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NFA to Provide Regulatory Services to GFI's SEF

GFI is contracting with NFA to provide regulatory and surveillance services to its swaps execution facility, as allowed by the CFTC.

The National Futures Association (NFA) is stepping up to play a role in the world of swaps execution facility. Today, GFI Group and NFA said they entered an agreement that paves the way for NFA to perform regulatory services for GFI's swap execution facility (SEF).

According to both parties, the agreement establishes a preliminary framework for the exchange of information and the development of technology standards that will enable GFI and the NFA, to develop, test and launch automated trade practice and surveillance systems and also to develop procedures and processes necessary for GFI to fulfill its SEF self-regulatory obligations.

Upon the issuance of the Commodity Futures Trading Commission's (CFTC) final SEF rules, NFA and GFI anticipate that they will enter into a formal Regulatory Services Agreement, noted the release.

Under the Dodd-Frank Act, the CFTC has proposed to allow SEFs to contract with a registered futures association, such as NFA, or another registered entity for regulatory services.

"This is a significant step forward as we engage in new regulatory activity on behalf of SEFs. For over ten years, NFA has been successfully performing trade practice and market surveillance functions on behalf of futures exchanges," commented NFA President Daniel J. Roth. "We look forward to working with GFI as we enhance our surveillance systems to assist GFI and other SEFs in meeting their regulatory responsibilities."

Commenting in the release, Scott Pintoff, GFI's General Counsel said that NFA with its regulatory expertise “was the logical choice to assist GFI in meeting its obligations as a SEF under the Commodity Exchange Act."

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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