On January 16, 2014, staff of the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (Division) announced that the first “made-available-to-trade” determination (MAT Determination) will become effective on February 15, 2014. This means that as of February 15, 2014, certain types of fixed-for-floating interest rate swaps must be executed on a swap execution facility (SEF) or a designated contract market (DCM), unless an exception applies (e.g., the end-user exception).

The Division’s press release indicates that an interest rate swap subject to the MAT Determination must be executed on a SEF or DCM even if the swap is part of a “package trade” or a single leg of a multi-leg trade. A statement of dissent from CFTC Commissioner O’Malia suggests that the CFTC’s Office of Chief Economist estimates that package transactions comprise almost 50 percent of the notional volume of the rates market.  Acting Chairman Wetjen has directed the Division to hold a public roundtable on issues related to package transactions, including whether to grant limited relief for package transactions from the MAT Determination.

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