A top U.S. regulator said his agency would scrutinize a practice in the multitrillion-dollar swaps market that some investors say has been discouraging trading, the Wall Street Journal reported today. Timothy Massad, chairman of the Commodity Futures Trading Commission, on Wednesday said that the agency would look into the practice known as “name give-up,” in which traders’ identities are disclosed during post-trade processing, when they were intended to remain anonymous. The need to preserve anonymity “is an issue we’re looking at and thinking about,” Massad said. Many market participants seek anonymity so they can keep their trading strategies and business preferences secret from competitors. Some traders feel disclosure of their identity after a trade has been completed defeats that purpose. The 2010 Dodd-Frank legislation that overhauled the derivatives market doesn’t directly address the issue of anonymity. The CFTC is going to ask questions about why transactions that start with anonymous negotiations don’t remain anonymous.
