FORESTS, Texas–(BUSINESS WIRE)–AEGIS Hedging Solutions (“AEGIS”) today announced that its application to establish a registered Swap Execution Facility (“SEF”) has entered the final stage of approval. AEGIS SEF, a regulated subsidiary of AEGIS, will operate under rules introduced under the Dodd-Frank Act to improve transparency in derivatives transactions.
The Commodity Futures Trading Commission (“CFTC”) lifted the suspension of the AEGIS SEF application on May 20, indicating substantial completion and compliance with all applicable regulations, reporting and oversight requirements. Assuming typical progressions, AEGIS SEF expects to be fully operational by the start of Q3.
“AEGIS SEF is excited to bring innovation and compliance to advisor-assisted coverage,” said Justin McCrann, President of AEGIS SEF. “The underlying rigor and technology offered by AEGIS SEF will modernize hedging transactions and provide greater efficiency and transparency for all participants.”
The CFTC issued Staff Notice 21-19 to clarify existing regulations and requirements that require commodity trading advisers and introducing brokers (including AEGIS and similar firms) to negotiate and execute trades on the SEFs. While most existing SEFs focus on interest rate and/or foreign exchange contracts, AEGIS SEF will provide a venue to trade and execute commodity contracts in accordance with CFTC guidelines.
“Companies exposed to commodity price volatility need access to compliant advisors when negotiating and executing complex hedging contracts,” said Bryan Sansbury, CEO of AEGIS. “We would like to thank the CFTC for its commitment, the hundreds of customers we support every day, and the financial counterparties who provide liquidity to AEGIS SEF.
Once online, AEGIS SEF will operate under a set of rules guiding the execution of hedging transactions via (i) a request for quotation (RFQ) function to enable negotiations between commercial end users and financial counterparties, and (ii) a central limit order book. (CLOB). Trading on AEGIS SEF will focus on authorized bilateral transactions between financial counterparties and commercial end-users as well as other market participants.
In accordance with open access requirements, AEGIS SEF will be available to commodity trading advisors (including AEGIS CTA) and introducing brokers.
AEGIS simplifies commodity and environmental markets for companies managing their commodity exposures and/or emissions footprints. AEGIS has unparalleled technology and expertise to deliver market intelligence, tailored hedging strategies, efficient trade execution and full cycle management of hedging positions, all designed for regulatory compliance . Building on its core energy coverage capabilities, AEGIS recently made four acquisitions to expand its expertise in the environmental and metals markets, increase its analytics capabilities and fully integrate a SaaS E/CTRM software platform . AEGIS was recently named the industry leader in coverage solutions for an unprecedented sixth consecutive year. To learn more, visit the AEGIS website at www.aegis-hedging.com.
About AEGIS SEF
AEGIS SEF (US) LLC, a subsidiary of AEGIS Hedging Solutions, is a swap execution facility whose application is pending approval by the Commodity Futures Trading Commission (“CFTC”). After approval, AEGIS SEF will operate the commodity markets, interest rate swaps and other instruments. AEGIS SEF will provide a venue for trading bilateral uncleared OTC swaps and intends to operate central limit order book (CLOB) and request for quote (RFQ) systems, as well as trading capabilities blocks via counterparties. For more information, visit https://aegis-hedging.com/swap-execution-facility.