ICAP’s U.K. subsidiary, ICAP Global Derivatives Limited (IGDL), has officially launched, upon receiving temporary Swap Execution Facility (SEF) approval from the U.S. Commodity Futures Trading Commission (CFTC), making it the first global SEF and multilateral trading facility (MTF) to be regulated by both the CFTC and the U.K. Financial Conduct Authority (FCA).
As a result of the dual registration, IGDL can provide direct access to market participants in both the U.S. and European Economic Area (EEA). IGDL will initially focus on G3 Rates, including USD, EUR and GBP for interest rate swaps, overnight index swaps, forward rate agreements, interest rate options, swaptions, inflation and exotic swaps and options. All other products and instruments will continue to be serviced on ICAP’s existing U.S. SEF, ICAP SEF (US). However, ICAP intends to migrate more products to IGDL and will seek additional permissions to operate the IGDL SEF in more jurisdictions, such as countries in the Asia-Pacific region.
“The launch of IGDL is an important initiative for our clients and our markets, mitigating the risk of liquidity fragmentation,” says Laurent Paulhac, CEO of the ICAP SEF. “With this dually regulated entity, market participants from all key jurisdictions can participate in the same global liquidity pool for our G3 rates products. In conjunction with this launch, we are rolling out our next generation voice Request for Quote (RFQ) protocol, called vRFQ 2.0, delivering voice execution services to our clients that are specifically designed to be compliant with U.K. and U.S. regulations. vRFQ 2.0 is powered by technology innovation enabling our voice execution services to work seamlessly with i-Swap, our interest rate swap (IRS) electronic execution platform.”
Peter Best, COO of the ICAP SEF, adds: “With mandatory swaps trading now a requirement for many market participants across multiple asset classes, ICAP is committed to offering its customers market-leading execution solutions that manage their swap risk in a fully compliant manner. IGDL is the result of ICAP’s commercial, legal, regulatory, technology, and operational teams together focusing on delivering an unparalleled trading experience and multi-jurisdiction-compliant platform in response to client needs and expectations. We have consulted heavily with our major clients in the process and look forward to continue to be a trusted partner for all market participants now and in the years ahead as the marketplace adapts to a regulated trading environment, and we want to thank our customers sincerely for their support and confidence during this initial phase of the process.”
ICAP Launches Dually Regulated SEF in U.K.
ICAP's U.K. subsidiary, ICAP Global Derivatives Limited (IGDL), has officially launched, upon receiving temporary Swap Execution Facility (SEF) approval from the U.S. Commodity Futures Trading Commission (CFTC), making it the first global SEF and multilateral trading facility (MTF) to be regulated by both the CFTC and the U.K. Financial Conduct Authority (FCA).