Bloomberg announced today that its affiliate Bloomberg SEF LLC has received temporary registration approval from the Commodity Futures Trading Commission (CFTC) to operate a multi-asset class swap execution facility (SEF).
Bloomberg's SEF will open for trading when Dodd-Frank derivative compliance mandates take effect later this year.
Bloomberg's SEF will offer deep, cross‐asset liquidity to Bloomberg Professional service subscribers. To provide clients a complete, efficient solution, Bloomberg's SEF will support request‐for‐quote and order book functionality for interest rate swaps, credit default swaps, and foreign exchange and commodity derivatives trading. Bloomberg was first to submit its SEF application to the CFTC on June 4th.
"The implementation of SEFs is one of the more meaningful ways the Dodd-Frank reforms have sought to increase transparency and standardization in the swaps market," said Ben Macdonald, Bloomberg's Global Head of Product and President of Bloomberg SEF LLC. "As one of the largest independent swaps trading platforms, operating a SEF for our clients is a logical progression for Bloomberg. While clients can continue to execute on our traditional derivative platforms until the CFTC's mandatory compliance deadline, receiving approval ensures our readiness to provide them with everything they need to begin SEF trading on October 2nd."
More than 1,000 global firms currently use Bloomberg's electronic platforms for derivatives trading. The SEF will build on Bloomberg's existing trading infrastructure, including ALLQ, BBTI and FXGO, with the addition of an order book, as mandated by Dodd-Frank regulation. Dealers intending to participate on Bloomberg's SEF platform include Barclays, BNP Paribas, BofA Merrill Lynch, Citigroup, Crédit Agricole CIB, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Morgan Stanley, Nomura, RBS, Société Générale, UBS and Wells Fargo Securities.
Bloomberg also provides its clients with straight-through processing, pre-trade credit check functionality and direct connectivity to central counterparties (CCPs). Over 200 institutional clients already use Bloomberg's clearing channels to clear their swap trades with CME Clearing, Ice Clear Credit and LCH.Clearnet.