SEFs are platforms that operate under the CFTC’s regulatory oversight for the trading of swaps.
The U.S. Commodity Futures Trading Commission (CFTC) has issued an Order of Registration to LedgerX, the New York-based bitcoin swap exchange, granting it registration status as a Swap Execution Facility (SEF).
After review of the LedgerX application and associated exhibits, the CFTC has determined that LedgerX demonstrated compliance with the Commodity Exchange Act (CEA) and the CFTC’s regulations applicable to SEFs.
LedgerX will operate a regulated bitcoin options exchange and clearing house that will list and clear fully-collateralized, physically-settled bitcoin options for the institutional market.
The terms and conditions of the Order require, among other things, that LedgerX comply with all provisions of the CEA and all requirements in the CFTC’s regulations, as may be amended or adopted from time to time, that are applicable to SEFs.
LedgerX also must comply with all representations and submissions made by it in support of its application for registration as a SEF, including, but not limited to, its representations that it will not list an intended to be cleared swap until it has a clearing agreement with a derivatives clearing organization registered under CEA and it will not list a swap that is not intended to be cleared until it submits to the CFTC revisions of its rulebook and other pertinent registration materials, pursuant to CFTC’s regulations, to provide for the execution of uncleared swaps.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Act) authorized the creation of SEFs.