CFTC May Push Interest-Rate and Credit Swaps onto SEFs

According to Bloomberg, the Commodity Futures Trading Commission (CFTC) is set to push interest-rate and credit swaps onto SEFs in the near future.

While the CFTC is currently reviewing the plans, they haven’t found any reason to object to them as of yet. And with the first of these new requirements being instituted on January 16th, it seems unlikely that they will find one.

Addinginterest-rate and credit swaps to the list of trades that must be monitored is another step toward market transparency for the CFTC, which has been attempting to take the risk out of swaps trading ever since it played a major role in the 2008 financial crisis.

Which swaps need to be traded over SEFs has been a debate within the industry since the mandate was put in place back in October. Packaged swap deals are currently still under debate, as the Securities Industry and Financial Markets Association and International Swaps and Derivatives Association asked for them to remain off SEFs back in November. And with people saying that the industry doesn’t currently have the infrastructure to monitor them properly, they may remain off the platforms for some time.

CFTC Commissioner Scott O’Malia has called for an agency advisory committee on January 21st to oversee the decisions made on interest-rate and credit swaps and to get industry feedback.