ICE Endex Derivatives

June 2016 1

EXHIBIT G – THE RULES OF THE FOREIGN BOARD OF TRADE AND 

ENFORCEMENT THEREOF

Exhibit G-1

A description of the foreign board of trade’s regulatory or compliance department, 

including its size, experience level, competencies, duties and responsibilities.

The structure, roles and responsibilities of the market conduct activities of the Exchange is 

defined in the Market Surveillance Policy, which can be found in Annex-G-1.

The following departments perform activities under the compliance framework on a daily

basis:

 Commercial department – (Member Accession only);

 Market Supervision department (jointly with ICE Futures Europe Limited “IFEU”);

 Compliance Officer.

The following committees within the Exchange perform activities under the compliance 

framework:

 Market Surveillance Committee (bi-weekly or ad hoc); and

 Market Conduct Committee (weekly or ad hoc).

Division of roles and responsibilities

Member Accession

The Commercial department is responsible for the collection and administration of all 

documents required for member accession. A prospect is only eligible to become a member 

after successfully completing the member accession procedure; which requires formal 

information, such as evidence of authorized signatures, a recent extract of the chamber of 

commerce, relevant powers of authority, annual reports, and other documents that provide 

evidence of the resilience of the company, the trustworthiness of its representation and 

fiduciary owners, the legitimacy of the applicant to trade and its level of experience in trading 

energy markets. The member accession documents are checked and signed-off by a Know 

Your Customer specialist, Legal Counsel and the Compliance Officer. If positive sign-off is 

provided, the Membership Agreement will be signed by the Exchange’s Management Board.

The Commercial Department has 1 FTE available for performing these activities. However, 

on a day-to-day basis, the work requires between 0.2 and 0.4 FTE, depending on the number 

of applicants and work related to the administration and processing thereof.

Market Supervision

The Exchange’s Market Supervision department is responsible for supervision of trading on 

the Exchange. The head of this department is responsible for the well-functioning of internal 

processes that are designed to detect and review incidents and decide on the appropriate 

follow-up. The Exchange’s Market Supervision department daily tasks are outsourced to the 

Market Supervision team of IFEU; this team performs all the daily tasks connected to the

supervision of the Exchange’s markets; however the Exchange’s Market Supervision bears 

final responsibility for the tasks that have been outsourced and closely monitors the 

performance of the Market Supervision team of IFEU. These specific arrangements have 

been laid down in a contractual framework and have been approved by AFM. 
ICE Endex Derivatives

June 2016 2

20 FTE of Market Supervision of IFEU have been trained to perform the day-to-day tasks of 

the Exchange’s Market Supervision. 5 FTE of Market Supervision of the Exchange are 

performing the T+1 tasks and monitor and take final responsibility for execution of the dayto-day operational processes. 

The Head of Market Supervision of IFEU has18+ years of experience in exchange regulated 

business; the Head of Market Supervision of the Exchange has 15+ year experience in the 

operation and supervision of energy markets. 

The Exchange’s Market Supervision cooperates closely with IFEU in performing market 

oversight activities. Under this cooperation, the Exchange is able to use the wide experience 

of IFEU to apply analytical tools to its market oversight. This results in a standard suite of 

reports that, taking into account the Exchange’s rules and regulation, will flag unusual trading 

behaviour. Exhibit G-4(1) up to and including G-4(11) explains in further detail the systems 

which allow the Exchange’s Market Supervision to actively monitor the markets and 

intervene if required. When market conduct issues occur, Market Supervision of the 

Exchange will assess whether immediate action is required or further investigation is needed. 

In addition to the daily monitoring performed by Market Supervision of IFEU, the Market 

Supervision Department of the Exchange performs post market monitoring during the T+1 

phase as explained in the Market Surveillance Policy (Annex G-1). The analysis of the 

reports mentioned above is performed by the Market Conduct Committee which reports its 

findings to the Market Surveillance Committee.

The standard suite of reports mentioned above includes alerts on the following practices:

 Cross/Wash trades

Report on screen trades made by the same Member which is prohibited under the 

Rules;

 Late Alleged Blocks

Report on late block submission; if time between submission and confirmation is over 

30 minutes it will be reported upon in the Alleged Blocks report

 Market on Close

Report on market activity during the settlement window for each product, specific 

attention is paid to e.g. traded volume per Member and 

 Non-internal busts

Reports on busted/adjusted block trades after confirmation

 Reverse Trades

Report on cancelled block trades, EFPs, EFSs, after these were submitted and 

confirmed, such cancelled trade should be followed by an equal and opposite trade. If 

there is no new trade and no good reason for reversal further investigation is required

The Exchange will follow-up on incidents reported during the real-time monitoring and 

incidents that result from the standard suite of reports. In addition, each Member or 

participant complaint will be logged and reviewed as part of the monitoring process. 

Follow-up investigation is performed by dedicated employees of the Exchange’s Market 

Supervision Department and dealt with on a case-by-case basis. On average 1-3 FTE is 

available to perform these activities, whereby the number of resources allocated varies, taking 

into account the number and complexity of incidents under investigation.
ICE Endex Derivatives

June 2016 3

Compliance Officer

The Compliance Officer of the Exchange is responsible for the coordination and follow-up of 

incidents related to the compliance framework (member accession, market supervision and 

market oversight). 

The compliance officer has over five years of experience in regulated exchange traded energy 

markets. 

Market Conduct Committee

The Market Conduct Committee is a body that meets on a weekly basis and consists of the 

following staff:

o Head of Market Supervision

o Senior Market Analyst

o Ad hoc experts per request of the Market Conduct Committee

The main objective of the validation process is to assess whether specific market behaviour is 

considered to be irregular, i.e. deviates from the general market behaviour or deviates from 

the normal trading behaviour of a Member. In particular, transaction prices will be compared 

with bids and offers on the trading screen, the most recent end of day settlement prices with 

regards to futures, and the day-ahead index for spot. In other words, The Market Conduct 

Committee examines transactions based on signals that may indicate irregular behaviour. 

When performing these tasks, the Committee will assess all relevant aspects of the Market 

Abuse Grid, which is detailed in Annex III of the Market Surveillance Policy (Annex G-1)

The Market Conduct Committee will decide to either dismiss an incident (only if this is a 

false positive) or request further investigation and complete its assessment.

Market Surveillance Committee

The Market Surveillance Committee reviews market conduct incidents and decides on further 

investigation and potential escalation to the competent regulator. The Market Surveillance 

Committee convenes on a bi-weekly basis or ad hoc if required. The Market Surveillance 

Committee is chaired by the Head of Market Supervision of the Exchange and further 

consists of the designated Compliance Officer, Legal Counsel and the President.

Ad hoc Market Surveillance Committees can be called for by the Head of Market Supervision

of the Exchange.

Scope of oversight

In the European energy markets, only a relatively small portion of gas and electricity 

transactions is exchange traded. However, the landscape has been changing. The percentage 

of the market share that is exchange traded has been growing rapidly over the last years. For 

example, in 2012 around 94% of the traded volume in Dutch TTF Natural Gas was executed 

off-exchange and uncleared via brokers or bilateral contracts, in 2015 only 76% was traded 

off-exchange and uncleared via brokers or bilateral contracts. Despite the increasing share of 

cleared trading, the Exchange does not have a complete overview of trading on specific 

markets. As a result and also because its investigate powers are limited it has specific 

arrangements with the main regulators to report incidents in case there is a reasonable 

suspicion that unlawful conduct has occurred.

The compliance activities of the Exchange mainly focus on trading and transactions executed 

via its platform. 
ICE Endex Derivatives

June 2016 4

Exhibit G-2

A description of the foreign board of trade’s trade practice rules, including but not 

limited to rules that address the following –

(1) Capacity of the foreign board of trade to detect, investigate, and sanction persons 

who violate foreign board of trade rules.

The Rules provide for investigatory and disciplinary procedures. The applicable Rules are 

provided below. The Exchange may investigate Member’s behaviour under the Rules and 

investigate and sanction accordingly. 

Investigatory rights

I-8.1 ICE Endex may, without prejudice to any of the other powers conferred upon it, 

perform the following activities:

(a) verify, if necessary through an investigation, the Member's compliance with these 

Rules;

(b) monitor the functioning of the ICE Endex Platform;

(c) investigate Trades and Orders; and/or

(d) withhold or delete an Order, which - in the view of ICE Endex - could jeopardize 

the fair and orderly trade on the markets maintained by ICE Endex.

I-8.2 A Member, its Member Representative or its Responsible Individual is obliged to cooperate with any investigation as mentioned in article I-8.1 and is required to provide 

ICE Endex, upon first request, access to its premises, books, records and other 

relevant information as ICE Endex deems necessary and appropriate. In exercising 

these rights, ICE Endex may make use of independent third-party experts.

I-8.3 Subject to a reasonable notice period, ICE Endex will inform the Member in writing 

of an investigation as referred to in the previous paragraphs, stating the reason(s) for 

the investigation. The Member may request the presence of a designated 

representative while the investigation is being conducted.

Disciplinary sanctions, including suspension and termination of Membership can be the result 

of an investigation:

I-9 If ICE Endex has determined that a Member violates a provision of these Rules, or 

acts in a manner that is potentially detrimental to the interests of ICE Endex or to the 

interests of another Member, ICE Endex may, at any time, without prejudice to the 

other powers conferred upon it, take one or more of the following measures against 

the Member:

(a) deliver a warning;

(b) suspend the Member;

(c) impose a fine up to a maximum of € 250,000 (two hundred fifty thousand euro) 

per offence;

(d) terminate the Membership Agreement.

I-9.2. ICE Endex has the right to publish such measures including the name of the Member.
ICE Endex Derivatives

June 2016 5

I-10 Suspension of a Member

I-10.1 In the following events, ICE Endex may suspend a Member for a maximum period of 

six (6) months:

(a) if any circumstance or fact arises, which, had it arisen before the granting of 

admission as a Member, would have resulted in the Application being rejected;

(b) if it has established that the Member has failed to comply with any provision of these 

Rules, or any provision of any other rule in force;

(c) if the Member is a Clearing Counterparty: upon receipt of a copy of a default notice, 

issued by the Clearing House;

(d) if the Member is not a Clearing Counterparty: upon receipt of a copy of a default 

notice, issued by the Clearing House to the Clearing Counterparty with whom the 

Member (or the relevant General Participant) has entered into clearing arrangements 

with pursuant to article I-4.5;

(e) if the Clearing House demands ICE Endex to suspend the Member; and/or

(f) if a relevant Competent Authority demands ICE Endex to suspend the Member.

I-10.2 ICE Endex will inform the Member in writing about the reason(s) for its suspension. 

A Member has no access to ICE Endex's Services while suspended.

I-10.3 ICE Endex shall immediately cease to process and submit any transaction data to the 

Clearing House if a Member is suspended.

I-10.4 The Member has the right to challenge ICE Endex's decision to suspend him before 

the London Court of International Arbitration (“LCIA”) in accordance with these 

Rules. The procedure before the LCIA shall not stay (opschorten) the suspension.

I-10.5 The suspension will remain in force until ICE Endex has terminated the suspension. 

ICE Endex may terminate the suspension if:

(a) the decision to suspend the Member is reversed by the LCIA;

(b) the Clearing House has notified ICE Endex that it has revoked its request to 

suspend the Member;

(c) the relevant Competent Authority has notified ICE Endex that it has revoked its 

request to suspend the Member;

(d) the cause for the suspension has been remedied by the Member;

(e) ICE Endex has other reasons to terminate the suspension.

I-10.6 ICE Endex may inform the other Members and the Clearing House of the suspension. 

ICE Endex may publish a decision to suspend a Member on the ICE Endex Website.

I-10.7 A suspension will not relieve the Member from any of its obligations under the 

Membership Agreement and these Rules, unless ICE Endex decides otherwise. More 

particularly, a suspension will not relieve the suspended Member from its monetary 

obligations vis-à-vis ICE Endex.

I-10.8 ICE Endex may, in its sole discretion, decide to extend a suspension with six (6) 

weeks after six (6) months have lapsed without the cause for suspension having been 

remedied, if ICE Endex has reason to believe that the cause for suspension will be 

remedied in those six (6) weeks. ICE Endex will notify the Member of such an 

extension in writing.
ICE Endex Derivatives

June 2016 6

I-11 Termination of the Membership

I.11 Without prejudice to the rights conferred on ICE Endex and the Member in article I11.2 and I-11.3, both ICE Endex and the Member may terminate the Membership 

Agreement upon one (1) month written notice.

I-11.2 Should a Member not be willing to continue the Membership Agreement as a result of 

ICE Endex having amended these Rules materially and adversely to the interests of 

the Member, then the Member may terminate the Membership Agreement effective 

from the date the amended Rules come into force. Such termination should be made 

in writing within fourteen (14) days after ICE Endex has informed the Member about 

the amended Rules and should be sent to the address of ICE Endex's Registered 

Office.

I-11.3 ICE Endex is entitled to terminate the Membership Agreement with immediate effect, 

if:

(a) the Member has ceased to satisfy the requirements for being a Member;

(b) a Member has been suspended pursuant to article I-10 of these Rules and six (6) 

months have elapsed without the Member having remedied the cause for its 

suspension and without ICE Endex having extended the suspension;

(c) a Member acts against or fails to act in accordance with these Rules, or if a 

Member acts against or fails to act in accordance with any regulatory rule in force;

(d) a Member is passing a resolution for its dissolution or a court of competent 

jurisdiction makes an order for the Member's dissolution;

(e) a receiver is appointed over or a creditor has taken possession of or is selling a 

substantial part of the Member's assets;

(f) a Member has made an arrangement or composition with its creditors or if a 

Member has made an application to a court of competent jurisdiction for 

protection of its assets from its creditors; or

(g) ICE Endex cannot reasonably be expected to continue the admission of the 

Member.

I-11.4 The Member has the right to challenge ICE Endex's decision to terminate the 

Membership Agreement before the LCIA in accordance with these Rules. The 

procedure before the LCIA shall not stay (opschorten) the execution of the 

termination.

I-11.5 ICE Endex shall inform the other Members of the termination of the Membership 

Agreement and may publish its decision to terminate the Membership Agreement on 

the ICE Endex Website.

The full version of the Exchange Rules can be found under Annex A-6(1).

(2) Prohibition of fraud and abuse, as well as abusive trading practices including, but 

not limited to, wash sales and trading ahead, and other market abuses.

Members are at all times required to comply with the Rules. Disciplinary proceedings can be 

started by the Exchange in respect of any breach by a Member. The Exchange has Rules 

which govern the trading practices of Members. We do not seek to set out in this section an 
ICE Endex Derivatives

June 2016 7

exhaustive list of all such rules in great detail, however, the following Rules would (among 

others) prohibit Members from market abuse:

(a) Each Member must behave honestly when trading on the Exchange, thereby 

enhancing the confidence in the functioning of the markets maintained by the 

Exchange, with due observation of the interests of all other Members, even if this 

might entail, in particular instances, relinquishing certain immediate financial 

advantages (clause I-16.1);

(b) In order to maintain confidence in the integrity of the markets maintained by ICE 

Endex, each Member must trade in a fair and orderly manner and observe professional 

ethics at all times. In particular, a Member must refuse to assist any person or legal 

entity attempting to deviate from the principles of honest market behaviour and may 

not lend itself to actions as a result of which normal market operation might be 

suspended or impeded (cause I-16.2)

(c) No Member shall in relation to Trades entered into, or orders placed,

i. Commit any act of fraud or bad faith ((clause I-16.7);

ii. Manipulate or attempt to manipulate the Market, (clause I-16.3);

(d) Members whose behaviour amounts to market abuse as under the AFM Guidance on 

Market Manipulation) attached as Annex G-2(1) is in breach of the Rules (clause I16.10).

(3) A trade surveillance system appropriate to the foreign board of trade and capable 

of detecting and investigating potential trade practice violations.

Real-time market surveillance is carried out by the Market Supervision Department which 

ensures the orderliness of the market throughout the day using various surveillance tools as 

described in Exhibit D and Exhibit G-4.

(4) An audit trail that captures and retains sufficient order and trade-related data to 

allow the compliance staff to detect trading and market abuses and to reconstruct all 

transactions within a reasonable period of time. 

All messages, including all order and trade data, market participants send to the ICE Platform 

are saved in the ICECap Database. 

Exhibit G-4(1) up to and including G-4(11) describes different tools that can be used to make

detailed analysis of all available data.

(5) Appropriate resources to conduct real-time supervision of trading.

Real-time supervision of trading is undertaken by the Market Supervision ICE Futures 

Europe department on behalf of the Exchange. The resources allocated are defined in the 

Market Surveillance Policy which can be found under Annex G-1.

(6) Sufficient compliance staff and resources, including those outsourced or delegated 

to third parties, to fulfil regulatory responsibilities.

Details on the arrangements in relation to the performance to perform the compliance 

activities on a daily basis are provided in Exhibit G-1 and Annex G-1. 
ICE Endex Derivatives

June 2016 8

(7) Rules that authorize compliance staff to obtain, from market participants, 

information and cooperation necessary to conduct effective rule enforcement and 

investigations. 

Details of what compliance staff are authorized to do under the Rules when conducting 

investigations in relation to breaches of Rules is detailed in Exhibit G-2(8) below.

(8) Staff investigations and investigation reports demonstrating that the compliance 

staff investigates suspected rule violations and prepares reports of their finding and 

recommendations.

Inspections, Enquiries and Investigations

Should a suspected incident be observed, inspections and enquiries may be carried out by the 

Exchange under Article I.8. Members are required to co-operate fully with all (routine)

inspections and enquiries (article I-8.2).

If the Head of the Market Supervision or the Market Conduct Committee suspects that there 

is evidence of a (potential) market conduct incident, it will have the incident assessed by the 

Market Surveillance Committee. 

The Market Surveillance Committee decides whether further investigation of an incident is 

required or whether an incident can be dismissed. Incidents that relate to (potential) market 

abuse will be referred to the AFM. Based on its internal regulations, the Management Board 

is obliged to inform the audit committee (part of the supervisory board) of any (suspected) 

incidents and can request the audit committee for advice in these matters.

(9) Rules determining access requirements with respect to the persons that may trade 

on the foreign board of trade, and the means by which they connect to it.

I-4 Membership requirements

I-4.1 ICE Endex recognizes two different categories of Members:

(a) General Participant: permitted to transact own business and business for clients 

(whether such clients are other Members or non-Members);

(b) Trade Participant: permitted to transact own business only.

"Own business" means business for its own account or for the account of a subsidiary 

(which shall have the meaning as stipulated in art. 2:24A of the Dutch Civil Code) or 

holding company of the relevant Member.

Any person seeking access to the Block Trade Facility as an ICE Endex Block Broker 

must elect and apply for the General Participant category of membership.

I-4.2 The following parties may be admitted as a Member:

investment firms within the meaning of article 1:1 AFS who hold a licence pursuant 

to article 2:96 AFS;

(a) financial institutions within the meaning of article 1:1 AFS who hold a licence 

pursuant to article 2:11 AFS, but only if this licence allows them to also perform 

investment services and investment activities;
ICE Endex Derivatives

June 2016 9

(b) investment firms and financial institutions who have their statutory seat in a state 

that belongs to the European Economic Zone and who hold the equivalent of a 

licence mentioned under a or b respectively from the equivalent regulatory 

Competent Authority of their home country, provided that the financial institution 

in question is duly notified to the Dutch Central Bank or in case of an invest firm 

that such investment firm is duly notified to the AFM, pursuant to section 2:98 of 

the AFS;

(c) investment firms and financial institutions that are exempted from having a 

license to perform investment services and investment activities pursuant to article 

10 of the Exemption Regulation AFS;

(d) other legal entities who – to the satisfaction of ICE Endex – have proved to be 

professionally active in trading power, natural gas, biomass and/or (financial) 

products related thereto.

I-4.3 An applicant for access to trading on the ICE Endex Platform as a Member must, at 

the time of its application and at all times thereafter:

(a) be able to demonstrate, to the satisfaction of ICE Endex, that the applicant is fit 

and proper to be a Member;

(b) be able to demonstrate, to the satisfaction of ICE Endex, that the applicant has 

sufficient systems and controls in place to ensure that all the Member 

Representatives who may act on its behalf or in its name in the conduct of 

business on the ICE Endex Platform are fit and proper, suitable, adequately 

trained and properly supervised to perform such functions;

(c) maintain a properly established office (in a location which is acceptable to ICE 

Endex as they may determine in their absolute discretion) for the conduct of its 

business on the ICE Endex Platform;

(d) satisfy the minimum financial standing requirements for the time being stipulated 

by ICE Endex in relation to the relevant category of membership, supporting its 

claim to do so by copies of its last three years of audited accounts (or in the case 

of an ICE Endex Block Broker, a copy of its last audited accounts) and by a copy 

of its latest audited accounts from time to time as they become available, or such 

other evidence as ICE Endex may require;

(e) be party to an electronic user agreement, which is in full force and effect, in the 

form prescribed by ICE Endex from time to time for use by the Member of the 

ICE Endex Platform at the address(es) notified to ICE Endex;

(f) be able to access the ICE Endex Platform via a front end application which meets 

any conformance criteria determined by ICE Endex from time to time;

(g) have appropriate clearing arrangements in place to the satisfaction of ICE Endex 

and in accordance with article I-4.4;

(h) hold all necessary licences, authorisations and consents, or benefit from available 

exemptions, so as to allow it to carry on business as a Member on the ICE Endex 

Platform in accordance with all applicable laws and regulations; and

(i) arrangements in place to ensure that its physical deliveries or the physical 

deliveries of its Clearing Member, resulting from Open Positions, can be settled 

or physically delivered.

I-4.4 A General Participant and Trade Participant are eligible to be clearing members for 

the purposes of these Rules in relation to the ICE Endex Platform, on the basis set out 

below:
ICE Endex Derivatives

June 2016 10

(a) Trade Participants may elect to be Clearing Counterparties for the purpose of 

clearing own business (subject to them also being a Clearing Member or 

Sponsored Principal of the Clearing House) or non-Clearing Members, in which 

case they must have in place a clearing agreement with a General Participant that 

is a Clearing Member or be a party to or satisfy ICE Endex that it will become a 

party to a clearing agreement with a General Participant in respect of all types of 

Product covered by its trading and/or clearing permissions or privileges.

(b) General Participant (other than those General Participants who are ICE Endex 

Block Brokers) may elect to be Clearing Counterparties for the purpose of 

clearing own business and/or client business (subject to them also being a 

Clearing Member or Sponsored Principal of the Clearing House) or non-Clearing 

Members, in which case they must have in place a clearing agreement with 

another General Participant in respect of all types of Product covered by its 

trading and/or clearing permissions or privileges.

I-4.5 A Member shall forthwith inform ICE Endex upon becoming or ceasing to be a 

Clearing Member or Sponsored Principal of the Clearing House or any change in any 

particulars which it has notified to ICE Endex as part of its obligations under these 

Rules.

I-4.6 An applicant to be a General Participant or Trade Participant must, at the time of its 

application and at all times thereafter, be a legal entity which is a body corporate.

I-4.7 An applicant to be a General Participant or a Trade Participant must satisfy any other 

specific criteria or other requirements stipulated by ICE Endex from time to time in 

relation to the particular category of membership applicable to it, supplying such 

documents in support thereof as they may require.

The Exchange allows a Member only to enter Orders or execute Trades on the ICE Endex 

Platform through a Responsible Individual registered with the Exchange. A Member shall 

register at least one Responsible Individual. The criteria applicable to the Responsible 

Individual are defined in article I-5.3:

I-5.3 A Responsible Individual must:

(a) be adequately trained pursuant to article I-7(k) and fully conversant with these 

Rules and procedures;

(b) be assigned at least one ITM, and a valid password for each, by ICE Endex; and

(c) conduct all telephone conversations on audio logged lines.

Under article I-5.4, trading may be conducted by other individuals within the Member, at the 

discretion of the member, provided such individuals are fit and proper, suitable and 

adequately trained in accordance with the Rules. These individuals may only submit Orders 

under the ITM(s) of a Responsible Individual registered to the Member, and under his 

supervision.

In addition, under article I-5.5, trading may also be conducted by a Member’s client (order 

routing) where access to the ICE Endex Platform is granted by the Member to clients, 

provided that client orders are submitted under an ITM assigned to a Responsible Individual.
ICE Endex Derivatives

June 2016 11

Password security

User ID and password authentication are required by all ICE accounts. Additionally, an 

optional IP address restriction facility allows customers administrators to define limited 

networks from which their participants can log into the system to enforce two-factor 

authentication. Nine-character initial passwords are randomly generated and assigned by the 

ICE Helpdesk via phone. Users are prompted to change their password on initial login and 

must choose a strong password, 8-14 characters in length, and including at least 3 of the 

following attributes: lowercase, uppercase, numbers and special characters. The applicable 

ICE Security policy can be found under (D-1(3)(ii).

(10) The requirement that market participants submit to the foreign board of trade’s 

jurisdiction as a condition of access to the market.

Accession to the market is governed by the Rules. In order to act as General Participant or 

Trade Participant, a Member is required to sign the Membership Agreement and comply with 

the Rules. Such is referenced in the Membership Agreement, article 2.2 (Annex A-3(1)) and 

article I-7.1 of the Rules:

Membership Agreement

Article 2.2 of the Membership Agreement defines the following. “The Applicant agrees to act 

in accordance with this Membership Agreement and with the ICE Endex Rules and the other 

appendices thereto as amended from time to time. The Applicant declares that it is has 

extensive experience in and that it is aware of the risks involved in energy trading and must 

organise and control its affairs in a responsible manner, and to this end it must have staff who 

are fit and proper with suitable authorisations and / or qualifications and experience in order 

to complement and maintain adequate internal procedures and controls, and otherwise 

comply at all time with the membership criteria set out in the Rules from time to time”.

Article I-7.1 a, b, c and d of the Rules:

I-7.1 Without prejudice and in addition to any other specific requirement in these Rules 

regarding obligations and compliance with these Rules by a Member, the Member 

shall, on a continuous basis, be responsible for making adequate arrangements, 

systems and controls for ensuring that it:

(a) meet the membership requirements as mentioned in article I-4 of these Rules;

(b) act with due care and diligence vis-à-vis ICE Endex and the other Members and 

comply with these Rules and any other rule in force;

(c) comply with the technical requirements of the ICE Endex Platform and 

immediately notify ICE Endex of any irregularity in the ICE Endex Platform;

(d) comply with any requirement of ICE Endex with regard to the execution of a 

Trade conducted by the Member on the ICE Endex Platform;
ICE Endex Derivatives

June 2016 12

Exhibit G-3

A description of the foreign board of trade’s disciplinary rules, including but not 

limited to rules that address the following –

(1) Disciplinary authority and procedures that empower staff to recommend and 

prosecute disciplinary actions for suspected rule violations and that provide the 

authority to fine, suspend, or expel any market participant pursuant to fair and 

clear standards. 

The relevant articles are provided under Exhibit G-2(1), defining the Rules applicable to the 

suspension or termination of Members. The Exchange is to make further enquiries or 

commence an investigation where a breach is suspected. The Rules govern what actions can 

be taken when it has come to a conclusion on the events that took place. 

In the event that behaviour or practices may impact the orderly functioning of the market or 

puts Members at risk, the Exchange has powers to immediately suspend access as under 

article I-10 – described further below.

There are certain other circumstances where the Exchange has the ability to suspend the 

trading permissions of a Member and where a Membership may be terminated subject to the 

decision of the Managing Board, on the recommendation of the Market Surveillance 

Committee, which are described in more detail below.

Where a Member has failed to satisfy the Membership criteria under article I-4, fails to 

comply with the obligations as a Member under article I-7 or fails to comply with the terms 

of the Electronic User Agreement attached as Annex A-3(2), the Managing Board may

suspend its membership permissions including its permission to trade on the Market (or any 

part of it).

Upon the termination of a Membership or the suspension of its trading permissions, the 

Exchange may notify all Members and the Clearing House (Clause I-10.6 / I-11.5).

(2) The issuance of warning letters and/or summary fines for specified rule violations. 

The Exchange has the following disciplinary sanctions available for rule violations as defined 

in article I-9:

(a) Deliver a warning;

(b) Suspend the Member;

(c) Impose a fine up to a maximum of € 250.000,- (two hundred fifty thousand euro) per 

offence;

(d) Terminate the Membership Agreement.

A Member can be suspended up to six months if (article I-10):

(a) Any circumstance or fact arises, which, had it arisen before the granting of admission 

as a Member, would have resulted in the Application being rejected;

(b) It has established that the Member has failed to comply with any provision of these 

Rules, or any provision of any other rule in force;
ICE Endex Derivatives

June 2016 13

(c) The member is a Clearing Counterparty: upon receipt of a copy of a default notice, 

issued by the Clearing House;

(d) The Member is not a Clearing Counterparty: upon receipt of a copy of a default 

notice, issued by the Clearing House to the Clearing Counterparty with whom the 

Member (or the relevant General Participant) has entered into a clearing arrangement 

with pursuant to article I-4.5;

(e) The Clearing House demands ICE Endex to suspend the Member; and/or;

(f) A relevant Competent Authority demands ICE Endex to suspend the Member.

The Exchange will inform the Member in writing about the reason(s) for its suspension. A 

Member has no access to ICE Endex’s Services while suspended.

The Exchange is entitled to terminate the Membership Agreement with immediate effect, if

(article I-11.3):

(a) The Member has ceased to satisfy the requirement for being a Member;

(b) A Member has been suspended pursuant to article I-10 of these Rules and six (6) 

months have elapsed without the Member having remedied the cause for its 

suspension and without the Exchange having extended the suspension;

(c) A member acts against or fails to act in accordance with these Rules, or if a Member 

acts against or fails to act in accordance with any regulatory rule in force;

(d) A Member is passing a resolution for its dissolution or a court of competent 

jurisdiction makes an order for the Member’s dissolution;

(e) A receiver is appointed over or a creditor has taken possession of or is selling a 

substantial part of the Member’s assets;

(f) A Member has made an arrangement or composition with its creditors or if a Member 

has made an application to a court of competent jurisdiction for protection of its assets 

from its creditors; or,

(g) The Exchange cannot reasonably be expected to continue the admission of the 

Member.

The Exchange shall inform other Members of the termination of the Membership Agreement 

and may publish its decision to terminate the Membership Agreement on the website (article 

I-11.5).

(3) The review of investigation reports by a disciplinary panel or other authority for 

issuance of charges or instructions to investigate further, or findings that an insufficient 

basis exists to issue charges. 

The Exchange organises a bi-weekly Market Surveillance Committee which functions as the 

body that is responsible for the issuance of charges or instructions to investigate an incident 

further. 

Among others, the Market Surveillance Committee takes into account:

- Trading patterns of the market and specific Member in relation to an incident;

- Current market circumstances;

- The background and profile of the Member (e.g. an utility, industrial end-user or 

financial institution);

- Counterparties;

- Volume and price development;

- Frequency of trading,

- Time between Order submission and execution of a Trade;
ICE Endex Derivatives

June 2016 14

(4) Disciplinary committees of the foreign board of trade that take disciplinary action 

via formal disciplinary processes.

In case of a breach of the Rules, the Market Surveillance Committee will ultimately decide on 

the disciplinary action. If there is evidence that an incident could be a potential market abuse 

case, the incident is referred to the AFM for further investigation. The AFM will decide 

independently whether such incident requires further investigation, dismiss the incident, or 

sanction the party and or parties engaged in the market abuse.
ICE Endex Derivatives

June 2016 15

(5) Whether and how the foreign board of trade articulates its rationale for disciplinary 

decisions.

The Exchange may publish decisions to the Market on the website.

(6) The sanctions for particular violations and a discussion of the adequacy of sanctions 

with respect to the violations committed and their effectiveness as a deterrent to future 

violations.

Sanctions are an effective measure for the Exchange to maintain fair and orderly markets. 

The sanction regime forms part of the wider measures and procedures the Exchange has in 

place to monitor the fair and orderly trading on its markets, whereby active and real-time 

monitoring of the markets forms the first line of defence. Real-time market monitoring 

ensures that Members that their behaviour is being monitored and that the Exchange will 

undertake action when required.

In general deterrence of market manipulation is achieved by the combination of the 

provisions in the Rules, the enforcement by the Exchange and the oversight and enforcement 

by the AFM. 
ICE Endex Derivatives

June 2016 16

Exhibit G-4

A description of the market surveillance program (and any related rules), addressing 

the following –

The dedicated market surveillance department or the delegation or outsourcing of that 

function, including a general description of the staff; the data collected on traders’ 

market activity; data collected to determine whether prices are responding to supply 

and demand; data on the size and ownership of deliverable supplies; a description of the 

manner in which the foreign board of trade detects and deters market manipulation; 

for cash-settled contracts, methods of monitoring the settlement price or value; and any 

foreign board of trade position limit, position management, large trader or other 

position reporting system.

Confidential