Focused on credit default swaps (CDS), MarketAxess SEF offers market participants the ability to trade with all other market participants using a range of trading protocols including click-to-trade, request-for-quote and order book.
MarketAxess SEF has submitted to the Commodity
Futures Trading Commission (CFTC) the swaps that it determined should be made
available to trade (MAT). These include four main on-the-run and most recent
off-the-run series for the 5-year tenor. MarketAxess has no plans to expand its
MAT application at this time.
Any eligible contract participant is eligible to
become a participant on the swap execution facility (SEF). Firms have to sign
MarketAxess’ user license agreement and complete a CDS clearing account
activation form to become a participant. MarketAxess SEF’s mix of buy- and
sell-side participants distinguishes the platform from other SEFs that
traditionally only cater to sell-side firms.
MarketAxess is still onboarding participants onto
its SEF platform from among its network of credit market participants and
institutional investors. MarketAxess has seen a significant drop in CDS trading
volumes on its platform since October 2, when SEF trading began, however once
the MAT determination comes into effect it expects to see an industry-wide
pick-up in SEF trading volumes.
MarketAxess SEF has connectivity to derivatives
clearing organisations, swap data repositories and credit hubs and fulfills the
MarketAxess’ team has been dedicated to meeting the new regulatory requirements, delivering best execution, and expanding CDS liquidity. It plans to continue efforts to create a more transparent OTC swaps market.