AEGIS Hedging Solutions files SEF application with CFTC
AEGIS Hedging Solutions has confirmed that it has filed an application with the Commodity Futures Trading Commission (CFTC) to become a Swap Execution Facility (SEF) under the CFTC’s rules issued pursuant to the Dodd-Frank Act.
AEGIS works with hundreds of companies to research potential price movements in commodity and rate markets, develop tailored hedging strategies to protect cash flow from related volatility, and manage all hedge positions through settlement. AEGIS has established a subsidiary, AEGIS SEF, LLC, to facilitate the negotiation and execution of bilateral derivative contracts between commercial end-users and their financial counterparties.
AEGIS SEF will enable (i) a request-for-quote (RFQ) function to allow negotiations between clients and financial counterparties and (ii) a central limit order book (CLOB). Trading on the AEGIS SEF will be focused on bona fide hedge transactions; swaps not used for hedging purposes (i.e., speculative trades) will not be permitted. Justin McCrann will serve as President of AEGIS SEF.
Bryan Sansbury, CEO of AEGIS, comments:
“Being among the first CTAs to file a SEF application is consistent with our leadership position in the industry. CTAs and Introducing Brokers play a critical role in helping companies navigate otherwise complex bilateral swap markets. We strongly believe all participants in these markets will benefit from consistent pre-trade communication, published rulebooks governing activity, technology facilitating transparency and compliance, and capturing trade details that enable full audit trail/recordkeeping.”
AEGIS will be working with customers and financial counterparties throughout the application review period to ensure each is prepared to engage with AEGIS SEF when the filing is approved for operations.
Justin McCrann, President of AEGIS SEF, comments:
“Today marks the culmination of more than a year’s effort to produce our filing and enable our technology. However, we know it is one step in our journey. We look forward to working with our partners in the financial counterparty community, and potentially other CTAs that might participate on our SEF to make AEGIS SEF fully operational.”