Exhibit L-1

GFI SWAPS EXCHANGE LLC

CORE PRINCIPLES COMPLIANCE CHART

EXHIBIT L-1

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Core Principle 1. Compliance with 

Core Principles.

(a) In general. To be registered, and 

maintain registration, as a swap 

execution facility, the swap 

execution facility shall comply 

with–

(1) The core principles described 

in section 5h of the Act; and

(2) Any requirement that the 

Commission may impose by 

rule or regulation pursuant to 

section 8a(5) of the Act.

(b) Reasonable discretion of a swap 

execution facility. Unless otherwise 

determined by the Commission by 

rule or regulation, a swap 

execution facility described in 

paragraph (a) of this section shall 

have reasonable discretion in 

establishing the manner in which 

the swap execution facility 

complies with the core principles 

described in section 5h of the Act.

All materials submitted with the application of GFI Swaps 

Exchange LLC (the “Company”) for designation as a swap 

execution facility (“SEF”) on Form SEF and the Exhibits 

thereto (the “Application”), including but not limited to the

Company Rulebook (the “Rules”) provided in Exhibit M-1

to the Application.

Capitalized terms that are used in this Exhibit L-1 without 

definition have the meaning ascribed to those terms in the 

Rules.

This Application.

Exhibit M-1 (Rules)
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Core Principle 2. Compliance with 

rules. 

A swap execution facility shall: 

(a) Establish and enforce compliance 

with any rule of the swap 

execution facility, including the 

terms and conditions of the swaps 

traded or processed on or through 

the swap execution facility and any 

limitation on access to the swap 

execution facility;

(b) Establish and enforce trading, trade 

processing, and participation rules 

that will deter abuses and have the 

capacity to detect, investigate, and 

enforce those rules, including 

means to provide market 

participants with impartial access 

to the market and to capture 

information that may be used in 

establishing whether rule 

violations have occurred;

(c) Establish rules governing the 

operation of the facility, including 

rules specifying trading procedures 

to be used in entering and 

executing orders traded or posted 

on the facility, including block 

trades; and 

Operation of the SEF and Compliance with Rules

The Company has established Rules governing the operation 

of its SEF including rules regarding the operation of its 

trading systems (the “Trading Platform”). The Rules set 

out the framework for the submission of Orders and describe 

how the Trading Platform operates. In particular, the 

Company has an Order Book. The Rules also permit voice 

execution, as well as workup sessions (called join-the-trade 

or “JTT” sessions). See Rule 507. The Rules also set out 

procedures for entering into trades through a Request for 

Quote (“RFQ”) mechanism. See Rule 508. Under Rule 509, 

directions to effect a Swap may be given to an Execution 

Specialist, who will execute the directions in the manner that 

the Execution Specialist deems appropriate, taking into 

account liquidity, the size and price of the Order or RFQ, the 

credit arrangements of the Parties to the trade (where 

applicable), and such other factors as such Execution 

Specialist deems relevant in the circumstances.

Pursuant to Rule 504, all Orders must be submitted to the 

Trading Platform using the relevant Trader ID and must also 

include the required information set out in Rule 506, 

including price, quantity, product, expiration date and CTI 

code. Orders may be submitted electronically or, if agreed in 

advance with an Execution Specialist, by telephone, email, 

instant message or such other medium as may be agreed with 

the Company. See Rule 505. An Order may be modified or 

cancelled unless and until such Order is executed or has 

otherwise expired. See Rule 532. The Company also 

permits entry into Block Trades, subject to the requirements 

of Rule 601. See also Section 19 of the Company’s Market 

Surveillance and Compliance Manual (the “Manual”).

Rules: 312, 401, 502, 502, 505-509, 

532, 601, 1101, and 1102 and 

Chapters 3, 5 and 7.

Exhibit O-1 (Manual): Section 3.5 

and Section 19.
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(d) Provide by its rules that when a 

swap dealer or major swap 

participant enters into or facilitates 

a swap that is subject to the 

mandatory clearing requirement of 

section 2(h) of the Act, the swap 

dealer or major swap participant 

shall be responsible for compliance 

with the mandatory trading 

requirement under section 2(h)(8) 

of the Act.

The Company has established and enforces Rules relating to 

the terms and conditions of swaps traded on or processed 

through the Trading Platform (Rules 502, 503, 1101 and 

1102). The Company has also adopted Rules regarding 

access to the Trading Platform for Participants, Sponsored 

Access Firms and Registered Traders (Chapter 3 of the 

Rules), trade practices (Chapter 5 of the Rules), disciplinary 

matters (Chapter 7 of the Rules) and mandatory trading 

requirements (Rule 401). The Company’s audit trail 

requirements are set out in Rule 506. See also Section 3.5 of 

the Manual. 

The Company will enforce its Rules impartially. In addition, 

the Company will publish a notice to its Participants and 

Sponsored Access Firms with respect to each new Rule and 

Rule amendment submitted to the Commodity Futures 

Trading Commission (“CFTC” or “Commission”) pursuant 

to the Commission’s Part 40 Regulations. See Rule 312.

Access Requirements

Participants have the right to access the Trading Platform for 

their own accounts and, if properly registered, on behalf of 

Customers, and must designate at least one of their 

employees as a Registered Trader. See Rule 301(a), (e). A 

Participant must adopt, implement and enforce its own 

access control procedures, and the Participant is responsible 

for any breach or failure of its access control procedures. See

Rule 301(c). A Participant may also designate one or more 

Customers, investment managers or other third parties as a

Sponsored Access Firm. See Rule 301(a). Each Participant 

and Sponsored Access Firm must be an “eligible contract 

participant” as defined in the Commodity Exchange Act 

(“CEA”) and CFTC Regulations. See Rule 302(a), Rule 

Rules: 206, 301-306, 308, 309, 311,

313, 404, 504, 519 and 520.
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304(b). Rule 302 sets forth the qualification standards for 

Participants, including that an applicant must itself be a 

member of or have entered into an arrangement with a 

Derivatives Clearing Organization to clear Swaps that it 

effects on the Trading Platform. See also Core Principle 7 

(Financial Integrity of Transactions). Rule 304 sets out the 

requirements for a Participant to grant a Sponsored Access 

Firm the right to access the Trading Platform. Each 

Participant and Sponsored Access Firm is required to 

designate at least one person as a Registered Trader pursuant 

to Rule 305, and is responsible for the Registered Trader’s 

use of, information transmitted to, and Swaps effected on the 

Trading Platform by such Registered Trader(s). See Rule 

305(a). The Company also provides access to Independent 

Software Vendors in a fair and non-discriminatory manner 

provided they satisfy the Company’s technological integrity 

requirements as set out in Rule 306. Pursuant to Rule 308, 

the Company is required to charge comparable fees for all 

Participants that receive comparable access to the Trading 

Platform. Any person that initiates or executes a transaction 

pursuant to the Rules, directly or indirectly, is subject to the 

Company’s jurisdiction. See Rule 311(a). Each Registered 

Trader, and each automated trading system, of a Participant 

or a Sponsored Access Firm must have a unique Trader ID, 

and each Participant is responsible for controlling and

monitoring the use of the Trader IDs assigned to its 

Registered Traders. See Rule 504.

The Company will apply these access criteria in an impartial 

manner through the application process described in Rule 

303 and the Participation Committee review process 

described in Rule 206(d). Failure of an applicant to 

demonstrate a capacity to comply with the requirements of 

the Rules or of Applicable Law may lead to a denial of the 
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application under Rule 302(b). Applicants have the right to 

appeal a denial or conditional grant of their Participant 

application under Rule 302(e). Other provisions in the 

Rulebook, including Rules 302(c), 308(b), 309(b) and 404, 

set out the authority of the Company to revoke, suspend or 

limit a Participant’s, Sponsored Access Firm’s, or Registered 

Trader’s access to the Trading Platform. Any denial of 

access, or suspension, expulsion or other restriction imposed 

pursuant to disciplinary procedures will similarly restrict 

access to the Trading Platform pursuant to Rule 519.

The Company may grant a Participant’s request to withdraw

if the requirements of Rule 313 are met.

Rule Enforcement Program

The Company will monitor and enforce compliance with its 

Rules, including the Rules prohibiting abusive trade 

practices. Rule 401 sets out duties and responsibilities of 

Participants and Sponsored Access Firms, including the 

requirement to utilize the Company’s services in a 

responsible manner, comply with all Rules of the Company, 

cooperate with Company investigations, inquiries, audits, 

examinations and proceedings, and observe high standards of

fair dealing and equitable principles of trade. Participants 

and Sponsored Access Firms are also required to maintain 

books and records as required under the CEA and CFTC 

Regulations as well as monitor and enforce compliance with 

any applicable internal risk limits.

Chapter 5 of the Rules contains the Company’s trade practice 

rules. The Rules proscribe several forms of conduct and 

trade practices including: fraudulent acts (Rule 511), 

fictitious or noncompetitive transactions (Rule 512), 

Rules: 401, 402, 511-518, 521-523, 

525-531, 533, 534 and 702.

Manual: Section 2.2 and Section 

2.1.5.
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fraudulent or misleading communications (Rule 513), market 

disruption (Rule 514), market manipulation (Rule 515),

disruptive trading practices (Rule 516), misstatements (Rule 

521), withholding of customer orders (Rule 526), priority of 

customer orders (Rule 527), trading against customer orders 

(Rule 528), front-running (Rule 516), simultaneous buying 

and selling orders, including crossing orders (Rule 529), 

wash sales (Rule 531) and pre-negotiated and 

noncompetitive trades, including money passes (Rule 533). 

The Rules also require compliance with the Rules and the 

rules of the Derivatives Clearing Organization (Rule 517) 

and further require only the entry of good faith bids and 

offers (Rule 518). In addition, Rule 405 prohibits a 

Participant or Sponsored Access Firm from accepting an 

Order from a Customer unless, inter alia, (i) such Participant

or Sponsored Access Firm is properly registered with the 

CFTC, as necessary and (ii) such Customer qualifies as an 

Eligible Contract Participant.

Chapter 5 also includes rules regarding acts detrimental to 

the Company (Rule 522), supervision (Rule 523), 

responsibility for customer orders (Rule 525), priority of 

execution (Rule 527), and discretionary orders (Rule 534). 

In addition, no Participant may disclose an Order other than 

to a designated Company Official, to the CFTC or as 

necessary to execute the Order. See Rule 530.

The Company has made appropriate arrangements to ensure 

that it has sufficient resources to enforce its Rules. In 

accordance with Section 2.1.5 of the Manual, the Company’s 

Chief Compliance Officer (the “CCO”) and Regulatory 

Oversight Committee (the “ROC”) monitor the compliance 

resources of the Company and will engage additional 

personnel as deemed necessary on a temporary or permanent 
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basis. The Company’s ability to detect, investigate and take 

action with respect to violations of its rules will be provided 

by the ROC, the CCO and National Futures Association

(“NFA”), which is the Company’s Regulatory Services 

Provider (“RSP”). Pursuant to Rule 402, the Company has 

the right to require a Participant to furnish information 

regarding the Participant’s business that is subject to the 

Rules. In addition, Rule 702(c) requires Participants, 

Sponsored Access Firms and Registered Traders to produce 

books and records related to any inquiry, investigation, 

disciplinary proceeding or appeal as requested by the 

Compliance Department (including the staff of the RSP). As 

described in further detail below, the RSP is primarily 

responsible for financial surveillance, daily market 

surveillance, daily trade practice surveillance and inquiries 

and investigations. The Compliance Department is primarily 

responsible for real-time market monitoring. The RSP also 

performs real-time market monitoring and provides services 

related to disciplinary proceedings.

The ROC is responsible for monitoring the sufficiency, 

independence and effectiveness of the Company’s regulatory

program. See Section 2.2 of the Manual. See also Core 

Principle 4 (Monitoring of Trading and Trade Processing).

Regulatory Services Provider

Rule 913 permits the Company to enter into an agreement 

with a regulatory services provider to provide certain 

regulatory services to the Company. Pursuant to the 

Regulatory Services Agreement entered into between the 

Company and the RSP (the “RSA”), the RSP will perform 

trade practice and market surveillance using an automated 

surveillance system known as the Sophisticated Warning 

Exhibit N-1 (Regulatory Services 

Agreement)

Rule: 913.

Manual: Sections 3.1-3.4
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Analysis Profiling System (“SWAPS”). See Exhibit N-1. 

Additional information on the SWAPS system is provided in 

Sections 3.1-3.4 of the Manual. The RSP uses SWAPS to 

monitor for certain types of suspicious transactions in 

connection with the time, size and percentage parameters that 

will be set based on the Rules or the RSP’s standards, which 

may be revised from time to time based on product offerings, 

market activities, trader profile information and the 

Company’s procedures. The RSP will review all trades 

executed on the Trading Platform or otherwise pursuant to 

the Rules.

The Compliance Department has primary responsibility for 

the Company’s real-time market monitoring. The 

Compliance Department reviews trading activity on the 

Trading Platform, including trades, RFQs and responses to 

RFQs. The Compliance Department will receive and review 

reports of any unusual trading activities on the Trading 

Platform. The RSP also performs real-time market 

monitoring of trading activity on the Trading Platform using 

a view-only market monitor screen through which it can 

track the activity of specific traders, monitor price and 

volume information and is alerted to any market messages. 

See also Core Principle 4 (Monitoring of Trading and Trade 

Processing).

Price Adjustments and Trade Cancellations

Rule 538 describes the Company’s procedures for cancelling 

or adjusting a trade as a result of an error. If the Company

determines that the price of a trade is outside the “NonReviewable Range,” the Company may cancel or adjust the 

price of such trade if it believes that allowing the trade or 

trades to stand as executed could have a material, adverse 

Rules: 538 and 541
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effect on the integrity of the market or is necessary to 

mitigate market disrupting events caused by the improper or 

erroneous use of the Trading Platform or by system defects. 

The “Non-Reviewable Range” is defined, with respect to a 

Swap, as any price that is not more than 10% higher or lower 

than the most recent price of: (i) a transaction in such Swap 

effected pursuant to the Rules, other than a Block Trade or 

the Swap that is under review; (ii) if the Swap is a Cleared 

Swap, the settlement price established therefor by a 

Derivatives Clearing Organization; or (iii) if the prices 

described in clauses (i) and (ii) occurred more than one 

business day before the date of the Swap that is being 

reviewed, the price for such Swap or an economically 

equivalent swap most recently reported by a Swap Data 

Repository. A Swap with a price inside the Non-Reviewable 

Range stands as executed.

A decision by the Company to cancel or adjust the price of a 

trade will be made as soon as practicable, and the Company 

will notify Participants, Sponsored Access Firms, the Swap 

Data Repository and, if applicable, the Derivatives Clearing 

Organization of any such decision.

Pursuant to Rule 541, a Participant or Sponsored Access 

Firm may also request review to determine whether an Order 

or RFQ was correctly displayed and/or executed by the 

Trading Platform or, if relevant, by an Execution Specialist.

Audit Trail

Section 3.5 of the Manual sets out the Company’s audit trail 

arrangements, which are designed to capture all relevant 

trading information to facilitate the Company’s trade practice 

and market surveillance activities described above. The 

Manual: Section 3.5 and Section 7.2.

Rules: 703.
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audit trail program is based on original source documents 

that are unalterable, sequentially identified records. The 

records reflect the terms of the Order or RFQ entered, the 

time of the Order or RFQ, a unique Trader ID for the user 

entering the Order or RFQ and an account identifier. The 

system further reflects information regarding Orders which 

are filled, unfilled or cancelled, and whether an RFQ was 

accepted, and, if so, on what terms.

The Company immediately captures and maintains all audit 

trail information entered into the Company’s 

communications systems, including voice, instant messages, 

Bloomberg messages, email and electronic entry of Orders

and RFQs into the Company’s systems. By capturing this 

information, the Company’s electronic transaction history 

database contains a history of all Orders, RFQs, Indications 

of Interest and executed transactions as well as the following: 

(i) all data entered into the Trading Platform to allow the 

transaction to match and clear; (ii) the categories of market 

participant for which each trade is executed, including the 

specific account; and (iii) timing and sequencing data 

adequate to reconstruct trading. All audit trail data contained 

in the transaction database is organized in a manner that 

allows the Compliance Department to search, sort and 

present the information in order to reconstruct trading and 

identify potential violations.

All data gathered as part of the audit trail is maintained in 

accordance with the CFTC’s recordkeeping requirements and 

is kept in a manner that does not allow for unauthorized 

alteration, erasure or other potential loss.

As described in Section 7.2 of the Manual, the RSP will 

conduct reviews of all Participants, Sponsored Access Firms 
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and Registered Traders to verify their compliance with the 

Company’s audit trail and recordkeeping requirements. 

Upon completion of such review, the RSP will identify, if 

any, the foregoing has demonstrated deficiencies in 

complying with the Company’s audit trail requirements, 

which may lead to the imposition of sanctions for purposes 

of deterring additional violations. Such sanctions are subject 

to the restrictions on warning letters described in Rule 703.

Disciplinary Procedures

Chapter 7 of the Rules sets forth the Company’s disciplinary 

and enforcement process and demonstrates the Company’s 

capacity to detect and investigate rule violations. The 

Compliance Department, in accordance with Rule 702, has 

the authority to initiate and conduct inquiries and 

investigations, prepare investigative reports, make 

disciplinary recommendations and prosecute violations. In 

practice, the RSP will be primarily responsible for 

conducting investigations and preparing investigation 

reports. Rule 702 also provides the Compliance Department 

(including the RSP) with the authority to collect information 

and documents and examine Participants’ books and records 

during an investigation. 

Rule 702 also provides that the Compliance Department (or 

the RSP) will commence an investigation upon the receipt of 

a request from Commission staff or upon the discovery or 

receipt of information that indicates a reasonable basis for a 

finding that a violation has occurred or will occur. Pursuant 

to Rule 703(e), absent mitigating circumstances, all 

investigations must be completed within twelve months after 

the date the investigation is opened. No person with a 

conflict of interest will be permitted to participate in any 

Rules: Chapter 7, 912 and 913.

Manual: Section 4.
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Company enforcement action or Disciplinary Panel. See also

Section 4 of the Manual.

Investigations may be resolved through a warning letter; 

however, no more than one warning letter for the same 

potential violation may be issued to the same potential 

respondent during a rolling 12-month period. See Rule 

703(f).

As mentioned above, and in accordance with Rule 913, the 

Company has entered into the RSA with NFA, which will act 

as the RSP. However, the Company’s retains ultimate 

decision-making authority with respect to any powers or 

functions that are delegated to the RSP, including exclusive 

authority over the issuance of disciplinary charges and any 

denial of access to the Trading Platform for disciplinary 

reasons.

Chapter 7 of the Rules sets out the detailed procedures for 

the Company’s disciplinary proceedings, including the 

potential establishment of an optional Review Panel to 

review an investigation report (Rule 704), the preparation of 

a notice of charges (Rule 705), the answer to a notice of 

charges by a respondent (Rule 706), service of notice of 

charges (Rule 707), settlements (Rule 708), the establishment 

and operation of a Disciplinary Panel (Rule 709), convening 

hearings of the Disciplinary Panel (Rule 710), the 

respondent’s right to review evidence (Rule 711), conducting 

hearings of the Disciplinary Panel (Rule 712), Disciplinary 

Panel decisions (Rule 713), and the imposition of sanctions 

(Rule 714). Rule 716 sets out the procedures for filing 

appeals, including the creation of an Appeal Panel. The 

Company may also impose summary fines relating to 

submission of records pursuant to Rule 717. The Company 
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also reserves the right to impose disciplinary sanctions in an 

emergency in accordance with Rule 718. The rights and 

responsibilities of a Participant, Sponsored Access Firm or 

Registered Trader after suspension or termination are 

governed by Rule 719. The Company will provide written 

notice of disciplinary proceedings to the parties and to the 

CFTC in accordance with Rule 720.

Each Hearing Panel, Disciplinary Panel and Appeals Panel 

must be constituted in accordance with the composition 

requirements set out in CFTC Regulations.

Rule 912 permits the Company to enter into informationsharing agreements to coordinate surveillance with other 

markets on which financial instruments that are similar to the 

Company’s Swaps trade.

Core Principle 3. Swaps not readily 

susceptible to manipulation. 

The swap execution facility shall 

permit trading only in swaps that are 

not readily susceptible to 

manipulation.

The Company lists primarily cash-settled Swaps, some of 

which will be cleared by one or more Derivatives Clearing 

Organizations. The Company has certified each Swap’s

terms and conditions pursuant to CFTC Regulations 37.4 and 

40.2 prior to offering the Swap for trading.

The Company will submit any subsequent product filings, 

including amendments to an existing Swap’s terms and 

conditions, pursuant to Commission Regulations. When 

filing a self-certification or requesting Commission approval 

to list a new Swap for trading, Manual Section 5.2.5 requires 

the Company to include a demonstration that the Swap to be 

traded is not readily susceptible to manipulation. When 

demonstrating that a swap to be traded is not readily 

susceptible to manipulation, the Company must at a 

minimum provide the applicable information set forth in 

Appendix C to Part 38 of Commission Regulations.

Rule: 901

Manual: Section 5.2.5
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For product-specific information, refer to the Company’s 

certifications for each Swap, which are available on the 

Commission’s website (here) and the Company’s website 

(here).

Finally, the Rules restrict trading on the basis of non-public 

information. In particular, Rule 901 prohibits Company

officials from trading in Swaps or related Swaps absent prior 

written consent from the Company.

Core Principle 4. Monitoring of 

trading and trade processing.

The swap execution facility shall: 

(a) Establish and enforce rules or 

terms and conditions defining, or 

specifications detailing: 

(1) Trading procedures to be used 

in entering and executing 

orders traded on or through the 

facilities of the swap execution 

facility; and 

(2) Procedures for trade 

processing of swaps on or 

through the facilities of the 

swap execution facility; and 

(b) Monitor trading in swaps to 

prevent manipulation, price 

distortion, and disruptions of the 

delivery or cash settlement process 

through surveillance, compliance, 

Pursuant to Rule 206(b), the ROC oversees the Company’s

regulatory program and has the authority to monitor the 

sufficiency, effectiveness and independence of the 

Company’s regulatory program. The ROC is required to: (1) 

oversee the Company’s regulatory program on behalf of the 

Board; (2) monitor the Company’s regulatory program for 

sufficiency, effectiveness and independence; (3) review all 

regulatory proposals, actions or changes prior to 

implementation; (4) review the size and allocation of the 

regulatory budget and resources, and review the number, 

hiring and termination, and compensation of regulatory 

personnel; (5) review the performance of the CCO and make 

recommendations to the Board accordingly; and (6) 

recommend changes that would ensure fair, vigorous and 

effective regulation. See also Section 18.2 of the Manual.

Chapter 5 of the Rules sets forth certain prohibited trading 

practices and specifically proscribes manipulation, price 

distortion and disruptive trading practices. Chapter 7 of the 

Rules describes the Company’s disciplinary and enforcement 

procedures, which include inquiries, investigations and 

disciplinary proceedings. See also Core Principle 2 

(Compliance with Rules).

The CCO, Compliance Department and RSP implement the 

Rules: 206, 302, 310, 401 and 1002

and Chapter 5 and Chapter 7.

Manual: Section 3.6, Section 10, and 

Section 18.2.

NFA Manual
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and disciplinary practices and 

procedures, including methods for 

conducting real-time monitoring of 

trading and comprehensive and 

accurate trade reconstructions.

Company’s monitoring, surveillance and other enforcement 

functions, and the ROC will oversee this activity. The Rules, 

the Manual, RSA and NFA Market Regulation Compliance 

Manual for SEFs and DCMs Offering Swaps Contracts 

(“NFA Manual”) provide the framework for the Company’s

enforcement activities. As described in greater detail in 

Section 3 of the Manual, the RSP has developed an 

automated trade surveillance system known as SWAPS that 

captures all trade and order data, including modifications and 

cancellations. The RSP uses that data to perform trade 

practice and market surveillance services and conducts 

market monitoring on a trade day plus one (“T+1”) basis. 

The RSP is also responsible for reviewing the Company’s

trades on a routine basis to determine whether suspicious 

activity relating to applicable trading standards exists. The 

CCO oversees the RSP’s performance.

The audit trail requirements described in Core Principle 2 

(Compliance with the Rules) above ensure the Company’s

ability to comprehensively and accurately reconstruct all 

trading on the Trading Platform. 

Section 3.6 of the Manual provides the Company’s

monitoring procedures for cash-settled Swaps. The 

Company monitors the pricing of the index against which the 

Swap settles as well as the appropriateness of the 

methodology for deriving the index and has the ability to 

address circumstances that may threaten market disruption, 

manipulation and/or distortion. Section 3.6 of the Manual 

also sets out additional provisions in connection with 

monitoring for physically settled Swaps. 

Pursuant to Rule 401, all Participants and Sponsored Access

Firms must maintain all records required by the Rules 
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including all records of trading, activity in the underlying 

commodity and activity in related markets. All such books 

and records shall be made available for inspection by, and 

copies thereof shall be delivered to, the Company and its 

authorized representatives upon request.

In addition, under Rule 302, in order to be eligible for 

admission as a Participant and to maintain continued access 

to the Company, the applicant must be in compliance with all 

recordkeeping requirements set forth in the Rules. 

As described above, the Company maintains comprehensive 

audit trail data to accurately reconstruct all trading on the 

Trading Platform. Pursuant to Rule 401(a), each Participant 

is required to furnish the Company, upon request, with 

information regarding such Participant’s trading in related 

derivatives markets as well as in the products underlying the 

Swaps listed for trading on the Trading Platform. 

Pursuant to Rule 1002, each Participant that is not a Clearing 

Firm must obtain prior authorization from a Clearing Firm 

that is a member of the applicable Derivatives Clearing 

Organization. If a Clearing Firm revokes its authorization or 

guarantee of a Participant, such Participant may no longer 

access the Trading Platform until it has obtained another 

Clearing Firm authorization. See Rule 310.

Under Rule 401(b), all Orders submitted to the Trading 

Platform are subject to the Participant’s own internal risk 

limits. This approach requires Participants to monitor and 

enforce risk controls that are appropriate for their activity. 

Such risk controls may include: pre-trade limits on order 

size, price collars or bands around the current price, message 
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throttles, daily price limits or other customized risk controls.

Section 10 of the Compliance Manual provides an overview 

of the Company’s trading risk controls, including its 

procedures to suspend, pause or halt trading when warranted 

by market conditions. The Company will implement trading 

risk controls, including a maximum quantity limit for any 

single order, a maximum notional value limit and a price 

variance warning. These risk controls are designed to avoid 

market disruptions and interference with the Company’s

price discovery function. To the extent practicable, the 

Company will coordinate its trading controls with other swap 

execution facilities and with designated contract markets.

Core Principle 5. Ability To Obtain 

Information. 

The swap execution facility shall: 

(a) Establish and enforce rules that 

will allow the facility to obtain any 

necessary information to perform 

any of the functions described in 

section 5h of the Act;

(b) Provide the information to the 

Commission on request; and

(c) Have the capacity to carry out such 

international information-sharing 

agreements as the Commission 

may require.

Pursuant to Rule 302, Rule 304 and Rule 305, Participants, 

Sponsored Access Firms and Registered Traders must agree 

to abide by the Rules and consent to the Company’s

jurisdiction when accessing the Trading Platform. 

Participants and ISVs are required to provide notice to the 

Company upon the occurrence of any of the events set out in 

Rule 307. Rule 402 requires each Participant to provide the 

Company or the RSP information related to its business that 

is subject to the Rules, including relating to Swaps executed 

on or processed through the Trading Platform or in related 

markets. Pursuant to Rule 702, each Participant, Sponsored 

Access Firm, Registered Trader and ISV is required to 

cooperate with a Company investigation by making an 

appearance and making its books and records available to the 

Company.

In addition, Rule 208 obliges the Company to keep, or cause 

to be kept, all books and records required to be maintained 

pursuant to the CEA and CFTC Regulations and to make 

such books and records available for inspection, in each case 

Rules: 208, 302, 304, 305, 307, 402, 

702, 905 and 912.

Manual: Section 11.
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in the form and manner required under the CEA and CFTC 

Regulations.

Rule 912 and Section 11 of the Manual, the Company has 

broad discretion to enter into information-sharing agreements 

to coordinate surveillance with other markets that trade 

financial instruments related to the Swaps listed for trading 

on or pursuant to the Rules. The Company may enter into 

agreements or other arrangements or procedures to 

coordinate surveillance with domestic or foreign regulators, 

self-regulatory organizations, clearing organizations, 

exchanges, markets or other execution facilities to share 

information and provide other forms of mutual assistance for 

market surveillance, audits, investigations, enforcement 

actions and other regulatory purposes the Company deems 

necessary or appropriate for the Company or required by 

Applicable Law.

All information provided by a Participant or Sponsored 

Access Firm to the Company will be kept confidential as 

required by Rule 905.

Core Principle 6. Position limits or 

accountability. 

(a) In general. To reduce the potential 

threat of market manipulation or 

congestion, especially during 

trading in the delivery month, a 

swap execution facility that is a 

trading facility shall adopt for each 

of the contracts of the facility, as is 

necessary and appropriate, position 

limitations or position 

Rules 535-537 set forth the Company’s position limit and 

position accountability rules. Pursuant to Rule 535, the 

Company may adopt position limits for Swaps and grant 

exemptions from position limits, as it may determine to be 

necessary and appropriate, in accordance with CFTC 

Regulations. The Company may not set its position limit for 

any Swap that is subject to a position limit set by the CFTC 

at a level higher than the CFTC’s limit. 

Rule 536 allows the Company to adopt position 

accountability levels for Required Transactions. Persons 

with positions in excess of position accountability levels 

Rules: 535-537, 911 and Appendix A.

Manual: Section 12.
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accountability for speculators.

(b) Position limits. For any contract 

that is subject to a position 

limitation established by the 

Commission pursuant to section 

4a(a) of the Act, the swap 

execution facility shall:

(1) Set its position limitation at a 

level no higher than the 

Commission limitation; and

(2) Monitor positions established 

on or through the swap 

execution facility for 

compliance with the limit set 

by the Commission and the 

limit, if any, set by the swap 

execution facility.

established by the Company will be required to provide, 

upon request by the Company, information about their 

positions in excess of the relevant position accountability 

threshold and consent to halt any further increases in those

positions.

Procedures regarding the establishment or position limits and 

position accountability thresholds, as well as the availability 

of bona fide hedging exemptions and rules relating to 

aggregation are set out in Section 12 of the Manual. 

Pursuant to Rule 911, the Company may impose or modify 

trading limits or position limits or order the reduction of 

positions in the event of an Emergency. See also Core 

Principle 8 (Emergency Authority).

Core Principle 7. Financial integrity 

of transactions. 

The swap execution facility shall 

establish and enforce rules and 

procedures for ensuring the financial 

integrity of swaps entered on or 

through the facilities of the swap 

execution facility, including the 

clearance and settlement of the swaps 

pursuant to section 2(h)(1) of the Act.

The Company has established a comprehensive set of Rules 

and procedures to ensure the financial integrity of 

transactions entered into on or pursuant to the Rules. The 

Company has the capacity to route transactions to one or 

more Derivatives Clearing Organizations in a manner 

acceptable to each applicable Derivatives Clearing 

Organization for purposes of clearing. In particular, Chapter 

10 of the Rules and Section 13.1 of the Manual set out the 

Company’s arrangements for clearing Swaps. If the CFTC 

determines that the clearing requirement under Applicable 

Law applies to a Swap, then all such Swaps traded on or 

pursuant to the Rules must be submitted for clearing to a 

Derivatives Clearing Organization unless an exemption from 

Rules: 310, 403, 405, 1001, 1002 and

1102.

Manual: Section 13.1 and Section 

13.2.
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such mandatory clearing requirement applies.

Under Rule 1002(b), each Participant or Sponsored Access 

Firm that is not a Clearing Firm and that is trading Cleared 

Swaps for its own account must obtain prior authorization 

from a Clearing Firm that is a member of the applicable 

Derivatives Clearing Organization. Under Rule 1002(c), a 

Participant acting as Broker for a Customer must obtain 

confirmation from the Customer that it has obtained prior 

authorization from a Clearing Firm that is a member of the 

applicable Derivatives Clearing Organization. Under 

Rule 1002(d), if a Clearing Firm revokes its authorization of 

a Participant, Sponsored Access Firm or Customer, such 

Participant, Sponsored Access Firm or Customer may no 

longer access the Trading Platform until it has obtained 

another authorization from another Clearing Firm.

As provided in Rule 1001(b), the Company takes steps to 

facilitate pre-execution checks by Clearing Firms for 

compliance with limits based on credit, position or order 

size, margin requirements or similar factors.

If a Cleared Swap is affirmatively rejected by the relevant 

Derivatives Clearing Organization, the transaction is

generally deemed void ab initio except where the failure is 

(i) due to a clerical or operational error or omission or (ii)

due to the sequencing of the submission of the component 

leg of a Package Transaction, in which case the transaction 

may be resubmitted pursuant to Rule 1001(d)(i). Similarly, 

Rule 1001(d)(ii) permits certain error trades that already have 

been cleared to be offset and resubmitted.

Rule 1102 provides that clearing services provided by a 

Derivatives Clearing Organization with respect to any Swap, 
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and the rights and obligations of purchasers and sellers under 

cleared Swaps, will be governed by the rules of the 

Derivatives Clearing Organization.

The Company also ensures the financial integrity of Swaps 

through the financial oversight of its Participants. Rule 405 

prohibits a Participant or Sponsored Access Firm from 

accepting an Order from a Customer unless, inter alia, (i) 

such Participant or Sponsored Access Firm is properly 

registered with the CFTC, as necessary and (ii) such 

Customer qualifies as an Eligible Contract Participant. Rule 

403 requires Participants that are registered as a futures 

commission merchant or an introducing broker to comply 

with the provisions of Commission Regulation 1.17. The 

Rule also requires contemporaneous submission of any 

financial reports to the Company or to the RSP. A

Participant that is not registered with the CFTC must provide 

the financial information required by the Company from time 

to time. Section 13.2 of the Manual sets out the Company’s

financial surveillance policies that are designed to ensure that 

Participants meet the aforementioned minimum financial 

standards on an ongoing basis.

In addition, Participants handling customer Orders are 

subject to specific requirements in connection with such 

Orders that are set out in the Rules, including specific Rules 

prohibiting certain trade practices as described in Core 

Principle 2 (Compliance with Rules).

Pursuant to Rule 401, participants are required to monitor 

and enforce compliance with their internal risk limits.

Core Principle 8. Emergency The Company has adopted procedures and guidelines for 

implementing an emergency intervention in the market. 

Rules: 205 and 911.
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authority. 

The swap execution facility shall 

adopt rules to provide for the exercise 

of emergency authority, in 

consultation or cooperation with the 

Commission, as is necessary and 

appropriate, including the authority to 

liquidate or transfer open positions in 

any swap or to suspend or curtail 

trading in a swap.

Pursuant to Rule 911, the Board may implement temporary 

emergency procedures and rules (“Emergency Rules”), 

subject to applicable provisions of the CEA and CFTC 

Regulations. The Emergency Rules may require or authorize 

the Company, the Board, any committee of the Board, the 

Chief Executive Officer or any other Officer to take actions 

necessary or appropriate to respond to the Emergency, 

including, but not limited to, the following actions: (i) 

suspending or curtailing trading or limiting trading to 

liquidation only (in whole or in part); (ii) extending, limiting 

or changing Trading Hours for one or more Swaps; (iii) 

ordering the liquidation of Swaps or the reduction of 

positions, in consultation with relevant Derivatives Clearing 

Organizations if practicable; (iv) temporarily modifying or 

suspending any provision of the Rules; (v) imposing or 

modifying trading limits, price limits or position limits; (vi) 

requiring additional margin to be collected from customers, 

in consultation with relevant Derivatives Clearing 

Organizations if practicable; or (vii) any other action as 

directed by the CFTC.

Under Rule 911, if the Chief Executive Officer (or in his or 

her absence, the Chief Operating Officer) determines that 

Emergency Rules must be implemented before a meeting of 

the Board can reasonably be convened, then the Chief 

Executive Officer (or Chief Operating Officer) shall have the 

authority, without Board action, to implement any 

Emergency Rules that he or she deems necessary or 

appropriate to respond to such an Emergency. Specific 

procedures relating to Emergencies arising from suspicious 

activities detected on the Trading Platform are provided in 

Section 3.4.3 of the Manual.

The Company will promptly notify its Participants and 

Manual: Section 3.4.3.
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Sponsored Access Firms whenever the Company takes 

actions necessary or appropriate to respond to an Emergency. 

If the Emergency is related to a Swap that is fungible with 

financial products traded on another platform, the Company

will attempt to coordinate its response with any directions 

received from the CFTC or the CFTC staff.

The Company will use reasonable efforts to notify the CFTC

prior to implementing, modifying or terminating an 

Emergency Rule. If such prior notification is not possible or 

practicable, the Company will notify the Commission as 

soon as reasonably practicable, but in all circumstances 

within 24 hours of the implementation, modification or 

termination of such Emergency Rule.

Any action taken in respect of an Emergency remains subject 

to the conflict of interest requirements set out in Rule 205.

Core Principle 9. Timely publication 

of trading information. 

(a) In general. The swap execution 

facility shall make public timely 

information on price, trading 

volume, and other trading data on 

swaps to the extent prescribed by 

the Commission. 

(b) Capacity of swap execution 

facility. The swap execution 

facility shall be required to have 

the capacity to electronically 

capture and transmit trade 

information with respect to 

Consistent with Rule 409, the Company will publish on its 

website each day information regarding volume, price 

ranges, open interest and settlement prices. The Company 

shall also publish on its website on a daily basis the total 

quantity of Block Trades that are included in the total volume 

of trading. Information on settlement prices and open 

interest shall be provided by the Derivatives Clearing 

Organization.

In addition, Rule 540 requires the Company to transmit 

Reportable Swap Data for each Swap executed pursuant to 

the Rules to the appropriate Swap Data Repository in the 

form and manner, and within the timeframe, required by the 

CEA and CFTC Regulations. Rule 541 obliges a Participant 

or Sponsored Access Firm that becomes aware of an error in 

any Reportable Swap Data to promptly submit corrected data 

Rules: 406, 408, 409, 540 and 541.

Manual: Section 15.
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transactions executed on the 

facility.

to the Company and, in the case of a Block Trade, to the 

counterparty to the Block Trade. The Company may provide 

such Reportable Swap Data to Participants, Sponsored 

Access Firms and Registered Traders no earlier than the time 

it transmits such information to a Swap Data Repository and 

in a form that does not disclose the identities, or otherwise 

facilitate identification, of the parties to the Swap. 

Additional information on the Company’s transaction 

reporting procedures is set forth in Section 15 of the Manual.

Pursuant to Rule 406, the Company provides each 

counterparty to a Swap with a written record of all the terms 

of the Swap which will serve as confirmation of the Swap. 

The Company also makes information regarding Orders and 

trades available to Participants as it deems necessary or 

advisable from time to time. See Rule 408.

Core Principle 10. Recordkeeping 

and reporting. 

(a) In general. A swap execution 

facility shall: 

(1) Maintain records of all 

activities relating to the 

business of the facility, 

including a complete audit 

trail, in a form and manner 

acceptable to the Commission 

for a period of five years; 

(2) Report to the Commission, in a 

form and manner acceptable to 

the Commission, such 

Rule 208 requires the Company to: (i) keep, or cause to be 

kept, complete and accurate books and records of all 

activities relating to the business of the Company, including 

all books and records required to be maintained pursuant to 

the CEA and CFTC Regulations, and (ii) retain all such 

books and records and make such books and records 

available for inspection by the Commission and the U.S. 

Department of Justice in accordance with Applicable Law. 

Under Rule 904, the Company may record conversations and 

retain copies of electronic communications between 

Company officials and Participants, Sponsored Access 

Firms, Registered Traders or Clearing Firms. Any such 

copies of electronic communications may be retained by the 

Company in such manner and for such periods of time as 

required by Applicable Law.

Rules: 206, 208 and 904.

Manual: Section 15 and Section 16.

Exhibit S.
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information as the Commission 

determines to be necessary or 

appropriate for the 

Commission to perform the 

duties of the Commission 

under the Act; and

(3) Keep any such records relating 

to swaps defined in section 

1a(47)(A)(v) of the Act open 

to inspection and examination 

by the Securities and Company 

Commission.

(b) Requirements. The Commission 

shall adopt data collection and 

reporting requirements for swap 

execution facilities that are 

comparable to corresponding 

requirements for derivatives 

clearing organizations and swap 

data repositories.

The Company also maintains full, complete, and systematic 

records, together with all pertinent data and memoranda, of 

all of the Company’s activities with respect to Swaps, 

including the real-time swap data reporting requirements set 

out in Part 43 of CFTC Regulations as well as the swap 

creation data reporting requirements in Part 45 of the CFTC

Regulations. See also Sections 15 and 16 of the Manual. 

The RSP generates records relating to the provision of 

services pursuant to the RSA. Such records are maintained 

in accordance with the CEA and CFTC Regulations, and will 

be provided to the Company upon request.

Under Rule 206, the ROC will oversee all facets of the 

regulatory program, including compliance with 

recordkeeping requirements.

Exhibit S describes the procedures for maintaining trade data 

for transactions on the Company. In addition, the Company

maintains records of Board meetings in accordance with the 

Operating Agreement.

Core Principle 11. Antitrust 

considerations. 

Unless necessary or appropriate to 

achieve the purposes of the Act, the 

swap execution facility shall not:

(a) Adopt any rules or take any 

actions that result in any 

unreasonable restraint of trade; or

The Company’s Rules and policies have been designed to 

avoid unreasonable restraints of trade or the imposition of 

any material anticompetitive burden on the SEF. The 

Company has not adopted any rule or taken any action with 

the intent or result of restraining trade. The Company will 

not require Participants to acquire an equity interest in the 

Company and access will be available to a broad number of 

Participants and through such Participants, Sponsored Access 

Firms.

As set forth in Core Principle 2 (Compliance with Rules), the 
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(b) Impose any material 

anticompetitive burden on trading 

or clearing.

Company will not restrict access or impose burdens on 

access in a discriminatory manner within each category or 

class of Participants or between similarly situated categories 

or classes of Participants. Moreover, the Company will 

make public daily information related to Swaps traded on or 

processed through the Trading Platform. See Core Principle 

9 (Timely Publication of Trading Information).

Core Principle 12. Conflicts of 

interest. 

The swap execution facility shall: 

(a) Establish and enforce rules to 

minimize conflicts of interest in its 

decision-making process; and 

(b) Establish a process for resolving 

the conflicts of interest.

Rule 201 minimizes conflicts of interest by requiring that, at 

all times, not less than 35% of the Directors are Public 

Directors. In addition, Rule 206 requires the Company to 

establish an ROC that is composed solely of Public 

Directors. As noted above, the ROC oversees the 

Company’s regulatory program and reviews the performance 

of the CCO on behalf of the Board.

Rule 205 provides the Company’s rules for minimizing and 

resolving conflicts of interest. Under Rule 205, no member 

of the Board or any Disciplinary Panel, Review Panel or 

Appeal Panel will participate in such body’s deliberations 

and voting on any significant action if such member: (i) is a 

named party in interest; (ii) is an employer, employee or 

fellow employee of a named party in interest; (iii) has any 

other significant, ongoing business relationship with a named 

party in interest; (iv) has a family relationship with a named 

party in interest; or (v) has a direct and substantial financial 

interest in the result of the vote. Rule 205 also requires 

documentation of all conflicts of interest and establishes a 

process for resolving conflicts of interest.

Rule 204 limits the use and disclosure of material, non-public 

information gained in connection with a member’s 

participation on the Board or any committee for any purpose 

other than the performance of his or her official duties as a 

Rules: 201, 204, 205, 206, 709, 716, 

901, 902 and 903.

Manual: Section 2.1.5 and Section 6.

Exhibit C-3 (Regulatory Oversight 

Committee Charter)

Exhibit N-22 (Regulatory 

Compliance and Service Provision 

(Secondment) Agreement).
GFI SWAPS EXCHANGE LLC

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member of the Board or committee. Company officials are 

also subject to certain prohibitions on trading set out in Rule 

901. In addition, Section 6 of the Manual sets out the 

Company’s policies regarding the use of data collected in 

connection with its regulatory obligations.

Pursuant to Rule 709 and Rule 716, a respondent may seek to 

disqualify any individual named to a Disciplinary Panel or an

Appeal Panel due to a conflict of interest or for any other 

reasonable grounds. 

Rule 902 also prohibits a Participant or Sponsored Access 

Firm from giving anything of value to a Company official in 

excess of the maximum amount permitted by the Company’s 

gifts and entertainment policy without the prior written 

approval of the CCO.

Section 2.1.5 of the Manual describes the process by which 

the Company resolves conflicts that could arise between the 

roles and duties of the CCO in his or capacity as CCO of the 

Company and his or capacity as CCO or CRO of an Affiliate

of the Company. See also the Company’s Regulatory 

Oversight Committee Charter. Each employee of the 

Company that is also employed by an Affiliate of the 

Company must sign the Regulatory Compliance and Service 

Provision (Secondment) Agreement, pursuant to which such 

employee acknowledges the applicability of the Manual and 

agrees to cooperate in any investigations or inquiries that 

may be conducted by the Commission.

Finally, Rule 903(a) prohibits the Company from using for 

business or marketing purposes any Proprietary Data and 

Personal Information collected or received for the purpose of 

fulfilling its regulatory obligations unless the Person from 
GFI SWAPS EXCHANGE LLC

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whom it collects or receives such Proprietary Data and 

Personal Information clearly consents. Access to the 

Company will not be conditioned on a Person’s consent to 

the Company’s use of Proprietary Data and Personal 

Information for business or marketing purposes.

See also Core Principle 2 (Compliance with Rules).

Core Principle 13. Financial 

resources. 

(a) In general. The swap execution 

facility shall have adequate 

financial, operational, and 

managerial resources to discharge 

each responsibility of the swap 

execution facility. 

(b) Determination of resource 

adequacy. The financial resources 

of a swap execution facility shall 

be considered to be adequate if the 

value of the financial resources 

exceeds the total amount that 

would enable the swap execution 

facility to cover the operating costs 

of the swap execution facility for a 

one-year period, as calculated on a 

rolling basis.

The Company has adequate financial, operational, and 

managerial resources to discharge each of its responsibilities. 

As required by CFTC Regulations, the Company will 

calculate its financial resources to ensure that the amount of 

such resources are sufficient (and sufficiently liquid) to cover 

its operating costs for a one-year period, as calculated on a 

rolling basis. 

In preparing these financial resources calculations, the 

Company applies “haircuts” to the market value of certain 

resources where appropriate to reflect market and credit risk, 

and the ROC may require that the value of financial 

resources be calculated more often than monthly if the ROC 

determines that doing so is necessary or advisable. The 

Company will submit monthly reports of its financial 

resources calculations to the CFTC. See Section 13.3 of the 

Manual.

See also Exhibit E and Exhibit I-1 – Financial Statements 

(Audited).

Manual: Section 13.3

Exhibit E.

Exhibit I-1.

Core Principle 14. System 

safeguards. 

The Company has developed a program of risk analysis and 

oversight to identify and minimize sources of operational 

risk, through the development of appropriate controls and 

Rules: 407 and 911.
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The swap execution facility shall: 

(a) Establish and maintain a program 

of risk analysis and oversight to 

identify and minimize sources of 

operational risk, through the 

development of appropriate 

controls and procedures, and 

automated systems, that:

(1) Are reliable and secure; and 

(2) Have adequate scalable 

capacity; 

(b) Establish and maintain emergency 

procedures, backup facilities, and a 

plan for disaster recovery that 

allow for: 

(1) The timely recovery and 

resumption of operations; and 

(2) The fulfillment of the 

responsibilities and obligations 

of the swap execution facility; 

and

(c) Periodically conduct tests to verify 

that the backup resources of the 

swap execution facility are 

sufficient to ensure continued:

(1) Order processing and trade 

procedures, and the development of automated systems that 

are reliable, secure, and have adequate scalable capacity. 

This program is described in Exhibit V-1 (Technology 

Questionnaire), which includes information regarding the

security of those systems, the Company’s risk assessment 

reviews, internal controls for operations, functional testing, 

security testing and capacity planning and testing.

Exhibit V-1 also describes the Company’s emergency plan 

and includes a description of the back-up systems and 

emergency procedures that include recovery time objectives. 

Under the emergency plan, the Company has procedures to 

conduct failover tests twice a year to ensure that backup 

resources are sufficient to ensure continued order processing 

and trade matching, price reporting, market surveillance, and 

maintenance of a comprehensive and accurate audit trail.

Rule 407 requires each Participant to identify an employee or 

agent as its “Responsible Person” for purposes of serving as 

administrator in respect of such Participant’s and its 

Sponsored Access Firms’ use of the Trading Platform. In 

particular, a Responsible Person must be able to access and, 

if required, modify or cancel, any and all Orders placed by 

the relevant Participant or any of its Sponsored Access 

Firms.

In addition, Rule 911 authorizes the Company to adopt and 

implement Emergency Rules. See also Core Principle 8 

(Emergency Authority).

See also Section 17 of the Manual.

Manual: Section 17.

Exhibit V-1.
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matching;

(2) Price reporting; 

(3) Market surveillance; and 

(4) Maintenance of a 

comprehensive and accurate 

audit trail.

Core Principle 15. Designation of 

Chief Compliance Officer. 

(a) In general. Each swap execution 

facility shall designate an 

individual to serve as a chief 

compliance officer.

(b) Duties. The chief compliance 

officer shall: 

(1) Report directly to the board or 

to the senior officer of the 

facility;

(2) Review compliance with the 

core principles in this 

subsection;

(3) In consultation with the board 

of the facility, a body 

performing a function similar 

to that of a board, or the senior 

officer of the facility, resolve 

The Company has appointed a CCO and has conferred on the 

CCO all of the obligations and powers specified by the CEA 

and the CFTC Regulations. The authority and resources of 

the CCO to enforce the Company’s policies and procedures 

designed to achieve compliance with the CEA and CFTC

Regulations are set forth in Section 2.1 of the Manual. In 

addition, under Section 2.1.7 of the Manual, the CCO is 

responsible for supervision of key aspects of the Company’s

self-regulatory program. The minimum qualifications of the 

CCO are set forth in Exhibit F.

Rule 202 obliges the Board to appoint the CCO, who in turn 

reports to and is supervised by the ROC (which consists 

entirely of Public Directors) or, to the extent not inconsistent 

with the ROC Charter, the Company’s senior officer, as 

determined by the Company in its discretion. As set forth in 

Section 2.1 of the Manual, the CCO’s compensation is set by 

a majority of the Board and the CCO shall meet annually 

with the Board and quarterly with the ROC to provide an 

overview of the compliance and market surveillance 

programs of the SEF.

The CCO is required to:

Rules: 202 and 207.

Manual: Section 2.1.
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any conflicts of interest that 

may arise;

(4) Be responsible for establishing 

and administering the policies 

and procedures required to be 

established pursuant to this 

section;

(5) Ensure compliance with the 

Act and the rules and 

regulations issued under the 

Act, including rules prescribed 

by the Commission pursuant to 

section 5h of the Act; and 

(6) Establish procedures for the 

remediation of noncompliance 

issues found during 

compliance office reviews, 

look backs, internal or external 

audit findings, self-reported 

errors, or through validated 

complaints.

(c) Requirements for procedures. 

establishing procedures under 

paragraph (b)(6) of this section, the 

chief compliance officer shall 

design the procedures to establish 

the handling, management 

response, remediation, retesting, 

and closing of noncompliance 

(i) oversee and review the Company’s compliance with 

the Core Principles for SEFs set forth in the CEA and Part 37 

of the CFTC Regulations;

(iii) resolve, in consultation with the Board, the ROC, or 

the CEO (as appropriate), any conflicts of interest that may 

arise, including: 

a. conflicts between business considerations and 

compliance requirements;

b. conflicts between business considerations and the 

requirement that the Company provide fair, open, and 

impartial access; or

c. conflicts between the Company’s management and 

members of the Board;

(iv) establish and administer written policies and 

procedures reasonably designed to prevent violations of the 

CEA and CFTC Regulations, including without limitation

Part 37 of such Regulations;

(v) take reasonable steps to ensure compliance with the 

CEA and CFTC Regulations; 

(vi) establish and follow appropriate procedures for the 

handling, management response, remediation, retesting, and 

closing of noncompliance issues identified through 

compliance office reviews, look-backs, internal or external 

audit findings, self-reported errors or validated complaints; 

(vii) supervise the Company’s self-regulatory program 

administered by the Compliance Department with respect to 

trade practice surveillance, market surveillance, real-time 
GFI SWAPS EXCHANGE LLC

COMPLIANCE WITH SEF CORE PRINCIPLES

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SEF CORE PRINCIPLES APPLICANT COMMENTS RELATED RULES/DOCUMENTS

issues.

(d) Annual reports. 

(1) In general. In accordance with 

rules prescribed by the 

Commission, the chief 

compliance officer shall 

annually prepare and sign a 

report that contains a 

description of:

(i) The compliance of the 

swap execution facility 

with the Act; and 

(ii) The policies and 

procedures, including the 

code of ethics and conflict 

of interest policies, of the 

swap execution facility. 

(2) Requirements. The chief 

compliance officer shall: 

(i) Submit each report 

described in clause (1) 

with the appropriate 

financial report of the 

swap execution facility 

that is required to be 

submitted to the 

Commission pursuant to 

this section; and 

market monitoring, compliance with audit trail requirements, 

enforcement and disciplinary proceedings, audits, 

examinations, and other regulatory responsibilities with 

respect to members and market participants in accordance 

with CFTC Regulations; and

(ix) prepare the Company’s Annual Compliance Report.

The Company’s policies and procedures for the CCO’s 

annual compliance report are set forth in Section 2.1.10 of 

the Manual. The annual report must contain: (i) a summary 

description of the Company’s written policies and 

procedures, including the Company’s Code of Business 

Conduct and Ethics and conflict of interest policies; (ii) a list 

of any material changes to the Company’s compliance 

policies and procedures; (iii) a compliance chart containing a 

description of the Company’s compliance policies and 

procedures, an assessment of the effectiveness of these 

policies and procedures and a summary of areas for 

improvement; (iv) a description of the Company’s 

compliance resources; and (v) a discussion of material noncompliance matters arising in the previous year. The CCO 

must certify that, to the best of his or her knowledge and 

reasonable belief, and under penalty of perjury, the report is 

accurate and complete.

The CCO’s annual compliance report will be provided to the 

Board prior to submission to the CFTC. The Board does not 

have the authority to compel the CCO to make any changes 

to the contents of the Report. The compliance report must be 

submitted to the CFTC not later than 60 days after the end of 

the Company’s fiscal year. The CCO must file an 

amendment to correct any material error or omission.
GFI SWAPS EXCHANGE LLC

COMPLIANCE WITH SEF CORE PRINCIPLES

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SEF CORE PRINCIPLES APPLICANT COMMENTS RELATED RULES/DOCUMENTS

(ii) Include in the report a 

certification that, under 

penalty of law, the report 

is accurate and complete.