TeraExchange, a US based multi- asset execution venue has been granted Swap Execution Facility (SEF) registration. The Commodity Futures Trading Commission, announced that it had approved the venue and gave temporary registration as a SEF.
TeraExchange was one of the early firms that submitted their SEF application. According to CFTC filings, the firm submitted its application on the 29th of July. After an eight and a half week wait, the firm received its approval.
TeraExchange promotes its SEF on its corporate website, stating its many advantages:
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- Central limit order book SEF
- Pre-trade checks
- Market makers and direct orders
Christian Martin, CEO of TeraExchange, commented about the firms SEF, and said in a statement to the media, “We are committed to being a leading SEF by delivering the most transparent and innovative marketplace available. We are providing customers across the entire marketplace with a robust solution that has been tailored to meet the new regulatory requirements, as well as the myriad needs of traders.”
TeraExchange was established in 2011 in Summit, USA. The firm is classified as an exempt board of trade (EBOT) thus, giving it exemption from certain regulations. The CFTC defines it as follows, according to its website: “Transactions by eligible contract participants in a certain narrow list of selected commodities may be conducted on an exempt board of trade (EBOT) and be exempt from most CFTC regulation.”
SEFs were formed as trading venues under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, to provide greater pre-trade and post-trade transparency to the swaps market.
TeraExchange will be required, as will all future temporarily and fully registered SEFs, to demonstrate continued compliance with all applicable provisions of the Commodity Exchange Act and CFTC regulations, including part 37, and any future regulations, amendments, guidance and interpretations issued by the CFTC. As a next step, the CFTC will undertake a substantive review of TeraExchange’s application for full registration.