Rule Book

1.1 Interpretation

1.1.1 References to days are to Business Days unless stated otherwise.

1.1.2 References to times shall refer to London time unless stated otherwise.

1.1.3 To the extent that there is any conflict between this LFEX Trading Platform Rulebook and any other document relating to the LFEX Trading Platform, the LFEX Trading Platform Rulebook shall prevail.

1.2 Definitions

In this LFEX Trading Platform Rulebook:

“Applicable Law” means, with respect to any Person, any statute, law, regulation, rule or guidance of any Competent Authority applicable to such Person.

“Applicant” means a person applying to become a Member of the LFEX Trading Platform in accordance with Rule 2.

“Business Day” means the days that banks are usually open for business in London, being all days except Saturdays, Sundays and UK national holidays.

“Eligibility Criteria” means the criteria for eligibility for participation on LFEX Trading Platform set out in Rule 2.2.

“Erroneous Order” means an order submitted to the LFEX Trading Platform in error either as to price, quantity, currency, side or Product.

“Error Trade” means an Erroneous Order that takes place on the LFEX Trading Platform.

“Event of Default” means in relation to a Member:(a) failure by that Member to comply with any obligation in accordance with the provisions of this Rulebook;

• (b) a misrepresentation made by that Member;
• (c) the repudiation or rejection, in whole or in part, of a Relevant Transaction by that Member;
• (d) breach of the terms of the LFEX Trading Platform Membership Agreement; or
• (e) an Insolvency Event.

“Insolvency Event” means any of the following:

• (a) a Member is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties,
• commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness;
• (b) the value of the assets of a Member is less than its liabilities; or
• (c) a moratorium is declared in respect of any indebtedness of a Member.

“LFEX” means LFEX Limited a company incorporated in the United Kingdom (Company Number 8928044) and trading as The London Fish Exchange, which is the operator of the LFEX Trading Platform.

“LFEX TRADING PLATFORM” means the non-discretionary electronic trading system provided by LFEX for the trading of aquaculture, fish and related products, accessed either by LFEX Web Trader or LFEX Mobile Trader.

“Market View Window” means the area on the LFEX Trading Platform front end GUI used to display indicative prices.

“Member” means a Member of the LFEX Trading Platform admitted in accordance with Rule 2 who is able to submit Orders and whose admission has not been terminated in accordance with Rule 2.4 or in accordance with the Membership Agreement.

“Membership Agreement” means the agreement entered into between a Member and LFEX regarding membership of the LFEX Trading Platform.

“Order” means any bid or offer to buy or sell a Product pursuant to the Rules, and includes any modification to or cancellation of such a bid or offer, including RFQ, indication of interest, indicative bid or offer and modification and negotiation thereof on the platform.

“Person” means any natural person, association, partnership, limited liability company, joint venture, trust or corporation.

“Product” means an instrument eligible for trading on the LFEX Trading Platform in accordance with Rule 6, as set out in Appendix 1 (Products and Procedures).

“Relevant Transaction” means a transaction that takes place on the LFEX Trading Platform.

“Rules” means this LFEX Trading Platform Rulebook, the Membership Agreement, any Trading Notices, and any amendments thereto.

“RFQ” has the meaning set out in Rule 6.8.

“Trade Engine” means the system operated by the LFEX Trading Platform for the acceptance and management of Orders for the execution of Relevant Transactions.

“Trading Notice” means a notice issued published or disseminated by LFEX to Members pursuant to Rule 5.2.2 from time to time.

2.1 Authorisation and Admission

2.1.1 An Applicant wishing to become a Member shall:

• (a) complete the LFEX Trading Platform Member application form;
• (b) sign the Membership Agreement; and
• (c) provide all supporting information as stipulated in the LFEX Trading Platform Member application form and the Membership Agreement and any other additional information as LFEX may reasonably require at the date of the Member’s application, failing which the application will be returned to the Applicant and will not be processed until fully completed.

2.1.2 Upon satisfactory fulfilment of this Rule 2.1 and the eligibility criteria in Rule 2.2 below, LFEX Trading Platform membership shall become effective on such date and at such time as LFEX may specify.

2.2 Eligibility

2.2.1 Applicants are eligible to apply to participate on the LFEX Trading Platform provided that they meet the Eligibility Criteria set out in Rule 2.2.2 below.

2.2.2 An Applicant must satisfy each of the following conditions to LFEX’s satisfaction:

• (a) have legal capacity and all registrations, authorisations, approvals and/or consents required by Applicable Law in connection with trading Products on the LFEX Trading Platform;
• (b) be fit and proper;
• (c) have financial and business standing suitable to enter into Relevant Transactions;
• (d) have a sufficient level of trading ability and competence;
• (e) have in place adequate execution and order management systems as required, and arrangements for the orderly settlement of transactions in the Products; and
• (f) be able to satisfy the general organisational and technical requirements for participation in the LFEX Trading Platform.

2.2.3 LFEX may grant an application, refuse an application or grant a conditional application subject to any conditions it considers appropriate at the date of the application.

2.3 Continuing Obligations

2.3.1 Each Member must have and maintain adequate internal procedures and controls to prevent the submission of Erroneous Orders to LFEX Trading Platform and to ensure its conduct on the LFEX Trading Platform complies with these Rules and Applicable Law.

2.3.2 Each Member shall be bound by these Rules and any supplementary documentation issued by LFEX and by any direction or decision of LFEX relating to the Member’s trading activity on the LFEX Trading Platform.

2.3.3 Each Member must ensure that any personnel submitting RFQs or Orders to the Trade Engine are sufficiently trained, are adequately supervised and monitored, and have adequate experience, knowledge and competence to abide by and comply with the Rules.

2.3.4 LFEX Trading Platform is provided exclusively to Members and to no other person or entity, and each Member acknowledges and agrees that it will take full responsibility for its access to, or use of, the LFEX Trading Platform. Each Member shall indemnify LFEX in full for and against all losses, liabilities, claims, actions, proceedings, costs and/or expenses incurred by LFEX arising out of or in connection with, directly or indirectly, the Member’s access to and/or use of the LFEX Trading Platform and/or breach of the Rules.

2.3.5 Each Member must continue to meet the Eligibility Criteria at all times whilst it continues to be a Member.

2.3.6 Each Member shall, at all times, have one or more persons, who must be identified to LFEX, who are competent to advise the relevant Member on the application of these Rules.

2.3.7 Each Member will co-operate with LFEX (or any other Competent Authority) in any investigation conducted in relation to trading on the LFEX Trading Platform.

2.4 Suspension or termination of a Member

2.4.1 If, at any time, a Member:

• (a) does not comply with the Rules or breaches the Membership Agreement; or
• (b) suffers an Insolvency Event; or
• (c) is a subject of an intervention order or investigation by any other Competent Authority; or
• (d) does not enter any Orders into the Order Engine for a period of one (1) month or more; or fails to execute a transaction for a period of two (2) months or more; or
• (e) fails to meet or ceases to meet the Eligibility Criteria under the Rules,

LFEX may, at its absolute discretion, suspend, terminate or restrict that Member’s access to the LFEX Trading Platform or the business conducted by the Member on the Trade Engine.

2.4.2 LFEX will also suspend, restrict or terminate that Member’s access to the LFEX Trading Platform or the business conducted by the Member on the platform if requested to do so by a Competent Authority.

2.4.3 The Member will be notified in writing of any action taken, or proposed to be taken, by LFEX in accordance with these Rules.

2.5 Confidentiality

LFEX will treat as confidential any information received from Members in relation to any business carried out on the LFEX Trading Platform except where:

• (a) the information is in the public domain;
• (b) disclosure is in accordance with any regulatory investigation conducted by a Competent Authority;
• (c) disclosure has been agreed to in writing by the Member;
• (d) disclosure is made to facilitate the clearing and settlement of Relevant Transactions; or
• (e) disclosure is required by Applicable Law or requested by Competent Authority or any other tax or regulatory authority anywhere in the world; or
• (f) disclosure is made on the platform by the Member.
• (g) For the avoidance of doubt a Member may wish to publish Orders publicly on the platform to all Members, or to use the platform to disclose their participation on the platform (for example marketing to new counterparties). Such disclosure will not be considered a breach of this Confidentiality clause.

2.6 Resignation

2.6.1 A Member may resign by giving LFEX at least three (3) calendar months’ written notice, unless such notice period is waived by LFEX in its absolute discretion.

2.6.2 LFEX may, in its absolute discretion, refuse to accept notice of resignation if LFEX considers there is an outstanding matter concerning the Member that is subject to an ongoing investigation.

2.6.3 Notwithstanding either the resignation by a Member of its membership of the LFEX Trading Platform or the termination of a Member’s membership of the LFEX Trading Platform by LFEX, a Member shall continue to be bound by these Rules in respect of all activity on the LFEX Trading Platform until the latest of:

• (a) one year after it ceases to be a Member;
• (b) the date on which all Relevant Transactions are settled and completed;
• (c) the date on which all outstanding charges, or other sums due relating to activity on the LFEX Trading Platform have been settled.

3.1 Fees and Charges

A Member shall pay to LFEX all applicable subscriptions, charges, fees and any other costs due pursuant to these Rules, the Membership Agreement or any fee schedule for the LFEX Trading Platform as notified to all Members from time to time.

4.1 Notification by Members

4.1.1 All notifications by a Member under these Rules shall be made as soon as is reasonably practicable to LFEX using the details supplied to the Member upon successful completion of the application process. Where a notification is initially made verbally or via electronic mail there may be a requirement for the notice to be confirmed in writing.

4.1.2 A Member will notify LFEX in writing, or by electronic mail, at least twenty-one (21) calendar days in advance of the proposed effective date of any significant changes to its structure. The types of changes which would be considered relevant would include:

• (a) a change in control within the meaning given under the Membership Agreement;
• (b) a change of name;
• (c) a change of address;
• (d) a change in its legal status;
• (e) an Insolvency Event;
• (f) a material breach of these Rules;
• (g) the commencement of any investigation or disciplinary action by a Competent Authority relating to the Member’s activities on the LFEX Trading Platform or which may otherwise be material in the exercise of the Member’s obligations under these Rules;
• (h) a material adverse change which affects the ability to comply with these Rules;
• (i) a change which results in the Member being unable to fulfil the Eligibility Criteria; or
• (j) a change in the Member’s LFEX Trading Platform contacts or the Member’s list of authorised persons (as supplied by the Member upon completion of the LFEX Trading Platform Membership application form).

4.2 Amendments

4.2.1 LFEX may implement new Rules, revoke Rules or amend existing Rules in their entirety and will inform Members by an appropriate means, whether it be via letter, email, facsimile, notice on a website, or using the LFEX Trading Platform chat facility, or by issuing some other communication (such means being a Trading Notice). In the event that LFEX proposes a material change in the Rules, it may, at its sole discretion, consult with Members for comments.

4.2.2 A Trading Notice shall be given to Members at least ten (10) Business Days prior to the implementation of any new Rules or the revocation or amendment of any existing Rules.

4.2.3 If any modification of the Rules under Rule 4.2.1, other than a modification required by law (whether national or supra-national) or any Competent Authority, materially adversely affects the rights or obligations of any Member, that Member may terminate its LFEX Trading Platform membership by written notice given to LFEX within seven (7) Business Days from the date of the relevant Trading Notice, and LFEX will process such request in accordance with Rule 2.6.

5.1 Transaction Records

5.1.1 Each Member must retain a record of each Relevant Transaction entered into by it on the LFEX Trading Platform in accordance with any regulatory or legal requirements applicable to the Member.

5.1.2 Such records must be stored in a legible and unalterable format and be capable of being produced for inspection by LFEX, or any Competent Authority on demand.

5.2 Prohibited practices and security

5.2.1 A Member shall not, in respect of its business on the LFEX Trading Platform:

• (a) do or engage in any conduct which seeks to artificially manipulate or undertake fraudulent activity. This may include (but is not limited to):
  (i) committing any act or engaging in any course of conduct which creates, or is likely to create, a false or misleading impression of the market in, or the price or value of, any Product;
  (ii) causing or entering into any artificial transaction;
  (iii) submitting an Order with a fictitious quantity or price onto the Trade Engine; or
  (iv) effecting a pre-arranged transaction that is designed to give the market a false view of supply, demand or pricing of a Product;
• (b) commit any act or engage in any course of conduct which is likely to damage the fairness or integrity of the LFEX Trading Platform or bring LFEX into disrepute;
• (c) commit any act or engage in any course of conduct which causes, or contributes to, a breach of the Rules by another Member;
• (d) do or engage in any conduct in breach of the Rules;
• (e) procure, require or encourage another to engage in conduct falling within any of the principles in this Rule 5.2; or
• (f) submit any Orders to the LFEX Trading Platform, other than for the purpose of trading, for example for the purpose of testing systems.

5.2.2 LFEX may take disciplinary action under Rule 10.5 in relation to a Member’s conduct which in the opinion of LFEX falls or could potentially fall within this Rule 5.

5.2.3 Each Member shall implement reasonable security procedures to prevent unauthorised use or misuse of the LFEX Trading Platform. Such procedures shall include, (but are not limited to):

• (a) ensuring that the LFEX Trading Platform is only accessible by authorised personnel; and
• (b) ensuring that data entries entered by a Member are not altered, lost or destroyed.

5.3 LFEX Chat Service Rules

5.3.1 The LFEX Chat Service (Chat Room) is a service to enable free and informal communications between Members in relation only to issues arising out of their LFEX Membership and business. The Chat Room is provided as an ancillary service by LFEX and can be withdrawn entirely, collectively or selectively at any time at LFEX’s discretion.

5.3.2 LFEX is aware of the potential for misuse of any chat functionality and has put in place a monitoring function designed insofar as is reasonably practicable to ensure compliance by Members with the Rules set out below.

5.4 As a user you agree not to do any of the following:

5.4.1. abuse, harass, threaten, stalk, defame or in any way seek to violate the rights of another user or third party.

5.4.2. publish or seek to distribute any material or information that is unlawful, harmful, obscene, indecent, libellous, profane, defamatory, racist, or in any other way inappropriate or objectionable.

5.4.3 use or harvest data provided by other users in a way that they would object to.

5.4.4 contact other users in ways they may find inappropriate.

5.4.5 encourage illegal activity or activity that violates the rights of other Chat Room users or third parties, whether individuals or organisations.

5.4.6 supply or post Content calculated to deliberately mislead other users or third parties, including Content falsely made to appear from or be endorsed by us.

5.4.7 to pose as another user, third party or organisation or LFEX employee for the purposes of obtaining user or third party information.

5.4.8 to transmit or transfer any viruses, trojans, worms or any other malicious programs or code intended to spy on, gain control over, disrupt, destroy or in any other way impair any computer hardware or software or any other equipment.

5.4.9 attempt to gain access to our servers or other equipment in order to disrupt, impair, overload or otherwise hinder or compromise the safety, security or privacy of any of the services provided by or relied upon by us and other users.

5.4.10 repurpose the Chat Room or remove or obscure any notices or advertising provided by us on the Chat Room.

5.4.11 load or provide access to content on the Chat Room or link to other content from the Chat Room, which infringes the trademark, patent, trade secret or any other proprietary right of a third party or infringes any intellectual property law.

5.4.12 not make, agree or confirm trades. However, if the Chat Room is used for such purpose and the trade is then not subsequently entered into the system and transacted in the normal way, then it will be deemed to be a trade as regards to any transaction fees payable to LFEX and the counterparties will be liable in the same way as if the transaction had been completed on the platform in the normal manner.

5.4.13 send junk or spam email or emails or posts promoting pyramid schemes, chain letters or any other activity that invites users and others to participate in wasting their time and/or money.

5.5 The above list is not intended to be exhaustive. LFEX reserves the right to remove (with or without notice) Content and suspend or terminate (with or without notice) the account of any user who in its sole judgment is in breach of the rules or the spirit of the rules.

6.1 Products traded on the LFEX Trading Platform

6.1.1 LFEX will determine in its absolute discretion which Products are eligible for trading on the LFEX Trading Platform.

6.1.2 LFEX may in its absolute discretion prohibit or suspend any transaction or class of transactions from being dealt at any time for any reason.

6.2 Hours of operation

6.2.1 The LFEX Trading Platform will be open for business on such days as will be decided by LFEX and communicated to Members.

6.2.2 The hours of operation will be as decided by LFEX and communicated to Members.

6.3 Access to the LFEX Trading Platform

6.3.1 A Member is responsible for all obligations and liabilities arising from the entry, deletion and execution of all Orders submitted to the Trade Engine by that Member.

6.3.2 LFEX reserves the right to restrict a Member’s access to and use of the Trade Engine.

6.3.3 LFEX reserves the right to delete any Order submitted to the Trade Engine where LFEX believes it necessary in order to preserve market orderliness.

6.4 Orders and Trades

6.4.1 Any Member shall be entitled to issue an Order on the Trade Engine with a view to securing Relevant Transactions with other Members. Any such Order must specify the following details:

• (a) The relevant Product;
• (b) whether the Order is a buy Order or a sell Order;
• (c) the relevant quantity or volume for the proposed transaction;
• (d) the proposed order type;
• (e) and any other relevant details;

6.4.2 When submitting an Order, a Member will also specify an indicative maximum or minimum price to be displayed in the Market View Window.

6.4.3 Orders shall be issued in accordance with such technical specifications as LFEX may specify from time to time.

6.4.4 All Orders entered on to the Trade Engine will be treated by LFEX as indicative. Once an Order is placed, any other Member may submit an RFQ request against this order back to the originator. The originator of the Order may then confirm (or amend) the price and conditions of the Order and offer it to the Member counterparty. On receipt, the counterparty may confirm the transaction by pressing the trade button and then confirming the desire to trade that order, which confirmation will cause the Order to be executed and confirmed on the platform to both counterparties, becoming a Relevant Transaction. When executed, the trade will be binding on both Members (unless otherwise provided in these Rules) even if the Order or response was placed on behalf of a third party. Where the potential counterparty responds with a modification to the price or parameters of that order then the order shall become an RFQ Order and handled and executed according to the RFQ process.

6.4.5 A Member that submits Orders to the Trade Engine shall, at all times, have sufficient management systems, procedures and controls designed to prevent the submission of Erroneous Orders to the Trade Engine

6.5 Posting of Orders

6.5.1 Continuous posting of Orders will occur during normal trading sessions.

6.5.2 Orders will be listed and displayed in the Market View Window using the following criteria in order of precedence:

• (a) price; and
• (b) time (time priority in the Trade Engine is based on the time stamped on an Order when it is recorded in the Trade Engine).

6.5.3 Orders in respect of Products will execute in the manner described in an RFQ below and any relevant procedures published by LFEX in respect such Products, as set out in Appendix 1

6.5.4 When an Order is confirmed and executed on the LFEX Trading Platform in accordance with these Rules, it will create a binding contract on the Members (unless otherwise provided for in these Rules).

6.6 Entry and deletion of Orders

6.6.1 A Member may only submit, amend, suspend, reactivate or delete (cancel) Orders from the Trade Engine during the times specified by LFEX and relevant Product notices.

6.6.2 A Member shall not submit Orders or amend Orders on the Trade Engine in a Product which is subject to a suspension. Orders which are submitted but not executed on the LFEX Trading Platform in such a Product may be deleted from the Trade Engine.

6.7 Suspension of execution

LFEX may suspend the execution of Orders on the Trade Engine in one or more Products if:

• (a) LFEX determines a system problem has occurred or is likely to occur; or
• (b) it is requested to do so by a Competent Authority; or
• (c) it considers in its sole discretion that there has been or is likely to be a threat to the stability of fair and orderly markets by trading a Product; or
• (d) LFEX, in its absolute discretion, considers it appropriate to do so; or
• (e) LFEX, in its absolute discretion, considers that a Member has failed, or is likely to fail, to comply with its obligations under Rule 6.

6.8 RFQ

6.8.1 An RFQ (request for quote) is the mechanism for Members to make known to, or request from, specific other Members, indications of buy / sell requests on the LFEX Trading Platform for the purpose of obtaining interest or quotations, and to initiate a subsequent negotiation between the interested parties. An RFQ Order is any subsequent Order which may or may not lead to a Relevant Transaction

6.8.2 When a Member submits an RFQ to the LFEX Trading Platform the Member must specify the following details:

• (a) Product;
• (b) whether the order is a buy Order or sell Order;
• (c) the relevant quantity or volume for the proposed transaction;
• (d) the proposed order type; and
• (e) any other relevant details.

6.8.3 When submitting an RFQ, a Member may indicate a maximum or minimum price.

6.8.4 RFQ’s shall be made in accordance with such technical specifications as LFEX may specify from time to time.

6.8.5 All RFQ’s entered on to the platform will be treated by LFEX as indicative. Once an RFQ is published, potential counterparty(ies) on the LFEX Trading Platform may respond to such request in a number of ways –

• i) Where the RFQ has a defined price, and where all other RFQ criteria can be agreed, then the potential counterparty to the trade may confirm the transaction back to the originator, at which point the originator may confirm and cause the Order to be executed, or shall retain the right to amend and requote or cancel the Order.
• ii) Where the RFQ does not have a defined price, then the responder(s) to the RQF shall respond with a price conforming to the parameters set out in the RFQ.

6.8.6 The originator of the RFQ may then confirm the transaction which confirmation will cause the RFQ Order to be executed and confirmed on the LFEX Trading Platform to both counterparties thereby creating a Relevant Transaction.

6.8.7 Alternatively, the originator may counter the offer with a new higher/lower price of its own. This negotiation process may continue until such time as both parties are content with the price and associated parameters and then the parties may confirm the transaction, which confirmation will cause the RFQ Order to be executed and confirmed on the LFEX Trading Platform to both counterparties thereby creating a Relevant Transaction.

6.8.8 When executed the trade will be binding on both Members who negotiated the RFQ Order (unless otherwise provided in these Rules) even if the RFQ Order was placed on behalf of a third party.

6.8.9 Where the Members do not initially agree the parameters of an RFQ Order, then these may also be amended and negotiated along with the Price.

6.8.10 Additional parameters may also be negotiated within the RFQ ‘Chat’ Service with reference to that specific RFQ negotiation, and any such additional parameters agreed through this mechanism will be binding on the parties.

6.8.11 A Member that submits an RFQ to the LFEX Trading Platform shall, at all times, have sufficient systems, procedures and controls designed to prevent the submission of Erroneous Orders to the platform.

6.9 Entry and deletion of RFQ Orders

6.9.1 A Member may only submit, amend, suspend, reactivate, or delete (cancel) RFQ Orders during the times specified by LFEX Trading Platform rules.

6.9.2 A Member shall not submit RFQs or amend RFQ Orders in respect of a Product which is subject to a suspension.

6.10 Suspension of RFQ services

LFEX may suspend any or all RFQ Orders in one or more Products if:

• (a) LFEX determines a system problem has occurred or is likely to occur; or
• (b) it is requested to do so by a Competent Authority; or
• (c) LFEX, in its absolute discretion, considers it appropriate to do so; or
• (d) LFEX, in its absolute discretion, considers that a Member has failed, or is likely to fail, to comply with its obligations under this Rule 6.

6.11 Cancellation of Relevant Transactions

6.11.1 LFEX has discretion to cancel a Relevant Transaction in whatever circumstances it considers appropriate, including but not limited to circumstances where LFEX decides that a Relevant Transaction is an Error Trade.

6.11.2 If an Order appears to be an Error Trade in the opinion of LFEX, LFEX may contact the relevant Member to verify the validity of the Order (but shall be under no obligation to do so).

6.11.3 When considering whether to cancel an Order or a Relevant Transaction, LFEX will take into account:

• (a) the size of the Order or the Relevant Transaction; and
• (b) the price of the Order or the Relevant Transaction.

Each Member will be solely responsible for any reporting or filing requirements as may arise under Applicable Law in connection with the use of the LFEX Trading Platform by such Member.

8.1 LFEX has no obligation to provide any clearing or settlement services to members unless otherwise specifically provided for under these Rules or as otherwise notified.

8.2 Specifically LFEX will not provide any support for payments services or delivery services for the Products purchased/sold and the counterparties will be obliged to make their own arrangements post trade to include (but not exhaustive) invoicing for the Products, payment for the Products, transportation, insurance, provenance documentation, foreign currency conversion, shipping documentation, duty and tax payments or money transfers. LFEX accepts no liability and takes no responsibility for the quality, quantity or merchantability for Products delivered to purchasers. LFEX requires Members to inform LFEX where Products are misrepresented or fraudulently described and may at its own discretion take action against Members as described in Rule 10.5 (and Rule 10 shall apply).

8.3 Obligations on Members

8.3.1 Where a Member is acting as agent for another person, and failure to deliver Products and/or cash is the fault of another person, that Member will be bound as principal with the counterparty to the Relevant Transaction.

8.3.2 A Member will settle a Relevant Transaction using generally pre-agreed standard settlement formats and market convention for the settling of such transactions, which may or may not include balancing adjustments (overs and unders), post trade/pre-delivery invoicing for delivered Products, balancing credit notes between the parties for agreed adjustments, and payment terms as agreed between the parties.

8.3.3 A Member shall ensure that Products and/or cash delivered in settlement of a Relevant Transaction are free of any lien, charge or encumbrance.

IN THE CASE OF A SETTLEMENT DEFAULT BY A MEMBER, OR ITS CLIENT, WITH REGARD TO A RELEVANT TRANSACTION IT WILL BE FOR THE AFFECTED MEMBERS TO RESOLVE SUCH MATTERS WITHOUT RECOURSE TO LFEX. THE MEMBERS SHOULD NOTIFY LFEX OF ANY SETTLEMENT DEFAULT AND LFEX MAY TAKE ACTIONS WITH REGARD TO THE MEMBERS ACTIVITY ON THE LFEX TRADE PLATFORM UNDER CLAUSE 2.2 ELIGIBILITY

If at any time a Member suffers an Event of Default, LFEX may take action in its sole discretion as it deems appropriate. Such actions may include but shall not be limited to the following:

• (a) to cancel some or all Orders or Relevant Transactions;
• (b) to suspend the Member’s participation on the LFEX Trading Platform;
• (c) to treat any or all Orders or Relevant Transactions then outstanding as having been repudiated by the Member, in which case LFEX obligations under such Orders and/or Relevant Transactions shall be cancelled and terminated.

LFEX is not responsible for and shall not be liable for the default of any Member on any Relevant Transaction. Relevant Transactions undertaken on the LFEX Trading Platform are not subject to any compensation scheme.

10.1 Market surveillance

10.1.1 LFEX will monitor activity on LFEX Trading Platform to identify potential breaches of these Rules, disorderly trading conditions and conduct that may amount to market abuse.

10.2 Information

10.2.1 Each Member is required to notify LFEX immediately it becomes aware of a significant contravention by itself, or any other Member, of these Rules.

10.2.2 LFEX may require the immediate provision by a Member of accurate information about its Relevant Transactions in a format, electronic or otherwise, as specified by LFEX.

10.2.3 LFEX may require the immediate production of documents relating to the LFEX Trading Platform in the Member’s possession, custody, power or control.

10.2.4 Notwithstanding Rule 2.5, LFEX may disclose any information or documents for the purpose of enabling it to institute, continue, or defend any proceedings, including any court proceedings.

10.2.5 LFEX may keep information or documents which come into its possession under these Rules for such period as it considers appropriate.

10.3 Investigation

10.3.1 Once LFEX has determined in its absolute discretion that a Rule breach has occurred (whether such Rule breach is detected by LFEX or reported by another Member), LFEX will consider all the circumstances of the case in order to determine whether to invoke sanctions under Rule 10.5. In considering whether to impose such sanctions, LFEX will have regard to the following factors:

• (a) the nature and seriousness of the breach:
  (i) whether the Rule breached is of high importance to the running of an orderly market;
  (ii) whether the breach was deliberate or reckless and/or whether the Member acted with a lack of integrity in the course of the breach or the subsequent investigation;
  (iii) the market impact of the breach on the orderliness of the market, including whether the integrity of the LFEX Trading Platform is damaged and whether proper standards of market conduct were disregarded;
  (iv) the duration and/or frequency of the breach;
  (v) the amount of any benefit gained or loss avoided as a result of the breach;
  (vi) whether the breach reveals systemic weakness in the Member’s internal systems and controls relating to the Member’s participation and trading on the LFEX Trading Platform;
  (vii) whether there are a number of small issues, which individually may not justify sanctions, but which do so when taken collectively.
• (b) the conduct of the Member before and after the breach:
  (i) if the breach was not identified by LFEX, how quickly, effectively and completely the Member brought the breach to the attention of LFEX;
  (ii) the degree of cooperation the Member showed during the investigation of the breach;
  (iii) any remedial action taken by the Member since the Rule breach was identified (including taking disciplinary action against employees, agents or customers involved; addressing any systemic failures; and taking action designed to ensure that similar issues did not arise in the future); and
  (iv) the likelihood that the same type of Rule breach will recur if no action is taken.
• (c) the previous compliance record of the Member:
  (i) whether LFEX has previously requested the Member take remedial action to rectify the same or similar issue;
  (ii) whether the Member has previously given undertakings to LFEX that similar issues have been resolved and a particular behaviour has ceased;
  (iii) whether LFEX has previously invoked sanctions against the Member for the breach in question; and
  (iv) the general compliance history of the Member.
• (d) action taken by LFEX in previous similar cases: LFEX will take account of the action it has taken previously in the same or related cases and will record any investigations on the Member’s compliance record.

10.4 Assistance

Members will provide all reasonable assistance to LFEX and its delegates including without limitation providing access to information, premises and individuals reasonably within the control of the Member regarding:

• (a) the provision of all information and documents requested by LFEX; and
• (b) investigations by LFEX of a Member’s compliance with these Rules.

10.5 Sanctions

In the interests of maintaining a fair and orderly market, LFEX will have absolute discretion in using any/all of the following sanctions for breach of the Rules in relation to a Member or a former Member who is still bound by the Rules in accordance with Rule 2.6 and will notify a Member of any decision to apply any such sanction:

• (a) written warning;
• (b) temporary suspension;
• (c) publication of details of the offender and rule infringement;
• (d) levying a fine;
• (e) issuing a cease and desist order; and/or
• (f) termination of participation.

10.6 Complaints

10.6.1 Any complaint about the conduct of a Member or suspicion that any of the foregoing has committed or is about to commit a breach of these Rules, shall be made in writing, where possible, and be addressed to LFEX.

10.6.2 If LFEX considers the complaint to have merit and that it may constitute a breach of these Rules he or she may recommend to LFEX Trading Platform Supervisor that it commence an investigation into the potential breach of the Rules. LFEX may give notice to a Member of the results of any such investigation which may include notice of a sanction pursuant to Rule 10.5.

10.7 Waiver

LFEX may, at its discretion, waive the enforcement of these Rules but any waiver shall not prevent or restrict LFEX from taking action to enforce these Rules whether in respect of any other infringement of them (even if related) or against any other Member in relation to the same breach.

The Rules are governed by, and shall be construed in accordance with, the laws of England and Wales.

1. LFEX TRADING PLATFORM Product types

The following Product types are available for trading on the LFEX Trading Platform:

2. Trading Hours and Calendar

LFEX TRADING PLATFORM is open for trading Monday 01.00 GMT to Friday 21.00 GMT, unless otherwise stated in the Product Specifications on the LFEX website – www.lfexchange.com.

Trading Days are as provided on the Trading Calendar on the LFEX website www.lfexchange.com.

3. Access to the LFEX Trading Platform

Members can interact with the electronic trading platform via the LFEX Trading Platform GUI. How to access and GUI user guides are available on the LFEX website – www.lfexchange.com.

4. Orders

LFEX Trading Platform supports the following order types:

• Indicative Orders.
• RFQ – Request For Quote.

5. Order execution

LFEX Trading Platform supports the following types of trade execution –

• Execution of Indicative and RFQ Orders.

6. Error Trades

See Rule 6- Error trade policy. Further if two counterparties agree that an Error Trade has taken place between them, they may at their own discretion cancel that trade as between themselves. The Counterparties will notify LFEX of such cancellation, and LFEX at its discretion may instigate a reversing trade between the parties. Normal transaction fees will apply for such transactions.

7. Closed User Groups / Trading Groups / New Members

Members may select trading counterparties and groups of counterparties on the LFEX Trading Platform. It is the responsibility of the Members to ensure that they correctly identify trading counterparties on the LFEX Trading Platform for transactions, and further provide correct notification to LFEX of the nominated Members that they wish to establish within any User Group / Closed User group. LFEX will have no responsibility for Members selecting the incorrect counterparties on the platform, and nor shall LFEX have any responsibility for inaccurate / incomplete counterparty information on the LFEX Trading Platform.

Members may request LFEX to invite new Members to the LFEX Trading Platform. Such new members will be subject to the Rules around Eligibility Criteria as described in Clause 2.2, and subject to completion of the LFEX Membership Agreement, take on process, and any other such criteria as mandated by LFEX at that time.