Tullet Prebon has become the second inter dealer broker and the ninth financial services firm to submit its SEF application to the regulator, the Commodity Futures Trading Commission. The firm has registered its SEF, tpSEF Inc, which will offer trade execution on FX and interest rate swaps. SEFs are a by-product of the Dodd Frank rulings issued in 2010, which according to the legislation, swap contracts are to be executed on a designated contract market and face mandatory clearing.
The SEF will operate from its headquarters in New Jersey. Tullet Prebon’s SEF readiness committee has been actively working with regulators on the proposed changes for over three years. The firm stated that it is “in dialogue with CFTC about SEF structure and application,” in its half yearly earnings presentation published on the 30th of July 2013.
The firm later went on to say that: “Tullet Prebon’s current activities require us to register as a SEF.” It is understood that Tullet Prebon has applied for a broad range of products.
The new venue will be headed by Shawn Bernardo, Tullett Prebon’s Senior Managing Director of e-broking and member of Tullett Prebon’s North American Executive Committee and Chairman of the Wholesale Markets Brokers’ Association (WMBA), who has been named as the SEFs Chief Executive Officer.
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In addition, Tullet Prebon has appointed several senior figures from the industry including; David Clark, John Spencer, and James Quaille and directors, John Abularrage and Christian Pezeu.
Shawn Bernardo, Chief Executive Officer of Tullett Prebon’s SEF, said in the press briefing: “Over the past three years we have provided regulators with industry insight into the interdealer broker marketplace and have testified before Congress as the new regulations were being considered. Tullett Prebon looks forward to working with the CFTC to ensure that the company is able to continue offering its customers swap execution services in accordance with the new regulations.
Tullet Prebon joins the growing list of firms that have applied for SEF status with the CFTC. ICAP, the worlds largest inter dealer broker has stated that it is working on its application and will submit it before the 2nd of October deadline.
Other firms who have submitted their application include; Integral, Tradeweb, MarketAxess Javelin Capital Markets, TerraExchange, Bloomberg, State Street and GFI. Bloomberg was the first firm to receive SEF approval from the CFTC in July 2013.