North American Derivatives Exchange, Inc., 200 West Jackson Blvd., Suite 1400, Chicago, IL 60606

U.S Toll-Free +1 (877) 77 NADEX info@nadex.com www.nadex.com

No. 20181214(1)

Jaime M. Walsh

+1 (312) 884-0927

Jaime.walsh@nadex.com

December 28, 2018

Via CFTC Portal Submissions

Mr. Christopher Kirkpatrick

Secretary of the Commission

Office of the Secretariat

Commodity Futures Trading Commission

3 Lafayette Centre 

1155 21st Street, N.W. 

Washington D.C. 20581

RE: Rule Certification: Nadex Rebates Trading and Settlement Fees for Market Makers 

Quoting Touch Brackets – Submission Pursuant to Commission Regulation §40.6(a) 

Dear Mr. Kirkpatrick:

Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended (the “Act”), 

and §40.6(a) of the regulations promulgated by the Commodity Futures Trading Commission 

(the “Commission”) under the Act, North American Derivatives Exchange, Inc. (“Nadex”) 

hereby submits to the Commission its intent to offer a rebate on Market Maker trading and 

settlement fees for its new Touch Bracket contracts (the “Market Maker Touch Bracket Rebate”, 

or the “Rebate”). The Rebate is a temporary offer to incentivize its Market Makers to take on the 

obligation to quote markets in Nadex’s newly launched Touch Bracket contracts in order to

provide a better experience to Nadex’s market participants in these products. The Rebate will 

only apply to Nadex’s contracted Market Makers who are obligated to quote the Touch Bracket 

contracts, and only to the fees incurred from quoting the Touch Bracket contracts. The Rebate 

will apply to fees incurred through the last trading day in January 2019, after which Market 

Makers will be charged $0.50 per contract per side for each Touch Bracket trade executed on 

Nadex, and $0.50 per contract per side for each Touch Bracket contract that settles in-the-money, 

in accordance with the Fee Schedule. Market Makers will be rebated in the form of a credit to 

the Market Makers’ accounts after January 2019.
North American Derivatives Exchange, Inc., 200 West Jackson Blvd., Suite 1400, Chicago, IL 60606

U.S Toll-Free +1 (877) 77 NADEX info@nadex.com www.nadex.com

No. 20181228(1)

DCM Core Principles 

Nadex has identified the following Designated Contract Market (“DCM”) Core Principles 

as potentially being impacted by the Market Maker Touch Bracket Rebate: Core Principle 2 

(Compliance with Rules), Core Principle 7 (Availability of General Information). 

Core Principle 2 (Compliance with Rules), implemented by Commission Regulation 

38.151 (Access Requirements) requires a DCM provide impartial access to its markets to any of 

its members or market participants, including comparable fee structures for members and 

persons with trading privileges. In its proposed amendments to Part 38 of the Commission’s 

Regulations, Commission staff noted that a DCM “may establish different categories of market 

participants, but may not discriminate within a particular category. Fee structures may differ 

among categories if such fee structures are reasonably related to the cost of providing access or 

services to a particular category.”1 Nadex’s contracted Market Makers are a specific category of 

market participant, and the Market Maker Touch Bracket Rebate will apply to any Market Maker 

that has agreed with Nadex to quote markets in the new Touch Brackets. Accordingly, the 

amendments discussed herein will not negatively impact Nadex’s ability to comply with this 

Core Principle. 

Core Principle 7, implemented by Commission Regulations 38.400 and 38.401, requires a

DCM to make its Rules, including material terms of its market maker program, available on its 

website. Notice of the temporary Market Maker Touch Bracket Rebate will be posted on the 

Nadex Notices page, and therefore, will not negatively impact Nadex’s ability to comply with 

this Core Principle. 

DCO Core Principles 

Nadex has identified the following Derivatives Clearing Organization (“DCO”) Core 

Principle as potentially being impacted by the amendments discussed herein: Core Principle L 

(Public Information).

Core Principle L (Public Information), implemented by Commission Regulation 39.21, 

requires a DCO to publicly disclose fees charged to its members. As previously indicated, notice 

of the temporary Market Maker Touch Bracket Rebate will be posted on the Nadex Notices page, 

and will not negatively impact Nadex’s ability to comply with this Core Principle.

Pursuant to the 10-day filing period under Regulation 40.6(a)(3), this submission will

become effective January 15, 2019. The Rebate will be credited after January 2019.

No substantive opposing views were expressed to Nadex with respect to these 

amendments. 

 

1 75 Fed. Reg. 80579 (Dec. 22, 2010).
North American Derivatives Exchange, Inc., 200 West Jackson Blvd., Suite 1400, Chicago, IL 60606

U.S Toll-Free +1 (877) 77 NADEX info@nadex.com www.nadex.com

No. 20181228(1)

Nadex hereby certifies that the amendments contained herein comply with the Act, as 

amended, and the Commission Regulations adopted thereunder.

Nadex certifies that a copy of these amendments was posted on its website at the time of 

this filing.

Should you have any questions regarding the above, please do not hesitate to contact me 

by telephone at (312) 884-0927 or by email at Jaime.walsh@nadex.com.

Sincerely,

Jaime Walsh

Legal Counsel