Traiana, the leading provider of pre-trade risk and post-trade processing solutions, announces today that it has added the support of a further seven futures commissions merchants (FCMs) to its CreditLink service ahead of the November 1 regulatory deadline for pre-trade screening of trades conducted on Swap Execution Facilities (SEFs).
These include BNP Paribas, BNY Mellon, Deutsche Bank, RBS, UBS and Wells Fargo as well as other globally recognized clearing firms. These FCMs are in addition to Barclays, BofA Merrill Lynch, Citi, Goldman Sachs and J.P. Morgan, who were all previously announced. Traiana now has a total of 15 FCMs supporting CreditLink, a significant proportion of the market.
"While the industry is still implementing many aspects of the end-to-end infrastructure required for certainty of clearing of trades executed on SEFs, the CreditLink service is in live production operation and ready for pre-trade screening of orders on SEF venues." said Nick Solinger, Head of Product Strategy and Chief Marketing Officer, Traiana.
CreditLink is connected to or being implemented by swap execution facilities (SEFs) and designated contract markets including Bloomberg's SEF, GFI Group, ICAP/iSwap, ICE Swap Trade, Javelin, MarketAxess, SwapEx, TeraExchange, Tradeweb Markets, Tradition/Trad-X, trueEX and Tullet Prebon/tpSWAPDEAL and has been built in consultation with major clearing houses.
CFTC regulations require that a clearing member define limits and must carry out pre-trade credit checks on clients' orders prior to execution on SEFs. To meet these regulatory requirements, CreditLink acts as a centralized hub and provides trading platforms, clearers/prime brokers, executing banks and buy-side firms the ability to monitor and manage pre- and post-trade credit in real-time across trading venues in a consolidated view.
On September 26, 2013, the first trading venue completed a live credit default swap (CDS) index trade using Traiana's CreditLink service as the credit hub to verify pre-trade credit limits. JP Morgan acted as the clearing member for the major buy-side participant on the trade. Since the October 2 deadline for SEFs, additional venues have tested and conducted numerous live trades.
Traiana's CreditLink service offers clearing firms and buy-side firms the ability to manage trading and clearing limits in real-time for interest rate, credit and foreign exchange swaps. Firms are able to pre-screen orders to trade swaps prior to execution in low latency, providing certainty of clearing acceptance by their FCM at the time of execution. Designed to maximize access to liquidity and reduce limit fragmentation for all market participants, CreditLink supports request-for-quote and request-for-streaming trading using a centralized limit check (Ping model) and also gives FCMs and their clients the ability to distribute limits directly to specific trading venues or CCPs to minimize latency (Push model), which is important for buy-side firms, executing brokers, interdealer brokers, market makers and exchanges using central limit order books.