The trading liquidity of a derivatives contract (and therefore the regulatory obligations to which the contract is subject) should be determined by reference to specific objective criteria, such as liquidity data. The use of objective criteria would increase transparency by giving market participants a clear understanding of when swaps will be mandatorily moved from the bilateral market to centralized trading venues such as registered exchanges or platforms.

Derivatives contracts that are subject to mandatory centralized trading should be able to trade on a number of different types of centralized venues. This would enable regulators to achieve a flexible trade execution regime that would allow contracts to be traded across jurisdictions without being subject to costly duplicative compliance obligations and regulatory arbitrage.

Trading venues should offer flexible execution mechanisms that take into account the trading liquidity and unique characteristics of a particular category of swap. Under this principle, regulators will encourage centralized trading by permitting parties to communicate and execute trades freely so long as the parties comply with the requirement to execute the specified trades on a centralized venue.

Regulatory consistency of centralized trading rules across jurisdictions.

Proper oversight of trading venues.

Transparency of centralized trading.

The facilitation of substituted compliance determinations on trade execution.

Change the process for making mandatory trade execution determinations so that they are based on a set of objective criteria that is supported by applicable data. Currently, the CFTC's made available to trade (MAT) rules allow a SEF to decide whether a swap is subject to mandatory trading based solely on subjective factors that a SEF deems relevant. According to ISDA, MAT determinations should be made by the CFTC and should be based on global minimum volumes of daily trading over a significant period of time for each swap.

Allow flexible execution methods on a SEF, which would help market participants execute trades in more volatile periods when liquidity falls in response to changing market conditions. Specifically, ISDA reiterated that there is no statutory or policy-related basis for the CFTC to:

Permit flexible execution of block trades. According to ISDA, the CFTC rules requiring a block trade to be executed "away" from the SEF platform creates an arbitrary distinction between on-SEF and off-SEF trading that is not supported by the CEA and makes it difficult to execute large transactions. The CFTC should also clarify that for a package transaction to be entitled to block-trade treatment, only the MAT swap component(s) of the relevant package should be subject to the reporting time delay for block trades. (For more details on block trades, see Practice Note, US Derivatives Regulation: CFTC Swap Data Reporting and Recordkeeping Rules: Final CFTC "Block Trade" Rules. For details on package transactions, see Legal Updates, Exchange-trading Timeline for Package Swaps Set by CFTC and CFTC Further Delays Package Swaps Exchange Trading.)

Simplify transaction confirmation requirements for non-cleared swaps that are traded on a SEF. The CFTC's final SEF rules require SEFs to obtain, prior to the time of execution, paper copies of the privately negotiated master agreements between counterparties to a trade in uncleared swaps. As a result, SEFs must request, store, manage and consult numerous complex bilateral agreements. According to ISDA, this requirement contravenes normal market practice for trading platforms, in which the vast majority of swaps are confirmed electronically, and discourages trading of non-cleared swaps on SEFs.

Re-examine the obligations of SEFs as self-regulatory organizations (SROs). According to ISDA, the financial-resources requirements for SEFs need to be more flexible and the CFTC should therefore: