Bloomberg SEF has put forward the second ‘made available to trade’ (MAT) plan to include both credit and rate swaps, supporting growing industry consensus that swap execution facilities should focus on the most liquid instruments.
Bloomberg is the fifth swap execution facility (SEF) to file a MAT submission, which will focus on index products that generate the largest amount of liquidity.
For credit default swaps (CDS), the submission includes CDX North America investment grade five-year on the run products and iTraxx Europe five-year benchmark on the run products.
For interest rate swaps (IRS), it listed dollar-demotivated Libor products with tenors between two and 30 years with fixed notional, spot starting and par only. In addition to Euro-dominated Euribor IRS with the same tenor range.
According to Bloomberg SEF, it has executed all products it has put forward in its MAT filing and will keep the option of broadening or narrowing the instruments it makes available to trade depending on market activity.
Speaking to theTRADEnews.com, Ben Macdonald, Bloomberg’s head of product and president of Bloomberg SEF, said the firm’s MAT submission was in part driven by its customers.
“Our MAT filing was based on insights and data derived from our SEF and derivative trading platforms, and our ongoing conversations with clients,” he said.
Earlier this month, rates-focused SEF Javelin paired back its initial MAT submission in the wake of industry concern that its wide-ranging submission could lead to a race to the bottom and push illiquid swaps onto SEFs and through central clearing.
Javelin was the first SEF to submit a MAT application, while three other SEFs have all submitted proposals: trueEX, also focused on rates, credit-focused MarketAxess and Tradeweb, whose submission covered both rates and credit.
According to comments from outgoing CFTC chair Gary Gensler, the Commission will respond to MAT submissions early in 2014 with an expected mid-February implementation date, beyond which buy-side firms will have to trade those instruments on a SEF.