(Bloomberg) — James Cawley, who pushed regulators to require that more derivatives be traded on public markets, has joined BGC Partners Inc. to help the New York-based brokerage boost its share of trading in interest-rate swaps.
Cawley, founder and former head of Javelin Capital Markets LLC, started this month as chief executive officer of BGCs swap-execution facility, he said yesterday in a telephone interview.
The goal is to build out the Sef but to focus immediately on the rates business within the U.S., Cawley said, referring to dollar interest-rate swaps. We have some work to do and a hill to climb. What attracted me to that is the challenge and the resources that these guys have to build that type of business.
The $700 trillion global swaps market is in a period of transition as new regulations seek to have most transactions guaranteed at central clearinghouses and traded on exchanges. U.S. rules put in place by the Commodity Futures Trading Commission are designed to boost competition and transparency in swap prices and have more trading occur on public markets instead of directly between banks.
BGCs platform competes with platforms owned by ICAP Plc., Tradeweb Markets LLC and Bloomberg LP, the parent company of Bloomberg News.
Cawley ran Javelin when the firm became the first, in October 2013, to seek a CFTC requirement that interest-rate swaps be traded on the platforms. Buyers and sellers debated for months how many types of trades should be required on those venues, and therefore subject to more price competition.
Trading Rules
Javelin narrowed its plans after swap buyers said the original version would cause too many types of trades to occur on the platforms. The CFTC approved Javelins plan in January.
I think whoever went first was to a certain extent going to be pilloried, Cawley said. There were customers who liked what I did. There were customers who didnt like what I did. You cant please everybody all the time.
Cawley said his time at Javelin gave him exposure to the development of the swap-trading rules.
I found myself at the center of a lot of dialog which impacted how the rules have played out today, he said. But those who dominate the Sef field going forward will be the ones with the resources and flexibility to serve the customer need quickly and directly.
