All together now: the tech challenges of Sef aggregation

All together now

Paul Caplin

If the over-the-counter derivatives market was a mirror, regulators on both sides of the Atlantic would now be anticipating seven years of bad luck. Their reforms, which dramatically revamp OTC clearing, execution and reporting, are intended to make the market more robust, but could have the side-effect of shattering netting sets and liquidity. Swap execution facilities (Sefs), on which all clearing-eligible trades have to be executed, according to the US Dodd-Frank Act – and which are