ICAP looks to regain its leading position in forex liquidity providing.
Interdealer broker ICAP has announced that Laurent Paulhac will join the company as managing director and will be in charge of its US based ICAP SEF LLC. He is joining the firm from the CME Group where he was managing the over-the-counter (OTC) products and services. He was largely responsible for developing, execution and management of the global OTC business strategy.
The effort comes at a critical time for ICAP plc (LON:IAP), as they have been losing market share with their EBS forex solution. They have ceded 1st place to Thomson Reuters and its FXall division.
After numerous warnings by securities industry firms and a subsequent delay in implementation to November the 1st (thank you, government shutdown!), SEF enforcement is in the end becoming effective.
SEFs have been introduced by US financial regulators as a response to the derivatives-driven market collapse of 2008, which led to the unraveling or even (near or total) collapse of financial stalwarts such as Bear Stearns, Lehman Brothers, AIG, and RBS, among others. SEFs are aimed at forcing complex derivatives called swaps into open trading venues. Electronic trading platforms that want to trade swaps were to start complying with new rules on October 2, but in effect enforcement of SEF rules have been delayed to November.
SEF trading will be mandatory (with few exceptions) relating to any type of “swaps” that are subjected to a CFTC regulated centralized clearing mandate and they have to be “made available to trade” (MAT) by at least one SEF. This MAT determination is currently effective, although the CFTC anticipates SEF trading to commence in February 2014, while the first SEF filed a MAT certification with the CFTC on October 18, 2013 (just after the end of the government shutdown).
The text of the full press release can be accessed on ICAP’s website.