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Week in Review: Rates Mandated for SEF Trading

February 24, 2014

Last week, a central tenant of Dodd-Frank regulation took effect: February 18th marked the first day that select swaps were required by law to be traded on swap execution facilities (SEFs).

Given interest rate swaps were first to be mandated for trading on these new platforms, here are a few rates-related observations from Bloomberg’s SEF trade data:

  • Interest rate swap volume on Bloomberg’s SEF steadily climbed over the week.
  • Multiple rates products across multiple currencies were executed including outright, curve, butterfly, spread and MAC swaps.
  • A subset of trades were executed via Bloomberg’s sponsored access functionality, which enables a futures commission merchant (FCM) to provide execution services so that their clients can access SEF liquidity.
  • The majority of volume traded was submitted directly to clearinghouses without the use of middleware.

Here’s the total amount traded, by asset class, on our SEF from last week:

Asset Class Volume Traded
Interest rate swaps $29.7 billion
Credit default swaps $25.7 billion
Foreign exchange swaps $2 billion
Commodity swaps $20 million
TOTAL $57.6 billion

More than $1.2 trillion in cross-asset volume has been executed on Bloomberg’s SEF since its October launch. Over 600 global firms have signed on to the platform and all the major liquidity providers are contributing liquidity. Bloomberg was first to register and first to receive provisional approval to operate a SEF from the Commodity Futures Trading Commission.