Allan D Grody, president of Financial Intergroup Holdings, looks at the importance of the LEI for a functioning electronic OTC market and the challenges faced in its implementation.
system to electronically identify, trade and clear swaps has
been designed by the CFTC, albeit in "consultation" with the
industry’s many constituent and competing
summary, it is an attempt at designing an automated market that
bridges the mechanisms of interoperability of the fragmented
infrastructure of the equity market with the vertical silo
structure of the listed futures markets.
CFTC is struggling to do this in some rational way to get to a
solid first landing of a complex product category that had been
traded bi-laterally amongst dealers for decades. It all starts
with labeling each counterparty uniquely and being able to
associate each with its parent entity.
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