Via Portal Submission August 25, 2023

 MGEX Submission No. 23-46

Mr. Christopher Kirkpatrick

Secretary of the Commission

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street NW

Washington, DC 20581

RE: Rule Certification Submission Pursuant to Regulation 40.6(a); Amendment

to MGEX Rules

Dear Mr. Kirkpatrick: 

Pursuant to Commodity Exchange Act (“CEAct”) Section 5c and Commodity Futures 

Trading Commission (“CFTC” or “Commission”) Regulation 40.6(a), the Minneapolis 

Grain Exchange, LLC (“MGEX” or “Exchange”) hereby certifies that the attached 

amendments to the MGEX Rules (the “Proposed Amendments”) comply with the CEAct 

and CFTC Regulations. MGEX further certifies that the submission and pending changes 

to the MGEX Rules have been posted on the Exchange website at the following link: 

http://www.mgex.com/regulation.html. 

Overview of Rule Amendment

MGEX is making the Proposed Amendments to properly reflect Bitnomial’s option 

contract in the MGEX Rulebook Definitions as an option on the Bitcoin U.S. Dollar Futures 

contract and to change the period during which market participants may transfer bitcoin 

to the Bitnomial Settlement Facility from two days before the last trading day to three 

days. 

DCO Core Principles

In connection with the Proposed Amendments, the Exchange has reviewed the core 

principles for DCOs (“DCO Core Principles”) and has determined that the amendments 

comply with the requirements of such principles. During the review, MGEX identified the 

following DCO Core Principles as potentially being impacted:

• DCO Core Principle L – Public Information: Core Principle L requires DCOs to 

provide market participants with sufficient information and to have clear and 

comprehensive rules and procedures. The Proposed Amendments will be 

incorporated into the Exchange’s Rules, which are posted publicly on the MGEX 

website in satisfaction of this core principle.
MINNEAPOLIS GRAIN EXCHANGE, LLC

400 South 4th Street | 130 Grain Exchange Building | Minneapolis, MN 55415

612-321-7159

mgex.com

Pursuant to MGEX Bylaw 3.1., the Proposed Amendments were approved on August 25, 

2023. There were no substantive opposing views expressed with respect to this filing. 

The Proposed Amendments are to be effective when incorporated into the MGEX 

Rulebook and posted on its website, which will be at least 10 business days following the 

date of this submission. If there are any questions regarding this submission, please 

contact me at (612) 321-7143 or lhopkins@mgex.com. Thank you for your attention to 

this matter. 

Sincerely, 

Lindsay Hopkins

Vice President, Senior Counsel
MINNEAPOLIS GRAIN EXCHANGE, LLC

400 South 4th Street | 130 Grain Exchange Building | Minneapolis, MN 55415

612-321-7159

mgex.com

EXHIBIT A 

The following MGEX Rule is to be amended. Additions are underlined while deletions are 

marked through. 

CHAPTER 1

DEFINITIONS

BITNOMIAL EXCHANGE CONTRACTS: Any contract listed on the Bitnomial Exchange and 

approved to be cleared by MGEX. Presently, the Bitnomial Bitcoin U.S. Dollar Futures Contract, 

Bitnomial Deci Bitcoin U.S. Dollar Futures Contract, and Bitnomial Options on Deci Bitcoin U.S. 

Dollar Futures Options Contract, each as described in Chapter 12 of Bitnomial Exchange rules.

CHAPTER 23

BITNOMIAL EXCHANGE CLEARING RULES

23.12.1. DELIVERY OF UNDERLYING DIGITAL ASSET – CLEARING MEMBER &

 MARKET PARTICIPANT DUTIES.

Any Clearing Member carrying an account of a Market Participant that is required to make or take

delivery agrees to guarantee and assume full responsibility that its customers, as Market

Participants, will comply with all delivery obligations set forth in MGEX and Bitnomial Exchange 

Rules including Rules requiring that Digital Assets be delivered by Market Participants during the

Delivery Period in accordance with the Bitnomial Exchange delivery rules. For purposes of these 

Rules, the “Delivery Period” means the period beginning two three Business Days before the 

last trading day and ending on the delivery day. Clearing Members must file all required forms 

and reports by the deadlines established by MGEX, including but not limited to final open 

positions and delivery reports.

Clearing Members are responsible for ensuring that their customers, as Market Participants, that 

have an obligation or desire to make delivery have the operational ability to, and ultimately 

satisfy, their full delivery obligation and that such customers have made deliverable Digital Assets 

available to deliver with the Settlement Facility by 9:30 a.m. on the last trading day in accordance 

with all applicable Rules. Should a customer fail to deliver Digital Assets in accordance with 

applicable requirements and the Clearing Member of such customer financially satisfies such 

obligation, the opposite customer who failed to receive the Digital Assets may still file an

arbitration claim against the non-performing customer and/or such customer’s Clearing 

Member in accordance with Bitnomial Exchange Rules.

 

In the event a Clearing Member fails to perform its delivery obligations to the Clearing House, 

MGEX may deem such failure a default pursuant to this Rule and take any of the actions against 

the Clearing Member authorized in this or other MGEX Rules. For the avoidance of doubt,

Clearing Members will not, under any circumstances, be required to own, hold, or control Digital 

Assets under these Rules or Bitnomial Exchange rules (unless the Clearing Member holds 

positions requiring delivery in its own proprietary account), but Clearing Members are 
MINNEAPOLIS GRAIN EXCHANGE, LLC

400 South 4th Street | 130 Grain Exchange Building | Minneapolis, MN 55415

612-321-7159

mgex.com

responsible for ensuring their customers, as Market Participants, are able to satisfy or satisfy 

their obligations regarding delivery and acceptance thereof under the applicable MGEX and 

Bitnomial Rules.

In a Clearing Member default that involves a delivery failure, the Clearing House will ensure the

financial performance to the Clearing Member whose actions or omissions did not cause or 

contribute to the delivery failure (the “Affected Clearing Member”). The Clearing House powers 

will include, but are not limited to, the right to sell or liquidate the Digital Asset subject to delivery 

and to distribute the proceeds as appropriate and access the funds and collateral available in a 

default in accordance with Rule 2109.03. For purposes of this Rule, “financial performance” 

means payment of commercially reasonable costs of the Affected Clearing Member related to 

replacing the failed delivery but does not include physical performance or legal fees. For the

avoidance of doubt, payment of reasonable costs will be based on the price of the Digital Asset 

when delivery should have been made, and the Clearing House is not obligated to make or accept 

delivery of the actual Digital Asset. 

An Affected Clearing Member seeking financial performance must provide prompt notice to the 

Clearing House and to Bitnomial Exchange of the delivery failure and a good faith estimate of 

any financial performance being sought within one (1) hour of the delivery deadline set forth in 

Rule 23.12.4. for the product. This deadline may be extended by the Exchange for extenuating 

circumstances in its sole discretion. An Affected Clearing Member seeking financial performance

must provide the Clearing House with a detailed statement with supporting documentation of the 

amount sought, as well as any other documentation requested by the Clearing House.

MGEX shall not, under any circumstances, be responsible or liable for any losses, damages, or 

other costs arising out of a failure, malfunction, error, omission, delay, suspension, inaccuracy, 

or other event related in any way to the storing, transfer, delivery transfer, or movement of Digital

Assets in association with Bitnomial Exchange Contracts.

23.12.2. DELIVERY PROCEDURES AND REPORTING.

Unless stated otherwise, the Clearing House will electronically issue notices and reports to 

relevant Clearing Members.

Delivery of a Bitnomial Exchange Contract is based upon open positions after contract 

expiration. The delivery process, as set forth below, consists of the following requirements and

deadlines (all references to days are Business Days and times are noted in Central time):

T-5 5 Days Prior to 

Last Trading Day

5:10 p.m. Clearing Members file Bitnomial delivery files 

and all other requested information at the end of

each day with the Clearing House.

T-32 23 Days Prior to 

Last Trading Day 

(start of Delivery 

Period)

5:00 p.m. Settlement Facility opens to delivering Market 

Participants.
MINNEAPOLIS GRAIN EXCHANGE, LLC

400 South 4th Street | 130 Grain Exchange Building | Minneapolis, MN 55415

612-321-7159

mgex.com

T Last Trading Day 

of Contract

9:30 a.m. Clearing Members are responsible for ensuring 

all Market Participants making delivery deliver 

underlying asset through Settlement Facility.

5:10 p.m. Clearing Members file Bitnomial delivery files 

with the Clearing House, which will serve as a 

binding Delivery Notice to MGEX.

8:45 p.m. Clearing House issues final Delivery Report 

and corresponding payment information.

T+1 Delivery Day 11:30

a.m.

All payments for delivery are due to the 

delivering Clearing Member.

12:30

p.m.

Clearing Member notification to Bitnomial 

Exchange and Clearing House regarding 

receipt of final payment is due.

By 7:00

p.m.

Delivery process and movement of 

corresponding Digital Assets is completed.

T+2 Release of Margin By 9:00

a.m.

Provided that notification ofdelivery has been 

received by the applicable Delivery Day 

deadlines, MGEX will release margins.

Any discrepancies or material reporting errors may result in MGEX disciplinary action.