FT: Getting swap definition right
25 April 2011
Jeremy Grant writes in the FT that the Securities and Exchange Commission and the Commodity Futures Trading Commission are close to resolving their differences on a key issue: how to define OT swaps.
At issue is the definition of a “security-based swap” and of a “swap”. It’s more than that, however. It’s about which agency gets to regulate which types of product, bearing in mind that the SEC oversees securities markets (cash equities and options), and the CFTC oversees futures.
The SEC has produced a definition on swap execution facility that is far closer to the request for quote model that the dealers want, while the CFTC has proposed a more “exchange-like” model where prices are there for all to see.
© Financial Times
