Recently, a leading operator of regulated exchanges and
Intercontinental Exchange Inc.
) Swap Execution Facility (SEF) has been granted a temporary
registration status by the Commodities Futures Trading Commission
(CFTC). CFTC is responsible for monitoring the deals and trade in
interest-rate swaps, commodity linked swaps etc.
The Dodd-Frank Wall Street Reform and Consumer Protection Act
mandate the use of a platform for regulated trading and clearing
of swaps. The Swap Execution Facility is one such platform. In
order to shift trading of security-based swaps to regulated
trading markets, the Dodd-Frank Act formed security-based SEFs,
which would provide more transparency and reduce risks associated
with such trading. The security based SEFs are required to file
an application form in order to register with the Commodities
Futures Trading Commission.
Intercontinental Exchange's SEF is expected to be unveiled on Sep
30, 2013. After it starts operating its swap execution
facilities, it will be able to provide its customers with a
better platform through which they can execute trading in an
assured and flexible manner. Thus, we believe Intercontinental
Exchange's strong brand name and approval by CFTC will help it
gain customer confidence thereby assisting it to establish a
robust Swap Trade.
Intercontinental Exchange's Swap Trade will provide index credit
default swaps (CDS) through its swap execution facility. Single
name CDS will be provided across North American and European and
Emerging Market corporates and sovereigns.
Last week wholesale brokerage service provider,
GFI Group Inc.
) received approval from CFTC while leading futures exchange
CME Group Inc.
) filed an application to be registered as a swap execution
Rising operating expenses has been a matter of concern for
Intercontinental Exchange. As a result we currently have a Zacks
Rank #4 (Sell) on the company. Among other financial market
operators that are worth considering,
Markets Group Inc.
) carries a Zacks Rank #2 (Buy).
CME GROUP INC (CME): Free Stock Analysis
GFI GROUP INC (GFIG): Free Stock Analysis
INTERCONTINENTL (ICE): Free Stock Analysis
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