Eurex Repo, a subsidiary of the derivatives exchange Eurex, introduced a new user interface this week for trading in euro and Swiss franc repos.


Eurex Repo participants can use the new interface, called Collateral Overview,  to trade securities and delivery baskets faster and with greater flexibility, since all segments can be assigned according to the customers' needs.


The new multi dimensional user interface replaces the unidimensional GUI (Graphical User Interface) commonly used in the past. This is the second functional innovation made by Erex Repo this year: In July 2003, Eurex Repo already very successfully introduced a new facility for the German Finance Agency (Finanzagentur der Bundesrepublik Deutschland). This facility allows new issues of German government bonds to be used in repo trading as early as two days prior to the value date.


Eurex Repo reported further that the average outstanding volume in its repo markets rose by more than 55 percent during the third quarter of 2003, to 46 billion euros. The euro repo market showed especially strong growth: The outstanding volume on a daily basis, at 13.5 billion euros on average during the third quarter, was three times higher than the previous year's Q3 level, with peaks as high as 22.6 billion euros.


The Swiss franc repo market also showed substantial growth with an average of 32.5 billion euros in outstanding volume for the third quarter, about 25 percent higher than in Q3 2002.


With the new user interface and the expansion of its participant network, Eurex Repo is on track for further growth. In the meantime, 148 banks have been admitted to trading on Eurex Repo. Increased interest in trading on Eurex Repo has been especially strong among international market participants: There are now 28 participants active in the euro repo market, twice as many as in November 2002.


The CHF market has 120 participants active at present. However, Eurex is expecting another 80 participants to come on board within the next two years, when the Swiss National Bank(SNB) starts managing its Lombard facility through Eurex Repo, as announced, in January 2004 (as of 2004, a bank that has a Lombard credit limit can avail itself of this facility on short notice through Eurex Repo to bridge an unexpected liquidity squeeze).


Smooth processing of transactions on Eurex Repo is guaranteed by Eurex Clearing AG, which functions as the central counterparty for the buyer and the seller. Eurex is the only exchange organisation worldwide to provide the market with all clearing services for the entire fixed-income segment, in addition to trading.


copyright hedgeweek 2003


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