AEGIS comments on SEF registration requirements for certain CTAs
AEGIS Hedging Solutions today commented on the developments related to yesterday’s staff advisory issued by the Commodity Futures Trading Commission (CFTC) regarding the need for certain CTAs to register their trading facilities as Swap Execution Facilities (SEFs).
AEGIS notes that the advisory provides critical clarification on certain trading activities that may trigger compliance with the SEF registration requirement in the Commodity Exchange Act (CEA) and CFTC regulations. AEGIS believes these clarifications necessitate SEF registration for the trading facilities of it and each of its competitors and strongly supports the staff advisory given it will lead to an increasingly fair and efficient marketplace for managing commodity price volatility.
“We are proud to be among the many CTAs that help customers navigate complex swap markets to hedge commercial risk,” said Bryan Sansbury, CEO of AEGIS. “The SEF registration requirement will drive consistent pre-trade communication, published rulebooks, improved technology, and the ability to fully reconstruct trade details – benefiting all participants in these markets.”
As FX News Group has reported, AEGIS has established a subsidiary, AEGIS SEF, LLC, to facilitate the negotiation and execution of bilateral derivative contracts between commercial end-users, financial counterparties, and other market participants. AEGIS filed its SEF application on February 3, 2021.
Last week, AEGIS SEF announced that Bruce Aust, former Vice Chairman of NASDAQ and Jason Lish, current Chief Security Officer of Lumen Corporation, would join the AEGIS SEF Board.
AEGIS SEF proposes to enable (i) a request-for-quote (RFQ) function to allow negotiations between market participants, and (ii) a central limit order book (CLOB). Justin McCrann will serve as President of AEGIS SEF.
“Yesterday’s announcement provides important clarification on the application of SEF registration for CTAs,” said Justin McCrann, President of AEGIS SEF. “We made an important decision to begin our registration process last year and look forward to continuing our work with the CFTC to obtain regulatory approval.”