ICAP has launched i-Swap, its electronic interest rate derivative platform in the US for trading of US Dollar interest rate swaps (IRS).
Barclays, BofA Merrill Lynch, Citi, Deutsche Bank and JP Morgan are supporting i-Swap by providing streaming prices.
An additional 30 banking and investing institutions have access to trading on the platform. Initial levels of participation on the platform were encouraging and are expected to increase over the course of the coming weeks and months.
i-Swap is a trading platform for interest rate derivatives that enables customers to choose optimal execution methods, either through a broker or directly into the platform. i-Swap is open to banks that are clearing members of a recognised clearing house for interest rate derivatives. Non-clearing member banks will continue to have access via ICAP’s brokers. ICAP launched its trading platform, i-Swap for Euro IRS, in September 2010 and since then it has experienced increasing use by market participants and seen trading activity grow. Today around a third of all ICAP’s 1 – 30 year Euro IRS trades are executed electronically through the platform.
The i-Swap USD platform provides new levels of transparency and a full audit trail. Once the final rules associated with running a Swap Execution Facility (SEF) arising from the Dodd-Frank Act are published by the CFTC, i-Swap USD intends to register as a SEF and operate in compliance with the rules and regulations.
Michael Spencer (pictured), group chief executive of ICAP, says: “I’m delighted that we have launched i-Swap in the US It marks a significant milestone in the development of the wholesale financial markets. Trading in interest rate swaps is moving increasingly electronic. i-Swap will meet new regulatory requirements and facilitate the transition from a predominately voice-brokered environment to a cost-efficient and transparent electronic trading venue for customers. We’re confident that i-Swap in US dollars will replicate the success it has had in Europe with Euro swaps as the market adopts to this new way of trading interest rate swaps.”
Gary Cameron, managing director, head of USD IRS trading at JP Morgan, says: “We’re pleased to be a part of the launch of the i-Swap platform in the US. The markets continue to migrate towards electronic trading and the platform will help satisfy our execution, reporting and transparency requirements.”