JPMorgan has become the second Wall Street firm to go live with the T-Zero post-trade straight-through processing platform for credit derivatives.
T-Zero - a spin off from credit trading outfit Creditex - said earlier this month that the system was being used to process live trades between Goldman Sachs and hedge fund KBC Alternative Investment Management.
The system has been designed to electronically capture and re-direct all trade details, assignments, allocations and other relevant details in the processing of credit derivatives. The platform automatically allows counterparties to send affirmed trades to the Depository Trust and Clearing Corporation for same-day or T+0 legal execution.
Guy America, head of European credit trading at JPMorgan, says: "The platform is precisely what the market needs to underpin its growth, and we look forward to continuing to work with T-Zero to bring further benefits to our broad client base."
Mark Beeston - former chief operating officer for credit trading at Deutsche Bank who joined T-Zero as president earlier this year - says the firm presented the platform to over 40 of JPMorgan's clients. He expects to sign up a number of other credit derivatives dealers in the near future.
The credit derivatives industry is under increasing pressure from regulators such as the Federal Reserve and the UK's Financial Services Authority (FSA) to clear up a mounting backlog of trade confirmations.
Regulators are concerned by the high level of unsigned confirmations outstanding between counterparties with, in some cases, transactions remaining unconfirmed for months.
In September The International Swaps and Derivatives Association (ISDA) said the world's major derivatives dealers had agreed to use a new electronic messaging protocol designed to remove some of the paper clogging up back offices.