Tradeweb Markets, the leading global provider of fixed income and derivatives marketplaces, supported the first electronic indicative pre-trade credit check between a buy-side client and a futures commission merchant (FCM) for an over-the-counter derivatives transaction.
Using the electronic credit checking solution from Tradeweb, the customer successfully received an indication of available credit from J.P. Morgan as the clearing bank and executed a cleared interest rate swap trade.
The new global regulatory environment for trading swaps will require a majority of financial institutions to begin clearing derivatives trades. It's increasingly important that clients have efficient and cost-effective tools that give them real-time information about their ability to clear; especially for market participants preparing for the mandatory clearing deadline on June 10, 2013 under Dodd-Frank.
Integrated at the point of execution, the Tradeweb functionality enables customers to check for credit with their clearing banks using ping- or push-based protocols ahead of executing a swap transaction in an efficient and cost-effective way, minimizing latency and ensuring information security and confidentiality.
"More clients are taking advantage of innovative technology to better inform their derivatives trading experience and execute more efficiently on Tradeweb every day," said Lee Olesky, CEO of Tradeweb. "As the first marketplace to successfully demonstrate electronic pre-trade credit checking with an FCM for cleared swaps, we are helping our clients prepare to trade under impending derivatives regulation."
"Tradeweb has taken an important step toward pre-execution certainty of clearing," said Andrés Choussy, Global Co-Head of OTC Clearing at J.P. Morgan. Tradeweb's ability to give an indication of available FCM credit lays the foundation for the ultimate goal: a legally binding credit commitment from both the FCM and the clearing house."
In addition to pre-trade credit-checking, Tradeweb offers clients flexible access to liquidity through a range of trading protocols and connectivity to all major clearinghouses currently handling CDS and IRS transactions. The Tradeweb derivatives platform provides real-time price transparency and will help market participants quickly and easily comply with pending rules that mandate electronic trading and central clearing for most derivatives trades. Tradeweb plans to register as a swap execution facility (SEF) in the U.S., pending final rules from regulators.
More than 20 liquidity providers and over 300 institutional clients currently participate in Tradeweb's multi dealer-to-client derivatives markets. Since 2005, Tradeweb has successfully built and operated platforms in the interest rate, credit, equity, and foreign exchange markets; on which clients have executed more than 155,000 trades.