Tassat Derivatives LLC

Compliance with SEF Core Principles

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Unless otherwise indicated, references to “Rules” are references to specific rules in the Tassat Derivatives LLC (“Tassat”) Rulebook. Capitalized terms used herein without definition 

.have the meanings given to them in the CFTC Regulations or the Rulebook (as applicable). References to Exhibits, unless otherwise indicated, are references to the exhibits 

accompanying Tassat’s application for reinstatement of its SEF registration (the “Application”). 

Note: The SEF registration of trueEX LLC (“trueEX”) was transferred to Tassat Derivatives LLC. This transfer was approved by the CFTC on November 6, 2019. The chart below 

reflects Tassat’s current operations.

1. Regulation Text of Regulation Demonstration of Compliance 

2. 37.100 Core 

Principle 1 –

Compliance with 

Core Principles

3. 37.100(a) In general. To be registered, and maintain registration, as a swap 

execution facility, the swap execution facility shall comply 

with—

This Application and all included documentation generally demonstrate 

Tassat’s compliance with Core Principle 1.

4. 37.100(a)(1) The core principles described in section 5h of the Act; and This Application and all included documentation generally demonstrate 

Tassat’s compliance with Core Principle 1. 

5. 37.100(a)(2) Any requirement that the Commission may impose by rule or 

regulation pursuant to section 8a(5) of the Act.

See generally this Application and accompanying materials. 

Tassat’s current rulebook dated November 6, 2019 and other processes 

are current with the requirements of No-Action Letters (“NALs”) issued 

by the Commission that are relevant to Tassat’s anticipated 

operations. These include the following:

 Rule 542 – NAL 17-60 Block Trades, expiring November 15, 2020

Rule 546 – NAL 17-17 Un-cleared Transactions (footnote 195), expiring

expiring on the effective date of any changes in the regulation

NAL 17-54 Audit Trail/Post-Trade Allocation, expiring November 15, 

2020

NAL 17-61 Annual Compliance Reports and 4th quarter financial 

reports, expiring November 20, 2020.
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6. 37.200 Core 

Principle 2 –

Compliance with 

Rules

A swap execution facility shall:

7. 37.200(a) Establish and enforce compliance with any rule of the swap 

execution facility, including the terms and conditions of the 

swaps traded or processed on or through the swap execution 

facility and any limitation on access to the swap execution 

facility;

● Rule 301 (Jurisdiction; Applicability of Rules),

● Rule 602 (Inquiries and Investigations),

● Rule 402 (Required Disclosures to the Exchange),

● Rule 406 (Authority to Impose Restrictions),

● Rule 610 (Disciplinary Panels),

● Rule 615 (Sanctions).

● Rulebook Chapter 12 ( Digital Assets )

8. 37.200(b) Establish and enforce trading, trade processing, and 

participation rules that will deter abuses and have the capacity 

to detect, investigate, and enforce those rules, including means 

to provide market participants with impartial access to the 

market and to capture information that may be used in 

establishing whether rule violations have occurred;

● Rule 207 (Exchange Access Committee), 

● Rule 215 (Conflicts of Interest), 

● Rule 309 (Dues, Assessments and Fees), 

● Rule 504 (Fraudulent Acts Prohibited, amended effective October 5, 

2016 to include language requested by DMO), 

● Rule 505 (Fictitious and Non-Competitive Transactions Prohibited),

● Rule 506 (Wash Sales Prohibited), 

● Rule 507 (Market Disruption Prohibited), 

● Rule 508 (Market Manipulation Prohibited, amended effective 

October 5, 2016 to include language requested by DMO)), 

● Rule 516 (Withholding Orders Prohibited),

● Rule 517 (Priority of Customers’ Orders), 

● Rule 518 (Handling of Customer Orders), 

● Rule 519 (Disclosing Orders Prohibited)

● Rule 520 (Simultaneous Buy And Sell Orders For Different Beneficial 

Owners),

● Rule 524 (Pre-arranged, Pre-Execution Communications and Noncompetitive Trades Prohibited), 

● Rule 527 (Priority of Execution), 

● Rule 541 (Trade Cancellations and Price Adjustments), 

● Rulebook Chapter 6 (Disciplinary Rules).
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9. 37.200(c) Establish rules governing the operation of the facility, including 

rules specifying trading procedures to be used in entering and 

executing orders traded or posted on the facility, including block 

trades; and

● Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform),

● Rule 1204 (Execution Methods)

 

10. 37.200(d) Provide by its rules that when a swap dealer or major swap 

participant enters into or facilitates a swap that is subject to the 

mandatory clearing requirement of section 2(h) of the Act, the 

swap dealer or major swap participant shall be responsible for 

compliance with the mandatory trading requirement under 

section 2(h)(8) of the Act.

Not applicable. The products to be offered by Tassat are not subject 

to mandatory clearing (and as such, not subject to the mandatory 

trading requirement)

 

11. 37.201 

Operation of SEF 

and compliance 

with rules

12. 37.201(a) A swap execution facility shall establish rules governing the 

operation of the swap execution facility, including, but not 

limited to, rules specifying trading procedures to be followed by 

members and market participants when entering and executing 

orders traded or posted on the swap execution facility, including 

block trades, as defined in part 43 of this chapter, if offered.

● Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform), 

● Rule1204 (Execution Methods)

 

13. 37.201(b) A swap execution facility shall establish and impartially enforce 

compliance with the rules of the swap execution facility, 

including, but not limited to—

14. 37.201(b)(1) The terms and conditions of any swaps traded or processed on 

or through the swap execution facility;

 Rulebook Chapter 12 ( Digital Assets)

15. 37.201(b)(2) Access to the swap execution facility; ● Rulebook Chapter 3 (Access to the Trading Platform),

● Rule 503 (Business Days and Trading Hours),

● Rule 534 (Platform Access Restrictions), 

● Rule 535 (Policies Governing Use of Firm IDs, User IDs and Admin 
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IDs)

● Rule 1215 ( Bitcoin Trading hours)

 Tassat provides impartial access to the platform subject to rules 

governing access. The Exchange Regulation Department (“ERD”), along 

with the Exchange Access Committee, ensures these rules are 

impartially enforced. 

16. 37.201(b)(3) Trade practice rules; Rulebook Chapter 5 (Trading Practices and Business Conduct) sets forth 

trade practices, trading protocols and prohibited conduct. The ERD 

enforces compliance with these rules as part of its real-time and T+1 

surveillance activities.

 .

17. 37.201(b)(4) Audit trail requirements; Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform) and Tassat Market Supervision Manual sets for the audit 

trail requirements for orders and transactions on the Tassat Platform.

 

18. 37.201(b)(5) Disciplinary rules; and Rulebook Chapter 6 (Disciplinary Rules) sets forth rules and procedures 

to be followed in the event the ERD notes a violation of Tassat Rules. 

The scope of Chapter 6 covers all Persons that are subject to the 

jurisdiction of the Exchange.

 

19. 37.201(b)(6) Mandatory trading requirements. Not applicable. The products to be offered by Tassat are not 

subject to the mandatory trading requirement.

20. 37.202 Access 

Requirements

21. 37.202(a) Impartial access to markets and market services. A swap 

execution facility shall provide any eligible contract participant 

and any independent software vendor with impartial access to 
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its market(s) and market services, including any indicative quote 

screens or any similar pricing data displays, provided that the 

facility has:

22. 37.202(a)(1) Criteria governing such access that are impartial, transparent, 

and applied in a fair and nondiscriminatory manner;

● Rule 207 (Exchange Access Committee), 

● Rule 302 (Participants),

 

 

23. 37.202(a)(2) Procedures whereby eligible contract participants provide the 

swap execution facility with written or electronic confirmation 

of their status as eligible contract participants, as defined by the 

Act and Commission regulations, prior to obtaining access; and

● Rule 302 (Participants)

● Rule 316 (Sponsored Access Customers)

● Tassat Participant Agreement

● Tassat Sponsored Access Customer Agreement

Rule 302 and Rule 316 require a Participant or Sponsored Access 

Customer respectively to be an eligible contract participant (“ECP”) and 

if they are executing on behalf of Customers or Clients, such Customers 

or Clients must also be ECPs. Tassat also obtains an ECP 

representation in the Participant and Sponsored Access Customer 

Agreements. This representation requires them to represent their 

status as an ECP and also the status of its Clients/Customers as ECPs. 

The representation also includes an ongoing requirement on the 

Participant or Sponsored Access Customer to notify Tassat if they or 

their Customers/Clients cease to be an ECP.

 

24. 37.202(a)(3) Comparable fee structures for eligible contract participants and 

independent software vendors receiving comparable access to, 

or services from, the swap execution facility.

Rule 309 (Dues, Assessments and Fees).

 

The fees to be charged by Tassat are fair and impartial. All 

participants will be charged the same fees regardless of how they access 

the platform. 

25. 37.202(b) Jurisdiction. Prior to granting any eligible contract participant 

access to its facilities, a swap execution facility shall require that 

the eligible contract participant consent to its jurisdiction.

● Rule 301 (Jurisdiction; Applicability of Rules).

● Tassat Participant Agreement

● Tassat Sponsored Access Customer Agreement
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Rule 301 requires all Person accessing the Exchange directly or indirectly 

to consent to the jurisdiction of Tassat. Tassat also requires 

Participant/Sponsored Access Customers to make a representation in 

the Participant Agreement/Sponsored Access Customer Agreement that 

it and its Customers/Clients, if applicable, shall be subject to the 

jurisdiction of Tassat.

 

 

26. 37.202(c) Limitations on access. A swap execution facility shall establish 

and impartially enforce rules governing any decision to allow, 

deny, suspend, or permanently bar eligible contract participants' 

access to the swap execution facility, including when such 

decisions are made as part of a disciplinary or emergency action 

taken by the swap execution facility.

● Rule 207 (Exchange Access Committee), 

● Rule 302 (Participants), 

● Rule 305 (Trading Privileges), 

● Rule 401 (Duties and Responsibilities of Participants And Authorized 

Traders), 

● Rulebook Chapter 6 (Disciplinary Rules).

 

27. 37.203 Rule 

enforcement 

program

A swap execution facility shall establish and enforce trading, 

trade processing, and participation rules that will deter abuses 

and it shall have the capacity to detect, investigate, and enforce 

those rules.

28. 37.203(a) Abusive trading practices prohibited. A swap execution facility 

shall prohibit abusive trading practices on its markets by 

members and market participants. Swap execution facilities that 

permit intermediation shall prohibit customer-related abuses 

including, but not limited to, trading ahead of customer orders, 

trading against customer orders, accommodation trading, and 

improper cross trading. Specific trading practices that shall be 

prohibited include front-running, wash trading, pre-arranged 

trading (except for block trades permitted by part 43 of this 

chapter or other types of transactions certified to or approved 

by the Commission pursuant to the procedures under part 40 of 

this chapter), fraudulent trading, money passes, and any other 

trading practices that a swap execution facility deems to be 

● Rule 207 (Exchange Access Committee), 

● Rule 215 (Conflicts of Interest), 

● Rule 309 (Dues, Assessments and Fees), 

● Rule 504 (Fraudulent Acts Prohibited, amended effective October 5, 

2016 to include language requested by DMO), 

● Rule 505 (Fictitious and Non-Competitive Transactions Prohibited),

● Rule 506 (Wash Sales Prohibited), 

● Rule 507 (Market Disruption Prohibited), 

● Rule 508 (Market Manipulation Prohibited, amended effective 

October 5, 2016 to include language requested by DMO), 

● Rule 516 (Withholding Orders Prohibited), 

● Rule 517 (Priority of Customers’ Orders), 

● Rule 518 (Handling of Customer Orders), 
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abusive. A swap execution facility shall also prohibit any other 

manipulative or disruptive trading practices prohibited by the 

Act or by the Commission pursuant to Commission regulation.

● Rule 519 (Disclosing Orders Prohibited),

● Rule 520 (Simultaneous Buy And Sell Orders For Different Beneficial 

Owners),

● Rule 524 (Prearranged, Pre-execution Communications and Noncompetitive Trades Prohibited), 

● Rule 527 (Priority of Execution), 

● Rule 1205 (Trade Cancellations and Price Adjustments), 

● Rulebook Chapter 6 (Disciplinary Rules).

 

29. 37.203(b) Capacity to detect and investigate rule violations. A swap 

execution facility shall have arrangements and resources for 

effective enforcement of its rules. Such arrangements shall 

include the authority to collect information and documents on 

both a routine and non-routine basis, including the authority to 

examine books and records kept by the swap execution facility's 

members and by persons under investigation. A swap execution 

facility's arrangements and resources shall also facilitate the 

direct supervision of the market and the analysis of data 

collected to determine whether a rule violation has occurred.

● Rule 403 (Ability to Obtain Information),

● Rule 406 (Authority to Impose Restrictions),

● Rulebook Chapter 6 (Disciplinary Rules),

● Tassat Market Supervision Manual

 

30. 37.203(c) Compliance staff and resources. A swap execution facility shall 

establish and maintain sufficient compliance staff and resources 

to ensure that it can conduct effective audit trail reviews, trade 

practice surveillance, market surveillance, and real-time market 

monitoring. The swap execution facility's compliance staff shall 

also be sufficient to address unusual market or trading events as 

they arise, and to conduct and complete investigations in a 

timely manner, as set forth in §37.203(f).

 Tassat has sufficient staff to comply with this requirement. The ERD 

consists of the CCO and a Market Surveillance Manager, both of whom 

have sufficient experience to perform these functions. 

31. 37.203(d) Automated trade surveillance system. A swap execution facility 

shall maintain an automated trade surveillance system capable 

of detecting potential trade practice violations. The automated 

trade surveillance system shall load and process daily orders and 

trades no later than 24 hours after the completion of the trading 

day. The automated trade surveillance system shall have the 

 NASDAQ SMARTs is operating as a fully automated T+1 trade 

surveillance for CLOB, RFQ and PNT. Tassat will also use NASDAQ 

SMARTs for real-time surveillance at launch. Orders and trades are loaded 

and processed generally the same trading day but no later than the 

following morning.
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capability to detect and flag specific trade execution patterns 

and trade anomalies; compute, retain, and compare trading 

statistics; compute trade gains, losses, and swap-equivalent 

positions; reconstruct the sequence of market activity; perform 

market analyses; and support system users to perform in-depth 

analyses and ad hoc queries of trade-related data.

32. 37.203(e) Real-time market monitoring. A swap execution facility shall 

conduct real-time market monitoring of all trading activity on its 

system(s) or platform(s) to identify disorderly trading and any 

market or system anomalies. A swap execution facility shall have 

the authority to adjust trade prices or cancel trades when 

necessary to mitigate market disrupting events caused by 

malfunctions in its system(s) or platform(s) or errors in orders 

submitted by members and market participants. Any trade price 

adjustments or trade cancellations shall be transparent to the 

market and subject to standards that are clear, fair, and publicly 

available.

The ERD conducts real-time market monitoring of all trading activity 

on the Tassat Platform as it occurs. This is the primary responsibility 

of the Market Surveillance Manager with back up as necessary from the 

CCO.

Pursuant to Rule 1205 (Trade Cancellations and Price Adjustments), 

The Tassat board or its designee has the decision making authority to 

cancel trades or adjust prices to mitigate market disrupting events. 

33. 37.203(f)(1) Investigations and investigation reports— Procedures. A swap 

execution facility shall establish and maintain procedures that 

require its compliance staff to conduct investigations of possible 

rule violations. An investigation shall be commenced upon the 

receipt of a request from Commission staff or upon the 

discovery or receipt of information by the swap execution 

facility that indicates a reasonable basis for finding that a 

violation may have occurred or will occur.

● Tassat Market Supervision Manual

● 605(c) (Review of Investigative Reports)

 

34. 37.203(f)(2) Timeliness. Each compliance staff investigation shall be 

completed in a timely manner. Absent mitigating factors, a 

timely manner is no later than 12 months after the date that an 

investigation is opened. Mitigating factors that may reasonably 

justify an investigation taking longer than 12 months to 

complete include the complexity of the investigation, the 

number of firms or individuals involved as potential wrongdoers, 

the number of potential violations to be investigated, and the 

volume of documents and data to be examined and analyzed by 

● Tassat Market Supervision Manual

● 605(c) (Review of Investigative Reports)

 
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compliance staff.

35. 37.203(f)(3) Investigation reports when a reasonable basis exists for finding a 

violation. Compliance staff shall submit a written investigation 

report for disciplinary action in every instance in which 

compliance staff determines from surveillance or from an 

investigation that a reasonable basis exists for finding a rule 

violation. The investigation report shall include the reason the 

investigation was initiated; a summary of the complaint, if any; 

the relevant facts; compliance staff's analysis and conclusions; 

and a recommendation as to whether disciplinary action should 

be pursued.

● Rule 603 (Reports of Investigations),

● Rule 605 (Review of Investigative Reports), 

● Rule 610 (Disciplinary Panels), 

● Rule 613 (Conducting Hearings of Disciplinary Proceedings).

 

36. 37.203(f)(4) Investigation reports when no reasonable basis exists for finding 

a violation. If after conducting an investigation, compliance staff 

determines that no reasonable basis exists for finding a rule 

violation, it shall prepare a written report including the reason 

the investigation was initiated; a summary of the complaint, if 

any; the relevant facts; and compliance staff's analysis and 

conclusions.

Rule 603 (Reports of Investigations), 

Rule 605 (Review of Investigative Reports).

 

37. 37.203(f)(5) Warning letters. No more than one warning letter may be issued 

to the same person or entity found to have committed the same 

rule violation within a rolling twelve month period.

Rule 615 (Sanctions).

 

38. 37.203(g) Additional sources for compliance. A swap execution facility may 

refer to the guidance and/or acceptable practices in Appendix B 

of this part to demonstrate to the Commission compliance with 

the requirements of §37.203.

Not applicable. 

39. 37.204 

Regulatory 

services 

provided by a 

third party

40. 37.204(a) Use of regulatory service provider permitted. A swap execution 

facility may choose to contract with a registered futures 

Not applicable Tassat does not use a regulatory service provider.
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association or another registered entity, as such terms are 

defined under the Act, or the Financial Industry Regulatory 

Authority (collectively, “regulatory service providers”), for the 

provision of services to assist in complying with the Act and 

Commission regulations thereunder, as approved by the 

Commission. Any swap execution facility that chooses to 

contract with a regulatory service provider shall ensure that 

such provider has the capacity and resources necessary to 

provide timely and effective regulatory services, including 

adequate staff and automated surveillance systems. A swap 

execution facility shall at all times remain responsible for the 

performance of any regulatory services received, for compliance 

with the swap execution facility's obligations under the Act and 

Commission regulations, and for the regulatory service 

provider's performance on its behalf.

41. 37.204(b) Duty to supervise regulatory service provider. A swap execution 

facility that elects to use the service of a regulatory service 

provider shall retain sufficient compliance staff to supervise the 

quality and effectiveness of the regulatory services provided on 

its behalf. Compliance staff of the swap execution facility shall 

hold regular meetings with the regulatory service provider to 

discuss ongoing investigations, trading patterns, market 

participants, and any other matters of regulatory concern. A 

swap execution facility shall also conduct periodic reviews of the 

adequacy and effectiveness of services provided on its behalf. 

Such reviews shall be documented carefully and made available 

to the Commission upon request.

Not applicable

42. 37.204(c) Regulatory decisions required from the swap execution facility. A 

swap execution facility that elects to use the service of a 

regulatory service provider shall retain exclusive authority in all 

substantive decisions made by its regulatory service provider, 

including, but not limited to, decisions involving the cancellation 

of trades, the issuance of disciplinary charges against members 

or market participants, and denials of access to the trading 

platform for disciplinary reasons. A swap execution facility shall 

Not applicable
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document any instances where its actions differ from those 

recommended by its regulatory service provider, including the 

reasons for the course of action recommended by the regulatory 

service provider and the reasons why the swap execution facility 

chose a different course of action.

43. 37.205 Audit 

trail

A swap execution facility shall establish procedures to capture 

and retain information that may be used in establishing whether 

rule violations have occurred.

44. 37.205(a) Audit trail required. A swap execution facility shall capture and 

retain all audit trail data necessary to detect, investigate, and 

prevent customer and market abuses. Such data shall be 

sufficient to reconstruct all indications of interest, requests for 

quotes, orders, and trades within a reasonable period of time 

and to provide evidence of any violations of the rules of the 

swap execution facility. An acceptable audit trail shall also 

permit the swap execution facility to track a customer order 

from the time of receipt through fill, allocation, or other 

disposition, and shall include both order and trade data.

● Rule 217 (Maintenance of Books and Records by the Exchange)

● Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform)

 

CFTC Regulations 37.205 require SEFs to capture and retain all 

audit trail necessary to detect market abuses. In addition, Tassat

Participants and Sponsored Access Customers (SACs”) are required to 

maintain a complete and accurate audit trail of all activity conducted on 

the Tassat Platform. 

Because the Tassat Platform and all methods of execution on the 

Tassat Platform are entirely electronic, Tassat is relying on guidance 

issued by the Division of Swap & Intermediary Oversight in the Federal 

Register, Volume 77 Issue 246 (December 21, 2012) at 75531 in which it 

states a member of a DCM or SEF can rely on electronic order routing or 

order execution systems of FCMs, DCMs or SEFs to record the audit trail 

information it enters into the system in accordance with Commission 

requirements, if the covered person arranges to get access to such 

records in order to satisfy requirements under the regulation. 

http://www.cftc.gov/LawRegulation/FederalRegister/FinalRules/2012-

30691

This reliance on a third party is only appropriate where the records 

maintained by the third party duplicates the information required to be 

kept by the regulation. Therefore, Tassat will maintain all information 
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on behalf of Participants and SACs for any information entered into the 

Tassat Platform. Participants and SACs must maintain any aspect of the 

audit trail that occurs outside of the Tassat Platform. An effective 

program shall identify members and persons and firms subject to the 

Exchange’s recordkeeping rules that have failed to maintain high levels 

of compliance with such requirements, and impose meaningful 

sanctions when deficiencies are found. Tassat’s electronic history 

database includes a history of all indications of interests, requests for 

quotes, orders and trades entered into the trading system or platform 

including all order modifications and cancellations. The audit trail 

captured by Tassat is sufficient to reconstruct all indications of 

interest, requests for quotes, orders, and trades within a reasonable 

period of time and to provide evidence of any violations of Tassat’s 

rules.

 

45. 37.205(b)(1) Elements of an acceptable audit trail program—Original source 

documents. A swap execution facility's audit trail shall include 

original source documents. Original source documents include 

unalterable, sequentially-identified records on which trade 

execution information is originally recorded, whether recorded 

manually or electronically. Records for customer orders 

(whether filled, unfilled, or cancelled, each of which shall be 

retained or electronically captured) shall reflect the terms of the 

order, an account identifier that relates back to the account(s) 

owner(s), the time of order entry, and the time of trade 

execution. Swap execution facilities shall require that all orders, 

indications of interest, and requests for quotes be immediately 

captured in the audit trail.

● Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform).

46. 37.205(b)(2) Transaction history database. A swap execution facility's audit 

trail program shall include an electronic transaction history 

database. An adequate transaction history database includes a 

history of all indications of interest, requests for quotes, orders, 

and trades entered into a swap execution facility's trading 

● Rule 403 (Ability to Obtain Information)

● Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform),

● Rule 523 (Modification and Cancellation of Orders).
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system or platform, including all order modifications and 

cancellations. An adequate transaction history database also 

includes:

 Tassat maintains audit trail data and has the ability to reconstruct all 

historical trades using the SMARTs surveillance system. 

Because the Tassat Platform and all methods of execution on the 

Tassat Platform are entirely electronic, Tassat is relying on guidance 

issued by the Division of Swap & Intermediary Oversight in the Federal 

Register, Volume 77 Issue 246 (December 21, 2012) at 75531 in which it 

states a member of a DCM or SEF can rely on electronic order routing or 

order execution systems of FCMs, DCMs or SEFs to record the audit trail 

information it enters into the system in accordance with Commission 

requirements, if the covered person arranges to get access to such 

records in order to satisfy requirements under the regulation.

http://www.cftc.gov/LawRegulation/FederalRegister/FinalRules/2012-

30691

This reliance on a third party is only appropriate where the records 

maintained by the third party duplicate the information required to be 

kept by the regulation. Therefore, Tassat will maintain all information 

on behalf of Participants and SACs for any information entered into the 

Tassat Platform. Participants and SACs must maintain any aspect of the 

audit trail that occurs outside of the Tassat Platform. An effective 

program shall identify members and persons and firms subject to the 

Exchange’s recordkeeping rules that have failed to maintain high levels 

of compliance with such requirements, and impose meaningful 

sanctions when deficiencies are found. Tassat’s electronic history 

database includes a history of all indications of interests, requests for 

quotes, orders and trades entered into the trading system or platform 

including all order modifications and cancellations. The audit trail 

captured by Tassat is sufficient to reconstruct all indications of 

interest, requests for quotes, orders, and trades within a reasonable 

period of time and to provide evidence of any violations of Tassat’s 

rules.
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Because Tassat is responsible for maintaining audit trail, the ERD 

reviews the audit trail of transactions as part of its surveillance 

procedures to ensure all underlying data is maintained to reconstruct 

transaction history.

Furthermore, Tassat is relying on No-Action Letter 17-54, expiring 

November 15, 2020, regarding relief from the requirements for SEFs to 

capture post-trade allocation information in their audit trail data and to 

conduct associated audit trail reviews of post trade allocations. The NAL 

states that DMO will not take enforcement action against any SEF that 

does not capture post-trade allocations in its audit trail data or conduct 

associated audit trail reviews of post trade allocations, as required by 

Commission regulations 37.205(a) and (b)(2), subject to the following 

conditions: 

1. The SEF must have a rule that requires that market participants 

provide post-trade allocation information to the SEF for particular 

trades, if the SEF, at the request of the Commission or otherwise, 

requests such information; and

2. In the course of a trade practice surveillance or market surveillance 

investigation into any trading activity involving post trade allocations, 

upon such request pursuant to condition 1 above, the SEF must 

ascertain whether a post-trade allocation was made, and if so, the SEF 

must request, obtain and review the post-trade allocation information 

as part of its investigation. This NAL expires on November 15, 2020.

 Tassat Rule 403(b) requires market participants to provide 

information to Tassat upon request.

47. 37.205(b)(2)(i) All data that are input into the trade entry or matching system 

for the transaction to match and clear;

● Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform).

48. 37.205(b)(2)(ii) The customer type indicator code; ● Rule 522(a)(i)(B) and (d) (Recordkeeping Requirements for Entering 

Orders into the Platform).

 Tassat obtains CTI code from clearing firms when accounts are 
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onboarded. It is a challenge to receive accurate information from 

clearing firms. The ERD noted that all accounts onboarded at Tassat

should be assigned either a 2 or a 4. In order to ensure the accuracy of 

the CTI code assigned to each account, Tassat performed a review of 

all accounts that are onboarded and made appropriate changes to 

amend those that were not correct. 

It has been discussed at multiple meetings of the SEF CCOs that this 

information is not used for any purpose. It has also been noted that 

some SEFs have altered the definition of the codes, which causes 

confusion and inconsistency with the clearing firms. However, because 

it is required, Tassat obtains it and also makes sure that it is accurate. 

Therefore, the ERD takes the liberty of amending it if it appears 

inaccurate.

49. 37.205(b)(2)(iii) Timing and sequencing data adequate to reconstruct trading; 

and

See line 46 above.

50. 37.205(b)(2)(iv) Identification of each account to which fills are allocated. See line 46 above regarding allocations and NAL 17-54

51. 37.205(b)(3) Electronic analysis capability. A swap execution facility's audit 

trail program shall include electronic analysis capability with 

respect to all audit trail data in the transaction history database. 

Such electronic analysis capability shall ensure that the swap 

execution facility has the ability to reconstruct indications of 

interest, requests for quotes, orders, and trades, and identify 

possible trading violations with respect to both customer and 

market abuse.

Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform)

All transaction data is stored in Tassat’s master database. Tassat

also maintains all order and transaction history in the SMARTs system.

52. 37.205(b)(4) Safe storage capability. A swap execution facility's audit trail 

program shall include the capability to safely store all audit trail 

data retained in its transaction history database. Such safe 

storage capability shall include the capability to store all data in 

the database in a manner that protects it from unauthorized 

alteration, as well as from accidental erasure or other loss. Data 

shall be retained in accordance with the recordkeeping 

requirements of Core Principle 10 for swap execution facilities 

● Rule 217 (Maintenance of Books and Records by the Exchange) 

● Rule 522(b)(ii) (Recordkeeping Requirements for Entering Orders 

into the Platform),

See also Core Principle 10
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and the associated regulations in subpart K of this part.

53. 37.205(c)(1) Enforcement of audit trail requirements— Annual audit trail and 

recordkeeping reviews. A swap execution facility shall enforce its 

audit trail and recordkeeping requirements through at least 

annual reviews of all members and persons and firms subject to 

the swap execution facility's recordkeeping rules to verify their 

compliance with the swap execution facility's audit trail and 

recordkeeping requirements. Such reviews shall include, but are 

not limited to, reviews of randomly selected samples of frontend audit trail data for order routing systems; a review of the 

process by which user identifications are assigned and user 

identification records are maintained; a review of usage patterns 

associated with user identifications to monitor for violations of 

user identification rules; and reviews of account numbers and 

customer type indicator codes in trade records to test for 

accuracy and improper use.

 Tassat Market Supervision Manual

See line 46 above

54. 37.205(c)(2) Enforcement program required. A swap execution facility shall 

establish a program for effective enforcement of its audit trail 

and recordkeeping requirements. An effective program shall 

identify members and persons and firms subject to the swap 

execution facility's recordkeeping rules that have failed to 

maintain high levels of compliance with such requirements, and 

impose meaningful sanctions when deficiencies are found. 

Sanctions shall be sufficient to deter recidivist behavior. No 

more than one warning letter shall be issued to the same person 

or entity found to have committed the same violation of audit 

trail or recordkeeping requirements within a rolling twelve 

month period.

● Rule 602 (Inquiries and Investigations),

● Rule 615 (Sanctions),

 

55. 37.206 

Disciplinary 

procedures and

sanctions

A swap execution facility shall establish trading, trade 

processing, and participation rules that will deter abuses and 

have the capacity to enforce such rules through prompt and 

effective disciplinary action, including suspension or expulsion of 

members or market participants that violate the rules of the 

swap execution facility.

Rulebook Chapter 6 (Disciplinary Rules).
17

56. 37.206(a) Enforcement staff. A swap execution facility shall establish and 

maintain sufficient enforcement staff and resources to 

effectively and promptly prosecute possible rule violations 

within the disciplinary jurisdiction of the swap execution facility.

● Rule 209 (Chief Compliance Officer),

 

57. 37.206(b) Disciplinary panels. A swap execution facility shall establish one 

or more disciplinary panels that are authorized to fulfill their 

obligations under the rules of this subpart. Disciplinary panels 

shall meet the composition requirements of part 40 of this 

chapter, and shall not include any members of the swap 

execution facility's compliance staff or any person involved in 

adjudicating any other stage of the same proceeding.

● Rule 610 (Disciplinary Panels), 

● Rule 613 (Conducting Hearings of Disciplinary Proceedings).

58. 37.206(c) Hearings. A swap execution facility shall adopt rules that provide 

for the following minimum requirements for any hearing:

 The information below identifies the Tassat Rule that addresses 

each regulation.

59. 37.206(c)(1) The hearing shall be fair, shall be conducted before members of 

the disciplinary panel, and shall be promptly convened after 

reasonable notice to the respondent; and

● Rule 610(e) (Disciplinary Panels), 

● Rule 611(b) (Convening Hearings of Disciplinary Proceedings).

60. 37.206(c)(2) If the respondent has requested a hearing, a copy of the hearing 

shall be made and shall become a part of the record of the 

proceeding. The record shall not be required to be transcribed 

unless:

● Rule 613(a) (Conducting Hearings of Disciplinary Proceedings).

61. 37.206(c)(2)(i) The transcript is requested by Commission staff or the 

respondent;

● Rule 613(g) (Conducting Hearings of Disciplinary Proceedings), 

● Rule 616(d) (Appeal from Hearing Panel Decision, Summary 

Impositions of Fines and Other Summary Actions).

62. 37.206(c)(2)(ii) The decision is appealed pursuant to the rules of the swap 

execution facility; or

● Rule 616(a) (Appeal from Hearing Panel Decision, Summary 

Impositions of Fines and Other Summary Actions).

63. 37.206(c)(2)(iii) The decision is reviewed by the Commission pursuant to section 

8c of the Act or part 9 of this chapter. In all other instances, a 

summary record of a hearing is permitted.

● Rule 614 (Decision of Hearing Panel).

64. 37.206(d) Decisions. Promptly following a hearing conducted in ● Rule 614(a) and (b) (Decision of Hearing Panel).
18

accordance with the rules of the swap execution facility, the 

disciplinary panel shall render a written decision based upon the 

weight of the evidence contained in the record of the 

proceeding and shall provide a copy to the respondent. The 

decision shall include:

65. 37.206(d)(1) The notice of charges or a summary of the charges; ● Rule 614(b)(i) (Decision of Hearing Panel).

66. 37.206(d)(2) The answer, if any, or a summary of the answer; ● Rule 614(b)(ii) (Decision of Hearing Panel).

67. 37.206(d)(3) A summary of the evidence produced at the hearing or, where 

appropriate, incorporation by reference of the investigation 

report;

● Rule 614(b)(iii) (Decision of Hearing Panel).

68. 37.206(d)(4) A statement of findings and conclusions with respect to each 

charge, and a complete explanation of the evidentiary and other 

basis for such findings and conclusions with respect to each 

charge;

● Rule 614(b)(iv) (Decision of Hearing Panel).

69. 37.206(d)(5) An indication of each specific rule that the respondent was 

found to have violated; and

● Rule 614(b)(v) (Decision of Hearing Panel).

70. 37.206(d)(6) A declaration of all sanctions imposed against the respondent, 

including the basis for such sanctions and the effective date of 

such sanctions.

● Rule 614(b)(vi) (Decision of Hearing Panel).

71. 37.206(e) Disciplinary sanctions. All disciplinary sanctions imposed by a 

swap execution facility or its disciplinary panels shall be 

commensurate with the violations committed and shall be 

clearly sufficient to deter recidivism or similar violations by 

other market participants. All disciplinary sanctions, including 

sanctions imposed pursuant to an accepted settlement offer, 

shall take into account the respondent's disciplinary history. In 

the event of demonstrated customer harm, any disciplinary 

sanction shall also include full customer restitution, except 

where the amount of restitution or to whom it should be 

provided cannot be reasonably determined.

● Rule 615(a) (Sanctions).
19

72. 37.206(f) Warning letters. Where a rule violation is found to have 

occurred, no more than one warning letter may be issued per 

rolling twelve month period for the same violation.

● Rule 615(a)(i) (Sanctions). 

73. 37.206(g) Additional sources for compliance. A swap execution facility may 

refer to the guidance and/or acceptable practices in Appendix B 

of this part to demonstrate to the Commission compliance with 

the requirements of §37.206.

Not applicable

74. 37.300 Core 

Principle 3 

swaps not 

readily 

susceptible to 

manipulation

75. 37.300 The swap execution facility shall permit trading only in swaps 

that are not readily susceptible to manipulation.

See 37.301 below.

76. 37.301 To demonstrate to the Commission compliance with the 

requirements of §37.300, a swap execution facility shall, at the 

time it submits a new swap contract in advance to the 

Commission pursuant to part 40 of this chapter, provide the 

applicable information as set forth in Appendix C to part 38 of 

this chapter—Demonstration of Compliance That a Contract is 

not Readily Susceptible to Manipulation. A swap execution 

facility may also refer to the guidance and/or acceptable 

practices in Appendix B of this part.

 In 2018, Tassat worked closely with DMO staff for approval of a 

physically deliverable Bitcoin swap. Although the process was started 

before the issuance of Advisory 18-14 (Advisory with respect to Virtual 

Currency Derivative Product Listings), Tassat received approval to list 

this product in September 2018 and followed the requirements of 

Advisory 19-14 before filing the product for self-certification.

 

 Tassat has various rules in its rulebook intended to prevent 

manipulative behavior in the swaps traded on its Platform, and conducts 

real-time and T+1 market surveillance to ensure compliance with those 

rules:

● Rule 216 (Material, Non-Public Information)

● Rule 504 (Fraudulent Acts Prohibited, amended effective October 5, 

2016 to include language requested by DMO), 

● Rule 508 (Market Manipulation Prohibited, amended effective 

October 5, 2016 to include language requested by DMO),
20

● Rule 519 (Disclosing Orders Prohibited)

● Rule 524 (Pre-arranged, Pre-Execution Communications and Noncompetitive Trades Prohibited

 

Finally,, Tassat has a comprehensive set of Disciplinary Rules and 

procedures to take action against attempts at manipulation. See 

Chapter 6 of the rulebook. (Disciplinary Rules).

77. 37.400 Core 

Principle 4 

Monitoring of 

trading and 

trade processing

The swap execution facility shall:

78. 37.400(a) Establish and enforce rules or terms and conditions defining, or 

specifications detailing:

79. 37.400(a)(1) Trading procedures to be used in entering and executing orders 

traded on or through the facilities of the swap execution facility; 

and

● Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform)

● Rule 523 (Modification and Cancellation of Orders)

● Rule 1204 (Execution Methods)

 

80. 37.400(a)(2) Procedures for trade processing of swaps on or through the 

facilities of the swap execution facility; and

See line 79 above

81. 37.400(b) Monitor trading in swaps to prevent manipulation, price The ERD Staff for market surveillance performs real-time and T+1 
21

distortion, and disruptions of the delivery or cash settlement 

process through surveillance, compliance, and disciplinary 

practices and procedures, including methods for conducting 

real-time monitoring of trading and comprehensive and 

accurate trade reconstructions.

surveillance and monitors for manipulation, price distortion, and 

disruptions. 

The Tassat Market Supervision Manual contains procedures for realtime and T+1 market surveillance and trade practice, including audit 

trail. 

Chapter 6 of the Tassat Rulebook contains a comprehensive set of 

rules to be followed in the event a market participant is found to have 

violated Tassat Rules.

82. 37.401 General 

Requirements

A swap execution facility shall:

83. 37.401(a) Collect and evaluate data on its market participants' market 

activity on an ongoing basis in order to detect and prevent 

manipulation, price distortions, and, where possible, disruptions 

of the physical-delivery or cash-settlement process;

The ERD Staff for market surveillance performs real-time and T+1 

surveillance and monitors for manipulation, price distortion, and 

disruptions, which is enhanced through the use of the SMARTS 

Surveillance system. 

The Tassat Market Supervision Manual contains procedures for realtime and T+1 market surveillance and trade practice, including audit 

trail. 

84. 37.401(b) Monitor and evaluate general market data in order to detect 

and prevent manipulative activity that would result in the failure 

of the market price to reflect the normal forces of supply and 

demand;

 Tassat monitors market data in real time and T+1. Tassat 

receives indicative data for its standard CLOB products. As such, 

Tassat is able to monitor if prices appear to be off market.

The CLOB is monitored in real-time using the NASDAQ SMARTS system 

by a dedicated market surveillance team.

85. 37.401(c) Demonstrate an effective program for conducting real-time 

monitoring of trading for the purpose of detecting and resolving 

abnormalities; and

The Market Surveillance Manager performs real-time surveillance, 

with the CCO serving as back up. Issues are addressed during the 

trading day to the extent possible, with additional coverage on T+1.

86. 37.401(d) Demonstrate the ability to comprehensively and accurately 

reconstruct daily trading activity for the purpose of detecting 

instances or threats of manipulation, price distortion, and 

disruptions.

 Tassat has the ability to reconstruct daily trading activity. See line 

46 above for further information.
22

87. 37.402 

Additional 

requirements 

for physicaldelivery swaps

For physical-delivery swaps, the swap execution facility shall 

demonstrate that it:

 

88. 37.402(a) Monitors a swap's terms and conditions as they relate to the 

underlying commodity market; and

In September 2018, Tassat received CFTC approval to list a physically 

deliverable Bitcoin swap; however, it has not yet launched.

89. 37.402(b) Monitors the availability of the supply of the commodity 

specified by the delivery requirements of the swap.

In September 2018, Tassat received CFTC approval to list a physically 

deliverable Bitcoin swap; however, it has not yet launched.

90. 37.403 

Additional 

requirements 

for cash-settled 

swaps

91. 37.403(a) For cash-settled swaps, the swap execution facility shall 

demonstrate that it monitors the pricing of the reference price 

used to determine cash flows or settlement;

Not applicable. Tassat is not offering any cash settled products at this 

time. 

 

92. 37.403(b) For cash-settled swaps listed on the swap execution facility 

where the reference price is formulated and computed by the 

swap execution facility, the swap execution facility shall 

demonstrate that it monitors the continued appropriateness of 

its methodology for deriving that price; and

Not applicable. Tassat is not offering any cash settled products at this 

time. 

 

93. 37.403(c) For cash-settled swaps listed on the swap execution facility 

where the reference price relies on a third-party index or 

instrument, including an index or instrument traded on another 

venue, the swap execution facility shall demonstrate that it 

monitors the continued appropriateness of the index or 

instrument.

Not applicable. Tassat is not offering any cash settled products at this 

time. 

 

94. 37.404 Ability to 

obtain 

information
23

95. 37.404(a) A swap execution facility shall demonstrate that it has access to 

sufficient information to assess whether trading in swaps listed 

on its market, in the index or instrument used as a reference 

price, or in the underlying commodity for its listed swaps is 

being used to affect prices on its market.

 Tassat monitors market data in real time and T+1. Tassat receives 

indicative data for its standard CLOB products. As such, Tassat is able to 

monitor if prices appear to be off market.

The CLOB is monitored in real-time using the NASDAQ SMARTS system 

by a dedicated market surveillance team.

96. 37.404(b) A swap execution facility shall have rules that require its market 

participants to keep records of their trading, including records of 

their activity in the index or instrument used as a reference 

price, the underlying commodity, and related derivatives 

markets, and make such records available, upon request, to the

swap execution facility or, if applicable, to its regulatory service 

provider, and the Commission.

● Rule 218 (Information Sharing Agreements)

● Rule 403 (Ability to Obtain Information)

● Rule 522(b) (Recordkeeping Requirements for Entering Orders into 

the Platform; Electronic Audit Trail Requirements for Electronic 

Order Routing/Front-End Systems)

97. 37.405 Risk 

controls for 

trading

98. 37.405 The swap execution facility shall establish and maintain risk 

control mechanisms to prevent and reduce the potential risk of 

market disruptions, including, but not limited to, market 

restrictions that pause or halt trading under market conditions 

prescribed by the swap execution facility.

 Tassat has a number of mechanisms that provide risk controls 

required by this regulation, including reasonability checks (levels that 

provide warnings or prevents trader from entering prices outside certain 

limits), message throttles, functionality that cancels all orders on 

disconnect, the ability for a firm to suspend its own users, and 

Tassat’s ability to suspend users, firms and the market as a whole, in 

order to halt trading if warranted. These controls are described in the 

Tassat Market Supervision Manual.

● Rule 1205 (Trade Cancellations and Price Adjustments) sets forth 

rules and conditions under which Tassat can cancel trades 

and/or amend trades due to errors (trader error or technology 

malfunction), and also include rules regarding trade cancellation by 

the Prime Broker. ) 

● Rule 1206 (Price Limits and Trading Halts

● Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform; Electronic Audit Trail Requirements for Electronic Order 

Routing/Front-End Systems)
24

 . 

99. 37.406 Trade 

reconstruction

100. 37.406 The swap execution facility shall have the ability to 

comprehensively and accurately reconstruct all trading on its 

facility. All audit-trail data and reconstructions shall be made 

available to the Commission in a form, manner, and time that is 

acceptable to the Commission.

See line 86 above 

101. 37.407 

Regulatory 

Service Provider

102. 37.407 A swap execution facility shall comply with the regulations in 

this subpart through a dedicated regulatory department or by 

contracting with a regulatory service provider pursuant to 

§37.204.

 Tassat has a dedicated staff consisting of the Market Surveillance 

Manager and the CCO.

103. 37.408 

Additional 

sources for 

compliance

104. 37.408 A swap execution facility may refer to the guidance and/or 

acceptable practices in Appendix B of this part to demonstrate 

to the Commission compliance with the requirements of 

§37.400.

 See lines 78 – 102 above.

105. 37.500 Core 

Principle 5-

Ability to obtain 

information

The swap execution facility shall:

106. 37.500(a) Establish and enforce rules that will allow the facility to obtain 

any necessary information to perform any of the functions 

● Rule 301 (Jurisdiction; Applicability of Rules)

● Rule 403 (Inspections by Exchange)
25

described in section 5h of the Act;

Rule 403(a) allows Tassat to inspect and access systems, equipment 

and software operated by a Participant (including Sponsored Access 

Customers) and any Persons under investigation, and to copy or 

reproduce any data accessed. 

Rule 403(b) requires a market participant to provide that information 

requested by the Exchange, periodically or upon request, to enable the 

Exchange to perform its enforcement obligations.

 

Rule 522(b)(ii) requires market participants to maintain books and 

records required by the CEA, CFTC Regulations, and for the production 

of data contained within the electronic audit trail to be furnished upon 

request by the ERD 

107. 37.500(b) Provide the information to the Commission on request; and ● Rule 216 (Material, Non-Public Information)

● Rule 217 (Maintenance of Books and Records by the Exchange)

● Rule 904 (Market Data)

Rule 216 provides that an Exchange Official may disclose information if 

required by the CFTC.

Rule 217 confirms that Tassat will make the books and records kept 

by it available for inspection by the CFTC or other government agency if 

required.

Rule 904 provides that the CFTC will have access to the Market Data 

pursuant to Part 43 and Part 45.

 

108. 37.500(c) Have the capacity to carry out such international informationsharing agreements as the Commission may require.● Rule 218 (Information-Sharing Agreements)

Rule 218 allows Tassat to enter into information sharing agreements 

or other arrangements or procedures to coordinate surveillance with 
26

other markets on which financial instruments related to the Contracts 

trade.

 Tassat is not currently a party to any international information 

sharing agreements but will enter into them as the Commission may 

require. 

109. 37.501 Establish 

and enforce 

rules

110. 37.501 A swap execution facility shall establish and enforce rules that 

will allow the swap execution facility to have the ability and 

authority to obtain sufficient information to allow it to fully 

perform its operational, risk management, governance, and 

regulatory functions and any requirements under this part, 

including the capacity to carry out international informationsharing agreements as the Commission may require.

● Rule 218 (Information-Sharing Agreements)- see line 134 above

● Rule 403 (Ability to Obtain Information)

● Rule 404 (Minimum Financial and Related Reporting Requirements)

● Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform)

111. 37.502 

Collection of 

information

112. 37.502 A swap execution facility shall have rules that allow it to collect 

information on a routine basis, allow for the collection of nonroutine data from its market participants, and allow for its 

examination of books and records kept by the market 

participants on its facility.

● Rule 403 (Ability to Obtain Information)

113. 37.503 Provide 

information to 

the Commission

114. 37.503 A swap execution facility shall provide information in its 

possession to the Commission upon request, in a form and 

manner that the Commission approves.

● Rule 216 (Material, Non-Public Information)

● Rule 217 (Maintenance of Books and Records by the Exchange)

● Rule 218(b)- (Information-Sharing Agreements)

● Rule 904 (Market Data)
27

Rule 216 authorizes the disclosure of information if required by the 

CFTC or another government agency.

Rule 217 confirms that Tassat will make the books and records kept 

by it available for inspection by the CFTC or other government agency if 

required.

Rule 218(b) provided for Tassat to disclose transactions executed by 

market participants to the CFTC or Other government agency if 

required.

Rule 904 provides that the CFTC will have access to the Market Data 

pursuant to Part 43 and Part 45

115. 37.504 

Information 

sharing 

agreements

116. 37.504 A swap execution facility shall share information with other 

regulatory organizations, data repositories, and third-party data 

reporting services as required by the Commission or as 

otherwise necessary and appropriate to fulfill its self-regulatory 

and reporting responsibilities. Appropriate information-sharing 

agreements can be established with such entities or the 

Commission can act in conjunction with the swap execution 

facility to carry out such information sharing.

Rule 218 (Information-Sharing Agreements)

 Tassat does not currently have any formal information sharing 

agreements in place; however, it participates in a group with CCOs of 

the other SEFs, and NFA in a Joint Compliance Committee-like structure. 

It has been discussed among the group that it should be formalized with 

a confidentiality and information sharing agreement; however to date 

nothing has been established.

The CCOs of the SEFs are attempting to work cooperatively on certain 

issues without such an agreement in place. 

117. 37.600 Core 

Principle 6 –

Position limits 

or accountability
28

118. 37.600(a) In general. To reduce the potential threat of market 

manipulation or congestion, especially during trading in the 

delivery month, a swap execution facility that is a trading facility 

shall adopt for each of the contracts of the facility, as is 

necessary and appropriate, position limitations or position 

accountability for speculators.

● Rule 529 (Position Limits)

● Rule 530 (Position Accountability)

 Tassat, in conjunction with working with the CCOs of the other 

registered SEFs and NFA, submitted a proposal to Vince McGonagle, 

Director of DMO in 2015 regarding the compliance with this core 

principle to ensure consistent treatment across all SEFs. 

DMO agreed to the following rulebook language to comply with this 

core principle:

“To reduce the potential threat of market manipulation or congestion, 

SEF shall adopt for each of the contracts of the facility, as is necessary 

and appropriate, position limitations or position accountability levels for 

speculators.” This language has been incorporated into Tassat Rule 

529 and 530. 

 Tassat has set a position limit for physically deliverable Bitcoin. This 

was vetted by DMO staff during the approval process of this product. 

119. 37.600(b) Position limits. For any contract that is subject to a position 

limitation established by the Commission pursuant to section 

4a(a) of the Act, the swap execution facility shall:

Not applicable

120. 37.600(b)(1) Set its position limitation at a level no higher than the 

Commission limitation; and

See response to line 118 above

121. 37.600(b)(2) Monitor positions established on or through the swap execution 

facility for compliance with the limit set by the Commission and 

the limit, if any, set by the swap execution facility.

See response to line 118 above

122. 37.601 

Additional 

sources for 
29

compliance

123. 37.601 Until such time that compliance is required under part 151 of 

this chapter, a swap execution facility may refer to the guidance 

and/or acceptable practices in Appendix B of this part to 

demonstrate to the Commission compliance with the 

requirements of §37.600.

See response to line 118 above.

124. 37.700 Core 

Principle 7 –

Financial 

integrity of 

transactions

125. 37.700 The swap execution facility shall establish and enforce rules and 

procedures for ensuring the financial integrity of swaps entered 

on or through the facilities of the swap execution facility, 

including the clearance and settlement of the swaps pursuant to 

section 2(h)(1) of the Act.

● Rule 1205 (Trade Cancellations and Price Adjustments)

 

 

 Tassat introduced the workflow, rules and procedures for uncleared 

swaps, including the provisions of CFTC No Action Letter 17-17 (footnote 

195) regarding the confirmation requirements of such trades to comply 

with CFTC Regulation 37.6(b). 

 

126. 37.701 Required 

clearing

127. 37.701 Transactions executed on or through the swap execution facility 

that are required to be cleared under section 2(h)(1)(A) of the 

Act or are voluntarily cleared by the counterparties shall be 

cleared through a Commission-registered derivatives clearing 

organization, or a derivatives clearing organization that the 

Commission has determined is exempt from registration.

Not applicable. Products offered on Tassat will not be cleared.

 

128. 37.702 General A swap execution facility shall provide for the financial integrity 
30

Financial 

Integrity

of its transactions:

129. 37.702 (a) By establishing minimum financial standards for its members, 

which shall, at a minimum, require that members qualify as an 

eligible contract participant as defined in section 1a(18) of the 

Act;

● Rule 302 (Participants)

● Rule 316 (Sponsored Access Customers)

● 

● Tassat Participant Agreement

● Tassat Sponsored Access Customer Agreement

Rule 302 and Rule 316 require a Participant or Sponsored Access 

Customer respectively to be an eligible contract participant (“ECP”) and 

if they are executing on behalf of Customers or Clients, such Customers 

or Clients must also be ECPs. Tassat also obtains an ECP 

representation in the Participant and Sponsored Access Customer 

Agreements. This representation includes an ongoing requirement on 

the Participant or Sponsored Access Customer to notify Tassat if they 

or their Customers/Clients cease to be an ECP.

 

 

130. 37.702 (b) For transactions cleared by a derivatives clearing organization: Not applicable. Products offered on Tassat will not be cleared.

131. 37.702 (b)(1) By ensuring that the swap execution facility has the capacity to 

route transactions to the derivatives clearing organization in a 

manner acceptable to the derivatives clearing organization for 

purposes of clearing; and

Not applicable. Products offered on Tassat will not be cleared.

 

 

132. 37.702 (b)(2) By coordinating with each derivatives clearing organization to 

which it submits transactions for clearing, in the development of 

rules and procedures to facilitate prompt and efficient 

transaction processing in accordance with the requirements of 

§39.12(b)(7) of this chapter.

Not applicable. Products offered on Tassat will not be cleared.

 
31

133. 37.703 

Monitoring of 

financial 

soundness

134. 37.703 A swap execution facility shall monitor its members to ensure 

that they continue to qualify as eligible contract participants as 

defined in section 1a(18) of the Act.

● Rule 302 (Participants)

● Rule 316 (Sponsored Access Customers)

● Market Supervision Manual

Rule 302 and 316 places an obligation on the Participant or Sponsored 

Access Customer respectively to ensure that it and its Customers/Clients

are and continue to be ECPs. 

 

 

135. 37.800 Core 

Principle 8 –

Emergency 

authority

136. 37.800 The swap execution facility shall adopt rules to provide for the 

exercise of emergency authority, in consultation or cooperation 

with the Commission, as is necessary and appropriate, including 

the authority to liquidate or transfer open positions in any swap 

or to suspend or curtail trading in a swap.

● Rule 101 (Definition of Emergency)

● Rule 214 (Emergency Rules)

 Tassat’s definition of Emergency incorporates the definition of 

Emergency in CFTC Regulation 40.1(h). Furthermore, Tassat ensured 

that Rule 214 incorporated the guidance issued by the Commission on 

September 30, 2013.

Rule 214(a)(iv) grants authority to liquidate or transfer open positions in 

any Contracts (subject to CFTC approval where a swap is traded on more 

than one platform) and Rule 214(a)(i) grants authority to suspend or 

curtail trading in any Contract.

 
32

137. 37.801 

Additional 

sources for 

compliance

138. 37.801 A swap execution facility may refer to the guidance and/or 

acceptable practices in Appendix B of this part to demonstrate 

to the Commission compliance with the requirements of 

§37.800.

See response to line 136 above.

139. 37.900 Core 

Principle 9 –

Timely 

publication of 

trading 

information

140. 37.900(a) In general. The swap execution facility shall make public timely 

information on price, trading volume, and other trading data on 

swaps to the extent prescribed by the Commission.

Rule 545 (SDR Reporting)

Rule 804 (Settlement Prices; Publication of Trade Information)

Rule 904 (Market Data)

 Tassat is subject to Part 43 (real time submission) for swaps executed 

on its SEF and DCM. Tassat also publishes daily volume information 

on its website by approximately 7:15 pm (EST) each trading day. The 

daily settlement files are also sent to the CFTC via email at this time. 

The ERD is cc’d on theses emails. As such, it is aware if there are any 

delays or failure to transmit. See line 144 below regarding part 16 

data.

141. 37.900(b) Capacity of swap execution facility. The swap execution facility 

shall be required to have the capacity to electronically capture 

and transmit trade information with respect to transactions 

executed on the facility.

 Tassat electronically captures and transmits trade information to the 

SDR (DTCC) as soon as technologically practicable after execution. 

Tassat combines the Part 43 real-time data with the Part 45 creation 

data in a single submission immediately upon execution.

 

As part of real-time market surveillance, the ERD is aware if there are 
33

any delays in transmitting executed trades to clearing and to the SDR 

The ERD will monitor transmission to SDR in real time and also on

a monthly basis to determine if there is any latency in the process. 

142. 37.901 General 

requirements

With respect to swaps traded on or through a swap execution 

facility, each swap execution facility shall:

143. 37.901(a) Report specified swap data as provided under part 43 and part 

45 of this chapter; and

See line 141 above with respect to transmission times to the SDR.

The ERD will perform reviews of static data obtained during the 

onboarding process throughout the year. In reviewing such data, it will 

review for the accuracy of data obtained from clients when onboarding 

accounts to ensure that information such as the US Person status and 

registration type of the underlying client account is complete and 

accurate. 

144. 37.901(b) Meet the requirements of part 16 of this chapter. 

 Tassat will post on its website at the end of each trading day 

the information required by Part 16. 

Tassat will report as required by e Part 16 Swaps Daily Price and Volume 

Activity- Interim Standard, specifically for swapsthat was developed by 

DMO in 2016.

 

 

 

145. 37.1000 Core 

principle 10-

Recordkeeping 

and reporting

In general. A swap execution facility shall:

146. 37.1000 (a)(1) Maintain records of all activities relating to the business of the ● Rule 217 (Maintenance of Books and Records by the Exchange)
34

facility, including a complete audit trail, in a form and manner 

acceptable to the Commission for a period of five years;

● Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform)

Rule 217 requires the Exchange to keep complete and accurate books 

and records, including those required to be kept pursuant to the CEA 

and CFTC Regulations, for a minimum period of five years.

Rule 522 requires an electronic audit trail to be maintained for a 

minimum of five years. This audit trail is complete, as the data must 

contain all FIX Tag information and fields which should include, but are 

not limited to the following: a record of all fields relating to Order entry, 

including transaction date, product, exchange code, tenor, quantity, 

order type, order qualifier, price/rate, trade direction indicator 

(pay/receive), order number, account number, session ID, Trader ID, 

Firm ID, clearing member, CTI code, and timestamp representing time of 

order entry. For executed trades and a sampling of orders, the Market 

Surveillance Manager will verify that the deal’s execution time has 

been recorded along with the trade price and unique transaction 

number/USI, among other pertinent details. 

 

147. 37.1000 (a)(2) Report to the Commission, in a form and manner acceptable to 

the Commission, such information as the Commission 

determines to be necessary or appropriate for the Commission 

to perform the duties of the Commission under the Act; and

● Rule 217 (Maintenance of Books and Records by the Exchange)

Rule 217 provides that the complete and accurate books and records 

maintained by the Exchange shall be made readily accessible for 

inspection by the CFTC.

Also, as required by Core Principle 9, and CFTC Regulation 16.01(d), 

Tassat sends the information required under Part 16 of the CFTC 

Regulations to the CFTC at the end of each trading day.

148. 37.1000 (a)(3) Keep any such records relating to swaps defined in section ● Rule 217 (Maintenance of Books and Records by the Exchange)
35

1a(47)(A)(v) of the Act open to inspection and examination by 

the Securities and Exchange Commission.

Rule 217 provides that the Exchange shall retain books and records, and 

that they will be readily accessible for inspection by the Securities and 

Exchange Commission.

149. 37.1000 (b) Requirements. The Commission shall adopt data collection and 

reporting requirements for swap execution facilities that are 

comparable to corresponding requirements for derivatives 

clearing organizations and swap data repositories.

Not applicable.

150. 37.1001 

Recordkeeping

151. 37.1001 A swap execution facility shall maintain records of all activities 

relating to the business of the facility, in a form and manner 

acceptable to the Commission, for a period of at least five years. 

A swap execution facility shall maintain such records, including a 

complete audit trail for all swaps executed on or subject to the 

rules of the swap execution facility, investigatory files, and 

disciplinary files, in accordance with the requirements of §1.31 

and part 45 of this chapter.

See response to line 146 above.

152. 37.1100 Core 

Principle 11 –

Antitrust 

considerations

Unless necessary or appropriate to achieve the purposes of the 

Act, the swap execution facility shall not:

153. 37.1100(a) Adopt any rules or take any actions that result in any 

unreasonable restraint of trade; or

● Rule 207 (Exchange Access Committee)

● Rule 302 (Participants)

The Exchange’s Rules have been designed to avoid unreasonable 

restraints of trade or the imposition of any material anticompetitive 

burden on trading, as will the specifications for each Contract approved 

for trading on the Exchange.

In particular, access to the Exchange will not require the acquisition of 

any equity interest but will be available to a broad range and potentially 

unlimited number of participants, on a fair, equitable and timely basis. 

Rule 302 contains eligibility requirements for Participants, which does 
36

not unfairly disadvantage any market participants from trading on 

Tassat. Under Rule 207, the Exchange Access Committee has authority 

to approve rules that would result in different categories or classes of 

Participants receiving disparate access to the Exchange, and will be 

mandated not to, and not to permit the Exchange to, restrict access or 

impose burdens on access in a discriminatory manner, within each 

category or class of Participants or between similarly-situated categories 

or classes of Participants. This Committee shall also review any 

determination made by Exchange Officials to deny access to a 

prospective Participant who fails to meet the eligibility requirements

 

154. 37.1100(b) Impose any material anticompetitive burden on trading or 

clearing.

● Rule 302 (Participants)

● Rule 904 (Market Data)

● Tassat Code of Conduct

Rule 302 describes eligibility to become a Participant. 

Also, as required by Core Principle 9, and CFTC Regulation 16.01(e), 

Tassat publishes the information required under Part 16 of the CFTC 

Regulations on its website at the end of each trading day. Pursuant to 

Rule 904 Tassat reports market data required by Part 43 & Part 45 of 

the CFTC Regulations to an SDR immediately upon execution of a 

transaction. This information is publicly disseminated by the SDR on a 

website that is freely available and readily accessible to the public.

Furthermore, Tassat’s Code of Conduct contains language indicating 

that the Company and its employees are prohibited from taking any 

actions that result in an unreasonable restraint of trade. or impose any 

anticompetitive burden on trading 

Finally, Tassat will self-certify fees to be charged for 

participation on the SEF. All fees are fair and non-preferential. The 

same fee will be charged to all participants on the SEF. 
37

155. 37.1101 

Additional 

sources for 

compliance

156. 37.1101 A swap execution facility may refer to the guidance and/or 

acceptable practices in Appendix B of this part to demonstrate 

to the Commission compliance with the requirements of 

§37.1100.

See response to lines 153 and 154 above

157. 37.1200 Core 

Principle 12 –

Conflicts of 

interest

The swap execution facility shall:

158. 37.1200(a) Establish and enforce rules to minimize conflicts of interest in its 

decision-making process; and

Rule 215 of the Rulebook establishes rules to minimize conflicts of 

interest and a process for resolving conflicts of interest. 

Rule 216 limits the use and disclosure of material non-public 

information gained through the performance of official duties by direct 

and indirect owners of the Exchange, Directors, Officers, members of 

Committees, members of Disciplinary Panels and Appeal Panels, 

members of the Exchange Regulation Department, and other employees 

of the Exchange.

Pursuant to the Regulatory Oversight Committee Charter (“ROC”), 

minimizing potential conflicts of interest is a stated purpose and 

responsibility the ROC.

 Tassat has an established ROC, which is instrumental in minimizing 

conflicts of interests for Tassat as a SEF . Tassat notes 

that certain regulations regarding the mitigation of conflicts of interest, 

including the role of the ROC, have not yet been finalized for SEFs (Core 

Principles and Other Requirements for Swap Execution Facilities 78 FR 

33545, footnote 824); however, because Tassat is operating as a SEF, 
38

it has chosen to adopt similar standards for this SEF core principle to be 

consistent with the CFTC guidance and what is currently in place for 

DCM Core Principle 16. Because SEF core principles set forth minimum 

standards to be met regarding conflicts of interest, Tassat deems it 

appropriate to adopt this standard with the ROC because the ROC is a 

subset of the Tassat board of directors and is comprised only of the 

Public Directors as that term is defined in Part 38 of the CFTC 

Regulations, thus reducing the possibility of conflicts of interest.

159. 37.1200(b) Establish a process for resolving the conflicts of interest. As described in Rule 208, Tassat has a Regulatory Oversight 

Committee (ROC) that is composed of 100% Public Directors as that 

term is defined in Part 38 of the CFTC Regulations. The ROC oversees 

Tassat’s regulatory program on behalf of the Board, and its role includes 

assisting the CCO in minimizing actual and potential conflicts of interest 

under Rule 209(d). Pursuant to the ROC Charter, the ROC is required to 

meet at least quarterly. 

 Disciplinary Panels involved in the enforcement and adjudication 

process described in connection with Core Principle 2 above are subject 

to rules regarding composition as to preclude any group or class of 

industry participants from dominating or exercising disproportionate 

influence under Rule 610. Under Rule 610(d), each Disciplinary Panel 

will be chaired by a Public Participant and may include additional Public 

Participants.

Rule 616 provides for appeal of a Hearing Panel’s decision to an Appeal 

Panel. Under Rule 616(f) and (e), an Appeal Panel will be chaired by a 

Public Participant and may include additional Public Participants, 

respectively.

 

160. 37.1300 Core 
39

Principle 13 –

Financial 

resources

161. 37.1300(a) In general. The swap execution facility shall have adequate 

financial, operational, and managerial resources to discharge 

each responsibility of the swap execution facility.

Upon the transfer of the SEF registration from trueEX to Tassat on 

November 6, 2019, Tassat immediately began to comply with Core 

Principle 13. 

Tassat has made the following filings:

 

Quarter Ending Date Filed by Tassat

12/31/19 4/29/20

03/31/20 5/9/20

06/30/20 8/3/20

 

 

162. 37.1300(b) Determination of resource adequacy. The financial resources of 

a swap execution facility shall be considered to be adequate if 

the value of the financial resources exceeds the total amount 

that would enable the swap execution facility to cover the 

operating costs of the swap execution facility for a one-year 

period, as calculated on a rolling basis.

 Since November 6, 2019 (the effective date of the SEF transfer to 

Tassat), Tassat has maintained financial resources that has exceeded the 

total amount that would enable it to cover its projected operating costs 

for a one-year period, as calculated on a rolling basis. The 

methodology includes direct costs incurred by Tassat, as well as a 

methodology to allocate certain costs incurred by Tassat Group LLC 

(its parent company). The CFO and COO evaluate the 

methodology as needed, at least once a year. In addition, as required 

by DMO Guidance (CFTC Letter 17-25), Tassat includes an 

explanation of its methodology for projected operating costs with each 

quarterly filing.

163. 37.1301 General 

Requirements
40

164. 37.1301(a) A swap execution facility shall maintain financial resources 

sufficient to enable it to perform its functions in compliance 

with the core principles set forth in section 5h of the Act.

 

165. 37.1301(b) An entity that operates as both a swap execution facility and a 

derivatives clearing organization shall also comply with the 

financial resource requirements of §39.11 of this chapter.

Not applicable. Tassat is not also a clearing organization. 

166. 37.1301(c) Financial resources shall be considered sufficient if their value is 

at least equal to a total amount that would enable the swap 

execution facility to cover its operating costs for a period of at 

least one year, calculated on a rolling basis.

 Tassat has maintained sufficient financial resources since the SEF 

registration was transferred to it in November 2019 

167. 37.1302 Types 

of financial 

resources

168. 37.1302 Financial resources available to satisfy the requirements of 

§37.1301 may include:

169. 37.1302(a) The swap execution facility's own capital, meaning its assets 

minus its liabilities calculated in accordance with U.S. generally 

accepted accounting principles; and

 See lines 161 and 162 above.

170. 37.1302(b) Any other financial resource deemed acceptable by the 

Commission.

Not applicable

171. 37.1303 

Computation of 

projected 

operating costs 

to meet 

financial 

resource 

requirement

172. 37.1303 A swap execution facility shall, each fiscal quarter, make a 

reasonable calculation of its projected operating costs over a 

 See lines 161 and 162 above.
41

twelve-month period in order to determine the amount needed 

to meet the requirements of §37.1301. The swap execution 

facility shall have reasonable discretion in determining the 

methodology used to compute such projected operating costs. 

The Commission may review the methodology and require 

changes as appropriate.

173. 37.1304 

Valuation of 

financial 

resources

174. 37.1304 No less than each fiscal quarter, a swap execution facility shall 

compute the current market value of each financial resource 

used to meet its obligations under §37.1301. Reductions in value 

to reflect market and credit risk (“haircuts”) shall be applied as 

appropriate.

See lines 161 and 162 above. 

175. 37.1305 

Liquidity of 

financial 

resources

176. 37.1305 The financial resources allocated by the swap execution facility 

to meet the requirements of §37.1301 shall include 

unencumbered, liquid financial assets (i.e., cash and/or highly 

liquid securities) equal to at least six months' operating costs. If 

any portion of such financial resources is not sufficiently liquid, 

the swap execution facility may take into account a committed 

line of credit or similar facility for the purpose of meeting this 

requirement.

See lines 161 and 162 above. 

References to line of credit are not applicable

177. 37.1306 

Reporting to the 

Commission

178. 37.1306(a) Each fiscal quarter, or at any time upon Commission request, a 

swap execution facility shall:
42

179. 37.1306(a)(1) Report to the Commission:

180. 37.1306(a)(1)(i) The amount of financial resources necessary to meet the 

requirements of §37.1301; and

See lines 161 and 162 above. 

181. 37.1306(a)(1)(ii) The value of each financial resource available, computed in 

accordance with the requirements of §37.1304;

See lines 161 and 162 above. 

182. 37.1306(a)(2) Provide the Commission with a financial statement, including 

the balance sheet, income statement, and statement of cash 

flows of the swap execution facility or of its parent company;

See lines 161 and 162 above. 

183. 37.1306(b) The calculations required by paragraph (a) of this section shall 

be made as of the last business day of the swap execution 

facility's fiscal quarter.

See lines 161 and 162 above. 

184. 37.1306(c) The swap execution facility shall provide the Commission with:

185. 37.1306(c)(1) Sufficient documentation explaining the methodology used to 

compute its financial requirements under §37.1301;

See lines 161 and 162 above. 

186. 37.1306(c)(2) Sufficient documentation explaining the basis for its 

determinations regarding the valuation and liquidity 

requirements set forth in §§37.1304 and 37.1305; and

See lines 161 and 162 above. 

187. 37.1306(c)(3) Copies of any agreements establishing or amending a credit 

facility, insurance coverage, or other arrangement evidencing or 

otherwise supporting the swap execution facility's conclusions.

See lines 161 and 162 above. 

188. 37.1306(d) The reports required by this section shall be filed not later than 

40 calendar days after the end of the swap execution facility's 

first three fiscal quarters, and not later than 60 calendar days 

after the end of the swap execution facility's fourth fiscal 

quarter, or at such later time as the Commission may permit, in 

its discretion, upon request by the swap execution facility.

See lines 161 and 162 above. 

189. 37.1400 Core 

Principle 14 –

The swap execution facility shall: Please refer to Exhibit V, Section 1 for a detailed discussion of Core 

Principle 14, System safeguards, as required by CFTC staff for this 
43

System 

safeguards

Reinstatement application and also for a Security Presentation, Disaster 

Recovery Policy, Vulnerability Management Procedures, and Third Party 

Tools Procedures.

Please note that Tassat will participate in the FIA Industry-wide DR Test 

to be held on October 24, 2020.

190. 37.1400(a) Establish and maintain a program of risk analysis and oversight 

to identify and minimize sources of operational risk, through the 

development of appropriate controls and procedures, and 

automated systems, that:

191. 37.1400(a)(1) Are reliable and secure; and

192. 37.1400(a)(2) Have adequate scalable capacity;

193. 37.1400(b) Establish and maintain emergency procedures, backup facilities, 

and a plan for disaster recovery that allow for:

194. 37.1400(b)(1) The timely recovery and resumption of operations; and

195. 37.1400(b)(2) The fulfillment of the responsibilities and obligations of the 

swap execution facility; and

196. 37.1400(c) Periodically conduct tests to verify that the backup resources of

the swap execution facility are sufficient to ensure continued:

197. 37.1400(c)(1) Order processing and trade matching;

198. 37.1400(c)(2) Price reporting;

199. 37.1400(c)(3) Market surveillance; and

200. 37.1400(c)(4) Maintenance of a comprehensive and accurate audit trail.

201. 37.1401 

Requirements

202. 37.1401(a) A swap execution facility's program of risk analysis and oversight 

with respect to its operations and automated systems shall 

address each of the following categories of risk analysis and 

oversight:
44

203. 37.1401(a)(1) Information security;

204. 37.1401(a)(2) Business continuity-disaster recovery planning and resources;

205. 37.1401(a)(3) Capacity and performance planning;

206. 37.1401(a)(4) Systems operations;

207. 37.1401(a)(5) Systems development and quality assurance; and

208. 37.1401(a)(6) Physical security and environmental controls.

209. 37.1401(b) A swap execution facility shall maintain a business continuitydisaster recovery plan and resources, emergency procedures, 

and backup facilities sufficient to enable timely recovery and 

resumption of its operations and resumption of its ongoing 

fulfillment of its responsibilities and obligations as a swap 

execution facility following any disruption of its operations. Such 

responsibilities and obligations include, without limitation, order 

processing and trade matching; transmission of matched orders 

to a designated clearing organization for clearing, where 

appropriate; price reporting; market surveillance; and 

maintenance of a comprehensive audit trail. The swap execution 

facility's business continuity-disaster recovery plan and 

resources generally should enable resumption of trading and 

clearing of swaps executed on the swap execution facility during 

the next business day following the disruption. Swap execution 

facilities determined by the Commission to be critical financial 

markets pursuant to Appendix E to part 40 of this chapter are 

subject to more stringent requirements in this regard, set forth 

in §40.9 of this chapter.

210. 37.1401(c) A swap execution facility that is not determined by the 

Commission to be a critical financial market satisfies the 

requirement to be able to resume its operations and resume its 

ongoing fulfillment of its responsibilities and obligations during 

the next business day following any disruption of its operations 

by maintaining either:
45

211. 37.1401(c)(1) Infrastructure and personnel resources of its own that are 

sufficient to ensure timely recovery and resumption of its 

operations and resumption of its ongoing fulfillment of its 

responsibilities and obligations as a swap execution facility 

following any disruption of its operations; or

212. 37.1401(c)(2) Contractual arrangements with other swap execution facilities 

or disaster recovery service providers, as appropriate, that are 

sufficient to ensure continued trading and clearing of swaps 

executed on the swap execution facility, and ongoing fulfillment 

of all of the swap execution facility's responsibilities and 

obligations with respect to such swaps, in the event that a 

disruption renders the swap execution facility temporarily or 

permanently unable to satisfy this requirement on its own 

behalf.

213. 37.1401(d) A swap execution facility shall notify Commission staff promptly 

of all:

214. 37.1401(d)(1) Electronic trading halts and material system malfunctions;

215. 37.1401(d)(2) Cyber security incidents or targeted threats that actually or 

potentially jeopardize automated system operation, reliability, 

security, or capacity; and

216. 37.1401(d)(3) Activations of the swap execution facility's business continuitydisaster recovery plan.
46

217. 37.1401(e) A swap execution facility shall provide Commission staff timely 

advance notice of all material:

218. 37.1401(e)(1) Planned changes to automated systems that may impact the 

reliability, security, or adequate scalable capacity of such 

systems; and

219. 37.1401(e)(2) Planned changes to the swap execution facility's program of risk 

analysis and oversight

220. 37.1401(f) A swap execution facility shall provide to the Commission, upon 

request, current copies of its business continuity-disaster 

recovery plan and other emergency procedures, its assessments 

of its operational risks, and other documents requested by 

Commission staff for the purpose of maintaining a current 

profile of the swap execution facility's automated systems.

221. 37.1401(g) A swap execution facility shall conduct regular, periodic, 

objective testing and review of its automated systems to ensure 

that they are reliable, secure, and have adequate scalable 

capacity. A swap execution facility shall also conduct regular, 

periodic testing and review of its business continuity-disaster 

recovery capabilities. Pursuant to Core Principle 10 under 

section 5h of the Act (Recordkeeping and Reporting) and 

§§37.1000 through 37.1001, the swap execution facility shall 

keep records of all such tests, and make all test results available 

to the Commission upon request.

222. 37.1500 Core 

Principle 15 –

Designation of 

chief 

compliance 

officer

223. 37.1500(a) In general. Each swap execution facility shall designate an 

individual to serve as a chief compliance officer.

● Rule 203 (Officers)

On September 15, 2020, Tassat management retained Ms. Ann M. 
47

Cresce as a consulting CCO; she was hired as Tassat CCO effective 

October 1, 2020. 

 

224. 37.1500(b) Duties. The chief compliance officer shall:

225. 37.1500(b)(1) Report directly to the board or to the senior officer of the 

facility;

● Rule 209(b) (Chief Compliance Officer)

Ms. Cresce will initially report to Tassat’s CEO, Mr. Ron Totaro

226. 37.1500(b)(2) Review compliance with the core principles in this subsection; ● Rule 209(d)(i) (Chief Compliance Officer)

Please refer generally to references to SEF Core Principle 15 

227. 37.1500(b)(3) In consultation with the board of the facility, a body performing 

a function similar to that of a board, or the senior officer of the 

facility, resolve any conflicts of interest that may arise;

● Rule 209(d)(ii) (Chief Compliance Officer)

No conflicts of interest have arisen to date. 

228. 37.1500(b)(4) Be responsible for establishing and administering the policies 

and procedures required to be established pursuant to this 

section;

● Rule 209(d)(iii) (Chief Compliance Officer)

229. 37.1500(b)(5) Ensure compliance with the Act and the rules and regulations 

issued under the Act, including rules prescribed by the 

Commission pursuant to section 5h of the Act; and

● Rule 209(d)(iv) (Chief Compliance Officer)

Please refer generally to this Core Principle Chart

230. 37.1500(b)(6) Establish procedures for the remediation of noncompliance 

issues found during compliance office reviews, look backs, 

internal or external audit findings, self-reported errors, or 

through validated complaints.

● Rule 209(d)(v) (Chief Compliance Officer)

231. 37.1500(c) Requirements for procedures. In establishing procedures under 

paragraph (b)(6) of this section, the chief compliance officer 

shall design the procedures to establish the handling, 

● Rule 209(d)(vi) (Chief Compliance Officer)
48

management response, remediation, retesting, and closing of 

noncompliance issues.

232. 37.1500(d)(1) Annual reports—(1) In general. In accordance with rules 

prescribed by the Commission, the chief compliance officer shall 

annually prepare and sign a report that contains a description 

of:

233. 37.1500(d)(1)(i) The compliance of the swap execution facility with the Act; and ● Rule 209(d)(i) (Chief Compliance Officer)

Please refer generally to this Core Principles Chart

234. 37.1500(d)(1)(ii) The policies and procedures, including the code of ethics and 

conflict of interest policies, of the swap execution facility.

● Rule 209(d)(x)(A) (Chief Compliance Officer)

● Rule 215 (Conflicts of Interest)

● Rule 216(d)( Tassat employees must execute an acknowledgement 

of the Tassat conflict of interest policy)

235. 37.1500(d)(2) Requirements. The chief compliance officer shall:

236. 37.1500(d)(2)(i) Submit each report described in paragraph (d)(1) of this section 

with the appropriate financial report of the swap execution 

facility that is required to be submitted to the Commission 

pursuant to section 5h of the Act; and

● Rule 209(d)(xii) (Chief Compliance Officer)

Please refer to the Exchange’s financial report dated June 30, 2020 

submitted to the Commission on August 3, 2020. 

237. 37.1500(d)(2)(ii) Include in the report a certification that, under penalty of law, 

the report is accurate and complete.

● Rule 209(d)(x)(F) (Chief Compliance Officer)

Please refer to the Certification submitted as part of this ACR (Page 5).

238. 37.1501 Chief 

compliance 

officer

239. 37.1501(b)(1) Designation and qualifications of chief compliance officer—(1) 

Chief compliance officer required. Each swap execution facility 

shall establish the position of chief compliance officer and 

designate an individual to serve in that capacity.

● Rule 209(a) (Chief Compliance Officer)
49

240. 37.1501(b)(1)(i) The position of chief compliance officer shall carry with it the 

authority and resources to develop and enforce policies and 

procedures necessary to fulfill the duties set forth for chief 

compliance officers in the Act and Commission regulations.

● Rule 209(c) (Chief Compliance Officer)

241. 37.1501(b)(1)(ii) The chief compliance officer shall have supervisory authority 

over all staff acting at the direction of the chief compliance 

officer.

● Rule 209(c) (Chief Compliance Officer)

242. 37.1501(b)(2) Qualifications of chief compliance officer. The individual 

designated to serve as chief compliance officer shall have the 

background and skills appropriate for fulfilling the 

responsibilities of the position. No individual disqualified from 

registration pursuant to sections 8a(2) or 8a(3) of the Act may 

serve as a chief compliance officer.

● Rule 209(a) (Chief Compliance Officer)

Ms. Cresce’s bio was submitted in Exhibit B (Directors and Officers) as 

part of this Reinstatement Application 

243. 37.1501(c)(1) Appointment, supervision, and removal of chief compliance 

office—(1) Appointment and compensation of chief compliance 

officer.

244. 37.1501(c)(1)(i) A swap execution facility's chief compliance officer shall be 

appointed by its board of directors or senior officer. A swap 

execution facility shall notify the Commission within two 

business days of appointing any new chief compliance officer, 

whether interim or permanent.

● Rule 203(a) and 203(b) (Officers)

CFTC staff was notified of Ms. Cresce’s appointment in a September 17, 

2020 conference call

245. 37.1501(c)(1)(ii) The board of directors or the senior officer shall approve the 

compensation of the chief compliance officer.

● Rule 208(d)(ii)(B) (Regulatory Oversight Committee)

On an annual basis, the ROC reviews the compensation of all compliance 

personnel with the Tassat CEO 

246. 37.1501(c)(1)(iii) The chief compliance officer shall meet with the board of 

directors at least annually and the regulatory oversight 

committee at least quarterly.

● Rule 209(b) (Chief Compliance Officer)

The CCO will meet annually with the Board regarding the ACR. 

The CCO will meet with the ROC at least quarterly. 
50

247. 37.1501(c)(1)(iv) The chief compliance officer shall provide any information

regarding the swap execution facility's self-regulatory program 

that is requested by the board of directors or the regulatory 

oversight committee.

● Rule 209(b) (Chief Compliance Officer) 

The CCO will meet with the ROC at least quarterly. It has been and will 

continue to be standard procedure for the CCO to prepare the topics for 

each agenda. In addition, the CCO also provides input as necessary to 

the COO for the Board prior to each Board meeting. 

248. 37.1501(c)(2) Supervision of chief compliance officer. A swap execution 

facility's chief compliance officer shall report directly to the 

board of directors or to the senior officer of the swap execution 

facility, at the swap execution facility's discretion.

● Rule 209(b) (Chief Compliance Officer)

249. 37.1501(c)(3)(i) Removal of chief compliance officer. (i) Removal of a swap 

execution facility's chief compliance officer shall require the 

approval of a majority of the swap execution facility's board of 

directors. If the swap execution facility does not have a board of 

directors, then the chief compliance officer may be removed by 

the senior officer of the swap execution facility.

● Rule 202(b) (Board)

● Rule 203(a) (Officers)

 No such action has been taken.

250. 37.1501(c)(3)(ii) The swap execution facility shall notify the Commission of such 

removal within two business days.

● Rule 203(b) (Officers)

 No such action has been taken.

251. 37.1501(d) Duties of chief compliance officer. The chief compliance officer's 

duties shall include, but are not limited to, the following:

252. 37.1501(d)(1) Overseeing and reviewing the swap execution facility's 

compliance with section 5h of the Act and any related rules 

adopted by the Commission;

● Rule 209(d)(i) (Chief Compliance Officer)

Please refer generally to this Core Principles Chart

253. 37.1501(d)(2) In consultation with the board of directors, a body performing a 

function similar to the board of directors, or the senior officer of 

the swap execution facility, resolving any conflicts of interest 

that may arise, including:

254. 37.1501(d)(2)(i) Conflicts between business considerations and compliance 

requirements;

● Rule 209(d)(ii) (Chief Compliance Officer)

● Rule 210(e) (Chief Regulatory Officer)

● Rule 215 (Conflicts of Interest)
51

● Rule 605(b)(iii) (Review of Investigative Reports)

No such conflicts have been noted to date.

255. 37.1501(d)(2)(ii) Conflicts between business considerations and the requirement 

that the swap execution facility provide fair, open, and impartial 

access as set forth in §37.202; and;

● Rule 207 (Exchange Access Committee) 

● Rule209(d)(ii)(B) (Chief Compliance Officer)

● Rule 215 (Conflicts of Interest)

No such conflicts have been noted to date.

256. 37.1501(d)(2)(iii) Conflicts between a swap execution facility's management and 

members of the board of directors;

● Rule 209(d)(ii)(C) (Chief Compliance Officer)

● Rule 215 (Conflicts of Interest)

No such conflicts have been noted to date.

257. 37.1501(d)(3) Establishing and administering written policies and procedures 

reasonably designed to prevent violations of the Act and the 

rules of the Commission;

● Rule 209(d)(iii) (Chief Compliance Officer)

Please refer to Section I of Tassat’s 2019 ACR for a description of the 

Exchange’s policies and procedures.

258. 37.1501(d)(4) Taking reasonable steps to ensure compliance with the Act and 

the rules of the Commission;

● Rule 209(d)(iv) (Chief Compliance Officer)

● Tassat Market Supervision Manual

259. 37.1501(d)(5) Establishing procedures for the remediation of noncompliance 

issues identified by the chief compliance officer through a 

compliance office review, look-back, internal or external audit 

finding, self-reported error, or validated complaint;

● Rule 209(d)(v) (Chief Compliance Officer)

● Tassat Market Supervision Manual

260. 37.1501(d)(6) Establishing and following appropriate procedures for the 

handling, management response, remediation, retesting, and 

closing of noncompliance issues;

● Rule 209(d)(vi) (Chief Compliance Officer)

● Tassat Market Supervision Manual
52

261. 37.1501(d)(7) Establishing and administering a compliance manual designed to 

promote compliance with the applicable laws, rules, and 

regulations and a written code of ethics designed to prevent 

ethical violations and to promote honesty and ethical conduct;

● Rule 209(d)(vii) (Chief Compliance Officer)

● Tassat Market Supervision Manual

Please refer to Section I of Tassat’s 2019 ACR for a discussion of policies 

and procedures.

262. 37.1501(d)(8) Supervising the swap execution facility's self-regulatory program 

with respect to trade practice surveillance; market surveillance; 

real-time market monitoring; compliance with audit trail 

requirements; enforcement and disciplinary proceedings; audits, 

examinations, and other regulatory responsibilities with respect 

to members and market participants (including ensuring 

compliance with, if applicable, financial integrity, financial 

reporting, sales practice, recordkeeping, and other 

requirements); and

● Rule 209(d)(viii) (Chief Compliance Officer)

● Rule 404 (Minimum Financial and Related Reporting Requirements)

● Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform)

Please refer to Section I of Tassat’s 2019 ACR for a description of the 

Exchange’s policies and procedures.

263. 37.1501(d)(9) Supervising the effectiveness and sufficiency of any regulatory 

services provided to the swap execution facility by a regulatory 

service provider in accordance with §37.204.

● Rule 209(d)(ix) (Chief Compliance Officer)

Please refer to Section I of Tassat’s 2019 ACR for a description of the 

Exchange’s policies and procedures.

264. 37.1501(e) Preparation of annual compliance report. The chief compliance 

officer shall, not less than annually, prepare and sign an annual 

compliance report that, at a minimum, contains the following 

information covering the time period since the date on which 

the swap execution facility became registered with the 

Commission or since the end of the period covered by a 

previously filed annual compliance report, as applicable:

● Rule 209(d)(x) (Chief Compliance Officer)

265. 37.1501(e)(1) A description of the swap execution facility's written policies and 

procedures, including the code of ethics and conflict of interest 

policies;

● Rule 209(d)(x)(A) (Chief Compliance Officer)

Please refer to Section I of Tassat’s 2019 ACR for a description of the 

Exchange’s policies and procedures.
53

266. 37.1501(e)(2) A review of applicable Commission regulations and each 

subsection and core principle of section 5h of the Act, that, with 

respect to each:

● Rule 209(d)(x)(B) (Chief Compliance Officer)

Please refer generally to this Core Principle Chart.

267. 37.1501(e)(2)(i) Identifies the policies and procedures that are designed to 

ensure compliance with each subsection and core principle, 

including each duty specified in section 5h(f)(15)(B) of the Act;

● Rule 209(d)(x)(B)(1) (Chief Compliance Officer)

Please refer to Section I of Tassat’s 2019 ACR for a description of the 

Exchange’s policies and procedures

268. 37.1501(e)(2)(ii) Provides a self-assessment as to the effectiveness of these 

policies and procedures; and

● Rule 209(d)(x)(B)(2) (Chief Compliance Officer)

Please refer generally to this Core Principles Chart

269. 37.1501(e)(2)(iii) Discusses areas for improvement and recommends potential or 

prospective changes or improvements to its compliance 

program and resources;

● Rule 209(d)(x)(B)(3) (Chief Compliance Officer)

Please refer generally to this Core Principle Chart

270. 37.1501(e)(3) A list of any material changes to compliance policies and 

procedures since the last annual compliance report;

● Rule 209(d)(x)(C) (Chief Compliance Officer)

Please note that as part of this Reinstatement Application, Tassat has 

submitted all requested material documents that have been updated or 

revised since the SEF transfer approval on November 6, 2019.

271. 37.1501(e)(4) A description of the financial, managerial, and operational 

resources set aside for compliance with respect to the Act and 

Commission regulations, including a description of the swap 

execution facility's self-regulatory program's staffing and 

structure, a catalogue of investigations and disciplinary actions 

taken since the last annual compliance report, and a review of 

the performance of disciplinary committees and panels;

● Rule 209(d)(x)(D) (Chief Compliance Officer)

Please refer to documents submitted as part of this Reinstatement 

Application.

272. 37.1501(e)(5) A description of any material compliance matters, including 

noncompliance issues identified through a compliance office 

review, look-back, internal or external audit finding, selfreported error, or validated complaint, and an explanation of 

how they were resolved; and

● Rule 209(d)(x)(E) (Chief Compliance Officer)

273. 37.1501(e)(6) A certification by the chief compliance officer that, to the best of ● Rule 209(d)(x)(F) (Chief Compliance Officer)
54

his or her knowledge and reasonable belief, and under penalty 

of law, the annual compliance report is accurate and complete. Please refer to the submitted Certification 

274. 37.1501(f)(1) Submission of annual compliance report. (1) Prior to submission 

to the Commission, the chief compliance officer shall provide 

the annual compliance report to the board of directors of the 

swap execution facility for its review. If the swap execution 

facility does not have a board of directors, then the annual 

compliance report shall be provided to the senior officer for his 

or her review. Members of the board of directors and the senior 

officer shall not require the chief compliance officer to make any 

changes to the report. Submission of the report to the board of 

directors or the senior officer, and any subsequent discussion of 

the report, shall be recorded in board minutes or a similar 

written record, as evidence of compliance with this 

requirement.

● Rule 209(d)(xi) (Chief Compliance Officer)

The CCO will meet annually with the Board regarding the ACR. The CCO 

met with the Board on March 25, 2020 to review the 2019 ACR and 

compliance issues, as reflected in the minutes of that meeting. 

275. 37.1501(f)(2) The annual compliance report shall be submitted electronically 

to the Commission not later than 60 calendar days after the end 

of the swap execution facility's fiscal year, concurrently with the 

filing of the fourth fiscal quarter financial report pursuant to 

§37.1306.

● Rule 209(d)(xii) (Chief Compliance Officer)

 

276. 37.1501(f)(3) Promptly upon discovery of any material error or omission made 

in a previously filed annual compliance report, the chief 

compliance officer shall file an amendment with the Commission 

to correct the material error or omission. An amendment shall 

contain the certification required under paragraph (e)(6) of this 

section.

● Rule 209(d)(xiii) (Chief Compliance Officer)

If necessary, Tassat will file an amendment to any of its previously filed 

annual compliance reports. 

277. 37.1501(f)(4) A swap execution facility may request from the Commission an 

extension of time to file its annual compliance report based on 

substantial, undue hardship. Extensions of the filing deadline 

may be granted at the discretion of the Commission.

● Rule 209(d)(xii) (Chief Compliance Officer)

 

278. 37.1501(g)(1) Recordkeeping. (1) The swap execution facility shall maintain:

279. 37.1501(g)(1)(i) A copy of the written policies and procedures, including the ● Rule 209(d)(vii) (Chief Compliance Officer)
55

code of ethics and conflicts of interest policies adopted in 

furtherance of compliance with the Act and Commission 

regulations;

● Rule 209(d)(x)(A) (Chief Compliance Officer)

Please refer to Section I of Tassat’s ACR for a description of the 

Exchange’s policies and procedures.

280. 37.1501(g)(1)(ii) Copies of all materials created in furtherance of the chief 

compliance officer's duties listed in paragraphs (d)(8) and (d)(9) 

of this section, including records of any investigations or 

disciplinary actions taken by the swap execution facility;

● Rule 209(d)(viii) (Chief Compliance Officer)

● Rule 209(d)(ix) (Chief Compliance Officer)

● Rule 209(d)(x)(D) (Chief Compliance Officer)

● Rule 404 (Minimum Financial and Related Reporting Requirements)

● Rule 522 (Recordkeeping Requirements for Entering Orders into the 

Platform)

 Tassat maintains all documentation required by this regulation and 

Tassat rules. 

281.e

c

37.1501(g)(1)(iii) Copies of all materials, including written reports provided to the 

board of directors or senior officer in connection with the 

review of the annual compliance report under paragraph (f)(1) 

of this section and the board minutes or a similar written record 

that documents the review of the annual compliance report by 

the board of directors or senior officer; and

● Rule 209(d)(xi) (Chief Compliance Officer)

The CCO meets annually with the Board regarding the ACR. The CCO 

met with the Board on March 25, 2020 to review the 2019 ACR and 

compliance issues, as reflected in the minutes of that meeting. 

282. 37.1501(g)(1)(iv) Any records relevant to the swap execution facility's annual 

compliance report, including, but not limited to, work papers 

and other documents that form the basis of the report, and 

memoranda, correspondence, other documents, and records 

that are

● Rule 209(d)(x) (Chief Compliance Officer)

● Rule 217 (Maintenance of Books and Records by the Exchange)

 Tassat maintains all documentation required by this regulation and 

Tassat rules.

283. 37.1501(g)(1)(iv)

(A)

Created, sent, or received in connection with the annual 

compliance report and

● Rule 209(d)(x) (Chief Compliance Officer)

● Rule 217 (Maintenance of Books and Records by the Exchange)

 Tassat maintains all documentation required by this regulation and 

Tassat rules.

284. 37.1501(g)(1)(iv)

(B)

Contain conclusions, opinions, analyses, or financial data related 

to the annual compliance report.

● Rule 209(d)(x) (Chief Compliance Officer)

● Rule 217 (Maintenance of Books and Records by the Exchange)
56

 Tassat maintains all documentation required by this regulation and 

Tassat rules.

285. 37.1501(g)(2) The swap execution facility shall maintain records in accordance 

with §1.31 and part 45 of this chapter.

● Rule 209(d)(x) (Chief Compliance Officer)

● Rule 217 (Maintenance of Books and Records by the Exchange)

 Tassat maintains all documentation required by this regulation and 

Tassat rules.