Washington D.C. – Symphony Communication Services, LLC will pay $100,000 and cease operations of an unregistered swap execution facility following a settlement with the Commodity Futures Trading Commission (CFTC). The CFTC issued an order on September 29, 2021, detailing the charges and settlement terms.
The investigation revealed that from approximately July 2019 to March 2021, Symphony operated “SPARC Tool” – a web-based application within its communication platform – without registering as a Swap Execution Facility (SEF). SPARC Tool facilitated automated request for quote (RFQ) workflows for interest rate and cross-currency swaps.
According to the CFTC, SPARC Tool allowed multiple swap market participants to define swap parameters, including type, clearing preference, tenor, and notional size, and then distribute RFQs. Participants could negotiate prices through the platform, finalizing transactions with the “done” command.
The CFTC noted Symphony’s proactive cooperation following an inquiry by the Division of Enforcement. The company identified the unregistered activity and immediately ceased operation of the SPARC functionality. This cooperation resulted in a reduction of the civil monetary penalty.
The order requires Symphony to cease and desist from further violations of the Commodity Exchange Act (CEA) and CFTC regulations. Ansley Schrimpf, Bryan Hsueh, Joseph Konizeski, Scott Williamson, and Robert Howell of the Division of Enforcement led the investigation, with assistance from the Division of Market Oversight and the Market Participants Division.
The CFTC encourages the public to report suspicious activity related to commodity trading laws via the toll-free hotline 866-FON-CFTC, online tip/complaint submission, or through the Whistleblower Office. Whistleblowers may be eligible for a share of collected monetary sanctions.
Source: CFTC.gov
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