CFTC Proposes Eliminating SEF Order Book Requirement for Permitted Transactions

The CFTC proposed amending its regulations to eliminate the requirement that swap execution facilities ("SEFs") offer an order book for permitted transactions.

In the proposal, the CFTC noted that order books for permitted transactions have been rarely used by market participants, unlike those for required transactions. The proposal would codify CFTC Letter 25-24, a July 2025 no-action letter in which the Division of Market Oversight said it would not recommend enforcement against an SEF that does not offer an order book (see prior coverage). The Commission said codification gives SEFs more long-term certainty than a staff position that does not bind it.

The proposed amendment to CFTC Rule 37.3 ("Requirements and procedures for registration") would allow SEFs to choose not to offer an order book for permitted transactions. SEFs would still have to offer an order book for required transactions. The CFTC stated that removing the requirement would give SEFs flexibility to allocate resources more efficiently and could spur innovation in execution methods better suited to the products they list.

Comments are due 30 days after publication in the Federal Register.