LONDON, July 6 (IFR) - NEX Group has launched its new swap execution facility, NEX SEF, offering Dodd-Frank compliant trading in non-deliverable FX forwards traded over the firm's EBS platform.
The SEF, which received approval from the US Commodity Futures Trading Commission in April and is also registered with the UK's Financial Conduct Authority, began operations on July 3.
Initial launch included seven emerging market NDF currencies that are currently traded over EBS - the electronic platform that was retained by NEX following the group’s £1.28bn sale of ICAP’s voice and hybrid broking operations to Tullett.
Expansion plans are already in the works with an initial focus on expanding the range of currencies to the LatAm region. A longer-term ambition to add interest rate swaps could help to optimise trading process for clients using many of the risk management businesses that sit in the NEX Optimisation Unit.
In addition to offering execution for clients in the US and across the European Economic Area, NEX SEF is also approved for clients in Ontario after receiving an exemption from the requirement to be recognised as an exchange from the Ontario Securities Commission.
The SEF will operate as a Multi-Lateral Trading Facility in accordance with MiFID and will comply with MiFID II from January 3.
Launch of the new platform takes the total number of CFTC-authorised SEFs to 24 and puts NEX in competition with ICAP US, which was included in the sale to Tullett last December. (Reporting by Helen Bartholomew)