Interdealer, ICAP, has announced that it has filed an application with the CFTC to be a Swap Execution Facility (SEF) in compliance with the Dodd-Frank Act. According to the firm, ICAP plans on operating a SEF across multiple assets,including interest rate swaps, credit default swaps, equity derivatives, commodities, and NDFs. The SEF will be operated using a request for quote and central limit order book system, as well as offering block trade capabilities, electronic crossing and execution via brokers. The SEF will be headquartered in New Jersey.
With the news, ICAP becomes the latest firm, among a growing list of companies that have applied for SEF status from the CFTC. While essentially electronic trading platforms, the SEFs apply central clearing and pre and post trade credit monitoring to meet Dodd-Frank rules.
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Heading the ICAP SEF is John Nixon, Group Executive Director, Americas at ICAP, who was appointed Chairman, CEO and President of the SEF. Commenting on the news, Nixon stated in ICAP’s public statement that “the filing of our SEF application is a milestone for our organization, but it is also very much a logical evolution of our longstanding efforts to serve the needs of the OTC derivatives marketplace. Since its foundation, ICAP has developed marketplaces designed to provide its customers with effective and efficient means to take and manage risk. ICAP has invested heavily in technology that has permitted it to offer customers the ability to execute transactions on a fully electronic basis, or with the assistance of a broker. With our expertise and experience in operating regulated markets, the quality of our technology and the depth of our customer relationships, we look forward to our SEF serving as a leading facility for the trading of swaps in the new regulated landscape.”