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200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

Jaime M. Walsh

+1 (312) 884-0927

Jaime.walsh@nadex.com

No. 20221223(2)

December 23, 2022

Via CFTC Portal Submissions

Mr. Christopher Kirkpatrick

Secretary of the Commission

Office of the Secretariat

Commodity Futures Trading Commission

3 Lafayette Centre 

1155 21st Street, N.W. 

Washington D.C. 20581

RE: Rule Certification: Nadex Delists China 50 Binary Contracts - Submission 

Pursuant to Commission Regulation §40.6(a)

Dear Mr. Kirkpatrick:

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

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

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

“Exchange”) hereby submits to the Commission its intent to delist its China 5 Binary Contracts. 

Specifically, Nadex will be delisting the following contracts:

RULE 12.57 CHINA 50 BINARY CONTRACTS

 As §40.6(a) exempts the delisting of a product from the 10-day review period, Nadex will 

list the aforementioned contracts effective at the close of business on trade date Friday, December

23, 2022.

As of the close of business on December 23, 2022, all China 50 Binary Contracts will have 

expired and no open positions or working orders will exist in the Nadex market. 

Amendments to the Rulebook to remove the relevant contract specifications have been 

outlined in Exhibit A. Specific amendments are set forth in Exhibit B. Any deletions are stricken 

out while the amendments and/or additions are underlined.

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

amended, and the Commission Regulations adopted thereunder. No substantive opposing views 
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were expressed to Nadex with respect to any of these actions. Nadex hereby certifies that notice 

of these events was posted on its website at the time of this filing.

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

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

 

 Sincerely, 

 Jaime M. Walsh

 Head of Legal
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EXHIBIT A

Rule Asset Duration/Close Time Action Effective 

Date

12.57 China 50 Binary

Contracts

All Contracts Delist contracts COB 

December 23, 

2022
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EXHIBIT B

Amendment of Rules 12.57

(The following Rule amendments are underlined and deletions are stricken out)

RULES 1.1 – 12.56 [UNCHANGED]

RULE 12.57 [RESERVED] CHINA 50 BINARY CONTRACTS

(a) SCOPE – These Rules shall apply to the Class of Contracts referred to as the China 50 

Binary Contracts issued by Nadex.

(b) UNDERLYING – The Underlying for this Class of Contracts is the SGX® FTSE®

Xinhua® China A50 Index Futures1contracts (“CHFC”) traded on the Singapore Exchange (SGX). 

The CHFC prices that will be used to calculate the Underlying will be taken from twelve (12) 

CHFC futures months: January, February, March, April, May, June, July, August, September, 

October, November, December (each a “CHFC Delivery Month”). The date on which a new 

delivery month will be used as the Underlying for Nadex contracts (i.e. “Start Date”) is one 

calendar day after the End Date for the previous delivery month contract. The last day on which 

a delivery month will be used as the Underlying for Nadex contracts (i.e. “End Date”) is the third 

Business Day prior to the last trading day of the Underlying futures contracts Expiration Date. For 

example, the SGX FTSE Xinhua China A50 Index March 2015 Futures has an Expiration Date of 

March 30, 2015. The last day on which the China A50 Index March 2015 Futures prices will be 

used as the Underlying for Nadex contracts and to calculate the Expiration Value on the Expiration 

Date for the relevant China 50 Contracts will be the third Business Day prior to the China A50 

Index Futures’ Expiration Date (i.e. March 30, 2015). Therefore, the End Date for using the China 

A50 Index March 2015 Futures will be March 25, 2015, and the Start Date for the next delivery 

month, China A50 Index April 2015 Futures, will be March 26, 2015.2

1 SGX® is a registered service mark of the Singapore Exchange Limited (“SGX”). All rights in the Trademarks and Futures 

Trading Data of SGX vest in Singapore Exchange Limited (“SGX”). The Nadex China 50 Binary Contract is not sponsored, 

endorsed, sold or promoted by SGX. SGX makes no representation or warranty, express or implied to the investors in the China 

50 Binary Contract or any member of the public in any manner whatsoever regarding the advisability of investing in any financial 

product generally or in particularly the China 50 Binary Contract. The relationship of SGX towards Nadex is in respect of 

licensing the use of the SGX FTSE Xinhua China A50 Index Futures Trading Data. SGX has no obligation to take the needs of 

the investors of the China 50 Binary Contract into consideration in determining, composing or calculating the SGX FTSE Xinhua 

China A50 Index Futures Trading Data. SGX is neither responsible for nor has participated in the structure of the China 50 

Binary Contract. SGX has no obligation or liability in connection with the administration, marketing or trading of the China 50 

Binary Contract. FTSE® is a trade mark jointly owned by the London Stock Exchange plc and the Financial Times Limited. 

Xinhua® is a registered mark of Xinhua Financial Limited.

2 Weekly contracts listed on a Monday during a week containing an underlying futures rollover date will be listed using the 

underlying futures month scheduled to be used to determine the settlement value on the day the contract expires. For example, the 

last trading date for the SGX FTSE Xinhua China A50 Index Futures March 2015 contract is March 30, 2015. The last trading 

date the Nadex China 50 Binary Contract would be based on the underlying April 2015 contract month would be March 25, 

2015, and the underlying futures month would roll to April 2015 for trade date March 26, 2015. March 26, 2015 is a Thursday,

however, and any Nadex weekly contracts listed on this date and expiring on Friday, March 27, 2015, will be listed using the 

SGX FTSE Xinhua China A50 Index April 2015 Futures as its Underlying, as May is the futures month scheduled to be used to 

determine the Settlement Value of the Nadex weekly contract on its expiration date. Therefore, the first trading date for the Start 

Date for the SGX FTSE Xinhua China A50 Index Futures April 2015 futures contract will be Monday, March 23, 2015 for any 

Nadex weekly contracts listed on this date. 
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 (c) SOURCE AGENCY – The Source Agency is Nadex.

 (d) TYPE – The Type of Contract is a Binary Contract.

 (e) PAYOUT CRITERION – The Payout Criterion for each Contract will be set by Nadex 

at the time the Binary Contracts are initially issued. For the China 50 Binary Contract, the Payout 

Criteria for the Contracts will be set as follows:

(i) WEEKLY CHINA 50 BINARY CONTRACTS 

(1) EXPIRATION TIME – 2:55AM ET CLOSE3

(2) STRIKE INTERVAL WIDTH – The interval width between each strike level 

shall be 200. 

(3) NUMBER OF STRIKE LEVELS LISTED - Thirteen (13) strike levels will be 

listed for the Weekly China 50 Binary Contract Series. 

(4) STRIKE LEVELS GENERATED - Strike levels will be generated such that 

Binary Contract “W” is valued ‘at-the-money’ in relation to the Underlying 

market as determined by the Source Agency, immediately before the issuance of 

these Contracts, and shall be measured in U.S. cents rounded to the nearest value 

ending in 25 or 75 as reported by the Source Agency. Six (6) strike levels will be 

generated above Binary Contract W at an interval of 200, and six (6) strike levels 

will be generated below Binary Contract W at an interval of 200 (e.g. W – 200; 

W; W + 200). The Contract will have a Payout Criterion of greater than the strike 

level value. 

(ii) DAILY CHINA 50 BINARY CONTRACTS 

(1) EXPIRATION TIME – 2:55AM ET CLOSE4

(1) STRIKE INTERVAL WIDTH – The interval width between each strike level 

shall be 40.

(2) NUMBER OF STRIKE LEVELS LISTED - Fifteen (15) strike levels will be 

listed for the Daily China 50 Binary Contract Series. 

(3) STRIKE LEVELS GENERATED - Strike levels will be generated such that 

Binary Contract “X” is valued ‘at-the-money’ in relation to the Underlying 

market as determined by the Source Agency, immediately before the issuance of 

these Contracts, and shall be measured in U.S. cents rounded to the nearest value 

ending in 10 as reported by the Source Agency. Seven (7) strike levels will be 

generated above Binary Contract X at an interval of 40, and seven (7) strike levels 

3 During the period when the US observes daylight savings time, Weekly China 50 Binary Contracts will open and close 1 hour 

later than their regular defined times.

4 During the period when the US observes daylight savings time, Daily China 50 Binary Contracts will open and close 1 hour 

later than their regular defined times.
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will be generated below Binary Contract X at an interval of 40 (e.g. X – 40; X; X 

+ 40). The Contract will have a Payout Criterion of greater than the strike level 

value. 

 (iii) Nadex may list additional China 50 Binary Contracts with different 

ranges of Payout Criteria on a discretionary basis in accordance with the CEA and Commission 

Regulations.

 (f) MINIMUM TICK – The Minimum Tick size for the China 50 Binary Contracts shall 

be $0.25.

(g) POSITION LIMIT – The Position Limit for the China 50 Binary Contracts shall be 

2,500 Contracts per Class. 

(h) MARKET MAKER ALTERNATIVE POSITION LIMIT – The Position Limit for 

the China 50 Binary Contracts for contracted Market Makers shall be 5,000 Contracts per strike 

level.

 (i) LAST TRADING DATE – The Last Trading Date in a Series is the same date as the 

Expiration Date.

 (j) SETTLEMENT DATE – The Settlement Date in a Series is the same date as the 

Expiration Date.

 (k) EXPIRATION DATE – The Expiration Date of the Contract will be the date on 

which the China 50 Expiration Value is released by the Source Agency.

 (l) SETTLEMENT VALUE – The Settlement Value is the amount paid to the holder of 

the in-the-money Contract on the Settlement Date. The Settlement Value of an in-the-money 

China 50 Binary Contract is $100.

 (m) EXPIRATION VALUE – The Expiration Value is the price or value of China 50 

released by the Source Agency on the Expiration Date. The Expiration Value is calculated by the 

Source Agency by taking all CHFC trade prices occurring in the ten (10) seconds leading up to the 

close of trading of the China 50 Variable Contract, provided at least twenty-five (25) trade prices 

are captured during the ten (10) second period, removing the highest twenty (20) percent of CHFC 

trade prices and the lowest twenty (20) percent of CHFC trade prices from the data set5, and using 

the remaining CHFC trade prices to calculate the Expiration Value. The calculation used is a 

simple average of the remaining CHFC trade prices in the data set, rounded to one decimal point 

past the precision of the underlying market. In the event the time it takes to collect at least twentyfive (25) CHFC trade prices exceeds the ten (10) seconds just prior to the close of trading of the 

China 50 Variable Contract, the Expiration Value is calculated by the Source Agency by taking 

5

If 20% of the data set would result in a non-integer number of trade prices, the number of trade prices to be 

removed from the set will be rounded down. For example, if the number of trade prices collected during the last 10 

seconds prior to the close of trading was 31, 20% of the data set would be 6.2 trade prices. As 6.2 is a non-integer 

number, the value will be rounded down, and the 6 highest and 6 lowest trade prices will be removed from the data 

set.
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the last twenty-five (25) CHFC trade prices just prior to the close of trading of the China 50 

Variable Contract removing the highest five (5) CHFC trade prices and the lowest five (5) CHFC 

trade prices, and using the remaining fifteen (15) CHFC trade prices to calculate the Expiration 

Value. The calculation used is a simple average of all fifteen (15) CHFC trade prices, rounded to 

one decimal point past the precision of the underlying market. 

 (n) CONTINGENCIES – If no daily settlement price of the relevant CHFC is 

announced by the Source Agency, the Settlement Date will be delayed until such settlement price 

for that Series is released and publicly available.

RULES 12.58 – 12.65 [UNCHANGED]

End of Rulebook.

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