Terms and Conditions - OTC Direct

Terms and Conditions

Last updated: Friday, January 6, 2023

Background
1. OTC Direct Markets Limited ("OTCDML") is a private limited company incorporated in England and Wales with a company number of 12319264.
2. These Terms and Conditions (also referred to as the "Agreement") set out the agreement by which OTCDML will provide the "Services" (the services falling within the scope of Clause 2 below) to you (the "Customer"). By using our Services, or by logging into OTC Direct (as defined in Clause 2.1), you are confirming your consent to be bound by and accept the terms of this Agreement. You agree that OTCDML may modify this Agreement at any time in its sole discretion and upon giving notice to you. Notice of changes will be posted online at https://app.otcdirect.io/TermsAndConditions and will be effective upon posting. You should review this Agreement periodically by checking https://app.otcdirect.io/TermsAndConditions to ensure familiarity with its then-current terms and conditions. Your continued use of the Services following any modification of or update this Agreement shall constitute your acceptance to the Agreement as modified or updated.
3. This Agreement supersedes any previous agreement between the Customer and OTCDML on the same subject matter and no terms other than this Agreement shall apply to the Services.
4. OTCDML will perform the Services with reasonable skill and care, subject to applicable laws and requirements.
OTC Direct Services
1. OTCDML owns and operates a web-based trading platform (“OTC Direct”) that facilitates online trading of physically and financially settled commodity products. OTC Direct facilitates electronic trading on OTCDML’s own order book/venue (the “OTC Direct Venue”) and also provides access to order books/venues operated by third party brokerage firms (the “Broker Venues”). The scope of this Agreement is strictly limited to trading that occurs on the OTC Direct Venue (the “OTC Direct Transactions”). Trading that occurs on Broker Venues are entirely subject to the terms and conditions of that Broker Venue.
2. Where OTCDML, at its discretion, provides a Customer with access to OTC Direct, OTCDML grants the Customer a limited non-exclusive, non-transferable, revocable licence for it and its nominated staff members ("OTC Direct Users") to use and access OTC Direct in accordance with this Agreement.
3. OTC Direct Users will be provided with a username and password by OTCDML for their individual use (an "OTC Direct Login". The Customer and its OTC Direct Users shall maintain and ensure the security and confidentiality of its OTC Direct Logins and shall not share the username or password with any other individual or entity. The Customer will prevent any unauthorised use of any OTC Direct Login and will immediately notify OTCDML of any suspected unauthorised access to any OTC Direct Login or to OTC Direct.
4. The Customer will designate one or more administrator users for OTC Direct (each an "OTC Direct Admin". An OTC Direct Admin is an employee of the Customer who is duly authorised by the Customer to request OTCDML to:
  1. request the creation, modification, or deletion of an OTC Direct User; and
  2. request access to additional Broker Venues via OTC Direct; and
  3. make amendments to the Customer’s Bilateral Permissions Matrix (as defined later in this Clause) via the Bilateral Permissions page in OTC Direct.
  An OTC Direct Admin can make the requests pursuant to clauses 2.4.1 and 2.4.2 by emailing support@otcdirect.io with the appropriately completed change request form. OTCDML shall use reasonable endeavours to ensure that such requests are processed within one (1) business day of receipt.
  
  OTC Direct provides the functionality for an OTC Direct Admin to configure a set of permissions in OTC Direct that control which counterparties the Customer can transact bilaterally settled products with (the "Bilateral Permissions Matrix"). It is the responsibility of the Customer at all times to verify that their Bilateral Permissions Matrix is complete and accurate. OTCDML is not liable in any way for any erroneous Bilateral Permission Matrix configuration. The Customer acknowledges that modifications to the Bilateral Permissions Matrix can take up to an hour to be processed and implemented by OTC Direct from the time when the OTC Direct Admin makes changes to the Bilateral Permissions Matrix.
5. OTC Direct allows OTC Direct Users to enter bids and offers and to trade bids and offers in certain physically and financially settled commodity products. All bids and offers entered by an OTC Direct User ("Live Orders") are firm and can be transacted without additional consent.
6. Live Orders may at any time be cancelled by OTCDML, acting reasonably, without any liability to the Customer. Such reasons shall include but not be limited to a technical failure of OTC Direct.
7. OTCDML may at its absolute discretion suspend or terminate at any time a Customer's or an OTC Direct User's access to OTC Direct.
8. OTCDML provides its Services on a transaction arranging-only basis and does not advise on the merits of any given OTC Direct Transaction. In using OTC Direct, the Customer represents that it has been solely responsible for making its own independent appraisal and investigations into the risks of each OTC Direct Transaction. OTCDML gives no warranty as to the suitability or risk level of the products traded under this Agreement and assumes no fiduciary duty in its relations with the Customer.
9. The Customer is entirely responsible for the settlement of all transactions executed on OTC Direct directly with the counterparty designated on the trade confirmation. OTCDML is not involved in the settlement of transactions.
10. The Customer shall be solely responsible for:
  1. all Live Orders transmitted through OTC Direct by any of its OTC Direct Users regardless of whether an OTC Direct User’s action was beyond his authority, or whether such transmission was the result of an error, accident, fraud, or similar cause;
  2. arranging for and making all payments in connections with Live Orders;
  3. the use of any information or services obtained through or with the assistance of the OTC Direct Login of any of its OTC Direct Users; and
  4. any and all costs, charges, or expenses incurred in connection with, or as a result of, the use of an OTC Direct Login, or any improper or fraudulent action in connection therewith.
Market Surveillance
1. All activity taking place and all business placed through OTC Direct will be monitored by OTCDML.
2. In order to prevent or detect instances of market abuse, OTCDML may:
  1. make arrangements for monitoring compliance with and investigate alleged breaches of the Agreement; and
  2. monitor use of OTC Direct with a view to preventing and/or detecting instances of market abuse, market manipulation or insider dealing. Any Customer who engages in or in OTCDML’s opinion appears to have engaged in improper trading activity or attempts to manipulate the market maybe suspended from OTC Direct at OTCDML’s sole discretion. Any incidents of insider trading, market manipulation or any other infringement of the law or other relevant regulatory rules will be reported to the relevant regulatory authority; and
  3. co-operate with any competent regulatory authority which may include making arrangements for the sharing of information with any competent authority.
Trading and Support Hours
1. OTC Direct support hours are Monday to Friday 07:00 to 17:15 U.S Eastern Time. During these times the support@otcdirect.io email is actively monitored.
2. OTC Direct trading hours are 24/7 unless maintenance is taking place.
3. The OTC Direct maintenance window is 03:00 to 06:00 US. Eastern Time. Scheduled system upgrades and maintenance will takeplace between these times. In the event of emergency maintenance being required, this could take place at any time.
Clearing
1. OTC Direct Transactions in certain products can be automatically submitted to the CME Groups’ ClearPort clearing system by OTC Direct. It is the Customer’s responsibility to ensure:
  1. ClearPort has been appropriately configured and permissioned so that the correct clearing accounts and company and trader static data are accessible to OTCDML; and
  2. that the correct clearing account is specified on a quote at the time of entering the bid or offer.
2. The Customer will provide OTCDML with all reasonable assistance to ensure OTCDML can submit cleared OTC Direct Transactions according to the relevant clearing house’s reporting rules. OTCDML is not liable in any way if it must cancel an OTC Direct Transaction if it is unable to submit a cleared OTC Direct Transaction for any reason beyond OTCDML’s control.
Fees
1. The Customer shall, for each OTC Direct Transaction concluded, pay a transaction fee according to the OTC Direct Fee Schedule provided by OTCDML to the Customer and as amended from time to time and emailed to the Customer.
2. All fees will be invoiced on a monthly basis and must be paid within 30 days of receipt.
Confirmations and Disputes
1. OTCDML will email the Customer trade confirmations on the same day of each OTC Direct Transaction. In the absence of manifest error, all OTC Direct Transactions are conclusive and binding on the Customer and it is the Customer’s responsibility to ensure that each OTC Direct Transaction is settled appropriately.
2. In the event that a bilateral (principal to principal) OTC Direct Transaction is being queried by a Customer for a manifest error in an OTC Direct Transaction ("Transaction Error") the following procedure shall apply:
  1. The Customer shall notify the counterparty to the Transaction and OTCDML they believe that there has been a Transaction Error. Such notification shall be by 17:20 Eastern Time on the day the Transaction is concluded. The parties to the Transaction shall seek to reach an agreement in relation to the Transaction.
  2. In the event that the parties to the Transaction are unable within 2 business days of the Transaction to reach an agreement, either of the parties shall notify OTCDML.
  3. Once OTCDML has been so notified, OTCDML shall make its own determination in relation to the OTC Direct Transaction based on the price at which the OTC Direct Transaction was concluded and the then market price. OTCDML shall endeavour to resolve the query between the parties amicably.
  4. In the event that the parties do not agree with OTCDML’s determination in relation to the OTC Direct Transaction then OTCDML shall convene a committee to determine the Transaction Error. The finding of this committee shall be binding on both parties to the OTC Direct Transaction. OTCDML shall not be required to indicate how each member of the committee voted.
  5. The committee shall comprise of no less than three (3) companies (other than the companies who were party to the OTC Direct Transaction or their affiliates) selected by OTCDML from the main market participants (in OTCDML’s good faith opinion) at the time who are willing to participate as a committee member.
  6. The decision of the committee based on a majority vote that the Transaction should be:
    1. unwound; or
    2. implemented as transacted; or
    3. where the committee vote by a majority that the price of the Transaction should be revised, the price of the Transaction shall be revised to the arithmetic average of the prices proposed by all the members of the committee; or
    4. such other decision of the committee as it may in its absolute discretion determine,
    and shall be final and binding.
Confidentiality and Data
1. OTC Direct contains "Confidential Information" (including without limitation copyright, trademarks, underlying software, screen design, layout, look and feel, graphics, order data, trade data and product data) belonging to OTCDML. The Customer shall take all steps reasonably necessary to preserve and protect the Confidential Information and proprietary interest of OTCDML.
2. All rights in and to data in connection with OTC Direct belong to OTCDML and OTCDML does not grant the Customer any rights in the data transmitted through OTC Direct. The Customer will not make any permanent record of this data nor will it re-distribute this data.
3. The Customer acknowledges and agrees that any and all intellectual property rights which may subsist in OTC Direct (including without limitation copyright, trademarks, underlying software, screen design, layout, look and feel, graphics, order data, trade data and product data) are owned by and shall remain the property of OTCDML.
Limitations of Liability and Indemnity
1. Neither OTCDML nor its directors, officers, or employees shall be liable for any losses, damages, costs, fines, liabilities, penalties or expenses incurred or suffered by the Customer in relation to this Agreement (or as a result of or in connection with any OTC Direct Transaction or the Customer’s use of OTC Direct) unless such liability cannot by law be limited or excluded.
2. The Customer undertakes to indemnify OTCDML and keep OTCDML indemnified against all losses, liabilities, actions, claims, costs and damages (including any compensation or damages paid by OTCDML to compromise or settle any claim) and all costs, expenses, penalties and fines in connection with any OTC Direct Transaction that the Customer enters into or any use by the Customer of OTC Direct.
3. OTCDML does not warrant that the use of OTC Direct will be uninterrupted or error freen or does it make any warranty as to the results that may be obtained from use of OTC Direct. The Customer acknowledges that OTC Direct may not perform in accordance with any specification provided to the Customer.
4. OTCDML’s maximum liability in statute, contract,common law, equity and otherwise concerning its performance and/or obligations under this Agreement shall be no more than an amount equal to 100% of the fees received by OTCDML from the Customer under this Agreement.
Customer Warranty
1. The Customer represents and warrants to OTCDML that:
  1. it is duly authorised to enter into this Agreement and has received all due authorisation and corporate power necessary to enter into this Agreement;
  2. each OTC Direct Admin is duly authorised to make requests and amendments as detailed in clause 2.4; and
  3. each OTC Direct User with trading privileges is duly authorised by the Customer to enter into OTC Direct Transactions on the Customer's behalf.
Term
1. This Agreement may be terminated or suspended by either party at any time by giving the other party one month's written notice of its intention to terminate.
2. Termination or suspension shall not relieve the Customer from any payment obligations due and owing to OTCDML.
General
1. Neither party shall be liable for any failure in performance of this Agreement if such failure arises out of causes beyond its control including but not limited to acts of God or the public enemy, pandemic or epidemic, acts of a civil or military authority, fire, flood, labour dispute, unavailability or restriction of computer or data processing facilities or of energy supplies, communications failure, riot or war.
2. Any notice or communication to be made under or in connection with this Agreement in writing (other than modifications) shall be addressed to the party to whom such notice or communication is to be given and shall be deemed to have been delivered to such party when delivered to the registered office of such party 72 hours after being deposited in the post postage pre-paid in an envelope addressed to it at that address. Notices may also be delivered via email to the email address provided for such purposes by a party, and shall be deemed to have been delivered at the time of receipt.
3. The Customer may not assign or transfer this Agreement or any rights, obligations or liabilities hereunder, whether in whole or in part, without OTCDML’s prior written consent. OTCDML may assign or transfer this Agreement by giving written notice to the Customer of such assignment.
4. This Agreement is governed by and shall be construed in accordance with the laws of England and Wales and all disputes in connection with this Agreement shall be subject to the exclusive jurisdiction of the English and Welsh courts.