SwapsWire announced today that its participating broker-dealers have agreed to pay over £12 million in advance ticket fees to SwapsWire in exchange for a discount on future volumes. SwapsWire are now able to offer the discount because of the significant volume increase in trades that are booked on the system. SwapsWire handled a record 58,000 tickets in February, almost double the volume a year ago.
Chip Carver, SwapsWire’s CEO, said, "This commitment by our broker-dealers is a strong signal to the dealing community as a whole, and their buy-side clients, of the strategic importance of SwapsWire to this market. We get as close to the person who executed the trade as close to the time they executed. We’ve been focusing heavily in 2005 on adding features which support buy-side clients. For example, we are the first and only multi-dealer platform to fully automate the consent and confirmation process under the ISDA Novation Protocol."
Nelius De Groot, COO of Global Rates for Deutsche Bank in London, said, "SwapsWire provides us with huge benefits by reducing the operational risk and workload associated with interest rate derivative confirmations. Our clients can participate in these benefits by using SwapsWire free of charge. Deutsche Bank is keen to see as many of its clients as possible using SwapsWire for interest rate derivatives. With 99.9% of our eligible trades booked and confirmed on trade date, we have found SwapsWire to be the fastest and most efficient service available."
Kenneth Tremain, Managing Director, Head of North American Interest Rate Derivative Trading and Government Bond Trading at Citigroup, and a Director of ISDA said "Citigroup is now embarking on a concerted effort to make sure as many of our clients as possible can benefit from the innovative functionality that is offered by SwapsWire. We know from experience that confirming trades this way leads to a huge reduction in the time taken to confirm trades. Furthermore we find that when trades are electronically confirmed, there is a corresponding reduction in downstream problems with cash settlements. The process is smoother right from start to finish."
SwapsWire attributes the volume growth to a combination of new dealers and clients using the system, new products and features, and growth in the underlying OTC derivative markets. Two additional major dealers have started using the system in 2006, bringing the total number of participating dealers to 28. The number of buy-side clients has doubled in the last three months. A survey of a subset of dealers using SwapsWire found that about 50% of all their interest rate swap trades are now confirmed on SwapsWire bilaterally or with inter-dealer brokers or both.