Derivs - Interest Rate

A number of swap execution facilities (SEFs) may be forced into a fight for survival as they struggle to attract liquidity and trading volumes. That has raised questions over how SEFs can survive a derivatives market undergoing heavy reconstruction, report Beth Shah and Daniel O’Leary.

Some swap execution facilities could face closure as they struggle to attract liquidity and trading volumes. Market participants are beginning to question what needs to occur for SEFs to survive in the new and evolving derivatives market structure, report Beth Shah and Daniel O’Leary.

BlackRock and Tradeweb Markets have co-created an electronic trading offering for the rates and derivatives markets.

Smaller swap execution facilities could face consolidation as some platforms report low trading volumes.

Live streaming prices for Eris Exchange’s swap futures are now available through UBS’ cross-asset agency execution platform, known as Neo. End-users can also trade Eris swap futures by calling the UBS execution services desk.

The International Swaps and Derivatives Association has launched the ISDA 2014 Collateral Agreement Negative Interest Protocol, designed to provide certainty about how the payment of interest on posted collateral is calculated in a negative interest rate environment under ISDA collateral documentation.

Short CNY swaps have been offered on the back of weak domestic data, while the five year has been better bid on profit-taking flows. As a result, the 1s/5s curve slope steepening move has extended, writes Deirdre Yeung.

Tomas Zikas, New York-based managing director and head of SwapEx, State Street’s swap execution facility, has left the firm.

ICAP’s European swap execution facility went live Monday, following temporary registration approval from the US Commodity Futures Trading Commission to operate a multi-asset class SEF. This makes it the first non-US domiciled venue to be approved.

Recent rhetoric from the People's Bank of China (PBoC) has triggered good paying in short-end CNY swaps. But the 1s/5s curve spread has steepened on mid-sector underperformance, writes Deirdre Yeung.

Clearing members are putting pressure on clearinghouses to make amendments to their rulebooks, according to lawyers, who say that regulators have thus far approached clearing from the perspective of the CCP rather than taking into account the risks imposed on clearing members.

The chairman of the European Securities and Markets Authority has written to the European Commission to request the frontloading obligation for clearing under European Markets Infrastructure Regulation be limited to derivatives cleared between the entry into force of the regulatory technical standards and the beginning of the clearing obligation. Under EMIR, counterparties are currently required to frontload any trades that are caught when the asset class becomes available on an authorised CCP, which kicked off when NASDAQ OMX became the first clearinghouse to receive EMIR approval on March 18.