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October 1, 2013

SEFs: A Brief History of Time (One day to go)

WE'RE NEARLY THERE

The October 2nd SEF date is nearly upon us.  It appears the world of SEFs are going live with only a couple CFTC reliefs being granted for trade reporting (no relief for IRS and CDS).  The pace at which new utilities were born and approved by the CFTC seems unprecedented.  So besides my usual update, I thought it would be good to step back and look at the progress of SEFs over the past month. I would ideally like to do a time-lapse video for the registration process, however I only have 4 data-points to work with (my 4 blogs), dating back to the end of August.  So please find below a brief history of the past month and the quite impressive progress of applications and authorizations. To view this article with complete html tables, please click SEFs: A Brief History of Time

 28-Aug-2013

Bloomberg was the first one in the door, approved by the end of July.  A total of 12 SEFs had filed with the CFTC.

 10-Sep-2013

The Tradeweb applications were approved over a full month after Bloomberg.  3 more SEFs put in applications.

 20-Sep-2013

A total of 9 SEFs were now approved, and yet another 3 SEFs lodged their filings.

 01-Oct-2013

With one day to go, 17 SEFs have their applications temporarily authorized.  Only CME and a new entrant (LatAm SEF) remain unapproved.

SWAP EXECUTION FACILITY SUMMARY as of 1st October 2013
  Products Expected  
# Registered Name AKA First Reg Approval Status IRD EQD CRD FXD CMD
1 Bloomberg SEF BSEF 4-Jun 30-Jul Temp    
2 DW SEF Tradeweb / Dealerweb 8-Jul 6-Sep Temp   CDX    
3 TW SEF Tradeweb / Dealerweb 8-Jul 6-Sep Temp   CDX    
4 MarketAxess SEF MarketAxess 12-Jul 16-Sep Temp        
5 trueEX trueEX 15-Jul 20-Sep Temp   CS Fut    
6 GFI Swaps Exchange GFI 19-Jul 13-Sep Temp
7 TeraExchange TeraExchange 26-Jul 19-Sep Temp   CDX  
8 SwapEx State Street 30-Jul 13-Sep Temp      
9 INFX SEF Integral 31-Jul 24-Sep Temp        
10 Javelin SEF Javelin 2-Aug 19-Sep Temp      
11 ICE Swap Trade ICE 2-Aug 20-Sep Temp        
12 tpSEF Tullet Prebon 23-Aug 24-Sep Temp
13 360 Trading Networks 360T 29-Aug 23-Sep Temp        
14 ICAP SEF (US) ICAP 30-Aug 27-Sep Temp
15 BGC Derivative Markets BGC 4-Sep 19-Sep Temp CDX
16 Tradition SEF Tradition 9-Sep 25-Sep Temp
17 Reuters SEF Thomson Reuters / FXall 9-Sep 27-Sep Temp        
18 CME CME Group 17-Sep   Pending        
19 LatAm SEF LatAm SEF, LLC ?? 25-Sep   Pending ?? ?? ?? ?? ??

READ THE PRESS

As I have mentioned before in my blog, the CFTC official filings website often lags the news reports and press releases on industry filings.  In case you are keeping score at home, it may be helpful to also monitor the CFTC press releases, as this is where I was able to confirm the news of ICAP and Reuters being registered.

WHO IS?

Which brings me to the last entrant, LatAm SEF, LLC.  I saw their name mentioned (but not explained) in a couple news reports claiming that only 2 SEFs are not yet approved.  Their name did not ring a bell so I head to the CFTC website, where there are no associated documents or press releases related to their filing.  I managed to find public records stating that they incorporated in Delaware on 11-Sep-2013.  However that is all I can find.  Google is unable to provide anything further. I am keen to learn more about LatAm SEF.  I would be grateful if any readers would let me know in the comments section who this SEF is, what they are offering, which DCOs they intend to use, and any other related information about them.  I want to offer a reward to the first person to yield information, ahead of any CFTC public documentation I can find available. [This is a reward from Todd at ClarusFT, not OTC Space I have to point out ;-)] The first person to give such information will win a one month free subscription of the Clarus SDRView Professional service.

MISSED THE BOAT FIRST SAILING

I am not sure who is left to be added to the list.  I've read some press on FX Week about a couple FX Options platforms struggling with the particular circumstances surrounding FX, but I have to think there will be some more entrants in the weeks to come.

SO WHAT HAPPENS NEXT?

By many accounts, October 2 should turn out to be a snoozefest.  The Made Available to Trade (MAT) designations are not due to come about until late Q4 at the absolute earliest, and as Kevin McPartland points out in his excellent post, doing so during the holiday season would seem a bit daft.  I think the SEFs have enough to work out, both on the technical/integration aspects of their platforms as well as client onboarding, to think we're going to see anything exciting happen any time soon.

MY PARTING THOUGHT

Come October 2nd, I wonder if there will be anyone out there who will both (a) trade a swap on a SEF and (b) buy some Obamacare online?

TOD SKARECKY

Todd Skarecky, ClarusFT

 



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