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ARTICLE · 08 NOVEMBER 2022

So Who Does Need To Register As A SEF?

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In September 2021 CFTC staff issued an advisory (Letter 21-19) "reminding entities" of SEF registration requirements.

United StatesFinance and Banking
Stephen R. Morris
Stephen R. Morris
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In September 2021 CFTC staff issued an advisory (Letter 21-19) "reminding entities" of SEF registration requirements. The "entities" specifically in scope of the reminder, per that advisory, were those: (1) facilitating trading or execution of swaps through one-to-many or bilateral communications; (2) facilitating trading or execution of swaps that are not subject to the trade execution requirement under the Commodity Exchange Act; (3) providing non-electronic means for the execution of swaps; or (4) falling within the SEF definition and operated by an entity currently registered with the CFTC in some other capacity, such as a commodity trading advisor or an introducing broker.

After that first step, in the last few months, other shoes have started to drop. In September the CFTC, citing Letter 21-19, settled its first enforcement action against a CTA for failure to register as a SEF. In that case, as alleged, the CTA "often recommended that clients execute swap

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