CFTC Proposed Rule: Process for a Designated Contract Market or Swap Execution Facility to Make a Swap Available to Trade

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Gavel.png 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.
Timeline, Made Available to Trade Provisions
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.

Contents

Background

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:

  1. Whether there are ready and willing buyers and sellers;
  2. The frequency or size of transactions on DCMs, SEFs, or of bilateral transactions;
  3. The trading volume on DCMs, SEFs, or of bilateral transactions;
  4. The number and type of market participants;
  5. The bid/ask spread;
  6. The usual number of resting firm or indicative bids and offers;
  7. Whether a DCM’s trading facility or a SEF’s trading system or platform will support trading in the swap; or
  8. Any other factor that the DCM or SEF may consider relevant.[1]

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

References

  1. Process for a Designated Contract Market or Swap Execution Facility to Make a Swap Available to Trade under Section 2(h)(8) of the Commodity Exchange Act. CFTC. Retrieved on December 6, 2011.

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