EXTERNAL MEETINGS: TELECONFERENCE WITH ICAP

On December 22, 2010, Commission staff participated in a teleconference with ICAP to discuss the notice of proposed rulemaking regarding swap execution facilities.  ~ ~Access~ICAP asked what entities are included in the proposed regulations regarding access.  Commission staff noted that eligible contract participants and independent software vendors are included in the proposed regulations.  Regarding independent software vendors, ICAP asked whether the proposed regulations would require it to grant access to any independent software vendor requesting such access.  Staff noted that the proposed regulations address the type of process and criteria (e.g., impartial, transparent) that swap execution facilities must apply with respect to access.  Staff suggested that upon review of the notice of proposed rulemaking it would be welcome and useful for ICAP to submit comments addressing any related issues.~ ~Transactions~ICAP asked what transaction-level classifications are included in the proposed regulations.  Commission staff noted that the proposed regulations define two types of transactions: required transactions (i.e., subject to execution requirement, made available to trade and not block trades) and permitted transactions (i.e., block trades, not subject to clearing and execution requirements, illiquid, bespoke).  Regarding required transactions, ICAP asked whether voice brokers would be allowed to execute such transactions.  Staff noted that although voice brokers would not be allowed to execute required transactions, voice brokers could be involved in pre-execution events facilitating the execution of required transactions on a swap execution facility.   Regarding permitted transactions, ICAP asked whether entities must be registered swap execution facilities to provide execution or trading of such transactions.  Staff noted that if entities provide execution or trading of block trades then such entities must be swap execution facilities.~ ~Trading Systems or Platforms~ICAP asked whether operators will be required to deploy request for quote systems under the proposed regulations.  Commission staff noted that the proposed regulations do not include this requirement.  ~ ~Blocks~ICAP asked whether the proposed regulations specify 'work-up' procedures in respect of block trades.  Commission staff noted that the proposed regulations do not specify work-up procedures.  Staff suggested that upon review of the notice of proposed rulemaking it would be welcome and useful for ICAP to submit comments addressing any related issues.