US regulators have delayed the inclusion of certain package transactions from mandatory trading on swap execution facilities again, allowing participants more time to adjust to the new electronic platforms.
The relief from the Commodity Futures Trading Commission (CFTC) will give market participants until at least 15 February 2015, before package transactions – involving two or more instruments including a swap – will have to be executed on SEFs.
The CFTC previously granted a no-action relief to package transactions, which was set to expire on 15 November.
“Over the last year, we have been phasing in the trading requirement as it pertains to swaps that are part of various types of packages,” said Timothy Massad, CFTC chairman, at the Futures Industry Association Expo in Chicago last week.
“We recognise the market needs a bit more time on certain remaining packages, and I expect the staff will issue the letter shortly.”
At present, standardised interest rate and credit default swaps have been subject to mandatory trading on SEFs, with more than half of those transactions now being traded on the facilities.
Package transactions and non-deliverable FX forwards remain on the horizon for regulators, however the CFTC has shown it is not afraid to use its powers to issue no-action relief letters throughout the regulatory overhaul process.