CFTC proposes ending SEF order book mandate for permitted transactions

The Commodity Futures Trading Commission (CFTC) has proposed removing a 13-year-old requirement that mandates swap execution facilities (SEFs) maintain order books for certain permitted transactions. Under current regulations, registered SEFs must provide order books for all swaps listed on their platforms, including those that traders may execute through other methods.

The commission noted that market participants rarely utilize these order books for permitted transactions, despite their availability. CFTC Chair Michael Selig stated that the proposal aims to reduce “excessive requirements” and aligns with the agency’s commitment to providing the “minimum effective dose of regulation.”

If adopted, the rule would allow SEFs to decide whether the costs and resources required to maintain order books for permitted transactions are justified, potentially allowing them to redirect resources toward other execution methods. The proposal does not affect order book requirements for swaps classified as required transactions. The CFTC will seek public feedback for 30 days following the proposal’s publication in the Federal Register.