Consultancy Rubus says it has delivered a 3 million, two-year design and development project to provide the first real-time swaps trading system for financial services company Swapstream. The system allows large banks and brokers to trade interest rate swaps and OTC derivatives online in real-time, speeding up transactions, reducing errors and cuttings costs.
The Swapstream system, fully developed, tested and due to go live to the financial community in May this year, matches sellers and buyers of swaps and financial derivatives and conducts the trade through a fully-automated process based on Internet technology. To date swaps have remained one of the few financial services handled by telephone or direct manual interaction between individual brokers and banks.
Swapstream chose Rubus to deliver the project after consultation regarding design, development, implementation, testing and support with a number of companies. These included Logica, Sapient and Sybase.
Phillip Mc Connell, CTO of Swapstream, said: “We chose Rubus as our development partner based on the quality and professionalism of their people, their thorough understanding of our market, their technical excellence and their in-depth knowledge of Internet technology”.
Marcus Grubb, CEO of Swapstream, said: “To build a dealing system that works and gains acceptance with dealers required a partner that could understand and handle what are extremely complex market operations. Rubus consultants have fully justified the faith we put in them”
The Swapstream trading system is required to cope with large volumes of transactions and data. It has to handle complex fee and commission structures – which are much more complicated than for non-OTC markets – and to cope with a wide range of remuneration flows between brokerages and banks.
The Swapstream system provides features never previously available in the swaps and derivatives marketplace, including a personalised real-time view of market depth, instant online credit checking, automated linkage of related marketplaces, and immediate confirmation via a variety of electronic channels.
David Hesketh, co-founder and sales director at Rubus, commented: “This was an exciting and complex project for Rubus, spanning two years in total. The development of the system was broken down into multiple phases with delivery and acceptance at each stage. This ensured the project scope did not creep and that the system met the specifications every step of the way. The end result is that Swapstream, with the help of Rubus, has developed the first multi-broker, multi-bank, real-time dealing system for the swaps and OTC markets.”
Rubus designed the Swapstream system to connect to any other existing private or multi-party information system in the swaps market. For example, it takes price feeds from the Futures market and is equipped with APIs to connect with private systems of brokers, banks and market makers. The connection ability means that Swapstream provides full straight-through processing for swaps, a critical factor in speeding up transactions.