(news article) New proposals could take the sting out of SEFs, say industry experts
August 15, 2011
The Swap Execution Facility Clarification Act, introduced to the US Congress on July 19 by Republican congressman Scott Garrett calls for restraint in rulemaking directed at swap execution facilities at the risk of "driving the swaps market to our foreign competitors simply because regulators have resisted providing the methods of swap execution that market participants require".
Among other requirements, the Act would prohibit the CFTC and SEC from interpreting the SEF definition to require a minimum number of participants to receive or respond to quote requests, or require a Sef to display or delay quotes for any specific period of time. "These prohibitions are necessary to preserve investor choice of execution, promote transparent price discovery for market participants, and decrease the costs of hedging for US businesses, farmers and retirement plans, all of which contribute to economic growth and job creation," Garrett argues.
Cross References
Dodd-Frank Act, Title VII, Sec. 723; 75 Fed. Reg. 80898