IRS Market Gets a New Platform
Posted by Colin Lambert. Last updated: March 6, 2023
Change continues to feature in the interest rate swaps (IRS) market with Euronext and Wematch announcing a collaboration to provide an IRS trading platform. Last month TransFICC announced a new IRS trading service, and reports surfaced that Project Amber, another platform intended to serve the market has been put on ice.
Euronext’s MTS vfixed income venue and Wematch have launched the imaginatively-named MTS Swaps by Wematch.live, a Web-based inter-dealer trading venue for the IRS market. The new platform can be accessed via Wematch.live, and the firms say it digitises voice trading workflows, and bridges the gap between legacy voice trading models and pure electronic alternatives by offering innovative negotiating functionalities.
The firm also talk “game-changing” features compared to traditional voice-based workflows, which they cite as increased efficiency and productivity through automation; reduced conduct risk through clear and transparent electronic audit trails, the elimination of chat from workflows; and trade protection through pre-trade price and size controls and auto-protect features. The solution also offers a fee schedule with a choice of “all-you-can-eat” or “pay-per-trade” fees.
MTS Swaps supports straightforward digital negotiation and execution of package transactions including Gadget, Curve, Flies, 3m/6m Tenor Basis, ESTR/Euribor Basis, and Eurex/LCH Basis. It will launch with inter-dealer order-book functionality, and dealer-to-client RFQ will follow later this year. It will also provide negotiating functionalities, such as meet-in-the-middle and upsize.
“There has been a major structural shift toward electronic trading in the interest rate swaps market since the introduction of new regulation in the wake of recent macroeconomic uncertainty,” observes Angelo Proni, CEO of MTS – Euronext Group. “MTS Swaps combines MTS’s network, regulated markets, connectivity, and Rates franchise with Wematch’s flexible, agile technology to deliver an innovative solution that puts the trader front and centre.”
The new platform has been welcomed by the banks, with Julian Baker, co-head of euro linear trading at JP Morgan saying, “We welcome new avenues that boost access to liquidity and increase workflow efficiency in the dealer-to-dealer market.”
Anna Lucarelli, European head of corporate and public sector Rates sales ex DACH at Deutsche Bank, adds, “We see clear value in this new proposition from MTS and Wematch, with the opportunity to accelerate dealing workflows and help firms to increase productivity and reduce costs.”