Washington, D.C. – Symphony Communication Services, LLC has been ordered to pay $100,000 and cease further violations of commodity trading laws, the Commodity Futures Trading Commission (CFTC) announced on September 29, 2021. The charges stem from the company’s failure to register as a Swap Execution Facility (SEF).
According to the CFTC, from approximately July 2019 to March 2021, Symphony operated “SPARC Tool” – a web-based application integrated into its communication platform. SPARC Tool facilitated automated request for quote (RFQ) workflows for interest rate and cross-currency swaps. The tool allowed multiple market participants to define swap parameters, including type, clearing preference, tenor, and notional size, and then distribute RFQs to other participants.
The CFTC’s order details that SPARC Tool enabled negotiation of prices, with participants able to confirm deals using the “done” command. By providing this functionality, the CFTC determined Symphony was operating as an unregistered SEF, violating the Commodity Exchange Act (CEA) and related regulations.
The penalty amount was reduced due to Symphony’s proactive cooperation with the Division of Enforcement and its swift action to discontinue the SPARC Tool’s operation after the inquiry began. The company reportedly identified relevant information and immediately ceased the functionality.
Ansley Schrimpf, Bryan Hsueh, Joseph Konizeski, Scott Williamson, and Robert Howell of the Division of Enforcement led the case. The Division of Market Oversight and the Market Participants Division provided assistance.
The CFTC encourages the public to report suspicious activity or potential violations of commodity trading laws via its toll-free hotline at 866-FON-CFTC (866-366-2382), through its online tip/complaint form, or by contacting the Whistleblower Office. Whistleblowers may be eligible for financial rewards of 10-30% of collected monetary sanctions.
Source: CFTC.gov
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