FTSEF LLC 

RULEBOOK 

LAST REVISED: 

APRIL 1, 2016 

BY ACCESSING, OR ENTERING INTO ANY ORDER INTO, FTSEF LLC WHETHER 

DIRECTLY OR THROUGH AN INTERMEDIARY, AND WITHOUT ANY NEED FOR 

ANY FURTHER ACTION, UNDERTAKING OR AGREEMENT, EACH 

PARTICIPANT, ITS CLIENTS, AND CUSTOMERS, IF APPLICABLE, EACH 

REPRESENT THAT IT IS AN ELIGIBLE CONTRACT PARTICIPANT AS DEFINED 

IN SECTION 1A(18) OF THE COMMODITY EXCHANGE ACT AND SUCH PERSONS, 

AND THEIR AUTHORIZED TRADERS, AGREE: 

 (1) TO BE BOUND BY, AND COMPLY WITH, THE SEF RULES AND 

OBLIGATIONS, AND APPLICABLE LAW, IN EACH CASE TO THE 

EXTENT APPLICABLE TO IT; 

 (2) TO BECOME SUBJECT TO THE JURISDICTION OF THE SEF WITH 

RESPECT TO ANY AND ALL MATTERS ARISING FROM, RELATED 

TO, OR IN CONNECTION WITH, THE STATUS, ACTIONS OR 

OMISSIONS OF SUCH PERSON; 

 (3) TO PERMIT THE SEF TO ACCESS ANY AND ALL INFORMATION 

RELEVANT TO ACTIVITIES RELATED TO THE SEF’S BUSINESS; 

 (4) TO ASSIST THE SEF IN COMPLYING WITH ITS LEGAL AND 

REGULATORY OBLIGATIONS, COOPERATE WITH THE SEF AND 

THE CFTC IN ANY INQUIRY, INVESTIGATION, AUDIT, 

EXAMINATION OR PROCEEDING; AND 

 (5) THAT THE SEF IS AUTHORIZED TO PROVIDE INFORMATION 

REGARDING PARTICIPANT TO THE CFTC OR ANY SELFREGULATORY ORGANIZATION. 
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TABLE OF CONTENTS 

Page 

CHAPTER 1 MEANING OF TERMS ........................................................................................1

Rule 101. Definitions................................................................................................................1

Rule 102. Rules of Construction ..............................................................................................8

CHAPTER 2 GOVERNANCE .....................................................................................................9

Rule 201. Governance ..............................................................................................................9

Rule 202. Board ........................................................................................................................9

Rule 203. Officers ....................................................................................................................9

Rule 204. Disqualification of Board and Committee Members .............................................10

Rule 205. Chief Compliance Officer Qualifications and Duties ............................................11

Rule 206. Committees ............................................................................................................12

Rule 207. Regulatory Oversight Committee ..........................................................................13

Rule 208. Additional Committees and Panels ........................................................................14

Rule 209. Emergency Rules ...................................................................................................14

Rule 210. Conflicts of Interest................................................................................................16

Rule 211. Services Agreements ..............................................................................................18

CHAPTER 3 PARTICIPANTS ..................................................................................................19

Rule 301. Eligibility Criteria for Becoming a Participant ......................................................19

Rule 302. Application Procedures; Termination of Participant .............................................20

Rule 303. Trading Privileges of a Participant ........................................................................22

Rule 304. Trading Access .......................................................................................................22

Rule 305. Fees and Assessments ............................................................................................22

Rule 306. Participant Representatives ....................................................................................22

Rule 307. Identification of Authorized Traders .....................................................................23

Rule 308. Recording of Communications ..............................................................................23

Rule 309. Notices to Participants ...........................................................................................23

Rule 310. Communications Between the SEF and Participants .............................................24

Rule 311. Application of the SEF Rules ................................................................................24

Rule 312. Description of Participant’s Status .........................................................................25

Rule 313. Death or Dissolution of a Participant .....................................................................25

Rule 314. Withdrawal of a Participant ...................................................................................25
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Rule 315. Compliance With the Commodity Exchange Act ..................................................25

Rule 316. Access ....................................................................................................................26

CHAPTER 4 RECORDKEEPING AND REPORTING .........................................................28

Rule 401. Real-Time Public Reporting ..................................................................................28

Rule 402. regulatory reporting ...............................................................................................29

Rule 403. Maintenance of Books and Records by the SEF ....................................................32

Rule 404. Trade Confirmations ..............................................................................................33

Rule 405. Audit Trail Program ...............................................................................................35

Rule 406. Monitoring of Trading ...........................................................................................36

Rule 407. Use of Participant Proprietary Data .......................................................................36

Rule 408. Timely Publication of Trading Information ...........................................................37

Rule 409. Errors and Omissions .............................................................................................37

CHAPTER 5 PARTICIPANT OBLIGATIONS .......................................................................39

Rule 501. Duties and Responsibilities of Participants............................................................39

Rule 502. Required Notices ....................................................................................................40

Rule 503. Inspections by the SEF...........................................................................................41

Rule 504. Minimum Requirements for Participants ...............................................................41

Rule 505. Participant Books and Records ..............................................................................42

Rule 506. Confidentiality of Financial and Other Information ..............................................42

Rule 507. Authority to Report ................................................................................................42

Rule 508. Brokers and Account Managers .............................................................................43

Rule 509. Treatment of Customer Funds and Securities ........................................................43

Rule 510. Disclosure Requirements; Know Your Counterparty Requirements .....................43

Rule 511. Information Regarding Orders ...............................................................................43

Rule 512. Customer Type Indicator (CTI) Codes ..................................................................44

CHAPTER 6 TRANSACTIONS SUPPORTED .......................................................................45

Rule 601. General ...................................................................................................................45

Rule 602. Block Trades ..........................................................................................................45

CHAPTER 7 EXECUTION METHODS ..................................................................................48

Rule 701. General ...................................................................................................................48

Rule 702. Central Limit Order Book (“CLOB”) ....................................................................48

Rule 703. Request for Quote Trading System (“RFQ Trading System”) ..............................48

Rule 704. Legal Certainty for SEF Trades. ............................................................................49
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CHAPTER 8 MANDATORY CLEARING...............................................................................50

Rule 801. General ...................................................................................................................50

Rule 802. Acceptance and Rejection for Clearing .................................................................51

Rule 803. Clearing House Rules ............................................................................................51

Rule 804. Substitution and Novation......................................................................................51

CHAPTER 9 TRADING PRACTICES AND BUSINESS CONDUCT ..................................53

Rule 901. Scope ......................................................................................................................53

Rule 902. Procedures ..............................................................................................................53

Rule 903. Business Days and Trading Hours .........................................................................53

Rule 904. Rule Violations ......................................................................................................53

Rule 905. Fraudulent Acts ......................................................................................................54

Rule 906. Fictitious, Wash or Non-Competitive Transactions Prohibited .............................54

Rule 907. Market Disruption and Market Manipulation Prohibited ......................................54

Rule 908. Market Disruption Prohibited ................................................................................55

Rule 909. Prohibition of Misstatements .................................................................................56

Rule 910. Acts Detrimental to Welfare of the SEF Prohibited ..............................................56

Rule 911. Adherence to Law ..................................................................................................56

Rule 912. Supervision ............................................................................................................56

Rule 913. Misuse of the Trading System ...............................................................................56

Rule 914. Withholding Orders Prohibited ..............................................................................57

Rule 915. Priority of Customers’ Orders ................................................................................57

Rule 916. Handling of Customer Orders ................................................................................57

Rule 917. Disclosing Orders Prohibited .................................................................................57

Rule 918. 15 Second Rule ......................................................................................................57

Rule 919. Pre-Arranged and Noncompetitive Trades Prohibited ...........................................58

Rule 920. Responsibility for Customer Orders ......................................................................58

Rule 921. Discretionary Orders ..............................................................................................58

Rule 922. Position Limits .......................................................................................................59

Rule 923. Trading System Access Restrictions ......................................................................59

Rule 924. Pre-Execution Credit Checks .................................................................................59

Rule 925. Risk Controls for Trading ......................................................................................59

Rule 926. Limitation of Liability ............................................................................................60
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CHAPTER 10 DISCIPLINARY RULES ..................................................................................62

Rule 1001. General ...................................................................................................................62

Rule 1002. Investigations and Investigation Reports ...............................................................64

Rule 1003. Disciplinary Panels ................................................................................................65

Rule 1004. Review of Investigatory Report .............................................................................66

Rule 1005. Notice of Charges ..................................................................................................66

Rule 1006. Answer to Notice of Charges .................................................................................67

Rule 1007. Settlements .............................................................................................................68

Rule 1008. Respondent Review of Evidence ...........................................................................69

Rule 1009. Hearings .................................................................................................................69

Rule 1010. Decision of Hearing Panel .....................................................................................71

Rule 1011. Sanctions ................................................................................................................72

Rule 1012. No Right to Appeal ................................................................................................73

Rule 1013. Summary Fines for Violations of the SEF Rules Regarding Timely 

Submission of Records ..........................................................................................73

Rule 1014. Emergency Summary Suspensions and Other Summary Actions .........................73

Rule 1015. Rights and Responsibilities After Suspension or Termination ..............................74

Rule 1016. Notice to the Respondent, the Regulatory Services Provider and the Public ........75

CHAPTER 11 ALTERNATIVE DISPUTE RESOLUTION ...................................................76

Rule 1101. Disputes Subject to Arbitration ..............................................................................76

Rule 1102. Initiating an Arbitration Claim...............................................................................77

Rule 1103. Agreement With Regulatory Services Provider .....................................................77

CHAPTER 12 MISCELLANEOUS ...........................................................................................78

Rule 1201. Market Data ...........................................................................................................78

Rule 1202. Information Sharing ...............................................................................................79

Rule 1203. SEF Employees ......................................................................................................80

Rule 1204. No Endorsement of Opinions, Research or Recommendations .............................80

Rule 1205. Not a Party .............................................................................................................80

Rule 1206. No Advice ..............................................................................................................80

Rule 1207. Extension or Waiver of Rules ................................................................................80

Rule 1208. Effect of Amendment, Repeal or New Rule ..........................................................81

Rule 1209. Governing Law, Jurisdiction and Dispute Resolution ...........................................81
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Chapter 1

MEANING OF TERMS 

RULE 101. DEFINITIONS 

Unless the context otherwise indicates, the following terms have the meanings set forth 

below for all purposes under the SEF Rules. All defined terms are consistent with terms as 

defined in CFTC Regulation § 43.2. 

“Account Manager” means a Person other than an individual that acts as an agent to buy 

or sell Swaps on the Trading System in the name or on behalf of another Person. 

“Act” means the Commodity Exchange Act. 

“Administrative Services Agreement” means the administrative services agreement(s) 

between the SEF and any Services Provider whereby technology services or other services are 

provided to the SEF. 

“Affiliate” means, with respect to any Person, any Person who, directly or indirectly 

through one or more intermediaries, Controls, is Controlled by, or is under common Control 

with, such other Person. 

 “Applicable Law” means, with respect to any Person, any statute, law, regulation, rule 

or ordinance of any governmental or Self-Regulatory Organization applicable to such Person, 

including the CEA and CFTC Regulations. 

“Arbitration Panel” shall mean a panel appointed to fulfill the various adjudicative 

responsibilities described in Chapter 8 regarding arbitration matters. 

“Authorized Representative” means any Person who is authorized by a Participant to 

represent the Participant in SEF matters pursuant to Rule 306. 

“Authorized Trader” means a natural person that has been designated by a Participant 

to be able to access and use the Trading System and SEF Services on Participant’s behalf. 

“Block Trade” means a privately negotiated Swap that meets the criteria set forth in Rule 

602 and CFTC Regulation Part 43. 

“Board” means the Board of Managers of the SEF. 

“Business Day” means any day on which the SEF is open for trading. FTSEF will offer 

trading 24 hours a day during regular trading days with a brief system shutdown between 5:00 

and 5:20 EST daily. 

“Central Limit Order Book” or “CLOB” is defined in Rule 702. 

“CFTC” or “Commission” means the U.S. Commodity Futures Trading Commission or 

any successor regulatory body. 
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“CFTC Regulations” means the rules and regulations promulgated by the CFTC, as 

amended. 

“Chief Compliance Officer” means the individual appointed by the Board as the SEF’s 

Chief Compliance Officer, with the duties and responsibilities as may be prescribed by the Board 

from time to time. 

“Chief Executive Officer” means the individual appointed by the Board as the SEF’s 

Chief Executive Officer. 

“Clearing House” or “Derivatives Clearing Organization” means a derivatives 

clearing organization as defined in CFTC Regulation § 1.3(d), or any successor regulation 

thereto or any non-U.S. central clearing counterparty(ies) recognized or approved by the CFTC 

that provide clearing services with respect to any or all of Swaps traded on the SEF. 

“Clearing House Rules” means the Certificate of Incorporation, the By-Laws and any 

rule, interpretation, stated policy, or instrument corresponding to any of the foregoing, in each 

case as adopted or amended from time to time by the Clearing House relating to any or all of the 

Swaps. 

“Clearing Member” means a member of a Clearing House that is authorized to clear 

trades in any or all Swaps for a Participant or its Clients or Customers. Each Clearing Member 

must sign documentation required by the SEF. 

“Client” means a Person that granted in writing to an Account Manager authority to enter 

Orders and execute Swaps on behalf of such Person. 

“Commodity Exchange Act” or “CEA” means the Commodity Exchange Act, as 

amended from time to time. 

“Compliance Department” means the Chief Compliance Officer and all SEF Officials 

and/or agents of the SEF that assist FTSEF with the implementation, surveillance and 

enforcement of the SEF Rules and other Obligations. 

“Confirmation Data” has the meaning ascribed to it in CFTC Regulation § 45.1, or any 

successor regulation thereto. 

“Continuation Data” means the data required to be reported to a Swap Data Repository 

in CFTC Regulation § 45.1, or any successor regulation thereto. 

“Contract” means any Swap, contract, agreement, or Transaction approved for trading 

on the Trading System pursuant to the SEF Rules. 

“Contract Market” has the meaning ascribed to it in CFTC Regulation § 1.3(h), or any 

successor regulation thereto. 
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“Contract Specifications” means, with respect to any Contract, the rules or other trading 

protocols containing specifications for such Contract, as adopted, amended, supplemented or 

otherwise modified from time to time by FTSEF. 

“Control” means the possession, direct or indirect, of the power to direct or cause the 

direction of the management and policies of a Person, whether through the ownership of 

securities, by contract, or otherwise. The terms “controlling” or “controlled” shall have 

meanings correlative to the foregoing. 

“Creation Data” has the meaning ascribed to the term “Required Swap creation data” in 

CFTC Regulation § 45.1. 

“CTI Code” means a customer type indicator code. 

“Customer” has the meaning set forth in CFTC Regulation § 1.3(k). 

“Customer Account” means an account carried by a Participant or Clearing Member on 

behalf of a Customer. 

“Director” means a member of the Board of Managers. 

“Disciplinary Action” means a disciplinary proceeding, summary imposition of fines, 

summary suspension or other summary action. 

“Disciplinary Panel” means the panel appointed by the Board at the recommendation of 

the Chief Compliance Officer to act in an adjudicative role and fulfill various adjudicative 

responsibilities and duties described in Chapter 10. 

“Eligible Contract Participant” shall have the meaning set forth in Section 1a(18) of 

the CEA, as amended, and the CFTC’s rules and regulations promulgated thereunder. 

“Emergency” means any occurrence or circumstance that, in the opinion of the Board, or 

a Person or Persons duly authorized to issue such an opinion on behalf of the Board under 

circumstances and pursuant to procedures that are specified, requires immediate action and 

threatens or may threaten such things as the fair and orderly trading in, or the liquidation of or 

delivery pursuant to, any agreements, contracts, Swaps or Transactions or the timely collection 

and payment of funds in connection with clearing and settlement by a Derivatives Clearing 

Organization, including: (a) any manipulative or attempted manipulative activity; (b) any actual, 

attempted or threatened corner, squeeze, congestion or undue concentration of positions; (c) any 

circumstances which may materially affect the performance of agreements, contracts, Swaps or 

Transactions, including failure of the payment system or the bankruptcy or insolvency of any 

participant; (d) any action taken by any Governmental Agency, or any other Registered Entity, 

board of trade, market or facility which may have a direct impact on trading or clearing and 

settlement; (e) at the request of the CFTC; and (f) any other circumstance which may have a 

severe, adverse effect upon the functioning of the SEF. 

“Emergency Rules” means temporary emergency procedures and rules implemented 

pursuant to Rule 209. 
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“End-User” means a Participant that is not a “financial entity” as defined in CEA Section 

2(h)(7)(C)(i) (or is exempt from the definition of “financial entity”), is using the Transaction to 

hedge or mitigate commercial risk as defined in CFTC Regulation § 50.50(c), and provides or 

causes to be provided to a registered Swap Data Repository or, if no registered Swap Data 

Repository is available, the Commission, the information specified in CFTC Regulation 

§ 50.50(b), or any successor regulation thereto. 

“End-User Exception” means the exception to the clearing requirement set forth in CEA 

Section 2(h)(7)(A), as amended from time to time, and CFTC Regulation § 50.50. 

“Execution” means, with respect to a Contract, an agreement by the counterparties to the 

terms of the Contract that legally binds the counterparties to such terms under Applicable Law. 

“External Employees” means SEF employees who are employed by an entity other than 

the SEF and who perform work on behalf of the SEF. 

“External Entity” means an employer other than the SEF. “Futures Commission 

Merchant” has the meaning set forth in Section 1a(28) of the CEA. 

“Government Agency” means (a) any U.S. or non-U.S. federal, national, state or local 

court or (b) any U.S. or non-U.S. federal, national, state or local entity that is (i) a governmental 

authority, (ii) a regulatory body or (iii) a self-regulatory body. 

“Hearing Panel” means the Disciplinary Panel responsible for adjudicating disciplinary 

cases pursuant to a notice of charges authorized by a Review Panel. 

“Independent Software Vendor” or “ISV” means a Person that makes available to 

Participants and Authorized Traders a system or platform offering smart order routing, front-end 

trading applications, an aggregator platform or a combination of the foregoing but that does not 

provide the ability to effect the execution of Contracts other than through the Trading System. 

“Interested Person” has the meaning attributed to such term in Rule 210(a). 

“Legal Entity Identifier” or “LEI” has the meaning set forth in section 45.6 of the 

CFTC Regulations. 

“Major Swap Participant” shall have the meaning set forth in Section 1a(33) of the 

CEA and the CFTC’s rules and regulations promulgated thereunder. 

“NFA” means the National Futures Association. 

“Notice of Arbitration” shall mean a pleading served by a Claimant in connection with a 

SEF Arbitration that meets the requirements of Rule 1102. 

“Notice to Participants” means a communication sent by or on behalf of the SEF to all 

Participants as described in Rule 309. 
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“Obligation” means each SEF Rule, order or procedure issued by the SEF, including 

Notice to Participants, and other requirements implemented under the SEF Rules. 

“Officer” has the meaning attributed to such term in Rule 203. 

“Order” means either a bid or an offer for a Contract, including a response to a request 

for quote, a response to a resting quote, and the display of a quote on an order book. 

“Participant” means any Person that has signed the Participant Documentation and has 

been granted, and continues to have, Trading Privileges under the SEF Rules. Subject to 

Applicable Law, a Participant may trade for its own proprietary account or for or on behalf of a 

Client or Customer. 

“Participant ID” means each unique identifier assigned to a Participant by FTSEF for 

access to the SEF 

“Participant Documentation” means the agreements (together with any applicable 

schedules, exhibits or appendices thereto required by the SEF) in form and substance acceptable 

to the SEF, that are required to be executed and delivered to the SEF before a Person may access 

the Trading System as a Participant. 

“Permitted Transactions” means any Transaction that is not a Required Transaction. 

“Person” means an individual, sole proprietorship, partnership, limited liability 

company, association, firm, trust, corporation or other entity, as the context may require. 

“Personal Information” or “Proprietary Data” means information related to business 

Transactions, market positions, or trade secrets. 

“Trading System” means the electronic trading system of the SEF established and 

operated by FTSEF, or any successor thereto, that is made available by FTSEF to Participants for 

trading in Swaps. 

“Primary Economic Terms” has the meaning ascribed to it by CFTC Regulation § 45.1, 

or any successor regulation thereto. 

“Registered Entity” means (1) a board of trade designated as a contract market under 

section 5 of the CEA; (2) a Derivatives Clearing Organization; (3) a board of trade designated as 

a contract market under section 5f of the CEA; (4) a Swap Execution Facility registered under 

section 5h of the CEA; (5) a Swap Data Repository registered under section 21 of the CEA; and 

(6) with respect to a contract that the CFTC determines is a significant price discovery contract, 

any electronic trading facility on which the contract is executed or traded. 

“Regulatory Oversight Committee” means the committee of the Board constituted in 

accordance with Rule 207. 

“Reporting Entity” means a Reporting Counterparty, as defined in CFTC Regulation § 

45.1, and/or a Reporting Party, as defined in CFTC Regulation § 43.2. 
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“Request For Quote Trading System” or “RFQ Trading System” is defined in Rule 

703. 

“Required Number” means (i) prior to October 2, 2014, no less than two (2) potential 

Counterparties and (ii) thereafter, no less than three (3) potential Counterparties. 

“Required Transactions” means any Transaction involving a Swap which is subject to 

the clearing requirement of Section 2(h)(1) of the CEA and which has been “made available to 

trade” by any Swap Execution Facility or Contract Market pursuant to the Applicable Law. 

“Review Panel” means the Disciplinary Panel responsible for determining whether a 

reasonable basis exists for finding a violation of the SEF Rules, and for authorizing the issuance 

of notices of charges against Persons alleged to have committed violations if the Review Panel 

believes that the matter should be adjudicated. 

“Rule” or “Rules” means “SEF Rules” 

“Secondment Agreement” means the agreement entered into by SEF employees who 

are employed by an entity other than the SEF and who perform work on behalf of the SEF which 

sets forth the obligations that stem from the CEA, the CFTC’s regulations, and the SEF’s rules. 

“SEF” or “the SEF” means FTSEF LLC, or any successor thereto, a Self-Regulatory 

Organization registered with the CFTC as a Swap Execution Facility. 

“SEF Activity” means business for which a Participant, Clearing Member, Customer or 

Client is subject to the SEF Rules or which is purportedly conducted subject to the SEF Rules, 

including but not limited to the Execution of any Contract on the Trading System, including 

Permitted Transactions and Block Trades. 

“SEF Arbitration” shall mean an arbitration proceeding commenced and conducted 

pursuant to the SEF Rules. 

“SEF LLC Agreement” means the Operating Agreement of FTSEF LLC. 

“SEF Confirmation” has the meanings attributed to such term in Rule 404(a). 

“SEF Official” means any Director or Officer of, or individual employed directly by, the 

SEF, a Regulatory Services Provider or any individual rendering similar services to the SEF 

under an administrative or similar agreement. 

“SEF Market Data” is defined in Rule 1201. 

“SEF Participant Application” means the User Agreement and any other agreements or 

information that are required to be executed and delivered to the SEF before a Person may access 

the Trading System. 

“SEF Proceeding” has the meanings attributed to such term in Rule 210(a). 
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“SEF Rules” means all rules adopted in this Rulebook, all Notices to Participants 

published by the SEF, the User Agreement, interpretations, orders, resolutions, advisories, 

statements of policy, decisions, manuals and directives of the SEF, and all amendments thereto. 

“Self-Regulatory Action” has the meaning attributed to such term in Rule 210(a). 

“Self-Regulatory Organization” shall, unless otherwise provided, have the meaning 

attributed to such term in CFTC Regulation § 1.3(ee), or any successor regulation thereto, and, in 

addition, shall include a Swap Execution Facility, Contract Market, Derivatives Clearing 

Organization, and registered futures association, such as the NFA. FTSEF is a self-regulatory 

organization. 

“Services Provider” means the organization, if any, which provides technology services 

or other services to the SEF pursuant to an Administrative Services Agreement. 

“Swap” or “Swaps” means any agreement, contract or Transaction that is a Swap as 

defined in Section 1a(47) of the CEA and as further defined by the CFTC, which is listed on the 

SEF in accordance with CFTC Regulation § 37.4. 

“Swap Data Repository” or “SDR” shall have the meaning set forth in Section 1a(48) of 

the CEA and the CFTC’s rules and regulations promulgated thereunder. 

“Swap Dealer” shall have the meaning ascribed to it by CFTC Regulation § 1.3(ggg), or 

any successor regulation thereto. 

“Swap Execution Facility” or “SEF” shall have the meaning set forth in Section 1a(50) 

of the CEA and the CFTC’s rules and regulations promulgated thereunder. 

“Terms Incorporated by Reference” means any documents and agreements (including, 

without limitation, ISDA master agreements, other master agreements, terms supplements, 

master confirmation agreements, and incorporated industry definitions) governing a Transaction 

existing at the time of execution to which the applicable Participants are party. 

“Trade Confirmation” has the meaning attributed to such term in Rule 404(a). 

“Trading Hours” means, for any Business Day, the hours during which Orders may be 

placed on Trading System , as shall be established, and may be revised from time to time, by the 

SEF pursuant to Rule 903. 

“Trading Privileges” means the right granted to a Participant to use, directly or 

indirectly, the SEF for execution of Swaps. No Person may exercise Trading Privileges on 

behalf of a Participant during any suspension of such Participant’s Trading Privileges. 

“Trading System” means the electronic trading system of the SEF established and 

operated by FTSEF, or any successor thereto, that is made available by FTSEF to Participants for 

trading in Swaps. 
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“Transaction” means any purchase or sale of any Contract made on the Trading System 

or pursuant to the SEF Rules. 

“Transaction Data” means, with respect to a Participant, data submitted by that 

Participant related to requests for quotes, offers, bids, pricing, matching, netting, settlement and 

similar data submitted through the Trading System to one or more counterparties, as well as 

information that such Participant may upload to the Trading System with respect to Transactions 

conducted otherwise than through the use of the Trading System’s functionality, and messages 

sent in respect thereof. 

“U.S. Person” means a U.S. person as defined in the Commodity Exchange Act and the 

applicable regulations promulgated from time to time in connection therewith, or, in each case, 

under any interpretation issued in connection therewith or successor statute or rule. 

“Unique Swap Identifier” or “USI” shall have the meaning ascribed to it by CFTC 

Regulation § 45.5, or any successor regulation thereto. 

“User Agreement” means the agreement entered into between a Participant and FTSEF 

that identifies the rights and obligations of both parties and incorporates the FTSEF Rules by 

reference to such agreement. 

“Valuation Data” has the meaning ascribed to it in CFTC Regulation § 45.1, or any 

successor regulation thereto. 

“written” or “writing” means printing, lithography, photography, and other modes of 

representing or reproducing words or data in a visible form, including electronic transmissions. 

* * * * * * 

RULE 102. RULES OF CONSTRUCTION 

The following rules of construction shall apply to the SEF Rules: 

(a) the headings in the SEF Rules are for convenience only and do not affect the 

construction of the SEF Rules; 

(b) all references to time in the SEF Rules are to local time in New York, New York, 

except where expressly provided otherwise; 

(c) in the SEF Rules, words denoting a singular number include the plural number 

where the context permits and vice versa; 

(d) where the context permits or requires, any pronoun shall include the 

corresponding masculine, feminine and neuter forms; 

(e) forms of the word “include” mean that the inclusion is not limited to the items 

listed; 

(f) “or” is disjunctive but not exclusive; 

(g) references in the SEF Rules to statutory provisions include those provisions as 

amended, and any rules or regulations promulgated thereunder. 
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Chapter 2

GOVERNANCE 

RULE 201. GOVERNANCE 

The SEF is a New York limited liability company. The management of the SEF is governed by 

the SEF LLC Agreement. 

RULE 202. BOARD 

(a) The Board shall oversee the operation of the SEF and shall have the authority to review, 

call for review, amend, suspend or overrule the decisions and actions of any SEF 

Committee. Without limiting the generality of the foregoing, the Board shall have the 

power to: adopt, amend, implement and repeal SEF Rules, not contrary to Applicable 

Law or the SEF LLC Agreement, as in the Board’s judgment promotes the best interest of 

the SEF; and 

(b) make interpretations of the SEF Rules, which shall be binding on all Persons subject to 

the jurisdiction of the SEF. 

(1) The board's membership will include a diversity of membership interests. Twenty 

percent or more of the regular voting members of the board must be persons who: 

i. Are knowledgeable of futures trading or financial regulation or are 

otherwise capable of contributing to governing board deliberations; and, 

ii. Are not members of the SEF, 

iii. Are not currently salaried employees of the SEF, 

iv. Are not primarily performing services for the SEF in a capacity other than 

as a member of the SEF's governing board, or 

v. Are not officers, principals or employees of a firm which holds a 

membership at the SEF either in its own name or through an employee on 

behalf of the firm; 

(c) Within thirty days after each governing board election, the SEF will submit to the CFTC 

a list of the governing board's members, the membership interests they represent and how 

the composition of the governing board otherwise meets the requirements of CFTC 

Regulation §1.64(b) and the SEF’s implementing standards and procedures. 

RULE 203. OFFICERS 

The Board shall appoint a Chief Compliance Officer and such other officers of the SEF as it may 

deem necessary or appropriate from time to time, in accordance with the SEF LLC Agreement. 

The Chief Compliance Officer shall have all authority required under CFTC Regulation 37.1500 
 - 10 - 

et seq. Any Officer may also be a director, officer, partner or employee of the SEF or any of its 

Affiliates. The Officers shall have such powers and duties in the management of the SEF as the 

Board may prescribe from time to time. 

RULE 204. DISQUALIFICATION OF BOARD AND COMMITTEE MEMBERS 

(a) No Person may serve as a Director, or serve on a committee established by the Board or a 

Disciplinary Panel if the individual: 

(1) within the prior three (3) years has been found, by a final decision in any action or 

proceeding brought in a court of competent jurisdiction, the CFTC, or any SelfRegulatory Organization, to have committed a disciplinary offense; 

(2) within the prior three (3) 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 Contract Market, is suspended or 

expelled from membership in a Self-Regulatory Organization, is serving any 

sentence or probation, or owes any portion of a fine or penalty related to either: 

i. a finding of a disciplinary offense by a final decision in any action or 

proceeding brought in a court of competent jurisdiction, the CFTC, or any 

Self-Regulatory Organization; or 

ii. 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 (3) years has been, subject to a revocation or 

suspension of registration by the CFTC or has been convicted of a felony 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 committee, arbitration panel or governing board of any selfregulatory 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) or 8a(3) of the 

CEA. 

(b) For purposes of Rule 204(a), the terms “disciplinary offense,” “final decision,” and 

“settlement agreement” have the meanings set forth in CFTC Regulation § 1.63(a) or any 

successor regulation. 
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RULE 205. CHIEF COMPLIANCE OFFICER QUALIFICATIONS AND DUTIES 

(a) The individual designated to serve as Chief Compliance Officer shall have background 

and skills appropriate for fulfilling the responsibilities of the position. No individual 

disqualified from registration pursuant to Sections 8a(2) or 8a(3) of the CEA may serve 

as Chief Compliance Officer. The SEF shall notify the CFTC of the removal of the Chief 

Compliance Officer and the appointment of any new Chief Compliance Officer, whether 

interim or permanent, within two Business Days of such appointment. 

(b) The position of Chief Compliance Officer shall carry with it the authority and resources 

to develop and enforce policies and procedures necessary to fulfill the duties set forth for 

chief compliance officers in the CEA and the CFTC Regulations. The Chief Compliance 

Officer shall have supervisory authority over all staff acting in furtherance of the Chief 

Compliance Officer’s obligations. 

(c) The Chief Compliance Officer shall report directly to the Board, and the Board shall 

approve the compensation of the Chief Compliance Officer. 

(d) The Chief Compliance Officer shall have the following duties: 

(1) Overseeing and reviewing the SEF’s compliance with Section 5h of the CEA and 

any related rules adopted by the CFTC; 

(2) In consultation with the Board, resolving any conflicts of interest that may arise 

including: 

i. Conflicts between business considerations and compliance requirements; 

ii. Conflicts between business considerations and the requirement that the 

SEF provide fair, open, and impartial access as set forth in CFTC 

Regulation § 37.202 or any successor regulation; and; 

iii. Conflicts between the SEF’s management and members of the Board; 

1. Conflicts affecting the Chief Compliance Officer’s ability to 

impartially perform his duties will be resolved by the Board 

without participation from the Chief Compliance Officer. 

(3) Establishing and administering written policies and procedures reasonably 

designed to prevent violation of the CEA and any rules adopted by the CFTC; 

(4) Taking reasonable steps to ensure compliance with the CEA and CFTC 

regulations; 

(5) Establishing procedures for the remediation of noncompliance issues identified by 

the Chief Compliance Officer through a compliance office review, look-back, 

internal or external audit finding, self-reported error, or validated complaint; 
 - 12 - 

(6) Establishing and following appropriate procedures for the handling, management 

response, remediation, retesting, and closing of noncompliance issues; 

(7) Establishing and administering a compliance manual designed to promote 

compliance with the applicable laws, rules, and regulations and a written code of 

ethics designed to prevent ethical violations and to promote honesty and ethical 

conduct; 

(8) Supervising the SEF’s self-regulatory program with respect to trade practice 

surveillance; market surveillance; real-time market monitoring; compliance with 

audit trail requirements; enforcement and disciplinary proceedings; audits, 

examinations, and other regulatory responsibilities with respect to Participants, 

Customers and Clients (including ensuring compliance with, if applicable, 

financial integrity, financial reporting, sales practice, recordkeeping, and other 

requirements); and 

(9) Supervising the effectiveness and sufficiency of any regulatory services provided 

to the SEF by a Regulatory Services Provider or other Registered Entity in 

accordance with CFTC Regulation § 37.204 or any successor regulation. 

(e) The Chief Compliance Officer shall have the authority to inspect the books and records 

of all Participants, Customers, Clients or Clearing Members and the authority to require 

any Participant, Customer, Client or Clearing Member to appear before him or her and 

produce its books and records and answer questions regarding alleged violations of the 

SEF Rules, at the time, place and in the manner it designates. 

(f) The Chief Compliance Officer shall annually prepare and sign a report pursuant to the 

requirements in Section 37.1501(e) and 37.1501(f) which shall contain a description of: 

(i) the compliance of the SEF with the CEA; and (ii) the policies and procedures, 

including the code of ethics and conflict of interest policies, of the SEF. Such annual 

report shall include a certification that, under penalty of law, it is accurate and complete 

and be submitted to the CFTC. 

RULE 206. COMMITTEES 

(a) The SEF shall have such committees, and special committees that the Board may deem, 

from time to time, necessary for the operations of the SEF and appointed in accordance 

with the SEF Rules. For the avoidance of any doubt, all references to “committee” shall 

include any panel appointed from a committee. 

(b) The Board shall initially have one standing committee: the Regulatory Oversight 

Committee (ROC). 

(c) Each standing committee shall assist in the supervision, management and control of the 

affairs of the SEF within its particular area of responsibility, subject to the authority of 

the Board. 
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(d) All committee decisions shall be reported to the Board for final approval. Except as 

otherwise provided in the SEF Rules, the Board shall have the authority to overrule the 

decision of any committee. 

RULE 207. REGULATORY OVERSIGHT COMMITTEE 

(a) The Regulatory Oversight Committee shall have a total of three (3) members or such 

other number of committee members as the Board shall determine is necessary to comply 

with any final governance rules adopted by the CFTC. 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 oversee all aspects of the SEF’s regulatory program on behalf of the 

Board. The Regulatory Oversight Committee shall report to the Board and shall make 

such recommendations to the Board as may, in its judgment, best promote the interests of 

the SEF. The Chief Compliance Officer shall meet with the Regulatory Oversight 

Committee at least once each calendar quarter. 

(b) Each member of the Regulatory Oversight Committee shall serve for a term of two (2) 

calendar years from the date of their appointment or for the remainder of their term as a 

Director, if 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 

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

Oversight Committee may serve for multiple terms. 

(c) The Regulatory Oversight Committee shall oversee the SEF’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. It shall make such recommendations to the Board as will, in its judgment; best 

promote the interests of the SEF. The Regulatory Oversight Committee shall also have 

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

Board may delegate to it from time to time. 

(d) Without limiting the generality of the foregoing, the Regulatory Oversight Committee 

shall have authority to monitor all aspects of the SEF’s regulatory program for 

sufficiency, effectiveness, and independence regarding: 

(1) trade practice and market surveillance, audits, examinations and other regulatory 

responsibilities with respect to SEF Participants, including, without limitation, 

compliance with financial integrity, financial reporting, sales practice, 

recordkeeping, and conducting investigations; 

(2) reviewing the size and allocation of regulatory budget and resources, and the 

number, hiring, termination, and compensation of regulatory personnel; 

(3) reviewing the performance of the Chief Compliance Officer and making 

recommendations with respect to such performance to the Board; 

(4) recommending changes that would ensure fair, vigorous, and effective regulation; 
 - 14 - 

(5) reviewing all regulatory proposals prior to implementation and advising the Board 

as to whether and how such changes may impact regulation; and 

(6) monitoring for potential conflicts of interest and assisting the Board in 

minimizing actual or potential conflicts of interest relating to the SEF’s selfregulatory obligations. 

RULE 208. ADDITIONAL COMMITTEES AND PANELS 

(a) The Board may create such additional standing committees of the Board as it may from 

time to time deem necessary or advisable. Except as otherwise specifically provided in 

the SEF Rules, the members of any additional committee or panel shall be appointed as 

determined by the Board. The Board shall designate the chairperson of such additional 

committee or panel. 

(b) In addition to the standing committees, the Board may from time to time constitute and 

appoint, by Rule or resolution, special committees of the Board and designate their 

composition, responsibilities and powers. 

(c) Subject to the authority of the Board, each additional committee or panel shall determine 

the manner and form in which its proceedings shall be conducted. Each additional 

committee or panel may act only by the decision of an absolute majority in number of the 

members of such committee or panel, either by vote at a meeting or by unanimous written 

consent without a meeting. 

RULE 209. EMERGENCY RULES 

(a) Subject to Applicable Law, during an Emergency, the SEF may implement Emergency 

Rules, Pursuant to the Emergency Rules, the SEF will have the authority to intervene as 

necessary to maintain markets with fair and orderly trading and to prevent or address 

manipulation or disruptive trading practices, whether the need for intervention arises 

exclusively from the SEF’s market or as part of a coordinated, cross-market intervention. 

Emergency Rules may require or authorize the SEF, the Board, any committee of the 

Board, the Chief Executive Officer, the Chief Compliance Officer, or any other Officer to 

take actions necessary or appropriate to respond to the Emergency, including: 

(1) suspending or restricting trading or limiting trading to liquidating only (in whole 

or in part) 

(2) extending, limiting or changing trading hours; 

(3) temporarily modifying or suspending any provision of the SEF Rules or 

Participant obligations; 

(4) imposing intraday market restrictions; 

(5) ordering the liquidation or transfer of open positions; 
 - 15 - 

(6) shortening or extending trading hours; 

(7) suspending or curtailing trading in a Contract; 

(8) altering the terms and conditions of a Contract; 

(9) imposing or modifying price limits; and/or 

(10) imposing or modifying position limits. 

(b) Before any Emergency Rule may be adopted and enforced, a required vote of the 

Regulatory Oversight Committee must approve the enforcement of such Emergency Rule 

at a duly convened meeting. Directors may attend such a meeting by teleconference. If 

the Chief Executive Officer or Chief Compliance Officer determines that Emergency 

Rules must be implemented with respect to an Emergency before a meeting of the 

Regulatory Oversight Committee can reasonably be convened, then the Chief Executive 

Officer or Chief Compliance Officer 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 Chief Compliance Officer must convene a 

meeting as soon as practicable. 

(c) Whenever the SEF, the Board, any committee of the Board, the Chief Executive Officer 

or Chief Compliance Officer takes actions necessary or appropriate to respond to an 

Emergency, it will, where practicable, ensure that prompt notice is given to Participants. 

(d) In situations where a Swap is traded on more than one Swap Execution Facility, 

Emergency action to liquidate or transfer open interest must be directed, or agreed to, by 

the CFTC or CFTC staff, and the SEF will use reasonable efforts to coordinate with any 

Derivatives Clearing Organization that has cleared the Swap and any other Swap 

Execution Facilities where such Swap is traded prior to mandating the liquidation or 

transfer of such Swap. 

(e) The SEF will use reasonable efforts to notify the CFTC prior to implementing, modifying 

or terminating an Emergency Rule. If such prior notification is not possible or 

practicable, the SEF will notify the CFTC at the earliest possible time after 

implementation, modification or termination, but in no event more than twenty-four 

hours after implementation, modification or termination. 

(f) Upon taking any action in response to an Emergency, the SEF will document the 

decision- making process related to such action. Information on any regulatory action 

taken pursuant to the Emergency Rules will be included in a submission of a certified 

rule to the CFTC. All such documentation will be kept for at least five years, two years 

in a readily accessible location, following the date on which the Emergency ceases to 

exist or to affect the SEF, and all such documentation will be provided to the CFTC upon 

request. 
 - 16 - 

(g) Upon taking any action in response to an Emergency, the SEF will promptly notify the 

CFTC of the SEF’s exercise of the Emergency Rules, explaining its decision-making 

process, the reasons for using its Emergency authority, and how conflicts of interest were 

minimized, including the extent to which the SEF considered the effect of its Emergency 

action on the underlying markets and on markets that are linked or referenced to the 

contracts traded on its facility, including similar markets on other trading venues. 

(h) When the SEF determines that the Emergency has been reduced sufficiently to allow the 

SEF to resume normal functioning, any such actions will be modified or terminated, as 

appropriate. 

RULE 210. CONFLICTS OF INTEREST 

FTSEF believes that it is in the best interest of FTSEF and Participants to be aware of and 

properly manage all conflicts of interest and appearances of conflicts of interest. Accordingly, 

the following rules shall apply to mitigate potential and actual conflicts of interest. 

(a) A Director, Officer, Disciplinary Panel member or other Person authorized to exercise the 

SEF’s authority concerning any inquiry, investigation, disciplinary proceeding, summary 

suspension, or other summary actions (any such action, a “SEF Proceeding” and, 

collectively, “SEF Proceedings”), or Emergency actions taken pursuant to Rule 209 or 

Emergency disciplinary action taken pursuant to Rule 1014 (each such SEF Proceeding 

or Emergency action, a “Self-Regulatory Action”) who knowingly has a “material 

conflict of interest” between his or her position as a Director, Officer, panel member or 

exercise of authority concerning a Self-Regulatory Action and his or her personal 

interests (each, an “Interested Person”) may not participate in any deliberations or vote 

of the Board Committee, panel or exercise any authority with respect to such SelfRegulatory Action involving his or her personal interest, except as described in Rule 

210(d). 

(b) For purposes of Rule 210(a), a “material conflict of interest” means a Director, Officer, 

Disciplinary Panel Member or other Person: 

(1) being named as a respondent or potential respondent in the Self-Regulatory 

Action; 

(2) being an employer, employee, fellow employee or an Affiliate of a respondent or 

potential respondent in the Self-Regulatory Action; 

(3) having any significant, ongoing business relationship with a respondent or 

potential respondent in the Self-Regulatory Action; 

(4) having a family relationship with a respondent or potential respondent in a SelfRegulatory Action (including the individual’s spouse, co-habitator, former 

spouse, parent, step-parent, child, step-child, sibling, step-brother, step-sister, 

grandparent, grandchild, uncle, aunt, nephew, niece, father-in-law, mother-in-law, 

brother-in-law or sister-in-law); 
 - 17 - 

(5) having a direct and substantial financial interest in the result of the deliberations 

or vote based upon either exchange or non-exchange positions (as referenced in 

CFTC Regulation § 1.69) that could reasonably be expected to be affected by the 

action. A direct and substantial financial interest includes positions in Contracts 

in accounts of, controlled by, or affiliated with the Interested Person or in any 

other types of direct and substantial financial positions of the Interested Person 

that are reasonably expected to be affected by the deliberations or vote; and/or 

(6) any other circumstance that gives rise to a conflict between the Director’s, 

Officer’s, Disciplinary Panel Member’s or Other Person’s exercise of authority 

concerning any Self-Regulatory Action and his or her personal interests. 

(c) Before considering any Self-Regulatory Action, an Interested Person must disclose in 

writing to the Board the material facts concerning his or her relationship or interest in the 

matter. 

(d) Any Interested Person who would be required otherwise to abstain from deliberations and 

voting pursuant to Rule 210(a) as a result of having a direct and substantial financial 

interest in the result of the deliberations and vote may participate in deliberations, prior to 

a vote on the matter, if: 

(1) the material facts about the Interested Person’s financial interest in the matter are 

disclosed or known to the Board, Committee, of Disciplinary Panel; 

(2) the Board, Committee, of Disciplinary Panel determines that the participation by 

the Interested Person would be consistent with the public interest; and 

(3) a majority of the Directors (excluding any Interested Persons) vote to allow the 

Interested Person to participate in deliberations on the matter. 

(e) If a determination is made pursuant to Rule 210(d) that an Interested Person may 

participate in deliberations prior to a vote, then the minutes of the meeting of the Board 

or committee thereof will reflect the determination and the reasons for the determination. 

(f) If a determination is made that all Directors are Interested Persons with respect to a 

matter subject to a vote by the Board, the Chief Executive Officer will appoint a panel of 

individuals who are not Interested Persons with respect to such matter, which will have 

the same authority and powers over such matter that the Board would have if the 

Directors were not Interested Persons with respect to such matter. 

(g) No Director, Officer or member of any committee or panel established by the Board shall 

use or disclose for any purpose other than the performance of his or her official duties 

and responsibilities as a Director, Officer or committee or panel member any material, 

non-public information obtained as a result of the individual’s duties and responsibilities 

as a Director, Officer or committee or panel member. No Director, Officer or committee 

or panel member shall, directly or indirectly, disclose or use at any time, either during his 

or her association with the SEF or thereafter, any confidential information of which the 

Board member or committee or panel member becomes aware. Each Director, Officer or 
 - 18 - 

committee or panel member in possession of confidential information shall take all 

appropriate steps to safeguard the information and to protect it against disclosure, misuse, 

espionage, loss and theft. 

(h) Notwithstanding Rule 210(g), a Director, Officer or committee or panel member may 

disclose confidential information if required by Applicable Law or a court order to be 

revealed to the United States Department of Justice or the CFTC. 

(i) For the purposes of Rule 210(g), the terms “material information” and “non-public 

information” shall each have the meaning set forth in CFTC Regulation § 1.59(a) or any 

successor regulation. 

RULE 211. SERVICES AGREEMENTS 

(a) The SEF may, at any time, choose to contract with a registered futures association, or 

other Registered Entity, for the provision of regulatory services which includes, without 

limitation, assistance with the SEF’s enforcement of the SEF Rules. Any act or 

requirement that is required to be performed by the Compliance Department, under the 

SEF Rules, may be performed by a regulatory service provider. The SEF shall retain 

ultimate decision-making authority with respect to any functions that are contracted to a 

Regulatory Service Provider. 

(b) The SEF may contract with a Services Provider to provide certain technology services to 

the SEF pursuant to an Administrative Services Agreement. In accordance with an 

Administrative Services Agreement, a Services Provider may perform certain functions 

under the SEF Rules and the SEF may provide information to the Services Provider in 

connection with the performance by the Services Provider of such functions. 

RULE 212 FINANCIAL RESOURCES 

(a) In calculating projected operating costs, the SEF includes all costs incurred by the SEF in 

its capacity as a SEF, includes all costs allocated to the SEF for which the SEF is 

responsible, and includes all costs incurred by any affiliated entity on behalf of the SEF. 

(b) In calculating projected operating costs, the SEF calculates the costs associated with all 

methods of execution and all products it lists and does not omit any costs associated with 

Permitted Transactions. 

(c) If a letter of credit is issued, the letter is irrevocable, non-conditional, provides cash 

within the same or next business day after a draw request, and is used to satisfy only 

liquidity requirements, not the broader financial resources requirements. 

(d) The SEF does not count any resources of its parent company or any affiliated company as 

part of its financial resources calculation. 
 - 19 - 

Chapter 3

PARTICIPANTS 

RULE 301. ELIGIBILITY CRITERIA FOR BECOMING A PARTICIPANT 

(a) Pursuant to CFTC Regulation §37.202, in order to be eligible for admission as a 

Participant, an applicant must demonstrate that it: 

(1) is an Eligible Contract Participant, and each Client or Customer on whose behalf 

it wishes to trade on the SEF is an Eligible Contract Participant; 

(2) is of good reputation and business integrity; 

(3) maintains adequate financial resources and credit; 

(4) is validly organized, in good standing, and authorized by its governing body and, 

if relevant, documents of organization, to trade Contracts (if an entity); 

(5) is not subject to any economic or trade sanctions programs administered by the 

Office of Foreign Assets Control of the U.S. Department of the Treasury 

(“OFAC”) or other relevant U.S. or non-U.S. authority, and is not listed on 

OFAC’s List of Specially Designated Nationals and Block Persons; 

(6) has not filed for bankruptcy; 

(7) is not prohibited from using the services of the SEF for any reason whatsoever; 

(8) holds all registrations required under Applicable Law, if any; 

(9) is not subject to statutory disqualification under Section 8a(2) of the CEA; 

(10) consents to the SEF’s jurisdiction pursuant to Rule 311; and 

(11) satisfies any other criteria that the SEF may require from a Participant perform its 

SRO responsibilities, comply with Applicable Law or provide SEF services. 

(b) No Participant, including a Participant that is an Account Manager, shall carry an account 

for a Customer or enter an Order in the name of or on behalf of a Client unless the 

Participant has entered into an agreement with such Customer or Client, which must, at a 

minimum: 

(1) contain a representation from the Customer or Client that the Customer or Client 

is an Eligible Contract Participant at the time of execution of any Swap on or 

subject to the rules of the SEF; 

(2) contain a requirement that each Customer or Client become a Participant or 

consent to the jurisdiction of the SEF in connection with and with respect to any 
 - 20 - 

Swap executed for or on behalf of such Customer or Client on or subject to the 

rules of the SEF; and 

(3) obligate the Customer or Client to provide the SEF and its agents access to all 

books and records, staff and other information necessary for monitoring and 

enforcement of the SEF Rules. 

(c) Once admitted, the Participant shall continue to comply with all applicable eligibility 

criteria in Rule 301(a). 

(d) Each Participant that is not an Account Manager must either be a Clearing Member or 

establish a clearing relationship with a Clearing Member, and each Participant that is an 

Account Manager must ensure that each of its Clients has established a clearing 

relationship with a Clearing Member; provided, however, that such requirements shall 

not apply if a Participant or Client, as the case may be: (i) (A) qualifies as an End-User, 

or (B) otherwise transacts in Swaps on the Trading System that are not required to be 

cleared, and (ii) does not clear or intend to clear any Swaps executed on the Trading 

System. 

(e) Each Participant that is not an Account Manager must disclose to the SEF the Clearing 

Members with which it has clearing relationships, if any, and shall immediately notify the 

SEF if it ceases to be a clearing customer of any Clearing Member. 

(f) Each Participant that is an Account Manager must disclose to the SEF the Clearing 

Members with which its Clients have clearing relationships, if any, and shall immediately 

notify the SEF if it ceases to be a clearing customer of any Clearing Member. 

(g) Participants and Clients that do not have a relationship with a Clearing Member as set 

forth in the SEF Rule 301(d) are prohibited from entering Orders or causing Orders to be 

entered for Required Transactions. 

(h) Participant understands that the SEF may restrict, suspend or terminate Participant’s 

access to the Trading System at the direction of the Clearing Member. 

(i) The SEF may allow, deny, suspend, or permanently bar Participant’s access to the 

Trading System pursuant to disciplinary measures or emergency action, or for any other 

reason at the sole discretion of the SEF. 

RULE 302. APPLICATION PROCEDURES; TERMINATION OF PARTICIPANT 

(a) Any Person who desires to become a Participant shall: 

(1) complete and submit the Participant Documentation; 

(2) establish a clearing relationship with a Clearing Member, except as provided in 

the SEF Rule 301(d); 

(3) enter into an agreement to clear with a Clearing House, if applicable; 
 - 21 - 

(4) agree to abide by the SEF Rules and Applicable Law; 

(5) provide such information and documentation as may be requested by the SEF 

pertaining to the Participant or the Participant’s Clients if Participant is an 

Account Manager, and follow the procedures established by the SEF for 

admission; and, 

(6) if Participant is organized or located outside of the United States, enter into a 

written agreement acceptable to the SEF appointing a third party as its U.S. agent 

for service of process for purposes of CFTC Regulation 15.05, and shall provide 

the SEF with a copy of the agreement. 

(b) The Company may require additional information from an applicant in order to establish 

the applicant’s eligibility to access the Trading System and may conduct an investigation 

to verify information submitted by the applicant. In determining whether to admit an 

applicant as a Participant, the SEF will evaluate, among other things, the applicant’s 

disciplinary history and financial and operational soundness. 

(c) If the SEF decides to admit an applicant as a Participant, it shall promptly notify the 

applicant and state in such notice the date on which the applicant shall become a 

Participant. 

(d) The SEF may deny, condition or terminate Participant status of any Person: 

(1) If such Person is unable to satisfactorily demonstrate its ability to satisfy the 

eligibility criteria to become or remain a Participant; 

(2) If such Person is unable to satisfactorily demonstrate its capacity to adhere to all 

applicable SEF Rules and Applicable Law; 

(3) for such other cause as the SEF may reasonably determine. 

(e) If the SEF decides to deny or condition an application for admission as a Participant, the 

Company shall promptly notify the applicant in writing, setting forth the reasons for the 

denial or conditioning of Participant status. The applicant may, within fourteen (14) days 

of the date of such notice, request in writing that the Board reconsider that determination. 

The Board may request additional information from the applicant or establish any other 

process that it believes is necessary and appropriate to consider the request for 

reconsideration. Unless extended with the consent of the applicant, the Board shall 

confirm, reverse or modify the denial or conditioning of the application within thirty (30) 

days of receiving the request for reconsideration or such longer period as may be agreed 

by the applicant. Board shall promptly notify the applicant of its decision in writing. The 

decision of the Board shall be final and not subject to appeal. 
 - 22 - 

RULE 303. TRADING PRIVILEGES OF A PARTICIPANT 

(a) Upon admission as a Participant, the Participant must execute such Participant 

Documentation as required from time to time by the SEF, and such Participant 

Documentation must remain in effect for the Participant to access the Trading System. 

(b) Admission as a Participant only entitles the Participant to the Trading Privileges and does 

not confer any right of ownership in, or right to attend or vote at meetings of, the SEF, or 

right to share in the profits, of the SEF. A Participant may not transfer or assign its status 

as a Participant. 

RULE 304. TRADING ACCESS 

The SEF may at any time revoke, suspend, limit, condition, restrict or qualify a Participant’s 

and/or a Participant’s Authorized Trader(s)’ Trading Privileges and/or ability to access the 

Trading System , if in the sole discretion of the SEF such action is in the best interests of the 

SEF. 

RULE 305. FEES AND ASSESSMENTS 

Each Participant shall pay when due all dues, assessments and fees as may be established by the 

SEF and published on the SEF’s website or otherwise agreed between the SEF and such 

Participant. The SEF shall charge comparable dues, assessments and fees to Persons that receive 

comparable access to the Trading System. The Company may suspend, revoke, limit, condition, 

restrict or qualify the Trading Privileges of a Participant and its ability to otherwise access the 

Trading System if such Participant fails to pay such amounts when due. 

RULE 306. PARTICIPANT REPRESENTATIVES 

(a) Authorized Traders. Each Participant shall nominate or designate one or more 

Authorized Traders. 

(1) Each Authorized Trader: (i) must be a natural person; and (ii) must satisfy any 

other requirements as be prescribed by the SEF from time to time; and 

(2) Any person who is an Authorized Trader must: (i) utilize the Participant’s Legal 

Entity Identifier for all activities on the Trading System; and (ii) utilize the 

Participant ID provided by the SEF to such Authorized Trader. 

(b) Authorized Representatives 

(1) Authorized Representatives will represent the Participant before the SEF and its 

committees and receive notices on behalf of such Participant. 

(2) Authorized Representatives shall be empowered by the Participant to act on its 

behalf, and the SEF shall be entitled to rely on the actions of Authorized 

Representatives as binding on the Participant, unless and until Participant has 
 - 23 - 

notified the SEF that such Authorized Representative’s designation has been 

revoked. 

(3) Each Participant must provide the SEF with current contact and other requested 

information for each of its Authorized Representatives so that the SEF is able to 

immediately contact such Authorized Representatives. 

RULE 307. IDENTIFICATION OF AUTHORIZED TRADERS 

(a) Each person trading on behalf of a Participant shall be identified to the SEF by 

Participant’s Legal Entity Identifier and shall be subject to the SEF Rules. It is the duty 

of the Participant to ensure that Legal Entity Identifiers are current and accurate at all 

times. Participant shall not use, and the SEF may deny Participant access to, the Trading 

System at any time that Participant has, or is required by CFTC regulations to have, a 

Legal Entity Identifier if Participant does not have such a Legal Entity Identifier or has 

not notified the SEF in writing of such Legal Entity Identifier. 

(b) Participant shall be responsible for, and shall take and maintain appropriate steps to 

ensure, the security of Participant’s (and Participant’s Authorized Traders’) use of the 

Trading System. 

(c) Without limiting the foregoing, each Authorized Trader will abide by applicable SEF 

Rules and Applicable Law, and each Participant will ensure on an ongoing basis that: (i) 

none of its Authorized Traders is subject to a disqualification pursuant to any Applicable 

Law (unless an appropriate exemption has been obtained with respect thereto); (ii) each 

of its Authorized Traders will be technically proficient; (iii) each of its Authorized 

Traders will conduct its business in a fair and equitable manner; and (iv) each of its 

Authorized Traders will conduct its business in accordance with the SEF Rules. 

(d) Each Participant and each Authorized Trader will also individually receive a Participant 

ID and a corresponding password to enable such Participant or Authorized Trader to 

access and use the Trading System. Each individual must use a Legal Entity Identifier 

and Participant ID to access the Trading System. In no event may a Person enter an 

Order or permit the entry of an Order by an individual using Participant ID other than the 

individual’s own Participant ID. 

RULE 308. RECORDING OF COMMUNICATIONS 

The SEF or may record conversations and retain copies of electronic communications between 

SEF Officials, on one hand, and Participants and their Authorized Traders, on the other hand. 

Any such recordings may be retained by the SEF in such manner and for such periods of time as 

the SEF may deem necessary or appropriate or as required by Applicable Law. 

RULE 309. NOTICES TO PARTICIPANTS 

The SEF shall publish a notice with respect to each addition to, modification of, or clarification 

of, the SEF Rules or of any action to implement any SEF Rules, in a form and manner that is 

reasonably designed to enable each Participant to become aware of and familiar with, and to 
 - 24 - 

implement any necessary preparatory measures to be taken by it with respect to, such addition or 

modification, prior to the effective date thereof (each a “Notice to Participants”). For purposes 

of publication in accordance with the first sentence of this Rule, it shall be sufficient (without 

limiting the discretion of the SEF as to any other reasonable means of communication) if a 

Notice to Participants is published on the SEF’s website and posted on the SEF’s internal 

notification system. Any Notice to Participants published and transmitted shall also be deemed 

to have been made to all Account Managers, Clients, Customers, Authorized Representatives and 

Authorized Traders. 

RULE 310. COMMUNICATIONS BETWEEN THE SEF AND PARTICIPANTS 

Each Participant must provide the SEF with its current electronic mail address and telephone 

number and the electronic mail address and telephone number of any of its Authorized Traders, 

and immediately (and in any event within 24 hours) update this information whenever it changes. 

All communications made to Participants shall also be deemed to have been made to all 

Authorized Representatives and Authorized Traders, and all communications made to an 

Authorized Representative or Authorized Trader shall also be deemed to have been made to 

Participant. The Participant shall be responsible for conveying such communications to its 

Authorized Traders and/or to its Customers or Clients. Each Participant will be responsible for 

promptly reviewing and, if necessary, responding to all electronic communications from the SEF 

to the Participant or any of its Authorized Traders, Customer or Clients. 

RULE 311. APPLICATION OF THE SEF RULES 

(a) Any Participant accessing the Trading System or entering any Order or submitting any 

Contract into the Trading System, whether directly or through an intermediary, and 

without any need for any further action, undertaking or agreement, a Participant and its 

Authorized Trader(s), and the Clients and Customers of any Participant agree: 

(1) TO BE BOUND BY, AND COMPLY WITH, THE SEF RULES AND 

OBLIGATIONS, AND APPLICABLE LAW, IN EACH CASE TO THE 

EXTENT APPLICABLE TO IT; 

(2) TO BECOME SUBJECT TO THE JURISDICTION OF THE SEF WITH 

RESPECT TO ANY AND ALL MATTERS ARISING FROM, RELATED TO, 

OR IN CONNECTION WITH, THE STATUS, ACTIONS OR OMISSIONS OF 

SUCH PERSON; 

(3) TO PERMIT THE SEF TO ACCESS ANY AND ALL INFORMATION 

RELEVANT TO ACTIVITIES RELATED TO THE SEF’S BUSINESS; 

(4) TO ASSIST THE SEF IN COMPLYING WITH ITS LEGAL AND 

REGULATORY OBLIGATIONS, COOPERATE WITH THE SEF AND THE 

CFTC IN ANY INQUIRY, INVESTIGATION, AUDIT, EXAMINATION OR 

PROCEEDING; AND 
 - 25 - 

(5) THAT THE SEF IS AUTHORIZED TO PROVIDE INFORMATION 

REGARDING PARTICIPANT TO THE CFTC OR ANY SELF-REGULATORY 

ORGANIZATION. 

(b) Any Person whose access to the SEF is suspended for any period remains subject to the 

SEF Rules, the Obligations and the SEF’s jurisdiction throughout the period of 

suspension. Any Person whose access to the SEF is revoked or terminated shall remain 

bound by the SEF Rules and Applicable Law, in each case to the extent applicable to it, 

and subject to the jurisdiction of the SEF with respect to any and all matters arising from, 

related to, or in connection with, the status, actions or omissions of such Participant prior 

to such revocation or termination. 

RULE 312. DESCRIPTION OF PARTICIPANT’S STATUS 

A Participant shall ensure that the form, content and context of any description of the 

Participant’s status on the SEF to Customers is not inconsistent with, and does not misrepresent, 

the Participant’s capacity on the SEF under the SEF Rules or the Participant’s registration, if 

any, under the CEA, or under any other Applicable Law. 

RULE 313. DEATH OR DISSOLUTION OF A PARTICIPANT 

All rights and privileges of a Participant terminate upon, and all obligations of a Participant shall 

survive, the death or incapacity of the Participant (if an individual) or the dissolution of the 

Participant (if an entity). 

RULE 314. WITHDRAWAL OF A PARTICIPANT 

(a) A Participant may withdraw from the SEF by submitting a written request to the SEF. 

All requests for withdrawal of Participant status will be reviewed by the SEF. Unless 

otherwise provided by written agreement Participant’s request to withdraw from the SEF 

shall be effective immediately upon receipt of a Participant’s request to withdraw. 

(b) When the SEF accepts the withdrawal of a Participant, all rights and privileges of such 

Participant terminate (including, without limitation, the Trading Privileges and ability to 

access the Trading System). The accepted withdrawal of a Participant shall not affect the 

rights of the SEF under the SEF Rules or relieve the former Participant of its Obligations 

under the SEF Rules, to perform all contracts involving any Contracts entered into by 

such, or to pay any of the SEF’s fees, costs, or charges incurred, before the withdrawal. 

Notwithstanding the accepted withdrawal of a Participant, the withdrawn Participant 

remains subject to the SEF Rules, the Obligations and the jurisdiction of the SEF for acts 

done and omissions made while a Participant, and must cooperate in any SEF Proceeding 

under Chapter 10 as if the withdrawn Participant were still a Participant. 

RULE 315. COMPLIANCE WITH THE COMMODITY EXCHANGE ACT 

All Participants, Authorized Traders of Participants and all Clients and Customers of any 

Participant that is an Account Manager shall comply with the provisions of the CEA and CFTC 

Regulations, including the filing of reports, maintenance of books and records, and permitting 
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inspection and visitation by duly authorized representatives of the CFTC or Department of 

Justice. 

RULE 316. ACCESS 

(a) Eligible Contract Participant Access. The SEF will provide its services to any Eligible 

Contract Participant with access to its markets and services that is impartial, transparent 

and applied in a fair and non-discriminatory manner; provided, however, that each 

Eligible Contract Participant complies with the SEF’s documentation and the eligibility 

requirements set forth in this Rulebook.

(b) ISV Access. The SEF will provide independent software vendor’s with access to its 

Trading System and data in a fair and non-discriminatory manner; provided, however, 

that each Independent Software Vendor shall comply with the SEF’s criteria governing 

such access. Such access shall be impartial and transparent. 

RULE 317 EXTERNAL EMPLOYEES 

(a) SEF employees who are employed by an entity other than the SEF (“External Entity”) 

and who perform work on behalf of the SEF (“External Employees”) are subject to an 

agreement setting the External Entity’s and the External Employees’ obligations that 

stem from the CEA, the CFTC’s regulations, and the SEF’s rules (“Secondment 

Agreement”). As set forth below, such agreement specifies that External Employees 

have obligations that are identical to those of SEF employees who are not employed by 

an External Entity. 

(1) Each Secondment Agreement requires the External Employee to follow the 

reporting structure of the SEF when performing his or her responsibilities for the 

SEF. 

(2) Each Secondment Agreement requires the External Employee to consent to 

jurisdiction in the United States. 

(3) Each Secondment Agreement specifies that the Commission has jurisdiction over 

the External Employees with respect to matters related to the SEF. 

(4) Each Secondment Agreement requires the External Entity to cooperate fully, 

including providing relevant documents, in any Commission investigation with 

respect to matters related to the SEF. 

(5) Each Secondment Agreement requires the External Employees to be bound by the 

SEF’s rules, policies, and procedures. 

(6) The SEF has submitted as part of its application either (1) signed copies of all 

Secondment Agreements or (2) a single copy of the full Secondment Agreement 

and a certification specifying which employees have signed the agreement. 
 - 27 - 

(b) Potential conflicts arising from the employment of External Employees will be handled in 

accordance with Rule 210. 
 - 28 - 

Chapter 4

RECORDKEEPING AND REPORTING 

RULE 401. REAL-TIME PUBLIC REPORTING 

(a) The responsibilities for real-time reporting pursuant to CFTC Regulation Part 43 will 

vary depending on whether or not the Transaction is executed on or pursuant to the SEF 

Rules. 

(b) For Transactions executed on the Trading System or pursuant to the SEF Rules, including 

Block Trades, the SEF will fulfill the real-time reporting obligations in CFTC Regulation 

Part 43. The SEF may enter into contractual relationships with third party service 

providers to transmit the Swap transaction and pricing data to a Swap Data Repository 

(c) The SEF will report all Swap Transactions and pricing data necessary to publicly 

disseminate such data, pursuant to CFTC Regulation Part 43 and Appendix A, to a 

registered SDR as soon as technologically practicable after execution of the publicly 

reportable Swap Transaction. The SEF shall provide the registered SDR with Swap 

Transaction and pricing data that includes an actual description of the underlying asset(s). 

(d) The SEF shall timestamp Swap Transaction and pricing data relating to a publicly 

reportable Swap Transaction with the date and time, to the nearest second of when the 

SEF (i) receives data from a Swap counterparty (if applicable); and (ii) transmits such 

data to the SEF for public dissemination. Records of all timestamps shall be maintained 

for a period of at least five years from the execution of the publicly reportable Swap 

Transaction. 

(e) The SEF shall have the authority to charge fees for the transmission of transaction and 

pricing data to a real-time disseminator for Transactions executed on the Trading System 

or pursuant to the rules of the SEF; provided, however, that such fees shall be equitable 

and non-discriminatory. 

(f) Likewise, any fees or charges assessed on a Reporting Entity or SEF by a SDR that 

accepts and publicly disseminates Swap Transaction and pricing data in real-time for the 

collection of such data shall be equitable and non-discriminatory. If such SDR allows a 

fee discount based on the volume of data reported to it for public dissemination, then 

such discount shall be made available to all Reporting Entities or registered SEF’s in an 

equitable and non-discriminatory manner. 

(g) Pursuant to CFTC Regulation § 43.4(f)(2), or any successor regulation thereto, the SEF 

will report the actual notional or principal amount for all Swaps executed on or pursuant 

to the rules of the SEF, including those of any Block Trade, to a registered SDR. 

However, this amount may be rounded or capped by such SDR prior to public 

dissemination. 
 - 29 - 

(h) Conversely, the actual notional or principal amount for any Block Trade executed 

pursuant to the rules of the SEF shall be reported to the SEF pursuant to the rules of the 

SEF. 

(1) Participant or Participant’s counterparty must transmit all data required to be 

reported under CFTC Regulation Part 43 for any Block Trades to the SEF as soon 

as technologically practicable after Execution, but in any event before the times 

set forth in CFTC Regulation § 43.5(d), or any successor regulation thereto. 

(2) The parties to a publicly reportable Swap Transaction that has a notional amount 

at or above the appropriate minimum block size shall notify the SEF, pursuant to 

the rules of the SEF, of its election to have the publicly reportable Swap 

Transaction treated as a Block Trade. The SEF pursuant to the rules of which a 

Block Trade is executed shall notify the SDR of such Block Trade election when 

transmitting Swap Transaction and pricing data to such SDR in accordance with 

CFTC Regulation § 43.3(b)(1). 

(i) The SEF will not disclose transaction or pricing data for any Transactions to the general 

public prior to the public dissemination of such data. However, the SEF may permit 

Participants and any market participants subscribing to the SEF for information services 

to access such data after the SEF transmits such data to a registered Swap Data 

Repository pursuant to Rule 401(g). 

(j) Real-time dissemination of Block Trades will be done in accordance with Rule 602. 

RULE 402. REGULATORY REPORTING 

(a) The SEF will only report Swap data to DTCC SDR. 

(b) The SEF will not modify its trading systems or protocols, its reporting to a Swap Data 

Repository (including reporting via a third-party service provider), nor its confirmation 

process pursuant to CFTC Regulation 37.6(b) in a way that reduces the amount of PET 

data it reports. 

(c) Creation Data. 

(1) CFTC Regulation Part 45, which sets forth the rules regarding regulatory 

reporting, requires Creation Data for any Transaction to be reported to a Swap 

Data Repository after Execution. Creation Data includes the Primary Economic 

Terms and Confirmation Data. 

(2) The SEF will use the facilities, methods, or data standards of the Swap Data 

Repository to which it reports all Swap data. 

(3) The SEF will report all data fields and Swap creation data to the Swap Data 

Repository as soon as technologically practicable after execution of the Swap 

Transaction, including all confirmation data and all PET data, as defined in CFTC 

Regulation § 45.1. 
 - 30 - 

(4) The SEF will transmit to both counterparties to the Swap, and to the derivatives 

clearing organization, if any, that will clear the Swap both: 

i. the identity of the Swap Data Repository to which required Swap creation 

data is reported by the SEF; and 

ii. the USI for the Swap created pursuant to CFTC Regulation § 45.5. 

(5) If both counterparties are Swap Dealers, or both counterparties are Major Swap 

Participants, or both counterparties are neither Swap Dealers nor Major Swap 

Participants that are financial entities as defined in CEA section 2(h)(7)(C), or 

both counterparties are neither Swap Dealers nor Major Swap Participants and 

neither counterparty is a financial entity as defined in CEA section 2(h)(7)(C), 

then the seller of risk in the currency which is first, when sorted alphabetically by 

ISO code, would bear responsibility to report the trade. For additional 

information, please see the ISDA Reporting Counterparty Rules, attached hereto 

as Rulebook Appendix A. 

(i) The SEF will use the information obtained pursuant to CFTC Regulation § 45.8(h)(1) to 

identify the counterparty that is the Reporting Entity pursuant to the CEA and CFTC Regulation 

§ 45.8, whenever possible. 

(6) For Transactions executed on the Trading System or pursuant to the SEF Rules, 

including Block Trades, the SEF will report the Primary Economic Terms and 

Confirmation Data to a Swap Data Repository. The SEF may enter into 

contractual relationships with third party service providers to transmit the Primary 

Economic Terms and Confirmation Data to such Swap Data Repository. 

(7) The SEF will generate and assign a USI for each Swap executed on or pursuant to 

the rules of the SEF at, or as soon as technologically practicable following, the 

time of execution of the Swap, and prior to the reporting of required Swap 

creation data. 

(8) The SEF will include in a single data field: 

i. The unique alphanumeric code assigned to the SEF by the Commission for 

the purpose of identifying the SEF with respect to USI creation; and 

ii. An alphanumeric code generated and assigned to the Swap by the 

automated systems of the SEF, which shall be unique with respect to all 

such codes generated and assigned by the SEF. 

(9) The SEF will transmit the USI electronically to: 

i. the Swap Data Repository to which the SEF reports required SSwap 

creation data for the Swap, as part of that report; 
 - 31 - 

ii. to each counterparty to the Swap, as soon as technologically practicable 

after execution of the Swap; and 

iii. to the DCO, if any, to which the Swap is submitted for clearing, as part of 

the required Swap creation data transmitted the DCO for clearing 

purposes. 

Participant or Participant’s counterparty must transmit all data required to be 

reported under CFTC Regulation Part 45 for any Block Trades to the SEF as soon 

as technologically practicable after Execution. 

(10) Participant must provide the SEF with sufficient information to enable the SEF to 

report all Creation Data, including without limitation: 

i. The Legal Entity Identifier of the Participant; 

ii. A yes/no indication of whether Participant is a Swap Dealer with respect 

to the product with respect to which the Order is placed; 

iii. A yes/no indication of whether Participant is a Major Swap Participant 

with respect to the product with respect to which the Order is placed. 

iv. A yes/no indication of whether Participant is a financial entity as defined 

in CEA section (2)(h)(7)(C); 

v. A yes/no indication of whether Participant is a U.S. Person; 

vi. If applicable, an indication that Participant will elect the End-User 

Exception for any Swap resulting from the order; 

vii. If the Transaction will be allocated: 

1. An indication that the Transaction will be allocated. 

2. The Legal Entity Identifier of the agent. 

3. An indication of whether the Swap is a post-allocation Swap. 

4. If the Swap is a post-allocation Swap, the Unique Swap Identifier 

of the original Transaction between the Reporting Entity and the 

agent. 

5. For pre-allocation Swaps, the Unique Swap Identifier in Swap 

creation data reported to the Swap Data Repository and transmitted 

to the Reporting Entity and to the agent. 

(11) The SEF shall have the authority to charge fees for any services provided 

pursuant to this Rule 402; provided, however, that such fees shall be equitable and 

non-discriminatory. 
 - 32 - 

(d) Continuation Data. 

(1) CFTC Regulation Part 45 requires Continuation Data to be reported to a Swap 

Data Repository during the life of any Transaction. Continuation Data includes 

life-cycle event data or state data, each as defined in CFTC Regulation § 45.1, or 

any successor regulation thereto, and Valuation Data. 

(2) Pursuant to CFTC Regulation § 45.4(b), Continuation Data for any cleared 

Transaction will be reported to the relevant Swap Data Repository by the relevant 

Derivatives Clearing Organization, except that the Reporting Entity will also be 

responsible for reporting Valuation Data to the relevant Swap Data Repository if 

the Reporting Entity is a Swap Dealer or Major Swap Participant. 

(3) Pursuant to CFTC Regulation § 45.4(c), Continuation Data for any uncleared 

Transaction, whether or not the Transaction is executed on a Swap Execution 

Facility, will be reported to the relevant Swap Data Repository by the Reporting 

Entity. 

(4) The SEF will have no obligation to fulfill any requirements to report Continuation 

Data for any Participant, including Valuation Data. 

(5) If the SEF fulfills any requirements to report Continuation Data for any 

Participant that is a Reporting Entity, such Participant will at all times remain 

responsible for the performance of any and all regulatory reporting requirements 

imposed on such Participant under CFTC Regulation Part 45. 

RULE 403. MAINTENANCE OF BOOKS AND RECORDS BY THE SEF 

(a) Pursuant to CFTC Regulation § 45.2(a), the SEF will keep full, complete, and systemic 

records together with all pertinent data and memoranda of all activities relating to the 

business of the SEF with respect to Swaps. Such records shall include, without 

limitation, all records required by CFTC Regulation Part 37. 

(b) All records required to be kept pursuant to CFTC Regulation § 45.2 or any other section 

of the CEA shall be retained with respect to each Swap throughout the life of the Swap 

and for a period of at least five years following the final termination of the Swap. 

(1) Each record required to be kept by the SEF shall be readily accessible via real 

time electronic access by the registrant throughout the life of the Swap and for 

two years following the final termination of the Swap, and shall be retrievable by 

the registrant within three business days through the remainder of the period 

following final termination of the Swap during which it is required to be kept. 

(c) The SEF will maintain: 

(i) A copy of the written policies and procedures, including the code of ethics and 

conflicts of interest policies adopted in furtherance of compliance with the Act and 

Commission regulations; 
 - 33 - 

(ii) Copies of all materials created in furtherance of the Chief Compliance Officer’s 

duties, including records of any investigations or disciplinary actions taken by the SEF; 

(iii) Complete and accurate books and records of all activities relating to the business of 

the SEF, including a complete audit trail for all Swaps executed on or subject to the rules 

of the SEF, confirmations produced pursuant to Rule 404, investigatory files, and 

disciplinary files, and all books and records required to be maintained pursuant to the 

CEA and CFTC Regulations. 

(d) Records may be kept in electronic form, or kept in paper form if originally created and 

exclusively maintained in paper form, so long as they are retrievable, and information in 

them is reportable. 

(e) Pursuant to CFTC Regulation § 45.2(h), all records required to be kept shall be open to 

inspection upon request by any representative of the CFTC, the United States Department 

of Justice, or the Securities and Exchange Commission, or by any representative of a 

prudential regulator as authorized by the CFTC. Copies of all such records shall be 

provided, at the expense of the SEF, to any representative of the CFTC upon request. 

Copies of records required to be kept shall be provided either by electronic means, in 

hard copy, or both, as requested by the CFTC, with the sole exception that copies of 

records originally created and exclusively maintained in paper form may be provided in 

hard copy only. 

(f) The SEF shall include the USI for all such Swaps in all records and all Swap data 

reporting concerning that Swap, from the time the USI is created as provided in CFTC 

Regulation § 45.5, throughout the existence of the life of the Swap and for as long as any 

records are required by the CEA or Commission regulations to be kept, regardless of any 

lifecycle events or any changes to state data concerning the Swap, including, without 

limitation, any changes with respect to the counterparties to or the ownership of the 

Swap. 

(g) The SEF shall also include each counterparty to any Swap executed on or pursuant to the 

rules of the SEF in all recordkeeping and all Swap data reporting pursuant to CFTC 

Regulation 45 using a single LEI. 

(h) When a UPI and product classification system has been designated by the Commission, 

the SEF will use the designated UPI and product classification system in all 

recordkeeping and Swap data reporting pursuant to CFTC Regulation 45. 

(i) Before a UPI and product classification system has been designated, the SEF will use the 

internal product identifier or product description used by the Swap Data Repository to 

which a Swap is reported in all recordkeeping and Swap data reporting pursuant to CFTC 

Regulation 45. 

RULE 404. TRADE CONFIRMATIONS 

(a) The SEF will confirm each Transaction at the same time as execution of the Transaction. 

The economic terms specific to the Transaction agreed to by the Participants on the SEF 
 - 34 - 

shall be reflected by the SEF in a written communication (the “Trade Confirmation”) 

sent to the applicable Participants. 

(1) With respect to an uncleared Transaction: 

i. The Trade Confirmation, together with the Terms Incorporated by 

Reference shall, taken together, comprise all of the terms of such 

Transaction and constitute a confirmation for purposes of CFTC 

Regulation § 37.6(b) and shall be deemed to be the “SEF Confirmation.” 

ii. In satisfaction of the obligations imposed on the SEF under CFTC 

Regulation § 37.6(b): (i) each Trade Confirmation is deemed to 

incorporate the Terms Incorporated by Reference set forth in this Rule 

404, and (ii) the participants hereby agree that the provisions of Rule 

404(b)(1)(iii) shall govern any conflicting terms. 

iii. Pursuant to NAL 16-25 (“Trade Confirmation NAL”), expiring March 

31, 2017, the Trade Confirmation will state that the terms of the 

confirmation legally supersede any contradictory terms in the underlying 

previously-negotiated freestanding agreements. 

iv. In the event of any conflict between (x) the Trade Confirmation and (y) 

the Terms Incorporated by Reference, the Trade Confirmation shall 

prevail to the extent of any inconsistency. 

v. The SEF will request from Participants any and all underlying previouslynegotiated freestanding agreements on request from the CFTC, and the 

SEF will furnish such documents to the CFTC as soon as they are 

available. 

vi. Participant agrees that all Terms Incorporated by Reference and any all 

freestanding agreements incorporated by reference shall be made available 

to the SEF and CFTC staff upon request within a reasonable period of 

time. 

(2) For a cleared Transaction, the Trade Confirmation shall constitute a confirmation 

for purposes of CFTC Regulation § 37.6(b) and shall be deemed to be the “SEF 

Confirmation.” 

(b) A SEF Confirmation shall be deemed to be a binding and fully enforceable confirmation 

of the Transaction between such parties. 

(c) A SEF Confirmation shall be deemed to be fully, and mutually executed by the parties, 

“signed” and “in writing” for any and all purposes, and the resulting SEF Confirmation 

shall constitute the controlling confirmation with respect to the applicable Transaction. 

(d) Participant agrees not to contest the legally binding nature or enforceability of any 

Transaction entered into or negotiated on the Trading System and further agrees not to 
 - 35 - 

contest or assert any defense to the validity or enforceability of any Transaction on the 

basis that such Transaction was executed or negotiated electronically or on the basis of 

any law requiring agreements to be in writing or to be signed by the parties. Participant 

hereby waives any and all right to assert any such claims. 

(e) Participant agrees to use commercially reasonable efforts to promptly review all SEF 

Confirmations and to reconcile any data or other discrepancies. Any discrepancies, errors 

or omission with respect to SEF Confirmations shall be resolved as provided in the SEF 

Rules. 

RULE 405. AUDIT TRAIL PROGRAM 

(a) The SEF’s audit trail permits it to immediately track customer orders from the time of 

receipt through fill, allocation, or other disposition, and includes both order and trade 

data. Audit trails are captured and maintained throughout the life cycle of a customer 

order. Data fields present on customer orders, trades for matches, fill reports are stored in 

a proprietary format. Timestamps are assigned down to the millisecond for all order 

events including submission, cancel/replace, partial fill, fill, cancels and allocations. 

This data can be viewed either from FTSEF’s AdminMonitor application or in plain text 

format. Activity can be looked up using the AdminMonitor in real-time or for previous 

days. Audit trails are kept for all types of execution, via Streams, RFQ or CLOB. 

(b) The audit trail program includes all original source documents and an electronic 

Transaction history database. Original source documents include unalterable, 

sequentially-identified records on which trade execution information is originally 

recorded, whether recorded manually or electronically. The electronic Transaction 

history database (referred to as the “FTSEF Transaction Database”) includes a history of 

all, requests for quotes, orders, and trades entered into the Trading System, including all 

orders and trades, and order modifications and cancellations. An adequate Transaction 

history database also includes: 

(1) All data that is input into the trade entry or matching system for the Transaction to 

match and clear; 

(2) Customer type indicator code; 

(3) Timing and sequencing data adequate to reconstruct trading; and 

(4) Identification of each account to which fills are allocated. 

(c) Pursuant to NAL 15-68 (“Post-Trade Allocation NAL”), expiring November 15, 2017, 

participants must provide post-trade allocation information to the SEF for particular 

trades, if the SEF, at the request of the CFTC or otherwise, requests such information. 

(d) In the course of a trade practice surveillance or market surveillance investigation into any 

trading activity involving post trade allocations, upon such request pursuant to condition 

(c) above, the SEF will ascertain whether a post-trade allocation was made, and if so, the 
 - 36 - 

SEF will request, obtain and review the post-trade allocation information from a 

Participant as part of its investigation. 

(e) The audit trail program also includes electronic analysis capability with respect to all 

audit trail data in the Transaction history database. Such electronic analysis capability 

ensures that the SEF has the ability to reconstruct, requests for quotes, orders, and trades, 

and identify possible trading violations with respect to both customer and market abuse. 

The names of the systems that the SEF uses for its electronic analysis capability are the 

FTSEF Real-time Alert System and the FTSEF Automated Trade Surveillance System. 

(f) The SEF’s audit trail program safely stores all audit trail data retained in its Transaction 

history database. Such safe storage capability includes the capability to store all data in 

the database in a manner that protects it from unauthorized alteration, as well as from 

accidental erasure or other loss. Data is retained in accordance with the recordkeeping 

requirements of CFTC Regulation Part 37, Core Principle 10 for Swap execution 

facilities and the associated regulations in CFTC Regulation Part 37, Subpart K. 

(g) The SEF will enforce its audit trail and recordkeeping requirements through at least 

annual reviews of all Participants to verify their compliance with the SEF’s audit trail and 

recordkeeping requirements. Such reviews will include, but are not limited to, reviews of 

randomly selected samples of front-end audit trail data for order routing systems; a 

review of the process by which user identifications are assigned and user identification 

records are maintained; a review of usage patterns associated with user identifications to 

monitor for violations of user identification rules; and reviews of account numbers and 

customer type indicator codes in trade records to test for accuracy and improper use. 

RULE 406. MONITORING OF TRADING 

The SEF will monitor trading on the Trading System in order to prevent manipulation, price 

distortion, and disruptions of the delivery or cash settlement process through surveillance, 

compliance, and disciplinary practices and procedures, including through the real-time 

monitoring of trading, and comprehensive trade reconstruction. 

RULE 407. USE OF PARTICIPANT PROPRIETARY DATA 

The SEF shall not use for business or marketing purposes any Proprietary Data or Personal 

Information it collects or receives, from or on behalf of any person, for the purpose of fulfilling 

its regulatory obligations; provided, however, that SEF may use such data or information for 

business or marketing purposes if the Person from whom it collects or receives such data or 

information clearly consents in Writing to the SEF’s use of such data or information in such 

manner. The SEF shall not condition access to its market(s) or market services on a Person’s 

consent to the SEF’s use of Proprietary Data or Personal Information for business or marketing 

purposes. The SEF, where necessary for regulatory purposes, may share such data or 

information, with one or more Swap Data Repositories, Swap Execution Facility, or Contract 

Markets registered with the CFTC. 
 - 37 - 

RULE 408. TIMELY PUBLICATION OF TRADING INFORMATION 

(a) The SEF will publish trading information as required by CEA Section 5h(f)(9) and Parts 

16 and 37 of CFTC Regulations. 

(b) In making information available to the general public pursuant to CFTC Regulation 

§37.900, the SEF ensures that such information can be accessed by visitors to the SEF’s 

website without the need to register, log in, provide a user name or obtain a password. 

(c) The SEF’s website can be accessed at: www.ftsef.com. 

RULE 409. ERRORS AND OMISSIONS 

(a) Pursuant to CFTC Regulation 45.14(a), each registered entity and Swap counterparty that 

is required to report Swap data to a Swap Data Repository, to any other registered entity 

or Swap counterparty, or to the Commission shall report any errors and omissions in the 

data so reported as soon as technologically practicable after discovery of any such error 

or omission. 

(b) If a Reporting Entity to a Swap becomes aware of an error or omission in the Swap 

Transaction or pricing data which was reported by the SEF with respect to such Swap, 

either through its own initiative or through notice by the other party to the Swap, the 

Reporting Entity will promptly submit corrected data to the SEF. 

(c) (b) If the SEF becomes aware of an error or omission in the Swap Transaction or 

pricing data reported with respect to such Swap, or receives notification from the 

Reporting Entity, the SEF will promptly submit corrected data to the same registered 

Swap Data Repository. 

(d) (c) The SEF will not submit or agree to submit a cancellation or correction for the 

purpose of re-reporting Swap Transaction and pricing data in order to gain or extend a 

delay in public dissemination of accurate Swap Transaction or pricing data or to 

otherwise evade the reporting requirements of CFTC Regulation Part 43. 

(e) (d) Pursuant to NAL 15-24 (“DCO Clerical Error NAL”), expiring June 15, 2016, 

where an operational or clerical error or omission is not discovered until after a Swap has 

been cleared, the SEF may permit a prearranged trade between the original parties that 

offsets the Swaps carried on the DCO’s books, without that trade having been executed 

pursuant to the methods required in CFTC Regulations 37.9(a)(2) and 38.500. 

(f) (e) After a trade has been rejected for clearing, the SEF will permit a new trade, with 

terms and conditions that match the terms and conditions of the original trade, other than 

any such error and time of execution, to be submitted for clearing without having been 

executed pursuant to methods set forth in CFTC Regulations 37.9(a)(2) or 38.500. 

(g) (f) For Swaps rejected for non-credit reasons, the new trade must be executed on the 

SEF and submitted for clearing as quickly as technologically practicable after receipt of 

notice and the rejection by the DCO to the clearing members, but, in any event, no later 
 - 38 - 

than one hour from the issuance of the notice. For erroneous cleared Swaps, the trade to 

offset the Swaps carried on the DCO’s books and the new transaction that corrects the 

errors in the original transaction must be executed and submitted for clearing no later 

than three days after the erroneous cleared Swap was executed. 

(h) (g) If the SEF is able to determine how to correct an error, the SEF will execute the 

new trades without obtaining consent from the counterparties. If the SEF cannot 

determine how to correct an error, the SEF may either not fix the error, or it may seek 

guidance on how to address the error from the counterparties. Any such guidance may 

not be implemented without consent from both counterparties. 
 - 39 - 

Chapter 5

PARTICIPANT OBLIGATIONS 

RULE 501. DUTIES AND RESPONSIBILITIES OF PARTICIPANTS 

(a) Each Participant shall, its Authorized Traders and Clients or Customers, if applicable 

shall: 

(1) Ensure the SEF’s Trading System is used in a responsible manner and not for any 

improper purpose; 

(2) Ensure the Trading System is used only to conduct SEF Activity; 

(3) Ensure all SEF Activity is conducted in a manner consistent with SEF Rules and 

Obligations; 

(4) Comply with all SEF Rules and Obligations and act in a manner consistent with 

each SEF Rule and Obligation; 

(5) Observe high standards of integrity, market conduct, commercial honor, fair 

dealing, and just and equitable principles of trade while conducting or attempting 

to conduct any SEF Activity, or any aspect of any business connected with or 

concerning the SEF; 

(6) not mislead or conceal any material fact or matter in any dealings or filings with 

the SEF or in response to any SEF Proceeding; 

(7) employ practices to monitor and enforce compliance with risk limits; and 

(8) keep, or cause to be kept, complete and accurate books and records, including, 

without limitation, all books and records of its SEF Activity and his or her activity 

in the underlying commodity and related derivatives markets, and all books and 

records required to be maintained pursuant to the CEA, the CFTC Regulations or 

the SEF Rules, for the period required by Applicable Law, and make such books 

and records available for inspection by a representative of the SEF or the CFTC. 

(b) Each Participant shall: 

(1) be responsible for promptly informing the SEF of any material changes to the 

eligible criteria information provided to the SEF by the Participant. 

(2) be fully liable for all trading losses, all Orders, all Transactions in Contracts 

effected by such Participant, all Transactions effected on the Trading System and 

for any use of the Trading System made by Participant or the Participant’s 

Authorized Traders, and all trades even if the Orders received via the Trading 

System : (1) were entered as a result of a failure in the security controls and/or 
 - 40 - 

credit controls, other than due to the gross negligence of the SEF; or (2) were 

entered by an unknown or unauthorized user; 

(3) be responsible for promptly informing the SEF of any material changes to the 

information provided to the SEF by the Participant pursuant to Rule 301. 

RULE 502. REQUIRED NOTICES 

(a) Each Participant shall immediately notify the Compliance Department upon becoming 

aware of any of the following events: 

(1) any material change to the contact information provided to the SEF; 

(2) any damage to, or failure or inadequacy of, the systems, facilities or equipment of 

the Participant to effect Transactions pursuant to the SEF Rules or to timely 

perform the Participant’s financial obligations under or in connection with 

Transactions; 

(3) any refusal of admission, or involuntary withdrawal of the Participant for 

membership in, any Self-Regulatory Organization, Contract Market or 

Derivatives Clearing Organization; 

(4) any expulsion, suspension or fine in excess of $25,000, cease and desist order, 

denial of trading privileges, censure or other sanction or remedy (whether through 

an adverse determination, voluntary settlement or otherwise) imposed on the 

Participant by any Self- Regulatory Organization, Contract Market or Derivatives 

Clearing Organization registered with the CFTC or, with respect to SEF Activity, 

any relevant Government Agency; 

(5) any indictment or conviction of, or any confession of guilt or plea of guilty or 

nolo contendere by, the Participant (or, if the Participant is an entity, by any of its 

principals or senior officers) for any felony or misdemeanor involving, arising 

from, or related to, the purchase or sale of any commodity, Swap, Futures 

contract, option, security, securities futures product or other financial instrument, 

or involving or arising from fraud or moral turpitude; 

(6) the Participant becoming the subject of a petition for bankruptcy;

(7) the appointment of a receiver, trustee or administrator for the Participant; 

(8) the presentment of a petition, or the passing of a resolution, for the winding-up of 

Participant; 

(9) the commencement of proceedings for the dissolution of Participant; or 

(10) the occurrence of an event of insolvency with respect to the Participant. 
 - 41 - 

RULE 503. INSPECTIONS BY THE SEF 

(a) The SEF shall have the right with such prior reasonable advance notice as is practicable 

under the circumstances, in connection with determining whether all SEF Rules and 

Obligations are being, will be, or have been complied with by the Participant, Customer, 

Client or Clearing Member to: 

(1) inspect the books and records of the Participant, Customer, Client or Clearing 

Member in connection with SEF Activity, wherever located; 

(2) inspect systems, equipment and software of any kind operated by the Participant, 

Customer, Client or Clearing Member in connection with SEF Activity and any 

data stored in any of the systems or equipment related to SEF Activity; or 

(3) copy or reproduce any data to which the SEF has access under this Rule.

(b) Such books and records, systems, equipment, software and data shall be made available 

to the SEF during regular business hours and the SEF and the Regulatory Services 

Provider agrees to adhere to Participant, Customer, Client or Clearing Member’s 

reasonable logical and physical access and security procedures. 

(c) The Compliance Department may examine (periodically or on a particular occasion) the 

books and records of any Participant or any Customer or Client of a Participant that relate 

to SEF Activity. 

(d) The SEF shall provide information in its possession to the CFTC upon request. The SEF 

shall also share information with other regulatory organizations, data repositories, and 

reporting services as required by the CFTC or as otherwise necessary and appropriate to 

fulfill its self-regulatory and reporting responsibilities. Appropriate information-sharing 

agreements can be established with such entities or the CFTC can act in conjunction with 

the SEF to carry out such information sharing. 

RULE 504. MINIMUM REQUIREMENTS FOR PARTICIPANTS 

(a) Each Participant and each Participant’s Authorized Traders shall comply with the 

provisions of Applicable Law, including but not limited to the rules and regulations of 

any Government Agency that are imposed on a Participant relating to minimum financial 

requirements (if applicable), reporting and recordkeeping requirements, and any 

mandatory clearing requirements. 

(b) Transactions executed on or through the Trading System must be cleared through a 

CFTC-registered Derivatives Clearing Organization unless: 

(1) The Transaction is exempted from clearing under Section 2(h)(7) of the CEA or 

another applicable exemption under CFTC Regulations; or 

(2) The Transaction is a Permitted Transaction. 
 - 42 - 

(c) When a Swap Dealer or Major Swap Participant enters into or facilitates a Swap that is 

subject to the mandatory clearing requirement of CEA Section 2(h), the Swap dealer or 

major Swap participant shall be responsible for compliance with the mandatory trading 

requirement under section 2(h)(8) of the Act. 

(d) For Transactions that are executed on or subject to the rules of the SEF, if such 

Transaction is not cleared by a Derivatives Clearing Organization and is not required to 

be cleared, each Participant party must have entered into an agreement governing the 

execution and settlement of the Swap with the prospective counterparty to such Swap 

prior to placing such Order. 

(e) A copy of any notice or written report that a Participant is required to file with the CFTC 

pursuant to CFTC Regulation § 1.12, or any successor regulation thereto, shall be 

concurrently provided to the SEF. 

(f) A Participant who violates any CEA provision or CFTC Regulation referred to in this 

Rule 504 shall be deemed to have also violated this Rule 504. 

RULE 505. PARTICIPANT BOOKS AND RECORDS 

(a) Each Participant must maintain or cause to be maintained records for all books and 

records required to be maintained in accordance with Applicable Law, including the SEF 

Rule 501(a)(8). 

(b) Bunched Orders must be allocated and recorded in accordance with CFTC Regulation 

§ 1.35(b)(5), or any successor regulation thereto, and the NFA’s Interpretative Notice 

related to Compliance Rule 2-10 or any successor regulations. 

(c) As required by CFTC Regulation § 37.404, each Participant must keep records of its 

trading on the SEF, including records of its activity in the commodity underlying any 

Swap and trading on related derivatives markets and make such records available, upon 

request, to the SEF and the CFTC. 

RULE 506. CONFIDENTIALITY OF FINANCIAL AND OTHER INFORMATION 

All information and data obtained or received by the Compliance Department from inspections 

of accounting and other records, quarterly balance sheets and declarations or reports on financial 

condition will be treated as confidential by the SEF; however, this Rule 506 does not supplant 

Rule 210, Rule 1003(c), Rule 1201(e), or any other requirement of Applicable Law. 

RULE 507. AUTHORITY TO REPORT 

Whenever the SEF learns that Participant has failed to file any notice or written report required 

by CFTC Regulation § 1.12, or any successor regulation thereto, the SEF will immediately report 

this failure to the CFTC. The SEF may impose such conditions or restrictions on the business 

and operations of Participant that has failed to file any such notice or written report as the SEF 

may deem necessary or appropriate for the protection of Customers, other Participants, or the 

SEF. 
 - 43 - 

RULE 508. BROKERS AND ACCOUNT MANAGERS 

(a) No Participant acting as a broker or Account Manager shall carry an account for a 

Customer or enter an Order in the name of or on behalf of a Client unless the Participant 

has entered into a written agreement with the Customer or Client containing such terms 

as may from time to time be prescribed in these SEF Rules, including without limitation, 

those rules contained in SEF Rule 301(b). 

(b) No Participant shall engage in soliciting or accepting an Order for the Contract for a 

Participant, Customer or Client unless the Participant has entered into a written 

agreement with the Participant, Customer or Client obtaining such terms as may from 

time to time be prescribed in these SEF Rules. 

RULE 509. TREATMENT OF CUSTOMER FUNDS AND SECURITIES 

Each Participant that is required to be registered with any Government Agency, including the 

CFTC and the U.S. Securities and Exchange Commission or any Self-Regulatory Organization, 

shall comply with the provisions of Applicable Law, including but not limited to the rules and 

regulation such Government Agency imposes on a Participant relating to the treatment of 

Customer funds and the maintenance of books and records with respect thereto. Any Participant 

that violates any of the aforementioned Government Agency Regulations shall be deemed to 

have violated this Rule 509. 

RULE 510. DISCLOSURE REQUIREMENTS; KNOW YOUR COUNTERPARTY 

REQUIREMENTS 

(a) Each Participant must comply with all disclosure requirements set forth in applicable 

CFTC Regulations, if any. Any such disclosure may be combined with a disclosure 

regarding the existence of financial interests held by the Participant in the SEF or any 

other Swap Execution Facility. 

(b) Participants that are Swap Dealers or Major Swap Participants shall verify that each 

potential counterparty is an Eligible Contract Participant with respect to each Swap as 

provided in Subpart H of Part 23 of the CFTC Regulations, or any successor regulations 

related to external business conduct standards for Swap Dealers and Major Swap 

Participants. 

(c) Participants that are Futures Commission Merchants must verify that each of their 

Customers are Eligible Contract Participants. 

(d) Participants that are Account Managers must verify that each of their Clients is Eligible 

Contract Participants. 

RULE 511. INFORMATION REGARDING ORDERS 

(a) The SEF will make information regarding Orders (including prices bid or offered), trades 

and any other matters it may deem appropriate available to Participants and other Persons 

at such times and in such manner (whether through the Trading System, a ticker, financial 
 - 44 - 

information services or otherwise) as it may consider necessary or advisable from time to 

time. 

(b) Each Participant or other Person receiving any such information through the Trading 

System may redistribute such information only to such extent and in such manner as may 

be permitted by the SEF from time to time. 

RULE 512. CUSTOMER TYPE INDICATOR (CTI) CODES 

(a) Each Participant must identify each Transaction executed on the Trading System on the 

record of Transactions submitted to the SEF with the correct CTI Code. The CTI Codes 

are as follows: 

(1) CTI 1- Transactions initiated and executed by a Participant for his own account, 

for an account he controls or for an account in which he has ownership or 

financial interest. 

(2) CTI 2- Transactions executed for the proprietary account of a Clearing Member or 

non-Clearing member firm. 

(3) CTI 3- Transactions where an individual Participant or Authorized Trader 

executes for the personal account of another individual Participant, for an account 

the other individual Participant controls or for an account in which the other 

individual Participant has ownership or financial interest. 

(4) CTI 4- Any Transaction not meeting the definition of CTI 1, 2 or 3. 
 - 45 - 

Chapter 6

TRANSACTIONS SUPPORTED 

RULE 601. GENERAL 

(a) The SEF supports both Permitted Transactions and Required Transactions through the 

execution methods detailed in Chapter 7. 

(b) Required Transactions shall be submitted for clearing according to Rule 801 unless they 

are eligible for the End-User Exception and one Counterparty properly elects such EndUser Exception. 

(c) If one or both of the counterparties to a Transaction elects to use the End-User Exception 

detailed in Rule 801, the party electing to use the End-User Exception must notify the 

SEF of such election as required by SEF Rule 402(c)(5), and the Transaction shall be 

treated as a Permitted Transaction. 

RULE 602. BLOCK TRADES 

(a) The SEF will only allow Block Trades that are executed on the SEF’s RFQ system, 

pursuant to, and subject to the conditions of, NAL 15-60 (“Block Trade NAL”), expiring 

November 15, 2016. 

(b) The SEF shall set the minimum block sizes for all Swaps listed on the Trading System, 

which shall be equal to or greater than the appropriate minimum block sizes established 

by CFTC Regulation § 43.6, Appendices B, D, E and F. 

(c) The SEF will publish the list of contracts for which it permits and facilitates the bilateral 

trading and execution of Block Trades on its website. 

(d) The following shall govern Block Trades: 

(1) Each counterparty to a Block Trade (or a Person, Customer or Client on whose 

behalf a Block Trade is executed) must be an Eligible Contract Participant. 

(2) Parties to a Swap of a large notional value must elect to have the Swap treated as 

a Block Trade in order for the Swap to constitute a Block Trade pursuant to this 

Chapter 6. 

(3) A Block Trade must be for a quantity that is at or in excess of the appropriate 

minimum block size, as defined by FTSEF. Orders may not be aggregated for 

different accounts in order to achieve the minimum Transaction size unless done 

by a Person who: 

(a) Is either: (i) a commodity trading advisor registered under Section 4n of 

the CEA, or exempt from registration under the CEA, or a principal 

thereof, who has discretionary trading authority or directs client accounts, 
 - 46 - 

(ii) is an investment adviser who has discretionary trading authority or 

directs client accounts and satisfies the criteria of CFTC Regulation 

§ 4.7(a)(2)(v), or (iii) is a non-U.S. person, as defined in CFTC rules, 

regulations and/or interpretations who performs a similar role or function 

as the persons described in Rule 602(d)(3)(a)(i) or (ii) and is subject as 

such to foreign regulation; and 

(b) Has more than $25,000,000 in total assets under management. 

(4) A broker for a Customer shall not execute any order by means of a Block Trade 

for a Customer unless such Customer has specified that the order be executed as a 

Block Trade. Such instruction or consent may be provided in the power of 

attorney or similar document by which the Customer provides the broker with 

discretionary trading authority or the authority to direct the trading in its account. 

(5) The price at which a Block Trade is executed must be fair and reasonable in light 

of (i) the size of the Block Trade, (ii) the prices and sizes of other Transactions in 

the same Contract at the relevant time, (iii) the prices and sizes of Transactions in 

other relevant markets at the relevant time, and (iv) the circumstances of the 

markets or the Participants to the Block Trade. 

(6) One of the counterparties or the broker of one of the Persons party to the Block 

Trade must ensure that each Block Trade is reported to the SEF within the time 

limit set forth in Rule 401. 

(7) Block Trades must be reported to the SEF in accordance with the SEF approved 

reporting method and must include all of the data required by CFTC Regulations 

Part 43 and 45. The SEF will transmit Block Trade Transaction and pricing data 

to a Swap Data Repository as soon as technologically practicable after receipt of 

such data. CFTC Regulations prohibit any Swap Data Repository from publicly 

disseminating this data until the expiration of certain time delays as specified in 

CFTC Regulation § 43.5, or any successor regulation thereto. 

(8) An executed Block Trade must become a part of the SEF’s audit trail. 

(9) Block Trades will not be executed on the SEF’s Order Book functionality, as 

defined in CFTC Regulation § 37.3(a)(3). 

(10) Pursuant to Block Trade NAL, each cleared Block Trade must comply with the 

requirements set forth in the Block Trade definition in CFTC Regulation § 43.2. 

Specifically, the Block Trade must: 

i. Involve a Swap that is listed on a registered SEF; 

ii. Be executed pursuant to the SEF’s rules and procedures; 

iii. Meet the notional or principal amount at or above the appropriate 

minimum block size applicable to the Swap; and 
 - 47 - 

iv. Be reported to a Swap Data Repository pursuant to the SEF’s rules and 

procedures and the CFTC’s rules and regulations. 
 - 48 - 

Chapter 7

EXECUTION METHODS 

RULE 701. GENERAL 

Transactions executed on the SEF must be executed either on the SEF Central Limit Order Book 

(“CLOB”) or the SEF RFQ Trading System (“RFQ Trading System “) pursuant to this chapter. 

RULE 702. CENTRAL LIMIT ORDER BOOK (“CLOB”) 

(a) The CLOB is an anonymous electronic price-time priority central limit order book in 

which Participants trade against firm quotes posted by other Participants. Quotes with 

better prices are placed ahead of others with worse prices. Quotes that are entered before 

other quotes take priority when multiple quotes have the same price. 

(b) Orders submitted as Required Transactions can only match with quotes for Required 

Transactions posted by Participants who have common clearing arrangements. Both 

counterparties must have available credit. 

(c) Orders submitted as Permitted Transactions can only match with quotes for Permitted 

Transactions posted by Participants who have bilateral settlement arrangements with the 

order submitters and where credit is available. 

RULE 703. REQUEST FOR QUOTE TRADING SYSTEM (“RFQ TRADING 

SYSTEM”) 

(a) Both Required and Permitted Transactions may be negotiated by Participants and their 

Counterparties by use of the RFQ Trading System. Through the RFQ Trading System, 

Participants can transmit a request for a quote (“RFQ”) to buy or sell a specific 

instrument to other Participants, to which all such Participants may respond. An RFQ 

can be sent as a request for quote. 

(b) An RFQ for a Required Transaction must be submitted to no less than the Required 

Number of other Participants who are not affiliated with or controlled by the RFQ 

requester and are not affiliated with or controlled by each other. 

(1) Counter requests on RFQs must go to minimum of 3 unaffiliated counterparties. 

(c) An RFQ for a Required Transaction may be sent to any or all Counterparties with whom 

the Participant has a common clearing arrangement and where both counterparties have 

available credit. 

(d) An RFQ for a Permitted Transaction may be sent to any Counterparty with whom the 

Participant has an agreement governing the execution and settlement of Swaps. 
 - 49 - 

(e) Negotiation Process 

(1) The negotiation process on the RFQ Trading System is initiated by entry of an 

RFQ for specific value dates and tenors by an RFQ requester on the Trading 

System. An RFQ acts as a non-binding solicitation of a non-binding quote and 

provides essential economic terms sufficient for any RFQ requester’s 

counterparty to formulate a responsive quote. 

(2) In response to an RFQ, any potential counterparty receiving an RFQ may reply 

with a responsive quote. For Required Transactions, any firm bids or offers 

resting on the CLOB will be communicated to the RFQ requester along with any 

responsive quotes. 

(3) In the event that a responsive quote is acceptable to the requestor, the requestor 

can accept the quote and a request to deal will be sent to the responder. If the 

responder accepts the request, a legally enforceable Transaction arises and the 

RFQ process concludes. If the responder rejects the request, the RFQ process 

concludes and no Transaction arises. 

(4) For a Required Transaction, if any resting bid or offer from the CLOB is 

acceptable to the RFQ requester, the RFQ requester may issue an acceptance and 

if the match is completed on the CLOB, a legally enforceable Transaction arises 

and the RFQ process concludes. 

RULE 704. LEGAL CERTAINTY FOR SEF TRADES. 

A Transaction entered into on or pursuant to the SEF Rules shall not be void, voidable, subject to 

rescission, otherwise invalidated, or rendered unenforceable as a result of: 

(a) a violation by the SEF of the provisions of Section 5h of the CEA or CFTC Regulations; 

(b) 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 

(c) any other proceeding the effect of which is to: 

(1) alter or supplement a specific term or condition or trading rule or procedure; or 

(2) require the SEF to adopt a specific term or condition, trading rule or procedure, or 

to take or refrain from taking a specific action. 
 - 50 - 

Chapter 8

MANDATORY CLEARING 

RULE 801. GENERAL 

(a) All Participants must clear all Contracts which are required to be cleared under CEA 

Section 2(h)(1) and CFTC Regulation § 50.4, or any successor regulation thereto; 

provided, however, that the clearing requirement in this Rule 801 will not apply if at least 

one Participant party to a Transaction is an End-User and that party elects the End-User 

Exception. 

(b) Each Participant shall be responsible for determining whether any Swap it enters into is 

subject to the mandatory clearing requirements of Section 2(h)(1) of the Commodity 

Exchange Act. 

(c) Each Participant shall be responsible for determining whether an exemption from 

clearing is available, and, if Participant and its counterparty opt against clearing pursuant 

to an applicable exemption, Participant shall make all necessary elections and provide all 

necessary notifications to the SEF to establish that the Swap is exempted from the 

clearing requirement; provided, however, that the SEF shall have no responsibility for 

evaluating the validity of such exemption, and no conclusion as to such exemption should 

be made as a result of the SEF allowing a Transaction to proceed on the Trading System. 

(d) Each Participant will only execute a Swap subject to the mandatory clearing requirement 

on the Trading System if Participant has delivered, or causes to be delivered, to the SEF 

all information necessary to permit the SEF to submit the Swap for clearing. Each 

Participant, that is not a direct Clearing Member, executing Required Transactions or 

executing Permitted Transactions that are intended to be cleared must have in place 

appropriate arrangements for the clearance of Swaps executed on the SEF by the 

Participant through one or more Clearing Members, and provide, or cause to be provided, 

appropriate evidence thereof to the SEF pursuant to the provisions of the SEF Rules. 

(e) All Participants that are not direct Clearing Members executing Required Transactions or 

executing Permitted Transactions that are intended to be cleared must be guaranteed by a 

Clearing Member that assumes responsibility for clearing any Transactions executed by 

the Participant on the SEF that have satisfied the Clearing Member’s credit limits and risk 

controls. Such guarantee is effective only until such time that the Clearing House accepts 

the Transaction. With respect to Transactions given up to other Clearing Members, such 

guarantee is effective only until such time that the other Clearing Member accepts the 

trade. A trade given up to another Clearing Member will be deemed to have been 

accepted by such Clearing Member if the trade is not rejected by the close of business on 

the business day that the trade is executed. The acceptance of a trade by a Clearing 

Member shall not relieve any Participant or Clearing Member of the duty to act in 

accordance with the SEF Rules. 

(f) Clearing Members that are Participants shall assist the SEF in any investigation into 

potential violations of the SEF Rules or the CEA which occur with respect to a 
 - 51 - 

Participant guaranteed by such Clearing Member or a Customer of such Clearing 

Member. Such assistance must be timely and may include, but not be limited to, 

requiring any Participant or Customer to produce documents, to answer questions from 

the SEF, and/or to appear in connection with an investigation. Upon request by the SEF, 

Clearing Members that are Participants shall suspend or terminate a Participant’s or 

Customer’s access if the SEF determines that the actions of the Participant or Customer 

threaten the integrity or liquidity of any Contract or violate any the SEF Rule or the CEA, 

or if the Participant or Customer fails to cooperate in an investigation. 

(g) If a Clearing Member that is a Participant has actual or constructive notice of a violation 

of the SEF Rules in connection with the use of the SEF by a Participant or Customer for 

which it has authorized a direct connection and the Clearing Member fails to terminate 

the connection, the Clearing Member may be found to have committed an act detrimental 

the SEF. 

RULE 802. ACCEPTANCE AND REJECTION FOR CLEARING 

(a) The SEF shall submit each Swap that is required to be or is intended to be cleared to the 

applicable Clearing House. If a Swap is submitted for clearing and is rejected or fails to 

clear for any reason, then such Swap shall be void ab initio; provided, however, that 

Swaps originally executed without an intent to clear shall not be void ab initio if they are 

subsequently submitted for clearing and fail to clear for any reason. 

(b) Any agreement between two Participants that governs Swaps that are submitted for 

clearing and fail to clear, including a breakage agreement, shall be inapplicable to 

Required Transactions and Permitted Transaction that are intended to be cleared and 

which are executed on or pursuant to the rules of the SEF. 

(c) Unless otherwise required under Applicable Law, the SEF shall be under no obligation to 

ensure that Swaps are successfully cleared and shall have no liability with respect to a 

Swap that fails to clear for any reason. 

RULE 803. CLEARING HOUSE RULES 

(a) The clearing services provided by a Clearing House with respect to any Contract, and the 

rights and obligations of purchasers and sellers under cleared Contracts (including 

without limitation rights and obligations in respect of clearing and settlement, variation 

payments and performance at maturity), shall be governed by the Clearing House Rules, 

as applicable. 

(b) The Clearing House Rules shall prevail in the event of any conflict or inconsistency 

between the SEF Rules and the Clearing House Rules with respect to any Clearing 

Member responsibilities or obligations under the Clearing House Rules. 

RULE 804. SUBSTITUTION AND NOVATION 

For a Transaction that is both executed and submitted to a Clearing House on the current 

business date at prevailing market prices, and in accordance with the rules governing such 
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Transaction, the Clearing House shall, through the process of novation, be substituted as, and 

assume the position of, seller to the buyer and buyer to the seller of the relevant number of 

Contracts once the Transaction is accepted at the Clearing House; provided, however, that the 

timing of the clearing guarantee for Transactions involving initial mark-to-market amounts 

above a specified threshold, and for Transactions that are not both executed and submitted to the 

Clearing House on the current business date, shall be subject to terms specified in the Clearing 

House manual of operations. 
 - 53 - 

Chapter 9

TRADING PRACTICES AND BUSINESS CONDUCT 

RULE 901. SCOPE 

This Chapter 9 prescribes Rules concerning trading practices and business conduct on the SEF. 

RULE 902. PROCEDURES 

(a) With respect to trading on or though the Trading System, the SEF may adopt, without 

limitation, procedures relating to Transactions in Contracts and trading on the Trading 

System, including procedures to: 

(1) disseminate the prices of bids and offers on, and trades in, Contracts; 

(2) record, and account for, Contracts and SEF Activity and regulate administrative 

matters affecting Swaps and SEF Activity; 

(3) establish limits on the number and/or size of Orders that may be submitted by a 

Participant through the Trading System; 

(4) establish limits on the number of Contracts that may be held by a Customer or 

Participant; 

(5) establish a limit on the maximum daily price fluctuations for any Contract and 

provide for any related restriction or suspension of trading in the Contract; and 

(6) require a suspended or expelled Participant, or a Participant with restricted trading 

rights, to have Contracts executed for the Participant to reduce or eliminate any 

open position or exposure to price changes for the Participant in any Contract. 

(b) The SEF may, in its discretion and at any time, amend any procedures adopted pursuant 

to Rule 902(a), and will publish the amendments in a Notice to Participants or in any 

other manner determined appropriate by the SEF. 

RULE 903. BUSINESS DAYS AND TRADING HOURS 

Except as provided in Rule 209 with respect to Emergencies, the SEF shall determine and 

publish a Notice to Participants listing the Business Days and Holidays of the SEF and the 

Trading Hours for each Contract. 

RULE 904. RULE VIOLATIONS 

(a) It shall be an offense for a Participant, Authorized Trader, Account Manager, Customer, 

and Client, as applicable, to violate any SEF Rule regulating the conduct or business of a 

Participant or its Account Managers or any agreement made with the SEF, or to engage in 

fraud, dishonorable or dishonest conduct, or in conduct which is inconsistent with just 

and equitable principles of trade. 
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(b) Participants shall assist the SEF in any investigation into potential violations of the SEF 

Rules or, with respect to the SEF Activity, the CEA. Such assistance must be timely and 

may include, but not be limited to, producing documents, answering questions from the 

SEF or its designee, and/or appearing in connection with an investigation. 

(c) If a Participant has actual or constructive notice of a violation of the SEF Rules in 

connection with the use of the SEF operated by the SEF by a Participant, Authorized 

Trader, Customer or Client, or Account Manager and the Participant fails to take 

appropriate action, the Participant may be found to have committed an act detrimental to 

the interest or welfare of the SEF operated by the SEF. 

RULE 905. FRAUDULENT ACTS 

No Participant, Authorized Trader, Account Manager, Customer or Client, or any market 

participant that directly or indirectly effects a Transaction on the SEF shall engage in any 

fraudulent act or engage in any scheme to defraud, deceive, trick or mislead in connection with 

or related to any SEF Activity. Specifically, no Participant, Authorized Trader, Account 

Manager, Customer or Client, or any market participant that directly or indirectly effects a 

Transaction on the SEF shall engage in front running, fraudulent trading, money passes, trading 

ahead of Customers, trading against Customers or accommodation trading.

RULE 906. FICTITIOUS, WASH OR NON-COMPETITIVE TRANSACTIONS 

PROHIBITED 

No Participant or any Authorized Trader of a Participant shall create, place or accept fictitious 

Transactions, wash Transactions, or non-competitive Transactions except, in the case of noncompetitive Transactions, as otherwise authorized by the SEF Rules, or execute any such Order 

with knowledge of its nature as a fictitious Transaction, wash Transaction, or non-competitive 

Transaction. No person shall place or accept to buy and sell orders in the same Unique Swap 

Identifier, where the person knows or reasonably should know that the purpose of the orders is to 

avoid taking a bona fide market position exposed to market risk. Buy and sell Orders for 

different accounts with common beneficial ownership that are entered with the intent to negate 

market risk or price competition shall also be deemed to violate the prohibition on wash 

Transactions. Additionally, no Person shall knowingly execute or accommodate the Execution 

of such Orders by direct or indirect means. 

RULE 907. MARKET DISRUPTION AND MARKET MANIPULATION 

PROHIBITED 

(a) Orders entered into the Trading System for the purpose of upsetting the equilibrium of 

the market in any Contract or creating a condition in which prices do not or will not 

reflect fair market values are prohibited, and any Participant or any Authorized Trader of 

a Participant who makes or assists in entering any such Order with knowledge of the 

purpose thereof or who, with such knowledge, in any way assists in carrying out any plan 

or scheme for the entering of any such Order, will be deemed to have engaged in an act 

detrimental to the SEF. 
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(b) Any attempted or completed manipulation of the market in any Swaps is prohibited. A 

Participant or an Authorized Trader of a Participant shall violate this Rule 907 if such 

person directly or indirectly, in connection with any Contract in interstate commerce, 

intentionally or recklessly: 

(1) Uses or employ, or attempt to use or employ, any manipulative device, scheme, or 

artifice to defraud; 

(2) Makes, or attempt to make, any untrue or misleading statement of a material fact 

or to omit to state a material fact necessary in order to make the statements made 

not untrue or misleading; 

(3) Engages, or attempt to engage, in any act, practice, or course of business, which 

operates or would operate as a fraud or deceit upon any Person; or, 

(4) Delivers or cause to be delivered, or attempt to deliver or cause to be delivered, 

for transmission through the mails or interstate commerce, by any means of 

communication whatsoever, a false or misleading or inaccurate report concerning 

market information or conditions that affect or tend to affect the price of any 

Contract in interstate commerce, knowing, or acting in reckless disregard of the 

fact that such report is false, misleading or inaccurate; provided, however, that no 

violation of this Rule 907 shall exist where the Participant or an Authorized 

Trader of a Participant mistakenly transmits, in good faith, false or misleading or 

inaccurate information to a price reporting service. 

RULE 908. MARKET DISRUPTION PROHIBITED 

The following are prohibited: 

(a) Violating Bids and Offers. No Participant, or Authorized Trader, shall enter or attempt to 

enter a Contract on the Trading System at a price that is higher than the lowest available 

price offered for such Contract or sell a Contract on the Trading System at a price that is 

lower than the highest available price bid for such Contract. 

(b) Orderly Execution of Transactions during the Closing Period. No Participant, or 

Authorized Trader, shall engage in any conduct that demonstrates reckless or intentional 

disregard for the orderly execution of Transactions during any closing period, including, 

but not limited to, conduct commonly known as “banging” or “marking” the close. 

(c) Spoofing. No Participant, or Authorized Trader, shall intentionally engage in any 

conduct that is, is the character of, or is commonly known to the trade as “spoofing,” 

including, but not limited to: 

(1) Bidding and offering with the intent to cancel the bid or offer before execution; 

(2) Submitting or cancelling bids or offers to overload the quotation system; 
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(3) Submitting or cancelling bids or offers to delay another Participants’ execution of 

Transactions; 

(4) Submitting or cancelling multiple bids or offers to create an appearance of false 

market depth; and 

(5) Submitting or cancelling bids or offers with intent to create artificial price 

movements upwards or downwards. 

RULE 909. PROHIBITION OF MISSTATEMENTS 

It shall be an offense to make any knowing misstatement of a material fact to the SEF, any SEF 

Official, any Board committee or SEF panel, the Compliance Department and/or agents of the 

SEF. 

RULE 910. ACTS DETRIMENTAL TO WELFARE OF THE SEF PROHIBITED 

It shall be an offense to engage in any act that is detrimental to the interest or welfare of the SEF. 

RULE 911. ADHERENCE TO LAW 

No Participant or Authorized Trader of a Participant shall engage in conduct that is a violation of 

the CEA or CFTC Regulations, the rules of any other Swap Execution Facility, Contract Market, 

or Derivatives Clearing Organization that has jurisdiction over such Participant, with respect to 

SEF Activity, the laws, rules or regulations of any relevant Governmental Agency. 

RULE 912. SUPERVISION 

A Participant shall establish, maintain and administer reasonable supervisory procedures to 

monitor the compliance of Authorized Traders with the SEF Rules and any applicable provisions 

of the CEA or CFTC and such Participant may be held accountable for the actions of such 

Authorized Traders. 

RULE 913. MISUSE OF THE TRADING SYSTEM 

Misuse of the Trading System is strictly prohibited. It shall be deemed an act detrimental to the 

SEF to permit unauthorized use of the Trading System , to assist any Person in obtaining 

unauthorized access to the Trading System , to trade on the Trading System without a User 

Agreement or, for Required Transactions, without an established account with a Clearing 

Member, to alter the equipment associated with the Trading System (except with the SEF’s 

consent), to interfere with the operation of the Trading System , to intercept or interfere with 

information provided thereby, or in any way to use the Trading System in a manner contrary to 

the SEF Rules. 
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RULE 914. WITHHOLDING ORDERS PROHIBITED 

(a) Any Participant entering Orders on the Trading System for any legally distinct Customer 

shall not withhold or withdraw from the market any Order, or any part of an Order, for 

the benefit of any Person other than such Customer. 

(b) A Participant must enter immediately into the SEF all Orders from its Customers that are 

executable immediately. If a Participant cannot immediately enter into the Trading 

System an Order received from its Customer, the Participant must enter the Order as soon 

as practicable, and must immediately create an electronic record 

RULE 915. PRIORITY OF CUSTOMERS’ ORDERS 

No Participant shall enter an Order into the Trading System for his own account, an account in 

which he has a direct or indirect financial interest or an account over which he has discretionary 

trading authority, including, without limitation, an Order allowing discretion as to time and price, 

when such Participant is in possession of any un-submitted Customer Order based on the same 

Contract and with the same fixing date or expiration date and that the Trading System is capable 

of accepting. 

RULE 916. HANDLING OF CUSTOMER ORDERS 

(a) No Participant in possession of a Customer Order shall knowingly trade ahead of a 

Customer Order or take, directly or indirectly, the opposite side of such Order for its own 

account, an account in which it has a direct or indirect financial interest, or an account 

over which it has discretionary trading authority. 

(b) No Participant in possession of a Customer Order shall engage in accommodation trading 

or improper cross-trading. 

(c) Exceptions. The restriction in this Rule 916 shall not apply to the following: 

(1) Transactions executed pursuant to SEF Rule 602 (Block Trades); or 

(2) Transactions executed pursuant to SEF Rule 918 (15 Second Rule). 

RULE 917. DISCLOSING ORDERS PROHIBITED 

No Person shall disclose another Customer’s Order to buy or sell except to a designated SEF 

Official or the CFTC, and no Person shall solicit or induce another Person to disclose Order 

information. No Person shall take action or direct another to take action based on non-public 

Order information, however acquired. The mere statement of opinions or indications of the price 

at which a market may open or resume trading does not constitute a violation of this rule. 

RULE 918. 15 SECOND RULE 

For Required Transactions, a Participant that is a broker, dealer or Account Manager which seeks 

to execute against a Customer or Client’s Order or execute two Customers or Clients against 
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each other through the SEF Order Book, following some form of pre-arrangement or prenegotiation of such orders, must expose one side of the potential Transaction to other 

Participants for at least a 15 seconds before the second side of the potential Transaction, whether 

for the Participant’s own account or for the account of a second Customer or Client, is submitted 

for execution. If the Order is not executed by another Participant after 15 seconds, the 

Participant displaying the one side of the Transaction may execute the other side of the 

Transaction against its own, or against another Client or Customer’s Order. 

RULE 919. PRE-ARRANGED AND NONCOMPETITIVE TRADES PROHIBITED 

(a) No Person shall pre-arrange any purchase or sale or noncompetitively execute any 

Transaction, except in accordance with Section (b). 

(b) The foregoing restriction shall not apply to Transactions executed pursuant to SEF Rule 

602 (Block Trades), and, for the avoidance of doubt, does not prohibit communications 

necessary to effect any RFQ Transaction pursuant to SEF Rule 703. 

RULE 920. RESPONSIBILITY FOR CUSTOMER ORDERS 

(a) A Participant shall exercise due diligence in the handling and execution of Customer 

Orders. Failure to act with due diligence shall constitute negligence. In the case of a 

dispute as to whether a Participant has exercised due diligence, the appropriate arbitration 

or disciplinary committee is authorized to determine whether the Participant was 

negligent and, if so, whether an adjustment is due to the Customer. 

(b) A Participant is prohibited from directly or indirectly guaranteeing the execution of an 

Order or any of its terms such as the quantity or price. A Participant may only report an 

execution that has been effected through the Trading System or has been executed under 

Chapter 7. This Rule 920(b) shall not be construed to prevent a Participant from 

assuming or sharing in the losses resulting from an error or the mishandling of an Order 

provided such action is done in accordance with the SEF Rules as well as Applicable 

Law. 

(c) A Participant may not be held responsible for executing a Customer Order or failing to 

execute a Customer Order unless such Participant was negligent. A Participant may not 

compel an adjustment from another Participant in the absence of a bona-fide dispute 

regarding negligence. Participants shall document all adjustments and shall make and 

retain a record which contains the date the adjustment was received, the name of the 

Participant making the adjustment, the account to which the adjustment was credited, the 

amount of the adjustment, the Order number and the reason for the adjustment. Such 

records must be provided to the Compliance Department upon request. 

RULE 921. DISCRETIONARY ORDERS 

No Participant shall submit a discretionary order to the Trading System for any account of 

another Person, without the prior specific written consent of such other Person to the exercise of 

such discretion. 
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RULE 922. POSITION LIMITS 

To reduce the potential threat of market manipulation or congestion, FTSEF shall adopt for each 

of the contracts on the Trading System, as is necessary and appropriate, position limitations or 

position accountability levels for speculators. 

RULE 923. TRADING SYSTEM ACCESS RESTRICTIONS 

All individuals entering Customer Orders in other than a clerical capacity must have appropriate 

industry registration. Customer Orders may be entered only from the premises of an entity 

registered to conduct Customer business. 

RULE 924. PRE-EXECUTION CREDIT CHECKS 

Pre-execution credit checks will be performed for: (i) Required Transactions, (ii) Permitted 

Transactions that are intended to be cleared and (iii) Permitted Transactions executed on the 

Order Book. Pre-execution credit checks are not currently required for NDF contracts. If/when 

the clearing mandate for NDF contracts becomes finalized, credit checks will be conducted for 

block trades in the same manor as all other Transactions. The SEF will only offer block trading 

via the RFQ system. 

Clearing Members have the ability to set credit limits for the cleared Swaps that their clients 

enter into on the Trading System. If a credit check fails, a trade is not permitted. 

RULE 925. RISK CONTROLS FOR TRADING 

(a) The SEF reserves the right to modify, adjust, or cancel any Transaction, including Block 

Trades, that it determines in its sole discretion to be unlawful, off market, the result of 

error, or otherwise incompatible with these SEF Rules, the User Agreement, or the 

efficient and secure operation of the SEF, including, but not limited to, excessive 

electronic traffic sent by any Participant, to the SEF. 

(b) The SEF reserves the right to modify, adjust, or cancel any Transaction, including Block 

Trades, when such action is necessary to mitigate market disrupting events caused by the 

improper or erroneous use of the Trading System or by system defects. 

(c) Notwithstanding any other provisions of this Rule, the SEF may modify or adjust trade 

prices or cancel any trade if the SEF determines that allowing the trade to stand as 

executed may have a material, adverse effect on the integrity of the market. 

(d) The SEF shall have the right to take any action to reduce the potential of market 

disruption, including but not limited to, market restrictions that pause or halt trading in 

market conditions prescribed by the SEF if such action is in the best interest of the Swap 

markets. 
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RULE 926. LIMITATION OF LIABILITY 

(a) EXCEPT IN INSTANCES WHERE THERE HAS BEEN A FINDING OF FRAUD OR 

WILLFUL OR WANTON MISCONDUCT, IN WHICH CASE THE PARTY FOUND 

TO HAVE ENGAGED IN SUCH CONDUCT CANNOT AVAIL ITSELF OF THE 

PROTECTIONS OF THIS RULE, THE SEF (INCLUDING ITS AFFILIATES), AND 

THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, 

LICENSORS AND SERVICE PROVIDERS AND VENDORS (EACH, A 

“DISCLAIMING PARTY” AND COLLECTIVELY, “DISCLAIMING PARTIES”) 

SHALL NOT BE LIABLE TO ANY PERSON, INCLUDING WITHOUT 

LIMITATION ANY CUSTOMER, FOR ANY LOSS, DAMAGE OR COST 

(INCLUDING BUT NOT LIMITED TO ATTORNEYS’ FEES AND COURT COSTS), 

WHETHER DIRECT, INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, 

LOST PROFITS OR OTHERWISE OF ANY KIND, REGARDLESS OF WHETHER 

ANY OF THEM HAS BEEN ADVISED OR IS OTHERWISE AWARE OF THE 

POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF THE USE OR 

PERFORMANCE OF THE TRADING SYSTEM , ANY COMPONENT(S) THEREOF, 

OR ANY FAULT, FAILURE, MALFUNCTION OR OTHER ALLEGED DEFECT IN 

THE TRADING SYSTEM , INCLUDING ANY INABILITY TO ENTER OR CANCEL 

ORDERS IN THE TRADING SYSTEM , OR ANY FAULT IN DELIVERY, DELAY, 

OMISSION, SUSPENSION, INACCURACY OR TERMINATION, OR ANY OTHER 

CAUSE IN CONNECTION WITH THE FURNISHING, PERFORMANCE, 

MAINTENANCE, USE OF OR INABILITY TO USE ALL OR ANY PART OF THE 

TRADING SYSTEM , INCLUDING BUT NOT LIMITED TO ANY FAILURE OR 

DELAY IN TRANSMISSION OF ORDERS OR TRADES OR LOSS OF ORDERS OR 

TRADES RESULTING FROM (A) MALFUNCTION OF THE TRADING SYSTEM , 

(B) DISRUPTION OF COMMON CARRIER LINES, (C) LOSS OF POWER, (D) 

ACTS OR FAILURES TO ACT OF ANY THIRD PARTY, (E) NATURAL 

DISASTERS OR (F) ANY AND ALL OTHER CAUSES. THE FOREGOING SHALL 

APPLY REGARDLESS OF WHETHER A CLAIM ARISES IN CONTRACT, TORT, 

NEGLIGENCE, STRICT LIABILITY OR OTHERWISE. THE FOREGOING 

LIMITATIONS ARE CUMULATIVE AND SHALL NOT LIMIT OR RESTRICT THE 

APPLICABILITY OF ANY OTHER LIMITATION OR RULE, TRADING 

PROCEDURE OR NOTICE OF TRADING SYSTEM. 

(b) THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS 

PROVIDED BY ANY DISCLAIMING PARTY RELATING TO THE TRADING 

SYSTEM OR ANY FACILITY SERVICE OR FACILITIES USED TO SUPPORT THE 

TRADING SYSTEM , INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF 

MERCHANTABILITY AND WARRANTIES OF FITNESS FOR A PARTICULAR 

PURPOSE OR USE. 

(c) IF ANY OF THE FOREGOING LIMITS ON THE LIABILITY OF A DISCLAIMING 

PARTY SHOULD BE DEEMED TO BE INVALID, INEFFECTIVE, OR 

UNENFORCEABLE OR IN THE EVENT THE FACILITY ELECTS TO ASSUME 

RESPONSIBILITY FOR DIRECT, OUT OF POCKET LOSSES DIRECTLY CASED 

BY THE GROSS NEGLIGENCE OF A DISCLAIMING PARTY AND ANY 
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PARTICIPANT OR THIRD PARTY SUSTAINS A LOSS, DAMAGE OR COST 

RESULTING FROM USE OF THE TRADING SYSTEM , THE ENTIRE LIABILITY 

OF ALL DISCLAIMING PARTIES SHALL NOT EXCEED $10,000 FOR ALL 

LOSSES SUFFERED FROM ALL CAUSES ON A SINGLE CALENDAR DAY; 

$25,000 FOR ALL LOSSES SUFFERED FROM ALL CAUSES IN A SINGLE 

CALENDAR MONTH; AND $500,000 FOR ALL LOSSES SUFFERED FROM ALL 

CAUSES IN A SINGLE CALENDAR YEAR. IF THE NUMBER OF ALLOWED 

CLAIMS ARISING OUT OF ANY FAILURE OR MALFUNCTIONS ON A SINGLE 

DAY OR SINGLE MONTH CANNOT BE FULLY SATISFIED BECAUSE OF THE 

ABOVE DOLLAR LIMITATIONS, ALL SUCH CLAIMS SHALL BE LIMITED TO A 

PRO RATA SHARE OF THE MAXIMUM AMOUNT FOR THE RESPECTIVE 

PERIOD. 

(d) NOTWITHSTANDING ANY OF THE FOREGOING, THIS RULE SHALL IN NO 

WAY LIMIT THE APPLICABILITY OF ANY PROVISION OF THE ACT OR 

COMMISSION REGULATIONS. 
 - 62 - 

Chapter 10

DISCIPLINARY RULES 

RULE 1001. GENERAL 

(a) All Participants, Authorized Traders of Participants, Clients, Customers and Clearing 

Members shall be subject to the SEF’s jurisdiction. All Participants, Clients, Customers 

and Clearing Members are subject to this Chapter 10 if they, or with respect to a 

Participant, Client, Customer or Clearing Member any other Person using its Legal Entity 

Identifier, are alleged to have violated, to have aided and abetted a violation, to be 

violating, or to be about to violate, any SEF Rule or any provision of Applicable Law for 

which the SEF possesses disciplinary jurisdiction. 

(b) The Compliance Department has the authority to: (i) initiate and conduct inquiries and 

investigations; (ii) prepare investigative reports and make recommendations concerning 

initiating disciplinary proceedings; and (iii) prosecute alleged violations within the SEF’s 

disciplinary jurisdiction. 

(c) Each Participant, Authorized Trader of a Participant, Client, Customer and Clearing 

Member: (i) 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 Obligation; (B) any inquiry or investigation; or (C) any preparation by and 

presentation during a Disciplinary Action; (ii) is obligated to produce all books, records, 

papers, documents or other tangible evidence in its, his or her possession, custody or 

control within the time period required by the Compliance Department in connection 

with: (A) any Obligation; (B) any inquiry or investigation; or (C) any preparation by and 

presentation during a Disciplinary Action; and (iii) may not impede or delay any 

Disciplinary Action. 

(d) The SEF, through the Compliance Department, will promptly prosecute possible rule 

violations within the SEF’s disciplinary jurisdiction. 

(e) The SEF, through the Regulatory Services Provider, if any, and the Disciplinary Panel, 

will conduct inquiries, investigations, disciplinary proceedings, summary impositions of 

fines, summary suspensions or other summary actions in accordance with this Chapter 

10. 

(f) No SEF Official or Officer will interfere with or attempt to influence the process or 

resolution of any inquiry, investigation, or disciplinary proceeding. No Director will 

interfere with or attempt to influence the process or resolution of any Disciplinary Action 

except to the extent provided under the SEF Rules. 

(g) Any Participant, Authorized Trader of a Participant, Client, Customer or Clearing 

Member may be represented by counsel during any Disciplinary Action pursuant to this 

Chapter 10. 
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(h) Participant, Customer, Client and Clearing Member Liability – Individual and Joint 

Liability/Controlling Person Liability. 

(1) The SEF may hold a Participant, Customer, Client or Clearing Member liable for, 

and impose sanctions against such Participant, Customer, Client or Clearing 

Member for such Participant, Customer, Client or Clearing Member’s own acts 

and omissions that constitute a violation as well as for the acts and omissions of 

each (A) Authorized Trader authorized by such Participant, Customer, Client or 

Clearing Member (B) other Person using a Legal Entity Identifier of such 

Participant, Customer, Client or Clearing Member or (C) other agent or 

representative of such Participant, Customer, Client or Clearing Member in each 

case, that constitute a violation as if such violation were that of the Participant, 

Customer, Client or Clearing Member. 

(2) The SEF may hold an Authorized Trader liable for, and impose sanctions against 

such Authorized Trader for such Authorized Trader’s own acts and omissions that 

constitute a violation as well as or for the acts and omissions of any other agent or 

representative of such Authorized Trader that constitute a violation as if such 

violation were that of the Authorized Trader. 

(i) Ex Parte Communications. 

(1) A Person subject to a disciplinary proceeding (and any counsel or representative 

of such Person) 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 to any member of the Disciplinary Panel hearing such proceeding. 

(2) Members of a Disciplinary Panel shall not knowingly make or cause to be made 

an ex parte communication relevant to the merits of a disciplinary proceeding to 

any Person subject to such proceeding (and any counsel or representative of such 

Person) and 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 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 if the Person refuses an 

attempted communication concerning the merits of a proceeding as soon as it 

becomes apparent the communication concerns the merits. 
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RULE 1002. INVESTIGATIONS AND INVESTIGATION REPORTS 

(a) Procedures. 

(1) The SEF’s Compliance Department shall initiate an investigation upon the receipt 

of a request from the CFTC or upon the discovery or receipt of information that, 

in the judgment of the Compliance Department, indicates a possible basis for 

finding that a violation has occurred or will occur. 

(2) Absent mitigating circumstances, a Compliance Department investigation must be 

completed no later than twelve (12) months after the date that such investigation 

is opened. If a Compliance Department investigation will take longer than twelve 

(12) months to complete, the Compliance Department must explain the reasons in 

writing to the Chief Compliance Officer. 

(b) Investigation Reports. 

(1) If the Compliance Department determines that a reasonable basis exists for 

finding a violation of the SEF Rules or Applicable Law, the Compliance 

Department must submit a written report to the Review Panel, which shall 

include: a summary of the complaint, if any; a description of the Participant’s 

disciplinary history (including warning letter); the relevant facts; the Compliance 

Department’s analysis and conclusions; and a recommendation as to whether 

Disciplinary Action should be pursued. 

(2) If the Compliance Department determines that no reasonable basis exists for 

finding a violation of the SEF Rules or Applicable Law, the Compliance 

Department must nonetheless submit a written report to the Chief Compliance 

Officer, which shall include: the reason the investigation was initiated; a summary 

of the complaint, if any; the relevant facts; Compliance Department’s analysis and 

conclusions; and if applicable, any recommendation that a disciplinary committee 

issue a warning letter. If the Compliance Department recommends that a warning 

letter be issued to a Participant or Authorized Trader, the investigation report shall 

include a copy of the letter as well as the Participant or Authorized Trader’s 

disciplinary history at the SEF, including copies of warning letters. 

(c) Warning Letters. 

(1) After conducting an investigation pursuant to Rule 1002(a), the Compliance 

Department may recommend to the Chief Compliance Officer that the SEF issue a 

warning letter to a Participant or Authorized Trader. Upon such recommendation, 

the Chief Compliance Officer may issue a warning letter to any Participant or 

Authorized Trader. A warning letter is not a penalty or an indication that a 

finding of a violation has been made. 
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RULE 1003. DISCIPLINARY PANELS 

(a) Disciplinary Panel Composition. 

(1) The SEF shall have a Review Panel and a Hearing Panel (collectively, the 

“Disciplinary Panel”). 

(2) All information, records, materials and documents provided to the Disciplinary 

Panels and all deliberations, testimony, information, records, materials and 

documents related thereto shall be treated as non-public and confidential and shall 

not be disclosed, except as necessary to further an investigation or as required by 

law. 

(3) The Disciplinary Panel shall not include any members of the SEF’s compliance 

staff or any person involved in adjudicating any other stage of the same 

proceeding. 

(4) The Review Panel and Hearing Panel will each be comprised of three members. 

At least one member of the Review Panel and one member of the Hearing Panel 

must be a person who is not a member of the self-regulatory organization 

whenever such panel is acting with respect to a disciplinary action in which: 

i. The subject of the action is a member of the self-regulatory organization’s 

governing board or major disciplinary committee; or 

ii. Any of the charged, alleged or adjudicated contract market rule violations 

involve: 

(1) Manipulation or attempted manipulation of the price of a commodity, 

a futures contract or an option on a futures contract, or 

(2) Conduct which directly results in financial harm to a non-member of 

the contract market. 

(5) In the case of a contract market, that more than fifty percent of each major 

disciplinary committee or hearing panel thereof include persons representing 

membership interests other than that of the subject of the disciplinary proceeding 

being considered; 

(6) In the case of a registered futures association, that each major disciplinary 

committee or hearing panel thereof include persons representing membership 

interests other than that of the subject of the disciplinary proceeding being 

considered; and, 

(7) That each major disciplinary committee or hearing panel thereof include sufficient 

different membership interests so as to ensure fairness and to prevent special 

treatment or preference for any person in the conduct of a committee's or the 

panel's responsibilities. 
 - 66 - 

(b) Review Panel. The Review Panel is responsible for determining whether a reasonable 

basis exists for finding a violation of the SEF Rules, and for authorizing the issuance of 

notices of charges against Persons alleged to have committed violations if the Review 

Panel believes that the matter should be adjudicated. 

(c) Hearing Panel. The Hearing Panel is responsible for adjudicating disciplinary cases 

pursuant to a notice of charges authorized by a Review Panel. No member of a Hearing 

Panel may have a financial, personal, or other direct interest in the matter under 

consideration. 

RULE 1004. REVIEW OF INVESTIGATORY REPORT 

(a) Within thirty (30) days of receiving a completed investigation report pursuant to Rule 

1002, a Review Panel must take one of the following actions: 

(1) If the Review Panel determines that additional investigation or evidence is 

needed, it must promptly direct the Compliance Department to conduct further 

investigation. 

(2) If the Review Panel determines that no reasonable basis exists for finding a 

violation or that prosecution is otherwise unwarranted, it may direct that no 

further action be taken. Such determination must be in writing, and must include 

a written statement setting forth the facts and analysis supporting the decision. 

(3) If the Review Panel determines that a reasonable basis exists for finding a 

violation and adjudication is warranted, it must direct that the person or entity 

alleged to have committed the violation be served with a notice of charges and 

must proceed in accordance with the rules of this section. 

RULE 1005. NOTICE OF CHARGES 

(a) If the Review Panel directs that a respondent be served with a notice of charges pursuant 

to Rule 1004(a)(3), the Compliance Department shall prepare and serve a notice of 

charges. 

(b) A notice of charges will state the acts, conduct, or practices in which the respondent is 

alleged to have engaged; state the rule, or rules, alleged to have been violated (or about to 

be violated); advise the respondent that he is entitled, upon request, to a hearing; 

prescribe the period within which a hearing on the charges may be requested, which shall 

not be less than twenty (20) days; advise the respondent that he has the right to be 

represented by legal counsel or any other representative of its choosing in all succeeding 

stages of the disciplinary process; advise the respondent that any failure to request a 

hearing within the period stated, except for good cause, will be deemed to constitute a 

waiver of the right to a hearing; and advise the respondent that any allegation in the 

notice of charges that is not expressly denied will be deemed to be admitted. 

(c) Any notice of charges or other documents to be served pursuant to this Chapter 9 may be 

served upon the respondent and service shall be deemed complete either personally or by 
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leaving the same at his or her place of business; by deposit in the United States mail, 

postage prepaid, via registered or certified mail addressed to the respondent at the address 

as it appears on the books and records of the SEF; or via electronic mail to the electronic 

mail address as it appears on the books and records of the SEF. 

(d) Upon being served with a notice of charges, a respondent will have the right to be 

represented by legal counsel or any other representative of its choosing in all succeeding 

stages of the disciplinary process. 

RULE 1006. ANSWER TO NOTICE OF CHARGES 

(a) In General. If the respondent determines to answer a notice of charges, the respondent 

must, in writing: 

(1) specify the allegations that the respondent denies or admits; 

(2) specify the allegations that the respondent does not have sufficient information to 

either deny or admit; 

(3) specify any specific facts that contradict the notice of charges; 

(4) specify any affirmative defenses to the notice of charges; and 

(5) sign and serve the answer on the Chief Compliance Officer. 

(b) Failure to Respond. 

(1) Any failure by the respondent to timely serve an answer to a notice of charges 

will be deemed to be an admission to the allegations in such notice. Any failure 

by the respondent to answer one or more allegations in a notice of charges will be 

deemed to be an admission of that allegation or those allegations. Any allegation 

in a notice of charges that the respondent fails to expressly deny will be deemed 

to be admitted. A general denial by the respondent, without more, will not satisfy 

the requirements of paragraph (a) above. 

(2) If a respondent admits to allegations through such a failure to respond, the 

Hearing Panel shall impose appropriate sanctions. 

(3) Before imposing sanctions pursuant to Rule 1006(b)(2), the Hearing Panel will 

notify the respondent in writing of any sanction to be imposed and advise the 

respondent that it may request a hearing on such sanction within a specified 

period of time. If a respondent fails to request a hearing within twenty (20) days 

after being served with such notice, the respondent will be deemed to have 

accepted the sanction. 
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(c) Denial of Charges and Right to Hearing. 

(1) If a respondent requests a hearing on a charge that is denied pursuant to Rule 

1006(a), or on a sanction set by the Hearing Panel pursuant to Rule 1006(b)(3), 

the respondent shall be entitled to a hearing in accordance with Rule 1009. 

(2) Except for good cause shown, the hearing will be concerned only with those 

charges denied and/or sanctions set by the Hearing Panel under Rule 1006(b)(3) 

for which a hearing has been requested. 

RULE 1007. SETTLEMENTS 

(a) A respondent or potential respondent may at any time propose in writing an offer of 

settlement related to anticipated or instituted disciplinary proceedings. 

(b) Any offer of settlement should contain proposed findings and sanctions and be signed by 

the respondent or potential respondent and submitted to the Disciplinary Panel presiding 

over the matter. 

(c) A respondent or potential respondent may offer to settle disciplinary proceedings without 

admitting or denying the findings contained in the order of the disciplinary proceedings 

but must accept the jurisdiction of the SEF over it and over the subject matter of the 

proceedings and consent to the entry of the findings and sanctions imposed. 

(d) If a respondent or potential respondent submits an offer of settlement in accordance with 

paragraph (a) above, the Compliance Department will forward the offer to the Hearing 

Panel with a recommendation on whether to accept or reject the offer. If the Compliance 

Department and Hearing Panel agree to accept the offer of settlement, then the offer of 

settlement shall be accepted. If applicable, the Hearing Panel’s decision must include a 

statement that the respondent has accepted the sanctions imposed without either 

admitting or denying the rule violations. 

(e) Upon accepting any offer of settlement, the Hearing Panel shall issue a written decision 

specifying the rule violations it has reason to believe were committed, including the basis 

or reasons for the panel’s conclusions, and any sanction to be imposed, which must 

include full customer restitution where customer harm is demonstrated. 

(f) If an offer of settlement is accepted by the Hearing Panel, the respondent’s submission of 

the offer will be deemed to constitute a waiver of the right to notice, opportunity for a 

hearing and review and appeal under the SEF Rules. 

(g) If the offer of settlement is not accepted or is withdrawn by the respondent or potential 

respondent, the matter will proceed as if the offer had not been made and the offer and all 

documents relating to it will not become part of the record. Neither a respondent or 

potential respondent nor the Hearing Panel may use an unaccepted offer of settlement as 

an admission or in any other manner at a hearing of, or appeal from, disciplinary 

proceedings. 
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RULE 1008. RESPONDENT REVIEW OF EVIDENCE 

(a) Prior to the commencement of a hearing, each respondent will be given the opportunity to 

review all books, records, documents, papers, transcripts of testimony and other tangible 

evidence in the possession or under the control of the SEF that the Compliance 

Department will use to support the allegations and proposed sanctions in the notice of 

charges or which the chair of the Hearing Panel deems relevant to the disciplinary 

proceedings. Notwithstanding the foregoing, no respondent will have the right to review, 

and the SEF will have no obligation to disclose, any information protected by attorneyclient privilege. 

(b) If any books, records, documents, papers, transcripts of testimony, or other tangible 

evidence contain information that could adversely affect the competitive position of the 

Person providing the information or if such information might compromise other 

investigations being conducted by the Compliance Department, the Compliance 

Department may redact, edit or code such information before furnishing it to the 

respondent. 

(c) Notwithstanding anything in paragraph (b) above to the contrary, the Compliance 

Department: 

(1) will not redact, edit or code competitive or investigative information contained in 

documents in a manner that would impair the respondent’s ability to defend 

against the allegations or proposed sanctions in the notices of charges; and 

(2) will provide the respondent with access to the information and portions of the 

documents that the Compliance Department intends to rely on to support the 

allegations or proposed sanctions in the notice of charges. 

(d) For purposes of this Rule 1008, information that could adversely affect competitive 

positions include positions in Contracts currently held, trading strategies employed in 

establishing or liquidating positions, the identity of any Participant, and the personal 

finances of the Person providing the information. 

RULE 1009. HEARINGS 

Hearings shall be conducted pursuant to the procedures below, or pursuant to the procedures of a 

Regulatory Services Provider, if any. 

(a) Hearing Procedures 

(1) A hearing shall be fair, shall be conducted before members of the disciplinary 

panel, and shall be promptly convened after reasonable notice to the respondent. 

(2) If the respondent has requested a hearing, a copy of the hearing shall be made and 

shall become a part of the record of the proceeding. The record shall not be 

required to be transcribed unless: 
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i. The transcript is requested by CFTC staff or the respondent; or 

ii. The decision is reviewed by the CFTC. 

In all other instances, a summary record of a hearing will be prepared. 

(3) After reasonable notice to each respondent, the Hearing Panel will promptly 

convene a hearing to conduct the disciplinary proceedings with respect to such 

respondent. Parties to a disciplinary proceeding include each respondent and the 

Compliance Department. 

(4) The chair of the Hearing Panel may continue, adjourn or otherwise conduct the 

hearing, as he or she may deem appropriate. The chair of the Hearing Panel will 

determine all procedural and evidentiary matters, including the admissibility and 

relevance of any evidence proffered. In determining procedural and evidentiary 

matters, the chair of the Hearing Panel will not be bound by any evidentiary or 

procedural rules or law. Once admitted during the hearing, the Hearing Panel 

may consider, and attach the weight it believes appropriate to, evidence or other 

materials. 

(5) Except for procedural and evidentiary matters decided by the chair of the Hearing 

Panel pursuant to paragraph (3), unless each respondent otherwise consents, the 

entire Hearing Panel must be present during the entire hearing and any related 

deliberations. 

(b) Conducting Hearings. 

(1) At a hearing conducted in connection with any disciplinary proceedings, the 

Compliance Department will present its case supporting the allegations and 

proposed sanctions in the notice of charges to the Hearing Panel. If a respondent 

has timely filed an answer to the notice of charges in accordance with Rule 1006, 

the respondent is entitled to attend and participate in the hearing. 

(2) At a hearing conducted in connection with any disciplinary proceedings, the 

Hearing Panel or the Compliance Department and each respondent may: 

i. present evidence and facts determined relevant and admissible by the chair 

of the Hearing Panel; 

ii. call and examine witnesses; and 

iii. cross-examine witnesses called by other parties. 

(3) If the respondent fails to file an answer, has filed a general denial, or if any or all 

of the allegations in the notice of charges are not expressly denied in the 

respondent’s answer, the chair of the Hearing Panel may limit evidence 

concerning any allegations not expressly denied in determining the sanctions to 

impose. If a respondent fails to file an answer but appears at the hearing, the 
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respondent may not participate in the hearing (by calling or cross-examining 

witnesses, testifying in defense, presenting evidence concerning the notice of 

charges, or otherwise) unless the Hearing Panel determines that the respondent 

had a compelling reason for failing to timely file an answer. If the Hearing Panel 

determines that the respondent had a compelling reason for failing to timely file 

an answer, the Hearing Panel will adjourn the hearing and direct the respondent to 

promptly file a written answer in accordance with Rule 1006. 

(4) Any Person entitled, or required or called upon, to attend a hearing before a 

Hearing Panel pursuant to paragraph (b)(2) above will be given reasonable notice, 

confirmed in writing, specifying the date, time and place of the hearing, and the 

caption of the disciplinary proceedings. All Participants (that are individuals) and 

Authorized Traders that are called as witnesses are required to appear at the 

hearing and, where applicable, produce evidence. The Compliance Department 

will make reasonable efforts to secure the presence of all other Persons called as 

witnesses whose testimony would be relevant. 

(5) If during any disciplinary proceeding, the Hearing Panel determines that a 

reasonable basis exists to believe that the respondent violated or is about to 

violate a Rule of the SEF or a provision of Applicable Law other than the 

violations alleged in the notice of charges, the Hearing Panel may consider those 

apparent violations after providing the respondent with an opportunity to answer 

the additional allegations in accordance with Rule 1006. In connection with 

considering apparent violations pursuant to this paragraph (b)(5), the Hearing 

Panel may request that the Compliance Department provide the Hearing Panel 

with any additional information related to the violations at issue. 

(6) The SEF will arrange for an audio recording of every hearing conducted in 

connection with disciplinary proceedings to be created, which shall become a part 

of the record. At the direction of the CFTC or the request of the respondent, the 

SEF will arrange for the recording to be accurately transcribed. If the respondent 

requests a copy of all or portions of the recording of a hearing, the chair of the 

Hearing Panel may within his or her sole discretion require the respondent to pay 

the costs for transcribing the recording of the hearing. 

(c) The Hearing Panel may summarily impose sanctions on any Participant or Authorized 

Trader that impedes or delays the progress of a hearing. 

(d) No interlocutory appeals of rulings of any Hearing Panel or chair of the Hearing Panel 

are permitted. 

RULE 1010. DECISION OF HEARING PANEL 

The decision of the Hearing Panel shall be made pursuant to the procedures below, or pursuant to 

the procedures of a Regulatory Services Provider, if any. 

(a) As promptly as reasonable following a hearing, the Hearing Panel will issue a written 

order rendering its decision based on the weight of the evidence contained in the record 
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of the disciplinary proceedings. A decision by a majority of the Hearing Panel will 

constitute the decision of the Hearing Panel. 

(b) The SEF will serve a copy of the order of the disciplinary proceedings on the respondent 

and the Compliance Department. The order will include: 

(1) the notice of charges or summary of the allegations; 

(2) the answer, if any, or a summary of the answer; 

(3) a brief summary of the evidence introduced at the hearing or, where appropriate, 

incorporation by reference of the Investigation Report; 

(4) findings of fact and conclusions concerning each allegation, including a complete 

explanation of the evidentiary and other basis for such findings and conclusions 

with respect to each allegation; 

(5) each specific Rule of the SEF and provision of Applicable Law that the 

respondent is found to have violated; and 

(6) the imposition of sanctions, if any, including the basis for such sanctions and the 

effective date of each sanction. 

RULE 1011. SANCTIONS 

(a) After notice and opportunity for hearing in accordance with the SEF Rules, the SEF will 

impose sanctions if any Participant, Authorized Trader, Customer, Client, Clearing 

Member or other Person using the Participant’s Legal Entity Identifier is found to have 

violated or to have attempted to violate a Rule of the SEF or provision of Applicable Law 

for which the SEF possesses disciplinary jurisdiction. All sanctions, including sanctions 

imposed pursuant to an accepted settlement offer, must take into account the respondent’s 

disciplinary history. In the event of demonstrated customer harm, any sanction must also 

include full customer restitution, except where the amount of restitution or to whom it 

should be provided cannot be reasonably determined. The SEF may impose one or more 

of the following sanctions or remedies: (1) censure; (2) limitation on Trading Privileges, 

ability to otherwise access the Trading System , and/or other activities, functions or 

operations; (3) suspension of Trading Privileges and/or ability to otherwise access the 

Trading System ; (4) fine (subject to paragraph (b) below); (5) restitution or 

disgorgement; (6) termination of Trading Privileges and/or ability to otherwise access the 

Trading System; or (7) any other sanction or remedy deemed to be appropriate. 

(b) The SEF may impose a maximum fine of $50,000 for each violation of a Rule of the SEF 

or a provision of Applicable Law. If a fine or other amount is not paid within 30 days of 

the date that it becomes payable, then interest will accrue on the sum from the date that it 

became payable at the quoted prime rate plus three (3) percent. The SEF has sole 

discretion to select the bank on whose quotations to base the prime rate. Participant will 

be responsible for paying any fine or other amount imposed on, but not paid by, any of its 

Authorized Traders. 
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RULE 1012. NO RIGHT TO APPEAL 

All decisions of a Disciplinary Panel, including summary impositions of fines and other 

summary actions are final and are not subject to appeal under the SEF Rules. Participants are 

entitled to the appeal process outlined in CFTC Regulation Part 9. 

RULE 1013. SUMMARY FINES FOR VIOLATIONS OF THE SEF RULES 

REGARDING TIMELY SUBMISSION OF RECORDS 

(a) The Chief Compliance Officer or Compliance Department may summarily impose a fine 

against a subject person on account of conduct by such subject person, any person, 

Participant, Customer or Client, or any person using any Firm ID, User ID or Admin ID 

assigned to such subject person for violations of rules relating to the following: 

(1) failure to make time and accurate submission to the SEF of any notice or report 

required by SEF rules 

(2) failure to make timely payments of fees, costs, charges or fines to the SEF 

(3) failure to keep books or records required by SEF rules 

(b) The Chief Compliance Officer or Compliance Department will give notice of any 

summary fine imposed pursuant to this Rule 1013, which shall include: 

(1) the violations of the SEF Rules for which the fine is being imposed; 

(2) the date of the violation for which the fine is being imposed; and, 

(3) the amount of the fine, not to exceed $5,000 per violation of Rule 1013. 

(c) In lieu of a summary fine, the Chief Compliance Officer may issue a warning letter for 

first-time violations or violators pursuant to Rule 1002(c), provided that no more than one 

warning letter may be issued per rolling 12-month period for the same violation by the 

same Person. 

(d) Any Person subject to a summary fine may challenge such summary fine by denying the 

charges and filing a request for a hearing pursuant to Rule 1006(c). 

RULE 1014. EMERGENCY SUMMARY SUSPENSIONS AND OTHER SUMMARY 

ACTIONS 

(a) Notwithstanding anything in the SEF Rules to the contrary, the Chief Compliance Officer 

may, after consultation with the Compliance Department, if practicable, summarily 

suspend, revoke, limit, condition, restrict or qualify a Participant’s Trading Privileges 

and/or ability to otherwise access the Trading System ; provided, however, that the Chief 

Compliance Officer may only summarily suspend a Participant’s Trading Privileges or 

the trading privileges of any Participant’s Authorized Traders if the Chief Compliance 

Officer reasonably believes that: 
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(1) such Person is subject to statutory disqualification from registration as provided in 

CEA Section 8a(2) or (3); 

(2) such Person has failed to pay applicable fees, costs, charges, fines or arbitration 

awards; or 

(3) immediate action is necessary to protect the public or the best interests of the 

SEF. 

(b) Whenever practicable, the SEF shall provide prior written notice to the party against 

whom any action in accordance with paragraph (a) shall be taken. If prior notice is not 

practicable, the SEF will give notice at the earliest possible opportunity to the respondent 

against whom the action is brought. 

(c) Any action taken in accordance with paragraph (a) will become final upon the expiration 

of 20 days after the notice of action is served on the respondent. 

(d) At the request of the SEF, a respondent against whom a summary action is brought 

pursuant to this Rule 1014 must provide books and records over which the respondent has 

access or control and must furnish information to, or appear or testify before, the SEF in 

connection with the enforcement of any Rule of the SEF. 

RULE 1015. RIGHTS AND RESPONSIBILITIES AFTER SUSPENSION OR 

TERMINATION 

(a) When a Participant’s Trading Privileges and/or ability to otherwise access the Trading 

System are suspended for a period of 12 months or less, none of its rights (including the 

right to hold oneself out to the public as a Participant, enter Orders into the Trading 

System and receive Participant rates for fees, costs, and charges and deposit margin at 

Participant levels) will apply during the period of the suspension, except for the right of 

the Participant in question to assert claims against others as provided in the SEF Rules. 

Any such suspension will not affect the rights of creditors under the SEF Rules or relieve 

the Participant in question of its, his or her obligations under the SEF Rules to perform 

any Contracts entered into before the suspension, or for any the SEF fees, costs, or 

charges incurred during the suspension. The SEF may discipline a suspended Participant 

under this Chapter 10 for any violation of a Rule of the SEF or provision of Applicable 

Law committed by the Participant before, during or after the suspension. 

(b) When a Participant’s Trading Privileges and/or ability to otherwise access the Trading 

System are terminated, all of its related rights will terminate, except for the right of the 

Participant in question to assert claims against others, as provided in the SEF Rules. Any 

such termination will not affect the rights of creditors under the SEF Rules. A terminated 

Participant may only seek to be reinstated by applying for Trading Privileges pursuant to 

Rule 302. 

(c) The SEF will not consider the application of a terminated Participant if such Participant, 

as the case may be, continues to fail to appear at disciplinary proceedings without good 

cause or continues to impede the progress of disciplinary proceedings. 
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(d) A suspended or terminated Participant remains subject to the SEF Rules and the 

jurisdiction of the SEF for acts and omissions prior to the suspension of termination, and 

must cooperate in any inquiry, investigation, disciplinary proceeding, summary 

suspension or other summary action as if the suspended or terminated Participant still had 

Trading Privileges or ability to otherwise access the Trading System. 

RULE 1016. Notice to the Respondent, the Regulatory Services Provider and the Public 

(a) Upon rendering a final decision regarding a disciplinary or access denial action, the SEF 

shall, within thirty days thereafter, provide written notice of such action to the person 

against whom the action was taken. Any disciplinary or access denial action taken will 

not become effective until at least fifteen days after the written notice is delivered to the 

person disciplined or denied access. 

(b) The SEF will provide written notice of disciplinary proceedings to the parties, the 

Regulatory Services Provider, if any, and the CFTC to the extent such notice is required 

by the Regulatory Services Provider and/or the CFTC. 
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Chapter 11

ALTERNATIVE DISPUTE RESOLUTION 

RULE 1101. DISPUTES SUBJECT TO ARBITRATION 

(a) Mandatory Arbitration of Disputes. 

(1) It is contrary to the objectives and policy of the SEF for Participants or 

Authorized Traders to litigate SEF-related disputes. Participants or Authorized 

Traders must arbitrate all disputes between or among themselves, or against the 

SEF, that relate to or arise out of any Transaction on or subject to the SEF Rules 

that are based upon facts and circumstances that occurred at a time when the 

parties were Participants, other than disputes between a Participant and Clearing 

Member relating to a Contract that fails to clear. 

(2) Notwithstanding the foregoing, this Rule 1101 does not require an employee of a 

Participant to submit to arbitration any claim that includes allegations of a 

violation of federal, state or local employment discrimination, sexual harassment, 

wage payment or benefits laws. 

(b) Claims Against a Clearing House. 

Claims against a Clearing House must be pursued pursuant to the rules of the Clearing 

House. 

(c) Permissive Arbitrations. 

The following may be submitted for arbitration through the National Futures Association 

Arbitration Program: 

(1) claims of a Customer or Client that is not a Participant against a Participant or 

Authorized Traders that relate to or arise out of any Transaction on or subject to 

the SEF Rules, including any disputes brought under Rule 920(a); 

(2) claims between a Participant and Clearing Member relating to a Contract that fails 

to clear; and 

(3) at the discretion of the Chief Compliance Officer, any claim involving the 

interests of the SEF, its Participants, their business relations or trading in general 

not otherwise arbitrable under these rules, provided the parties have consented to 

such arbitration. 

(d) Waiver of Any Objection to Jurisdiction. 

Any Person who is not a Participant who submits a claim or grievance to arbitration or 

any Person who appeals any arbitration decision, or who takes any steps therein, shall be 

conclusively presumed to have voluntarily recognized and agreed to the jurisdiction of 
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the SEF and any Regulatory Services Provider or other Registered Entity with whom the 

SEF has contract pursuant to Rule 1103 to hear and determine the claim or appeal. 

RULE 1102. INITIATING AN ARBITRATION CLAIM 

(a) A claimant may initiate an arbitration proceeding against a respondent by serving a 

Notice of Arbitration on the respondent and the Compliance Department, together with 

proof of service, within two years from the date the cause of action accrued. 

(b) The Notice of Arbitration served on the Compliance Department shall be accompanied by 

the claimant’s non-refundable check for arbitration filings fees, which shall be as follows: 

Amount of Relief Requested Filing Fee 

up to $5,000 $100 

over $5,000 and up to $25,000 $250 

over $25,000 and up to $100,000 $500 

over $100,000 $1,500 

(c) The Notice of Arbitration shall set forth the name and address of the claimant(s) and 

respondent(s), the nature of the allegations against the respondent(s), the relief requested 

and the factual and legal basis for granting such relief. 

(d) Any documents regarding a SEF Arbitration may be served, and service shall be deemed 

completed upon: (i) hand delivery, (ii) deposit in the United States mail, postage paid, via 

registered mail or certified mail return receipt requested; (iii) deposit in nationally 

recognized overnight mail carrier; or (iv) sending of such documents by electronic mail 

with a confirmation copy promptly sent by United States mail. Service made on the 

claimant and respondent shall be made to the address provided by the claimant and 

respondent to the SEF for notices from the SEF. Service to the Compliance Department 

shall be made at the address of the SEF to the attention of the Compliance Department. 

RULE 1103. AGREEMENT WITH REGULATORY SERVICES PROVIDER 

The SEF may, at any time, choose to contract with a Regulatory Services Provider, or other 

Registered Entity, for the provision of regulatory services which includes, without limitation, 

assistance with the resolution of disputes pursuant to the SEF Rules. Any act or requirement that 

is required to be performed by the SEF under the SEF Rules, with respect to arbitration 

proceedings may be performed by a Regulatory Services Provider. The SEF shall retain ultimate 

decision-making authority with respect to any functions that are contracted to a Regulatory 

Service Provider. 
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Chapter 12

MISCELLANEOUS 

RULE 1201. MARKET DATA 

(a) Subject to each Participant’s or Customer’s or rights in its own data, all Participants, 

Customer of Participants and Clearing Members acknowledge and agree that the SEF 

shall have a proprietary interest in all market data and information entered into and/or 

created on the SEF and/or displayed on the SEF’s systems (“SEF Market Data”) 

including without limitation: 

(1) price, quantity, structure, date and time of entry of each and every bid and offer 

submitted on the SEF; 

(2) price, quantity, structure, date and time of trade execution of each and every 

Trade executed on the SEF; 

(3) the end of day price for each instrument traded on the SEF; 

(4) any information that can be derived from (a), (b) or (c) above; and 

(5) the dissemination or transmission of SEF Market Data to Participants, Customers 

Clearing Members and/or any publisher of market data with whom the SEF has a 

written agreement, provided that SEF Market Data is anonymized and aggregated. 

(b) Except as permitted by the SEF Rules, Participants, Customer, and Clearing Members 

shall not sell, distribute, re-transmit, transfer, license or otherwise provide SEF Market 

Data to any third-party. The SEF will not use SEF Market Data to replicate or reverse 

engineer the trading strategy of a Participant or Customer. 

(c) Except in respect of its Participant data, Participant shall not (a) provide to any third party 

access to or the ability to use the SEF, SEF Market Data, or any content or data that may 

be accessible , in whole or in part, on the SEF, (b) store, copy, modify, reverse engineer, 

reverse assemble or reverse compile the Trading System, SEF Market Data, or any 

content or data that may be accessible, in whole or in part, on the SEF; (c) distribute, rent, 

sell, retransmit, redistribute, release or license to any third party other than a Participant 

the Trading System , the SEF Market Data, or any content or data that may be accessible , 

in whole or in part, on the SEF, and (d) use the SEF, the SEF Market Data, or any content 

or data that may be accessible, in whole or in part, on the SEF in constructing or 

calculating the value of any index or index products. For the avoidance of any doubt this 

section shall not prohibit Participant and/or Clearing Member from (i) providing the 

Trading System , SEF Market Data, any content or data that may be accessible, in whole 

or in part, on the SEF to an employee of a Participant and/or Clearing Member engaged 

in risk management or supervisory activities with the authority to establish, monitor, or 

modify credit controls for orders transmitted entered, or (ii) use SEF Market Data for 

internal business and regulatory reporting purposes. 
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(d) The SEF acknowledges and agrees that a Participant shall be permitted, and the SEF 

hereby grants Participant a non-exclusive, revocable, non-transferable and royalty-free 

license (without warranties of any kind, express or implied), to use for the benefit of the 

Participant the SEF Market Data, and in particular to use the SEF Market Data to create 

pricing data for Participant’s internal business purposes and Participant shall retain all 

ownership and proprietary interest with respect to such pricing data. Subject to the 

foregoing license, and subject to a Participant’s rights in its Participant Data as between 

the SEF and the Participant, the SEF retains all ownership and proprietary interest with 

respect to the SEF Market Data. 

RULE 1202. INFORMATION SHARING 

(a) The SEF 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 trade. As part of any information-sharing agreements or other 

arrangements or procedures adopted pursuant to this Rule, the SEF may: 

(1) provide market surveillance reports to the CFTC, any Government Agency with 

jurisdiction over the SEF or, as necessary for the SEF to comply with its SRO 

obligations, to other markets; 

(2) share information and documents concerning current and former Participants with 

the CFTC, any Government Agency with jurisdiction over the SEF or, as 

necessary for the SEF to comply with its SRO obligations, to other markets; 

(3) share information and documents concerning ongoing and completed 

investigations with the CFTC, any Government Agency with jurisdiction over the 

SEF or, as necessary for the SEF to comply with its SRO obligations to other 

markets; and/or 

(4) require its current or former Participants to provide information and documents to 

the SEF at the request of the CFTC, any Government Agency with jurisdiction 

over the SEF or, as necessary for the SEF to comply with its SRO obligations, 

other markets. 

(b) The SEF may enter into any information sharing arrangement with any Person or body 

(including, without limitation, the CFTC, the NFA, any Self-Regulatory Organization, 

any exchange, market, or clearing organization, or foreign regulatory authority) if the 

SEF considers such arrangement to be in furtherance of the SEF’s purpose or duties 

under the SEF Rules or any law or regulation. 

(c) The SEF may disclose to any Person or entity information concerning or associated with 

a Participant or other Person that the SEF believes is necessary and appropriate in 

exercising a legal or regulatory function, whether or not a formal arrangement governing 

the disclosure exists or a request for information was made. 
 - 80 - 

RULE 1203. SEF EMPLOYEES 

(a) SEF employees, officers, agents, independent contractors and consultants are prohibited 

from disclosing material, non-public information obtained as a result of their employment 

or relationship with the SEF. SEF employees, officers, agents, independent contractors 

and consultants are prohibited from providing non-public information obtained as a result 

of their employment or relationship with the SEF if such employee, officer, agent, 

independent contractor or consultant expects or should have reasonably expected that 

such disclosed information may assist a Person trading in an instrument traded on the 

SEF or other trading venue. 

(b) Except as otherwise provided, an employee or officer of the SEF shall not, directly or 

indirectly, buy or sell any instruments traded on the SEF, or any other trading venue that 

trades Swaps or other CFTC-jurisdictional contracts. This rule does not prohibit an 

employee or officer of the SEF that has received the prior written approval of the SEF’s 

Chief Compliance Officer from participating in a pooled investment vehicle or other 

investment vehicle that is directed by a third-party advisor over which the SEF officer or 

employee has no direct or indirect control. 

(c) Except as permitted in writing by the Chief Executive Officer, no Participant or 

Authorized Traders shall, directly or indirectly, give or permit to be given anything of 

value, including gifts and gratuities, in excess of one hundred dollars ($100) per 

individual per year to a SEF Official or employee. 

RULE 1204. NO ENDORSEMENT OF OPINIONS, RESEARCH OR 

RECOMMENDATIONS 

Any opinions, research or recommendations appearing on the Trading System are not the SEF’s 

opinions, research or recommendations, and the SEF does not endorse them or any content 

provided by third parties. 

RULE 1205. NOT A PARTY 

The SEF is not directly or indirectly a party to or participant in any trade or Swap executed on or 

pursuant to the rules of the SEF. 

RULE 1206. NO ADVICE 

The SEF is not providing and shall not provide any financial, legal, tax, advisory, consultative or 

business services to Participant, or advice on structuring Transactions or drafting or negotiating 

Transaction documentation. Participant should seek its own legal, tax, financial and other advice 

when structuring, negotiating and/or documenting Transactions. 

RULE 1207. EXTENSION OR WAIVER OF RULES 

If necessary and expedient, the SEF may, in its sole discretion, waive, or extend the time period 

for performing, any act or acts designated by the SEF Rules, but only to the extent such waiver 

or extension is not inconsistent with the CEA or the CFTC Regulations. 
 - 81 - 

RULE 1208. EFFECT OF AMENDMENT, REPEAL OR NEW RULE 

(a) These SEF Rules may be modified or amended by the SEF by posting such amendments 

to the SEF website, and any such amendment shall be applicable to and binding and shall 

be effective when posted. 

(b) If an amendment or repeal of a SEF Rule or adoption of a new SEF Rule does not 

materially change the terms or conditions of a Contract and does not affect the value of 

open Contracts as determined by the Board in its sole discretion, then the effective date of 

any amendment or repeal of a SEF Rule or adoption of a new SEF Rule relating to 

Contracts is binding on all Contracts entered into before and after the effective date of 

such amendment, repeal or adoption. 

(c) If an amendment or repeal of a SEF Rule or adoption of a new SEF Rule materially 

changes the terms or conditions of a Contract or affects the value of open Contracts as 

determined by the Board in its sole discretion, then the amendment, repeal or new SEF 

Rule is binding only on Contracts listed for trading after the effective date of such 

amendment, repeal or adoption, and Contracts listed as of the effective date of such 

amendment, repeal or adoption with no open positions then in existence, unless otherwise 

specifically provided by the Board. 

RULE 1209. GOVERNING LAW, JURISDICTION AND DISPUTE RESOLUTION 

(a) The law of the State of New York governs the SEF Rules; provided, however, that if 

Participant provides an opinion of a counsel (i) stating that the Participant cannot be 

subject to the law of the State of New York and must be subject to the law of the 

jurisdiction of the location where the Participant is organized (the “Local Law”) and (ii) 

enumerating specific Rules that must be subject to the Local Law, then FTSEF will 

specify the application of the Local Law to the enumerated Rules; provided, further, that 

in no event shall Local Law supersede any provision of the CEA. 

(b) Any dispute between the SEF and a Participant arising from or in connection with the 

SEF Rules will be settled by arbitration pursuant to Chapter 11. All Participants 

unconditionally and irrevocably waive any and all right to trial by jury in connection with 

any such dispute. 

 
 - 82 - 

Chapter 13 

CONTRACT SPECIFICATIONS 

The SEF’s NDF contract specifications are as follows: 

Contract Overview A non-deliverable forward (NDF) is an outright forward contract 

in which counterparties settle the difference between the 

contracted NDF price or rate and the prevailing spot price or rate 

on an agreed notional amount 

Reference Currency Brazilian Real USD/BRL

Chilean Peso USD/CLP

Chinese Yuan USD/CNY

Columbian Peso USD/COP

Indonesian Rupiah USD/IDR

Indian Rupee USD/INR

Korean Won USD/KRW

Malaysian Ringgit USD/MYR

Peruvian Sol USD/PEN

Philippine Peso USD/PHP

Russian Ruble USD/RUB

New Taiwan Dollar USD/TWD

Settlement Currency Non-deliverable forwards (NDFs) settle in USD 

Quoting Convention and 

Minimum Increment 

Notional amount, as agreed by the counterparties 

Minimum Size Notional amount, as agreed by the counterparties 

Notional Currency Currency in which contract size is expressed in 

Trading Conventions Buy or Sell which refers to the contract size expressed in notional 

currency 

Forward Rate Currency exchange rate expressed as the amount of reference 

currency per unit of non-reference currency 

Trade Date The date on which parties enter into the contract 

Settlement Date Specified settlement of Payment date 

Fixing Date The date at which the difference between the prevailing market 

exchange rate and the agreed upon exchange rate is calculated 

Settlement Procedure Bilateral settlement performed in the settlement currency 

Trading Hours FTSEF will offer trading 24 hours a day during regular trading 

days with a brief system shutdown between 5:00 and 5:20 EST 

daily. 

Clearing Venue Bilateral 

Block Size Minimum Block size is set to $25,000,000 USD for all currencies.

Speculative Limits As set forth in CFTC 17 CFR Part 151 

Reportable Levels As set forth in CFTC Regulation 15.03 
 - 83 - 

THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK 
EXHIBIT A
Page | 1

April 2, 2015

Dodd Frank Act ‐ Swap Transaction Reporting Party Requirements

This version supersedes the one published on May 30, 2014.

Latest updates can be found on ISDA’s Data & Reporting website

http://www2.isda.org/functional-areas/technology-infrastructure/data-and-reporting/

1. Background to This Document and Status 

The generation of a Unique Swap Identifier (“USI”) can be linked to reporting counterparty (“RP”) 

responsibilities while the process of USI generation and determination of an RP are separate and distinct 

processes.

The ISDA USI Working Group was responsible for the USI generation and documentation of RP rules 

which are discussed with and agreed to by the various asset class implementation groups and steering 

committees. The ISDA Data and Reporting Compliance Working Group (“DWG”) will identify next steps 

and ongoing maintenance of this document.

2. Reporting Party Requirements 

The Commodity Futures Trading Commission (“CFTC” or “Commission”) specified in the final rules for 

Part 45 that complete data concerning swaps is available to regulators, including:

1. Creation data; and

2. Continuation data of all life cycle events affecting the terms of the swap until final termination or 

expiration.

The CFTC also specified in the final rules for Part 43 that certain anonymized data concerning swaps is 

publicly disseminated to enhance price discovery and increase transparency. Registered entities and 

swap counterparties must report swap creation data electronically to a Swap Data Repository (“SDR”). 

Required swap creation data includes all primary economic terms (“PET”) data and all confirmation data 

for a swap. Required swap continuation data must be reported to the SDR to ensure that all data 

concerning the swap remains current and accurate and includes any change to the primary economic 

terms of the swap. Continuation data generally must be reported by a swap dealer (“SD”) or major swap 

participant (“MSP”) to the SDR no later than the same day of such a change (non‐SD/MSP RPs 

have longer timeframes). Additionally, regulations require SD and MSP reporting counterparties to 

report valuation data to fully describe the daily mark of the transaction (such as the daily “mark to 

market”) for each of their swaps on a transactional basis.

Registered entities and counterparties required to report swap creation data or swap continuation data 

may contract with third‐party service providers to facilitate reporting. However, these entities remain 

fully responsible for reporting as required by the regulations.
Page | 2

April 2, 2015

3. Reporting Counterparty Responsibility

The RP is the party to a swap with the responsibility to report a swap1to an SDR as soon as 

technologically practicable after execution in accordance with the Dodd Frank Act.2 Under the Dodd‐

Frank Act and CFTC regulations, one party must bear responsibility to ensure that the trade is reported. 

The CFTC has created a hierarchy whereby registered SDs always report when trading with MSPs or End 

Users and registered MSPs always report when trading with End Users. (See Annex 1)

For swaps executed on facility:

 For Parts 43 and 45 swaps executed on a SEF or DCM the SEF or DCM must report swap creation 

data to an SDR ‘‘as soon as technologically practicable.’’

 For Part 45 swap continuation data reporting only, if neither party is a U.S. person but the swap is 

executed on a SEF or DCM or otherwise executed in the U.S. or cleared by a DCO, then the parties 

are required to agree which counterparty will be the RP.

For swaps executed off‐facility: (both U.S. persons)

 For Parts 43 and 45, if only one party is an SD or MSP, the SD or MSP shall be the RP.

 For Parts 43 and 45, if one party is an SD and the other party is an MSP, the SD shall be the RP.

 For Parts 43 and 45, if both parties are SDs, the SDs shall designate which party shall be the RP 

(see section 5 ‐ Same Level Determination of the Reporting Party).

 For Parts 43 and 45, if both parties are MSPs, the MSPs shall designate which party shall be the RP 

(see section 5 ‐ Same Level Determination of the Reporting Party).

 For Part 45 only:

o If both parties are non‐SDs/MSPs, and only one party is a financial entity,3 the

party that is a financial entity is the RP.

o If both parties are non‐SDs/MSPs that are financial entities or non‐SDs/MSPs that are not 

financial entities, the parties shall designate which party (or its agent) will be the RP.

 For Part 43 only:

o If both parties are non‐SDs/MSPs, the parties shall designate which party (or its agent) 

shall be the RP for the publicly reportable swap transaction (see section 5

‐ Same Level Determination of the Reporting Party). 

1

 Under Part 45 all swaps must be reported; however the reporting requirements under Part 43 only require an RP to report a 

“publicly reportable swap transaction” which means:

(I) Any executed swap that is an arm's‐length transaction between two parties that results in a corresponding change in 

the market risk position between the two parties; or

(2) Any termination, assignment, novation, exchange, transfer, amendment, conveyance, or extinguishing of rights or obligations 

of a swap that changes the pricing of the swap.

2

Dodd–Frank Wall Street Reform and Consumer Protection Act, Pub.L. 111‐203, 124 Stat. 1376 (2010).

3

As defined in Section 2(h)(7)(C) of the Commodity Exchange Act.
Page | 3

April 2, 2015

For swaps executed off‐facility: (one U.S. person only)

 For Part 45 only, if both parties are non‐SDs/MSPs, the U.S. person is the RP.

 For Part 43 only, if both parties are non‐SDs/MSPs the parties shall designate which party (or its 

agent) shall be the RP for the publicly reportable swap transaction.

 For Parts 43 and 45, the Commission generally agrees that if a registered SD or MSP is a party to a 

swap, regardless of whether it is non‐U.S. person, it should be the RP in accordance with the 

hierarchy described above for swaps with two U.S. persons.

For swaps accepted for clearing:

The determination of the RP under § 45.8 of the Commission's Regulations applies to all swaps, both 

cleared and non‐cleared. The general hierarchy for determining the RP for swaps accepted for clearing is 

the same as that detailed above for swaps executed off‐facility.

However, it should be noted that with respect to the definition of non‐SD/MSP set forth in §

45.1 of the Commission's Regulations, the CFTC Staff interpret the regulations such that DCOs will have 

reporting obligations for cleared swaps that are not dependent on whether the DCO is deemed to be an 

RP.

Further details on the reporting of cleared swaps transactions can be found in the CFTC Division of 

Market Oversight publication entitled “Frequently Asked Questions (FAQ) on the Reporting of Cleared 

Swaps”.4

4. Designation of reporting responsibilities:

Parties required to report pursuant to Part 43 or Part 45 may contract with third parties to facilitate 

reporting. In this context, third parties may include, but are not limited to, the other counterparty to the 

swap, a third party service provider as well as the DCO in the case of a cleared swap. As a result, the RP 

may delegate the actual process of reporting data to the SDR to the other counterparty as well as to a 

third party. However, the party that is required to report remains fully responsible for compliance with 

the reporting obligations under Part 43 and Part 45.

4 Available at:

http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/clearedswapreportingredline_fa.pdf
Page | 4

April 2, 2015

5. Same Level Determination of the Reporting Party

In situations where both counterparties have the same hierarchical status in executing a swap 

transaction, the regulations established a mechanism for the parties to the swap transaction to follow in 

choosing the RP.

In such situations (e.g., both counterparties are SDs) the regulations require the counterparties to agree, 

as either one term of their swap transaction for off‐facility swaps or as a post‐ execution side agreement 

for swaps executed on an SEF or DCM, which counterparty will fulfill the reporting obligations with 

respect to the swap. Therefore SDs and MSPs are establishing a set of rules (“Reporting Party Rules”) 

for each swap transaction to determine which counterparty has the RP responsibility for real‐time, 

creation and continuation data for situations where the CFTC Regulations indicate that the parties shall 

agree on the RP as a term of the swap transaction.

Prime Brokerage Intermediation

Notwithstanding the reporting hierarchy in Parts 43 and 45 and the Reporting Party Rules provided 

below, an alternative approach to RP determination applies to transactions intermediated by a Prime 

Broker (“PB”). In brief and in very general terms, under customary PB arrangements, a client of a PB 

agrees on the terms of a PB intermediated trade with an Executing Broker (“EB”) and then the client 

and/or the EB gives up the trade to a PB for its acceptance. If the trade terms are within certain preagreed parameters and the PB thus accepts the trade, the result is two off-setting transactions, one 

between the EB and PB and the second between the PB and the client. In these cases, reporting 

eligibility for each trade is determined independently based on the status of the two parties to the 

transaction, and the reporting responsibilities are as follows:

EB is the RP for the EB-PB trade 

PB is the RP for the PB-Client trade

For the avoidance of doubt, there is no separate transaction between the EB and client to report.

Please note: The above approach to determine the RP to a PB Intermediated swap was acknowledged by 

the CFTC in No Action Letter No. 12-531. Although the relief under NAL 12-53 has expired, the RP 

approach is still industry best practice, and ISDA continues to work with the CFTC to permanently adopt 

the approach in revisions to Part 43 and Part 45. Included in those discussions are outstanding questions 

regarding cross-border treatment for PB Intermediated transactions (e.g. if EB and/or PB is not a SD, MSP 

or U.S. Person).

 

1

http://www.cftc.gov/LawRegulation/CFTCStaffLetters/12-53
Page | 5

April 2, 2015

6. Reporting Party Rule Determination: status and description of the rule

The ISDA Unique Swap Identifier (USI)/(UTI) Trade Identifier Working Group proposed that each

asset class Steering Committee would determine the “Reporting Party Rules” for the asset class where 

two parties to a swap transaction are on the same hierarchical level. This proposal was approved and 

ratified by the DWG.

Because of the different characteristics and workflows of the various asset classes: Rates, Credit, 

Equity, Commodity and FX, each asset class is required to analyze in detail the specific trade workflows in 

formulating a “Reporting Party Rule” convention unique to that asset class.

Regardless of asset class, each set of reporting party rules provided below assumes that both parties 

have a reporting obligation under the Commission’s requirements. In the event only one party has a 

reporting obligation, that party is the RP.

1. Credit

6.1 Reporting Party Rules

Where both parties are the same hierarchy level (e.g., MSP vs. MSP, SD vs. SD, or non‐ SD/MSP vs. 

non‐SD/MSP), the RP is the Floating Rate Payer (a/k/a ‘seller’). For Swaptions, the RP is the Floating 

Rate Payer of the underlying swap.

For Real Time Reporting of step‐in novations, the RP should be determined between the Transferor 

and Transferee based on the above and the position of the Transferee. So, if both parties are of the 

same classification and the Transferee is the Seller (Floating Rate Payer) in the novated transaction, 

the Transferee is the RP. If the Transferee is the Buyer (Fixed Rate Payer), then the Transferor is the 

RP.

For novated transactions, the RP should be reassessed between the Transferee and

Remaining Party based on the above.
Page | 6

April 2, 2015

2. Rates

Product Attribute Determination

Tiebreaker Logic

When the LEI/pre-LEI tiebreaker is invoked the following processes will be used:

 1. Identifier Tiebreaker Logic Scenarios

i. When only one firm has an LEI/pre-LEI then the party with the LEI/pre-LEI is the 

RP.

ii. When both firms have an LEI/pre-LEI then determine based on comparison of the 

two LEI/pre-LEIs in accordance with the below.

2. Determining sort order of identifiers

 LEI/pre-LEI are comprised of characters from the following set {0-9, A-Z}.

 For avoidance of doubt, before comparing IDs convert all IDs to UPPER CASE 

only.

 For comparison basis the sort order will be reverse ASCII sort order. For 

avoidance of doubt the following are sort order of precedence:

o Z, Y, X, W, V, U, T, S, R, Q, P, O, N, M, L, K, J, I, H, G, F, E, D, C, B, A, 9, 8, 

7, 6, 5, 4, 3, 2, 1, 0.

3. When comparing two IDs the RP will be the firm with the first ID in the list when sorted in 

reverse ASCII sort order.
Page | 7

April 2, 2015

3. Equity

When both parties are of the same hierarchy level, the RP will be the:

 Seller of performance on any product in the taxonomy.5

 Seller of product on all other (exotic) products in the taxonomy.

 If seller cannot be identified the fall back would be for the parties to agree amongst 

themselves.

 For Portfolio Swaps Agreements (PSA’s) the seller will remain the seller regardless of the 

underlying’s performance.

For the avoidance of doubt, if the trade is confirmed via negative affirmation, the provider of the 

negative affirmation agreement is the RP.

5 http://www2.isda.org/otc‐taxonomies‐and‐upi/
Page | 8

April 2, 2015

4. Commodities

A seller convention applies if the executed trade is one of the trade types enumerated in the table 

below. Otherwise, the LEIs of the parties should be compared in standard ASCII order and the party 

with the first ID in the list will be the RP.

RP Tiebreaker Logic - Commodities

Trade Type Explanation Reporting Party

Fixed Floating Swap Seller of the Fixed leg = Reporting Party Fixed leg seller (Receiver of

Cash on the fixed leg)

Option Receiver of premium payment or Option 

writer

Seller

Swaption Receiver of premium payment or Swaption 

writer

Seller

Option Strategies

(Collars, Corridors, Multileg)

Premium receiver is the Seller = Reporting

Party

Premium Receiver

If no premium, go to alpha convention Go to alpha convention

For trade types not listed above

Seller convention with

Alpha

Any trade that falls outside of that list will have the alphanumeric ASCII 

convention applied based on the LEI/CICI. The LEI/CICI selected as the RP will be 

the LEI/CICI at the top of that sort order. As an example, ASCII is the same sort 

logic that MS Excel applies.
Page | 9

April 2, 2015

5. FX

When asset class tie‐breaker logic needs to be applied:

 For Cash trades: The RP is the counterparty selling the currency that occurs first in the 

26‐letter English alphabet.

 For Options: The RP is the seller of the option.

RP Tie Breaker Logic - FX

Taxonomy Rule Comment

Forward FX Cash Rule For FX Swaps, the Reporting Party of both legs of the swap would 

be determined by applying the Cash Rule to the far-leg of the 

Swap

NDF FX Cash Rule n/a

Option Option Seller Rule n/a

NDO Option Seller Rule n/a

Simple Exotic Option Seller Rule n/a

Complex Exotic See comment For a complex exotic product where there is an unambiguous 

seller of the product, then Option Seller Rule would apply. The 

seller determination would be driven by the seller as agreed in 

the standard FpML representation of the product. IF there is no

clear seller, then the FX Cash Rule would apply.

For more information see:

http://www.gfma.org/uploadedfiles/initiatives/foreign_exchange_(fx)/determiningreportingpartyun

derdoddfrank.pdf
Page | 10

April 2, 2015

7. Change in Registration Status 

On October 16, 2012, the ISDA DWG participants were polled to determine what should happen to 

the RP obligations on a trade executed between, for instance, an SD and a non‐MSP/SD, where at a later 

date, the non‐MSP/SD becomes an SD. Determination of RP may equally be impacted by a party’s 

deregistration as an SD/MSP.

Industry consensus was reached that the RP obligation remains unchanged through the remaining life of 

the USI until it is matured / terminated / novated away / compressed into a new transaction. The RP is 

reassessed only when a new USI is created. (In summary if an event does not result in a new USI, the RP 

remains unchanged. If the event results in a new USI, the RP is calculated a fresh for the new USI using 

the statuses effective at that date).

In general, a contract intrinsic event would not result in a new USI, nor would a bilaterally negotiated 

event that does not change the parties to the swap. Events that change the parties to the swap and/or 

result in a new swap(s) would prompt the creation of a new USI(s). The following table indicates which 

lifecycle events would result in a new USI at the point the event occurs or is executed:

Event Type

Triggers 

new USI 

Generation?

New Trade Y 

Amendment (correction to the trade for 

any trade attribute or fee) N 

Cancel (trade booked in error) N 

Trade Allocated 

Original Unallocated “Block” 

Trade 

Y

Allocated Trades Y (each allocation)

Cleared Positions 

Original Bilateral Trade (“alpha”) Y

Cleared Positions (“beta” and 

“gamma”)

Y 

Original Unallocated “Block” Trade Y

Block cleared pre-allocation Y

Post-clearing allocations Y (each allocation)

Termination / Unwind N 

Partial Termination / Partial Unwind / 

Partial Decrease 

N 

Increase / Decrease N 

Full or Partial Novation Original Trade (b/t Transferor and 

Remaining Party)

Y 

Novated Trade (b/t Transferee and 

Remaining Party)

Y

Fee trade (b/t Transferor and 

Transferee) (For Part 43 reporting 

only)

Y
Page | 11

April 2, 2015

Event Type (continued)

Triggers 

new USI 

Generation?

Full or Partial Novation – 4 way Original Trade (b/t Transferor 1 and 

Remaining Party)

Y 

Novated Trade (b/t Transferee 1 

and Transferee 2)

Y

Free Trade (b/t Transferor 1 and 

Transferee 1) (For Part 43 reporting

only)

Y (For Part 43 

reporting

Exercise Original Option Y

New Swap (resulting from 

Physically Settled option)

Y

Prime Brokerage EB-client execution n/a

EB: PB leg Y

PB: Client leg Y

Succession Events Rename N

Reorganizations Y (each new trade)

Credit Events Bankruptcy / Failure to Pay N

Restructuring Y6

Compression Events Original Trade ‐ Terminated N

Original Trade –

Amendment/Increase/Decrease

N

New Trade Y

CCP: Position Transfer (i.e. transfer of a

trade between Clearing Members)

Y

CCP: Compression Y

6 Depending on product type and triggering activity
Page | 12

April 2, 2015

8. Part 46 Historical Swap Reporting

As described in the prior section, each individual swap should have a single Reporting Party (RP) for the 

life of the swap. Therefore the party responsible for reporting an historic swap under the CFTC’s Part 46 

regulations should be the party that first incurs the RP obligation and retains that obligation throughout 

the remaining life of the swap, if any. Such RP should be determined in accordance with section 46.5 of 

the CFTC’s rules and the Reporting Party Rules specified in this document.

Given the uncertainties in the evolving regulation of the swaps marketplace, including but not limited to 

the interplay of the CFTC’s Cross Border Interpretive Guidance7, Exemptive Order8 and/or a change in 

the swap dealer registration status of counterparties, for a swap between two non‐U.S. Persons, the 

parties may have reporting obligations commence at different points in time. To prevent duplication or 

gaps in historic swap reporting, participants should determine the RP for an historic swap, whether live

or non‐live, based on the Reporting Party determination rules provided in this document, without regard 

to whether the other party’s reporting obligation is currently in effect, unless otherwise indicated in this 

Section 8. Each party should submit historical swap data for the swaps for which they are the RP in 

accordance with the commencement of their reporting obligation and in accordance with the reporting

logic developed and agreed to among the swap dealers then in effect at the time of their reporting 

obligation.

For swaps between two non‐U.S. persons, if a new swap (reportable under Part 45) was entered into in 

the time period where only one party (“Party 1”) had already a Part 45/46 reporting obligation while the 

Part 45/46 reporting obligation for the other party (“Party 2”) is still delayed/not yet in effect, Party 1 

may rely for its Part 45 reporting obligation for the new swap on the reporting party logic set forth in

this document with the result that any new trade not reported by Party 1 under Part 45 (because the

reporting party logic required Party 2 to report such trade) will be reported by Party 2 as part of its (later 

in time) Part 46 reporting obligation.

For swaps between two non‐U.S. persons, if a party to a swap changes its status and becomes a SD (the 

“New SD”) in the time period when all applicable time delays permitted under the Exemptive Order 

expired (e.g., the time period starting December 22, 2013), if the other party to the swap was a SD 

already prior to that time period (the “Old SD”), the Old SD may have already reported the historical 

swap data and, therefore would remain the RP for the life of the USI.

If one of the parties to the swap is a U.S. Person, that party may have already reported the historical 

swap data, and therefore would remain the RP for the life of the USI.

7 CFTC’s Interpretive Guidance and Policy Statement Regarding Compliance with Certain Swap Regulations

published July 26, 2013

8 CFTC’s Exemptive Order Regarding Compliance with Certain Swap Regulations published July 22, 2013
Page | 13

April 2, 2015

Annex 1 (CFTC Reporting Obligations)

SD/MSP Is the RP ‐ Reporting Obligation Flowchart – (Source CFTC Final Part 45 Rules)

* Swap subject to mandatory clearing: 30 minutes after execution (year 1), 15 minutes after execution (thereafter).

Swap not subject to mandatory clearing (credit, equity, FX, rates): 1 hour after execution (year 1), 30 minutes after execution (thereafter). But if 

the non‐reporting counterparty is not a financial entity, and verification is not electronic: 24 business hours after execution (year 1), 12 business 

hours after execution (year 2), 30 minutes after execution (thereafter).

Swap not subject to mandatory clearing (other commodities): 4 hours after execution (year 1), 2 hours after execution (thereafter). But if the 

non‐reporting counterparty is not a financial entity, and verification is not electronic: 24 business hours after execution (year 1), 12 business 

hours after execution (year 2), 30 minutes after execution (thereafter).
Page | 14

April 2, 2015

Non‐SD/MSP is the RP ‐ Reporting Obligation Flowchart – Source (CFTC Final Part 45 Rules)

Was the swap 

executed on SEF 

or DCM?

Yes No

Was the swap 

cleared?

Was the swap 

cleared?

Yes No Yes No

The non-SD/MSP has no 

reporting obligations.

The DCM/SEF reports PET and 

confirmation data in a single report, 

ASATP after execution. The DCO 

reports confirmation data, ASATP 

after clearing; valuation data, daily; 

and all other continuation data on 

the day a change to a primary 

economic term occurs.

The non-SD/MSP reports:

▪ Valuation data: quarterly basis.

▪ All other continuation data: the 

first year of reporting, by the

end of the second business day 

following the date of a change

to a primary economic terms; 

thereafter, by the end of the first 

business day following the date of 

a change.

The DCM/SEF reports PET

data, ASATP after execution.

Was the swap accepted for 

clearing before the application 

deadline* for the non-SD/MSP 

to report PET data?

The non-SD/MSP reports::

▪ PET data: ASATP after execution, but no later 

than the application deadline*.

▪ Confirmation data: for the first year of 

reporting, within 48 business hours after 

confirmation; for the second year of 

reporting, within 36 hours after 

confirmation; thereafter within 24 business 

hours after confirmation.

▪ Valuation data: quarterly basis.

▪ All other continuation data: the first year of 

reporting, by the end of the second business 

day following the date of a change to a 

primary economic terms; thereafter, by the 

end of the first business

Yes No day following the date of a change.

The non-SD/MSP has no reporting obligations

The DCO reports PET and confirmation data in a single 

report ASATP after clearing; valuation data, daily; and all 

other continuation data on the day a change to a primary 

economic term occurs.

The non-SD/MSP reports PET data: ASATP after execution, 

but no later than the applicable deadline*. The DCO 

reports confirmation data, ASATP after

clearing; valuation data, daily; and all other continuation

data on the day a change to a primary economic term occurs.

* Swap subject to mandatory clearing: 4 hours after execution (year 1), 2 hours after execution (year 2), 1 hour after execution (thereafter)

Swap not subject to mandatory clearing: 48 business hours after execution (year 1), 36 business hours after execution (year 2), 24 business 

hours after execution (thereafter)