CFTC Seeks Public Comments on Proposed Elimination of SEF Order Book Requirement for Permitted Transactions

WASHINGTON — The Commodity Futures Trading Commission today published a Notice of Proposed Rulemaking seeking public comments on proposed amendments to Commission regulation § 37.3(a)(2) to remove the order book requirement allowing swap execution facilities not to offer an order book for permitted transactions. 

The Commission has observed that order books for permitted transactions, unlike order books for required transactions, have been rarely used by market participants for swaps trading on SEFs despite their availability for all swaps listed by SEFs for trading. 

“Today’s action continues the agency’s commitment to prescribing the minimum effective dose of regulation for market participants,” said Chairman Michael S. Selig. “By removing excessive requirements from our rulebook, the Commission is remaining true to its principles-based regulatory approach.” 

The proposed elimination of the order book requirement for permitted transactions provides SEFs with the flexibility to determine how to allocate their resources, while also potentially helping to spur further development and innovation in execution methods that may be better suited to trading the products that SEFs list.