CME Group has applied to operate a swap execution facility (SEF) and is set to compliment the exchange group’s existing listed futures offering.
The CME SEF will be made available via CME Direct, the existing online front-end trade management platform for CME’s exchange listed and OTC energy and metals derivatives.
As such, the SEF is one of the few that will focus purely on commodities products, though CME said it would look to develop its capabilities over time.
The application by CME, a surprising move as the company had not previously indicated its intention to register as a SEF, brings the total number of SEFs that have applied to the Commodity Futures Trading Commission (CFTC) to 18.
In recent weeks, the CFTC has begun authorising a raft of SEFs and the first SEF trades are expected to begin on 2 October.
Though some have questioned the viability of so many SEF applicants, few have chosen to specialise their offering. CME’s approach of specialising on a single sector and expanding into others based on demand has so far only been adopted by a small group of SEF hopefuls.
“CME Group's SEF will offer customers the flexibility they need for executing swaps side-by-side with listed futures over CME Direct in markets where we have a strong presence,” the company said in a statement.