AEGIS Hedging Solutions Update on SEF Registration for Certain CTAs
The Woodlands, Texas, September 30, 2021 – AEGIS Hedging Solutions ("AEGIS"), a leading Commodity Trading Advisor ("CTA") and fintech provider for commodity and rate markets, has been tracking the developments related to yesterday’s staff advisory issued by the Commodity Futures Trading Commission ("CFTC") regarding the need for certain CTAs to register their trading facilities as Swap Execution Facilities ("SEFs").
The advisory provides critical clarification on certain trading activities that may trigger compliance with the SEF registration requirement in the Commodity Exchange Act (CEA) and CFTC regulations. AEGIS believes these clarifications necessitate SEF registration for the trading facilities of it and each of its competitors and strongly supports the staff advisory given it will lead to an increasingly fair and efficient marketplace for managing commodity price volatility.
"We are proud to be among the many CTAs that help customers navigate complex swap markets to hedge commercial risk,” said Bryan Sansbury, CEO of AEGIS. “The SEF registration requirement will drive consistent pre-trade communication, published rulebooks, improved technology, and the ability to fully reconstruct trade details - benefiting all participants in these markets.”
As previously announced, AEGIS has established a subsidiary, AEGIS SEF, LLC ("AEGIS SEF"), to facilitate the negotiation and execution of bilateral derivative contracts between commercial end-users, financial counterparties, and other market participants. AEGIS filed its SEF application on February 3, 2021.
Last week, AEGIS SEF announced that Bruce Aust, former Vice Chairman of NASDAQ and Jason Lish, current Chief Security Officer of Lumen Corporation, would join the AEGIS SEF Board.
AEGIS SEF proposes to enable (i) a request-for-quote (RFQ) function to allow negotiations between market participants, and (ii) a central limit order book (CLOB). Justin McCrann will serve as President of AEGIS SEF.
"Yesterday’s announcement provides important clarification on the application of SEF registration for CTAs," said Justin McCrann, President of AEGIS SEF. "We made an important decision to begin our registration process last year and look forward to continuing our work with the CFTC to obtain regulatory approval.”
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AEGIS enables companies to manage their commodity price and interest rate risk through leading software and advisory capabilities. AEGIS provides unique insight into commodity and rate markets, develops and executes cash flow protection strategies, and manages all hedge program activities through a SaaS-enabled E/CTRM and analytics platform. AEGIS was recently named the Hedge Advisor of the Year for an unprecedented fifth consecutive year. AEGIS is headquartered in The Woodlands, Texas. To learn more, visit AEGIS’ website at www.aegis-hedging.com.
About the AEGIS SEF
AEGIS SEF LLC, a subsidiary of AEGIS Hedging Solutions, will facilitate the negotiation and execution of bilateral swap contracts for market participants. The AEGIS SEF, pending regulatory approval, will include (i) a request-for-quote (RFQ) function to allow negotiations between clients and financial counterparties and (ii) a central limit order book (CLOB). Trading on the AEGIS SEF will be used to execute Permitted Transactions. The AEGIS SEF is headquartered in The Woodlands, Texas. For more information, please go to https://aegis-hedging.com/swap-execution-facility.
Commodity interest trading involves risk and, therefore, is not appropriate for all persons; failure to manage commercial risk by engaging in some form of hedging also involves risk. Past performance is not necessarily indicative of future results. There is no guarantee that hedge program objectives will be achieved. Neither this trading advisor nor any of its trading principals offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. The Commodity Futures Trading Commission does not pass upon the adequacy or accuracy of this Advisor’s disclosure and has not reviewed or approved the contents of this press release.
You can find the official CFTC release here.
You can download the entire CFTC Letter No. 21-19 here.
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