ICAP taps NFA for Surveillance and Trade Practice Functions

Inter-dealer broker ICAP and the National Futures Association (NFA) today announced a deal that will see the NFA perform regulatory services for ICAP's new Swaps Execution Facility (SEF), in a further sign that IDBs and other SEF operators are beginning to anticipate final CFTC rules governing SEFS with new systems development and implementation.

The preliminary framework of the agreement calls for information exchange and technological standards to be developed that will allow the two parties to ultimately launch automated trade and surveillance systems for the SEF, as well as develop addtional procedures and processes required for ICAP to comply with SEF self-regulatory obligations.

 "This is a significant step forward as we engage in new regulatory activity on behalf of SEFs. For over ten years, NFA has been successfully performing trade practice and market surveillance functions on behalf of futures exchanges," says NFA President Daniel J. Roth.

It is expected that the agreement will become a formal Regulatory Services Agreement upon final release of CFTC rules. Under present proposals the CFTC allows SEFs to contract with registered futures associations, like the NFA, to render regulatory services for surveillance and other responsbilities included under Dodd-Frank.