CFTC Gives Green Light for Tradeweb's SEFs

Tradeweb submitted an early application to become a SEF.

Temporary approval is a mechanism by which the CFTC is allowing SEF applicants to operate their platforms, while it evaluates services for full authorization. Tradeweb is the second of the big players in the over-the-counter (OTC) electronic trading to receive temporary approval, the first being Bloomberg.

The firm will operate two SEFs for interest-rate swaps and credit-default swap indices, one with an anonymous central limit order book, and another with a disclosed request on an order book.

"Approval of our flexible SEF offerings is a major milestone for Tradeweb and our customers seeking choice in the ways they access liquidity in the evolving derivatives marketplace," says Lee Olesky, CEO at Tradeweb in a statement. "As market participants continue to adapt their business to the new regulatory environment under Dodd-Frank, our derivatives platforms will provide institutional investors with the transparency and efficiency they need to trade with confidence."

SEFs are being established in line with provisions in the Dodd-Frank Act and Group-of-20 mandates, which aim to reduce opacity in the OTC market by moving standardized derivatives contracts onto electronic exchanges. Central clearing and reporting, in addition, are integral parts of the wider global derivatives reform effort.

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