MFA Petitions CFTC for SEF Amendments

The MFA submitted a petition for rulemaking to the CFTC, urging it to make a number of changes to regulations governing swap trading.

In particular, the petition recommended that the CFTC:

• codify existing CFTC staff guidance around the implementation of the CFTC's impartial access requirements under CFTC Rule 37.202(c);
• codify existing CFTC staff guidance regarding "straight-through processing" (CFTC Rules 1.73, 1.74, 39.12(b)(7));
• prohibit post-trade name disclosure by swap execution facilities ("SEFs") for swaps that are executed anonymously (CFTC Rule 37.7);
• facilitate SEF/designated contract markets ("DCMs") execution of package transactions by requiring the package transaction as a whole to become "made available to trade" in order to be subject to the CFTC's trade execution requirement (CFTC Rules 37.9, 37.10, 37.12, 38.11, 38.12);
• provide a mandatory public comment period for every MAT determination submission by a SEF/DCM (CFTC Rules 37.10(a)(1), 38.12(a)(1));
• establish a clear process for determining when a swap product is no longer "available to trade" on a SEF/DCM (CFTC Rules 37.10(d)(1), 38.12(d)(1));
• codify existing CFTC staff guidance and no-action relief around rejection of swaps from clearing and resubmission for operational and clerical errors (CFTC Rules 37.13, 37.200, 37.203, 38.150, 39.12(b)(7));
• clarify the order interaction requirements between different SEF trading protocols ( CFTC Rule 37.9(a)(3)(i)); and
• eliminate the "occurs away" requirement for block trades (CFTC Rule 43.2).