Wall Street Letter VOL. XLV, NO. 36 - December 2013 | Page 12

NEWS

the FCM has at exchanges operated by the CME Group as well as
NYSE LIFFE and the CBOE Futures
Exchange, also allow the firm to have
better control over its customer segregated funds, Che Chern added.
Having established the business
here, the firm is now getting inquiries
from US clients about access back to
Asia, he said.
“In Asia, there are growing economies and growing futures markets.
The futures market is a way for the
US clients to get exposure to these
Asian economies by investing in
stock indices.”
Che Chern noted interest from
firms may be due to opportunities
they see for arbitrage trading across
the different Asian exchanges or to
offer liquidity as market makers.
TRADING FIRMS
12

MarketAxess exec:
Buysiders focused
on SEF issues
Buyside firms are focusing on legal
and compliance issues as they look
to finalize decisions on which swap
execution facilities they will use, according to comments from Grigorios
Reppas, CDS
product manager
at MarketAxess.
SEFs with CFTC
approvals have
been operating
since Oct. 2, allowing all potential
GRIGORIOS REPPAS participants an
CDS product manopportunity to
ager at MarketAxess
test out the venues
without requiring
pre-trade credit checks or signing
agreements to comply with SEF rulebooks, Reppas said.
An exact date for SEF trading has
not been set, but made available to
trade (MAT) submissions have been
sent by several SEFs to the CFTC,
and Gary Gensler, CFTC chairman,

FIA EXPO 2013

Sprecher highlights need for grassroots action

J

eff Sprecher, CEO of the Intercontinental Exchange, told participants at the
Futures Industry Association’s 29th Annual
Futures & Options Expo in Chicago that
equities market structure changes can and
should come from participant effort rather
than regulatory intervention.
In response to a question about the
prospect for regulatory action on equity
market structure during a panel discussion,
Sprecher said he has noticed a mindset
among participants that permission must
be requested and granted to make changes
that they are obliged to make.
“I grew up in the civil rights era, and I
grew up during the Vietnam War and we
as a populous didn’t go ask the government to fix problems. We as a populous are
the government, it is a government of the
people, and my mindset is that we as an

industry should talk openly about how to
make it better and we should get on with
it,” he said.
He also noted the focus in equities seems
to have moved away from the reason the
markets exist.
“In our commodities and derivatives
markets, we think about risk management,
and the exchange of risk, and helping
people hedge and speculate by accepting
other peoples’ risk, and in the equities market, people just seem to talk about trading
as if that is what it is about,” he said.
That focus has led to a belief that the
exchanges are no more than matching
engines, Sprecher said, adding that that is
not the case.
“I am going to become more outspoken
about that, and ICE is in a good position to
do that,” he added.

indicated in November that a trade
execution requirement in credit index
and interest rate swaps could be in
effect by February.
Reppas noted if firms have not
already selected a SEF, they will need
to complete on-boarding documentations and futures commission
merchants’ credit forms before the
mandate, a process that can take
weeks.
Firms are doing due diligence on
the available SEFs, some of which
may be run by firms they have no
prior relationship with, said Reppas,
noting it’s mostly existing clients that
have already signed agreements with
MarketAxess.
“A lot of these client are still trading over the phone,” he said, adding
clients may not fully adopt electronic
trading until MAT mandates are
effective.
Reppas said he expects delays are
also due in part to the amount of time
it takes to complete due diligence on

the different SEFs as well as the FCMs
the firm chooses to connect to and
the clearinghouse of choice.
TECHNOLOGY

Hanweck to
introduce risk
offering to Europe
Hanweck Associates plans to release
its Volera low latency risk management offering into Europe through a
partnership with NYSE Technologies,
according to Gerald Hanweck, CEO
and founder.
The expansion into Europe is being
done over the next month, according
to Hanweck. He said the offering will
cover the options market for Europe
and eventually Asia, in addition to US
listed options.
“NYSE is our redistribution
partner, they resell Volera as white
labeled options analytics,” said