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SEF Trading Volumes Emerging From Summer Doldrums

By Ivy Schmerken
Published September 18, 2014 Wall Street & Technology

Despite the summer doldrums of SEF trading in interest rate swaps, activity in early September is showing signs of a rebound as traders conduct more of their business on the electronic venues.

Tradeweb Markets announced Wednesday that average daily volume on its TW SEF for trading of interest rate swaps increased 20-fold to more than $20 billion in the first two weeks of September, over the first two weeks of trading on SEFs in October 2013.

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Tradeweb SEF Trading Increases Twenty Fold Since October Launch

Published September 17, 2014 Markets Media

Tradeweb Markets, the leading global provider of fixed income and derivatives marketplaces, announced that average daily trading volume on TW SEF for interest rate swaps(IRS) has increased twenty-fold to more than $20 billion in the first two weeks of September compared to the first two weeks of trading on swap execution facilities (SEFs) in October. The number of clients trading derivatives on Tradeweb has also grown over 400 percent.

Derivatives trading has increased dramatically on SEFs since they first launched in October 2013. In the first two weeks of September, more than 110 institutional derivatives trading clients executed over $230 billion in global interest rate swaps on Tradeweb’s request-based (RFQ) SEF.

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Wall Street Court Defeat Strengthens Swap Rules Overseas

By Silla Brush, Andrew Zajac and Robert Schmidt
Published September 17, 2014 Bloomberg

For all of those watching for clues on whether derivatives trading on Swap Execution Facilities (SEFs) has reached a turning point, your moment may be arriving.  Though the increase in trading volumes has not happened overnight, a surge is building.

According to data from the Futures Industry Association (FIA), the notional volume for all interest rate swaps traded on SEFs in the month of June 2014 was $8 trillion, up nearly $1.8 trillion from the previous month, with approximately 51% of all US dollar swaps trading on SEFs.

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Compression Becomes Catalyst to SEF Volume Growth

Published September 16, 2014 Markets Media

For all of those watching for clues on whether derivatives trading on Swap Execution Facilities (SEFs) has reached a turning point, your moment may be arriving.  Though the increase in trading volumes has not happened overnight, a surge is building.

According to data from the Futures Industry Association (FIA), the notional volume for all interest rate swaps traded on SEFs in the month of June 2014 was $8 trillion, up nearly $1.8 trillion from the previous month, with approximately 51% of all US dollar swaps trading on SEFs.

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CDS Notional Begins Increase Following Sizeable Slump

By Beth Shah
Published September 11, 2014 Global Capital

Overall credit default swap notional reported to swap data repositories last week increased 33% from the previous week, according to data from the International Swaps Derivatives Association.

This follows two weeks of falling volumes with a combined decrease of 57%. Overall interest rate derivatives that was reported, also increased by 18%.

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Morgan Stanley in Final SEF Agency Service Development Push

By Daniel O'Leary
Published September 11, 2014 Global Capital

Morgan Stanley is in the final development stages of its swap execution facility agency service and should launch the platform in the coming months.

Senior market officials at SEFs in New York told GlobalCapital the firm was making a final marketing push for the product with its clients. The SEF agency service will launch from the firm’s existing Morgan Stanley Passport e-trading platform, said one SEF official.

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Robot Risk Managers Excite Swap Market-Makers

By Lukas Becker
Published September 1, 2014 Risk.net

In the swap market of tomorrow, prices will be made, executed and risk managed by algorithm – a low-cost, high-volume vision of the future that has obvious appeal for a business struggling to hit its return targets. The idea has been held back by a lack of electronic venues with which robot traders can interact, but the arrival of swap execution facilities (Sefs), which are required to offer order-book trading, brings it a big step closer.

"Everyone is looking at this right now. I don't think there is a bank on the street that isn't exploring automated hedging," says the head of fixed-income e-commerce at one UK bank.

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CDS Notional Continues Decline by 27%

By Beth Shah
Published August 26, 2014 Global Capital

ISDA reported that there was a 33% decrease in the notional cleared for CDS and 41% less executed on swap execution facilities, compared with the previous week. Rates also saw a decrease, with 18% less volume cleared, and 21% less executed on SEFs last week.

The total notional cleared only dropped to 74% in both asset classes, with a 6% drop in CDS, and 5% decline in rates. The total notional executed on SEFs also dropped in CDS and rates; 13% to 56%, and 5% to 47%, respectively.

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CFTC Issues No-Action Relief on Confirmations of Uncleared Swap Transactions

Published August 20, 2014 Hedgeweek

The US Commodity Futures Trading Commission (CFTC) has issued a no-action letter providing swap execution facilities (SEFs) time-limited, conditional relief from certain data reporting and record-keeping requirements in relation to confirmations required for uncleared swap transactions.

The no-action relief provided will expire at midnight (EDT) on 30 September 2015.

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SEFs Receive a 12-Month Documentation Reprieve

By Rob Daly
Published August 19, 2014 The Trade

Swap execution facility (SEF) operators are breathing a little easier as the Commodity Futures Trading Commission (CFTC), the US derivatives regulator, has given SEFs conditional relief from certain recordkeeping requirements relating to confirmations of uncleared swaps.

The CFTC’s Regulation 37.6(b) states that a SEF is to provide each counterparty to a transaction entered into on or pursuant to the rules of the SEF with a written record of all terms of transactions, which supersedes any previous agreement and serves as the confirmation of the transaction.

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