Institutional investors would get a chance to see the prices at which swaps are trading under a proposal put forth by US securities regulators on Wednesday that is designed to shed light on the nearly $600 trillion swaps market. The Securities and Exchange Commission's proposal would implement a major provision in the Dodd-Frank law that would move some swaps onto regulated trading platforms.
Customers would then be able to see if they are getting a good price from dealer banks such as J.P. Morgan and Goldman Sachs. The swaps could be traded on a traditional exchange or a new facility created under Dodd-Frank known as a "swap execution facility," or SEF.
The SEC's rules would only apply to the narrow slice of the market it regulates under Dodd-Frank, which includes products like equity swaps and swaps used by investors who wish to hedge against a default on a single company's bonds. The SEC agreed in a unanimous vote to put the rules out for public comment. The SEC's proposal lays out a new regulatory scheme for SEFS.
Comments
Comments are closed for this article.