SUBMISSION COVER SHEET

IMPORTANT: Check box if Confidential Treatment is requested 

Registered Entity Identifier Code (optional): 23-442 (2 of 2)

Organization: NEX SEF Limited ("NEX SEF")

Filing as a: DCM SEF DCO SDR 

Please note - only ONE choice allowed.

Filing Date (mm/dd/yy): 10/24/23 Filing Description: Initial listing of Korean Won (KRW) 

and Taiwan Dollar (TWD) Options Contracts

SPECIFY FILING TYPE 

Please note only ONE choice allowed per Submission.

Organization Rules and Rule Amendments

Certification § 40.6(a)

Approval § 40.5(a)

Notification § 40.6(d)

Advance Notice of SIDCO Rule Change § 40.10(a)

SIDCO Emergency Rule Change § 40.10(h)

Rule Numbers: 

New Product Please note only ONE product per Submission.

Certification § 40.2(a) 

Certification Security Futures § 41.23(a)

Certification Swap Class § 40.2(d)

Approval § 40.3(a)

Approval Security Futures § 41.23(b)

Novel Derivative Product Notification § 40.12(a)

Swap Submission § 39.5

Product Terms and Conditions (product related Rules and Rule Amendments)

Certification § 40.6(a) 

Certification Made Available to Trade Determination § 40.6(a)

Certification Security Futures § 41.24(a)

Delisting (No Open Interest) § 40.6(a) 

Approval § 40.5(a)

Approval Made Available to Trade Determination § 40.5(a)

Approval Security Futures § 41.24(c)

Approval Amendments to enumerated agricultural products § 40.4(a), § 40.5(a)

“Non-Material Agricultural Rule Change” § 40.4(b)(5)

Notification § 40.6(d)

Official Name(s) of Product(s) Affected:

Rule Numbers: 
20 S Wacker Dr Chicago, IL 60606 T 312 466 7478 tim.elliott@cmegroup.com cmegroup.com

1

Timothy Elliott

Managing Director and Chief Regulatory Counsel

Legal Department

October 24, 2023

VIA ELECTRONIC PORTAL

Mr. Christopher J. Kirkpatrick

Office of the Secretariat

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581

Re: CFTC Regulation 40.2(a) Certification. Initial listing of the Korean Won (KRW) 

and Taiwan Dollar (TWD) Option Contracts.

NEX SEF Submission No. 23-442 (2 of 2)

Dear Mr. Kirkpatrick:

NEX SEF Limited (“NEX SEF”) is certifying to the Commodity Futures Trading Commission (“CFTC” or 

“Commission”) the initial listing of the Korean Won (KRW) and Taiwan Dollar (TWD) foreign exchange 

(“FX”) option contracts (the “Contracts”) for trading effective November 13, 2023.

NEX SEF is amending Rule 803(1) (“Foreign Exchange Options”) to provide the specifications of the 

Contracts (collectively, the “Rule Amendments”). 

Core Principle Analysis

NEX SEF reviewed the swap execution facility core principles (“Core Principles”) as set forth in the 

Commodity Exchange Act (“CEA” or “Act”) and identified that the Rule Amendments may have some 

bearing on the following Core Principles:

Core Principle 2 – Compliance with Rules: Trading in the Contracts will be subject to all NEX 

SEF Rules, including the rules on trading procedures set forth in Chapter 3 of its rulebook, the 

prohibitions against fraudulent, noncompetitive, unfair and abusive practices as outlined in 

Chapter 4 of its rulebook, and the dispute resolution and arbitration procedures of Chapter 5 of 

its rulebook. As with all products listed for trading on NEX SEF, trading activity in the Contracts 

will be subject to monitoring and surveillance by NEX SEF’s market regulation staff, which has 

the authority to exercise its investigatory and enforcement power where potential rule violations 

are identified.

Core Principle 3 - Swaps Not Readily Subject to Manipulation: The Contracts are not readily 

subject to manipulation because of the underlying market and reliance on a well administered 

index.

Core Principle 4 – Monitoring of Trading and Trade Processing: Trading in the Contracts will 

be subject to the NEX SEF rules (“Rulebook”) which include prohibitions on manipulation and 

price distortion.

Core Principle 9 – Timely Publication of Trading Information: NEX SEF will publish trading 

volumes and price information in the Contracts daily on its website.

Core Principle 10 - Recordkeeping and Reporting: All required trade information is included in 

the audit trail and is sufficient for the Market Regulation Department to monitor for market abuse.

Appendix A, attached hereto, provides amendments to the NEX SEF Rule 803(1) in blackline format.
20 S Wacker Dr Chicago, IL 60606 T 312 466 7478 tim.elliott@cmegroup.com cmegroup.com

2

Pursuant to Section 5c(c) of the CEA and Regulation 40.2(a), NEX SEF hereby certifies that the Contracts 

comply with the Act, as amended, and the Commission’s regulations thereunder. There were no substantive 

opposing views to this proposal.

NEX SEF certifies that this submission has been concurrently posted on the CME Group website at 

http://www.cmegroup.com/market-regulation/rule-filings.html.

If you require any additional information regarding this submission, please contact the undersigned at (312) 

466-7478 or via email at CMEGSubmissionInquiry@cmegroup.com.

Sincerely,

/s/ Timothy Elliott

Managing Director and Chief Regulatory Counsel

Attachment: Appendix A – NEX SEF Rule 803(1) (blackline format)
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Appendix A

(additions underscored)

Products — Rule 803:

(1) Foreign Exchange Options (FX Options)

Contract 

Specification

Details

Product 

Description

FX Option: a transaction in which the buyer has the right, but not the obligation, to 

buy (call option) or sell (put option) a fixed amount of foreign exchange at a fixed 

exchange rate agreed by the parties for a specified time period.

Reference & 

Settlement 

Currencies Reference 

Currency

Counter 

Currency

Settlement 

Currency

Units of 

Trading

EUR USD USD EUR

GBP USD USD GBP

EUR GBP GBP EUR

USD JPY USD USD

EUR JPY EUR EUR

USD CHF USD USD

USD CAD CAD USD

AUD USD AUD AUD

USD MXN USD USD

USD CNH USD USD

USD INR USD USD

USD SGD USD USD

NZD USD NZD NZD

USD HKD USD USD

BRL USD USD USD

MXN USD USD USD

USD ZAR USD USD

EUR SEK EUR EUR

EUR CHF EUR EUR

USD KRW USD USD

USD TWD USD USD

Notional Amount As agreed by the parties

Option Style American and European

Option Premium As agreed by the parties

Premium 

Payment

Spot date relative to option trade date

Trading Hours 24 Hours, beginning at 6:00 a.m. Wellington Time on Monday (5:00 p.m. UTC on 

Sunday during NZDT/6:00 p.m. UTC on Sunday during NZST) and ending at 5:00 
4

p.m. New York Time on Friday (10:00 p.m. UTC during EST/9:00 p.m. UTC during 

EDT)

Quotation The price quotation is determined as a decimal number with up to five decimal 

places 

Units of Trading See current currency list above. 

Expiration Date 

and Time

As agreed by the parties

Settlement 

Terms

Bilateral settlement performed in Settlement Currency 

Settlement Date Settlement Date – Spot date relative to Expiration Date (if option is exercised)

Minimum Price 

Fluctuation/Price 

Tick Size

The minimum price change is 0.0001

Settlement 

Price

N/A

Strike Prices As agreed by the parties

Contract Size As agreed by the parties

Maturity Date As agreed by the parties

Exercise Manual. Exercise decision is determined by the buyer of the option.

Last Trading 

Day / Time

Not Applicable

Trading 

Conventions

a. Buyer of the option has the right, but not the obligation to buy (call option) 

or sell (put option) the Reference Currency 

b. Seller of the option must sell (call) or buy (put) the Reference Currency if 

exercised by the option buyer

Block Size 1 million notional units of Reference Currency; 2 million units minimum trade size

Position Limits Not Applicable

Reportable 

Levels

All FX Option trades are reported

Clearing FX Options are not cleared