In 2013 Bloomberg was the first applicant to receive approval from the Commodity Futures Trading Commission (CFTC) to operate a multi-asset swap execution facility. Bloomberg’s swap execution facility (SEF) is a trading platform that provides efficient access to swaps regulated under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Bloomberg SEF is the only swap execution facility to allow entirely anonymous order book trading from execution through post-trade confirmation.
First year performance
Bloomberg announced today that its multi-asset swap execution facility, Bloomberg SEF LLC, executed more than $6.6 trillion in transactions during its first year of operation. Since the CFTC’s SEF rules went into effect on October 2, 2013, nearly 150,000 trades were completed on Bloomberg SEF across multiple asset classes, including interest rate swaps (IRS), credit default swaps (CDS), and foreign exchange (FX) and commodity derivatives.
Credit default and interest rate swaps comprised the vast majority of Bloomberg SEF transactions. Approximately 85,000 CDS transactions totaling $3.45 trillion and 48,000 IRS transactions totaling $3.15 trillion were executed on Bloomberg SEF in the past year. More than 11,000 FX derivatives trades were completed for a total of $59.78 billion. Commodities derivatives were the least traded instruments with 518 trades totaling nearly $2 billion.
“We are pleased with the participation levels and sustained growth of Bloomberg SEF in the first year of operation,” said Ben Macdonald, Bloomberg’s Global Head of Product and President of Bloomberg SEF LLC. “Our customers expect best-in-class execution services to help them succeed in an evolving regulatory landscape in the U.S. and around the world. We look forward to expanding our global solutions into Europe and Asia to meet the needs of our global customer base.”
A broad cross-section of more than 900 global clients enrolled with Bloomberg SEF in the first year, including banks, asset managers, hedge funds, corporations, insurance companies and pension funds. Available to participants located in 31 countries, Bloomberg SEF provides cross‐asset liquidity to the 320,000 Bloomberg+ Professional service subscribers around the world, and supports both request‐for‐quote and “order book” trading functionality.
Developments during the first year
Throughout the past year, a number of developments occurred in the marketplace. More non-traditional market participants began enrolling with Bloomberg SEF as overall usage expanded. The emergence of “packaged” trades allowed participants to better mitigate risk. Although request-for-quote trading still dominates the market, SEF participants recently began using order book trading with increased frequency.
Bloomberg also launched this year its swap data repository (SDR), a centralized recordkeeping facility that provides a cost-effective solution to collect, store and publicly disseminate multi-asset derivatives trading data.
New multilateral trading facility (MTF) in Europe in development
Bloomberg say their global strategy includes registering as a multilateral trading facility (MTF) in Europe to help customers comply with MiFID and EMIR guidelines, and expanding our solutions in Asia as regulations in the region evolve.