As the SEF era begins, its success is far from assured.
Boston, January 08, 2014 – Years after the first G-20 summit and Dodd-Frank's passage, swaps may finally be made available to trade early this year, heralding the true inauguration of the SEF era. Remaining issues include unfinalized rules in the United States and possible regulatory inconsistencies among major global economies. However necessary the regulatory mandates, they are the polar opposite of organic market development and have the potential to drastically disrupt global OTC markets. In other words, though Dodd-Frank's execution mandate has certainly resulted in a great blossoming of SEFs, all is not a bed of roses: SEFs must consolidate before liquidity can thrive and SEFs can eventually blossom once more.
Based on Aite Group conversations with market participants, electronic platforms and markets, and vendors, this Impact Note examines the many expected bumps in the road still ahead for SEFs as well as some new and unexpected twists and turns that have just come into view.
This 24-page Impact Note contains three figures and two tables. Clients of Aite Group's Institutional Securities & Investments service can download this report.