Cleartrade Exchange (CLTX) powers regulatory compliance through 3rd party reporting solution &…

Cleartrade Exchange (CLTX) has announced the launch of its third party reporting service, through an electronic connection to the Swap Data Repository owned by The Depository Trust & Clearing Corporation (DTCC).

via Pocket May 28, 2013 at 06:56PM


Haitong Futures Deploys FlexFutures Trading Platform

FlexTrade Systems, Inc., a global leader in broker-neutral, multi-asset execution and order management trading systems, today announced that Haitong Futures Co, Ltd.

via Pocket May 28, 2013 at 06:54PM

Thomson Reuters Launches Elektron Managed Services in Australia and China

Thomson Reuters Elektron managed services to reduce cost and complexity of running market data and trading application infrastructure in Australia and China Thomson Reuters today announced the launch of Elektron managed services in Australia and China to provide international and domestic financial

via Pocket May 28, 2013 at 06:52PM

Comarch and SIX Financial Information announce cooperation

Comarch is teaming up with SIX Financial Information to provide clients with comprehensive and high quality reference and market data.

via Pocket May 28, 2013 at 06:51PM

Light-beam ‘twins’ take data farther

An idea similar to that of noise-cancelling headphones has proved useful in increasing the data-carrying properties of light. Researchers reporting in Nature Photonics suggest putting not one beam of light down a fibre, but a pair, each a kind of mirror image of the other.

via Pocket May 28, 2013 at 06:44PM

Is the government helping speculators manipulate grain futures?

While the activities of the Agriculture Department don’t always garner a lot of attention, a highly questionable decision it recently made to help wealthy speculators could, over time, cost anyone who buys food.

via Pocket May 28, 2013 at 06:42PM

The Hidden ‘Gotcha’ in the SEF Rules – special entity’[SE] (as that term is defined in Section 4s(h)(2)(C) of the Act

The Hidden ‘Gotcha’ in the SEF Rules‘gotcha’-in-the-sef-rules?utm_source=TabbFORUM+Alerts&utm_campaign=4860873ebe-UA-12160392-1&utm_medium=email&utm_term=0_29f4b8f8f1-4860873ebe-271568421

An overlooked detail in the swap dealer definition rule approved by the CFTC will be a real headache for some market participants.
With all the analysis of the SEF rules that were approved by the CFTC last week, one little “gotcha” appears to have been overlooked. It doesn’t apply to everyone, but it will be a real headache for some market participants.

The problem began about a year ago, when the CFTC and SEC approved the rule specifying who must register as a swap dealer (SD). That rule identified four trading patterns as a starting point, any of which gets the ball rolling. One pattern is: “Regularly enters into swaps with counterparties as an ordinary course of business for its own account,” which covers a lot of firms.

Next, the rule sets a de minimis threshold for annual trading volume. What most people focused on was the $8 billion of notional volume, going down to $3 billion over time; but the end of that sentence added another threshold: “$25 million with regard to swaps in which the counterparty is a ‘special entity’[SE] (as that term is defined in Section 4s(h)(2)(C) of the Act.”

Of course, this was no problem for firms that have already registered as SDs, but it was a big problem for general market participants. Soon after the dealer definition rule was approved, I pointed this anomaly out to the CFTC staff. They recognized the problem and assured me that it would be dealt with in the forthcoming SEF rules. So last week I went through the final rule, and found no mention of SEs at all, and certainly not of the troubling de minimis language. So I contacted the CFTC and pointed out the problem. Here’s what they said to me:

There may be a few options that you can pursue if you believe that the Commission should take action to address the issue. One option may be to petition DSIO for no-action relief under Commission regulation 140.99. For example, you could request that DSIO provide relief against the $25 million de minimis threshold with special entities for transactions done on SEFs and DCMs. Any no-action request should go to Gary Barnett, who is the Director of DSIO. Another option may be to petition the Commission to amend the swap dealer rule under Commission regulation 13.2. These are only a few options, there may be others.”


It would appear that petitioning the CFTC to amend the swap dealer definition rule is the best alternative. I have done that (see letter to Director Gary Barnett, below), but others who would be affected should as well.

The address is:

Mr. Gary Barnett, Director
Division of Swap Dealer and Intermediary Oversight
Commodity Futures Trading Commission
Three Lafayette Center
1155 21stSt. NW
Washington, DC 20581

Although the CFTC has exempted trades conducted on a SEF or DCM from many of its rules, it neglected to do so in this case. What that meant was that any market participant that satisfied the pattern criterion and happened to do a trade larger than $25 million with a special entity on a SEF would be stuck having to register as a SD. When you consider that asset managers might execute large trades for their ERISA clients on SEFs, and their counterparties wouldn’t know about it until the trades were allocated, you begin to see the dangers. In fact, an ERISA account could wind up being both a SD and a SE at the same time!

LCH Swapclear Margin, the need for change and the impact

FSM and Event Sourcing

Tales from a Trading Desk

For some while I’ve been kicking around various Proof of Concepts (PoCs) that leverage Finite State Machines (FSM) and Event Sourcing to solve various financial problems.  It’s thus nice to read what other people are doing in a similar space.  Although old, Ruminations of a Programmer, has an interesting read on the use of Akka coupled with Event Sourcing and FSM.  What’s even better is that the posting provides an example from a Trade perspective 🙂  Debasish has a presentation from the Emerging Technologies For The Enterprise conference that provides further reading.

CQRS as a tenet of Even Sourcing, coupled with FSM, provides an interesting solution to the problem of  globally distributed events.  Leveraging the command-model (FSM) coupled with the query-model (Event Source) allows the building of reliable distributed systems at a worldwide scale where state at certain points are relevant, and needed, but that asynchronous communication is acceptable…

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