Source: London Stock Exchange
MTS, part of London Stock Exchange Group, has launched MTS Depo, a new electronic multilateral exchange system for European unsecured money market trading denominated in Euros.
Trading has already begun with an overnight transaction executed between two Italian banks.
The new trading platform was launched in response to growing demand from money market traders for access to more diverse forms of funding, while enabling participants such as corporate treasurers to achieve a return on capital. MTS Depo is available to all users of MTS Repo and can be accessed by dealers in Eurozone countries.
MTS Depo allows participants to negotiate short term borrowing and lending transparently and efficiently with highly flexible trade terms ranging from overnight to one year. It provides multiple trading protocols including a central limit order book and bilateral trading functionalities.
MTS is currently onboarding new customers and expects to have a wide range of credit institutions connected by the end of Q3, 2020. In 2020, The European Central Bank estimated turnover in wholesale unsecured money markets in Europe alone is €127bn ($137bn) per day.
Fabrizio Testa, CEO of MTS Markets, said: “MTS’s Repo markets have gone from strength to strength, with record volumes last year. However, our clients were keen to be able to deploy the same flexible technology solutions and gain efficiency in the unsecured money markets as well. There was a clear demand from both our clients and the broader market for the same approach to be brought to the cash deposit market, and we have responded. MTS Depo now provides traders with access to a wide market of participants, flexible trading options and reliable post-trade services.”
MTS Depo customers trading a range of money market contracts benefit from straight-through processing using the TARGET2 messaging platform, facilitating real-time gross settlement.
Additionally, moving unsecured money market trading onto MTS’s electronic platform enables market participants to reduce manual processing, generating efficiencies and lowering the barrier to market entry in what remains a voice driven, over the counter (OTC) market.
The new MTS Depo market is run on the same trading infrastructure which enables wholesale government bond trading on MTS.