Responsibilities of Clearing Members

Each Clearing Member shall, and where applicable, shall cause all of its employees and agents to:

1. 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.

2. 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;

3. comply with and act in a manner consistent with the Rules and any rules of or agreement with a settlement facility, as applicable;

4. ensure that all clearing activity conducted by the Clearing Member is performed in a manner that is consistent with the Rules;

5. 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;

6. ensure that the Clearinghouse's facilities are used in a responsible manner and are not used for any improper or wrongful purpose;

7. meet all financial requirements required under the Rules;

8. 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;

9. 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;

10. immediately inform the Clearinghouse of any changes to the account information provided by the Clearing Member;

11. keep User IDs and passwords confidential;

12. promptly review and, as necessary, respond to all communications issued by the Clearinghouse;

13. 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;

14. 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;

15. 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;

16. cooperate with the Clearinghouse and any Governmental Authority in any inquiry, investigation, audit, examination or proceeding;

17. 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, information related to the risk management policies, procedures and practices of the Clearing Member;

18. 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

19. 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:

    1. 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;
    2. provide for independent testing for compliance to be conducted by Clearing Member personnel or by a qualified outside party;
    3. designate an individual or individuals responsible for implementing and monitoring the day-to-day operations and internal controls of the program;
    4. and provide ongoing training for appropriate personnel.