CFTC's swap execution facility plan faulted as deregulatory by industry self-policers

24 March 2019 11:44pm
The US Commodity Futures Trading Commission’s proposal to overhaul swap execution facility rules is being rapped by the derivative industry’s self-policing group for risking dilution of market regulation.

The National Futures Association, which is overseen by the CFTC, targeted a provision to restrict swap dealers’ pre-trade negotiations to SEF trading platforms alone.

“We believe that many key parts of the proposal, if adopted, will significantly alter and may weaken the current regulatory framework governing the intermediated interdealers swaps market,” Chicago-based NFA said in a letter to the commission last week.

The letter expressed concern that the plan, pushed by CFTC Chairman Christopher Giancarlo, “will result in inconsistent requirements across SEFs” by letting each SEF adopt its own rules and supervise its own unregistered employees.