Australia’s Yieldbroker given one month exception from SEF requirements


CFTC gives Yieldbroker until November 1 to finalize its SEF application.

While US financial regulators promised that they were going to be completely rigid and strict with the planned implementation of Dodd-Frank Act requirements such as that of SEFs, the exceptions keep coming.

First, we learned that the CFTC is delaying enforcement of many of the tougher SEF rules by one month, to November 1. Now comes word that the CFTC will exempt altogether the Australian exchange Yieldbroker from SEF rules, also until November 1. Yieldbroker had confidentially submitted a draft SEF application (but not a final one) to the CFTC just last week, which detailed some issues Yieldbroker would have in both meeting SEF requirements while still maintaining its Australian Market License (AML), issued by the Australian Securities and Investment Commission (ASIC), Australia’s financial regulator.

Yieldbroker is actually a co-op, owned jointly by several global banks including ANZ, CBA, Citi, Deutsche, JPMorgan, Macquarie, NAB, RBC, RBS, TD, UBS and Westpac. Yieldbroker is the dominant electronic trading platform in the Australian debt markets.

We expect a lot more ‘kinks’ to be ironed out of the system as SEFs become mandatory as of today, as both SEF license holders and swaps market participants get used to operating by the new rules.

What are SEFs? SEFs are licensed trading venues, aimed at forcing complex derivatives called swaps out of the ‘private’ over-the-counter market and into open trading venues. Electronic trading platforms that want to trade swaps have to start complying with new rules on October 2.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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Australia's Yieldbroker given one month exception from SEF requirements

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