AMENDED EXHIBIT L

SWAP EXECUTION FACILITY APPLICATION FOR REGISTRATION

COMPLIANCE WITH CORE PRINCIPLES1

SWAP 

EXECUTION 

FACILITY CORE 

PRINCIPLE

ELEMENTS OF SWAP 

EXECUTION FACILITY CORE 

PRINCIPLE

JAVELIN SEF APPLICATION RELEVANT JAVELIN SEF 

APPLICATION 

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) All 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.

See generally Javelin SEF’s Swap Execution Facility Application 

for Registration dated August 2, 2013 and the Exhibits thereto 

(the “Application”). 

All materials submitted with the 

Application.

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-(i) the terms and 

Javelin SEF has established rules and procedures reasonably

designed to ensure compliance with section 5(h) of the

Commodity Exchange Act ("CEA") and the rules of the

Commodity Futures Trading Commission ("CFTC") including

Rulebook – Exhibit M

Rule 203 - Emergency Authority

Rule 402 - Compliance with the 

Rules

 

1 References herein to a “Rule” refer to the applicable rule in the rulebook submitted as Exhibit M (the “Rulebook”). Terms used but not defined herein have the meanings assigned 

to them in the Rulebook.
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conditions of the swaps traded or 

processed on or through the swap 

execution facility; and (ii) 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-

(i) to provide market participants with 

impartial access to the market; and 

(ii) to capture information that may be 

used in establishing whether rule 

violations have occurred;

procedures to be used in entering and executing orders traded on 

Javelin SEF. Javelin SEF fulfills its compliance with the CEA, 

CFTC rules and Javelin SEF rules through oversight by its 

Regulatory Oversight Committee ("ROC"), Chief Compliance 

Officer ("CCO") and Compliance Department.

The Javelin SEF Compliance Department is under the supervision 

of the CCO. The CCO and the Compliance Department monitor 

Javelin SEF's compliance with all regulatory, legal, and internal 

rules, policies and procedures. The CCO is appointed by the 

Javelin SEF Board. The CCO has available to her the resources to 

develop and enforce policies and procedures necessary to fulfill

her duties as CCO and as required under CFTC regulations. The 

ROC oversees Javelin SEF's regulatory program on behalf of the 

Board. The ROC has the authority, among other things, to (1) 

monitor the Javelin SEF's regulatory program for sufficiency, 

effectiveness and independence and (2) oversee all facets of 

Javelin SEF's regulatory program, including trade practice and 

market surveillance with respect to Participants. The CCO is 

required to meet with the ROC at least quarterly.

The Compliance Department may perform or the Javelin SEF 

may contract with a regulatory service provider to perform certain 

surveillance, investigative, and regulatory functions under Javelin 

SEF Rules. Javelin SEF retains ultimate decision-making 

responsibility with respect to any functions contracted to any 

regulatory service provider. The Compliance Department or 

regulatory service provider may review Javelin SEF trades on a 

routine basis to determine whether suspicious activity relating to 

Compliance Manual - Exhibit 

O

Generally

Javelin SEF Application

Participation Agreement, 

Section 1

Rulebook – Exhibit M

Rule 216 - Regulatory Oversight 

Committee

Rule 217 - Disciplinary 

Committee

Rule 312 - Suspension and 

Termination of Participant 

Status

Rule 509 - Real-Time Market 

Monitoring

Chapter 7 - Business Conduct
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Javelin SEF's trading standards exists. Initially, Javelin SEF 

does not intend to use a regulatory service provider.

The Compliance Department will be responsible for monitoring 

overall activity on its market on a real-time basis. The 

Compliance Department will collect and evaluate data on trading 

activity, tracking specific traders, and monitoring pricing and 

volume.

The Compliance Department, directly or indirectly through a 

regulatory service provider, will be primarily responsible for 

performing most of the investigatory work relating to trade 

practice and market surveillance inquiries and investigations. The 

Compliance Department may conduct preliminary inquiries of 

potential irregularities or clearing exceptions and request 

information from Participants and Clearing Houses. 

If, after the preliminary inquiry, the Compliance Department has 

reason to believe that further investigation is required, the 

Compliance Department shall open a case matter and conduct 

further investigations. In conducting this investigation, the 

Compliance Department may engage in certain activities, 

including but not limited to the following (1) request documents; 

(2) conduct trader interviews, which at the Compliance 

Department’s discretion, may be conducted under oath; (3) 

review other trade activity; and (4) gather any additional 

information that it deems necessary.
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In addition, the Compliance Department will also conduct 

inquiries and investigations relating to real-time surveillance, 

trade practice and market surveillance.

The Compliance Department's investigations are governed by 

Chapter 7 of the Rule book. Chapter 7 governs disciplinary 

proceedings, including the initiation and adjudication 

proceedings. The ROC will appoint individuals to serve on a 

Disciplinary Panel.

Javelin SEF has the ability to actively monitor trading activity 

and Participants in order to prevent market manipulation, and has

requirements to ensure that Participants maintain and make

available information regarding their trading activity. After 

consultation with the Chief Compliance Officer, the Regulatory 

Oversight Committee, may revoke, suspend, limit, condition, 

restrict, or qualify the trading privileges of any Participant as 

result of (i) their statutory disqualification, (ii) the reasonable 

belief that immediate action is required to protect the public or 

Participants; or (iii) the nonpayment of disciplinary fines 

(“Summary Proceeding”). 

The Scila Surveillance System (“Scila”), a product of Cinnober 

Financial Technology AB (“Cinnober”) is an automated trade 

surveillance system that is capable of detecting potential trade 

practice violations. Javelin SEF shall load and process orders and 

trades into Scila no later than 24 hours after completion of the 

trading day. Scila has the ability to detect and flag specific trade 

execution patterns and trade anomalies; compute, retain, and 

compare trading statistics; compute trade gains, losses, and swap 
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equivalent positions; reconstruct the sequence of market activity; 

perform market analysis; and support system users to perform indepth analysis of trade related data. An over view of Scila is 

provided in Exhibit 1 to the contract between Javelin SEF and 

Cinnober, effective August 1, 2013. 

A swap execution facility shall:

(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

Chapter 5 of the Rulebook establishes 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.

Rulebook – Exhibit M

Chapter 5 – Trading Practices 

and SDR Reporting

A swap execution facility shall:

(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 

CEA, the swap dealer or major swap 

participant shall be responsible for 

compliance with the mandatory 

trading requirement under section 

2(h)(8) of the CEA.

Rule 601 provides that all Trades executed on Javelin SEF shall 

be subject to the rules, policies and procedures of such 

Clearinghouse, the Javelin SEF Rules and applicable law. 

Clearing Members registered with Javelin SEF shall provide such 

clearing services as are necessary to process and guarantee Trades 

as provided by Chapter 6 of the Javelin SEF Rulebook. Javelin 

SEF shall route Matched Orders to the Clearinghouse in a manner 

acceptable to the Clearinghouse for the purposes of facilitating 

the processing of Matched Orders for clearing in a prompt, 

efficient and accurate manner, in compliance with applicable law.

Rulebook – Exhibit M

Rule 601 - General

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.

Chapter 5 of the Rulebook establishes rules regarding trading 

practices and SDR reporting such that only swaps that are not 

readily susceptible to manipulation are trading. Javelin SEF has 

established Emergency Rules to maintain markets with fair 

Rulebook – Exhibit M

Rule 203 - Emergency Authority

Chapter 5 – Trading Practices 

and SDR Reporting
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and orderly trading and to prevent or address manipulation 

or disruptive trading practices. 

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-(i) trading 

procedures to be used in entering and 

executing orders traded on or through 

the facilities of the swap execution 

facility; and (ii) procedures for trade 

processing of swaps on or through the 

facilities of the swap execution 

facility; and

Chapter 5 of the Rulebook establishes rules regarding (i) trading 

procedures to be used in entering and executing orders traded on 

or through the facilities of the swap execution facility; and (ii) 

procedures for trade processing of swaps on or through the 

facilities of the swap execution facility

Rulebook – Exhibit M

Chapter 5 – Trading Practices 

and SDR Reporting

The swap execution facility shall-

(B) monitor trading in swaps to 

prevent manipulation, price distortion, 

and disruptions of the delivery or cash 

settlement process through 

surveillance, compliance, and 

disciplinary practices and procedures, 

including methods for conducting 

real-time monitoring of trading and 

comprehensive and accurate trade 

reconstructions.

The Compliance Department conducts real-time monitoring of 

trading on Javelin SEF for compliance purposes to prevent 

manipulation, price distortion and disruptions of the settlement 

process.

Javelin SEF will also maintain both a trade practice and market 

surveillance program to monitor for abuses, including 

manipulation; and, has disciplinary procedures for violations of 

its rules.

The Scila Surveillance System (“Scila”), a product of Cinnober 

Financial Technology AB (“Cinnober”) is an automated trade 

surveillance system that is capable of detecting potential trade 

practice violations. Javelin SEF shall load and process orders and 

trades into Scila no later than 24 hours after completion of the 

trading day. Scila has the ability to detect and flag specific trade 

Rulebook – Exhibit M

Rule 509 - Real-Time Market 

Monitoring

Compliance Manual - Exhibit 

O

Chapter VI - Trade Practice and 

Market Surveillance
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execution patterns and trade anomalies; compute, retain, and 

compare trading statistics; compute trade gains, losses, and swap 

equivalent positions; reconstruct the sequence of market activity; 

perform market analysis; and support system users to perform indepth analysis of trade related data. An over view of Scila is 

provided in Exhibit 1 to the contract between Javelin SEF and 

Cinnober, effective August 1, 2013. 

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 this 

section;

Javelin SEF's Rulebook sets forth the requirements of Participants 

to maintain books and records, and permitting inspection and 

visitation by duly authorized representatives of the CFTC.

Rulebook – Exhibit M

Rule 404 - Required Records

Rule 712 - Testimony and 

Production of Documents

Rule 702 - Inquiries and 

Investigations

The swap execution facility shall-

(B) provide the information to the 

Commission on request; 

Javelin SEF shall provide the information to the Commission on 

request.

Rulebook – Exhibit M

Rule 905 - Books and Records 

The swap execution facility shall-

(C) have the capacity to carry out 

such international informationsharing agreements as the 

Commission may require.

Javelin SEF may enter into information-sharing agreements and 

other arrangements and procedures to coordinate surveillance 

with other markets on which contracts or financial instruments 

related to the contracts trade. As part of these agreements, Javelin 

SEF 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 Javelin SEF 

at the request of other markets with which Javelin SEF has an 

Rulebook – Exhibit M

Rule 903 - Information Sharing 

Agreements
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information-sharing agreement or other arrangements or 

procedures.

Javelin SEF may enter into an information-sharing 

arrangement with any Person or body (including, without 

limitation, the CFTC, the SEC, or any government 

authority, self-regulatory organization, exchange, market, 

clearing organization or foreign regulatory authority) if 

Javelin SEF (i) believes that such Person or body exercises a 

legal or regulatory function under any law or regulation, or 

a function comprising or associated with the enforcement of 

a legal or regulatory function, or (ii) considers such 

arrangement to be in furtherance of Javelin SEF’s purpose 

or duties under applicable law. 

Javelin SEF may disclose to any Person or body information 

concerning or associated with a Participant or other Person 

that Javelin SEF believes is necessary and appropriate in 

exercising a legal or regulatory function (including, without 

limitation, information concerning any aspect of the 

business of Javelin SEF) whether or not a formal 

arrangement governing the disclosure exists or a request for 

information was made.

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 

To reduce the potential threat of market manipulation or 

congestion, especially during trading in the delivery month, 

Javelin SEF may adopt for each of the contracts of the facility, as 

is necessary and appropriate, position limitations or position 

accountability for speculators. 

Rulebook - Exhibit M

Rule 517 - Position Limits

Rule 518 - Position Limit 

Exemptions

Rule 519 - Position 

Accountability 
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adopt for each of the contracts of the 

facility, as is necessary and 

appropriate, 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 6a(a) of the CEA, 

the swap execution facility shall-(i) 

set its position limitation at a level no 

higher than the Commission 

limitation; and (ii) 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.

As provided by Rule 517, Javelin SEF may set position limits 

for any transactions and except pursuant to any exception 

granted by Javelin SEF pursuant to Rule 518 of the Javelin 

SEF Rules, no covered person that executes transactions on 

Javelin SEF may own or control a position in excess of such 

position limit. Such position limits will be set at a level no 

higher than the Commission limitation.

Javelin SEF may also establish a position accountability 

level for any transaction. Any covered person who owns or 

controls a position that exceeds the position accountability 

level in a transaction shall provide, upon the request of 

Javelin SEF, information to Javelin SEF regarding the 

nature of the position, trading strategy or hedging activities, 

as applicable. Javelin SEF has the right to direct a covered 

person not to increase the size of a position that is subject to 

position accountability levels. 

Because the products permitted to be transacted on Javelin 

SEF initially will not include transactions in physical 

commodities, Javelin SEF does not initially expect to 

establish position limits for any contract.

Rulebook - Exhibit M

Rule 517 - Position Limits

Rule 518 - Position Limit 

Exemptions

Rule 519 - Position 

Accountability 
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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 

CEA.

Javelin SEF has established various 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 

CEA as follows:

Chapter 6 requires all trades executed on Javelin SEF to be routed 

through the Clearinghouse designated by each Participant at the 

time of order entry. Rule 603 establishes criteria for registering as 

a clearing member.

Chapter 3 establishes categories of participants and eligibility to 

be admitted as a participant on Javelin SEF and criteria for 

becoming a participant. 

Rule 407 specifies that each Participant shall (i) maintain an 

account with a Clearing Member that provides for the 

clearing of all Trades that such Participant executes on 

Javelin SEF; (ii) maintain appropriate Trading Limits and 

shall provide notice to Javelin SEF of such Trading Limits; 

and (iii) provide Javelin SEF with immediate written notice 

of any change in such Trading Limits.

Rulebook – Exhibit M

Chapter 6 – Clearing

Chapter 3 – Applications for 

Participant Status

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 

Javelin SEF Rules set forth clear procedures and guidelines for 

decision-making regarding emergency intervention in the market, 

including procedures and guidelines to avoid conflicts of interests 

while carrying out such decision-making.

Rulebook – Exhibit M

Rule 203 -Emergency Authority
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liquidate or transfer open positions in 

any swap or to suspend or curtail 

trading in a swap.

The measures available to Javelin SEF in the case of an 

emergency include the ability to place into immediate effect 

temporary rules, order the liquidation of contracts, order the 

fixing of the settlement price or liquidation-only trading, 

suspending or limiting trading, modifying trading hours, 

imposition of position or price limits, and requiring Participants 

to meet special margin requirements.

Although the Javelin SEF Rules authorize the liquidation or 

transfer of open positions in an emergency, Javelin SEF notes that 

it does not expect any open positions to exist on the facility, nor 

does it anticipate than any of its Participants will post margin on 

or through Javelin SEF.

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.

Javelin SEF will publish trading information as required by 

CEA Section 5h(f)(9) and Parts 16 and 37 of the CFTC 

regulations.

Rulebook – Exhibit M

Rule 503 - Publication of 

Trading Information

(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 

transactions executed on the facility.

As shown in Exhibit V (Technology Questionnaire), the platform 

has the capacity to electronically capture trade information 

executed on the facility. Trade information is stored 

electronically and includes the time of order entry, the time of 

trade execution, primary economic terms, and identifying data. 

Specific processes are in place to recreate the life cycle of the 

order or trade, from an “active” database, and a parallel “passive” 

database. Back-ups are stored in the primary back-up location, as 

well as all log files. Strong policies and procedures are in place 

to ensure data is captured and maintained electronically, for audit 

purposes. 

Technology Questionnaire -

Exhibit V

Section 3 -System Operations 

discusses system controls and 

security, as well as event 

management;

Section 4 - System Development 

Methodology discusses system 

components and information 

handling;
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Section 5 - Information Security 

discusses the information stored 

and security processes;

Section 6 -Physical Security and 

Environmental Controls 

discusses data centers and the 

physical security controls.

Core principle 10 -

Recordkeeping and 

reporting

(A) In general. A swap execution 

facility shall-(i) 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; (ii) 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 this chapter; and (iii) shall keep 

any such records relating to swaps 

defined in section 1a(47)(A)(v) of the 

CEA open to inspection and 

examination by the Securities and 

Exchange Commission.”

Javelin SEF will maintain records of all activities related to its 

business for a period of at least five (5) years in accordance with 

CFTC regulations or such longer period as may be required by 

applicable law, and shall make such books and records readily 

accessible for inspection, as may be required by applicable law, 

during the first two years of such five year period. 

Each participant is also obliged to maintain all requisite books 

and records in accordance with CFTC regulations and shall retain 

such records for a period of five (5) years from the date on which 

they were prepared. Such records will be readily accessible for 

inspection for the first two years of the five year retention period.

Rulebook – Exhibit M

Rule 404 - Required Records

Rule 905 - Books and Records

(B) Requirements. The Commission 

shall adopt data collection and 

reporting requirements for swap 

execution facilities that are 

Rules 404 and 905 satisfy the recordkeeping requirements set 

forth in Commission Regulations 37.1001-1003 and the 

requirements imposed on SEFs in Commission Regulations Parts 

43 and 45.

Rulebook – Exhibit M

Rule 404 – Required Records

Rule 905- Books and Records
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comparable to corresponding 

requirements for derivatives clearing 

organizations and swap data 

repositories.

Technology Questionnaire -

Exhibit V

Generally

Core principle 11 -

Antitrust 

considerations

Unless necessary or appropriate to 

achieve the purposes of this chapter, 

the swap execution facility shall not-

(A) adopt any rules or take any 

actions that result in any unreasonable 

restraint of trade; or (B) impose any 

material anticompetitive burden on 

trading or clearing.

Javelin SEF believes that its Rules and business plan have been 

designed to avoid unreasonable restraints of trade or the 

imposition of any material anticompetitive burden on trading. In 

particular, access to Javelin SEF will not require the acquisition 

of any equity interest but will be available to a broad range and 

potentially unlimited number of Participants on a fair, equitable 

and timely basis.

Compliance Manual – Exhibit 

O

Section V.G. - Antitrust Policy

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 Javelin SEF Rules minimize conflicts of interest in decisionmaking processes and contain methods to ascertain the presence 

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

a conflict. Under Rule 206, no person that has a “Material 

Conflict of Interest” between his or her position may knowingly 

participate in any deliberations or vote involving his or her 

personal interest, subject to certain exceptions. 

Additionally, Rule 207 provides limitations on the use or 

disclosure of material non-public information gained through the 

performance of duties by Directors or committee members, and 

requires Directors and committee members to take all appropriate 

steps to safeguard such information. 

The Javelin SEF Compliance Manual prohibits Javelin SEF 

employees from trading on the basis of material non-public 

information in breach of a pre-existing duty and from trading on 

Rulebook – Exhibit M

Rule 206 - Conflicts of Interest

Rule 207 - Disclosure or Use of 

Material, Non-Public

Information

Rule 216 - Regulatory Oversight 

Committee

Rule 217 - Disciplinary 

Committee

Compliance Manual – Exhibit 

O

Section V - Code of 

Business Conduct and Ethics
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the basis of material non-public information that was obtained 

through fraud or deception. Additionally, the Javelin SEF 

Compliance Manual prohibit Javelin SEF and Javelin SEF 

employees from using for business or marketing purposes any 

proprietary data or personal information it collects or receives, 

from or on behalf of any Person, for the purposes of fulfilling that 

Person’s regulatory responsibilities.

Javelin SEF will obtain public directors for its Board and 

committees once the Commission finalizes its rule defining 

public directors for SEFs. At that time, Javelin SEF will ensure 

that it’s Board and committees include an appropriate number and 

percentage of public directors, as required by Applicable Law.

Javelin will have a Regulatory Oversight Committee that is 

composed of two Independent Directors and one Director 

appointed by Javelin SEF’s board of managers. The Regulatory 

Oversight Committee will oversee all aspects of Javelin SEF's 

regulatory program on behalf of the Board. The Board will 

delegate sufficient authority, dedicate sufficient resources, and 

allow sufficient time for the Regulatory Oversight Committee to 

fulfill its mandate. It will make such recommendations to the 

Board as will, in its judgment, best promote the interests of 

Javelin SEF. The Regulatory Oversight Committee will also 

have such other powers and perform such other duties as set forth 

in the Javelin SEF Rules and as the Board may delegate to it from 

time to time. The ROC will assist the SEF in minimizing actual 

and potential conflicts of interest. 
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The SEF also maintains a Disciplinary Committee consisting of at 

least 10 members, three of which shall be Independent 

Committee Members, appointed by the Board.

Members of the Disciplinary Committee will be appointed 

to serve on Disciplinary Panels by the ROC. Each 

Disciplinary Panel shall consist of three members, including 

one Independent Committee Member, who shall serve as 

Chairperson of the Disciplinary Panel. 

The ROC shall establish one or more of the following 

Disciplinary Panels: Review Panel, Hearing Panel and Appeal 

Panel.

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.

Javelin SEF will maintain financial resources that exceed the total 

amount that would enable it to cover its operating costs for a oneyear period, as calculated on a rolling basis.

Exhibit I includes a balance sheet, statement of income and 

expenses, statement of cash flows, and a statement of sources and 

application of revenues and all notes or schedules thereto, as of 

the most recent fiscal year, for the parent of Javelin SEF, Javelin 

Capital Markets, LLC, as well as a narrative of how the value of 

the financial resources held by Javelin SEF is at least equal to a 

total amount that would enable it to cover its operating costs for a 

period of at least one year, calculated on a rolling basis, and a 

description of unencumbered, liquid financial assets (i.e. cash 

and/or highly liquid securities) equal to at least six months’ 

operating costs.

Exhibit I
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ELEMENTS OF SWAP 

EXECUTION FACILITY CORE 

PRINCIPLE

JAVELIN SEF APPLICATION RELEVANT JAVELIN SEF 

APPLICATION 

MATERIALS

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-(i) 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.

Materials submitted with the Technology Questionnaire explain 

the controls to be used to ensure the proper function, adequate 

security and capacity of automated trading systems and related 

systems such as those used for dissemination of market data and 

recording and safe storage of audit trail information. These 

controls include periodic, objective testing and review of 

automated systems to ensure that these systems are reliable, 

secure and have adequate scalable capacity. Results of such 

testing are retained as described with respect to Core Principle 10 

(Recordkeeping and reporting). Compliance with these policies is 

under the supervision of the Chief Compliance Officer.

Rulebook – Exhibit M

Rule 311 - Access to Javelin 

SEF by Authorized Traders

Rule 406 - System Security

Rule 409 - Disaster Recovery; 

Business Continuity

Rule 908 – Javelin SEF Disaster 

Recovery, Business Continuity 

and Risk Oversight 

Technology Questionnaire -

Exhibit V

Generally

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.

The Board shall appoint a Chief Compliance Officer. Rulebook – Exhibit M

Rule 204 - Officers
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PRINCIPLE

JAVELIN SEF APPLICATION RELEVANT JAVELIN SEF 

APPLICATION 

MATERIALS

Operating Agreement of 

Javelin SEF, LLC

Section 3.1 - Officers

(B) Duties. The chief compliance 

officer shall-(i) report directly to the 

board or to the senior officer of the 

facility; (ii) review compliance with 

the core principles in this subsection; 

(iii) 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 any conflicts of interest that 

may arise; (iv) be responsible for 

establishing and administering the 

policies and procedures required to be 

established pursuant to this section; 

(v) ensure compliance with this 

chapter and the rules and regulations 

issued under this chapter, including 

rules prescribed by the Commission 

pursuant to this section; and (vi) 

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.

The Chief Compliance Officer shall: (1) report directly to the 

Board; (2) oversee and review Javelin SEF’s compliance with

Section 5h of the CEA and any related rules adopted by the 

Commission; (3) consult with the Board, resolving any conflicts 

of interest that may arise; (4) establish and administer written 

policies and procedures reasonably designed to prevent violation 

of the CEA and any rules adopted by the Commission; (5) ensure 

compliance with the CEA and Commission regulations relating to 

agreements, contracts, or transactions, and with Commission 

regulations under Section 5h of the CEA and (6) establish 

procedures for the remediation of noncompliance issues identified 

by the Chief Compliance Officer through a compliance office 

review, look-back, internal or external audit finding, self-reported 

error, or validated complaint.

Rulebook – Exhibit M

Rule 714 –Authority of the 

Chief Compliance Officer and 

the Compliance Department

Operating Agreement of 

Javelin SEF, LLC

Section 3.6 - Chief Compliance 

Officer 

Compliance Manual – Exhibit 

O

Section XI.E - The Chief 

Compliance Officer
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MATERIALS

(C) Requirements for procedures. 

In establishing procedures under 

subparagraph (B)(vi), the chief 

compliance officer shall design the 

procedures to establish the handling, 

management response, remediation, 

retesting, and closing of 

noncompliance issues.

The Chief Compliance Officer shall establish and follow 

appropriate procedures for the handling, management response, 

remediation, retesting, and closing of noncompliance issues.

Rulebook – Exhibit M

Rule 714 - Authority of the 

Chief Compliance Officer and 

Compliance Department

Compliance Manual - Exhibit 

O

Section XI.E- The Chief 

Compliance Officer

(D) Annual reports. 

(i) 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 this chapter; and (II) the 

policies and procedures, including the 

code of ethics and conflict of interest 

policies, of the swap execution 

facility.

(ii) Requirements. The chief 

compliance officer shall-(I) submit 

each report described in clause (i) 

with the appropriate financial report 

of the swap execution facility that is 

required to be submitted to the 

Commission pursuant to this section; 

and (II) include in the report a 

The Chief Compliance Officer shall annually prepare and sign a 

report that contains a description of: (i) the compliance of Javelin 

SEF with the CEA; and (ii) the policies and procedures, including 

the code of ethics and conflict of interest policies, of Javelin SEF. 

Such annual report shall include a certification that, under penalty 

of law, it is accurate and complete.

Rulebook – Exhibit M

Rule 714 - Authority of the 

Chief Compliance Officer and 

Compliance Department

Compliance Manual – Exhibit 

O

Section IX.E - The Chief 

Compliance Officer

Operating Agreement of 

Javelin SEF, LLC

Section 3.6 - Chief Compliance 

Officer 
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JAVELIN SEF APPLICATION RELEVANT JAVELIN SEF 

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MATERIALS

certification that, under penalty of 

law, the report is accurate and 

complete.