Chairman Gensler Delivers Remarks Regarding SEF Transparency and Recent Staff Guidance

CFTC Chairman Gary Gensler gave a speech at the Swap Execution Facility Conference titled, "Bringing Transparency and Access to Markets."

Chairman Gensler stated that, because the CFTC has completed nearly all SEF rulemaking and the initial major compliance dates have passed, the playing field has been leveled through transparency, impartial access, central clearing, and straight-through processing. Chairman Gensler also noted that the CFTC Staff Guidance (i) requires all SEFs to provide dealers and non-dealers with the ability to view, place or respond to all indicative or firm bids and offers, (ii) allows all market participants to feel confident that their bids or offers are being communicated to the rest of the market and (iii) requires SEFs to provide all eligible contract participants ("ECPs") with market services, including quote screens and similar data pricing displays.

Chairman Gensler also noted two types of potential rule changes that will help to maintain the transparency of the swaps market. First, he described the trade execution requirement, which states that certain swaps must be executed on a SEF or designated contract market in addition to being subject to mandatory clearing and made available to trade. Second, he noted the futures block rule, which he expects to have published for comment by the next CFTC open meeting in December. Chairman Gensler explained that the next steps for the CFTC will be to review registered entities and registrants to ensure that they comply fully with the new rules and guidance.

In closing, Chairman Gensler once again noted that the CFTC is in need of additional resources and funding in order to maintain an open and transparent swaps market.

See: CFTC Chairman Gensler's Speech.Related news: CFTC Issues Staff "Guidance" on Impartial Access to SEFs (with Lofchie Comment) (November 14, 2013) CFTC Issues Three Time-Limited Extensions Relating to SEFs (CFTC Letters 13-55, 13-56 and 13-58) (with Lofchie Comment) (November 4, 2013).