Received CFTC 

Records Section 

?/1~/br 

ELX Futures 

Neal L. Wolkoff 110 East 59th Street 

ChiefExecutive Officer 

ELX Futures L.P. 

www.elxfutures.com 

T. 212 294 8056 

F. 212 294 8058 New York, NY 10022 

nwolkoff@elxfutures.com 

By e-Mail and Mail 

September 14, 2009 

Mr. David A. Stawick 

Secretary to the Commission 

Commodity Futures Trading Commission 

Three. Lafayette centre 

1155 21st Street, N.W. 

Washington, D.C. 20581 

secretarv@cftc.gov COMMENT 

Re: Account Class, 17 CFR Part 190, 74 FR 40794. 09-009 

Dear Mr. Stawick: 

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ELX Futures, L.P. ("ELX Futures") is submitting this comment letter in connection to the 

above-referenced Proposed Rule. ELX Futures is registered with the Commodity Futures 

Trading Commission ("CFTC") as a Designated Contract Market ("DCM"), and does not 

own or control a Designated Clearing Organization ("DCO") as part of our operations. 

Rather, ELX Futures relies on a third party, independent DCO to provide clearing 

services. We are concerned that the lack of specificity in the Proposed Rules combined 

with our lack of control over the clearing of trades poses unknown risks or burdens. 

At issue is the following section from the Proposed Rule: 

However, consistent with the intentions specified in . 

the Proposing Release,\24\ the Commission proposes to limit ''cleared 

OTC derivatives" to only those positions in "cleared-only contracts" 

that (along with the money, securities, and/or other property 

margining, guaranteeing, or securing such positions) are required to 

have been (i) segregated in accordance with a rule, regulation, or 

order issued by the Commission, or (ii) held in a separate account for 

"cleared-only contracts" in accordance with the rules or bylaws of a 

DCO. The Commission does not intend to specify substantive requirements 
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for the treatment of cleared OTC derivatives (and the money, 

securities, and/or other property margining, guaranteeing, or securing 

such derivatives). Rather, the Commission proposes to define "cleared 

OTC derivatives" in such a manner as to specify the sources from which 

such substantive requirements may originate. Moreover, by including 

contracts that "are required to be segregated * * *or to be held in a 

separate account" for "cleared-only contracts," the Commission seeks 

to avoid the need to engage in fact-intensive post-bankruptcy inquiries 

regarding compliance with such requirements. 

We ask for clear guidance to the clearing ofOTC derivatives should we become a listing 

venue for cleared products or an exchange venue for the trading of products which 

formerly were traded as OTC derivatives. 

Our questions, on which we ask for greater clarity, are as follows: 

• wliether the DCO will be permitted to cross margin the new account class 

envisioned by the Proposed Rules against related products in different 

account classes. For instance, will cleared OTC interest rate derivatives in 

the new account class be permitted or prohibited from being cross 

margined with U.S. Treasury futures contracts or Eurodollar futures 

contracts in a separate segregated account class? 

• What constitutes a "cleared only" contract? If an OTC derivative is 

offered for exchange trading (thus losing the moniker OTC derivative) but 

fails to trade, or trades fewer than 100 contracts per day, is it considered 

cleared only? 

• How much time will a contract be given to reach a liquidity threshold 

before being deemed "cleared only" and required to be placed in a new 

account class? 

• Will 4d exemptions still be granted after the new account class is created? 

• What will be the status of previously granted 4d exemptions, and will they 

be grandfathered or required to be transferred into the new account status? 

Based on the information in the Proposed Rule ELX Futures is not now in a position to 

determine the answers to these questions to best evaluate the potential impact of the 

Proposed rules. Thus, when the Proposal states that, "The amendments are not expected 
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to have an effect on efficiency or competition," we are concerned and unsure that the 

statement is correct without understanding the Proposal with greater clarity. 

Thank you for your consideration. 

Sincerely,