Ahead of next week's Commodity Futures Trading Commission (CFTC) mandatory swap execution facility (SEF) trading deadline, Bloomberg today announced that global firms can use Bloomberg SEF LLC's sponsored access model for swaps trading.
Asset manager NISA Investment Advisors, LLC (NISA), supported by its futures commission merchant Credit Suisse Securities (USA) LLC (Credit Suisse), executed the first-ever sponsored access trade with Goldman Sachs on Bloomberg's SEF.
Bloomberg's sponsored access functionality enables futures commission merchants to provide execution services that allow customers to directly access Bloomberg's SEF, helping to facilitate the regulatory transition for buy-side firms as they comply with CFTC mandates.
"Clients concerned by next week's made-available-for-trading deadline now have another option for accessing our SEF's liquidity," said Ben Macdonald, Bloomberg's Head of Product and President of Bloomberg's SEF. "By providing market participants access to our SEF through an agency model, much like the futures market has done for years, we offer our clients greater trading flexibility and efficiencies."
Bloomberg provides market participants access to rates, credit, foreign exchange and commodity swaps liquidity through flexible trading functionality including request for quote, request for stream and orderbook functionality.
"For our firm and clients, sponsored access is the preferred execution approach for accessing the swaps market," said Ken Lester, NISA's Managing Director of Portfolio Management. "Bloomberg was the first SEF to provide sponsored access capability to NISA."
More than 600 global firms, including all the major liquidity providers, have signed on to use Bloomberg's SEF and over $1 trillion in cross-asset volume has been executed since the October launch. Bloomberg was first to apply and first to receive SEF approval from the CFTC.
"Credit Suisse is pleased to provide our mutual clients the benefit of sponsored access through this partnership with Bloomberg's SEF," said John Dabbs, head of Credit Suisse's US Futures Commission Merchant Group. "Many clients are planning to utilize this structure to prepare for next week's made-available-for-trading deadline, following NISA as the first to trade cleared swaps through this framework."
"Goldman Sachs continues to provide best-in-class execution to our franchise as market structure evolves," said Scott Rofey, head of U.S. Dollar Interest Rate Swap Derivatives at Goldman Sachs. "Providing liquidity to direct market access clients of Bloomberg's SEF is one way we are helping our clients manage the transition to new methods of electronic market access."