SEFs+DCMs=MTFs+OTFs

The transatlantic trading platform cousins have officially been recognised as twins, on 5 November the European Commission announced its long-promised equivalence decision in respect of U.S. swap execution facilities. The CFTC plans to reciprocate by exempting MTFs and OTFs from U.S. registration requirements. The mutual recognition comes just in time before the 3 January 2018 MiFID 2 mandate that European derivatives trade on authorised or equivalent platforms. Absent equivalence, U.S and EU market participants would have been confined to their respective jurisdictions, wholly at the mercy of geographical liquidity fragmentation. The EC decision and forthcoming US exemption is necessary and will be widely welcomed by all, with the possible exception of the dually-registered ICAP Global Derivatives Limited European SEF whose USP would seem to have been rendered redundant.