#88274386v4

EXHIBIT L

COMPLIANCE WITH CORE PRINCIPLES

CORE PRINCIPLES FOR SWAP

EXECUTION FACILITIES

GTX SEF LLC APPLICATION RELEVANT GTX SEF LLC MATERIALS

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.

The application (“Application”) of GTX SEF, LLC 

(“GTX”) as a whole satisfies this Core Principle.

Capitalized terms used in this Exhibit L but undefined 

have the meanings ascribed thereto in the GTX SEF,

LLC Rulebook submitted under Exhibit M (the 

“Rulebook”).

The Application and supporting documents.

The Rulebook

GTX SEF, LLC Compliance Manual & Supervisory 

Procedures submitted under Exhibit O (“Compliance 

Manual”)

Board Fitness Standards and Director Composition

submitted under Exhibit C (“Board Fitness 

Standards”)

GTX SEF LLC Operating Agreement submitted 

under Exhibit G (“Operating Agreement”)

GTX SEF LLC Swap Execution Facility User 

Agreement submitted under Exhibit N (“User 

Agreement”)

Rules Prohibiting Trade Practice Violations 

submitted under Exhibit R

Pro Forma Financial Statements submitted under 

Exhibit I

NFA Market Regulation Procedures Manual for 

SEFs and DCMs Offering Swaps Contracts (“NFA 

Manual”)
#88274386v4

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 

(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.

GTX has established rules and procedures reasonably 

designed to ensure compliance with Section 5h of the 

Commodity Exchange Act (the “Act”) and the 

regulations of the Commodity Futures Trading 

Commission (the “Commission” or “CFTC”), 

including rules and procedures to be used in entering 

and executing orders traded on GTX. GTX enforces

compliance with the Rulebook, setting the terms and 

conditions of Swaps traded on GTX, providing for 

impartial access to GTX and establishing trading 

procedures. As stated in Rule 533, at this time, GTX 

does not permit Trades that are subject to mandatory 

clearing nor does GTX permit voluntary clearing of 

Trades.

The front cover of the Rulebook clearly states, and 

Rule 412 repeats, that all Market Participants that 

directly or indirectly effect transactions on GTX, or 

Market Participants accessing or entering any RFQs or 

Orders or submitting any Swap into GTX or executing 

any trade pursuant to the Rulebook thereby agree: (1) 

to be bound by, and comply with, the Rulebook and its 

obligations and Applicable Law; (2) to become subject 

to the jurisdiction of GTX with respect to any and all 

matters arising from, related to, or in connection with, 

the status, actions or omissions of such Market 

Participant; and (3) to assist GTX in complying with 

its legal and regulatory obligations (including through 

cooperation with GTX and the Commission in any 

inquiry, investigation, audit, examination or 

proceeding).

The Rulebook establishes compliance with the rules of 

GTX, including, but not limited to: (1) the terms and 

conditions of any Swaps traded or processed on or 

through GTX; (2) access rules for GTX; (3) trade 

practice rules; and (4) disciplinary rules.

Rulebook (Exhibit M)

Rule 201 (Board)

Rule 204 (Regulatory Oversight Committee)

Rule 205 (Additional Committees and Panels)

Rule 206 (Power of the Board to Review 

Decisions)

Rule 207 (Eligibility)

Rule 208 (Officers)

Rule 209 (Chief Compliance Officer)

Rule 210 (Conflicts of Interest)

Rule 211 (Restrictions on Certain Persons who 

Possess Material, Non-Public Information: 

Improper Use or Disclosure of Material NonPublic Information)

Rule 212 (Emergency Rules)

Rule 213 (Information-Sharing Agreements)

Rule 214 (Regulatory Services Agreement with the 

Regulatory Services Provider)

Rule 301 (Participants)

Rule 302 (Eligibility Criteria for Becoming a 

Participant)

Rule 303 (Authorized Traders)

Rule 304 (Participant Application Process)

Rule 305 (Trading Privileges of a Participant)

Rule 306 (Customers and Accounts)

Rule 307 (Assessments and Fees)

Rule 308 (Authorized Representatives)

Rule 309 (Notices to Participants)

Rule 310 (Communications Between GTX and 

Participants)

Rule 311 (Description of Participant’s Status)

Rule 312 (Dissolution of Participants)

Rule 313 (Withdrawal of a Participant)

Rule 314 (ECP and ISV Access)

Rule 315 (Legal Certainty for GTX Trades)

Rule 401 (Market Participants)

Rule 402 (Duties and Responsibilities of 

Participants)
#88274386v4

The authority of the Compliance Department to 

investigate matters within its jurisdiction, and the 

obligations of each Market Participant to cooperate 

with such investigations, are set forth in Rule 601. 

Chapter 3 sets forth the obligations of Participants and 

Chapter 4 sets forth the obligations of Market 

Participants. 

The Chief Compliance Officer (“CCO”) and the 

Compliance Department, as well as the Regulatory 

Services Provider, which is the National Futures 

Association, will implement GTX’s monitoring, 

surveillance and other enforcement functions. The 

GTX Board of Directors (the “Board”) and the 

Regulatory Oversight Committee (“ROC”) will 

oversee this activity. The CCO is appointed by the 

Board and must meet with the ROC at least quarterly. 

The CCO has sufficient staff and resources to develop 

and enforce rules, policies and procedures necessary to 

fulfill the CCO’s duties to GTX and obligations under 

the Act and Commission Regulations.

The CCO and the Compliance Department monitor 

GTX’s compliance with all regulatory, legal, and 

internal rules, policies and procedures. The ROC 

oversees GTX’s regulatory program on behalf of the 

Board. Under Rule 204, the ROC has the authority, 

among other things, to (1) monitor GTX’s regulatory 

program for sufficiency, effectiveness and 

independence and (2) oversee all facets of GTX’s 

regulatory program, including trade practice and 

market surveillance, audits and examinations and other 

regulatory responsibilities with respect to Market 

Participants.

As stated in Rule 302, to be eligible for admission as a 

Participant of GTX, an applicant must demonstrate to 

GTX that it is an Eligible Contract Participant and that, 

Rule 403 (Required Disclosures to GTX) 

Rule 404 (Inspections by GTX)

Rule 405 (Minimum Financial and Related 

Reporting Requirements)

Rule 406 (Confidentiality of Financial and Other 

Information)

Rule 407 (Authority to Impose Restrictions)

Rule 408 (Disclosure Requirements; Know Your 

Counterparty Requirements)

Rule 409 (Books and Records)

Rule 410 (Recording of Communications)

Rule 411 (Compliance with the Commodity 

Exchange Act)

Rule 412 (Application of GTX Rules and 

Jurisdiction)

Rule 502 (Procedures)

Rule 503 (Business Days and Trading Hours)

Rule 504 (Rule Violations)

Rule 505 (Fraudulent Acts)

Rule 506 (Fictitious, Wash or Non-Competitive 

Transactions)

Rule 508 (Market Disruption and Market 

Manipulation)

Rule 509 (Prohibition of Misstatements)

Rule 510 (Acts Detrimental to Welfare of GTX)

Rule 511 (Adherence to Law)

Rule 512 (Use of Trading Privileges)

Rule 513 (Supervision)

Rule 514 (Misuse of GTX)

Rule 515 (Mishandling of Customer Orders)

Rule 516 (Trade Cancellation and Adjustment)

Rule 517 (Withholding Orders Prohibited)

Rule 518 (Priority of Customers’ Orders) 

Rule 519 (Trading Against Customers’ Orders

Prohibited)

Rule 520 (Disclosing Orders Prohibited)

Rule 521 (Cross-Trading Prohibited)

Rule 522 (Execution of Orders on GTX)
#88274386v4

if the applicant is an Account Manager or is otherwise 

carrying an account for a Customer or entering an 

Order in the name or on behalf of a Client, that such 

Customer or Client is an Eligible Contract Participant. 

Participants and other Market Participants consent to 

GTX’s jurisdiction pursuant to Rule 412.

Chapter 5 of the Rulebook imposes an extensive set of 

restrictions designated to deter abusive, disruptive, or 

fraudulent trade practices. Noncompetitive and unfair 

conduct is prohibited. Prohibited conduct and trade 

practices also include, but are not limited to, fictitious, 

wash, or non-competitive transactions, trading ahead 

of the Customer, trading against Customer Orders, 

disclosing Customer Orders or other abusive practices.

Suspected conduct and trade practices will be 

investigated and prosecuted, as set forth in Chapter 6 

of the Rulebook. Chapter 6 governs disciplinary 

proceedings, including the initiation and adjudication 

proceedings. GTX has appointed individuals to serve 

on separate Review and Hearing Panels. As stated in 

Rule 602 and 603, the Compliance Department will 

initiate an investigation upon the receipt of a request. 

The decision as to whether to initiate an additional 

investigation will be made pursuant to Rule 605. The 

decision as to whether to impose sanctions and, if so, 

the form that such sanctions should take will be made 

under Rule 618. As stated in Rule 618, GTX will 

impose sanctions if any Market Participant is found to 

have violated or attempted to violate a Rule of GTX or 

provision of Applicable Law for which GTX possesses 

disciplinary jurisdiction.

As discussed further with regard to Core Principle 11 

(Antitrust Considerations), GTX will grant access to 

GTX in an impartial manner. 

Rule 523 (Trade Confirmations)

Rule 524 (Order Entry Requirements)

Rule 525 (Position Limits)

Rule 528 (Bunched Orders and Orders Eligible for 

Post-Execution Allocation)

Rule 529 (Orders Entered Prior to GTX Opening)

Rule 530 (Identification of Authorized Traders)

Rule 531 (Block Trades)

Rule 532 (Reporting to DDR)

Rule 533 (Cleared Swaps)

Rule 534 (Non-Cleared Swaps)

Rule 535 (Risk Controls)

Rule 536 (Prime Broker Trades)

Rule 537 (Fee Schedule)

Rule 601 (Disciplinary Rules—General)

Rule 602 (Inquiries and Investigations)

Rule 603 (Reports of Investigations)

Rule 604 (Opportunity to Respond to Investigation 

Report)

Rule 605 (Review of Investigation Reports)

Rule 606 (Warning Letters)

Rule 607 (Notice of Charges)

Rule 608 (Service of Notice of Charges)

Rule 609 (Answer to Notice of Charges)

Rule 610 (Admission or Failure to Deny)

Rule 611 (Denial of Charges and Right to a Hearing)

Rule 612 (Settlements)

Rule 613 (Hearing Panel)

Rule 614 (Convening Hearings of Disciplinary 

Proceedings)

Rule 615 (Respondent Review of Evidence)

Rule 616 (Conducting Hearings of Disciplinary 

Proceedings)

Rule 617 (Decision of Disciplinary Panel)

Rule 618 (Sanctions)

Rule 619 (Costs)
#88274386v4

GTX includes an Order Book and an RFQ system. 

GTX provides Market Participants with the ability to 

place bids and offers on the Order Book or execute 

against a bid or offer placed on the Order Book. Both

firm and indicative bids can be posted on the Order 

Book.

Rule 620 (Right to Appeal Disciplinary Panel 

Decision, Summary Impositions of Fines and Other 

Summary Actions)

Rule 621 (Summary Imposition of Fines)

Rule 622 (Summary Suspensions and Other 

Summary Actions)

Rule 623 (Rights and Responsibilities after 

Suspension or Termination)

Rule 624 (Notice to the Respondent, the Regulatory 

Services Provider and the Public)

Rule 625 (CFTC Review)

Rule 626 (CFTC Review)

Rule 627 (Oral Argument)

Rule 628 (Final Decision)

Rule 701 (Arbitration – General)

Rule 702 (Forum and Arbitration Rules)

Rule 703 (Initiating an Arbitration Claim)

Rule 704 (Claims Relating to Trade Cancellations or 

Price Adjustments)

Rule 705 (Penalties)

Rule 801 (Anti-Money Laundering and AntiTerrorism)

Rule 802 (Gifts and Gratuities)

Rule 803 (Market Data)

Rule 804 (Prohibited Use of Data Collected for 

Regulatory Purposes)

Rule 805 (Confidentiality)

Rule 806 (Extension or Waiver of GTX Rules)

Rule 807 (Effect of Amendment, Repeal or New 

Rule) 

808 (Swap Contract Specifications)

Rule 809 (Timely Publication of Trading 

Information)

Rule 810 (Governing Law)

Compliance Manual (Exhibit O)

Section I (Chief Compliance Officer)

Section III (On-Going Training)
#88274386v4

Section IV (Screening of Third Party Affiliates & 

Agents)

Section V (Communications with the Public)

Section VI (Information Obtained from SEF 

Participants)

Section VIII (Customer Complaints)

Section IX (Business Continuity and Disaster 

Recovery Plan)

Section X (Recordkeeping)

Section XII (Doing Business with Non-

Participants or Participants Whose Membership 

and/or Trading Privileges Have Been Suspended 

or Revoked)

Section XII (Trade Practice Surveillance)

Section XIII (Market Surveillance)

Section XIV (Investigations)

Section XV (Disciplinary Actions)

Section XVI (Financial Surveillance)

Section XVII (Audit Trail Review)

Section XVIII (Dispute Resolution)

Section XIX (Reporting)

Section XX (Proprietary Trading)

Section XXIV (Secondment Agreement)

Section XXV (Conflicts of Interest)

Section XXVI (SEF Information to General 

Public)

Section XXVII (SEF Financial Information)

Section XXVIII (Chief Compliance Officer 

Annual Compliance Report)

Section XXIX (Financial Reporting to the 

Commission)

Section XXX (Providing Information to the 

Commission)

Section XXXI (Confirmations)

Disciplinary Protocol (Exhibit P)

Trading System (Exhibit Q)
#88274386v4

CORE PRINCIPLES FOR SWAP

EXECUTION FACILITIES

GTX SEF LLC APPLICATION RELEVANT GTX SEF LLC MATERIALS

User Agreement (Exhibit N)

Section 2 (User’s Obligations and Consent to the 

Jurisdiction of GTX SEF)

Section 4 (Eligible Contract Participant)

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

Swaps on GTX will initially be limited to foreign 

exchange non-deliverable forwards (“NDFs”).

Since an NDF involves no exchange of the underlying 

currency, and NDFs are settled in a lead currency such 

as the U.S. dollar or Euro, it is very difficult, if not 

impossible, to manipulate NDF contracts. In addition, 

any cash settled Swaps will be settled based upon a 

reference price that is publicly available on a timely 

basis. GTX will not list Swaps that will be physically 

settled.

At this time, as stated in Rule 533, GTX does not 

permit trades that are subject to mandatory clearing 

and does not permit voluntary clearing of trades.

Rulebook (Exhibit M)

Rule 505 (Fraudulent Acts)

Rule 508 (Market Disruption and Market 

Manipulation)

Rule 533 (Cleared Swaps)

Compliance Manual (Exhibit O)

Section XII (Trade Practice Surveillance)

Section XIII (Market Surveillance)

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, 

Pursuant to Rule 214, GTX has chosen to contract with

National Futures Association, a Regulatory Services 

Provider, to assist GTX in monitoring trading on GTX 

in order to prevent manipulation, price distortion, and 

disruptions of the delivery or cash settlement process 

through surveillance, compliance and disciplinary 

practices and procedures, including through real-time 

monitoring of trading and comprehensive trade 

reconstruction.

Chapter 5 of the Rulebook specifies trading procedures 

to be followed by Participants when entering and 

executing Orders traded or posted on or subject to the 

rules of GTX.

Rulebook (Exhibit M)

Rule 214 (Regulatory Services Agreement with the 

Regulatory Services Provider)

Rule 502 (Procedures)

Rule 503 (Business Days and Trading Hours)

Rule 504 (Rule Violations)

Rule 505 (Fraudulent Acts)

Rule 506 (Fictitious, Wash or Non-Competitive 

Transactions)

Rule 508 (Market Disruption and Market

Manipulation)

Rule 509 (Prohibition of Misstatements)

Rule 510 (Acts Detrimental to Welfare of GTX)

Rule 512 (Use of Trading Privileges)

Rule 514 (Misuse of GTX)

Rule 515 (Mishandling of Customer Orders)
#88274386v4

CORE PRINCIPLES FOR SWAP

EXECUTION FACILITIES

GTX SEF LLC APPLICATION RELEVANT GTX SEF LLC MATERIALS

compliance, and disciplinary practices 

and procedures, including methods for 

conducting real-time monitoring of 

trading and comprehensive and accurate 

trade reconstructions.

GTX includes an Order Book and an RFQ system. 

GTX provides Participants with the ability to place 

bids and offers on the Order Book through a 

centralized electronic screen accessible to all Market 

Participants who have access to GTX.

Chapter 5 further establishes procedures for entering 

and executing Orders. Rule 502 authorizes GTX to 

adopt broad procedures relating to transactions. Rule 

503 establishes GTX’s business days and trading 

hours. 

Rule 523 establishes the process through which Swaps 

executed on GTX will be confirmed. Rule 533 notes 

that GTX does not permit (1) Trades that are subject to 

mandatory clearing and (2) voluntary clearing of 

Trades. 

As stated in Rule 209, the Chief Compliance Officer 

and the Compliance Department shall monitor GTX’s 

regulatory program for sufficiency, effectiveness and 

independence and to oversee all facets of GTX’s 

regulatory program. 

Rule 516 (Trade Cancellation and Adjustment)

Rule 517 (Withholding Orders Prohibited)

Rule 518 (Priority of Customers’ Orders) 

Rule 519 (Trading Against Customers’ Orders

Prohibited)

Rule 520 (Disclosing Orders Prohibited)

Rule 521 (Cross-Trading Prohibited)

Rule 522 (Execution of Orders on GTX)

Rule 524 (Order Entry Requirements)

Rule 525 (Position Limits)

Rule 528 (Bunched Orders and Orders Eligible for 

Post-Execution Allocation)

Rule 529 (Orders Entered Prior to GTX Opening)

Rule 530 (Identification of Authorized Traders)

Rule 531 (Block Trades)

Rule 533 (Cleared Swaps)

Rule 534 (Non-Cleared Swaps)

Rule 535 (Risk Controls)

Rule 536 (Prime Broker Trades)

Compliance Manual (Exhibit O)

Section XII (Trade Practice Surveillance)

Section XIII (Market Surveillance)

Rules Prohibiting Trade Practice Violations 

(Exhibit R)

NFA Manual

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; 

GTX’s Rulebook sets forth the requirements of 

Participants to maintain books and records and to 

permit inspection and visitation by duly authorized 

representatives of the Commission.

It is GTX’s policy to respond promptly and 

completely, through GTX’s Compliance Department, 

Rulebook (Exhibit M)

Rule 209 (Chief Compliance Officer)

Rule 212 (Emergency Rules)

Rule 213 (Information-Sharing Agreements)

Rule 214 (Regulatory Services Agreement with the 

Regulatory Services Provider)

Rule 301 (Participants)

Rule 401 (Market Participants) 
#88274386v4

CORE PRINCIPLES FOR SWAP

EXECUTION FACILITIES

GTX SEF LLC APPLICATION RELEVANT GTX SEF LLC MATERIALS

(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.

to any proper regulatory inquiry or request for 

documents.

In addition, under Rule 213, GTX may enter into 

information sharing agreements or other arrangements 

or procedures to coordinate surveillance with other 

markets on which contracts or financial instruments 

related to the contracts trade. As part of these 

agreements, GTX may, in part: (i) provide market 

surveillance reports to other SEFs; (ii) share 

information and documents concerning current and 

former Participants with other markets; (iii) share 

information and documents concerning ongoing and 

completed investigations with other markets; and/or 

(iv) require its current or former Participants to 

provide information and documents to GTX at the 

request of other markets with which GTX has an 

information sharing agreement or other arrangements 

or procedures.

As stated in Rule 213, GTX will enter into any 

international information sharing agreement as 

required from time to time by the Commission.

Rule 402 (Duties and Responsibilities of Market 

Participants)

Rule 403 (Required Disclosures to GTX)

Rule 404 (Inspections by GTX)

Rule 406 (Confidentiality of Financial and Other 

Information)

Rule 408 (Disclosure Requirements; Know Your 

Counterparty Requirements)

Rule 409 (Books and Records)

Rule 410 (Recording of Communications)

Rule 411 (Compliance with the Commodity 

Exchange Act)

Rule 523 (Trade Confirmations)

Rule 524 (Order Entry Requirements)

Rule 528 (Bunched Orders and Orders Eligible for 

Post-Execution Allocation)

Rule 626 (CFTC Review)

Rule 803 (Market Data)

Rule 804 (Prohibited Use of Data Collected for 

Regulatory Purposes)

Compliance Manual (Exhibit O)

Section VI (Information Obtained from SEF 

Participants)

Section VII (Disclosures to SEF Participants)

Section X (Recordkeeping)

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, 

Rule 525 provides GTX with the authority to adopt, as 

is necessary and appropriate, position limits or position 

accountability levels for speculators for each of the 

contracts of the GTX Platform, in order to reduce the 

potential threat of market manipulation or congestion.

Rulebook (Exhibit M)

Rule 212 (Emergency Rules)

Rule 525 (Position Limits)

Compliance Manual (Exhibit O)

Section XII (Trade Practice Surveillance)

Section XIII (Market Surveillance)

Appendix D (Core Principle 6)
#88274386v4

CORE PRINCIPLES FOR SWAP

EXECUTION FACILITIES

GTX SEF LLC APPLICATION RELEVANT GTX SEF LLC MATERIALS

position limitations or position 

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.

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

Under Rule 302, GTX requires that each Participant be 

an ECP at the time of entering into any transaction on 

GTX. Each Participant, Authorized Trader or 

Customer that enters into Swaps must undergo such 

credit checks and provide such credit information as 

GTX may require. As stated in Rule 302, each 

Participant must be of good reputation and business 

integrity and maintain adequate financial resources and 

credit, among other requirements designed to ensure 

the financial integrity of GTX. Participants registered 

with the CFTC are required to comply with the 

minimum financial requirements and reporting 

obligations of the CFTC. Such Participants are 

required to concurrently provide GTX with copies of 

any reports required to be filed with a self-regulatory 

organization or the CFTC.

As noted in Rule 302, Participants are required to 

notify GTX when there are material changes in the 

information submitted to GTX, including status as an 

ECP. Market Participants must notify GTX upon 

becoming the subject of a bankruptcy proceeding or 

Rulebook (Exhibit M)

Rule 204 (Regulatory Oversight Committee)

Rule 209 (Chief Compliance Officer)

Rule 301 (Participants)

Rule 302 (Eligibility Criteria for Becoming a 

Participant)

Rule 306 (Customers and Accounts)

Rule 314 (ECP and ISV Access)

Rule 403 (Required Disclosures to GTX)

Rule 405 (Minimum Financial and Related 

Reporting Requirements)

Rule 407 (Authority to Impose Restrictions)

Rule 408 (Disclosure Requirements; Know Your

Counterparty Requirements)

Compliance Manual (Exhibit O)

Section VI (Information Obtained From SEF 

Participants)

Section XVI (Financial Surveillance)

User Agreement (Exhibit N)
#88274386v4

CORE PRINCIPLES FOR SWAP

EXECUTION FACILITIES

GTX SEF LLC APPLICATION RELEVANT GTX SEF LLC MATERIALS

upon being unable to meet any financial obligation as 

it becomes due.

Section 2 (User’s Obligations and Consent to the 

Jurisdiction of GTX SEF)

Section 4 (Eligible Contract Participant)

Core Principle 8 – Emergency 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.

Under Rule 212, GTX sets forth clear procedures and 

guidelines for decision making regarding Emergency 

intervention in the market, including procedures and 

guidelines to avoid conflicts of interest while carrying 

out such decision making.

The measures available to GTX in the case of an 

Emergency include pausing, halting, suspending or 

curtailing trading or limiting trading to liquidation 

only (in whole or in part); extending or shortening the 

last trading date for Swaps; providing alternative 

settlement mechanisms; ordering the liquidation of 

Swaps, the fixing of a settlement price, or the 

reduction of positions; temporarily modifying or 

suspending any provision of the Rulebook; imposing 

or modifying price limits; imposing, modifying or 

reducing position limits; and/or ordering the 

liquidation or transfer of an open position in any Swap 

or the reduction of such positions.

GTX will notify the CFTC prior to implementing, 

modifying or terminating an Emergency Rule and will 

comprehensively document the decision making 

process related to any action in response to an 

Emergency.

Rulebook (Exhibit M)

Rule 210 (Conflicts of Interest)

Rule 212 (Emergency Rules)

Rule 315 (Legal Certainty for GTX Trades)

Rule 535 (Risk Controls)

Operating Agreement (Exhibit G)

Section 3.1(e)

Compliance Manual (Exhibit O)

Section IX (Business Continuity and Disaster 

Recovery Plan)

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. 

As stated in Rule 532, GTX will timely transmit Swap 

transaction and pricing data to a registered swap data 

repository that accepts Swap data for Swaps traded on 

GTX. Currently, GTX uses DTCC Data Repository as 

its swap data repository for all Swaps traded on GTX.

A trade audit trail is preserved by GTX and National 

Futures Association as its Regulatory Service Provider 

Rulebook (Exhibit M)

Rule 214 (Regulatory Services Agreement with 

the Regulatory Services Provider)

Rule 409 (Recordkeeping)

Rule 531 (Block Trades)

Rule 532 (Reporting to DDR)

Rule 809 (Timely Publication of Trading

Information)
#88274386v4

CORE PRINCIPLES FOR SWAP

EXECUTION FACILITIES

GTX SEF LLC APPLICATION RELEVANT GTX SEF LLC MATERIALS

The swap execution facility shall be 

required to have the capacity to 

electronically capture and transmit trade 

information with respect to transactions 

executed on the facility.

in accordance with applicable CFTC rules and Rule 

409. Compliance Manual (Exhibit O)

Section X (Recordkeeping)

Section XIII (Market Surveillance)

Section XIX (Reporting)

NFA Manual

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 5 years; (2) 

Report to the Commission, in a form 

and manner acceptable to the 

Commission, such 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 Exchange 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.

With the assistance of National Futures Association as 

its Regulatory Services Provider, GTX will maintain 

records of all activities related to its business for a 

period of five (5) years, in accordance with 

Commission Regulations and Rule 409. Each 

Participant is also required to maintain all requisite 

books and records in accordance with Commission 

Regulations. As stated in Rule 409, all such records 

will be open to inspection by the Commission, the 

Department of Justice or any Governmental Body, 

regulator or Self-Regulatory Organization with 

jurisdiction over GTX, and their respective Authorized 

Representatives. GTX will respond promptly and 

completely, through the Compliance Department, to 

any proper regulatory inquiry or request for documents 

from the Commission, NFA, or other regulatory or law 

enforcement agency.

Rulebook (Exhibit M)

Rule 204 (Regulatory Oversight Committee)

Rule 209 (Chief Compliance Officer)

Rule 214 (Regulatory Services Agreement with 

the Regulatory Services Provider)

Rule 404 (Inspections by GTX)

Rule 405 (Minimum Financial and Related 

Reporting Requirements)

Rule 409 (Books and Records)

Rule 410 (Recording of Communications)

Rule 411 (Compliance with Commodity Exchange 

Act)

Rule 502 (Procedures)

Rule 517 (Withholding Orders Prohibited)

Rule 528 (Bunched Orders and Orders Eligible for 

Post-Execution Allocation)

Rule 532 (Reporting to DDR)

Rule 621 (Summary Imposition of Fines)

Rule 622 (Summary Suspensions and Other 

Summary Actions)

Compliance Manual (Exhibit O)

Section X (Recordkeeping)

Section XVII (Audit Trail Review)

Section XIX (Reporting)

Section XXIX (Financial Reporting to the 

Commission)

NFA Manual
#88274386v4

CORE PRINCIPLES FOR SWAP

EXECUTION FACILITIES

GTX SEF LLC APPLICATION RELEVANT GTX SEF LLC MATERIALS

Core Principle 11 – Antitrust 

Considerations

Unless necessary or appropriate to 

achieve the purposes of this Act, the 

swap execution facility shall not—

(A) adopt any rules or taking any actions 

that result in any unreasonable restraint 

of trade; or (B) impose any material 

anticompetitive burden on trading or 

clearing.

The Rulebook and policies have been designed to 

avoid any unreasonable restraints on trade or the 

imposition of any material anti-competitive burden on 

trading. 

GTX will not require Participants to acquire an equity 

interest in GTX and GTX provides Participants, 

Customers and independent software vendors with 

impartial access to GTX, as set forth in Rule 314. 

Rulebook (Exhibit M)

Rule 209 (Chief Compliance Officer)

Rule 314 (ECP and ISV Access)

Rule 504 (Rule Violations)

Rule 511 (Adherence to Law)

Operating Agreement (Exhibit G)

Exhibit B, Section 8 (Antitrust)

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.

The Operating Agreement and Rulebook minimize 

conflicts of interest in decision making processes and 

contain methods to ascertain the presence of conflicts 

of interest and to make decisions in the event of such a 

conflict. As stated under Rule 210, no member of the 

Board, member of any committee, officer or other 

person authorized to exercise authority on behalf of 

GTX may knowingly participate in any deliberations 

or vote if such person has a “material conflict of 

interest” between his or her position with GTX and 

such person’s personal interests.

The Rulebook, and Rule 210 in particular, contains 

rules that address conflicts of interest in decision 

making, methods to ascertain the presence of conflicts 

of interest and to make decisions in the event of such a 

conflict. In addition, the Operating Agreement and 

Rulebook contain limitations on the use and disclosure 

of material non-public information by Board members 

and GTX employees gained through performance of 

their duties.

GTX has the ROC that oversees GTX’s regulatory 

program on behalf of the Board. As stated in Rule 

204, the ROC makes recommendations to the Board 

that will, in its judgment, be best to promote the 

Board Fitness Standards (Exhibit C)

Rulebook (Exhibit M)

Rule 204 (Regulatory Oversight Committee)

Rule 209(e) (Chief Compliance Officer)

Rule 210 (Conflicts of Interest)

Rule 211 (Restrictions on Certain Persons who 

Possess Material, Non- Public Information: 

Improper Use or Disclosure of Material Non-Public 

Information)

Rule 518 (Priority of Customers’ Orders)

Rule 519 (Trading Against Customers’ Orders 

Prohibited)

Rule 613 (Hearing Panel)

Compliance Manual (Exhibit O)

Section XXV (Conflicts of Interest)

Operating Agreement (Exhibit G)

Exhibit B (Directors’ Conflicts of Interest Policy and 

Code of Ethics)
#88274386v4

CORE PRINCIPLES FOR SWAP

EXECUTION FACILITIES

GTX SEF LLC APPLICATION RELEVANT GTX SEF LLC MATERIALS

interests of GTX. The ROC assists GTX in minimizing 

actual and potential conflicts of interest.

Pursuant to Rule 613, a Respondent may seek to 

disqualify any individual named to a Hearing Panel for 

cause, including without limitation, if the member has 

a direct financial, personal or other interest in the 

matter under consideration.

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 1-year period, as 

calculated on a rolling basis.

As stated under Section XXVII of the Compliance 

Manual, GTX will maintain adequate financial, 

operational, and managerial resources to discharge 

each responsibility of GTX. Specifically, GTX will 

maintain assets that exceed the total amount that would 

enable GTX to cover its operating costs for a period of 

at least one year, calculated on a rolling basis, with six 

months of operating costs being in liquid assets. If any 

portion of GTX’s financial resources is not sufficiently 

liquid, capital infusions would be provided by GTX’s 

parent group for the purpose of meeting the

requirement to have six months of operating costs in 

liquid assets.

Pro Forma Financial Statements (Exhibit I)

Operating Agreement (Exhibit G)

Section 2.6 (SEF Financial Resources)

Compliance Manual (Exhibit O)

Section XXVII (SEF Financial Information)

Section XXIX (Financial Reporting to the 

Commission)

Core Principle 14 – System Safeguards

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—

(i) are reliable and secure; and (ii) have 

adequate scalable capacity;

(B) establish and maintain emergency 

procedures, backup facilities, and a plan 

for disaster recovery that allow for—

As a subsidiary of Gain Capital Holdings, Inc. 

(“GCH”), GTX has adopted GCH’s policies and 

procedures regarding the establishment of system 

safeguards. As stated under Section IX of the 

Compliance Manual, GTX has adopted its own

Business Continuity and Disaster Recovery Plan.

The GCH system safeguard policies and procedures 

address risk management, technology testing and 

maintenance, information security, system safeguards 

and security tools, security testing, security incident 

handling procedures and management processes, 

quality assurance and test trades. GCH conducts 

Compliance Manual (Exhibit O)

Section IX (Business Continuity and Disaster 

Recovery Plan)

Rulebook (Exhibit M)

Rule 209 (Chief Compliance Officer)

Rule 212 (Emergency Rules)

Rule 409 (Books and Records)

Rule 535 (Risk Controls)

Technology Questionnaire (Exhibit V)

Business Continuity and Disaster Recovery Plan
#88274386v4

CORE PRINCIPLES FOR SWAP

EXECUTION FACILITIES

GTX SEF LLC APPLICATION RELEVANT GTX SEF LLC MATERIALS

the timely recovery and resumption of 

operations; and (ii) 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— (i) order processing and 

trade matching; (ii) price reporting; (iii)

market surveillance and (iv) maintenance 

of a comprehensive and accurate audit 

trail.

regular, periodic testing and review of GTX’s 

automated systems.

The Business Continuity and Disaster Recovery Plan 

is designed to ensure that GTX is able to resume its 

operations and fulfill its responsibilities and 

obligations during the next business day following any 

disruption of its operations through the use of alternate 

GCH sites. GCH conducts regular, periodic testing 

and review of the Business Continuity and Disaster 

Recovery Plan.

GTX conducts system capacity tests to verify that 

usage of volume of GTX will not cause response time 

of the host computers to fall below an acceptable level. 

GTX reviews and tests the system periodically to 

estimate and plan for future system capacity, identify 

potential weak points and reduce the risk of system 

failures and threats to system integrity.

GTX has also established and maintains emergency 

procedures, backup facilities, and a plan for disaster 

recovery that allows for the timely recovery and 

resumption of operations and the fulfillment of the 

responsibilities and obligations of GTX.

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 

GTX has designated a CCO pursuant to Rule 209. As 

stated under Rule 209, the CCO reports directly to the 

Board of Directors and meets at least annually with the 

Board. Rule 209 states that the CCO is responsible for 

ensuring compliance with GTX Rules and policies and 

procedures, and, as stated in Section XXVIII of the 

Compliance Manual, will prepare and file annual 

compliance reports with the Commission.

Organization Chart (Exhibit D)

Rulebook (Exhibit M)

Rule 208 (Officers)

Rule 209 (Chief Compliance Officer)

Rule 210 (Conflicts of Interest)

Rule 604 (Opportunity to Respond to Investigation 

Report)

Rule 612 (Settlements)

Rule 613 (Hearing Panel)
#88274386v4

CORE PRINCIPLES FOR SWAP

EXECUTION FACILITIES

GTX SEF LLC APPLICATION RELEVANT GTX SEF LLC MATERIALS

facility, a body performing a function 

similar to that of a board, or the senior 

officer of the facility, resolve 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. In 

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 

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. 

Rule 614 (Convening Hearings of Disciplinary 

Proceedings)

Rule 620 (Right to Appeal Disciplinary Panel 

Decision, Summary Impositions of Fines and Other 

Summary Actions)

Rule 621 (Summary Imposition of Fines)

Rule 622 (Summary Suspensions and Other 

Summary Actions)

Rule 802 (Gifts and Gratuities)

Rule 806 (Extension or Waiver of GTX Rules)

Compliance Manual (Exhibit O)

General

Section I (Chief Compliance Officer)

Section III (On-Going Training)

Section VIII (Customer Complaints)

Section XXV (Conflicts of Interest)

Section XXVIII (Chief Compliance Officer Annual 

Report)

Operating Agreement (Exhibit G)

Section 3.5(j)

Exhibit B(I)(3) (Procedures and Guidelines)

Exhibit B(I)(2) (Violations)

Exhibit B(I)(4) (Taking Company Business 

Opportunities)

Exhibit B(II)(3) (Compliance)

Exhibit B(II)(7) (Global Laws and Regulations)

Exhibit B(II)(9) (Document Retention)

Exhibit B(II)(10) (Gifts and Entertainment)

Exhibit B(II)(11) (Fees; Fee Rebates)

Exhibit B(II)(12) (Political Contributions and Public 

Office)

Exhibit B(II)(13) (Confidentiality)

Exhibit B(II)(14) (Waivers and Exceptions)
#88274386v4

CORE PRINCIPLES FOR SWAP

EXECUTION FACILITIES

GTX SEF LLC APPLICATION RELEVANT GTX SEF LLC MATERIALS

(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 

section 5h of the Act; and (ii) Include in 

the report a certification that, under 

penalty of law, the report is accurate and 

complete.

Exhibit B(II)(15) (Compliance Standards and 

Procedures)

Technology Questionnaire (Exhibit V)