Trade Mandate Delayed for Some Rate Swaps

Financial firms get three more months to start trading swaps with multiple components on swap-execution facilities.

U.S. banks and other financial firms won a three-month delay for as much as half of the interest-rate swap market to meet a federal requirement to trade on platforms meant to boost competition and transparency.

Trades consisting of multiple components won’t need to be transacted on swap-execution facilities, or Sefs, until May 15, the Commodity Futures Trading Commission said in a letter released Monday. The agency said it hadn’t ruled out further extending the new deadline in the Dodd-Frank Act requirement originally set to start Feb. 15.

Notional Volume

The Managed Funds Association, a lobbying group for hedge funds, estimated in November that packaged trades represented a quarter of interest-rate transactions on platforms last year. The CFTC’s economist office estimated that packaged transactions comprise 50 percent of the notional volume of the interest-rates market, according to a Jan. 16 statement by Scott O’Malia, a Republican commissioner.

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