Swap Execution Facilities Regulation - Comment Letter - MarketAxess - March 8, 2011

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Dodd-Frank Timeline, Core Principles for SEFs, CFTC
Final Rule Issue Effective Date Compliance Date
June 4, 2013 August 5, 2013 October 2, 2013 (one-year phase-in of RFQ minimum); Also see No-action relief note

Core Principles for SEFs, CFTC
March 8, 2011

From the comment letter:

MarketAxess argues that "flexibility should be central to SEF regulation and the CFTC's administration of the SEF Core Principles. In respect to trade execution, we prefer the maximum flexibility allowing an RFQ to be submitted to one other market participant, as reflected in Commissioner Sommers' proposed language and the SEC's proposal." Among others, they provide the following suggestions:

  • Annual market participant audits by SEFs should not be required; auditing SEF market participants instead should be shifted to NFA or to FINRA
  • SEFs should be permitted to rely on representations from their market participants on status as an eligible contract participant; eligibility to qualify for the commercial end user exemptions from the clearing and execution mandates; compliance with the clearing mandate; existence of credit documentation and ability to post collateral for uncleared swaps
  • SEFs should be able to list new swaps not only on an individual basis, but as a class of transactions
  • A SEF should have a duty to monitor only activity on its market, not those operated by its competitors.

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