EBS and Reuters/FXall Jan 14 FX vols (record day for FXall)


The three main OTC FX platforms have now reported their Jan 2014 volumes.

All three platforms delivered strong double-digit pct gains in volumes, with FXAll recording it’s highest single day trading volumes. The individual platforms results were as follows: Continue reading

Final Volcker Rules on Proprietary Trading


Five US agencies have released the final version of section 619 of the Dodd-Frank Act that governs proprietary trading, otherwise known as the “Volcker Rule”.

The five agencies being: Board of Governors of the Federal Reserve System, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency and the Securities and Exchange Commission.

The rules would generally prohibit banks from:

  • Engaging in short term proprietary trading of securities, derivatives, commodity futures and options on these instruments for their own account
  • Owning, sponsoring, or having certain relationships with hedge funds or private equity funds, referred to as ‘covered funds.’

The rules provide exemptions for certain activities which include; market making, underwriting, hedging, trading in certain government bonds, and organising and offering a hedge fund or private equity fund.

The rules however, limit these exemptions if they involve Continue reading

What next after SEFs?


Just finished listing to an interesting webcast on Global OTC market reforms, and where next after the US and SEFs?

Celent analyst Anshuman Jaswal, gave overview of market, SEF volumes to date, and possible differences in regulatory treatment and approach in Europe and Asia.

Some key points form slide deck and a couple of slides below.

SEF and OTFs are critical components in evolution of the market from OTC non-standardised bilaterally cleared to standardised electronically traded and centrally cleared swaps.

SEF-OTF shift to standardised swaps

Celent slide on shift to standardised swaps

In terms of SEF volumes Continue reading

Main SEFs in violation of equal access rules


Speaking at SEFCon IV conference in NY this week, Gary Gensler, Chairman of the CFTC said that Bloomberg, TradeWeb and MarketAxess are failing to provide impartial access as required under SEF rules.

The three main platforms, are giving the banks too much control over who their customers buy and sell with, in an attempt to preserve the existing dealer-client structure, and that they need to come inline with the CFTC equal access rules.

“What they are doing right now is a violation of Dodd-Frank and our rules,” he said at an event in New York. “They need to come into compliance,” he said. The limits at Tradeweb, MarketAxess and Bloomberg LP give an advantage to the dealers who created the swaps market in the 1980s, Gensler said. “They’re trying to keep exclusive to the dealers.”

More here on Bloomberg and Risk.Net and of course from Kevinonthestreet

Separately, Continue reading

Single-Dealer Platforms evolve and remain relevant


The evolving global regulatory landscape is fundamentally changing how banks operate, the returns available, the business lines and markets in which they can effectively compete, and the way in which they interact with and service their clients via their Single-Dealer Platforms.

For example, under Dodd Frank, standardised swaps trading with clients will migrate from OTC bilateral trading, over to regulated venues such as SEFs. This will see the value proposition and revenue generated for banks likewise shift from a Continue reading

CME granted Temporary SEF Status


Better late than never! The CFTC has granted the CME temporary SEF registration, bringing to 18 the number of platforms that have been granted temporary SEF registration.

No

SEF

Applied

Granted

SEF Status

1

BGC

04-Sep-13

19-Sep-13

Temp Status

2

Bloomberg

04-Jun-13

30-Jul-13

Temp Status

3

Dealer Web

03-Jul-13

06-Sep-13

Temp Status

4

GFI

22-Jul-13

13-Sep-13

Temp Status

5

Ice Swap Trade

05-Aug-13

20-Sep-13

Temp Status

6

Javelin

02-Aug-13

19-Sep-13

Temp Status

7

MarketAxess

15-Jul-13

16-Sep-13

Temp Status

8

SwapEx

30-Jul-13

13-Sep-13

Temp Status

9

Tradeweb

03-Jul-13

06-Sep-13

Temp Status

10

TrueEX

15-Jul-13

20-Sep-13

Temp Status

11

TeraExchange

30-Jul-13

19-Sep-13

Temp Status

12

360T

28-Aug-13

23-Sep-13

Temp Status

13

Integral

31-Jul-13

24-Sep-13

Temp Status

14

ICAP

03-Sep-13

27-Sep-13

Temp Status

15

Thomson Reuters

09-Sep-13

27-Sep-13

Temp Status

16

Tradition SEF Inc

09-Sep-13

25-Sep-13

Temp Status

17

Tullet-Prebon (tpSEF)

23-Aug-13

25-Sep-13

Temp Status

18

CME

17-Sep-13

04-Nov-13

Temp Status

19

Latam SEF

25-Sep-13

 

Exemption till 19 Nov

20

YieldBroker

27-Sep-13

 

Exemption till
1 Dec

21

GTX SEF LLC

30-Sep-13

 

 

22

SDX Trading LLC

01-Oct-13

 

 

The CFTC site has a section showing status of SEF filing applications.

Top SEF


Whilst Javelin and TrueEX as ‘new kids on the block’, may have been the first to register their made available to trade (MAT) products, it’s clear that SEF volumes are for now remaining on the established platforms which are already widely used by market participants.

According to data from Clarus the top SEFs by volume for each product class last week were:

  • CREDIT:  Bloomberg continues to post the most impressive scores in this asset class, consistently accounting for 70-80% of the daily volumes and 79% for the week overall.  GFI is the strongest IDB.
  • FX:  ICAP has the largest FX numbers.  The other 4 IDB’s join Reuters & 360T for a close battle between 2nd through 7th place.
  • IRD:  ICAP and Tullet take turns in the lead, with BGC in another photo-finish for 3rd.  The strength of ICAP’s and Tullet’s numbers appear to hinge on the weekly FRA reset volumes (RESET vs TP Match, respectively).

Whilst, Ben Macdonald, Bloomberg’s Head of Product and President of Bloomberg’s SEF announced that:

“In the first month of SEF trading, more than $280 billion in cross asset volume has been executed on our SEF and over 220 global firms. We will continue to work closely with our clients, who have used our trading platforms for years, to help them transition to today’s new regulatory environment.” more

Full Clarus report on last weeks SEF volumes is here.