The U.S. Commodity Futures Trading Commission moved to require more swaps starting this month to be bought and sold on new trading platforms designed to boost price competition between banks and other financial firms.
The CFTC laid out deadlines starting May 16 for when package transactions including multiple swaps must occur on the swap-execution facilities operated by firms including ICAP Plc (IAP), GFI Group Inc. and Cie. Financiere Tradition SA. The agency said transactions that involve swaps and U.S. Treasury securities must meet the requirement on June 16, while other types of deals were given until mid-November.
The decision will help “bring transparency and competition to the swaps market,” Mark P. Wetjen, the CFTC’s acting chairman, said in an e-mail statement. The phase-in process will help provide an “orderly transition.”
The Dodd-Frank Act sought to increase price competition and transparency in the swaps market by having most trades occur on the venues. Rules imposed under the 2010 law require the platforms to offer impartial access to Wall Street banks and traditional buyers including mutual funds and hedge funds.
The CFTC had earlier delayed the trading requirement for package transactions. Estimates from the Managed Funds Association and the CFTC showed that a quarter to a half of the interest-rate swaps market involved packaged transactions.
Platforms owned by trueEX LLC, Tradeweb Markets LLC, MarketAxess Holdings (MKTX:US) Inc. and Bloomberg LP, parent of Bloomberg News, have also registered with the CFTC.
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