The big news last week was the CFTC certification of the Javelin MAT application. Hence, the following fixed notional, fixed/float interest rate swaps will be subject to the trade execution requirement effective Monday February 17:
- USD Libor, spot starting, standard tenors (2, 3, 5, 7, 10, 12, 15, 20, 30Y)
- USD Libor, IMM start, standard tenors (2, 3, 5, 7, 10, 12, 15, 20, 30Y)
- EURIBOR, spot starting, standard tenors (2, 3, 5, 7, 10, 15, 20, 30Y)
As I mentioned in last week’s blog, there would likely be commentary surrounding packaged trades, and the CFTC delivered. My interpretation is that packaged trades are included, but that the CFTC want to discuss it further with participants. The CFTC language was a bit more confusing, stating that if you execute packaged trades, that you would not be relieved from the trade execution requirement. I’ve summarized this with a Venn diagram:
That should clear it up. Acting Commissioner Wetjen is due to host a roundtable to hear out participants on the topic, and the CFTC press release alludes to the fact there may be relief given for particular circumstances.
Tera Makes a Move
In other news, TeraExchange announced relationships with European IDBs. It’s an interesting angle, and something I would expect the borderline “US Persons” to take confidence in, in order to tap into US liquidity and address the legal uncertainty. TeraExchange appears to have built out their infrastructure and are making the appropriate tactical moves prior to the magical February date.
We’ll keep the data to the usual headline figures – daily activity last week, as well as a 5-week running total. If you have interest to drill into any of these numbers or see different views, please get in touch with us.