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