This year, Valentine's Day marks the end of the over-the-counter market's long, largely monogamous love affair with the phone. When trading restarts in the US on February 18, following a national holiday, many interest rate swaps will have to trade on a swap execution facility (Sef) – and, as with any new relationship, it may start slowly.
In theory, the arrival of the mandate – set in train by made-available-to-trade (Mat) rulings from the Commodity Futures Trading Commission (CFTC) in January – should see a night-to-day transformation, with Sef volumes leaping suddenly. But in the days leading up to the deadline, only a small slice of dealer-to-client swaps covered by the Mat rulings were voluntarily trading on Sefs, and operators of the platforms are not expecting the rest to come their way overnight.
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