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SEF ‘Packages’ Almost Wrapped Up

March 3, 2015, Markets Media

Institutional investors and large non-financial companies that trade swaps are rarely one-off users; rather, they’re in the market regularly as part of enterprise-wide hedging or speculative programs. To optimize efficiency, packaging trades into a single transaction can be indicated.

As swap execution facilities have developed since the industry’s Oct. 2013 start date, so-called package trades have been an area of uncertainty, as the phased approach implemented by regulators has meant that at times, certain swaps had to be traded on SEFs when others didn’t.

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Price Is Sole Factor in Best Execution – Pimco

By Catherine Contiguglia 
February 26, 2015, Risk

Portfolio manager calls for tougher oversight of market-makers

Dealers are trying to lure clients into thinking about best execution in terms other than pure price, a portfolio manager at Pimco argued yesterday at a conference in London. Fellow bank panellists had suggested a distinction between best price – which should be the goal of more “vulnerable” clients – and fair execution, which would serve the need of more sophisticated customers.

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SEFs: A Progress Report

February 26, 2015, Markets Media

For a business that’s all of 16 months old, swap execution facilities have made steady progress in establishing themselves as viable trading venues.

In December, weekly volume in interest-rate swaps was reported as high as $970 billion, while credit swaps weighed in at $236 billion, according to the FIA SEF Tracker released in early February. While that represents only a small fraction of a global swap market whose size is estimated at $600 to $700 trillion, SEF operators and observers note that trading volumes have increased from $0 as of Oct. 1, 2013, the day before the first SEFs commenced operations.

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CFTC Close to ‘Game-Changing’ Guidance on SEF Anonymity

By Joe Rennison
February 11, 2015, Risk

Agency could prevent Sefs from revealing identities of order book participants - a practice some buy-side firms claim is a way of preserving dealer interests.

The Commodity Futures Trading Commission (CFTC) is close to finalising guidance that could require parties trading on swap execution facilities (Sefs) to remain anonymous, according to three industry sources – a move one describes as a "game changer".

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SEFs Face Reckoning With Unintended Consequences Warns Report

By Elliot Holley
February 9, 2015, Banking Technology

Like opening Pandora’s box, the emergence of swap execution facilities in US derivatives markets has brought unexpected consequences and problems as well as benefits. In some cases, asset managers are actively looking to avoid trading on the new platforms and even turning to other asset classes, according to a new report by OpenLink.

Swap execution facilities emerged as a new kind of US trading platform in the aftermath of the 2009 G20 agreement in Pittsburgh, which sought to reform and regulate OTC derivatives markets by mandating reporting to trade repositories and central clearing on CCPs and pushing trades onto regulated platforms wherever possible. Although the purpose of SEFs was to improve transparency and reduce the size of opaque OTC markets, research suggests that the fragmentation of the market into multiple SEFs has created costs and inefficiencies that are impacting the ability of asset managers to trade.

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FIA Offers Guidelines for Swaps Clearing

By Cian Burke
February 4, 2015, FOW

Proposals follow months' of consultations with clearing houses and SEFs. 

Trade body the Futures Industry Association has published a set of recommendations aimed at increasing efficiency in clearing over-the-counter derivatives.

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TABB Forum: CFTC’s Giancarlo Seeks to Abolish MAT Process

By Gabriel Suprise
February 2, 2015, GlobalCapital

The made-available-to-trade process is not fit for purpose and should be eliminated, according to Christopher Giancarlo, Commissioner at the Commodity Futures Trading Commission, speaking at the TABB Forum 2015 Fixed Income conference in New York.

“Congress’ trading execution requirement is merely conditioned by the simple logic that a clearing mandate a swap must be executed on a SEF, provided the particular swap is sufficiently liquid that some SEF makes available to trade,” the Commissioner said.

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Canada Plans to Copy U.S. Swaps Trading Regime

By Cian Burke
January 30, 2015, FOW

Canadian regulators are looking to harmonise their rules with international standard. 

The Canadian Securities Administrators (CSA) looks set to emulate the US Swap Execution Facilities (SEFs) after it outline a proposed regulatory framework for over-the-counter trading (OTC) facilities. 

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SEFs Prepare for Build Out

By Mike Kentz
January 24, 2015, IFR

Swap execution facilities in the US are poised to build out their trading functionalities and launch products in the early stages of 2015 in an effort to stay relevant in the soon-to-consolidate market that will eventually encompass the bulk of the US$693trn over-the-counter market.

Tradition, one of five major inter-dealer brokers in the rates market, intends to build out an electronic request-for-quote system for interest rate swaps in the early stages of 2015, though company officials said they do not have a specific timeline.

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U.S. Commissioner Wetjen Wants Rules on Foreign SEFs

By Cian Burke
January 21, 2015, FOW

Wetjen comment came after Tocom was registered as a foreign board of trade.

Mark Wetjen, a commissioner at the Commodities Futures Trading Commission (CFTC), has called on the US regulatior to formalise its rules for foreign swap execution facilities (SEF).

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