1.1 Introduction to these Rules

1.1.1   These Rules shall be binding on all Members in respect of their participation in and use of the Exchange. All Members shall observe the Rules at all times which shall be interpreted and given effect in the manner most conducive to:-

a. the recognition of the Exchange as a Recognized Market Operator under Section 8(2) of the SFA and the good reputation of the Exchange (and its Members); in particular with references to Cleartrade being an organized and regulated market place for OTC commodity derivatives which are currently and have been previously unregulated, and therefore the Exchange’s requirements to enforce the provisions of this Rule book in priority over “common practices” in the unregulated OTC commodity derivatives markets.

b. the promotion and maintenance of an orderly market, free of undesirable situations or practices; in particular with reference to Rule 2 (Membership) and the provisions applicable to Broking Members and Rule 7 (Trading Rules) and Rule 7A (Additional Requirements for Conduct of Business) and to part (a) of this Rule 1.1.1.

c. high standards of integrity and fair dealing at all times by all Members when transacting on or via the Exchange with particular reference to Rule 7 and 7A of these Rules.

d. the proper protection for all persons and/or entities interested in the performance of transactions entered into the Exchange, with particular reference to Rule 7 and Rule 7A.

Each of these Rules shall, unless the context otherwise requires, be construed as an independent provision and shall be in addition and without prejudice to any other provision of the Rules.

1.1.2   Where any provision permits the Directors (or a committee appointed for the purpose) to make further directions in relation to the operation of a Rule then the Directors or such committee may in accordance with such provision make such direction or authorize such arrangement in relation to the whole or any part of the Rule. The Directors or such committee also may make or authorize different directions, arrangements or procedures in relation to different categories of Members, between Members and traders and others and may make or authorize such directions, arrangements or procedures generally in all cases subject to such conditions as they may think fit. The Exchange will not waive a particular Rule and/or Rules for all Members. If there is any particular waiver for a Member or a situation, the Exchange will publish the details of such and notify all Members.

1.1.3   Where any provision provides that an action may be taken by the Directors any action taken shall be without prejudice to the right of the Directors themselves to exercise such powers and take such in accordance with such provision as they may think fit.

1.1.4   Where there is no express provision made in the Rules the Directors (or any committee with appropriate powers) may from time to time implement such procedures as they think fit in relation to any aspect of the management of the Exchange and the conduct of business on the Exchange.

1.1.5   The Directors, the Compliance Committee and/or the Compliance Officer may waive or vary particular minor technical requirements of these Rules in such circumstances as the Exchange thinks fit provided that the Directors, the Compliance Committee and/or the Compliance Officer are satisfied that compliance with the such requirements would be unduly burdensome to the Member or person concerned or that compliance with such requirements would not be in the interests of the Exchange, and that waiver or variation of such requirements does not disadvantage other Members or create unacceptable risks for the Exchange. Waivers or variations of minor technical requirements may be publicized at the discretion of the Exchange.

1.1.6   The Rules shall, unless the context otherwise requires, be construed in such a way as to impose responsibility on Members for all acts, omissions, conduct or behaviour of the Member’s Representatives in accordance with Rule 1 (General Rules).

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