Swap Execution Facility Order Book Requirement for Permitted Transactions

Key dates

2026-08-26

The CFTC proposed the amendment in 91 FR 55030, RIN 3038-AF79, and opened the public-comment period.

2026-09-25 Deadline

Public comments on the proposed rule must be received by the CFTC.

Suggested considerations

• SEF compliance teams should distinguish Required Transactions from Permitted Transactions under 17 CFR 37.9 and confirm that any planned platform changes preserve Order Book and RFQ functionality for Required Transactions.
• SEFs may wish to inventory Permitted Transaction products, execution protocols, customer usage, liquidity, pre-trade transparency, surveillance dependencies, and annual Order Book operating costs before deciding whether to retain, modify, or discontinue optional Order Book functionality.
• SEFs relying on CFTC No-Action Letter No. 25-24 should assess whether their current implementation remains consistent with the proposal and should monitor the eventual final rule rather than treating the NPRM as binding law.
• SEF applicants may wish to reassess platform design and launch costs because the proposal could remove the need to build an Order Book solely for Permitted Transactions.
• Swap dealers, major swap participants, and other active SEF users should assess whether removal of an optional Order Book could affect execution practices, liquidity access, pre-trade transparency, best-execution analysis, or internal trading procedures for Permitted Transactions.
• Interested firms should consider submitting comments to CFTC docket CFTC-2026-1882, including quantified technology, staffing, infrastructure, surveillance-integration, and market-impact data, by September 25, 2026.
• Compliance teams should continue applying CEA section 2(h)(8), 17 CFR 37.9, and applicable Part 43 reporting obligations unless and until a final rule changes them.

What changed

The proposed amendment would revise 17 CFR 37.3(a)(2) so that a SEF must, at a minimum, offer an Order Book as defined in 17 CFR 37.3(a)(3) for Required Transactions as defined in 17 CFR 37.9(a)(1). It would remove the obligation to offer an Order Book for Permitted Transactions, defined in 17 CFR 37.9(c)(1) as transactions that do not involve a swap subject to the CEA section 2(h)(8) trade-execution requirement. SEFs could continue offering Order Books for Permitted Transactions voluntarily and could use any execution method permitted under 17 CFR 37.9(c)(2). The proposal would not change the requirement that, except for block trades, Required Transactions be executed through an Order Book or an RFQ System that solicits quotes from at least three unaffiliated market participants under 17

Who is affected

• Registered swap execution facilities
• SEF applicants and entities developing SEF trading platforms
• Market participants voluntarily executing Permitted Transactions on SEFs
• Swap dealers and major swap participants using SEFs for Required or Permitted Transactions
• Technology, market-surveillance, and trading-system providers supporting SEFs

Related regulations

• Commodity Exchange Act section 2(h)(8)
• 17 CFR 37.3(a)(2)
• 17 CFR 37.3(a)(3)
• 17 CFR 37.9(a)(1)
• 17 CFR 37.9(a)(2)(i)
• 17 CFR 37.9(c)(1)
• 17 CFR 37.9(c)(2)
• 17 CFR Part 43
• 17 CFR 145.9
• CFTC No-Action Letter No. 25-24