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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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Comment: SEFs 2015 outlook: Industry Sees More Flexible Execution Rules; Harmonization

By Henry Engler
January 13, 2015, Reuters

Regulatory efforts to simplify existing swap mandate rules in order to reduce fragmentation between the U.S. and Europe are likely to dominate the focus of participants in the swaps execution facility (SEF) market in 2015.

Indeed, harmonization and cross-border issues appear to be at the top of the agenda for the International Swaps and Derivatives Association (ISDA). In several speeches since becoming head of the industry group last year, Scott O’Malia, a former commissioner at the Commodity Futures Trading Commission (CFTC), has made it clear that for him regulators need to ensure that cross-border oversight is based on risk and not geographic location.

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Swap Markets Debate Anonymous Trading in SEFs

By Ivy Schmerken
January 5, 2015, Wall Street & Technology

Capital Markets Outlook: With more than a year of SEF trading up and running, swap participants are looking at standardized Market Agreed Upon or "MAC" swap products, to fuel anonymous order book trading next year.

Challenge: Buy side firms are being asked to disclose their identities in the swaps market during the post-trade process, even though trading is supposed to be anonymous on order books.

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Not All SEFs Are Equal

December 16, 2014, Markets Media

Comparing volumes at swap execution facilities is tricky because reported volumes can vary greatly depending on the type of SEF, the time of year, and the types of swaps being executed.

One significant change over the last few months is that some SEFs have seen great increases in usage of compression, which are a way for end users to execute large packages of risk neutral transactions in bulk.

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Post-Trade Headwinds Affect OTC Markets

December 10, 2014, Markets Media

The ongoing transformation of the OTC industry from a bilaterally traded and cleared model to an exchange-traded and centrally cleared model is fraught with operational challenges.

“There’s a lot of work in connectivity in building out SEFs (Swap Execution Facilities), and not just to CCPs,” or central counterparties, said Henry Ann, head of rates at GFI Swaps Exchange.

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CFTC Commissioner Calls for Foreign SEF Regime

November 20, 2014, The Trade

A top regulator at the US derivatives watchdog has called for the establishment of a foreign regime for the execution and clearing of off-exchange derivatives to mitigate the global market from fragmenting.

Mark Wetjen, a commissioner at the Commodity Futures Trading Commission (CFTC), became the latest high-profile regulator to criticise his agency’s swap trading rules which have resulted in foreign investors shying away from using US electronic venues known as swap execution facilities (SEFs).

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SEFCON V: Tech's Impact on SEFs Keeps Growing

By Dan DeFrancesco
November 13, 2014, Waters Technology

With one year in the books, industry members discussed how technology has affected swap execution facilities (SEFs) and what to expect going forward.

Swap execution facilities (SEFs) have now been in place for a year, and it's becoming increasingly clear that while liquidity is king, technology has a crucial role to play, according to a panel of industry members that gathered to discuss SEF technology trends at the Sefcon V conference yesterday in New York, organized by the Wholesale Markets Brokers' Association Americas.

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SEFCON V: SEF Registration, No-Action Letters Slows Business

By Gabriel Surprise
November 13, 2014, GlobalCapital

The Commodity Futures Trading Commission needs to grant permanent registration for swap execution facilities in order to avoid hindering the evolution of businesses following the implementation of Dodd-Frank. Additionally, the slew of continuing no-action letters is resulting in regulatory uncertainty, according to speakers at SEFCON V.

"The longer the SEF registration process goes on, the more issues seem to pop up," said Matthew Kulkin, senior associate at Squire Patton Boggs. "At a certain point, market participants are going to want to see product registration so that they can start to carry out the onboarding process and select the liquidity providers they want to use.”

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Bloomberg Says Swaps Trading Platform Experiences One-Hour Outage

By Douwe Miedema and Mike Kentz
November 12, 2014, Reuters

A trading platform run by Bloomberg LP for swaps, a type of derivative, was down for almost an hour on Wednesday, the data provider said.

Trading on Bloomberg's so-called Swap Execution Facility, or SEF, experienced an outage for just under an hour from 9 a.m. EST (1400 GMT), a spokesman said, because of problems with formatting data for credit default swaps, or CDS.

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