Dodd Frank: why not a virtual SEF in a browser?


Not surprisingly, just about every bank that I talk to these days is hotly debating the impact that Dodd Frank is likely to have on single bank platforms for fixed income. (That’s assuming that the Republicans don’t manage to repeal or permanently cripple Dodd Frank after the midterm elections).

Within one year, the legislation requires all swaps to be traded through a SEF. Just as a reminder, Dodd Frank defines a SEF as a

“facility, trading system or platform in which multiple participants have the ability to execute or trade Swaps by accepting bids and offers made by other participants that are open to multiple participants in the facility or system, through any means of interstate commerce”

Not exactly crystal clear, but on the face of it why wouldn’t this apply to a browser in which online trading offerings from three dealers were open in three tabs? Not good enough? Ok, then combine the quotes in a single list on a single page. Very easy to do if all the banks happen to be using Caplin technology.

No back-end technology required. Simply aggregate the data in the browser.

Hmmm…

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