The US Commodity Futures Trading Commission’s (Commission) Division of Market Oversight (DMO) has issued Guidance to Swap Execution Facilities (SEF) regarding the calculation of projected operating costs for purposes of complying with the financial resource requirements under SEF Core Principle 13 and Commission Regulation 13.1303. 

This guidance follows two no-action letters providing relief in connection with erroneous swap trades and swap trade confirmations DMO issued yesterday (April 22, 2015).

The Guidance notes that one cost incurred by voice-based SEFs – the variable commissions such SEFs might pay their employee-brokers, calculated as a percentage of transaction revenue generated by the voice-based SEF – is, unlike fixed salaries or compensation, an expense not payable unless and until revenue is collected by the SEF. The Guidance provides that these variable commissions do not have to be included in a SEF’s calculation of projected operating costs.
In contrast to variable commissions, any fixed salaries or compensation payable to employee-brokers of the SEF must be included in the calculation of projected operating expenses.