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Swap Execution Facilities (SEFs)

 

Shipkevich helps Swap Execution Facilities (SEF) meet regulatory compliance with new legislation related to formation and registration. SEFs are trading platforms on which multiple participant interacts with the trading interest of more than one other participant on the system. SEFs are an attempt to increase transparency and efficiency while reducing systematic risk in over-the-counter (OTC) derivatives markets. Regulatory agencies, such as the CFTC, implemented new rules and acceptable practices on the registration and operation of SEFs, with additional legislation continuing to affect these entities.

 

Shipkevich’s services for SEFs include:

  • Register with the CFTC/NFA as an SEF, filing proposed changes to rules and security-based swaps that it intends to trade;
  • Draft and negotiate in-house rules and procedures to ensure compliance with certain provisions of Dodd-Frank, concerning real time reporting requirements, initial margin and capital level requirements, and recording transactions;
  • Counsel on procedures to ensure financial integrity, capacity, resilience, and security;
  • Negotiate rules to ensure procedures for SEF trading are compliant with statute;
  • Administer cost-benefit analysis to determine whether formation and registration is advisable;
  • Alert clients to regulatory legislature as it is proposed, approved and finalized, advise on how new rules affect practice;
  • Guide on best practice measures to balance best use of resources with compliance.