Wall Street Letter VOL. XLV, NO. 36 - December 2013 | Page 7

DECEMBER 2013

end trading activities and market
data, accounting and support comes
from Eagle directly, or other vendor
solutions we integrate for a specific
client.”
Eagle also partnered with Eze
Software Group and Charles River
Development, among others,
according to Lehner.
SEFCON 2013

Swaps participants
urge judicious MAT
determinations
Over-the-counter swap industry
participants expressed some concern
at The 4th Annual Swap Execution
Facility conference held in November
in New York over pending determinations by the CFTC that certain
contracts would be made available
to trade (MAT) in comments during
panel discussions at the event.
The MAT determination is intended
to identify which swap contracts fall
under provisions of the Dodd-Frank
Act that require standardized swaps to
be traded on electronic platforms.
The concerns were voiced after an
opening speech by CFTC Chairman
Gary Gensler in which he noted he
expects a significant portion of the
interest rate swap market would have
a trade execution requirement in
February.
On a panel about changes to the
market structure for swaps, Christine
Ayotte-Brennan, vice president and
associate general counsel in the Fixed
Income Division of Fidelity Asset
Management, explained one concern
is MAT declarations may come too
soon for buysiders to be comfortable contracting with swap execution
facilities they aren’t familiar with.
As an example, she said while a
SEF may consider every point on the
interest rate swap curve to be MAT,
the firm may not feel the venue can
prove its ability to offer trading for
each contract.

“We may be forced as a buyside
participant to go to… a less established SEF provider, and maybe the
rulebook is not compatible with how
we work... and we get shut out of the
market,” she speculated.
Instead of urging blanket submissions, she noted “a very responsible”
way to move contracts in to the
mandatory electronic trading bucket
would be to start with benchmarks
and add a little at a time.
On the same panel, Jeffrey Maron,
managing director at Markit, agreed
with a staggered rollout, noting the
mandatory clearing rollout could be
a model.
“We have the capacity to do [made
available to trade] perhaps on different dates, with different market participants. That would enable people
to step into the market when they are
ready to do so.”
TRADING FIRMS

BGC CEO sees
global acquisition
opportunities
Howard Lutnick, CEO of BGC
Partners, told attendees at the Keefe,
Bruyette & Woods Brokerage and
Market Structure Conference in New
York last month that he expects a
number of opportunities to crop
up for the acquisition of smaller
interdealer brokers due to increasing
regulatory pressures.
“You are going to see transactions
for us definitely, and I assume for
other guys as well, but maybe I am in
a better position because I have $900
million in cash,” he said in his comments, which were also broadcast live
via the internet.
He noted the issue is that regional
IDBs that might consider expanding
their services to provide access in
the Americas or Europe will be faced
with prohibitive regulatory costs,
which he estimated to be around $5m
per year.

“That is coming right now, the
pain of the regulatory environment
is manifesting itself in the earnings of
these companies,” he added.
TRADING FIRMS

WallachBeth to
expand ETF and
options trading desk
WallachBeth will expand its staff
to bolster electronic trading across
exchange-traded funds and options
over the next two years, according to
Michael Wallach, CEO.
The agency broker-dealer aims to
bring on 15-20 people, some of which
may be college interns that transition
to permanent employment with the
company, according to Wallach. He
added this strategy ensures the staff
has a rounded experience in the firm
before taking up a permanent role.
“We’ve hired f