Trading started yesterday on Wall Street's first swap executionfacility (SEF). A SEF is a new type of derivative-trading platformdesigned by the Commodity Futures Trading Commission (CFTC) tocompete with banks and with futures exchanges. The goal is toincrease transparency in the market by making derivatives pricespublicly available.
|Bloomberg reports that in its first day, the SEF handled morethan 100 trades, conducted by more than 50 companies around theworld. The value of the trades—which included interest rate swaps,credit default swaps, foreign exchange swaps, and commodityderivatives—totaled more than $6 billion.
|“It's encouraging to see that despite market uncertainty andlast-minute regulatory changes, more than 50 of our clients arealready trading on our SEF,” says Ben Macdonald, global head ofproduct for Bloomberg and president of Bloomberg SEF LLC. “We seethis as a positive start.”
|For companies that trade derivatives but aren't sure about SEFs,Bloomberg developed an infographic to help clarify how the new platform works.
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