Form 1 Form SBSEF

SECURITIES AND EXCHANGE COMMISSION
FORM SBSEF
SECURITY-BASED SWAP EXECUTION FACILITY
APPLICATION OR AMENDMENT TO APPLICATION FOR
REGISTRATION
EXHIBITS INSTRUCTIONS
The following Exhibits must be filed with the Commission by an Applicant applying for
registration as a security-based swap execution facility, or by a registered security-based swap
execution facility amending its registration, pursuant to section 3D of the Act and the
Commission’s rules thereunder. The Exhibits must be labeled according to the items specified in
this Form SBSEF.
The application must include a Table of Contents listing each Exhibit required by this Form
SBSEF and indicating which, if any, Exhibits are inapplicable. For any Exhibit that is
inapplicable, next to the Exhibit letter specify “none,” “not applicable,” or “N/A,” as appropriate.
If the Applicant is a newly formed enterprise and does not have the financial statements required
pursuant to Items 9 and 10 (Exhibits I and J) of this Form SBSEF, the Applicant should provide
pro forma financial statements for the most recent six months or since inception, whichever is
less.

LIST OF EXHIBITS
EXHIBITS – BUSINESS ORGANIZATION
1. Attach as Exhibit A, the name of any person who owns ten percent (10%) or more of the
Applicant’s stock or who, either directly or indirectly, through agreement or otherwise, in
any other manner, may control or direct the management or policies of the Applicant.
Provide as part of Exhibit A the full name and address of each such person and attach a copy
of the agreement or, if there is none written, describe the agreement or basis upon which such
person exercises or may exercise such control or direction.
2. Attach as Exhibit B, a list of the present officers, directors, governors (and, in the case of an
Applicant that is not a corporation, the members of all standing committees, grouped by
committee), or persons performing functions similar to any of the foregoing, of the securitybased swap execution facility or of any entity that performs the regulatory activities of the
Applicant, indicating for each:
a.
b.
c.
d.

Name
Title
Dates of commencement and termination of present term of office or position
Length of time each present officer, director, or governor has held the same office or
position
e. Brief account of the business experience of each officer and director over the last five
years

f. Any other business affiliations in the derivatives and securities industry
g. For directors, list any committees on which they serve and any compensation
received by virtue of their directorship
h. Whether the person has been subject to a disciplinary action of any type noted in
§ 242.819(i) of Regulation SE and, if so, describe.
3. Attach as Exhibit C, a narrative that sets forth the fitness standards for the governing board
and its composition.
4. Attach as Exhibit D, a narrative or graphic description of the organizational structure of the
Applicant. Include a list of all affiliates of the Applicant and indicate the general nature of
the affiliation. If the security-based swap execution facility activities of the Applicant are or
will be conducted primarily by a division, subdivision, or other separate entity within the
Applicant, describe the relationship of such entity within the overall organizational structure
and attach as Exhibit D a description only as it applies to the division, subdivision, or
separate entity, as applicable. Additionally, state any jurisdictions in which the Applicant or
any affiliated entity is doing business, and its registration status in that jurisdiction, including
pending registrations (e.g., jurisdiction, regulator, registration category, date of registration).
Provide the address for legal service of process for each jurisdiction, which cannot be a post
office box.
5. Attach as Exhibit E, a description of the personnel qualifications for each category of
professional employees employed by the Applicant or the division, subdivision, or other
separate entity within the Applicant, as described in Item 4.
6. Attach as Exhibit F, an analysis of staffing requirements necessary to carry out the
operations of the Applicant as a security-based swap execution facility and the name and
qualifications of each key staff person.
7. Attach as Exhibit G, a copy of the constitution; articles of incorporation, formation, or
association, with all amendments thereto; partnership or limited liability agreements; and
existing by-laws, operating agreement, rules, or instruments corresponding thereto, of the
Applicant. Include any additional governance fitness information not included in Exhibit C.
Provide a certificate of good standing dated within one week of the date of this Form SBSEF.
8. Attach as Exhibit H, a brief description of any material pending legal proceeding(s), other
than ordinary and routine litigation incidental to the business, to which the Applicant or any
of its affiliates is a party or to which any of its or their property is the subject. For each such
proceeding, include the name of the court or agency where the proceeding is pending, the
date instituted, the principal parties involved, a description of the factual basis alleged to
underlie the proceeding, and the relief sought. Include similar information as to any
proceeding known to be contemplated by a governmental agency.
EXHIBITS —FINANCIAL INFORMATION
9. Attach as Exhibit I:
a. (i) Balance sheet; (ii) Statement of income and expenses; (iii) Statement of cash
flows; and (iv) Statement of sources and application of revenues and all notes or
schedules thereto, as of the most recent fiscal year of the Applicant, or of its parent
company, if applicable. If a balance sheet and any statement(s) certified by an

independent public accountant are available, that balance sheet and statement(s)
should be submitted as Exhibit I.
b. Provide a narrative of how the value of the financial resources of the Applicant is at
least equal to a total amount that would enable the Applicant to cover its operating
costs for a period of at least one year, calculated on a rolling basis, and whether such
financial resources include unencumbered, liquid financial assets (i.e., cash and/or
highly liquid securities) equal to at least six months’ operating costs.
c. Attach copies of any agreements establishing or amending a credit facility, insurance
coverage, or other arrangement evidencing or otherwise supporting the Applicant’s
conclusions regarding the liquidity of its financial assets.
d. Representations regarding sources and estimates for future ongoing operational
resources.
10. Attach as Exhibit J, a balance sheet and an income and expense statement for each affiliate
of the security-based swap execution facility that also engages in security-based swap
execution facility activities or is a national securities exchange as of the end of the most
recent fiscal year of each such affiliate.
11. Attach as Exhibit K, the following:
a. A complete list of all dues, fees, and other charges imposed, or to be imposed, by or
on behalf of the Applicant for its security-based swap execution facility services that
are provided on an exclusive basis and identify the service or services provided for
each such due, fee, or other charge.
b. A description of the basis and methods used in determining the level and structure of
the dues, fees, and other charges listed in paragraph (a) of this item.
c. If the Applicant differentiates, or proposes to differentiate, among its members in the
amount of any dues, fees, or other charges imposed for the same or similar exclusive
services, describe and indicate the amount of each differential. In addition, identify
and describe any differences in the cost of providing such services and any other
factors that account for such differentiations.
EXHIBITS —COMPLIANCE
12. Attach as Exhibit L, a narrative and any other form of documentation that may be provided
under other Exhibits herein, that describes the manner in which the Applicant is able to
comply with each Core Principle. Such documentation must include a regulatory compliance
chart setting forth each Core Principle and providing citations to the Applicant’s relevant
rules, policies, and procedures that address each Core Principle. To the extent that the
application raises issues that are novel or for which compliance with a Core Principle is not
self-evident, include an explanation of how that item and the application satisfy the Core
Principles.
13. Attach as Exhibit M, a copy of the Applicant’s rules and any technical manuals, other
guides, or instructions for members, including minimum financial standards for members.
Include rules on publication of daily trading information with regards to the requirements of
Regulation SBSR (§§ 242.900 through 242.909). The Applicant should include an

explanation and any other form of documentation that the Applicant thinks will be helpful to
its explanation, demonstrating how its rules, technical manuals, other guides, or instructions
for members or minimum financial standards for members, as provided in this Exhibit M,
help support the security-based swap execution facility’s compliance with the Core
Principles.
14. Attach as Exhibit N, executed or executable copies of any agreements or contracts entered
into or to be entered into by the Applicant, including third-party regulatory service provider
or member or user agreements that enable or empower the Applicant to comply with
applicable Core Principles. Identify: (1) the services that will be provided; and (2) the Core
Principles addressed by such agreement.
15. Attach as Exhibit O, a copy of any compliance manual and any other document that
describes with specificity the manner in which the Applicant will conduct trade practice,
market, and financial surveillance.
16. Attach as Exhibit P, a description of the Applicant’s disciplinary and enforcement protocols,
tools, and procedures and, if applicable, the arrangements for alternative dispute resolution.
17. Attach as Exhibit Q, an explanation regarding the operation of the Applicant’s trading
system(s) or platform(s) and the manner in which the system(s) or platform(s) satisfy any
Commission rules, interpretations, or guidelines regarding a security-based swap execution
facility’s execution methods, including the minimum trading functionality requirement in
§ 242.803 of the Commission’s regulations. This explanation should include, as applicable,
the following:
a. For trading systems or platforms that enable members to engage in transactions
through an order book:
(1) How the trading system or platform displays all orders and trades in an
electronic or other form, and the timeliness in which the trading system or
platform does so;
(2) How all market participants have the ability to see and have the ability to
transact on all bids and offers; and
(3) An explanation of the trade matching algorithm, if applicable, and examples
of how that algorithm works in various trading scenarios involving various
types of orders.
b. For trading systems or platforms that enable members to engage in transactions
through a request-for-quote system:
(1) How a member transmits a request for a quote to buy or sell a specific
instrument to no less than three market participants in the trading system or
platform, to which all members may respond;
(2) How resting bids or offers from the Applicant’s Order Book are
communicated to the requester; and
(3) How a requester may transact on resting bids or offers along with the
responsive orders.
c. How the timing delay described under § 242.815(b) of Regulation SE is incorporated
into the trading system or platform.
18. Attach as Exhibit R, a list of rules prohibiting specific trade practices.

19. Attach as Exhibit S, a discussion of how trading data will be maintained by the securitybased swap execution facility.
20. Attach as Exhibit T, a list of the name of the clearing organization(s) that will clear the
Applicant’s trades, and a representation that clearing members of that organization will be
guaranteeing such trades.
21. Attach as Exhibit U, any information (described with particularity) included in the
application that will be subject to a request for confidential treatment pursuant to Securities
Exchange Act Rule 24b-2, 17 CFR 240.24b-2.