Rob Huston - National Council of Farmer Cooperatives - Non standard contracts on SEFs without being cost prohibitive. Don't want to be labeled a swaps dealer
Kev McPartland Tabb Group 87 percent of market says SEFs are good. CFTC shouldn't be too prescriptive
Wallace Turbeville - bettermarkets. Against RFQs ok for blocks not for negotiated trades.
Conny Volstad - ISDA - smaller guy in much better shape than large pension. Transparency problem for larger guy - will be more expensive
Big buy side issues seem to revolve around RFQ, 5 dealer rule, transparency, blocks, & evolution vs revolution
William DeLeon - PIMCO - futures & swaps need to be separate for mid term. Market currently dark. Can't switch to displayed overnight. Will be v expensive
Pimco - clearing far more systematically important than trading transparency.
PIMCO 5 dealer rule for big trades very problematic. Winners curse. W/ 15 sec transparency loser knows they lost quickly & can hose winner
ISDA - clearing critical and should beleaguered done first
Dexter Senft SIFMA - clearing will drive SEF trading. But SEFs are out there now and SEF trading will drive more SEF trading.
Commissioner Dunn asked Kevin McPartland at TG to get access to our upcoming SEF survey when it comes out in a week or so
Bloomberg - concerns about compliance. Some SEFs will take on risk others won't. Don't regulate both the same
Bloomberg - global concerns. What happens when a UK firm books a trade with a US SEF settling in another geo? Who regulates?
Bloomberg- a few million dollars a year on compliance. Will be significant for smaller firms
Bloomberg mkt standard for dealer quotes. Derivatives 3 dealers, treasurys 5 dealers, FX many
Bloomberg also many single dealer pages. Lots of transactions go over this channel. So not all trades are sent to multiple dealers
CME - offering a virtual orderbook across SEFs - an ems for SEFs
CME - compliance costs $24m not only SEFs. Adding SEF compliance - guess- a few mill. They are not saying they will be a SEF.
Eris - swaps as futures. CME clearing. Opening up market to 60+ CME clearing firms. Cross margining as well
Eris - limit order book, can hit or lift and or display. Click and done - no backing out. Can do post trade give ups
Eris also does RFQ. Totally flexible contract details. Multi dealers. Click and hit/lift and done.
Fxall worried that regulation crimps flexibility and forces firms to take their fx off shore
FXall 15 sec rule too inflexible. Don't want winners curse. Gensler countered 15 sec doesn't apply to blocks. FXall still concerned.
GFI-trade continuum: voice, auctions, fixings, matching, join/workup, RFQ, order book. liquidity not blocks determine channel
GFI - critical for regulation to keep the trade process in tact
ICAP - natural SEF. Avg trans a day 1.5trillion. $300m a year on IT. Global - 32 countries 70 cities
ICAP - technology doesn't drive liquidity. Liquidity drives technology.
ICAP where should the block size be? ICAP saying make it low 25m 5yr. If too high then institutions will be crimped.
ICE- illiquid markets - without dealers the current market drys up. If you force transparency then dealer has no incentive to make markets
ICE - still a lot of voice. Need voice in illiquid markets.
Javelin - central limit order book, first RFQ second. Connect to CME for clearing.
Javelin - buyer and seller match. Matched trade goes to clearing and clearer then sends to fcm's of buyer and seller.
Javelin- largest challenge - clearing houses are open and non-discriminating.
MarketAxess- prints to trace within 60 seconds. Feels reg costs to be too high - more geared to exch. than SEFs. May keep SEF comp limited.
MarketAxess - RFQ market very valuable for less liquid markets.
Signing off from sefapoolaza very interesting day. Lots of good insight.
Kevin McPartland's Tweets
I want to see trading system demos, not PowerPoint
Bloomberg just got an error during their demo that they didn't send the RFQ to the minimum five. Chuckles in the room.
No lunch at #sefapalooza. The @CFTC needs to spend that money on technology and rule writing.
Didn't expect anyone to talk about how big their data center was at #sefapalooza - @CMEGroupalways surprises
Gentler has arrived 12:10
...and Gensler has left 12:43
Watching EnergyMatch demo - energy may well be the best example of how OTC derivatives markets can be electronic and cleared.
ICAP does $1.5 trillion in notional volume daily and spends $300 million a year on technology
Blackrock "there's times when one liqudity provider is better than five
BGC Parters "Volume Match" - brokers constantly survey clients via voice, estimate mid-market via client chatter
Bloomberg "technology vendors have the advantage over broker platforms" in the SEF world
CME's pitch seems more focused on their history/tradition/technology rather than applications
Interesting stuff from Eris. Innovative products--game changer if they could get volume
Chris Giancarlo from GFI comparing#sefapalooza to "Battle of the Bands"
ICAP "the natural proxy for swaps is the US Treasury market, not the futures markets
Clever. Atlanta-based ICE has an IM platform called Yellow Jacket.
seems like a couple #sefapalooza participants are using the forum for comment rather than platform overviews.
I suppose I should say "PRIMARILY" for comment rather than overviews #sefapalooza
@ltabb Great following you Larry. Nice work.
Bloomberg: SEF concerns include flexibility (price/ clearing), compliance overhead & consistency, intl trades & timelines
Eris Exchange demo material at http://ow.ly/4qsov
Single platform for exempt and non exempt FX instruments with FXall SEF #sefapalooza #FXall