The launch of Swap Execution Facilities looks set to have an unprecedented impact on the market. William Mitting looks at the early days of Sef trading and asks how the market will evolve.
It was an inauspicious
start for the new regime designed to shine light on the OTC
The new era of Swap
Execution Facilities began on October 2 with a string of
no-action letters from the Commodity Futures Trading
Trade reporting was
delayed by a month (two months for equities and commodities),
clients were allowed to trade without the proper documentation
and the confirmation of forex swaps was pushed back to the end
of the month.
operators, many of them caught out by the now infamous Footnote
88 which required them to register by October 2, greeted the
deadline with a mixture of anger and confusion.
Issues such as the
definition of a US person, eligibility for trading mandate and
the requirement for pre-trade clearing certainty were unclear
as the new era began.
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