SEFs (swap execution facilities): Special focus
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SEFs (swap execution facilities): Special focus

Swap execution facility (SEF) regulations, intended to increase transparency and reduce swap market risk, have been reported to impact market makers’ margins and liquidity, creating wider spreads for end-users. Here, Euromoney follows the CFTC’s SEF regulation timeline, presents market participants’ concerns, and reports on opportunities for doing business.

JPMorgan's David Hudson: Meet Dimon’s disruptor-in-chief

October 2017


“We have already tried some things that haven’t worked out, such as our SEF aggregator that shows the best price across all SEFs and allows clients to execute on the best. We thought it was a good idea but it didn’t really take off. Clients picked the SEFs they liked and stuck with them,” says Hudson.


CFTC chairman vows to loosen US regulatory straitjacket

February 2017

Speaking at Profit & Loss’s SEFCon VII, Christopher Giancarlo, acting chairman of the Commodity Futures Trading Commission (CFTC), outlined the direction he would take the regulator if he is made permanent chairman.

Winners and losers emerge from fragmented FX swap rules

June 2015

Inertia around the mandating of FX activity on swap execution facilities (SEFs) by the Commodity Futures Trading Commission (CFTC) continues to favour Europe as a trading location.

2014: a year in data – SEFs

January 2015

In August, Euromoney released a study into  the launch of swap execution facilities (SEFs). One of the key findings was that participants expect the volume of FX trades done via SEFs to increase slowly over the first year, and accelerate thereafter. Data from the Futures Industry Association show that, so far, the expectations of market participants are coming to fruition. What will 2015 hold?

FX swaps: Market players grapple with fragmentation risk

October 2014

Market participants are relatively relaxed about the impact of last year’s change to the US trading model, relative to the dire warnings from the global trade association for OTC derivatives, but global market fragmentation remains a risk.

SEF report: The state of the global market

August 2014

Euromoney Research Group presents a detailed report into the swap execution facilities (SEFs) sector. The bespoke content offers insight into the confusion over the adoption of these rules and looks at the future opportunities for all market participants.

Q&A: CFTC commissioner Scott O’Malia

August 2014

When Scott O’Malia approved the final swap execution facility (SEF) rules in August 2013, he did so “reluctantly”. His fears were realized when the regime quickly wrought international havoc. In one of his last interviews before leaving

the US Commodity Futures Trading Commission (CFTC), he relives the ordeal of bringing these rules to market and highlights many of the challenges still to come.

Departing O’Malia stresses SEF data challenge

July 2014

CFTC commissioner admits data collection ‘poor’; calls for better cross-border cooperation.

Pulse Survey: Economic pickup seen as key to FX volatility
Published May 2014

Facing difficult trading conditions and rising regulatory costs, FX market participants are hoping a rising economy will give business a boost.

Banks' FX cash cow runs out of milk
Published May 2014

Market rigging lawsuits, trader suspensions and a move to swap execution facility trading are hurting banks’ ability to make money in foreign exchange, warn analysts.

The more business that is done electronically, the lower the margins
-Seb Walker, partner at consultancy firm Tricumen
Banks' FX cash cow runs out of milk

SEF teething problems frustrate FX market amid liquidity fears

Published March 2014

The CFTC is close to finalizing long-awaited rules for FX derivatives that will herald a seismic shift to trading these instruments on SEFs – but those already trading on SEFs are frustrated with teething problems and unintended consequences, including illiquidity and extraterritoriality concerns.

ESMA official responds to liquidity fears
Published February 2014

"In the FX market, non-deliverable forwards (NDFs) have been affected since the launch of swap execution facilities (SEFs) under the US Dodd-Frank Act"

Foreign exchange market enters new dawn post-footnote 88

Published December 2013 Insight

A new Isda report reveals how the fight for currency liquidity is on as foreign exchange trading venues struggle to adapt to the new regulatory landscape 


Regulation: SEF rules hit non-US cross-border trading
Euromoney November 2013

Firms seek out non-US counterparties; Rules trigger move away from multi-dealer platforms

Transparency poor amid FX SEF launch
Published October 2013

A lack of consistency in how new swap execution facilities (SEFs) report transaction volume data is making it hard for foreign exchange participants to conduct aggregate level analysis with respect to pricing and traded volumes, traders say. 

Federal shutdown compounds footnote 88 confusion
Published October 2013 Insight

When the Commodity Futures Trading Commission (CFTC) created footnote 88 in the final US rules governing swap execution facilities (SEFs) – requiring all multi-lateral trading facilities to register as SEFs whether they trade regulated swaps or not – the prospect it would be closed on the day of the registration deadline was probably not on the agenda. 

Buy-side frets as block exemption proves unsatisfactory
Published September 2013

The deadline for swap execution facility (SEF) registration approaches and industry bodies are lobbying regulators over a perceived loophole, which they say could reduce choice and lead to higher trading costs.

Clarification of SEF rules signals lift-off for FX options platforms
Published May 2013

The final clarification of the long-awaited rules on swap execution facilities (SEFs) could prompt more trading venues to enter the FX options market.

Swap futurization could spell imperfect hedging
Published April 2013 Insight

The effect of the proposed regulation of swaps under the Dodd-Frank Act could push investors towards the futures market, leaving corporates and asset managers with imperfectly hedged positions.

Mifid: Waiting on Europe
Published January 2013 Insight 

As the US moves toward mandatory over-the-counter trading on swap execution facilities this year, European derivatives dealers are still waiting for European authorities to clarify the regulatory pipeline as fears over market liquidity grow.

New OTC swaps clearing rules to make cleared FX deals more efficient

Published August 2012 FX News

The market for over-the-counter (OTC) FX futures and options transactions funnelled through a clearing house will become more efficient with the roll out of new rules designed to better insure OTC swaps transactions, says International Swaps and Derivatives Association (ISDA) CEO Robert Pickel.

Currency option platforms prepare for battle

Published August 2011 FX News

The world of regulated swap execution facilities is set to open up for the FX markets in the coming months, as an army of new multi-dealer option trading platforms starts full operations in preparation for new regulations on the trading of over-the-counter derivatives.

FXall ready for FX option regulatory changes, says CEO Weisberg
Published May 2011 FX News

The FX options market will see some profound changes in 2012 when new regulations for mandatory central clearing and electronic execution are finally implemented, says Phil Weisberg, chief executive officer of multi-dealer execution platform, FXall.

CFTC's Gary Gensler: Banking's enemy #1

September 2010

Gary Gensler is on a mission to make the CFTC the world’s most influential financial markets regulator. He wields an unprecedented mandate to interpret the statute book and thereby shape the future of banking. But his former colleagues in the banking industry claim his quest for power is based on personal ambition, causing him to ride roughshod over their reasonable opinions and creating a template that will bring unnecessary hardship to the financial industry and the broader economy. Hamish Risk interviewed the man many bankers call the “most dangerous man in finance”.

Video interview with Gensler on regulating the OTC derivatives market Published September 2010 Gary Gensler comments on - the objectives of derivative regulation Article VII Dodd Frank - why the CFTC is best placed to reform the derivatives markets - the importance of global co-ordination of regulation - why clearing houses are best equipped to reduce counterparty risk - what qualifies as a swap execution facility

Regulation: Dodd-Frank throws a long shadow on Wall Street

Euromoney August 2010

Central clearing could erode market share; New exchanges set to take on banks.

OTC regulation threatens to shed light on Wall Street

Euromoney March 2010

"...moving OTC derivatives on to regulated exchanges, or regulated electronic trading venues known as swap execution facilities, implies that Wall Street revenues might look quite different this decade than in the last."

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