Bitnomial Exchange, LLC

and

Bitnomial Clearinghouse, LLC

Rulebook

December 2023

BY ACCESSING, OR ENTERING ANY ORDER INTO, THE EXCHANGE, AND 

WITHOUT ANY NEED FOR ANY FURTHER ACTION, UNDERTAKING OR 

AGREEMENT, EACH PARTICIPANT, AUTHORIZED USER, CUSTOMER AND 

CLEARING MEMBER AGREES: (I) TO BE BOUND BY, AND COMPLY WITH, THE 

RULES AND APPLICABLE LAW, IN EACH CASE TO THE EXTENT APPLICABLE 

TO IT, HIM OR HER, AND (II) TO BECOME SUBJECT TO THE JURISDICTION OF 

THE EXCHANGE AND THE CLEARINGHOUSE WITH RESPECT TO ANY AND ALL 

MATTERS ARISING FROM, RELATED TO, OR IN CONNECTION WITH, THE 

STATUS, ACTIONS OR OMISSIONS OF SUCH PARTICIPANT, AUTHORIZED USER,

CUSTOMER OR CLEARING MEMBER.
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TABLE OF CONTENTS

TABLE OF CONTENTS.............................................................................................................. 2

CHAPTER 1 DEFINITIONS AND INTERPRETATIONS......................................................... 7

Rule 101 Definitions. ............................................................................................................... 7

Rule 102 Scope and Interpretation. ........................................................................................ 15

CHAPTER 2 GOVERNANCE................................................................................................... 15

Rule 201 Ownership............................................................................................................... 15

Rule 202 Board....................................................................................................................... 15

Rule 203 Officers ................................................................................................................... 17

Rule 204 Qualifications of Directors; Eligibility/Fitness....................................................... 17

Rule 205 Standing Committees.............................................................................................. 19

Rule 206 Confidentiality ........................................................................................................ 20

Rule 207 Conflicts of Interest ................................................................................................ 20

Rule 208 Maintenance of Books and Records ....................................................................... 22

Rule 209 Information-Sharing Arrangements........................................................................ 22

Rule 210 Regulatory Services Provider ................................................................................. 23

Rule 211 Use of Proprietary Data and Personal Information................................................. 23

Rule 212 Reporting Requirements......................................................................................... 24

CHAPTER 3 PARTICIPATION ................................................................................................ 24

Rule 301 Jurisdiction.............................................................................................................. 24

Rule 302 Participants.............................................................................................................. 24

Rule 303 Requirements for Participants................................................................................. 25

Rule 304 Compliance with Minimum Financial Requirements, Financial Reporting 

Requirements, and Requirements Relating to Protection of Customer Funds ....... 26
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Rule 305 Duties and Responsibilities of Participants ............................................................ 28

Rule 306 Authorized Users .................................................................................................... 29

Rule 307 Duties and Responsibilities of Authorized Users................................................... 30

Rule 308 Clearing Members Accessing the Exchange .......................................................... 31

Rule 309 Required Notices..................................................................................................... 31

Rule 310 Account Administrators.......................................................................................... 32

Rule 311 Access Requirements and Terms............................................................................ 32

Rule 312 Dues and Fees......................................................................................................... 32

Rule 313 Inspections by the Exchange................................................................................... 32

Rule 314 Incentive Programs................................................................................................. 33

CHAPTER 4 BUSINESS CONDUCT AND TRADING PRACTICES .................................... 33

Rule 401 Business Conduct.................................................................................................... 33

Rule 402 General Trading Practices....................................................................................... 34

Rule 403 Pre-Arranged, Pre-Negotiated and Noncompetitive Trades Prohibited ................. 37

Rule 404 Disciplinary Procedures; Termination of Connection ............................................ 38

Rule 405 Position Limits........................................................................................................ 38

Rule 406 Position Accountability........................................................................................... 38

Rule 407 Reports of Large Positions...................................................................................... 39

Rule 408 Aggregation of Positions ........................................................................................ 39

Rule 409 Reporting Levels, Position Accountability Levels and Position Limits................. 39

Rule 410 Information Disclosure and Documentation........................................................... 39

Rule 411 Compliance ............................................................................................................. 40

CHAPTER 5 MARKET OPERATIONS.................................................................................... 40

Rule 501 Market Hours and Operation .................................................................................. 40

Rule 502 Contracts Offered.................................................................................................... 43

Rule 503 User IDs.................................................................................................................. 43
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Rule 504 Exchange Trading................................................................................................... 44

Rule 505 Block Trades........................................................................................................... 46

Rule 506 Exchange for Related Position [Reserved]............................................................. 47

Rule 507 Position Transfers................................................................................................... 47

Rule 508 Trade Cancellations; Trade Reviews...................................................................... 47

Rule 509 Settlement ............................................................................................................... 48

Rule 510 Recordkeeping; Audit Trail .................................................................................... 48

Rule 511 Information Regarding Orders................................................................................ 49

Rule 512 Disaster Recovery; Business Continuity................................................................. 49

Rule 513 Exchange Messaging Policy ................................................................................... 50

Rule 514 Self-Match Prevention ............................................................................................ 50

CHAPTER 6 DISCIPLINE AND ENFORCEMENT................................................................. 50

Rule 601 Disciplinary and Enforcement Procedures – General............................................. 50

Rule 602 Process Considerations........................................................................................... 50

Rule 603 Disciplinary Matters ............................................................................................... 51

Rule 604 Summary Actions ................................................................................................... 59

Rule 605 Appeal from Hearing Panel Decisions and Summary Actions............................... 62

Rule 606 Rights and Responsibilities After Suspension or Termination............................... 63

Rule 607 Notice to the Respondent, the CFTC, and the Public ............................................. 64

CHAPTER 7 ARBITRATION ................................................................................................... 64

Rule 701 In General ............................................................................................................... 65

Rule 702 Exceptions............................................................................................................... 65

Rule 703 Penalties.................................................................................................................. 66

CHAPTER 8 CLEARING .......................................................................................................... 66

Rule 801 Clearing................................................................................................................... 66

Rule 802 Participants.............................................................................................................. 66
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Rule 803 Clearing Members................................................................................................... 67

Rule 804 Application for Clearing Membership.................................................................... 68

Rule 805 Withdrawal of Clearing Membership ..................................................................... 68

Rule 806 Responsibilities of Clearing Members.................................................................... 69

Rule 807 Clearing Member Financial Reporting Requirements............................................ 71

Rule 808 Notices Required of Clearing Members ................................................................. 72

Rule 809 Clearinghouse Authority......................................................................................... 74

Rule 810 Liquidity Events...................................................................................................... 75

Rule 811 Acceptance for Clearing and Novation................................................................... 75

Rule 812 Liens Held by the Clearinghouse............................................................................ 76

Rule 813 Settlement and Delivery.......................................................................................... 76

Rule 814 Defaults................................................................................................................... 78

Rule 815 Application of Funds .............................................................................................. 79

Rule 816 Liquidation on Termination or Suspension of Clearing Member........................... 80

Rule 817 Close-Outs .............................................................................................................. 80

Rule 818 Close-Out Netting................................................................................................... 81

Rule 819 Guaranty Fund ........................................................................................................ 83

Rule 820 Margins and Liquidations....................................................................................... 84

Rule 821 Clearing Fees .......................................................................................................... 85

Rule 822 Transfer of Open Positions..................................................................................... 84

Rule 823 Notice of Arbitration............................................................................................... 85

Rule 824 Public Information .................................................................................................. 85

CHAPTER 9 [RESERVED] ....................................................................................................... 85

CHAPTER 10 MISCELLANEOUS ........................................................................................... 86

Rule 1001 Trading by Officials Prohibited; Misuse of Material, Non-Public Information..... 86
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Rule 1002 Market Data ............................................................................................................ 87

Rule 1003 Recording of Communications............................................................................... 88

Rule 1004 Confidentiality ........................................................................................................ 88

Rule 1005 Force Majeure ......................................................................................................... 89

Rule 1006 Extension or Waiver of Rules................................................................................. 89

Rule 1007 Effect of Amendment, Repeal or New Rule ........................................................... 89

Rule 1008 Signatures................................................................................................................ 90

Rule 1009 Governing Law; Legal Proceedings ....................................................................... 90

Rule 1010 Indemnification....................................................................................................... 90

Rule 1011 LIMITATION OF LIABILITY; NO WARRANTIES........................................... 91

Rule 1012 Affiliate Clearing Member..................................................................93

CHAPTER 11 DIGITAL ASSET DELIVERY .......................................................................... 94

Rule 1101 Digital Asset Delivery Definitions ......................................................................... 94

Rule 1102 Participant and Clearing Member Delivery Obligations ........................................ 94

Rule 1103 Delivery Procedures................................................................................................ 95

Rule 1104 Cost of Delivery...................................................................................................... 96

Rule 1105 Delivery Infractions................................................................................................ 96

Rule 1106 Digital Asset Delivery Eligibility ........................................................................... 97

Rule 1107 Settlement Facility Reporting Requirements.......................................................... 97

CHAPTER 12 BITCOIN FUTURES AND OPTIONS.............................................................. 98

Rule 1201 Bitcoin US Dollar Futures ...................................................................................... 98

Rule 1202 Deci Bitcoin US Dollar Futures.............................................................................. 99

Rule 1203 Options on Bitcoin US Dollar Futures.................................................................. 100

Rule 1204 Bitcoin Futures and Options Price Bands and Price Limits.................................. 100

Rule 1205 Bitcoin Futures and Options Position Limits........................................................ 101

Rule 1206 Bitcoin Futures and Options Settlement Price Computation................................ 101
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CHAPTER 1

DEFINITIONS AND INTERPRETATIONS

Rule 101 Definitions.

The following terms as used in the Rules have the meanings set forth in this Chapter, unless 

otherwise specifically provided elsewhere in the Rules or required by the context.

“Account Administrator” means an officer or employee of a Participant appointed 

pursuant to Rule 310.

“Affiliate” means a Person who directly or indirectly, controls, is controlled by, or 

is under common control with another Person.

“Affiliate Clearing Member” has a meaning set forth in Rule 1012.

“API” means Application Programming Interface, a programmatic software

interface..

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

rule or ordinance of any governmental or self-regulatory authority applicable to such 

Person, including the CEA and CFTC Rules.

“Approved Financial Institution” has the meaning set forth in Rule 803(i).

“Audit Trail” has the meaning set forth in Rule 510.

“Authorized User” means a natural person, authorized by the Exchange as an 

Authorized User in accordance with Rule 306, who is either employed by or is an agent of 

a Clearing Member or a Participant.

“Bankruptcy Code” means Title 11 of the U.S. Code.

“Bankruptcy Event” has the meaning set forth in Rule 818.

“Block Trade” means a privately negotiated transaction in a Contract that meets 

certain quantity thresholds and that is permitted to occur away from the Exchange and 

reported in accordance with Rule 505.

“Board” means the Board of Directors.

“Board of Appeals” means a panel comprised of a chair and two individuals 

appointed by the Board to consider appeals under Chapter 6.
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“Business Day” means any day on which the Exchange and Clearinghouse are open 

for trading and clearing.

“CEA” means the Commodity Exchange Act, as amended from time to time.

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

Commission or any successor agency.

“CFTC Rules” means the rules, regulations and orders of the CFTC, as amended 

from time to time.

“CPT” means Central Prevailing Time.

“Chairman” means the Chairman of the Board.

“Chief Executive Officer” means the individual appointed by the Board to serve as 

the chief executive officer.

“Chief Regulatory Officer” means the individual appointed by the Board to serve 

as the chief regulatory officer.

“Clearinghouse” means Bitnomial Clearinghouse, LLC, a Delaware limited 

liability company registered by the CFTC as a derivatives clearing organization that is 

designated by the Exchange to provide clearing services with respect to any or all of the 

Contracts.

“Clearinghouse Official” means any Officer or Employee of the Clearinghouse and 

any member of the Board, a committee established by the Board, a Hearing Panel or Board 

of Appeals.

“Clearing Member” means an entity meeting the requirements of, and approved for, 

clearing membership at the Clearinghouse that is authorized pursuant to the Rules to clear 

trades in any or all Contracts. Except for those Clearing Members that clear solely for their 

own proprietary accounts (each, an “Individual Clearing Member”), all other Clearing 

Members must be registered with the CFTC as FCMs (each, an “FCM Clearing Member”).

“Clearing Member Agreement” means an agreement between the Clearinghouse

and a Clearing Member which must be signed in order for a Clearing Member to have 

access to the Clearinghouse for clearing services with respect to any or all of the Contracts.

“Close-Out Value” has the meaning set forth in Rule 818.

“Collateral” means such property as may be delivered by a Clearing Member to the 

Clearinghouse as collateral for the obligations of such Clearing Member to the 

Clearinghouse (including but not limited to Initial Margin and Variation Margin), and all 

proceeds of the foregoing and all proceeds of any of the foregoing, held in or for the 

accounts of a Clearing Member in connection with the financial obligations of such 
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Clearing Member, however created, arising or evidenced, whether direct or indirect, 

absolute or contingent, existing, due or to become due.

“Compliance Department” has the meaning set forth in Rule 602.

“Contract” means any contract, agreement, or transaction approved for trading on 

the Exchange and pursuant to the Rules.

“Contract Specifications” means the descriptions of the contractual items for each 

Contract as set forth in the document available on the Website. Items described in the 

Contract Specifications referenced in this Rulebook include “Last Trading Day,” “Daily 

Settlement Price,” and “Final Settlement Price.”

“Customer” means any Person for whom a Participant carries an account (other 

than such Participant or any of its affiliates) or from whom a Participant solicits or accepts 

an order. 

“Customer Account” means an account established by a Clearing Member with the 

Clearinghouse in which the Clearing Member maintains trades, positions and Margin 

solely for Customers of the Clearing Member.

“Daily Settlement Price” has the meaning set forth in Rule 509.

“Director” means an individual serving on the Board.

“Disciplinary Action” has the meaning set forth in Rule 601.

“Disciplinary Committee” means a function of the Compliance Department to 

fulfill various adjudicative responsibilities and duties described in Rule 602.

“Emergency” means the occurrences or circumstances which, in the opinion of the 

Board, require immediate action to be taken in accordance with Rule 501, and which 

threaten, or may threaten, the fair and orderly trading in, or the settlement or integrity of, 

any Contract, including, without limitation, the following:

(a) any circumstance that may materially affect the performance of a Contract, 

including failure of the Clearinghouse system;

(b) any action taken by any United States or foreign regulatory, self- regulatory, 

judicial, arbitral, or governmental (whether national, state or municipal) or 

quasi-governmental authority, or any agency, department, instrumentality, 

or sub-division thereof; or other Person exercising, or entitled to exercise 

any administrative, executive, judicial, legislative, police, regulatory or 

taxing authority or power; or any other contract market, clearinghouse, 

board of trade, or other exchange or trade association (foreign or domestic) 

that may have a direct impact on trading on the Exchange or the settlement 

legality or enforceability of any Contract;
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(c) any actual, attempted or threatened corner, squeeze, congestion, 

manipulative activity or undue concentration of positions in a Contract;

(d) any circumstance that may have a severe, adverse effect upon the functions 

and facilities of the Exchange, including, but not limited to, acts of God, 

fire, flood or other natural disasters, bomb threats, acts of terrorism or war, 

severely inclement weather, or failure or malfunction of all or a portion of 

the Trading Platform, or other system breakdowns or interruptions such as 

power, computer, communication or transportation systems or the Internet;

(e) the bankruptcy or insolvency of any Clearing Member or the imposition of 

any injunction or other restraint by any government agency, clearinghouse, 

court or arbitrator upon a Clearing Member which may affect the ability of 

a Clearing Member to trade in or perform on a Contract;

(f) any circumstance in which it appears to the Board that a Clearing Member 

or any other Person:

i. has failed to perform on a Contract;

ii. is insolvent; or

iii. is in a financial or operational condition or is conducting business such 

that the Clearing Member or Person cannot be permitted to continue 

in business without jeopardizing the safety of Participants, other 

Clearing Members, the Exchange or the Clearinghouse; or

iv. any other unusual, unforeseeable or adverse circumstance as 

determined by the Exchange

“Exchange” means Bitnomial Exchange, LLC, a Delaware limited liability 

company designated by the CFTC as a designated contract market.

“Exchange Official” means any Officer or employee of the Exchange and any 

member of the Board, a committee established by the Board, a Hearing Panel or Board of 

Appeals.

“Exchange Transaction” means a Contract executed through the Trade Matching 

Engine.

“Expiry” means the Contract date of expiration.

“FDICIA” has the meaning set forth in Rule 818.

“Final Settlement Price” means the price for each Contract supplied by the 

Exchange to the Clearinghouse as the final Settlement Price for the Expiry as specified in 

the Contract Specifications.
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“FCM” means a futures commission merchant as defined in the CEA and CFTC 

Rules and registered with the CFTC as such.

“Governmental Authority” means any domestic or foreign government (or political 

subdivision), governmental or regulatory authority, agency, court, commission or other 

governmental or regulatory entity (including any Self-Regulatory Organization).

“Guaranty Fund” means fund comprising the monies, securities and instruments 

capitalized by Clearinghouse, which fund shall be used as provided in Rule 815 to 

reimburse the Clearinghouse for losses sustained by the Clearinghouse as a result of the 

failure of any Clearing Member to discharge its financial obligations in accordance with 

the Rules.

“House Account” has the meaning set forth in CFTC Rule 39.2.

“Initial Margin” means the initial amount of Collateral that must be deposited with 

or paid to the Clearinghouse by Clearing Members in accordance with the Rules as a 

performance bond in respect of the Contracts held in any house account and customer 

accounts of such Clearing Members.

“Investigation Team” means a group within the Compliance Department, whose 

function is to fulfill the investigative and enforcement responsibilities described in Rule 

602.

“Insolvency” and “Insolvent” means the occurrence of any of the following events 

with respect to a Person:

(a) the Person is determined to be insolvent by a Government Agency or SelfRegulatory Organization;

(b) if the Person is a member of the Securities Investor Protection Corporation, 

a court of competent jurisdiction finds that the Person meets any one of the 

conditions set forth in clauses (A), (B), (C) or (D) of Section 5(b)(1) of the 

Securities Investor Protection Act of 1970;

(c) in the event of the entry or the making of a decree or order by a court, 

Government Agency or other supervisory authority of competent 

jurisdiction (i) adjudging the Person as bankrupt or insolvent, (ii) approving 

as properly filed a petition seeking reorganization, arrangement, liquidation, 

dissolution, adjustment or composition of or in respect of the Person under 

the Bankruptcy Code or any other applicable federal, state or other U.S. or

non-U.S. law, including any bankruptcy, insolvency, reorganization, 

liquidation, dissolution or similar law, (iii) appointing a receiver, custodian, 

liquidator, provisional liquidator, administrator, provisional administrator, 

assignee, trustee, sequestrator or other similar official for the Person or for 

any substantial part of its property,
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(d) ordering the winding up or liquidation of the Person’s affairs or (iv) 

consenting to the institution by the Person of proceedings to be adjudicated 

as a bankrupt or insolvent;

(e) the filing by the Person of a petition, or any case or proceeding, seeking 

reorganization or relief under the Bankruptcy Code or any other applicable 

federal, state or other U.S. or non-U.S. law, including any bankruptcy, 

insolvency, reorganization, liquidation, dissolution or similar law, or the 

consent by the Person to the filing of any such petition, case or proceeding 

or to the appointment of a receiver, custodian, liquidator, provisional 

liquidator, administrator, provisional administrator, assignee, trustee, 

sequestrator or other similar official for the Person or for any substantial 

part of its property, or the making by the Person of an assignment for the 

benefit of its creditors, or the admission by the Person in writing of its 

inability to pay its debts generally as they become due, or the taking of 

corporate or similar action by the Person in furtherance of the foregoing.

“Last Trading Day” is the last day a Contract may be traded and is defined in the 

Contract Specifications.

“Liquidity Event” has the meaning given to it in Rule 809.

“LLC Agreement” means the Limited Liability Company Agreement of the 

Exchange and Clearinghouse as amended or restated from time to time.

“Margin” means Initial Margin and Variation Margin or either of them.

“NFA” means the National Futures Association.

“Official” means an Exchange Official and a Clearinghouse Official.

“Officer” has the meaning given to it in Rule 203.

“Order” means any order to buy or sell a Contract on or subject to the Rules of the 

Exchange.

“Participant” means an entity that has signed the Participant Agreement for 

purposes of entering into Transactions for its own account or accesses the Exchange on 

behalf of a Customer. In addition, a Clearing Member who does not enter into Transactions

for its own account shall be deemed to be a Participant hereunder solely for the purpose of 

accessing the Exchange in order to liquidate Transactions and any resulting positions 

previously submitted to the Clearinghouse for the account of such Clearing Member on 

behalf of a Participant that is in default for failure to perform its obligations to the Exchange 

or such Clearing Member (to the extent applicable).

“Participant Agreement” means an agreement between the Exchange and a 

Participant which must be signed in order for a Participant to have access to the Exchange
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for the execution of trades involving commodity derivative products and related financial 

instruments.

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

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

“Position Transfer” means a transaction in a Contract(s) that is executed by the 

Exchange or the Clearinghouse personnel for administrative purposes outlined in Rule 507.

“Public Director” means a Director having the qualifications set out in Rule 202.

“Regulatory Services Agreement” means the agreement(s) between the Exchange 

or the Clearinghouse and the Regulatory Service Provider(s) whereby certain functions 

mandated under the CEA, such as market monitoring and trade practice surveillance, are 

delegated to the Regulatory Services Provider(s).

“Regulatory Services Provider” means NFA and such other organizations, if any, 

that provide regulatory services to the Exchange or the Clearinghouse, together with any 

such organization’s employees and agents.

“Requirements” means the Rules; other requirements implemented by the 

Exchange or the Clearinghouse pursuant to the Rules; each term of a Contract; and the 

documentation and other contractual obligations between a Participant (including its 

Authorized Users) and the Exchange or a Clearing Member and the Clearinghouse.

“Respondent” means a Participant under investigation for alleged Rule violation(s) 

or against which charges have been filed.

“Rules” means any rule, interpretation, stated policy, or instrument corresponding 

to any of the foregoing, including these Rules, in each case as adopted from time to time 

by the Exchange or the Clearinghouse.

“Self-Regulatory Organization” has the meaning given to such term in CFTC Rule

1.3(ee) and includes a derivatives clearing organization that is registered as such with the 

CFTC.

“Settlement Bank” means a bank that maintains an account either for the 

Clearinghouse or for any of its Clearing Members, which is used for the purpose of any 

settlement activity described in 17 CFR § 39.14.

“Settlement Price” means the price for each Contract supplied by the Exchange to 

the Clearinghouse at the end of each trading day (Daily Settlement Price).

“Surveillance Team” means the group within the Compliance Department that is 

responsible for real-time and post-trade surveillance of the Exchange’s trading systems,

as described in Rule 602.
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“Trade Matching Engine” means the set of algorithms through which orders are 

matched.

“Trading Account” means a trading account to be separately tracked and margined 

by a Participant’s Clearing Member.

“Trading Account ID” means an Exchange assigned ID that represents a Trading 

Account for use by the Clearinghouse and its Clearing Members.

“Trading Platform” means the electronic trading facility operated by the Exchange

to provide Participants with the ability to execute Exchange Transactions from the 

interaction of multiple bids and multiple offers within a predetermined, nondiscretionary 

automated trade matching and execution algorithm.

“Transaction” means an Exchange Transaction.

“Trade Risk Limit” has the meaning set forth in Rule 504 of these Rules.

“Trading Hours” means, for any Business Day, the hours specified on the trading 

calendar at the Website.

“Variation Margin” means (i) on the Business Day a Contract has been accepted 

for clearing by the Clearinghouse, the difference between the price at which such Contract 

was bought or sold and the Settlement Price for such Contract; and (ii) thereafter, the 

difference, as applicable, between (x) the Settlement Price on a given Business Day and 

the preceding Settlement Price for such Contract, or (y) the price at which such Contract 

was closed on the books of the Clearinghouse and the preceding Settlement Price for such 

Contract.

“Website” means bitnomial.com.
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Rule 102 Scope and Interpretation.

As used in any Rule, terms in the singular include the plural and vice versa and references 

to the masculine, feminine or neuter gender includes each other gender, unless the context 

expresses a clear contrary intention. As used in any Rule, time references are to Central Standard 

Time.

CHAPTER 2

GOVERNANCE

Rule 201 Ownership

The Exchange is a Delaware limited liability company. The management and operation of 

the Exchange is governed by the LLC Agreement. All of the equity interests of the Exchange are 

owned by Bitnomial, Inc.

The Clearinghouse is a Delaware limited liability company. The management and

operation of the Clearinghouse is governed by the LLC Agreement. All of the equity interests of 

the Clearinghouse are owned by the Exchange.

Rule 202 Board

(a) The Board shall manage the day to day business operations of the Exchange

and the Clearinghouse. The Board has the power and authority to call for review, and to 

affirm, modify, suspend or overrule, any and all decisions and actions of standing 

committees or special committees of the Board or any panel of the Officers related to the 

day to day business operations of the Exchange and Clearinghouse.

(b) The Board may act only by the decision of an absolute majority in number 

of the Directors by vote at a meeting, by unanimous written consent without a meeting, or 

as otherwise set forth in the LLC Agreement.

(c) At all times, at least 35% of the Directors shall be Public Directors. Each

Director (including Public Directors) shall be appointed in accordance with the LLC

Agreement, and shall serve until his or her successor is duly appointed, or until his or her 

earlier resignation or removal, with or without cause.

(d) Each Director is entitled to indemnification pursuant to the LLC Agreement 

with respect to matters relating to the Exchange and Clearinghouse.

(e) To qualify as a Public Director, an individual must be found, by action of 

the Board, to have no material relationship with the Exchange or the Clearinghouse. The 

Board must make such finding upon the nomination or appointment of the Director and as 

often as necessary in light of all circumstances relevant to such Director, but in no case less 

than annually. A “material relationship” is one that reasonably could affect the independent 

judgment or decision-making of the Director. The Board need not consider previous service 

as a Director of the Exchange and the Clearinghouse to constitute a “material relationship.” 
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A Director shall be considered to have a “material relationship” with the Exchange and/or 

the Clearinghouse if any of the following circumstances exist or have existed within the 

past year:

(i) such Director is or was an Officer or an employee of the Exchange or 

the Clearinghouse, or an officer or an employee of an Affiliate of the 

Exchange or the Clearinghouse;

(ii) such Director is or was a Participant, Clearing Member or material 

owner of the Exchange or the Clearinghouse;

(iii) such Director is or was a director, an officer, or an employee of a 

Participant, Clearing Member or owner of the Exchange or the 

Clearinghouse;

(iv) such Director is or was an officer of another entity, which entity has a 

compensation committee (or similar body) on which any Officer of the 

Exchange or the Clearinghouse serves;

(v) such Director, or an entity with which the Director is a partner, an 

officer, an employee, or a director, receives or has received more than 

$100,000 in combined annual payments for legal, accounting, or 

consulting services from the Exchange or the Clearinghouse or their

Affiliates, any Participant, any Clearing Member or any Affiliate of 

such Participant or Clearing Member. Compensation for services as a 

Director of the Exchange or the Clearinghouse or as a director of an 

Affiliate thereof does not count toward the $100,000 payment limit, nor 

does deferred compensation for services rendered prior to becoming a 

Director, so long as such compensation is in no way contingent, 

conditioned, or revocable; or,

(vi) in the case of a Public Director that is a member of the Regulatory 

Oversight Committee or the Exchange Participant Committee, such 

Public Director accepts or has accepted, directly or indirectly, any 

consulting, advisory, or other compensatory fee from the Exchange or 

its Affiliate or any Participant or any Affiliate of such Participant, other 

than deferred compensation for service rendered prior to becoming a 

member of the Regulatory Oversight Committee or the Exchange 

Participant Committee, provided that such compensation is in no way 

contingent, conditioned, or revocable.

(vii) Any of the “material relationships” set forth above apply to the 

“immediate family” of such Director, i.e., spouse, parents, children, and 

siblings, in each case, whether by blood, marriage, or adoption, or any 

person residing in the home of the director or that of his or her 

immediate family.
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(f) The compensation of the Public Directors and other non-executive members 

of the Board shall not be linked to the business performance of the Exchange or the 

Clearinghouse.

(g) The Board shall have procedures, as may be further set forth in policies that 

the Exchange or the Clearinghouse may adopt, to remove a member from the Board where 

the conduct of such member is likely to be prejudicial to the sound and prudent 

management of the Exchange or the Clearinghouse.

(h) The Board shall establish arrangements to permit consideration of 

Participants in connection with the functioning of the Exchange or the Clearinghouse and 

with additions or amendments to the Rules and shall make a description of such 

arrangements available to the public and to the CFTC.

Rule 203 Officers

(a) Subject to the oversight of the Board, the Exchange and the Clearinghouse 

shall appoint from time to time one or more individuals to serve as the Chief Executive 

Officer, Chief Regulatory Officer and may further appoint such other officers of the 

Exchange, the Clearinghouse, or any subsidiary of the Exchange or the Clearinghouse

(each, an “Officer”) as deemed necessary or appropriate, with such titles, duties, and 

authority as the Exchange and the Clearinghouse shall approve, to carry out the business 

of the Exchange, the Clearinghouse, or any subsidiary of the Exchange or the 

Clearinghouse, and upon such terms and conditions as the Board shall determine.

(b) Any Officer may also be a director, officer, partner or employee of the 

Exchange, the Clearinghouse, or of any of its Affiliates.

(c) The Officers shall have such powers and duties in the management of the 

Exchange or the Clearinghouse as the Board may prescribe from time to time, subject to 

the terms of the LLC Agreement.

(d) Each Officer is entitled to indemnification pursuant to the LLC Agreement 

with respect to matters relating to the Exchange or the Clearinghouse.

Rule 204 Qualifications of Directors; Eligibility/Fitness

(a) An individual may not serve as a Board member, or serve on a committee 

established by the Board, the Hearing Panel, or a Board of Appeals, or hold a 10% or more 

ownership interest in the Exchange or the Clearinghouse, if the individual:

(i) within the prior three (3) years has been found, by a final decision in 

any action or proceeding brought in a court of competent jurisdiction, 

the CFTC, or any Self-Regulatory Organization, to have committed a 

disciplinary offense;

(ii) within the prior three (3) years has entered into a settlement agreement 
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in which any of the findings or, in the absence of such findings, any of 

the acts charged, included a disciplinary offense;

(iii) is currently suspended from trading on a Contract Market, is suspended 

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

serving any sentence or probation, or owes any portion of a fine or 

penalty related to either: (A) a finding of a disciplinary offense by a final 

decision in any action or proceeding brought in a court of competent 

jurisdiction, the CFTC, or any Self-Regulatory Organization; or (B) 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;

(iv) 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;

(v) is currently, or within the past three (3) years has been, subject to a 

revocation or suspension of registration by the CFTC;

(vi) has been convicted of a felony listed in Section 8a(2)(D)(ii) through (iv) 

of the CEA; or

(vii) is currently subject to a denial, suspension or disqualification from 

serving on a disciplinary committee, 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; or

(viii) is subject to a statutory disqualification pursuant to Section 8a(2) of the 

CEA.

(ix) For purposes of this Rule 204(a), the terms “disciplinary offense,” “final 

decision” and “settlement agreement” have the meaning given those 

terms in CFTC Rule 1.63(a).

(b) Prior to nomination to the Board, each individual shall certify he/she is not 

disqualified pursuant to Rule 204(a). Upon appointment, each member of the Board shall 

provide to the Exchange or the Clearinghouse, where applicable, changes in registration 

information within 30 days and certification of compliance accordingly. In addition, each 

member will certify on at least an annual basis regarding their continued compliance with 

Rule 204(a). The Exchange and the Clearinghouse shall verify information supporting 

Board compliance with eligibility criteria.

(c) In addition, to serve as a member of the Board, an individual must possess 

the ability to contribute to the effective oversight and management of the Exchange and 

the Clearinghouse, taking into account the needs of the Exchange and the Clearinghouse

and such factors as the individual’s experience, perspective, skills and knowledge of the 

industry in which the Exchange and the Clearinghouse operates. This shall include 
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sufficient expertise, where applicable, in financial services, risk management, and clearing 

services.

Rule 205 Standing Committees

(a) The Board shall have at least the four following standing committees: the 

Nominating Committee, the Exchange Participant Committee, the Regulatory Oversight 

Committee, and the Risk Committee, each with the roles and responsibilities set out below.

(b) Nominating Committee. The Nominating Committee of the Board shall 

consist of at least 51% Public Directors. The Nominating Committee reports to the Board 

and shall be chaired by a Public Director. The Nominating Committee shall have authority 

and responsibility to (i) identify individuals qualified to serve on the Board, consistent with 

the criteria that the Board require and any composition requirement that the Commission 

promulgates; and (ii) administer a process for the nomination of individuals to the Board.

(c) Exchange Participant Committee. The Exchange Participant Committee 

of the Board reports to the Board and shall consist of at least 35% Public Directors. The 

Exchange Participant Committee is responsible for (i) determining the standards and 

requirements for initial and continuing Participant eligibility, (ii) reviewing appeals of staff 

denials of Participant applications, and (iii) approving Rules that would result in different 

categories or classes of Participants receiving disparate access to the Exchange. The 

Exchange Participant Committee shall not, and shall not permit the Exchange to, restrict 

access or impose burdens on access in a discriminatory manner, within each category or 

class of Participants or between similarly-situated categories or classes of Participants.

(d) Regulatory Oversight Committee. The Regulatory Oversight Committee of 

the Board shall report to the Board and consist of 100% Public Directors. The Regulatory 

Oversight Committee shall oversee the Exchange’s regulatory program on behalf of the 

Board with the authority to (i) monitor the regulatory program of the Exchange for 

sufficiency, effectiveness, and independence and (ii) oversee all facets of the regulatory 

program, including:

(i) trade practice and market surveillance; audits, examinations, and other 

regulatory responsibilities with respect to Participants (including 

compliance with, if applicable, financial integrity, financial reporting, 

sales practice, recordkeeping, and other requirements); and the conduct 

of investigations;

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

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

personnel;

(iii) supervising the Chief Regulatory Officer of the Exchange, who will 

report directly to the Regulatory Oversight Committee;

(iv) recommending changes that would ensure fair, vigorous, and effective 
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regulation; and

(v) reviewing all regulatory proposals prior to implementation and advising 

the Board as to whether and how such changes may impact regulation.

(e) Risk Committee. The Risk Committee of the Board shall determine the 

standards and requirements for the Financial Risk Management and Information Security 

frameworks. The Risk Committee shall review any exceedances of thresholds on various 

reporting and review the plan to mitigate the risk. If a Clearing Member is placed on higher 

margin or other increased requirements, the Risk Committee will process the appeals of 

the Clearinghouse. The Risk Committee shall not approve any provision of the 

Clearinghouse Rulebook that would result in different categories or classes of Risks 

receiving disparate access. 

(f) In addition to the standing committees, the Board shall have the power and 

authority to create and terminate, in accordance with the LLC Agreement, special 

committees of the Board and designate their composition, responsibilities and powers.

Rule 206 Confidentiality

(a) No member of the Board or any committee established by the Board or by 

or pursuant to the Rules will use or disclose any material non-public information obtained 

in connection with such member’s participation in the Board or such committee for any 

purpose other than the performance of his or her official duties as a member of the Board 

or such committee.

(b) No Exchange Official or Clearinghouse Official will: (i) trade in any 

commodity interest if such officer, employee or agent obtained material non-public 

information concerning such financial instrument in connection with such employee’s, 

officer’s or agent’s employment or (ii) disclose to any other Person material non-public 

information obtained in connection with such employee’s, officer’s or agent’s 

employment, if such employee, officer or agent could reasonably expect that such 

information might assist another Person in trading any commodity interest.

Rule 207 Conflicts of Interest

(a) Named Party In Interest Conflict

(i) No member of the Board, the Hearing Panel, any Board of Appeals or 

any other disciplinary committee of the Exchange or the Clearinghouse 

will knowingly participate in such body’s deliberations or voting in any 

matter involving a named party in interest where such member (A) is 

the named party in interest in the matter, (B) is an employer, employee 

or fellow employee of a named party in interest, (C) as any other 

significant, ongoing business relationship with a named party in interest, 

excluding relationships limited to Contracts, or (D) has a family 

relationship with a named party in interest.
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(ii) Prior to consideration of any matter involving a named party in interest, 

each member of the deliberating body who does not choose to abstain 

from deliberations and voting will disclose to the Chief Regulatory 

Officer whether such member has one of the relationships listed in 

clause (i) above with a named party in interest.

(iii) The Chief Regulatory Officer will 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 

paragraph (iii). Such determination will be based upon a review of the 

following information: (A) information provided by such member 

pursuant to clause (ii) above; and (B) any other source of information 

that is held by and reasonably available to the Exchange.

(b) Financial Interest in a Significant Action Conflict

(i) No member of the Board, the Hearing Panel, any Board of Appeals or

any other disciplinary committee of the Exchange or the Clearinghouse

will participate in such body’s deliberations and voting on any 

significant action if such member has a direct and substantial financial 

interest in the result of the vote, as determined pursuant to clause (iii) 

below.

(ii) Prior to consideration of any significant action, each member of the 

deliberating body who does not choose to abstain from deliberations and 

voting will disclose to the Chief Regulatory Officer any information that 

may be relevant to a determination of whether such member has a direct 

and substantial financial interest in the result of the vote.

(iii) The Chief Regulatory Officer will 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 

paragraph (iii). Such determination will be based upon a review of the 

following information: (A) the most recent large trader reports and

clearing records available to the Exchange; (B) information provided by 

such member pursuant to clause (ii) above; and (C) any other 

information reasonably available to the Exchange or the Clearinghouse, 

taking into consideration the exigency of the significant action being 

contemplated.

(iv) Any member of the Board, the Hearing Panel, any Board of Appeals or 

any other disciplinary committee of the Exchange or the Clearinghouse

who would otherwise be required to abstain from deliberations and 

voting pursuant to clause (i) above may participate in deliberations, but 

not voting, if the deliberating body, after considering the factors 

specified below, determines that such participation would be consistent 

with the public interest; provided, however, that before reaching any 
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such determination, the deliberating body will fully consider the 

information specified in clause (ii) above which is the basis for such 

member’s substantial financial interest in the significant action that is 

being contemplated. In making its determination, the deliberating body 

will consider: (A) whether such member’s participation in the 

deliberations is necessary to achieve a quorum; and (B) whether such 

member has unique or special expertise, knowledge or experience in the 

matter being considered.

(c) The minutes of any meeting to which the conflicts determination procedures 

set forth in this Rule apply will reflect the following information:

(i) the names of all members of the relevant deliberating body who attended 

such meeting in person or who otherwise participated in such meeting;

(ii) the name of any member of the relevant deliberating body who 

voluntarily recused himself or herself or was required to abstain from 

deliberations or voting on a matter and the reason for the recusal or 

abstention, if stated;

(iii) the information that was reviewed for each member of the relevant 

deliberating body; and

(iv) any determination made in accordance with clause (iv) of Rule 207(b)

above.

Rule 208 Maintenance of Books and Records

(a) Each of the Exchange and the Clearinghouse shall keep, or cause to be kept, 

complete and accurate books and records of accounts of the Exchange and the 

Clearinghouse, including all books and records required to be maintained pursuant to the 

CEA, and the CFTC Rules, including CFTC Rule 38.707(a)(6).

(b) The Exchange and the Clearinghouse shall retain all such books and records 

for at least five (5) years, and shall make such books and records readily accessible for 

inspection by the CFTC and the U.S. Department of Justice during the first two (2) years 

of such five-year period.

Rule 209 Information-Sharing Arrangements

(a) The Exchange and the Clearinghouse may each enter into informationsharing agreements or other arrangements or procedures to coordinate surveillance with 

other markets on which financial instruments related to the Contracts trade or are cleared. 

As part of any information-sharing agreements or other arrangements or procedures 

adopted pursuant to this Rule, the Exchange and the Clearinghouse may:

(i) provide market surveillance reports to other markets;
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(ii) share information and documents concerning current and former 

Participants or Clearing Members with other markets;

(iii) share information and documents concerning ongoing and completed 

investigations with other markets; or

(iv) require its current or former Participants or Clearing Members to 

provide information and documents to the Exchange or the 

Clearinghouse at the request of other markets with which the Exchange 

or the Clearinghouse has an information-sharing agreement or other 

arrangements or procedures.

(b) The Exchange or the Clearinghouse may enter into any arrangement with 

any Person or body (including the CFTC, the NFA, any Self-Regulatory Organization, any 

exchange, market, or clearing organization, or foreign regulatory authority) if the Exchange

or the Clearinghouse considers such arrangement to be in furtherance of the Exchange’s 

the Clearinghouse’s purpose or duties under the Rules or any law or regulation.

(c) The Exchange the Clearinghouse may provide information to a duly 

authorized foreign Governmental Authority, as directed by the CFTC, in accordance with 

an information-sharing agreement executed with the CFTC.

Rule 210 Regulatory Services Provider

(a) The Exchange or the Clearinghouse may, in its sole discretion, contract with 

a Regulatory Services Provider to provide certain regulatory services to the Exchange or 

the Clearinghouse pursuant to a Regulatory Services Agreement. In accordance with the 

relevant Regulatory Services Agreement, a Regulatory Services Provider may perform 

certain surveillance, investigative, and regulatory functions under the Rules and the 

Exchange or the Clearinghouse may provide information to such Regulatory Services 

Provider in connection with the performance by such Regulatory Services Provider of those 

functions.

(b) Any of the powers or functions of the Exchange or the Clearinghouse under 

the Rules may be delegated to a Regulatory Services Provider pursuant to the relevant 

Regulatory Services Agreement in such manner and on such terms as the Exchange or the 

Clearinghouse and such Regulatory Services Provider may mutually agree; provided, 

however, that the Exchange and the Clearinghouse shall retain ultimate decision-making 

authority with respect to any powers or functions that are delegated to such Regulatory 

Services Provider.

Rule 211 Use of Proprietary Data and Personal Information

(a) The Exchange and the Clearinghouse may not use for business or marketing 

purposes any proprietary data or personal information collected or received, from or on 

behalf of any Person, for the purpose of fulfilling its regulatory obligations; provided, 

however, that the Exchange and the Clearinghouse may use such data or information for 
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such purposes with the consent of the Person from whom such data or information is 

collected or received.

(b) Notwithstanding the provisions of Rule 211(a), each Participant,

Authorized User and Clearing Member agrees that the Exchange and the Clearinghouse

may share such proprietary data and personal information with one or more registered 

entities (as such term is defined in CFTC Rules).

(c) Access to the Exchange may not be conditioned upon the use of proprietary 

data or personal information for business or marketing purposes.

Rule 212 Reporting Requirements

In the event the Board rejects a recommendation or supersedes an action of the Regulatory 

Oversight Committee or the Exchange Participant Committee, the Exchange or the Clearinghouse 

shall submit a written report to the CFTC detailing: (1) the recommendation or action of the 

Regulatory Oversight Committee or the Participation Committee; (2) the rationale for such 

recommendation or action; (3) the rationale of the Board for rejecting such recommendation or 

superseding such action; and (4) the course of action that the Board decided to take contrary to 

such recommendation or action.

CHAPTER 3

PARTICIPATION

Rule 301 Jurisdiction

(a) Any Person initiating or executing a transaction on or subject to the Rules 

of the Exchange or the Clearinghouse directly or through an intermediary, and any Person 

for whose benefit such a transaction has been initiated or executed, expressly consents to 

the jurisdiction of the Exchange and the Clearinghouse and agrees to be bound by and 

comply with the Rules of the Exchange and the Clearinghouse in relation to such 

transactions, including, but not limited to, rules requiring cooperation and participation in 

investigatory and disciplinary processes. Any FCM, Introducing Broker, Associated 

Person, or foreign Person performing a similar role that charges a commission or fee in 

connection with transactions on or subject to the Rules of the Exchange or the 

Clearinghouse also expressly consent to the Exchange’s and the Clearinghouse’s

jurisdiction.

(b) Any Participant, Authorized User, Customer or Clearing Member whose 

right to access the Exchange or the Clearinghouse is revoked or terminated pursuant to 

these Rules will remain bound by the Rules and Applicable Law, in each case to the extent 

applicable, and subject to the jurisdiction of the Exchange and the Clearinghouse with 

respect to any and all matters arising from, related to, or in connection with, the status, 

actions or omissions of such Participant, Authorized User or Clearing Member prior to 

such revocation or termination.

Rule 302 Participants
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(a) Each Participant will have the right to access the Exchange, including the 

right to place Orders for each of its proprietary accounts. The access rights of a Participant 

hereunder may not be transferred, assigned, sold or leased.

(b) A Participant will not become a partner, shareholder or limited liability 

company member of the Exchange or the Clearinghouse and will not obtain any equity, 

ownership or other interest in the Exchange or Clearinghouse, including voting rights or 

rights to receive any dividends or other distributions, whether arising from a dissolution, 

merger or consolidation involving the Exchange, the Clearinghouse, or otherwise.

Rule 303 Requirements for Participants

(a) A Participant must be admitted to the Exchange and deliver an executed 

Participant Agreement. To be eligible for admission, the Participant must demonstrate to 

the Exchange that it:

(i) is of good reputation and business integrity;

(ii) complies with the financial responsibility, recordkeeping and reporting 

requirements set out in Rule 304;

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

body and, if relevant, documents of organization, to trade Contracts;

(iv) is not Insolvent;

(v) is not prohibited from using the services of the Exchange for any reason 

whatsoever;

(vi) holds all registrations required under Applicable Law, if any, including 

any FCM, Supervisory Person and/or Associated Person registration, as 

applicable;

(vii) is not subject to statutory disqualification under Section 8a(2) of the 

CEA;

(viii) satisfies any other criteria that the Exchange may require from a 

Participant.

(b) As part of the application procedure, the Exchange may request such 

information and documentation as it may reasonably require in order to determine whether 

the Exchange’s eligibility requirements have been satisfied. Any Participant organized or 

located outside of the United States shall enter into a written agreement acceptable to the 

Exchange appointing a third party as its U.S. agent for service of process for purposes of 

CFTC Rule 15.05, and shall provide the Exchange with a copy of the agreement.

(c) The Exchange may deny, condition, suspend, or terminate Participant status 
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of any entity that:

(i) is unable to satisfactorily demonstrate its ability to satisfy the eligibility 

criteria to become or remain compliant as a Participant;

(ii) is unable to satisfactorily demonstrate its capacity to adhere to all 

applicable Rules;

(iii) would bring the Exchange into disrepute as determined by the Exchange 

in its sole discretion; or

(iv) shows such other cause as the Exchange may reasonably determine.

(d) If the Exchange decides to deny or condition an applicant’s application, the 

Exchange shall promptly notify the applicant in writing to the address provided by the 

applicant on the Exchange application form.

(e) If the Participant is not itself a Clearing Member, the Participant must also 

be party to an agreement with a Clearing Member in accordance with Rule 802.

(f) A person approved as a Participant shall be subject to all of the Rules of the 

Exchange.

(g) Each applicant and each Participant agrees (i) promptly to provide, or 

procure the provision of, such information and documents as the Exchange may reasonably 

request, and (ii) that the Exchange, without being prevented by any duty of confidentiality 

by any holder of information, may obtain such information and documents from any 

Clearing Member or from the Clearinghouse.

(h) The Exchange shall grant access to independent software vendors that meet 

the requirements for Participants set out in this Rule 303.

Rule 304 Compliance with Minimum Financial Requirements, Financial Reporting 

Requirements, and Requirements Relating to Protection of Customer Funds

Participants and Clearing Members shall comply with Commission Regulations relating to 

minimum financial requirements, financial reporting requirements, and protection of customer 

funds, including Commission Regulations 38.605 and 1.52 and those Commission Regulations 

specified herein.

(a) Any Participant or Clearing Member subject to Commission Regulation 

1.10 - Financial Reports of Futures Commission Merchants and Introducing Brokers- that 

violates Commission Regulation 1.10 shall be deemed to have violated this Rule 304(a). A 

copy of any notice or written report that a Participant or Clearing Member is required to 

file with the Commission pursuant to Commission Regulation 1.10 must also be filed with 

the Exchange within the time periods proscribed for such filing or delivery in CFTC 

Regulation 1.10.
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(b) Any Participant or Clearing Member subject to Commission Regulation 

1.11 – Risk Management Program for Futures Commission Merchants- that violates 

Commission Regulation 1.11 shall be deemed to have violated this Rule 304(b). 

(c) Any Participant or Clearing Member subject to Commission Regulation 

1.12 - Maintenance of Minimum Financial Requirements by Futures Commission 

Merchants and Introducing Brokers- that violates Commission Regulation 1.12 shall be 

deemed to have violated this Rule 304(c). A copy of any notice or written report that a 

Participant or Clearing Member is required to file with the Commission pursuant to 

Commission Regulation 1.12 must also be filed with the Exchange within the time periods 

proscribed for such filing or delivery in CFTC Regulation 1.12.

(d) Any Participant or Clearing Member subject to Commission Regulation 

1.17- Minimum Financial Requirements for Futures Commission Merchants and 

Introducing Brokers- that violates Commission Regulation 1.17 shall be deemed to have 

violated this Rule 304(d). 

(e) Any Participant or Clearing Member subject to Commission Regulation 

1.18- Records for and relating to Financial Reporting and Monthly Computation by 

Futures Commission Merchants and Introducing Brokers- that violates Commission 

Regulation 1.18 shall be deemed to have violated this Rule 304(e). 

(f) Any Participant or Clearing Member subject to Commission Regulation 

1.20 – Futures Customer Funds to Be Segregated and Separately Accounted For- that 

violates Commission Regulation 1.20 shall be deemed to have violated this Rule 304(f). 

(g) Any Participant or Clearing Member subject to Commission Regulation 

1.21- Care of Money and Equities Accruing to Customers- that violates Commission 

Regulation 1.21 shall be deemed to have violated this Rule 304(g). 

(h) Any Participant or Clearing Member subject to Commission Regulation 

1.22- Use of Futures Customer Funds Restricted- that violates Commission Regulation 

1.22 shall be deemed to have violated this Rule 304(h).

(i) Any Participant or Clearing Member subject to Commission Regulation 

1.23- Interest of Futures Commission Merchants in Segregated Futures Customer Funds; 

Additions and Withdrawals- that violates Commission Regulation 1.23 shall be deemed to 

have violated this Rule 304(i). 

(j) Any Participant or Clearing Member subject to Commission Regulation 

1.24- Segregated Funds; Exclusions Therefrom- that violates Commission Regulation 1.24 

shall be deemed to have violated this Rule 304(j). 

(k) Any Participant or Clearing Member subject to Commission Regulation 

1.25- Investment of Customer Funds- that violates Commission Regulation 1.25 shall be 

deemed to have violated this Rule 304(k). 
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(l) Any Participant or Clearing Member subject to Commission Regulation 

1.26- Deposit of Instruments Purchased with Futures Customer Funds- that violates 

Commission Regulation 1.26 shall be deemed to have violated this Rule 304(l). 

(m) Any Participant or Clearing Member subject to Commission Regulation 

1.27- Record of Investments- that violates Commission Regulation 1.27 shall be deemed 

to have violated this Rule 304(m). 

(n) Any Participant or Clearing Member subject to Commission Regulation 

1.28- Appraisal of Instruments Purchased with Customer Funds- that violates Commission 

Regulation 1.28 shall be deemed to have violated this Rule 304(n). 

(o) Any Participant or Clearing Member subject to Commission Regulation 

1.29- Gains and Losses Resulting from Investment of Customer Funds- that violates 

Commission Regulation 1.29 shall be deemed to have violated this Rule 304(o).

(p) Any Participant or Clearing Member subject to Commission Regulation 

1.30- Loans by Futures Commission Merchants; Treatment of Proceeds- that violates 

Commission Regulation 1.30 shall be deemed to have violated this Rule 304(p). 

(q) Any Participant or Clearing Member subject to Commission Regulation 

1.31- Regulatory Records; Retention and Production- that violates Commission 

Regulation 1.31 shall be deemed to have violated this Rule 304(q).

(r) Any Participant or Clearing Member subject to Commission Regulation 

1.32- Reporting of Segregated Account Computation and Details Regarding the Holding 

of Futures Customer Funds- that violates Commission Regulation 1.32 shall be deemed to 

have violated this Rule 304(r).

Rule 305 Duties and Responsibilities of Participants

(a) Each Participant shall, and shall cause its Authorized Users to:

(i) access the Exchange in a responsible manner and not for any improper 

purpose;

(ii) access the Exchange only to conduct business that is subject to the Rules 

and the Requirements and in a manner consistent with the Rules and the 

Requirements;

(iii) comply with the Rules and the Exchange Requirements and act in a 

manner consistent with the Rules and the Requirements;

(iv) comply with the rules of the Clearinghouse that accepts for clearing a 

Contract traded by the Participant on the Exchange, to the extent 

applicable to such Participant and such Contract;
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(v) observe high standards of integrity, market conduct, commercial honor, 

fair dealing, and just and equitable principles of trade while conducting 

or seeking to conduct any business connected with or concerning the 

Exchange;

(vi) not knowingly mislead or conceal any material fact or matter in any 

dealings or filings with the Exchange or in connection with a 

Disciplinary Action;

(vii) cooperate promptly and fully with the Exchange in any investigation, 

inquiry, audit, examination or proceeding regarding compliance with 

the Rules or any Disciplinary Action or arbitration;

(viii) comply with any order issued by the Exchange;

(ix) employ practices to monitor and enforce compliance with risk limits 

(x) keep all User IDs, account numbers and passwords related to the 

Exchange confidential;

(xi) keep, or cause to be kept, complete and accurate books and records, 

including, without limitation, all books and records required to be 

maintained pursuant to the Applicable Law, for at least five (5) years, 

and make such books and records available for inspection by a 

representative of the Exchange, the CFTC or the U.S. Department of 

Justice; and

(xii) operate electronic trading systems and conduct activity on the Exchange 

in a manner that is reasonably intended to prevent, detect, and mitigate 

market disruptions or system anomalies associated with electronic 

trading.

(b) In addition to the requirements of Rule 305(a), each Participant shall employ 

practices to monitor and enforce compliance with its internal risk limits and shall be 

responsible for all Orders and Transactions effected on the Exchange by or for the account 

of such Participant, its Authorized Users or by any Person using its or their User IDs.

Rule 306 Authorized Users

(a) All Participants must have at least one Authorized User.

(b) A Participant who is not a natural Person must designate one of its 

employees as an Authorized User.

(c) By agreeing to become an Authorized User, an individual agrees to be 

bound by the duties and responsibilities of an Authorized User set out in Rule 307 and to 

be subject to, and comply with Applicable Law and the Rules.
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(d) To designate an Authorized User, a Participant must follow the procedures 

established by the Exchange. The Exchange may establish criteria that individuals must 

fulfill to become an Authorized User. Without limiting the generality of the foregoing, each 

Participant will ensure on an ongoing basis that (i) none of its Authorized Users is subject 

to a disqualification pursuant to any Applicable Law (unless an appropriate exemption has 

been obtained with respect thereto) and (ii) each of its Authorized Users is technically 

proficient and conducts its business in a fair and equitable manner.

(e) The Exchange will promptly notify a Participant in writing of the approval 

of designated Authorized User(s) or if the Exchange declines to approve the nomination of 

an Authorized User.

(f) The Exchange will maintain a list of all designated Authorized Users for 

each Participant.

(g) The Exchange may, in its sole discretion and/or pursuant to CEA Section 

8a(2), revoke or suspend the designation of an individual as an Authorized User and shall 

promptly notify the Participant and its Clearing Member of such action.

(h) To request the termination of the designation of an individual as an 

Authorized User, the Participant must follow the procedures established by the Exchange. 

The Exchange may, in its sole discretion, refuse to accept a request to terminate the 

registration of an Authorized User or may postpone the effective date of the termination of 

registration if the Exchange considers it necessary for the protection of the Participant or 

in the Exchange’s best interest. Based on the information provided to, and other 

information gathered by, the Exchange regarding the request to terminate the registration 

of an Authorized User, the Exchange will determine whether to:

(i) accept the request to terminate such registration;

(ii) postpone the effective date of termination of the registration; and/or

(iii) impose any terms or conditions before or after the effective date of 

termination of the registration.

Rule 307 Duties and Responsibilities of Authorized Users

(a) By agreeing to act as an Authorized User, such Person agrees to be bound 

by the duties and responsibilities of an Authorized User and to be subject to, and comply 

with, the Rules.

(b) An Authorized User must:

(i) ensure that activity conducted under its User ID complies with 

Applicable Law and the Rules;

(ii) have the authority, at the Exchange’s request, to adjust or withdraw any 
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Order submitted under such User ID;

(iii) have and maintain during all necessary regulatory approvals and/or 

licenses to operate as an Authorized User;

(iv) cooperate promptly and fully with the Exchange in any investigation, 

inquiry, audit, examination or proceeding regarding compliance with 

the Rules or any Disciplinary Action or arbitration proceeding;

(v) comply with any order issued by the Exchange; and

(vi) agree to such other terms and conditions as may be established by the 

Exchange from time to time.

Rule 308 Clearing Members Accessing the Exchange

A Clearing Member may trade an account on behalf of a Participant hereunder solely for 

the purpose of liquidating Contracts and any resulting positions previously submitted to the 

Clearinghouse for the account of such Clearing Member on behalf of a Participant that has failed 

to perform its obligations to the Exchange or such Clearing Member (to the extent applicable).

Rule 309 Required Notices

(a) Each Participant shall immediately notify the Exchange upon becoming 

aware of any of the following events:

(i) any material changes to the information provided to the Exchange by 

the Participant;

(ii) any damage to, or failure or material inadequacy of, the systems, 

facilities or equipment of the Participant used to effect Transactions on 

the Exchange;

(iii) any refusal of admission to, or withdrawal by the Participant of any 

application for membership in, any Self- Regulatory Organization;

(iv) any denial or withdrawal of an application for registration or license by 

or from any Governmental Authority, and any revocation, suspension or 

conditioning of a registration or license granted by any Governmental 

Authority;

(v) the commencement of any judicial or administrative proceeding against 

the Participant by a Governmental Authority or the imposition of any 

fine, cease and desist order, denial of trading privileges, censure or other 

sanction or remedy (whether through an adverse determination,

voluntary settlement or otherwise) imposed by any Governmental 

Authority;
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(vi) the indictment or conviction of, or any confession of guilt or plea of 

guilty or nolo contendere by, the Participant or any of its officers for any 

felony or misdemeanor involving, arising from, or related to, the 

purchase or sale of any commodity, security, futures contract, option or 

other financial instrument, or involving or arising from fraud or moral 

turpitude; and

(vii) the Insolvency of the Participant or any of its Affiliates.

(b) Each Participant that is not a natural person shall notify the Exchange at 

least ten business days prior to any merger, sale or transfer of substantially all of its assets, 

acquisition, consolidation, combination, sale or other material change of ownership.

(c) Nothing in this Rule 309 is intended to substitute for or limit any other 

reporting obligations that a Participant may have to the Exchange or any regulatory agency 

or Self-Regulatory Organization.

Rule 310 Account Administrators

(a) Each Participant shall appoint at least one Account Administrator, who shall 

(i) be responsible for monitoring the Participant’s participation on the Exchange, the 

compliance of the Participant with the Rules and communication with the Exchange, and 

(ii) be entitled to access the Exchange for risk management, audit and other back-office 

purposes as specified by the Exchange from time to time.

(b) A Participant shall promptly notify the Exchange of a change in the identity 

of any of its Account Administrators.

Rule 311 Access Requirements and Terms

(a) Access to the Exchange will be Internet-based. Participant accounts will be 

issued User IDs, passwords, and digital certificates for secure access. The Participant is 

responsible for the security of these items, and any misuse is the responsibility of the 

Participant.

(b) Certificates, User IDs, and passwords are for the Participant’s use only and 

shall not be shared with other parties.

(c) A Participant must notify the Exchange immediately upon any suspicion of 

theft of a password, User IDs or certificate, or any unauthorized access.

Rule 312 Dues and Fees

Exchange and Clearinghouse dues and fees are posted at the Website, which may be 

amended from time to time without advance notice to any person.

Rule 313 Inspections by the Exchange
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(a) The Exchange and the Regulatory Services Provider, if any, shall have the 

right, in connection with determining whether the Rules are being, will be, or have been 

complied with by the Participant, to:

(i) inspect systems, equipment and software operated by the Participant in 

connection with business that is or may be subject to the Rules, 

wherever located;

(ii) access the systems, equipment, software, and the premises on which the 

systems, equipment, and software are located, any data stored in any of 

the systems or equipment, during the regular business hours of the 

Exchange, without prior notice to the Participant; and/or

(iii) copy and/or reproduce any data to which the Exchange has access under 

this rule.

(b) Each Participant shall provide the Regulatory Services Provider with the 

same access as it would be required to provide to the Exchange.

(c) The Exchange may require a Participant to furnish such information 

concerning the Participant’s business that is subject to the Rules of the Exchange as the 

Exchange deems necessary to enable the Exchange to perform its obligations under 

Applicable Law, including information relating to (i) Contracts executed on the Exchange 

and in related derivatives markets, including in the products underlying those Contracts, 

and (ii) information requested by a Governmental Authority relating to the Exchange’s 

business as a designated contract market and/or the Exchange’s compliance with 

Applicable Law that the Exchange believes is maintained by, or otherwise in the possession 

of, a Participant.

Rule 314 Incentive Programs

At its discretion, the Exchange may offer programs that provide incentives to Participants, 

Clearing Members, and Customers willing to increase market liquidity and promote robust 

markets. These programs may offer incentives, as determined by the Exchange.

CHAPTER 4

BUSINESS CONDUCT AND TRADING PRACTICES

Rule 401 Business Conduct

(a) Regulatory Compliance. No Participant or any of its Authorized Users and 

no Clearing Member shall engage in conduct that is a violation of the CEA or CFTC Rules, 

the Rules of the Exchange or the rules of the Clearinghouse and will conduct its business 

in accordance with all applicable laws, regulations, tariffs and rules, and in good faith, with 

a commitment to honest dealing.

(b) Fraud. No Participant or any of its Authorized Users and no Clearing 
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Member shall engage or attempt to engage in any fraudulent act or engage or attempt to 

engage in any scheme to defraud, deceive, trick or mislead in connection with or related to 

any Exchange or Clearinghouse activity.

(c) Good Faith. No Participant or any of its Authorized Users shall knowingly 

enter, or cause to be entered, bids or offers into the system other than in good faith for the 

purpose of executing bona fide transactions.

(d) Transaction Integrity. Participants and their Authorized Users shall honor 

the terms and conditions of the Participant Agreement and will transact in Contracts only 

for legitimate business purposes, such as managing business risk or that otherwise have 

economic substance.

(e) Antitrust. No Participant or any of its Authorized Users and no Clearing 

Member shall collude with other market participants to affect the price or supply of any 

commodity or Contracts, or otherwise unlawfully restrain competition.

(f) Risk Management. Participants and Clearing Members shall adopt, adhere 

to and enforce risk management and other policies and structures that are designed to 

ensure that trading activities are conducted in accordance with the Rules.

Rule 402 General Trading Practices

(a) Skills. Each Participant and Authorized User is responsible for 

understanding all factors that influence the markets in Contracts in order to maintain a high 

level of competence in its trading. 

(b) Rules. The Exchange will provide updates and amendments to these Rules 

and notices or advisories regarding the application and interpretation of these Rules. It is 

the obligation of each Participant and its Authorized User to ensure these documents are 

read and understood. It shall be prohibited for a Participant and its Authorized Users to 

violate any Rule or any agreement made with the Exchange, or to engage in fraud, 

dishonorable or dishonest conduct, or conduct which is inconsistent with just and equitable 

principles of trade, even where a Rule does not specifically reference “Participant” or 

“Authorized User.”

(c) Price Manipulation, Fictitious, Non-Competitive or Artificial Transactions.

No Participant or Authorized User shall (i) effect or induce (or attempt to effect or induce) 

the purchase or sale of any Contract for the purpose of creating or inducing a false, 

misleading, or artificial appearance of activity in such Contract, or for the purpose of 

unduly or improperly influencing the market price of such Contract or for the purpose of 

making a price which does not reflect the true state of the market in such Contract, (ii) 

effect or induce (or attempt to effect or induce) any conduct proscribed by CEA section 

9(a)(2) in any Contract. No Participant or Authorized User shall arrange and execute 

simultaneous offsetting buy and sell Orders in a Contract with the intent to artificially affect 

reported revenues, trading volumes or prices.
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(d) Market Manipulation. No Participant or Authorized User shall (i) attempt 

to manipulate or manipulate the market in any Contract or (ii) engage in any conduct 

proscribed by CEA section 9(a)(2). No Participant or Authorized User shall directly or 

indirectly participate in or have any interest in the profit of a manipulative operation or 

knowingly manage or finance a manipulative operation. This includes any pool, syndicate, 

or joint account, whether in corporate form or otherwise, organized or used intentionally 

for the purposes of unfairly influencing the market price of any Contract.

(e) Market Disruption. Orders entered on the Exchange for the purpose of 

upsetting the equilibrium of the market in any Contract or creating a condition in which 

prices do not or will not reflect fair market values are prohibited, and any Participant or 

Authorized User who makes or assists in entering any such Order with knowledge of the 

purpose thereof or who, with such knowledge, in any way assists in carrying out any plan 

or scheme for the entering of any such Order, will be deemed to have engaged in an act 

detrimental to the Exchange.

(f) Disruptive Trading Practices.

(i) No Participant or Authorized User shall knowingly enter, or cause to 

be entered, bids, or offers into the Trading Platform other than in good 

faith for the purpose of executing bona fide transactions.

(ii) No Participant or Authorized User shall enter an order or market 

message, or cause an order or market message to be entered, with:

(A)The intent to cancel the order before execution, or modify the 

order to avoid execution;

(B) The intent to mislead other market participants;

(C) The intent to overload, delay, or disrupt the systems of the 

Exchange or other market participants;

(D)The intent to disrupt the orderly conduct of trading, or the fair 

execution of transactions; and/or

(E) Reckless disregard for the adverse impact of the order or market 

message.

(iii) No Participant or Authorized User shall knowingly enter any bid or 

offer for the purpose of making a market price which does not reflect 

the true state of the market, or knowingly enter, or cause to be entered 

bids or offers other than in good faith for the purpose of executing bona 

fide transactions.

(g) Prohibition on the Use or Attempted use of Manipulative and Deceptive 

Devices. No Participant, Authorized User or Clearing Member shall:
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(i) use or employ, or attempt to use or employ, any manipulative device, 

scheme, or artifice to defraud;

(ii) make, or attempt to make, any untrue or misleading statement of a 

material fact or to omit to state a material fact necessary in order to 

make the statements made not untrue or misleading;

(iii) engage, or attempt to engage, in any act, practice, or course of 

business, which operates or would operate as a fraud or deceit upon 

any person; or

(iv) deliver or cause to be delivered, or attempt to deliver or cause to be 

delivered a false or misleading or inaccurate report concerning market 

information or conditions that affect or tend to affect the price of any 

commodity in interstate commerce, knowing, or acting in reckless 

disregard of the fact that such report is false, misleading or inaccurate. 

Notwithstanding the foregoing, no violation of this subsection shall 

exist where the person mistakenly transmits, in good faith, false or 

misleading or inaccurate information to a price reporting service.

(h) Gratuities. Except with the prior written approval of the Chief Regulatory 

Officer, no Participant, Authorized User or Clearing Member shall, directly or indirectly, 

give or permit to be given anything of value, including gifts and gratuities, to an Official

in an amount that exceeds the maximum value permitted by the Exchange and the 

Clearinghouse gifts and entertainment policy.

(i) Rumors. No Participant, Authorized User or Clearing Member shall 

knowingly circulate, in any manner, rumors of a character which might affect market 

conditions in any Contract; provided, however, that this shall not prohibit discussion of 

unsubstantiated information, so long as its source and unverified nature are disclosed.

(j) False Reports. No Participant, Authorized User or Clearing Member shall 

make any knowing misstatement of a material fact to the Exchange, the Clearinghouse, any 

Official, or any Board committee or panel. 

(k) Wash Sales. No Participant or Authorized User shall place or accept buy 

and sell Orders in the same product and expiration month, where known or reasonably 

should know that the purpose of the Orders is to avoid taking a bona fide market position 

exposed to market risk (transactions commonly known or referred to as wash sales). Buy 

and sell Orders by Participants or Authorized Users that are entered with the intent to negate 

market risk or price competition shall be deemed to violate the prohibition on wash trades. 

Additionally, no Participant or Authorized User shall knowingly execute or accommodate 

the execution of such Orders by direct or indirect means.

(l) Financial Condition. No trading will be conducted for the purpose of 

misrepresenting the financial condition of a Participant or Authorized User.
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(m) Acts Detrimental to the Exchange or the Clearinghouse. No Participant,

Authorized User or Clearing Member shall engage in any act that is detrimental to the 

Exchange or the Clearinghouse. 

(n) Misuse of the Exchange or the Clearinghouse. No Participant, Authorized 

User or Clearing Member shall permit the unauthorized use of the Exchange or the 

Clearinghouse, to assist any Person in obtaining unauthorized access to the Exchange or 

the Clearinghouse, to trade on the Exchange without an agreement and an established 

account with a Clearing Member, to alter the equipment associated with the Exchange or 

the Clearinghouse (except with the Exchange or the Clearinghouse written consent), to 

interfere with the operation of the Exchange or the Clearinghouse, to intercept or interfere 

with information provided thereby, or in any way to use the Exchange or the Clearinghouse

in a manner contrary to the Rules.

(o) Supervision. A Participant shall establish, maintain and administer 

reasonable supervisory procedures to monitor the compliance of Authorized Users and 

supervised persons with the Rules and any applicable provisions of the CEA and CFTC 

Rules and such Participant may be held accountable for the actions of such Authorized 

Users or supervised persons.

(p) Disclosing Order Information. No Participant or Authorized User shall 

disclose an Order to buy or sell, except to a designated Exchange Official or the CFTC or 

as necessary to efficiently execute the Order nor shall any Participant solicit or induce 

another Participant or Authorized User to disclose Order information. No Person shall take 

action or direct another to take action based on non-public Order information, however 

acquired. The mere statement of opinions or indications of the price at which a market may 

open or resume trading does not constitute a violation of this rule.

Rule 403 Pre-Arranged, Pre-Negotiated and Noncompetitive Trades Prohibited

(a) No Person shall prearrange or pre-negotiate any purchase or sale or 

noncompetitively execute any Transaction, except as provided in Rule 403(b).

(b) Participants and Authorized Users may engage in pre-execution 

communications with regard to transactions executed or to be executed on the Exchange if 

one party (the first party) wishes to be assured that a contra party (the second party) will 

take the opposite side of the first party’s Order, subject to the following restrictions:

(i) A party may not engage in pre-execution communications with other 

market participants on behalf of another party unless the party for whose 

benefit the trade is being made has previously consented to permit such 

communications.

(ii) Parties to pre-execution communications shall not disclose to a nonparty the details of such communications or enter an Order to take 

advantage of information conveyed during such communications except 

in accordance with this rule.
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(iii) The first party’s Order must be entered into the Exchange first, and the 

second party’s Order may not be entered into the Exchange until a 

period of fifteen (15) seconds has elapsed from the time entry of the first 

Order.

Rule 404 Disciplinary Procedures; Termination of Connection

(a) All access denials, suspensions, expulsions, and other restrictions imposed 

upon a Participant or any of its Authorized Users or a Clearing Member by the Exchange

or the Clearinghouse pursuant to a Disciplinary Action shall restrict with equal force and 

effect, access to, and use of, the Exchange or the Clearinghouse.

(b) The Exchange, at its sole discretion, shall have the right to summarily 

terminate the connection of any Participant or the access of any Trading Account or User 

ID to the Exchange. Additionally, the Exchange, at its sole discretion, shall have the right 

to direct a Participant to immediately terminate access to the Exchange any of such 

Participant’s Authorized Users.

Rule 405 Position Limits

(a) The Exchange may adopt and require Participants to adhere to position 

limits for Contracts. If so adopted, the Exchange may, in its sole discretion, grant 

exemptions from position limits for bona fide hedging transactions and positions in 

accordance with CFTC Rules. A Person seeking an exemption from position limits must 

apply to the Compliance Department in the form and manner required by the Exchange.

(b) The CFTC may also from time to time establish position limits for Contracts 

traded pursuant to these Rules. For any such Contract subject to a position limit set by the 

CFTC, the Exchange shall not set its position limit at a level higher than the CFTC’s limit.

(c) The position limit levels for those Contracts with position limits are set forth 

in the product rules.

Rule 406 Position Accountability

A Person who holds or controls aggregate positions in a Contract in excess of the position 

accountability levels relating to that Contract set out in the product rules shall be subject to the 

following provisions:

(a) Such Person shall provide, in a timely manner upon request by the 

Compliance Department, information regarding the nature of the position, trading strategy, 

and hedging information if applicable.

(b) Such Person shall, if so ordered by the Compliance Department, acting in 

its discretion, liquidate or not increase further the positions which exceed such levels.

(c) Such positions must be initiated and liquidated in an orderly manner.
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(d) This Rule shall not limit the jurisdiction of the Exchange or the 

Clearinghouse to take action that it determines necessary or appropriate in respect of any 

positions on the Exchange or the Clearinghouse.

Rule 407 Reports of Large Positions

(a) Upon request, Clearing Members must provide the Compliance Department 

with information, in a form and manner acceptable to the Compliance Department,

identifying the owner, any controlling parties and any additional required information for 

each reportable account.

(b) Each Clearing Member shall submit to the Exchange (i) a daily report of all 

positions that exceed the reportable position levels set forth in the product rules and (ii) a 

copy of the CFTC Form 102 filed by the Participant or Clearing Member with the CFTC 

for such Participant’s or Clearing Member’s Customers’ reportable accounts. The Form 

102 shall be submitted to the Exchange no later than the Business Day following the date 

on which the account becomes reportable.

(c) Positions in Exchange products at or above the reportable level set forth in 

the product rules trigger reportable status. For a Participant in reportable status, all 

positions, regardless of size, in relevant Exchange products must be reported to the 

Exchange, in addition to any regulatory obligations a Participant may have separate and 

apart from these Rules.

Rule 408 Aggregation of Positions

For purposes of Rule 405, Rule 406 and Rule 407, positions in Contracts shall be 

aggregated in accordance with CFTC Rules.

Rule 409 Reporting Levels, Position Accountability Levels and Position Limits

The reporting levels, position accountability levels and position limits for Contracts are 

found in the product rules.

Rule 410 Information Disclosure and Documentation

Markets depend on trust in the accuracy of market information provided by Participants 

and Clearing Members and in the transparency of market behavior of all market participants.

Participants and Clearing Members will act in accordance with these practices for 

information disclosure and documentation with regard to its Exchange or Clearinghouse activity:

(a) Provide information relating to Contracts to regulators in compliance with 

all applicable rules and requirements and continue to cooperate with regulators as 

reasonably necessary to assist in their understanding of the markets.

(b) Ensure that any information disclosed to the Exchange or the Clearinghouse
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is accurate and consistent. No existing or prospective Participant or Clearing Member shall 

make any false statements or misrepresentations in any application, report or other 

communication to the Exchange or the Clearinghouse.

Rule 411 Compliance

Each Participant will have a compliance program commensurate with the size and scope 

of its trading activities on the Exchange and designed to ensure appropriate, timely and ongoing 

review of trading practices and compliance with the Rules.

Participants and Clearing Members will act in accordance with these practices for 

compliance and monitoring with regard to its Exchange and Clearinghouse activity:

(a) Provide for proper training of personnel on the provisions of the Rules.

(b) Maintain internal policies and procedures to promote compliance with the 

Rules.

(c) Promptly disclose to the Exchange the details of any violations of the Rules 

involving Participant’s activities on the Exchange or provision of market information to 

the Exchange or any of its Affiliates.

(d) Provide an environment that encourages employees within the Participant’s

or Clearing Member’s organization to engage in safe and confidential discussions and to 

disclose to senior management any trading practices that might violate the Rules.

(e) Require any consultant, contractor and/or subcontractor to disclose all 

financial affiliations and conflict of interests with Participants, Clearing Members, the 

Exchange, the Clearinghouse and its affiliates. Ensure that consultants, contractors or 

subcontractors do not cause any disclosure of information in violation of any Rule and that 

confidentiality agreements are in effect where appropriate.

(f) Establish clear lines of accountability for the Participant’s or Clearing 

Member’s trading practices, including provisions relating to the responsibilities of 

corporate officers, with appropriate oversight by the Participant’s or Clearing Member’s 

board of directors or other senior corporate management committee.

CHAPTER 5

MARKET OPERATIONS

Rule 501 Market Hours and Operation

(a) Market Hours. The Exchange and the Clearinghouse will be open for trading 

on all business days during the market hours specified in the trading calendar, which is 

available at the Website.

(b) Procedures. With respect to trading on or through the Exchange, the 
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Exchange and the Clearinghouse may adopt, without limitation, procedures relating to 

Transactions in Contracts and trading on the Exchange, including procedures to:

(i) disseminate the prices of bids and offers and the prices of trades in 

Contracts;

(ii) record and account for Contracts;

(iii) perform market surveillance and regulation on matters affecting 

Contracts;

(iv) establish limits on the number and/or size of Orders that may be 

submitted by a Participant or Authorized User to the Exchange;

(v) establish position limits on the number of Contracts that can be held by 

a Participant or customer on the Exchange;

(vi) establish limits on the number of messages a Participant can send to the 

Exchange for a Contract in a given time frame;

(vii) establish a limit on the maximum daily price fluctuations for any 

Contracts and provide for any related restriction or suspension of trading 

in such Contracts; and

(viii) require a suspended or expelled Participant, or a Participant with 

restricted trading rights, to cause Contracts to be executed for such 

Participant’s account to reduce or eliminate such Participant’s open 

positions.

(c) Market Suspension and Emergencies. The Exchange and the Clearinghouse

reserve the right to adjust Trading Hours and suspend market activities for all or a subset 

of Contracts in the case of extenuating market circumstances which include, but are not 

limited to, any occurrence or circumstance which threatens or may threaten such matters 

as the fair and orderly trading in, or the liquidation of or delivery pursuant to, any Contracts, 

and which is determined by the Exchange to require immediate action.

During an Emergency, the Board may implement temporary emergency procedures 

and rules (“Emergency Rules”), subject to the applicable provisions of the CEA and CFTC 

Rules. Emergency Rules may require or authorize the Exchange, the Clearinghouse, the 

Board, any committee of the Board, the Chief Executive Officer or, in his or her absence, 

any other Officer to take actions necessary or appropriate to respond to the Emergency, 

including, but not limited to, the following actions:

(i) suspending or curtailing trading or limiting trading to liquidation only 

(in whole or in part);

(ii) extending or shortening the last trading date for Contracts;
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(iii) providing alternative settlement mechanisms;

(iv) ordering the liquidation or transfer of Transactions, the fixing of a 

Settlement Price, or the reduction of positions;

(v) extending, limiting or changing the Trading Hours;

(vi) temporarily modifying or suspending any provision of the Rules;

(vii) requiring Participants to meet special margin requirements;

(viii) imposing or modifying trading limits, price limits and/or position limits; 

and/or

(ix) any other action as directed by the CFTC.

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

Board must approve the enforcement of such Emergency Rule at a duly convened meeting. 

Directors may attend such a meeting by teleconference. If the Chief Executive Officer, or 

another authorized Officer, determines that Emergency Rules must be implemented with 

respect to an Emergency before a meeting of the Board can reasonably be convened, then 

the Chief Executive Officer or such Officer shall have the authority, without Board action, 

to implement any Emergency Rules with respect to such Emergency that he or she deems 

necessary or appropriate to respond to such Emergency. In such circumstances, the Chief 

Executive Officer or such Officer must convene a meeting as soon as practicable.

Whenever the Exchange, the Clearinghouse, the Board, any committee of the 

Board, the Chief Executive Officer or authorized Officer takes actions necessary or 

appropriate to respond to an Emergency a duly authorized representative of the Exchange

or the Clearinghouse, where possible, will post an announcement in a notice to Participants

and Clearing Members. When the Board, any committee of the Board, the Chief Executive 

Officer or other authorized Officer determines that the Emergency has been reduced 

sufficiently to allow the Exchange and the Clearinghouse to resume normal functioning, 

any such actions responding to an Emergency will be terminated.

The Exchange or the Clearinghouse, as applicable, will notify the CFTC prior to 

implementing, modifying or terminating an Emergency Rule. If such prior notification is 

not practicable, the Exchange or the Clearinghouse, as applicable, will notify the CFTC at 

the earliest possible time after implementation, but in no event more than twenty-four hours 

after implementation.

Upon taking any action in response to an Emergency, the Exchange or the 

Clearinghouse, as applicable, will document the decision-making process related to such 

action. Such documentation will be kept for at least five (5) years following the date on 

which the Emergency ceases to exist or to affect the Exchange or the Clearinghouse, as 

applicable, and all such documentation will be provided to the CFTC upon request.
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Rule 502 Contracts Offered

(a) Contracts/Expiries. Contract Specifications are set forth on the Website. 

Contract Specifications are subject to revision or amendment from time to time. Revised 

Contract Specifications may be listed for trading by self-certification in accordance with 

CFTC Rule 40.2, sent electronically to the CFTC for receipt by the open of business on the 

business day preceding the contract’s listing, which shall include: (i) a description of the 

Contract and its rules related to its terms and conditions, (ii) the intended listing date, (iii) 

certification by the Exchange that the Contract to be listed complies with the CEA and the 

CFTC Rules thereunder, (iv) a concise explanation and analysis of the product and its 

compliance with applicable provisions of the CEA, including core principles, and the 

CFTC Rules thereunder, including supporting documentation, and (v) certification that the 

Exchange posted a notice of pending product certification with the Commission on its 

Website with a copy of the submission, with confidential treatment requests as appropriate.

The Exchange will permit trading only in Contracts that are not readily susceptible to 

manipulation.

(b) To offer new products, the Exchange may request that the CFTC approve a 

new product prior to listing the product for trading. The submission to the CFTC shall be 

filed electronically in accordance with CFTC Rules 40.3 and include: (1) a description of 

the product with the rules that set forth the Contract’s terms and conditions, (2) an 

explanation and analysis of the product and its compliance with applicable provisions of 

the CEA, including core principles, and the CFTC Rules thereunder, including 

documentation relied upon to establish the basis for compliance with the applicable law, or 

incorporate information contained in such documentation, with appropriate citations to data 

sources, (3) description of any agreements or contracts entered into with other parties that 

enable the Exchange to carry out its responsibilities, (4) certification that the Exchange 

posted on its Website a notice of its request for CFTC approval of the new product with a 

copy of the submission, (5) a request for confidential treatment as permitted under CFTC 

Rule 40.8, if appropriate, and (6) the filing fee required in accordance with CFTC Rules. If 

requested by CFTC staff, the Exchange will provide evidence, information or data 

demonstrating that the Contract meets, initially or on a continuing basis, the requirements 

of the CEA, or other requirements for designation or registration under the CEA or the 

CFTC Rules thereunder. The Exchange shall submit the requested information by the open 

of business on the date that is two business days from the date of request by CFTC staff, or 

at the conclusion of such extended period agreed to by CFTC staff after timely receipt of a 

written request from the Exchange.

Rule 503 User IDs

(a) Each Participant must request one or more Trading Account ID as needed 

to accommodate the nature and volume of the Participant’s business.

(b) Each Participant and its Authorized Users must have a unique, Exchangeassigned, registered User ID.
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(c) Each Order entered will track to a User ID that identifies the Authorized 

User that entered the Order.

(d) 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 the unauthorized use of a User 

ID. Each Participant and Authorized User shall ensure that no User ID is used by any 

Person not authorized by these Rules. Each Participant that is not an individual must have 

in place policies and procedures acceptable to the Exchange to ensure the proper use and 

protection of User IDs.

(e) Each Participant shall ensure the accuracy of the registration information of 

its Authorized Users at all times.

(f) Each Participant shall be solely responsible for controlling and monitoring 

the use of all User IDs issued to it and its Authorized Users of the Exchange.

(g) Each Participant shall notify the Exchange promptly upon becoming aware 

of:

(i) any unauthorized disclosure or use of any User ID assigned to it or any 

of its Authorized Users and of any other reason for deactivating a User 

ID; and

(ii) any unauthorized access to the Exchange by any Authorized User or by 

any Person using a User ID assigned to such Participant or Authorized 

User.

(h) Each Participant and its Authorized Users shall be bound by any actions 

taken through the use of a User ID assigned to such Participant or Authorized User (other 

than any such actions resulting from the fault or negligence of the Exchange), including 

the submission of Orders and/or execution of Transactions, whether or not such actions 

were taken or authorized by such Participant or Authorized User, as the case may be.

(i) Each Participant must be able to identify all Orders submitted under an

Authorized User’s respective User ID at all times.

Rule 504 Exchange Trading

(a) Order Requirements. To be valid, an Order must consist of the following 

information:

(i) Contract: The Order must be submitted for a Contract for which Orders 

may be placed.

(ii) Order ID: Must be present for identification purposes.

(iii) Side: Must be either buy or sell.
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(iv) Quantity: Number of Contracts to be traded. Must be a positive integer 

greater than zero and less than maximum Order Quantity as defined in 

Contract Specifications.

(v) Price: As defined by Contract Specification. 

(vi) Time-In-Force: Day or Immediate-or-Cancel (“IOC”). Day orders are 

cancelled at the end of the day’s trading session. IOCs are Orders that 

are immediately executed against resting Orders. If the Order cannot be 

fully filled, the remaining Quantity is cancelled

(b) Order Types. The following types of Orders are allowed on the 

Exchange.

(i) Limit Order. Allows the buyer to define the maximum purchase Price

and the seller to define the minimum sale Price for a Contract. If any 

portion of the Order can be matched, it will be immediately executed. 

Buy Limit Orders will only be executed at or below the limit Price. Sell 

Limit Orders will only be executed at or above the limit Price. If a Limit 

Order is not immediately executed, it will remain in the book at the limit 

Price until the Order is either executed, cancelled, or expires at the end 

of the trading session.

(c) Submission. Submission of an Order to the Trading Platform constitutes a 

representation by the submitting Participant that it is acting as principal in respect of such 

Order. Orders may be submitted to the Trading Platform via the API.

The Exchange reserves the right to temporarily or permanently defer processing 

Orders that may interfere with the proper functioning of the Exchange. For previously 

submitted Orders, additional validation checks may be run to ensure that the Order contents

are still valid and that the submitting Participant has not been suspended.

The Exchange may not offer all Contracts and Expiries in a particular Contract. 

(d) Order Modification. Previously submitted Orders can be modified at any 

time prior to the Order being fully filled. 

(e) Order Cancellation.

(i) Orders can be cancelled at any time prior to being fully filled. Once an 

Order has been fully filled, an Order cannot be cancelled.

(ii) Orders can be cancelled individually through the API.

(f) Order Submission Period. The Exchange will accept Orders in the time 

period defined in the respective Contract Specification. The Exchange reserves the right to 

modify this schedule. All submissions, modifications or cancellations will receive 
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acknowledgement after Exchange processing if they have been accepted.

(g) Trade Matching. The Trade Matching Engine matches and fills Orders using 

a central limit order book (“CLOB”) and a price-time priority algorithm. In the event of 

matching Orders with identical prices, Quantity is filled on a first-in-first-out (FIFO) basis.

(h) Clearing. All matched trades generated by the Trade Matching Engine after 

the application of trade risk limits give rise to binding Exchange Transactions between the 

applicable Participants, which will be automatically submitted to the Clearinghouse for 

registration and novation, as described in Chapter 8 and 9 of these Rules. Further 

description of Clearinghouse procedures and rules can be found in the Clearinghouse

rulebook. The Exchange reserves the right to cancel erroneous trades submitted to the 

Clearinghouse in accordance with Rule 508.

(i) Trading Information. The Exchange shall make public daily information on 

settlement prices, volume, open interest, and opening and closing ranges for actively traded 

contracts on the contract market. Trading information will be published on the Exchange 

Website at the end of the day.

Rule 505 Block Trades 

(a) The Exchange shall designate the Contracts in which Block Trades shall be 

permitted and determine the minimum block size for such transactions. Block sizes will be 

posted on the Website.

(b) The following rules shall govern Block Trades:

(i) A Block Trade must be for a quantity that is at or more than the 

applicable minimum threshold. Orders may not be aggregated to 

achieve the minimum transaction size unless expressly permitted 

under Applicable Law.

(ii) Each Participant entering into a Block Trade must be an Eligible 

Contract Participant, as defined by the CEA, and approved for Block 

Trading by the Exchange. Each Participant must have a separate and 

independent bona fide business purpose for entering a Block Trade.

(iii) The price at which a Block Trade is executed must be fair and 

reasonable in light of (i) the size of the Block Trade, (ii) the prices and 

sizes of other transactions in the same contract at the relevant time, 

(iii) the prices and sizes of transactions in other relevant markets, 

including the underlying cash market and related futures markets, at 

the relevant time, and (iv) the circumstances of the markets or the 

Participants to the Block Trade.

(iv) Block Trades shall not affect Orders on the Exchange’s regular market.
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(v) Parties to a Block Trade must ensure that each Block Trade is 

submitted without delay upon execution of the trade, in no event later 

than fifteen (15) minutes after execution via web platform. The 

submission must include the Contract(s), contract month(s), price, 

quantity of the Transaction, time of execution, the respective Clearing 

Member, as well as any other information that the Exchange may 

require. The Exchange shall promptly publish price and volume 

information separately from the reports of Exchange transactions.

(vi) Participants involved in the execution of Block Trades must maintain 

electronic records of all such Block Trades, including an electronic 

timestamp reflecting the date and time each such Order was received 

as well as an electronic timestamp reflecting the date and time such 

Order occurred or was cancelled.

(c) Trade Entry. Block Trades must be submitted via web platform, where both 

approved Participants must confirm the Block Trades, specifying the identical Expiry(s) to 

be traded, the quantity and price, and the buyer and seller.

(d) Modification and Cancelation. Block Trades submitted during the 

Exchange’s Trading Hours, and up to fifteen (15) minutes thereafter, are subject to 

immediate confirmation by the Exchange and may not be modified or cancelled. If 

erroneous information has been submitted as part of a Block Trade, the Exchange should 

be notified as soon as the error is detected. If appropriate, the Exchange will facilitate the 

modification of the trade on a discretionary basis; any trade modification the Exchange 

agrees to submit to the Clearinghouse will be done during normal Trading Hours.

(e) Risk Limit Validation and Clearing. All Block Trades will be subject to the 

Exchange’s risk controls. Upon verification, the Block Trade will be submitted to the 

Clearinghouse for novation. The Exchange will make available, via a web interface, 

confirmation that the Block Trade has been accepted.

Rule 506 Exchange for Related Position [Reserved]

Rule 507 Position Transfers

The Exchange may permit transfer trades to move positions between Trading Accounts for 

administrative purposes (“Position Transfers”) where no change in ownership is involved. 

Participants and Clearing Members must obtain approval from the Exchange for a Position 

Transfer; such approval to be granted at the sole discretion of the Exchange. Position Transfers 

will not contribute to any reported volume, price, or trading range.

Rule 508 Trade Cancellations; Trade Reviews

(a) Trade Cancellation Authority. The Exchange may adjust trade prices or 
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cancel (bust) trades when such action is necessary to mitigate market disrupting events 

caused by the improper or erroneous use of the Exchange or by system defects or 

malfunctions. Notwithstanding any other provision of this Rule 508(a), the Exchange may 

adjust trade prices or cancel any trade if the Exchange determines that allowing the trade 

to stand as executed may have a material, adverse effect on the integrity of the market. Any 

decision of the Exchange with respect to an adjustment or cancellation subject to this Rule 

508(a) shall be final.

(b) Review of Trades. The Exchange may review a trade based on its analysis 

of market conditions or a request for review by a user of the Exchange. A request for review 

must be made within five minutes of the execution of the trade. The Exchange shall 

promptly determine whether the trade will be subject to review, and upon deciding to 

review a trade, the Exchange will promptly issue an alert to all Participants on the Exchange 

indicating that the trade is under review. In the case of Contracts determined by the

Exchange to be illiquid, the Exchange may initiate a review up to one hour after the 

execution of the trade, and has the authority, but not the obligation, to review trades 

reported more than one hour following execution if it determines that the trade price was 

significantly out of line with fair value. In the course of its review of any trade, the 

Exchange may, but is not obligated to, inform any of the parties to the trade of the identity 

and contact information of any other party to the trade.

Rule 509 Settlement

(a) Daily Settlement. The Exchange will provide the Clearinghouse with 

Settlement Prices once per day. The Daily Settlement price shall be determined at the end 

of the Daily Settlement Period as defined by the Contract Specification.

(b) Final Settlement. The Exchange will provide the Clearinghouse with the 

Final Settlement Prices at the end of the Final Settlement Period on the expiration day of 

the Contract. Settlement Prices will be calculated as defined by the Contract Specification. 

The Exchange reserves the right to adjust Daily and Final Settlement Prices as it 

deems necessary based on current market conditions or otherwise.

Rule 510 Recordkeeping; Audit Trail

(a) Each Clearing Member and Participant that accesses the Exchange 

electronically is responsible for maintaining or causing to be maintained a front-end audit 

trail for all electronic Orders, which shall include Order entry, modification, and 

cancellation (the “Audit Trail”) entered into the Bitnomial System by the Participant for 

which the Clearing Member is identified in the order or quote submission as the Clearing 

Member for the execution of the order or quote, including all related modifications and 

cancellations.

(b) Such Audit Trail shall include Orders submitted and the times of Order entry 

and of any Order modification or cancellation. Times that are so captured must not be 

capable of being modified by the Person entering the Order and must reflect all necessary 
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data fields specified by the Exchange from time to time. For executed Orders, the Audit 

Trail must record the execution time of the trade along with all award information.

(c) Each Clearing Member and Participant shall maintain such Audit Trail 

information for a minimum of five (5) years and must have the ability to produce Audit 

Trail data in a standard format upon request of the Exchange. Notwithstanding anything to 

the contrary herein, each Participant is required to comply with the provisions of 

Commission Regulation §1.35 as applicable to that Participant.

Rule 511 Information Regarding Orders

(a) The Exchange will make information regarding Orders (including prices bid 

or offered), trades and any other matters it may deem appropriate available to Participants 

and other Persons at such times and in such manner (whether through the Exchange, 

financial information services or otherwise) as it may consider necessary or advisable from 

time to time.

(b) Each Participant or other Person receiving any such information referred to 

in Rule 511(a) above shall not redistribute such information other than to the extent and in 

the manner as may be expressly permitted by the Exchange in writing from time to time.

Rule 512 Disaster Recovery; Business Continuity

(a) Each Participant and Clearing Member shall have written disaster recovery 

and business continuity policies and procedures in place to ensure it is able to perform 

certain basic operational functions in the event of a significant internal or external 

interruption to its operations. At a minimum, the following areas must be addressed in the 

Participant’s or Clear Member’s policies and procedures:

(i) each Participant and Clearing Member must have procedures in place to 

allow it to continue to operate during periods of stress or to transfer 

accounts to another fully operational Participant or Clearing Member

with minimal disruption to the Exchange and the Clearinghouse.

(ii) each Participant and Clearing Member must perform periodic testing of 

disaster recovery and business continuity plans, duplication of critical 

systems at back up sites and periodic back-up of critical information and 

provide the Exchange or Clearinghouse with information regarding the 

foregoing upon request; and

(iii) each Participant and Clearing Member must maintain and, at the request 

of the Exchange or the Clearinghouse, provide accurate and complete 

information for its key personnel. Each Participant and Clearing 

Member must inform the Exchange or Clearinghouse in a timely manner 

whenever a change to its key personnel is made.

(b) The Exchange or the Clearinghouse may prescribe additional and/or
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alterative requirements for a Participant’s or Clearing Member’s compliance with this 

rule.

Rule 513 Exchange Messaging Policy

The Exchange enforces a Messaging Policy that limits the number of messages a 

Participant can submit to the API as defined by the Contract Specifications.

Rule 514 Self-Match Prevention

The Exchange enforces Self-Match Prevention (“SMP”) to protect against self-trading that 

violates the Exchange’s Wash Trade prohibition set out in Rule 402(j). SMP prevents the matching 

of orders with the same Trading Account ID. The Exchange reserves the right to change behavior 

of SMP from time to time.

CHAPTER 6

DISCIPLINE AND ENFORCEMENT

Rule 601 Disciplinary and Enforcement Procedures – General

 All Participants, their Authorized Users, Clearing Members and any Person for whose 

benefit a transaction has been initiated or executed, are subject to Exchange and Clearinghouse 

jurisdiction. Any Participant or any other person using any of its User IDs that are alleged to have 

violated, to have aided and abetted a violation, to be violating, or to be about to violate, any Rule 

of the Exchange or Clearinghouse or applicable law for which the Exchange or Clearinghouse 

maintains disciplinary jurisdiction is subject to this Chapter 6. No Official will interfere with or 

attempt to influence 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 (collectively, “Disciplinary Action”), except to the extent provided under 

Exchange or Clearinghouse Rules with respect to a proceeding in which the director is a member 

of the relevant Board of Appeals. A Participant or Clearing Members shall be entitled to appear 

personally and may be represented by counsel during any Disciplinary Action pursuant to this 

Chapter 6.

Rule 602 Process Considerations

(a) Compliance Department. The Compliance Department is appointed and 

authorized by the Chief Executive Officer of the Exchange to provide market surveillance,

investigation and enforcement of trading activities on the Exchange to ensure compliance 

with Exchange and Clearinghouse Rules and applicable laws. The Compliance Department

has three primary functions:

(i) The Surveillance Team is responsible for real-time and post-trade 

surveillance of the Exchange’s trading systems. Members of the 

Surveillance Team respond to real-time alerts to ensure the integrity of 

the markets. The Surveillance Team identifies actions or omissions that 
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may indicate a possible basis for finding that a violation of Exchange or 

Clearinghouse Rules has occurred or will occur.

(ii) Investigations and enforcement are conducted by the Investigation 

Team. The Investigation Team is comprised of Exchange employees 

and/or persons hired on a contract basis, except for Exchange 

Participants, Clearing Members or other Persons whose interests 

conflict with enforcement duties. The Investigation Team may not 

operate under the direction or control of any person(s) with trading 

privileges. The Investigation Team is authorized, among other things,

to:

1) initiate and conduct investigations;

2) prepare investigative reports and make recommendations 

concerning initiating disciplinary proceedings, including any 

charges to be issued;

3) participate in settlement discussions with respondents and

recommend settlement sanctions to the Disciplinary Committee; 

and

4) prosecute alleged violations within the Exchange’s or 

Clearinghouse’s disciplinary jurisdiction.

(iii) The Disciplinary Committee is appointed by the Board at the 

recommendation of the Chief Regulatory Officer and shall be comprised

of not less than three individuals from among Participants, Clearing 

Members and other Persons with knowledge and experience in the 

financial markets, who are not involved in the conduct giving rise to the 

alleged Rule violations.

(b) Third-Party Enforcement. The Exchange or Clearinghouse may delegate 

any of its rights and responsibilities herein to a Regulatory Services Provider.

(c) Expense Liability. At the discretion of the Exchange, any Participant or 

Clearing Member found in violation of the Rules may be required to pay to the Exchange 

any and all expenses incurred as a result of the investigation of the violation and 

prosecution of the Participant or Clearing Member. This assessment is in addition to any 

monetary fines imposed for the Rule violation(s).

Rule 603 Disciplinary Matters

(a) Investigations. The Investigation Team will investigate any matter within 

the Exchange or Clearinghouse’s jurisdiction of which it becomes aware. The Investigation 

Team will commence an investigation upon the receipt of a request from Commission staff 

or upon the discovery or receipt of information by the Exchange or Clearinghouse that, in 
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the judgment of the Surveillance Team, indicates a possible basis for a finding that a 

violation has occurred or will occur. The Investigation Team shall determine the nature and 

scope of its investigations in its sole discretion and will operate independently of the 

commercial interests of the Exchange or Clearinghouse. Absent mitigating circumstances, 

the Investigation Team must complete its investigation within twelve (12) months after the 

date the investigation is opened. Permissible mitigating circumstances include the 

complexity of the investigation, the number of firms or individuals involved in as potential 

respondents, the number of potential violations to be investigate and the volume of 

documentation and data that must be analyzed.

Upon request by a member of the Investigation Team, a Participant, Authorized 

User, Clearing Member, and Customer:

(i) is obligated to appear and testify and respond in writing to 

interrogatories within the specified time period in connection with:

1) the Rules;

2) any inquiry or investigation; or

3) any preparation by and presentation during a Disciplinary 

Action;

(ii) is obligated to produce books, records, papers, documents or other 

tangible evidence in its, his or her possession, custody or control within 

the specified time period in connection with:

1) the Rules;

2) any inquiry or investigation; or

3) any preparation by and presentation during a Disciplinary 

Action;

(iii) may not impede or delay any Disciplinary Action.

(b) Reports of Investigations. The Investigation Team will submit a written 

report of each investigation to the Disciplinary Committee and maintain a log of all 

investigations and their disposition. The written report of the investigation (the 

“Investigation Report”) will include the reasons for initiating the investigation, all 

relevant facts and evidence gathered, analysis and conclusions, the Participant’s or 

Clearing Member’s disciplinary history at the Exchange or Clearinghouse, and will consist 

of one of the following recommendations:

(i) closing the investigation without further action;

(ii) settlement;
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(iii) summary action;

(iv) the preparation and service of a notice of charges for instituting a 

disciplinary proceeding; or

(v) resolving the investigation through an informal disposition, including 

the issuance of a warning letter. An informal disposition (including the 

issuance of a warning letter) will not constitute a finding of a violation 

or a sanction, however, the investigative report must include a copy of 

any warning letter and no more than one warning letter for the same 

potential violation may be issued to the same Participant or Clearing 

Member during a rolling 12-month period.

(c) Review of Reports of Investigations. The Disciplinary Committee will 

determine whether a reasonable basis exists to believe that a violation within the Exchange

or Clearinghouse’s jurisdiction has occurred or is about to occur. The Disciplinary 

Committee will determine for each Respondent whether to authorize:

(i) the informal disposition of the investigation (by issuing a warning letter 

or otherwise) because disciplinary proceedings are unwarranted; or

(ii) the closing of the investigation without any action because no 

reasonable basis exists to believe that a violation within the Exchange

or Clearinghouse’s jurisdiction has occurred or is about to occur; or,

(iii) the commencement of disciplinary proceedings because a reasonable 

basis exists to believe that a violation within the Exchange or 

Clearinghouse’s jurisdiction has occurred or is about to occur.

(d) Opportunity to Respond. At the discretionary authority of the Disciplinary 

Committee, the Compliance Department may notify the Respondent(s) that formal 

disciplinary charges are recommended and allow the Respondent to submit, within the

specified time period, an offer of settlement or a written statement explaining why 

disciplinary proceedings should not be instituted or why one or more of the charges should 

not be brought.

(e) Service of Notice of Charges. Once the Disciplinary Committee authorizes 

disciplinary proceedings, the Compliance Department will prepare and serve a notice of 

charges that will provide as follows:

(i) state the acts, practices or conduct that the Respondent is alleged to have 

engaged in;

(ii) state the Exchange or Clearinghouse Rule or provision of applicable law 

alleged to have been violated or about to be violated;

(iii) state the proposed sanctions;
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(iv) advise the Respondent of its right to a hearing;

(v) advise the Respondent that he or she has the right to be represented by 

legal counsel or any other representative of its choosing in all 

succeeding stages of the disciplinary process;

(vi) state the period of time within which the Respondent can request a 

hearing on the notice of charges, which will not be less than fourteen

(14) days after service of the notice of charges;

(vii) advise the Respondent that any failure to request a hearing within the 

period stated, except for good cause, will be deemed to constitute a 

waiver of the right to a hearing; and

(viii) advise the Respondent that any allegation in the notice of charges that 

is not expressly denied will be deemed to be admitted.

The service of notice upon the Respondent shall be deemed complete via email to 

the contact as it appears on the books and records of the Exchange or Clearinghouse or in 

the Participant Agreement or Clearing Member Agreement.

(f) Answer to Service of Notice of Charges. If the Respondent decides to 

answer a notice of charges, the Respondent must file answers within fourteen (14) days 

after being served with such notice, or within such other time period as stated in such notice 

of charges. The Respondent must answer the notice of charges in writing as follows:

(i) specify the allegations that the Respondent denies or admits;

(ii) specify the allegations that the Respondent does not have sufficient 

information to either deny or admit;

(iii) specify any specific facts that contradict the notice of charges;

(iv) specify any affirmative defenses to the notice of charges; and

(v) sign and serve the answer on the Chief Regulatory Officer.

Failure by the Respondent to timely serve an answer to the notice of charges will 

be deemed to be an admission to the allegations in such notice. Any allegation in a notice 

of charges that the Respondent fails to expressly deny will be deemed admitted. A general 

denial by the Respondent, without more, will not satisfy the requirements herein.

(g) Settlement Offers. At any time after a notice of charges has been issued, a 

Respondent may at any time submit to the Compliance Department a written offer of 

settlement related to anticipated or instituted disciplinary proceedings. The Disciplinary 

Committee may, in its discretion, permit the Respondent to settle disciplinary proceedings 

without admitting or denying the rule violations if the Respondent consents to the entry of 
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findings and sanctions imposed. If an offer of settlement is accepted, the Disciplinary 

Committee shall issue a written decision specifying the rule violations it has reason to 

believe were committed and any penalties imposed. All offers of settlement that have been 

accepted by the Disciplinary Committee may not be appealed.

If the offer of settlement is not accepted by the Disciplinary Committee, or fails to 

become final, or is withdrawn by the Respondent, the matter will proceed as if the offer 

had not been made such that the Respondent shall not be deemed to have made any 

admissions by reason of the settlement offer and shall not be otherwise prejudiced by 

having submitted the settlement offer.

(h) Hearing Panel.

(i) Participants and Clearing Members may request a formal hearing on 

charges denied in the Respondent’s answer to the notice of charges per 

Rule 603(f). The Hearing Panel, appointed by the Board at the 

recommendation of the Chief Regulatory Officer, shall be comprised of 

not less than three individuals from among Participants and Clearing 

Members (consisting of one Public Director, one representative of the 

brokerage community and one representative of the trading 

community), and/or other individuals with knowledge and experience in 

the financial markets, who are not involved in the conduct giving rise to 

the alleged Rule violations. The individuals on the Hearing Panel will 

serve until the related proceedings are completed. The chair of the 

Hearing Panel will be an individual qualified to be a Public Director.

(ii) The Respondent will be notified of the appointment of the Hearing Panel

and must respond within 10 days by serving notice to the Chief 

Regulatory Officer if the Respondent seeks to disqualify any individual 

names to the Hearing Panel for reasonable grounds including that such 

individual has a financial interest in the matter. Legal counsel, other than 

the Chief Regulatory Officer, will decide the merits of any request for 

disqualification within his or her sole discretion. Such decision will be 

final and not subject to appeal.

(iii) Prior to the commencement of the hearing, the Respondent will be given 

the opportunity to review all books, records, documents, transcripts of 

testimony and other tangible evidence in the possession or under the 

control of the Exchange or Clearinghouse to be used by the Compliance 

Department to support the allegations and proposed sanctions in the 

notice of charges, except for information protected by attorney-client 

privilege. The Compliance Department may redact, edit or code 

information that could adversely affect the competitive position of the 

person providing the information or if such information might 

compromise other investigations being conducted by the Compliance 

Department. However, the Compliance Department may not redact, edit 
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or code information that would impair the Respondent’s ability to 

defend against allegations or proposed sanctions in the notice of 

charges.

(iv) The following rules shall apply in each case presented before the 

Hearing Panel:

1) The Compliance Department shall prosecute the case.

2) Formal rules of evidence do not apply.

3) The Respondent shall be entitled to appear personally at the 

hearing and have the choice of being represented by legal 

counsel or another representative. The Respondent’s 

representation is limited to two individuals.

4) The Respondent has the power to cross-examine witnesses and 

present documentary evidence.

5) The burden of proof is on the Compliance Department.

6) A majority vote of the Hearing Panel is needed to find a violation 

of the Rules.

(v) No Person shall serve on the Hearing Panel unless that Person has 

agreed in writing that he or she will not publish, divulge, or make known 

in any manner, any facts or information regarding the business of any 

person or any other information which may be obtained while serving 

as a member of the Hearing Panel, except for disclosures when reporting 

to the Board, the Compliance Department, upon request by the 

Commission or other Governmental Authority, or when compelled to 

testify in a judicial or administrative proceeding. Furthermore, no 

Person shall serve on the Hearing Panel if such Person has already been 

involved in the Disciplinary Action for any reason. The hearing will be 

conducted privately and confidentially. Notwithstanding the 

confidentiality of the hearings, the Hearing Panel may appoint an expert 

to attend any hearing and assist in deliberations if such expert agrees to

be subject to an appropriate confidentiality agreement.

(vi) The chair of the Hearing Panel shall conduct the hearing as he or she 

may deem appropriate. The chair of the Hearing Panel will determine 

all procedural and evidentiary matters, including the admissibility and 

relevance of any evidence proffered. Legal counsel, other than the Chief 

Regulatory Officer, will provide guidance to the chair of the Hearing 

Panel on the conduct of the hearing. At the hearing, the Hearing Panel

or the Compliance Department and each Respondent may:
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1) present evidence and facts determined relevant and admissible 

by the chair of the Hearing Panel;

2) call and examine witnesses; and

3) cross-examine witnesses called by other parties.

(vii) If the Respondent fails to file an answer, has filed a general denial, or if 

any or all of the allegations in the notice of charges are not expressly 

denied in the Respondent’s answer, the chair of the Hearing Panel may 

limit evidence concerning any allegations not expressly denied in 

determining the sanctions to impose. If a Respondent fails to file an 

answer but appears at the hearing, the Respondent may not participate 

in the hearing (by calling or cross-examining witnesses, testifying in 

defense, presenting evidence concerning the notice of charges, or 

otherwise) unless the Hearing Panel determines that the Respondent had 

a compelling reason for failing to timely file an answer. If the Hearing 

Panel determines that the Respondent had a compelling reason for 

failing to timely file an answer, the Hearing Panel will adjourn the 

hearing and direct the Respondent to promptly file a written answer.

(viii) Reasonable notice, confirmed in writing, specifying the date, time, and 

place of the hearing will be given to persons entitled or required to 

appear before the Hearing Panel. The Hearing Panel may impose 

sanctions on any person that impedes or delays the progress of the 

hearing. Interlocutory appeals of rulings by the Hearing Panel or the 

chair of the Hearing Panel are not permitted.

(ix) If the Respondent is found to have violated one or more Rules, the

written decision shall state the disciplinary action to be taken by the 

Exchange as well as the effective date thereof. The Hearing Panel may 

in such a case:

1) issue a warning letter;

2) issue a cease and desist order;

3) suspend the Participant’s or Clearing Member’s rights to engage 

in Exchange Transactions;

4) expel the Participant or Clearing Member from the Exchange or 

Clearinghouse; and/or

5) impose any other sanction deemed appropriate under the 

circumstances.

All decisions will be subject to CFTC Rules 38.708(a)-(f).
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(x) The Respondent may appeal the Hearing Panel decision within fourteen

(14) days of receiving the order by filing a written notice of appeal 

pursuant to Rule 604. The order of the Hearing Panel’s decision will 

become final upon expiration of fourteen (14) days after the order is 

served on the Respondent.

(i) Settlement. At any time prior to the issuance of the written decision of the 

Hearing Panel, the Respondent may submit an offer of settlement to the Compliance 

Department for review. The Disciplinary Committee will determine whether to accept or 

reject the offer and forward the basis for its recommendation to the Hearing Panel for final 

determination. If the Hearing Panel agrees, the Chief Regulatory Officer will conditionally 

accept the settlement offer, which will become final upon the expiration of fourteen (14) 

days after the order of the Hearing Panel consistent with the terms of the settlement offer 

is served on the Respondent. The offer of settlement must detail the rule violations, 

including the basis for the Hearing Panel’s conclusions and any sanction to be imposed, 

which must include full customer restitution where customer harm is demonstrated. If 

applicable, the decision must also include a statement that the Respondent has accepted the 

sanctions imposed without either admitting or denying the rule violations. The acceptance 

of a settlement offer and the related final order by the Hearing Panel constitutes a waiver 

of the Respondent’s right to notice, opportunity for a hearing and review, and appeal under 

Exchange or Clearinghouse Rules. If the settlement offer is not accepted, fails to become 

final, or is withdrawn by the Respondent, the matter will proceed as if the offer had not 

been made and the offer and all documents related to it will not become part of the record.

(j) Sanctions. After notice and opportunity for hearing in accordance with 

Exchange or Clearinghouse Rules, the Exchange will impose sanctions if any Participant, 

Authorized User, Clearing Member, or Person using any of the Participant’s or Clearing 

Member’s User IDs, or Customer is found to have violated or to have attempted to violate 

a Rule of the Exchange or Clearinghouse or provision of applicable law for which the 

Exchange or Clearinghouse possess disciplinary jurisdiction. All sanctions must take into 

account the Respondent’s disciplinary history. In the event of demonstrated customer harm, 

any sanction must also include full customer restitution. The Exchange may impose one or 

more of the following sanctions or remedies:

(i) censure;

(ii) limitation or restriction on trading privileges, access to the Exchange or 

Clearinghouse and other activities, functions or operations;

(iii) suspension of trading privileges and access the Exchange or 

Clearinghouse;

(iv) fine;

(v) restitution;

(vi) disgorgement;
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(vii) termination of trading privileges and access the Exchange or 

Clearinghouse; or

(viii) any other sanction or remedy deemed to be appropriate.

The Exchange may impose a fine of up to $1,000,000 for each violation of 

Exchange or Clearinghouse Rules or a provision of applicable law. If a fine or other amount 

is not paid within 30 days of the date that it becomes payable, then interest will accrue on 

the sum from the date that it became payable at the quoted prime rate plus three percent. 

The Exchange has sole discretion to select the bank on whose quotations to base the prime 

rate. Participants and Clearing Members will be responsible for paying any fine or other 

amount imposed on, but not paid by, any of its traders, supervisors, or Customers.

Rule 604 Summary Actions

(a) Summary Suspensions. At any time, the Chief Regulatory Officer, in 

consultation with the Regulatory Oversight Committee of the Board, may summarily 

suspend, revoke, limit, or condition a Participant’s or Clearing Member’s privileges on the 

Exchange or Clearinghouse. The Chief Regulatory Officer must reasonably believe that the 

business, conduct or activities of the Participant or Clearing Member in question is not in 

the best interest of the Exchange, the Clearinghouse, or the marketplace, based on relevant 

circumstances including (but not limited to) any of the following reasons:

(i) failure to satisfy applicable requirements under the CEA and/or the rules

of the CFTC;

(ii) failure to pay fees or fines or arbitration awards; and/or

(iii) there is a reasonable basis for believing the best interest of the public, 

the Exchange, or the Clearinghouse is at risk and immediate action is 

necessary.

(b) Notice of Suspension. Any Participant or Clearing Member that is 

suspended by the Chief Executive Officer as a result of a summary action is to be notified 

at the earliest possible opportunity as appropriate considering the best interest of the 

marketplace. Such notice shall state:

(i) the exact action taken,

(ii) the reasons for the action, and

(iii) the time and date the action has or is to become effective as well as the 

duration of the action.

The Respondent may file a notice of appeal filed pursuant to Rule 604 seeking 

reinstatement within fourteen (14) days after the notice of action is served on the 

Respondent. Otherwise, the summary action becomes final fourteen (14) days after the 
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notice of action is served on the Respondent. The Respondent shall have the right to be 

represented by legal counsel in all proceedings subsequent to summary action taken 

pursuant to Rule 604.

(c) Summary Imposition of Fines. The Compliance Department may 

summarily impose a fine, no less than $1,000 and no more than $15,000 for each violation, 

against any Participant or Clearing Member for:

(i) failure to cooperate with the Compliance Department as required by 

Exchange or Clearinghouse Rules;

(ii) failure to make timely and accurate submissions to the Exchange of 

notices, reports or other information required by Exchange or 

Clearinghouse Rules; 

(iii) failure to keep any books and records required by Exchange or 

Clearinghouse Rules.

(d) Notice of Fines. The Compliance Department will give notice of any fine 

imposed that will specify:

(i) the violation of the Exchange or Clearinghouse Rule for which the fine 

is being imposed;

(ii) the date of the violation for which the fine is being imposed; and

(iii) the amount of the fine.

Within 14 days of the service of the notice of the fine imposed, the Participant or 

Clearing Member may either pay the fine or file a notice of appeal pursuant to Rule 605(a). 

Unless timely notice of appeal is filed, the fine will become final upon expiration of 14 

days after the notice of fine is served on the Participant or Clearing Member. The 

Respondent shall have the right to be represented by legal counsel in all proceedings 

subsequent to summary action taken pursuant to Rule 604.

(e) Summary Fine Schedule. The following is a list of the rule violations subject 

to, and the applicable fines that may be imposed by the Exchange pursuant, this Rule 604:

(i) Failure to Comply with Minimum Financial Requirements, 

Financial Reporting Requirements, and Requirements Relating to 

Protection of Customer Funds (Rules 304(a); 304(b); 304(c); 304(d); 

304(e); 304(f); 304(g); 304(h); 304(i); 304(j); 304(k); 304(l); 304(m); 

304(n); 304(o); 304(p); 304(q); 304(r))

Number of Cumulative Violations in Any Twelve (12) Month Rolling 

Period

First Offense.....................................Letter of Caution
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Second Offense................................$7,500

Third Offense...................................$15,000

Subsequent Offenses........................Referral to Disciplinary Committee

(ii) Failure to Comply with Notice Provisions for Position 

Accountability. (Rule 406(a))

Number of Cumulative Violations in Any Twelve (12) Month Rolling 

Period

First Offense.....................................Letter of Caution

Second Offense................................$7,500

Third Offense...................................$15,000

Subsequent Offenses........................Referral to Disciplinary Committee

(iii) Failure to Comply with Reporting Requirements for Ownership and 

Control Reports and Reportable Positions. (Rules 407(a); 407(b); 

407(c))

Number of Cumulative Violations in Any Twelve (12) Month Rolling 

Period

First Offense.....................................Letter of Caution

Second Offense................................$7,500

Third Offense...................................$15,000

Subsequent Offenses........................Referral to Disciplinary Committee

(iv) Failure to Enter Valid Orders. (Rule 504(a))

Number of Cumulative Violations in Any Twelve (12) Month Rolling

Period

First Offense.....................................Letter of Caution

Second Offense................................$2,500

Third Offense...................................$10,000

Subsequent Offenses........................Referral to Disciplinary Committee

(v) Failure to Comply with Block Trade Requirements. (Rules 505(b); 

505(c); 505(d))

Number of Cumulative Violations in Any Twelve (12) Month Rolling 

Period

First Offense..............................Letter of Caution

Second Offense...........................$2,500

Subsequent Offenses.....................$10,000

(vi) Failure to Maintain Audit Trail Information. (Rules 510(a); 510(b); 

510(c))
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Number of Cumulative Violations in Any Twelve (12) Month Rolling

Period

First Offense.....................................Letter of Caution

Second Offense................................$2,500

Third Offense...................................$10,000

Subsequent Offenses........................Referral to Disciplinary Committee

(vii) Failure to Cooperate with the Compliance Department; Failure to 

Provide Records Within Designated Time Frame. (Rule 603(a))

Number of Business Days Beyond Due Date of Request

Up Until 15 Business Days..............$1,000

Subsequent Offenses........................Referral to Disciplinary Committee

(viii) Failure to Properly Deliver. (Rules 1105(a); 1105(b))

Number of Cumulative Violations in Any Twelve (12) Month Rolling

Period

First Offense.....................................$5,000

Subsequent Offenses........................ Referral to Disciplinary Committee

Rule 605 Appeal from Hearing Panel Decisions and Summary Actions

(a) Appeal Procedures. A Respondent found by the Hearing Panel to have 

violated an Exchange or Clearinghouse Rule or applicable law or who is subject to any 

summary action imposed pursuant to Rule 604 may appeal the decision within fourteen 

(14) days of receiving the order of the Hearing Panel decision or notice of summary action 

by filing a notice of appeal with the Chief Regulatory Officer. Except for summary 

suspensions imposed pursuant to Rule 604(a) and (b), Hearing Panel decisions and 

summary imposition of fines shall be suspended while the appeal is pending.

The notice of appeal must state in writing the grounds for appeal, including the 

findings of fact, conclusions or sanctions to which the Respondent objects. The Respondent 

may give notice of appeal on the grounds that:

(i) the order or decision was arbitrary, capricious, an abuse of discretion, 

or not in accordance with Exchange or Clearinghouse Rules;

(ii) the order or decision exceeded the authority or jurisdiction of the 

Hearing Panel, the Disciplinary Committee, the Exchange, or the 

Clearinghouse;

(iii) the order or decision failed to observe required procedures;

(iv) the order or decision was unsupported by the facts or evidence; or
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(v) the imposed sanctions, remedies or costs are inappropriate or 

unsupported by the record.

The Chief Regulatory Officer will forward copies of any notice of appeal received 

by it to all parties to the disciplinary proceeding or summary action, as the case may be, 

except the appellant. On or before the 14th day after filing a notice of appeal, the appellant 

must file with the Chief Regulatory Officer and serve on the Compliance Department a 

brief supporting the notice of appeal and documents supporting the brief. On or before the 

14th day after the date on which the appellant serves supporting brief, the appellee must 

file and serve its brief in opposition with the Compliance Department.

Within 30 days after the last submission filed, the Board will appoint a Board of 

Appeals at the recommendation of the Chief Regulatory Officer, which shall be composed 

of not less than three individuals from among Participants and Clearing Members

(consisting of one Public Director, one representative of the brokerage community and one 

representative of the trading community), and/or other Person with knowledge and 

experience in the financial markets, who did not participate in any prior stage of the 

disciplinary proceeding. No member may serve on the Board of Appeals if such person or 

any person or firm with whom such person is affiliated has a financial, personal, or other 

direct interest in the matter. The individuals on the Board of Appeals will serve until the 

related proceedings are completed. The chair of the Board of Appeals will be an individual 

qualified to be a Public Director.

(b) Review by the Board of Appeals. The Board of Appeals will hold a hearing 

to allow parties to present oral arguments. Except for good cause shown, the review by the 

Board of Appeals shall only consider the record before the Disciplinary Committee, the 

written exceptions filed by the parties, and the oral and written arguments of the parties.

Upon completing its review, the Board of Appeals may affirm, modify or reverse 

the Hearing Panel decision or summary action under appeal. Modifications by the Board 

of Appeals may include increasing, decreasing or eliminating any sanction or remedy 

imposed, imposing any other sanction or remedy authorized by Exchange or Clearinghouse 

Rules, remanding the matter to the same or a different Hearing Panel for further disciplinary 

proceedings, or ordering a new hearing.

As promptly as reasonably possible following its review, the Board of Appeals will 

issue a written decision based on the weight of the evidence before the Board of Appeals. 

The decision of the Board of Appeals will include a statement of findings of fact and 

conclusions for each finding, sanction, remedy and cost reviewed on appeal, including each 

specific Exchange or Clearinghouse Rule and provision of applicable law that the 

Respondent is found to have violated, if any, and the imposition of sanctions, remedies and 

costs, if any, and the effective date of each sanction, remedy or cost. The order by the Board 

of Appeals will be the final action of the Exchange and will not be subject to further appeal 

within the Exchange.

Rule 606 Rights and Responsibilities After Suspension or Termination
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(a) When the Participant’s or Clearing Member’s right to access the Exchange

or Clearinghouse, or the association of an Authorized User with a Participant, is suspended 

for a period of 12 months or less, none of its rights (including the right to hold oneself out 

to the public as a Participant or Clearing Member; enter orders into the Exchange; clear 

trades through the Clearinghouse, and receive Participant rates for fees, costs, and charges) 

will apply during the period of the suspension, except for the right of the Participant,

Authorized User or Clearing Member in question to assert claims against others as provided 

in the Rules. Any such suspension will not affect the rights of creditors under the Rules or 

relieve the Participant, Authorized User or Clearing Member in question of its, his, or her 

obligations under the Rules to perform any Transactions entered into before the suspension, 

or for any Exchange or Clearinghouse fees, costs, or charges incurred during the 

suspension. The Exchange may discipline a suspended Participant or Authorized User or 

Clearing Member under this Chapter 6 for any violation of Applicable Law committed by 

the Participant or Clearing Member before, during, or after the suspension.

(b) When the Participant’s or Clearing Member’s right to access the Exchange

or Clearinghouse, or the association of an Authorized User with a Participant, is terminated, 

all of its rights will terminate, except for the right of the Participant or Authorized User or 

Clearing Member in question to assert claims against others, as provided in the Rules. Any 

such termination will not affect the rights of creditors under the Rules. A terminated 

Participant, Authorized User or Clearing Member may only seek to reinstate its right to 

access the Exchange or Clearinghouse by filing an application in accordance with Chapter

3 of the Rules. The Exchange and Clearinghouse will not consider the application of a 

terminated Participant, Authorized User or Clearing Member if such Participant or 

Authorized User continues to fail to appear at Disciplinary Actions without good cause, or 

continues to impede the progress of Disciplinary Actions.

(c) A suspended or terminated Participant, Authorized User or Clearing 

Member remains subject to the Rules and the jurisdiction of the Exchange and 

Clearinghouse for acts and omissions prior to the suspension of termination, and must 

cooperate in any inquiry, investigation, Disciplinary Actions, appeal of Disciplinary 

Actions, summary suspension, or other summary action as if the suspended or terminated 

Participant, Authorized User or Clearing Member still had the right to access the Exchange

or Clearinghouse, or was still associated with a Participant or Clearing Member, as the case 

may be.

Rule 607 Notice to the Respondent, the CFTC, and the Public

The Exchange will provide written notice of Disciplinary Actions to the parties and the 

CFTC consistent with CFTC Rules. Whenever the Exchange suspends, expels, fines, or otherwise 

disciplines, or denies any Person access to the Exchange or Clearinghouse, the Exchange will make 

the public disclosures required by CFTC Rules.

CHAPTER 7

ARBITRATION
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Rule 701 In General

(a) Participants, Clearing Members, and Customers shall arbitrate through NFA

in accordance with NFA’s Code of Arbitration and NFA’s member arbitration rules. All 

disputes, controversies or claims between or among themselves that relate to or arise out 

of any Contract or otherwise arise out of one or more Transactions made or to be made on 

the Exchange or subject to the Rules and that are based upon facts and circumstances that 

occurred at a time when the parties were Participants, Clearing Members, or Customers.

(b) To initiate arbitration, a Person shall notify the NFA, either in writing or 

orally. The NFA shall maintain a record of the receipt of such notice and shall promptly 

provide such Person with a copy of the member arbitration rules and an Arbitration Claim 

form. The intent to arbitrate must be received by NFA within two years from the date when 

the party filing the Arbitration Claim form knew or should have known of the act or 

transaction that is the subject of the controversy.

(c) The party filing a claim shall pay a hearing fee based on the amount claimed 

in accordance with NFA’s member arbitration rules. The arbitrator(s), in their discretion, 

may assess the entire fee against any party or divide the fee among any or all parties. 

Hearing fees shall be paid to NFA in advance of the hearing sessions to which they apply.

(d) The arbitration will be conducted in Chicago, Illinois, by an arbitrator 

operating in accordance with the provisions of NFA’s member arbitration rules in effect at 

the time of filing of the claim for arbitration. The arbitrator shall have the authority to award 

any remedy or relief that a court of competent jurisdiction could order or grant, including

the issuance of an injunction.

(e) Except as necessary in court proceedings to enforce this arbitration 

provision or an award rendered hereunder, or to obtain interim relief, neither a Party nor an 

arbitrator may disclose the existence, content or results of any arbitration hereunder without 

the prior written consent of the Parties. For the purposes of this section, the NFA is not 

considered a Party.

(f) Controversies or claims solely related to the Clearinghouse between 

Clearing Members and the Clearinghouse arising out of or relating to the Rules, or the 

breach thereof, shall be settled by arbitration administered by the American Arbitration 

Association in accordance with its Commercial Arbitration Rules and judgment on the 

award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. 

The place of arbitration shall be Chicago, Illinois. Claims against the Clearinghouse must 

be pursued pursuant to the rules of the Clearinghouse. In the event of a conflict between 

the American Arbitration Association Commercial Arbitration Rules, the terms of the 

Rulebook shall control.

Rule 702 Exceptions

This Chapter 7 does not apply to disputes between Participants, Clearing Members or 

Customers in which: (a) such Participants, Clearing Members or Customers are required by the 
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rules of a Self-Regulatory Organization to submit to the dispute resolution procedures of that SelfRegulatory Organization; or (b) such Participants, Clearing Members or Customers have, by valid 

and binding agreement, committed to negotiate or litigate in a forum other than the NFA or the 

American Arbitration Association.

Rule 703 Penalties

(a) Any failure on the part of a Participant or Clearing Member to arbitrate a 

dispute subject to this Chapter 7, or the commencement by any such person of a suit in any 

court prior to arbitrating a case subject to this Chapter 7, violates the Rules and shall subject 

such Participant or Clearing Member to Disciplinary Action pursuant to Chapter 6.

(b) The Exchange or Clearinghouse may, as applicable, summarily suspend, 

pursuant to Rule 604, a Participant or Clearing Member that fails to timely satisfy an 

arbitration award rendered in any arbitration pursuant to this Chapter 7. If a case settles 

before an award has been issued, the Exchange will enforce the agreed upon settlement.

CHAPTER 8

CLEARING

Rule 801 Clearing 

(a) All Contracts shall be cleared through the Clearinghouse in accordance with 

the Rules. The clearing services provided by the Clearinghouse with respect to any 

Contract, and the rights and obligations of purchasers and sellers under cleared Contracts 

(including rights and obligations in respect of clearing and settlement, Margin payments 

and performance at maturity), will be governed by the Rules.

(b) Immediately upon execution of an Exchange Transaction as provided in 

Rule 504(h), such Transaction shall be discharged and novated in accordance with the 

Rules. Open positions in any Contract may only be offset by opposite Transactions in the 

same Contract that are executed on the Exchange.

(c) The Clearinghouse shall have the right to reject Contracts that arise from 

Transactions and to suspend clearing of such Transactions without notice, in accordance 

with the rules of the Clearinghouse.

(d) A Clearing Member may transfer a Contract to another Clearing Member 

only upon notice to the Exchange and in accordance with the Rules.

Rule 802 Participants

Each Participant must assist its Clearing Member, if any, and the Clearinghouse, in the 

clearing of its Transactions in Contracts. Without limiting the generality of the foregoing, each 

Participant must provide its Clearing Member, if any, with a telephone number so that such 

Participant may be reached at any time during the day in the event that there is a discrepancy in 

the clearing of a Transaction. If the Participant is not present at the time specified above, such 
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Participant’s Clearing Member, if any, will be authorized to resolve any discrepancy in the manner 

it deems appropriate, but such resolution will not be relevant to the determination of the liability 

of any party to the trade.

Rule 803 Clearing Members 

(a) The Clearinghouse shall have one category of Clearing Membership: 

Clearing Members that are FCMs. The Clearinghouse may approve a firm to be a Clearing 

Member and the Clearinghouse may revoke Clearing Member approval at any time.

(b) Clearing Membership may be approved and maintained only when the 

terms and conditions set forth below have been met and continue to be met as determined 

by the Clearinghouse:

i. The Clearing Member is a corporation, limited liability company, 

partnership or other entity in good standing in its jurisdiction of 

formation;

ii. The Clearing Member is qualified to conduct business in the State of 

Illinois or have an agency agreement in place with an entity qualified in 

the State of Illinois that provides an agent for service of process and 

other communications from the Clearinghouse in connection with the 

business of the Clearing Member;

iii. The Clearing Member is in compliance the Clearing Member 

Agreement.

iv. The Clearing Member is in compliance with the Rules;

v. The Clearing Member is in good financial standing and meets the 

minimum financial requirements established by the Clearinghouse;

vi. The Clearing Member has the personnel and systems to effectively 

conduct its business with the Clearinghouse;

vii. The Clearing Member has established satisfactory relationships with, 

and designated to the Clearinghouse, a bank or trust company 

designated by the Board of the Clearinghouse for confirmation and 

payment of all Initial Margin, variation margin and other settlements 

with the Clearinghouse (an “Approved Financial Institution”);

viii. The Clearing Member has adequate operational capabilities, including 

the ability to process expected peak volumes and values within required 

time frames, fulfill Collateral payment and delivery obligations imposed 

by the Clearinghouse and participate in Default management activities; 

and
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ix. The Clearing Member is registered as a FCM with the CFTC, is a 

member of NFA, and meets all applicable requirements under the CEA 

and the CFTC’s rules, including, but not limited to, risk management 

procedures, requirements relating to minimum net capital, financial 

reporting, and recordkeeping, as determined by the Clearinghouse.

The Clearing Member shall immediately notify the Clearinghouse if any of the foregoing 

requirements are not true and accurate.

The Board of the Clearinghouse may grant exemptions to the requirements for membership 

in Rule 803 if the Clearinghouse determines that an exemption would not jeopardize the financial 

integrity of the Clearinghouse.

Rule 804 Application for Clearing Membership

(a) Any Person desiring to become a Clearing Member shall execute a Clearing 

Member Agreement and submit an application in such form as shall be prescribed by the 

Clearinghouse, which shall include a certification that the applicant has received, reviewed 

and agrees to abide by the Rules and perform the duties and responsibilities of a Clearing 

Member. 

(b) Only Persons found to meet the qualifications set forth in Rule 803 will be 

permitted to be Clearing Members. For the purpose of determining whether any applicant 

or Clearing Member is so qualified, the Clearinghouse may examine the books and records 

of any applicant or Clearing Member and may take such other steps as it may deem 

necessary to assess the qualifications of an applicant or Clearing Member. An applicant 

for Clearing Member status shall be conclusively deemed to have agreed to have no 

recourse against the Clearinghouse in the event that its application to become a Clearing 

Member is rejected.

(c) An applicant that fails to be approved for membership shall be informed by 

the Clearinghouse and shall have five (5) Business Days thereafter to file an appeal to the 

Board of the Clearinghouse seeking further consideration. The Board of the Clearinghouse 

may approve the applicant by a majority vote if it determines that the decision to deny the 

application was in error.

Rule 805 Withdrawal of Clearing Membership

(a) A Clearing Member may request to begin the withdrawal process as a 

Clearing Member upon written notice in a form and manner specified by the 

Clearinghouse. The Clearinghouse will process the formal withdrawal request within 30 

days of receipt of the withdrawal form. Within or prior to the 30-day period, the Clearing 

Member will remain subject to all obligations of a Clearing Member under the Rules.

(b) A Clearing Member that has provided the Clearinghouse with notice that it 
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seeks to withdraw its status is subject to the following requirements, obligations and 

provisions:

(i) the Clearing Member must use all reasonable efforts to close-out all 

of house and customer open positions;

(ii) after notifying the Clearinghouse, the Clearing Member shall only be 

entitled to submit transactions for clearing which can be demonstrated 

to have the overall effect of reducing open positions in any Contract

or risks to the Clearinghouse, whether by hedging, novating, 

transferring, terminating, liquidating or otherwise closing out such 

positions;

(iii) the Clearinghouse may call for additional initial Margin until such 

time as all of such Clearing Member’s open positions have been 

terminated, and such Clearing Member shall provide such additional 

initial Margin to the Clearinghouse as is requested in a timely 

manner;

(iv) the withdrawing Clearing Member may be obligated to participate in 

Default auctions; and

(v) if there is a Default, the withdrawing Clearing Member in question 

shall remain liable for any unapplied assessments.

(c) Any withdrawal notice issued by a Clearing Member shall be irrevocable 

by the Clearing Member and membership may only be reinstated pursuant to a new 

application for membership following the close-out of all house and customer open 

positions.

Rule 806 Responsibilities of Clearing Members

Each Clearing Member shall, and where applicable, shall cause all of its employees and 

agents to:

(a) ensure that all funds deposited with the Clearinghouse on behalf of 

customers of a Clearing Member shall be held in an account identifiable as “customer 

segregated” in accordance with the CEA and CFTC Rule 1.20, as amended. 

(b) ensure that the investment all funds deposited with the Clearinghouse on 

behalf of customers of a Clearing Member comply with the investment standards of the 

CEA and CFTC Rule 1.25, as amended, including, but not limited to, concentration limits 

and permitted investments;

(c) comply with and act in a manner consistent with the Rules and any rules of 

or agreement with a settlement facility, as applicable;
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(d) ensure that all clearing activity conducted by the Clearing Member is 

performed in a manner that is consistent with the Rules;

(e) ensure that only the Clearinghouse’s facilities are used to conduct clearing 

business pursuant to the Rules or which is required to be conducted pursuant to the Rules;

(f) ensure that the Clearinghouse’s facilities are used in a responsible manner 

and are not used for any improper or wrongful purpose; 

(g) meet all financial requirements required under the Rules; 

(h) guarantee and assume complete responsibility for all Contracts submitted 

by it or which it has authorized another Person to submit for clearing in its name; 

(i) observe high standards of integrity, market conduct, commercial honor, fair 

dealing and just and equitable principles of trade in the conduct of its clearing business 

with the Clearinghouse in the conduct of its business as a Clearing Member or any aspect 

of any business connected with or concerning the Clearinghouse;

(j) immediately inform the Clearinghouse of any changes to the account 

information provided by the Clearing Member; 

(k) keep User IDs and passwords confidential;

(l) promptly review and, as necessary, respond to all communications issued

by the Clearinghouse; 

(m) keep, or cause to be kept, complete and accurate books and records as 

required to be maintained pursuant to the CEA and CFTC Rules for the time and in the 

manner specified by CFTC Rules; and make such books and records available for 

inspection by a representative of the Clearinghouse, the CFTC and other Governmental 

Authority of competent jurisdiction; 

(n) not knowingly mislead or conceal any material fact or matter in any dealings 

or filings with the Clearinghouse or in connection with a disciplinary action; 

(o) be responsible, even after it has withdrawn as a Clearing Member, for any 

violations of Rules committed by it while it was a Clearing Member; 

(p) cooperate with the Clearinghouse and any Governmental Authority in any 

inquiry, investigation, audit, examination or proceeding;

(q) adopt, adhere to and enforce risk management and other policies and 

procedures that are designed to address the risks that the Clearing Member poses to the 

Clearinghouse and promptly provide, upon request by the Clearinghouse or the CFTC, 
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information related to the risk management policies, procedures and practices of the 

Clearing Member; 

(r) coordinate with the Clearinghouse to develop and test business continuity 

and disaster recovery plans that enable effective resumption of daily processing, clearing 

and settlement following a disruption; and

(s) develop and implement a written compliance program approved in writing 

by senior management of such Clearing Member that is reasonably designed to achieve 

and monitor the Clearing Member’s compliance with all applicable requirements of the 

Bank Secrecy Act (31 U.S.C. § 5311 et seq.), the International Emergency Economic 

Powers Act (50 U.S.C. § 1701 et seq. ) (“IEEPA”), the Trading with the Enemy Act (50 

U.S.C. App. § 1 et seq.) (“TWEA”), and the Executive Orders and Rules issued pursuant 

thereto, including the Rules issued by the U.S. Department of the Treasury and, as 

applicable, the CFTC. The compliance program shall, at a minimum:

(i) establish and implement policies, procedures and controls reasonably 

designed to assure compliance with all applicable provisions of the 

Bank Secrecy Act, IEEPA, TWEA, and all applicable Executive 

Orders and Rules issued pursuant thereto;

(ii) provide for independent testing for compliance to be conducted by 

Clearing Member personnel or by a qualified outside party;

(iii) designate an individual or individuals responsible for implementing 

and monitoring the day-to-day operations and internal controls of the 

program; and

(iv) provide ongoing training for appropriate personnel.

Rule 807 Clearing Member Financial Reporting Requirements 

(a) Each Clearing Member shall file with the Clearinghouse:

(i) A financial statement in the form prescribed by the Clearinghouse

within sixty (60) days after the end of such Clearing Member’s fiscal 

year, together with a summary description in reasonable detail of the 

risk management, policies, procedures and systems that were 

maintained by such Clearing Member during such fiscal year and a 

financial statement in the form prescribed by the Clearinghouse within 

seventeen (17) days after the end of each month; and 

(ii) A copy of each financial statement, financial report, or notice pursuant 

to CFTC Rule 1.12, which it files with any Governmental Authority 

or Self-Regulatory Organization of which it is a member or participant 
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at the same time it files such statement, report, or notice with any such 

Governmental Authority or Self-Regulatory Organization, and if such 

statement, report, or notice is other than a routine periodic statement, 

report, or notice required under the bylaws, rules or Rules of such 

entity, such copy shall be accompanied by a written statement, 

pursuant to CFTC Rule 1.12, setting forth (to the extent known) the 

reasons why such Clearing Member is filing such statement, report, or 

notice.

(b) The financial statements required by this Rule shall be submitted on Form 

1-FR-FCM or FOCUS Report Part II, provided that if the Clearing Member is not required 

to submit Form 1-FR-FCM or a FOCUS Report it must provide financial information in 

the form and manner prescribed by the Clearinghouse. The financial statement for the fiscal 

year of a Clearing Member shall be certified by an independent public accountant, and the 

monthly financial statements shall be certified by the president, the chief financial officer 

or a general partner of the Clearing Member.

(c) Each Clearing Member shall file with the Clearinghouse such financial or 

other information, in addition to that which is explicitly required by this Rule, as may be 

requested by the Clearinghouse from time to time.

(d) In the event that a Clearing Member: (i) fails to meet any obligation to 

deposit or pay any Margin or option premium when and as required by any clearing 

organization of which it is a member; (ii) fails to be in compliance with any applicable 

financial requirements of any Governmental Authority or Self-Regulatory Organization; 

or (iii) becomes the subject of a bankruptcy petition, receivership proceeding or the 

equivalent, such Clearing Member shall immediately so advise the Clearinghouse both 

telephonically and in writing.

Rule 808 Notices Required of Clearing Members

(a) A Clearing Member shall provide immediate notice to the Clearinghouse, 

orally and in writing, if the Clearing Member:

(i) gives notice to the CFTC pursuant to CFTC Rule 1.12 or to the 

Securities and Exchange Commission pursuant to Securities 

Exchange Act Rule 17a-11;

(ii) changes its public accountants; 

(iii) fails to comply with additional accounting, reporting, financial and/or 

operational requirements prescribed by the Clearinghouse or 

Settlement Facility;

(iv) an Initial Margin or Variation Margin call in any account exceeds the 

Clearing Member’s excess adjusted net capital;
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(v) is subject to any financial or business development that could 

materially affect the ability of the Clearing Member to comply with 

its obligations as a Clearing Member;

(vi) any material damage to, or failure or inadequacy of, the systems, 

facilities or equipment of the Clearing Member to effect transactions 

pursuant to the Rules or to timely perform the Clearing Member’s 

financial obligations under or in connection with Contracts;

(vii) any failure by such Clearing Member, or any guarantor or commonly 

owned or controlled Clearing Member to perform on any of its 

material contracts, obligations or agreements;

(viii) any determination that it, or any guarantor, will be unable to perform 

on any of its material contracts, guarantees, obligations or agreements;

(ix) the Insolvency of such Clearing Member or of any guarantor thereof;

(x) the institution of any proceeding by or against the Clearing Member, 

any affiliate of the Clearing Member, or any Person with a beneficial 

ownership of greater than 5% in the Clearing Member, under any 

provision of the bankruptcy laws of the United States, or under the 

Securities Investor Protection Act of 1970, any other statute or 

equitable power of a court of like nature or purpose, in which such 

Clearing Member or Person is designated as bankrupt, debtor or 

equivalent, or if a receiver, trustee or similar official is appointed for 

the Clearing Member, such Person, or its or their property; 

(xi) the receipt by such Clearing Member, or the filing by such Clearing 

Member with a Self-Regulatory Organization, of a notice of material 

inadequacy; or 

(xii) the receipt by such Clearing Member from its independent auditors of 

an audit opinion that is qualified.

(b) A Clearing Member must provide prompt written notice (but in no event, 

later than five (5) business days) to the Clearinghouse of:

(i) any change in its name, business address, telephone or facsimile 

number, electronic mail address, or any number or access code for any 

electronic communication device used by it to communicate with the 

Clearinghouse;

(ii) any refusal of admission to, withdrawal of any application for 

membership in, any suspension, expulsion, bar, material fine, censure, 
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denial of membership, registration or license, withdrawal of any 

application for registration, cease and desist order, temporary or 

permanent injunction, denial of trading privileges, or any other 

material sanction or discipline through an adverse determination, 

voluntary settlement or otherwise, by any Governmental Authority, 

Self-Regulatory Organization, Settlement Facility, or other business 

or professional association; 

(iii) the imposition of any restriction or limitation on the business 

conducted by the Clearing Member on or with any Self-Regulatory 

Organization other than restrictions or limitations imposed generally 

on all members of or participants in such Self-Regulatory 

Organization);

(iv) any proposed change in the organizational or ownership structure or 

management of a Clearing Member, including any merger, 

combination or consolidation between the Clearing Member and 

another Person;

(v) the assumption or guaranty by the Clearing Member of all or 

substantially all of the liabilities of another Person in connection with 

a direct or indirect acquisition of all or substantially all of that Person’s 

assets; or 

(vi) the sale of more than 20% of the Clearing Member’s business or assets 

to another Person.

Rule 809 Clearinghouse Authority

(a) The Clearinghouse shall have authority, in its sole discretion, to take such 

action against any Clearing Member, including but not limited to terminating the Clearing 

Member Agreement and requiring the withdrawal of a Clearing Member, imposing 

enhanced capital requirements, imposing enhanced Margin requirements, prohibiting an 

increase or requiring a reduction in positions, and liquidating or transferring positions 

when, in the sole discretion of the Clearinghouse, such action is appropriate or necessary 

to manage one or more risks posed to the Clearinghouse by a Clearing Member.

(b) If at any time the Clearinghouse, in its sole discretion, determines that there 

is a question as to a Clearing Member’s good standing or financial condition, the 

Clearinghouse may suspend or take any other action to protect the best interests of the 

marketplace, other Clearing Members, the Exchange, and/or the Clearinghouse. 

(c) In the event the Clearinghouse is unable to obtain sufficient funds and 

liquidity to promptly meet same day settlement and payment through such means, the 

Clearinghouse may declare the occurrence of a liquidity event (each, a “Liquidity Event”). 
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Rule 810 Liquidity Events

In the event the Clearinghouse requires liquidity to enable it to promptly meet all of its 

payment obligations to Clearing Members, the Clearinghouse will first attempt to obtain liquidity 

through the sale of any pledged securities, followed by the application of any uncommitted funding 

arrangements, and then through the use of its committed lines of credit, if any. In the event the 

Clearinghouse is unable to obtain sufficient funds and liquidity to promptly effect settlement and 

payment through such means, the Clearinghouse may declare the occurrence of a Liquidity Event. 

In such an event, the Clearinghouse shall have the authority in its sole discretion to take the 

following actions, in the order listed, to secure same day liquidity:

(a) The Clearinghouse may substitute the cash deposited by one or more 

Clearing Members as Initial Margin with United States Treasury bills, Treasury notes and 

Treasury bonds (“Treasury Securities”) held as Collateral by the Clearinghouse. The 

amount of cash substituted shall be equivalent to the market value of such Treasury 

Securities (determined by the Clearinghouse as of the latest mark, using a recognized thirdparty source, after the application of haircuts). Any Treasury Securities transferred 

pursuant to this paragraph (b) shall be applied as an Initial Margin deposit on behalf of any 

such Clearing Member whose cash was substituted and will be allocated pro rata among 

Clearing Members with cash deposits. For any substitution of Treasury Securities for cash 

as Initial Margin, the Clearinghouse will replace the cash within twenty-nine (29) Business 

Days of the date of the substitution.

(b) The Clearinghouse may satisfy Variation Margin obligations to any 

Clearing Member that is a primary dealer (or that has an Affiliate that is a primary dealer) 

with Treasury Securities held as Collateral by the Clearinghouse at market value 

(determined by the Clearinghouse as of the latest mark, using a recognized third-party 

source, after the application of haircuts). To the extent that the Clearinghouse pays its 

Variation Margin obligations in Treasury Securities, if the receiving Clearing Member 

notifies the Clearinghouse the same day of the settlement that it will return the securities 

to the Clearinghouse on the next Business Day, then the Clearinghouse will pay on the next 

Business Day cash equal to the original value of the Clearinghouse’s Variation Margin 

obligation.

(c) In lieu of satisfying a payment owed from any auction, sale, or transfer of 

an Insolvent, Defaulted, or suspended Clearing Member’s house account or customer 

account in cash to an auction winner, purchaser, or transferee, the Clearinghouse may 

satisfy such payment owed by transferring Treasury Securities at market value (determined 

by the Clearinghouse as of the latest mark, using a recognized third-party source, after the 

application of haircuts), equal to the amount of such obligation.

Rule 811 Acceptance for Clearing and Novation

(a) The Clearinghouse will coordinate with the Exchange and Clearing 

Members to accept or reject Contracts for clearing as quickly after execution as 

technologically practicable. The Clearinghouse will accept Contracts for clearing when 
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such Contracts have been received by the Clearing System if the parties to such Contracts

have clearing arrangements in place and have satisfied any applicable risk limits imposed 

by the Clearing Member, the Exchange or the Clearinghouse. Subject to the foregoing, the 

Clearinghouse shall accept for clearing any Contract that has been executed pursuant to the

Rules and submitted by the Exchange to the Clearinghouse for clearance, and shall not 

accept for clearing any Exchange Contract submitted to it by any Person other than the 

Exchange. All Contracts accepted for clearing by the Clearinghouse shall be subject to 

these Rules.

(b) The Clearinghouse, by accepting a Contract offered to it for clearing, shall 

assume, in the place of each Clearing Member that is a party to such Exchange Contract, 

all liabilities and obligations imposed by such Exchange Contract to the Clearing Member 

that is the other party thereto and shall succeed to and become vested with all rights and 

benefits accruing therefrom. Such assumption by the Clearinghouse shall terminate all 

liabilities and obligations of the Clearing Member whose Contract is so accepted to the 

other Clearing Member which was a party to such Contract.

(c) The Clearinghouse shall be entitled to rely conclusively on the accuracy and 

authenticity of any information regarding any Contract submitted to the Clearinghouse by 

the Exchange on behalf of a Clearing Member, whether or not the Clearing Member in fact 

authorized the submission of such Contract for clearing.

(d) Where, as the result of novation under this Rule, a Clearing Member has 

bought and sold Contracts for the same account with the same expiry or a put or call option 

with the same strike price and expiry, such purchase and sale will be offset by the 

Clearinghouse. Such a Clearing Member shall be required to pay the loss or entitled to 

collect the profit, as the case may be, upon such offsetting transactions, and shall have no 

further rights or be under any further obligation with respect thereto. For purposes of this 

Rule, the first Contract made shall be deemed the first Contract offset.

Rule 812 Liens Held by the Clearinghouse

The Clearinghouse shall have a first lien and perfected security interest in, and right of 

setoff against, all Initial Margin, Variation Margin, Collateral and other property (including 

Contracts), and all proceeds of any of the foregoing, held in or for the accounts of a Clearing 

Member in connection with the financial obligations of such Clearing Member, however created, 

arising or evidenced, whether direct or indirect, absolute or contingent, existing, due or to become 

due.

Rule 813 Settlement and Delivery

(a) All Settlement Prices will be determined solely by the Exchange.

(b) In the absence of a clerical error, payments of funds or transfer of funds to 

and from the Clearinghouse, including, but not limited to, intraday and end of day Margin 

payments, delivery payments, and security deposits, are final and unconditional when 
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effected and cannot be reversed.

(c) Delivery failures are subject to the Exchange specific delivery rules for the 

respective Contract and are assigned by the Clearinghouse in a manner to minimize the 

number of Participants impacted and assigns failures by newest to oldest positions.

(d) Clearing Members must use Approved Financial Institutions and Settlement 

Facilities approved for use by the Clearinghouse.

(e) Clearing Members must pay Margin calls by the deadline set by the 

Clearinghouse. An extension of time for such payments may be granted in writing by the 

President of the Clearinghouse.

(f) In the event a Clearing Member fails to perform its delivery obligations to 

the Clearinghouse, for the avoidance of doubt, Clearing Members will not, under any 

circumstances, be required to own, hold, or control the underlying asset under these Rules 

unless the Clearing Member holds positions requiring delivery in its own proprietary 

account, but Clearing Members are responsible for ensuring their customers, as 

Participants, are able to satisfy or satisfy their obligations regarding delivery and 

acceptance thereof under the applicable Rules.

(g) In a Clearing Member default that involves a delivery failure, the 

Clearinghouse will ensure the financial performance to the Clearing Member whose actions 

or omissions did not cause or contribute to the delivery failure (the “Affected Clearing 

Member”). The Clearinghouse powers will include, but are not limited to, the right to sell 

or liquidate the underlying asset subject to delivery and to distribute the proceeds as 

appropriate and access the funds and collateral available in a default in accordance with 

Rule 817. For purposes of this Rule, “financial performance” means payment of 

commercially reasonable costs of the Affected Clearing Member related to replacing the 

failed delivery but does not include physical performance or legal fees. For the avoidance 

of doubt, payment of reasonable costs will be based on the price of the underlying asset 

when delivery should have been made, and the Clearinghouse is not obligated to make or 

accept delivery of the actual Digital Asset. Neither the Exchange nor the Clearinghouse 

will have any responsibility or liability to any Person for the use of, or any failure, error, 

action or omission of, the Settlement Facility.

(h) An Affected Clearing Member seeking financial performance must provide 

prompt notice to the Clearinghouse of the delivery failure and a good faith estimate of any 

financial performance being sought within one (1) hour of the delivery deadline for the 

product. This deadline may be extended by the Exchange for extenuating circumstances in 

its sole discretion. An Affected Clearing Member seeking financial performance must 

provide the Clearinghouse with a detailed statement with supporting documentation of the 

amount sought, as well as any other documentation requested by the Clearinghouse.

(i) Settlement Timelines:
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Final Physical Settlement Timeline

T-5 

All end of day, positions (long and short) must be margined at full notional 

value in USD with the Clearinghouse following the Daily and Intraday 

Settlement Timelines.

T-2 5:00 p.m. Settlement Facility opens to delivering market participants. 

T 

9:30 a.m. 

Trading terminates and final settlement prices are reported by the Exchange to 

the Clearinghouse. Clearing Members are responsible for ensuring all market 

participants making delivery deliver underlying assets through the Settlement 

Facility. All remaining open positions serve as a binding Delivery Notice to the 

Clearinghouse.

12:00 p.m. 

Clearinghouse finalizes delivery assignments, releases delivery payments by 

instruction to the Settlement Bank, and releases underlying assets by 

instruction to the Settlement Facility. Delivery is complete and margins are 

released.

1:00 p.m. The Settlement Facility and Settlement Bank process pays and collects.

Daily Settlement Timeline

T 

3:00 p.m. The Exchange reports daily settlement prices and the Clearinghouse snapshots 

positions to calculate margin requirements. 

6:00 p.m.

The Clearinghouse submits initial and variation margin amounts to Clearing 

Members and the Settlement Bank system and the Settlement Bank commits to 

payments.

T+1 9:30 a.m. The Settlement Bank processes pays and collects.

Intraday Settlement Timeline1

T 

11:30 a.m.

The Exchange reports daily settlement prices and the Clearinghouse snapshots 

positions to calculate margin requirements. 

12:00 p.m.

The Clearinghouse submits initial and variation margin amounts to Clearing 

Members and the Settlement Bank system and the Settlement Bank commits to 

payments.

1:00 p.m. The Settlement Bank processes pays and collects.

Rule 814 Defaults

If any of the following events occurs with respect to a Clearing Member (each, a 

“Default”), the Clearing Member shall be in Default if the Clearing Member:

(a) fails to fulfill any financial or other obligation to the Clearinghouse or the 

1 Note: Intraday Settlements are performed on an as-needed basis and may not occur every trading day.
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Exchange;

(b) fails to pay when due any amount owing to the Clearinghouse or the 

Exchange;

(c) fails to maintain its registration as a FCM;

(d) fails to be a member of NFA;

(e) is suspended from membership of, or participation in, any exchange, 

clearinghouse or Self-Regulatory Organization, or is suspended from dealings in Contracts 

by any Government Authority or Self-Regulatory Organization, or by act of any judicial 

authority;

(f) makes a materially false misrepresentation, statement, or omission to the 

Clearinghouse or the Exchange;

(g) files for bankruptcy or is deemed to be bankrupt under U.S. federal or state 

bankruptcy laws, or any comparable non-U.S. laws;

(h) is Insolvent; or

(i) becomes the subject of receivership proceedings,

then such Clearing Member, in addition to any other remedy available to the Clearinghouse at law 

or equity, shall:

(a) shall be liable to the Clearinghouse as set forth in Rule 819; and

(b) be automatically and without further action suspended by the Clearinghouse 

as a Clearing Member, except that such suspension may be temporarily postponed by the 

President if the President determines that such suspension would not be in the best interests 

of the Clearinghouse.

Rule 815 Application of Funds

In the event of a Clearing Member Default, all such Clearing Member’s segregated 

customer accounts shall be auctioned according to Clearinghouse procedures. The financial 

amounts, if any, resulting from such auction shall be applied as follows to reduce or any eliminate 

any financial shortfall:

a) Defaulting Clearing Member. First, the financial amounts generated from the 

auction shall be applied to cover the shortfall. The Clearinghouse may make 

immediate demand upon any guarantor of the defaulting Clearing Member.

b) Clearinghouse. Second, the Clearinghouse Guaranty Fund contribution shall be
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applied to cover any remaining shortfall.

c) Non-Defaulting Clearing Members. Third, each non-Defaulting Clearing 

Member’s guaranty fund contribution, if any, shall be assessed up to a

maximum of $1,000,000 of the remaining shortfall and Guaranty Fund 

replenishment based on each Clearing Member’s pro rata share of Margin

requirements in relation to the Clearinghouse’s aggregate Margin requirements. 

A Clearing Member that does not satisfy any such assessment shall be in 

Default.

d) Contract Extinguishment. Fourth, the Clearinghouse may partially or fully

extinguish of Contracts.

Rule 816 Liquidation on Termination or Suspension of Clearing Member

If a Clearing Member is in Default, has been suspended by the Clearinghouse, or ceases to 

be a Clearing Member, then such Person shall be prohibited from establishing new positions and 

all open Contracts carried by the Clearinghouse for such Person shall be closed-out as 

expeditiously as practicable such that:

(a) Open Contracts are transferred by the Clearing Member and accepted by 

one or more other Clearing Members, with the prior consent of the Clearinghouse, or 

transferred by the Clearinghouse to one or more other Clearing Members pursuant to an 

auction of the Contracts or other procedure instituted by the Clearinghouse;

(b) Contracts subject to outstanding delivery obligations are Physically Settled 

or transferred by the Clearinghouse to one or more other Clearing Members pursuant to an 

auction of the Contracts or other procedure instituted by the Clearinghouse; 

(c) The President, or in the absence of the President, any Director, may 

determine that, in his or her opinion, liquidation be deferred for the protection of the 

financial integrity of the Clearinghouse; or 

(d) Open Contracts are liquidated in the manner set forth in Rule 817 to the 

extent that paragraphs (a), (b), or (c) do not apply.

Rule 817 Close-outs

The open Contracts of a Clearing Member that are required to be liquidated shall be 

liquidated in such manner as the Clearinghouse, in its sole discretion, may direct. Without limiting 

the generality of the foregoing:

(a) Any such liquidation may be effected by executing block trades with one or 

more Clearing Members or Participants or by directly entering orders into the Exchange’s 

trading platform for the purchase or sale of Contracts. The President may designate and 

authorize an individual, and may engage a third party, to be responsible for implementing 
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such liquidation.

(b) Notwithstanding any other provision herein, any such liquidation may be 

effected without placing orders for execution, by making appropriate book entries on the 

records of the Clearinghouse (including, without limitation, by pairing and canceling 

offsetting long and short positions in the Contracts carried by the Clearing Member) at a 

price equal to the Settlement Price on the day such liquidation is ordered or at such other 

price as the Board of the Clearinghouse may establish; provided, however, if an order for 

relief has been entered with respect to such Person and its property is thereby subject to the 

control of a bankruptcy court, the Clearinghouse will not effect any such liquidation by 

book entry except as may be permitted by CFTC Rules. 

(c) All liquidations made pursuant to this Rule shall be for the account and risk 

of the Person which ceases to be a Clearing Member or which is suspended as a Clearing 

Member. The Clearing Member shall be liable to the Clearinghouse for any commissions 

or other expenses incurred in liquidating such Contracts.

Rule 818 Close-out Netting

If at any time the Clearinghouse (i) institutes or has instituted against it a proceeding 

seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or 

insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its 

winding up or liquidation, and, in the case of any such proceeding or petition presented against it, 

such proceeding or petition results in a judgment of insolvency or bankruptcy or the entry of an 

order for relief or the making of an order for the Exchange’s or Clearinghouse’s winding-up or 

liquidation, or (ii) approves resolutions authorizing any proceeding or petition described in clause 

(i) above (collectively, a “Bankruptcy Event”), all open positions in the Clearinghouse shall be 

closed promptly.

If at any time the Clearinghouse fails to comply with an undisputed obligation to pay 

money or deliver property to a Clearing Member that is due and owing in connection with a 

transaction cleared by the or Clearinghouse, for a period of five (5) Business Days from the date 

that the or Clearinghouse receives notice from the Clearing Member of the past due obligation, the 

Clearing Member’s open proprietary and customer positions at the Clearinghouse shall, at the 

election of that Clearing Member, be closed promptly.

If at any time the Board of the Clearinghouse determines, by virtue of the number of 

withdrawing Clearing Members or otherwise, that a winding up (offset) of all outstanding positions 

at the Clearinghouse is prudent, then all open positions at the Clearinghouse shall be closed 

promptly.

At such time as a Clearing Member’s positions are closed:

(a) The obligations of the Clearinghouse to a Clearing Member in respect of 

such Clearing Member’s House Account, all Collateral and positions therein and deposits 

to the Guaranty Fund shall be netted, in accordance with the Bankruptcy Code, the CEA 
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and CFTC Rules against the obligations of that Clearing Member in respect of its House 

Account, all Collateral and positions therein, its obligations as guarantor of the 

performance of its Customers and its then-matured obligations, if any, to the Guaranty 

Fund, to the Clearinghouse. For the avoidance of doubt, all of the property in a Clearing 

Member’s House Account on deposit with the Clearinghouse shall be deemed to be subject 

to a single master netting agreement with the result that any excess which is on deposit 

with the Clearinghouse shall be applied to reduce any deficiency or obligation of the 

Clearing Member; and 

(b) All obligations of the Clearinghouse to a Clearing Member in respect of 

such Clearing Member’s Customer Account and all positions and Collateral therein shall 

be separately netted against the positions, accounts and Collateral of such Clearing 

Member’s customers in accordance with the requirements of the Bankruptcy Code, the 

CEA and CFTC Rules.

All positions that are open immediately before being closed in accordance with this Rule 

shall be valued in accordance with the following procedures:

(a) As promptly as reasonably practicable, but in any event within 30 days of 

the (i) Bankruptcy Event, (ii) if a Clearing Member elects to have its open positions closed 

as described above, the date of the election, or (iii) or (iii) the determination by the Board 

of Clearinghouse to wind-up all outstanding positions as described above, the 

Clearinghouse shall fix a U.S. dollar amount (the “Close-out Value”) to be paid to or 

received from the Clearinghouse by each Clearing Member, after taking into account all 

applicable netting and offsetting pursuant to the provisions of this Rule.

(b) The Clearinghouse shall value open positions subject to close-out by using 

the market prices at the moment that the positions were closed-out, assuming the markets 

were operating normally at such moment. If the markets were not operating normally at 

such moment, the Clearinghouse shall exercise its discretion, acting in good faith and in a 

commercially reasonable manner, in adopting methods of valuation to produce reasonably 

accurate substitutes for the values that would have been obtained from the market if it had 

been operating normally at the moment that the positions were closed-out.

(c) In determining a Close-out Value, Clearinghouse may consider any 

information that it deems relevant, including but not limited to (i) prices for underlying 

interests in recent transactions, as reported by the market or markets for such interests, (ii) 

quotations from leading dealers in the underlying interest, setting forth the price (which 

may be a dealing price or an indicative price) that the quoting dealer would charge or pay 

for a specified quantity of the underlying interest, (iii) relevant historical and current 

market data for the relevant market, provided by reputable outside sources or generated 

internally, and (iv) values derived from theoretical pricing models using available prices 

for the underlying interest or a related interest and other relevant data.

(d) Amounts stated in a currency other than U.S. dollars shall be converted to 

U.S. dollars at the current rate of exchange, as determined by the Clearinghouse.
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(e) If a Clearing Member has a negative Close-out Value, it shall promptly pay 

that amount to the Clearinghouse.

The Clearinghouse intends that certain provisions of this Rule be interpreted in relation to 

certain terms (identified by quotation marks) that are defined in the Federal Deposit Insurance 

Corporation Improvement Act of 1991 (“FDICIA”), as amended, as follows:

(a) The Clearinghouse is a “clearing organization.”

(b) An obligation of a Clearing Member to make a payment to the 

Clearinghouse, or of the Clearinghouse to make a payment to a Clearing Member, subject 

to a netting agreement, is a “covered clearing obligation” and a “covered contractual 

payment obligation.”

(c) An entitlement of a Clearing Member to receive a payment from the 

Clearinghouse, or of the Clearinghouse to receive a payment from a Clearing Member, 

subject to a netting contract, is a “covered contractual payment entitlement.”

(d) The Clearinghouse is a “member,” and each Clearing Member is a 

“member.”

(e) The amount by which the covered contractual payment entitlements of a 

Clearing Member or the Clearinghouse exceed the covered contractual payment 

obligations of such Clearing Member or the Clearinghouse after netting under a netting 

contract is its “net entitlement.”

(f) The amount by which the covered contractual payment obligations of a 

Clearing Member or the Clearinghouse exceed the covered contractual payment 

entitlements of such Clearing Member or the Clearinghouse after netting under a netting 

contract is its “net obligation.”

(g) The Rules of the Clearinghouse, including this Rule, are a “netting 

contract.”

Rule 819 Guaranty Fund

(a) The Clearinghouse shall establish and maintain a Guaranty Fund.

(b) The Clearinghouse is solely responsible for the capitalization of the 

Guarantee Fund.

(c) Clearing Members are not required to make an contribution to the Guaranty

Fund.
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Rule 820 Margins and Liquidations 

(a) The Clearinghouse shall establish minimum Margin requirements and 

Clearing Members shall collect Margins for customer accounts at or in addition to such 

minimum Margins in accordance with CFTC Rule 39.13(g)(8)(ii).

(b) The Clearinghouse may change Margin requirements at any time 

superseding previous Margin requirements and post in accordance with CFTC Rule

39.13(g)(8).

(c) The Clearinghouse shall accept US Dollars as Margin in a manner 

acceptable to the Clearinghouse and Approved Financial Institutions, such as wire transfer.

(d) The Clearinghouse, at its sole discretion, may make a Margin call at any 

time for any Participant based on the Participant’s open interest.

(e) The Clearinghouse may direct a Participant or Clearing Member to liquidate 

positions or transfer positions to another Clearing Member if the Clearing Member fails to 

deposit Margin as required by the Clearinghouse. If transfer or liquidation instructions are 

not satisfied within one (1) hour, the Clearinghouse will originate orders to take such action 

directly.

(f) Liquidation costs incurred with actions taken in accordance with the Rules 

will be included in the failed Participants losses and any financial obligations owed by a 

Clearing Member to the Clearinghouse after such liquidations or transfers may be assessed 

to that Clearing Member’s financial resources available under Rule 907.

Rule 821 Transfers of Open Positions

Any transfer of a Contract shall be subject to the following:

(a) Trades and positions in Contracts may be transferred on the books of one 

Clearing Member or between Clearing Members provided that:

(i) The transfer constitutes a change from one account to another where 

the underlying ownership in the accounts remains the same;

(ii) The transfer was made to correct an error in the clearing of a trade 

and is completed within two business days from the trade date;

(iii) The transfer is in connection with, or is the result of, a merger, asset 

purchase, consolidation or similar non-recurring transaction between 

two or more entities where one or more entities become the successor 

in interest to one or more other entities; or

(iv) if, in the judgment of the Clearinghouse, the situation so requires and 
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such interest is necessary to maintain market stability.

(b) Any transfer permitted by the Clearinghouse shall be recorded and carried 

on the books of the receiving Clearing Member at the original prices and trade dates.

Rule 822 Amounts Payable to the Clearinghouse

In the event of a Clearing Member Default, and upon completion of the liquidation and/or 

transfer of the positions of a Clearing Member (whether in Default or not) pursuant to the Rules, 

the Clearinghouse shall be entitled on demand to recover from such Clearing Member all amounts 

due to the Clearinghouse for all losses, liabilities, damages, costs and expenses (including without 

limitation legal fees and disbursements) incurred by the Clearinghouse in connection with such 

Default, liquidation and/or transfer, and such Clearing Member’s Collateral, together with any 

other assets held by, pledged to or otherwise available to the Clearinghouse, including any 

guarantee, shall be applied by the Clearinghouse to discharge the obligations of such Clearing 

Member to the Clearinghouse (including any amounts, and costs and expenses associated with the 

liquidation, transfer or management of Contracts held in or for the accounts of such Clearing 

Member, and any fees, assessments or fines imposed by the Clearinghouse on such Clearing 

Member). The foregoing is in addition to any other remedy available to the Clearinghouse at law 

or equity.

Rule 823 Clearing Fees

The Clearinghouse shall have the right to instruct each Approved Financial Institution to 

debit the house or proprietary account maintained by each Clearing Member, and/or any other 

account designated by such Clearing Member for purposes of this Rule, for any payment of fees, 

charges or other amounts (other than fines or penalties) due to the Clearinghouse or due to the 

Exchange (if and to the extent the Clearinghouse shall be acting as a collection agent for the 

Exchange).

Rule 824 Public Information

The Clearinghouse shall make public the terms and conditions of each Contract, all fees 

charged by the Clearinghouse, the Margin-setting methodology used by the Clearinghouse, the 

size and composition of the Guaranty Fund, and Settlement Prices, volume and open interest for 

each Contract. The Clearinghouse will also make its Rulebook, list of Clearing Members and daily 

trading information available on the Clearinghouse Website. The Clearinghouse will provide 

public notice of a Default on the Clearinghouse Website.

CHAPTER 9

[RESERVED]
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CHAPTER 10

MISCELLANEOUS

Rule 1001 Trading by Officials Prohibited; Misuse of Material, Non-Public Information

(a) Terms used in this Rule 901 and not otherwise defined in the Rules shall 

have the meanings set forth in CFTC Rules 1.3 and 1.59.

(b) No Official may trade, directly or indirectly, (i) any Contract traded on or 

subject to the Rules or any related financial instrument, or (ii) any Contract or financial 

instrument where such Official has access to material nonpublic information concerning 

such Contract or financial instrument.

(c) The Chief Regulatory Officer (or, in the case of the Chief Regulatory 

Officer, the Board) may grant exemptions from the provisions of paragraph (a) to Officials 

on a case-by-case basis under circumstances which are not contrary to the purposes of this 

rule and CFTC Regulation 1.59. Such circumstances may include, but are not necessarily 

limited to:

(i) participation in pooled investment vehicles where such Official has no 

direct or indirect control over Transactions effected by or for the account 

of the pool;

(ii) service by such Official as an executor or administrator of an estate;

(iii) service by such Official in any other fiduciary capacity, such as an 

officer of a charitable organization, in which such Official receives no 

pecuniary benefit from the trading of Contracts or other financial 

instruments;

(iv) trading in Contracts or financial instruments executed on or subject to 

the rules of a swap execution facility, a designated contract market or a 

national securities exchange under circumstances in which such 

Official’s access to material non-public information in respect of such 

financial instruments is sufficiently minimal or attenuated so as to be 

insignificant; and

(v) such other circumstances as the Chief Regulatory Officer (or, in the case 

of the Chief Regulatory Officer, the Board) may determine.

(d) For the avoidance of doubt, participation by an Official in a retirement plan 

sponsored by the Exchange shall not be deemed to constitute trading directly or indirectly 

in a Contract or financial instrument, notwithstanding such plan’s trading of Contracts or 

financial instruments.

(e) Any Official that has received an exemption under Rule 901(c) must:
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(i) furnish to the Exchange (or, in the case of the Chief Regulatory Officer, 

to the Board) account statements and other documents relevant to the 

trading activities that are so exempted; and

(ii) inform the Chief Regulatory Officer (or, in the case of the Chief 

Regulatory Officer, the Board) within one business day of any material 

change of information that may affect such Official’s qualification for 

such exemption.

(f) Officials, agents and independent contractors of the Exchange are 

prohibited from disclosing material non-public information obtained as a result of their 

employment, agency relationship or engagement with the Exchange where the Official, 

agent or independent contractor expected or should have reasonably expected that the 

information disclosed may assist a Person in trading any Contract, any Contract traded on 

another designated contract market or other market, or any related underlying commodity 

or security.

Rule 1002 Market Data

(a) Each Participant and Clearing Member, on behalf of itself and each of its 

Affiliates, Authorized Users and other Persons affiliated with any of the foregoing, hereby 

acknowledges and agrees that the Exchange owns and shall retain all right, title and interest 

in and to the Exchange and the Clearinghouse owns and shall retain all right, title and 

interest in and to the Clearinghouse, 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 (i) copyright, (ii) trade mark, 

(iii) service mark, (iv) trade secret, (v) trade name, (vi) data or database rights, (vii) design 

rights, (viii) moral rights, (ix) inventions, whether or not capable or protection by patent or 

registration, (x) rights in commercial information or technical information, including 

know-how, research and development data and manufacturing methods, (xi) patent, and 

(xii) other intellectual property and ownership rights, including applications for the grant 

of any of the same, in or to the Exchange or the Clearinghouse and all other related 

proprietary rights of the Exchange, the Clearinghouse, and/or any of their 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 

transmitted by means of any of the foregoing, including, without limitation, the market 

data, the “Proprietary Information”). Each Participant and Clearing Member, on behalf 

of itself and each of its Affiliates, Registered Users and other Persons affiliated with any 

of the foregoing, further acknowledges and agrees that the Proprietary Information is the 

exclusive, valuable and confidential property of the Exchange or the Clearinghouse. Each 

Participant and Clearing Member acknowledges and agrees that it shall not and shall not 

permit its Affiliates, Authorized Users and other Persons affiliated with any of the 

foregoing to, 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 the Exchange or the Clearinghouse or the Proprietary Information. Each 
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Participant and Clearing Member, further agrees to and to cause each of its Affiliates, 

Authorized Users and other Persons affiliated with any of the foregoing to, keep the 

Proprietary Information confidential and not to transfer, rent, lease, loan, sell or distribute, 

directly or indirectly, all or any portion of the Exchange or the Clearinghouse or any 

Proprietary Information.

(b) Notwithstanding any other provision of this Rule 902, each 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 the Exchange by such Participant and its 

Authorized Users.

(c) Subject to the provisions of paragraph (a), all Participants, Authorized Users 

and other Persons affiliated with either of the foregoing hereby acknowledge and agree that 

the Exchange 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 Participants, Registered Users 

and such other Persons may use market data for their own internal business purposes. 

Without limiting the generality of the foregoing, Participants, Authorized Users and other 

Persons affiliated with any of the foregoing may not distribute, sell or retransmit market 

data Exchange to any third party.

(d) Each Participant hereby grants the Exchange a non-exclusive, perpetual, 

freely transferable, world-wide and royalty-free license to use, distribute, sub-license, 

disclose and sell market data, in any manner, media and jurisdiction, for the benefit of the 

Exchange and/or its Affiliates; provided that, except as may otherwise be required by law 

or permitted by Rule 208 or in any written agreement between the Exchange and such 

Participant, the Exchange shall not disclose market data other than on an aggregated basis 

that does not directly or indirectly identify individual Participants.

Rule 1003 Recording of Communications

The Exchange, Clearinghouse and Regulatory Services Provider may record conversations 

and retain copies of electronic communications between Exchange, Clearinghouse and/or

Regulatory Services Provider personnel, on the one hand, and Participants and their Authorized 

Users, employees, and/or agents and Clearing Members and their employees and/or agents, on the 

other hand. Any such recordings may be retained by the Exchange, Clearinghouse or the 

Regulatory Services Provider in such manner and for such periods of time as required by 

Applicable Law.

Rule 1004 Confidentiality

Except as provided in this Rule 904, all information provided by a Participant or Clearing 

Member to the Exchange or the Clearinghouse shall be held in confidence and shall not be made 

known to any other Person except as follows:
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(a) with the consent of the Participant or Clearing Member, as applicable, 

providing such information;

(b) to a Governmental Authority, if the Exchange or the Clearinghouse is 

requested or legally required to do so by such government agency;

(c) pursuant to legal process;

(d) to a Clearinghouse of which such a Clearing Member is a member or in 

connection with the clearing of a Contract;

(e) subject to appropriate confidentiality requirements, to any Person providing 

services to the Exchange or the Clearinghouse, including but not limited to the Regulatory 

Services Provider;

(f) to the Board, any committee, Exchange or Clearinghouse Employee, 

attorneys and auditors, and to agents and independent contractors that have been engaged 

by the Exchange or the Clearinghouse who require such information in connection with the 

discharge of their duties to the Exchange or the Clearinghouse; and

(g) as otherwise permitted under the Rules.

Rule 1005 Force Majeure

Notwithstanding any other provision of the Rules, the Exchange and Clearinghouse shall 

not be obligated to perform its obligations under the rules or any agreement with a Participant or 

Clearing Member, or to compensate any Person for losses occasioned by any delay or failure of 

performance, to the extent a delay or failure of performance is the result of circumstances that the 

Exchange or the Clearinghouse determines, in each of its sole discretion, may have an adverse 

effect upon the functions and facilities of the Exchange or the Clearinghouse, including, but not 

limited to, acts of God, fire or other natural disasters, inclement weather, embargos, bomb threats, 

pressure waves, disruption of electricity, pandemics, lockdowns, government-mandated work 

restrictions, communication outages or delays, acts or threats of terrorism, riots, commotions, 

strikes, war, invasions, hostilities (whether declared or not), and contaminations.

Rule 1006 Extension or Waiver of Rules

The Exchange or the Clearinghouse may, in each of its sole discretion, waive, or extend 

the time period for performing, any act or acts designated by the rules, but only to the extent such 

waiver or extension is not inconsistent with Applicable Law.

Rule 1007 Effect of Amendment, Repeal or New Rule

The Exchange or the Clearinghouse may, in compliance with the CEA and CFTC Rules, 

amend or repeal any rule and/or adopt new Rules. Any such amendment or repeal of a Rule or 

adoption of a new Rule, shall, upon the effective date of such amendment, repeal or adoption, as 

applicable, be binding on all Persons subject to the jurisdiction of the Exchange and 
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Clearinghouse (regardless of when any such Person became subject to the Exchange’s and 

Clearinghouse’s jurisdiction) and all Contracts (regardless of whether any such contract was 

entered into before, on or after such effective date).

Rule 1008 Signatures

Rather than rely on an original signature, the Exchange and Clearinghouse 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, 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 1009 Governing Law; Legal Proceedings

(a) The rules, and the rights and obligations of the Exchange, Clearinghouse,

Participants, and Clearing Members under the Rules shall be governed by, and construed 

in accordance with, the laws of the State of Illinois applicable to contracts executed and 

performed wholly within the State of Illinois without regard to any provisions of Illinois

law that would apply the substantive law of a different jurisdiction.

(b) Any action, suit or proceeding against the Exchange or the Clearinghouse, 

and any of their Officials, Officers, Directors, limited liability company members, 

employees, agents, or any member of any committee must be brought within one (1) 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 the City of Chicago, Illinois. Each 

Participant and Clearing Member expressly consents, for itself and its Authorized Users, 

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 Participant or Clearing Member or an Affiliate thereof

fails to prevail in a lawsuit or other legal proceeding instituted by such Participant, Clearing

Member or such Affiliate against (i) the Exchange or the Clearinghouse, or (ii) any Affiliate 

of the Exchange or the Clearinghouse or any of their respective Officials, officers, 

directors, equity holders, employees, agents, or any member of any committee, such 

Participant, Clearing Member or Affiliate shall pay to the Exchange or the Clearinghouse, 

as applicable, all reasonable costs and expenses, including attorneys’ fees, incurred by the 

Exchange or the Clearinghouse in the defense of such proceeding. This paragraph (b) shall 

not apply to Exchange or Clearinghouse disciplinary actions, appeals thereof, or an instance 

in which the Board has granted a waiver of the provisions hereof.

Rule 1010 Indemnification.

Each current and former Participant and current and former Clearing Member shall defend, 

indemnify and hold harmless each of the Exchange and the Clearinghouse and their Affiliates, and 

its and their owners, officers, directors, Employees, and agents (collectively, the “Indemnified 

Parties”), for any and all losses, damages, costs and expenses (including attorneys’ fees) incurred 
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by the Indemnified Parties as a result (direct or indirect) of such current and former Participant’s 

or current and former Clearing Member’s violation or alleged violation of the Rules or Applicable 

Law or material breach of any written agreement between the current or former Participant or

current or former Clearing Member and the Exchange or the Clearinghouse and their Affiliates.

Rule 1011 LIMITATION OF LIABILITY; NO WARRANTIES

(A) PARTICIPANT’S AND CLEARING MEMBER’S USE OF THE SERVICES, 

THE SYSTEM, EXCHANGE AND CLEARINGHOUSE PROPERTY AND ANY OTHER 

INFORMATION AND MATERIALS PROVIDED BY THE EXCHANGE OR THE 

CLEARINGHOUSE, IS AT THE PARTICIPANT’S AND CLEARING MEMBER’S OWN 

RISK, AND THE SERVICES, THE EXCHANGE AND CLEARINGHOUSE PROPERTY 

AND ANY OTHER INFORMATION AND MATERIALS PROVIDED BY THE EXCHANGE

OR THE CLEARINGHOUSE HEREUNDER ARE PROVIDED ON AN “AS IS” AND “AS 

AVAILABLE” BASIS, WITHOUT WARRANTIES OR REPRESENTATIONS OF ANY 

KIND, EXPRESS OR IMPLIED, BY STATUTE, COMMON LAW OR OTHERWISE 

INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A 

PARTICULAR PURPOSE AND NON-INFRINGEMENT AND ANY WARRANTIES 

ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICE. THE

EXCHANGE AND THE CLEARINGHOUSE DO NOT GUARANTEE THAT (i) EXCHANGE 

AND CLEARINGHOUSE PROPERTY OR SERVICES WILL OPERATE IN AN ERROR 

FREE, SECURE OR UNINTERRUPTED MANNER, OR (ii) ANY INFORMATION OR 

MATERIALS PROVIDED BY THE EXCHANGE, THE CLEARINGHOUSE OR 

ACCESSIBLE THROUGH EXCHANGE OR CLEARINGHOUSE PROPERTY WILL BE 

ACCURATE, COMPLETE, RELIABLE, OR TIMELY, OR (iii) THE EXCHANGE AND 

CLEARINGHOUSE PROPERTY OR ANY ASPECTS OF THE SERVICES WILL BE FREE 

FROM VIRUSES OR OTHER HARMFUL COMPONENTS. NEITHER EXCHANGE NOR 

ITS AFFILIATES SHALL HAVE ANY LIABILITY FOR THE CREDITWORTHINESS OF 

ANY PARTICIPANT OR FOR THE ACTS OR ANY ASPECT OF THE SERVICES OR 

SYSTEM. PARTICIPANTS AND CLEARING MEMBERS ARE SOLELY RESPONSIBLE 

FOR THE SECURITY AND INTEGRITY OF THE THEIR TECHNOLOGY. PARTICIPANTS 

AND CLEARING MEMBERS ACKNOWLEDGE THAT THEIR ACCESS TO THE SYSTEM

AND THE SERVICES IS INTERNET-BASED AND THAT THE EXCHANGE AND THE 

CLEARINGHOUSE HAVE NO CONTROL OVER THE INTERNET OR PARTICIPANT’S 

AND CLEARING MEMBER’S CONNECTIONS THERETO. PARTICIPANTS AND 

CLEARING MEMBERS FURTHER ACKNOWLEDGE THAT THE INTERNET, 

COMPUTER NETWORKS, AND COMMUNICATIONS LINKS AND DEVICES 

NECESSARY TO ENABLE PARTICIPANTS AND CLEARING MEMBERS TO ACCESS 

AND USE THE SYSTEM AND THE SERVICES ARE INHERENTLY INSECURE AND 

VULNERABLE TO ATTEMPTS AT UNAUTHORIZED ENTRY AND THAT NO FORM OF 

PROTECTION CAN ENSURE PARTICIPANT’S AND CLEARING MEMBER’S DATA, 

HARDWARE, OR SOFTWARE OR THE SYSTEM OR OTHER EXCHANGE OR 

CLEARINGHOUSE PROPERTY WILL BE FULLY SECURE. FURTHERMORE, NEITHER 

THE EXCHANGE NOR THE CLEARINGHOUSE SHALL BE OBLIGATED TO MONITOR 

OR VERIFY ANY INFORMATION DISPLAYED THROUGH THE SYSTEM.
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(B) EXCLUDING ANY LIABILITY FOR SUCH PARTY’S FRAUD OR WILLFUL 

MISCONDUCT, AND EXCLUDING ANY INDEMNIFICATION OBLIGATIONS UNDER A

PARTICIPANT AGREEMENT OR A CLEARING MEMBER AGREEMENT (AS 

APPLICABLE), EACH PARTY AGREES THAT IN NO EVENT SHALL EITHER PARTY BE 

LIABLE FOR ANY INDIRECT, SPECIAL, PUNITIVE, EXEMPLARY OR 

CONSEQUENTIAL DAMAGES, INCLUDING DAMAGES FOR LOSS OF PROFITS, LOSS 

OF REVENUE, LOSS OR CORRUPTION OF DATA, TRADING LOSSES OR BUSINESS 

INTERRUPTION AND THE LIKE, ARISING IN ANY MANNER WHATSOEVER OUT OF 

OR IN CONNECTION WITH THIS AGREEMENT OR ANY USE (WHETHER OR NOT 

AUTHORIZED) OR INABILITY TO USE EXCHANGE OR CLEARINGHOUSE PROPERTY 

OR ANY OTHER INFORMATION OR MATERIALS PROVIDED TO A PARTICIPANT OR 

CLEARING MEMBER BY THE EXCHANGE OR CLEARINGHOUSE OR ACCESSIBLE 

THROUGH THE SYSTEMS OR SERVICES, INCLUDING THE ACCURACY, 

COMPLETENESS, RELIABILITY, TIMELINESS, QUALITY, SECURITY, 

PERFORMANCE, OR PRICING OF THE SYSTEMS OR SERVICES OR ANY FAILURES, 

MALFUNCTIONS, INTERRUPTIONS, DEGRADATIONS OR DELAYS ASSOCIATED 

THEREWITH, REGARDLESS OF WHETHER SUCH DAMAGES ARISE IN TORT, 

CONTRACT, OR OTHERWISE, AND EVEN IF IT HAS BEEN ADVISED OF THE 

POSSIBILITY OF SUCH DAMAGES. 

(C) NOTWITHSTANDING THE FOREGOING, IF A COURT OR OTHER 

TRIBUNAL OF COMPETENT JURISDICTION SHOULD FIND THE EXCHANGE, THE 

CLEARINGHOUSE OR ANY OF THEIR AFFILIATES LIABLE FOR ANY LOSS, DAMAGE 

OR EXPENSES, THE AGGREGATE LIABILITY OF THE EXCHANGE, THE 

CLEARINGHOUSE AND THEIR AFFILIATES, REGARDLESS OF THE FORM OF 

ACTION, SHALL IN NO EVENT EXCEED THE GREATER OF (i) $100,000 AND (ii) THE 

TOTAL COMMISSIONS, FEES, OR OTHER AMOUNTS (EXCLUDING ANY APPLICABLE 

TAXES AND DUTIES) PAID TO THE EXCHANGE AND CLEARINGHOUSE BY THE 

APPLICABLE PARTICIPANT OR CLEARING MEMBER DURING THE SIX MONTHS 

PRECEDING THE DATE ON WHICH THE EVENTS GIVING RISE TO SUCH LIABILITY 

AROSE.

(D) ANY CLAIM FOR REDRESS OR DAMAGES HEREUNDER SHALL BE 

FILED IN A COURT OF COMPETENT JURISDICTION OR FILED FOR ARBITRATION IN 

ACCORDANCE WITH RULE 701 WITHIN ONE (1) YEAR OF THE DATE ON WHICH 

SUCH CLAIM ALLEGEDLY AROSE. FAILURE TO INSTITUTE LITIGATION OR 

ARBITRATION WITHIN SUCH TIME PERIOD SHALL BE DEEMED TO BE A WAIVER 

OF SUCH CLAIM AND THE CLAIM SHALL BE OF NO FURTHER FORCE OR EFFECT. 

THE ALLOCATIONS OF LIABILITY IN THIS RULE 1011 REPRESENT THE AGREED 

AND BARGAINED FOR UNDERSTANDING OF THE PARTIES, AND EACH PARTY 

ACKNOWLEDGES THAT THE OTHER PARTY’S RIGHTS AND OBLIGATIONS 

HEREUNDER REFLECT SUCH ALLOCATIONS. THE PARTIES AGREE THAT THEY 

WILL NOT ALLEGE THAT THIS REMEDY FAILS ITS ESSENTIAL PURPOSE.

(E) PARTICIPANT FURTHER AGREES THAT THE PROVISIONS OF THE 

RULES OF THE CLEARINGHOUSE LIMITING THE LIABILITY OF THE 
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CLEARINGHOUSE TO ITS MEMBERS SHALL APPLY TO PARTICIPANT AS FULLY AS 

IF PARTICIPANT WERE A MEMBER OF THE CLEARINGHOUSE MUTATIS MUTANDIS. 

THE CLEARINGHOUSE SHALL NOT BE LIABLE FOR ANY OBLIGATIONS OF A NONCLEARING MEMBER, OBLIGATIONS OF A CLEARING MEMBER TO A NONMEMBER, 

OBLIGATIONS OF A CLEARING MEMBER TO ANOTHER MEMBER OF THE 

CLEARINGHOUSE WHO IS ACTING FOR HIM AS BROKER, OR OBLIGATIONS TO A 

CUSTOMER BY A CLEARING MEMBER; NOR SHALL THE CLEARINGHOUSE 

BECOME LIABLE TO MAKE DELIVERIES TO OR ACCEPT DELIVERIES FROM A 

CUSTOMER OF ITS CLEARING MEMBERS.

(F) NEITHER THE EXCHANGE NOR THE CLEARINGHOUSE WILL HAVE 

ANY RESPONSIBILITY OR LIABILITY TO ANY PERSON FOR THE USE OF, OR ANY 

FAILURE, ERROR, ACTION OR OMISSION OF, THE SETTLEMENT FACILITY.

Rule 1012 Affiliate Clearing Member

(a) The Exchange and Clearinghouse permit Bitnomial Clearing, LLC, an affiliate of 

the Exchange and Clearinghouse, to be a Clearing Member, or customer of a Clearing Member. 

(b) The Affiliate Clearing Member shall not receive preferential treatment from the 

Exchange or Clearinghouse, nor shall it have an inherent advantage over any other Participant or 

Clearing Member. 

(c) Affiliate Clearing Member customers shall not have access to the Exchange or 

Clearinghouse material non-public information, and the Exchange and Clearinghouse shall 

ensure the Affiliate Clearing Member’s access to information is limited to information available 

to all Clearing Members. 

(d) The Affiliate Clearing Member shall be subject to the same access criteria and 

must abide by the same Rules as all other Clearing Members.
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CHAPTER 11

DIGITAL ASSET DELIVERY

Rule 1101 Digital Asset Delivery Definitions

“Blockchain” means a distributed ledger that records transactions between parties 

in a verifiable and permanent way.

“Delivering Participant” means the Participant that is required to deliver the 

underlying commodity through the Settlement Facility.

“Digital Asset” means Bitcoin, and any other “digital currency” which is a 

“commodity” under the Commodity Exchange Act, as amended. For this purpose, “digital 

currency” means any type of digital unit that is used as a medium of exchange or a form of 

digitally stored value (including digital units of exchange that (i) have a centralized 

repository or administrator, (ii) are decentralized and have no centralized repository or 

administrator, and/or (iii) may be created or obtained by computing or manufacturing 

effort).

“Digital Asset Delivery Address” means a unique identifier that serves as a virtual 

location where a Digital Asset can be sent.

“Receiving Participant” means the Participant that is required to take delivery of 

the underlying commodity through the Settlement Facility.

“Settlement Facility” means the Digital Asset delivery facility, Bitnomial 

Settlement, LLC2, or any successor organization authorized by the Exchange.

“Transfer” means transmission of a Digital Asset between the Settlement Facility

and a Delivering or Receiving Participant. Delivery shall be fully effected and transferred 

if reflected by a consensus of nodes on the Digital Asset Blockchain and after being 

confirmed as such by the Settlement Facility.

Rule 1102 Participant and Clearing Member Delivery Obligations

(a) A Participant and its respective Clearing Member carrying a position that is 

required to make or take delivery hereby guarantees and assumes full and unconditional 

responsibility for the performance of all delivery requirements set forth in the Rules.

(b) Participants are required to register accounts for the purpose of making or 

taking delivery with the Settlement Facility and Clearinghouse at least 30 days before the 

start of the delivery period. A Participant may effect delivery only through the Settlement 

2 Bitnomial Settlement, LLC is authorized by the Exchange and not licensed, approved or 

registered with the CFTC.
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Facility. 

(c) In the event of a default or failure of a Clearing Member during the delivery 

period or process, the Clearinghouse shall not be obligated to make or take delivery of 

Digital Assets.

(d) Any Participant intending to make or take delivery of a Digital Asset 

pursuant to a Futures Contract shall maintain a valid Digital Asset Delivery Address on 

record with the Settlement Facility to deliver and/or receive and to hold the respective 

Digital Asset. 

(e) Any Participant intending to make delivery of a Digital Asset agrees to 

transfer control of that asset to the Settlement Facility in anticipation of delivery in 

accordance with Exchange Rules.

(f) Each Delivery Participant represents and warrants, to the best of its 

knowledge, to each Receiving Participant, the Exchange, the Clearinghouse, and the 

Settlement Facility that the Digital Asset subject to delivery is free and clear of all adverse 

claims, security interests, liens and encumbrances of any kind whatsoever. Each 

Participant acknowledges and agrees that the Exchange, the Clearinghouse, and the 

Settlement Facility provide no representation or warranty as to good or marketable title to 

any Digital Asset subject to delivery. Each Receiving Participant hereby waives any right 

to bring a claim, whether in law or equity, against the Exchange, the Clearinghouse, and 

the Settlement Facility with respect to any defect in, or lack or failure of, good or 

marketable title of any Digital Asset delivered to Receiving Participant.

(g) The rights and obligations of Clearing Members for contracts cleared by the 

Clearinghouse, including but not limited to rights and obligations regarding clearing and 

settlement, variation payments and performance at expiration, shall be as set forth in the 

By-Laws and Rules of the Clearinghouse.

(h) Clearing Members will not, under any circumstances, be required to own, 

hold, or control Digital Assets under Exchange Rules, but Clearing Members must ensure, 

through position monitoring and communication with their customers, as Participants, that 

such customers are able to satisfy their obligations regarding delivery and acceptance 

thereof under the applicable Clearinghouse and Exchange Rules.

(i) Clearing Members must confirm that Delivering Participants deliver the 

appropriate amount of Digital Asset to the Settlement Facility during the Delivery Period.

(j) All Participants and their respective Clearing Members with obligations to 

make or take delivery are subject to the Clearinghouse Rulebook.

Rule 1103 Delivery Procedures

(a) Notice
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Upon final settlement, all open positions serve as a binding delivery notice to the 

Clearinghouse. The Delivery Notice is not transferable.

(b) Final Settlement Price

The final settlement price shall be the sole basis for delivery. 

(c) Final Delivery

Final delivery will be made in the manner specified by the Exchange.

(i) Upon instruction by the Clearinghouse to the Exchange, the delivery of 

Digital Assets pursuant to Futures Contracts shall be effected by the 

Settlement Facility by transferring the relevant amount of the Digital 

Asset from the Digital Asset Delivery Address of the Delivering 

Participant to the Digital Asset Delivery Address of the Receiving 

Participant on the Digital Asset's Blockchain. Delivery shall be fully 

effected and transferred if reflected by a consensus of nodes on the 

Digital Asset's Blockchain and after being confirmed as such by the 

Settlement Facility (a "Transfer"). 

(ii) Upon a Transfer of Digital Assets from the Digital Asset Delivery 

Address of the Delivering Participant to the Digital Asset Delivery 

Address of the Receiving Participant on the Digital Asset's Blockchain, 

each Participant hereby agrees that all title, ownership and control of 

such Digital Asset, and all risk of loss associated with the 

misappropriation or loss of such Digital Asset, shall reside solely with 

the Receiving Participant.

(iii) Neither the Exchange nor the Clearinghouse will have any 

responsibility or liability to any Person for the use of, or any failure, 

error, action or omission of, the Settlement Facility.

Rule 1104 Cost of Delivery

All transaction fees required to make delivery of Digital Assets through the Settlement 

Facility must be paid by the Participant that is seeking to make delivery in addition to the full 

delivery amount. All transaction fees required to take delivery of Digital Assets through the 

Settlement Facility must be paid by the Participant seeking to take delivery. The Settlement 

Facility is authorized to deduct the transaction fees from the delivery amount in the case of a 

Participant taking delivery.

Rule 1105 Delivery Infractions

(a) The failure of the Delivering Participant to deliver sufficient Digital Assets 

to the Digital Asset Delivery Address in a timely manner shall constitute a delivery failure 

by the Participant and subject them to disciplinary action. Clearing Members are financially 
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liable for delivery failures of their accounts, including customer accounts, and must pay 

financial performance upon delivery failure. “Financial performance” means payment of 

commercially reasonable costs in US Dollars related to replacing the failed delivery but

does not include physical performance or legal fees. Payment of reasonable costs will be 

determined at the sole discretion of the Exchange based on the final settlement price of the 

contracts that should have been delivered.

(b) If a Participant is required to pay funds pursuant to Rule 1103, but fails to 

deposit such funds in order to make timely payment on the date required, the Exchange 

may, in its sole discretion, impose a fine upon the Participant pursuant to the schedule of 

fines listed in Chapter 6 and any other compensation due to the late or inaccurate delivery.

Rule 1106 Digital Asset Delivery Eligibility

(a) To qualify a Digital Asset as eligible for delivery, the Digital Asset sent 

through the Settlement Facility must be accepted as valid by the Digital Asset Blockchain 

consensus protocol and must be at a block depth acceptable to the Settlement Facility.

(b) New Digital Assets that are created as a result of a fork in the Digital Asset

protocol during the term of a futures or options contract are not eligible for contract delivery. 

New Digital Assets created as a result of a fork in the Digital Asset protocol while the 

Settlement Facility is in the process of delivery will not be delivered to the Participant taking 

delivery of the forked Digital Asset. The Settlement Facility will return the new Digital Assets 

created, less any transaction fees, to the Participant making delivery at a later date determined 

by the Exchange. In the case of a fork where it is not clear which is the new Digital Asset 

chain, the Exchange has sole discretion to determine which chain will be delivered and which 

will be returned.

Rule 1107 Settlement Facility Reporting Requirements

In connection with, and as a condition to, performing the functions assigned to it herein 

with respect to Digital Asset delivery, the Settlement Facility will maintain all books and records 

relating to Transfers of Digital Assets. Such records must be available for inspection by the 

Exchange and the CFTC and must be maintained in a form acceptable to the Exchange for a period 

of not less than 5 years from the date of the relevant transaction. Further, the Settlement Facility

shall maintain a set of operational procedures to which the Exchange shall access and shall keep 

the Commission informed of any material changes to such procedures.
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CHAPTER 12

BITCOIN FUTURES AND OPTIONS

Rule 1201 Bitcoin US Dollar Futures

Product Name Bitcoin US Dollar Futures

Product Code BUS

Contract Size 1 Bitcoin

Price Quotation US Dollars per Bitcoin

Minimum Price Fluctuation $1 per Bitcoin ($1 per contract)

Trading Hours 8:30 Open to 14:30 Close CPT, Monday through Friday

Trading Termination 9:30 CPT of the trading day two trading days prior to the last 

Friday of the expiry month

Reportable Position Level 5 contracts

Margin US Dollars

Settlement Deliverable3

Settlement Price See Rule 1206

Listing The first 4 consecutive contracts in the March quarterly series

Delivery Rules Bitnomial Rulebook Chapter 11

Clearing Rules and Delivery 

Timeline

Bitnomial Rulebook Chapter 8

3 Bitnomial Settlement, LLC is authorized by the Exchange and not licensed, approved or registered with 

the CFTC.
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Rule 1202 Deci Bitcoin US Dollar Futures

Product Name Deci Bitcoin US Dollar Futures

Product Code BUI

Contract Size 1⁄10Bitcoin

Price Quotation US Dollars per Bitcoin

Minimum Price Fluctuation $1 per Bitcoin ($0.10 per contract)

Trading Hours 8:30 Open to 14:30 Close CPT, Monday through Friday

Trading Termination 9:30 CPT of the trading day two trading days prior to the last 

Friday of the expiry month

Reportable Position Level 50 contracts

Margin US Dollars

Settlement Deliverable4

Settlement Price Settlement price is fixed to the BUS settlement price

Listing The first 4 consecutive contracts in the March quarterly series

Delivery Rules Bitnomial Rulebook Chapter 11

Clearing Rules and Delivery 

Timeline

Bitnomial Rulebook Chapter 8

4 Bitnomial Settlement, LLC is authorized by the Exchange and not licensed, approved or 

registered with the CFTC.
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Rule 1203 Options on Bitcoin US Dollar Futures

Product Name Options on Bitcoin US Dollar Futures

Product Code BUSO

Strike Price Listing

Minimum 40 strikes at $50 per contract strike increment above 

and below the at-the-money strike, the previous day’s 

settlement price of the underlying futures, then 20 strikes at $100 

per contract strike increment above and below the highest and 

lowest $50 increment strike then 10 strikes at $500 per contract 

strike increment above and below the highest and lowest $100 

increment strike

Contract Size One BUS futures contract

Exercise Style European

At-The-Money Behavior Abandon Calls and Puts. Please see MGEX Rule 23.8.2: 

Options – Automatic Exercise

Underlying Product Code BUS

Minimum Price Fluctuation $0.10 per contract

Trading Hours 8:30 Open to 14:30 Close CPT, Monday through Friday

Trading Termination

Trading in an option class shall terminate on the last Friday 

which preceded by at least two business days, the last business 

day of the month preceding the options contract month. If such 

Friday is not an Exchange business day, then trading shall 

terminate on the preceding business day.

Reportable Position Level 5 contracts

Margin Unit US Dollars

Settlement Deliverable into BUS futures contract

Settlement Price See Rule 1106

Listing The first 2 consecutive contracts in the March quarterly series

Rule 1204 Bitcoin Futures and Options Price Bands and Price Limits

(a) Price Bands. Price Bands are a per-product price range for aggressive 
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orders based on the latest top-of-book price. The initial Price Bands are based on the 

previous day settlement price +/- the Price Band Variation which is set by the Bitnomial 

Market Operations & Risk Team. The Price Band Variation range is continuously recalculated from top-of-book.

(b) Price Limits. Price Limits are a per product price range based on a 

percentage of the previous day settlement price. If a trade occurs at the Price Limit for a 

side, the matching engine triggers a timer. If the timer elapses and no trades occur inside 

of the Price Limit, the Price Limits are re-calculated and reset. The resultant Price Limits 

are outside the original Price Limits to allow for additional price movement. The Exchange 

Market Operations & Risk Team may adjust the daily Price Limits at its sole discretion 

based on market conditions.

Products Price Band Variation Price Limit (the greater of)

BUS $250 50% or $10,000

BUS-BUS $50 50% or $5,000

BUI $250 50% or $10,000

BUI-BUI $50 50% or $5,000

BUSO $50 50% or $5,000

Rule 1205 Bitcoin Futures and Options Position Limits

For purposes of aggregation, no market participant shall own or control any combination 

of futures and options contracts that exceeds twenty thousand (20,000) Bitcoin Futures-equivalent 

contracts net long or short in any single month, five thousand (5,000) of such contracts net long 

or short beginning on the first trading day of the delivery month, or two thousand (2,000) of such 

contracts net long or short beginning on the first day of the Delivery Period. In no case may a 

market participant own or control more than eighty thousand (80,000) Bitcoin Futures-equivalent 

contracts net long or short for all contract months. For aggregation purposes, ten (10) Deci Bitcoin 

Futures Contracts will convert into one (1) Bitcoin Futures Contract.

In determining whether any market participant has exceeded the position limits, all 

positions in accounts for which such market participant by power of attorney or otherwise directly 

or indirectly holds positions or controls trading will be included with the positions held by such 

market participant. Position limits will apply to positions held by two or more market participants 

acting pursuant to an expressed or implied agreement or understanding, the same as if the 

positions were held by a single market participant.

Rule 1206 Bitcoin Futures and Options Settlement Price Computation

(a) Settlement Times and Definitions

Daily Settlement Period Five minutes prior to Trading Close
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Final Settlement Period Five minutes prior to Trading Termination

Settlement Period Daily or Final Settlement Period

Roll Period Five trading days prior to contract expiration day

Front Month Contract 

After Roll Period Next contract to expire

Deferred Month 

Contracts

All contracts yet to expire excluding the Front Month 

Contract

Pricing Contract Contract used for determining settlement prices

(b) Futures Pricing Contract Selection. Unless during the Roll Period, the 

Front Month Contract is the Pricing Contract for determining settlement prices. During the 

Roll Period, the next-to-expire Deferred Month Contract is used as the Pricing Contract.

(c) Futures Settlement Price Computation

(i) The settlement price of the Pricing Contract is the volume-weighted 

average price (VWAP) of all the trades during the Settlement Period.

(ii) If no trades occur during the Settlement Period, the settlement price is 

the time-weighted average price (TWAP) of the bid-ask spread 

midpoint during the Settlement Period.

(iii) If a bid-ask spread isn’t available during the Settlement Period, earlier 

market data or a composite spot price is used from spot markets 

deemed acceptable by Bitnomial.

(iv) All settlement prices are rounded to the nearest tick.

(d) Options Settlement Price Computation

(i) The settlement price of the Pricing Contract is the volume-weighted 

average price (VWAP) of all the trades during the Settlement Period.

(ii) If no trades occur during the Settlement Period, the settlement price is 

the time-weighted average price (TWAP) of the bid-ask spread 

midpoint during the Settlement Period.

(iii) If a bid-ask spread isn’t available during the Settlement Period, the 

settlement price is the output of the Black-Scholes model based on that 

day’s settlement price and 30-day volatility of the underlying contract.

(iv) All settlement prices are rounded to the nearest tick.
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(e) Futures Non-Pricing Contract Settlement Prices. The settlement prices 

for non-Pricing Contracts are inferred from the quoted spread market relationships to the 

Pricing Contract settlement price, directly or indirectly.

(f) Futures Final Settlement. During the Final Settlement Period the Front 

Month Contract final settlement price is determined using the non-Pricing Contract 

settlement price procedure.

(g) Options Final Settlement. During the Final Settlement Period the Front 

Month Option Contract will settle based on the underlying Futures Contract.

(h) Sole Discretion. The Exchange has sole discretion to determine an 

alternative settlement price if the stated settlement procedure produces prices which are not 

representative of the fair value of the contract.