Interdealer broker technology subsidiary GFInet has launched a credit default Swap mark-to-market service, making actual market price data available for mid-office use for the first time.
The service has been in beta testing with 12 top dealers for several months, Jeffrey Tober, head of credit derivatives at GFInet. "The service has been very well received and we are delighted to now introduce a more formalised service to the broader market," he says. "To date default Swap price information has been difficult to obtain, especially for product controllers and risk managers. Our goal is to bring greater transparency to the market."
The prices are provided directly from GFI's global credit derivatives brokerage desks, says Tober, and represent the actual, unbiased levels at which market participants are willing to trade.
Richard Williams, head of credit derivatives, Abbey National financial products, believes the introduction of market based, independent price verification service will increase the confidence that institutions have in the prices at which portfolio positions are marked. "With greater confidence in the pricing and monitoring process, a broader range of institutions should find the market attractive for both trading and hedging purposes," he adds.
The product will have different levels of service, intended to meet the needs of a variety of clients, ranging from the largest global institution to a corporation just starting to use default Swaps, says Deborah Schwartz, global product manager credit derivatives at GFInet.
Mark-to-market prices can be delivered via a secure browser connection and fed directly into mid-office systems. The service is customisable, says GFInet, enabling subscribers to create and configure entity lists and access only the information relevant to them.