On Thursday May 1 the CFTC released an eagerly awaited clarifying document outlining when and how package trades would be required on SEF. Packaged transactions will be phased in by type from May 15th through November 15th, and to deal with the pre-trade credit checking issue (checking limits against each leg as opposed to the limit utilization of the total package) no-action relief has been provided until September 15th.
From an execution point of view, those SEFs that have historically provided execution for packaged transactions should have little issue putting in place the necessary controls to meet the deadlines. The September 15th credit check deadline will be a tougher one to meet, with the onus on the credit hubs (Markit and Traiana) and the clearinghouses, although not impossible. What leave’s me still perplexed is not these operational issues but instead issues of jurisdiction and fair access.
To read the rest of what I wrote, head over to the Greenwich Blog. (Sorry for the redirect – you will have to register, but its free).