@OneChicago - is the idea to compete with SS swap business that primes are providing? I can see how that would be interesting and beneficial. Are you going to provide a smart EFP setup too?
Our products compete with equity finance desks generally. We do not route orders and I don't envision every doing that. Firms can continue to execute EFPs and report the activitiy to the exchange. Our STARS offering replicates an EFP but because the transfer of the underlying takes place T+1 it is a superior trade for the customer.
Clarifying language to extend IRC 1058 to exchange traded products was in a piece of legislation that was not part of the broader tax reform package due to its bipartisan support. The Democrats did not want anything in the tax vehicle that they would want to vote for. A bizarre political reality. Non-taxpayers and those who take mark-to-market accounting are using the STARS transaction for both Sec Lending and Repo but for all other taxpayers clarity waits for another day.