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CX Futures Exchange, L.P. 

Rule 40.2 New Contract Submission—Atlantic Named Storm Swaps #2 Contract

Submission #2018-6

September 7, 2018

CX Futures Exchange, L.P. (“CX” or “Exchange”) hereby certifies its listing of the following 

new contract: Atlantic Named Storm Swaps #2 Contract. 

This submission is being made in accordance with Section 5c(c)(1) of the Commodity Exchange 

Act, as amended, 7 U.S.C. §1 et seq. (“Act”) and Commodity Futures Trading Commission 

(“Commission”) Rule 40.2 thereunder:

1. The text of the proposed contract terms and conditions is attached. 

2. The proposed listing date of the contract will be the day following this submission 

to the Commission.

3. Attached, please find a certification that: (1) the contract complies with the 

Commodity Exchange Act, and the Commission’s regulations thereunder; and (2) 

that CX posted on its website a notice of this pending product certification with 

the Commission and a copy of the submission, concurrent with the filing of this 

submission with the Commission.

4. A concise explanation and analysis of the product and its compliance with 

applicable provisions of the Act, including core principles, and the Commission's 

regulations thereunder, appears below. 

5. Confidentiality for this submission is not requested.

CONCISE EXPLANATION AND ANALYSIS OF THE PRODUCT AND ITS 

COMPLIANCE WITH APPLICABLE PROVISIONS OF THE ACT, INCLUDING 

CORE PRINCIPLES AND THE COMMISSION’S REGULATIONS THEREUNDER

Pursuant to Commission Rule 40.2(a)(3)(v), the following is a concise explanation and analysis 

of the product and its compliance with the Act and Commission rules. 

The Exchange currently offers the Atlantic Named Storm Swaps Contract (the “ANS Contract”), 

which relates to the location of landfall (or lack thereof) of named tropical cyclones in the 

eastern half of the continental United States. 

In order to ensure greater fairness and transparency in the trading of this instrument, the ANS 

Contract will be delisted and replaced by the Atlantic Named Storm Swaps #2 Contract (the 

“ANS #2 Contract”). 

The terms of the ANS #2 Contract are identical to those of the ANS Contract, with the exception 

of paragraph (g)(iv), which now provides:
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The Primary Trading Period begins upon the listing of each ANS Contract and continues 

until 4:00 PM ET on the First Trading Day that follows the day on which the position of 

the center of the corresponding named storm lies within 500 statute miles of any potential 

Landfall Location listed in Table 1, as calculated by the Exchange based on NHC data.

Any existing ANS Contract (i.e., named storm) with open interest will continue to be operative 

until contract expiration. WXANS18H is the last instrument that will operate under the old ANS 

Contract rules. The Exchange will delist the current WXANS18I and WXANS18J, which were 

initially listed under the old ANS Contract rules but do not currently have any open interest, and 

WXANS18I will be listed as the first instrument under the new ANS #2 Contract rules. These 

instruments will trade concurrently until the time that the ANS Contracts with open interest 

settle, at which point only the ANS #2 Contract will remain operative.

After January 1, 2019, a Secondary Trading Period will begin in these contracts. For the 

avoidance of doubt, until January 1, 2019, once the Primary Trading Period for these instruments

(in both ANS Contract and ANS #2 Contract) ceases, there shall be no trading in the respective 

named storm contract.

The Exchange incorporates by reference its Rule 40.2 Submission #2016-5 of June 13, 2016, 

which describes the operation of the ANS Contract as consistent with, and in accordance with, 

the Core Principles of Section 5 of the Commodity Exchange Act and the rules thereunder.
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CERTIFICATIONS PURSUANT TO SECTION 5c OF THE COMMODITY 

EXCHANGE ACT, 7 U.S.C. §7A-2 AND COMMODITY FUTURES TRADING 

COMMISSION RULE 40.2, 17 C.F.R. §40.2

I hereby certify that:

(1) the Atlantic Named Storm Swaps #2 Contract complies with the Commodity 

Exchange Act, and the Commodity Futures Trading Commission’s regulations 

thereunder; and

(2) concurrent with this submission, CX Futures Exchange, L.P. posted on its website: a 

notice of this pending product certification with the Commission and a copy of this 

submission, concurrent with the filing of this submission with the Commission.

_________________________

By: 

Title: 

Date: 

Nolan Glantz

COO

9/7/2018
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ATTACHMENT A—CONTRACT TERMS AND CONDITIONS

CX FUTURES EXCHANGE, L.P.

CHAPTER IX

CONTRACTS

... 

IX-3001. ATLANTIC NAMED STORM SWAPS #2

(a) Scope and Underlying 

(i) These Contract Rules will govern the trading on the CX Futures Exchange, L.P. 

(the “Exchange”) of the ATLANTIC NAMED STORM SWAPS #2 CONTRACT (“ANS 

Contract”). In general, the ANS Contract is a swap that will settle upon a Qualifying Terminating 

Condition and will pay a fixed dollar amount per contract to any long position holder within the 

Impacted Zip Code Area or, if there was no Impacted Zip Code Area, then a fixed dollar amount 

per contract to long position holders of Strike Code “00000,” and nothing to all other contract 

holders for that ANS Contract. 

(ii) Clearing of the ANS Contract will be governed by the rules of the CX 

Clearinghouse, L.P. (the “Clearinghouse”). These Contract Rules are established pursuant to and 

constitute “Contract Specifications” under Rule IX-1 of the Rules of the Exchange and constitute 

“Contract Rules” Under Rule I-7 of the Rules of the Clearinghouse. Capitalized terms used, but 

not defined herein, have the meanings ascribed to them in the Rules of the Exchange or the Rules 

of the Clearinghouse, as applicable. 

(b) Primary Trading Period 

(i) Immediately after an ANS Contract is listed, a Primary Trading Period will 

commence. During this period, Participants will be able to purchase contracts through the 

Exchange for the price of $1.00 per contract by placing Original Margin on deposit equal to the 

maximum at-risk amount, $1.00 per contract and by specifying the Ticker Symbol and Strike 

Code of the contracts to be purchased. 

(ii) No cancelation of bids during the Primary Trading Period, once accepted by the 

Exchange, is permitted. 

(iii) At the end of the Primary Trading Period, as provided in Rule IX3001(g)(iv) 

below, the Exchange will post (A) the aggregate number of contracts purchased during the 

Primary Trading Period (the “Primary Contract Volume”); (B) the Primary Contract Volume for 

each Strike Code; and (C) the maximum and minimum Final Settlement Price by Strike Code 

based upon the distribution of volume by Strike Code during the Primary Trading Period. 

(iv) For the avoidance of doubt, short positions cannot be obtained during the Primary 

Trading Period. 

(c) Secondary Trading Period 
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(i) For Contracts that are listed after January 1, 2019, a Secondary Trading Period 

will begin as provided in Rule IX-3001(g)(v) and Participant buy and sell orders will be executed 

on the CX System according to Rule IV-7. For the avoidance of doubt, Contracts listed before 

January 1, 2019 will not have a Secondary Trading Period as provided in this Rule IX3001(c). 

(ii) Sales made by a Participant during the Secondary Trading Period will offset a 

Participant’s long positions obtained during the Primary Trading Period on a FIFO basis. Such 

sales do not modify the Primary Contract Volume determined in Rule IX-3001(b)(iii). 

(iii) A Participant may obtain a net short position during the Secondary Trading 

Period. All such net short positions will be margined as provided in Rule IX-3001(l)(iii). Such 

short positions do not modify the Primary Contract Volume determined in Rule IX3001(b)(iii). 

(d) Determination of Qualifying Terminating Condition 

(i) The Exchange is solely responsible for determining the occurrence and location of 

a Qualifying Terminating Condition (“QTC”) relying primarily on Public Advisories published 

on the website www.nhc.noaa.gov and issued by NOAA's National Hurricane Center (“NHC”). 

The Exchange makes no warranties with respect to the accuracy or completeness of the NHC’s 

advisory and in its discretion may use other approved public or private weather reporting sources 

to determine the location of a QTC when doing so is in the best interest of the marketplace. The 

Exchange shall document the information on which it declares a QTC. 

(ii) A QTC will have occurred anytime the NHC or, as necessary, any other approved 

public or private weather reporting source reports that an Atlantic named storm has made landfall 

at a latitude and longitude (“Landfall Location”) listed in Table 1 (an “On-shore QTC”) or will 

no longer be tracked as a named storm or is not forecast by any approved source to have a 

potential Landfall Location listed in Table 1 (an “Off-shore QTC”). 

(iii) If a QTC as defined in Rule IX-3001(d)(ii) above has not occurred for any listed 

contract by November 30th of the respective calendar year, then all such listed and open 

contracts for that calendar year will have their QTCs on the first Business Day after November 

30th on which there is no named storm active in the Atlantic basin. Such a QTC is deemed an 

“Off-shore QTC” for the purposes of Rule IX-3001(e). 

(iv) All QTCs will be published on the Exchange website and will include named 

storm, date and time of the QTC, the Landfall Location, and whether such QTC was an On-shore 

Storm or Off-shore Storm. 

(v) For the avoidance of doubt, the first QTC of any listed contract will result in the 

termination of trading for that contract. 

(e) Final Settlement and Determination of the Impacted Zip Code Area 

(i) If an On-shore QTC occurs for a contract, immediately thereafter, the Exchange 

will determine the Impacted ZIP Code Area by looking up the Landfall Location of the QTC in 

Table 1 and identifying the corresponding Impacted ZIP Code Area. If the Primary Contract 

Volume that is within the Impacted ZIP Code Area is greater than zero, then the Final Settlement
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Price for Strike Codes that are within the Impacted ZIP Code Area shall equal the Primary 

Contract Volume divided by the Primary Contract Volume that is within the Impacted ZIP Code 

Area times $1.00 and rounded down to the nearest $0.01; all other Strike Codes for that contract 

will have a Final Settlement Price of zero dollars, or 

(ii) Alternatively, if either an Off-shore QTC occurs for that contract or the Primary 

Contract Volume within the Impacted ZIP Code Area of an On-shore QTC for that contract is 

zero, then the Final Settlement Price for Strike Code “00000” shall equal the Primary Contract 

Volume divided by the Primary Contract Volume for Strike Code “00000” times $1.00 and 

rounded down to the nearest $0.01; all other Strike Codes will have a Final Settlement Price of 

zero dollars. 

(iii) Final Settlement of all open positions in each ANS Contract will occur after each 

QTC not later than the end of the first Business Day following the QTC. For the avoidance of 

doubt, Final Settlement will result in a payment to Participants equal to the collateral collected 

for each open contract plus, for long open positions, the Final Settlement Price less the original 

purchase price, or for short open positions, the original purchase price less the Final Settlement 

Price. 

(f) Ticker Symbols 

Each ANS Contract will be identified as “WXANSyy@” where “yy” shall correspond to 

the two-digit year and “@” shall be the ANS Contract’s upper-case alphabetical designator, 

which shall be consistent with the alphabetical designator as determined by the World 

Meteorological Association and posted on the NHC’s website. Specifically, the first ANS 

Contract for the 2018 season shall be listed as WXANS18A, the second ANS Contract for the 

season shall be listed as WXANS18B, etc. If more than 21 storms are listed, then “@” shall be 

the lower-case alphabetical designator in sequence (e.g. “WXANS18a” would correspond to the 

“Alpha” storm). 

(g) First Listing Day, Primary and Secondary Trading Periods, Termination of Trading 

(i) The First Listing Day for contracts on the first three named storms in the sequence 

(“A”, “B”, “C”) shall be the first Monday in January that is also a Business Day of each calendar 

year. 

(ii) The First Listing Day for contracts on subsequently named storms in the sequence 

shall be 6:30 PM ET of the next Business Day following the naming by the NHC of a previously 

listed storm, provided that such naming occurs on or before September 30th of the calendar year. 

For example, when NHC announces that the “A” storm has formed, the Exchange shall list a 

contract on the “D” storm at 6:30 PM ET of the following Business Day, and so on, through 

September 30th of the calendar year. 

(iii) After September 30th of the calendar year additional named storms in the 

sequence shall be listed if, and only if, contracts on all listed storms have already been named 

and the NHC has designated an investigative area (so called “INVEST” area) or its equivalent in 

the Atlantic basin. For example, if the Exchange has listed named storms through the letter “L” 
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then, after September 30th, a contract for the “M” storm will only be listed once the NHC has 

named storms through the letter “L” and a subsequent Atlantic basin INVEST area or its 

equivalent has been designated by NHC. Similarly, a contract for the “N” storm will only be 

listed after the “M” storm is named and a new INVEST area or its equivalent is designated. 

(iv) The Primary Trading Period begins upon the listing of each ANS Contract and 

continues until 4:00 PM ET on the First Trading Day that follows the day on which the position 

of the center of the corresponding named storm lies within 500 statute miles of any potential 

Landfall Location listed in Table 1, as calculated by the Exchange based on NHC data.

(v) For Contracts listed before January 1, 2019, there shall only be a Primary Trading 

Period. Termination of Trading for such contracts will be at the end of the Primary Trading 

Period. 

(vi) For Contracts listed after January 1, 2019, both a Primary and Secondary Trading 

Period will be available. Following the conclusion of the Primary Trading Period, the Secondary 

Trading Period will commence on that same day beginning at 6:30 PM ET. 

(vii) The Termination of Trading for each ANS Contract listed after January 1, 2019 

shall be upon a QTC that corresponds with the ANS Contract. 

(h) Trading Days and Trading Hours 

(i) Except as otherwise posted on the Exchange website, regular trading of ANS 

Contracts will be Sunday 6:30 PM ET through Friday 4:00 PM ET. Abbreviated holiday trading 

schedules may apply and will be posted on the Exchange website. 

(ii) Notwithstanding Rule IX-3001(h)(i), the Exchange will provide for continuous 

trading, including Saturdays, Sundays and Holidays, of ANS Contracts whenever any named 

storm is present in the Atlantic basin. The Exchange will post on its website when it is open for 

continuous trading. Any trades that occur after 4:00 PM ET on any calendar day will be reported 

with trades of the following Business Day. 

(i) Valid Strike Codes 

The valid Strike Codes for ANS Contracts are all those listed as part of any Impacted 

ZIP Code Area in Table 1 and Strike Code “00000”, which indicates that the given named storm 

did not make landfall within an Impacted ZIP Code Area or that there are no open positions for 

any Strike Code within the Impacted Zip Code Area for that Contract. Revisions to Table 1 will 

be posted as necessary on the Exchange website. 

(j) Minimum Price Increment 

The minimum trading increment of each ANS Contract is one cent ($0.01). 

(k) Position Accountability Levels 
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The position accountability level shall be 10,000 contracts net short or net long each ANS 

Contract Strike Code. 

(l) Original Margin Requirements 

Original Margin shall be sufficient to cover the maximum possible loss a Participant 

could incur upon liquidation or expiration of a contract. This is calculated to be equal to (i) $1.00 

for positions established in the Primary Trading Period; (ii) the trade entry price for long 

positions established during the Secondary Trading Period; and (iii) the maximum possible Final 

Settlement Price for the respective Strike Code less the trade entry price for short positions 

established during the Secondary Trading Period.