GFI Group, a provider brokerage, clearing services, electronic execution and trading support products, has signed agreement with National Futures Association (NFA), to perform regulatory services for GFI's swap execution facility (SEF).
According to GFI, 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.
Under the Dodd-Frank Act and the rules and regulation promulgated thereunder, SEFs will have surveillance and other regulatory responsibilities.
The CFTC has proposed to allow SEFs to contract with a registered futures association, such as NFA, or another registered entity for regulatory services.
NFA President Daniel Roth said working with GFI will enhance the surveillance systems to assist GFI and other SEFs in meeting their regulatory responsibilities.