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Numerous SEF challenges predicted in 2014 

January 10, 2014
Richard Henderson, The Trade

The absence of harmonised cross-border rules is just one of a number of problems facing operators and users of swap execution facilities (SEFs) when mandated trading begins, a report from research consultancy Aite has found.

So far, only the UK has formally recognised SEFs, while Europe and Asia lag well behind the US in developing and implementing G-20 post-crisis reforms, which include pushing OTC derivatives markets onto electronic platforms. This may encourage non-US entities to avoid trading on SEFs and US-headquartered firms to direct swaps activity through foreign subsidiaries to maintain bilateral trading in the short term.

The UK has implemented an equivalency agreement with the US recognising SEFs and enabling trading between US and UK participants on SEFs, but Europe is yet to formalise recognisition of SEFs.

Read more: The Trade

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