Regulation is once again reshaping the financial markets, courtesy of Dodd-Frank. Swap execution facilities (SEF) are ramping up operations in anticipation of the growing need to move swaps trading to an open and registered electronic platform. Today it's the dealers and third party players who are entering the SEF marketplace.
As SEFs are sure to add personnel, it's the techies that are ruling the roost. Platform developers and designers are the first in need. But senior management is also on tap to head up fledging operations.
The roll-out and commitment to the business seems strong, with some big name industry execs and representatives moving into the space. To support its SEF effort, Tradeweb Markets brought Bob Paul, a former General Counsel of the Commodity Futures Trading Commission, on board as a member of its global compliance and legal team. Former J.P. Morgan swaps exec Raymond May has launched Odex Group, in anticipation of the changes.
This month, Javelin Capital Markets, a swap execution facility for credit derivatives and interest rate swaps, announced the appointment of James Cawley as its chief executive officer and Chris Augustin as its chief information officer. Cawley was the founder of the Swaps and Derivatives Market Association, a founder and CEO of IDX Capital and a founder of Axiom. Augustin was Global CIO of Merrill Lynch.
But the SEF environment continues to shakeout and develop. At the Swap Execution Facility Conference earlier this month, CFTC chairman Gary Gensler said that the CFTC and SEC were still in the process of finalizing rules related to SEFs, with expectations that the rules will be finalized in the first quarter of 2012.