CFTC seeks comment on removing order book rule for permitted swap trades
The Commodity Futures Trading Commission is seeking public comment on a proposal that would remove the order book requirement for permitted transactions on swap execution facilities.
The Commodity Futures Trading Commission on Aug. 20 published a notice of proposed rulemaking seeking public comment on changes to a swap execution facility rule that would remove the order book requirement for permitted transactions.
If adopted, the proposal would change how swap execution facilities can structure trading for some products. SEFs would no longer have to offer an order book for permitted transactions, giving them more flexibility in how they execute trades and allocate resources.
In its release, the commission said it has observed that order books for permitted transactions have been rarely used by market participants for swaps trading on SEFs. It said that contrasts with required transactions, while order books remain available for all swaps listed by SEFs for trading.
The proposal would amend Commission regulation 17 CFR § 37.3(a)(2). The commission said the change could spur further development of execution methods better suited to the products SEFs list. It also said the rule would give SEFs flexibility in allocating their resources.
Chairman Michael S. Selig said the action continues the agency’s commitment to prescribing the minimum effective dose of regulation and reflects a principles-based regulatory approach.
The notice opens a public comment period. The commission did not say when it expects to act on any final rule. If adopted, the change would take effect through the commission’s rulemaking process.
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