GFI Group Files With Regulator to Create Derivatives Exchange

GFI Group Inc. (GFIG), the broker that matches trades between Wall Street dealers, has asked the Commodity Futures Trading Commission for approval to create a derivatives exchange.

The company, which arranges transactions in fixed-income, equity and commodity markets, has a pending application for its GFI Futures Exchange LLC with the CFTC that was received March 19, according to the regulator’s website. While GFI Group lists information on trading levels allowed for interest-rate swaps, it doesn’t specify which contracts it may offer in its rulebook.

“The exchange shall determine the contracts which shall be listed for trading on the trading platform,” according to the rulebook, which is posted on the CFTC’s website.

Firms in the $639 trillion over-the-counter derivatives market are adjusting to regulations under the 2010 Dodd-Frank Act. New York-based GFI Group has said it intends to register as a swap-execution facility under the CFTC rules, though those regulations for how swaps can be traded haven’t been completed.

“The difference between the ultimate regulatory treatment of futures and swaps is unclear and we at GFI want to be prepared to be able to serve our clients’ needs across all markets,” Patricia Gutierrez, a spokeswoman, said in an e- mailed statement.

Bloomberg LP, the parent of Bloomberg News, has also said it plans to register as a swap-execution facility and could compete with GFI Group for transaction business. Other firms that have said they plan to register as SEFs include Tradeweb LLC, ICAP Plc, and Creditex, a unit of Intercontinental Exchange Inc.

GFI Group named Colin Heffron chief executive officer on Feb. 15, replacing Michael Gooch, who will remain the company’s executive chairman of the board.

The Wall Street Journal reported the filing earlier today on its website.

To contact the reporter on this story: Matthew Leising in New York at mleising@bloomberg.net.

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.

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