CFTC weighs changes to SEF rules
Tim Massad, chairman of the Commodity Futures Trading Commission, gave several speeches in April on the need to adjust the CFTC's rules for swap execution facilities. He announced several actions to fine-tune the SEF rules, including a no-action letter on error trades and extended relief for confirmation data reporting, and revealed that the CFTC is working on a rule to clarify reporting obligations for cleared swaps.
He also said that the CFTC is discussing “possible actions” to address the practice of post-trade disclosure of counterparty information, a major concern for some buyside institutions, but did not indicate what those actions might be. Massad also said he has asked the CFTC to review the made-available-to-trade process for determining which swaps should be subject to mandatory trading on SEFs, and said the CFTC staff is looking at ways to provide more flexibility in methods of execution.
CFTC Commissioner Sharon Bowen issued a statement on April 23 commenting on the post-trade name give-up issue. Bowen said she has not heard a “compelling justification” for this practice and believes there is “broad support” for ending it.
CFTC Commissioner Mark Wetjen also issued a statement on SEF-related issues, saying that the CFTC should take more steps to promote SEF trading. He mentioned in particular ending the name give-up practice, allowing trades to be executed via “work-ups,” and revising the conditions for the floor trader exemption.
