Traiana’s pre-trade clearing certainty initiative continues to gain momentum and has received the support of leading futures commissions merchants (FCMs) and trading venues.
Barclays, BofA Merrill Lynch, Citi, Goldman Sachs, JP Morgan and leading buyside institutions have put their support behind the central risk management infrastructure to be the first clearing firms to use Traiana’s CreditLink service to manage swap clearing limits, with deployments underway to meet regulatory deadlines.
The service is in live production operation and is connected to and supported by twelve potential swap execution facilities (SEFs) and designated contract markets (DCMs), including GFI Group, iSwap, Javelin, MarketAxess, TeraExchange and trueEX, and has been built in consultation with major clearinghouses, including CME Group, IntercontinentalExchange and LCH.Clearnet Group.
MarketAxess was the first trading venue to complete production certification for order screening with CreditLink. JP Morgan was the first to complete production certification as an FCM.
Delivered using Traiana’s CreditLink service, it offers clearing firms and buyside firms the ability to manage trading and clearing limits in real-time for interest rate, credit and foreign exchange (FX) swaps. Firms will be able to pre-screen orders to trade swaps prior to execution in low latency, providing greater certainty of clearing acceptance at the time of execution. Designed to maximise access to liquidity and reduce limit fragmentation for all market participants, CreditLink supports request-for-quote and request-for-streaming trading using a centralized limit check (Ping model) and also gives FCMs and their clients the ability to distribute limits directly to specific trading venues or CCPs to minimise latency (Push model), which is important for buyside firms, executing brokers, interdealer brokers, market makers and exchanges using central limit order books.
“Pre-trade clearing checks are an important part of ensuring a fully automated and seamless process for the centralised clearing of OTC derivatives,” says Mike Yarian, global head of agency derivative services at Barclays. “This initiative provides a pre-trade, low-latency solution to check the certainty of clearing across multiple venues, in compliance with the requirements of Dodd-Frank legislation.”
“Traiana is very pleased to be a part of such a significant initiative for the swaps market,” says Andrew Coyne, chief executive of Traiana. “By working together with the leading FCMs, venues and clearinghouses, buyside firms will be able to comply with new clearing and trading mandates without fragmenting their limits or diminishing their access to liquidity.”