being imposed;

(2) the date of the violation for which the fine is being imposed; and

(3) the amount of the fine.

(c) Within twenty (20) days of serving the notice of fine, the Participant or other Person

subject thereto, as the case may be, must either pay or cause the payment of the fine. If a

fine or other amount is not paid within twenty (20) days of the date that it becomes

payable, then interest will accrue on the sum from the date that it became payable at the

lesser of (i) the quoted prime rate plus three percent, and (ii) the maximum rate of interest

permitted by Applicable Law. The SEF has sole discretion to select the bank on whose

quotations it will base the prime rate. A Participant will be responsible for paying any

fine or other amount imposed on, but not paid by, any of its Supervised Persons.

(d) The SEF will set the amount of any fines imposed pursuant to this Rule 6016 at no less

than $1,000 per violation, with the maximum fine for each violation not to exceed

$5,000. Recurring violations will be subject to progressively larger fines. Summary

imposition of fines pursuant to this Rule 6016 will not preclude the SEF from bringing

any other action against the Participant or any other Person.

Rule 6017 Warning Letters

The SEF authorizes the Market Regulation Department to issue a warning letter to a Person or

entity under investigation or to recommend that a Disciplinary Panel take such an action. A

warning letter issued in accordance with this Rule 6017 is not a penalty or an indication that a

finding of a violation has been made. A copy of a warning letter issued by the Market Regulation

Department will 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 6018 Summary Access Denial Actions

(a) The Chief Compliance Officer, upon a good faith determination that there is a reasonable

belief that such immediate action is necessary to protect the best interests of the SEF,

may summarily suspend, revoke, limit, condition, restrict or qualify the Trading

Privileges of a Participant, Sponsored Participant or any Supervised Person, including

denial of access to the SEF.

(b) Non-Participants, including Customers and Clients, may be denied access to the SEF by

the Chief Compliance Officer upon a good faith determination that there are substantial

reasons to believe that such immediate action is necessary to protect the best interests of

the SEF.

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(c) If practicable, a respondent must be served with a notice before the action is taken or

otherwise at the earliest possible opportunity. The notice must state the action taken, the

reasons for the action, and the effective date, time and the duration of the action taken.

The party shall be advised of his right to a hearing, as soon as reasonably practicable,

before a Disciplinary Panel by filing notice of intent with the Market Regulation

Department within ten (10) Business Days of the notice date.

(d) Any suspension, revocation, limitation, condition, restriction or qualification imposed on

any Participant, Supervised Person or non-Participant (including Sponsored Participants,

Customers and Clients) pursuant to this Rule 6018 will be impartially enforced.

(e) Any denial, conditioning or termination that represents a suspension, expulsion,

disciplinary or access denial action or other adverse action within the meaning of Part 9

of the CFTC Regulations may (to the extent required thereby) be subject to review by the

CFTC pursuant to Part 9 of the CFTC Regulations.

Rule 6019 Rights and Responsibilities after Suspension, Temporary Deactivation or

Termination

(a) When a Person’s Trading Privileges and/or ability to otherwise access the SEF are

suspended or temporarily deactivated in accordance with Rule 3105(c), none of its rights

(including the right to hold oneself out to the public as a Participant or Authorized

Trader, enter Orders into the SEF, submit Block Trades to the SEF, and receive

Participant rates for fees, costs, and charges) will apply during the period of the

suspension or deactivation, except for the right of the Person in question to assert claims

against others as provided in the SEF Rules. Any such suspension or deactivation will not

affect the rights of creditors under the SEF Rules or relieve the Person in question of its,

his or her obligations under the SEF Rules to perform any Swaps entered into before the

suspension or deactivation, or for any SEF fees, costs, or charges incurred during the

suspension or deactivation. The SEF may discipline a suspended or deactivated Person

under this Section 6 for any violation of the SEF Rules or other provision of Applicable

Law committed by such Person before, during or after the suspension or deactivation.

(b) When a Person’s Trading Privileges and/or ability to otherwise access the SEF are

terminated, all of its related rights will terminate, except for the right of the Person in

question to assert claims against others, as provided in the SEF Rules. Any such

termination will not affect the rights of creditors under the SEF Rules.

(c) When a Person’s Trading Privileges and/or ability to otherwise access the SEF are

terminated, such person will pay to the SEF all assessments, fees, costs, charges and fines

due through the termination date (unless such Person shall have previously provided the

SEF with written notice of a bona fide dispute in assessments, fees, costs and charges in

which case such Person will pay all undisputed fees due through the termination date or

unless any such fine is then the subject of an appeal, in which case such fine shall be due

in accordance with the procedures applicable to such appeal).

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(d) The SEF will not consider the application of a terminated Participant or Authorized

Trader if such Participant or Authorized Trader, as the case may be, continues to fail to

appear at disciplinary proceedings without good cause or continues to impede the

progress of disciplinary proceedings.

(e) A suspended, deactivated or terminated Person remains bound by the SEF Rules and

subject to the jurisdiction of the SEF with respect to any and all matters arising from,

related to or in connection with, the status, actions or omissions of such Person prior to

such suspension, deactivation or termination, and must cooperate in any inquiry,

investigation, disciplinary proceeding, appeal of disciplinary proceedings, summary

suspension or other summary action as if the suspended, deactivated or terminated Person

still had Trading Privileges or ability to otherwise access the SEF.

Rule 6020 Notice to the Respondent, the Regulatory Services Provider and the Public;

Effectiveness of Disciplinary and Access Denial Actions

(a) The SEF will provide written notice of disciplinary proceedings and of any access denial

actions pursuant to Rule 3103 or 6018 to the relevant parties and the Regulatory Services

Provider consistent with applicable CFTC Regulations. Whenever the SEF suspends,

expels, fines or otherwise disciplines or denies any Person access to the SEF, the SEF

will make the disclosures and notifications required by Part 9 of the CFTC Regulations

(including by any of the alternative methods available thereunder) and any other

applicable CFTC Regulations.

(b) Without limiting the generality of the foregoing, the SEF shall, in accordance with the

requirements of CFTC Regulation 9.11, provide written notice of its final decision

regarding any disciplinary or access denial action to the Person against whom the action

was taken within thirty (30) days of rendering such decision. Pursuant to CFTC

Regulation 9.12, any disciplinary or access denial action taken will not become effective

until at least fifteen (15) days after the written notice is delivered to the Person

disciplined or denied access; provided, however, that the SEF may cause a Disciplinary

Action to become effective prior to that time in accordance with CFTC Regulation 9.12.

Rule 6021 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 if the Disciplinary Panel concludes that the respondent has behaved in a

manifestly unreasonable manner. Costs may include costs associated with the inquiry or

investigation, the prosecution by the Market Regulation 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 the SEF if the panel concludes that

the SEF has behaved in a manifestly unreasonable manner in the commencement or

conduct of the disciplinary proceedings in question. The Disciplinary Panel must limit

any award of costs against the SEF to an amount that the panel concludes is reasonable

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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. The SEF or the respondent will pay any costs ordered to be paid

by it by the Disciplinary Panel within thirty (30) days of written notice of the amount

imposed by the Disciplinary Panel. If costs are not paid within twenty (20) days of the

date that it becomes payable, then interest will accrue on the sum from the date that it

became payable at the lesser of (i) the quoted prime rate plus three percent and (ii) the

maximum rate of interest permitted by applicable law. The SEF has sole discretion to

select the bank on whose quotations it will base the prime rate. Participant will be

responsible for paying any costs imposed on, but not paid by, any of its Supervised

Persons.

Rule 6022 Ex Parte Communications

(a) A Person subject to a disciplinary proceeding or an appeal from a disciplinary proceeding

(and any counsel or representative of such Person) and the Market Regulation

Department (and any counsel or representative of the Market Regulation Department)

shall not knowingly make or cause to be made an ex parte communication relevant to the

merits of a disciplinary proceeding or an appeal from a disciplinary proceeding to any

member of the Disciplinary Panel or Appeals Panel hearing such proceeding.

(b) Members of a Disciplinary Panel or an Appeals Panel shall not knowingly make or cause

to be made an ex parte communication relevant to the merits of a disciplinary proceeding

or an appeal from a disciplinary proceeding to any Person subject to such proceeding

(and any counsel or representative of such Person) or the Market Regulation Department

(and any counsel or representative of the Market Regulation Department).

(c) Any Person who receives, makes or learns of any communication that is prohibited by

this Rule 6022 shall promptly give notice of such communication and any response

thereto to the Market Regulation Department and all parties to the proceeding to which

the communication relates.

(d) A Person shall not be deemed to have violated this Rule 6022 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 6023 [Reserved]

Rule 6024 Extension or Waiver of the SEF Rules

If necessary and expedient, the Chief Compliance Officer may, in his or her sole discretion,

waive, or extend the time period for performing, any act or acts designated by the SEF Rules, but

only to the extent such waiver or extension is not inconsistent with the CEA, CFTC Regulations

or other applicable regulations.

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Rule 6025 Effect of Amendment, Repeal or New SEF Rule

(a) If an amendment or repeal of a SEF Rule or adoption of a new SEF Rule does not

materially change the terms or conditions of a Swap and does not affect the value of open

Swaps, then the effective date of any amendment or repeal of a SEF Rule or adoption of a

new SEF Rule relating to Swaps is binding on all Swaps entered into before and after the

effective date of such amendment, repeal or adoption.

(b) If an amendment or repeal of a SEF Rule or adoption of a new SEF Rule materially

changes the terms or conditions of a Swap or affects the value of open Swaps, then the

amendment, repeal or new SEF Rule is binding only on Swaps listed for trading after the

effective date of such amendment, repeal or adoption, and Swaps listed as of the effective

date of such amendment, repeal or adoption with no open positions then in existence,

unless otherwise specifically provided by the Board.

Rule 6026 [Reserved]

Rule 6027 Governing Law, Jurisdiction and Dispute Resolution

(a) The law of the State of New York governs the SEF Rules regardless of the laws that

would otherwise apply under applicable choice-of-law principles.

(b) Any dispute between the SEF and a Person arising from or in connection with the SEF

Rules or use of the SEF must be brought to arbitration pursuant to subsection (c) of this

Rule 6027 within two (2) years from the occurrence of the event giving rise to the

dispute. This Rule 6027 shall in no way create a cause of action nor authorize an action

that would otherwise be prohibited by the SEF Rules.

(c) Any dispute between the SEF and a Person arising from or in connection with the SEF

Rules will be settled by arbitration administered in New York County, New York by the

American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules.

The dispute will be submitted to one arbitrator who will be appointed by the AAA. Any

arbitrator appointed for purposes of this Rule 6027 will have experience with and

knowledge of commodities, derivatives and Swaps as listed on the National Roster of

Arbitrators kept in the AAA’s records. Judgment on the award rendered by the arbitrator

will be binding on the parties and may be entered in any state or federal court sitting in

New York County, New York, and the SEF and each Person shall be deemed to have

consented to the personal jurisdiction of any such court. Each party to the dispute will

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

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

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

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

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

this Rule 6027 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, (i) exclusive jurisdiction

for any such dispute will reside in any state or federal court sitting in New York County,

New York, (ii) the SEF and the Person involved in the dispute will be presumed to have

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submitted to the personal jurisdiction of any such court, and (iii) an action to enforce any

judgment or decision of such court may be brought in the same court or in any other court

with jurisdiction or venue. Finally, all Persons unconditionally and irrevocably waive any

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

Rule 6028 Limitation of Liability, Indemnity

(a) UNLESS ARISING OUT OF THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT

OR FRAUD OF THE SEF, THE SEF, ITS SUBSIDIARIES AND AFFILIATES AND

THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS

(EACH A “RELATED PARTY” AND COLLECTIVELY “RELATED PARTIES”)

HAVE NO LIABILITY, CONTINGENT OR OTHERWISE, TO PARTICIPANTS OR

TO THIRD PARTIES, FOR THE CORRECTNESS, QUALITY, ACCURACY,

SECURITY, COMPLETENESS, RELIABILITY, PERFORMANCE, TIMELINESS,

PRICING OR CONTINUED AVAILABILITY OF THE SEF SERVICES OR FOR

DELAYS OR OMISSIONS OF THE SEF SERVICES, OR FOR THE FAILURE OF

ANY CONNECTION OR COMMUNICATION SERVICE TO PROVIDE OR

MAINTAIN PARTICIPANT ACCESS TO THE SEF SERVICES, OR FOR ANY

INTERRUPTION IN OR DISRUPTION OF A PARTICIPANT’S ACCESS OR ANY

ERRONEOUS COMMUNICATIONS BETWEEN THE SEF AND A PARTICIPANT.

THE SEF AND ITS RELATED PARTIES ARE NOT LIABLE FOR ANY SPECIAL,

INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES WHICH A

PARTICIPANT OR ANY THIRD PARTY MAY INCUR OR EXPERIENCE

BECAUSE THE PARTICIPANT ENTERED INTO THESE TERMS OR RELIED ON

THE SEF SERVICES, EVEN IF THE SEF KNOWS OF THE POSSIBILITY OF

THOSE DAMAGES. THE SEF AND ITS RELATED PARTIES ARE NOT

RESPONSIBLE FOR INFORMING A PARTICIPANT OF ANY DIFFICULTIES THE

SEF OR OTHER THIRD PARTIES EXPERIENCE CONCERNING USE OF THE SEF

SERVICES OR TO TAKE ANY ACTION IN CONNECTION WITH THOSE

DIFFICULTIES. THE SEF AND ITS RELATED PARTIES ALSO HAVE NO DUTY

OR OBLIGATION TO VERIFY, CORRECT, COMPLETE OR UPDATE ANY

INFORMATION DISPLAYED IN THE SEF SERVICES. EACH PARTICIPANT IS

SOLELY RESPONSIBLE FOR ANY LOSSES, DAMAGES OR COSTS RESULTING

FROM THE PARTICIPANT’S RELIANCE ON ANY DATA OR INFORMATION

THAT THE SEF MAY PROVIDE IN CONNECTION WITH A PARTICIPANT’S USE

OF THE SEF SERVICES.

(b) THE SEF DOES NOT MAKE ANY RECOMMENDATION AS TO THE

SUITABILITY OF ANY INVESTMENT OR PROPOSED TRANSACTION. EACH

PARTICIPANT ACKNOWLEDGES THAT THE SEF WILL NOT, AND ARE UNDER

NO DUTY TO, PROVIDE ADVICE IN RELATION TO ANY SUCH TRANSACTION

OR PROPOSED TRANSACTION THROUGH ANY SEF SERVICE. EACH

PARTICIPANT AGREES THAT (i) THE SEF SERVICES ARE NOT AND WILL NOT

BE THE BASIS FOR ANY OF INVESTMENT DECISIONS BY A PARTICIPANT

AND (ii) PARTICIPANTS ARE SOLELY RESPONSIBLE FOR (A) ANY

INVESTMENT OR TRADING DECISIONS THAT THE PARTICIPANT MAKES

WITH RESPECT TO THE PRODUCTS AVAILABLE VIA ANY SEF SERVICE AND

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(B) DETERMINING WHETHER ANY TRANSACTION IS SUITABLE,

APPROPRIATE OR ADVISABLE FOR THE PARTICIPANT OR SPONSORED

PARTICIPANT OR CLIENTS OR CUSTOMERS. PROVISION OF THE SEF

SERVICES DOES NOT MAKE THE SEF AN ADVISOR OR FIDUCIARY FOR A

PARTICIPANT, SPONSORED PARTICIPANT, CLIENT OR CUSTOMER. THESE

TERMS DO NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN

OFFER TO BUY SECURITIES OR OTHER INSTRUMENTS. IN ADDITION, THE

SEF SERVICES DO NOT INCLUDE ANY INVESTMENT, FINANCIAL, LEGAL OR

TAX ADVICE WHICH PARTICIPANT MAY DESIRE OR NEED IN CONNECTION

WITH ANY TRANSACTION. PARTICIPANTS ARE RESPONSIBLE FOR

OBTAINING ANY LEGAL OR TAX ADVICE.

(c) IF A THIRD PARTY CLAIMS THAT THE SEF SERVICES INFRINGE UPON ITS

PATENT COPYRIGHT, OR TRADE SECRET, OR ANY SIMILAR INTELLECTUAL

PROPERTY RIGHT, THE SEF WILL DEFEND THE PARTICIPANT AGAINST

THAT CLAIM AT THE SEF’S EXPENSE AND PAY ALL DAMAGES THAT A

COURT FINALLY AWARDS, PROVIDED THAT THE PARTICIPANT PROMPTLY

NOTIFY THE SEF IN WRITING OF THE CLAIM AND COOPERATE WITH THE

SEF IN THE DEFENSE OR ANY RELATED SETTLEMENT NEGOTIATIONS. THE

SEF SHALL HAVE SOLE CONTROL OVER THE DEFENSE AND ANY

NEGOTIATION FOR ITS SETTLEMENT OR COMPROMISE. IF SUCH A CLAIM IS

MADE OR IS LIKELY TO BE MADE, THE SEF SHALL, AT THE SEF’S SOLE

OPTION, HAVE THE RIGHT TO TAKE ONE OR MORE OF THE FOLLOWING

ACTIONS AT NO ADDITIONAL COST TO THE PARTICIPANT: (i) PROCURE

THE RIGHT FOR THE PARTICIPANT TO CONTINUE THE USE OF THE SEF

SERVICES; (ii) REPLACE THE SEF SERVICES WITH NON-INFRINGING

SOFTWARE; OR (iii) MODIFY THE SEF SERVICES SO AS TO BE NONINFRINGING. IF THE SEF DETERMINE THAT NONE OF THESE ALTERNATIVES

IS REASONABLY AVAILABLE, THE PARTICIPANT AGREES TO IMMEDIATELY

TERMINATE ITS USE OF THE SEF SERVICES ON THE SEF’S WRITTEN

REQUEST. HOWEVER, THE SEF HAS NO OBLIGATION FOR ANY CLAIM

BASED ON THE SEF’S USE OF THE SEF SERVICES IN ANY MANNER

INCONSISTENT WITH THESE TERMS, PARTICIPANT’S MODIFICATION OF

THE SEF SERVICES OR PARTICIPANT’S COMBINATION, OPERATION, OR USE

OF THE SEF SERVICES WITH ANY PRODUCT, DATA, OR APPARATUS NOT

SPECIFIED OR PROVIDED BY THE SEF, PROVIDED THAT SUCH CLAIM

SOLELY AND NECESSARILY IS BASED ON SUCH COMBINATION,

OPERATION OR USE, OR FOR CONTINUED ALLEGEDLY INFRINGING

ACTIVITY BY THE PARTICIPANT AFTER THE PARTICIPANT HAVE BEEN

NOTIFIED OF POSSIBLE INFRINGEMENT, UNLESS APPROVED IN ADVANCE

BY THE SEF. THE FOREGOING REPRESENTS THE SOLE AND EXCLUSIVE

REMEDY FOR PARTICIPANTS WITH REGARD TO ANY OF THE ABOVE

INFRINGEMENTS OR ALLEGED INFRINGEMENTS.

(d) WITH THE EXCEPTION OF THE PROVISIONS OF RULE 6028(c), THE SEF’S

LIABILITY AND THE COLLECTIVE LIABILITY OF THE SEF’S RELATED

PARTIES AND THE THIRD PARTY SERVICE PROVIDERS SELECTED BY THE

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SEF, IF ANY, ARISING OUT OF ANY KIND OF LEGAL CLAIM (WHETHER IN

CONTRACT, TORT, OR OTHERWISE) OR IN ANY WAY CONNECTED TO A

PARTICIPANT’S USE OF THE SEF SERVICES WILL NOT EXCEED $500,000

UNLESS CAUSED DIRECTLY BY THE SEF’S GROSS NEGLIGENCE OR

WILLFUL MISCONDUCT.

(e) NONE OF THE ABOVE WILL LIMIT PARTICIPANT’S RIGHTS AND REMEDIES

OTHERWISE AVAILABLE UNDER THE STATE OR FEDERAL SECURITIES

LAWS, CFTC REGULATIONS OR THE CEA.

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SECTION 7

EMERGENCIES

Rule 7000 Emergency Rules

(a) During an Emergency, the Board and/or the CEO (or, if the CEO is not available, the

most senior Officer that is available), in consultation with the CFTC and/or any relevant

DCO, as necessary, 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 the SEF, the Board, any

committee of the Board, the CEO or any other Officer to take Emergency Action

necessary or appropriate to respond to the Emergency. If applicable, the SEF may

provide for the carrying out of Emergency Actions through its agreements with its

Regulatory Services Provider.

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

must approve the enforcement of such Emergency Rule at a duly convened meeting.

Directors may attend such a meeting by teleconference and such meeting may, if

necessary, be conducted pursuant to Rule 2100(c). Notwithstanding, if the CEO (or, if the

CEO is not available, the most senior Officer that is available) determines that

Emergency Rules must be implemented with respect to an Emergency before a meeting

of the Board can reasonably be convened, then the CEO (or such seniormost Officer)

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 CEO (or such seniormost Officer) must

convene a meeting of the Board (which may, if necessary, be conducted pursuant to Rule

2100(c)) as soon as practicable thereafter. Notwithstanding that the Board does not ratify

or approve extending or making permanent any Emergency Rules implemented by the

CEO or seniormost Officer pending convening of the Board meeting, all actions

previously taken in accordance with such Emergency Rules shall remain binding and

valid.

(c) Whenever the SEF, the Board, any committee of the Board, the CEO or any other Officer

takes actions necessary or appropriate to respond to an Emergency in accordance with

any Emergency Rule, a duly authorized representative of the SEF, where possible, will

post an announcement in a Notice to Participants. When the Board and/or the CEO (or, if

the CEO is not available, the most senior Officer that is available) determines that the

Emergency has been reduced sufficiently to allow the SEF to resume normal functioning,

any such actions responding to an Emergency will be terminated.

(d) The SEF 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, the SEF 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.

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

decision-making process related to such action. Such documentation will be kept for at

least five (5) years following the date on which the Emergency ceases to exist or to affect

the SEF, and all such documentation will be provided to the CFTC upon request.

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SECTION 8

RECORDKEEPING AND REPORTING

Rule 8000 Maintenance of Books and Records by the SEF

(a) The SEF shall keep, or cause to be kept, all books and records required to be maintained

by it pursuant to the CEA and the CFTC Regulations, including CFTC Regulations

37.1001 and 45.2. Such records shall include, without limitation, a complete audit trail

for all Swaps executed on or subject to the rules of the SEF Rules, investigatory files and

disciplinary files.

(b) The SEF shall retain all books and records related to a Swap executed on or pursuant to

the rules of the SEF Rules throughout the life of the Swap and for a period of at least five

(5) years following the final termination of the Swap and shall retain all other books and

records for a period of at least five (5) years, in each case, in the form and manner

required under the CEA and CFTC Regulations, including CFTC Regulations 1.31, 45.2

and 37.1001.

(c) All books and records required to be maintained by the SEF shall be open to inspection

upon request by any representative of the CFTC, the United States Department of Justice

or the SEC or by any representative of a prudential regulator as authorized by the CFTC.

In addition, all audit trail data and reconstructions shall be made available to the CFTC or

the United States Department of Justice in a form, manner and time that is acceptable to

the CFTC or the United States Department of Justice, as applicable.

(d) The SEF may disclose, to any Government Agency, Self-Regulatory Organization or

other Person, information concerning or associated with a Participant or other Person if

the SEF believes such disclosure is necessary and appropriate in exercising a legal or

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

or a request for information was made.

Rule 8001 Order Information

(a) Each Authorized Trader entering an Order with respect to any Swap traded on or subject

to the rules of the SEF Rules must include with the Order, all data required to enable the

SEF to meet its reporting obligations under Parts 43 and 45 of the CFTC Regulations,

including without limitation:

(1) the User ID;

(2) the Participant ID;

(3) the Legal Entity Identifier of the Participant and, where the Participant is acting as

agent, of the Customer or Client, with respect to the Swap for which the Order is

placed;

(4) the price or yield, quantity and maturity or expiration date of the Swap;

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(5) side of the Order;

(6) the Customer Type Indicator Code (as specified below);

(7) a yes/no indication of whether the Participant, Customer or Client is a Swap

Dealer;

(8) a yes/no indication of whether the Participant, Customer or Client is a Major

Swap Participant;

(9) a yes/no indication of whether the Participant, Customer or Client is a Financial

Entity;

(10) a yes/no indication of whether the Participant, Customer or Client is a U.S.

person;

(11) if the Swap will be allocated:

(i) an indication that the Swap will be allocated;

(ii) the Legal Entity Identifier of the Account Manager acting as agent;

(iii) a yes/no indication of whether the Account Manager acting as agent is a

U.S. person;

(iv) an indication of whether the Swap is a post-allocation Swap;

(v) if the Swap is a post-allocation Swap, the account and Legal Entity

Identifier for each Client that received allocations; and

(vi) if the Swap is a post-allocation Swap, the USI of the original Transaction

between the Reporting Counterparty and the Account Manager acting as

agent;

(12) if applicable, an indication that the Participant, Customer or Client will elect to

rely on a Clearing Exception for any Swap resulting from the Order and a

description of the applicable Clearing Exception;

(13) a yes/no indication of whether the Order is part of a Package Transaction;

(14) if the Order is part of a Package Transaction, a description of the Transaction;

(15) an indication of whether the Order is a Prime Brokerage Order; and

(16) if a Prime Brokerage Order, the identity of the relevant Prime Broker.

For purposes of this Rule 8001(a), the “Customer Type Indicator Codes” are as follows:

 CTI 1 – Orders for the proprietary account of a Participant that is natural person.

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 CTI 2 – Orders for the proprietary account of a Participant that is not a natural

person.

 CTI 3 – Order entered by a Participant for the proprietary account of another

Participant or for an account which the other Participant controls or has an

ownership or financial interest in.

 CTI 4 – Any order not meeting the definition of CTI 1, 2 or 3, including those

entered by Introducing Brokers on behalf of a Customer.

(b) Participants and ISVs that operate systems that route orders to the SEF are responsible

for maintaining or causing to be maintained a routing/front-end audit trail for all Orders,

which shall include Order entry, modification and cancellation and any SEF responses to

such messages. For executed Orders, such audit trail must record the execution time of

the Transaction, along with all fill information. Participants and ISVs shall maintain audit

trail information as required by Applicable Law and must have the ability to produce

audit trail data in a reasonably usable format upon request of the SEF. The SEF will

enforce these audit trail and recordkeeping requirements by conducting an annual review

of all Participants to verify their compliance with the SEF’s audit trail and recordkeeping

requirements.

Rule 8002 Books and Records

(a) Each Member, Customer, Client and Clearing Member must prepare and keep, or cause

to be kept, all books, ledgers and other records relating to its activity on the SEF required

to be kept by it pursuant to Applicable Law, and must prepare and keep such other books

and records relating to its SEF activity as the SEF may from time to time prescribe. Such

books and records must include, as applicable, records of such Person’s trading,

including records of the Person’s activity in the index or instrument used as a reference

price, the underlying commodity and related derivatives markets, and records of all nonswap components of Package Transactions. Each such Person shall retain all required

books and records in accordance with Applicable Law, including the applicable

provisions of CFTC Regulations 1.31 and 45.2, and shall make such books and records

available, upon request, to the SEF, the SEF’s Regulatory Services Provider, the CFTC

or the United States Department of Justice and as otherwise required by Applicable Law.

(b) In addition to the information required by subsection (a) of this Rule 8002, each Member

must comply with all applicable requirements of CFTC Regulation 1.35.

(c) If a Participant cannot enter an Order received from its Customer into the SEF, either

directly or indirectly through an Execution Specialist, the Participant must immediately

create an electronic record that includes the account identifier that relates to the

Customer, time of receipt and terms of the Order.

(d) Each Person required to keep records in accordance with this Rule 8002 shall keep all

books and records in accordance with the SEF Rules for a period of five (5) years from

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the date on which they are first prepared unless otherwise provided in the SEF Rules or

other Applicable Law. Such books and records shall be readily accessible during the first

two (2) years of such five-year period, unless otherwise provided in the SEF Rules or

other Applicable Law. Each such Person that is a counterparty to a Swap on, the SEF or

pursuant to the rules of, the SEF Rules shall retain all books and records related to such

Swap for the life of the Swap and for a period of at least five (5) years following the final

termination of the Swap. Each such Person that is a counterparty to an Uncleared Swap

on, the SEF or pursuant to the rules of, the SEF Rules shall notify the SEF of any

extension of the final termination of the Swap beyond the original stated maturity in

order to enable the SEF to comply with Rule 8000(b) and the SEF’s obligations under

Applicable Law.

(e) The SEF may require a Member, Customer or Client to furnish any information in

connection with such Person’s activities on the SEF including (i) information relating to

Swaps executed on the SEF or pursuant to the rules of the SEF Rules , on or pursuant to

the rules of other swap execution facilities, DCMs or in related derivatives markets or to

transactions or positions in the products underlying, related to or indexed to those Swaps

or to which those Swaps are indexed (in whole or in part), and (ii) information requested

by a Government Agency relating to the SEF and/or the SEF’s compliance with

Applicable Law that the SEF believes is maintained by, or otherwise in the possession or

control of, such Person.

(f) Each Authorized Trader shall prepare and keep, or cause to be kept, all books, ledgers

and other records relating to its activity on the SEF as may be required to enable its

related Member to comply with such Member’s obligations under this Rule 8002. Each

Authorized Trader shall not knowingly take any action that would cause its associated

Member to fail to comply with Rule 8002(d), and each Authorized Trader shall cooperate

as necessary to enable its associated Member to comply with such Member’s obligations

under Rule 8002(e).

(g) Without limiting the generality of the foregoing, with respect to any Swap that has been

allocated following execution on the SEF or pursuant to the rules of the SEF Rules, all

Members, Customers and Clients must prepare and keep, or cause to be kept, all books,

ledgers and other records as may be necessary to provide relevant information with

respect to such post-trade allocation and will furnish such information to the SEF if the

SEF, at the request of the CFTC or otherwise, requests such information. This Rule

8002(g) is intended to comply with the conditions of the no-action relief granted by the

CFTC’s Division of Market Oversight in No-Action Letter 17-54, expiring at 11:59 p.m.

(Eastern Time) on November 15, 2020. If such no-action relief is extended, upon and to

the extent of such extension, the provisions of this Rule 8002(g) will continue apply.

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Rule 8003 Recordkeeping Requirements for Block Trades

Block Trades submitted to the SEF in accordance with Rule 4016(b) must comply with the

following recordkeeping requirements:

(a) Block Trades must be submitted in the form of a written or electronic record and must

include information meeting the requirements of Rule 8001, including, without limiting

the generality of the foregoing, Legal Entity Identifier information required by Rule

8001(8) with respect to parties and, where required, their agents, and a timestamp

reflecting the date and time that the submission was received by the SEF.

(b) The record shall also include a timestamp reflecting the date and time that the

Transaction was executed or cancelled to the nearest millisecond.

Rule 8004 Access to Position Information

Without limiting any provision of these SEF Rules, the SEF and any Regulatory Services

Provider, shall have the authority to obtain from any Participant, Sponsored Participant, Account

Manager, Customer or Client, or Supervised Person information with respect to positions of such

Person or any Sponsored Participant, Customer or Client, or Supervised Person. This authority

shall include the authority to obtain information concerning positions maintained at other firms,

and it shall be the obligation of a Participant receiving such an inquiry to obtain such information

from its Account Manager, Sponsored Participant, Customer, Client, or any Supervised Person.

In the event a Participant Sponsored Participant, Customer, Client, or any Supervised Person

fails to provide the requested information the SEF, in addition to any other remedy provided in

these SEF Rules, may order that the Participant, Account Managers, Sponsored Participant,

Customer, Client, or any Supervised Person liquidate the positions that are related to the inquiry.

Rule 8005 Reporting to a Swap Data Repository

(a) The SEF will report each Swap executed on, the SEF or pursuant to the rules of, the SEF

Rules as soon as technologically practicable after execution to an Approved SDR in

compliance with Parts 43 and 45 of the CFTC Regulations. For all Swaps executed on the

SEF or pursuant to the rules of the SEF Rules, the SEF will report all swap transaction

and pricing data required to be reported by Part 43 of the CFTC Regulations and all

“primary economic terms data” (as defined in CFTC Regulation 45.1) required by Part 45

of the CFTC Regulations. In addition, for Uncleared Swaps, the SEF will report any

“confirmation data” (as defined in CFTC Regulation 45.1) that is readily available and

collected by the SEF.

(b) All Swaps executed on, the SEF or pursuant to the rules of, the SEF Rules will be

reported to DTCC Data Repository (U.S.) LLC (“DDR”), except that Swaps in the

commodities asset class will be reported to the Approved SDR selected by the parties

prior to executing the relevant Swap. The SDRs that are currently “Approved SDRs” are:

(i) DDR; (ii) Chicago Mercantile Exchange Inc.; and (iii) ICE Trade Vault.

(c) The Reporting Counterparty for each Swap shall be established pursuant to CFTC

Regulation 45.8. If the identity of the Reporting Counterparty cannot be established

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under CFTC Regulation 45.8, the ISDA Reporting Counterparty Rules shall be applied as

provided in Appendix A hereto.

(d) If at any time the Reporting Counterparty for a Transaction that was executed on, the

SEF or pursuant to the rules of, the SEF Rules becomes aware of an error or omission in

the swap transaction or pricing data that was reported with respect to such Transaction,

either through its own initiative or through notice by the other party to the Transaction,

such party shall promptly notify the SEF of the error and/or correction. Upon receiving a

notification from the Reporting Counterparty or otherwise becoming aware of an error or

omission in the swap transaction or pricing data reported with respect to a Transaction

executed on, the SEF or pursuant to the rules of, the SEF Rules, the SEF shall promptly

submit corrected data to the same Swap Data Repository to which the Transaction was

previously reported. For the avoidance of doubt, if a Transaction was incorrectly

executed, Rule 5103 shall apply.

(e) No Person shall 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

Applicable Law, including the reporting requirements set forth in Part 43 of the CFTC

Regulations.

Rule 8006 Timely Publication of Trading Information

The SEF will publish trading information as required by Core Principle 9 of Part 37 and by

Part 16 of the CFTC Regulations.

ACTIVE 218045559
Mr. Christopher J. Kirkpatrick

April 29, 2020

EXHIBIT E

tpSEF Inc. Compliance Manual

(Clean Version)
Mr. Christopher J. Kirkpatrick

April 29, 2020

EXHIBIT F

tpSEF Inc. Compliance Manual

(Marked Version)

ACTIVE 255617497