The flexibility in the Sef rules passed down on Thursday reflect a change in attitude within the CFTC. Now we need to see that globally, writes William Mitting.
The relief on Gary Gensler’s face was palpable
at the CFTC meeting on Thursday as the vote on the rules
governing Swap Execution Facilities passed by four to one.
Throughout the four hour meeting where the rules were
discussed and passed as part of a package of four final rule
votes, the CFTC chairman joked with his colleagues, at one
point acting out a voice trade with fellow commissioner Scott
O’Malia, as he brought to a conclusion a major
phase of the process that has come to define the challenges of
implementing global derivatives reform.
The G20 mandate of 2009 to overhaul the OTC derivatives
markets can crudely be simplified to two fundamental drives:
central clearing and electronic execution. As the clearing part
of the mandate is rolled out across the US, the Sef rules form
the foundations of the execution part of the mandate.
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