assessed will be equitable and non-discriminatory.

Rule was amended to address requirements regarding
reporting swap transaction and pricing data to the SDR
and reporting the notional or principal amount of any
Block Trade to the SEF.

Numbering was corrected and certain provisions
concerning Part 45 of the Commission’s regulations
were moved to Rule 402.

Rule was revised to include requirements regarding
Participant’s duty to notify FTSEF of the election to
have a trade reported as a block trade, and the SEF’s
duty to notify the SDR of same.

Rule was amended to reflect FTSEF’s reliance on the
no-action relief granted pursuant to CFTC Letter 15-24
regarding clerical errors.

Rule was re-formatted and the order in which
provisions were listed was amended to improve ease of
readability.

CFTC Regulation
§43.3(b)(3)(D)

CFTC Regulation §
43.4(d)(2)

CFTC Regulation §
43.4(f)(2)(ii)

Conforming change

CFTC Regulation §

43.6(g)(1)@)
CFTC Regulation

43.6(g)(1)(ii)

15-24 (“DCO Clerical Error
NAL”)

Conforming change

402 Rule was amended to include the requirement that the | CFTC Regulation §
SEF use obtained information to identify the 45.8(h)(1)
counterparty that is the reporting counterparty pursuant
to the CEA and regulation 45.8, whenever possible.
Rule was also amended to specifically require the SEF | CFTC Regulation § 45.3
to report all swap creation data to a single SDR and to_| CFTC Regulation § 45.5
transmit to both counterparties the identity of the SDR
and the USI for the swap created.
Rule now specifically addresses the error and omission | CFTC Regulation §
reporting requirements of regulation 45.14(a). 45.14(a)
References to Part 43 requirements were removed. Conforming change
403 Rule was amended to include the requirement that the | Core Principle 10
SEF keep full, complete, and systemic records with CFTC Regulation § 45.2(a)

respect to swaps throughout the life of the swap and
for a period of at least five years following the final
termination of the swap.

Rule now describes FTSEF’s compliance with

CFTC Regulation §



within thirty days thereafter, provide written notice of
such action to the person against whom the action was
taken.

Chapter
13

Chapter 13 was added to outline FTSEF’s NDF
contract specifications

CFTC Regulation § 40.2



more specificity to Rule 703.

The definition of “Rule” was included to mean “SEF
Rules.”

The definition of “Legal Entity Identifier” was
amended to specifically reference CFTC Regulation §
45.6.

“SEF Market Data” was included as a reference to
Rule 1201.

Conforming change

CFTC Regulation § 45.6

Conforming change

202 Rule describing board governance was amended to CFTC Regulation § 1.64(b)
include requirements for board election and
membership.
205 Rule describing CCO duties was modified to include a_| Core Principle 2
process for resolving CCO conflicts of interest without | Core Principle 5
the involvement of the CCO. Core Principle 15
Rule was amended to explicitly apply to Clients, Conforming change
Customers and Clearing Members.
212 Rule 212 regarding financial resources was added to Core Principle 13
include requirements for calculating the SEF’s CFTC Regulation § 37.1303
projected operating costs and issuing letters of credit.
301 Rule describing eligibility criteria for participants was_ | Core Principle 2
modified to include requirement that applicant not be | CFTC Regulation § 37.202
subject to any economic or trade sanctions programs.
317 Rule regarding external employees was added to Core Principle 2
outline the duties and obligations of seconded
employees and FTSEF’s policies for recognizing and
resolving conflicts of interest involving external
employees.
401 Rule regarding public reporting was amended to Core Principle 10

address timestamping and recordkeeping requirements
for timestamps.

Rule was amended to include specificity regarding
reporting all required swap creation data for each swap
executed as soon as technologically practicable.
FTSEF included assurances that any fees or charges

CFTC Regulation §
43.3(h)(1)
CFTC Regulation §
43.3(h)(4)

CFTC Regulation § 45.3(a)
Core Principle 9

17 CER Part 43,

Appendix A

Core Principle 2



37.1501(g)(1) and (2), including each relevant
subsection and references “45.2 or any other section of
the CEA.”

Rule was amended to specifically require the SEF to
keep records readily accessible via real time electronic
access throughout the life of the swap and for two
years following the final termination of the swap and
to make such records available for inspection upon
request.

37.1501(g)(1)-(2)
CFTC Regulation §
45.2(e)(1)

Core Principle 5
CFTC Regulation § 45.2(h)

404 Rule was amended to reflect FTSEF’s reliance on the | Core Principle 4
no-action relief granted pursuant to CFTC Letter 16-25 | 16-25 (“Trade Confirmation
regarding trade confirmations. NAL”)

405 | References to indications of interest were removed. Conforming change
Rule was amended to reflect FTSEF’s reliance on the | 15-68 (“Post-Trade
no-action relief granted pursuant to CFTC Letter 15-68 | Allocation NAL”)
regarding post-trade allocations.

FTSEF included the names of the systems that the SEF | CFTC Regulation §

uses for its electronic transaction history database and | 37.205(b)(2)-(b)(3)
electronic analysis capability.

In order to elaborate on FTSEF’s data retention | Core Principle 2

policies, “original source documents” was defined and | Core Principle 10
reference was made to Core Principle 10 and CFTC | CpTC Regulation Part 37
Regulation Part 37, Subpart K pursuant to Regulation

§ 37.205(b)(4).

408 Rule was amended to include assurance that CFTC Regulation § 37.900
information can be accessed through FTSEF’s website
without the need to register, log in, prove a user name
or obtain a password.

409 Information from Rule 401 was added to new Rule 409 | Core Principle 10
to provide clearer and more specific instructions Part 45, Appendix 1
regarding errors and omissions.

503 Rule regarding inspections by the SEF was amended to | Core Principle 2
explicitly apply to Clients, Customers and Clearing Core Principle 5
Members. Conforming change

602 Reference was added to appendices B, D, E, and F to CFTC Regulation § 43.6,

Part 43 after “CFTC Regulation § 43.6.”

Rule was amended to make it clear that FTSEF will

Appendices B, D, E and F

15-60 (“Block Trade NAL”)



WW ex
EXTRADE
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Trade your best
April 1, 2016

VIA ELECTRONIC PORTAL

Office of the Secretary

Commodity Futures Trading Commission
Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

Re: CFTC Regulation 40.6(a) Certification. Amendments to FTSEF LLC Rulebook
Rules 101 (Definitions), 202 (Board), 205 (Chief Compliance Officer Qualifications
and Duties), 212 (Financial Resources), 301 (Eligibility Criteria for Becoming a
Participant), 317 (External Employees), 401 (Real-Time Public Reporting), 402
(Regulatory Reporting), 403 (Maintenance of Books and Records by the SEF), 404
(Trade Confirmations), 405 (Audit Trail Program), 408 (Timely Publication of
Trading Information), 409 (Errors and Omissions), (503 (Inspections by the SEF),
602 (Block Trades), 703 (Request for Quote Trading System (“RFQ Trading
System”), 924 (Pre-Execution Credit Checks), 1001 (General), 1003 (Disciplinary
Panels), 1011 (Sanctions), 1012 (No Right to Appeal), 1013 (Summary Fines for
Violations of the SEF Rules Regarding Timely Submission of Records), 1016 (Notice
to the Respondent, the Regulatory Services Provider and the Public), and Chapter
13 (Contract Specifications)

Dear Ladies and Gentlemen:

FTSEF LLC (“FTSEF”), pursuant to Commodity Futures Trading Commission (“CFTC” or
“Commission”) Regulation 40.6(a), hereby notifies the CFTC that it is self-certifying
amendments to the FTSEF Rulebook. More specifically, FTSEF is implementing new FTSEF
Rules 212 (Financial Resources), 317 (External Employees), 409 (Errors and Omissions) and
Chapter 13 (Contract Specifications), and amending FTSEF Rules 101 (Definitions), 202
(Board), 205 (Chief Compliance Officer Qualifications and Duties), 301 (Eligibility Criteria for
Becoming a Participant), 401 (Real-Time Public Reporting), 402 (Regulatory Reporting), 403
(Maintenance of Books and Records by the SEF), 404 (Trade Confirmations), 405 (Audit Trail
Program), 408, (Timely Publication of Trading Information), 503 (Inspections by the SEF), 602
(Block Trades), 703 (Request for Quote Trading System (“RFQ Trading System”), 924 (Pre-
Execution Credit Checks), (1001 (General), 1003 (Disciplinary Panels), 1011 (Sanctions), 1012
(No Right to Appeal), 1013 (Summary Fines for Violations of the SEF Rules Regarding Timely
Submission of Records), and 1016 (Notice to the Respondent, the Regulatory Services Provider
and the Public).


only allow block trades that are executed on the SEF’s
RFQ system, pursuant to, and subject to the conditions
of, CFTC No-Action Letter 15-60, expiring November
15, 2016.

Rule was amended to reflect FTSEF’s reliance on the
no-action relief granted pursuant to CFTC Letter 15-60
regarding block trades.

Reference to “applicable minimum threshold” was
changed to “appropriate minimum block size, as
defined in Part 43 of the Commission’s regulations.”

15-60 (“Block Trade NAL”)

17 CFR Part 43

703 Rule regarding RFQ trading system was amended to Core Principle 2
include the requirement that counter requests on RFQs _| Core Principle 3
must go to a minimum of 3 unaffiliated counterparties. | CFTC Regulation § 37.9
924 | Rule regarding pre-execution credit checks was Core Principle 6
amended to specifically refer to FTSEF’s NDF Conforming change
contracts.
1001 | Rule was amended to explicitly apply to Clients, Conforming change
Customers and Clearing Members. Core Principle 2
1003 | Rule regarding disciplinary panels was amended to Core Principle 2
include specification regarding number and make-up
of members on hearing and review panels.
Rule was amended in order to comply with Regulation | CFTC Regulation §
§ 37.206(b), which states that disciplinary panels 37.206(b)
“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.”
1011 | Rule regarding sanctions was amended to explicitly Conforming change
apply to Clients, Customers and Clearing Members. Core Principle 2
1012 | Rule regarding no right to appeal was amended to CFTC Regulation Part 9
include caveat that participants are entitled to the
appeal process outlined in CFTC Regulation Part 9.
1013 | Rule regarding summary fines was amended to Core Principle 2
explicitly apply to Participants and outline finable
violations and maximum amount of fine.
1016 | Rule regarding notice was amended to provide that, CFTC Regulation § 9.11

upon rendering a final decision regarding a
disciplinary or access denial action, the SEF shall,



The proposed amendments are being made in order to make more explicit the requirements of
CFTC Regulations Part 43 (Real-Time Public Reporting) and 45 (Swap Data Recordkeeping and
Reporting Requirements), and also in connection with Requests for Information from CFTC
Staff in considering FTSEF’s application for full registration as a swap execution facility. The
proposed amendments will be effective on Monday, April 18, 2016.

Pursuant to Section 5(c) of the CEA and CFTC Regulation 40.6(a), FTSEF certifies that the
proposed amendments to the FTSEF Rulebook comply with the CEA and regulations thereunder.
FTSEF is not aware of any substantive opposing views to the proposed amendments.

FTSEF certifies that this submission has been concurrently posted on the FTSEF website at
www.ftsef.com.

If you have any questions concerning this submission, please contact me at 516-627-8993, ext
296 or Carl.Schranz@flextrade.com.

Sincerely,
fal SA
Carl Schranz
Attachments: Exhibit A —- Explanation of FTSEF Rule Changes

Exhibit B — Revisions to the FTSEF Rulebook, Rules 101, 202, 205, 212, 301,
317, 401, 402, 403, 404, 405, 408, 409, 503, 602, 703, 924, 1001, 1003, 1011,
1012, 1013, 1016, and Chapter 13 (blacklined)

Exhibit C — Clean version of FTSEF Rulebook


Exhibit A

Applicable Core Principle

Rule Explanation of Amendment(s) and Commission
Regulation
101 Definition section was amended to specifically state CFTC Regulation § 43.2

that all defined terms are consistent with terms as
defined in CFTC Regulation § 43.2.

The definition of Block Trade was amended to
accurately reflect block trades as offered by FTSEF,
and the reference to “Applicable Law” was changed to
reference Part 43 of the Commission’s regulations.

The definition of business day was amended to give
more specificity.

The definition of Confirmation Data was amended to
give more specificity.

The definition of Continuation Data was changed to
conform with the regulations.

The definition of Legal Entity Identifier referencing
“Part 45 of the CFTC Regulations” was changed to
“section 45.6 of the CFTC Regulations.”

The definition of “Proprietary Data” or “Personal
Information” was added.

The definitions of “Reporting Counterparty” and
“Reporting Party” were combined under the definition
“Reporting Entity.”

The definition of “Act” was included to mean the
Commodity Exchange Act.

The definition of “Central Limit Order Book” was
included in a reference to Rule 702.

The definitions of “External Employees,” “External
Entities” and Secondment Agreement were included to
provide more specificity to the rules.

The definition of “Request for Quote Trading System”
or “RFQ Trading System” was included to provide

Core Principle 2
Conforming change
17 CFR Part 43

CFTC Regulation § 45.1

CFTC Regulation § 45.1

CFTC Regulation § 45.1

CFTC Regulation § 45.6

Preamble, 17 CFR Part 37

Conforming change

Conforming change

Conforming change

Section 1a(28) of the CEA

Conforming change