2023v43

Nodal Exchange Rulebook 

BY ACCESSING, ORINITIATING, ENTERING ANY ORDER INTO,OR EXECUTING A 

TRANSACTION ON OR SUBJECT TO THE RULES OF THE EXCHANGE, DIRECTLY 

OR THROUGH AN FCM PARTICIPANT, AND WITHOUT ANY NEED FOR ANY 

FURTHER ACTION, UNDERTAKING OR AGREEMENT, ANY PERSON, INCLUDING 

A PARTICIPANT (INCLUDING AN FCM PARTICIPANT), CUSTOMER, AUTHORIZED 

USER, OR AUTHORIZED BROKER, AGREES AND CONSENTS (I) TO BE BOUND BY, 

AND COMPLY WITH, THE RULES AND APPLICABLE LAW, IN EACH CASE TO THE 

EXTENT APPLICABLE TO IT, HIM OR HER, AND (II) TO BECOME SUBJECT TO 

THE JURISDICTION OF THE EXCHANGE WITH RESPECT TO ANY AND ALL 

MATTERS ARISING FROM, RELATED TO, OR IN CONNECTION WITH, THE 

STATUS, ACTIONS OR OMISSIONS OF SUCH PARTICIPANT OR AUTHORIZED 

USER.PERSON. 
NODAL EXCHANGE RULEBOOK

2023v34

TABLE OF CONTENTS 

Page No. 

SECTION I DEFINITIONS ...................................................................................... 5

SECTION II GOVERNANCE .................................................................................. 16

2.1 Composition of the Board; Board Powers .................................................... 16

2.2 Officers ............................................................................................................. 17

2.3 Eligibility/Fitness............................................................................................. 18

2.4 Committees ...................................................................................................... 19

2.5 Confidentiality ................................................................................................. 20

2.6 Conflicts of Interest......................................................................................... 21

2.7 Maintenance of Books and Records by the Exchange ................................. 22

2.8 Information-Sharing Arrangements ............................................................. 23

2.9 Regulatory Services Provider ........................................................................ 23

2.10 Use of Proprietary Data and Personal Data ................................................. 24

2.11 Reporting Requirements ................................................................................ 25

SECTION III PARTICIPATION AND ACTIVITIES ON THE EXCHANGE ... 26

3.1 Consent to Jurisdiction ................................................................................... 26

3.2 Participants and Customers ........................................................................... 26

3.3 Requirements for Participants....................................................................... 26

3.4 Minimum Financial, Segregation and Related Reporting Requirements . 28

3.5 Requirements for Participants eEngaging in Pphysical Ddelivery of 

Eenvironmental Productscontracts ................................................................... 303030

3.6 Additional Requirements for Participants Eengaging in the Pphysical 

Ddelivery forof California Low Carbon Fuel Standard (“LCFS”) and Oregon 

Clean Fuels Program (“Oregon CFP”) futures contracts ....................................... 30

3.7 Additional Requirements for Participants Mmaking or Ttaking Pphysical 

Ddelivery of Renewable Identification Numbers (“RINs”) ............................ 323232

3.8 Eligible Facility Criteria for RINs ......................................................... 333333

3.9 Duties and Responsibilities of Participants .......................................... 353535

3.10 Authorized Users ..................................................................................... 363636

3.11 Duties and Responsibilities of Authorized Users ................................. 373737

3.12 FCM Clearing Members Accessing the Exchange ............................... 383838

3.13 Independent Software Vendors ............................................................. 383838

3.14 Required Notices ..................................................................................... 383838

3.15 Account Administrators ......................................................................... 393939

3.16 Access Requirements and Terms ........................................................... 404040

3.17 Dues and Fees .......................................................................................... 414141

3.18 Inspections by the Exchange .................................................................. 414141

3.19 Liquidity Provider Program .................................................................. 414141

3.20 Authorized Brokers ................................................................................ 414142

3.21 FCM Participants .......................................................................................... 43
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2023v34

SECTION IV MARKET OPERATIONS ......................................................... 464647

4.1 MarketTrading Hours and Operation .................................................. 464647

4.2 Nodal Contracts Offered ........................................................................ 494950

4.3 Use of User IDs ........................................................................................ 515152

4.4 Central Limit Order Book Trades – Nodal T7 .................................... 525253

4.5 Central Limit Order Book Trades – Nodal LiveTrade ....................... 555556

4.6 Block Trades ............................................................................................ 565657

4.7 Exchange for Related Position (EFRP) ................................................. 595960

4.8 Position Transfers ................................................................................... 616162

4.9 Trade Cancellations; Trade Reviews .................................................... 626263

4.10 Futures Expiry, Options and Physical Settlements ............................. 626263

4.11 Recordkeeping; Audit Trail ................................................................... 656566

4.12 Information Regarding Orders ............................................................. 666667

4.13 Disaster Recovery; Business Continuity ............................................... 666667

4.14 Trading Information ............................................................................... 666667

4.15 Trade Allocation .............................................................................................. 67 

SECTION V CLEARING ................................................................................. 686869

5.1 Submission to Clearing House ............................................................... 686869

5.2 Clearing Members .................................................................................. 686869

5.3 Responsibility of Participants ................................................................ 707071

5.4 Clearing Services ..................................................................................... 717172

5.5 Rules of the Clearing House ................................................................... 717172

5.6 Notice of Arbitration............................................................................... 717172

5.7 Additional Terms Applicable to Clearing............................................. 727273

SECTION VI PARTICIPANT CODE OF CONDUCT .................................. 737374

6.1 Ethical Standards .................................................................................... 737374

6.2 Sound Trading Practices ........................................................................ 747475

6.3 Pre-Arranged Trades, “Money Passing” Prohibited ........................... 777778

6.4 Disciplinary Procedures; Termination of Connection......................... 787879

6.5 Position Limits ......................................................................................... 787879

6.6 Position Accountability ........................................................................... 848485

6.7 Reports of Large Positions ..................................................................... 848485

6.8 Aggregation of Positions ......................................................................... 858586

6.9 Reporting Levels, Position Accountability Levels and Position Limits

868687

6.10 Information Disclosure and Documentation ........................................ 868687

6.11 Compliance Programs ............................................................................ 868687

SECTION VII DISCIPLINE AND ENFORCEMENT ..................................... 888889

7.1 Disciplinary and Enforcement Procedures – General ......................... 888889

7.2 Process Considerations ........................................................................... 888889

7.3 Disciplinary Matters ............................................................................... 898990

7.4 Summary Actions .................................................................................. 9999100
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2023v34

7.5 Appeal from Hearing Panel Decisions and Summary Actions ..... 100100101

7.6 Rights and Responsibilities After Suspension or Termination ..... 103103104

7.7 Notice to the Respondent, the CFTC, and the Public .................... 104104105

SECTION VIII ARBITRATION .................................................................... 105105106

8.1 Arbitration Requirement ................................................................. 105105106

8.2 Arbitration Proceedings ................................................................... 105105106

8.3 Penalties ............................................................................................. 106106107

SECTION IX MISCELLANEOUS ............................................................. 107107108

9.1 Trading by Exchange Officials Prohibited; Misuse of Material, Non-Public 

Information .................................................................................................... 107107108

9.2 Market Data ...................................................................................... 108108109

9.3 Recording of Communications ........................................................ 109109110

9.4 Confidentiality and Disclosure of Information .............................. 109109110

9.5 Force Majeure ................................................................................... 110110111

9.6 Extension or Waiver of Rules .......................................................... 110110111

9.7 Notice and Effect of Amendment, Repeal or New Rule ................ 111111112

9.8 Signatures .......................................................................................... 111111112

9.9 Governing Law; Legal Proceedings ................................................ 111111112

9.10 LIMITATION OF LIABILITY; NO WARRANTIES .................. 112112113

9.12 Requirements for Non-U.S. Participants and Customers ......................... 114

APPENDIX A - CONTRACT SPECIFICATIONS 

APPENDIX B - MINIMUM BLOCK SIZES FOR NODAL EXCHANGE 

CONTRACTS 

APPENDIX C - REPORTING LEVELS, POSITION ACCOUNTABILITY 

LEVELS AND POSITION LIMITS 
NODAL EXCHANGE RULEBOOK

2023v34 5

SECTION I DEFINITIONS

1.1 Account Administrator. Either or both of a Level 1 Account Administrator and/or 

a Level 2 Account Administrator, as the context may require. 

1.2 Affiliate. A Person who directly or indirectly, controls, is controlled by, or is under 

common control with another Person. 

1.3 Allowance has the meaning set forth in the Nodal Clear Rulebook. 

1.4 Appeals Committee. A panel comprised of a chair and two individuals appointed 

by the Board to consider appeals under Section VII.

1.5 Applicable Law. With respect to any Person, any statute, law, regulation, rule or 

ordinance of any governmental or self-regulatory authoritySelf-Regulatory 

Organization applicable to such Person, including the CEA and CFTC Regulations. 

1.6 Application Program Interface or API has the meaning set forth in Rule 3.16.4. 

1.7 Associated Person has the meaning set forth in CFTC Regulation 1.3.

1.61.8 Audit Trail has the meaning set forth in Rule 4.11.1.

1.71.9 Authorized Broker. A regulated intermediary, as defined in Rule 3.20, approved 

by the Exchange to submit Block Trades accepted on behalf of Participants or 

Customers to clear through specific accounts set up by Clearing Members.

1.81.10 Authorized User. A natural person who is either employed by or is an agent of a 

Clearing Member, a Participant, a Customer, or Authorized Broker and who is 

authorized by the Exchange asis an Authorized User in accordance with Rule 3.910. 

1.91.11 Block Trade. A privately negotiated transaction in a Nodal Contract that meets 

certain quantity thresholds and that is permitted to be executed off Exchange and 

reported in accordance with Rule 4.6.

1.101.12 Board. The Board of Directors of Nodal Exchange, LLC. 

1.111.13 Business Day. Any day on which the Exchange is open for trading.

1.121.14 CEA. The Commodity Exchange Act, as it may be amended from time to 

time. 

1.131.15 Central Limit Order Book or CLOB. The trading facilities operated by 

Nodal Exchange to provide Participants with the ability to execute Transactions 

from the interaction of bids and offers within a predetermined, nondiscretionary 
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2023v34 6

automated trade matching execution algorithm. Nodal Exchange operates two 

CLOBs, Nodal LiveTrade and Nodal T7.

1.141.16 CFTC or Commission. The Commodity Futures Trading Commission.

1.151.17 CFTC Regulations. The regulations of the CFTC, as they may be amended 

from time to time.

1.161.18 Chairman. The Chairman of the Board.

1.171.19 Chief Executive Officer. The individual appointed by the Board to serve 

as the Exchange’s chief executive officer.

1.181.20 Chief Regulatory Officer. The individual appointed by the Board to serve 

as the Exchange’s chief regulatory officer.

1.191.21 Clearing House. Nodal Clear, LLC or such additional or successor central 

counterparties as the Exchange may designate from time to time to provide clearing 

services with respect to any or all of its Nodal Contracts. A Clearing House is 

registered with the CFTC as a derivatives clearing organization. 

1.201.22 Clearing Member. An entity meeting the requirements of, and approved 

for, clearing membership at the Clearing House that is authorized pursuant to the 

Clearing House Rules to clear trades in any or all Nodal Contracts. Except for those 

Clearing Members that clear solely for their own proprietary accounts (each, an 

“Individual Clearing Member”), all other Clearing Members must be registered 

with the CFTC as FCMs (each, an “FCM Clearing Member”). 

1.211.23 CME Business Day. In a given cCommodity, any day on which a settlement 

price is determined by the CME.

1.221.24 Code. The Participant Code of Conduct set forth in Section VI of these 

Rules.

1.25 Commodity. Any and all goods, articles, services, rights and interests in which 

Nodal Contracts are presently or in the future dealt in, on or subject to the Rules, 

and consistent with the meaning set forth in Section 1a(9) of the CEA and as defined 

in CFTC Regulation 1.3.

1.231.26 Commodity Type. The form of cCommodity price against which a Nodal 

Contract in power is settled. Commodity Type includes but is not limited to: dayahead power (Locational Marginal Price), real-time power (Locational Marginal 

Price), day-ahead energy + congestion, and real-time energy and natural gas as 

defined in the Contract Specifications.

1.241.27 Compliance Department has the meaning set forth in Rule 7.2.1.
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1.251.28 Compliance Manager. A Compliance Department unit that fulfills 

investigatory and disciplinary responsibilities and duties described in Rules 7.2.1 

and, 7.3.1.

1.261.29 Contract Class. A designation that informs the lot size of the Nodal 

Contract. Nodal Contracts on power are grouped into multiple classes, which 

include, but are not limited to: On-Peak and Off-Peak. These classes have variable 

lot sizes that are defined by each ISO and determined by the set of hours in the ISO 

market against which the Nodal Contract settles. Other Nodal Contracts, such as 

natural gas, have fixed lot sizes as specified in the Contract Specifications.

1.271.30 Contract Location. The location or locations against which a Nodal 

Contract settles. For example, the Contract Location for Nodal Contracts on power 

is the Contract Node against which the Nodal Contract settles.

1.281.31 Contract Node. For power contracts, the Nodes or Nodes against which the 

Nodal Contract settles.

1.291.32 Contract Specifications. The descriptions of the contractual items for each 

Nodal Contract as set forth in the document available in Appendix A. Items 

described in the Contract Specifications referenced in this Rulebook include “Last 

Trading Day,” “Daily Settlement Price,” and “Final Settlement Price.”

1.301.33 Contract Term. The length of the settling period for the Nodal Contract, 

including, but not limited to, monthly, weekly and daily Nodal Contracts.

1.34 Customer means a Person who uses an FCM Participant as an agent in connection 

with trading Nodal Contracts. 

1.311.35 Daily Settlement Price has the meaning set forth in Rule 4.10.1(a).

1.32 DAT Business Day. Any day on which a DAT Freight Rate Index is calculated.

1.33 DAT Freight Rate Index. A trucking freight index published by DAT Solutions, 

LLC. 

1.341.36 Deliverable Product or Underlying Contract, as applicable, has the 

meaning set forth in the Contract Specifications of Physically Settled Nodal 

Contracts.

1.37 Direct Access means a direct connection by a Clearing Member or Person to the 

System to enter Orders for Nodal Contracts for execution, which does not pass 

through the credit and risk control infrastructure of a Clearing Member. 

1.351.38 Director. An individual serving on the Board. 

1.361.39 Disciplinary Action has the meaning set forth in Rule 7.1. 
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1.371.40 Disciplinary Panel. Either or both of a Review Panel and a Hearing Panel, 

as the context requires. 

1.41 Eligible Contract Participant or ECP has the meaning set forth in Section 1a(18) 

of the CEA and CFTC Regulation 1.3. 

1.381.42 EFP has the meaning set forth in Rule 4.7.1(a). 

1.391.43 EFRP has the meaning set forth in Rule 4.7. 

1.401.44 Emergency means the occurrences or circumstances which, in the opinion 

of the Board (or Chief Executive Officer or other authorized Officer, as 

appropriate), require immediate action to be taken in accordance with Rule 4.1.3, 

and which threaten, or may threaten, the fair and orderly trading in, or the settlement 

or integrity of, any Nodal Contract, including, without limitation, the following: 

(a) any circumstance that may materially affect the performance of a 

Nodal Contract, including failure of the Clearing House system; 

(b) any action taken by any United States or foreign regulatory, selfregulatory, judicial, arbitral, or governmental (whether national, 

state or municipal) or quasi-governmental authority, or any agency, 

department, instrumentality, or sub-division thereof; or other Person 

exercising, or entitled to exercise any administrative, executive, 

judicial, legislative, police, regulatory or taxing authority or power; 

or any other contract market, clearing house, board of trade, or other 

exchange or trade association (foreign or domestic) that may have a 

direct impact on trading on the Exchange or the settlement legality 

or enforceability of any Nodal Contract; 

(c) any actual, attempted or threatened corner, squeeze, congestion, 

manipulative activity or undue concentration of positions in a Nodal 

Contract; 

(d) any circumstance that may have a severe, adverse effect upon the 

functions and facilities of the Exchange, 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 Trading Platform, or other 

system breakdowns or interruptions such as power, computer, 

communication or transportation systems or the Internet; 

(e) the bankruptcy or insolvency of any Clearing Member or the 

imposition of any injunction or other restraint by any government 

agency, clearing house, court or arbitrator upon a Clearing Member 

which may affect the ability of a Clearing Member to trade in or 

perform on a Nodal Contract; 
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(f) any circumstance in which it appears to the Board that a Clearing 

Member or any other Person: 

i. has failed to perform on a Nodal Contract; 

ii. is insolvent; or 

iii. is in a financial or operational condition or is conducting 

business such that the Clearing Member or Person cannot be 

permitted to continue in business without jeopardizing the 

safety of Participants, other Clearing Members, the 

Exchange or the Clearing House; or 

(g) any other unusual, unforeseeable or adverse circumstance as 

determined by the Exchange. 

1.411.45 EPT. Eastern Prevailing Time. 

1.421.46 Exchange Official. Any Officer or employee of the Exchange and any 

member of the Board, a committee established by the Board, a Disciplinary Panel 

or Appeals Committee. 

1.431.47 Exchange Requirements. The Rules; other requirements implemented by 

the Exchange pursuant to the Rules; each term of a Nodal Contract; and the 

participantparticipation documentation and other contractual obligations between a 

Participantany Person (including its Authorized Users) and the Exchange...

1.441.48 Expiry. A Nodal Contract with a specific date of expiration.

1.451.49 Final Settlement Price. The price for each Nodal Contract supplied by the 

Exchange to the Clearing House as the final Settlement Price for the Expiry as 

specified in the Contract Specifications.

1.461.50 FCM. A futures commission merchant as defined in the CEA and CFTC 

Regulations and registered with the CFTC as such.

1.51 FCM Participant. A Participant that meets the qualifications of Rule 3.21 and is 

authorized by its Customer(s) to trade Nodal Contracts as an agent for and on their 

behalf. 

1.471.52 FOK. “Fill-or-Kill” (FOK) are Orders that may be entered on Nodal T7 

whereby either the total quantity is matched upon Order entry and the Transaction 

is executed or the entire Order is cancelled. 

1.481.53 GFD. Orders entered “Good-for-Day” (GFD) will be deleted at the end of 

the same trading day the Order was entered on Nodal T7. 
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1.491.54 Governmental Authority. The CFTC, aAny domestic or foreign 

government (or political subdivision), governmental or regulatory authority, 

agency, court, commission, or other governmental or regulatory entity (including 

any Self-Regulatory Organization). 

1.501.55 GTC. Orders entered “Good-till-Cancelled” (GTC) on Nodal T7 will 

remain on the Trading Platform until executed as a Transaction or deleted by the 

Participant from the Trading Platform. 

1.511.56 GTD. Orders entered “Good-till-Date” (GTD) on Nodal T7 are valid until 

the date specified by the Participant. In the event such Order is not executed as a 

Transaction by the date specified by the Participant, such Order shall be 

automatically deleted from the Trading Platform during the end of day processing 

on such date. 

1.521.57 Hearing Panel. A disciplinary panel that will, pursuant to the procedures 

set forth in Section VII, adjudicate disciplinary cases pursuant to a notice of charges 

and execute other duties as provided for in Section VII. The members of the 

Hearing Panel will be appointed in accordance with Rule 7.3.8.

1.531.58 Implied Orders. Synthetic orders derived from direct orders bid or offered 

on Nodal T7 by Participants. For example, a direct bid in one contract month by a 

Participant and a direct offer in another contract month in the same futures contract 

by a Participant can create an implied market in the corresponding calendar spread. 

Implied orders, which are only available on Nodal T7, are limited to first generation 

only, i.e., Implied Orders are solely derived from direct orders placed on Nodal T7 

by Participants. An order cannot be implied from another Implied Order. A detailed 

overview of Implied Order functionality is available in the Nodal T7 Functional 

Reference Guide on the Nodal Exchange website at www.nodalexchange.com. 

1.541.59 In-the-Money Option shall mean an Option that has a Strike Price that is 

lower (in the case of a call option) or higher (in the case of a put option) than the 

underlying futures contract for such Option.

1.551.60 Independent Systems Operator (or ISO). The organization that manages 

the power grid and sets the pricing against which Nodal Contracts settle. As used 

in these Rules, the term ISO also applies to regional transmission organizations 

(RTOs), such as PJM Interconnection, and state reliability councils, such as the 

Electric Reliability Council of Texas (ERCOT).

1.561.61 Independent Software Vendor or ISV. A Person that makes available to 

Participants a system or platform offering smart order routing, front-end trading 

applications, an aggregator platform or a combination of the foregoing but that does 

not provide Participants the ability to effect transactions on the Trading Platform.

1.571.62 Individual Trading Account. A trading account to be separately tracked 

and margined by a Participant’s Clearing Member.
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1.581.63 Individual Trading Mnemonic or ITM. An identifying code assigned by 

the Exchange to each Individual Trading Account.

1.591.64 Insolvency and Insolvent means the occurrence of any of the following 

events with respect to a Person: 

(a) the Person is determined to be insolvent by a Government Agency 

or Self-Regulatory Organization; 

(b) if the Person is a member of the Securities Investor Protection 

Corporation, a court of competent jurisdiction finds that the Person 

meets any one of the conditions set forth in subparagraphsclauses

(A), (B), (C) or (D) of Section 5(b)(1) of the Securities Investor 

Protection Act of 1970; 

(c) in the event of the entry or the making of a decree or order by a 

court, Government Agency or other supervisory authority of 

competent jurisdiction (i) adjudging the Person as bankrupt or 

insolvent, (ii) approving as properly filed a petition seeking 

reorganization, arrangement, liquidation, dissolution, adjustment or 

composition of or in respect of the Person under the Bankruptcy 

Code or any other applicable federal, state or other U.S. or non-U.S. 

law, including any bankruptcy, insolvency, reorganization, 

liquidation, dissolution or similar law, (iii) appointing a receiver, 

custodian, liquidator, provisional liquidator, administrator, 

provisional administrator, assignee, trustee, sequestrator or other 

similar official for the Person or for any substantial part of its 

property, (iv) ordering the winding up or liquidation of the Person’s 

affairs or (v) consenting to the institution by the Person of 

proceedings to be adjudicated as a bankrupt or insolvent; 

(d) the filing by the Person of a petition, or any case or proceeding, 

seeking reorganization or relief under the Bankruptcy Code or any 

other applicable federal, state or other U.S. or non-U.S. law, 

including any bankruptcy, insolvency, reorganization, liquidation, 

dissolution or similar law, or the consent by the Person to the filing 

of any such petition, case or proceeding or to the appointment of a 

receiver, custodian, liquidator, provisional liquidator, administrator, 

provisional administrator, assignee, trustee, sequestrator or other 

similar official for the Person or for any substantial part of its 

property, or the making by the Person of an assignment for the 

benefit of its creditors, or the admission by the Person in writing of 

its inability to pay its debts generally as they become due, or the 

taking of corporate or similar action by the Person in furtherance of 

the foregoing. 
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1.601.65 Intra-day Settlement Price has the meaning set forth in Rule 4.10.1(a) of 

these Rules.

1.66 Introducing Broker. An introducing broker as defined in the CEA and CFTC 

Regulations and registered with the CFTC as such. 

1.611.67 IOC. For Orders entered on Nodal T7 as “Immediate-or-Cancel” (IOC), 

either the entire or partial quantity that is not executed as a Transaction immediately 

upon Order entry, shall be deleted from the Trading Platform. 

1.621.68 Last Trading Day is the last day an Expiry may be traded and is defined in 

the Contract Specifications. 

1.631.69 Level 1 Account Administrator. An officer or employee of a Participant 

appointed pursuant to Rule 3.15.1.

1.641.70 Level 2 Account Administrator. An officer or employee of a Participant 

appointed pursuant to Rule 3.15.2.

1.651.71 LLC Agreement. The Limited Liability Company Agreement of the 

Exchange as amended or restated from time to time.

1.72 Login Credentials has the meaning set forth in Rule 3.9 of these Rules.

1.661.73 NFA. National Futures Association, a registered futures association under 

Section 17 of the CEA and a Self-Regulatory Organization.

1.671.74 Nodal Contract. Any contract available on Nodal Exchange for the sale or 

purchase of a Commodity Type for future delivery that is settled either financially 

or physically in accordance with the Contract Specifications, and any Option 

thereof. Settlement is defined in terms of a specific Contract Location, Contract 

Term and Contract Class.

1.681.75 Nodal Exchange or Exchange. Nodal Exchange, LLC, a Delaware limited 

liability company designated by the CFTC as a contract market.

1.691.76 Node. A physical location or group of locations on the power network, as 

defined by the applicable ISO consistent with Rule 4.2. As used in these Rules, 

“Node” means and includes (depending on the context), hubs, zones and similar 

concepts and terms as used by the relevant ISO.

1.701.77 NYMEX Henry Hub Natural Gas Futures (NG). Futures contract offered 

by CME for trading natural gas that is widely used as a national benchmark price 

for trading natural gas. 

1.711.78 Officer has the meaning given to it in Rule 2.2.1.
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1.721.79 Option means a Transaction whereby a Participantone party grants to 

another Participantparty the right, but not the obligation, to buy (call option) or sell 

(put option) a Commodity Type for future deliveryNodal Contract.

1.80 Order means any submission offering to buy or sell a Nodal Contract on or subject 

to the Rules of the Exchange.

1.731.81 Order Routing means any access to the System of the Exchange, other than 

Direct Access.

1.741.82 Out-of-the-Money Option shall mean an Option which has a Strike Price 

that is higher or the same as (in the case of a call option) or lower or the same as 

(in the case of a put option) the price of the underlying futures contract for such 

Option.

1.751.83 Participant. An entityA Person that has signedexecuted the Participant 

Agreement for purposes of entering into Transactionstrading privileges for its own 

account.Proprietary Account or as an FCM Participant for trading privileges to 

allow access to the System on behalf of its Customer(s). In addition, an FCM 

Clearing Member that does not enter into Transactions for its own account shall be 

deemed a Participant hereunder solely for the purpose of accessing the Exchange 

in order to liquidate Transactions and any resulting positions previously submitted 

to the Clearing House for the account of such FCM Clearing Member on behalf of 

a Participant that is in default for failure to perform its obligations to the Exchange 

or such FCM Clearing Member (to the extent applicable).

1.761.84 Participant Agreement. An agreement between Nodal Exchange and a 

Participant which must be signedexecuted in order for a Participant to have Direct 

Aaccess to Nodal Exchange for the execution of tradestrading privileges involving 

commodity derivative productsNodal Contracts and related financial instruments

or as an FCM Participant for trading privileges for and on behalf of its Customers. 

1.771.85 Person means an individual or a partnership, corporation, limited liability 

company, firm, trust, joint venture, joint stock company, association, 

unincorporated organization, government agency or political subdivision thereof, 

or other entity, includinghas the meaning set forth in Section 1a(38) of the CEA 

and in the CFTC Regulations. For the avoidance of doubt, this includes, but is not 

limited to, all Participants (including FCM Participants), Customers, Authorized 

Brokers, Authorized Users, any employees, agents, or representatives of the 

foregoing, and any other entity or natural person.

1.781.86 Physical Settlement or Physically Settled. The transfer of the underlying 

cCommodity of a Nodal Contract between the accounts of the Participant buyer and 

the Participant seller, which shall constitute “delivery.” 

1.79 Pickup Date is a date that represents when a load is to be loaded onto a trailer to 

haul. 
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2023v34 14

1.801.87 Position Transfer. A transaction in a Nodal Contract(s) that is executed by 

Exchange personnel for administrative purposes outlined in Rule 4.8.1. 

1.88 Proprietary Account. An account that has the meaning set forth in CFTC 

Regulation 1.3.

1.811.89 Public Director. A Director having the qualifications set out in Rule 2.1.5.

1.821.90 Reference Price has the meaning set forth in Rule 4.10.4(b).

1.831.91 Registry has the meaning set forth in the Nodal Clear Rulebook.

1.841.92 Registry Operator has the meaning set forth in the Nodal Clear Rulebook.

1.851.93 Regulatory Services Agreement. The agreement(s) between the Exchange 

and the Regulatory Service Provider(s) whereby certain functions mandated under 

the CEA, such as market monitoring and trade practice surveillance, are delegated 

to the Regulatory Services Provider(s).

1.861.94 Regulatory Services Provider. National Futures Association and such other 

organizations, if any, that provide regulatory services to the Exchange, together 

with any such organization’s employees and agents pursuant to the CFTC’s 

Regulations.

1.871.95 Respondent. A Participanterson under investigation for alleged Rule 

violation(s) or against which charges have been filed. 

1.881.96 Review Panel. A Ddisciplinary Ppanel that will, pursuant to the procedures 

set forth in Section VII, review Investigation Reports submitted to it by the Chief 

Regulatory Officer. The members of the Review Panel will be appointed in 

accordance with Rule 7.3.8.

1.891.97 Rules. Any rule, interpretation, stated policy, or instrument corresponding 

to any of the foregoing, including these Rules, in each case as adopted from time to 

time by the Exchange. 

1.901.98 Self-Regulatory Organization has the meaning given that term in CFTC 

Regulation 1.3 and includes a derivatives clearing organization that is registered as 

such with the CFTC.

1.911.99 Settlement Price. The price for each Nodal Contract supplied by the 

Exchange to the Clearing House at mid-day (Intra-Day Settlement Price) or at the 

end of the trading day (Daily Settlement Price).

1.921.100 Strike Price shall mean the price at which the underlying futures contract 

may be purchased or sold pursuant to any Option thereon.
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2023v34 15

1.931.101 Surveillance Team. A Compliance Department unit whose enforcement 

function is to provide market surveillance and monitor trading activities as 

described in Rule 7.2.1.

1.102 System means all networks and Trading Platforms owned and provided by Nodal 

Exchange, including all intellectual property associated therewith, including all 

components, documentation, or specifications.

1.941.103 Tender has the meaning set forth in the Nodal Clear Rulebook.

1.951.104 Trade Group. A set of Expiries in a Block Trade designated to be checked 

against each Participant’s or Customer’s Trade Risk Limit together rather than 

individually.

1.961.105 Trading Platform. The Central Limit Order Book (CLOB). Nodal 

Exchange operates two Trading Platforms, Nodal LiveTrade and Nodal T7. The 

CLOB provides a Person with the ability to execute Transactions from the 

interaction of multiple bids and multiple offers.

1.971.106 Trading Platform Lot Size. The minimum Order volume increments 

allowed on the Trading Platform. The Trading Platform Lot Size will be set forth 

on the Nodal Exchange website at www.nodalexchange.com.

1.981.107 Transaction. Any transaction executed on or pursuant to the Rules of the 

Exchange.

1.991.108 Trade Risk Limit. A risk-based dollar amount set by a Participant’s 

Clearing Member or set by an FCM Participant for its Customers.

1.1001.109 Trading Hours. For any Business Day, the hours specified on the trading 

calendar at www.nodalexchange.com.

1.1011.110 User ID. The unique identifier that is assigned by the Exchange to each 

Authorized User. 

 
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2023v34 16

SECTION II GOVERNANCE

2.1 Composition of the Board; Board Powers 

2.1.1 The Board is authorized to manage the day-to-day business operations of 

the Exchange in accordance with the LLC Agreement. 

2.1.2 The Board will determine which Nodal Contracts are available from time 

to time for trading subject to the Rules, and will approve Rules containing 

Contract Specifications of such Nodal Contracts, provided that the Board 

may delegate the authority to approve such Rules to a Board Committee or 

one or more Officers of the Exchange, provided further that certifications 

or applications with respect to such rules will be submitted to the CFTC as 

required by Applicable Law. 

2.1.3 The Board has the power to call for review, and to affirm, modify, suspend 

or overrule, any and all decisions and actions of committees or special 

committees of the Board or any panel of the Exchange’s officers related to 

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

2.1.4 At all times not less than thirty-five percent (35%) of the Directors, but not 

fewer than two individuals, shall be Public Directors. 

2.1.5 To qualify as a Public Director, an individual must be found, by action of 

the Board, to have no material relationship with the Exchange. The Board 

must make such finding upon the nomination or appointment of the 

Director and as often as necessary in light of all circumstances relevant to 

such Director, but in no case less than annually. A “material relationship” 

is one that reasonably could affect the independent judgment or decisionmaking of the Director. The Board need not consider previous service as a 

Director of the Exchange to constitute a “material relationship.” A Director 

shall be considered to have a “material relationship” with the Exchange if 

any of the following circumstances exist or have existed within the past 

year: 

(a) such Director is an Officer or an employee of the Exchange, or an 

officer or an employee of an Affiliate of the Exchange; 

(b) such Director has an ownership interest in the Exchange; 

(c) such Director is a director, an officer, or an employee of a 

Participant or an entity with ownership interest in the Exchange; 

(d) such Director, or an entity with which the Director is a partner, an 

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

annual payments for legal, accounting, or consulting services from 

the Exchange or its Affiliate. Compensation for services as a 

Director of the Exchange or as a director of an Affiliate thereof does 
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2023v34 17

not count toward the $100,000 payment limit, nor does deferred 

compensation for services rendered prior to becoming a Director, so 

long as such compensation is in no way contingent, conditioned, or 

revocable; 

(e) Any of the “material relationships” set forth above apply to the 

“immediate family” of such Director, i.e., spouse, parents, children, 

and siblings, in each case, whether by blood, marriage, or adoption. 

(f) A Public Director of the Exchange may serve as a director of an 

Affiliate if they otherwise qualify as Public Directors in accordance 

with this Section 2.1.5. 

2.1.6 The compensation of the Public Directors and other non-executive 

members of the Board shall not be linked to the business performance of 

the Exchange. 

2.1.7 The Board shall have procedures, as may be further set forth in policies 

that the Exchange may adopt, to remove a member from the Board where 

the conduct of such member is likely to be prejudicial to the sound and 

prudent management of the Exchange. 

2.1.8 The Board shall establish arrangements to permit consideration of 

Participants in connection with the functioning of the Exchange and with 

additions or amendments to the Rules and shall make a description of such 

arrangements available to the public and to the CFTC. 

2.2 Officers

2.2.1 Subject to the oversight of the Board, the Exchange shall appoint from time 

to time one or more individuals to serve as the Chief Executive Officer, 

Chief Regulatory Officer and may further appoint such other officers of 

the Exchange or any subsidiary of the Exchange (each, an “Officer”) as 

deemed necessary or appropriate, with such titles, duties, and authority as 

the Exchange shall approve, to carry out the business of the Exchange or 

any subsidiary of the Exchange, and upon such terms and conditions as the 

Board shall determine.

2.2.2 Any Officer may also be a director, officer, partner or employee of the 

Exchange or of any of its Affiliates.

2.2.3 The Officers shall have such powers and duties in the management of the 

Exchange as the Board may prescribe from time to time, subject to the 

terms of the LLC Agreement.
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2023v34 18

2.3 Eligibility/Fitness 

2.3.1 An individual may not serve as a Board member, or serve on a committee 

established by the Board, a Disciplinary Panel or an Appeals Committee, 

or hold a 10% or more ownership interest in the Exchange, if the 

individual: 

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

in any action or proceeding brought in a court of competent 

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

have committed a disciplinary offense; 

(b) 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; 

(c) is currently suspended from trading on a Contract Market, 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: (A) a finding of a 

disciplinary offense by a final decision in any action or proceeding 

brought in a court of competent jurisdiction, the CFTC, or any SelfRegulatory Organization; or (B) 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; 

(d) is currently subject to an agreement with the CFTC or SelfRegulatory Organization not to apply for registration with the CFTC 

or for membership in the Self-Regulatory Organization; 

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

revocation or suspension of registration by the CFTC; 

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

(iv) of the CEA; or 

(g) 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 Securities Exchange Act of 1934; or 

(h) is subject to a statutory disqualification pursuant to Section 8a(2) of 

the CEA. 

(i) For purposes of this Rule 2.3.1, the terms “disciplinary offense,” 

“final decision” and “settlement agreement” have the meaning given 

those terms in CFTC Regulation 1.63(a). 
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2023v34 19

2.3.2 Prior to appointment to the Board, each individual shall certify he/she is 

not disqualified pursuant to Rule 2.3.1. Upon appointment, each member 

of the Board shall provide to the Exchange, where applicable, changes in 

registration information within thirty (30) days and certification of 

compliance accordingly. In addition, each member will certify on at least 

an annual basis regarding their continued compliance with Rule 2.3.1. The 

Exchange shall verify information supporting Board compliance with 

eligibility criteria. 

2.3.3 In addition, to serve as a member of the Board, an individual must possess 

the ability to contribute to the effective oversight and management of the 

Exchange, taking into account the needs of the Exchange and such factors 

as the individual’s experience, perspective, skills and knowledge of the 

industry in which the Exchange operates. This shall include sufficient 

expertise, where applicable, in financial services, risk management, and 

clearing services. 

2.4 Committees

2.4.1 The Board shall have at least the three following standing committees: the 

Nominating Committee, the Exchange Participant Committee, and the 

Regulatory Oversight Committee, each with the roles and responsibilities 

set out below. 

2.4.2 Nominating Committee. The Nominating Committee of the Board shall 

consist of at least 51% Public Directors. The Nominating Committee 

reports to the Board and shall be chaired by a Public Director. The 

Nominating Committee shall be responsible for (i) identifying individuals 

qualified to serve on the Board, consistent with the criteria that the Board 

require and any composition requirement that the Commission 

promulgates; and (ii) administering a process for the nomination of 

individuals to the Board. 

2.4.3 Exchange Participant Committee. The Exchange Participant Committee 

of the Board reports to the Board and shall consist of at least 35% Public 

Directors. The Exchange Participant Committee is responsible for (i) 

determining the standards and requirements for initial and continuing 

Participant eligibility, (ii) reviewing appeals of staff denials of Participant 

applications, and (iii) reviewing appeals by an FCM Clearing Member 

regarding the Exchange’s refusal to grant access, and (iv) approving Rules 

that would result in different categories or classes of Participants receiving 

disparate access to the Exchange. The Exchange Participant Committee 

shall not, and shall not permit the Exchange to, restrict access or impose 

burdens on access in a discriminatory manner, within each category or 

class of Participants or between similarly situated categories or classes of 

Participants. 
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2023v34 20

2.4.4 Regulatory Oversight Committee. The Regulatory Oversight Committee 

of the Board shall report to the Board and consist of 100% Public Directors. 

The Regulatory Oversight Committee shall oversee the Exchange’s 

regulatory program on behalf of the Board with the authority to (i) monitor 

the regulatory program of the Exchange for sufficiency, effectiveness, and 

independence and (ii) oversee all facets of the regulatory program, 

including: 

(a) 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; 

(b) reviewing the size and allocation of the regulatory budget and 

resources, and the number, hiring, termination, and compensation of 

regulatory personnel; 

(c) supervising the Chief Regulatory Officer of the Exchange, who will 

report directly to the Regulatory Oversight Committee; 

(d) recommending changes that would ensure fair, vigorous, and 

effective regulation; and 

(e) reviewing all regulatory proposals prior to implementation and 

advising the Board as to whether and how such changes may impact 

regulation. 

2.4.5 In addition to the standing committees, the Board shall have the power and 

authority to create and terminate, in accordance with the LLC Agreement, 

special committees of the Board and designate their composition, 

responsibilities and powers. 

2.5 Confidentiality 

2.5.1 No member of the Board or any committee established by the Board or by 

or pursuant to the Rules will use or disclose any material non-public 

information obtained in connection with such member’s participation in 

the Board or such committee for any purpose other than the performance 

of his or her official duties as a member of the Board or such committee.

2.5.2 No officer, employee or agent of the Exchange will (i) trade in any 

commodity interest if such officer, employee or agent obtained material 

non-public information concerning such financial instrument in connection 

with such employee’s, officer’s or agent’s employment or (ii) disclose to 

any other Person material non-public information obtained in connection 

with such employee’s, officer’s or agent’s employment, if such employee, 
NODAL EXCHANGE RULEBOOK

2023v34 21

officer or agent could reasonably expect that such information might assist 

another Person in trading any commodity interest.

2.6 Conflicts of Interest 

2.6.1 Named Party In Interest Conflict

(a) No member of the Board, any Disciplinary Panel or any Appeals 

Committee will knowingly participate in such body’s deliberations 

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

such member (i) is the named party in interest in the matter, (ii) is 

an employer, employee or fellow employee of a named party in 

interest, (iii) has any other significant, ongoing business relationship 

with a named party in interest, excluding relationships limited to 

Nodal Contracts, or (iv) has a family relationship with a named party 

in interest. 

(b) Prior to consideration of any matter involving a named party in 

interest, each member of the deliberating body who does not choose 

to abstain from deliberations and voting will disclose to the Chief 

Regulatory Officer whether such member has one of the 

relationships listed in clause (a) above with a named party in 

interest. 

(c) The Chief Regulatory Officer will determine whether any member 

of the relevant deliberating body who does not choose to abstain 

from deliberations and voting is subject to a conflicts restriction 

under this paragraph (c). Such determination will be based upon a 

review of the following information: (A) information provided by 

such member pursuant to clause (b) above; and (B) any other source 

of information that is held by and reasonably available to the 

Exchange. 

2.6.2 Financial Interest in a Significant Action Conflict 

(a) No member of the Board, any Disciplinary Panel, any Appeals 

Committee or any other disciplinary committee of the Exchange will 

participate in such body’s deliberations and voting on any 

significant action if such member has a direct and substantial 

financial interest in the result of the vote, as determined pursuant to 

clause (c) below. 

(b) Prior to consideration of any significant action, each individual who 

does not choose to abstain from deliberations and voting will 

disclose to the Chief Regulatory Officer any information that may 

be relevant to a determination of whether such member has a direct 

and substantial financial interest in the result of the vote. 
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2023v34 22

(c) The Chief Regulatory Officer will determine whether any individual 

who does not choose to abstain from deliberations or voting is 

subject to a conflicts restriction under this paragraph (c). Such 

determination will be based upon a review of the following 

information: (A) the most recent large trader reports and clearing 

records available to the Exchange; (B) information provided by such 

member pursuant to clause (b) above; and (C) any other information 

reasonably available to the Exchange, taking into consideration the 

exigency of the significant action being contemplated. 

(d) Any member of the Board, any Disciplinary Panel, any Appeals 

Committee or any other disciplinary committee of the Exchange 

who would otherwise be required to abstain from deliberations and 

voting pursuant to clause (a) above may participate in deliberations, 

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

specified below, determines that such participation would be 

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

reaching any such determination, the deliberating body will fully 

consider the information specified in clause (b) above which is the 

basis for such member’s substantial financial interest in the 

significant action that is being contemplated. In making its 

determination, the deliberating body will consider: (A) whether such 

member’s participation in the deliberations is necessary to achieve 

a quorum; and (B) whether such member has unique or special 

expertise, knowledge or experience in the matter being considered. 

2.6.3 The minutes of any meeting to which the conflicts determination 

procedures set forth in this Rule apply will reflect the following 

information:

(a) the names of all members of the relevant deliberating body who 

attended such meeting in person or who otherwise participated in 

such meeting; 

(b) the name of any member of the relevant deliberating body who 

voluntarily recused himself or herself or was required to abstain 

from deliberations or voting on a matter and the reason for the 

recusal or abstention, if stated; 

(c) the information that was reviewed for each member of the relevant 

deliberating body; and 

(d) any determination made in accordance with clause (d) of Rule 2.6.2 

above.

2.7 Maintenance of Books and Records by the Exchange 
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2023v34 23

2.7.1 The Exchange shall keep, or cause to be kept, complete and accurate books 

and records of accounts of the Exchange, including all books and records 

required to be maintained pursuant to the CEA, and the CFTC Regulations. 

2.7.2 The Exchange shall retain all such books and records for at least five (5) 

years, and shall make such books and records readily accessible for 

inspection by the CFTC and the U.S. Department of Justice during the first 

two (2) years of such five-year period. 

2.8 Information-Sharing Arrangements 

2.8.1 The Exchange may enter into information-sharing agreements or other 

arrangements or procedures to coordinate surveillance with other markets 

on which financial instruments related to the Nodal Contracts trade. As 

part of any information-sharing agreements or other arrangements or 

procedures adopted pursuant to this Rule, the Exchange may: 

(a) provide market surveillance reports to other markets; 

(b) share information and documents concerning current and former 

Participants, Customers, or Authorized Brokers with other markets; 

(c) share information and documents concerning ongoing and 

completed investigations with other markets; or 

(d) require its current or former Participants, Customers, and 

Authorized Brokers to provide information and documents to the 

Exchange at the request of other markets with which the Exchange 

has an information-sharing agreement or other arrangements or 

procedures. 

2.8.2 The Exchange may enter into any arrangement with any Person or body 

(including the CFTC, the NFA, any Self-Regulatory Organization, any 

exchange, market, or clearing organization, or foreign regulatory 

authority) if the Exchange considers such arrangement to be in furtherance 

of the Exchange’s purpose or duties under the Rules or any law or 

regulation. 

2.9 Regulatory Services Provider 

2.9.1 The Exchange may contract with a Regulatory Services Provider to 

provide certain regulatory services to the Exchange pursuant to a 

Regulatory Services Agreement. In accordance with the relevant 

Regulatory Services Agreement, a Regulatory Services Provider may 

perform certain surveillance, investigative, and regulatory functions under 

the Rules and the Exchange may provide information to such Regulatory 

Services Provider in connection with the performance by such Regulatory 

Services Provider of those functions. 
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2023v34 24

2.9.2 Any of the powers or functions of the Exchange under the Rules may be 

delegated to a Regulatory Services Provider pursuant to the relevant 

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

Exchange and such Regulatory Services Provider may mutually agree; 

provided, however, that the Exchange shall retain ultimate decisionmaking authority with respect to any powers or functions that are delegated 

to such Regulatory Services Provider. 

2.10 Use of Proprietary Data and Personal Data 

2.10.1 The Exchange may not use for business or marketing purposes any 

proprietary data or personal information collected or received, from or on 

behalf of any Person, for the purpose of fulfilling its regulatory obligations; 

provided, however, that the Exchange may use such data or information 

for such purposes with the consent of the Person from whom such data or 

information is collected or received.

2.10.2 Notwithstanding the provisions of Rule 2.10.1, the Exchange may share 

such proprietary data or personal information with one or more registered 

entities (as such term is defined in CFTC Regulations). 

2.10.3 Access to the Exchange may not be conditioned upon the use of proprietary 

data or personal information for business or marketing purposes.

2.10.4 The use and processing of Personal Data relating to individuals in the 

European Union will be subject to the General Data Protection Regulation 

(EU) 2016/679, which has given the meaning to the following terms used 

in this section: “Process”, “Personal Data” and “Controller.” The 

Exchange is a Controller with respect to Personal Data provided by 

Participants, Authorized Users, Authorized Brokersany Person, and theirits

respective representative(s), to the Exchange. With respect to any Personal 

Data provided to the Exchange, each Participant and Authorized Broker 

shall ensure that they have a lawful basis for Processing the relevant 

Personal Data in this manner. In additionaccordance with Applicable Law, 

each Participant, Authorized Broker,Person and the Exchange:

(a) Acknowledges that the recording of conversations between trading, 

clearing, and other relevant personnel of the Participant or 

Authorized Broker (and/or their respective Affiliates), or 

Customers, and the Exchange in connection with the Rules and any 

Nodal Contract, potential Nodal Contract, or Transaction will take 

place to the extent permitted or required under aApplicable lLaws; 

(b) Agrees, to the extent permitted by aApplicable lLaw, that recordings 

may be submitted as evidence in any dispute; 

(c) Acknowledges that the other provisions of this section shall apply 

to any such recordings made by the Exchange; and 
NODAL EXCHANGE RULEBOOK

2023v34 25

(d) Consents to such disclosures being made in accordance with 

Exchange Rules and as required under aApplicable lLaws including, 

without limitation, CFTC regulations and the CEA. 

2.11 Reporting Requirements 

2.11.1 In the event the Board rejects a recommendation or supersedes an action 

of the Regulatory Oversight Committee or the Exchange Participant 

Committee, the Exchange shall submit a written report to the CFTC 

detailing: (1) the recommendation or action of the Regulatory Oversight 

Committee or the Participation Committee; (2) the rationale for such 

recommendation or action; (3) the rationale of the Board for rejecting such 

recommendation or superseding such action; and (4) the course of action 

that the Board decided to take contrary to such recommendation or action. 

 
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2023v34 26

SECTION III PARTICIPATION AND ACTIVITIES ON THE EXCHANGE

3.1 Consent to Jurisdiction 

3.1.1 By accessing, orinitiating, entering any Order into,or executing a 

Transaction on or subject to the Rules of the Exchange, directly or through 

an FCM Participant, and without any need for any further action, 

undertaking or agreement, any Person, including a Participant, Customer, 

Authorized User or Broker, and all Authorized BrokerUsers, agrees and 

consents (i) to be bound by, and comply with, the Rules and Applicable 

Law, in each case to the extent applicable to it, him or her, including Rules 

requiring cooperation and participation in investigatory and disciplinary 

processes, and (ii) to become subject to the jurisdiction of the Exchange 

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

with, the status, actions or omissions of such Participant or Authorized 

UserPerson. 

3.1.2 Any Person, including a Participant or, Customer, Authorized UserBroker, 

and all Authorized Users, whose right to access the Exchange is revoked 

or terminated pursuant to these Rules will remain bound by the Rules and 

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

jurisdiction of the Exchange with respect to any and all matters arising 

from, related to, or in connection with, the status, actions or omissions of 

such Participant or Authorized UserPerson prior to such revocation or 

termination. 

3.2 Participants and Customers

3.2.1 Each Participant will trading for its own Proprietary Account or acting as an 

FCM Participant must execute a Participant Agreement to have the right to 

access Direct Access on the Exchange on a principal- to-principal basis, 

including the right to place Orders trade for each of its pProprietary

Accounts and/or on behalf of its Customers’ accounts. The access rights 

of a Participant hereunder may not be transferred, assigned, sold or leased. 

3.2.2 Each Customer who trades through an FCM Participant is not required to 

execute a Participant Agreement; provided, however, that FCM 

Participants are required to ensure that their Customers are familiar with 

and abide by these Rules. 

3.3 Requirements for Participants 

3.3.1 A Participant must be admitted to the Exchange and deliver an executed 

Participant Agreement. To be eligible for admission, the Participant must 

demonstrate to the Exchange that it: 

(a) is of good reputation and business integrity; 
NODAL EXCHANGE RULEBOOK

2023v34 27

(b) complies with the financial responsibility, recordkeeping and 

reporting requirements set out in Rule 3.4; 

(c) is validly organized, in good standing, and authorized by its 

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

Nodal Contracts; 

(d) is not Insolvent; 

(e) is not prohibited from using the services of the Exchange for any 

reason whatsoever; 

(f) holds all registrations required under Applicable Law, if any, 

including any FCM, supervisory person and/or Associated Person 

registration, as applicable; 

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

CEA; 

(h) is not registered with the CFTC as an iIntroducing bBroker or as a 

retail foreign exchange dealer; and 

(i) satisfies any other criteria that the Exchange may require from a 

Participant. 

3.3.2 As part of the application procedure, the Exchange may request such 

information and documentation as it may reasonably require in order to 

determine whether the Exchange’s eligibility requirements have been 

satisfied. Any Participant organized or located outside of the United States 

shall enter into a written agreement acceptable to the Exchange appointing 

a third party as its U.S. agent for service of process for purposes of CFTC 

Regulation 15.05, and shall provide the Exchange with a copy of the 

agreement. Terms and conditions for each such Participant accessing the 

Exchange and services from outside the United States and its territories are 

set forth in Rule 9.11 as well as in the applicable jurisdictional information 

for these Rules available at www. 

https://www.nodalexchange.com/regulation/nodal-exchangeregulation/jurisdictions/. 

3.3.3 The Exchange may deny, condition, suspend, or terminate Participant or 

Customer status of any entityPerson that: 

(a) is unable to satisfactorily demonstrate its ability to satisfy the 

eligibility criteria to become or remain compliant as a Participant or 

as a Customer, as applicable; 

(b) is unable to satisfactorily demonstrate its capacity to adhere to all 

applicable Rules and Applicable Laws; 
NODAL EXCHANGE RULEBOOK

2023v34 28

(c) would bring the Exchange into disrepute as determined by the 

Exchange in its sole discretion; or 

(d) shows such other cause as the Exchange may reasonably determine. 

3.3.4 If the Exchange decides to deny or condition an applicant’s 

applicationaccess to the Exchange’s System, the Exchange shall promptly 

notify the applicant in writing to the address provided by the applicant on 

the Exchange application form. Any such denial or condition placed by 

the Exchange may be appealed by the applicant and shall be promptly 

considered by the Exchange Participant Committee. In each case, the 

Exchange Participant Committee shall determine the specific procedures 

to be applied, provided that the applicant shall be afforded the opportunity 

to present such evidence as the Committee deems relevant. The rules of 

evidence shall not apply and a transcript shall not be created. 

3.3.5 If the Participant is not itself aan Individual Clearing Member, the 

Participant must also be party to an agreement with a FCM Clearing 

Member in accordance with Rule 5.2.1. 

3.3.6 A pPerson approved as a Participant shall be subject to all of the Rules of 

the Exchange. 

3.3.7 Each applicant and each Participant agrees (i) promptly to provide, or 

procure the provision of, such information and documents as the Exchange 

may reasonably request, and (ii) that the Exchange, without being 

prevented by any duty of confidentiality by any holder of information, may 

obtain such information and documents from any Clearing Member or 

from the Clearing House. 

3.3.8 The Exchange shall grant access to independent software vendors that meet 

the requirements for Participants set out in this Rule 3.3. 

3.3.9 FCM Participants shall effect any transfer of transactions and/or positions 

in accordance with the Rules and CFTC Regulation 1.65. 

3.4 Minimum Financial, Segregation and Related Reporting Requirements 

3.4.1 A Participant that is not registered with the CFTC as an FCM must: 

(a) maintain total assets of not less than $10,000,000; or 

(b) maintain a net worth (excluding personal assets) of not less 

than $1,000,000. For purposes of this Rule 3.4.1(b), “net 

worth” means the Participant’s total assets (excluding 

personal assets) less total liabilities as computed by 

generally accepted accounting principles applied on a 

consistent basis; or 
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2023v34 29

(c) a corporation, business trust, partnership, limited liability 

company or similar business venture (other than a 

commodity pool), which has total assets in excess of $5 

million and satisfies at least one of the following portfolio 

requirements, derived from CFTC Regulation 4.7: 

i. the Participant owns securities and other investments with 

an aggregate market value of at least $2 million, or 

ii. the Participant has had on deposit with an FCM for their own 

account at any time during the 6 months preceding the date 

of the first block trade, at least $200,000 initial margin and 

option premiums together with required minimum security 

deposits for retail forex transactions for commodity interest 

transactions; or 

iii. the Participant meets a combination of the alternatives in 

3.4.1(c)(a) and 3.4.1(c)(b) above, such that the sum of the 

amounts from both alternatives, when expressed as a % of 

the minimum $ requirement specified in each alternative, 

equals 100% (e.g., $1 million in securities owned and 

$100,000 in futures margin and premiums). 

3.4.23.4.1 All Participants executing Block Trades must be an ECP and must 

immediately notify the Exchange or the Regulatory Service Provider, if 

any, if it or its Customer, as applicable, no longer meets the financial 

requirements of 3.4.1 (a), (b) or (c) abovean ECP. 

3.4.33.4.2 Each Participant that is acting as an FCM Participant and/or is 

registered with the CFTC as an FCM and each FCM Clearing Member 

must: 

(a) comply with the minimum financial and related reporting 

requirements of Commission Regulations, including Commission 

Regulations 1.10, 1.12, 1.17 and 1.18; 

(b) comply with the cCustomer funds segregation requirements of 

Commission Regulations 1.20 through 1.30, 1.32 and 1.49; and

(c) file with the Exchange and the Regulatory Services Provider, if any, 

a copy of any notice or written report that it is required to file with 

the Commission pursuant to Commission Regulations 1.10 or 1.12.; 

and

(d) comply with all applicable provisions of the CEA, Commission 

Regulations, and NFA Rules including, but not limited to, rules and 

regulations regarding registration, customer protection, risk 

management, supervision, reporting and recordkeeping. 
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2023v34 30

3.4.43.4.3 A Participant that is registered with or authorized or supervised by 

a Governmental Authority shall comply with the rules and regulation of 

such Governmental Authority relating to minimum financial and related 

reporting and recordkeeping requirements and shall provide to the 

Exchange and to the Regulatory Services Provider, if any, a copy of such 

Participant’s regulatory capital report, reasonably contemporaneously with 

the filing of such report and substantially in the form such report was filed 

with such Governmental Authority. A Participant that is not subject to 

such filing requirements shall provide the Exchange with such financial 

information as the Exchange may require from time to time. 

3.4.53.4.4 A Participant that is not registered with the CFTC, or registered with 

or authorized or supervised by a Governmental Authority other than the 

CFTC, shall submit to the Exchange upon its request annual audited 

financial statements for the Participant or, if applicable, its parent company 

certified by a certified independent public accountant (or by a Person 

having similar qualifications if the Participant’s books of account are kept 

outside the United States) within ninety calendar days of the Participant’s 

fiscal year-end. 

3.5 Requirements for Participants eEngaging in pPhysical Ddelivery of 

Eenvironmental Productscontracts

3.5.1 All futures contracts on environmental products will settle through 

physical delivery if positions remain open at the end of the Last Trading 

Day. The Participant seller, or its designee, is responsible for delivery 

through the designated registry associated with the Deliverable Product as 

defined in Appendix A. The delivery is processed between the 

Participantsparties per the rules of the Clearing House in accordance with 

CFTC Regulation 39.12(b)(7). The Deliverable Products are delivered 

between the Participantsparties. Nodal Exchange does not take possession 

of the Deliverable Products at any time. 

3.5.2 All Participantsparties have the ability to trade the expiring contracts until 

the end of the Last Trading Day in order to close out any open positions to 

avoid physical delivery obligations upon expiration. For positions that 

remain open at the end of the Last Trading Day, Participantsparties will be 

required to physically deliver the Deliverable Product and to confirm to the 

Exchange that delivery has occurred. 

3.6 Additional Requirements for Participants Eengaging in the Pphysical 

Ddelivery offor California Low Carbon Fuel Standard (“LCFS”), Oregon 

Clean Fuels Program (“Oregon CFP”), and Washington Clean Fuels Program 

(“Washington CFP”) Ffutures Ccontracts 

3.6.1 The Exchange may establish such requirements and conditions for 

approval of eligible deliverers as it deems necessary. ParticipantsParties
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2023v34 31

wishing to engage in physical delivery of LCFS, or Oregon CFP, or 

Washington CFP, must meet the relevant eligibility criteria set forth below 

as well as those provided in the Participant Application to Physically 

Deliver on the respective contracts. 

Eligible Participantsparties (i.e. Participant buyers and Participant sellers) 

must meet each criterion under items (a), through (d) and deliverers (i.e.

Participants sellers) must meet the additional criteria provided under item 

(e). 

(a) Must be a Participant of Nodal Exchange in good standing, and; 

(b) Must have an active California LCFS Reporting Tool and Credit 

Bank & Transfer System (LRT) account, an active Oregon CFP 

Online System account, or an active Washington Fuel Reporting 

System (WFRS) account. LRT, Oregon CFP Online System, or 

WFRS account information must be on file with the Exchange, and; 

(c) Must not be subject to ongoing California Air Resources Board 

(CARB), Oregon Department of Environmental Quality, or 

Washington Department of Ecology enforcement activities related 

to the generation or trade of LCFS, Oregon CFP, or Washington 

CFP credits, and; 

(d) Must agree to the California LCFS, Oregon CFP, or Washington 

CFP futures contracts post-delivery invalidation procedures as set 

forth in the Participant Application to Physically Deliver California 

LCFS, Oregon CFP, and Washington CFP Futures Contracts. 

(e) To participate in delivery, Participant sellers must meet the 

Exchange’s eligibility criteria as set forth in the Participant 

Application to Physically Deliver California LCFS, Oregon CFP, 

and Washington CFP Futures Contracts. 

3.6.2 In addition to the Participant criteria set forth in Rules 3.3 and 3.4, each 

Participant who engages in the physical delivery of California LCFS, 

Oregon CFP, and Washington CFP futures contracts must maintain the 

requirements set by the Exchange. 

3.6.3 Each Participant who engages in physical delivery of California LCFS, 

Oregon CFP, and Washington CFP futures contracts must complete the 

Participant Application to Physically Deliver California LCFS, Oregon 

CFP, and Washington CFP Futures Contracts and subsequently be 

approved by the Exchange. 

3.6.4 Each Participantparty who meets the qualifications to engage in the 

physical delivery of LCFS, Oregon CFP, and Washington CFP credits as a 

Participant seller consents that the Exchange may name the 
NODAL EXCHANGE RULEBOOK

2023v34 32

Participantparty on an eligible deliverer list, which may be made available 

to Participantsparties in California LCFS, Oregon CFP, and Washington 

CFP futures contracts upon request. The Exchange reserves the right to 

remove Participantsparties from the eligible deliverer list at any time. 

Eligible deliverers will be reviewed as needed and at minimum at a 

frequency commensurate with delivery. Any Participantparty wishing to 

become an eligible deliverer may apply at any time. No additional eligible 

deliverers will be added to the list within the contract expiration month. 

3.6.5 A Participant seller who does not meet the requirements of Rule 3.6 will 

not be eligible to engage in physical delivery of California LCFS, Oregon 

CFP, and Washington CFP futures contracts. A Participant seller not 

eligible to deliver LCFS, Oregon CFP, and Washington CFP futures 

contracts must ensure all of its expiration month positions in LCFS, 

Oregon CFP, and Washington CFP futures contracts have been closed at 

the latest on the fifth business day before the first delivery day of the 

expiring contract. 

3.6.6 If a Participantparty fails to comply with Rule 3.6.5, Nodal Exchange may 

use any and all measures to close the positions, which are ineligible for 

delivery. This would occur without prior notification and at the expense of 

the Participantparty. 

3.7 Additional Requirements for Participants Mmaking or Ttaking Pphysical 

Ddelivery of Renewable Identification Numbers (“RINs”) 

3.7.1 Nodal Contracts based on RINs, which are instruments governed by the 

laws and regulations of the U.S. Environmental Protection Agency, are 

physically settled as described in the Contract Specifications. All 

deliverable RINs must have been generated at eligible facilities that meet 

the criteria in Rule 3.7.

3.7.2 The Exchange must approve Participantsa party as eligible to engage in the 

physical delivery of RINs. ParticipantsParties wishing to engage in the 

physical delivery of RINs, must submit an application demonstrating the 

eligibility criteria set forth below. 

Eligible Participantsparties (i.e., Participant buyers and Participant sellers) 

must demonstrate satisfaction with each criterion under items (a) through 

(c) below, and deliverers (i.e., Participants sellers) may be required to meet 

additional criteria at the discretion of the Exchange. 

(a) Participant of Nodal Exchange in good standing; 

(b) Maintain an active EPA Moderated Transaction System (EMTS) 

account. EMTS account information must be on file with the 

Exchange at the time of delivery, and; 
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2023v34 33

(c) May not be subject to ongoing EPA civil enforcement action related 

to the generation or trading of invalid RINs. 

Participant sSellers assume the liability to replace delivered RINs found 

to be invalid after delivery. Notwithstanding the foregoing, Persons that 

are “obligated parties” as such term is defined in 40 CFR 80.1406, assume 

all liability for the validity of delivered RINs pursuant to 40 CFR 80.1431 

and any obligations as imposed thereunder. 

3.7.3 Each Participantparty approved by the Exchange to make physical delivery 

of RINs grants consent for the Exchange to identify the Participantparty on 

an eligible deliverer list, which will be made available to 

Participantsparties and/or their Clearing Members that may trade Nodal 

Contracts based on RINs. The Exchange reserves the right to remove 

Participantsany party from the eligible deliverer list at any time. Any 

Participantparty wishing to become an eligible deliverer may apply at any 

time; however, no new eligible deliverers will be added to the list within 

the contract expiration month.

3.7.4 A Participantparty that does not meet the requirements of Rule 3.67 will 

not be eligible to engage in the physical delivery of RINs. A 

Participantparty that is not eligible to engage in the physical delivery of 

RINs must ensure that all of its expiration month positions in RIN futures 

contracts have been closed by no later than the fifth business day before 

the first delivery day of the expiring Nodal Contract.

3.7.5 If a Participantparty fails to comply with Rule 3.67.4, Nodal Exchange may 

use any and all measures to close the positions that are ineligible for 

delivery. This could occur without prior notification and at the expense of 

the Participantparty.

3.8 Eligible Facility Criteria for RINs 

The Exchange will maintain a list of eligible facilities for RINs, which 

will be made available to Participantsparties and/or their Clearing 

Members that may be engaged in the physical delivery of RINs. The 

Exchange reserves the right to remove eligible facilities from the list at 

any time. 

Physically deliverable RINs upon which Nodal Contracts are based will be 

generated by eligible facilities that meet the following criteria: 

3.8.1 Criteria for D3 RIN Facilities 

(a) Registered pursuant to 40 CFR § 80.1450; 

(b) Generate Q RINs as defined in by 40 CFR § 80.1401, verified by a 

registered independent third-party auditor using a Quality 
NODAL EXCHANGE RULEBOOK

2023v34 34

Assurance Plans (“QAP”) pursuant to 40 CFR § 80.1469 and 

audited under the requirements of 40 CFR § 80.1472 by auditors 

qualified in accordance with 40 CFR § 80.1471; 

(c) Located within the United States; 

(d) Generate according to pathways according to 40 CFR § 80.1426 

Applicable D Codes for Each Fuel Pathway for Use in Generating 

RINs; 

(e) No history of EPA fraud-related enforcement actions; and 

(f) Such other criteria not limited to, operating history, nameplate 

capacity, market capitalization or balance sheet of the facility or its 

parent firm, as determined by the Exchange in its sole discretion. 

3.8.2 Criteria for D4 RIN Facilities 

(a) Registered pursuant to 40 CFR § 80.1450; 

(b) Located within the United States; 

(c) Production capacity of 30 million gallons per calendar year or 

greater; 

(d) Generate according to pathways pursuant to 40 CFR § 80.1426 

Table 1—Applicable D Codes for Each Fuel Pathway for Use in 

Generating RINs; 

(e) No history of EPA fraud-related enforcement actions; and 

(f) Such other criteria not limited to, operating history, nameplate 

capacity, market capitalization or balance sheet of the facility or its 

parent firm, as determined by the Exchange in its sole discretion. 

3.8.3 Criteria for D5 RIN Facilities 

(a) Registered pursuant to 40 CFR § 80.1450; 

(b) Located within the United States or importing renewable fuel from 

Brazil or such other foreign locations as determined by the 

Exchange; 

(c) Generate or import renewable fuel according to pathways pursuant 

to 40 CFR § 80.1426 Table 1—Applicable D Codes for Each Fuel 

Pathway for Use in Generating RINs; 
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2023v34 35

(d) No history of EPA fraud-related enforcement actions; and 

(e) Such other criteria not limited to, operating history, nameplate 

capacity, market capitalization or balance sheet of the facility or its 

parent firm, as determined by the Exchange in its sole discretion. 

3.8.4 Criteria for D6 RIN Facilities 

(a) Registered pursuant to 40 CFR § 80.1450; 

(b) Located within the United States; 

(c) Feedstock production process using corn starch or grain sorghum 

according to pathways pursuant to 40 CFR § 80.1426 Table 1—

Applicable D Codes for Each Fuel Pathway for Use in Generating 

RINs; 

(d) Production capacity of 20 million gallons per calendar year or 

greater; 

(e) No history of EPA fraud-related enforcement actions; and 

(f) Such other criteria not limited to, operating history, nameplate 

capacity, market capitalization or balance sheet of the facility or its 

parent firm, as determined by the Exchange in its sole discretion. 

3.9 Duties and Responsibilities of Participants 

3.9.1 Each Participant shall, and shall cause its Customers and Authorized Users, 

as applicable, to: 

(a) access the Exchange in a responsible manner and not for any 

improper purpose; 

(b) access the Exchange only to conduct business that is subject to the 

Rules and the Exchange Requirements and in a manner consistent 

with the Rules and the Exchange Requirements; 

(c) comply with the Rules and the Exchange Requirements and act in a 

manner consistent with the Rules and the Exchange Requirements; 

(d) comply with the rules of the Clearing House that accepts for clearing 

a Nodal Contract traded by the Participant on the Exchange, to the 

extent applicable to such ParticipantPerson and such Nodal 

Contract; 
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2023v34 36

(e) observe high standards of integrity, market conduct, commercial 

honor, fair dealing, and just and equitable principles of trade while 

conducting or seeking to conduct any business connected with or 

concerning the Exchange; 

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

dealings or filings with the Exchange or in connection with a 

Disciplinary Action; 

(g) cooperate promptly and fully with the Exchange in any 

investigation, inquiry, audit, examination or proceeding regarding 

compliance with the Rules or any Disciplinary Action or arbitration; 

(h) comply with any order issued by the Exchange; 

(i) consistent with Rule 4.3, keep, or cause to be kept, all authenticated 

login credentials for secure access to the System, including User 

IDs, account numbers and passwords related to the Exchange 

(“Login Credentials”) confidential and secure, including, but not 

limited to, ensuring that Login Credentials are not shared with other 

Persons; 

(j) remain responsible for any misuse of Login Credentials; 

(k) notify the Exchange immediately upon any suspicion of theft of 

Login Credentials, or any unauthorized access; and 

(i)(l) keep, or cause to be kept, complete and accurate books and records, 

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

maintained pursuant to the Applicable Law, for at least five (5) 

years, and make such books and records available for inspection by 

a representative of the Exchange, the CFTC or the U.S. Department 

of Justice. 

3.9.2 In addition to the requirements of Rule 3.69.1, each Participant shall 

employ practices to monitor and enforce compliance with its internal risk 

limits and shall be responsible for all Orders and Transactions effected on 

the Exchange by or for the account of such Participant, its Customers, or 

Authorized Users or by any Person using its or their User IDs. 

3.10 Authorized Users 

3.10.1 Each Participant (including FCM Participant), FCM Clearing Member, and 

Authorized Broker that is not a natural Person must designate at least one 

of its employees or agents as an Authorized User. An FCM Participant 
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2023v34 37

may designate an employee or agent of its Customer as an Authorized User 

for such Customer.

3.10.2 By agreeing to become an Authorized User, an individual agrees to be 

bound by the duties and responsibilities of an Authorized User set out in 

Rule 3.811 and to be subject to and comply with Applicable Law and the 

Rules. 

3.10.3 To designate an Authorized User for itself or a Customer, as applicable, a 

Participant must follow the procedures established by the Exchange. The 

Exchange may establish criteria that individuals must fulfill to become an 

Authorized User. Without limiting the generality of the foregoing, each 

Participant will ensure on an ongoing basis that (i) none of itsthe

Authorized Users isare subject to a disqualification pursuant to any 

Applicable Law (unless an appropriate exemption has been obtained with 

respect thereto) and (ii) each of its Authorized Users is technically 

proficient and conducts its business in a fair and equitable manner. 

3.10.4 The Exchange will promptly notify a Participant in writing of the approval 

of designated Authorized User(s) or if the Exchange declines to approve 

the nomination of an Authorized User. 

3.10.53.10.4 The Exchange will maintain a list of all designated Authorized Users 

for each Participant. 

3.10.63.10.5 The Exchange may, in its sole discretion revoketerminate or suspend 

the designation of an individual as an Authorized User and shall promptly 

notify the Participant and its Clearing Member of such action. 

3.10.73.10.6 To request the termination of the designation of an individual as an 

Authorized User, the Participant must follow the procedures established by 

the Exchange. The Exchange may, in its sole discretion, refuse to accept 

a request to terminate the registration of an Authorized User or may 

postpone the effective date of the termination of registration if the 

Exchange considers it necessary for the protection of the Participant, its 

Customer as applicable, or in the Exchange’s best interest. Based on the 

information provided to, and other information gathered by, the Exchange 

regarding the request to terminate the registration of an Authorized User, 

the Exchange will determine whether to: 

(a) accept the request to terminate such registration; 

(b) postpone the effective date of termination of the registration; and/or 

(c) impose any terms or conditions before or after the effective date of 

termination of the registration. 

3.11 Duties and Responsibilities of Authorized Users 
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2023v34 38

3.11.1 By agreeing to act as an Authorized User, such Person agrees to be bound 

by the duties and responsibilities of and Authorized User and to be subject 

to, and comply with, the Rules. 

3.11.2 An Authorized User must: 

(a) ensure that activity conducted under the User IDs assigned to itthe 

Authorized User and any of its personnel complies with Applicable 

Law and the Rules, and may not share Login Credentials with other 

Persons;

(b) have the authority, at the Exchange’s request, to adjust or withdraw 

any Order submitted under such User IDs; 

(c) have and maintain during all necessary regulatory approvals and/or 

licenses to operate as an Authorized User; 

(d) cooperate promptly and fully with the Exchange in any 

investigation, inquiry, audit, examination or proceeding regarding 

compliance with the Rules or any Disciplinary Action or arbitration 

proceeding; 

(e) comply with any order issued by the Exchange; and 

(f) agree to such other terms and conditions as may be established by 

the Exchange from time to time. 

3.12 FCM Clearing Members Accessing the Exchange 

3.12.1 An FCM Clearing Member, that is not also choosing to intermediate 

Orders of customers to the Exchange as an FCM Participant, may trade an 

account on behalf of a Participant hereunder solely for the purpose of 

liquidating Nodal Contracts and any resulting positions previously 

submitted to the Clearing House for the account of such FCM Clearing 

Member on behalf of a Participant that has failed to perform its obligations 

to the Exchange or such FCM Clearing Member (to the extent applicable). 

3.13 Independent Software Vendors 

3.13.1 A Person seeking to act as an ISV must satisfy the Exchange’s 

technological integrity requirements, execute such agreement(s) required 

by the Exchange, and not adversely affect the Exchange’s ability to comply 

with the CEA and CFTC Regulations. 

3.14 Required Notices 

3.14.1 Each Participant and ISV shall immediately notify the Exchange upon 

becoming aware of any of the following events: 
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2023v34 39

(a) any material changes to the information provided to the Exchange 

by the Participant or ISV; 

(b) any damage to, or failure or material inadequacy of, the systems, 

facilities or equipment of the Participant or ISV used to effect 

Transactions on the Exchange; 

(c) any refusal of admission to, or withdrawal by the Participant or ISV 

of any application for membership in, any Self-Regulatory 

Organization; 

(d) any denial or withdrawal of an application for registration or license 

by or from any governmental agency, and any revocation, 

suspension or conditioning of a registration or license granted by 

any Governmental Authority; 

(e) the commencement of any judicial or administrative proceeding 

against the Participant, a Customer, or ISV by a Governmental 

Authority or the imposition of any fine, cease and desist order, 

denial of trading privileges, censure or other sanction or remedy 

(whether through an adverse determination, voluntary settlement or 

otherwise) imposed by any Governmental Authority; 

(f) the indictment or conviction of, or any confession of guilt or plea of 

guilty or nolo contendere by, the Participant, a Customer, or ISV or 

any of its officers for any felony or misdemeanor involving, arising 

from, or related to, the purchase or sale of any commodity, security, 

futures contract, option or other financial instrument, or involving 

or arising from fraud or moral turpitude; and 

(g) the Insolvency of the Participant or ISV or any of its Affiliates. 

3.14.2 Each Participant or ISV that is not a natural person shall notify the 

Exchange at least ten business days prior to any merger, acquisition, 

consolidation, combination, sale or other material change of ownership. 

3.14.3 Nothing in this Rule 3.1014 is intended to substitute for or limit any other 

reporting obligations that a Participant or ISV may have to the Exchange 

or any regulatory agency or Self-Regulatory Organization. 

3.15 Account Administrators 

3.15.1 Each Participant shall appoint at least one Level 1 Account Administrator, 

who shall be responsible for monitoring the Participant’s access to the 

Exchange. Each FCM Participant shall appoint at least one Level 1 

Account Administrator, who shall be responsible for monitoring each 

Customer’s access to the Exchange. An FCM Participant may not allow a 

Customer to be or become a Level 1 Account Administrator. 
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2023v34 40

3.15.2 Each Participant may appoint one or more Level 2 Account Administrators, 

who shall be entitled to access the Exchange for risk management, audit or 

other back-office purposes as specified by the Exchange from time to time. 

Level 2 Account Administrators shall not have trading privileges on the 

Exchange. An FCM Participant may not allow a Customer to be or become 

a Level 2 Account Administrator.

3.15.3 A Participant shall promptly notify the Exchange of a change in the identity 

of any of its Account Administrators. 

3.16 Access Requirements and Terms 

3.16.1 All Participants are eligible for Direct Access to the System upon execution 

of a Participant accounts will be issued authenticated login credentials for 

secure access. TheAgreement and such other agreements required by the 

Exchange. 

3.16.2 An FCM Clearing Member may authorize any Person who has satisfied 

Rule 3.16.1 to have Direct Access to the System. A Person is eligible for 

Direct Access to the System upon execution of a Participant is responsible 

for the security of these items, and any misuse is the responsibility of the 

Agreement and such other agreements required by the Exchange. 

3.16.13.16.3 An FCM Participant may permit Customers to connect to the System 

by Order Routing. A Customer that connects to the System by Order 

Routing does not itself have Direct Access. 

3.16.2 Login information is for the Participant’s use only and shall not be shared 

with other parties. 

3.16.3 A Participant must notify the Exchange immediately upon any suspicion 

of theft of login information, or any unauthorized access. 

3.16.4 Clearing Members and Participants may connect to the System by using an 

ISV which has been approved by the Exchange, pursuant to Rule 3.13, or 

by developing and utilizing their own application program interface 

(“Application Program Interface” or “API”) front end, which has been 

approved by the Exchange, and upon execution of such agreement(s) 

required by the Exchange. 

3.16.43.16.5 The Exchange may modify or suspend a Participant’s access to the 

or a Customer’s access if the Exchange reasonably believes that such 

Participant’s positions, or the positions of its Customer(s), when 

considered in light of other positions maintained by such Participant and 

any other factors that the Exchange reasonably deems relevant (including, 

as applicable, financial information provided by such Participant and the 

margin required for all such positions), could jeopardize the financial 

safety of other Participants or Customers. 
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2023v34 41

3.17 Dues and Fees 

3.17.1 Exchange dues and fees are posted at www.nodalexchange.com and 

updated from time to time. 

3.18 Inspections by the Exchange 

3.18.1 The Exchange and the Regulatory Services Provider, if any, shall have the 

right, in connection with determining whether the Rules are being, will be, 

or have been complied with by the Participant or its Customers, to: 

(a) inspect systems, equipment and software operated by the Participant 

in connection with business that is or may be subject to the Rules, 

wherever located; 

(b) access the systems, equipment, software, and the premises on which 

the systems, equipment, and software are located, any data stored in 

any of the systems or equipment, during regular business hours; 

and/or 

(c) copy and/or reproduce any data to which the Exchange has access 

under this Rule. 

3.18.2 Each Participant shall provide the Regulatory Services Provider with the 

same access as it would be required to provide to the Exchange. 

3.18.3 The Exchange may require a Participant to furnish such information 

concerning the Participant’s or its Customers’ business that is subject to 

the Rules of the Exchange as the Exchange deems necessary to enable the 

Exchange to perform its obligations under Applicable Law, including 

information relating to (i) Nodal Contracts executed on the Exchange and 

in related derivatives markets, including in the Commodity products 

underlying those Nodal Contracts, and (ii) information requested by a 

government agency relating to the Exchange’s business as a designated 

contract market and/or the Exchange’s compliance with Applicable Law 

that the Exchange believes is maintained by, or otherwise in the possession 

of, a Participant. 

3.19 Liquidity Provider Program 

3.19.1 At its discretion, Nodal Exchange may offer a liquidity provider program 

that provides incentives to Participants willing to supply substantial 

numbers of bids and offers or traded volume in the market. The liquidity 

provider program may offer reduced fees, amongst other incentives, for 

qualified liquidity providers as determined by the Exchange. 

3.20 Authorized Brokers 
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3.20.1 Participants or Customers may submit Block Trades to the Exchange 

through an Authorized Broker acting on their behalf. 

3.20.2 An Authorized Broker: 

(a) must be registered with the CFTC as an FCM or an iIntroducing 

bBroker; 

(b) must enter into the applicable Authorized Broker Aagreement with 

the Exchange and agree to be subject to and to comply with the 

Rules applicable to Authorized Brokers; 

(c) must agree to effect Block Trades on behalf of a Participant or 

Customer, if applicable, only in accordance with these Rules and 

procedures established by the Exchange; 

(d) must, if registered as an FCM, maintain adequate financial resources 

in accordance with Rule 3.4; 

(e) must file with the Exchange and the Regulatory Services Provider, 

if any, a copy of any notice or written report that it is required to file 

with the Commission pursuant to Commission Regulations 1.12; 

and 

(f) must agree to such other terms and conditions as may be established 

by the Exchange from time to time. 

3.20.3 An Authorized Broker shall be responsible to the Exchange for any failure 

by such Authorized Broker (or its employees or agents) to comply with the 

Rules. 

3.20.4 The Exchange will maintain a list of all designated Authorized Brokers for 

each Participant. The Exchange may, in its sole discretion revoke or 

suspend the designation of an individual as an Authorized Broker and shall 

promptly notify the appropriate Participants and its Clearing Member of 

such action.

3.20.5 An FCM Participant may be an Authorized Broker if it meets the 

requirements of Rule 3.20.2 and agrees to effect Block Trades or EFRPs 

on behalf of its Customer(s) only in accordance with these Rules and 

procedures established by the Exchange when acting in an FCM 

Participant capacity. 

3.21 FCM Participants 

3.21.1 Subject to the terms of the Participant Agreement, FCM Participants may 

provide to Customers Order Routing access to the Exchange, or trade on 

its Customers’ behalf. A Customer that connects to the System by Order 
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2023v34 43

Routing does not itself have Direct Access. FCM Participants act as an 

agent of the Customer to enter into or confirm the execution of a Nodal 

Contract on the Exchange. 

3.21.2 FCM Participant Qualifications. To qualify as an FCM Participant, each 

Person shall: 

(a) qualify as a Participant and execute a Participant Agreement 

pursuant to the Exchange Rules; 

(b) be a company, limited liability company, partnership or other entity 

approved by Nodal Exchange; 

(c) agree to abide by all Exchange Rules and cooperate with the 

Exchange in the enforcement of the Exchange Rules; 

(d) be liable for the violation of any Exchange Rule by itself and its 

Customer(s); 

(e) register and remain in good standing with the CFTC as an FCM in 

accordance with all applicable requirements including, but not 

limited to the financial requirements set forth in CFTC Regulation 

1.17(a)(1)(i) and ensure that its Associated Persons are properly 

identified, qualified as such, registered, and remain in good 

standing; 

(f) submit to the Exchange proof of registration and attest on a quarterly 

basis that it meets the financial requirements described in this Rule 

3.21; and 

(g) notify the Exchange promptly upon any changes to its CFTC 

registration status or its ability to meet the financial requirements 

described in this Rule 3.21. 

3.21.3 Each FCM Participant is responsible for the financial obligations arising 

from each of its Customers, with respect to all Orders entered or 

Transactions executed. 

3.21.4 With respect to each Customer for which it provides Order Routing access, 

the FCM Participant shall: 

(a) Submit information to create an account at the Exchange for each 

Customer, which includes the Customer's complete and accurate 

legal entity name, and other information as required by the 

Exchange. 

(b) Take any or all actions requested or required by the Exchange with 

respect to such Customer, including but not limited to, assisting the 
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2023v34 44

Exchange in any investigation into potential violations of the Rules 

or the CEA, and requiring the Customer to produce documents, 

provide information, answer questions and/or appear in connection 

with any investigation; and 

(c) Suspend or terminate such Customer if the FCM Participant has 

reason to believe that the Customer’s actions threaten the integrity 

or liquidity of any Nodal Contract, violate the Rules or the CEA, or 

if the Customer fails to cooperate in any investigation. 

3.21.5 If an FCM Participant has actual or constructive notice of a violation or 

potential violation of the Rules or the CEA in connection with the use of 

the System by a Customer for which it provides Order Routing access, and 

the FCM Participant fails to take appropriate action, the FCM Participant 

may be found to have violated Rule 6.2.13 and subject to disciplinary 

action under the Rules. 

3.21.6 Monitoring of Position Limits of Customers. Each FCM Participant shall 

employ adequate systems and procedures to monitor positions and 

collateral of each of its Customers and shall accurately track and provide 

those positions to the Exchange on a continuous basis. FCM Participants 

may close out positions on behalf of Customers in accordance with the 

terms of the Exchange Rules and CFTC Regulation 1.46. 

3.21.7 FCM Participant Customer Funds. Each FCM Participant must: 

(a) segregate Customer funds (and the accounting of such funds) from 

its own funds and Proprietary Accounts in accordance with Sections 

4d(a) and 4d(b) of the CEA and CFTC Regulation 1.20. The 

Clearing House will provide written acknowledgment in the form 

required by CFTC Regulation 1.20(d); and 

(b) segregate in a custodial account any Customer funds where required 

by Applicable Law.

3.21.8 FCM Participants must monitor each Customer for whom it provides 

access to the Exchange for its compliance with minimum financial 

standards set out in Rules 3.4.1 and 3.4.2. 

3.21.9 Each FCM Participant shall notify the Exchange prior to any significant 

business transaction or operational change, including but not limited to: 

(a) a change of more than 20% of its direct or beneficial ownership; 

(b) its merger or consolidation with another entity, or the combination 

of its business with that of another entity; 
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2023v34 45

(c) its assumption or guarantee of all or substantially all of the liabilities 

of another in connection with a direct or indirect acquisition of all 

or substantially all of another entity’s assets; 

(d) the sale of a significant part of its business or assets to another entity 

or Person; 

(e) a significant increase in the number of Customers for whom it 

provides access to the Exchange; or 

(f) Any change of the FCM Participant’s trade processing system 

provider. 

3.21.10FCM Participants shall adopt policies and procedures such that all 

transactions shall be executed openly and competitively in accordance with 

CFTC Regulation 1.38. 

3.21.11Reporting system for Large Traders. FCM Participants shall electronically 

submit to Nodal Exchange a daily large trader position report of all 

positions required to be reported in accordance with CFTC Regulations. 

3.21.12FCM Participants must maintain all records relevant to Exchange 

Transactions and related positions, including order tickets, records 

customarily generated in accordance with relevant market practices, 

records reflecting payments between the parties, as well as any title 

transfers and other records required to be kept in accordance with CFTC 

Regulation 1.35. Records must also be provided to the Exchange upon 

request. 

3.21.13Removal. Nodal Exchange may, in its sole discretion, remove an FCM 

Participant and/or its Customer(s) pursuant to any Exchange Rule violation 

and/or Applicable Law at any time. 
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SECTION IV MARKET OPERATIONS

4.1 Trading Hours and Operation 

4.1.1 Trading Hours 

The Exchange will be open for trading on all bBusiness dDays during the 

Trading Hours specified in the trading calendar, which is available at 

www.nodalexchange.com. Outside of Trading Hours, the Exchange 

sSystems will allow users to submit, modify and cancel Orders as defined 

in this Section IV. Block Trades or EFRPs submitted outside of Trading 

Hours will be queued and cleared in the order of submission when the 

market is next opened. 

4.1.2 Procedures 

With respect to trading on or though the Exchange, the Exchange may 

adopt, without limitation, procedures relating to Transactions in Nodal 

Contracts and trading on the Exchange, including, but not limited,

procedures to: 

(a) disseminate the prices of bids and offers and the prices of trades in 

Nodal Contracts; 

(b) record and account for Nodal Contracts; 

(c) perform market surveillance and regulation on matters affecting 

Nodal Contracts; 

(d) establish limits on the number and/or size of Orders that may be 

submitted by a Participant, Customer, or Authorized User to the 

Exchange; 

(e) establish limits on the number of Nodal Contracts that may be traded 

by a Participant or Customer on the Exchange; 

(f) establish a limit on the maximum daily price fluctuations for any 

Nodal Contracts and provide for any related restriction or 

suspension of trading in such Nodal Contracts; and 

(g) require a suspended or expelled Participant or Customer, or a 

Participant or a Customer with restricted trading rights, to cause 

Nodal Contracts to be executed for such Participant’s account to 

reduce or eliminate such Participant’s open positions. 
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4.1.3 Market Suspension and Emergencies 

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

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

the applicable provisions of the CEA and CFTC Regulations. 

Emergency Rules may require or authorize the Exchange, the Board, 

the Chief Executive Officer or, in his or her absence, any other 

authorized Officer to take actions necessary or appropriate to 

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

following actions which shall be taken, as appropriate, in 

consultation with the Clearing House: 

i. suspending or curtailing trading or limiting trading to 

liquidation only (in whole or in part); 

ii. extending or shortening the last trading date for Nodal 

Contracts; 

iii. providing alternative settlement mechanisms; 

iv. ordering the liquidation or transfer of Transactions, the 

fixing of a Settlement Price, or the reduction of positions; 

v. extending, limiting or changing the Trading Hours; 

vi. temporarily modifying or suspending any provision of the 

Rules; 

vii. requiring Participants to meet special margin requirements; 

viii. alter the settlement terms or conditions for any Nodal 

Contract; 

ix. imposing or modifying trading limits, price limits and/or 

position limits; and/or 

x. any other action as directed by the CFTC. 

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

required vote of the Board must approve the adoption of such 

Emergency Rule at a duly convened meeting. Directors may attend 

such a meeting by teleconference. 

(c) Notwithstanding paragraph (b) above, if the Chief Executive 

Officer, or another authorized Officer, determines that Emergency 

Rules must be implemented with respect to an Emergency before a 

meeting of the Board can reasonably be convened, then the Chief 

Executive Officer or such Officer shall have the authority, without 
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2023v34 48

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 Chief 

Executive Officer or other Officer shall abstain from deliberating or 

deciding whether to implement the Emergency Rule if such Officer 

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

Emergency Rule, as determined by the Chief Regulatory Officer 

pursuant to Rule 2.6.2. As soon as practicable after the Chief 

Executive Officer or other Officer has implemented an Emergency 

Rule, the Board must convene a meeting in order to affirm, amend, 

revoke, suspend or modify such Emergency Rule. 

(d) Whenever the Exchange, the Board, the Chief Executive Officer or 

authorized Officer takes actions necessary or appropriate to respond 

to an Emergency, a duly authorized representative of the Exchange, 

where possible, will post an announcement in a notice to 

Participants. The Board shall terminate the actions taken in 

response to the Emergency once the Board determines in good faith 

that the Emergency has sufficiently abated to permit the affected 

functions of the Exchange to resume normal functioning. If the 

Board has not yet convened, the Chief Executive Officer or other 

authorized Officer shall terminate the actions taken in response to 

the Emergency once such Officer determines that the Emergency 

has sufficiently abated to permit the affected functions of the 

Exchange to resume normal functioning. 

(e) The Exchange will use reasonable efforts to notify the CFTC in 

accordance with CFTC Regulations prior to implementing, 

modifying or terminating an Emergency Rule. If such prior 

notification is not practicable, the Exchange will notify the CFTC as 

soon as reasonably practicable, but in all circumstances within 

twenty-four (24) hours of the implementation, modification or 

termination of such Emergency Rule. The Exchange may take any 

actions as directed by the CFTC. 

(f) Upon taking any action in response to an Emergency, the Exchange 

will document the decision-making process related to such action. 

Such documentation will be kept for at least five (5) years following 

the date on which the Emergency ceases to exist or to affect the 

Exchange, and all such documentation will be provided to the CFTC 

upon request. 
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4.2 Nodal Contracts Offered 

4.2.1 Nodal Contracts/Expiries 

(a) Contract Specifications are set forth in Appendix A to these Rules. 

Contract Specifications are subject to revision or amendment from 

time to time. Revised Contract Specifications may be listed for 

trading by self-certification in accordance with CFTC 

Regulation 40.2, sent electronically to the CFTC for receipt by the 

open of business on the business day preceding the contract’s listing, 

which shall include: (1) a description of the contract and its rules 

related to its terms and conditions, (2) the intended listing date, (3) 

certification by the Exchange that the contract to be listed complies 

with the CEA and the CFTC Regulations thereunder, (4) a concise 

explanation and analysis of the product and its compliance with 

applicable provisions of the CEA, including core principles, and the 

CFTC Regulations thereunder, including supporting documentation, 

and (5) certification that the Exchange posted a notice of pending 

product certification with the Commission on its website with a copy 

of the submission, with confidential treatment requests as 

appropriate. 

(b) To offer new products, the Exchange may request that the CFTC 

approve a new product prior to listing the product for trading. The 

submission to the CFTC shall be filed electronically in accordance 

with CFTC Regulations 40.3 and include: (1) a description of the 

product with the rules that set forth the contract’s terms and 

conditions, (2) an explanation and analysis of the product and its 

compliance with applicable provisions of the CEA, including core 

principles, and the CFTC Regulations thereunder, including 

documentation relied upon to establish the basis for compliance with 

the applicable law, or incorporate information contained in such 

documentation, with appropriate citations to data sources, (3) 

description of any agreements or contracts entered into with other 

parties that enable the Exchange to carry out its responsibilities, (4) 

certification that the Exchange posted on its website a notice of its 

request for CFTC approval of the new product with a copy of the 

submission, (5) a request for confidential treatment as permitted 

under CFTC Regulation 40.8, if appropriate, and (6) the filing fee 

required in accordance with CFTC Regulations. If requested by 

CFTC staff, the Exchange will provide evidence, information or 

data demonstrating that the contract meets, initially or on a 

continuing basis, the requirements of the CEA, or other 

requirements for designation or registration under the CEA or the 

CFTC Regulations thereunder. The Exchange shall submit the 

requested information by the open of business on the date that is two 

business days from the date of request by CFTC staff, or at the 
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2023v34 50

conclusion of such extended period agreed to by CFTC staff after 

timely receipt of a written request from the Exchange.

(c) Nodal Contracts on power may settle against the pricing at a single 

physical location (a “Node”) on the physical network, as defined by 

the ISO, or against multiple Nodes on this network. For Nodal 

Contracts on power which settle against a Contract Node that is the 

consolidation of multiple physical Nodes, the Settlement Price shall 

be the simple average of all the included Nodes for the duration of 

the Expiry period as provided in Rule 4.10 (“Expiry Settlement”) 

and the appropriate Contract Class. 

(d) Nodal Contracts based on trucking freight futures will settle against 

the simple average of the corresponding DAT Freight Rate Index for 

the duration of the Expiry period as provided in Rule 4.10 (“Expiry 

Settlement”). 

(e)(d) Natural gas Expiries will settle against the last Settlement Price for 

the Expiry as determined by either an index or exchange listed 

contract as specified in the Contract Specification for the Nodal 

Contract. 

(f)(e) Nodal Contracts based on environmental products will Physically 

Settle against the underlying Deliverable Product as specified in the 

Contract Specifications. 

(g)(f) Options will settle physically against the underlying futures contract 

as specified in the Contract Specifications. 

(h)(g) For Nodal Contracts on power, in the event the Exchange 

determines that an ISO will no longer price a Node that is a 

component of the Contract Node, the Exchange may eliminate the 

Node from the Contract Node. In the event the Exchange determines 

that an ISO will no longer price a Node that is the whole of the 

Contract Node, the Exchange will substitute a successor Contract 

Node that, in the Exchange’s judgment, is reasonably comparable to 

the Contract Node no longer being priced, or if no open interest 

exists, the Exchange will discontinue the Nodal Contract. 

4.2.2 Trading Status 

(a) Expiries may have four trading statuses in the market as defined 

below: Active, Restricted, Suspended, and Closed. 

(b) Active. All Expiries will have a status of Active upon being entered 

into the market for trading. Active Expiries are available for 

unrestricted trading as Block Trades and on the Trading Platform if 

offered. 
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2023v34 51

(c) Restricted. In the case where all initial Settlement Price data is 

available, the Expiry is set to Restricted status at the end of the day. 

The Restricted status allows the Exchange to capture additional ISO 

revisions to the components of Locational Marginal Price up to the 

Last Trading Day as defined by the Contract Specifications. For 

example, a monthly Off-Peak day-ahead power Expiry would 

become Restricted at the end of the second to last day of the month 

– which is the day that all Settlement Price data become available 

for the Expiry in question. During the Restricted period, an Expiry 

can only be traded as a Block Trade within a narrowly defined band 

as determined by the Exchange (e.g., plus or minus one percent of 

the announced initial Settlement Price). Restricted Expiries cannot 

be traded on the Trading Platform. 

(d) Suspended. Expiries may be suspended at any time, in order to 

prevent further trading. For example, Tthis may occur on a power 

Nodal Contract in response to the decision of an ISO to stop 

providing pricing of the relevant Contract Nodes; or for a Nodal 

Contract based on trucking freight futures after the last Business 

Day of the Contract Term; or for a Nodal Contract based on 

environmental products if the Deliverable Product is no longer 

available as determined by the Exchange. A Suspended status may 

also be used to end trading within the Last Trading Day of an 

expiring natural gas Expiry once trading has ceased and pricing is 

known on the Final Settlement Price, as detailed in the Contract 

Specification. 

(e) Closed. Upon determination of the Final Settlement Price, the 

Expiry is Closed, all trading has ended and the Final Settlement 

Price is fixed. 

4.3 Use of User IDs 

4.3.1 Each Participant, including each FCM Participant, must request one or 

more ITMs as needed to accommodate the nature and volume of the 

Participant’s or the Customer’s business. 

4.3.2 Each Participant, including each FCM Participant, must have at least one 

Authorized User and each Authorized User must have at least one unique, 

Exchange assigned, registered User ID. 

4.3.3 Each Order entered will contain a previously assigned User ID or such user 

credentials that enables the Exchange to identify the Authorized User that 

entered the Order. 

4.3.4 No Person may use a User ID to place any Order except as permitted by 

these Rules, nor may any Person knowingly permit or assist the 
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unauthorized use of a User ID. Each Participant, including each FCM 

Participant, and Authorized User shall ensure that no User ID is used by 

any Person not authorized by these Rules. Each Participant, including each 

FCM Participant, that is not an individual must have in place policies and 

procedures acceptable to the Exchange to ensure the proper use and 

protection of User IDs. 

4.3.5 Each Participant, including each FCM Participant, shall ensure the 

accuracy of the registration information of its Authorized Users at all 

times. 

4.3.6 Each Participant, including each FCM Participant, shall be solely 

responsible for controlling and monitoring the use of all User IDs issued 

to it and its Authorized Users. 

4.3.7 Each Participant, including each FCM Participant, shall notify the 

Exchange promptly upon becoming aware of: 

(a) any unauthorized disclosure or use of any User ID assigned to it or 

any of its Authorized Users and of any other reason for deactivating 

a User ID; and 

(b) any unauthorized access to the Exchange by any Authorized User or 

by any Person using a User ID assigned to such Participant/FCM 

Participant or Authorized User. 

4.3.8 Each Participant, including each FCM Participant, and its Authorized 

Users shall be bound by any actions taken through the use of a User ID 

assigned to such Participant/FCM Participant or Authorized User (other 

than any such actions resulting from the fault or negligence of the 

Exchange), including the submission of Orders and/or execution of 

Transactions, whether or not such actions were taken or authorized by such 

Participant/FCM Participant or Authorized User, as the case may be. 

4.4 Central Limit Order Book Trades – Nodal T7

4.4.1 Order Requirements 

To be valid, an Order submitted to the Nodal T7 shall include the 

following information: quantity, price (except for Market Orders), 

instrument(s), buy or sell designation, User ID. Orders must be submitted 

in increments of the Lot Size specified in the Contract Specifications for 

the applicable Nodal Contract. 

4.4.2 Order Types 

The following types of Orders are allowed on the Nodal T7: 
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(a) Limit Orders. A Limit Order is an Order to buy or sell a stated 

quantity at a specified price, or at a better price, if obtainable. Unless 

otherwise specified, any residual volume from a Limit Order that is 

not withdrawn or executed is retained in the Nodal T7 with the same 

validity of the original order unless it is cancelled by the 

Participantparty. 

(b) Market Orders. A Market Order is executed at the best price or 

prices available in the order book at the time the Order is received 

until the Order has been filled in its entirety. 

(c) Stop Limit Orders. A Stop Limit Order has two components: (1) the 

stop price and (2) the limit price. When the stop price is triggered, 

the Order becomes executable as a Limit Order at the limit price. 

The Order will be executed at all price levels from the stop price up 

to and including the limit price. If the Order is not fully executed, 

the remaining quantity of the Order will remain active on Nodal T7 

at the limit price. 

(d) Stop Market Orders. A Stop Market Order has a predefined stop 

price. When the stop price is triggered, the Order becomes 

executable as a Market Order. The Order will be executed at the best 

price or prices available on Nodal T7 at the time the Order is 

received until the Order has been filled in its entirety. 

4.4.3 Implied Orders 

Synthetic orders are derived from direct orders that are bid or offered on 

Nodal T7 by Participants. Self-match prevention functionality will not 

prevent self-matches if the trade involves an Implied Order; however, 

self-matches will be reviewed by the Compliance Department. Absent 

evidence to the contrary, self-match events involving Implied Orders 

will be deemed unintentional by the Exchange. A detailed overview of 

Implied Order functionality is available in the Nodal T7 Functional 

Reference Guide on the Nodal Exchange website at 

www.nodalexchange.com

4.4.4 Order Validity 

Order validity limits the lifetime of the orders on Nodal T7. The following 

values for order validity are supported: 

(a) Good-For-Day (GFD). GFD Orders are deleted automatically at the 

end of the same trading day the Order was entered on Nodal T7. 

(b) Good-Till-Cancelled (GTC). GTC Orders remain open until 

cancelled by the Participant party. 
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2023v34 54

(c) Good-Till-Date (GTD). Open GTD Orders are automatically deleted 

at the end of the date specified by the Participantparty on the Order. 

(d) Immediate-Or-Cancel (IOC). IOC Orders that are not partially or 

entirely executed as Nodal Contracts upon Order entry are 

immediately deleted. 

(e) Fill-Or-Kill (FOK). FOK Orders that are not entirely executed as 

Nodal Contracts upon Order entry are immediately deleted. 

4.4.5 Submission 

Submission of an Order to the Nodal T7 constitutes a representation by 

the submitting Participant that it is acting as principal in respect of such 

Order or it is acting as an FCM Participant for and on behalf of its 

Customer. 

Orders may be submitted to the Nodal T7 by electronic submission to the 

Exchange in accordance with any procedures set forth by the Exchange 

from time to time and published at www.nodalexchange.com. 

4.4.6 Modification and Cancellation 

Any Order that has been entered into the Nodal T7 may be modified or 

cancelled unless and until it has been executed or has otherwise expired. 

Any such modification or cancellation requires that a modification Order 

or cancellation Order, as the case may be, with respect to the original 

Order be entered into the Nodal T7. Such modification or cancellation 

will become effective upon receipt by the Nodal T7 of the modification 

Order or cancellation Order. Every Order automatically expires (i) at the 

end of the order validity period specified by the Participantparty on the 

Order, if applicable, (ii) in the event of any suspension or curtailment of 

trading, or (iii) in the case of any failure of the Nodal T7. 

4.4.7 Nodal T7 Trade Matching 

Orders entered on the Nodal T7 will be continuously matched based on 

price then time priority. 

4.4.8 Clearing 

All matched trades generated by the Nodal T7 will be automatically 

submitted to the Clearing House for registration and novation. Upon 

registration at the Clearing House, the Exchange will make available the 

Participant’sall cleared trades. Further description of Clearing House 

procedures and rules can be found in the Clearing House rulebook. The 

Exchange reserves the right to cancel trades submitted to the Clearing 

House in accordance with Rule 4.9. 
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4.4.9 Trading Information 

The Exchange shall make public daily information on Settlement Prices, 

volume, open interest, and opening and closing ranges for actively traded 

contracts on the contract market. Trading information will be published 

on the Exchange website at the end of the day.

4.5 Central Limit Order Book Trades – Nodal LiveTrade 

4.5.1 Order Requirements 

To be valid, an Order submitted to Nodal LiveTrade must include the 

following information: Order ID, quantity, price, Expiry(ies), buy or sell 

designation, User ID and ITM. Orders must be submitted in increments of 

the Trading Platform Lot Size, which will be posted at 

www.nodalexchange.com. The maximum order size permitted by Nodal 

LiveTrade is 1,000 lots. 

4.5.2 Order Types 

The following types of Orders are allowed on Nodal LiveTrade: 

(a) Limit Orders. Orders to buy or sell a stated quantity at a specified 

price, or at a better price, if obtainable. Unless otherwise specified, 

any residual volume from a Limit Order that is not withdrawn or 

executed is retained in Nodal LiveTrade until cancelled by the 

Participant. All Limit Orders are removed from Nodal LiveTrade at 

the end of the trading session. 

4.5.3 Submission 

(a) Submission of an Order to Nodal LiveTrade constitutes a 

representation by the submitting Participant that it is acting as principal in 

respect of such Order. Nodal LiveTrade is only available to Persons with 

Direct Access.

(b) Orders may be submitted to Nodal LiveTrade by electronic 

submission to the Exchange in accordance with any procedures set forth by 

the Exchange from time to time and published at www.nodalexchange.com. 

4.5.4 Modification and Cancellation 

Any Order that has been entered into Nodal LiveTrade may be modified or 

cancelled unless and until it has been executed or has otherwise expired. 

Any such modification or cancellation requires that a modification Order or 

cancellation Order, as the case may be, with respect to the original Order be 

entered into Nodal LiveTrade. Such modification or cancellation will 

become effective upon receipt by Nodal LiveTrade of the modification 
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2023v34 56

Order or cancellation Order. Every Order automatically expires (i) at the 

end of the Trading Hours on the calendar day such Order is placed, (ii) in 

the event of any suspension or curtailment of trading, or (iii) in the case of 

any failure of Nodal LiveTrade. 

4.5.5 Nodal LiveTrade Trade Matching 

Orders entered on Nodal LiveTrade will be continuously matched based on 

price then time priority. 

4.5.6 Clearing 

All matched trades generated by Nodal LiveTrade will be automatically 

submitted to the Clearing House for registration and novation provided that 

it will not cause any party to the trade to exceed its Trade Risk Limit, as 

described in Section V of these Rules. Upon registration at the Clearing 

House, the Exchange will make available, via a web interface, the 

Participant’s cleared trades. Further description of Clearing House 

procedures and rules can be found in the Clearing House rulebook. The 

Exchange reserves the right to cancel trades submitted to the Clearing 

House in accordance with Rule 4.9. 

4.5.7 Trading Information 

The Exchange shall make public daily information on Settlement Prices, 

volume, open interest, and opening and closing ranges for actively traded 

contracts on the contract market. Trading information will be published on 

the Exchange website at the end of the day. 

4.6 Block Trades 

4.6.1 The Exchange shall designate the Nodal Contracts in which Block Trades 

shall be permitted and determine the minimum block size for such 

transactions as described herein. Appendix B to these Rules (“Minimum 

Block Sizes for Nodal Exchange Contracts”) sets forth a listing of 

minimum block sizes for Nodal Contracts. 

4.6.2 The following Rules shall govern Block Trades: 

(a) A Block Trade must be limited to large transactions appropriate for 

each listed contract, i.e., a size larger than the size in which a single 

buy or sell order is reasonably anticipated to be able to be filled in 

its entirety in the CLOB without incurring a substantial price 

concession. Orders may not be aggregated in order to achieve the 

minimum transaction size unless expressly permitted under 

Applicable Law. 
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2023v34 57

(b) Each Participant or Customer entering into a Block Trade must meet 

the minimum financial requirements outlined in Rule 3.4.1. be an 

ECP.

(c) An Authorized Broker may submit a Block Trade to the Exchange 

on behalf of Participants and/or Customers, as applicable, that have 

specified that such Block Trade was executed subject to the Rules 

of the Exchange. 

(d) The price at which a Block Trade is executed must be fair and 

reasonable in light of (i) the size of the Block Trade, (ii) the prices 

and sizes of other Transactions in the same contract at the relevant 

time, (iii) the prices and sizes of transactions in other relevant 

markets, including the related swap markets, at the relevant time, 

and (iv) the circumstances of the markets or the Participantsparties

to the Block Trade. 

(e) Block Trades shall not affect Transactions executed on the Trading 

Platform. 

(f) Parties to a Block Trade must ensure that each Block Trade is 

submitted without delay upon execution of the trade, in no event 

later than fifteen (15) minutes after execution via an approved 

submission method. The submission must include the Nodal 

Contract(s), contract month(s), price, quantity of the Transaction, 

time of execution, the respective Clearing Member accounts, as well 

as any other information that the Exchange may require. The 

Exchange shall promptly publish Block Trade price and volume 

information separately from the reports of Transactions executed on 

the Trading Platform. 

(g) Authorized Brokers and Participants and/or Customers, as 

applicable, involved in the execution of Block Trades must maintain 

written or electronic records of all such Block Trades, including an 

electronic timestamp reflecting the date and time each such Order 

was received as well as an electronic timestamp reflecting the date 

and time such Order was executed or cancelled.

(h) If an FCM Clearing Member has actual or constructive knowledge 

that an account it carries does not meet the requirements of this Rule 

4.6 and fails to take appropriate action, the FCM Clearing Member 

may be found to have committed an act detrimental to the best 

interests of the Exchange. Upon request from the Exchange, an FCM 

Clearing Member carrying an account for which a Block Trade has 

been executed shall verify that the Participant or Customer account 

holder qualifies as an ECP pursuant to Rule 3.4.1 to the Exchange. 
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4.6.3 Trade Entry 

(a) Block Trades may be accepted from Participants or Authorized 

Brokers. 

(b) For Block Trades that are submitted directly by Participants, 

Exchange staff will facilitate trade entry via an email template, 

where both Participants must confirm the Block Trades, specifying 

the identical Expiry(s) to be traded, the volume and price, and the 

buyer and seller. 

(c) An Authorized Broker must specify the Expiry(s) to be traded, the 

volume and price, the buyer and seller and their respective Clearing 

Members. Both buyer and seller must be ParticipantsECPs. 

4.6.4 Modification and Cancellation 

(a) A Block Trade may be modified or cancelled by an Authorized 

Broker during Trading Hours on the day of submission of the Block 

Trade upon the mutual agreement of and consistent with the 

instructions of the two Block Trade counterparties. A Block Trade 

may not be modified or cancelled by an Authorized Broker outside 

of Trading Hours or after the day of submission of the Block Trade. 

If it is discovered outside of Trading Hours or after the day of 

submission of the Block Trade that erroneous information has been 

submitted as part of a Block Trade, the Exchange should be notified 

as soon as the error is detected. If appropriate, the Exchange will 

facilitate the modification of the trade on a discretionary basis; any 

trade modification the Exchange agrees to submit to the Clearing 

House will be done during normal Trading Hours. 

(b) Block Trades executed outside of Trading Hours are queued for 

clearing as described in Rule 4.1.1 above and may be cancelled 

directly on the web platform as long as the cancellation occurs 

before the Exchange reopens for regular Trading Hours. 

4.6.5 Risk Limit Validation and Clearing 

(a) All Block Trades submitted by either an Authorized Broker or 

Participant will be subject to Trade Risk Limit verification. Upon 

verification that the Block Trade will not cause any party to the 

Block Trade to exceed its Trade Risk Limit, the Block Trade will be 

submitted to the Clearing House for registration and novation, as 

described in Section V of these Rules. Upon Clearing House 

registration, the Exchange will make available, via a web interface, 

confirmation that the Block Trade has been accepted. Further 

description of Clearing House procedures and rules can be found in 

the Clearing House rulebook. 
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(b) A Participant or Customer, as applicable, that has exceeded its Trade 

Risk Limit (because of changes in the risk profile of such 

Participant’s or Customer’s existing positions or otherwise) may be 

party to a Block Trade only if such Block Trade will reduce the 

Trade Risk Limit violation. 

4.6.6 Front Running Prohibited 

(a) Parties involved in the solicitation or negotiation of a Block Trade 

and parties that are privy to nonpublic information regarding a 

consummated Block Trade may not disclose such information to any 

other party prior to the public report of the Block Trade by the 

Exchange and may not trade in the same product or closely-related 

product for the purpose of taking advantage of such information. 

(b) ParticipantsA buyer or seller to a potential Block Trade may engage 

in pre-hedging or anticipatory hedging of the position that they it 

believes in good faith will result from the consummation of the 

Block Trade. In addition, Participantsbuyers or sellers to a Block 

Trade are permitted to initiate trades to hedge or offset the risk 

associated with the Block Trade following the consummation of the 

Block Trade, including during the period preceding the public report 

of the Block Trade by the Exchange. However, an Authorized 

Broker that accepts or facilitates the execution of a Block Trade is 

subject to the pre-hedging/anticipatory hedging prohibition, which 

also applies to any account that is owned or controlled by, or in 

which an ownership interest is held by, including a proprietary 

account of the employer of, such Authorized Broker. 

4.7 Exchange for Related Position (EFRP) 

4.7.1 Categories of EFRP

Participants and/or Customers, as applicable, may enter into the following 

type of Exchange for Related Position transaction (“EFRP”) in accordance 

with the provisions of this Rule: 

(a) an Exchange for Physical transaction (“EFP”), which is a privately 

negotiated and simultaneous exchange of a futures position in a 

Nodal Contract for a corresponding cash position. 

(b) EFPs on Nodal Exchange may be executed for Nodal Contracts 

based on natural gas and environmental products only and their 

corresponding cash positions. 
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4.7.2 EFRP Requirements

(a) An EFRP shall consist of two discrete but related simultaneous 

transactions in which one Participantparty must be the buyer of (or 

the holder of the long market exposure associated with) the related 

position and seller of the corresponding Nodal Contract, and the 

other Participantparty must be the seller of (or the holder of the short 

market exposure associated with) the related position and the buyer 

of the corresponding Nodal Contract. The related position must 

involve the cCommodity underlying the Nodal Contract (or any 

derivative, by-product or related product that has a reasonable 

degree of price correlation to the Nodal Contract) in a quantity that 

is approximately equivalent to the quantity covered by the Nodal 

Contract. 

(b) The accounts involved in the execution of an EFRP must be: 

i. independently controlled with different beneficial owners; 

or 

ii. independently controlled accounts of separate legal entities 

with the same beneficial owners, provided that the account 

controllers operate separate business units; or 

iii. independently controlled accounts within the same legal 

entity, provided that the account controllers operate in 

separate business units; or 

iv. commonly controlled accounts of separate legal entities, 

provided that the separate legal entities have different 

beneficial owners. 

(c) The parties to an EFRP shall maintain all documents relevant to the 

Nodal Contract and the related position, including all documents 

customarily generated in accordance with the relevant market 

practices, including, as applicable, copies of the documents 

evidencing title to, or the contract or contracts to buy or sell, the 

underlying cCommodity (or the derivative, by-product or related 

product) involved in such EFRP. Any such documents and 

information shall be furnished to the Exchange upon request. 

(d) The price of the Nodal Contract exchanged in an EFRP must be 

mutually agreed, commercially reasonable and consistent with the 

price increments set forth in the applicable Contract Specification. 

(e) EFRP transactions must be submitted to the Exchange as soon as 

possible following mutual agreement to the relevant terms by the 

parties to the EFRP. Barring any extenuating circumstances, 
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ParticipantsEFRPs must be submitted EFRPs to the Exchange on the 

same day that the EFRP transaction is executed.

(f) All EFRP transactions must be submitted to the Exchange by 4:00 

PM EPT.

4.7.3 Reporting Requirements

The parties to an EFRP shall create and maintain records that identify the 

transaction as an EFRP and specify the date and time of execution and shall 

cause the EFRP to be identified and reported to the Exchange in accordance 

with such procedures as are determined by the Exchange from time to time. 

4.7.4 Clearing Requirements

All Nodal Contracts effected as part of EFRPs shall be cleared in 

accordance with these Rules. 

4.8 Position Transfers 

4.8.1 Position Transfer Process

The Exchange may permit transfer trades to move positions between ITM 

accounts or Clearing Member accounts for administrative purposes 

(“Position Transfers”) where no change in ownership is involved. 

Participants and Clearing Members must obtain approval from the 

Exchange for a Position Transfer; such approval to be granted at the sole 

discretion of the Exchange. Position Transfers will not contribute to any 

reported volume, price, or trading range. 

4.8.2 Transfer of Positions With Change in Ownership

TheSubject to CFTC Regulation 1.65, the Exchange may permit the transfer 

of positions that involves a change in ownership when the proposed transfer 

is in connection with, or as a result of, a merger, asset purchase, 

consolidation, or other similar non-recurring corporate transaction between 

Participantsparties where one or more of the Participantsparties become the 

successor in interest to one or more other Participants. Participantsparties. 

A party must apply for and obtain prior written approval from the Exchange; 

such approval to be granted at the sole discretion of the Exchange. The 

transferred trades must be indicated as transfers that will not contribute to 

any reported volume, price, or trading range. 

The Exchange may, with the consent of the Clearing Member(s) involved, 

permit the transfer of existing trades if, in the opinion and sole discretion of 

the Exchange, the situation so requires and such transfer is in the best 

interests of Nodal Exchange. 
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4.9 Trade Cancellations; Trade Reviews 

4.9.1 Trade Cancellation Authority 

The Exchange may adjust trade prices or cancel (bust) trades when such 

action is necessary to mitigate market disrupting events caused by the 

improper or erroneous use of the Exchange or by system defects or 

malfunctions. Notwithstanding any other provision of this Rule 4.9.1, the 

Exchange may adjust trade prices or cancel any trade if the Exchange 

determines that allowing the trade to stand as executed may have a material, 

adverse effect on the integrity of the market. Any decision of the Exchange 

with respect to an adjustment or cancellation subject to this Rule 4.9.1 shall 

be final. 

4.9.2 Review of Trades 

The Exchange may review a trade based on its analysis of market conditions 

or a request for review by a user of the Exchange. A request for review must 

be made within eight minutes of the execution of the trade. The Exchange 

shall promptly determine whether the trade will be subject to review, and 

upon deciding to review a trade, the Exchange will promptly issue an alert 

to all Participantsparties on the Exchange indicating that the trade is under 

review. In the case of Nodal Contracts determined by the Exchange to be 

illiquid, the Exchange may initiate a review up to one hour after the 

execution of the trade, and has the authority, but not the obligation, to 

review trades reported more than one hour following execution if it 

determines that the trade price was significantly out of line with fair value. 

In the course of its review of any trade, the Exchange may, but is not 

obligated to, inform any of the parties to the trade of the identity and contact 

information of any other party to the trade. 

The Nodal Exchange Electronic Trade Error Policy is posted at 

www.nodalexchange.com 

4.10 Futures Expiry, Options and Physical Settlements 

4.10.1 Futures Expiry Daily Settlement 

(a) The Exchange will provide the Clearing House with Settlement 

Prices twice per day for use by the Clearing House in settling trades 

and positions. The first of these Settlement Prices (the “Intra-day 

Settlement Price”) will be determined at 12:30 pm EPT (absent 

operational delays), and the second (the “Daily Settlement Price”) 

shall be determined at the close of business each day. Settlement 

Prices will be calculated primarily based on that day’s Transactions, 

the Orders on the CLOB, relevant trading in other markets, as well 

as other available market data. For power Expiries with no direct 

market information, the Exchange will employ an extrapolation 
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methodology to calculate the Settlement Prices. This extrapolation 

methodology relies on creating a relationship, through a regression 

of historical price movements, of each Nodal Contract at a nontrading Contract Node and a Nodal Contract at a traded Contract 

Node, usually a hub or zone. For natural gas, and environmental 

product and trucking freight Expiries with no direct market 

information, Settlement Prices will be extrapolated from the most 

active Expiries based on the prevailing differential between the 

Expiries. 

(b) The Exchange reserves the right to adjust Daily Settlement Prices as 

it deems necessary based on current market conditions or otherwise, 

per the Contract Specifications. 

(c) Without limiting the foregoing, the Exchange reserves the right to 

subject Block Trades priced more than a certain percentage set by 

the Exchange above or below the Settlement Price to a review 

pursuant to Rule 4.9.2 to determine whether the Exchange believes 

it is appropriate to include the Block Trade in that day’s Intra-day 

Settlement Price or Daily Settlement Price calculation. 

4.10.2 Futures Expiry Final Settlement 

(a) All power Expiries on the Exchange will ultimately settle in cash 

against prices in the physical markets as determined by the 

definitional characteristics of the Expiry (Contract Node, 

Commodity Type, Contract Term, Contract Class and Expiry date) 

and will post in dollars per megawatt-hour ($/MWh), as specified in 

the relevant Contract Specifications. As such, the price for an 

Expiry is determined by averaging all of the applicable hours as 

defined in the Expiry. In the case where a Contract Node is 

composed of multiple physical Nodes, the prices of all the 

constituent Nodes are averaged together to determine final 

settlement pricing. 

(b) For power Expiries, the Exchange will first calculate an initial 

Settlement Price on the last date contained in the Contract Term. On 

the Last Trading Day, the Final Settlement Price will be calculated, 

with any adjustments to the underlying pricing data reflected in the 

Final Settlement Price. During the period between the last date in 

the Contract Term and the Last Trading Day, trading on the Expiry 

will be restricted, as provided in Rule 4.2.2. 

(c) Natural gas Expiries will settle against the relevant exchange listed 

contract or industry index as detailed in its Contract Specification, 

and prices shall be posted in $/MMBtu. Natural gas Nodal Contracts 
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will cease trading on the Last Trading Day, as outlined in the 

Contract Specification.

(d) Trucking freight Expiries will settle in cash against the simple 

average of the corresponding DAT Freight Rate Index with the 

Pickup Date from the first DAT Business Day of the contract month 

through the last DAT Business Day, inclusive. The Exchange will 

first calculate an initial Settlement Price once all the underlying data 

has been collected. On the Last Trading Day, the Final Settlement 

Price will be calculated, with any adjustments to the underlying 

pricing data reflected in the Final Settlement Price. During the 

period between the last date in the Contract Term and the Last 

Trading Day, trading on the Expiry will be suspended, as provided 

in Rule 4.2.2. 

4.10.3 Options Daily Settlement 

(a) The Exchange will provide the Clearing House with Settlement 

Prices twice per day for use by the Clearing House in settling trades 

and positions. The Intra-day Settlement Price will be determined at 

12:30 pm EPT (absent operational delays), and the Daily Settlement 

Price shall be determined at the close of business each day. 

Settlement Prices will be calculated primarily based on that day’s 

Transactions, the Orders on the CLOB, relevant trading in other 

markets as well as other available market data as outlined in the 

Contract Specifications. 

(b) The Exchange reserves the right to adjust Daily Settlement Prices as 

it deems necessary based on current market conditions or otherwise, 

per the Contract Specifications. 

(c) Without limiting the foregoing, the Exchange reserves the right to 

subject Block Trades priced more than a certain percentage set by 

the Exchange above or below the Settlement Price to a review 

pursuant to Rule 4.9.2 to determine whether the Exchange believes 

it is appropriate to include the Block Trade in that day’s Intra-day 

Settlement Price or Daily Settlement Price calculation. 

4.10.4 Options Exercise (Physical Settlement) 

(a) Exercise of “In-the-Money” Options is automatic on the last trading 

day for calendar year power Options. Exercise of “In-the-Money” 

Options is automatic on the last trading day unless the Exchange is 

notified by 4:30 pm EPT for power monthly Options and natural gas 

Options or by 5:30 pm EPT for environmental Options on the Last 

Trading Day (1) to allow the “In-the-Money” Options to expire 

without exercise or (2) to exercise expiring “Out-of-the-Money” 
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Options. When exercised against, option sellers will be selected on 

a pro-rata basis or at the Exchange’s discretion. 

(b) On the Last Trading Day, the Daily Settlement Prices for Options’ 

underlying futures contracts (“Reference Price”) shall be published 

no later than 3:00 pm EPT for power Options, no later than 3:30 pm 

EPT for natural gas Options and no later than 4:30 pm EPT for 

environmental Options (absent operational delays by the Exchange) 

for the relevant Option Strike Prices. Reference Prices will be 

calculated primarily based on that day’s Transactions, the Orders on 

the CLOB, relevant trading in other markets as well as available 

market data, as outlined in the Contract Specifications for the 

underlying futures contracts. 

4.10.5 Physically Settled Nodal Contracts 

(a) Nodal Contracts based on environmental products will be Physically 

Settled on the close of trading on the Last Trading Day. The Final 

Settlement Price shall be determined by the Exchange as specified 

in the Contract Specifications. 

(b) On the Last Trading Day, the Exchange will provide the Clearing 

House with information identifying the Participants with delivery 

obligations for the purpose of issuing Tender and invoice notices in 

accordance with the Clearing House Rulebook. 

4.11 Recordkeeping; Audit Trail 

4.11.1 Participants shall maintain records of Orders and Transactions related to 

Nodal Contracts executed on the Exchange and in related derivatives 

markets, including in the productsCommodity underlying those Nodal 

Contracts for a period of five (5) years. and maintain them in a readily 

accessible manner for two (2) years. Participants that enter Orders into the 

Trading Platform through an order routing a front-end system rather than 

directly through the Trading Platform are responsible for maintaining or 

causing to be maintained audit trail information for such electronic Orders, 

which shall include the ITM, Order ID, Expiry, price, quantity, Order type, 

User ID and any other tag information for each electronic Order entered, 

modified or cancelled on the Exchange (the “Audit Trail”). Such Audit 

Trail shall include the time that an Order is entered, modified or cancelled. 

Times that are so captured must not be capable of being modified by the 

Person entering the Order and must reflect all necessary data fields 

specified by the Exchange from time to time. For executed Orders, the 

Audit Trail must also include the execution time of the trade and all trade 

data. 
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4.11.2 Participants shall maintain Audit Trail information for a minimum of five 

(5) years, maintain them in a readily accessible manner for two (2) years,

and must have the ability to produce Audit Trail data in a standard format 

upon request of the Exchange. 

4.12 Information Regarding Orders 

4.12.1 The Exchange will make information regarding Orders (including prices 

bid or offered), trades and any other matters it may deem appropriate 

available to Participants and other Persons at such times and in such 

manner (whether through the Exchange, financial information services or 

otherwise) as it may consider necessary or advisable from time to time. 

4.12.2 Each Participant or other Person receiving any such information referred 

to in Rule 4.12.1 above shall not redistribute such information other than 

to the extent and in the manner as may be expressly permitted by the 

Exchange in writing from time to time. 

4.13 Disaster Recovery; Business Continuity 

4.13.1 Each Participant shall have written disaster recovery and business 

continuity policies and procedures in place to ensure it is able to perform 

certain basic operational functions in the event of a significant internal or 

external interruption to its operations. At a minimum, the following areas 

must be addressed in the Participant’s policies and procedures: 

(a) the Participant must have procedures in place to allow it to continue 

to operate during periods of stress or to transfer accounts to another 

fully operational Participant with minimal disruption to the 

Exchange. 

(b) the Participant must perform periodic testing of disaster recovery 

and business continuity plans, duplication of critical systems at back 

up sites and periodic back-up of critical information and provide the 

Exchange with information regarding the foregoing upon request; 

and 

(c) the Participant must maintain and, at the request of the Exchange, 

provide accurate and complete information for its key personnel. A 

Participant must inform the Exchange in a timely manner whenever 

a change to its key personnel is made. 

4.13.2 The Exchange may prescribe additional and/or alterative requirements for 

a Participant’s compliance with this Rule. 

4.14 Trading Information 
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The Exchange shall make public daily information on Settlement Prices, volume, 

open interest, and opening and closing ranges for actively traded Nodal Contracts. 

Such trading information will be published on the Exchange website after the 

market close on each Business Day. 

4.15 Trade Allocation 

An FCM Participant may allocate trades to Customer accounts that it represents 

pursuant to applicable CFTC Regulations and any requirements of the Exchange. 

Such trades must be allocated and recorded in accordance with CFTC Regulation 

1.35(b) and the NFA’s Interpretive Notice related to Compliance Rule 2-10. 
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SECTION V CLEARING

5.1 Submission to Clearing House 

5.1.1 Transactions on the Trading Platform 

Immediately upon execution of a Transaction as provided in Rules 4.4 and 

4.5, such Transaction shall be discharged and novated in accordance with 

the rules of the Clearing House. 

5.1.2 Block Trades 

A Block Trade executed between Participantsparties pursuant to Rule 4.6 

and submitted to the Exchange that will not cause any party to the trade to 

exceed its Trade Risk Limit, or in the case where the Participant already 

exceeds its Trade Risk Limit will reduce its Trade Risk Limit violation, will 

be discharged and novated in accordance with the rules of the Clearing 

House. 

5.1.3 EFRPs 

An EFRP executed between Participantsparties pursuant to Rule 4.7 and 

submitted to the Exchange that will not cause any party to the EFRP to 

exceed its Trade Risk Limit, or in the case where the Participant already 

exceeds it Trade Risk Limit, will reduce its Trade Risk Limit violation, will 

be discharged and novated in accordance with the rules of the Clearing 

House. 

5.2 Clearing Members 

5.2.1 All Participants must be an Individual Clearing Member or have an 

agreement with an FCM Clearing Member that establishes an account for 

the Participant for the purpose of clearing the Participant’s Transactions 

through the Clearing House. Individual Clearing Members have dDirect 

aAccess to trade on the Exchange. All other Participants, which are not 

Individual Clearing Members, are granted direct access to trade 

authorization by their FCM Clearing Member.

5.2.2 An FCM Clearing Member may authorize a Participant to have Direct 

Access to the System. A Person is only eligible for Direct Access to the 

System upon execution of a Participant Agreement and such other 

agreements required by the Exchange. The Exchange may refuse to grant 

Direct Access to any Participant which an FCM Clearing Member seeks to 

authorize if the Exchange determines that granting Direct Access to such 

Participant is not consistent with the best interests of the Exchange. Any 

such refusal by the Exchange may be appealed by the FCM Clearing 

Member and shall be considered by the Exchange Participant Committee. 

In each case, the Exchange Participant Committee shall determine the 
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2023v34 69

specific procedures to be applied, provided that the FCM Clearing Member 

shall be afforded the opportunity to present such evidence as the 

Committee deems relevant. The rules of evidence shall not apply and a 

transcript shall not be created. 

5.2.3 Each FCM Clearing Member is responsible for the financial obligations 

arising from the Direct Access it authorizes for any Person, with respect to 

all Orders entered or Transactions executed. 

5.2.4 Each Clearing Member must identify the correct customer type indicator 

(“CTI”) to the Exchange for all Orders entered and Transactions executed. 

CTIs are as follows: 

(a) A CTI 1 is an Order or Transaction executed by a floor 

broker for his or her own account, an account which he or 

she controls or an account in which he or she has a financial 

interest. 

(b) A CTI 2 is an Order or Transaction executed for the house 

or proprietary account of a Clearing Member or Participant 

that has been granted trade authorization by its FCM 

Clearing Member. 

(c) A CTI 3 is an Order or Transaction executed for the account 

of another Participant who is an individual, an account such 

individual Participant controls or an account in which such 

individual Participant has an ownership or financial interest. 

(d) A CTI 4 is an Order or Transaction executed for any other 

account that does not meet the requirements of a CTI 1, CTI 

2, or CTI 3 (e.g., a Customer). 

5.2.5 With respect to each Person for which it authorizes Direct Access, the FCM 

Clearing Member shall: 

(a) Take any or all actions requested or required by the 

Exchange with respect to such Person, including but not 

limited to, assisting the Exchange in any investigation into 

potential violations of the Rules or the CEA, and requiring 

the Person to produce documents, provide information, 

answer questions and/or appear in connection with any 

investigation; 

(b) Suspend or terminate the Direct Access if the FCM Clearing 

Member has reason to believe that the Person is enjoined by 

order, judgment or decree of any court of competent 

jurisdiction or of the CFTC or the Securities and Exchange 

Commission (“SEC”) or of any state securities authority or 
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2023v34 70

agency engaging in or continuing any conduct or practice in 

connection with the purchase or sale of any Commodity, 

security, option or similar instrument; or if a Person with 

Direct Access fails to have adequate systems and controls 

for risk management to monitor its Orders and Transactions 

effected through Direct Access on a real time basis; 

(c) Suspend or terminate such Person if the FCM Clearing 

Member has reason to believe that the Person’s actions 

threaten the integrity or liquidity of any Nodal Contract, 

violate the Rules or the CEA, or if the Person fails to 

cooperate in any investigation; and 

(d) Independently maintain appropriate controls designed to 

facilitate the FCM Clearing Member’s management of 

financial risk and also utilize such controls designed to 

facilitate the FCM Clearing Member’s management of 

financial risk as may be provided by the Exchange from time 

to time. 

5.2.6 If an FCM Clearing Member has actual or constructive notice of a violation 

or potential violation of the Rules or the CEA in connection with the use 

of the System by a Person for which it authorizes Direct Access, and the 

FCM Clearing Member fails to take appropriate action, the FCM Clearing 

Member may be found to have violated Rule 6.2.13 and subject to 

disciplinary action under the Rules.

5.2.25.2.7 An FCM Clearing Member may at any time revoke any 

authorization granted and guarantee made by it to any Participant in 

accordance with Rule 5.2.1 above, by providing written notice of such 

revocation to the Exchange. The guarantee will remain in effect until the 

Participant has liquidated or transferred its positions and funds to another 

FCM Clearing Member. 

5.2.35.2.8 For clearing purposes, the Participant must specify Individual 

Trading Accounts that it wishes to be separately tracked and margined by 

its FCM Clearing Member. The Exchange will give each of these accounts 

an ITM for use by the Clearing House and its FCM Clearing Members. 

5.2.45.2.9 The FCM Clearing Member will set risk limits for each of the 

Participant’s accountsITMs and has the right to suspend trading by aFCM 

Participants’ Customer accounts. An FCM Participant on the Exchange. 

may set lower risk limits for each of its Customers.

5.3 Responsibility of Participants 

5.3.1 Each Participant must assist its FCM Clearing Member, if any, and the 

Clearing House in the clearing of its Transactions in Nodal Contracts. 
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Without limiting the generality of the foregoing, each Participant must: 

provide its FCM Clearing Member, if any, a telephone number so that such 

Participant may be reached at any time during the day in the event that 

there is a discrepancy in the clearing of its Transactions; if neither the 

Participant nor any such representative is present at the time specified 

above, such Participant’s FCM Clearing Member, if any, will be 

authorized to resolve any discrepancy in the manner it deems appropriate, 

but such resolution will not be relevant to the determination of the liability 

of any party to the trade. 

5.4 Clearing Services 

5.4.1 Whenever the Exchange designates a clearing organization other than the 

Clearing House for the clearance of Nodal Contracts with respect to which 

there are open positions, each Clearing Member must, as of the close of 

business on the second Business Day prior to the effective date of such 

designation, either become a clearing member of such new organization, 

or cause any such open Nodal Contracts carried by it either to be 

transferred to a clearing member of such new clearing organization or to 

be liquidated. 

5.5 Rules of the Clearing House 

5.5.1 The clearing services provided by the Clearing House with respect to any 

Nodal Contract, and the rights and obligations of purchasers and sellers 

under cleared Nodal Contracts (including rights and obligations in respect 

of clearing and settlement, variation payments and performance at 

maturity), will be governed by the rules of the Clearing House, except as 

otherwise provided in the Rules or Notices issued from time to time by the 

Exchange. 

5.5.2 Open positions in any Nodal Contract may only be offset by opposite 

Transactions in the same Nodal Contract that are executed either (A) on 

the Exchange or (B) through Block Trade transactions allowed under the 

Rules and any Notices issued from time to time by the Exchange. 

5.6 Notice of Arbitration 

5.6.1 In any arbitration concerning an alleged failure of any Participant to honor 

a trade in any Nodal Contract, each party to such arbitration must promptly 

provide copies of all documents filed or received in such arbitration by 

such party to the Clearing Member that guaranteed such party’s 

Transactions in Nodal Contracts when the trade allegedly took place. 
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5.7 Additional Terms Applicable to Clearing 

5.7.1 The Clearing House shall have the right to reject Nodal Contracts that arise 

from Transactions and to suspend clearing of such Transactions without 

notice, in accordance with the rules of the Clearing House; and 

5.7.2 A Clearing Member may transfer a Nodal Contract to another Clearing 

Member only upon notice to the Exchange and in accordance with the rules 

of the Clearing House. 
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SECTION VI PARTICIPANT CODE OF CONDUCT 

Preamble 

This Participant Code of Conduct (the “Code”) defines and reaffirms the values, principles 

and internal controls that Participants, their representatives (including Authorized Users) 

and Authorized Brokers, as applicable,a Person must follow in conducting their business 

activities on the Exchange. The Code is intended to complement the internal principles and 

practices of a ParticipantPerson and to guide a ParticipantPerson as it submits bids and 

offers, executes Transactions, and uses other services on the Exchange. Compliance with 

the Code allows ParticipantsPersons to assure the Exchange, regulators, the public and 

other market Pparticipants that their business activities on the Exchange are, and will 

continue to be, conducted with integrity. In addition, compliance with the Code by 

ParticipantsPersons gives Participantsany Person assurance that unlawful and unethical 

trading practices are not tolerated, that public disclosures of trading information are 

accurate, and that they and others Participants will abide by these ethical standards and 

maintain sound trading practices. 

Violations of this Code, which include aiding, abetting, or facilitating violations of this 

Code, may result in penalties including, but not limited to, temporary or permanent loss of 

access to the Exchange., a Disciplinary Action, and/or referral to a Government Authority. 

6.1 Ethical Standards 

Conducting trading activities in an honorable and principled manner consistent with 

the Code is the essence of ethical conduct with respect to the Exchange. Participants 

and Authorized BrokersPersons shall act, and shall cause their Authorized Users to 

act, as applicable, in accordance with these standards of ethics with regard to itstheir

Exchange activity. 

6.1.1 Regulatory Compliance. No Participant or Authorized Broker (or any of 

their Authorized Users)Person shall engage in conduct that is a violation 

of the CEA or CFTC Regulations, the Rules of the Exchange or the rules 

of the Clearing House and will conduct its business in accordance with all 

aApplicable lLaws, regulations, tariffs and rules, and in good faith, with a 

commitment to honest dealing. 

6.1.2 Fraud. No Participant or Authorized Broker (or any of their Authorized 

Users)Person shall engage, or attempt to engage, in any fraudulent act or 

engage in any scheme to defraud, deceive, trick, or mislead in connection 

with or related to any Exchange or Clearing House activity. 

6.1.3 Good Faith. No Participant (or any of its Authorized Users)Person shall 

knowingly enter, or cause to be entered, bids, or offers into the sSystem 

other than in good faith for the purpose of executing bona fide transactions.

6.1.4 Transaction Integrity. Participants (and their Authorized Users) shall 

honor the terms and conditions of the Participant Agreement and all 
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Persons will transact in Nodal Contracts only for legitimate business 

purposes, such as managing business risk or that otherwise have economic 

substance.

6.1.5 Antitrust. No Participant or Authorized Broker (or any of their 

Authorized Users)Person shall collude with any other market Participants 

or Authorized Brokersparticipants or Person to affect the price or supply 

of any cCommodity, allocate territories, customers, or Nodal Contracts, or 

otherwise unlawfully restrain competition. 

6.1.6 Risk Management. Participants and Authorized Brokers (and their 

Authorized Users) shall adopt, adhere to, and enforce risk management and 

other policies and structures that are designed to ensure that trading 

activities are conducted in accordance with this Code. 

6.2 Sound Trading Practices 

Commodity markets reflect the constantly changing dynamics of supply and 

demand. Efficient business operations in such an environment demand practices 

that can manage risk and discover market prices. Such practices must be consistent 

with the guiding Ethical Standards of this Code. Participants and Authorized 

BrokersPersons will act in accordance with these standards of sound trading 

practices with regard to their Exchange activity: 

6.2.1 Skills. All Participants and Authorized BrokersPersons are responsible for 

understanding all factors that influence the energy markets, in order to 

maintain a high level of competence in Participant trading. All Participants 

and Authorized BrokersPersons must actively and continually work to 

upgrade their skills, knowledge, and expertise in order to maintain a high 

standard of professional knowledge. 

6.2.2 Rules. Nodal Exchange will provide updates to these Rules and memos 

regarding the application and interpretation of these Rules. It is the 

obligation of each Participant and Authorized BrokerPerson to ensure these 

documents are read and understood. It shall be prohibited for a Participant 

or Authorized BrokerPerson or any of theirits Authorized Users, as 

applicable, to violate any Rule or any agreement made with the Exchange, 

or to engage in fraud, dishonorable or dishonest conduct, or conduct which 

is inconsistent with just and equitable principles of trade. 

6.2.3 Price Manipulation, Fictitious, Non-Competitive or Artificial 

Transactions. No Participant or Authorized BrokerPerson (or any of their 

Authorized Users, as applicable) shall engage, or attempt to engage, in any 

fraudulent act or engage in any scheme to defraud, or attempt to use or 

employ any manipulative device or artifice to defraud, deceive, trick, or 

mislead in connection with or related to any Exchange or Clearing House 

activity. Any actual or attempted manipulation of the price in any Contract 
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is prohibited. No Participant or Authorized BrokerNo Person shall effect 

or induce the purchase or sale of any Nodal Contract for the purpose of 

creating or inducing a false, misleading, or artificial appearance of activity 

in such Nodal Contract, or for the purpose of unduly or improperly 

influencing the price of such Nodal Contract, or for the purpose of making 

a price which does not reflect the true state of the market in such Nodal 

Contract. No Participant or Authorized BrokerPerson shall arrange and 

execute simultaneous offsetting buy and sell Orders in a Nodal Contract 

with intent to artificially affect reported revenues, trading volumes, or 

prices. 

6.2.4 Market Manipulation. No Participant or Authorized BrokerPerson shall 

attempt to manipulate or manipulate the market in any Nodal Contract. No 

Participant or Authorized BrokerPerson shall directly or indirectly 

participate in or have any interest in the profit of a manipulative operation 

or knowingly manage or finance a manipulative operation. This includes 

any pool, syndicate, or joint account, whether in corporate form or 

otherwise, organized or used intentionally for the purposes of unfairly 

influencing the market price of any Nodal Contract. 

6.2.5 Market Disruption. Each Participant or Authorized BrokerPerson shall 

operate its electronic trading system and conduct its activity on the 

Exchange in a manner that is reasonably intended to prevent, detect, and 

mitigate market disruptions or sSystem anomalies associated with 

electronic trading. Orders entered on Nodal Exchange for the purpose of 

upsetting the equilibrium of the market in any Nodal Contract or creating 

a condition in which prices do not or will not reflect fair market values are 

prohibited, and any ParticipantPerson 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 Exchange. 

6.2.6 Gratuities. Except with the prior written approval of the Chief Regulatory 

Officer, no Participant or Authorized BrokerPerson shall, directly or 

indirectly, give or permit to be given anything of value, including gifts and 

gratuities, to an Exchange Official in an amount that exceeds the maximum 

value permitted by the Exchange’s gifts and entertainment policy. 

6.2.7 Disruptive Practices. No Participant or Authorized BrokerPerson shall 

engage in any trading, practice, or conduct that constitutes a “disruptive 

practice,” as such term is defined by the CEA or CFTC Regulations, 

including section 4c(a)(5) of the CEA. Disruptive practices include, but are 

not limited to, entering an Order or a market message, or cause an Order 

or a market message to be entered with: (A) the intent to cancel the Order 

before execution, or modify the Order to avoid execution, commonly 

known as “spoofing”; (B) the intent to overload, delay, or disrupt the 
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System, the Exchange, or other market participants; (C) the intent to 

disrupt the orderly conduct of trading, the fair execution of Transactions, 

or mislead other market participants.

6.2.8 Rumors.Dissemination of False Information. No Participant or 

Authorized BrokerPerson shall knowingly circulatedisseminate, in any 

manner, rumorsfalse information, misleading information, or knowingly 

inaccurate information of a character which mightaffects or tends to affect

the price or market conditions in any Nodal Contract; provided, however, 

that this shall not prohibit discussion of unsubstantiated information, so 

long as its source and unverified nature are disclosed. 

6.2.9 False Reports. No Participant or Authorized BrokerPerson shall make 

any knowing misstatement or omission of a material fact to the Exchange, 

any Exchange Official, or any Board committee or Exchange panel. No 

Participant or Authorized BrokerPerson shall knowingly disseminate false 

or misleading reports regarding Transactions, the Exchange, or related to 

any of the underlying Commodity markets of a Nodal Contract. 

6.2.10 Wash Trades. No ParticipantPerson shall place or accept buy and sell 

Orders in the same product and expiration month, where knownsuch 

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 trades). Buy and sell 

Orders by ParticipantsPersons that are entered with the intent to negate 

market risk or price competition shall be deemed to violate the prohibition 

on wash trades. Additionally, no Participant or Authorized BrokerPerson

shall knowingly execute or accommodate the execution of such Orders by 

direct or indirect means. 

6.2.11 Front Running. No Participant (or any of their Authorized Users)No 

Person shall disclose or divulge the buy or sell Order of another Person 

except (A) in furtherance of executing the Order, (B) at the request of an 

authorized representative of the CFTC, or (C) pursuant to sub-paragraph 

6.3.1 of this Rule regarding certain pre-execution communications. 

6.2.12 Financial Condition. No trading will be conducted for the purpose of 

misrepresenting the financial condition of the Participant or Customer. 

6.2.13 Acts Detrimental to the Exchange. No Participant or Authorized 

BrokerPerson shall engage in conduct or practices inconsistent with just 

and equitable principles of trade or conduct detrimental to the best interests 

of the Exchange. Misuse of Nodal Exchange is strictly prohibited. It shall 

be deemed an act detrimental to the Exchange to permit unauthorized use 

of the Exchange, to assist any Person in obtaining unauthorized access to 

Nodal Exchange, to trade on Nodal Exchange without an applicable 

agreement and an established account with a Clearing Member, to alter the 
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equipment associated with Nodal Exchange (except with the Exchange’s 

consent), to interfere with the operation of Nodal Exchange, to intercept or 

interfere with information provided thereby, or in any way to use Nodal 

Exchange in a manner contrary to the Rules. 

6.2.14 Supervision. Every Person shall diligently supervise the Exchange related 

activities of such Person’s employees and agents (including Authorized 

Users, as applicable), and be responsible for the acts and omissions of such 

employees and agents. For purposes of this Rule, the term “agent” includes 

any Exchange related activities associated with automated trading systems 

that generate, submit and/or cancel messages or Orders without human 

intervention. Participants and Authorized Brokers shall establish, maintain 

and administer reasonable, and enforce supervisory systems, policies and 

procedures, based on the nature and size of its Exchange related activities, 

which are reasonably designed to monitor theachieve compliance of 

Authorized Users and supervised persons with thewith Exchange Rules 

and applicable provisions of the CEA or CFTC Regulations and such.

Participants and Authorized Brokers may be held accountable for the 

actions of their Authorized Users and Customers, as applicable, or 

supervised persons.Persons. 

If an FCM Participant has actual or constructive notice of a violation or 

potential violation of the Rules or the CEA in connection with the use of 

the System by its Customer and the FCM Participant fails to take 

appropriate action, the FCM Participant may be found to have violated 

Rule 6.2.13 and be subject to disciplinary action under the Rules. 

6.2.15 Disclosing Order Information. No ParticipantPerson shall disclose an 

Order to buy or sell, except to a designated Exchange Official or the CFTC 

or as necessary to efficiently execute the Order nor shall any 

ParticipantPerson solicit or induce another ParticipantPerson to disclose 

Order information. No Person shall 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. 

6.3 Pre-Arranged Trades, “Money Passing” Prohibited 

6.3.1 Pre-arranged trading, in which two or more Participants or Authorized 

UsersPersons agree to submit corresponding Orders to the Trading 

Platform, is not permitted except as follows: 

(a) Participants and Authorized UsersPersons may engage in preexecution communications with regard to transactions executed or 

to be executed on the Trading Platform if one party (the first party) 

wishes to be assured that a contra party (the second party) will take 
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the opposite side of the first party’s Order, subject to the following 

restrictions: 

i. A party may not engage in pre-execution communications 

with other market participants on behalf of another party 

unless the party for whose benefit the trade is being made 

has previously consented to permit such communications. 

ii. Parties to, and Persons involved in, pre-execution 

communications shall not disclose to a non-party the details 

of such communications or enter an Order to take advantage 

of information conveyed during such communications 

except in accordance with this Rule. 

iii. The first party’s Order must be entered into the Trading 

Platform first, and the second party’s Order may not be 

entered into the Trading Platform until a period of five 

seconds has elapsed from the time entry of the first Order. 

(b) The foregoing restriction shall not apply to Block Trades or EFRPs. 

6.3.2 No Participant or Authorized UserNo Person may prearrange the execution 

of Transactions for the purpose of passing or transferring equity between 

accounts, commonly known as a “money pass.” 

6.4 Disciplinary Procedures; Termination of Connection 

6.4.1 All access denials, suspensions, expulsions and other restrictions imposed 

upon a Participant, Authorized Broker or any of their Authorized 

UsersPerson by the Exchange pursuant to a Disciplinary Action shall 

restrict with equal force and effect, access to, and use of, the Exchange. 

6.4.2 The Exchange, at its sole discretion, shall have the right to summarily 

terminate the connection of any Person, including a Participant, Authorized 

Broker or the access of any ITM or, User ID, or other Login Credentials to 

the Exchange. Additionally, the Exchange, at its sole discretion, shall have 

the right to direct a Participant or Authorized Broker to immediately 

terminate access to the Exchange any of such Participant’s for their 

Customers and/or Authorized Brokers’s Authorized Users, respectivelyas 

applicable. 

6.5 Position Limits 

The position limits for Nodal Contracts shall not apply to (i) bona fide hedging 

positions as defined in CFTC Regulation 150.1, which are approved in 

accordance with this Rule; (ii) risk management positions; (iii) conditional limits 
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granted by the Exchange in the Nodal Henry Hub Monthly Natural Gas Contract; 

and (iv) spread positions. 

6.5.1 Bona Fide Hedges. The Exchange may adopt position limits for Nodal 

Contracts, and grant exemptions from position limits for bona fide hedging 

transactions and positions, in accordance with CFTC Regulations. Bona 

fide hedging transactions typically represent a substitute for transactions to 

be made, or positions to be taken, at a later time in a physical marketing 

channel that are economically appropriate to the reduction of risks in the 

conduct and management of a commercial enterprise and arise from a 

change in the value of the hedger’s current or anticipated assets or 

liabilities. 

6.5.2 Risk Management Exemptions. The Exchange may adopt limits for 

Nodal Contracts, and grant exemptions from position limits for risk 

management positions for Nodal Contracts not subject to federal limits, in 

accordance with CFTC Regulations. Risk management transactions 

typically represent futures or options positions which are held by or on 

behalf of a Participant, Customer, or an Affiliate of a Participant or 

Customer which typically buys, sells or holds positions in the underlying 

cash market, a related cash market, or a related over-the-counter market 

and for which the underlying Commodity market has a high degree of 

demonstrated liquidity relative to the size of the positions and where there 

exist opportunities for arbitrage which provide a close linkage between the 

futures or options market and the underlying Commodity market in 

question. Exemptions related to indexed positions in the over-the-counter 

market may include corresponding commodity index-based futures and 

options and/or individual commodity futures and options used as 

components in replicating an index. 

6.5.3 Exemption Requests. A Participant or Customer seeking a position limit 

exemption for bona fide hedging must apply to the Compliance 

Department, directly or through its FCM Participant, as applicable,

demonstrating that the purpose of the positions or transactions is to offset 

price risks incidental to commercial cash or spot operations and such 

positions are established and liquidated in an orderly manner in accordance 

with sound commercial practices. A Participant or Customer seeking a 

position limit exemption for risk management must apply to the 

Compliance Department, directly or through its FCM Participant, as 

applicable, providing an explanation of the positions in the underlying cash 

market, related cash market, or related over-the-counter market where 

there exists a close linkage between the Nodal Contract and the underlying 

Commodity market in question, or, where applicable, an explanation of the 

corresponding index being replicated. 

6.5.4 In order to obtain an exemption from position limits for bona fide hedging 

or risk management, a Participant or Customer, directly or through its FCM 
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Participant, as applicable, must submit an application with the following 

information: 

(a) Participant’sPerson’s name and contact information; 

(b) Name of the Clearing Member and FCM Participant, if applicable, 

maintaining Participant’sPerson’s account; 

(c) A description of the exemption sought, identifying the Nodal 

Contract(s) for the intended transaction or position seeking 

exemption; 

(d) A complete and accurate explanation of the Participant’s 

underlyingPerson’s exposure related to the exemption request, 

including a description of the applicant’s activity in the cash markets 

and swaps markets for the commodity underlying the position for 

which the application is submitted, including but not limited to, 

information regarding the offsetting cash positions; 

(e) If the exemption request is for an enumerated bona fide hedge, 

identify the specific enumerated hedge described in CFTC 

Regulations, Part 150, Appendix A; 

(f) Agree to promptly provide, upon request by the Compliance 

Department, information or documentation regarding the 

Participant’sPerson’s financial condition; 

(g) Agree to comply with all terms, conditions or limitations imposed 

by the Compliance Department with respect to the exemption; 

(h) Agree that the Compliance Department may modify or revoke the 

exemption at any time; 

(i) Agree to promptly submit a supplemental statement to the 

Compliance Department whenever there is a material change to the 

information provided in the most recent application; and 

(j) Participant’sPerson’s authorized representative must certify that the 

intended transaction or position is economically appropriate to 

reduce the Participant’sPerson’s commercial risks and complies 

with all Exchange and CFTC requirements for bona fide hedging. 

6.5.5 Within five (5) Business Days of the submission of the required 

information and certifications, the Exchange will endeavor to respond to 

the request indicating whether the exemption has been granted and the 

limitations placed thereon. An exemption will remain in full force and 

effect until (1) the exemption’s expiration date provided by the Exchange; 

(2) a request for withdrawal is received by the Exchange; or (3) the 
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Exchange revokes, modifies or places further limitations thereon. A 

ParticipantPerson granted a position limit exemption for Nodal Contracts 

subject to federal position limits, must re-apply for the exemption at least 

annually. 

6.5.6 Written requests for exemptions to the position limits for bona fide hedging 

and risk management positions should be received by the Exchange no 

later than five (5) Business Days prior to the first (1st) day such position 

limits are in effect. Failure to file a position limit exemption request on a 

timely basis may subject the ParticipantPerson seeking an exemption to 

disciplinary action pursuant to the Rules. 

6.5.7 Conditional Limit in the Nodal Henry Hub Monthly Natural Gas 

Contract. The Exchange may grant a conditional limit in the Henry Hub 

Monthly Natural Gas Contract up to five (5) times the spot month position 

limit for the period that spot month position limits are in effect 

(“Conditional Limit”). To be eligible for a Conditional Limit under this 

Rule, a Participant or Customer must submit, directly or through its FCM 

Participant, as applicable, an application, in the form specified by the 

Exchange, in which the Participant agrees: 

(a) Not to establish, hold, or control a position in the corresponding 

NYMEX Henry Hub (NG) contract during the last three days of 

trading of a contract month; 

(b) Upon request of the Exchange, to provide information on all 

positions related to Henry Hub Contracts, and such other 

information as the Exchange may request; and 

(c) To report to the Exchange any position established, whether by 

trading or otherwise, in the spot month NYMEX Henry Hub (NG) 

contract during the last three days of trading of a contract month. 

An application for a Conditional Limit shall be effective upon receipt by 

the Exchange. A Conditional Limit will be effective each spot month until 

the expiration date specified in the application for such limit, which shall 

be no later than one (1) year following the submission date. Nothing in 

this Rule shall in any way limit the Exchange from altering or revoking a 

Conditional Limit. 

6.5.8 The CFTC may also from time to time establish position limits for Nodal 

Contracts traded pursuant to these Rules. For any such Nodal Contract 

subject to a position limit set by the CFTC, the Exchange shall not set its 

position limit at a level higher than the CFTC’s limit. 

6.5.9 A ParticipantPerson who exceeds a position limit as a result of maintaining 

positions at more than one Clearing Member or FCM Participant, as 

applicable, shall be deemed to have waived confidentiality regarding its 
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positions and the identity of the Clearing Members at which those positions 

are maintained. 

6.5.10 A Participant or Customer intending to exceed position limits, including 

limits established pursuant to a previously approved exemption, must file 

the required application, directly or through its FCM Participant, as 

applicable, and receive approval from the Compliance Department prior to 

exceeding such limits. 

6.5.11 In the event the positions in excess of the limits are not deemed to be 

exemption-eligible, the ParticipantPerson will be in violation of position 

limits for the period of time in which the excess positions remained open. 

6.5.12 The Compliance Department shall, on the basis of the application and any 

requested supplemental information, determine whether an exemption 

from position limits shall be granted. The Compliance Department may 

approve, deny, condition or limit any exemption request based on factors 

deemed by the Compliance Department to be relevant, including, but not 

limited to, the applicant's business needs and financial status, as well as 

whether the positions can be established and liquidated in an orderly 

manner. All position limit exemptions approved by the Exchange must be 

renewed on an annual basis. 

6.5.13 Spread Positions. A spread transaction involves the simultaneous 

purchase and sale of identical or equivalent commodity futures 

contractsNodal Contracts across two or more markets, such as location or 

delivery month, in order to hold a position on the discrepancy in their price 

relationship. For contracts subject to CFTC established position limits, 

spread positions between single months of a futures contractNodal 

Contract outside of the spot month, in the same year, may exceed the 

position limits; provided however, that such spread positions, when 

combined with any other net positions in the single month, do not exceed 

the all-months limit established by the CFTC. In order to exceed position 

limits without violating the Rules, a Participant or Customer must apply 

for a spread exemption and comply with the following procedures for 

identifying spread positions subject to this Rule: 

(a) Participant or Customer must apply for, and the Exchange must 

grant, a spread exemption from position limits. The Exchange may 

grant exemptions for strategies consistent with the definition of 

spread transaction in CFTC Regulation 150.1 and/or, for those 

commodities subject to federal position limits under CFTC 

Regulation 150.2, for spread transactions and strategies consistent 

with CFTC Regulation 150.3(a)(2) and Appendix G to Part 150. 

(b) Submit the spread transaction under a single order ID number. If a 

spread exemption has been approved by the Exchange, positions 
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resulting from spread orders submitted under a single order ID 

number or block trades submitted under a single trade group ID 

number shall be deemed spread positions for position limit 

purposes; 

(c) In the event the qualifying spread position cannot be submitted 

under a single order ID number, such as when a spread position is 

executed amongst three or more Participants, and/or Customers (as 

applicable), the Participant and/or Customer (as applicable) must 

submit a written notice to the Exchange in the form provided by the 

Exchange that shall include (i) a description of the spread position; 

(ii) a statement that the position is a spread position; and (iii) a 

statement that the Participant and/or Customer (as applicable) is 

complying with all other Rules and requirements of the Exchange; 

(d) If neither (b) nor (c) apply, the Participant and/or Customer (as 

applicable) must submit a written request to the Exchange in the 

form provided by the Exchange. The request must be received by 

the Exchange no later than five (5) Business Days before the 

position limits are in effect for the proposed spread position and 

shall include (i) a description of the size and nature of the proposed 

spread position; (ii) an explanation that neither (b) or (c) above 

applies to the proposed spread position; (iii) a statement that the 

intended position will be a spread position; and (iv) a statement that 

the Participant and/or Customer (as applicable) is complying with 

all other Exchange Rules and requirements; 

(e) Participant and/or Customer (as applicable) may not enter into any 

subsequent transaction to alter the spread position causing the 

Participant and/or Customer (as applicable) to exceed the position 

limits. In the event this occurs, the Participant and/or Customer (as 

applicable) may be in violation of position limits for the period of 

time in which the excess positions remained open; and 

(f) Participant and/or Customer (as applicable) agrees to immediately 

submit a supplemental statement explaining any change in 

circumstances affecting the spread position. 

 The Compliance Department may deny or limit any Order intended as a 

spread position based on factors deemed by the Compliance Department 

to be relevant, such as whether the positions can be liquidated in an orderly 

manner. 

6.5.14 The position limit levels for those Nodal Contracts with position limits are 

set forth in Appendix C to these Rules. 
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6.5.15 In the event any Participant and/or Customer (as applicable) exceeds its 

position limit due to (i) demonstrated sudden unforeseen increases in its 

bona fide hedging needs, and/or (ii) for those commodities not subject to 

position limits under CFTC Regulation 150.2, bona fide hedging, risk 

management or spread position needs, such Participant and/or Customer 

(as applicable) shall not be considered in violation of the Rules provided 

that such Participant and/or Customer (as applicable) requests an 

exemption to carry such increased position within one (1) Business Day 

but no later than five (5) Business Days after the established position has 

exceeded the position limits, and provided further that such exemption is 

granted by the Exchange. In order to obtain a retroactive exemption, a 

Participant and/or Customer (as applicable) must provide the Exchange an 

explanation of the circumstances warranting the sudden or unforeseen 

increases in its bona fide hedging needs. If the Exchange denies the 

request, the Participant and/or Customer (as applicable) must bring its 

position within the Exchange’s speculative position limits within a 

commercially reasonable time. 

6.6 Position Accountability 

6.6.1 A Participant and/or Customer (as applicable) who holds or controls 

aggregate positions in a Nodal Contract in excess of the position 

accountability levels relating to that Nodal Contract set out in Appendix C 

shall be subject to the following provisions: 

(a) Such Participant and/or Customer (as applicable) shall provide, in a 

timely manner upon request by the Compliance Department, 

information regarding the nature of the position, trading strategy, 

and hedging information if applicable. 

(b) Such Participant and/or Customer (as applicable) shall, if so ordered 

by the Compliance Department, acting in its discretion, liquidate or 

not increase further the positions that exceed such levels. 

(c) Such positions must be initiated and liquidated in an orderly manner. 

(d) This Rule shall not limit the jurisdiction of the Exchange to take 

action that it determines necessary or appropriate in respect of any 

positions on the Exchange. 

6.7 Reports of Large Positions 

Upon request, Participants must provide the Compliance Department with 

information, in a form and manner acceptable to the Compliance Department, 

identifying the owner, any controlling parties and any additional required 

information for each reportable account. Each FCM Participant must provide the 

Compliance Department with information, in a form and manner acceptable to the 
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Compliance Department, identifying the owner, any controlling parties, and any 

additional required information for each reportable account.

6.8 Aggregation of Positions 

For purposes of Rule 6.5, Rule 6.6 and Rule 6.7, positions in Nodal Contracts shall 

be aggregated in accordance with CFTC Regulations. 

6.8.1 For purposes of Rule 6.5, Rule 6.6, and Rule 6.7, all positions in accounts 

for which any Person, by power of attorney or otherwise, directly or 

indirectly controls trading or holds a ten (10) percent or greater ownership 

or equity interest shall be aggregated with the positions held and trading 

done by such Person in accordance with CFTC Regulation 150.4(a)(1). 

For the purpose of determining the positions in accounts for which any 

Person controls trading or holds a ten (10) percent or greater ownership or 

equity interest, positions or ownership or equity interests held by, and 

trading done or controlled by, two or more Persons acting pursuant to an 

expressed or implied agreement or understanding shall be treated the same 

as if the positions were held by, or the trading were done or controlled by, 

a single Person. 

6.8.2 For the purposes of Rule 6.5, Rule 6.6, and Rule 6.7, any Person that, by 

power of attorney or otherwise, holds or controls the trading of positions 

in more than one (1) account or pool with substantially identical trading 

strategies, shall have all such positions aggregated in accordance with the 

provisions of CFTC Regulation 150.4(a)(2). 

6.8.3 Exemptions from Aggregation 

Exemptions from aggregation in Rule 6.8.1 must comply with the 

provisions of CFTC Regulation 150.4(b). Any Person claiming an 

exemption from aggregation limits under the provisions of CFTC 

Regulation 150.4(b)(1)(ii), (b)(2), (b)(3), (b)(4), or (b)(7) must provide a 

written notice to the Compliance Department, 

compliance@nodalexchange.com, which sets forth (1) a description of the 

relevant circumstances that warrant disaggregation and (2) a statement by 

a senior officer or executive of the entity certifying that the conditions set 

forth in the applicable CFTC aggregation exemption provision have been 

met. Upon request by the Compliance Department, any Person claiming 

such an exemption from aggregation must provide any requested 

information that demonstrates the Person meets the applicable 

requirements for the exemption. The Compliance Department, in its sole 

discretion, may amend, suspend, terminate, or otherwise modify a Person’s 

exemption from aggregation for failure to comply with the provisions of 

Rule 6.8. In the event of a material change to the information provided in 

any notice filed under Rule 6.8, an updated or amended notice must be 
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promptly filed with the Compliance Department detailing the material 

change. 

6.9 Reporting Levels, Position Accountability Levels and Position Limits 

The reporting levels, position accountability levels, and position limits for Nodal 

Contracts are found in Appendix C. 

6.10 Information Disclosure and Documentation 

6.10.1 Markets depend on trust in the accuracy of market information provided 

by ParticipantsPersons and in the transparency of market behavior of all 

market participants. 

6.10.2 ParticipantA Person will act in accordance with these practices for 

information disclosure and documentation with regard to its Exchange 

activity: 

(a) Provide information relating to Nodal Contracts to regulators in 

compliance with all applicable rules and requirements and continue 

to cooperate with regulators as reasonably necessary to assist in their 

understanding of the markets. 

(b) Ensure that any information disclosed to Nodal Exchange is 

accurate and consistent. No existing or prospective 

ParticipantPerson shall make any false statements, omissions of 

material fact, or misrepresentations in any application, report, or 

other communication to the Exchange. 

6.11 Compliance Programs 

6.11.1 Each Participant will have a compliance program commensurate with the 

size and scope of its trading activities on the Exchange and designed to 

ensure appropriate, timely and ongoing review of trading practices and 

compliance with this Code. 

6.11.2 ParticipantParticipants will act in accordance with these practices for 

compliance and monitoring with regard to its Exchange activity: 

(a) Provide for proper training of personnel on the provisions of this 

Code. 

(b) Maintain internal policies and procedures to promote compliance 

with this Code. 

(c) Promptly disclose to the Exchange the details of any violations of 

this Code involving Participant’s activities (or the activities of any 
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Customer) on the Exchange or provision of market information to 

the Exchange or any of its Affiliates. 

(d) Provide an environment that encourages employees within the 

Participant’s organization to engage in safe and confidential 

discussions and to disclose to senior management any trading 

practices that might violate this Code. 

(e) Require any consultant, contractor and/or subcontractor to disclose 

all financial affiliations and conflict of interests with Participants, 

the Exchange and its affiliates. Ensure that consultants, contractors 

or subcontractors do not cause any disclosure of information in 

violation of the Code and that confidentiality agreements are in 

effect where appropriate. 

(f) Establish clear lines of accountability for the Participant’s and/or 

Customer’s (if applicable) trading practices, including provisions 

relating to the responsibilities of corporate officers, with appropriate 

oversight by the Participant’s board of directors or other senior 

corporate management committee. 
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SECTION VII DISCIPLINE AND ENFORCEMENT 

7.1 Disciplinary and Enforcement Procedures – General 

All Participants, Authorized Brokers, Clearing Members, Customers, and 

Authorized Users, and applicable Persons are subject to the Exchange’s 

jurisdiction. Any Participant, Authorized Broker, Clearing Member, Authorized 

User or any Person using the User IDLogin Credentials of any Participant or 

Authorized Userother Person that is alleged to have violated, to have aided and 

abetted a violation, to be violating, or to be about to violate, any Rule or Applicable 

Law for which the Exchange maintains disciplinary jurisdiction is subject to this 

Section VII. Except as otherwise provided in the Rules, no Exchange Official will 

interfere with or attempt to influence the process or resolution of any inquiry, 

investigation, disciplinary proceeding, appeal from a disciplinary proceeding, 

summary imposition of fines, summary suspension or other summary action 

(collectively, “Disciplinary Action”). Any Person subject to a Disciplinary Action 

may be represented by counsel or any other representative of its choosing (other 

than an Exchange Official or any person substantially related to the underlying 

investigation, such as a material witness or Respondent), at its own expense, in all 

stages of such Disciplinary Action.

7.2 Process Considerations 

7.2.1 Compliance Department 

The Compliance Department is appointed and authorized by the Chief 

Executive Officer to provide market surveillance and investigation of 

trading activities on the Exchange to ensure compliance with the Rules and 

Applicable Law. Any member of the Compliance Department must recuse 

himself or herself and notify the Chief Regulatory Officer of the recusal if 

such member has a relationship of a type listed in Rule 2.6.1(a) with a 

Respondent in any Disciplinary Action. Where the Chief Regulatory 

Officer member has a relationship of a type listed in Rule 2.6.1(a) with a 

Respondent in any Disciplinary Action, the Chief Regulatory Officer shall 

recuse himself or herself from such Disciplinary Action, and the Board shall 

appoint an individual without such conflict to serve as Chief Regulatory 

Officer for the specific Disciplinary Action giving rise to the conflict. The 

Compliance Department consists of two functions: 

(a) Enforcement shall be conducted by the Surveillance Team and the 

Compliance Manager. The Surveillance Team will monitor the 

market to identify exceptions that may indicate a possible basis for 

finding that a violation of the Rules has occurred or will occur and 

provide information of such exceptions to the Compliance Manager. 

The Surveillance Team and the Compliance Manager shall consist 

of Exchange employees whose interests do not conflict with their 

enforcement duties. The Surveillance Team and the Compliance 
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Manager may not operate under the direction or control of any 

Person(s) with trading privileges. The Compliance Manager is 

authorized to: 

i. initiate and conduct investigations; 

ii. prepare Investigation Reports and make recommendations 

concerning initiating disciplinary proceedings; 

iii. prosecute alleged violations within the Exchange’s 

disciplinary jurisdiction; and 

iv. represent the Exchange on appeal from any disciplinary 

proceeding, summary imposition of fines, summary 

suspension or other summary action. 

(b) The Chief Regulatory Officer, assisted by other Compliance 

Department personnel and Exchange employees, shall be 

responsible for discharging the duties allocated to it in Rule 7.3. 

7.2.2 Third-Party Enforcement 

The Exchange may delegate any of its rights and responsibilities herein to a 

Regulatory Services Provider.

7.2.3 Expense Liability 

(a) At the discretion of the Exchange, any Respondent found in 

violation of the Rules may be required to pay to the Exchange any 

and all expenses incurred as a result of the investigation of the 

violation and prosecution of such Respondent. This assessment is 

in addition to any monetary fines imposed for the Rule violation(s). 

(b) If a hearing has been held in accordance with Rule 7.3.9, the Hearing 

Panel may order a Respondent to pay some or all of the costs 

associated with the disciplinary proceedings, including costs that the 

Hearing Panel believes were unnecessarily caused by the 

Respondent, regardless of the outcome of any disciplinary 

proceeding. Costs may include costs associated with the inquiry or 

investigation, the prosecution by the Compliance Department, legal 

and professional assistance, the hearing, and administrative and 

other expenses incurred by the Hearing Panel. 

7.3 Disciplinary Matters 

7.3.1 Investigations 
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(a) The Compliance Manager will investigate any enforcement matter 

within the Exchange’s jurisdiction that is brought to the attention of 

the Compliance Manager. The Compliance Manager will 

commence an investigation upon the receipt of a request from 

Commission staff or upon the discovery or receipt of information by 

the Exchange that, in the judgment of the Compliance Manager, 

indicates a possible basis for a finding that a violation has occurred 

or will occur. The Compliance Manager shall determine the nature 

and scope of the investigations in his or her sole discretion and will 

operate independently of the commercial interests of the Exchange. 

Absent mitigating circumstances, the Compliance Manager must 

complete an investigation within twelve (12) months after the date 

the investigation is opened. Permissible mitigating circumstances 

include the complexity of the investigation, the number of firms or 

individuals involved as potential respondents, the number of 

potential violations to be investigated and the volume of 

documentation and data that must be analyzed. 

(b) Upon request by the Compliance Manager, each Person subject to 

the Exchange’s jurisdiction: 

i. is obligated to appear and testify and respond in writing to 

inquiries within the time period required by the Compliance 

Manager in connection with: 1) any Rule; 2) any inquiry or 

investigation; 3) or any preparation by and presentation 

during a Disciplinary Action; 

ii. is obligated to produce books, records, papers, documents or 

other tangible evidence in its, his or her possession, custody 

or control within the time period required by the Compliance 

Manager in connection with: 1) any Rule; 2) any inquiry or 

investigation; 3) or any preparation by and presentation 

during a Disciplinary Action; 

iii. may not impede or delay any Disciplinary Action. 

7.3.2 Reports of Investigations 

The Compliance Manager will submit a written report of each investigation 

to the Chief Regulatory Officer and maintain a log of all investigations and 

their disposition. The written report of the investigation (the “Investigation 

Report”) will include the reasons for initiating the investigation, all 

relevant facts and evidence gathered, analysis and conclusions, the 

Respondent’s disciplinary history at the Exchange, and will consist of one 

of the following recommendations: 

(a) closing the investigation without further action; 
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(b) negotiating a settlement; 

(c) entering into a summary action; 

(d) preparing and serving a notice of charges to initiate a disciplinary 

proceeding; or 

(e) 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, however, the investigative report 

must include a copy of any warning letter and no more than one 

warning letter for the same potential violation may be issued to the 

same ParticipantPerson during a rolling 12-month period. 

7.3.3 Review of Reports of Investigations 

After the completion of the Investigation Report and the receipt of any 

submission made by the Respondent pursuant to Rule 7.3.4, the Chief 

Regulatory Officer will (i) review the Investigation Report or (ii) establish 

a Review Panel pursuant to Rule 7.3.8 and forward the Investigation Report 

to such Panel. The Chief Regulatory Officer or Review Panel, as 

appropriate, will review an Investigation Report promptly after receipt and 

determine for each Respondent whether to authorize: 

(a) the informal disposition of the investigation (by issuing a warning 

letter or otherwise) because disciplinary proceedings are 

unwarranted; 

(b) the closing of the investigation without any action because no 

reasonable basis exists to believe that a violation within the 

Exchange’s jurisdiction has occurred or is about to occur; or 

(c) the commencement of disciplinary proceedings because a 

reasonable basis exists to believe that a violation within the 

Exchange’s jurisdiction has occurred or is about to occur. 

7.3.4 Opportunity to Respond 

The Compliance Department may, in its discretion, notify the 

Respondent(s) that formal disciplinary charges are recommended and allow 

the Respondent to submit, within a specified time period, an offer of 

settlement or a written statement explaining why disciplinary proceedings 

should not be instituted or why one or more of the charges should not be 

brought. 

7.3.5 Service of Notice of Charges 
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(a) Once the Chief Regulatory Officer or Review Panel, as appropriate, 

authorizes disciplinary proceedings, the Compliance Department 

will prepare and serve a notice of charges that will provide as 

follows: 

i. state the acts, practices or conduct that the Respondent is 

alleged to have engaged in; 

ii. state the Rule or provision of Applicable Law alleged to have 

been violated or about to be violated; 

iii. state the proposed sanctions; 

iv. advise the Respondent of its right to a hearing; 

v. advise the Respondent that he has the right to be represented 

by legal counsel or any other representative of its choosing 

in all succeeding stages of the disciplinary process, other 

than an Exchange Official or any person substantially related 

to the underlying investigation, such as a material witness or 

Respondent; 

vi. 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; 

vii. advise the Respondent that any failure to request a hearing 

within the period stated, except for good cause, will be 

deemed to constitute a waiver of the right to a hearing; and 

viii. Aadvise the Respondent that any allegation in the notice of 

charges that is not expressly denied will be deemed to be 

admitted. 

(b) The service of notice upon the Respondent shall be deemed 

complete either personally or by leaving the notice at his or her place 

of business; by deposit in the United States mail, postage prepaid, 

via registered or certified mail addressed to the Respondent at the 

Respondent’s last known place of business or residence. Service 

shall also be deemed complete via electronic mail to the 

Respondent’s last known electronic mail address. 

7.3.6 Answer to Service of Notice of Charges 

(a) If the Respondent determines to answer a notice of charges, the 

Respondent must file a written answer within twenty (20) days after 

being served with such notice, or within such other time period as 
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stated in such notice of charges. The Respondent must answer the 

notice of charges in writing as follows: 

i. for each allegation set forth in the notice of charges, 1) admit 

such allegation, 2) deny such allegation, or 3) affirmatively 

state that the Respondent does not have and is unable to 

obtain sufficient information to admit or deny such 

allegation, which shall have the effect of a denial of such 

allegation; 

ii. specify any specific facts that contradict the notice of 

charges; 

iii. specify any affirmative defenses to the notice of charges; 

iv. sign and serve the answer on the Chief Regulatory Officer; 

and 

v. if applicable, request a hearing before a Hearing Panel. 

(b) Failure by the Respondent to timely serve an answer to the notice of 

charges will be deemed to be an admission to the allegations in such 

notice. Any allegation in a notice of charges that the Respondent 

fails to expressly deny will be deemed admitted. A general denial 

by the Respondent, without more, will not satisfy the requirements 

herein. 

7.3.7 Settlement Offers 

(a) At any time after a notice of charges has been issued, a Respondent 

may at any time submit to the Compliance Department a written 

offer of settlement related to anticipated or instituted disciplinary 

proceedings. If the Respondent submits the settlement offer any 

time before the Hearing Panel is formed pursuant to Rule 7.3.8, the 

Chief Regulatory Officer will, in his or her discretion, (i) determine 

whether to accept or reject the settlement offer or (ii) if a Review 

Panel has been established in accordance with Rule 7.3.8, determine 

whether to accept or reject the offer and forward the basis for its 

recommendation to the Review Panel for final determination. 

(b) If the Respondent submits the settlement offer any time after the 

Hearing Panel is formed pursuant to Rule 7.3.8, the Chief 

Regulatory Officer will forward his or her recommendation to the 

Hearing Panel for final determination. 

(c) The Chief Regulatory Officer or Disciplinary Panel, as applicable, 

may permit the Respondent to settle disciplinary proceedings 

without admitting or denying the Rule violations if the Respondent 
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consents to the entry of findings and sanctions imposed. When 

accepting the settlement offer, the Chief Regulatory Officer or 

Hearing Panel may not alter the terms of the offer unless the 

Respondent agrees. The offer of settlement must detail the Rule 

violations, including the basis for the conclusions of the Chief 

Regulatory Officer or Disciplinary Panel, as applicable, and any 

sanctions imposed. If a settlement offer is accepted without the 

agreement of the Chief Regulatory Officer, the decision should 

adequately support the Disciplinary Panel’s acceptance of the 

settlement. If applicable, the decision must also include a statement 

that the Respondent has accepted the sanctions imposed without 

either admitting or denying the Rule violations. 

(d) The acceptance of a settlement offer by either the Chief Regulatory 

Officer or Hearing Panel, as applicable, constitutes a waiver of the 

Respondent’s right to notice, opportunity for a hearing and review, 

and appeal under the Rules. If the settlement offer is not accepted, 

fails to become final, or is withdrawn by the Respondent, the matter 

will proceed without prejudice as if the offer had not been made and 

the offer and all documents related to it will not become part of the 

record. 

7.3.8 Disciplinary Panels 

(a) A Review Panel may be established, in the sole discretion of the 

Chief Regulatory Officer, pursuant to Rule 7.3.3 to review a 

completed Investigation Report and determine whether a reasonable 

basis exists for finding a violation of the Rules and authorizing the 

issuance of a notice of charges. 

(b) If a Respondent requests a formal hearing on charges denied in the 

answer to the notice of charges per Rule 7.3.6, a Hearing Panel shall 

be convened, and a hearing will commence within sixty (60) days. 

(c) Each Disciplinary Panel, appointed by the Board at the 

recommendation of the Chief Regulatory Officer, shall be composed 

of not less than three individuals from among individuals with 

knowledge and experience in the electric powerCommodity or 

financial markets, who are not members of the Compliance 

Department or involved in any other stage of the same proceeding 

or the conduct giving rise to the alleged Rule violations. No group 

or class of market participants may dominate or exercise 

disproportionate influence on the Disciplinary Panel. The chair of 

the Disciplinary Panel will be an individual qualified to be a Public 

Director. 
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2023v34 95

(d) Within ten (10) days of being notified of the appointment of the 

Disciplinary Panel, either party may seek to disqualify any 

individual named to the Disciplinary Panel for any grounds provided 

in paragraph (c) above or Rule 2.6 by serving notice to the Chief 

Regulatory Officer. Legal counsel, other than the Chief Regulatory 

Officer, will decide the merits of any request for disqualification 

within his or her sole discretion. Such decision will be final and not 

subject to appeal. Legal counsel, other than the Chief Regulatory 

Officer, may also remove any member of the Disciplinary Panel for 

cause. Unless otherwise disqualified or removed for cause, the 

individuals on the Disciplinary Panel will serve until the related 

proceedings are completed. 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. 

7.3.9 Hearings 

(a) Prior to the commencement of the hearing, the Respondent will be 

given the opportunity to review all books, records, documents, 

transcripts of testimony and other tangible evidence in the 

possession or under the control of the Exchange to be used by the 

Compliance Department to support the allegations and proposed 

sanctions in the notice of charges, except for any information that 

(i) is protected by attorney-client privilege or the work-product 

doctrine, (ii) was prepared by the Compliance Department or an 

employee of the Exchange but will not be offered in evidence in the 

disciplinary proceedings, (iii) may disclose a technique or guideline 

used in examinations or Disciplinary Actions or (iv) discloses the 

identity of a confidential source. The Compliance Department may 

redact, edit or code information that could adversely affect the 

competitive position of the person providing the information or if 

such information might compromise other investigations being 

conducted by the Compliance Department. However, the 

Compliance Department may not redact, edit or code information 

that would impair the Respondent’s ability to defend against 

allegations or proposed sanctions in the notice of charges. 

(b) The following Rules shall apply in each case presented before the 

Hearing Panel: 

i. The Compliance Department shall prosecute the case. 

ii. Formal rules of evidence do not apply. 

iii. The Respondent has the power to cross-examine witnesses 

and present documentary evidence. 
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iv. The burden of proof is on the Compliance Department. 

v. A majority vote of the Hearing Panel is needed to find a 

violation of the Rules. 

(c) No Person shall serve on the Hearing 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 be 

obtained while serving as a member of the Hearing Panel, except for 

disclosures when reporting to the Board, the Compliance 

Department, upon request by the Commission or other 

governmental agency, or when compelled to testify in a judicial or 

administrative proceeding. The hearing will be conducted privately 

and confidentially. Notwithstanding the confidentiality of the 

hearings, the Hearing Panel may appoint an expert to attend any 

hearing and assist in deliberations if such expert agrees to be subject 

to an appropriate confidentiality agreement. 

(d) The chair of the Hearing Panel shall conduct the hearing as he or she 

may deem appropriate. The chair of the Hearing Panel will 

determine all procedural and evidentiary matters, including the 

admissibility and relevance of any evidence proffered. Legal 

counsel, other than the Chief Regulatory Officer, will provide 

guidance to the chair of the Hearing Panel on the conduct of the 

hearing. At the hearing, the Hearing Panel or the Compliance 

Department and each Respondent may: 

i. appear personally; 

ii. present evidence and facts determined relevant and 

admissible by the chair of the Hearing Panel; 

iii. call and examine witnesses; and 

iv. cross-examine witnesses called by other parties. 

(e) The Exchange will require personsPersons within its jurisdiction 

that are called as witnesses to appear at the hearing and produce 

evidence, and will make reasonable efforts to secure the presence of 

all other personsPersons called as witnesses whose testimony would 

be relevant. 

(f) 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 

Hearing Panel may limit evidence concerning any allegations not 

expressly denied in determining the sanctions to impose. If a 
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2023v34 97

Respondent fails to file an answer but appears at the hearing, the 

Respondent may not participate in the hearing (by calling or crossexamining witnesses, testifying in defense, presenting evidence 

concerning the notice of charges, or otherwise) unless the Hearing 

Panel determines that the Respondent had a compelling reason for 

failing to timely file an answer. If the Hearing Panel determines that 

the Respondent had a compelling reason for failing to timely file an 

answer, the Hearing Panel will adjourn the hearing and direct the 

Respondent to promptly file a written answer. 

(g) Reasonable notice, confirmed in writing, specifying the date, time, 

and place of the hearing will be given to personsPersons entitled or 

required to appear before the Hearing Panel. The Hearing Panel 

may impose sanctions on any personPerson that impedes or delays 

the progress of the hearing. Interlocutory appeals of rulings by the 

Hearing Panel or the chair of the Hearing Panel are not permitted. 

(h) Promptly following a hearing, the Hearing Panel will render a 

written decision based on the weight of the evidence contained in 

the record of the disciplinary proceedings. Pursuant to the written 

decision, the Hearing Panel may take the following actions or 

impose the following sanctions against the Respondent: (i) a 

warning letter, which shall indicate each specific Rule that the 

Respondent was found to have violated; (ii) a cease and desist order; 

and/or (iii) any sanctions or remedies prescribed in Rule 7.3.10. The 

Exchange will serve a copy of the written decision on the 

Respondent and the Compliance Department. The written decision 

will include the following information: 

i. the notice of charges or a summary of the charges; 

ii. the answer, if any, or a summary of the answer; 

iii. a summary of the evidence introduced at the hearing or, 

where appropriate, incorporation by reference of the 

Investigation Report; 

iv. a statement of findings and conclusions with respect to each 

charge, and a complete explanation of the evidentiary and 

other bases for such findings and conclusions with respect to 

each charge; 

v. an indication of each specific Rule that the Respondent was 

found to have violated; and 

vi. a declaration of all actions taken or sanctions imposed 

against the Respondent, including the basis for such 

sanctions and the effective date of such sanctions. 
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(i) The Exchange 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, and a copy of such recordings shall become a part of 

the record of such proceedings. If the Respondent requests a copy 

of all or portions of the recording of a hearing, the chairman of the 

Hearing Panel may, within his or her sole discretion, order the 

Respondent to pay the costs for transcribing the recording of the 

hearing. 

(j) The Respondent may appeal the Hearing Panel decision within 

twenty (20) days of receiving the order by filing a written notice of 

appeal pursuant to Rule 7.5.1. The order of the Hearing Panel’s 

decision will become final upon expiration of twenty (20) days after 

the order is served on the Respondent, and such final order will not 

be subject to appeal within the Exchange. 

7.3.10 Sanctions 

(a) After notice and opportunity for hearing in accordance with 

Exchange Rules, the Exchange will impose sanctions if any 

Participant, Authorized Broker, Clearing Member, Authorized User 

or any Person using the User IDLogin Credentials of any Participant 

or Authorized Userother Person is found to have violated or to have 

attempted to violate a Rule of the Exchange or provision of 

Applicable Law for which the Exchange possesses disciplinary 

jurisdiction. Disciplinary sanctions imposed by the Exchange shall 

be commensurate with the violations committed and shall be clearly 

sufficient to deter recidivism or similar violations by other 

Participants, Authorized Brokers, Clearing Members or Authorized 

Users.Persons. All sanctions must take into account the 

Respondent’s disciplinary history. The Exchange may impose one 

or more of the following sanctions or remedies: 

i. censure; 

ii. limitation on trading privileges, ability to otherwise access 

Nodal Exchange, and/or other activities, functions or 

operations; 

iii. suspension of trading privileges and/or ability to otherwise 

access the Nodal Exchange; 

iv. fine; 

v. restitution or disgorgement; 
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2023v34 99

vi. termination of trading privileges and/or ability to otherwise 

access Nodal Exchange; or 

vii. any other sanction or remedy deemed to be appropriate. 

(b) The Exchange may impose a fine of up to $1,000,000 for each 

violation of Exchange Rules or a provision of aApplicable lLaw. 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 quoted prime rate plus three 

percent. The Exchange has sole discretion to select the bank on 

whose quotations to base the prime rate. Participant or Authorized 

Broker will be responsible for paying any fine or other amount 

imposed on, but not paid by, any of its traders or, supervisors, or 

Customers. 

7.4 Summary Actions 

7.4.1 Summary Suspensions 

(a) At any time, the Chief Regulatory Officer, in consultation with the 

Regulatory Oversight Committee of the Board, may summarily 

suspend, revoke, limit, or condition a Participant’s right to access 

the Trading Platform or the association of a Customer, an 

Authorized User, or Authorized Broker with a Participant, or 

suspend access to the Trading PlatformSystem or to the Exchange 

to any other Person subject to the Exchange’s jurisdiction. The 

Chief Regulatory Officer must reasonably believe that immediate 

action is necessary to protect the best interest of the Exchange or the 

marketplace, based on relevant circumstances including any of the 

following: 

i. failure to satisfy requirements of Applicable Law; 

ii. failure to pay fees or fines or arbitration awards; and/or 

iii. any other reason or circumstance for which immediate action 

is necessary. 

(b) Whenever summary action pursuant to this Rule is proposed, the 

Respondent against whom the action is contemplated is to be 

notified at the earliest possible opportunity as appropriate 

considering the best interest of the marketplace. Such notice shall 

be served in accordance with Rule 7.3.5(b) and shall state: 

i. the exact action taken or to be taken; 

ii. the reasons for the action; and 
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2023v34 100

iii. the time and date the action has or is to become effective as 

well as the duration of the action. 

(c) The Respondent may file a notice of appeal filed pursuant to Rule 

7.5.1 seeking reinstatement within twenty (20) days after the notice 

of action is served on the Respondent. Otherwise, the summary 

action becomes final twenty (20) days after the notice of action is 

served on the Respondent. Filing of a notice of intent pursuant to 

this Rule shall not stay the Chief Regulatory Officer’s decision to 

deny access. 

7.4.2 Summary Imposition of Fines 

(a) The Compliance Department may summarily impose a fine for each 

violation against any ParticipantPerson for: 

i. failure to cooperate with the Compliance Department as 

required by the Rules; 

ii. failure to make timely and accurate submissions to the 

Exchange of notices, reports or other information required 

by the Rules; (including Block Trade 15-minute Rule 

violations); or 

iii. failure to keep any books and records required by the Rules. 

(b) The Compliance Department will give notice of any fine imposed 

that will specify: 

i. the violation of the Exchange Rule for which the fine is being 

imposed; 

ii. the date of the violation for which the fine is being imposed; 

and 

iii. the amount of the fine. 

(c) Within twenty (20) days of the service of the notice of the fine 

imposed, the ParticipantPerson must either pay the fine or file a 

notice of appeal pursuant to Rule 7.5.1. Unless timely notice of 

appeal is filed, the fine will become final upon expiration of twenty 

(20) days after the notice of fine is served on the ParticipantPerson. 

7.5 Appeal from Hearing Panel Decisions and Summary Actions 

7.5.1 Appeal Procedures 
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(a) A Respondent found by the Hearing Panel to have violated a Rule 

or Applicable Law pursuant to Rule 7.3.9 or who is subject to any 

summary action imposed pursuant to Rule 7.4 may appeal the order 

or decision within the time permitted in Rule 7.3.9(j) or Rule 7.4, as 

applicable, by filing a notice of appeal with the Chief Regulatory 

Officer. The Compliance Department may also appeal any order by 

a Hearing Panel prior to the order becoming final pursuant to Rule 

7.3.9(j). Except for summary suspensions imposed pursuant to Rule 

7.4.1, Hearing Panel orders and summary imposition of fines shall 

be suspended while the appeal is pending. 

(b) The notice of appeal must state in writing the grounds for appeal, 

including the findings of fact, conclusions or sanctions to which the 

Respondent objects. The Respondent may give notice of appeal on 

the grounds that: 

i. the order or decision was arbitrary, capricious, an abuse of 

discretion, or not in accordance with the Rules; or 

ii. the order or decision exceeded the authority or jurisdiction 

of the Hearing Panel or the Exchange. 

(c) The Chief Regulatory Officer will forward copies of any notice of 

appeal received by it to all parties to the disciplinary proceeding or 

summary action, as the case may be, except the appellant. On or 

before the 20th day after filing a notice of appeal, the appellant must 

file with the Chief Regulatory Officer and serve on the Compliance 

Department a brief supporting the notice of appeal and documents 

supporting the brief. On or before the 20th day after the date on 

which the appellant serves supporting brief, the appellee must file 

and serve its brief in opposition with the Compliance Department. 

(d) Within thirty (30) days after the last submission filed, the Board will 

appoint an Appeals Committee at the recommendation of the Chief 

Regulatory Officer, which shall be composed of not less than three 

individuals from among individuals with knowledge and experience 

in the electric power or financial markets, who are not members of 

the Compliance Department or involved in any other stage of the 

same proceeding or the conduct giving rise to the alleged Rule 

violations. No group or class of Participantsmarket participants may 

dominate or exercise disproportionate influence on the Appeals 

Committee. The chair of the Appeals Committee will be an 

individual qualified to be a Public Director. 

(e) Within ten (10) days of being notified of the appointment of the 

Appeals Committee, either party may seek to disqualify any 

individual named to the Appeals Committee for any grounds 
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provided in paragraph (d) above or Rule 2.6 by serving notice to the 

Chief Regulatory Officer. Legal counsel, other than the Chief 

Regulatory Officer, will decide the merits of any request for 

disqualification within his or her sole discretion. Such decision will 

be final and not subject to appeal. Legal counsel, other than the 

Chief Regulatory Officer, may also remove any member of the 

Appeals Committee for cause. Unless otherwise disqualified or 

removed for cause, the individuals on the Appeals Committee will 

serve until the related proceedings are completed. If a vacancy shall 

occur on an Appeals Committee after it has begun its proceedings, 

the remaining members shall complete consideration and 

disposition of the matter. 

7.5.2 Review by the Appeals Committee 

(a) The Appeals Committee will hold a hearing before all the members 

of such Appeals Committee to allow parties to present oral 

arguments. Any hearing will be conducted privately and 

confidentially. Notwithstanding the confidentiality of hearings, the 

Appeals Committee may appoint individuals to attend any hearing 

and assist in the deliberations if such individuals agree to be subject 

to appropriate confidentiality agreements. In determining 

procedural and evidentiary matters, the Appeals Committee will not 

be bound by any evidentiary or procedural rules or law. Except for 

good cause shown, the review by the Appeals Committee shall only 

consider the record before the Hearing Panel, the written exceptions 

filed by the parties, and the oral and written arguments of the parties. 

(b) Upon completing its review, the Appeals Committee may affirm, 

modify or reverse the Hearing Panel decision or summary action 

under appeal. Modifications by the Appeals Committee may 

include increasing, decreasing or eliminating any sanction or 

remedy imposed, imposing any other sanction or remedy authorized 

by the Rules, remanding the matter to the same or a different 

Hearing Panel for further disciplinary proceedings, or ordering a 

new hearing. 

(c) As promptly as reasonably possible following its review, the 

Appeals Committee will issue a written decision based on the weight 

of the evidence before the Appeals Committee. To the extent that 

the Appeals Committee reaches a different conclusion from that of 

the Hearing Panel, the written decision will include the following 

information: 

i. the notice of charges or a summary of the charges; 

ii. the answer, if any, or a summary of the answer; 
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iii. a summary of the evidence introduced at the hearing or, 

where appropriate, incorporation by reference of the 

Investigation Report; 

iv. a statement of findings and conclusions with respect to each 

charge, and a complete explanation of the evidentiary and 

other bases for such findings and conclusions with respect to 

each charge; 

v. an indication of each specific Rule that the Respondent was 

found to have violated; and 

vi. a declaration of all sanctions imposed against the 

Respondent, including the basis for such sanctions and the 

effective date of such sanctions. 

(d) The order by the Appeals Committee will be the final action of the 

Exchange and will not be subject to further appeal within the 

Exchange. 

7.6 Rights and Responsibilities After Suspension or Termination 

7.6.1 When the Participant’sa Person’s right to access the Exchange, or theits

association ofwith a Customer, an Authorized User, or Authorized Broker

with a Participant, is suspended for a period of twelve (12) months or less, 

none of its rights (including the right to hold oneself out to the public as a 

Participant; enter Orders into the Exchange; and to receive 

Participantcertain rates for fees, costs, and charges) will apply during the 

period of the suspension, except for the right of the Participant, Authorized 

User or Authorized BrokerPerson in question to assert claims against 

others as provided in the Rules. Any such suspension will not affect the 

rights of creditors under the Rules or relieve the Participant, Authorized 

User or Authorized BrokerPerson in question of its, his, or her obligations 

under the Rules to perform any Transactions entered into before the 

suspension, or for any Exchange fees, costs or charges incurred during the 

suspension. The Exchange may discipline a suspended Participant or 

Authorized UserPerson under this Section VII for any violation of 

Applicable Law committed by the Participantsuch Person before, during, 

or after the suspension. 

7.6.2 When the Participant’sa Person’s right to access the Exchange, or theits

association ofwith a Customer, an Authorized User, or Authorized Broker

with a Participant, is terminated, all of its rights will terminate, except for 

the right of the Participant, Authorized User or Authorized BrokerPerson

in question to assert claims against others, as provided in the Rules. Any 

such termination will not affect the rights of creditors under the Rules. A 

terminated Participant or Authorized UserPerson may only seek to 
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reinstate its right to access the Exchange by filing an application in 

accordance with Section III of the Rules. The Exchange will not consider 

the application of a terminated Participant, Authorized User or Authorized 

BrokerPerson if such Participant or Authorized UserPerson continues to 

fail to appear at Disciplinary Actions without good cause, or continues to 

impede the progress of Disciplinary Actions. 

7.6.3 A suspended or terminated Participant, Authorized User or Authorized 

BrokerPerson remains subject to the Rules and the jurisdiction of the 

Exchange for acts and omissions prior to the suspension of termination, 

and must cooperate in Disciplinary Actions as if the suspended or 

terminated Participant, Authorized User or Authorized BrokerPerson still 

had the right to access the Exchange, or was still associated with a 

ParticipantPerson, as the case may be. 

7.7 Notice to the Respondent, the CFTC, and the Public 

The Exchange will provide written notice of Disciplinary Actions to the 

partiesapplicable Persons and the CFTC consistent with CFTC Regulations. 

Whenever the Exchange suspends, expels, fines, or otherwise disciplines, or denies 

any Person access to the Exchange, the Exchange will make the public disclosures 

required by CFTC Regulations. 
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SECTION VIII ARBITRATION 

8.1 Arbitration Requirement 

8.1.1 Participants, Customers, Authorized Brokers, Clearing Members, and 

Authorized Users and, if they so elect, Customers who are not ECPs 

(“Non-ECP Customer”), shall arbitrate through the NFA arbitration 

program all disputes, controversies or claims between or among 

themselves that relate to or arise out of any Nodal Contract and that are 

based upon facts and circumstances that occurred at a time when the parties 

were Participants or Authorized Users. Compliance shall inform a NonECP Customer that it may elect to participate in arbitration through the 

Exchange. 

8.1.2 Rule 8.1.1 does not apply to disputes between or among Participants, 

Authorized Brokers, Clearing Members or, Authorized Users, or 

Customers in which: (i) such Persons are required by the rules of a SelfRegulatory Organization to submit to the dispute resolution procedures of 

that Self-Regulatory Organization; or (ii) that such Persons have, by valid 

and binding agreement, committed to arbitrate or litigate in a forum other 

than NFA; or (iii) a Non-ECP Customer that does not elect arbitration. 

8.2 Arbitration Proceedings 

8.2.1 Arbitration proceedings conducted pursuant to Rule 8.1 are administered 

for Participants through NFA pursuant to the NFA member arbitration 

rulesCode of Arbitration, as if each Participant, Authorized Broker, 

Customer, or Clearing Member that is party to such arbitration were an 

“NFA Member,” and references in such member arbitration rulesNFA 

Code of Arbitration to the “Associates” of an “NFA Member” shall mean 

and include any Authorized User and any individual who is employed by 

or is an agent of a Participant, Authorized Broker, Customer, or Clearing 

Member and who has been authorized to access the Trading Platform under 

the Rules. A Non-ECP Customer that elects arbitration shall be deemed a 

“Customer” within the definition of the NFA Code of Arbitration. 

8.2.2 To initiate arbitration, a Person shall notify the NFA, either in writing or 

orally. The NFA shall maintain a record of the receipt of such notice and 

shall promptly provide such Person with a copy of the member arbitration 

rulesNFA Code of Arbitration and an Arbitration Claim form. The intent 

to arbitrate must be received by NFA within two years from the date when 

the party filing the Arbitration Claim form knew or should have known of 

the act or transaction that is the subject of the controversy. 

8.2.3 The party filing a claim shall pay a hearing fee based on the amount 

claimed in accordance with the member arbitration rules.NFA Code of 

Arbitration. The arbitrators, in their discretion, may assess the entire fee 
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against any party or divide the fee among any or all parties. Hearing fees 

shall be paid to NFA in advance of the hearing sessions to which they 

apply. 

8.3 Penalties

8.3.1 Any failure on the part of a Participant, Authorized Broker, Person or 

Clearing Member or Authorized User to arbitrate a dispute subject to this 

Section VIII, or the commencement by any such Person of a suit in any 

court prior to arbitrating a case subject to this Section VIII, violates the 

Rules and shall subject such Person to Disciplinary Action pursuant to 

Section VII. A Non-ECP Customer who does not elect to participate in 

arbitration is, therefore, not subject to Section VIII or this Rule. 

8.3.2 The Exchange may summarily suspend, pursuant to Rule 7.4.1, a 

ParticipantPerson that fails to timely satisfy an arbitration award rendered 

in any arbitration pursuant to this Section VIII. 
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SECTION IX MISCELLANEOUS

9.1 Trading by Exchange Officials Prohibited; Misuse of Material, Non-Public 

Information 

9.1.1 Terms used in this Rule 9.1 and not otherwise defined in the Rules, shall 

have the meanings set forth in CFTC Regulations 1.3 and 1.59. 

9.1.2 (a) No Officer or employee of the Exchange may trade, directly or 

indirectly: (i) any Nodal Contract traded on or subject to the Rules or any 

related financial instrument, or (ii) any Nodal Contract or financial 

instrument where such Exchange Officer or employee has access to 

material, non-public information concerning such Nodal Contract or 

financial instrument. 

(b) No member of the Board, member of any committee established by 

the Board, or agent or independent contractor of the Exchange shall trade, 

directly or indirectly, in any Nodal Contract or financial instrument, on 

the basis of any material, non-public information obtained in connection 

with the performance of his or her official duties. 

9.1.3 The Chief Regulatory Officer (or, in the case of the Chief Regulatory 

Officer, the Board) may grant exemptions from the provisions of Rule 

9.1.2 to Exchange Officials on a case-by-case basis under circumstances 

which are not contrary to the purposes of this Rule and CFTC Regulation 

1.59. Such circumstances may include, but are not necessarily limited to: 

(a) participation in pooled investment vehicles where such Exchange 

Official has no direct or indirect control over Transactions effected 

by or for the account of the pool; 

(b) service by such Exchange Official as an executor or administrator 

of an estate; 

(c) service by such Exchange Official in any other fiduciary capacity, 

such as an officer of a charitable organization, in which such 

Exchange Official receives no pecuniary benefit from the trading of 

Nodal Contracts or other financial instruments; 

(d) trading in Nodal Contracts or financial instruments executed on or 

subject to the rules of a swap execution facility, a designated 

contract market or a national securities exchange under 

circumstances in which such Exchange Official’s access to material 

non-public information in respect of such financial instruments is 

sufficiently minimal or attenuated so as to be insignificant; and 

(e) such other circumstances as the Chief Regulatory Officer (or, in the 

case of the Chief Regulatory Officer, the Board) may determine. 
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9.1.4 For the avoidance of doubt, participation by an Exchange Official in a 

retirement plan sponsored by the Exchange shall not be deemed to 

constitute trading directly or indirectly in a Nodal Contract or financial 

instrument, notwithstanding such plan’s trading of Nodal Contracts or 

financial instruments. 

9.1.5 Any Exchange Official that has received an exemption under Rule 9.1.3(b) 

must: 

(a) furnish to the Exchange (or, in the case of the Chief Regulatory 

Officer, to the Board) account statements and other documents 

relevant to the trading activities that are so exempted; and 

(b) inform the Chief Regulatory Officer (or, in the case of the Chief 

Regulatory Officer, the Board) within one business day of any 

material change of information that may affect such Exchange 

Official’s qualification for such exemption. 

9.1.6 Exchange Officials, agents, and independent contractors of the Exchange 

are prohibited from disclosing material non-public information obtained as 

a result of their employment, agency relationship, or engagement with the 

Exchange where the Exchange Official, agent, or independent contractor 

expected or should have reasonably expected that the information 

disclosed may assist a Person in trading any Nodal Contract, any Nodal 

Contract traded on another designated contract market or other market, or 

any related underlying cCommodity or security. 

9.2 Market Data 

9.2.1 Each ParticipantPerson, on behalf of itself and each of its Affiliates, 

Authorized Users and other Persons affiliated with any of the foregoing, 

hereby acknowledges and agrees that the Exchange owns and shall retain 

all right, title and interest in and to the Exchange, all components thereof, 

including without limitation all related applications, all application 

programming interfaces, user interface designs, software and source code 

and any and all intellectual property rights therein, including, without 

limitation all registered or unregistered, as applicable (a) copyright, (b) 

trade mark, (c) service mark, (d) trade secret, (e) trade name, (f) data or 

database rights, (g) logo and design rights, (h) moral rights, (i) inventions, 

whether or not capable or protection by patent or registration, (j) rights in 

commercial information or technical information, including know-how, 

research and development data and manufacturing methods, (k) patent, and 

(l) other intellectual property and ownership rights, including applications 

for the grant of any of the same, in or to the Exchange and all other related 

proprietary rights of the Exchange and/or any of its Affiliates (together, 

with any and all enhancements, corrections, bug fixes, updates and other 

modifications to any of the foregoing and any and all data or information 
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of any kind transmitted by means of any of the foregoing, including, 

without limitation, the market data of the Exchange, the “Proprietary 

Information”). Each ParticipantPerson, on behalf of itself and each of its 

Affiliates, Authorized Users and other Persons affiliated with any of the 

foregoing or Customers, as applicable, further acknowledges and agrees 

that the Proprietary Information is the exclusive, valuable and confidential 

property of the Exchange. Each ParticipantPerson acknowledges and 

agrees that it shall not and shall not permit its Affiliates, Authorized Users 

and other Persons affiliated with any of the foregoing or Customers, as 

applicable, to, reverse engineer, copy, bug fix, correct, update, transfer, 

reproduce, republish, broadcast, create derivative works based on or 

otherwise modify, in any manner, all or any part of the Exchange or the 

Proprietary Information. Each ParticipantPerson further agrees to and to 

cause each of its Affiliates, Authorized Users and other Persons affiliated 

with any of the foregoing or Customers, as applicable, to, keep the 

Proprietary Information confidential and not to transfer, rent, lease, loan, 

sell or distribute, directly or indirectly, all or any portion of the Exchange 

or any Proprietary Information. The Exchange has the exclusive right to 

use, distribute, license, sub-license, disclose and sell the market data of the 

Exchange, including but not limited to anonymized trade data, and any 

derivative works in any manner, media and jurisdiction. 

9.2.2 The Exchange will make market data of the Exchange available at such 

times and in such manner (whether through the System, one or more 

Affiliates of the Exchange, one or more vendors and/or otherwise) as the 

Exchange may consider necessary or appropriate from time to time. The 

Exchange may require Persons that receive market data from the Exchange 

to execute one or more market data, connectivity or similar agreements 

with the Exchange in a form and manner prescribed by the Exchange.

9.3 Recording of Communications 

The Exchange or the Regulatory Services Provider may record conversations and 

retain copies of electronic communications between Exchange Officials and 

Participants, their Authorized UsersPersons or other agents. Any such recordings 

may be retained by the Exchange or the Regulatory Services Provider in such 

manner and for such periods of time as the Exchange may deem necessary or 

appropriate, including as may be required by Applicable Law. 

9.4 Confidentiality and Disclosure of Information

All information provided by a ParticipantPerson to the Exchange shall be held in 

confidence and shall not be made known to any other Person except as follows: 

(a) with the consent of the ParticipantPerson providing such 

information; 
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(b) to a government agency or the regulatory authority of any foreign 

jurisdiction, if the Exchange is legally required to do so by such 

foreign authority; 

(c) to the Clearing House and, if applicable, to the Participant’sPerson’s

Clearing Member; 

(d) subject to appropriate confidentiality requirements, to any Person 

providing services to the Exchange, including but not limited to the 

Regulatory Services Provider; 

(e) to Affiliates of the Exchange, the Board, any committee, Exchange 

Officials, attorneys and auditors, and to agents and independent 

contractors that have been engaged by the Exchange who require 

such information in connection with the discharge of their duties to 

the Exchange; and 

(f) as otherwise permitted under the Rules and the Participant 

Agreement. 

Proprietary or personal information of a Participant collected or received by the 

Exchange for the purpose of fulfilling regulatory obligations (“Regulatory Data”) 

shall not be disclosed publicly other than on an aggregated or anonymized basis, or 

in a manner that does not directly or indirectly identify any ParticipantPerson in the 

data provided. Regulatory Data may not be used by the Exchange for business or 

marketing purposes unless the ParticipantPerson has clearly consented to the use of 

such data in such manner. Access to the Exchange shall not be conditioned upon a 

Participant’sPerson’s consent to the use of Regulatory Data for business or 

marketing purposes. Nothing in this Rule shall preclude the Exchange from 

disclosing Regulatory Data pursuant to the provisions in (a) through (f) above. 

9.5 Force Majeure 

Notwithstanding any other provision of the Rules, the Exchange shall not be 

obligated to perform its obligations under the Rules or any agreement with a Person 

or Participant, or to compensate any Person for losses occasioned by any delay or 

failure of performance, to the extent a delay or failure of performance is the result 

of circumstances that the Exchange determines, in its sole discretion, may have an 

adverse effect upon the functions and facilities of the Exchange, including, but not 

limited to, acts of God, fire or other natural disasters, bomb threats, acts of terrorism 

or war or severely inclement weather. 

9.6 Extension or Waiver of Rules 

The Exchange may, in its sole discretion, waive, or extend the time period for 

performing, any act or acts designated by the Rules, but only to the extent such 

waiver or extension is not inconsistent with Applicable Law. 
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9.7 Notice and Effect of Amendment, Repeal or New Rule 

9.7.1 The Exchange may, in compliance with the CEA and CFTC Regulations, 

amend or repeal any Rule and/or adopt new Rules. The Exchange will 

publish a notice with respect to each amendment or repeal of any Rule or 

adoption of any new Rule at the time the Exchange files such Rules with 

the CFTC. The Exchange also will publish notice of any action taken to 

implement any Rule, in a form and manner that is reasonably designed to 

enable each ParticipantPerson to become aware of and familiar with, and 

to implement any necessary preparatory measures to be taken by it with 

respect to, such addition or modification, prior to the effective date thereof. 

For purposes of this Rule 9.7, it will be sufficient (without limiting the 

discretion of the Exchange as to any other reasonable means of 

communication) if notice is published on the Exchange’s website. 

9.7.2 Any amendment or repeal of a Rule or adoption of a new Rule, shall, upon 

the effective date of such amendment, repeal, or adoption, as applicable, 

be binding on all Persons subject to the jurisdiction of the Exchange 

(regardless of when any such Person became subject to the Exchange’s 

jurisdiction) and all contracts (regardless of whether any such contract was 

entered into before, on or after such effective date). 

9.8 Signatures

Rather than rely on an original signature, the Exchange may elect to rely on a 

signature that is transmitted, recorded or stored by any electronic, optical, or similar 

means (including but not limited to telecopy, imaging, photocopying, electronic 

mail, or electronic data interchange, telegram, or telex) as if it were (and the 

signature shall be considered and have the same effect as) a valid and binding 

original. 

9.9 Governing Law; Legal Proceedings 

9.9.1 The Rules, and the rights and obligations of the Exchange and 

ParticipantsPersons under the Rules, shall be governed by, and construed 

in accordance with, the laws of the State of New York applicable to 

contracts executed and performed wholly within the State of New York 

without regard to any provisions of New York law that would apply the 

substantive law of a different jurisdiction. 

9.9.2 Any action, suit or proceeding against the Exchange, its officers, directors, 

limited liability company members, employees, agents, or any member of 

any committee must be brought with in one (1) year from the time that a 

cause of action has accrued. Any such action, suit or proceeding shall be 

brought in the State or Federal courts located within Borough of Manhattan 

in the City of New York. Each Person and Participant expressly consents, 

for itself and its Customers and Authorized Users, to the jurisdiction of any 
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such court, waives any objection to venue therein, and waives any right it 

may have to a trial by jury. 

9.9.3 In the event that a ParticipantPerson or an Affiliate, if applicable, of such 

ParticipantPerson who fails to prevail in a lawsuit or other legal proceeding 

instituted by such ParticipantPerson or such Affiliate, if applicable, against 

(i) the Exchange or (ii) any Affiliate of the Exchange or any of their 

respective officers, directors, equity holders, employees, agents, or any 

member of any committee, and related to the business of the Exchange, 

such ParticipantPerson shall pay to the Exchange all reasonable expenses, 

including attorneys’ fees, incurred by the Exchange in the defense of such 

proceeding. This Rule 9.9.3 shall not apply to Exchange disciplinary 

actions, appeals thereof, or an instance in which the Board has granted a 

waiver of the provisions hereof. 

9.10 LIMITATION OF LIABILITY; NO WARRANTIES 

9.10.1 PARTICIPANT’SPERSON’S USE OF THE SERVICES, THE SYSTEM, 

THE NODAL PROPERTY AND ANY OTHER INFORMATION AND 

MATERIALS PROVIDED BY NODAL, IS AT 

PARTICIPANT’SPERSON’S OWN RISK, AND THE SERVICES, THE 

NODAL PROPERTY AND ANY OTHER INFORMATION AND 

MATERIALS PROVIDED BY NODAL HEREUNDER ARE 

PROVIDED ON AN “AS IS” AND “AS AVAILABLE” BASIS, 

WITHOUT WARRANTIES OR REPRESENTATIONS OF ANY KIND, 

EXPRESS OR IMPLIED, BY STATUTE, COMMON LAW OR 

OTHERWISE INCLUDING ALL IMPLIED WARRANTIES OF 

MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE 

AND NON-INFRINGEMENT AND ANY WARRANTIES ARISING 

FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICE. 

NODAL DOES NOT GUARANTEE THAT (i) THE NODAL 

PROPERTY OR THE SERVICES WILL OPERATE IN AN ERROR 

FREE, SECURE OR UNINTERRUPTED MANNER, OR (ii) ANY 

INFORMATION OR MATERIALS PROVIDED BY NODAL OR 

ACCESSIBLE THROUGH THE NODAL PROPERTY WILL BE 

ACCURATE, COMPLETE, RELIABLE, OR TIMELY, OR (iii) THE 

NODAL PROPERTY OR ANY ASPECTS OF THE SERVICES WILL 

BE FREE FROM VIRUSES OR OTHER HARMFUL COMPONENTS. 

NODAL SHALL HAVE NO LIABILITY FOR THE 

CREDITWORTHINESS OF ANY PARTICIPANTPERSON OR FOR 

THE ACTS OR OMISSIONS OF ANY AUTHORIZED BROKER 

UTILIZING THE SERVICES OR ANY ASPECT OF THE SERVICES 

OR SYSTEM. PARTICIPANTSUCH PERSON IS SOLELY 

RESPONSIBLE FOR THE SECURITY AND INTEGRITY OF THE 

PARTICIPANTSUCH PERSON’S TECHNOLOGY. 

PARTICIPANTSUCH PERSON ACKNOWLEDGES THAT 

PARTICIPANT’SSUCH PERSON’S ACCESS TO THE SYSTEM AND 
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THE SERVICES IS INTERNET-BASED AND THAT NODAL HAS NO 

CONTROL OVER THE INTERNET OR PARTICIPANT’SSUCH 

PERSON’S CONNECTIONS THERETO. PARTICIPANTSUCH 

PERSON FURTHER ACKNOWLEDGES THAT THE INTERNET, 

COMPUTER NETWORKS, AND COMMUNICATIONS LINKS AND 

DEVICES NECESSARY TO ENABLE PARTICIPANTA PERSON TO 

ACCESS AND USE THE SYSTEM AND THE SERVICES ARE 

INHERENTLY INSECURE AND VULNERABLE TO ATTEMPTS AT 

UNAUTHORIZED ENTRY AND THAT NO FORM OF PROTECTION 

CAN ENSURE PARTICIPANT’SPERSON’S DATA, HARDWARE, OR 

SOFTWARE OR THE SYSTEM OR OTHER NODAL PROPERTY 

WILL BE FULLY SECURE. FURTHERMORE, NODAL SHALL 

HAVE NO OBLIGATION TO MONITOR OR VERIFY ANY 

INFORMATION DISPLAYED THROUGH THE SYSTEM. 

9.10.2 EXCLUDING ANY LIABILITY FOR SUCH PARTY’S WILLFUL 

MISCONDUCT OR GROSS NEGLIGENCE, AND EXCLUDING, IN 

THE CASE OF A PARTICIPANT, PARTICIPANT’SOR FCM 

PARTICIPANT, OR AUTHORIZED BROKER THE

INDEMNIFICATION OBLIGATIONS PURSUANT TO SECTION 10 

OF THE PARTICIPANT AGREEMENT OR AUTHORIZED BROKER 

AGREEMENT, RESPECTIVELY, EACH PARTY AGREES THAT IN 

NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY 

INDIRECT, SPECIAL, PUNITIVE, EXEMPLARY OR 

CONSEQUENTIAL DAMAGES, INCLUDING DAMAGES FOR LOSS 

OF PROFITS, LOSS OF REVENUE, LOSS OR CORRUPTION OF 

DATA, TRADING LOSSES OR BUSINESS INTERRUPTION AND 

THE LIKE, ARISING IN ANY MANNER WHATSOEVER OUT OF OR 

IN CONNECTION WITH THISITS RESPECTIVE AGREEMENT OR 

ANY USE (WHETHER OR NOT AUTHORIZED) OR INABILITY TO 

USE THE NODAL PROPERTY OR ANY OTHER INFORMATION OR 

MATERIALS PROVIDED TO PARTICIPANTTHE PARTY BY 

NODAL OR ACCESSIBLE THROUGH THE SERVICES, INCLUDING 

THE ACCURACY, COMPLETENESS, RELIABILITY, TIMELINESS, 

QUALITY, SECURITY, PERFORMANCE, OR PRICING OF THE 

SERVICES OR ANY FAILURES, DEGRADATIONS OR DELAYS 

ASSOCIATED THEREWITH, REGARDLESS OF WHETHER SUCH 

DAMAGES ARISE IN TORT, CONTRACT, OR OTHERWISE, AND 

EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH 

DAMAGES. NOTWITHSTANDING THE FOREGOING, IF A COURT 

OR OTHER TRIBUNAL OF COMPETENT JURISDICTION SHOULD 

FIND NODAL LIABLE FOR ANY LOSS, DAMAGE OR EXPENSES 

UNDER THISTHE RESPECTIVE AGREEMENT, THE AGGREGATE 

LIABILITY OF NODAL UNDER THE AGREEMENT, REGARDLESS 

OF THE FORM OF ACTION, SHALL IN NO EVENT EXCEED THE 

GREATER OF (i) $10,000 AND (ii) THE TOTAL COMMISSIONS, 

FEES, OR OTHER AMOUNTS (EXCLUDING ANY APPLICABLE 
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TAXES AND DUTIES) PAID TO NODAL BY PARTICIPANTTHE 

PARTY DURING THE SIX MONTHS PRECEDING THE DATE ON 

WHICH THE EVENTS GIVING RISE TO SUCH LIABILITY AROSE. 

9.10.3 ANY CLAIM FOR REDRESS OR DAMAGES HEREUNDER SHALL 

BE FILED IN A COURT OF COMPETENT JURISDICTION WITHIN 

TWO (2) YEARS OF THE DATE ON WHICH SUCH CLAIM 

ALLEGEDLY AROSE. FAILURE TO INSTITUTE LITIGATION 

WITHIN SUCH TIME PERIOD SHALL BE DEEMED TO BE A 

WAIVER OF SUCH CLAIM AND THE CLAIM SHALL BE OF NO 

FURTHER FORCE OR EFFECT. THE ALLOCATIONS OF 

LIABILITY IN THIS RULE 9.10 REPRESENT THE AGREED AND 

BARGAINED FOR UNDERSTANDING OF THE PARTIES, AND 

EACH PARTY ACKNOWLEDGES THAT THE OTHER PARTY’S 

RIGHTS AND OBLIGATIONS HEREUNDER REFLECT SUCH 

ALLOCATIONS. THE PARTIES AGREE THAT THEY WILL NOT 

ALLEGE THAT THIS REMEDY FAILS ITS ESSENTIAL PURPOSE. 

9.10.4 PARTICIPANTTHE PARTY FURTHER AGREES THAT THE 

PROVISIONS OF THE RULES OF THE CLEARING HOUSE 

LIMITING THE LIABILITY OF THE CLEARING HOUSE TO ITS 

MEMBERS SHALL APPLY TO PARTICIPANTTHE PARTY AS 

FULLY AS IF PARTICIPANTTHE PARTY WERE A MEMBER OF 

THE CLEARING HOUSE MUTATIS MUTANDIS. 

9.11 Requirements for Non-U.S. Participants and Customers 

9.11.1 Nodal Exchange is permitted to allow Participants organized or located 

outside of the United States to place Orders and Transactions on the 

Exchange subject to the requirements in this Rule 9.11. Please see the 

document entitled “Non-U.S. Jurisdictions” available on the Nodal 

Exchange website for additional guidance on these topics, accessible at: 

https://www.nodalexchange.com/regulation/nodal-exchangeregulation/jurisdictions/. 

9.11.2 FCM Participants shall ensure that Customers organized or located outside 

of the United States do not place Orders and Transactions on the Exchange 

from any non-U.S. jurisdiction except for Spain, provided that if such 

Customer is an “Investment Firm” as defined under Spanish law, the 

Customer must obtain authorization from the Comisión Nacional del 

Mercado de Valores (CNMV) prior to placing Orders and Transactions on 

the Exchange. 

9.11.3 FCM Participants shall not allow a Person to become a Customer from any 

non-U.S. jurisdiction, including those jurisdictions listed on the Nodal 

website, unless permitted under these Rules. 
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9.11.4 Participants and Customers are at all times responsible for ensuring that 

they are acting in compliance with Applicable Law and/or regulatory 

requirements and should therefore seek their own legal and tax advice 

when considering entering Orders and Transactions on the Exchange from 

outside the United States. 
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APPENDIX A – 

CONTRACT SPECIFICATIONS 

The Contract Specifications for all Nodal Contracts are available at 

http://www.nodalexchange.com. The Contract Specifications form a part of these Rules 

and are incorporated herein by reference.
2023v32023v4 117

 

APPENDIX B – 

MINIMUM BLOCK SIZES 

FOR NODAL EXCHANGE CONTRACTS 

The minimum sizes for Block Trades on Nodal Contracts are available at 

www.nodalexchange.com. 
2023v43 118

APPENDIX C – 

REPORTING LEVELS, POSITION ACCOUNTABILITY LEVELS AND 

POSITION LIMITS

Reporting levels, position accountability levels and position limits for Nodal Contracts are 

available at www.nodalexchange.com. 

Power, trucking freight and environmental contracts must be in compliance with spot 

month position limits as of the close of trading on the trading day preceding the first day 

of the calendar month covered by the expiry. The Henry Hub natural gas contracts and 

penultimate contracts must be in compliance with spot month position limits at the close 

of trading three business days prior to the Last Trading Day of the corresponding contract. 

 
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