NFA Signs Agreement with TeraExchange to Provide Regulatory Services to Its Swap Execution Facility

The National Futures Association ("NFA") and TeraExchange announced that they have entered into an agreement that sets the foundation for the NFA to perform regulatory services for TeraExchange's swap execution facility ("SEF"). Under the Dodd-Frank Act and regulations promulgated thereunder, a SEF will have surveillance and other self-regulatory responsibilities, which the SEF is able to outsource, at least in part, to another self-regulatory organization, such as the NFA.

The agreement establishes a preliminary framework for the exchange of information and the development of technology standards that will enable TeraExchange and the NFA to develop, test and launch automated trade practice and surveillance systems, and also to develop the procedures and processes necessary for TeraExchange to fulfill its SEF self-regulatory obligations. The NFA and TeraExchange anticipate that they will enter into a formal Regulatory Services Agreement.

See: NFA Press Release.