Are SDPs becoming SEF compliant?

It was only a matter of time, before one of the highly innovative top tier e-trading banks adapted their Single Dealer Platform so as to make it more ‘SEF friendly’, for Interest Rate Swaps.

Whilst the press release focuses on new functionality, for Fixed Income IRS trading, the wording looks very much like Deutsche Bank, with the announcement of the launch of Autobahn’s new ‘Prism guaranteed Liquidity Service’ is positioning this offering if not to be SEF compliant, at least to be highly SEF friendly (whilst not actually becoming a SEF) – and no doubt they will be the first of many to come!

To be clear, I am not suggesting that Autobahn will be registered as a SEF. Rather, I am suggesting that by enhancing their Single Dealer Platform, and delivering:

  • Enhanced levels of pre-trade transparency
  • Algorithmic interaction with an aggregated depth of liquidity
  • Links to Clearing Houses
  • Links to Post Trade Reporting Systems

Might be enough to enable an enhanced SDPs to meet the spirit of what an SEF is meant to be, without being one, and yet still satisfy the CFTC – we shall see!

Who will be next?

3 Responses

  1. This aint more of a SEF than any other SDP its just firm pricing – whether it could qualify for a SEF in future is another question

  2. Your right, it’s not a SEF.

    But the wording….the combination of DB ‘principal’ liquidity with algo execution against aggregated liquidity, plus the marketing speak of ‘unprecedented’ levels of transparency, are all good SEF “like qualities”.

    Of course it needs more to be a SEF, but we shall see.

  3. All these features have been available to Interest Rate users on MorganDirect for over a year.

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