LEDGERX LLC

DERIVATIVES CLEARING ORGANIZATION RULES

DCO Version 22.03

, 2023
TABLE OF CONTENTS

Page

-iCHAPTER 1 Definitions............................................................................................................... 2

Rule 1.1 Definitions.......................................................................................................... 2

Rule 1.2 Rules of Construction...................................................................................... 11

CHAPTER 2 Company Governance ......................................................................................... 13

Rule 2.1 Ownership ....................................................................................................... 13

Rule 2.2 Board............................................................................................................... 13

Rule 2.3 Officers ............................................................................................................ 15

Rule 2.4 Eligibility and Fitness....................................................................................... 16

Rule 2.5 LedgerPrime.................................................................................................... 17

Rule 2.6 Committees and Subcommittees .................................................................... 18

Rule 2.7 Regulatory Oversight Committee .................................................................... 18

Rule 2.8 Risk Management Committee......................................................................... 20

Rule 2.9 Participant Committee..................................................................................... 21

Rule 2.10 Nominating Committee.................................................................................. 21

Rule 2.11 Disciplinary Panel and Appeals Committee .................................................. 22

Rule 2.12 Emergency Rules.......................................................................................... 23

Rule 2.13 Conflicts of Interest........................................................................................ 26

Rule 2.14 Recordkeeping .............................................................................................. 29

Rule 2.15 Information-Sharing Agreements .................................................................. 29

Rule 2.16 Recordkeeping and Reporting Requirements ............................................... 30

Rule 2.17 Public Information.......................................................................................... 31

CHAPTER 3 Participants........................................................................................................... 33

Rule 3.1 Jurisdiction, Applicability of Rules ................................................................... 33

Rule 3.2 Participants – Applications, Agreements, Eligibility Criteria, 

Classifications and Privileges........................................................................ 34

Rule 3.3 Participant Obligations .................................................................................... 37

Rule 3.4 [Reserved]....................................................................................................... 40

Rule 3.5 [Reserved]....................................................................................................... 40

Rule 3.6 Dues, Fees and Expenses Payable by Participants........................................ 41

Rule 3.7 Recording of Communications ........................................................................ 41

Rule 3.8 Independent Software Vendors....................................................................... 41

Rule 3.9 Participant Accounts ....................................................................................... 43

Rule 3.10 Withdrawal of Participant............................................................................... 44
TABLE OF CONTENTS

(continued)

Page

-iiCHAPTER 4 Liquidity Providers................................................................................................ 46

Rule 4.1 Application and Agreement ............................................................................. 46

Rule 4.2 Appointment .................................................................................................... 46

Rule 4.3 Benefits ........................................................................................................... 47

Rule 4.4 Obligations ...................................................................................................... 47

CHAPTER 5 [Reserved]............................................................................................................ 48

CHAPTER 6 Clearing and Delivery........................................................................................... 49

Rule 6.1 Clearance and Substitution ............................................................................. 49

Rule 6.2 Settlement of Company Contracts .................................................................. 50

Rule 6.3 Deposit Procedures......................................................................................... 51

Rule 6.4 Withdrawal Procedures ................................................................................... 52

Rule 6.5 Deliveries......................................................................................................... 53

Rule 6.6 Reconciliation.................................................................................................. 53

Rule 6.7 Swap Data Reporting ...................................................................................... 53

CHAPTER 7 Margin .................................................................................................................. 55

Rule 7.1 Full Collateralization of Company Contracts Required.................................... 55

Rule 7.2 Collateral ......................................................................................................... 55

Rule 7.3 Segregation of Participant Funds.................................................................... 57

Rule 7.4 Concentration Limits........................................................................................ 57

CHAPTER 8 Business Conduct and Trading Practices ............................................................ 58

Rule 8.1 Scope .............................................................................................................. 58

Rule 8.2 [Reserved]....................................................................................................... 58

Rule 8.3 [Reserved]....................................................................................................... 58

Rule 8.4 [Reserved]....................................................................................................... 58

Rule 8.5 Acts Detrimental to the Welfare or Reputation of the Company Prohibited .... 58

Rule 8.6 Misuse of the Platform..................................................................................... 58

Rule 8.7 Supervision; Information Sharing .................................................................... 58

Rule 8.8 Business Conduct ........................................................................................... 59

Rule 8.9 [Reserved]....................................................................................................... 59

Rule 8.10 [Reserved]..................................................................................................... 59

Rule 8.11 [Reserved]..................................................................................................... 59

Rule 8.12 [Reserved]..................................................................................................... 59
TABLE OF CONTENTS

(continued)

Page

-iiiRule 8.13 [Reserved[..................................................................................................... 59

Rule 8.14 [Reserved]..................................................................................................... 59

Rule 8.15 [Reserved]..................................................................................................... 59

Rule 8.16 [Reserved]..................................................................................................... 59

Rule 8.17 [Reserved]..................................................................................................... 59

Rule 8.18 [Reserved]..................................................................................................... 59

Rule 8.19 Compliance ................................................................................................... 60

CHAPTER 9 Discipline and Enforcement.................................................................................. 61

Rule 9.1 General............................................................................................................ 61

Rule 9.2 Investigations .................................................................................................. 63

Rule 9.3 Disciplinary Panel............................................................................................ 64

Rule 9.4 Notice of Charges............................................................................................ 65

Rule 9.5 Contesting and Appeals .................................................................................. 66

Rule 9.6 Settlements ..................................................................................................... 69

Rule 9.7 Notice of Decision ........................................................................................... 70

Rule 9.8 Penalties.......................................................................................................... 71

Rule 9.9 Summary Suspension ..................................................................................... 71

Rule 9.10 Reporting Violations to the Commission ....................................................... 73

CHAPTER 10 Arbitration........................................................................................................... 75

Rule 10.1 In General...................................................................................................... 75

Rule 10.2 Fair and Equitable Arbitration Procedures .................................................... 76

Rule 10.3 Withdrawal of Arbitration Claim..................................................................... 77

Rule 10.4 Penalties........................................................................................................ 77

Rule 10.5 Arbitration Panel............................................................................................ 78

CHAPTER 11 Miscellaneous..................................................................................................... 79

Rule 11.1 [Reserved]................................................................................................... 79

Rule 11.2 Prohibition on Trading by Company Personnel; Misuse of Material, NonPublic Information.......................................................................................... 79

Rule 11.3 Property Rights.............................................................................................. 80

Rule 11.4 Signatures ..................................................................................................... 82

Rule 11.5 Governing Law .............................................................................................. 82

Rule 11.6 Legal Proceedings......................................................................................... 82

Rule 11.7 LIMITATION OF LIABILITY; NO WARRANTIES .......................................... 83
TABLE OF CONTENTS

(continued)

Page

-ivRule 11.8 Error Trade Policy ......................................................................................... 87

Rule 11.9 Company Contacts........................................................................................ 88

Rule 11.10 [Reserved]................................................................................................... 88

Rule 11.11 [Reserved]................................................................................................... 88

Rule 11.12 Amendments to the Rules........................................................................... 88

Rule 11.13 Transfer of Trades....................................................................................... 88

Rule 11.14 Digital Currency Fork Policy........................................................................ 89

Rule 11.15 Company Contracts Not Voidable............................................................... 89

CHAPTER 12 Company Contract Specifications ...................................................................... 90

Rule 12.1 Monthly USD/BTC Mini Options.................................................................... 90

Rule 12.2 Day-Ahead USD/BTC Mini Swaps ................................................................ 92

Rule 12.3 Weekly USD/BTC Mini Options..................................................................... 94

Rule 12.4 Day-Ahead USD/BTC Mini Futures............................................................... 95

Rule 12.5 Weekly USD/BTC Mini Futures ..................................................................... 97

Rule 12.6 Monthly USD/BTC Mini Futures .................................................................... 99

Rule 12.7 USD/ETH Deci Options............................................................................... 101

Rule 12.8 Day-Ahead USD/ETH Deci Swaps.............................................................. 104

CHAPTER 13 - CLEARING SERVICES FOR KALSHI ........................................................... 107

Rule 13.1 Clearing Services for Kalshi ........................................................................ 107

Rule 13.2 Clearance and Substitution of Kalshi Binary Contracts............................... 107

Rule 13.2.1 Clearance and Substitution.................................................................. 107

Rule 13.2.2 Settlement of Kalshi Binary Contracts.................................................. 108

Rule 13.2.3 Deposit Procedures.............................................................................. 108

Rule 13.3 Margin for Kalshi Binary Contracts.............................................................. 111

Rule 13.4 Clearing House Systems and Collateral...................................................... 113

Rule 13.5 LedgerX API................................................................................................ 114

Rule 13.6 Other Rules That Are Applicable To Kalshi Participants............................. 115

Rule 13.7 Other Rules That Are Not Applicable To Kalshi Participants. ..................... 115

Rule 13.8 Liability ........................................................................................................ 116

Rule 13.9 LIMITATION OF LIABILITY; NO WARRANTIES FOR CLEARING 

SERVICES .................................................................................................. 116

Rule 13.10 Approved Kalshi Binary Contract Specifications ....................................... 120
1

DERIVATIVES CLEARING ORGANIZATION RULES

OF

LEDGERX LLC

Introduction

The Commodity Exchange Act requires that LedgerX LLC (the “Company”) 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 Derivatives Clearing Organization (“DCO”). The following 

Derivatives Clearing Organization Rules of the Company pertain to the clearing of Company 

Contracts on the Company DCO, the clearing of other Contracts as a provider of Clearing 

Services, and the rights and Obligations of Participants in connection with such activities.
2

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 clearing activities of the Participant, 

including activities of its Authorized User(s) and activities of its employees relating to 

Transactions, and for providing information regarding the Participant to the Company upon 

request of the Company.

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 clear Transactions.

Binary Contract means an options contract with two positions which settle to an 

outcome of “YES” or “NO,” rather than settling to a price or value.

Bitcoin or BTC: A Digital Currency.

Block Trade: A privately negotiated transaction effected away from the central limit order 

book.

Board: The Board of Directors of the Company.

Business Day: Any day on which the Company DCM, the Company SEF, or another 

DCM or SEF that clears trades through the Company DCO is open for trading, as the 

context requires.
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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 

Company’s chief compliance officer. For the avoidance of doubt, the same person who is 

appointed to be the Company DCO’s chief compliance officer may also serve as the 

Company SEF’s chief compliance officer and/or the Company DCM’s chief regulatory 

officer.

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

Company’s chief executive officer.

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

chief risk officer.

Clearing House means the Company, in its capacity as a DCO.

Clearing Services means the provision by the Clearing House to another registered DCM 

that is unaffiliated with the Company of fully collateralized clearing, settlement and 

ancillary services as set forth in Chapter 13.

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

Company Contracts or Kalshi Binary Contracts.

Collateral Account: Each Participant’s Participant Account and an account opened and 

maintained by the Company at a Settlement Bank (a) to which a Participant transfers funds 

and (b) from which the Company is authorized to debit fees and margin or option premium, 

and debit or credit settlement payments, as applicable.

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

Company: LedgerX LLC. For the avoidance of doubt, references to the “Company” 

generally shall refer to the Company in its capacity as a DCO, unless otherwise specified 

or as the context requires.

Company Contract: Any derivative contract, including a futures contract, option on a 

futures contract, option contract or swap agreement, based on one or more Underlying 

and listed for trading on the Company DCM or the Company SEF or subject to the Rules.
4

Company Contract Specifications: The terms and conditions of a Company 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.

Company DCM: The Designated Contract Market of the Company.

Company DCO: The Derivatives Clearing Organization of the Company.

Company Official: A Director, Officer, committee member, or such other individual as the 

Board may designate from time to time.

Company Personnel: A Company employee, consultant of the Company, contractor of 

the Company or agent of the Company.

Company Representative: Any Company Official, Company employee, consultant of the 

Company, contractor of the Company or agent of the Company.

Company SEF: The Swap Execution Facility of the Company.

Compliance Department: The department, reporting to the Chief Compliance Officer, 

that is responsible for compliance, investigations and disciplinary proceedings.

Contract means any derivative contract, including a futures contract, an option on a 

futures contract, Binary Contract, option contract or swap agreement, based on one or 

more Underlying and for which the Clearing House provides Clearing Services subject to 

the Rules.

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 or DCM: 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 and Ether.

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.
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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.

EFP and EFP transaction: An exchange for physical transaction effected away from the 

Platform in accordance with Error! Reference source not found..

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

further defined in CFTC Regulation 1.3.

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 liquidation, settlement, delivery, or the integrity 

of, any Company Contract or other Contract cleared by the Company, or the timely 

collection and payment of funds in connection with clearing and settlement by the 

Company, including without limitation:

a. any circumstance that may materially affect the performance of any Contract 

cleared and settled by the Company, 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 quasigovernmental 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, clearing, or settlement of any Contract 

cleared through the Company;

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

concentration of positions in any Contract cleared through the Company;

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

functioning of the Company DCO; or
6

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.

Ethereum or ETH or Ether: A Digital Currency.

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.

Kalshi Binary Contract means a Binary Contract that is: approved by the Clearing House 

for Clearing Services pursuant to the Clearing House Rules; listed by Kalshi for trading by 

Kalshi Participants; entered into between two Kalshi Participants; and fully collateralized 

when entered into on Kalshi.

Kalshi Binary Contract Specifications means the Kalshi Binary Contracts specifications 

set forth in Chapter [13].

Kalshi Participant means a member of Kalshi that has submitted the applicable 

Participant Application and Agreement and has been approved by the Clearing House to 

submit Kalshi Binary Contracts to Clearing House for Clearing Services, which approval 

has not been revoked or withdrawn, and maintains a Collateral Account and Participant 

Account with the Clearing House.

KalshiEX, LLC or Kalshi shall mean KalshiEX, LLC, which is a DCM registered with the 

CFTC for which the Clearing House provides Clearing Services as specified in Chapter 

13 of these Rules.

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.

Liquidity Provider: As specified in Chapter 4.
7

Liquidity Provider Agreement: An agreement between the Company and a Liquidity 

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

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 whereby a party to a Contract entered into on a SEF or DCM that 

clears through the Company DCO transfers all of its rights, liabilities, duties and 

obligations under the Contract to a new legal party other than the counterparty to the 

original Contract. The transferee accepts all of the transferor's rights, liabilities, duties and 

obligations under the original Contract. A Novation is valid as long as the transferor and 

the remaining party to the original Contract are given notice, and the transferor, transferee 

and remaining party to the original Contract consent to the transfer.

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

Notice or other requirement implemented by the Company under the Rules (including each 

term and condition of a Company Contract), as well as any contractual obligations 

between, on the one hand, a Person, and on the other hand, the Company, 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 

Company, as it may be modified from time to time.

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

to the Rules.

Oversight Panel: As defined in CFTC Regulation 1.69.
8

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 a Liquidity Provider unless the context requires 

otherwise. A Participant must be an ECP to be eligible to enter into Transactions on the 

Company SEF or another SEF that clears through the Company DCO, or Block Trades 

on a DCM that clears through the Company DCO. A Participant is not required to be an 

ECP to be eligible to enter into EFP and central limit order book transactions on the 

Company DCM or on another DCM. References to the term Participant in the Rules 

includes a Kalshi Participant, but only with respect to the provision of Clearing Services 

by the Clearing House.

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

Company 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 Company may implement 

from time to time.

Participant Application and Agreement: An application submitted by an applicant for 

Participant status and an agreement between the Company and a Participant that must 

be executed for a Participant to gain access to the Company DCO for the 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 Company to all 

Participants in accordance with Rule 2.17.

Participant Portal: The vehicle through which Participants send and receive messages 

to or from the Company and other Participants, update account and contact information, 

and submit deposit and withdrawal notifications.

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

Platform: The electronic trading facility operated by the SEF or DCM that clears through 

the Company DCO that provides Participants with the ability to execute Orders and 

Transactions from the interaction of multiple bids and multiple offers within a predetermined, non-discretionary automated trade matching and execution algorithm.
9

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 Company or the Commission.

Proprietary Data and Personal Information: Information identifying a natural person 

(e.g., name, e-mail address) or other data proprietary to any Person that discloses such 

Person’s trade secrets, market positions and/or other business transactions, excluding 

Transaction Data.

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 Company 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 the 

Company DCO, any SEF or DCM that clears through the Company DCO, and NFA.

Regulatory Oversight Committee: The committee of the Board constituted in 

accordance with Rule 2.7.

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

Swap Creation Data and (iii) Required Swap Continuation Data.

Reporting Counterparty: As set forth in Part 45 of CFTC Regulations and means the 

Participant that is designated as the Reporting Counterparty for swap data reporting 

purposes.

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

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

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

or representative.
10

Risk Management Committee: The committee appointed by the Board and constituted 

in accordance with Rule 2.8.

Rules: These rules of the Company DCO, as in effect and as may be amended from time 

to time.

Self-Regulatory Organization: As set forth in CFTC Regulation 1.3 and includes a DCO, 

SEF, and DCM.

Series: All Company 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 Company as an acceptable location for 

depositing Participant funds.

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 a SEF 

or DCM that clears through the Company DCO an exercise notice on an option contract, 

which is properly routed to the Company DCO, resulting in the delivery of the Underlying 

and payment on the next Settlement Bank Business Day following the exercise; (2) an 

open futures contract expires; or (3) the Company automatically closes out and settles a 

Participant’s Contracts that offset one another. A Contract that is an option and that has 

not been exercised on or before the last trading day and time will expire with no value.

Swap: A Company Contract that is a swap as defined in Section 1a(47) of the CEA and 

as further defined by CFTC Regulation 1.3, and shall include Company Contracts that are 

options as set forth in the Company Contract Specifications.

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.
11

Trading Hours: The hours during which Orders may be entered according to the rules of 

a SEF or DCM that clears through the Company DCO , and as may be revised from time 

to time by such SEF or DCM. 

Transaction: Any purchase or sale of any Contract made on a SEF or DCM that clears 

through the Company DCO or pursuant to the Rules.

Transaction Data: Orders, bids, offers and related information concerning Company 

Contracts executed subject to the Rules, together with all information and other content 

contained in, displayed on, generated by or derived from the Platform.

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 a Company Contract.

Unique Swap Identifier or USI or Unique Transaction Identifier or UTI: The unique 

identifier for a swap transaction, which shall be created, transmitted, and used for each 

swap executed on a SEF or DCM that clears through the Company DCO as provided in 

CFTC Regulation 45.5.

Website: The Company home page and related web pages on the Internet, or a website 

to which the Company 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.
12

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 Company or an Affiliate of the Company and a 

Participant, 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.
13

CHAPTER 2 Company Governance

Rule 2.1 Ownership

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

Company is governed by the Operating Agreement and the Rules. Participant status does not 

confer any equity interest or voting right in the Company.

Rule 2.2 Board

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

1. Be the governing body of the Company;

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 Company;

4. Provide, acquire and maintain adequate Company offices and facilities;

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

6. Determine the Company Contracts and the Company 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 

Company.

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 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 
14

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 Company.

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 Company. 

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 Company to 

constitute a Material Relationship. A Director shall be considered to have a 

Material Relationship with the Company 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 Company, or an 

officer or an employee of an Affiliate of the Company; 

2. such Director is or was a Participant; or

3. 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 
15

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 Company.

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 Company 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;

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 Company 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 

Company as the Board may prescribe from time to time, subject to any limitations 

set forth in the Operating Agreement.
16

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

with respect to matters relating to the Company.

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 Company, 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;

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-
17

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).

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 Company, where applicable, changes 

in registration information within 30 days and certification of compliance 

accordingly. The Company 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 Company, taking into account the 

needs of the Company and such factors as the individual’s experience, 

perspective, skills and knowledge of the industry in which the Company 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 Company’s General Counsel.

F. If the Company determines that an individual subject to this Rule 2.4 no longer 

meets the criteria set forth in Rule 2.4.A., the Company shall inform the CFTC of 

such determination. The Company shall provide to the CFTC, upon request, an 

individual’s certification of compliance with the criteria set forth in Rule 2.4.A.

Rule 2.5 [Reserved]
18

Rule 2.6 Committees and Subcommittees

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

committees and subcommittees, except as otherwise specified herein. There shall 

be a Regulatory Oversight Committee, a Risk Management Committee, a 

Participant Committee, a Nominating Committee, and an Appeals Committee. 

Additionally, there shall be one or more Disciplinary Panels as set forth herein, 

which may consist of persons who are not Directors, and whose members are 

appointed by the Regulatory Oversight 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 members and chairperson of each Disciplinary 

Panel.

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

and control of the affairs of the Company 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.

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 
19

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 Company’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 Company. 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 each Disciplinary 

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

requirements of the Disciplinary Panels. 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 Company’s self-regulatory program for the Board and the CFTC. The annual 

report sets forth the regulatory program’s expenses, describes its staffing and 

structure, catalogues disciplinary actions taken during the year, and reviews the 

performance of each 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 Company 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 
20

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 Company, 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.

Rule 2.8 Risk Management Committee

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

least 35 percent Public Directors, one Market Participant Director, and one 

Company 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 Company’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 Company. 

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.
21

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 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 

Company staff denials of Participant and Liquidity Provider applications; and 

approve measures that would result in different categories or classes of Company 

membership. In reviewing staff denials, the Participant Committee shall not uphold 

any such Company 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 Company 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.
22

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

Board, consistent with criteria approved by the Board, and with the 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 Company. 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. A Disciplinary Panel shall:

1. consist of at least three members appointed by the Regulatory Oversight 

Committee, at least 35 percent of whom would qualify as Public Directors, 

although they are not required to be Directors. One of the Disciplinary 

Panel members who is qualified to be a Public Director will serve as the 

chairperson, as appointed from time to time. At least one member of a 

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 each 

Disciplinary Panel. Each Disciplinary Panel shall include members with 

sufficiently differing experience and Participant interests such that no group 

or class of Participants may dominate or exercise disproportionate 

influence on a Disciplinary Panel. A Disciplinary Panel shall not include 

any members of the Company’s compliance Department, and no member 

of a Disciplinary Panel shall participate in adjudicating any other stage of 

the same proceeding reviewed by that Disciplinary Panel. 

2. responsible for conducting hearings, rendering decisions, and imposing 

sanctions with respect to any Disciplinary Action. Each 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.
23

B. Each member of a 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 removal, with or without cause, 

as a member of that Disciplinary Panel. A member of a 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 35 percent Public Directors, and 

the Chairperson of the Appeals Committee.

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

Panels, 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 Company 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 whether an Emergency 

exists and whether Emergency Rules or Emergency Actions are warranted. 

Emergency Rules may require or authorize the Company, the Board, any 
24

committee of the Board or any Officer to take Emergency Actions, including, but 

not limited to, the following actions:

1. suspend or curtail clearing of any Contract traded on a SEF or DCM that 

clears through the Company DCO, or limit such clearing to transactions 

that result in liquidations;

2. [Reserved];

3. provide alternative settlement mechanisms for any Contract cleared by the 

Company DCO (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 Contract cleared 

by the Company DCO; provided that if a Contract is fungible with a contract 

on another platform in addition to the Company, the liquidation or transfer 

of open interest in such Contract will be ordered only as directed, or agreed 

to, by CFTC staff or the CFTC;

5. [Reserved];

6. require Participants to meet special margin requirements;

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

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

restrictions; or

9. any other action, if so directed by the CFTC.

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

markets underlying the Contract(s) affected by such Emergency Action, on 

markets that are linked or referenced to such Contracts and similar markets on 

other trading venues, or any 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 
25

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 Company implements an Emergency Rule or takes an Emergency 

Action, a duly authorized representative of the Company, where possible, will 

inform Participants through a Participant Notice.

E. The Company 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 Company 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.

F. Upon taking any Emergency Action, the Company will document the decisionmaking process related to such Emergency Action, including the process for 

minimizing conflicts of interest, the extent to which the Company 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 Company to resume normal functioning, in which case any Emergency 

Actions responding to such Emergency will be terminated and a duly authorized 

representative of the Company will inform Participants through a Participant 

Notice.
26

H. Participants must promptly notify the Company 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 member of the Board, Oversight Panel or Disciplinary Panel shall 

participate in such body’s deliberations or voting in any matter involving a 

named party in interest where such 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;

d. has any other significant, ongoing business relationship with a 

named party in interest, excluding relationships limited to Contracts 

cleared through the Company DCO; or

e. has a family relationship (i.e., the 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 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 member of the deliberating body shall disclose to the Chief 

Compliance Officer whether such member has one of the relationships 

listed above with a named party in interest.

3. The Chief Compliance Officer shall determine whether any member of the 

relevant deliberating body 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 member pursuant to clause (2) above; 

and
27

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

available to the Company.

B. Financial Interest in a Significant Action Conflict

1. No member of the Board, Oversight Panel or Disciplinary Panel shall 

participate in the body’s deliberations or voting on any significant action if 

such member knowingly has a direct and substantial financial interest in 

the result of the vote based upon either Company or non-Company 

positions that could reasonably be expected to be affected by the action.

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

deliberating body 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 member has a direct 

and substantial financial interest in the result of the vote.

3. The Chief Compliance Officer shall determine whether any member of the 

relevant deliberating body who does not choose to abstain from 

deliberations and voting is subject to a conflicts restriction under this 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 Company;

b. gross positions held at the Company in the member's personal 

accounts or “controlled accounts,” as defined in CFTC Regulation 

1.3;

c. gross positions held at the Company in proprietary accounts, as 

defined in CFTC Regulation 1.17(b)(3), at the member's affiliated 

firm;

d. gross positions held at the Company in accounts in which the 

member is a principal, as defined in CFTC Regulation 3.1(a);

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

defined in CFTC Regulation 1.17(b)(2), at the member's affiliated 

firm;
28

f. any other types of positions, whether maintained at the Company 

or elsewhere, held in the member's personal accounts or the 

proprietary accounts of the member's affiliated firm that the Chief 

Compliance Officer reasonably expects could be affected by the 

significant action;

g. information provided by such member pursuant to clause (2) above; 

and

h. any other information reasonably available to the Company, taking 

into consideration the exigency of the significant action being 

contemplated.

4. Any 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 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 member’s participation in the deliberations is 

necessary to achieve a quorum; and

b. whether such member has unique or special expertise, knowledge 

or experience in the matter being considered.

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

forth in this Rule apply shall reflect the following information:

1. the names of all members who participated in such meeting;

2. the name of any 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;
29

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 Company shall keep, or cause to be kept, complete and accurate books and 

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

other documentation required to be maintained pursuant to the CEA and CFTC 

Regulations.

B. The Company shall retain all such books and records in accordance with the CEA 

and CFTC Regulations.

C. The Company 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 “SEC”), 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 Company may enter into information-sharing agreements or other 

arrangements or procedures to coordinate surveillance with other markets on 

which financial instruments related to the Contracts cleared through the Company 

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

procedures adopted pursuant to this Rule, the Company 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 Company at the request of other markets 
30

with which the Company has an information-sharing agreement or other 

arrangements or procedures.

B. The Company 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 Company considers such agreement, arrangement or 

procedures to be in furtherance of the Company’s purpose or duties under these 

Rules or Applicable Law.

C. The Company 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 Company shall maintain documentation detailing: (1) the 

recommendation or action of the Regulatory Oversight Committee, the Risk 

Management Committee or the 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 Company 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 Company shall report all Transactions of Swaps 

subject to reporting by the Company pursuant to applicable CFTC Regulations to 

a Swap Data Repository selected by the Company for such purpose within the time 
31

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 

Company 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 in the Rulebooks for the Company’s Designated Contract Market and 

Swap Execution Facility (to the extent such information is not pre-populated by the 

applicable SEF or DCM). Participants may provide certain data to the Company 

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 Company 

immediately of any change in status that would affect data to be reported to a Swap 

Data Repository in accordance with Rule 6.7.

D. [Reserved]

E. The Company shall keep and maintain books and records identifying each Order 

submitted to the Company and each Transaction effected pursuant to these Rules, 

including the identification of the execution method (e.g., central limit order book, 

Block Trade, EFP) with respect to each such Order and Transaction. These books 

and records shall be kept and maintained in accordance with the CEA and CFTC 

Regulations.

F. The Company 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 Company’s Rules and procedures.

Rule 2.17 Public Information

A. Accurate, complete and current copies of these Rules and Company Contract 

Specifications shall be published on the Website.

B. The Company shall make public on a daily basis information on settlement prices, 

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

Company Contracts.

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

Notice with respect to each addition to, modification of, or clarification of, the Rules, 
32

the Matching Engine, and any Company 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 Company 

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 Company and by posting the Participant Notice 

on the Website.

F. Any information published in accordance with this Rule 2.17 shall specify whether 

it applies to the Company DCM, and/or the Company DCO, and/or the Company 

SEF.
33

CHAPTER 3 Participants

Rule 3.1 Jurisdiction, Applicability of Rules

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

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

TRANSACTION ON THE COMPANY OR SUBJECT TO THESE RULES, AND 

ANY PERSON FOR WHOSE BENEFIT SUCH A TRANSACTION HAS BEEN 

INITIATED OR EXECUTED, AND/OR CLEARED, INCLUDING AN AUTHORIZED 

REPRESENTATIVE AND, FOR THE AVOIDANCE OF DOUBT, A LIQUIDITY 

PROVIDER, AND ANY EMPLOYEE OR AGENT OF A PARTICIPANT, AND ANY 

OTHER PERSON ACCESSING THE COMPANY DCO: (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 COMPANY 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 

COMPANY IN COMPLYING WITH THE COMPANY’S LEGAL AND 

REGULATORY OBLIGATIONS, COOPERATE WITH THE COMPANY, THE 

CFTC AND ANY REGULATORY AGENCY WITH JURISDICTION OVER THE 

COMPANY 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 COMPANY, 

REGARDLESS OF WHEN SUCH PERSON BECAME SUBJECT TO THE 

COMPANY’S JURISDICTION, AND ON ALL COMPANY CONTRACTS AS 

APPLICABLE.

B. ALL COMPANY PARTICIPANTS ARE ALSO SUBJECT TO THE JURISDICTION 

OF THE CFTC REGARDLESS OF LOCATION, NATIONALITY, CITIZENSHIP, 

OR PLACE OF INCORPORATION.
34

Rule 3.2 Participants – Applications, Agreements, Eligibility Criteria, Classifications and 

Privileges

The Company will provide fair and open access to Participants. 

A. Each Participant shall have the right to access electronically its proprietary 

account, provided that such Participant is eligible for and has applied and received 

Clearing Privileges. In order to become a Participant, an applicant must:

1. complete and submit the Company Participant Application and Agreement, 

User Agreement, and application fee, as may be established by the 

Company from time to time;

2. 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, or if applicant is an entity, not include any such person among its 

beneficial owners;

3. (for U.S. applicants:) if an applicant is an entity, be validly organized, and 

in good standing, in the United States;

4. (for Singapore applicants:) if an applicant is an entity, be validly organized, 

and in good standing, in Singapore; and must not be listed as a designated 

individual or entity as to terrorism or targeted financial sanctions by the 

Money Authority of Singapore;

5. (for Singapore applicants:) if an applicant is a natural person, be a citizen 

of Singapore; and must not be listed as a designated individual or entity as 

to terrorism or targeted financial sanctions by the Money Authority of 

Singapore;

6. (for non-U.S. applicants:) if an applicant is an entity, be validly organized 

and in good standing in its jurisdiction of organization, and 

7. as applicable, be an Eligible Contract Participant in order to clear trades 

executed on a SEF through the Company DCO, or to clear Block Trades 

executed on a DCM through the Company DCO;

8. not be prohibited from using the services of the Company for any reason 

whatsoever;
35

9. have a good reputation and business integrity and maintain adequate 

financial resources and credit;

10. not have filed for bankruptcy and not be insolvent;

11. 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);

12. 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 making withdrawal 

requests and for providing any information the Company may request 

regarding such Participant; provided, that upon request the Company may 

permit an entity applicant to designate a single Authorized Representative 

in the Chief Compliance Officer’s sole discretion; and

13. meet any other criteria and provide the Company with any other information 

the Company may request regarding the Participant.

B. [Reserved] 

C. [Reserved] 

D. [Reserved] 

E. [Reserved] 

F. [Reserved] 

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

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

policies of the Company.

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

director of the Company 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.
36

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 Company’s fitness standards and that such person will 

notify the Company 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 Company may withdraw their applications 

at any time without prejudice or without losing their right to apply at a future time.

J. Company staff may, in its sole discretion, approve, deny, or condition any 

Participant application as Company staff deems necessary or appropriate.

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

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

as Participant, Company 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 Company’s registry of 

Participants. The written notice will specify the basis for the Company’s 

decision. 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 Company 

and is not subject to appeal within the Company.
37

K. Upon approval by the Company 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 Company may 

require, and shall have the following privileges, which the Company may revoke, 

amend, or expand in accordance with, or by amending, these Rules:

1. Clearing Privileges.

2. [Reserved]

3. [Reserved] 

4. [Reserved]

L. The Company 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 Company, its agents, and the CFTC in any investigation, call for 

information, inquiry, audit, examination, or proceeding. Such cooperation shall 

include providing the Company 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 Company market. If any Participant or Authorized 

User thereof fails to satisfy any Obligation, the Company 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 Company to provide all information the 

Company has about the Participant, including the Participant’s 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.
38

C. Each Participant consents to the Company 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 Company that each such Participant has 

established and maintains an account to hold Underlying and will adhere to the 

Company’s collateral transfer procedures. Each Participant agrees to provide and 

accept collateral when required to do so by the Company.

F. Each Participant, upon a request of the Company or any Regulatory Agency, must 

promptly respond to any requests for information, including by providing any 

necessary information for the Company to perform any of the functions described 

in the CEA.

G. Participant Recordkeeping:

1. Swaps. With respect to each Company Contract that is a Swap, each 

Participant 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.

2. Futures Contracts. With respect to each Company Contract that is a 

futures contract (including any option on a futures contract), each 

Participant must prepare, maintain, keep current and retain those books 

and records of the trading activity, including records of the instrument used 

as a reference price, underlying commodities and related derivatives 

market for five years following execution of the Company Contract, 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.
39

3. The books and records required to be kept under subparagraphs 1 and 2 

above shall be readily accessible for inspection and promptly provided to 

the Company, 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 Company in writing upon becoming 

aware:

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;
40

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 with respect to any SEF 

that clears through the Company DCO, Block Trades or any change in 

status as a swap dealer, major swap participant or financial entity;

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; or

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.

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 

Company. 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 Company 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 Settlement Bank Business Days of such change; and (iv) other information 

provided in the Participant Application and Agreement within five days after any 

such change.

K. [Reserved] 

1.

L. [Reserved]

a.

Rule 3.4 [Reserved]

Rule 3.5 [Reserved]
41

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 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 Company Contracts at 

expiration in an amount to be reflected from time to time on the Website and in 

Participant Notices.

D. The Company 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 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 Company determines in the future to impose dues or additional fees, the 

Company shall notify the Participant of any dues or additional fees that will be 

imposed at least 10 days before they take effect.

Rule 3.7 Recording of Communications

The Company may record conversations and retain copies of electronic communications between 

Company 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 

Company in such manner and for such periods of time as the Company may deem necessary or 

appropriate. The Company shall retain such records for the retention periods necessary to 

comply with CFTC Regulation 1.35 or such longer period as the Company deems appropriate.

Rule 3.8 Independent Software Vendors

A. A person seeking to act as an Independent Software Vendor must satisfy the 

Company’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 Company, and agree to not 

adversely affect the Company’s ability to comply with Applicable Law. Access to 
42

the Company 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 Company 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 Company 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 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 

Company requirements.
43

C. Each ISV must inform the Company 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 

A. The Company shall establish and maintain a Participant Account for each 

Participant and the Company 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 

Company shall have complete and absolute discretion as to whether any particular 

financial asset is accepted by it for credit to any Participant Account.

B. [Reserved].

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 Company and the Participant agree 

that: (1) the Digital Currency and any Digital Currency wallet maintained by 

the Company 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 Company 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 Company and upon such transfer the Company 

shall indicate by book entry that such Digital Currency has been credited 

to such Participant Account.

4. [Reserved].

D. The Company shall have only such duties and obligations with respect to each 

Participant Account as are set forth in Article 8 of the UCC or otherwise mandated 
44

by Applicable Law. Each Participant acknowledges and agrees that the Company 

is not a fiduciary for any Participant.

Rule 3.10 Withdrawal of Participant

A. To withdraw from the Company, a Participant must notify the Company of its 

withdrawal. Such withdrawal shall be accepted immediately upon receipt of such 

notice by the Company and shall be effective upon such Participant’s fulfillment of 

its obligations under paragraph (C) below, or at such other time as the Company 

may determine in its reasonable discretion is desirable for the efficient operation 

of the Company. 

B. When the Company accepts the withdrawal of a Participant, all rights and 

privileges of such Participant terminate (including, without limitation, Clearing 

Privileges) except as set forth in paragraph (C) below. The accepted withdrawal 

of a Participant shall not affect the rights of the Company under these Rules or 

relieve the former Participant of such Participant’s obligations under the Company 

Rules before such withdrawal. Notwithstanding the accepted withdrawal of a 

Participant, the withdrawn Participant remains subject to the Company Rules, the 

Obligations and the jurisdiction of the Company 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 Company 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 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;
45

3. if it has any open positions with the Company after the wind-down period, 

the Participant shall be subject to the Company 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 Contracts in its Participant Account.
46

CHAPTER 4 Liquidity Providers

Rule 4.1 Application and Agreement

A. Only Participants in good standing may become Liquidity Providers on the 

Company.

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 Company at any time and for any reason.

Rule 4.2 Appointment

A. The Company may appoint one or more Liquidity Providers for certain Company 

Contracts.

B. In making such appointments, the Company 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.

C. The Company, 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 Company 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 Company may, among other actions, suspend, terminate or restrict 

the Liquidity Provider’s appointment.
47

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 Company 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.
48

CHAPTER 5 [Reserved]
49

CHAPTER 6 Clearing and Delivery

Rule 6.1 Clearance and Substitution

A. Upon submission of an Order, the Company 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 

Company will not accept the Order.

B. Upon the successful matching of Orders, the Company’s DCO 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 

Company 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 Company Contract from or sold the Company 

Contract to the Company’s DCO, as the case may be, and the Company’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 Company Contract are deemed to consent to the 

Novation by entering the applicable Orders on the Company Platform and the 

Company DCO consents to the Novation by accepting the Orders on the Company 

Platform. 

C. Company Contracts with the same terms and conditions, as defined by the 

Company Contract Specifications, submitted to the Company’s DCO for clearing, 

are economically equivalent within the Company’s DCO and may be offset with 

each other within the Company’s DCO.

D. Upon acceptance of a Company Contract by the Company’s DCO for clearing:

1. The original Company Contract is extinguished;

2. The original Company Contract is replaced by an equal and opposite 

Company Contract between the Company’s DCO and each Participant; 

and

3. All terms of a cleared Company Contract must conform to the Company 

Contract Specifications.
50

E. If a Company Contract is rejected for clearing by the Company’s DCO for any 

reason, such Company Contract is void ab initio.

Rule 6.2 Settlement of Company Contracts

A. The Company shall maintain, on its system, a record of each Participant’s account 

balances and Company Contracts.

B. On the Settlement Date, the Company will notify all Participants of the final amount 

payable.

C. With respect to a Company Contract that is physically settled, the Company shall 

record the following transfers in Participant Accounts in the Company’s books 

and records by no later than the next Business Day after the Settlement Date 

(except as otherwise specified in the Company Contract specifications); 

provided, however, that where the same Participant has offsetting positions in the 

same Company Contract with the same terms, the following operations shall be 

netted for that Participant:

1. With respect to a futures contract: (i) to the extent a buyer has not already 

prepaid the U.S. dollar (“USD”) purchase price of the future in accordance 

with the Company Contract specifications, the buyer of the future shall be 

debited the total USD purchase price, and shall be credited with the total 

Underlying due under the Company Contract; and (ii) the seller of the 

future shall be debited the total Underlying due under the Company 

Contract, and shall be credited with the total USD purchase price. 

2. With respect to a call option contract: (i) the call option buyer shall be 

debited the total USD strike price, and shall be credited with the total 

Underlying due under the Company Contract; and (ii) the call option seller 

shall be debited the total Underlying due under the Company Contract, 

and shall be credited with the total USD strike price. 

3. With respect to a put option contract: (i) the put option buyer shall be 

debited the total Underlying set forth in the Company Contract, and shall 

be credited with the total USD strike price; and (ii) the put option seller 

shall be debited the total USD strike price due under the Company 

Contract, and shall be credited with the total Underlying set forth in the 

Company Contract. 
51

4. With respect to a swap contract that is not an option: (i) to the extent a 

buyer has not already prepaid the USD purchase price of the swap in 

accordance with the Company Contract specifications, the buyer of the 

swap shall be debited the total USD purchase price, and shall be credited 

with the total Underlying due under the Company Contract; and (ii) the 

seller of the swap shall be debited the total Underlying due under the 

Company Contract, and shall be credited with the total USD purchase 

price. 

D. For an expired Company Contract that is an option, the Company will transfer the 

Underlying to the Participant Account on the Company’s books and records of 

the Participant that initially posted the Underlying in its capacity as the option call 

writer.

E. After the notice period on the last trading day of an expiring Series of Company 

Contracts that are options, the Company will delete all such Company Contracts 

that have not been exercised from each Participant’s Participant Account. A 

Company 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. Company Contracts that are physically settled options shall not be 

exercised by the Company for a Participant automatically.

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 Company. A 

Participant must deposit funds or Underlying on the same day as the Participant 

submits to the Company a deposit notification to the Company. 

B. Deposits occur, and funds and Underlying are available for use with respect to 

trading on a SEF or DCM that clears through the Company DCO and Clearing 

Privileges, no later than the next Settlement Bank Business Day after a Participant 

submits a deposit notification and deposits funds or Underlying with the Company 

in accordance with Rule 6.3A 

C. Participants are responsible for all transfers of funds from their Company-approved 

accounts to the Collateral Account or transfers of any Underlying to the Company 

for credit to the relevant Participant Account.
52

D. In the event a Participant deposits funds or Underlying to the Company without 

submitting a deposit notification, the Participant agrees to: (1) cooperate with the 

Company to resolve any issues that may arise; and (2) agree that the Company 

will send the funds or Underlying back to the account or address from which it was 

transferred within two (2) Settlement Bank 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 Company transfers funds or Underlying to a 

Participant. Upon receipt of a withdrawal notification, the Company no longer 

permits funds or Underlying in the amount listed in the withdrawal notification to be 

used for Clearing Privileges.

B. Participants are responsible for providing accurate account numbers or wallet 

addresses, as the case may be, to allow the Company to effect transfers to the 

Participants.

C. Withdrawals occur, and funds and Underlying are available, no later than the next 

Settlement Bank Business Day after a Participant has submitted a withdrawal 

notification if the Participant submits a withdrawal notification during Trading 

Hours. 

D. With respect to withdrawals of Digital Currency collateral, the Company shall 

deliver to the Participant a cryptographically signed Digital Currency transaction, 

which shall include the two signatures, the Company “from” address, the 

Participant “to” address and the appropriate Digital Currency withdrawal amount. 

E. If a Participant fails to adhere to the withdrawal procedures set forth herein or in 

the Company Contract Specifications, as applicable, the Company 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 

Company, to the extent permitted by Applicable Law. The Company may apply the 

collateral (including any Underlying held in such Participant’s Participant Account) 

against the Participant’s Obligations.
53

Rule 6.5 Deliveries

A Participant that is required to make or accept delivery under a Company Contract agrees that 

it is required to provide full collateralization prior to entering any such Transaction or exercising 

any Company Contract so as to allow the Company to complete all necessary delivery 

requirements as set forth in the Rules. Deliveries will occur on the Company’s books and records 

unless otherwise specified in the Company 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 Company.

Rule 6.6 Reconciliation

The Company shall reconcile the positions and cash and collateral balances of each Participant 

at the end of each Settlement Bank Business Day. The Company shall make available to each 

Participant the positions and cash and collateral balances of each such 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 

Company makes available to Participants.

Rule 6.7 Swap Data Reporting

A. The Company 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. The Company 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, Company Contract type, option method, option

premium, LEIs, 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 Company 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 Company also shall transmit to 

both Swap counterparties the USI for the Swap created pursuant to CFTC 
54

Regulation 45.5 and the identity of the SDR. For Swaps involving allocation, the 

Company will transmit the USI to the Reporting Counterparty and the agent as 

required by CFTC Regulation 45.5(d)(1).

B. The Company shall from time to time designate a Swap Data Repository in respect 

of one or more Swaps and shall notify Participants of such designation. 

C. Participants that become aware of an error or omission in Regulatory Swap Data 

for a Transaction shall promptly submit corrected data to the Company. Participant 

shall not submit or agree to submit a cancellation or correction in order to gain or 

extend a delay in public dissemination of accurate Swap Transaction and Pricing 

Data or to otherwise evade the reporting requirements of Part 43 of CFTC 

Regulations. The Company 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.

D. The Company 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 Company Rules. Following the 

transmittal of the Data to the Swap Data Repository, the Company 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 Company Platform prior to being publicly 

disseminated by the Swap Data Repository.
55

CHAPTER 7 Margin

Rule 7.1 Full Collateralization of Company Contracts Required

Each Participant, on behalf of itself or Customers, shall deposit and maintain with Company funds 

or the applicable amount of the Underlying required to fully collateralize Orders pursuant to 

Company 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 

Company. If an Order is a Stop Limit Order, the full collateralization requirement will be measured 

from the point where the stop price is triggered. If a Company Contract is an option, a Participant 

shall not be permitted to exercise such option if the Participant has not already deposited and 

maintains 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 

Company or by the Company to a Participant are irrevocable and unconditional when effected. A 

Participant shall, at all times, maintain with the Company sufficient funds or the applicable amount 

of the Underlying necessary to fully collateralize each open position in a Company Contract.

Rule 7.2 Collateral

A. Subject to the terms and conditions of Company-approved margin collateral, the 

Company 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 Company will value margin collateral as it deems appropriate.

B. Except as otherwise provided herein, Collateral must be and remain 

unencumbered. Each Participant posting collateral hereby grants to the Company 

a continuing first priority security interest in, 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 Company 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 Company; (iii) such virtual “wallet” or other 
56

account; and (iv) all proceeds of the foregoing. A Participant shall execute any 

documents required by the Company 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 Company 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 Company or to a Collateral Account 

and the Company will hold collateral transferred to the Company on behalf of the 

Participant. The Company will credit to the Participant the collateral that such 

Participant deposits. Collateral shall be held by the Company until a Participant 

submits a withdrawal notification unless otherwise stipulated by these Rules.

E. The Company will not be responsible for any diminution in value of collateral that 

a Participant deposits with the Company. 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 Company.

F. The Company has the right to liquidate a Person’s Company Contracts or noncash collateral to the extent necessary to close or transfer Company Contracts, 

fulfill obligations to the Company or other Participants, and/or to return collateral in 

the event that (1) the Person ceases to be a Participant; (2) the Company 

suspends or terminates the Person’s Clearing Privileges; (3) the Person’s open 

position in any Company Contract becomes insufficiently collateralized; or (4) the 

Company determines in its sole discretion that it is necessary to take such 

measures. 

G. Without limitation of the Company’s other rights to use a Participant’s collateral as 

permitted in these Rules, under Applicable Law or otherwise, the Company may 

invest any cash deposited as collateral in accordance with CFTC Regulations 1.25

and 39.15(e), and any interest, capital gain or other income earned on such 

investments shall belong and be credited to the Company; provided, however, that, 

to the extent the Company’s Order of Registration as a derivatives clearing 

organization requires that cleared products be fully collateralized, the Company

may only invest Participant cash required for such full collateralization in interest 
57

bearing U.S. bank accounts where the funds can be accessed by the Company on 

demand.

Rule 7.3 Segregation of Participant Funds

The Company shall separately account for and segregate from the Company’s proprietary funds 

all Participant funds used to purchase, margin, guarantee, secure or settle Contracts cleared by 

the Company, and all money accruing to such Participant as the result of Contracts so carried in 

a Collateral Account. The Company shall maintain a proprietary account that will be credited with 

fees or other payments owed to the Company that are debited from the Collateral Account as a 

result of Participant trades and settlements of Contracts cleared by the Company. The Company 

shall maintain a record of each Participant’s account balances and Contracts. The Company shall 

not hold, use or dispose of Participant funds except as belonging to Participants.

Rule 7.4 Concentration Limits

The Company 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 Company determines in its sole 

discretion that the Participant’s deposit is in material excess of the amount necessary to 

collateralize the Participant’s Contracts, the Company 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 Company deems to be necessary to safeguard the 

collateral. The Company shall be entitled to charge fees related to holding non-cash collateral in 

material excess of the amount necessary to collateralize a Participant’s Contracts.
58

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 [Reserved]

Rule 8.3 [Reserved] 

Rule 8.4 [Reserved] 

Rule 8.5 Acts Detrimental to the Welfare or Reputation of the Company Prohibited

No Participant, Authorized Representative, Authorized User or ISV shall engage in any Company 

activity that tends to impair the welfare, reputation, integrity or good name of the Company.

Rule 8.6 Misuse of the Platform

Misuse of the Platform is strictly prohibited. It shall be deemed an act detrimental to the Company 

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 Company’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 Company.

B. Participants and Authorized Users shall cooperate fully with the Company 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 Company 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 

Company.
59

Rule 8.8 Business Conduct

A. Conducting clearing activities in an honorable and principled manner consistent 

with these Rules is the essence of ethical conduct with respect to the Company. 

Participants, Authorized Users and other Persons subject to the Company’s 

jurisdiction shall act with ethical integrity with regard to their Company activity, and 

shall adhere to the following ethical standards:

1. A Participant, Authorized User and any other Person subject to the 

Company’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 Company’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 

Company activity.

3. [Reserved] 

Rule 8.9 [Reserved]

Rule 8.10 [Reserved] 

Rule 8.11 [Reserved] 

Rule 8.12 [Reserved]

Rule 8.13 [Reserved[ 

Rule 8.14 [Reserved]

Rule 8.15 [Reserved]

Rule 8.16 [Reserved]

Rule 8.17 [Reserved]

Rule 8.18 [Reserved]

A.
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Rule 8.19 Compliance

Each Participant shall have a compliance program commensurate with the size and scope of its 

clearing activities on the Company 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 Company 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 Company the details of any violations of the Rules 

involving a Participant’s activities on the Company, including its own activities or 

those of another Participant, and a Participant shall promptly disclose to the 

Company 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 Company 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

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.
61

CHAPTER 9 Discipline and Enforcement

Rule 9.1 General

A. Market Monitoring

1. The Company shall record and store a record of all data entered into the 

Platform that is provided to the Company DCO, including the Participant’s 

and Authorized User’s identity, information on Transactions and any other 

information required and in accordance with the Company’s policies.

2. [Reserved]

3. The Compliance Department will conduct investigations when Compliance 

Department staff at any time has reason to believe that inappropriate 

activity of any sort is taking place on the Company, Platform or Website.

B. All Persons within the Company’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 

Company possesses disciplinary jurisdiction.

C. Compliance Department

1. The Company has a Compliance Department consisting of one or more 

compliance staff. The Chief Compliance Officer is responsible for 

overseeing the Compliance Department and shall report to the Regulatory 

Oversight Committee and the CEO.

2. The Compliance Department shall investigate 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 Company’s disciplinary jurisdiction.

3. The Compliance Department shall conduct at least annual reviews of all 

Participants to verify compliance with Company Rules. The Compliance 

Department may conduct periodic reviews of all persons and firms subject 

to the Company’s Rules to verify compliance with the Company Rules. 

Such reviews may include, but are not limited to, reviews of randomly 

selected samples of audit trail data, and reviews of account numbers.
62

D. The Company, 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 Company’s jurisdiction under Rule 3.1 is 

subject to the Company’s disciplinary authority set forth in this Chapter 9.

E. The Company, 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 Company Official shall interfere with or attempt to influence the process or 

resolution of any Disciplinary Action, except to the extent provided under 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. All parties and witnesses to a disciplinary action have the right to retain and 

be represented by legal counsel or any other representation of their 

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 Company to retain legal 

counsel, the Respondent shall be responsible for the reasonable attorney’s 

fees incurred by the Company if the Respondent does not prevail in the 

dispute.

H. The Company 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, or other agent or 

representative of such Participant, in each case, that constitute a violation as if 

such violation were that of the Participant.

I. Ex Parte Communications
63

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.

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 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;
64

2. examine books and records of any Person subject to the Company’s 

jurisdiction under Rule 3.1;

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 Company’s disciplinary jurisdiction; 

and

6. represent the Company 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 Company:

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 Company shall convene a Disciplinary Panel to adjudicate 

the findings by the Compliance Department that are under dispute. The Chief 
65

Compliance Officer or an individual designated by the Chief Compliance Officer 

may be appointed to argue the matter on behalf of the Company.

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 Company 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 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. If the Compliance Department determines that there is reasonable cause to believe 

that a Respondent has violated these Rules or Applicable Law, the Compliance 

Department shall issue a Notice of Charges to a Respondent by electronic mail. If 

the Respondent fails to acknowledge receipt of the electronic mail, the Compliance 
66

Department shall also notify the Respondent via the U.S. Postal Service to that 

Respondent’s last known address. 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 

Company, the Chief Compliance Officer shall notify the Commission’s Division of 

Market Oversight or the Division of Clearing and Risk, as appropriate, or their 

successor divisions, of that fact. At the conclusion of any such investigation, the 

Chief Compliance Officer shall provide the Commission’s Division of Market 

Oversight, or the Division of Clearing and Risk, as appropriate, or their successor 

divisions, with a copy of the report or other documentation specified in Rule 9.2.

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. After a Notice of Charges is issued, 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;
67

2. were prepared by any Company 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. If the Respondent fails to 

acknowledge receipt of the electronic mail, the Compliance Department shall also 

notify the Respondent via 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.

E. The Disciplinary Panel will conduct a fair hearing with the Compliance Department 

or other Company 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.
68

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 Company’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. If 

the Respondent has not made an appearance in the Disciplinary Action and fails 

to acknowledge receipt of the electronic mail, then the Compliance Department 

shall also notify the Respondent via 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;

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.
69

I. Either the Participant or the Compliance Department or the Company 

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 Company, other Participants, or the 

public. The Appeals Committee shall review the hearing record and any 

information submitted by the Compliance Department or the Company 

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. If the Respondent has not made 

an appearance in the Disciplinary Action and fails to acknowledge receipt of the 

electronic mail, the Compliance Department shall also notify the Respondent via 

the U.S. Postal Service to 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 Company may enter into settlements with any Respondent any time during 

the disciplinary process, including prior to the issuance of a Notice of Charges and 

prior to any final decision by the Appeals Committee. The Respondent may initiate 

a settlement offer, but only a written offer of settlement that is supported by both 

parties shall be submitted by the CCO to the Disciplinary Panel for consideration. 

A settlement offer may be withdrawn at any time, by any party, before it is accepted 

by the Disciplinary Panel.
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B. The Disciplinary Panel may accept or reject a proposed settlement, and the 

decision of the Disciplinary Panel shall be final. The Disciplinary Panel must issue 

a written decision within 15 days of receipt of a settlement offer by the CCO. 

C. Any settlement under this Rule shall be in writing and shall state:

1. the Notice of Charges, if yet served, or a summary thereof;

2. the Respondent’s answer, if any, or a summary thereof;

3. a summary of the investigation conducted;

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 Settlement Bank 

Business Days after it becomes final. Notice shall be provided by electronic mail, 

unless the Respondent has not made an appearance in the Disciplinary Action and 

fails to acknowledge receipt of the electronic mail, in which case the Compliance 

Department shall also notify the Respondent via U.S. Postal Service at the 

Respondent’s last known address.

B. The Compliance Department shall provide to the NFA for inclusion in its Internetaccessible database of disciplinary matters within two Settlement Bank Business 

Days after a decision becomes final, notice of any decision providing that a 

Respondent is suspended, expelled, disciplined or denied access to the Company.
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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 

Settlement Bank 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 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 

Clearing Privileges in particular types of Company Contracts or of placement of 

certain types of orders); and

D. [Reserved] 

E. revocation of Participant or Authorized User status or privileges, including partial 

revocation of such privileges (for example, revocation of Clearing Privileges in 

particular types of Contracts).

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 Company, 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 pursuant to these 

Rules shall restrict with equal force and effect, access to, and use of, the Company.
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C. The Compliance Department may deny or terminate the status of a Participant, 

including a 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 Company’s sole discretion, bring the Company into 

disrepute or cause the Company 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 Company may reasonably determine in its discretion.

D. [Reserved] 

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 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 Settlement Bank 

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;
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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. Whenever the Company suspends, expels, fines or otherwise disciplines or denies 

any Person access to the Company DCO, the Company will make the disclosures 

required by CFTC Regulations. Without limiting the generality of the foregoing, 

upon rendering a final decision regarding a disciplinary or access denial action, the 

Company shall provide notice to the Commission by filing with NFA’s BASIC.

B. The Company will submit to the Commission a schedule listing all those Company 

Rule violations which constitute disciplinary offenses as defined in paragraph 

(a)(6)(i) of CFTC Regulation 1.63 and, to the extent necessary to reflect revisions, 

will submit an amended schedule within thirty days of the end of each calendar 

year. The Company will maintain the schedule required by this section, and post 

the schedule on the Company’s website.

C. The Company 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 Company committee 

pursuant to these Rule or Applicable Law during the prior year.
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D. Whenever the Company 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 Company’s Disciplinary Panels, 

Company committees, or the Board, the Company 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.
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CHAPTER 10 Arbitration

Rule 10.1 In General

A. [Reserved]

B. Any Claim by a Participant against another Participant (including any related 

counterclaims) shall be settled by arbitration in accordance with this Chapter 10. 

C. Notwithstanding paragraph B, the arbitration panel, in its sole and absolute 

discretion, may decline to take jurisdiction of, or, having taken jurisdiction may at 

any time decline to proceed further with, any Claim or any other dispute, 

controversy or counterclaim, other than such as may be asserted under paragraph 

A.

D. A Claim brought pursuant to this Rule 10.1 shall be adjudicated by qualified 

arbitrators appointed in accordance with Rule 10.5 below.

E. Persons to a dispute resolved in accordance with this Chapter 10 shall have 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. 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.

F. 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.

G. Notwithstanding the foregoing, this Chapter 10 does not apply to disputes between 

Participants where:

1. such Persons are required by the rules of a non-Company Self-Regulatory 

Organization to submit to the dispute resolution procedures of that SelfRegulatory Organization; or
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2. such Persons have, by valid and binding agreement, committed to arbitrate 

or litigate in a forum other than the Company.

H. For purposes of this Chapter 10, the term “Claim” means any dispute which arises 

out of any Transaction, which dispute does not require for adjudication the 

presence of essential witnesses or third parties over whom the Company does not 

have jurisdiction or who are otherwise not available. The term “Claim” does not 

include disputes arising from underlying commodity transactions which are not a 

part of, or directly connected with, any Transaction.

Rule 10.2 Fair and Equitable Arbitration Procedures

A. A Person desiring to initiate an arbitration as provided in Rule 10.1 shall file a notice 

of arbitration (a “Notice”) within two years from the time the Claim arose. The 

Notice must set forth the name and address of the party or parties against whom 

the Claim is being asserted, the nature and substance of the Claim, the relief 

requested and the factual and legal bases alleged to underlie such relief.

B. The Notice shall be accompanied by a non-refundable check payable to the 

Company in payment of the arbitration fee. The amount of the fee shall be (i) $500 

for a Claim requesting relief totaling less than $25,000 in the aggregate or (ii) 

$1,000 for a Claim requesting relief totaling $25,000 or more in the aggregate.

C. Upon receipt, the Company shall promptly convene an arbitration panel in 

accordance with Rule 10.5. The Company shall deliver a copy of the Notice to 

each other party and to the arbitration panel.

D. Within 20 days following the delivery of the Notice, each respondent shall file a 

written response (a “Response”) with the Company, with a copy to the claimant, 

setting forth its or his position and any counterclaims, as applicable. If the 

Response sets forth one or more counterclaims, the claimant shall file within 20 

days a written reply to such counterclaims with the Company, with a copy to the 

claimant.

E. Once each party has had an opportunity to respond to the Claim and all 

counterclaims, the arbitration panel shall promptly schedule a hearing. 

Notwithstanding, Claims requesting relief totaling less than $5,000 in the 

aggregate may, in the interests of efficiency and economy, be resolved without 

hearing.
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F. The chairman of the arbitration panel shall preside over the hearing and shall make 

such determinations on the relevancy and procedure as will promote a fair and 

expeditious adjudication.

G. The arbitration panel shall consider all relevant, probative testimony and 

documents submitted by the parties. The arbitration panel shall not be bound by 

the formal rules of evidence.

H. The final decision of the panel shall be by majority vote of the arbitrators, as 

applicable.

I. Within 60 days after the termination of the hearing, the arbitration panel shall 

render its final decision in writing and deliver a copy thereof either in person or by 

first-class mail to each of the parties. The arbitration panel may grant any remedy 

or relief which it deems just and equitable, including, without limitation, the 

awarding of interest and the arbitration fee.

J. The final decision of the arbitration panel shall not be subject to appeal within the 

Company.

K. No verbatim record shall be made of the proceedings, unless requested by a party 

who shall bear the cost of such record.

Rule 10.3 Withdrawal of Arbitration Claim

Any Notice may be withdrawn at any time before the Response is filed in accordance with this 

Chapter 10. If a Response has been filed, any withdrawal shall require consent of the party 

against which the Claim is asserted.

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 pursuant to Rule 10.1G

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 that fails 
78

to timely satisfy an arbitration award rendered in any arbitration pursuant to this 

Chapter 10.

Rule 10.5 Arbitration Panel

A. On an as-needed basis, the Company shall convene an arbitration panel to 

adjudicate an arbitration claim under this Chapter 10. For a Claim requesting relief 

totaling less than $25,000 in the aggregate, the arbitration panel shall consist of 

one individual. For a Claim requesting relief totaling $25,000 or more in the 

aggregate, the arbitration panel shall consist of three individuals.

B. Members of the arbitration panel shall be individuals that do not have a direct 

interest (financial, personal or otherwise) in the matter.

C. Any member of the arbitration panel may disqualify himself for any reason he 

deems appropriate.

D. Each member of the arbitration panel shall conduct himself in a manner consistent 

with the American Bar Association/American Arbitration Association's "Code of 

Ethics for Arbitrators in Commercial Disputes," which the Company hereby adopts 

as its own code of ethics for arbitrators.

E. Each member of the arbitration panel 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.

F. In the event that members of the arbitration panel do not satisfy the requirements 

of this Rule 10.5, then the Regulatory Oversight Committee may substitute a new 

member for the arbitration panel or act as the arbitration 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.
79

CHAPTER 11 Miscellaneous

Rule 11.1 [Reserved]

Rule 11.2 Prohibition on Trading by Company 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. 

B. Company Personnel may not trade, directly or indirectly any Company Contract or 

any related financial instrument.

C. Company Representatives may not trade, directly or indirectly any Company 

Contract or financial instrument where such Company Representative has access 

to material, non-public information concerning such Company 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 Company Personnel on a case-by-case basis under circumstances where the 

Company Personnel is participating in pooled investment vehicles and the 

Company 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 Company Personnel in a retirement 

plan sponsored by the Company shall not be deemed to constitute trading directly 

or indirectly in a Company Contract or financial instrument, notwithstanding such 

plan’s trading of Company Contracts or financial instruments.

F. Any exempt Company Personnel that has received an exemption under Rule 

11.2D must:

1. furnish to the Company (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 Settlement Bank Business Day 
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of any material change of information that may affect such Company 

Personnel’s qualification for such exemption.

G. Company Representatives are prohibited from disclosing material, non-public 

information obtained as a result of their employment, agency relationship or 

engagement with the Company for any purpose inconsistent 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 the Company owns and shall retain all right, title and interest in and to 

the Company, 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 

the Company and all other related proprietary rights of the Company 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, other than Proprietary Data and Personal Information, 

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 Company. 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, 
81

create derivative works based on or otherwise modify, in any manner, all or any 

part of the Company 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 Company 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 the Company 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 

Company by such Participant or Authorized User.

D. Transaction 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.

E. The Company shall not condition access to the Company upon a Participant’s 

consent to the use of Proprietary Data and Personal Information for business or 

marketing purposes. Proprietary Data and Personal Information may not be used 

by the Company for business and marketing purposes unless the market 

participant has clearly consented to the use of Proprietary Data and Personal 

Information in such manner. The Company, where necessary, for regulatory 

purposes, may share Proprietary Data and Personal Information with one or more 

DCMs or SEFs. Nothing in this Rule shall preclude the Company from disclosing 
82

Proprietary Data and Personal Information: (1) as required by Applicable Law or 

legal process; (2) as the Company may deem necessary or appropriate in 

connection with any litigation affecting the Company; (3) to any Company 

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 

Company, provided that such party has executed a confidentiality and nondisclosure agreement in a form approved by the Company; (5) to a duly authorized 

representative of the CFTC lawfully requesting Proprietary Data and Personal 

Information; (6) in a manner in which a market participant consents to such 

disclosure; (7) pursuant to the terms of an information-sharing agreement; or (8) 

as permitted by CFTC Regulations.

Rule 11.4 Signatures

Rather than rely on an original signature, the Company 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 Company 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. 

Rule 11.6 Legal Proceedings

A. Any action, suit or proceeding against the Company, 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.
83

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 Company or (ii) any Affiliate of the 

Company or any of its respective officers, directors, equity holders, employees, 

agents, or any member of any committee, and related to the business of the 

Company, such Participant or Authorized User shall pay to the Company all 

reasonable costs and expenses, including attorneys’ fees, incurred by the 

Company in the defense of such proceeding. This Rule 11.7 shall not apply to 

Company disciplinary actions, appeals thereof, or an instance in which the Board 

has granted a waiver of the provisions hereof.

C. The Company will provide to the Commission copies of documents pertaining to 

Company-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 COMPANY 

OBLIGATIONS ARISING FROM THE ACT OR CFTC REGULATIONS, 

INCLUDING, WITHOUT LIMITATION, PART 39 OF THE CFTC REGULATIONS, 

OR OTHERWISE UNDER APPLICABLE LAW, NEITHER THE COMPANY NOR 

ANY OF ITS COMPANY 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 AS A RESULT 

OF THEIR USE OF SOME OR ALL OF THE PLATFORM OR THE WEBSITE AND 

BY MAKING USE OF THE PLATFORM OR THE WEBSITE, 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 

COMPANY OBLIGATIONS ARISING FROM THE ACT OR CFTC 

REGULATIONS, INCLUDING, WITHOUT LIMITATION, PART 39 OF THE CFTC 

REGULATIONS, OR OTHERWISE UNDER APPLICABLE LAW, NEITHER THE 
84

COMPANY NOR ANY OF ITS COMPANY 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 OR WEBSITE; (B) ANY ACT OR OMISSION ON THE PART OF THE 

COMPANY, COMPANY REPRESENTATIVES, AFFILIATES OR AFFILIATES’ 

REPRESENTATIVES INCLUDING WITHOUT LIMITATION A DECISION OF THE 

COMPANY 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 

COMPANY, AFFILIATES, THE PLATFORM, OR THE WEBSITE; (D) 

UNAUTHORIZED ACCESS TO OR UNAUTHORIZED USE OF THE PLATFORM 

OR WEBSITE BY ANY PERSON; (E) ANY FORCE MAJEURE EVENT, 

INCLUDING, BUT NOT LIMITED TO, THE UNAVAILABILITY OF THE 

BLOCKCHAIN AS REASONABLY DETERMINED BY THE COMPANY, 

AFFECTING THE COMPANY OR A COMPANY 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 COMPANY, ANY COMPANY 

REPRESENTATIVES, ANY COMPANY 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 OR THE WEBSITE, COMPANY 

PROPERTY AND ANY OTHER INFORMATION AND MATERIALS PROVIDED 

BY THE COMPANY IS AT THE PERSON’S OWN RISK, AND THE PLATFORM, 

THE WEBSITE, THE COMPANY PROPERTY AND ANY OTHER INFORMATION 

AND MATERIALS PROVIDED BY THE COMPANY HEREUNDER ARE 

PROVIDED ON AN “AS IS” AND “AS AVAILABLE” BASIS, WITHOUT 
85

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 COMPANY DOES NOT GUARANTEE THAT (A) THE COMPANY 

PROPERTY, THE PLATFORM, OR THE WEBSITE WILL OPERATE IN AN 

ERROR-FREE, SECURE OR UNINTERRUPTED MANNER; (B) ANY 

INFORMATION OR MATERIALS PROVIDED BY THE COMPANY OR 

ACCESSIBLE THROUGH THE COMPANY PROPERTY, THE PLATFORM, OR 

THE WEBSITE WILL BE ACCURATE, COMPLETE, RELIABLE, OR TIMELY; OR 

(C) THE COMPANY PROPERTY OR ANY ASPECTS OF THE PLATFORM OR 

THE WEBSITE WILL BE FREE FROM VIRUSES OR OTHER HARMFUL 

COMPONENTS. THE COMPANY SHALL HAVE NO LIABILITY FOR THE 

CREDITWORTHINESS OF ANY PERSON OR FOR THE ACTS OR OMISSIONS 

OF ANY PERSON UTILIZING THE PLATFORM, THE WEBSITE, OR ANY 

ASPECT OF THE COMPANY, PLATFORM, OR WEBSITE. A PERSON 

ACCESSING THE COMPANY IS SOLELY RESPONSIBLE FOR THE SECURITY 

AND INTEGRITY OF THE PERSON’S TECHNOLOGY. A PERSON’S ACCESS 

TO THE COMPANY MAY BE INTERNET-BASED AND THE COMPANY HAS NO 

CONTROL OVER THE INTERNET OR A PERSON’S CONNECTIONS 

THERETO. ANY PERSON ACCESSING THE COMPANY ACKNOWLEDGES 

THAT THE INTERNET, COMPUTER NETWORKS, AND COMMUNICATIONS 

LINKS AND DEVICES NECESSARY TO ENABLE A PERSON TO ACCESS AND 

USE THE PLATFORM AND THE WEBSITE 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 COMPANY 

PROPERTY WILL BE FULLY SECURE. FURTHERMORE, THE COMPANY 

SHALL HAVE NO OBLIGATION TO MONITOR OR VERIFY ANY INFORMATION 

DISPLAYED THROUGH THE PLATFORM OR THE WEBSITE.

D. A PARTICIPANT THAT DEPOSITS COLLATERAL FOR ITS BENEFIT WITH THE 

COMPANY PURSUANT TO THESE RULES SHALL HOLD THE COMPANY 

HARMLESS FROM ALL LIABILITY, LOSSES AND DAMAGES WHICH MAY 
86

RESULT FROM OR ARISE WITH RESPECT TO THE CARE AND SALE OF 

SUCH COLLATERAL PROVIDED THAT THE COMPANY HAS ACTED 

REASONABLY AND IN ACCORDANCE WITH APPLICABLE LAW UNDER THE 

CIRCUMSTANCES. FURTHERMORE, THE COMPANY HAS NO 

RESPONSIBILITY FOR ANY ACT OR OMISSION OF ANY THIRD PARTY 

SERVICE PROVIDER THAT THE COMPANY HAS CHOSEN WITH 

REASONABLE CARE. THE COMPANY HAS NO RESPONSIBILITY OR 

LIABILITY FOR ANY LOSS 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 COMPANY. 

E. NO PARTICIPANT, AUTHORIZED USER, AUTHORIZED REPRESENTATIVE 

OR ANY OTHER PERSON SHALL BE ENTITLED TO COMMENCE OR CARRY 

ON ANY PROCEEDING AGAINST THE COMPANY, ANY OF ITS COMPANY 

REPRESENTATIVES, AFFILIATES OR AFFILIATES’ REPRESENTATIVES, IN 

RESPECT OF ANY ACT, OMISSION, PENALTY OR REMEDY IMPOSED 

PURSUANT TO THE RULES OF THE COMPANY. THIS SECTION SHALL NOT 

RESTRICT THE RIGHT OF SUCH PERSONS TO APPLY FOR A REVIEW OF A 

DIRECTION, ORDER OR DECISION OF THE COMPANY BY A COMPETENT 

REGULATORY AUTHORITY.

F. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, IN NO EVENT 

SHALL THE COMPANY OR ANY OF ITS COMPANY REPRESENTATIVES, 

AFFILIATES OR AFFILIATES’ REPRESENTATIVES BE LIABLE FOR ANY 

INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL 

DAMAGES (WHETHER OR NOT THE COMPANY OR ANY SUCH PERSON HAD 

BEEN INFORMED OR NOTIFIED OR WAS AWARE OF THE POSSIBILITY OF 

SUCH DAMAGES).
87

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. 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

A. NEITHER THE COMPANY DCO 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 COMPANY, ITS REPRESENTATIVES, ITS AFFILIATES, ITS 

AFFILIATES’ REPRESENTATIVES, OR ANY SEF OR DCM CLEARING 

THROUGH THE COMPANY DCO RELATING TO ANY DECISION BY THE 

COMPANY 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 
88

OR NOT THE COMPANY, ITS REPRESENTATIVES, ITS AFFILIATES OR ITS 

AFFILIATES’ REPRESENTATIVES (OR ANY DESIGNEE THEREOF), OR ANY 

SEF OR DCM CLEARING THROUGH THE COMPANY DCO WERE ADVISED 

OF OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF SUCH 

DAMAGES.

Rule 11.9 Company Contacts

All requests to cancel cleared trades must be directed to the Company via the Participant Portal 

or the Company telephone number posted on the website. Any such request will be acted upon 

on a best-efforts basis by the relevant Company Personnel.

Rule 11.10 [Reserved]

Rule 11.11 [Reserved]

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 

Company, and set forth in a Participant Notice and on the Website.

Rule 11.13 Transfer of Trades

A. The Chief Compliance Officer or his or her designee may, upon request by the 

Participant(s), approve a transfer of existing trades and collateral either on the 

books of the same Participant, or from the books of one Participant to the books 

of another Participant if the transfer is (i) between accounts with identical 

beneficial ownership or (ii) in connection with, or as a result of, an asset 

purchase, corporate restructuring, consolidation or similar non-recurring 

transaction between two or more entities. Such a transfer must meet each of the 

following conditions:

1. The transfer must result in the transfer of all existing open positions and 

collateral in the transferor account;

2. Immediately prior to the transfer, the transferee account must not have any 

existing open positions or collateral; and

3. All trades involved in the transfer must remain fully collateralized upon 

completion of the transfer.
89

B. Provided that the transfer is permitted pursuant to paragraph (A) above, the 

transactions must be recorded and carried on the books of the receiving Participant 

at the original trade dates with the original trade prices.

C. All transfers shall be reported to the Company in a form acceptable to the Company 

for the type of transactions involved. The Participant(s) involved shall maintain a 

full and complete record of all transactions together with all pertinent memoranda.

Rule 11.14 Digital Currency Fork Policy

At some point in the future, there may be a change, or anticipated change, to the relevant 

operating rules, protocols, processes, or standards applicable to a Digital Currency underlying a 

Company Contract, including without limitation a hard fork, a user activated soft fork, or other 

events resulting in a split, division, alteration, conversion, replacement, of substitution of a 

Digital Currency into another form, a restriction on the transfer of the Digital Currency (such as a 

lockup or freeze), or a distribution of another asset to existing holders of the Digital Currency 

(such as an airdrop). Such an event may result in the creation of an asset that is subject to the 

Securities Act of 1933, as amended (the “’33 Act”), and is subject to the jurisdiction of the SEC.

In the event of such change, or anticipated change, the Company shall have the sole discretion 

to take such action, including (without limitation) emergency action under Rule 2.12, that it 

deems appropriate. Such action may include (without limitation) revising delivery obligations 

under the Company Contract (such as providing for the delivery of one or more assets resulting 

from such an event), revising other terms of the Company Contract, determining who should 

receive a newly created digital assets, assigning newly listed Company Contracts to Participants 

whose positions have been, or are anticipated to be affected, or refusing to transfer a newly 

created asset that is or may be subject to the ’33 Act or the jurisdiction of the SEC. The 

Company shall endeavor to provide reasonable notice to market participants and take action in 

consultation with market participants, where reasonably possible and appropriate, and shall 

endeavor to align the exposures of Participants holding positions in open Company Contracts 

with exposures in the spot market.

Rule 11.15 Company Contracts Not Voidable

A Company Contract will not be void or voidable due to: (1) a violation by the Company of the 

provisions of sections 5 or 5h of the CEA or Parts 37 or 38 of CFTC Regulations; (2) any CFTC 

proceeding to alter or supplement a rule, term or condition under section 8a(7) of the CEA or to 

declare an emergency under section 8a(9) of the CEA; or (3) any other proceeding the effect of 
90

which is to: (i) alter or supplement a specific term or condition or trading rule or procedures, or 

(ii) require the Company to adopt a specific term or condition, trading rule or procedure, or to 

take or refrain from taking a specific action.

CHAPTER 12 Company Contract Specifications

Rule 12.1 Monthly USD/BTC Mini 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. This Rule 12.1 pertains to options on bitcoin (as described 

further herein) (the “USDBTC Monthly Mini Options”) and contains general terms and 

conditions. Participants may enter into USDBTC Monthly Mini Options as buyers or sellers 

of calls and/or puts.

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 that are applicable to the USDBTC Monthly Mini 

Options will be as stated in Rule 5.6 above.

D. Currency. The currency applicable to USDBTC Monthly Mini Options will be United 

States dollars, which will be expressed in dollars and cents per bitcoin.

E. Underlying. The underlying applicable to USDBTC Monthly Mini Options will be bitcoin 

(sometimes referred to as “BTC”).

F. Contract Size. Each USDBTC Monthly Mini Option will be for 1/100 Underlying (i.e., oneone hundredth bitcoin).

G. Position Limits. As of any date of determination, no person will own or control positions 

in excess of 2,000,000 USDBTC Monthly Mini Options.
91

H. Collateral. All Company Contracts will be fully collateralized. Before the Company DCM 

will accept a buy order for one or more USDBTC Monthly Mini Options from a Participant, 

such Participant must have sufficient USD available for trading in its account to satisfy its 

settlement obligations on such Company Contract(s). Before the Company DCM will 

accept a sell order for one or more USDBTC Monthly Mini Options from a Participant, such 

Participant must have sufficient bitcoin available for trading in its account to satisfy its 

delivery obligations on such Company Contract(s).

I. Conventions.

a. Trade Date. With respect to any USDBTC Monthly Mini Option, the date on which 

the Company, in its sole discretion, accepts a buy or sell order, as the case may 

be.

b. Effective Date. With respect to any USDBTC Monthly Mini Option, the Trade Date 

applicable thereto.

c. Minimum Price Fluctuation. With respect to any USDBTC Monthly Mini Option, 

$0.01.

d. Initial Payment Date. With respect to any USDBTC Monthly Mini Option, the Trade 

Date applicable thereto. The buyer of a USDBTC Monthly Mini Option will pay the 

bid amount of such Company Contract on the Trade Date thereof.

e. Premium. With respect to any USDBTC Monthly Mini Option, the Buyer thereof will 

pay the premium thereon on the Initial Payment Date. In the context of a USDBTC 

Monthly Mini Option, the bid amount is equal to the Premium.

f. Last Trading Date. Friday of the calendar month, or as otherwise determined by 

the Company in its sole discretion.

g. Business Day Convention. Previous.

h. Final Payment Date. With respect to any USDBTC Monthly Mini Option, the 

Business Day next succeeding the Last Trading Date.

i. Settlement. Physical delivery on the Final Payment Date.

J. Block Trading. Each USDBTC Monthly Mini Option Block Trade must be effectuated in 

accordance with Rule 5.7. The minimum block size for the USDBTC Monthly Mini Option 

is equal to 100 contracts. All parties to a USDBTC Monthly Mini Option Block Trade must 

be Eligible Contract Participants.
92

Rule 12.2 Day-Ahead USD/BTC Mini 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 Company 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. This 

Rule 12.7 pertains to swaps on bitcoin (as described further herein) (the “Day-ahead Mini 

Swaps”) and contains general terms and conditions. The Day-ahead Mini Swap requires 

that a buyer pay USD on the Initial Payment Date, and that the seller pay BTC on the Final 

Payment Date. 

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 that are applicable to the USDBTC Day-ahead Mini 

Swap will be as stated in Rule 5.6 above.

D. Currency. The currency applicable to USDBTC Day-ahead Mini Swap will be United 

States dollars, which will be expressed in dollars and cents per bitcoin.

E. Underlying. The underlying applicable to USDBTC Day-ahead Mini Swaps will be bitcoin 

(sometimes referred to as “BTC”).

F. Contract Size. Each USDBTC Day-ahead Mini Swap will be for 1/100 Underlying (i.e., 

one-one hundredth bitcoin).

G. Position Limits. As of any date of determination, no person will own or control positions 

in excess of 2,000,000 USDBTC Day-ahead Mini Swaps.

H. Collateral. All Company Contracts will be fully collateralized. Before the Company DCM 

will accept a buy order for one or more USDBTC Day-ahead Mini Swaps from a 

Participant, such Participant must have sufficient USD available for trading in its account 
93

to satisfy its settlement obligations on such Company Contract(s). Before the Company 

DCM will accept a sell order for one or more USDBTC Day-ahead Mini Swaps from a 

Participant, such Participant must have sufficient bitcoin available for trading in its account 

to satisfy its delivery obligations on such Company Contract(s).

I. Conventions.

a. Trade Date. With respect to any USDBTC Day-ahead Mini Swap, the date on 

which the Company, in its sole discretion, accepts a buy or sell order, as the case 

may be.

b. Effective Date. With respect to any USDBTC Day-ahead Mini Swap, the Trade 

Date applicable thereto.

c. Minimum Price Fluctuation. With respect to any USDBTC Day-ahead Mini Swap, 

$0.01.

d. Initial Payment Date. With respect to any USDBTC Day-ahead Mini Swap, the 

Trade Date applicable thereto. The buyer of a USDBTC Day-ahead Mini Swap will 

pay the bid amount of such Company Contract on the Trade Date thereof.

e. Premium. With respect to any USDBTC Day-ahead Mini Swap, the Buyer thereof 

will pay the premium thereon on the Initial Payment Date. In the context of a 

USDBTC Day-ahead Mini Swap, the bid amount is equal to the Premium.

f. Last Trading Date. With respect to any Day-ahead Mini Swap, the Business Day 

next succeeding the Trade Date applicable thereto.

g. Business Day Convention. Previous.

h. Final Payment Date. With respect to any USDBTC Day-ahead Mini Swap, the 

Business Day next succeeding the Last Trading Date.

i. Settlement. Physical delivery on the Final Payment Date.

J. Block Trading. Each USDBTC Day-ahead Mini Swap Block Trade must be effectuated 

in accordance with Rule 5.7. The minimum block size for the USDBTC Day-ahead Mini 

Swap is equal to 100 contracts. All parties to a USDBTC Day-ahead Mini Swap Block 

Trade must be Eligible Contract Participants. 
94

Rule 12.3 Weekly USD/BTC Mini 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. This Rule 12.8 pertains to options on bitcoin (as described 

further herein) (the USDBTC Weekly Mini Options”) and contains general terms and 

conditions. Participants may enter into USDBTC Weekly Mini Options as buyers or sellers 

of calls and/or puts. 

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 that are applicable to the USDBTC Weekly Mini 

Options will be as stated in Rule 5.6 above.

D. Currency. The currency applicable to USDBTC Weekly Mini Options will be United States 

dollars, which will be expressed in dollars and cents per bitcoin.

E. Underlying. The underlying applicable to USDBTC Weekly Mini Options will be bitcoin 

(sometimes referred to as “BTC”).

F. Contract Size. Each USDBTC Weekly Mini Option will be for 1/100 Underlying (i.e., oneone hundredth bitcoin).

G. Position Limits. As of any date of determination, no person will own or control positions 

in excess of 2,000,000 USDBTC Weekly Mini Options.

H. Collateral. All Company Contracts will be fully collateralized. Before the Company DCM 

will accept a buy order for one or more USDBTC Weekly Mini Options from a Participant, 

such Participant must have sufficient USD available for trading in its account to satisfy its 

settlement obligations on such Company Contract(s). Before the Company DCM will 
95

accept a sell order for one or more USDBTC Weekly Mini Options from a Participant, such 

Participant must have sufficient bitcoin available for trading in its account to satisfy its 

delivery obligations on such Company Contract(s).

I. Conventions.

a. Trade Date. With respect to any USDBTC Weekly Mini Option, the date on which 

the Company, in its sole discretion, accepts a buy or sell order, as the case may 

be.

b. Effective Date. With respect to any USDBTC Weekly Mini Option, the Trade Date 

applicable thereto.

c. Minimum Price Fluctuation. With respect to any USDBTC Weekly Mini Option, 

$0.01.

d. Initial Payment Date. With respect to any USDBTC Weekly Mini Option, the Trade 

Date applicable thereto. The buyer of a USDBTC Weekly Mini Option will pay the 

bid amount of such Company Contract on the Trade Date thereof.

e. Premium. With respect to any USDBTC Weekly Mini Option, the Buyer thereof will 

pay the premium thereon on the Initial Payment Date. In the context of a USDBTC 

Weekly Mini Option, the bid amount is equal to the Premium.

f. Last Trading Date. Friday of the calendar week, or as otherwise determined by the 

Company in its sole discretion.

g. Business Day Convention. Previous.

h. Final Payment Date. With respect to any USDBTC Weekly Mini Option, the 

Business Day next succeeding the Last Trading Date.

i. Settlement. Physical delivery on the Final Payment Date.

J. Block Trading. Each USDBTC Weekly Mini Option Block Trade must be effectuated in 

accordance with Rule 5.7. The minimum block size for the USDBTC Weekly Mini Option 

is equal to 100 contracts. All parties to a USDBTC Weekly Mini Option Block Trade must 

be Eligible Contract Participants.

Rule 12.4 Day-Ahead USD/BTC Mini Futures

A. Contract Description. In general, a futures contract is a legally binding agreement to 

buy or sell a standardized asset at a specified time in the future. This Rule 12.12 pertains 
96

to futures on bitcoin (as described further herein) (the “Day-ahead Mini Futures”) and 

contains general terms and conditions. The Day-ahead Mini Futures contract requires 

that a buyer pay USD on the Initial Payment Date (as defined below), and that the seller 

pay BTC on the Final Payment Date (as defined below).

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 that are applicable to the Day-ahead Mini Futures 

contract will be as stated in Rule 5.6 above.

D. Currency. The currency applicable to Day-ahead Mini Futures will be United States 

dollars, which will be expressed in dollars and cents per bitcoin.

E. Underlying. The underlying applicable to Day-ahead Mini Futures will be bitcoin 

(sometimes referred to as “BTC”).

F. Contract Size. Each Day-ahead Futures contract will be for a 1/100 Underlying (i.e., oneone hundredth bitcoin).

G. Position Limits. As of any date of determination, no person will own or control positions 

in excess of 2,000,000 Day-ahead Futures.

H. Collateral. All Company Contracts will be fully collateralized. Before the Company DCM 

will accept a buy order for one or more Day-ahead Mini Futures from a Participant, such 

Participant must have sufficient USD available for trading in its account to satisfy its 

settlement obligations on such Company Contract(s). Before the Company DCM will 

accept a sell order for one or more Day-ahead Futures from a Participant, such Participant 

must have sufficient bitcoin available for trading in its account to satisfy its delivery 

obligations on such Company Contract(s).

I. Tenor. One Business Day.

J. Conventions.
97

a. Trade Date. With respect to any Day-ahead Mini Futures contract, the date on 

which the Company, in its sole discretion, accepts a buy or sell order, as the case 

may be.

b. Effective Date. With respect to any Day-ahead Mini Futures contract, the Trade 

Date applicable thereto.

c. Minimum Price Fluctuation. With respect to any Day-ahead Mini Futures contract, 

$0.01.

d. Initial Payment Date. With respect to any Day-ahead Mini Futures contract, the 

Trade Date applicable thereto. The buyer of a Day-ahead Futures contract will pay 

the bid amount of such Company Contract on the Trade Date thereof.

e. Premium. With respect to any Day-ahead Mini Futures contract, the Buyer thereof 

will pay the premium thereon on the Initial Payment Date. In the context of a Dayahead Mini Futures contract, the bid amount is equal to the Premium.

f. Final Payment Date. With respect to any Day-ahead Mini Futures contract, the 

Business Day next succeeding the Trade Date applicable thereto.

g. Business Day Convention. Previous.

h. Settlement. Physical delivery. With respect to any Day-ahead Mini Futures 

contract, physical delivery will occur on the Final Payment Date applicable thereto.

K. Block Trading. Each Day-ahead Mini Futures Block Trade must be effectuated in 

accordance with Rule 5.7. The minimum block size for the Day-ahead Mini Futures 

contract is equal to 100 contracts. All parties to a Day-ahead Mini Futures Block Trade 

must be Eligible Contract Participants.

Rule 12.5 Weekly USD/BTC Mini Futures

A. Contract Description. In general, a futures contract is a legally binding agreement to 

buy or sell a standardized asset at a specified time in the future. This Rule 12.13 pertains 

to futures on bitcoin (as described further herein) (the “USDBTC Weekly Mini Futures”) 

and contains general terms and conditions. The USDBTC Weekly Mini Futures contract 

requires that a buyer pay USD on the Initial Payment Date (as defined below), and that 

the seller pay BTC on the Final Payment Date (as defined below).

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 
98

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 that are applicable to the USDBTC Weekly Mini 

Futures contract will be as stated in Rule 5.6 above.

D. Currency. The currency applicable to USDBTC Weekly Mini Futures will be United States 

dollars, which will be expressed in dollars and cents per bitcoin.

E. Underlying. The underlying applicable to USDBTC Weekly Mini Futures will be bitcoin 

(sometimes referred to as “BTC”).

F. Contract Size. Each USDBTC Weekly Mini Futures contract will be for a 1/100 Underlying 

(i.e., one-one hundredth bitcoin).

G. Position Limits. As of any date of determination, no person will own or control positions 

in excess of 2,000,000 USDBTC Weekly Mini Futures.

H. Collateral. All Company Contracts will be fully collateralized. Before the Company DCM 

will accept a buy order for one or more USDBTC Weekly Mini Futures from a Participant, 

such Participant must have sufficient USD available for trading in its account to satisfy its 

settlement obligations on such Company Contract(s). Before the Company DCM will 

accept a sell order for one or more USDBTC Weekly Mini Futures from a Participant, such 

Participant must have sufficient bitcoin available for trading in its account to satisfy its 

delivery obligations on such Company Contract(s).

I. Conventions.

a. Trade Date. With respect to any USDBTC Weekly Mini Futures contract, the date 

on which the Company, in its sole discretion, accepts a buy or sell order, as the 

case may be.

b. Effective Date. With respect to any USDBTC Weekly Mini Futures contract, the 

Trade Date applicable thereto.

c. Minimum Price Fluctuation. With respect to any USDBTC Weekly Mini Futures 

contract, $0.01.

d. Initial Payment Date. With respect to any USDBTC Weekly Mini Futures contract, 

the Trade Date applicable thereto. The buyer of a USDBTC Weekly Mini Futures 
99

contract will pay the bid amount of such Company Contract on the Trade Date 

thereof.

e. Premium. With respect to any USDBTC Weekly Mini Futures contract, the Buyer 

thereof will pay the premium thereon on the Initial Payment Date. In the context of 

a USDBTC Weekly Mini Futures contract, the bid amount is equal to the Premium.

f. Last Trading Date. Friday of the calendar week, or as otherwise determined by the 

Company in its sole discretion.

g. Business Day Convention. Previous.

h. Final Payment Date. With respect to any USDBTC Weekly Mini Futures contract, 

the Business Day next succeeding the Last Trading Date.

i. Settlement. Physical delivery on the Final Payment Date.

J. Block Trading. Each USDBTC Weekly Mini Futures Block Trade must be effectuated in 

accordance with Rule 5.7. The minimum block size for the USDBTC Weekly Mini Futures 

contract is equal to 100 contracts. All parties to a USDBTC Weekly Mini Futures Block 

Trade must be Eligible Contract Participants.

Rule 12.6 Monthly USD/BTC Mini Futures

A. Contract Description. In general, a futures contract is a legally binding agreement to 

buy or sell a standardized asset at a specified time in the future. This Rule 12.14 pertains 

to futures on bitcoin (as described further herein) (the “USDBTC Monthly Mini Futures”) 

and contains general terms and conditions. The USDBTC Monthly Mini Futures contract 

requires that a buyer pay USD on the Initial Payment Date (as defined below), and that 

the seller pay BTC on the Final Payment Date (as defined below).

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 that are applicable to the USDBTC Monthly Mini 

Futures contract will be as stated in Rule 5.6 above.
100

D. Currency. The currency applicable to USDBTC Monthly Mini Futures will be United 

States dollars, which will be expressed in dollars and cents per bitcoin.

E. Underlying. The underlying applicable to USDBTC Monthly Mini Futures will be bitcoin 

(sometimes referred to as “BTC”).

F. Contract Size. Each USDBTC Monthly Mini Futures contract will be for 1/100 Underlying 

(i.e., one-one hundredth bitcoin).

G. Position Limits. As of any date of determination, no person will own or control positions 

in excess of 2,000,000 USDBTC Monthly Mini Futures.

H. Collateral. All Company Contracts will be fully collateralized. Before the Company DCM 

will accept a buy order for one or more USDBTC Monthly Mini Futures from a Participant, 

such Participant must have sufficient USD available for trading in its account to satisfy its 

settlement obligations on such Company Contract(s). Before the Company DCM will 

accept a sell order for one or more USDBTC Monthly Mini Futures from a Participant, such 

Participant must have sufficient bitcoin available for trading in its account to satisfy its 

delivery obligations on such Company Contract(s).

I. Conventions.

a. Trade Date. With respect to any USDBTC Monthly Mini Futures contract, the date 

on which the Company, in its sole discretion, accepts a buy or sell order, as the 

case may be.

b. Effective Date. With respect to any USDBTC Monthly Mini Futures contract, the 

Trade Date applicable thereto.

c. Minimum Price Fluctuation. With respect to any USDBTC Monthly Mini Futures 

contract, $0.01.

d. Initial Payment Date. With respect to any USDBTC Monthly Mini Futures contract, 

the Trade Date applicable thereto. The buyer of a USDBTC Monthly Mini Futures 

contract will pay the bid amount of such Company Contract on the Trade Date 

thereof.

e. Premium. With respect to any USDBTC Monthly Mini Futures contract, the Buyer 

thereof will pay the premium thereon on the Initial Payment Date. In the context of 

a USDBTC Monthly Mini Futures contract, the bid amount is equal to the Premium.

f. Last Trading Date. Friday of the calendar month, or as otherwise determined by 

the Company in its sole discretion.
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g. Business Day Convention. Previous.

h. Final Payment Date. With respect to any USDBTC Monthly Mini Futures contract, 

the Business Day next succeeding the Last Trading Date.

i. Settlement. Physical delivery on the Final Payment Date.

J. Block Trading. Each USDBTC Monthly Mini Futures Block Trade must be effectuated in 

accordance with Rule 5.7. The minimum block size for the USDBTC Monthly Mini Futures 

contract is equal to 100 contracts. All parties to a USDBTC Monthly Mini Futures Block 

Trade must be Eligible Contract Participants.

Rule 12.7 USD/ETH Deci Options

A. Contract Description. A Participant may enter into a Company Contract as the buyer 

or the seller of a call or put option contract on ETH. For both call and put options, on the 

Initial Payment Date the buyer must pay the Premium in USD and the seller’s Participant 

Account will be credited with the Premium in USD. On the Final Payment Date, the 

buyer may elect to exercise the contract, at which point the Company Contract will be 

settled as described in Rule 6.2. All Company Contracts referencing Underlying Digital 

Currency, are subject to the LedgerX Digital Currency Fork Policy found in Rule 11.14.

B. Ethereum. Ethereum 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 Ethereum 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 Ethereum 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 that are applicable to this Company Contract will be 

as stated in Company Rule 5.6.

D. Currency. The currency applicable to USDETH Deci Options will be United States 

dollars, which will be expressed in dollars and cents per ETH.

E. Underlying. The underlying applicable to USDETH Deci Options will be Ethereum 

(sometimes referred to as “ETH”).
102

F. Contract Size. Each USDETH Deci Option will be for 1/10 Underlying (i.e., one-tenth 

ETH).

G. Listing Cycle. LedgerX shall post in a location on its website available to Participants a 

list of Company Contracts that are available for trading. At a minimum, that list shall 

include Company Contracts expiring on each of the four nearest Fridays, plus Company 

Contracts that expire on the last Friday of each of the following three calendar quarters.

H. Strike Prices and Intervals. For each expiration date on which Company Contracts are 

listed, LedgerX shall list strike prices denominated in U.S. dollars as follows:

For the nearest four weeks, LedgerX shall list Company Contracts with at least five strike 

prices at each expiry. Those strike prices shall be separated by equal intervals of at 

least $10, or such other greater amount determined by LedgerX that is at least 20% 

above and below the spot market trading range over the prior 4-week period.

For Company Contracts with later expiries, LedgerX shall list at least three strike prices 

at each expiry in intervals determined at the discretion of LedgerX based on its 

assessment of the movements of the ETH spot market.

I. Exercise Style. European (Exercise available only on the day of expiration per the 

terms of this contract specification).

J. Exercise Instructions and Procedures. For the buyer of a USDETH Deci Option 

contract to exercise that contract, the buyer must submit exercise instructions to the 

Exchange prior to the Final Payment Day/Time, and have sufficient collateral available 

for trading in buyer’s account at that time to satisfy buyer’s Settlement obligation. See 

Rules 7.1 and 7.2. USDETH Deci Option contracts will not be exercised automatically. 

See Rule 6.2.E.

K. Expiration. If a buyer of a USDETH Deci Option does not exercise that option timely, or 

lacks sufficient collateral available for trading to satisfy buyer’s Settlement obligation, 

then the option shall expire valueless.

L. Position Limits. As of any date of determination, no person will own or control 

positions in excess of 1,000,000 USDETH Deci Options.

M. Collateral. All Company Contracts will be fully collateralized. Before the Exchange will 

accept a buy order for an USDETH Deci Option from a Participant, such Participant must 
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have sufficient USD available for trading in its account to satisfy its obligation to pay the 

Premium on such Company Contract(s). Additional collateral is required from buyer to 

exercise the option, as described above. Before the Exchange will accept a sell order 

for one or more USDETH Deci Options from a Participant, such Participant must have 

the following: (i) for call options, the seller must have sufficient ETH available for trading 

in its account to satisfy its delivery obligations on such Company Contract at Settlement; 

or (ii) for put options, the seller must have sufficient USD available for trading it its 

account to satisfy its payment obligations at Settlement.

N. Conventions.

a. Trade Date. With respect to any USDETH Deci Option, 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 USDETH Deci Option, the Trade Date 

applicable thereto.

c. Strike Price. As of any Trade Date, the agreed price in U.S. dollars to be paid at 

expiration for ETH.

d. Minimum Price Fluctuation. With respect to any USDETH Deci Option, $0.01.

e. Initial Payment Date. With respect to any USDETH Deci Option, the Trade Date 

applicable thereto. The buyer of a USDETH Deci Option will pay the agreed 

amount of such Company Contract on the Trade Date thereof.

f. Premium. With respect to any USDETH Deci Option, the Buyer thereof will pay 

the premium thereon on the Initial Payment Date.

g. Last Trading Day/Time. Up to but not including 4:00 pm New York time (adjusted 

for daylight savings) on the Friday of the week and month of expiry for that 

contract, or as otherwise determined by the Exchange in its sole discretion.

h. Final Payment Day/Time. 5:00 pm New York time (adjusted for daylight savings) 

on the Friday of the week and month of expiry for that contract.

i. Settlement. Physical delivery on the Final Payment Day/Time.

O. Block Trading. Each Block Trade of as USDETH Deci Options must be effectuated in 

accordance with Rule 5.7. The minimum block size for the USDETH Deci Options is 

equal to 10 contracts. All parties to a USDETH Deci Option Block Trade must be 

Eligible Contract Participants.
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Rule 12.8 Day-Ahead USD/ETH Deci 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 Company Contract as a buyer, whereby such Participant will pay USD 

and receive ETH, or as a seller, whereby such Participant will pay ETH and receive 

USD. This Rule 12.17 pertains to swaps on Ether (as described further herein) (the 

“Day-ahead USD/ETH Deci Swaps”) and contains general terms and conditions. The 

Day-ahead USD/ETH Deci Swap requires that a buyer pay USD on the Initial Payment 

Date, and that the seller pay ETH on the Final Payment Date. All Company Contracts 

referencing Underlying Digital Currency, are subject to the LedgerX Digital Currency 

Fork Policy found in Rule 11.14.

B. Ethereum. Ethereum 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 Ethereum 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 Ethereum 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 that are applicable to this Company Contract will be 

as stated in Company Rule 5.6.

D. Currency. The currency applicable to Day-Ahead USD/ETH Deci Swaps will be United 

States dollars, which will be expressed in dollars and cents per ETH.

E. Underlying. The underlying applicable to Day-Ahead USD/ETH Deci Swaps will be 

Ethereum (sometimes referred to as “ETH”).

F. Contract Size. Each Day-Ahead USD/ETH Deci Swap will be for 1/10 Underlying (i.e., 

one-tenth ETH).

G. Listing Cycle. LedgerX shall list the Company Contract on a daily basis as available for 

trading.
105

H. Prices and Intervals. LedgerX shall list prices denominated in U.S. dollars. Those 

prices shall be separated by equal intervals of at least $10, or such other greater amount 

determined by LedgerX that is at least 20% above and below the spot market trading 

range over the prior 1-week period.

I. Position Limits. As of any date of determination, no person will own or control 

positions in excess of 1,000,000 Day-Ahead USD/ETH Deci Swaps.

J. Collateral. All Company Contracts will be fully collateralized. Before the Exchange will 

accept a buy order for a Day-Ahead USD/ETH Deci Swap from a Participant, such 

Participant must have sufficient USD available for trading in its account to satisfy its 

obligation to pay the Premium on such Company Contract(s). Before the Exchange will 

accept a sell order for one or more Day-Ahead USD/ETH Deci Swaps from a Participant, 

such Participant must have sufficient ETH available for trading in its account to satisfy its 

delivery obligations on such Company Contract at Settlement.

K. Conventions.

a. Trade Date. With respect to any Day-Ahead USD/ETH Deci Swap, 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 Day-Ahead USD/ETH Deci Swap, the Trade 

Date applicable thereto.

c. Minimum Price Fluctuation. With respect to any Day-Ahead USD/ETH Deci 

Swap, $0.01.

d. Initial Payment Date. With respect to any Day-Ahead USD/ETH Deci Swap, the 

Trade Date applicable thereto. The buyer of a Day-Ahead USD/ETH Deci Swap 

will pay the agreed Premium of such Company Contract on the Trade Date 

thereof.

e. Premium. With respect to any Day-Ahead USD/ETH Deci Swap, the Buyer 

thereof will pay the premium thereon on the Initial Payment Date. In the context 

of a Day-Ahead USD/ETH Deci Swap, the agreed amount is equal to the 

Premium.

f. Last Trading Day/Time. Up to but not including 4:00 pm New York time (adjusted 

for daylight savings) on the Business Day immediately preceding Settlement.
106

g. Final Payment Day/Time. 4:00 pm New York time (adjusted for daylight savings) 

on the Last Trading Day.

h. Settlement. Physical delivery on the Final Payment Day/Time.

L. Block Trading. Each Block Trade of as Day-Ahead USD/ETH Deci Swaps must be 

effectuated in accordance with Rule 5.7. The minimum block size for the Day-Ahead 

USD/ETH Deci Swaps is equal to 10 contracts. All parties to a Day-Ahead USD/ETH 

Deci Swap Block Trade must be Eligible Contract Participants.
107

CHAPTER 13 - CLEARING SERVICES FOR KALSHI

Rule 13.1 Clearing Services for Kalshi

A. Rules Applicable to Clearing Services.

This Chapter 13 applies to the Clearing Services the Clearing House will provide to Kalshi 

Participants for Kalshi Binary Contracts.

B. Application of Rules

Except as provided elsewhere in the Rules, only this Chapter 13 will apply to Clearing 

Services.

C. The Clearing Services.

The Clearing House shall provide the Clearing Services in a timely, accurate and 

complete manner for all Kalshi Binary Contracts that have been approved for clearing by 

the Clearing House in accordance with this Chapter 13.

Rule 13.2 Clearance and Substitution of Kalshi Binary Contracts

Rule 13.2.1 Clearance and Substitution

A. Upon submission of a Kalshi Binary Contract for clearing, the Clearing House will 

conduct a review of the Participant’s Collateral Account to ensure that the 

Participant can fully collateralize the Kalshi Binary Contract prior to providing 

Clearing Services. If the Participant’s Collateral Account does not have the 

necessary funds and/or collateral, the Clearing House will not accept the Kalshi 

Binary Contract for clearing.

B. Upon the successful acceptance of the Kalshi Binary Contract, the Clearing House 

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 Kalshi Binary 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 Kalshi Binary Contract from or 

sold the Kalshi Binary Contract to the Clearing House, as the case may be, and 

the Clearing House shall have all the rights and be subject to all the liabilities of 

such Participants with respect to such Kalshi Binary Contracts. Such substitution 
108

shall be effective in law for all purposes. The Participants of the Kalshi Binary 

Contract are deemed to consent to the Novation by submitting the Kalshi Binary 

Contracts through KalshiEX, LLC to the Clearing House and the Clearing House 

consents to the Novation by accepting the Kalshi Binary Contract and performing 

the Clearing Services.

C. Kalshi Binary Contracts with the same terms and conditions, as defined by the 

specifications of the Kalshi Binary Contracts, submitted to the Clearing House for 

clearing, are economically equivalent within the Clearing House and may be offset 

with each other within the Clearing House.

D. Upon acceptance of a Kalshi Binary Contract by the Clearing House for clearing:

1. The original Kalshi Binary Contract is extinguished;

2. The original Kalshi Binary Contract is replaced by an equal and opposite 

Kalshi Binary Contract between the Clearing House and each Participant; 

and

3. All terms of a cleared Kalshi Binary Contract must conform to the Kalshi 

Binary Contract Specifications.

E. If a Kalshi Binary Contract is rejected for clearing by the Clearing House for any 

reason, such Kalshi Binary Contract is void ab initio.

Rule 13.2.2 Settlement of Kalshi Binary Contracts

A. The Company shall maintain, on its system, a record of each Kalshi Participant’s 

account balances and Kalshi Binary Contracts.

B. On the Settlement Date, the Clearing House will notify all Kalshi Participants of the 

final amount payable.

Rule 13.2.3 Deposit Procedures

A. A Kalshi Participant must submit a deposit notification through the Kalshi 

Participant Portal before the Kalshi Participant may deposit funds with the Clearing 

House. A Kalshi Participant must deposit funds on the same day as the Kalshi 

Participant submits to the Clearing House a deposit notification to the Clearing 

House. 

B. Deposits occur, and funds are available for use with respect to Clearing Privileges, 

no later than the next Settlement Bank Business Day after a Kalshi Participant 

submits a deposit notification and deposits funds with the Clearing House in 

accordance with Rule 13.2.3.A.
109

C. Kalshi Participants are responsible for all transfers of funds from their Clearing 

House-approved accounts to the Collateral Account.

D. In the event a Kalshi Participant deposits funds to the Clearing House without 

submitting a deposit notification, the Kalshi Participant agrees to: (1) cooperate 

with the Clearing House to resolve any issues that may arise; and (2) agree that 

the Clearing House will send the funds back to the account or address from which 

it was transferred within two (2) Settlement Bank Business Days if there has been 

no resolution.

Rule 13.2.4 Withdrawal Procedures

A. Only an Authorized Representative may submit a withdrawal notification through 

the Kalshi Participant Portal before the Clearing House transfers funds to a Kalshi 

Participant. Upon receipt of a withdrawal notification, the Clearing House no longer 

permits funds in the amount listed in the withdrawal notification to be used for 

Clearing Privileges.

B. Kalshi Participants are responsible for providing accurate account numbers to 

allow the Clearing House to effect transfers to the Kalshi Participants.

C. Withdrawals occur, and funds are available, no later than the next Settlement Bank 

Business Day after a Kalshi Participant has submitted a withdrawal notification if 

the Kalshi Participant submits a withdrawal notification during Trading Hours. 

D. If a Kalshi Participant fails to adhere to the withdrawal procedures set forth herein 

or in the Kalshi Binary Contract Specifications, as applicable, the Clearing House 

will take reasonable measures to effect the withdrawal; however, if unable to effect 

the withdrawal, the Kalshi Participant’s collateral may become the sole property of 

the Clearing House, to the extent permitted by Applicable Law. The Clearing 

House may apply the collateral against the Obligations of a Kalshi Participant.

Rule 13.2.5 [RESERVED]

Rule 13.2.6 Reconciliation

The Clearing House shall reconcile the positions and cash and collateral balances of each Kalshi 

Participant at the end of each Settlement Bank Business Day. The Clearing House shall make 

available to each Kalshi Participant through Kalshi the positions and cash and collateral balances 

of each such Kalshi Participant. All Kalshi Participants shall be responsible for reconciling their 

records of their positions and cash and collateral balances with the records of positions and cash 
110

and collateral balances that the Clearing House makes available to Kalshi Participants through 

Kalshi.

Rule 13.2.7 Swap Data Reporting

A. With the assistance of Kalshi and to the extent required by Applicable Law, the 

Clearing House 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. The Clearing House 

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, Kalshi Binary Contract type, 

option method, option premium, LEIs, 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, Kalshi Participant Accounts, and whether 

a Kalshi Participant is a swap dealer, major swap Kalshi Participant or a financial 

entity. The Clearing House shall identify each counterparty to any Kalshi Binary 

Contract 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 Clearing House also shall transmit to both Swap 

counterparties and the Clearing House, the USI for the Swap created pursuant to 

CFTC Regulation 45.5 and the identity of the SDR. For Swaps involving allocation, 

the Clearing House will transmit the USI to the Reporting Counterparty and the 

agent as required by CFTC Regulation 45.5(d)(1).

B. The Clearing House shall from time to time designate a Swap Data Repository in 

respect of one or more Swaps and shall notify Kalshi Participants of such 

designation. Currently, the Clearing House reports all Regulatory Swap Data for 

all Swaps to ICE Trade Vault.

C. Kalshi Participants that become aware of an error or omission in Regulatory Swap 

Data for a Kalshi Binary Contract shall promptly submit corrected data to the 

Clearing House. Kalshi Participant shall not submit or agree to submit a 

cancellation or correction in order to gain or extend a delay in public dissemination 

of accurate Kalshi Binary Contract transaction and Pricing Data or to otherwise 

evade the reporting requirements of Part 43 of CFTC Regulations. Clearing House 
111

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.

D. The Clearing House sends the Regulatory Swap Data as set forth in Rule 13.2.7.A 

to the Swap Data Repository as soon as technologically practicable after a trade 

has been cleared, or pursuant to the Clearing House Rules. Following the 

transmittal of the Data to the Swap Data Repository, the Clearing House will make 

available the Swap Transaction and Pricing Data to all Kalshi Participants. 

However, due to transmission and posting timing of the Swap Data Repository, 

Kalshi Participants should be aware that the Kalshi Binary Contract transaction 

and Pricing Data may be available on the Clearing House Platform prior to being 

publicly disseminated by the Swap Data Repository.

Rule 13.3 Margin for Kalshi Binary Contracts

Rule 13.3.1 Full Collateralization of Kalshi Binary Contracts Required

Each Kalshi Participant shall deposit funds required to fully collateralize the Kalshi Binary Contract 

pursuant to Kalshi Binary Contract Specifications prior to submission of such Orders to Kalshi, 

and in all cases, prior to the submission of the Kalshi Binary Contract to the Clearing House. 

Collateral transfers made by a Kalshi Participant to the Clearing House or by the Clearing House 

to a Kalshi Participant are irrevocable and unconditional when effected.

Rule 13.3.2 Collateral

A. Subject to the terms and conditions of Clearing House-approved margin collateral, 

the Clearing House will accept from Kalshi Participants the following as margin 

collateral: U.S. Dollars. The Clearing House will value margin collateral as it 

deems appropriate.

B. Except as otherwise provided herein, Collateral must be and remain 

unencumbered. Collateral posted by Kalshi Participants shall be legally and 

operationally segregated from (i) the property of the Clearing House; (ii) the 

property of other members of the DCO, and (iii) customer property posted to the 

Clearing House that is not associated with Kalshi Binary Contracts (i.e., when a 

Participant has been onboarded separately both with the Company, acting in its 

capacity as a DCM and Kalshi, the DCO shall legally and operationally segregate 
112

the property posted by that participant at each separate DCM, as between the two 

DCMs).

C. Each Kalshi Participant posting collateral hereby grants to the Clearing House a 

continuing first priority security interest in, lien on, right of setoff against and 

collateral assignment of all of such Kalshi Participant’s right, title and interest in 

and to any property and collateral deposited with the Clearing House by the Kalshi 

Participant, whether now owned or existing or hereafter acquired or arising, 

including without limitation the following: (i) such Kalshi Participant Account and all 

securities entitlements held therein and all funds held in a Collateral Account and 

(ii) all proceeds of the foregoing. A Kalshi Participant shall execute any documents 

required by the Clearing House to create, perfect and enforce such lien. 

D. Each Kalshi Participant hereby agrees that with respect to any other financial asset 

which is or may be credited to the Kalshi Participant’s Kalshi Participant Account, 

the Clearing House 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.

E. A Kalshi Participant must transfer the collateral to the Clearing House or to a 

Collateral Account and the Clearing House will hold collateral transferred to the 

Clearing House on behalf of the Kalshi Participant. The Clearing House will credit 

to the Kalshi Participant the collateral that such Kalshi Participant deposits. 

Collateral shall be held by the Clearing House until a Kalshi Participant submits a 

withdrawal notification unless otherwise stipulated by these Rules.

F. The Clearing House will not be responsible for any diminution in value of collateral 

that a Kalshi Participant deposits with the Clearing House. Any fluctuation in 

markets is the risk of each Kalshi Participant. Any interest earned on Kalshi 

Participant collateral may be retained by the Settlement Bank or the Clearing 

House.

G. The Clearing House has the right to liquidate a Person’s Kalshi Binary Contracts 

or non-cash collateral to the extent necessary to close or transfer Kalshi Binary 

Contracts, fulfill obligations to the Clearing House or other Kalshi Participants, 

and/or to return collateral in the event that (1) the Person ceases to be a Kalshi 

Participant; (2) the Clearing House suspends or terminates the Person’s Clearing 

Privileges; or (3) the Clearing House determines in its sole discretion that it is 

necessary to take such measures. 
113

Rule 13.3.3 Segregation of Kalshi Participant Funds

The Clearing House shall separately account for and segregate from the Clearing House’s 

proprietary funds all Kalshi Participant funds used to purchase, margin, guarantee, secure or 

settle Kalshi Binary Contracts, and all money accruing to such Kalshi Participant as the result of 

Kalshi Binary Contracts so carried in a Collateral Account. The Clearing House shall maintain a 

proprietary account that will be credited with fees or other payments owed to the Clearing House 

that are debited from the Collateral Account as a result of Kalshi Participant trades and 

settlements of Kalshi Binary Contracts. The Clearing House shall maintain a record of each Kalshi 

Participant’s account balances and Kalshi Binary Contracts. The Clearing House shall not hold, 

use or dispose of Kalshi Participant funds except as belonging to Kalshi Participants.

Rule 13.3.4 Concentration Limits

The Clearing House 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 Clearing House 

determines in its sole discretion that the Kalshi Participant’s deposit is in material excess of the 

amount necessary to collateralize the Kalshi Participant’s Kalshi Binary Contracts, the Clearing 

House shall have the right to (1) transfer non-cash collateral, including Digital Currencies, back 

to a Kalshi Participant, and Kalshi Participant agrees to accept such transfer, or (2) take other 

action the Clearing House deems to be necessary to safeguard the collateral. The Clearing House 

shall be entitled to charge fees related to holding non-cash collateral in material excess of the 

amount necessary to collateralize a Kalshi Participant’s Kalshi Binary Contracts.

Rule 13.4 Clearing House Systems and Collateral. 

Clearing House shall maintain information systems that track the amount of available collateral 

held from time to time by Kalshi Participants at Clearing House or Clearing House’s settlement 

bank and make such information available to Kalshi to the same extent it is available to Clearing 

House so that Kalshi’s automated systems can apply such information in the relevant systems to 

perform its functions.
114

Rule 13.5 LedgerX API. 

In order to provide the Clearing Services, Kalshi shall have and will maintain in effect an 

operational interface between its systems and the relevant systems of Clearing House. Clearing 

House shall maintain and support an Application Programming Interface (“Clearing House API”), 

to enable the transmission of data as necessary to provide Clearing Services.
115

Rule 13.6 Other Rules That Are Applicable To Kalshi Participants.

All Rules in this Chapter 13 apply to the Clearing Services for Kalshi Binary Contracts.

In addition, the following specific Rules apply to Kalshi Participants, as if they were Participants, 

and the Kalshi Binary Contracts, provided, however that such Rules are applicable only to the 

extent that such Rules are related to Clearing Services:

A. Chapter 1 (Definitions)

B. Chapter 2 (Company Governance)

C. Rule 3.1 (Jurisdiction, Applicability of Rules)

D. Rule 3.2 (Participants – Applications, Agreements, Eligibility Criteria, 

Classifications and Privileges), provided that Kalshi Participants are Participants 

only with regard to Clearing Services.

E. Rule 3.3 (Participant Obligations), provided that Kalshi Participants have 

Participant Obligations only with regard to Clearing Services.

F. Rule 8.5 (Acts Detrimental to the Welfare or Reputation of the Company 

Prohibited) and Rule 8.6 (Misuse of the Platform)

G. Rule 8.19 (Compliance)

H. Chapter 9 (Discipline and Enforcement), but only with regard to Clearing Services.

I. Chapter 11 (Miscellaneous), including Rule 11.2; Rule 11.3; Rule 11.4; Rule 11.5; 

Rule 11.6; Rule 11.7; Rule 11.9; and Rule 11.13, but only with regard to the 

Clearing Services.

Rule 13.7 Other Rules That Are Not Applicable To Kalshi Participants.

The following rules do not apply to Kalshi Participants, as such rules or related rules are set forth 

in the rules of Kalshi:

A. [Reserved]

B. Chapter 4 (Liquidity Providers)

C. [Reserved]

D. Chapter 6 (Clearing and Delivery), but see Rules 13.2, et. seq.

E. Chapter 7 (Margin), but see Rules 13.3, et. seq.

F. Chapter 8 of this Rulebook does not apply to Kalshi Participants, except for 

Rules 8.5, 8.6, and 8.19 as set forth in Rule 13.6. For the avoidance of doubt, 

Kalshi is responsible for all trade practice related activity on its exchange; 

Clearing House is not responsible for trade practice surveillance.
116

G. Chapter 9, except as to Investigations, Discipline and Enforcement related to 

Clearing Services.

H. Chapter 10, except as applied to Clearing Services.

I. Rules 11.8 (Error Trade Policy), provided, however, that Clearing House and 

Kalshi shall coordinate with regard to Error Trade pursuant to the rules of Kalshi.

J. Chapter 12 does not apply to Kalshi Participants.

Rule 13.8 Liability

For the avoidance of doubt, Clearing House shall not have any liability for trading issues on Kalshi, 

as it is only providing Clearing Services to Kalshi Participants.

Rule 13.9 LIMITATION OF LIABILITY; NO WARRANTIES FOR CLEARING SERVICES

A. EXCEPT AS OTHERWISE SET FORTH IN THE RULES, OR DUE TO 

CLEARING HOUSE OBLIGATIONS ARISING FROM THE ACT OR CFTC 

REGULATIONS, INCLUDING PART 39 OF THE CFTC REGULATIONS, OR 

OTHERWISE UNDER APPLICABLE LAW, NEITHER THE CLEARING HOUSE 

NOR ANY OF ITS CLEARING HOUSE 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 AS A 

RESULT OF THEIR USE OF SOME OR ALL OF THE CLEARING SERVICES, 

SUCH PERSONS EXPRESSLY AGREE TO ACCEPT ALL LIABILITY ARISING 

FROM THEIR USE OF SAME AS WELL AS THEIR USE OF KALSHI.

B. EXCEPT AS OTHERWISE SET FORTH IN THESE RULES OR DUE TO 

CLEARING HOUSE OBLIGATIONS ARISING FROM THE ACT OR CFTC 

REGULATIONS, INCLUDING PART 39 OF THE CFTC REGULATIONS, OR 

OTHERWISE UNDER APPLICABLE LAW, NEITHER THE CLEARING HOUSE 

NOR ANY OF ITS CLEARING HOUSE 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, 
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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 KALSHI 

OR THE PLATFORM; (B) ANY ACT OR OMISSION ON THE PART OF THE 

CLEARING HOUSE, CLEARING HOUSE REPRESENTATIVES, AFFILIATES 

OR AFFILIATES’ REPRESENTATIVES INCLUDING WITHOUT LIMITATION A 

DECISION OF THE CLEARING HOUSE 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 CLEARING HOUSE, AFFILIATES, THE 

PLATFORM OR KALSHI; (D) UNAUTHORIZED ACCESS TO OR 

UNAUTHORIZED USE OF THE PLATFORM OR KALSHI BY ANY PERSON; (E) 

ANY FORCE MAJEURE EVENT AFFECTING THE CLEARING HOUSE OR A 

KALSHI BINARY CONTRACT; OR (F) ANY LOSS TO ANY KALSHI 

PARTICIPANT RESULTING FROM A KALSHI PARTICIPANT’S OWN 

SECURITY OR THE INTEGRITY OF A KALSHI PARTICIPANT’S 

TECHNOLOGY OR TECHNOLOGY SYSTEMS. THIS LIMITATION OF 

LIABILITY WILL APPLY REGARDLESS OF WHETHER OR NOT THE 

CLEARING HOUSE, ANY CLEARING HOUSE REPRESENTATIVES, ANY 

CLEARING HOUSE 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, KALSHI, CLEARING HOUSE 

PROPERTY AND ANY OTHER INFORMATION AND MATERIALS PROVIDED 

BY THE CLEARING HOUSE IS AT THE PERSON’S OWN RISK, AND THE 

PLATFORM, THE CLEARING HOUSE PROPERTY AND ANY OTHER 

INFORMATION AND MATERIALS PROVIDED BY THE CLEARING HOUSE 

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 
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PRACTICE. THE CLEARING HOUSE DOES NOT GUARANTEE THAT (A) THE 

CLEARING HOUSE PROPERTY OR THE PLATFORM WILL OPERATE IN AN 

ERROR-FREE, SECURE OR UNINTERRUPTED MANNER; (B) ANY 

INFORMATION OR MATERIALS PROVIDED BY THE CLEARING HOUSE OR 

ACCESSIBLE THROUGH THE CLEARING HOUSE PROPERTY OR THE 

PLATFORM WILL BE ACCURATE, COMPLETE, RELIABLE, OR TIMELY; OR 

(C) THE CLEARING HOUSE PROPERTY OR ANY ASPECTS OF THE 

PLATFORM WILL BE FREE FROM VIRUSES OR OTHER HARMFUL 

COMPONENTS. THE CLEARING HOUSE 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 CLEARING HOUSE OR PLATFORM. A PERSON ACCESSING THE 

CLEARING HOUSE IS SOLELY RESPONSIBLE FOR THE SECURITY AND 

INTEGRITY OF THE PERSON’S TECHNOLOGY. A PERSON’S ACCESS TO 

THE CLEARING HOUSE MAY BE INTERNET-BASED AND THE CLEARING 

HOUSE HAS NO CONTROL OVER THE INTERNET OR A PERSON’S 

CONNECTIONS THERETO. ANY PERSON ACCESSING THE CLEARING 

HOUSE 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 KALSHI 

PARTICIPANT’S DATA, HARDWARE, OR SOFTWARE OR THE PLATFORM 

OR OTHER CLEARING HOUSE PROPERTY WILL BE FULLY SECURE. 

FURTHERMORE, THE CLEARING HOUSE SHALL HAVE NO OBLIGATION TO 

MONITOR OR VERIFY ANY INFORMATION DISPLAYED THROUGH THE 

PLATFORM.

D. A KALSHI PARTICIPANT THAT DEPOSITS COLLATERAL FOR ITS BENEFIT 

WITH THE CLEARING HOUSE PURSUANT TO THESE RULES SHALL HOLD 

THE CLEARING HOUSE 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 CLEARING 

HOUSE HAS ACTED REASONABLY AND IN ACCORDANCE WITH 

APPLICABLE LAW UNDER THE CIRCUMSTANCES. FURTHERMORE, THE 
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CLEARING HOUSE HAS NO RESPONSIBILITY FOR ANY ACT OR OMISSION 

OF ANY THIRD PARTY SERVICE PROVIDER THAT THE CLEARING HOUSE 

HAS CHOSEN WITH REASONABLE CARE. THE CLEARING HOUSE HAS NO 

RESPONSIBILITY OR LIABILITY FOR ANY LOSS OF COLLATERAL THAT 

RESULTS, DIRECTLY OR INDIRECTLY, FROM A BREACH TO A KALSHI

PARTICIPANT’S SECURITY OR ELECTRONIC SYSTEMS, INCLUDING BUT 

NOT LIMITED TO CYBER ATTACKS, OR FROM A KALSHI PARTICIPANT’S 

NEGLIGENCE WITH RESPECT TO A WALLET, ADDRESS OR THE RECEIPT 

OF COLLATERAL UPON THE REQUEST OF A WITHDRAWAL, OR FROM A 

KALSHI PARTICIPANT’S DEPOSIT, MISTAKE, ERROR, NEGLIGENCE, OR 

MISCONDUCT WITH RESPECT TO ANY COLLATERAL TRANSFERS A 

KALSHI PARTICIPANT MAKES OR ATTEMPTS TO MAKE TO THE CLEARING 

HOUSE. 

E. NO KALSHI PARTICIPANT, AUTHORIZED USER, AUTHORIZED 

REPRESENTATIVE OR ANY OTHER PERSON SHALL BE ENTITLED TO 

COMMENCE OR CARRY ON ANY PROCEEDING AGAINST THE CLEARING 

HOUSE, ANY OF ITS CLEARING HOUSE REPRESENTATIVES, AFFILIATES 

OR AFFILIATES’ REPRESENTATIVES, IN RESPECT OF ANY ACT, 

OMISSION, PENALTY OR REMEDY IMPOSED PURSUANT TO THE RULES OF 

THE CLEARING HOUSE. THIS SECTION SHALL NOT RESTRICT THE RIGHT 

OF SUCH PERSONS TO APPLY FOR A REVIEW OF A DIRECTION, ORDER 

OR DECISION OF THE CLEARING HOUSE BY A COMPETENT REGULATORY 

AUTHORITY.

F. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, IN NO EVENT 

SHALL THE CLEARING HOUSE OR ANY OF ITS CLEARING HOUSE 

REPRESENTATIVES, AFFILIATES OR AFFILIATES’ REPRESENTATIVES BE 

LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR 

SPECIAL DAMAGES (WHETHER OR NOT THE CLEARING HOUSE 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. FAILURE TO 
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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 13.8 RULE 

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 13.8 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 13.10 Approved Kalshi Binary Contract Specifications

Kalshi contracts that have been accepted for clearing are referenced in Rule 2.17(a) and 13.1 of 

the Kalshi Rulebook.