152 Madison Avenue

21st Floor

New York, NY 10016

e: ian@ledgerx.com 

w: ledgerx.com

128565540

September 19, 2017

VIA COMMISSION PORTAL

Christopher J. Kirkpatrick

Secretary, Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581

Re: Commission Regulation 40.6(a) – Rule Certification

LedgerX LLC Submission No. 17-01

Dear Mr. Kirkpatrick:

LedgerX LLC (“LedgerX”) hereby notifies the Commodity Futures Trading Commission (the 

“Commission”), pursuant to Section 5c(c) of the Commodity Exchange Act (the “CEA”) and 

Commission Regulation 40.6(a), that it is certifying the attached amendments to the Operations 

Manual. The attached amendments will become effective on October 4, 2017.

A concise explanation and analysis of the amendments and their compliance with applicable 

provisions of the CEA, including the Core Principles, and the Commission’s Regulations, is 

attached hereto as Appendix A. A marked copy of the amendments is attached hereto as 

Appendix B.

LedgerX certifies that the amendments comply with the CEA and Commission Regulations 

thereunder. LedgerX additionally certifies that it has concurrently posted a copy of this 

submission letter and the attachments hereto on LedgerX’s website at https://ledgerx.com/. 

There were no substantive opposing views to the amendments.

* * * *
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Please contact the undersigned at (917) 677-7598 or ian@ledgerx.com if you have any questions 

or you would otherwise like to discuss this further.

Sincerely,

Ian J. Darrow

General Counsel

LedgerX LLC

Enclosure
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Appendix A

Rule/Section Explanation

Core Principle or other 

CEA Provision, 

Commission Regulation 

and/or Commission 

Staff Letter

Rule 3.9(c)(1), Rule 

7.2

Clarification on mechanics of attaching liens 

to customer collateral deposits

DCO Core Principle D

DCO Core Principle E

DCO Core Principle F

DCO Core Principle G

Rule 12.1 Product specification for USD-BTC 

European-style fully collateralized options

SEF Core Principle 3

SEF Core Principle 6

Rule 12.2 Product specification for USD-BTC dayahead swaps

SEF Core Principle 3

SEF Core Principle 6
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Appendix B

[SEE ATTACHED]
124653279

LedgerX LLC

Rules

April 24,September 19, 2017
TABLE OF CONTENTS

Page

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CHAPTER 1 Definitions ............................................................................................... 1

Rule 1.1 Definitions ...........................................................................................1

Rule 1.2 Rules of Construction ......................................................................13

CHAPTER 2 Exchange Governance ..................................................................... 1314

Rule 2.1 Ownership .....................................................................................1314

Rule 2.2 Board .................................................................................................14

Rule 2.3 Officers ..............................................................................................16

Rule 2.4 Eligibility and Fitness.......................................................................17

Rule 2.5 LedgerPrime......................................................................................19

Rule 2.6 Committees and Subcommittees ....................................................20

Rule 2.7 Regulatory Oversight Committee....................................................21

Rule 2.8 Risk Management Committee..........................................................23

Rule 2.9 Participant Committee......................................................................23

Rule 2.10 Nominating Committee...................................................................24

Rule 2.11 Disciplinary Panel and Appeals Committee .................................25

Rule 2.12 Emergency Rules........................................................................2627

Rule 2.13 Conflicts of Interest ........................................................................29

Rule 2.14 Recordkeeping................................................................................33

Rule 2.15 Information-Sharing Agreements..............................................3334

Rule 2.16 Recordkeeping and Reporting Requirements..........................3435

Rule 2.17 Public Information ..........................................................................36

CHAPTER 3 Participants ........................................................................................... 37

Rule 3.1 Jurisdiction, Applicability of Rules .................................................37

Rule 3.2 Participants – Applications, Agreements, Eligibility Criteria, 

Classifications and Privileges .........................................................38

Rule 3.3 Participant Obligations.....................................................................43

Rule 3.4 Cleared Swaps Customer Account Requirements for FCM 

Participants .......................................................................................52

Rule 3.5 Customer Collateral Accounts Maintained With the Exchange....53

Rule 3.6 Dues, Fees and Expenses Payable by Participants.......................53

Rule 3.7 Recording of Communications........................................................54
TABLE OF CONTENTS

(continued)

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Rule 3.8 Independent Software Vendors .......................................................54

Rule 3.9 Participant Accounts and Cleared Swaps Customer Accounts5556

Rule 3.10 Withdrawal of Participant...........................................................5758

CHAPTER 4 Liquidity Providers................................................................................ 59

Rule 4.1 Application and Agreement .............................................................59

Rule 4.2 Appointment......................................................................................59

Rule 4.3 Benefits..............................................................................................60

Rule 4.4 Obligations ........................................................................................60

CHAPTER 5 Method for Trading Exchange Contracts............................................ 61

Rule 5.1 User IDs .............................................................................................61

Rule 5.2 Order Entry and Audit Trail..............................................................62

Rule 5.3 Order Type.....................................................................................6667

Rule 5.4 Trading Contracts on Behalf of Cleared Swaps Customers .........68

Rule 5.5 Execution Methods.......................................................................6869

Rule 5.6 Trading Hours ...................................................................................69

CHAPTER 6 Clearing and Delivery ....................................................................... 6970

Rule 6.1 Clearance and Substitution .........................................................6970

Rule 6.2 Settlement of Exchange Contracts..............................................7071

Rule 6.3 Deposit Procedures......................................................................7172

Rule 6.4 Withdrawal Procedures....................................................................72

Rule 6.5 Deliveries...........................................................................................73

Rule 6.6 Reconciliation ...............................................................................7374

Rule 6.7 Swap Data Reporting....................................................................7374

CHAPTER 7 Margin ................................................................................................ 7576

Rule 7.1 Full Collateralization of Exchange Contracts Required ............7576

Rule 7.2 Collateral .......................................................................................7576

Rule 7.3 Segregation of Participant Funds....................................................77

Rule 7.4 Concentration Limits....................................................................7778

CHAPTER 8 Business Conduct and Trading Practices ...................................... 7778

Rule 8.1 Scope.............................................................................................7778
TABLE OF CONTENTS

(continued)

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Rule 8.2 Procedures........................................................................................78

Rule 8.3 Prohibited Trading Activity; Prohibitions on Fictitious 

Transactions, Fraudulent Activity and Manipulation.................7879

Rule 8.4 Prohibition on Money Passing, Pre-Arranged, Pre-Negotiated 

and Non-Competitive Trades.......................................................7980

Rule 8.5 Acts Detrimental to the Welfare or Reputation of the Exchange 

Prohibited......................................................................................8081

Rule 8.6 Misuse of the Platform .................................................................8081

Rule 8.7 Supervision; Information Sharing ...............................................8081

Rule 8.8 Business Conduct ............................................................................81

Rule 8.9 Trading Practices..........................................................................8182

Rule 8.10 Customer Order Priority.............................................................8384

Rule 8.11 Trading Against Customer Orders ............................................8485

Rule 8.12 Prohibition on Withholding of Customer Orders .........................85

Rule 8.13 Execution Priority .......................................................................8586

Rule 8.14 Crossing Orders..........................................................................8586

Rule 8.15 Position Limits ............................................................................8586

Rule 8.16 Position Accountability Levels..................................................8788

Rule 8.17 Aggregation of Positions ...........................................................8889

Rule 8.18 Large Trader Reporting..............................................................8990

Rule 8.19 Compliance .................................................................................9091

CHAPTER 9 Discipline and Enforcement............................................................. 9192

Rule 9.1 General ..........................................................................................9192

Rule 9.2 Investigations................................................................................9495

Rule 9.3 Disciplinary Panel.............................................................................96

Rule 9.4 Notice of Charges .........................................................................9798

Rule 9.5 Contesting and Appeals...................................................................98

Rule 9.6 Settlements ...............................................................................101102

Rule 9.7 Notice of Decision.....................................................................102103

Rule 9.8 Penalties..........................................................................................103

Rule 9.9 Summary Suspension ....................................................................104
TABLE OF CONTENTS

(continued)

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Rule 9.10 Reporting Violations to the Commission..............................106107

CHAPTER 10 Arbitration.................................................................................... 106107

Rule 10.1 In General ................................................................................106107

Rule 10.2 Forum and Arbitration Rules .................................................108109

Rule 10.3 Initiating an Arbitration Claim................................................108109

Rule 10.4 Penalties..................................................................................108109

CHAPTER 11 Miscellaneous ................................................................................... 109

Rule 11.1 Adjustments Necessitated by Material Changes in the 

Underlying.......................................................................................109

Rule 11.2 Prohibition on Trading by Exchange Personnel; Misuse of 

Material, Non-Public Information.............................................109110

Rule 11.3 Property Rights.......................................................................110111

Rule 11.4 Signatures .....................................................................................113

Rule 11.5 Governing Law..............................................................................113

Rule 11.6 Legal Proceedings..................................................................113114

Rule 11.7 LIMITATION OF LIABILITY; NO WARRANTIES.....................114115

Rule 11.8 Error Trade Policy.........................................................................119

Rule 11.9 Exchange Contacts.......................................................................124

Rule 11.10 Reasonability Levels ............................................................124125

Rule 11.11 No Cancellation Ranges.......................................................124125

Rule 11.12 Amendments to the Rules....................................................125126

CHAPTER 12 Exchange Contract Specifications ............................................ 125127

Rule 12.1 USDBTC Options ..........................................................................127

Rule 12.2 Day-Ahead USD/BTC Swaps........................................................130
123980801

Rules of LedgerX LLC

Introduction

The Commodity Exchange Act requires that LedgerX LLC comply with the core principles 

set forth in the Commodity Exchange Act, as amended, and the regulations, rules and 

orders of the Commodity Futures Trading Commission, and establish, monitor and 

enforce its Rules relating to its business as a Swap Execution Facility and Derivatives 

Clearing Organization. The following Rules of LedgerX LLC pertain to the trading and 

clearing of Exchange Contracts on LedgerX LLC and the rights and Obligations of 

Participants in connection with such activity.

CHAPTER 1 Definitions

Rule 1.1 Definitions

As used in these Rules, the following terms have the following respective meanings:

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

common control with another Person.

Appeals Committee: A committee of the Board composed of Directors pursuant 

to Rule 2.11, and that acts in an adjudicative role and fulfills various adjudicative 

responsibilities and duties as described in Chapter 9.

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

ordinance of any government, governmental or self-regulatory authority applicable 

to such Person, including without limitation the CEA and CFTC Regulations and 

any laws and regulations relating to economic or trade sanctions.

As soon as technologically practicable: As soon as possible, taking into 

consideration the prevalence, implementation and use of technology by 

comparable market participants.

Authorized Representative: With respect to any Participant that is an entity, an 

officer of such entity who is responsible for supervising all activities of the 

Participant, its Authorized User(s) and its employees relating to Transactions, and 
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for providing information regarding the Participant to the Exchange upon request 

of the Exchange.

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

Participant and who is authorized by the Participant to trade on the Exchange on 

behalf of the Participant, and in the case of FCM Participants, intermediate Orders 

and clear Transactions on behalf of Cleared Swaps Customers, provided that the 

Participant maintains supervisory authority over such individual’s trading activities, 

but Authorized Users shall not include (i) employees or agents of Cleared Swaps 

Customers or (ii) Cleared Swap Customers that are natural persons.

Board: The Board of Directors of the Exchange.

Bitcoin: A Digital Currency.

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

CEA: The Commodity Exchange Act, as amended.

CFTC Regulations: The regulations of the CFTC, as in effect from time to time, 

including any Commission-issued orders or interpretive or no-action letters.

Chief Compliance Officer: The individual appointed by the Board to serve as the 

Exchange’s chief compliance officer.

Chief Executive Officer: The individual appointed by the Board to serve as the 

Exchange’s chief executive officer.

Chief Risk Officer: The individual appointed by the Board to serve as the 

Exchange’s chief risk officer.

Cleared Swaps Customer: As defined in §22.1 of CFTC Regulations.

Cleared Swaps Customer Account: As defined in §22.1 of CFTC Regulations 

and, for purposes of these Rules, shall include an account established and 

maintained for a Cleared Swaps Customer by the Exchange on the Exchange’s 

books and records to which a financial asset is or may be credited in accordance 

with these Rules and such other procedures as the Exchange may implement from 

time to time.
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Collateral Account: With respect to: (1) Participants, including an FCM 

Participant’s Cleared Swaps Proprietary Accounts, each Participant’s and FCM 

Participant’s Participant Account and an account opened and maintained by the 

Exchange at a Settlement Bank (a) to which a Participant or FCM Participant 

transfers funds and (b) from which the Exchange is authorized to debit fees and 

margin or option premium, and debit or credit settlement payments, as applicable; 

and (2) FCM Participants, each FCM Participant’s Cleared Swaps Customer 

Account and an account opened and maintained by the Exchange at a Settlement 

Bank (a) to which an FCM Participant transfers Cleared Swaps Customer 

Collateral and (b) from which the Exchange is authorized to debit fees and margin 

or option premium, and debit or credit settlement payments, as applicable.

Cleared Swaps Customer Collateral: As defined in §22.1 of CFTC Regulations.

Cleared Swaps Proprietary Account: As defined in §22.1 of CFTC Regulations.

Clearing Privileges: Any right granted by the Exchange to a Participant to clear 

Exchange Contracts.

Commission or CFTC: The U.S. Commodity Futures Trading Commission.

Compliance Department: The department, reporting to the Chief Compliance 

Officer, that is responsible for compliance, investigations and disciplinary 

proceedings.

Critical Security Parameters or CSPs: Exchange-assigned private 

authentication tokens such as automated passwords and cryptographic keys used 

to access the Platform together with the User ID for security purposes.

Customer: (i) A Participant that has authorized an Executing Participant to 

execute Orders on behalf of such Participant on or subject to the Rules of the 

Exchange, provided that such Participant shall not be deemed to be a Customer 

with respect to the clearing or settlement of its Transactions or its margin or option 

premium associated with such Transaction; (ii) a Cleared Swaps Customer; or (iii) 

both an Executing Participant’s Customer and a Cleared Swaps Customer, in each 

case as the context requires.
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Customer ID: The identifying code an FCM Participant assigns to a Cleared 

Swaps Customer and includes in each Cleared Swaps Customer Order to identify 

the individual customer on whose behalf the FCM Participant is exercising Trading 

Privileges and/or Clearing Privileges.

Customer Type Indicator Code or CTI: A symbol that indicates the buying and 

selling customer types, as required by CFTC Regulation 1.35(g).

Derivatives Clearing Organization or DCO: As set forth in Section 1a(15) of the 

CEA and registered with the Commission pursuant to Section 5b of the CEA and in 

accordance with the provisions of Part 39 of CFTC Regulations.

Designated Contract Market: A board of trade designated by the CFTC as a 

contract market under Section 5 of the CEA and in accordance with the provisions 

of Part 38 of CFTC Regulations.

Digital Currency: A medium of exchange stored and transferred electronically, 

including, but not limited to, Bitcoin.

Director: A member of the Board.

Disciplinary Action: Any inquiry, investigation, disciplinary proceeding, appeal 

from a disciplinary proceeding, summary imposition of fines, summary suspension 

or other summary action.

Disciplinary Panel: A panel appointed by the Regulatory Oversight Committee 

pursuant to Rule 2.11 to act in an adjudicative role and fulfill various adjudicative 

responsibilities and duties as described in Chapter 9.

Discretionary Order: As defined in Rule 8.10.

Eligible Contract Participant or ECP: As set forth in Section 1a(18) of the CEA 

and as further defined in CFTC Regulation 1.3(m).

Emergency: Any occurrence or circumstance which, in the opinion of the Board, 

the Chief Executive Officer, the Chief Compliance Officer, or a designee duly 

authorized to issue such an opinion, requires immediate action, and which 

threatens, or may threaten, such things as the fair and orderly trading in, the 
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liquidation, settlement, delivery, or the integrity of, any Exchange Contract, or the 

timely collection and payment of funds in connection with clearing and settlement 

by the Exchange, including without limitation:

a any circumstance that may materially affect the performance of any 

Exchange Contract, including without limitation failure of the payment 

system, the bankruptcy or insolvency of any Participant, or any actual, 

attempted or threatened theft or forgery of, or other interference with, the 

Underlying or delivery or transfer thereof;

b any action taken by any United States or foreign regulatory, self-regulatory, 

judicial, arbitral, or governmental (whether national, state or municipal) or 

quasi-governmental authority, or any agency, department, instrumentality, 

or subdivision thereof; or other Person exercising, or entitled to exercise 

any administrative, executive, judicial, legislative, police, regulatory or 

taxing authority or power; or any other entity registered with the 

Commission, board of trade, market or facility which may have a direct 

impact on trading on the Exchange or clearing and settlement of any 

Exchange Contract;

c any actual, attempted or threatened corner, squeeze, congestion, or undue 

concentration of positions in any Exchange Contract;

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

functioning of the Exchange; or

e any manipulative or attempted manipulative activity.

Emergency Action: An action deemed to be necessary or appropriate to respond 

to an Emergency and taken pursuant to Rule 2.12.

Emergency Rules: Procedures or rules adopted in response to an Emergency 

pursuant to Rule 2.12.

Exchange: The LedgerX LLC Swap Execution Facility and Derivatives Clearing 

Organization.
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Exchange Contract: Any derivative contract, including an option contract or swap 

agreement, based on one or more Underlying and listed for trading on the 

Exchange or subject to the Rules.

Exchange Contract Specifications: The terms and conditions of an Exchange 

Contract as initially published in the Rules and posted on the Website and 

thereafter as published in the Rules, posted on the Website and sent in Participant 

Notices.

Exchange Official: A Director, Officer, committee member, or such other 

individual as the Board may designate from time to time.

Exchange Personnel: An Exchange employee, consultant of the Exchange, 

contractor of the Exchange or agent of the Exchange.

Exchange Pre-Trade Telecommunication Systems: The Exchange’s 

designated telecommunications systems (e.g., telephone and instant messaging) 

used for pre-trade communications permitted in accordance with these Rules, 

access to which is provided to Participants by the Exchange.

Exchange Representative: Any Exchange Official, Exchange employee, 

consultant of the Exchange, contractor of the Exchange or agent of the Exchange.

Executing Participant: A Participant that has executed a Participant Application 

and Agreement and is authorized to enter into Orders and Transactions for its own 

account and is authorized to execute Orders as agent for other Participants and is 

registered with the Commission as a futures commission merchant, introducing 

broker, commodity pool operator or commodity trading advisor, or is exempt from 

registration as such.

FCM Participant: A Participant that is registered with the Commission as a 

Futures Commission Merchant and as a swap firm and to whom the Exchange has 

granted Trading Privileges and Clearing Privileges with respect to its Cleared 

Swaps Proprietary Account and Cleared Swaps Customers.

Futures Commission Merchant or FCM: As defined in Section 1a(28) of the 

CEA and in CFTC Regulation 1.3(p).
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Independent Software Vendor or ISV: A Person that makes available to 

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

applications, aggregation, or a combination of the foregoing, but that does not 

provide Participants the ability to effect Swaps on such system or platform.

LedgerPrime: As defined in Rule 2.5.

Legal Entity Identifier or LEI: The identifying code that is required of each 

counterparty to any swap subject to the CFTC’s jurisdiction and that is used in all 

recordkeeping and all swap data reporting pursuant to Part 45 of CFTC 

Regulations, including any predecessor identifiers and including the Global 

Markets Entity Identifier or GMEI, which is the current identifier required by the 

CFTC until the establishment of a global Legal Entity Identifier system. LEIs must 

be renewed on an annual basis.

Life Cycle Event: Any event that would result in either a change to a primary 

economic term of a Swap or to any primary economic terms data previously 

reported to a Swap Data Repository in connection with a Swap. Examples of such 

events include, without limitation, a counterparty change resulting from an 

assignment or novation; a partial or full termination of the Swap; a change to the 

end date for the Swap; a change in the cash flows or rates originally reported; 

availability of a LEI for a Swap counterparty previously identified by name or by 

some other identifier; or a corporate action affecting a security or securities on 

which the swap is based (e.g., a merger, dividend, stock split, or bankruptcy). Life 

Cycle Event data means all of the data elements necessary to fully report any Life 

Cycle Event. 

Liquidity Provider: As defined in Chapter 4.

Liquidity Provider Agreement: An agreement between the Exchange and a 

Liquidity Provider that must be executed for a Participant to act as a Liquidity 

Provider.
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Market Participant Director: A Director who has been found by the Board to be 

an authorized representative of a Participant and suitable to be a Director pursuant 

to Section 5b(c)(2)(Q) of the CEA. 

Matching Engine: The set of algorithms through which Orders are matched.

Material Relationship: As set forth in Rule 2.2F.

NFA: The National Futures Association.

Nominating Committee: The committee of the Board constituted in accordance 

with Rule 2.10.

Notice of Charges: As set forth in Rule 9.4.

Novation: The process by which a party to a Swap transfers all of its rights, 

liabilities, duties and obligations under the Swap to a new legal party other than the 

counterparty to the Swap. The transferee accepts all of the transferor's rights, 

liabilities, duties and obligations under the swap. A Novation is valid as long as the 

transferor and the remaining party to the Swap are given notice, and the transferor, 

transferee and remaining party to the Swap consent to the transfer.

Obligation: Any Rule, order or procedure issued by the Exchange, including a 

Participant Notice or other requirement implemented by the Exchange under the 

Rules (including each term and condition of an Exchange Contract), as well as any

contractual obligations between, on the one hand, a Person, and on the other 

hand, the Exchange, and any Order or Transaction entered into by a Participant or 

its Authorized User.

OFAC: The Office of Foreign Assets Control of the U.S. Department of the 

Treasury.

Officer: An individual as set forth in Rule 2.3.

Operating Agreement: The Limited Liability Company Operating Agreement of 

the Exchange, as it may be modified from time to time.

Order: Either a bid or an offer for an Exchange Contract entered on the Platform or 

subject to the Rules.
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Participant: A Person that has executed the Participant Application and 

Agreement and is authorized to enter into Orders and Transactions for its own 

account. As used in the Rules, the term Participant includes an FCM Participant, 

an Executing Participant and a Liquidity Provider unless the context requires 

otherwise. A Participant must be an ECP to be eligible to transact Swaps on the 

Exchange’s Swap Execution Facility.

Participant Account: An account established and maintained for a Participant by 

the Exchange on its books and records to which a financial asset is or may be 

credited in accordance with these Rules and such other procedures as the 

Exchange may implement from time to time.

Participant Application and Agreement: An application submitted by an 

applicant for Participant status and an agreement between the Exchange and a 

Participant that must be executed for a Participant to gain access to the Exchange 

for the entry and execution of Orders and/or clearance of Transactions.

Participant Committee: The committee of the Board constituted in accordance 

with Rule 2.9.

Participant Notice: A communication sent by or on behalf of the Exchange to all 

Participants in accordance with Rule 2.17.

Participant Portal: The vehicle through which Participants send and receive 

messages to or from the Exchange and other Participants, update account and 

contact information, and submit deposit and withdrawal notifications.

Permitted Transaction: Any transaction involving a Swap that is not subject to 

the trade execution requirement in Section 2(h)(8) of the CEA.

Person: As defined in Section 1a(38) of the CEA and in CFTC Regulation 1.3(u).

Platform: The electronic trading facility operated by the Exchange to provide 

Participants with the ability to execute Orders and Transactions from the 

interaction of multiple bids and multiple offers within a pre-determined, 

non-discretionary automated trade matching and execution algorithm.
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Position Limit: The maximum number of positions, either net long or net short, in 

one Series or a combination of various Series with the same Underlying that may 

be held or controlled by a Participant as prescribed by the Exchange or the 

Commission.

Proprietary Information: As set forth in Rule 11.3A.

Public Director: A Director who has been found by the Board to have no Material 

Relationship with the Exchange in accordance with Rule 2.2F.

Public dissemination and publicly disseminate: To publish and make available 

Swap transaction and pricing data in a non-discriminatory manner, through the 

Internet or other electronic data feed that is widely published (in a manner that is 

freely available and readily accessible to the public) and in machine-readable 

electronic format.

Regulatory Agency: Any government body, including the Commission, and any 

organization, whether domestic or foreign, granted authority under statutory or 

regulatory provisions to regulate its own activities and the activities of its members, 

and includes LedgerX LLC, any other clearing organization or contract market, and 

the NFA.

Regulatory Data: Trade data and related information or other market or 

proprietary data that a Participant submits to the Exchange for the purpose of 

fulfilling regulatory obligations.

Regulatory Oversight Committee: The committee of the Board constituted in 

accordance with Rule 2.7.

Required Swap Continuation Data: As set forth in CFTC Regulation 45.1.

Required Swap Creation Data: As set forth in CFTC Regulation 45.1.

Required Transaction: Any transaction involving a Swap that is subject to the 

trade execution requirement in Section 2(h)(8) of the CEA.

Regulatory Swap Data: Includes (i) Swap Transaction and Pricing Data, (ii) 

Required Swap Creation Data and (iii) Required Swap Continuation Data.
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Reporting Counterparty: As set forth in Part 45 of CFTC Regulations and means

the Participant that is designated as the Reporting Counterparty pursuant to Rule 

5.1.

Respondent: Any Person subject to a Disciplinary Action and such Person’s legal

counsel or representative.

Risk Management Committee: The committee appointed by the Board and 

constituted in accordance with Rule 2.8.

Rules: These rules of the Exchange, as in effect and as may be amended from 

time to time.

Self-Regulatory Organization: As set forth in CFTC Regulation 1.3(ee) and 

includes a DCO.

Series: All Exchange Contracts having identical terms, including Settlement Date 

and the value or range of values of an Underlying or category of asset class.

Settlement Bank: A depository approved by the Exchange as an acceptable 

location for depositing Participant funds or Cleared Swaps Customer Collateral, as

applicable.

Settlement Bank Business Day: A day a Settlement Bank is open for business.

Settlement Date: A Business Day on which: (1) a Participant properly tenders to 

the Exchange an exercise notice, resulting in the delivery of the Underlying and 

payment on the next Business Day following the exercise; or (2) the Exchange 

automatically closes out and settles a Participant’s Exchange Contracts that offset 

one another. An Exchange Contract that is an option and that has not been 

exercised on or before the last trading day will expire with no value.

Swap: An Exchange Contract that is a swap as defined in Section 1a(47) of the 

CEA and as further defined by CFTC Regulation 1.3(xxx), and shall include 

Exchange Contracts that are options as set forth in the Exchange Contract 

Specifications.
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Swap Data Repository or SDR: As set forth in Section 1a(48) of the CEA and 

registered with the Commission pursuant to Section 21 of the CEA and in 

accordance with Part 49 of CFTC Regulations.

Swap Execution Facility or SEF: As set forth in Section 1a(50) of the CEA and 

registered with the Commission pursuant to Section 5h of the CEA and in 

accordance with the provisions of Part 37 of CFTC Regulations.

Swap Transaction and Pricing Data: Any data required to be reported under 

Part 43 of CFTC Regulations.

Trading Hours: The hours during which Orders may be entered on the Exchange 

or subject to the Rules, as set forth in Rule 5.6, and as may be revised from time to 

time, by the Exchange as disclosed on the Website and through Participant 

Notices.

Trading Privilege: Any right granted by the Exchange to a Participant to transmit 

Orders for an Exchange Contract.

Transaction: Any purchase or sale of any Exchange Contract made on the 

Exchange or pursuant to the Rules.

UCC: The Uniform Commercial Code as in effect in the State of New York.

Underlying: The index, rate, risk, measure, instrument, differential, indicator, 

value, contingency, commodity, occurrence, or extent of an occurrence that shall 

determine the amount payable or deliverable under an Exchange Contract.

Unique Swap Identifier or USI: The unique swap identifier, which shall be 

created, transmitted, and used for each swap executed on LedgerX as provided in 

CFTC Regulation 45.5.

User ID: The unique identifier registered with the Exchange that the Exchange 

assigns to an Authorized User, and which is included on each Order to enable the 

Exchange to identify the Person entering such Orders, and, with respect to an 

Order entered by an Executing Participant on behalf of a Customer, the Customer.
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Website: The Exchange home page or a website to which the Exchange home 

page has a link.

Rule 1.2 Rules of Construction

For purposes of these Rules, the following rules of construction shall apply:

1. Words conveying a singular number include the plural number, 

where the context permits, and vice versa.

2. References to any Regulatory Agency include any successor 

Regulatory Agency.

3. If, for any reason, a Rule is found or determined to be invalid or 

unenforceable by a court of law, the Commission or another 

governmental or quasi-governmental agency with supervisory 

authority, such Rule shall be considered severed from the Rules and 

all other Rules shall remain in full force and effect.

4. All references to time are to the local time in New York, New York 

unless expressly provided otherwise.

5. All terms defined in the UCC and not otherwise defined herein shall 

have the respective meanings accorded to them therein.

6. In the event of a conflict between these Rules and a non-disclosure 

agreement between the Exchange or an Affiliate of the Exchange 

and a Participant or Customer, these Rules shall govern.

7. In the event of a conflict between these Rules and the CEA or CFTC 

Regulations, the applicable provision of the CEA and/or CFTC 

Regulation shall govern.
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CHAPTER 2 Exchange Governance

Rule 2.1 Ownership

The Exchange is a Delaware limited liability company. The management and operation of 

the Exchange is governed by the Operating Agreement and the Rules. Participant status 

does not confer any equity interest or voting right in the Exchange.

Rule 2.2 Board

A. The Board shall, subject to applicable provisions in the Operating 

Agreement:

1. Be the governing body of the Exchange;

2. Be constituted, and shall constitute its committees or 

subcommittees, to permit consideration of the views of market 

participants;

3. Have charge and control of all property of the Exchange;

4. Provide, acquire and maintain adequate Exchange offices and 

facilities;

5. Fix, determine and levy all Participant or other fees when necessary;

6. Determine the Exchange Contracts and the Exchange Contract 

Specifications;

7. Adopt, amend or repeal any Rules, with the input of Officers and 

committees or subcommittees;

8. Have the power to act in Emergencies as detailed in Rule 2.12; and

9. Have the power to call for review, and to affirm, modify, suspend or 

overrule, any and all decisions and actions of the Officers, 

committees or subcommittees related to the day-to-day business 

operations of the Exchange.

B. Any authority or discretion by the Rules vested in any Officer or delegated to 

any committee or subcommittee shall not be construed to deprive the Board 
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of such authority or discretion and, in the event of a conflict, the 

determination of the matter by the Board shall prevail.

C. A majority of the Directors serving on the Board, including at least one 

Public Director, shall constitute a quorum for the transaction of business of 

the Board. At all times when the Board is conducting business at a meeting 

of the Board, a quorum of the Board must be present at such meeting, and 

the Board may act only by the decision of a majority of the Directors 

constituting a quorum of the Board by vote at a meeting, by unanimous 

written consent without a meeting, or as otherwise set forth in the Operating 

Agreement.

D. The Board shall comprise the number of Directors set forth in the Operating 

Agreement, which shall include Public Directors and Market Participant 

Directors in at least the number or percentage required under the CEA or 

CFTC Regulations, but in any event, (i) no less than two Directors shall be 

Public Directors and (ii) no less than two Directors shall be Market 

Participant Directors. Each Director (including Public Directors and Market 

Participant Directors) shall be appointed in accordance with the Operating 

Agreement, and shall serve until his or her successor is duly appointed, or 

until his or her earlier resignation or removal, with or without cause.

E. Each Director is entitled to indemnification pursuant to the Operating 

Agreement with respect to matters relating to the Exchange.

F. To qualify as a Public Director, an individual must be found, by the Board 

and on the record, to have no Material Relationship, as defined below, with 

the Exchange. The Board must make such finding at the time the Public 

Director is elected and as often as necessary in light of all circumstances 

relevant to such Public Director, but in no case less than annually. A 

Material Relationship is one that reasonably could affect the independent 

judgment or decision-making 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 
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with the Exchange if any of the following circumstances exist or have 

existed within the past year:

1. such Director is or was an Officer or an employee of the Exchange, 

or an officer or an employee of an Affiliate of the Exchange; such 

Director is or was a Participant; or

2. such Director is or was a director, an officer, or an employee of a 

Participant.

G. If any of the immediate family of a Director, i.e., spouse, parents, children, 

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

person residing in the home of the Director or that of his or her immediate 

family have a Material Relationship as defined above, then that Material 

Relationship is deemed to apply to such Director.

H. The Board shall have procedures, as may be adopted by the Board from 

time to time, to remove a Director where the conduct of such Director is 

likely to be prejudicial to the sound and prudent management of the 

Exchange.

I. The Board shall review its performance and that of its individual Directors 

annually and shall consider periodically using external facilitators for such 

review.

Rule 2.3 Officers

A. The Board shall appoint a Chief Executive Officer, Chief Compliance 

Officer, Chief Risk Officer and such other officers of the Exchange as it may 

deem necessary or appropriate from time to time.

B. The Chief Compliance Officer must:

1. have the background and skills appropriate for fulfilling the 

responsibilities of the position;

2. be an individual who would not be disqualified from registration 

under Section 8a(2) or 8a(3) of the CEA;
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3. report to the Board or, in the event that the Board delegates its 

authority to the Chief Executive Officer, to the Chief Executive 

Officer; and

4. fulfill his or her duties as required pursuant to CFTC Regulations, 

including, but not limited to, the preparation and submission of an 

annual compliance report as described in CFTC Regulation 

39.10(c)(3), and assist the Regulatory Oversight Committee in its 

preparation of an annual report.

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

Exchange or of any of its Affiliates, subject to disclosure and resolution of 

conflicts of interest. Notwithstanding the foregoing, the Chief Compliance 

Officer and the Chief Risk Officer must be two different individuals.

D. 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 any 

limitations set forth in the Operating Agreement.

E. Each Officer is entitled to indemnification pursuant to the Operating 

Agreement with respect to matters relating to the Exchange.

Rule 2.4 Eligibility and Fitness

A. An individual may not serve as a Director or Officer, or serve on a 

committee or subcommittee established by the Board or hold a 10 percent 

or more ownership interest in the Exchange, if the individual:

1. within the prior three years has been found, by a final decision of a 

court of competent jurisdiction, an administrative law judge, the 

CFTC, or any Self-Regulatory Organization, to have committed a 

disciplinary offense;

2. within the prior three 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;
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3. is currently suspended from trading on a Designated Contract 

Market or a Swap Execution Facility, is suspended or expelled from 

membership in a Self-Regulatory Organization, is serving any 

sentence of probation, or owes any portion of a fine or penalty 

imposed pursuant to either:

a a finding by final decision of a court of competent jurisdiction, 

an administrative law judge, the CFTC or any Self-Regulatory 

Organization that such person committed a disciplinary 

offense; 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;

4. is currently subject to an agreement with the CFTC or 

Self-Regulatory Organization not to apply for registration with the 

CFTC or for membership in the Self-Regulatory Organization;

5. is currently, or within the past three years has been, subject to a 

revocation or suspension of registration by the CFTC, or has been 

convicted within the past three years of any of the felonies listed in 

Section 8a(2)(D)(ii) through (iv) of the CEA;

6. is currently subject to a denial, suspension or disqualification from 

serving on a disciplinary panel, 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

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

the CEA.

For purposes of this Rule 2.4A, 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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B. Any Director, Officer, member of a committee established by the Board and 

any individual nominated to serve in any such role, shall immediately notify 

the Chief Executive Officer if such individual is subject to one or more of the 

criteria in Rule 2.4A. Prior to nomination to the Board, each individual shall 

certify he or she is not disqualified pursuant to Rule 2.4A. Upon 

appointment, each Director, Officer, and member of a committee shall 

provide to the Exchange, where applicable, changes in registration 

information within 30 days and certification of compliance accordingly. The 

Exchange shall verify information supporting Board compliance with 

eligibility criteria.

C. To serve as a Director, 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.

D. A Director or Officer must meet any qualifications set forth from time to time 

in the Operating Agreement.

E. An individual may not serve on any Disciplinary Panel, arbitration panel, or 

the Appeals Committee during any proceeding affecting or concerning such 

individual, to be determined in a reasonable manner by the Exchange’s 

General Counsel. 

Rule 2.5 LedgerPrime

A. The Exchange’s parent company has established LedgerPrime LLC 

(“LedgerPrime”), a wholly-owned subsidiary of the Exchange’s parent 

company, to make markets in Exchange products (collectively, the 

“LedgerPrime Contracts”) cleared by the Exchange and to engage in 

hedging activities through various offsetting transactions. Position and 

counterparty limits, as well as parameters on LedgerPrime hedging, will be 

established by the Exchange. 
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B. LedgerPrime does not receive any preferential pricing from the Exchange 

and does not have an inherent advantage over any other Participant with 

respect to latency or Order execution speed.

C. LedgerPrime traders are subject to the same access criteria and must abide 

by the same rules as all other Participants.

Rule 2.6 Committees and Subcommittees

A. The Board may create, appoint Directors to serve on, and delegate powers 

to, committees and subcommittees. There shall be a Regulatory Oversight 

Committee, a Risk Management Committee, a Participant Committee, a 

Nominating Committee, a Disciplinary Panel, and an Appeals Committee. 

The Board shall designate the chairperson of each such committee, except 

that the chairperson of the Board shall designate the chairperson of the 

Appeals Committee and the Regulatory Oversight Committee shall 

designate the chairperson of the Disciplinary Panel.

B. Each committee and subcommittee shall assist in the supervision, 

management and control of the affairs of the Exchange within its particular 

area of responsibility, subject to the Operating Agreement and the authority

of the Board.

C. Subject to the authority of the Board, each committee and subcommittee 

shall determine the manner and form in which its proceedings shall be 

conducted. A majority of the members serving on a committee or 

subcommittee, including at least one Public Director, shall constitute a 

quorum for the transaction of business of a committee or subcommittee. 

Each committee and subcommittee may act only by the decision of a 

quorum, by vote at a meeting or by unanimous written consent without a

meeting. The Board has the authority to overrule the decisions of any 

committee or subcommittee.
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Rule 2.7 Regulatory Oversight Committee

A. The Regulatory Oversight Committee shall be a standing committee of the 

Board consisting of only Public Directors, as appointed from time to time. 

No less than two Public Directors shall serve on the Regulatory Oversight 

Committee.

B. Each member of the Regulatory Oversight Committee shall serve for a term 

of one calendar year from the date of his or her appointment or for the 

remainder of his or her term as a Public Director, and until the due 

appointment of his or her successor, or until his or her earlier resignation or 

removal, with or without cause, as a member of the Regulatory Oversight 

Committee or as a Public Director. A member of the Regulatory Oversight 

Committee may serve for multiple terms.

C. The Regulatory Oversight Committee shall oversee the Exchange’s 

regulatory program on behalf of the Board. The Board shall delegate 

sufficient authority, dedicate sufficient resources, and allow sufficient time 

for the Regulatory Oversight Committee to fulfill its mandate. The 

Regulatory Oversight Committee shall make such recommendations to the 

Board that will, in its judgment, best promote the interests of the Exchange. 

The Regulatory Oversight Committee shall also have such other powers

and perform such other duties as set forth in the Rules and as the Board 

may delegate to it from time to time.

D. The Regulatory Oversight Committee shall appoint individuals to the 

Disciplinary Panel in accordance with these Rules, Applicable Law and the 

composition requirements of the Disciplinary Panel. The Committee shall 

appoint at least one person who would not be disqualified from serving as a 

Public Director, and who shall serve as the Chairperson of the Disciplinary 

Panel.

E. The Regulatory Oversight Committee shall prepare an annual report that 

assesses the Exchange’s self-regulatory program for the Board and the 

CFTC. The annual report sets forth the regulatory program’s expenses, 
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describes its staffing and structure, catalogues disciplinary actions taken 

during the year, and reviews the performance of the Disciplinary Panel. 

Such report may be prepared in conjunction with the Chief Compliance 

Officer’s annual compliance report as required pursuant to CFTC 

Regulation 39.10(c)(3).

F. Without limiting the generality of the foregoing, the Regulatory Oversight 

Committee shall have the authority to:

1. monitor the regulatory program of the Exchange for sufficiency, 

effectiveness, and independence;

2. oversee all facets of the regulatory program, including trade practice 

and market surveillance; audits, examinations, and other regulatory 

responsibilities with respect to Participants (including ensuring 

compliance with financial integrity, financial reporting, sales practice, 

recordkeeping, and other requirements); and the conduct of 

investigations;

3. review the size and allocation of the regulatory budget and 

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

regulatory personnel;

4. supervise the Chief Compliance Officer of the Exchange, who will 

report directly to the Regulatory Oversight Committee and to the 

Board or, if the Board delegates such authority, to the Chief 

Executive Officer;

5. recommend changes that would ensure fair, vigorous, and effective 

regulation; and

6. review all regulatory proposals prior to implementation and advise 

the Board as to whether and how such changes may impact 

regulation.
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Rule 2.8 Risk Management Committee

A. The Risk Management Committee shall be a standing committee consisting 

of no fewer than one Public Director, one Market Participant Director, and 

one Exchange Officer. The Risk Management Committee also may allow 

the participation of other market participants.

B. Each member of the Risk Management Committee shall serve for a term of 

one calendar year from the date of his or her appointment or for the 

remainder of his or her term as a Public Director, as applicable, and until the 

due appointment of his or her successor, or until his or her earlier 

resignation or removal, with or without cause, as a member of the Risk 

Management Committee or as a Public Director. A member of the Risk 

Management Committee may serve for multiple terms.

C. The Risk Management Committee shall oversee the Exchange’s risk 

management program. The Board shall delegate sufficient authority, 

dedicate sufficient resources, and allow sufficient time for the Risk 

Management Committee to fulfill its mandate. The Risk Management 

Committee shall make such recommendations to the Board that will, in its 

judgment, best promote the interests of the Exchange. The Risk 

Management Committee shall also have such other powers and perform 

such other duties as set forth in the Rules and as the Board may delegate to 

it from time to time.

Rule 2.9 Participant Committee

A. The Participant Committee shall be a standing committee of the Board 

consisting of at least 35 percent Public Directors, as appointed from time to 

time. No less than two Public Directors shall serve on the Participant 

Committee.

B. Each member of the Participant Committee shall serve for a term of one 

calendar year from the date of his or her appointment or for the remainder of 

his or her term as a Public Director, as applicable, and until the due 
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appointment of his or her successor, or until his or her earlier resignation or 

removal, with or without cause, as a member of the Participant Committee 

or as a Public Director. A member of the Participant Committee may serve 

for multiple terms.

C. The Participant Committee shall determine the standards and requirements 

for initial and continuing membership or participation eligibility; review 

appeals of Exchange staff denials of Participant, Executing Participant and 

Liquidity Provider applications; and approve measures that would result in 

different categories or classes of Exchange membership. In reviewing staff 

denials, the Participant Committee shall not uphold any such Exchange 

staff denial if the relevant application satisfies the standards and 

requirements that the Participant Committee sets forth. The 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.

Rule 2.10 Nominating Committee

A. The Nominating Committee shall be a standing committee of the Board 

consisting of at least 51 percent Public Directors, as appointed from time to 

time. No less than two Public Directors shall serve on the Nominating 

Committee.

B. Each member of the Nominating Committee shall serve for a term of one 

calendar year from the date of his or her appointment or for the remainder of 

his or her term as a Public Director, as applicable, and until the due 

appointment of his or her successor, or until his or her earlier resignation or 

removal, with or without cause, as a member of the Nominating Committee 

or as a Public Director. A member of the Nominating Committee may serve 

for multiple terms.

C. The Nominating Committee shall identify individuals qualified to serve on 

the Board, consistent with criteria approved by the Board, and with the 
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composition requirements set forth in the Rules or Operating Agreement. 

The Nominating Committee shall administer a process for the nomination of 

individuals to the Board. The Board shall delegate sufficient authority, 

dedicate sufficient resources, and allow sufficient time for the Nominating 

Committee to fulfill its mandate. The Nominating Committee shall make 

such recommendations to the Board that will, in its judgment, best promote 

the interests of the Exchange. The Nominating Committee shall also have 

such other powers and perform such other duties as set forth in the Rules 

and as the Board may delegate to it from time to time.

Rule 2.11 Disciplinary Panel and Appeals Committee

A. The Disciplinary Panel shall be:

1. a standing committee consisting of at least three members, including 

at least one person who would not be disqualified from serving as a 

Public Director who will serve as the chairperson, as appointed from 

time to time. At least one member of the Disciplinary Panel must be a 

Participant or an employee of a Participant. The Board may establish 

more than one Disciplinary Panel. The Regulatory Oversight 

Committee will appoint individuals for membership on the 

Disciplinary Panel. Each Disciplinary Panel shall include members 

with sufficient differing experience and Participant interests so as to 

ensure fairness and to prevent special treatment or preference for 

any Person.

2. responsible for conducting hearings, rendering decisions, and 

imposing sanctions with respect to any Disciplinary Action. The 

Disciplinary Panel shall also have such other powers and perform 

such other duties as set forth in the Rules and as the Board may 

determine from time to time.

B. Each member of the Disciplinary Panel shall serve for a term of two 

calendar years from the date of his or her appointment, and until the due 

appointment of his or her successor, or until his or her earlier resignation or 
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removal, with or without cause, as a member of the Disciplinary Panel. A 

member of the Disciplinary Panel may serve for multiple terms.

C. The Appeals Committee shall be:

1. a standing committee consisting of at least three members of the 

Board. The members of the Appeals Committee and its Chairperson 

shall be appointed by the Chairperson of the Board, provided that, at 

all times the Appeals Committee shall include at least one Public 

Director who shall serve as the Chairperson of the Appeals 

Committee.

2. responsible for conducting hearings of appeals of decisions of the 

Disciplinary Panel, rendering decisions of such appeals, and 

imposing sanctions with respect to such appeals. The Appeals 

Committee shall also have such other powers and perform such 

other duties as set forth in these Rules and as the Board may 

determine from time to time.

D. Each member of the Appeals Committee shall serve for a term of one 

calendar year from the date of his or her appointment or for the remainder of 

his or her term as a Public Director, as applicable, and until the due 

appointment of his or her successor, or until his or her earlier resignation or 

removal, with or without cause, as a member of the Appeals Committee or 

as a Public Director. A member of the Appeals Committee may serve for 

multiple terms.

Rule 2.12 Emergency Rules

A. During an Emergency, the Exchange may implement temporary emergency 

procedures and rules pursuant to Rule 2.12D, subject to the applicable 

provisions of the CEA and CFTC Regulations.

B. The Chief Executive Officer or his or her designee and the Chief 

Compliance Officer or his or her designee, acting in conjunction or, if it is not 

possible to act in conjunction, acting alone, are authorized to determine 
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whether an Emergency exists and whether Emergency Rules or 

Emergency Actions are warranted. Emergency Rules may require or 

authorize the Exchange, the Board, any committee of the Board or any 

Officer to take Emergency Actions, including, but not limited to, the following 

actions:

1. suspend or curtail trading in, or limit trading to liquidation, for any 

Exchange Contract;

2. extend or shorten the last trading date for any Exchange Contract;

3. provide alternative settlement mechanisms for any Exchange 

Contract (including by altering the settlement terms or conditions or 

fixing the settlement price) or suspend the transfer of the Underlying;

4. order the transfer or liquidation of open positions in any Exchange 

Contract; provided that if an Exchange Contract is fungible with a 

contract on another platform in addition to the Exchange, the 

liquidation or transfer of open interest in such Exchange Contract will 

be ordered only as directed, or agreed to, by CFTC staff or the 

CFTC;

5. extend, shorten or change the Trading Hours or the expiration date 

of any Exchange Contract;

6. require Participants to meet special margin requirements;

7. order the transfer of Exchange Contracts and the associated margin 

or alter any Exchange Contract’s settlement terms or conditions; or

8. impose or modify position limits, price limits, and intraday market 

restrictions.

C. Before taking an Emergency Action, the effects of such Emergency Action 

on markets underlying the Exchange Contract(s) affected by such 

Emergency Action, on markets that are linked or referenced to such 

Exchange Contracts and similar markets on other trading venues, or any 
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potential conflicts of interest shall be considered and documented as 

required under Rule 2.12F.

D. Before any Emergency Rule may be adopted and enforced, the Regulatory 

Oversight Committee shall approve the implementation of such Emergency 

Rule at a duly convened meeting. If the Chief Executive Officer, or his or her 

designee, or if the Chief Executive Officer or his or her designee is 

unavailable, the Chief Compliance Officer, or his or her designee, 

determines that Emergency Rules must be implemented with respect to an 

Emergency before a meeting of the Regulatory Oversight Committee can 

reasonably be convened, then the Chief Executive Officer, or his or her 

designee, or if the Chief Executive Officer or his or her designee is 

unavailable, the Chief Compliance Officer, or his or her designee, shall 

have the authority, without Board or committee 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 his or her designee, or if the 

Chief Executive Officer or his or her designee is unavailable, the Chief 

Compliance Officer, or his or her designee, must convene a meeting of the 

Regulatory Oversight Committee to ratify the actions taken by the Chief 

Executive Officer, or his or her designee, or the Chief Compliance Officer, 

or his or her designee, as soon as practicable. Whenever the Exchange 

implements an Emergency Rule or takes an Emergency Action, a duly 

authorized representative of the Exchange, where possible, will inform 

Participants through a Participant Notice.

E. The Exchange will use reasonable efforts to notify the CFTC and the Board 

prior to implementing, modifying or terminating an Emergency Rule. If such 

prior notification is not possible or practicable, the Exchange will notify the 

CFTC and the Board as soon as possible or reasonably practicable, but in 

any event no longer than 24 hours after implementing, modifying or 

terminating an Emergency Rule.
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F. Upon taking any Emergency Action, the Exchange will document the 

decision-making process related to such Emergency Action, including the 

process for minimizing conflicts of interest, the extent to which the 

Exchange considered the effect of its Emergency Action on the Underlying 

markets and on markets that are linked or referenced to the contract market

and similar markets on other trading venues, and reasons for using 

emergency authority under this Rule 2.12. Such documentation will be 

maintained in accordance with Rule 2.14.

G. The Chief Executive Officer, or his or her designee, or if the Chief Executive 

Officer or his or her designee is unavailable, the Chief Compliance Officer, 

or his or her designee, may determine that an Emergency has been

reduced sufficiently to allow the Exchange to resume normal functioning, in 

which case any Emergency Actions responding to such Emergency will be 

terminated and a duly authorized representative of the Exchange will inform 

Participants through a Participant Notice.

H. Participants must promptly notify the Exchange of any circumstance that 

may give rise to a declaration of an Emergency.

Rule 2.13 Conflicts of Interest

A. Named Party in Interest Conflict

1. No Director or member of a Disciplinary Panel shall participate in 

Board, any committee, or Disciplinary Panel deliberations or voting 

in any matter involving a named party in interest where such Director 

or Disciplinary Panel member:

a is the named party in interest in the matter;

b is an employer, employee or fellow employee of a named 

party in interest;

c is associated with a named party in interest through a “broker 

association” as defined in CFTC Regulation 156.1;
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d has any other significant, ongoing business relationship with a 

named party in interest, excluding relationships limited to 

Exchange Contracts; or

e has a family relationship (i.e., the Director’s or Disciplinary 

Panel member’s spouse, parents, children, and siblings, in 

each case, whether by blood, marriage, or adoption, or any 

person residing in the home of the Director or Disciplinary 

Panel member or that of his or her immediate family) with a 

named party in interest.

2. Prior to consideration of any matter involving a named party in 

interest, each Director of the deliberating body or Disciplinary Panel 

member shall disclose to the Chief Compliance Officer whether such 

Director or Disciplinary Panel member has one of the relationships 

listed above with a named party in interest.

3. The Chief Compliance Officer shall determine whether any Director 

of the relevant deliberating body or Disciplinary Panel member is 

subject to a conflicts restriction under this Rule 2.13A. Such 

determination shall be based upon a review of the following 

information:

a information provided by such Director or Disciplinary Panel 

member pursuant to clause (2) above; and

b any other source of information that is held by and reasonably 

available to the Exchange.

B. Financial Interest in a Significant Action Conflict

1. No Director or Disciplinary Panel member shall participate in the 

Board’s, any committee’s or Disciplinary Panel’s deliberations or 

voting on any significant action if such Director or Disciplinary Panel 

member knowingly has a direct and substantial financial interest in 

the result of the vote based upon either Exchange or non-Exchange 
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positions that could reasonably be expected to be affected by the 

action.

2. Prior to consideration of any significant action, each Director of the 

deliberating body or Disciplinary Panel member who does not 

choose to abstain from deliberations and voting shall disclose to the 

Chief Compliance Officer any information that may be relevant to a 

determination of whether such Director has a direct and substantial 

financial interest in the result of the vote.

3. The Chief Compliance Officer shall determine whether any Director 

of the relevant deliberating body or Disciplinary Panel member who 

does not choose to abstain from deliberations and voting is subject 

to a conflicts restriction under this Rule 2.13B. Such determination 

shall be based upon a review of the following information:

a the most recent large trader reports and clearing records 

available to the Exchange;

b gross positions held at the Exchange in the Director’s or 

Disciplinary Panel member's personal accounts or “controlled 

accounts,” as defined in CFTC Regulation 1.3(j);

c gross positions held at the Exchange in proprietary accounts, 

as defined in CFTC Regulation 1.17(b)(3), at the Director’s or 

Disciplinary Panel member's affiliated firm;

d gross positions held at the Exchange in accounts in which the 

Director or Disciplinary Panel member is a principal, as 

defined in CFTC Regulation 3.1(a);

e net positions held at the Exchange in “customer” accounts, as 

defined in CFTC Regulation 1.17(b)(2), at the Director’s or 

Disciplinary Panel member's affiliated firm;

f any other types of positions, whether maintained at the 

Exchange or elsewhere, held in the Director’s or Disciplinary 
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Panel member's personal accounts or the proprietary 

accounts of the Director’s or Disciplinary Panel member's 

affiliated firm that the Chief Compliance Officer reasonably 

expects could be affected by the significant action;

g information provided by such Director or Disciplinary Panel 

member pursuant to clause (2) above; and

h any other information reasonably available to the Exchange, 

taking into consideration the exigency of the significant action 

being contemplated.

4. Any Director or Disciplinary Panel member who would otherwise be 

required to abstain from deliberations and voting pursuant to clause 

(1) above may participate in deliberations, but not in 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 (3) above which is the basis for such 

Director’s or Disciplinary Panel member’s direct and substantial 

financial interest in the significant action that is being contemplated. 

In making its determination, the deliberating body shall consider:

a whether such Director’s or Disciplinary Panel member’s 

participation in the deliberations is necessary to achieve a 

quorum; and

b whether such Director or Disciplinary Panel member has 

unique or special expertise, knowledge or experience in the 

matter being considered.

C. The minutes of any meeting to which the conflicts determination procedures 

set forth in this Rule apply shall reflect the following information:
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1. the names of all Directors or Disciplinary Panel members who 

participated in such meeting;

2. the name of any Director or Disciplinary Panel member 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;

3. the information that was reviewed for each member of the relevant 

deliberating body; and

4. any determination made in accordance with Rule 2.13A.3 or Rule 

2.13B.4 above.

Rule 2.14 Recordkeeping

A. The Exchange shall keep, or cause to be kept, complete and accurate 

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

books, records and other documentation required to be maintained 

pursuant to the CEA and CFTC Regulations.

B. The Exchange shall retain all such books and records in accordance with 

the CEA and CFTC Regulations.

C. The Exchange will provide information required to be maintained or 

provided pursuant to the CEA and CFTC Regulations to the Commission, 

the U.S. Securities and Exchange Commission, the U.S. Department of 

Justice or any representative of a prudential regulator as authorized by the 

Commission, upon request, in each case in the form and manner required 

under these Rules, and/or the CEA and CFTC Regulations.

Rule 2.15 Information-Sharing Agreements

A. 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 Exchange Contracts trade. As 
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part of any information-sharing agreements or other arrangements or 

procedures adopted pursuant to this Rule, the Exchange may:

1. provide market surveillance reports to other markets;

2. share information and documents concerning current and former 

Participants or Authorized Users with other markets;

3. share information and documents concerning ongoing and 

completed investigations with other markets; or

4. require its current or former Participants or Authorized Users 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.

B. The Exchange may enter into any information-sharing agreements or other 

arrangements or procedures, including an information-sharing agreement 

or other arrangement or procedure similar to that described above in 

paragraph (A), with any Person or body (including but not limited to a 

Regulatory Agency or Swap Data Repository) if the Exchange considers 

such agreement, arrangement or procedures to be in furtherance of the 

Exchange’s purpose or duties under these Rules or Applicable Law.

C. The Exchange may provide information to a duly authorized foreign 

governmental authority, as directed by the CFTC, in accordance with an 

information-sharing agreement or other arrangements or procedures 

executed with such foreign governmental authority or the CFTC.

Rule 2.16 Recordkeeping and Reporting Requirements

A. In the event the Board rejects a recommendation or supersedes an action 

of the Regulatory Oversight Committee, the Risk Management Committee 

or the Chief Compliance Officer, the Exchange shall maintain 

documentation detailing: (1) the recommendation or action of the 

Regulatory Oversight Committee, the Risk Management Committee or the 
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Chief Compliance Officer, as the case may be; (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.

B. In the event that the Risk Management Committee rejects a 

recommendation or supersedes an action of any of its subcommittees, the 

Exchange shall maintain documentation detailing (1) the recommendation 

or action of the subcommittee; (2) the rationale for such recommendation or 

action; (3) the rationale of the Risk Management Committee for rejecting 

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

action that the Risk Management Committee decided to take contrary to 

such recommendation or action.

C. In accordance with Rule 6.7, the Exchange shall report all Transactions of 

Swaps subject to reporting by the Exchange pursuant to applicable CFTC 

Regulations to a Swap Data Repository selected by the Exchange for such 

purpose within the time limits set forth in CFTC Regulations. Parties to a 

Transaction where reporting is required shall be responsible for any of their 

own reporting obligations. Participants shall include with any Order

sufficient information to enable the Exchange to report all Required Swap 

Creation Data pursuant to Part 45 of CFTC Regulations, including but not 

limited to the information prescribed under Rule 5.2B.10 (to the extent such 

information is not pre-populated by the Platform). Participants may provide 

certain data to the Exchange in the Participant Application and Agreement, 

such as whether the Participant is a U.S. person, swap dealer, major swap 

participant, or financial entity as defined in the Participant Application and 

Agreement. Participants must inform the Exchange immediately of any 

change in status that would affect data to be reported to a Swap Data 

Repository in accordance with Rule 6.7.
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D. The Exchange shall record and report to the CFTC all data required to be 

reported to the CFTC under Part 16 of CFTC Regulations, in the form and 

manner required by CFTC Regulations.

E. The Exchange shall submit to the CFTC within thirty days after each Board 

election a list of the Board’s Directors, the Participant interests they 

represent, and how the composition of the Board meets the requirements of 

CFTC Regulation 1.64(b) and the Exchange’s Rules and procedures.

Rule 2.17 Public Information

A. Accurate, complete and current copies of these Rules and Exchange 

Contract Specifications shall be published on the Website.

B. The Exchange shall make public on a daily basis information on settlement 

prices, volume, open interest, and opening and closing ranges for actively 

traded Exchange Contracts.

C. Except as provided herein, the Exchange shall publish on its Website a 

Participant Notice with respect to each addition to, modification of, or 

clarification of, the Rules, the Matching Engine, and any Exchange Contract 

Specification prior to the earlier of:

1. the effective date thereof; and

2. the filing of such change with the Commission.

D. If confidential treatment is sought with respect to any information the 

Exchange submits to a Regulatory Agency, only the public version of such 

filing shall be disclosed pursuant to Rule 2.17C.

E. Any Participant Notice shall be deemed to have been made to all 

Participants and any other such Person as may be required by sending 

such Participant Notice to the email address on file with the Exchange and 

by posting the Participant Notice on the Website.
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CHAPTER 3 Participants

Rule 3.1 Jurisdiction, Applicability of Rules

ANY PERSON, INCLUDING A PARTICIPANT OR AN AUTHORIZED USER, DIRECTLY 

OR INDIRECTLY INITIATING, EXECUTING, AND/OR CLEARING A TRANSACTION 

ON THE EXCHANGE OR SUBJECT TO THESE RULES, AND ANY PERSON FOR 

WHOSE BENEFIT SUCH A TRANSACTION HAS BEEN INITIATED OR EXECUTED, 

OR CLEARED, INCLUDING CUSTOMERS AND CLEARED SWAPS CUSTOMERS, 

AND AN AUTHORIZED REPRESENTATIVE AND, FOR THE AVOIDANCE OF DOUBT, 

AN FCM PARTICIPANT, EXECUTING PARTICIPANT AND A LIQUIDITY PROVIDER, 

AND ANY EMPLOYEE OR AGENT OF A PARTICIPANT, AND ANY OTHER PERSON 

ACCESSING THE PLATFORM: (i) AGREES TO BE BOUND BY AND COMPLY WITH 

THESE RULES, THE OBLIGATIONS AND APPLICABLE LAW, IN EACH CASE TO THE 

EXTENT APPLICABLE TO SUCH PERSON; (ii) EXPRESSLY CONSENTS AND 

SUBMITS 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 PERSON; AND (iii) AGREES TO 

ASSIST THE EXCHANGE IN COMPLYING WITH THE EXCHANGE’S LEGAL AND 

REGULATORY OBLIGATIONS, COOPERATE WITH THE EXCHANGE, THE CFTC 

AND ANY REGULATORY AGENCY WITH JURISDICTION OVER THE EXCHANGE IN 

ANY INQUIRY, INVESTIGATION, AUDIT, EXAMINATION OR PROCEEDING. ANY 

AMENDMENTS TO OR THE REPEAL OF A RULE, OR THE 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 SUCH PERSON 

BECAME SUBJECT TO THE EXCHANGE’S JURISDICTION, AND ON ALL EXCHANGE 

CONTRACTS AS APPLICABLE.

Rule 3.2 Participants – Applications, Agreements, Eligibility Criteria, 

Classifications and Privileges

A. Each Participant shall have the right to access electronically the Platform, 

including the right to place Orders for each of its Cleared Swaps Proprietary 
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Accounts, provided that such Participant is eligible for and has applied and 

received Trading Privileges and Clearing Privileges. In order to become a 

Participant, an applicant must:

1. complete and submit the Exchange Participant Application and 

Agreement, User Agreement, and application fee, as may be 

established by the Exchange from time to time;

2. if an applicant is an entity, be validly organized, and in good 

standing, in the United States, and must not be subject to any 

economic or trade sanctions programs administered by OFAC or 

other relevant U.S. or non-U.S. authority; and must not be listed on 

OFAC’s List of Specially-Designated Nationals and Blocked 

Persons;

3. if an applicant is a natural person, be a resident of the United States;

4. be an Eligible Contract Participant in order to gain impartial access to 

the Exchange’s Swap Execution Facility and any SEF services;

5. not be prohibited from using the services of the Exchange for any 

reason whatsoever;

6. have a good reputation and business integrity and maintain 

adequate financial resources and credit;

7. not have filed for bankruptcy;

8. designate at least one Authorized User (or in the case of a natural 

person Participant, such Person shall be deemed to be the 

Authorized User);

9. if an applicant is an entity, designate at least two Authorized 

Representatives (or in the case of a natural person Participant, such 

Person shall be deemed to be the sole Authorized Representative) 

who are responsible for supervising all activities of the Participant, its 

Authorized User(s) and its employees relating to Transactions, for 
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making withdrawal requests and for providing any information the 

Exchange may request regarding such Participant; provided, that 

upon request the Exchange may permit an entity applicant to 

designate a single Authorized Representative in the Chief 

Compliance Officer’s sole discretion; and

10. meet any other criteria and provide the Exchange with any other 

information the Exchange may request regarding the Participant.

B. Each FCM Participant shall have the right to access electronically the 

Platform, including the right to place Orders for each of its Cleared Swaps 

Proprietary Accounts or Customer Accounts, provided that such FCM 

Participant is eligible for and has applied and received Trading Privileges 

and Clearing Privileges. In order to become an FCM Participant, an FCM 

applicant must: 

1. satisfy the conditions in Rule 3.2A;

2. be validly organized and in good standing, in the United States; 

3. have sufficient operational capabilities and resources to support the 

Platform and Underlying transfer requirements, including sufficient: 

(a) policies and procedures, (b) understanding of and support for the 

Exchange Contracts and transfers of the Underlying, (c) asset 

security and cyber security procedures and (d) AML controls;

4. have sufficient ability, appropriate accounts and technical support to 

clear the Underlying, including maintenance of the requisite 

Collateral Accounts at all times; 

5. submit to the Exchange a letter confirming that the applicant will 

maintain all Customer funds deposited with it in connection with 

trading any Exchange Contract in appropriately labeled and 

segregated Cleared Swaps Customer Accounts separated from 

funds of both the FCM Participant and Customers, as required by 

Commission regulations; 
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6. except as provided below in this Rule 3.2.B, confirm that each of its 

Customers represents that each such Customer is an ECP; and

7. meet any other criteria or complete any additional applications that 

the Exchange may request.

Notwithstanding Rule 3.2.B.6 above, to the extent that an FCM Participant 

intends to clear through LedgerX one or more Swaps executed on or 

pursuant to the rules of a Designated Contract Market on behalf of a 

Customer, such Customer is not required to be an ECP solely with respect 

to any such Swaps.

C. Prior to becoming an FCM Participant, FCM applicants must submit to the 

Exchange: (i) a guarantee agreement on a form prescribed by the 

Exchange defining the FCM Participant’s obligation to financially guarantee 

the applicant’s Orders and Transactions and those of the applicant’s 

Customers, signed by the FCM Participant; and (ii) an agreement 

authorizing the Exchange to unilaterally debit any Collateral Accounts in 

accordance with these Rules, Exchange policies and procedures and in 

amounts solely determined by the Exchange. 

D. The Exchange may in its sole discretion approve, deny, or condition any 

FCM Participant application as the Exchange deems necessary or 

appropriate. 

E. If an FCM Participant application is approved by the Exchange, the 

applicant will be a FCM Participant of the Exchange with Trading Privileges 

and Clearing Privileges with respect to its Cleared Swaps Proprietary 

Account and Cleared Swaps Customers.

F. To be eligible to become an Executing Participant, an applicant must:

1. satisfy the conditions in Rule 3.2A;

2. complete the Executing Participant representation of the Participant 

Application and Agreement; 
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3. agree to confirm that each of its Customers represents that each 

such Customer is an ECP; and

4. be registered as a futures commission merchant, introducing broker 

or commodity trading advisor, or be exempt from registration as 

such. 

G. Submission of a Participant Application and Agreement to the Exchange 

constitutes the applicant’s agreement to be bound by the Rules and the 

published policies of the Exchange.

H. No person affiliated, within the meaning of Section 5b(c)(2)(O) of the CEA, 

with a director of the Exchange or a Participant (for purposes of this Rule, 

an “affiliate”) shall meet criteria for refusal to register a person under 

Section 8a(2) of the CEA; unless the Risk Management Committee finds 

that there are special circumstances warranting the waiver of such 

disqualification with respect to the affiliate.

1. With respect to affiliates, the Board shall be entitled to rely on a 

representation from the relevant director or Participant that, to the 

best of such person’s knowledge, none of its affiliates is subject to 

disqualification pursuant to the Exchange’s fitness standards and 

that such person will notify the Exchange if at any time such director 

or Participant becomes aware that any such affiliate fails to meet the 

fitness standards.

2. Section 5b(c)(2)(O)(ii)(IV) of the CEA requires each DCO to 

establish Fitness Standards for persons with direct access to the 

settlement or clearing activities of the DCO (“Access Persons”). The 

only persons with such access are Participants. 

I. Applicants for Participant status of the Exchange may withdraw their 

applications at any time without prejudice or without losing their right to 

apply at a future time.
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J. Exchange staff may, in its sole discretion, approve, deny, or condition any 

Participant application as Exchange staff deems necessary or appropriate.

1. In the event that Exchange staff decides to decline or condition an 

application for admission as a Participant, or to terminate a Person’s 

status as Participant, Exchange staff shall notify such Person thereof 

in a written notice sent to the address provided by the Person in the 

Participant Application and Agreement or maintained in the 

Exchange’s registry of Participants. Such Person may, within 28 

Business Days, request in writing that the Participant Committee 

reconsider the determination.

2. Within 28 Business Days of receiving a request for reconsideration, 

the Participant Committee shall confirm, reverse or modify the 

denial, condition or terminate the Participant status of such Person, 

and shall promptly notify such Person accordingly in writing. The 

Participant Committee may, in its sole discretion, schedule a hearing 

(in person or by teleconference), request additional information from 

such Person or establish any other process that it believes is 

necessary or appropriate to consider the request for reconsideration.

3. The Participant Committee’s decision is the final action of the 

Exchange and is not subject to appeal within the Exchange.

K. Upon approval by the Exchange of an applicant’s Participant Application 

and Agreement, the applicant will be deemed to be a Participant, and shall 

continue to comply with all applicable eligibility criteria in this Rule or as the 

Exchange may require, and shall have the following privileges, which the 

Exchange may revoke, amend, or expand in accordance with, or by 

amending, these Rules:

1. Trading Privileges and Clearing Privileges;

2. To intermediate the execution of Customer Transactions on the 

Exchange, if approved as an Executing Participant;
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3. To intermediate Orders and clear Transactions on behalf of Cleared 

Swaps Customers, if approved as an FCM Participant; and

4. To distribute Exchange data to its Customers pursuant to any data 

distribution agreement with the Exchange.

L. The Exchange will apply Participant access criteria in a fair and 

non-discriminatory manner that is not anti-competitive.

Rule 3.3 Participant Obligations

A. Each Participant and any Authorized User(s) thereof, must comply with 

these Rules, applicable provisions of the CEA and relevant CFTC 

Regulations. Each Participant and any Authorized User(s) thereof also 

must cooperate promptly and fully with the Exchange, its agents, and the 

CFTC in any investigation, call for information, inquiry, audit, examination, 

or proceeding. Such cooperation shall include providing the Exchange with 

access to information on the activities of such Participant and/or its 

Authorized User(s) in any referenced market that provides the underlying 

prices for any Exchange market. If any Participant or Authorized User 

thereof fails to satisfy any Obligation, the Exchange may revoke or suspend 

the Participant’s privileges in full or in part. Each Participant also may be 

subject to civil or criminal prosecution.

B. Each Participant consents to allow the Exchange to provide all information 

the Exchange has about the Participant, including the Participant’s and 

Cleared Swaps Customers’ trading activity, to the CFTC or any other 

Regulatory Agency, law enforcement authority, or judicial tribunal, including 

(as may be required by information-sharing agreements or other 

arrangements or procedures or other contractual, regulatory, or legal 

provisions) foreign regulatory or self-regulatory bodies, law enforcement 

authorities, or judicial tribunals without notice to the Participant.
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C. Each Participant consents to the Exchange providing information related to 

Know Your Customer or Anti-Money Laundering to Settlement Banks or 

potential Settlement Banks.

D. Each Participant must establish and maintain cyber security policies and 

procedures to protect each such Participant’s systems, including, but not 

limited to, any API.

E. Each Participant must represent to the Exchange that each such Participant 

has established and maintains an account to hold Underlying and will 

adhere to the Exchange’s collateral transfer procedures. Each Participant 

agrees to provide and accept collateral when required to do so by the 

Exchange.

F. Each Participant and Cleared Swaps Customer, upon a request of the 

Exchange or any Regulatory Agency, must promptly respond to any 

requests for information, including by providing any necessary information 

for the Exchange to perform any of the functions described in CEA Section 

5h. 

G. Each Participant and Cleared Swaps Customer must prepare, maintain, 

keep current and retain those books and records for the life of each Swap, 

including records of the instrument used as a reference price, underlying 

commodities and related derivatives market for five years following the 

termination of such Swap, and any other books and records required by 

these Rules, the CEA and the CFTC’s Regulations for the time period 

required by these Rules, the CEA and the CFTC’s Regulations. Such books 

and records shall be readily accessible for inspection and promptly 

provided to the Exchange, its designated Self-Regulatory Organization, the 

CFTC, the U.S. Securities and Exchange Commission or the U.S. 

Department of Justice, upon request, in each case in the form and manner 

required under these Rules, and/or the CEA and CFTC Regulations.

H. Each Participant must immediately notify the Exchange in writing upon 

becoming aware:
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1. that the Participant, any of the Participant’s officers or any of the 

Participant’s Authorized Users has had trading or clearing privileges 

suspended, access to, or membership or clearing membership in 

any Regulatory Agency denied;

2. that the Participant, any of the Participant’s officers or any of the 

Participant’s Authorized Users has been convicted of, pled guilty or 

no contest to, or entered a plea agreement to any felony in any 

domestic, foreign or military court, or with the CFTC, as applicable;

3. that the Participant, any of the Participant’s officers or any of the 

Participant’s Authorized Users has been convicted of, plead guilty or 

no contest to, or entered a plea agreement to a misdemeanor in any 

domestic, foreign or military court, or with the CFTC, as applicable, 

which involves:

a embezzlement, theft, extortion, fraud, fraudulent conversion, 

forgery, counterfeiting, false pretenses, bribery, gambling, 

racketeering, or misappropriation of funds, securities or 

properties; or

b any Transaction in or advice concerning swaps, futures, 

options on futures or securities;

4. that the Participant, any of the Participant’s officers or any of the 

Participant’s Authorized Users has been subject to, or associated 

with a firm that was subject to, regulatory proceedings before any 

Regulatory Agency;

5. of any other material change in any information contained in the 

Participant’s application, including any failure to continue to meet the 

requirements to be an Eligible Contract Participant or any change in 

status as a swap dealer, major swap participant or financial entity;
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6. of becoming the subject of a bankruptcy petition, receivership 

proceeding, or the equivalent, or being unable to meet any financial 

obligation as it becomes due;

7. of information that concerns any financial or business developments 

that may materially affect the Participant’s ability to continue to 

comply with applicable participation requirements; 

8. as applicable to FCM Participants and Executing Participants, of 

becoming subject to early warning reporting under CFTC Regulation 

1.12; or

9. as applicable to FCM Participants, of any failure to segregate or 

maintain adequate Cleared Swaps Customer Collateral as required 

by the CFTC and CFTC Regulations.

I. Each Participant must diligently supervise all activities of the Participant’s 

employees and/or agents, including all Authorized Users and Authorized 

Representatives, relating to Orders, Transactions and communications with 

the Exchange. Any violation of these Rules by any employee, Authorized 

Representative or Authorized User of a Participant may constitute a 

violation of the Rules by such Participant.

J. Each Participant must inform the Exchange of: (i) its LEI, if applicable, (ii) 

any change to its email address within 24 hours after such change; (iii) any 

changes to the regulatory registration information of the Participant’s 

Authorized Users within two Business Days of such change; and (iv) other 

information provided in the Participant Application and Agreement within 

five days after any such change.

K. Each FCM Participant also must: 

1. Comply with the financial and reporting requirements set forth by the 

Commission and the NFA, including the requirements contained in 

Commission Regulations 1.10 and 1.17. 
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2. Require Cleared Swaps Customers to maintain and provide to the 

FCM Participant or the Exchange upon request by the FCM 

Participant or the Exchange information identifying any individual 

who has entered orders on behalf of such Cleared Swaps 

Customer’s Account, including, but not limited to, the individual’s 

name, taxpayer or other identification number, affiliation to the 

Cleared Swaps Customer, address and contact information. 

3. At all times maintain the financial resources at or in excess of the 

amount prescribed by the Exchange from time to time. 

4. Maintain a Cleared Swaps Customer Account that holds Cleared 

Swaps Customer Collateral with the Exchange and may maintain a 

Cleared Swaps Proprietary Account that holds the FCM Participant’s 

proprietary funds with the Exchange. 

5. Maintain a separately identifiable Customer ID for each Cleared 

Swaps Customer and provide such Customer ID with every Order 

submitted on the Platform on behalf of a Cleared Swaps Customer. 

6. Include in the FCM Participant’s Cleared Swaps Customer Account 

separate Customer IDs for each Cleared Swaps Customer based on 

the Customer ID that the FCM Participant transmits with each Order. 

7. Make an initial deposit of funds in an amount determined by the FCM 

Participant, subject to the Exchange requiring a greater amount, 

constituting the FCM Participant’s residual interest therein, into a 

Cleared Swaps Customer Account for excess collateral with the 

Exchange. 

8. Submit statements of financial condition at such times and in such 

manner as shall be prescribed from time to time. 

9. Use due diligence in receiving and handling Orders from Cleared 

Swaps Customers, submitting such Orders on the Platform on behalf 

of such Cleared Swaps Customers, responding to inquiries from 
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Cleared Swaps Customers about their Orders and reporting back to 

Cleared Swaps Customers the execution of such Orders. 

10. Maintain policies and procedures acceptable to the Exchange that: 

a with respect to each Cleared Swaps Customer who is an 

individual, restricts access to any system through which such 

individual Cleared Swaps Customer submits Orders to the 

FCM Participant for transmission to the Exchange to that 

individual Customer; and 

b with respect to each Cleared Swaps Customer who is not an 

individual: (1) restricts access to any system through which 

the Cleared Swaps Customer’s Orders may be submitted to 

the FCM Participant for transmission to the Exchange to such 

individuals authorized to enter Orders on behalf of such 

Cleared Swaps Customer; (2) requires each Cleared Swaps 

Customer who is not an individual to have and maintain an 

LEI, which shall be provided to the Exchange with each order 

message submitted by such Person; (3) identifies each 

individual authorized to enter Orders on behalf of such 

Cleared Swaps Customer by a distinct Customer ID, which 

shall be provided to the FCM Participant and the Exchange 

with each order message submitted by such Person; and (4) 

requires the customer to maintain and provide to the FCM 

Participant or the Exchange upon request by the FCM 

Participant or the Exchange information identifying any 

individual who has entered Orders on behalf of such 

Customer’s account, including but not limited to the 

individual’s name, taxpayer or other identification number, 

affiliation to the Customer, address and contact information. 

11. Prior to an FCM Participant accepting any Orders from a Cleared 

Swaps Customer for submission to the Exchange: 
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a an FCM Participant must first have provided such Cleared 

Swaps Customer with the Exchange Risk Disclosure 

Statement; 

b the Exchange will require certification by the FCM Participant 

to the Exchange that its system has the capacity to block 

Cleared Swaps Customer Collateral such that the Cleared 

Swaps Customer’s Collateral Account maintains sufficient 

funds to cover the Cleared Swaps Customer’s maximum loss 

under the Exchange Contract before the FCM Participant 

enters the Order and that the FCM Participant demonstrate 

that capacity to the Exchange. In addition, on an annual basis 

or as otherwise required by the Exchange, each FCM 

Participant must represent to the Exchange that the portion of 

the FCM Participant’s system that blocks Cleared Swaps 

Customer Collateral has not been changed in any material 

respect or, if the system has been changed, the FCM 

Participant must identify any such changes and recertify the 

system’s capacity to block Cleared Swaps Customer 

Collateral. Finally, each FCM Participant agrees to submit to 

any compliance review by the Exchange of its systems in this 

regard. 

12. With respect to the Associated Persons or employees of a FCM 

Participant: 

a Each FCM Participant shall be responsible for diligently 

supervising the FCM Participant’s Associated Persons’ or 

employees’ compliance with all Exchange Rules. 

b Each FCM Participant must maintain a complete and accurate 

list of all Associated Persons or employees of the FCM 

Participant. Such list shall be promptly provided to the 

Exchange upon request. 
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c Associated Persons or employees must comply with 

Exchange Rules. 

d Each Associated Person or employee shall be bound by 

Exchange Rules to the same extent as if such person were a 

Participant. 

e Each FCM Participant shall be responsible for the acts or 

omissions of the FCM Participant’s Associated Persons or 

employees, and may be liable for any fines imposed upon 

such Associated Persons or employees by the Exchange. 

Any violation of an Exchange rule by any such Associated 

Persons or employee may be considered a violation by the 

FCM Participant. 

13. Make and file reports in accordance with CFTC Regulations in a 

manner and form and at such times as may be prescribed by the 

Commission. 

14. Make and file reports with the Exchange at such times, in such 

manner and form, and containing such information as the Exchange 

may prescribe from time to time. 

15. Invest Cleared Swaps Customer Collateral only in accordance with 

CFTC Regulations 22.2(e)(1) and 1.25, to the extent an FCM 

Participant invests Cleared Swaps Customer Collateral.

16. Prepare, maintain and keep current those books and records 

required by the rules of the Exchange, the CEA and CFTC 

Regulations. Such books and records shall be open to inspection 

and promptly provided to the Exchange, its Designated SelfRegulatory Organization (“DSRO”), the Commission and/or the U.S. 

Department of Justice and/or the U.S. Securities and Exchange 

Commission, upon request.

L. An Executing Participant must also:
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1. Adhere to CFTC Regulations concerning applicable financial 

resources and financial reporting requirements, including, but not 

limited to, the requirements under CFTC Regulations 1.10 and 1.17, 

as applicable.

2. Provide a Customer ID for every Order submitted to the Exchange.

3. Use due diligence in receiving and handling Orders from Customers, 

submitting such Orders on the Platform on behalf of such 

Customers, responding to inquiries from Customers about their 

Orders and reporting back to Customers the execution of such 

Orders.

4. Maintain policies and procedures acceptable to the Exchange that:

a identify each Authorized User whom the Executing Participant 

has authorized to transmit Customer Orders by a unique User 

ID as provided pursuant to Rule 5.1, which User ID shall be 

submitted to the Exchange with each Order submitted by 

such Authorized User;

b permit access only to Authorized Users with permission to 

enter Customer Orders on behalf of the Executing Participant;

c require each Customer who is not an individual, with respect 

to Swaps, to have and maintain a Legal Entity Identifier 

deemed acceptable under CFTC Regulations, which shall be 

provided to the Exchange with each order message submitted 

by such Person, as applicable; and

d require the Customer to maintain and provide, upon request, 

to the Executing Participant or the Exchange information 

identifying any individual who has entered Orders on behalf of 

such Customer’s account, including, but not limited to, the 

individual’s name, taxpayer or other identification number, 

affiliation to the Customer, address and contact information.
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Rule 3.4 Cleared Swaps Customer Account Requirements for FCM Participants

A. FCM Participants must comply with the requirements set forth in Part 22 of 

CFTC Regulations. This includes, but is not limited to, the following:

1. Maintaining sufficient funds at all times in Cleared Swaps Customer 

Accounts.

2. Computing, recording and reporting completely and accurately the 

balances in the Statement of Segregation Requirements and 

Cleared Swaps Customer Collateral Held in Cleared Swaps 

Customer Accounts.

3. Obtaining satisfactory Cleared Swaps Customer account 

acknowledgment letters and identifying Cleared Swaps Customer 

accounts as such.

4. Preparing complete and materially accurate daily Cleared Swaps 

Customer amount computations in a timely manner.

B. All FCM Participants must submit a daily Cleared Swaps Customer Account 

statement through Exchange-approved electronic transmissions by 12:00 

noon on the following Business Day.

C. FCM Participants must provide the Exchange’s Compliance Department 

with access to Cleared Swaps Customer Account information in a form and 

manner prescribed by the Compliance Department. 

D. All FCM Participants must provide written notice to the Compliance 

Department of a failure to maintain sufficient funds in Cleared Swaps 

Customer Accounts. The Compliance Department must receive immediate 

written notification when an FCM Participant knows or should have known 

of such failure. 

E. Exchange staff may prescribe additional Cleared Swaps Customer Account 

requirements. 
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Rule 3.5 Customer Collateral Accounts Maintained With the Exchange

All Cleared Swaps Customer Collateral deposited with the Exchange on behalf of Cleared 

Swaps Customers shall be held in accordance with Part 22 of the CFTC Regulations in an 

account identified as a Cleared Swaps Customer Account. Such Cleared Swaps 

Customer Collateral shall be segregated by the Exchange and treated as belonging to 

such Cleared Swaps Customers of the FCM Participant. Pursuant to this rule, an FCM 

Participant shall satisfy the Cleared Swaps Customer Account acknowledgment letter 

requirement of Rule 3.4A.3 for Cleared Swaps Customer held at the Exchange.

Rule 3.6 Dues, Fees and Expenses Payable by Participants

A. Participants are not required to pay dues.

B. Participants may be charged fees in connection with Trading Privileges and 

Clearing Privileges in such amounts as may be revised from time to time. 

Fees and any revisions to such fees will be provided on the Website and in 

Participant Notices.

C. Participants may be charged fees for settlement of Exchange Contracts at 

expiration in an amount to be reflected from time to time on the Website and 

in Participant Notices.

D. The Exchange or a Settlement Bank may also deduct from a Collateral 

Account fees or expenses incurred in connection with a Participant’s trading 

or account activity, such as fees for wire transfers or check processing via 

electronic check, or storage or other fees or expenses related to Trading 

Privileges or Clearing Privileges. All such fees shall be charged in an 

amount to be reflected from time to time on the Website and in Participant 

Notices.

E. If the Exchange determines in the future to impose dues or additional fees, 

the Exchange shall notify the Participant of any dues or additional fees that 

will be imposed at least 30 days before they take effect.
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Rule 3.7 Recording of Communications

The Exchange may record conversations and retain copies of electronic communications 

between Exchange Officials, on one hand, and Participants, their Authorized Users, 

Authorized Representatives or other agents, on the other hand. Any such recordings 

may be retained by the Exchange in such manner and for such periods of time as the 

Exchange may deem necessary or appropriate. The Exchange shall retain such records 

for the retention periods necessary to comply with CFTC Regulation 1.35 or such longer 

period as the Exchange deems appropriate.

Rule 3.8 Independent Software Vendors

A. A person seeking to act as an Independent Software Vendor must satisfy 

the Exchange’s technological integrity requirements, complete the 

necessary ISV application and access documentation, agree to abide by 

these Rules and Applicable Law, consent to the jurisdiction of the 

Exchange, and agree to not adversely affect the Exchange’s ability to 

comply with Applicable Law. Access to the Exchange by an ISV shall be 

provided pursuant to criteria that are impartial, transparent and applied in a 

fair and non-discriminatory manner. Persons seeking access to the 

Exchange through an ISV must themselves be Participants to have such 

access. ISVs shall be subject to fees as reflected from time to time on the 

Website and in Participant Notices.

B. Each ISV must immediately notify the Exchange in writing upon becoming 

aware:

1. that the ISV or any of the ISV’s officers has been convicted of, pled 

guilty or no contest to, or entered a plea agreement to any felony in 

any domestic, foreign or military court, or with the CFTC, as 

applicable;

2. that the ISV or any of the ISV’s officers has been convicted of, plead 

guilty or no contest to, or entered a plea agreement to a 
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misdemeanor in any domestic, foreign or military court, or with the 

CFTC, as applicable, which involves:

a embezzlement, theft, extortion, fraud, fraudulent conversion, 

forgery, counterfeiting, false pretenses, bribery, gambling, 

racketeering, or misappropriation of funds, securities or 

properties; or

b any Transaction in or advice concerning swaps, futures, 

options on futures or securities;

3. that the ISV or any of the ISV’s officers has been subject to, or 

associated with a firm that was subject to, regulatory proceedings 

before any Regulatory Agency;

4. of any other material change in any information contained in the 

ISV’s application;

5. of becoming the subject of a bankruptcy petition, receivership 

proceeding, or the equivalent, or being unable to meet any financial 

obligation as it becomes due; and

6. of information that concerns any financial or business developments 

that may materially affect the ISV’s ability to continue to comply with 

applicable Exchange requirements.

C. Each ISV must inform the Exchange of: (i) any change to its email address 

within 24 hours after such change; and (ii) other information provided in its 

application for ISV status within five days after any such change.

Rule 3.9 Participant Accounts and Cleared Swaps Customer Accounts

A. The Exchange shall establish and maintain a Participant Account for each 

Participant and the Exchange undertakes to treat the Participant for whom 

such Participant Account is maintained as entitled to exercise the rights that 

comprise each financial asset which is credited to such Participant Account. 

However, the Exchange shall have complete and absolute discretion as to 
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whether any particular financial asset is accepted by it for credit to any 

Participant Account.

B. The Exchange shall establish and maintain a Cleared Swaps Customer 

Account for each FCM Participant’s Cleared Swaps Customers and the 

Exchange undertakes to treat the FCM Participant for whom such Cleared 

Swaps Customer Account is maintained as entitled to exercise the rights 

that comprise each financial asset which is credited to such Cleared Swaps 

Customer Account. However, the Exchange shall have complete and 

absolute discretion as to whether any particular financial asset is accepted 

by it for credit to any Cleared Swaps Customer Account.

C. With respect to any Digital Currency, including, but not limited to, Bitcoin, 

which is or may be credited to any Participant Account, the following terms 

and conditions shall apply:

1. For purposes of creating a “security entitlement” as such term is 

defined in Section 8-102(a)(17) of the UCC, the Exchange and the 

Participant agree that: (1) the Digital Currency and any Digital 

Currency wallet maintained by the Exchange shall be treated as a 

“financial asset” as such term is defined in Section 8-102(a)(9) of the 

UCC; and (2) each Participant shall be treated as an “entitlement 

holder” as such term is defined in Section 8-102(a)(7) of the UCC.

2. Each Participant acknowledges that the Exchange is a “securities 

intermediary” as such term is defined in Section 8-102(a)(14) of the 

UCC.

3. Any Digital Currency which a Participant desires be credited to such 

Participant’s Participant Account shall be transferred to a Digital 

Currency wallet designated by the Exchange and upon such transfer 

the Exchange shall indicate by book entry that such Digital Currency 

has been credited to such Participant Account.
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D. With respect to any Digital Currency, including, but not limited to, Bitcoin, 

which is or may be credited to any Cleared Swaps Customer Account, the 

following terms and conditions shall apply:

1. For purposes of creating a “security entitlement” as such term is 

defined in Section 8-102(a)(17) of the UCC, the Exchange and the 

Cleared Swaps Customer and the relevant FCM Participant all agree

that: (1) the Digital Currency shall be treated as a “financial asset” as 

such term is defined in Section 8-102(a)(9) of the UCC; and (2) each 

FCM Participant shall be treated as an “entitlement holder” as such 

term is defined in Section 8-102(a)(7) of the UCC. 

2. Each Cleared Swaps Customer and each FCM Participant 

acknowledges that the Exchange is a “securities intermediary” as 

such term is defined in Section 8-102(a)(14) of the UCC.

3. Any Digital Currency which an FCM Participant desires be credited 

to any of such FCM Participant’s Cleared Swaps Customer Accounts

shall be transferred to a Digital Currency wallet designated by the 

Exchange and upon such transfer the Exchange shall indicate by 

book entry that such Digital Currency has been credited to any of 

such Cleared Swaps Customer Accounts.

E. The Exchange shall have only such duties and obligations with respect to 

each Participant Account and Cleared Swaps Customer Account as are set 

forth in Article 8 of the UCC or otherwise mandated by Applicable Law. 

Each Participant, including each FCM Participant, and each Cleared Swaps 

Customer acknowledges and agrees that the Exchange is not a fiduciary for 

any Participant, including any FCM Participant, or Cleared Swaps 

Customer.

Rule 3.10 Withdrawal of Participant

A. To withdraw from the Exchange, a Participant must notify the Exchange of 

its withdrawal. Such withdrawal shall be accepted immediately upon 
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receipt of such notice by the Exchange and shall be effective upon such 

Participant’s fulfillment of its obligations under paragraph (C) below, or at 

such other time as the Exchange may determine in its reasonable discretion 

is desirable for the efficient operation of the Exchange. 

B. When the Exchange accepts the withdrawal of a Participant, all rights and 

privileges of such Participant terminate (including, without limitation, the 

Trading Privileges and Clearing Privileges) except as set forth in paragraph 

(C) below. The accepted withdrawal of a Participant shall not affect the 

rights of the Exchange under these Rules or relieve the former Participant of 

such Participant’s obligations under the Exchange Rules before such 

withdrawal. Notwithstanding the accepted withdrawal of a Participant, the 

withdrawn Participant remains subject to the LedgerX Rules, the 

Obligations and the jurisdiction of the Exchange for acts done and 

omissions made while a Participant, must comply with paragraphs (C) and 

(D) below, must cooperate in any Disciplinary Action under Chapter 9 as if 

the withdrawn Participant were still a Participant, and must comply with 

requests for information from the Exchange regarding activities and 

obligations while a Participant for at least five years following its withdrawal.

C. A Participant that has delivered a withdrawal notice pursuant to paragraph 

(A) above shall be subject to the following requirements, obligations and 

provisions:

1. it must use all reasonable endeavors to close out or transfer all open 

positions in its Participant Account and each of its Cleared Swaps 

Customer Accounts, as applicable, within 30 days after the 

Participant has delivered a withdrawal notice pursuant to paragraph 

(A) (the “wind-down period”);

2. after delivering a withdrawal notice pursuant to paragraph (A), it shall 

only be entitled to submit transactions for clearing which it can 

demonstrate have the overall effect of reducing open positions;
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3. if it has any open positions with the Exchange (whether in the 

Participant Account or any Cleared Swaps Customer Account) after 

the wind-down period, the Participant shall be subject to the 

Exchange exercising rights under Rule 7.2G to liquidate or transfer 

the open positions of the Participant.

D. Any withdrawal notice delivered by a Participant pursuant to paragraph (A) 

above shall be irrevocable by the Participant and membership may only be 

reinstated pursuant to a new application for membership following the 

close-out or transfer of all open Exchange Contracts in its Participant 

Account and each of its Cleared Swaps Customer Accounts, as applicable.

CHAPTER 4 Liquidity Providers

Rule 4.1 Application and Agreement

A. Only Participants in good standing may become Liquidity Providers on the 

Exchange.

B. To be considered for Liquidity Provider status, a Participant shall complete 

and execute a Liquidity Provider Agreement.

C. The designation of any Liquidity Provider may be suspended, terminated or 

restricted by the Exchange at any time and for any reason.

Rule 4.2 Appointment

A. The Exchange may appoint one or more Liquidity Providers for certain 

Exchange Contracts.

B. In making such appointments, the Exchange shall consider:

1. the financial resources available to the applicant;

2. the applicant’s trading activity in relevant swaps, futures, options on 

futures or related cash markets; and

3. the applicant’s business reputation and experience in market making 

in options and other derivative products.
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C. The Exchange, in its sole discretion, may appoint a Participant as a Liquidity 

Provider for certain Series and may appoint multiple Liquidity Providers for 

certain Series.

D. No appointment of a Liquidity Provider shall be made without the Liquidity 

Provider’s consent to such appointment.

E. The Exchange shall periodically conduct an evaluation of all Liquidity 

Providers to determine whether they have fulfilled performance standards 

relating to, among other things, quality of the markets; trading activity; 

competitive market making; observance of ethical standards; business 

reputation; and administrative and financial soundness. If the Liquidity 

Provider fails to meet minimum performance standards, the Exchange may, 

among other actions, suspend, terminate or restrict the Liquidity Provider’s 

appointment.

Rule 4.3 Benefits

Liquidity Providers may receive reduced trading fees or other incentives in accordance 

with any Liquidity Provider program in place at the Exchange for fulfilling the Obligations 

of a Liquidity Provider as disclosed in the applicable Liquidity Provider Agreement.

Rule 4.4 Obligations

Transactions of Liquidity Providers should constitute a course of dealing reasonably 

calculated to contribute to the maintenance of a fair and orderly market, and Liquidity 

Providers shall not enter Orders or enter into Transactions that are inconsistent with such 

a course of dealing. Ordinarily, Liquidity Providers shall be obligated to do the following:

A. comply with all other terms of the applicable Liquidity Provider Agreement; 

and

B. make good-faith efforts to enter on the Platform current binding bid and 

offer quotes, with a bid/offer spread as specified in the applicable Liquidity 

Provider Agreement, as necessary to ensure liquidity.
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CHAPTER 5 Method for Trading Exchange Contracts

Rule 5.1 User IDs

A. Each Authorized User must have a unique User ID and a CSP.

B. Each Order entered must contain a User ID that identifies the Participant’s 

Authorized User that entered the Order.

C. Each Order entered by an FCM Participant or Executing Participant on 

behalf of a Customer must contain: (1) such Customer’s User ID or 

Customer ID; and (2) the User ID of the FCM Participant’s or Executing 

Participant’s Authorized User that entered the Order.

D. For Transactions in Swaps, (1) the Reporting Counterparty shall be 

established pursuant to CFTC Regulation 45.8, as may be amended from 

time to time; and (2) if each Participant has equal reporting status under 

CFTC Regulation 45.8, the Exchange shall designate the seller of a Swap 

as the Participant that is the Reporting Counterparty.

E. 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 with the 

unauthorized use of a User ID. Each Participant and Authorized User shall 

ensure that no User ID is used by any Person not authorized by these 

Rules. Each Participant shall establish and maintain policies and 

procedures to ensure the proper use and protection of User IDs. An 

Authorized User is prohibited from using another Person’s User ID, unless 

the Authorized User is entering the Order of a Customer in accordance with 

the Rules.

F. With respect to Customers of Executing Participants, each such Customer 

must provide the User ID of any of its Authorized Users to an Executing 

Participant to allow the Executing Participant to enter Orders on behalf of 

such Customer.

G. Each Participant shall be solely responsible for controlling and monitoring 

the use of all User IDs and CSPs issued to its Authorized Users.
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H. Each Participant shall notify the Exchange of the need to terminate any 

User IDs or the status of any of its Authorized Users.

I. Each Participant shall keep confidential and secure all User IDs, except as 

permitted pursuant to these Rules, as well as all CSPs and any account 

numbers and passwords related to the Platform and shall notify the 

Exchange promptly upon becoming aware of:

1. any unauthorized disclosure or use of any User ID or CSP and of any 

other compromise to a User ID or CSP that would reasonably cause 

the Exchange to deactivate the User ID or CSP;

2. any loss of any User ID or CSP; and

3. any unauthorized access to the Exchange by any Person using a 

User ID and/or CSP assigned to such Participant.

J. Each trading system that automates the generation and routing of Orders to 

the Exchange must have a User ID.

Rule 5.2 Order Entry and Audit Trail

A. Each Participant and Authorized User shall enter Orders on the Platform, 

and the Exchange shall maintain an electronic record of these entries. Each 

Participant shall be responsible for any and all Orders entered using User 

IDs assigned to the Participant or its Authorized User by the Exchange. 

Trading on the Exchange central limit order book is anonymous.

B. Each Participant’s Authorized User entering Orders on the Platform must 

input for each Order the following information (to the extent that such 

information is not provided at account creation or by the Platform):

1. the Authorized User’s User ID;

2. for an Authorized User of an FCM Participant or Executing 

Participant entering an order on behalf of a Customer, the User ID of 

the Authorized User and the Customer ID, where applicable, for 

whom such Authorized User enters an Order;
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3. the Series;

4. Order type;

5. Customer Type Indicator Code;

6. buy or sell, and for options, put, call and strike;

7. price;

8. quantity;

9. such additional information as may be prescribed from time to time 

by the Exchange; and

10. for each Order to buy or sell a Swap, the Authorized User shall 

include with each such Order the following information (to the extent 

that such information is not provided at account creation or by the 

Platform):

a the Legal Entity Identifier of the Participant on whose behalf 

the Order is placed;

b a yes/no indication of whether the Participant is a swap 

dealer, as defined in Section 1a(49) of the CEA and CFTC 

Regulations, with respect to the Swap for which the Order is 

submitted;

c a yes/no indication of whether the Participant or Authorized 

User is a major swap participant, as defined in Section 1a(33) 

of the CEA and CFTC Regulations, with respect to the Swap 

for which the Order is submitted;

d a yes/no indication of whether the Participant is a financial 

entity, as defined in Section 2(h)(7)(C) of the CEA;

e a yes/no indication of whether the Participant or Customer is a 

U.S. person, as defined in the CFTC’s July 26, 2013 

Cross-Border Guidance, as may be amended from time to 

time; and
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f if the Swap will be allocated: (i) an indication that the Swap 

will be allocated; (ii) the LEI of the agent; (iii) an indication of 

whether the Swap is a post-allocation swap; and (iv) if the 

Swap is a post-allocation swap, the unique swap identifier of 

the original transaction between the reporting counterparty 

and the agent.

C. In the event that an FCM Participant or Executing Participant or Authorized 

User of an FCM Participant or Executing Participant receives an Order from 

a Customer that cannot be immediately entered on the Platform, the 

Executing Participant or Authorized User of the Executing Participant must 

prepare a written Order ticket and include the account designation, date, an 

electronic timestamp reflecting the time of receipt and other information 

required pursuant to section (B) above. The FCM Participant or Executing 

Participant must enter the Order on the Platform when the Order becomes 

executable.

D. Audit Trail Requirements

1. Participants that provide connectivity to the Exchange are 

responsible for maintaining, or causing to be maintained, an Order 

routing or front-end audit trail for all electronic Orders, including 

Order entry, modification, cancellation and responses to such 

messages, entered on the Platform through any gateway to the 

Platform. The audit trail must contain all Order receipt, Order entry, 

Order modification, and response or receipt times to the highest level 

of precision achievable by the operating system, in accordance with 

CFTC requirements for electronic Orders and no more than one 

second for non-electronic Orders. The times captured must not be 

able to be modified by the Person entering the Order.

2. Participants, including Authorized Users and any Person having 

Trading Privileges, must maintain audit trail information as required 

by the CEA and CFTC Regulations, including, but not limited to,
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CFTC Regulations 1.31 and 1.35 if applicable, and must be able to 

produce this data in a standard format upon request from the 

Regulatory Oversight Committee, Compliance Department or other 

relevant department of the Exchange.

3. FCM Participants must maintain a complete record of all of Cleared 

Swaps Customer Orders to trade Contracts received by the FCM 

Participant, and any other Transaction records, communications or 

data received by the FCM Participant regarding its Cleared Swaps 

Customer Accounts.

4. The audit trail must capture required fields, which include but are not 

limited to the following: all fields relating to Order entry, including the 

ID of an Exchange Contract, quantity, Order type, buy/sell indicator, 

User ID(s), Customer Type Indicator Code, timestamps, and, where 

applicable, stop/trigger price, type of action and action status code, 

and applicable information contained in paragraph (B) of this Rule 

5.2.

5. For Orders that are executed, the audit trail must record the 

execution time of the Exchange Contract and all fill information.

6. The Compliance Department staff shall require, at least on an annual 

basis, its Participants to verify compliance with these audit trail and 

record-keeping requirements. Participants also may be subject to 

periodic audit trail spot checks, depending upon any indicators that 

any Participant is failing to adhere to Exchange Rules pertaining to 

audit trail requirements, Participant obligations or any other failures 

to provide information to the Exchange upon request. The findings 

of such Exchange reviews will be documented and maintained as 

part of the books and records of the Exchange. The reviews shall 

include, but not be limited to, the following: 

a review of random samples of audit trail data;
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b review of the process by which identifications are assigned to 

records and users and how the records are maintained; and

c review of account numbers and customer indicators in trade 

records to test for accuracy and improper use.

E. CTI Codes. Each Participant must identify each Transaction on the record 

of transactions submitted to the Exchange with the correct CTI Code. The 

CTI Codes are as follows:

CTI 1: Electronic Trading and Privately Negotiated – Applies to 

Transactions initiated and executed by a Participant for its Cleared Swaps 

Proprietary Account, for an account controlled by a Participant, or for an 

account in which the Participant has an ownership or financial interest.

CTI 2: Electronic Trading and Privately Negotiated – Applies to 

Transactions initiated and executed by a Participant trading for a clearing 

member's house account. 

CTI 3: Electronic Trading and Privately Negotiated – Applies to Orders 

entered by a Participant or Authorized User for another Participant or an 

account controlled by such other Participant.

CTI 4: Electronic Trading and Privately Negotiated – Applies to 

Transactions initiated and executed by a Participant trading for any other 

type of Customer.

F. A Swap will not be void or voidable due to: (1) a violation by the Exchange of 

the provisions of section 5h of the CEA; (2) any CFTC proceeding to alter or 

supplement a rule, term or condition under section 8a(7) of the CEA or to 

declare an emergency under section 8a(9) of the CEA; or (3) any other 

proceeding the effect of which is to: (i) alter or supplement a specific term or 

condition or trading rule or procedures, or (ii) require a swap execution 

facility to adopt a specific term or condition, trading rule or procedure, or to 

take or refrain from taking a specific action.
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Rule 5.3 Order Type

A. The following types of Orders may be entered on the Platform with respect 

to any Exchange Contract.

1. Market Order. An Order entered on the Platform to buy or sell 

immediately and executed at the best price currently available on the 

Platform.

2. Limit Order. An Order to buy or sell an Exchange Contract at a 

specified price or better. A Limit Order must be entered on the 

Platform with a defined limit price. A Limit Order will be executed 

when it is entered, to the extent that there are resting contra-Orders, 

with any balance of such Limit Order to remain as a resting Order 

until such Limit Order is executed or cancelled. All Limit Orders shall 

be cancelled by the Exchange at the conclusion of Trading Hours on 

each Business Day.

3. Sweep, Cross and Print (“SCP”) Order. An Order to cross a 

pre-negotiated trade available only for Permitted Transactions. An 

SCP Order must be entered on the Platform with the Order size, limit 

price, buy or sell indication, and committed counterparty. One side 

of the SCP Order is entered on the Platform and matched with and 

executed against Orders in the central limit order book that are better 

than the pre-negotiated price, to the extent there are any such 

Orders. When the pre-negotiated price is the best bid (i.e., there are 

no contra-Orders at the best bid in the central limit order book), in the 

case of a sell SCP Order, or the best ask (i.e., there are no 

contra-Orders at the best ask in the central limit order book), in the 

case of a buy SCP Order, the remaining balance of the SCP Order 

shall be executed against the committed counterparty’s side of the 

SCP Order. The agreed-upon terms of any SCP Order must be 

submitted to the Platform by one Participant within five minutes of the 

conclusion of any pre-negotiation. The counterparty to the 
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transaction must then approve the terms before the SCP Order is 

executed. 

4. Quote. A Limit Order as defined in this Rule 5.3A that is entered on 

the Platform by a Liquidity Provider.

B. The Exchange’s central limit order book matches orders on the basis of a 

price and time priority algorithm.

C. The Exchange does not accept indications of interest or indicative quotes.

D. Other types of Orders as may be approved by the Exchange from time to 

time as disclosed in a Participant Notice and on the Website.

Rule 5.4 Trading Contracts on Behalf of Cleared Swaps Customers

A. Individuals or entities that have not been approved and authorized as 

Participants of the Exchange may trade Exchange Contracts only as 

Customers of an FCM Participant, and all Customer Orders must be 

transmitted to the Exchange by each Customer’s FCM Participant. Each 

FCM Participant shall maintain a secure connection to the Exchange and 

comply with all technical and other requirements established by the 

Exchange for this purpose. 

B. Upon submission of a Cleared Swaps Customer Order, the Exchange will 

conduct a review of the FCM Participant’s Cleared Swaps Customer 

Collateral Account to ensure that the FCM Participant’s Cleared Swaps 

Customer can fully collateralize the Order prior to entering into any 

Transaction. If the FCM Participant’s Cleared Swaps Customer Collateral 

Account does not have the necessary funds for the Order, the Exchange 

will not accept the Cleared Swaps Customer’s Order. 

Rule 5.5 Execution Methods

A. The Exchange facilitates the execution of Orders through a central limit 

order book on the Platform, including SCP Orders as set forth in Rule 5.3. 

The Exchange does not facilitate the execution of block trades as defined in 

CFTC Regulation 43.2.
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B. A written record of all of the terms of each Transaction entered into on the 

Exchange or pursuant to the Rules will be available immediately upon 

execution through the Participant Portal. Such record shall legally 

supersede any previous agreement and serve as a confirmation of each 

such Transaction. The Exchange will send confirmation messages to 

Participants upon execution of a Transaction via the API and/or Portal, if 

such Participants are online at the time. However, please note that if any 

applicable Participant is not online at the time of execution, such Participant 

will see the confirmation(s) when it next logs on to the Platform.

Rule 5.6 Trading Hours

A. The Trading Hours of the Exchange are as follows: Monday through Friday 

9:30 a.m. – 4:00 p.m. New York/Eastern Time. The Exchange observes 

U.S. holidays and will post holiday schedules on the Website and via 

Participant Notices. Opening and closing times may also be affected on the 

Business Day(s) prior to or after a holiday.

CHAPTER 6 Clearing and Delivery

Rule 6.1 Clearance and Substitution

A. Upon submission of an Order, the Exchange will conduct a review of the 

Participant’s Collateral Account to ensure that the Participant can fully 

collateralize the Order prior to entering into any Transaction. If the 

Participant’s Collateral Account does not have the necessary funds and/or 

collateral for the Order, the Exchange will not accept the Order.

B. Upon the successful matching of Orders, the Exchange’s Derivatives 

Clearing Organization shall immediately, through the process of Novation, 

be substituted as and assume the position of seller to the Participant buying 

and buyer to the Participant selling the relevant Exchange Contract. Upon 

such substitution, the buying and selling Participants shall be released from 

their Obligations to each other, and such Participants shall be deemed to 

have bought the Exchange Contract from or sold the Exchange Contract to 
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the Exchange’s DCO, as the case may be, and the Exchange’s DCO shall 

have all the rights and be subject to all the liabilities of such Participants with 

respect to such Transactions. Such substitution shall be effective in law for 

all purposes. The Participants of the Swap are deemed to consent to the 

Novation by entering the applicable Orders on the Exchange Platform and 

the Exchange DCO consents to the Novation by accepting the Orders on 

the Exchange Platform. 

C. Swaps with the same terms and conditions, as defined by the Exchange 

Contract Specifications, submitted to the Exchange’s Derivatives Clearing 

Organization for clearing, are economically equivalent within the 

Exchange’s Derivatives Clearing Organization and may be offset with each 

other within the Exchange’s Derivatives Clearing Organization.

D. Upon acceptance of a Swap by the Exchange’s Derivatives Clearing 

Organization for clearing:

1. The original Swap is extinguished;

2. The original Swap is replaced by an equal and opposite Swap 

between the Exchange’s DCO and each Participant; and

3. All terms of a cleared Swap must conform to the Exchange Contract 

Specifications.

E. If a Swap is rejected for clearing by the Exchange’s Derivatives Clearing 

Organization for any reason, such Swap is void ab initio.

Rule 6.2 Settlement of Exchange Contracts

A. The Exchange shall maintain, on its system, a record of each Participant’s 

account balances and Exchange Contracts.

B. On the Settlement Date, the Exchange will notify all Participants of the final 

amount payable.

C. With respect to an Exchange Contract that is physically settled, the 

Exchange shall transfer the Underlying to the Participant Account on the 
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Exchange’s books and records of the Participant that exercised its 

Exchange Contract that is an option on the next Business Day after the 

Settlement Date. For an expired Exchange Contract that is an option, the 

Exchange will transfer the Underlying to the Participant Account on the 

Exchange’s books and records of the Participant that initially posted the 

Underlying in its capacity as the option call writer.

D. After the notice period on the last trading day of an expiring Series of 

Exchange Contracts that are options, the Exchange will delete all such 

Exchange Contracts that have not been exercised from each Participant’s 

Participant Account. An Exchange Contract that is an option and that has 

not been exercised on or before the last trading day will expire with no value 

in accordance with the Contract Specifications.

Rule 6.3 Deposit Procedures

A. A Participant must submit a deposit notification through the Participant 

Portal before the Participant may deposit funds or any Underlying with the 

Exchange. A Participant must deposit funds or Underlying on the same day 

as the Participant submits to the Exchange a deposit notification to the 

Exchange.

B. Deposits occur, and funds and Underlying are available for use with respect 

to Trading Privileges and Clearing Privileges, no later than the next 

Business Day after a Participant submits a deposit notification and deposits 

funds or Underlying with the Exchange in accordance with Rule 6.3A if the 

Participant has taken such actions during Trading Hours. For deposit 

notifications submitted and funds or Underlying transferred outside of 

Trading Hours, deposits occur, and funds and Underlying are available for 

use with respect to Trading Privileges and Clearing Privileges, no later than 

the second Business Day after the Participant follows the procedures in 

Rule 6.3A. 
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C. Participants are responsible for all transfers of funds from their 

Exchange-approved accounts to the Collateral Account or transfers of any 

Underlying to the Exchange for credit to the relevant Participant Account.

D. In the event a Participant deposits funds or Underlying to the Exchange 

without submitting a deposit notification, the Participant agrees to: (1) 

cooperate with the Exchange to resolve any issues that may arise; and (2) 

agree that the Exchange will send the funds or Underlying back to the 

account or address from which it was transferred within two (2) Business 

Days if there has been no resolution.

Rule 6.4 Withdrawal Procedures

A. Only an Authorized Representative may submit a withdrawal notification 

through the Participant Portal before the Exchange transfers funds or 

Underlying to a Participant or a Cleared Swaps Customer. Upon receipt of a 

withdrawal notification, the Exchange no longer permits funds or Underlying 

in the amount listed in the withdrawal notification to be used for Trading 

Privileges and Clearing Privileges.

B. Participants are responsible for providing accurate account numbers or 

wallet addresses, as the case may be, to allow the Exchange to effect 

transfers to the Participants or Cleared Swaps Customers.

C. Withdrawals occur, and funds and Underlying are available, no later than 

the next Business Day after a Participant has submitted a withdrawal 

notification if the Participant submits a withdrawal notification during 

Trading Hours. For withdrawal notifications submitted outside of Trading 

Hours, withdrawals occur no later than the second Business Day after the 

Participant submits a withdrawal notification. 

D. With respect to withdrawals of Bitcoin collateral, the Exchange shall deliver 

to the Participant a cryptographically signed Bitcoin transaction, which shall 

include the two signatures, the LedgerX “from” address, the Participant “to” 

address and the appropriate Bitcoin withdrawal amount. 
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E. If a Participant fails to adhere to the withdrawal procedures set forth herein 

or in the Exchange Contract Specifications, as applicable, the Exchange 

will take reasonable measures to effect the withdrawal; however, if unable 

to effect the withdrawal, the Participant’s collateral may become the sole 

property of the Exchange, to the extent permitted by Applicable Law. The 

Exchange may apply the collateral (including any Underlying held in such 

Participant’s Participant Account) against the Participant’s Obligations.

Rule 6.5 Deliveries

A Participant that is required to make or accept delivery under an Exchange Contract 

(either for itself or on behalf of a Cleared Swaps Customer) agrees that it is required to 

provide full collateralization prior to entering any such Transaction or exercising any 

Exchange Contract so as to allow the Exchange to complete all necessary delivery 

requirements as set forth in the Rules. Deliveries will occur on the Exchange’s books and 

records unless otherwise specified in the Exchange Contract Specifications. Any failure 

to deposit funds or collateral in accordance with Rule 6.3 or withdraw funds or collateral in

accordance with Rule 6.4 may be deemed a default of an Obligation and an act 

detrimental to the interest or welfare of the Exchange.

Rule 6.6 Reconciliation

The Exchange shall reconcile the positions and cash and collateral balances of each 

Participant at the end of each Business Day. The Exchange shall make available to each 

Participant the positions and cash and collateral balances of each such Participant and 

any Cleared Swaps Customers of the Participant. All Participants shall be responsible for 

reconciling their records of their positions and cash and collateral balances with the 

records of positions and cash and collateral balances that the Exchange makes available 

to Participants.

Rule 6.7 Swap Data Reporting

A. The Exchange shall report Regulatory Swap Data for Swaps to a single 

Swap Data Repository for purposes of complying with the CEA and 

applicable CFTC Regulations governing the regulatory reporting of swaps.
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The Exchange shall report all data fields as required by Appendix A to Part 

43 of CFTC Regulations and Appendix 1 to Part 45 of CFTC Regulations, 

as applicable, including, but not limited to, Swap counterparties, Exchange 

Contract type, option method, option premium, LEIs, User IDs, buyer, seller, 

USIs, unique product identifiers, underlying asset description, the Swap 

price or yield, quantity, maturity or expiration date, the size, settlement 

method, execution timestamp, timestamp of submission to the SDR, the 

CTI Code, Participant Accounts, and whether a Participant is a swap dealer, 

major swap participant or a financial entity. The Exchange shall identify 

each counterparty to any Transaction in all recordkeeping and all 

Regulatory Swap Data reporting using a single LEI as prescribed under 

CFTC Regulation 45.6. As soon as technologically practicable after 

execution, the Exchange also shall transmit to both Swap counterparties 

and the LedgerX DCO, the USI for the Swap created pursuant to CFTC 

Regulation 45.5 and the identity of the SDR. For Swaps involving allocation, 

the Exchange will transmit the USI to the Reporting Counterparty and the 

agent as required by CFTC Regulation 45.5(d)(1).

B. The Exchange shall from time to time designate a Swap Data Repository in 

respect of one or more Swaps and shall notify Participants of such 

designation. Currently, the Exchange reports all Regulatory Swap Data for 

all Swaps to ICE Trade Vault.

C. Participants that become aware of an error or omission in Regulatory Swap 

Data for a Transaction shall promptly submit corrected data to the 

Exchange. Participant shall not submit or agree to submit a cancellation or 

correction in order to gain or extend a delay in pubic dissemination of 

accurate Swap Transaction and Pricing Data or to otherwise evade the 

reporting requirements of Part 43 of CFTC Regulations. LedgerX will report 

any errors or omissions in Regulatory Swap Data to the same SDR to which 

it originally submitted the Data, as soon as technologically practicable after 

discovery of any such error or omission.
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D. The Exchange sends the Regulatory Swap Data as set forth in Rule 6.7A to 

the Swap Data Repository as soon as technologically practicable after a 

trade has been executed on the Platform, or pursuant to the Exchange 

Rules. Following the transmittal of the Data to the Swap Data Repository, 

the Exchange will make available the Swap Transaction and Pricing Data to 

all Participants accessing the Platform. However, due to transmission and 

posting timing of the Swap Data Repository, Participants should be aware

that the Swap Transaction and Pricing Data may be available on the 

Exchange Platform prior to being publicly disseminated by the Swap Data 

Repository.

CHAPTER 7 Margin

Rule 7.1 Full Collateralization of Exchange Contracts Required

Each Participant, on behalf of itself or Cleared Swaps Customers, shall deposit funds or 

the applicable amount of the Underlying required to fully collateralize Orders pursuant to 

Exchange Contract Specifications, including payment of premiums, payment in exchange 

for delivery or to fulfill delivery obligations, as applicable, prior to submission of such 

Orders to the Exchange. If an Exchange Contract is an option, a Participant shall not be 

permitted to exercise such option if the Participant has not already deposited sufficient 

collateral to fully collateralize the Underlying or funds necessary to complete delivery or 

payment of the option, as applicable. Collateral transfers made by a Participant to the 

Exchange or by the Exchange to a Participant are irrevocable and unconditional when 

effected.

Rule 7.2 Collateral

A. Subject to the terms and conditions of Exchange-approved margin 

collateral, the Exchange will accept from Participants the following as 

margin collateral: (1) cash; (2) the Underlying; and (3) any other form of 

collateral deemed acceptable by the Risk Management Committee upon 

the Risk Management Committee’s approval of such collateral as 

communicated through Participant Notices and on the Website. The 

Exchange will value margin collateral as it deems appropriate.
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B. Except as otherwise provided herein, Collateral must be and remain 

unencumbered. Each Participant posting collateral hereby grants to the 

Exchange a continuing first priority security interest in and lien on, lien on, 

right of setoff against and collateral assignment of all of such Participant’s 

right, title and interest in and to any property and collateral deposited with 

the Exchange by the Participant, whether now owned or existing or 

hereafter acquired or arising, including without limitation the following: (i) 

such Participant’s Participant Account and all securities entitlements held 

therein and all funds held in a Collateral Account; (ii) all Digital Currencies 

that, in each case, are held in or otherwise credited to a virtual “wallet” or 

other account maintained by the Exchange; (iii) such virtual “wallet” or other 

account; and (iv) all proceeds of the foregoing. A Participant shall execute 

any documents required by the Exchange to create, perfect and enforce 

such lien. 

C. Each Participant hereby agrees that with respect to any Digital Currency 

and any other financial asset which is or may be credited to the Participant’s 

Participant Account, the Exchange shall have control pursuant to Section 

9-106(a) and 8-106(e) of the UCC and a perfected security interest 

pursuant to Section 9-314(a) of the UCC.

D. A Participant must transfer the collateral to the Exchange or to a Collateral 

Account and the Exchange will hold collateral transferred to the Exchange 

on behalf of the Participant. The Exchange will credit to the Participant the 

collateral that such Participant deposits. Collateral shall be held by the 

Exchange until a Participant submits a withdrawal notification unless 

otherwise stipulated by these Rules.

E. The Exchange will not be responsible for any diminution in value of 

collateral that a Participant deposits with the Exchange. Any fluctuation in 

markets is the risk of each Participant. Any interest earned on Participant 

collateral may be retained by the Settlement Bank or the Exchange.
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F. The Exchange has the right to liquidate a Person’s Exchange Contracts or 

non-cash collateral to the extent necessary to close or transfer Exchange 

Contracts, fulfill obligations to the Exchange or other Participants, and/or to 

return collateral in the event that (1) the Person ceases to be a Participant; 

(2) the Exchange suspends or terminates the Person’s Trading Privileges 

or Clearing Privileges; or (3) the Exchange determines in its sole discretion 

that it is necessary to take such measures. 

Rule 7.3 Segregation of Participant Funds

The Exchange shall separately account for and segregate from the Exchange’s 

proprietary funds all Participant funds used to purchase, margin, guarantee, secure or 

settle Exchange Contracts, and all money accruing to such Participant as the result of 

Exchange Contracts so carried in a Collateral Account. The Exchange shall maintain a 

proprietary account that will be credited with fees or other payments owed to the 

Exchange that are debited from the Collateral Account as a result of Participant trades 

and settlements of Exchange Contracts. The Exchange shall maintain a record of each 

Participant’s account balances and Exchange Contracts. The Exchange shall not hold, 

use or dispose of Participant funds except as belonging to Participants.

Rule 7.4 Concentration Limits

The Exchange may apply appropriate limitations or charges on the concentration of 

assets posted as collateral, as necessary, in order to ensure its ability to liquidate such 

assets quickly with minimal adverse price effects, and may evaluate the appropriateness 

of any such concentration limits or charges, on a periodic basis. In the event that the 

Exchange determines in its sole discretion that the Participant’s deposit is in material 

excess of the amount necessary to collateralize the Participant’s Exchange Contracts, 

the Exchange shall have the right to (1) transfer non-cash collateral, including Digital 

Currencies, back to a Participant, and Participant agrees to accept such transfer, or (2) 

take other action the Exchange deems to be necessary to safeguard the collateral. The 

Exchange shall be entitled to charge fees related to holding non-cash collateral in 

material excess of the amount necessary to collateralize a Participant’s Exchange 

Contracts.
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CHAPTER 8 Business Conduct and Trading Practices

Rule 8.1 Scope

This Chapter 8 applies to all Transactions except as may be provided herein. Participants 

and, where applicable, Authorized Users, shall adhere to and comply fully with this 

Chapter 8.

Rule 8.2 Procedures

A. With respect to trading on the Platform, the Exchange may adopt 

procedures relating to Transactions and trading on the Platform, including, 

without limitation, procedures to:

1. determine the daily settlement price of an Exchange Contract;

2. disseminate the prices of bids and offers on, and trades in, 

Exchange Contracts;

3. record, and account for, Exchange Contracts and activity on the 

Exchange;

4. perform market surveillance and regulation on matters affecting 

Exchange Contracts and activity on the Exchange;

5. establish limits on the number and/or size of Orders that may be 

submitted by a Participant on the Platform;

6. establish limits on the number of Exchange Contracts that may be 

held by a Participant; and

7. establish a limit on the maximum daily price fluctuations for any 

Exchange Contract and provide for any related restriction or 

suspension of trading in the Exchange Contract.

B. The Exchange may, in its discretion and at any time, amend any procedures 

adopted pursuant to Rule 8.2A, and will publish the amendments in a 

Participant Notice and on the Website.
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Rule 8.3 Prohibited Trading Activity; Prohibitions on Fictitious Transactions, 

Fraudulent Activity and Manipulation

No Person shall engage in any of the following activities in connection with or related to 

any Exchange activity:

A. any fraudulent act or scheme to defraud, deceive, trick or mislead;

B. trading ahead of a Customer or front-running;

C. fraudulent trading;

D. trading against a Customer Order or entering into a cross-trade, except as 

permitted by Rule 8.11;

E. accommodation trading;

F. fictitious Transactions;

G. pre-arranged or non-competitive Transactions (except for Transactions 

specifically authorized under these Rules);

H. cornering, or attempted cornering, of any Exchange Contract;

I. violations of bids or offers;

J. spoofing;

K. any manipulation proscribed under CEA Section 9(a)(2) or CFTC 

Regulations 180.1(a) or 180.2, whether attempted or completed;

L. demonstrating intentional or reckless disregard for the orderly execution of 

Transactions during the closing period;

M. making fictitious or trifling bids or offers, offering to enter into an Exchange 

Contract at a price variation less than the minimum price fluctuation 

permitted for such Exchange Contract under the Rules, or knowingly 

making any bid or offer for the purpose of making a market price that does 

not reflect the true state of the market; or

N. other conduct that constitutes a disruptive trading practice or is otherwise 

prohibited under CEA Section 4c(a)(5) or applicable CFTC Regulations.
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Rule 8.4 Prohibition on Money Passing, Pre-Arranged, Pre-Negotiated and 

Non-Competitive Trades

A. No Person may enter Orders for the purpose of entering into Transactions 

without a net change in either party’s open positions but a resulting profit to 

one party and a loss to the other party, commonly known as a “money 

pass”.

B. No Person shall pre-arrange or pre-negotiate any purchase or sale or 

non-competitively execute any Transaction, except to effect an SCP Order 

and all pre-execution communications related thereto take place on the 

Exchange Pre-Trade Telecommunication Systems.

Rule 8.5 Acts Detrimental to the Welfare or Reputation of the Exchange Prohibited

No Participant, Authorized Representative, Authorized User or ISV shall engage in any 

Exchange activity that tends to impair the welfare, reputation, integrity or good name of 

the Exchange.

Rule 8.6 Misuse of the Platform

Misuse of the Platform is strictly prohibited. It shall be deemed an act detrimental to the 

Exchange to permit unauthorized use of the Platform, to assist any Person in obtaining 

unauthorized access to the Platform, to trade on the Platform without an agreement, to 

alter the equipment associated with the Platform (except with the Exchange’s consent), to 

interfere with the operation of the Platform, to intercept or interfere with information 

provided thereby, or in any way to use the Platform in a manner contrary to these Rules.

Rule 8.7 Supervision; Information Sharing

A. A Participant shall be responsible for establishing, maintaining and 

administering reasonable supervisory procedures to ensure that its 

Authorized Users comply with these Rules and Applicable Law, and such 

Participant may be held accountable for the actions of such Authorized 

Users with respect to the Exchange.
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B. Participants and Authorized Users shall cooperate fully with the Exchange 

or a Regulatory Agency in any investigation, call for information, inquiry, 

audit, examination or proceeding.

C. Participants and Authorized Users shall ensure that any information 

disclosed to the Exchange is accurate, complete and consistent. No 

existing or prospective Participant or Authorized User shall make any false 

statements or misrepresentations in any application, report or other 

communication to the Exchange.

Rule 8.8 Business Conduct

A. Conducting trading activities in an honorable and principled manner 

consistent with these Rules is the essence of ethical conduct with respect to 

the Exchange. Participants, Authorized Users and other Persons subject to 

the Exchange’s jurisdiction shall act with ethical integrity with regard to their 

Exchange activity, and shall adhere to the following ethical standards:

1. A Participant, Authorized User and any other Person subject to the 

Exchange’s jurisdiction shall abstain from engaging in conduct that is 

a violation of these Rules or Applicable Law, and will conduct its 

business in accordance with Applicable Law, and in good faith, with 

a commitment to honest dealing.

2. No Participant, Authorized User or other Person subject to the 

Exchange’s jurisdiction shall engage in any fraudulent act or engage 

in any scheme to defraud, deceive, trick or mislead in connection 

with or related to any Exchange activity.

3. No Participant, Authorized User or other Person subject to the 

Exchange’s jurisdiction shall knowingly enter, or cause to be 

entered, bids or offers on the Platform other than in good faith for the 

purpose of executing bona fide Transactions.
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Rule 8.9 Trading Practices

A. No Participant, Authorized User or other Person subject to the Exchange’s 

jurisdiction shall knowingly effect or induce the purchase or sale of any 

Exchange Contract for the purpose of creating or inducing a false, 

misleading, or artificial appearance of activity in such Exchange Contract, 

or for the purpose of unduly or improperly influencing the market price of 

such Exchange Contract or for the purpose of making a price which does 

not reflect the true state of the market in such Exchange Contract. No such

Participant, Authorized User or other Person shall arrange and execute 

simultaneous offsetting buy and sell Orders in an Exchange Contract with 

the intent to artificially affect reported revenues, trading volumes or prices.

B. No Participant, Authorized User or other Person subject to the Exchange’s 

jurisdiction shall attempt to manipulate, or manipulate the market, in any 

Exchange Contract or Underlying. No such Participant, Authorized User or 

other Person 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 Exchange 

Contract.

C. Orders entered on the Platform for the purpose of upsetting the equilibrium 

of the market in any Exchange Contract or creating a condition in which 

prices do not or will not reflect fair market values are prohibited, and any 

Person 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.

D. No Participant, Authorized User or other Person subject to the Exchange’s 

jurisdiction shall engage in any trading, practice, or conduct that constitutes 

a disruptive or a manipulative trading practice, as defined by the CEA, 
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CFTC Regulations or in any interpretive guidance issued by the 

Commission.

E. No Participant, Authorized User or other Person subject to the Exchange’s 

jurisdiction shall make any knowing misstatement of a material fact to the 

Exchange, any Exchange Official, or any Board committee.

F. No Participant, Authorized User or other Person subject to the Exchange’s 

jurisdiction shall knowingly disseminate false or misleading reports 

regarding Transactions, the Exchange or one or more markets in any 

Exchange Contract.

G. Abusive trading practices are prohibited on the Platform. No Participant, 

Authorized User or other Person subject to the Exchange’s jurisdiction shall 

place or accept buy and sell Orders in the same product and expiration 

month, and for options, the same strike, when they know or reasonably 

should know that the purpose of the Orders is to avoid taking a bona fide 

market position exposed to market risk (transactions commonly known or 

referred to as “wash sales”). Buy and sell Orders that are entered with the 

intent to negate market risk or price competition shall be deemed to violate 

the prohibition on wash sales. Additionally, no Participant, Authorized User 

or other Person subject to the Exchange’s jurisdiction shall knowingly 

execute or accommodate the execution of such Orders by direct or indirect 

means.

H. No Participant, Authorized User or other Person subject to the Exchange’s 

jurisdiction shall disclose an Order to buy or sell, except to an Exchange 

Representative or official of the CFTC or as necessary to efficiently execute 

the Order, nor shall any such Participant, Authorized User or other Person 

solicit or induce another Person to disclose Order information. No 

Participant, Authorized User or other Person shall take action or direct 

another to take action based on non-public Order information, however 

acquired, except as permitted by Rule 8.4B. The mere statement of 
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opinions or indications of the price at which a market may open or resume 

trading does not constitute a violation of this Rule.

Rule 8.10 Customer Order Priority

A. No Participant, Authorized User or other Person subject to the Exchange’s 

jurisdiction shall knowingly enter an Order on the Platform for its own 

account, an account in which it has a direct or indirect financial interest, or 

an account over which it has discretionary trading authority (a 

“Discretionary Order”), including, without limitation, an Order allowing 

discretion as to time and price, when such Person is in possession of a 

Customer Order that can be but has not been entered on the Platform.

B. For purposes of this Rule 8.10, a Person shall not be deemed to knowingly 

buy or sell an Exchange Contract or execute a Discretionary Order if:

1. such Person is a corporate or other legal entity consisting of more 

than one individual trader;

2. such Person has in place appropriate “firewall” or separation of 

function policies and procedures; and

3. the Person or Authorized User buying or selling the Exchange 

Contract or executing the Discretionary Order in question has no 

direct knowledge of the Order to buy or sell the same Exchange 

Contract for any other Person at the same price or at the market 

price or of the Customer Order for the same Exchange Contract, as 

the case may be.

C. Nothing in this Rule 8.10 limits the ability of an “eligible account manager” to 

bunch Orders in accordance with CFTC Regulation 1.35(b)(5).

Rule 8.11 Trading Against Customer Orders

A. No Person in possession of a Customer Order shall knowingly take, directly 

or indirectly, the opposite side of such Order for its own account, an account 
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in which it has a direct or indirect financial interest, or an account over which 

it has discretionary trading authority.

B. The foregoing restriction does not prohibit permissible pre-execution 

discussions conducted in accordance with Rule 8.4.

Rule 8.12 Prohibition on Withholding of Customer Orders

No Executing Participant or FCM Participant shall withhold or withdraw from the market 

any Customer Order, or any part of an Order, for the benefit of any Person other than the 

Customer.

Rule 8.13 Execution Priority

A. Executable Customer Orders must be entered on the Platform immediately 

upon receipt. An FCM Participant or Executing Participant that receives a 

Customer Order that is not immediately entered on the Platform must create 

a non-erasable record of the Order, including the Order instructions, 

account designation, date, time of receipt and any other information that 

may be required by the Exchange.

B. Customer Orders received by an FCM Participant or Executing Participant 

shall be entered on the Platform in the sequence received. Customer 

Orders that cannot be immediately entered on the Platform must be entered 

when the Orders become executable in the sequence in which the Orders 

were received.

C. Non-discretionary Customer Orders received by an FMC Participant or 

Executing Participant shall be entered on the Platform in the sequence in 

which they were received. Non-discretionary Customer Orders that cannot 

be immediately entered on the Platform must be entered when the Orders 

become executable in the sequence in which the Orders were received.

Rule 8.14 Crossing Orders

Independently initiated Orders on opposite sides of the market for different beneficial 

account owners that are immediately executable against each other may be entered 
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without delay. Orders must not involve pre-execution communications, except as 

permitted by Rule 8.4B.

Rule 8.15 Position Limits

A. To reduce the potential threat of market manipulation or congestion, 

LedgerX shall adopt for each of its Exchange Contracts, as is necessary 

and appropriate, position limitations or position accountability levels for 

speculators. The Exchange may establish position limits for one or more 

Exchange Contracts at a level not higher than any limit set by the CFTC for 

any Exchange Contract. The position limit levels shall be set forth in a 

Position Limit and Position Accountability Level Table as may be amended 

from time to time by the Exchange in a Participant Notice and on the 

Website. The Exchange may grant exemptions from position limits in 

accordance with CFTC Regulations.

B. A Participant seeking an exemption from position limits, including position 

limits established pursuant to a previously approved exemption, must file 

the required application with the Exchange in the form and manner as the 

Exchange may require from time to time and receive approval before 

exceeding such position limits. Notwithstanding the foregoing, a Participant 

who establishes an exemption-eligible position in excess of position limits 

and files the required application with the Exchange shall not be in violation 

of this Rule, provided the filing occurs within one Business Day after 

assuming the position. In the event that the positions in excess of the 

position limits are not deemed to be exemption-eligible, the applicant and 

the Executing Participant, if any, will be in violation of speculative position 

limits for the period of time in which the excess positions remained open.

C. A Participant who owns or controls aggregate positions in an Exchange 

Contract in excess of the reportable levels set forth in the Position Limit and 

Position Accountability Level Table or where such Person otherwise holds 

substantial positions in Exchange Contracts shall:
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1. keep records, including records of such Participant’s activity in the 

Underlying and related derivative markets, and make such records 

available, upon request, to the Exchange;

2. provide to the Exchange, in a timely manner upon request by the 

Exchange and in a form and manner acceptable to the Exchange, 

information relating to the positions owned or controlled by such 

Participant, including but not limited to the nature and size of the 

position, the trading strategy employed with respect to the position, 

and hedging information, if applicable;

3. be deemed to have consented, when so ordered by the Exchange, in 

its sole discretion, not to further increase the positions, to comply 

with any prospective limit which exceeds the size of the position 

owned or controlled, or to liquidate any open position which exceeds 

position limits; and

4. liquidate Exchange Contracts, if applicable, in an orderly manner.

D. This Rule 8.15 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, including but not limited to the Exchange taking steps to 

liquidate such Exchange Contracts on behalf and at the expense of such 

Participant to the extent necessary to eliminate such excess.

Rule 8.16 Position Accountability Levels

A. The Exchange shall establish position accountability levels for Exchange 

Contracts not subject to position limits pursuant to Rule 8.15. The position 

accountability levels shall be set forth in a Position Limit and Position 

Accountability Level Table as may be amended from time to time by the 

Exchange in a Participant Notice and on the Website.

B. A Participant that owns or controls aggregate positions in an Exchange 

Contract in excess of the reportable levels set forth in the Position Limit and 
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Position Accountability Level Table or where such Participant otherwise 

holds substantial positions in Exchange Contracts shall:

1. keep records, including records of such Person’s activity in the 

Underlying and related derivative markets, and make such records 

available, upon request, to the Exchange;

2. provide to the Exchange, in a timely manner upon request by the 

Exchange and in a form and manner acceptable to the Exchange, 

information relating to the positions owned or controlled by such 

Person, including but not limited to the nature and size of the 

position, the trading strategy employed with respect to the position, 

and hedging information, if applicable;

3. be deemed to have consented, when so ordered by the Exchange, in 

its sole discretion, not to further increase the positions, to comply 

with any prospective limit which exceeds the size of the position 

owned or controlled, or to liquidate any open position which exceeds 

position accountability levels; and

4. liquidate Exchange Contracts, if applicable, in an orderly manner.

C. 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, including but not limited to the Exchange taking steps to 

liquidate such Exchange Contracts on behalf and at the expense of such 

Participant to the extent necessary to eliminate such excess.

Rule 8.17 Aggregation of Positions

A. For purposes of Rule 8.15 and Rule 8.16, all positions in Exchange 

Contracts must be aggregated as required by CFTC Regulations. 

Aggregation of positions shall apply to:

1. All positions in accounts for which a Person by power of attorney or 

otherwise directly or indirectly owns the positions or controls the 

trading of the positions. Position limits shall apply to positions held 
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by two or more Persons acting pursuant to an expressed or implied 

agreement or understanding, in the same as if the positions were 

held by, or the trading of the positions was done by, a single Person.

2. Any Person holding positions in more than one account, or holding 

accounts or positions in which the Person by power of attorney or 

otherwise directly or indirectly has a ten percent or greater ownership 

or equity interest, must aggregate all such accounts or positions 

unless such Person is exempted from aggregating such positions by 

CFTC Regulations.

B. Any Participant seeking an exemption from aggregation of positions must 

(1) satisfy the exemptive requirements in CFTC Regulations; and (2) apply 

for an Exchange-approved exemption in the form and manner as may be 

prescribed by the Exchange from time to time.

Rule 8.18 Large Trader Reporting

A. Each Participant shall submit to the Exchange (i) a daily report of all 

positions that exceed the reportable position levels set forth on the Website 

and (ii) a copy of the CFTC Form 102 (Identification of Special Accounts, 

Volume Threshold Accounts and Consolidated Accounts and which shall 

include a Series S filing made pursuant to CFTC Regulation 20.5) filed by 

the Participant or Executing Participant with the CFTC for such Participant’s 

or Executing Participant’s Customers’ reportable accounts. The Form 102 

shall be submitted to the Exchange no later than the Business Day following 

the date on which the account becomes reportable.

B. Positions in Exchange Contracts at or above the reportable level set forth 

on the Website trigger reportable status. For a Participant in reportable 

status, all positions, regardless of size, in relevant Exchange Contracts 

must be reported to the Exchange, in addition to any regulatory obligations 

a Participant may have separate and apart from these Rules.
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C. All large trader reports shall be submitted in the form and manner specified 

by the Exchange. The Exchange may require that more than one large 

trader report be submitted daily. The Regulatory Oversight Committee may 

require certain Participants to provide reports on a lesser number of 

positions than otherwise required by the Exchange.

Rule 8.19 Compliance

Each Participant shall 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 the Rules. Each Participant 

shall 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 the Rules;

B. Maintain internal policies and procedures to promote compliance with the 

Rules;

C. Promptly disclose to the Exchange the details of any violations of the Rules 

involving a Participant’s activities on the Exchange, including its own 

activities or those of another Participant, and a Participant shall promptly 

disclose to the Exchange the details of any disciplinary sanctions, fines or 

other related determinations made by a Regulatory Agency or another 

market on which such Participant trades, or provision of market information 

to the Exchange or any of its Affiliates;

D. Provide an environment that encourages employees to engage in safe and 

confidential discussions and to disclose to senior management any trading 

practices that might violate the Rules;

E. Require any consultant, contractor and subcontractor to disclose all 

financial affiliations and conflicts of interest. Ensure that consultants, 

contractors or subcontractors do not cause any disclosure of information in 

violation of the Rules, including this code of conduct, and that confidentiality 

agreements are in effect where appropriate; and
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F. Establish clear lines of accountability for trading practices, including 

provisions relating to the responsibilities of corporate officers, with 

appropriate oversight by the board of directors or other senior corporate 

management committee.

CHAPTER 9 Discipline and Enforcement

Rule 9.1 General

A. Market Monitoring

1. The Exchange shall record and store a record of all data entered into 

the Platform, including the Participant’s and Authorized User’s 

identity, information on Transactions and any other information 

required and in accordance with the Exchange’s policies.

2. The Exchange shall conduct market surveillance and trade practice 

surveillance by monitoring and reviewing data entered into the 

Platform using programs designed to alert the Exchange of 

potentially unusual or violative trading activity.

3. The Exchange, through the Compliance Department, shall initiate a 

review of unusual or violative trading activity and, where appropriate, 

investigate such activity. The Compliance Department will also 

conduct investigations when Compliance Department staff at any 

time has reason to believe that inappropriate activity of any sort is 

taking place on the Exchange, Platform or Website.

B. All Persons within the Exchange’s jurisdiction are subject to this Chapter 9 if 

they are alleged to have violated, to have aided and abetted a violation, to 

be violating, or to be about to violate, any Rule or any provision of 

Applicable Law for which the Exchange possesses disciplinary jurisdiction.

C. Compliance Department

1. The Exchange has a Compliance Department consisting of one or 

more compliance staff. The Chief Compliance Officer is responsible 
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for overseeing the Compliance Department and shall report to the 

Regulatory Oversight Committee and the CEO.

2. The Compliance Department shall investigate unusual trading 

activity or other activity that the Compliance Department has 

reasonable cause to believe could constitute a violation of these 

Rules, and shall enforce the Rules and prosecute possible Rule 

violations within the Exchange’s disciplinary jurisdiction.

3. The Compliance Department shall conduct at least annual reviews of 

all Participants to verify compliance with Exchange Rules. The 

Compliance Department may conduct periodic reviews of all persons 

and firms subject to the Exchange’s Rules to verify compliance with 

the Exchange Rules. Such reviews may include, but are not limited 

to, reviews of randomly selected samples of audit trail data, reviews 

of the process by which User ID records are maintained, reviews of 

usage patterns associated with User IDs, and reviews of account 

numbers and Customer Type Indicator codes.

D. The Exchange, through the Compliance Department, Disciplinary Panel 

and Appeals Committee, shall conduct inquiries, investigations, disciplinary 

proceedings and appeals from disciplinary proceedings, summary 

impositions of fines, summary suspensions or other summary actions in 

accordance with this Chapter 9. Any Person subject to the Exchange’s 

jurisdiction under Rule 3.1 is subject to the Exchange’s disciplinary 

authority set forth in this Chapter 9.

E. The Exchange, through the Compliance Department, will commence an 

investigation upon (i) the discovery or receipt of information that indicates a 

reasonable basis for finding that a violation may have occurred or will occur, 

or (ii) the receipt of a request from Commission staff. 

F. No Exchange Official shall interfere with or attempt to influence the process 

or resolution of any Disciplinary Action, except to the extent provided under 
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these Rules with respect to a proceeding in which a Person is a member of 

the relevant Disciplinary Panel or Appeals Committee.

G. Representation by Counsel

1. A Respondent, upon being served with a Notice of Charges, has the 

right to retain and be represented by legal counsel or any other 

representation of its choosing, except any Director or a member of 

the Disciplinary Panel or person substantially related to the 

underlying investigations, such as material witnesses or 

respondents during such proceedings.

2. In the event of any appeal that requires the Exchange to retain legal 

counsel, the Respondent shall be responsible for the reasonable 

attorney’s fees incurred by the Exchange if the Respondent does not 

prevail in the dispute.

H. The Exchange may hold a Participant liable for, and impose sanctions 

against such Participant, for such Participant’s own acts and omissions that 

constitute a violation as well as for the acts and omissions of each 

Authorized User, Authorized Representative or other Person using a User 

ID of such Participant, or other agent or representative of such Participant 

(other than an Executing Participant acting as agent for such Participant), in 

each case, that constitute a violation as if such violation were that of the 

Participant.

I. Ex Parte Communications

1. A Respondent (and any counsel or representative of such 

Respondent) and the Compliance Department (and any counsel or 

representative of the Compliance Department) shall not knowingly 

make or cause to be made an ex parte communication relevant to 

the merits of a disciplinary proceeding or an appeal from a 

disciplinary proceeding to any member of the Disciplinary Panel or 

the Appeals Committee that hears such proceeding.
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2. Members of a Disciplinary Panel or Appeals Committee shall not 

knowingly make or cause to be made an ex parte communication 

relevant to the merits of a disciplinary proceeding or an appeal from a 

disciplinary proceeding to any Respondent (and any counsel or 

representative of such Respondent) or the Compliance Department 

(and any counsel or representative of the Compliance Department).

3. Any Person who receives, makes or learns of any communication 

that is prohibited by this Rule 9.1I shall promptly give notice of such 

communication and any response thereto to the Compliance 

Department and all parties to the proceeding to which the 

communication relates.

4. A Person shall not be deemed to have violated this Rule 9.1I if the 

Person refuses an attempted communication concerning the merits 

of a proceeding as soon as it becomes apparent that the 

communication concerns the merits.

Rule 9.2 Investigations

A. The Compliance Department will endeavor to complete any investigation 

within 12 months of the time unusual trading activity or a potential Rule 

violation is suspected, unless there exists significant reason to extend the 

investigation beyond such period. Upon the conclusion of any investigation, 

the Compliance Department shall draft a report detailing the facts that led to 

the opening of the investigation, the facts that were found during the 

investigation, and the Compliance Department’s analysis and conclusion. 

Such internal report shall be maintained in accordance with Rule 2.14.

B. The Compliance Department has the authority to:

1. initiate and conduct inquiries and investigations;

2. examine books and records of any Person subject to the Exchange’s 

jurisdiction under Rule 3.1;
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3. prepare investigative reports and make recommendations 

concerning initiating disciplinary proceedings;

4. issue a Notice of Charges to a Respondent;

5. prosecute alleged violations within the Exchange’s disciplinary 

jurisdiction; and

6. represent the Exchange on appeal from any disciplinary proceeding, 

summary imposition of fines, summary suspension or other 

summary action.

C. Each Person subject to the jurisdiction of the Exchange:

1. is obligated to appear and testify and respond in writing to 

interrogatories within the time period required by the Compliance 

Department in connection with:

a any Rule;

b any inquiry or investigation; or

c any preparation by and presentation during a Disciplinary 

Action;

2. is obligated to produce books, records, papers, documents or other 

tangible evidence in its possession, custody or control within the time 

period required by the Compliance Department in connection with:

a any Rule;

b any inquiry or investigation; or

c any preparation by and presentation during a Disciplinary 

Action; and

3. may not impede or delay any Disciplinary Action.

Rule 9.3 Disciplinary Panel

A. The Respondent disputes the Compliance Department’s findings with 

respect to a Disciplinary Action, the Exchange shall convene the 
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Disciplinary Panel to adjudicate the findings by the Compliance Department 

that are under dispute. The Chief Compliance Officer or an individual 

designated by the Chief Compliance Officer may be appointed to argue the 

matter on behalf of the Exchange.

1. Members of the Disciplinary Panel shall be individuals that do not 

have a direct interest (financial, personal or otherwise) in the matter, 

but in no event may be members of the Compliance Department or 

any Persons involved in adjudicating any other stage of the same 

proceeding.

2. In the event that members of the Disciplinary Panel do not satisfy the 

requirements of this Rule 9.3A.2, then the Regulatory Oversight 

Committee may substitute a new member for the Disciplinary Panel 

or act as the Disciplinary Panel, to the extent that the substituted 

member or the Regulatory Oversight Committee, as the case may 

be, does not have a direct interest (financial, personal or otherwise) 

in the matter.

B. Members of the Disciplinary Panel and the Compliance Department may 

not communicate regarding the merits of a matter brought before the 

Disciplinary Panel without informing the Respondent who is the subject of 

the communication of the substance of such communication and allowing 

the Respondent an opportunity to respond. The Compliance Department 

may compel testimony, subpoena documents, and require statements 

under oath from any Respondent or, to the extent the Respondent is a 

Participant, any of its Authorized Users, Authorized Representatives or 

other employees or agents.

C. The Compliance Department and other Exchange Representatives working 

under the supervision of the Compliance Department may not operate 

under the direction or control of any Participant, Authorized User, 

Authorized Representative or any other representative of a Participant, or 
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trade, directly or indirectly, in any commodity interest traded on or subject to 

the rules of any Designated Contract Market or Swap Execution Facility.

Rule 9.4 Notice of Charges

A. The Compliance Department shall issue a Notice of Charges to a 

Respondent by electronic mail and the U.S. Postal Service to that 

Respondent’s last known address if the Compliance Department 

determines that there is reasonable cause to believe that a Respondent has 

violated these Rules or Applicable Law. The Notice of Charges shall 

include:

1. the reason the investigation was initiated;

2. the Rule or Rules alleged to have been violated;

3. the Respondent’s response, if any, or a summary of the response;

4. a summary of the investigation conducted;

5. findings of fact and the Compliance Department’s conclusions as to 

each charge, including which of these Rules the Respondent 

violated, if any;

6. a summary of the Respondent’s, and any relevant Authorized User’s 

or Authorized Representative’s, disciplinary history, if any;

7. the penalty, if any, proposed by the Compliance Department; and

8. the Respondent’s right to a hearing.

B. If the Compliance Department institutes an investigation of any Affiliate of 

the Exchange, the Chief Compliance Officer shall notify the Commission’s 

Division of Market Oversight, or its successor division, of that fact. At the 

conclusion of any such investigation, the Chief Compliance Officer shall 

provide the Commission’s Division of Market Oversight, or its successor 

division, with a copy of the report or other documentation specified in Rule 

9.2.
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Rule 9.5 Contesting and Appeals

A. The Respondent subject to the investigation may contest the Notice of 

Charges by submitting an answer to the Notice of Charges by electronic 

mail to the Compliance Department within 15 days of receipt of the Notice of 

Charges. The Respondent’s answer must contain a detailed response to 

the findings and conclusions as to each charge and any other information 

the Respondent believes is relevant.

B. The Respondent has a right to examine all relevant books, documents, or 

other evidence in the possession or under the control of the Compliance 

Department, except that the Compliance Department may withhold from 

inspection any documents that:

1. are privileged or that constitute attorney work product;

2. were prepared by any Exchange Representative but which will not 

be offered in evidence in the disciplinary proceedings;

3. may disclose a technique or guideline used in examinations, 

investigations, or enforcement proceedings; or

4. disclose the identity of a confidential source.

C. If the Respondent fails to answer a Notice of Charges, then such failure 

shall be deemed an admission to the findings in the Notice of Charges, and 

the Compliance Department’s findings and conclusions shall become final 

and the Compliance Department shall impose the penalty (if any) that it 

proposes. The Compliance Department shall notify the Respondent of the 

imposition of any penalty and send a copy of the Notice of Charges by 

electronic mail and the U.S. Postal Service to that Respondent’s last known 

address.

D. If the findings of the Compliance Department are contested, the 

Compliance Department’s report and the Respondent’s response will be 

submitted to a Disciplinary Panel.
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E. The Disciplinary Panel will conduct a fair hearing with the Compliance 

Department or other Exchange Representative and the Respondent within 

15 calendar days of receipt of the Participant’s answer to the Notice of 

Charges contesting such Notice of Charges. Parties may attend 

telephonically. The formal rules of evidence shall not apply, but the hearing 

procedures must not deny a fair hearing.

1. The hearing shall be recorded, and all information submitted by the 

parties and the recording of the hearing shall be preserved by the 

Compliance Department, along with the Disciplinary Panel’s 

findings, as the record of the proceedings (the “hearing record”) in 

accordance with Rule 2.14.

2. The hearing record shall be transcribed if requested by the 

Commission or Respondent, if the decision is appealed pursuant to 

these Rules, or if the Commission reviews the decision pursuant to 

Section 8c of the CEA or Part 9 of CFTC Regulations.

F. Prior to the Disciplinary Panel’s hearing, the parties may (but need not) 

submit proposed findings, briefs, and exhibits (including affidavits), and 

during the hearing the parties may present witnesses. The Respondent is 

entitled to cross-examine witnesses. Persons within the Exchange’s 

jurisdiction who are called as witnesses must participate in the hearing and 

produce evidence. The Compliance Department shall use reasonable 

efforts to secure the presence of all other witnesses whose testimony would 

be relevant.

G. Within 15 days after the Disciplinary Panel’s hearing, the Disciplinary Panel 

shall issue a decision, which shall be delivered to the Respondent by 

electronic mail and the U.S. Postal Service to the Respondent’s last known 

address. The findings of the Disciplinary Panel shall contain the following 

information:

1. the Notice of Charges or a summary thereof, and any answer to the 

charges or a summary thereof;
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2. a summary of the evidence received;

3. findings and conclusions with respect to each charge, and a 

complete explanation of the evidence and other basis for such 

findings and conclusions;

4. an indication of each specific rule that the Respondent was found to 

have violated;

5. a declaration of any penalty to be imposed on the Respondent as the 

result of the findings and conclusions, including the basis for such 

penalty;

6. the effective date and duration of that penalty; and

7. a statement that the Respondent has the right to appeal any adverse 

decision by the Disciplinary Panel to the Appeals Committee within 

15 calendar days of receipt of the Disciplinary Panel’s decision.

H. The Disciplinary Panel’s decision shall be final on the date it is signed by the 

members of the Disciplinary Panel, the finality of which shall be effective on 

the day after the last day of the appeal period.

I. Either the Participant or the Compliance Department or the Exchange 

Representative may appeal the decision of the Disciplinary Panel within 15 

calendar days by filing an appeal by electronic mail with the Appeals 

Committee and forwarding a copy to the other parties to the appeal. The 

Appeals Committee may review a decision on its own initiative. Any 

penalties shall be stayed pending appeal unless the Regulatory Oversight 

Committee determines that a stay pending appeal would likely be 

detrimental to the Exchange, other Participants, or the public. The Appeals 

Committee shall review the hearing record and any information submitted 

by the Compliance Department or the Exchange Representative and the 

Respondent on appeal and issue a decision, which shall be final on the date 

of such issuance. The Respondent shall be notified of the Appeals 

Committee’s decision by electronic mail and by the U.S. Postal Service to 
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the Respondent’s last known address. The hearing record, any information 

submitted on appeal, and the Appeals Committee’s decision shall be 

preserved as the record on appeal in accordance with Rule 2.14. The 

decision shall contain the information listed in Rule 9.5 except for 9.5(G)(7), 

and will also contain:

1. a statement that any Person aggrieved by the action may have a 

right to appeal the action pursuant to Part 9 of the Commission’s 

Regulations, within 30 calendar days of service; and

2. a statement that any Person aggrieved by the action may petition the 

Commission for a stay pursuant to Part 9 of the Commission’s 

Regulations, within ten calendar days of service.

Rule 9.6 Settlements

A. The Exchange may enter into settlements with any Respondent any time 

following the issuance of a Notice of Charges and prior to any final decision 

by the Appeals Committee. The Respondent may initiate a settlement offer. 

Any settlement offer shall be forwarded to the Disciplinary Panel with a 

recommendation by the Compliance Department that the proposed 

settlement be accepted, rejected, or modified. A settlement offer may be 

withdrawn at any time before it is accepted by the Disciplinary Panel.

B. The Disciplinary Panel may accept or reject a proposed settlement, and the 

decision of the Disciplinary Panel shall be final. In addition, the Disciplinary 

Panel may propose a modification to the proposed settlement for 

consideration by the Respondent and the Compliance Department.

C. Any settlement under this Rule shall be in writing and shall state:

1. the Notice of Charges or a summary thereof;

2. the Respondent’s answer, if any, or a summary thereof;

3. a summary of the investigation conducted;
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4. findings and conclusions as to each charge, including each act the 

Respondent was found to have committed or omitted, be committing 

or omitting, or be about to commit or omit, and each of these Rules or 

Applicable Law that such act or practice violated, is violating, or is 

about to violate;

5. any penalty imposed and the penalty’s effective date; and

6. where customer harm is found to exist, full customer restitution 

where it can be reasonably determined.

D. Failed settlement negotiations, or withdrawn settlement offers, will not 

prejudice a Respondent or otherwise affect subsequent procedures in the 

Rule enforcement process.

Rule 9.7 Notice of Decision

A. The Compliance Department shall provide to the Respondent notice of the 

Disciplinary Action, decision of the Disciplinary Panel or Appeals 

Committee, or settlement in which sanctions are imposed, no later than two 

Business Days after it becomes final.

B. The Compliance Department shall provide to the NFA for inclusion in its 

Internet-accessible database of disciplinary matters within two Business 

Days after a decision becomes final, notice of any decision providing that a 

Respondent is suspended, expelled, disciplined or denied access to the 

Exchange.

C. The Compliance Department shall make public notice of the Disciplinary 

Action when the Disciplinary Action becomes final by posting on its Website 

the information required by CFTC Regulation 9.11, for a period of five 

consecutive Business Days in accordance with CFTC Regulation 9.13.

Rule 9.8 Penalties

As a result of a Disciplinary Action or as part of a settlement, the Compliance Department 

may impose one or more of the following penalties, commensurate with the violation 
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committed, in consideration with the Respondent’s disciplinary history, and including full 

customer restitution where customer harm is found and where such restitution can be 

reasonably determined:

A. a letter of warning, censure, or reprimand (although no more than one such 

letter may be issued to the same Person found to have committed the same 

Rule violation within a rolling 12-month period);

B. a fine or penalty for each Rule or Applicable Law violation sufficient to deter 

recidivism plus the monetary value of any benefit received as a result of the 

violation or the cost of damages to the unoffending counterparty;

C. suspension of Participant or Authorized User status or privileges for a 

specified period, including partial suspension of such privileges (for 

example, suspension of Trading Privileges or Clearing Privileges in 

particular types of Exchange Contracts or of placement of certain types of 

orders); 

D. a prohibition against FCM Participants and/or Executing Participants from 

entering Transactions on behalf of a Customer who has violated these 

Rules, the CEA or CFTC Regulation or other Applicable Law; and

E. revocation of Participant or Authorized User status or privileges, including 

partial revocation of such privileges (for example, revocation of Trading 

Privileges or Clearing Privileges in particular types of Exchange Contracts 

or of placement of certain types of orders).

Rule 9.9 Summary Suspension

A. The Compliance Department may summarily suspend or restrict a 

Participant’s or an Authorized User’s privileges if the Chief Compliance 

Officer believes suspension or restriction is necessary to protect the swaps, 

commodity futures or options markets, the Exchange, the public, or other 

Participants.

B. All access denials, suspensions, expulsions and other restrictions imposed 

upon a Participant or Authorized User by the Compliance Department 
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pursuant to these Rules shall restrict with equal force and effect, access to, 

and use of, the Exchange.

C. The Compliance Department may deny or terminate the status of a 

Participant, including an FCM Participant, Executing Participant or Liquidity 

Provider, and any Authorized User if (i) such Person is unable to 

demonstrate its ability to satisfy the applicable criteria set forth in Chapter 3 

of these Rules; (ii) such Person is unable to demonstrate its compliance 

with all other applicable Rules; (iii) such Person’s inability to demonstrate 

compliance with such criteria or Rules would, in the Exchange’s sole

discretion, bring the Exchange into disrepute or cause the Exchange to fail 

to be in compliance with the CEA or CFTC Regulations or other laws and 

regulations; (iv) such Person or any of its Authorized Users, as applicable, 

has committed a violation of the Rules; or (v) other good cause is shown as 

the Exchange may reasonably determine in its discretion.

D. Upon any suspension or revocation of an FCM Participant, any open Order 

on the Platform for such FCM Participant’s Cleared Swaps Customer(s) 

shall be cancelled by the Exchange. 

E. Whenever practicable the Compliance Department shall notify the 

Participant or Authorized User whose privileges are to be summarily 

suspended by electronic mail before the action is taken. If prior notice is not 

practicable, the Participant or Authorized User shall be served with notice 

by electronic mail at the earliest opportunity. This notice shall:

1. state the action taken or to be taken;

2. briefly state the reasons for the action;

3. state the time and date when the action became or becomes 

effective and its duration; and

4. state that any Person aggrieved by the action may petition the 

Commission for a stay of the effective date of the action pending a 
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hearing pursuant to Part 9 of CFTC Regulations, within ten calendar 

days of service.

F. The Participant or Authorized User whose privileges are to be summarily 

suspended shall be given an opportunity for appeal under the procedures 

outlined in Rule 9.5I. The decision affirming, modifying, or reversing the 

summary suspension shall be furnished by electronic mail to the suspended 

Participant or Authorized User, and to the Commission no later than one 

Business Day after it is issued. The decision shall contain:

1. a description of the action taken and the reasons for the action;

2. a brief summary of the evidence received during the appeal process;

3. findings and conclusions;

4. a determination as to whether the summary action that was taken 

should be affirmed, modified, or reversed;

5. a declaration of any action to be taken against the suspended 

Participant or Authorized User as the result of that determination;

6. the effective date and duration of that action;

7. a determination of the appropriate relief based on the findings and 

conclusions;

8. a statement that any Person aggrieved by the action may have a 

right to appeal the action pursuant to Part 9 of the Commission’s 

Regulations, within 30 calendar days of service; and

9. a statement that any Person aggrieved by the action may petition the

Commission for a stay pursuant to Part 9 of the Commission’s 

Regulations, within ten calendar days of service.

Rule 9.10 Reporting Violations to the Commission

A. The Exchange will submit to the Commission a schedule listing all those 

Exchange Rule violations which constitute disciplinary offenses as defined 

in paragraph (a)(6)(i) of CFTC Regulation 1.63 and, to the extent necessary 
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to reflect revisions, will submit an amended schedule within thirty days of 

the end of each calendar year. The Exchange will maintain the schedule 

required by this section, and post the schedule on the Exchange’s website.

B. The Exchange will submit to the Commission within thirty days of the end of 

each calendar year a certified list of any Participants or Persons who have 

been removed from any Disciplinary Panel, the Board or any Exchange 

committee pursuant to these Rule or Applicable Law during the prior year.

C. Whenever the Exchange finds by final decision that a Participant or Person 

has violated a Rule or otherwise committed a disciplinary offense and such 

finding makes such person ineligible to serve on the Exchange’s 

Disciplinary Panels, Exchange committees, or the Board, the Exchange 

shall inform the Commission of such finding and the length of the ineligibility 

in a notice it is required to provide to the Commission pursuant to either 

CEA Section 17(h)(1) or CFTC Regulation 9.11.

CHAPTER 10 Arbitration

Rule 10.1 In General

A. Any dispute between and among Participants and Customers and any 

Authorized Users that relates to or arises out of any Exchange Contract, 

these Rules or Applicable Law, shall be resolved by the American 

Arbitration Association and conducted pursuant to the Rules and the 

Commercial Arbitration Rules of the American Arbitration Association.

B. A dispute brought pursuant to this Chapter 10 shall be submitted before 

three qualified arbitrators who shall be appointed in accordance with the 

Commercial Arbitration Rules of the American Arbitration Association. All 

arbitrators must have no less than five years’ experience in the financial 

services industry, and no less than one arbitrator must have no less than 

five years’ experience in the commodity futures or swap industry.

C. The Person that submits a dispute to the American Arbitration Association 

for resolution must submit all demands for arbitration, claims, notices, 
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answers, counterclaims, award and any other filings that such Person 

submits or that such Person receives from the other party to the dispute or 

from the American Arbitration Association, including the arbitrators, to the 

Exchange within ten Business Days of submission or receipt of such 

document.

D. Persons to a dispute resolved in accordance with this Chapter 10 shall be 

responsible for their own costs, expenses and attorneys’ fees incurred in 

connection with the dispute. Notwithstanding the foregoing, the Person that 

prevails shall be entitled to recover from the other party all costs, expenses 

and reasonable attorneys’ fees incurred in any arbitration arising out of or 

relating to this Chapter 10, and in any legal action or administrative 

proceeding to enforce any arbitration award or relief.

E. Any award or relief granted by the arbitrators hereunder shall be final and 

binding on the parties hereto and may be enforced by any court of 

competent jurisdiction.

F. Notwithstanding the foregoing, this Chapter 10 does not apply to disputes 

between Participants or Authorized Users where:

1. such Persons are required by the rules of a Self-Regulatory 

Organization to submit to the dispute resolution procedures of that 

Self-Regulatory Organization; or

2. such Persons have, by valid and binding agreement, committed to 

arbitrate or litigate in a forum other than the American Arbitration 

Association.

Rule 10.2 Forum and Arbitration Rules

The American Arbitration Association shall conduct arbitrations described in Rule 10.1 

pursuant to the rules and procedures of the American Arbitration Association.
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Rule 10.3 Initiating an Arbitration Claim

A Person may initiate an arbitration claim by submitting the required documents and fees 

to the American Arbitration Association. A Person that initiates such an arbitration claim 

shall submit notice thereof to the Exchange.

Rule 10.4 Penalties

A. Any failure on the part of a Person to arbitrate a dispute subject to this 

Chapter 10, or the commencement by any such Person of a suit in any court 

prior to arbitrating a case that is required to be arbitrated pursuant to this 

Chapter 10, violates these Rules and shall subject such Person to 

disciplinary proceedings pursuant to Chapter 9. Any Person that does not 

arbitrate a dispute through the American Arbitration Association pursuant to 

Rule 10.1F shall not be deemed to have violated these Rules.

B. The Chief Compliance Officer, in consultation with the Regulatory Oversight 

Committee, may summarily suspend, pursuant to Rule 9.9, a Participant or 

Authorized User that fails to timely satisfy an arbitration award rendered in 

any arbitration pursuant to this Chapter 10.

CHAPTER 11 Miscellaneous

Rule 11.1 Adjustments Necessitated by Material Changes in the Underlying

In the event that, prior to or during the term of a Series, changes beyond the control of the 

Exchange occur in the availability of the Underlying or in the way the Underlying is 

calculated, or a value for the Underlying is unavailable or undefined in light of intervening 

events, the Exchange may delay listing Series or adjust the terms of outstanding Series 

as it deems appropriate in its discretion to achieve fairness to holders of Exchange 

Contracts of the affected Series.

Rule 11.2 Prohibition on Trading by Exchange Personnel; Misuse of Material, 

Non-Public Information

A. Terms used in this Rule 11.2 and not otherwise defined in these Rules shall 

have the meanings set forth in CFTC Regulations 1.3 and 1.59. 
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B. Exchange Personnel may not trade, directly or indirectly any Exchange 

Contract or any related financial instrument.

C. Exchange Representatives may not trade, directly or indirectly any 

Exchange Contract or financial instrument where such Exchange 

Representative has access to material, non-public information concerning 

such Exchange Contract or financial instrument.

D. The Chief Compliance Officer (or, in the case of the Chief Compliance 

Officer, the Board) may grant exemptions in accordance with the provisions 

of this Rule 11.2 to Exchange Personnel on a case-by-case basis under 

circumstances where the Exchange Personnel is participating in pooled 

investment vehicles and the Exchange Personnel has no direct or indirect 

control over Transactions effected by or for the account of the pool.

E. For the avoidance of doubt, participation by Exchange Personnel in a 

retirement plan sponsored by the Exchange shall not be deemed to 

constitute trading directly or indirectly in an Exchange Contract or financial 

instrument, notwithstanding such plan’s trading of Exchange Contracts or 

financial instruments.

F. Any exempt Exchange Personnel that has received an exemption under 

Rule 11.2D must:

1. furnish to the Exchange (or, in the case of the Chief Compliance 

Officer, to the Board) account statements and other documents 

relevant to the trading activities that are so exempted; and

2. inform the Chief Compliance Officer (or, in the case of the Chief 

Compliance Officer, the Board) within one business day of any 

material change of information that may affect such Exchange 

Personnel’s qualification for such exemption.

G. Exchange Representatives are prohibited from disclosing material, 

non-public information obtained as a result of their employment, agency 

relationship or engagement with the Exchange for any purpose inconsistent 
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with such Person’s duties or responsibilities as an employee, agent, 

independent contractor, Director or Committee member.

Rule 11.3 Property Rights

A. Each Participant 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 LedgerX LLC 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) trademark, (c) 

service mark, (d) trade secret, (e) trade name, (f) data or database rights, 

(g) design rights, (h) moral rights, (i) inventions, whether or not capable of 

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 LedgerX LLC and all other related proprietary rights of 

LedgerX LLC 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 of any kind 

transmitted by means of any of the foregoing, including, without limitation, 

market data, the “Proprietary Information”). Each Participant on behalf of 

itself and each of its Affiliates, Authorized Users and other Persons affiliated 

with any of the foregoing, further acknowledges and agrees that the 

Proprietary Information is the exclusive, valuable and confidential property 

of LedgerX LLC. Each Participant acknowledges and agrees that it shall not 

and shall not permit its Affiliates, Authorized Users and other Persons 

affiliated with any of the foregoing 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 
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Exchange or the Proprietary Information. Each Participant further agrees to 

and to cause each of its Affiliates, Authorized Users and other Persons 

affiliated with any of the foregoing to keep the Proprietary Information 

confidential and not to transfer, rent, lease, copy, loan, sell or distribute, 

directly or indirectly, all or any portion of the Exchange or any Proprietary 

Information.

B. Subject to the provisions of this Rule 11.3, each Participant 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 

LedgerX LLC is the owner of all rights, title and interest in and to all 

intellectual property and other proprietary rights (including all copyright, 

patent, trademark or trade secret rights) in market data, and all derivative 

works based thereon, and further agree not to distribute, create derivative 

works based on, or otherwise use or commercially exploit market data and 

any such derivative works, provided that Participants, Affiliates, Authorized 

Users, and such other Persons may use market data for their own internal 

business purposes. Without limiting the generality of the foregoing, 

Participants, Affiliates, Authorized Users, and other Persons affiliated with 

any of the foregoing may not distribute, sell or retransmit market data 

exchange to any third party.

C. Notwithstanding any other provision of this Rule 11.3, each Participant and 

Authorized User retains such rights as it may enjoy under applicable law 

with respect to market data solely in the form such market data was 

submitted to the Exchange by such Participant or Authorized User.

D. Regulatory Data shall not be disclosed publicly other than on an aggregated 

or anonymous basis, or in a manner that does not directly or indirectly 

identify any market participant who has submitted such data. LedgerX LLC 

shall not condition access to the Exchange upon a Participant’s consent to 

the use of Regulatory Data for business or marketing purposes. Regulatory 

Data may not be used by the Exchange for business and marketing 
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purposes unless the market participant has clearly consented to the use of 

Regulatory Data in such manner. Nothing in this Rule shall preclude 

LedgerX from disclosing Regulatory Data: (1) as required by Applicable 

Law or legal process; (2) as the Exchange may deem necessary or 

appropriate in connection with any litigation affecting the Exchange; (3) to 

any Exchange Representative authorized to receive such information within 

the scope of his or her duties; (4) to a third party performing regulatory or 

operational services for the Exchange, provided that such party has 

executed a confidentiality and non-disclosure agreement in a form 

approved by the Exchange; (5) to a duly authorized representative of the 

CFTC lawfully requesting Regulatory Data; (6) in a manner in which a 

market participant consents to such disclosure; (7) pursuant to the terms of 

an information-sharing agreement; (8) as permitted by CFTC Regulations; 

or (9) to any other Person, if and to the extent that the Board may deem 

appropriate from time to time.

Rule 11.4 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, 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.

Rule 11.5 Governing Law

The Rules, and the rights and Obligations of the Exchange and Participants under the 

Rules, shall be governed by, and construed in accordance with, the laws of the State of 

New York without regard to any provisions of New York law that would apply the 

substantive law of a different jurisdiction. The State of New York is the “securities 

intermediary’s jurisdiction” within the meaning of Section 8-110(e) of the UCC for all 

purposes of the UCC. 
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Rule 11.6 Legal Proceedings

A. 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 within one 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 the City of New York, New York. 

Each Participant and Authorized User expressly consents to the jurisdiction 

of any such court, waives any objection to venue therein, and waives any 

right it may have to a trial by jury.

B. In the event that a Participant or Authorized User or an Affiliate of such 

Person who fails to prevail in a lawsuit or other legal proceeding instituted 

by such Participant or such Affiliate against (i) the Exchange or (ii) any 

Affiliate of the Exchange or any of its respective officers, directors, equity 

holders, employees, agents, or any member of any committee, and related 

to the business of the Exchange, such Participant or Authorized User shall 

pay to the Exchange all reasonable costs and expenses, including 

attorneys’ fees, incurred by the Exchange in the defense of such 

proceeding. This Rule 11.7 shall not apply to Exchange disciplinary actions, 

appeals thereof, or an instance in which the Board has granted a waiver of 

the provisions hereof.

C. The Exchange will provide to the Commission copies of documents 

pertaining to Exchange-related pending legal proceedings as required 

under CFTC Regulation 1.60.

Rule 11.7 LIMITATION OF LIABILITY; NO WARRANTIES

A. EXCEPT AS OTHERWISE SET FORTH IN THE RULES, OR DUE TO 

EXCHANGE OBLIGATIONS ARISING FROM THE ACT OR CFTC 

REGULATIONS, INCLUDING PARTS 37 AND 39 OF THE CFTC 

REGULATIONS, OR OTHERWISE UNDER APPLICABLE LAW, NEITHER 

THE EXCHANGE NOR ANY OF ITS EXCHANGE REPRESENTATIVES, 

AFFILIATES OR AFFILIATES’ REPRESENTATIVES SHALL BE LIABLE 
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TO ANY PERSON, OR ANY PARTNER, DIRECTOR, OFFICER, AGENT, 

EMPLOYEE, AUTHORIZED USER OR AUTHORIZED 

REPRESENTATIVE THEREOF, FOR ANY LOSS, DAMAGE, INJURY, 

DELAY, COST, EXPENSE, OR OTHER LIABILITY OR CLAIM, WHETHER 

IN CONTRACT, TORT OR RESTITUTION, OR UNDER ANY OTHER 

CAUSE OF ACTION, SUFFERED BY OR MADE AGAINST THEM AS A 

RESULT OF THEIR USE OF SOME OR ALL OF THE PLATFORM AND BY 

MAKING USE OF THE PLATFORM, SUCH PERSONS EXPRESSLY 

AGREE TO ACCEPT ALL LIABILITY ARISING FROM THEIR USE OF 

SAME.

B. EXCEPT AS OTHERWISE SET FORTH IN THESE RULES OR DUE TO 

EXCHANGE OBLIGATIONS ARISING FROM THE ACT OR CFTC 

REGULATIONS, INCLUDING PARTS 37 AND 39 OF THE CFTC 

REGULATIONS, OR OTHERWISE UNDER APPLICABLE LAW, NEITHER 

THE EXCHANGE NOR ANY OF ITS EXCHANGE REPRESENTATIVES, 

AFFILIATES OR AFFILIATES’ REPRESENTATIVES SHALL BE LIABLE 

TO ANY PERSON, OR ANY PARTNER, DIRECTOR, OFFICER, AGENT, 

EMPLOYEE, AUTHORIZED USER OR AUTHORIZED 

REPRESENTATIVE THEREOF, FOR ANY LOSS, DAMAGE, INJURY, 

DELAY, COST, EXPENSE, OR OTHER LIABILITY OR CLAIM, WHETHER 

IN CONTRACT, TORT OR RESTITUTION, OR UNDER ANY OTHER 

CAUSE OF ACTION, SUFFERED BY OR MADE AGAINST THEM, 

ARISING FROM (A) ANY FAILURE OR NON-AVAILABILITY OF THE 

PLATFORM; (B) ANY ACT OR OMISSION ON THE PART OF THE 

EXCHANGE, EXCHANGE REPRESENTATIVES, AFFILIATES OR 

AFFILIATES’ REPRESENTATIVES INCLUDING WITHOUT LIMITATION 

A DECISION OF THE EXCHANGE TO SUSPEND, HALT, OR 

TERMINATE TRADING OR TO VOID, NULLIFY OR CANCEL ORDERS 

OR TRADES IN WHOLE OR IN PART; (C) ANY ERRORS OR 

INACCURACIES IN INFORMATION PROVIDED BY THE EXCHANGE, 

AFFILIATES OR THE PLATFORM; (D) UNAUTHORIZED ACCESS TO OR 
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UNAUTHORIZED USE OF THE PLATFORM BY ANY PERSON; (E) ANY 

FORCE MAJEURE EVENT, INCLUDING, BUT NOT LIMITED TO, THE 

UNAVAILABILITY OF THE BLOCKCHAIN AS REASONABLY 

DETERMINED BY THE EXCHANGE, AFFECTING THE EXCHANGE OR 

AN EXCHANGE CONTRACT; OR (F) ANY LOSS TO ANY PARTICIPANT 

RESULTING FROM A PARTICIPANT’S OWN SECURITY OR THE 

INTEGRITY OF A PARTICIPANT’S TECHNOLOGY OR TECHNOLOGY 

SYSTEMS. THIS LIMITATION OF LIABILITY WILL APPLY REGARDLESS 

OF WHETHER OR NOT THE EXCHANGE, ANY EXCHANGE 

REPRESENTATIVES, ANY EXCHANGE AFFILIATES OR AFFILIATES’ 

REPRESENTATIVES (OR ANY DESIGNEE THEREOF) WAS ADVISED 

OF OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF 

SUCH DAMAGES.

C. A PERSON’S USE OF THE PLATFORM, EXCHANGE PROPERTY AND 

ANY OTHER INFORMATION AND MATERIALS PROVIDED BY THE 

EXCHANGE IS AT THE PERSON’S OWN RISK, AND THE PLATFORM, 

THE EXCHANGE PROPERTY AND ANY OTHER INFORMATION AND 

MATERIALS PROVIDED BY THE EXCHANGE 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. THE EXCHANGE DOES NOT GUARANTEE THAT 

(A) THE EXCHANGE PROPERTY OR THE PLATFORM WILL OPERATE 

IN AN ERROR-FREE, SECURE OR UNINTERRUPTED MANNER; (B) 

ANY INFORMATION OR MATERIALS PROVIDED BY THE EXCHANGE 

OR ACCESSIBLE THROUGH THE EXCHANGE PROPERTY OR THE 

PLATFORM WILL BE ACCURATE, COMPLETE, RELIABLE, OR TIMELY; 

OR (C) THE EXCHANGE PROPERTY OR ANY ASPECTS OF THE 
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PLATFORM WILL BE FREE FROM VIRUSES OR OTHER HARMFUL 

COMPONENTS. THE EXCHANGE SHALL HAVE NO LIABILITY FOR 

THE CREDITWORTHINESS OF ANY PERSON OR FOR THE ACTS OR 

OMISSIONS OF ANY PERSON UTILIZING THE PLATFORM OR ANY 

ASPECT OF THE EXCHANGE OR PLATFORM. A PERSON ACCESSING 

THE EXCHANGE IS SOLELY RESPONSIBLE FOR THE SECURITY AND 

INTEGRITY OF THE PERSON’S TECHNOLOGY. A PERSON’S ACCESS 

TO THE EXCHANGE MAY BE INTERNET-BASED AND THE EXCHANGE 

HAS NO CONTROL OVER THE INTERNET OR A PERSON’S 

CONNECTIONS THERETO. ANY PERSON ACCESSING THE 

EXCHANGE ACKNOWLEDGES THAT THE INTERNET, COMPUTER 

NETWORKS, AND COMMUNICATIONS LINKS AND DEVICES 

NECESSARY TO ENABLE A PERSON TO ACCESS AND USE THE 

PLATFORM ARE INHERENTLY INSECURE AND VULNERABLE TO 

ATTEMPTS AT UNAUTHORIZED ENTRY AND THAT NO FORM OF 

PROTECTION CAN ENSURE THAT A PARTICIPANT’S DATA, 

HARDWARE, OR SOFTWARE OR THE PLATFORM OR OTHER 

EXCHANGE PROPERTY WILL BE FULLY SECURE. FURTHERMORE, 

THE EXCHANGE SHALL HAVE NO OBLIGATION TO MONITOR OR 

VERIFY ANY INFORMATION DISPLAYED THROUGH THE PLATFORM.

D. A PARTICIPANT THAT DEPOSITS COLLATERAL FOR ITS BENEFIT 

WITH THE EXCHANGE PURSUANT TO THESE RULES SHALL HOLD 

THE EXCHANGE HARMLESS FROM ALL LIABILITY, LOSSES AND 

DAMAGES WHICH MAY RESULT FROM OR ARISE WITH RESPECT TO 

THE CARE AND SALE OF SUCH COLLATERAL PROVIDED THAT THE 

EXCHANGE HAS ACTED REASONABLY AND IN ACCORDANCE WITH 

APPLICABLE LAW UNDER THE CIRCUMSTANCES. FURTHERMORE, 

THE EXCHANGE HAS NO RESPONSIBILITY FOR ANY ACT OR 

OMISSION OF ANY THIRD PARTY SERVICE PROVIDER THAT THE

EXCHANGE HAS CHOSEN WITH REASONABLE CARE. THE 

EXCHANGE HAS NO RESPONSIBILITY OR LIABILITY FOR ANY LOSS 
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OF COLLATERAL THAT RESULTS, DIRECTLY OR INDIRECTLY, FROM 

A BREACH TO A PARTICIPANT’S SECURITY OR ELECTRONIC 

SYSTEMS, INCLUDING BUT NOT LIMITED TO CYBER ATTACKS, OR 

FROM A PARTICIPANT’S NEGLIGENCE WITH RESPECT TO A 

WALLET, ADDRESS OR THE RECEIPT OF COLLATERAL UPON THE 

REQUEST OF A WITHDRAWAL, OR FROM A PARTICIPANT’S 

DEPOSIT, MISTAKE, ERROR, NEGLIGENCE, OR MISCONDUCT WITH 

RESPECT TO ANY COLLATERAL TRANSFERS A PARTICIPANT 

MAKES OR ATTEMPTS TO MAKE TO THE EXCHANGE. 

E. NO PARTICIPANT, AUTHORIZED USER, AUTHORIZED 

REPRESENTATIVE OR ANY OTHER PERSON SHALL BE ENTITLED TO 

COMMENCE OR CARRY ON ANY PROCEEDING AGAINST THE 

EXCHANGE, ANY OF ITS EXCHANGE REPRESENTATIVES, 

AFFILIATES OR AFFILIATES’ REPRESENTATIVES, IN RESPECT OF 

ANY ACT, OMISSION, PENALTY OR REMEDY IMPOSED PURSUANT 

TO THE RULES OF THE EXCHANGE. THIS SECTION SHALL NOT 

RESTRICT THE RIGHT OF SUCH PERSONS TO APPLY FOR A REVIEW 

OF A DIRECTION, ORDER OR DECISION OF THE EXCHANGE BY A 

COMPETENT REGULATORY AUTHORITY.

F. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, IN NO 

EVENT SHALL THE EXCHANGE OR ANY OF ITS EXCHANGE 

REPRESENTATIVES, AFFILIATES OR AFFILIATES’ 

REPRESENTATIVES BE LIABLE FOR ANY INDIRECT, INCIDENTAL, 

CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES (WHETHER OR 

NOT THE EXCHANGE OR ANY SUCH PERSON HAD BEEN INFORMED 

OR NOTIFIED OR WAS AWARE OF THE POSSIBILITY OF SUCH 

DAMAGES).

G. ANY CLAIM FOR REDRESS OR DAMAGES HEREUNDER SHALL BE 

FILED IN A COURT OF COMPETENT JURISDICTION WITHIN ONE 

YEAR OF THE DATE ON WHICH SUCH CLAIM ALLEGEDLY AROSE. 
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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 11.7 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.

H. THE LIMITATIONS ON LIABILITY IN THIS RULE 11.7 SHALL NOT 

PROTECT ANY PARTY FOR WHICH THERE HAS BEEN A FINAL 

DETERMINATION (INCLUDING EXHAUSTION OF ANY APPEALS) BY A 

COURT OR ARBITRATOR TO HAVE ENGAGED IN WILLFUL OR 

WANTON MISCONDUCT OR FRAUD. ADDITIONALLY, THE 

FOREGOING LIMITATIONS ON LIABILITY OF THIS RULE SHALL BE 

SUBJECT TO THE CEA AND THE REGULATIONS PROMULGATED 

THEREUNDER, EACH AS IN EFFECT FROM TIME TO TIME.

Rule 11.8 Error Trade Policy

The Exchange shall have the discretion to delete Orders, adjust prices, cancel trades or 

suspend the market in the interest of maintaining a fair and orderly market, in accordance 

with this Rule 11.8.

A. In normal circumstances, the Exchange will only adjust prices or cancel 

trades on the basis that the price traded is not representative of market 

value. The Exchange will make the final decision on whether a trade price 

is adjusted, or a trade is cancelled or is allowed to stand. In determining 

whether a trade has taken place at an unrepresentative price, certain 

factors will be taken into account. They may include, but not be limited to:

1. price movements in other expiration months of the same Exchange 

Contract;
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2. current market conditions, including levels of activity and volatility;

3. time period between different quotes and between quoted and 

traded prices;

4. information regarding price movement in related contracts, the 

release of economic data or other relevant news just before or during 

electronic Trading Hours;

5. manifest error;

6. whether there is any indication that the trade in question triggered 

stops or resulted in the execution of spread trades;

7. whether another market user or client relied on the price; 

8. whether a transaction cancellation or price adjustment will adversely 

impact market integrity, facilitate market manipulation or other 

illegitimate activity, or otherwise violate applicable rules or 

regulations; 

9. whether any Participants to the trade in question request that any 

action be taken; and

10. any other factor which the Exchange, in its sole discretion, may 

deem relevant.

B. The Exchange, when applicable, may establish price and/or volume 

reasonability levels (“Reasonability Levels”) within the system for each 

Exchange Contract beyond which the Exchange will send an alert to the 

relevant Participants via the Participant Portal or API, as applicable 

(“Reasonability Level Alert”). These levels necessarily are flexible to take 

account of prevailing market conditions. The Exchange incorporates 

Reasonability Levels to address “fat finger” type errors. Reasonability 

Levels are set by the Exchange and may be varied from time to time 

according to market conditions. The Exchange will notify Participants of any 

modifications to the Reasonability Levels. Upon receipt of any 
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Reasonability Level Alert, Participant can choose whether or not to proceed 

with entry and execution of the applicable Order. If the applicable 

Participants approve the volume and/or price following receipt of the 

Reasonability Level Alert, the Exchange will attempt to execute the Order 

and the trade will be finalized.

C. Any trade executed at a price outside of the No Cancellation Range (as 

defined below), if identified to the Exchange within the designated time 

period, may be considered an alleged error trade.

D. The Reasonability Levels applicable to each Exchange Contract will be 

listed on the Exchange’s website. In addition, Participants can further 

customize personal Reasonability Levels that apply only to the Participant’s 

Orders, thereby providing further risk control over the Participant’s Orders.

E. Any trade which is alleged to be an error trade and subsequently is 

cancelled due to the determination that it has been executed at an 

unrepresentative price may be investigated by the Exchange.

F. There is a defined “no cancellation range” (“No Cancellation Range”) for 

each Contract. Trades executed within this price range will not be cancelled 

or price adjusted. A component of market integrity is the assurance that 

once executed, except in exceptional circumstances, a trade will stand and 

not be subject to cancellation or price adjustment. Any trades that do not 

have an adverse effect on the market should not be able to be cancelled or 

price adjusted, even if executed in error.

G. In applying the No Cancellation Range, the Exchange shall determine the 

fair market price for the Exchange Contract. The Exchange may consider 

any relevant information including, but not limited to, the bid, the ask, the bid 

size, the ask size, and the spot price.

H. The No Cancellation Range will be determined per Exchange Contract and 

will be available on the Exchange’s website.
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I. If a trade takes place within the No Cancellation Range and is alleged to be 

an error, the trade will not be cancelled.

J. Trades executed outside of the No Cancellation Range may be reported to 

or considered by the Exchange as an error.

K. Market users have ten (10) minutes from the time of the original trade in 

which to allege a trade has been executed in error.

L. The Exchange will notify the market immediately through its website that an 

error has been alleged, giving details of the trade, including Exchange 

Contract month, price and volume. The Exchange also will notify the 

Participants involved via e-mail. The Exchange will then notify all 

Participants through a Participant Notice whether the price is adjusted or 

the trade is cancelled or stands. The Exchange will then contact those 

parties involved in the trade to explain the Exchange’s decision.

M. In order to assist the Exchange in determining whether the trade alleged to 

be an error has taken place at an unrepresentative price, the Exchange 

may contact/consult Participants and other market Participants. The 

Exchange will not disclose to the parties to the alleged error trade the 

identity of their counterparty. In addition, the identities of the counterparties 

to the alleged error trade will not be disclosed to any Participant or other 

Person the Exchange may consult with. The Exchange will take into 

account a variety of market factors in its determination. Each error situation 

will be assessed on its individual circumstances.

N. If the Exchange determines that a trade price is outside the No Cancellation 

Range for an Exchange Contract, the trade price may be adjusted to a price 

that equals the fair value market price for that Exchange Contract at the 

time the trade under review occurred. The Exchange may consult and 

obtain the consent of the parties to the price adjustment or may determine a 

price adjustment is appropriate regardless of any party’s consent or lack 

thereof. The Exchange, at its discretion, may allow the trades to stand or 
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cancel the trades rather than adjusting the price. The decision of the 

Exchange is final.

O. If the Exchange determines that the price differential of a spread trade is not 

representative of the market for that spread trade at the time of execution, 

then the differential of such spread trade may be adjusted to the price 

differential for that spread trade at the time the trade under review occurred. 

The Exchange, at its discretion, may allow the trades to stand or cancel the 

trades rather than adjusting the price differential. The decision of the 

Exchange is final.

P. The Exchange will make every attempt to ensure that a decision on whether 

an alleged error trade will have its price adjusted, will stand or be cancelled 

will be communicated to the market as soon as reasonably possible after 

the time of the original trade.

Q. The Exchange has the unilateral right to cancel any Order, adjust the price 

of a trade and cancel any trade which it considers to be at an 

unrepresentative price, even where there has been no referral or request 

from a Participant or other Person, in the interest of maintaining a fair and 

orderly market. The Exchange aims to exercise this right within thirty (30) 

minutes after the trade has been identified. The Exchange also reserves its 

right to cancel any Order, adjust the price of a trade and cancel any trade 

due to any technology failure or system malfunction, even where there has 

been no referral or request from a Participant or other Person, in the interest 

of maintaining a fair and orderly market and aims to exercise this right within 

thirty (30) minutes after the system or technology failure has been identified. 

The Exchange reserves its right to consider each alleged error trade 

situation on its individual merits and may therefore amend these policies in 

light of the circumstances of each individual case. The decision of the 

Exchange is final.

R. Cancelled trades and prices that have been adjusted will be noted as such 

in the Exchange’s official record of time and sales. A special marker will 
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indicate trades that have been priced adjusted in the official record of time 

and sales at the adjusted trade price.

S. NEITHER THE EXCHANGE NOR ANY OF ITS REPRESENTATIVES, ITS 

AFFILIATES OR ITS AFFILIATES’ REPRESENTATIVES SHALL BE 

LIABLE TO ANY PERSON, OR ANY PARTNER, DIRECTOR, OFFICER, 

AGENT, EMPLOYEE, AUTHORIZED USER OR AUTHORIZED 

REPRESENTATIVE THEREOF, FOR ANY LOSS, DAMAGE, INJURY, 

DELAY, COST, EXPENSE, OR OTHER LIABILITY OR CLAIM, WHETHER 

IN CONTRACT, TORT OR RESTITUTION, OR UNDER ANY OTHER 

CAUSE OF ACTION, SUFFERED BY OR MADE AGAINST THEM 

ARISING FROM ANY ACT OR OMISSION ON THE PART OF THE 

EXCHANGE, ITS REPRESENTATIVES, ITS AFFILIATES OR ITS 

AFFILIATES’ REPRESENTATIVES RELATING TO ANY DECISION BY 

THE EXCHANGE TO, OR TO NOT, VOID, NULLIFY OR CANCEL 

ORDERS OR TRADES OR ADJUST THE PRICES OF ANY TRADES IN 

WHOLE OR IN PART. THIS LIMITATION OF LIABILITY WILL APPLY 

REGARDLESS OF WHETHER OR NOT THE EXCHANGE, ITS 

REPRESENTATIVES, ITS AFFILIATES OR ITS AFFILIATES’ 

REPRESENTATIVES (OR ANY DESIGNEE THEREOF) WERE ADVISED 

OF OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF 

SUCH DAMAGES.

Rule 11.9 Exchange Contacts

All requests to cancel Orders or trades must be directed to the Exchange via the 

Participant Portal or the Exchange telephone number posted on the website. Any such 

request for the removal of Orders will be acted upon on a best-efforts basis by the 

relevant Exchange Personnel.

Rule 11.10 Reasonability Levels

The Error Trade Policy includes Reasonability Levels and No Cancellation Ranges for all 

Contracts on the Platform.
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A. Benchmark:

1. If there exists a last price in the applicable Contract in the last 48 

hours, then such price will be used as the benchmark; or

2. If there exists no last price but there is a bid AND an ask in the last 48 

hours, then the Exchange will use the midpoint of the most recent bid 

& most recent ask as the benchmark.

B. Reasonability Levels:

1. If Benchmark 1 or 2 is applicable, then the Reasonability Level = 

50% of the Benchmark; or

a If neither Benchmark 1 nor 2 apply, then there will be no alerts 

generated for this Contract and error trades are subject to the 

No Cancellation Range and Exchange discretion with respect 

to adjusting or cancelling trades.

Rule 11.11 No Cancellation Ranges

A. Benchmark:

1. If there exists a last price in the applicable Contract in the last 48 

hours, then such price will be used as the benchmark; or

2. If there exists no last price but there is a bid AND an ask in the last 48 

hours, then the Exchange will use the midpoint of the most recent bid 

& most recent ask as the benchmark.

B. No Cancellation Range:

1. If Benchmark 1 or 2 is applicable, then the No Cancellation Range = 

20% of the Benchmark; or

2. If neither Benchmark 1 nor 2 apply, then there is not a No 

Cancellation Range for that Contract at that time and the Exchange 

will evaluate each error alleged error trade situation on its individual 

merits and the facts and circumstances of each individual case.
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Rule 11.12 Amendments to the Rules

These Rules may be amended or repealed, or new Rules may be adopted. An 

amendment to a Rule, repeal of a Rule or adoption of a new Rule shall be effective on a 

date set forth by the Exchange, and set forth in a Participant Notice and on the Website.
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CHAPTER 12 Exchange Contract Specifications Exchange Contract 

Specifications

[To be inserted when finalized.]

Rule 12.1 USDBTC Options

A. Contract Description. Generally speaking, an option is an agreement that grants the 

option purchaser, in exchange for a premium, the right, but not the obligation, to purchase 

from (in the case of a call option) or to sell to (in the case of a put option) the option writer, 

at a specified exercise or “strike” price, and at specified time(s) or within a specified period, 

a specified underlying interest. Participants may enter into Contracts as buyers or sellers 

of calls and/or puts. This Rule 12.1 pertains to options on bitcoin (as described further 

herein) and contains general Contract terms and conditions. 

B. Bitcoin. Bitcoin is a computer network and protocol that allows digital currency to be 

stored and transferred in a distributed manner without the need for a central intermediary. 

The Bitcoin network is a form of blockchain, which allows consensus to be built and 

maintained on a distributed, decentralized basis by parties with no inherent reason to trust 

one another. Each individual bitcoin transaction is validated by the network of 

decentralized parties, or nodes, over a period of time and then added to a “block”, which is 

then cryptographically linked to the immediately preceding block (over time, creating a 

chain, or a “blockchain”).

C. Trading Hours. The trading hours of the Exchange’s Swap Execution Facility that are 

applicable to the Contract described in this Rule 12.1 will be as follows:

a. Trading hours on the Exchange’s Swap Execution Facility will commence each 

Business Day at 9:30 a.m. New York time (EST/EDT) and end each Business Day 

at 4:00 p.m. New York time (EST/EDT).
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D. Currency. The Contract currency will be United States dollars, expressed as dollars and 

cents per bitcoin.

E. Underlying. The Contract underlying will be bitcoin (sometimes referred to as “BTC”).

F. Contract Size. Each Contract will be one bitcoin.

G. Position Limits. No person will own or control positions in excess of:

a. 100,000 Contracts net long or net short in any single Contract month; or

b. 250,000 Contracts net long or net short in all Contract months combined.

H. Collateral. All Contracts will be fully collateralized. Each Participant must post the 

maximum potential loss on a Contract prior to executing a Contract. 

I. Option Conventions.

a. Traded Price. The traded price on the Trade Date.

b. Strike Price. As of any Trade Date, (i) a range of approximately 15% up and 15% 

down from the approximate prevailing spot market price as of such date, with 

increments of $100.00, (ii) a smaller number of additional strikes in increments 

ranging from $250.00 to $1000.00 for prices between 20% and 300% of the 

approximate prevailing spot market price as of such date, and (iii) any 

previously-listed strikes with remaining open interest, in each case as may be 

determined and listed from time to time by the Exchange in its sole discretion.

c. Daily Settlement Price. None. Because all Contracts are fully collateralized and 

physically settled, it is not necessary for the Exchange to publish a settlement 

price. Each Participant determines whether the intrinsic value of the underlying is 

greater than the relevant Strike Price as of the Last Trading Date and makes a 

corresponding decision as to exercise.
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d. Business Day Convention. Previous.

e. Exercise Type. European.

f. Contract Series. Consecutive months up to and including 60 months from the 

month including the Trade Date, or as otherwise determined and listed from time to 

time by the Exchange in its sole discretion.

g. Last Trading Date. The last Friday of each Contract month.

h. Settlement. Physical delivery upon exercise. With respect to any Contract, 

physical delivery will occur on the Business Day next succeeding the Last Trading 

Day in respect of such Contract.

i. Final Payment Date. With respect to any Contract, the Business Day next 

succeeding the Last Trading Day in respect of such Contract.

J. Exercise

During the two trading days prior to and including the Last Trading Date, 

Participants submit or update exercise instructions for any long Contract positions. 

All exercise instructions are processed at the close of trading hours on the Last 

Trading Date. 

Because the Exchange does not publish a settlement price, there is no provision 

for automatic exercise of Contracts.
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Rule 12.2 Day-Ahead USD/BTC Swaps

A. Contract Description. The term “swap” is a generic one that covers many types 

of instruments, including (among other things) any agreement, contract or 

transaction that is for the purchase or sale of any one or more currencies or 

commodities. A Participant may enter into a Contract as a buyer, whereby such 

Participant will pay USD and receive BTC, or as a seller, whereby such Participant 

will pay BTC and receive USD. The Contract requires that a buyer pay USD on the 

Initial Payment Date, and that the seller pay BTC on the Final Payment Date. This 

Rule 12.2 pertains to swaps on bitcoin (as described further herein) and contains 

general Contract terms and conditions. 

B. Bitcoin. Bitcoin is a computer network and protocol that allows digital currency to 

be stored and transferred in a distributed manner without the need for a central 

intermediary. The Bitcoin network is a form of blockchain, which allows consensus 

to be built and maintained on a distributed, decentralized basis by parties with no 

inherent reason to trust one another. Each individual bitcoin transaction is 

validated by the network of decentralized parties, or nodes, over a period of time 

and then added to a “block”, which is then cryptographically linked to the 

immediately preceding block (over time, creating a chain, or a “blockchain”).

C. Trading Hours. The trading hours of the Exchange’s Swap Execution Facility that 

are applicable to the Contract described in this Rule 12.2 will be as follows:

a. Trading hours on the Exchange’s Swap Execution Facility will commence 

each Business Day at 9:30 a.m. New York time (EST/EDT) and end each 

Business Day at 4:00 p.m. New York time (EST/EDT).

D. Currency. The Contract currency will be United States dollars, which will be 

expressed in dollars and cents per bitcoin.
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E. Underlying. The Contract underlying will be bitcoin (sometimes referred to as 

“BTC”).

F. Contract Size. Each Contract will be for a single Underlying (i.e., one bitcoin).

G. Position Limits. As of any date of determination, no person will own or control 

positions in excess of 100,000 Contracts.

H. Collateral. All Contracts will be fully collateralized. Before the Exchange’s Swap 

Execution Facility will accept a buy order for one or more Contracts from a 

Participant, such Participant must have sufficient USD available for trading in its 

account to satisfy its settlement obligations on such Contract(s). Before the 

Exchange’s Swap Execution Facility will accept a sell order for one or more 

Contracts from a Participant, such Participant must have sufficient bitcoin 

available for trading in its account to satisfy its delivery obligations on such

Contract(s).

I. Swap Tenor. One Business Day. 

J. Swap Conventions.

a. Trade Date. With respect to any Contract, the date on which the Exchange, 

in its sole discretion accepts a buy or sell order, as the case may be.

b. Effective Date. With respect to any Contract, the Trade Date applicable 

thereto.

c. Minimum Price Fluctuation. With respect to any Contract, $0.25.
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d. Initial Payment Date. With respect to any Contract, the Trade Date 

applicable thereto. The buyer of a Contract will pay the bid amount of such 

Contract on the Trade Date thereof.

e. Premium. With respect to any Contract, the Buyer thereof will pay the 

premium thereon on the Initial Payment Date. In the context of the 

Exchange Contract, the bid amount is equal to the Premium.

f. Final Payment Date. With respect to any Contract, the Business Day next 

succeeding the Trade Date applicable thereto. 

g. Business Day Convention. Previous.

h. Settlement. Physical delivery. With respect to any Contract, physical delivery 

will occur on the Final Payment Date applicable thereto.