Terms and conditions

Terms and conditions means any definition of the trading unit or the specific commodity underlying a contract for the future delivery of a commodity or commodity option contract, description of the payments to be exchanged under a swap, specification of cash settlement or delivery standards and procedures, and establishment of buyers' and sellers' rights and obligations under the swap or contract. Terms and conditions include provisions relating to the following:
(1) For a contract for the purchase or sale of a commodity for future delivery or an option on such a contract or an option on a commodity (other than a swap):
(i) Quality and other standards that define the commodity or instrument underlying the contract;
(ii) Quantity standards or other provisions related to contract size;
(iii) Any applicable premiums or discounts for delivery of nonpar products;
(iv) Trading hours, trading months and the listing of contracts;
(v) The pricing basis, minimum price fluctuations, and maximum price fluctuations;
(vi) Any price limits, no cancellation ranges, trading halts, or circuit breaker provisions, and procedures for the establishment of daily settlement prices;
(vii) Speculative position limits, position accountability standards, and position reporting requirements, including an indication as to whether the contract meets the definition of a referenced contract as defined in § 150.1 of this chapter, and, if so, the name of either the core referenced futures contract or other referenced contract upon which the new referenced contract submitted under this part 40 is based.
(viii) Delivery points and locational price differentials;
(ix) Delivery standards and procedures, including fees related to delivery or the delivery process; alternatives to delivery and applicable penalties or sanctions for failure to perform;
(x) If cash settled; the definition, composition, calculation and revision of the cash settlement price or index;
(xi) Payment or collection of commodity option premiums or margins;
(xii) Option exercise price, if it is constant, and method for calculating the exercise price, if it is variable;
(xiii) Threshold prices for an option contract, the existence of which is contingent upon those prices; and
(xiv) Any restrictions or requirements for exercising an option; and
(2) For a swap:
(i) Identification of the major group, category, type or class in which the swap falls (such as an interest rate, commodity, credit or equity swap) and of any further sub-group, category, type or class that further describes the swap;
(ii) Notional amounts, quantity standards, or other unit size characteristics;
(iii) Any applicable premiums or discounts for delivery of nonpar products;
(iv) Trading hours and the listing of swaps;
(v) Pricing basis for establishing the payment obligations under, and mark-to-market value of, the swap including, as applicable, the accrual start dates, termination or maturity dates, and, for each leg of the swap, the initial cash flow components, spreads, and points, and the relevant indexes, prices, rates, coupons, or other price reference measures;
(vi) Any price limits, trading halts, or circuit breaker provisions, and procedures for the establishment of daily settlement prices;
(vii) Speculative position limits, position accountability standards, and position reporting requirements, including an indication as to whether the contract meets the definition of economically equivalent swap as defined in § 150.1 of this chapter, and, if so, the name of either the core referenced futures contract or referenced contract, as applicable, to which the swap submitted under this part 40 is economically equivalent.
(viii) Payment and reset frequency, day count conventions, business calendars, and accrual features;
(ix) If physical delivery applies, delivery standards and procedures, including fees related to delivery or the delivery process, alternatives to delivery and applicable penalties or sanctions for failure to perform;
(x) If cash settled, the definition, composition, calculation and revision of the cash settlement price, and the settlement currency;
(xi) Payment or collection of option premiums or margins;
(xii) Option exercise price, if it is constant, and method for calculating the exercise price, if it is variable;
(xiii) Threshold prices for an option, the existence of which is contingent upon those prices;
(xiv) Any restrictions or requirements for exercising an option; and
(xv) Life cycle events.

Source

17 CFR § 40.1


Scoping language

As used in this part:

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