MTS, part of London Stock Exchange Group, launched a new electronic multilateral exchange system for European unsecured money market trading in Euro, MTS Depo. The first transaction was executed between two Italian banks.
The MTS Depo was motivated by growing demand from money market traders to access more diverse forms of funding, while enabling users like as corporate treasurers to achieve a return on capital. MTS Depo is available for MTS Repo users and can be accessed by dealers in Eurozone countries.
The new platform enables users to negotiate short term borrowing and lending transparently and efficiently with highly flexible trade terms ranging from overnight to a year. MTS Depo offers trading protocols such as a central limit order book and bilateral trading functionalities.
MTS is currently expanding its client base and predicts a wide range of credit institutions connected by the end of the third quarter of 2020. The European Central Bank estimated a wholesale unsecured money markets turnover for 2020 in Europe of €127 billion ($137 billion) per day.
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 users benefit from a from straight-through processing utilizing the TARGET2 messaging platform, facilitating real-time gross settlement. In addition, moving unsecured money market trading onto MTS’s platform allows market participants to reduce manual processing, generate efficiencies and lower the barrier to market entry in the OTC market.
The new platform, MTS Depo, is run on the same trading infrastructure allowing wholesale government bond trading on MTS.
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