ForecastEx LLC

October 25, 2023

Page 1 of 67

ForecastEx LLC Rulebook

Version Date: October 25, 2023

By accessing ForecastEx, regardless of any further action, undertaking, or agreement, any Person 

agrees to be bound by and comply with the Rules of the Exchange, the Rules of the 

Clearinghouse and Applicable Law, in each case to the extent applicable to it, and to become 

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

to, or in connection with, the status, actions or omissions of such Person. ForecastEx’s rules 

constitute a binding agreement between it and its Market Participants, and, in addition to any 

separate agreements, establish rights and Obligations between ForecastEx and its Market 

Participants.

Table of Contents

• Chapter 1 – Definitions

o Rule 101 - Definitions

• Chapter 2 – Governance

o Rule 201 – Ownership

o Rule 202 – Board of Directors

o Rule 203 – Committees

o Rule 204 – Officers

o Rule 205 – Indemnification

o Rule 206 – Conflicts of Interest

o Rule 207 – Confidentiality and Employee Restrictions

o Rule 208 – Limitation of Affiliate Participation

o Rule 209 – Recordkeeping

o Rule 210 – Regulatory Cooperation

• Chapter 3 – Membership and Access Privileges

o Rule 301 – Applications for Membership

o Rule 302 – Member Responsibilities

o Rule 303 – Sponsored Access

o Rule 304 - Customer Access to ForecastEx

o Rule 305 – Customer Account Requirements

o Rule 306 – Large Trade Reporting

o Rule 307 – Withdrawal of a Member

o Rule 308 – Dues, Fees, and Assessments

o Rule 309 – Application of Rules and Jurisdiction

o Rule 310 – Recording Conversations

o Rule 311 – Public Information

• Chapter 4 – Participation at ForecastEx

o Rule 401 – ForecastEx Event Positions

o Rule 402 – Hours of Operation

o Rule 403 – Bid Entry
ForecastEx LLC

October 25, 2023

Page 2 of 67

o Rule 404 – Placing Bids

o Rule 405 – Filling Bids

o Rule 406 – Entering Event Positions on Behalf of Customers

o Rule 407 - Error Trades

o Rule 408 – Position Accountability

o Rule 409 - Emergencies

o Rule 410 – Transfers

o Rule 411 – Market Data Available to Market Participants

o Rule 412 – Precedence of Federal Law

o Rule 413 – Contract Modifications

o Rule 414 – Accelerated Settlement

o Rule 415 – Event Review Process

• Chapter 5 – Obligations of Members

o Rule 501 – Recordkeeping

o Rule 502 – Financial Reporting Requirements

o Rule 503 – Treatment of Customer Funds

o Rule 504 – Confirmations and Customer Statements

o Rule 505 – Responsibility for Customer Bids

o Rule 506 – System Security

o Rule 507 – Documents Provided to Customers

o Rule 508 - Fraudulent or Misleading Communications

o Rule 509 – Prohibited Actions and Activities

• Chapter 6: Clearing Rules

o Rule 601 – Application of Clearinghouse Rules and Jurisdiction

o Rule 602 – Clearing

o Rule 603 – Settlement of Event Positions

o Rule 604 – Offsetting Positions

o Rule 605 – Deposit Procedures

o Rule 606 – Member Withdrawal Requests

o Rule 607 – Reconciliation

o Rule 608 – Full Collateralization Required

o Rule 609 – Collateral

o Rule 610 - Segregation of Funds

o Rule 611 – Concentration limits

o Rule 612 – Investment of Member Funds

o Rule 613 – Default of a Member

o Rule 614 - Clearinghouse Recordkeeping

o Rule 615 - KYC and AML.

o Rule 616 – Clearing Fund Contributions

o Rule 617 - Clearing Fund Purpose and Use

• Chapter 7 – Discipline and Enforcement

o Rule 701 – Monitoring the Market

o Rule 702 – Investigations

o Rule 703 – Notice of Charges

o Rule 704 – Offers of Settlement

o Rule 705 – Disciplinary Hearings
ForecastEx LLC

October 25, 2023

Page 3 of 67

o Rule 706 – Sanctions

o Rule 707 – Appeal

o Rule 708 – Summary Fines

o Rule 709 – Summary Suspension

o Rule 710 – Reporting Violations

• Chapter 8 - Arbitration

o Rule 801 – Matters Subject to Arbitration

o Rule 802 – Rules of Arbitration

o Rule 803 – Failure to Honor Arbitration

• Chapter 9 – Governing Law

o Rule 901 – Property Rights

o Rule 902 – Signatures

o Rule 903 – Governing Law

o Rule 904 – Legal Proceedings

o Rule 905 – Limitation of Liability

Chapter 1 – Definitions

Chapter 1 pertains to both the Clearinghouse and Exchange.

Rule 101 - Definitions

(a) When used in this Rulebook, the following terms shall have the respective meanings as 

follows:

(1) Access Privileges – The right to access, place Bids, and enter Event Positions in the 

Exchange Platform.

(2) Affiliate – IBG, Interactive Brokers Group, Inc., and its member companies which include 

any legal entity under IBG’s or Interactive Brokers Group, Inc.’s direct or indirect control.

(3) Affiliated Customer – A Customer of a Member or Sponsored FCM who is an Affiliate 

subject to the limitations in Rules 208 and 405(b).

(4) AML – Anti-money laundering.

(5) Appeals Panel – A panel of Board Members chosen by the ROC who oversee the appeals of 

disciplinary proceedings as described in Rule 707.

(6) Applicable Law – With respect to any Person, any statue, law, regulation, rule, or ordinance 

of any governmental or self-regulatory authority applicable to such Person, including the CEA, 

CFTC Regulations, and state regulations where applicable.
ForecastEx LLC

October 25, 2023

Page 4 of 67

(7) Authorized Representative – With respect to any Member, an Officer of the Member who is 

responsible for supervising all activities of the Member, its Authorized Trading Users, and its 

employees, and for providing information regarding the Member to ForecastEx upon request.

(8) Authorized Trading User – A natural Person who is either employed by or is an agent of a 

Member or Sponsored FCM and who is authorized by the respective Member or Sponsored FCM 

to enter Bids and into Event Positions on behalf of Customers, provided that the Member 

maintains supervisory authority over such individual’s trading activities, but Authorized Trading 

Users shall not include (i) employees or agents of Customers or (ii) Customers that are natural 

Persons.

(9) Bank Account – A bank account to transfer funds to ForecastEx’s Settlement Bank pursuant 

to Rule 602.

(10) Bid – An order to enter an Event Position. An Event Position is not entered until a “Yes” 

Bid and an opposing “No” Bid have a combined price of $1.01 per Rule 401.

(11) Board – The Board of Directors of ForecastEx LLC as described in Rule 202.

(12) Business Day - Monday through Friday, 8:00 CT to 17:00 CT, excluding equity market 

holidays.

(13) CEA – The Commodity Exchange Act, as amended from time to time.

(14) CEO – The Chief Executive Officer of ForecastEx, LLC as described in Rule 204.

(15) The CFTC or the Commission – The Commodity Futures Trading Commission or any 

successor regulatory body.

(16) CFTC Regulation – The regulations of the CFTC, as in effect from time to time, including 

any CFTC-issued orders, interpretative letters, or no-action letters.

(17) The Clearinghouse – The activities of ForecastEx in its capacity as a Derivatives Clearing 

Organization.

(18) Clearing Fund – The fund established pursuant to Rule 616.

(19) Clearinghouse Platform – The ForecastEx clearing systems.

(20) Clearing Privileges – Any right granted by the Clearinghouse to a Member to clear Event 

Positions.

(21) Collateral Account – With respect to a Member, an account opened and maintained by a 

Member at the Clearinghouse to which (a) a Member transfers proprietary or Customer funds 

and (b) from which ForecastEx is authorized to debit fees, and credit Settlement payments, as 
ForecastEx LLC

October 25, 2023

Page 5 of 67

applicable. A Member may have up to two Collateral Accounts: a Customer Collateral Account 

and a Non-customer Collateral Account.

(22) Compliance Department – The department, reporting to the CRO, that is responsible for 

compliance, investigations, and disciplinary proceedings.

(23) Contract – Any derivative, including Event Positions, traded on ForecastEx.

(24) Contract Specifications – With respect to any Event Position, the rules or other trading 

protocols containing specifications for such Event Position, including all terms and conditions, as 

adopted, amended, supplemented or otherwise modified from time to time by ForecastEx.

(25) CRO – The Chief Regulatory Officer of ForecastEx, LLC.

(26) Customer – Any Person for whom a Member or Sponsored FCM carries an account, or from 

whom a Member or Sponsored FCM solicits or accepts a Bid.

(27) Customer Account – A Customer segregated account in accordance with CFTC 

Regulations.

(28) Customer Collateral Account - A Collateral Account on the books of the Clearinghouse that 

holds Customer funds.

(29) Director – A member of the Board of Directors of ForecastEx LLC.

(30) Disciplinary Panel – in the event of disciplinary proceeding, three individuals selected by 

the CRO from Board Members and/or Market Participants, including at least one individual who 

would qualify as a Public Director and acts as Chairman of the Panel.

(31) ERO – The Enterprise Risk Officer of ForecastEx, as set forth in CFTC Regulation 

39.10(d)(4) and performing the duties of the Chief Risk Officer as set forth in CFTC Regulation 

39.13(c).

(32) The Exchange – The activities of ForecastEx in its capacity as a Designated Contract 

Market.

(33) Exchange Platform – The ForecastEx pairing and trading systems.

(34) Event Market – A listing of an intrinsically paired “Yes” Event Position and a “No” Event 

Position with the same Event Question.

(35) Event Position – Either a “Yes” Position or a “No” Position listed in an Event Market by the 

Exchange and entered by Market Participants through inverse pricing as described in Rule 401.
ForecastEx LLC

October 25, 2023

Page 6 of 67

(36) Event Question – Binary Yes/No questions based on whether specific real world events will 

occur at or before a specific time period. The Outcome of an Event Question is either “Yes” or 

“No”.

(37) Event Review Process - The process by which ForecastEx reviews the Outcome of an Event 

Market in accordance with Rule 415.

(38) FCM – A Futures Commission Merchant as defined by the CFTC and registered with NFA.

(39) ForecastEx – ForecastEx, LLC, a Delaware LLC.

(40) ForecastEx Business Day - The days that ForecastEx is open as described in Rule 402

(41) ForecastEx Participant - Collectively, Members, Sponsored FCMs, the Authorized Trading 

Users of Members, and the Related Parties of Members and Sponsored FCMs.

(42) ForecastEx Rules – The ForecastEx Rulebook, interpretations, orders, resolutions, 

advisories, notices, statements of policy, decisions, manuals, and directives of ForecastEx.

(43) ForecastEx System – The Exchange Platform and the Clearinghouse Platform.

(44) IBG – IBG LLC the majority owner and controlling member off ForecastEx. IBG and 

ForecastEx are Affiliates of Interactive Brokers Group, Inc (Nasdaq: IBKR).

(45) Insider– Any Person who has access to or is in a position to have access to material nonpublic information before such information is made publicly available.

(46) KYC – Know your customer.

(47) Market Participant – Collectively, Members, Sponsored FCMs, the Authorized Trading 

Users of Members, the Related Parties of Members and Sponsored FCMs, and the Customers of 

Members and Sponsored FCMs.

(48) Market Participant Director – A Director who has been found by the Board to be an 

Authorized Representative of a Member and suitable to be a Director pursuant to Section 

5b(c)(2)(Q) of the CEA.

(49) Member – An FCM to which ForecastEx has granted Access Privileges, Clearing Privileges 

and related services.

(50) NFA – The National Futures Association.

(51) “No” Position – An Event Position that pays out at its Resolution Time if the Outcome of 

the Event Question is “No”.
ForecastEx LLC

October 25, 2023

Page 7 of 67

(52) Non-customer Collateral Account - A Collateral Account on the books of the Clearinghouse 

that holds proprietary funds.

(53) Obligation – Any Rule, order or procedure issued by ForecastEx, including a Member 

notice or other requirement implemented by ForecastEx under the Rules (including Contract 

Specifications), as well as any contractual obligations between, on the one hand, a Person, and 

on the other hand, ForecastEx, and any Bid entered by an Authorized Trading User or Event 

Position entered into by a Market Participant.

(54) Officers – Collectively, the Chairman, CEO, CRO, ERO and any other such Officers who 

have been appointed by the CEO as described in Rule 204.

(55) Operating Agreement – The Limited Liability Company Operation Agreement of 

ForecastEx, as it may be modified from time to time.

(56) Outcome – As related to Event Questions, whether an Event Question resolves to “Yes” or 

“No”.

(57) Person – Any natural or legal person, association, partnership, limited liability company, 

joint venture, corporation, or any other type of entity.

(58) ROC – The Regulatory Oversight Committee as described in Rule 203.

(59) Regulatory Agency - The CFTC or any other U.S. Government financial regulatory agency.

(60) Related Party – With respect to any ForecastEx Participant, any partner, Director, Officer, 

branch manager, or employee of such ForecastEx Participant, or any Person. Additionally, any 

Person directly or indirectly, controlling, controlled by, or under common control with such 

ForecastEx Participant.

(61) Resolution Time – The time when the Outcome of an Event Market is determined, and 

Settlement is initiated.

(62) Self-Regulatory Organization – Unless otherwise provided, the meaning set forth in CFTC 

Regulation 1.3 and Derivatives Clearing Organizations.

(63) Settlement – The process by which the Clearinghouse credits funds to the Member’s 

Collateral Accounts and Market Participants realize profits and losses on Event Positions.

(64) Settlement Bank– A depository, bank or trust which has entered into an agreement with the 

Clearinghouse to facilitate Settlement on behalf of Members.

(65) Settlement Bank Business Day - the days on which ForecastEx’s Settlement Bank is open.

(66) Settlement Value – The value of an Event Question at Resolution Time after its Outcome 

has been determined.
ForecastEx LLC

October 25, 2023

Page 8 of 67

(67) Source Agency – Any agency, whether public or private, that publishes data used to 

determine the Outcome of an Event Question.

(68) Sponsored Clearing Agreement – An agreement between a Sponsored FCM and a Member 

through which the Member authorizes the Sponsored FCM to submit Bids for Event Positions to 

be cleared and settled in a designated account of such Member.

(69) Sponsored FCM – An FCM that is not a Member, but is sponsored by a Member to have 

Access Privileges in accordance with Rule 303.

(70) User ID – The unique identifier registered with ForecastEx that ForecastEx assigns to an 

Authorized Trading User, and which is included on each Bid to enable ForecastEx to identify the 

Person entering such Bids.

(71) “Yes” Position – An Event Position that pays out at its Resolution Time if the Outcome of 

the Event Question is “Yes”.

(b) For the purpose of ForecastEx Rules (each individual rule a “Rule,” collectively, all Rules, 

the “Rules”), the following rules of construction shall apply:

(1) Words conveying a singular number include the plural number, where the context permits, 

and vice versa.

(2) References to any Regulatory Agency or Self-Regulatory Organization include any successor 

Regulatory Agency or Self-Regulatory Organization respectively.

(3) If, for any reason, a Rule is found or determined to be invalid or unenforceable by a court of 

law, the Commission or another governmental or quasi-governmental agency with supervisory 

authority, such Rule shall be considered severed from the Rules and all other Rules shall remain 

in full force and effect.

(4) All references to time are to the local time in Chicago, Illinois unless expressly provided 

otherwise.

(5) All terms defined in the Commodity Exchange Act, as amended, or CFTC Regulations and 

not otherwise defined herein shall have the respective meanings accorded to them therein.

(6) All terms defined in the UCC and not otherwise defined herein shall have the respective 

meanings accorded to them therein.

(7) In the event of a conflict between these Rules and a non-disclosure agreement between 

ForecastEx or an Affiliate of ForecastEx and an FCM Participant or Customer, these Rules shall 

govern.

(8) In the event of a conflict between these Rules and the CEA or CFTC Regulations, the 

applicable provision of the CEA and/or CFTC Regulation shall govern.
ForecastEx LLC

October 25, 2023

Page 9 of 67

(9) Any rule that exclusively pertains to the Exchange is considered an Exchange Rule, and may 

only be enforced by the Exchange.

(10) Any Rule that exclusively pertains to the Clearinghouse is considered a Clearinghouse Rule, 

and may only be enforced by the Clearinghouse.

(11) Rules common to both the Exchange and the Clearinghouse (i.e., Rules that refer to 

ForecastEx) may be enforced by either entity.

(12) Rules that do not refer to any of the Exchange, the Clearinghouse, or ForecastEx may also 

be enforced by either entity.

(13) Chapter 6 of the Rulebook exclusively contains Clearinghouse Rules. The remaining 

portions of the Rulebook contain Rules that apply to both the Clearinghouse and the Exchange.

Chapter 2 – Governance

Chapter 2 pertains to both the Clearinghouse and Exchange.

Rule 201 – Ownership

ForecastEx, LLC is a Delaware limited liability company. ForecastEx LLC is a wholly owned 

subsidiary of IBG LLC and is governed by the Operating Agreement and the ForecastEx Rules.

Rule 202 – Board of Directors

(a) General. The Board is empowered to direct the business and affairs of ForecastEx. The Board

may affirm, modify, overrule, or review any decisions by its standing committees, special 

committees, or Officers, except for decisions by the Regulatory Oversight Committee and Event 

Review Committee.

(b) Composition.

(1) The Chairman and the CEO shall serve as a members of the Board.

(2) The other members of the Board will be appointed by the nominating committee as is 

described in Rule 203(f).

(3) The number of Directors can be changed by IBG, provided that the number of Public 

Directors represents more than 35% of the Board members.

(4) Market Participant Directors are members of the Board.

(c) Public Directors.
ForecastEx LLC

October 25, 2023

Page 10 of 67

(1) Qualifications of Public Directors. Public Directors must not have a material relationship 

with ForecastEx that could affect the independent judgment or decision making of the Person as 

a Public Director. A material relationship will be determined to exist if one of the following 

circumstances is true or was true within the past year:

(i) The Director has been an employee or Officer of ForecastEx, or an officer of an Affiliate;

(ii) The Director has been a Member of ForecastEx, or an officer or director of a Member;

(iii) The Director has received more than $100,000 in combined annual payments from 

ForecastEx or an Affiliate for legal, accounting, or consulting services. Compensation for 

services as a Director of ForecastEx or an Affiliate do not count towards the $100,000 limit, nor 

does deferred compensation for services prior to becoming a Director, so long as such 

compensation is in no way contingent, conditioned, or revocable; or

(iv) Paragraphs (i), (ii) or (iii) of this Rule 202(c)(1) apply to a Director’s immediate family (i.e. 

spouse, children, parents, and siblings).

(2) Public Directors are not disqualified from serving as Directors of Affiliates if they otherwise 

meet the qualifications of a Public Director listed in Rule 202(c)(1).

(3) ForecastEx shall disclose to the CFTC which members of its Board are Public Directors and 

describe the basis for the determination that each Board member is qualified to server as a Public 

Director.

(4) This rule shall be deemed to be modified to conform to any change to the definition of 

“Public Director” set forth in Core Principle 15 of Section 5(d) of the CEA or any CFTC 

Regulation.

(d) Tenure. Each Director shall serve until their death, resignation, or removal, whichever occurs 

first, in a manner permitted by Applicable Law. The Board shall have procedures which allow it 

to remove a Director for cause. The Board will review the performance of its members on no less 

than an annual basis.

(e) Eligibility. No Person may serve as a member of the Board, or of a subcommittee of the 

Board if the Person:

(1) Within the prior three years has been found, by a final decision of a court of competent 

jurisdiction, an administrative law judge, the CFTC, or any Self-Regulatory Organization, to 

have committed a disciplinary offense;

(2) Within the prior three 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;
ForecastEx LLC

October 25, 2023

Page 11 of 67

(3) Is currently suspended from trading on a Designated Contract Market or a Swap Execution 

Facility, is suspended or expelled from membership in a Self-Regulatory Organization, is serving 

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

finding by final decision of a court of competent jurisdiction, an administrative law judge, the 

CFTC or any Self-Regulatory Organization that such Person committed a disciplinary offense; or 

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 years has been, subject to a revocation or suspension of 

registration by the CFTC, or has been convicted within the past three years of any of the felonies 

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 

Panel, arbitration panel or governing Board of any Self-Regulatory Organization as that term is 

defined in Section 3(a)(26) of the Securities Exchange Act of 1934;

(7) Is subject to a statutory disqualification pursuant to Section 8a(2) of the CEA; or

(8) Is disqualified from serving on the Board or any of its committees due to CFTC Regulation 

1.63 which is incorporated herein by reference.

If any member of the Board, or a member of a committee or subcommittee of the Board is 

ineligible or becomes ineligible, they must immediately notify the CEO.

(f) Frequency of Board meetings. The Board will regularly meet at the times and places, and in 

the manner and frequency determined appropriate by the Board.

(g) Decision-making. 

(1) A majority of the Directors serving on the Board, including at least one Public Director, shall 

constitute a quorum for the transaction of business of the Board. At all times when the Board is 

conducting business at a meeting of the Board, a quorum of the Board must be present at such 

meeting, and the Board may act only by the decision of a majority of the Directors constituting a 

quorum by vote at a meeting, by unanimous written consent without a meeting, or as otherwise 

set forth in the Operating Agreement.

(2) In the case that a motion before the Board of Directors results in a tie vote, the Chairman may 

break the tie.

Rule 203 – Committees

(a) General. The Board may create by resolution one or more committees which shall be 

comprised of individuals appointed by the Board. At the Board’s discretion, these committees 
ForecastEx LLC

October 25, 2023

Page 12 of 67

also include members who are not Directors. Members on ForecastEx committees who are not 

Directors must meet the qualification requirements in Rule 202(e). These committees will have 

the power and authority to exercise the functions delegated to them by the Board.

(b) Decision-making. Subject to the approval of the Board, each committee will create rules to 

govern its proceedings. At least one Public Director will serve on each committee. Each 

Committee may only act by the decision of the majority vote of a quorum at a meeting or by 

unanimous written consent without a meeting. The Board will designate the chairperson of each 

committee.

(c) Regulatory Oversight Committee

(1) General. The Board will establish the ROC as a standing committee. The ROC shall be 

responsible for overseeing ForecastEx’s regulatory program. The Board will ensure that the ROC 

is delegated sufficient authority, resources, and time to accomplish its mandate.

(2) Composition. The ROC shall be composed entirely of Public Directors.

(3) Duties. In addition to the general responsibility described in section (b)(1) of this Rule 203, 

the ROC will:

(i) Monitor and regularly review the ForecastEx’s regulatory program for sufficiency, 

effectiveness, and independence;

(ii) Oversee the regulatory program of ForecastEx, including market surveillance, trade practice, 

audits, examinations, regulatory responsibilities with respect to Market Participants, and 

conducting investigations;

(iii) Oversee the regulatory budget, determine the sufficiency of resources allocated to market 

regulation, and review the number, hiring, termination, and compensation of regulatory 

personnel. The ROC will review the size and workload of compliance staff at least annually. In 

determining the appropriate level of compliance resources and staff, the ROC will consider 

trading volume increases, the number of new products or contracts to be listed for trading, any 

new responsibilities to be assigned to compliance staff, the results of any internal review 

demonstrating that work is not completed in an effective or timely manner, and any other factors 

suggesting the need for increased resources and staff;

(iv) Supervise the CRO;

(v) Prepare an annual report detailing ForecastEx’s self-regulatory program. This report will list 

the Compliance Department’s expenses, staffing, and structure. The report will also describe the 

disciplinary actions taken during the previous year as well as the performance of any disciplinary 

reviews and panels. The report will be presented to the Board and to the CFTC;

(vi) Recommend changes to the Compliance Department that encourage effective regulation;
ForecastEx LLC

October 25, 2023

Page 13 of 67

(vii) As needed, appoint individuals to any Disciplinary Panels. At least one Person on each 

Disciplinary Panel should not be disqualified from serving as a Public Director; and

(viii) Advise the Board on whether and how regulatory proposals may impact the effectiveness 

of the Compliance Department.

(d) Clearing Committee.

(1) General. The Clearing Committee is a committee comprised of members of the Board and at 

least one Market Participant Director. The purpose of the committee is to review and provide 

oversight of the risk management activities of the Clearinghouse. The Clearing Committee shall 

prioritize the safety and efficiency of the Clearinghouse while supporting the stability of the 

broader financial system. The Clearing Committee shall be composed of no fewer than one 

Public Director, one Market Participant Director, and one other Board Member.

(2) Duties. The duties of the Clearing Committee include the following:

(i) Review the adequacy of financial safeguards for the Clearinghouse, and receive regular risk 

reports from the Clearinghouse Officers.

(ii) Approve all substantive changes to the ForecastEx Rulebook that impact the Clearinghouse.

(iii) At least annually, review and approve the risk management framework, the liquidity risk 

management framework, the credit risk assessment methodology, collateral policy, clearing 

investment policy, and the Clearinghouse recovery & wind down plan. The Clearing Committee 

will also review and approve any substantive changes to the above policies. If the Committee 

recommends changes to these policies that would have a significant impact on the 

Clearinghouse’s risk profile, the Clearing Committee will submit a recommendation to the 

Board.

(iv) Approve all financial institutions that perform the functions of a Settlement Bank, a 

collateral custodian, a cash depository institution, or an investment counterparty for the 

Clearinghouse.

(v) Approve all new Members, and Member mergers, substantive changes, and withdrawals to 

Members.

(vi) Review and approve all substantive changes to Membership requirements.

(vii) Recommend to the Board for approval the individuals to serve as Officers of the 

Clearinghouse.

(viii) Oversee the Clearinghouse budget, determine the sufficiency of resources allocated to 

market regulation, and review the number, hiring, termination, and compensation of 

Clearinghouse Personnel.
ForecastEx LLC

October 25, 2023

Page 14 of 67

(ix) Any such other matter as the Board may from time to time prescribe.

(e) Event Review Committee.

(1) General. The Event Review Committee shall be responsible for conducting the Event Review 

Process described in Rule 415.

(2) Composition. The Event Review Committee members shall be appointed by the Nominating 

Committee. A majority of Event Review Committee members must be Public Directors. Public 

Directors may concurrently serve on both the Event Review Committee and the ROC.

(f) Nominating Committee

(1) General. The Nominating Committee shall be responsible for nominating individuals to serve 

on the ForecastEx Board of Directors and Board level Committees.

(2) Composition. A majority of members on the Nominating Committee must be Public 

Directors. The members of the Nominating Committee will be appointed by the Board.

(3) Nomination Process. When there is a vacancy on the Board or a Board-level Committee, the 

Nominating Committee will nominate individuals to fill the vacancies. The nominations of the 

Nominating Committee will be sent to the Board for advice and consent. 

(i) If the Board approves the nominations, then the nominated individuals will be appointed to 

their respective positions.

(ii) If the Board rejects the nominations, then the Nominating Committee will nominate other 

individuals for the Board’s approval.

Rule 204 – Officers

(a) General.

(1) Designation. The Chairman, CEO, CRO, and ERO shall be appointed by the Board. Other 

Officers may be appointed at the discretion of the CEO.

(2) Salaries. The salaries of all Officers of ForecastEx shall be approved by the Board.

(3) Eligibility. All Officers must meet the eligibility requirements for Board members in Rule 

202(e).

(4) Affiliation. Any Officer may also be a Director, Officer, partner, or employee of an Affiliate 

subject to disclosure and resolution of conflicts of interest.
ForecastEx LLC

October 25, 2023

Page 15 of 67

(b) Chairman. The Chairman shall be a member of the Board and, if present, preside at meetings 

of the Board and exercise and perform such other powers and duties as may from time to time be 

assigned to them by the Board. The same individual may serve as CEO and Chairman.

(c) Chief Executive Officer. The CEO shall be in charge of the Business of ForecastEx, subject 

to the discretion and approval of the Board. The CEO shall discharge all executive duties of 

ForecastEx and such other duties delegated by the Board. The CEO shall be responsible for 

carrying into effect the directions of the Board, except where the responsibility is specifically 

assigned to another Person by the Board of authority is expressly delegated to another Officer of 

ForecastEx.

(d) Chief Regulatory Officer. The CRO shall be in charge of overseeing compliance matters and 

managing the day-to-day regulatory functions of ForecastEx, including that the CRO is intended 

to carry out the chief compliance officer’s responsibilities under CFTC Regulation 39.10. The 

CRO will report to the ROC for all regulatory, compliance, supervisory, and surveillance 

matters. The CRO will report to the CEO on all other matters.

(e) Enterprise Risk Officer. The ERO shall be responsible for overseeing the Clearinghouse’s 

Enterprise Risk Management Program. The ERO shall perform the duties of the Enterprise Risk 

Officer as set forth in CFTC Regulation 39.10(d)(4) and the duties of the Chief Risk Officer as 

set forth in CFTC Regulation 39.13(c). The ERO will report to the Clearing Committee.

Rule 205 – Indemnification

(a) General. ForecastEx shall indemnify and hold harmless its Directors and Officers, to the 

fullest extent permitted by law, from and against any and all losses, claims, damages, liabilities, 

whether joint or several, expenses (including legal fees and expenses), judgments, fines and other 

amounts paid in settlement, incurred or suffered by such Director or Officer, as a party or 

otherwise, in connection with any threatened, pending or completed claim, demand, action, suit 

or proceeding, whether civil, criminal, administrative or investigative, and whether formal or 

informal, arising out of or in connection with the business or the operation of ForecastEx or by 

reason of their status as a Director or Officer, if (1) the Director or Officer acted in good faith 

and in a manner he or she reasonably believed to be in the best interests of ForecastEx and, with 

respect to any criminal proceeding, had no reasonable cause to believe that his or her conduct 

was unlawful, (2) the Indemnitee's conduct did not constitute intentional misconduct, gross 

negligence, knowing violation of the law or a material breach of any agreement with ForecastEx 

and (3) the Director or Officer’s conduct did not involve a transaction from which such they 

derived an improper personal benefit.

(b) Indemnification of other employees. Persons who are not covered by Rule 205(a) and who 

are or were employees or agents of ForecastEx, may be indemnified to the extent authorized 

from time to time by the Board.

(c) Other rights of Indemnification. Indemnification provided by ForecastEx shall not be deemed 

exclusive of any other rights to which a Person may be entitled under any agreement or as a 

matter of law or otherwise.
ForecastEx LLC

October 25, 2023

Page 16 of 67

(d) Notwithstanding paragraphs (a), (b), and (c) of this Rule 205, no Person shall be indemnified 

from liability for fraud, bad faith, willful misconduct, or gross negligence. The Directors and 

Officers of ForecastEx shall be each charged with the same fiduciary duties of care, loyalty, and 

good faith. Further, no Person shall be indemnified against a civil penalty imposed by the CFTC 

under Section 6b of the CEA.

Rule 206 – Conflicts of Interest

(a) Definition. A conflict of interest shall be considered present when:

(1) Relationship to named party. A member of the Board, any Board Committee, or any other 

disciplinary committee has one of the following relationships:

(i) Is a named party in interest;

(ii) Is an employer, employee, or fellow employee of a named party in interest;

(iii) Has a family relationship with a named party in interest;

(iv) Has any other significant ongoing business relationship with a named party in interest, 

excluding relationships related to clearing futures or options transactions opposite each other or 

to clearing futures or option transactions through the same Member; or

(v) Is associated with another party in interest through a Broker Association as is defined in 

CFTC Regulation 156.1.

(2) Financial interest in a vote. A member of the Board, any Board Committee, or any other 

disciplinary committee knowingly has a direct or substantial financial interest in the result of the 

vote based upon either an exchange or a non-exchange position that could be reasonably 

expected to be affected by the action.

(b) Prohibition. No member of the Board, any Board Committee, or any other disciplinary 

committee shall participate in such body’s deliberations and voting on any action where there is 

a conflict of interest.

(c) Determination by CRO.

(1) Disclosure. Prior to the consideration of any matter involving a conflict of interest each 

member of the deliberating body who does not choose to abstain from deliberations and voting 

shall disclose the conflict of interest to the CRO, or their designee. In the case of a potential 

conflict of interest due to a financial interest, the member of the deliberating body must disclose:

(i) Gross positions held at ForecastEx in the member’s personal accounts or “controlled 

accounts,” as defined in Commission Regulation 1.3(j);
ForecastEx LLC

October 25, 2023

Page 17 of 67

(ii) Gross positions held at ForecastEx in proprietary accounts, as defined in Commission 

Regulation 1.17(b)(3), at the member’s affiliated firm;

(iii) Gross positions held at ForecastEx in accounts in which the member is a principal, as 

defined in Commission Regulation 3.1(a);

(iv) Net positions held at ForecastEx in “Customer” accounts, as defined in Commission 

Regulation 1.17(b)(2), at the member’s affiliated firm; and

(v) Any other types of positions, whether maintained at ForecastEx or elsewhere, held in the 

member’s personal accounts or the proprietary accounts of the member’s affiliated firm that 

ForecastEx reasonably expects could be affected by the significant action.

(2) Determination. The CRO or their designee shall determine whether any member of the 

relevant deliberating body who does not choose to abstain from deliberations and voting is 

subject to a conflicts restriction under this Rule 206(b). The determination shall be based on:

(i) Information provided by the member pursuant to this Rule 206(c)(1);

(ii) The most recent Large Trader Reports and clearing records available to ForecastEx;

(iii) Any other source of information that is held and reasonably available to ForecastEx taking 

into consideration the exigency of the situation.

(d) Participation in deliberation. Any member of the Board, any Board committee, or any other 

disciplinary committee who is required to abstain from deliberations and voting pursuant to this 

Rule 206(b), may participate in deliberations, but not voting if the deliberative body determines 

that participation would be in the public interest. In making its determination, the following 

factors shall be considered.

(1) The factors considered by the CRO or their designee in making a determination about 

conflicts of interest as described in this Rule 206(c);

(2) Whether such member’s participation in the deliberations is necessary to achieve a quorum; 

and

(3) Whether such member has unique or special expertise, knowledge, or experience in the 

matter being considered.

(e) Documentation. Any meeting of the Board, any Board committee, or any other disciplinary 

committee shall include in their minutes or otherwise document the conflicts determination 

procedures followed. The records must also include:

(1) The names of all members who attended the meeting either in person or were present by 

electronic means;
ForecastEx LLC

October 25, 2023

Page 18 of 67

(2) The name of any member who voluntarily recused themselves or was required to abstain 

from deliberations and/or voting on a matter and the reason for the recusal or abstention; and

(3) Information on the position information that was reviewed for each member.

Rule 207 – Confidentiality and Employee Restrictions

(a) Confidentiality of non-public information. No member of the Board, Board Committee, 

Officer, employee, or consultant of ForecastEx will misuse any material non-public information 

obtained as a result of their affiliation with ForecastEx. Misuse means any use that is not 

required as part of the performance of their official duties as a ForecastEx Board member, 

committee member, Officer, employee or consultant respectively. This includes, but is not 

limited to:

(1) Disclosing to any Person material nonpublic information for purposes inconsistent with such 

Person’s official duties;

(2) Using the material nonpublic information for Personal gain, monetary benefit or otherwise; 

and

(3) Trading for their own account or on behalf on any other account, in any commodity interest, 

related commodity interest, or security for which they have access to material nonpublic 

information.

(b) No ForecastEx Officer or employee shall directly or indirectly enter any ForecastEx Event 

Position. This does not prohibit an Officer or employee from buying shares of investment 

vehicles which might enter ForecastEx Event Positions, but only so long as the employee has no 

control or discretion over the ForecastEx Event Positions entered and closed. This also does not 

prohibit Affiliates from trading on ForecastEx subject to the limitations of Rule 208 below.

(c) No ForecastEx Officer or employee shall accept any gift, gratuity, compensation, or other 

form of remuneration valued at an amount greater than $100, either directly or indirectly, from a 

Market Participant without the approval of the CEO.

(d) For purposes of this Rule, the terms “material information,” “non-public information,” 

“linked exchange”, “commodity interest,” and “related commodity interest” have the same 

meanings as they do in Commission Regulation 1.59 which are incorporated here by reference.

(e) If a Director, Officer, or employee of ForecastEx violates any provision of this Rule 207, they 

will be required to indemnify ForecastEx for any costs, damages, or losses caused by the 

violation.

Rule 208 – Limitation of Affiliate Participation
ForecastEx LLC

October 25, 2023

Page 19 of 67

(a) ForecastEx, pursuant to approval by the Board, may permit an Affiliate to participate on the 

ForecastEx System, either as a Member, Sponsored FCM, or a Customer, subject to the 

following conditions:

(b) ForecastEx has ensured the Affiliate does not have access to ForecastEx’s material nonpublic information, and ForecastEx ensures the Affiliate’s access to information is limited to 

public information available to all Market Participants. (The provision of information to common 

Directors of ForecastEx, and any Affiliate or the holding company shall not constitute a violation 

of this proscription.)

(c) ForecastEx maintains operational independence from the Affiliate. Operational independence 

means that the Affiliate must:

(1) Have no access to ForecastEx operations, including servers, databases, accounts, tools, 

software, and development tooling, separate from ForecastEx;

(2) Comply with all of the rules in this Rulebook, including the rules regarding Members;

(3) Have access to the ForecastEx System limited to that set forth in the rules in this Rulebook;

(4) Not have access to material non-public information, including but not limited to information 

regarding order flow, trading, Settlement, Event Markets, and compliance; and

(5) Have and maintain physical separation from ForecastEx.

(d) All capital underlying trading by an Affiliate will not originate from ForecastEx.

(e) Any algorithms employed by any Affiliate will not be readily exploitable (e.g., not be readily 

subject to manipulation, hacking).

(f) There may be multiple Affiliated entities using the Exchange Platform.

(g) If additional Affiliates of ForecastEx commence trading on the Exchange Platform, or if the 

information about the trading activities of the Affiliate changes materially, ForecastEx will, prior 

to the commencement of such trading, put in place necessary controls to ensure that the 

provisions in this Rule 208 are followed, notify Market Participants by issuing a notice on the 

website that discloses any Affiliate’s purpose in trading on the Exchange Platform, and provide a 

summary of the procedures in place to manage and disclose actual or potential conflicts of 

interest and effects on trading to ensure market integrity and fairness are preserved.

Rule 209 – Recordkeeping

(a) ForecastEx will maintain books of account on a cash or accrual basis to the extent required by 

the Internal Revenue Code and in accordance with generally accepted accounting principles. 

These records shall record all income distributions, expenses, and transactions of ForecastEx. 

The books of account as well as ForecastEx’s income tax returns will be kept for six years.
ForecastEx LLC

October 25, 2023

Page 20 of 67

(b) ForecastEx will maintain records of all trades, orders, disciplinary or investigatory 

documents, and any other documentation required by the CEA and CFTC Regulations. The 

books and records shall be maintained in the manner prescribed by the CEA and CFTC 

Regulations.

(c) Upon request, ForecastEx will provide information to the CFTC, US Securities and Exchange 

Commission, the US Department of Justice, or any representative of a prudential regulator as 

authorized under Applicable Law, in the manner and form required. This includes records 

relating to Swaps in the Section 1a(47)(A)(v) of the CEA open to inspection and examination by 

the US Securities and Exchange Commission.

Rule 210 – Regulatory Cooperation

ForecastEx may enter into agreements with domestic or foreign Self-Regulatory Organizations, 

associations, boards of trade and their respective regulators providing for the exchange of 

information and other forms of mutual assistance, for any financial or regulatory purpose that 

ForecastEx may consider appropriate, or as the CFTC may require. The CEO or their designee is 

authorized to provide information to an entity that is party to an information sharing agreement 

with ForecastEx, in accordance with the terms and conditions set forth in each agreement.

Chapter 3 – Membership and Access 

Privileges

Chapter 1 pertains to both the Clearinghouse and Exchange.

Rule 301 – Applications for Membership

(a) ForecastEx will provide Access Privileges, Clearing Privileges, and related services to 

Members. Applications for Membership will be considered, approved, or rejected in an impartial, 

transparent, fair and non-discriminatory manner. In order to become a Member, an FCM 

applicant must:

(1) Be an FCM registered with the NFA;

(2) Complete and submit the ForecastEx Member Application and Agreement, User Agreement, 

and application fee, as may be established by ForecastEx from time to time;

(3) Not be subject to any economic or trade sanctions programs administered by Office of 

Foreign Assets Control or other relevant U.S. or non-U.S. authority, and must not include any 

Person listed on Office of Foreign Assets Control’s List of Specially-Designated Nationals and 

Blocked Persons among its beneficial owners;
ForecastEx LLC

October 25, 2023

Page 21 of 67

(4) Be validly organized, and in good standing, in the United States;

(5) Not be prohibited from using the services of ForecastEx for any reason whatsoever;

(6) Have a good reputation and business integrity and maintain adequate financial resources and 

credit;

(7) Not have filed for bankruptcy and not be insolvent;

(8) Comply with Capital and other rules of the CFTC and NFA.

(9) Designate at least one Authorized Trading User;

(10) Designate at least two Authorized Representatives who are responsible for supervising all 

activities of the Member, its Authorized Trading User(s) and its employees relating to 

transactions, for initiating requests and for providing any information ForecastEx may request 

regarding such Member; provided, that upon request ForecastEx may permit an entity applicant 

to designate a single Authorized Representative in the CRO’s sole discretion;

(11) Have sufficient operational capabilities and resources to support the ForecastEx Platform 

transfer requirements, including sufficient: (a) policies and procedures, (b) understanding of and 

support for Event Positions, (c) asset security and cyber security procedures and (d) AML 

controls;

(12) Have sufficient ability, appropriate accounts and technical support to clear Event Positions, 

including maintenance of the requisite Collateral Accounts at all times;

(13) Satisfy the minimum Clearing Fund requirements;

(14) Designate Sponsored FCMs, if any, to fill and give up Bids for clearing on its behalf;

(15) Have a Designated Self-Regulatory Organization (“DSRO”); and

(16) Meet any other criteria and provide ForecastEx with any other information ForecastEx may 

request regarding the Member.

(b) Prior to becoming a Member, FCM applicants must submit to ForecastEx: (1) a guarantee 

agreement on a form prescribed by the Clearinghouse defining the Member’s Obligation to 

financially guarantee the applicant’s Bids and Event Positions and those of the applicant’s 

Customers, signed by the Member.

(c) ForecastEx may in its sole discretion approve, deny, or condition any Member application as 

ForecastEx deems necessary or appropriate.
ForecastEx LLC

October 25, 2023

Page 22 of 67

(d) If a Member application is approved by ForecastEx, the applicant will be a Member of 

ForecastEx with Access Privileges and Clearing Privileges with respect to its Customers and its 

proprietary account, as applicable.

(e) Submission of a Member Application and Agreement to ForecastEx constitutes the 

applicant’s agreement to be bound by the Rules and the published policies of ForecastEx.

(f) No Person affiliated, within the meaning of Section 5b(c)(2)(O)(ii)(V) of the CEA, with a 

Director of ForecastEx or a Member (for purposes of this Rule, an “affiliate”) shall meet the 

CFTC’s criteria for refusal to register a Person under Section 8a(2) of the CEA, unless the 

Clearing Committee finds that there are special circumstances warranting the application of such 

criteria with respect to the affiliate.

(1) With respect to affiliates, the Board shall be entitled to rely on a representation from the 

relevant Director or Member that, to the best of such Person’s knowledge, none of its affiliates is 

subject to disqualification pursuant to ForecastEx’s fitness standards and that such Person will 

notify ForecastEx if at any time such Director or Member becomes aware that any such affiliate 

fails to meet the fitness standards.

(2) Section 5b(c)(2)(O)(ii)(IV) of the CEA requires each DCO to establish Fitness Standards for 

Persons with direct access to the Settlement or clearing activities of the DCO. The only Persons 

with such access are Authorized Trading Users of Members.

(g) Applicants for Member status of ForecastEx may withdraw their applications at any time 

without prejudice or without losing their right to apply at a future time.

(h) ForecastEx may, in its sole discretion, deny any Member application, or suspend, revoke, 

limit, condition, restrict, or qualify the Access Privileges or Clearing Privileges of any account 

owner or any Authorized Trading User as deemed necessary or appropriate.

(1) Any Member whose Access Privileges or Clearing Privileges have been limited will be 

provided in writing the reason such action was taken.

(2) Any Person whose Member application was denied or whose Access Privileges or Clearing

Privileges have been limited can file a petition with ForecastEx for review of the decision within 

20 Business Days from the date of the notice of denial or limitation. ForecastEx will have sole 

discretion as to whether to grant the petition. A Person denied Membership will not eligible for 

re-application for six months.

(i) Independent Software Vendors.

(1) FCMs seeking to become Members have the option request that ForecastEx provide access to 

one or more Independent Software Vendors (“ISVs”). This request should be submitted in 

writing concurrently with an application to become a Member or Sponsored FCM.
ForecastEx LLC

October 25, 2023

Page 23 of 67

(2) Any cost or fee associated with using an ISV is the responsibility of the requesting Member 

or Sponsored FCM.

Rule 302 – Member Responsibilities

(a) Access Privileges shall be given to Members with respect to their proprietary and Customer 

Bids.

(b) Related Parties authorized by a Member may be given Access Privileges for proprietary 

accounts of the Member. Related Parties authorized by a Member to handle Customer orders 

must be registered if required by Applicable Law.

(c) Members must establish, maintain, and administer written supervisory procedures reasonably 

designed to ensure that their Related Parties comply with Applicable Law and ForecastEx Rules.

(d ) Each Member must represent to the Clearinghouse that each such Member will adhere to the 

Clearinghouses’ collateral transfer procedures. Each Member agrees to provide and accept 

collateral when required to do so by the Clearinghouse.

(e) Each Member must inform ForecastEx of: (i) any change to its email address within 24 hours 

after such change; (ii) any changes to the regulatory registration information of the Member’s 

Authorized Trading Users within two Business Days of such change; and (iii) other information 

provided in the Member Application and Agreement within five days after any such change or 

sooner if such change is material to the Member’s continued compliance with ForecastEx Rules.

(f) Members must maintain current Risk Management Procedures that address the risks that the 

Member poses to ForecastEx. The Risk Management Procedures must be at least as stringent as 

requirements in Commission Regulation 1.11. The Member must present these procedures to 

ForecastEx or the Commission upon request.

Rule 303 – Sponsored Access

(a) Members may elect to settle and clear transactions on behalf of a Sponsored FCM submitting 

its own Customer or proprietary Bids subject to the Member meeting the following requirements.

(b) Members are responsible for the activities of FCMs for whom they sponsor access. This 

includes:

(1) Providing ForecastEx with a completed Sponsored Member Agreement and having that 

agreement approved prior to offering Settlement and clearing services to any Sponsored FCM;

(2) Guaranteeing and assuming Settlement responsibility for all activity submitted by the 

Sponsored FCM on ForecastEx;
ForecastEx LLC

October 25, 2023

Page 24 of 67

(3) Assisting ForecastEx in any investigation related to the Sponsored FCM. The assistance will 

be timely and use reasonable efforts to require the Sponsored FCM to produce documents or 

otherwise participate in the investigation by ForecastEx;

(4) Suspending or terminating the Sponsored FCM’s Access Privileges, if ForecastEx determines 

that the sponsored FCM’s activity on ForecastEx poses a threat to the integrity or liquidity of any 

Event Market, a threat to the integrity of the ForecastEx marketplace, violates Applicable Law, 

the Rules of ForecastEx, or refuses to cooperate in any investigation; and

(5) Upon receipt of a termination notice in respect of a Sponsored Clearing Agreement, the 

Clearinghouse shall promptly notify the affected Sponsored FCM and Member of the 

termination. A mutually agreed upon termination shall be effective when both the Sponsored 

FCM and Member thereto notify the Clearinghouse that they have agreed to terminate their 

Sponsored Clearing Agreement registration. A unilateral termination shall be effective at 8:00 

CST on the ForecastEx Business Day immediately succeeding the ForecastEx Business Day on 

which notice of termination was given to the Clearinghouse. Members will maintain 

responsibility for performance on open Event Positions to be cleared on behalf of such 

Sponsored FCM prior to termination.

(c) Prior to a Member offering settlement and clearing services to any Sponsored FCM, the 

Sponsored Member Agreement submitted by a Member must be approved by the Clearing 

Committee. Prior to approval by Clearing Committee, Sponsored FCMs must submit an 

application to ForecastEx which contains the names of all the Authorized Trading Users of that 

Sponsored FCM as well as any other information that ForecastEx may from time to time require.

Rule 304 - Customer Access to ForecastEx

Any Person who is not eligible to become a Member of ForecastEx may enter ForecastEx Event 

Positions provided that they become a Customer of an FCM who is a ForecastEx Member or a 

Sponsored FCM. The Member or Sponsored FCM will be responsible for determining if the 

Customer is qualified to participate on ForecastEx and shall be financially responsible for all of 

the Customer’s activity as is provided in Rule 301(b).

Rule 305 – Customer Account Requirements

(a) Members must comply with the requirements set forth in Parts 1 and 22 of CFTC 

Regulations. This includes, but is not limited to, the following:

(1) Maintaining sufficient funds at all times in Customer Accounts.

(2) Computing, recording and reporting completely and accurately the balances in the Statement 

of Segregation Requirements and Funds in Segregation and the Statement of Segregation 

Requirements.
ForecastEx LLC

October 25, 2023

Page 25 of 67

(3) Obtaining satisfactory Customer Segregated Account acknowledgment letters and identifying 

Customer Segregated Account as such.

(4) Preparing complete and materially accurate daily Customer Segregated Account in a timely 

manner.

(b) All Members and Sponsored FCMs must submit a daily Customer Segregated Account 

statement through the Clearinghouse’s-approved electronic transmissions by 12:00 CST on the 

following Settlement Bank Business Day.

(c) Members must provide ForecastEx’s Compliance Department with access to Customer 

Account information in a form and manner prescribed by the Compliance Department.

(d) All Members must provide written notice to the Compliance Department of a failure to 

maintain sufficient funds in Customer Accounts. The Compliance Department must receive 

immediate written notification when a Member knows or should have known of such failure.

(e) ForecastEx may prescribe additional Customer Account requirements.

Rule 306 – Large Trade Reporting

(a) Large Trader Position Reporting. Members are required to report position information on 

behalf of Customer Accounts carried on the books that have a position at or above the reportable 

level. For every Customer Account at or above the reportable level, Members must also report 

the amount of collateral used to support the positions of each individual customer.

(b) Reportable Level. A reportable account is any account, including Customer, firm, or liquidity 

provider that meets the reportable level. Each account that has been reportable must also be 

reported on the first day that it falls below the reportable level. The reportable level is one Event 

Position.

(c) Methods of Reporting. Members carrying Customer, firm, or liquidity provider positions 

must make arrangements to report those positions to the Clearinghouse. Reports must be 

submitted daily to the Clearinghouse by 7:00 CST. ForecastEx may require Members to submit 

multiple Large Trader Reports over the course of a single ForecastEx Business Day. The 

Clearinghouse will collect large trade data and transmit it to the CFTC on behalf of all Members

as necessary.

(d) Ownership and Control Information. For every reportable account, Members must submit the 

Ownership and Control information contained in CFTC Form 102 to ForecastEx in a manner that 

ForecastEx determines is acceptable.

Rule 307 – Withdrawal of a Member
ForecastEx LLC

October 25, 2023

Page 26 of 67

(a) A Member can withdraw from ForecastEx by submitting notice requesting withdrawal of 

their Membership. The notice will be accepted immediately and become effective once all of the 

Member’s positions are closed and the conditions in Rule 606 are met.

(b) Once a withdrawal notice has been accepted, all Access and Clearing Privileges terminate 

except for those necessary to close or transfer existing positions. The Member has 30 days to 

remove all Event Positions from its books by offset or Settlement. If this is not accomplished in 

30 days, the Clearinghouse may exercise its rights under Rule 609(e) to liquidate or transfer the 

open Event Positions of the Member.

(c) After withdrawal, a Member remains subject to the ForecastEx Rules to the extent that they 

apply to the Member’s activity at ForecastEx. Withdrawal is final and the Member can only be 

re-instated via a new membership application.

Rule 308 – Dues, Fees, and Assessments

(a) ForecastEx shall have the sole power to set the dates and amounts of any dues, assessments, 

or fees levied by ForecastEx.

(b) If a ForecastEx Participant fails to pay any ForecastEx dues, assessments, or fees, ForecastEx 

may suspend, revoke, limit, condition, restrict, or qualify the Access Privileges of such 

ForecastEx Participant.

Rule 309 – Application of Rules and Jurisdiction

(a) By placing bids on the Exchange, whether directly or through an intermediary, or by having a 

bid placed for their benefit, a Market Participant agrees to be bound by the Exchange Rules of 

ForecastEx and (i) be subject to the jurisdiction of the Exchange with respect to all matters 

arising from, related to, or in connection with its activity on the Exchange without any need for 

any further action, undertaking, or agreement and (ii) agrees to be bound by and comply with the 

Exchange Rules in relation to such transactions, including but not limited to rules requiring 

cooperating and participating in investigatory and disciplinary processes. A ForecastEx 

Participant also agrees to be bound by the Exchange Rules of ForecastEx with the consequences 

described above, solely by accessing the ForecastEx System.

(b) If a Market Participant has their Access Privileges revoked or terminated, it remains bound 

by the Exchange Rules. Market Participants are subject to the Exchange Rules to the extent 

applicable and remain subject to the jurisdiction of Exchange with respect to any and all matters 

arising from, related to, or in connection with their former participation in the Exchange. 

(c) ForecastEx may provide all information it possesses about any Market Participant to the 

CFTC or any other Regulatory Agency, Self-Regulatory Organization, law enforcement 

authority, or judicial tribunal, including foreign regulatory or self-regulatory bodies without 

notifying the Market Participant.
ForecastEx LLC

October 25, 2023

Page 27 of 67

Rule 310 – Recording Conversations

ForecastEx may record conversations where Officers, employees, or agents of ForecastEx are on 

one side and Market Participants are on the other. These recordings may be kept by ForecastEx 

in a manner and for a duration determined to be appropriate by ForecastEx Rules and CFTC 

Regulations.

Rule 311 – Public Information

(a) ForecastEx will maintain an accurate, current, and complete version of its Rulebook on its 

website. The Rulebook will be updated on the date of implementation of any new or amended 

rule.

(b) If ForecastEx decides to make an alteration to its Rulebook, it will publish a notice describing 

the changes to ForecastEx Rules prior to the effective date of the rule change. In order to enable 

Members to become aware of the rule change, at minimum, ForecastEx will post the notice on 

ForecastEx website when it is published.

(c) The Exchange will publish to its website the following pairing information each ForecastEx 

Business Day at 16:00 CT:

(1) For each currently listed Event Position: the previous day’s volume, open interest, highest, 

lowest, volume weighted average, last prices, and, if applicable, Settlement prices; and

(2) A list of trades including the Event Position symbol, price, quantity, and time.

(d) Contract Specifications for every listed Event Position will be posted by the Exchange to the 

ForecastEx website.

(e) To the extent that they are not contained in the Rulebook, ForecastEx will publish to its 

website the ForecastEx rules and regulations pertaining to the trading mechanism and the 

ForecastEx rules and regulations pertaining to the ForecastEx System.

(f) If ForecastEx creates an emergency rule in accordance with Rule 409, ForecastEx will 

publish a notice of the action on its website and notify Members via email.

(g) ForecastEx will publish any filings, such as those under Part 40 concurrent with filing of such 

information or submissions with the Secretary of the Commission. If ForecastEx requests 

confidential treatment of any information filed with the Secretary of the Commission; it will post 

on its website the public version of such filing or submission.

(h) ForecastEx will publish any and all fees in a fee schedule on the ForecastEx website.

(i) ForecastEx will publish a list of all current Members on the ForecastEx website.
ForecastEx LLC

October 25, 2023

Page 28 of 67

Chapter 4 – Participation at ForecastEx

Chapter 4 pertains to both the Clearinghouse and Exchange.

Rule 401 – ForecastEx Event Positions

(a) General. The Contracts listed at the Exchange are Event Positions. Each Event Market lists a 

“Yes” Event Position and a “No” Event Position on the same Event Question.

(b) Event Questions. The Settlement of an Event Position is based on the Outcome of an Event 

Question. Event Questions can be based on economic, business, environmental, legislative, or 

social events, or any other event that the Exchange chooses subject to the exclusion listed in this 

Rule 401(b). The Exchange will not list Event Markets deemed prohibited by the CFTC pursuant 

to Section 5c(5)(C) of the CEA.

(c) Entering Positions. Market Participants enter Exchange Event Positions by Bidding for either 

a “Yes” Position or a “No” Position in an Event Market and then being paired with a Market 

Participant who has Bid on the other contract in the Event Market. For a Market Participant to 

enter a “Yes” Position, their Bid must be paired with another Market Participant who has Bid on 

the paired “No” Position, and vice versa.

(d) Inverse Pricing. The “Yes” and “No” Positions of an Event Market are entered via inverse 

pricing. Market Participants Bid prices between $0.02 and $0.99. When the combined Bids for 

the “Yes” Position and “No” Position equal $1.01, the Exchange executes the Event Positions by 

pairing the Bids and then reports the Event Positions to the Clearinghouse. At this point, each 

Member will have entered into a Contract, and ForecastEx has the Obligation to pay all monies 

required at such time as the Event Position settles. The Clearinghouse confirms the completeness 

of all created contracts and the sufficiency of each Member’s funds to settle the created contract. 

Each party is required to post collateral equal to the price they enter their Event Position at (e.g., 

If a $0.20 Bid for a “Yes” Position and a $0.81 Bid for a “No” Position are paired, the “Yes” 

participant is required to post $0.20 per Event Position and the “No” participant is required to 

post $0.81 per Event Position). 

(e) Resolution. At the Resolution Time, the Outcome of an Event Question will be either “Yes” 

or “No”. Resolved Event Positions will be settled in accordance with Rule 603.

(f) Credit Check.

(1) Prior to an Authorized Trading User submitting a Bid, the Member will conduct a review of 

its Collateral Account to ensure the Member can fully collateralize the Bids prior to entering into 

any Event Positions. A Member cannot submit a Bid if they do not have the necessary funds 

and/or collateral.
ForecastEx LLC

October 25, 2023

Page 29 of 67

(2) Prior to an Authorized Trading User submitting a Bid, the Member or Sponsored FCM will 

conduct a review of the Customer Account on its books to ensure that the Customer has 

sufficient cash to fully-collateralize any Event Positions that could result from that Bid. 

(3) Prior to accepting a Bid, ForecastEx will conduct a review of the Member’s Collateral 

Account to ensure that the Member can fully collateralize the Bids prior to entering into any 

Event Positions.

(f) The minimum unit of trading is one Event Position.

(h) The minimum Bid increment for each Event Position is $0.01.

(i) Event Positions are non-marginable and have no loan value.

Rule 402 – Hours of Operation

Authorized Trading Users may place Bids and enter Event Positions at the times specified by 

ForecastEx. ForecastEx will provide a detailed trading schedule in advance on its website.

Rule 403 – Bid Entry

(a) All Bids must be entered into the Exchange Platform via electronic transmission by an 

Authorized Trading User. Market Participants who are not Authorized Trading Users cannot 

submit Bids directly to the Exchange Platform. Members and Sponsored FCMs must direct an 

Authorized Trading User to submit their Bids. Customers of Members and Customers of 

Sponsored FCMs must direct their Member or Sponsored FCM as applicable, to have an 

Authorized Trading User submit the Bids on their behalf. Each Member shall be responsible for 

any and all Bids entered by it, the Member’s Sponsored FCMs, or its employees, and for 

compliance by its Related Parties with this Rule 403. Prior to entering a Bid, the relevant 

ForecastEx Participant shall access the Exchange Platform by inputting the User ID assigned by 

the Exchange to that ForecastEx Participant. Each order must contain the following:

(i) Bid type;

(ii) Event Position identifiers including symbol and Resolution Time;

(iii) Whether the Bid is for the “Yes” Position or “No” Position;

(iv) Quantity;

(v) Price;

(vi) Account type;

(vii) Account number; and
ForecastEx LLC

October 25, 2023

Page 30 of 67

(viii) Any other information required from time to time by the Exchange.

(b) Audit Trail Requirements

(1) Members that provide connectivity to the Exchange are responsible for maintaining, or 

causing to be maintained, a Bid routing or front-end audit trail for all electronic Bids, including 

Bid entry, modification, cancellation and responses to such messages, entered on the Exchange 

through any gateway to the Exchange Platform. The audit trail must contain all Bid receipt, Bid 

entry, Bid modification or cancellation, and response or receipt times to the highest level of 

precision achievable by the operating system, in accordance with CFTC requirements for 

electronic Bids. The times captured must not be able to be modified by the Person entering the 

Bid.

(2) Members, including Authorized Trading Users, must maintain audit trail information as 

required by the CEA and CFTC Regulations, including, but not limited to, CFTC Regulations 

1.31 and 1.35 if applicable, and must be able to produce this data in a standard format upon 

request from the Regulatory Oversight Committee, Compliance Department or other relevant 

department of ForecastEx. ForecastEx will conduct regular audit trail reviews in accordance with 

CFTC Regulation 38.553.

(3) Members must maintain a complete record of all of Customer Bids to trade ForecastEx Event 

Positions received by the Member, and any other transaction records, communications or data 

received by the Member regarding its Customer Accounts.

(4) The audit trail must capture required fields, which include but are not limited to the 

following: all fields relating to Bid entry, including the ID of an Event Position, quantity, Bid 

type, User ID(s), Customer Type Indicator Code, timestamps, and, where applicable, stop/trigger 

price, type of action and action status code, and applicable information contained in this Rule 

403(b).

(5) For Bids that are filled, the audit trail must record the fill time of the Event Position and all 

fill information.

(c) If a Bid is entered at a price that would cause the combined price of the “Yes” and “No” Bids 

in an Event Market to exceed $1.01, the Bid will be rejected at the gateway.

Rule 404 – Placing Bids

(a) Bid Types. Authorized Trading Users may input the following Bid types into the Exchange: 

Limit. A Limit Bid is a Bid to enter a stated number of “Yes” Positions or “No” Positions at a 

specified price or at a lower price.

(b) Bid Modification. Any Bid may be modified or cancelled until it has been filled. The 

Exchange will attempt to cancel an existing Bid as soon as possible after a Member enters a 

cancellation instruction. The Bid may be filled before the Exchange is able to cancel it.
ForecastEx LLC

October 25, 2023

Page 31 of 67

Rule 405 – Filling Bids

(a) Subject to Rule 405(b), Bids are prioritized by price-time priority by the Exchange. The Bids 

for the highest price will be filled first. If there are multiple Bids at the same price, the Bid that 

was entered first will be filled first.

(b) If an Affiliated Customer enters a Bid at the same price level as a Bid of a non-Affiliated 

Customer, the Bid for the non-Affiliated Customer will always be filled first by the Exchange, 

regardless of the time that the Affiliated Customer entered their Bid. Affiliated Customer Bids 

are always filled last by the Exchange at every price level.

Rule 406 – Entering Event Positions on Behalf of Customers

All Customer Bids must be transmitted to the Exchange by each Customer’s Member. Each 

Member shall maintain a secure connection to the Exchange and comply with all technical and 

other requirements established by the Exchange for this purpose.

Rule 407 - Error Trades

(a) Bust/Adjust Policy

(1) Title. This Rule 407(a) will be referred to as the “ForecastEx Bust/Adjust Policy”.

(2) Reviewing Executions.

(i)The Compliance Department may conduct a bust/adjust review of any Event Positions entered 

on the Exchange Platform on the same ForecastEx Business Day that the Event Position was 

entered.

(ii) ForecastEx Participants may request a bust/adjust review of any Event Position entered on 

the Exchange Platform to which they or, if the ForecastEx Participant is a Member, their 

Customer were a party within 15 minutes of the Event Position being entered. If a ForecastEx 

Participant requests a review, it must provide the Exchange with the reason it believes the 

execution should be busted or adjusted.

(iii) If an execution is placed under review, the Exchange will notify the market that the 

execution is under review.

(3) Reviewing Executions.

(i) The Exchange will not bust or adjust an execution if the only reason for busting or adjusting 

the execution is that the Bid was entered with the wrong price by a Market Participant. As such, 

the Exchange does not construct a “no bust range” for a given execution.
ForecastEx LLC

October 25, 2023

Page 32 of 67

(ii) The Exchange will only consider busting or adjusting a pairing if one of the following 

circumstances is true:

A. The Exchange has determined that the execution was part of a manipulative scheme.

B. The Exchange has determined that the execution did not result in a change in beneficial 

ownership or was conducted to affect a “money pass”.

C. Letting the execution stand would result in inaccurate information about the Event Market 

being displayed to Market Participants or the public.

D. The execution was disruptive or was otherwise unconducive to fair and orderly markets.

(b) Errors in handling of Customer Bids. If a Market Participant discovers that there was an error 

in the handling of a Customer Bid after the fill has been completed and the Bid cannot be filled 

at a price that is better than or equal to the price that the Bid should have been filled, such 

Market Participant shall fill the Bid in the market and make an appropriate cash adjustment so 

that the Customer receives a price equal to or better than what they should have originally 

received.

(c) Errors by a Member may be transferred to an error trade account in accordance with Rule 

410(a).

Rule 408 – Position Accountability

(a) All Event Positions on ForecastEx are subject to position accountability. The default position 

accountability limit is 250,000 Event Positions in any one Event Market.

(b) A Market Participant who increases their position above the position accountability limit 

agrees to provide in a timely fashion, upon request by the Exchange, information regarding the 

nature of the Event Positions, trading strategy, or any other aspect of the Event Position 

ForecastEx determines is necessary.

(c) If requested by the Exchange, a Market Participant whose position exceeds the position 

accountability level must: (1) refrain from increasing the size of their position; or (2) reduce the 

size of their position, in a timely fashion, by the amount directed by the Exchange. If a Market 

Participant refuses to comply with these requests, the Clearinghouse may forcibly liquidate the 

Market Participant’s position.

(d) A Market Participant is in violation of this position accountability rule if:

(1) The Market Participant does not provide the requested information concerning the position to 

ForecastEx; or

(2) The Market Participant does not honor a request by ForecastEx in accordance with this Rule 

408(c).
ForecastEx LLC

October 25, 2023

Page 33 of 67

Rule 409 - Emergencies

(a) General. If the CEO, or an individual designated by the CEO and approved by the Board, 

determines that an emergency exists, the CEO or their designee may create a temporary 

emergency rule. The emergency rule can remain in effect for up to 30 ForecastEx Business Days. 

ForecastEx will document its decision-making process and reasons for taking emergency action 

including how any conflicts of interest have been managed and minimized.

(b) Emergency Powers. ForecastEx’s emergency powers include:

(1) Preventing Market Participants from opening new Event Positions that do not offset existing 

Event Positions;

(2) Changing the Resolution Time of any Event Market;

(3) Imposing or modifying price and/or position limits for any Event Market;

(4) Ordering the liquidation of existing Event Positions;

(5) Ordering the transfer of Event Positions held by any Member to one or more other Members 

obligated to assume such Event Positions;

(6) Limiting or changing the hours of operation;

(7) Suspending or curtailing Bidding in any or all Event Markets; and

(8) Modifying or suspending any provision of this ForecastEx Rulebook.

(c) Emergency Event. Emergency conditions include the following:

(1) Any circumstance that severely and adversely affects, or threatens to severely and adversely 

affect, the physical functions of ForecastEx, or threatens to severely and adversely affect the 

physical functions of ForecastEx. This includes but is not limited to the following: fire, casualty, 

bomb threats, terrorism, computer system breakdowns, trading system breakdowns, or 

transportation breakdowns;

(2) Any activity that manipulates or attempts to manipulate an Event Market entered at the 

Exchange;

(3) Circumstances or actions that may materially affect the performance of Event Positions 

entered on the Exchange;

(4) Circumstances or actions that may materially affect the ability of ForecastEx to perform its 

normal functions;
ForecastEx LLC

October 25, 2023

Page 34 of 67

(5) Actions taken by a governmental body, a Self-Regulatory Organization, a contract market, or 

any other exchange, market, facility, or trade association that may directly impact trading on the 

Exchange;

(6) Circumstances where a Market Participant cannot continue conducting business with 

ForecastEx without jeopardizing the safety of ForecastEx or Market Participants;

(7) Bankruptcy or insolvency of ForecastEx or the imposition of any injunction or other restraint 

by any government agency, clearing house, court or arbitrator on ForecastEx which may affect 

the ability of ForecastEx to perform on an Event Position;

(8) Any circumstance which may have a material impact on the reliability or transparency of the 

Underlying Event related to an Event Market;

(9) Any circumstance where the CFTC directs ForecastEx to use its emergency authority; and

(10) Any other circumstance which the CEO determines threatens or may threaten fair and 

orderly markets.

(d) Notification. In accordance with CFTC Regulation 40.6, ForecastEx will notify the CFTC or 

any emergency rule or emergency action taken.

(e) Conflicts of interest. The CEO, or their designee, is bound by the Conflicts of Interest 

provisions set forth in Rule 206. If a conflict of interest is found to exist involving the CEO or 

their designee, the Board shall be responsible for taking the Emergency action.

Rule 410 – Transfers

(a) Existing Event Positions may be transferred from one Member to another Member or on the 

books of a Member provided:

(i) The Member or Members notifies ForecastEx prior to the transfer; and

(ii) An error was made in the reporting or clearing of an Event Position, the transfer moves the 

Event Position to an error account of the Member, and the transfer is completed within two 

ForecastEx Business Days after the Event Position is opened.

(b) Event Positions and funds belonging to a Customer of a Member (“carrying Member”) may 

be transferred to another Member (“receiving Member”) without requiring close-out and rebooking of the positions prior to transfer provided that:

(i) The Customer instructed their Member to make the transfer;

(ii) The receiving Member has consented to the transfer;

(iii) The Customer is not currently in default to the carrying Member; and
ForecastEx LLC

October 25, 2023

Page 35 of 67

(iv) The carrying Member notifies ForecastEx prior to the transfer.

(c) Event Positions may also be transferred for reasons other than those listed in Rule 410(a) 

provided that the Member receives approval for the transfer from ForecastEx prior to transferring 

the Event Positions.

(d) Transfers will be reported to the Clearinghouse in a form determined acceptable by 

ForecastEx. Members will maintain a record of all transfers.

Rule 411 – Market Data Available to Market Participants

(a) The Exchange will make information regarding filled Event Positions, Bids, and other 

matters it may deem appropriate available to Market Participants at such times and in such 

manner as the Exchange may consider necessary or appropriate. Each Market Participant 

receiving any such information through the ForecastEx system may redistribute such information 

only to such extent and in such manner as may be permitted by the Board from time to time.

(b) An acknowledgement of each filled Bid will be forwarded to the party who opened the Event 

Position resulting from such Bid.

Rule 412 – Precedence of Federal Law

Any change in instructions, order, ruling, directive, or law issued or enacted by any court or 

agency of the Federal Government of the United States that conflicts with the Rules contained in 

this Rulebook shall take precedence, immediately become a part of these Rules, and be effective 

for all currently active and newly listed Event Markets.

Rule 413 – Contract Modifications

(a) Source Agency. If any event or circumstance which may have a material impact on the 

reliability or transparency of an Event Market’s Source Agency or the underlying data related to 

the Event Market arises, including but not limited to if an Event Market’s Source Agency is 

unavailable or undergoes significant modifications, the Exchange retains the authority to 

designate a new Source Agency and Underlying for that Event Market and to change any 

associated Contract Specifications after the first day of trading. The new Source Agency and 

Underlying are required to be objective and verifiable. Any such change will be posted to the 

ForecastEx website.

(b) Resolution Time. If the Event Question that determines the Outcome of an Event Market is 

based on an Event occurring, or occurring multiple times, within a stated timeframe, the 

Exchange may accelerate the Resolution Time of the Event Market if the Outcome of the Event 

Question has been determined prior to the initial Resolution Time.

Rule 414 – Accelerated Settlement
ForecastEx LLC

October 25, 2023

Page 36 of 67

(a) If any circumstance arises which would prevent the Event Question from being answered 

accurately at the Resolution Time, including but not limited to the cancellation of the event that 

determines the Outcome of the Event Question, ForecastEx shall have the power to accelerate or 

delay the Settlement of the Event Market.

(b) If ForecastEx determines to accelerate the Settlement of an Event Market, ForecastEx will 

determine the payouts to the Member Participants who hold “Yes” Positions and “No” Positions 

based on the affected Event Question.

(1) Upon determining to accelerate the Settlement of an Event Market, the Exchange will post a 

public notice on its website and send emails to affected Members. At this time, the Exchange 

will also suspend trading in the affected Event Market.

(2) If available, ForecastEx will use the most recent last prices of the Event Positions affected to 

determine to the payout.

(3) If the most recent last price is not available, or if ForecastEx determines in its sole discretion 

that the most recent last price does not represent a fair allocation, the Event Review Committee 

will be responsible for making a binding determination of fair allocation. In no event shall the 

combined payout for a single “Yes” Position and a single “No” Position exceed $1.00. 

Determinations by the Event Review Committee are final and not subject to review.

(4) ForecastEx will settle the Event Market as soon as is practical after initiating the accelerated 

Settlement process.

Rule 415 – Event Review Process

(a) Before Settlement, the Exchange may initiate the Event Review Process, at its sole discretion 

and by taking into account several factors including any circumstances that may have a material 

impact on the reliability or transparency of the Underlying related to the Event Market. If the 

Event Review Process is initiated, the Exchange will post on the ForecastEx website that the 

Event Market’s Outcome is under review.

(b) Once the Event Review Process is initiated, Settlement will not proceed until the Event 

Review Process is concluded, at which point Settlement will occur at the Settlement cycle 

immediately following the conclusion of the Event Review Process.

(c) If the Event Review Process was initiated due to a potential error in the data retrieved from 

the Source Agency the Change Control Oversight Board may determine the correct resolution of 

the Event Market by unanimous consent after reviewing the relevant data and evidence.

(d) If there is not unanimous agreement among the Officers, or if the Event Review Process was 

initiated for reasons other than those outlined in this Rule 415(c), The Event Review Committee 

will determine the Event Resolution.
ForecastEx LLC

October 25, 2023

Page 37 of 67

(e) The Event Review Committee shall review all relevant evidence and determine a final 

Outcome as soon as is feasible after the Event Review Process is initiated.

(f) The Event Review Committee has full discretion in resolving the Event Review Process. The 

determinations by the Event Review Committee are final.

Chapter 5 – Obligations of Members

Chapter 5 pertains to both the Clearinghouse and Exchange.

Rule 501 – Recordkeeping

(a) Each Member and Sponsored FCM shall prepare and keep current all books, ledgers, and 

other similar records required to be kept by it pursuant to the CEA, CFTC Regulations, and 

ForecastEx Rules, as well as any other books and records that ForecastEx may prescribe. Such 

books and records will be made available to ForecastEx upon request.

(b) Each Member and Sponsored FCM shall keep all books and records required in Rule 501(a) 

for a period of five years from the date that they were first prepared, unless otherwise provided in 

ForecastEx Rules or required by law. The books and records shall be readily available during the 

first two years of the five-year period. During the five-year period, all books and records will be 

made available to ForecastEx or its representatives upon request.

Rule 502 – Financial Reporting Requirements

(a) Each Member and Sponsored FCM shall comply with the provisions of Applicable Law 

relating to minimum financial and related reporting and recordkeeping requirements. This 

includes the minimum financial requirements in CFTC Regulation 1.17 as well as the reporting 

requirements in CFTC Regulations 1.10 and 1.12. Members and Sponsored FCMs shall provide 

to ForecastEx a copy of any filing required to be filed with the CFTC pursuant to CFTC 

Regulation 1.12.

(b) Members and Sponsored FCMs shall be required to satisfy such minimum financial 

requirements, and comply with such Obligations that may be established from time to time by 

ForecastEx.

(c) Members and Sponsored FCMs must immediately notify the CEO or their designee 

immediately upon becoming aware that it fails to satisfy the minimum financial requirements 

applicable to it.

(d) If a Member or Sponsored FCM is subject to the early warning requirements set forth in 

CFTC Regulation 1.12, the CEO or their designee may impose, as they deem necessary or 

appropriate, any restriction or conditions on the business and operation of such Member.
ForecastEx LLC

October 25, 2023

Page 38 of 67

(e) If a Member or Sponsored FCM cannot demonstrate that it is in compliance with the 

minimum financial requirements applicable to it, they may not participate on the Exchange 

except for the purpose of offsetting open Event Positions.

(f) Members and Sponsored FCMs shall be required to submit a true and complete copy of their 

monthly Form 1-FR (or FOCUS Report if registered as a broker-dealer with the SEC) within the 

deadlines specific by the CFTC (or the SEC, if registered as a broker-dealer). Additionally, each 

Member and Sponsored FCM shall file the 1-FR (or FOCUS Report if registered as a brokerdealer with the SEC) as of the close of its fiscal year within the deadlines specified by the CFTC 

(or the SEC, if registered as a broker-dealer). Such filing must be certified by an independent 

public accountant.

Rule 503 – Treatment of Customer Funds

Each Member and Sponsored FCM shall comply with the provisions of CFTC Regulations and 

Applicable Law relating to the treatment of Customer funds and the maintenance of books and 

records with respect thereto. This includes CFTC Regulations 1.20 - 1.32 and 22.2. Any Member 

or Sponsored FCM that violates the aforementioned CFTC Regulations will be deemed to have 

violated this Rule 503.

Rule 504 – Confirmations and Customer Statements

(a) Confirmations. Members and Sponsored FCMs that enter into an Event Position on behalf of 

a Customer shall provide a confirmation to the Customer no later than the Business Day 

following the fill date. The confirmation shall be in the form that the Exchange shall from time to 

time prescribe and at minimum indicate the symbol, whether a “Yes” Position or “No” Position 

was entered, the price, and quantity.

(b) Customer Statements. Members and Sponsored FCMs that enter into Event Positions on 

behalf of Customers shall furnish a monthly statement of account to each Customer, in 

accordance with applicable CFTC Regulations.

Rule 505 – Responsibility for Customer Bids

(a) ForecastEx Participants handling Bids for Customers shall exercise due diligence in the 

handling and execution of such Bids. Failure to act with due diligence shall be considered 

negligence.

(b) ForecastEx Participants are prohibited from directly or indirectly guaranteeing a fill of a Bid 

or any of its terms (such as quantity or price). This Rule 505(b) shall not be construed to prevent 

a Member or Sponsored FCM from assuming or sharing losses resulting from an error in 

mishandling a Bid.
ForecastEx LLC

October 25, 2023

Page 39 of 67

(c) ForecastEx Participants shall not adjust the price at which a Bid was filled or be held 

responsible for executing or failing to fill a Bid unless they were negligent or are settling a 

dispute regarding negligence.

Rule 506 – System Security

(a) Members must establish and maintain cyber security policies and procedures to protect each 

Member’s systems, including but not limited to any API.

(b) Members must at all times have at least one employee or agent designated as its 

administrator. The administrator is responsible for overseeing the activity by the Authorized 

Trading Users of that Member.

(c) Each Authorized Trading User must have a unique User ID.

(d) Each Order entered by a Member on the Exchange on behalf of a Customer must contain: (1) 

such Customer’s User ID or Customer ID; and (2) the User ID of the Member’s Authorized 

Trading User that entered the Order.

(e) No Person may use a User ID to place any Order except as permitted by these Rules, nor may 

any Person knowingly permit or assist with the unauthorized use of a User ID. Each Member and 

Authorized Trading User shall ensure that no User ID is used by any Person not authorized by 

these Rules. Each Member shall establish and maintain policies and procedures to ensure the 

proper use and protection of User IDs. An Authorized Trading User is prohibited from using 

another Person’s User ID, unless the Authorized Trading User is entering the order of a 

Customer in accordance with the Rules.

(f) Each Member shall be solely responsible for controlling and monitoring the use of all User 

IDs issued to its Authorized Trading Users.

(g) Each Member shall notify the Exchange of the need to terminate any User IDs or the status of 

any of its Authorized Trading Users.

(h) Each Member shall keep confidential and secure all User IDs, except as permitted pursuant to 

these Rules, and any account numbers and passwords related to the Exchange Platform and shall 

notify the Exchange promptly upon becoming aware of:

(1) Any unauthorized disclosure or use of any User ID and of any other compromise to a User ID 

that would reasonably cause the Exchange to deactivate the User ID;

(2) Any loss of any User ID; and

(3) Any unauthorized access to the Exchange by any Person using a User ID assigned to such 

Member.
ForecastEx LLC

October 25, 2023

Page 40 of 67

(i) Each trading system that automates the generation and routing of orders to the Exchange must 

have a User ID.

Rule 507 – Documents Provided to Customers

Members must provide their Customers a copy of the ForecastEx risk disclosure statement and 

ForecastEx Rulebook prior to accepting any Bids from such Customers for submission to the 

Exchange.

Rule 508 - Fraudulent or Misleading Communications

(a) No Market Participant shall make any fraudulent or misleading communications relating to 

the entering of Bids or the entering of Event Positions on the Exchange.

(b) No Market Participant shall make any misstatement of a material fact to ForecastEx, 

including the Board, any committee thereof, or any Director, Officer, or employee of ForecastEx.

Rule 509 – Prohibited Actions and Activities

(a) Fraudulent Acts. No Market Participant shall engage in any fraudulent act or engage in any 

scheme to defraud, deceive, or trick in connection with any Event Market or any other activity 

related to ForecastEx.

(b) Fictitious Transactions. No Market Participant shall create fictitious Event Positions or fill 

any Bid for a fictitious Event Position with knowledge of its nature.

(c) Market Manipulation. Any manipulation of an Event Market is prohibited. Bids entered into 

the Exchange for the purpose of generating unnecessary volatility or creating a condition where 

probabilities do not reflect fair market value is prohibited. Any Market Participant who makes or 

in any way assists in carrying out or attempting to carry out any plan or scheme for manipulating 

the market will have engaged in an act detrimental to the Exchange.

(d) Adherence to Law.

(1) General. No Market Participant shall engage in conduct in violation of Applicable Law or 

ForecastEx Rules.

(2) Sales Practice Rules. Without limiting the generality of Rule 509(d)(1), each Market 

Participant shall comply with any and all sales practice rules from time to time promulgated by 

NFA, including those related to bunched orders, opening and approval of accounts, suitability, 

use of discretion, supervision of accounts, risk disclosure document delivery, communications, 

monthly statements and confirmations, registration, qualification and continuing education, 

Customer complaints, and prohibition against guarantees against loss and profit sharing.
ForecastEx LLC

October 25, 2023

Page 41 of 67

(e) Misuse of Access Privileges. No Market Participant may use its Access Privileges in any way 

which could bring disrepute upon such Market Participant or ForecastEx.

(f) Acts Detrimental to ForecastEx. No Market Participant shall engage in any act detrimental to 

ForecastEx or engage in conduct inconsistent with just and equitable principles of trade.

(g) Pre-arranged Fills.

(1) Non-competitive Fills. No Market Participant shall enter into any non-competitive Event 

Positions on the ForecastEx System including any accommodation fills or any fill that has been 

directly or indirectly pre-arranged.

(2) Wash Trading. No Market Participant shall enter or attempt to enter into any Event Position 

on the Exchange that (i) does not result in a change of beneficial ownership; (ii) is designed to 

unnaturally inflate trading volume; (iii) in any way attempts to circumvent the Exchange’s order 

processing, fill systems, or other attempts to circumvent the exposure of the Bid to open and 

competitive bidding on the Exchange; or (iv) has some other illegitimate purpose.

(3) Money Pass. No Market Participant shall engage in any activity that is intended to 

accomplish money pass.

(h) Insider Trading

(1) Access to non-public information. If a Market Participant (i) is an Insider that has access to 

material non-public information that is the subject of an Event Question for any Event Market, or 

(ii) has the ability to exert any influence of the subject of an Event Question for any Event 

Market, that Market Participant is prohibited from entering or attempting to enter any Event 

Position on the Exchange for that Event Market.

(2) Employees of Source Agencies. A Market Participant who is an employee or affiliate of a 

Source Agency for any Event Question is prohibited from entering or attempting to enter any 

Event Position on the Exchange for Event Markets with such Event Questions regardless of 

whether the Market Participant possesses material non-public information.

(3) If a Market Participant is a decision maker, who either directly or indirectly, or has any 

influence, either directly or indirectly, no matter the scale or importance of the influence, on the 

Outcome of an Event Question for any Event Market, that Market Participant is prohibited from 

entering into or attempting to enter into those Event Positions on the Exchange.

(i) No Market Participant shall engage in any activity that constitutes fraudulent or abusive 

trading, including but not limited to violating Bids, demonstrating intentional or reckless 

disregard for the orderly entering of Event Positions, or spoofing.

(j) No Market Participant shall engage in any activity that is intended to accomplish “front 

running” as is defined by the CFTC.
ForecastEx LLC

October 25, 2023

Page 42 of 67

(k) Integrity of ForecastEx. No Market Participant shall engage in any activity that adversely 

affects the integrity of the ForecastEx System or its underlying systems.

(l) Insufficient funds.

(1) Market Participants are prohibited from entering Bids on the Exchange if there are 

insufficient funds in the Market Participant’s account to satisfy the Bids if they are filled.

(2) Members are prohibited from depositing funds into their Collateral Account from an account 

which does not hold sufficient funds at the time of deposit, and at the time the deposit is 

presented to the Clearinghouse for payment.

(m) Priority of Customer Bids.

(1) No Market Participant shall knowingly enter an Event Position for a Personal or proprietary 

account of such Market Participant or an account where the Market Participant has a proprietary 

interest when the Market Participant has in hand Bids for the same Event Position for any other 

Person at the same price, a higher price, or at the market price.

(2) No Market Participant shall knowingly enter a discretionary Bid for an Event Position 

including, without limitation, a Bid allowing such Market Participant discretion as to time and 

price, for an immediate family member or for a Personal or proprietary account of any other 

Market Participant when the Market Participant entering the discretionary Bid has in hand a 

Customer market Bid for the same Event Position. This provision does not apply if the Customer 

has consented in writing to this activity.

(3) A Market Participant entering Bids into the Exchange must enter all Customer Bids that the 

Exchange is capable of accepting prior to entering a Bid for a Personal or proprietary account of 

such Market Participant, an account in which the Market Participant has a proprietary interest, or 

a Bid for a discretionary account in which the Market Participant has a Personal or proprietary 

interest.

(4) No Market Participant that consists of more than one individual, shall be deemed to have 

violated this Rule 509(m) if (i) such Market Participant has in place appropriate “firewall” or 

separation of function procedures and (ii) the individual executing the proprietary or 

discretionary Bid has no direct knowledge of the Customer Bid for the same Event Position.

(n) Trading Against Customers’ Bids. No Market Participant shall enter a Bid in an Event 

Market on behalf of a Customer in which the Market Participant intentionally enters an opposing 

Bid in the same Event Market that results in both Bids being filled.

(o) Withholding Bids. No Market Participant shall withhold or withdraw from the Exchange any 

Bid or part of a Bid, placed by a Customer with the Market Participant.

(p) Disclosing Bids. No Market Participant shall disclose to any Person any Bid placed by a 

Customer, except to ForecastEx or the CFTC.
ForecastEx LLC

October 25, 2023

Page 43 of 67

(q) Supervision. Each Member and Sponsored FCM is responsible for the supervision of its 

Related Parties and ensuring that they remain in compliance with the ForecastEx Rulebook. This 

includes having appropriate written supervisory procedures for activity on ForecastEx as well as 

reasonable monitoring of Related Parties to ensure compliance with ForecastEx Rules. Members 

and Sponsored FCMs may be held responsible for the actions of their Related Parties.

Chapter 6: Clearing Rules

Chapter 6 pertains to the Clearinghouse.

Rule 601 – Application of Clearinghouse Rules and 

Jurisdiction

(a) By accessing the ForecastEx System, a ForecastEx Participant agrees to be bound by the 

Clearinghouse Rules of ForecastEx, and (i) be subject to the jurisdiction of the Clearinghouse 

with respect to all matters arising from, related to, or in connection with their activity on the 

Clearinghouse without any need for any further action, undertaking, or agreement and (ii) agrees 

to be bound by and comply with the Clearinghouse Rules in relation to such transactions, 

including but not limited to rules requiring cooperating and participating in investigatory and 

disciplinary processes.

(b) If a ForecastEx Participant has their Clearing Privileges revoked or terminated, it remains 

bound by the Clearinghouse Rules. ForecastEx Participants are subject to the Clearinghouse 

Rules to the extent applicable and remain subject to the jurisdiction of Clearinghouse with 

respect to any and all matters arising from, related to, or in connection with their former 

participation in the Clearinghouse.

(c) ForecastEx may provide all information it possesses about any ForecastEx Participant to the 

CFTC or any other Regulatory Agency, Self-Regulatory Organization, law enforcement 

authority, or judicial tribunal, including foreign regulatory or self-regulatory bodies without 

notifying the ForecastEx Participant.

Rule 602 – Clearing

(a) Bank Accounts. Members are required to maintain a Bank Account with the ability to 

instantaneously and irrevocably transfer funds from the Bank Account to their ForecastEx 

Collateral Accounts at ForecastEx’s Settlement Bank. It is the responsibility of Members to 

ensure that any Sponsored FCM or other Customer who sends a Bid to the Exchange has the 

funds required to fully collateralize their position if their Bid is filled. Members must maintain 

segregation of Customer funds from non-customer funds on their own books and must not 

deposit Customer funds into a Non-customer Collateral Account at the Clearinghouse.

(b) Clearing Agreement. Upon submission of a Bid by a Sponsored FCM, the Clearinghouse will 

conduct a review to ensure that a valid Clearing Agreement exists between that Sponsored FCM 
ForecastEx LLC

October 25, 2023

Page 44 of 67

and the Member designated to clear and settle the Event Position(s). If such Clearing Agreement 

is in effect the Exchange will accept the Bid and, if the Event Position is entered, the 

Clearinghouse shall transfer the filled trade to the designated account of the Member. The 

Exchange will reject any Bid submitted by a Sponsored FCM where after such review it has 

determined a valid Clearing Agreement does not exist.

(c) Clearing. Upon recognition by the Exchange that the $1.01 threshold for creating Event 

Positions has been reached, the Exchange shall notify the Clearinghouse of the Event Positions. 

At this point, each Member will have entered into a Contract, and ForecastEx has the Obligation 

to pay all monies required at such time as the Event Position settles. This shall be effective in 

law for all such purposes. Each Members consents to this process by entering Bids and the 

Clearinghouse confirms the completeness of all created contracts and the sufficiency of each 

Member’s funds to settle the created contract.

(d) Position Recording. The Clearinghouse will record the position and collateral balances of 

each account, on an account-by-account basis, at least once every ForecastEx Business Day.

(e) All terms of a cleared Event Position must conform to the Contract Specifications.

(f) If the Clearinghouse rejects a potential Event Position for clearing for any reason, the event 

position is void ab initio.

Rule 603 – Settlement of Event Positions

(a) At an Event Contract’s Resolution Time, if the Outcome of the Event Question is “Yes”, then 

holders of the “Yes” Position will be entitled to receive the Settlement Value of $1.00 per 

contract and holders of the “No” Position will receive $0.00. If the Outcome of the Event 

Question is “No”, then holders of the “No” Position will be entitled to receive the Settlement 

Value of $1.00 per contract and holders of the “Yes” Position will receive $0.00.

(b) At the Resolution Time, the Exchange will cause and/or instruct the Clearinghouse to:

(1) Notify all Members whether they will receive a Settlement Value pursuant to this Rule 

603(a);

(2) Settle the Event Positions as follows:

(i) In the case of the Member holding an Event Position having a Settlement Value of $0.00, the 

Event Position is extinguished from the Member’s account.

(ii) In the case of the Member holding an Event Position having a Settlement Value of $1.00, the 

Event Position is extinguished from the Member’s account and such Member’s Collateral 

Account is credited $1.00 for each extinguished contract; and
ForecastEx LLC

October 25, 2023

Page 45 of 67

(iii) Any collateral in excess of the Settlement amount credited to Members for each “Yes” 

Contract and “No” Contract pair shall be considered a fee due ForecastEx in accordance with 

Rule 308.

(3) Settlement for Resolved Contracts will occur daily. In the case of contracts for which 

ForecastEx has confirmed the outcome by 12:00 CST on a Settlement Bank Business Day,

Settlement will take place at 13:00 CST that Settlement Bank Business Day. In the case of 

contracts for which ForecastEx has determined the outcome after 12:00 CST (but prior to 12:00 

CST the following Settlement Bank Business Day), Settlement will take place at 13:00 CST the 

following Settlement Bank Business Day.

(c) Prior to Settlement, ForecastEx may, at its sole discretion, initiate the Event Review Process 

as provided in Rule 415.

(d) The Clearinghouse will distribute notification via electronic mail at Settlement to all 

Members who hold the relevant Event Positions.

(e) Settlement is irrevocable and unconditional.

Rule 604 – Offsetting Positions

(a) A Market Participant may not simultaneously hold both “Yes” Positions and “No” Positions 

for the same Event Market. If a Market Participant enters into a transaction which results in such 

offsetting positions prior to Resolution Time, the responsible Member must notify the 

Clearinghouse that the Event Positions should be offset no later than 16:00 CST each day (i.e., 

the “netting deadline”).

(b) When Event Positions are offset, the offsetting positions are cancelled and the Member’s 

account is credited $1.00 for each pair of Event Positions offset. If the offset is for a Member’s 

Customer, the Member is obligated to pass the offset payments to the applicable Customer 

accounts. When Event Positions are offset, open interest in both the “Yes” and “No” Event 

Positions decrease. The Member must accurately report large trader positions and open interest 

in both the “Yes” Positions and “No” Positions.

(c) Members must offset Event Positions at the Clearinghouse in a manner consistent with CFTC 

Regulation 1.46.

(d) Members must post collateral with the Clearinghouse to support Bids which serve to offset 

existing Event Positions.

(e) The Settlement of offsetting positions occurs daily by 9:00 CST the Settlement Bank 

Business Day following the netting deadline.

Rule 605 – Deposit Procedures
ForecastEx LLC

October 25, 2023

Page 46 of 67

(a) Deposits of funds or securities are to be initiated through a Member’s Bank Account and such 

deposits are available for immediate credit upon receipt.

(b) Members are responsible for all transfers of funds from their Bank Account to the Collateral 

Accounts of the Clearinghouse for credit to the relevant Customer Event Positions. Members 

must maintain separate Collateral Accounts for non-customer and Customer positions.

Rule 606 – Member Withdrawal Requests

(a) Only an Authorized Representative may submit a withdrawal notification through the 

Member before the Clearinghouse transfers funds to a Member’s Bank Account. Upon receipt of 

a withdrawal notification, the Clearinghouse no longer permits funds in the amount listed in the 

withdrawal notification to be used for Access Privileges and Clearing Privileges. The 

Clearinghouse will reject any withdrawal request if the effect of that request, if processed, were 

to result in a deficiency in the Member’s Collateral Account.

(b) Members are responsible for providing accurate account numbers to allow the Clearinghouse 

to effect transfers to the Members.

(c) The Clearinghouse will make a good faith effort to process all excess collateral withdrawal 

requests received prior to 13:00 CST that same Settlement Bank Business Day. Requests not 

processed on that same Settlement Bank Business Day will be processed the following 

Settlement Bank Business Day assuming the Member maintains sufficient collateral after giving 

effect to the withdrawal.

Rule 607 – Reconciliation

The Clearinghouse shall reconcile the positions and cash and collateral balances of each Member 

on a regular schedule to be published by the Clearinghouse, but in every case at least once each 

ForecastEx Business Day. The Clearinghouse shall make available to each Member the position, 

cash, and collateral balances of each Member for their Customer and Non-customer Collateral 

Accounts. All Members shall be responsible for reconciling their records with the records that 

the Clearinghouse makes available to Members.

Rule 608 – Full Collateralization Required

Each Member on behalf of itself and its Customers, shall deposit and maintain with the 

Clearinghouse funds to fully collateralize any Event Positions held by the Member. A Member, 

or any other ForecastEx Participant sponsored by the Member will not be permitted to enter a 

Bid for an Event Position unless the Member deposits and maintains sufficient collateral to fully 

collateralize any potential Event Position that could result from the Bid. Collateral transfers 

made by a Member to the Clearinghouse or by the Clearinghouse to a Member are irrevocable 

and unconditional when effected except in the case of funds transferred to a Member in the event 

of fraud or error.
ForecastEx LLC

October 25, 2023

Page 47 of 67

Rule 609 – Collateral

(a) Subject to the terms and conditions of the Clearinghouse, the Clearinghouse will accept from 

Members the following as collateral: cash, and any other form of collateral deemed acceptable 

by the Clearing Committee. Upon the Clearing Committee’s approval of a form of collateral, the 

approval will be communicated through notices to Members and listed on the ForecastEx 

website. The Clearinghouse will value non-cash collateral as it deems appropriate.

(b) Except as otherwise provided herein, collateral must be and remain unencumbered. Each 

Member posting collateral hereby grants to the Clearinghouse a continuing first priority security 

interest in, lien on, right of setoff against, and collateral assignment of all such Member’s right, 

title, and interest in and to any property and collateral deposited with the Clearinghouse by the 

Member, whether now owned or existing or hereafter acquired or arising, including without 

limitation such Member’s Customer Account and all securities entitlements held therein and all 

funds held in a Collateral Account, and all proceeds of the foregoing. A Member shall execute 

any documents required by the Clearinghouse to create, perfect, and enforce such lien. Collateral 

is protected from claw back by creditors of a defaulting Member.

(c) A Member must transfer the collateral to the Clearinghouse or to a Collateral Account and the 

Clearinghouse will hold collateral transferred to the Clearinghouse on behalf of the Member. The 

Clearinghouse will credit to the Member the collateral such Member deposits. Collateral shall be 

held by the Clearinghouse until a Member submits a withdrawal notification unless otherwise 

stipulated by ForecastEx Rules.

(d) The Clearinghouse will not be responsible for any diminution in value of collateral that a 

Member deposits with the Clearinghouse. Any fluctuation in markets is the risk of each Member. 

Any interest earned by the Clearinghouse through reinvestment of collateral maintained by a 

Member in its Collateral Account may be retained by the Clearinghouse.

(e) The Clearinghouse has the right to liquidate or pledge for loan purposes a Member’s Event 

Positions or non-cash collateral to the extent necessary to close or transfer Event Positions, fulfill 

Obligations to the Clearinghouse or other Members, and to return collateral in the event that (1) 

the Member ceases to be a Member, (2) ForecastEx suspends or terminates the Member’s Access 

Privileges or Clearing Privileges, (3) the Member’s open position in any Event Position becomes 

less than fully collateralized, or (4) the Clearinghouse determines in its sole discretion that it is 

necessary to take such measures.

(f) The Clearinghouse will at least once each Settlement Bank Business Day rebalance the funds 

held in the Customer and Non-customer Collateral Accounts based on the last executed bid 

prices. Rebalancing will occur at 16:00 CST and immediately prior to a Settlement in accordance 

with Rule 603(b) at 13:00 CST. If an account’s position rises in value, ForecastEx will add funds 

to the Customer or Non-customer Collateral Account in the amount that corresponds with the 

rise in value. If an account’s position falls in value, ForecastEx will subtract funds from the 

Customer or Non-customer Collateral Account in the amount that corresponds with the drop in 

value. Funds will be moved via book entry at ForecastEx’s Settlement Bank. Rebalancing of 
ForecastEx LLC

October 25, 2023

Page 48 of 67

open Event Positions under this Rule 609(f) will never result in a Customer or Non-customer 

Collateral Account realizing a gain or loss.

(g) The collateral collected from Members to collateralize Event Positions will be considered as 

belonging to the Member, and if the collateral is in the Customer Collateral Account, the 

Customer of the Member. Collateral assigned to a Member or Customer of a Member cannot be 

used to margin, guarantee, or secure any other contracts other than the Event Positions to which 

the funds are assigned. Nothing in this Rule 609(g) shall be construed to diminish the irrevocable 

lien required by Rule 609(b).

Rule 610 - Segregation of Funds

The Clearinghouse shall separately account for and segregate from the Clearinghouse’s 

proprietary funds all Member funds used to enter Event Positions and all money accruing to such 

Members as the result of Event Positions so carried in a Collateral Account. The Clearinghouse 

shall maintain a proprietary account that will be credited with fees or other payments owed to the 

Clearinghouse that are debited from the Collateral Account as a result of Member Event 

Positions and Settlements. The Clearinghouse shall maintain a record of each Member’s account 

balances and Event Positions. The Clearinghouse shall not hold, use, or dispose of Member 

funds except as belonging to Members.

Rule 611 – Concentration limits

The Clearinghouse may apply appropriate limitations or charges on the concentration of assets 

posted as collateral, as necessary, in order to ensure its ability to liquidate such assets quickly 

with minimal adverse price effects, and may evaluate the appropriateness of any such 

concentration limits or charges, on a periodic basis. In the event that the Clearinghouse 

determines in its sole discretion that the Member’s deposit in their Collateral Account is too 

concentrated in non-cash assets, the Clearinghouse shall have the right to (1) transfer non-cash 

collateral back to a Member, and Member agrees to accept the transfer, or (2) take any other 

action the Clearinghouse deems necessary to safeguard the collateral. The Clearinghouse is 

entitled to charge fees related to holding non-cash collateral in material excess of the amount 

necessary to collateralize a Member’s Event Positions.

Rule 612 – Investment of Member Funds

(a) Member funds on deposit with the Clearinghouse will be held in a Collateral Account 

segregated as Member property.

(b) The Clearinghouse may invest such funds subject to the limitations and conditions set forth in 

CFTC Regulations 22.2(e)(1) and 1.25.

(c) The Clearinghouse may pass interest to Member’s accounts at a floating rate to be determined 

by the Clearinghouse on funds in Member’s accounts in excess of an amount to be determined by 

the Clearinghouse. 
ForecastEx LLC

October 25, 2023

Page 49 of 67

(d) The Clearinghouse will retain all profits from investment of Member funds not paid to 

Members.

Rule 613 – Default of a Member 

(a) A Member that is unable to meet its Obligations, is insolvent, or becomes the subject of a 

bankruptcy petitions, receivership proceeding, or the equivalent shall immediately notify 

ForecastEx by telephone and email of such event. Such notice shall be confirmed in writing 

promptly by the Member. The occurrence of any of the events described in this Rule 613(a) shall 

constitute an event of “default” with respect to a Member.

(b) Each Member must immediately notify ForecastEx in writing upon becoming aware:

(1) That the Member, any of the Member’s Officers or any of the Member’s Authorized Trading 

Users or Sponsored FCMs has had trading or Clearing Privileges suspended, or access to, or 

membership in any Self-Regulatory Organization denied;

(2) That the Member, any of the Member’s Officers or any of the Member’s Authorized Trading 

Users or Sponsored FCMs has been convicted of, pled guilty or no contest to, or entered a plea 

agreement to any felony in any domestic, foreign or military court, or with the CFTC, as 

applicable;

(3) That the Member, any of the Member’s Officers or any of the Member’s Authorized Trading 

Users or Sponsored FCMs has been convicted of, plead guilty or no contest to, or entered a plea 

agreement to a misdemeanor in any domestic, foreign or military court, or with the CFTC, as 

applicable, which involves:

(i) Embezzlement, theft, extortion, fraud, fraudulent conversion, forgery, counterfeiting, false 

pretenses, bribery, gambling, racketeering, or misappropriation of funds, securities or properties; 

or

(ii) Any transaction in or advice concerning swaps, futures, options on futures or securities;

(4) That the Member, any of the Member’s Officers or any of the Member’s Authorized Trading 

Users or Sponsored FCMs has been subject to, or associated with a firm that was subject to, 

regulatory proceedings before any Regulatory Agency or Self-Regulatory Organization;

(5) Of information that concerns any financial or business developments that may materially 

affect the Member’s ability to continue to comply with applicable participation requirements;

(6) Of becoming subject to early warning reporting under CFTC Regulation 1.12; or

(7) Of any failure to segregate or maintain adequate Customer funds as required by the CFTC 

and CFTC Regulations.
ForecastEx LLC

October 25, 2023

Page 50 of 67

(c) If a Member becomes subject to the conditions listed in this Rule 613(a) or 613(b), 

ForecastEx will review the Member’s continuing eligibility for Membership and may summarily 

suspend the Member according to the procedures in Rule 709.

Rule 614 - Clearinghouse Recordkeeping

(a) The Clearinghouse will provide to the CFTC the information required to be reported by 

CFTC Regulation 39.19.

(b) The Clearinghouse will publish a list of active Members on the ForecastEx website.

Rule 615 - KYC and AML.

(a) Members must provide the Clearinghouse with information related to know your Customer or 

anti-money laundering as the Clearinghouse may from time-to-time require, consistent with 

Applicable Law and consistent with the implementing regulations of the Bank Secrecy Act.

(b) Members consent to the Clearinghouse providing information related to know your Customer 

or anti-money laundering to Settlement Banks or potential Settlement Banks, consistent with 

Applicable Law and consistent with the implementing regulations of the Bank Secrecy Act.

Rule 616 – Clearing Fund Contributions

(a) The Clearinghouse shall maintain a Clearing Fund to which each Member shall contribute to 

make good certain losses suffered by the Clearinghouse. The size of the Clearing Fund shall at 

all times be subject to minimum size of at least $1,000,000 per Member.

(b) The Clearinghouse shall have the authority to increase the size of the Clearing Fund at any 

time for the protection of the Clearinghouse, Members or the general public. Any such 

determination to implement an increase in Clearing Fund size, temporary or otherwise, would (i) 

be based upon then-existing facts and circumstances, (ii) be in furtherance of the integrity of the 

Clearinghouse and the stability of the financial system, and (iii) take into consideration the 

legitimate interests of Members and Market Participants. Any temporary increase in the Clearing 

Fund shall be determined by the Clearing Committee.

(c) Contributions to the Clearing Fund shall be in cash or in U.S. government securities. For 

purposes of valuing U.S. government securities for calculating contributions to the Clearing 

Fund, U.S. government securities shall be valued at (1) 99.5% of the current market value for 

maturities less than one year; (2) 98% of the current market value for maturities between one and 

five years; (3) 96.5% of the current market value for maturities between five and ten years; and 

(4) 95% of the current market value for maturities in excess of ten years. For the purposes of this 

Rule 616, the current market value of U.S. government securities shall be determined by the 

Clearinghouse at such intervals as the Clearing Committee shall from time to time prescribe, but 

not less often than monthly, on the basis of the quoted Bid price therefor supplied by a source 

designated by the Clearinghouse.
ForecastEx LLC

October 25, 2023

Page 51 of 67

(d) Any interest or gain received or accrued on U.S. government securities included within a 

Clearing Fund contribution shall belong to the contributing Member. Cash contributions to the 

Clearing Fund may from time to time be partially or wholly invested by the Clearinghouse for its 

account in U.S. government securities and any interest earned on such investments will accrue to 

the benefit of the Clearinghouse.

(e) Contributions of U.S. government securities shall be deposited by the Member in an account 

of the Clearinghouse in an approved custodian in the name of ForecastEx or by such other 

method as the Clearinghouse may from time to time approve.

(f) The Clearinghouse may set a minimum cash requirement for the Clearing Fund based on 

analysis of the Clearinghouse’s projected liquidity demands and may require a two-day 

notification period for any Member requesting to substitute U.S. government securities for cash 

deposits.

(g) If the contribution to the Clearing Fund to be made by a Member is increased as a result of an 

amendment to the ForecastEx Rules, the increase shall not become effective until the Member is 

given two ForecastEx Business Days prior written notice of the amendment. Unless a Member 

notifies the Clearinghouse in writing that it wishes to terminate its membership and closes out or 

transfers all of its open positions before the effective date of such amendment, such Member 

shall be liable to make the increased contribution by 9:00 CST on the second ForecastEx 

Business Day following the day on which notice is provided by the Clearinghouse.

(h) If the Member’s Clearing Fund contribution is less than the amount required due to an 

increased minimum cash requirement or decline in value of U.S. government securities, the 

Clearinghouse may instruct the Member to transfer funds to the Clearing Fund to satisfy the 

deficiency. Members shall be liable to satisfy the deficiency by 9:00 CST on the ForecastEx 

Business Day following the day on which notice of the deficiency is provided by the 

Clearinghouse.

Rule 617 - Clearing Fund Purpose and Use

(a) Conditions for Clearing Fund use are as follows:

(1) In the event that a Member is suspended by Clearinghouse pursuant to Rule 709 and the 

Clearinghouse suffers a loss as a result of Member liquidation such loss will be chargeable 

against the Clearing Fund in accordance with Rule 617(b).

(2) As the result of the failure of any Member to make any other required payment or render any 

other required performance, including those specified in Rule 308.

(3) As a result of the failure of any bank or investment counterparty to perform its obligations to 

the Clearinghouse when due because of its bankruptcy, insolvency, receivership, suspension of 

operations or any similar event, and the Clearinghouse sustains a loss, the Clearinghouse may, in 

its discretion, reimburse itself for such loss out of the Clearing Fund and charge the loss to the 
ForecastEx LLC

October 25, 2023

Page 52 of 67

Clearing Fund. The amount of any such loss shall be charged proportionately against all 

Members’ required contributions to the Clearing Fund as calculated at the time.

(4) At the discretion of the Chairman or CEO, the Clearing Fund may be used for borrowings or 

pledged as security for loans to meet obligations, losses or liquidity needs, or to make good 

losses or expenses suffered by the Clearinghouse resulting from borrowings if:

(i) The Clearinghouse deems it necessary or advisable to borrow or otherwise obtain funds in 

order to meet Obligations arising out of the default or suspension, or in anticipation of the 

potential default or suspension, of a Member or any action taken by the Clearinghouse to address 

such an actual or potential default or suspension;

(ii) The Clearinghouse sustains a loss reimbursable out of the Clearing Fund pursuant to bank or 

investment counterparty failure but elects to borrow or otherwise obtain funds in lieu of 

immediately charging such loss to the Clearing Fund; or

(iii) The Clearinghouse reasonably believes it necessary to borrow to meet its liquidity needs for 

daily Settlement as a result of the failure of any bank or investment counterparty to perform any 

Obligation to the Clearinghouse when due.

Funds obtained by such borrowing shall not be deemed to be charges against the Clearing Fund 

for a period not to exceed 60 days and shall not affect the amount or timing of any charges 

otherwise required to be made against the fund. Any borrowings outstanding on the first 

Business Day after the initial 60-day borrowing period, shall be charged proportionately against 

all Members’ required contributions to the Clearing Fund as calculated at the time. In the event 

the Clearinghouse suffers a loss or expenses as a result of such borrowing, The Clearinghouse 

may, at its option, elect to charge the loss proportionately against all Members’ required 

contributions to the Clearing Fund as calculated at the time.

(b) If a Member fails to pay any Settlement amount to the Clearinghouse when due, the 

Clearinghouse shall liquidate all non-cash deposits in the Collateral Account as needed and shall 

apply the proceeds thereof to reduce the deficit. If any portion of the Settlement amount remains 

unsatisfied after application of Collateral Account deposits, the Clearinghouse shall seek to 

satisfy the remaining deficit as follows: (i) first, apply the defaulting Member’s Clearing Fund 

contribution; and (ii) second, in the event the Clearinghouse decides not to satisfy the remaining 

deficit with its own assets, make a pro rata charge against the Clearing Fund contributions of 

other Members in accordance with the Rules. Such pro rata charge shall be determined without 

reference to the possibility of any subsequent recovery in respect thereof, through insolvency 

proceedings or otherwise.

(c) If a loss charged proportionately against the contributions of Members is afterward recovered 

by the Clearinghouse, in whole or in part, the net amount of such recovery shall be paid to the 

Members against whose contributions the loss was charged in proportion to the amounts charged 

against their respective contributions, whether or not they are still Members.
ForecastEx LLC

October 25, 2023

Page 53 of 67

(d) Any unused portion of a defaulting Member’s Clearing Fund contribution shall be returned to 

that Member or held for distribution to the persons entitled thereto under Applicable Law, as 

appropriate, at such time as the Clearinghouse has determined that it has been fully reimbursed 

for losses and expenses.

(e) Whenever an amount is paid out of the Clearing Fund contribution of a Member, whether by 

proportionate charge or otherwise, such Member shall be liable to promptly make good the 

deficiency in its required contribution resulting from such payment by replenishment of the 

Clearing Fund by 9:00 CST on the first ForecastEx Business Day following the day on which the 

Clearinghouse notifies the Member of such deficiency.

(f) Clearing Fund contributions shall be returned to a non-defaulting Member upon termination 

of its membership, but not until all confirmed trades and open positions have been closed or 

transferred and any amounts chargeable its Clearing Fund contribution pursuant to this Rule 617 

and unpaid fees fulfilled.

Chapter 7 – Discipline and Enforcement

Chapter 7 pertains to both the Clearinghouse and Exchange.

Rule 701 – Monitoring the Market

(a) Data Retention. ForecastEx will record and store for a period of not less than five years in a 

searchable, read-only database a record of all data entered into ForecastEx, including the Market 

Participant identities, any Bids entered or Event Positions entered into, and Large Trader Reports 

collected by ForecastEx. These records will be maintained in a manner so that they can be 

readily accessed during the first two years.

(b) Compliance Responsibilities. The Compliance Department will:

(1) Conduct market surveillance using the data collected per this Rule 701(a) with programs and 

procedures designed to alert the Exchange when potentially unusual market activity occurs.

(2) Initiate reviews and when appropriate, commence investigations of unusual market activity or 

other activity that the Compliance Department has cause to believe could constitute a violation of 

ForecastEx Rules.

(c) No Director, Officer, or Employee of ForecastEx will interfere or attempt to interfere with the 

process or resolution of any inquiry, investigation, disciplinary proceeding, appeal from a 

disciplinary proceeding, summary imposition of fines, summary suspension, or other summary 

action.

(d) Market Participants have the right to be represented by counsel during any inquiry, 

investigation, disciplinary proceeding, appeal from a disciplinary proceeding, summary 

imposition of fines, summary suspension, or other summary actions. The Market Participant’s 
ForecastEx LLC

October 25, 2023

Page 54 of 67

counsel may not be a Director, Officer, or employee of ForecastEx, a member of a ForecastEx 

disciplinary panel, or any Person substantially related to the underlying investigation, such as a 

material witness or respondent.

Rule 702 – Investigations

(a) The Compliance Department will investigate any matter within ForecastEx’s jurisdiction that 

it has reasonable cause to believe could constitute a violation of ForecastEx Rules. The 

Compliance Department will determine the nature and scope of its inquiries and investigations 

within its sole discretion and will function independently of any commercial interests of 

ForecastEx. The Compliance Department will also open investigations at the request of the 

CFTC.

(b) The Compliance Department will maintain a log of all investigations commenced and their 

disposition. The Compliance Department will prepare a written report of each investigation 

regardless of their disposition. Each written report will include the reason for initiating the 

investigation and the recommendation of the Compliance Department which can include:

(1) Closing the investigation without further action;

(2) Resolving the investigation through an informal disposition, including the issuing of a 

warning letter;

(3) Summary action; or

(4) Initiating disciplinary proceedings.

(c) The Compliance Department will endeavor to complete any investigations within 12 months 

from the time they were initiated unless there are extenuating circumstances.

(d) Upon the completion of an investigation, the CRO will promptly review the completed 

investigation report to determine whether a reasonable basis exists to believe that a violation of 

ForecastEx Rules has occurred or is about to occur. The CRO will determine if any further action 

is necessary.

(e) Each Market Participant is obligated to appear, testify, or respond in writing to any inquiries 

sent by the Compliance Department. Each Market Participant is obligated to produce books, 

records, papers, documents, or other tangible evidence in their possession, custody, or control. 

Market participants shall respond to the Compliance Department within the time period and in 

the manner required by the Compliance Department.

(f) If the Compliance Department initiates an investigation in which any Affiliate of ForecastEx 

is a subject, the CRO shall notify the CFTC Division of Market Oversight of that fact. At the 

conclusion of any such investigation, the CRO shall provide the CFTC Division of Market 

Oversight with a copy of the documentation specified in paragraph (b) of this Rule.
ForecastEx LLC

October 25, 2023

Page 55 of 67

Rule 703 – Notice of Charges

(a) If the CRO authorizes initiating disciplinary proceedings at the conclusion of an 

investigation, the Compliance Department will prepare and serve a notice of charges to the 

Market Participant(s) that the Compliance Department believes has violated ForecastEx Rules 

(the “Respondent”).

(b) A notice of charges will include:

(1) The reason the investigation was initiated;

(2) The charges or a summary of the charges, including the rule or rules alleged to have been 

violated;

(3) The proposed sanctions;

(4) An advisement that the Respondent has a right to a hearing;

(5) The period of time within which the Respondent can request a hearing on the notice of 

charges, which will not be less than 15 Business Days after the notice of charges is served;

(6) An advisement that the 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

(7) An advisement that any allegation in the notice of charges that is not expressly denied will be 

deemed to be admitted.

(c) If the Respondent determines to answer a notice of charges, the Respondent must file an 

answer within 15 Business Days of being served the notice of charges or such other time period 

as the Compliance Department listed in the notice of charges.

(d) 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 deny or 

admit;

(3) Specify any facts that contradict the notice of charges;

(4) Specify any affirmative defenses to the notice of charges; and

(5) Sign and serve the answer to the Compliance Department.

(e) 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 the notice and will constitute a waiver of the 
ForecastEx LLC

October 25, 2023

Page 56 of 67

right to a hearing or appeal. Any failure to answer one or more allegations will be deemed an 

admission to those allegations.

(f) Service. Any notice of charges will be considered served when delivered by electronic mail to 

the Respondent at the email address that appears on the books and records of ForecastEx. Any 

answer to a notice of charges will be considered served when delivered by electronic mail to the 

Compliance Department in the form and manner described in the notice of charges.

Rule 704 – Offers of Settlement

(a) A Respondent may at any time propose in writing an offer of settlement to anticipated or 

instituted disciplinary proceedings. Any offer of settlement shall include proposed findings and 

sanctions and be submitted to the Compliance Department. The Respondent may propose 

settlement that does not deny or admit the charges against it, but must accept ForecastEx’s 

jurisdiction.

(b) The CRO will review the offer of settlement and make a recommendation to the ROC 

whether to accept or reject the offer of settlement. The ROC will make a final determination 

whether to accept or reject the offer.

(c) If the offer of settlement is accepted, the Compliance Department will serve an order of the 

disciplinary proceedings consistent with the offer of settlement to the Respondent. This order 

will become final after 15 Business Days. The finalization of a settlement is deemed to constitute 

a waiver of the right to notice, opportunity for a hearing, review and appeal.

(d) If the offer of settlement is rejected, or withdrawn prior to becoming final, the disciplinary 

proceeding will continue as if the offer was not made. An offer of settlement cannot be used as 

evidence or as an admission of guilt in a disciplinary hearing or an appeal.

Rule 705 – Disciplinary Hearings

(a) A Disciplinary Panel will conduct hearings in connection with any disciplinary proceedings.

(1) A separate Disciplinary Panel will be established for each disciplinary proceeding requiring a 

hearing.

(2) Disciplinary Panels must meet the composition requirements of CFTC Regulation 38.702 and 

must not include any members of the Compliance Department or any person involved in 

adjudicating any other stage of the same proceedings.

(3) A Respondent may seek to disqualify any individual named to a Disciplinary Panel by 

serving written notice of the Compliance Department within 10 Business Days of being notified 

of the appointment of the Disciplinary Panel. The CRO will in their sole discretion decides the 

merits of any such request. The CRO’s decision is not subject to appeal.
ForecastEx LLC

October 25, 2023

Page 57 of 67

(b) The Respondent has a right to examine all relevant books, documents, or other evidence in 

the possession of the Compliance Department, except that ForecastEx may withhold from 

inspection any documents that:

(1) Are privileged or that constitute attorney work product;

(2) Were prepared by any employee of ForecastEx but will not be offered in evidence in the 

disciplinary proceedings;

(3) May disclose a technique or guideline used in examinations, investigations, or enforcement 

proceedings; or

(4) Disclose the identity of a confidential source.

(c) All disciplinary proceedings will be conducted at a hearing before the Disciplinary Panel. 

Hearings will be held privately and confidentially.

(1) The Disciplinary Panel may appoint an expert to attend hearings and assist in deliberations if 

the expert is subject to appropriate confidentiality.

(2) The Disciplinary Panel will convene a hearing after reasonable notice to each Respondent.

(3) The Chairman of the Disciplinary Panel will determine all procedural and evidentiary 

matters, including the admissibility and relevance of any evidence proffered. The Disciplinary 

Panel is not bound by evidentiary or procedural rules of law.

(4) Except for procedural and evidentiary matters, the entire Disciplinary Panel must be present, 

either in Person or via electronic means, for the entire hearing and related deliberations.

(d) At a hearing conducted by a Disciplinary Panel, the Compliance Department will present its 

case supporting the proposed allegations and sanctions. The Respondent is entitled to attend and 

participate in the hearing.

(1) The Compliance Department and each Respondent may: present evidence and facts 

determined relevant by the Chairman of the Disciplinary Panel, call and examine witnesses, and 

cross-examine witnesses called by other parties.

(2) Any Person entitled, required, or called upon to attend a hearing before a Disciplinary Panel 

will be given reasonable notice, confirmed in writing, specifying the date, time, and place of the 

hearing, and the caption of the Disciplinary Proceedings. Any Market Participant called as a 

witness is required to appear and produce evidence.

(3) If during a hearing, the Disciplinary Panel determines that the Respondent violated, or may 

have violated a ForecastEx Rule not contained in the notice of charges, the Disciplinary Panel 

may consider those violations after providing the Respondent with an opportunity to answer the 

additional allegations in accordance with Rule 703.
ForecastEx LLC

October 25, 2023

Page 58 of 67

(4) The Disciplinary Panel may summarily impose sanctions on any Market Participant which 

impedes or delays the progress of a hearing.

(5) ForecastEx will arrange for the proceedings of a hearing to be recorded verbatim, or 

substantively verbatim. The Respondent may request a transcript of the proceedings if they agree 

to pay the costs for transcribing the recording.

(e) The Disciplinary Panel will issue an order rendering its decisions as promptly as reasonable 

following a hearing. A decision by a majority of the Disciplinary Panel will constitute the 

decision of the Disciplinary Panel. The Compliance Department will serve a copy of the order to 

the Respondent, which will include:

(1) The notice of charges and the Respondent’s answer;

(2) Summary of the evidence introduced at the hearing;

(3) Findings of fact and conclusions with respect to each charge;

(4) The imposition of any sanctions, and effective date of each sanction; and

(5) Notice of the Respondent’s right to appeal within 15 Business Days.

(f) If the Respondent does not appeal within 15 Business Days of being served the order of the 

Disciplinary Panel, the order will become final.

Rule 706 – Sanctions

After notice and opportunity for hearing in accordance with ForecastEx Rules, ForecastEx will 

impose sanctions on any Market Participant found to have violated ForecastEx Rules or 

Applicable Law for which ForecastEx possesses disciplinary jurisdiction. ForecastEx may 

impose any of the following sanctions:

(a) Issue a warning letter. No more than one warning letter may be issued to the same Market 

Participant for the same rule violation within a rolling-12 month period;

(b) Monetary Fines. Any fine imposed by ForecastEx must be for an amount that is necessary to 

deter recidivism. If a fine is not paid within 30 days, then interest will accrue on the sum of the 

fine from the date it is payable at the quoted prime rate plus three percentage points;

(c) Disgorgement of profits that resulted from the rule violation and/or restitution of damages to 

any unoffending counterparties;

(d) Limitation, temporary suspension, or permanent termination of Access Privileges for any 

Market Participants; or

(e) Any other sanction or remedy deemed to be appropriate.
ForecastEx LLC

October 25, 2023

Page 59 of 67

Rule 707 – Appeal

(a) If a Respondent exercises their right to appeal, they must file a notice of appeal which states 

the grounds for appeal, including the finding of fact, conclusion, or sanction to which the 

Respondent objects. Any restriction of Access Privileges or Clearing Privileges imposed by the 

Disciplinary Panel will remain in effect during the appeal process. Other penalties will be 

delayed until the Appeals Panel makes its formal decision.

(b) Upon notice of appeal, the ROC will appoint an Appeals Panel formed from among the 

Board of Directors, including at least one Public Director who will act as Chairman.

(c) Within 15 Business Days of filing a notice of appeal, the Respondent must file a brief 

supporting the notice of appeal. 15 Business Days after the Respondent’s supporting brief, the 

Compliance Department will serve its brief in opposition. 10 Business Days after the brief in 

opposition, the Respondent may file a brief in reply. These timelines may be extended at the 

request of the Respondent or the Compliance Department and with the consent of the Appeals 

Committee.

(d) The Appeals Panel will consider the submitted briefs, and if necessary, hold a hearing where 

the parties may present oral arguments. Any hearing will be conducted privately and 

confidentially. The Appeals Panel is not bound by evidentiary or procedural rules of law.

(e) The Appeals Panel may affirm, modify, or reverse any order of the Disciplinary Panel or any 

summary action under appeal, in whole or in part. The Appeals Panel may also order a new 

hearing if the Appeals Panel determines it appropriate.

(f) The Appeals Panel will issue a written order rendering its decision for the matter on appeal. 

The written order will be the final action of ForecastEx and not subject to further appeal.

(g) The filing of an appeal pursuant to this Rule 707 shall not impair the validity or stay the 

effect of a suspension or other restriction on access to ForecastEx. The reversal of a suspension 

shall not invalidate any acts of ForecastEx taken prior to such reversal, and the rights of any 

Person which may arise out of any such acts shall not be affected by the reversal of such 

suspension.

Rule 708 – Summary Fines

(a) The CRO may summarily impose a fine against a Market Participant for failing:

(1) To keep books and records required by Rule 501;

(2) To submit accurate Large Trader Reports;

(3) To make timely submissions of ownership and control information;
ForecastEx LLC

October 25, 2023

Page 60 of 67

(4) To keep accurate audit trail data;

(5) To respond to an inquiry sent in accordance with Rule 702 in a timely manner;

(6) To satisfy Settlement or other payment due to the Clearinghouse in a timely manner;

(7) To respond in a timely fashion to a Compliance Department inquiry;

(8) To provide requested information about a position subject to position accountability; or

(9) To comply with a ForecastEx request in accordance with Rule 408(c).

(b) The Compliance Department will serve a notice of the summary fine to the Market 

Participant. The Market Participant has 15 Business Days in which to either pay the fine or file 

notice of an appeal. Appeals to a summary fine will be held in accordance with Rule 707.

(c) If the Compliance Department issues more than 1 summary fine to the same Market 

Participant for the same offense within a 12-month rolling period, the second fine will be no less 

than twice the penalty of the first offense. If the Market Participant commits a third offense of 

the same type within a rolling 12-month period, the Compliance Department will initiate 

disciplinary proceedings.

(d) The first violation of a ForecastEx rule that may trigger a summary fine within a 12-month 

rolling period may be a warning letter in accordance with Rule 706.

(d) The ability to issue a summary fine for a rule violation does not preclude the CRO from 

instead choosing to initiate disciplinary proceedings.

Rule 709 – Summary Suspension

(a) The CRO, or the CRO’s designee, may summarily suspend a Market Participant, after 

consultation with the ROC. If the Market Participant is a Member, and the suspension is based 

on Rule 709(b)(5) or Rule 709(b)(6), the CRO will consult with the Clearing Committee prior to 

issuing the suspension.

(b) Suspension may be made based on the following conditions.

(1) The Market Participant has been expelled or suspended from any Self-Regulatory 

Organization or has become statutorily disqualified from registration;

(2) The Member has failed to make any delivery of cash, collateral, or other property to the 

Clearinghouse in a timely manner as required by the Rules;

(3) The Market Participant has failed to pay fees, costs, charges, fines, or arbitration award in a 

timely manner;
ForecastEx LLC

October 25, 2023

Page 61 of 67

(4) The Market Participant is in such financial or operating difficulty that ForecastEx determines 

that suspension is necessary to protect the market, ForecastEx, the public, or other Market 

Participants;

(5) The CRO determines that the Market Participant is engaging in, or is about to engage in 

manipulative activity that would disrupt the ForecastEx market;

(6) The Member has notified ForecastEx of a circumstance listed in Rule 613(a); or

(7) The Member has notified ForecastEx of a circumstance listed in Rule 613(b) and in the 

determination of the Clearinghouse and the Clearing Committee that circumstance materially 

impedes the ability of the Market Participant to fulfill its Obligations or the Market Participant 

presents undue risk to ForecastEx.

(c) In the Event that a Member is suspended, ForecastEx shall cease to act for it except as is 

specified in this Rule 709(c). ForecastEx will as soon as possible notify all Market Participants 

of the suspension. Such notice shall state in general terms, how pending transactions, open 

positions, and other pending matters will be affected and what steps are to be taken in connection 

therewith.

(d) The Compliance Department shall provide a written notice to the Market Participant whose 

Access Privileges are to be summarily suspended. This notice will state the actions to be taken, 

the reasons for the action, the time the action becomes effective, the duration of the action, and 

notify the Market Participant of their right to appeal within 15 days after the notice has been 

served. If possible, the notice shall be served prior to the suspension becoming effective.

(e) An appeal of a summary suspension will not be considered if the Respondent who is subject 

to summary suspension owes any fines, fees, charges, or costs to ForecastEx, or who is impeding 

the progress of disciplinary proceedings.

(f) Appeals to summary suspensions will be held in accordance with Rule 707.

Rule 710 – Reporting Violations

(a) Whenever ForecastEx suspends, expels, fines or otherwise disciplines or denies any Person 

access to the ForecastEx System, ForecastEx will make the disclosures required by CFTC 

Regulations.

(b) The Exchange will submit to the Commission a schedule listing all those Company Rule 

violations which constitute disciplinary offenses as defined in paragraph (a)(6)(i) of CFTC 

Regulation 1.63 and, to the extent necessary to reflect revisions, will submit an amended 

schedule within thirty days of the end of each calendar year. The Exchange will maintain the 

schedule required by this section and post the schedule on the ForecastEx website.

(c) Whenever the Exchange finds by final decision that a Market Participant has violated a Rule 

or otherwise committed a disciplinary offense and such finding makes such Person ineligible to 
ForecastEx LLC

October 25, 2023

Page 62 of 67

serve on Forecast’s Disciplinary Panels, ForecastEx committees, or the Board, the Exchange 

shall inform the Commission of such finding and the length of the ineligibility in a notice it is 

required to provide to the Commission pursuant to either CEA Section 17(h)(1) or CFTC 

Regulation 9.11.

Chapter 8 - Arbitration

Chapter 8 pertains to both the Clearinghouse and Exchange.

Rule 801 – Matters Subject to Arbitration

(a) Any dispute, controversy, or claim (including related counterclaims) brought against 

ForecastEx by any Market Participant shall be settled by arbitration.

(b) If so elected by a Member, any claim by the Member against another Member (including any 

related counterclaims) that relate to or arise out of any transaction on or subject to ForecastEx’s 

jurisdiction, shall be settled by arbitration.

(c) If so elected by a Customer, any claim by the Customer against a Market Participant 

(including any related counterclaims) that relate to or arise out of any transaction on or subject to 

ForecastEx’s jurisdiction, shall be settled by arbitration.

(d) If a party to a dispute to be settled by arbitration challenges the appropriateness of submitting 

a matter arbitration, the CEO or their designee shall make a determination of whether the matter 

is appropriate for arbitration. The CEO’s decision may be appealed to the Board at the request of 

a party to the dispute. The Board’s decision is final.

(e) The use of arbitration procedures shall be voluntary for Market Participants other than 

eligible contract participants as defined in section 1(a)(18) of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act, and may permit counterclaims as provided in CFTC 

Regulation 166.5.

Rule 802 – Rules of Arbitration

ForecastEx will conduct arbitration in accordance with NFA rules.

(a) If all parties to a dispute are NFA Members, the arbitration will be conducted in accordance 

with and subject to NFA’s Member Arbitration Rules as in effect from time to time. These rules 

are incorporated by reference into this Chapter 8.
ForecastEx LLC

October 25, 2023

Page 63 of 67

(b) If all parties to a dispute are not NFA Members, the arbitration will be conducted in 

accordance with and subject to NFA’s Code of Arbitration as in effect from time to time. This 

code is incorporated by reference into this Chapter 8.

Rule 803 – Failure to Honor Arbitration

Any Market Participant who fails to honor an arbitral award or settlement rendered under this 

Chapter 8 will be subject to disciplinary proceedings in accordance with Chapter 7.

Chapter 9 – Governing Law

Chapter 9 pertains to both the Clearinghouse and Exchange.

Rule 901 – Property Rights

(a) Each Market Participant hereby acknowledges and agrees that ForecastEx owns and shall 

retain all right, title and interest in and to ForecastEx, all components thereof, including, without 

limitation, all related applications, all application programming interfaces, user interface designs, 

software and source code and any and all intellectual property rights therein, including, without 

limitation, all registered or unregistered, as applicable, copyright, trademark, service mark, trade 

secret, trade name, data or database rights, design rights, moral rights, inventions, whether or not 

capable of protection by patent or registration, rights in commercial information or technical 

information, including know-how, research and development data and manufacturing methods, 

patent, and other intellectual property and ownership rights, including applications for the grant 

of any of the same, in or to ForecastEx and all other related proprietary rights of ForecastEx 

and/or any of its Affiliates (together, with any and all enhancements, corrections, bug fixes, 

updates and other modifications to any of the foregoing and any and all data or information of 

any kind, other than Proprietary Data and Personal Information, transmitted by means of any of 

the foregoing, including, without limitation, market data, the “Proprietary Information”). Each 

Market Participant further acknowledges and agrees that the Proprietary Information is the 

exclusive, valuable and confidential property of ForecastEx. Each Market Participant 

acknowledges and agrees that it shall not reverse engineer, copy, bug fix, correct, update, 

transfer, reproduce, republish, broadcast, create derivative works based on or otherwise modify, 

in any manner, all or any part of ForecastEx or the Proprietary Information. Each Market 

Participant further agrees to keep the Proprietary Information confidential and not to transfer, 

rent, lease, copy, loan, sell or distribute, directly or indirectly, all or any portion of ForecastEx or 

any Proprietary Information.

(b) Subject to the provisions of this Rule 901, each Market Participant hereby acknowledges and 

agrees that ForecastEx is the owner of all rights, title and interest in and to all intellectual 

property and other proprietary rights (including all copyright, patent, trademark or trade secret 

rights) in market data, and all derivative works based thereon, and further agree not to distribute, 

create derivative works based on, or otherwise use or commercially exploit market data and any 

such derivative works, provided that Market Participants may use market data for their own 
ForecastEx LLC

October 25, 2023

Page 64 of 67

internal business purposes. Without limiting the generality of the foregoing, Market Participants 

may not distribute, sell or retransmit market data exchange to any third party.

(c) Notwithstanding any other provision of this Rule 901, each Market Participant retains such 

rights as it may enjoy under Applicable Law with respect to market data solely in the form such 

market data was submitted to ForecastEx by such Market Participant.

(d) Transaction data shall not be disclosed publicly other than on an aggregated or anonymous 

basis, or in a manner that does not directly or indirectly identify any Market Participant who has 

submitted such data.

(e) ForecastEx shall not condition access to ForecastEx upon a Market Participant’s consent to 

the use of Proprietary Data and Personal Information for business or marketing purposes. 

Proprietary Data and Personal Information may not be used by ForecastEx for business and 

marketing purposes unless the Market Participant has clearly consented to the use of Proprietary 

Data and Personal Information in such manner. ForecastEx, where necessary, for regulatory 

purposes, may share Proprietary Data and Personal Information with one or more Designated 

Contract Markets or Derivative Clearing Organizations. Nothing in this Rule shall preclude 

ForecastEx from disclosing Proprietary Data and Personal Information:

(1) As required by Applicable Law or legal process;

(2) As ForecastEx may deem necessary or appropriate in connection with any litigation affecting 

ForecastEx;

(3) To any ForecastEx Representative authorized to receive such information within the scope of 

his or her duties;

(4) To a third party performing regulatory or operational services for ForecastEx, provided that 

such party has executed a confidentiality and non-disclosure agreement in a form approved by 

ForecastEx;

(5) To a duly Authorized Representative of the CFTC lawfully requesting Proprietary Data and 

Personal Information;

(6) In a manner in which a Market Participant consents to such disclosure;

(7) Pursuant to the terms of an information-sharing agreement; or

(8) As permitted by CFTC Regulations.

Rule 902 – Signatures

Rather than rely on an original signature, ForecastEx may elect to rely on a signature that is 

transmitted, recorded or stored by any electronic, optical, or similar means (including but not 

limited to telecopy, imaging, photocopying, electronic mail, electronic data interchange, 
ForecastEx LLC

October 25, 2023

Page 65 of 67

telegram, or telex) as if it were (and the signature shall be considered and have the same effect 

as) a valid and binding original.

Rule 903 – Governing Law

The Rules, and the rights and Obligations of ForecastEx and Market Participants under the 

Rules, shall be governed by, and construed in accordance with, the laws of the State of Delaware 

without regard to any provisions of Delaware law that would apply the substantive law of a 

different jurisdiction. The State of Delaware is the “securities intermediary’s jurisdiction” within 

the meaning of Section 8-110(e) of the UCC for all purposes of the UCC.

Rule 904 – Legal Proceedings

(a) Any action, suit, or proceeding against ForecastEx, its Officers, Directors, LLC members, 

employees, agents, or any member of any committee will be handled by arbitration, if arbitration 

is not barred by CFTC Regulations or Applicable Law.

(b) Any action, suit or proceeding against ForecastEx, its Officers, Directors, limited liability 

company members, employees, agents, or any member of any committee must be brought within 

one year from the time that a cause of action has accrued. Any such action, suit or proceeding 

shall be brought in the State or Federal courts located within Illinois. Each Market Participant 

expressly consents to the jurisdiction of any such court, waives any objection to venue therein, 

and waives any right it may have to a trial by jury.

(c) In the event that a Market Participant or an Affiliate of such Person who fails to prevail in a 

lawsuit or other legal proceeding instituted by such Market Participant or such Affiliate against 

(i) ForecastEx or (ii) any Affiliate of ForecastEx or any of its respective Officers, Directors, 

equity holders, employees, agents, or any member of any committee, and related to the business 

of ForecastEx, such Market Participant shall pay to ForecastEx all reasonable costs and 

expenses, including attorneys’ fees, incurred by ForecastEx in the defense of such proceeding. 

This Rule 904 shall not apply to ForecastEx disciplinary actions, appeals thereof, or an instance 

in which the Board has granted a waiver of the provisions hereof.

(d) ForecastEx will provide to the CFTC copies of documents pertaining to Exchange-related 

pending legal proceedings as required under CFTC Regulation 1.60.

Rule 905 – Limitation of Liability

(a) EXCEPT AS PROVIDED BELOW, NONE OF FORECASTEX, IBG, OR THEIR 

RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, CONSULTANTS, 

LICENSORS, VENDORS, OWNERS, AND MEMBERS SHALL BE LIABLE TO ANY 

PERSON FOR ANY LOSSES, DAMAGES, COSTS, OR EXPENSES (INCLUDING LOSS OF 

PROFITS, LOSS OF USE, AND DIRECT, INDIRECT, INCIDENTAL, OR 

CONSEQUENTIAL DAMAGES), ARISING FROM:
ForecastEx LLC

October 25, 2023

Page 66 of 67

(1) ANY FAILURE, MALFUNCTION, FAULT IN DELIVERY, DELAY, OMISSION, 

SUSPENSION, INACCURACY, INTERRUPTION, TERMINATION, OR ANY OTHER 

CAUSE, IN CONNECTION WITH THE FURNISHING, PERFORMANCE, OPERATION, 

MAINTENANCE, USE OF OR INABILITY TO USE ALL OR ANY PART OF ANY OF THE 

FORECASTEX SYSTEM, OR ANY EXCHANGE OR CLEARINGHOUSE SERVICES, 

EQUIPMENT, OR FACILITIES USED TO SUPPORT SUCH SYSTEMS AND SERVICES;

(2) WITHOUT LIMITING THE GENERALITY OF CLAUSE (1) ABOVE, ANY FAILURE 

OR MALFUNCTION, FAULT IN DELIVERY, DELAY, OMISSION, SUSPENSION, 

INACCURACY, INTERRUPTION OR TERMINATION OF THE FORECASTEX SYSTEM, 

ANY EXCHANGE OR CLEARINGHOUSE SERVICE OR FACILITY CAUSED BY ANY 

THIRD PARTY, INCLUDING INDEPENDENT SOFTWARE VENDORS AND NETWORK 

PROVIDERS;

(3) ANY ERRORS OR INACCURACIES IN INFORMATION PROVIDED BY 

FORECASTEX, THE FORECASTEX SYSTEM, OR ANY EXCHANGE OR 

CLEARINGHOUSE SERVICE OR FACILITY;

(4) ANY UNAUTHORIZED ACCESS TO OR UNAUTHORIZED USE OF THE 

FORECASTEX SYSTEM, OR ANY EXCHANGE OR CLEARINGHOUSE SERVICE OR 

FACILITY BY ANY PERSON; OR

(5) ANY ACTION TAKEN OR OMITTED TO BE TAKEN IN RESPECT OF THE BUSINESS 

OF FORECASTEX.

THE FOREGOING LIMITATION OF LIABILITY SHALL APPLY IRRESPECTIVE OF 

WETHER A CLAIM ARISES IN CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY, 

CONTRIBUTION OR OTHERWISE AND WHETHER A CLAIM IS BROUGHT DIRECTLY 

OR AS A THIRD-PARTY CLAIM. THE FOREGOING LIMITATION OF LIABILITY 

SHALL BE SUBJECT TO THE CEA AND CFTC REGULATIONS. NOTWITHSTANDING 

ANYTHING IN THIS PARAGRAPH (a) TO THE CONTRARY, A PARTY WHO HAS BEEN 

FINALLY ADJUDICATED TO HAVE ENGAGED IN WILLFUL OR WANTON 

MISCONDUCT MAY NOT AVAIL ITSELF OF THE PROTECTIONS AFFORDED 

HEREBY.

(b) THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS BY 

ANY OF THE FORECASTEX, IBG, OR THEIR RESPECTIVE DIRECTORS, OFFICERS, 

EMPLOYEES AGENTS, CONSULTANTS, LICENSORS, VENDORS, OWNERS, OR 

MEMBERS RELATING TO THE FORECASTEX SYSTEM, OR ANY EXCHANGE OR 

CLEARINGHOUSE SERVICES, EQUIPMENT OR FACILITIES USED TO SUPPORT SUCH 

SYSTEM OR SERVICES, INCLUDING WARRANTIES OF MERCHANT ABILITY OR 

WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR USE.

(c) ANY DISPUTE ARISING OUT OF THE USE OF THE FORECASTEX SYSTEM, OR 

ANY EXCHANGE OR CLEARINGHOUSE SERVICES, EQUIPTMENT, OR FACILITIES 

USED TO SUPPORT SUCH SYSTEM OR SERVICES, IN WHICH ANY OF FORECASTEX, 
ForecastEx LLC

October 25, 2023

Page 67 of 67

IBG, OR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, 

CONSULTANTS, LICENSORS, VENDORS, OWNERS, OR MEMBERS IS A PARTY 

SHALL BE ARBITRATED IN ACCORDANCE WITH THE RULES OF CHAPTER 8 OF 

THIS RULEBOOK. ANY OTHER ACTION, SUIT, OR PROCEEDING AGAINST ANY OF 

THE AFOREMENTIONED PERSONS SHALL BE BROUGHT WITHIN TWO YEARS 

FROM THE TIME THAT A CAUSE OF ACTION FIRST AROSE. THIS PARAGRAPH (c) 

SHALL IN NO WAY BE CONSTRUED TO LIMIT ANY PARTY’S OBLIGATION TO 

ARBITRATE ITS CLAIM OR TO PROVE A CAUSE OF ACTION AND SHALL NOT 

AUTHORIZE ANY ACTION, SUIT, OR PROCEEDING THAT WOULD OTHERWISE BE 

PROHIBITED BY THE RULES OF FORECASTEX. IF FOR ANY REASON A COURT OF 

COMPENTENT JURISDICTION FINDS THAT ANY SUCH DISPUTE IS NOT 

ARBITRABLE, SUCH DISPUTE MAY ONLY BE LITIGATED IN THE STATE OF 

ILLINOIS AND SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS 

WITHOUT REGARD TO ANY PROVISIONS OF ILLINOIS LAW THAT WOULD APPLY 

THE SUBSTANTIVE LAW OF A DIFFERENT JURISDICTION.

(d) NOTWITHSTANDING ANYTHING IN THIS RULE 905 ABOVE TO THE CONTRARY, 

IF THE NEGLIGENCE OF FORECASTEX PERSONNEL CAUSES A DIRECT, OUT-OFPOCKET LOSS TO ANY PERSON, FORECASTEX MAY, IN ITS SOLE DISCRETION, 

ASSUME RESPONSIBILITY FOR SUCH DIRECT LOSS, BUT ITS RESULTING 

OBLIGATIONS SHALL NOT EXCEED, WITH RESPECT TO ALL PERSONS SUFFERING 

SUCH LOSSES IN THE AGGREGATE: $100,000 FOR ALL LOSSES FROM ALL CAUSES 

SUFFERED ON A SINGLE DAY; $200,000 FOR ALL LOSSES SUFFERED FROM 

ALLCAUSES IN A SINGLE CALENDAR MONTTH; AND $1,000,000 FOR ALL LOSSES 

FROM ALL CAUSES SUFFERED IN A SINGLE CALENDAR YEAR. IF THE 

AGGREGATE AMOUNT OF ANY CLAIMS PURSUANT TO THIS PARAGAPH AT ANY 

TIME EXCEEDS ANY OF THE DOLLAR LIMITATIONS SET FORTH IN THE 

IMMEDIATELY PRECEDING SENTENCE, THE TOTAL AMOUNT THEN AVAILABLE 

SHALL BE ALLOCATED TO SUCH CLAIMS PRO RATA, BASED UPON THE 

RESPECTIVE AMOUNTS OF SUCH CLAIMS. ANY DISPUTED CLAIM PURSUANT TO 

THIS PARAGRAPH SHALL BE ABITRATED IN ACCORDANCE WITH THE RULES 

INCORPORATED BY REFERENCE INTO RULE 802.