All eyes on CFTC as credit traders await key SEF votes

Brokers and dealers were focused on the Commodity Futures Trading Commisson on Tuesday as the regulator was set for a meeting that will likely lead to final decisions on many key operating rules for swap execution facilities (SEFs).

The US regulator will make key rulings on block trade exemptions for real time reporting of swap transaction data, data recording and record keeping and the final effective dates for swap regulations.

Amid rumours that a final rule on block trade exemptions may be reproposed, delaying a final decision, credit derivaitve market participants were preparing to absorb what could be a defining day for the future of electronic trading under Dodd Frank.

"It's an important day," says Chris Ferreri, managing director, hybrid at Icap. "With regard to the proper block trade level, we are focused on an amount low enough that liquidity is not impaired and which will encourage electronic participation; and which under the new SEF landscape can analyze the data over a period of time to adjust the size as necessary."

Traders have been concerned that block trades set at too high levels will force traders to publish large trade price and volume data in real time, or close to real time, giving rivals an opportunity to exploit knowledge of rival positions.

A live broadcast of the meeting at 9:30 am Washington time will be available at www.cftc.gov.