EBS Global Facility Limited - SEF Application – 

Exhibit C: Fitness Standards 

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EBS Global Facility Limited - SEF Application - 

Exhibit C: Fitness Standards 

 
EBS Global Facility Limited - SEF Application – 

Exhibit C: Fitness Standards

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Exhibit C: Fitness Standards 

The fitness standards set forth herein are the Applicant’s (the “Company”) Board of Directors 

Corporate Governance Principles (the “Governance Principles”). The Governance Principles 

have been adopted by the Board of Directors (the “Board”) to assist the Board in the exercise of 

its responsibilities. The Governance Principles are not intended to supersede or interpret any 

applicable law or regulation or the Company’s Certificate of Incorporation or Articles of 

Association. 

A. Overview 

The Company has set high standards for the Board that reflect our commitment to our 

shareholders and to the institutions and individuals who will rely on us to provide swap 

execution services, and to comply with our role as a swap execution facility subject to oversight 

by the Commodity Futures Trading Commission. 

The Board must act as a prudent fiduciary for shareholders and oversee the management of the 

Company’s business. The Board is responsible for general oversight of the Company, 

including: 

• ensuring that the Company complies with all statutory, regulatory and self-regulatory 

responsibilities under applicable law; 

• reviewing, approving and monitoring major strategic, financial and business activities, 

the Company’s budget and the Company’s financial performance; 

• evaluating risks and opportunities facing the Company and proposing options for 

addressing such issues; 

• overseeing and reviewing recommendations from the Company’s committees and its 

Chief Compliance Officer; and 

• setting the payment dates and amounts of any dues, assessments or fees to be levied 

on Company participants. 

The Board should be committed to upholding the highest legal and ethical conduct in fulfilling its 

responsibilities. Each director is expected to comply with all applicable laws, rules and 

regulations, and Company policies, and promote compliance by the Company and all of its 

employees. The Board will discharge its responsibilities and exercise its authority in a manner, 

consistent with applicable legal and regulatory requirements, that promotes the sound and 

efficient operation of the Company and its swap execution activities. The Board shall, to the 

extent consistent with such responsibilities and as long as the Company remains an indirect 

subsidiary of ICAP plc, operate within the restraints and delegated authorities set by the ICAP 

B. Composition 

The Board will consist of no less than two, and up to twelve, directors from time to time 

designated by the Company’s shareholders for such purpose. 
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Exhibit C: Fitness Standards

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At such time as determined in the discretion of the Board (or at and for such other time as may 

otherwise be required by the Commodity Futures Trading Commission Regulations), at least 

thirty-five (35%) percent, but no less than two, of the directors will be Public Directors, as such 

term is defined from time to time in the rules, regulations, orders, directives or any interpretation 

thereof promulgated by the Commodity Futures Trading Commission. Public Directors shall be 

capable of exercising independent judgment to guard against conflicts of interest and assisting 

the entire Board to carry out their responsibilities more effectively. 

Each director shall serve a one year term, and may be reappointed to one or more successive 

one year terms. The initial directors shall be appointed by the shareholders, and thereafter, 

directors will be proposed by the Nomination Committee, if then established, and must be 

approved by the Company’s shareholders in order to assume office. Any vacancies caused by 

death, resignation or any other reason may be immediately filled by the Company’s 

shareholders without a proposal from the Nomination Committee with any qualified person, who 

shall hold office for the unexpired term and until his or her successor shall be duly chosen. Any 

director may be removed either for or without cause at any time by the affirmative vote of a 

majority of the directors or by the affirmative vote of a majority interest of the shareholders 

entitled to vote, at the annual meeting or at a special meeting called for that purpose. 

The identities of all directors will be published on the Company’s website and will be available to 

the public. 

C. Qualifications 

In order to fulfill their responsibilities, directors (including Public Directors) will be selected based 

on their experience, qualifications, attributes and skills and the understanding that their 

leadership will play an integral role in fulfilling the Company’s business objectives and legal 

obligations. 

In particular, directors should: 

• Demonstrate sufficient experience in the Company’s scope or intended scope of 

financial services (including ancillary services valuable for the Company to fulfill its core 

mission); and 

• All directors shall be of sufficiently good repute, including the absence of (i) disciplinary 

offenses that would be disqualifying under Section 1.63(c) of the Commodity Futures 

Trading Commission’s regulations, and (ii) any felony conviction in the last 10 years, and 

(iii) any grounds for refusal to register under Section 8a(2) of the Commodity Exchange 

Act. At least twenty percent of the directors must be person who meet the criteria of 

Section 1.64(b)(1) of the Commodity Futures Trading Commission’s regulations. 

D. Verification of Qualifications 

In order to verify that each director is qualified to serve, the Company will require (a) a written 

statement from each prospective director containing the following: (x) biographical information 

demonstrating the prospective director’s experience in the Company’s scope and intended 

scope of financial services (including ancillary services valuable for the Company to fulfill its 
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Exhibit C: Fitness Standards

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core mission); and (y) representations that the prospective director has (i) no disciplinary 

offenses that would be disqualifying under Section 1.63(c) of the Commodity Futures Trading 

Commission’s regulations, (ii) no felony conviction in the last 10 years and (iii) no grounds for 

refusal to register under Section 8a(2) of the Commodity Exchange Act (b). Each director to 

inform the Company’s Chief Compliance Officer in writing if any of the information in the 

statement materially changes thereafter. Upon receipt of the written statement, the Company’s 

Chief Compliance Officer will conduct a search on NFA BASIC to determine whether there is 

anything contradictory to the prospective director’s statement, and will attempt to resolve any 

inconsistencies. The Chief Compliance Officer will report the results of this review to the 

shareholders and the Board prior to the election of the prospective director. 

E. Conflicts of Interest 

Each director is required to act in the best interests of the Company and to refrain from any 

conduct that would be, or gives the appearance of being, a conflict of interest. Generally, a 

“conflict of interest” exists when a director’s private interest, including those of his or her 

immediate family, is inconsistent with or opposed to, or appears to be inconsistent with or 

opposed to, the Company’s interests. This includes a personal interest in a Company member 

(as defined in Section 1a(34) of the Commodity Exchange Act), vendor or other person that 

could be significantly and disproportionately impacted by a decision of the Board. 

No director, member of any committee or oversight panel, or officer or other person authorized 

to exercise authority on behalf of the Company will knowingly participate in such body’s 

deliberations or voting, including in any inquiry, investigation or any disciplinary proceeding, 

suspension, emergency or other executive action (each, an “Executive Proceeding”) if such 

person has a conflict of interest between such person’s position acting on behalf of the 

Company and such person’s personal interests (each, an “Interested Person”), unless 

deliberations are permitted as set forth below. Material conflicts of interest include, but are not 

limited to, instances where an Interested Person (a) is a named party in interest in an Executive 

Proceeding, (b) is an employer, employee or fellow employee of a named party in interest or 

potential named party in interest in an Executive Proceeding, (c) has any other significant, 

ongoing business relationship with a named party in interest or potential named party in interest 

in an Executive Proceeding, excluding relationships limited to executing transactions opposite 

each other or to clearing transactions through the same clearing members, (d) has a family 

relationship with a named party in interest or potential named party in interest in an Executive 

Proceeding (each of (a) through (d) being a “Relationship Conflict of Interest”) or (e) has a direct 

and substantial financial interest in the result of the deliberations or vote of any Executive 

Proceeding based upon either Company or non-Company positions (a “Financial Conflict of 

Interest”). A “family relationship” exists between a named party in interest or potential named 

party in interest in an Executive Proceeding and a potential Interested Person if one person is 

the other’s spouse (including a domestic partner or partner in a civil union), co-habitator, former 

spouse, parent, stepparent, child or other legal dependent, sibling, stepbrother, stepsister, 

grandparent, grandchild, uncle, aunt, nephew, niece or in-law. 

Prior to the consideration of any matter or significant action that will be considered by the Board 

or a committee of the Board in an Executive Proceeding, each potential Interested Person must 

disclose the existence of any potential conflict of interest, including any potential Relationship 
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Conflict of Interest and/or Financial Conflict of Interest, to the Chairman of the Board or the 

chairman of the relevant committee and may choose to abstain and recuse himself or herself 

from the deliberations and voting. The potential Interested Person is encouraged to consult with 

the Company’s Secretary and any necessary internal or external advisors in advance of the 

topic being discussed or voted upon. 

If disclosure of a potential conflict of interest is required, a potential Interested Person must 

disclose all information required under Applicable Law in relation to any conflict of interest, 

including: 

(a) In the case of any potential Relationship Conflict of Interest, such disclosure must 

include the specific type of Relationship Conflict of Interest based on the 

categories (a) through (d) above; and/or 

(b) In the case of any potential Financial Conflict of Interest, such disclosure must 

include the financial interest and related position information (including 

information regarding positions held by such person, positions held by individuals 

of such person’s family and positions held by a firm with which such person is 

affiliated) that is known to such person with respect to any particular month or 

months that are under consideration, and any other positions which the 

deliberating body reasonably expects could be affected by the significant action, 

including but not limited to: 

(A) gross positions held in such person’s personal accounts or “controlled 

accounts,” as defined in Commodity Futures Trading Commission Regulation 

§ 1.3(j); 

(B) gross positions held in proprietary accounts, as defined in Commodity 

Futures Trading Commission Regulation § 1.17(b)(3), at such person’s affiliated 

firm; 

(C) gross positions held in accounts in which such person is a principal, as 

defined in Commodity Futures Trading Commission Regulation § 3.1(a); 

(D) net positions held in customer accounts, as defined in Commodity 

Futures Trading Commission Regulation § 1.17(b)(2), at such person’s affiliated 

firm; and 

(E) any other types of positions, held in such person’s personal accounts or 

the proprietary accounts of such person’s affiliated firm, that the Company 

reasonably expects could be affected by the significant action. 

(c) Notwithstanding (b) above, in the case of a potential Financial Conflict of Interest, 

no such disclosure is required by a potential Interested Person if such person 

chooses to abstain from deliberations and voting on the relevant Executive 

Proceeding. 
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Exhibit C: Fitness Standards

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If a potential Interested Person who discloses a potential material conflict of interest does not 

choose to abstain and recuse himself or herself from deliberations and voting in any Executive 

Proceeding, the directors, or committee or oversight panel, as applicable, will determine 

whether such person is an Interested Person prohibited from participation in the Executive 

Proceeding. Such determination will be made by a majority vote and will be based upon a 

review of: 

(a) the information provided by such potential Interested Person; 

(b) any other source of information that is held by or reasonably available to the 

Company; 

(c) in the case of a Financial Conflict of Interest, the most recent large trader reports 

and clearing records available to the Company; and 

(d) any applicable law. 

With respect to Financial Conflicts of Interest only, and save for where applicable law prohibits 

it, any person determined to be an Interested Person who would otherwise be required to 

abstain from deliberations and voting pursuant to this policy, may participate in deliberations, 

but not in voting, if the Board, or committee or oversight panel, as applicable, determines by a 

majority vote (excluding all relevant Interested Persons) that such participation would be 

consistent with the public interest after considering the following factors: 

(a) whether such Interested Person’s participation in the deliberations is necessary 

to achieve a quorum; 

(b) whether the Interested Person has unique or special expertise, knowledge or 

experience in the matter being considered; and 

(c) the position information which is the basis for the Interested Person’s Financial 

Conflict of Interest. 

In addition to the general restrictions against conflicts of interest, all Public Directors will be 

prohibited from having “material relationships” (as defined from time to time in the rules, 

regulations, orders, directives or any interpretation thereof promulgated by the Commodity 

Futures Trading Commission and in the Governance Policy of the Company) with the Company 

which reasonably could affect the independent judgment or decision-making of such director. 

“Material relationships” are currently defined to include the following: 

(i) The director, or an immediate family member of the director, may not be an officer or 

employee of the Company or its affiliate. 

(ii) The director, or an immediate family member of the director, may not be a member of 

the Company, or a director, officer or employee of a Company member (as defined in 

Section 1a(34) of the Commodity Exchange Act and any regulation promulgated 

thereunder). 
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Exhibit C: Fitness Standards

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(iii) The director, or an immediate family member of the director, may not be an officer of 

another entity, which entity has a compensation committee (or similar body) on which any 

officer of the Company serves. 

(iv) The director, or an immediate family member of the director, or an entity with which the 

director or such immediate family member is a partner, an officer, an employee or a director, 

may not receive more than $100,000 in combined annual payments for legal, accounting, or 

consulting services from the Company, any affiliate thereof, any member of the Company or 

any affiliate of such member. 

Notwithstanding the foregoing, (a) compensation for services as a director of the Company or as 

a director of an affiliate of the Company shall not count toward the $100,000 threshold specified 

in clause (iv) of this definition, nor shall compensation for services rendered by such individual 

prior to becoming a director of the Company, so long as such compensation is or was in no way 

contingent, conditioned or revocable; and (b) a Public Director may also serve as a director of 

an affiliate of the Company if he or she otherwise meets the requirements set forth in clauses (i) 

through (iv) of this definition. 

Each of the preceding disqualifying circumstances is subject to a one-year look back. Public 

Directors will have an affirmative duty to investigate from time to time, and promptly disclose, 

the existence and nature of any such material relationships to the Board. The Board must make 

such findings of any material relationship upon the nomination or appointment of the proposed 

Public Director and as often as necessary in light of all circumstances relevant to such director, 

but in no case less than annually. 

F. Compensation 

Compensation awarded to Public Directors and other nonexecutive directors shall not be linked 

to the Company’s business performance. 

G. Certification and Compliance 

Each director must become familiar with, and abide by, these Governance Principles. Each 

prospective director and director shall, before taking office, acknowledge his or her receipt and 

understanding of the Governance Principles, as well as upon any publication of a revised set of 

Governance Principles or amendment thereto. In addition, (i) upon request from the Company, 

the director shall certify that the qualification information he/she provided to the Company before 

being elected as a director has not changed materially, and (ii) from time to time the director 

shall provide an updated statement of qualification information that reflects any material 

changes. 

Directors are required to report suspected violations of the Governance Principles or of any 

applicable law, rule or regulation by any director to the Board, the Regulatory Oversight 

Committee or the Chief Compliance Officer (who will subsequently relay any such suspected 

violations to the Board or the Regulatory Oversight Committee, unless such reported violation is 

proven incorrect after a prompt initial review of its merits). The Board or the Regulatory 

Oversight Committee, as applicable, shall determine whether to conduct an investigation and 

what appropriate action should be taken. Directors may consult with the Company’s General 
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Exhibit C: Fitness Standards

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Counsel if there is any doubt as to whether a particular transaction or course of conduct 

complies with or is subject to the Governance Principles. 

H. Self-Review 

The Board shall review its performance and that of its individual directors on an annual basis, 

before the expiration of each one year term of office for the directors. The Board, or a 

committee delegated such responsibility, shall establish criteria for the Board’s evaluation, shall 

conduct the evaluation in accordance with such criteria, and shall make recommendations to 

improve deficiencies. 

I. Removal for Cause 

Any director failing to comply with, or certify compliance with, the Governance Principles, or 

whose conduct otherwise is likely to be prejudicial to the sound and prudent management of the 

Company, may be removed for cause at any time by the affirmative vote of a majority of the 

directors, other than the director whose conduct is at issue, or by the affirmative vote of a 

majority interest of the shareholders, at the annual meeting or at a special meeting called for 

that purpose.