A group of leading sell-side banks has set up a working group that will focus on the creation of an open industry standard protocol for client and trader enablement on electronic trading platforms.
Currently, enabling clients to trade with dealers on OTC electronic platforms is a manual process, requiring a significant amount of rekeying of data from internal dealer systems onto those of the venues.
In January investment banks came together to try and fix the problem, launching the Trading Enablement Standardization Initiative (Tesi) and vowing to work with execution venues and other stakeholders to create a tighter integration between the dealer systems and the venues.
The working group says that its first goal is to ensure the smooth migration of swaps trading onto Swap Execution Facilities by automating the movement of clients onto the new platforms. The scope will extend to other OTC cash and derivative markets in later phases.
The banks - including BNP Paribas, Commerzbank, Credit Suisse, Goldman Sachs, JP Morgan, RBS, and UBS - argue that adoption of the new standards will bring faster client enablement, more operational efficiency, fewer straight-through processing failures, and help meet more stringent operational regulatory requirements.
Simon Maisey, global head, rates e-commerce, JP Morgan, says: "While the trading flows in electronic markets have been automated for some time now, the processes for enabling clients have remained highly manual. The adoption of automation standards by the industry will allow for the improvement of client service, controls and efficiency. This development is particularly timely given the increased regulatory demands on electronic trading infrastructure."