Trad-X and Eurex Clearing launch CCP swap service
22 February 2016 London
Image: Shutterstock
Trad-X, a global interest rate derivatives platform provider, has implemented a new central limit order book for EurexOTC cleared products to tackle European Market Infrastructure Regulation (EMIR) requirements.
The central limit order book will initially focus on highly liquid euro interest rate swap tenors, including two-, five-, 10- and 30-year swaps, associated spreads and flys, and bund, bobl and Schatz asset swaps.
The new service will enable participants to switch positions from one central counterparty (CCP) to another and optimise their margin exposure and boost liquidity.
London-based Trad-X will also run auctions to provide CCP switch service between Eurex Clearing and LCH.Clearnet.
The new CCP switch service follows the launch of a similar market for US dollar products on TraditionSEF.
Dan Marcus, CEO of Trad-X, said: “Since launch we have set the industry standard for transparent and reliable pricing and believe there is a clear opportunity to pool our symbiotic strengths and further improve the trading and clearing experience.”
“The addition of EurexOTC cleared products to the Trad-X universe, along with our award winning CCP switch service, provides users with greater post-trade flexibility and represents another example of tradition and the industry developing solutions to increase cost efficiencies and liquidity in this market.”
Philip Simons, global head of fixed income trading and clearing sales at Eurex, added: “The biggest benefits result from clearing euro interest rate derivatives at Eurex Clearing when combining existing liquidity in Eurex’s fixed-income futures with over-the-counter IRS.”
“The equilibrium that exists amongst our end client portfolios, with a natural balance of payers and receivers, ensures any pricing differential between CCPs is genuine and based on real market supply and demand factors.”
The central limit order book will initially focus on highly liquid euro interest rate swap tenors, including two-, five-, 10- and 30-year swaps, associated spreads and flys, and bund, bobl and Schatz asset swaps.
The new service will enable participants to switch positions from one central counterparty (CCP) to another and optimise their margin exposure and boost liquidity.
London-based Trad-X will also run auctions to provide CCP switch service between Eurex Clearing and LCH.Clearnet.
The new CCP switch service follows the launch of a similar market for US dollar products on TraditionSEF.
Dan Marcus, CEO of Trad-X, said: “Since launch we have set the industry standard for transparent and reliable pricing and believe there is a clear opportunity to pool our symbiotic strengths and further improve the trading and clearing experience.”
“The addition of EurexOTC cleared products to the Trad-X universe, along with our award winning CCP switch service, provides users with greater post-trade flexibility and represents another example of tradition and the industry developing solutions to increase cost efficiencies and liquidity in this market.”
Philip Simons, global head of fixed income trading and clearing sales at Eurex, added: “The biggest benefits result from clearing euro interest rate derivatives at Eurex Clearing when combining existing liquidity in Eurex’s fixed-income futures with over-the-counter IRS.”
“The equilibrium that exists amongst our end client portfolios, with a natural balance of payers and receivers, ensures any pricing differential between CCPs is genuine and based on real market supply and demand factors.”
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