402.A.            Jurisdiction and General Provisions

The Business Conduct Committee (“BCC”) shall have: 1) jurisdiction over Members with respect to matters relating to conduct, trading practices, sales practices, trading ethics and market manipulations or other actions that threaten the integrity of the market; 2) the authority, pursuant to Rule 402.C., to take emergency actions; 3) the authority, pursuant to Rule 402.D., to take actions against non-members; 4) the authority, pursuant to Rule 413.B., to conduct hearings on denials of access pursuant to Rule 413.A., and 5) the authority to conduct hearings on all matters over which it has jurisdiction.

The BCC shall act through a Panel composed of a chairman, three Exchange members or employees of member firms and three non-members. A quorum of a Panel shall consist of a majority of the panel, but must include at least two members or employees of member firms and two non-members.

Any Panel that conducts a hearing or proceeding shall consist of panelists who possess sufficiently diverse interests so as to ensure fairness.

No person shall serve on the BCC unless he has agreed in writing that he will not publish, divulge, or make known in any manner, any facts or information regarding the business of any person or any other information which may come to his attention in his official capacity as a member of the BCC, except when reporting to the Board or to a committee concerned with such information or to the Legal Department or Market Regulation Department, when requested by the CFTC or other governmental agency or when compelled to testify in any judicial or administrative proceeding.

All information and documents provided to the BCC and all deliberations and documents related thereto shall be treated as non-public and confidential and shall not be disclosed, except as necessary to further an Exchange investigation or as required by law.

402.B.            Hearings

Hearings by the BCC shall be before a Panel, and shall be conducted by a chairman of the BCC in accordance with the provisions of Rule 408.

If a Member is found guilty, by a majority vote, the Panel may do one or more of the following:

1.     Order the Member to cease and desist from the conduct found to be in violation of the rules;

2.     Order the Clearing Member or other Member to liquidate such portion of the open contracts in the Clearing Member’s or other Member’s proprietary or customers’ accounts, or both, as the Panel deems appropriate to ensure the integrity of Exchange contracts or to ensure an orderly and liquid market;

3.     Order the Clearing Member or its customer to deposit such additional performance bonds with the Clearing House as the Panel deems appropriate to protect the integrity of open contracts;

4.     Prescribe such additional capital or other financial requirements as it deems appropriate;

5.     Restrict the privilege of being affiliated with, or having an interest in, a broker association or guaranteed introducing broker and/or suspend the trading floor access and/or the right to associate with a Member;

6.     Restrict the Member’s access to the Globex platform or to supervise the entry of any orders into the Globex platform by others;

7.     Restrict the Member’s access to the combined CBOT and CME trading floors;

8.     Restrict the Member’s ability to trade or enter orders in any or all Exchange products;

9.     Suspend any or all of the privileges of membership;

10. Expel the member;

11. Impose a fine upon the Member not to exceed $1,000,000 per violation plus the amount of any benefit received as a result of the violation;

12. Issue a reprimand;

13. Prescribe limitations on positions of the Member as may be appropriate;

14. Impose advertising restrictions upon the Member pursuant to these rules; and/or

15. Direct the Member to make restitution, in such amount as is warranted by the evidence, to the account of any party damaged by the conduct, or to the Clearing Member who has previously made restitution to the account of such party.

16. Revoke the regularity status of a regular firm.

The Panel may also find that the evidence warrants an adjustment to the account of a party where a Member, though not in violation of an Exchange rule, has not fulfilled his or its responsibility for proper execution of such party's order.

When determining whether to impose any of the sanctions listed above, the Panel may consider any factors determined by the Panel to be relevant in the context of a particular case, including any of the factors described in the “Sanctioning Guidance to Self-Regulatory Organizations” in the CFTC Policy Statement Relating to the Commission’s Authority to Impose Civil Money Penalties and Futures Self-Regulatory Organizations’ Authority to Impose Sanctions: Penalty Guidelines (1994).

If the Panel shall decide by a majority vote that the matter might warrant a penalty in excess of its own authority, the chairman of the Panel shall refer the matter to the Board for further hearings and decision.

402.C.            Emergency Actions

1.     The BCC is authorized to determine whether an emergency exists and whether emergency action is warranted. The following events and/or conditions may constitute emergencies:

a.     Any actual, attempted, or threatened market manipulation;

b.     Any actual, attempted, or threatened corner, squeeze, congestion, or undue concentration of positions;

c.     Any action taken by the United States or any foreign government or any state or local government body, any other contract market, board of trade, or any other exchange or trade association (foreign or domestic), which may have a direct impact on trading on the Exchange;

d.     The actual or threatened bankruptcy or insolvency of any Member or the imposition of any injunction or other restraint by any government agency, self regulatory organization, court or arbitrator upon a Member which may affect the ability of that Member to perform on its contracts;

e.     Any circumstance in which it appears that a Member or any other person or entity has failed to perform contracts or is in such financial or operational condition or is conducting business in such a manner that such person or entity cannot be permitted to continue in business without jeopardizing the safety of customer funds, Members, or the Exchange; and/or

f.      Any other circumstance which may have a severe, adverse effect upon the functioning of the Exchange.

2.     In the event that the BCC determines, in the good faith exercise of its sole discretion, that an emergency exists, it may take any of the following emergency actions or any other action that may be appropriate to respond to the emergency:

a.     Terminate trading;

b.     Limit trading to liquidation of contracts only;

c.     Impose or modify position limits and/or order liquidation of all or a portion of a Member’s proprietary and/or customers’ accounts;

d.     Order liquidation of positions as to which the holder is unable or unwilling to make or take delivery;

e.     Confine trading to a specific price range;

f.      Modify price limits;

g.     Modify the trading days or hours;

h.     Modify conditions of delivery;

i.      Establish the settlement price at which contracts are to be liquidated; and/or

j.      Require additional performance bond to be deposited with the Clearing House.

All actions taken pursuant to this subsection shall be by a majority vote of the Panel members present. A Member directly affected by the action taken shall be notified in writing of such action. As soon as practicable, the Board and the CFTC shall be notified of the emergency action in accordance with CFTC regulations. Nothing in this section shall in any way limit the authority of the Board, other committees, or other appropriate officials to act in an emergency situation as defined by these rules.

402.D.                            Actions against Non-Members

If the BCC has reason to believe or suspect that any non-member is conducting trading activities in violation of the Commodity Exchange Act or Exchange rules or in a manner that threatens the integrity or liquidity of any contract, the committee may request such non-member and require any Members to appear, produce documents and testify at a Market Regulation Department interview or investigation, or hearing to be conducted by the BCC.

If, after hearing, the BCC determines that the actions of such non-member threaten the integrity or liquidity of any contract or threaten to violate or violate the Commodity Exchange Act or Exchange rules, the BCC may:

1.     Order any Clearing Member to liquidate all or any portion of such non-member’s position;

2.     Order that no Clearing Member accept new positions on behalf of any such non-member;

3.     Deny or terminate access to the Globex platform of such non-member; and/or

4.     Order such action as is necessary to prevent a threat to the contract or violation of the Commodity Exchange Act or Exchange rules.