trueEX, a growing swap execution facility (SEF), has unveiled an execution venue for real-time execution, processing of non-cleared interest rate swaps, helping allay the operational burdens and difficulties stemming from the mandatory margining of non-cleared swaps.
The impetus behind this launch is the establishment of a comprehensive margining framework that has risen in North America and Japan, with Europe slated to follow shortly. The new SEF will effectively enable dealers and their buy-side clients to reap the benefits of transparent execution, along with streamlined innovation.
Fixing what’s broken
This initiative is important for venues and clients as it helps facilitate the flow of communication for trade information and pricing, along with margin payments – traditional methods can lack accurate negotiation and other costs, along with potentially error-ridden processing. trueEx estimates that such instances constitute upwards of 30% of the entire swaps marketplace, providing a needed driver for change from the existing status quo.
According to Ken Lester, Managing Director at NISA Investment Advisors, in a comment on the launch of the new execution venue: “We are very pleased that innovative firms like trueEX are responding to pressing needs in the fixed income markets. Introducing much needed efficiencies, automation and scale for non-cleared derivatives helps all market participants adjust to margin, capital and regulatory changes that are taking place.”
“The development also lays the foundation for additional improvements that will be needed in the swaptions, total return swaps and repo markets. We are excited to work with trueEX to help in this endeavor as they have proven to be very capable of creating platforms that greatly enhance the user experience,” he explained.
“This is a watershed moment for the non-cleared swaps market. By opening up the marketplace to more efficient execution and processing, we can vastly improve the experience of trading and managing these systemically important instruments for both the front and back office,” reiterated Christina Landry, Head of Product Development at trueEX Group LLC.