Rule 17 of the Rulebook expressly provides Griffin with the power to monitor participants open interest positions in commodity derivatives.

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1 Griffin Markets Limited Position management controls MIC: GRIF (Operating MIC)/GRIO (Segment MIC) Competent authority: FCA 1. Powers that the trading venue has to monitor the open interest positions of persons. In order to access Griffin s OTF, participants must agree to and sign Griffin s terms of business which incorporate Griffin s Rulebook. By signing the terms of business, participants are agreeing to be bound by the Rulebook. Rule 17 of the Rulebook expressly provides Griffin with the power to monitor participants open interest positions in commodity derivatives. Open interest positions are calculated by Griffin s back office system, Lion. Lion is able to calculate net positions for Spot Month and Other Months in each commodity derivative at a Venue Product Code level. Venue Product Codes represent specific contracts but without taking account of the tenor, for example: Italian power baseload. Griffin intends to list the following commodity derivatives/venue Product codes from 3 January 2018: Instrument Physical/Cash Settled Proposed Venue Product Code Bilateral Spanish Power Baseload Cash ES Fin BSLD Bilateral Spanish Power Off-Peak Cash ES Fin OFFP Bilateral Spanish Power Peak Cash ES Fin PKLD Bilateral Italian Power Baseload Cash IT Fin BSLD Bilateral Italian Power Off-Peak Cash IT Fin OFFP Bilateral Italian Power Peak Cash IT Fin PKLD Bilateral Swiss Power Baseload Physical CH Phy BSLD Bilateral Swiss Power Off-Peak Physical CH Phy OFFP Bilateral Swiss Power Peak Physical CH Phy PKLD Bilateral EUA emissions certificate Physical EUA Bilateral ERU emissions certificate Physical ERU Bilateral CER emissions certificate Physical CER Bilateral Coal API 2 Cash Fin API2 Bilateral Coal API 4 Cash Fin API4 Bilateral LNG JKM Cash Fin JKM

2 Lion will calculate net open positions for each participant in respect of each instrument/vpc in Spot Month and Other Months. Lion will also be able to identify positions held by or on behalf of non-financial entities which are objectively measurable as reducing risks directly relating to the commercial activity of such nonfinancial entities as these will have been flagged by participants in the order entry process. This process of monitoring will be carried out in a real time basis and Lion will generate an alert should any participant breach or come close to any limits. Should a participant s position trigger an alert, it will be investigated by Griffin s compliance team who will determine whether any further action is required. If it is established that a participant has come close to or exceeded a limit, Griffin s compliance officer will inform the participant of the alert result and any action required to reduce the position. Griffin shall also inform the FCA of any breach of any position limit and actions taken to resolve the situation. 2. Powers the trading venue has to access information, including all relevant documentation, from persons about the size and purpose of a position or exposure entered into, information about beneficial or underlying owners, any concert arrangements and any related assets or liabilities in the underlying market. Rule 17 of Griffin s Rulebook includes the following express provision: Griffin is required by law to comply with certain requirements in respect of commodity derivatives (as defined in Article 2(1)(30) MiFIR) which are traded on the OTF. Accordingly, Griffin may at any time (b) require a Participant to provide access to information, including any relevant documentation about the size and purpose of a commodity derivatives position or exposure entered into, information about beneficial or underlying owners, any concert arrangements, and any related assets or liabilities in the underlying market Griffin has the contractual power to suspend or expel participants who breach the requirements of the Rulebook. If Griffin needed to obtain information or documentation from one of its customers relating to the size of purpose of a commodity derivative position or exposure, beneficial or underlying owners, any concert arrangements and any related assets or liabilities in the underlying market, Griffin s compliance officer would contact the compliance officer at the relevant customer to request the required information within a specific timescale.

3 If the information was requested by a competent regulatory authority, Griffin would relay the information to the authority as soon as reasonably practicable after it had been collated. If a customer failed to comply, Griffin has the power to suspend or expel that customer from the OTF pending production of the information. If the information had been requested by a competent regulatory authority, Griffin would report any non-compliance to that authority. 3. Powers the trading venue has to require reduction or termination of positions, on a temporary or permanent basis, as the specific case may require and to unilaterally take appropriate action to ensure the termination or reduction if the person does not comply. Rule 17 of Griffin s Rulebook includes the following express provision: Griffin may at any time (c) where required by law or a competent regulatory authority, require a Participant to terminate or reduce a commodity derivatives position, on a temporary or permanent basis as the specific case may require and to unilaterally take appropriate action to ensure the termination or reduction if the person does not comply. If a user of the OTF was required to terminate or reduce a position, Griffin s compliance officer would contact the relevant user s compliance officer to provide details of the position and the action(s) required to reduce or terminate it within a particular timescale. Griffin s compliance officer would subsequently monitor performance of the action(s) required to ensure that the position was reduced to the required level or terminated. If a participant did not comply with a requirement to terminate or reduce a commodity derivatives position, Griffin would notify the participant that it was going to arrange and execute a transaction(s) through its OTF at the then current market rate in the name of the offending participant in order to reduce or close the position (as appropriate). Griffin would then execute a transaction or number of transactions by creating an order(s) in the name of the relevant participant and matching it/them with orders submitted to the OTF by other participants. In doing so, Griffin would need to have regard to both counterparties credit requirements to ensure that they were able to trade with one another. Any resulting transaction(s) would be processed in the same way as any other transaction such that details including price, volume and contract tenor would be published to the market using the trade ticker incorporated into Trayport s Broker Trading System. Details would also be sent to both counterparties in the form of trade confirmations. Griffin would also report to the FCA any non-compliance by a participant with a request to reduce or terminate a position. 4. Powers the trading venue has to require a person to provide liquidity into the market at an agreed price and volume on a temporary basis with the express intent of mitigating the effects of a large or dominant position, where appropriate.

4 Rule 17 of Griffin s Rulebook includes the following express provision: Griffin may at any time (d) where required by law or a competent regulatory authority, require a Participant to provide liquidity back into the market at an agreed price and volume on a temporary basis with the express intent of mitigating the effects of a large or dominant position. If a user of the OTF was required to provide liquidity back into the market, Griffin s compliance officer would contact the relevant customer s compliance officer to agree the price and volume of the liquidity to be provided. Griffin s compliance officer would subsequently monitor the platform to ensure that the participant was providing sufficient orders to the OTF to satisfy the liquidity requirement. Should a participant fail to agree terms for such liquidity or refuse to cooperate, Griffin would, if required, rely on its power under Rule 17.1(c) above to unilaterally take action to ensure reduction of the position. Griffin would also report any such non-compliance to the FCA. 5. Any other powers the trading venue has in relation to position management, if applicable As well as general powers of suspension and expulsion from access to the OTF, Rule 17.3 of the Rulebook provide as follows: Participants who do not comply with any such requirements shall be subject to disciplinary proceedings as set out below including immediate suspension from trading whilst any investigation or proceedings are carried out. 6. How position management controls apply to persons and take account of the nature and composition of market participants and the use they make of the contracts submitted to trading. Griffin s customers are all participants in the wholesale energy market and are made up of energy utility companies (generators and distributors), banks, hedge funds and trading companies. Griffin does not and will not deal with retail customers. In order to trade commodity derivative contracts through Griffin s OTF, each market participant must have in place bilateral master trading agreements with other market participants. In order to facilitate bilateral trading, all participants will be required to provide Griffin with details of the counterparties with whom they are prepared to trade in specific contracts (credit lists). Participants trade through Griffin s OTF in order to:

5 buy and/or sell natural gas or power; hedge against physical assets; trade speculatively in energy related contracts. Griffin s position management controls are applied in a transparent and non-discriminatory way i.e. they apply equally to all participants. The controls are published in Griffin s Rulebook and constitute part of Griffin s terms and conditions. They are applied in the same way to all participants taking account of transactions which are eligible for exclusion as objectively measurable as reducing risks directly related to commercial activity.