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UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

 

In the Matter of the Application of 

SpectrAxe LLC for 

Registration as a Swap Execution Facility 

 

ORDER OF REGISTRATION 

SpectrAxe LLC (“SpectrAxe”), a Delaware limited liability company headquartered in 

New York, New York, has submitted to the Commodity Futures Trading Commission 

(“Commission”), pursuant to Section 5h of the Commodity Exchange Act (“Act”), 7 U.S.C. § 

7b-3, and Commission regulation 37.3(b), 17 C.F.R. § 37.3(b), an application for registration as a 

swap execution facility, which includes submissions dated February 4, 2021, through October 7, 

2022. 

WHEREAS SpectrAxe represents that it will offer a proprietary electronic trading 

platform for the electronic execution of foreign exchange options, and will not be permitting or 

facilitating voice execution on its swap execution facility. 

WHEREAS SpectrAxe will utilize a prime brokerage model for credit intermediation and 

settlement of transactions, and SpectrAxe will not be facilitating clearing of transactions and has 

not entered into a clearing agreement with a derivatives clearing organization. 
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WHEREAS SpectrAxe’s rules do not permit trade intermediation on its swap execution 

facility by futures commission merchants or introducing brokers. 

WHEREAS SpectrAxe represents that it will meet all the requirements for swap 

execution facility registration under Section 5h of the Act, 7 U.S.C. §7b-3, and remain subject to 

and compliant with all provisions of the Act and the Commission’s regulations applicable to 

swap execution facilities, including self-regulatory responsibilities applicable to swap execution 

facilities under the Act and the Commission’s regulations. 

WHEREAS Commission staff reviewed and analyzed SpectrAxe’s application for 

registration as a swap execution facility, including SpectrAxe’s rules and all amendments 

thereto and representations made by SpectrAxe, to evaluate SpectrAxe’s compliance with the 

core principles and corresponding regulations in accordance with Section 5h of the Act, 

7 U.S.C. §7b-3. 

Based upon the foregoing, the Commission FINDS that, as required by Section 5h of the 

Act, 7 U.S.C. §7b-3, and Commission regulation 37.3(b), 17 C.F.R. §37.3(b), SpectrAxe’s 

application, subject to the conditions set forth below, has demonstrated SpectrAxe’s compliance 

with the Act and the Commission’s regulations applicable to swap execution facilities. 

Therefore: 

IT IS HEREBY ORDERED that, pursuant to Section 5h of the Act, 7 U.S.C. §7b-3 and 

Commission regulation 37.3(b)(6)(i), 17 C.F.R. § 37.3(b)(6)(i), that the application of SpectrAxe 

for registration as a swap execution facility is approved. The approval of SpectrAxe’s application 

for registration as a swap execution facility is based on SpectrAxe’s representations to the 
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Commission in its application, as shown in the application record, and subject to the following 

terms and conditions specified herein: 

(1) SpectrAxe shall comply with all provisions of the Act and all requirements set forth in 

the Commission’s regulations, as may be amended or adopted from time to time, that are 

applicable to swap execution facilities. 

(2) When SpectrAxe issues a confirmation pursuant to Commission regulation 37.6(b), 

17 C.F.R. § 37.6(b), which incorporates by reference terms from previously-negotiated 

freestanding agreements between the counterparties, in lieu of obtaining such agreements 

prior to execution, as required under Commission regulation 37.6(b), 17 C.F.R. § 37.6(b), 

and maintaining a copy of such agreements, as required under Commission regulations 

37.1000, 37.1001 and 45.2(a), 17 C.F.R. § 37.6(b), 17 C.F.R. §§ 37.1000, 37.1001 and 

45.2(a), SpectrAxe shall comply with the following conditions: 

(i) SpectrAxe must have a rule in its rulebook requiring its confirmation to state, 

where applicable, that it incorporates by reference the terms of the underlying 

previously-negotiated freestanding agreements between the counterparties. 

(ii) SpectrAxe must have a rule in its rulebook stating that in the event of any 

inconsistency between a SpectrAxe confirmation and the underlying previouslynegotiated freestanding agreements, the terms of the SpectrAxe confirmation 

legally supersede any contradictory terms; SpectrAxe must also have a rule 

requiring SpectrAxe’s confirmations to state the same. 

(iii) SpectrAxe must have a rule in its rulebook requiring its participants to 
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provide copies of the underlying previously-negotiated freestanding agreements to 

SpectrAxe upon request. 

(iv) SpectrAxe must have a rule in its rulebook requiring SpectrAxe to request 

from participants the underlying previously-negotiated freestanding agreements 

upon request from the Commission, and requiring SpectrAxe to furnish such 

documents to the Commission as soon as they are available. 

This condition (2) shall expire on the later of the effective date or compliance date of any 

change to Commission regulations affecting the requirements stated above to obtain and 

maintain copies of previously-negotiated freestanding agreements between the 

counterparties that are incorporated by reference into confirmations issued pursuant to 

Commission regulation 37.6(b), 17 C.F.R. § 37.6(b). 

(3) In lieu of complying with the 2020 Amendments1 to Parts 43, 45, and 49 of the 

Commission’s regulations, SpectrAxe must comply with the Parts 43, 45, and 49 

regulations, 17 C.F.R. Parts 43, 45, and 49, that were in effect on January 1, 2021,2 except 

that SpectrAxe need not report certain confirmation data pursuant to Commission 

regulation 45.3(a), 17 C.F.R. § 45.3(a), when such confirmation data is: 

 

1

 Final Rule, Swap Data Recordkeeping and Reporting Requirements, 85 Fed. Reg. 75503 (Nov. 25, 2020); Final 

Rule, Real-Time Public Reporting Requirements, 85 Fed. Reg. 75422 (Nov. 25, 2020); and Final Rule, Certain 

Swap Data Repository and Data Reporting Regulations, 85 Fed. Reg. 75601 (Nov. 25, 2020) (together the 

“Amendments”). 

2 This treatment of SpectrAxe is consistent with that of currently-registered SEFs. See CFTC Letter No. 22-03, 

(Division of Data, January 31, 2022), available at https://www.cftc.gov/csl/22-03/download.