trueEX, the first exchange approved by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM) for swaps, has launched the first execution venue for real-time execution, processing and novation of non-cleared interest rate swaps.
By streamlining the workflow, trueEX is defraying much of the significant complexity and operational burdens arising from mandatory margining of non-cleared swaps, which has already been implemented in the U.S., Canada and Japan and due to go live in Europe in Q1 2017.
By providing a standardized electronic protocol to communicate the trade information, pricing, credit support annex (CSA) details and margin payments, the trueEX platform enables streamlined and accurate negotiation and assignment of unlimited numbers of swaps. This vastly improves the current costly, time-consuming and error-prone manual process for transacting non-cleared swaps, which represent as much as 30% of the entire swaps marketplace.
Ken Lester, Managing Director at NISA Investment Advisors, a leading fixed income and derivatives asset manager, commented:
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.
Barry Cohen, Managing Director at Societe Generale, added:
In an environment where staying at the forefront of trends in ecommerce remains key to success, Societe Generale is proud to partner with a market leader like trueEX. This new platform helps drive our leadership position in non-cleared currencies, where we were the first dealer to transact dealer-to-client IRS in PLN, MXN and BRL via trueEX. Moreover, trueEX helps us manage a significantly more efficient and cost-effective workflow.