Playing It SEF: ICE Swap Trade Goes Live In Anticipation of Approaching CFTC Deadline

Subsequent to last week's approval by the CFTC of ICE Swap Trade's application to register as an SEF, the company

Today, just over a week after the US Commodity Futures Trading Commission (CFTC) granted IntercontinentalExchange (ICE) temporary registration as a swap execution facility (SEF), the company announced that its SEF, ICE Swap Trade, has been launched.

The US regulatory authorities have become somewhat adept with regard to processing the applications of several North American institutional firms wishing to register as an SEF, with a large number having been provided with temporary registration during the course of the last few weeks, in preparation for the required specifications laid out in the Dodd-Frank Act.

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The original SEF proposal required customers to submit requests for quotes from at least five others to allow “buyers and sellers to meet and compete in the marketplace, just as they do in the futures and securities marketplaces,” according to a public statement made by Gary Gensler, the CFTC’s Chairman, prior to the meeting held by the regulatory authority in May this year, during which the SEF rules were cemented.

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SEFs now have until October 30 to comply with the reporting requirements set out in the rulings, and for equities and commodities, the deadline extends to December 2.

“The launch is the culmination of a collaborative effort among ICE, our customers and our partners to create a marketplace for our energy and credit customers that enables them to adapt to regulatory change with confidence,” said Thomas Farley, Senior Vice President of Financial Markets at ICE, in a commercial announcement today.

“The readiness of our solution was evident in the smooth transition and customer adoption,” he concluded.

ICE Swap Trade offers various index credit default swaps (CDS) across North American, European and emerging market instruments and intends to offer single-name CDS in the future. The company has confirmed that non-cleared contracts that continued to trade on ICE OTC Commodity Markets began trading on ICE Swap Trade yesterday.

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