The U.S. Commodity Futures Trading Commission (CFTC) today announced that the Delaware-based Clear Markets North America, Inc. (Clear Markets), has been approved to operate as a fully registered Swap Execution Facility (SEF), according to an official CFTC statement.
Clear Markets, a wholly-owned subsidiary of Clear Markets Holdings, Inc., previously obtained temporary registration status on May 2014. As a next step, the commission undertook a substantive review of company’s application for full registration.
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The US watchdog has issued recently a series of orders granting registration to a large number of platforms to operate as Swap Execution Facilities, better known as SEFs. However, much of the trading volume in this realm is still concentrated among a few big players. The list includes ICAP, BGC Partners, Tullett Prebon, CME Group, ICE and Bloomberg, with the latter capturing nearly 50 per cent of plain vanilla swap trades last year.
According to the CFTC statement, Clear Markets has demonstrated compliance with the Commodity Exchange Act (CEA) and the commission’s regulations applicable to SEFs, which are required to comply with the core principles in Section 5h of the CEA. Following the new registration order, Clear Markets also shall comply with all representations and submissions made by it in support of its application for registration as a Swap Execution Facility.
SEFs are trading entities that clear OTC products, such as OTC interest rate and credit swaps under the CFTC’s regulatory oversight. The new facility emerged out from the Dodd- Frank Act and Consumer Protection Act of 2010 which deemed NDFs as a financial instrument requiring mandatory clearing, providing greater pre-trade and post-trade transparency to the swaps market.