According to Reuters, the Commodity Futures Trading Commission (CFTC), who has by and large refused to budge on its October 2nd deadline for SEF’s to implement its new rules, will allow for a delay in a few of its initiatives.
In an effort to increase transparency and minimize the risk associated with the swap trade market, often blamed as one of the leading factors of the 2008 financial crisis, the CFTC has been working quickly to create Swap Execution Facilities, platforms where all swap trading will be handled and monitored. Before the CFTC, much of the swap trade market was handled over the phone—a $630 trillion dollar market going almost completely unchecked. While negotiation will still be allowed over the phone, all trading must be entered into systems, creating a much simpler, and readily accessible, set of records.
The delays will affect the required reporting of foreign exchange swaps as well as equity swaps, by one and two months, respectively. The largest part of the market, fixed income and credit swaps, will be unaffected, and will begin being reported on October 2nd.
Lastly, in an attempt to further smooth the transition into this new and less risky form of business, the CFTC has allowed for a delay in documentation of onboarding by one month.