Bank-Backed Initiative Eases SEF Migration

Bank-Backed Initiative Eases SEF Migration

A newly created industry initiative backed by banks, has been launched with the hope  to standardize administrative messages on swap execution facilities (SEFs). The initiative also has a goal of automating exchanges between dealers and clients across multiple swaps platforms.

The action, known as the Trading Enablement Standardization Initiative (TESI), will be facilitated by trading technology consultancy Etrading Software in conjunction with FIX Protocol Limited (FPL) to develop the administrative messages for SEFs.

The TESI is backed by a group of leading banks, and aims to avoid erros caused by manual inputs, while simplifying the use of SEFs for buy-and-sell side firms by creating an open industry standard protocol for client and trader enablement on SEFs.

Managing partner of Etrading Software, Sassan Danesh told The Trade News:

Broker dealers have realised that when SEFs go live the bilateral trading relationships with the buy-side need to migrate to these new platforms, and this will necessitate setting up and activating buy-side firms and their sell-side counterparts on these systems, which is a large-cale undertaking.

Currently, members who have joined the new TESI movement include BNP Paribas, Commerzbank, Credit Suisse, Goldman Sachs, J.P. Morgan, RBS, Société Générale, and UBS. The first major goal of the working group will be to ensure the smooth migration of swaps trading onto SEFs.

Danesh told The Trade News, “TESI was created to standardise this process and the administrative messages that will define the trading relationship between the buy-side and the sell-side.”

Looking forward, the later phases of the initiative may be broadened to include other OTC cash and derivative markets. For now, the group intends to focus on fast client enablement, increasing operational efficiencies, and streamlining straight-through-processing on SEFs.

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About The Author


Felix Shipkevich

Felix Shipkevich

Mr. Shipkevich’s practice focuses on regulatory, transactional, and enforcement matters in the fields of futures, commodities, and derivatives. He works with Futures Commission Merchants (FCMs), Retail Forex Exchange Dealers (RFEDs), Introducing Brokers (IBs), Commodity Pool Operators (CPOs), Commodity Trading Advisors (CTAs), Swap Dealers (SDs), Swap Execution Facilities (SEFs), and domestic and offshore hedge funds. Mr. Shipkevich guides clients on procedures related to registration with the U.S. Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), as well as domestic and international regulators in local jurisdictions. Mr. Shipkevich prepares and helps implement compliance, anti-money laundering (AML), and Electronic Trading Systems (ETS) procedures for clients in the commodities and derivatives fields.

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