CFTC Proposed Rule: Process for a Designated Contract Market or Swap Execution Facility to Make a Swap Available to Trade
|FINAL RULE: This page refers to the proposed rulemaking on the "Made Available to Trade" provision. For a summary of the final rule, click here.|
|Final Rule Issue||First MAT Determination||First Compliance Date|
|June 4, 2013||January 16, 2014||February 15, 2014|
At its December 5, 2011 open meeting, the CFTC approved a proposed rulemaking that would further define the process by which a swap execution facility or designated contract market shall make a swap "available for trade" under Section 2(h)(8) of the Commodity Exchange Act.
Section 723 of the Dodd-Frank Act mandates that, pursuant to CFTC regulations, all swaps eligible for clearing shall be executed on either a swap execution facility or a designated contract market. At its December 16, 2010 open meeting, the commission approved a proposed rulemaking regarding the core principles and other requirements for SEFs. This proposal included a provision regarding the definition of "made available for trading." Subsequent to the proposal, market participants have requested a clarification of the requirements of SEFs and DCMs.
The Proposed Rule
This proposed rule would require the SEF or DCM to submit a determination regarding the availability of a swap for trading to the commission for review. The SEF or DCM should consider the following eight factors with respect to a swap:
- Whether there are ready and willing buyers and sellers;
- The frequency or size of transactions on DCMs, SEFs, or of bilateral transactions;
- The trading volume on DCMs, SEFs, or of bilateral transactions;
- The number and type of market participants;
- The bid/ask spread;
- The usual number of resting firm or indicative bids and offers;
- Whether a DCM’s trading facility or a SEF’s trading system or platform will support trading in the swap; or
- Any other factor that the DCM or SEF may consider relevant.
Public Roundtable to Discuss the “Available to Trade” Provision, January 30, 2012
CFTC staff hosted a roundtable to discuss the "made available to trade" provision on Monday, January 30, 2012.
- View the press release HERE
- View the agenda, with list of panelists HERE
- Read a summary of the meeting and commentary HERE
Related Documents: Fact Sheet, Q&A, and Rule Proposal as it Appeared in the Federal Register