BGC Derivative Markets, L.P

Rule Implementation Submission 2023-3

August 1, 2023

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

101 Definitions: Prime Broker and Prime 

Broker Trade

Added the definition to clarify the role of a

Prime Broker and what is considered a 

Prime Broker trade. 

518(a) Prime Broker Trades Added Rule that outlines what a Prime 

Broker trade is 

518(b) Participant Cancellation Requests Added Rule that outlines the process for 

Participants to cancel a trade when using 

a Prime Broker.

 518(c) Prime Broker Cancellation Added Rule that outlines the process for a 

Prime Broker to request to cancel a trade 

and their responsibility for notification to 

the Participant and facility. 

 518(d) Confirmation of Prime Broker 

Trades

Added Rule that outlines the 

responsibilities of the Participants and SEF 

in the trade confirmation process.
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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: August 1, 2023 
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 RULES

PART 1. MEANING OF TERMS.

101. Definitions.

“Pre-execution Communication” means on or more communications between

market participants for the purpose of discerning interest in the execution of a 

transaction prior to exposure of such market participants’ Orders (i.e., price, size

and other terms) to the Facility. 

‘Prime Broker Trade’ shall mean any trade where at least one party to the trade is a Prime 

Broker and the other is a participant with which the Prime Broker has a Non-Cleared Swap 

Agreement. A Prime Broker Trade can only occur on a Permitted Transaction. 

‘Prime Broker’ shall mean an Entity that acts as credit counterparty by extending credit to 

Participant(s) of the SEF to facilitate transactions occurring on or being introduced to the 

SEF in the name and on behalf of such Person by its client or an agent of its client that is a 

SEF Participant and has authorized a Participant to place orders or enter trades in the name 

and on behalf of such person. 

“Proprietary Account” means a “proprietary account” as defined in Section 

1.3(y) of the Commission Regulations. 

“Proprietary Data or Personal Information” for the purpose of Rule 309(c) 

means information that would separately disclose business transactions, market 

positions, or the trade secrets of a Participant or Authorized Customer or provide 

non-public information about a natural person.” 
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518. Prime Broker Trade

(a) Prime Broker trades: The Prime Broker becomes a participant of the facility and provides a

credit limit for its customer(s). The Prime Broker allows the customer(s) to execute as agent on

behalf of the Prime Broker on the SEF. The Prime Broker handles the clearing and settlement

with the counterparty to the transactions (primarily Swap Dealers) based on standard ISDA

agreements in place with the counterparty.

(b) Participant Cancellation Requests – With respect to Permitted Transactions, a Participant shall

have the right to request the cancellation of any executed Prime Broker Trade. The cancellation

request from the Participant must include the reason for the cancellation and the contact

information of the Participant and relevant Prime Broker. Upon confirmation and agreement of

the cancellation by both parties to the trade, SEF will cancel the trade.

(c) Prime Broker Cancellation Requests – With respect to Permitted Transactions, a Prime Broker

shall have the right to request the cancellation of any Prime Broker Trade (i) that is executed in

excess of the limit established by the Prime Broker with respect to such Prime Broker Trade, (ii)

because the Prime Broker Trade was executed by a Person that was not authorized by the Prime

Broker, or (iii) because the Prime Broker Trade was executed for an unauthorized product. Both

sides of the transaction must agree to the cancellation of the transaction. The Prime Broker shall

communicate the cancellation request directly to SEF within 48 hours after the execution of the

Prime Broker Trade. The cancellation request and the reason for the cancellation request should

be directed to SEF-trade-entry@bgcpartners.com. The cancellation request must contain the

UTI of the relevant trade, and the contact information of the requestor. If the SEF determines

that the request for cancellation meets the requirements of Rule “518"; the SEF will cancel the

trade.

(d) Confirmation of Prime Broker Trades: Each Participant involved in a Prime Broker Trade must

notify the Prime Broker as soon as technologically possible of each Prime Broker Trade

executed pursuant to the Rules of the SEF to which the Prime Broker is a counterparty, and the

SEF must issue and provide a trade confirmation to the Prime Broker.