Javelin Capital Markets LLC may accelerate the Dodd-Frank Act'smigration of U.S. swaps trading onto public markets by seekingpermission to list and make interest-rate swaps available on itsnew trading platform.

The New York-based swap-execution facility, or Sef, was thefirst venue to seek such a Commodity Futures Trading Commission(CFTC) decision. Agency approval would trigger a requirement thathundreds of trillions of dollars of the same type of swaps beconducted on exchanges and Sefs owned by Javelin and others, theCFTC said after receiving the application yesterday.

The CFTC said it will review and seek public comment onJavelin's plan, which covers most of the interest-rate swapsmarket. The review will take as long as 90 days, until Jan. 16, theagency said.

“This is a natural next step for a derivatives marketplace thatalready enjoys trade reporting and broad central clearing,” JavelinChief Executive Officer James Cawley said in a telephone interview.The move “jump-starts trading on Sefs,” he said.

The platform's filing, called a determination, coversinterest-rate swaps in U.S. dollars, British sterling, and eurosthat last between one month and 51 years in duration.

Dodd-Frank, the 2010 financial-regulatory overhaul, seeks toincrease access and price competition in the swaps market by havinginterest-rate, credit-default, and other types of swaps trade onnew Sefs. Largely unregulated swaps helped fuel the 2008 creditcrisis and the U.S. rescue of American International Group Inc.

Willing Traders

Javelin said in its filing that swap dealers registered at theCFTC, which include Goldman Sachs Group Inc. and JPMorgan Chase& Co., already regularly act as buyers and sellers in theinterest-rate swap market and would be willing traders on newplatforms.

“These products are some of the most widely used in the swapsspace,” Kevin McPartland, head of market structure and research atGreenwich Associates, said in a telephone interview yesterday.“Most institutions holding some form of debt use these products tomanage interest-rate risk.”

Javelin SEF LLC is a subsidiary of Javelin Capital Markets LLC,a derivatives trading venue founded in 2009. Sefs owned by ICAPPlc., GFI Group Inc., Tradeweb Markets LLC and Bloomberg LP, parentof Bloomberg News, have received CFTC registration.

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