ForecastEx LLC

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Exhibit A-1 - Regulatory Compliance Chart

Version: October 2023

Attach as Exhibit A-1, a regulatory compliance chart setting forth each Core Principle and 

providing citations to the Applicant’s relevant rules, policies, and procedures that address 

each Core Principle, and a brief summary of the manner in which Applicant will comply 

with each Core Principle.

The below chart details how ForecastEx LLC (“ForecastEx” or the “Clearinghouse”) meets each 

core principle. All rule references are to the ForecastEx Clearinghouse Rulebook unless 

otherwise noted.

Core Principle Relevant Rules Description

39.10 Compliance 

with core principles

This Application, 

including all exhibits 

and attachments.

ForecastEx LLC (“ForecastEx”) is applying for 

registration as a derivatives clearing organization 

(“DCO”) by submitting Form DCO (the 

“Application”). Once registered, ForecastEx will 

comply with the DCO Core Principles. As 

demonstrated in this Application, ForecastEx has 

drafted its Rules, Compliance Manual, Business 

Continuity Plan, and has designed ForecastEx’s 

clearing operations to be compliant with the DCO 

Core Principles and the Commodity Exchange 

Act, as amended (“CEA”), and other applicable 

CFTC regulations promulgated thereunder.

39.11 Adequate 

Financial, 

Operational, and 

Managerial 

Resources

Rules 209, 608, 

Exhibits B-1, B-2, B3, B-4

ForecastEx requires all positions to be overcollateralized. As a result, the collateral that 

ForecastEx holds is sufficient to cover any 

exposure from the default of a Member. 

ForecastEx’s CFO possesses knowledge of the 

CFTC’s financial resources requirement to enable 

ForecastEx to satisfy financial resources 

requirements.

As demonstrated in Exhibit B-1, ForecastEx has 

sufficient resources to operate.

Rule 209 requires ForecastEx to provide all 

reports and information required by the 

Commission in the form and manner the 

Commission requests.
ForecastEx LLC

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39.12 Participant 

and Product 

Eligibility

Rules 301, 303, 413 

Exhibits C-1, C-2, 

Compliance Manual

Membership at ForecastEx is open to any FCM 

Applicant who meets the requirements in Rule 

301, submits a completed Membership 

Application, and makes the required contribution 

to the Clearing Fund. Rule 301 requires that 

Membership is offered in a fair and impartial 

manner. Any violation of the Rules would result 

in a disciplinary action against the Member.

As set forth in Rule 413 and Section 14.1 of the 

Compliance Manual, ForecastEx has established a 

product review process that sets forth the 

requirements for determining eligibility of 

contracts or transactions submitted to ForecastEx 

for clearing. ForecastEx only clears products that 

are listed on ForecastEx.

39.13 Risk 

Management 

Capabilities

Rules 306, 608, 

Exhibits D-1, D-2, 

D-3, D-4.

ForecastEx’s Risk Management Framework is 

attached as part of Exhibit D-1. ForecastEx does 

not have any margin as all positions are required 

by Rule 608 to be fully collateralized. Rule 306 

requires all large trader reports to be filed with 

ForecastEx. There is no compression or stress 

testing necessary at ForecastEx due to all 

positions being fully collateralized.

39.14 Settlements

Rules 603, 604, 

Exhibits E-1, E-2, E3, F-2

The only Settlements at ForecastEx in the 

meaning of CFTC Regulation 39.14(a)(1) are final 

settlements that occur at Resolution or offset. At 

Resolution Time, the accounts of the Members 

holding the positions are credited a payment 

which corresponds with the Settlement value of 

Event Positions. See also the description of 

ForecastEx’s Settlement Banks and the criteria 

used to evaluate Settlement Banks on an ongoing 

basis in Exhibit F-2.

39.15 Treatment of 

Funds

Rules 305, 410, 610, 

Exhibits F-1, F-2, F3

Rule 305 requires Members to segregate 

Customer and proprietary funds. Rule 610 

provides that Member funds shall be segregated 

from ForecastEx’s proprietary funds. In addition 

to segregating Member funds, ForecastEx has 

established internal procedures to ensure the 

safety of Member funds. Rule 410 allows for 

transfers in limited circumstances. ForecastEx 

does not allow commingling of funds.
ForecastEx LLC

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39.16 Default Rules 

and Procedures

Rules 613, 709, 

Exhibit G

ForecastEx meets paragraphs (a), (b), and (c) of 

39.16 due to allowing only fully collateralized 

positions to be cleared. Rule 613 requires prompt 

notice from a Member who enters default, and 

Rule 709 allows ForecastEx to take action to 

correct any deficiency that might arise from a 

default.

39.17 Rule 

Enforcement

Rules 601, 509, 

Chapter 7

ForecastEx has the authority and ability to enforce 

ForecastEx Rules. Pursuant to Rule 601, Market 

Participants and their authorized personnel with 

access to ForecastEx consent to and agree to be 

subject to ForecastEx’s jurisdiction.

ForecastEx’s Compliance Department monitors 

the ForecastEx market and performs trade practice 

and market manipulation surveillance to ensure 

that Market Participants comply with the Rules 

and, specifically with Rule 509. Rule 509 sets 

forth the types of activities that are prohibited on 

the ForecastEx Platform.

Chapter 7 of the Rulebook sets forth in a 

transparent manner the disciplinary procedures to 

which ForecastEx adheres in the event that a 

Market Participant is suspected of violating a 

Rule. The Compliance Department and the 

Disciplinary Panel is responsible for investigating 

and prosecuting suspected rule violations. Rule 

710 requires that ForecastEx will give notice to 

the Commission upon taking a rule enforcement 

action against a Member

39.18 System 

Safeguards

Exhibit I, Business 

Continuity Plan, 

Risk Management 

Framework

Refer to Exhibit I for a comprehensive discussion 

of ForecastEx’s system safeguards.
ForecastEx LLC

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39.19 Reporting Rules 209, 311, 409, 

Compliance Manual

ForecastEx will make all reports required by the 

Commission in the form and manner required. 

ForecastEx’s Chief Regulatory Officer (“CRO”) 

will submit an annual compliance report as 

required by CFTC Regulation 39.10(c)(3). The 

CRO is intended to carry out the chief compliance 

officer’s responsibilities under CFTC Regulation 

39.10. Section 21.3 of the Compliance Manual 

sets forth internal procedures for compliance with 

reporting obligations. There will be no margin 

information to report. ForecastEx will report to 

the Commission if unusual or emergency 

situations arise as provided in Rule 409.

39.20 

Recordkeeping Rule 209

Rule 209 specifies that ForecastEx records will be 

kept in the manner prescribed by Commission 

Regulations.

39.21 Public 

Information

Rule 311, Exhibits 

K, L, Compliance 

Manual

ForecastEx will publish to its website the Contract 

Specifications of each Event Market, a fee 

schedule, daily prices, volume, and open interest 

for each actively traded Event Position, the 

ForecastEx Rulebook, a list of all Members, and a 

list of all listed Event Markets. Default procedures 

and margin methodology are not applicable to the 

ForecastEx market.

39.22 Information 

Sharing Exhibit M

Given the unique nature of the ForecastEx 

business model, there are not any applicable 

domestic or international information sharing 

agreements that ForecastEx intends to be a part of.

39.23 Anti-trust 

Considerations

Rules 301, 303, 

Exhibits C-1, N

ForecastEx provides for fair, impartial, and open 

access to its Platform and does not impose any 

anti-competitive burdens on its members. 

ForecastEx imposes a uniform fee, and the fee is 

designed to be nondiscriminatory. ForecastEx’s 

Member eligibility criteria are designed to be 

objective standards that all Members must satisfy.
ForecastEx LLC

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39.24 Governance Chapter 2, Exhibit O, 

LLC Agreement

The governance of the Clearinghouse is controlled 

by the Clearing Committee, which is responsible 

for the risk management and day-to-day 

operations of the Clearinghouse under the 

oversight of the Board. Exhibit O includes the 

charter of the Clearing Committee. Fitness 

standards for Board Members, Committee 

Members, and Officers are established in Rule 

202(e).

39.25 Conflicts of 

Interest

Rules 202(c), 206, 

207, 208

Rule 206 provides procedures for establishing and 

resolving conflicts of interest, including 

prohibiting decision-makers with a conflict of 

interest from participating in voting on the issue 

with a conflict of interest. ForecastEx imposes a 

uniform fee, and the fee is designed to be 

nondiscriminatory. ForecastEx’s Member 

eligibility criteria are designed to be objective 

standards that all Members must satisfy. Rule 207 

prohibits all Officers and employees from trading 

on ForecastEx. Further, Rule 208 is established to 

prevent conflicts of interest between ForecastEx 

and an Affiliated Customer that might be using 

the Platform. 

39.26 Composition 

of Governing 

Boards

Rules 202, 203, 

Exhibit Q

ForecastEx Rules provide that the Board contains 

at least 35% Public Directors and that the 

Clearing Committee have at least one member 

who is a Public Director and one who is a Market 

Participant Director. The ROC, which oversees 

ForecastEx’s regulatory program, is comprised 

solely of Public Directors.

39.27 Legal Risk 

Considerations

Rules 301(e), 309, 

412, Chapter 6, 

Certificate of Good 

Standing, Exhibit R, 

Member Agreement

ForecastEx has established an effective and 

enforceable legal framework. ForecastEx has 

entered into agreements with outside service 

providers for the provision of services that are 

essential to ForecastEx’s ability to perform 

clearing operations in compliance with the CEA 

and the CFTC’s regulations promulgated 

thereunder. ForecastEx’s legal framework is laid 

out in the Rulebook and contains provisions for 

Clearing, ForecastEx’s interest in collateral, and 

Settlement, among other issues. Rule 412 

provides for precedence of federal law and 

Commission regulations.