NEX SEF-2018-R-3

April 17, 2018

Submitted via CFTC Portal

Division of Market Oversight

U.S. Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581

Re: NEX SEF Limited – Regulation 40.6(a) Certification – Market Regulation Advisory Notice

Ladies and Gentlemen:

Pursuant to Section 5c(c) of the Commodity Exchange Act (the “Act”) and Section 40.6(a) of the 

regulations of the Commodity Futures Trading Commission (the “Commission”), NEX SEF Limited (“NEX 

SEF” or the “Facility”) hereby notifies the Commission that it has amended its Rulebook, specifically Rules 

205, 206, 302, 309, 406, 511, 513, 514, Chapter 8, Confidential Chapter 9 and the Definitions, and is selfcertifying the issuance of NEX SEF Market Regulation Advisory Notice 2018-001 (“MRAN 2018-001”).

A concise explanation and analysis of MRAN 2018-001 and the amendments to the Rulebook and their 

compliance with applicable provisions of the Act and the Commission’s regulations thereunder is attached 

hereto as Exhibit A. 

A clean copy of MRAN 2018-001 is attached hereto as Exhibit B. A clean copy of the amended Rulebook 

exclusive of confidential Chapter 9 is attached hereto as Exhibit C and a copy of the Rulebook exclusive 

of confidential Chapter 9 marked to show changes against the version most recently submitted to the 

Commission is attached hereto as Exhibit D. A clean copy of confidential Chapter 9 is attached hereto as 

Exhibit E, and a copy of the Confidential Chapter 9 marked to show changes against the version last 

submitted to the Commission is attached hereto as Exhibit F. A request for confidential treatment of 

Exhibit E and Exhibit F is being simultaneously submitted to the Commission and a copy of that request 

for confidential treatment is included with this submission. 

MRAN 2018-001 and the Rulebook amendments will become effective on May 1, 2018. NEX SEF 

certifies that MRAN 2018-001 and the Rulebook amendments comply with the requirements of the 

Commodity Exchange Act and the rules and regulations promulgated thereunder. NEX SEF has reviewed 

the swap execution facility core principles (“Core Principles”) as set forth in the Commodity Exchange Act 

and has determined that the issuance of MRAN 2018-001 and the Rulebook amendments impact the 

Core Principles identified in Exhibit A.

NEX SEF is not aware of any substantive opposing views expressed with respect to this filing and 

certifies that, concurrent with this filing, a copy of this submission was posted on the NEX SEF website 

and may be accessed at: http://www.nexsef.com. 
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Please contact the undersigned at (212) 704-5491 with any questions regarding this matter.

Very truly yours,

Elisa Hirschmann, Chief Compliance Officer

NEX SEF LIMITED

2 Broadgate

London EC2M 7UR

United Kingdom
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Exhibit A

Explanation and Analysis

Facility Rulebook

NEX SEF has amended its Rulebook as provided below. Capitalized terms used but not defined herein 

have the meanings assigned to them in the Rulebook.

Section/Rule Description of Revision

Reason and/or

Supporting Rule or Core

Principle

Cover Page Updated version number and effective date. Conforming change

Table of 

Contents

Updated page numbers. Conforming change

Various Conforming to British spelling in various places in

Rulebook.

Conforming change

Definitions The following definitions were revised or added in 

connection with new and updated Rules:

• API

• ATS Operator

• ATS Team

• Authorised Trader

• Automated Trading System

• Eurex

• Core Principle 2

Rule 205 Updated Rule 205 to conform to updated Part 9 of the 

Commission Regulations by updating provisions related 

to notices of denials of trading privileges or suspension or 

termination of access to the Facility.

• Core Principle 2

Rule 206 Updated Rule 206(c) to clarify that NEX SEF may revoke 

or suspend the access to the Facility of any Automated 

Trading System. Updated Rule 206(h) to clarify that NEX 

SEF’s conformance testing requirements include testing 

of Automated Trading Systems. 

• Core Principle 2

Rule 302 Updated Rule 302 to set forth requirements related to 

user identifications for Authorised Traders and Trading 

Privilege Holders accessing the Facility through an 

Automated Trading System. The updated Rule, among 

other things, differentiates between user identifications 

issued for natural persons manually accessing the 

Facility and for user identifications issued to the 

operators of Automated Trading Systems. 

• Core Principle 2

• Core Principle 4

• Core Principle 5

Rule 309 Replaced reference to NAL 15-58 with reference to NAL 

17-54.

• Core Principle 2

• NAL 17-54

Rule 406 Updated Rule 406 to include as Violations: (i) reckless 

conduct that adversely impacts the orderly conduct of 

trading or the fair execution of transactions is a Violation 

and (ii) cancelling or modify Bids/Offers in order to avoid 

execution. 

• Core Principle 2
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Section/Rule Description of Revision

Reason and/or

Supporting Rule or Core

Principle

Rule 511 Updated Rule 205 for clarity and to conform to updated 

Part 9 of the Commission Regulations by removing 

procedures for delivery of disciplinary decisions to NFA 

that are no longer applicable.

• Core Principle 2

Rule 513 Updated Rule 513 to clarify that the Board may act in the 

capacity of the Participation Committee.

• Core Principle 2

Rule 514 Updated Rule 514 for clarity. • Core Principle 2

Chapter 8 NEX SEF has entered into a clearing services agreement 

with Eurex Clearing AG (“Eurex”) under which Eurex will 

clear certain Contracts. The Contract specifications in 

Chapter 8 have been updated to indicate which Contracts 

are eligible for clearing at Eurex and to include, where 

applicable, a legend required by Eurex. NEX SEF will file 

the Eurex clearing services agreement (and related 

amended Form SEF exhibits) in a separate Form SEF 

amendment. 

• Core Principle 2

• Core Principle 7

Chapter 9 Updated Rule 901 to include reference to cancelations of 

Bids/Offers under Rule 310 and to update the rules 

governing Quote Fill Ratios and to introduce new 

Distributed Quote Interrupt protocol under Rule 901’s 

Maintenance of Orderly Markets provisions. 

• Core Principle 2

MRAN 2018-001

MRAN 2018-001 provides additional guidance on compliance with Chapter 4 of the Rulebook which, 

among other things, prohibits disruptive trading practices, by identifying examples of prohibited trading 

practices that will be deemed Violations of the Facility Rulebook. 

MRAN 2018-001 is consistent with Core Principle 2.

ACTIVE 230978297