Thomson TradeWeb, the online fixed-income trading platform owned by Thomson, has teamed up with six major liquidity providers to launch a multi-dealer Euro Interest Rate Swaps trading market.
The founding members are JPMorgan, Barclays Capital, Morgan Stanley, Dresdner Kleinwort Wasserstein, HSBC and ABN AMRO. Thomson says more liquidity providers are set to join the platform in the coming weeks.
The Euro Swaps platform will be rolled out initially to a “select group” of European buy-side institutions, followed shortly by TradeWeb’s full buy-side customer base and the rest of the institutional market.
The aim is to use a ‘request for quote’ model (RFQ) to enable institutional investors to request a price from up to three dealers, and then move from electronic execution to full ISDA-compliant electronic confirmation through TradeWeb’s settlement automation technology.
“Working closely with the leading Swaps liquidity providers and our global client base, TradeWeb’s Swaps platform allows the analysis, execution and ISDA confirmation of Swaps – simply and electronically,” says Lee Olesky, President of Thomson TradeWeb. “This is a natural evolutionary step for us, leveraging our experience from the 10 electronically traded products already on the network. In January alone, we averaged over $135 billion daily volume across the TradeWeb platform in all products. We expect to roll out more functionality and other currencies to our interest rate swaps product over the course of the year.”
Bill Winters Co-Chief Executive Officer of the Investment Bank at JPMorgan, says providing clients with the ability to trade interest rate swaps electronically will increase efficiency and transparency with less operational cost. “As a market leader in derivatives, we have supported TradeWeb since the inception of their platform, consistent with JPMorgan’s commitment to continued innovation in the derivatives market,” he says.
Eric Bommensath, Head of Fixed Income Derivatives and Government Bond Trading at Barclays Capital, says Barclays Capital has seen “at first-hand” the benefits and opportunities that electronic execution will create for the global swap market.
“HSBC’s e-strategy is to provide liquidity where and when our clients want it,” adds Mike Powell, Head of HSBC Global Markets, Europe and the Middle East. “Our decision to support the new TradeWeb Swaps platform demonstrates our commitment to deliver greater choice to our clients.”
Robert Lempka, Managing Director, Head of Euro Flow Trading at Dresdner Kleinwort Wasserstein, says: “Providing liquidity to Dresdner’s customers over TradeWeb is an important part of our rates strategy. We’ve had a very good experience with TradeWeb on the bond side and we are convinced this will continue with the new Swaps product.”
Paul Humphrey, Global Head of Fixed Income eBusiness at ABN AMRO, said: “We are happy to be part of the founding IRS group with TradeWeb, which will provide customers with efficient, electronic access to our interest rate swap liquidity. Given the rapid growth and commoditisation of the derivatives markets, and the consequent development and acceptance of electronic trading platforms, we believe that this move will help us provide our customers with the transparency they demand.”
The new platform is also supported by the buy-side. Jrme Olivier, Head of Trading and Jrme Guiot-Dorel, Head of Swaps at BRED BANQUE POPULAIRE, comments: ” We have always been satisfied by the electronic trading platform provided by TradeWeb on bonds. We are happy to see the TradeWeb launch for the Swaps market and are very confident in it. The major players as liquidity providers are very likely to make it a success. We look forward to participating on the system.”
Andreas Bamberg, Head of Derivatives at Dekabank said: “We believe this move is very timely. The Interest Rate Swaps market’s phenomenal growth over the past few years, means the opportunity for increased market transparency and efficiency through a platform like TradeWeb, is a very exciting prospect indeed.”
The multi-dealer platform will allow trading and confirmation in 3-month and 6-month EURIBOR and in EONIA (the Euro overnight index average), spot, forward and curve trades.