European fixed income network MTS is teaming with short term swaps platform ATFox and interdealer broker HPC in an effort to make inroads into the nascent electronic swaps business.
The three parties have signed an agreement which is expected to lead to a platform comprising the ATFox swaps franchise, the liquidity of HPC and the distribution network and market-making model of MTS.
ATFox says the move will accelerate its growth in the short-term swaps business and act as a foundation for expansion into medium- and long-term swaps as those markets evolve. The company will also incorporate elements of the MTS business model with regard to corporate governance and close involvement of market participants in setting the strategic direction of the platform.
Gianluca Garbi, CEO of MTS, says its member banks have been seeking an electronic solution to swaps trading which can work within the MTS framework.
"The ability for day-to-day interaction with the HPC swaps desk and its pool of liquidity is key to the success of this venture," he adds.
Frederic Metz, who is chairman of both ATFox and HPC, says: "Together, MTS, ATFox and HPC are set to offer the low-cost, liquid and efficient electronic swaps trading platform the inter-dealer market has been waiting for."