Form DCM Part 38 - Designated Contract Markets

Appendix A to Part 38 — Form DCM
COMMODITY FUTURES TRADING COMMISSION
FORM DCM
CONTRACT MARKET
APPLICATION OR AMENDMENT TO APPLICATION FOR DESIGNATION
EXHIBITS INSTRUCTIONS
Intentional misstatements or omissions of material fact may constitute federal criminal
violations (7 U.S.C. §13 and 18 U.S.C. § 1001) or grounds for disqualification from
designation.
DEFINITIONS
Unless the context requires otherwise, all terms used in this Form DCM have the same
meaning as in the Commodity Exchange Act, as amended (“CEA” or “Act’”), and in the
General Rules and Regulations of the Commodity Futures Trading Commission
(“Commission”) thereunder.
For the purposes of this Form DCM, the term “Applicant” shall include any board of
trade applying for designation as a contract market, any board of trade amending a
pending application, or any designated contract market that is applying for an
amendment to its order of designation.
GENERAL INSTRUCTIONS
1. This Form DCM, which includes instructions, a Cover Sheet, and required
Exhibits (together, “Form DCM”) is to be filed with the Commission by all
Applicants, pursuant to Section 5 of the CEA and the Commission’s regulations
thereunder. Applicants may prepare their own Form DCM but must follow the
format prescribed herein. Upon the filing of an application for designation or a
designation amendment in accordance with the instructions provided herein, the
Commission will publish notice of the filing and afford interested persons an
opportunity to submit written data, views and arguments concerning such
application. No application for designation or designation amendment shall be
effective unless the Commission, by order, grants such designation or amended
designation.
2. Individuals’ names, except the executing signature, shall be given in full (Last
Name, First Name, Middle Name).
3. Signatures on all copies of the Form DCM filed with the Commission can be
executed electronically. If this Form DCM is filed by a corporation, it shall be
signed in the name of the corporation by a principal officer duly authorized; if filed
by a limited liability company, it shall be signed in the name of the limited liability

company by a manager or member duly authorized to sign on the limited liability
company’s behalf; if filed by a partnership, it shall be signed in the name of the
partnership by a general partner duly authorized; if filed by an unincorporated
organization or association which is not a partnership, it shall be signed in the
name of such organization or association by the managing agent, i.e., a duly
authorized person who directs or manages or who participates in the directing or
managing of its affairs.
4. If this Form DCM is being filed as an application for designation, all applicable
items must be answered in full. If any item is inapplicable, indicate by “none,”
“not applicable,” or “N/A,” as appropriate.
5. Under Section 5 of the CEA and the Commission’s regulations thereunder, the
Commission is authorized to solicit the information required to be supplied by this
Form DCM from any Applicant seeking designation as a contract market and
from any designated contract market. Disclosure by the Applicant of the
information specified on this Form DCM is mandatory prior to the start of the
processing of an application for, or an amendment to, designated as a contract
market. The information provided in this Form DCM will be used for the principal
purpose of determining whether the Commission should grant or deny
designation to an Applicant. The Commission may determine that additional
information is required from the Applicant in order to process its application. A
Form DCM which is not prepared and executed in compliance with
applicable requirements and instructions may be returned as not
acceptable for filing. Acceptance of the Form DCM, however, shall not
constitute a finding that the Form DCM has been filed as required or that
the information submitted is true, current, or complete.
6. Except in cases where confidential treatment is requested by the Applicant and
granted by the Commission pursuant to the Freedom of Information Act and the
rules of the Commission thereunder, information supplied on this Form DCM will
be included routinely in the public files of the Commission and will be available
for inspection by any interested person.
APPLICATION AMENDMENTS
1. Part 38 of the Commission’s regulations requires that if any information
contained in this application, or any supplement or amendment thereto, is or
becomes inaccurate for any reason, an amendment to Form DCM, or a
submission under Part 40 of the Commission’s regulations, in either case
correcting such information must be filed promptly with the Commission.
2. Applicants, when filing this Form DCM for purposes of amending an application,
must re-file the Cover Sheet, amended if necessary and including an executing
signature, and attach thereto revised Exhibits or other materials marked to show
changes, as applicable. The submission of an amendment represents that the

remaining items and Exhibits that are not amended remain true, current, and
complete as previously filed.
WHERE TO FILE
This Form DCM must be filed electronically with the Secretary of the Commission in a
format specified by the Secretary of the Commission.
COMMODITY FUTURES TRADING COMISSION
FORM DCM
CONTRACT MARKET
APPLICATION OR AMENDMENT TO APPLICATION FOR DESIGNATION
COVER SHEET
___________________________________________________________________
Exact name of Applicant as specified in charter
___________________________________________________________________
Address of principal executive offices
[ ] If this is an APPLICATION for designation, complete in full and check here.
[ ] If this is an AMENDMENT to an application, or to an existing designation, list all
items that are amended and check here.
___________________________

___________________________

___________________________

___________________________

___________________________

___________________________

___________________________

___________________________

GENERAL INFORMATION
1. Name under which the business of the designated contract market is or will be
conducted, if different than name specified above (include acronyms, if any):
___________________________________________________________________
2. If name of designated contract market is being amended, state previous designated
contract market name:
___________________________________________________________________

3. Contact information, including mailing address if different than address specified
above:
___________________________________________________________________
Number and Street
___________________________________________________________________
City
State
Country
Zip Code
___________________________________________________________________
Main Phone number
Fax
___________________________________________________________________
Website URL
E-mail Address
4. List of principal office(s) and address(es) where designated contract market activities
are/will be conducted:
Office

Address

______________

________________________________________________

______________

________________________________________________

______________

________________________________________________

5. If Applicant is a successor to a previously designated contract market, please
complete the following:
a. Date of succession:
________________
b. Full name and address of predecessor designee
___________________________________________________________________
Name
___________________________________________________________________
City
State
Country
Zip Code
___________________________________________________________________
Main Phone Number
Website URL
BUSINESS ORGANIZATION
6. Applicant is a:
[ ] Corporation

[ ] Partnership
[ ] Limited Liability Company
[ ] Other form of organization (specify) ______________________________________
7. Date of incorporation or formation: _______________________________________
8. State of incorporation or jurisdiction of organization: _________________________
9. Applicant agrees and consents that the notice of any proceeding before the
Commission in connection with this application may be given by sending such notice
by certified mail to the person named below at the address given.
___________________________________________________________________
Print Name and Title
___________________________________________________________________
Name of Applicant
___________________________________________________________________
Number and Street
___________________________________________________________________
City
State
Zip Code
SIGNATURES
10. The Applicant has duly caused this application or amendment to be signed on its
behalf by the undersigned, hereunto duly authorized, this _______________day of,
20___. The Applicant and the undersigned represent hereby that all information
contained herein is true, current, and complete. It is understood that all required items
and Exhibits are considered integral parts of this Form DCM and that the submission of
any amendment represents that all un-amended items and Exhibits remain true, current,
and complete as previously filed.
___________________________________________________________________
Name of Applicant
___________________________________________________________________
Signature of Duly Authorized Person
___________________________________________________________________
Print Name and Title of Signatory

COMMODITY FULURES PFRADING COMMISSION
FORM DCM
CONTRACT MARKET
APPLICATION OR AMENDMENT TO APPLICATION FOR DESIGNATION
EXHIBITS INSTRUCTIONS
The following Exhibits must be filed with the Commission by each Applicant applying for
designation as a contract market, or by a designated contract market amending its
designation, pursuant to Section 5 of the CEA and the Commission’s regulations
thereunder. The Exhibits must be labeled according to the items specified in this Form
DCM.
The application must include a Table of Contents listing each Exhibit required by this
Form DCM and indicating which, if any, Exhibits are inapplicable. For any Exhibit that is
inapplicable, next to the Exhibit letter specify “none,” “not applicable,” or “N/A,” as
appropriate.
LIST OF EXHIBITS
EXHIBITS — BUSINESS ORGANIZATION
1. Attach as Exhibit A, the name of any person(s) who own(s) ten percent (10%) or
more of the Applicant’s stock or who, either directly or indirectly, through agreement
or otherwise, in any other manner, may control or direct the management or policies
of Applicant.
Provide as part of Exhibit A the full name and address of each such person and
attach a copy of the agreement or, if there is none written, describe the agreement
or basis upon which such person exercises or may exercise such control or
direction.
2. Attach as Exhibit B, a list of the present officers, directors, governors (and, in the
case of an Applicant that is not a corporation, the members of all standing
committees grouped by committee), or persons performing functions similar to any
of the foregoing, of the designated contract market or of any entity that performs the
regulatory activities of the Applicant, indicating for each:
1.
2.
3.
4.

Name
Title
Dates of commencement and termination of present term of office or position
Length of time each present officer, director, or governor has held the same office or
position
5. Brief account of the business experience of each officer and director over the last
five (5) years
6. Any other business affiliations in the derivatives and securities industry

7. For directors, list any committees on which they serve and any compensation
received by virtue of their directorship
8. A description of:
1) Any order of the Commission with respect to such person pursuant to Section 5e
of
2) the CEA;
3) Any conviction or injunction against such person within the past ten (10) years;
4) Any disciplinary action with respect to such person within the last five (5) years;
5) Any disqualification under Sections 8b and 8d of the CEA;
6) Any disciplinary action under Section 8c of the CEA; and
7) Any violation pursuant to Section 9 of the CEA.
3. Attach as Exhibit C, a narrative that sets forth the fitness standards for the Board of
Directors and its composition including the number and percentage of public
directors.
4. Attach as Exhibit D, a narrative or graphic description of the organizational structure
of the Applicant. Include a list of all affiliates of the Applicant and indicate the
general nature of the affiliation. Note: If the designated contract market activities of
the Applicant are or will be conducted primarily by a division, subdivision, or other
separate entity, corporation or organization, describe the relationship of such entity
within the overall organizational structure and attach as Exhibit D a description only
as it applies to the division, subdivision or separate entity, as applicable.
Additionally, provide any relevant jurisdictional information, including any and all
jurisdictions in which you or any affiliated entity are doing business, and registration
status, including pending applications (e.g., country, regulator, registration category,
date of registration). Provide the address for legal service of process for each
jurisdiction, which cannot be a post office box.
5. Attach as Exhibit E, a description of the personnel qualifications for each category
of professional employees employed by the Applicant or the division, subdivision, or
other separate entity within the Applicant as described in Item 4.
6. Attach as Exhibit F, an analysis of staffing requirements necessary to carry out
operations of the Applicant as a designated contract market and the name and
qualifications of each key staff person.
7. Attach as Exhibit G, a copy of the constitution, articles of incorporation, formation or
association with all amendments thereto, partnership or limited liability agreements,
and existing by-laws, operating agreement, rules or instruments corresponding
thereto, of the Applicant. Include any additional governance fitness information not
included in Exhibit C. Provide a certificate of good standing dated within one week of
the date of this Form DCM.
8. Attach as Exhibit H, a brief description of any material pending legal proceeding(s),
other than ordinary and routine litigation incidental to the business, to which the
Applicant or any of its affiliates is a party or to which any of its or their property is the

subject. Include the name of the court or agency where the proceeding(s) are
pending, the date(s) instituted, the principal parties involved, a description of the
factual basis alleged to underlie the proceeding(s), and the relief sought. Include
similar information as to any proceeding(s) known to be contemplated by the
governmental agencies.
EXHIBITS — FINANCIAL INFORMATION
9. Attach as Exhibit I:
1. (i) Balance sheet, (ii) Statement of income and expenses, (iii) Statement of cash
flows, and (iv) Statement of sources and application of revenues and all notes or
schedules thereto, as of the most recent fiscal year of the Applicant, or of its
parent company, if applicable. If a balance sheet and any statement(s) certified
by an independent public accountant are available, that balance sheet and
statement(s) should be submitted as Exhibit I.
2. Provide a narrative of how the value of the financial resources of the Applicant is
at least equal to a total amount that would enable the Applicant to cover its
operating costs for a period of at least one year, calculated on a rolling basis, and
whether such financial resources include unencumbered, liquid financial assets
(i.e. cash and/or highly liquid securities) equal to at least six months’ operating
costs.
3. Attach copies of any agreements establishing or amending a credit facility,
insurance coverage, or other arrangement evidencing or otherwise supporting
the Applicant’s conclusions regarding the liquidity of its financial assets.
4. Representations regarding sources and estimates for future ongoing operational
resources.
10. Attach as Exhibit J, a balance sheet and an income and expense statement for
each affiliate of the designated contract market that also engages in designated
contract market activities as of the end of the most recent fiscal year of each such
affiliate, and each affiliate of the designated contract market that engages in swap
execution facility activities.
11. Attach as Exhibit K, the following:
1. A complete list of all dues, fees and other charges imposed, or to be Imposed, by
or on behalf of Applicant for its designated contract market services that are
provided on an exclusive basis and identify the service or services provided for
each such due, fee, or other charge.
2. A description of the basis and methods used in determining the level and
structure of the dues, fees and other charges listed in paragraph (a) of this item.
3. If the Applicant differentiates, or proposes to differentiate, among its customers,
or classes of customers in the amount of any dues, fees, or other charges
imposed for the same or similar exclusive services, so state and indicate the

amount of each differential. In addition, identify and describe any differences in
the cost of providing such services, and any other factors, that account for such
differentiations.
EXHIBITS — COMPLIANCE
12. Attach as Exhibit L, a narrative and any other form of documentation that may be
provided under other Exhibits herein that describe the manner in which the Applicant
is able to comply with each core principle. Such documentation must include 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. To the extent that the application raises issues that are novel, or for which
compliance with a core principle is not self-evident, include an explanation of how
that item and the application satisfy the core principles. Applicant must include a
description of how it meets the definition of “Board of Trade” as defined in §1a(2) of
the CEA.
13. Attach as Exhibit M, a copy of the Applicant’s rules (as defined in § 40.1 of the
Commission’s regulations) and any technical manuals, other guides or instructions
for users of, or participants in, the market, including minimum financial standards for
members or market participants. Include rules citing applicable federal position
limits and aggregation standards in Part 150 or 151, as applicable, of the
Commission’s regulations and any exchange set position limit rules. Include rules on
publication of daily trading information with regards to the requirements of Part 16 of
the Commission’s regulations. The Applicant should include an explanation, and
any other forms of documentation the Applicant thinks will be helpful to its
explanation, demonstrating how its rules, technical manuals, other guides or
instructions for users of, or participants in, the market, or minimum financial
standards for members or market participants as provided in this Exhibit M help
support the designated contract market’s compliance with the core principles.
14. Attach as Exhibit N, executed or executable copies of any agreements or contracts
entered into or to be entered into by the Applicant, including third party regulatory
service provider or member or user agreements that enable or empower the
Applicant to comply with applicable core principles. Identify: (1) the services that will
be provided; and (2) the core principles addressed by such agreement.
15. Attach as Exhibit O, a copy of any compliance manual, and any other documents,
that describe with specificity the manner in which the Applicant will conduct trade
practice, market and financial surveillance.
16. Attach as Exhibit P, a description of the Applicant’s disciplinary and enforcement
protocols, tools, and procedures and the arrangements for alternative dispute
resolution.

17. Attach as Exhibit Q, a description of the Applicant’s trading system and trade
matching algorithm, and examples of how that algorithm works in various trading
scenarios involving various types of orders.
18. Attach as Exhibit R, a list of rules prohibiting specific trade practice violations.
19. Attach as Exhibit S, a discussion of how trading data will be maintained by the
designated contract market.
20. Attach as Exhibit T, a list of the name of the clearing organization(s) that will be
clearing the Applicant’s trades, and a representation that clearing members of that
organization will be guaranteeing such trades.
21. Attach as Exhibit U, any information (described with particularity) included in the
application that will be subject to a request for confidential treatment pursuant to §
145.9 of the Commission’s regulations.
EXHIBITS -OPERATIONAL CAPABILITY
22. Attach as Exhibit V, information responsive to the Technology Questionnaire (link).
This questionnaire focuses on information pertaining to the Applicant’s program of
risk analysis and oversight. Main topic areas include: information security; business
continuity-disaster recovery planning and resources; capacity and performance
planning; systems operations; systems development and quality assurance; and
physical security and environmental controls.