Article: CFTC causes ironic eTrading paper trail | Risk article

13 February 2014 | Jon Skinner

Further to pushing eTrading offshore through footnote 88 of its SEF rules, another footnote (195) was clarified by CFTC to demand SEFs become a central source of paper ISDA master agreements for non-cleared products executed on their platforms - says a Risk article (subs. required).

It turns out from the January 30th CFTC public meeting that SEFs have to obtain and store a paper copy of the ISDA master agreement between each new pair of parties doing a non-cleared trade between them to be executed on their platform.   Oh and we don't know whether the SEF falls out of compliance on SEF MAT date or is already out of compliance back to October 2nd when the first set of SEF rules for permitted transactions went live.

Ironically in the short term this would make non-cleared products (e.g. FX derivatives, IR swaptions, cross-ccy IR swaps, single name CDS etc.) more paper intensive to trade on SEFs than bilaterally - where many though not all trades are electronically confirmed.  
Another last minute headache inducing trading to go off-shore or off-eTrading.
(Another last minute no-action relief? - Ed.)