An increase in the amount of business being executed electronically will likely mean more clients trade directly with the major derivatives houses, according to Jonathan Chenevix-Trench, ISDA board member and managing director and head of European fixed income and global head of interest rates and foreign exchange at Morgan Stanley in London.
Chenevix-Trench explained that smaller end users of products such as interest-rate swaps have traditionally been pitched wider margins for their trades, which they have executed with smaller regional firms. The transition to electronic trading will allow those making smaller trades to migrate to firms with larger trading franchises with narrow spreads, he said.
