SEC Division of Trading and Markets no-action letter: Marex Securities Products Inc.

February 26, 2025 Ryan P. Hayden
+1 202 429 1304 (t)
Mr. Thomas K. McGowan +1 202 429 3902 (f)
Ms. Emily Westerberg Russell
Ms. Carol M. McGee
Associate Directors
Division of Trading and Markets
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
RE: Marex Securities Products Inc., Timing of Initial Submission of Certain Annual Reports and Reviews Dear Associate Directors:
We are writing on behalf of our client, Marex Securities Products Inc. (“MSPI”), a conditionally registered security-based swap dealer (“SBSD”), to request assurance that the staff of the Division of Trading and Markets of the Securities and Exchange Commission (“Commission,” or “Staff”) will not recommend enforcement action to the Commission under Sections 15F(f) and (k)(3) of the Securities Exchange Act of 1934 (“Exchange Act”), the security-based swap dealer (“SBSD”) risk management rules (Rule 18a-1(f) which requires compliance with most of Rule 15c3-4), the SBSD reporting rule (Rule 18a-7) and the SBSD chief compliance officer rule (Rule 15Fk-1), if MSPI incorporates certain annual reviews and reports for the first fiscal year (“FY”) after its registration with the Commission as an SBSD into the reviews and reports for its second fiscal year after registration with the Commission as an SBSD. In particular, MSPI requests relief from the following requirements:

1. to file a financial report pursuant to Rule 18a-7(c)(1)(i)(A) and a report prepared by an
   independent public accountant covering the financial report pursuant to Rule 18a￾7(c)(1)(i)(C);
2. to file a compliance report or an exemption report pursuant to Rule 18a-7(c)(1)(i)(B)(1) or
   (2), as applicable, and a report prepared by an independent public accountant covering the compliance report or exemption report pursuant to Rule 18a-7(c)(1)(i)(C);
3. to post a financial report on its website pursuant to Rule 18a-7(b)(1);
4. to retain an independent certified public accountant to conduct an annual review of the
   firm’s risk management systems, pursuant to Rule 18a-1(f) (which includes a requirement to comply with Rule 15c3-4(c)(3)); and
5. to prepare a compliance report pursuant to Rule 15Fk-1(c) and to submit it to the
   Commission pursuant to Rule 15Fk-1(c)(2)(ii)(A).

Mr. Thomas K. McGowan
Ms. Emily Westerberg Russell
Ms. Carol M. McGee
February 26, 2025
(collectively, “Reports and Reviews”). 1
MSPI’s request is similar to the Division of Trading and Markets’ staff’s no-action letter not objecting to newly registered SBSDs consolidating certain reports and reviews for their first and second fiscal years if the first fiscal year is not greater than five months, which was one element of the facts and circumstances specified in that letter. 2 Background On December 27, 2024, MSPI filed a complete SBSD application with the Commission, becoming a conditionally registered SBSD on such date. MSPI observes a calendar fiscal year, and therefore was an SBSD for only five calendar days in its first fiscal year in 2024. MSPI executed its first security-based swap (“SBS”) transaction on November 4, 2024. MSPI does not have a prudential regulator, is not registered as a broker-dealer (including not registered as an over-the-counter derivatives dealer), is not applying substituted compliance with respect to Rule 18a-1, is not using a value-at-risk model to compute its net capital requirements, and intends to operate pursuant to an exemption from the segregation requirements of Rule 18a-4. Although MSPI has an existing relationship with an independent auditor, that auditor would be conducting a first-time audit of MSPI’s systems, processes, and controls, and is not currently familiar with those systems. Absent the requested no-action relief, MSPI would be required to undertake and file or submit Reports and Reviews covering five calendar days as a registered SBSD, which we respectfully believe would not possess meaningful substance in light of MSPI’s limited time as a registered

See paragraph (c)(1)(i)(A) of Rule 18a-7 (requiring an SBSD to file an annual financial report), paragraph (f) of Rule 18a-1 (requiring an SBSD to comply with most of the provisions of Rule 15c3-4, including paragraph (c)(3) of Rule 15c3-4 requiring these annual reviews of risk management systems by certified public accountants), paragraphs (c)(1)(i)(B) and (c)(1)(i)(C) of Rule 18a-7 (requiring an SBSD claiming or not claiming an exemption from segregation requirements under Rule 18a-4 to file an exemption report or compliance report, as applicable, as well as a report prepared by an independent public accountant covering the exemption report or compliance report and financial report), paragraph (c) of Rule 15Fk-1 (requiring the chief compliance officer of an SBSD to annually prepare and sign a compliance report and requiring the SBSD to submit the compliance report with the Commission within 30 business days following the deadline for filing the annual financial report) and paragraph (b)(1) of Rule 18a-7 (requiring certain SBSDs to make publicly available the annual reports within 10 business days after the date the firm is required to file its annual reports with the Commission). See letter from Mr. Michael A. Macchiaroli, Associate Director, Division of Trading and Markets, Securities and Exchange Commission to Ms. Kyle Brandon, Managing Director, Head of Derivatives Policy, Securities Industry and Financial Markets Association (Feb. 23, 2022). Mr. Thomas K. McGowan, Associate Director, Division of Trading and Markets, Securities and Exchange Commission; Ms. Emily Westerberg Russell, Associate Director, Division of Trading and Markets, Securities and Exchange Commission; Ms. Carol M. McGee, Associate Director, Division of Trading and Markets, Securities and Exchange Commssion.

Mr. Thomas K. McGowan
Ms. Emily Westerberg Russell
Ms. Carol M. McGee
February 26, 2025
SBSD during FY 2024. As part of its SBSD application, MSPI attested to having developed and implemented written policies and procedures reasonably designed to prevent violation of the federal securities laws and the rules thereunder. Request for Relief Given the short time period between MSPI’s registration as an SBSD and its fiscal year-end, MSPI respectfully requests that the Staff provide assurance that it will not recommend enforcement action to the Commission under Sections 15F(f) and (k)(3) of the Exchange Act and Rule 18a-1(f) (which includes a requirement to comply with Rule 15c3-4(c)(3)), and Rule 15Fk-1(c) (including without limitation Rule 15Fk-1(c)(2)(ii)(A) thereunder), if MSPI incorporates the Reports and Reviews identified in these rules for the first fiscal year after it is registered with the Commission as an SBSD, beginning on December 27, 2024 and ending on December 31, 2024, into the Reports and Reviews for its second fiscal year after registration with the Commission as an SBSD (i.e., the fiscal year ended on December 31, 2025). Further, MSPI respectfully requests that the Staff provide assurance that it will not recommend enforcement action to the Commission with respect to Section 15F(f) of the Exchange Act and Rule 18a-7(c)(1)(i)(A), Rule 18a-7(c)(1)(i)(B)(1) or (2), as applicable, Rule 18a-7(c)(1)(i)(C), and Rule 18a-7(b)(1), if MSPI incorporates the Reports and Reviews identified in these rules for the first fiscal year of SBS trading activity, beginning on November 4, 2024 and ending on December 31, 2024, into the Reports and Reviews for its second fiscal year after registration with the Commission as an SBSD (i.e., the fiscal year ending on December 31, 2025). Please feel free to contact me should you have any questions. Sincerely, Ryan P. Hayden