BGC Eyes SEF Push with Management Reshuffle

BGC Partners has tapped James Cawley as the chief executive for its swap execution facility (SEF) subsidiary, BGC Derivatives Markets, as it looks to aggressively accelerate its hold in the interest-rate swaps market.

He joins the New York-based interdealer broker from Javelin Capital Markets, where he founded and headed the company since 2009.

In addition to Cawley, BGC has also appointed Angelo Toglia, the interim CEO of BGC Derivatives Markets, as its new chief operating officer.

“In the year since BGC’s Sef began operating, our premier hybrid and fully electronic trading technology has continued to expand and improve to meet the growing needs of our clients,” says Phillip Norton, global head of eCommerce at BGC.

“I am confident Mr. Cawley will ensure BGC stays at the forefront of the derivatives marketplace and he will be ably supported by Angelo Toglia.”

The $700 trillion global swaps markets is in a period of transition as regulators hope to shift trading in OTC derivatives onto electronic platforms to ensure transparency and mitigate risk.

However, participation from the buy-side on SEFs has been relatively slow, much to the annoyance of sell-side institutions and interdealer brokers.

On Thursday, BGC reported interest rate volumes on its SEF had grown 37.4% to 61,843 transactions during the third quarter, and announced it will continue to convert its voice and hybrid financial services desks to electronic ones.

“Our financial services business increased its pre-tax distributable earnings by 85%. This dramatic expansion was led by an approximately 40% rise in revenues and a 74 percent increase in pre-tax distributable earnings from BGC’s fully electronic businesses,” says Shaunn Lynn, president, BGC.

“As we continued to convert our voice and hybrid desks to electronic execution, our e-businesses generated approximately $25 million in revenues and $14 million in pre-tax distributable earnings during the quarter.”