| WASHINGTON, Sept 12
WASHINGTON, Sept 12 The U.S. swaps regulator may
give new exchange-like platforms more time to comply with its
rules, senior officials signaled, to let the industry sort out a
spate of logistical issues before trading starts.
Some 20 companies are setting up a so-called Swaps Execution
Facility (SEF), an untested type of trading platform designed to
make the $630 trillion swaps market less opaque, and end the
practice of privately negotiating deals.
They must comply with the new rules by Oct. 2, but the
regulator, the Commodity Futures Trading Commission, has so far
only approved two companies as a SEF.
Two commissioners signaled they wanted to give the industry
more time to prepare, at a meeting with market participants of
the so-called Technology Advisory Committee (TAC).
Commissioner Mark Wetjen, a Democrat, said the CFTC should
consider to "change course on these compliance dates", and
Commissioner Scott O'Malia, a Republican, agreed.
"Based on what we expect of the industry and the short
time-frame... we have to delay the Oct. 2 date," O'Malia told
journalists after the meeting.
Regulators across the world have cracked down on derivatives
markets, which helped cause the 2007-09 financial crisis,
forcing trades onto public platforms, and forcing market parties
to publish more data about their trading.
Bloomberg LP and Tradeweb - with two different platforms -
are the only two companies with approved SEF status. Tradeweb is
majority-owned by Thomson Reuters Corp.
It was not clear whether the CFTC would grant the delay,
which needs the approval of Chairman Gary Gensler. Gensler was
no longer present at the meeting when the issue came up, though
staff said he was aware of the issue.
"I can tell you that this has already been discussed with
the chairman," said David Van Wagner, who heads the CFTC's
Division of Market Oversight. "The chairman is well aware of the
concerns," he said.
A spokesman for Gensler declined to comment. The CFTC could
for instance grant the delay through a so-called no-action
letter issued by staff.
Clients of the SEF trading platforms had expressed worries
at the meeting that they could not make a proper choice between
the different providers because there was so little time left
and they did not know who would be approved.