Knight Capital Group (Nasdaq: NITE) today announced the appointments of Andrew P. Scott as Managing Director to oversee the operations of NetDelta, a credit default swap platform that reduces counterparty risk, and Michael S. Shapiro, Director, who is responsible for leading NetDelta's sales effort.
Mr. Scott is an eight-year veteran of Merrill Lynch where he was the lead attorney for credit derivative products and a senior representative for key industry and regulatory initiatives. Prior to joining Knight, Mr. Shapiro was responsible for sales, business strategy and product development for TradeWeb LLC's credit derivatives trading platform, including leading a global effort to increase post-trade business for CDS and IRS.
"Knight is very pleased to have Andrew and Michael on board at NetDelta," said Steven Sadoff, Executive Vice President and Chief Information Officer at Knight Capital Group. "Both are professionals who have been involved in building out the infrastructure of the CDS market. Their talent and experience are an important addition to the NetDelta team as we develop the business."
NetDelta allows institutions that trade credit derivative products to minimize and diversify their counterparty exposure while maintaining their bilateral trading relationships. An alternative to central clearing, NetDelta addresses the root cause of systemic risk through the introduction of standard contracts and the use of pooled credit. Counterparty risk is minimized by multi-laterally netting transactions and using participants' credit lines to reallocate exposures so that their market exposure remains neutral.
"NetDelta is in prime position to help participants minimize counterparty risk in the CDS market," Mr. Sadoff added. "Credit derivative volumes have grown exponentially over the past few years, and with such growth comes operational challenges. NetDelta can help its platform participants address concerns regarding risk management, trade settlement and balance sheet usage. Indeed, counterparty risk management has become increasingly important, and both the industry and regulators are actively looking for ways to reduce systemic risk in the market. We believe NetDelta has a solution that addresses risk concerns without hindering the ability of market participants to invest and trade CDS."