First Electronic Tri-party Client Interest Rate Swap Trade Executed
Reduces Trade Processing Time to Less than Thirty Minutes from Execution to Clearing
September 30, 2010 (London); Tradeweb, a leading global provider of fixed income and derivatives markets, today announced the execution of the first ever, fully electronic tri-party interest rate swap trade, involving client, dealer, clearing member and clearing house. The transaction was executed on the Tradeweb platform between MPS Capital Services (the investment banking arm of Banca Monte dei Paschi di Siena, the oldest bank in the world) and Credit Suisse. The trade was affirmed by both parties, with Barclays Capital being the clearing member. The trade was cleared by LCH.Clearnet, with the total transaction taking less than 30 minutes to complete.
MPS is leading other clients in the adoption of central clearing, expected to become the industry standard in Europe and in the United States following pending regulation. The bank recently began backloading $200 billion of interest rate swap trades through LCH.Clearnet, in preparation for streamlining the execution process. MPS has been executing interest rate swaps on Tradeweb for more than four years.
"MPS has blazed a trail for the marketplace," said Enrico Bruni, Managing Director and Head of European Rates at Tradeweb. "We anticipate that a broad range of clients will now move quickly to adopt the central clearing model, which along with electronic trading, represents the inevitable future of the industry."
"We are very happy to have been involved in this landmark transaction," said Matteo Bertotti, Head of Fixed Income Derivatives at MPS Capital Services. "More efficient markets will benefit all market participants in the long run; this represents a blueprint for how the workflow will look in the months and years ahead for many derivatives trades."
"This is an important step toward broader automation in the global derivatives markets," said Shane O'Cuinn, Head of European Swaps Trading at Credit Suisse. "As part of our ongoing commitment to delivering market-leading solutions to our clients, we are pleased to be the dealer for the first fully-electronic tri-party swap trade."
"The trade executed by MPS on Tradeweb is a testimony to the progress made to improve trade processing in clearing OTC derivatives and to embrace the principles at the core of regulatory reforms," said Ray Kahn, Head of OTC Derivatives Clearing at Barclays Capital. "As an extension of our ongoing agreement to clear interest rate swaps on behalf of MPS, we were pleased to once again be at the forefront of developments in OTC derivatives clearing."
"We would like to congratulate Tradeweb and their partner banks for taking another significant step in the adoption of automation in client clearing. Clearing trades intra-day through SwapClear helps to reduce systemic risk and our leading risk management solutions continue to benefit both clients and clearing members alike," said Michael Davie, CEO of the SwapClear service at LCH.Clearnet.
Tradeweb is the leading multi-dealer-to-client trading platform for Rates products, including Government Bonds, Interest Rate Swaps, TBA-MBS and U.S. Agencies. For European Government Bonds and Interest Rate Swaps, Tradeweb PLUS functionality also allows access to attributed, live, executable prices from individual dealers. Institutional investors rely on Tradeweb's automation of these fast-moving markets for real-time pricing, and the ability to put leading dealers in competition with each other. Clients may then identify the best price or rate, and execute their trade within seconds.
Tradeweb is a leading provider of online markets and a pioneer in the development of electronic trading and trade processing. The company provides services in the fixed income and derivatives markets to clients in more than 50 countries. Since 1998, Tradeweb has operated a global fixed income and derivatives trading network, which harnesses the distribution of the major investment banks with over 2,000 institutional clients. In 2008, Tradeweb introduced inter-dealing broking capability with the acquisition of voice broker Hilliard Farber and subsequently launched Dealerweb, an electronic IDB platform. Tradeweb Retail provides a trading and sales application to fixed income brokers and traders.
About MPS Capital Services
MPS Capital Services is the Investment Bank of Banca Monte dei Paschi Spa, the third Italian Banking Group, created in 2007 through the integration of MPS Finance, the high reputated Investment Bank, and MPS Banca per l'Impresa, the Bank for project finance, corporate finance and special lending.
About Banca Monte dei Paschi di Siena
Banca Monte dei Paschi di Siena, founded in 1472 is considered to be the oldest bank in the world. Today's parent company of Italy's third largest banking group, the bank holds significant market shares in all areas of business.
The Montepaschi Group is present all over Italy and in the major international financial centres, with operations ranging from traditional banking activities to Private Banking (mutual funds, wealth management, pension funds, and life insurance policies) and Corporate Banking (project finance, merchant banking, and financial advisory), with a special vocation for household accounts and small and medium enterprises. With some 33,000 employees and over 3,000 branches, the Montepaschi Group offers its services to more than six million customers.