The Woodlands, Texas, May 23, 2022 — AEGIS Hedging Solutions (“AEGIS”) today announced that its application to form a registered Swap Execution Facility (”SEF”) has entered the final phase of approval. AEGIS SEF, a regulated subsidiary of AEGIS, will operate in compliance with rules introduced under the Dodd-Frank Act to improve transparency in derivative transactions.
The Commodity Futures Trading Commission (“CFTC”) lifted the stay on AEGIS SEF’s application on May 20th, indicating substantial completion and adherence to all applicable regulations, reporting, and oversight requirements. Assuming typical progressions, AEGIS SEF anticipates being fully operational early in the third quarter.
“AEGIS SEF is excited to deliver innovation and compliance to advisor-assisted hedging,” said Justin McCrann, President of AEGIS SEF. “The underlying rigor and technology offered by AEGIS SEF will modernize hedging transactions and provide increased efficiency and transparency for all participants.”
The CFTC issued Staff Advisory 21-19 to clarify existing regulations and conditions that require Commodity Trading Advisors and Introducing Brokers (including AEGIS and similar firms) to negotiate and execute transactions on SEFs. While most existing SEFs focus on interest rates and/or foreign exchange contracts, AEGIS SEF will provide a venue to negotiate and execute commodity contracts in compliance with CFTC guidance.
“Companies exposed to volatile commodity prices need access to compliant advisors when negotiating and executing complex hedging contracts,” said Bryan Sansbury, CEO of AEGIS. “We want to thank the CFTC for their engagement, the hundreds of customers we support each day, and the financial counterparties that bring liquidity to AEGIS SEF.”
Once live, AEGIS SEF will operate under a Rulebook guiding the execution of hedging transactions via (i) a request-for-quote (RFQ) function to allow negotiations between Commercial End Users and Financial Counterparties, and (ii) a central limit order book (CLOB). Trading on AEGIS SEF will be focused on Permitted 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 who manage their commodity exposures and/or emission footprints. AEGIS has unmatched technology and expertise to deliver market insights, tailored hedge strategies, efficient trade execution, and full-cycle management of hedge positions – all designed for regulatory compliance. Building on its core energy hedging capabilities, AEGIS has recently completed four acquisitions to extend its expertise in 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 hedging solutions for an unprecedented sixth consecutive year. To learn more, visit 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 with an application pending approval from the Commodity Futures Trading Commission (“CFTC”). Upon approval, AEGIS SEF will operate markets for commodities, interest rate swaps and other instruments. AEGIS SEF will offer a venue for trading in uncleared bilateral OTC swaps and intends to operate central limit order books (CLOB) and request for quote (RFQ) systems, as well as offering block trade capabilities via counterparties. 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 AEGIS SEF, LLC nor any of its affiliated entities 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. Hedge advisory services are performed by the registered commodity trading advisor AEGIS CTA, LLC, a wholly-owned subsidiary of AEGIS Hedging Solutions, LLC.
This press release is not required to be, and has not been, filed with the CFTC. The CFTC does not pass upon the adequacy or accuracy of this disclosure. Consequently, the CFTC has not reviewed or approved this press release.
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You can find the official press release here.