A colleague, who is among those closely following new US legislation the “Wall Street Transparency and Accountability Act of 2010,” has drawn my attention to Section 733: new provisions for regulating electronic swap trading platforms as “Swap Execution Facilities” – similar to EU MTFs. It will apply to US firms and most likely any platform wanting direct access to US users. In many ways this is a good thing. The US currently has no MTF equivalent and this has previously provided difficulty for MTFs trying to access directly US markets as the current no-action regime only applies to regulated markets and not MTFs.
But there are unanswered questions. Is the regulatory regime wider and stricter than the EU? Will it create an arbitrage between the US and European regimes and are there requirements in it which may impact on the commerciality of European platforms if they want to access the US? We look forward to seeing more regulatory flesh on the bones.