Swap Execution Facilities Regulation - Comment Letter - CME Group - February 13, 2012

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Timeline, Made Available to Trade Provisions
Final Rule Issue First MAT Determination First Compliance Date
June 4, 2013 January 16, 2014 February 15, 2014

Process for a Designated Contract Market or Swap Execution Facility to Make a Swap Available to Trade
February 13, 2012

Key points from the comment letter:

  • "While it may ultimately be necessary for the Commission to adopt a rulemaking to address a MAT determination, we believe that the Commission’s release is premature."
  • We fundamentally disagree with the Commission on the issue of who should make that determination. Specifically, we believe that the Commission – not any SEF or DCM – should make the determination as to whether a particular swap is required to be traded on a DCM or SEF. Having this determination made by the Commission will eliminate the motivation that might exist for a SEF to determine that it has made a swap available to trade and force the market to trade such swap on a SEF before it is appropriate in order to attempt to gain a first mover advantage."
  • "The Commission proposes to define “economically equivalent swap” as a “swap that a SEF or DCM determines to be economically equivalent with another swap after consideration of each swap’s material pricing terms.” (Release at 77732.) We believe that the Commission’s Release is premature with respect to this issue..."


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