U.S. banks and other financial firms won a three-month delay for as much as half of the interest-rate swap market to meet a federal requirement to trade on platforms designed to increase competition and transparency.
The U.S. Commodity Futures Trading Commission (CFTC) announced in a letter released yesterday that trades consisting of multiple components won't need to be transacted on swap-execution facilities, or SEFs, until May 15. The agency said it hadn't ruled out further extending the new deadline in the Dodd-Frank Act requirement originally set to start Feb. 15.
The delay, which estimates have shown will affect between a quarter and half of of the interest-rate swaps market, “allows us more time to figure out what to do,” with the packaged trades, Mark Wetjen, acting chairman of the CFTC, said at a meeting in Washington. “It certainly doesn't foreclose additional action,” he said, adding that “we have some flexibility with that date.”
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