Trad-X partners with Eurex Clearing to expand interest rate swaps market presence


Trad-X, the global interest rate derivatives trading platform of Compagnie Financiere Tradition SA (SWX:CFT), today announces a set of initiatives to increase liquidity and bolster its presence in the global interest rate swap (IRS) market.

Trad-X will launch a new central limit order book (CLOB) for EurexOTC cleared products today. The CLOB will initially focus on the most liquid Euro interest rate swap tenors such as 2y, 5y, 10y and 30y swaps, associated spreads and flys, and BUND, BOBL and SCHATZ asset swaps.

In addition, Trad-X will conduct auctions to provide a transparent and liquid central counterparty (CCP) switch service between Eurex Clearing and LCH.Clearnet. The new service will give participants the opporunity to efficiently move positions from one CCP to another and to optimise their margin exposure.

The roll-out of a CCP switch service for Euro denominated IRS comes after the successful launch of a similar market for USD products on the CFTC-registered Swap Execution Facility (SEF) – TraditionSEF, where Trad-X forms the backbone of Interest Rate Swap CLOB liquidity.

Trad-X will also launch a new public reference page showing EurexOTC cleared swap mid-markets underpinned by Trad-X’s prices. The Trad-X CLOB receives continuous two-way streaming from a variety of market participants, including 15 of the largest global market participants. The reference page, which is set to assist market participants with issuance and pricing purposes, will be displayed under TREU on BLOOMBERG.

Dan Marcus, CEO of Trad-X, says:

“Since launch we have set the industry standard for transparent and reliable pricing and believe there is a clear opportunity to pool our symbiotic strengths and further improve the trading and clearing experience. The addition of EurexOTC cleared products to the Trad-X universe, along with our award winning CCP switch service, provides users with greater post-trade flexibility and represents another example of Tradition and the industry developing solutions to increase cost efficiencies and liquidity in this market. Together, these initiatives will strengthen Trad- X’s position as the pre-eminent central limit order book venue for interest rate swap trading.”

“As an MTF we support fair and open access to all participants including market infrastructure providers such as Eurex Clearing. We believe the establishment of a transparent CLOB gives our customers greater choice and helps provide a fair and competitive environment.”

Philip Simons, Global Head of Fixed Income Trading and Clearing Sales at Eurex, says:

“We see strong demand from clients wanting to realise the benefits of switching positions and moving risk seamlessly between CCPs to efficiently manage and optimise their capital and margin. Trad-X’s excellent track record as the leading electronic IRS CLOB globally makes them a natural partner for this initiative.

“The biggest benefits result from clearing Euro interest rate derivatives at Eurex Clearing when combining existing liquidity in Eurex’s fixed-income futures with OTC IRS. The equilibrium that exists amongst our end client portfolios, with a natural balance of payers and receivers, ensures any pricing differential between CCPs is genuine and based on real market supply and demand factors.

“Using our expertise and experience in the risk management of listed and OTC derivatives we will continue to work on new initiatives to develop additional services and products that will provide further benefits to our clients and the market.

You can view the full announcement about the collaboration by clicking here.

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Trad-X partners with Eurex Clearing to expand interest rate swaps market presence

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