A Dodd-Frank Compliant Trading Platform
360T’s Swap Execution Facility (SEF) provides market participants with a fully-regulated trading venue so that they can be certain of meeting all their compliance obligations.
We know that today compliance is an absolute key concern for any financial services firm and that regulatory risk is taken very seriously. That is why at 360T we have always strived to ensure that we offer market participants a trading environment that meets the highest standards of regulatory adherence and industry best practice. To this end, our SEF enables firms to conduct their FX trading activity secure in the knowledge that this platform meets all of the regulatory requirements under the Dodd-Frank Act.
Overview
The Background
In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank” or the “Act”) was signed into U.S. federal law. The Act made changes to the financial regulatory environment in the United States as a way of promoting financial stability by, among other things, improving accountability and transparency in the financial system. Within the Act, Title VII addressed concerns regarding the regulation of the Over-The-Counter Swaps markets, and in particular required certain OTC Derivative and FX instruments to be traded on a regulated SEF.
360T's Response
Following interpretation and implementation of the Swaps trading rules by the US Commodity Futures Trading Commission (CFTC), 360T Inc. commenced SEF operations under a temporary registration order in October 2013. On 22 January 2016, 360T Inc. was granted full SEF registration status in the United States.
Although established in the United States, 360T SEF is also available in other countries including a number of provinces in Canada, in Switzerland, Australia and in certain countries within the European Economic Area. Details can be provided upon request.
SEF Product Range
360T SEF offers trading in those foreign exchange financial instruments classified as Swaps in accordance with the provisions of the Act. At present, this applies to FX Options, FX non-deliverable Forwards and FX Swaps (NDF and NDS). 360T SEF services provide clients with greater transparency and enhanced control at every stage of the trading lifecycle, and equally enables clients to comply with their own regulatory obligations at appropriate stages of the trading life cycle.
Learn More
If you are interested in exploring the opportunities presented by 360T SEF, then please contact your account manager or write to the 360T compliance department email below, who will provide you with a copy of the SEF Participation Agreement.
compliance@360t.com360T Trading Networks, INC. Execution Solutions
360T offers execution solutions consisting of (i) a Request for Quote (“RFQ”) functionality and (ii) a Central Limit Order Book (“CLOB”) that interacts with the RFQ functionality.
1. Request for Quote
- The RFQ process begins when a Market Taker sends a “request for quote stream” to one or more Market Makers with whom it has existing trading relationships. After the Market Makers receive this request, they then determine whether and under which conditions they would be willing to trade with the Market Taker. These determinations are typically made automatically via pricing engines utilized by Market Makers. While a Market Maker will know the Market Taker’s identity, it will not know the identity of the other Market Makers with whom it is competing. If the Market Taker desires to transact with a Market Maker, it will send an execution request to the Market Maker. The Market Maker then may either accept or reject this execution request.
2. Central Limit Order Book
- The CLOB serves as a mechanism pursuant to which participants may post Limit Orders that are displayed to other participants and which may be filled on an all-or-none basis. All Limit Orders must have a minimum time-in-force of not less than 15 seconds, and thus cannot expire or be canceled before this minimum time period has elapsed. A Limit Order will be displayed as executable as between Participants that have established a counterparty relationship if the order is within the credit limits for such Participants as communicated to 360T. Otherwise, the Limit Order will be displayed as having an indicative price. Opposing Limit Orders that match are not automatically executed on the CLOB. Instead, a Participant that desires to execute against a Limit Order displayed by another Participant must contact such Participant directly in order to consummate such execution.The RFQ platform and CLOB interact as follows:
- If a response to an RFQ matches an executable Limit Order that is resting in the CLOB, then the Trading System will display that executable Limit Order to the Market Taker that initiated the RFQ. In addition, the best indicative Limit Order resting in the CLOB also will be displayed to the Market Taker.
- If a Market Maker provides a quote via its pricing engine in response to an RFQ which matches a Limit Order that it has placed on the CLOB, only the most recent quote will be displayed to a Market Taker.
3. Reporting and Clearing
- 360T reports all SEF transaction data to the Depository Trust Clearing Corporation (“DTCC”) as its Swap Data Repository as required under Commission Regulation 43.3(b)(1).
- None of the instruments offered by 360T are currently subject to clearing, however 360T has taken the preliminary step of signing an agreement with a middleware provider that will assist it in performing pre-trade credit checks and transmitting trade data to the various derivatives clearing organizations.