June 21, 2023 

Submitted via CFTC Portal 

Secretary of the Commission 

Office of the Secretariat 

Commodity Futures Trading Commission 

Three Lafayette Centre 

1155 21st Street, N.W. 

Washington, D.C. 20581 

Re: TeraExchange, LLC – Regulation 40.6 Delisitng of Option - USD LIBOR Fixed for Floating IRS

Ladies and Gentlemen: 

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

“Commission”) of its intent to delist Option - USD LIBOR Fixed for Floating IRS from the TeraExchange swap 

execution facility. TeraExchange intends to delist this Contract effective June 26, 2023. 

Pursuant to Commission Regulation 40.6, this submission includes: 

1. A copy of the submission cover sheet in accordance with the instructions provided in Appendix D to 

Part 40 of the Commission’s regulations, attached as Exhibit A. 

2. The intended delisting date is June 26, 2023. 

3. A certification by TeraExchange that (a) the Contract complies with the Commodity Exchange 

Act, as amended (the “Act”), and the Commission regulations thereunder; and (b) concurrent 

with this submission, TeraExchange posted on its website (i) a notice of pending certification 

of the Contract and (ii) a copy of this submission, attached as Exhibit B; 

4. The Contract’s terms and conditions, attached as Exhibit C; and 

5. An explanation of the purpose of the delisting of the Contract, attached as Exhibit D. 

Questions regarding this submission should be directed to Todd Langdon, Chief Compliance Officer, at 908-273-

8277 or by e-mail at tlangdon@teraexchange.com. 

Sincerely, 

 Christopher Rossman 

Christopher Rossman 

Chief Operating Officer 

 
EXHIBIT A 
EXHIBIT B 

CERTIFICATIONS PURSUANT TO SECTION 5c OF THE COMMODITY 

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

COMMISSION REGULATION 40.2, 17 C.F.R. §40.2

TeraExchange, LLC (“TeraExchange”) hereby certifies that: a) the Option - USD LIBOR Fixed 

for Floating IRS Contract complies with the Commodity Exchange Act, 7 U.S.C. §1 et seq. and 

the Commodity Futures Trading Commission (the “Commission”) regulations thereunder; and 

b) concurrent with this submission, TeraExchange, posted on its website: (i) a notice of 

delisting of the Contract with the Commission; and (ii) a copy of this submission.

TeraExchange, LLC 

By: Christopher Rossman 

Name: Christopher Rossman 

Title: Chief Operating Officer 

Date: June 21, 2023 

 
EXHIBIT C 

Terms and Conditions 

 

Trade Structure A USD Swaption is an option exercisable on a specific date granting the owner the right, but not the obligation, to 

enter into an underlying USD LIBOR Swap listed for trading by TeraExchange.

ISDA Taxonomy

 OTC Asset Class: Interest Rate (IR)

 OTC Base Product: Option (O)

 OTC Sub-Product: Swaption (SWO)

Trading Hours: 00:01 to 24:00 Eastern Standard Time or as otherwise published on TeraExchange website

Currency: United States Dollar (USD)

Counterparties: Buyer purchases the right to exercise the option; Seller sells the right to exercise the option

Option Type: Payer, Receiver or Straddle

Trading Conventions:

A payer option gives the owner of the option the right to enter into a swap where it pays the fixed leg and receives 

the floating leg. A receiver option gives the owner of the option the right to enter into a swap where it receives the 

fixed leg and pays the floating leg. A straddle option gives the owner the right to determine whether to pay or recive 

fixed on the Exercise Date.

Strike Price: Fixed rate that will be used for the underlying Interest Rate Swap if exercised

*Quoting Convention: Quoted in $ Premium (basis points of notional)

Premium Payment Date: Date the premium is paid to the seller, calculated as the trade date plus two business days, or as specified by the 

counterparties

*Option Tenor: 1-month; 2-month; 3-month; 6-month; 12-month; 18-month; and 24-month

*Option Exercise Date: Date on which buyer's right to exercise option expires, calculated as trade date plus Option Tenor, subject to option 

day count frequency, day count convention and local calendar, or as specified by the counterparties.

Roll Type: Standard or IMM Dates

*Roll/Payment Date Holiday Calendar: New York (USNY), London (GBLO)

*Day Count Convention: ACT/360; 30/360; ACT/365.FIXED

*Business Day Convention: Following; Modified Following; Preceeding

*Option Settlement: Cleared, Physical or Cash, as specified by counterparties

 Physical Settlement: Seller grants buyer the right to cause the underlying IRS swap transaction to become effective.

 Cleared Physical Settlement: Seller grants buyer the right to cause the underlying IRS swap transaction to become effective, provided, however 

that the underlying IRS swap transaction is cleared through a mutually agreed upon Clearing House.

 Cash Settlement:

Seller grants buyer the right to cause seller to pay to buyer the cash settlement amount in lieu of physical delivery, if 

any, on the cash settlement payment date. Cash settlement includes details of applicable valuation date, time, 

business center, settlement currency, quotation rate, rate source and reference banks.

Underlying Swap: USD LIBOR Fixed for Floating IRS

*Max Maturity (Underlying Swap): 30 Years

*Notional: Notional amount of the underlying swap (1 million currency unit minimum)

*Reset Frequency: Quarterly (3M USD-ICE-LIBOR)

*Payment Frequency: 3M (Float leg only) 6M (Fixed leg only)

*Fixing Date: Two London Business Days prior to the Reset Date, subject to Preceding Business Day adjustment

*Floating Rate Index: USD-ICE-LIBOR (3 Month USD)

*Fixing Date Holiday Calendar: London (GBLO)

Exercise Method:

The purchaser of the Swaption must notify the seller of the Swaption of the purchaser's intent to exercise the 

Swaption prior to negotiation of the manner of exercise (physical delivery or cash). Notice shall be in the form 

indicated on the order ticket. If counterparties elect the exercise by physical delivery, the counterparties must submit 

the underlying Swap for clearing to the designated Clearing House, otherwise cash will be exchanged.

Exercise Procedure:

As determined by the Clearing House. In the case of exercise by physical delivery, positions in the underlying swap will 

be established via book entry by the designated Clearing House. In the case of cash settlement, the exercise shall be 

conducted by exchanging cash as agreed by the counterparties.

Block Size: As set forth in Appendix F to Part 43 of the CFTC Regulations

Position Accountability: Position accountability will be the same as for the underlying swap, as determined and published by TeraExchange 

under CFTC Regulation 37.600(c)

*The above items represent the customary attributes of the swaption contracts; those marked with an asterisk "*" may be customized by agreement of counterparties in conformance with the Clearing 

Venue Specifications, if applicable.

Option - USD LIBOR FIXED FOR FLOAT IRS
EXHIBIT D 

EXPLANATION OF THE DELISTING OF THE CONTRACT 

As required by Commission Regulation § 40.6(a)(7)(v), TeraExchange presents the following explanation, in 

narrative form, regarding the decision to delist Option - USD LIBOR Fixed for Floating IRS. 

LIBOR was phased out at the end of 2021 and as of late 2022 parts of LIBOR have been discontinued. The 

remainder of LIBOR is scheduled to end within 2023. As this contract references LIBOR which is set to be 

discontinued presently and since TeraExchange has no open interest in the contracts, the decision has been made 

to delist the contract.