BGC Derivative Markets, L.P

Rule Implementation Submission 2020-04 

December 14, 2020

1. The texts of the amended Rules are appended as Attachment A. Any additions are 

underlined and any deletions are struck through.

2. The date of intended implementation for these rules is ten business days following the 

filing of this submission.

3. Attached, please find a certification that: (1) these rules comply with the Commodity

Exchange Act (“Act”), and the Commission’s regulations thereunder; and (2)concurrent 

with this submission, BGCDMLP posted on its website: (i) a notice of pending 

certification of the rule amendments with the Commission; and (ii) a copy of this 

submission.

4. A concise explanation and analysis of the operation, purpose, and effect of each of the 

amended rules appears below.

5. There were no opposing views expressed regarding these amended rules.

6. Confidential treatment is not requested.

CONCISE EXPLANATION AND ANALYSIS OF THE OPERATION, PURPOSE, AND 

EFFECT OF THE RULE AMENDMENT AND ITS COMPLIANCE WITH APPLICABLE 

PROVISIONS OF THE ACT, INCLUDING CORE PRINCIPLES AND THE 

COMMISSION’S REGULATIONS THEREUNDER

Pursuant to Commission Rule 40.6(a)(7)(vi), the following is a concise explanation and analysis 

of the operation, purpose, and effect of the amended rules. The attached amendments are 

cumulative and in response to suggestions and guidance from the staff during the course of the 

staff review of the BGCDMLP application for registration as a Swap Execution Facility. These 

amendments are either:

(1) technical corrections to align the rules more closely with the language of Commission 

Rules; and/or

(2) amendments made in response to guidance of Commission staff.

The following chart identifies the changed rules and notes the effect of the change and an 

explanation of the operation, purpose, and effect of the change.
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CONCISE EXPLANATION AND ANALYSIS OF THE OPERATION, PURPOSE, AND 

EFFECT OF THE RULE AMENDMENT AND ITS COMPLIANCE WITH APPLICABLE 

PROVISIONS OF THE ACT

Rule Rule Title Effect

505 Pre-Execution Discussions and 

Cross Trades.

Add a cross-reference to Rule 603.

603(b)(i)(F) Orders Amend Rule 603 to add AON Cross 

order type.

603(b)(i)(G) Orders Amend Rule 603 to add Exchange Cross 

(X-Cross) order type.
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CERTIFICATIONS PURSUANT TO SECTION 5c OF THE COMMODITY EXCHANGE 

ACT, 7 U.S.C. §7A-2 AND COMMODITY FUTURES TRADING COMMISSION RULE 40.6, 

17 C.F.R. §40.6

I hereby certify that:

(1) the amended Rules above comply with the Commodity Exchange Act, and the 

Commodity Futures Trading Commission’s regulations thereunder; and

(2) concurrent with this submission, BGC Derivative Markets, L.P. posted on its website:

(a) a notice of pending certification of the above Rules with the Commission; and (b) 

a copy of this submission

By: Michael C. Sulfaro

Title: Chief Compliance Officer 

Date: December 11, 2020
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BGC Derivative Markets, L.P. Rules

PART 5. TRADING.

505. Pre-Execution Discussions and Cross Trades.

(a) No Person shall enter a pre-discussed Required Transaction through the Electronic 

Trading System or through Voice Functionality for illegal or improper purposes 

(including, without limitation, any conduct prohibited by Part 9 of these Rules) or for a 

Required Transaction knowingly assume on its own behalf or on behalf of a Customer 

Account the opposite side of its own Order or its Customer’s Order (a “Cross Trade”), 

except where the Person is entering into both sides of a Customer Order on a nondiscretionary, pre-arranged basis, unless:

(i) Prior written blanket or transaction specific consent has been obtained in 

respect of any relevant Customer Account;

(ii) The Person waits for at least 15 seconds (or such other time as the Facility 

may publish from time to time for particular contracts based upon liquidity or 

such other product-specific considerations as may be permitted under 

Commission Rule 37.9(b)(2)) after the initial Order is submitted to the 

Trading System or Execution Specialist before submitting the opposite side;

(iii) The trade was matched but unable to be executed on a system or venue and 

was sent to the SEF for execution in accordance with Rule 603, as 

applicable;

(iv) As applicable, the trade is recognized as a qualifying block trade size in 

accordance with Rule 510

PART 6. TRADING VIA ELECTRONIC ORDER BOOK.

603. Orders.

(F) AON Cross. Following the pre-execution communication, as permitted under Rule 505, a

Request for Cross (“RFC”) order will be entered into the Electronic Order Book where the

first party’s order is entered into the Electronic Order Book first. The second party’s order

may not be entered into the Electronic Order Book until a period of fifteen (15) seconds

has elapsed. The orders may be entered by either party to the transaction or by an agent

on behalf of the participants. The first party’s order will immediately match against any

orders in the Electronic Order Book on the opposite side of the market which are at a price

better than or equal to the price of the first order and will complete the order. The AON

Cross will not interact with prices in quantities less than the order size of the transaction.
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603. Orders.

(G) Exchange Cross (X- Cross). Following the pre-execution communication, as permitted

under Rule 505, a Request for Cross (“RFC”) order, which contains both the buy and the

sell orders, must be entered onto the Electronic Order Book, either by a party to the

transaction or by an agent on behalf of the participants. Upon entry of the RFC, the

Electronic Order Book will display an indication that a cross will occur in fifteen (15)

seconds. If the RFC price improves both the best bid and best offer (or if there is no

bid/offer) in the Electronic Order Book, after fifteen (15) seconds following the

submission of the RFC, all of the RFC quantity will match at the RFC price. If the RFC

price matches, or is outside the best bid or offer in the Electronic Order Book once the

fifteen (15) second period has expired following the submission of the RFC, the applicable

side of the RFC order will match against the orders in the Electronic Order Book at a price

better than or equal to the RFC price. Immediately thereafter, the quantity remaining from

the initial RFC order will match against the order on the opposite side of the RFC at the

RFC price. Any unmatched balance from the initial RFC order will remain in the

Electronic Order Book unless it is cancelled by the user.