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Tradeweb: Best Execution Platform – During periods of high volatility or market stress, it’s vital that hedge fund managers continue to benefit from robust access to liquidity through efficient electronic markets. Electronic trading plays a significant role in promoting stability in financial markets, and multi-asset execution venues like Tradeweb, also help to keep them connected.

The firm, which builds and operates electronic marketplaces across rates, credit, equities and money markets, believes regulatory change can be a significant catalyst for change, potentially forcing a behavioural shift towards broader adoption of electronic trading workflows. Bhas Nalabothula, head of European interest rate derivatives at Tradeweb, comments, “The advent of the Securities Financing Transactions Regulation (SFTR) and Uncleared Margin Rules (UMR) is expected to drive further electronification of markets, similar to the Dodd-Frank clearing and trading mandates in the US, and the MiFID II / MiFIR rules in Europe. In both cases, we witnessed not only growth in new customers joining Tradeweb, but also in traded volume by existing clients moving more of their flow onto our platform.”

Nalabothula notes that as the electronic execution needs of hedge funds continue to evolve, Tradeweb looks to expand their toolkit with a broad range of trading protocols. For example, the firm’s request-for-market (RFM) protocol has been very popular among its hedge fund customers. He says, “RFM gives investors more control over the information that they share with the market. So, we have expanded our liquidity in RFM across currencies, and also enabled clients to receive two-way pricing for interest rate swap lists.”

Today, market participants are more aware and focused on data than ever before. Tradeweb leverages its expertise in connecting different markets to optimise data, in a way that helps improve the trading experience and outcome for users worldwide. “For example, we help them identify the best counterparties for each trade via the provision of streaming pricing. Meanwhile, our transaction cost analysis solution allows them to assess their trading strategies, evaluate ways to reduce costs, and prove best execution,” Nalabothula adds.

Another key trend in the hedge fund industry has been the growth in automation of trading processes. Tradeweb was the first platform to launch an automated execution tool for institutional investors back in 2012. Since then, Tradeweb has expanded its Automated Intelligent Execution (AiEX) solution to 26 of its products, including interest rate derivatives. “This was done to help our customers capitalise on strategic trading opportunities, increase their reactivity to market conditions, and streamline and expedite their workflow. The expansion of AiEX to enhance execution in swaps has opened the door to different ways of generating alpha when implementing trading strategies,” explains Nalabothula.

To keep abreast of client needs and demands, Tradeweb integrated portfolio optimisation analytics with its interest rate derivatives platform last year. The firm became the first regulated trading venue to offer access to initial margin analytics from Cassini Systems and OpenGamma, helping clients to minimise trade life-time costs and prove best execution. 

These additions evidence Tradeweb’s commitment to delivering better price discovery and more efficient execution. By working closely with its extensive client network, the firm is able to build new trading technologies and enhance existing ones ahead of its competitors. “We are unique among our peers in that we cater for a variety of client requirements, by developing innovative and flexible functionality that can be deployed across asset classes,” Nalabothula concludes. 

Bhas Nalabothula
Head of European Interest Rate Derivatives, Tradeweb

Bhas Nalabothula is head of European Interest Rate Derivatives at Tradeweb. Since joining the firm in 2013, Bhas has been instrumental in developing the interest rate swaps business for the Tradeweb Swap Execution Facility. He has worked closely with buy-side clients and liquidity providers to develop electronic trading protocols and workflow solutions. Prior to joining Tradeweb, Bhas was as a member of the US Interest Rate sales team at Citigroup where he covered institutional derivatives clients. Bhas holds a Bachelor of Science in Computer Science from Carnegie Mellon University.

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