Derivatives Transaction Execution Facility

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A Derivatives Transaction Execution Facility (DTEF) is a board of trade that is registered with the CFTC as a DTEF. It is subject to fewer regulatory requirements than a contract market, and to qualify as a DTEF, an exchange can only trade certain commodities (including excluded commodities and other commodities with very high levels of deliverable supply) and generally must exclude retail participants. Retail participants may trade on DTEFs through futures commission merchants with adjusted net capital of at least $20 million or registered commodity trading advisors that direct trading for accounts containing total assets of at least $25 million.[1]

The Dodd-Frank Act, signed into law July 16, 2010, replaces the Derivatives Transaction Trading Facility with a new type of entity, the swap execution facility (SEF). Under Dodd-Frank, swaps and other derivatives available for clearing will be required to trade either on an designated contract market (DCM), or on a SEF. After the effective date for Dodd-Frank provisions, DTEFs will cease to exist.[2]

References

  1. Derivatives Transaction Execution Facility (DTEF). CFTC.
  2. Open Meeting on Twelfth Series of Proposed Rules under the Dodd-Frank Act. CFTC.