Submission 15-0006R: Rulebook Amendments

205 Pages·2012·1.92 MB·English

October 13, 2015
VIA ELECTRONIC PORTAL
Christopher J. Kirkpatrick
Office of the Secretariat
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street, N.W.
Washington, D.C. 20581
Re: Commission Regulation 40.6(a) Rule Certification
GFI Swaps Exchange LLC Submission # 15-0006R – Rulebook Amendments
Dear Mr. Kirkpatrick:
GFI Swaps Exchange LLC (“GFI”) hereby notifies the Commodity Futures Trading Commission
(the “Commission”), pursuant to Section 5c(c) of the Commodity Exchange Act (the “CEA”)
and Commission Regulation 40.6(a), that it is certifying the attached amendments to its
Rulebook. The attached amendments will become effective on October 15, 2015.
Please note that the original Submission No. 15-0006 has been revised to clarify the following:
(1) Participants and Sponsored Access Firms may electronically stream responses to an RFQ
pursuant to Rule 508(a)(i); and (2) any Participant and/or Sponsored Access Firm may participate
in a Fixing session in accordance with Rule 508(a)(ii). These additional clarifications do not
change the substance of Rule 508(a)(i) or (ii). No other changes have been made to the original
Submission No. 15-0006.
A concise explanation and analysis of the amendments to the Rulebook and their compliance
with applicable provisions of the CEA, including the Core Principles, and the Commission’s
Regulations, is attached hereto as Exhibit A. A marked copy of the Rulebook amendments are
attached hereto as Exhibit B.
GFI certifies that the Rulebook amendments comply with the CEA and Commission Regulations
thereunder. GFI additionally certifies that it has concurrently posted a copy of this submission
letter and the attachments hereto on GFI’s website at http://gfigroup.com/markets/swaps-
exchange/rules-notices.aspx. There were no substantive opposing views to the amendments to
the Rulebook.
101864433
Please contact the undersigned at [phone] or [email protected] if you have
any questions or you would otherwise like to discuss this further.
Sincerely,
/s/ William Shields

Chief Compliance Officer
GFI Swaps Exchange LLC

Enclosure
EXHIBIT A
1
Capitalized terms used but not defined herein have the meanings assigned to them in the
Rulebook.

Core Principle or other
CEA Provision,
Rule Explanation Commission Regulation
and/or Commission
Staff Letter
Cover Page Updates effective date. Regulation 40.6
Table of Contents Updates table of contents to reflect changes See below
listed below.
Rule 101 (“Required Revises “Required Transaction” definition Regulation 37.9(a)(1)
Transaction”) consistent with Commission Regulation
37.9(a)(1).
Rule 101 (“Self- Clarifies that “Self-Regulatory Organization” Regulation 1.3(ee)
Regulatory includes an entity that meets one of the
Organization”) following: (i) a “self-regulatory
organization” as that term is used in
Commission Regulation 1.3(ee); or (ii) a
“self-regulatory organization” as that term is
used in section 3(a)(26) of the Securities
Exchange Act of 1934.
Rule 401(a)(xi) Clarifies that each Participant must, and must Regulation 37.6
cause its Sponsored Access Firms to, keep
Letter No. 15-25
any Terms Incorporated by Reference.
Rule 406(b) Clarifies that counterparties must maintain Letter No. 15-25
all Terms Incorporated by Reference in
accordance with Commission Letter No. 15-
25, which expires March 31, 2016.
Rule 505(b)(i) Provides that Limit Orders are not available Core Principles 2 and 4
for Swaps in the credit asset class.
Regulations 37.200(c),
37.201(a) and
37.400(a)
Rule 505(b)(v) Reinserts “One Cancels Other” as a Core Principles 2 and 4
permissible order type.
Regulations 37.200(c),
37.201(a) and
37.400(a)
1
Rule 505(b)(vi)-(viii) Renumbers subparagraphs (vi) through (viii). See above.
Rule 506(c) Clarifies that each Participant, Sponsored Regulation 45.8(h)
Access Firm and Registered Trader that
submits an Order or RFQ must include
sufficient information to enable GFI to report
all Required Swap Creation Data pursuant to
Part 45 of CFTC Regulations.
Rule 506(c)(iv) Clarifies that the term “financial entity” is as CEA section 2(h)(7)(C)
defined in section 2(h)(7)(C) of the CEA.
Regulation 45.8(h)
Rule 507(b)(i) Provides that each Exclusivity Period will Core Principles 2 and 4
last for a period of 10 seconds.
Regulations 37.200(c),
37.201(a) and
37.400(a)
Rule 507(b)(ii) Provides that each Public Period will last for Core Principles 2 and 4
a period of 10 seconds.
Regulations 37.200(c),
37.201(a) and
37.400(a)
Rule 507(c) Clarifies that no Swap executed during a JTT Core Principles 2 and 4
session may qualify as a Block Trade even if
Regulations 37.200(c),
the Swap is in a notional or principal amount
37.201(a) and
that is equal to or in excess of the appropriate
37.400(a)
minimum block size for such Swap.
Rule 508(a)(i) Clarifies that a Participant or Sponsored Core Principles 2 and 4
Access Firm may electronically stream
Regulations 37.200(c),
responsive quotations for both Required
37.201(a) and
Transactions and Permitted Transactions.
37.400(a)
Participants and Sponsored Access Firms
that stream quotations must do so in
accordance with the other applicable
provisions of Rule 508.
Rule 508(a)(ii) Clarifies that any Participant and/or Core Principles 2 and 4
Sponsored Access Firm may participate in a
Regulations 37.200(c),
Fixing session.
37.201(a) and
37.400(a)
Rule 508(i) Clarifies that, in the case of a Required Regulation
Transaction, each RFQ recipient must be 37.9(a)(3)(iii)
given “equal priority” in receiving a given
2
RFQ and in responding thereto. For
purposes of this paragraph, “equal priority”
means that the RFQ and response(s) thereto
are communicated in a way that does not
seek to avoid the minimum recipient
requirement in paragraph (a).
Rule 508(j)-(l) Renumbers paragraphs (j) through (l). See above.
Rule 508A(b)(iii) Clarifies that communications (including Regulation 1.31
Voice Communications) between GFI and
market participants concerning market
participants’ views in determining the Mid-
Market Level will be retained in accordance
with Commission Regulation 1.31.
Rule 535(a) Clarifies that GFI will adopt for each Swap, Core Principle 6
as is necessary and appropriate, position
Regulation 37.600
limitations or position accountability levels
for speculators.
Rule 535(h) Clarifies that, for Required Transactions, GFI Core Principle 6
will enforce position limits only for Swaps
Regulations 37.600 and
executed on or pursuant to the Rules. For
37.601
Permitted Transactions, GFI will
demonstrate compliance with Commission Appendix B to Part 37
Regulation 37.600 by sending the
Commission a list of Permitted Transactions
traded on or pursuant to the Rules.
Rule 540(a) Clarifies that GFI will transmit Reportable Regulation 43.3(b)(3)
Swap Data, pursuant to Parts 43 and 45 of
Commission Regulations, to a Swap Data
Repository registered in respect of such class
of Swaps as soon as technologically
practicable following execution. The other
amendments to paragraph (a) are intended to
clarify that GFI may disclose Swap
Transaction and Pricing Data in accordance
with Commission Regulation 43.3(b)(3).
Rule 540(b) Incorporates by reference the relevant Regulation 45.8(h)(2)
portion of the ISDA Dodd Frank Act - Swap
Transaction Reporting Party Requirements.
The other amendment updates the version
incorporated by reference.
3
Rule 540(c) Incorporates by reference the list of Swap Parts 43 and 45 of
Data Repositories to which GFI will report Commission
Reportable Swap Data with respect to each Regulations
class of Swaps.
Rule 541(d) Provides that GFI will not submit or agree to Regulation 43.3(e)(2)
submit a correction or cancellation for the
purpose of re-reporting Swap Transaction
and Pricing Data in order to gain or extend a
delay in public dissemination of accurate
Swap Transaction and Pricing Data or to
otherwise evade the reporting obligations in
Part 43 of Commission Regulations.
Rule 601(b) Clarifies that parties to a Block Trade must Regulations 43.2, 43.6,
be Eligible Contract Participants. The 43.6(h)(4) and
remaining amendments are intended to more 43.6(i)(1)
closely track the relevant Commission
Regulations.
Rule 601(c) Clarifies that a Customer must grant consent Regulation 43.6(i)(2)
in writing prior to entering into a Block
Trade.
Rule 601(d) Changes reference from “Applicable Law” to Regulation 43.6(h)(6)
“CFTC Regulation 43.6(h)(6).”
Rule 601(f) Clarifies that if the counterparties to a Swap Part 43 to Commission
effect a transaction that is intended to be a Regulations
Block Trade that is entered into pursuant to
the Rules, the Reporting Counterparty must
notify GFI of this election. The other
amendments provide that the Reporting
Counterparty must submit a Block Trade to
GFI as soon as technologically practicable
after execution, but in no event any later than
15 minutes after the execution.
Rule 601(h) Clarifies that a Block Trade effected on the Core Principles 2 and 4
Trading Platform may not be effected during
Regulations 37.200(c),
a JTT session.
37.201(a) and
37.400(a)
Rule 712(g) Provides that GFI will transcribe the Regulation
recording of a disciplinary processing if 37.206(c)(2)(i)
requested by the respondent.
4
Rule 914(g) Clarifies that Rule 914 does not limit the Regulation 37.100
applicability of any provision of the CEA or
Commission Regulations.
Appendix B Provides the list of Swap Data Repositories Parts 43 and 45 of
to which GFI reports swap data in Commission
accordance with Commission Regulations. Regulations
Appendix C Provides an excerpt from the ISDA Dodd Regulation 45.8(h)(2)
Frank Act - Swap Transaction Reporting
Party Requirements.

5
EXHIBIT B

4
GFI SWAPS EXCHANGE LLC
RULEBOOK
Effective August 28,October 15, 2015
102146184