Process Considerations

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:

1. 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 may indicate a possible basis for finding that a violation of Exchange or Clearinghouse Rules has occurred or will occur.

2. 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.

3. 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.

Third-Party Enforcement. The Exchange or Clearinghouse may delegate any of its rights and responsibilities herein to a Regulatory Services Provider.

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).