February 13, 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 #20-01R)

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. The intended date of implementation of the amended Rulebook is March 1, 2020. 

Pursuant to Commission Regulation 40.6, this submission includes: 

(i) A concise explanation and analysis of the amended rules and their compliance with applicable 

provisions of the Act, attached as Exhibit A; 

(ii) A clean copy of the amended Rulebook, attached as Exhibit B; and 

(iii) A copy of the amended Rulebook marked to show changes to the currently effective version, 

attached as Exhibit C. 

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. 

 

ACTIVE 254235116 
Mr. Christopher J. Kirkpatrick 

February 13, 2020 

Page 2 

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: February 13, 2020 

Enclosures 

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

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

February 13, 2020 

Page 3 

EXHIBIT A 

Explanation of Amended Rules 

tpSEF has amended its Rulebook as provided below. Additionally, tpSEF has made 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 

Definitions Removed defined terms not used in Rulebook. Updated 

and added the following defined terms that are used in new 

Rules 4105 and 5103.E.: Cancellation Notice, Prime 

Broker, Prime Broker Acknowledgement Letter, Prime 

Broker Client, Prime Broker Limit, Prime Broker 

Transaction and Prime Brokerage Order. 

Conforming change 

Rules 4105 and 

5103.E. 

Adopted new Rules 4105 and 5103.E. governing Prime 

Brokers and Prime Broker Transactions. Rule 4105 sets 

forth all provisions governing Prime Broker Transactions 

and the obligations of Prime Brokers, in their capacity as 

such, and Prime Broker Clients trading in the name of any 

Prime Broker pursuant to a Prime Acknowledgement 

Letter. Rule 5103.E sets forth the rights and liabilities 

associated with Prime Brokerage Transactions and the 

mechanics for cancelling Prime Brokerage Transactions 

executed in breach of a trading parameter set by the 

relevant Prime Broker or that were otherwise 

unauthorized. 

Conforming changes have been made to Rules 3112(c),

3300(b), 4002(c), 4012, 4013.B., 5103.B.(a), 5103.C.(f), 

5300 and 8001(a). 

Core Principles 2 and 4 

Rule 4011 Clarified that in the context of Required Cross 

Transactions, the 15 second delay between entering the 

first and second sides of a potential transaction applies 

regardless of whether the offer side or bid side is placed 

first. 

Commission Regulation 

37.9(b)(1) 
Mr. Christopher J. Kirkpatrick 

February 13, 2020 

EXHIBIT B 

tpSEF Inc. Rulebook 

(Clean Version) 
tpSEF Inc.

Rulebook

Effective March 1, 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 16

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 23

Rule 2600 Services Agreement with a Regulatory Services Provider 24

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

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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

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

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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

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

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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

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

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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 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, or pursuant to the rules of, the SEF.

“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 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, 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

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

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

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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.

“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.

“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).

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“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.

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

Letter 17-55.

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“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 is

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

that are non-deliverable forwards.

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“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/NonMAT 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

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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.

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

the By-Laws.

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“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’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 prenegotiation.

“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) 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,

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

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

(3) establishing and administering written policies and procedures reasonably designed

to prevent violations of the CEA and CFTC Regulations;

(4) taking reasonable steps to ensure compliance with the CEA and CFTC

Regulations;

(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;

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

response, remediation, retesting and closing of noncompliance issues;

(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;

(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);

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

the SEF by a Regulatory Services Provider; and

(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 SelfRegulatory 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 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;

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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;

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(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

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

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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) 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

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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

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

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(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 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.

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(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.

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 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,

affirmative consent. 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

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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 monitor its Participants to ensure that 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, 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.

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(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:

(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

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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 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 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;

(2) execute an ISV participation agreement in the form supplied by the SEF;

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(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

standards for Swap Dealers and Major Swap Participants in their dealing with

counterparties.

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(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 Transactions

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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:

(i) “Day” (or “Fill-and-Store”) Orders are only good for the Business Day

and applicable Trading Hours in which they are entered.

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(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/GB

P 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:

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(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

Execution Specialists via telephone and/or via electronic modes of communication

such as email and instant message.

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(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-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.

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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 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 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

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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

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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.

(4) For each Uncleared Swap executed on or pursuant to the rules of the SEF, 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. 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 counterparties)

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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

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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 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 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 NonSelf-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 behalf

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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 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 the

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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 Orders or Permitted

Cross Transactions in the name of and on behalf of that Prime Broker.

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(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) 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;

(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;

(g) keep any User IDs, account numbers and passwords related to the SEF confidential;

(h) employ practices to monitor and enforce compliance with risk limits established in

conformance with Applicable Law; and

(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-running;

(2) wash trading;

(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));

(4) fraudulent trading;

(5) money passes;

(6) fictitious transactions;

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(7) non-competitive transactions (unless otherwise exempt or excluded pursuant to the

SEF Rules);

(8) accommodation trading; or

(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 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

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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, 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.

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(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

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.

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(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.

(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

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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,

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

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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 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);

(4) Package Transactions (Order Book Exempt); and

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(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 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

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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 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

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(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

authority) if the SEF considers such arrangement to be in furtherance of the SEF’s

purpose or duties under Applicable Law.

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(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.

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

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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 distribute,

sell or retransmit any other information displayed on the SEF to any third party without

the express written consent of the SEF.

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(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;

(4) initiating 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

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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 to the

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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:

(1) are privileged or constitute attorney work product;

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(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;

(2) call and examine witnesses; and

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(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

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

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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 (20

th) 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 reconsideration by

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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 and

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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

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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 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.

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(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

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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, 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 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 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 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

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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, or pursuant

to the rules of, the SEF 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, or pursuant to

the rules of, the SEF 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 or pursuant to the rules of the SEF, 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 or pursuant to the rules of the SEF, 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)

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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, or pursuant to the rules of, the SEF 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 or pursuant to the

rules of the SEF, 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, or pursuant to the rules of, the SEF 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, or

pursuant to the rules of, the SEF 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

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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, or pursuant to the rules of, the SEF, 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 

February 13, 2020 

EXHIBIT C 

tpSEF Inc. Rulebook 

(Marked Version) 
-

tpSEF Inc.

Rulebook

Effective September 16March 1, 20192020

ACTIVE 218045559
TABLE OF CONTENTS

SECTION 1 DEFINITIONS 1

Rule 1000 Definitions 1

SECTION 2 SEF GOVERNANCE 1314

Rule 2000 The SEF 1314

Rule 2100 Board 1314

Rule 2200 Officers 1415

Rule 2201 Chief Compliance Officer 1415

Rule 2300 Qualification of Chief Compliance Officer 1516

Rule 2301 Qualifications of Directors, Panel Members, Committee Members and Officers 1617

Rule 2400 [Reserved] 1718

Rule 2401 Regulatory Oversight Committee 1718

Rule 2500 Conflicts of Interest Relating to Self-Regulatory Actions 1819

Rule 2501 Voting by Interested Parties 1920

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

Disclosure of Confidential Information 2223

Rule 2600 Services Agreement with a Regulatory Services Provider 2324

Rule 2601 Services Agreement with Other Service Providers 2324

Rule 2602 Prohibited Use of Data Collected for Regulatory Purposes 2324

SECTION 3 PARTICIPANT ACCESS RULES 2425

Rule 3000 Qualifications 2425

Rule 3100 Application Requirements 2526

Rule 3101 Review of Application 2627

Rule 3102 Acceptance as a SEF Participant 2627

Rule 3103 Denial, Conditioning or Termination of Participant Status 2627

Rule 3104 Duty to Keep Current 2728

Rule 3105 Withdrawal of Participant; Temporary Deactivation of Trading Privileges 2728

Rule 3106 Dissolution of Participants 2829

Rule 3107 Jurisdiction and Application of SEF Rules 2829

Rule 3108 Notices to Participants 2930

Rule 3109 Authorized Traders 2930

Rule 3110 Sponsored Access 3031

Rule 3111 [Reserved] 3233

Rule 3112 Introducing Brokers 3233

Rule 3113 Authorized Representatives 3233

Rule 3114 Communications between the SEF and Participants 3233

Rule 3115 Recording of Communications 3334

Rule 3200 Change of Control; Non-Assignment 3334

Rule 3300 Fees 3334

Rule 3301 Volume Discounts 3435

Rule 3400 ISVs 3435

Rule 3500 Customers and Clients 3536

Rule 3501 Disclosure Requirements; Know Your Counterparty Requirements 3536

SECTION 4 TRANSACTION EXECUTION 3637

Rule 4000.A. Trading Hours 3637

Rule 4000.B. Swap Specifications 3637

Rule 4001 Procedures 3637

Rule 4002 Required Identifications 3738

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Rule 4003.A. Execution of Transactions 3738

Rule 4003.B. Order Book 3839

Rule 4003.C. Trade at Settlement Cross Transactions 4243

Rule 4004 Permitted Cross Transactions 4344

Rule 4005 Mishandling of Customer Orders 4344

Rule 4006 Trading Halts 4345

Rule 4007 Termination of the SEF Connection 4345

Rule 4008 Risk Controls 4445

Rule 4009 Priority of Customers’ Orders 4445

Rule 4010 Trading Against Customers’ Orders Prohibited; Withholding Orders Prohibited 4445

Rule 4011 Time Delay Requirement for Required Cross Transactions 4546

Rule 4012 Confirmations and USIs 4546

Rule 4013.A. Cleared Swaps 4748

Rule 4013.B. Uncleared Swaps 5152

Rule 4014 Information Regarding Orders and Dissemination of Trade Data 5153

Rule 4015 Enforceability 5253

Rule 4016 Block Trades 5253

Rule 4017 Pre-Execution Credit Checks 5355

Rule 4018 Risk Mitigation Sessions 5455

Rule 4100 SEF Rules Do Not Limit Emergency Powers 5455

Rule 4101 Position Limits 5456

Rule 4102 Exemptions from Position Limits 5556

Rule 4103 Position Accountability 5556

Rule 4104 Enforcement of Position Limits and Position Accountability Levels 5557

Rule 4105 Prime Broker Transactions 58

SECTION 5 CONDUCT OF PARTICIPANTS AND OTHER PERSONS 5760

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

Clients 5760

Rule 5001 Required Disclosures to the SEF 5760

Rule 5100 Abusive Trading Practices Prohibited 5962

Rule 5101 Good Faith Bids and Offers 6063

Rule 5102 Invalid Transactions 6063

Rule 5103 Trade Cancellation, Correction, Offset and Adjustment 6164

Rule 5103.A. SEF Authority Regarding Trade Cancellation, Correction, Offset and Adjustment 6164

Rule 5103.B. Transaction Price Review 6164

Rule 5103.C. Review of Transactions for Errors 6265

Rule 5103.D. Records and Reporting of Cancellations and Price Adjustments 6366

Rule 5103.E. Cancellation of Prime Brokerage Transactions 66

Rule 5104 Misuse of the SEF 6367

Rule 5200 Rule Violations 6367

Rule 5201 Fraudulent Acts Prohibited 6468

Rule 5202 [Reserved] 6468

Rule 5203 Fictitious or Wash Transactions; Permitted Pre-Execution Communications 6468

Rule 5204 Market Disruptions Prohibited 6569

Rule 5205 Market Manipulation Prohibited 6569

Rule 5206 Disruptive Trading Practices Prohibited 6569

Rule 5207 Prohibition of Misstatements 6569

Rule 5208 Acts Detrimental to the SEF Prohibited 6669

Rule 5209 Adherence to Law 6669

Rule 5210 Communications with the Public and Promotional Material 6670

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Rule 5300 Duty to Supervise 6670

Rule 5400 Inspections by the SEF 6670

Rule 5500 Information-Sharing 6771

Rule 5600 Minimum Financial and Related Reporting Requirements 6871

Rule 5601 Confidentiality of Financial and Other Information 6872

Rule 5602 Authority to Impose Restrictions 6872

Rule 5603 Additional Disclosure Requirements 6872

Rule 5700 Gifts and Gratuities 6972

Rule 5701 Anti-Money Laundering and Anti-Terrorism 6972

Rule 5702 Market Data 6973

Rule 5703 Extension or Waiver of SEF Rules 7073

SECTION 6 ENFORCEMENT OF RULES AND DISCIPLINARY PROCEEDINGS 7174

Rule 6000 General 7174

Rule 6001 Inquiries and Investigations 7275

Rule 6002 Reports of Investigations 7376

Rule 6003 Opportunity to Respond 7477

Rule 6004 Review of Investigation Reports 7477

Rule 6005 Notice of Charges 7679

Rule 6006 Answer to Notice of Charges 7679

Rule 6007 Service of Notice of Charges 7780

Rule 6008 Settlement Offers 7780

Rule 6009 Disciplinary Panel 7982

Rule 6010 Convening Hearings of Disciplinary Proceedings 7982

Rule 6011 Respondent Review of Evidence 8083

Rule 6012 Conducting Hearings of Disciplinary Proceedings 8184

Rule 6013 Decision of Disciplinary Panel 8285

Rule 6014 Sanctions 8386

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

Other Summary Actions 8487

Rule 6016 Summary Imposition of Fines 8790

Rule 6017 Warning Letters 8891

Rule 6018 Summary Access Denial Actions 8891

Rule 6019 Rights and Responsibilities after Suspension, Temporary Deactivation or Termination8891

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

Effectiveness of Disciplinary and Access Denial Actions 8992

Rule 6021 Costs 9093

Rule 6022 Ex Parte Communications 9093

Rule 6023 [Reserved] 9194

Rule 6024 Extension or Waiver of the SEF Rules 9194

Rule 6025 Effect of Amendment, Repeal or New SEF Rule 9194

Rule 6026 [Reserved] 9194

Rule 6027 Governing Law, Jurisdiction and Dispute Resolution 9194

Rule 6028 Limitation of Liability, Indemnity 9295

SECTION 7 EMERGENCIES 9598

Rule 7000 Emergency Rules 9598

SECTION 8 RECORDKEEPING AND REPORTING 97100

Rule 8000 Maintenance of Books and Records by the SEF 97100

Rule 8001 Order Information 97100

Rule 8002 Books and Records 99102

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Rule 8003 Recordkeeping Requirements for Block Trades 100103

Rule 8004 Access to Position Information 101104

Rule 8005 Reporting to a Swap Data Repository 101104

Rule 8006 Timely Publication of Trading Information 102105

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, in each case, applicable to that

Person’s activities on or in respect of the SEFsuch 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

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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 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 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” or “CTI 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, or pursuant to the rules of, the SEF.

“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 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, 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

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

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

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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.

“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.

“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).

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“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.

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

Letter 17-55.

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“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 is

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

that are non-deliverable forwards.

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“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/NonMAT 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

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

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

be amended from time to time.

“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 prenegotiation.

“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.

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“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.

“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.

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“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.

“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) 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,

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

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

(3) establishing and administering written policies and procedures reasonably designed

to prevent violations of the CEA and CFTC Regulations;

(4) taking reasonable steps to ensure compliance with the CEA and CFTC

Regulations;

(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;

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

response, remediation, retesting and closing of noncompliance issues;

(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;

(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);

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

the SEF by a Regulatory Services Provider; and

(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 SelfRegulatory 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 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;

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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;

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(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

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

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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) 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

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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

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

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(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 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 (iiiiv) as required pursuant to Applicable Law.

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(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.

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 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,

affirmative consent. 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

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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 monitor its Participants to ensure that 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, 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.

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(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:

(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

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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 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 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;

(2) execute an ISV participation agreement in the form supplied by the SEF;

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(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

standards for Swap Dealers and Major Swap Participants in their dealing with

counterparties.

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(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 placedexecuted

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

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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:

(i) “Day” (or “Fill-and-Store”) Orders are only good for the Business Day

and applicable Trading Hours in which they are entered.

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(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/GB

P 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:

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(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

Execution Specialists via telephone and/or via electronic modes of communication

such as email and instant message.

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(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-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.

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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 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 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, the offer-side Orderone side of the potential

Transaction (the “Displayed Order”) shall be entered into the Order Book as a firm

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quote and exposed to the market for at least 15 seconds before the bid-side

Ordersecond 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 ConformationConfirmation, such counterparty or, 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 or, 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

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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.

(4) For each Uncleared Swap executed on or pursuant to the rules of the SEF, 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. 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 counterparties)

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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

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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 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 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 NonSelf-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 behalf

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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 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 the

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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 Orders or Permitted

Cross Transactions in the name of and on behalf of that Prime Broker.

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(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) 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;

(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;

(g) keep any User IDs, account numbers and passwords related to the SEF confidential;

(h) employ practices to monitor and enforce compliance with risk limits established in

conformance with Applicable Law; and

(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-running;

(2) wash trading;

(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));

(4) fraudulent trading;

(5) money passes;

(6) fictitious transactions;

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(7) non-competitive transactions (unless otherwise exempt or excluded pursuant to the

SEF Rules);

(8) accommodation trading; or

(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 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

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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, 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.

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(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

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.

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(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.

(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

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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,

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

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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 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);

(4) Package Transactions (Order Book Exempt); and

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(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 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

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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 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

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(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

authority) if the SEF considers such arrangement to be in furtherance of the SEF’s

purpose or duties under Applicable Law.

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(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.

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

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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 TransactionTrade

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.

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(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;

(4) initiating 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

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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 to the

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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:

(1) are privileged or constitute attorney work product;

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(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;

(2) call and examine witnesses; and

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(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

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

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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 lawApplicable

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 (20

th) 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 reconsideration by

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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 lawApplicable 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

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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

(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

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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

(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.

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(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.

(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

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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

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

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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 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

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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 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

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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

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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, 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 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 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; and

(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'sSEF’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

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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, or pursuant

to the rules of, the SEF 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, or pursuant to

the rules of, the SEF 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 or pursuant to the rules of the SEF, 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 or pursuant to the rules of the SEF, 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)

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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, or pursuant to the rules of, the SEF 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 or pursuant to the

rules of the SEF, 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, or pursuant to the rules of, the SEF 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, or

pursuant to the rules of, the SEF 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

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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, or pursuant to the rules of, the SEF, 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.

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