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7. Overview of Adverse Events, Rule Violations and Disciplinary Action

The Exchange's enforcement of this Rules is critical to the health of the Markets. This Chapter sets out the various powers available to the Exchange in connection with its obligation to operate a fair, orderly and transparent market. The Exchange's powers range from temporarily restricting Members' activities to referring the matter to the Disciplinary Committee. The Exchange may exercise various powers as set forth below under two (2) main scenarios — (a) upon the occurrence of an Adverse Event; or (b) where there is a Rule Violation by a Member, Approved Trader or Registered Representative. The powers exercisable by the Exchange upon the occurrence of an Adverse Event are designed to deal swiftly with an unforeseen event. Having exercised such powers as set forth in Rule 7.3, the Exchange may thereafter refer the matter to a Disciplinary Committee if it deems fit. In the event of a Rule Violation, the Exchange's powers are limited to the exercise of certain summary powers prior to the matter being referred to the Disciplinary Committee. In proceedings before the Disciplinary Committee, the Exchange lays a charge against the Member, Approved Trader or Registered Representative concerned, and acts as a prosecutor. To assist in determining if any Rule Violation has occurred, the Exchange also conducts inspections and investigations.