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[Federal Register Volume 90, Number 22 (Tuesday, February 4, 2025)]
[Notices]
[Pages 8946-8948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-02162]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-102305]

Order Granting Registration of Security-Based Swap Execution 
Facilities

January 29, 2025.

I. Introduction

    On or prior to August 12, 2024, eight entities filed with the 
Securities and Exchange Commission (``Commission'') applications on 
Form SBSEF to register as security-based swap execution facilities 
(``SBSEF(s)'') pursuant to section 3D(a)(1) of the Securites Exchange 
Act of 1934 (``Exchange Act'' or ``Act'') and 17 CFR 242.803 (``Rule 
803'').\1\ As discussed below, after reviewing each SBSEF Applicant's 
Form SBSEF registration application (including the representations 
included therein), this order grants each SBSEF Applicant registration 
as a SBSEF.
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    \1\ 15 U.S.C. 78c-4; 17 CFR 242.803. See Form SBSEF applications 
filed by Bloomberg SEF LLC (August 2, 2024); GFI Swaps Exchange LLC 
(initially filed as GFI Securities LLC) (Aug. 12, 2024); GLMX 
Technologies, LLC (Aug. 12, 2024); ICE Swap Trade, LLC (Aug. 12, 
2024); tpSEF Inc. (Aug. 7, 2024); Tradition SEF, LLC (Aug. 12, 
2024); TW SEF LLC (Aug. 12, 2024); WEMATCH.LIVE LLC (July 26, 2024) 
(collectively, ``SBSEF Applicant(s)''). The portions of the SBSEF 
Applicants' applications on Form SBSEF that are not subject to 
confidential treatment requests are available for public viewing on 
the Commission's website at https://www.sec.gov/edgar/search/#/q=SBSEF&filter_forms=SBSEF.
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II. Background

A. Statutory and Rule Requirements

    Section 3D of the Exchange Act was enacted as part of Title VII of 
the Dodd-Frank Wall Street Reform and Consumer Protection Act.\2\ 
Section 3D(a)(1) of the Exchange Act provides that no person may 
operate a facility for the trading or processing of security-based 
swaps (``SBS'') unless the facility is registered as a SBSEF or as a 
national securities exchange.\3\ Section 3D(d) enumerates 14 Core 
Principles with which SBSEFs must comply.\4\ And section 3D(f) requires 
the Commission to prescribe rules governing the regulation of SBSEFs.
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    \2\ Public Law 111-203, H.R. 4173, sec. 763(c).
    \3\ 15 U.S.C. 78c-4(a)(1).
    \4\ 15 U.S.C. 78c-4(d).
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    On November 2, 2023, the Commission adopted Regulation SE to govern 
the registration and regulation of SBSEFs as required by section 3D of 
the Exchange Act.\5\ Regulation SE sets forth

[[Page 8947]]

rules governing the registration and post-registration regulation of 
SBSEFs, rules that implement the 14 statutory Core Principles with 
which SBSEFs must comply, and rules that address issues relating to SBS 
execution generally. Specifically, the 14 core principles, and 
corresponding Regulation SE rule provisions, are:
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    \5\ Securities Exchange Act Release No. 98845 (Nov. 2, 2023), 88 
FR 87156, 87237 (Dec. 15, 2023) (``Adopting Release''); 15 U.S.C. 
78c-4. The Commission proposed Regulation SE on Apr. 6, 2022. See 
Rules Relating to Security-Based Swap Execution and Registration and 
Regulation of Security-Based Swap Execution Facilities, Securities 
Exchange Act Release No. 94615 (Apr. 6, 2022), 87 FR 28872 (May 11, 
2022) (``Proposing Release'').

------------------------------------------------------------------------
                                                          Regulation SE
                  Core principle title                       rule No.
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Compliance with Core Principles........................              818
Compliance with Rules..................................              819
Security-Based Swaps Not Readily Susceptible to                      820
 Manipulation..........................................
Monitoring of Trading and Trade Processing.............              821
Ability to Obtain Information..........................              822
Financial Integrity of Transactions....................              823
Emergency Authority....................................              824
Timely Publication of Trading Information..............              825
Recordkeeping and Reporting............................              826
Antitrust Considerations...............................              827
Conflicts of Interest..................................              828
Financial Resources....................................              829
System Safeguards......................................              830
Designation of Chief Compliance Officer................              831
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    The Regulation SE rules other than those that implement the 
statutory Core Principles are:

------------------------------------------------------------------------
                                                          Regulation SE
                Regulation SE rule title                     rule No.
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Scope..................................................              800
Applicable provisions..................................              801
Definitions............................................              802
Requirements and procedures for registration...........              803
Listing products for trading by certification..........              804
Voluntary submission of new products for Commission                  805
 review and approval...................................
Voluntary submission of rules for Commission review and              806
 approval..............................................
Self-certification of rules............................              807
Availability of public information.....................              808
Staying of certification and tolling of review period                809
 pending jurisdictional determination..................
Product filings by security-based swap execution                     810
 facilities that are not yet registered and by dormant
 security-based swap execution facilities..............
Information related to security-based swap execution                 811
 facility compliance...................................
Enforceability.........................................              812
Prohibited use of data collected for regulatory                      813
 purposes..............................................
Entity operating both a national securities exchange                 814
 and security-based swap execution facility............
Methods of execution for required and permitted                      815
 transactions..........................................
Trade execution requirement and exemptions therefrom...              816
Trade execution compliance schedule....................              817
Application of the trade execution requirement to cross-             832
 border security-based swap transactions...............
Cross-border exemptions................................              833
Mitigation of conflicts of interest of security-based                834
 swap execution facilities and certain exchanges.......
Notice to Commission by security-based swap execution                835
 facility of final disciplinary action or denial or
 limitation of access..................................
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    Rule 802 of Regulation SE defines a SBSEF as having the same 
meaning as in section 3(a)(77) of the Act, which states that a SBSEF is 
a trading system or platform in which multiple participants have the 
ability to execute or trade SBSs by accepting bids and offers made by 
multiple participants in the facility or system, through any means of 
interstate commerce, including any trading facility, that facilitates 
the execution of SBSs between persons; and is not a national securities 
exchange.\6\ For any trading system or platform that falls within the 
SBSEF definition, Rule 803 of Regulation SE requires that system or 
platform to register with the Commission as a SBSEF or a national 
securities exchange.\7\
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    \6\ See 17 CFR 242.802; 15 U.S.C. 78c(77). Rule 802 does not 
include in the SBSEF definition any entity that is registered with 
the Commission as a clearing agency pursuant to section 17A of the 
Act and limits its SBSEF functions to operation of a trading session 
that is designed to further the accuracy of end-of-day valuations. 
See 17 CFR 242.802; see also 15 U.S.C. 78q-1.
    \7\ See 17 CFR 242.803.
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    Specifically, Rule 803 of Regulation SE sets forth the requirements 
and procedures for registration as a SBSEF, including what must inform 
the Commission's determination whether to grant or deny registration. 
With respect to granting registration, Rule 803(b)(6)(i) states:

    The Commission shall issue an order granting registration upon a 
Commission determination, in its own discretion, that the applicant 
has demonstrated compliance with the Act and the Commission's rules 
applicable to security-based swap execution

[[Page 8948]]

facilities. If deemed appropriate, the Commission may issue an order 
granting registration subject to conditions.

    And with respect to denying registration, Rule 803(b)(6)(ii) 
states:

    The Commission may issue an order denying registration upon a 
Commission determination, in its own discretion, that the applicant 
has not demonstrated compliance with the Act and the Commission's 
rules applicable to security-based swap execution facilities. If the 
Commission denies an application, it shall specify the grounds for 
the denial.

B. Compliance Schedule

    In 2011, the Commission published for comment proposed Regulation 
SBSEF relating to, among other things, the registration and regulation 
of SBSEFs.\8\ After issuing the 2011 SBSEF Proposal, the Commission 
granted temporary exemptive relief regarding registration of any SBS 
trading venue as a SBSEF, national securities exchange, and/or 
broker.\9\ The Temporary SBSEF Exemptions, among other things, 
permitted SBS trading venues that were not registered as exchanges or 
brokers, and that could not register as SBSEFs (because final rules for 
such registration had not been adopted), to continue to trade SBS 
products.\10\ According to their terms, the Temporary SBSEF Exemptions 
expire upon the earliest compliance date for the Commission's final 
rules regarding SBSEF registration.\11\ In 2022, the Commission re-
proposed Regulation SE,\12\ and the Temporary SBSEF Exemptions remained 
in force.\13\
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    \8\ See Securities Exchange Act Release No. 63825 (Feb. 2, 
2011), 76 FR 10948 (Feb. 28, 2011) (``2011 SBSEF Proposal'').
    \9\ See Securities Exchange Act Release Nos. 64678 (June 15, 
2011), 76 FR 36287 (June 22, 2011); and 64795 (July 1, 2011), 76 FR 
39927 (July 7, 2011) (collectively, the ``Temporary SBSEF 
Exemptions'').
    \10\ See Temporary SBSEF Exemptions, supra note 9; see also 
Adopting Release, supra note 5, 88 FR at 87228.
    \11\ See Temporary SBSEF Exemptions, supra note 9.
    \12\ See Proposing Release, supra note 5.
    \13\ See id. at 28874.
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    In the Adopting Release, the Commission set forth the following 
compliance schedule: (1) the adopted rules became effective on February 
13, 2024 (the ``Effective Date''); (2) the Temporary SBSEF Exemptions 
expired on August 12, 2024, which was 180 days after the Effective 
Date, for any entity that had not filed an application to register with 
the Commission on Form SBSEF; (3) for any entity that filed a Form 
SBSEF registration application on or before August 12, 2024, and whose 
Form SBSEF registration application was complete (having responded to 
requests by the Commission's staff for revisions or amendments) on or 
before October 11, 2024, which was 240 days after the Effective Date, 
the Temporary SBSEF Exemptions expire 30 days after Commission action 
to approve or disapprove the Form SBSEF registration application.\14\
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    \14\ See Adopting Release, supra note 5, 88 FR at 87237.
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III. Discussion

    The SBSEF Applicants each filed a Form SBSEF registration 
application on or before August 12, 2024. After initial review focused 
on the completeness of each application, the Commission determined that 
each application was complete prior to October 11, 2024. Having 
determined each application to be complete, the Commission must 
determine whether each application has met the requirements of Rule 803 
for registration as a SBSEF.
    As stated above, pursuant to Rule 803, the Commission must issue an 
order granting SBSEF registration upon a Commission determination, in 
its own discretion, that the applicant has demonstrated compliance with 
the Exchange Act and the Commission's rules applicable to SBSEFs. 
Additionally, Rule 818(b) provides that, ``[u]nless otherwise 
determined by the Commission, by rule or regulation, a security-based 
swap execution facility . . . shall have reasonable discretion in 
establishing the manner in which it complies with the core principles 
described in section 3D of the Act.'' \15\ The Exchange Act provisions 
and Commission rules applicable to SBSEFs are those set forth in the 
background section above, namely, the statutory provisions contained in 
section 3D of the Exchange Act, and the Commission rules contained in 
Regulation SE.
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    \15\ 17 CFR 242.818(b).
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    After review, the Commission has determined that each SBSEF 
Applicant has demonstrated compliance with the Exchange Act and the 
Commission rules applicable to SBSEFs. Each SBSEF Applicant's Form 
SBSEF application sets forth materials that demonstrate the SBSEF 
Applicant's compliance with the requirements of section 3D of the 
Exchange Act and Regulation SE that must be met upon a grant of 
registration.

IV. Conclusion

    It is hereby ordered that the Form SBSEF application filed by each 
SBSEF Applicant listed below, pursuant to section 3D(a)(1) of the 
Exchange Act and Rule 803 thereunder, be, and hereby is, approved:
    (1) Bloomberg SEF LLC (File No. 039-100022).
    (2) Tradition SEF, LLC (File No. 039-100035).
    (3) GFI Swaps Exchange LLC (File No. 039-100079).
    (4) ICE Swap Trade, LLC (File No. 039-100038).
    (5) TW SEF LLC (File No. 039-100034).
    (6) WEMATCH.LIVE LLC (File No. 039-100017).
    (7) tpSEF Inc. (File No. 039-100023).
    (8) GLMX Technologies, LLC (File No. 039-100030).

    By the Commission.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2025-02162 Filed 2-3-25; 8:45 am]
BILLING CODE 8011-01-P
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