Swap execution facility (SEF) TeraExchange has received formal approval from the Commodity Futures Trading Commission (CFTC) to begin trading next month.
The news brings the total number of approved SEFs to seven, with MarketAxess, GFI and State Street’s SwapEx all receiving approval last week.
The financial instruments market participants will be able to trade on TeraExchange include Interest Rate Swaps, Collateralised Default Swaps (CDS) Indices, CDS Options and Single Name, Non-Deliverable Forwards and other cleared OTC products.
SEFs are set to begin operation on 2 October as part of the Dodd-Frank Act of financial market reforms.
TeraExchange plans to operate the central-limit order book model to enable the trading of centrally cleared OTC derivatives. Additional features include pre-trade credit checking and automatic swap data reporting.
A total of 18 prospective SEFs have filed for approval with the CFTC with most adopting a multi-asset offering with both central-limit order book and request for quote models.