Garban-Intercapital says it has selected Computershare's ASTS screen-based trading technology as the foundation for its proposed electronic platform for interactive trading and confirmation of interest rate swaps.
Michael Spencer, chief executive of Garban-Intercapital, says the interest rate swaps market is ready for a major technology change. "We anticipate that screen based trading of vanilla swaps will gradually emerge over the next few years, initially with partially automated quotation and execution."
According to the Isda, the International Swaps Dealers Association, the global swaps market continues to grow exponentially and reached $60 trillion in outstandings by mid 2000. This is roughly five times larger than the global government bond market.
Comptershare's ASTS screen-based trading system is already deployed in Finland, Norway and New Zealand, and is soon to be installed at the Pacific Exchange for stock options trading.
Computershare CEO Chris Morris says the platform is capable of trading a diverse range of financial instruments and has been benchmarked at in excess of 10,000 orders per second.
Garban-Intercapital already provides electronic trading of fixed income securities over its ETC platform. In January 2001, electronic trading on ETC in US treasuries reached $175 billion and trading in Japanese government bonds began. The inter-dealer broker first signalled its intentions to deliver a similar system for trading interest rate derivatives late last year.
Steve McDermott, chief executive of electronic trading at Garban-Intercapital, says the company's strategy is to combine its strength in voice broking with the efficiencies of electronic trading. "We do not believe that all markets will become 100% electronic and our hybrid approach allows for an efficient marketplace to exist which is partially electronic and partially voice brokered," he says.